Contract
Exhibit 10.1
2
This
AGREEMENT AND PLAN OF MERGER AND REORGANIZATION (this “Agreement”) is entered into as
of December 4, 2009 by and among Metalline Mining Company, a Nevada corporation
(“Metalline”), Metalline
Mining Delaware Inc., a Delaware corporation and wholly-owned subsidiary of
Metalline (“Merger
Sub”), and Dome Ventures Corporation, a Delaware corporation (“Dome”). Capitalized
terms used herein (including in the immediately preceding sentence) and not
otherwise defined herein shall have the meanings set forth in Section 7.1
hereof.
WHEREAS,
Metalline and Dome entered into a Letter of Intent on November 13, 2009 setting
out the terms by which Metalline would acquire all of the issued shares of Dome
by way of a merger of a wholly owned subsidiary of Metalline with and into
Dome;
WHEREAS,
the Board of Directors of Dome (“Dome Board”) has unanimously
(a) determined that it is in the best interests of Dome and its stockholders,
and declared it advisable, to enter into this Agreement with Metalline and
Merger Sub, (b) approved the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby,
including the Merger, and (c) resolved, subject to the terms and conditions set
forth in this Agreement, to recommend adoption and approval of this Agreement by
the stockholders of Dome;
WHEREAS,
the Board of Directors of Metalline (the “Metalline Board”) has (a)
determined that the Merger is consistent with and in furtherance of the
long-term business strategy of Metalline and fair to, and in the best interests
of, Metalline and its stockholders and has approved and adopted this Agreement,
the Merger and the other transactions contemplated by this Agreement and (b)
resolved, subject to the terms and conditions set forth in this Agreement, to
recommend that the stockholders of Metalline vote to approve the issuance of
shares of common stock, par value $0.01 per share, of Metalline (“Metalline Common Stock”) to
the stockholders of Dome pursuant to the terms of the Merger (the “Share Issuance”);
WHEREAS,
Metalline, Dome and certain directors and officers of Dome have agreed to enter
into Voting Agreements (the “Dome Voting Agreements”),
providing that, among other things, such stockholders will vote their shares
of common stock, par value $0.001 per share (“Dome Common Stock”), in favor
of this Agreement, the Merger and the other transactions contemplated by this
Agreement;
WHEREAS,
Metalline, Dome and certain directors and officers of Metalline have agreed to
enter into Voting Agreements (the “Metalline Voting Agreements”),
providing that, among other things, such stockholders will vote their shares of
Metalline Common Stock in favor of the Share Issuance; and
WHEREAS,
for federal income tax purposes, the Merger is intended to qualify as a
reorganization under the provisions of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the “Code”);
WHEREAS,
the parties desire to make certain representations, warranties, covenants and
agreements in connection with the Merger and the transactions contemplated by
this Agreement and also to prescribe certain conditions to the
Merger.
NOW,
THEREFORE, in consideration of the premises, and of the representations,
warranties, covenants and agreements contained herein, the parties agree as
follows:
ARTICLE
1
PRIVATE
PLACEMENT FINANCING; METALLINE BOARD OF DIRECTORS
1.1 Dome Private
Placement. Subject to Dome having arranged financing on terms
acceptable to Dome, in its sole discretion, on or before January 10, 2010, Dome
will complete through Cormark Securities Inc. (“Cormark”) and a syndicate of
other Canadian investment dealers (together with Cormark, the “Agents”) a private placement of
its securities (the “Dome
Private Placement”) aggregating $13,010,000 by way of a private placement
of special warrants or subscription receipts with each special warrant or
subscription receipt automatically converting into a share of Dome
Common Stock immediately prior to the Effective Time.. The proceeds
of the Dome Private Placement will be held in trust pending closing of the
Merger. If this Agreement terminates prior to the Effective Time the
proceeds held in trust will be returned to investors in accordance with the
terms of the agreements governing the Dome Private Placement.
1.2 Metalline Private
Placement. On or before December 23, 2009, Dome will arrange
for purchasers to subscribe for 6,500,000 units of Metalline at a price of $0.46
per unit, each unit consisting of one share of Metalline Common Stock and one
share purchase warrant, two of which warrants will entitle the holder to
purchase a further share of Metalline Common Stock at a price of $0.57 per share
exercisable if the Merger Agreement terminates in accordance with its terms
prior to the Effective Time (the “Metalline Private
Placement”). The warrants issued in the Metalline Private
Placement shall be cancelled as of the Effective Time of the
Merger. The proceeds of the Metalline Private Placement will be
available for use by Metalline for general corporate purposes on closing of the
Metalline Private Placement.
1.3 Conditions. The
Dome Private Placement and the Metalline Private Placement will be subject to
receipt of any required approvals of the TSX Venture Exchange and the NYSE Amex,
as applicable.
ARTICLE
2
THE
MERGER
2.1 The Merger. On the
terms and subject to the conditions set forth in this Agreement, and in
accordance with the Delaware General Corporation Law (the “DGCL”), at the Effective Time,
(a) Merger Sub will merge with and into Dome (the “Merger”), and (b) the separate
corporate existence of Merger Sub will cease and Dome will continue its
corporate existence under the DGCL as the surviving corporation in the Merger
(the “Surviving
Corporation”).
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2.2 Closing. Upon the
terms and subject to the conditions set forth herein, the closing of the Merger
(the “Closing”) will
take place at 9:00 a.m., Mountain time, as soon as practicable (and, in any
event, within three (3) business days) after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger set forth in
Schedule C hereto (other than those conditions that by their nature are to be
satisfied at the Closing), unless this Agreement has been terminated pursuant to
its terms or unless another time or date is agreed to in writing by the parties
hereto. The Closing shall be held at the offices of Xxxxx Figa & Will, PC,
6400 S. Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx Xxxxxxx, XX, 00000, unless
another place is agreed to in writing by the parties hereto, and the actual date
of the Closing is hereinafter referred to as the “Closing Date”.
2.3 Effective
Time. Subject to the provisions of this Agreement, at the
Closing, Dome, Metalline and Merger Sub will cause a certificate of merger (the
“Certificate of Merger”)
to be executed, acknowledged and filed with the Secretary of State of the State
of Delaware in accordance with the relevant provisions of the DGCL. The Merger
will become effective at such time as the Certificate of Merger has been duly
filed with the Secretary of State of the State of Delaware or at such later date
or time as may be agreed by Dome and Metalline in writing and specified in the
Certificate of Merger in accordance with the DGCL (the effective time of the
Merger being referred to herein as the “Effective Time”).
2.4 Effects of the
Merger. The Merger shall have the effects set forth herein and
in the applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, from and after the Effective Time, all property,
rights, privileges, immunities, powers, franchises, licenses and authority of
Dome and Merger Sub shall vest in the Surviving Corporation, and all debts,
liabilities, obligations, restrictions and duties of each of Dome and Merger Sub
shall become the debts, liabilities, obligations, restrictions and duties of the
Surviving Corporation.
2.5 Certificate of Incorporation;
By-laws. At the Effective Time, (a) the certificate of
incorporation of Merger Sub as in effect immediately prior to the Effective Time
shall be the certificate of incorporation of the Surviving Corporation until
thereafter amended in accordance with the terms thereof or as provided by
applicable Law; and (b) the by-laws of Merger Sub as in effect immediately prior
to the Effective Time shall be the by-laws of the Surviving Corporation until
thereafter amended in accordance with the terms thereof, the certificate of
incorporation of the Surviving Corporation or as provided by applicable
Law.
2.6 Directors and
Officers. The directors of Merger Sub immediately prior to the
Effective Time shall, from and after the Effective Time, be the directors of the
Surviving Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation and by-laws of the Surviving
Corporation. The officers of Dome immediately prior to the Effective
Time shall, from and after the Effective Time, be the officers of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the certificate of incorporation and by-laws of the Surviving
Corporation.
ARTICLE
3
EFFECT
OF THE MERGER ON CAPITAL STOCK
3.1 Effect of the Merger on Capital
Stock. At the Effective Time, as a result of the Merger and without any
action on the part of Metalline, Merger Sub or Dome or the holder of any capital
stock of Metalline, Merger Sub or Dome:
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(a)
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Cancellation of Certain Dome
Common Stock. Each share of Dome Common Stock (each, a
“Share” and
collectively, the “Shares”) that is owned
by Metalline, Merger Sub or Dome (as treasury stock or otherwise) or any
of their respective direct or indirect wholly-owned subsidiaries will
automatically be cancelled and retired and will cease to exist, and no
consideration will be delivered in exchange
therefor.
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(b)
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Conversion of Dome Common
Stock. Each Share issued and outstanding immediately
prior to the Effective Time (other than Shares to be cancelled and retired
in accordance with Section 3.1(a)), will be converted into the right to
receive the number of shares of Metalline Common Stock (the “Merger Consideration”)
equal to the Exchange Ratio. The Exchange Ratio shall be equal
to 47,724,561 divided by the number of Shares of Dome issued and
outstanding immediately prior to the
Merger.
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(c)
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Cancellation of Shares.
At the Effective Time, all Shares will no longer be outstanding and
all Shares will be cancelled and retired and will cease to exist, and,
subject to Section 3.3, each holder of a certificate formerly representing
any such Shares (each, a “Certificate”) will cease
to have any rights with respect thereto, except the right to receive the
Merger Consideration in accordance with Section 3.2
hereof.
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(d)
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Conversion of Merger Sub
Capital Stock. Each share of common stock, par value $0.01 per
share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall be converted into and become one newly issued, fully
paid and non-assessable share of common stock of the Surviving
Corporation.
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3.2 Payment.
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(a)
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Prior
to the Effective Time, Metalline shall appoint an exchange agent
reasonably acceptable to Dome (the “Exchange Agent”) to act
as the agent for the purpose of delivering the Merger Consideration for:
(i) the Certificates, or (ii) book-entry shares which immediately prior to
the Effective Time represented the Shares (the “Book-Entry Shares”). On
and after the Effective Time, Metalline shall deposit, or cause the
Surviving Corporation to deposit, with the Exchange Agent, certificates of
Metalline Common Stock representing the aggregate Merger Consideration
that is issuable in respect of all of the Shares represented by the
Certificates and the Book-Entry Shares (the “Exchange Fund”) in
amounts and at the times necessary for such issuance. If for any reason
(including losses) the Exchange Fund is inadequate to pay the amounts to
which holders of Shares shall be entitled under Section 3.1(b), Metalline
shall take all steps necessary to enable or cause the Surviving
Corporation promptly to deposit in trust additional certificates with the
Exchange Agent sufficient to make all issuances required under this
Agreement, and Metalline and the Surviving Corporation shall in any event
be liable for the payment thereof. The Exchange Fund shall not be used for
any other purpose. The Surviving Corporation shall pay all charges and
expenses, including those of the Exchange Agent, in connection with the
delivery to former Dome Stockholders of the Merger
Consideration. Promptly after the Effective Time, Metalline
shall cause the Exchange Agent to send to each record holder of Shares at
the Effective Time Metalline Common Stock representing the Merger
Consideration payable to each such holder of
Shares.
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(b)
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Each
holder of Shares that have been converted into the right to receive the
Merger Consideration shall be entitled to receive the Merger Consideration
in respect of Dome Common Stock represented by a Certificate or Book-Entry
Share. At the Effective Time pursuant to the provisions of this
Article 3, each Certificate or Book-Entry Share shall immediately be
deemed to have been cancelled without further action by any
party.
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(c)
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No
fractional shares of Metalline Common Stock shall be issued. If
the aggregate number of shares of Metalline Common Stock that a holder of
Dome Common Stock is entitled to receive pursuant to Section 3.1 is (i) a
fractional share representing 0.5 or more of a share, the number of shares
of Metalline Common Stock such holder is entitled to receive will be
rounded up to the next whole number or (ii) a fractional share
representing less than 0.5 of a share, the number of shares of Metalline
Common Stock such holder is entitled to receive will be rounded down to
the next whole number and no additional compensation will be paid to in
respect of such fractional share.
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(d)
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The
Exchange Ratio shall be adjusted to reflect appropriately the effect of
any stock split, reverse stock split, stock dividend (including any
dividend or distribution of securities convertible into Metalline Common
Stock or Dome Common Stock), extraordinary cash dividends, reorganization,
recapitalization, reclassification, combination, exchange of shares or
other like change with respect to Metalline Common Stock or Dome Common
Stock occurring on or after the date hereof and prior to the Effective
Time.
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(e)
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All
Merger Consideration issued upon the conversion of Shares in accordance
with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to the Shares formerly represented
by a Certificate or Book-Entry Shares, and from and after the Effective
Time, there shall be no further registration of transfers of Shares on the
stock transfer books of the Surviving
Corporation.
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4
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(f)
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Any
portion of the Exchange Fund that remains unclaimed by the holders of
Shares one year after the Effective Time shall be returned to Metalline,
upon demand, and any former holder of Shares shall thereafter look only to
Metalline for issuance of the Merger Consideration. Notwithstanding the
foregoing, Metalline shall not be liable to any holder of Shares for any
amounts paid to a public official pursuant to applicable abandoned
property, escheat or similar Laws. Any amounts remaining
unclaimed by holders of Shares two (2) years after the Effective Time (or
such earlier date, immediately prior to such time when the amounts would
otherwise escheat to or become property of any Governmental Entity) shall
become, to the extent permitted by applicable Law, the property of
Metalline free and clear of any claims or interest of any Person
previously entitled thereto.
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3.3 No Appraisal
Rights. No appraisal rights shall be available to holders of
shares of Dome Common Stock in connection with the Merger unless required by
Section 262 of the DGCL.
3.4 Withholding Rights. Each of
the Exchange Agent, Metalline, Merger Sub and the Surviving Corporation shall be
entitled to deduct and withhold from the consideration otherwise payable to any
Person pursuant to this Article 3 such amounts as may be required to be deducted
and withheld with respect to the making of such payment under any provision of
any applicable Tax Law. To the extent that amounts are so deducted and withheld
by the Exchange Agent, Metalline, Merger Sub or the Surviving Corporation, as
the case may be, such amounts shall be treated for all purposes of this
Agreement as having been paid to the Person in respect of which the Exchange
Agent, Metalline, Merger Sub or the Surviving Corporation, as the case may be,
made such deduction and withholding.
3.5 Dome Options. All
options to acquire shares of Dome Common Stock (collectively, “Dome Options”) outstanding, if
any, whether or not exercisable and whether or not vested, at the Effective
Time, shall remain outstanding following the Effective Time. At the
Effective Time, the Dome Options shall, by virtue of the Merger and without any
further action on the part of Dome or the holder thereof, be substituted or
assumed by Metalline in such manner that Section 424(a) of the Code or the
treatment under Treasury Regulation 1.409A - 1(b)(v)(D) so provides or permits
such treatment. From and after the Effective Time, all references to
Dome in all agreements evidencing the Dome Options, or any plans pursuant to
which the Dome Options were issued “Dome Plans”), shall be deemed
to refer to Metalline, which shall have assumed the Dome Options and Dome Plans
as of the Effective Time by virtue of this Agreement and without any further
action. Each Dome Option assumed by Metalline (each, a “Substitute Option”) shall be
exercisable upon the same terms and conditions as under the applicable agreement
evidencing the Dome Options and Dome Plans, to the extent applicable, except
that (A) each such Substitute Option shall be exercisable for, and represent the
right to acquire, that whole number of shares of Metalline Common Stock (rounded
down to the nearest whole share) equal to the number of shares of Dome Common
Stock subject to such Dome Option multiplied by the Exchange Ratio; and (B) the
exercise price per share of Metalline Common Stock shall be an amount equal to
the exercise price per share of Dome Common Stock subject to such Dome Option in
effect immediately prior to the Effective Time divided by the Exchange Ratio
(the exercise price per share, as so determined, being rounded upward to the
nearest full cent).
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Such
Substitute Option shall otherwise be subject to the same terms and conditions as
such Dome Option. As soon as practicable after the Effective Time,
Metalline shall deliver, or cause to be delivered, to each holder of a
Substitute Option an appropriate notice setting forth such holder’s rights
pursuant thereto and such Substitute Option shall continue in effect on the same
terms and conditions (including any antidilution provisions, and subject to the
adjustments required by this Section 3.5 after giving effect to the
Merger). Metalline shall comply with the terms of all such Substitute
Options. Metalline shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Metalline Common Stock for
delivery upon exercise of Substitute Options pursuant to the terms set forth in
this Section 3.5. As soon as practicable after the Effective Time,
the shares of Metalline Common Stock subject to Substitute Options will be
covered by an effective registration statement on Form S-8 (but only to the
extent such Substitute Options so qualify), or any successor form, or another
appropriate form, and Metalline shall use its reasonable efforts to maintain the
effectiveness of such registration statements for so long as Substitute Options
remain outstanding. In addition, Metalline shall use all reasonable
efforts to cause the shares of Metalline Common Stock subject to Substitute
Options to be listed on the NYSE Amex and such other exchanges as Metalline and
Dome shall determine. On or after the date of this Agreement and
prior to the Effective Time, each of Metalline and Dome shall take all necessary
action such that, with respect to each member of the Dome Board and each
employee of Dome that is subject to Section 16 of the Exchange Act, the
acquisition by such person of Metalline Common Stock or Substitute Options in
the Merger and the disposition by any such person of Metalline Common Stock,
Dome Common Stock or Dome Options pursuant to the transactions contemplated by
this Agreement shall be exempt from the short-swing profit liability rules of
Section 16(b) of the Exchange Act pursuant to Rule 16b-3 promulgated
thereunder.
3.6 Warrants and Other
Rights. Metalline and Dome shall cause outstanding warrants or
other rights to acquire shares of Dome Common Stock to be exchanged at the
Effective Time for warrants or other rights to acquire shares of Metalline
Common Stock. Each Dome Right so exchanged (each, a “Substitute Right”) shall be
exercisable upon the same terms and conditions as under the applicable agreement
evidencing the Dome Right, except that (A) each such Substitute Right shall be
exercisable for, and represent the right to acquire, that whole number of shares
of Metalline Common Stock (rounded to the nearest whole share) equal to the
number of shares of Dome Common Stock subject to such Dome Right multiplied by
the Exchange Ratio; and (B) the exercise price per share of Metalline Common
Stock shall be an amount equal to the exercise price per share of Dome Common
Stock subject to such Dome Right in effect immediately prior to the Effective
Time divided by the Exchange Ratio (the exercise price per share, as so
determined, being rounded downward to the nearest full
cent). Metalline shall take all corporate action necessary to
reserve for issuance a sufficient number of shares of Metalline Common Stock for
delivery upon exercise of Substitute Rights pursuant to the terms set forth in
this Section 3.6.
3.7 Metalline Rights
Plan. Each person entitled to receive shares of Metalline
Common Stock pursuant to this Article 3 shall receive together with such shares
of Metalline Common Stock the number of Metalline share purchase rights
(pursuant to the Rights Agreement dated as of June 11, 2007 between Metalline
and OTC Stock Transfer (the “Metalline Rights Agreement”))
per share of Metalline Common Stock equal to the number of Metalline share
purchase rights associated with one share of Metalline Common Stock at the
Effective Time.
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ARTICLE
4
REPRESENTATIONS
AND WARRANTIES; COVENANTS
4.1 Dome Representations and
Warranties. Dome represents and warrants to Metalline as set
out in Schedule “A”.
4.2 Metalline Representations and
Warranties. Except as set forth in the correspondingly
numbered section of the disclosure letter delivered to Dome by Metalline on the
date of this Agreement, Metalline represents and warrants to Dome as set out in
Schedule “B”.
4.3 Access to
Information. Each of Dome and Metalline hereby agree to
continue allowing the other party and its agents and advisors, until the closing
of the Merger, all reasonable access to their (and their subsidiaries’)
respective files, books, records, properties, assets, operations, personnel and
offices and will provide the other party with any and all information reasonably
requested relating to taxes, commitments, contracts, leases, licenses and real,
personal and intangible property and financial condition, results of operations,
business and prospects (including forecasts and projections) and will cause its
accountants, agents and other advisers to cooperate with the other party and its
agents in making all such information available.
4.4 Approvals. Dome and
Metalline covenant and agree to use all reasonable commercial efforts to obtain
as soon as practicable the required approvals of all applicable stock exchanges,
all other regulatory and stockholder approvals.
4.5 Registration
Statement.
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(a)
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As
promptly as practicable after the execution of this Agreement, (i)
Metalline and Dome shall prepare and file with the Securities and Exchange
Commission (the “SEC”) the proxy
statement to be sent to the stockholders of Dome relating to the meeting
of Dome’s stockholders (the “Dome Stockholders’
Meeting”) to be held to consider approval and adoption of this
Agreement and to be sent to the stockholders of Metalline relating to the
meeting of Metalline’s stockholders (the “Metalline Stockholders’
Meeting” and, together with Dome Stockholders’ Meeting, the “Stockholders’ Meetings”)
to be held to consider approval of the Share Issuance, or any information
statement to be sent to such stockholders, as appropriate (such proxy
statement or information statement, as amended or supplemented, being
referred to herein as the “Proxy Statement”) and
(ii) Metalline shall prepare and file with the SEC a registration
statement on Form S-4 (together with all amendments thereto, the “Registration Statement”)
in which the Proxy Statement shall be included as a prospectus, in
connection with the registration under the Securities Act of the shares of
Metalline Common Stock to be issued to the stockholders of Dome pursuant
to the Merger. Metalline and Dome each shall use their
reasonable best efforts to cause the Registration Statement to become
effective as promptly as practicable, and, prior to the effective date of
the Registration Statement, Metalline shall take all or any action
required under any applicable U.S. federal or state securities laws or
Canadian provincial or territorial securities laws in connection with the
issuance of shares of Metalline Common Stock pursuant to the Merger and in
connection with the preparation, filing and mailing of the Proxy Statement
and any documents ancillary thereto. Each of Metalline and Dome
shall furnish to the other party all information concerning it and its
business as the other party may reasonably request in connection with such
actions and the preparation of the Registration Statement and Proxy
Statement. As promptly as practicable after the Registration
Statement shall have become effective, each of Dome and Metalline shall
mail the Proxy Statement to its
stockholders.
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(b)
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Except
as provided in Section 4.8, Dome covenants that none of Dome Board or any
committee thereof shall withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Metalline or Merger Sub, the approval or
recommendation by Dome Board or any committee thereof of this Agreement,
the Merger or any other transaction contemplated hereby and the Proxy
Statement shall include the recommendation of Dome Board to the
stockholders of Dome in favor of approval and adoption of this Agreement
and approval of the Merger.
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(c)
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Except
as provided in Section 4.8, Metalline covenants that none of the Metalline
Board or any committee thereof shall withdraw or modify, or propose to
withdraw or modify, in a manner adverse to Dome, the approval or
recommendation by the Metalline Board or any committee thereof of this
Agreement, the Merger, the Share Issuance or any other transaction
contemplated hereby and the Proxy Statement shall include the
recommendation of the Metalline Board to the stockholders of Metalline in
favor of the Share Issuance.
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(d)
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No
amendment or supplement to the Proxy Statement or the Registration
Statement will be made by Metalline or Dome without the approval of the
other party (such approval not to be unreasonably withheld or
delayed). Metalline and Dome each will advise the other,
promptly after they receive notice thereof, of the time when the
Registration Statement has become effective or any supplement or amendment
has been filed, of the issuance of any stop order, of the suspension of
the qualification of the Metalline Common Stock issuable in connection
with the Merger for offering or sale in any jurisdiction, or of any
request by the SEC or any other Governmental Authority for amendment of
the Proxy Statement or the Registration Statement or comments thereon and
responses thereto or requests by the SEC or any other
Governmental Authority for additional
information.
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(e)
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Metalline
represents and warrants to Dome that the information supplied by Metalline
for inclusion in the Registration Statement and the Proxy Statement shall
not, at (i) the time the Registration Statement is declared effective,
(ii) the time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the stockholders of Dome and Metalline, (iii)
the time of each of the Stockholders’ Meetings and (iv) the Effective
Time, contain any untrue statement of a material fact or fail to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading. If, at any time prior to the
Effective Time, any event or circumstance relating to Metalline or Merger
Sub, or their respective officers or directors, should be discovered by
Metalline which should be set forth in an amendment or a supplement to the
Registration Statement or Proxy Statement, Metalline shall promptly inform
Dome. Metalline represents and warrants to Dome that all
documents that Metalline is responsible for filing with the
SEC or any other Governmental Authority in connection with the
Merger or the other transactions contemplated by this Agreement will
comply as to form and substance in all material aspects with the
applicable requirements of the Securities Act, the Exchange Act and any
other applicable Laws.
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(f)
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Dome
represents and warrants to Metalline that the information supplied by Dome
for inclusion in the Registration Statement and the Proxy Statement shall
not, at (i) the time the Registration Statement is declared effective,
(ii) the time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the stockholders of Dome and Metalline, (iii)
the time of each of the Stockholders’ Meetings and (iv) the Effective
Time, contain any untrue statement of a material fact or fail to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they
were made, not misleading. If, at any time prior to the
Effective Time, any event or circumstance relating to Dome or any of its
subsidiaries, or their respective officers or directors, should be
discovered by Dome which should be set forth in an amendment or a
supplement to the Registration Statement or Proxy Statement, Dome shall
promptly inform Metalline. Dome represents and warrants to
Metalline that all documents that Dome is responsible for filing with the
SEC or any other Governmental Authority in connection with the Merger or
the other transactions contemplated by this Agreement will comply as to
form and substance in all material respects with the applicable
requirements of the Securities Act, the Exchange
Act and any other applicable
Laws.
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4.6 Stockholders’
Meetings Dome shall call and hold the Dome
Stockholders’ Meeting as promptly as practicable for the purpose of voting upon
the approval and adoption of this Agreement. Metalline shall call and
hold the Metalline Stockholders’ Meeting as promptly as practicable for the
purpose of voting upon the approval of the Share Issuance. Each of
Dome and Metalline shall use its reasonable best efforts to hold the
Stockholders’ Meetings on the same day as soon as practicable after the date on
which the Registration Statement becomes effective. Each of Dome and
Metalline shall use its reasonable best efforts to solicit from its stockholders
proxies in favor of the approval and adoption of this Agreement or in favor of
the approval of the Share Issuance, as the case may be, and shall take all other
action necessary or advisable to secure the required vote or consent of its
stockholders, regardless of whether the Board of Directors of such party, in
accordance with Section 4.8 withdraws or modifies its recommendations to its
stockholders in favor of the approval and adoption of this Agreement or in favor
of the approval of the Share Issuance, as the case may be.
9
4.7 Interim
Covenants. Each of Dome and Metalline agrees that from the
date hereof until the earlier of the completion of the Merger or termination of
this Agreement, it will comply with each of the covenants set forth in Schedule
“D”.
4.8 No
Solicitation. Until this Agreement is terminated in accordance
with its terms, each of Dome and Metalline will shut down any existing data
rooms established to solicit offers for Dome or Metalline, as the case may be,
and will not solicit offers or any other expression of interest intended to
result in a merger or acquisition of their assets, and after the date hereof
will not directly or indirectly through any officer, director, employee,
representative, counsel, advisor or agent, as the case may be, take any action
to solicit, assist or encourage inquiries, submissions, proposals or offers from
any person or entity other than the other party to this Agreement (a “Third Party”) relating to, and
will not initiate, continue or otherwise participate in any discussions or
negotiations with a Third Party regarding, or furnish to any Third Party any
information with respect to, enter into any form of agreement, arrangement or
understanding with any Third Party with respect to, or otherwise co-operate in
any way with or assist to participate in, or facilitate or encourage any efforts
or attempt by, any Third Party with respect to:
|
(a)
|
the
direct or indirect acquisition or disposition of all or any of Dome’s or
Metalline’s securities, as
applicable,
|
|
(b)
|
any
amalgamation, merger, sale of all of any part of its assets, take-over
bid, tender offer, plan of arrangement, issuer bid, reorganization,
dividend or distribution, recapitalization, liquidation or winding-up of,
or other business combination or similar transaction involving such party
and all of any part of its assets;
or
|
|
(c)
|
any
other transaction the consummation of which would reasonably be expected
to impede, interfere with, prevent or materially delay the Merger (any of
(a), (b) or (c) being a “Competing
Transaction”),
|
provided, however that neither party
shall be prohibited from considering, discussing, negotiating or providing any
information (including access to its management) to a Third Party in respect of
a bona fide unsolicited
proposal to the Dome Board of Directors or Metalline Board of Directors, as
applicable, or the Dome stockholders or Metalline stockholders, as applicable,
that the Dome Board of Directors or Metalline Board of Directors, as
applicable, has (i) determined, in its good faith judgment (after having
received the advice of a financial advisor of internationally recognized
reputation), that such proposal or offer constitutes a Superior Proposal (as
defined below), (ii) determined, in its good faith judgment upon the receipt of
advice of independent legal counsel (who may be their regularly engaged
independent legal counsel), that, in light of such Superior Proposal, the
furnishing of such information or entering into discussions is required to
comply with its fiduciary obligations to Dome and its stockholders or Metalline
and its stockholders, as applicable, under applicable Law, (iii) provided
written notice to the other party of its intent to furnish information or enter
into discussions with such person at least five (5) business days prior to
taking any such action, and (iv) obtained from such person an executed
confidentiality agreement on terms no less favorable than those contained in the
confidentiality agreement entered into with the other party to this Agreement
(it being understood that such confidentiality agreement and any related
agreements shall not include any provision calling for any exclusive right to
negotiate with such party or having the effect of prohibiting it from satisfying
its obligations under this Agreement).
10
Except as
set forth in this Section 4.8, neither the Dome Board of Directors (or any
committee thereof) nor the Metalline Board of Directors (or any committee
thereof) shall approve or recommend, or cause or permit Dome or Metalline, as
applicable, to enter into any letter of intent, agreement or obligation with
respect to, any Competing Transaction. Notwithstanding the foregoing,
if the Dome Board of Directors or Metalline Board of Directors, as applicable,
determines, in its good faith judgment prior to receipt of approval of the
Merger and Merger Agreement or Share Issuance, as applicable from its
stockholders and after receipt of legal advice of independent legal counsel (who
may be regularly engaged independent legal counsel), that it is required to do
so to comply with its fiduciary obligations under applicable Law, the board of
directors may recommend a Superior Proposal, but only (i) after providing
written notice to the other party to this Agreement (a “Notice of Superior Proposal”)
advising it that the board of directors of such party has received a Superior
Proposal, specifying the material terms and conditions of such Superior Proposal
and identifying the person making such Superior Proposal and indicating that the
board of directors of such party intends to approve or recommend, or cause or
permit Dome or Metalline, as applicable, to enter into any letter of intent,
agreement or obligation with respect to the Superior Proposal and the manner in
which it intends (or may intend) to do so, and (ii) if the other party does not,
within five (5) business days of its receipt of the Notice of Superior Proposal,
make an offer that the board of directors determines, in its good faith judgment
(after having received the advice of a financial advisor of internationally
recognized reputation) to be at least as favorable to its stockholders as such
Superior Proposal. During the period from a party’s (the “Recipient”) receipt of the
Notice of Superior Proposal until the end of such five (5) business day period,
the other party shall, if requested by the Recipient, negotiate in good faith
with the Recipient to revise this Agreement so that the Competing Transaction
that constituted a Superior Proposal no longer constitutes a Superior
Proposal. Any disclosure that the Dome Board of Directors or
Metalline Board of Directors, as applicable, may be compelled to make with
respect to the receipt of a proposal or offer for a Competing Transaction or
otherwise in order to comply with its fiduciary obligations under applicable Law
or Rule 14d-9 or 14e-2 under the Exchange Act or to comply with any other
applicable Law, will not constitute a violation of this Agreement, provided that
such disclosure states that no action will be taken by such board of directors
in violation of this Section 4.8. Neither party shall submit to the
vote of its stockholders any Competing Transaction, or propose to do
so.
A “Superior Proposal” means an
unsolicited written bona
fide offer made by a Third Party to consummate any of the following
transactions: (i) a merger, consolidation, share exchange, business
combination or other similar transaction involving a party to this Agreement
pursuant to which the stockholders of that party immediately preceding such
transaction would hold less than 50% of the equity interest in the surviving or
resulting entity of such transaction; or (ii) the acquisition by any person or
group (including by means of a tender offer or an exchange offer or a two-step
transaction involving a tender offer followed with reasonable promptness by a
cash-out merger involving a party to this Agreement), directly or indirectly, of
ownership of 100% of the then outstanding shares of stock, in each case on terms
(including conditions to consummation of the contemplated transaction) that the
board of directors of such party determines, in its good faith judgment (after
having received the advice of independent legal counsel (who may be the party’s
regularly engaged independent legal counsel) and a financial advisor of
internationally recognized reputation), to be (A) more favorable to its
stockholders than the Merger (taking into account probability of closing and all
other terms and conditions of such proposal and this Agreement and any changes
to the financial terms of this Agreement proposed by the other party to this
Agreement in response to such offer or otherwise), and (B) reasonably capable of
being completed taking into account all legal, regulatory and other aspects of
such and (ii) for which financing, to the extent required, is then
committed.
11
Neither
party shall release any third party from or waive any provision of any
confidentiality or standstill agreement to which it is a party.
4.9 Metalline
Board. Metalline shall take all such action as may be
necessary (i) to cause the number of directors comprising the Metalline Board as
of the Effective Time to be increased to seven (7), (ii) to cause Xxxxx Xxxxx
and one other person designated by Dome (the “Dome Designated Directors”) to
be appointed to the Metalline Board as of the Effective Time, to serve until the
next annual election of directors of Metalline, provided that at least one of
the Dome Designated Directors is “independent” within the meaning of Section
803A of the NYSE Amex Company Guide, and (iii) immediately following the
Effective Time to cause Xxxxx Xxxxx to be elected Chairman of the Metalline
Board. In connection with such next annual election of directors of
Metalline, Metalline shall take all such action as may be necessary to include
the Dome Designated Directors as nominees for the Metalline Board recommended by
the Metalline Board for election by Metalline’s stockholders, with Xxxxx Xxxxx
to serve as Chairman of the Metalline Board.
4.10 Listing. Metalline
shall promptly prepare and submit to the NYSE Amex and the TSX Venture Exchange
a listing application covering the shares of Metalline Common Stock to be issued
in the Merger and pursuant to Substitute Options and Substitute Rights, and
shall use its reasonable efforts to obtain, prior to the Effective Time,
approval for the listings/quotations of such Metalline Common Stock, subject to
official notice of issuance to NYSE and the TSX Venture Exchange, as the case
may be, and Dome shall cooperate with Metalline with respect to such
listing.
4.11 Takeover
Statutes. If any “control share acquisition”, “fair price”,
“moratorium” or other anti-takeover Law becomes or is deemed to be applicable to
Dome, Metalline, Merger Sub, the Merger or any other transaction contemplated by
this Agreement, then Dome, Metalline, Merger Sub, and their respective board of
directors shall grant such approvals and take such actions as are necessary so
that the transactions contemplated hereby may be consummated as promptly as
practicable on the terms contemplated hereby and otherwise act to render such
anti-takeover Law inapplicable to the foregoing.
12
4.12 Further
Assurances. At and after the Effective Time, the officers and
directors of the Surviving Corporation shall be authorized to execute and
deliver, in the name and on behalf of Dome or Merger Sub, any deeds, bills of
sale, assignments or assurances and to take and do, in the name and on behalf of
Dome or Merger Sub, any other actions and things to vest, perfect or confirm of
record or otherwise in the Surviving Corporation any and all right, title and
interest in, to and under any of the rights, properties or assets of Dome
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger. Upon the terms and
subject to the conditions of this Agreement, each of the parties hereto shall
(i) make promptly its respective filings, and thereafter make any other required
submissions, under applicable Laws with respect to the Merger and the other
transactions contemplated hereby and (ii) use its reasonable best
efforts to take, or cause to be taken, all appropriate action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
Laws or otherwise to consummate and make effective the Merger and the other
transactions contemplated hereby, including, without limitation, using its
reasonable best efforts to obtain all permits, consents, approvals,
authorizations, qualifications and orders of Governmental Authorities and
parties to contracts with the Dome or Metalline or their subsidiaries as are
necessary for the consummation of the Merger and the other transactions
contemplated hereby.
4.13 Plan of
Reorganization. This Agreement is intended to constitute a
“plan of reorganization” within the meaning of section 1.368-2(g) of the income
tax regulations promulgated under the Code. From and after the date
of this Agreement and until the Effective Time, each party hereto shall use its
reasonable best efforts to cause the Merger to qualify, and will not knowingly
take any action, cause any action to be taken, fail to take any action or cause
any action to fail to be taken which action or failure to act could prevent the
Merger from qualifying, as a reorganization within the meaning of Section 368(a)
of the Code. Following the Effective Time, neither the Surviving
Corporation, Metalline nor any of their affiliates shall knowingly take any
action, cause any action to be taken, fail to take any action or cause any
action to fail to be taken, which action or failure to act could cause the
Merger to fail to qualify as a reorganization within the meaning of Section
368(a) of the Code.
4.14 Indemnification. Metalline
agrees that all rights to indemnification existing as of the date of this
Agreement for acts or omissions occurring on or prior to the Effective Time in
favor of the directors or officers of Dome as provided in its articles of
incorporation and by-laws or in written contracts in effect on the date of this
Agreement, shall survive the Merger 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 Dome arising out of
such acts or omissions and the sixth anniversary of the Effective
Date.
ARTICLE
5
CONDITIONS
5.1 Conditions. Completion
of the Merger is subject to the fulfilment, or waiver by the party entitled to
the benefit of the condition, of the conditions precedent set out in Schedule
“C” hereto. The parties hereto will use all reasonable commercial
efforts to satisfy or cause to be satisfied all the conditions precedent that
are set forth in Schedule “C”, and will use all commercially reasonable efforts
to complete the Merger as promptly as possible.
13
ARTICLE
6
TERMINATION
6.1 Termination. This
Agreement may be terminated:
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(a)
|
by
the mutual consent of Dome and Metalline (without the need for any action
on the part of their respective
stockholders);
|
|
(b)
|
by
Dome upon written notice to Metalline if (i) the Metalline Board shall
have failed to recommend or has withdrawn or modified or changed in a
manner adverse to Dome its approval or recommendation of the Share
Issuance, (ii) the Metalline Board shall have approved or recommended a
Superior Proposal, or (iii) the Merger is not submitted for the approval
of Metalline stockholders by May 15,
2010;
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|
(c)
|
by
Metalline upon written notice to Dome if: (i) the Dome Board shall have
failed to recommend or has withdrawn or modified or changed in a manner
adverse to Metalline its approval or recommendation of the Merger, (ii)
the Dome Board shall have approved or recommended a Superior Proposal,
(iii) the Merger is not submitted for the approval of Dome stockholders by
May 15, 2010;
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|
(d)
|
by
Metalline upon written notice to Dome in order to enter into a definitive
written agreement with respect to a Superior Proposal, subject to
compliance with Section 4.8 and the payment of the Break Fee required to
be paid pursuant to Section 6.2;
|
|
(e)
|
by
Dome upon written notice to Metalline in order to enter into a definitive
written agreement with respect to a Superior Proposal, subject to
compliance with Section 4.8 and the payment of the Break Fee required to
be paid pursuant to Section 6.3;
|
|
(f)
|
by
Dome if the Metalline stockholders shall not have approved the Share
Issuance by the requisite vote at the Metalline Stockholder
Meeting;
|
|
(g)
|
by
Metalline if the Dome stockholders shall not have approved the Merger by
the requisite vote at the Dome Stockholder
Meeting;
|
|
(h)
|
upon
notice by one party to the other:
|
|
(i)
|
if
the Metalline Private Placement has not been completed on or before
December 23, 2009 or the Dome Private Placement has not been completed on
or before January 10, 2010; or
|
|
(ii)
|
if
the Merger has not been completed by May 30, 2010, except that the right
to terminate this Agreement under this Section 6.1(h)(ii) shall not be
available to any party whose failure to fulfil any of its obligations has
been a significant cause of, or resulted in, the failure of the Merger to
be completed by May 30, 2010; or
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14
|
(iii)
|
if
there shall be passed any Law or regulation that makes consummation of the
transaction contemplated herein illegal or otherwise prohibited or if any
injunction, order or decree enjoining Dome or Metalline from consummating
the transactions contemplated herein is entered and such injunction, order
or decree has become final and without right of
appeal;
|
|
(i)
|
upon
notice by Dome to Metalline if any condition for the benefit of Dome set
forth in Schedule C hereto (including mutual conditions) has not been
satisfied or waived by Dome; or
|
|
(j)
|
upon
notice by Metalline to Dome if any condition for the benefit of Metalline
set forth in Schedule C hereto (including mutual conditions) has not been
satisfied or waived by Metalline.
|
6.2 Metalline Termination
Fee. In the event:
|
(a)
|
Dome
shall terminate this Agreement pursuant to Section
6.1(b);
|
|
(b)
|
Metalline
shall terminate this Agreement pursuant to Section 6.1(d);
or
|
|
(c)
|
Dome
shall terminate this Agreement pursuant to Section 6.1(f) and (i) a bona fide unsolicited
proposal for a Competing Transaction has been made by any person other
than Dome prior to the Metalline Stockholder Meeting and not withdrawn and
(ii) either (x) a Competing Transaction is consummated, after the date
hereof and prior to the expiration of twelve months following the
termination of this Agreement or (y) Metalline enters into a definitive
agreement with respect to a Competing Transaction after the date hereof
and prior to the expiration of twelve months following the termination of
this Agreement, and thereafter consummates such
transaction,
|
then in
any such case Metalline shall pay to Dome a fee of US$964,000 (the “Break Fee”). It is
agreed by the parties that the Break Fee represents liquidated damages and a
pre-estimate of the damages Dome will suffer or incur as a result of the event
giving rise to such damages and the non-completion of the transaction
contemplated herein.
6.3 Dome Termination
Fee. In the event:
|
(a)
|
Metalline
shall terminate this Agreement pursuant to Section
6.1(c);
|
|
(b)
|
Dome
shall terminate this Agreement pursuant to Section 6.1(e);
or
|
|
(c)
|
Metalline
shall terminate this Agreement pursuant to Section 6.1(g) and (i) a bona fide unsolicited
proposal for a Competing Transaction has been made by any person other
than Metalline prior to the Dome Stockholder Meeting and not withdrawn and
(ii) either (x) a Competing Transaction is consummated, after the date
hereof and prior to the expiration of twelve months following the
termination of this Agreement or (y) Dome enters into a definitive
agreement with respect to a Competing Transaction after the date hereof
and prior to the expiration of twelve months following the termination of
this Agreement, and thereafter consummates such
transaction,
|
15
then in
any such case Dome shall pay to Metalline the Break Fee. It is agreed
by the parties that the Break Fee represents liquidated damages and a
pre-estimate of the damages Metalline will suffer or incur as a result of the
event giving rise to such damages and the non-completion of the transaction
contemplated herein.
6.4 Agents’
Fee.
|
(a)
|
If
this Agreement is terminated and a Break Fee is payable by either Dome or
Metalline, such party shall pay to the Agents a fee equal to 50% of the
Agency Fee, together with the Agents’
Expenses.
|
|
(b)
|
If
this Agreement is terminated as a result of the failure of either Dome or
Metalline to obtain approval of its stockholders of this Agreement or the
Share Issuance, as applicable, regardless of whether a Break Fee is
payable, such party shall pay to the Agents a fee equal to 50% of the
Agency Fee plus the Agents’ Expenses incurred to the date of the
termination of this Agreement.
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|
(c)
|
If
this Agreement is terminated as a result of the failure of both Dome and
Metalline to obtain the requisite approval of their respective
stockholders and no Break Fee is payable by either party, then Dome and
Metalline shall pay, shared equally between them, to the Agents a fee
equal to 50% of the Agency Fee plus the Agents’ Expenses incurred to the
date of the termination of this
Agreement.
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ARTICLE
7
GENERAL
7.1 Definitions. For
purposes of this Agreement, the following terms will have the following meanings
when used herein with initial capital letters:
“Agency Fee” has the meaning
assigned to it in the Engagement Letter.
“Agents” has the meaning
assigned to it in Section 1.1.
“Agents’ Expenses” has the
meaning assigned to it in the Engagement Letter.
“Agreement” has the meaning
assigned to it in the Recital.
“Book-Entry Shares” has the
meaning assigned to it in Section 3.2(a).
“Break Fee” has the meaning assigned to
it in Section 6.2.
16
“Closing” has the meaning
assigned to it in Section 2.2.
“Closing Date” has the meaning
assigned to it in Section 2.2.
“Certificate” has the meaning
assigned to it in Section 3.1(c).
“Certificate of Merger” has the
meaning assigned to it in Section 2.3.
“Competing Transaction” has the meaning
assigned to it in Section 4.7(c).
“Confidentiality Agreement” has
the meaning assigned to it in Section 7.5.
“Cormark” has the meaning
assigned to it in Section 1.1.
“Cormark Fee” has the meaning
assigned to it in Section 6.4.
“DGCL” has the meaning assigned
to it in Section 2.1.
“Dissenting Shares” has the
meaning assigned to it in Section 3.3.
“Dome” has the meaning assigned
to it in the Recital.
“Dome Documents” has the
meaning assigned to it in Schedule “A”(n).
“Dome Private Placement” has
the meaning assigned to it in Section 1.1.
“Effective Time” has the
meaning assigned to it in Section 2.3.
“Engagement Letter” means the
engagement letter entered into by Dome and Cormark with respect to the Dome
Private Placement.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
“Exchange Agent” has the
meaning assigned to it in Section 3.2(a).
“Exchange Fund” has the meaning
assigned to it in Section 3.2(a).
“Expenses” has the meaning
assigned to it in Section 6.4.
“Governmental Authority” has the meaning
assigned to it in Schedules “A”(i) and “B”(i).
“Law” means any federal,
national, supranational, state, provincial, local or similar constitution,
statute, law, ordinance, regulation, rule, code, order, requirement or rule of
law (including common law).
“Merger” has the meaning
assigned to it in Section 2.1.
17
“Merger Sub” has the meaning
assigned to it in the Recital.
“Merger Consideration” has the
meaning assigned to it in Section 3.1.
“Metalline” has the meaning
assigned to it in the Recital.
“Metalline Documents” has the
meaning assigned to it in Schedule “A”(p).
“Metalline Private Placement”
has the meaning assigned to it in Section 1.2.
“Notice of Superior Proposal”
has the meaning assigned to it in Section 4.7.
“Person” means any individual,
partnership, firm, corporation, limited liability company, association, trust,
unincorporated organization or other entity, as well as any syndicate or group
that would be deemed to be a person under Section 13(d)(3) of the Exchange
Act.
“Recipient” has the meaning
assigned to it in Section 4.7.
“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
“Share” and “Shares” have the meaning
assigned to them in Section 3.1(a).
“Surviving Corporation” has the
meaning assigned to it in Section 2.1.
“Superior Proposal” has the
meaning assigned to it in Section 4.7.
“Third Party” has the meaning
assigned to it in Section 4.7.
7.2 Binding
Agreement. This Agreement shall be binding upon and shall
enure to the benefit of and be enforceable by the parties hereto and their
respective successors and permitted assigns.
7.3 Time. Time is of
the essence of this Agreement.
7.4 Governing Law. This
Agreement shall be governed by and construed in accordance with the Laws of the
State of Colorado.
7.5 Waiver of Jury
Trial. Each of the parties hereto hereby waives to the fullest
extent permitted by applicable Law any right it may have to a trial by jury with
respect to any litigation directly or indirectly arising out of, under or in
connection with this Agreement or the transactions contemplated
hereby.
7.6 Confidentiality. Metalline
and Dome acknowledge and confirm that they shall continue to be bound by the
terms of the confidentiality agreement (the “Confidentiality Agreement”)
dated October 2, 2009 entered into between Metalline and Dome in respect of the
Merger. Neither Metalline nor Dome shall make any public announcement
concerning the Merger or related negotiations without the other party’s prior
written approval, except as may be required by Law or rule of any stock exchange
or quotation system. If such an announcement is required by Law or
rule of any stock exchange or quotation system, the party required to make the
announcement shall inform the other party of the contents of the announcement
proposed to be made and shall use its reasonable efforts to obtain the other
party’s approval for the announcement, which approval may not be unreasonably
withheld.
18
7.7 Interpretation;
Construction.
|
(a)
|
The
table of contents and headings herein are for convenience of reference
only, do not constitute part of this Agreement and shall not be deemed to
limit or otherwise affect any of the provisions hereof. Where a reference
in this Agreement is made to a Section, Exhibit or Schedule, such
reference shall be to a Section of, Exhibit to or Schedule of this
Agreement unless otherwise indicated. Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be deemed
to be followed by the words “without limitation.” A reference in this
Agreement to $ or dollars is to U.S. dollars. The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. References to “this Agreement”
shall include the disclosure letter delivered with this
Agreement.
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|
(b)
|
The
parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any
provision of this Agreement.
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7.8 Notice. All notices, requests,
consents, claims, demands, waivers and other communications hereunder shall be
in writing and shall be deemed to have been given (a) when delivered by hand
(with written confirmation of receipt), (b) when received by the addressee if
sent by a nationally recognized overnight courier (receipt requested), or (c) on
the date sent by facsimile or e-mail of a PDF document (with confirmation of
transmission) if sent during normal business hours of the recipient, and on the
next Business Day if sent after normal business hours of the recipient. Such
communications must be sent to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in
accordance with this Section 7.8):
|
If
to Metalline or Merger Sub, to:
|
|
Metalline
Mining Company
0000
X. Xxxxxxxx Xxxxxx
Xxxxx
x’Xxxxx, Xxxxx 00000
Facsimile:
208-665-0041
Email:
xxxxxxx@xxxxxxxxxx.xxx
Attention: Xxxxxx
Xxxxxxx, President
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19
|
with
a copy (which will not constitute notice to Metalline or Merger Sub)
to:
|
|
Xxxxx
Figa & Will, PC
0000
X. Xxxxxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx
Xxxxxxx, XX 00000
Facsimile:
303796 2626
Email:
xxxxxxxxxx@xxx-xxx.xxx
Attention:
Xxxxxxx X. Xxxxxxxxx
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|
If
to Dome, to:
|
Dome
Ventures Corporation
Suite
2200, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX X0X 0X0:
Facsimile:
Email:
xxxx@xxxxxxxxx.xxx and xxxxx@xxxxxxxxx.xxx
Attention:
Xxxx Xxxx and Xxxxx Xxxxx
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|
|
with
a copy (which will not constitute notice to Dome) to:
|
Blake,
Xxxxxxx & Xxxxxxx LLP
000
Xxxxxxx Xxxxxx
Xxxxxxxxx,
XX X0X 0X0
Facsimile:
000 000 0000
Email: xxxxx.xxxxxxxxxx@xxxxxx.xxx
Attention:
Xxxxx X. X’Xxxxxxxxx
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or to
such other Persons, addresses or facsimile numbers as may be designated in
writing by the Person entitled to receive such communication as provided
above.
7.9 Entire
Agreement. This Agreement (including the Exhibits to this
Agreement), the disclosure letter to be delivered with this Agreement and the
Confidentiality Agreement constitute the entire agreement among the parties with
respect to the subject matter of this Agreement and supersede all other prior
agreements and understandings, both written and oral, among the parties to this
Agreement with respect to the subject matter of this Agreement. In the event of
any inconsistency between the statements in the body of this Agreement, the
Confidentiality Agreement, the disclosure letter (other than an exception
expressly set forth as such disclosure letter), the statements in the
body of this Agreement will control.
7.10 Severability. If
any term or provision of this Agreement is invalid, illegal or unenforceable in
any jurisdiction, such invalidity, illegality or unenforceability shall not
affect any other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction. Upon such
determination that any term or other provision is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the greatest
extent possible.
20
7.11 Assignment. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither party may
assign its rights or obligations hereunder without the prior written consent of
the other party, which consent shall not be unreasonably withheld or delayed. No
assignment shall relieve the assigning party of any of its obligations
hereunder.
7.12 Remedies. Except as
otherwise provided in this Agreement, any and all remedies expressly conferred
upon a party to this Agreement will be cumulative with, and not exclusive of,
any other remedy contained in this Agreement, at Law or in equity. The exercise
by a party to this Agreement of any one remedy will not preclude the exercise by
it of any other remedy.
7.13 Specific
Performance. The parties hereto agree that irreparable damage
would occur if any provision of this Agreement were not performed in accordance
with the terms hereof and that the parties shall be entitled to an injunction or
injunctions to prevent breaches or threatened breached of this Agreement or to
enforce specifically the performance of the terms and provisions hereof in any
federal court located in the State of Delaware or any Delaware state court, in
addition to any other remedy to which they are entitled at Law or in
equity.
7.14 Parties in
Interest. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, other than Section 4.10 (which is intended to be for the benefit of
the persons covered thereby and may be enforced by such persons).
7.15 Counterparts. This
Agreement may be signed in one or more counterparts, originally or by facsimile,
each such counterpart taken together will form one and the same
agreement.
21
IN
WITNESS WHEREOF, Dome, Metalline and Merger Sub have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
DOME
VENTURES CORPORATION
Per:
/s/ Xxxxx X.
Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
President and CEO
METALLINE
MINING COMPANY
Per:
/s/ Xxxxxx
Xxxxxxx
Name: Xxxxxx
Xxxxxxx
Title: President
and Chairman of the Board
METALLINE
MINING DELAWARE INC.
Per: /s/ Xxxxxx Xxxxxxx
Name:
Xxxxxx Xxxxxxx
Title:
President
22
|
|
SCHEDULE
“A”
|
Representations
and Warranties of Dome
Dome
represents and warrants to Metalline as follows:
|
(a)
|
Dome
is a corporation duly organized and validly existing under the laws of the
State of Delaware and:
|
|
(i)
|
it
is a “reporting issuer” within the meaning of the securities laws of the
Provinces of British Columbia and Alberta and is not in material default
of its continuous disclosure obligations under any applicable securities
laws;
|
|
(ii)
|
is
in good standing; and
|
|
(iii)
|
its
common shares are listed on, and it is not in material default of any rule
or policy of the TSX-V,
|
|
(b)
|
the
shares of Dome Common Stock are and have been “held of record” (within the
meaning of Rule 12g5-1 under the Exchange Act) by fewer than 500 persons;
and prior to completion of the Dome Private Placement Dome’s total assets
do not exceed $10 million.
|
|
(c)
|
each
of the subsidiaries of Dome is a corporation duly organized and validly
existing and in good standing under the Laws of its jurisdiction of
Incorporation and is in good
standing;
|
|
(d)
|
as
of the date hereof:
|
|
(i)
|
the
authorized capital of Dome consists of 100,000,000 shares of Dome Common
Stock and 50,000,000 shares of preferred stock, par value $0.001 per
share. As of November 6, 2009, 18,699,513 shares of Dome Common
Stock and nil preferred shares in the capital of Dome were issued and
outstanding; and
|
|
(ii)
|
Dome
has options, warrants or other convertible securities issued or
outstanding as set out in Exhibit 1
hereto;
|
|
(e)
|
immediately
prior to the Effective Time, Dome will have 20,349,513 common shares
issued and outstanding1 and an additional 28,911,111 shares
reserved for issuance at the Effective Time upon conversion of the Special
Warrants issued pursuant to the Dome Private
Placement. Warrants to acquire an additional 2,300,000 Dome
shares will be exchanged at the Effective Time for warrants to acquire
Metalline Common Stock pursuant to Section
3.7.
|
|
(f)
|
the
Dome Board, by resolutions duly adopted at a meeting duly called and held
and not subsequently rescinded or modified in any way, has duly (i)
determined that this Agreement and the Merger are fair to and in the best
interests of the Company and its stockholders, (ii) approved this
Agreement and the Merger and declared their advisability, and (iii)
recommended that the stockholders of the Company approve and adopt this
Agreement and approve the Merger and directed that this Agreement and the
transactions contemplated hereby be submitted for consideration by the
Company’s stockholders at the Company Stockholders’
Meeting.
|
2
|
(g)
|
Dome
has all necessary corporate power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby; the execution and delivery of this
Agreement by Dome and the consummation by Dome of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Dome
are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger,
the approval and adoption of this Agreement by the holders of a majority
of the then-outstanding shares of Metalline Common Stock and the filing
and recordation of appropriate merger documents as required by the DGCL);
this Agreement has been duly and validly executed and delivered by Dome
and, assuming the due authorization, execution and delivery by Metalline
and Merger Sub, constitutes a legal, valid and binding obligation of Dome,
enforceable against Dome in accordance with its terms, subject to the
effect of any applicable bankruptcy, insolvency (including, without
limitation, all Laws relating to fraudulent transfers), reorganization,
moratorium or similar Laws affecting creditors’ rights generally and
subject to the effect of general principles of equity (regardless of
whether considered in a proceeding at Law or in equity); the Dome Board
has approved this Agreement and the transactions contemplated hereby and
such approvals are sufficient so that the restrictions on business
combinations set forth in Section 203(a) of the DGCL shall not apply to
the Merger or any of the Transactions. To the knowledge of
Dome, no other state takeover statute is applicable to the Merger or the
other transactions contemplated by this
Agreement;
|
|
(h)
|
neither
the execution and delivery of this Agreement nor the consummation of the
Merger will conflict with, result in a breach of or accelerate the
performance required by any agreement to which Dome is a party, or any
Law, rules or regulations to which Dome or any of its subsidiaries or
properties is subject;
|
|
(i)
|
there
are no undisclosed actions, suits or proceedings, pending or, to the
knowledge of Dome, threatened against Dome or its subsidiaries at Law or
in equity, or by any federal, provincial, state, municipal or other
governmental department, commission, board, bureau or agency, domestic or
foreign (“Governmental Authority”), and Dome is
not aware of any existing grounds on which any action, suit or proceeding
might be commenced with any reasonable likelihood of
success;
|
|
(j)
|
the
audited consolidated financial statements of Dome for the year ended
September 30, 2008 and the interim periods thereafter have been prepared
in accordance with generally accepted accounting principles, are true,
correct and complete in all material respects and present fairly the
financial condition of Dome as at the end of such
periods;
|
|
(k)
|
Dome
is not subject to any cease trade or other order of any applicable stock
exchange or securities regulatory authority and, to the knowledge of Dome,
no investigation or other proceedings involving Dome which may operate to
prevent or restrict trading of any securities of Dome are currently in
progress or pending before any applicable stock exchange or securities
regulatory authority;
|
3
|
(l)
|
Dome
does not have any material liability or obligation, whether accrued,
absolute, contingent or otherwise, not reflected in its latest
publicly-disclosed financial
statements;
|
|
(m)
|
there
is no bankruptcy, liquidation, winding-up or other similar proceeding
pending or in progress or, to the knowledge of Dome, threatened against
Dome before any court, regulatory or administrative agency or
tribunal;
|
|
(n)
|
Dome
has filed with the securities regulatory authorities, stock exchanges and
all applicable self-regulatory authorities a true and complete copy of all
forms, reports, schedules, statements, certifications, material change
reports and other documents required to be filed by it (such forms,
reports, schedules, statements, certifications and other documents,
including any schedules included therein, are referred to in this
subsection as the “Dome
Documents”). The Dome Documents, at the time filed or,
if amended, as of the date of such amendment: (i) did not contain any
misrepresentation (as defined or interpreted by securities regulatory
authorities) and did not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
made, not misleading; 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 Dome, except where such non-compliance has not had and
would not reasonably be expected to have a material adverse effect on
Dome. Dome 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;
|
|
(o)
|
each
of Dome and its subsidiaries is not, and as at closing, will not be, in
default or in breach of any material contract, agreement or like
commitment;
|
|
(p)
|
Dome
and its subsidiaries have good and marketable title to all of the material
property or assets thereof to the extent described in the Dome Documents,
free of all mortgages, liens, charges, pledges, security interests,
encumbrances, claims or demands whatsoever, other than those described in
the Dome Documents, and no other property rights are necessary for the
conduct of the business of Dome and its subsidiaries as currently
conducted or contemplated to be conducted, Dome knows of no claim or basis
for any claim that might or could adversely affect the right thereof to
use, transfer or otherwise exploit such property rights, and except as
disclosed in the Dome Documents, neither Dome nor any of its subsidiaries
has any responsibility or obligation to pay any commission, royalty,
licence fee or similar payment to any person with respect to the property
rights thereof;
|
4
|
(q)
|
each
of Dome and its subsidiaries holds either freehold title, mining leases,
mining claims, mining concessions, mining applications or participating
interests or other conventional property or proprietary interests or
rights, recognized in the jurisdiction in which a particular property is
located, in respect of the ore bodies and minerals located in properties
in which Dome and its subsidiaries currently conduct business or propose
to conduct business under valid, subsisting and enforceable title
documents or other recognized and enforceable agreements or instruments,
sufficient to permit Dome and its subsidiaries to explore, mine, sell and
exploit the minerals related thereto, Dome and its subsidiaries have all
necessary surface rights, access rights and other necessary rights and
interest relating to the properties on which Dome and its subsidiaries
currently conduct business or propose to conduct business as are
appropriate in view of the rights and interest therein of Dome and its
subsidiaries, with only such exceptions as do not materially interfere
with the use made by Dome and its subsidiaries of the rights or interests
so held and each of the proprietary interests or rights and each of the
documents, agreements and instruments and obligations relating thereto
referred to above is currently in good standing in the name of Dome and
its subsidiaries;
|
|
(r)
|
any
and all of the agreements and other documents and instruments pursuant to
which Dome and its subsidiaries hold their property and assets (including
any interest in, or right to earn an interest in, any property), directly
or indirectly, are valid and subsisting agreements, documents or
instruments in full force and effect, enforceable in accordance with the
terms thereof, and none of Dome or its subsidiaries is in default of any
of the material provisions of any such agreements, documents or
instruments nor has any such default been alleged, and such properties and
assets are in good standing under the applicable statutes and regulations
of the jurisdictions in which they are situated, and there has been no
material default under any lease, licence or claim pursuant to which Dome
or its subsidiaries derive an interest in such property or assets and all
taxes required to be paid with respect to such properties and assets to
the date hereof have been paid. The interests of, or rights of
Dome and its subsidiaries to earn an interest in, any property are not
subject to any right of first refusal, purchase, acquisition, back-in or
other similar rights which are not disclosed in the Dome
Documents;
|
|
(s)
|
all
mining activities of Dome and its subsidiaries have been conducted in all
material respects in accordance and compliance with good mining and
engineering practices and all applicable material workers’ compensation
and health and safety and workplace Laws, regulations and policies have
been complied with in all material
respects;
|
|
(t)
|
each
of Dome and its subsidiaries has conducted and is conducting its business
in compliance in all material respects with all applicable environmental
protection legislation, regulations or by-laws or other similar Laws,
by-laws, rules and regulations or other lawful requirements of each
jurisdiction in which its business is carried;
and
|
5
|
(u)
|
no
regulatory authority having jurisdiction has issued any order preventing
or suspending trading of any currently outstanding securities of
Dome.
|
6
|
|
SCHEDULE
“B”
|
Representations
and Warranties of Metalline and Merger Sub
Metalline
and Merger Sub each represent and warrant to Dome as follows subject to the
disclosure schedule delivered to Dome herewith:
|
(a)
|
Metalline
is a corporation duly organized and validly existing under the laws of the
State of Nevada and:
|
|
(i)
|
it
is not in material default of its continuous disclosure obligations under
any applicable securities laws;
|
|
(ii)
|
it
is in good standing; and
|
|
(iii)
|
its
common shares are listed on, and Metalline is not in material default of
any rule or policy of the NYSE
Amex;
|
|
(b)
|
each
of the subsidiaries of Metalline is a corporation duly organized and
validly existing and in good standing under the laws of its jurisdiction
of incorporation and is in good
standing;
|
|
(c)
|
as
of the date hereof:
|
|
(i)
|
the
authorized capital of Metalline consists of 160,000,000 shares of common
stock. As of November 6, 2009, 48,834,429 shares of common
stock in the capital of Metalline were issued and
outstanding;
|
|
(ii)
|
Metalline
has options, warrants or other convertible securities issued or
outstanding as set out in Exhibit 1 hereto;
and
|
|
(iii)
|
the
authorized capital of Merger Sub consists of 1,000 shares of common
stock. As of the date of this Agreement, 100 shares of common
stock in the capital of Merger Sub were issued and outstanding;
and
|
|
(iv)
|
Merger
Sub has no options, warrants or other convertible securities issued or
outstanding;
|
|
(d)
|
The
Metalline Board has taken all necessary action so that none of the
execution or delivery of this Agreement or the Metalline Voting
Agreements, the consummation of the Merger, the purchase of shares of
Metalline Common Stock or the consummation of any other transaction
contemplated hereby will result in (i) the occurrence of a Triggering
Event pursuant to the Metalline Rights Agreement or (ii) the rights issued
pursuant to the Metalline Rights Agreement becoming evidenced by, and
transferable pursuant to, certificates separate from the certificates
representing shares of Metalline Common
Stock.
|
|
(e)
|
the
common stock of Metalline issuable pursuant to the Merger will, upon their
issuance, be validly issued and outstanding, fully paid and non-assessable
common shares of Metalline and will form part of a class of shares that is
listed and posted for trading on the NYSE Amex and at the Effective Time
will be listed and posted for trading on the TSX Venture
Exchange;
|
|
(f)
|
the
Metalline Board, by resolutions duly adopted at a meeting duly called and
held and not subsequently rescinded or modified in any way, has duly (i)
determined that this Agreement, the Merger and the Share Issuance are fair
to and in the best interests of Metalline and its stockholders, (ii)
approved this Agreement, the Merger and the Share Issuance, and (iii)
recommended that the stockholders of Metalline approve the Share Issuance
and directed that the Share Issuance be submitted for consideration by
Metalline’s stockholders at the Metalline Stockholders’
Meeting.
|
|
(g)
|
each
of Metalline and Merger Sub has all necessary corporate power and
authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated
hereby; the execution and delivery of this Agreement by Metalline and
Merger Sub and the consummation by Metalline and Merger Sub of the
transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action, and no other corporate proceedings on the
part of Metalline or Merger Sub are necessary to authorize this Agreement
or to consummate the transactions contemplated hereby (other than, with
respect to the Share Issuance, the approval of the Share Issuance by a
majority of the votes cast with respect to the Share Issuance at the
Metalline Stockholders’ Meeting, and with respect to the Merger, the
filing and recordation of appropriate merger documents as required by the
DGCL); this Agreement has been duly and validly executed and delivered by
Metalline and Merger Sub and, assuming due authorization, execution and
delivery by Dome, constitutes a legal, valid and binding obligation of
each of Metalline and Merger Sub, enforceable against each of Metalline
and Merger Sub in accordance with its terms, subject to the effect of any
applicable bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting creditors’ rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a
proceeding at Law or in equity);
|
|
(h)
|
neither
the execution and delivery of this Agreement nor the consummation of the
Merger will conflict with, result in a breach of or accelerate the
performance required by any agreement to which Metalline or any of its
subsidiaries is a party, or any Law, rules or regulations to which
Metalline or any of its subsidiaries or properties is
subject;
|
|
(i)
|
all
consents, approvals, permits, authorizations or filings as may be required
for the execution and delivery of this Agreement and the completion of the
transactions contemplated hereby have been or will, prior to closing, be
made or obtained, as applicable;
|
2
|
(j)
|
each
of Metalline and its subsidiaries has conducted and is conducting its
business in material compliance with all applicable laws and regulations
of each jurisdiction in which it carries on business and has not received
a notice of non-compliance, nor knows of, nor has reasonable grounds to
know of, any facts that could give rise to a notice of non-compliance with
any such laws, regulations or
permits;
|
|
(k)
|
there
are no undisclosed actions, suits or proceedings, pending or, to the
knowledge of Metalline, threatened against Metalline or its Subsidiaries,
at Law or in equity, or by any federal, provincial, state, municipal or
other governmental department, commission, board, bureau or agency,
domestic or foreign (“Governmental Authority”), and
Metalline is not aware of any existing grounds on which any action, suit
or proceeding might be commenced with any reasonable likelihood of
success;
|
|
(l)
|
the
audited consolidated financial statements of Metalline for the year ended
October 31, 2008 and the interim periods thereafter have been prepared in
accordance with generally accepted accounting principles (except as
required to comply with SEC reporting obligations), are true, correct and
complete in all material respects and present fairly the financial
condition of Metalline as at the end of such
periods;
|
|
(m)
|
Metalline
is not subject to any cease trade or other order of any applicable stock
exchange or securities regulatory authority and, to the knowledge of
Metalline, no investigation or other proceedings involving Metalline which
may operate to prevent or restrict trading of any securities of Metalline
are currently in progress or pending before any applicable stock exchange
or securities regulatory authority;
|
|
(n)
|
Metalline
does not have any material liability or obligation, whether accrued,
absolute, contingent or otherwise, not reflected in its latest
publicly-disclosed financial
statements;
|
|
(o)
|
there
is no bankruptcy, liquidation, winding-up or other similar proceeding
pending or in progress or, to the knowledge of Metalline, threatened
against Metalline before any court, regulatory or administrative agency or
tribunal;
|
3
|
(p)
|
Metalline
has filed with the securities regulatory authorities, stock exchanges and
all applicable self-regulatory authorities a true and complete copy of all
forms, reports, schedules, statements, certifications, material change
reports and other documents required to be filed by it (such forms,
reports, schedules, statements, certifications and other documents,
including any schedules included therein, are referred to in this
subsection as the “Metalline
Documents”). The Metalline Documents, at the time filed
or, if amended, as of the date of such amendment: (i) did not contain any
misrepresentation (as defined or interpreted by securities regulatory
authorities) and did not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
made, not misleading; 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 Metalline, except where such non-compliance has not had
and would not reasonably be expected to have a material adverse effect on
Metalline. Metalline 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;
|
|
(q)
|
each
of Metalline and its subsidiaries is not, and as at closing, will not be,
in default or in breach of any material contract, agreement or like
commitment;
|
|
(r)
|
Metalline
and its subsidiaries have good and marketable title to all of the material
property or assets thereof to the extent described in the Metalline
Documents, free of all mortgages, liens, charges, pledges, security
interests, encumbrances, claims or demands whatsoever, other than those
described in the Metalline Documents, and no other property rights are
necessary for the conduct of the business of Metalline and its
subsidiaries as currently conducted or contemplated to be conducted,
Metalline knows of no claim or basis for any claim that might or could
adversely affect the right thereof to use, transfer or otherwise exploit
such property rights, and except as disclosed in the Metalline Documents,
neither Metalline nor any of its subsidiaries has any responsibility or
obligation to pay any commission, royalty, licence fee or similar payment
to any person with respect to the property rights
thereof;
|
|
(s)
|
each
of Metalline and its subsidiaries holds either freehold title, mining
leases, mining claims, mining concessions, mining applications or
participating interests or other conventional property or proprietary
interests or rights, recognized in the jurisdiction in which a particular
property is located, in respect of the ore bodies and minerals located in
properties in which Metalline and its subsidiaries currently conduct
business or propose to conduct business under valid, subsisting and
enforceable title documents or other recognized and enforceable agreements
or instruments, sufficient to permit Metalline and its subsidiaries to
explore, mine, sell and exploit the minerals related thereto, Metalline
and its subsidiaries have all necessary surface rights, access rights and
other necessary rights and interest relating to the properties on which
Metalline and its subsidiaries currently conduct business or propose to
conduct business as are appropriate in view of the rights and interest
therein of Metalline and its subsidiaries, with only such exceptions as do
not materially interfere with the use made by Metalline and its
subsidiaries of the rights or interests so held and each of the
proprietary interests or rights and each of the documents, agreements and
instruments and obligations relating thereto referred to above is
currently in good standing in the name of Metalline and its
subsidiaries;
|
4
|
(t)
|
any
and all of the agreements and other documents and instruments pursuant to
which Metalline and its subsidiaries hold their property and assets
(including any interest in, or right to earn an interest in, any
property), directly or indirectly, are valid and subsisting agreements,
documents or instruments in full force and effect, enforceable in
accordance with the terms thereof, and none of Metalline or its
subsidiaries is in default of any of the material provisions of any such
agreements, documents or instruments nor has any such default been
alleged, and such properties and assets are in good standing under the
applicable statutes and regulations of the jurisdictions in which they are
situated, and there has been no material default under any lease, licence
or claim pursuant to which Metalline or its subsidiaries derive an
interest in such property or assets and all taxes required to be paid with
respect to such properties and assets to the date hereof have been paid.
The interests of, or rights of Metalline and its subsidiaries to earn an
interest in, any property are not subject to any right of first refusal,
purchase, acquisition, back-in or other similar rights which are not
disclosed in the Metalline
Documents;
|
|
(u)
|
all
mining activities of Metalline and its subsidiaries have been conducted in
all material respects in accordance and compliance with good mining and
engineering practices and all applicable material workers’ compensation
and health and safety and workplace laws, regulations and policies have
been complied with in all material
respects;
|
|
(v)
|
each
of Metalline and its subsidiaries has conducted and is conducting its
business in compliance in all material respects with all applicable
environmental protection legislation, regulations or by-laws or other
similar laws, by-laws, rules and regulations or other lawful requirements
of each jurisdiction in which its business is
carried;
|
|
(w)
|
no
regulatory authority having jurisdiction has issued any order preventing
or suspending trading of any currently outstanding securities of
Metalline; and
|
|
(x)
|
Merger
Sub has not conducted any business prior to the date hereof and has, and
at the Effective Time will have, no assets liabilities or obligations of
any nature other than those incident to its formation and pursuant to this
Agreement and the Merger.
|
5
SCHEDULE
“C”
Mutual
Conditions
The
obligations of Dome and Metalline to complete the Merger will be subject to the
following conditions precedent:
|
(a)
|
the
completion of the Dome Private Placement in accordance with the terms set
out herein;
|
|
(b)
|
the
completion of the Metalline Private Placement in accordance with the terms
set out herein;
|
|
(c)
|
this
Agreement shall have been approved and adopted by the requisite
affirmative vote of the stockholders of Dome in accordance with the DGCL
and Dome’s Certificate of
Incorporation;
|
|
(d)
|
the
Share Issuance shall have been approved by the requisite affirmative vote
of the stockholders of Metalline in accordance with the rules and
regulations of the NYSE Amex, the laws of the State of Nevada and
Metalline’s Articles of
Incorporation;
|
|
(e)
|
The
shares of Metalline Common Stock to be issued in the Merger shall have
been authorized for listing on the NYSE
Amex;
|
|
(f)
|
receipt
of all required consents and approvals to the
Merger;
|
|
(g)
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The
Registration Statement shall have been declared effective by the SEC under
the Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceeding
for that purpose shall have been initiated by the SEC;
and
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(h)
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no
provision of any applicable Law shall be in effect, and no judgment,
injunction, order or decree shall have been entered since the date of this
Agreement and shall be in effect, that makes the Merger illegal or
otherwise restrains, enjoins or otherwise prohibits the consummation of
the Merger, except where the violation of such Law, judgment, injunction,
order or decree that would occur if the Merger were consummated would not
have a material adverse effect on Dome or a material adverse effect on
Metalline.
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Additional
Conditions to the Obligations of Metalline
Metalline’s
obligations to complete the Merger will be subject to the following conditions
precedent:
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(a)
|
the
representations and warranties of Dome in this Agreement shall be true and
correct in all material respects as of the date of this Agreement and at
the time of closing of the Merger,
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|
(b)
|
Dome
shall have complied and duly performed in all material respects with its
covenants in this Agreement;
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|
(c)
|
the
board of directors of Dome shall have adopted all necessary resolutions,
and all other necessary corporate action shall have been taken by Dome and
its subsidiaries to permit the completion of the Merger;
and
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(d)
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there
shall have been no adverse material change in the business and affairs of
Dome, or any event, occurrence or development which would materially and
adversely affect the ability of Dome to complete the
Merger.
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Additional
Conditions to the Obligations of Dome
Dome’s
obligation to complete the Merger will be subject to the following conditions
precedent:
|
(e)
|
the
representation and warranties of Metalline in this Agreement shall be true
and correct in all material aspects as of the date of this Agreement and
at the time of closing of the
Merger;
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|
(f)
|
Metalline
shall have complied and duly performed in all material respects with its
covenants in this Agreement;
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|
(g)
|
the
board of directors of Metalline shall have adopted all necessary
resolutions, and all other necessary corporate action shall have been
taken by Metalline and its subsidiaries to permit the completion of the
Merger;
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(h)
|
the
approval for listing on the TSX-V of the Metalline shares, including those
to be issued pursuant to the Merger;
and
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(i)
|
there
shall have been no adverse material change in the business and affairs of
Metalline, or any event, occurrence, or development which could materially
and adversely affect the ability of Metalline to complete the
Merger.
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2
SCHEDULE
“D”
Except as
disclosed in the disclosure schedule attached hereto, each of Dome and
Metalline agrees that from the date hereof until completion of the Merger or
termination of this Agreement it will, and will cause each of its subsidiaries
to:
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(a)
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operate
its business in the ordinary
course;
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|
(b)
|
comply
with all requirements which applicable Law may impose on it or its
subsidiaries with respect to the
Merger;
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(c)
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promptly
advise the other party (i) of any event that would render any
representation or warranty given by it (except any such representation or
warranty which speaks as of a date prior to the occurrence of such event),
if made on or as of the date of such event or the date of the closing of
the Merger, untrue or inaccurate in any material respect, (ii) of any
material adverse change in respect of its business, affairs, operations
and financial condition, and (iii) of any material breach by it of any
covenant or agreement contained herein and in the Definitive
Agreement;
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(d)
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subject
to Section 4.6, use its reasonable best efforts to obtain the approval of
its stockholders to the Merger Agreement or Share Issuance, as
applicable;
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|
(e)
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use
best efforts to obtain all waivers, consents and approvals from other
parties to loan agreements, leases or other contracts or from such
applicable governmental or regulatory bodies required to be obtained by it
or its subsidiaries to consummate the transactions contemplated
hereby;
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(f)
|
cause
the current insurance (or re-insurance) policies to not be cancelled or
terminated or any of the coverage thereunder 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 grater than
coverage under the cancelled, terminated or lapsed policies for
substantially similar premiums are in full force and
effect;
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(g)
|
incur
or commit to incur capital expenditures only in the ordinary course of
business consistent with past practice and with the prior written consent
of the other party;
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|
(h)
|
not
alter its authorized capital, or issue (other than on exercise of
presently outstanding convertible securities) or reach any agreement or
understanding with any other party to issue any securities of it or its
subsidiaries without the prior written consent of the other
party;
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(i)
|
not
amend its constating documents or amend the constating documents of any
subsidiary (except to the extent required to complete the
Merger);
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|
(j)
|
not
reorganize, amalgamate or merge with any other person, nor acquire or
agree to acquire by amalgamating, merging or consolidating with,
purchasing any of the voting securities or any of the assets of or
otherwise, any business of any corporation, partnership, association or
other business organization or division
thereof;
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(k)
|
not
purchase, sell, transfer, lease or dispose of any assets other than in the
ordinary course of business consistent with past practice, or enter into,
modify or amend any material agreement other than in the ordinary course
of business without the prior written consent of the other
party;
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|
(l)
|
not
incur or become liable upon any indebtedness or becoming liable in respect
of the obligation of any other
person;
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|
(m)
|
not
mortgage, charge, pledge or encumber or agree to mortgage, charge, pledge
or encumber any of its property;
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(n)
|
not
(i) satisfy or settle any claims or liabilities prior to the same being
due, except such as have been reserved against in its financial
statements, (ii) grant any waiver, exercise any option or relinquish any
contractual rights, or (iii) enter into any interest rate, currency or
commodity swaps, xxxxxx or other similar financial
instruments;
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|
(o)
|
not
declare a dividend, including a declaration of dividends for the purpose
of effecting a share subdivision, or make any payment or distribution to
stockholders;
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|
(p)
|
not
establish or amend any collective bargaining, bonus, profit sharing,
compensation, stock option, stock ownership, stock compensation, pension,
retirement, deferred compensation, employment, termination, severance or
other plan, agreement, trust, fund, policy or arrangement for the benefit
of any directors, officers or employees other than in the ordinary course
of business;
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|
(q)
|
not
make any changes to existing accounting or material business practices
except as required by applicable Law or required by generally accepted
accounting principles or make any material tax election inconsistent with
past practice; and
|
|
(r)
|
cooperate
and assist the other party in such other ways to the extent practicable to
implement the Merger on the terms set forth herein and in the Definitive
Agreement.
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2
