THIS ARRANGEMENT AGREEMENT made the 21st day of July, 1995.
BETWEEN:
SCOTIA PRIME MINERALS, INCORPORATED, a body corporate, continued under
the laws of the Province of Nova Scotia
OF THE FIRST PART
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MINERA ANDES INC., a body corporate, incorporated under the laws of
the Province of Alberta
OF THE SECOND PART.
WHEREAS the parties hereto desire to amalgamate and to continue as one
corporation and in order to effect same it is necessary for the parties hereto
to enter into an Arrangement in accordance with the terms and conditions hereof;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
premises and the mutual covenants hereinafter contained, the parties hereto
agree as follows:
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS
In this Agreement and in the recitals hereto, unless the context
otherwise requires, the following words and phrases shall have the meanings
hereinafter set forth:
"Act" means the Business Corporations Act (Alberta) S.A., 1981,
c.B-15, as amended, together with all regulations promulgated pursuant
thereto;
"Amalco" means the Corporation under the Act resulting from the
Amalgamation;
"Amalco Performance Right" means the right of X.X. Xxxxxxxxxx, Inc. to
acquire common shares of Amalco, upon the satisfaction of certain
performance criteria;
"Amalco Common Shares" means common shares in the capital stock of
Amalco;
"Amalgamated Corporation" or "Amalco" means the corporation continuing
from the Amalgamation of the Amalgamating Companies;
"Amalgamating Companies" means Minera Andes and Scotia Prime;
"Amalgamating Company" means any one of Minera Andes or Scotia Prime;
"Amalgamating Company's securityholders" means the Minera Andes
securityholders and Scotia Prime securityholders;
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"Amalgamation" means the amalgamation of Minera Andes and Scotia Prime
as one corporation which is to occur on the Effective Date after the
Continuance has become effective;
"Arrangement" means the arrangement between the Amalgamating Companies
securityholders under section 186 of the Act as set forth in the Plan
of Arrangement attached hereto as Schedule A;
"Arrangement Agreement", "Agreement", "hereof", "herein", and
"hereunder" and similar expressions refer to this agreement and the
schedules attached hereto and not to any particular article, section
or other portion hereof and includes all amendments, if any, thereto;
"Articles of Amalgamation" means the articles of amalgamation as set
forth in Schedule C hereto to be filed by the parties hereto pursuant
to the Amalgamation;
"Articles of Arrangement" means the articles of arrangement as set
forth in Schedule B-1 and B-2 to be filed by the parties hereto
pursuant to the Arrangement;
"Articles of Continuance" means the articles of continuance of Scotia
Prime as set forth in Schedule D to be filed by Scotia Prime pursuant
to the Continuance;
"Business Day" means a day other than Saturdays and Sundays when banks
in Calgary are generally open for the transaction of banking business;
"Bylaws" means the bylaws of Minera Andes to be adopted upon the
Amalgamation;
"Certificate of Amalgamation" means the certificate of amalgamation to
be issued under the Act by the Registrar with respect to the
Amalgamation;
"Certificate of Continuance" means the certificate of continuance to
be issued under the Act by the Registrar with respect to the
Continuance;
"Consultation Fee" means the issuance of 168,000 Minera Common Shares
to certain individuals as payment for providing financial advice with
respect to the financing of Minera Andes;
"Continuance" means the continuance of Scotia Prime under the Act
which is to occur prior to the Amalgamation;
"Court" means the Court of Queen's Bench of Alberta, Judicial District
of Calgary;
"Effective Date" means the date set forth in the Certificate of
Amalgamation;
"Exchange" means The Alberta Stock Exchange or such other exchange
located in Canada or the Canadian Dealing Network Inc.;
"Final Order" means the Order of the Court approving the Arrangement
to be granted pursuant to the provisions of section 186 of the Act;
"Information Circular" means the joint information circular dated July
21, 1995 prepared by the managements of the Amalgamating Companies for
the joint solicitation of proxies for the Meetings;
"Interim Order" means the Order of the Court providing for, among
other things, the calling of the Meetings, a copy of which is set
forth as Appendix E to the Information Circular;
"Meetings" means, collectively, the Minera Andes Meeting and the
Scotia Prime Meeting;
"Merger" means the Continuance, Amalgamation and related transactions
contemplated by this Arrangement Agreement;
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"Minera Andes" means Minera Andes Inc., a corporation incorporated
under the Act;
"Minera Performance Right" means the right of X.X. Xxxxxxxxxx, Inc. to
acquire common shares of Minera Andes Inc., upon the satisfaction of
certain performance criteria;
"Minera Common Shares" means the common shares in the capital of
Minera Andes and "Minera Andes Common Shareholders" means the holders
from time to time of Minera Andes Common Shares;
"Minera Andes Meeting" means the special meeting of Minera Andes
Common Shareholders called to vote upon the Minera Andes Resolution
and any adjournments thereof;
"Minera Andes Options" means the options to acquire Minera Andes
Common Shares and "Minera Andes Optionholders" means the holders from
time to time of Minera Andes Options;
"Minera Andes Resolution" means the special resolution in
substantially the form set forth as Appendix A-3 to the Information
Circular to be voted upon at the Minera Andes Meeting;
"Minera Andes securityholders" means collectively the Minera Andes
Common Shareholders, Minera Andes Optionholders and the holder of the
Minera Performance Right;
"Misrepresentation" means "misrepresentation" as defined in the
Securities Act, Alberta, S.A. 1981, c.S-6.1 as amended;
"Plan of Arrangement" means the plan of arrangement as set forth and
described in Schedule A attached hereto;
"Private Placement" means the private placement of up to and including
3,500,000 Minera Common Shares for $1.00 per Minera Common Share;
"Qualified Provinces" means the provinces of Alberta, British
Columbia, Ontario and Nova Scotia;
"Record Date" means July 28, 1995;
"Registrar" means the registrar appointed pursuant to the Act;
"Scotia Prime" means Scotia Prime Minerals, Incorporated, a company
continued under the Companies Act (Nova Scotia);
"Scotia Prime Common Shares" means the common shares in the capital of
Scotia Prime and "Scotia Prime Common Shareholders" means the holders
from time to time of Scotia Prime Common Shares;
"Scotia Prime Meeting" means the special meeting of Scotia Prime
Common Shareholders called to vote upon the Scotia Prime Resolution
and any adjournments thereof;
"Scotia Prime Resolution" means the special resolution in
substantially the form set forth as Appendix A-2 to the Information
Circular to be voted upon at the Scotia Prime Meeting; and
"Scotia Prime securityholders" means collectively the Scotia Prime
Common Shareholders;
1.2 CURRENCY
Unless otherwise stated, all sums of money which are referred to in
this Agreement and in the Arrangement are expressed in lawful money of Canada.
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1.3 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Agreement and of the Arrangement into articles,
sections and paragraphs and the insertion of headings are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement or of the Arrangement.
1.4 NUMBER
In this Agreement and in the Arrangement, words importing the singular
number only shall include the plural and vice versa, words importing the use of
any gender shall include all genders and words importing persons shall include
firms and corporations and vice versa, all as the context may require.
1.5 DATE FOR ANY ACTION
In the event that any date on which any action is required to be taken
hereunder or under the Arrangement by any of the parties is not a Business Day
in the place where the action is required to be taken, such action shall be
required to be taken on the next succeeding day which is a Business Day in such
place.
ARTICLE II
ARRANGEMENT
2.1 PURPOSE
The parties hereto have entered into this Agreement for the purpose of
effecting the Arrangement contemplated hereby on the Effective Date in the
following order: the Continuance and the Amalgamation.
The Continuance and the Amalgamation together constitute the Merger
which will effectively combine the Amalgamating Companies into a single
corporation under the laws of the Province of Alberta.
Scotia Prime will be continued under the Act pursuant to the
Continuance as if Scotia Prime had been originally incorporated under the laws
of Alberta, prior to the Amalgamation.
2.2 ORDER OF TRANSACTION
Subject to the terms hereof, upon receiving approval for the Scotia
Prime Resolution, Scotia Prime shall promptly file such documents as may be
required to effect the Continuance prior to the Amalgamation. Thereafter,
subject to the terms hereof, and after all parties hereto have acknowledged to
the others the satisfaction of all conditions hereof, the parties hereto shall
cause to be sent to the Registrar, pursuant to section 186 of the Act, the
Articles of Arrangement and the Articles of Amalgamation relating to the
Amalgamation with the request that a Certificate of Amalgamation be issued
effective as of the Effective Date, pursuant to the Act.
2.3 AMALCO
Subject to the terms and conditions of this Agreement, the parties
agree to amalgamate as of the Effective Date and continue as one corporation
under the Act, in accordance with the terms and conditions hereinafter set
forth:
(a) the name of Amalco shall be "Minera Andes Inc." or such other name as
the first directors may resolve, the Registrar may permit and the
Exchange may approve;
(b) the registered office of Amalco shall be located at the registered
office in Alberta of Minera Andes as at the Effective Date, until
changed in accordance with the Act;
(c) there shall be no restrictions on the business which Amalco may carry
on;
(d) the authorized share capital of Amalco shall be as set forth in the
Articles of Amalgamation attached hereto as Schedule "C";
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(e) the minimum number of directors of Amalco shall be one and the maximum
number of directors of Amalco shall be fifteen;
(f) the first directors of Amalco shall be as follows (whose current
addresses are as follows):
Name Address
---- -------
Xxxxx Xxxxxxx Spokane, Washington
Xxxxxx Xxxxxx Spokane, Washington
Xxxxxx Xxxxxx West Vancouver, British Columbia
Xxxx Xxxxx Xxxxxx Harbour, British Columbia
(g) the said first directors shall hold office until the first annual
general meeting of Amalco or until their successors are elected or
appointed;
(h) the bylaws of Minera Andes in effect on the Effective Date shall be
the Bylaws of Amalco until repealed or changed;
(i) the board of directors of Amalco may from time to time, without
authorization of the shareholders:
(i) borrow money upon the credit of Amalco;
(ii) issue, re-issue, sell or pledge debt obligations of Amalco;
(iii) subject to section 42 of the Act, give a guarantee on behalf of
Amalco to secure performance of any obligation of any person;
(iv) mortgage, hypothecate, pledge or otherwise create a security
interest in all or any real or personal property, moveable or
immoveable property of Amalco, owned or subsequently acquired, to
secure any obligation of Amalco;
(j) the names and offices of the first officers of Amalco, until others
are appointed in their place in accordance with the provisions of the
Bylaws, shall be as follows:
Name Office
---- ------
Xxxxx Xxxxxxx President
Xxxxxx Xxxxxx Chief Financial Officer, Secretary
Xxxxx Xxxxx Vice-President, Argentina Exploration
(k) the auditor of Amalco shall be Xxxxxxxx, Xxxxxxxx & Co.; Chartered
Accountants of Vancouver, British Columbia;
(l) legal counsel for Amalco shall be the legal counsel for Minera Andes
as at the Effective Date;
(m) The Montreal Trust Company of Canada, at its office in the City of
Calgary, in the Province of Alberta, shall be the registrar and
transfer agent of the Amalco Common Shares;
(n) the form of incentive share option plan attached hereto as Schedule
"E", shall be adopted by Amalco, its directors and shareholders.
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2.4 COVENANTS OF MINERA ANDES
Minera Andes covenants and agrees with the other Amalgamating Company
that it will:
(a) take all necessary action to give effect to the transactions
contemplated by this Agreement and the Arrangement and will not take
any action inconsistent with such transactions or the covenants set
forth herein;
(b) use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any
instruments and take such measures as may be appropriate to fulfil its
obligations hereunder and to carry out the transactions contemplated
hereby;
(c) proceed with an application to the Court under section 186 of the Act
for the Interim Order;
(d) convene the Minera Andes Meeting as ordered by the Interim Order,
solicit proxies to be voted at such meeting in favour of the Minera
Andes Resolution and conduct the Minera Andes Meeting in accordance
with the Interim Order, the bylaws of Minera Andes and as otherwise
may be required by law;
(e) give the other Amalgamating Company's representatives full access,
during normal business hours and upon reasonable notice, to all of
Minera Andes's assets, properties, books, records, agreements and
commitments and furnish such representatives during such period with
all such information concerning Minera Andes as the other Amalgamating
Company may reasonably request;
(f) until the Effective Date:
(i) carry on its business in the ordinary course, except as otherwise
contemplated in this Agreement or as otherwise agreed to in
writing by the other Amalgamating Company; and
(ii) without the prior written agreement of the other Amalgamating
Company, take no action which may result in a material adverse
change in the affairs of Minera Andes including, without limiting
the foregoing, a sale of assets, except in the ordinary course of
business; and
(iii) without the prior written agreement of the other Amalgamating
Company, not enter into any employment, consultory or severance
agreements or other similar arrangements with any director or
officer of Minera Andes or any other person, except in the
ordinary course of business;
(g) use all reasonable efforts to cause each of the conditions precedent
set forth in Article IV hereof to be complied with on or before the
Effective Date;
(h) subject to the approval of the Minera Andes Common Shareholders of the
Minera Andes Resolution and the provisions hereof, proceed to make the
appropriate application for the Final Order;
(i) subject to the provisions hereof, proceed, on the Effective Date, to
file the Articles of Arrangement, Articles of Amalgamation and the
Final Order with the Registrar in order for the Registrar to issue the
Certificate of Amalgamation;
(j) take all steps and complete all things in order to permit the
Amalgamation on the Effective Date after the Continuance;
(k) except as set forth herein, not declare or pay any dividends or make
any distribution of its properties or assets to its shareholders or to
others or retire or redeem any Minera Andes Common Shares or other of
its securities or issue any additional shares or other securities
except
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for the issuance of any Minera Andes Common Shares on the conversion
or exercise prior to the Effective Date of the Minera Andes Options,
Minera Performance Right or the Private Placement or the Consultation
Fee;
(l) prior to the Effective Date, not issue or enter into any agreement or
agreements to issue or grant options, warrants or rights to purchase
shares of its capital or other of its securities;
(m) prior to the Effective Date, not merge into or with, consolidate with,
or, except in the ordinary course of business, sell any of its assets
to any other corporation or person or perform any act or enter into
any transaction or negotiation which might interfere or be
inconsistent with the consummation of the transactions hereby
contemplated;
(n) except as specifically provided for hereunder, not alter or amend its
articles or bylaws as the same exist at the date of this Agreement;
(o) advise the other Amalgamating Company, immediately after the Minera
Andes Meeting, of the number of Minera Andes Common Shares for which
Minera Andes has received, pursuant to section 184 of the Act, written
objection to the Minera Andes Resolution;
(p) convene the Minera Andes Meeting and conduct such meeting in
accordance with the bylaws of Minera Andes and as otherwise may be
required by law;
(q) hold and require its respective officers, employees, agents and
representatives to hold, in strict confidence, all data and
information obtained from the other Amalgamating Company or from any
officer, employee, agent or representative thereof, whether pertaining
to the financial condition, assets, results of operations or method of
operation thereof or otherwise, except any of the same which:
(i) was or is in the public domain;
(ii) is required to be disclosed by any such persons in connection
with any court action or any proceedings before, or the
regulatory requirements of, any governmental, regulatory or
administrative body or in connection with securing any consent
required hereunder;
(iii) thereafter, other than through an act or failure to act on the
part of a party hereto, becomes information generally available
to the public;
provided that if the Arrangement shall not be consummated, such party
shall return or cause to be returned to the other Amalgamating Company
all data, information or other written material respecting such
parties obtained by any of the foregoing persons from the other
Amalgamating Company or from any officer, employee, agent or
representative of such parties in connection with the negotiation or
consummation of this Agreement or other matters contemplated by this
Agreement;
(r) ensure that the Information Circular and related documentation to be
distributed in connection with the solicitation of proxies by the
management of Minera Andes shall comply as to form and substance with
the requirements of the Qualifying Provinces and the information and
data contained therein shall, except as it relates to the other
Amalgamating Company, be true, correct and complete in all material
respects, shall not contain any untrue statement of any material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading in
light of the circumstances in which they were made.
2.5 COVENANTS OF SCOTIA PRIME
Scotia Prime covenants and agrees with the other Amalgamating Company
that it will:
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(a) take all necessary action to give effect to the transactions
contemplated by this Agreement and the Arrangement and will not take
any action inconsistent with such transactions or the covenants set
forth herein;
(b) use all reasonable efforts to obtain all necessary consents,
assignments, waivers and amendments to or terminations of any
instruments and take such measures as may be appropriate to fulfil its
obligations hereunder and to carry out the transactions contemplated
hereby;
(c) proceed with an application to the Court under section 186 of the Act
for the Interim Order;
(d) convene the Scotia Prime Meeting as ordered by the Interim Order,
solicit proxies to be voted at such meeting in favour of the Scotia
Prime Resolution and conduct the Scotia Prime Meeting in accordance
with the Interim Order, the bylaws of Scotia Prime and as otherwise
may be required by law;
(e) give the other Amalgamating Company's representatives full access,
during normal business hours and upon reasonable notice, to all of
Scotia Prime's assets, properties, books, records, agreements and
commitments and furnish such representatives during such period with
all such information concerning Scotia Prime as the other Amalgamating
Company may reasonably request;
(f) until the Effective Date:
(i) carry on its business in the ordinary course, except as otherwise
contemplated in this Agreement or as otherwise agreed to in
writing by the other Amalgamating Company;
(ii) without the prior written agreement of the other Amalgamating
Company, take no action which may result in a material adverse
change in the affairs of Scotia Prime including, without limiting
the foregoing, a sale of assets; and
(iii) without the prior written agreement of the other Amalgamating
Company, not enter into any employment, consultory or severance
agreements or other similar arrangements with any director or
officer of Scotia Prime or any other person;
(g) use all reasonable efforts to cause each of the conditions precedent
set forth in Article IV hereof to be complied with on or before the
Effective Date;
(h) subject to the approval of the Scotia Prime Common Shareholders of the
Scotia Prime Resolution and the provisions hereof, proceed to make the
appropriate application for the Final Order;
(i) subject to the provisions hereof, proceed, on the Effective Date, to
file the Articles of Arrangement, Articles of Amalgamation and the
Final Order with the Registrar in order for the Registrar to issue the
Certificate of Amalgamation;
(j) take all steps and complete all things in order to permit the
Amalgamation on the Effective Date after the Continuance;
(k) except as set forth herein, not declare or pay any dividends or make
any distribution of its properties or assets to its shareholders or to
others or retire or redeem any Scotia Prime Common Shares or other of
its securities or issue any additional shares or other securities;
(l) prior to the Effective Date, not issue or enter into any agreement or
agreements to issue or grant options, warrants or rights to purchase
shares of its capital or other of its securities;
(m) prior to the Effective Date, not merge into or with, consolidate with,
or, except in the ordinary course of business, sell any of its assets
to any other corporation or person or perform any act or enter into
any transaction or negotiation which might interfere or be
inconsistent with the consummation of the transactions hereby
contemplated;
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(n) except as specifically provided for hereunder, not alter or amend its
articles or bylaws as the same exist at the date of this Agreement;
(o) advise the other Amalgamating Company, immediately after the Scotia
Prime Meeting, of the number of Scotia Prime Common Shares for which
Scotia Prime has received, pursuant to section 184 of the Act, written
objection to the Scotia Prime Resolution;
(p) convene the Scotia Prime Meeting and conduct such meeting in
accordance with the bylaws of Scotia Prime and as otherwise may be
required by law;
(q) hold and require its respective officers, employees, agents and
representatives to hold, in strict confidence, all data and
information obtained from the other Amalgamating Company or from any
officer, employee, agent or representative thereof, whether pertaining
to the financial condition, assets, results of operations or method of
operation thereof or otherwise, except any of the same which:
(i) was or is in the public domain;
(ii) is required to be disclosed by any such persons in connection
with any court action or any proceedings before, or the
regulatory requirements of, any governmental, regulatory or
administrative body or in connection with securing any consent
required hereunder;
(iii) thereafter, other than through an act or failure to act on the
part of a party hereto, becomes information generally available
to the public;
provided that if the Arrangement shall not be consummated, such party
shall return or cause to be returned to the other Amalgamating Company
all data, information or other written material respecting such
parties obtained by any of the foregoing persons from the other
Amalgamating Company or from any officer, employee, agent or
representative of such parties in connection with the negotiation or
consummation of this Agreement or other matters contemplated by this
Agreement;
(r) ensure that the Information Circular and related documentation to be
distributed in connection with the solicitation of proxies by the
management of Scotia Prime shall comply as to form and substance with
the requirements of the Qualifying Provinces and the information and
data contained therein shall, except as it relates to the other
Amalgamating Company, be true, correct and complete in all material
respects, shall not contain any untrue statement of any material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading in
light of the circumstances in which they were made; and
(s) take all necessary action to give effect to the Continuance.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF MINERA ANDES
Minera Andes represents and warrants to and in favour of the other
Amalgamating Company as follows, and acknowledges that the other Amalgamating
Company is relying upon such representations and warranties:
(a) Minera Andes is duly organized and validly existing and has the
corporate power and authority to own or lease its property and assets
and to carry on its business as now conducted by it and has the
corporate power and capacity to enter into this Agreement and, subject
to obtaining the requisite approvals contemplated hereby, to perform
its obligations hereunder;
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(b) the authorized and issued capital of Minera Andes as at the date
hereof is as set forth in the Information Circular all of which issued
shares or securities have been duly and validly issued as fully paid
and non-assessable;
(c) the execution and delivery of this Agreement and the completion of the
transactions contemplated herein:
(i) do not and will not result in the breach of, or violate any term
or provision of, the articles or by-laws of Minera Andes;
(ii) will not as of the Effective Date conflict with, result in the
breach of, constitute a default under, or accelerate or permit
the acceleration of the performance required by, any agreement,
instrument, licence, permit or authority to which Minera Andes is
a party or by which it is bound and which is material to Minera
Andes or to which any material property of Minera Andes is
subject or result in the creation of any lien, charge or
encumbrance upon any of the assets of Minera Andes under any such
agreement or instrument, or give to others any interest or right,
including rights of purchase, termination, cancellation or
acceleration, under any such agreement, instrument, licence,
permit or authority;
(iii) do not or will not violate any provision of law or
administrative regulation or any judicial or administrative
order, award, judgment or decree applicable to, and known to
(after due enquiry), Minera Andes, the breach of which would have
a material adverse effect on Minera Andes;
(d) except as disclosed in the Information Circular, including the
consolidated audited financial statements of Minera Andes and the
notes thereto for the fiscal year ended December 31, 1994 and the
interim unaudited financial statements for the period ended March 31,
1995 as set forth in the Information Circular, there are no actions,
suits, proceedings or investigations commenced, or to the knowledge of
Minera Andes (after due enquiry) contemplated or threatened, against
or affecting Minera Andes in law or in equity before or by any
government department, commission, board, bureau, court, agency,
arbitrator, or instrumentality, domestic or foreign, of any kind nor,
to the best of the knowledge of Minera Andes, are there any existing
facts or conditions which may reasonably be expected to be a proper
basis for any actions, suits, proceedings or investigations, other
than in connection with the exercise of rights of dissent referred to
in Section 4.1 of the Plan of Arrangement, which in any case would
prevent or hinder the consummation of the transactions contemplated by
this Agreement or which can reasonably be expected to have a material
adverse effect on the business, operations, properties, assets or
affairs, financial or otherwise, of Minera Andes;
(e) the execution and delivery of this Agreement and the completion of the
transactions contemplated herein have been duly approved by the board
of directors of Minera Andes, and this Agreement constitutes a valid
and binding obligation of Minera Andes enforceable against it in
accordance with its terms;
(f) Minera Andes is under no obligation, contractual or otherwise, to
issue any further securities, other than the issue of Minera Andes
Common Shares pursuant to the Minera Performance Right and pursuant to
Minera Andes Options, the Private Placement and the Consultation Fee;
(g) the information set forth in the Information Circular regarding Minera
Andes is true, correct and complete in all material respects and does
not contain any Misrepresentation;
(h) Minera Andes has not received notice of any defaults under any of the
provisions of the Securities Act, Alberta or the Act or any other
security or regulatory authority;
(i) Minera Andes is not a reporting issuer as defined by the Securities
Act in any jurisdiction;
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(j) Minera Andes is not liable for any material federal, provincial or
municipal or local taxes, assessments or other imposts or penalties
due and unpaid at the date hereof in respect of its income, business
or property or for the payment of any tax instalment due in respect of
its income, business or property or for the payment of any tax
instalment due in respect of its current taxation year or any previous
taxation years, and no such taxes, assessments, imposts or penalties
are required to be reserved against it; and it is not in default in
filing any returns or reports covering any federal, provincial or
municipal or local taxes, assessments or other imposts in respect of
its income, business or property;
(k) Minera Andes has been conducting its business in compliance with all
applicable laws, rules and regulations in each jurisdiction in which
it carries on business; is not in breach of any such laws, rules and
regulations and is duly licensed, registered and qualified in each
jurisdiction in which it owns or leases property or carries on
business to enable its business to be kept on as now conducted and its
property and assets will be owned, leased and operated and such
licences, registrations and qualifications are valid, subsisting and
in good standing; and
(l) Minera Andes is not aware of any information or knowledge of any facts
not previously disclosed to the other Amalgamating Company relating to
it, its business or the securities of Minera Andes which are
materially adverse and which, if known to the other Amalgamating
Company, might reasonably be expected to deter the other Amalgamating
Company from completing the transactions herein contemplated.
3.2 REPRESENTATIONS AND WARRANTIES OF SCOTIA PRIME
Scotia Prime represents and warrants to and in favour of the other
Amalgamating Company as follows, and acknowledges that the other Amalgamating
Company is relying upon such representations and warranties:
(a) Scotia Prime is duly organized and validly existing and has the
corporate power and authority to own or lease its property and assets
and to carry on its business as now conducted by it and has the
corporate power and capacity to enter into this Agreement and, subject
to obtaining the requisite approvals contemplated hereby, to perform
its obligations hereunder;
(b) the authorized and issued capital of Scotia Prime as at the date
hereof is as set forth in the Information Circular all of which issued
shares or securities have been duly and validly issued as fully paid
and non-assessable;
(c) the execution and delivery of this Agreement and the completion of the
transactions contemplated herein:
(i) do not and will not result in the breach of, or violate any term
or provision of, the articles or by-laws of Scotia Prime;
(ii) will not as of the Effective Date conflict with, result in the
breach of, constitute a default under, or accelerate or permit
the acceleration of the performance required by, any agreement,
instrument, licence, permit or authority to which Scotia Prime is
a party or by which it is bound and which is material to Scotia
Prime or to which any material property of Scotia Prime is
subject or result in the creation of any lien, charge or
encumbrance upon any of the assets of Scotia Prime under any such
agreement or instrument, or give to others any interest or right,
including rights of purchase, termination, cancellation or
acceleration, under any such agreement, instrument, licence,
permit or authority; and
(iii) do not or will not violate any provision of law or
administrative regulation or any judicial or administrative
order, award, judgment or decree applicable to, and known to
(after due enquiry), Scotia Prime, the breach of which would have
a material adverse effect on Scotia Prime;
- 12 -
(d) except as disclosed in the Information Circular, including the
consolidated audited financial statements of Scotia Prime and the
notes thereto for the fiscal year ended December 31, 1994 and the
interim financial statements for the period ended March 31, 1995 as
set forth in the Information Circular, there are no actions, suits,
proceedings or investigations commenced, or to the knowledge of Scotia
Prime (after due enquiry) contemplated or threatened, against or
affecting Scotia Prime in law or in equity before or by any government
department, commission, board, bureau, court, agency, arbitrator, or
instrumentality, domestic or foreign, of any kind nor, to the best of
the knowledge of Scotia Prime, are there any existing facts or
conditions which may reasonably be expected to be a proper basis for
any actions, suits, proceedings or investigations, other than in
connection with the exercise of rights of dissent referred to in
Section 4.1 of the Plan of Arrangement, which in any case would
prevent or hinder the consummation of the transactions contemplated by
this Agreement or which can reasonably be expected to have a material
adverse effect on the business, operations, properties, assets or
affairs, financial or otherwise, of Scotia Prime;
(e) the execution and delivery of this Agreement and the completion of the
transactions contemplated herein have been duly approved by the board
of directors of Scotia Prime, and this Agreement constitutes a valid
and binding obligation of Scotia Prime enforceable against it in
accordance with its terms;
(f) Scotia Prime is under no obligation, contractual or otherwise, to
issue any further securities;
(g) the information set forth in the Information Circular regarding Scotia
Prime is true, correct and complete in all material respects and does
not contain any Misrepresentation;
(h) Scotia Prime has not received notice of any defaults under any of the
provisions of the Securities Act, Alberta, the Securities Act, British
Columbia, the Securities Act Ontario, the Securities Act Nova Scotia
or the Act or any other security or regulatory authority;
(i) Scotia Prime is a reporting issuer as defined by the Securities Act in
the following jurisdictions: Alberta, Ontario, British Columbia and
Nova Scotia;
(j) Scotia Prime is not liable for any material federal, provincial or
municipal or local taxes, assessments or other imposts or penalties
due and unpaid at the date hereof in respect of its income, business
or property or for the payment of any tax instalment due in respect of
its income, business or property or for the payment of any tax
instalment due in respect of its current taxation year or any previous
taxation years, and no such taxes, assessments, imposts or penalties
are required to be reserved against it; and it is not in default in
filing any returns or reports covering any federal, provincial or
municipal or local taxes, assessments or other imposts in respect of
its income, business or property;
(k) Scotia Prime has been conducting its business in compliance with all
applicable laws, rules and regulations in each jurisdiction in which
it carries on business; is not in breach of any such laws, rules and
regulations and is duly licensed, registered and qualified in each
jurisdiction in which it owns or leases property or carries on
business to enable its business to be kept on as now conducted and its
property and assets will be owned, leased and operated and such
licences, registrations and qualifications are valid, subsisting and
in good standing; and
(l) Scotia Prime is not aware of any information or knowledge of any facts
not previously disclosed to the other Amalgamating Company relating to
it, its business or the securities of Scotia Prime which are
materially adverse and which, if known to the other Amalgamating
Company, might reasonably be expected to deter the other Amalgamating
Company from completing the transactions herein contemplated.
- 13 -
ARTICLE IV
CONDITIONS PRECEDENT
4.1 MUTUAL CONDITIONS PRECEDENT
The respective obligations of the Amalgamating Companies hereunder to
complete the transactions contemplated by this Agreement shall be subject to the
fulfilment or satisfaction, on or before the Effective Date, of each of the
following conditions, any of which (except for conditions (a) to (e), inclusive)
may be waived, as to it, by either of the Amalgamating Companies without
prejudice to the right of such party to rely on any other or others of them:
(a) the shareholders of Scotia Prime shall have approved the Continuance
of Scotia Prime to Alberta and Scotia Prime shall have effected the
Continuance;
(b) the Minera Andes Resolution and the Scotia Prime Resolution shall have
been approved by the votes of the requisite number of respective
shareholders, as the case may be, at the Meetings in accordance with
the provisions of the Act, the Interim Order, as applicable, and any
applicable regulatory requirements;
(c) the Final Order shall have been granted by the Court, which order
shall be reflective of the intent of the parties hereto as expressed
by this Agreement and shall be in form and substance satisfactory to
all parties hereto acting reasonably and having regard to this
Agreement;
(d) Articles of Arrangement, the Final Order and Articles of Amalgamation
shall have been accepted for filing by the Registrar and the
Certificate of Amalgamation shall have been issued with respect
thereto in accordance with Section 186 of the Act;
(e) there shall not be in force any order or decree of a Court of
competent jurisdiction, any federal, provincial, municipal or other
governmental department, commission, board, agency or regulatory body
restraining, interfering with or enjoining the consummation of the
transactions contemplated by this Agreement, including without
limitation, the Arrangement;
(f) there shall not be in force any cease trade orders by any regulatory
bodies or any other impediment (other than "control block"
restrictions) to the general free trading in the Qualified Provinces
of the securities of either of the Amalgamating Companies;
(g) all necessary regulatory and similar approvals with respect to the
transactions contemplated hereby, including, in particular, the
Arrangement and the qualification for trading in the Qualified
Provinces of the Amalco Common Shares, shall have been obtained,
subject only to any residency and "control block" restrictions imposed
under provincial securities legislation;
(h) all necessary approvals shall have been obtained to list and/or post
for trading the Amalco Common Shares issuable upon the Arrangement on
the Exchange, subject only to fulfilling the requirements of such
exchange;
(i) all necessary approvals shall have been received to effect the
Amalgamation on the Effective Date;
(j) the Exchange shall have approved the Arrangement and the other
transactions contemplated by this Agreement to the extent applicable;
(k) any time prior to the Effective Date, either of the Amalgamating
Companies alter or attempt to alter its share capital without the
prior written consent of the other Amalgamating Company;
(l) there shall have been no material adverse change in the affairs,
assets, liabilities, financial condition or prospects of either of
Amalgamating Companies prior to the Effective Date; and
(m) there shall have been no material suit, action, litigation,
arbitration proceeding or governmental proceeding, including appeals
and applications for a review, in progress, pending or, as far as a
- 14 -
party hereto is aware, threatened against or relating to a party
hereto or affecting its properties or business which if determined
adversely to such party might materially and adversely affect the
properties, business, future prospects or the financial condition of
such party, or the right of such party to use, reproduce or sell its
property and assets, or part thereof.
4.2 CONDITIONS TO OBLIGATIONS OF MINERA ANDES
The obligations of Minera Andes to consummate the transactions
contemplated hereby and, in particular, the Arrangement, is subject to the
satisfaction, on or before the Effective Date, of the following conditions, any
of which may be waived by it without prejudice to its right to rely on any other
or others of them:
(a) each of the covenants, acts and undertakings of the other Amalgamating
Company to be performed on or before the Effective Date pursuant to
the terms of this Agreement shall have been duly performed;
(b) Scotia Prime shall have furnished Minera Andes with:
(i) certified copies of the resolution or resolutions duly passed by
the board of directors of Scotia Prime approving this Agreement
and the consummation of the transactions pursuant hereto;
(ii) certified copies of the special resolutions of Scotia Prime, duly
passed at its Meeting;
(iii) evidence of the approval of the Exchange to the listing of the
Amalco Common Shares issuable upon the Arrangement subject only
to the filing of required documents;
(c) except as affected by the transactions contemplated by this Agreement,
the representations and warranties of the other Amalgamating Company
contained in Article III shall be true in all material respects
immediately prior to the issuance of the Certificate of Amalgamation
with the same effect as though made at and as of such time and Minera
Andes shall have received a certificate of a senior officer of the
other Amalgamating Company to that effect, dated the Effective Date;
(d) there is no action prior to the Effective Date by any person or
company, including a governmental or regulatory authority, that
results in a material change in the affairs of the other Amalgamating
Company;
(e) Minera Andes shall have received an opinion of counsel to Scotia
Prime, dated the Effective Date, satisfactory in form and substance in
all material respects to Minera Andes and its counsel and addressed to
Minera Andes, its directors and its shareholders to the effect that:
(i) such party is duly incorporated and validly existing under the
laws of its jurisdiction of incorporation and has the corporate
power to own or lease its property and assets and to carry on its
business as now conducted by it;
(ii) such party has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement;
(iii) such party has taken all necessary corporate actions to
authorize the execution and delivery of this Agreement and the
performance of all its obligations hereunder;
(iv) this Agreement has been duly executed and delivered by such party
and constitutes a legal, valid and binding obligation of such
party, enforceable in accordance with its terms, subject to
bankruptcy and similar laws affecting creditors generally and to
equitable remedies being in the discretion of a court;
(v) the execution, delivery and performance of this Agreement does
not, and the Amalgamation will not, and the Continuance will not:
- 15 -
(A) result in a breach of or violate any terms or provisions of
the articles or by-laws of such party; or
(B) violate any provisions of Canadian law or administrative
regulations, any judicial or administrative order, award,
judgment or decree or any agreement, in each case known to
such counsel, to which such party is a party or by which it
is bound;
(vi) all necessary regulatory consents and approvals to the
Continuance have been obtained, including the consent of the Nova
Scotia Registrar of Joint Stock Companies, and upon issuance of
the Certificate of Continuance, Scotia will have been duly
continued under the Act;
(vii) such other matters as Minera Andes and its counsel may
reasonably request.
4.3 CONDITIONS TO OBLIGATIONS OF SCOTIA PRIME
The obligations of Scotia Prime to consummate the transactions
contemplated hereby and, in particular, the Arrangement, is subject to the
satisfaction, on or before the Effective Date, of the following conditions, any
of which may be waived by it without prejudice to its right to rely on any other
or others of them:
(a) each of the covenants, acts and undertakings of the other Amalgamating
Company to be performed on or before the Effective Date pursuant to
the terms of this Agreement shall have been duly performed;
(b) Minera Andes shall have furnished Scotia Prime with:
(i) certified copies of the resolution or resolutions duly passed by
the board of directors of Minera Andes approving this Agreement
and the consummation of the transactions pursuant hereto;
(ii) certified copies of the Minera Andes Resolution duly passed at
the Minera Andes Meeting.
(c) except as affected by the transactions contemplated by this Agreement,
the representations and warranties of the other Amalgamating Company
contained in Article III shall be true in all material respects
immediately prior to the issuance of the Certificate of Amalgamation
with the same effect as though made at and as of such time and Scotia
Prime shall have received a certificate of a senior officer of the
other Amalgamating Company to that effect, dated the Effective Date;
(d) there is no action prior to the Effective Date by any person or
company, including a governmental or regulatory authority, that
results in a material change in the affairs of the other Amalgamating
Company;
(e) Scotia Prime shall have received an opinion of counsel to the other
Amalgamating Company, dated the Effective Date, satisfactory in form
and substance in all material respects to Scotia Prime and its counsel
and addressed to Scotia Prime, its directors and its shareholders to
the effect that:
(i) such party is duly incorporated and validly existing under the
laws of its jurisdiction of incorporation and has the corporate
power to own or lease its property and assets and to carry on its
business as now conducted by it;
(ii) such party has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement;
- 16 -
(iii) such party has taken all necessary corporate actions to
authorize the execution and delivery of this Agreement and the
performance of all its obligations hereunder;
(iv) this Agreement has been duly executed and delivered by such party
and constitutes a legal, valid and binding obligation of such
party, enforceable in accordance with its terms, subject to
bankruptcy and similar laws affecting creditors generally and to
equitable remedies being in the discretion of a court;
(v) the execution, delivery and performance of this Agreement does
not, and the Amalgamation will not:
(A) result in a breach of or violate any terms or provisions of
the articles or by-laws of such party; or
(B) violate any provisions of Canadian law or administrative
regulations, any judicial or administrative order, award,
judgment or decree or any agreement, in each case known to
such counsel, to which such party is a party or by which it
is bound;
(vi) such other matters as Scotia Prime and its counsel may reasonably
request.
ARTICLE V
NOTICES
5.1 NOTICES
All notices which may or are required to be given pursuant to any
provision of this Agreement shall be given or made in writing and shall be
served personally, and in the case of:
Minera Andes, addressed to:
Minera Andes Inc.
North 0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
X.X.X.
Attention: Xxxxx Xxxxxxx, President
Scotia Prime, addressed to:
Scotia Prime Minerals, Incorporated
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxx X. Xxxxx, President
ARTICLE VI
AMENDMENT AND TERMINATION OF AGREEMENT
6.1 AMENDMENTS
This Agreement may, at any time and from time to time before or after
the holding of the Meetings, be amended in any fashion whatsoever by written
agreement of all of the parties hereto without further notice to or
authorization on the part of their respective securityholders.
- 17 -
6.2 TERMINATION
This Agreement may, prior to the Effective Date, be terminated by
written agreement of all of the parties hereto notwithstanding anything
contained herein, including the approval of any one of the shareholders of the
Amalgamating Companies or the granting by the Court of the Final Order. Unless
otherwise agreed by each of the parties hereto, the Agreement shall also
terminate upon the earliest of:
(a) the Minera Andes Common Shareholders failing to approve the Minera
Andes Resolution at the Minera Andes Meeting;
(b) the Scotia Prime Common Shareholders failing to approve the Scotia
Prime Resolution at the Scotia Prime Meeting;
(c) a final determination from the Court or a Court of Appeal which denies
the granting of the Final Order; and
(d) the failure to conclude the transactions contemplated hereby by
December 31, 1995, unless such date is extended by each of the parties
hereto.
6.3 TERMINATION REGARDING MINERA ANDES DISSENTS
This Agreement shall terminate, notwithstanding anything herein
contained, including the granting by the Court of the Final Order, if Minera
Andes Common Shareholders holding more than ten percent (10%) in number of
Minera Andes Common Shares have sent to Minera Andes (and not withdrawn or not
deemed by the Act to have withdrawn) written objection to the Minera Andes
Resolution pursuant to the provisions of section 184 of the Act, as modified by
the Interim Order, and Minera Andes elects to so terminate this Agreement on
advice to the other Amalgamating Company.
6.4 TERMINATION REGARDING SCOTIA PRIME DISSENTS
This Agreement shall terminate, notwithstanding anything herein
contained, including the granting by the Court of the Final Order, if Scotia
Prime Common Shareholders holding more than ten percent (10%) in number of
Scotia Prime Common Shares have sent to Scotia Prime (and not withdrawn or not
deemed by the Act to have withdrawn) written objection to the Scotia Prime
Resolution pursuant to the provisions of section 184 of the Act, as modified by
the Interim Order, and Scotia Prime elects to so terminate this Agreement on
advice to the other Amalgamating Company.
6.5 TERMINATION REGARDING CONDITIONS PRECEDENT
This Agreement shall terminate if the conditions precedent set forth
in sections 4.1, 4.2 and 4.3 are not satisfied or waived by the appropriate
party, as contemplated by those sections on or before the Effective Date.
6.6 TERMINATION IF MATERIAL ADVERSE CHANGE
Any party hereto may, at the discretion of their respective board of
directors, terminate their respective obligations hereunder if between the date
hereof and the issuance of the Certificate of Amalgamation there shall occur any
material adverse change, as determined by the respective board of directors, in
or with respect to the assets, liabilities (actual or contingent), capital,
operations, business or undertaking of the other parties.
6.7 SURVIVAL
Sections 8.2, 8.5 and 8.9 shall survive any termination of this
Agreement.
- 18 -
ARTICLE VII
IMPLEMENTATION OF TRANSACTIONS
7.1 CLOSING
Not later than ten Business Days after the Final order is granted, the
parties hereto shall meet at the office of Xxxxxxx and Company, in the City of
Calgary, or such other date and/or place as the parties hereto may agree, and
deliver to the others: (a) documents and other instruments referred to in this
Agreement to the extent the same may be given; and (b) instruments confirming
whether all of the conditions in their respective favour outlined herein have
been satisfied or waived.
7.2 CONTINUANCE
Scotia Prime shall promptly file such documents as may be required to
effect the Continuance prior to the Amalgamation.
7.3 ARTICLES OF ARRANGEMENT
After the Amalgamating Companies hereto have acknowledged to each
other the satisfaction of all conditions in their favour, Minera Andes and
Scotia Prime shall cause to be sent to the Registrar pursuant to subsection 186
of the Act the Articles of Arrangement relating to the Arrangement with the
request that the Certificates of Arrangement be issued to Minera Andes and
Scotia Prime.
7.4 AMALGAMATION
Thereafter, subject to the terms hereof and after the parties hereto
have acknowledged to the others the satisfaction of all conditions in their
favour, the parties hereto shall promptly file such documents as may be required
to effect the Amalgamation after the Continuance has been completed with the
request that the Certificate of Amalgamation be issued to Amalco.
ARTICLE VIII
GENERAL
8.1 BINDING EFFECT
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns.
8.2 EXPENSES
In the event the Arrangement is consummated in accordance with the
terms hereof, Amalco shall pay all respective legal, accounting and similar
costs and expenses incurred by the parties hereto in connection with this
transaction and the preparation, execution and delivery of this Agreement and
all documents and instruments executed pursuant hereto and any other reasonable
costs and expenses whatsoever and howsoever incurred, provided however, that in
the event the Arrangement is not consummated in accordance with the provisions
hereof, each party shall pay their respective legal, accounting and similar
costs and expenses incurred by such party in connection with this transaction
and the preparation, execution and delivery of this Agreement and all documents
and instruments executed pursuant hereto and any other reasonable costs and
expenses whatsoever and howsoever incurred by such party.
8.3 ASSIGNMENT
No party may assign its rights or obligations under this Agreement
without the prior written consent of all other parties hereto.
- 19 -
8.4 EQUITABLE REMEDIES
All covenants herein and opinions to be given hereunder as to
enforceability in accordance with the terms of any covenant, agreement or
document shall be qualified as to applicable bankruptcy and other laws affecting
the enforcement of creditors' rights generally and to the effect that specific
performance, being an equitable remedy, may not be ordered.
8.5 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties herein shall survive the
performance of the parties' respective obligations hereunder and the termination
of this Agreement, but shall expire on the date two years from the date hereof.
8.6 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws in force in the Province of Alberta.
8.7 ENTIRE AGREEMENT
This Agreement constitutes the whole of the agreement between the
parties hereto with respect to the transactions and matters herein contemplated
and supersedes all prior agreements whether written or oral in connection
herewith.
8.8 TIME OF ESSENCE
Time shall be of the essence.
8.9 INDEMNITIES
(a) Each of the respective parties hereto (each an "Indemnifying Party")
covenants and agrees to indemnify and save the other, and its
directors, officers, employees and agents harmless against and from
all liabilities, claims, demands, losses, costs, damages and expenses
to which such other, or any of its directors, officers, employees and
agents (collectively called "Indemnified Persons"), may be subject to
or may suffer, whether under the provisions of any statute or
otherwise, in any way caused by, or arising directly or indirectly
from, or in consequence of:
(i) any Misrepresentation or alleged Misrepresentation contained in
the portions of the Information Circular particular to the
Indemnifying Party or from information supplied by such
Indemnifying Party or in any other material filed in compliance
or intended compliance with any applicable statute (such
Information Circular and other material being herein called the
"Filing Documents"); or
(ii) any order made or inquiry, investigation or proceeding commenced
or threatened by any securities commission, stock exchange or
other competent authority based upon any untrue statement or
omission or alleged untrue statement or omission or
Misrepresentation or alleged Misrepresentation in any of the
Filing Documents which prevents, restricts or adversely affects
the transactions contemplated by this Agreement;
provided that such indemnity shall not apply to any liabilities ,
claims, demands, losses, cost, damages and expenses which any
Indemnified Person may be subject or may suffer arising out of any act
or action taken or committed solely by an Indemnified Person.
(b) If any matter or thing contemplated by section 8.9(a) shall be
asserted against any Indemnified Person, such Indemnified Person will
notify the appropriate Indemnifying Party as soon as possible of the
nature of such claim and the Indemnifying Party shall be entitled (but
not required) to assume the defence of any suit brought to enforce
such claim; provided, however, that the defence shall be through legal
counsel acceptable to the Indemnified Person and that no settlement
- 20 -
may be made by the Indemnifying Party or by the Indemnified Person
without the prior written consent of the other. If the Indemnifying
Party assumes the defence of any such suit, each of the Indemnified
Persons shall continue to have the right to employ their own counsel,
who shall be acceptable to the Indemnifying Party in any proceeding
relating to a claim contemplated by section 8.9(a), and the fees and
expenses of a reasonable number of such counsel shall be recoverable
by the Indemnified Persons from the Indemnifying Party to the extent
that the same shall be covered by the indemnity in section 8.9(a), if
(a) the Indemnified Persons have been advised by such counsel that
there may be legal defence available to them which are different from
or additional to defences available to the Indemnifying Party (in
which case the Indemnifying Party shall not have the right to assume
the defence of such proceedings on their behalf; (b) the Indemnifying
Party shall not have undertaken the defence of such proceedings and
employed counsel within fifteen (15) days after notice of commencement
of such proceeding; or (c) the employment of such counsel has been
authorized by the Indemnifying Party in connection with the defense of
such proceedings.
8.10 COUNTERPARTS
This Agreement may be executed by the parties hereto in separate
counterparts each of which so executed and delivered shall be an original but
all such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement as of the day and year first above written.
MINERA ANDES INC.
Per: /s/ XXXXX X. XXXXXXX
---------------------------------------
Per: /s/ XXXXXX X. XXXXXX
---------------------------------------
SCOTIA PRIME MINERALS, INCORPORATED
Per: /s/ XXXXX XXXXX
---------------------------------------
Per: /s/ ILLEGIBLE
---------------------------------------
SCHEDULE A to the Arrangement Agreement made the 21st day of July, 1995 between
Minera Andes Inc. and Scotia Prime Minerals, Incorporated
-------------------------------------------------------------------------------
PLAN OF ARRANGEMENT
IN THE MATTER OF AN ARRANGEMENT between Minera Andes Inc.
and Scotia Prime Minerals, Incorporated pursuant to Section
186 of the Business Corporations Act (Alberta) S.A. 1981, c.
B-15, as amended.
ARTICLE I
INTERPRETATION
1.1 In this Arrangement, unless the context otherwise requires, capitalized
words and phrases shall have the meanings ascribed thereto in the Arrangement
Agreement to which this Arrangement is annexed as Schedule A.
ARTICLE II
ARRANGEMENT AGREEMENT
2.1 This Arrangement is made pursuant to and subject to the provisions of the
Arrangement Agreement, and is the Arrangement as described in the Arrangement
Agreement.
2.2 This Plan of Arrangement shall be binding upon Minera Andes and Scotia.
ARTICLE III
ARRANGEMENT
3.1 Following the filing of Articles of Arrangement in respect of this
Arrangement, Minera Andes and Scotia will be amalgamated and will continue as a
separate corporation.
3.2 Upon the issuance of the Certificate of Amalgamation on the Amalgamation
Effective Date, each of the events set out below shall occur and be deemed to
occur in the sequence set out therein without further action or formality,
(a) with respect to each Minera Andes Common Shareholder:
(i) such holder shall cease to be a holder of Minera Andes Common
Shares and his name shall be removed from the register of Minera
Andes Common Shares;
(ii) the issued and outstanding Minera Andes Common Shares shall be
converted into Amalco Common Shares on the basis of one Amalco
Common Share for each one Minera Andes Common Share held and the
holder's name shall be added to the common share register of
Amalco as the registered holder of such Amalco Common Shares;
(iii) all of the authorized but unissued shares of Minera Andes shall
be cancelled.
(b) with respect to the holder of the Minera Performance Right:
(i) such holder shall cease to be the holder of the Minera
Performance Right;
(ii) the Minera Performance Right shall be converted into the Amalco
Performance Right.
- 2 -
3.3 Upon the issuance of the Certificate of Amalgamation on the Amalgamation
Effective Date, each of the events set out below shall occur and be deemed to
occur in the sequence set out therein without further action or formality,
(a) with respect to each Scotia Common Shareholder:
(i) such holder shall cease to be a holder of Scotia Common Shares
and his name shall be removed from the register of Scotia Common
Shares;
(ii) the issued and outstanding Scotia Common Shares shall be
converted into Amalco Common Shares on the basis of one Amalco
Common Share for each fifteen Scotia Common Shares held and the
holder's name shall be added to the common share register of
Amalco as the registered holder of such Amalco Common Shares;
(iii) all of the authorized but unissued shares of Scotia shall be
cancelled.
3.4 Amalco shall not be obligated to issue fractional shares. In the event that
a fractional share results from the application of Article III hereof, then: in
the case of a fraction of a share for Amalco of less than one-half of a share,
the number of shares to be received by the holder thereof shall be rounded down
to the next whole number of shares without further contemplation or claim
against Amalco nor its respective directors, officers or agents; or, in the case
of a fraction of a share for Amalco of one-half or more of a share, the number
of shares to be received by the holder thereof shall be rounded up to the next
higher whole number of shares of Amalco, provided that no shareholder will be
required to compensate Amalco in respect thereof.
3.5 The stated capital of Amalco shall be the aggregate of the stated capital
account of both of the Amalgamating Companies immediately before the
Amalgamation becomes effective.
3.6 Each of the Amalgamating Companies shall contribute to Amalco all of its
assets, subject to its liabilities, as such exist, immediately before the
Amalgamation Effective Date.
3.7 Amalco shall possess all of the property, rights, privileges and franchises
and shall be subject to all of the liabilities, as such exist, immediately
before the Amalgamation Effective Date.
3.8 All rights of creditors against the property, rights and assets of each of
the Amalgamating Companies and all liens upon their property, rights and assets
shall be unimpaired by the Arrangement, the Continuance or the Amalgamation and
all debts, contracts, liabilities and duties of each of the Amalgamating
Companies shall thenceforth attach to Amalco and shall be enforceable against
it.
3.9 No action or proceeding by or against any of the parties hereto shall xxxxx
or be affected by the Arrangement, the Continuance or the Amalgamation.
3.10 Certificates representing the securities of Amalco into which securities of
the Amalgamating Companies have been converted will be held by The Montreal
Trust Company of Canada, at its Calgary office, for those holders entitled
thereto against deposit of the certificate or certificates representing the
securities of the Amalgamating Companies so converted.
3.11 As soon as practicable after the Amalgamation Effective Date, Amalco shall
forward to each holder of securities of the Amalgamating Companies at the
address of such holder as it appeared in the relevant share register of the
Amalgamating Companies at the Amalgamation Effective Date, a letter of
transmittal containing, among other things, instructions for obtaining delivery
of certificates representing such securities of the respective Amalgamating
Companies. Such holder of securities shall be entitled to receive certificates
representing Amalco securities which such holder is entitled to receive pursuant
to the terms hereof upon delivering the certificate formerly representing such
holder's securities to The Montreal Trust Company of Canada, or as The Montreal
Trust Company of Canada may otherwise direct, in accordance with the
instructions contained in the letter of transmittal. Such certificate formerly
representing such holder's securities in the respective Amalgamating Companies
shall be accompanied by the letter of transmittal, duly completed and such other
documents as The Montreal Trust Company of Canada may reasonably require. The
Montreal Trust Company of Canada shall register such securities in such name,
and shall deliver by first class mail, postage prepaid, or in the case of postal
disruption, by such other means
- 3 -
as The Montreal Trust Company of Canada deems prudent, such certificates to such
address as such holder may direct in such letter of transmittal, as soon as
practicable after receipt by The Montreal Trust Company of Canada of such
documents.
3.12 All dividends paid and distributions made with respect to any Amalgamating
Companies' Common Shares, allotted and issued pursuant to this Arrangement but
for which a certificate has not been issued shall be paid or delivered to Amalco
in trust for the registered holder thereof. All monies received by Amalco shall
be invested by it in interest-bearing trust accounts upon such terms as Amalco
may reasonably deem appropriate. Amalco shall pay and deliver to any such
registered holder as soon as reasonably practicable after application therefor
is made by the registered holder to Amalco in such form as Amalco may reasonably
require, such dividends, distributions and any interest thereof to which such
holder is entitled, net of applicable withholding and other taxes.
3.13 Any certificate formerly representing any securities of the Amalgamating
Companies to which Article III hereof applies and not deposited with all other
documents as provided in section 3.12 on or prior to the 6th anniversary of the
Amalgamation Effective Date shall cease to represent a right or claim of any
kind or nature and the right of such holder to receive Amalco Common Shares
shall be deemed to be surrendered to Amalco together with all dividends or
distributions thereon held by such holder.
ARTICLE IV
SHAREHOLDER DISSENTING RIGHTS
4.1 Holders of Minera Andes Common Shares and/or Scotia Common Shares, who have
given a written objection to the respective Minera Andes Resolution and/or
Scotia Resolution approving the Arrangement, which remains outstanding on the
Amalgamation Effective Date in accordance with the rights of dissent in respect
of the Plan of Arrangement granted by the Interim Order and who:
(a) are ultimately entitled to be paid fair value for the Minera Andes
Common Shares and/or Scotia Common Shares, in respect of which they
dissent in accordance with the provisions of such Interim Order,
whereby by Order of a Court (as defined in the Act) or by acceptance
of an offer made pursuant to such Interim Order, shall be deemed to
have transferred such Minera Andes Common Shares and/or Scotia Common
Shares to Amalco for cancellation on the Amalgamation Effective Date;
or
(b) are ultimately not so entitled to be paid fair value for the Minera
Andes Common Shares and/or Scotia Common Shares in respect of which
they dissent, shall not be, or be reinstated as, shareholders of
Amalco but for purposes of receipt of consideration shall be treated
as if they had participated in the Plan of Arrangement on the same
basis as a non-dissenting holder of Minera Andes Common Shares and/or
Scotia Common Shares and accordingly shall be entitled to receive such
Amalco Common Shares as non-dissenting holders are entitled to receive
on the basis set forth in Article III of this Plan of Arrangement and
shall be deemed to have transferred such shares to Amalco,
but in no case shall Amalco or Minera Andes or Scotia be required to recognize
such holders of Minera Andes Common Shares and/or Scotia Common Shares, as the
case may be, as securityholders thereof after the Amalgamation Effective Date.
SCHEDULE B-1 to the Arrangement Agreement made the 21st day of July, 1995
between Scotia Prime Minerals, Incorporated and Minera Andes Inc.
-------------------------------------------------------------------------------
BUSINESS CORPORATIONS ACT FORM 14.1
(SECTION 186)
ALBERTA
CONSUMER AND CORPORATE AFFAIRS ARTICLES OF ARRANGEMENT
-------------------------------------------------------------------------------
(c) NAME OF CORPORATION: (d) CORPORATE ACCESS NUMBER:
SCOTIA PRIME MINERALS, INCORPORATED
-------------------------------------------------------------------------------
(e) IN ACCORDANCE WITH THE ORDER APPROVING THE ARRANGEMENT, THE ARTICLES OF THE
CORPORATION ARE AMENDED AS FOLLOWS:
The Corporation has received a Final Order of the Court of Queen's Bench of
Alberta approving an arrangement Scotia Prime Minerals, Incorporated and
Minera Andes Inc. A copy of such order and the Plan of Arrangement are
attached hereto.
-------------------------------------------------------------------------------
DATE SIGNATURE TITLE
____________________, 1995
-------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY FILED
SCHEDULE B-2 to the Arrangement Agreement made the 21st day of July, 1995
between Scotia Prime Minerals, Incorporated and Minera Andes Inc.
BUSINESS CORPORATIONS ACT FORM 14.1
(SECTION 186)
ALBERTA
CONSUMER AND CORPORATE AFFAIRS ARTICLES OF ARRANGEMENT
-------------------------------------------------------------------------------
(f) NAME OF CORPORATION: (g) CORPORATE ACCESS NUMBER:
MINERA ANDES INC. 20618792
-------------------------------------------------------------------------------
(h) IN ACCORDANCE WITH THE ORDER APPROVING THE ARRANGEMENT, THE ARTICLES OF THE
CORPORATION ARE AMENDED AS FOLLOWS:
The Corporation has received a Final Order of the Court of Queen's Bench of
Alberta approving an arrangement Scotia Prime Minerals, Incorporated and
Minera Andes Inc. A copy of such order and the Plan of Arrangement are
attached hereto.
-------------------------------------------------------------------------------
DATE SIGNATURE TITLE
____________________, 1995
-------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY FILED
SCHEDULE C to the Arrangement Agreement made the 21st day of July, 1995 between
Scotia Prime Minerals, Incorporated and Minera Andes Inc.
-------------------------------------------------------------------------------
BUSINESS CORPORATIONS ACT FORM 9
(SECTION 179)
ALBERTA
CONSUMER AND CORPORATE AFFAIRS ARTICLES OF AMALGAMATION
-------------------------------------------------------------------------------
(i) NAME OF AMALGAMATED CORPORATION: (j) CORPORATE ACCESS NO.:
MINERA ANDES INC.
-------------------------------------------------------------------------------
(k) THE CLASSES AND ANY MAXIMUM NUMBER OF SHARES THAT THE CORPORATION IS
AUTHORIZED TO ISSUE:
The attached Schedule 1 is incorporated into and forms part of this form.
-------------------------------------------------------------------------------
(l) RESTRICTIONS IF ANY ON SHARE TRANSFERS:
None
-------------------------------------------------------------------------------
(m) NUMBER (OR MINIMUM AND MAXIMUM NUMBER) OF DIRECTORS:
Minimum 1, Maximum 15
-------------------------------------------------------------------------------
(n) RESTRICTIONS IF ANY ON BUSINESS THE CORPORATION MAY CARRY ON:
None
-------------------------------------------------------------------------------
(o) OTHER PROVISIONS, IF ANY:
The Board of Directors of the Corporation may, between annual meetings
appoint one or more additional directors of the Corporation to serve until
the next annual meeting, but the number of additional directors shall not
at any time exceed one-third (1/3) of the number of directors who held
office at the expiration of the last annual meeting of the Corporation.
-------------------------------------------------------------------------------
(p) NAME OF AMALGAMATING CORPORATIONS: CORPORATE ACCESS NO.:
Minera Andes Inc. 20618792
Scotia Prime Minerals, Incorporated
-------------------------------------------------------------------------------
(q) DATE SIGNATURE TITLE
____________________, 1995
-------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY FILED
SCHEDULE "1"
The shares which the Corporation is authorized to issue are:
(a) an unlimited number of common shares without nominal or par value with the
following rights, privileges, restrictions and conditions:
(i) to vote at meetings of shareholders, except meetings at which only
holders of a specified class of shares are entitled to vote;
(ii) subject to the rights, privileges, restrictions and conditions
attaching to any other class of shares of the Corporation, to share
equally in the remaining property of the Corporation upon liquidation,
dissolution or winding-up of the Corporation; and
(iii) subject to the rights of the preferred shares, the common shares
shall be entitled to receive dividends if, as and when declared by the
directors of the Corporation; and
(b) an unlimited number of preferred shares without nominal or par value
("Preferred Shares") which, as a class, have attached thereto the
following:
(i) the Preferred Shares may from time to time be issued in one or more
series and, subject to the following provisions, to the sending of
articles of amendment in prescribed form and the issuance of a
certificate of amendment in respect thereof, the directors may fix
from time to time before such issue the number of shares which is to
comprise each series and the designation, rights, privileges,
restrictions and conditions attaching to each series of preferred
shares including, without limiting the generality of the foregoing,
the rate or amount of dividends or the method of calculating
dividends, the dates of payment thereof, the redemption, purchase
and/or conversion prices and terms and conditions of redemption,
purchase and/or conversion, and any sinking fund or other provisions;
(ii) the Preferred Shares of each series shall, with respect to the payment
of dividends and the distribution of assets or return of capital in
the event of liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other return of
capital or distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs, rank on a
parity with the preferred shares of every other series and be entitled
to preference over the common shares and over any other shares of the
Corporation ranking junior to the preferred shares. The Preferred
Shares of any series may also be given such other preferences, not
inconsistent with these articles, over the common shares and any other
shares of the Corporation ranking junior to such preferred shares as
may be fixed in accordance with clause (b) (i);
(iii) if any cumulative dividends or amounts payable on the return of
capital in respect of a series of Preferred Shares are not paid in
full, all series of Preferred Shares shall participate rateably in
respect of accumulated dividends and return of capital; and
(iv) unless the directors otherwise determine in the articles of amendment
designating a series, the holder of each share of a series of
Preferred Shares shall not, except as otherwise specifically provided
in the Business Corporations Act (Alberta), be entitled to receive
notice of or vote at any meeting of shareholders.
SCHEDULE D to the Arrangement Agreement made the 21st day of July, 1995 between
Scotia Prime Minerals, Incorporated and Minera Andes Inc.
-------------------------------------------------------------------------------
BUSINESS CORPORATIONS ACT FORM 11
(SECTIONS 181, 261 AND 262)
ALBERTA
CONSUMER AND CORPORATE AFFAIRS ARTICLES OF CONTINUANCE
-------------------------------------------------------------------------------
1. NAME OF CORPORATION 2. CORPORATE ACCESS NO.:
SCOTIA PRIME MINERALS, INCORPORATED
-------------------------------------------------------------------------------
3. THE CLASSES AND ANY MAXIMUM NUMBER OF SHARES THAT THE CORPORATION IS
AUTHORIZED TO ISSUE:
The attached Schedule "1" is incorporated into and forms part of this form.
-------------------------------------------------------------------------------
4. RESTRICTIONS IF ANY ON SHARE TRANSFERS:
None
-------------------------------------------------------------------------------
5. NUMBER (OR MINIMUM AND MAXIMUM NUMBER) OF DIRECTORS:
Minimum 1, Maximum 15
-------------------------------------------------------------------------------
6. RESTRICTIONS IF ANY ON BUSINESSES THE CORPORATION MAY CARRY ON:
None
-------------------------------------------------------------------------------
7. IF CHANGE OF NAME EFFECTED, PREVIOUS NAME:
Not applicable.
-------------------------------------------------------------------------------
8. DETAILS OF INCORPORATION:
As a result of a merger of Petroco of Texas, Inc. into Petroco of Wyoming,
Inc., the corporation became incorporated under the laws of the State of
Wyoming on February 25, 1988, under the name Scotia Prime Minerals,
Incorporated. Continued under the laws of the Province of Nova Scotia on
September 19, 1988.
-------------------------------------------------------------------------------
9. OTHER PROVISIONS, IF ANY:
(a) The directors may, between annual general meetings, appoint 1 or more
additional directors of the Corporation to serve until the next annual
general meeting, but the number of additional directors shall not at any
time exceed 1/3 of the number of directors who held office at the
expiration of the last annual meeting of the Corporation.
(b) Meetings of shareholders of the Corporation may be held in Xxxxxxx,
Xxxxxxx, Xxxxxx.
-------------------------------------------------------------------------------
10. DATE SIGNATURE TITLE
Director
-------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY FILED
SCHEDULE "1"
The shares which the Corporation is authorized to issue are:
(a) an unlimited number of common shares without nominal or par value with the
following rights, privileges, restrictions and conditions:
(i) to vote at meetings of shareholders, except meetings at which only
holders of a specified class of shares are entitled to vote;
(ii) subject to the rights, privileges, restrictions and conditions
attaching to any other class of shares of the Corporation, to share
equally in the remaining property of the Corporation upon liquidation,
dissolution or winding-up of the Corporation; and
(iii) subject to the rights of the preferred shares, the common shares
shall be entitled to receive dividends if, as and when declared by the
directors of the Corporation; and
(b) an unlimited number of preferred shares without nominal or par value
("Preferred Shares") which, as a class, have attached thereto the
following:
(i) the Preferred Shares may from time to time be issued in one or more
series and, subject to the following provisions, to the sending of
articles of amendment in prescribed form and the issuance of a
certificate of amendment in respect thereof, the directors may fix
from time to time before such issue the number of shares which is to
comprise each series and the designation, rights, privileges,
restrictions and conditions attaching to each series of preferred
shares including, without limiting the generality of the foregoing,
the rate or amount of dividends or the method of calculating
dividends, the dates of payment thereof, the redemption, purchase
and/or conversion prices and terms and conditions of redemption,
purchase and/or conversion, and any sinking fund or other provisions;
(ii) the Preferred Shares of each series shall, with respect to the payment
of dividends and the distribution of assets or return of capital in
the event of liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary, or any other return of
capital or distribution of the assets of the Corporation among its
shareholders for the purpose of winding up its affairs, rank on a
parity with the preferred shares of every other series and be entitled
to preference over the common shares and over any other shares of the
Corporation ranking junior to the preferred shares. The Preferred
Shares of any series may also be given such other preferences, not
inconsistent with these articles, over the common shares and any other
shares of the Corporation ranking junior to such preferred shares as
may be fixed in accordance with clause (b) (i);
(iii) if any cumulative dividends or amounts payable on the return of
capital in respect of a series of Preferred Shares are not paid in
full, all series of Preferred Shares shall participate rateably in
respect of accumulated dividends and return of capital; and
(iv) unless the directors otherwise determine in the articles of amendment
designating a series, the holder of each share of a series of
Preferred Shares shall not, except as otherwise specifically provided
in the Business Corporations Act (Alberta), be entitled to receive
notice of or vote at any meeting of shareholders.
SCHEDULE E to the Arrangement Agreement made the 21st day of July, 1995 between
Scotia Prime Minerals, Incorporated and Minera Andes Inc.
-------------------------------------------------------------------------------
MINERA ANDES INC.
STOCK OPTION PLAN
1. Purpose
The purpose of the Stock Option Plan (the "Plan") of Minera Andes
Inc., a body corporate incorporated under the Business Corporations Act
(Alberta) (the "Corporation"), is to advance the interests of the Corporation or
any of its subsidiaries or affiliates by encouraging the directors, officers,
employees and consultants of the Corporation or any of its subsidiaries or
affiliates to acquire shares in the Corporation, thereby increasing their
proprietary interest in the Corporation, encouraging them to remain associated
with the Corporation or any of its subsidiaries or affiliates and furnishing
them with additional incentive in their efforts on behalf of the Corporation or
any of its subsidiaries or affiliates in the conduct of their affairs.
2. Administration and Granting of Options
The Plan shall be administered by the board of directors of the
Corporation. A majority of the board of directors shall constitute a quorum, and
the acts of a majority of the directors present at any meeting at which a quorum
is present, or acts unanimously approved in writing, shall be the acts of the
directors.
Subject to the provisions of the Plan, the board of directors shall
have authority to construe and interpret the Plan and all option agreements
entered into thereunder, to define the terms used in the Plan and in all option
agreements entered into thereunder, to prescribe, amend and rescind rules and
regulations relating to the Plan and to make all other determinations necessary
or advisable for the administration of the Plan. All determinations and
interpretations made by the board of directors shall be binding and conclusive
on all participants in the Plan and on their legal personal representatives and
beneficiaries.
Each option granted hereunder shall be evidenced by an agreement,
signed on behalf of the Corporation and by the optionee, in such form as the
directors shall approve. Each such agreement shall recite that it is subject to
the provisions of this Plan.
3. Shares Subject to Plan
Subject to adjustment as provided in Section 15 hereof, the shares to
be offered under the Plan shall consist of shares of the Corporation's
authorized but unissued common shares. The aggregate number of shares to be
delivered upon the exercise of all options granted under the Plan (the
"Options") shall not exceed 900,000 shares. If any Option granted hereunder
shall expire or terminate for any reason without having been exercised in full,
the unpurchased shares subject thereto shall again be available for the purpose
of this Plan.
4. Number of Optioned Shares
The number of shares subject to an Option to a Participant shall be
determined by the Board of Directors, but no Participant, upon the Corporation
becoming listed on any stock exchange, shall be granted an Option which exceeds
the maximum number of shares permitted by any stock exchange on which the common
shares are then listed or other regulatory body having jurisdiction.
5. Vesting
The Committee may, in its sole discretion, determine the time during
which Options shall vest and the method of vesting, or that no vesting
restriction shall exist.
- 2 -
6. Maintenance of Sufficient Capital
The Corporation shall at all times during the term of the Plan reserve
and keep available such numbers of shares as will be sufficient to satisfy the
requirements of the Plan.
7. Participation
Directors, officers, management, consultants and employees of the
Corporation shall be eligible for selection to participate in the Plan (such
persons hereinafter collectively referred to as "Participants"). The board of
directors shall determine to whom options shall be granted, the terms and
provisions of the respective option agreements, the time or times at which such
options shall be granted, and the number of shares to be subject to each option.
An individual who has been granted an option may, if he is otherwise eligible,
and if permitted under the policies of the stock exchange or stock exchanges on
which the shares of the Corporation are to be listed, be granted an additional
option or options if the directors shall so determine.
8. Exercise Price
(a) The exercise price of the shares covered by each option shall be
determined by the directors. Subject to the provisions of Section
8(b), the exercise price shall be not less than the closing price of
the Corporation's shares on the stock exchange or stock exchanges on
which the shares of the Corporation are listed on the last trading day
immediately preceding the day on which the stock exchange is notified
of the proposed issuance of option, less any discounts permitted by
the policy or policies of such stock exchange or stock exchanges;
(b) If an option is granted within six months of a public distribution of
the Corporation's shares by way of prospectus, then the minimum
exercise price of such option shall, if the policy of such stock
exchange or stock exchanges requires, be the greater of the price
determined pursuant to Section 8(a) and the price per share paid by
the investing public for shares of the Corporation acquired by the
public during such public distribution, determined in accordance with
the policy of such stock exchange or stock exchanges.
9. Duration of Option
Each Option and all rights thereunder shall be expressed to expire on
the date set out in the Option agreements and shall be subject to earlier
termination as provided in paragraphs 11 and 12.
10. Option Period, Consideration and Payment
(a) The Option period shall be a period of time fixed by the Committee, not
to exceed the maximum period permitted by any stock exchange on which the common
shares are then listed or other regulatory body having jurisdiction, provided
that the Option period shall be reduced with respect to any Option as provided
in Sections 11 and 12 covering cessation as a director, officer, employee or
consultant of the Corporation or any of its subsidiaries or affiliates or death
of the Participant.
(b) Except as set forth in Sections 10(c), 11 and 12, no Option may be
exercised unless the Participant is at the time of such exercise a director,
officer, employee or consultant of the Corporation or any of its subsidiaries or
affiliates.
(c) Notwithstanding any other provision to the contrary, an Option granted
to a consultant in connection with specific services provided or to be provided
by that consultant shall be exercised only after the date of completion of such
service and prior to 30 days following the date of completion of such service.
(d) The exercise of any Option will be contingent upon receipt by the
Corporation at its head office of a written notice of exercise, specifying the
number of shares with respect to which the Option is being exercised,
accompanied by cash payment, certified cheque or bank draft for the full
purchase price of such shares with respect to which the Option is exercised. No
Participant or his legal representatives, legatees or distributees will be, or
will be deemed to be, a holder of any shares subject to an Option under this
Plan, unless and until the certificates for such shares are issued to such
persons under the terms of the Plan.
- 3 -
11. Ceasing To Be a Director, Officer, Employee or Consultant
If a Participant shall cease to be a director, officer, employee or
consultant of the Corporation or any of its subsidiaries or affiliates for any
reason (other than death), the Participant may but only within 90 days next
succeeding the Participant's ceasing to be a director, officer, employee or
consultant, exercise the Participant's Option to the extent that the Participant
was entitled to exercise it at the date of such cessation.
Nothing contained in the Plan nor in any Option granted pursuant to
the Plan shall confer upon any Participant any right with respect to Continuance
as a director, officer, employee or consultant of the Corporation or any of its
subsidiaries or affiliates.
12. Death of Participant
In the event of the death of a Participant, the Option previously
granted to him shall be exercisable only within the twelve months next
succeeding such death and then only:
(a) by the person or persons to whom the Participant's rights under the
Option shall pass by the Participant's will or the laws of descent and
distribution; and
(b) if and to the extent that the Participant was entitled to exercise the
Option at the date of the Participant's death.
13. Rights of Optionee
No person entitled to exercise an Option shall have any of the rights
or privileges of a shareholder of the Corporation in respect of any shares
issuable upon exercise of such Option until certificates representing such
shares shall have been issued and delivered.
14. Proceeds from Sale of Shares
The proceeds from sale of shares issued upon the exercise of Options
shall be added to the general funds of the Corporation and shall thereafter be
used from time to time for such corporate purposes as the Committee may
determine and direct.
15. Adjustments
If the outstanding shares of the Corporation are increased, decreased,
changed into or exchanged for a different number or kind of shares of securities
of the Corporation through re-organization, merger, recapitalization,
re-classification, stock dividend, subdivision or consolidation, an appropriate
and proportionate adjustment shall be made in the maximum number or kind of
shares as to which options may be granted under the Plan. A corresponding
adjustment changing the number or kind of shares allocated to unexercised
options or portions thereof, which shall have been granted prior to any such
change, shall likewise be made. Any such adjustment in the outstanding options
shall be made without change in the aggregate purchase price applicable to the
unexercised portion of the option but with a corresponding adjustment in the
price for each share or other unit of any security covered by the option.
Upon the liquidation or dissolution of the Corporation or upon a
re-organization, merger or consolidation of the Corporation with one or more
corporations as a result of which the Corporation is not the surviving
corporation, or upon the sale of substantially all of the property or more than
eighty (80%) percent of the then outstanding shares of the Corporation to
another corporation, the Plan shall terminate, and any options theretofore
granted hereunder shall terminate unless provision is made in writing in
connection with such transaction for the Continuance of the Plan and for the
assumption of options theretofore granted, or the substitution for such options
of new options covering the shares of a successor employer corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to number and kind
of shares and prices, in which event the Plan and options theretofore granted
shall continue in the manner and upon the terms so provided. If the Plan and
unexercised options shall terminate pursuant to the foregoing sentence all
persons then entitled to exercise an unexercised portion of options then
outstanding shall have the right at such time immediately prior to consummation
of the event which
- 4 -
results in the termination of the Plan as the Corporation shall designate, to
exercise their options to the full extent not theretofore exercised.
Adjustments under this Section shall be made by the board of directors
whose determination as to what adjustments shall be made, and the extent
thereof, shall be final, binding and conclusive. No fractional share shall be
issued under the Plan on any such adjustment.
16. Transferability
All benefits, rights and Options accruing to any Participant in
accordance with the terms and conditions of the Plan shall not be transferrable
or assignable unless specifically provided herein. During the lifetime of a
Participant any benefits, rights and Options may only be exercised by the
Participant.
17. Amendment and Termination of Plan
The Committee may, at any time, suspend or terminate the Plan. The
board may also at any time amend or revise the terms of the Plan, PROVIDED that
no such amendment or revision shall alter the terms of any Options theretofore
granted under the Plan.
18. Necessary Approvals
The ability of the Options to be exercised and the obligation of the
Corporation to issue and deliver shares in accordance with the Plan is subject
to any approvals which may be required from the shareholders of the Corporation,
any regulatory authority or stock exchange having jurisdiction over the
securities of the Corporation. If any shares cannot be issued to any Participant
for whatever reason, the obligation of the Corporation to issue such shares
shall terminate and any Option exercise price paid to the Corporation will be
returned to the Participant.
Options issued to residents of the United States may only be issued
and subsequently exercised in conformity with the registration provisions of the
Securities Act of 1933, as amended the rules and regulations thereto and the
applicable state securities laws.
19. Prior Plans
The Plan shall entirely replace and supersede prior share options
plans, if any, enacted by the Board of Directors of the Corporation or its
predecessor corporations.
20. Stock Exchange Rules
The rules of any stock exchange upon which the Corporation's Shares
are listed shall be applicable relative to options granted to Participants.
21. Effective Date of Plan
The Plan has been adopted by the Committee subject to the approval of
any stock exchange on which the shares of the Corporation are to be listed or
other regulatory body having jurisdiction and, if so approved, the Plan shall
become effective upon such approvals being obtained.
- 5 -
IN WITNESS WHEREOF the Corporation has caused its corporate seal to be
affixed hereto in the presence of its officers duly authorized in that behalf as
of the _____ day of _____________________, 1995.
MINERA ANDES INC.
Per: (c/s)
----------------------------------
Per:
---------------------------------------
