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EXHIBIT 10.25
TERMINATION AND SETTLEMENT AGREEMENT
THIS TERMINATION AND SETTLEMENT AGREEMENT ("Agreement") is entered
into as of July 29 1996, by and among:
(1) VenStar Gold Ltd., a Bahamas corporation formerly known as Xxxxxx
Limited ("VenStar");
(2) Venhold Investments (1994) Ltd., a Barbados corporation ("Venhold");
(3) Xxxxxxx Associated S.A., a British Virgin Islands corporation
("Xxxxxxx");
(4) BPC Corp., a British Virgin Islands corporation ("BPC" and,
collectively with Venhold, the "Buyers");
(5) Golden Star Management Ltd., a Bahamas corporation ("GS Management");
(6) General Mining de Guayana C.A., a private company limited by shares
and registered in Venezuela ("General");
(7) Krysos Mining S.A., a private company limited by shares and registered
in Venezuela ("Krysos");
(8) Servicios Consultmin S.A., a private company limited by shares and
registered in Venezuela ("Consultmin");
(9) GenVen Holdings Ltd., a Bahamas Corporation ("GenVen");
(10) KrysVen Holdings Ltd., a Bahamas Corporation ("KrysVen");
(11) ConsultVen Holdings Ltd., a Bahamas corporation ("ConsultVen") and
(12) Venezuela Investments Ltd., a corporation organized and existing under
the laws of Barbados ("VI"), with reference to the following facts:
A. VenStar owns 100% of the issued and outstanding shares of
GenVen, KrysVen and ConsultVen. GenVen, KrysVen and ConsultVen own 100% of the
outstanding shares of General, Krysos and Consultmin, respectively. General
and Krysos hold Rights or have entered into Agreements with respect to certain
Areas which are considered prospective for gold and other minerals in
Venezuela. The terms "Rights", "Agreements" and "Areas" have the meanings
attributed thereto in the Stock Purchase Agreement (as defined below) and
include any amendments or successor rights or agreements which may have been
acquired, entered into or otherwise accrued or occurred since the date of the
Stock Purchase Agreement. GenVen, KrysVen, ConsultVen, General, Krysos and
Consultmin are sometimes collectively referred to herein as the "VenStar
Subsidiaries".
B. Pursuant to the terms of (i) that certain Stock Purchase
Agreement dated as of July 7, 1994 among Xxxxxxx and the Buyers (as amended,
the "Stock Purchase Agreement") and (ii) the "Trust Agreement" (as that term is
defined in the Stock Purchase Agreement) among the Buyers, Xxxxxxx and Banco
Mercantil, C.A., S.A.C.A. of Caracas (the "Bank"), Venhold agreed to purchase
8,100,000 (50.6%) of the issued and outstanding common shares of VenStar (the
"Venhold VenStar Shares") and BPC agreed to purchase 1,500,000 (9.4%) of the
issued and outstanding common shares of VenStar from Xxxxxxx (the "BPC VenStar
Shares"). As of the date hereof, stock certificates representing 1,170,000
Venhold VenStar Shares have been issued in favor of Venhold and stock
certificates representing 750,000 BPC VenStar Shares have been issued in favor
of BPC. The remaining Venhold VenStar Shares to be purchased by Venhold and
BPC VenStar Shares to be purchased by BPC are held in trust by the Bank
pursuant to the Trust Agreement.
C. Pursuant to the terms of that certain Shareholders Agreement
of Xxxxxx Limited (VenStar Gold Ltd.) dated as of April 8, 1994 and effective
July 7, 1994 among VenStar, Xxxxxxx, Venhold and BPC (as amended, the "VenStar
SH Agreement"), VenStar, Xxxxxxx, Venhold and BPC set forth certain terms for
the conduct of the business and affairs of VenStar. Among other things, the
VenStar SH Agreement provided for the issuance of preferred shares to Xxxxxxx,
Venhold and BPC in
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proportion to their respective contributions to the capital of VenStar (the
"VenStar Preferred Shares"). As of the date hereof, 2,054,004.8 VenStar
Preferred Shares have been issued in favor of Xxxxxxx, 2,301,230.4 have been
issued in favor of Venhold and 482,691.2 have been issued in favor of BPC.
D. As of the date hereof, the outstanding common shares of
Venhold are owned approximately 82% by VI and 18% by BPC. Pursuant to the
terms of that certain Shareholders Agreement of Venhold Investments (1994) Ltd.
dated as of April 8, 1994 and effective July 7, 1994 among Venhold, VI and BPC
(the "Venhold SH Agreement"), Venhold, VI and BPC set forth certain terms for
the conduct of the business and affairs of Venhold. Among other things, the
Venhold SH Agreement provides for the issuance of preferred shares to VI and
BPC in proportion to their respective contributions to the capital of Venhold
(the "Venhold Preferred Shares"). As of the date hereof, (i) 960,000 common
shares of Venhold have been issued in favor of VI, (ii) 210,000 common shares
have been issued in favor of BPC, (iii) 1,113,472 Venhold Preferred Shares have
been issued in favor of VI and 764,508 Venhold Preferred Shares have been
issued in favor of BPC. Additionally, VI is entitled to 423,249.6 additional
Venhold Preferred Shares, relating to the most recent cash call, which have not
been issued as of the date hereof.
E. Pursuant to the terms of that certain Management Agreement
dated July 7, 1994 among VenStar, Xxxxxxx, Venhold, BPC, the VenStar
Subsidiaries and GS Management (the "Management Agreement"), the said parties
set forth, among other things, the terms pursuant to which GS Management would
perform management services with respect to the exploration and related
activities of the parties on the Areas and in the Republic of Venezuela
generally.
F. Section 8.4 of the Stock Purchase Agreement provides as a
cause of termination the failure by VenStar or one of the VenStar Subsidiaries
to obtain the vein or hard rock mineral rights (the "Veta Rights") to the Valle
Hondo concession (one of the Areas covered by certain of the Rights) by January
7, 1995. In the event they failed to do so, the Buyers were entitled to
"unwind" the VenStar purchase by "putting" (or selling) their Venhold VenStar
Shares, BPC VenStar Shares and VenStar Preferred Shares, respectively, back to
Xxxxxxx in exchange for the payment by Xxxxxxx to the Buyers of (i) all amounts
paid by the Buyers toward the purchase price of the Venhold VenStar Shares and
the BPC VenStar Shares through the date of exercise of the "put" and (ii) all
amounts contributed by the Buyers to VenStar pursuant to cash calls for
operations and for which VenStar Preferred Shares have been issued or are
pending issuance through the date of exercise of the "put". Alternatively, the
Buyers could elect to extend the time for acquiring the Veta Rights for an
additional six month period, to July 7, 1995. By a notice to Xxxxxxx dated
December 16, 1994, the Buyers elected to extend the period for acquiring the
Veta Rights to July 7, 1995.
G. As of July 7, 1995, the Veta Rights had not been acquired.
Pursuant to a letter dated July 11, 1995, the Buyers gave Xxxxxxx notice of
their election to exercise the "put" and terminate the Stock Purchase Agreement
and the VenStar SH Agreement based on the failure of VenStar and the VenStar
Subsidiaries to timely obtain the Veta Rights. Pursuant to a letter dated July
12, 1995, GS Management gave Xxxxxxx notice of its election to terminate the
Management Agreement, for the same reason, in accordance with section 11.2.7
thereof.
H. Venhold has paid Xxxxxxx $731,250 toward the purchase of the
Venhold VenStar Shares (of which $131,250 corresponds indirectly to BPC) and
has made cash contributions to VenStar in the amount of $1,438,269 (of which
$477,818 corresponds indirectly to BPC). BPC has paid Xxxxxxx $468,750
directly toward the purchase of the BPC VenStar Shares and has made direct cash
contributions to VenStar in the amount of $301,682.
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I. Pursuant to the Stock Purchase Agreement, based on the
exercise of the "put" by the Buyers, Xxxxxxx is obligated to repay $2,169,519
to Venhold (of which $609,068 corresponds indirectly to BPC) and U.S.$770,432
to BPC directly. Concurrently with such payment, the Buyers are obligated to
transfer to Xxxxxxx all right, title and interest of the Buyers in the Venhold
VenStar Shares (including those held by the Bank pursuant to the Trust
Agreement), the BPC VenStar Shares (including those held by the Bank pursuant
to the Trust Agreement) and the VenStar Preferred Shares.
J. Notwithstanding paragraph I above, Xxxxxxx and BPC have
entered into a separate arrangement among themselves pursuant to which, among
other terms and conditions agreed among Xxxxxxx and BPC separately, BPC will
retain its BPC VenStar Shares and its VenStar Preferred Shares in exchange for
forgoing its right to reimbursement of the amounts to which it is entitled
under the exercise of the "put", both directly and indirectly through Venhold.
K. In connection with the termination of the Management Agreement
certain amounts have been claimed by GS Management to reimburse amounts
advanced by it towards operating costs on behalf of VenStar and the VenStar
Subsidiaries pursuant to the Management Agreement. Such amounts have not been
agreed upon by Xxxxxxx and/or BPC.
L. The parties desire to enter into this Agreement to settle all
existing claims and disputes and to avoid any future claims, disputes or
litigation which may arise therefrom, and to set forth, among other things, the
terms and conditions of (i) the payment of the amounts owing to Venhold under
the "put" (exclusive of amounts indirectly attributable to BPC), (ii) the
transfer to Xxxxxxx of all Venhold VenStar Shares, all VenStar Preferred Shares
held by Venhold and all rights of Venhold thereto, (iii) the final payment and
settlement of all amounts which may be owed to GS Management under the
Management Agreement and (iv) the final termination of the Stock Purchase
Agreement, the VenStar SH Agreement, the Management Agreement, the Trust
Agreement and the Venhold SH Agreement and the relinquishment and waiver by all
parties of any and all claims with respect thereto. Venhold, VI, GS Management
and BPC are sometimes collectively hereinafter referred to as the "Buyer Group"
and Xxxxxxx, VenStar and the VenStar Subsidiaries are sometimes collectively
hereinafter referred to as the "Seller Group".
X. Xxxxxx Star Resources Ltd. ("GSR"), Xxxxxxx and BPC have also
entered into that certain Escrow Agreement dated July 9, 1996 (the "Escrow
Agreement") whereby Xxxxxxx will deposit the amount mentioned in 3.1 below in
escrow pending the closing of the termination and settlement transaction.
Venhold and GS Management, both affiliates of GSR, acknowledge that GSR will
receive the above-mentioned amount placed in escrow on their behalf.
NOW, THEREFORE, for valuable consideration, and in consideration of
the reciprocal mutual promises, agreements and waivers contained herein, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Incorporation of Recitals. The Recitals set forth in paragraphs A
through L above, inclusive, are hereby incorporated into and made a part of
this Agreement by this reference. Each of the parties hereto hereby
acknowledges and agrees that said Recitals are true and correct.
2. Closing. The transaction contemplated by this Agreement shall be
consummated (the "Closing") on or before July 30, 1996 (the "Closing Date").
The Closing shall take place at the offices
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of GS Management in Denver, Colorado on the Closing Date, unless the parties
mutually agree in writing to extend the Closing Date or change the location of
the Closing.
3. Xxxxxxx'x Obligations. Xxxxxxx shall:
3.1 Pursuant to the Escrow Agreement between GSR, Xxxxxxx and BPC,
prior to Closing, wire-transfer immediately available funds in the amount of
U.S.$1,262,559.36 (the "Funds") to the Escrow Account as more particularly set
out in the Escrow Agreement.
3.2 At Closing, provided that on or before the Closing Date Buyers
have materially complied with each and all of their obligations set forth
herein, Xxxxxxx shall:
3.2.1 Along with GSR and BPC instruct the Escrow Holder in
writing to release the Funds as more particularly set out in the Escrow
Agreement.
3.2.2 Authorize the withdrawal of U.S.$ 337,440.64 from the
VenStar account No. 1018025606 with Norwest Bank, N.A. The wire transfer of
the funds in 3.1 above shall constitute such authorization.
The amounts in 3.1 and 3.2.2 constitute the sole consideration that the Buyer
Group, excluding BPC, and including any and all affiliates, subsidiaries and/or
related companies is entitled to and will receive from the Seller Group as
total compensation arising from or pursuant to the Stock Purchase Agreement,
the VenStar SH Agreement and the Management Agreement, and in total
satisfaction of all outstanding amounts, and the receipt and sufficiency of
which is expressly hereby acknowledged by Venhold, GS Management and their
affiliates, subsidiaries and related companies. If applicable, any adjustment
between Xxxxxxx and BPC in connection with this credit will be made between
Xxxxxxx and BPC in a separate agreement.
3.3 Assume full responsibility for all unpaid and ongoing
obligations of VenStar and the VenStar Subsidiaries, including, without
limitation, any obligations arising out of those certain drilling contracts
among certain VenStar Subsidiaries and Major Drilling International or any of
its affiliates and all charges of the registered agent/corporate secretary of
VenStar and the VenStar Subsidiaries. Evidence of the payment of any of these
obligations which are due and payable before the Closing Date shall be provided
by the Seller Group at or prior to the Closing.
3.4 Execute this Agreement and cause VenStar and each of the
VenStar Subsidiaries to do the same and to provide the Buyer Group with three
(3) fully executed originals hereof.
4. Venhold's Obligations. At Closing, provided that on or before the
Closing Date Xxxxxxx has materially complied with each and all of its
obligations set forth herein, Venhold shall:
4.1 Deliver to Xxxxxxx share certificates representing (a)
1,170,000 Venhold VenStar Shares, (b) 2,301,230.4 VenStar Preferred Shares
issued or endorsed in favor of Venhold, duly endorsed for transfer to Xxxxxxx,
and free and clear of any liens, claims, encumbrances, or other rights of third
parties and (c) 2,054,004.8 VenStar Preferred Shares originally issued in favor
of Xxxxxxx and in the possession of Venhold. Any common and/or preferred share
interest to be earned by BPC in VenStar shall be provided for and evidenced in
a separate agreement between Xxxxxxx and BPC.
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4.2 Execute this Agreement and to cause VI and GS Management to do
the same and to deliver three (3) fully executed originals hereof to the Seller
Group.
4.3 Deliver or cause to be delivered to Xxxxxxx the resignation,
substantially in the form attached hereto as Exhibit A-1 or A-2, as applicable,
of all officers and directors of VenStar and the VenStar Subsidiaries who were
selected by or who are representatives of Venhold (due to the ownership of VI
therein) and GS Management, the names of which officers and directors are set
forth in Exhibit A-3 attached hereto.
4.4 Execute an original letter, substantially in the form attached
hereto as Exhibit B, instructing the Bank to deliver all Venhold VenStar Shares
in its possession pursuant to the Trust Agreement to Xxxxxxx.
4.5 Execute an original letter, substantially in the form attached
hereto as Exhibit C, to the office of Coopers & Xxxxxxx, Nassau, Bahamas, the
acting corporate secretary and transfer agent of VenStar, (a) informing it of
the new directors of VenStar, (b) informing it that Venhold no longer has any
ownership or other interest in VenStar, and (c) instructing it to take any and
all further actions with respect to VenStar only from the newly named directors
of VenStar.
4.6 Provide, together with GS Management, the originals or, where
no originals are available, copies of all corporate and formation documents,
minutes of shareholders meetings and board of directors meetings and powers of
attorney, if any, relating to VenStar or any of the VenStar Subsidiaries, which
are in its possession, in accordance with the list set forth on Exhibit D-1
attached hereto.
4.7 Cause, together with GS Management, Coopers & Xxxxxxx, Nassau,
Bahamas to provide (a) a letter dated on or around the Closing Date,
substantially in the form attached hereto as Exhibit D-2, certified by a duly
authorized representative, setting forth (i) the originals of all corporate and
formation documents of VenStar and its Bahamian subsidiaries (the "Bahamian
Companies"), which are in its possession, (ii) a complete description of all
common and preferred shares issued by each of the Bahamian Companies since July
7, 1994 through the date of the letter and (iii) certified copies of all
shareholders meetings and board of directors meetings of the Bahamian Companies
since July 7, 1994 through the date of the letter and (iv) all powers of
attorney, if any, granted by each of the Bahamian Companies since July 7, 1994
through the date of the letter and (b) a certificate of good standing for each
of the Bahamian Companies dated within 180 days prior to the Closing.
4.8 Provided that BPC has complied with all of its obligations set
forth herein:
4.8.1 Execute this Agreement and to cause VI and GS
Management to do the same and to deliver three (3) fully executed
originals hereof to BPC.
4.8.2 Deliver to BPC share certificates representing (a)
499,508 Venhold Preferred Shares originally issued in favor of BPC and
in the possession of Venhold, so that BPC can endorse them over to VI
as provided in section 5.3.1 below, (b) 482,691.2 VenStar Preferred
Shares originally issued in favor of BPC and in the possession of
Venhold.
5. BPC's Obligations. At Closing, provided that on or before the Closing
Date Xxxxxxx has complied with each and all of its obligations set forth
herein, BPC shall:
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5.1 Execute this Agreement and to deliver three (3) fully executed
originals hereof to Xxxxxxx on behalf of the Seller Group and three (3) fully
executed originals hereof to VI on behalf of Venhold and GS Management.
5.2 Take all actions which may be necessary in its capacity as a
shareholder of Venhold, if any, to enable Venhold to fulfill its obligations
under this Agreement.
5.3 Provided that Venhold has complied with all of its obligations
set forth herein:
5.3.1 Deliver to VI share certificates representing (a)
210,000 common shares of Venhold previously issued or endorsed in
favor of BPC, duly endorsed for transfer to VI, free and clear of any
liens, claims, encumbrances, or other rights of third parties and (b)
265,000 Venhold Preferred Shares issued in favor of BPC, duly endorsed
for transfer to VI, and free and clear of any liens, claims,
encumbrances, or other rights of third parties. Additionally, BPC
will endorse for transfer to VI, free and clear of any liens, claims,
encumbrances, or other rights of third parties, certificates for
499,508 Venhold Preferred Shares originally issued in favor of BPC and
in the possession of Venhold which will be brought to the Closing by
Venhold in accordance with section 4.8.2 above.
5.3.2 Execute this Agreement and to deliver three (3) fully
executed originals hereof to VI on behalf of Venhold and GS
Management.
5.3.3 Deliver or cause to be delivered to VI the
resignation, substantially in the form attached hereto as Exhibit E,
of all officers and directors of Venhold who were selected by or who
are representatives of BPC, the names of which officers and directors
are set forth in Exhibit E-1 attached hereto.
5.3.4 Execute an original letter, substantially in the form
attached hereto as Exhibit F, to the office of The Corporate Secretary
Limited, Bridgetown, Barbados, the acting corporate secretary and
transfer agent of Venhold, (a) informing it of the new directors of
Venhold, (b) informing it that BPC no longer has any ownership or
other interest in Venhold and (c) instructing it to take any and all
further actions with respect to Venhold only from the newly named
directors of Venhold.
6. GS Management's Obligations. At Closing, provided that on or before
the Closing Date Xxxxxxx has complied with each and all of its obligations set
forth herein, GS Management shall:
6.1 Deliver to Xxxxxxx originals (where available) or copies of
all technical data and reports with respect to the Areas which is set forth in
the memorandum from Xxxxx Xxxxxxxxx of GS Management to Xxxxxxx Xxxxx of
Xxxxxxx which is attached hereto as Exhibit G, and which Xxxxxxx and BPC hereby
acknowledge that they have received and accepted.
6.2 Execute this Agreement and to deliver three (3) fully executed
originals hereof to the Seller Group.
6.3 Comply, together with Venhold, with the provisions of Sections
4.6 and 4.7 above, and to deliver or cause to be delivered to Xxxxxxx all the
business and accounting books and records of VenStar and the VenStar
Subsidiaries which it has in its possession, if any, which are set forth on
Exhibit H attached hereto.
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6.4 Deliver or cause to be delivered to Xxxxxxx statements of all
bank accounts of VenStar and VenStar Subsidiaries, as of the most recent date
for which such statements have been received, which are set forth on Exhibit I
attached hereto. The parties hereto agree and acknowledge that all information
and data delivered by GS Management pursuant to paragraphs 6.3 and 6.4 hereof
is delivered without warranty of any kind, whether expressed or implied.
6.5 Deliver or cause to be delivered to Xxxxxxx an unaudited,
internal income statement and balance sheet for VenStar and each of the VenStar
Subsidiaries, current through July 31, 1995.
7. Termination of Agreements; Releases of Claims.
7.1 As of the Closing Date, the Stock Purchase Agreement, the
Management Agreement, the VenStar SH Agreement and the Venhold SH Agreement are
all terminated and of no further force or effect. Immediately following the
Closing Date, Xxxxxxx will take all steps necessary to terminate the Trust
Agreement, as required by the Bank.
7.2 From and after the Closing Date the Buyer Group and each of
them, individually and collectively, and all of their respective past and
present directors, officers, shareholders, affiliates, parents, subsidiaries,
partners, agents, representatives, attorneys, principals, associates,
employees, successors and assigns (collectively, the "Comprehensive Buyer
Group") hereby fully, forever and irrevocably release and discharge the Seller
Group, and each of them, individually and collectively, and all of their
respective past and present directors, officers, shareholders, affiliates,
parents, subsidiaries, partners, agents, representatives, attorneys,
principals, associates, employees, successors and assigns (collectively, the
"Comprehensive Seller Group"), from any and all rights, claims, demands,
liabilities, obligations, damages, losses, injuries, actions and causes of
action of every type, kind, nature, description or character, and irrespective
of how, why, or by reason of what facts, whether heretofore or now existing, or
that could, might, or may be claimed to exist, whether known or unknown,
suspected or unsuspected, whether based on contract, tort, breach of duty, or
other legal or equitable theory of recovery (collectively a "Claim" or the
"Claims"), which the Comprehensive Buyer Group, or any of them, has or
hereafter may have, or claim or hereafter may claim to have, against the
Comprehensive Seller Group, or any of them, which are or have been incurred or
sustained by the Comprehensive Buyer Group, or any of them, and occasioned
directly or indirectly by an action or omission of the Comprehensive Seller
Group, or any them, arising out of or in connection with the Areas, the Rights,
the Agreements, the Stock Purchase Agreement, the Management Agreement, the
Trust Agreement, the VenStar SH Agreement, the Venhold SH Agreement, or the
transactions contemplated by any of the foregoing, except for and excluding any
Claim arising out of or based on the fact that any representation or warranty
made by the Comprehensive Seller Group, or any of them, in this Agreement is
materially untrue as of the Closing.
7.3 From and after the Closing Date the Comprehensive Seller Group
and each of them, individually and collectively, hereby fully, forever and
irrevocably release and discharge the Comprehensive Buyer Group, and each of
them, individually and collectively, from any and all Claims which the
Comprehensive Seller Group, or any of them, has or hereafter may have, or claim
or hereafter may claim to have, against the Comprehensive Buyer Group, or any
of them, which are or have been incurred or sustained by the Comprehensive
Seller Group, or any of them, and occasioned directly or indirectly by an
action or omission of the Comprehensive Buyer Group, or any of them, arising
out of or in connection with the Areas, the Rights, the Agreements, the Stock
Purchase Agreement, the Management Agreement, the Trust Agreement, the VenStar
SH Agreement, or the
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transactions contemplated by any of the foregoing, except for and excluding any
Claim arising out of or based on the fact that any representation or warranty
made by the Comprehensive Buyer Group, or any of them, in this Agreement is
materially untrue as of the Closing.
7.4 From and after the Closing Date VI, Venhold, GS Management and
all of their respective past and present directors, officers, shareholders,
affiliates, parents, subsidiaries, partners, agents, representatives,
attorneys, principals, associates, employees, successors and assigns
(collectively, the "Comprehensive VI Group") hereby fully, forever and
irrevocably release and discharge BPC, and all of its past and present
directors, officers, shareholders, affiliates, parents, subsidiaries, partners,
agents, representatives, attorneys, principals, associates, employees,
successors and assigns (collectively, the "Comprehensive BPC Group"), from any
and all Claims which the Comprehensive VI Group, or any of them, has or
hereafter may have, or claim or hereafter may claim to have, against the
Comprehensive BPC Group, or any of them, which are or have been incurred or
sustained by the Comprehensive VI Group, or any of them, and occasioned
directly or indirectly by an action or omission of the Comprehensive BPC Group,
or any them, arising out of or in connection with the Areas, the Rights, the
Agreements, the Stock Purchase Agreement, the Management Agreement, the Trust
Agreement, the VenStar SH Agreement, the Venhold SH Agreement, or the
transactions contemplated by any of the foregoing, except for and excluding any
Claim arising out of or based on the fact that any representation or warranty
made by the Comprehensive BPC Group, or any of them, in this Agreement is
materially untrue as of the Closing.
7.5 From and after the Closing Date the Comprehensive BPC Group,
and each of them, collectively and individually, hereby fully, forever and
irrevocably release and discharge the Comprehensive VI Group from any and all
Claims which the Comprehensive BPC Group, or any of them, has or hereafter may
have, or claim or hereafter may claim to have, against the Comprehensive VI
Group, or any of them, which are or have been incurred or sustained by the
Comprehensive BPC Group, or any of them, and occasioned directly or indirectly
by an action or omission of the Comprehensive VI Group, or any them, arising
out of or in connection with the Areas, the Rights, the Agreements, the Stock
Purchase Agreement, the Management Agreement, the Trust Agreement, the VenStar
SH Agreement, the Venhold SH Agreement, or the transactions contemplated by any
of the foregoing, except for and excluding any Claim arising out of or based on
the fact that any representation or warranty made by the Comprehensive VI
Group, or any of them, in this Agreement is materially untrue as of the
Closing.
7.6 Each of the Comprehensive Buyer Group, the Comprehensive
Seller Group, the Comprehensive VI Group and the Comprehensive BPC Group
irrevocably covenant and agree that each of them shall forever refrain from
initiating, filing, instituting, maintaining or proceeding upon any Claim of
any nature whatsoever released in the general releases provided for in this
section 7 (the "General Releases"). If an action is brought arising out of an
alleged breach of any General Release, the prevailing party in said action will
be entitled to recover from the breaching party, in addition to any other
relief provided by the law, such costs and expenses as may be incurred by the
prevailing party, including court costs and reasonable attorneys' fees and
disbursements. Any General Release made herein may be pleaded as a full and
complete defense to or be used as the basis for an injunction against any
action, suit, or other proceeding that may be instituted, prosecuted or
attempted in breach of such General Release.
7.7 It is understood and agreed that the delivery and acceptance
of the General Releases made herein shall not be deemed or construed as an
admission of liability by any released party, and
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each such released party hereby expressly denies liability of any nature
whatsoever arising from or related to the subject of the General Releases.
8. Representations and Warranties.
8.1 Each of the parties to this Agreement represents and warrants
that it is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation.
8.2 Each of the parties to this Agreement represents and warrants
that it has full corporate power to enter into this Agreement and to consummate
the transactions contemplated hereby, including the making of the applicable
General Release, and that the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of such party, and
that this Agreement is a valid and binding obligation of such party,
enforceable against such party in accordance with its terms.
8.3 Each of the parties to this Agreement represents and warrants
that neither the execution and delivery of, nor performance under, this
Agreement on the part of such party is prohibited by, conflicts with or
requires any authorization, approval or registration under any law, rule,
regulation or court order binding upon such party. However, the Venezuelan
Ministry of Energy and Mines and Corporacion Venezolana de Guayana may need to
be notified of certain changes in ownership. The Comprehensive VI Group shall
not have any responsibility or liability for any such notifications which may
be required.
8.4 Each of the parties to this Agreement represents and warrants
that it is the owner of, and has not assigned, sold or transferred or otherwise
disposed of any Claim released in the applicable General Release made by such
party.
8.5 Each of the parties to this Agreement represents and warrants
that it has had the advice of legal counsel of its own choosing in negotiations
for the preparation of this Agreement and the applicable General Release of
such party, that it has read such General Release and had it fully explained to
it by its legal counsel, and that it is fully aware of its content and legal
effect.
The representations and warranties made herein shall survive the
Closing Date for a period of one year. Each party hereto shall indemnify and
hold the others harmless from and against any loss, cost or expense suffered by
them due to the fact that any representation or warranty made by the such party
in this Agreement is materially untrue as of the Closing Date.
9. Miscellaneous Provisions.
9.1 No party may assign this Agreement or any of its rights and
duties hereunder without the prior written consent of the other parties.
Subject to this limitation on assignments, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
9.2 This Agreement may not be amended nor any provision herein
waived except by an instrument in writing signed by the party to be charged
with such amendment or waiver and delivered by such party to the parties
claiming the benefit of such amendment or waiver. No waiver of any
9
10
provision of this Agreement shall be deemed or shall constitute a waiver of any
other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver, unless otherwise provided in the written waiver.
9.3 The headings and subheadings contained in this Agreement are
for convenience only and shall not control or affect the meaning, construction,
or interpretation of any provision hereof.
9.4 This Agreement constitutes the entire agreement among the
parties with respect to the subject matter and supersedes all prior and
contemporaneous agreements, representations and understandings of the parties.
9.5 This Agreement shall be construed in accordance with, and
governed by, the internal laws of the Republic of Venezuela and the parties
hereto agree that this Agreement shall have the binding effect of Res Judicata
under Venezuelan law.
9.6 This Agreement may be executed in counterparts, each of which
shall be an original instrument, but all of which together shall constitute one
and the same instrument. This Agreement may validly be executed by electronic
telecopier or facsimile.
9.7 Should any provisions of this Agreement, or portions hereof,
be found to be invalid by an arbitrator or any court of competent jurisdiction,
the remainder of this Agreement shall nonetheless remain in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed, effective as of the date first above written.
VENSTAR GOLD LTD. formerly known as
XXXXXX LIMITED
By: /s/ Xxxxx X. Xxxxx
Title: Chairman
VENHOLD INVESTMENTS (1994) LTD.
By: /s/ Xxxxx X. Xxxxx
Title: Director
XXXXXXX ASSOCIATED S.A.
By: /s/ Xxxxxxx Xxxxx
Title: Attorney in Fact
BPC CORP.
By: /s/ Xxxxxxx Xxxxx
Title: Attorney in Fact
10
11
GOLDEN STAR MANAGEMENT LTD.
By: /s/ Xxxxx X. Xxxxx
Title: Chairman
GENERAL MINING DE GUAYANA C.A.
By: /s/ Xxxxxx Xxxxx-Xxxxx
Title: Director
KRYSOS MINING S.A.
By: /s/ Xxxxxx Xxxxx-Xxxxx
Title: Director
SERVICIOS CONSULTMIN S.A.
By: /s/ Xxxxxx Xxxxx-Xxxxx
Title: Director
GENVEN HOLDINGS LTD.
By: /s/ Xxxxx X. Xxxxx
Title: Chairman
KRYSVEN HOLDINGS LTD.
By: /s/ Xxxxx X. Xxxxx
Title: Chairman
CONSULTVEN HOLDINGS LTD.
By: /s/ Xxxxx X. Xxxxx
Title: Chairman
VENEZUELA INVESTMENTS LTD.
By: /s/ Xxxxx X. Xxxxx
Title: Chairman
11
12
EXHIBIT A-1
Form of Resignation of Officers and Directors
of Bahamas Companies Representing Buyer Group
______________, 1996
Board of Directors
______________________
______________________
______________________
Gentlemen:
The undersigned hereby resign any position they held as an officer and/or
member of the Board of Directors of ____________, effective as of the date of
this letter and hereby acknowledge that they have no claim for compensation for
loss of office or otherwise.
Sincerely,
______________________
______________________
______________________
13
EXHIBIT A-2
Form of Resignation of Officers and Directors
of Venezuelan Companies Representing Buyer Group
14
EXHIBIT A-3
Names of Officers and Directors Representing VI (through Venhold) and Affiliates
VenStar:
Directors: Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx,
Xxxx Xxxxxx Xxxxxxxx, Xxxxx Xxxxxx
Officers: Xxxxx Xxxxx, Chairman & CEO, Xxxxx Xxxxxxx, President, Xxxxxxx
Xxxxxxx, Managing Director and Secretary, Xxxxx Xxxxxxxx,
Vice President & General Counsel, Xxxxxxxxxxx Xxxxxx, Vice
President of Finance
KrysVen:
-------
Directors: Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx,
Xxxx Xxxxxx Xxxxxxxx, Xxxxx Xxxxxx
Officers: Xxxxx Xxxxx, Chairman & CEO, Xxxxx Xxxxxxx, President, Xxxxxxx
Xxxxxxx, Managing Director and Secretary, Xxxxxxxxxxx Xxxxxx,
Vice President of Finance
GenVen:
------
Directors: Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx,
Xxxx Xxxxxx Xxxxxxxx, Xxxxx Xxxxxx
Officers: Xxxxx Xxxxx, Chairman & CEO, Xxxxx Xxxxxxx, President, Xxxxxxx
Xxxxxxx, Managing Director and Secretary, Xxxxxxxxxxx Xxxxxx,
Vice President of Finance
ConsultVen:
----------
Directors: Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx,
Xxxx Xxxxxx Xxxxxxxx, Xxxxx Xxxxxx
Officers: Xxxxx Xxxxx, Chairman & CEO, Xxxxx Xxxxxxx, President, Xxxxxxx
Xxxxxxx, Managing Director and Secretary, Xxxxxxxxxxx Xxxxxx,
Vice President of Finance
Krysos:
------
Directors Principales: Xxxxxxx Xxxxxxx (Presidente), Yoshiaki Odan (Vice
Presidente), Xxxxx Xxxxxxxxx
Directors Suplentes: Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxxxxxx
General:
-------
Directors Principales: Xxxxxxx Xxxxxxx (Presidente), Yoshiaki Odan (Vice
Presidente), Xxxxx Xxxxxxxxx
Directors Suplentes: Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxxxxxx
Consultmin:
----------
Directors Principales: Xxxxxxx Xxxxxxx (Presidente), Yoshiaki Odan (Vice
Presidente), Xxxxx Xxxxxxxxx
Directors Suplentes: Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxxxxxxxx
15
EXHIBIT B
Form of Letter to Bank re: delivery of VenStar Common Shares to Xxxxxxx
[TO BE PROVIDED BY XXXXXXX]
EXHIBIT C
Form of Letter from Venhold and BPC to Corporate
Secretary and Transfer Agent of VenStar
______________, 1996
Coopers & Xxxxxxx
Xxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx Xxxxxx
X.X. Xxx Xx. 000
Xxxxxx, X.X. Bahamas
Telecopier No. (000) 000-0000
Telephone No. (000) 000-0000
Attention: Xx. Xxxx Xxxxxx or Ms. Xxxxxxx Xxx
Change of Ownership and Control of VenStar Gold Ltd. (the "Company")
Gentlemen:
Please be informed that the ownership and control of the Company has recently
changed. As of ___________, 1996, Venhold Investments (1994) Ltd. ("Venhold")
no longer has any share ownership interest in of any kind in the Company and
Xxxxx Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxx, Xxxxx Xxxxxxxx and Xxxxxxxxxxx Xxxxxx have resigned and
are no longer officers or directors of the Company. Copies of the said
resignations are attached hereto.
As of the date specified above, the shareholder(s) of the Company is/are:
Xxxxxxx Associated S.A.,
a British Virgin Islands corporation ("Xxxxxxx") and
BPC Corp., a British Virgin Islands corporation
and the officers and/or directors of the Company are:
___________________________
___________________________
___________________________
___________________________.
16
Henceforth, you are hereby instructed to take any and all further actions with
respect to the Company only from the new directors or officers thereof, or
designated representatives of Xxxxxxx (the sole shareholder), as set forth
herein.
Thank you for your prompt assistance in this matter.
Sincerely,
VENHOLD INVESTMENTS (1994) LTD.
By:
Title:
XXXXXXX ASSOCIATED S.A.
By:
Title:
BPC CORP.
By:
Title:
17
EXHIBIT D-1
Documents to be Delivered for VenStar and the VenStar Subsidiaries
18
EXHIBIT D-2
Form of Letter from Coopers & Xxxxxxx, Bahamas
19
EXHIBIT E
Form of Resignation of Officers and Directors of Venhold Representing BPC
_____________, 1996
Board of Directors
________________
________________
________________
Gentlemen:
The undersigned hereby resign any position they hold as an officer and/or
member of the Board of Directors of Venhold Investments (1994) Ltd., a Barbados
corporation, effective as of the date of this letter and hereby acknowledge
that they have no claim for compensation for loss of office or otherwise.
Sincerely,
______________________
Xxxxxxxx Xxxxx Canto
______________________
Xxxxxx Xxxxxxx
20
EXHIBIT E-1
Names of Officers and Directors of Venhold Representing BPC
Directors: Xxxxxxxx Xxxxx Canto, Xxxxxx Xxxxxxx
21
EXHIBIT F
Form of Letter from BPC to Corporate Secretary and Transfer Agent of Venhold
_____________, 1996
The Corporate Secretary Limited
Xxxxxxxxx Xxxxx
Xxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx
Telecopier No. (000) 000-0000
Telephone No. (000) 000-0000
Attention: Xx. Xxxx Xxxxx Xxxxxxx
Change of Ownership and Control of Venhold Investments (1994) Ltd. (the
"Company") Gentlemen:
Please be informed that the ownership and control of the Company has recently
changed. As of ___________, 1996, BPC Corp. no longer has any share ownership
interest in of any kind in the Company and Xxxxxxxx Xxxxx Canto and Xxxxxx
Xxxxxxx have resigned and are no longer officers or directors of the Company.
Copies of the said resignations are attached hereto.
As of the date specified above, the shareholder(s) of the Company is/are:
Venezuela Investments Ltd., a Barbados corporation ("VI")
and the new officers and/or directors of the Company which well replace Messrs.
Perez Canto and Xxxxxxx, if any, will be duly elected and notified to you by
VI. Henceforth, you are hereby instructed to take any and all further actions
with respect to the Company only from the new directors or officers thereof, or
designated representatives of VI (the sole shareholder), as set forth herein.
Thank you for your prompt assistance in this matter.
Sincerely,
VENHOLD INVESTMENTS (1994) LTD.
By:
Title:
BPC CORP.
By:
Title:
22
EXHIBIT G
Technical Reports and Information to be Delivered by GS Management
23
EXHIBIT H
List of Original Business and Accounting Books and Records of VenStar
and VenStar Subsidiaries in Possession of Venhold
1. VenStar Gold - GS Management has the following information:
A. VenStar financial statements
B. VenStar consolidation file, including trial balances
and journal entries
C. Supporting invoices for all transactions entered into
by VenStar, or Golden Star Management for the benefit
of VenStar
D. Computer files utilized in the management of VenStar
financial affairs
E. Share Capital Listing
F. Summary of Cash Calls
G. Copies of all bank statements, wire transfers and
check stock
2. GenVen, KrysVen, ConVen - GS Management has copies of trial
balances and journal entries available for review which will
be delivered at the Closing.
24
EXHIBIT I
List of Bank Accounts
During the term of the agreements, GS Management has opened one bank
account for VenStar and no accounts for KrysVen, GenVen and ConVen.
Xxxxxx Limited
Account # (see original document for this number)
Norwest Bank Colorado
Denver, Colorado
Funds Transfer Department
ABA Transit Routing Number: (see original document
for this number)
Telephone: (000) 000-0000
Immediately after Closing, this account, which currently has a zero balance,
will be closed.
