SUBSCRIPTION AGREEMENT
DATED AS OF JANUARY 29, 2001
BETWEEN:
AURORA METALS (BVI) LIMITED
- AND -
BILLITON E&D 3 B.V.
SUBSCRIPTION AGREEMENT
THIS AGREEMENT is made as of the 29th day of January, 2001.
BETWEEN:
AURORA METALS (BVI) LIMITED, a company incorporated under the laws of
the British Virgin Islands, having an office at Xxxxx 000, 0 Xxx
Xxxxxxxx Xxxx, Xxxxxx, XX0 0XX, Xxxxxx Xxxxxxx
(the "Company")
OF THE FIRST PART
AND:
BILLITON E&D 3 BV, a company incorporated under the laws of The
Netherlands, having an office at Xxxxxxxxxxxxxxx 0, 000 XX, Xxx Xxxxx,
Xxx Xxxxxxxxxxx
("Billiton")
OF THE SECOND PART
WHEREAS Billiton wishes to subscribe for and purchase from the Company for an
aggregate purchase price of $600,000, a total of 857,143 Units, each unit
comprised of one share of common stock and one purchase warrant, each purchase
warrant having the terms more particularly set forth herein;
AND WHEREAS the Company wishes to issue and sell the Units to Billiton for a
price of $0.70 per Unit, upon the terms and conditions hereinafter set forth;
AND WHEREAS the Company has agreed that it will, contemporaneously with the
execution of this Agreement, enter into an Option Agreement with Billiton UK
Resources B.V., an Affiliate of Billiton, in the form set forth in Schedule "A"
hereto.
AND WHEREAS the parties have agreed to enter into a strategic alliance with
respect to the conduct of further exploration and development of mineral
properties in the Republic of Tunisia;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the premises
and the covenants, agreements, warranties and payments herein set out and
provided for, the parties hereto hereby respectively covenant and agree as
follows:
ARTICLE 1 - MISCELLANEOUS
1.1. DEFINITIONS
Whenever used in this Agreement, including the recitals hereto, including,
unless there is something in the subject matter or context inconsistent
therewith, the following words and terms shall have the respective meanings
ascribed to them as follows:
(a) "IBCA" means the International Business Corporations Act of the
British Virgin Islands, together with all regulations promulgated
thereunder;
(b) "ADDITIONAL EXPLORATION FUNDS" means an aggregate of $2,000,000 to be
advanced by Billiton to the Company or otherwise expended by Billiton
pursuant to Section 7.3 of the Option Agreement;
(c) "AFFILIATE" means a company that is affiliated with another company if
one of them is the subsidiary of the other, or both are subsidiaries
of the same company, or each of them is controlled by the same person,
company, partnership or party. In association with this definition, a
company is a subsidiary of another company if:
(i) it is controlled by:
(A) that other company;
(B) that other company and one or more company, each of which is
controlled by that other company, or
(C) two or more companies, each of which is controlled by that
other company, or
(ii) it is a subsidiary of a subsidiary of that other company.
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In association with this definition, a company is controlled by a
person, company, partnership or party if:
(i) shares of the company carrying more than 50% of the votes for the
election of directors are held, other than by way of security
only, by or for the benefit of that person, company, partnership
or party, and
(ii) the votes carried by the shares mentioned in paragraph (i) are
sufficient, if exercised, to elect a majority of the directors of
the company.
(d) "AGREEMENT" means this agreement and all schedules annexed hereto and
any amendment hereto or any modifications hereof made in accordance
with Section 1.3 hereof, and the terms "hereto", "herein", "hereby"
and other similar terms are used in reference to this Agreement;
(e) "ASSOCIATE" means, if used to indicate a relationship with any person,
(i) a partner, other than a limited partner, of that person,
(ii) a trust or estate in which that person has a substantial
beneficial interest or for which that person serves as trustee or
in a similar capacity,
(iii) a company in respect of which that person beneficially owns or
controls, directly or indirectly, voting securities carrying more
than 10% of the voting rights attached to all outstanding voting
securities of the company, or
(iv) a relative, including the spouse, of that person or a relative of
that person's spouse, if the relative has the same home as that
person.
(f) "BUSINESS DAY" means a day other than a Saturday, Sunday or any day on
which chartered banks in London, England are not open for business
during normal banking hours;
(g) "CLOSING" means the completion of the sale to and the purchase by
Billiton of the Units and the issuance thereof to Billiton as
contemplated hereunder and the grant of the First Property Option by
the Company to Billiton UK Resources B.V., an Affiliate of Billiton,
as contemplated under the Option Agreement;
(h) "CLOSING DATE" means the 29day of January, 2001 or such other date as
the parties hereto may agree;
(i) "CLOSING TIME" means 10:00 a.m. (London, England time) or such later
time on the Closing Date as the parties hereto may agree;
(j) "COMMON SHARE" means a share of common stock with a par value of $0.01
in the capital of the Company;
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(k) "EXPLORATION EXPENDITURES" has the meaning set forth in Section 1.1(g)
of the Option Agreement;
(l) "FINANCIAL STATEMENTS" means the unaudited interim financial
statements of the Company for the nine month periods ended September
30, 2000 and 1999 and the audited financial statements of the Company
for the three month period ended March 31, 2000 and fiscal years ended
December 31, 1999, 1998 and 1997 as reported on by the Company's
independent accountants, in each case consisting of the balance sheets
and the statements of stockholders equity and operations and cash
flows each from June 17, 1997 (inception) to March 31, 2000 or
September 30, 2000, as applicable and all notes and supplemental
information thereto;
(m) "FIRST PROPERTY OPTION" has the meaning set forth in Section 1.1(h) of
the Option Agreement;
(n) "HIGH XXXXX" means High Xxxxx Holdings Ltd., a company incorporated
under the laws of the British Virgin Islands;
(o) "HIGH XXXXX OPTION" means the option granted to Aurora Gold
Corporation by High Xxxxx pursuant to that certain mineral property
option agreement entered into between Aurora Gold Corporation and High
Xxxxx dated January 20, 2000, as amended by letter agreement dated
June 19, 2000 and further amended by agreements made as of and
effective July 28, 2000 and January 25, 2001, a copy of which, as
amended, is attached hereto as Schedule "D", and transferred to the
Company by Aurora Gold Corporation by transfer agreement dated May 18,
2000 between Aurora Gold Corporation and the Company, a copy of which
is attached hereto as Schedule "E";
(p) "INDEMNIFYING PARTY" and "INDEMNIFIED PARTY" shall have the meanings
ascribed to them, respectively, in Section 5.5 hereof;
(q) "INTEREST" means, without limitation, a legal, beneficial or equitable
interest, whether direct, indirect, contingent or otherwise;
(r) "OPTION AGREEMENT" means the Option Agreement dated the date hereof to
be entered into between the Company and Billiton UK Resources B.V., an
Affiliate of Billiton, which agreement will be in the form attached as
Schedule "A" hereto;
(s) "OPTIONED PROPERTIES" has the meaning set forth in Section 1.1(m) of
the Option Agreement;
(t) "OTCBB" means the over the counter bulletin board operated by the
National Association of Securities Dealers Inc.;
(u) "PROGRAM AND BUDGET" means (i) the exploration program and budget
related to the expenditures of the Unit Proceeds, as set forth in
Schedule "C" hereto; or (ii) the exploration program and budget
related to the expenditure of the Additional Exploration Funds, as
determined in accordance with Section 7.3 of the Option Agreement, as
applicable;
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(v) "SECURITIES" has the meaning set forth in Section 6.4(a) of this
Agreement;
(w) "SHARES" means, collectively, the Common Shares comprised in the
Units, and the Common Shares issuable on exercise of the Warrants;
(x) the phrase "TO THE BEST OF OUR KNOWLEDGE" or similar such expressions
means to the best of the knowledge of such person(s), after due
enquiry by them/him;
(y) "UNIT PROCEEDS" means $600,000, being the aggregate price payable by
Billiton to the Company in consideration for the issuance by the
Company to Billiton of the Units;
(z) "UNITS" means an aggregate of 857,143 units of the Company, each unit
comprised of one Common Share and one Warrant;
(aa) "U.S. SECURITIES ACT" means the United States Securities Act of 1933,
as amended; and
(bb) "WARRANT" means the non-transferable common share purchase warrant
comprised in each Unit, each such warrant entitling Billiton to
acquire one Common Share at any time prior to 5:00 p.m. (New York
time) on the first anniversary of the Closing Date at a price of
$0.85.
1.2. GENDER AND NUMBER
Words importing the singular include the plural and vice-versa; and words
importing gender include all genders.
1.3. ENTIRE AGREEMENT
This Agreement, together with any and all agreements, documents and other
instruments to be delivered pursuant thereto or simultaneously herewith (which,
for the purposes of this Section are collectively referred to as the
"Agreement"), constitutes the entire agreement between Billiton and the Company
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of and
between the parties hereto, including, without limitation, the non-binding
letter of intent between the Company and Billiton UK Resources B.V. dated
-5-
February 25, 2000, as amended, and there are no representations, warranties,
covenants or other agreements among the parties hereto in connection with the
subject matter hereof except as specifically set forth in the Agreement. No
supplement, modification, waiver or termination of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. No waiver
of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provisions (whether or not similar) nor shall
such waiver constitute a continuing waiver unless otherwise expressly provided.
1.4. HEADINGS
The Articles, Sections, subsections and other headings contained herein are
included solely for convenience, are not intended to be full or accurate
descriptions of the contents hereof and shall not be considered part of this
Agreement.
1.5. SCHEDULES
The following Schedules attached to this Agreement are an integral part of this
Agreement:
Schedule "A" - Option Agreement;
Schedule "B" - Outstanding Options, Rights, Warrants and Obligations;
Schedule "C" - Program and Budget-Hammala and Kebbouch District Properties;
Schedule "D" - High Xxxxx Option Agreement;
Schedule "E" - Hammala Transfer Agreement;
Schedule "F" - Kebbouch Transfer Agreement;
Schedule "G" - Form of BVI Legal Opinion; and
Schedule "H" - Form of Tunisian Legal Opinion.
1.6. CURRENCY
Unless otherwise indicated, all dollar amounts contained in this Agreement are
and shall be construed to be in dollars in the lawful currency of the United
States.
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1.7. PERIOD TERMINATING ON A NON-BUSINESS DAY
Should the period of time permitted under this Agreement to perform any
obligation or take any action, including the delivery of a notice, terminate on
a day other than a Business Day, then such period shall be extended to the next
following Business Day.
1.8. ILLEGALITY, INVALIDITY, ENFORCEABILITY, ETC.
In the event that one or more provisions of this Agreement or any agreement,
document or other instrument required to be delivered hereunder or pursuant
hereto shall be illegal, invalid or unenforceable in any respect under any
applicable law, the validity, legality and enforceability of the remaining
provisions hereof or thereof shall not be affected or impaired thereby.
ARTICLE 2 - SUBSCRIPTION FOR UNITS
2.1. SUBSCRIPTION FOR UNITS
Billiton hereby subscribes for and agrees to purchase the Units and the Company
hereby agrees to issue and sell the same to Billiton for the Unit Proceeds. The
Company shall issue such Units to Billiton and simultaneously therewith grant to
Billiton UK Resources B.V., an Affiliate of Billiton, the First Property Option
pursuant to the Option Agreement on the Closing Date against receipt of the Unit
Proceeds.
ARTICLE 3 - CONDITIONS
3.1. CONDITIONS TO BILLITON'S OBLIGATIONS AT CLOSING
The obligations of Billiton under this Agreement are subject to the fulfilment,
on or before the Closing, of each of the following conditions, unless waived by
Billiton, and each of the Company and Billiton hereby agree that each of these
conditions has been inserted into this Agreement at the request of Billiton and
for Billiton's own benefit and that they may, accordingly, be waived
unilaterally by Billiton:
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(a) Representations and Warranties. The representations and warranties of
-------------------------------
the Company contained in Section 5.1 hereof shall be true on and as of
the Closing.
(b) Performance. The Company and its management shall have performed and
-----------
complied with all covenants, agreements, obligations and conditions
contained in the Agreement or in any agreement, document or other
instrument entered into or prepared pursuant hereto that are required
to be performed or complied with by the Company on or before the
Closing.
(c) Compliance Certificate. The President of the Company shall deliver to
-----------------------
Billiton at the Closing a certificate certifying that to the best of
such officer's knowledge the representations and warranties of the
Company in Article 5 are true and correct as of the Closing Date and
that the conditions specified in this Section 3.1 and the covenants of
the Company in Article 6 have been fulfilled and stating that there
has been no material adverse change in the business, affairs,
prospects, operations, properties, assets or condition of the Company
since September 30, 2000.
(d) Approvals. The Company shall have obtained, and have provided to
---------
Billiton evidence of such approvals including, without limitation, any
required approvals from the government of the Republic of Tunisia with
respect to the transfer to High Xxxxx of the mineral exploration
properties contemplated in the High Xxxxx Option and the transfer of
all Optioned Properties other than the Hammala exploration permit to
the Company and any required consents of High Xxxxx under the High
Xxxxx Option, which are necessary or advisable and shall also have
obtained or received, all governmental, statutory, regulatory and
judicial courts orders, consents and approvals necessary for the
Closing and the performance of its obligations under the Option
Agreement.
(e) Proceedings and Documents. All corporate and other proceedings on the
--------------------------
part of the Company in connection with the transactions contemplated
by this Agreement and the Option Agreement to occur at or to have
occurred prior to the Closing, and the various transactions, deals and
acts required or agreed to be performed by the Company in connection
therewith, shall have occurred on or before the Closing and all
documents incidental thereto shall be reasonably satisfactory in form
and substance to Billiton and Billiton's counsel, who shall have
received all such counterpart, original and certified or other copies
of such documents as they may reasonably request.
(f) Opinion of Company's Counsel. Billiton shall have received legal
-------------------------------
opinions from Xxxxxx Westwood & Riegels, counsel for the Company, and
Samir Abdelly Law Firm, Tunisian counsel to the Company, which
opinions shall be substantially in form attached as Schedule "G" and
"H" hereto.
-8-
3.2. CONDITIONS OF THE COMPANY'S OBLIGATIONS ON CLOSING
The obligations of the Company under this Agreement are subject to the
fulfilment on or before the Closing of each of the following conditions:
(a) Representations and Warranties. The representations and warranties of
-------------------------------
Billiton contained in Section 5.2 below shall be true on and as of the
date of such Closing.
(b) Proceedings and Documents. All corporate and other proceedings on the
--------------------------
part of Billiton in connection with the transactions contemplated by
this Agreement and the Option Agreement to occur at or to have
occurred prior to the Closing and the various transactions, deals and
acts required or agreed to be performed by Billiton in connection
therewith shall have occurred on or before the Closing and all
documents incident thereto shall be satisfactory in form and substance
to the Company and the Company's counsel, who shall have received all
such counterpart, original and certified or other copies of such
documents as they may reasonably request.
(c) Performance. Billiton shall have performed and complied with all
-----------
agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by Billiton on or
before the Closing.
ARTICLE 4 - CLOSING
4.1. CLOSING TIME
The Closing of the transactions contemplated hereby shall be completed at the
offices of XxXxxxxx T trault, 1300 - 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx at the Closing Time.
4.2. CLOSING ARRANGEMENTS
At the Closing Time,
(a) Billiton shall deliver or cause to be delivered to the Company a
cheque made payable to the Company on the Closing Date in the
aggregate amount of the Unit Proceeds;
(b) the Company shall deliver or cause to be delivered, to or upon the
direction of Billiton one or more certificates representing the Common
Shares and Warrants comprised in the Units purchased at the Closing
Time registered in such manner as Billiton shall notify the Company by
written direction prior to the Closing Time; and
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(c) the Company shall also deliver or cause to be delivered to Billiton
the requisite certificates, opinions and other documents contemplated
hereby and shall deliver to Billiton UK Resources B.V. the Option
Agreement duly and validly executed by the Company granting to
Billiton UK Resources B.V. an option on the Optioned Properties.
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES
5.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Billiton and acknowledges that Billiton
is relying upon such representations and warranties in entering into this
Agreement and purchasing the Units that:
(a) the Company has been duly incorporated and organized and is validly
existing under the laws of the jurisdiction of its incorporation and
has all requisite corporate capacity, power and authority to carry on
its business as now conducted by it and as is presently proposed to be
conducted by it and to own, lease and operate its assets;
(b) the Company has no subsidiaries;
(c) the Company is duly qualified to carry on business under the laws of
the jurisdictions in which it carries on its business and is in good
standing in each of such jurisdictions;
(d) the Company has conducted and is conducting its business in compliance
in all respects with all applicable licensing and environmental
protection legislation, regulations or by-laws or other similar
legislation, laws, by-laws, rules and regulations or the lawful
requirements of any governmental or regulatory bodies and has not at
any time and is not presently emitting, depositing, issuing or
otherwise discharging, or allowing the emission, deposit, issuance or
other discharge of any contaminant in the environment in violation of
federal, provincial, municipal, local or foreign law, statutes,
regulations, by-laws, decrees, rules, policies, directives,
guidelines, orders, permits, licenses, certificates, approvals, and
authorizations of or applicable to the Company, its properties or
activities;
(e) the Company is not aware of any licensing or environmental protection
legislation, regulation, by-law or lawful requirement presently in
force or proposed to be brought into force which the Company
anticipates that it will be unable to comply with without materially
adversely affecting its financial condition, results of operations,
business or prospects in each jurisdiction in which its business is
carried on;
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(f) no consent, approval, permit, authorization, order of or filing with
any court or governmental agency or body is required by the Company
for the execution and delivery of and the performance by the Company
of its obligations under this Agreement or the Option Agreement;
(g) other than as set forth in Schedule "A" to the Option Agreement, to
the best of the knowledge of the Company no party other than the
Company has any right, title, claim or other Interest in the Optioned
Properties;
(h) none of the execution and delivery of this Agreement, the performance
by the Company of its obligations hereunder, the sale of the Units
hereunder, the issuance of the Common Shares comprising part of the
Units, the issuance of the Warrants and the issuance of the Common
Shares upon the due exercise of the Warrants and the execution and
delivery of the Option Agreement and the performance by the Company of
its obligations thereunder, will conflict with or result in a breach
of (i) any statute, rule or regulation applicable to the Company; (ii)
the constating documents or resolutions of the directors (or any
committee thereof) or shareholders of the Company which are in effect
at the date hereof; (iii) any mortgage, note, indenture, contract,
agreement, instrument, lease or other document to which the Company is
a party or by which it is bound; or (iv) any judgment, decree or order
binding the Company or the property or assets of the Company;
(i) the Financial Statements:
(i) have been prepared in accordance with generally accepted
accounting principles in United States consistently applied;
(ii) present fairly the assets, liabilities and financial condition of
the Company as at September 30, 2000, December 31, 1999, 1998 and
1997, and the results of its operations and the changes in its
financial position for the periods then ended;
(iii) are in accordance with the books and records of the Company; and
(iv) contain and reflect all necessary adjustments for the fair
presentation of the results of operations and the financial
condition of the business of the Company for the periods covered
thereby,
and there has not been any material adverse change in the financial
position of the Company, or its business, assets, liabilities or
undertaking since September 30, 2000 other than as specified in
material change reports filed under applicable securities laws;
(j) the auditors of the Company who have audited the Company's financial
statements for the period ended March 31, 2000 and the years ended
December 31, 1998 and 1999 and who provided their audit report thereon
are independent public accountants as required under applicable
securities laws;
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(k) the Company has filed all necessary tax returns and notices and, to
the best of the knowledge of the Company after due inquiry, has paid
all applicable taxes of whatever nature for all tax years to the date
hereof to the extent such taxes have become due or have been alleged
to be due and the Company is not aware of any tax deficiencies or
interest or penalties accrued or accruing, or alleged to be accrued or
accruing thereon where it might reasonably be expected to result in
any material adverse change in the condition, financial or otherwise,
or in the earnings or business affairs of the Company;
(l) all of the press releases, material change reports or other documents
filed by or on behalf of the Company or by or on behalf of Aurora Gold
Corporation, the predecessor parent of the Company, since June 30,
1997 with any securities regulatory authority, were true and correct
in all material respects, provided full, true and plain disclosure of
all material facts relevant to the Company to the extent required and
did not contain a misrepresentation as at the respective dates of such
filings;
(m) the business and operations of the Company have been and are currently
being conducted in compliance with all applicable laws including,
without limitation, those relating to employee health and safety and
labour standards, and no major capital expenditures will be required
in the foreseeable future to maintain such compliance;
(n) no order ceasing or suspending trading in securities of the Company or
prohibiting the sale of securities by the Company has been issued and
is currently effective and, to the best of the Company's knowledge, no
proceedings for this purpose have been instituted or are pending,
contemplated or threatened;
(o) the authorized capital of the Company consists of 50,000,000 Common
Shares which at the date hereof, and prior to the subscription
contemplated herein, 13,000,000 Common Shares are issued and
outstanding as fully paid and non-assessable;
(p) the Company is not a party to nor has it granted any agreement,
warrant, option or right or privilege capable of becoming an
agreement, for the purchase, subscription or issuance of any Common
Shares or shares of the Company or securities convertible into or
exchangeable for Common Shares or shares of the Company except
pursuant to existing outstanding options, rights, warrants and
obligations as disclosed in Schedule "B" attached hereto;
(q) the attributes of the Units and Warrants will conform in all material
respects with the terms and conditions of this Agreement and the Units
and Warrants will, when issued, constitute valid and binding
obligations of the Company;
(r) the attributes of the Common Shares comply in all respects with the
requirements of the IBCA;
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(s) each of this Agreement and the Option Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
legal valid and binding obligation of the Company enforceable in
accordance with its terms except that: (i) the enforcement thereof may
be limited by bankruptcy, insolvency and other laws affecting the
enforcement of creditors' rights generally, (ii) rights of indemnity,
contribution and waiver of contribution thereunder may be limited
under applicable law and (iii) equitable remedies, including, without
limitation, specific performance and injunctive relief, may be granted
only in the discretion of a court of competent jurisdiction;
(t) there is no person, firm or company acting, or purporting to act at
the request of the Company, who is entitled to any brokerage or
finder's fee in connection with the transactions contemplated herein.
In the event that any person, firm or company acting or purporting to
act for the Company at the request of the Company establishes a claim
for any such brokerage or finder's fee from Billiton or any Affiliate
thereof, the Company covenants to indemnify and hold harmless Billiton
or such Affiliate with respect thereto and with respect to all costs
reasonably incurred in the defence thereof;
(u) there is not in the constating documents of the Company, or in any
agreement, mortgage, note, debenture, indenture or other instrument or
document to which the Company is a party or by which it is bound, any
restriction upon or impediment to the declaration or payment of
dividends by the directors of the Company or the payment of dividends
by the Company to the holders of its Common Shares other than
restrictions relating to the sufficiency of profits from which
dividends may be paid;
(v) Xxxxxxxx Stock Transfer, Inc. at its principal office located in the
City of Scottsdale, Arizona, has been duly appointed as the transfer
agent and registrar for all of the outstanding Common Shares;
(w) the Company has not withheld, and will not withhold from Billiton, any
facts relating to the Company that would reasonably be considered
material to a prospective purchaser of the Units;
(x) at the Closing Time, all necessary corporate action will have been
taken by the Company to create the Units and Warrants and to authorize
the Company to enter into this Agreement and the Option Agreement and
to allot and authorize the issuance of the Common Shares comprised in
the Units and issuable upon the due exercise of the Warrants, and upon
such issuance, the Common Shares comprised in the Units, or issuable
upon the Warrants will be issued as fully paid and non-assessable
Common Shares;
(y) there are no actions, claims, investigations, suits, proceedings or
inquiries (judicial or otherwise) pending or, to the best of the
knowledge of the Company, threatened against or relating to the
Company or any of its properties or assets at law or in equity or
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before or by any governmental or regulatory agency or board, domestic
or foreign, which may, in any way, have a material adverse effect on
the Company's ability to perform its obligations hereunder or under
the Option Agreement or on the condition (financial or otherwise) of
the business, properties, assets, capital, net worth or results of
operations of the Company;
(z) to the best of the knowledge of the Company, none of the directors or
officers of the Company, or any Associate or Affiliate of any of the
foregoing, had, has or intends to have, other than ownership of Common
Shares of the Company, any material interest, direct or indirect, in
the transactions contemplated by this Agreement or the Option
Agreement or in any undisclosed proposed material transaction with the
Company which, as the case may be, materially affects, is material to
or will materially affect the Company;
(aa) all property rights or Interests of the Company in the Optioned
Properties are owned or held by the Company as indicated in Schedule
"A" to the Option Agreement, are in good standing, are valid and
enforceable, are free and clear of any liens, charges or encumbrances
and no royalty is payable in respect of any of them except as set out
in Schedule "A" to the Option Agreement. No other property rights are
necessary for the conduct of the Company's business. There are no
restrictions on the ability of the Company to use, transfer or
otherwise exploit any such property rights or Interests in the
Optioned Property except as set out in Schedule "A" to the Option
Agreement, and the Company does not know of any claim or basis for a
claim that may adversely affect such rights or Interests;
(bb) except as set out in Schedule "A" to the Option Agreement, the Company
has no responsibility or obligation to pay, or have paid on their
behalf, any commission, royalty or similar payment to any person with
respect to its property rights or Interests in the Optioned Properties
as of the Closing Date;
(cc) the Company is in compliance in all material respects with all terms
and provisions of all contracts, agreements, indentures, leases,
policies, instruments and licences in connection with the conduct of
their respective businesses and all such contracts, agreements,
indentures, leases, policies, instruments and licences are valid and
binding in accordance with their terms and in full force and effect,
and no breach or default by the Company or event which, with notice or
lapse or both, could constitute a material breach or material default
by the Company, exists with respect thereto;
(dd) the Company maintains in full force such types and amounts of
insurance issued by issuers of recognized responsibility insuring the
Company with respect to its businesses and properties, in such amounts
and against such losses and risks as is deemed appropriate by the
Company under its present circumstances and as is typical to the
industry in which the Company participates, which insurance coverage
includes, but is not limited to, $5,000,000 of third party liability
insurance; and
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(ee) the Company has obtained all consents and approvals as may be
necessary from the board of directors and the shareholders of the
Company to the transactions contemplated by this Agreement.
5.2. REPRESENTATIONS AND WARRANTIES OF BILLITON
Billiton hereby represents and warrants to the Company:
(a) Billiton has been incorporated and duly organized and is validly
existing and in good standing under the laws of the Netherlands;
(b) Billiton has full power and authority to execute, deliver and perform
this Agreement and the Option Agreement and to subscribe for the
Units. This Agreement and each other agreement entered into by
Billiton in connection with this Agreement constitute valid and
legally binding obligations of Billiton, enforceable against Billiton
in accordance with their respective terms except that: (i) the
enforcement thereof may be limited by applicable bankruptcy,
insolvency and other laws affecting the enforcement of creditors'
rights generally, (ii) rights of indemnity, contribution and waiver of
contribution thereunder may be limited under applicable law and (iii)
equitable remedies including, without limitation, specific performance
and injunctive relief, may be granted only in the discretion of a
court of competent jurisdiction;
(c) The Units will be acquired by Billiton as principal for investment for
Billiton's own account, not as a nominee or agent and not with a view
to the distribution of any part thereof. Billiton has no present
intention of selling, granting any participation in or otherwise
distributing the same;
(d) Except as set forth in this Agreement, no authorization, consent,
approval or other order of, declaration to, or filing with, any
governmental agency or body is required for or in connection with the
valid and lawful authorization, execution and delivery by Billiton of
this Agreement or any other agreements, instruments or documents
entered into by Billiton pursuant to this Agreement, for or in
connection with the valid and lawful authorization, issuance, sale and
delivery of the Units;
(e) Billiton is a resident of the jurisdiction set out on the first page
of this Agreement;
(f) Billiton is not a "U.S. Person" (as such term is defined in Regulation
S under the U.S. Securities Act);
(g) This subscription has not been solicited by Billiton in any other
manner contrary to the U.S. Securities Act and has been executed by
the parties hereto outside of the U.S.;
-15-
(h) Billiton acknowledges that (i) the Units, the Warrants and any Common
Shares issued on exercise of the Warrants (together, the "Combined
Securities") have not been registered under the U.S. Securities Act
and may not be offered or sold in the United States unless registered
under the U.S. Securities Act and the securities laws of all
applicable states of the United States or an exemption from such
registration requirements is available, (ii) the Warrants may not be
exercised by, or on behalf of, a U.S. Person, and (iii) the
certificates representing the Units, the Warrants and the Common
Shares comprising the Units or issuable on exercise of the Warrants
may contain a legend reflecting the restrictions set forth in clauses
(i) or (ii) of this paragraph, however the Company has covenanted to
file a registration statement under the U.S. Securities Act in respect
of the Combined Securities;
(i) Billiton is aware that the Units will be distributed under an
exemption from the registration requirements of the U.S. Securities
Act and states that the Units are not being acquired as a result of
any material information about the affairs of the Company that is not
generally known to the public save knowledge of this particular
transaction;
(j) Billiton has been independently advised as to the applicable resale
restrictions imposed in respect of the Combined Securities by
securities legislation in the jurisdictions in which Billiton resides
and confirms that no representation has been made respecting the
applicable resale restrictions for the Combined Securities in such
jurisdictions and is aware of the risks and other characteristics of
the Combined Securities and of the fact that Billiton may not be able
to resell the Combined Securities except in accordance with the
applicable securities legislation and regulatory policies; and
(k) Billiton as at the date of this Agreement, owns directly or
indirectly, or exercises control or direction over, no common shares
in the capital stock of the Company or securities convertible into
common shares in the capital stock of the Company.
5.3. NON-WAIVER
No investigation made by or on behalf of Billiton, the Company or any of their
respective advisors or agents at any time shall have the effect of waiving,
diminishing the scope of or otherwise affecting any representation or warranty
made herein by the other party hereto or made pursuant hereto. No waiver by
Billiton or the Company of any condition, in whole or in part, shall operate as
a waiver of any other condition.
5.4. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
(a) Notwithstanding any right of Billiton fully to investigate the affairs
of the Company, and notwithstanding any knowledge of facts determined
or determinable by Billiton pursuant to such investigation or right of
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investigation, each of Billiton and the Company has the right to rely
fully upon the representations, warranties, covenants and agreements
of the other of them contained in this Agreement and of their
Affiliates, officers and agents delivered pursuant to this Agreement.
(b) All statements contained in any certificate or other instrument
delivered by or on behalf of any party pursuant hereto or in
connection with the transactions contemplated by this Agreement shall
be deemed to be made by such party hereunder. All representations,
warranties, covenants and agreements herein contained on the part of
each of the parties hereto shall survive the Closing, the execution
and delivery hereunder of share or security transfer instruments or
other documents of title to the Units or the Common Shares and
Warrants comprised in the Units or the Common Shares issuable on
exercise of the Warrants and the payment of the consideration
therefor.
5.5. INDEMNIFICATION
The Company or Billiton, as the case may be (hereinafter referred to as the
"Indemnifying Party"), hereby covenants and agrees to indemnify and save
harmless Billiton or the Company, as the case may be (hereinafter referred to as
the "Indemnified Party"), effective as and from the Closing, from and against
any claims, demands, actions, causes of action, damage, loss, costs, liability
or expense, including reasonable legal expenses (hereinafter in this Section 5.5
called "Claims") which may be made or brought against the Indemnified Party
and/or which it may suffer or incur as a result of, in respect of or arising out
of any non-fulfilment of any covenant or agreement on the part of the
Indemnifying Party under this Agreement or any incorrectness in or breach of any
representation or warranty of the Indemnifying Party contained herein or in any
certificate or other document furnished by the Indemnifying Party pursuant or in
relation thereto. The foregoing obligation of indemnification in respect of such
claims shall be subject to the requirement that the Indemnifying Party shall, in
respect of any Claim made by any third party, be afforded an opportunity at its
sole expense to resist, defend and compromise the same in a timely manner.
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ARTICLE 6 - COVENANTS
6.1. AFFIRMATIVE COVENANTS
The Company covenants that:
(a) Regulatory Approvals. The Company has taken, or will cause to be
---------------------
taken, all steps necessary to obtain all consents and approvals from
applicable regulatory authorities, and has made or will cause to be
made all such regulatory filings as may be necessary, advisable or
reasonably requested by Billiton, in connection with each and every
one of the transactions contemplated under this Agreement and the
Option Agreement.
(b) Use of Unit Proceeds. The Company will expend or cause to be expended
---------------------
$475,000 of the Unit Proceeds in accordance with Schedule "C" attached
hereto.
(c) Registration Statement. As soon as possible following attaining a "no
-----------------------
comment" position from the staff of the U.S. Securities and Exchange
Commission with respect to the Company's Registration Statement on
Form 20-F dated June 19, 2000, as amended, the Company will (i) file a
Registration Statement on Form F-1 to register the Common Shares
comprised in the Units and the Common Shares issuable on exercise of
the Warrants and will thereafter maintain such Registration Statement
effective for so long as such Common Shares remain subject to resale
restrictions in the United States and (ii) will jointly file with its
listing NASD member/broker Form 15-2c-11 with the National Association
of Securities Dealers for listing and trading of its Common Shares on
the OTCBB during February 2001.
(d) Payment of Expenses. All costs and expenses including, without
---------------------
limitation, the fees and disbursements of legal counsel incurred in
connection with this Agreement and the Option Agreement and the
transactions contemplated hereby shall be paid by the party incurring
such expenses.
(e) No Amendment to Agreements. The Company covenants with Billiton that
----------------------------
it will not amend or agree to any amendment of any agreement which in
any way relates, or otherwise affects, the Optioned Properties without
the prior written consent of Billiton.
6.2. CONFIDENTIALITY
For a period of one year from the Closing Date, the parties to this Agreement
shall keep confidential all books, records, files and other information supplied
by any party to one of the other parties or their employees, agents or
representative in connection with this Agreement or the Option Agreement or in
respect of the activities carried out on any of the Optioned Property by a
party, or related to the sale of minerals, or other products derived from such
Optioned Property, including all analyses, reports, studies or other documents
-18-
prepared by a party or its employees, agents or representatives, which contain
information from, or otherwise reflects such books, records, files or other
information. The parties shall not and shall ensure that their employees, agents
or representatives do not disclose, divulge, publish, transcribe, or transfer
such information, all or in part, without the prior written consent of the other
parties, which consent may not be arbitrarily withheld and which prohibition
shall not apply to such information or any part thereof to the extent that:
(a) prior to its receipt by a party such information was already in the
possession of such party or its employees, agents or representatives;
(b) it is required to be publicly disclosed pursuant to applicable
securities or corporate laws;
(c) such information becomes generally disclosed to the public, other than
as a consequence of a breach hereof by one of the parties hereto; or
(d) such information is provided to a third party in the ordinary course
of business and such third party enters into a confidentiality
agreement substantially in the form of this Section 6.2 without this
subsection (d).
6.3. CO-OPERATION BY BILLITON
Billiton shall co-operate with the Company in obtaining all necessary consents
and approvals referred to in Section 3.1(d) of this Agreement.
6.4. MAINTENANCE OF BILLITON'S SHARE OWNERSHIP
Except as otherwise provided below and provided that the Option Agreement is in
good standing, the Company will perform and comply with the covenants set forth
in this Section 6.4 from the date of the Closing and thereafter until the later
of the fourth anniversary of the Closing Date and the second occasion on which
Billiton elects not to acquire Securities, which the Company is prepared, under
applicable securities laws and the terms of this Agreement, to issue to
Billiton, after receiving a Notice (as defined in Section 6.4(b)) from the
Company:
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(a) Pre-Emptive Rights. In the event that the Company proposes to issue
-------------------
any equity securities, including securities convertible or
exchangeable for equity securities, (the "Securities") pursuant to a
private placement or public offering (provided however that if such
issuance of Securities involves securities convertible into or
exchangeable for Common Shares, such Securities will be deemed to have
been converted into or exchanged for equity securities for the purpose
of determining whether such issuance falls within this subsection),
Billiton or an Affiliate designated by Billiton shall have a right to
acquire from the Company on the terms set out in subsection (b), such
number of Securities so that immediately after the consummation of
such issuance Billiton's Outstanding Interest (as hereinafter defined)
remains the same as immediately prior to the consummation of such
issuance and such acquisition. Notwithstanding anything in this
subsection to the contrary, Billiton shall not have the right to
maintain its Outstanding Interest with respect to any Securities
issued by the Company, under (i) an employees' stock plan and (ii) in
lieu of cash payments to employees or providers of services.
(b) Notice. Within 5 Business Days after receipt of notice ("Notice") from
------
the Company in reasonable detail of the proposed issuance, Billiton
shall, if it elects to acquire Securities pursuant hereto, give
written notice to the Company of its irrevocable commitment to
purchase or cause an Affiliate of Billiton to purchase such Securities
from the Company simultaneously with the consummation of such proposed
issuance at a price and on other terms and conditions equal to the
price paid and the other bona fide terms and conditions agreed to by
the other purchasers of such Securities provided the Company may
require that Billiton's or such Affiliate's participation in such
proposed issuance of Securities does not result in the Company being
required to prepare any additional disclosure documents which would
not have been required if Billiton or such Affiliate did not
participate and the Company may consequently indicate to Billiton or
such Affiliate as a result of such requirement.
(c) Meaning of "Outstanding Interest". As used herein, the term
------------------------------------
"Outstanding Interest" means:
(i) the percentage of the outstanding Securities of the Company
represented by the aggregate Securities held by Billiton and any
Affiliate of Billiton upon Closing. For greater certainty, the
Company and Billiton hereby agree and acknowledge that, on the
Closing Date, Billiton's Outstanding Interest shall be eleven
point six five percent (11.65%);
(ii) subject to Section 6.4(d), in the event Billiton elects at any
time not to acquire Securities after receiving a Notice from the
Company pursuant to subsection (b) above, the percentage of
outstanding Securities of the Company represented by the
Securities held by Billiton immediately following the
consummation of the issuance of Securities for which the Company
had given Billiton a Notice and in which Billiton declined to
participate; or
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(iii) in the event Billiton or any Affiliate of Billiton sells,
transfers or otherwise disposes of any Securities of the Company
other than to Billiton or an Affiliate of Billiton, the
percentage of the outstanding Securities of the Company
represented by the Securities held by Billiton together with such
Affiliates shall be reduced by the number of Securities sold or
otherwise disposed of by Billiton and/or such Affiliates.
(d) Securities Carried Forward. In the event that any distribution of
----------------------------
Securities by the Company to Billiton or an Affiliate of Billiton
pursuant to the provisions of Section 6.4(a) would not be exempt from
the registration requirements of applicable securities laws or the
Company otherwise declines to issue such Securities to Billiton
pursuant to the provisions of Section 6.4(b), then in either event,
such number of Securities required to be offered by the Company to
Billiton or an Affiliate of Billiton pursuant to Section 6.4(a) shall
be carried forward and included in any subsequent offering of
Securities by the Company to Billiton pursuant to Section 6.4(a) and,
for greater certainty, the provisions of Section 6.4(c)(ii) shall not
apply to any Securities not acquired by Billiton or an Affiliate of
Billiton pursuant to Section 6.4(a) for so long as such offer of
Securities is required to be carried forward pursuant hereto.
(e) The provision of this Section 6.4 shall no longer be operative if
Billiton's outstanding interest shall at any time be less than five
percent (5%).
ARTICLE 7 - MEDIATION
7.1. MEDIATION
All disputes arising out of or in connection with this Agreement or in respect
of any defined legal relationship associated herewith or derived hereunder
shall, subject to Section 7.2, be referred to a mediator chosen by mutual
agreement of both parties. The mediator shall be a person with appropriate
technical competence to assist the parties to resolve their dispute. The
mediator agreed by the parties shall assist the parties to resolve their dispute
in accordance with the Center for Dispute Resolution ("CEDR") Model Mediation
Procedure, which mediation process shall be non-binding. In the event that the
parties are unable to reach agreement on a choice of mediator or are otherwise
unable to resolve their dispute through the use of such mediator, then either
party shall be free to have the dispute resolved through the Courts of England.
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7.2. INTERIM RELIEF
Nothing contained in this Article shall be interpreted as restricting the right
of either Billiton or the Company to seek interim relief (whether legal,
equitable or otherwise) from a court of competent jurisdiction, pending formal
resolution of any dispute between the parties hereto.
ARTICLE 8 - FURTHER CO-OPERATION
8.1. CO-OPERATION
Each of the Company and Billiton:
(a) recognize the possible mutual advantages to be realized from their
co-operation in the conduct of the exploration and development of
mineral properties in the Republic of Tunisia by or in any project
involving the Company or any Affiliate of the Company; and
(b) agree to co-operate and to consult with each other with respect to
exploration and acquisition opportunities coming to the attention of
either party in the Republic of Tunisia.
8.2. EXCLUSIVITY
The parties hereto agree that for a period expiring on the later of 3 years from
the date hereof and the termination of the Option Agreement or any joint venture
agreement contemplated therein,
(a) the Company agrees, and agrees to cause any Affiliate of the Company,
to offer to Billiton the right to participate in mineral prospects in
the Republic of Tunisia identified or acquired by the Company on terms
and conditions substantially the same as are contained in the Option
Agreement; and
(b) Billiton agrees, and agrees to cause any Affiliate of Billiton, to
offer to the Company the right to participate in any further mineral
prospects in the Republic of Tunisia identified or acquired by
Billiton on terms and conditions substantially the same as contained
in the Option Agreement.
-22-
ARTICLE 9 - GENERAL
9.1. PUBLIC NOTICES
All public notices to third parties and all other publicity concerning the
transactions contemplated by this Agreement, shall be jointly planned and
co-ordinated by the parties hereto and no parties hereto shall act unilaterally
in this regard without the prior approval of the others of them, such approval
not to be unreasonably withheld, unless such disclosure shall be required to
meet timely disclosure obligations of either Billiton or the Company under
applicable securities laws and stock exchange rules in circumstances where prior
consultation with the other parties is not possible in any manner or in any
event.
9.2. TIME
Time shall be of the essence hereof.
9.3. NOTICES
Any notice or other writing required or permitted to be given hereunder or for
the purposes hereto to any party shall be sufficiently given if delivered
personally, or if sent by prepaid registered mail or if transmitted by facsimile
or other form of recorded communication tested prior to transmission to such
party:
(a) In the case of a notice to the Company at:
Aurora Metals (BVI) Ltd.
Xxxxx 000
0 Xxx Xxxxxxxx Xxxx
Xxxxxx, XX0 0XX
Xxxxxx Xxxxxxx
Attention: Xxxx Xxxxx
Facsimile No. 011-44-207-581-4445
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(b) In the case of a notice to Billiton, at:
Billiton E&D 3 B.V.
c/o Billiton International Development Limited
0 - 0 Xxxxxx
Xxxxxx, XX0X 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxx Xxxxx
Facsimile No. 011-44-207-747-3909
with a copy to:
XxXxxxxx Xxxxxxxx
Barristers and Solicitors
X.X. Xxx 00000, Xxxxxxx Xxxxxx
0000 - 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X I K2
Attention: Xxxxxx X. Xxxxxxxx
Facsimile No. (000) 000-0000
or at such other address or addresses as the party to whom such writing is to be
given shall have last notified the party giving the same in the manner provided
in this Section 9.3. Any notice delivered to the party to whom it is addressed
hereinbefore provided shall be deemed to have been given and received on the day
it is so delivered at such address, provided that if such day is not a Business
Day, then the notice shall be deemed to have been given and received on the
second Business Day next following such day. Any notice mailed as aforesaid
shall be deemed to have been given and received on the seventh Business Day next
following the date of its mailing. Any notice transmitted by facsimile or other
form of recorded communication shall be deemed to be given and received on the
first Business Day after its transmission.
9.4. ASSIGNMENT
The rights and obligations hereunder relating to the subscription for the Units
and this Agreement are not assignable other than by Billiton to an Affiliate of
Billiton. Subject thereto, this Agreement shall enure to the benefit of and be
binding upon Billiton and the Company and their respective successors (including
any successor by reason of amalgamation, merger or other corporate
reorganization of either party) and permitted assigns. For greater certainty,
nothing herein shall prevent or limit Billiton from transferring, disposing of
or otherwise dealing with its shareholdings in the Company.
-24-
9.5. SEVERABILITY
Each and every term, condition and provision of this Agreement is and shall be
severable one from the other, and in the event that any term, condition or
provision hereof is at any time declared by a court of competent jurisdiction to
be void, invalid or unenforceable, same shall not extend to invalidate, make
void or unenforceable any other term, condition or provision of this Agreement.
9.6. FURTHER ASSURANCES
The parties hereto shall with reasonable diligence do all such things and
provide all such reasonable assurances and assistance as may be required to
consummate the transactions contemplated hereby, and each such party shall
provide such further documents or instruments required by the other party as may
reasonably be necessary or desirable to give effect to the terms and purpose of
this Agreement and carry out its provisions, whether before or after the
Closing.
9.7. COUNTERPARTS
This Agreement may be simultaneously executed and delivered in counterparts,
each of which when so executed and delivered shall be deemed to be an original
and such counterparts together shall constitute one and the same agreement.
9.8. EXECUTION BY TELECOPY
This Agreement may be executed by the parties and transmitted by telecopy and if
so executed and transmitted this Agreement will be for all purposes as effective
as if the parties had delivered an executed original Agreement.
-25-
9.9. GOVERNING LAW
This Agreement, including all Schedules annexed hereto and all other agreements,
documents and other instruments delivered in connection herewith, shall be
governed by and construed in accordance with the laws of England.
IN WITNESS WHEREOF the parties have hereunto duly executed this Agreement as of
the date and year first above written.
AURORA METALS (BVI) LIMITED
By:
--------------------------------------
BILLITON E&D 3 B.V.
By:
--------------------------------------
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