EXHIBIT 10.16
SHARE PURCHASE AGREEMENT
MADE
AUGUST 29, 2002
AMONG
VICEROY MINERALS CORPORATION
AND
408178 BRITISH COLUMBIA LTD.
AND
VICEROY RESOURCE CORPORATION
AND
VISTA GOLD CORP.
AND
GRANGES INC.
IN RESPECT OF THE SHARES OF
MINERA PAREDONES AMARILLOS, S.A. DE C.V.
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS AND INTERPRETATION..........................................................2
1.1 Definitions...........................................................................2
1.2 Interpretation........................................................................7
1.3 Schedules.............................................................................8
ARTICLE 2 - PURCHASE AND SALE.......................................................................8
2.1 Purchase and Sale of Purchased Shares.................................................8
2.2 Purchase Price........................................................................8
2.3 Payment of the Purchase Price.........................................................9
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES..........................................................9
3.1 Representations and Warranties of VMC and HoldCo......................................9
(1) Corporate Status and Authority.................................................9
(2) No Default....................................................................10
(3) Share Capital.................................................................10
(4) Financial Matters.............................................................11
(5) Material Changes..............................................................11
(6) Banking.......................................................................12
(7) Material Contracts............................................................12
(8) Assets and Property...........................................................12
(9) Hazardous Materials and Environmental Laws....................................14
(10) Legal and Regulatory Matters..................................................15
(11) Taxation......................................................................16
(12) Employment Matters............................................................16
(13) Binding Agreement.............................................................17
(14) Ownership of Purchased Shares.................................................17
(15) Residency.....................................................................18
(16) No Commission.................................................................18
(17) Approvals.....................................................................18
(18) Securities Laws...............................................................18
3.2 Representations and Warranties of Viceroy............................................21
(1) Corporate Status and Capacity.................................................22
(2) No Default....................................................................22
(3) Binding Agreement.............................................................22
(4) Ownership of VMC and HoldCo...................................................22
(5) No Commission.................................................................23
(6) Approvals.....................................................................23
3.3 Representations and Warranties of Vista and Granges..................................23
(1) Corporate Status and Capacity.................................................23
(2) No Default....................................................................23
(3) Binding Agreement.............................................................24
(4) Share Capital.................................................................24
(5) Listing of Common Shares......................................................24
(6) Reporting Issuer Status.......................................................24
(7) Qualifying Issuer Status......................................................24
(8) No Commission.................................................................24
(9) Disclosure Documents..........................................................24
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(10) Material Changes..............................................................25
(11) Legal and Regulatory Matters..................................................25
(12) Approvals.....................................................................26
ARTICLE 4 - COVENANTS..............................................................................26
4.1 Covenants of VMC, HoldCo and Viceroy.................................................26
(1) Agreement Date to Closing.....................................................26
(2) At Closing....................................................................28
(3) Post-Closing..................................................................28
4.2 Covenants of Vista and Granges.......................................................29
(1) General.......................................................................29
(2) At Closing....................................................................29
(3) Post-Closing..................................................................29
ARTICLE 5 - CONDITIONS PRECEDENT...................................................................30
5.1 Mutual Conditions Precedent..........................................................30
5.2 Conditions for the Benefit of VMC, HoldCo and Viceroy................................30
5.3 Conditions for the Benefit of Vista and Granges......................................32
ARTICLE 6 - SURVIVAL OF REPRESENTATIONS AND INDEMNITY..............................................36
6.1 Survival of Representations, Warranties and Covenants................................36
6.2 Indemnity............................................................................36
ARTICLE 7 - GENERAL................................................................................36
7.1 Time and Place of Closing............................................................36
7.2 Notices..............................................................................36
7.3 Confidentiality and Disclosure.......................................................37
7.4 Dispute Resolution and Arbitration...................................................38
7.5 Governing Law........................................................................38
7.6 Binding Effect.......................................................................38
7.7 Time of Essence......................................................................38
7.8 Assignment...........................................................................38
7.9 Further Assurances...................................................................39
7.10 Expenses.............................................................................39
7.11 Entire Agreement.....................................................................39
7.12 Counterparts and Facsimile...........................................................40
SCHEDULE "A" - EQUIPMENT.............................................................A-1
SCHEDULE "B" - LANDS.................................................................B-1
SCHEDULE "C" - MATERIAL CONTRACTS....................................................C-1
SCHEDULE "D" - MINERAL RIGHTS........................................................D-1
SCHEDULE "E" - PERMITS AND LICENCES..................................................E-1
SCHEDULE "F" - PERMITTED ENCUMBRANCES................................................F-1
SCHEDULE "G" - FORM OF WARRANT CERTIFICATE...........................................G-1
SCHEDULE "H" - REQUIRED CONSENTS AND APPROVALS.......................................H-1
SCHEDULE "I" - FINANCIAL STATEMENTS..................................................I-1
SCHEDULE "J" - BANK FACILITIES.......................................................J-1
SCHEDULE "K" - ENVIRONMENTAL ORDERS OR AGREEMENTS....................................K-1
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SHARE PURCHASE AGREEMENT
THIS AGREEMENT made the 29th day of August, 2002
AMONG:
VICEROY MINERALS CORPORATION, a company amalgamated under the
laws of British Columbia and having an office at Xxxxx 000,
000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X
0X0
("VMC")
AND:
000000 XXXXXXX XXXXXXXX LTD., a company incorporated under the
laws of the British Columbia and having an office at Xxxxx
000, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx
X0X 0X0
("HOLDCO")
AND:
VICEROY RESOURCE CORPORATION, a company amalgamated under the
laws of the British Columbia and having an office at Xxxxx
000, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx
X0X 0X0
("VICEROY")
AND:
VISTA GOLD CORP., a company continued under the laws of the
Yukon Territory and having an office at Suite 5, 0000 Xxxxxxx
Xxxxxxx, Xxxxxxxxx, Xxxxxxxx, X.X.X. 00000
("VISTA")
AND:
GRANGES INC., a company incorporated under the laws of the
British Columbia and having its registered and records office
at 000 Xxxxxxxxxx Xxxxxx, 000 Xxxxxxx Xxxxxx, X.X. Xxx 0000,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx X0X 0X0
("GRANGES")
WHEREAS:
A. VMC and HoldCo are the legal and beneficial owners of the
Purchased Shares (as hereinafter defined);
B. Vista and Granges have agreed to purchase and VMC and HoldCo
have agreed to sell their interests in the Purchased Shares (as hereinafter
defined) on the terms, at the time and subject to the conditions set forth
herein; and
C. VMC is a direct wholly-owned subsidiary of Viceroy, HoldCo is
an indirect wholly-owned subsidiary of Viceroy and Granges is a direct
wholly-owned subsidiary of Vista;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement and the recitals hereto, unless the context
otherwise requires, the following terms shall have the following respective
meanings:
(a) "ASSETS" means the Equipment, the Lands, the Mineral Rights,
the Permits and Licences, the Surface Rights, the Technical
Data and all of Paredones' right, title and interest in and to
all other assets, not otherwise specifically mentioned or
defined in this Agreement used by or relating to the Business;
(b) "BUSINESS" means all business carried on by Paredones in
connection with the Assets, including, without limitation, the
mineral exploration and mining business currently carried on
by Paredones in connection with the Assets;
(c) "BUSINESS DAY" means any day, other than Saturday, Sunday or a
statutory holiday in the Province of British Columbia;
(d) "CLAIM" means any claim, demand, action, cause of action,
damage, loss, cost, liability or expense, including, without
limitation, reasonable professional fees and all costs
incurred in investigating or pursuing any of the foregoing or
any proceeding relating to any of the foregoing;
(e) "CLOSING" means the closing of the purchase and sale of the
Purchased Shares contemplated herein;
(f) "CLOSING DATE" means August 29, 2002 or such other date as the
parties hereto may agree;
(g) "CONSTATING DOCUMENTS" means the memorandum, articles,
articles of incorporation, articles of continuance or articles
of amalgamation pursuant to which a corporation is
incorporated, continued or amalgamated, as the case may be,
together with any amendments thereto, and the by-laws of such
corporation and any shareholders' agreement which has been
executed by such corporation or which governs in whole or in
part such corporation's affairs;
(h) "ECHO BAY NET PROFIT OBLIGATION" means the 2% net profits
royalty on certain of the mining concessions comprising the
Mineral Rights (as described in item 3 of Part A of SCHEDULE
"C") governed by the terms of a letter agreement dated October
15, 1999, as amended by an amending agreement dated December
8, 1999, among Paredones, Echo Bay Mexico, S.A. de C.V.,
408178 British Columbia Ltd. and Minera Baja S.A. de C.V.
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and as referred to in an agreement entered into solely for the
purposes of registering such royalty with the Public Registry
of Mining in Mexico dated as of January 1, 2000 among Echo Bay
Mexico, S.A. de C.V., HoldCo and Paredones;
(i) "ECHO BAY SERVICES AGREEMENT" means the administrative,
accounting, management, sales, production, contract,
supervision, consulting and monitoring agreement entered into
on August 4, 1995 between Paredones and Servicios Echo Bay,
S.A. de C.V.;
(j) "ENCUMBRANCES" means, whether or not registered or recorded,
any and all:
(i) mortgages, assignments of rent, liens, licences,
leases, charges, security interests, hypothecations,
and pledges whether fixed or floating against
property (whether real, personal, mixed, tangible or
intangible), or conditional sales contracts or title
retention agreements or equipment trusts or financing
leases relating thereto, or any subordination to any
right or claim of others in respect thereof;
(ii) claims, interests and estates against or in property
(whether real, personal, mixed, tangible or
intangible) including easements, rights-of-way,
servitudes or other similar rights in property
granted to or reserved or taken by any person or any
governmental body or authority;
(iii) any option or other right to acquire, or acquire any
interest in, any property;
(iv) any royalties; and
(v) other encumbrances of whatsoever nature and kind
against property (whether real, personal, mixed,
tangible or intangible);
(k) "ENVIRONMENTAL CONTAMINATION" means the discharge, emission,
leaking, spilling, leaching, release or discharge into the
environment, including, without limitation, land, air and
water, of Hazardous Materials or other material, so as to
result in any harm, damage or hazard to the environment or to
any person, property or thing;
(l) "ENVIRONMENTAL LAWS" means all Laws or lawful requirements of
any Governmental Authority with respect to environmental and
health protection or regulating Hazardous Materials;
(m) "EQUIPMENT" means the equipment listed and described in
SCHEDULE "A" hereto and all supplies and all machinery,
equipment, automobiles, trucks, bulldozers, shovels, trailers,
tractors, office equipment, computer hardware and software,
yard equipment, furniture, furnishings and tools of all kinds
owned or leased by Paredones or otherwise used or intended for
use in connection with the Business;
(n) "FINANCIAL STATEMENTS" means the unaudited balance sheet of
Paredones as at July 31, 2002 attached hereto as SCHEDULE "I";
(o) "GOVERNMENTAL AUTHORITY" means any federal, provincial, state,
municipal, county or regional governmental or
quasi-governmental authority, domestic or foreign, and
includes any ministry, department, commission, bureau, board,
administrative or other agency, regulatory body or
instrumentality thereof, including, without limitation, any
securities commission, stock exchange or other securities
regulatory authority, whether a self-regulating body or
otherwise;
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(p) "GOVERNMENTAL AUTHORIZATIONS" means all authorizations,
approvals, licenses, permits or quotas issued to Paredones in
connection with the Business or any of the Assets by any
Governmental Authorities;
(q) "HAZARDOUS MATERIALS" means any asbestos materials, urea
formaldehyde, explosives, radioactive materials, pollutants,
contaminants, hazardous substances, corrosive substances,
toxic substances, special wastes or wastes of any kind,
including, without limitation, compounds known as
chlorobiphenyls and any substance the storage, manufacture,
disposal, treatment, generation, use, transport, remediation
or release of which into the environment is prohibited,
controlled or licensed under Environmental Laws;
(r) "LANDS" means the surface interest in lands and premises
described in the agreements listed and described in SCHEDULE
"B" hereto, and all plant, improvements, appurtenances and
fixtures situated thereon or forming part thereof, including
without limitation, all buildings situated thereon within,
under or upon such lands and premises;
(s) "LAWS" means all applicable laws (including the common law),
legal provisions, by-laws, rules, rulings, regulations,
orders, ordinances, notices, injunctions, directions, decrees,
treaties, statutes and judgments or other requirements of any
Governmental Authority, all as in force at the date of this
Agreement;
(t) "LIABILITIES" means any and all debts, liabilities,
obligations, claims or demands of whatsoever nature or kind
and whether accrued, contingent, absolute, conditional or
otherwise and whether or not determined or determinable;
(u) "MATERIAL CONTRACTS" means the agreements listed and described
in SCHEDULE "C", the Surface Rights Agreements and any
agreement, whether written or oral, which is material to the
Business and for the purposes of this Agreement, a contract
shall be a Material Contract if:
(i) performance of any right or obligation by any party
to such contract (other than a contract with a
customer in the ordinary course of business) may
occur over a period of time greater than one year;
(ii) an expenditure, receipt, or transfer or other
disposition of property, with a value of greater than
$25,000 may arise under such contract; or
(iii) such contract has been entered into other than in the
ordinary course of business;
(v) "MEXICO" means the United Mexican States;
(w) "MINERAL RIGHTS" means all water, water xxxxx, water rights,
mining concessions, mining concession applications, leases,
mineral interests, easements, reserves or any other mineral
interests relating to the Business, including, without
limitation, the mining concessions and water concession listed
and described in SCHEDULE "D" hereto;
(x) "MISREPRESENTATION" means:
(i) an untrue statement of a material fact; or
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(ii) an omission to state a material fact that is required
to be stated, or necessary to prevent a statement
that is made from being false or misleading in the
circumstances in which it was made;
(y) "PAREDONES" means Minera Paredones Amarillos, S.A. de C.V., a
company incorporated under the laws of Mexico;
(z) "PERMITS AND LICENCES" means the permits and licences listed
and described in SCHEDULE "E" hereto and all permits,
licences, consents, orders, authorizations, directions,
approvals, privileges, waivers, exemptions, certificates,
rulings or other concessions, granted by or entered into with
any Governmental Authority, or otherwise held by Paredones,
relating to the operation, ownership or leasing of the
Purchased Assets;
(aa) "PERMITTED ENCUMBRANCES" means (i) Encumbrances for taxes,
assessments or governmental charges or levies on property not
yet due or delinquent, (ii) easements, encroachments and other
minor imperfections of title which do not, individually or in
the aggregate, materially detract from the value or impair the
use or marketability of the Assets or any property whether
real or personal, (iii) Encumbrances granted by Vista or
Granges, and (iv) Encumbrances described in SCHEDULE "F"
hereto;
(bb) "PERSON" means an individual, sole proprietorship,
partnership, unincorporated association, unincorporated
syndicate, unincorporated organization, trust, body corporate,
a trustee, executor, administrator or other legal
representative, and any Governmental Authority;
(cc) "PURCHASE PRICE" has the meaning ascribed thereto in Section
2.2;
(dd) "PURCHASED SHARES" means the 103,913,986 issued and
outstanding common shares with MexCy $1.00 par value in the
capital of Paredones being sold by VMC and HoldCo and
purchased by Vista and Granges under this Agreement;
(ee) "SEC" means the United States Securities and Exchange
Commission;
(ff) "SECURITIES LAWS" means the applicable securities laws of the
Province of British Columbia and the respective regulations
made and forms prescribed thereunder, together with all
applicable published policy statements and blanket orders and
rulings of the British Columbia Securities Commission and the
Canadian Securities Administrators;
(gg) "STOCK EXCHANGES" means the Toronto Stock Exchange and the
American Stock Exchange;
(hh) "SURFACE RIGHTS" means any right, interest or benefit
conferred upon Paredones pursuant to the terms of any Surface
Rights Agreement;
(ii) "SURFACE RIGHTS AGREEMENTS" means the agreements listed and
described in SCHEDULE "C" hereto under the heading "Surface
Rights Agreements" and any other purchase, easement, right of
way, lease or like agreement between or among Paredones and
the owners of any surface interests associated with the Lands
and the Mineral Rights;
(jj) "TAXES" include, without limitation, all taxes, duties, fees,
premiums, assessments, imposts, levies and other charges of
any kind whatsoever imposed by any Governmental
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Authority, together with all interest, penalties, fines,
additions or taxes or other additional amounts imposed in
respect thereof (including, without limitation, those levied
on, or measured by, or referred to as income, gross receipts,
profits, capital, transfer, land transfer, sales, goods and
services, use, value-added, excise, stamp, withholding,
business, franchising, property, payroll, employment, health,
social service, education and social security taxes, all
surtaxes, all customs duties and import and export taxes, all
licence, franchise and registration fees, and all unemployment
insurance, health insurance and Canada and other government
pension plan premium);
(kk) "TECHNICAL DATA" means all technical information and data in
the possession or control of Paredones, VMC, HoldCo or
Viceroy, including without limitation, all geological,
geophysical, environmental and engineering reports, studies,
maps, drawings, electronic and computer programs and
databases, drill core cuttings and samples, from, related to
or in any way pertaining to the Business, and expressly
including all such data located in Viceroy's offices in
Vancouver, British Columbia; in Paredones' offices in La Paz,
Mexico; in Casa Plaza, San Antonio in Baja California Sur,
Mexico; and in the buildings and structures known as Casa Azul
and Casa Verde at the project site in Baja California Sur,
Mexico;
(ll) "UNITED STATES" or "U.S." means the United States of America;
(mm) "U.S. EXCHANGE ACT" means the SECURITIES EXCHANGE ACT OF 1934,
as amended, of the United States of America;
(nn) "U.S. PERSON" means a U.S. person as that term is defined in
Regulation S under the U.S. Securities Act;
(oo) "U.S. SECURITIES ACT" means the SECURITIES ACT OF 1933, as
amended, of the United States of America;
(pp) "U.S. SECURITIES LAWS" means the U.S. Securities Act, the U.S.
Exchange Act, the securities laws of each applicable state of
the United States and the regulations promulgated under each
such act or law;
(qq) "VISTA SECURITIES" means collectively, the Vista Shares, the
Vista Warrants and the Vista Warrant Shares;
(rr) "VISTA SHARES" means the common shares in the capital of Vista
to be issued to Viceroy at the Closing as partial
consideration for the Purchased Shares;
(ss) "VISTA UNITS" means the units of Vista to be issued to Viceroy
at the Closing as partial consideration for the Purchased
Shares, consisting of one Vista Share and one Vista Warrant
and having a purchase price of $4.95 per Vista Unit, such
price being equal to 90% of the average weighted closing price
per share of the common shares in the capital of Vista on the
Toronto Stock Exchange on the five trading days immediately
preceding the date of this Agreement;
(tt) "VISTA WARRANTS" means the common share purchase warrants of
Vista to be issued to Viceroy at the Closing as partial
consideration for the Purchased Shares and governed by the
terms of the Warrant Certificate, entitling the holder of each
whole warrant to purchase one Vista Warrant Share at any time
prior to 4:30 p.m. (Vancouver time) August 29, 2004 for an
exercise price of $6.87, such exercise price being equal to
125%
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of the weighted average closing price per share of the common
shares in the capital of Vista on the Toronto Stock Exchange
on the five trading days immediately preceding the date of
this Agreement;
(uu) "VISTA WARRANT SHARES" means the common shares in the capital
of Vista issuable to holders of Vista Warrants upon the
exercise of the Vista Warrants in accordance with their terms;
and
(vv) "WARRANT CERTIFICATE" means the warrant certificate governing
the terms of the Vista Warrants in substantially in the form
attached as SCHEDULE "G" hereto.
1.2 INTERPRETATION
For the purposes of this Agreement, except as otherwise
expressly provided:
(a) "THIS AGREEMENT" means this Agreement, including the recitals
hereto, and not any particular Article, Section, Subsection or
other subdivision or recital hereof, and includes any
agreement, document or instrument entered into, made or
delivered pursuant to the terms hereof, as the same may, from
time to time, be supplemented or amended and in effect;
(b) the words "HEREOF", "HEREIN", "HERETO" and "HEREUNDER" and
other words of similar import refer to this Agreement as a
whole and not to any particular Article, Section, Subsection,
or other subdivision or recital hereof;
(c) the division of this Agreement into Articles, Sections,
Subsections, and other subdivisions or recitals, and the
insertion of headings are for convenience of reference only
and are not intended to interpret, define or limit the scope,
extent or intent of this Agreement or any provision hereof;
(d) all references to currency in this Agreement are to lawful
money of Canada and all amounts to be calculated or paid
pursuant to this Agreement are to be calculated in lawful
money of Canada;
(e) a reference to a statute in this Agreement includes all
regulations or rules made thereunder, all amendments to the
statute, regulations or rules in force as at the date of this
Agreement, and any statutes, regulations or rules that
supplement or supersede such statutes, regulations or rules;
(f) the singular of any term includes the plural, and vice versa,
and the use of any term is generally applicable to any gender
and, where applicable, a body corporate, firm or other entity,
and the word "OR" is not exclusive and the word "INCLUDING" is
not limiting, whether or not non-limiting language (such as
"WITHOUT LIMITATION" or "BUT NOT LIMITED TO" or words of
similar import) is used with reference thereto;
(g) in the event that any date on which any action is required to
be taken hereunder by any of the parties hereto is not a
Business Day, such action shall be required to be taken on the
next succeeding day which is a Business Day;
(h) all references to "APPROVAL", "AUTHORIZATION" or "CONSENT" in
this Agreement means written approval, authorization or
consent; and
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(i) whenever a representation, warranty or covenant with respect
to the existence or absence of facts or circumstances is
qualified by any of the phrases "to the knowledge of", "of
which a party is aware", "party is not aware of" or words of
similar nature, it is intended to indicate that no information
has come to the attention of the party making the
representation, warranty or covenant which would give the
party actual knowledge that such facts or circumstances do not
exist or are absent, without such party having undertaken any
special or independent investigation to determine the
existence or absence of such facts or circumstances other than
an examination of the party's files, documents, data and other
information within the party's possession.
1.3 SCHEDULES
The following schedules are attached to this Agreement and
shall be deemed to be incorporated in and form a part hereof:
SCHEDULE TITLE
Schedule "A" Equipment
Schedule "B" Lands
Schedule "C" Material Contracts
Schedule "D" Mineral Rights
Schedule "E" Permits and Licences
Schedule "F" Permitted Encumbrances
Schedule "G" Form of Warrant Certificate
Schedule "H" Required Consents and Approvals
Schedule "I" Financial Statements
Schedule "J" Bank Facilities
Schedule "K" Environmental Orders or Agreements
ARTICLE 2
PURCHASE AND SALE
2.1 PURCHASE AND SALE OF PURCHASED SHARES
Subject to the terms and conditions contained in this
Agreement, VMC and HoldCo hereby agree to sell, assign and transfer to Vista and
Granges, and Vista and Granges hereby agree to purchase from VMC and HoldCo at
the Closing all of the Purchased Shares, free and clear of all Encumbrances,
except any Permitted Encumbrances, for the Purchase Price.
2.2 PURCHASE PRICE
Subject to the terms and conditions contained in this
Agreement, the aggregate purchase price for the Purchased Shares shall be
$3,000,000 (the "PURCHASE PRICE"). Both VMC and HoldCo acknowledge that the
Purchase Price shall be allocated between them PRO RATA in proportion to their
respective percentage interests in the Purchased Shares and that Viceroy shall
receive their respective shares of the Purchase Price at the Closing merely as
their nominee.
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2.3 PAYMENT OF THE PURCHASE PRICE
The Purchase Price shall be paid and satisfied as follows:
(a) on the Closing Date, Vista shall pay to Viceroy, as nominee
for VMC and HoldCo, the sum of $1,000,000;
(b) on the Closing Date, Vista shall issue to Viceroy, as nominee
for VMC and HoldCo, 303,030 Vista Units having an equivalent
cash value of $1,500,000; and
(c) on the first Business Day that is one calendar year after the
Closing Date, Vista shall pay to Viceroy, as nominee for VMC
and HoldCo, the sum of $500,000 less any amount to be offset
against this amount in accordance with section 6.2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF VMC AND HOLDCO
VMC and HoldCo each represent and warrant to and in favour of
Vista and Granges as follows, and acknowledge that, Vista and Granges are
relying upon such representations and warranties in addition to the due
diligence and investigations undertaken by Vista and Granges prior to the
Closing as an inducement to enter into this Agreement and to consummate the
transactions contemplated hereby:
(1) CORPORATE STATUS AND AUTHORITY
(a) CORPORATE STATUS OF VMC. VMC is duly amalgamated and validly
exists under the laws of the Province of British Columbia and
is in good standing under the COMPANY ACT (British Columbia).
(b) CORPORATE STATUS OF HOLDCO. HoldCo is duly incorporated and
validly exists under the laws of the Province of British
Columbia and is in good standing under the COMPANY ACT
(British Columbia).
(c) CORPORATE STATUS OF PAREDONES. Paredones is duly incorporated,
validly exists and is in good standing under the applicable
Laws of Mexico.
(d) CORPORATE POWER AND CAPACITY OF VMC AND HOLDCO TO ENTER INTO
AND PERFORM AGREEMENT. Each of VMC and HoldCo has the
corporate power and authority to own and hold the Purchased
Shares, to enter into this Agreement, to consummate all
transactions contemplated herein, to perform its obligations
hereunder, and to transfer legal title to and beneficial
ownership of the Purchased Shares to Vista and Granges on the
terms and conditions hereof, free and clear of Encumbrances,
except Permitted Encumbrances.
(e) NO BANKRUPTCY PROCEEDINGS. No proceedings have been taken or
authorized by VMC, HoldCo or Paredones, or to the best of the
knowledge of VMC and HoldCo, by any other person, with respect
to the bankruptcy, insolvency, liquidation, dissolution, or
winding-up of VMC, HoldCo or Paredones.
(f) POWER AND CAPACITY OF PAREDONES. Paredones has all requisite
power and capacity to own and lease its Assets and carry on
its Business.
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(g) SUBSIDIARIES. Paredones has no subsidiaries or investments in
other corporate entities.
(h) CORPORATE RECORDS. To the knowledge of VMC and HoldCo, the
corporate records of VMC, HoldCo and Paredones, as required to
be maintained by VMC, HoldCo and Paredones under applicable
corporate statutes, including, without limitation, the
Constating Documents of VMC, HoldCo and Paredones, are
accurate, complete and up-to-date in all material respects and
all material transactions of Paredones have been properly
recorded in its books or filed with its records.
(i) NOTICES. To the knowledge of VMC and HoldCo, Paredones has
duly filed all required notices or other documentation with
all applicable Mexican Governmental Authorities and in
accordance with applicable Mexican Laws.
(2) NO DEFAULT
To the knowledge of VMC and HoldCo, the execution and delivery
of this Agreement, the consummation of the transactions contemplated hereby, or
the fulfilment of or compliance with the terms and provisions hereof do not and
shall not, and do not create a state of facts which after notice or lapse of
time or both shall:
(a) result in the breach of or violate any term or provision of
the Constating Documents of Paredones, VMC or HoldCo;
(b) conflict with, result in the breach of, constitute a default
under, or accelerate or permit the acceleration of the
obligations of Paredones, VMC or HoldCo under, any Material
Contract;
(c) result in the cancellation, suspension or alteration in the
terms of any Government Authorization;
(d) result in the creation of any Encumbrance upon any of the
Assets other than the Permitted Encumbrances;
(e) require the consent of any person pursuant to any Material
Contract, except as disclosed in SCHEDULE "H";
(f) give any person other than the parties hereto any material
interest or right, including, without limitation, rights of
purchase, termination, cancellation or acceleration under any
Material Contract or Government Authorization;
(g) subject to compliance with disclosure requirements under
applicable securities legislation and the rules, by-laws and
policies of any stock exchange having jurisdiction, conflict
with, breach, or violate any of the terms, conditions or
provisions of any Law, or any judgment, order, injunction,
decree, regulation or ruling of any court or stock exchange
having jurisdiction; or
(h) result in the imposition of any Taxes on Paredones or the Assets.
(3) SHARE CAPITAL
(a) SHARE CAPITAL. The authorized share capital of Paredones
consists of 103,918,986 common shares with MexCy $1.00 par
value, all of which shares have been duly and validly
subscribed for and issued and are outstanding as fully-paid
and non-assessable
-10-
shares as at the date hereof. No other shares in the capital
of Paredones are issued and outstanding as at the date hereof.
(b) SHAREHOLDERS. VMC and HoldCo are the sole legal and beneficial
holders of all of the subscribed, issued and outstanding
common shares of Paredones.
(c) NO OPTIONS. No person has any option, warrant, right, call,
commitment, conversion right, right of exchange or other
agreement, present or future, contingent or absolute, or any
right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an option, warrant, right,
call, commitment, conversion right, right of exchange or other
agreement for the purchase, subscription, allotment or
issuance of any of the unissued common shares, financial
instruments convertible into common shares or other securities
of Paredones.
(4) FINANCIAL MATTERS
(a) FINANCIAL STATEMENTS. The Financial Statements have been
prepared in accordance with generally accepted accounting
principles in Mexico and to the knowledge of VMC and HoldCo,
present fairly and accurately in every material respect the
assets, liabilities (whether accrued, absolute, contingent or
otherwise) and financial condition of Paredones as of the date
of such statements, and the results of the operations of
Paredones during the periods covered by such statements.
(b) LIABILITIES. Except as disclosed in the Financial Statements,
to the knowledge of VMC and HoldCo, Paredones had no material
Liabilities as of the date of the Financial Statements.
(5) MATERIAL CHANGES
Except as contemplated by this Agreement, Paredones has not,
since the date of the Financial Statements:
(a) experienced any adverse material change in the business,
operations, assets, liabilities, ownership, capital or
financial position or condition of Paredones, or any change in
a material fact that has a significant adverse effect on, or
would reasonably be expected to have a significant adverse
effect on, the business, operations, assets, liabilities,
ownership, capital or financial position or condition of
Paredones, including, without limitation, the Business, the
Assets and the Liabilities;
(b) transferred, assigned, sold or otherwise disposed of any part
of the Business or any of the Assets, except in the normal
course of business;
(c) incurred or assumed any material Liability, except unsecured
current obligations and liabilities incurred in the ordinary
and usual course of business;
(d) discharged or satisfied any Encumbrance, or paid any
obligation or Liability;
(e) suffered an extraordinary loss (before interest or taxes),
waived, surrendered or omitted to take any action in respect
of any rights of substantial value or entered into any
commitment or transaction not in the normal course of
business, where such loss, rights, commitment or transaction
is or would be material in relation to the Assets or the
Business;
-11-
(f) granted any bonuses, whether monetary or otherwise, or made
any general wage or salary increases in respect of employees
or officers employed by Paredones other than as provided for
in existing employment arrangements, or changed the terms of
employment for any employee or officer of Paredones;
(g) hired or dismissed any employee or officer of Paredones;
(h) granted any Encumbrance in respect of any of the Assets;
(i) declared or paid any dividend or declared or made any other
distribution on any of the Purchased Shares or redeemed,
purchased or otherwise acquired any of the Purchased Shares;
or
(j) authorized, agreed or otherwise become committed to do any of
the foregoing.
(6) BANKING
(a) LOANS AND CREDIT FACILITIES. Paredones has not entered into,
committed to or otherwise arranged for, any loans, operating
lines of credit or other credit facilities (including, without
limitation, letters of credit, interest rate or currency
swaps, hedging contracts, forward loan or rate agreements or
other financial instruments), nor does Paredones have any
outstanding bonds, debentures, mortgages, notes or other
similar indebtedness, and nor is Paredones obligated to create
or issue any bonds, debentures, mortgages, notes or other
similar indebtedness or financial instruments other than
intercorporate advances, all of which have been capitalized as
disclosed to Vista and Granges.
(b) GUARANTEES/INDEMNITIES. Paredones has not directly or
indirectly guaranteed or indemnified, or agreed to guarantee
or indemnify, or agreed to any other like commitment, in
respect of any debt, liability or other obligation of any
person.
(c) BANK FACILITIES. SCHEDULE "J" hereto contains a complete and
accurate listing showing the name of each bank, trust company
or similar financial institution in which Paredones has an
account, safety deposit box or other banking facility (of the
nature described in SCHEDULE "J" hereto), including the names
of all persons authorized to transact business in respect of
such accounts, and each corporate credit card issued to
Paredones.
(7) MATERIAL CONTRACTS
To the knowledge of VMC and HoldCo, SCHEDULE "C" hereto
contains a complete and accurate list of all Material Contracts. VMC and HoldCo
make no representation or warranty as to whether or not Paredones is in breach
or default of any of the terms of any Material Contract, but neither VMC nor
HoldCo is aware of any breach or default of any of the terms of any Material
Contract by any party thereto. VMC and HoldCo make no representation or warranty
as to whether or not each such Material Contract is in good standing and in full
force and effect without amendment thereto.
(8) ASSETS AND PROPERTY
(a) OWNERSHIP OF ASSETS. To the knowledge of VMC and HoldCo,
Paredones owns good and marketable title to, and is in actual
and exclusive possession and control of, the Assets, free and
clear of Encumbrances, except Permitted Encumbrances, and
without limiting the generality of the foregoing, Paredones
owns and is in actual and exclusive possession and
-12-
control of the Mineral Rights described in SCHEDULE "D" hereto
free and clear of Encumbrances, except Permitted Encumbrances.
(b) CONFLICTING RIGHT OR INTEREST. To the knowledge of VMC and
HoldCo, there is no right or interest in any of the Assets
asserted by others because of overlapping or conflicting
mining concessions.
(c) TAXES. To the knowledge of VMC and HoldCo, all AD VALOREM,
property, production, severance, windfall profits, municipal,
school, general and special taxes, rates, assessments, local
improvements charges, business taxes, development cost
charges, other subdivision charges, environmental fines,
charges and levies and costs and other levies which are
chargeable against, based on or measured by the ownership of
any of the Assets, or by production of minerals, or the
receipt of proceeds therefrom that have become due and payable
with respect to any of the Assets have been paid timely and in
the correct amounts and all tax and information returns to
Governmental Authorities required to be filed with respect to
the Assets and Business have been timely and properly filed.
(d) ZONING. VMC and HoldCo make no representation or warranty that
all Lands are zoned to permit the particular activity carried
out on such Lands by Paredones and its authorized agents or
any person to whom Paredones has given occupancy rights in
respect of such Lands.
(e) ROYALTY PAYMENTS. VMC and HoldCo are not aware of any
landowner's royalties, overriding royalties, net profits
interests, working interests or similar interests on or in
relation to any of the Assets other than the Echo Bay Net
Profit Obligation and the royalty payable and the grant of a
right of first refusal made under the terms of the "Arbol de
Oro Royalty Agreement" which is listed as item 1 in part A of
SCHEDULE "C".
(f) OPERATING CONDITIONS. To the knowledge of VMC and HoldCo,
Paredones has operated the Assets and the Business in
accordance with accepted industry standards and in accordance
with all Permits and Licences and with applicable Laws. VMC
and HoldCo make no representation or warranty that the
Equipment comprised in the Assets is in good operating
condition and VMC and HoldCo represent and warrant that
Equipment is provided on an "as is where is" basis.
(g) PROPER PERFORMANCE. To the knowledge of VMC and HoldCo,
Paredones owns the entire and undivided title to, and holds
exclusive possession and control of the Mineral Rights,
including those listed and described in SCHEDULE "D", free and
clear of all defects, liens and adverse claims of any nature
whatsoever, except for the rights and interests of third
parties pursuant to the contracts listed in SCHEDULE "C". To
the knowledge of VMC and HoldCo, Paredones does not own any
Mineral Rights in the State of Baja California Sur or
otherwise other than those described in SCHEDULE "D". Other
than as described in SCHEDULE "D", to the knowledge of VMC and
HoldCo all documents required to be filed with the applicable
governmental authorities with respect to the Mineral Rights,
including, without limitation, proofs of assessment work,
technical reports, applications to group concessions for
purposes of proving assessment works and applications to
convert exploration concessions into exploitation concessions,
have been filed in a proper and timely manner; all mining
duties required to be paid with respect to the Mineral Rights
have been paid in a proper and timely manner; the Mineral
Rights are valid and in good standing and Paredones has not
received any notice of any deficiencies or of cancellation of
any of the Mineral Rights.
-13-
(h) LIST OF MINERAL RIGHTS. To the knowledge of VMC and HoldCo,
there are no Mineral Rights comprised in the Assets other than
those described in SCHEDULE "D" hereto and such schedule
accurately identifies such Mineral Rights.
(i) LIST OF LANDS. To the knowledge of VMC and HoldCo, there are
no Lands comprised in the Assets other than those described in
the agreements listed and described in SCHEDULE "B" hereto and
such schedule accurately identifies such agreements.
(j) LIST OF EQUIPMENT. To the knowledge of VMC and HoldCo, there
is no Equipment comprised in the Assets other than as
described in the list of Equipment set out in SCHEDULE "A"
hereto and such schedule accurately identifies such Equipment.
(9) HAZARDOUS MATERIALS AND ENVIRONMENTAL LAWS
The representations and warranties set out in this Section
3.1(9) are to the knowledge of VMC and HoldCo, and such representations and
warranties are effective only for activities undertaken in respect of the Assets
subsequent to December 31, 1999 when Paredones assumed the role of operator of
the mineral project in respect of the Mineral Rights.
(a) HAZARDOUS MATERIALS AND COMPLIANCE WITH ENVIRONMENTAL LAWS. No
Hazardous Materials, or other material used in or generated by
any of the Assets or the Business, have been or are currently
placed, used, stored, treated, manufactured, disposed of,
released, discharged, spilled or emitted in violation of any
Environmental Laws or Governmental Authorizations. All
Hazardous Materials disposed of, removed, emitted, treated,
released, discharged or spilled from or by any of the Assets
or the Business were and are documented, generated, handled,
transported, stored, treated and disposed of in compliance
with all Environmental Laws and Governmental Authorizations.
(b) WASTE DISPOSAL. All of the Assets that were or are used for
the generation, handling, treatment, storage or disposal of
Hazardous Materials or other material used in or generated by
the Assets or the Business on any of the Lands or on any of
the Mineral Rights have been and are properly permitted and
operated in compliance with all Environmental Laws.
(c) ENVIRONMENTAL CONTAMINATION. There is no Environmental
Contamination of any of the Assets or the Business.
(d) ENVIRONMENTAL ORDERS OR AGREEMENTS. There are no orders,
agreements or consent orders to which Paredones, VMC or HoldCo
is a party relating to compliance of any of the Assets or the
Business with Environmental Laws other than as set forth in
SCHEDULE "K" hereto.
(e) ENVIRONMENTAL CLAIMS. There have been no orders issued or, to
the knowledge of VMC or HoldCo, threatened and no
investigations, removal, remedial or response actions ordered,
conducted, taken or threatened under or pursuant to any
Environmental Laws with respect to the Assets or the Business
or any other businesses conducted on or from any of the Lands
or Mineral Rights other than routine inspections. No claims
are pending or, to the knowledge of VMC or HoldCo, threatened
with respect to Environmental Contamination on any of the
Lands or Mineral Rights or the violation of any Environmental
Laws in connection with the Assets or the Business.
-14-
(f) PERMITS. VMC and HoldCo make no representation or warranty
that all permits, licences, approvals, authorizations,
consents, registrations or other actions required under
Environmental Laws to explore and exploit the Mineral Rights
and own and operate the Business have been obtained, or that
all terms and conditions attached thereto have been duly
complied with in all material respects, or that all such
licences, approvals, authorizations, consents and
registrations are in full force and effect and in good
standing.
(g) ADVERSE PROCEEDINGS. There have been no administrative or
judicial proceedings, actions or claims commenced or
threatened with respect to the Assets or the Business or any
other business conducted on the Lands or on any Mineral Rights
under Environmental Laws or as a result of Environment
Contamination.
(h) NUISANCE. The use of, and operations relating to, the Assets
and the Business conducted on or from the Lands or Mineral
Rights, do not constitute a nuisance of any nature, nor has
any such claim for nuisance been made or threatened in respect
of such use by any person.
(10) LEGAL AND REGULATORY MATTERS
The representations and warranties set out in this Section
3.1(10) are to the knowledge of VMC and HoldCo, and such representations and
warranties are effective only for activities undertaken in respect of the Assets
subsequent to December 31, 1999 when Paredones assumed the role of operator of
the mineral project in respect of the Mineral Rights.
(a) LITIGATION. There are no actions, suits, litigations,
arbitrations, proceedings or claims in progress, pending or
threatened against or relating to Paredones, VMC or HoldCo or
likely to affect any of the Business or the Assets, there is
no circumstance, matter or thing known to VMC or HoldCo which
might reasonably give rise to any such proceeding and there is
not outstanding or threatened against Paredones, VMC or HoldCo
any judgment, decree, injunction, rule or order of or by any
court or Governmental Authority having jurisdiction.
(b) COMPLIANCE WITH LAWS. The operation of the Business is
conducted in compliance in all material respects with all
applicable Laws of each jurisdiction in which the Business has
been and is carried out and none of Paredones, VMC or HoldCo
have received any notice of any alleged material breach or
violation of any such Laws.
(c) COMPLIANCE DIRECTIVES. There are no outstanding compliance
directives or work orders relating the Assets or the Business
from any police, fire department, sanitation, health
authorities, environmental agencies, or from any other
Government Authority, department or agency, nor does
Paredones, VMC or HoldCo have notice that there are any
matters under consideration by such authorities relating to
the Assets.
(d) NOTICE OF DEFAULT/CLAIMS. None of Paredones, VMC or HoldCo has
received, in respect of the Assets or the Business from any
Governmental Authority or a third party, any notice of
violation of any law or regulation or of any default,
violation or termination of any permits and licenses or of any
fact or circumstance which shall, or is likely to, result in
such a default, violation or termination.
(e) NO SEIZURE. There is no eminent domain, appropriation,
expropriation or seizure proceeding in respect of the Assets
or the Business that is pending or that has been threatened.
-15-
(f) LICENSES, REGISTRATIONS AND PERMITS. Paredones is duly
qualified to carry on, and holds all licenses, registrations
and permits as may be required for carrying on, the Business
in all jurisdictions in which the nature of the Business or
the Assets make such qualification, licenses, registrations
and permits necessary.
(11) TAXATION
(a) ACTIONS OR CLAIMS. To the knowledge of VMC and HoldCo, there
are no actions, suits, claims, proceedings, investigations or
audits now pending or, to the knowledge of VMC or HoldCo,
threatened against Paredones, VMC or HoldCo in respect of any
Taxes affecting the Assets or the Business and there are no
matters under discussion, audit or appeal with any
Governmental Authority relating to Taxes which, if not paid,
would result in a lien or charge on any of the Assets or the
Purchased Shares. Paredones has fulfilled all requirements
under Laws for withholding of amounts from employees and has
remitted all amounts withheld to the appropriate authorities
within the prescribed times.
(b) TAXATION OF PURCHASED SHARES. The purchase and sale of the
Purchased Shares is exempt from the payment of income tax in
Mexico pursuant to that set forth in article 13 of the
"Convention between the Government of the United Mexican
States and the Government of Canada for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with
respect to Taxes on Income".
(12) EMPLOYMENT MATTERS
The representations and warranties set out in this Section
3.1(12) are to the knowledge of VMC and HoldCo, and such representations and
warranties are effective only for activities undertaken in respect of the Assets
subsequent to December 31, 1999 when Paredones assumed the role of operator of
the mineral project in respect of the Mineral Rights.
(a) NO EMPLOYEES. Paredones has no employees, has not retained any
person as its agent or contractor, or to otherwise provided
services to or for it, other than pursuant to the Echo Bay
Services Agreement, and has no outstanding liabilities or
obligations with respect to former employees, agents or
contractors of Paredones or any other person including Viceroy
or any other person.
(b) ECHO BAY SERVICES AGREEMENT. Paredones is not in breach or
default of any of the terms of the Echo Bay Services Agreement
and may terminate the Echo Bay Services Agreement at any time
and at its sole discretion in accordance with its terms.
Paredones has, at no time, retained any employee of Servicios
Echo Bay, S.A. de C.V. as an employee of Paredones.
(c) EMPLOYEE CONTRACTS. Paredones is not a party and has no
obligations with respect to:
(i) any written or oral contract or commitment for the
employment of any officer or employee;
(ii) any agreement relating to the termination or notice
of termination of any employee which requires a
specified notice period or salary in lieu of notice;
(iii) any contract with or commitment to any labour union
or employees' association;
(iv) any pension, profit sharing, deferred compensation,
retirement, hospitalization, health, disability,
termination, insurance or similar plan or practice,
formal or
-16-
informal, with respect to its employees, former
employees or others, other than a stock option plan
or a group benefits plan; and
(v) any other contract that requires more than six
months' notice of termination.
(d) UNIONS. There are no current attempts to organize or establish
any labour union or employee association with respect to
Paredones.
(e) NO GOLDEN PARACHUTES. Neither the execution and delivery of
this Agreement nor the consummation of any of the transactions
contemplated hereby or thereby, whether individually or in the
aggregate, shall:
(i) result in any payment (including, without limitation,
a severance, unemployment compensation, termination,
"golden parachute", bonus or other payment) becoming
due to any director, officer, employee, agent or
contractor of Paredones or of any other person
including Viceroy for which Paredones would be liable
in whole or in part under any plan, agreement or
otherwise; or
(ii) materially increase or result in the acceleration of
the time of payment of any salary or benefits
otherwise payable by Paredones to any director,
officer, employee, agent or contractor of Paredones
or of any other person including Viceroy for which
Paredones would be liable in whole or in part.
(f) NO EMPLOYMENT DISPUTES. Paredones has not terminated the
employment of any employee in circumstances that may give rise
to a claim by such employee for wrongful dismissal. No notice
has been received by Paredones, VMC or HoldCo of any complaint
filed by any of its former employees against it, claiming that
it has violated any applicable employment standards or human
rights or similar legislation or of any applications,
complaints or proceedings of any kind involving Paredones or
any of its former employees before any court, labour relations
board or similar tribunal. There are no pending or threatened
work stoppages or labour disputes, charges or unfair labour
practices by any present or former employees of Paredones. No
event has occurred with respect to VMC, HoldCo or Paredones
which is likely to result in any claim or action against
Paredones under any Laws related to employment or social
security matters or any increase in social insurance payroll
assessments or any similar assessment payable by Paredones.
(13) BINDING AGREEMENT
This Agreement has been duly executed and delivered by VMC and
HoldCo and constitutes a legal, valid and binding obligation of VMC and HoldCo.
(14) OWNERSHIP OF PURCHASED SHARES
(a) VMC and HoldCo are the legal and beneficial owners of the
Purchased Shares, free and clear of all Encumbrances, except
Permitted Encumbrances.
(b) Viceroy is the sole legal and beneficial owner of all of the
issued and outstanding shares of VMC.
(c) VMC is the sole legal and beneficial owner of all of the
issued and outstanding shares of HoldCo.
-17-
(15) RESIDENCY
Each of VMC, HoldCo and Viceroy is a resident of Canada for
the purposes of the INCOME TAX ACT (Canada).
(16) NO COMMISSION
None of Paredones, VMC or HoldCo has taken any action that
would result in a brokerage commission, finder's fee or other like payment being
payable by any party hereto with respect to the transactions contemplated
hereby.
(17) APPROVALS
Except as disclosed in SCHEDULE "H" hereto or as otherwise
specified in this Agreement, to the knowledge of VMC and HoldCo no exemption,
consent, approval, order or authorization of any court, Governmental Authority
or any third party is required by, or with respect to, Paredones, VMC, HoldCo or
Viceroy in connection with the execution, delivery and performance of this
Agreement by VMC or HoldCo or the consummation by VMC or HoldCo of any of the
transactions contemplated hereby.
(18) SECURITIES LAWS
(a) PURCHASE AS PRINCIPAL. Each of VMC and HoldCo is purchasing
the Vista Securities as principal for its own account, and not
for the benefit of any other person, for investment only and
not with a view to resale or distribution.
(b) NO ADVERTISEMENT. The offering and sale of the Vista
Securities to each of VMC and HoldCo were not made through an
advertisement of the Vista Securities in printed media of
general and regular paid circulation, radio or television or
any other form of advertisement, and, to its knowledge,
neither VMC nor HoldCo has received an offering memorandum as
such term is defined under the Securities Laws, and each of
VMC and HoldCo acknowledges that it is not purchasing the
Vista Securities as a result of any form of general
solicitation or general advertising including advertisements,
articles, notices or other communications published in any
newspaper, magazine or similar media or broadcast over radio,
or television, or any seminar or meeting whose attendees have
been invited by general solicitation or general advertising.
(c) NO INSIDER INFORMATION. The Vista Securities are not being
purchased by VMC or HoldCo as a result of any material
information concerning Vista that has not been publicly
disclosed and the decision of each of VMC and HoldCo to enter
into this agreement and acquire the Vista Securities has not
been made as a result of any verbal or written representation
as to fact or otherwise made by or on behalf of Vista or any
other person and is based entirely upon currently available
public information concerning Vista.
(d) FINANCIAL KNOWLEDGE; INVESTMENT SUITABILITY. Each of VMC and
HoldCo has such knowledge and experience in financial and
business affairs as to be capable of evaluating the merits and
risks of the investment hereunder in the Vista Securities and
is able to bear the economic risk of loss of such investment.
-18-
(e) ADDRESS OF EACH OF VMC AND HOLDCO. The office of each of VMC
and HoldCo at which each of VMC and HoldCo received and
accepted the offer to purchase the Vista Securities is the
address listed on the first page of this Agreement.
(f) "U.S. PERSON". Neither of VMC and HoldCo is a "U.S. Person" as
defined in Regulation S under the U.S. Securities Act and is
not acquiring the Vista Securities for the account or benefit
of any U.S. Person.
(g) NO U.S. REGISTRATION. Each of VMC and HoldCo understands that
the Vista Securities have not been registered under the U.S.
Securities Act and, accordingly, are "restricted securities"
as defined in Rule 905 of Regulation S by reference to Rule
144 under the U.S. Securities Act, and that the sale
contemplated hereby is being made in reliance on an exemption
from such registration requirement, and that the Vista
Securities may not be resold unless they are registered under
the U.S. Securities Act or unless an exemption from such
registration is available.
(h) NO "DIRECTED SELLING EFFORTS". Each of VMC and HoldCo
acknowledges that it has not purchased the Vista Securities as
a result of any "directed selling efforts" (as defined in
Regulation S under the U.S. Securities Act) in the United
States in respect of the Vista Securities which would include
any activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for the sale of the Vista
Securities.
(i) U.S. RESALE RESTRICTIONS. Each of VMC and HoldCo agrees that
if it decides to offer, sell or otherwise transfer any of the
Vista Securities, it shall not offer, sell or otherwise
transfer any of such Vista Securities directly or indirectly,
unless:
(i) the sale is to Vista;
(ii) the sale is made outside the United States in a
transaction meeting the requirements of Rule 904 of
Regulation S under the U.S. Securities Act and in
compliance with applicable local laws and regulations
and it has prior to such sale furnished to Vista
and/or its agents, as applicable, such seller and
broker declarations or other documents as Vista or
its agents may reasonably request in connection
therewith;
(iii) the sale is made pursuant to the exemption from the
registration requirements under the U.S. Securities
Act provided by Rule 144 thereunder or otherwise and
in accordance with any applicable U.S. state
securities or ("Blue Sky") laws and it has prior to
such sale furnished to Vista an opinion to such
effect reasonably satisfactory to Vista; or
(iv) the Vista Securities are subject to an effective
registration statement filed under the U.S.
Securities Act and subject to related compliance
under any applicable U.S.
state securities law.
(j) CANADIAN RESALE RESTRICTIONS. Each of VMC and HoldCo
acknowledges that if it decides to offer, sell or otherwise
transfer any of the Vista Securities in Canada, such
securities may be offered or sold or otherwise transferred
only:
(i) pursuant to an exemption from the registration and
prospectus requirements under the Securities Laws or
the applicable securities legislation of the province
-19-
of Canada in which such trade is occurring, and with
the prior consent of the Toronto Stock Exchange; or
(ii) as Vista is a "qualifying issuer" (as that term is
defined in Canadian Multilateral Instrument 45-102
RESALE OF SECURITIES), four months has elapsed from
the date of the issue of the Vista Securities, each
of VMC and HoldCo is not, and collectively, VMC and
HoldCo are not, a "control person" of Vista (as
defined in the SECURITIES ACT (British Columbia)), no
unusual effort is made to prepare the market or
create a demand for the Vista Securities, no
extraordinary commission or other consideration is
paid in respect of such offer, sale or transfer and
if VMC and HoldCo individually or collectively with
any affiliates is an "insider" of Vista (as defined
in the SECURITIES ACT (British Columbia), each of VMC
and HoldCo has no reasonable grounds to believe that
Vista is in default of any Securities Laws or the
applicable securities legislation of the province of
Canada in which such trade is occurring.
(k) LEGEND. Each of VMC and HoldCo acknowledges that all
certificates issued representing the Vista Shares and the
Vista Warrant Shares, as well as all certificates issued in
exchange for or in substitution therefor, shall bear legends
to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE FOLLOWING HOLD PERIOD AND RESALE
RESTRICTIONS:
1. CANADIAN LEGEND - UNLESS PERMITTED UNDER
CANADIAN SECURITIES LEGISLATION, THE HOLDER
OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE SHALL NOT TRADE THE SECURITIES
BEFORE DECEMBER 30, 2002.
2. U.S. LEGEND - THE SECURITIES EVIDENCED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"), OR ANY
APPLICABLE UNITED STATES STATE SECURITIES
LAW. NO INTEREST THEREIN MAY BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF WITHOUT
(A) AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT AND APPLICABLE UNITED
STATES STATE SECURITIES LAWS COVERING ANY
SUCH TRANSACTION OR (B) RECEIPT BY THE
CORPORATION OF AN ACCEPTABLE LEGAL OPINION
STATING THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION, OR (C) THE CORPORATION
OTHERWISE SATISFYING ITSELF THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION.
HEDGING TRANSACTIONS INVOLVING THE
SECURITIES EVIDENCED BY THIS CERTIFICATE MAY
NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH
THE 1933 ACT."
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In addition, each of VMC and HoldCo acknowledges that all
certificates issued representing the Vista Warrants shall bear
legends to the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE FOLLOWING HOLD PERIOD AND RESALE
RESTRICTIONS:
1. CANADIAN LEGEND - UNLESS PERMITTED UNDER
CANADIAN SECURITIES LEGISLATION, THE HOLDER
OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE SHALL NOT TRADE THE SECURITIES
BEFORE DECEMBER 30, 2002.
2. U.S. LEGEND - THESE WARRANTS AND THE
SECURITIES TO BE ISSUED UPON EXERCISE
THEREOF HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"), OR ANY APPLICABLE
UNITED STATES STATE SECURITIES LAW. THESE
WARRANTS MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON UNLESS REGISTERED
UNDER THE 1933 ACT AND IN COMPLIANCE WITH
APPLICABLE UNITED STATES STATE SECURITIES
LAW OR AN EXEMPTION FROM SUCH REGISTRATION
IS AVAILABLE. "UNITED STATES" AND "U.S.
PERSON" ARE AS DEFINED UNDER REGULATION S
UNDER THE 1933 ACT."
(l) RECORD OF TRANSFER. Each of VMC and HoldCo understands and
acknowledges that Vista shall refuse to register any transfer
of the Vista Securities (i) that is not made in accordance
with the provisions of Regulation S under the U.S. Securities
Act, pursuant to registration under the U.S. Securities Act,
or pursuant to an available exemption from such registration
requirement, and in accordance with applicable provisions of
any U.S. state securities law, or (ii) that is not exempt from
or not subject to the registration and prospectus requirements
under the Securities Laws or the securities legislation of the
province of Canada in which such transfer is occurring.
(m) HEDGING. Each of VMC and HoldCo shall not conduct hedging
transactions involving the Vista Securities unless in
compliance with the U.S. Securities Act.
(n) EXERCISE OF VISTA WARRANTS. Each person exercising Vista
Warrants shall be required to give (i) written certification
that it is not a U.S. Person (as defined in Regulation S under
the U.S. Securities Act) and the Vista Warrants are not being
exercised on behalf of a U.S. Person, or (ii) a written
opinion of counsel to the effect that the Vista Warrants and
the Vista Warrant Shares delivered upon exercise of the Vista
Warrants have been registered under the U.S. Securities Act or
are exempt from registration thereunder.
3.2 REPRESENTATIONS AND WARRANTIES OF VICEROY
Viceroy represents and warrants to and in favour of Vista and
Granges as follows, and acknowledges that Vista and Granges are relying upon
such representations and warranties in addition to the due diligence and
investigations undertaken by Vista and Granges prior to the Closing as an
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inducement to enter into this Agreement and to consummate the transactions
contemplated hereby, that as at the date hereof:
(1) CORPORATE STATUS AND CAPACITY
(a) CORPORATE STATUS OF VICEROY. Viceroy is duly amalgamated and
validly exists under the laws of British Columbia and in good
standing under the COMPANY ACT (British Columbia).
(b) CORPORATE POWER AND CAPACITY OF VICEROY TO ENTER INTO AND
PERFORM AGREEMENT. Viceroy has the corporate power and
capacity to enter into this Agreement, to consummate all
transactions contemplated herein and to perform its
obligations hereunder.
(c) NO BANKRUPTCY PROCEEDINGS. No proceedings have been taken or
authorized by Viceroy, to the best of the knowledge of
Viceroy, by any other person, with respect to the bankruptcy,
insolvency, liquidation, dissolution, or winding-up of
Viceroy.
(2) NO DEFAULT
The execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby, or the fulfilment of or compliance with
the terms and provisions hereof do not and shall not, and do not create a state
of facts which after notice or lapse of time or both shall:
(a) result in a breach of or violate any term or provision of the
Constating Documents of Viceroy;
(b) conflict with, result in the breach of, constitute a default
under, or accelerate or permit the acceleration of the
obligations of Viceroy under, any contract to which Viceroy is
a party;
(c) subject to compliance with disclosure requirements under
applicable securities legislation and the rules, by-laws and
policies of any stock exchange having jurisdiction, conflict
with, breach, or violate any of the terms, conditions or
provisions of any Law, or any judgment, order, injunction,
decree, regulation or ruling of any court or stock exchange
having jurisdiction.
(3) BINDING AGREEMENT
This Agreement has been duly executed and delivered by Viceroy
and constitutes a legal, valid and binding obligation of Viceroy.
(4) OWNERSHIP OF VMC AND HOLDCO
(a) Viceroy is the sole legal and beneficial owner of all of the
issued and outstanding shares of VMC and accordingly VMC is a
direct wholly-owned subsidiary of Viceroy.
(b) VMC is the sole legal and beneficial owner of all of the
issued and outstanding shares of HoldCo and accordingly HoldCo
is an indirect wholly-owned subsidiary of Viceroy.
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(5) NO COMMISSION
Viceroy has not taken any action that would result in a
brokerage commission, finder's fee or other like payment being payable by any
party hereto with respect to the transactions contemplated hereby.
(6) APPROVALS
Except as disclosed in SCHEDULE "H" hereto, no exemption,
consent, approval, order or authorization of any court, Governmental Authority
or any third party is required by, or with respect to, Viceroy in connection
with the execution, delivery and performance of this Agreement by Viceroy or the
consummation by Viceroy of any of the transactions contemplated hereby.
3.3 REPRESENTATIONS AND WARRANTIES OF VISTA AND GRANGES
Vista and Granges represent and warrant to and in favour of
VMC, HoldCo and Viceroy as follows and acknowledge that VMC, HoldCo and Viceroy
are relying upon such representations and warranties as an inducement to enter
into this Agreement and to consummate the transactions contemplated hereby, that
as at the date hereof:
(1) CORPORATE STATUS AND CAPACITY
(a) CORPORATE STATUS OF GRANGES. Granges is a company that is duly
incorporated and validly existing under the laws of British
Columbia and in good standing under the COMPANY ACT (British
Columbia).
(b) CORPORATE STATUS OF VISTA. Vista is a corporation that is duly
continued and validly existing under the laws of the Yukon
Territory and in good standing under the BUSINESS CORPORATIONS
ACT (Yukon Territory).
(c) CORPORATE POWER AND CAPACITY OF GRANGES. Granges has the
corporate power and capacity to enter into this Agreement, to
perform its obligations hereunder and to acquire legal and
beneficial title to and ownership of the Purchased Shares from
VMC and HoldCo on the terms and conditions hereof.
(d) CORPORATE POWER AND CAPACITY OF VISTA. Vista has the corporate
power and capacity to enter into this Agreement, to perform
its obligations hereunder and to acquire legal and beneficial
title to and ownership of the Purchased Shares from VMC and
HoldCo on the terms and conditions hereof.
(e) NO BANKRUPTCY PROCEEDINGS. No proceedings have been taken or
authorized by Granges or Vista or, to the best of the
knowledge of Granges or Vista, by any other person, with
respect to the bankruptcy, insolvency, liquidation,
dissolution, or winding-up of Granges or Vista.
(2) NO DEFAULT
The execution and delivery of this Agreement, the fulfilment
of or compliance with the terms and provisions hereof and the issue, sale and
delivery on the Closing Date of the Vista Securities, do not and shall not
result in a breach of and do not create a state of facts which, after notice or
lapse of time, or both, shall result in a breach of, and do not and shall not
conflict with, any of the terms, conditions or provisions of the Constating
Documents of Granges or Vista or any trust indenture,
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agreement or instrument to which Granges or Vista is a party or by which Granges
or Vista is contractually bound or will be contractually bound on the Closing
Date.
(3) BINDING AGREEMENT
This Agreement has been duly executed and delivered by Vista
and Granges and constitutes a legal, valid and binding obligation of the
Purchaser and Vista.
(4) SHARE CAPITAL
(a) SHARE CAPITAL. The authorized share capital of Vista consists
of an unlimited number of common shares without par value and
an unlimited number of preferred shares, of which 6,067,868
common shares are issued and outstanding on the date hereof as
fully paid and non-assessable shares.
(b) NO OPTIONS. No person has any option, warrant, right, call,
commitment, conversion right, right of exchange or other
agreement, present or future, contingent or absolute, or any
right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an option, warrant, right,
call, commitment, conversion right, right of exchange or other
agreement for the purchase, subscription, allotment or
issuance of any of the unissued common shares, financial
instruments convertible into common shares or other securities
of Vista except as disclosed in the Form 1: CHANGE IN
OUTSTANDING AND RESERVED SECURITIES filed with the Toronto
Stock Exchange for the month of July 2002.
(5) LISTING OF COMMON SHARES
The common shares in the capital of Vista are listed and
posted for trading on the Stock Exchanges.
(6) REPORTING ISSUER STATUS
Vista is a "reporting issuer" under the SECURITIES ACT
(British Columbia) and the SECURITIES Act (Ontario), and is in compliance with
its obligations thereunder.
(7) QUALIFYING ISSUER STATUS
Vista is a "qualifying issuer" as that term is defined in
Canadian Multilateral Instrument 45-102 RESALE OF SECURITIES.
(8) NO COMMISSION
Neither Granges nor Vista has taken any action that would
result in a brokerage commission, finder's fee or other like payment being
payable by any party hereto with respect to the transactions contemplated
hereby.
(9) DISCLOSURE DOCUMENTS
The following disclosure documents of Vista:
(a) the Annual Report for the year ended December 31, 2001,
including the audited financial statements for such year,
filed on Form 10-KSB with the SEC;
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(b) the Quarterly Report for the three months ended March 31,
2002, including the unaudited financial statements for such
three-month period, filed on Form 10-QSB with the SEC;
(c) the Quarterly Report for the six months ended June 30, 2002,
including the unaudited financial statements for such
six-month period, filed on Form 10-QSB with the SEC;
(d) the Notice of Meeting and Management Information and Proxy
Circular for the 2002 Annual and Special General Meeting filed
on Schedule 14A with the SEC; and
(e) each report on Form 8-K filed with the SEC after March 31,
2002,
were, at their respective dates of issue or publication true and correct in all
material respects, contained no misrepresentations and were prepared in
accordance with and complied with Securities Laws and U.S. Securities Laws.
(10) MATERIAL CHANGES
Except as contemplated by this Agreement and as publicly
disclosed by Vista, Vista has not:
(a) experienced any adverse material change in the business,
operations, assets, liabilities, ownership, capital or
financial position or condition of Vista, or any change in a
material fact that has a significant adverse effect on, or
would reasonably be expected to have a significant adverse
effect on, the business, operations, assets, liabilities,
ownership, capital or financial position or condition of
Vista;
(b) transferred, assigned, sold or otherwise disposed of any
material part of Vista's assets or business, except in the
normal course of business;
(c) incurred or assumed any material Liability, except unsecured
current obligations and liabilities incurred in the ordinary
and usual course of business;
(d) suffered an extraordinary loss (before interest or taxes),
waived, surrendered or omitted to take any action in respect
of any rights of substantial value or entered into any
commitment or transaction not in the normal course of
business, where such loss, rights, commitment or transaction
is or would be material in relation to the assets or the
business of Vista;
(e) declared or paid any dividend or declared or made any other
distribution on any of the issued shares of Vista or redeemed,
purchased or otherwise acquired any of the issued shares or
Vista; or
(f) authorized, agreed or otherwise become committed to do any of
the foregoing.
(11) LEGAL AND REGULATORY MATTERS
(a) COMPLIANCE WITH LAWS. The operation of the business of Vista
is conducted in compliance in all material respects with all
applicable Laws of each jurisdiction in which such business
has been and is carried out and Vista has not received any
notice of any alleged material breach or violation of any such
Laws.
(b) LICENSES, REGISTRATIONS AND PERMITS. Each of Vista and Granges
is duly qualified to carry on, and holds all licenses,
registrations and permits as may be required for carrying
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on, its business in all jurisdictions in which the nature of
its business or assets make such qualification, licenses,
registrations and permits necessary.
(12) APPROVALS
Except as disclosed in SCHEDULE "H" hereto, no exemption,
consent, approval, order or authorization of any court, Governmental Authority
or any third party is required by, or with respect to, Vista or Granges in
connection with the execution, delivery and performance of this Agreement by
Vista or Granges or the consummation by Vista or Granges or any of the
transactions contemplated hereby.
ARTICLE 4
COVENANTS
4.1 COVENANTS OF VMC, HOLDCO AND VICEROY
(1) AGREEMENT DATE TO CLOSING
Each of VMC, HoldCo and Viceroy covenants and agrees with
Vista and Granges that, from the date of this Agreement to the Closing, it
shall:
(a) ACCESS. Provide Granges, Vista and their representatives with
continued access at reasonable times to the books, records,
financial statements, and other records and information
relating to Paredones, including the Assets, the Business, the
Purchased Shares and VMC's and HoldCo's ownership interest
therein, and all other information about the Assets, the
Business, the Purchased Shares and VMC's and HoldCo's
ownership interest therein requested by Vista, in connection
with the sale and purchase of the Purchased Shares;
(b) CONDUCT BUSINESS IN THE ORDINARY COURSE. Except as otherwise
provided in this Agreement, carry on and conduct the Business
in the ordinary course, consistent with past practice and use
its commercially reasonable efforts to preserve intact the
Assets;
(c) NO ENCUMBRANCES ON ASSETS. Refrain from creating or permitting
any Encumbrance, other than Permitted Encumbrances, on the
Assets in whole or in part and from selling, transferring or
otherwise disposing of the Assets;
(d) NO ENCUMBRANCE ON PURCHASED SHARES. Refrain from creating or
permitting any Encumbrance, other than Permitted Encumbrances,
on the Purchased Shares;
(e) NO DIVIDENDS. Refrain from declaring any dividends or making
any other distributions in respect of capital stock of
Paredones;
(f) NO CHANGE TO MATERIAL CONTRACTS. Refrain from amending or
varying any of the Material Contracts or enter into any other
Material Contract;
(g) MAINTAIN INSURANCE. Cause Paredones to maintain in full force
and effect its policy of insurance now in effect in respect of
one motor vehicle, and shall give all notices and present all
claims under such existing policy in a due and timely fashion
as may be reasonably required in accordance with prudent
business practice;
(h) RESTRICTIONS ON LOANS. Ensure that Paredones does not incur
any borrowings;
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(i) RESTRICTIONS ON CERTAIN COMMITMENTS. Not, without Vista's
prior written consent or unless required by law or required to
repair or replace any loss or damage to the Assets arising
subsequent to the execution of this Agreement, commence any
new capital projects or make any capital or exploration
expenditures and that Paredones does not incur any contingent
liability;
(j) NO AMENDMENT TO CHARTER DOCUMENTS. Except as otherwise
provided in this Agreement, not amend Paredones' Constating
Documents or change in any manner Paredones' authorized
capital or the rights, privileges, restrictions and conditions
attaching to any of Paredones' share capital;
(k) NO APPOINTMENTS OF NEW DIRECTORS OR OFFICERS. Ensure that
Paredones does not appoint any new directors or officers;
(l) MAINTAIN REGISTRATIONS. Use its best efforts to maintain all
of Paredones' registrations, licenses and permits, and the
registrations, licences and permits of Paredones' directors,
and any officers and employees, in good standing with such
Governmental Authorities as are necessary to permit Paredones
and its directors, officers and employees to carry on the
Business as presently carried on;
(m) COMPLIANCE WITH LAWS. Comply in all material respects with all
Laws applicable to it and to the conduct of the Business;
(n) OBTAIN CONSENTS. Use its best efforts to obtain, and where
required for the operation of the Business, to transfer to
Vista and Granges, all necessary Governmental Authorizations,
and all necessary releases, waivers, consents and approvals as
may be required to complete VMC's, HoldCo's and Viceroy's
obligations under this Agreement and to consummate the
transactions contemplated by this Agreement, and all such
releases, waivers, consents and approvals shall be in form and
substance satisfactory to Vista, acting reasonably;
(o) MAINTENANCE OF BOOKS AND RECORDS. Maintain Paredones' books of
account and records in the usual, regular and ordinary manner,
in accordance with generally accepted accounting principles
applied in Mexico on a consistent basis; and
(p) NOTICE OF MATERIAL DEVELOPMENTS. Notify Vista and Granges as
soon as any of its directors or officers have determined that
a state of facts exist which results in, or shall result in:
(i) any representation and warranty of VMC, HoldCo or
Viceroy being untrue or incorrect in any material
respects;
(ii) the non-fulfilment of any conditions set forth in
this Agreement; or
(iii) any adverse material change in the business,
operations, assets, liabilities, ownership, capital
or financial position or condition of Paredones, or
change in a material fact that has a significant
adverse affect on, or would reasonably be expected to
have a significant adverse affect on, the Business,
operations, Assets, liabilities, ownership, capital
or financial position or condition of Paredones.
VMC, HoldCo and Viceroy acknowledge that Vista and Granges are
relying upon the foregoing covenants and agreements in addition to the due
diligence and investigations of Vista and
-27-
Granges as an inducement to enter into this Agreement and to consummate the
transactions contemplated by this Agreement.
(2) AT CLOSING
In addition to the foregoing, each of VMC, HoldCo and Viceroy
covenants and agrees with Vista and Granges that it shall ensure that
immediately prior to the Closing:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of VMC, HoldCo and Viceroy shall be true and
correct in all material respects;
(b) EXECUTION AND DELIVERY RATIFIED AND AUTHORIZED. The execution
and delivery of this Agreement and the performance by each of
VMC, HoldCo and Viceroy of its respective obligations under
this Agreement shall be duly and validly ratified and
authorized by the Board of Directors of VMC, HoldCo and
Viceroy, as the case may be; and
(c) DUE EXECUTION. This Agreement shall be duly executed and
delivered by VMC, HoldCo and Viceroy and constitute a valid
and binding obligation of VMC, HoldCo and Viceroy enforceable
against VMC, HoldCo and Viceroy.
VMC, HoldCo and Viceroy acknowledge that Vista and Granges are
relying upon the foregoing covenants and agreements as an inducement to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement.
(3) POST-CLOSING
In addition to the foregoing, each of Viceroy, VMC and HoldCo
agrees and covenants with Vista and Granges that as soon as practicable after
the Closing Date and in any event no later than three months from the Closing
Date, it shall cause:
(a) the filing with the applicable Mexican Governmental
Authorities of any required instrument or document in order to
register in the name of Paredones such mining concessions
comprising the Mineral Rights which have not been registered
in the name of Paredones as of the Closing Date;
(b) the valid execution or endorsement of all deeds, bills of
sale, transfers and assignments, including any required
consents and approvals listed in SCHEDULE "H", in form and
substance acceptable to Vista, as Vista may reasonably require
and as are necessary to effectively transfer and convey title
to any Assets which, have not been formally transferred or
conveyed to Paredones as of the Closing Date, including,
without limitation, the Lands described in the agreements
listed as items 2 to 7 of SCHEDULE "B", the Surface Rights
Agreements described in items 14 and 15 of part B of SCHEDULE
"C" and the water concession described in item 1 of part B of
SCHEDULE "D";
(c) the delivery to such location or locations as instructed by
Vista in writing of any Assets which are not in the possession
or control of Paredones as of the Closing Date including, but
not limited to, the Technical Data located in Viceroy's
offices in Vancouver, British Columbia; and
(d) the cancellation of the registration at the Public Registry of
Mining of the Contract of Acquisition and Development of
mining rights entered into with respect to the mining
concessions San Antonio, La Rica, Tocopilla, Xxxxx, Xxxxx and
La Dificultad.
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VMC, HoldCo and Viceroy acknowledge that Vista and Granges are
relying upon the foregoing covenants and agreements as an inducement to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement.
4.2 COVENANTS OF VISTA AND GRANGES
(1) GENERAL
Each of Vista and Granges covenants and agrees with VMC,
HoldCo and Viceroy as follows:
(a) CONSENT OF STOCK EXCHANGES. Vista shall use its best efforts
to obtain the consent of the Stock Exchanges and comply with
all other regulatory requirements, requirements of the Stock
Exchanges and requirements of the Securities Laws and U.S.
Securities Laws applicable to the offering and sale of Vista
Securities, to Viceroy on a "private placement" basis as
contemplated by this Agreement prior to the Closing Date; and
(b) LISTING OF SHARES. Vista shall use its best efforts to ensure
that the Vista Shares and Vista Warrant Shares shall be listed
and posted for trading on the Stock Exchanges.
Vista and Granges acknowledge that VMC, HoldCo and Viceroy are
relying upon the foregoing covenants and agreements as an inducement to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement.
(2) AT CLOSING
In addition to the foregoing, each of Vista and Granges
covenants and agrees with VMC, HoldCo and Viceroy that immediately prior to the
Closing:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Vista and Granges shall be true and correct in
all material respects;
(b) EXECUTION AND DELIVERY RATIFIED AND AUTHORIZED. The execution
and delivery of this Agreement and the performance by each of
Vista and Granges of its respective obligations under this
Agreement shall be duly and validly ratified and authorized by
the Board of Directors of Vista and Granges, as the case may
be; and
(c) DUE EXECUTION. This Agreement shall be duly executed and
delivered by Vista and Granges and constitute a valid and
binding obligation of Vista and Granges, enforceable against
Vista and Granges.
Vista and Granges acknowledge that VMC, HoldCo and Viceroy are
relying upon the foregoing covenants and agreements as an inducement to enter
into this Agreement and to consummate the transactions contemplated by this
Agreement.
(3) POST-CLOSING
In addition to the foregoing, Vista covenants and agrees with
VMC, HoldCo and Viceroy as follows:
(a) REGISTRATION STATEMENT. Vista shall include the Vista Shares
and the Vista Warrant Shares in the next registration
statement filed with the SEC and in any event, shall use
commercially reasonable efforts to prepare and file a
registration statement with the SEC
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with respect to the Vista Shares and the Vista Warrant Shares
within six months of the Closing Date.
(b) PAYMENT OF IVA TAXES. As soon as is reasonably practicable
after the Closing Date, Vista shall cause Paredones to apply
to the appropriate Mexican Governmental Authorities for a
refund of the valued added tax ("IVA") recoverable and
generated by virtue of the activities carried on by Paredones
prior to Closing. Vista shall pay to, or as directed by, VMC
or HoldCo an amount equal to the amount of any such IVA
refunded to Paredones less any reasonable costs or expenses
that Vista or Paredones have incurred in connection therewith.
Notwithstanding the foregoing, VMC, HoldCo and Viceroy
acknowledge and agree that neither Vista nor Paredones shall
be liable if, for any reason, such IVA refund is rejected or
denied by Mexican Governmental Authorities.
Vista acknowledges that VMC, HoldCo and Viceroy are relying
upon the foregoing covenants and agreements as an inducement to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
ARTICLE 5
CONDITIONS PRECEDENT
5.1 MUTUAL CONDITIONS PRECEDENT
The obligations of the parties to complete the sale of the
Purchased Shares and the transactions contemplated by this Agreement are subject
to the following conditions being satisfied on or before the Closing, which
conditions are for the mutual benefit of all parties to this Agreement and may
be waived in whole or in part only if jointly waived by all of the parties to
this Agreement:
(a) all material approvals, authorizations or consents, including
approvals by Governmental Authorities, regulatory authorities,
third parties and judicial approvals and orders legally
required for the consummation of the Agreement and the
transactions contemplated by this Agreement, shall have been
obtained or received from the persons, authorities or bodies
having jurisdiction in the circumstances; and
(b) none of the approvals, authorizations, consents, orders, laws
or regulations contemplated in this Section 5.1 shall have
contained terms or conditions or require undertakings or
security deemed unsatisfactory or unacceptable by any of the
parties hereto acting reasonably.
5.2 CONDITIONS FOR THE BENEFIT OF VMC, HOLDCO AND VICEROY
The obligation of VMC, HoldCo and Viceroy to complete the sale
of the Purchased Shares and the transactions contemplated by this Agreement is
subject to the satisfaction on or before the Closing, for the exclusive benefit
of VMC, HoldCo and Viceroy, of each of the following conditions:
(a) the representations and warranties of Vista and Granges shall
be true and correct in all material respects as at the Closing
with the same force and effect as if such representations and
warranties had been made at and as of the Closing;
(b) Vista and Granges shall have, in all material respects,
performed and complied with all covenants and agreements
contained in this Agreement to be performed or complied
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with, or caused to be performed or complied with, by Vista and
Granges at or prior to the Closing;
(c) Vista shall have delivered to VMC and HoldCo at the Closing:
(i) a certified cheque representing the sum of
$1,000,000;
(ii) a share certificate representing 303,030 Vista
Shares;
(iii) a Warrant Certificate representing 303,030 Vista
Warrants;
(iv) certified copies of resolutions of the directors of
Vista and Granges approving this Agreement and all
other transactions contemplated by this Agreement;
(v) a wire transfer representing the sum of US$45,962.73
for mining duties corresponding to the second
semester of 2002 paid by Viceroy, VMC or HoldCo with
respect to the Mineral Rights; and
(vi) such other documentation and assurances as may be
reasonably required by VMC, HoldCo, or Viceroy, or
their counsel;
(d) each of Vista and Granges shall have delivered to VMC, HoldCo
and Viceroy a certificate, dated as of the Closing, and signed
by any two of its officers certifying that:
(i) the representations and warranties of Vista and
Granges herein contained are true and correct at the
Closing;
(ii) each of Vista and Granges has performed and complied
with all covenants and agreements contained in this
Agreement to be performed or complied with by Vista
and Granges at or prior to the Closing; and
(iii) all necessary corporate action has been taken by
Vista and Granges to authorize the execution and
delivery of this Agreement and to consummate the
transactions contemplated by this Agreement; and
(e) counsel to Vista and Granges shall have delivered to VMC,
HoldCo and Viceroy favourable legal opinions, dated as of the
Closing Date, in form and content to the reasonable
satisfaction of VMC, HoldCo and Viceroy and with respect to
all such matters as VMC, HoldCo and Viceroy may reasonably
request including, without limitation, the following:
(i) each of Vista and Granges is duly organized and is a
validly existing company, is in good standing under
applicable laws with respect to the filing of annual
returns, and is duly qualified to carry on business
and own property under the laws of their respective
jurisdiction of organization;
(ii) this Agreement has been duly authorized by all
necessary corporate action on the part of Vista and
Granges, has been duly executed and delivered by and
on behalf of Vista and Granges, and is valid and
legally binding upon Vista and Granges;
(iii) all necessary steps, authorizations and approvals
have been taken or obtained by Vista and Granges to
authorize the execution and delivery by Vista and
Granges of the Agreement and the performance of their
respective obligations thereunder;
-31-
(iv) the authorized and issued share capital of Vista;
(v) the Vista Shares have been duly and validly allotted
and issued as fully-paid and non-assessable common
shares in the capital of Vista;
(vi) the Warrant Shares issuable upon the exercise of the
Vista Warrants have been duly and validly allotted
for issuance and will, upon due exercise of the Vista
Warrants in accordance with the terms of the Warrant
Certificate and receipt by Vista of payment therefor,
be validly issued as fully paid and non-assessable
common shares in the capital of Vista.
(vii) the Vista Warrants have been duly and validly
created;
(viii) the Vista Shares and the Vista Warrant Shares have
been conditionally approved for listing on the Stock
Exchanges, subject to the filing of the required
documents within the time stipulated by the Stock
Exchanges;
(ix) Vista is a "reporting issuer" not in default under
the SECURITIES ACT (British Columbia);
(x) Vista is a "qualifying issuer" as that term is
defined in Canadian Multilateral Instrument 45-102
RESALE OF SECURITIES;
(xi) no prospectus is required and, except as have been
obtained or completed, no approval or consent of or
filing with any governmental authority in British
Columbia or the Stock Exchanges is required in order
to qualify the issuance and sale by Vista of the
Vista Securities except for the filing within 10 days
of the Closing Date of reports in prescribed form
prepared and executed in accordance with the
Securities Laws and except as may be required by the
Stock Exchanges in connection with the sale of the
Vista Securities; and
(xii) the hold periods and resale restrictions applicable
to the Vista Securities under the Securities Laws and
the U.S. Securities Laws,
it being understood that counsel may rely as to matters of
fact, to the extent appropriate in the circumstances, on
certificates of Vista and Granges executed on behalf of Vista
and Granges by a senior officer of Vista and Granges, as the
case may be.
The foregoing conditions are inserted for the exclusive benefit of VMC, HoldCo
and Viceroy and may be waived in whole or in part by VMC, HoldCo or Viceroy at
any time.
5.3 CONDITIONS FOR THE BENEFIT OF VISTA AND GRANGES
The obligation of Vista and Granges to complete the purchase
of the Purchased Shares and the transactions contemplated by this Agreement is
subject to the satisfaction on or before the Closing, for the exclusive benefit
of Vista and Granges, of each of the following conditions:
(a) the representations and warranties of VMC, HoldCo and Viceroy
herein shall be true and correct in all material respects as
at the Closing with the same force and effect as if such
representations and warranties had been made at and as of the
Closing;
(b) VMC, HoldCo and Viceroy shall have, in all material respects,
performed and complied with all covenants and agreements
contained in this Agreement to be performed or
-32-
complied with, or caused to be performed or complied with, by
VMC, HoldCo or Viceroy at or prior to the Closing;
(c) as of the date of this Agreement, there shall not have been
any adverse material change in the business, operations,
assets, liabilities, ownership, capital or financial position
or condition of Paredones, or change in a material fact that
has a significant adverse affect on, or would reasonably be
expected to have a significant adverse effect on the Business,
operations, Assets, liabilities, ownership, capital, or
financial position or condition of Paredones;
(d) as of the date of this Agreement by Vista, there are no
outstanding options, warrants or other rights to acquire
shares of Paredones or any material change in compensation or
benefits arrangements with any director, officer or employee
of Paredones;
(e) as of the date of this Agreement there shall exist no actions,
suits, judgements, litigation, investigations or proceedings
outstanding, pending or threatened in writing against or
affecting Paredones, VMC, HoldCo or Viceroy in connection with
the transactions contemplated hereby;
(f) the receipt by Vista and Granges of confirmation satisfactory
to Vista and Granges that the purchase of the Purchased Shares
and the transactions contemplated by this Agreement have been
approved by the required majority of the shareholders of VMC,
HoldCo and Viceroy or that such approvals are not required;
(g) VMC, HoldCo and Viceroy shall have delivered to Vista and
Granges at the Closing:
(i) resignations in writing of all directors and officers
of Paredones;
(ii) duly executed share certificates registered on the
books of Paredones representing 103,913,985 Purchased
Shares registered in the name of Vista and one
Purchased Share registered in the name of Granges;
(iii) certified copies of resolutions of the directors of
VMC, HoldCo and Viceroy approving the transfer of the
Purchased Shares to Vista and Granges all other
transactions contemplated by this Agreement;
(iv) minutes of the shareholders' meeting of Paredones
approving the transfer of the Purchased Shares to
Vista and Granges;
(v) confirmation, in a form satisfactory to Vista, that
the execution and performance of this Agreement by
VMC, HoldCo and Viceroy has been approved by the
required majority of the shareholders of VMC, HoldCo
and Viceroy or that such approval is not required;
(vi) all corporate records of Paredones, including the
updated minutes books of Paredones;
(vii) all Assets in the possession of Viceroy, VMC and
HoldCo and not otherwise in the possession or control
of Paredones, including the Technical Data located in
Viceroy's offices in Vancouver, British Columbia;
(viii) a general or special power of attorney, whereby VMC
appoints a resident in Mexico as its representative
for Mexican tax purposes;
-33-
(ix) a general or special power of attorney, whereby
HoldCo appoints a resident in Mexico as its
representative for Mexican tax purposes; and
(x) such other documentation and assurances reasonably
required by Vista or its counsel;
(h) each of VMC, HoldCo and Viceroy shall have delivered to Vista
and Granges a certificate, dated as of the Closing, and signed
by any two of its officers acceptable to Vista certifying
that:
(i) the representations and warranties of VMC, HoldCo and
Viceroy herein contained are true and correct at the
Closing;
(ii) each of VMC, HoldCo and Viceroy has performed and
complied with all covenants and agreements contained
in this Agreement to be performed or complied with by
VMC, HoldCo and Viceroy at or prior to the Closing;
(iii) all necessary corporate action has been taken by VMC,
HoldCo and Viceroy to authorize the execution and
delivery of this Agreement and to consummate the
transactions contemplated by this Agreement;
(iv) as of the date of this Agreement, there shall not
have been any adverse material change in the
business, operations, assets, liabilities, ownership,
capital or financial position or condition of VMC,
HoldCo or Paredones, or change in a material fact
that has a significant adverse affect on, or would
reasonably be expected to have a significant adverse
effect on the Business, operations, Assets,
liabilities, ownership, capital, or financial
position or condition of Paredones;
(v) as of the date of this Agreement by Vista, there are
no outstanding options, warrants or other rights to
acquire shares of Paredones or any material change in
compensation or benefits arrangements with any
director, officer, attorneys or employee of
Paredones;
(vi) as of the date of this Agreement there shall not have
existed any actions, suits, judgements, litigation,
investigations or proceedings outstanding, pending or
threatened in writing against or affecting the VMC,
HoldCo, Paredones or Viceroy in connection with the
transactions contemplated hereby; and
(i) counsel to VMC, HoldCo Viceroy and Paredones shall have
delivered to Vista and Granges favourable legal opinions,
dated the Closing, in form and content to the reasonable
satisfaction of Vista and Granges and with respect to all such
matters as Vista and Granges may reasonably request including,
without limitation, the following:
(i) each of VMC, HoldCo and Viceroy is duly organized and
is a validly existing company, is in good standing
under applicable laws with respect to the filing of
annual returns, and is duly qualified to carry on
business and own property under the laws of the
Province of British Columbia;
(ii) Paredones has all necessary corporate power and
capacity to own the Assets and to carry on its
Business as now conducted;
-34-
(iii) this Agreement has been duly authorized by all
necessary corporate action on the part of VMC, HoldCo
and Viceroy, has been duly executed and delivered by
and on behalf of VMC, HoldCo and Viceroy, and is
valid and legally binding upon VMC, HoldCo and
Viceroy;
(iv) all necessary steps, authorizations and approvals
have been taken or obtained by VMC, HoldCo and
Viceroy to authorize the execution and delivery by
VMC, HoldCo and Viceroy of the Agreement and the
performance of their respective obligations
thereunder;
(v) so far as counsel is aware, none of the execution and
delivery of this Agreement, nor the fulfilment of its
terms, conflicts or shall conflict with or results or
shall result in a breach of any of the terms,
conditions or provisions of the Constating Documents
of either VMC, HoldCo, Paredones or Viceroy,
resolutions of the shareholders and directors of VMC,
HoldCo, Paredones or Viceroy, any applicable laws,
or, so far as counsel is aware, any material license
or permit issued to VMC, HoldCo, Paredones or Viceroy
or any material agreement or instrument to which VMC,
HoldCo, Paredones or Viceroy is a party;
(vi) so far as counsel is aware, there is no threatened,
pending or actual litigation affecting or involving
Paredones;
(vii) the authorized share capital of Paredones;
(viii) the certificates representing the Purchased Shares
have been duly endorsed in favour of Vista and
Granges;
(ix) according to the register of shareholders of
Paredones, VMC and HoldCo are the legal holders of
all of the issued and outstanding shares of
Paredones;
(x) according to the register of shareholders of VMC and
HoldCo, Viceroy is the legal holder of all of the
issued and outstanding shares of VMC and VMC is the
legal holder of all of the issued and outstanding
shares of HoldCo;
(xi) all necessary steps, authorizations and approvals
have been taken or obtained by Paredones, VMC, HoldCo
and Viceroy to authorize the due and valid transfer
of the Purchased Shares at the Closing from VMC and
HoldCo to Vista and Granges in accordance with the
terms of the Agreement and the consummation of the
transactions contemplated by the Agreement; and
(xii) the form of certificates representing the Purchased
Shares comply with the constating documents of
Paredones, the applicable corporate statutes of
Mexico and have been duly issued,
it being understood that counsel may rely as to matters of
fact, to the extent appropriate in the circumstances, on
certificates of VMC, HoldCo, Paredones and Viceroy executed on
behalf of VMC, HoldCo, Paredones and Viceroy by a senior
officer of VMC, HoldCo, Paredones and Viceroy, as the case may
be.
The foregoing conditions are inserted for the exclusive benefit of Vista and
Granges and may be waived in whole or in part by Vista and Granges at any time.
-35-
ARTICLE 6
SURVIVAL OF REPRESENTATIONS AND INDEMNITY
6.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations, warranties and covenants of each of the
parties hereto contained in this Agreement shall survive the Closing and the
completion of the transactions contemplated hereby and shall continue in full
force and effect for a period of one year thereafter.
6.2 INDEMNITY
(a) In addition to any other rights or remedies Vista and Granges
have under this Agreement, each of VMC, HoldCo and Viceroy
shall indemnify and save Vista and Granges harmless from and
against all losses, costs, damages, expenses, penalties and
liabilities suffered or incurred by Granges or Vista by reason
of:
(i) a breach of any representation or warranty, covenant
or agreement in this Agreement by VMC, HoldCo or
Viceroy; and
(ii) without limiting the generality of the foregoing, any
Liability, disclosed or undisclosed, known or
unknown, determined or undetermined, which was
created or existing or arose out of acts or omissions
prior to the Closing in connection with the Assets,
the Business or the Purchased Shares which Granges or
Vista is required to discharge, to the extent such
Liability has not been incurred or created by Granges
or Vista after the Closing,
provided such indemnity shall be limited to a maximum amount
equal to the Purchase Price.
(b) Until the amount payable by Vista to VMC and HoldCo under
Section 2.3(c) is paid in accordance with the terms of this
Agreement, such amount payable shall be offset by any amount
for which VMC, HoldCo or Viceroy are legally obligated to pay
pursuant to the indemnity provided by VMC, HoldCo and Viceroy
under Subsection 6.2(a), provided such amount is in excess of
$25,000.
ARTICLE 7
GENERAL
7.1 TIME AND PLACE OF CLOSING
The Closing shall take place at 12:00 o'clock p.m. (Vancouver
time) on the Closing Date at the offices of Xxxxxx Xxxxxx Xxxxxxx LLP in
Vancouver, British Columbia, or at such other place or date as may be mutually
agreed by the parties.
7.2 NOTICES
Any notice or other communication which is required or
permitted to be given pursuant to any provision of this Agreement shall be in
writing, delivered personally, by registered mail or by telecopy, and addressed
as follows:
-36-
(a) in the case of a notice or other communication to VMC, HoldCo
or Viceroy:
Viceroy Resource Corporation
Xxxxx 000, 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
with a copy to:
DuMoulin Black
00xx Xxxxx, 000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxx X. Xxxx
Telecopier Number: (000) 000-0000
(b) in the case of a notice or other communication to Granges or
Vista:
Vista Gold Corp.
Suite 5, 0000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx
X.X.X. 00000
Attention: Xxxxxx X. (Jock) XxXxxxxx
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Gervais LLP
1200 Waterfront Centre
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxx X. Xxxxxx
Telecopier Number: (000) 000-0000
or such other address or telecopier number as a party may, from time to time,
advise the other parties hereto by notice in writing given in accordance with
the foregoing. The date of receipt of any such notice shall be deemed to be the
date of delivery thereof, if delivered, and on the day of telecopying, if
telecopied, provided such day is a Business Day and, if not, on the first
Business Day thereafter.
7.3 CONFIDENTIALITY AND DISCLOSURE
(a) Except as may be required by applicable laws, any information
concerning any of VMC, HoldCo, Viceroy, Granges, Vista or
Paredones and their respective affiliates disclosed to the
other parties to this Agreement or their representatives,
which has not been publicly disclosed, shall be kept strictly
confidential by them and shall not be disclosed or used by the
recipients thereof whether or not the Closing occurs until
publicly disclosed by the
-37-
party to which such information relates. Further, it is agreed
and acknowledged that all such information is being disclosed
solely for the purpose of completing the transactions
contemplated by this Agreement and shall not be used for any
other purpose. In the event that the Closing does not occur,
all documents, if any, of a confidential nature, delivered
VMC, HoldCo, Viceroy, Granges or Vista or their respective
representatives and any copies thereof shall be immediately
returned to the party to which such information relates.
(b) Except as may be required under applicable laws, no press
releases or material change reports relating to the
transactions contemplated hereby shall be issued by any party
to this Agreement, nor shall the terms of this letter be
disclosed to third parties other than the representatives of
the parties, without the mutual consent of the other parties
which consent shall not be unreasonably withheld. All
necessary press releases and material change reports required
form shall be submitted for approval by the party preparing
such press release or material change report to the other
parties prior to the filing thereof in accordance with
applicable laws, it being understood that if within five days
after such approval is requested no answer is received from
the other party, such approval shall be deemed to be granted.
7.4 DISPUTE RESOLUTION AND ARBITRATION
In the event of a dispute under or related to this Agreement,
the parties agree to negotiate diligently and in good faith the satisfactory
resolution of such dispute. Failing such resolution, the dispute shall be
resolved by binding arbitration pursuant to the COMMERCIAL ARBITRATION ACT
(British Columbia). Submission to arbitration shall be to a single arbitrator
appointed by agreement between Vista and Viceroy, on behalf of VMC and HoldCo,
within 10 days after either party gives notice to the other specifying the
matter to be submitted to arbitration. Failing the appointment of an arbitrator
within such 10 days the arbitrator may be appointed in the manner provided under
section 17 of the COMMERCIAL ARBITRATION ACT (British Columbia). The arbitration
shall take place in the City of Vancouver, British Columbia.
7.5 GOVERNING LAW
This Agreement shall be governed by and construed in
accordance with the Laws of the Province of British Columbia and the Laws of
Canada applicable therein and each of the parties irrevocably attorns to the
jurisdiction of the courts of British Columbia. Notwithstanding the foregoing,
matters relating to the transfer of the Purchased Shares will be governed by
Mexican Laws.
7.6 BINDING EFFECT
This Agreement shall be binding upon and shall enure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
7.7 TIME OF ESSENCE
Time is of the essence of this Agreement.
7.8 ASSIGNMENT
Subject to the express provisions of this Agreement, neither
of the parties may assign his or its rights or obligations under this Agreement
without the prior written consent of the other, such consent not to be
unreasonably withheld.
-38-
7.9 FURTHER ASSURANCES
Each of the parties, upon the request of any other party,
whether before or after the Closing, shall do, execute, acknowledge and deliver
or cause to be done, executed, acknowledged or delivered all such further acts,
deeds, documents, assignments, transfers, conveyances and assurances as may be
reasonably necessary or desirable to effect complete consummation of the
transactions contemplated by this Agreement.
7.10 EXPENSES
Each of the parties shall each pay their respective expenses,
including legal and accounting fees, incurred in connection with this Agreement
and the transactions contemplated by this Agreement.
7.11 ENTIRE AGREEMENT
The terms and provisions contained in this Agreement
constitute the entire agreement between the parties pertaining to the subject
matter hereof and supersede all prior agreements, understandings, negotiations
and discussions, whether oral or written, between the parties with respect to
the subject matter hereof.
-39-
7.12 COUNTERPARTS AND FACSIMILE
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. This Agreement and any counterpart
thereof may be executed by telecopy and when delivered shall be deemed to be an
original.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
VICEROY MINERALS CORPORATION
Per:
/s/ Xxxxxx Netolitsky
-----------------------------------
Authorized Signatory
Per:
/s/ Xxxxx Xxxxx
-----------------------------------
Authorized Signatory
408178 BRITISH COLUMBIA LTD.
Per:
/s/ Xxxxxx Netolitsky
-----------------------------------
Authorized Signatory
Per:
/s/ Xxxxx Xxxxx
-----------------------------------
Authorized Signatory
VICEROY RESOURCE CORPORATION
Per:
/s/ Xxxxxx Netolitsky
-----------------------------------
Authorized Signatory
Per:
/s/ Xxxxx Xxxxx
-----------------------------------
Authorized Signatory
VISTA GOLD CORP.
Per:
/s/ Xxxxxx X. XxXxxxxx
-----------------------------------
Xxxxxx X. (Jock) XxXxxxxx,
President
Per:
/s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx
Vice President, Finance and
Chief Financial Officer
-40-
GRANGES INC.
Per:
/s/ Xxxxxx X. XxXxxxxx
-----------------------------------
Authorized Signatory
Per:
/s/ Xxxxx Xxxxxx
-----------------------------------
Authorized Signatory
-41-
SCHEDULE "A"
EQUIPMENT
MINERA PAREDONES AMARILLOS SA DE CV
DETAIL LISTING OF FIXED ASSETS
(IN AMERICAN DLLS)
---------------------------------------------------------------------------------------------------------------------------
CANT. DESCRIPCION AREA CODE SUB-TOTAL IVA TOTAL
---------------------------------------------------------------------------------------------------------------------------
1 Conmutador Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Contestadora Telefonica Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Desviador de llamadas Digital Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Radio receiving station Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
4 Telefono con bocina Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
2 Telefono digital Panasonic Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Telefono GE Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
5 Telefono General electric Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Telefono Inalambrico Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
2 Telefono panasonic con bocina Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
1 telefono panasonic inalambrico Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
3 Telefono panasonic sin bocina Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
Radios y Antena Comunication Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Sample Prep Equipment Prep Lab Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Releted Transformer Prep Lab Equipment
---------------------------------------------------------------------------------------------------------------------------
9,091 909 10,000
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
1 Blazer model 1994 Transportation Equipment 7,091 709 7,800
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
1 Archivero de 2 cajones Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Archivero de 2 cajones color Madera Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Archivero de 4 gavetas Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Archivero xx xxxxxx caja xxxxxx de 3
cajones color gris Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
2 Archiveros de 2 cajones Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
2 Carretas de Water lines Cintas
metricas Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Copiadora Xerox Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Copiadora Xerox XC1040 Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Credensa color madera de
1.70cm x .40cm Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Digitalizador con reticula Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Escritorio de 1.40cm x .70 de
2 cajones Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
CANT. DESCRIPCION AREA CODE SUB-TOTAL IVA TOTAL
---------------------------------------------------------------------------------------------------------------------------
1 Estuche para Laboratorio color negro Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Fax canon model L700 Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Fax Sharp Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 librero Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Librero de 1.81cm x .71cm color
Madera Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Mesa de comedor desarmable Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Mesa redonda Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Mesa redonda con 4 xxxxxx Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Mesita secretarial Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Microscopio Bausch-Lomb
Model - ASZ130 Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
0 Xxxxxxxxxxx Xxxxxx-Xxxx
Xxxxx - XXX00X0 Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Microscopio fiberoptic Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Microscopio olimpus SZ30 Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Mueble 2 puertas de 2 divisiones
1.60cm x .83cm Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Mueble para computadora de
1.19 X 1.33 Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Projector de acetatos 3M Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Projector de diapositivas completo
con 4cajitas Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Refrigerador con Portagarrafon Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Silla ejecutiva color negro Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Silla gerencial Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
5 xxxxxx ejecutivas negras Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 teodolito con estuche Office furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Computadora Acer Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Computadora Compaq Prolinea 4/50 Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Computadora Micron con Accs. Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Impresora Canon BJC-210 Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Impresora Deskjet 560jet Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Impresora HP Laserjet4 Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Impresora HP paint jet XL300 Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 impresora HPdeskjet320 Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Impresora Okidata Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Iomega Zip Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Laptop gateway 2000 y accs Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 monitor panasonic Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Monitor Syncmaster 3 Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
A-1
---------------------------------------------------------------------------------------------------------------------------
CANT. DESCRIPCION AREA CODE SUB-TOTAL IVA TOTAL
---------------------------------------------------------------------------------------------------------------------------
1 Plotter Novajett II Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 supermonitor Magnavox Cumputer Equipment
---------------------------------------------------------------------------------------------------------------------------
1 teclado Acer N. K6311121182 Equipo de computo 10,000 1,000 11,000
---------------------------------------------------------------------------------------------------------------------------
----------------------------------------
26,182 2,618 28,800
----------------------------------------
----------------------------------------
DETAIL LISTING OF FIXED ASSETS (JV) & (V)
(IN PESOS)
---------------------------------------------------------------------------------------------------------------------------
CANT. DESCRIPCION AREA CODE SUB-TOTAL IVA TOTAL
---------------------------------------------------------------------------------------------------------------------------
1 Casa Habitacion (Storage) Building 74,158.00 74,158.00
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
1 Partial Weather Station Comunication Equipment 87,833.84 87,833.84
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
4 Xxxxxx Ejecutivas negras Office Furnicture and Equipment
---------------------------------------------------------------------------------------------------------------------------
1 Mesa redonda Ejecutiva Office Furnicture and Equipment 12,151.52 1,215.15 13,366.67
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
1 Software (Contpaq & Nomipaq) Computer Equipment 4,090.00 409.00 4,499.00
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
1 Printer Okidata Microline 320 turbo Computer Equipment 2,945.45 294.55 3,240.00
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
1 Computadora Completa Computer Equipment 13,764.00 1,376.00 15,140.00
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
194,942.81 3,294.70 198,237.51
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
A-2
SCHEDULE "B"
LANDS
1. Purchase Agreement entered into on May 18, 1999, by and between Xxxxx
Xxxxxxx Xxxxxxx and Minera Paredones Amarillos, S.A. de C.V., granted
in a public deed number 8,962 before Notary Public number 11 of La Paz,
Baja California Sur.
2. Purchase Agreement entered into on July 24, 1997, by and between Xxxxx
Xxxx Xxxxxx Xxxxxxx and Xxxxxx Xxxxxxx Xxxxxx and Echo Bay Mexico, S.A.
de C.V., granted in a public deed number 15,057 before Notary Public
number 2 of La Paz, Baja California Sur.*
3. Purchase Agreement entered into on July 24, 1997, by and between
Salvador Xxxxxxx Xxxxx Xxxxxxx and Echo Bay Mexico, S.A. de C.V.,
granted in a public deed number 15,063 before Notary Public number 2 of
La Paz, Baja California Sur.*
4. Purchase Agreement entered into on July 24, 1997, by and between
Xxxxxxx Xxxxx Xxxxxx Xxxxxxx and his wife Xxxxxxx X. Xxxxxx Xxxxxxx and
Echo Bay Mexico, S.A. de C.V., granted in a public deed number 15,058
before Notary Public number 2 of La Paz, Baja California Sur.*
5. Purchase Agreement entered into on July 24, 1997, by and between
Xxxxxxxxx Xxxx Xxxxxxx and Echo Bay Mexico, S.A. de C.V., granted in a
public deed number 15,061 before Notary Public number 2 of La Paz, Baja
California Sur.*
6. Purchase Agreement entered into on July 24, 1997, by and between Xxxxxx
Xxxxxx Xxxxxxx and Echo Bay Mexico, S.A. de C.V., granted in a public
deed number 15,056 before Notary Public number 2 of La Paz, Baja
California Sur.*
7. Purchase Agreement entered into on July 24, 1997, by and between
Xxxxxxxxx Xxxxxx Xxxxxxx and Echo Bay Mexico, S.A. de C.V., granted in
a public deed number 15,062 before Notary Public number 2 of La Paz,
Baja California Sur.*
--------
* The Lands described in these agreements are currently registered in the
name of Echo Bay Mexico, S.A. de C.V. but will be transferred to Paredones
after the Closing in accordance with Section 4.1(3) of this Agreement.
B-1
SCHEDULE "C"
MATERIAL CONTRACTS
A. MINING CONCESSION AGREEMENTS:
1. Contract of Assignment of Rights entered into on September 8,
1997 between Minera Tepmin, S.A. de C.V., Productos Metalicos
y Derivados, S.A. de C.V. and Echo Bay Mexico, S.A. de C.V.
("EBM"), which Contract is not recorded with the Public
Registry of Mining in Mexico, but it is considered as valid
among the parties, pertaining to the Tocopilla, El Arbol de
Oro and Picachudo Concessions.
2. Contract of Assignment of Rights entered into on October 1,
1997 between Minera Paredones Amarillos, S.A. de C.V.
("PAREDONES") and EBM, which Contract was ratified before a
Notary Public on May 12, 1998 providing for the assignment to
Paredones of the interest of Echo Bay Mexico, S.A. de C.V. in
the Contract of Assignment of Rights entered into on September
8, 1997.
3. Purchase Agreement among EBM, Paredones et al, dated October
15, 1999, and amended December 8, 1999 which, among other
things, grants a 2% net profits royalty to EBM in an amount
not to exceed U.S. $2,000,000 with respect to the exploitation
of the following mining concessions:
(a) La Rica
(b) Maile
(c) Xxxxx
(d) Tocopilla
(e) San Antonio
(f) La Dificutad
(g) Xxxxx Perdido
(h) La Encantada Fraccion 1
(i) La Encantada Fraccion 2
(j) La Encantada Fraccion I
(k) La Encantada Fraccion II
(l) Hole 1 Fraccion I
(m) Hole 1 Fraccion II
(n) Hole 1 Fraccion III
(o) Cerro Pedregoso
(p) Xxxxx Perdido Fraccion I
(q) Xxxxx Perdido Fraccion II
(r) Xxxxx Perdido Fraccion III
(s) Xxxxx Perdido Fraccion IV
(t) Xxxxx Perdido Fraccion V
4. Stock Purchase Agreement entered into solely for the purpose
of registering the Echo Bay Net Profit Obligation with the
Public Registry of Mining in Mexico dated January 1, 2000
among EBM, Paredones and HoldCo.
C-1
B. SURFACE RIGHTS AGREEMENTS:
1. Contract of Promise of Purchase and Sale, Subject to a
Specific Condition, entered into and ratified before a Notary
Public on April 26, 1997, by and between, as first party, Xxxx
Xxxxxx Xxxxxxxx Xxxxx acting as legal representative of the
estate of Xxxx Xxxxxxxx Xxxxxxxx; and, as a second party,
Paredones.
2. Contract of Promise of Purchase and Sale, Subject to a
Specific Condition, entered into on April 26, 1997, by and
between, as first party, Xxxx Xxxxxxxx Xxxxxxxx; and, as a
second party, Paredones. Such contract was ratified before a
Notary Public on April 26, 1997.
3. Contract of Promise of Purchase and Sale, Subject to a
Specific Condition, entered into on April 26, 1997, by and
between, as first party, Xxxxxx Xxxxx Xxxxxxx Xxxxxxx; and, as
a second party, Paredones. Such contract was ratified before a
Notary Public on April 26, 1997.
4. Contract of Promise of Purchase and Sale, Subject to a
Specific Condition, entered into on April 26, 1997, by and
between, as first party, Xxxxx Xxxxxxx Xxxxxxx Xxxxxxx; and,
as a second party, Paredones. Such contract was ratified
before a Notary Public on April 26, 1997.
5. Private Contract of Assignment of Rights and/or of Promise of
Sale, entered into on February 26, 1998, by and between
Xxxxxxxxx Xxxxxx Xxxxxx and Paredones ratified before a Notary
Public on March 4, 1998.
6. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 7, 1997, by and between Xxxx Xxxxxxxx Xxxxxxx
Xxxxxxxx as holder or possessor of a fraction of the servient
tenement known as "Xxxxx Xxxxx" and Paredones as holder of the
dominant tenement.
7. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 7, 1997, by and between Xxxx Xxxxxx, Xxxx
Antonio, Xxxxx Xxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx and Xxxxxx
Xxxxxxx, all of them with last names Xxxxxxx Xxxxxxx, as
owners of a fraction of the servient tenement known as "La
Junta" and Paredones as holder of the dominant tenement.
8. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 14, 1997, by and between Xxxxxxx Xxxxxxxx
Xxxxxxxxx Guluarte, as owners of a fraction of the servient
tenement under the name of "Palmarito de los Sauces", known as
"Piedras Cuatas" and Paredones as holder of the dominant
tenement.
9. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 7, 1997, by and between Xxxx Xxxxxx Xxxxxxxx
Xxxxx as holder or possessor of a fraction of the servient
tenement known as "Palmarito de los Sauces" and Paredones as
holder of the dominant tenement.
C-2
10. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 7, 1997, by and between Xxxx Xxxxxx Xxxxxxxx
Xxxxx as holder or possessor of a fraction of the servient
tenement known as "Palmarito de los Sauces" and Paredones as
holder of the dominant tenement.
11. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 7, 1997, by and between Xxxx Xxxxxxxx Xxxxxxx
Xxxxxxx as holder or possessor of a fraction of the servient
tenement known as "Huatamote or Xxxxxx del Huatamote" and
Paredones as holder of the dominant tenement.
12. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 7, 1997, by and between Xxxxx Xxxxxxxxx Xxxxxxx
Xxxxxxxx as holder or possessor of a fraction of the servient
tenement known as "Las Gallinas y sus Demasias" and Paredones
as holder of the dominant tenement.
13. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 7, 1997, by and between Xxxxx Xxxxxxxx Xxx
Xxxxxxx Xxxxxxx as holder or possessor of a fraction of the
servient tenement known as "El Tule" also known as "Xxxxxx
Xxxxx" and Paredones as holder of the dominant tenement.
14. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on February 8, 1997, by and between the ejido "El
Xxxxxxx" (el EJIDO) and Echo Bay Mexico, S.A. de C.V.*
15. Easement Agreement for the Benefit of the Federal Commission
of Electricity (Comision Federal de Electricidad/CFE), entered
into on April 18, 1997, by and between the ejido "El Triunfo"
(el EJIDO) and Echo Bay Mexico, S.A. de C.V.*
16. Easement Agreement (for the legal right of way and rights
concerning flowing waters - aqueduct), entered into on May 30,
1997 by and between Xxxx Xxxxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxx and Xxxxxx Xxxxxxx, all of them with
last names Xxxxxxx Xxxxxxx, as owners of the servient tenement
known as "La Junta" and Paredones as holder of the dominant
tenement, ratified before a Notary Public on August 4, 1997.
17. Easement Agreement (for the legal right of way and rights
concerning flowing waters -aqueduct), entered into on July 2,
1997 by and between Xxxxxxxxx Xxxxxx Xxxxxx, as owner of the
servient tenement known as "Palmarito de los Sauces" or "La
Cantora" and Paredones as holder of the dominant tenement,
ratified before a Notary Public on August 4, 1997.
18. Easement Agreement (for the legal right of way and rights
concerning flowing waters -aqueduct), entered into on
September 19, 1997 by and between Xxxxx Xxxxxxxx Xxxxxxxxx
Miranda, as owner of the servient tenement known as "El
Molino" or "Mesa
------
* These agreements are currently registered in the name of Echo Bay Mexico,
S.A. de C.V. but will be transferred after the Closing to Paredones in
accordance with Section 4.1(3) of this Agreement.
C-3
del Molino" and Paredones as holder of the dominant tenement,
ratified before a Notary Public on September 26, 1997.
19. Easement Agreement (for the legal right of way and rights
concerning flowing waters -aqueduct), entered into on May 30,
1997 by and between Xxxxx Xxxxxxx Xxxxxxxxx, as owner of the
servient tenement known as "Palmarito de los Sauces" and
Paredones as holder of the dominant tenement, ratified before
a Notary Public on August 4, 1997.
20. Easement Agreement (for the legal right of way and rights
concerning flowing waters - aqueduct), entered into on July 2,
1997 by and between Xxxx Xxxxxxx Xxxxxx, as owner of the
servient tenement, lot number 0105, of the area known as "Xxxx
Xxxxxxx" and Paredones as holder of the dominant tenement,
ratified before a Notary Public on July 4, 1997.
21. Easement Agreement (for the legal right of way and rights
concerning flowing waters - aqueduct), entered into on August
23, 1997 by and between Xxxxxx Xxxxxx Xxxxxxxxx Xxxxxxx, as
owner of the servient tenement known as "La Bajada del Molino"
and Paredones as holder of the dominant tenement, ratified
before a Notary Public on September 2, 1997.
22. Easement Agreement (for the legal right of way and rights
concerning flowing waters - aqueduct), entered into on May 30,
1997 by and between Xxxxxxx Xxxxxxxx Xxxxxxxxx Guluarte, as
owner of the servient tenement known as "Piedras Cuatas" a
fraction of the land "Palmarito de los Sauces" and Paredones
as holder of the dominant tenement, ratified before a Notary
Public on September 26, 1997.
23. Legal and Voluntary Easement of Access Agreement, entered into
on May 30, 1997, between Xxxx Xxxxxxxx Xxxxxxx Xxxxxxx, as
owner of the servient tenement, known as "El Huatamote" and
Paredones, as holder of the dominant tenement, ratified before
a Notary Public on July 10, 1997.
24. Legal and Voluntary Easement of Access Agreement, entered into
on May 30, 1997 between Xxxxxxxx Xxxxxxxx Vda. xx Xxxxxxx, as
owner of the servient tenement, known as "Las Gallinas y sus
Demasias" and Paredones, as holder of the dominant tenement,
ratified before a Notary Public on July 10, 1997.
25. Legal and Voluntary Easement of Access Agreement, entered into
on May 30, 1997 between Antonio Xxxxx Xxxx Xxxxxxx, as owner
of the servient tenement, known as "El Tule" and Paredones, as
holder of the dominant tenement, ratified before a Notary
Public on July 1, 1997.
26. Contract of Association, entered into on June 5, 1997 between
the Ejido "El Xxxxxxx" and Paredones.
C. SERVICES AGREEMENTS:
1. Echo Bay Services Agreement dated August 4, 1995 between
Servicios Echo Bay, S.A. de C.V. and Paredones.
C-4
SCHEDULE "D"
MINERAL RIGHTS
A. MINING CONCESSIONS
1. Lot: FRACCION LA PERLA
Title number: 199340
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: March 31, 1994
In effect until: Xxxxx 00, 0000
Xxxxxxx: 6,695.8001 hectares
Application: 4/1.3-2021
2. Lot: FRACCION LA PERLA 2 FRACCION I
Title number: 204187
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: December 18, 1996
In effect until: December 17, 2002
Surface: 15.4529 hectares
3. Lot: FRACCION LA PERLA 2 FRACCION II
Title number: 204188
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: December 18, 1996
In effect until: December 17, 2002
Surface: 3.7800 hectares
4. Lot: FRACCION LA PERLA 2 FRACCION III
Title number: 204189
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: December 18, 1996
In effect until: December 17, 2002
Surface: 7.8480 hectares
5. Lot: FRACCION LA PERLA 2 FRACCION IV
Title number: 204190
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: December 18, 1996
In effect until: December 17, 2002
Surface: 13.4799 hectares
D-1
6. Lot: XXXXX PERDIDO
Title number: 201147
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 9,759.5903 hectares
Application: 4/1.3-2221
7. Lot: XXXXX PERDIDO FRACCION I
Title number: 209346
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: March 30, 1999
In effect until: Xxxxx 00, 0000
Xxxxxxx: 9.7752 hectares
8. Lot: XXXXX PERDIDO FRACCION II
Title number: 209347
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: March 30, 1999
In effect until: Xxxxx 00, 0000
Xxxxxxx: 26.1006 hectares
9. Lot: XXXXX PERDIDO FRACCION III
Title number: 209348
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: March 30, 1999
In effect until: Xxxxx 00, 0000
Xxxxxxx: 117.0791 hectares
10. Lot: XXXXX PERDIDO FRACCION IV
Title number: 209349
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: March 30, 1999
In effect until: Xxxxx 00, 0000
Xxxxxxx: 3.3707 hectares
11. Lot: XXXXX PERDIDO FRACCION V
Title number: 209350
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: March 30, 1999
In effect until: Xxxxx 00, 0000
Xxxxxxx: 2.5644 hectares
D-2
12. Lot: HOLE 1 FRACCION I
Title number: 201158
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 25.4848 hectares
Application: 4/1.3-2220
13. Lot: HOLE 1 FRACCION II
Title number: 201159
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 9.4839 hectares
Application: 4/1.3-2216
14. Lot: HOLE 1 FRACCION III
Title number: 201160
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 0.6214 hectares
Application: 4/1.3-2222
15. Lot: CERRO PEDREGOSO
Title number: 201161
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 28, 1994
In effect until: November 27, 2000
Surface: 46.6493 hectares
Application: 4/1.3-2214
16. Lot: XXXX
Title number: 206777
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: March 12, 1998
In effect until: Xxxxx 00, 0000
Xxxxxxx: 24.7824 hectares
D-3
17. Lot: LA ENCANTADA FRACCION I
Title number: 201156
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 44.9991 hectares
Application: 4/1.3-2218
18. Lot: LA ENCANTADA FRACCION II
Title number: 201157
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 32.4882 hectares
Application: 4/1.3-2215
19. Lot: LA ENCANTADA FRACCION 1
Title number: 201145
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 166.2248 hectares
Application: 4/1.3-2219
20. Lot: LA ENCANTADA FRACCION 2
Title number: 201146
Type of Concession: Exploration
Location: La Paz, B.C.S
Date of Issuance: November 21, 1994
In effect until: November 20, 2000
Surface: 12.9992 hectares
Application: 4/1.3-2217
21. Lot: SAN ANTONIO
Title number: 180064
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: March 23, 1987
In effect until: Xxxxx 00, 0000
Xxxxxxx: 151.3647 hectares
D-4
22. Lot: LA RICA
Title number: 206545
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: January 23, 1998
In effect until: January 22, 2048
Surface: 481.1593 hectares
23. Lot: LA DIFICULTAD
Title number: 203910
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: November 5, 1996
In effect until: November 4, 2046
Surface: 454.0218 hectares
24. Lot: TOCOPILLA
Title number: 204511
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: February 28, 1997
In effect until: February 27, 2047
Surface: 582.4949 hectares
25. Lot: EL ARBOL DE ORO
Title number: 184973
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: December 13, 1989
In effect until: December 12, 2039
Surface: 162.0000 hectares
26. Lot: EL PICACHUDO
Title number: 189602
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: December 5, 1990
In effect until: December 4, 2040
Surface:
27. Lot: XXXXX
Title number: 204485
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: February 21, 1997
In effect until: February 20, 2047
Surface: 469.4073 hectares
D-5
28. Lot: MAILE
Title number: 207581
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: June 30, 1998
In effect until: June 29, 2048
Surface: 296.9883 hectares
29. Lot: LA JOYA
Title number: 212548
Type of Concession: Exploitation
Location: La Paz, B.C.S
Date of Issuance: October 30, 2000
In effect until: October 29, 2050
Surface: 346.0095 hectares
B. WATER CONCESSIONS
1. Water Concession Title No. IBCS 101214/03EMGE95 Granted to
Echo May Mexico, S.A. de C.V. on December 27, 1995, by the
National Commission of Waters.*
------
* This water concession is currently registered in the name of Echo Bay
Mexico, S.A. de C.V. but will be transferred after the Closing to Paredones
in accordance with Section 4.1(3) of this Agreement.
D-6
SCHEDULE "E"
PERMITS AND LICENCES
1. Resolution D.O.O. DGOEIA.03322 issued May 22, 1997, by National Institute
of Ecology (INE).
2. Resolution D.O.O. DGOEIA.03854 issued June 13, 1997, by National Institute
of Ecology (INE).
3. Resolution D.O.O. DGOEIA.07181 issued November 11, 1997, by National
Institute of Ecology (INE).
4. SEMARNAP-BCS-03/415/98 issued October 13, 1998, by SEMARNAP, La Paz.
5. SEMARNAP-BCS-03/409/97 issued November 27, 1997, by SEMARNAP, La Paz.
6. Letter SRN.DGRCS.DPN.OF.378/97 issued October 30, 1997, by SEMARNAP Ing.
Chapela Xxxxxxx.
7. No. 701-306 issued November 17, 1997, by Municipal Urban Development
office, La Paz.
8. No. 0-025 issued January 13, 1997, by State Urban Planning and Ecology
office, La Paz.
9. No. 0245/97 issued September 12, 1997, by State Urban Planning and Ecology
office, La Paz.
10. Flora and Fauna Rescue Program issued November 4/5, 1997, by SEMARNAP-BCS
and INE-UCANP.
11. Official Letter No. 02.233/98 issued June 9, 1998, by SEMAPRNAP-BCS
(Xxxxxxxxx).
12. Official Letter No. 001/98 issued April 3, 1998, by Minera Paradones
Amarillos, S.A. de C.V. (X. Xxxxxx).
13. Official Letter No. DOO.750.2240/98 issued March 11, 1998, by INE Mexico
City.
14. Official Letter No. JEC/BCS/234/97 issued December 3, 1997, by State Road
Board of Southern Baja California.
15. NUM-REGRP-BCS-052-95-01 issued December 12, 1996, by SEMARNAP, La Paz.
16. Tailings Design Plans applied for on January 14, 1998, to National
Institute of Ecology (INE).
17. Sanitary Landfill preliminary approval, Document No. 0240/97, granted on
September 11, 1997, by State Office of Urban Planning and Infrastructure.
E-1
SCHEDULE "F"
PERMITTED ENCUMBRANCES
TYPE OF
ENCUMBERING PARTY OBLIGATION SECURED SPECIFICS OF ENCUMBRANCE
Nil
F-1
SCHEDULE "G"
FORM OF WARRANT CERTIFICATE
W#-
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE FOLLOWING HOLD
PERIOD AND RESALE RESTRICTIONS:
1. CANADIAN LEGEND - UNLESS PERMITTED UNDER CANADIAN SECURITIES
LEGISLATION, THE HOLDER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE SHALL NOT TRADE THE SECURITIES BEFORE DECEMBER 30, 2002.
2. U.S. LEGEND - THESE WARRANTS AND THE SECURITIES TO BE ISSUED UPON
EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY APPLICABLE
UNITED STATES STATE SECURITIES LAW. THESE WARRANTS MAY NOT BE EXERCISED
BY OR ON BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE 1933 ACT
AND IN COMPLIANCE WITH APPLICABLE UNITED STATES STATE SECURITIES LAW OR
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. "UNITED STATES" AND
"U.S. PERSON" ARE AS DEFINED UNDER REGULATION S UNDER THE 1933 ACT.
THE RIGHT TO PURCHASE COMMON SHARES UNDER THIS WARRANT CERTIFICATE
EXPIRES AT 4:30 P.M. (VANCOUVER TIME) ON AUGUST 29, 2004
SHARE PURCHASE WARRANTS
TO PURCHASE COMMON SHARES OF
VISTA GOLD CORP.
THIS IS TO CERTIFY THAT, for value received, VICEROY RESOURCE CORPORATION (the
"HOLDER"), as nominee for Viceroy Minerals Corporation and 408178 British
Columbia Ltd., is the holder of 303,030 common share purchase warrants (the
"WARRANTS") of Vista Gold Corp. (the "CORPORATION"). Subject to adjustment as
provided for herein, each Warrant entitles the holder thereof to purchase from
the Corporation, upon and subject to the terms and conditions set forth herein,
one Common Share in the capital of the Corporation (the "SHARES") at the price
of CDN. $6.87 at any time during the period commencing on the date hereof and
ending at 4:30 p.m. (Vancouver time) on August 29, 2004 (such period, the
"EXERCISE PERIOD").
ARTICLE 1
TERMS AND CONDITIONS
1.1 EXERCISE PRICE
Subject to adjustment thereof in the events and in the manner set forth
below, the price (the "EXERCISE PRICE") payable for each Share upon the
exercise of each Warrant shall be Cdn. $6.87 in lawful money of Canada
at any time during the Exercise Period.
G-1
1.2 METHOD OF EXERCISE
The right to purchase Shares of the Corporation may only be exercised
by the Holder by:
(a) duly completing and executing the attached subscription form
in the manner indicated; and
(b) surrendering this warrant certificate and the duly completed
and executed subscription form to the Corporation at its
principal office in Littleton, Colorado or such other office
as may be specified by the Corporation, together with payment
of the purchase price for the Shares of the Corporation
subscribed for (as calculated by multiplying the Exercise
Price by the total number of Shares subscribed for) in the
form of cash, a bank draft or a certified cheque payable to or
to the order of the Corporation.
1.3 TRANSFER OF WARRANTS
The Holder may transfer the Warrants represented hereby by:
(a) duly completing and executing the transfer form attached
hereto; and
(b) surrendering this warrant certificate and the duly completed
and executed transfer form, together with such other documents
as the Corporation may reasonably request, including an
acceptable legal opinion confirming that the transfer may be
completed in compliance with applicable securities laws, to
the Corporation at its principal office in Littleton, Colorado
or such other office as may be specified by the Corporation,
from time to time.
1.4 ISSUANCE OF SHARE CERTIFICATES
Upon surrender of this warrant certificate, delivery of a duly
completed and executed subscription form and payment of the Shares
subscribed for, the Corporation will issue to the Holder the number of
Shares subscribed for and will, within the next three business days
mail to the Holder a certificate evidencing such Shares, together with
cash, as provided in section 3.8, in respect of any fraction of a share
otherwise issuable upon such surrender. To the extent permitted by
applicable law, such share certificate shall be deemed to have been
issued and the Holder shall be deemed to have become a holder of record
of such Shares as of the date of exercise of the Warrants.
1.5 ISSUANCE OF WARRANT CERTIFICATES FOR UNEXERCISED WARRANTS
If the Holder subscribes for a lesser number of Shares than the
aggregate number of Shares issuable upon exercise of the Warrants the
Corporation will forthwith cause to be delivered to the Holder a new
warrant certificate in respect of the balance of the Warrants.
G-2
ARTICLE 2
RESERVATION AND ISSUANCE OF SHARES
2.1 RESERVATION OF SHARES TO BE ISSUED
The Corporation has reserved out of its authorized and unissued Shares,
and will at all times during the Exercise Period have authorized and
reserved for issuance, a sufficient number of Shares to provide for the
exercise of all of the Warrants.
2.2 CHARACTERISTICS OF SHARES TO BE ISSUED
All Shares issuable upon exercise of the Warrants will, at the time of
issuance thereof, be duly authorized and validly allotted and issued as
fully paid and non-assessable shares in the capital of the Corporation,
free and clear of any and all liens, claims, security interests,
pledges, encumbrances, equities and charges.
ARTICLE 3
ADJUSTMENT OF SUBSCRIPTION RIGHTS AND EXERCISE PRICE
3.1 ADJUSTMENT OF SUBSCRIPTION RIGHTS
If at any time during the Exercise Period, there is a capital
reorganization of the Corporation or a change in respect of or
affecting the Shares not otherwise provided for in this Article 3 or a
consolidation, merger or amalgamation of the Corporation with or into
another body corporate (any such event being called a "CAPITAL
REORGANIZATION"), the Holder will be entitled to receive, upon the
exercise of the right to purchase Shares hereunder at any time after
the record date for such Capital Reorganization, in lieu of the number
of Shares to which it was entitled upon exercise, the aggregate number
of shares or other securities of the Corporation or of the body
corporate resulting from the Capital Reorganization that the Holder
would have been entitled to receive as a result of such Capital
Reorganization if, on the record date, the Holder had been the
registered holder of the number of Shares to which it was entitled upon
exercise, and such shares or other securities shall be subject to
adjustment thereafter in accordance with provisions the same, as nearly
as may be possible, as those contained in this Article 3; provided,
however, that no such Capital Reorganization will be carried into
effect unless all necessary steps have been taken so that the Holder
will thereafter be entitled to receive such number of shares or other
securities of the Corporation or of the body corporate resulting from
the Capital Reorganization.
3.2 If at any time during the Exercise Period, any adjustment in the
Exercise Price shall occur as a result of:
(a) an event referred to in paragraph 3.3(a);
(b) the fixing by the Corporation of a record date for an event
referred to in paragraph 3.3(b); or
(c) the fixing by the Corporation of a record date for an event
referred to in paragraph 3.3(c) if such event constitutes the
issue or distribution to the holders of all or substantially
all
G-2
of its outstanding Shares of (i) Equity Shares, (ii)
securities exchangeable for or convertible into Equity Shares
at any exchange or conversion price per Equity Share less than
the Current Market Price on such record date, or (iii) rights,
options or warrants to acquire Equity Shares at an exercise,
exchange or conversion price per Share less than the Current
Market Price on such record date,
then the number of Shares issuable upon the subsequent exercise of the
Warrants shall be adjusted simultaneously with the adjustment to the
Exercise Price by multiplying the number of Shares issuable upon the
exercise of the Warrants immediately prior to such adjustment by a
fraction which shall be the reciprocal of the fraction employed in the
adjustment of the Exercise Price.
3.3 ADJUSTMENT OF EXERCISE PRICE
The Exercise Price in effect at any date shall be subject to adjustment
from time to time as follows:
(a) If and whenever at any time during the Exercise Period, the
Corporation:
(i) subdivides its outstanding Shares into a greater
number of shares;
(ii) consolidates its outstanding Shares into a smaller
number of shares; or
(iii) issues Shares to the holders of all or substantially
all of its outstanding Shares by way of a stock
dividend or other distribution other than a dividend
paid in the ordinary course;
(any of such events being called a "SHARE REORGANIZATION"),
the Exercise Price will be adjusted effective immediately
after the record date of the Share Reorganization at which the
holders of Shares are determined for the purpose of the Share
Reorganization by multiplying the Exercise Price in effect
immediately prior to the record date by a fraction of which:
A. the denominator shall be the number of
Shares outstanding immediately after giving
effect to the Share Reorganization; and
B. the numerator shall be the number of Shares
outstanding on such record date before
giving effect to the Share Reorganization.
(b) If and when at any time during the Exercise Period, the
Corporation fixes a record date for the issue of rights,
options or warrants to the holders of all or substantially all
of its outstanding Shares under which such holders are
entitled, during a period expiring not more than 45 days after
the date of issue of such rights, options or warrants (the
"RIGHTS PERIOD"), to subscribe for or purchase Shares at a
price per share, or securities convertible into Shares at a
conversion price per share during the Rights Period to the
holder, of less than 95% of the Current Market Price of the
Shares on the record date for the issue of such rights,
options or warrants (any of such events being called a "RIGHTS
OFFERING"), the Exercise Price will be adjusted effective
immediately after the end of the Rights Period by multiplying
the Exercise Price in effect immediately prior to the end of
the Rights Period by a fraction of which:
G-4
(i) the denominator shall be the number of Shares
outstanding, or the number of Shares which would be
outstanding if all such securities convertible into
Shares were converted into Shares during the Rights
Period, in both cases after giving effect to the
Rights Offering and including the number of Shares
actually issued or subscribed for during the Rights
Period upon exercise of the rights, warrants or
options under the Rights Offering; and
(ii) the numerator shall be the aggregate of:
A. the number of Shares outstanding as of the
record date for the Rights Offering; and
B. a number determined by dividing (1) either
(a) the product of the number of Shares
issued or subscribed for during the Rights
Period upon the exercise of the rights,
options or warrants under the Rights
Offering and the price at which such Shares
are offered or, as the case may be, (b) the
product of the conversion price of such
securities convertible into Shares and the
number of Shares for or into which the
securities so offered pursuant to the Rights
Offering could have been converted during
the Rights Period, by (2) the Current Market
Price of the Shares as of the record date
for the Rights Offering.
Any Shares owned by or held for the account of the Corporation
will be deemed not to be outstanding for the purpose of any
such computation.
If the Holder has exercised the right to purchase Shares in
accordance with the provisions of this warrant certificate
during the period beginning immediately after the record date
for a Rights Offering and ending on the last day of the Rights
Period for that Rights Offering then, in addition to the
Shares to which the Holder is otherwise entitled upon such
exercise in accordance with this warrant certificate, the
Holder will be entitled to that number of additional Shares
which, when added to the number of Shares to which the Holder
is entitled upon such exercise in accordance with this warrant
certificate, equals the number of Shares to which the Holder
would have been entitled upon exercise in accordance with this
warrant certificate if the Holder had exercised the right to
purchase after the adjustment of the Exercise Price effective
immediately after the end of the Rights Period; provided,
however, that the provisions of paragraph 3.8 will be
applicable to any fractional interest in a Share to which the
Holder might otherwise be entitled. Such additional Shares
shall be deemed to have been issued to the Holder immediately
following the end of the Rights Period.
(c) If and when at any time during the Exercise Period, the
Corporation fixes a record date for the issue or distribution
to the holders of all or substantially all of its outstanding
Shares of:
(i) shares of any class;
(ii) evidences of its indebtedness;
(iii) assets or property; or
G-5
(iv) rights, options or warrants to subscribe for or
purchase any of the foregoing (other than rights,
options or warrants to purchase Shares exercisable
within 45 days of the record date at a price per
Share equal to or greater than 95% of the then
Current Market Price);
and if such issue or distribution does not constitute a Share
Reorganization, a Rights Offering or a dividend paid in the
ordinary course (any of such events described in subparagraphs
3.3(c)(i) through 3.3(c)(iv) being called a "SPECIAL
DISTRIBUTION"), the Exercise Price will be adjusted
immediately after the record date at which the holders of
Shares are determined for the purpose of the Special
Distribution by multiplying the Exercise Price in effect on
such record date by a fraction of which:
A. the denominator shall be the product
obtained when the number of Shares
outstanding on the record date is multiplied
by the Current Market Price of the Shares on
such date; and
B. the numerator shall be the difference
obtained when (1) the amount by which the
aggregate fair market value at the time of
distribution thereof (as determined by the
board of directors on the basis of generally
accepted accounting principles) of the
shares, rights, options, warrants, evidences
of indebtedness or assets or property, as
the case may be, distributed in the Special
Distribution exceeds the fair market value
(as determined by the board of directors on
the basis of generally accepted accounting
principles) of the consideration, if any,
received therefor by the Corporation, is
subtracted from (2) the product obtained
when the number of Shares outstanding on the
record date is multiplied by the Current
Market Price of the Shares on such date;
however, no such adjustment shall be made if the result of
such adjustment would be to increase the Exercise Price in
effect immediately before such record date. Any Shares owned
by or held for the account of the Corporation shall be deemed
not to be outstanding for the purpose of any such computation.
To the extent that such distribution is not so made, the
Exercise Price will be readjusted effective immediately to the
Exercise Price that would then be in effect based upon such
shares or rights, options or warrants or evidences of
indebtedness or assets or property actually distributed.
3.4 ADJUSTMENT OF SUBSCRIPTION RIGHTS IN CERTAIN CIRCUMSTANCES
In the case of any reclassification of, or other change in, the
outstanding Shares other than a Share Reorganization a Capital
Reorganization or a Special Distribution, the subscription rights
provided herein shall be adjusted immediately after the record date for
such reclassification or other change so that the Holder shall be
entitled to receive, upon the exercise of such rights at any time after
the record date of such reclassification or other change, such shares
as it would have received had the Warrants been exercised in full
immediately prior to such record date, such shares to be subject to
adjustment thereafter in accordance with provisions the same, as nearly
may be possible, as those contained in this Article 3.
G-6
3.5 RULES FOR ADJUSTMENT OF SUBSCRIPTION RIGHTS AND EXERCISE PRICE
For the purpose of this Article 3:
(a) The adjustments provided for in this Article 3 are cumulative
and will be made successively whenever an event referred to in
a particular provision of this Article 3 occurs, subject to
the following provisions of this section 3.5.
(b) No adjustment to the Exercise Price will be made in respect of
any event described in section 3.3, other than the events
referred to in subparagraphs 3.3(a)(i) and 3.3(b)(i), if the
Holder is entitled to participate in such event on the same
terms as though and to the same effect as if it had exercised
the Warrants in full prior to or on the effective date or
record date of such event (any such participation being
subject to the prior consent of the Toronto Stock Exchange).
(c) No adjustment in the Exercise Price will be required unless
such adjustment would require an increase or decrease of at
least 1% in the Exercise Price and no adjustment will be made
in the number of Shares issuable on exercise of the Warrants
unless it would result in a change of at least one-hundredth
of a share; provided, however, that any adjustments which by
reason of this paragraph 3.5(c) are not required to be made
will be carried forward and taken into account in any
subsequent adjustment.
(d) If the Corporation sets a record date to determine the holders
of the Shares for the purpose of entitling them to receive any
dividend or distribution or sets a record date to take any
other action and thereafter and before the distribution to
such shareholders of any such dividend or distribution or the
taking of any other action legally abandons its plan to pay to
deliver such dividend or distribution or take such other
action, then no adjustment in the Exercise Price or the number
of Shares issuable upon the exercise of the Warrants will be
required by reason of the setting of such record date.
(e) If any question at any time arises with respect to the
Exercise Price or the number of Shares issuable upon exercise
of the Warrants or with respect to the amount of any cash
payment to be made in lieu of issuing a fractional share, such
question will be conclusively determined by the auditors of
the Corporation and will be binding.
(f) In the absence of a resolution of the board of directors
fixing a record date for a Share Reorganization, Special
Distribution or Rights Offering, the Corporation shall be
deemed to have fixed as the record date thereof the date on
which the Share Reorganization, Special Distribution or Rights
Offering is effected.
3.6 PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT
As a condition precedent to the taking of any action which would
require an adjustment pursuant to sections 3.1, 3.2, 3.3 or 3.4, the
Corporation shall take all actions which may, in the opinion of a
solicitor acceptable to the Holder, be necessary in order that the
Corporation may validly and legally issue as fully paid and
non-assessable all the Shares which the Holder is entitled to receive
on the full exercise hereof in accordance with the provisions hereof.
G-7
3.7 NOTICE OF ADJUSTMENT OF EXERCISE PRICE AND SUBSCRIPTION RIGHTS
At least 21 days prior to the effective date or record date, as the
case may be, of any event which requires or might require an adjustment
in the Exercise Price or the number of Shares issuable upon the
exercise of the Warrants, the Corporation shall give written notice to
the Holder specifying the particulars of such event and, if
determinable, the required adjustment and the computation of such
adjustment. In case any adjustment for which such a notice has been
given is not then determinable, the Corporation shall forthwith after
such adjustment is determinable give written notice to the Holder
evidencing a computation of such adjustment.
3.8 FRACTIONAL SHARE INTERESTS
The Corporation shall not be required to issue fractional Shares upon
any exercise of the Warrants. If any fractional interest in a Share
would, except for the provisions of this section 3.8, be deliverable
upon the exercise of the Warrants, the Corporation shall, in lieu of
delivering any certificate of such fractional interest, satisfy such
fractional interest by paying to the Holder an amount equal to the
Current Market Price of the Shares on the date of exercise of the
Warrants multiplied by such fractional interest.
3.9 DEFINITIONS
In this Article 3:
(a) "BOARD OF DIRECTORS" means the board of directors of the
Corporation;
(b) "SHARES" means the Common Shares without par value in the
capital of the Corporation and if there is a change in respect
of or affecting the Shares referred to in sections 3.1, 3.2,
3.3 or 3.4, then "SHARES" shall mean the shares or other
securities or property issuable or receivable on the exercise
of the Warrants as a result of any such change;
(c) "CURRENT MARKET PRICE" of the Shares at any date means the
weighted average trading price of the Shares on any stock
exchange in Canada or the United States on which the Shares
are listed and posted for trading as may be selected for that
purpose by the board of directors, during the ten most recent
trading days ending on a date not earlier than the fifth
trading day before that date or, if the Shares are not listed
and posted for trading on any stock exchange, the Current
Market Price as determined by the board of directors in
accordance with generally accepted accounting principles;
(d) "DIVIDEND PAID IN THE ORDINARY COURSE" means a dividend paid
on the Shares in any financial year of the Corporation,
whether in (1) cash, (2) securities of the Corporation,
including rights, options or warrants (but excluding rights,
options or warrants referred to in paragraph 3.3(b) and
rights, options or warrants referred to in parentheses in
subparagraph 3.3(c)(iv) to purchase any securities of the
Corporation or property or other assets of the Corporation or
(3) property or other assets of the Corporation, to the extent
that the amount or value of such dividend together with the
amount or value of all other dividends theretofore paid during
such financial year (any such securities, property or other
assets so distributed to be valued at the fair market value of
such securities, property or other assets, as the case may be,
as determined by the board of directors based on generally
accepted accounting principles) does not exceed the greater
of:
G-8
(i) of the aggregate amount of dividends paid by the
Corporation on the Shares in the period of 12
consecutive months ended immediately prior to the
first day of such financial year; or
(ii) of the consolidated net income of the Corporation
before extraordinary items for (but after dividends
payable on all shares ranking prior to or on a parity
with the payment of dividends with the Shares in
respect of) the period of 12 consecutive months ended
immediately prior to the first day of such financial
year (such consolidated net income, extraordinary
items and dividends to be shown in the audited
consolidated financial statements of the Corporation
for such period of 12 consecutive months or if there
are no audited consolidated financial statements for
such period, computed in accordance with generally
accepted accounting principles, consistent with those
applied in the preparation of the most recent audited
consolidated financial statements of the Corporation;
(e) "EQUITY SHARES" means the Shares and any shares of any other
class or series of the Corporation which may from time to time
be authorized for issue if by their terms such shares confer
on the holders thereof the right to participate in the
distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation
beyond a fixed sum or a fixed sum plus accrued dividends; and
(f) "TRADING DAY" with respect to any stock exchange means a day
on which that exchange is open for business and on which at
least one board lot of the Shares of the Corporation is
traded.
ARTICLE 4
NO RIGHTS AS SHAREHOLDERS
4.1 Nothing contained herein shall be construed as conferring upon the
Holder, by reason only of holding the Warrants, any rights as a
shareholder of the Corporation.
ARTICLE 5
TAXES
5.1 The Corporation shall pay all expenses, charges and documentary stamp
or issue taxes, if any, attributable to the issuance of Shares upon the
exercise of the Warrants.
ARTICLE 6
REPLACEMENT CERTIFICATES
6.1 In case this or any other certificate representing the Warrants shall
be mutilated, lost, stolen or destroyed, the Corporation shall issue
and deliver in exchange and substitution for and upon cancellation of
the mutilated certificate, or in lieu of and substitution for the
certificate lost, stolen or destroyed, a new certificate of like tenor
and representing the same number of the
G-9
Warrants as such mutilated, lost, stolen or destroyed
certificate, upon receipt of evidence reasonably satisfactory
to the Corporation of such loss, theft or destruction of such
certificate and an indemnity or bond, if requested, reasonably
satisfactory to the Corporation.
ARTICLE 7
GENERAL PROVISIONS
7.1 The terms hereof shall be governed by and construed in accordance with
the laws of the Province of British Columbia.
7.2 All of the covenants and provisions hereof by or for the benefit of the
Corporation or the Holder shall bind and inure to the benefit of their
respective successors.
7.3 Time shall be of the essence hereof.
IN WITNESS WHEREOF Vista Gold Corp. has caused this warrant certificate
to be signed by its duly authorized officer as of the 29th day of August, 2002.
VISTA GOLD CORP.
By:
---------------------------
Authorized Signatory
G-10
SUBSCRIPTION FORM
TO: Vista Gold Corp. (the "CORPORATION")
Suite 5, 0000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx
X.X.X. 00000
The undersigned holder of the attached warrant certificate
hereby exercises _______ Warrants and thereby subscribes for _______________
Common Shares of the Corporation (the "SHARES") on the terms specified in the
warrant certificate and encloses herewith, cash or a certified cheque or bank
draft payable to the Corporation in payment of the subscription price for the
Shares.
The undersigned holder of the attached warrant certificate
hereby certifies to the Corporation, by initialling the box to the
right of this statement, that the undersigned is not a U.S. Person (as / /
such term is defined in Regulation S under the U.S. Securities Act of
1933, as amended (the "U.S. Securities Act")) and that these warrants
are not being exercised on behalf of a U.S. Person.
In the absence of the certification described in the preceding
paragraph, the undersigned has delivered with this completed Subscription Form a
written opinion of counsel reasonably satisfactory to the Corporation that these
warrants and the Shares delivered upon exercise thereof have been registered
under the U.S. Securities Act or are exempt from registration thereunder.
Please issue and deliver certificate(s) representing the
Shares subscribed for as follows:
ADDRESS(ES)
NAME(S) IN FULL (INCLUDE POSTAL CODE) NUMBER OF SHARES
--------------------- ------------------------------- --------------
--------------------- ------------------------------- --------------
--------------------- ------------------------------- --------------
--------------------- ------------------------------- --------------
and to mail such certificates to:
------------------------------------
(name)
------------------------------------
(address)
------------------------------------
------------------------------------
DATED this _______ day of ______________________, 20______.
-------------------------------------------
(Name of Holder - please print)
-------------------------------------------
Signature of Authorized Signatory
-------------------------------------------
Name of Authorized Signatory
-------------------------------------------
Title of Authorized Signatory
G-11
TRANSFER FORM
TO: Vista Gold Corp. (the "CORPORATION")
Suite 5, 0000 Xxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxx
X.X.X. 00000
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____________________________ (name), ____________________________
_________________________________________(address), ___________________ Warrants
of the Corporation registered in the name of the undersigned on the records of
the Corporation represented by the within certificate and irrevocably appoints
____________________________________ the attorney of the undersigned to transfer
the said securities on the books or register with full power of substitution.
THE UNDERSIGNED HEREBY CERTIFIES THAT THE WARRANTS ARE BEING SOLD,
ASSIGNED OR TRANSFERRED IN ACCORDANCE WITH APPLICABLE
SECURITIES LAWS COVERING ANY SUCH TRANSACTION.
DATED this _______ day of ______________________, 20______.
-------------------------------------------
(Name of Holder - please print)
-------------------------------------------
Signature of Authorized Signatory
-------------------------------------------
Name of Authorized Signatory
-------------------------------------------
Title of Authorized Signatory
INSTRUCTIONS:
1. EXCEPT AS PROVIDED BELOW, THE SIGNATURE ON THIS TRANSFER FORM MUST BE
THE SIGNATURE OF THE PERSON WHOSE NAME APPEARS ON THE FACE OF THE
CERTIFICATE EVIDENCING THE WARRANTS.
2. IF THIS TRANSFER FORM IS SIGNED BY A TRUSTEE, EXECUTOR, ADMINISTRATOR,
CURATOR, GUARDIAN, ATTORNEY, OFFICER OF A CORPORATION OR ANY PERSON
ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, THE CERTIFICATE MUST
BE ACCOMPANIED BY EVIDENCE OF AUTHORITY TO SIGN SATISFACTORY TO THE
CORPORATION.
G-12
SCHEDULE "H"
REQUIRED CONSENTS AND APPROVALS
AUTHORITY OR PARTY TYPE OF CONSENT/APPROVAL
National Institute of Ecology Notice of change of shareholders regarding authorizations granted to
Minera Paredones Amarillos, S.A. de C.V. with respect to the
Environmental Impact Statement for the Paredones Amarillos mining
project.
Toronto Stock Exchange and Consent to issuance and listing of the Vista Shares and the Vista
American Stock Exchange Warrant Shares.
H-1
SCHEDULE "I"
FINANCIAL STATEMENTS
BALANCE SHEET
JULY 31, 2002 AND 2001
(Mexican pesos)
notes 1 and 2
07/31/2002 2001 07/31/2002 2001
A S S E T S L I A B I L I T I E S
CURRENT ASSETS SHORT TERM
Cash (notes 2a and 3) $38,464 $4,129 Accounts payable $134,578
IVA tax to be refund 595,139 535,131 Taxes payable 2,358
---------- ----------
Others receivable accounts 39,847 39,048 2,358 134,578
LONG TERM
Advanced payments (note 4) 11,410 11,374
-------- -------- Affiliated companies
684,859 589,682 (notes 2a, 3 and 7) 4,661,421
---------- ----------
2,358 4,795,999
Afiliated companies (notes 2a, 3 and 7) 3,768,731 ---------- ----------
CONTINGENT LIABILITY (note 8)
STOCKHOLDERS EQUITY (note 9)
Mining concessions (note 5) 9,307,029 9,307,029
Machinary, furniture and equipment Capital stock 127,934,846 121,517,296
-net 216,925 213,979 Premium on shares 14,605,466 14,605,466
Legal reserve 3,320 3,320
Accumulated profits and
Exploration expenses losses (57,627,122) (55,944,607)
(notes 2b and 6) 124,259,334 124,259,334 Net loss (5,294,518) (1,682,515)
Accumulated inflation effects 65,967,933 65,967,933
Deferred Income Tax (notes 2d y 12) 12,035,993 12,035,993 Accumulated effect of deferred
income tax (note 12) 911,857 911,857
----------- -----------
146,501,783 145,378,750
------------ ------------ ----------- -----------
$146,504,141 $150,174,749 $146,504,141 $150,174,749
============ ============ =========== ===========
The notes attached to the financial statement are an integral part of this
statement.
C.P. XXXXXXX XXXXXX XXXX
Administrative manager
I-1
SCHEDULE "J"
BANK FACILITIES
ACCOUNT:
Bancomer SA
Xxxxxx La Catolica Xx. 0000 X/ Xxxxxxx Xxxxx
Xx Xxx XXX XX 00000 Tel 000 00 000 00 00000 Fax 000 00 000 00 00000
Plaza No. 031 Sucursal 100
ACCOUNT NUMBER:
Pesos account: 031 0000000-6
Dollar Account: 031 0000000-6
SAFETY DEPOSIT BOXES:
None
NAMES OF ALL PERSONS AUTHORIZED TO TRANSACT BUSINESS IN RESPECT OF EACH ACCOUNT:
Xxxxxxx Xxxxxx Xxxx
J-1
SCHEDULE "K"
ENVIRONMENTAL ORDERS OR AGREEMENTS
1. OFFICIAL COMMUNICATION NUMBER: D.O.O.DGOEIA 03322
DATE OF ISSUANCE: May 22, 1997
LOTS REFERRED TO IN SAID COMMUNICATION:
Tecopilla [sic] (Tocopilla) 162832
San Antonio 180064
Maile 193677
Xxxxx 000000
Xx Xxxx 189071
La Dificultad 201086
La Encantada Xxxx. 0 000000
Xx Xxxxxxxxx Xxxx. 0 000000
Xx Xxxxxxxxx Xxxx. I 201156
Xxxxx Perdido 201147
Cerro Pedregaso 201161
Hole 1 Frac. I 201158
Hole 1 Xxxx. XX 000000
Xxxx 0 Xxxx. XXX 000000
PURPOSE: Authorize -in a conditioned manner- the development of the
Paredones Amarillos Project, subject to the terms and
conditions set forth therein.
NOTES: The authorization is expressly issued to MPA directly.
CONTEMPLATED STAGES:
EXPLOITATION: Open pit: 11,000 tons of minerals per day of
operation, 24 hours a day, seven days a week.
ASSOCIATED PROJECTS:
Access road
Electric line (tendido electrico)
Telephone communications to the facilities
Works to supply water to the project
AUTHORIZED AREA: 249.00.00 has.
K-1
THE AUTHORIZATION DOES NOT CONTEMPLATE THE CONSTRUCTIONS OF A TAILING DAM.
TERM: 10 years for the operation of the project, counted from the
following day on which the official communication was
received. Said term and may be extended (to the sole
discretion of the authority) and if such extension be applied
for with 30 days anticipation prior to its expiration date.
Any possible change to the Environmental Impact Study approved must be
previously informed to the authority.
NOTES: The construction, operation, maintenance and abandonment of
the works of the project must be subject to the description
contained in the Environmental Impact Study and drawings
(maps) of the project, and subject to that stated in the
official communication, according to -among other- the
following:
CONDITIONS
1. MPA must file with the environmental authorities (within 30 days
following their obtainment) copies of permits granted by the competent
authorities regarding disposition of residual waters, change of use of
soil, disposal of waste and handling and storage of explosives.
2. Prior to commence its activities, MPA must obtain the exploitation
titles covering the mining exploration concessions referred to in the
authorization
3. MPA must create an internal surveillance body for environmental
purposes.
4. MPA must inform its workers on the provisions and penalties stated in
the law on flora and fauna protection.
5. MPA must preferably hire or retain the services of residents of the
area.
6. Within a 3-month term counted from the date of issuance of the
authorization, MPA must file a detailed Environmental Protection
Program
7. A Rescue Program supervised by the delegation of SEMARNAT in the state
of BCS and by the Natural Protected Areas Coordination Unit must be
implemented.
8. Within a 60-day term following the date of the authorization, MPA must
formalize an agreement with the Natural Protected Areas Coordination
Unit on the support that will be provided for the administration and
handling of the Biosphere Reserve where the project is located.
- RECUPERATION PLANT (includes all stages)
- EXPLOITATION OF MINERALS (includes all stages)
K-2
- ENVIRONMENTAL MONITORING
- ABANDONMENT AND RESTORATION
- IN THE AREA OF ENVIRONMENTAL RISK
1. MPA must inform the environmental authorities within three months of
the issuance of the authorization on the global plan on security, to
install the alarms and comply with other obligations deriving from the
permit.
2. MPA must have a remedy plan in case of pollution to the ground, which
must be filed for its approval to the environmental authorities.
3. MPA must have operation handbooks located in different areas of the
plant.
4. MPA must file -prior to the commencment of its activities- a copy of
the authorization issued by the Ministry of National Defense to store
and use explosives.
5. MPA must also file reports on the security audits performed in the
project prior the initiation of its operations.
6. MPA must inform to POFEPA within t15 days following the beginning of
its works of having commenced activities.
7. The authorization was issued to MPA and it is considered as "personal",
therefore, should it is intended that the rights and obligations be
transferred to a third party, MPA and the acquiror must obtain prior
written authorization from the environmental authorities.
8. Any act performed against that provided in the authorization shall be
null and void.
9. THE ENVIRONMENTAL AUTHORITIES MAY EVALUATE, AT ANY TIME, THE
ENVIRONMENTAL IMPACT STUDY, AND ALSO REQUEST ADDITIONAL INFORMATION AND
MAY, AT ALL TIMES CONFIRM, MODIFY, SUSPEND OR REVOKE THE AUTHORIZATION.
10. The non compliance of any of the terms and conditions under which the
authorization was granted or the project, as submitted, may derive in
the invalidation of the invalidation of the authorization without
prejudice of the penalties which may be applied under the Environmental
Law and any other applicable legal provisions.
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2. OFFICIAL COMMUNICATION NUMBER: D.O.O.DGOEIA 03854
DATE OF ISSUANCE: June 13, 1997
PURPOSE: Authorize -in a conditioned manner- the construction,
operation and maintenance of a tailings dam for the
Mining-Metallurgic project Paredones Amarillos.
TERMS: MPA is authorized to build, operate and maintain a tailing dam
for the Paredones Amarillos project with a surface of 99.00
has. Within the area described therein.
Within 90 calendar days upon the receiving of the
authorization, MPA must file the information referred to in
said authorization.
MPA may initiate the construction of the tailings dam once the
Mining Authorities validate the document referred to in the
authorization.
This authorization may be assigned pursuant to the same terms
and conditions of the previous authorization number O.O.O.DGOE
IA- 03322.
3. OFFICIAL COMMUNICATION NUMBER: D.O.O.DGOEIA 07181
DATE OF ISSUANCE: November 11, 1997
PURPOSE: Amend the authorization number D.O.O.DGOEIA 03322,
authorizing the performance of the following activities.
- Disposal of tailings.
- Constructions of a Beneficiation Plant.
- Three pumping stations.
AUTHORIZED AREA: The new surface for the development of the project is
000-00-00 has.
EXTENSIN OF TERM: The authorization D.O.O.DGOEIA 03322 is extended for
an additional term of 2 more years for the
restoration of the project.
NOTES:
Within 3 months upon MPA received the resolution it should had filed
-among other- the following documents.
a) Any instrument evidencing that the concessions forming part of
the project have been transferred to MPA.
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b) Document evidencing that MPA has possession of the tenements
where the sanitary landfill and the so called "bancos
materiales" will be located, and the proper authorization
granted by the Municipality of Xx Xxx, X,X,X,, to carry out
said works.
MPA must also obtain the authorizations from the National Commission of
Waters to exploit the xxxxx of "Xx Xxxxxx de El Xxxxxxxx".
EXTENSION OF TERM: SHOULD MPA INTENDS TO TRANSFER THE RIGHTS
AND OBLIGATIONS DERIVING FROM THESE
AUTHORIZATIONS, SAID COMPANY MUST REQUEST A
PRIOR WRITTEN APPROVAL FROM THE
ENVIRONMENTAL AUTHORITIES.
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