EX-4.13
4
o35611exv4w13.htm
EX-4.13
EXHIBIT 4.13
MSV Resources Inc. and
Xxxxxxxx Resources Inc.
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
| | | |
| Attn:
| | Xx. Xxxxx Xxxxxxx |
|
| | President and Chief Executive Officer |
Dear Xx. Xxxxxxx:
This letter made effective February 19, 2007 (the “Effective Date”) will serve to set out the
terms of the agreement which we, Eastmain Mines Inc. (the “Purchaser”) and Eastmain Resources Inc.
(the “Issuer”), have reached with you, MSV Resources Inc. (the “Seller”) and Xxxxxxxx Resources
Inc. (“Xxxxxxxx”), and upon being fully signed and delivered by all parties, will constitute a
legal, binding and enforceable agreement between the parties hereto. Hereinafter, this letter will
sometimes be referred to as the “agreement”.
The Purchaser hereby agrees to purchase and the Seller hereby agrees to sell all right, title
and interest in and to the Property as of the Closing Date with possession and occupancy by the
Purchaser as of the Closing Date, free of all Encumbrances except the Prior Royalties, in
consideration of payment and delivery of the following (collectively, the “Purchase Price”):
| | (i) | | the issuance by the Issuer of 1,000,000 common shares of the
Issuer as currently constituted (each, an “Eastmain Share” and collectively
the “Eastmain Shares”) registered in the name of the Seller or its nominee; |
| |
| | (ii) | | the issuance by the Issuer of 500,000 share purchase warrants
of the Issuer (the “Series I Warrants”), each such Series I Warrant entitling
the holder thereof to acquire one common share of the Issuer (the “Series I
Warrant Shares”) as currently constituted at an exercise price of Cdn$1.00 for
a period of 12 months from the date of issuance thereof, all registered in the
name of the Seller or its nominee; |
| |
| | (iii) | | payment by the Purchaser of the sum of Cdn$ 2,500,000, plus
all applicable taxes including Goods and Services Tax (“GST”) and Quebec Sales
Tax (“QST”), in immediately available funds to the account of the Seller or
its nominee or for its account; and |
| | (i) | | the issuance by the Issuer of an additional 1,000,000 common shares of
the Issuer as currently constituted (the “Second Tranche Shares”) registered
in the name of the Seller or its nominee; and |
| |
| | (ii) | | the issuance by the Issuer of an additional 500,000 share
purchase warrants of the Issuer (the “Series II Warrants”), each such Series II
Warrant entitling the holder thereof to acquire one common share of the Issuer
(the “Series II Warrant Shares”) as currently constituted at an exercise price
of Cdn$1.50 for a period of 12 months from the date of issuance thereof, all
registered in the name of the Seller or its nominee; and |
| | (c) | | the agreement to pay to the Seller the NSR Royalty pursuant to Sections 5
and 6 hereof. |
| | | The Purchase Price shall be quantified and allocated as reasonably determined by the
Purchaser on or before the Closing Date. |
| |
| | | The Purchaser and the Seller shall make all the usual adjustments, if any, in particular
with respect to taxes, insurance premiums (if insurance is assigned) and rent payable under
a mining lease or for lease of equipment, as of the Closing Date. |
| |
| | | The Purchaser shall be responsible for the GST and QST and transfer duties, if any, payable
in connection with the purchase and sale of the Property. |
| |
| | | The Seller and the Purchaser renounce to any right of redemption which may result from the
transfer of the Property pursuant to this agreement. |
| |
| 2. | | Representations and Warranties |
| | (a) | | Each of the Seller and Xxxxxxxx hereby jointly and severally represents
and warrants to the Purchaser and the Issuer that: |
| | (i) | | it is a company duly existing under the laws of the
jurisdiction of its incorporation, it is duly organized and validly subsisting
under such laws and it has not been dissolved; |
| |
| | (ii) | | it has full corporate power and authority to own its
properties and assets, enter into this agreement, carry out and perform all of
its obligations and duties hereunder and, subject to the CCAA Proceedings,
carry on its business; |
| |
| | (iii) | | it has duly obtained all corporate and regulatory
authorizations for the execution, delivery and performance of this agreement
and such execution, delivery and performance and the consummation of the
transactions herein contemplated will not conflict with or result in a breach
of any covenants or agreements contained in, or constitute a default |
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| | | | under, or result in the creation of any Encumbrance under, or breach or contravene any of
the provisions of its constating documents or any shareholders’ or directors’ resolution,
or the CCAA Proceedings, or any indenture, agreement or other instrument whatsoever to
which it is a party or by which it is bound and does not contravene any Applicable Laws
relating to either the Seller or Xxxxxxxx; |
| |
| | (iv) | | this agreement has been duly executed and delivered by it and is valid, binding and
enforceable against it in accordance with its terms subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general application with
respect to creditors; |
| |
| | (v) | | there is no Person acting or purporting to act at its request who is entitled to any
brokerage or finders fee from the Purchaser in connection with the transactions contemplated
herein; |
| |
| | (vi) | | it has not had any petition for a receiving order in bankruptcy filed against it, has not
made a voluntary assignment in bankruptcy, has not taken any proceedings with respect to a
compromise or arrangement (other than the CCAA Proceedings), has not taken any proceeding to
have itself declared bankrupt or wound-up, has not taken any proceeding to have a receiver
appointed over any part of its assets, has not had any encumbrancer take possession of any of
its assets or properties and has not had any execution or distress become enforceable or
become levied upon any of its assets or properties; |
| |
| | (vii) | | it is registered as required and is in good standing with respect to the filing of returns
under the laws of all jurisdictions in which it carries on business, including, without
limitation, the laws of Québec and the federal laws of Canada applicable therein; |
| |
| | (viii) | | except as disclosed in Schedule “D”, the Seller is the sole owner and holder of record of
the Property and has all right, title and interest to the Property, free and clear of any and
all Encumbrances. The Property does not encroach on any land not owned by the Seller or
Xxxxxxxx, and there are no unregistered agreements or rights entered into by the Seller or
Xxxxxxxx, or to the best of the Seller’s and Xxxxxxxx’x knowledge, any other Person which
affects title to the Property. No notice of a public taking or expropriation has been
received by the Seller or by Xxxxxxxx regarding the Property or any portion thereof. Except
as disclosed in Schedule “G”, the uses to which any portion of the Property has been put are
not in breach or violation in any respect of any Applicable Law, covenant, governmental
restriction or official plan, municipal or otherwise; |
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| | (ix) | | all the mining titles respecting the Property are registered in the name of the
Seller for an undivided interest of 100% and all rights, royalties and rents required to
be paid under any Applicable Law relating to the Property that are not affected by the
CCAA Proceedings have been paid up to the date hereof and, where work is required to have
been completed under any Applicable Law relating to the Property, such work has been
carried out up to the date hereof to the satisfaction of the Ministère des Ressources
naturelles et de la Faune of the Province of Quebec, or such other authority as may be
applicable; |
| |
| | (x) | | other than this agreement and the Prior Royalties, there are no other agreements, adverse
interests or options to acquire or purchase the Property or any portion thereof or any right,
title or interest therein. No Person has any proprietary or possessory interest in the
Property other than the Seller and subject only to the rights of any Governmental Authority
having jurisdiction and the Prior Royalties, no Person is entitled to any royalty or other
payment in the nature of rent or royalty or net profits interest on any minerals, metals or
concentrates or any other such products removed or produced from the Property; |
| |
| | (xi) | | except as disclosed in Schedule “G”, the condition of the Property is in material compliance
with all Applicable Laws of all Governmental Authorities having jurisdiction, including in
respect of any Environmental Liabilities related to or arising out of the Property; |
| |
| | (xii) | | except as disclosed in Schedule “G”, there are no outstanding, pending or threatened,
actions, suits or claims (including native claims against the Seller or Xxxxxxxx, their
respective corporate predecessors and predecessors in title) affecting or in respect of the
Property or any part thereof, including in respect of any Environmental Liabilities related
to or arising out of the Property; |
| |
| | (xiii) | | Mining Rights attaching to the Property have been properly staked or otherwise properly
constituted and are valid and in good standing as at the date hereof under all Applicable
Laws and in full force and effect and shall not be terminated or otherwise materially
adversely affected by reason of the acquisition of the Property by the Purchaser hereunder; |
| |
| | (xiv) | | except as disclosed in Schedule “G”, there are no actions required, or reasonably
anticipated to be required, to be taken with respect to the rehabilitation or reclamation of
the Property; |
| |
| | (xv) | | except as disclosed in Schedule “G”, it has not received any notice of and is not aware of
any material or substantial facts or circumstances that could affect the Mining Rights or the
permitted use thereof; |
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| | (xvi) | | the Mining Rights comprising part of the Property are properly and accurately
described in Schedule “A” hereto, which Schedule “A” contains a complete and accurate list
of all mining claims comprising the Property and their respective expiry dates, and all
such claims have been renewed, without any further action required, until the respective
expiry dates set forth therein; |
| |
| | (xvii) | | except as disclosed in this agreement including the Schedules thereto and except pursuant to
Applicable Laws, there are no material contracts, non-governmental prohibitions, covenants,
controls or indemnities affecting the Property and, except as disclosed in this agreement
including the Schedules thereto, there are no outstanding obligations to any Person in respect
of which the Purchaser may be liable either on or after the completion of the transactions
contemplated by this agreement (including the rights, royalties and rents mentioned in clause
(ix) of this Section 2(a) and the taxes, assessments, rentals, levies and other payments
mentioned in clause 2(a)(xviii) of this Section 2(a)), whether or not affected by the CCAA
Proceedings; |
| |
| | (xviii) | | all taxes, assessments, rentals, levies or other payments relating to the Property
(including any rent payable under the Mining Lease which has been paid up to January 9, 2008)
and required to be made to any Governmental Authority have been made; |
| |
| | (xix) | | except as disclosed in Schedule “G”, the Property is in good standing and all past and
current operations thereon are in compliance with all Applicable Laws; |
| |
| | (xx) | | the Seller is acquiring the Eastmain Shares, Series I Warrants, Series II Warrants and
Second Tranche Shares pursuant to Section 1 hereof as principal for its own account, and not
for the benefit of any other person and not with a view to the resale of the Eastmain Shares,
Second Tranche Shares, Series I Warrants or Series II Warrants, and the Seller understands
that such securities have a hold period of four months and one day from their date of issue
under Applicable Laws during which they cannot be sold or otherwise transferred (the
“Statutory Hold Period”) and the certificates evidencing such securities will bear a legend
to that effect; |
| |
| | (xxi) | | other than pursuant to this agreement, it has not granted any Person access to or the right
to enter upon and explore or investigate the mineral potential of the Property; |
| |
| | (xxii) | | there are no leases (whether of real or personal Property), licenses, permits (including
Environmental Permits), filings, authorizations, approvals or indicia of authority relating to
the Property or any other consents of third parties which are necessary to complete the
transactions contemplated |
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| | | | herein except the Mining Lease and as disclosed in Schedule “E” attached hereto, all of
which may be transferred to the Purchaser; |
| |
| | (xxiii) | | except as disclosed in Schedule “G”, no written notice, citation, summons or order has been
issued, no written complaint has been filed, no written penalty has been assessed and no
environmental or mining investigation or review is pending by any Governmental Authority with
respect to (i) any alleged violation pursuant to any Environmental and Mining Laws related to
the Property; or (ii) any alleged failure to have any applicable Environmental Permits or
Mining Rights required under any Environmental and Mining Laws related to the Property; or
(iii) any alleged failure to comply with any Environmental Permits or Mining Rights; |
| |
| | (xxiv) | | except as disclosed in Schedule “G”, the exploration, development, management and operation
of the Property as carried on or conducted by the Seller and Xxxxxxxx, their respective
corporate predecessors and any related predecessor in title and, to the best of the knowledge
of the Seller and Xxxxxxxx, any other predecessor in title, have been in compliance with all
Environmental and Mining Laws and are now in compliance with all Environmental and Mining
Laws, and all underground workings and surface facilities related to the Property have been
and now are in compliance with all Environmental and Mining Laws and no bond coverage is
required to be posted with the Government of Quebec in connection with any liabilities
relating thereto; |
| |
| | (xxv) | | except as disclosed in Schedule “G”, the Seller has all Environmental Permits and Mining
Rights which were and are required under all Environmental and Mining Laws for the
exploration, development, management and operation of the Property as currently or previously
carried out on or conducted by the Seller and Xxxxxxxx and such Environmental Permits and
Mining Rights are valid, in full force and effect and the operations have been conducted in
compliance with all such Environmental Permits and Mining Rights. Except as disclosed in
Schedule “G”, the Seller is not in default or breach of any Environmental Permits or Mining
Rights and no proceeding is, to the best of the Seller’s or Xxxxxxxx’x knowledge, information
and belief, after due inquiry, pending or threatened to revoke or limit any Environmental
Permits or Mining Rights; |
| |
| | (xxvi) | | except as disclosed in Schedule “G”, neither the Seller, Xxxxxxxx, their respective
affiliates, their respective corporate predecessors and any related predecessors in title nor,
to the best of their respective knowledge, any other predecessors in title have used the
Property or permitted it to be used, to generate, manufacture, refine, treat, transport,
store, handle, |
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| | | | dispose, transfer, produce or process any Hazardous Substance, except in
compliance with all applicable Environmental and Mining Laws; |
| |
| | (xxvii) | | except as disclosed in Schedule “G”, there are no acts or circumstances that could
reasonably be expected to give rise to any civil, administrative or criminal
proceeding regarding the Release, presence or migration of Hazardous Substances on
the Property, or off-site of or onto the Property where the Seller or Xxxxxxxx has
disposed or arranged for the disposal of materials or products arising from
exploration, development or any mining activities conducted at the Property in
violation of any Environmental and Mining Laws; |
| |
| | (xxviii) | | except as disclosed in Schedule “G”, it is not aware of any proceedings and has
no knowledge, after due inquiry and investigation, of any circumstance or facts which
could give rise to any proceeding which alleges or asserts that the Seller or
Xxxxxxxx is potentially responsible for federal, provincial, municipal, state or
local clean-up remediation in respect of Property as a result of the presence of
Hazardous Substances or any other remedial or corrective action under Environmental
and Mining Laws; |
| |
| | (xxix) | | the Seller has maintained all environmental and operating documents and records in
its possession relating to the Property and in respect of the exploration,
development, management and operation of the Property in the manner and for the time
periods required by any Environmental and Mining Laws; |
| |
| | (xxx) | | except as disclosed in Schedule “G”, no active or inactive underground
storage tanks are located on, in or under the Property other than in compliance with
Environmental and Mining Laws; and |
| |
| | (xxxi) | | the NSR Royalty shall on Closing be free of all Encumbrances. |
| | (b) | | Each of the Purchaser and the Issuer hereby represents and warrants to the Seller that: |
| | (i) | | it is a company duly existing under the laws of the jurisdiction of its
incorporation, it is duly organized and validly subsisting under such laws and it has
not been dissolved; |
| |
| | (ii) | | it has full corporate power and authority to own its properties and assets,
carry on its business, enter into this agreement and carry out and perform all of its
obligations and duties hereunder; |
| |
| | (iii) | | it has duly obtained all corporate and regulatory authorizations for the
execution, delivery and performance of this agreement and such execution, delivery and
performance and the consummation of the |
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| | | | transactions herein contemplated will not conflict with or result in a
breach of any covenants or agreements contained in, or constitute a default
under, or result in the creation of any Encumbrance under, the provisions
of its constating documents or any shareholders’ or directors’ resolution
or any indenture, agreement or other instrument whatsoever to which it is a
party or by which it is bound and does not contravene any Applicable Laws; |
| |
| | (iv) | | this agreement has been duly executed and delivered by it and
is valid, binding and enforceable against it in accordance with its terms
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws of general application with respect to creditors; |
| |
| | (v) | | there is no Person acting or purporting to act at its request
who is entitled to any brokerage or finders fee from the Seller or Xxxxxxxx in
connection with the transactions contemplated herein; |
| |
| | (vi) | | upon issuance in accordance with the terms hereof, the
Eastmain Shares and Second Tranche Shares will be outstanding as fully paid
and nonassessable, and the Series I Warrants and Series II Warrants will be
validly issued; upon the due exercise of the Series I Warrants and the Series
II Warrants in accordance with the terms thereof, the common shares of the
Issuer issuable upon the exercise thereof will be outstanding as fully paid
and non-assessable; |
| |
| | (vii) | | it has not had any petition for a receiving order in
bankruptcy filed against it, has not made a voluntary assignment in bankruptcy,
has not taken any proceedings with respect to a compromise or arrangement, has
not taken any proceeding to have itself declared bankrupt or wound-up, has not
taken any proceeding to have a receiver appointed over any part of its assets,
has not had any encumbrancer take possession of any of its assets or properties
and has not had any execution or distress become enforceable or become levied
upon any of its assets or properties; and |
| |
| | (viii) | | it is registered as required and is in good standing with respect to the
filing of returns under the laws of all jurisdictions in which it carries on
business, including, without limitation, the laws of Québec and the federal
laws of Canada applicable therein. |
| 3. | | Agreements and Covenants |
| | (a) | | Each of the Purchaser, the Issuer, the Seller and Xxxxxxxx: |
| | (i) | | acknowledges and agrees that: (A) the other party or parties
to which its Representations are made hereby are entering into this agreement
relying upon such Representations and the correctness of each
such |
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| | | | Representation is a condition upon which such other party or parties are relying
upon entering into this agreement; (B) any condition in favour of a party hereto
may be waived in whole or in part solely by such party in writing without prejudice
to its rights in respect of any other condition; (C) no waiver of any condition
shall constitute or be construed as a release of any liability for a
misrepresentation or for a failure to perform any covenant or other agreement,
except to the extent stated in an express waiver in writing of such liability; (D)
no investigations made by or on behalf of a party or parties at any time shall
(regardless of the results of such investigation) have the effect of waiving,
diminishing the scope of or otherwise affecting any such representation or warranty
provided hereunder; and (E) all Representations and all covenants and agreements of
the parties hereunder shall survive the execution, delivery and termination of this
agreement; and |
| |
| | (ii) | | agrees that the Representations shall remain true and correct for a period of
30 months from the Closing Date and that no proceeding shall be commenced after the
end of that period in respect of a claim for any breach of the Representations or for
indemnity (A) from the Seller and Xxxxxxxx pursuant to Section 3(c) in respect of
their Representations or (B) from the Purchaser and the Issuer pursuant to Section
3(d) in respect of their Representations (but may be commenced at any time during that
period). |
| | (b) | | The Seller and Xxxxxxxx further jointly and severally covenant and agree to: |
| | (i) | | make available to the Purchaser all technical data concerning the Property
from their respective technical databases in written and electronic form, including
without limitation, all maps, reports, results of surveys and drilling and other
reports or technical information, as well as all such accounting data and other
information as the Purchaser or Issuer may reasonably require in connection with the
Property (including such information as may be required for reporting purposes); |
| |
| | (ii) | | without prejudice to the indemnity under Section 3(c)(i), diligently and as
soon as commercially reasonable rectify all deficiencies mentioned in clause (B) of
Section 3(c)(i) (including those identified in Schedule “G”, section 1) provided they
are still existing and of which the Purchaser shall have notified the Seller at any
time before or after Closing; |
| |
| | (iii) | | on or before March 31, 2007, the Seller shall file with the applicable
Governmental Authorities the 2005 geophysical survey flown on the Property; and |
| |
| | (iv) | | provide the Purchaser with not less than three Business Days prior notice of
any proposed disposition of Eastmain Shares, Second Tranche Shares |
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| | | | or common shares issued on exercise of the Series I Warrants or Series II
Warrants. |
| | (c) | | The Seller and Xxxxxxxx further jointly and severally covenant and agree to: |
| | (i) | | indemnify the Purchaser, the Issuer and all related Persons and to keep each
of them harmless of any notice, action, claim, demand or Loss pertaining to (A) the
Property resulting from events that occurred up to the date hereof or that may occur
after the date hereof and prior to Closing (including any Mining Operations and
including the claim mentioned in Schedule “G”, section 2) (B) any breach of
Environmental and Mining Laws that the Seller, Xxxxxxxx or either of their respective
directors, officers, shareholders or employees shall have caused or which shall have
occurred up to the date hereof or that may be caused or shall occur after the date
hereof and prior to Closing hereof including any emission, discharge, dumping of
substances, matter, pollutants, contaminants or hazardous or toxic waste into the
Environment or into any municipal sewer system or other water flow system; (C) any
inaccuracy of the Representations made by the Seller or Xxxxxxxx herein; or (D) any
failure by the Seller or Xxxxxxxx to perform any covenant or undertaking pursuant to
this agreement. |
| |
| | (ii) | | Notwithstanding Section 3(b)(ii) and clauses (A) and (B) of Section 3(c)(i)
but subject to the exceptions hereinafter provided, the Purchaser, the Issuer and all
related Persons shall not be entitled to make a claim or demand and shall not be
indemnified or held harmless by the Seller or Xxxxxxxx for any Loss incurred as a
result of the following mandatory work which Governmental Authorities require the
Purchaser to perform: |
| | (A) | | the site monitoring program (but excluding any Loss arising
from additional monitoring as may be required from time to time as a result of
the conditions determined from the monitoring program); |
| |
| | (B) | | the dismantling of surface buildings and infrastructures
required in connection with the rehabilitation of the Property pursuant to
the Mining Act (Quebec); |
| |
| | (C) | | the repatriation of supplies, equipment and heavy machinery
required in connection with the rehabilitation of the Property as aforesaid; |
| |
| | (D) | | the remediation of the fuel storage tanks, propane tanks and
related pipes, required in connection with the rehabilitation of the Property
as aforesaid or in connection with the granting of permits for mining work
(as distinguished from exploration); |
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| | (E) | | the disposal of solid waste and rehabilitation of the waste disposal
area required in connection with the rehabilitation of the Property
as aforesaid or in connection with mining work as aforesaid; |
| |
| | (F) | | the remediation of the minewater pond and sump required in
connection with the rehabilitation of the Property as aforesaid or in
connection with mining work as aforesaid;
|
| |
| |
but except, in all cases to the extent the expenses mentioned in this clause (ii) arise
in connection with: |
| |
| | (G) | | clause (C) of Section 3(c)(i); or |
| |
| | (H) | | an order issued by any Governmental Authority made in connection with (x)
the site conditions determined from the monitoring program described in clauses (A)
above, (y) any of the matters (B), (C), (D), (E) and (F) above before the
commencement of the activities mentioned therein (as applicable); or (z) any of the
matters identified in Schedule “G”, section 1. |
| | (iii) | | Any disclosure of information to the Purchaser or the Issuer (whether in the Representations
made by the Seller or Xxxxxxxx herein or elsewhere in this agreement or otherwise) by the
Seller or Xxxxxxxx or any knowledge of the Purchaser or the Issuer (however obtained) shall
not mitigate any liability of the Seller and Xxxxxxxx pursuant to clause (i) above. As to the
knowledge of the Purchaser and the Issuer: |
| | (A) | | attached hereto as Schedule “H” is a draft report dated June 12, 2006
prepared by Meno Speyer addressed to Xxxxxxx Xxxxxxx of Xxxxxxxxxx Xxxxxxxx on
behalf of the Purchaser and a letter dated July 3, 2006 by MRS & Associés addressed
to Xx. Xxxxx Xxxxxxx/Eastmain Resources concerning environmental matters affecting
the Property, and |
| |
| | (B) | | attached hereto as Schedule “I” is a list of inquiries and responses which
the Purchaser or the Issuer has made and obtained; |
| | | | but neither the Seller nor Xxxxxxxx shall be entitled to place any reliance on those
schedules or the documents to which they refer or draw any inference from the content
thereof that the Purchaser and the Issuer have no other information as to such matters or
limit their liability under this agreement by reason of the information, recommendations
or conclusions contained therein. |
| |
| | (iv) | | Promptly upon obtaining knowledge thereof after Closing, the Purchaser or the Issuer shall
notify the Seller or Xxxxxxxx of any cause which the |
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| | | | Purchaser or the Issuer has determined has given or could give rise to
indemnification under Section 3(c)(i). |
| |
| | | | The omission to so notify the Seller or Xxxxxxxx shall not relieve the Seller or
Xxxxxxxx from any duty to indemnify and hold harmless which otherwise might exist
with respect to such cause unless (and only to that extent) neither the Seller nor
Xxxxxxxx has been notified and such omission prejudices the ability of the Seller
or Xxxxxxxx to exercise its right to defend or otherwise increases the amount to
be indemnified, pursuant to Section 3(c)(i). |
| |
| | | | Neither Xxxxxxxx nor the Seller shall be permitted to compromise and settle or to
cause a compromise and settlement of a claim which is the subject of Section
3(c)(i) without the prior written consent of the Purchaser or the Issuer which
shall not be unreasonably withheld. |
| |
| | (v) | | Neither the Purchaser nor the Issuer (or any Related Person) shall be
entitled to make a claim against the Seller or Xxxxxxxx for indemnity pursuant to
clauses (A), (B) or (C) of Section 3(c)(i) unless and until the aggregate amount of
all such claims exceeds $50,000. Once such minimum threshold in claims has been
accumulated by the Purchaser, the Issuer and related Persons, the entirety of all such
claims shall be compensable pursuant to Section 3(c)(i) subject to the other
provisions of this Section 3(c). |
| |
| | (vi) | | The cumulative liability of the Seller and Xxxxxxxx for indemnity pursuant
to clauses (A), (B) or (C) of Section 3(c)(i) shall not exceed $5,000,000. |
| |
| | (vii) | | For certainty, it is confirmed that the limitations mentioned in clauses
(v) and (vi) above shall not apply to a claim for indemnity pursuant to clause (D) of
Section 3(c)(i), except to the extent such claim could also be made pursuant to
clauses (A), (B) or (C) of Section 3(c)(i). |
| | (d) | | The Purchaser and the Issuer further jointly and severally covenant and agree to: |
| | (i) | | indemnify the Seller and Xxxxxxxx and all related Persons and to keep each
of them harmless of any notice, action, claim, demand or Loss pertaining to (A) any
inaccuracy of the Representations made by the Purchaser or the Issuer herein or (B)
any failure by the Purchaser or the Issuer to perform any covenant or undertaking
pursuant to this agreement. |
| |
| | (ii) | | Promptly upon obtaining knowledge thereof after Closing, the Seller or
Xxxxxxxx shall notify the Purchaser or the Issuer of any cause which the Seller or
Xxxxxxxx has determined has given or could give rise to indemnification under Section
3(d)(i). |
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| | | | The omission to so notify the Purchaser or the Issuer shall not relieve the
Purchaser or the Issuer from any duty to indemnify and hold harmless which
otherwise might exist with respect to such cause unless (and only to that
extent) neither the Purchaser or the Issuer has been notified and such
omission prejudices the ability of the Purchaser or the Issuer to exercise
its right to defend or otherwise increases the amount to be indemnified,
pursuant to Section 3(d)(i). |
| |
| | | | Neither the Purchaser nor the Issuer shall be permitted to compromise and
settle or to cause a compromise and settlement of a claim which is the
subject of Section 3(d)(i) without the prior written consent of the Seller
and Xxxxxxxx which shall not be unreasonably withheld. |
| |
| | (iii) | | Neither the Seller nor Xxxxxxxx (or any related Person) shall
be entitled to make a claim against the Purchaser or the Issuer for indemnity
pursuant to clause (A) of Section 3(d)(i) unless and until the aggregate
amount of all such claims exceeds $50,000. Once such minimum threshold in
claims has been accumulated by the Seller, Xxxxxxxx and Related Persons the
entirety of all such claims shall be compensable pursuant to Section 3(d)(i)
subject to the other provisions of Section 3(d). |
| |
| | (iv) | | The cumulative liability of the Purchaser and the Issuer for
indemnity pursuant to clause (A) of Section 3(d)(i) shall not exceed
$5,000,000. |
| |
| | (v) | | For certainty, it is confirmed that the limitations mentioned
in clauses (iii) and (iv) above shall not apply to a claim for indemnity
pursuant to clause (B) of Section 3(d)(i). |
| | (e) | | The Purchaser, the Issuer, the Seller and Xxxxxxxx agree that this Section 3
shall be their sole remedy for (and shall govern) any action they may bring for
damages arising pursuant to this letter agreement and that the limitations of this
Section 3 shall apply to any such action. |
| |
| | (f) | | Each of the Seller, Xxxxxxxx, the Purchaser and the Issuer covenants that,
during the period between the execution and delivery of this agreement and the Closing,
it will take all actions within its control, and use its best efforts to cause other
actions to be taken which are not within its power to control, to ensure that all of
its Representations remain true and correct throughout that period as if such
Representations were continuously made throughout such period, and to satisfy or cause
to be satisfied the conditions in Section 4. |
The purchase and sale of the Property pursuant to this agreement will be completed (the
“Closing”) at the offices of Xxxxxx, de Xxxxx L.L.P., the Seller’s counsel, in Montreal,
Quebec
at 10:00 a.m. (Montreal time) or such other time as the Purchaser and Seller may determine (the
- 13 -
“Closing Time”) on February 23, 2007 or such other date as the Purchaser and Seller may determine
(the “Closing Date”).
The Closing shall be conditional upon the following matters being satisfied at the Closing
Time:
| | (a) | | the portion of the Purchase Price payable by the Purchaser to the Seller for
the acquisition of the Property pursuant to Section 1(a) above shall be delivered by
the Purchaser; |
| |
| | (b) | | the Seller at its expense shall deliver to the Purchaser, among other
documents, all in form and substance acceptable to the Purchaser: |
| | (i) | | a legal opinion of counsel to the Seller addressed to the
Purchaser and the Issuer, to the effect that: |
| | (A) | | the Seller and Xxxxxxxx are incorporated and
existing under their respective jurisdictions of incorporation and that
they have the corporate power to perform their respective obligations
under this agreement; |
| |
| | (B) | | that none of the execution and delivery of
this agreement, or the performance by the Seller or Xxxxxxxx of their
respective obligations hereunder will conflict with or result in any
breach of the constating documents or by-laws of the Seller or
Xxxxxxxx; |
| |
| | (C) | | that this agreement has been duly authorized
and executed and delivered by each of the Seller and Xxxxxxxx, and
constitutes a valid and legally binding obligation of each of the
Seller and Xxxxxxxx enforceable against it in accordance with its
terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, liquidation, reorganization, moratorium or similar laws
affecting the rights of creditors generally and except as limited by
the application of equitable principles when equitable remedies are
sought, and the qualification that the enforceability of rights of
indemnity and contribution may be limited by applicable law; and |
| |
| | (D) | | as to such other matters as the Purchaser and
the Issuer may reasonably request; and |
| | (ii) | | an assignment to the Purchaser of such insurance respecting
the Property as is assignable and which is designated by the Purchaser; |
| |
| | (iii) | | a certificate of the Seller and Xxxxxxxx confirming that all
Representations made by them hereunder are true and correct in all respects on
the Closing Date, as though made on such date; |
- 14 -
| | (iv) | | a release of the royalty interest of Xxxxxx Resources Inc. mentioned in
paragraph 2 of Schedule “F”; |
| |
| | (v) | | a deed of transfer of the Property and all other instruments of transfer
sufficient to transfer to the Purchaser all right, title and interest in the Property
(including the Mining Rights) free and clear of all Encumbrances, in recordable form;
and |
| |
| | (vi) | | all necessary consents and waivers subject only to such terms and conditions
as are acceptable to the Purchaser; |
| | (c) | | at the expense of the Purchaser, the Seller shall have made proper and timely application
for the renewal of all Mining Rights which expire in 2007; |
| |
| | (d) | | the Seller shall have duly recorded the Mining Lease; |
| |
| | (e) | | the Seller shall have paid in full all amounts due to all Governmental Authorities as may be
demanded by them as a condition of granting the necessary consents to the transfer of the
Property (including the Mining Lease and the Mining Rights) and the Environmental Permits,
disregarding for that purpose any compromise of such amounts under the CCAA Proceedings; |
| |
| | (f) | | the Purchaser, at its expense, shall deliver to the Seller, among other documents, all in
form and substance acceptable to the Seller : |
| | (i) | | a legal opinion of counsel to the Purchaser addressed to the Seller and
Xxxxxxxx, to the effect that: |
| | (A) | | the Purchaser and the Issuer are incorporated and subsisting
under their respective jurisdictions of incorporation and that they have the
corporate power to perform their respective obligations under this agreement; |
| |
| | (B) | | none of the execution and delivery of this agreement, or the
performance by the Purchaser or the Issuer of their respective obligations
hereunder will conflict with or result in any breach of the constating
documents or by-laws of the Purchaser or the Issuer; |
| |
| | (C) | | this agreement has been duly authorized and executed and
delivered by the Purchaser and the Issuer, and constitutes a valid and
legally binding obligation of each of the Purchaser and the Issuer
enforceable against it in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, liquidation,
reorganization, moratorium or similar laws affecting the rights of creditors
generally and except as limited by the application of equitable principles
when equitable remedies are |
- 15 -
| | | | sought, and the qualification that the enforceability of rights of indemnity and
contribution may be limited by applicable law; |
| |
| | (D) | | the Eastmain Shares have been duly authorized and issued as fully paid and non assessable; |
| |
| | (E) | | the Second Tranche Shares have been duly authorized and will, when issued be duly issued as
fully paid and non-assessable; |
| |
| | (F) | | the Series I Warrants have been duly created, authorized and issued and the Series I Warrant
certificates have been duly authorized and executed by the Issuer and constitute legal, valid
and binding obligations of the Issuer, enforceable against the Issuer in accordance with the
terms thereof. The Series I Warrant Shares will, when issued upon the exercise of the Series
I Warrants in accordance with the provisions thereof, be issued as fully paid and
non-assessable; |
| |
| | (G) | | the Series II Warrants have been duly created and authorized and the Series II Warrant
certificates will, when issued, be duly authorized and executed by the Issuer and will
constitute legal, valid and binding obligations of the Issuer, enforceable against the Issuer
in accordance with the terms thereof. The Series II Warrant Shares will, when issued upon the
exercise of the Series II Warrants in accordance with the provisions thereof, be issued as
fully paid and non-assessable; |
| |
| | (H) | | the issue and delivery of the Eastmain Shares and Series I Warrants by the Issuer to Xxxxxxxx
in accordance with this agreement have been effected in such a manner as to be exempt, either
by statute, regulation, instrument or order, from the prospectus requirements of the
Securities Laws and no other document will be required to be filed, no proceeding will be
required to be taken and, no approval, consent, order or authorization of any regulatory
authority will be required to be obtained under the Securities Laws to permit the issue and
delivery of the Eastmain Shares and Series I Warrants to Xxxxxxxx, except for the filing by
the Issuer of a completed report pursuant to Part 6 of Regulation 45-106 respecting prospectus
and registration exemptions with the Autorité des marchés financiers (the “Autorité”),
together with any other documents related thereto and the applicable fees, within ten days of
such issue and delivery; |
| |
| | (I) | | the issue and delivery of the Second Tranche Shares and Series II Warrants when issued by
the Issuer to Xxxxxxxx in accordance with this agreement will be effected in such a manner as
to be |
- 16 -
| | | | exempt, either by statute, regulation, instrument or order, from the prospectus
requirements of the Securities Laws and, no other document will be required to be filed,
no proceeding will be required to be taken and no approval, consent, order or
authorization of any regulatory authority will be required to be obtained under the
Securities Laws to permit the issue and delivery of the Second Tranche Shares and Series
II Warrants to Xxxxxxxx, except for the filing by the Issuer of a completed report
pursuant to Part 6 of Regulation 45-106 respecting prospectus and registration exemptions
with the Autorité, together with any other documents related thereto and the applicable
fees, within ten days of such issue and delivery. |
| |
| | (J) | | no prospectus or registration pursuant to the registration requirements of the Securities
Laws will be required and no other document will be required to be filed, no proceeding will
be required to be taken and no approval, consent or authorization of any regulatory authority
will be required to be obtained under the Securities Laws to permit the issue and delivery by
the Issuer of the Series I Warrant Shares and Series II Warrant Shares upon the exercise of
Series I Warrants and Series II Warrants in accordance with the terms thereof to the holders
of Series I Warrants and Series II Warrants, provided that no commission or other remuneration
is paid or given to others in respect of the issue and delivery of the Series I Warrant Shares
and Series II Warrant Shares except for administrative or professional services or for
services performed by a registrant properly registered under such Securities Laws. |
| |
| | (K) | | no prospectus will be required, no other document will be required to be filed, no
proceeding will be required to be taken and no approval, consent, order or authorization of
any regulatory authority will be required to be obtained under the Securities Laws to permit
the first trade of the Eastmain Shares, Second Tranche Shares, Series I Warrants, Series II
Warrants, Series I Warrant Shares or Series II Warrant Shares provided that: |
| | (a) | | at the time of such trade, the Issuer is and has been a reporting issuer
in a jurisdiction of Canada for the four months immediately preceding the trade; |
| |
| | (b) | | at least four months have elapsed from the date of the issuance of the
Eastmain Shares (in the case of a trade of the Eastmain Shares), the Second Tranche
Shares (in the case of a trade of the Second Tranche Shares), the Series I Warrants
(in the case of a trade of Series I Warrants or |
- 17 -
| | | | Series I Warrant Shares) or the Series II Warrants (in the case of
a trade of Series II Warrants or Series II Warrant Shares); |
| |
| | (c) | | the certificate representing the Eastmain
Shares, Second Tranche Shares, Series I Warrants and Series II
Warrants and, if the Series I Warrants or Series II Warrants are
exercised within four months from the date of their issuance, the
certificates representing the Series I Warrant Shares or Series II
Warrant Shares are endorsed with the legend required pursuant to
Regulation 45-102 respecting Resale of Securities (“45-102”); |
| |
| | (d) | | the trade is not a “control distribution” as
defined in 45-102; |
| |
| | (e) | | no unusual effort is made to prepare the
market or to create a demand for the securities subject to such
trade; |
| |
| | (f) | | no extraordinary commission or consideration
is paid to a person or corporation in respect of such trade; |
| |
| | (g) | | if the seller of the securities is an insider
or officer (as those terms are defined in the Securities Laws) of the
Issuer, the seller has no reasonable grounds to believe that the
Issuer is in default of any of its obligations under “securities
legislation” (as that term is defined in National Instrument 14-101 –
Definitions); and |
| | (L) | | as to such other matters as the Seller may reasonably request. |
| | (ii) | | an approval from the Toronto Stock Exchange with respect to the issuance of
the Eastmain Shares, Series I Warrants, Second Tranche Shares and Series II Warrants
in accordance with the terms and conditions of this agreement; |
| |
| | (iii) | | a certificate of the Purchaser and the Issuer confirming that all
Representations made by them hereunder are true and correct in all respects on the
Closing Date, as though made as such date; |
| | (g) | | the Environmental Permits shall have been transferred, issued or re-issued in favour of the
Purchaser, subject only to such terms and conditions as are acceptable to the Purchaser; and |
| |
| | (h) | | there shall be no injunction, restraining order or decree of any nature of any court or
Governmental Authority of any nature or any court or governmental agency or |
- 18 -
| | | | body of competent jurisdiction that is in effect that restrains or prohibits the
Closing or the acquisition of the Property by the Purchaser. |
In consideration for the transfer and sale of the Property by the Seller to the Purchaser, the
Seller shall be entitled to receive a royalty (the “NSR Royalty”) of two percent (2%) of the Net
Smelter Returns (as defined in Schedule “B” hereto) derived from the Property following the
commencement of Commercial Production thereon, which NSR Royalty shall be inclusive of any other
royalties payable with respect to the Property (including, without limitation, the Prior
Royalties).
With respect only to the initial 250,000 ounces produced on the Property (the “Initial
Production”), the dollar amount of the NSR Royalty applicable thereto shall be increased if the
average end of day price of gold for the twelve (12) month period immediately preceding the sale
of the Initial Production as quoted on the New York Mercantile Exchange (COMEX) (the “Gold Price”)
is equal to or greater than US $500/oz, the increase being calculated as follows:
| | (i) | | if the Gold Price is equal to or greater than US $500/oz but
less than US$600/oz, then the dollar amount of the NSR Royalty shall be
increased by 5% with respect to such Initial Production (i.e. if the amount of
the NSR Royalty for the Initial Production was $100,000, the amount payable
would be $105,000); |
| |
| | (ii) | | if the Gold Price is equal to or greater than US $600/oz but
less than US$750/oz, then the dollar amount of the NSR Royalty shall be
increased by 10% with respect to such Initial Production (i.e. if the amount
of the NSR Royalty for the Initial Production was $100,000, the amount payable
would be $110,000); and |
| |
| | (iii) | | if the Gold Price is equal to or greater than US $750/oz, then
the dollar amount of the NSR Royalty shall be increased by 15% with respect to
such Initial Production (i.e. if the amount of the NSR Royalty for the Initial
Production was $100,000, the amount payable would be $115,000). |
For greater certainty and without limiting the generality of the foregoing, the NSR Royalty
shall be inclusive of any other royalties payable with respect to the Property granted prior to
Closing (including, without limitation, the Prior Royalties) and accordingly, if at the time of
any payment of the NSR Royalty, the Purchaser is subject to payment to a third party in respect of
the Net Smelter Returns (including payment in respect of any of the Prior Royalties), the amount
payable to the Seller shall (without duplication) be reduced by the amount of the third party
payment.
Notwithstanding the foregoing, the Purchaser shall be relieved from liability to pay the NSR
Royalty upon, and in respect of the period following, (A) its sale, assignment or disposition
- 19 -
of the Property (subject to the provisions of Section 11) or (B) its abandonment and notice
thereof having been given to the Seller.
| 6. | | Payment of NSR Royalty |
The NSR Royalty, if any, less any deductions pursuant to Section 5, shall be payable to the
Seller in equal quarterly instalments and starting at the end of the first full calendar quarter
after the later of: (a) the Closing Date; and (b) the commencement of Commercial Production on the
Property.
The reasonably estimated amount of the NSR Royalty, if any, less any deductions pursuant to
Section 5, payable for each calendar quarter year shall be paid within 60 days after the end of
the quarter year to which it relates, accompanied by a statement for the quarter year in question.
The balance, if any, of the NSR Royalty payable for a full calendar year shall be accompanied by a
statement of the NSR Royalty for such year, duly certified by a chartered accountant appointed for
such purpose, who may be our chartered accountant. Any overpayment made in any year shall be
deductible from payments due in any subsequent year(s).
If at any time or times the Purchaser or the Issuer has, or has a reasonable expectation of, a
claim for indemnity against either the Seller or Xxxxxxxx pursuant to Section 3(c)(i) (whether or
not the threshold mentioned in Section 3(c)(iv) has been exceeded), the Purchaser may withhold from
any payment of the NSR Royalty an amount which in its reasonable opinion is sufficient to satisfy
such claim in full. Any amount so withheld shall be released to the Seller at such time as the
particular claim has been satisfied in full or the Seller has provided security satisfactory to the
Purchaser or the Issuer in respect of such claim. When it is determined by agreement of the parties
or by a final order of a court of competent jurisdiction (from which no further appeal is possible)
whether and to what extent the Seller or Xxxxxxxx is liable to the Purchaser or the Issuer in
respect of such claim, the amount so withheld by the Purchaser or the Issuer shall be applied
toward the satisfaction of such claim and, to the extent not required for such purpose, shall be
paid to the Seller without interest.
The Seller shall not sell, assign, transfer or create or permit to arise any Encumbrance on
the NSR Royalty, except a sale thereof to a Royalty Purchaser pursuant to Section 7.
| 7. | | Right to Partially Purchase NSR Royalty |
The Seller has agreed to and does hereby grant the Purchaser the option to purchase one-half
(1/2) of the NSR Royalty for any production over and above the Initial Production (the “Remaining
Royalty”) for $1,000,000, at any time which will leave the Seller with a total NSR Royalty of two
percent (2%) of the Net Smelter Returns on the Initial Production and one percent (1%) of Net
Smelter Returns on the Property for any production over and above the Initial Production. If at the
time of the exercise of the option there are Prior Royalties, the said option price shall be
reduced by one-half of the present value of the Prior Royalties, to be determined by an expert
selected by the Seller and the Purchaser. If they are unable to agree on a selection of an expert,
each of the Seller and the Purchaser shall name an expert and the two experts shall name a third
expert. Each expert shall provide his estimate of value. If two of the experts
- 20 -
estimate the same value, that amount shall be used. In any other case, the two estimates which are
nearest in amount to one another shall be averaged and that average shall be used. All costs
associated with the retention of such experts shall be borne equally by the Seller and the
Purchaser.
In addition, the Purchaser shall have the right of first refusal to purchase the Seller’s
remaining right, title and interest in the Remaining Royalty as follows. The Seller may only
transfer, assign, convey or otherwise dispose of any part or all of the Remaining Royalty interest
(the “Offered Royalty Interest”) to a bona fide arm’s length purchaser (a “Royalty Purchaser”)
pursuant to a written offer from, or agreement with, such Royalty Purchaser (the “Royalty Offer”).
Upon receipt of a Royalty Offer, the Seller must provide the Purchaser with a written notice (the
“Royalty Offer Notice”), clearly specifying the Offered Royalty Interest, the price at which the
Seller is prepared to sell the Offered Royalty Interest (the “Royalty Price”), any information
within the Seller’s possession concerning the identity of the Royalty Purchaser, and a date and
time for closing, which shall be during normal business hours on a day which shall be not less than
55 and not more than 65 days after the day of giving the Royalty Offer Notice. The Royalty Offer
Notice shall be accompanied by a copy of the Royalty Offer. The Purchaser shall have the right to
purchase the Offered Royalty Interest at the equivalent of the Royalty Price as specified in the
Royalty Offer Notice if the Purchaser notifies the Seller of its election to purchase the Offered
Royalty Interest, within 30 days after receiving the Royalty Offer Notice. If the Purchaser
notifies the Seller that it elects not to purchase the Offered Royalty Interest on the terms set
out in the Royalty Offer Notice, or if the Purchaser does not respond within 30 days of its receipt
of the Royalty Offer Notice, the Seller may transfer the Offered Royalty Interest to the Royalty
Purchaser within 30 days following the day on which the Purchaser notifies the Seller of the
Purchaser’s election not to purchase the Offered Royalty Interest, or if the Purchaser does not
respond within 30 days following the date on which the Seller delivered the Royalty Offer Notice to
the Purchaser, within 30 days following the conclusion of such 30 day period following the date on
which the Seller delivered the Royalty Offer Notice to the Purchaser, in either case at a price
equal to or higher, but not lower, than the Royalty Price specified in the Royalty Offer Notice. If
such transfer does not take place within such period, then the provisions of this Section will
again apply to the Remaining Royalty (or portion thereof) not so sold.
On the Closing Date, the mining claims comprising part of the Property shall be transferred
to the Purchaser or its nominee. The transfers shall be recorded at the Purchaser’s cost and
expense.
Nothing in this agreement shall be construed as any promise or liability on the Purchaser’s
part, express or implied, to put the Property into, or maintain the same in, Commercial Production
after the purchase thereof.
- 21 -
The Seller and Xxxxxxxx shall each keep confidential all information received by it concerning
the Property, and the Seller and Xxxxxxxx may not release to the public any such information
without the Purchaser’s prior written consent, which consent shall not be unreasonably withheld,
unless such information is required to be released pursuant to Applicable Laws; and the Seller and
Xxxxxxxx shall not, except when required by Applicable Laws, or when permitted by this agreement,
use or permit to be used, directly or indirectly, the name of the Purchaser or the Issuer for any
purpose related to the Property.
Except as otherwise set forth herein, this agreement and its rights hereunder are
non-assignable by the Seller without the Purchaser’s prior written consent. Furthermore, the
Purchaser shall never assign or transfer any interest in the Property (which restriction shall
not, for certainty, prohibit the creation of any Encumbrance) before any such assignee or
transferee enters into a written agreement in favour of the Seller or successor thereof agreeing
to be bound by the NSR Royalty pursuant to Sections 5 and 6 of this agreement (to the extent
applicable to the interest in the Property so assigned or transferred).
This letter constitutes the entire agreement between the Purchaser, the Issuer, Xxxxxxxx and
the Seller and there are no rights or obligations on the part of either of the Purchaser, the
Issuer, Xxxxxxxx and the Seller toward each other or for the benefit of any other party, nor any
other act, matter or thing to be done or taken by either of the parties hereto or any other Person
with respect to the Property except as herein set forth. For greater certainty, each of the
parties agree and acknowledge that this agreement supersedes the letter of intent between the
Issuer and Xxxxxxxx dated May 18, 2006 and accepted by Xxxxxxxx on May 31, 2006.
| 13. | | Execution of Other Documents |
Each party agrees to execute any other documents with respect to or to clarify the intent of
this agreement as the other(s) may reasonably request.
Unless otherwise provided herein, any notice or communication to any party under this
agreement may be given by delivering the same by hand to a representative of such party or by
facsimile to such party, addressed as follows:
To the Purchaser or the Issuer:
Eastmain Resources Inc.
R.X. #0
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
Xax: (000) 000-0000
Attention:
Xxxxxx X. Xxxxxxxx
- 22 -
To the Seller or Xxxxxxxx:
Xxxxxxxx Resources Inc.
1100 xxx Xxxxxxxxxx, Xxxxx 0000
Xxxxxxxx,
Xxxxxx X0X 0X0
Xax: (000) 000-0000
Attention:
Xxxxx Xxxxxxx
or to such other address as the parties may from time to time designate for themselves in writing,
and such notice shall be deemed to have been given and received, if delivered by hand, at the time
of delivery; or if faxed, on the day of faxing if received before 5:00 pm or on the next Business
Day if received after 5:00 pm. (For convenience of reference, the current telephone number of the
Purchaser and Eastmain is (000) 000-0000 and the current telephone number of the Seller and
Xxxxxxxx is (000) 000-0000.)
Unless otherwise stated, all references to dollar amounts in this agreement shall be to
Canadian currency.
The parties acknowledge and agree that this agreement and the transactions contemplated hereby
shall be subject to the approval of all applicable regulatory authorities, including without
limitation, the approval of The Toronto Stock Exchange.
| 17. | | Relationship and Other Opportunities — General |
The rights, privileges, duties, obligations and liabilities, as between the Purchaser and the
Issuer on the one hand and the Seller and Xxxxxxxx on the other hand, shall be separate and not
joint or collective and nothing herein contained shall be construed as creating a partnership, an
association, agency or subject as herein specifically provided, a trust of any kind or as imposing
upon any of the parties any partnership or fiduciary duty, obligation or liability. No party is
liable for the acts, covenants and agreements of any other parties except as specifically agreed to
in this agreement.
Except as otherwise set forth herein, each of the parties shall have the free and unrestricted
right independently to engage in and receive the full benefits of any and all business endeavours
of any sort whatsoever whether or not competitive with the endeavours contemplated herein without
consulting the other parties or inviting or allowing the other parties to participate therein. No
party shall be under any fiduciary or other duty to the other parties which shall prevent it from
engaging in or enjoying the benefits of competing endeavours within the general scope of endeavours
contemplated by this agreement. The legal doctrine of “corporate opportunity” sometimes applied to
persons engaged in a joint venture or having fiduciary status shall not apply in the case of each
party.
- 23 -
Prior to the Closing Date, no party shall make announcements regarding this agreement or the
transactions contemplated hereby that have not been previously reviewed and commented on by the
other parties, except that any party may make a press release or filing with a regulatory authority
if counsel for such party advises that such press release or filing is necessary in order to comply
with Applicable Laws or the rules and policies of any securities regulatory authority or stock
exchange having jurisdiction over such party, in which case such party shall use its commercially
reasonable efforts to provide the other parties with an opportunity to review and comment on such
press release or filing.
This agreement shall enure to the benefit of and shall be binding upon the parties and their
respective administrators, successors and permitted assigns. This agreement shall be interpreted
according to the laws of the Province of
Quebec and the federal laws of Canada applicable therein.
Time shall be in all respects of the essence hereof.
The following terms used in this agreement shall have the meanings given to them as set forth
below:
“Applicable Laws” shall mean any Canadian federal, provincial or local law, regulation, ordinance,
code, order or other requirement or rule of law or the rules, policies, orders or regulations of
any securities commission or stock exchange, including any judicial or administrative
interpretation thereof applicable to any Person or legal entity (including each party to this
agreement) or any of its properties, assets, business or operations.
“Autorité” shall have the meaning ascribed thereto in Section 4(f)(i)(H) hereof.
“Business Day” shall mean any day except Saturday, Sunday or a statutory holiday in Toronto,
Ontario or Montreal,
Quebec.
“Xxxxxxxx” shall have the meaning ascribed thereto in the preamble hereto.
“CCAA Proceedings” means the proceedings in respect of the Seller and Xxxxxxxx instituted under the
Companies’ Creditors Arrangement Act as more particularly described in Schedule “C” hereto.
“Closing” shall have the meaning ascribed thereto in Section 4 hereof.
“Closing Date” shall have the meaning ascribed thereto in Section 4 hereof.
“Closing Time” shall have the meaning ascribed thereto in Section 4 hereof.
- 24 -
“Commercial Production” means the output of product from operations which have operated
continuously on the Property for a period of at least three (3) consecutive calendar months, which
output is equal to or exceeds sixty-five percent (65%) of the rated plant capacity as set out in
the Feasibility Report applicable to the Property.
“Eastmain Shares” shall have the meaning ascribed thereto in Section 1(a)(i) hereof.
“Effective Date” shall have the meaning ascribed thereto in the preamble hereto.
“Encumbrances” shall mean any and all mortgages, pledges, security interests, liens, charges,
hypothecs, encumbrances of whatsoever nature and kind, whether recorded or unrecorded, registered
or unregistered.
“Environment” shall mean all components of the earth, including, without limitation, air (and all
layers of the atmosphere), land (and all surface and subsurface soil, underground spaces and
cavities and all land submerged under water) and water (and all surface and underground water)
organic and inorganic matter and living organisms and the interacting natural systems that include
components referred to above.
“Environmental and Mining Laws” shall mean any applicable federal, provincial, regional,
territorial, municipal, county, district or local laws, regulations, directives, policies, orders,
bylaws, rules, permits and other lawful requirements of any Governmental Authority or the Civil
Code of Québec and all judicial and administrative decisions, orders and decrees that relate in any
way to (i) the Environment, (ii) the forest natural resources, (iii) environmental assessment, (iv)
public and occupational health and safety, (v) on-site or off-site contamination, Hazardous
Substances into the Environment (including, without limitation, the storage, manufacture,
processing, labelling, disposal, treatment, generation, use, transport, handling, remediation or
Release of Hazardous Substances), or (vi) the environmental conditions on, under or about the
Property (including, without limitation, soil, sediments, surface water, groundwater and indoor and
ambient air conditions), or (vii) any Mining Operations.
“Environmental Liabilities” shall mean any and all claims, actions, causes of action, damages,
losses, liabilities, obligations, penalties, judgments, amounts paid in settlement, assessments,
costs, disbursements, or expenses (including, without limitation, attorneys’ fees and costs,
experts’ fees and costs, and consultants’ fees and costs) of any kind of any nature whatsoever that
are asserted by any person of entity, alleging liability (including, without limitation, liability
for study, testing or investigatory costs, cleanup costs, response costs, removal costs,
remediation costs, containment costs, restoration costs, corrective action costs, closure costs,
reclamation costs, natural resource damages, property damages, business losses, personal injuries,
penalties or fines) arising out of, based on or resulting from (i) the presence, release,
threatened release, discharge or emission into the Environment of any Hazardous Substances existing
or arising on, beneath or above the Property and/or emanating or migrating and/or threatening to
emanate or migrate from the Property to off-site properties or (ii) the violation or alleged
violation of any Environmental and Mining Laws.
- 25 -
“Environmental Permits” shall mean all permits, authorizations, certificates, registrations,
privileges, exemptions, waivers, variations, clearances, orders and any other approvals held by
Xxxxxxxx and the Seller pertaining to the Property and listed in Schedule “E” attached hereto;
“Feasibility Report” means a study prepared at the direction of the Purchaser, at the Purchaser’s
own cost, by a recognized firm of mining engineering consultants which contains a detailed
examination of the feasibility of bringing a deposit of minerals on the Property into Commercial
Production by the establishment of a mine entailing an operation involving production of a minimum
of 25,000 ounces of gold equivalent per year, which study reviews all outstanding issues, contains
the statement of the ore reserves, reviews the nature and scale of any proposed operation, contains
an estimate of the construction costs and production costs and is in the form of a bankable
document (meaning a document appropriate for presentation to a bank or other financial institution
from which a party might wish to secure financing).
“Governmental Authority” means any federal, provincial, territorial, municipal, local or other
governmental department, commission, board, bureau, agency, state owned corporation or
instrumentality, any court, securities commission or stock exchange having jurisdiction.
“Hazardous Substances” shall mean any Substance which is or is deemed to be alone or in any
combination, hazardous, hazardous waste, hazardous material, toxic, a pollutant, a deleterious
substance, a contaminant or a source of pollution or contamination under any applicable
Environmental and Mining Laws.
“Initial Production” shall have the meaning ascribed thereto in Section 5 hereof.
“Loss” or “Losses” shall mean actual losses, liabilities, damages, injuries, costs or expenses
(including without limitation legal expenses on a full indemnity basis).
“Mining Lease” means that certain lease entered into by and between the “Ministre des Ressources
Naturelles” and the Seller on January 10, 1995 identified as “Bail xxxxxx superficiaire et
souterrain numéro 817” for a term ending January 9, 2015,
“Mining Operations” includes every kind of work done on or in respect of the Property or the
products therefrom and, without limiting the generality of the foregoing, includes the work of
assessment, geophysical, geochemical and geological surveys, studies and mapping, investigating,
drilling, designing, examining, equipping, improving, surveying, shaft sinking, raising,
cross-cutting and drifting, searching for, digging, trucking, sampling, working and procuring
minerals, ores and metals, surveying, achieving commercial production and bringing any mining
claims to lease or patent, and doing all other work usually considered to be prospecting,
operation, development, exploration, production and mining work.
“Mining Rights” means all mining titles as defined under the Mining Act (
Quebec), which make up
the properties which are necessary for the ownership, exploration, prospecting of the Property,
held by the Seller on the Closing Date which (i) the Seller is able to transfer or cause to be
transferred to the Purchaser using commercial best efforts, (ii) are related to and used
- 26 -
exclusively in connection with the Property and (iii) are listed or described in Schedule “A”
attached hereto.
“Net Smelter Returns” shall have the meaning ascribed thereto in Schedule “B” hereto.
“NSR Royalty” shall have the meaning ascribed thereto in Section 5 hereof.
“Offered Royalty Interest” shall have the meaning ascribed thereto in Section 7 hereof.
“Person” shall include any natural person, partnership, company, corporation, unincorporated
association, Governmental Authority or other agency, trust, trustee or other entity howsoever
designated or constituted.
“Prior Royalties” shall mean all rents and royalties with respect to the Property, all as set
forth in Schedule “F” hereto.
“Property” means the property known as the Eastmain Mine Property, as more particularly described
in Schedule “A” attached hereto and includes all ground workings and surface facilities relating
thereto and all equipment, office furniture, tools, machinery, rolling stock (including road
vehicles) and spare parts used in connection with the said mining claims or situate at the said
Property; and specifically excluding the two ore pads located in Temiscamie.
“Purchaser” shall have the meaning ascribed thereto in the preamble hereto.
“Related Persons” means shareholders, officers, directors, employees and agents.
“Release” shall mean (i) when used as a verb: release, spill, leak, emit, deposit, discharge,
xxxxx, migrate, dump, issue, empty, place, seep exhaust, abandon, bury, incinerate or dispose into
the Environment; and (ii) when used as a noun, has a correlative meaning.
“Remaining Royalty” shall have the meaning ascribed thereto in Section 7 hereof.
“Representations” means the representations and warranties set out in Section 2 hereof.
“Royalty Offer” shall have the meaning ascribed thereto in Section 7 hereof.
“Royalty Offer Notice” shall have the meaning ascribed thereto in Section 8 hereof.
“Royalty Purchaser” shall have the meaning ascribed thereto in Section 7 hereof.
“Second Tranche Shares” shall have the meaning ascribed thereto in Section 1(b)(i) hereof.
“Securities Laws” shall mean the Securities Act (Québec) and the Securities Act (Ontario) and the
published rules, regulations, ruling and orders made and forms prescribed thereunder together with
all applicable policy statements, multilateral or national instruments and blanket orders and
rulings issued or adopted by the Autorité des marchés financiers (the “Autorité”) and the Ontario
Securities Commission.
- 27 -
“Seller” shall have the meaning ascribed thereto in the preamble hereto.
“Series I Warrants” shall have the meaning ascribed thereto in Section 1(a)(ii) hereof.
“Series I Warrant Shares” shall have the meaning ascribed thereto in Section 1(a)(ii) hereof.
“Series II Warrants” shall have the meaning ascribed thereto in Section 1(b)(ii) hereof.
“Series II Warrant Shares” shall have the meaning ascribed thereto in Section 1(b)(ii) hereof.
“Statutory Hold Period” shall have the meaning ascribed thereto in Section 2(a)(xx) hereof.
“Substance” shall mean any substance, waste, liquid, gaseous or solid matter, fuel, microorganism,
sound, vibration, ray, heat, odour, radiations, energy sector, plasma and inorganic matter.
| 21. | | Preamble and Schedules |
The preamble as well as all of the Schedules hereto form an integral part hereof. If need be,
the preamble may be used to interpret it. If there is a conflict of interpretation or a
contradiction between this agreement and the preamble or the Schedules, the parties agree that the
agreement will prevail on said preamble or schedules.
The invalidity or nullity of a provision of this agreement shall not affect its other
provisions and they shall continue to have full force and effect and shall be construed as if such
invalid and null provision had been omitted.
Each party upon the request of any other shall do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged or delivered all such further acts, deeds, documents,
assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably
necessary or desirable in connection with the transactions contemplated by this agreement.
No waiver, whether by conduct or otherwise, of any of the provisions of this agreement shall
be deemed to constitute a waiver of any other provisions (whether or not similar) nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided in an instrument duly
executed by the party to be bound thereby.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
- 28 -
This agreement may be executed in multiple counterparts, each of which being deemed an
original, and all of which, taken together, constituting one and the same instrument
notwithstanding the fact that all parties are not signatories to the same counterpart.
If the foregoing is acceptable, please indicate your agreement by signing and returning the
enclosed duplicate of this agreement.
26. Language
The parties hereto acknowledge that it is their express wish that this agreement and all
documents related thereto by drawn up in the English language. Les parties aux présentes
reconnaissent qu’il est de leur volonté expresse que la présente convention et tous les documents
s’y rapportant soient rédigés en langue anglaise.
| | | | | | | |
| | | Eastmain Mines Inc. |
|
| | | | | | |
|
| | Per:
| | /s/ Xxxxxx X. Xxxxxxxx | | |
|
| | | | | | |
|
| | | | Name: Xxxxxx X. Xxxxxxxx | | |
|
| | | | Title: Director | | |
|
| | | | | | |
| | | Eastmain Resources Inc. |
|
| | | | | | |
|
| | Per:
| | /s/ Xxxxxx X. Xxxxxxxx | | |
|
| | | | | | |
|
| | | | Xxxxxx X. Xxxxxxxx | | |
|
| | | | President | | |
- 29 -
The foregoing truly represents our agreement in respect to the Property. The Seller and
Xxxxxxxx each agrees to be bound by and to comply with the terms, provisions and conditions
contained in the within agreement.
DATED at MONTREAL,
Quebec, the 19th day of February, 2007.
| | | | | | | |
| | | MSV Resources Inc. |
|
| | | | | | |
|
| | Per:
| | /s/ Xxxxx Xxxxxxx | | |
|
| | | | | | |
|
| | | | Name: Xxxxx Xxxxxxx | | |
|
| | | | Title: President | | |
|
| | | | | | |
| | | Xxxxxxxx Resources Inc. |
|
| | | | | | |
|
| | Per:
| | /s/ Xxxxx Xxxxxxx | | |
|
| | | | | | |
|
| | | | Name: Xxxxx Xxxxxxx | | |
|
| | | | Title: PRES & CEO | | |
- 30 -
SCHEDULE “A”
DESCRIPTION OF PROPERTY
The Property consists of the following Mining Rights and all movable and immovable property used
in connection with such Mining Rights or situated at the said Property, including, without
limitation, the following movable and immovable property:
| | | | | | | |
| Type of | | | | Registration | | Expiration |
| Mining Rights | | Title number | | Date | | Date |
| BM/ML
| | 817
| | 1995/01/10
| | 2015/01/09 |
| CDC/CDM
| | 104458
| | 2005/11/24
| | 2007/11/23 |
| CDC/CDM
| | 1133433
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133434
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133435
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133436
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133437
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133438
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133439
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133440
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133441
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133442
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133443
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133444
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133445
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133446
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133447
| | 2005/10/28
| | 2007/06/28 |
| | | | | | | |
| Type of | | | | Registration | | Expiration |
| Mining Rights | | Title number | | Date | | Date |
| CDC/CDM
| | 1133448
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133449
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133450
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133451
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133452
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133453
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133454
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133455
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133456
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133457
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133458
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133459
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133460
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133461
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133462
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133463
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133464
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133465
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133466
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133467
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133468
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133469
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133470
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133471
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133472
| | 2005/10/28
| | 2007/06/28 |
| | | | | | | |
| Type of | | | | Registration | | Expiration |
| Mining Rights | | Title number | | Date | | Date |
| CDC/CDM
| | 1133473
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133474
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133475
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133476
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133477
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133478
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133479
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133480
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133481
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133482
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133483
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133484
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133485
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133486
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133487
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133488
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133489
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133490
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133491
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133492
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133493
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133494
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133495
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133496
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133497
| | 2005/10/28
| | 2007/06/28 |
| | | | | | | |
| Type of | | | | Registration | | Expiration |
| Mining Rights | | Title number | | Date | | Date |
| CDC/CDM
| | 1133498
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133499
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133500
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133501
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133502
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133503
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133504
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133505
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133506
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133507
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133508
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133509
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133510
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133511
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133512
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133513
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133514
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133515
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133516
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133517
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133518
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133519
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133520
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133521
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133522
| | 2005/10/28
| | 2007/06/28 |
| | | | | | | |
| Type of | | | | Registration | | Expiration |
| Mining Rights | | Title number | | Date | | Date |
| CDC/CDM
| | 1133523
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133524
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133525
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133526
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133527
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133528
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133529
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133530
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133531
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133532
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133533
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133534
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133535
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133536
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133537
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133538
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133539
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133540
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133541
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133542
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133543
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133544
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133545
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133546
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133547
| | 2005/10/28
| | 2007/06/28 |
| | | | | | | |
| Type of | | | | Registration | | Expiration |
| Mining Rights | | Title number | | Date | | Date |
| CDC/CDM
| | 1133548
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133549
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133550
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133551
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133552
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133553
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133554
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133555
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133556
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133557
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133558
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133559
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133560
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133561
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133562
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133563
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133564
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133565
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133566
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133567
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133568
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133569
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133570
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133571
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133572
| | 2005/10/28
| | 2007/06/28 |
| | | | | | | |
| Type of | | | | Registration | | Expiration |
| Mining Rights | | Title number | | Date | | Date |
| CDC/CDM
| | 1133573
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133574
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133575
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133576
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133577
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133578
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133579
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133580
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133581
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133582
| | 2005/10/28
| | 2007/06/28 |
| CDC/CDM
| | 1133583
| | 2005/10/28
| | 2007/06/28 |
| TOTAL
| | | | 153 Mining Rights | | |
Movable and Immovable Property
Garage
Extension to Garage
Heating Equipment
Two (2) Generators
Fire Pump
Fresh Water Pump
Propane Tanks
Sceptic Installations
Shelter Compressors
Electric Sub-Station
Malt Mill
Fuel Park
Dryer Section
Mining Camp Area (including cafeteria, offices and sleeping areas)
Offices and Laboratory Area
Nursing Station
Fold-Away Garage
Warehouses for Explosive Materials
Non-Heated Warehouses
Mining Ramps
SCHEDULE “B”
DEFINITION OF NET SMELTER RETURNS
| 1. | | For the purposes of the agreement to which this Schedule “B” is attached (which agreement is
hereby incorporated by reference), “Net Smelter Returns” means the value for marketable
minerals produced from the mining claims and received by the Purchaser from a purchaser
thereof, less the following deductions; |
| | (i) | | all, costs, penalties and all other deductions incurred for
smelting, refining and marketing; |
| |
| | (ii) | | all costs of transportation of materials from the mining claims
for smelting, refining or sale; and |
| |
| | (iii) | | sales, use, severance, government royalties, and other taxes,
if any, however denominated, payable with respect to the existence, severance,
production, removal, sale or disposition of marketable minerals, but excluding
any taxes on net income. |
| | | In the event that smelting or refining are carried out in facilities owned or controlled in
whole or in part, by the Purchaser, charges, costs and penalties with respect to such
operations shall be deducted to the extent that the Purchaser would have incurred same if
such operations were carried out at facilities offering comparable services at facilities
not owned or controlled by the Purchaser. |
SCHEDULE “C”
CCAA PROCEEDINGS
| | | | | |
| Petitioners: | | Xxxxxxxx Resources Inc. |
| | | MSV Resources Inc |
| | | Xxxxxx Resources Inc. |
| | | Geonova Explorations Inc. |
| | | Xxxxxx Investments Limited |
| | | Sotula Gold Corporation |
|
| | | | |
| Mise-en-cause: | | Xxxxxxx Xxxxxx Inc. |
|
| | | | |
| Cause of action: | | Companies’ Creditors Arrangement Act (“CCAA”) |
|
| | | | |
| Amount: | | $0.00 |
|
| | | | |
| Docket number: | | 000-00-000000-000 |
|
| | | | |
| First proceeding on file: | | Motion for the Issuance of an Initial Order pursuant to the CCAA. |
|
| | | | |
| History of proceedings up
to the date hereof
| | •
| | On June 30, 2005, the Superior Court of Québec
(Commercial Division) granted an initial order (the
“Initial Order”) in favour of the Petitioners under the CCAA. |
|
| | | | |
|
| | •
| | On July 29, 2005, the Superior Court of Québec granted
an extension of the Initial Order to October 28, 2005 in
favour of the Petitioners. |
|
| | | | |
|
| | •
| | On October 25, 2005, the Superior Court of Québec
granted an extension of the Initial Order to November 25,
2005 in favour of the Petitioners. |
|
| | | | |
|
| | •
| | On November 21, 2005, Xxxxxxxx and the Seller filed a
provisional plan of arrangement (the “Provisional Plan”)
in the Court’s records. |
|
| | | | |
|
| | •
| | On November 25, 2005 the Superior Court of Québec
granted an extension of the Initial Order to February 28,
2006 in favour of the Petitioners. |
|
| | | | |
|
| | •
| | On December 6, 2005, Xxxxxxxx and the Seller presented
the Provisional Plan to their creditors at a creditors’
meeting held in Chibougamau, Québec and the Provisional
Plan was approved by the required majority of creditors on
such date. |
|
| | | | |
|
| | •
| | On December 8, 2005, the Superior Court of Québec sanctioned the Provisional Plan |
| | | | | |
| History of proceedings up
to the date hereof
(continued)
| | •
| | On or about December 21, 2005, Xxxxxxxx and the Seller
were advised that the transactions provided for in the
Provisional Plan would not proceed. |
|
| | | | |
|
| | •
| | On February 22, 2006, the Superior Court of Québec granted an extension of the Initial
Order to May 31, 2006 in favour of the Petitioners. |
| |
|
| | •
| | On February 22, 2006, the
Superior Court of Québec granted Petitioners’ Motion for
leave to sell an asset. |
|
| | | | |
|
| | •
| | On May 23, 2006, the
Superior Court of Québec granted an extension of the Initial Order to August 31, 2006 in favour of the Petitioners. |
|
| | | | |
|
| | •
| | On June 8, 2006, Xxxxxxxx,
the Seller and Xxxxxx Resources Inc. (“Xxxxxx”) each files
plans of arrangement in the Court’s records (the “Plans”). |
|
| | | | |
|
| | •
| | On June 26, 2006, Xxxxxxxx,
the Seller and Xxxxxx presented the Plans to their creditors
at a creditors’ meeting held in Chibougamau, Québec and such
Plans were approved by the required majority of creditors
on such date; |
|
| | | | |
|
| | •
| | On June 27, 2006, the
Superior Court of Québec sanctioned the Plans and granted an
extension of the Initial Order to October 31, 2006 in favour
of the Petitioners. |
|
| | | | |
|
| | •
| | On October 30, 2006, the
Superior Court of Québec granted an extension of the Initial
Order to February 28, 2007 in favour of the Petitioners. |
SCHEDULE
“D”
ENCUMBRANCES
MSV RESOURCES INC. / RESSOURCES MSV INC.
| | | | | | | | | |
| Nature of right | | Holder / | | | | Amount / | | |
| Date and Registration Number | | Lessor / Seller | | Property | | Interest rate | | Expiry Date |
| 1. Conventional hypothec without delivery
| | Banque Royale du
Canada
| | The hypothec charges the specific property described hereinunder: the
following claims / account receivables
| | $23,000.00
| | October 4, 2011 |
| October 18, 2001 at 1:45 p.m.
00-0000000-0000
Date of Constituting Act:
| | | | / contracts / bank deposits: certificate guaranteed by Banque Royale du Canada of $20,000.00 due on
October 26, 2001, #00740058626-0001 as well as any renewals, substitutions
and additions thereto, as well as any property received or issued with
respect to any transformation thereto. The hypothec also charges the
following present and future property with respect to the property
described hereinabove: the proceeds and claims resulting of the
disposition or lease of the said property; the fruits and revenues
therefrom, including insurance our expropriation indemnities therefrom;
the rights, titles and documents, of whatsoever form or nature, relating
thereto; the property in replacement, substitution, addition or
transformation of the said property, including
money.1
| | Interest rate:
Royal Bank’s
prime rate plus
5.00% | | |
| October 4, 2001
| | | | | | | | |
|
| | | | (T) | | | | |
| | |
| 1 | | T: translation: The description appearing on the
printout has been translated. |
| |
| | | S: summary: The description
appearing on the printout has been summarized. We could provide
you with a printout with the complete description if require. |
| |
| | | V:
verbatum: The description appearing on the printout has been
recopied “as is”. |
| | | | | | | | | | | | | |
| Nature of right | | Holder / | | | | Amount / | | |
| Date and Registration Number | | Lessor / Seller | | Property | | Interest rate | | Expiry Date |
| 2.
| | Change of name of Ressources
MSV Inc. and Corporation
Copper Rand Inc. to Ressources
MSV Inc.
and MSV Resources Inc.
registered on November 21,
2005 at 1:59 p.m. under
number 00-0000000-0000. |
| | | | | | | | | | | |
| Nature of right | | Holder / | | | | Amount / | | |
| Date and Registration Number | | Lessor / Seller | | Property | | Interest rate | | Expiry Date |
| 3.
| | Conventional hypothec without delivery
June 3, 2002 at 9:00 a.m.
00-0000000-0000
Date of Constituting Act: x
Xxx 00, 0000
| | Xxxxxxxxxxxxxx Xxxxxx
| | All of the Grantor’s present and future movable
property, corporeal and incorporeal, wherever
situated, including without limitation the following
present and future property: stocks, claims,
deposits, equipment, tools, office furniture,
intellectual property rights (...).
(S-T)
| | $27,500,000.00
Interest rate:
25% per annum
| | May 31, 2012 |
| |
| 4.
| | Change of name of 9090-6397 Québec
Inc. to Corporation Copper Rand Inc.
registered on November 21, 2005
at 1:59 p.m. under number 00-0000000-0000. |
SCHEDULE “E”
LICENSES, PERMITS, ETC.
Certificates of authorization issued by
Quebec environmental authorities:
| | | | | | | |
| Reference Number | | Project | | Issue Date | | Comments |
| 3214-14-21
| | Eastmain Mining Operations
| | 08-04-1993
| | Name of registered
holder needs to be
changed |
|
| | | | | | |
| 7610-10-01-70019-20
| | Eastmain
Underground Exploration
Work
| | 04-16-1987
| | Authorisation
pursuant to Section
24 of the
Environment Quality
Act needs to be
obtained for
transfer |
|
| | | | | | |
| 7610-10-01-70019-23
| | Eastmain Mining
Deposit Operations
| | 01-17-1995
| | Authorisation
pursuant to Section
24 of the
Environment Quality
Act needs to be
obtained for
transfer |
|
| | | | | | |
| 7610-10-01-70019-25
| | Extraction from Sand
Pit, Sand Bank #2
| | 03-21-1995
| | Authorisation
pursuant to Section
24 of the
Environment Quality
Act needs to be
obtained for
transfer |
Permits
Permit # 451709-4 for the use of High Risk Fuel Equipment issued on June 20, 2006 and expiring on
March 31, 2008.
| | | | | |
|
| | NOTE:
| | This Permit has the inscription “Temporary Closure” stamped across it and
may not be transferred to the Purchaser. |
SCHEDULE “F”
PRIOR ROYALTIES
| 1. | | GoldCorp Inc. (formerly Placer Dome Inc.) holds a 2% net smelter return royalty on the
Mining Rights mentioned in Schedule “A” hereof with the exception of the following: |
| | | |
| Type of Mining Rights | | Title number |
| BM/ML
| | 817 |
| CDC/CDM
| | 1133485 |
| CDC/CDM
| | 1133486 |
| CDC/CDM
| | 1133487 |
| CDC/CDM
| | 1133488 |
| CDC/CDM
| | 1133489 |
| CDC/CDM
| | 1133490 |
| CDC/CDM
| | 1133504 |
| CDC/CDM
| | 1133505 |
| CDC/CDM
| | 1133506 |
| CDC/CDM
| | 1133507 |
| CDC/CDM
| | 1133508 |
| CDC/CDM
| | 1133509 |
| CDC/CDM
| | 1133521 |
| CDC/CDM
| | 1133522 |
| CDC/CDM
| | 1133523 |
| CDC/CDM
| | 1133524 |
| CDC/CDM
| | 1133525 |
| CDC/CDM
| | 1133526 |
| CDC/CDM
| | 1133537 |
| | | |
| Type of Mining Rights | | Title number |
| CDC/CDM
| | 1133538 |
| CDC/CDM
| | 1133539 |
| CDC/CDM
| | 1133540 |
| | | pursuant to a purchase and sale agreement dated December 30, 1988 entered into by and
between Placer Dome Inc., the Seller and Northgate Exploration Limited. |
NOTE: This Royalty shall be reduce the amount paid in respect of the NSR Royalty as
provided in Section 5.
| 2. | | Xxxxxx Resources Inc. holds a 2% net operating profit interest in the Mining Rights
mentioned in Schedule “A” hereof pursuant to a joint venture agreement dated February 6, 1991
entered into by and between the Seller and Xxxxxx Lake Resources Inc. (predecessor of Xxxxxx
Resources Inc.) |
| |
| | | NOTE: This royalty shall be terminated as of the Closing Date. |
SCHEDULE “G”
DISCLOSURE SCHEDULE
| 1. | | Infraction Notices |
| |
| | | March 15, 1995: Infraction Notice from the Ministère de l’Environnement du Québec under
section 123.1 of the Environment Quality Act (LRQ, chap. Q-2) to Seller pertaining to water
quality for the months of October 1994 to January 1995; |
| |
| | | June 22, 1995: Infraction Notice from the Ministère de l’Environnement du Québec under
section 123.1 of the Environment Quality Act (LRQ, chap. Q-2) to Seller pertaining to water
quality for the month of January, February and March 1995; |
| |
| | | August 30, 1995: Infraction Notice from the Ministère de l’Environnement du Québec under
section 123.1 of the Environment Quality Act (LRQ, chap. Q-2) to Seller pertaining to the
operation of sand pits below permitted water table and under Section 17 of Hazardous Waste
Regulation (RQ, chap. Q-2, r. 3.01) pertaining to the non-compliance for management of
hazardous waste; |
| |
| | | September 18, 1995: Infraction Notice from the Ministère de l’Environnement du Québec under
section 123.1 of the Environment Quality Act (LRQ, chap. Q-2) to Seller pertaining to the
ph levels of water contained in samples dated June 7, June 28 and July 5, 1995 extracted by
a duly authorized employee of the Ministère de l’Environnement du Québec; |
| |
| | | December 5, 1995: Infraction Notice from the Ministère de l’Environnement du Québec under
section 123.1 of the Environment Quality Act (LRQ, chap. Q-2) to Seller pertaining to water
quality and ph levels in water contained in samples dated September 12 and 21, 1995
extracted by a duly authorized employee of the Ministère de l’Environnement du Québec; |
| |
| | | February 5, 1996: Infraction Notice from the Ministère de l’Environnement du Québec under
section 123.1 of the Environment Quality Act (LRQ, chap. Q-2) to Seller pertaining to water
quality, ph levels in water contained in samples dated October and November 1995 extracted
by a duly authorized employee of the Ministère de l’Environnement du Québec and
non-compliance regarding sampling frequencies as set out the applicable Certificate of
Authorization. |
| 2. | | Actions, Suits or Complaints |
| |
| | | Motion with respect to an injunction by Cree Nation of Mistissini, Grand Council of the
Crees of Quebec, Cree Regional Authority, Xxxxxxx Xxxx Come, Xxxxxxx Mianscum, Xxxxxxx
Xxxxxxx and Xxxx Xxxxxxx against Provincial Administrator under Section 22 of the Xxxxx Bay
and Northern Quebec Agreement, Minister of Environment and Wildlife of Quebec , Deputy
Minister Environment and Wildlife, Ressources Minières Radisson Inc. and Seller, in Superior
Court, district of Montreal, case number 000-00-000000-000. The last proceeding filed was an
out of court partial settlement with respect to Ressources Minières Radisson Inc., on July
7, 1997. |
| |
| 3. | | Other Disclosure |
| |
| | | The Ministère du Développement durable, de l’Environnement et des Parcs (“MDDEP”) has
informed the Seller that a deposit payable to the MDDEP in the amount of $5,000.00 shall be
required in order to transfer the Certificate of Authorization # 7610-10-01-70019-25. |
| |
| | | The Ministère des Ressources naturelles et de la Faune (“MRNF”) has informed the Seller in a
letter dated June 20, 2006 that the high risk fuel equipment contained on the Eastmain
Property has certain anomalies which must be addressed and confirmation from the MRNF is
required before such equipment is reused in the operations of the Eastmain Property. The
MRNF issued Permit #451709-4 permitting the use of the high risk fuel equipment despite the
anomalies on such equipment with the mention “Temporary Closure” stamped across it. A
verification certificate was delivered to the Seller on June 16, 2006 stating the current
state of high risk fuel equipment was in compliance with the applicable regulations with
regards the non-use of such equipment. |
| |
| | | The MDDEP also requested a written undertaking by the Purchaser to organize during summer
2007 a visit of the site with representatives of the MDDEP and of the MRNF. |
SCHEDULE “H”
ENVIRONMENTAL REPORTS
| 1. | | Memorandum dated June 12, 2006 to Xxxxxxx Xxxxxxx from Meno Speyer constituting a draft
report by MRS & Associates |
| |
| 2. | | Letter dated July 3, 2006 to Xx. Xxxxx Xxxxxxx/Eastmain Resources from MRS &
Associates. |
SCHEDULE “I”
PARTICULARS OF DILIGENCE
| 1. | | The documents enclosed with the letter dated February 5, 2007 to Xxxxx Xxxxxxxx/Xxxxxx de
Xxxxx from Xxxxxxx Xxxxxxxxx/Xxxxxxxxxx Xxxxxxxx concerning title searches and corporate
searches. |
| 2. | | The documents enclosed with the letter dated February 16, 2007 to Xxxxx Xxxxxxxx/Xxxxxx de
Xxxxx from Xxxxxxx Xxxxxxxxx/Xxxxxxxxxx Xxxxxxxx concerning la Commission de la santé et
sécurité au travail, Environnement Canada, ministère des Ressources naturelles et de la Faune
and ministère du Développement durable, de l’Environnement et des Parcs. |
G&C
Client — 1307628 v4 Xxxxxxxx
Purchase and Sale Agreement Feb 21
slip sheets
2/21/07 06:24 PM
