EXHIBIT 10.9
SHARE PURCHASE AND SALE AGREEMENT
MADE
OCTOBER 21, 1998
AMONG
CORNUCOPIA RESOURCES INC.
AND
CORNUCOPIA RESOURCES LTD.
AND
VISTA GOLD HOLDINGS INC.
AND
VISTA GOLD CORP.
IN RESPECT OF THE SHARES OF
MINERAL RIDGE RESOURCES INC.
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TABLE OF CONTENTS
PART 1 - DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . 28
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
1.2 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . 32
PART 2 - PURCHASE AND SALE. . . . . . . . . . . . . . . . . . . . . . . . . 33
2.1 Purchase and Sale of Purchased Shares . . . . . . . . . . . . . . 33
PART 3 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . 33
3.1 Representations and Warranties of the Vendor and CRL. . . . . . . 33
(1) Corporate Status and Authority . . . . . . . . . . . . . . . 34
(2) No Default . . . . . . . . . . . . . . . . . . . . . . . . . 35
(3) Share Capital. . . . . . . . . . . . . . . . . . . . . . . . 35
(4) Financial Matters. . . . . . . . . . . . . . . . . . . . . . 36
(5) Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . 36
(6) Material Changes . . . . . . . . . . . . . . . . . . . . . . 37
(7) Banking. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
(8) Material Contracts . . . . . . . . . . . . . . . . . . . . . 38
(9) Assets and Property. . . . . . . . . . . . . . . . . . . . . 38
(10) Hazardous Materials and Environmental Laws . . . . . . . . . 39
(11) Legal and Regulatory Matters . . . . . . . . . . . . . . . . 40
(12) Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . 41
(13) Employment Matters . . . . . . . . . . . . . . . . . . . . . 41
(14) Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 43
(15) Binding Agreement. . . . . . . . . . . . . . . . . . . . . . 43
(16) Ownership of Purchased Shares. . . . . . . . . . . . . . . . 43
(17) Residency. . . . . . . . . . . . . . . . . . . . . . . . . . 43
(18) No Commission. . . . . . . . . . . . . . . . . . . . . . . . 43
(19) Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . 43
(20) Representations and Warranties of Mineral Ridge in
Restated and Amended Loan Agreement. . . . . . . . . . . . . 44
(21) Securities Laws. . . . . . . . . . . . . . . . . . . . . . . 44
3.2 Representations and Warranties of the Purchaser and VGC . . . . . 47
(1) Corporate Status and Authority . . . . . . . . . . . . . . . 48
(2) No Default . . . . . . . . . . . . . . . . . . . . . . . . . 48
(3) Binding Agreement. . . . . . . . . . . . . . . . . . . . . . 48
(4) Share Capital. . . . . . . . . . . . . . . . . . . . . . . . 48
(5) Disclosure Documents . . . . . . . . . . . . . . . . . . . . 49
(6) No Encumbrances on VGC Shares. . . . . . . . . . . . . . . . 49
(7) Listing of VGC Shares. . . . . . . . . . . . . . . . . . . . 49
(8) Reporting Issuer Status. . . . . . . . . . . . . . . . . . . 49
(9) No Commission. . . . . . . . . . . . . . . . . . . . . . . . 00
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XXXX 0 - XXXXXXXXX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.1 Covenants of the Vendor and CRL . . . . . . . . . . . . . . . . . 50
(1) Agreement Date to Closing. . . . . . . . . . . . . . . . . . 50
(2) At Closing . . . . . . . . . . . . . . . . . . . . . . . . . 52
4.2 Covenants of the Purchaser and VGC. . . . . . . . . . . . . . . . 53
(1) General. . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(2) At Closing . . . . . . . . . . . . . . . . . . . . . . . . . 53
PART 5 - CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . 54
5.1 Mutual Conditions Precedent . . . . . . . . . . . . . . . . . . . 54
5.2 Conditions for the Benefit of the Vendor and CRL. . . . . . . . . 55
5.3 Conditions for the Benefit of the Purchaser and VGC . . . . . . . 57
PART 6 - SURVIVAL OF REPRESENTATIONS AND INDEMNITY. . . . . . . . . . . . . 60
6.1 Survival of Representations, Warranties and Covenants . . . . . . 60
6.2 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
PART 7 - GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.1 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . 61
7.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.3 Confidentiality and Disclosure. . . . . . . . . . . . . . . . . . 62
7.4 Dispute Resolution and Arbitration. . . . . . . . . . . . . . . . 63
7.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.6 Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.7 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.8 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.9 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . 63
7.10 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
7.12 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 64
7.11 Counterparts and Facsimile. . . . . . . . . . . . . . . . . . . . 65
SCHEDULE "A" - FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . A-1
SCHEDULE "B" - LOANS AND CREDIT FACILITIES . . . . . . . . . . . . . . . . B-1
SCHEDULE "C" - BANK FACILITIES . . . . . . . . . . . . . . . . . . . . . . C-1
SCHEDULE "D" - MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . D-1
SCHEDULE "E" - MATERIAL CONTRACTS IN BREACH OR DEFAULT . . . . . . . . . . E-1
SCHEDULE "F" - MINERAL RIGHTS AND LANDS. . . . . . . . . . . . . . . . . . F-1
SCHEDULE "G" - ROYALTY INTERESTS . . . . . . . . . . . . . . . . . . . . . G-1
SCHEDULE "H" - EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . . . . H-1
SCHEDULE "I" - LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . I-1
SCHEDULE "J" - EMPLOYMENT CONTRACTS. . . . . . . . . . . . . . . . . . . . J-1
SCHEDULE "K" - INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . K-1
SCHEDULE "L" - PERMITTED ENCUMBRANCES. . . . . . . . . . . . . . . . . . . L-1
SCHEDULE "M" - APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . M-1
SCHEDULE "N" - VGC SUBSCRIPTION AGREEMENT. . . . . . . . . . . . . . . . . N-1
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SHARE PURCHASE AND SALE AGREEMENT
THIS AGREEMENT made the 21st day of October, 1998
AMONG:
CORNUCOPIA RESOURCES INC., a company incorporated under the
laws of the State of Nevada and having an office at Suite
540, Marine Building, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxx
(the "VENDOR")
AND:
CORNUCOPIA RESOURCES LTD., a company amalgamated under the
laws of the British Columbia and having an office at Suite
540, Marine Building, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, Xxxxxx
("CRL")
AND:
VISTA GOLD HOLDINGS INC., a company incorporated under the
laws of the State of Nevada and having an office at Suite
3000, 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, X.X.X.
(the "PURCHASER")
AND:
VISTA GOLD CORP., a company continued under the laws of the
Yukon Territory and having an xxxxxx xx Xxxxx 0000, 000
Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, X.X.X.
("VGC")
WHEREAS:
A. the Vendor is the legal and beneficial holder of all of the issued and
outstanding shares in the capital of Mineral Ridge;
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B. the Purchaser has agreed to purchase and the Vendor has agreed to sell
all of the issued and outstanding shares in the capital of Mineral Ridge on the
terms, at the time and subject to the conditions set forth herein;
C. the Vendor is a wholly-owned subsidiary of CRL and the Purchaser is a
wholly-owned subsidiary of VGC;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and
mutual covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby covenant and agree as follows:
PART 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement and the recitals hereto, unless the context
otherwise requires, the following terms shall have the following respective
meanings:
(a) "ACCREDITED INVESTOR" means an "accredited investor" as that term is
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
U.S. Securities Act;
(b) "ASSETS" means all of the rights, properties, undertakings and assets
of Mineral Ridge, whether or not used in connection with or relating
to the Business, whether real or personal, tangible or intangible, and
whether owned, leased or licensed, including, without limitation, all
Mineral Rights, Lands and Equipment;
(c) "BUSINESS" means all the business carried on by Mineral Ridge as of
the date of this Agreement, including, without limitation, mineral
exploration and mining;
(d) "BUSINESS DAY" means any day, other than Saturday, Sunday or a
statutory holiday in the Province of British Columbia;
(e) "CLAIM" means any claim, demand, action, cause of action, damage,
loss, cost, liability or expense, including, without limitation,
reasonable professional fees and all costs incurred in investigating
or pursuing any of the foregoing or any proceeding relating to any of
the foregoing;
(f) "CLOSING" means the closing of the purchase and sale of the Purchased
Shares contemplated herein;
(g) "CLOSING DATE" means October 21, 1998 or such other date as the
parties hereto may agree;
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(h) "CONSTATING DOCUMENTS" means the memorandum, articles, articles of
incorporation, articles of continuance or articles of amalgamation
pursuant to which a corporation is incorporated, continued or
amalgamated, as the case may be, together with any amendments thereto,
and the by-laws of such corporation and any shareholders' agreement
which has been executed by such corporation or which governs in whole
or in part such corporation's affairs;
(i) "CRL SHARES" means the 2,777,777 common shares in the capital of CRL
to be issued to VGC pursuant to the VGC Subscription Agreement;
(j) "DRESDNER" means Dresdner Bank AG, New York and Grand Cayman Branches;
(k) "DRESDNER LOAN AGREEMENT" means the loan agreement dated January 17,
1997 between Mineral Ridge and Dresdner;
(l) "ENCUMBRANCE" means any mortgage, charge, pledge, hypothec, security
interest, lien, easement, right-of-way, encroachment, covenant,
condition, right of re-entry, lease, license, assignment, option,
claim, encumbrance, set-off, escrow, hold period, voting agreement,
voting trust or other limitation, restriction or title defect of
whatever kind or nature, regardless of form, whether or not registered
or registrable and whether or not consensual or arising by law or
pursuant to the by-laws, rules or policies of any stock exchange, and
whether known or unknown at the time of Closing;
(m) "ENVIRONMENTAL CONTAMINATION" means the discharge, emission, leaking,
spilling, leaching, release or discharge into the environment,
including, without limitation, land, air and water, of Hazardous
Materials or other material, so as to result in any harm, damage or
hazard to the environment or to any person, property or thing;
(n) "ENVIRONMENTAL LAWS" means all Laws or lawful requirements of any
Governmental Authority with respect to environmental and health
protection or regulating Hazardous Materials;
(o) "EQUIPMENT" means all supplies and all machinery, equipment,
automobiles, trucks, bulldozers, shovels, trailers, tractors, office
equipment, computer hardware and software, yard equipment, furniture,
furnishings and tools of all kinds owned or leased by Mineral Ridge,
the Vendor and CRL and used or intended for use in connection with the
Business;
(p) "FINANCIAL STATEMENTS" means the unaudited financial statements of
Mineral Ridge as at July 31, 1998 attached hereto as Schedule "A"
hereto;
(q) "GOVERNMENTAL AUTHORITY" means any federal, provincial, state,
municipal, county or regional governmental or quasi-governmental
authority, domestic or foreign, and includes any ministry, department,
commission, bureau, board,
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administrative or other agency, regulatory body or instrumentality
thereof, including, without limitation, any securities commission,
stock exchange or other securities regulatory authority, whether a
self-regulating body or otherwise;
(r) "GOVERNMENTAL AUTHORIZATIONS" means all authorizations, approvals,
licenses, permits or quotas issued to Mineral Ridge primarily in
connection with the Business or any of the Assets by any Governmental
Authorities;
(s) "HAZARDOUS MATERIALS" means any asbestos materials, urea formaldehyde,
explosives, radioactive materials, pollutants, contaminants, hazardous
substances, corrosive substances, toxic substances, special wastes or
wastes of any kind, including, without limitation, compounds known as
chlorobiphenyls and any substance the storage, manufacture, disposal,
treatment, generation, use, transport, remediation or release of which
into the environment is prohibited, controlled or licensed under
Environmental Laws;
(t) "INVENTORIES" means all inventories of every kind and nature and
wheresoever situate owned by Mineral Ridge and in any way pertaining
to the Business, including, without limitation, all inventories of
processed ore, raw materials, work-in-progress, finished goods, spare
parts, operating supplies and packaging materials of or in any way
pertaining to the Business;
(u) "LANDS" means the surface interest in lands and premises associated
with the Mineral Rights and all plant, improvements, appurtenances and
fixtures situated thereon or forming part thereof, including without
limitation, all buildings situated thereon and all reserves of
minerals IN SITU within, under or upon such lands and premises;
(v) "LAWS" means all applicable laws (including the common law), by-laws,
rules, rulings, regulations, orders, ordinances, notices, injunctions,
directions, decrees, treaties, statutes and judgments or other
requirements of any Governmental Authority, all as in force at the
date of this Agreement;
(w) "LIABILITIES" means any and all debts, liabilities, obligations,
claims or demands of whatsoever nature or kind and whether accrued,
contingent, absolute, conditional or otherwise and whether or not
determined or determinable;
(x) "MATERIAL CONTRACT" means any agreement, whether written or oral,
which is material to the Business and for the purposes of this
Agreement, a contract shall be a Material Contract if:
(i) performance of any right or obligation by any party to such
contract (other than a contract with a customer in the ordinary
course of business) may occur over a period of time greater
than one year;
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(ii) an expenditure, receipt or transfer or other disposition of
property with a value of greater than $10,000 may arise under
such contract; or
(iii) such contract has been entered into other than in the ordinary
course of business;
(y) "MINERAL RIDGE" means Mineral Ridge Resources Inc., a company
incorporated under the laws of the State of Nevada;
(z) "MINERAL RIGHTS" means all water, water xxxxx, water rights,
concessions, leases, mineral interests, easements, reserves or any
other mineral interests, including, without limitation, patented and
unpatented claims and options to lease held by Mineral Ridge;
(aa) "MISREPRESENTATION" means:
(i) an untrue statement of a material fact; or
(ii) an omission to state a material fact that is required to be
stated, or necessary to prevent a statement that is made from
being false or misleading in the circumstances in which it was
made;
(bb) "PERMITTED ENCUMBRANCES" means (i) Encumbrances for taxes, assessments
or governmental charges or levies on property not yet due or
delinquent, (ii) easements, encroachments and other minor
imperfections of title which do not, individually or in the aggregate,
materially detract from the value or impair the use or marketability
of the Mineral Rights or any real property, (iii) Encumbrances granted
by VGC or the Purchaser, and (iv) Encumbrances described in
Schedule "L" hereto;
(cc) "PERSON" means an individual, sole proprietorship, partnership,
unincorporated association, unincorporated syndicate, unincorporated
organization, trust, body corporate, a trustee, executor,
administrator or other legal representative, and any Governmental
Authority;
(dd) "PURCHASED SHARES" means the 25,000 issued and outstanding common
shares in the capital of Mineral Ridge being sold by the Vendor and
purchased by the Purchaser under this Agreement;
(ee) "SECURITIES LAWS" means the applicable securities laws of the Province
of British Columbia and the respective regulations made and forms
prescribed thereunder, together with all applicable published policy
statements and blanket orders and rulings of the British Columbia
Securities Commission;
(ff) "STOCK EXCHANGES" means The Toronto Stock Exchange and the American
Stock Exchange;
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(gg) "TAXES" include, without limitation, all taxes, duties, fees,
premiums, assessments, imposts, levies and other charges of any kind
whatsoever imposed by any Governmental Authority, together with all
interest, penalties, fines, additions or taxes or other additional
amounts imposed in respect thereof (including, without limitation,
those levied on, or measured by, or referred to as income, gross
receipts, profits, capital, transfer, land transfer, sales, goods and
services, use, value-added, excise, stamp, withholding, business,
franchising, property, payroll, employment, health, social service,
education and social security taxes, all surtaxes, all customs duties
and import and export taxes, all licence, franchise and registration
fees, and all unemployment insurance, health insurance and Canada and
other government pension plan premium);
(hh) "U.S. EXCHANGE ACT" means the SECURITIES EXCHANGE ACT OF 1934, as
amended, of the United States of America;
(ii) "U.S. PERSON" means a U.S. person as that term is defined in
Regulation S under the U.S. Securities Act;
(jj) "U.S. SECURITIES ACT" means the SECURITIES ACT OF 1933, as amended, of
the United States of America;
(kk) "U.S. SECURITIES LAWS" means the U.S. Securities Act, the U.S.
Exchange Act, the securities laws of each applicable state of the
United States and the regulations promulgated under each such act or
law;
(ll) "VGC SHARES" means the 1,562,500 common shares in the capital of VGC
to be issued to CRL at the Closing as consideration for the Purchased
Shares; and
(mm) "VGC SUBSCRIPTION AGREEMENT" means the agreement substantially in the
form of Schedule "N" hereto.
1.2 INTERPRETATION
For the purposes of this Agreement, except as otherwise expressly
provided:
(a) "THIS AGREEMENT" means this Agreement, including the recitals hereto,
and not any particular Part, Section, Subsection or other subdivision
or recital hereof, and includes any agreement, document or instrument
entered into, made or delivered pursuant to the terms hereof, as the
same may, from time to time, be supplemented or amended and in effect;
(b) the words "HEREOF", "HEREIN", "HERETO" and "HEREUNDER" and other words
of similar import refer to this Agreement as a whole and not to any
particular Part, Section, Subsection, or other subdivision or recital
hereof;
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(c) the division of this Agreement into Parts, Sections, Subsections, and
other subdivisions or recitals, and the insertion of headings are for
convenience of reference only and are not intended to interpret,
define or limit the scope, extent or intent of this Agreement or any
provision hereof;
(d) all references to currency in this Agreement are to lawful money of
the United States of America and all amounts to be calculated or paid
pursuant to this Agreement are to be calculated in lawful money of the
United States of America;
(e) a reference to a statute in this Agreement includes all regulations or
rules made thereunder, all amendments to the statute, regulations or
rules in force as at the date of this Agreement, and any statutes,
regulations or rules that supplement or supersede such statutes,
regulations or rules;
(f) the singular of any term includes the plural, and vice versa, and the
use of any term is generally applicable to any gender and, where
applicable, a body corporate, firm or other entity, and the word "OR"
is not exclusive and the word "INCLUDING" is not limiting, whether or
not non-limiting language (such as "WITHOUT LIMITATION" or "BUT NOT
LIMITED TO" or words of similar import) is used with reference
thereto;
(g) in the event that any date on which any action is required to be taken
hereunder by any of the parties hereto is not a Business Day, such
action shall be required to be taken on the next succeeding day which
is a Business Day; and
(h) all references to "APPROVAL", "AUTHORIZATION" or "CONSENT" in this
Agreement means written approval, authorization or consent.
PART 2
PURCHASE AND SALE
2.1 PURCHASE AND SALE OF PURCHASED SHARES
Subject to the terms and conditions contained in this Agreement,
the Vendor hereby agrees to sell, assign and transfer to the Purchaser and
the Purchaser hereby agrees to purchase from the Vendor at the Closing all of
the Purchased Shares, free and clear of all Encumbrances, except any
Permitted Encumbrances for a purchase price of $250,000 (CDN$380,700) payable
by the issuance of the VGC Shares to CRL at the Closing.
PART 3
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF THE VENDOR AND CRL
The Vendor and CRL each represent and warrant to and in favour of
the Purchaser and VGC as follows, and acknowledge that, notwithstanding any
due diligence and
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investigations the Purchaser and VGC may have undertaken prior to the
Closing, the Purchaser and VGC are relying fully upon such representations
and warranties as an inducement to enter into this Agreement and to
consummate the transactions contemplated hereby:
(1) CORPORATE STATUS AND AUTHORITY
(a) CORPORATE STATUS OF THE VENDOR. The Vendor is duly incorporated and
validly exists under the laws of the State of Nevada and is in good
standing under applicable corporate statutes of the State of Nevada.
(b) CORPORATE STATUS OF THE CRL. CRL is duly incorporated and validly
exists under the laws of the Province of British Columbia and is in
good standing under the COMPANY ACT (British Columbia).
(c) CORPORATE STATUS OF MINERAL RIDGE. Mineral Ridge is duly incorporated
and validly exists under the laws of the State of Nevada and is in
good standing under applicable corporate statutes of the State of
Nevada.
(d) CORPORATE POWER AND AUTHORITY OF THE VENDOR TO ENTER INTO AND PERFORM
AGREEMENT. The Vendor has the corporate power and authority to own
and hold the Purchased Shares, to enter into this Agreement, to
consummate all transactions contemplated herein, to perform its
obligations hereunder, and to transfer legal title to and to transfer
beneficial ownership of the Purchased Shares to the Purchaser on the
terms and conditions hereof, free and clear of Encumbrances, except
Permitted Encumbrances.
(e) CORPORATE POWER AND AUTHORITY OF CRL TO ENTER INTO AND PERFORM
AGREEMENT. CRL has the corporate power and authority to enter into
this Agreement, to consummate all transactions contemplated herein and
to perform its obligations hereunder.
(f) NO BANKRUPTCY PROCEEDINGS. No proceedings have been taken or
authorized by the Vendor, CRL or Mineral Ridge or, to the best of the
knowledge of the Vendor or CRL, by any other person, with respect to
the bankruptcy, insolvency, liquidation, dissolution, or winding-up of
the Vendor, CRL or Mineral Ridge.
(g) POWER AND AUTHORITY OF MINERAL RIDGE. Mineral Ridge has all requisite
power and authority to own and lease its Assets and carry on its
Business.
(h) SUBSIDIARIES. Mineral Ridge has no subsidiaries or investments in
other corporate entities.
(i) CORPORATE RECORDS. The corporate records of the Vendor and Mineral
Ridge, as required to be maintained by the Vendor and Mineral Ridge
under the applicable corporate statutes of the State of Nevada,
including, without limitation, the Constating Documents of the Vendor
and Mineral Ridge, are accurate, complete
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and up-to-date in all material respects and all material
transactions of Mineral Ridge have been promptly and properly
recorded in its books or filed with its records.
(2) NO DEFAULT
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, or the fulfilment of or compliance with the
terms and provisions hereof do not and will not, and do not create a state of
facts which after notice or lapse of time or both will:
(a) result in the breach of or violate any term or provision of the
Constating Documents of either Mineral Ridge or the Vendor;
(b) conflict with, result in the breach of, constitute a default under, or
accelerate or permit the acceleration of the obligations of the Vendor
or CRL under, any Material Contract, except the guarantee dated
January 17, 1997 between the Vendor and Dresdner, the pledge agreement
dated January 17, 1997 between the Vendor and Dresdner, the guarantee
dated January 17, 1997 between CRL and Dresdner and the pledge
agreement dated January 17, 1997 between CRL and Dresdner;
(c) result in the cancellation, suspension or alteration in the terms of
any Government Authorization;
(d) result in the creation of any Encumbrance upon any of the Assets;
(e) require the consent of any person pursuant to any Material Contract,
except Dresdner;
(f) give any person other than the parties hereto any material interest or
right, including, without limitation, rights of purchase, termination,
cancellation or acceleration under any Material Contract or Government
Authorization;
(g) subject to compliance with disclosure requirements under applicable
securities legislation and the rules, by-laws and policies of any
stock exchange having jurisdiction, conflict with, breach, or violate
any of the terms, conditions or provisions of any Law, or any
judgment, order, injunction, decree, regulation or ruling of any court
or stock exchange having jurisdiction; or
(h) result in the imposition of any Taxes on Mineral Ridge or the Assets.
(3) SHARE CAPITAL
(a) SHARE CAPITAL. The authorized share capital of Mineral Ridge consists
of 25,000 common shares with a par value of $1.00 per share, of which
25,000 common shares have been duly and validly allotted and issued
and are outstanding as fully-
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paid and non-assessable shares as at the date hereof. No other
shares in the capital of Mineral Ridge are issued and outstanding
as at the date hereof.
(b) SHAREHOLDERS. The Vendor is the sole legal and beneficial shareholder
of Mineral Ridge.
(c) NO OPTIONS. Except pursuant to this Agreement, no person has any
option, warrant, right, call, commitment, conversion right, right of
exchange or other agreement, present or future, contingent or
absolute, or any right or privilege (whether by law, pre-emptive or
contractual) capable of becoming an option, warrant, right, call,
commitment, conversion right, right of exchange or other agreement for
the purchase, subscription, allotment or issuance of any of the
unissued common shares, financial instruments convertible into common
shares or other securities of Mineral Ridge.
(4) FINANCIAL MATTERS
(a) FINANCIAL STATEMENTS. The Financial Statements have been prepared in
accordance with generally accepted accounting principles in Canada and
present fairly and accurately in every material respect the assets,
liabilities (whether accrued, absolute, contingent or otherwise) and
financial condition of Mineral Ridge as of the date of such
statements, and the results of the operations of Mineral Ridge during
the periods covered by such statements.
(b) LIABILITIES. Except as disclosed in the Financial Statements, Mineral
Ridge had no material Liabilities as of the date of the Financial
Statements, other than:
(i) certain of the amounts claimed by X.X. Xxxxxxxx & Sons and
Xxxxxxx & Xxxxxxxx Company under a lien filed in the office of
the County Recorder of Xxxxxxxxx County, Nevada and disclosed
in Schedule "I" hereto;
(ii) certain additional interest and fees claimed by Dresdner under
the terms of the Dresdner Loan Agreement; and
(iii) certain additional funds requested by Van American Insurance
Company in respect of the reclamation obligations of Mineral
Ridge.
(5) INVENTORY
Gold inventory is recorded at estimated net realizable value. Gold
ounces contained and recoverable in the xxxxx pad, or stockpile and in the
processing plant are valued using the average cost method and carried at the
lower of cost and net realizable value. All other Inventories are merchantable
or usable in the ordinary course of business. No items included in the
Inventories are held by Mineral Ridge on consignment from others or have been
pledged as collateral.
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(6) MATERIAL CHANGES
Except as contemplated by this Agreement or disclosed in Schedule "E",
Mineral Ridge has not, since the date of the Financial Statements:
(a) experienced any adverse material change in the business, operations,
assets, liabilities, ownership, capital or financial position or
condition of Mineral Ridge, or any change in a material fact that has
a significant adverse effect on, or would reasonably be expected to
have a significant adverse effect on, the business, operations,
assets, liabilities, ownership, capital or financial position or
condition of Mineral Ridge, including, without limitation, the
Business, the Assets and the Liabilities;
(b) transferred, assigned, sold or otherwise disposed of any part of the
Business or any of the Assets, except in the normal course of
business;
(c) incurred or assumed any material Liability, except unsecured current
obligations and liabilities incurred in the ordinary and usual course
of business;
(d) discharged or satisfied any Encumbrance, or paid any obligation or
Liability, other than Liabilities disclosed in the Financial
Statements and the Liabilities incurred since the date of the
Financial Statements that have been paid in the normal course of
business;
(e) suffered an extraordinary loss (before interest or taxes), waived,
surrendered or omitted to take any action in respect of any rights of
substantial value or entered into any commitment or transaction not in
the normal course of business, where such loss, rights, commitment or
transaction is or would be material in relation to the Assets or the
Business;
(f) granted any bonuses, whether monetary or otherwise, or made any
general wage or salary increases in respect of employees or officers
employed by Mineral Ridge other than as provided for in existing
employment arrangements, or changed the terms of employment for any
employee or officer of Mineral Ridge;
(g) hired or dismissed any employee or officer of Mineral Ridge, other
than the dismissals of Xxxx Xxxxxxxx and Xxxx Xxxxxxxx;
(h) granted any Encumbrance in respect of any of the Assets;
(i) declared or paid any dividend or declared or made any other
distribution on any of the Purchased Shares or redeemed, purchased or
otherwise acquired any of the Purchased Shares; or
(j) authorized, agreed or otherwise become committed to do any of the
foregoing.
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(7) BANKING
(a) LOANS AND CREDIT FACILITIES. Except as disclosed in Schedule "B"
hereto, Mineral Ridge has not entered into, committed to or otherwise
arranged for, any loans, operating lines of credit or other credit
facilities (including, without limitation, letters of credit, interest
rate or currency swaps, hedging contracts, forward loan or rate
agreements or other financial instruments), nor does Mineral Ridge
have any outstanding any bonds, debentures, mortgages, notes or other
similar indebtedness, and nor is Mineral Ridge obligated to create or
issue any bonds, debentures, mortgages, notes or other similar
indebtedness or financial instruments.
(b) GUARANTEES/INDEMNITIES. Mineral Ridge has not directly or indirectly
guaranteed or indemnified, or agreed to guarantee or indemnify, or
agreed to any other like commitment, in respect of any debt, liability
or other obligation of any person.
(c) BANK FACILITIES. Schedule "C" hereto contains a complete and accurate
listing showing the name of each bank, trust company or similar
financial institution in which Mineral Ridge has an account, safety
deposit box or other banking facility (of the nature described in
Schedule "C" hereto), including the names of all persons authorized to
transact business in respect of such accounts, and each corporate
credit card issued to Mineral Ridge.
(8) MATERIAL CONTRACTS
Schedule "D" hereto contains a complete and accurate list of all
Material Contracts. Except as disclosed in Schedule "E" hereto, Mineral
Ridge is not in breach or default of any of the terms of any Material
Contract, and the Vendor is not aware of any breach or default of any of the
terms of any Material Contract by any party thereto other than Mineral Ridge,
and each such Material Contract is in good standing and in full force and
effect without amendment thereto. No state of facts exists which, after
notice or lapse of time or both, would constitute such a default or breach.
Mineral Ridge has the capacity, including the necessary personnel, equipment
and supplies, to perform all of its obligations under each of its Material
Contracts.
(9) ASSETS AND PROPERTY
(a) OWNERSHIP OF ASSETS. Mineral Ridge owns good and marketable title to,
and is in actual and exclusive possession and control of, the Assets,
free and clear of Encumbrances, except Permitted Encumbrances, and
without limiting the generality of the foregoing, Mineral Ridge owns
or leases and is in actual and exclusive possession and control of the
Mineral Rights described in Schedule "F" hereto free and clear of
Encumbrances, except Permitted Encumbrances and, in the case of leased
Mineral Rights, the same are held under valid and subsisting leases,
and all monies due and payable thereunder have been duly paid;
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(b) ZONING. All Lands are zoned to permit the particular activity carried
out on such Lands by Mineral Ridge and its authorized agents or any
person to whom Mineral Ridge has given occupancy rights in respect of
such Lands.
(c) ROYALTY PAYMENTS. Except as disclosed in Schedule "G" hereto, there
are no landowner's royalties, overriding royalties, net profits
interests, working interests or similar interests on or in relation to
any of the Assets.
(d) OPERATING CONDITIONS. Mineral Ridge has operated the Assets and the
Business in accordance with accepted industry standards and in
accordance with all applicable laws, regulations and orders. The
Equipment comprised in the Assets is in good operating condition.
(e) LIST OF MINERAL RIGHTS. There are no Mineral Rights comprised in the
Assets other than those described in the list of Mineral Rights set
out in Schedule "F" hereto, which accurately and completely describes
all interests of Mineral Ridge in any Mineral Rights.
(f) LIST OF LANDS. There are no Lands comprised in the Assets other than
those described in the list of Lands set out in Schedule "F" hereto,
which accurately and completely describes all interests in real
property owned by Mineral Ridge used in the conduct of the Business.
(g) LIST OF EQUIPMENT. There is no Equipment comprised in the Assets
other than as described in the list of Equipment set out in
Schedule "H" hereto, which accurately and completely describes the
Equipment and other personal property owned by Mineral Ridge.
(10) HAZARDOUS MATERIALS AND ENVIRONMENTAL LAWS
(a) HAZARDOUS MATERIALS AND COMPLIANCE WITH ENVIRONMENTAL LAWS. No
Hazardous Materials, or other material used in or generated by any of
the Assets or the Business, have been or are currently placed, used,
stored, treated, manufactured, disposed of, released, discharged,
spilled or emitted in violation of any Environmental Laws or
Governmental Authorizations. All Hazardous Materials disposed of,
removed, emitted, treated, released, discharged or spilled from or by
any of the Assets or the Business were and are documented, generated,
handled, transported, stored, treated and disposed of in compliance
with all Environmental Laws and Governmental Authorizations.
(b) WASTE DISPOSAL. All of the Assets that were or are used for the
generation, handling, treatment, storage or disposal of Hazardous
Materials or other material used in or generated by the Assets or the
Business on any of the Lands or on any of the Mineral Rights have been
and are properly permitted and operated in compliance with all
Environmental Laws.
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(c) ENVIRONMENTAL CONTAMINATION. There is no Environmental Contamination
of any of the Assets or the Business.
(d) ENVIRONMENTAL ORDERS OR AGREEMENTS. There are no orders, agreements
or consent orders to which Mineral Ridge or any affiliate of Mineral
Ridge is a party relating to compliance of any of the Assets or the
Business with Environmental Laws.
(e) ENVIRONMENTAL CLAIMS. There have been no orders issued or threatened
and no investigations, removal, remedial or response actions ordered,
conducted, taken or threatened under or pursuant to any Environmental
Laws with respect to the Assets or the Business or any other
businesses conducted on or from any of the Lands or Mineral Rights
other than routine inspections. No claims are pending or threatened
with respect to Environmental Contamination on any of the Lands or
Mineral Rights or the violation of any Environmental Laws in
connection with the Assets or the Business.
(f) NUISANCE. The use of, and operations relating to, the Assets and the
Business conducted on or from the Lands or Mineral Rights, do not
constitute a nuisance of any nature, nor has any such claim for
nuisance been made or threatened in respect of such use by any person.
(11) LEGAL AND REGULATORY MATTERS
(a) LITIGATION. Except as described in Schedule "I" hereto, there are no
actions, suits, litigations, arbitrations, proceedings or claims in
progress, pending or threatened against or relating to Mineral Ridge,
the Vendor or CRL or likely to affect any of the Business, the Assets
or the Purchased Shares, there is no circumstance, matter or thing
known to the Vendor or CRL which might reasonably give rise to any
such proceeding and there is not outstanding or threatened against
Mineral Ridge, the Vendor or CRL any judgment, decree, injunction,
rule or order of or by any court or Governmental Authority having
jurisdiction.
(b) COMPLIANCE WITH LAWS. The operation of the Business is conducted in
compliance with all applicable Laws of each jurisdiction in which the
Business has been and is carried out and none of Mineral Ridge, the
Vendor or CRL have received any notice of any alleged material breach
or violation of any such Laws.
(c) COMPLIANCE DIRECTIVES. There are no outstanding compliance directives
or work orders relating to Mineral Ridge, the Assets or the Business
from any police, fire department, sanitation, health authorities,
environmental agencies, or from any other Government Authority,
department or agency, nor does Mineral Ridge, the Vendor or CRL have
notice that there are any matters under consideration by such
authorities relating to Mineral Ridge, the Assets or the Purchased
Shares.
(d) NOTICE OF DEFAULT/CLAIMS. None of Mineral Ridge, the Vendor or CRL
has received, from any Governmental Authority or a third party, any
notice of violation
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of any law or regulation or of any default, violation or termination
of any permits and licenses or of any fact or circumstance which
shall, or is likely to, result in such a default, violation or
termination.
(e) NO SEIZURE. Except in respect of the litigation described in
Schedule "I" hereto, there is no eminent domain, appropriation,
expropriation or seizure proceeding in respect of the Assets, the
Business or the Purchased Shares that is pending or that has been
threatened.
(f) LICENSES, REGISTRATIONS AND PERMITS. Mineral Ridge is duly qualified
to carry on, and holds all licenses, registrations and permits as may
be required for carrying on, the Business in all jurisdictions in
which the nature of the Business or the Assets make such
qualification, licenses, registrations and permits necessary.
(g) RECLAMATION. The Financial Statements and notes thereto accurately
disclose and describe all obligations of Mineral Ridge under all
applicable statutes for reclamation, site restoration and closure
requirements in respect of its Assets.
(12) TAXATION
There are no actions, suits, claims, proceedings, investigations or
audits now pending or threatened against Mineral Ridge, the Vendor or CRL in
respect of any Taxes affecting the Assets, the Business or the Purchased Shares
and there are no matters under discussion, audit or appeal with any Governmental
Authority relating to Taxes which, if not paid, would result in a lien or charge
on any of the Assets or the Purchased Shares. Mineral Ridge has fulfilled all
requirements under Laws for withholding of amounts from employees and has
remitted all amounts withheld to the appropriate authorities within the
prescribed times.
(13) EMPLOYMENT MATTERS
(a) EMPLOYEE CONTRACTS. Except as disclosed in Schedule "J" hereto,
Mineral Ridge is not a party to:
(i) any material written contract or commitment for the employment
of any officer or employee;
(ii) any agreement relating to the termination or notice of
termination of any employee which requires a specified notice
period or salary in lieu of notice;
(iii) any contract with or commitment to any labour union or
employees' association;
(iv) any pension, profit sharing, deferred compensation, retirement,
hospitalization, health, disability, termination, insurance or
similar plan or practice, formal or informal, with respect to
its employees, former
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employees or others, other than a stock option plan or a group
benefits plan; and
(v) any other contract that requires more than six months' notice
of termination.
(b) UNIONS. There are no current attempts to organize or establish any
labour union or employee association with respect to Mineral Ridge.
(c) NO GOLDEN PARACHUTES. Except in respect of the employment contracts
described in Schedule "J" hereto, neither the execution and delivery
of this Agreement nor the consummation of any of the transactions
contemplated hereby or thereby, whether individually or in the
aggregate, shall:
(i) result in any payment (including, without limitation, a
severance, unemployment compensation, termination, "golden
parachute", bonus or other payment) becoming due to any
director, officer, employee, agent or contractor of Mineral
Ridge or of any other person including CRL for which Mineral
Ridge would be liable in whole or in part under any plan,
agreement or otherwise; or
(ii) materially increase or result in the acceleration of the time
of payment of any salary or benefits otherwise payable by
Mineral Ridge to any director, officer, employee, agent or
contractor of Mineral Ridge or of any other person including
CRL for which Mineral Ridge would be liable in whole or in
part.
(d) NO EMPLOYMENT DISPUTES. Mineral Ridge has not terminated the
employment of any employee in circumstances that may give rise to a
claim by such employee for wrongful dismissal, other than the claim of
Xxxxxxxx Xxxxxx described in Schedule "I" hereto. No notice has been
received by Mineral Ridge or CRL of any complaint filed by any of its
employees against it, claiming that it has violated any applicable
employment standards or human rights or similar legislation or of any
applications, complaints or proceedings of any kind involving Mineral
Ridge or any of its employees before any court, labour relations board
or similar tribunal. There are no pending or threatened work
stoppages or labour disputes, charges or unfair labour practices by
any present or former employees of Mineral Ridge. No event has
occurred with respect to CRL, the Vendor or Mineral Ridge which is
likely to result in any claim or action against Mineral Ridge under
any Laws related to employment or social security matters or any
increase in social insurance payroll assessments or any similar
assessment payable by Mineral Ridge.
(e) RETIREMENT AND BENEFITS PLANS. The Financial Statements and notes
thereto accurately disclose and describe all retirement and benefits
plans and pension obligations for present and past employees of
Mineral Ridge.
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(14) INSURANCE
Mineral Ridge maintains such policies of insurance and insured
reclamation bonds, issued by responsible insurers, as are appropriate to or
statutorily required for the Business and its Assets, in such amounts and
against such risks as are customarily carried and insured against by owners
of comparable businesses, properties and assets. Except as disclosed in
Schedule "I" with respect to the reclamation bonding with Van American, all
such policies of insurance and insured reclamation bonds, are in full force
and effect and Mineral Ridge is not in default as to the payment of premiums
or other terms of any such policy. Schedule "K" hereto contains a complete
list of all such insurance policies and insured reclamation bonds carried by
Mineral Ridge.
(15) BINDING AGREEMENT
This Agreement has been duly executed and delivered by the Vendor and
CRL and constitutes a legal, valid and binding obligation of the Vendor and CRL.
(16) OWNERSHIP OF PURCHASED SHARES
(a) The Vendor is the sole legal and beneficial owner of the Purchased
Shares, free and clear of all Encumbrances, except Permitted
Encumbrances.
(b) The Vendor is not acting as nominee, agent, trustee, executor,
administrator or other legal representative on behalf of any other
person who has a direct beneficial interest in the Purchased Shares.
(17) RESIDENCY
Mineral Ridge is a "non-resident" of Canada within the meaning of the
INCOME TAX ACT (Canada).
(18) NO COMMISSION
Neither the Vendor nor CRL has taken any action that would result in a
brokerage commission, finder's fee or other like payment being payable by any
party hereto with respect to the transactions contemplated hereby.
(19) APPROVALS
Except as disclosed in Schedule "M" hereto or as otherwise
specified in this Agreement or the VGC Subscription Agreement, no exemption,
consent, approval, order or authorization of any court, Governmental
Authority, stock exchange or any third party is required by, or with respect
to, the Vendor, CRL or Mineral Ridge in connection with the execution,
delivery and performance of this Agreement by the Vendor or CRL or the
consummation by the Vendor or CRL of any of the transactions contemplated
hereby.
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(20) REPRESENTATIONS AND WARRANTIES OF MINERAL RIDGE IN RESTATED AND
AMENDED LOAN AGREEMENT
The representations and warranties of Mineral Ridge set out in
Article VI of the restated and amended loan agreement between Mineral Ridge
and Dresdner dated as of October 21, 1998, other than:
(a) the representations and warranties set out in Sections 6.5 and 6.7;
and
(b) the representations set out in Sections 6.6 and 6.18, insofar as they
pertain to the Purchaser or VGC,
are, and will on the Closing Date, be true, complete and accurate.
(21) SECURITIES LAWS
(a) PURCHASE AS PRINCIPAL. CRL is purchasing the VGC Shares as
principal for its own account, and not for the benefit of any
other person, for investment only and not with a view to resale
or distribution.
(b) NO ADVERTISEMENT. The offering and sale of the VGC Shares to
CRL were not made through an advertisement of the VGC Shares in
printed media of general and regular paid circulation, radio or
television or any other form of advertisement, and, to its
knowledge, CRL has not received an offering memorandum as such
term is defined under the Securities Laws, and CRL acknowledges
that it is not purchasing the VGC Shares as a result of any
form of general solicitation or general advertising including
advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or
broadcast over radio, or television, or any seminar or meeting
whose attendees have been invited by general solicitation or
general advertising.
(c) NO INSIDER INFORMATION. The VGC Shares are not being purchased
by CRL as a result of any material information concerning the
Company that has not been publicly disclosed and CRL's decision
to enter into this agreement and acquire the VGC Shares has not
been made as a result of any verbal or written representation
as to fact or otherwise made by or on behalf of the Company or
any other person and is based entirely upon currently available
public information concerning the Company.
(d) FINANCIAL KNOWLEDGE. CRL has such knowledge and experience in
financial and business affairs as to be capable of evaluating
the merits and risks of the investment hereunder in the VGC
Shares and is able to bear the economic risk of loss of such
investment.
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(e) "U.S. PERSON". CRL is not a "U.S. Person" as defined in
Regulation S under the U.S. Securities Act.
(f) INVESTMENT ONLY. CRL has no intention to distribute either
directly or indirectly any of the VGC Shares in the United
States or to "U.S. Persons"; provided, however, that CRL may
sell or otherwise dispose of any of the VGC Shares pursuant to
registration thereof pursuant to the U.S. Securities Act and
any applicable state securities laws or under an exemption from
such registration requirements.
(g) NO U.S. REGISTRATION. CRL understands that the VGC Shares have
not been and will not be registered under the U.S. Securities
Act and that the sale contemplated hereby is being made in
reliance on an exemption from such registration requirement.
(h) ACCREDITED INVESTOR. CRL is an Accredited Investor and is a
corporation not formed for the specific purpose of acquiring
the VGC Shares, with total assets in excess of $5,000,000.
(i) NO "DIRECTED SELLING EFFORTS". CRL acknowledges that it has
not purchased the VGC Shares as a result of, and will not
itself engage in, any "directed selling efforts" (as defined in
Regulation S under the U.S. Securities Act) in the United
States in respect of the VGC Shares which would include any
activities undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the
market in the United States for the resale of the VGC Shares;
provided, however, that CRL may sell or otherwise dispose of
any of the VGC Shares pursuant to registration of the VGC
Shares pursuant to the U.S. Securities Act and any applicable
state securities laws or under an exemption from such
registration requirements and as otherwise provided herein.
(j) ADDRESS OF CRL. The office of CRL at which CRL received and
accepted the offer to purchase the VGC Shares is the address
listed on the first page of this Agreement.
(k) U.S. RESALE RESTRICTIONS. CRL agrees that if it decides to
offer, sell or otherwise transfer any of the VGC Shares, it
will not offer, sell or otherwise transfer any of such VGC
Shares directly or indirectly, unless:
(i) the sale is to VGC;
(ii) the sale is made outside the United States in a
transaction meeting the requirements of Rule 904 of
Regulation S under the U.S. Securities Act and in
compliance with applicable local laws and regulations;
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(iii) the sale is made pursuant to the exemption from the
registration requirements under the U.S. Securities Act
provided by Rule 144 thereunder and in accordance with
any applicable state securities or "Blue Sky" laws; or
(iv) the VGC Shares are sold in a transaction that does not
require registration under the U.S. Securities Act or
any applicable U.S. state laws and regulations
governing the offer and sale of securities, and it has
prior to such sale furnished to VGC an opinion
reasonably satisfactory to VGC.
(l) CANADIAN RESALE RESTRICTIONS. CRL acknowledges that if it
decides to offer, sell or otherwise transfer any of the VGC
Shares in Canada, such securities may be offered or sold or
otherwise transferred only:
(i) pursuant to an exemption from the registration and
prospectus requirements under the Securities Laws or
the securities legislation of the province of Canada in
which such trade is occurring, and with the prior
consent of The Toronto Stock Exchange; or
(ii) if 12 months has elapsed from the date of the issue of
the VGC Shares, and at that time CRL is not a control
person of VGC, no unusual effort is made to prepare the
market or create a demand for the VGC Shares and no
extraordinary commission or other consideration is paid
in respect of such offer, sale or transfer.
(m) LEGEND. CRL acknowledges that all certificates issued
representing the VGC Shares, as well as all certificates issued
in exchange for or in substitution therefor, will bear legends
to the following effect:
"THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE FOLLOWING HOLD PERIOD AND RESALE RESTRICTIONS:
1. B.C. LEGEND -- THE COMMON SHARES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO A HOLD PERIOD IN THE
PROVINCE OF BRITISH COLUMBIA AND MAY NOT BE TRADED IN
BRITISH COLUMBIA UNTIL OCTOBER 21, 1999, EXCEPT AS
PERMITTED BY THE SECURITIES ACT (BRITISH COLUMBIA) AND
THE REGULATIONS AND RULES MADE THEREUNDER. A NEW
CERTIFICATE, NOT BEARING THIS LEGEND, MAY BE OBTAINED
FROM THE COMPANY UPON DELIVERY OF THIS CERTIFICATE AT
ANY TIME AFTER OCTOBER 21, 1999.
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2. U.S. LEGEND -- THE COMMON SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT
SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE 1933 ACT OR (C) WITHIN THE UNITED STATES IN
ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER
THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF
APPLICABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT
CONSTITUTE GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS
ON STOCK EXCHANGES IN CANADA. A NEW CERTIFICATE, NOT
BEARING THIS LEGEND, MAY BE OBTAINED FROM THE COMPANY'S
REGISTRAR AND TRANSFER AGENT, UPON DELIVERY OF THIS
CERTIFICATE AND EITHER A DULY EXECUTED DECLARATION, IN
A FORM SATISFACTORY TO SUCH REGISTRAR AND TRANSFER
AGENT AND THE COMPANY, TO THE EFFECT THAT SUCH SALE IS
BEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE 1933 ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
SALE IS EXEMPT FROM REGISTRATION UNDER THE 1933 ACT."
(n) RECORD OF TRANSFER. CRL understands and acknowledges that the
Company, at its option, may not record a transfer without first
being satisfied that such transfer is exempt from or not
subject to registration under the U.S. Securities Act or the
securities laws of any state of the United States or is exempt
from or not subject to the registration and prospectus
requirements under the Securities Laws or the securities
legislation of the province of Canada in which such transfer is
occurring.
3.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND VGC
The Purchaser and VGC represent and warrant to and in favour of the
Vendor and CRL as follows and acknowledge that the Vendor and CRL are relying
upon such representations and warranties as an inducement to enter into this
Agreement and to consummate the transactions contemplated hereby, that as at the
date hereof:
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(1) CORPORATE STATUS AND AUTHORITY
(a) CORPORATE STATUS OF THE PURCHASER. The Purchaser is a company that is
duly incorporated and validly existing under the laws of the State of
Nevada and in good standing under applicable corporate statutes.
(b) CORPORATE STATUS OF VGC. VGC is a corporation that is duly continued
and validly existing under the laws of the Yukon Territory and in good
standing under the BUSINESS CORPORATIONS ACT (Yukon Territory).
(c) CORPORATE POWER AND AUTHORITY OF THE PURCHASER. The Purchaser has the
corporate power and authority to enter into this Agreement, to perform
its obligations hereunder and to acquire legal and beneficial title to
and ownership of the Purchased Shares from CRL on the terms and
conditions hereof.
(d) CORPORATE POWER AND AUTHORITY OF VGC. VGC has the corporate power and
authority to enter into this Agreement, and to perform its obligations
hereunder.
(e) NO BANKRUPTCY PROCEEDINGS. No proceedings have been taken or
authorized by the Purchaser or VGC or, to the best of the knowledge of
the Purchaser or VGC, by any other person, with respect to the
bankruptcy, insolvency, liquidation, dissolution, or winding-up of the
Purchaser or VGC.
(2) NO DEFAULT
The execution and delivery of this Agreement, the fulfilment of or
compliance with the terms and provisions hereof and the issue, sale and delivery
on the Closing Date of the VGC Shares, do not and will not result in a breach of
and do not create a state of facts which, after notice or lapse of time, or
both, will result in a breach of, and do not and will not conflict with, any of
the terms, conditions or provisions of the constating documents of the Purchaser
or VGC or any trust indenture, agreement or instrument to which the Purchaser or
VGC is a party or by which the Purchaser or VGC is contractually bound or will
be contractually bound on the Closing Date.
(3) BINDING AGREEMENT
This Agreement has been duly executed and delivered by the Purchaser
and VGC and constitutes a legal, valid and binding obligation of the Purchaser
and VGC.
(4) SHARE CAPITAL
The authorized share capital of VGC consists of an unlimited number of
common shares without par value and an unlimited number of preferred shares, of
which 89,152,540 common shares are issued and outstanding on the date hereof as
fully paid and non-assessable shares.
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(5) DISCLOSURE DOCUMENTS
The following disclosure documents of VGC:
(a) the audited annual financial statements for the year ended
December 31, 1997;
(b) the management information and proxy circular dated as of May 11, 1998
for VGC's 1998 annual general meeting;
(c) all press releases issued by VGC after December 31, 1997;
(d) the Form 20-F of VGC dated March 30, 1998; and
(e) the quarterly reports to shareholders on the interim financial periods
ended March 31, 1998 and June 30, 1998,
were, at their respective dates of issue or publication, true and
correct in all material respects, contained no misrepresentations and
were prepared in accordance with and complied with applicable laws,
regulations, policy statements and rules.
(6) NO ENCUMBRANCES ON VGC SHARES
At their time of issue, the VGC Shares will be free and clear of all
Encumbrances, other than those created by, or imposed upon, the holders thereof
through no action of VGC.
(7) LISTING OF VGC SHARES
The common shares in the capital of VGC are listed and posted for
trading on the Stock Exchanges.
(8) REPORTING ISSUER STATUS
VGC is a reporting issuer under the SECURITIES ACT (British Columbia),
and is in compliance with its obligations thereunder.
(9) NO COMMISSION
Neither the Purchaser nor VGC has taken any action that would result
in a brokerage commission, finder's fee or other like payment being payable by
any party hereto with respect to the transactions contemplated hereby.
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PART 4
COVENANTS
4.1 COVENANTS OF THE VENDOR AND CRL
(1) AGREEMENT DATE TO CLOSING
Each of the Vendor and CRL covenants and agrees with the Purchaser and
VGC that, from the date of this Agreement to the Closing, it shall, and shall
cause Mineral Ridge to:
(a) ACCESS. Allow the Purchaser, VGC and their representatives reasonable
access to the premises and the properties of the Vendor and Mineral
Ridge and to the files, books, records and offices of the Vendor and
Mineral Ridge, including, without limitation, any and all information
relating to the Vendor's and Mineral Ridge's tax matters, contracts,
leases, licences and real, personal and intangible property and
financial condition. The Vendor and Mineral Ridge shall cause the
Vendor's and Mineral Ridge's auditors to cooperate with the
Purchaser's auditors in making available to the Purchaser and VGC all
financial information reasonably requested, including, without
limitation, the right to examine the working papers pertaining to tax
matters and financial statements prepared or audited by the Vendor's
and Mineral Ridge's auditors;
(b) CONSULTATION. Permit the Purchaser's representatives to meet with the
Vendor's and Mineral Ridge's directors, officers and employees and
attend such business meetings and provide the Purchaser with such
periodic reports, as the Vendor may reasonably request to permit the
Vendor to become and remain informed as to the Vendor's and Mineral
Ridge's business, assets and operations;
(c) CONDUCT BUSINESS IN THE ORDINARY COURSE. Except as otherwise provided
in this Agreement, operate the Business in the usual, regular and
ordinary manner and, to the extent consistent with such operation,
keep available the services of Mineral Ridge's present directors,
officers and employees (subject to voluntary resignations and
dismissals in accordance with proper business practices) and preserve
its and Mineral Ridge's relationships with clients and others having
business dealings with Mineral Ridge;
(d) NO ENCUMBRANCES ON ASSETS. Refrain from creating or permitting any
Encumbrance, other than Permitted Encumbrances, on the Assets in whole
or in part and from selling, transferring or otherwise disposing of
the Assets;
(e) NO ENCUMBRANCES ON SHARES. Refrain from creating or permitting any
Encumbrance, other than Permitted Encumbrances, on the Purchased
Shares;
(f) NO DIVIDENDS. Refrain from declaring any dividends or making any
other distributions in respect of capital stock of Mineral Ridge;
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(g) NO CHANGE TO MATERIAL CONTRACTS. Refrain from amending or varying any
of the Material Contracts or enter into any other Material Contract;
(h) MAINTAIN INSURANCE. Maintain in full force and effect all of the
Vendor's, CRL's and Mineral Ridge's policies of insurance and insured
reclamation bonds or renewals of such policies or bonds now in effect
in respect of Mineral Ridge, the Assets, the Business, and Mineral
Ridge's directors, officers and employees, and shall give all notices
and present all claims under all existing policies in a due and timely
fashion as may be reasonably required in accordance with prudent
business practice;
(i) RESTRICTIONS ON LOANS. Ensure that Mineral Ridge does not incur any
borrowings;
(j) RESTRICTIONS ON CERTAIN COMMITMENTS. Ensure that Mineral Ridge does
not enter into commitments in the nature of a capital expenditure and
that Mineral Ridge does not incur any contingent liability;
(k) NO AMENDMENT TO CHARTER DOCUMENTS. Except as otherwise provided in
this Agreement, not amend Mineral Ridge's Constating Documents or
change in any manner Mineral Ridge's authorized capital or the rights,
privileges, restrictions and conditions attaching to any of Mineral
Ridge's share capital;
(l) NO APPOINTMENTS OF NEW DIRECTORS OR OFFICERS. Ensure that Mineral
Ridge does not appoint any new directors or officers;
(m) MAINTAIN REGISTRATIONS. Use its best efforts to maintain all of
Mineral Ridge's registrations, licenses and permits, and the
registrations, licences and permits of Mineral Ridge's directors,
officers and employees, in good standing with such Regulatory
Authorities as are necessary to permit Mineral Ridge and its
directors, officers and employees to carry on the Business as
presently carried on;
(n) COMPLIANCE WITH LAWS. Comply in all material respects with all laws
applicable to it and to the conduct of the Business;
(o) OBTAIN CONSENTS. Use its best efforts to obtain, and where required
for the operation of the Business, to transfer to Mineral Ridge, all
necessary Governmental Authorizations, and all necessary releases,
waivers, consents and approvals as may be required to complete the
Vendor's obligations under this Agreement and to consummate the
transactions contemplated by this Agreement, and all such releases,
waivers, consents and approvals shall be in form and substance
satisfactory to the Purchaser, acting reasonably;
(p) MAINTENANCE OF BOOKS AND RECORDS. Maintain Mineral Ridge's books of
account and records in the usual, regular and ordinary manner, in
accordance with generally accepted accounting principles applied on a
consistent basis;
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(q) NOTICE OF MATERIAL DEVELOPMENTS. Notify the Purchaser and VGC as soon
as any of its or Mineral Ridge's directors or officers have determined
that a state of facts exist which results in, or shall result in:
(i) any representation and warranty of the Vendor or CRL being
untrue or incorrect in any material respects;
(ii) the non-fulfilment of any conditions set forth in this
Agreement; or
(iii) any adverse material change in the business, operations,
assets, liabilities, ownership, capital or financial position
or condition of Mineral Ridge, or change in a material fact
that has a significant adverse affect on, or would reasonably
be expected to have a significant adverse affect on, the
business, operations, assets, liabilities, ownership, capital
or financial position or condition of Mineral Ridge; and
(r) PERMIT REPRESENTATIVE TO MANAGE BUSINESS AND OPERATIONS. Take such
reasonable steps as are necessary to allow a representative of the
Purchaser or VGC to manage the business and operations of Mineral
Ridge at the Mineral Ridge mine.
The Vendor and CRL acknowledge that the Purchaser and VGC are relying
upon the foregoing covenants and agreements as an inducement to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
(2) AT CLOSING
In addition to the foregoing, each of the Vendor and CRL covenants and
agrees with the Purchaser and VGC that it shall, and shall cause Mineral Ridge
to, ensure that immediately prior to the Closing:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Vendor and CRL shall be true and correct in all material respects;
(b) EXECUTION AND DELIVERY RATIFIED AND AUTHORIZED. The execution and
delivery of this Agreement and the performance by each of the Vendor
and CRL of its respective obligations under this Agreement shall be
duly and validly ratified and authorized by the Board of Directors of
the Vendor and CRL, as the case may be; and
(c) DUE EXECUTION. This Agreement shall be duly executed and delivered by
the Vendor and CRL and constitute a valid and binding obligation of
the Vendor enforceable against the Vendor and CRL.
The Vendor and CRL acknowledge that the Purchaser and VGC are relying
upon the foregoing covenants and agreements as an inducement to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
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4.2 COVENANTS OF THE PURCHASER AND VGC
(1) GENERAL
Each of the Purchaser and VGC covenants and agrees with the Vendor and
CRL as follows:
(a) COMPLETION OF DUE DILIGENCE. The Purchaser and VGC shall use their
best efforts to complete their due diligence investigations on or
before October 12, 1998;
(b) CONSENT OF STOCK EXCHANGES. VGC will use its best efforts to obtain
the consent of the Stock Exchanges and comply with all other
regulatory requirements, requirements of the Stock Exchanges and
requirements of the Securities Laws and U.S. Securities Laws
applicable to the offering and sale of VGC Shares to CRL on a "private
placement" basis as contemplated by this Agreement prior to the
Closing Date; and
(c) LISTING OF VGC SHARES. VGC will use its best efforts to ensure that
the VGC Shares will be listed and posted for trading on the Stock
Exchanges.
The Purchaser and VGC acknowledge that the Vendor and CRL are relying
upon the foregoing covenants and agreements as an inducement to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
(2) AT CLOSING
In addition to the foregoing, each of the Purchaser and VGC covenants
and agrees with the Vendor and CRL that immediately prior to the Closing:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Purchaser and VGC shall be true and correct in all material
respects;
(b) EXECUTION AND DELIVERY RATIFIED AND AUTHORIZED. The execution and
delivery of this Agreement and the performance by each of the
Purchaser and VGC of its respective obligations under this Agreement
shall be duly and validly ratified and authorized by the Board of
Directors of the Purchaser and VGC, as the case may be; and
(c) DUE EXECUTION. This Agreement shall be duly executed and delivered by
the Purchaser and VGC and constitute a valid and binding obligation of
the Purchaser and VGC, enforceable against the Purchaser and VGC.
The Purchaser and VGC acknowledge that the Vendor and CRL are relying
upon the foregoing covenants and agreements as an inducement to enter into this
Agreement and to consummate the transactions contemplated by this Agreement.
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PART 5
CONDITIONS PRECEDENT
5.1 MUTUAL CONDITIONS PRECEDENT
The obligations of the parties to complete the sale of the Purchased
Shares and the transactions contemplated by this Agreement are subject to the
following conditions being satisfied on or before the Closing, which conditions
are for the mutual benefit of all parties to this Agreement and may be waived in
whole or in part only if jointly waived by all of the parties to this Agreement:
(a) all material approvals, authorizations or consents, including
approvals by Governmental Authorities, regulatory authorities, third
parties and judicial approvals and orders legally required for the
consummation of the Agreement and the transactions contemplated by
this Agreement, shall have been obtained or received from the persons,
authorities or bodies having jurisdiction in the circumstances;
(b) none of the approvals, authorizations, consents, orders, laws or
regulations contemplated in this Section 5.1 shall have contained
terms or conditions or require undertakings or security deemed
unsatisfactory or unacceptable by any of the parties acting
reasonably;
(c) an agreement, or agreements, in form and substance acceptable to VGC,
shall have been entered into among Mineral Ridge, the Vendor, CRL and
Dresdner whereunder:
(i) the terms of the indebtedness of Mineral Ridge to Dresdner are
amended in a manner satisfactory to VGC;
(ii) Dresdner consents to the acquisition of Mineral Ridge by the
Purchaser; and
(iii) Dresdner agrees to release the Vendor and CRL of all
obligations and liabilities undertaken by the Vendor or CRL in
connection with the debt financing of Mineral Ridge and the
Business, including the pledge of the Vendor's issued and
outstanding shares by CRL and the pledge of the issued and
outstanding shares of Touchstone Resources Company and Mineral
Ridge by the Vendor,
and such other documents as may be required to give effect thereto;
(d) agreements shall have been entered into among Mineral Ridge, the
Vendor, CRL, the Purchaser, VGC and Dresdner and such other creditors
of Mineral Ridge, the Vendor or CRL as may be necessary to release
each of the Vendor and CRL of all its liabilities, whether as
principal debtor or guarantor, in respect of the
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development or operation of Mineral Ridge and the Business,
including agreements with a reclamation bonding company and such
other documents necessary to give effect thereto; and
(e) there shall be no inter-company balances owing between Mineral Ridge
and either of the Vendor or CRL, and Mineral Ridge, the Vendor and CRL
shall have executed and delivered such releases of such inter-company
balances as may be requested by the Purchaser and VGC.
5.2 CONDITIONS FOR THE BENEFIT OF THE VENDOR AND CRL
The obligation of the Vendor and CRL to complete the sale of the
Purchased Shares and the transactions contemplated by this Agreement is subject
to the satisfaction on or before the Closing, for the exclusive benefit of the
Vendor and CRL, of each of the following conditions:
(a) the representations and warranties of the Purchaser shall be true
and correct in all material respects as at the Closing with the
same force and effect as if such representations and warranties had
been made at and as of the Closing;
(b) the Purchaser and VGC shall have, in all material respects, performed
and complied with all covenants and agreements contained in this
Agreement to be performed or complied with, or caused to be performed
or complied with, by the Purchaser and VGC at or prior to the Closing;
(c) VGC shall have delivered to the Vendor and CRL:
(i) the VGC Subscription Agreement duly executed by VGC, together
with a cheque in the amount of $250,000 representing the
purchase price for the CRL Shares;
(ii) certified copies of resolutions of the directors of the
Purchaser and VGC approving this Agreement and all other
transactions contemplated by this Agreement; and
(iii) such other documentation and assurances as may be reasonably
required by the Vendor, or CRL, or their counsel;
(d) each of the Purchaser and VGC shall have delivered to the Vendor and
CRL a certificate, dated as of the Closing, and signed by any two of
its officers certifying that:
(i) the representations and warranties of the Purchaser and VGC
herein contained are true and correct at the Closing;
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(ii) each of the Purchaser and VGC has performed and complied with
all covenants and agreements contained in this Agreement to be
performed or complied with by the Purchaser and VGC at or prior
to the Closing; and
(iii) all necessary corporate action has been taken by the Purchaser
and VGC to authorize the execution and delivery of this
Agreement and to consummate the transactions contemplated by
this Agreement; and
(e) counsel to the Purchaser and VGC shall have delivered to the Vendor
and CRL favourable legal opinions, dated the Closing, in form and
content to the reasonable satisfaction of the Vendor and CRL and with
respect to all such matters as the Vendor and CRL may reasonably
request including, without limitation, the following:
(i) each of the Purchaser and VGC is duly organized and is a
validly existing company, is in good standing under applicable
laws, and is duly qualified to carry on business and own
property under the laws of any other jurisdictions in which it
carries on business or owns property;
(ii) this Agreement has been duly authorized by all necessary
corporate action on the part of the Purchaser and VGC, has been
duly executed and delivered by and on behalf of the Purchaser
and VGC, and is valid and legally binding upon the Purchaser
and VGC;
(iii) all necessary steps, authorizations and approvals have been
taken or obtained by the Purchaser and VGC to authorize the
execution and delivery by the Purchaser and VGC of the
Agreement and the performance of their respective obligations
thereunder;
(iv) the authorized and issued share capital of VGC;
(v) the VGC Shares have been duly and validly allotted and issued
as fully paid and non-assessable shares in the capital of VGC;
(vi) the VGC Shares have been conditionally approved for listing on
the Stock Exchanges, subject to the filing of the required
documents within the time stipulated by the Stock Exchanges;
(vii) VGC is a reporting issuer not in default under the SECURITIES
ACT (British Columbia);
(viii) no prospectus is required and, except as have been obtained
or completed, no approval or consent of or filing with any
governmental authority in the British Columbia or the Stock
Exchanges is required in order to qualify the issuance and
sale by VGC of the VGC Shares except for the filing within 10
days of the Closing Date of reports in prescribed form
prepared
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and executed in accordance with the Securities Laws and
except as may be required by the Stock Exchanges in
connection with the sale of the VGC Shares; and
(ix) the hold periods and resale restrictions applicable to the VGC
Shares under the Securities Laws.
The foregoing conditions are inserted for the exclusive benefit of the Vendor
and CRL and may be waived in whole or in part by the Vendor or CRL at any time.
5.3 CONDITIONS FOR THE BENEFIT OF THE PURCHASER AND VGC
The obligation of the Purchaser and VGC to complete the purchase of
the Purchased Shares and the transactions contemplated by this Agreement is
subject to the satisfaction on or before the Closing, for the exclusive benefit
of the Purchaser and VGC, of each of the following conditions:
(a) the representations and warranties of the Vendor and CRL herein and in
the VGC Subscription Agreement shall be true and correct in all
material respects as at the Closing with the same force and effect as
if such representations and warranties had been made at and as of the
Closing;
(b) the Vendor and CRL shall have, in all material respects, performed and
complied with all covenants and agreements contained in this Agreement
to be performed or complied with, or caused to be performed or
complied with, by the Vendor or CRL at or prior to the Closing;
(c) since the date of this Agreement, there shall not have been any
adverse material change in the business, operations, assets,
liabilities, ownership, capital or financial position or condition of
Mineral Ridge, or change in a material fact that has a significant
adverse affect on, or would reasonably be expected to have a
significant adverse effect on, the business, operations, assets,
liabilities, ownership, capital or financial position or condition of
Mineral Ridge;
(d) except as previously disclosed to and consented to in writing by VGC,
there being no outstanding options, warrants or other rights to
acquire shares of Mineral Ridge or any material change in compensation
or benefits arrangements with any director, officer or employee of
Mineral Ridge;
(e) the completion by VGC of a due diligence review satisfactory to VGC,
in its sole discretion, acting reasonably, of the financial condition,
business, affairs, properties and assets of Mineral Ridge;
(f) the receipt by the Purchaser and VGC of confirmation satisfactory to
the Purchaser and VGC that the purchase of the Purchased Shares and
the transactions
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contemplated by this Agreement have been approved by the required
majority of the shareholders of the Vendor and CRL or that such
approvals are not required;
(g) each of the Vendor and CRL shall have delivered to the Purchaser and
VGC a certificate, dated as of the Closing, and signed by any two of
its officers acceptable to the Purchaser and VGC certifying that:
(i) the representations and warranties of the Vendor and CRL herein
contained are true and correct at the Closing;
(ii) each of the Vendor and CRL has performed and complied with all
covenants and agreements contained in this Agreement to be
performed or complied with by the Vendor and CRL at or prior to
the Closing;
(iii) all necessary corporate action has been taken by the Vendor and
CRL to authorize the execution and delivery of this Agreement
and to consummate the transactions contemplated by this
Agreement; and
(iv) since the date of this Agreement there has not been any adverse
material change in the business, operations, assets,
liabilities, ownership, capital or financial position or
condition of Mineral Ridge, or change in a material fact that
has a significant adverse effect on, or would reasonably be
expected to have a significant adverse effect on, the business,
operations, assets, liabilities, ownership, capital or
financial position or condition of Mineral Ridge;
(h) the Vendor and CRL shall have delivered to the Purchaser:
(i) resignations in writing of all directors and officers of
Mineral Ridge;
(ii) certified copies of resolutions of the directors of the Vendor
approving the transfer of the Purchased Shares to the Purchaser
and all other transactions contemplated by this Agreement;
(iii) duly executed share certificates registered on the books of
Mineral Ridge in the name of the Purchaser representing the
Purchased Shares;
(iv) confirmation, in a form satisfactory to VGC, that the execution
and performance of this Agreement by CRL and the Vendor has
been approved by the required majority of the shareholders of
CRL and the Vendor or that such approval is not required; and
(v) such other documentation and assurances reasonably required by
VGC or its counsel; and
(i) counsel to the Vendor and CRL shall have delivered to the Purchaser
and VGC favourable legal opinions, dated the Closing, in form and
content to the
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reasonable satisfaction of the Purchaser and VGC and with respect
to all such matters as the Purchaser and VGC may reasonably request
including, without limitation, the following:
(i) each of CRL, the Vendor and Mineral Ridge is duly organized and
is a validly existing company, is in good standing under
applicable laws, and is duly qualified to carry on business and
own property under the laws of any other jurisdictions in which
it carries on business or owns property;
(ii) Mineral Ridge has all necessary corporate power and authority
to own its Assets and to carry on its Business as now
conducted;
(iii) this Agreement has been duly authorized by all necessary
corporate action on the part of the Vendor and CRL, has been
duly executed and delivered by and on behalf of the Vendor and
CRL, and is valid and legally binding upon the Vendor and CRL;
(iv) all necessary steps, authorizations and approvals have been
taken or obtained by the Vendor and CRL to authorize the
execution and delivery by the Vendor and CRL of the Agreement
and the performance of their respective obligations thereunder;
(v) so far as counsel is aware, none of the execution and delivery
of this Agreement, nor the fulfilment of its terms, conflicts
or shall conflict with or results or shall result in a breach
of any of the terms, conditions or provisions of the Constating
Documents of either the Vendor or Mineral Ridge, resolutions of
the shareholders and directors of the Vendor or Mineral Ridge,
any applicable laws, or, so far as counsel is aware, any
material license or permit issued to the Vendor or Mineral
Ridge or any material agreement or instrument to which the
Vendor or Mineral Ridge is a party, other than as disclosed in
Schedule "E" to this Agreement;
(vi) so far as counsel is aware, there is no threatened, pending or
actual litigation against or involving Mineral Ridge, other
than as disclosed in Schedule "I" to this Agreement;
(vii) the authorized and issued share capital of Mineral Ridge;
(viii) according to the register of shareholders of Mineral Ridge,
the Vendor is the registered holder of all of the issued and
outstanding shares of Mineral Ridge;
(ix) all necessary steps, authorizations and approvals have been
taken or obtained by Mineral Ridge to authorize the due and
valid transfer of the Purchased Shares at the Closing from the
Vendor to the Purchaser and the consummation of the
transactions contemplated by the Agreement; and
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(x) the form of certificates representing the Purchased Shares
comply with the memorandum and articles of Mineral Ridge, the
requirements of the applicable corporate statutes of the State
of Nevada and have been duly approved by the directors of
Mineral Ridge,
it being understood that counsel may rely as to matters of fact, to
the extent appropriate in the circumstances, on certificates of the
Vendor's, CRL's and Mineral Ridge's auditors and on certificates of
the Vendor, CRL and Mineral Ridge executed on behalf of the Vendor,
CRL and Mineral Ridge by a senior officer of the Vendor, CRL and
Mineral Ridge, as the case may be.
The foregoing conditions are inserted for the exclusive benefit of the Purchaser
and VGC and may be waived in whole or in part by the Purchaser and VGC at any
time.
PART 6
SURVIVAL OF REPRESENTATIONS AND INDEMNITY
6.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
The representations, warranties and covenants of each of the parties
hereto contained in this Agreement shall survive the Closing and the completion
of the transactions contemplated hereby and shall continue in full force and
effect for a period of two years thereafter.
6.2 INDEMNITY
In addition to any other rights or remedies the Purchaser and VGC have
under this Agreement, each of the Vendor and CRL shall indemnify and save the
Purchaser and VGC harmless from and against all losses, costs, damages,
expenses, penalties and liabilities suffered or incurred by the Purchaser or VGC
by reason of:
(a) a breach of any representation or warranty, covenant or agreement in
this Agreement by the Vendor or CRL; and
(b) without limiting the generality of the foregoing, any Liability,
disclosed or undisclosed, known or unknown, determined or
undetermined, which was created or existing or arose out of acts or
omissions prior to the Closing in connection with the Assets, the
Business or the Purchased Shares which the Purchaser or VGC is
required to discharge, to the extent such Liability has not been
incurred or created by the Purchaser or VGC after the Closing.
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PART 7
GENERAL
7.1 TIME AND PLACE OF CLOSING
The Closing shall take place at 9:00 a.m. (Vancouver time) on the
Closing Date at the offices of DuMoulin Black in Vancouver, British Columbia, or
at such other place or date as may be mutually agreed by the parties.
7.2 NOTICES
Any notice or other communication which is required or permitted to be
given pursuant to any provision of this Agreement shall be in writing, delivered
personally, by registered mail or by telecopy, and addressed as follows:
(a) in the case of a notice or other communication to the Vendor or CRL:
Cornucopia Resources Ltd.
Xxxxx 000, Xxxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
Xxxxxx
Attention: Xxxxxx X.X. Xxxxxxxx
Telecopier Number: (000) 000-0000
with a copy to:
DuMoulin Black
00xx Xxxxx, 000 Xxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxxxx X. Xxxxxx
Telecopier Number: (000) 000-0000
(b) in the case of a notice or other communication to the Purchaser or
VGC:
Vista Gold Corp.
Suite 3000, 000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx
X.X.X. 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopier Number: (000) 000-0000
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with a copy to:
Xxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxxxx X. Xxxxxx
Telecopier Number: (000) 000-0000
or such other address or telecopier number as a party may, from time to time,
advise the other parties hereto by notice in writing given in accordance with
the foregoing. The date of receipt of any such notice shall be deemed to be the
date of delivery thereof, if delivered, and on the day of telecopying, if
telecopied, provided such day is a Business Day and, if not, on the first
Business Day thereafter.
7.3 CONFIDENTIALITY AND DISCLOSURE
(a) Except as may be required by applicable laws, any information
concerning any of the Vendor, the Purchaser, CRL, VGC or Mineral Ridge
and their respective affiliates disclosed to the other parties to this
Agreement or their representatives, which has not been publicly
disclosed, shall be kept strictly confidential by them and shall not
be disclosed or used by the recipients thereof whether or not the
Closing occurs until publicly disclosed by the party to which such
information relates. Further, it is agreed and acknowledged that all
such information is being disclosed solely for the purpose of
completing the transactions contemplated by this Agreement and shall
not be used for any other purpose. In the event that the Closing does
not occur, all documents, if any, of a confidential nature, delivered
to the Vendor, the Purchaser, CRL or VGC or their respective
representatives and any copies thereof shall be immediately returned
to the party to which such information relates.
(b) Except as may be required under applicable laws, no press releases or
material change reports relating to the transactions contemplated
hereby shall be issued by any party to this Agreement, nor shall the
terms of this letter be disclosed to third parties other than the
representatives of the parties, without the mutual consent of the
other parties. All necessary press releases and material change
reports required form shall be submitted for approval by the party
preparing such press release or material change report to the other
parties prior to the filing thereof in accordance with applicable
laws.
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7.4 DISPUTE RESOLUTION AND ARBITRATION
In the event of a dispute under or related to this Agreement, the
parties agree to negotiate diligently and in good faith the satisfactory
resolution of such dispute. Failing such resolution, the dispute shall be
resolved by binding arbitration pursuant to the COMMERCIAL ARBITRATION ACT
(British Columbia). Submission to arbitration shall be to a single arbitrator
appointed by agreement between the Purchaser and the Vendor within 10 days after
either party gives notice to the other specifying the matter to be submitted to
arbitration. Failing the appointment of an arbitrator within such 10 days the
arbitrator may be appointed in the manner provided under section 17 of the
COMMERCIAL ARBITRATION ACT (British Columbia). The arbitration shall take place
in the City of Vancouver, British Columbia.
7.5 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the Province of British Columbia and the laws of Canada applicable
therein and each of the parties irrevocably attorns to the jurisdiction of the
courts of British Columbia.
7.6 BINDING EFFECT
This Agreement shall be binding upon and shall enure to the benefit of
the parties hereto and their respective successors and permitted assigns.
7.7 TIME OF ESSENCE
Time is of the essence of this Agreement.
7.8 ASSIGNMENT
Subject to the express provisions of this Agreement, neither of the
parties may assign his or its rights or obligations under this Agreement without
the prior written consent of the other, such consent not to be unreasonably
withheld.
7.9 FURTHER ASSURANCES
Each of the parties, upon the request of any other party, whether
before or after the Closing, shall do, execute, acknowledge and deliver or cause
to be done, executed, acknowledged or delivered all such further acts, deeds,
documents, assignments, transfers, conveyances and assurances as may be
reasonably necessary or desirable to effect complete consummation of the
transactions contemplated by this Agreement.
7.10 EXPENSES
The Vendor and the Purchaser shall each pay their respective expenses
incurred in connection with this Agreement and the transactions contemplated by
this Agreement.
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7.11 ENTIRE AGREEMENT
The terms and provisions contained in this Agreement constitute the
entire agreement between the parties pertaining to the subject matter hereof and
supersede all prior agreements, understandings, negotiations and discussions,
whether oral or written, between the parties with respect to the subject matter
hereof.
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7.12 COUNTERPARTS AND FACSIMILE
This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument. This Agreement and any counterpart
thereof may be executed by telecopy and when delivered shall be deemed to be an
original.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day
and year first above written.
CORNUCOPIA RESOURCES INC.
Per: (SIGNED)
_________________________________
Authorized Signatory
Per: _________________________________
Authorized Signatory
CORNUCOPIA RESOURCES LTD.
Per: (SIGNED)
_________________________________
Authorized Signatory
Per: _________________________________
Authorized Signatory
VISTA GOLD HOLDINGS INC.
Per: (SIGNED)
_________________________________
Xxxxxxx X. Xxxxxxxx,
President
VISTA GOLD CORP.
Per: (SIGNED)
_________________________________
Xxxxxxx X. Xxxxxxxx,
President and Chief Executive Officer
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