EXHIBIT 4.14
, dated July 20, 2005, between
Canaccord Capital Corporation and Baradero Resources Limited,
REVERSE TAKEOVER
THIS AGREEMENT dated for reference July 20, 2005, is made:
AMONG:
CANACCORD CAPITAL CORPORATION, a member of the TSX Venture
Exchange Inc. (the "Exchange"), of 0000-000 Xxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Member")
AND
BARADERO RESOURCES LIMITED, a company continued under the laws
of British Columbia, of 1305 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Issuer")
AND
CENTRASIA MINING CORP., a company continued under the laws of
British Columbia, of 000-0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
(the "Target")
WHEREAS:
A. The Issuer's common shares are listed on the Exchange;
B. The Issuer and certain shareholders of the Target have agreed that the
Issuer will acquire all or substantially all of the issued and outstanding
shares of the Target (the "Transaction");
C. The Transaction will constitute a reverse take-over of the Issuer
within the meaning of the Exchange Reverse Take-Over Policies (as defined
herein);
D. Pursuant to the Exchange Sponsorship Policies (as defined herein) the
Exchange requires that the Issuer obtain a member to act as its sponsor within
the meaning of the Exchange Sponsorship Policies as a condition of approval of
the Transaction;
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THE PARTIES to this Agreement therefore agree:
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
(a) "Applicable Legislation" means the SECURITIES ACT or
comparable legislation in each of the Reporting Provinces, the
regulations and rules made under that legislation and all
administrative policy statements, blanket orders, notices,
directions and rulings issued by the Commissions;
(b) "Approval Date" means the date the Exchange gives notice of
approval of the Transaction;
(c) "Business" means the corporate undertaking of the Issuer on
completion of the Transaction, which will consist
substantially of the corporate undertaking of the Target as
presently constituted;
(d) "Commissions" means the securities commissions or securities
regulatory authorities in the Reporting Provinces;
(e) "Exchange" means the TSX Venture Exchange;
(f) "Exchange Policy" means a policy, as amended, contained in the
Exchange's Corporate Finance Manual;
(g) "Exchange Reverse Take-Over Policies" means the Exchange
Policies pertaining to reverse take-overs;
(h) "Exchange Sponsorship Policies" means the Exchange Policies
pertaining to sponsorship;
(i) "Issuer" has the meaning defined above, and includes any
wholly-owned or partially-owned subsidiaries of the Issuer
(and will include the Target upon completion of the
Transaction);
(j) "Material Change" has the meaning defined in the Applicable
Legislation;
(k) "Member" has the meaning defined above;
(l) "Reports" means any business plans, engineering reports,
geological reports, technical reports, valuation opinions or
similar documents concerning the Business;
(m) "Reporting Provinces" means the provinces of British Columbia
and Alberta;
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(n) "Shares" means common shares in the capital of the Issuer;
(o) "Target" has the meaning assigned above; and
(p) "Transaction" has the meaning defined in Recital B.
2. INVESTIGATION BY MEMBER
2.1 The Issuer and the Target must each at all times during normal business
hours afford full access to the Member and its authorized representatives to all
of their respective properties, books, contracts, commitments and other
corporate records, and must furnish the Member with copies thereof and such
other information concerning the Business as the Member may request, in order
that the Member may undertake an investigation of the Business.
2.2 The Issuer and the Target must each forthwith provide the Member with
their most recent audited financial statements, and unaudited financial
statements, prepared as of a date satisfactory to the Member.
2.3 The Issuer or Target, as the case may be, must forthwith provide the
Member with:
(a) a draft disclosure document appropriate to the Transaction and
any financing which may be contemplated to be undertaken
concurrently therewith (e.g., a prospectus, filing statement
or management proxy circular);
(b) fully completed and executed personal information forms in
Form 2A (as found in the Exchange's Corporate Finance Manual)
for all proposed directors and officers of the Issuer on
completion of the Transaction;
(c) copies of all Reports which are available, in final form or in
draft if such Reports have not been finalized; and
(d) copies of all material contracts to which it is a party.
2.4 Upon conclusion of its investigation, the Member must give notice to
the Issuer whether it has decided to act as the Issuer's sponsor with regard to
the Transaction.
3. SPONSORSHIP DUTIES
3.1 The Member will complete the preliminary due diligence required by the
Member to determine whether it will act as sponsor with regard to the
transaction (the "Preliminary Due Diligence").
3.2 Upon completing the Preliminary Due Diligence, the Member will either:
(a) give notice to the Issuer that it has decided not to act as
the Issuer's sponsor with regard to the Transaction (the
"Rejection Notice"); or
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(b) provide the Issuer with notice indicating to the Issuer that
it has decided to act as the Issuer's sponsor with regard to
the Transaction, subject to the Member determining that it is
satisfied with the results arising from the remainder of the
Member's due diligence.
3.3 Upon accepting the sponsorship role, the Member will undertake the
sponsorship duties prescribed by the Exchange Sponsorship Policies relating to
the sponsorship (the "Sponsorship Duties") and will execute such Sponsorship
Duties until the close of business on the Approval Date, unless this
responsibility is terminated earlier by either the Member or the Issuer in
accordance with the Sections of this Agreement dealing with termination (the
"Sponsorship Term").
3.4 The Member, in its sole discretion may hire any consultant, expert or
business valuator (the "Consultant") which the Member deems necessary in order
to perform the due diligence required by the Exchange Sponsorship Policies and
the Issuer agrees to pay all reasonable fees and expenses incurred by the Member
in connection with the Consultant.
3.5 This Agreement is effective from the reference date of this Agreement
until such time it is terminated, either by the fulfilment of all duties and
obligations of each of the parties hereunder, by the issuance of a Rejection
Notice by the Member or pursuant to the Sections of this Agreement which deal
with termination of this Agreement.
3.6 Regardless of the manner in which this Agreement is terminated, the
obligations of the Issuer outlined in the Sections of this Agreement dealing
with the payment of the Fee and Expenses, the Indemnities and the Right of First
Refusal (all of which are defined in this Agreement) will continue in full force
until such time as these obligations are satisfied.
4. FEE
4.1 The Issuer will pay to the Member a fee of $35,000 (plus G.S.T.) (the
"Fee") in consideration of the Member acting as the Issuer's sponsor with regard
to the Transaction, payable:
(a) as to 50%, which portion will be non-refundable, upon
execution of this Agreement; and
(b) as to 50% upon provision by the Member of a preliminary
Sponsor Report (as defined in the Exchange Sponsorship
Policies) to the Exchange.
4.2 The Fee is subject to an increase to $50,000 plus G.S.T. if the
Exchange requires the Member to certify a disclosure document.
4.3 The Issuer will also pay the Member a monthly work fee (the "Work Fee")
of $5,000 per month plus G.S.T. commencing September 1, 2005 and continuing on a
monthly basis on the 1st of each successive month until the Member's services
are no longer required.
4.4 The Member's G.S.T. Number is 133567545.
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4.5 The Issuer's obligation to pay the Fee survives the termination of this
Agreement.
5. COVENANTS OF THE ISSUER AND THE TARGET
5.1 If, during the Sponsorship Term, a Material Change in the assets,
liabilities (contingent or otherwise), business, operations or capital of the
Issuer or the Target should occur, or is anticipated or threatened, the Issuer
or the Target, as the case may be, must promptly notify the Member, in writing,
of the full particulars of the change.
5.2 If the Issuer or the Target is not certain as to whether a Material
Change has occurred, the Issuer or the Target, as the case may be, must promptly
notify the Member, in writing of the full particulars of the event giving rise
to the uncertainty, and must consult with the Member as to whether such event
constitutes a Material Change.
5.3 During the Sponsorship Term, the Issuer and the Target must each
promptly provide the Member with copies of all Reports forthwith upon
preparation or receipt of the same.
5.4 During the Sponsorship Term, the Issuer must promptly notify the Member
of:
(a) any proposed Change of Business (as defined in the Exchange
Policies) of the Issuer;
(b) any proposed Fundamental Acquisition (as defined in the
Exchange Policies) of the Issuer;
(c) any proposed Change of Control (as defined in the Exchange
Policies) of the Issuer;
(d) any proposed Change of Management (as defined in the Exchange
Policies) of the Issuer;
(e) any other proposed transaction of the Issuer that constitutes
an element of a Reverse Take-Over (as defined in the Exchange
Policies); and
(f) any proposed sale or other disposition of any of the
outstanding shares in the capital of any subsidiaries wholly
or partially owned by the Issuer or the Target.
forthwith upon the proposal of such change, issuance, sale or other disposition.
5.5 During the Sponsorship Term, the Issuer must promptly notify the Member
of any proposed change to the constitution of the board of directors of the
Issuer, or to the membership of senior management of the Issuer. The Issuer must
promptly notify the Member, in writing, of any resignations, terminations or
departures of any of its directors or senior management.
5.6 During the Sponsorship Term, the Issuer must provide the Member with
copies of all financial statements, press releases, promotional materials,
material change reports, materials prepared in connection with the Issuer's
annual general meeting and any other general meetings of shareholders, annual
reports, and financial statements prepared by or for the Issuer, promptly after
their preparation or receipt.
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5.7 During the Sponsorship Term, the Issuer must, at least 10 business days
before the deadline, notify the Member of any circumstances where the Issuer
does not expect to comply with a filing deadline imposed by the Exchange or the
Commissions.
5.8 The Issuer and the Target must each at all times use their reasonable
best efforts to assist the Member in carrying out its Sponsorship Duties.
5.9 The Issuer acknowledges that it has appointed Xxxx XxXxxx as its
officer responsible for carrying out its obligations to the Member hereunder,
and agrees that the Member may direct and address all inquiries and submit all
notices hereunder, to the attention of Xxxx XxXxxx.
5.10 The Target acknowledges that it has appointed Xxxxxxx Xxxxxxxx as its
officer responsible for carrying out its obligations to the Member hereunder,
and agrees that the Member may direct and address all inquiries, and submit all
notices hereunder, to the attention of Xxxxxxx Xxxxxxxx.
5.11 Nothing in this Agreement is to be construed as a xxxxxx on the
discretion of the directors of the Issuer or the Target.
5.12 All information relating to the Issuer and the Target provided by the
Issuer and the Target to the Member must be directed to the corporate finance
department of the Member, and neither the Issuer nor the Target will disclose to
any other person associated with the Member any information relating to the
Issuer or the Target which is not publicly available.
6. ACKNOWLEDGEMENTS OF ISSUER AND TARGET
6.1 The Issuer and the Target each acknowledge that the Member has informed
the Issuer, the Target and their respective directors and management of their
responsibilities concerning continuous and timely disclosure under Applicable
Legislation, and in particular, without limitation, of the Issuer's
responsibility to issue a press release, and file a material change report, in
the event of a Material Change in the business, operations, assets or ownership
of the Issuer. The Issuer and the Target each further acknowledge in this regard
that they have been made aware by the Member of the services offered by
commercial news disseminators.
6.2 The Issuer and the Target each acknowledge that the Member has advised
the Issuer, the Target and their respective directors about the Exchange's
on-going requirements concerning the minimum distribution of Shares on
completion of the Transaction.
7. REPRESENTATIONS AND WARRANTIES OF THE ISSUER AND THE TARGET
7.1 The Issuer and the Target each severally warrant and represent to the
Member, and acknowledge that the Member has relied on such warranties and
representations in entering into this Agreement, that:
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(a) the responses in all personal information forms completed by
its directors and senior management personnel and to be
provided to the Member pursuant to this Agreement will be
accurate and complete;
(b) the descriptions of its assets and liabilities set out in its
balance sheets, including the notes thereto, to be provided to
the Member will be true and correct, will accurately and
fairly present its financial position and condition as at the
dates thereof, will reflect all liabilities (absolute,
accrued, contingent or otherwise) as at the dates thereof and
will be prepared in accordance with generally accepted
accounting principles, applied on a consistent basis;
(c) its statements of earnings, retained earnings and changes in
financial position, including the notes thereto, to be
provided to the Member will in each case accurately and fairly
present the results of operations for the periods covered
thereby and will be prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout such periods;
(d) its financial position as at the date hereof is no less
favourable than that disclosed in the most recent balance
sheets provided to the Member;
(e) the information concerning the Business which will be provided
to the authors of the Reports will be accurate, complete and
fair, and the Reports, to the best of its knowledge, will be
fair and accurate in all particulars;
(f) to the extent that they are required to do so, the authors of
the Reports will possess all of the qualifications required by
the Exchange and the Commissions of authors of such reports;
(g) the information contained in the sources and uses of funds
statements to be provided to the Member hereunder will be
accurate and complete;
(h) the execution of this Agreement does not and will not conflict
with, and does not and will not result in a breach of, or
constitute a default under, any agreement or instrument to
which it is a party, or by which it is bound, or the terms of
its incorporating documents;
(i) the execution of this Agreement has been authorized by all
necessary corporate action on its part;
(j) as of the date hereof:
(i) there has not been any Material Change in its assets,
liabilities or obligations (absolute, accrued,
contingent or otherwise);
(ii) there has not been any Material Change in its capital
or long-term debt;
(iii) there has not been any Material Change in its
business prospects, condition (financial or
otherwise) or the results of its operations;
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from those disclosed in the most recent financial statements
provided to the Member of which the Member has not been
notified;
(k) since the date of the most recent financial statements
provided to the Member, it has carried on business in the
ordinary course;
(l) it is duly registered and licensed to carry on business in the
jurisdictions which it carries on business or owns property;
(m) no order suspending the sale of or ceasing the trading in any
of its securities has been issued and not rescinded, revoked
or withdrawn by any securities commission, regulatory
authority or stock exchange in any jurisdiction, and no
proceedings for that purpose have been instituted or are
pending or are, to the knowledge of its directors or senior
management, contemplated or threatened by any securities
commission, regulatory authority or stock exchange; and
(n) no enquiry or investigation, formal or informal, in relation
to it or its directors or senior management, has been
commenced or threatened by any official or officer of any
securities commission, regulatory authority or stock exchange.
7.2 The Issuer represents and warrants to the Member, and acknowledges that
the Member has relied on such representations and warranties in entering into
this Agreement, that it has no subsidiaries.
7.3 The Target represents and warrants to the Member, and acknowledges that
the Member has relied upon such representations and warranties in entering into
this Agreement, that it has no subsidiaries.
7.4 The Issuer and the Target severally and respectively represent and
warrant that the representations and warranties of the Issuer and the Target set
forth herein will continue to be true and accurate throughout the term of this
Agreement, and the Issuer and the Target will promptly provide written notice to
the Member if the Issuer or Target become aware that any of their respective
representations or warranties set forth in the above Subsection is or becomes
not true and accurate.
8. INDEMNITIES
8.1 The Issuer will indemnify and save harmless the Member, and each
director, officer, employee or agent of the Member (collectively, the
"Indemnified Parties"), from and against all losses, claims, damages,
liabilities, costs or expenses caused by the Issuer, or incurred by the
Indemnified Party, arising or resulting from any breach by the Issuer of any of
the terms of this Agreement (the "Indemnities").
8.2 The Target will indemnify and save harmless the Indemnified Parties,
from and against all losses, claims, damages, liabilities, costs or expenses
caused by the Target, or incurred by the Indemnified Party, arising or resulting
from any breach by the Target of any of the terms of this Agreement.
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8.3 If any action or claim is brought against an Indemnified Party in
respect of which indemnity may be sought from the Issuer or the Target pursuant
to this Agreement, the Indemnified Party will promptly notify the Issuer or the
Target, as the case may be, in writing.
8.4 The Issuer or the Target, as the case may be, will assume the defence
of the action or claim, including the employment of counsel and the payment of
all expenses.
8.5 The Indemnified Party will have the right to employ separate counsel,
and the Issuer or the Target, as the case may be, will pay the fees and expenses
of such counsel.
8.6 The Indemnities provided for in this Section will not be limited or
otherwise affected by any other indemnity obtained by the Indemnified Party from
any other person in respect of any matters specified in this Agreement and will
continue in full force and effect until all possible liability of the
Indemnified Party arising out of this Agreement has been extinguished by the
operation of law.
8.7 If indemnification under this Agreement is found in a final judgment
(not subject to further appeal) by a court of competent jurisdiction not to be
available for reason of public policy, the Issuer, the Target and the
Indemnified Parties will contribute to the losses, claims, damages, liabilities
or expenses (or actions in respect thereof) for which such indemnification is
held unavailable in such proportion as is appropriate to reflect the relative
benefits to and fault of the Issuer and the Target, on the one hand, and the
Indemnified Parties on the other hand, in connection with the matter giving rise
to such losses, claims, damages, liabilities or expenses (or actions in respect
thereof). No person found liable for a fraudulent misrepresentation (within the
meaning of the Applicable Legislation) will be entitled to contribution from any
person who is not found liable for such fraudulent misrepresentation.
8.8 To the extent that any Indemnified Party is not a party to this
Agreement, the Member will obtain and hold the right and benefit of this Section
in trust for and on behalf of such Indemnified Party.
9. RIGHT OF FIRST REFUSAL
9.1 The Issuer will notify the Member of the terms of any equity financing
that it requires or proposes to obtain during the term of this Agreement and for
one year from the Approval Date (the "Notice"), and the Member will have the
right of first refusal to provide any such financing (the "Right of First
Refusal").
9.2 The Right of First Refusal must be exercised by the Member within 15
days following the receipt of the Notice (the "Exercise Period") by notifying
the Issuer that it will provide the financing on the terms set out in the
notice.
9.3 If the Member fails to give notice within the time provided for in the
Exercise Period, the Issuer will then be free to make other arrangements to
obtain the financing from another source on the same terms or on terms no less
favourable to the Issuer.
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9.4 The Member's Right of First Refusal will not terminate if, on receipt
of any notice from the Issuer under this Section, the Member fails to exercise
the right.
9.5 The Right of First Refusal granted under this Section survives the
termination of this Agreement and terminates either 12 months from the Approval
Date or 12 months from the termination date, whichever is earlier.
10. TERMINATION
10.1 The Member may terminate its Sponsorship Duties, resign as a sponsor
and terminate its obligations under this Agreement if:
(a) an adverse Material Change (actual, anticipated or threatened)
in the assets, liabilities (contingent or otherwise), business
operations or capital of the Issuer or the Target should
occur;
(b) any order is made suspending trading in the Shares on the
Exchange, or any order to cease or suspend trading in the
Shares or other securities of the Issuer or the Target is made
pursuant to any of the Applicable Legislation or is made by
any other regulatory authority, and is not rescinded, revoked
or withdrawn within 30 days of the making thereof;
(c) any enquiry or investigation (whether formal or informal) in
relation to the Issuer or the Issuer's or the Target's
directors or senior management, is commenced or threatened by
an officer or official of any securities regulatory authority
in Canada or by any officer or official of any other competent
authority;
(d) the Issuer or the Target are at any time in breach of any of
the material terms of this Agreement;
(e) the Issuer or the Target determines to make a Fundamental
Change (as defined in the Exchange Policy) to which the Member
has notified the Issuer in writing it objects;
(f) the Member, as a result of conducting the due diligence
required by the Exchange Sponsorship Policies, determines that
it is not satisfied with the results of such due diligence; or
(g) the Member determines that any representation or warranty made
by the Issuer or the Target in this Agreement is false or has
become false.
10.2 The Member may give notice of any termination by notice in writing to
the Issuer and the Target. Notwithstanding the giving of any notice of
termination under this Agreement, the Issuer will promptly after the notice pay
all reasonable expenses and fees as provided for in the Sections of this
Agreement dealing with the Fee and Expenses of the Member and incurred up to the
time of the giving of such notice.
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10.3 The Issuer and the Target acknowledge and agree that, if the Member
terminates this Agreement, the Member will comply with all applicable provisions
of the Exchange Sponsorship Policies relating to termination, including the
filing of a letter explaining the termination with the Exchange. In such event,
the Member may disclose to the Exchange such information concerning the Issuer
or the Target as the Member in its sole discretion considers to be necessary to
fulfill its obligations to the Exchange and the requirements of the Exchange
Sponsorship Policies, including information which the Issuer or the Target has
disclosed to the Member on a privileged or confidential basis.
10.4 The rights of the Member to terminate its obligations under this
Agreement are in addition to such other remedies as it may have in respect of
any default, misrepresentation, act or failure of the Issuer or the Target in
respect of any of the matters contemplated by this Agreement.
10.5 The Issuer or the Target may dismiss the Member as its sponsor upon
giving 10 days written notice to the Member, however the obligations of the
Issuer or the Target outlined in the Sections of this Agreement dealing with the
payment of the Fees and Expenses, the Indemnities and the Right of First Refusal
will continue in full force until such time as these obligations are satisfied.
11. EXPENSES OF MEMBER
11.1 The Issuer will pay all of the expenses reasonably incurred by the
Member in connection with the transactions contemplated by this Agreement and
the Sponsorship Duties, including, without limitation, the fees and expenses of
any solicitors retained by the Member in connection with the transactions
contemplated by this Agreement and the Sponsorship Duties and the fees and
expenses of any Consultant retained by the Member in connection with the
performance of its Sponsorship Duties (the "Expenses").
11.2 The Member acknowledges the receipt of $10,000 as a deposit against
such Expenses.
11.3 The Issuer will pay the Expenses even if the transactions contemplated
by this Agreement are not completed or this Agreement is terminated, unless the
failure of acceptance or completion or the termination is the result of a breach
of this Agreement by the Member.
11.4 The Member may, from time to time, render accounts for the Expenses to
the Issuer for payment on the dates set out in such accounts.
11.5 The Issuer's covenant to pay the Expenses shall survive termination of
this Agreement.
12. NOTICE
12.1 Any notice under this Agreement will be given in writing and must be
delivered, sent by fax or mailed by prepaid post and addressed to the party to
which notice is to be given at the address indicated above, or at another
address designated by such party in writing.
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12.2 If notice is sent by fax or is delivered, it will be deemed to have
been given at the time of transmission or delivery.
12.3 If notice is mailed, it will be deemed to have been received 48 hours
following the date of mailing of the notice.
12.4 If there is an interruption in normal mail service due to strike,
labour unrest or other cause at or prior to or within 48 hours of the time a
notice is mailed the notice will be sent by fax or will be delivered.
12.5 All notices to the Issuer or the Target shall be sent to the attention
of Xxxx XxXxxx and Xxxxxxx Xxxxxxxx, respectively.
13. TIME
Time is of the essence of this Agreement and will be calculated in accordance
with the provisions of the INTERPRETATION ACT (British Columbia).
14. LANGUAGE
Wherever a singular or masculine expression is used in this Agreement, that
expression is deemed to include the plural, feminine or the body corporate where
required by the context.
15. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and supersedes any other
previous agreement between the parties with respect to the Transaction and there
are no other terms, conditions, representations or warranties whether express,
implied, oral or written by the Member or the Agent.
16. COUNTERPARTS
This Agreement may be executed in two or more counterparts and delivered by fax.
Each executed counterpart will be deemed to be an original and all of them will
constitute one agreement, effective as of the reference date given above.
17. HEADINGS
The headings in this Agreement are for convenience of reference only and do not
affect the interpretation of this Agreement.
18. ENUREMENT
This Agreement enures to the benefit of and is binding on the parties to this
Agreement and their successors.
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19. LAW
This Agreement is governed by the law of British Columbia, and the parties
hereto irrevocably attorn and submit to the jurisdiction of the courts of
British Columbia with respect to any dispute related to this Agreement.
CANACCORD CAPITAL CORPORATION
Per: /s/ Xxxxx Xxxxx
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Authorized Signatory
Per:
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Authorized Signatory
BARADERO RESOURCES LIMITED
Per: /s/ Xxxx XxXxxx
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Authorized Signatory
Per:
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Authorized Signatory
CENTRASIA MINING CORP.
Per: /s/ Xxxxxxx Xxxxxxxx
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Authorized Signatory
Per:
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Authorized Signatory
