ARRANGEMENT AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 28th day of February, 0000,
X X X X X X X:
TASEKO MINES LIMITED, a company incorporated under the laws of British Columbia
("Taseko")
- and -
GIBRALTAR ENGINEERING SERVICES LIMITED, a company incorporated under the laws of
British Columbia
("GESL")
- and -
GIBRALTAR REFINERY (2002) LTD., a company incorporated under the laws of British
Columbia
("Gibraltar 2002")
- and -
TASEKO RESOURCES INC., a company incorporated under the laws of British Columbia
("Taseko Resources")
- and -
CONCENTRATED EXPLORATION LTD., a company incorporated under the laws of British
Columbia
("Concentrated Exploration")
- and -
CONCENTRATED EXPLORATION 2000 LTD., a company incorporated under the laws of
British Columbia
("CE 2000")
(Xxxxxxxxx 0000, Xxxxxx Resources, Concentrated Exploration and CE 2000 are
herein referred to as the "Taseko Subsidiaries")
- and -
GIBRALTAR REFINERY (2002) NO. 2 LTD., a company incorporated under the laws of
British Columbia
("Gibraltar 2002 No. 2")
WHEREAS GESL owns the GESL Business, as hereinafter defined;
AND WHEREAS GESL is wholly owned by Taseko, which indirectly holds approximately
38% of GESL's common shares through its wholly owned subsidiary Gibraltar 2002,
and Xxxxxx X. Xxxxxxx ("Xxxxxxx"), who holds approximately 62% of GESL's common
shares;
AND WHEREAS Taseko wishes to purchase that portion of the GESL Business which it
does not already own;
AND WHEREAS GESL has agreed to undergo a plan of arrangement to provide for
Taseko's buyout of Xxxxxxx under the Plan of Arrangement and to allow for the
consolidation of Taseko's assets by providing for the dissolution of Gibraltar
2002 No. 2, a wholly-owned subsidiary of GESL, GESL's own dissolution and for
the dissolution of the Taseko Subsidiaries.
THIS AGREEMENT WITNESSES THAT in consideration of the respective covenants and
agreements herein contained, the parties hereto covenant and agree as follows:
ARTICLE 1.
INTERPRETATION
1.1 DEFINITIONS
In this Agreement, unless there is something in the subject matter or context
which is inconsistent therewith, the following terms shall have the following
meanings, respectively:
1.1.1 "ACT" means the COMPANY ACT (British Columbia), R.S.B.C. 1996, c.62,
including all regulations made thereunder, as now in effect and as may be
amended from time to time prior to the Effective Date;
1.1.2 "AFFILIATE" has the meaning ascribed thereto in the Act;
1.1.3 "APPROPRIATE REGULATORY APPROVALS" means those sanctions, rulings,
consents, orders, exemptions, permits and other approvals (including the lapse,
without objection, of a prescribed time under a statute, rule or regulation that
states that a transaction may be implemented if a prescribed time lapses
following the giving of notice without an objection being made) of Governmental
Entities, regulatory agencies or self-regulatory organizations;
1.1.4 "ARRANGEMENT" means a plan of arrangement under Sections 252, 253 and 254
of the Act on the terms and conditions set forth in the Plan of Arrangement and
any amendment, variation, or supplement thereto, giving effect to the
transactions described in Section 2.1;
1.1.5 "BUSINESS DAY" means any day, other than a Saturday, Sunday or a statutory
holiday in the province of British Columbia, on which banks are open for
business in the city of Vancouver;
1.1.6 "CALL OPTION AGREEMENT" means the call option agreement dated December 27,
2002 pursuant to which Xxxxxxx granted Taseko an option to purchase Xxxxxxx'x
indirect interest in the GESL Business;
1.1.7 "CIRCULAR" means the notice of the GESL Meeting and accompanying
management information circular, including all schedules thereto, to be sent to
GESL Shareholders in connection with the GESL Meeting;
1.1.8 "COMPETING TRANSACTION" means an offer or a proposal made to GESL in
writing and duly authorized by the board of directors of the Person making the
offer or proposal (i) to purchase or otherwise acquire, directly or indirectly
(including by means of a transaction described in clause (iv) below), all of the
GESL Shares or all or substantially all of the assets of GESL, (ii) that
provides in the good faith opinion of the Board of Directors after consultation
with GESL's investment advisor, for a value per GESL Share greater than the
value per GESL Share contemplated by this Agreement, (iii) that, to the extent
it offers cash consideration, is fully financed (subject to usual terms and
conditions on the drawing of such financing), (iv) is made or proposed to be
made by means of a take-over bid, amalgamation, plan of arrangement, business
combination, sale of assets or similar transaction, (v) with conditions no more
beneficial, taken as a whole, to the Person proposing or making the offer than
those contemplated by this Agreement for the benefit of Taseko, and (vi) which
the Board of Directors determines in good faith to be more favourable to the
GESL Shareholders from a financial point of view than the transaction
contemplated by this Agreement, having regard to all circumstances including
income tax considerations under such offer or proposal, and which the Board of
Directors intends to recommend to the GESL Shareholders;
1.1.9 "COURT" means the Supreme Court of British Columbia;
1.1.10 "XXXXXXX" means Xxxxxx X. Xxxxxxx;
1.1.11 "EFFECTIVE DATE" means the date on which a certified copy of the Final
Order is accepted for filing under section 252 of the Act by the Registrar;
1.1.12 "EFFECTIVE TIME" means 12:01 a.m. (Vancouver, British Columbia time) on
the Effective Date;
1.1.13 "EXCHANGE RATIO" means an exchange where one GESL Share is exchanged for
2.333333 Taseko Shares;
1.1.14 "EXCLUDED SHAREHOLDERS" means, in respect of GESL, Taseko and its
Affiliates and any other GESL Shareholder that is excluded from casting a vote
pursuant to Section 252(8) of the Act;
1.1.15 "FINAL ORDER" means the final order of the Court approving the
Arrangement, as such order may be amended at any time prior to the Effective
Date;
1.1.16 "GAAP" means, for those generally accepted accounting principles stated
in the Handbook of the Canadian Institute of Chartered Accountants, such
principles so stated;
1.1.17 "GESL BUSINESS" means all of the business, assets, both tangible and
intangible, goodwill and undertakings of GESL acquired pursuant to a dissolution
agreement of Gibraltar Engineering Services Limited Partnership dated February
24, 2003;
1.1.18 "GESL MEETING" means the special meeting of GESL Shareholders (including
any adjournment thereof) that is to be convened as provided by the Interim Order
to consider and, if deemed advisable, to approve the Arrangement;
1.1.19 "GESL SHAREHOLDER" means a registered holder of GESL Shares, from time to
time, and "GESL SHAREHOLDERS" means all of such holders;
1.1.20 "GESL SHARES" means common shares in the capital of GESL;
1.1.21 "GOVERNMENTAL ENTITY" means any: (a) multinational, federal, provincial,
state, regional, municipal, local or other governmental or public department,
central bank, court, tribunal, arbitral body, commission, board, bureau or
agency, domestic or foreign; (b) any subdivision, agent commission, board, or
authority of any of the foregoing; or (c) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under or for the
account of any of the foregoing;
1.1.22 "INTERIM ORDER" means the interim order of the Court issued in respect of
the Arrangement, as contemplated by Section 2.1, as such order may be amended,
supplemented or varied by the Court;
1.1.23 "LAWS" means all laws, statutes, codes, ordinances, decrees, rules,
regulations, by-laws, statutory rules, principles of law, published policies and
guidelines, judicial or arbitral or administrative or ministerial or
departmental or regulatory judgments, orders, decisions, rulings or awards,
including general principles of common and civil law, and terms and conditions
of any grant of approval, permission, authority or license of any Governmental
Entity, statutory body (including the TSX Venture Exchange) or self-regulatory
authority, and the term "applicable" with respect to such Laws and in the
context that refers to one or more Persons, means that such Laws apply to such
Person or Persons or its or their business, undertaking, property or securities
and emanate from a Person having jurisdiction over the Person or Persons or its
or their business, undertaking, property or securities;
1.1.24 "MATERIAL ADVERSE CHANGE" means, in relation to any corporation, any
change (or any condition, event or development involving a prospective change)
in the business, operations, affairs, assets, liabilities (including any
contingent liabilities that may arise through outstanding, pending or threatened
litigation or otherwise), capitalization, financial condition, licenses,
permits, rights or privileges of the corporation or any of its Subsidiaries
which would reasonably be expected to materially and adversely affect the
corporation and its Subsidiaries, taken as a whole;
1.1.25 "MATERIAL FACT" has the meaning ascribed thereto in the Securities Act;
1.1.26 "MEETING DATE" means any date on which the GESL Meeting occurs;
1.1.27 "OPTION" means the call option granted by Xxxxxxx to Taseko to purchase
Xxxxxxx'x indirect interest in the GESL Business pursuant to the Call Option
Agreement;
1.1.28 "PERSON" includes any individual, firm, partnership, joint venture,
venture capital fund, association, trust, trustee, executor, administrator,
legal personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, Governmental Entity, syndicate or
other entity, whether or not having legal status;
1.1.29 "PLAN OF ARRANGEMENT" means the plan of arrangement substantially in the
form attached as Schedule "A", as the same may be supplemented and amended from
time to time in accordance with the terms thereof;
1.1.30 "REGISTRAR" means the British Columbia Registrar of Companies or other
duly appointed person performing duties as registrar under the Act;
1.1.31 "SECURITIES ACT" means the Securities Act (British Columbia), as now in
effect and as it may be amended from time to time prior to the Effective Date;
1.1.32 "SUBSIDIARY" has the meaning ascribed thereto in the Securities Act;
1.1.33 "TASEKO SHARES" means common shares in the capital of Taseko issued in
exchange for the GESL Shares pursuant to the Plan of Arrangement;
1.1.34 "TASEKO SUBSIDIARIES" means Taseko Resources, Gibraltar 2002,
Consolidated Exploration and CE 2000;
1.1.35 "TAX" and "TAXES" means, with respect to any entity, all income taxes
(including any tax on or based upon net income, gross income, income as
specially defined, earnings, profits or selected items of income) and all
capital taxes, gross receipts taxes, environmental taxes, sales taxes, use
taxes, AD VALOREM taxes, value added taxes, transfer taxes, franchise taxes,
license taxes, withholding taxes, payroll taxes, employment taxes, Canada or
Quebec Pension Plan premiums, excise, severance, social security premiums,
workers' compensation premiums, unemployment insurance or compensation premiums,
stamp taxes, occupation taxes, premium taxes, property taxes, windfall profits
taxes, alternative or add-on minimum taxes, goods and services tax, customs
duties or other taxes, fees, imports, assessments or charges of any kind
whatsoever, together with any interest and any penalties or additional amounts
imposed by any taxing authority (domestic or foreign) on such entity, and any
interest, penalties, additional taxes and additions to tax unopposed with
respect to the foregoing, and any liability for the payment of any amount of the
type described in the immediately preceding clause of another entity; and
1.1.36 "TAX RETURNS" means all returns, declarations, reports, information
returns and statements required to be filed with any taxing authority relating
to Taxes (including any attached schedules), including, without limitation, any
information return, claim for refund, amended return and declaration of
estimated Tax.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Agreement into Articles, sections, and other portions and
the insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation hereof. Unless otherwise indicated,
all references to an "Article" or "Section" followed by a number and/or a letter
refer to the specified Article or Section of this Agreement. The terms "this
Agreement", "hereof", "herein" and "hereunder" and similar expressions refer to
this Agreement (including the Schedules hereto) and not to any particular
Article, Section or other portion hereof and include any agreement or instrument
supplementary or ancillary hereto.
1.3 CURRENCY
All sums of money referred to in this Agreement are expressed in Canadian
dollars.
1.4 NUMBER
Unless the context otherwise requires, words importing the singular shall
include the plural and VICE VERSA and words importing any gender shall include
all genders.
1.5 DATE FOR ANY ACTION
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.
1.6 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties hereto
pertaining to the terms of the Arrangement and ancillary arrangements.
ARTICLE 2.
THE ARRANGEMENT
2.1 TERMS OF ARRANGEMENT
GESL, Gibraltar 2002 No. 2 and the Taseko Subsidiaries agree, as soon as
reasonably practicable, to apply to the Court pursuant to sections 252, 253 and
254 of the Act for the interim order providing for, among other things:
2.1.1 the calling and holding of the GESL Meeting for the purpose of considering
and approving the Arrangement pursuant to which the existing GESL Shares shall
be exchanged for Taseko Shares based on the Exchange Ratio and pursuant to
Section 85.1 of the INCOME TAX ACT (Canada); and
2.1.2 upon approval of the Arrangement by the GESL Shareholders, the dissolution
of each of GESL, Gibraltar 2002 No. 2 and the Taseko Subsidiaries to facilitate
the reconstruction of Taseko's corporate structure to consolidate its assets by
dissolving certain of its wholly owned subsidiaries.
If approval by the GESL Shareholders is obtained, GESL, Gibraltar 2002 No. 2 and
the Taseko Subsidiaries will promptly thereafter take the necessary steps to
submit the Arrangement to the Court and apply for a Final Order of the Court
approving the Arrangement.
2.2 IMPLEMENTATION STEPS BY GESL
GESL covenants in favour of Taseko that GESL shall:
2.2.1 convene and hold the GESL Meeting not later than April 14, 2003, or in the
event that the GESL Shareholders agree to waiver notice of the GESL Meeting not
later than April 14, 2003, for the purpose of considering and voting on the Plan
of Arrangement (and for any other proper purpose as may be set out in the notice
for such meeting which is acceptable to Taseko, acting reasonably);
2.2.2 solicit the GESL Shareholders to waive notice of the GESL Meeting and to
hold the GESL Meeting as soon as reasonably practicable thereafter;
2.2.3 subject to obtaining the Final Order, as soon as reasonably practicable
thereafter and subject to the satisfaction or waiver of the other conditions
herein contained in favour of each party, file the Final Order with the
Registrar, together with such other documents as may be required under the Act
to give effect to the Arrangement;
2.2.4 permit Taseko and its counsel to review and comment upon drafts of all
material to be filed with the Court in connection with the Arrangement and
provide counsel to Taseko on a timely basis with copies of any notice of
appearance and evidence served on GESL or its counsel in respect of the
application for the Final Order or any appeal therefrom and of any notice
(written or oral) received by GESL indicating any intention to appeal the Final
Order; and
2.2.5 not file any material with the Court in connection with the Arrangement or
serve any such material, and not agree to modify or amend any materials so filed
or served, except with Taseko's prior written consent (such consent not to be
unreasonably withheld).
2.3 INTERIM ORDER
The Interim Order shall provide:
2.3.1 for the class of Persons to whom notice is to be provided in respect of
the Arrangement and the GESL Meeting and for the manner in which such notice is
to be provided;
2.3.2 that the requisite GESL Shareholder approval shall be 75% of the votes
cast by GESL Shareholders and by a majority of the GESL Shareholders, other than
the Excluded Shareholders; and
2.3.3 that, in all other respects, the terms, restrictions and conditions of the
memorandum and articles of GESL, including quorum requirements and all other
matters, shall apply in respect of the GESL Meeting.
2.4 GESL INFORMATION CIRCULAR
GESL, Gibraltar 2002 No. 2, Taseko and the Taseko Subsidiaries shall use
commercially reasonable efforts to prepare the Circular together with any other
documents required by the Securities Act or other applicable Laws in connection
with the Arrangement and GESL shall cause the Circular and other documentation
required in connection with the GESL Meeting to be sent to each GESL Shareholder
(and other Person) and filed as required by the Interim Order or applicable Laws
as soon as reasonably practicable, provided that the Circular and other
documentation required in connection with the Arrangement shall not be sent,
except with Taseko's prior written consent (such consent not to be unreasonably
withheld).
2.5 SECURITIES AND CORPORATE COMPLIANCE
Taseko shall use commercially reasonable efforts to obtain all orders required
from the applicable securities authorities to permit the issuance and first
resale of the Taseko Shares to be issued pursuant to the Arrangement without the
qualification with, or the approval of, or the filing of any document including
any prospectus or similar document or the taking of any proceeding with, or the
obtaining of any further order, ruling or consent from, any Governmental Entity
or regulatory authority under applicable securities Laws or pursuant to the
rules and regulations of any regulatory authority administering such Laws, or
the fulfilment of any other legal requirement in any such jurisdiction (other
than, with respect to such first resales, any restrictions on transfer by reason
of, among other things, a holder being a "control person" of Taseko for purposes
of Canadian provincial or territorial securities Laws).
2.6 PREPARATION OF FILINGS
2.6.1 GESL, Gibraltar 2002 No. 2, Taseko and the Taseko Subsidiaries shall
cooperate in:
2.6.1.1 the preparation of any application for the Interim Order and the Final
Order and the preparation of any other documents reasonably deemed by GESL,
Gibraltar 2002 No. 2, Taseko or the Taseko Subsidiaries to be necessary to
discharge their respective obligations under applicable Laws in connection with
the Arrangement and all other matters contemplated by this Agreement; and
2.6.1.2 the taking of all such action as may be required under applicable Laws
in connection with the Arrangement and all other matters contemplated by this
Agreement.
2.6.2 Each of GESL, Gibraltar 2002 No. 2, Taseko and the Taseko Subsidiaries
shall furnish to the other all such information concerning it and its
shareholders as may be required to effect the actions described in Sections 2.4
and 2.5 and the foregoing provisions of this Section 2.6, and each covenants
that no information furnished by it in connection with such actions or otherwise
in connection with the consummation of the Arrangement will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in any such document or necessary in order to make any information so
furnished for use in any such document not misleading in the light of the
circumstances in which it is furnished or to be used.
2.6.3 Each of GESL, Gibraltar 2002 No. 2, Taseko and the Taseko Subsidiaries
shall promptly notify the other if at any time before the Effective Time it
becomes aware that the Circular or an application for any order referred to in
Section 2.6.1.1 contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading in light of the circumstances in
which they are made, or that otherwise requires an amendment or supplement to
the Circular or such application. In any such event GESL, Gibraltar 2002 No. 2,
Taseko and the Taseko Subsidiaries shall cooperate in the preparation of a
supplement or amendment to the Circular or such other document, as required and
as the case may be, and, if required, shall cause the same to be distributed to
their respective shareholders and/or filed with the relevant securities
regulatory authorities.
2.6.4 GESL shall ensure that the Circular complies with all applicable Laws and,
without limiting the generality of the foregoing, that the Circular does not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements contained
therein not misleading in light of the circumstances in which they are made
(other than with respect to any information relating to and provided by Taseko).
Without limiting the generality of the foregoing, GESL shall ensure that the
Circular provides GESL Shareholders with information in sufficient detail to
permit them to form a reasoned judgment concerning the matters to be placed
before them at the GESL Meeting.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF GESL
GESL and Gibraltar 2002 No. 2 jointly and severally represent and warrant to and
in favour of Taseko and the Taseko Subsidiaries as set forth in this Section 3.1
and acknowledge that Taseko and the Taseko Subsidiaries are relying upon such
representations and warranties in connection with the matters contemplated by
this Agreement; except, however, that Taseko and the Taseko Subsidiaries shall
not be entitled to rely on these representations and warranties which, at the
time of their putative reliance thereon, Taseko or the Taseko Subsidiaries know
or reasonably ought to have known to be false.
3.1.1 Incorporation and Qualification. Each of GESL and Gibraltar 2002 No. 2 is
a corporation duly incorporated, organized, validly subsisting and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Each of GESL and Gibraltar
2002 No. 2 is not in default under, or in violation of, any provision of its
memorandum or articles in any respect which is material and adverse to GESL or
Gibraltar 2002 No. 2, as the case may be.
3.1.2 Authority and Enforceability. Each of GESL and Gibraltar 2002 No. 2 has
the requisite corporate power and authority and has received all necessary
corporate approvals to enter into this Agreement and to complete the
transactions contemplated by this Agreement. This Agreement has been duly
authorized, executed and delivered by each of GESL and Gibraltar 2002 No. 2 and
constitutes a valid and binding obligation of each of GESL and Gibraltar 2002
No. 2 enforceable by Taseko and the Taseko Subsidiaries against each of GESL and
Gibraltar 2002 No. 2 in accordance with its terms, subject however, to
limitations with respect to enforcement imposed by law in connection with
bankruptcy, arrangement or similar proceedings, the equitable power of the
courts to stay proceedings before them and the execution of judgments and to the
extent that equitable remedies such as specific performance and injunction are
in the discretion of the court from which they are sought.
3.1.3 Capitalization. The authorized capital of GESL consists of 5,000,000
common shares. As of the date hereof, 4,906,004 common shares are issued and
outstanding. The issued and outstanding GESL Shares have been validly authorized
and issued, and are fully paid and non-assessable. There are no other issued and
outstanding shares in the capital of GESL. There are not now, and at the
Effective Date there will not be, any outstanding options, warrants or other
rights to purchase or acquire, or securities convertible into or exchangeable
for, any shares in the share capital of GESL and there are not now, and at the
Effective Date there will not be, any contract, commitment, agreement,
understanding, arrangement or restriction which requires GESL to issue, sell or
deliver any shares in its share capital or any securities or obligations
convertible into, or exchangeable for, any shares of its share capital. GESL has
no outstanding bonds, debentures, notes or other indebtedness the holders of
which have the right to vote (or that are convertible or exercisable into
securities having the right to vote) with GESL Shareholders or in respect of the
election of directors of GESL.
3.1.4 Subsidiaries. GESL owns all of the issued and outstanding shares of
Gibraltar 2002 No. 2. Other than Gibraltar 2002 No. 2, GESL has no subsidiaries.
3.1.5 No Conflict. The execution and delivery of this Agreement by GESL and
Gibraltar 2002 No. 2 does not and the performance of this Agreement by GESL and
Gibraltar 2002 No. 2 and the successful completion of the Arrangement does not
and will not:
(a) conflict with or violate the memorandum or articles GESL or Gibraltar 2002
No. 2, as the case may be; or
(b) conflict with or violate any law, rule, permit, order, judgment or decree
applicable to GESL or Gibraltar 2002 No. 2 or by which any of GESL's properties
is bound or affected, the conflict with which or violation of which would result
in a Material Adverse Change in respect of GESL.
3.1.6 Compliance. Neither GESL nor Gibraltar 2002 No. 2 nor any of its
Subsidiaries is in conflict with, or in default (including cross-defaults) or
violation of, in any respect which is material and adverse to GESL or Gibraltar
2002 No. 2, as the case may be:
(a) its memorandum or articles or equivalent organizational documents;
(b) any law, rule, order, permit, judgment or decree applicable to GESL or
Gibraltar 2002 No. 2 or by which any one of their respective properties is bound
or affected, which conflict default or violation would constitute a Material
Adverse Change;
(c) any credit agreement, note, bond, mortgage, indenture or other similar
contract, agreement or instrument relating to indebtedness for borrowed money
("GESL Debt Agreements") to which GESL or Gibraltar 2002 No. 2 is a party or by
which GESL or Gibraltar 2002 No. 2 or any of GESL's properties is bound or
affected; or
(d) any contract, agreement, lease, licence, permit, franchise or other
instrument or obligation (other than the GESL Debt Agreements) to which GESL or
Gibraltar 2002 No. 2 is a party or by which GESL or Gibraltar 2002 No. 2 or any
of GESL's properties is bound or affected which conflict, default or violation,
in any such case, would result in a Material Adverse Change or materially impede
the completion of the transactions contemplated in the Agreement.
In particular, and without limiting the generality of the foregoing, GESL and
Gibraltar 2002 No. 2 have complied with the provisions of all applicable
securities legislation, except for non-compliance that could not reasonably be
expected to result in a Material Adverse Change.
3.1.7 Severance or Termination. Neither GESL nor Gibraltar 2002 No. 2 is a party
to any written or oral agreement providing for severance or termination payments
to any director or officer as a result of the transactions contemplated by this
Agreement or which may be affected by a change of control of GESL or Gibraltar
2002 No. 2.
3.1.8 Disclosure. There is no fact which GESL has not disclosed to Taseko and of
which any of its officers, directors or members of senior management is aware
and which has resulted, or would reasonably be expected to result in a Material
Adverse Change to GESL or Gibraltar 2002 No. 2.
3.1.9 Tax Filings. GESL and Gibraltar 2002 No. 2 have each filed all tax returns
required to be filed by each of them and have each paid all taxes which are due
and payable, and have each made all accruals in its financial statements for
taxes payable by it for the current period.
3.1.10 Recommendation by the Board of Directors. The Board of Directors has
resolved to recommend that GESL Shareholders vote in favour of the Arrangement.
3.2 REPRESENTATIONS AND WARRANTIES OF TASEKO
Taseko and the Taseko Subsidiaries jointly and severally represent and warrant
to and in favour of GESL and Gibraltar 2002 No. 2 as set forth in this Section
3.2 and acknowledges that GESL and Gibraltar 2002 No. 2 are relying upon such
representations and warranties in connection with the matters contemplated by
this Agreement.
3.2.1 Incorporation and Qualification. Each of Taseko and its Subsidiaries is a
corporation duly incorporated, organized, validly subsisting and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted. Taseko and each of its
Subsidiaries is not in default under, or in violation of, any provision of its
memorandum or articles in any respect which is material and adverse to Taseko or
the particular Subsidiary, as the case may be.
3.2.2 Authority and Enforceability. Taseko and the Taseko Subsidiaries have the
requisite corporate power and authority and have received all necessary
corporate approvals to enter into this Agreement and to complete the
transactions contemplated by this Agreement. This Agreement has been duly
authorized, executed and delivered by Taseko and the Taseko Subsidiaries and
constitutes a valid and binding obligation of Taseko and the Taseko Subsidiaries
enforceable by GESL and Gibraltar 2002 No. 2 against Taseko and the Taseko
Subsidiaries in accordance with its terms, subject however, to limitations with
respect to enforcement imposed by law in connection with bankruptcy, arrangement
or similar proceedings, the equitable power of the courts to stay proceedings
before them and the execution of judgments and to the extent that equitable
remedies such as specific performance and injunction are in the discretion of
the court from which they are sought.
3.2.3 Capitalization. The authorized capital of Taseko consists of 100,000,000
common shares. As of the date hereof, the issued and outstanding share capital
of Taseko consists of 46,434,164 common shares. As of the date hereof, not more
than 4,400,000 common shares of Taseko were reserved for issuance pursuant to
Taseko's stock option plan. The issued and outstanding common shares of Taseko
have been, and the common shares of Taseko to be issued pursuant to Taseko's
stock option plan as well as the common shares of Taseko to be issued pursuant
to the Plan of Arrangement will be, validly authorized and issued, fully paid
and non-assessable and free of pre-emptive rights. The common shares of Taseko
are listed and posted for trading on the TSX Venture Exchange. Except pursuant
to Taseko's stock option plan, no Person has any agreement or option, or any
right capable of becoming an agreement, for the purchase, subscription,
allotment or issuance of any of the unissued shares in the capital of Taseko. No
common shares of Taseko are held as treasury stock or by any Subsidiary of
Taseko.
3.2.4 Subsidiaries. All of the issued and outstanding shares in the capital of
the Subsidiaries of Taseko are duly authorized, validly issued, fully paid and
non-assessable. Each of the Taseko Subsidiaries is wholly owned by Taseko.
3.2.5 Absence of Changes. Since September 30, 2002, and except as disclosed in
the public disclosure documents filed by Taseko with securities regulatory
authorities since September 30, 2002 (the "Taseko Disclosure Documents"), there
has not been any Material Adverse Change in relation to Taseko. Without limiting
the generality of the foregoing, from September 30, 2002, to the date hereof,
(a) except as publicly disclosed, neither Taseko nor any of its Subsidiaries has
declared, set aside or paid any dividend or made any distribution with respect
to its capital stock (whether in cash or in kind and except for regular
quarterly dividends in an amount consistent with pre-established policies) or
redeemed, purchased or otherwise acquired any of its capital stock;
(b) except in the ordinary course of business, neither Taseko nor any of its
Subsidiaries has granted any increase in the compensation of any of its senior
officers or directors; and
(c) neither Taseko nor any of its Subsidiaries has adopted, amended, modified,
or terminated any bonus, profit-sharing, incentive, severance, pension or other
plan, contract, or commitment (or taken any such action with respect to any
other such plan) for the benefit of (i) any of its officers or directors, or
(ii) any of its other employees outside the ordinary course of business.
3.2.6 Absence of Undisclosed Material Liabilities. Other than as fully disclosed
in the Taseko Disclosure Documents, neither Taseko nor any of its Subsidiaries
has any material liabilities or obligations of any nature (whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes), including
guarantees, support obligations or other similar obligations with respect to the
obligations of any person, except liabilities or obligations adequately
reflected or reserved against in the audited comparative consolidated financial
statements of Taseko as at September 30, 2002.
3.2.7 Securities Law Filings. Taseko has filed all information or proxy
circulars, annual information forms, financial statements, material change
reports, press releases and other documents required to be filed by it pursuant
to applicable securities legislation, including applicable rules and policies of
the TSX Venture Exchange (collectively, the "Taseko Securities Reports"). Each
Taseko Securities Report was, as of the date of filing such report, in
compliance in all material aspects with all applicable requirements of
securities legislation and none of the Taseko Securities Reports nor any
prospectus filed by Taseko, as of their respective filing dates, contained any
untrue statement of material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading.
3.2.8 No Conflict. The execution and delivery of this Agreement by each of
Taseko and the Taseko Subsidiaries does not and the performance of this
Agreement by Taseko and the successful completion of the Arrangement does not
and shall not:
(a) conflict with or violate the memorandum or articles or equivalent
organizational documents of Taseko or any Subsidiary;
(b) conflict with or violate any law, rule, permit, order, judgment or decree
applicable to Taseko or any of its Subsidiaries or by which any of their
respective properties is bound or affected, the conflict with which or violation
of which would result in a Material Adverse Change in respect of Taseko;
(c) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, or result
in the creation of a lien on any of the properties or assets of Taseko or any of
its Subsidiaries pursuant to any credit agreement, note, bond, mortgage,
indenture or other similar contract, agreement or instrument relating to
indebtedness for borrowed money (the "Taseko Debt Agreements) to which Taseko or
any of its Subsidiaries is a party or by which Taseko or any of its Subsidiaries
or any of their respective properties is bound or affected; or
(d) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of or result
in the creation of a lien on any of the properties or assets of Taseko or any of
its Subsidiaries pursuant to any contract, agreement, lease, licence, permit,
franchise or other instrument or obligation (other than the Taseko Debt
Agreements) to which Taseko or any of its Subsidiaries is a party or by which
Taseko or any of its Subsidiaries or any of their respective properties is bound
or affected which breach or default in any such case, would result in a Material
Adverse Change or materially impede the completion of the transactions
contemplated by the Agreement.
3.2.9 Compliance. Neither Taseko nor any of its Subsidiaries is in conflict
with, or in default (including cross-defaults) or violation of, in any respect
which is material and adverse to Taseko or the particular Subsidiary, as the
case may be:
(a) its memorandum or articles or equivalent organizational documents;
(b) any law, rule, order, permit, judgment or decree applicable to Taseko or any
of its Subsidiaries or by which any one of their respective properties is bound
or affected, which conflict, default or violation would constitute a Material
Adverse Change; or
(c) any contract, agreement, lease, licence, permit, franchise or other
instrument or obligation to which Taseko or any of its Subsidiaries is a party
or by which Taseko or any of its Subsidiaries or any of their respective
properties is bound or affected which would result in a Material Adverse Change
or materially impede the completion of the transactions contemplated in the
Agreement.
In particular, and without limiting the generality of the foregoing, Taseko has
complied with the provisions of all applicable securities legislation, except
for non-compliance that could not reasonably be expected to result in a Material
Adverse Change.
3.2.10 Taseko Financial Statements. The financial statements of Taseko
previously filed in the Taseko Securities Reports present fairly, in all
material respects, the consolidated financial position of Taseko and the results
of its operations and its cash flows as of the respective dates and for the
periods presented therein in conformity with GAAP as in effect on the applicable
dates of such financial statements and applied on a consistent basis, except as
noted therein and except that in the case of the unaudited financial statements,
no notes are included and such unaudited financial statements may be subject to
normal adjustments that would be made in the course of an audit and that would
not be material and adverse to Taseko.
3.2.11 Litigation. There are no claims, actions, proceedings, suits,
investigations, reviews, judgments, or decrees outstanding, pending or, to the
knowledge of Taseko, threatened against or involving Taseko or any of its
Subsidiaries or any of their businesses, assets or properties before any court
or other tribunal or by or before any agency or arbitrator, that, individually
or in the aggregate, if adversely determined, would result in a Material Adverse
Change. As at the date hereof neither Taseko nor any of its Subsidiaries nor any
of their assets or properties is subject to any judgment order or decree which
was or will result in a Material Adverse Change.
3.2.12 Disclosure. There is no fact which Taseko or the Taseko Subsidiaries have
not disclosed to GESL and of which any of its officers, directors or members of
senior management is aware and which has resulted, or would reasonably be
expected to result in a Material Adverse Change to Taseko.
3.2.13 Tax Filings. Taseko has filed all tax returns required to be filed by it
and has paid all taxes which are due and payable, and has made all accruals in
its financial statements for taxes payable by it for the current period.
3.3 SURVIVAL
For greater certainty, the representations and warranties of each of GESL,
Gibraltar 2002 No. 2, Taseko and the Taseko Subsidiaries contained herein shall
survive the termination of this Agreement for a period of one year.
ARTICLE 4.
REGULATORY APPROVALS
4.1 APPLICATIONS
The parties hereto covenant and agree to proceed diligently, in a coordinated
fashion, to apply for and obtain the Appropriate Regulatory Approvals.
4.2 OBTAINING OF APPROPRIATE REGULATORY APPROVALS
For purposes of this Agreement, no Appropriate Regulatory Approval shall be
considered to have been obtained unless it is on terms satisfactory to Taseko,
acting reasonably.
ARTICLE 5.
COVENANTS
5.1 RECOMMENDATION OF ARRANGEMENT
GESL hereby covenants that it will through its Board of Directors recommend that
GESL Shareholders vote all of their GESL Shares in favour of the Arrangement and
GESL through its Board of Directors shall publicly reconfirm such recommendation
upon the reasonable request in writing from time to time of Taseko.
5.2 COVENANTS OF GESL
GESL hereby also covenants that, from the date hereof until the earlier of (i)
the Effective Date, or (ii) this Agreement having been terminated pursuant to
Article 7 hereof, GESL shall:
5.2.1 not take any action of any kind which might reduce the likelihood of, or
interfere with, the completion of the Arrangement including, but not limited to,
any action to solicit, assist or encourage enquiries, submissions, proposals or
offers from any other Person, entity or group of Persons relating to, and will
not continue or participate in any discussions or negotiations regarding or
furnish to any other Person, entity or group of Persons any information with
respect to, or otherwise co-operate in any way with or assist or participate in,
or facilitate or encourage any effort or attempt with respect to:
5.2.1.1 the direct or indirect acquisition or disposition of all or any GESL
Shares or any other securities of GESL; or
5.2.1.2 any amalgamation, merger, sale of all or any part of GESL's assets
(other than in the ordinary course of business), take-over bid, tender offer,
plan of arrangement, issuer bid, reorganization, dividend or distribution,
recapitalization, liquidation or winding-up of, or other business combination or
similar transaction involving GESL. Notwithstanding the foregoing, GESL shall be
entitled to supply information to a third party in response to an unsolicited
written proposal which, if implemented, would, in GESL's reasonable judgment,
constitute a Competing Transaction provided that a copy of such proposal is
immediately delivered to Taseko and provided further that such third party
enters into a confidentiality agreement with GESL and provided that all such
information made available to the third party has been, or immediately will be,
provided to Taseko;
5.2.2 notify Taseko forthwith upon becoming aware of any submission, proposal or
offer related to a transaction of the nature referred to in Section 5.2.1 and
inform Taseko of all information (including the identity of any prospective
party and the consideration proposed) known at that time to GESL regarding such
submission, proposal or offer;
5.2.3 not, directly or indirectly, bid for or purchase any GESL Shares or any
rights to purchase GESL Shares or securities convertible or exercisable into any
GESL Shares, or attempt to induce any person to purchase any such security or
right;
5.2.4 use commercially reasonable efforts to assist Taseko to successfully
complete the transactions contemplated by this Agreement including by making all
regulatory filings and in obtaining all requisite regulatory approvals,
including the Appropriate Regulatory Approvals and making submissions and giving
evidence in relation thereto, in mailing or otherwise making and successfully
completing the Arrangement in a manner which is most tax effective for the
parties hereto, and in acquiring all outstanding GESL Shares pursuant to the
Arrangement;
5.2.5 provide a current list of shareholders of GESL prepared by GESL and
deliver such list to Taseko within two Business Days after execution of this
Agreement;
5.2.6 use commercially reasonable efforts to obtain any consents required under
leases and other contracts as a result of the transactions contemplated by this
Agreement;
5.2.7 use commercially reasonable efforts to cause the conditions in Section 6.1
and Section 6.2 to be satisfied on a timely basis;
5.2.8 immediately cease to provide to any person (other than Taseko) access to
GESL's information, properties, books, records, agreements or commitments other
than in the ordinary course of business or as required by applicable law; and
5.2.9 provide or cause to be provided to Taseko all proxy return information
with respect to the GESL Meeting on a timely basis upon request by Taseko.
5.3 OPERATION OF BUSINESS
GESL hereby covenants from the date hereof until the earlier of (i) the
Effective Date or (ii) this Agreement having been terminated pursuant to Article
7 hereof, (except as Taseko shall otherwise consent which consent shall not be
unreasonably withheld) to carry on business only in the usual course consistent
with past practice and that it shall:
5.3.1 not take any action (directly or indirectly) with respect to any of the
following, except to the extent necessary to give effect to obligations under
this Agreement:
5.3.1.1 any take-over bid, tender offer, issuer bid, merger, amalgamation, plan
of arrangement (other than the Arrangement), reorganization or other business
combination or similar transaction involving GESL or substantially all of its
assets;
5.3.1.2 any joint venture, strategic alliance, non-competition or similar
restrictive covenant or other transaction with strategic implications for GESL
or which may have an adverse effect on Taseko;
5.3.1.3 make any change in its debt or equity capitalization (including, but not
limited to, any increase in the amount or maturity of its consolidated
borrowings) or any conversion of short term borrowings into long term borrowings
other than accessing existing credit facilities in the normal course of
business;
5.3.1.4 declaring or paying any dividend or declaring, authorizing or making any
distribution of, on or in respect of any of its securities whether payable in
cash, securities or otherwise;
5.3.1.5 the amendment of its memorandum or articles, or the issuance or purchase
or other acquisition of any shares of its capital stock or of any class of
securities convertible into, or rights, warrants or options to acquire, any such
shares or other convertible securities, except as referred to in this Agreement;
5.3.1.6 agreeing or committing to guarantee the payment of any material
indebtedness;
5.3.2 not sell or issue any GESL Shares and not grant any options to purchase
GESL Shares;
5.3.3 except as otherwise contemplated hereby or in the ordinary course of
business, not enter into or amend existing agreements, commitments or contracts
which are material to GESL which alone accounts for 10% or more of the
consolidated revenues of GESL;
5.3.4 promptly advise Taseko of any fact or any change in the business,
operations, affairs, assets, liabilities, capitalization or financial condition
of GESL or Gibraltar 2002 No. 2 that could reasonably be expected to result in
or give rise to a Material Adverse Change; and
5.3.5 not enter into any transaction or perform any act which might (i)
interfere or be inconsistent with the successful completion of the Arrangement
(ii) render inaccurate any of the representations and warranties set forth
herein if such representations and warranties were made at a date subsequent to
such transaction or act and all references to the date hereof were to such later
date, or (iii) adversely affect GESL's ability to perform and comply with its
covenants and agreements under this Agreement.
5.4 CIRCULAR DISCLOSURE COVENANTS
5.4.1 GESL Covenant. GESL hereby covenants to Taseko that GESL will provide to
Taseko, both on the date of the Circular and on the Effective Date, a
representation and warranty that the disclosure pertaining to GESL and Gibraltar
2002 No. 2 in the Circular does not contain any untrue statement and does not
omit to state any material fact that is required to be stated or that is
necessary to prevent a statement that is made from being false or misleading in
the circumstances in which it was made.
5.4.2 Taseko Covenant. Taseko hereby covenants to GESL that Taseko will provide
to GESL, both on the date of the Circular and on the Effective Date, a
representation and warranty that the disclosure in the Circular does not contain
any untrue statement and does not omit to state any material fact that is
required to be stated or that is necessary to prevent a statement that is made
from being false or misleading in the circumstances in which it was made.
5.5 COVENANTS OF TASEKO
Taseko hereby covenants that from the date hereof until the earlier of (i) the
Effective Date, or (ii) this Agreement having been terminated pursuant to
Article 7 hereof, Taseko shall:
5.5.1 use commercially reasonable efforts to successfully complete the
Arrangement including co-operating with GESL in preparing the Circular and in
making all requisite regulatory filings and giving evidence in relation to such
filings;
5.5.2 use commercially reasonable efforts to obtain acceptance by the TSX
Venture Exchange of the Arrangement and to cause the Taseko Shares to be issued
upon the Arrangement becoming effective to be listed and posted for trading on
the TSX Venture Exchange on or before the Effective Date; and
5.5.3 use commercially reasonable efforts to cause the conditions in Sections
6.1 and 6.3 to be satisfied on a timely basis.
5.6 COVENANTS REGARDING A COMPETING TRANSACTION
5.6.1 Competing Transaction. Nothing in this Agreement shall prevent the GESL
Board of Directors from withdrawing, modifying or changing any recommendation
regarding the Arrangement in response to a bona fide Competing Transaction that
has not been solicited, assisted, or encouraged by or on behalf of GESL or by
any advisor to or director, officer or employee of GESL or any Affiliate thereof
where (i) written notice has been given to Taseko pursuant to Section 5.6.2.1
hereof and Taseko has not exercised its rights under Section 5.6.2.2, and (ii)
where in the opinion of the special committee of the Board of Directors acting
in good faith, after consulting its outside legal counsel, a failure to so
respond would be inconsistent with the performance of its fiduciary obligations
under applicable law.
5.6.2 Notification of Competing Transaction. GESL shall inform Taseko in writing
forthwith upon becoming aware of a Competing Transaction and GESL and its Board
of Directors shall not withdraw, modify, amend or change its recommendation to
GESL Shareholders to vote in favour of the Arrangement unless:
5.6.2.1 it has provided Taseko with notice in writing delivered to Taseko that
there is a Competing Transaction together with all documentation related to and
detailing the Competing Transaction at least five Business Days prior to the
date on which the Board of Directors proposes to withdraw, modify, amend or
change its recommendation to GESL Shareholders to vote in favour of the
Arrangement, which notice may be given only if the Competing Transaction has
been publicly announced or made on or before the fifth Business Day prior to the
Meeting Date; and
5.6.2.2 Taseko, within five Business Days after receipt of the notice and other
documentation referred to in Section 5.6.2.1, does not publicly announce an
intention to amend the terms of this Agreement and the Arrangement the result of
which would be, upon acceptance by GESL (and, if applicable, other approvals of
the Court), a transaction having a value per GESL Share greater than the value
per GESL Share under the Competing Transaction, and does not offer to GESL to
amend this Agreement within two Business Days after such public announcement
and, in any event before the Meeting Date; provided that if more than one
Competing Transaction exists, the provisions of this Section shall apply to and
in respect of only the Competing Transaction that the GESL Board of Directors
concludes is the superior transaction and has so notified Taseko in writing.
5.7 TASEKO'S ACCESS TO INFORMATION
Notwithstanding the pre-agreement investigation of GESL conducted by or on
behalf of Taseko, GESL shall give Taseko and its authorized agents reasonable
ongoing access during the term of this Agreement upon reasonable notice to GESL,
to all of GESL's and its Subsidiaries' information, senior personnel,
properties, books, records, agreements and commitments, as Taseko may reasonably
require. In addition, GESL shall co-operate with Taseko and any such authorized
persons in their review and furnish such persons with all material information
with respect to GESL and its Subsidiaries and their ongoing operations and
activities as Taseko or any person authorized by them may reasonably request
provided that Taseko shall designate the individual or individuals to
co-ordinate such access and further provided that Taseko shall not unreasonably
disrupt the normal business operations of GESL or its Subsidiaries. GESL's
obligations under this Section are subject to any legally binding obligations of
confidentiality in favour of any third party.
5.8 GESL'S ACCESS TO INFORMATION
Notwithstanding the pre-agreement investigation of Taseko conducted by or on
behalf of GESL, Taseko shall give GESL and its authorized agents reasonable
ongoing access during the term of this Agreement upon reasonable notice to
Taseko, to all of Taseko's and its Subsidiaries' material information, senior
officers, and material agreements and commitments, as GESL may reasonably
require. In addition, Taseko shall co-operate with GESL and any such authorized
persons in their review and furnish such persons with all material information
with respect to Taseko and its Subsidiaries as GESL or any person authorized by
them may reasonably request, provided that GESL shall designate the individual
or individuals to co-ordinate such access and further provided that GESL shall
not disrupt the normal business operations of Taseko or its Subsidiaries.
Taseko's obligations under this Section are subject to any legally binding
obligations of confidentiality in favour of any third party.
ARTICLE 6.
CONDITIONS
6.1 MUTUAL CONDITIONS PRECEDENT
The respective obligations of the parties hereto to complete the Arrangement and
the other transactions contemplated by this Agreement shall be subject to the
satisfaction, on or before the Effective Date, of the following conditions
precedent, each of which may be waived only by the mutual consent of Taseko and
GESL:
6.1.1 the Arrangement shall have been approved at the GESL Meeting by at least
75% of the votes cast by GESL Shareholders represented and voting at the GESL
Meeting and by a majority of such votes other than the votes of Excluded
Shareholders;
6.1.2 the Arrangement shall have been approved at the GESL Meeting in accordance
with any conditions in addition to those set out in Section 6.1.1 which may be
imposed by the Interim Order and which are satisfactory to each of GESL and
Taseko, acting reasonably;
6.1.3 the Interim Order and the Final Order shall each have been obtained in
form and terms satisfactory to each of GESL and Taseko, acting reasonably, and
shall not have been set aside or modified in a manner unacceptable to each of
GESL and Taseko on appeal or otherwise and the Final Order shall have been
accepted for filing by the Registrar;
6.1.4 there shall not be in force any order or decree restraining or enjoining
the consummation of the Arrangement or the other transactions contemplated by
this Agreement;
6.1.5 this Agreement shall not have been terminated pursuant to Section 7.3;
6.1.6 the Arrangement shall have been accepted for filing by the TSX Venture
Exchange and the Taseko Shares issuable pursuant to the Arrangement shall have
been conditionally approved for listing on the TSX Venture Exchange, subject to
the filing of required documentation; and
6.1.7 all necessary regulatory approvals shall have been obtained to permit the
issuance and first resale of the Taseko Shares without the qualification with,
or approval of, or the filing of any document including any prospectus or
similar document or the taking of any proceeding with, or the obtaining of any
further order, ruling or consent from any Governmental Entity or regulatory
authority under the Securities Act or pursuant to the rules and regulations of
any regulatory authority administering such Laws, or the fulfilment of any other
legal requirement in any such jurisdiction (other than, with respect to such
first resales, any restrictions on transfer by reason of a holder being a
"control person" for purposes of the Securities Act).
6.2 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TASEKO AND THE TASEKO
SUBSIDIARIES
The obligations of Taseko and the Taseko Subsidiaries to complete the
transactions contemplated by this Agreement shall also be subject to the
satisfaction, on or before the Effective Date, of each of the following
conditions precedent (each of which is for Taseko's exclusive benefit and may be
waived by Taseko and any one or more of which, if not satisfied or waived, will
relieve Taseko of any obligation under this Agreement):
6.2.1 all covenants of GESL and Gibraltar 2002 No. 2 under this Agreement to be
performed on or before the Effective Date shall have been duly performed by GESL
and Gibraltar 2002 No. 2 in all material respects;
6.2.2 the representations and warranties of GESL and Gibraltar 2002 No. 2 made
pursuant to this Agreement shall be true and correct in all material respects
immediately prior to the Effective Date as if made on and as of such date
(except to the extent such representations and warranties speak as of an earlier
date, in which event such representations and warranties shall be true and
correct in all material respects as of such earlier date, or except as affected
by transactions contemplated or permitted by this Agreement);
6.2.3 the Board of Directors shall have adopted all necessary resolutions and
all other necessary corporate action shall have been taken by GESL and Gibraltar
2002 No. 2, to permit the consummation of the Arrangement and the other
transactions contemplated hereby;
6.2.4 the Board of Directors shall have made and shall not have modified or
amended, in a manner adverse to Taseko, prior to the GESL Meeting, an
affirmative recommendation that GESL Shareholders vote in favour of the
Arrangement;
6.2.5 the Appropriate Regulatory Approvals shall have been obtained in
accordance with Article 4 and shall be in full force and effect and shall not be
the subject of any stop-order or proceedings seeking a stop-order or any
revocation proceedings;
6.2.6 between the date hereof and the Effective Date, there shall not have
occurred, in the judgment of Taseko, acting reasonably, a Material Adverse
Change with respect to GESL;
6.2.7 Taseko shall have determined in its reasonable judgment that there does
not exist any covenant, term or condition in any of the material instruments or
agreements to which any of GESL or Gibraltar 2002 No. 2 is a party or to which
they or any of their properties or assets are subject (of which Taseko was
unaware at the date of this Agreement) which may be breached or cause a default
or permit third parties to exercise rights against any of GESL or Gibraltar 2002
No. 2 which would result in a Material Adverse Change with respect to GESL as a
result of the Arrangement becoming effective;
6.2.8 Taseko shall be satisfied that (i) no action, suit or proceeding shall
have been threatened to be taken or taken before or by any domestic or foreign
arbitrator, court or tribunal or governmental agency or other regulatory
authority or administrative agency or commission or by any elected or appointed
public official or private person (including, without limitation, any
individual, company, firm, group or other entity) in Canada or elsewhere,
whether or not having the force of law, and (ii) no law, regulation, rule or
policy shall have been proposed, enacted, promulgated or applied, in the case of
(i) or (ii) above:
6.2.8.1 to cease trade, enjoin, prohibit or impose material limitations or
conditions on the completion of the Arrangement or the right of Taseko to own or
exercise full rights of ownership of all of the outstanding GESL Shares and all
of the outstanding shares of Gibraltar 2002 No. 2 owned by GESL;
6.2.8.2 which, if the Arrangement was completed, could in Taseko's reasonable
judgment adversely affect GESL;
6.2.9 there shall not exist any prohibition at law against Taseko owning or
exercising full rights of ownership of all of the outstanding GESL Shares;
Taseko may not rely on the failure to satisfy any of the above conditions
precedent as a basis for non-compliance by Taseko with its obligations under
this Agreement if the condition precedent would have been satisfied but for a
default by Taseko in complying with its obligations hereunder.
6.3 ADDITIONAL CONDITIONS PRECEDENT TO THE OBLIGATIONS OF GESL AND GIBRALTAR
2002 NO. 2
The obligations of GESL and Gibraltar 2002 No. 2 to complete the transactions
contemplated by this Agreement shall also be subject to the satisfaction, on or
before the Effective Date, to each of the following conditions precedent (each
of which is for the exclusive benefit of GESL and may be waived by GESL and any
one or more of which, if not satisfied or waived, will relieve GESL of any
obligation under this Agreement):
6.3.1 all covenants of Taseko and the Taseko Subsidiaries under this Agreement
to be performed on or before the Effective Date shall have been duly performed
by Taseko and the Taseko Subsidiaries in all material respects;
6.3.2 all representations and warranties of Taseko under this Agreement shall be
true and correct in all material respects immediately prior to the Effective
Date as if made on and as of such date (except to the extent such
representations and warranties speak as of an earlier date, in which event such
representations and warranties shall be true and correct in all material
respects as of such earlier date, or except as affected by transactions
contemplated or permitted by this Agreement);
6.3.3 the board of directors of Taseko shall have adopted all necessary
resolutions, and all other necessary corporate action shall have been taken by
Taseko and each of the Taseko Subsidiaries, to permit the consummation of the
Arrangement and the issue of the Taseko Shares contemplated thereby; and
6.3.4 between the date hereof and the Effective Date, there shall not have
occurred, in the judgment of GESL, acting reasonably, a Material Adverse Change
with respect to Taseko.
GESL may not rely on the failure to satisfy any of the above conditions
precedent as a basis for non-compliance by GESL with its obligations under this
Agreement if the condition precedent would have been satisfied but for a default
by GESL in complying with its obligations hereunder.
6.4 NOTICE AND CURE PROVISIONS
The parties hereto will give prompt notice to the other parties of the
occurrence, or failure to occur, at any time from the date hereof until the
Effective Date, of any event or state of facts which occurrence or failure
would, or would be likely to:
6.4.1 constitute a material breach of any representations or warranties of the
other contained herein or which would cause such representations and warranties
to be untrue or inaccurate in any material respect on the Effective Date; or
6.4.2 result in the failure to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by the other hereunder prior to the
Effective Date.
None of the parties hereto may elect not to complete the Arrangement or the
other transactions contemplated hereby pursuant to the conditions precedent
contained in Sections 6.1, 6.2 and 6.3, or exercise any termination right
arising therefrom, unless forthwith such party has delivered a written notice to
the other specifying in reasonable detail all breaches of covenants,
representations and warranties or other matters which such party is asserting as
the basis for the non-fulfilment of the applicable condition precedent or the
exercise of the termination right, as the case may be. If any such notice is
delivered, provided that such party is proceeding diligently to cure such
matter, if such matter is susceptible to being cured, the other parties may not
terminate this Agreement prior to April 30, 2003.
ARTICLE 7.
AMENDMENT AND TERMINATION
7.1 AMENDMENT
This Agreement may, at any time and from time to time before or after the
holding of the GESL Meeting but not later than the Effective Date, be amended by
mutual written agreement of the parties hereto, and any such amendment may,
without limitation:
7.1.1 change the time for performance of any of the obligations or acts of the
parties;
7.1.2 waive any inaccuracies or modify any representation or warranty contained
herein or in any document delivered pursuant hereto;
7.1.3 waive compliance with or modify any of the covenants herein contained and
waive or modify performance of any of the obligations of the parties; and
7.1.4 waive compliance with or modify any conditions precedent herein contained;
provided that notwithstanding the foregoing, the terms of this Agreement and the
Plan of Arrangement shall not be amended in a manner materially prejudicial to
the GESL Shareholders without the approval of the GESL Shareholders given in the
same manner as required by law for the approval of the Arrangement or as may be
ordered by the Court.
7.2 MUTUAL UNDERSTANDING REGARDING AMENDMENTS
The parties agree that if any party proposes any amendment or amendments to this
Agreement or to the Plan of Arrangement, the other parties will act reasonably
in considering such amendment and if the other parties and their security
holders are not prejudiced by reason of any such amendment such parties will
co-operate in a reasonable fashion with the party proposing the amendment, so
that such amendment can be effected subject to applicable Laws and the rights of
the security holders.
7.3 TERMINATION
7.3.1 Termination by GESL. GESL, when not in default in any material respect in
the performance of its obligations under this Agreement may, without prejudice
to any other rights, terminate this Agreement by written notice to Taseko if:
7.3.1.1 any condition contained in Section 6.1 or 6.2 is not satisfied by April
30, 2003 to the satisfaction of GESL, acting reasonably;
7.3.1.2 any representation or warranty of Taseko in this Agreement shall not
have been as of the date hereof, as of the date on which the Circular is mailed
and as of the Effective Date, true and correct in all material respects;
7.3.1.3 Taseko fails to comply in any material respect with any of its
obligations under this Agreement; or
7.3.1.4 Taseko has been notified in writing by GESL of a Competing Transaction
in accordance with Section 5.6.2.1 and Taseko does not take the action described
in Section 5.6.2.2 within the time periods specified therein.
7.3.2 Termination by Taseko. Taseko, when not in default in any material respect
in the performance of its obligations under this Agreement may, without
prejudice to any other rights, terminate this Agreement by written notice to
GESL if:
7.3.2.1 any condition contained in Section 6.1 or 6.3 is not satisfied by April
30, 2003 to the satisfaction of Taseko acting reasonably;
7.3.2.2 the Circular has not been mailed to the shareholders of GESL on or
before April 14, 2003, for any reason other than a default of Taseko hereunder;
7.3.2.3 any representation or warranty of GESL in this Agreement shall not have
been as of the date hereof, as of the date on which the Circular is mailed and
as of the Effective Date, true and correct in all material respects;
7.3.2.4 GESL fails to comply in any material respect with any of its obligations
under this Agreement;
7.3.2.5 for any reason other than the default of Taseko hereunder the Effective
Date has not occurred on or before April 30, 2003 ; or
7.3.2.6 Taseko has been notified in writing by GESL of a Competing Transaction
in accordance with Section 5.6.2.1 and Taseko does not take the action described
in Section 5.6.2.2 within the time periods specified therein.
7.3.3 Mutual Termination. This Agreement may, at any time before or after the
holding of the GESL Meeting but not later than the Effective Time:
7.3.3.1 be terminated by the mutual agreement of the parties (without further
action on the part of GESL's shareholders if terminated after the holding of the
GESL Meeting); or
7.3.3.2 be terminated by GESL by written notice to Taseko and the Taseko
Subsidiaries upon the failure of the GESL Shareholders to approve the
Arrangement at the GESL Meeting.
7.3.4 Effect of Termination. In the case of any termination of this Agreement
pursuant to this Article 7, this Agreement shall be of no further force and
effect.
ARTICLE 8.
CLOSING
8.1 TASEKO CLOSING DOCUMENTS
On the Effective Date, Taseko shall provide to GESL:
8.1.1 an officer's certificate certifying as of the Effective Date as to the
accuracy of the representations and warranties in Section 3.2; and
8.1.2 an opinion of legal counsel to Taseko as to the incorporation and
existence of Taseko and the Taseko Subsidiaries; the power of Taseko to carry on
its business and enter into this Agreement; the enforceability of this
Agreement; compliance with all legal and regulatory requirements with respect to
the Arrangement; the valid issuance of the common shares of Taseko issued
pursuant to the Arrangement; and the tradeability of such shares under
applicable securities laws.
8.2 GESL CLOSING DOCUMENTS
On the Effective Date, GESL shall provide to Taseko:
8.2.1 an officer's certificate certifying as of the Effective Date as to the
accuracy of the representations and warranties in Section 3.1; and
8.2.2 an opinion of legal counsel to GESL as to the incorporation and existence
of GESL and its Subsidiaries; the ownership by GESL of Gibraltar 2002 No. 2; and
the power of GESL and Gibraltar 2002 No. 2 to carry on their business and to
enter into this Agreement.
ARTICLE 9.
GENERAL
9.1 NOTICES
All notices and other communications which may or are required to be given
pursuant to any provision of this Agreement shall be given or made in writing
and shall be deemed to be validly given if served personally or by telecopy or
email, in each case addressed to the particular party at:
(a) Taseko, as follows:
Taseko Mines Limited
0000 - 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxxx X. Xxxxxxxx
Fax: (000) 000-0000
with a copy to:
Lang Xxxxxxxx
1500 - 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
(b) GESL and Gibraltar 2002 No. 2, as follows:
Gibraltar Engineering Services Limited
000 - 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx & Company
0000 Xxxx Xxxxx
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: Xxxxxx X. Xxxxx
Telecopier: (000) 000-0000
or at such other address of which any party may, from time to time, advise the
other parties 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 or
facsimile thereof.
9.2 ASSIGNMENT
This Agreement shall not be assignable by any party hereto without the consent
of the other party.
9.3 FURTHER ASSURANCES
Each party hereto shall, from time to time, and at all times hereafter, at the
request of the other party hereto, but without further consideration, do all
such further acts and execute and deliver all such further documents and
instruments as shall be reasonably required in order to fully perform and carry
out the terms and intent hereof.
9.4 EXPENSES
Except as otherwise specifically provided herein, each of the parties shall pay
its own legal, financial, advisory, accounting and other costs and expenses
incurred in connection with the preparation, execution and delivery of this
Agreement and the Arrangement and any other costs and expenses whatsoever and
howsoever incurred.
9.5 PUBLIC ANNOUNCEMENTS
Except to the extent required by law, securities policy or rule or policy of any
applicable stock exchange, no public announcement or press release concerning
the matters referred to in this Agreement may be made by the parties hereto
without the prior consent of the other party, such consent not to be
unreasonably withheld. Except to the extent required by law, no copy of this
Agreement may be provided by the parties hereto to any other person, except
their respective directors, officers, employees, advisors or lenders without the
prior consent of the other party, such consent not be unreasonably withheld. The
provisions of this Agreement may be summarized in the Circular, and in any
material change report filed by Taseko in connection with the public
announcement of the Arrangement. The parties agree to consult with each other,
to the extent reasonably possible, in connection with any public announcement or
other disclosure related to this Agreement.
9.6 GOVERNING LAWS
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
shall be treated in all respects as a British Columbia contract.
9.7 INVALIDITY OF PROVISIONS
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any applicable rule or law, or applicable public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
9.8 COUNTERPARTS
This Agreement may be executed in one or more counterparts, which may include
facsimile, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
9.9 INVESTIGATION BY PARTIES
No investigations made by or on behalf of a party or any of their respective
authorized agents at any time shall have the effect of waiving, diminishing the
scope of or otherwise affecting any representation, warranty or covenant made by
the other parties in or pursuant to this Agreement.
9.10 TIME
Time shall be of the essence of this Agreement.
9.11 AMENDMENTS
This Agreement may not be modified, amended, altered or supplemented except in
the manner contemplated herein and upon the execution and delivery of a written
agreement executed by both parties.
9.12 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS
Each of the parties recognizes and acknowledges that Taseko and the Taseko
Subsidiaries would not have agreed to pursue the Arrangement, and GESL would not
have agreed to recommend that shareholders vote in favour of the Arrangement,
unless this Agreement was executed and, accordingly, acknowledges and agrees
that a breach by a party of any obligation in this Agreement will cause the
other parties to sustain injury for which they would not have an adequate remedy
at law for money damages. Therefore, each of the parties agrees that in the
event of any such breach, the aggrieved party or parties shall be entitled to
the remedy of specific performance of such obligation and preliminary and
permanent injunctive and other equitable relief in addition to any other remedy
to which it may be entitled, at law or in equity, and the parties further agree
to waive any requirement for the securing or posting of any bond in connection
with the obtaining of any such injunctive or other equitable relief.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the
date first written above.
TASEKO MINES LIMITED CONCENTRATED EXPLORATION LTD.
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Authorized Signatory Authorized Signatory
GIBRALTAR ENGINEERING SERVICES LIMITED CONCENTRATED EXPLORATION 2000 LTD.
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Authorized Signatory Authorized Signatory
GIBRALTAR REFINERY (2002) LTD GIBRALTAR REFINERY (2002) NO. 2 LTD.
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Authorized Signatory Authorized Signatory
TASEKO RESOURCES INC
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Authorized Signatory
