WHEREAS the Vendor wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Vendor, those certain mining concession assets in Tanzania described herein.
IN CONSIDERATION of the covenants and agreements herein contained and for other good and valuable consideration (the receipt and sufficiency is hereby acknowledged by each of the parties), the parties covenant and agree as follows:
When used in this Agreement, the following terms shall have the respective meanings set forth below:
(a) "Affiliate" means with respect to any Person (i) a Person directly or indirectly controlling, controlled by or under common control with such Person; or (ii) an officer, director, member or partner of such Person. For these purposes, control means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether its the ownership of voting securities, by contract or otherwise.
(b) "Agreement" means this Asset Purchase Agreement, including all exhibits and schedules thereto, as the same may hereafter be amended, modified or supplemented from time to time.
(c) "Applicable Law" means, with respect to any Person, any statute, law, regulation, order, injunction, judgment, decree or other requirement of any Authority applicable to such Person or any of its Affiliates or any of their respective properties, and assets.
(d) "Authority" means any governmental, regulatory or administrative body, agency or authority, any court of judicial authority, any arbitrator or any public, private or industry regulatory authority.
(e) "Closing" means the consummation of the transactions contemplated in this Agreement.
(f) "Closing Date" means the date upon which the Closing occurs.
(g) "Conveyance Documents" means the documents described in subsection 3.7 required to complete the transfer and assignment of the Purchased Assets.
(h) "Due Diligence Completion Date" means the date as described in subsection 4.4.
(i) "Effective Time" means 12:01 a.m. Vancouver time on the Closing Date.
(j) "General Conveyances" means the documents as required in accordance with subsection 3.5.
(k) "Investment Letter" means the investment letter in the forms attached hereto as Appendixes "1" and "2".
(l) "Knowledge" means, with respect to the Vendor, the actual knowledge of each of its directors, executive officers and key employees and the knowledge that each such Person would have acquired upon diligent inquiry.
(m) "Licence" means the Tanzanian Prospecting License Renewal No. 2683/2004 known as "Xxxxxxx South East", a complete copy of the said licence is attached hereto as Schedule "A".
(n) "Lien" means any lien, pledge, mortgage, security interest, lease, charge, conditional sales contract, option, restriction, right of first refusal, or any other claim or right whatsoever.
(o) "Other Prospecting Licences" means PLR 2683/2004, PL 3117/2005, PL 3118/2005 and PLR 2810/2004.
(p) "Order" means any decree, order, judgment, writ, award, injunction, rule or consent of or by an Authority.
(q) "Person" means any entity, corporation, company, association, joint venture, joint stock company, partnership, trust, organization, individual (including personal representatives, executors and heirs of a deceased individual), or government (including agencies, departments, bureaus, boards, divisions and instrumentalities thereof).
(r) "Purchase Price" has the meaning specified at section 2.5.
(s) "Purchased Assets" means the Licence.
(t) "Purchaser Documents" means this Agreement and all other agreements, instruments and certificates to be executed and delivered by the Purchaser in connection with this Agreement.
(u) "Purchaser Shares" means the shares of common stock of the Purchaser being issued by the Purchaser as payment of the Purchase Price.
(v) "Required Contractual Consents" means those consents required to be obtained in order to consummate the transactions contemplated by this Agreement.
(w) "Required Governmental Approvals" means those filings, notices or approvals required to be obtained in order to consummate the transactions contemplated by this Agreement.
(x) "Securities Act" means the United States Securities Act of 1933, as amended.
(y) "Vendor Documents" means this Agreement and all other agreements, instruments and certificates to be executed by the Vendor in connection with this Agreement.
All monies which are referred to in this Agreement are, unless expressly stated otherwise, expressed in lawful money of United States of America.
1.3 Best Efforts
The parties acknowledge and agree that, for all purposes of this Agreement, an obligation on the part of any party to use its best efforts to obtain any waiver, consent, approval, permit, license or other document shall not require such party to make any payment to any person for the purpose of procuring the same, other than payments for amounts due and payable to such person under the terms of any agreement as it stood prior to the date of this Agreement, payments for incidental expenses incurred by such person and payments required by any applicable law or regulation, nor permit the Vendor without the consent of the Purchaser, which consent may be arbitrarily withheld, to change any contractual rights or obligations in any contracts included in the Purchased Assets.
1.4 Appendices and Schedules
The following appendices and schedules are attached to and incorporated in this Agreement by this reference and deemed to form a part hereof:
(a) Appendix "1" - Investment Letter to be provided by the Vendor and/or its designees who are non-residents of United States, to whom the Purchaser Shares are to be registered.
(b) Appendix "2" - Investment Letter to be provided by the Vendor and/or its designees who are residents of United States, to whom the Purchaser Shares are to be registered.
(c) Schedule "A" - A copy of Prospecting Licence Renewal No. 2683/2004 known as "Xxxxxxx South East".
2. SALE AND PURCHASE OF ASSETS
2.1 Assets to be Transferred
Subject to the terms and conditions set forth in this Agreement and in reliance upon the representations and warranties of the Vendor and Purchaser herein set forth, at the Closing, the Vendor shall sell, transfer, convey, assign and deliver to the Purchaser, by appropriate deeds, assignments and other instruments satisfactory to the Purchaser, and the Purchaser shall purchase from the Vendor, all of the Vendor's right, title and interest, as of the Effective Time, in and to the Purchased Assets.
2.2 Purchased Assets Only
Unless specifically included in the definition of Purchased Assets, all of the other property and assets of Vendor shall be excluded from the purchase and sale provided for in this Agreement.
2.3 Title to Purchased Assets
The Purchased Assets shall be conveyed free and clear of all liabilities, obligations and Liens.
2.4 No Liabilities Assumed
The Purchaser shall not assume or be liable for any liabilities or obligations of the Vendor, direct or indirect, fixed, contingent or otherwise, known or unknown, which exist at the Effective Time or which arise thereafter as a result of any act, omission or circumstance taking place prior to the Effective Time.
2.5 Purchase Price
The purchase price (the "Purchase Price") for all of the Purchased Assets shall be shares of the common stock of the Purchaser (the "Purchaser Shares") consisting of 2,600,000 Shares to be delivered at Closing.
2.6 No Registration of the Purchaser Shares; Legend
None of the Purchaser Shares issued pursuant to this Agreement shall, at the time of Closing, be registered under US federal or state securities laws but, rather, shall be issued pursuant to an exemption therefrom and shall be considered "restricted stock" within the meaning of Rule 144 promulgated under the US Securities Act of 1933, as amended (the "Securities Act"). The Purchaser Shares so issued shall bear a legend worded substantially as follows:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND ARE "RESTRICTED STOCK" AS THAT TERM IS DEFINED IN RULE 144 UNDER THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO THE EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY."
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT") OR OTHER APPLICABLE SECURITIES LAWS. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, RULE 901 THROUGH RULE 905, AND PRELIMINARY NOTES UNDER THE 1933 ACT OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT."
The Purchaser shall annotate its records, or cause to be annotated its records, to reflect the restrictions on transfer embodied in the legend set forth above.
3.1 Time and Place
The Closing of this Agreement (the "Closing") shall take place within 10 business days of completion of the Due Diligence Completion Date (the "Closing Date") or such other date as mutually agreed upon between the Purchaser and the Vendor. The parties agree and acknowledge that the Purchaser's solicitors, Fraser and Company LLP, and the Purchaser's Tanzanian legal counsel, Maajar, Rwechungura, Nguluma & Makani, will handle the preparation and filings, where applicable, of all the Conveyance Documents. All documents shall be executed and delivered in escrow and execution and delivery of Closing documents shall be deemed to be concurrent requirements and it is specifically agreed that nothing will be complete at the Closing until everything required to complete the Closing has been executed, delivered, fully registered or issued, as the case may be. All of the parties to this Agreement hereby agree that if the Purchaser and Vendor agree to extend the Closing, the Closing will be on such day that they agree to in writing and all parties hereto are bound to close on such day.
3.2 Transfer of Possession
Title and possession of the Purchased Assets will pass from Vendor to Purchaser on the Closing Date and, for all other purposes, if Closing occurs, the transfer and assignment of the Purchased Assets from Vendor to Purchaser will be effective as of the Effective Time.
3.3 Procedure for Delivery of Purchaser Shares
At the Closing,
(a) once the Purchaser's Tanzanian legal counsel has filed with the Tanzanian Commissioner for Mineral Rights those Conveyance Documents duly signed by the Vendor that effect the transfer of the Licence into the name of the Purchaser; and
(b) the Purchaser's Tanzanian legal counsel has received an Acknowledgement of Transfer from the said Commissioner; and
(c) the Purchaser's Tanzanian legal counsel is in a position to provide the title opinions described in subsection 4.2; and
(d) the Purchaser has received the Investment Letters described in subsection 3.4; then
(e) the Purchaser shall deliver or cause to be delivered to the Vendor the Purchaser Shares by delivering a treasury order, duly executed by the Purchaser, to the Purchaser's transfer agent who will create the share certificates in the name of the Vendor or its designees.
3.4 Delivery of Investment Letter
At the Closing, the Vendor shall deliver or cause to be delivered to the Purchaser, the Investment Letter, executed by the Vendor or its designees to whom the Purchaser Shares are to be registered.
3.5 Additional Deliveries at Closing by the Purchaser
At the Closing, the Purchaser shall deliver or cause to be delivered to the Vendor:
(a) a copy of the consent of the Purchaser's board of directors approving the terms of this Agreement and the transactions contemplated herein and authorizing the Purchaser to take the necessary steps toward closing the transactions described by this Agreement.
3.6 Additional Deliveries at Closing by the Vendor
At the Closing, the Vendor shall deliver or cause to be delivered to the Purchaser:
(a) a copy of a consent of the Vendor's board of directors approving the terms of this Agreement and the transactions contemplated herein and authorizing the Vendor to take the necessary steps toward Closing the transactions described by this Agreement;
(b) copies of all licences, permits, encumbrances, right of ways and any other documents that evidence a right of any party in the property covered by the Licence; and
(c) all documentation relating to the Purchased Assets.
3.7 Closing and General Conveyance Documents
Vendor shall execute and deliver to Purchaser and Purchaser shall prepare, execute and deliver to Vendor on the Closing Date, a General Conveyances of the Purchased Assets in the form acceptable to the Purchaser's solicitors, in registrable form to the extent applicable, respecting the Purchased Assets, as may be reasonably required by the Purchaser, to complete the transfer of the Purchased Assets.
3.8 Cost of Registration
Purchaser shall bear all costs incurred in registering all Conveyance Documents relating to the Purchased Assets and all costs of preparing and registering any further Conveyance Documents Purchaser may reasonably require following Closing, including any fees or penalties which are levied, to the Purchaser or Vendor, due to the late or incorrect filing by the Purchaser. Vendor shall bear all costs of registering discharges of security interests registered against Vendor's interest in the Purchased Assets.
3.9 Circulation of Conveyance Documents
The Purchaser shall be responsible for promptly providing the Vendor with all such Conveyance Documents relating to the transfer of the Purchased Assets. The Vendor shall promptly arrange for the said Conveyance Documents to be executed or cause to be executed by the appropriate parties to effect the said transfer of the Purchased Assets.
3.10 Subordination of Auxiliary Documents
All documents executed by the Parties and delivered pursuant to the provisions of this section 3, or otherwise pursuant to this Agreement, are subordinate to the provisions hereof and the provisions hereof shall govern and prevail in the event of conflict.
3.11 Cooperation of Filings
The Vendor shall, on request and without further consideration, co-operate with the Purchaser by furnishing or using the Vendor's best efforts to cause others to furnish any additional information and/or executing and delivering or using the Vendor's best efforts to cause others to execute and deliver any additional documents and/or instruments, and doing or using the Vendor's best efforts to cause others to
do any and all such other things as may be reasonably required by the Purchaser or its counsel to consummate or otherwise implement the transactions contemplated by this Agreement.
4. CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER TO CLOSE
The obligations of the Purchaser to consummate the transactions contemplated herein shall be subject to the fulfillment, at or prior to the Closing of all of the conditions set forth below in this section 4.
4.1 Governmental and Other Approvals
All Required Governmental Approvals and all Required Contractual Consents shall have been obtained without the imposition of any conditions. All Required Governmental Approvals and Required Contractual Consents shall be in effect and all conditions and requirements prescribed by any of the same to be satisfied on or prior to the Closing Date shall have been satisfied.
4.2 Favourable Legal Opinions
The Purchaser shall have received:
(a) a favourable legal opinion from the Purchaser's Tanzanian counsel addressed to the Purchaser and Purchaser's solicitors, in form and substance satisfactory to the Purchaser and its counsel and dated the Closing Date with respect to the compliance of all laws in connection with the corporate status of the Vendor; and
(b) a favourable legal opinion from the Purchaser's Tanzanian counsel addressed to the Purchaser, in form and substance satisfactory to the Purchaser and its legal counsel and dated the Closing Date that the Licence has been duly registered in the name of the Purchaser, is legally valid under the Applicable Laws of Tanzania and is in good standing with respect to its filing requirements, that all required payments have been made to the government of Tanzania, that foreign companies can directly own 100% of the Licence, the mining licenses that the Purchaser owns or has an interest in are renewal for one or two additional periods of two years each, that renewal is a formality if the mining licences are in good standing, that the granting of a Prospecting Licence in Tanzania includes the right to drill on the land, that the government of Tanzania only has a 3% royalty interest in the Licence, and that there are no Liens registered against the Licence.
4.3 Concurrent Closing of Other Prospecting Licences
The Closing is conditional upon the Purchaser concurrently closing on acquisition of the Other Prospecting Licences.
4.4 Satisfactory Due Diligence
The consummation of the transactions described in this Agreement shall be subject to the completion of the due diligence satisfactory to the Purchaser in its sole and absolute discretion. Upon completion of the Purchaser's due diligence review, the Purchaser shall provide written notice to the Vendor that the Purchaser has completed and is satisfied with its due diligence review, such date is hereinafter referred to as the "Due Diligence Completion Date". The Due Diligence Completion Date shall occur on or before the 120th day following the date this Agreement is made. The Purchaser may, in
its sole discretion, provide written notice to the Vendor that the Purchaser has waived its due diligence review and notifies the Vendor of the Due Diligence Completion Date.
If the Purchaser is not satisfied with its due diligence review, the Purchaser may by written notice to the Vendor, terminate this Agreement.
The Purchaser shall have satisfied itself that all transactions contemplated by this Agreement shall be legal and binding under applicable laws.
4.5 Material Compliance By Vendor
The Vendor shall have performed or complied with, in all material respects, the terms and conditions of this Agreement to the extent they are to be performed at or prior to the Closing Date.
4.6 Delivery of Conveyance Documents
The Vendor shall have executed and delivered to the Purchaser the Conveyance Documents.
4.7 No Action or Proceeding
The consummation of the transactions contemplated herein shall not violate any Applicable Law. Further, no legal restraint preventing the consummation of the transactions contemplated herein, or imposing material damages in respect thereof, shall be in effect, nor shall there be any action or proceeding pending or threatened by any Person which seeks any of the foregoing.
4.8 Representations and Warranties
The representations and warranties of the Vendor contained in this Agreement and in each other Vendor Document shall have been true and correct when made and shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date.
4.9 Performance of Covenants
Each obligation of the Vendor to be performed by it on or before the Closing Date pursuant to the terms of this Agreement and each other Vendor Document shall have been duly performed on or before the Closing Date.
4.10 Waiver of Conditions
The foregoing conditions are for the exclusive benefit of the respective benefiting parties and may be waived by the respective benefiting parties in writing or in part on or before the Closing Date by delivery of a written waiver to that effect, signed by the benefiting party. Notwithstanding any such waiver, completion of the transactions contemplated by this Agreement shall not prejudice or affect in any way the rights of the benefiting party in respect of the warranties and representations of the other party set forth in this Agreement.
5. CONDITIONS PRECEDENT TO THE OBLIGATION OF VENDOR TO CLOSE
The obligation of the Vendor to consummate the transactions contemplated herein shall be subject to the fulfillment, at or before the Closing Date, of all the conditions set forth below in this section 5.
5.1 Representations and Warranties
The representations and warranties of the Purchaser contained in this Agreement and in each other Purchaser Document shall have been true and correct when made and shall be true and correct in all material respects on and as of the Closing Date with the same force and effect as though made on and as of the Closing Date.
5.2 Performance of Covenants
Each of the obligations of Purchaser to be performed by it on or before the Closing Date pursuant to the terms of this Agreement and each other Purchaser Document shall have been duly performed in all material respects on or before the Closing Date.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE PURCHASER
The Purchaser represents, warrants and covenants to the Vendor, as representations, warranties and covenants that are true and correct as of the date hereof and that will be true on the Closing Date, as follows, and hereby acknowledges that the Vendor is relying on such representations, warranties and covenants in entering into this Agreement:
The Purchaser's issued and outstanding shares immediately prior to the Closing Date is 4,058,400 common shares.
6.2 Purchaser's Public Filings
The Purchaser has filed all the reports required to be filed under section 13 of the Securities Exchange Act of 1934.
6.3 Authority to Execute Agreement
The board of directors of the Purchaser, pursuant to the power and authority legally vested in it, has duly authorized the execution and delivery by the Purchaser of this Agreement, and has duly agreed to each of the transactions hereby contemplated. the Purchaser has the power and authority to execute and deliver this Agreement, to approve the transactions hereby contemplated and to take all other actions required to be taken by it pursuant to the provisions hereof. The Purchaser has taken all actions required by law, its constating documents, as amended, or otherwise to authorize the execution and delivery of this Agreement. This Agreement has been duly executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser. This Agreement has been duly executed and delivered by the Purchaser and constitutes a legal, valid and binding obligation of the Purchaser enforceable against the Purchaser. Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will constitute a violation or breach of the constating documents, of the Purchaser, or of any agreement, injunction, law, rule or regulation applicable to the Purchaser.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE VENDOR
The Vendor represents, warrants and covenants to the Purchaser, as representations, warranties and covenants that are true and correct as of the date hereof and that will be true on the Closing Date, as follows, and hereby acknowledges that the Purchaser is relying on such representations, warranties and covenants in entering into this Agreement:
7.1 Existence, Power and Conduct of Business
The Vendor is a corporation duly organized, validly existing and in good standing under the Applicable Laws of Tanzania, is up to date in all corporate filings required under the Applicable Laws of Tanzania, has the requisite power and authority and all material governmental licenses, authorizations, consents and approvals necessary to own, operate and lease its properties and assets and to conduct its businesses in which it is presently engaged, and is duly qualified to conduct its businesses in all jurisdictions where the nature of its assets or its businesses makes such qualification necessary except in jurisdictions where failure to register does not have a Material Adverse Effect.
"Material Adverse Effect" means, with respect to any party, any condition, event or development which is or would reasonably be expected to have a material adverse effect on:
(a) the business, affairs, properties, capitalization, prospects or financial condition of that party and its subsidiaries taken as a whole; or
(b) the ability of that party to perform and discharge its obligations under this Agreement or any of the other documents incorporated herein.
7.2 Corporate Power, Authorization and Enforceable Obligations
The execution, delivery and performance by the Vendor of this Agreement and all of the other Vendor Documents, and the transfer of Purchased Assets contemplated herein and therein: (1) are within the corporate power of the Vendor, (2) have been duly authorized by all necessary or proper corporate or other action; (3) are not in contravention of, and will not conflict with or violate, any provision of the articles or by-laws of the Vendor; (4) will not contravene, conflict with or violate any Applicable Laws; (5) will not conflict with or result in the breach or termination of or result in the loss of any material benefit under, constitute a default under, or give to others any rights of termination or cancellation of, or accelerate any performance required by or accelerate the maturity of, any indenture, mortgage, deed of trust, lease, agreement, contractual obligation, material agreement or other material instrument to which the Vendor may be a party or by which the Vendor or any of its assets or property is bound (or would be bound but for such default); (6) will not result in the creation or imposition of any mortgage, charge, lien, hypothec, trust, encumbrance, charge, pledge, assignment, security interest, title retention, deposit, trust or any other security arrangement of whatsoever nature or kind upon any of the assets or property of the Vendor, where such creation or imposition could have a Material Adverse Effect; and (7) do not require the consent or approval of any governmental authority or any other person except to the extent that such consents have been obtained and delivered to the Purchaser, and this Agreement constitutes a legal, valid and binding obligation of the Vendor, enforceable in accordance with their terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors' rights generally; and (ii) as limited by equitable principles generally.
7.3 Title to Purchased Assets
The Vendor has good and marketable title to each of the Purchased Assets free and clear of all Liens. The delivery to Purchaser of the instruments of transfer of ownership contemplated by this Agreement will at the Effective Time vest good and marketable title to, or the valid and enforceable right to receive and/or use, each such Purchased Asset in Purchaser, free and clear of all Liens.
7.4 Mining Property
(a) The Vendor is the legal and beneficial owner of a 100% undivided interest in Prospecting Licence Renewal No. 2683/2004 known as "Xxxxxxx South East".
(b) There are no other agreements, adverse interests or options to acquire or purchase the Licence or any portion thereof. No person has any proprietary or possessory interest in the Licence. Other than the 3% royalty held by the government of Tanzania, no person is entitled to any royalty or other payment in the nature of rent or royalty on any minerals, metals or concentrates or any other such products removed or produced from the Licence.
(c) The Licence is accurately described in Schedule "A" and is free and clear of all Encumbrances (as defined below) subject only to the permitted Encumbrances described in Schedule "A". Each Licence has been properly registered in the applicable Tanzanian land registry office. Each Licence has been properly staked, tagged, located and recorded in accordance with the applicable Tanzania mining laws.
(d) There are no outstanding work orders or actions required or reasonably anticipated to be required to be taken in respect of the rehabilitation or restoration of the property covered by the Licence or relating to environmental matters in respect of the Licence including without limitation, waste disposal and storage or any operations thereon nor has the registered owners of the Licence received notice of same. There are no temporarily suspended mining operations, abandoned projects or projects which could be considered abandoned which would require closure plans or site rehabilitation in respect of the property covered by the Licence or operations thereon. There is no mining operation on the property covered by the Licence. There has never been a mining operation on the property covered by the Licence.
(e) All taxes, rates, duties, fees and assessments imposed, levied or charged upon or against the Licence are paid in full. The Licence is in good standing in accordance with the mining laws of Tanzania.
(f) Conditions on and relating to the property covered by the Licence including with respect to all past and current operations thereon are in compliance with all applicable laws, regulations and orders including without limitation, environmental laws.
(g) No Hazardous Substance (as defined below) has been placed, held located, used or disposed of, on, under or at the property covered by the Licence and no part of such property has been used as a dump site or storage site for any Hazardous Substance. No claim has ever been asserted and there are no present circumstances which could reasonably form the basis for the assertion of any claim against the owners of the Licence for loss, liability, damages, injury, costs or expenses of any kind as a direct or indirect result of the presence on or under the escape, seepage, leakage, spillage, discharge, emission or release from the Property of any Hazardous Substance.
(h) There are no outstanding, pending or threatened, actions, suits or claims, affecting all or any part of the Licence nor is there currently any basis therefor. There have been and presently are, no claims or disputes threatened, proposed, alleged or contemplated which may in any way affect the registered owners of the Licence's right or ability to have access to the property covered by the Licence to conduct its work thereon or which may in any way affect the market value or ownership of the Licence or any portion thereof.
(i) The registered owners of the Licence are not insolvent, have not proposed a compromise or arrangement to its creditors generally, have not taken any proceeding with respect to a compromise or arrangement, have not taken any proceeding to have themselves declared bankrupt or wound-up and has not taken any proceeding to have a receiver appointed of any part of its assets and at present, no encumbrancer or receiver has taken possession of any of its property and no execution or distress is enforceable or levied upon any of its property and no petition for a receiving order in bankruptcy is filed against any of them.
(j) The Vendor has made available, or cause to be made available, to the Purchaser all material information in its possession or control relating to the Licence and shall continue to make available, or cause to be made available, to the Purchaser all information in its possession or control relating to work done on or with respect to the Licence which could possibly be considered significant in indicating that the property covered by the Licence might or might not have potential economic mineralization.
"Encumbrances" means any and all liens, charges, encumbrances, contractual obligations and claims of others, recorded and unrecorded, registered and unregistered.
"Hazardous Substance" means any hazardous substance or pollutant, contaminant, toxic or dangerous waste, substance or material, as defined or regulated by any applicable law, regulation or governmental authority from time to time.
7.5 Investment Intent
The Vendor is acquiring the Purchaser Shares for investment purposes only and not with a view towards resale or redistribution in violation of securities laws, including United States state and federal securities laws. The Vendor agrees to comply with the provisions of applicable securities laws including but not limited the securities law of British Columbia, the United States and the jurisdiction of residence of the Vendor.
7.6 Non-US Person
The Vendor is not a U.S. person ("U.S. Person") as that term is defined in Regulation S of the Securities Act. A "U.S. Person" is defined by Regulation S to be any person who is:
(a) any natural person resident in the United States;
(b) any partnership or corporation organized or incorporated under the laws of the United States;
(c) any estate of which any executor or administrator is a U.S. person;
(d) any trust of which any trustee is a U.S. person;
(e) any agency or branch of a foreign entity located in the United States;
(f) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporate, or (if an individual) resident in the United States; and
(g) any partnership or corporation if:
(i) organized or incorporated under the laws of any foreign jurisdiction; and
(ii) formed by a U.S. person principally for the purpose of investing in securities not registered under the 1933 Act, unless it is organized or incorporated, and owned, by accredited investors [as defined in Section 230.501(a) of the 1933 Act] who are not natural persons, estates or trusts.
7.7 No Other Agreements to Purchase
No person other than the Purchaser has any written or oral agreement or option or any right or privilege (whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase or acquisition from the Vendor of any of the Purchased Assets or any interest thereof.
7.8 Full Disclosure
The Vendor warrants that the information contained in this Agreement as of this date does not, contain any untrue statement of a material fact, and this Agreement does not omit to state any material fact necessary to make any statements, in light of the circumstances under which such statements were made, not misleading.
There are no outstanding orders, judgements, injunctions, awards or decrees of any court, governmental or regulatory body or arbitration tribunal against the Vendor or the Purchased Assets. There are no actions, suits or proceedings pending, or, to the knowledge of the Vendor, threatened against or affecting the Vendor or any of its officers or directors relating to their positions as such, or any of their properties, at law or in equity, or before or by any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, in connection with the business, operations or affairs of the Vendor, which might result in any material adverse change in the operations or financial condition of the Vendor.
7.10 No Approvals Required
No further registration, qualification, designation, declaration or filing order, permit, filing, consent, licence, decree, authorization or approval of, from or with any governmental authority on the part of the Vendor is necessary or advisable in order to ensure the legality, validity, binding effect and enforceability of this Agreement, the transfer of the Purchased Assets to the Purchaser or in connection with the consummation of the transactions contemplated by this Agreement, except for (a) compliance with the applicable securities regulations; and (b) compliance with the requirements of the Applicable Laws of Tanzania.
7.11 No Violations
The Vendor is not (a) in violation of its charter, by-laws or other organizational document or of any law, administrative regulation, ordinance, order, judgment or decree of any court or governmental agency, arbitration panel or authority applicable thereto, except for violations which, individually or in the aggregate, would not have a Material Adverse Effect; and (b) in default in any material respect in the performance of any obligation, agreement or condition contained in any bond, debenture, note or any other evidence of indebtedness in any indenture, mortgage, deed of trust, or any other agreement or instrument to which it is a party or by which it is bound or by which its properties are bound or affected, except for violations which, individually or in the aggregate, would not have a Material Adverse Effect, and there exists no condition which, with the passage of time or otherwise, would constitute a material default under any such document or instrument or result in the imposition of any material penalty or the acceleration of any material indebtedness.
7.12 Finder's Fees
The Vendor has not incurred any liability, contingent or otherwise, for brokers' or finders' fees in respect of this transaction for which the Purchaser shall have any obligation or liability.
7.13 No Knowledge
To the knowledge of the Vendor, there exist no facts which, if known to the Purchaser, might reasonably be expected to deter the Purchaser from completing the transactions herein contemplated.
8. ADDITIONAL COVENANTS OF THE PARTIES
8.1 Cooperation; Consents
Prior to the Closing Date, each party shall cooperate with the other to the end that the parties shall (i) in a timely manner make all necessary filings with, and conduct negotiations with, all Authorities and other Persons the consent or approval of which, or a license or permit from which, is required for the consummation of the transactions contemplated herein and (ii) provide to each other party such information as the other party may reasonably request in order to enable it to prepare such filings and to conduct such negotiations. The parties shall also use their respective best efforts to expedite the review process and to obtain all such necessary consents, approvals, licenses and permits as promptly as practicable. To the extent permitted by Applicable Law, the parties shall request that each Authority or other Person whose review, consent or approval is requested treat as confidential all information which is submitted to it. The Vendor and Purchaser shall bear their own costs and expenses incurred or fees paid to Authorities to obtain any governmental approvals and contractual consents. Each Party shall bear its own costs and expenses (including fees paid to authorities) incurred to obtain such consents, approvals, licenses or permits.
The Purchaser may publish any press releases or disseminate any news regarding this Agreement or transaction contemplated herein prior or after the Closing. Prior to Closing, all news releases with respect to the transactions contemplated by this Agreement shall be reviewed by the Vendor and comments that may be by the Vendor shall be incorporated into the release.
8.3 No Solicitation or Negotiation
Unless and until this Agreement is terminated, the Vendor shall not, nor shall it cause, suffer or permit the directors, officers, employees, representatives, agents, investment bankers, advisors, accountants or attorneys of the Vendor to, initiate or solicit, directly or indirectly, any inquiries or the making of any proposal that constitutes or could be reasonably expected to lead to the transfer of one or more of the Purchased Assets, or an interest in the Purchased Assets, from any Person, or engage in any discussions or negotiations relating thereto, or accept any such acquisition or otherwise facilitate, attempt to seek or continue any of the foregoing.
9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1 As to the Parties
The representations, warranties and covenants of the parties contained herein shall survive the execution and delivery of this Agreement, the Closing and the consummation of the transactions called for by this Agreement for a period of six years from the Closing Date.
After the Closing Date, each party to this Agreement (the "Indemnifying Party") will indemnify the other parties against any and all debts, losses, claims, demands, costs and expenses whatsoever, whether absolute or contingent, including solicitors fees, on a solicitor and own client basis, resulting from, arising out of or in any manner whatsoever occasioned by:
(a) any breach of any covenant or agreement of the Indemnifying Party as set forth in this Agreement;
(b) any untruth, inaccuracy or incompleteness of any representation of the Indemnifying Party set forth in this Agreement; or
(c) any non-fulfilment or non-performance of any agreement or condition on the part of the Indemnifying Party under this Agreement.
10. NO MERGER
The representations and warranties set forth in sections 6 and 7 and the indemnity set forth in subsection 9.2 and the covenants in section 8.3 shall be deemed to apply to all assignments, transfers and other Conveyance Documents and there shall not be any merger of any representation, warranty, indemnity or covenant in such assignments, transfers or other Conveyance Documents, before, on or after the Closing, notwithstanding any rule of law, equity or statute to the contrary and all such rules are hereby waived.
11. TERMINATION; REMEDIES
11.1 Termination Without Default
Anything herein to the contrary notwithstanding, this Agreement and the transaction contemplated by this Agreement may otherwise be terminated before the First Closing only as follows (and in no other manner), except as specified in subsection 11.2:
(a) Mutual Consent. By the mutual consent in writing of the parties.
(b) Conditions to Purchaser's Performance Impossible. By the Purchaser upon written notice to the Vendor if any event occurs which would render impossible the satisfaction of one or more conditions to the obligations of the Purchaser set forth in section 4.
(c) Conditions to Vendor's Performance Impossible. By the Vendor upon written notice to the Purchaser if any event occurs which would render impossible the satisfaction of one or more conditions to the obligations of the Vendor set forth in section 5.
11.2 Termination Upon Default
Either party may terminate this Agreement by giving notice to the other on or prior to the First Closing Date, without prejudice to any rights or obligations it may have, if (i) after written notice of the default and the passage of (A) ten (10) days, in the case of a default which is by its nature incapable of being cured, or (B) thirty (30) Days, or such shorter period as may end upon the scheduled First Closing Date, in the case of a default which by its nature is capable of being cured, the other party has failed in the due and timely performance of any of its covenants or agreements herein contained or there shall have been a breach of the other's warranties or representations herein contained, and (ii) such failure or breach could reasonably be expected to give the non-defaulting party grounds not to close pursuant to sections 4 or 5, as the case may be. In any such event the party who is not guilty of the breach may, in addition to all of its other rights and remedies, recover all losses incurred by it from the party responsible for the breach.
11.3 Specific Performance
The parties acknowledge that the Purchased Assets are unique and cannot be obtained by the Purchaser except from the Vendor and for that reason, among others, the Purchaser will be irreparably damaged in the absence of the consummation of this Agreement. Therefore, in the event of any breach by the Vendor of this Agreement, the Purchaser shall have the right, at its election and without prejudice to any of its other rights and remedies, to obtain an order for specific performance of this Agreement, without the need to post a bond or other security, to prove any actual damage or to prove that money damages would not provide an adequate remedy.
12.1 Entire Agreement
In and for the purposes of this Agreement:
(a) words importing the singular include the plural and vice versa, and words importing gender include all genders;
(b) the provisions of headings and the division of this Agreement into sections, subsections and paragraphs is for the convenience of reference only and shall not affect the interpretation of this Agreement;
(c) unless otherwise stated, all references in this Agreement to a designated "section", "subsection" or other subdivision is to the designated section, subsection or other subdivision of this Agreement;
(d) no supplement, amendment, modification, waiver or termination of this Agreement will be binding unless executed in writing by the party to be bound thereby. No waiver of any of the provisions of this Agreement will be deemed or will constitute a waiver of any other provision (whether or not similar) or will such waiver constitute a continuing waiver unless otherwise expressly provided; and
(e) this Agreement and all schedules attached hereto, together with any other documents to be delivered pursuant hereto, constitute the entire agreement between the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussion whether oral or written, of the parties and there are no warranties, representations or other agreements between the parties in connection with the subject matter hereof except as specifically set forth herein.
12.2 Binding Agreement
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns; provided, that neither this Agreement nor any right hereunder shall be assignable by the Purchaser, or the Vendor without the prior written consent of the other parties.
12.3 Independent Legal Advice
The Vendor acknowledges and agrees that Fraser and Company LLP is the legal counsel for only the Purchaser. Xxxxx Xxxxxxx, a partner at Fraser and Company LLP is a shareholder of the Purchaser, and as a consequence, the directors of the Purchaser has been advised to seek independent legal advice prior to signing this Agreement. In the event of a dispute between any of the parties, Fraser and Company LLP will not represent any party in any such dispute.
The Vendor, by signing this Agreement, hereby represents and warrants to the Purchaser and Fraser and Company LLP that the Vendor has had the opportunity to seek, and was not prevented nor discouraged by the Purchaser or Fraser and Company LLP from seeking independent legal advice prior to the execution and delivery of this Agreement and that, in the event that the Vendor did not avail itself of that opportunity prior to signing this Agreement, the Vendor did so voluntarily without any undue pressure and agrees that failure to obtain independent legal advice shall not be used as a defence to the enforcement of obligations under this Agreement.
All monies which are referred to in this Agreement are, unless expressly stated otherwise, expressed in lawful money of United States of America.
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, such determination shall not impair or affect the validity, legality or enforceability of the remaining provisions hereof, and each provision is hereby declared to be separate, severable and distinct.
12.6 Governing Law
This Agreement shall be governed by and construed in accordance with the laws of the Province of British Columbia which shall be deemed to be the proper law hereof and in so doing the Courts of British Columbia shall have jurisdiction (but not exclusive jurisdiction) to:
(a) entertain and determine all disputes and claims, whether for specific performance, injunction, declaration, or otherwise howsoever both at law and in equity, arising out of or in any way connected with the construction, breach, or alleged, threatened, or anticipated breach of this Agreement; and
(b) hear and determine all questions concerning validity, existence, or enforceability thereof.
All notices or other communications required hereunder shall be in writing and shall be sufficient in all respects and shall be deemed delivered, if sent via registered or certified mail, postage prepaid and properly addressed, 15 days following the date of mailing; if sent by a courier service (e.g. FedEx), the fourth business day following dispatch; if transmitted by facsimile, one (1) business day after the time of facsimile transmission; or if by personal delivery, on the date of physical delivery:
To the Purchaser:
Xxxxxxx Lake Minerals Inc.
Suite 520 - 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Fax no.: (000) 000-0000
With a copy to:
Fraser and Company LLP
Suite 1200 - 000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxxxx
Fax no.: (000) 000-0000
To the Vendor:
Hydro-Geos Consulting Group Tanzania Limited
X.X. Xxx 00000
Xxx xx Xxxxxx, Xxxxxxxx
Fax no.: (255) (00) 0000000
12.8 Time of Essence
Time shall be of the essence of this Agreement.
The parties executing this Agreement on behalf of the Vendor and Purchaser represent and warrant that they have been authorized by their respective company to enter into this Agreement and to bind their respective company to all the provisions of this Agreement.
12.10 Counterparts and Facsimiles
This Agreement may be executed by the parties hereto in as many counterparts as may be necessary, and each such agreement so executed shall be deemed to be an original and, provided that all of the parties have executed a counterpart, such counterparts together shall constitute a valid and binding agreement, and notwithstanding the date of execution shall be deemed to bear the date as set forth above. Such executed copy may be transmitted by telecopied facsimile or other electronic method of transmission, and the reproduction of signatures by facsimile or other electronic method of transmission will be treated as binding as if originals.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.