SUPPORT AGREEMENT between BARRICK GOLD CORPORATION - and - ARIZONA STAR RESOURCE CORP.
EXHIBIT
99.2
EXECUTION
VERSION
between
XXXXXXX
GOLD CORPORATION
-
and -
ARIZONA
STAR RESOURCE CORP.
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October
28, 2007
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INTERPRETATION
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2
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7
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8
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8
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THE
OFFER
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8
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11
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13
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14
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15
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15
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15
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16
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REPRESENTATIONS
AND WARRANTIES OF BARRICK
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REPRESENTATIONS
AND WARRANTIES OF ARIZONA STAR
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CONDUCT
OF BUSINESS
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16
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OTHER
COVENANTS
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21
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21
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27
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27
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27
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28
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28
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28
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TERMINATION,
AMENDMENT AND WAIVER
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29
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32
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33
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33
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33
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GENERAL
PROVISIONS
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34
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34
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34
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34
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36
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36
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36
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8.8
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36
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36
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36
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37
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Schedule
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Description
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MEMORANDUM
OF AGREEMENT made as of the 28th day of October, 2007.
BETWEEN:
XXXXXXX
GOLD CORPORATION,
a
corporation existing under the laws of the Province of Ontario,
(hereinafter
called "Barrick")
-
and
-
ARIZONA
STAR RESOURCE CORP.,
a
corporation existing under the laws of the Province of British
Columbia,
(hereinafter
called "Arizona Star")
WHEREAS
Barrick is prepared to make the Offer (as hereinafter defined);
AND
WHEREAS contemporaneously herewith, Barrick has entered into a lock-up agreement
(each, a "Lock-Up Agreement") with each of the Locked-Up
Shareholders (as hereinafter defined) pursuant to which, among other things,
such Locked-Up Shareholders have agreed to tender to the Offer all of the
Common
Shares (as hereinafter defined) held by them, all on the terms and subject
to
the conditions set forth in the Lock-Up Agreement;
AND
WHEREAS the board of directors of Arizona Star (the "Board of
Directors") has unanimously determined, after receiving financial and
legal advice and following the receipt and review of recommendations from
the
Special Committee (as hereinafter defined), that it would be advisable and
in
the best interests of Arizona Star and the Shareholders (as hereinafter defined)
(other than Barrick) for the Board of Directors to take all reasonable action
to
support the Offer and to recommend acceptance of the Offer to Shareholders
in
writing, all on the terms and subject to the conditions contained
herein;
NOW
THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged
by
each party, the parties hereby covenant and agree as follows:
INTERPRETATION
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1.1
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In
this
Agreement (including the Schedules hereto), the following terms shall have
the
following meanings, and grammatical variations shall have the respective
corresponding meanings:
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(a)
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"Acquisition
Proposal" has the meaning set out in Section
6.2(a)(i);
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(b)
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"affiliate"
means an "affiliate" as defined in National Instrument 45-106 "Prospectus
and Registration Exemptions";
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(c)
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"Alternative
Transaction" has the meaning set out in Section
2.8(b);
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(d)
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"AMEX"
means the American Stock Exchange;
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(e)
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"Applicable
Securities Laws" has the meaning set out in Section
2.1(b);
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(f)
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"Arizona
Star" means Arizona Star Resource Corp., a corporation existing
under the laws of the Province of British
Columbia;
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(g)
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"Arizona
Star Public Documents" means all documents filed by Arizona Star
under Applicable Securities Laws since May 1,
2006;
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(h)
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"Arizona
StarSubsidiaries" means Subsidiaries of Arizona
Star, including CC28523 Limited, AC40689 Limited and
CMC;
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(i)
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"Authorization"
means any authorization, order, permit, approval, grant, licence,
registration, consent, right, notification, condition, franchise,
privilege, certificate, judgment, writ, injunction, award, determination,
direction, decision, decree, by-law, rule or regulation, whether
or not
having the force of Law;
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(j)
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"Barrick"
means Xxxxxxx Gold Corporation, a corporation existing under the
laws of
the Province of Ontario;
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(k)
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"Barrick
Assignee" has the meaning set out in Section
7.2(c);
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(l)
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"Barrick
Percentage" has the meaning set out in Section
2.6;
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(m)
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"Barrick
Subsidiaries" means Subsidiaries of
Barrick;
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(n)
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"BCBCA"
means the Business Corporations Act (British Columbia), as
amended;
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(o)
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"Board
of Directors" has the meaning set out in the
recitals;
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(p)
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"business
day" means any day (other than a Saturday or Sunday) on which
commercial banks located in Toronto, Canada are open for the conduct
of
business;
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(q)
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"Change
in Control Time" has the meaning set out in Section
2.6;
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(r)
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"Circular"
has the meaning set out in Section
2.1(b);
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(s)
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"CMC"
means Compañía Xxxxxx Xxxxxx
Limitada;
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(t)
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"Common
Shares" means the common shares of Arizona Star, including common
shares issued on the exercise of Options or upon the conversion,
exchange
or exercise of any other Convertible Securities, and the associated
SRP
Rights, and "Common Share" means any one common share of
Arizona Star and its associated SRP
Right;
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(u)
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"Compulsory
Acquisition" has the meaning set out in Section
2.7;
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(v)
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"Confidentiality
Agreement" means the confidentiality agreement dated October 18,
2007 between Barrick and Arizona
Star;
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(w)
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"Contemplated
Transactions" means the Offer, the take-up of Common Shares by
Barrick pursuant to the Offer, the transactions contemplated by
the
Lock-Up Agreements, any Compulsory Acquisition, any Subsequent
Acquisition
Transaction, any subsequent amalgamation, merger or other business
combination of Barrick (or any of its affiliates) and Arizona Star,
and
any Alternative Transaction;
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(x)
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"Convertible
Securities" has the meaning set out in Section
2.1(a);
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(y)
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"Directors'
Circular" has the meaning set out in Section
2.1(h)(vi);
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(z)
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"Disclosure
Letter" means the letter dated of even date herewith from Arizona
Star to Barrick delivered concurrently with this
Agreement;
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(aa)
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"Effective
Time" has the meaning set out in Section
5.1;
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(bb)
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"Encumbrance"
includes any mortgage, pledge, assignment, charge, lien, claim,
security
interest, adverse interest, adverse claim, other third person interest
or
encumbrance of any kind, whether contingent or absolute, and any
agreement, option, right or privilege (whether by Law, contract
or
otherwise) capable of becoming any of the
foregoing;
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(cc)
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"Expiry
Date" has the meaning set out in Section
2.1(e);
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(dd)
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"Expiry
Time" has the meaning set out in Section
2.1(e);
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(ee)
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"fully-diluted
basis" means, with respect to the number of outstanding Common
Shares at any time, the number of Common Shares that would be outstanding
if all rights to acquire Common Shares, other than SRP Rights,
were
exercised, including, for greater certainty, all Common Shares
issuable
upon the exercise of Options, whether vested or
unvested;
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(ff)
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"GAAP"
means generally accepted accounting principles as set out in the
Handbook
of the Canadian Institute of Chartered Accountants, as amended
from time
to time;
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(gg)
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"Governmental
Entity" means:
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(i)
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any
supranational body or organization, nation, government, state,
province,
country, territory, municipality, quasi-government, administrative,
judicial or regulatory authority, agency, board, body, bureau,
commission,
instrumentality, court or tribunal or any political subdivision
thereof,
or any central bank (or similar monetary or regulatory authority)
thereof,
any taxing authority, any ministry or department or agency of any
of the
foregoing;
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(ii)
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any
entity exercising executive, legislative, judicial, regulatory
or
administrative functions of or pertaining to government, including
any
court; and
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(iii)
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any
corporation or other entity owned or controlled, through stock
or capital
ownership or otherwise, by any of such entities or other
bodies;
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(hh)
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"Latest
Mailing Time" has the meaning set out in Section
2.1(b);
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(ii)
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"Laws"
means any applicable laws, including supranational, national, provincial,
state, municipal and local civil, commercial, banking, securities,
tax,
personal and real property, security, mining, environmental, water,
energy, investment, property ownership, land use and zoning, sanitary,
occupational health and safety laws, treaties, statutes, ordinances,
judgments, decrees, injunctions, writs, certificates and orders,
by-laws,
rules, regulations, ordinances, protocols, codes, guidelines, policies,
notices, directions or other requirements of any Governmental
Entity;
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(jj)
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"Lock-Up
Agreement" has the meaning set out in the recitals to this
Agreement;
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(kk)
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"Locked-Up
Shareholders" means FMCI Resources Ltd., Xxxx Xxxxxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxx Xxxxxx
and
Xxxxxxxxxxx Xxxxxxxx, who together hold not less than 35.3727%
of the
issued and outstanding Common Shares on a fully-diluted
basis;
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(ll)
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"Material
Adverse Effect" means, in respect of any person, an effect that
is, or would reasonably be expected to be, material and adverse
to the
business, properties, assets, liabilities (including any contingent
liabilities that may arise
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through
outstanding, pending or threatened litigation
or otherwise), capitalization, condition (financial or otherwise), operations,
results of operations or prospects of that person and its Subsidiaries taken
as
a whole, other than any effect:
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(i)
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relating
to the Canadian, United States or Chilean economy, political conditions
or
securities markets in general;
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(ii)
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affecting
the global mining industry in
general;
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(iii)
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relating
to a change in the market trading price of shares of that person,
either:
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(A)
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related
to this Agreement and the Offer or the announcement thereof;
or
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(B)
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related
to such a change in that market trading price primarily resulting
from a
change, effect, event or occurrence excluded from this definition
of
Material Adverse Effect under clause (i), (ii) or (iv)
hereof;
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(iv)
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relating
to any generally applicable change in applicable Laws or regulations
(other than orders, judgments or decrees against that person any
of its
Subsidiaries) or generally applicable change in
GAAP;
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(v)
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relating
to the failure by that person to meet any earnings projections,
earnings
forecasts or earnings estimates, whether internal or publicly announced;
or
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(vi)
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any
hostilities, acts of war or terrorism or any material escalation
of any of
such hostilities, acts of war or terrorism existing as of the date
hereof;
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provided,
however, that such effect referred to in clause (i), (ii), (iv) or (v) above
does not primarily relate only to (or have the effect of primarily relating
only
to) that person and its Subsidiaries, taken as a whole, or disproportionately
adversely affect that person and its Subsidiaries, taken as a whole, compared
to
other companies of similar size operating in the industry in which that person
and its Subsidiaries operate;
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(mm)
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"Mineral
Rights" has the meaning set out in Section 22(a) of Schedule
C;
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(nn)
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"Minimum
Tender Condition" has the meaning set out in item (a) of Schedule
A;
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(oo)
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"Offer"
has the meaning set out in Section
2.1(a);
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(pp)
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"Offer
Price" has the meaning set out in Section
2.1(a);
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(qq)
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"Options"
means outstanding options to acquire Common Shares of Arizona Star
under
the Stock Option Plan;
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(rr)
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"Outside
Date" has the meaning set out in Section
7.1(e);
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(ss)
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"party"
means a party to this Agreement, unless the context otherwise
requires;
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(tt)
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"Pension
Plan" means (i) a "pension plan" or "plan" which is subject
to
the Income Tax Act (Canada), the Pensions Benefit Act
(Ontario) or any applicable pension benefits standards legislation
in any
other jurisdiction of Canada which is applicable to the employees
of
Arizona Star or any Arizona Star Subsidiary resident in Canada,
and (ii)
any foreign pension benefits plan, defined benefit plan or similar
arrangement applicable to any employee of Arizona Star or any Arizona
Star
Subsidiary;
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(uu)
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"person"
includes an individual, general partnership, limited partnership,
corporation, company, limited liability company, body corporate,
joint
venture, unincorporated organization, other form of business organization,
trust, trustee, executor, administrator or other legal
representative;
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(vv)
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"Pre-Acquisition
Reorganization" has the meaning set out in Section
6.8;
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(ww)
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"Property"
has the meaning set out in Section 22(a) of Schedule
C;
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(xx)
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"Right
to Match Period" has the meaning set out in Section
6.2(g)(iv);
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(yy)
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"Shareholder
Rights Plan" means the
shareholder rights plan agreement dated as of November 9, 2005
entered
into between Arizona Star and Computershare Investor Services Inc.,
as
rights agent, as amended by amendment agreement no. 1 dated October
13,
2006;
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(zz)
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"Shareholders"
means the holders of Common Shares;
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(aaa)
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"Special
Committee" means the special committee of
the Board of Directors;
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(bbb)
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"SRP
Right" means a right issued pursuant to the Shareholder
Rights
Plan;
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(ccc)
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"Stock
Option Plan" means the Arizona Star stock option plan effective
September 15, 2003 and approved by the Shareholders on
October 23, 2003,
and any other plan, agreement or arrangement which provides
for the
issuance of options to acquire Common
Shares;
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(ddd)
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"Subsequent
Acquisition Transaction" has the meaning set out in Section
2.7;
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(eee)
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"Subsidiary"
means a "subsidiary" as defined in National Instrument 45-106
"Prospectus
and Registration
Exemptions";
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(fff)
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"Superior
Proposal" has the meaning set out in Section
6.2(a);
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(ggg)
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"Taxes"
means, with respect to any person, all supranational, federal,
state,
local, provincial, branch or other taxes, including income,
gross
receipts, windfall profits, value added, severance, ad valorem,
property,
capital, net worth, production, sales, use, licence, excise,
franchise,
employment, environmental taxes, sales taxes, use taxes,
value added
taxes, transfer taxes, withholding or similar taxes, payroll
taxes,
employment taxes, pension plan premiums, social security
premiums,
workers' compensation premiums, employment insurance or compensation
premiums, stamp taxes, occupation taxes, premium taxes, mining
taxes,
alternative or add-on minimum taxes, goods and services tax,
customs
duties or other taxes of any kind whatsoever imposed or charged
by any
Governmental Entity, together with any interest, penalties,
or additions
with respect thereto and any interest in respect of such
additions or
penalties;
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(hhh)
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"Termination
Payment" has the meaning set out in Section
7.2(a);
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(iii)
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"Termination
Payment Event" has the meaning set out in Section
7.2(a);
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(jjj)
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"TSXV"
means the TSX Venture Exchange; and
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(kkk)
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"US
Exchange Act" means the United States Securities Exchange Act
of 1934, as
amended.
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In
this
Agreement, unless otherwise expressly stated or the context otherwise
requires:
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(a)
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references
to "herein", "hereby", "hereunder", "hereof" and similar expressions
are
references to this Agreement and not to any particular Section
of or
Schedule to this Agreement;
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(b)
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references
to a "Section" or a "Schedule" are references to a Section of or
Schedule
to this Agreement;
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(c)
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words
importing the singular shall include the plural and vice versa,
and words
importing gender shall include the masculine, feminine and neuter
genders;
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(d)
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the
use of headings is for convenience of reference only and shall
not affect
the construction or interpretation
hereof;
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(e)
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references
to any legislation or to any provision of any legislation shall
include
any legislative provision substituted therefor and all regulations,
rules
and interpretations issued thereunder or pursuant thereto, in each
case as
the same may have been or may hereafter be amended or re-enacted
from time
to time;
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(f)
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references
to any agreement or document shall be to such agreement or document
(together with all schedules and exhibits thereto), as it may have
been or
may hereafter be amended, supplemented, replaced or restated from
time to
time;
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(g)
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wherever
the term "includes" or "including" is used, it shall be deemed
to mean
"includes, without limitation" or "including, without limitation",
respectively; and
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(h)
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references
to the knowledge of a party means the actual knowledge of the senior
officers of such party.
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1.3
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Unless
otherwise indicated, all dollar amounts referred to in this Agreement are
expressed in Canadian dollars.
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1.4
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The
Schedules to this Agreement, as listed below, are an integral part of this
Agreement:
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Schedule
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Description
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A
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Conditions
of the Offer
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B
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Representations
and Warranties of Barrick
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C
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Representations
and Warranties of Arizona Star
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ARTICLE 2
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2.1
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(a) Barrick
shall promptly publicly announce its intention to make an offer and, subject
to
the terms and conditions set forth below, make an offer (the
"Offer") to purchase all outstanding Common Shares, including
Common Shares issuable (and that, prior to the Expiry Time (as defined below)
are actually issued) upon the exercise of Options or on the conversion, exchange
or exercise of other securities of Arizona Star that are convertible into
or
exchangeable or exercisable for Common Shares (together with the Options,
collectively, the "Convertible Securities"), at a price per
Common Share of $18.00 in cash (the "Offer
Price"). The term "Offer" shall include any
amendments to, or extensions of, the Offer made in accordance with the terms
of
this Agreement, including removing or waiving any condition or extending
the
date by which Common Shares may be deposited. Barrick shall not be
required to make the Offer in any jurisdiction where it would be illegal
to do
so.
(b) Barrick
shall mail the Offer and accompanying take-over bid circular (collectively,
the
"Circular") in accordance with the Securities Act
(Ontario) and the regulations thereunder and all other applicable securities
Laws (collectively, "Applicable Securities Laws") to each
registered holder of Common Shares as soon as reasonably practicable and,
in any
event, not later than 11:59 p.m. (Toronto time) on November 9, 2007 (such
time
on such date being referred to herein as the "Latest Mailing
Time"); provided, however, that (i) if the mailing of the Circular is
delayed by reason of Arizona Star not having provided to Barrick the Directors'
Circular in accordance with Section 2.1(h)(vi) as well as any information
pertaining to Arizona Star that is necessary for the completion of the Circular
by Barrick, or not having provided
Barrick
with such other assistance in the preparation
of the Circular as may be reasonably requested by Barrick in order that the
Circular comply in all material respects with Applicable Securities Laws,
or not
having provided the lists and other information and assistance referred to
in
Section 2.1(h)(vii), then the Latest Mailing Time shall be extended to 11:59
p.m. (Toronto time) on the fourth business day following the date on which
Arizona Star supplies such necessary documents, information, lists or other
assistance, (ii) if the mailing of the Circular is delayed by reason of an
injunction, order or any other action made or taken by a Governmental Entity,
then, provided that such injunction, order or other action is being contested
or
appealed by Barrick, the Latest Mailing Time shall be extended to 11:59 p.m.
(Toronto time) on the fourth business day following the date on which such
injunction, order or other action ceases to be in effect, and (iii) if the
Latest Mailing Time occurs during or within four business days following
the end
of a Right to Match Period, then the Latest Mailing Time shall be extended
to
11:59 p.m. (Toronto time) on the fourth business day following the end of
such
Right to Match Period.
(c) Prior
to the printing of the Circular, Barrick shall provide Arizona Star and its
counsel with a reasonable opportunity to review and comment on it, recognizing
that whether or not such comments are appropriate will be determined by Barrick,
acting reasonably.
(d) Provided
all of the conditions to the Offer set out in Schedule A hereto shall have
been
satisfied or waived, Barrick shall take up and pay for all of the Common
Shares
tendered under the Offer promptly and, in any event, not later than two business
days following the time at which Barrick becomes entitled to take up such
Common
Shares under the Offer pursuant to Applicable Securities Law.
(e) The
Offer shall be made in accordance with Applicable Securities Laws and shall
expire not earlier than 6:00 p.m. (Toronto time) on the 36th day after the
Circular is mailed to all registered holders of Common Shares, subject to
the
right of Barrick to extend from time to time the period during which Common
Shares may be deposited under the Offer (such date, as the same may be extended,
is referred to herein as the "Expiry Date" and such time on
such date, as the same may be extended, is referred to herein as the
"Expiry Time"). The Offer shall be subject to the
conditions set forth in Schedule A to this Agreement. Barrick shall
use its all reasonable efforts to consummate the Offer, subject to the terms
and
conditions hereof and thereof.
(f) Barrick
and Arizona Star will make all required filings in Canada and the United
States
under Applicable Securities Laws with respect to the Offer (together with
all
amendments, supplements and exhibits as may be required thereunder) and any
solicitation/recommendation statement and all such subsequent filings as
may be
required under the Applicable Securities Laws. Each of Barrick and
Arizona Star agrees promptly to correct any information provided by it if
and to
the extent that such information shall have become false or misleading in
any
material respect and take such steps as are required to make amended filings
to
the extent required under the Applicable Securities Laws.
(g) It
is understood and agreed that Barrick may, in its sole discretion, modify
or
waive any term or condition of the Offer; provided that Barrick shall not,
without the prior consent of Arizona Star, increase the Minimum Tender
Condition, impose additional conditions to the Offer, decrease the consideration
per Common Share, decrease the number of Common
Shares
in respect of which the Offer is made,
change the form of consideration payable under the Offer (other than to increase
the total consideration per Common Share and/or add additional consideration
or
consideration alternatives) or otherwise vary the Offer or any terms or
conditions thereof (which for greater certainty does not include a waiver
of a
condition) in a manner which is adverse to the Shareholders.
(h) The
obligation of Barrick to make the Offer is conditional on the prior satisfaction
of the following conditions, all of which conditions are included for the
sole
benefit of Barrick and any or all of which may be waived by Barrick in whole
or
in part in its sole discretion (other than the condition set out in Section
2.1(h)(iv) below, which must be waived if Barrick has failed to use its
commercially reasonable efforts to obtain such assurances, and the condition
set
out in Section 2.1(h)(xi) below, which may be waived only with the consent
of
Arizona Star) without prejudice to any other right it may have under this
Agreement and which conditions shall be deemed to have been waived by the
making
of the Offer:
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(i)
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the
obligations of Barrick hereunder shall not have been terminated
pursuant
to Section 7.1;
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|
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(ii)
|
the
Lock-Up Agreements shall have been duly executed and delivered
by each of
the Locked-Up Shareholders on the date of this
Agreement;
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(iii)
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no
change, effect, event, circumstance, occurrence or state of facts
(other
than a change, effect, event, circumstance, occurrence or state
of facts
caused by Barrick, a Barrick Subsidiary or any person acting jointly
or in
concert with Barrick) shall have occurred that would render it
impossible
for one or more of the conditions set out on Schedule A hereto
to be
satisfied;
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(iv)
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assurances
satisfactory to Barrick, acting reasonably, shall have been received
by
Barrick that all waivers, rulings or orders necessary for Barrick
to make
the Offer and to mail to the Shareholders the Circular have been
or will
be obtained from all applicable securities commissions or other
regulatory
authorities;
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(v)
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the
Board of Directors shall have unanimously recommended that Shareholders
accept the Offer in accordance with Section 2.2(a)(ii) and shall
not have
withdrawn such recommendation or changed, modified or qualified
such
recommendation in a manner that has substantially the same effect
or taken
any other action or made any other public statement in connection
with the
Offer inconsistent with such
recommendation;
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(vi)
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the
Board of Directors shall have prepared and approved in final form,
printed
for distribution to Shareholders and delivered to the depositary
of the
Offer, at its offices in Toronto, Ontario on or before 9:00 a.m.
(Toronto
time) on November 9, 2007 (or such earlier date as may be agreed
by
Barrick and Arizona Star, acting reasonably) for mailing with the
Circular
a sufficient quantity of commercial copies of a directors'
|
circular
(the "Directors' Circular")
in both the English and French languages unanimously recommending that
Shareholders accept the Offer;
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(vii)
|
on
November 1, 2007, Arizona Star shall have provided to Barrick a
list of
all registered holders of Common Shares, Options and any other
Convertible
Securities, in each case in electronic form and as of to the close
of
business on October 31, 2007, including address and securityholding
information for each person, and Arizona Star shall from time to
time
thereafter promptly provide supplements of such lists to reflect
any
changes to the holders of Common Shares, Options and other Convertible
Securities, as applicable, or such other information, mailing labels
or
other assistance as Barrick may reasonably request in order to
be able to
communicate to holders of Common Shares, Options and other Convertible
Securities;
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(viii)
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no
Material Adverse Effect in respect of Arizona Star shall have occurred
since the date hereof;
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(ix)
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Arizona
Star shall have complied in all material respects with its covenants
in
Section 6.2 and in all material respects (without giving effect to,
applying or taking into consideration any materiality qualification
already contained in such covenant or obligation) with its other
covenants
in this Agreement;
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(x)
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all
representations and warranties of Arizona Star set forth in this
Agreement
shall be true and correct in all material respects (without giving
effect
to, applying or taking into consideration any materiality or Material
Adverse Effect qualification already contained within such representation
or warranty) at the time of the making of the Offer;
and
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(xi)
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no
cease trade order, injunction or other prohibition at Law shall
exist
against Barrick making the Offer or taking up or paying for Common
Shares
deposited under the Offer.
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(i) Prior
to printing the Directors' Circular, Arizona Star shall provide Barrick with
a
reasonable opportunity to review and comment on it, recognizing that whether
or
not such comments are appropriate will be determined by Arizona Star, acting
reasonably. The Directors' Circular shall include a copy of the
written fairness opinion of Citigroup Global Markets Inc. referred to
below.
(a) Arizona
Star represents and warrants to and in favour of Barrick, and acknowledges
that
Barrick is relying upon such representations and warranties in entering into
this Agreement, that as of the date hereof:
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(i)
|
the
Special Committee has received an opinion from its financial advisor,
Citigroup Global Markets Inc., to the effect that, as of the date
of
such
|
opinion,
the Offer Price to be received under the
Offer by Shareholders (other than Barrick and its affiliates) is fair, from
a
financial point of view, to such Shareholders;
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(ii)
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the
Board of Directors, upon consultation with its financial and legal
advisors and on receipt of a recommendation of the Special Committee,
has
unanimously determined that the Offer is in the best interests
of Arizona
Star and the Shareholders, and accordingly, has unanimously approved
the
entering into of this Agreement and the making of a recommendation
that
Shareholders (other than Barrick) accept the
Offer;
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(iii)
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each
member of the Board of Directors has agreed to support the Offer
and has
agreed that the press release to be issued by Barrick announcing
the Offer
may so state and that references to such support may be made in
the
Circular and other documents relating to the Offer;
and
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(iv)
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the
Board of Directors has by resolution deferred separation of the
SRP Rights
with respect to the Contemplated Transactions until a time to be
determined by the Board of Directors (to be no earlier than immediately
after the Expiry Time), and has irrevocably waived or suspended
the
operation of or otherwise rendered the Shareholder Rights Plan
inoperative
against the Offer and the acquisition of Common Shares pursuant
thereto
with effect as of thirty minutes prior to the scheduled expiry
time (on
the first scheduled expiry date of the Offer upon which Barrick
elects to
take up Common Shares deposited pursuant to the
Offer.
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(b) Arizona
Star shall prepare and make available for distribution contemporaneously
and
together with the mailing of the Circular, in both the English and French
languages as circumstances may require, sufficient commercial copies of the
Directors' Circular, prepared in all material respects in accordance with
all
Applicable Securities Laws and delivered in accordance with Section 2.1(h)(vi),
which shall reflect the determinations and recommendation and agreement by
the
Board of Directors referred to in Section 2.2(a). Arizona Star shall
take all reasonable actions to support the Offer and ensure the success of
the
Offer in accordance with this Agreement and Arizona Star shall provide Barrick
with any information pertaining to Arizona Star and the Arizona Star
Subsidiaries that is necessary or desirable for the completion of the Circular
by Barrick, and shall provide Barrick with such other assistance in the
preparation of the Circular as may be reasonably requested by
Barrick. Notwithstanding the foregoing, if after the date
hereof:
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(i)
|
any
representation or warranty made by Barrick in this Agreement shall
be
untrue or incorrect in any material respect at any time prior to
the
Expiry Time and such inaccuracy is reasonably likely to prevent,
restrict
or materially delay consummation of the Offer and is not curable
or, if
curable, is not cured by the earlier of the date which is 15 days
from the
date of written notice of such breach and the Expiry
Time;
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(ii)
|
the
Board of Directors shall become aware of any untrue statement of
a
material fact, or an omission to state a material fact that is
required to
be stated or that is necessary to make a statement not misleading
in light
of the circumstances in which it was made, in the Circular or Directors'
Circular relating to Barrick; or
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(iii)
|
the
Board of Directors is otherwise required in the exercise of its
fiduciary
duties to do so;
|
then
the
Board of Directors shall be entitled to not make such a positive recommendation,
to make a negative recommendation or to withdraw, modify or change any
recommendation regarding the Offer which it has previously made, provided
that:
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|
(X)
|
the
Board of Directors, acting in good faith and upon the advice of
its legal
advisors where appropriate, shall first have determined that the
making of
a positive recommendation, the failure to make a negative recommendation
or the failure to withdraw, modify or change any recommendation
regarding
the Offer would be inconsistent with the fiduciary duties of the
Board of
Directors; and
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(Y)
|
not
making such a positive recommendation, making a negative recommendation
or
so withdrawing, modifying or changing a recommendation regarding
the Offer
is otherwise in accordance with the terms of this
Agreement.
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(c) Arizona
Star shall provide to Barrick all information regarding Arizona Star that
is
required for the preparation of the Circular. Arizona Star
represents, warrants and covenants that such information will be true and
correct in all material respects as at the date of the Circular and will
not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) Arizona
Star hereby consents, pursuant to Section 10 of the Confidentiality Agreement,
to the announcement of Xxxxxxx'x intention to make the Offer, the making
of the
Offer and the consummation of the Contemplated Transactions.
(a) Barrick
acknowledges and agrees that:
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|
(i)
|
the
Board of Directors shall resolve to permit all persons holding
Options,
which by their terms are otherwise currently exercisable or not,
to
exercise such Options concurrent with the first scheduled expiry
time of
the Offer in respect of which Barrick takes up Common Shares, including
by
causing the vesting thereof to be
accelerated;
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(ii)
|
it
shall agree with Arizona Star to tendering arrangements in respect
of the
Offer in order to facilitate the conditional exercise of the Options
and
|
tender
to the Offer, concurrent with the first
scheduled expiry time of the Offer in respect of which Barrick takes up Common
Shares, of the Common Shares to be issued as a result of such conditional
exercise (including providing for the ability of holders of Options to tender
the Common Shares issuable upon such conditional exercise of their Options
on
the basis of guaranteed deliveries); and
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(iii)
|
(A)
holders of Options will be permitted to tender Common Shares issuable
upon
the exercise thereof and for such purpose to exercise their Options,
conditional upon Barrick taking up and paying for the Common Shares
under
the Offer, which Options shall be deemed to have been exercised
concurrent
with the first scheduled expiry time of the Offer in respect of
which
Barrick takes up Common Shares and (B) all Common Shares that are
to be
issued pursuant to any such conditional exercise shall be accepted
as
validly tendered under the Offer, provided that the holders of
such
Options indicate that the Common Shares are tendered pursuant to
the Offer
and otherwise validly accept the Offer in accordance with its terms
with
respect to such Shares.
|
(a) Without
limiting Section 2.2(a)(iv), Arizona Star and the Board of Directors shall
take
all further action necessary:
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(i)
|
in
order to ensure that the Separation Time (as defined in the Shareholder
Rights Plan) does not occur in connection with this Agreement or
any of
the Contemplated Transactions;
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(ii)
|
otherwise
to give effect to the waiver, if required, of the application of
the
Shareholder Rights Plan to the Contemplated Transactions and to
ensure
that the Shareholder Rights Plan does not interfere with or impede
the
success of any of the Contemplated Transactions;
and
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|
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(iii)
|
in
order to ensure that upon the take-up of Common Shares pursuant
to the
Offer, all SRP Rights cease to be exercisable and are immediately
redeemed
at the "Redemption Price" as provided under the Shareholder Rights
Plan
without further formality and to ensure that upon such redemption
all SRP
Rights become null and void.
|
(b) Arizona
Star covenants that (i) it will not waive the application of the Shareholder
Rights Plan to any Acquisition Proposal unless it is a Superior Proposal
and the
Right to Match Period has expired and (ii) it will not amend the Shareholder
Rights Plan nor authorize, approve or adopt any other shareholder rights
plan or
enter into any agreement providing therefor. Notwithstanding the foregoing,
Arizona Star shall be entitled to defer the Separation Time in connection
with
an Acquisition Proposal.
From
and
after the time at which persons designated by Barrick represent a majority
of
the Board of Directors, Barrick will cause Arizona Star and the Arizona Star
Subsidiaries to comply with all of their respective obligations to the employees
and officers of Arizona Star and the Arizona Star Subsidiaries pursuant to
applicable Law.
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2.6
|
Arizona
Star acknowledges that promptly following the time (the "Change in
Control Time") at which Barrick takes up for purchase such number of
Common Shares as represents at least a majority of the then outstanding Common
Shares on a fully-diluted basis and from time to time thereafter, Barrick
shall
be entitled to designate such number of members of the Board of Directors,
and
any committees thereof, as is proportionate to the percentage of the outstanding
Common Shares beneficially owned from time to time by Barrick (the
"Barrick Percentage") and Arizona Star shall not frustrate
Xxxxxxx'x attempts to do so and covenants to co-operate with Barrick, subject
to
all applicable Laws, to enable Xxxxxxx'x designees to be elected or appointed
to
the Board of Directors, and any committee thereof, and to constitute the
Barrick
Percentage of the Board of Directors, including, at the request of Barrick,
by
its commercially reasonable best efforts to increase the size of the Board
of
Directors and to secure the resignations of such directors as Barrick may
request.
If,
within 120 days after the date of the Offer, the Offer has been accepted
by
holders of not less than 90% of the outstanding Common Shares as at the Expiry
Time, excluding Common Shares held by or on behalf of Barrick, or an "affiliate"
or an "associate" (as those terms are defined in the BCBCA) of Barrick, Barrick
may, to the extent possible, acquire (a "Compulsory
Acquisition") the remainder of the Common Shares from those
Shareholders who have not accepted the Offer pursuant to Section 300 of the
BCBCA. If that statutory right of acquisition is not available or
Barrick chooses not to avail itself of such statutory right of acquisition,
Barrick shall use its commercially reasonable efforts to pursue other means
of
acquiring the remaining Common Shares not tendered to the
Offer. Arizona Star agrees that, in the event Barrick takes up and
pays for Common Shares under the Offer representing at least a simple majority
of the outstanding Common Shares (calculated on a fully-diluted basis as
at the
Expiry Time), it will assist Barrick in connection with any proposed
amalgamation, statutory arrangement, amendment to articles, consolidation,
capital reorganization or other transaction involving Arizona Star and Barrick
or a Barrick Subsidiary that Barrick may, in its sole discretion, undertake
to
pursue (a "Subsequent Acquisition Transaction") to acquire the
remaining Common Shares, provided that the consideration per Common Share
offered in connection with the Subsequent Acquisition Transaction is at least
equivalent in value to the consideration per Common Share offered under the
Offer and provided that, in connection with a Subsequent Acquisition Transaction
consummated within 120 days of the Expiry Time, if such value is greater
than
that paid to Shareholders pursuant to the Offer, the Shareholders who accepted
the Offer will be "topped up" to be paid, when added to the consideration
per
Common Share paid pursuant to the Offer, the same value per Common Share
as is
received pursuant to such Subsequent Acquisition Transaction.
(a) Barrick
and Arizona Star agree to co-operate in good faith and to take all reasonable
steps and actions after the date hereof, as are not adverse to the party
requested to take any such step or action, to complete the Offer and the
other
transactions contemplated hereby as promptly as practicable.
(b) In
addition, in the event that Barrick concludes that it is necessary or desirable
to proceed with another form of transaction (such as a plan of arrangement
or
amalgamation) whereby Barrick or a Barrick Subsidiary would effectively acquire
all of the Common Shares within approximately the same time periods and on
economic terms and other terms and conditions (including, without limitation,
tax treatment) and having consequences to Arizona Star and its Shareholders
that
are equivalent to or better than those contemplated by this Agreement (an
"Alternative Transaction"), Arizona Star agrees to support the
completion of such Alternative Transaction in the same manner as the Offer
and
shall otherwise fulfill its covenants contained in this Agreement in respect
of
such Alternative Transaction.
REPRESENTATIONS
AND WARRANTIES OF BARRICK
Barrick
hereby makes to Arizona Star the representations and warranties set out in
Schedule B to this Agreement, and acknowledges that Arizona Star is relying
upon
these representations and warranties in connection with the entering into
of
this Agreement.
REPRESENTATIONS
AND WARRANTIES OF ARIZONA STAR
Arizona
Star hereby makes to Barrick the representations and warranties set out in
Schedule C to this Agreement, and acknowledges that Barrick is relying upon
these representations and warranties in connection with the entering into
of
this Agreement and making the Offer.
CONDUCT
OF BUSINESS
Arizona
Star covenants and agrees that, prior to the earlier of the time of the
appointment or election to the Board of Directors of persons designated by
Barrick who represent a majority of the directors of Arizona Star (the
"Effective Time") and the termination of this Agreement, unless
Barrick shall otherwise agree in writing or as otherwise expressly contemplated
or permitted by this Agreement, Arizona Star will, and will cause each of
the
Arizona Star Subsidiaries to:
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|
(a)
|
conduct
its and their respective businesses in the ordinary course consistent
with
past practice in all material respects and to use commercially
reasonable
efforts to
|
preserve
intact its and their present business
organization and goodwill, to preserve intact its and their respective real
property interests, mining leases, mining concessions, mining claims,
exploration permits or prospecting permits or other property, mineral or
proprietary interests or rights or contractual or other legal rights and
claims
in good standing, to keep available the services of its officers and employees
as a group and to maintain satisfactory relationships with suppliers,
distributors, employees and others having business relationships with
them;
|
|
(b)
|
not
split, consolidate or reclassify any of its outstanding shares
nor
undertake any other capital reorganization (except as required
by Section
6.8), nor declare, set aside or pay any dividends on or make any
other
distributions on or in respect of its outstanding shares, nor reduce
capital in respect of its outstanding
shares;
|
|
|
(c)
|
not
amend its articles or by-laws or the terms of any of its outstanding
securities, including any outstanding indebtedness and credit
facilities;
|
|
|
(d)
|
not
issue or sell or agree to issue or sell any securities (other than
the
issuance of Common Shares upon the exercise of currently outstanding
Options in accordance with their terms), or redeem, offer to purchase
or
purchase any of its outstanding
securities;
|
|
|
(e)
|
without
limiting the generality of Section 5.1(d), not authorize, approve,
agree
to issue, issue or award any Options under the Stock Option Plan
or any
other Convertible Securities;
|
|
|
(f)
|
except
for changes in compensation for employees, other than officers
and
directors, in the ordinary course of business consistent with past
practice and after prior consultation with Barrick, not enter into,
create, declare, adopt, amend, vary, modify or take any other action
with
respect to any bonus, target bonus, profit sharing, incentive,
salary or
other compensation, equity based award, pension, retirement, deferred
compensation, severance, change in control, employment or other
employee
benefit plan, agreement, trust fund, award or arrangement for the
benefit
or welfare of any officer, director or employee, or similar rights
or
other benefits;
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|
|
(g)
|
not
acquire or dispose of any securities, except in the ordinary course
of
business consistent with past
practice;
|
|
|
(h)
|
except
as contemplated in the current CMC approved plan and budget, a
copy of
which has been provided to Barrick on or before the date hereof,
not
acquire or commit to acquire any capital assets or group of related
capital assets (through one or more related or unrelated acquisitions)
having a value in excess of $100,000 in the
aggregate;
|
|
|
(i)
|
except
as contemplated in the current CMC approved plan and budget, a
copy of
which has been provided to Barrick on or before the date hereof,
not
incur, or commit to, capital expenditures in excess of $100,000
in the
aggregate;
|
|
|
(j)
|
except
as contemplated in the current CMC approved plan and budget, a
copy of
which has been provided to Barrick on or before the date hereof,
not sell,
lease, option, encumber or otherwise dispose of, or commit to sell,
lease,
option, encumber or otherwise dispose of, any assets or group of
related
assets (through one or more related or unrelated transactions)
having a
value in excess of $100,000 in the
aggregate;
|
|
|
(k)
|
not
approve any program or budget for CMC, or any amendment of, or
expenditures in excess of, any approved program or budget for
CMC;
|
|
|
(l)
|
not
approve the grant of any power of attorney to allow any person
to take any
action on behalf of CMC or the amendment of any power of attorney
allowing
any person to take any action on behalf of
CMC;
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|
|
(m)
|
not
enter into or complete any material transaction not in the ordinary
course
of business or in accordance with plans disclosed in the Arizona
Star
Public Documents filed (and available on SEDAR) on or before the
date
hereof;
|
|
|
(n)
|
(i)
not incur or commit to incur any indebtedness for borrowed money
(except
for indebtedness not to exceed $1,000,000 in the aggregate for
working
capital purposes) or issue any debt securities, (ii) not incur
or commit
to incur, or guarantee, endorse or otherwise become responsible
for, any
other material liability, obligation or indemnity or the obligation
of any
other person, or (iii) make any loans or advances to any
person;
|
|
|
(o)
|
not
make any changes to existing accounting policies other than as
required by
applicable Law or by GAAP;
|
|
|
(p)
|
not
pay, discharge or satisfy any material claims, liabilities or obligations
other than the payment, discharge or satisfaction, in the ordinary
course
of business consistent with past practice in accordance with their
terms,
of liabilities reflected or reserved against in Arizona Star's
financial
statements as at and for the period ended April 30, 2007 or incurred
in
the ordinary course of business consistent with past
practice;
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|
|
(q)
|
not
engage in any transaction with any related parties other than with
wholly-owned Subsidiaries in the ordinary course of business consistent
with past practice;
|
|
|
(r)
|
not
commit to or enter into any new arrangements, or modify any existing
arrangements, between Arizona Star and any shareholder or holder
of
Convertible Securities of Arizona Star owning or controlling more
than 1%
of the outstanding securities of any class of Arizona
Star;
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|
|
(s)
|
not
commence or settle or assign any rights relating to or any interest
in any
litigation, proceeding, claim, action, assessment or investigation
involving Arizona Star or any Arizona Star Subsidiary or material
asset of
either;
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|
(t)
|
use
its best efforts to maintain and preserve all of its rights under
each of
its material Mineral Rights and Properties and under each of its
material
Authorizations;
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|
|
(u)
|
not
waive, release, grant, transfer, exercise, modify or amend in any
material
respect, other than in the ordinary course of business consistent
with
past practice, (i) any existing contractual rights in respect of any
Mineral Rights or Properties or joint ventures of Arizona Star,
(ii) any
material Authorisation, lease, concession, contract or other document,
or
(iii) any other material legal rights or
claims;
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|
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(v)
|
not
enter into any interest rate, currency, equity or commodity swaps,
xxxxxx,
derivatives or other similar financial
instruments;
|
|
|
(w)
|
use
commercially reasonable efforts to cause its current insurance
(or
re-insurance) policies within its control or any of the coverage
thereunder not to lapse, unless simultaneously with such termination,
cancellation or lapse, replacement policies underwritten by insurance
and
re-insurance companies of nationally recognized standing providing
coverage equal to or greater than the coverage under the cancelled,
terminated or lapsed policies for substantially similar premiums
are in
full force and effect;
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|
|
(x)
|
not
increase any coverage or premiums under any directors' and officers'
insurance policy or enter into any new
policy;
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|
(y)
|
not
acquire or agree to acquire (by merger, amalgamation, arrangement,
acquisition of stock or assets or otherwise) any person or division
of any
person or make any investment either by purchase of shares or securities,
contributions of capital (other than to wholly-owned subsidiaries
of
Arizona Star), property transfer or purchase of any property or
assets of
any other person, except for purchases of inventory or equipment
in the
ordinary course of business consistent with past practice, and
except for
capital expenditures permitted by Section
5.1(i);
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(z)
|
not
adopt a plan of liquidation or resolutions providing for the liquidation
or dissolution of Arizona Star or any Arizona Star
Subsidiary;
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(aa)
|
duly
and timely file all material forms, reports, schedules, statements
and
other documents required to be filed pursuant to any applicable
corporate
Laws or Applicable Securities Laws;
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(bb)
|
(i)
duly and timely file all Tax returns required to be filed by it
on or
after the date hereof and all such Tax returns will be true, complete
and
correct; (ii) timely withhold, collect, remit and pay all Taxes
which are
to be withheld, collected, remitted or paid by it to the extent
due and
payable except for any Taxes contested in good faith pursuant to
applicable Laws; (iii) not make or rescind any material express
or deemed
election relating to Taxes; (iv) not make a request for a tax ruling
or
enter into a closing agreement with any taxing authorities; (v)
not settle
or compromise any material claim, action, suit, litigation, proceeding,
arbitration, investigation, audit or controversy relating to Taxes;
and
(vi) not
|
change
in any material respect any of its methods of
reporting income, deductions or accounting for income tax purposes from those
employed in the preparation of its income tax return for the tax year ending
April 30, 2006, except as may be required by applicable Laws;
|
|
(cc)
|
notify
Barrick immediately orally and then promptly in writing of (i)
any
material change (within the meaning of the Securities Act
(Ontario)) in relation to Arizona Star and of any material governmental
or
third party complaints, investigations or hearings (or communications
indicating that the same may be contemplated); and (ii) the occurrence,
or
failure to occur, of any event or state of facts which occurrence
or
failure would or would be likely to (x) cause any of the representations
or warranties of Arizona Star contained herein to be untrue or
inaccurate
(without giving effect to, applying or taking into consideration
any
materiality or Material Adverse Effect qualification already contained
within such representation or warranty) in any material respect;
or (y)
result in the failure in any material respect of Arizona Star to
comply
with or satisfy any covenant, condition or agreement (without giving
effect to, applying or taking into consideration any materiality
qualification already contained in such covenant, condition or
agreement)
to be complied with or satisfied prior to the Effective
Time;
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|
|
(dd)
|
except
as contemplated in Section 6.2, not enter into any transaction
or perform
any act which might interfere with or be materially inconsistent
with the
successful completion of the acquisition of Common Shares by Barrick
pursuant to the Offer or the successful completion of an Alternative
Transaction, a Compulsory Acquisition or Subsequent Acquisition
Transaction or which would render, or which may reasonably be expected
to
render, untrue or inaccurate (without giving effect to, applying
or taking
into consideration any materiality or Material Adverse Effect
qualification already contained within such representation or warranty)
in
any material respect any of Arizona Star's representations and
warranties
set forth in this Agreement;
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(ee)
|
without
limiting the generality of the foregoing, vote or cause to be voted
all
shares and other securities held by Arizona or any Arizona Subsidiary,
and
cause all nominees of Arizona or any Arizona Subsidiary on the
board of
directors or any management committee or other committee of any
Arizona
Subsidiary to vote, in a manner consistent with all of the foregoing
subsections, including voting against, or causing such persons
to vote
against, any resolution to approve any act, agreement or transaction
prohibited by any of the foregoing subsections;
and
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(ff)
|
not
announce an intention, enter into any formal or informal agreement,
or
otherwise make a commitment to do any of the things prohibited
by any of
the foregoing subsections.
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OTHER
COVENANTS
Subject
to the terms and conditions of this Agreement, each party hereto agrees to
co-operate in good faith and use commercially reasonable efforts to take,
or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable (a) to consummate and make effective as promptly
as is practicable the transactions contemplated by the Offer and this Agreement,
(b) for the discharge by each party hereto of its respective obligations
under
this Agreement and the Offer, including its obligations under Applicable
Securities Laws, and (c) to obtain all necessary waivers, consents and approvals
and to effect all necessary registrations and filings, including filings
under
applicable Laws and submissions of information requested by Governmental
Entities, in connection with the Contemplated Transactions, including in
each
case the execution and delivery of such documents as the other party hereto
may
reasonably require. Each party hereto, where appropriate, will
reasonably co-operate with the other in taking such actions.
(a) On
and after the date hereof, except as otherwise provided in this Agreement,
Arizona Star shall not, and shall cause each of the Arizona Star Subsidiaries
not to, directly or indirectly, through any officer, director, employee,
representative (including for greater certainty any financial or other advisors)
or agent of Arizona Star or any Arizona Star Subsidiary:
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(i)
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make,
solicit, assist, initiate, encourage or otherwise facilitate (including
by
way of furnishing non-public information, permitting any visit
to any
facilities or properties of Arizona Star or any Arizona Star Subsidiary,
or entering into any form of written or oral agreement, arrangement
or
understanding) any inquiries, proposals or offers regarding (A)
any
merger, take-over bid, issuer bid, amalgamation, plan of arrangement,
share exchange, business combination, consolidation, recapitalization,
reorganization, liquidation, dissolution or winding-up in respect
of
Arizona Star or any Arizona Star Subsidiary; (B) any sale or acquisition
of all or a material portion of the assets of Arizona Star or any
Arizona
Star Subsidiary; (C) any sale or acquisition of all or a material
portion
of the Common Shares or other securities of Arizona Star or of
all or any
of the securities of any Arizona Star Subsidiary; (D) any sale
of an
interest in any mineral property or joint venture; (E) any similar
business combination or transaction of or involving Arizona Star
or any of
the Arizona Star Subsidiaries, including any joint venture, earn-in,
farm-in or similar structure or arrangement, other than with Barrick
or a
Barrick Subsidiary; or (F) any proposal or offer to, or public
announcement of an intention to do, any of the foregoing from any
person
other than Barrick or a Barrick Subsidiary (an "Acquisition
Proposal");
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(ii)
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engage
in any discussions or negotiations regarding, or provide any information
with respect to, or otherwise co-operate in any way with, or assist
or
participate in, facilitate or encourage, any effort or attempt
by any
other person to make or complete any Acquisition Proposal, provided
that,
for greater certainty, Arizona Star may advise any person making
an
unsolicited Acquisition Proposal that such Acquisition Proposal
does not
constitute a Superior Proposal when the Board of Directors has
so
determined;
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(iii)
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withdraw,
modify or qualify, or propose publicly to withdraw, modify or qualify,
in
any manner adverse to Barrick, the approval or recommendation of
the Board
of Directors or any committee thereof of this Agreement or the
Offer;
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(iv)
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approve,
recommend or remain neutral with respect to, or propose publicly
to
approve, recommend or remain neutral with respect to, any Acquisition
Proposal (it being understood that publicly taking no position
or a
neutral position with respect to an Acquisition Proposal until
15 calendar
days following the public announcement of such Acquisition Proposal
shall
not be considered a violation of this Section 6.2(a)(iv));
or
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(v)
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accept
or enter into, or publicly propose to accept or enter into, any
letter of
intent, agreement in principle, agreement, arrangement or undertaking
related to any Acquisition
Proposal,
|
provided,
however, that nothing contained in this Section 6.2(a) or any other provision
of
this Agreement shall prevent the Board of Directors from, and the Board of
Directors shall be permitted to:
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(X)
|
withdraw,
modify or qualify (or propose to withdraw, modify or qualify) in
any
manner adverse to Barrick the approval or recommendation of the
Offer;
or
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(Y)
|
engage
in discussions or negotiations with, respond to enquiries from
or provide
information pursuant to Section 6.2(e) to, any person in response
to an
Acquisition Proposal made by any such
person,
|
if
and
only to the extent that:
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(A)
|
it
has received an unsolicited bona fide written Acquisition
Proposal from such person subsequent to the date
hereof:
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|
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1.
|
to
purchase or otherwise acquire, directly or indirectly, by means
of a
merger, take-over bid, amalgamation, plan of arrangement, business
combination or similar transaction, all of the Common Shares and
pursuant
to which all Shareholders are offered the same consideration in
form and
amount per Common Share to be purchased or otherwise
acquired;
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2.
|
that
did not result from a breach of this Section
6.2;
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3.
|
that
complies with all Applicable Securities
Laws;
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4.
|
in
respect of which any required financing to complete such Acquisition
Proposal has been demonstrated to the satisfaction of the Board
of
Directors, acting in good faith (after consultation with its financial
advisors and outside legal counsel), will be
obtained;
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5.
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that
is not subject to any due diligence and/or access condition which
would
allow access to the books, records, personnel or properties of
Arizona
Star or any Arizona Subsidiary or their respective representatives
beyond
5:00 p.m. (Toronto time) on the fifth day after which access is
first
afforded to the third party making the Acquisition Proposal, provided
that
any such due diligence and/or access condition must be satisfied
or waived
at or before such time;
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6.
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that
the Board of Directors has determined in good faith (after consultation
with its financial advisors and outside legal counsel) (x) is reasonably
capable of completion without undue delay taking into account all
legal,
financial, regulatory and other aspects of such Acquisition Proposal
and
the person making such Acquisition Proposal, and (y) would, if
consummated
in accordance with its terms (but not assuming away any risk of
non-completion), result in a transaction more favourable from a
financial
point of view to the Shareholders than the Offer (including any
adjustment
to the terms and conditions of the Offer proposed by Barrick pursuant
to
Section 6.2(h)); and
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7.
|
in
respect of which the Board of Directors has determined in good
faith
(after receipt of advice from its outside legal counsel) that failure
to
recommend such Acquisition Proposal to Shareholders would be inconsistent
with its fiduciary duties,
|
(any
such
Acquisition Proposal meeting all of the requirements of this Section 6.2(a)(A)
being referred to herein as a "Superior Proposal");
and
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(B)
|
in
the case of Section 6.2(a)(X), Arizona Star shall have first complied
with
all of the requirements of Section
6.2(g).
|
(b) Arizona
Star will immediately cease, and will instruct its financial advisors and
other
representatives and agents to cease, any existing solicitation, discussion
or
negotiation with any person (other than Barrick or a Barrick Subsidiary),
by or
on behalf of Arizona Star or any Arizona Star Subsidiary with respect to
or
which could lead to any potential Acquisition Proposal, whether or not initiated
by Arizona Star or any Arizona Star Subsidiaries or any of its or their
officers, directors, employees, representatives or agents, and, in connection
therewith, Arizona Star will discontinue access to any data rooms (virtual
or
otherwise).
(c) Arizona
Star shall not waive, release any person from, or fail to enforce on a timely
basis any obligation under any confidentiality agreement or standstill agreement
or amend any such agreement (except to allow such person to confidentially
propose to the Board of Directors an unsolicited Acquisition Proposal meeting
the criteria set out in Section 6.2(a)(A)1 that did not result from a breach
of
Section 6.2(a)), provided that this Section 6.2(c) shall not prevent the
Board
of Directors from considering and accepting any new Acquisition Proposal
that is
a Superior Proposal that might be made by any such third party, provided
in each
case that the remaining provisions of this Agreement are complied
with. Within three business days from the date hereof, Arizona Star
shall request the return or destruction of all information provided to any
third
parties who have entered into a confidentiality agreement with Arizona Star
relating to any potential Acquisition Proposal and shall use commercially
reasonable efforts to ensure that such requests are honoured in accordance
with
the terms of such confidentiality agreements and promptly (and in any event
within 24 hours) provide copies of all correspondence relating to same to
Barrick. Arizona Star will immediately advise Barrick orally and in
writing of any response or action (actual, anticipated, contemplated or
threatened) by any such third party which could reasonably be expected to
hinder, prevent or delay or otherwise adversely affect the completion of
the
Offer.
(d) From
and after the date of this Agreement, Arizona Star shall promptly (and in
any
event within 24 hours after it has received any proposal, inquiry, offer
or
request) notify Barrick, at first orally and then in writing, of any proposal,
inquiry, offer or request (or any amendment thereto) relating to or constituting
a bona fide Acquisition Proposal, any request for discussions or
negotiations relating to, or which could lead to, an Acquisition Proposal,
and/or any request for non-public information relating to Arizona Star or
any
Arizona Star Subsidiary or Arizona Star mineral property or contractual or
legal
rights or for access to properties, books and records or a list of the
Shareholders of Arizona Star or Arizona Star Subsidiaries of which Arizona
Star's directors, officers, employees, representatives or agents are or become
aware, or any amendments to the foregoing. Such notice shall include
a description of the terms and conditions of, and the identity of the person
making, any proposal, inquiry, offer or request, (including any amendment
thereto) and shall include copies of any such proposal, inquiry, offer or
request or any amendment to any of the foregoing. Arizona Star shall
also provide such other details of the proposal, inquiry, offer or request,
or
any amendment to the foregoing, as Barrick may reasonably
request. Arizona Star shall keep Barrick promptly and fully informed
of the status, including any change to the material terms, of any such proposal,
inquiry, offer or request, or any amendment to the foregoing, and will respond
promptly to all inquiries by Barrick with respect thereto.
(e) If
Arizona Star receives a request for non-public information from a person
who, on
an unsolicited basis, has proposed to Arizona Star a bona fide
Acquisition Proposal and (x) the Board of Directors determines, in good faith,
after consultation with its financial advisors and outside legal counsel,
that
such Acquisition Proposal would be, if consummated in accordance with its
terms,
reasonably likely to result in a Superior Proposal; and (y) in the opinion
of
the Board of Directors, acting in good faith and upon the advice of their
outside legal advisors, the failure to provide such person with access to
information regarding Arizona Star would be inconsistent with the fiduciary
duties of the Board of Directors, then, and only in such case, Arizona Star
may
provide such person with access to information regarding Arizona Star, subject
to the execution of a confidentiality agreement (the "Third Party
Confidentiality Agreement")
substantially
in the form and on the terms of the
Confidentiality Agreement, including for greater certainty, a standstill
covenant on substantially the same terms as the standstill covenant contained
in
Section 10 of the Confidentiality Agreement, which standstill covenant in
the
Third Party Confidentiality Agreement shall have a duration of at least 12
months, and provided that the circumstances in which the standstill covenant
in
the Third Party Confidentiality Agreement shall be lifted shall not reflect
the
equivalent provisions of the Confidentiality Agreement but instead will be
limited to allowing the party to the Third Party Confidentiality Agreement
to
confidentially propose to the Board of Directors an unsolicited Acquisition
Proposal meeting the criteria set out in Section 6.2(a)(A)1 that did not
result
from breach of Section 6.2(a) and that is otherwise in compliance with this
Agreement; and provided further that Arizona Star sends a copy of any such
Third
Party Confidentiality Agreement to Barrick promptly upon its execution and
Barrick is provided with a list of or copies of the information provided
to such
person and is immediately provided with access to the same information which
was
provided by Arizona Star to such person.
(f) Arizona
Star shall ensure that its officers, directors, employees, representatives
and
agents, and the Arizona Star Subsidiaries and their officers, directors,
employees, representatives and agents, are aware of the provisions of this
Section 6.2 and Arizona Star shall be responsible for any breach of this
Section
6.2 by such officers, directors, employees, representatives or
agents.
(g) Arizona
Star shall not accept, approve or recommend, nor enter into any agreement
(other
than a confidentiality agreement contemplated by Section 6.2(e)) relating
to, an Acquisition Proposal unless:
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(i)
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the
Acquisition Proposal constitutes a Superior
Proposal;
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(ii)
|
Arizona
Star has complied with Sections 6.2(a) through 6.2(h),
inclusive;
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(iii)
|
Arizona
Star has provided Barrick with notice in writing that there is
a Superior
Proposal, together with all documentation related to and detailing
the
Superior Proposal (including a copy of the confidentiality agreement
between Arizona Star and the person making the Superior Proposal
if not
previously delivered and a written notice from the Board of Directors
regarding the value in financial terms that the Board of Directors
has in
consultation with its financial advisors determined should be ascribed
to
any non-cash consideration offered under such Superior Proposal),
at least
five business days prior to the date on which the Board of Directors
proposes to accept, approve, recommend or to enter into any agreement
relating to such Superior Proposal;
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(iv)
|
five
business days shall have elapsed (the "Right to Match
Period") from the date Barrick received the notice and
documentation referred to in Section 6.2(g)(iii) from Arizona Star
in
respect of the Acquisition Proposal and, if Barrick has proposed
to amend
the terms of the Offer in accordance with Section 6.2(h), the Board
of
Directors shall have determined, in good faith, after consultation
with
its financial advisors and
|
outside
legal counsel, that the Acquisition Proposal
is a Superior Proposal compared to the proposed amendment to the terms of
the
Offer by Barrick;
|
|
(v)
|
Arizona
Star concurrently terminates this Agreement pursuant to
Section 7.1(k); and
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(vi)
|
Arizona
Star has previously, or concurrently will have, paid to Barrick
or the
Barrick Assignee the Termination
Payment.
|
(h) Arizona
Star acknowledges and agrees that, during the five business day periods referred
to in Section 6.2(g)(iii) and Section 6.2(g)(iv) or such longer period as
Arizona Star may approve for such purpose, Barrick shall have the opportunity,
but not the obligation, to propose to amend the terms of this Agreement and
the
Offer and Arizona Star shall co-operate with Barrick with respect thereto,
including negotiating in good faith with Barrick to enable Barrick to make
such
adjustments to the terms and conditions of this Agreement and the Offer as
Barrick deems appropriate and as would enable Barrick to proceed with the
Offer
and any Contemplated Transactions on such adjusted terms. The Board
of Directors will review any proposal by Barrick to amend the terms of the
Offer
in order to determine, in good faith in the exercise of its fiduciary duties
and
consistent with Section 6.2(a), whether Xxxxxxx'x proposal to amend the Offer
would result in the Acquisition Proposal not being a Superior Proposal compared
to the proposed amendment to the terms of the Offer.
The
Board
of Directors shall promptly reaffirm its recommendation of the Offer by press
release after: (x) any Acquisition Proposal which the Board of Directors
determines not to be a Superior Proposal is publicly announced or made; or
(y)
the Board of Directors determines that a proposed amendment to the terms
of the
Offer would result in the Acquisition Proposal which has been publicly announced
or made not being a Superior Proposal, and Barrick has so amended the terms
of
the Offer. Barrick and its counsel shall be given a reasonable
opportunity to review and comment on the form and content of any such press
release, recognizing that whether or not such comments are appropriate will
be
determined by Arizona Star, acting reasonably.
Nothing
in this Agreement shall prevent the Board of Directors from responding through
a
directors' circular or otherwise as required by Applicable Securities Laws
to an
Acquisition Proposal that it determines is not a Superior
Proposal. Further, nothing in this Agreement shall prevent the Board
of Directors from making any disclosure to the securityholders of Arizona
Star
if the Board of Directors, acting in good faith and upon the advice of its
legal
advisors, shall have first determined that the failure to make such disclosure
would be inconsistent with the fiduciary duties of the Board of Directors
and
provided further that such disclosure is otherwise in accordance with the
terms
of this Agreement. Barrick and its counsel shall be given a
reasonable opportunity to review and comment on the form and content of any
such
directors' circular, recognizing that whether or not such comments are
appropriate will be determined by Arizona Star, acting reasonably.
(i) Arizona
Star acknowledges and agrees that each successive modification of any
Acquisition Proposal shall constitute a new Acquisition Proposal for the
purposes of Section 6.2.
Each
party shall give prompt notice to the others of: (a) the occurrence or failure
to occur of any event, which occurrence or failure would cause or may cause
any
representation or warranty on its part contained in this Agreement to be
untrue
or inaccurate (without giving effect to, applying or taking into consideration
any materiality or Material Adverse Effect qualification already contained
within such representation or warranty) in any material respect at any time
from
the date hereof to the Effective Time; and (b) any failure of such party,
or any
officer, director, employee, representative or agent thereof, to comply with
or
satisfy any covenant, condition or agreement to be complied with or satisfied
by
it hereunder.
Upon
reasonable notice, Arizona Star agrees to provide Barrick and its
representatives with reasonable access (without disruption to the conduct
of
Arizona Star's business) during normal business hours to all books, records,
information, corporate charts, tax documents, filings, memoranda, working
papers
and files and all other materials in its possession and control, including
material contracts, and access to the personnel of and counsel to Arizona
Star
and the Arizona Star Subsidiaries on an as reasonably requested basis as
well as
reasonable access to the properties of Arizona Star and the Arizona Star
Subsidiaries in order to allow Barrick to conduct such investigations as
Barrick
may consider necessary or advisable to confirm the accuracy of Arizona Star's
representations and warranties herein, for strategic planning and integration,
for the structuring of any Pre-Acquisition Reorganization and for any other
reasons reasonably relating to the Contemplated Transactions, and further
agrees
to assist Barrick in all reasonable ways in any such due diligence
investigations which Barrick may wish to conduct. Nothing in the
foregoing shall require Arizona Star to disclose information which it is
prohibited from disclosing pursuant to a written confidentiality agreement
or
confidentiality provision of an agreement with a third party or to provide
Barrick with access to any property where Arizona Star is contractually or
legally prohibited from doing so. Any such investigation by Barrick
and its advisors shall not mitigate, diminish or affect the representations
and
warranties of the other party contained in this Agreement or any document
or
certificate given pursuant hereto.
From
and
after the Effective Time, Barrick agrees that for the period from the Effective
Time until six years after the Effective Time, Barrick will cause Arizona
Star
or any successor to Arizona Star to maintain Arizona Star's current directors'
and officers' liability insurance policy or a policy reasonably equivalent
subject in either case to terms and conditions no less advantageous to the
directors and officers of Arizona Star than those contained in the policy
in
effect on the date hereof, for all present and former directors and officers
of
Arizona Star and the Arizona Star Subsidiaries covering claims made prior
to or
within six years of the Effective Time, provided, however, that Barrick will
not
be required, in order to maintain or cause to be maintained such directors'
and
officers' liability insurance policy, to pay an annual premium in excess
of 200%
of the cost of the existing policy; and provided further that, if equivalent
coverage cannot be obtained or can only be obtained by paying an annual premium
in excess of 200% of such amount, Barrick shall only be required to obtain
or
cause to be obtained as much coverage as can be obtained by paying an annual
premium equal to 200% of such
amount. Alternatively,
after the Effective
Time, Barrick may, or may cause Arizona Star to, purchase as an extension
to
Arizona Star's current directors' and officers' liability insurance policies
run-off insurance providing such coverage for such persons on terms comparable
to those contained in Arizona Star's current insurance policies, provided
that
the premium will not exceed 200% of the premium currently charged to Arizona
Star for directors' and officers' liability insurance, and in such event
none of
Barrick or Arizona Star or any Arizona Star Subsidiaries will have any further
obligation under this Section 6.5.
Arizona
Star shall notify Barrick of any claim brought by (or threatened to be brought
by) any present, former or purported holder of any securities of Arizona
Star in
connection with any of the Contemplated Transactions prior to the Effective
Time. Arizona Star shall consult with Barrick prior to settling any
such claim prior to the Effective Time and shall not settle or compromise,
or
agree to settle or compromise any such claim prior to the Effective Time
without
the prior written consent of Barrick.
Barrick
will promptly take such action, including obtaining any exemption orders,
consents or approvals or filing any such documents, as may be required under
Applicable Securities Laws to permit Barrick to make the Offer and perform
Xxxxxxx'x other obligations hereunder, and Arizona Star shall co-operate
in good
faith in connection with any such action by Barrick.
|
6.8
|
Arizona
Star agrees that, upon request by Barrick, Arizona Star shall (i) effect
such
reorganizations of its business, operations and assets or such other
transactions as Barrick may request, acting reasonably (each a
"Pre-Acquisition Reorganization") and (ii) co-operate with
Barrick and its advisors in order to determine the nature of the Pre-Acquisition
Reorganizations that might be undertaken and the manner in which they might
most
effectively be undertaken; provided that the Pre-Acquisition Reorganizations
are
not prejudicial to Arizona Star in any material respect and (A) do not result
in
any material breach by Arizona Star of (i) any existing contract or commitment
of Arizona Star; or (ii) any Law; or (B) would not reasonably be expected
to
impede or delay Xxxxxxx'x ability to take up and pay for the Arizona Star
Shares
tendered to the Offer. Barrick shall provide written notice to
Arizona Star of any proposed Pre-Acquisition Reorganization at least ten
business days prior to the Expiry Time. Upon receipt of such notice,
Barrick and Arizona Star shall work co-operatively and use commercially
reasonable efforts to prepare prior to the Expiry Time all documentation
necessary and do all such other acts and things as are necessary to give
effect
to such Pre-Acquisition Reorganization. Barrick agrees to waive any
breach of a representation, warranty or covenant by Arizona Star where such
breach is a result of an action taken by Arizona Star in good faith pursuant
to
a request by Barrick in accordance with this Section 6.8. The completion
of any
such Pre-Acquisition Reorganization shall be subject to the satisfaction
of the
Minimum Tender Condition and the satisfaction or waiver by Barrick of the
other
conditions to the Offer set forth in Schedule A and shall be effected
immediately prior to any take-up by Barrick of Common
Shares
tendered to the Offer. If Barrick
does not take up and pay for the Common Shares tendered to the Offer, Barrick
shall indemnify Arizona Star for all losses and reasonable out-of-pocket
costs
and expenses, including reasonable out-of-pocket legal fees and disbursements,
incurred in connection with any proposed Pre-Acquisition
Reorganization.
TERMINATION,
AMENDMENT AND WAIVER
|
7.1
|
This
Agreement may be terminated at any time prior to the Effective
Time:
|
|
(a)
|
by
mutual written consent of Barrick and Arizona
Star;
|
|
|
(b)
|
by
Arizona Star, if Barrick does not mail the Circular by the Latest
Mailing
Time;
|
|
|
(c)
|
by
Barrick on or after the Latest Mailing Time, if any condition to
making
the Offer for Xxxxxxx'x benefit is not satisfied or waived by such
date
other than as a result of a default by Barrick
hereunder;
|
|
|
(d)
|
by
Barrick if the Minimum Tender Condition or any other condition
of the
Offer shall not be satisfied or waived at the Expiry Time of the
Offer (as
such Expiry Time may be extended from time to time by Barrick in
its sole
discretion) and Barrick shall not elect to waive such
condition;
|
|
|
(e)
|
by
Barrick or Arizona Star, if Barrick does not take up and pay for
the
Common Shares deposited under the Offer by a date that is 120 days
following the date of the mailing of the Circular (the "Outside
Date"), otherwise than as a result of the material breach
by
Barrick or Arizona Star of any material covenant or obligation
under this
Agreement (without giving effect to, applying or taking into consideration
any materiality qualification already contained in such covenant
or
obligation) or as a result of any representation or warranty made
by such
party in this Agreement being untrue or incorrect (without giving
effect
to, applying or taking into consideration any materiality or Material
Adverse Effect qualification already contained within such representation
or warranty) where such inaccuracies in the representations and
warranties, individually or in the aggregate, would reasonably
be expected
to have a Material Adverse Effect in respect of such party; provided,
however, that if Xxxxxxx'x take-up and payment for Common Shares
deposited
under the Offer is delayed by (i) an injunction or order made by
a
Governmental Entity of competent jurisdiction, or (ii) Barrick
not having
obtained any waiver, consent or approval of any Governmental Entity
that
is necessary to permit Barrick to take up and pay for Common Shares
deposited under the Offer, then, provided that such injunction
or order is
being contested or appealed or such waiver, consent or approval
is being
actively sought, as applicable, this Agreement shall not be terminated
by
Arizona Star pursuant to this Section 7.1(e) until the earlier
of (A) the
fifth business day following the date on which such injunction
or order
ceases to be in effect or such
|
waiver,
consent or approval is obtained, and (B) the
180th day after the Circular is mailed to Shareholders;
|
|
(f)
|
by
Barrick, if:
|
|
|
(i)
|
Arizona
Star is in material default of any covenant or obligation in
Section 6.2,
|
|
|
(ii)
|
Arizona
Star is in material default of any other covenant or obligation
under this
Agreement (without giving effect to, applying or taking into consideration
any materiality qualification already contained in such covenant
or
obligation),
|
|
|
(iii)
|
any
representation or warranty made by Arizona Star in this Agreement
shall
have been at the date hereof untrue or incorrect,
or
|
|
|
(iv)
|
any
representation or warranty made by Arizona Star in this Agreement
shall
have become untrue or incorrect at any time prior to the Expiry
Time
(without giving effect to, applying or taking into consideration
any
materiality or Material Adverse Effect qualification already contained
within such representation or warranty) where such inaccuracies
in the
representations and warranties, individually or in the aggregate,
would
reasonably be expected to have a Material Adverse Effect in respect
of
Arizona Star;
|
and,
in
the case of any of (ii), (iii) or (iv), such default or inaccuracy is not
curable or, if curable, is not cured by the earlier of the date which is
15 days
from the date of written notice of such breach and the business day prior
to the
Expiry Date;
|
|
(g)
|
by
Arizona Star, if:
|
|
|
(i)
|
Barrick
is in material default of any covenant or obligation under this
Agreement
(without giving effect to, applying or taking into consideration
any
materiality qualification already contained in such covenant or
obligation); or
|
|
|
(ii)
|
any
representation or warranty of Barrick under this Agreement is untrue
or
incorrect in any material respect at any time prior to the Expiry
Time and
such inaccuracy is reasonably likely to prevent, restrict or materially
delay consummation of the Offer;
|
and,
in
the case of (i) or (ii), such default or inaccuracy is not curable or, if
curable, is not cured by the earlier of the date which is 15 days from the
date
of written notice of such breach and the business day prior to the Expiry
Date;
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|
(h)
|
by
Barrick or Arizona Star, if any court of competent jurisdiction
or other
governmental authority shall have issued an order, decree or ruling
enjoining or otherwise prohibiting any of the transactions contemplated
herein (unless such
|
order,
decree or ruling has been withdrawn, reversed
or otherwise made inapplicable);
|
|
(i)
|
by
Barrick, if any litigation or other proceeding is pending or has
been
threatened to be instituted by any person or governmental authority,
which, in the good faith judgment of Barrick, could reasonably
be expected
to result in a decision, order, decree or ruling that enjoins,
prohibits,
grants damages in a material amount in respect of, or materially
impairs
the benefits of, any of the Contemplated
Transactions;
|
|
|
(j)
|
by
Barrick, if:
|
|
|
(i)
|
the
Board of Directors or any committee thereof fails to publicly recommend
or
reaffirm its approval of the Offer within two calendar days of
any written
request by Barrick (or, in the event that the Offer shall be scheduled
to
expire within such two calendar day period, prior to the scheduled
expiry
of the Offer);
|
|
|
(ii)
|
the
Board of Directors or any committee thereof withdraws, modifies,
changes
or qualifies its approval or recommendation of the Offer in any
manner
adverse to Barrick;
|
|
|
(iii)
|
the
Board of Directors or any committee thereof recommends or approves,
or
publicly proposes to recommend or approve, an Acquisition
Proposal;
|
|
|
(iv)
|
the
Board of Directors or any committee thereof remains neutral beyond
the 15
calendar day period set out in Section 6.2(a)(iv) hereof in respect
of an
Acquisition Proposal; or
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|
|
(v)
|
Arizona
Star fails to take any action required under Section 2.4 of this
Agreement
with respect to the Shareholder Rights Plan to defer the Separation
Time
(as defined in the Shareholder Rights Plan) or to allow the timely
completion of any of the Contemplated Transactions;
and
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|
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(k)
|
by
Arizona Star, if Arizona Star proposes to enter into a definitive
agreement with respect to a Superior Proposal in compliance with
the
provisions of Section 6.2(g), provided that prior to or concurrently
with
the entering into of that definitive agreement, Arizona Star shall
have
paid to Barrick or the Barrick Assignee the applicable Termination
Payment
and further provided that Arizona Star has not breached any of
its
covenants, agreements or obligations in this
Agreement.
|
(a) Barrick
shall be entitled to a cash termination payment (the "Termination
Payment") in an amount equal to $27,000,000, upon the occurrence of any
of the following events (each a "Termination Payment Event"),
which shall be paid by Arizona Star within the time specified in respect
of each
such Termination Payment Event:
|
|
(i)
|
this
Agreement is terminated pursuant to Section 7.1(f)(i) or pursuant
to
Section 7.1(j), in which case the Termination Payment shall be
paid to
Barrick or the Barrick Assignee by 4:00 p.m. (Toronto time) on
the day on
which this Agreement is so
terminated;
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|
|
(ii)
|
this
Agreement is terminated pursuant to Section 7.1(k), in which case
the
Termination Payment shall be paid to Barrick or the Barrick Assignee
prior
to or concurrently with the entering into of the definitive agreement
referred to therein; or
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|
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(iii)
|
on
or after the date hereof and prior to the later of the Expiry Time
and the
date on which this Agreement is terminated, an Acquisition Proposal
is
publicly announced or made or any person has publicly announced
an
intention to make such Acquisition Proposal, and such Acquisition
Proposal
either has been accepted, recommended or approved by the Board
of
Directors or has not expired, been withdrawn or been publicly abandoned,
and (A) the Offer is not completed as a result of the Minimum Tender
Condition not having been met, and (B) any person or company acquires,
directly or indirectly, more than 50% of the issued and outstanding
Common
Shares or more than 50% of the consolidated assets of Arizona Star,
in
each case within 12 months of the date of this Agreement, in which
case
the Termination Payment shall be paid to Barrick or the Barrick
Assignee
on the earlier of the date that an Acquisition Proposal is accepted,
recommended or approved by the Board of Directors or concurrently
with
such acquisition of such Common Shares or
assets.
|
(b) If
Arizona Star does not have sufficient financial resources to pay the Termination
Payment, then it shall be a condition of (i) any Superior Proposal referred
to in Section 7.1(k) and (ii) any share or asset acquisition referred to in
Section 7.2(a)(iii) where Arizona Star or its affiliate has entered into
any
agreement to support such share acquisition or to transfer such assets, as
applicable, that the person making such Superior Proposal or acquisition,
as
applicable, shall advance or otherwise provide to Arizona Star the cash required
for Arizona Star to pay the Termination Payment, which amount shall be so
advanced or provided prior to the date on which Arizona Star is required
to pay
the Termination Payment.
(c) Upon
written notice to Arizona Star, Barrick may assign its right to receive the
Termination Payment to any Barrick Subsidiary (the "Barrick
Assignee").
(d) The
Termination Payment shall be paid by Arizona Star to Barrick or the Barrick
Assignee by wire transfer in immediately available funds to an account specified
by Barrick. For greater certainty, the obligations of Arizona Star
under this Section 7.2 shall survive the termination of this Agreement,
regardless of the circumstances thereof.
(e) Arizona
Star acknowledges that the amount set out in Section 7.2 in respect of the
Termination Payment represents liquidated damages which are a genuine
pre-estimate of the damages, including opportunity costs, which Barrick will
suffer or incur as a result of the event giving rise to such damages and
resultant termination of this Agreement, and is not a
penalty. Arizona Star irrevocably waives any right it may have to
raise as a defence that any such liquidated damages are excessive or
punitive.
(f) For
greater certainty, Arizona Star shall not be obligated to make more than
one
payment under Section 7.2 if one or more of the events specified therein
occurs.
For
greater certainty, the parties agree that the Termination Payment to be received
pursuant to Section 7.2 is the sole remedy in compensation or damages of
the
party receiving such Termination Payment with respect to the events giving
rise
to the termination of this Agreement and the resulting Termination Payment
Event; provided, however, that nothing contained in this Section 7.3, and
no
payment of any Termination Payment, shall relieve or have the effect of
relieving any party in any way from liability for damages incurred or suffered
by a party as a result of an intentional or wilful breach of this Agreement,
including the intentional or wilful making of a misrepresentation in this
Agreement (including the Schedules hereto). Nothing herein shall
preclude a party from seeking injunctive relief to restrain any breach or
threatened breach of the covenants or agreements set forth in this Agreement
or
otherwise to obtain specific performance of any such covenants or agreements,
without the necessity of posting bond or security in connection
therewith.
|
7.4
|
This
Agreement may not be amended except by an instrument signed by each of the
parties hereto.
|
7.5
|
At
any
time prior to the termination of this Agreement pursuant to Section 7.1,
any
party hereto may: (a) extend the time for the performance of any of
the obligations or other acts of any other party hereto; or (b) waive compliance
with any of the agreements of the other party or with any conditions to its
own
obligations, in each case only to the extent such obligations, agreements
and
conditions are intended for its benefit.
GENERAL
PROVISIONS
Barrick
and Arizona Star represent and warrant to each other that, with the exception
of
Citigroup Global Markets Inc., for whose fees and expenses Arizona Star shall
be
solely liable, no securityholder, director, officer, employee, consultant,
broker, finder or investment banker is entitled to any brokerage, finder's
or
other fee or commission, or to the reimbursement of any of its expenses,
in
connection with the Offer or any similar transaction based upon arrangements
made by or on behalf of Barrick or Arizona Star, as the case may
be.
Except
as
required by applicable Law or applicable stock exchange requirements, neither
Barrick nor Arizona Star shall make any public announcement or statement
with
respect to the Offer or this Agreement without the approval of the other
party,
such approval not to be unreasonably withheld or delayed, except to the extent
necessary to comply with Law or applicable stock exchange
requirements. Moreover, in any event, each party agrees to give prior
notice to the other of any public announcement relating to the Offer or this
Agreement and agrees to consult with the other prior to issuing each such
public
announcement. Each of Barrick and Arizona Star agrees that, promptly
after the entering into of this Agreement, it shall issue a press release
announcing the entering into of this Agreement and, in the case of Barrick,
its
intention to make the Offer, which press release shall, in each case, be
satisfactory in form and substance to the other party, acting
reasonably.
|
8.3
|
All
information of a confidential nature relating to a party or its business
that is
disclosed to the other party in accordance with this Agreement or in connection
with the Offer and the transactions contemplated herein shall be held in
confidence by the receiving party and shall not be disclosed to any person
or
the public except with the prior written consent of the disclosing party,
acting
reasonably. Such consent shall not apply to the disclosure of
confidential information as required by applicable Law or stock exchange
requirements, provided that (a) only the confidential information that is
legally required may be disclosed, and (b) the party making such disclosure
as
required by applicable Law or stock exchange requirements shall consult with
the
party who disclosed the confidential information in accordance with this
Agreement or in connection with the Offer and the transactions contemplated
herein and co-operate with such party who disclosed the confidential information
to obtain a protective order or other remedy.
|
8.4
|
Any
notice, consent, waiver, direction or other communication required or permitted
to be given under this Agreement by a party shall be in writing and may be
given
by delivering same or sending same by facsimile transmission or by delivery
addressed to the party
to
which the notice is to be given at its address for
service herein. Any notice, consent, waiver, direction or other
communication aforesaid shall, if delivered, be deemed to have been given
and
received on the date on which it was delivered to the address provided herein
(if a business day, if not, the next succeeding business day) and if sent
by
facsimile transmission be deemed to have been given and received at the time
of
receipt (if a business day, if not, the next succeeding business day) unless
actually received after 4:30 p.m. (local time) at the point of delivery in
which
case it shall be deemed to have been given and received on the next business
day.
The
address for service for each of the parties hereto shall be as
follows:
|
|
(a)
|
if
to Arizona Star:
|
2700
-
000 Xxx Xxxxxx
Xxxxxxx,
XX X0X 0X0
Attention: Xxxx
Xxxxxxxxx
Fax: 416.359.7801
with
a
copy (which shall not itself constitute notice) to:
Fraser
Xxxxxx Casgrain LLP
39th
Floor
0
Xxxxx
Xxxxxxxx Xxxxx
Xxxxxxx,
XX X0X 0X0
Attention: Xxxx
Xxxxxx
Fax: 416.863.4592
|
|
(b)
|
if
to Barrick:
|
BCE
Place, Suite 3700
000
Xxx
Xxxxxx, X.X. Xxx 000
Xxxxxxx,
XX X0X 0X0
Attention: Executive
Vice President, Exploration and Corporate Development
Fax: 416.307.7402
with
a
copy (which shall not itself constitute notice) to:
Davies
Xxxx Xxxxxxxx & Xxxxxxxx LLP
4400
–
0
Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx,
XX X0X 0X0
Attention: Xxxxx
Xxxxxxx
Fax: 416.863.0871
|
8.5
|
If
any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, void or unenforceable, the remainder
of
the terms, provisions, covenants and restrictions of this Agreement shall
remain
in full force and effect and shall in no way be affected, impaired or
invalidated and the parties shall negotiate in good faith to modify the
agreement to preserve each party's anticipated benefits under this
Agreement.
The
parties waive the application of any rule of Law which otherwise would be
applicable in connection with the construction of this Agreement that ambiguous
or conflicting terms or provisions should be construed against the party
who (or
whose counsel) prepared the executed agreement or any earlier draft of the
same.
This
Agreement is not intended to confer any rights or remedies on any person
other
than the parties, and other than any Barrick Assignee.
|
8.8
|
This
Agreement (together with all other documents and instruments referred to
herein)
constitutes the entire agreement and supersedes all other prior agreements
and
undertakings, both written and oral, among the parties with respect to the
subject matter hereof. Assignment. Assignment.
|
8.9
|
This
Agreement shall not be assigned by operation of Law or otherwise other than
as
expressly permitted by this Agreement. Barrick may assign all or any
part of its rights or obligations under this Agreement to a direct or indirect
wholly-owned Subsidiary of Barrick, provided that Barrick shall continue
to be
liable to Arizona Star for any default in performance of any such
assignee.
|
8.10
|
This
Agreement shall be governed in all respects, including validity, interpretation
and effect, by the Laws of the Province of Ontario and the federal Laws of
Canada applicable therein, without giving effect to any principles of conflict
of Laws thereof that would result in the application of the Laws of any other
jurisdiction, and all actions and proceedings arising out of or relating
to this
Agreement shall be heard and determined exclusively in the courts of the
Province of Ontario.
|
8.11
|
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be original and all of which taken together shall be deemed to
constitute one and the same instrument, and it shall not be necessary in
making
proof of this Agreement to produce more than one counterpart.
[The
remainder of this page has been left intentionally
blank.]
IN
WITNESS WHEREOF, this Agreement has been executed and delivered as of the
date
first above written, by the duly authorized representatives of the parties
hereto.
| XXXXXXX GOLD CORPORATION | |||
|
|
by
|
/s/ Xxxx X. Xxxxxxxx | |
| Name: Xxxx X. Xxxxxxxx | |||
| Title: Executive Vice President | |||
| by |
/s/
Xxxxxx Xxxxxxxx
|
||
|
Name: Xxxxxx
Xxxxxxxx
|
|||
|
Title: Senior
Vice President
|
|||
|
ARIZONA
STAR RESOURCE CORP.
|
|||
|
|
By:
|
/s/ Xxxx X. Perisotto | |
| Name: Xxxx X. Perisotto | |||
| Title: President and CEO | |||
CONDITIONS
OF THE OFFER
Notwithstanding
any other provision of the Agreement to which this schedule is attached,
Barrick
shall have the right to withdraw the Offer and not take up and pay for or
extend
the period of time during which the Offer is open and postpone taking up
and
paying for, any Common Shares deposited under the Offer unless all of the
following conditions are satisfied or waived by Barrick at or prior to the
Expiry Time:
|
|
(a)
|
there
shall have been validly deposited pursuant to the Offer and not
withdrawn
at the Expiry Time that number of Common Shares which constitutes
at least
66⅔% of the Common Shares outstanding calculated on a fully-diluted
basis
(the "Minimum Tender
Condition");
|
|
|
(b)
|
all
requisite government and regulatory approvals, waiting or suspensory
periods (and any extensions thereof), waivers, permits, consents,
reviews,
sanctions, orders, rulings, decisions, declarations, certificates
and
exemptions (including, among others, those of any stock exchanges
or other
securities or regulatory authorities) that are, as determined by
Barrick,
acting reasonably, necessary or advisable to complete the Offer,
any
Compulsory Acquisition or any Subsequent Acquisition Transaction
shall
have been obtained, received or concluded or, in the case of waiting
or
suspensory periods, expired or been terminated, each on terms and
conditions satisfactory to Barrick, acting
reasonably;
|
|
|
(c)
|
this
Agreement shall not have been terminated by Arizona Star or by
Barrick in
accordance with its terms;
|
|
|
(d)
|
Barrick
shall have determined, acting reasonably, that: (i) no act, action,
suit
or proceeding shall have been taken or threatened in writing before
or by
any Governmental Entity or by an elected or appointed public official
or
private person (including, without limitation, any individual,
corporation, firm, group or other entity) whether or not having
the force
of Law; and (ii) no Law, regulation or policy shall exist or have
been
proposed, enacted, entered, promulgated or applied, in either
case:
|
|
|
(A)
|
to
cease trade, enjoin, prohibit or impose material limitations or
conditions
on the purchase by or the sale to Barrick of the Common Shares,
the right
of Barrick to own or exercise full rights of ownership of the Common
Shares;
|
|
|
(B)
|
which,
if the Offer (or any Compulsory Acquisition or any Subsequent Acquisition
Transaction) were consummated, would reasonably be expected to
have a
Material Adverse Effect in respect of Arizona Star or
Barrick;
|
|
|
(C)
|
which
would materially and adversely affect the ability of Barrick to
proceed
with the Offer (or any Compulsory Acquisition or any Subsequent
Acquisition Transaction) and/or take up and pay for any Common
Shares
deposited under the Offer;
|
|
|
(D)
|
seeking
to obtain from Barrick or any the Barrick Subsidiaries or Arizona
Star or
any of the Arizona Star Subsidiaries any material damages directly
or
indirectly in connection with the Offer (or any Compulsory Acquisition
or
any Subsequent Acquisition Transaction);
or
|
|
|
(E)
|
seeking
to prohibit or limit the ownership or operation by Barrick of any
material
portion of the business or assets of Arizona Star or the Arizona
Star
Subsidiaries or to compel Barrick or the Barrick Subsidiaries to
dispose
of or hold separate any material portion of the business or assets
of
Arizona Star or any of the Arizona Star Subsidiaries as a result
of the
Offer (or any Compulsory Acquisition or any Subsequent Acquisition
Transaction);
|
|
|
(e)
|
there
shall not exist any prohibition at Law against Barrick making or
maintaining the Offer or taking up and paying for any Common Shares
deposited under the Offer or completing a Compulsory Acquisition
or any
Subsequent Acquisition Transaction;
|
|
|
(f)
|
Barrick
shall have determined, acting reasonably, that there shall not
exist or
have occurred (or, if there does exist or shall have occurred prior
to the
date of this Agreement, there shall not have been disclosed, generally
or
to Barrick in writing on or before the execution and delivery of
this
Agreement) any change, condition, event or development (or any
change,
condition, event or development involving a prospective change)
which,
when considered either individually or in the aggregate, has resulted
or
would reasonably be expected to result in a Material Adverse Effect
in
respect of Arizona Star;
|
|
|
(g)
|
Arizona
Star shall have complied in all material respects with its covenants
and
obligations under this Agreement to be complied with at or prior
to the
Expiry Time (without giving effect to, applying or taking into
consideration any materiality qualification already contained in
such
covenant or obligation);
|
|
|
(h)
|
all
representations and warranties made by Arizona Star in this Agreement
shall be true and correct at and as of the Expiry Time, as if made
at and
as of such time (except for those expressly stated to speak at
or as of an
earlier time), except where such inaccuracies in the representations
and
warranties (without giving effect to, applying or taking into
consideration
|
any
materiality or Material Adverse Effect
qualification already contained within such representations and warranties),
individually or in the aggregate, would not reasonably be expected to have
a
Material Adverse Effect in respect of Arizona Star or materially and adversely
affect the ability of Barrick to proceed with the Offer or any Compulsory
Acquisition or Subsequent Acquisition Transaction or, if the Offer or any
Compulsory Acquisition or Subsequent Acquisition Transaction were consummated,
would not reasonably be expected to have a Material Adverse Effect in respect
of
Arizona Star or Barrick;
|
|
(i)
|
Barrick
shall not have become aware of any untrue statement of a material
fact, or
an omission to state a material fact that is required to be stated
or that
is necessary to make a statement not misleading in light of the
circumstances in which it was made and at the date it was made
(after
giving effect to all subsequent filings in relation to all matters
covered
in earlier filings), in any document filed by or on behalf of Arizona
Star
with any securities commission or similar securities regulatory
authority
in any of the provinces or territories of Canada or elsewhere,
including
any prospectus, annual information form, financial statement, material
change report, management proxy circular, feasibility study or
executive
summary thereof, press release or any other document so filed by
Arizona
Star which Barrick shall have determined in its reasonable judgment
constitutes a Material Adverse Effect with respect to Arizona
Star;
|
|
|
(j)
|
Barrick
shall have determined, acting reasonably, that there shall not
have
occurred, developed or come into effect or existence any event,
action,
state, condition or financial occurrence of national or international
consequence, or any Law, regulation, action, government regulation,
inquiry or other occurrence of any nature whatsoever, that materially
adversely affects or involves, or could reasonably be expected
to
materially adversely affect or involve, the financial, banking
or capital
markets generally;
|
|
|
(k)
|
Barrick
shall have determined in its reasonable discretion that, on terms
satisfactory to Barrick: (i) the Board of Directors shall have
waived the
application of the Shareholder Rights Plan to the purchase of Common
Shares by Barrick under the Offer, any Compulsory Acquisition and
any
Subsequent Acquisition Transaction; (ii) a cease trade order or
an
injunction shall have been issued that has the effect of prohibiting
or
preventing the exercise of SRP Rights or the issue of common shares
of
Arizona Star upon the exercise of the SRP Rights in relation to
the
purchase of Common Shares by Barrick under the Offer, any Compulsory
Acquisition or any Subsequent Acquisition Transaction; (iii) a
court of
competent jurisdiction shall have ordered that the SRP Rights are
illegal
or of no force or effect or may not be exercised in relation to
the Offer,
any Compulsory Acquisition or any Subsequent Acquisition Transaction;
or
(iv) the SRP Rights and the Shareholder Rights Plan shall otherwise
have
|
become
or been held unexercisable or unenforceable in
relation to the Common Shares with respect to the Offer, any Compulsory
Acquisition and any Subsequent Acquisition Transaction and any acquisition
of
Common Shares pursuant thereto;
|
|
(l)
|
all
outstanding Options will have been exercised in full, cancelled
or
irrevocably released, surrendered or waived or otherwise dealt
with on
terms satisfactory to Barrick, acting reasonably;
and
|
|
|
(m)
|
each
of the Lock-Up Agreements shall have been complied with and shall
not have
been terminated.
|
The
foregoing conditions are for the exclusive benefit of Barrick and may be
asserted by Barrick regardless of the circumstances giving rise to any such
assertion, including any action or inaction by Barrick. Barrick may
waive any of the foregoing conditions in whole or in part at any time and
from
time to time without prejudice to any other rights which Barrick may
have. The failure by Barrick at any time to exercise any of the
foregoing rights will not be deemed to be a waiver of any such right and
each
such right shall be deemed to be an ongoing right which may be asserted at
any
time and from time to time.
REPRESENTATIONS
AND WARRANTIES OF BARRICK
1. Organization
Barrick
is a corporation duly registered under the Laws of the Province of
Ontario. Barrick is validly existing and has all necessary corporate
power, authority and capacity to own its property and assets and to carry
on its
business as currently owned and conducted.
2. Authority
and
No Violation
(a) Barrick
has the necessary corporate power, authority and capacity to enter into this
Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement by Barrick and the consummation by Parent of the
Offer have been duly authorized by the boards of directors of Barrick and
no
other corporate proceedings on its part are necessary to authorize this
Agreement or the Offer. This Agreement has been duly executed and
delivered by Barrick and constitutes a legal, valid and binding obligation
of
Barrick, enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency and other applicable Laws affecting creditors' rights
generally, and to general principles of equity.
(b) The
authorization of this Agreement, the execution and delivery by Barrick of
this
Agreement and the performance by Barrick of its obligations under this
Agreement, and the consummation of the Offer, any Compulsory Acquisition
and any
Subsequent Acquisition Transaction, will not result (with or without notice
or
the passage of time) in a violation or breach of or constitute a default
under
any provision of:
|
|
(i)
|
the
constating documents of Barrick;
|
|
|
(ii)
|
any
applicable Laws, except to the extent that the violation or breach
of,
under, any applicable Laws, would not, individually or in the aggregate,
reasonably be expected to reasonably be expected to materially
adversely
affect the ability of Barrick to perform its obligations under
this
Agreement;
|
|
|
(iii)
|
any
note, bond, mortgage, indenture, contract, licence, permit or government
grant to which Barrick is party or by which it is bound, except
as would
not, individually or in the aggregate, reasonably be expected to
materially adversely affect the ability of Barrick to perform its
obligations under this Agreement;
or
|
|
|
(iv)
|
any
judgment, decree, order or award of any Governmental Entity or
arbitrator.
|
(c) No
consent, approval, order or authorization of, or declaration or filing with,
any
Governmental Entity is required to be obtained by Barrick in connection with
the
consummation of the transactions contemplated by the Offer and this Agreement
other
than those which are contemplated by the Offer
and this Agreement, except for such consents, approvals, orders or
authorizations, or declarations or filings, as to which the failure to obtain
or
make would not, individually or the in aggregate, prevent or materially delay
the consummation of the transactions contemplated by the Offer and this
Agreement.
3. Financing
Arrangements
Barrick
has made adequate arrangements to ensure that the required funds are available
to effect payment in full of the consideration for all of the Common Shares
acquired pursuant to the Offer.
REPRESENTATIONS
AND WARRANTIES OF ARIZONA STAR
1. Organization
(a) Arizona
Star and each Arizona Star Subsidiary has been duly incorporated or formed
under
all applicable Laws of its jurisdiction of incorporation or formation, is
validly existing and has all necessary corporate power, authority, and capacity
to own its property and assets and to carry on its business as currently
owned
and conducted. All of the Arizona Star Subsidiaries and Arizona
Star's percentage of ownership of such Arizona Star Subsidiaries are as set
out
in the Disclosure Letter. All of the outstanding shares of the
Arizona Star Subsidiaries which are held directly or indirectly by Arizona
Star
are validly issued, fully paid and non-assessable and are owned directly
or
indirectly by Arizona Star free and, except as set out in the Disclosure
Letter,
clear of any Encumbrances. There are no outstanding options, rights,
entitlements, understandings or commitments (contingent or otherwise) providing
to any person the right to acquire any such shares or other ownership interests
in any of the Arizona Star Subsidiaries. Except as disclosed in the
Disclosure Letter, Arizona Star does not hold any equity interest, or right
to
acquire an equity interest, in any person, other than its interests in the
Arizona Star Subsidiaries.
(b) Arizona
Star and each Arizona Star Subsidiary is duly qualified or licensed to do
business and is in good standing in each jurisdiction where the character
of the
properties owned, leased or operated by it or the nature of its business
makes
such qualification or licensing necessary, except where the failure to be
so
qualified, licensed or in good standing has not had or would not reasonably
be
expected to have, individually or in the aggregate, a Material Adverse Effect
in
respect of Arizona Star.
2. Capitalization
(a) The
authorized capital of Arizona Star consists of 100,000,000 Common
Shares. As at the date of this Agreement, 42,325,937 Common Shares
are issued and outstanding. As at the date of this Agreement, there
are outstanding Options to acquire an aggregate of up to 625,000 Common Shares,
all of which are or will become exercisable upon the making of the
Offer. Except for the Options referred to in the preceding sentence
and the SRP Rights issued pursuant to the Shareholder Rights Plan, there
are no
options, warrants, conversion privileges or other rights, agreements,
arrangements or commitments (pre-emptive, contingent or otherwise) obligating
Arizona Star or any Arizona Star Subsidiary to issue or sell any shares of
Arizona Star or any Arizona Star Subsidiary or securities or obligations
of any
kind convertible into or exchangeable or exercisable for any shares of Arizona
Star or any Arizona Star Subsidiary.
(b) Arizona
Star has provided to Barrick, for all of the outstanding Options, a true
and
complete list setting out the name of each holder of a Option, the number
of
Options held by such person and the exercise price, date of grant, vesting
schedule and
expiry
date of each such Option, as well as a true
and complete copy of the Stock Option Plan.
(c) All
outstanding Common Shares and the Common Shares to be issued on the exercise
of
Options have been duly authorized. The outstanding Common Shares are,
and the Common Shares to be issued on the exercise of Options will be when
issued, validly issued and outstanding as fully paid and non-assessable shares,
free of pre-emptive rights.
(d) A
true and complete copy of the Shareholder Rights Plan has been provided to
Barrick on or before the date hereof.
(e) There
are no outstanding bonds, debentures or other evidences of indebtedness of
Arizona Star or any Arizona Star Subsidiary having the right to vote (or
that
are convertible for or exercisable into securities having the right to vote)
with the holders of the Common Shares on any matter. There are no
outstanding obligations of Arizona Star or any Arizona Star Subsidiary to
repurchase, redeem or otherwise acquire any outstanding Common Shares or
with
respect to the voting or disposition of any outstanding securities of Arizona
Star or any Arizona Star Subsidiary. No holder of securities issued
by Arizona Star or any Arizona Star Subsidiary has any right to compel Arizona
Star to register or otherwise qualify securities for public sale in Canada,
the
United States or elsewhere.
3. Authority
and
No Violation
(a) Arizona
Star has the necessary corporate power, authority and capacity to enter into
this Agreement and to perform its obligations hereunder. The
execution and delivery of this Agreement by Arizona Star and the consummation
by
Arizona Star of the Offer have been duly authorized by the Board of Directors
and no other corporate proceedings on its part are necessary to authorize
this
Agreement or the Offer, other than with respect to the Directors' Circular
and
other matters relating solely thereto. This Agreement has been duly
executed and delivered by Arizona Star and constitutes a legal, valid and
binding obligation of Arizona Star, enforceable against it in accordance
with
its terms, subject to bankruptcy, insolvency and other applicable Laws affecting
creditors' rights generally, and to general principles of equity.
(b) The
authorization of this Agreement, the execution and delivery by Arizona Star
of
this Agreement and the performance by it of its obligations under this Agreement
and the consummation of the Offer, any Compulsory Acquisition and any Subsequent
Acquisition Transaction will not:
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(i)
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result
(with or without notice or the passage of time) in a violation
or breach
of or constitute a default under, require an Authorization to be
obtained
under or give rise to any third party right of termination, amendment,
cancellation, acceleration, penalty or payment obligation or right
of
purchase or sale or pre-emptive or participation right under, any
provision of:
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(A)
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its
or any Arizona Star Subsidiary's notice of articles, articles,
by-laws or
other charter documents, the agreements among the shareholders
of any
Arizona Star Subsidiary or the agreements covering any of Arizona
Star's
material joint ventures;
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(B)
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any
applicable Laws, except to the extent that the violation or breach
of,
under, any applicable Laws, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect in respect
of
Arizona Star;
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(C)
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any
note, bond, mortgage, indenture, instrument, contract, agreement,
lease,
Authorization or government grant to which Arizona Star or any
Arizona
Star Subsidiary is party or by which it is bound, except as would
not,
individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect in respect of Arizona Star;
or
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(D)
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any
judgment, decree, order or award of any Governmental Entity or
arbitrator;
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(ii)
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give
rise to any right of termination, amendment, acceleration or cancellation
of indebtedness of Arizona Star or any Arizona Star Subsidiary,
or cause
any such indebtedness to come due before its stated maturity, or
cause any
available credit of Arizona Star or any Arizona Star Subsidiary
to cease
to be available, or cause any security interest in any assets of
Arizona
Star or any Arizona Star Subsidiary to become enforceable or
realizable;
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(iii)
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give
rise to any rights of first refusal or trigger any change in control
provisions or any restriction or limitation under any such note,
bond,
mortgage, indenture, contract, agreement, Authorization or government
grant, except as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect in respect of Arizona
Star;
or
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(iv)
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result
in the imposition of any Encumbrance upon any assets of Arizona
Star or
any Arizona Star Subsidiary, except as would not, individually
or in the
aggregate, reasonably be expected to have a Material Adverse Effect
in
respect of Arizona Star.
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(c) No
consent, approval, order or authorization of, or registration, declaration
or
filing with, any Governmental Entity is required to be obtained by Arizona
Star
in connection with the consummation of the transactions contemplated by the
Offer and this Agreement other than those which are expressly contemplated
by
the Offer and this Agreement.
4. Public
Filings
Arizona
Star has filed all material documents or information required to be filed
by it
under Applicable Securities Laws or with the TSXV or AMEX since May 1,
2006. All of the Arizona Star Public Documents, as of their
respective dates, did 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 therein, in light of the circumstances under which they were
made, not misleading as at the time at which they were filed with applicable
securities regulatory authorities. All of the Arizona Star Public
Documents, as of their respective dates (and as of the dates of any amendments
thereto), complied as to both form and content in all material respects with
the
requirements of Applicable Securities Laws or were amended on a timely basis
to
correct deficiencies identified by securities commissions or similar securities
regulatory authorities. All of the Arizona Star Public Documents are
publicly available either on SEDAR or on XXXXX. Arizona Star has not
filed any confidential material change report with any securities regulatory
authority that at the date hereof remains confidential. There is no material
fact concerning Arizona Star which has not been disclosed in the Arizona
Star
Public Documents filed (and available on SEDAR) on or before the date
hereof.
5. Mineral
Reserves and Resources
The
estimated proven and probable mineral reserves and estimated indicated, measured
and inferred mineral resources disclosed in the Arizona Star Public Documents
since May 1, 2006 have been prepared and disclosed in all material respects
in
accordance with accepted engineering practices and all applicable
Laws. There has been no material reduction in the aggregate amount of
estimated mineral reserves, estimated mineral resources or mineralized material
of Arizona Star and the Arizona Star Subsidiaries, taken as a whole, from
the
amounts disclosed in the Arizona Star Public Documents since May 1,
2006. Except as set out in the Disclosure Letter, all material drill
results have been disclosed in the Arizona Star Public Documents filed (and
available on SEDAR) on or before the date hereof.
6. Financial
Statements
The
audited consolidated financial statements of Arizona Star (including any
related
notes thereto) for the fiscal year ended April 30, 2007 and the interim
consolidated financial statements of Arizona Star (including any related
notes
thereto) for the period ended July 31, 2007 have been prepared in accordance
with GAAP and all applicable Laws and present fairly, in all material respects,
the assets, liabilities (whether accrued, absolute, contingent or otherwise),
financial position and results of operations of Arizona Star and the Arizona
Star Subsidiaries on a consolidated basis as at April 30, 2007 and July 31,
2007, as applicable, and for the periods covered thereby applied on a basis
consistent with the immediately prior period and throughout the periods
indicated (except as may be indicated expressly in the notes thereto) and,
in
the case of unaudited statements, subject to normal, recurring period-end
adjustments that are not material. Such financial statements reflect
appropriate and adequate reserves in accordance with GAAP in respect of
contingent liabilities, if any, of Arizona Star and the Arizona Star
Subsidiaries on a consolidated basis.
7. Financial
Information
No
budget
provided by Arizona Star to Barrick contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein not misleading under the circumstances in which they were
made
at the time such statements are made. All budgets supplied by or on
behalf of Arizona Star to Barrick in connection with the transactions
contemplated by this Agreement were prepared in good faith, disclosed all
relevant assumptions and the most recent versions of all such forecasts,
budgets
and projections provided by or on behalf of Arizona Star are, in the opinion
of
Arizona Star, reasonable estimates of the prospects of the
business.
8. Liabilities
and Indebtedness
Except
as
disclosed in the Disclosure Letter, neither Arizona Star nor any of the Arizona
Star Subsidiaries has any material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise), or any obligation to
issue
any debt securities, or guarantee, endorse or otherwise become responsible
for,
the obligations of any other person.
9. No
Brokers
Except
for the fee to be paid to Citigroup Global Markets Inc. pursuant to its
engagement letter with Arizona Star, a true and complete copy of which has
been
delivered to Barrick, Arizona Star has not agreed to pay any brokerage fees,
finder's fees, financial advisory fees, agent's commissions or other similar
forms of compensation in connection with the Offer or any similar
transaction.
10. Books
and
Records
(a) The
financial books, records and accounts of Arizona Star and each of the Arizona
Star Subsidiaries, in all material respects:
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(i)
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have
been maintained in accordance with accounting principles generally
accepted in the country of domicile of each such entity on a basis
consistent with prior years;
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(ii)
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are
stated in reasonable detail and accurately and fairly reflect the
material
transactions and dispositions of the assets of Arizona Star and
the
Arizona Star Subsidiaries; and
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(iii)
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accurately
and fairly reflect the basis for Arizona Star financial
statements.
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(b) Arizona
Star's and the Arizona Star Subsidiaries' corporate minute books contain
minutes
of all meetings and resolutions of the directors and securityholders
held.
(c) Arizona
Star has provided to Barrick, on or before the date hereof, a true and complete
copy of the minute books of CMC (including all meetings of the
management
committee and any other committees of CMC)
from February 1, 2005 and a true and complete copy of the minute books of
Arizona Star from January 1, 2002.
(d) Arizona
Star has provided to Barrick, on or before the date hereof, a true and complete
copy of all monthly reports and other reports prepared by or on behalf of
the
general manager of CMC and the Cerro Xxxxxx project or otherwise prepared
for
the management committee or board of directors of CMC, in each case from
June
19, 2006.
11. Non-Competition
Agreements
Neither
Arizona Star nor any Arizona Star Subsidiary is a party to or bound by any
non-competition agreement or any other agreement or obligation which purports
to
limit the manner or the localities in which all or any material portion of
the
business of Arizona Star and the Arizona Star Subsidiaries is or would be
conducted.
12. Absence
of
Certain Changes or Events
Since
May
1, 2007, except as disclosed in the Arizona Star Public Documents filed (and
available on SEDAR) on or before the date hereof, and other than for the
purposes of the transactions contemplated herein:
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(a)
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Arizona
Star and each of the Arizona Star Subsidiaries has conducted its
business
only in the ordinary course of business consistent with past
practice;
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(b)
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there
has not occurred one or more changes, events or occurrences which
would,
individually or in the aggregate, be reasonably likely to result
in a
Material Adverse Effect in respect of Arizona
Star;
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(c)
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neither
Arizona Star nor any Arizona Star Subsidiary has incurred any liabilities
or obligations of any nature (whether accrued, absolute, contingent
or
otherwise) which would, individually or in the aggregate, reasonably
be
expected to result in a Material Adverse Effect in respect of Arizona
Star;
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(d)
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there
has not been any incurrence, assumption or guarantee by Arizona
Star or
any Arizona Star Subsidiary of any debt for borrowed money, any
creation
or assumption by Arizona Star or any Arizona Star Subsidiary of
any
Encumbrance, or any making by Arizona Star or any Arizona Star
Subsidiary
of any loan, advance or capital contribution to or investment in
any other
person; and
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(e)
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Arizona
Star has not effected any change in its accounting methods, principles
or
practices.
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13.
No
Default
Except
as
disclosed in the Disclosure Letter, neither Arizona Star nor any of the Arizona
Star Subsidiaries, nor, to the knowledge of Arizona Star, any other party
thereto, is in default under, and there exists no event, condition or occurrence
which, after notice or lapse of time or both, would constitute such a default
or
would trigger a right of termination under: (A) any note, bond, mortgage,
indenture or other instrument evidencing any indebtedness to which Arizona
Star
or any Arizona Star Subsidiary is a party; or (B) any other contract, agreement,
lease, letter of intent, offer, Authorization or government grant or other
instrument or obligation, which would individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect in respect of Arizona
Star.
14.
Litigation
(a) Except
as disclosed in the Disclosure Letter, there is no claim, action, proceeding
or,
to the knowledge of Arizona Star, investigation that has been commenced or
is
pending or, to the knowledge of Arizona Star, threatened against Arizona
Star or
any Arizona Star Subsidiary or affecting any of its property or assets before
any Governmental Entity which, if determined adversely to Arizona Star or
the
Arizona Star Subsidiary, as the case may be, would, individually or in the
aggregate:
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(i)
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reasonably
be expected to result in liability to Arizona Star or any Arizona
Star
Subsidiary in excess of $100,000 or have a Material Adverse Effect
in
respect of Arizona Star, nor is Arizona Star aware of any existing
ground
on which any such claim, action, proceeding or investigation might
be
commenced with any reasonable likelihood of success;
or
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(ii)
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reasonably
be expected to prevent or materially delay the consummation of
the Offer,
a Compulsory Acquisition or a Subsequent Acquisition Transaction
or to
have a Material Adverse Effect on Barrick if the Offer, any Compulsory
Acquisition or any Subsequent Acquisition is
consummated.
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(b) Except
as disclosed in the Arizona Star Public Documents filed (and available on
SEDAR)
on or before the date hereof, neither Arizona Star nor any of the Arizona
Star
Subsidiaries, nor any of their respective assets and properties, is subject
to
any outstanding judgment, order, writ, injunction or decree which would
reasonably be expected to have a Material Adverse Effect in respect of Arizona
Star or to prevent or materially delay the consummation of the Offer, a
Compulsory Acquisition or a Subsequent Acquisition Transaction.
15.
Compliance with Laws
Arizona
Star and the Arizona Star Subsidiaries have complied with and are not in
violation of any applicable Laws, other than non-compliance or violations
which
would not, individually or in the aggregate, reasonably be expected to have
a
Material Adverse Effect with respect to Arizona Star, or which would not
materially impair the ability of Arizona Star to
perform
its obligations hereunder or reasonably be
expected to prevent or materially delay the consummation of the Offer, any
Compulsory Acquisition or any Subsequent Acquisition Transaction.
16. Employment
Matters
(a) Except
as disclosed in the Disclosure Letter, no person is a party to or a participant
in any agreement, arrangement, plan, obligation or understanding providing
for
severance or termination or other payments in connection with the termination
of
the employment or engagement of, or resignation of, any director, officer
or
employee of, or independent contractor to, Arizona Star or any Arizona Star
Subsidiary following a change of control of Arizona Star and there are no
written or oral agreements, arrangements, plans, obligations or understandings
providing for severance or termination or other payments in connection with
the
termination of the employment or engagement of, or resignation of, any director,
officer or employee of, or independent contractor to, Arizona Star or any
Arizona Star Subsidiary following a change of control of Arizona
Star.
(b) Except
as disclosed in the Disclosure Letter, neither Arizona Star nor any Arizona
Star
Subsidiary is a party to any employment, engagement or similar agreement
with
any director or officer of Arizona Star or any Arizona Star
Subsidiary.
(c) Except
as disclosed in the Disclosure Letter, Arizona Star has not declared or paid,
or
committed to declare or pay, any amount to any person in respect of a
performance or incentive or other bonus in respect of all or any part of
its
fiscal year ended on April 30, 2007 or its fiscal year ending on April 30,
2008
or in connection with the completion of the transactions contemplated by
the
Offer and this Agreement.
(d) Neither
Arizona Star nor any Arizona Star Subsidiary is subject to any claim for
wrongful dismissal, constructive dismissal or any other claim, actual or
threatened, or any litigation, actual or threatened, relating to its employees
or independent contractors (including any termination of such persons) other
than those claims or such litigation as would individually or in the aggregate
not have a Material Adverse Effect in respect of Arizona Star.
(e) Neither
Arizona Star nor any Arizona Star Subsidiary is a party to any collective
bargaining agreement or subject to any application for certification or
threatened or apparent union-organizing campaign and there are no current,
pending or threatened strikes, lockouts or other labour disputes or disruptions
at Arizona Star or any Arizona Star Subsidiary.
(f) Neither
Arizona Star nor any Arizona Star subsidiary has any Pension Plan.
17.
Powers of Attorney
Except
as
disclosed in the Disclosure Letter, no power of attorney has been granted
to
allow any person to take any action on behalf of CMC, nor has any such power
of
attorney
been authorized, except in each case for
powers of attorney which, on their face, have expired on or before the date
hereof.
18.
Tax
Matters
Except
in
each case as would not, individually or in the aggregate, result in a Material
Adverse Effect with respect to Arizona Star or otherwise as specifically
described in the Disclosure Letter:
(a) Arizona
Star and each of the Arizona Star Subsidiaries has duly and in a timely manner
filed all tax returns required to be filed by it and all such returns are
correct and complete in all respects and fully disclose the income and expenses
as required or permitted by applicable Law. Arizona Star and each of
the Arizona Star Subsidiaries has paid on a timely basis all Taxes, including
instalments, which are due and payable, and has paid all assessments and
reassessments, and all other taxes, governmental charges, penalties, interest
and fines due and payable by it on or before the date hereof, other than
those
which are being contested in good faith and in respect of which reserves
have
been provided in the most recently published financial statements of Arizona
Star. Adequate provision has been made on the consolidated financial
statements of Arizona Star for amounts at least equal to the amount of all
Taxes
assessed and all Taxes owing by any of Arizona Star or any Arizona Star
Subsidiary that are not yet due and payable and that relate to periods ending
on
or prior to the date of this Agreement, including income taxes and related
deferred taxes, in conformity with GAAP and all other applicable accounting
rules and principles. Except as disclosed in the Arizona Star Public
Documents filed (and available on SEDAR) on or before the date hereof, no
deficiencies exist or have been asserted with respect to Taxes of Arizona
Star
or any Arizona Star Subsidiary and there are no actions, suits, proceedings,
investigations or claims outstanding, pending or, to the knowledge of Arizona
Star, threatened against Arizona Star or any of the Arizona Star Subsidiaries
in
respect of Taxes or assessments or any matters under discussion with any
Governmental Entity relating to Taxes or assessments asserted by any such
authority.
(b) Neither
Arizona Star nor any Arizona Star Subsidiary is party to any material tax
sharing agreement, tax indemnification agreement or other agreement or
arrangement relating to Taxes with any person (other than Arizona Star or
any
Arizona Star Subsidiary).
(c) Arizona
Star and each Arizona Star Subsidiary has withheld from each payment made
to all
of its current and former officers, directors and employees, and from each
other
payment of any nature made to any person, the amount of all Taxes including,
but
not limited to, income tax and other deductions required to be withheld
therefrom and has paid the same to the applicable Governmental Entity within
the
time required under applicable Law.
19.
Insurance
Arizona
Star and each of the Arizona Star Subsidiaries maintains or causes to be
maintained insurance, naming Arizona Star as an insured, of the types and
in
amounts customary and usual for persons engaged in a business similar to
that
carried out by Arizona Star and the Arizona Star Subsidiaries.
20.
Material Contracts
Except
as
set forth in the Disclosure Letter, there is (a) no contract (or amendment
thereto) to which Arizona Star or a Arizona Star Subsidiary is a party or
by
which any of them or their respective properties or assets are bound that
(i) if
terminated, would reasonably be expected to have a Material Adverse Effect
in
respect of Arizona Star, (ii) is a contract or group of related contracts
that
involves payment to or by Arizona Star or a Arizona Star Subsidiary of more
than
$100,000 per annum (other than contracts with suppliers and customers entered
into in the ordinary course of business), (iii) is a contract that contains
any
non-competition obligations or otherwise restricts in any material way the
business of Arizona Star or any Arizona Star Subsidiary, (iv) is a contract
pursuant to which Arizona Star or any Arizona Star Subsidiary provides any
indemnification to any other person (other than Arizona Star or Arizona Star
Subsidiary), (v) is with a Governmental Entity, (vi) is with Kinross Gold
Corporation or any of its affiliates, or (vii) provides for the management
of
any Arizona Star Subsidiary or governs the relationship between any direct
or
indirect shareholders of any Arizona Star Subsidiary with respect to such
Arizona Star Subsidiary, (b) no contract (or amendment thereof) entered into
by
Kinross Gold Corporation or any of its affiliates, including in its capacity
as
general manager of CMC or the Cerro Xxxxxx project, in respect of CMC or
the
Cerro Xxxxxx project in the possession or control of Arizona Star or any
Arizona
Star Subsidiary (the contracts described in items (a)(i) to (a)(vii) and
in item
(b) being collectively referred to as the "Material
Contracts"), and (c) no correspondence between Arizona or any Arizona
Subsidiary (or any agent or advisor thereto), on the one hand, and Kinross
Gold
Corporation or any of its affiliates (or any agent or advisor thereto), on
the
other hand, relating to or discussing the interpretation, validity, status
or
performance of any Material Contract. Except as set forth in the
Disclosure Letter, all Material Contracts are legal, valid, binding and in
full
force and effect and are enforceable by Arizona Star or any Arizona Star
Subsidiary in accordance with their respective terms (subject to bankruptcy,
insolvency and other applicable Laws affecting creditors' rights generally,
and
to general principles of equity) and are the product of fair and arm's length
negotiations between the parties thereto. Arizona Star and each
Arizona Star Subsidiary has performed in all material respects all respective
obligations required to be performed by them to date under the Material
Contracts and are not, and are not to the knowledge of Arizona Star alleged
to
be, (with or without the lapse of time or the giving of notice, or both)
in
breach or default in any material respect thereunder. A true and
complete copy of each Material Contract has been provided by Arizona Star
to
Barrick on or before the date hereof.
21.
Related Party Transactions
Neither
Arizona Star nor any of the Arizona Star Subsidiaries is indebted to any
director, officer, employee or agent of, or independent contractor to, Arizona
Star or any of the Arizona Star Subsidiaries or any of their respective
affiliates or associates (except for amounts
due
as normal salaries and bonuses and in
reimbursement of ordinary expenses). Except as disclosed in the
Arizona Star Public Documents filed (and available on SEDAR) or as set forth
in
the Disclosure Letter, on or before the date hereof, no director, officer,
employee or agent of Arizona Star or any of the Arizona Star Subsidiaries
or any
of their respective affiliates or associates is a party to any loan, contract,
arrangement or understanding or other transactions with Arizona Star or any
of
the Arizona Star Subsidiaries required to be disclosed pursuant to Applicable
Securities Laws.
22.
Property and Mineral Rights; Operations
(a) With
respect to Arizona Star's real property (collectively, the
"Property") and mineral interests and rights (including any
claims, concessions, exploration licences and exploitation licences, which
shall
include, without limitation, the licenses set out in the Disclosure Letter)
(collectively, the "MineralRights"), all of
which are described in the Disclosure Letter, except as disclosed in the
Disclosure Letter:
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(i)
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Arizona
Star or a Arizona Star Subsidiary is the sole legal and beneficial
owner
of all right, title and interest in and to the Property and the
Mineral
Rights, free and clear of any
Encumbrances;
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(ii)
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all
of the Mineral Rights have been properly located and recorded in
compliance with applicable Law and are comprised of valid and subsisting
mineral claims;
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(iii)
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the
Property and the Mineral Rights are in good standing under applicable
Law
and, to the knowledge of Arizona Star, all work required to be
performed
and filed in respect thereof has been performed and filed, all
taxes,
rentals, fees, expenditures and other payments in respect thereof
have
been paid or incurred and all filings in respect thereof have been
made;
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(iv)
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there
is no adverse claim against or challenge to the title to or ownership
of
the Property or any of the Mineral
Rights;
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(v)
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Arizona
Star or an Arizona Star Subsidiary has the exclusive right to deal
with
the Property and all of the Mineral
Rights;
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(vi)
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no
person other than Arizona Star and Arizona Star Subsidiaries has
any
interest in the Property or any of the Mineral Rights or the production
or
profits therefrom or any royalty in respect thereof or any right
to
acquire any such interest;
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(vii)
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there
are no back-in rights, earn-in rights, rights of first refusal
or similar
provisions or rights which would affect Arizona Star's interest
in the
Property or any of the Mineral
Rights;
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(viii)
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there
are no material restrictions on the ability of Arizona Star and
the
Arizona Star Subsidiaries to use, transfer or exploit the Property
or any
of the Mineral Rights, except pursuant to the applicable
Law;
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(ix)
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neither
Arizona Star nor any Arizona Star Subsidiary has received any notice,
whether written or oral, from any Governmental Entity of any revocation
or
intention to revoke any interest of Arizona Star in any of the
Property or
any of the Mineral Rights; and
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(x)
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Arizona
Star and the Arizona Star Subsidiaries have all surface rights,
including
fee simple estates, leases, easements, rights of way and permits
or
licences operations from landowners or Governmental Entities permitting
the use of land by Arizona Star and the Arizona Star Subsidiaries,
and
mineral interests that are required to exploit the development
potential
of the Property and the Mineral Rights as contemplated in the Arizona
Star
Public Documents filed (and available on SEDAR) on or before the
date
hereof and no third party or group holds any such rights that would
be
required by Arizona Star to develop the Property or any of the
Mineral
Rights as contemplated in the Arizona Star Public Documents filed
(and
available on SEDAR) on or before the date
hereof.
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(b)
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All
mines located in or on the lands of Arizona Star or any Arizona
Star
Subsidiary, or lands pooled or unitized therewith, which have been
abandoned by Arizona Star or any Arizona Star Subsidiary, have
been
abandoned in accordance with good mining practices and in compliance
with
all applicable Laws.
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23.
Authorizations
Arizona
Star and each Arizona Star Subsidiary possess all Authorizations, including
water rights, necessary to properly conduct their respective
businesses. The Authorizations, including water rights, obtained or
to be obtained by Arizona Star or any Arizona Star Subsidiary that are necessary
or desirable to develop the Property and the Mineral Rights in the manner
contemplated in the Arizona Star Public Documents filed (and available on
SEDAR)
on or before the date hereof, including, without limitation, Authorizations
relating to the construction and operation of required infrastructure and
mine
workings and water barrage facilities, are consistent with those outlined
in the
Arizona Star Public Disclosure. Each Authorization obtained by
Arizona Star or any Arizona Star Subsidiary is in full force and effect and
not
subject to any dispute. Arizona Star and the Arizona Star
Subsidiaries are in compliance with each of such Authorizations, except for
such
non-compliance as would not, individually or in the aggregate, reasonably
be
expected to have a Material Adverse Effect with respect to Arizona Star,
or
would not reasonably be expected to materially impair the ability of Arizona
Star to perform its obligations hereunder or prevent or materially delay
the
consummation of the Offer, any Compulsory Acquisition or any Subsequent
Acquisition Transaction. No event has
occurred
which, with the giving of notice, lapse of
time or both, could constitute a default under, or in respect of, any of
such
Authorizations. Arizona Star has no reason to believe that the
Authorizations required to be obtained by Arizona Star or any Arizona Star
Subsidiary in order to develop the Property and the Mineral Rights in the
manner
contemplated in the Arizona Star Public Documents filed (and available on
SEDAR)
on or before the date hereof will not be obtained in the ordinary course
and
without undue delay.
24.
Environmental
Except
for any matters that, individually or in the aggregate, could not reasonably
be
expected to have a Material Adverse Effect in respect of Arizona
Star:
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(a)
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all
facilities and operations of Arizona Star and the Arizona Star
Subsidiaries have been conducted, and are now, in compliance with
all
environmental Laws;
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(b)
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Arizona
Star and the Arizona Star Subsidiaries are in possession of, and
in
compliance with, all environmental approvals, consents, waivers,
permits,
orders and exemptions required to own, lease and operate its real
property
and mineral interests and rights and to conduct its business as
it is now
being conducted;
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(c)
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no
environmental, reclamation or closure obligation, demand, notice,
work
order or other liabilities presently exist with respect to any
portion of
any currently or formerly owned, leased, used or otherwise controlled
property, interests and rights or relating to the operations and
business
of Arizona Star and the Arizona Star Subsidiaries and, to the knowledge
of
Arizona Star, there is no basis for any such obligations, demands,
notices, work orders or liabilities to arise in the future as a
result of
any activity in respect of such property, interests, rights, operations
and business;
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(d)
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neither
Arizona Star nor any Arizona Star Subsidiary is subject to any
proceeding,
application, order or directive which relates to environmental,
health or
safety matters, and which may require any material work, repairs,
construction or expenditures;
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(e)
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to
the knowledge of Arizona Star, there are no actual changes in the
status,
terms or conditions of any environmental approvals, consents, waivers,
permits, orders and exemptions held by Arizona Star or any Arizona
Star
Subsidiary or any renewal, modification, revocation, reassurance,
alteration, transfer or amendment of any such environmental approvals,
consents, waivers, permits, orders and exemptions, or any review
by, or
approval of, any Governmental Entity of such environmental approvals,
consents, waivers, permits, orders and exemptions that are required
in
connection with the execution or delivery of this Agreement, the
consummation of the transactions contemplated herein or the continuation
of the business of Arizona Star or any Arizona Star Subsidiary
following
the Expiry Time, except as set out in the Disclosure
Letter;
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(f)
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Arizona
Star and the Arizona Star Subsidiaries have made available to Barrick
all
material audits, assessments, investigation reports, studies, plans,
regulatory
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correspondence
and similar information with respect
to environmental matters; and
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(g)
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Arizona
Star and the Arizona Star Subsidiaries are not subject to any past
or
present fact, condition or circumstance that could reasonably be
expected
to result in any liability under any environmental Laws, to Arizona
Star's
knowledge.
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25. Disclosure
Controls and Procedures
Arizona
Star has devised and maintained a system of disclosure controls and procedures
designed to ensure that information required to be disclosed by Arizona Star
under Applicable Securities Laws is recorded, processed, summarized and reported
within the time periods specified in the Applicable Securities
Laws. Such disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by Arizona Star in the Arizona Star Public Documents is
accumulated and communicated to the management of Arizona Star, including
its
principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
26. Internal
Control Over Financial Reporting
Arizona
Star maintains internal control over financial reporting. Such internal control
over financial reporting is effective in providing reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with GAAP and includes
policies and procedures that: (i) pertain to the maintenance of records that
in
reasonable detail accurately and fairly reflect the transactions and
dispositions of the assets of Arizona Star and the Arizona Star Subsidiaries;
(ii) provide reasonable assurance that transactions are recorded as necessary
to
permit preparation of financial statements in accordance with GAAP, and that
receipts and expenditures of Arizona Star and the Arizona Star Subsidiaries
are
being made only in accordance with authorizations of management and directors
of
Arizona Star and the Arizona Star Subsidiaries; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use or disposition of the assets of Arizona Star or the Arizona
Star Subsidiaries that could have a material effect on its financial
statements. To the knowledge of Arizona Star, prior to the date of
this Agreement: (A) there are no significant deficiencies in the design or
operation of, or material weaknesses in, the internal controls over financial
reporting of Arizona Star that are reasonably likely to adversely affect
the
ability of Barrick to record, process, summarize and report financial
information, and (B) there is no fraud, whether or not material, that involves
management or other employees who have a significant role in the internal
control over financial reporting of Arizona Star. Since May 1, 2006,
Arizona Star has received no (x) material complaints from any source regarding
accounting, internal accounting controls or auditing matters or (y) expressions
of concern from employees of Arizona Star regarding questionable accounting
or
auditing matters.
27.
Up-the-Ladder Reporting
Except
as
disclosed in the Disclosure Letter, no attorney representing Arizona Star
or any
Arizona Star Subsidiary, whether or not employed by Arizona Star or any Arizona
Star Subsidiary, has reported evidence of a violation of any Applicable
Securities Laws, breach of fiduciary duty or similar violation by Arizona
Star
or any Arizona Star Subsidiary or their respective officers, directors,
employees, agents or independent contractors to Arizona Star's chief legal
officer, audit committee (or other committee designated for the purpose)
of the
board of directors or board of directors.
28.
Stock Exchange Compliance
Arizona
Star is in compliance in all material respects with the applicable listing
and
corporate governance rules and regulations of the TSXV and AMEX.
29. Reporting
Issuer Status
As
at the
date hereof Arizona Star is a reporting issuer not in default under the
securities laws of (a) the Provinces of British Columbia and Alberta, and
(b)
the Xxxxxx Xxxxxx.
00. Xxxxxx
Xxxxxx Securities Laws
(a) Arizona
Star is not an investment company registered or required to be registered
under
the U.S. Investment Company Act of 1940, as amended.
(b) Arizona
Star is a "foreign private issuer" (as such term is defined in Rule 3b-1
under
the US Exchange Act).
(c) To
Arizona Star's knowledge, persons holding not more than 40% of the Common
Shares
are U.S. holders for purposes of Rule 14d-1(b) under the US Exchange
Act.
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