CLOSING AGREEMENT
THIS AGREEMENT made the 20th day of October, 1995.
BETWEEN:
▇▇▇▇▇▇▇-▇▇▇▇ GOLD COMPANY INC.
a corporation incorporated under the laws of the State
of Nevada,
(hereinafter referred to as "▇▇▇▇▇▇▇-▇▇▇▇")
OF THE FIRST PART
- and -
GREENSTONE RESOURCES CANADA, LTD.
a corporation incorporated under the laws of Bermuda,
(hereinafter referred to as "Greenstone Bermuda")
OF THE SECOND PART
- and -
GREENSTONE RESOURCES LTD.
a corporation incorporated under the laws of Canada,
(hereinafter referred to as "Greenstone")
OF THE THIRD PART
WHEREAS pursuant to a letter agreement dated August 28, 1995
(the "Letter Agreement") between ▇▇▇▇▇▇▇-▇▇▇▇ and Greenstone,
▇▇▇▇▇▇▇-▇▇▇▇ agreed to purchase 100% of Greenstone's Colombia
branch, in exchange for ▇▇▇▇▇▇▇-▇▇▇▇'▇ interest in Minerales de
Copan S.A. de C.V.;
AND WHEREAS the parties wish to complete the transactions
contemplated by the Letter Agreement;
AND WHEREAS to facilitate the closing of the transaction,
Greenstone Bermuda has incorporated the Corporation (as defined
below), and transferred to it all of the assets and certain of
the liabilities of its Colombian branch;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in
consideration of the covenants, agreements, warranties and
payments herein set out and provided for, the parties hereto
hereby respectively covenant and agree as follows:
1. Defined Terms:
Where used herein or in any amendments hereto, the
following terms shall have the following meanings respectively:
1.1 "the Corporation" means Greenstone Resources of Colombia
Ltd., a corporation incorporated under the laws of Bermuda;
1.2 "Common Shares" means the common shares (without par value)
in the capital of the Corporation;
1.3 "Copan Interests" means the shares of Minerales de Copan
and options to acquire shares of Minerales de Copan currently
held by ▇▇▇▇▇▇▇-▇▇▇▇ and its affiliates, including without
limitation the shares and options described in Schedule 3;
1.4 "Effective Time" means the close of business on the 24th
day of August, 1995;
1.5 "GOC" means Greenstone of Colombia, a wholly-owned branch
of Greenstone Bermuda registered to carry on business in
Colombia;
1.6 "Minerales de Copan" means Minerales de Copan S.A. de C.V.,
a corporation incorporated under the laws of Honduras;
1.7 "MSR" means Minas Santa ▇▇▇▇ ▇.▇., a wholly-owned
subsidiary of Greenstone Bermuda incorporated under the laws of
Panama;
1.8 "Oronorte" means Compania Minera Oronorte S.A., a
corporation incorporated under the laws of Colombia;
1.9 "Oronorte Shares" means the shares in the capital of
Oronorte;
1.10 "Promissory Note" means the promissory note of the
Corporation dated October 20, 1995, pursuant to which the
Corporation promises to pay to Greenstone Bermuda the principal
sum of US$300,000, together with interest at the rate of 10% per
annum;
1.10 The term "Purchased Shares" has the meaning attributed
thereto in Article 3;
1.11 All dollar amounts referred to in this agreement are in
U.S. funds.
2. Schedules:
The following are the Schedules attached to and
incorporated in this agreement by references and deemed to be
part hereof:
Schedule 1 Assets of GOC as at the Effective Time
Schedule 2 Liabilities of GOC as at the Effective Time,
including known contingent liabilities
Schedule 3 Copan Interests
3. Transfer of Purchased Shares for Copan Interests
3.1 Subject to the terms and conditions hereof, Greenstone
Bermuda hereby sells, assigns and transfers to ▇▇▇▇▇▇▇-▇▇▇▇ and
▇▇▇▇▇▇▇-▇▇▇▇ hereby purchases from Greenstone Bermuda all of the
issued and outstanding shares in the capital of the Corporation
(the "Purchased Shares").
3.2 In satisfaction of the purchase price for the Purchased
Shares, ▇▇▇▇▇▇▇-▇▇▇▇ hereby sells, assigns and transfers to
Greenstone Bermuda, and Greenstone Bermuda hereby purchases from
▇▇▇▇▇▇▇-▇▇▇▇, the Copan Interests.
4. Covenants, Representations and Warranties of Greenstone
Bermuda:
Greenstone Bermuda covenants, represents and warrants as
follows and acknowledges that ▇▇▇▇▇▇▇-▇▇▇▇ is relying upon such
covenants, representations and warranties in connection with the
purchase by ▇▇▇▇▇▇▇-▇▇▇▇ of the Purchased Shares:
4.1 The representations and warranties of Greenstone as set out
in the Letter Agreement are true and correct;
4.2 The Corporation has been duly incorporated and organized
and is validly subsisting and in good standing under the laws of
Bermuda; it has the corporate power to own GOC;
4.3 The authorized capital of the Corporation consists of
5,000,000 Common Shares, of which 5,000,000 of the Common Shares
(and no more)(being the Purchased Shares referred to herein) have
been duly issued and are outstanding as fully paid and non-assessable;
4.4 All of the Purchased Shares are owned by Greenstone Bermuda
as the beneficial owner of record, with a good and marketable
title thereto, free and clear of all mortgages, liens, charges,
security interests, adverse claims, pledges, encumbrances and
demands whatsoever;
4.5 No person, firm or corporation has any agreements or option
or any right to privilege (whether by law, preemptive or
contractual) capable of becoming an agreement or option for the
purchase from Greenstone Bermuda of any of the Purchased Shares;
4.6 No person, firm or corporation has any agreement or option
or any right or privilege (whether by law, preemptive or
contractual) capable of becoming an agreement, including
convertible securities, warrants or convertible obligations of
any nature, for the purchase, subscription, allotment or issuance
of any of the unissued shares in the capital of the Corporation
or of any securities of the Corporation;
4.7 The books and records of the Corporation fairly and
correctly set out and disclose in all material respects, in
accordance with generally accepted accounting principles, the
financial position of the Corporation as at the date hereof and
all material financial transactions of the Corporation relating
to GOC and Oronorte have been accurately recorded in such books
and records;
4.8 The corporate records and minute books of the Corporation
contain complete and accurate minutes of all meetings of the
directors and shareholders of the Corporation held since the
incorporation of the Corporation, all such meetings were duly
called and held, the share certificate books, register of
shareholders, register of transfers, and register of directors of
the Corporation are complete and accurate and all exigible
security transfer tax payable in connection with the transfer of
any securities of the Corporation has been duly paid;
4.9 The entering into of this agreement and the transactions
contemplated hereby will not result in the violation of any of
the terms and provisions of the constating documents or by-laws
of the Corporation or of any indenture or other agreement,
written or oral, to which the Corporation may be a party;
4.10 This agreement has been duly executed and delivered by
Greenstone Bermuda and is a valid and binding obligation of
Greenstone Bermuda enforceable in accordance with its terms;
4.11 The only assets of the Corporation consist of its interest
in GOC; the only liabilities of the Corporation consist of its
indebtedness to Greenstone Bermuda as evidenced by the Promissory
Note; as at the Effective Time, the assets of GOC included the
shares of Oronorte described in Schedule 1 attached hereto, and
the current assets of Oronorte included the pending settlement,
cash, gold and accounts receivable described in Schedule 1
attached hereto, and the liabilities of GOC and its subsidiaries
included the liabilities described in Schedule 2 attached hereto;
4.12 The issued and outstanding share capital of Oronorte
consists of 64,840,000 Oronorte Shares;
4.13 61,539,997 Oronorte Shares are owned by GOC as the
beneficial owner of record, with a good and marketable title
thereto, free and clear of all mortgages, liens, charges,
security interests, adverse claims, pledges, encumbrances and
demands whatsoever; GOC is the beneficial owner of an additional
3 Oronorte Shares, as described in Schedule 1 attached hereto;
4.14 470,000 Oronorte Shares are owned by MSR as the beneficial
owner of record, with a good and marketable title thereto, free
and clear of all mortgages, liens, charges, security interests,
adverse claims, pledges, encumbrances and demands whatsoever;
4.15 No person, firm or corporation has any agreements or option
or any right to privilege (whether by law, preemptive or
contractual) capable of becoming an agreement or option for the
purchase from GOC or any of the 61,539,997 Oronorte Shares held
by GOC or of any of the 470,000 Oronorte Shares held by MSR;
4.16 No person, firm or corporation has any agreement or option
or any right or privilege (whether by law, preemptive or
contractual) capable of becoming an agreement, including
convertible securities, warrants or convertible obligations of
any nature, for the purchase, subscription, allotment or issuance
of any of the unissued shares in the capital of Oronorte or of
any securities of Oronorte;
5. Covenants, Representations and Warranties of ▇▇▇▇▇▇▇-▇▇▇▇:
▇▇▇▇▇▇▇-▇▇▇▇ covenants, represents and warrants as follows
and acknowledges that Greenstone Bermuda is relying upon such
covenants, representations and warranties in connection with the
acquisition by Greenstone Bermuda of the Copan Interests:
5.1 The representations and warranties of ▇▇▇▇▇▇▇-▇▇▇▇ as set
out in the Letter Agreement are true and correct;
5.2 All of the Copan Interests are owned by ▇▇▇▇▇▇▇-▇▇▇▇ or its
affiliates as the beneficial owner of record, with a good and
marketable title thereto, free and clear of all mortgages, liens,
charges, security interests, adverse claims, pledges,
encumbrances and demands whatsoever, except for the liens in
favour of Greenstone or any of its subsidiaries;
5.3 No person, firm or corporation other than Greenstone or its
affiliates has any agreements or option or any right to privilege
(whether by law, preemptive or contractual) capable of becoming
an agreement or option for the purchase from ▇▇▇▇▇▇▇-▇▇▇▇ or its
affiliates of any of the Copan Interests;
5.4 The entering into of this agreement and the transactions
contemplated hereby will not result in the violation of any of
the terms and provisions of the constating documents or by-laws
of ▇▇▇▇▇▇▇-▇▇▇▇ or of any indenture or other agreement, written
or oral, to which ▇▇▇▇▇▇▇-▇▇▇▇ may be a party; provided, however,
that it is acknowledged that the option agreements which are
included in the Copan Interests provide that such option
agreements may only be assigned by ▇▇▇▇▇▇▇-▇▇▇▇ with the consent
of the optionor, and ▇▇▇▇▇▇▇-▇▇▇▇ does not represent or warrant
that any such consents have been obtained;
5.5 This agreement has been duly executed and delivered by
▇▇▇▇▇▇▇-▇▇▇▇ and is a valid and binding obligation of ▇▇▇▇▇▇▇-▇▇▇▇
enforceable in accordance with its terms.
6. Survival of Covenants, Representations and Warranties:
6.1 The covenants, representations and warranties of
Greenstone, Greenstone Bermuda and ▇▇▇▇▇▇▇-▇▇▇▇ contained in this
agreement and in the Letter Agreement shall survive the closing
of the purchase and sale of the Purchased Shares herein provided
for a period of one (1) year from the date hereof.
7. Closing Arrangements:
The parties shall complete the transaction of purchase and
sales as follows:
7.1 Upon execution of this Agreement, Greenstone Bermuda shall
deliver to ▇▇▇▇▇▇▇-▇▇▇▇ a duly executed conveyance of beneficial
ownership whereby beneficial ownership of the Purchased Shares is
transferred and conveyed to ▇▇▇▇▇▇▇-▇▇▇▇; Greenstone Bermuda will
thereafter hold record ownership of the Purchased Shares in trust
for ▇▇▇▇▇▇▇-▇▇▇▇ and, subject to ▇▇▇▇▇▇▇-▇▇▇▇ paying all exigible
security transfer taxes in respect of the transfer of the
Purchased Shares to ▇▇▇▇▇▇▇-▇▇▇▇, will do all such things as are
within its reasonable control to cause record ownership of the
Purchased Shares to be registered in the name of ▇▇▇▇▇▇▇-▇▇▇▇ or
its nominee(s) as soon as possible;
7.2 Upon execution of this Agreement, Greenstone Bermuda shall
cause MSR to deliver to ▇▇▇▇▇▇▇-▇▇▇▇ certificates respecting the
470,000 Oronorte Shares registered in the name of MSR, duly
endorsed in blank for transfer with all exigible security
transfer taxes paid and will cause transfers of such shares to be
duly and regularly recorded in the name of ▇▇▇▇▇▇▇-▇▇▇▇ or its
nominee(s);
7.3 Upon execution of this Agreement, Greenstone Bermuda and
Greenstone shall deliver to ▇▇▇▇▇▇▇-▇▇▇▇ written confirmation, in
form and content reasonably satisfactory to ▇▇▇▇▇▇▇-▇▇▇▇, that
any indebtedness of ▇▇▇▇▇▇▇-▇▇▇▇, GOC or Oronorte to Greenstone
Bermuda, Greenstone or any affiliate of Greenstone (other than
the Corporation) has been forgiven; provided that such
forgiveness shall not apply to ▇▇▇▇▇▇▇-▇▇▇▇'▇ guarantee of the
Promissory Note;
7.4 Upon execution of this Agreement, Greenstone Bermuda will
cause a meeting of the board of directors of the Corporation to
be held at which all the directors and officers of the
Corporation will resign in favour of nominees of ▇▇▇▇▇▇▇-▇▇▇▇;
7.5 Upon execution of this Agreement, ▇▇▇▇▇▇▇-▇▇▇▇ will execute
a release in favour of Greenstone Bermuda, pursuant to which
▇▇▇▇▇▇▇-▇▇▇▇ conveys, assigns and transfers to Greenstone Bermuda
all of its interest in the shares of Minerales de Copan included
in the Copan Interests, which shares are currently being held by
Greenstone Bermuda and ▇▇▇▇▇▇▇-▇▇▇▇;
7.6 Upon execution of this Agreement, ▇▇▇▇▇▇▇-▇▇▇▇ will deliver
to Greenstone Bermuda duly executed assignments of the share
purchase options included in the Copan Interests, such
assignments to be in form and content reasonably satisfactory to
Greenstone Bermuda and its solicitors, and shall notify each of
the other parties to such share purchase options (the "Copan
Optionors") of the assignment of the option to Greenstone
Bermuda; it is expressly acknowledged that such assignments shall
be subject to the consent of the Copan Optionors, and that in the
event that one or more Copan Optionors refuse such consent, the
affected share purchase options shall be dealt with in accordance
with section 8.5 hereof;
7.7 Following execution of this Agreement, the parties shall do
such further things and execute such other instruments as may be
necessary or desirable to give effect to the intent of this
agreement and of the Letter Agreement.
8. Acknowledgment, Indemnification and Further Assurances:
8.1 ▇▇▇▇▇▇▇-▇▇▇▇ acknowledges and agrees that the total of
cash, accounts receivable and saleable gold in inventory of GOC
and Oronorte, calculated on a consolidated basis, was not less
than US$450,000 at the Effective Time.
8.2 Greenstone Bermuda and Greenstone hereby covenant and agree
to indemnify and save harmless ▇▇▇▇▇▇▇-▇▇▇▇, Oronorte and the
Corporation of and from any loss whatsoever arising out of, under
or pursuant to any transactions, dealings, or relationships with
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ or their related companies against GOC
or Oronorte in respect of any matter or dispute existing as of
the Effective Time.
8.3 Greenstone Bermuda confirms that, as provided in section
(4) of the Letter of Agreement, it shall pursue legal action
against ▇▇▇▇▇▇ and ▇▇▇▇▇▇ at its expense and, in the event that
it acquires or is entitled to any land or mineral rights in
Colombia as a result of such action, it shall promptly offer to
transfer such land or mineral rights to Oronorte at Greenstone
Bermuda's cost, if any, Oronorte shall have a period of 90 days
from receipt of a written offer from Greenstone Bermuda with
respect to any particular land or mineral interest to accept such
offer, failing which such offer shall lapse and Greenstone
Bermuda shall be under no further obligation to offer such land
or mineral interest to Oronorte. Greenstone Bermuda further
confirms that in the even that as a result of its action against
▇▇▇▇▇▇ and ▇▇▇▇▇▇ it acquires or is entitled to any shares or
Oronorte, it shall promptly offer to transfer such shares to
▇▇▇▇▇▇▇-▇▇▇▇ at Greenstone Bermuda's cost, if any. ▇▇▇▇▇▇▇-▇▇▇▇
shall have a period of 90 days from receipt of a written offer
from Greenstone Bermuda with respect to any shares of Oronorte
acquired from ▇▇▇▇▇▇ or ▇▇▇▇▇▇ to accept such offer, failing
which such offer shall lapse and Greenstone Bermuda shall be
under no further obligation to offer such shares to ▇▇▇▇▇▇▇-▇▇▇▇.
8.4 Greenstone and Greenstone Bermuda acknowledge that, as
provided in section (10) of the Letter Agreement, the total
liabilities of GOC and its subsidiaries as of the Effective Time,
excluding the Lease Obligations (as defined in the Letter
Agreement), shall not exceed US$1,000,000. Greenstone and
Greenstone Bermuda acknowledge and agree that the liability, if
any, of Oronorte to Dual Resources Ltd. of Colombia Sociedad
Ordinaria de ▇▇▇▇▇ ▇▇▇▇▇▇ ("Carmensom") pursuant to section 16 of
a purchase agreement dated July 15, 1994 between Oronorte and
Carmensom, shall be included in the total liabilities of GOC as
of the Effective Time for purposes of section (10) of the Letter
Agreement. Greenstone and Greenstone Bermuda further covenant
and agree that, to the extent that the total liabilities of GOC
and its subsidiaries as of the Effective Time (excluding any
liabilities to Greenstone or Greenstone Bermuda which are
forgiven pursuant to section 7.3 hereof) exceed US$1,000,000,
Greenstone and/or Greenstone Bermuda shall pay to Oronorte an
amount equal to such excess.
8.5 In the event that any Copan Optionors refuse to consent to
the assignment of one or more share purchase options (the "Non-Assigned
Options") to Greenstone Bermuda, ▇▇▇▇▇▇▇-▇▇▇▇ agrees that it shall hold such
Non-Assigned Options in trust for Greenstone Bermuda, and that subject to
receipt by ▇▇▇▇▇▇▇-▇▇▇▇ of written instructions concerning the exercise of
the Non-Assigned Options and of funds sufficient to exercise such
Non-Assigned Options, ▇▇▇▇▇▇▇-▇▇▇▇ shall use its reasonable best
efforts to exercise the Non-Assigned Options and to cause the
shares of Minerales de Copan acquired pursuant to such exercise(s) to be
transferred to Greenstone Bermuda for no additional consideration.
8.6 Greenstone and Greenstone Bermuda hereby covenant and agree
to do such things and execute such documents or instruments as
may be desirable or necessary to transfer to the Corporation all
rights held by either of them to repatriation of foreign
investments made by either of them into Oronorte or GOC, and to
obtain registration of such rights of repatriation with the
appropriate Colombian authorities in the name of the Corporation;
provided, however, that it is expressly agreed that any legal
fees or government filing fees incurred to transfer to the
Corporation such rights of repatriation shall not be the
responsibility of Greenstone or Greenstone Bermuda.
9. General:
9.1 Each party (in this section the "Covenanting Party")
covenants and agrees with the other party (the "Other Party") to
indemnify and save harmless the Other Party from and against any
claims whatsoever for any commission or other remuneration
payable or alleged to be payable by any broker, agent or other
intermediary who has acted for the Covenanting Party in
connection with the transactions contemplated hereby or by the
Letter Agreement.
9.2 No announcement with respect to this agreement shall be
made by either party without the prior approval of the other
party. Provided, however, that (1) such approval shall not be
unreasonably withheld and (2) such approval shall not be required
if prior approval would prevent the timely and accurate
dissemination of such announcement as required to comply with any
applicable law, rule or policy.
9.3 Time shall be of the essence of this agreement.
9.4 This agreement may be executed in one or more counterparts,
each of which so executed shall constitute an original and all of
which together shall constitute one and the same agreement.
9.5 This Agreement, including the Schedules hereto, read
together with the Letter Agreement, constitutes the entire
agreement between the parties hereto. There are not and shall
not be any verbal statements, representations, warranties,
undertakings or agreements between the parties and this agreement
may not be amended or modified in any respect except by written
instrument signed by the parties hereto.
9.6 This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed
by, the laws of the Province of Ontario, Canada. Each of the
parties hereto hereby irrevocably attorns to the jurisdiction of
the courts of the Province of Ontario.
9.7 This Agreement shall enure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal
personal representatives, successors and assigns.
IN WITNESS WHEREOF this agreement has been executed by the
parties hereto.
▇▇▇▇▇▇▇-▇▇▇▇ GOLD COMPANY, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
President
GREENSTONE RESOURCES CANADA LTD.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
President
