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HECLA MINING COMPANY
-AND-
GREAT LAKES IDAHO INC.
-AND-
GREAT LAKES MINERALS INC.
________________________________________________________________________________
ACQUISITION AGREEMENT - GROUSE CREEK PROJECT
JANUARY 21, 1994
________________________________________________________________________________
HOLDEN DAY WILSON
SUITE 2400
TORONTO DOMINION BANK TOWER
TORONTO-DOMINION CENTRE
TORONTO, ONTARIO
M5K 1E7
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TABLE OF CONTENTS
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - INTERPRETATION AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Agreement References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Sections and Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Gender, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 2 - PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Determination of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 3 - CLOSING DATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Joint Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Incorporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Due Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Validity of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Enforceability of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Representations of the Vendor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Mining Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Underlying Mineral Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
No Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Absence of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Absence of Unusual Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
No Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Mining Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Workers' Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Representations of Great Lakes and Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 5 - COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Joint Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Preparing for Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Vendor's Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
No Other Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Purchaser's and Great Lakes Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Public Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 6 - CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Purchaser's Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
No Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
No Adverse Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Purchase of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Joint Venture Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Vendor's Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
No Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
No Adverse Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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No Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Joint Venture Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Lluvia de Oro Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Notice of Unfulfilled Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE 7 - CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Transfer Documents and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Joint Venture Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Certificate of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Certificate of Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Additional Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 8 - INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 9 - OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Option to Increase Percentage Under Joint Venture Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 10 - COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 11 - GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
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ACQUISITION AGREEMENT
THIS AGREEMENT made this 21st day of January, 1994.
B E T W E E N:
HECLA MINING COMPANY, a corporation incorporated
under the laws of Delaware,
(the "Vendor"),
-and-
GREAT LAKES IDAHO INC., a corporation incorporated
under the laws of Idaho,
(the "Purchaser"),
-and-
GREAT LAKES MINERALS INC., a corporation incorporated
under the laws of Ontario,
("Great Lakes").
RECITALS
A. The Vendor currently owns the Purchased Assets (which term
and all other terms used herein with initial capital letters, unless defined
where first used, are defined in Article 1 of this Agreement);
B. The Vendor wishes to sell to the Purchaser and the Purchaser
wishes to purchase from the Vendor the Purchased Assets;
C. The Purchaser is a wholly-owned subsidiary of Great Lakes.
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration
of the mutual covenants and agreements contained herein and of other good
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and valuable consideration (the receipt and sufficiency of which is hereby
mutually acknowledged) the Parties hereto agree as follows:
ARTICLE 1
INTERPRETATION AND DEFINITIONS
1.1 Definitions. In this Agreement and the schedules attached
hereto, unless there is something in the subject matter or context inconsistent
therewith, the following words, phrases and expressions shall have the
following meanings:
(a) "Business Day" means any day except a Saturday, a
Sunday, a legal holiday for Canadian chartered
banks in Ontario, Canada or a legal holiday for
banks in Idaho or New York, U.S.A.;
(b) "CERCLA" means the Comprehensive Environmental
Response Compensation and Liability Act, 42 U.S.C.
Section 9601 et. seq., and its implementing
regulations and amendments;
(c) "Closing" means the completion of the transactions
contemplated hereby as provided in Article 3;
(d) "Controlled Group" means all members of a control
group of corporations and all trades or businesses
(whether or not incorporated) under common control
which, together with the Vendor, are treated as a
single employer under Section 414 of the Internal
Revenue Code;
(e) "Closing Date" means the date and time determined
in accordance with Article 3 which Closing Date
shall be the effective date of the Closing unless
otherwise agreed in writing by the Parties;
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(f) "Commercial Production" means the point in time
that begins after the throughput of the
concentrator to be built as part of the Grouse
Creek Project is sustained at 60% of rated capacity
for a 30-day period or such other period agreed to
by the Parties;
(g) "Contaminants" means any substance, waste, solid,
liquid or gaseous matter, fuel, micro-organism,
sound, vibration, ray, heat, odour, radiation,
energy vector, plasma, organic or inorganic matter,
whether animate or inanimate, container, transient
reaction, or any combination of the above, which is
or is deemed to be in concentrations or at exposure
levels constituting a hazardous material or
substance or toxic substance including, without
limitation, polychlorinated biphenyl, isomer of
dioxin, asbestos, urea formaldehyde, transformers,
a pollutant or a contaminant or a source of
pollution or contamination, a hazardous waste or
hazardous chemical, under any laws, regulations,
ordinances, guidelines, directives or policies or
other requirement, whether local, state or federal
including, without limitation, any material or
substance which is in concentrations or at exposure
levels designated as a "hazardous substance"
pursuant to section 311 of the Clean Water Act,
defined as "hazardous waste" pursuant to section
1004 of the Resource Conservation and Recovery Act,
defined as a "hazardous substance", "pollutant" or
"contaminant" pursuant to CERCLA, defined as
"chemical substances" or "mixtures" pursuant to the
Toxic Substances Control Act of 1976, or defined as
"pesticides" pursuant to the Federal Insecticide,
Fungicide and Rodenticide Act of 1975; any other
substance which is in concentrations or at exposure
levels subject to any past or present environmental
law, regulation, ordinance, guideline, directive,
policy or other requirement including, without
limitation, the Clean Air Act; natural synthetic
gas usable for fuel, any oil, flammable substance,
explosives, radioactive materials, petroleum,
including crude oil and any fraction thereof;
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(h) "Deposit" means the $100,000 paid by the Purchaser
to the Vendor upon acceptance by the Vendor of the
offer to purchase the Purchased Assets by the
Purchaser pursuant to the terms of a letter of
agreement between the Vendor and Great Lakes dated
October 14, 1993;
(i) "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time,
or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a
reference to any successor provision or provisions
thereof;
(j) "Encumbrance" means any mortgage, lien, charge,
pledge, security interest and encumbrance of any
kind and nature whatsoever;
(k) "Escrowed Amount" means the amount equal to the
Purchased Percentage multiplied by the estimated
amount to be incurred, excluding capitalized
interest, on the exploration, development and
construction of the Grouse Creek Project from the
Closing Date to Commercial Production;
(l) "Estimated Development Costs" means the estimated
amount of the Pre-Closing Development Costs
calculated on the Closing Date;
(m) "Estimated Purchase Price" means the estimated
amount of the Purchase Price calculated on the
Closing Date;
(n) "Financial Statements" means the audited financial
statements of the Vendor for the three year period
ending December 31, 1992 and the unaudited
financial statements of the Vendor for the
nine-month period ending September 30, 1993;
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(o) "Financing" means the raising by the Purchaser
through the primary distribution under the Public
Offering, on terms and conditions satisfactory to
the Purchaser, of an amount no less than the
Purchase Price plus the Purchaser's Joint Venture
Share;
(p) "Financing Deposit" means the $250,000 which the
Purchaser must pay to the Vendor pursuant to
Section 5.3(b) if the Purchaser wishes to extend
the date by which it is required to obtain
$25,000,000 in financing;
(q) "Grouse Creek Assets" means:
(i) the Underlying Mineral Properties;
(ii) all related assets, including, without
limitation:
(A) all Permits, including, without
limitation, those specified in
Schedule "A";
(B) all chattels, tools, equipment
and machinery, fixtures,
computers, computer software,
furniture, vehicles located at
or relating to the Grouse Creek
Project;
(C) all technology, proprietary and
intangible rights and
intellectual property relating
to the Grouse Creek Project;
(D) all property or mineral right
leases relating to the Grouse
Creek Assets, including,
without limitation, the leases
listed in Schedule "B" hereto;
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(E) all contracts, agreements and
commitments and other binding
agreements relating to the
Grouse Creek Assets;
(r) "Grouse Creek Project" means the gold and silver
property known as the Grouse Creek Project,
covering approximately 24 square miles and located
approximately 27 miles west of the Town of Challis
in the Yankee Fork mining district in south-central
Idaho;
(s) "Interim Period" means the period between execution
of this Agreement and the Closing Date;
(t) "Joint Venture Agreement" means the joint venture
agreement to be entered into between the Purchaser
and the Vendor governing their relationship in
respect of the Grouse Creek Project, which
agreement shall be substantially in the form
attached hereto as Schedule "C";
(u) "Maximum Purchase Price" means $9,570,500;
(v) "Multiemployer Plan" shall have the meaning set
forth in Section 4001(a)(3) of ERISA;
(w) "Option Amount" means the amount equal to: (i) the
amount incurred, excluding capitalized interest, on
the exploration, development and construction of
the Grouse Creek Project from July 1, 1993 up to
Commercial Production; plus (ii) the amount of
capital expenditures of the Grouse Creek Project
from the date of Commercial Production to the date
the Purchaser's election to increase its interest
pursuant to Article 9 is effective; plus (iii) the
amount of working capital on the books of the
Grouse Creek Project joint venture at the date the
Purchaser's election to increase its interest
pursuant to Article 9 is effective. For the sake
of clarity, it
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is intended that no cost be counted more than once
in the calculation of the Option Amount;
(x) "PBGC" means the Pension Benefit Guaranty
Corporation or any entity succeeding to any or all
of its functions under ERISA;
(y) "Party" means a party to this Agreement and
"Parties" means the parties to this Agreement;
(z) "Permits" means all permits, directions,
instructions, consents, licences, registrations,
orders, certificates, or approvals required by all
applicable governmental and regulatory authorities
whether foreign, federal, state, local or regional,
in respect of the Purchased Assets, including,
without limitation, those required pursuant to
relevant environmental laws, those relating to the
mining lands and leases, those relating to
construction and those relating to the operation
and eventual abandonment of the Grouse Creek
Assets;
(aa) "Permitted Encumbrances" means the encumbrances
listed in Schedule "D" hereto;
(ab) "Pre-Closing Development Costs" means the amount
equal to the Purchased Percentage multiplied by the
amount incurred by the Vendor, excluding
capitalized interest on the exploration,
development and construction of the Grouse Creek
Project from July 1, 1993, up to and including the
Closing Date;
(ac) "Plan" means at any time an employee pension
benefit plan which is covered by Title IV of ERISA
or subject to the minimum funding standards under
Section 412 of the code enacted thereunder and is
either (i) maintained by a member of the Controlled
Group for employees of any member of the Controlled
Group or (ii)
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maintained pursuant to a collective bargaining
agreement or any other arrangement under which
more than one employer makes contributions and to
which a member of the Controlled Group is then
making or accruing an obligation to make
contributions or has within the preceding five
plan years made contributions;
(ad) "Public Offering" means the public offering of
common shares in the capital of Great Lakes during
the Interim Period;
(ae) "Purchase Price" means the amount equal to (i) the
Purchased Percentage multiplied by the Sunk Costs
plus (ii) a premium payment of $1,250,000, provided
however that the Purchase Price shall in no event
be greater than the Maximum Purchase Price;
(af) "Purchased Assets" means the Purchased Percentage
of the Grouse Creek Assets;
(ag) "Purchased Percentage" means that undivided
interest in the Grouse Creek Assets the Purchaser
elects to purchase in accordance with Section 2.1,
which shall be a minimum of 20% and a maximum of
30%;
(ah) "Regulatory Approvals" means the approvals,
consents and authorizations identified in Schedule
"E" and such other approvals, consents and
authorizations as are required for the completion
of the transactions contemplated hereby;
(ai) "Sunk Costs" means the amount incurred by the
Vendor, excluding capitalized interest, on the
acquisition, exploration and development of the
Grouse Creek Project up to and including June 30,
1993, which is estimated to be $27,735,000;
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(aj) "Underlying Mineral Properties" means all patented
and unpatented mining claims, concessions, mining
and surface leases, mineral rights and similar
rights and interests relating to the Grouse Creek
Project, as more particularly set out in Schedules
"B" and "F" hereto;
(ak) "Warrants" means the non-transferable common share
warrants issued to the Vendor permitting the Vendor
to purchase up to 500,000 common shares in the
capital of Great Lakes at an exercise price per
share equal to 125% of the offering price per share
pursuant to the Public Offering which warrants
shall be exercisable by the Vendor at any time on
or before the earlier of the day which is (i) 12
months after Commercial Production of the Grouse
Creek Project; and (ii) five years following the
date of issuance of such warrants. The form of
Warrant shall be substantially in the form attached
hereto as Schedule "K".
1.2 Agreement References. Unless the context otherwise requires,
the term "this Agreement", "hereof", "herein", "hereunder" and similar
expressions refer to this Agreement and the schedules hereto as a whole and not
to any particular article, section or other portion hereof, and include any
agreement, schedule or instrument supplementing or amending this Agreement.
References herein to an article or section shall mean a reference to an entire
article or section within the body of this Agreement. Reference herein to a
subsection without identifying the section of which the subsection referred to
is a part shall mean a reference to such subsection in the same section as is
the subsection in which such reference is made.
1.3 Sections and Headings. The index to this Agreement and
headings of articles, sections and subsections herein and in the schedules are
inserted for convenience of reference only and shall not affect or be
considered to affect the construction of the provisions hereof.
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1.4 Person. The word "person" includes an individual, sole
proprietorship, partnership, joint venture, unincorporated association, trust,
body corporate, governmental department or agency and a natural person in his
capacity as trustee, executor, administrator or other legal representative.
1.5 Currency. Unless otherwise indicated, all dollar amounts
referred to in this Agreement are in United States funds.
1.6 Gender, Etc. Unless the context otherwise requires, words
importing the singular shall include the plural and vice versa and words
importing gender shall include the masculine, feminine and neuter genders.
1.7 Entire Agreement. This Agreement, including all Schedules,
together with the agreements and other documents to be delivered pursuant
hereto, and the Confidentiality Agreement between Great Lakes and the Vendor
dated August 16, 1992, constitutes the entire agreement between the Parties
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
Parties with respect to the sale of the Purchased Assets by the Vendor to the
Purchaser, including that certain letter agreement dated October 14, 1993,
executed by John D. McBride on behalf of Great Lakes and Arthur Brown on behalf
of the Vendor, and there are no warranties, representations, conditions or
other agreements between the Parties in connection with the subject matter
hereof except as specifically set forth herein and therein.
1.8 Governing Law. This Agreement shall be governed by and
interpreted and enforced in accordance with the laws from time to time in force
in Idaho and the federal laws of the United Sates of America applicable therein
and shall be treated in all respects as an Idaho contract.
1.9 Schedules. Attached to and forming part of this Agreement
are the following Schedules:
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Schedule "A" - Permits
Schedule "B" - Leases
Schedule "C" - Joint Venture Agreement
Schedule "D" - Permitted Encumbrances
Schedule "E" - Regulatory Approvals
Schedule "F" - Underlying Mineral Properties
Schedule "G" - Litigation
Schedule "H" - Salaried Employees
Schedule "I" - Lluvia de Oro Agreement
Schedule "J" - Preliminary Prospectus
Schedule "K" - Warrant
Reference herein to a schedule shall mean a reference to a
schedule to this Agreement. References in any schedule to "the Agreement"
shall mean a reference to this Agreement. References in any schedule to
another schedule shall mean a reference to a schedule to this Agreement.
ARTICLE 2
PURCHASE AND SALE
2.1 Determination of Interest. The Purchaser shall purchase a
20% undivided interest in the Grouse Creek Assets. Prior to Closing, the
Purchaser shall be entitled to elect to purchase up to an additional 10%
undivided interest for a total maximum 30% undivided interest in the Grouse
Creek Assets by notifying the Vendor in writing of its desire to purchase more
than a 20% undivided interest. The percentage from 20% to and including 30%
that the Purchaser decides to purchase shall be the Purchased Percentage.
After Closing, in the event that the Purchased Percentage is less than 30%, the
Purchaser
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shall have the right to increase its undivided interest pursuant to the terms
of Article 9 hereto.
2.2 Transfer. At Closing, on and subject to the terms and
conditions set out in this Agreement, the Vendor shall convey, transfer, assign
and sell and the Purchaser shall acquire, accept and purchase all the right,
title and interest of the Vendor in and to the Purchased Assets and the Vendor
shall deliver documentation necessary to register, file or record the
Purchaser's interest in the Purchased Assets, as provided in Section 7.2
hereto.
2.3 Payment. At Closing, on and subject to the terms and
conditions set out in this Agreement, in consideration of the sale to the
Purchaser of the Purchased Assets, the Purchaser shall:
(a) pay the Estimated Purchase Price, less the Deposit
and less the Financing Deposit, if any, to the
Vendor;
(b) issue the Warrants to the Vendor;
(c) pay the Estimated Development Costs to the Vendor.
2.4 Adjustment. Notwithstanding that on the Closing Date, the
Purchaser shall pay to the Vendor the Estimated Purchase Price less the Deposit
and the Financing Deposit, if any, and the Estimated Development Costs, within
30 days of the Closing Date, or such other reasonable time mutually agreed to
by the Parties, the Parties shall determine the Purchase Price and the
Pre-Closing Development Costs.
In the event that either the Estimated Purchase Price or
Estimated Development Costs are more than the Purchase Price or Pre-Closing
Development Costs, the Vendor shall forthwith pay to the Purchaser the
difference, if any, between the Estimated Purchase Price and the Purchase Price
and the difference, if any, between the Estimated Development Costs and the
Pre- Closing Development Costs.
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In the event that either the Estimated Purchase Price or the
Estimated Development Costs are less than the Purchase Price or Pre-Closing
Development Costs, the Purchaser shall forthwith pay to the Vendor the
difference, if any, between the Estimated Purchase Price and the Purchase Price
and the difference, if any, between the Estimated Development Costs and the
Development Costs provided, however, that the Purchase Price shall in no event
be greater than the Maximum Purchase Price.
2.5 Arbitration. If there is a dispute between the Vendor and
the Purchaser as to the appropriate adjustment to be made pursuant to Section
2.4 hereof, then the matter shall be submitted to arbitration by a single
arbitrator, if the Parties agree upon one arbitrator, or otherwise by three
arbitrators, of whom one shall be appointed by each of the Vendor and the
Purchaser and the third shall be chosen by the first two named before the
arbitration. Unless the Vendor and the Purchaser agree otherwise, the
arbitrator or arbitrators, as the case may be, shall each be an independent
Chartered Accountant from a firm of at least 100 Chartered Accountants. The
arbitration and the appointment of the arbitrator shall, unless expressly
provided for herein, be conducted in accordance with the Arbitrations Act
(Ontario). The determination of such arbitrator, arbitrators or any two of
such three arbitrators, which shall be made within 30 days of the date upon
which the dispute was referred to him or them, shall be binding upon the Vendor
and the Purchaser and their respective successors and permitted assigns. The
Vendor and the Purchaser shall co-operate in completing any arbitration as
expeditiously as possible and the arbitrator or arbitrators may engage such
experts to assist him or them as may appear to him or them appropriate. Each
of the Vendor and Purchaser shall bear its costs and expenses incurred in
connection with the arbitration and other costs and expenses incurred in
connection with the arbitration shall be borne equally by the Vendor and
Purchaser.
2.6 Deposits. In the event that the Purchaser fails to proceed
with the purchase of the Grouse Creek Assets contemplated hereby other than as
a result of a material misrepresentation of the condition of the Grouse Creek
Project by the Vendor, the Vendor shall be entitled to retain the Deposit and
the Financing Deposit, if any, as an estimate of liquidated damages to the
Vendor which the Purchaser stipulates is not a penalty. In the
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event the Purchaser proceeds with the Closing, the Deposit and Financing
Deposit, if any, shall be applied against the Purchaser's payment obligations
specified above.
2.7 Taxes. The Purchaser shall be liable for and shall pay all
land transfer taxes and sales and related taxes, duties or like charges
properly payable whether under United States or Canadian federal, state,
provincial, municipal or local laws upon or in connection with the sale,
transfer or conveyance of the Purchased Assets excluding, for greater
certainty, income taxes payable by the Vendor as a result of the foregoing.
The Vendor shall do all things as are reasonably requested by the Purchaser to
enable the Purchaser to comply with its obligations hereunder in a timely and
efficient manner.
ARTICLE 3
CLOSING DATE
3.1 The Closing Date shall occur as soon as possible after the
Financing has been arranged, but in no event later than March 11, 1994, unless
otherwise agreed to in writing by the Parties.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1 Joint Representation. Each Party, acknowledging that the
other Parties are relying thereon in entering into this Agreement and will rely
thereon in concluding the transactions contemplated hereby, represents and
warrants to the other Parties in respect of itself as follows:
(a) Incorporation - it is a corporation duly
incorporated and organized, subsisting and
up-to-date in all of the filings and registrations
required under the laws of the jurisdiction of its
incorporation and under the laws of the
jurisdiction in which the Purchased Assets are
situated and, in the case of the Vendor, Great
Lakes and the
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Purchaser, is in good standing under the laws of the
jurisdiction of its incorporation;
(b) Qualification - it has the requisite corporate
power and capacity to enter into this Agreement and
to perform its obligations hereunder;
(c) Due Authorization - all requisite corporate acts
and proceedings have been done and taken by it with
respect to authorizing the execution and delivery
of this Agreement and the performance of its
obligations hereunder;
(d) Validity of Agreement - the execution and delivery
of this Agreement and the performance of its
obligations hereunder do not conflict with or cause
a default under any indenture, mortgage, deed of
trust, loan agreement or any other agreement or
instrument to which it is a party or by which it or
any of its property or assets is bound and do not
conflict with nor result in any violation of the
provisions of its articles, by-laws or other
constating documents or any resolutions of its
shareholders or directors or any laws of any
province or territory of Canada or the laws of
Canada applicable therein, any state of the United
States of America or the federal laws applicable
therein, or the laws of its jurisdiction of
incorporation or any order, rule or regulation of
any court or governmental agency or body having
jurisdiction over it or any of its property or
assets; and
(e) Enforceability of Agreement - this Agreement and
each other agreement or instrument executed by it
and delivered on the Closing Date constitutes and
will constitute a legal, valid and binding
obligation of such Party enforceable in accordance
with their respective terms, subject with respect
to enforcement to all bankruptcy, insolvency and
other laws affecting creditors' rights generally
and to general principles of equity.
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4.2 Representations of the Vendor. The Vendor, acknowledging
that the Purchaser is relying thereon in entering into this Agreement and will
rely thereon in concluding the transactions contemplated hereby, represents and
warrants to the Purchaser that:
(a) Title to Assets - The Vendor or its wholly-owned
subsidiaries are the registered and beneficial
owners of, and have the exclusive right to dispose
of good and marketable title to all of the
Purchased Assets free and clear of all Encumbrances
subject to Permitted Encumbrances, such title to be
registered, filed or recorded, where appropriate to
evidence the Purchaser's interest in the Purchased
Assets, and the Purchased Assets are not subject to
any contractual rights of persons other than the
Vendor, including, without limitation, any
contracts or options to grant or convey any
interest in the Underlying Mineral Properties or to
pay any royalties with respect thereto and the
Vendor has not done or omitted to do anything which
has resulted or could result in an Encumbrance on,
or which could permit any third party to claim an
interest in, the Purchased Assets except as
otherwise disclosed in this Agreement;
(b) Mining Rights - With respect to the Underlying
Mineral Properties, all mining and mineral rights
of whatsoever nature and kind, including all mining
claims, both patented and unpatented, licences,
leases, concessions, licenses of occupation,
easements, privileges and other rights relating
thereto have been property staked, tagged and
recorded, as applicable, and are in good standing
under all applicable legislation relating thereto.
All rents and payments due to the date hereof on
each such mineral right have been paid; the Vendor
has been in peaceable possession since it acquired
such rights and is not in default thereunder and no
waiver, indulgence or postponement of the rights of
the Vendor thereunder has been granted; and there
exists no event of default or event, occurrence,
condition or act
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which, with the giving of notice, the lapse of time or both,
or the happening of any further event or condition, would
become a default under such right. The Vendor is not in
breach of any reclamation obligation currently outstanding
and unsatisfied in respect of such rights;
(c) Underlying Mineral Properties
(i) There are no matters affecting the right,
title and interest of the Vendor in the
Underlying Mineral Properties which, in
the aggregate, would materially impair
the ability to carry on business at the
Grouse Creek Project substantially in the
manner in which the business is currently
being carried on or contemplated at the
Grouse Creek Project except as is
disclosed in this Agreement;
(ii) The Vendor has not received any notice
of:
(A) any non-compliance of the
Underlying Mineral Properties
or the improvements or fixtures
located thereon, or the
operation or maintenance
thereof, with municipal,
building or zoning by-laws or
regulations; or
(B) any work orders relating to, or
notices from any government
authorities advising of any
defects in, the construction or
state of repair of any
improvements or fixtures on
such property;
which notices have not been complied with
and which, in the aggregate, would
materially impair the ability to carry on
the business upon the property
substantially in the manner in
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which the business is currently being
carried on or contemplated at the Grouse
Creek Project;
(iii) The unpatented mining claims were
properly laid out and monumented; all
required location and validation work was
properly performed; location notices and
certificates were properly recorded and
filed with appropriate governmental
agencies; all assessment work or mining
claim rental fees in lieu thereof
required to hold the unpatented mining
claims has been performed in a manner
consistent with good, engineering,
metallurgical and mining practices; all
affidavits of assessment work and other
filings required to maintain the claims
in good standing have been properly and
timely recorded or filed with appropriate
governmental agencies; the claims are
free and clear of any and all defects,
liens and encumbrances; all fees have
been paid to maintain the claims;
(d) No Liabilities - There are no liabilities of the
Vendor, the existence of which would have a
material adverse effect on the Purchased Assets,
for which the Purchaser may be liable on or after
the completion of the transactions contemplated by
this Agreement other than liabilities disclosed in
this Agreement;
(e) Financial Statements - The Financial Statements
were prepared in accordance with United States
generally accepted accounting principles throughout
the period indicated and present fairly the
financial conditions of the Vendor and the
Purchased Assets for the financial periods covered
thereby and, except to the extent reflected or
reserved against or noted in the Financial
Statements, the Vendor does not have any material
liabilities or obligations of any nature, whether
accrued, absolute, contingent or otherwise which,
in the
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aggregate, would have a material adverse effect on
the Vendor and its subsidiaries;
(f) Books and Records - All accounts, books, ledgers
and official and other records of whatsoever kind,
including, without limitation, employment records,
material to the Grouse Creek Assets have been
fully, properly and accurately kept and completed
and there are no material inaccuracies or
discrepancies of any kind contained or reflected
therein. All financial transactions of the Vendor
relating to the Grouse Creek Assets have been
properly recorded in such books and records;
(g) Absence of Changes - Since the date of the most
recent Financial Statements, except as disclosed to
Great Lakes, there has not been any change in the
condition or operations of the business, assets,
management or financial condition of the Grouse
Creek Project other than changes in the ordinary
and normal course of business none of which has
been materially adverse to the Grouse Creek
Project;
(h) Absence of Unusual Transactions - Since the date of
the most recent Financial Statements, other than as
disclosed in this Agreement, the Vendor has not:
(i) transferred, assigned, sold or otherwise
disposed of any significant assets
comprising a part of the Grouse Creek
Assets;
(ii) incurred, assumed or paid any obligation
or liability (fixed or contingent) other
than obligations or liabilities incurred
in the ordinary and normal course of
business;
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(iii) mortgaged, pledged, subjected to lien,
granted a security interest in or
otherwise encumbered any of its assets or
property;
(iv) suffered any damage, destruction or loss,
or waived any rights, or entered into any
commitment or transaction where such
loss, rights, commitment or transaction
is or would be material in relation to
the Grouse Creek Project except
commitments or transactions in the
ordinary course of business;
(v) authorized or agreed or otherwise become
committed to any of the foregoing;
(i) Condition of Assets - All tangible assets used in
or in connection with the Grouse Creek Project are
in good condition, repair and proper working order,
subject to normal wear and tear, and are fit and
appropriate for use for the purpose for which they
were intended;
(j) Capital Expenditures - Since the date of the most
recent Financial Statements the Vendor has not made
any capital expenditures in respect of the Grouse
Creek Project except in the ordinary course of
business or as disclosed to Great Lakes;
(k) Intellectual Property Rights - Any and all patents,
trade marks, copyrights and other industrial and
intellectual property rights used in whole or in
part in connection with the Grouse Creek Project
are owned by or validly licensed to the Vendor and
are in good standing. To the best of the Vendor's
knowledge, the conduct of the Grouse Creek Project
does not infringe upon the patents, trade marks,
trade names, service marks or copyrights, domestic
or foreign, of any other person;
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(l) Litigation - Except as described in Schedule "G",
there is no judgment, decree or other outstanding
order and no action, suit, litigation, arbitration,
proceeding, administrative or governmental or
quasi- governmental proceeding or enquiry, claim,
complaint or grievance in progress pending or, to
the best of the Vendor's knowledge, threatened
against or relating to, in whole or in part, the
Purchased Assets which could have a material
adverse effect on the Purchased Assets, including,
without limitation, in respect of the environment;
(m) Taxes - All federal, state, local and foreign tax
returns and all withholding and unemployment tax
returns and reports of every nature required to be
filed by the Vendor with respect to the Grouse
Creek Project, including but not limited to payroll
deductions, have been filed or will be filed in due
course and such returns have been materially
complete and accurate. There are no agreements,
waivers, ruling requests or other arrangements
providing for an extension of time with respect to
the assessment of any tax or deficiency against the
Grouse Creek Project, nor are there any actions,
suits, proceedings, investigations or claims now
pending against the Grouse Creek Project in respect
of any tax or assessment or any matters under
discussion with any authority relating to any taxes
or assessments asserted by any such authority.
Adequate provision has been made for taxes payable
for the current period for which tax returns are
not yet required to be filed and all instalments
for taxes in the current period have been paid in
accordance with applicable legislation;
(n) No Options - No person other than under this
Agreement has any agreement or option or any right
capable of becoming an agreement or option for the
purchase from the Vendor of any of the Purchased
Assets;
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(o) Environmental Matters
(i) the Grouse Creek Project is and has at
all times been in compliance with the
terms and conditions of all Permits, and
in compliance with all applicable laws,
regulations, orders, ordinances,
judgments, decrees, schedules,
obligations, timetables and other
requirements except where the failure to
be in such compliance would not have a
material adverse effect on the Purchaser
or its interest in the Grouse Creek
Project and there are no expropriation,
condemnation or similar proceedings,
actual or threatened, of which the Vendor
has received notice against any part or
parts of the Purchased Assets;
(ii) all Permits are in full force and effect
and there are no judicial or
administrative proceedings pending or
threatened to revoke or change such
Permits;
(iii) except for matters which the Vendor has
abated or has contested in good faith, no
notice, citation, summons, or order has
been issued, no complaint has been filed,
no penalty has been assessed and no
investigation or review is pending or
threatened by any authority with respect
to:
(A) any alleged violation of any
applicable environmental law or
regulation in respect of the
Purchased Assets; or
(B) any alleged failure to have any
Permit required in connection
with the Purchased Assets; or
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(C) any alleged violation to comply
with any Permits, any
generation, treatment, storage,
recycling, transportation or
disposal of any Contaminant in
connection with the Purchased
Assets;
(iv) the Vendor has not received any request
for information, notice or claim, demand
or other notification that it is or may
be potentially responsible with respect
to any investigation or clean-up of any
threatened or actual release of any
Contaminant in connection with the
Purchased Assets;
(v) no Contaminant has been released,
spilled, leaked, discharged, disposed of,
pumped, poured, emitted, emptied,
injected, leached, dumped or allowed to
escape ("Release") at, on or under the
Grouse Creek Project contrary to any
applicable environmental law and no oral
or written notification of the Release of
a Contaminant has been filed by or on
behalf of the Vendor in connection with
the Purchased Assets which would subject
the Purchaser to corrective or response
action or any other liability under any
applicable laws, including, but not
limited to, environmental laws;
(vi) there are no environmental charges,
privileges or encumbrances
("Environmental Liens") relating to the
Purchased Assets and no actions have been
taken or are in process or pending which
could subject the Purchased Assets to
such Environmental Liens;
(vii) the Vendor knows of no facts or
circumstances related to environmental
matters relating to the Purchased Assets
that could lead to any further
environmental claims, liabilities or
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responsibilities except as disclosed to
Great Lakes and except for the
reclamation obligations set forth in the
Permits;
(viii) the Vendor has kept records and made all
filings required to be kept or made by it
by all applicable environmental laws in
respect of the Purchased Assets;
(ix) except for reclamation obligations set
forth in the Permits, the Vendor is not
aware of any such release, emission,
discharge, deposit, issuance, spraying,
injection, inoculation, abandonment,
burial, spilling, incineration, disposal,
leaking, seeping, pouring, emptying,
throwing, dumping, placing or exhausting
of any Contaminant which may subject the
Vendor or the Purchaser to corrective or
response action or any other liability
under any applicable laws, including, but
not limited to, environmental laws;
(x) to the best of the Vendor's knowledge,
information and belief, the Vendor has
complied with all regulations, orders,
directives and notices received by it
from and all requests for information
made by the relevant environmental
protection authorities;
(xi) the Vendor has not received any notice of
or is otherwise aware that any site is
listed, or proposed for listing, on a
registry of inventory of inactive
hazardous waste sites maintained by any
relevant jurisdiction or on the National
Priority List or on the Comprehensive
Environmental Response, Compensation,
Liability Information System List
promulgated pursuant to CERCLA, or any
comparable list maintained by any
government authority;
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(p) Mining Practices - The exploration work, processes,
undertaking and other operations carried on or
conducted by or on behalf of the Vendor in respect
of the Grouse Creek Project have been carried on or
conducted in a sound and workmanlike manner and in
compliance with sound geological and geophysical
exploration and mining, engineering and
metallurgical practices; and all such work,
process, undertaking and other operations are in
compliance with all federal, state and other laws,
by-laws, ordinances, permits, rules, regulations
and orders or decisions rendered by any
governmental or quasi-governmental ministry,
department or administrative or regulatory agency
including, without limitation, applicable laws
relating to environmental protection except where
the failure to comply would not have a material
adverse effect on the Grouse Creek Project;
(q) Insurance - The Vendor has maintained, and is in
good standing in respect of all customary classes
of insurance covering the Grouse Creek Assets,
which insurance is in the amount at least equal to
the replacement value of the Grouse Creek Assets;
(r) Fees - No fees to brokers, promoters or finders
shall be owed by the Purchaser to the Vendor;
(s) Leases - Schedule "B" sets out a full and complete
list of all real property and mineral interest
leases or agreements in the nature of a lease to
which the Vendor is a party in respect of the
Purchased Assets. The Vendor is not a party to any
such lease or agreement in the nature of a lease,
whether as lessor or lessee, except those leases
set forth and described in Schedule "B" in which is
specified the parties to each of the leases, copies
of which have been given to the Purchaser. The
Vendor is not in default under or in breach of any
of the material covenants, conditions or agreements
contained in any lease;
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(t) Contracts - The Vendor is not in breach of any of
the material covenants, conditions or agreements
contained in any agreement, contract or commitment
whether written or oral, of any nature or kind
whatsoever in connection with the Purchased Assets;
(u) Employment - In connection with the Grouse Creek
Project:
(i) the Vendor is not a party to any written
or oral employment, service, union,
pension, supplemental retirement, group
insurance, deferred profit sharing,
benefit or other similar agreement except
as set forth and described in Schedule
"H";
(ii) the names of all salaried employees
employed by the Vendor in connection with
the Purchased Assets, their date of hire,
and titles are set out in Schedule "H";
(iii) all obligations of the Vendor under all
contracts of employment have been
fulfilled;
(iv) the Vendor is in compliance with all
applicable laws respecting employment and
employment practices, terms and
conditions of employment and wages and
hours, retirement plans, deferred
compensation plans, health and welfare
benefit plans, health, safety and
occupational laws with respect to its
employees and has not engaged in any
unfair labour practice;
(v) no unfair labour practice, complaint,
claim or grievance with respect to any
employees at the Grouse Creek Project is
pending before any labour relations
board, workers' compensation board or
similar government tribunal or agency;
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(vi) there is no collective agreement in place
and the Vendor is not aware of any
attempts to organize or establish any
labour union or employee association
involving employees at the Grouse Creek
Project;
(v) Workers' Compensation - All obligations of the
Vendor under applicable workers' compensation
legislation in respect of employees relating to the
Purchased Assets have been fulfilled including,
without limitation, the payment of all levies and
assessments as required in a timely manner;
(w) ERISA - In connection with the Grouse Creek Project:
(i) the Vendor and the Controlled Group have
fulfilled their obligations under the
minimum funding standards of ERISA and
the code enacted thereunder with respect
to each Plan and are in compliance in all
material respects with the presently
applicable provisions of ERISA and the
code, and have not incurred any liability
to the PBGC (other than premiums due and
not delinquent under Section 4007 of
ERISA) or a Plan under Title IV of ERISA;
(ii) the Vendor and the Controlled Group have
incurred any withdrawal liability with
respect to any Multiemployer Plan under
Title IV of ERISA, and no such liability
is expected to be incurred;
(x) Consents and Approvals - Except as disclosed in
Schedules "A" and "E", there are no consents,
approvals, orders or authorizations of any person
or governmental authorities in Canada, the United
States or elsewhere or registrations, declarations,
filings or recordings with any authorities required
to be obtained by the Vendor in connection with
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the completion of any of the transactions
contemplated by this Agreement, the execution and
delivery of this Agreement, the Closing or
performance of any of the terms and conditions
of this Agreement;
(y) Disclosure
(i) The Vendor has disclosed, granted access
to or made available to the Purchaser for
inspection and review all information,
data and files relevant to the Purchased
Assets, including, without limitation,
the information in the Vendor's data room
(the "Disclosed Data");
(ii) There is no material information in
respect of the Purchased Assets which has
not been disclosed to the Purchaser;
(iii) The Disclosed Data is not inaccurate or
untrue in any material respect; and
(iv) The representations and warranties
contained in this Agreement and the
information contained in the schedules
and the documents listed therein or
otherwise delivered by the Vendor to the
Purchaser constitute full, true and plain
disclosure of all material facts relating
to the Grouse Creek Project and the
Purchased Assets and do not omit to state
any material fact.
4.3 Representations of Great Lakes and Purchaser. Great Lakes
and the Purchaser, acknowledging that the Vendor is relying thereon in entering
into this Agreement and will rely thereon in concluding the transactions
contemplated hereby, represents and warrants to the Vendor that:
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(a) Disclosure - The information contained in the
preliminary prospectus attached hereto as Schedule
"J" represents a complete and accurate description
of all material facts relating to Great Lakes at
the date thereof and represents full, true and
plain disclosure of all material facts relating to
the securities offered thereunder and does not
contain any misrepresentation likely to affect the
value of the market price of the securities to be
distributed;
(b) Consents and Approvals - Except as disclosed in
this Agreement or otherwise by Great Lakes and the
Purchaser to the Vendor, there are no consents,
approvals, orders or authorizations of any person
or governmental authorities in Canada, the United
States or elsewhere or registrations, declarations,
filings or recordings with any authorities required
to be obtained by the Great Lakes or the Purchaser
in connection with the completion of any of the
transactions contemplated by this Agreement, the
execution and delivery of this Agreement, the
Closing or performance of any of the terms and
conditions of this Agreement.
4.4 Survival of Representations and Warranties. The
representations and warranties contained in this Agreement and in any
instruments or certificates delivered at the Closing in connection with the
transactions contemplated hereby shall be true and accurate at Closing and
shall survive the Closing and the purchase and sale contemplated herein.
ARTICLE 5
COVENANTS
5.1 Joint Covenants
(a) Preparing for Closing. During the Interim Period,
each of the Parties shall diligently take or cause to be taken in a timely
manner all proper steps, actions and
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proceedings to enable the Parties to complete the sale of the Purchased Assets
to the Purchaser as contemplated herein and to satisfy or cause to be satisfied
the conditions precedent to the obligations of the Parties hereunder to the
extent that their respective actions or inactions can control or influence the
satisfaction of these conditions, including, without limitation, obtaining
Regulatory Approvals.
(b) Press Release. No Party shall make any press
release or other public disclosure (including, without limitation, disclosures
in a prospectus or other similar document) of the transaction contemplated
hereunder or concerning the Grouse Creek Project without first having made a
copy of such release or disclosure document available to the other Parties and
having received the other Parties' consent to such release or disclosure,
provided, however, that this provision shall not restrict a Party from making
any disclosure which is required by law or regulation.
5.2 Vendor's Covenants
(a) Access. During the Interim Period, the Vendor
shall:
(i) provide to the Purchaser and its directors,
officers, auditors, counsel and other authorized
representatives ("Representatives") access during
regular business hours at the Vendor's corporate
office and the Grouse Creek Project office and mine
site to all records, books, contracts, agreements
and other materials relating to the Purchased
Assets, including, without limitation, access to
the Grouse Creek Project site (including, without
limitation for the purpose of an environmental
audit) and to all exploration, development,
environmental and operating results and information
relating to the Grouse Creek Project, including,
without limitation, copies of any letters provided
to the Vendor's auditors by the Vendor's lawyers
with respect to the Grouse Creek Project;
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(ii) provide to the Purchaser and its Representatives
copies of the most recent 10-Ks, 10-Qs, 8-Ks, proxy
material, information circulars and similar
material filed by the Vendor with relevant
securities authorities;
(iii) if reasonably requested, provide copies of any
written materials relating to the Grouse Creek
Project to the Purchaser and its Representatives;
and
(iv) co-operate in making its officers and personnel
available to the Purchaser and its Representatives
on reasonable prior notice.
(b) Conduct of Operations. During the Interim Period,
the Vendor shall:
(i) use the Purchased Assets only in the usual and
ordinary course of business and in conformity with
all applicable laws, ordinances, regulations and
rules;
(ii) not assign, sell, lease or otherwise transfer or
dispose of any of the Purchased Assets, except
sales from inventories and minor assets in the
normal and ordinary course of business;
(iii) maintain the Purchased Assets in the same condition
as they exist on the date of this Agreement,
ordinary wear and tear excepted;
(iv) perform or cause to be performed all customary
maintenance and repair to the portions of the
Purchased Assets that are tangible personal
property;
(v) maintain in full force and effect all existing
policies of insurance including, without limitation,
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(A) insurance covering the Purchased Assets
(including, without limitation, fire and
casualty with extended coverage);
(B) liability insurance;
(C) personal injury insurance;
(vi) use its reasonable efforts, without making any
commitments on behalf of the Purchaser, to preserve
the business and its present relationships with
employees, suppliers, customers and others having
business relationships with the Vendor;
(vii) not create or suffer any lien or encumbrance on any
of the Purchased Assets, other than those which the
Vendor is contesting in good faith;
(viii) consult with the Purchaser on a regular basis with
respect to all decisions which might have a
material adverse effect on the Vendor's ability to
operate the Grouse Creek Project or the Purchased
Assets; and
(ix) except as the Purchaser may otherwise agree,
operate the Grouse Creek Project as currently
operated and only in the ordinary course of
business.
(c) No Other Negotiations. During the Interim Period,
the Vendor shall not sell or negotiate, in any manner, the sale of an interest
in the Grouse Creek Assets or hold any discussions in respect thereof with any
other potential purchaser whether or not such discussions had commenced or are
unsolicited, prior to February 10, 1994 (or March 12, 1994, if the Purchaser
extends the date by which it is required to satisfy itself as to financing in
accordance with Section 5.3(b)(i)).
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(d) Financial Statements. As soon as such statements
are available to the public, the Vendor shall deliver to the Purchaser its
audited financial statements for the year ending December 31, 1993.
5.3 Purchaser's and Great Lakes Covenants
(a) Public Offering. Great Lakes shall retain Wood
Gundy Inc. as its financial adviser with respect to the Public Offering and
shall take such steps as are necessary to proceed with the Public Offering.
(b) Financing
(i) The Purchaser shall have, on or before the close of
business (Toronto time) on February 10, 1994, satisfied itself and provided the
Vendor with evidence satisfactory to the Vendor, acting reasonably, that the
Purchaser has obtained financing in an amount equal to at least $25,000,000.
The Purchaser shall be entitled to extend the date by which it is required to
satisfy itself and the Vendor that the Purchaser has obtained financing in an
amount equal to at least $25,000,000 from February 10, 1994, to March 11, 1994
by paying the Vendor the sum of $250,000 by wire transfer funds prior to the
close of business (Toronto time) on February 10, 1994, which $250,000 would be
the Financing Deposit.
(ii) The Purchaser shall use at least 85% of the net
proceeds raised by Great Lakes from the Financing towards the Purchase Price
and the Pre-Closing Development Costs. In the event that 85% of the net
proceeds received by Great Lakes from the Financing exceeds the amount required
by the Purchaser to purchase a 20% undivided interest in the Grouse Creek
Assets, the Purchaser shall amend the Purchased Percentage so as to use at
least 85% of the net proceeds received by the Financing towards the Purchase
Price and the Pre-Closing Development Costs, thereby increasing the Purchaser's
undivided interest in the Grouse Creek Assets to be purchased hereunder to a
maximum of 30%. In the event that the Purchaser elects to purchase only a 20%
undivided interest in the Grouse Creek Assets, and is not otherwise required to
increase its Purchased
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Percentage as a result of this section, the Purchaser shall use up to 100% of
the net proceeds raised by the Purchaser from the Financing to pay the Purchase
Price and the Pre-Closing Development Costs.
(iii) On or prior to Closing, the Purchaser shall arrange
for that portion of the proceeds from the Financing equal to the Escrowed
Amount to be held by an escrow agent on terms and conditions satisfactory to
the Purchaser and the Vendor, acting reasonably.
(c) Approvals. Great Lakes shall use best efforts to
obtain all listing and regulatory approvals required so that the common shares
of Great Lakes underlying the Warrants shall be listed for trading on The
Toronto Stock Exchange.
ARTICLE 6
CONDITIONS
6.1 Purchaser's Conditions. The obligations of the Purchaser to
complete the purchase of the Purchased Assets on the Closing Date shall be
subject to the satisfaction of, or compliance with, at or before the Closing,
of each of the following conditions:
(a) Representations and Warranties - all the
representations and warranties of the Vendor set
forth in this Agreement shall be true and correct
as at the Closing Date as if made on and at the
Closing Date, and the Vendor shall have delivered
to the Purchaser a certificate of a senior officer
of the Vendor to that effect dated as at the
Closing Date;
(b) No Proceeding - no action or proceeding shall be
pending or threatened by any person to enjoin,
prohibit or materially restrict the Purchaser from
consummating any of the transactions contemplated
herein;
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(c) No Adverse Law - no new law, statute, by-law,
regulation, order, decree or other action shall
have been enacted or introduced whether federal,
provincial, state, municipal or otherwise, which in
the reasonable opinion of the Purchaser materially
impairs or may materially impair the ownership or
operation of the Purchased Assets or the ability of
the Purchaser to own the Purchased Assets as
contemplated by this Agreement;
(d) No Adverse Change - no material adverse change
shall have occurred to any of the Purchased Assets;
(e) Financing - the Purchaser shall have obtained the
Financing or otherwise have obtained the funds
necessary to complete the transaction contemplated
hereby;
(f) Performance of Covenants - the Vendor shall have
fully performed, observed and complied in all
material respects with all of its covenants and
agreements to be performed, observed or complied
with by it on or before the Closing Date;
(g) Approvals - all Regulatory Approvals shall have
been obtained upon terms and conditions
satisfactory to the Purchaser;
(h) Closing Documents - all documentation relating to
the due authorization and completion of the
transactions contemplated hereby shall be
satisfactory to the Purchaser and Purchaser's
counsel, acting reasonably;
(i) Purchase of Shares - the Vendor shall have
purchased $1,250,000 of common shares in the
capital of Great Lakes at the offering price under
the Public Offering;
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(j) Joint Venture Agreement - the Parties shall have
entered into the Joint Venture Agreement;
The foregoing conditions are for the exclusive benefit of the
Purchaser, and the Purchaser shall be entitled to waive compliance with same in
whole or in part in its sole discretion without prejudice to any of its rights
under this Agreement in the event of non-performance of any other condition in
while or in part. If any condition set forth in this section is not satisfied
on or before the Closing Date, the Purchaser may terminate this Agreement by
notice in writing to the Vendor and in such event the Purchaser shall be
released from all of its obligations hereunder and unless the Purchaser can
show that the condition or conditions which have not been satisfied and for
which the Purchaser terminated this Agreement have not been satisfied owing to
the fault of the Vendor or are reasonably capable of being performed or caused
to be performed by the Vendor, then the Vendor shall also be released from all
of its obligations and liabilities hereunder.
6.2 Vendor's Conditions. The obligation of the Vendor to
complete the sale of the Purchased Assets to be transferred on the Closing Date
shall be subject to the satisfaction of, or compliance with, at or before the
Closing, of each of the following conditions:
(a) Representations and Warranties - all the
representations and warranties of Great Lakes and
the Purchaser set forth in this Agreement shall be
true and correct as at the Closing Date as if made
on and at the Closing Date, and each of the
Purchaser and Great Lakes shall have delivered to
the Vendor a certificate of a senior officer of the
Purchaser and Great Lakes to that effect dated as
at the Closing Date;
(b) No Proceeding - no action or proceeding shall be
pending or threatened by any person to enjoin,
prohibit or materially restrict the Vendor from
consummating any of the transactions contemplated
herein;
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(c) No Adverse Law - no new law, statute, by-law,
regulation, order, decree or other action shall
have been enacted or introduced whether federal,
provincial, state, municipal or otherwise, which in
the reasonable opinion of the Vendor materially
impairs or may materially impair the ownership or
operation of the Purchased Assets or the ability of
the Vendor to own the Purchased Assets as
contemplated by this Agreement;
(d) No Adverse Change - no material adverse change
shall have occurred to any of the Purchased Assets;
(e) Performance of Covenants - the Purchaser and Great
Lakes shall have fully performed, observed and
complied in all material respects with all of its
covenants and agreements to be performed, observed
or complied with by it on or before the Closing
Date;
(f) Financing - the Purchaser shall have obtained the
Financing or otherwise have obtained the funds
necessary to complete the transaction contemplated
hereby;
(g) Approvals - all Regulatory Approvals and Material
Third Party Consents shall have been obtained upon
terms and conditions satisfactory to the Vendor;
(h) Prospectus - Great Lakes shall have delivered to
the Vendor a copy of the final prospectus relating
to the Public Offering and shall make a
representation respecting such prospectus
substantially like Section 4.3(a) as at Closing;
(i) Joint Venture Agreement - the Parties shall have
entered into the Joint Venture Agreement;
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(j) Lluvia de Oro Agreement - Great Lakes and the
Vendor shall have entered into an agreement
substantially in the form attached hereto as
Schedule "I" pursuant to which Great Lakes shall
grant the Vendor a right of first refusal to
participate as a joint venture partner or to farm
into Great Lakes' Lluvia de Oro gold project in
Mexico.
The foregoing conditions are for the exclusive benefit of the Vendor, and the
Vendor shall be entitled to waive compliance with same in whole or in part in
its sole discretion without prejudice to any of its rights under this Agreement
in the event of non- performance of any other condition in while or in part.
If any condition set forth in this section is not satisfied on or before the
Closing Date, the Vendor may terminate this Agreement by notice in writing to
the Purchaser and in such event the Vendor shall be released from all of its
obligations hereunder and unless the Purchaser can show that the condition or
conditions which have not been satisfied and for which the Purchaser terminated
this Agreement have not been satisfied owing to the fault of the Vendor or are
reasonably capable of being performed or caused to be performed by the Vendor,
then the Vendor shall also be released from all of its obligations and
liabilities hereunder.
6.3 Waiver. The waiver by any Party of a condition for its
exclusive benefit contained in this Agreement shall also act as a waiver of
that Party's right to assert any claim in respect of the breach of any
representation, warranty or covenant to which the condition pertained, provided
the Party giving such representation, warranty or covenant was not in wilful
breach of this Agreement with respect to such representation, warranty or
covenant at or before Closing.
6.4 Notice of Unfulfilled Condition. If any Party shall
determine at any time prior to the Closing Date that it intends to refuse to
consummate the transactions contemplated hereunder because of an unfulfilled or
unperformed condition precedent contained herein on the part of any other Party
to be fulfilled or performed, such Party shall so notify the other Party
forthwith upon making such determination to the end that such other Party shall
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have the right and opportunity to take such steps as its own expense as may be
necessary for the purpose of fulfilling or performing such condition precedent
within a reasonable time.
ARTICLE 7
CLOSING
7.1 Location. The Closing shall, unless otherwise agreed in
writing, take place on the Closing Date at the offices of Holden Day Wilson,
Suite 2400, P.O. Box 52, Toronto Dominion Bank Tower, Toronto-Dominion Centre,
Toronto, Ontario, M5K 1E7, commencing at 10:00 a.m.
7.2 Transfer Documents and Payment. At the Closing,
(a) the Vendor shall deliver to the Purchaser the
memorandum of the Grouse Creek Joint Venture
Agreement in a form recordable in the real property
records of Custer County, Idaho, which document
will be registered, recorded and filed, as
required, on the Closing Date or as soon thereafter
as practicable as part of the Closing process and
such other documentation reasonably required to
record the Purchaser's interest in the Purchased
Assets;
(b) the Purchaser shall pay for the Purchased Assets by
delivering to the Vendor a wire transfer of
immediately available funds in the amount of the
Estimated Purchase Price less Deposit, less
Financing Deposit, if any, plus the Estimated
Pre-Closing Development Costs;
(c) the Purchaser shall deliver to the Vendor the
Warrants.
7.3 Joint Venture Agreement. The Parties shall execute and
deliver the joint venture agreement respecting the Grouse Creek Project and the
right of first refusal agreement respecting Lluvia de Oro.
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7.4 Certificate of Representations and Warranties. Each Party
shall deliver to the other a certificate signed by a senior officer of such
Party certifying that at and as of the Closing Date the representations and
warranties of such Party contained in this Agreement are true and correct as if
made at the Closing except to the extent otherwise disclosed in the
certificate.
7.5 Certificate of Performance of Covenants. Each Party shall
deliver to the other a certificate signed by a senior officer of such Party
certifying that all covenants, agreements and conditions required by this
Agreement to be performed or complied with by such Party prior to or at Closing
have been performed and complied with, except as otherwise disclosed in the
certificate.
7.6 Opinions
(a) The Vendor shall deliver on the Closing Date to the
Purchaser an opinion or opinions of its General Counsel subject to standard
legal opinion qualifications, to the effect:
(i) that the Vendor is incorporated and subsisting
under the laws of its jurisdiction of incorporation;
(ii) that the Vendor has the corporate power and
capacity to enter into this Agreement and perform
its obligations hereunder;
(iii) that this Agreement and each other agreement or
instrument of transfer executed by it and delivered
on the Closing Date has been duly authorized,
executed and delivered by the Vendor and
constitutes a legal, valid and binding obligation
of the Vendor enforceable in accordance with its
terms;
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(iv) that the execution, delivery and fulfilment of the
terms of this Agreement are not in contravention of
any charter documents, by-laws or resolutions of
the Vendor;
(v) that the Vendor has good and marketable title to
the Purchased Assets subject to Permitted
Encumbrances;
(b) The Purchaser shall deliver on the Closing Date to
the Vendor an opinion of counsel to the effect that Great Lakes and the
Purchaser is incorporated and subsisting under the laws of its jurisdiction of
incorporation; that Great Lakes and the Purchaser has the corporate power and
capacity to enter into this Agreement and perform its obligations hereunder;
that this Agreement and each other agreement or instrument of transfer executed
by it and delivered on the Closing Date has been duly authorized, executed and
delivered by Great Lakes and the Purchaser and constitutes a legal, valid and
binding obligation of Great Lakes and the Purchaser enforceable in accordance
with its terms, subject to standard legal opinion qualifications and that the
execution, delivery and fulfilment of the terms of this Agreement are not in
contravention of any charter documents, by-laws or resolutions of the Vendor.
7.7 Additional Documents. On the Closing Date or as soon
thereafter as is practicable, each of the Parties shall execute and deliver
such further and additional documents as the other Parties or their counsel may
reasonably request to give effect to the provisions of this Agreement.
ARTICLE 8
INDEMNITY
8.1 If the transactions contemplated by this Agreement are
consummated, the Vendor shall indemnify and hold the Purchaser and Great Lakes,
and their officers and directors harmless from, against and in respect of any
loss, obligation, liability, damage, claim, action, suit, proceeding,
deficiency or expense of every kind and nature, known or unknown, contingent or
otherwise, including any and all out-of-pocket costs and including,
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without limitation, all legal and accounting fees relating to, arising from or
in connection with:
(a) any misrepresentation or breach of any covenant,
obligation, representation or warranty of the
Vendor made in this Agreement or in any certificate
or other document by the Vendor pursuant hereto;
(b) the assertion against the Purchaser or Great Lakes
of any liability of the Vendor;
(c) the failure by the Vendor to discharge any
liability of the Vendor;
(d) the following liabilities to the extent that any
such liability was not incurred by the Vendor,
acting prudently, in the ordinary course of
acquiring, exploring, developing and constructing
the Grouse Creek Project:
(i) any liability for federal, state, local
or other taxes existing at the Closing
Date or in respect of any reassessment
therefor for any period prior to the
Closing Date;
(ii) any liability which arose, accrued or was
accruing on or prior to the Closing Date
including any underfunding, assessment or
reassessment, non-payment or
non-fulfilment of obligations in
connection with, related to or in respect
of matters prior to the Closing Date,
including, without limitation, respecting
workers' compensation and other employee
obligations;
(iii) any act or thing done or omitted to be
done by the Vendor in relation to the
exploration, construction and development
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of the Grouse Creek Project and in
connection with the Purchased Assets
prior to the Closing Date including,
without limitation, relating to or
arising out of any matter relating
to the environment, including, without
limitation, relating to or arising out
of:
(A) the protection, clean-up,
remediation, reclamation and
eradication of the Grouse Creek
Project including but not
limited to obligations and
liabilities arising out of or
related to:
(1) the disturbance or
contamination of land or the
environment by exploration,
construction, development,
mining or processing
activities;
(2) any failure to comply with
governmental or regulatory
authorizations, licences,
permits and orders and all
non-governmental
prohibitions, covenants,
contracts and indemnities;
(3) any act or omission causing or
resulting in the spill,
discharge, leak, emission,
ejection, escape, dumping or
release of hazardous or toxic
substances, materials or
wastes as defined in any
federal, state or local law
or regulation;
(4) the long-term care and
monitoring of the Grouse
Creek Project, and the
posting and
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maintaining of bonds or other
financial assurances required in
connection therewith.
8.2 This indemnity shall survive the Closing and the purchase and
sale contemplated herein.
ARTICLE 9
OPTION
9.1 Option to Increase Percentage Under Joint Venture Agreement.
The Purchaser shall have the right to elect at any time prior to the date which
is 12 months following Commercial Production to increase its interest in the
Grouse Creek Project to a maximum 30% undivided interest by paying to the
Vendor an amount equal to (i) the percentage the Purchaser's participating
interest is being increased multiplied by the Sunk Costs plus (ii) the
percentage the Purchaser's participating interest is being increased multiplied
by the Option Amount.
ARTICLE 10
COSTS
10.1 Except as otherwise expressly provided in this Agreement, all
legal, tax and other costs and expenses incurred in connection with the
preparation of this Agreement and the consummation of the transactions
contemplated by it shall be paid by the Party incurring such expenses.
ARTICLE 11
GENERAL
11.1 Notice. Any notice (including any invoice, statement or
request or other communication) herein required or permitted to be given by
either party to the other shall be in writing in the English language and shall
be delivered or sent by telex or facsimile
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transmissions or other means of prepaid recorded communication to the
applicable address set forth below:
(a) in the case of the Purchaser and Great Lakes, to
the following:
320 Bay Street
Suite 1600
Toronto, Ontario
M5H 4A6
Attention: President
Telecopier: (416) 864-1364
with a copy to:
Holden Day Wilson
Suite 2400, P.O. Box 52
Toronto Dominion Bank Tower
Toronto-Dominion Centre
Toronto, Ontario
M5K 1E7
Attention: Paul M. Stein
Telecopier: (416) 361-1258
(b) in the case of the Vendor, to the following:
Hecla Mining Company
6500 Mineral Drive
Box C-8000
Coeur d'Alene, Idaho
83814-1931
Attention: General Counsel
Telecopier: (208) 769-4159
Any notice delivered shall be deemed to have been validly and effectively given
on the day of such delivery. If, however, the day of delivery is not a
business day, notice shall be deemed to have been given and received on the
next business day following such date. Any
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notice sent by telex or facsimile transmissions or other means of prepaid
recorded communication shall be deemed to have been validly and effectively
given on the business day next following the day on which it was sent. All
payments shall be made to the Parties at such of the respective offices as the
parties may respectively designate in writing.
11.2 Waiver. The failure of a Party in any one or more instances
to insist upon strict performance of any of the terms of this Agreement or to
exercise any right or privilege arising under it shall not preclude it from
requiring by reasonable notice that any other Party duly perform its
obligations or preclude it from exercising such a right or privilege under
reasonable circumstances, nor shall waiver in any one instance of a breach be
construed as an amendment to this Agreement or waiver of any later breach. No
amendment to or waiver of any provision of this Agreement shall be effective
unless embodied in writing duly signed by a duly authorized representative of
each Party.
11.3 Severability. If any of the terms or conditions set forth in
this Agreement are not enforceable, in whole or in part, the remaining terms
and conditions hereof may be enforced by the parties notwithstanding the
unenforceable term or condition. Any term or condition not enforceable in part
may be enforced to the extent that it is valid and enforceable. No failure or
delay by any party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise hereof or the exercise of any right,
power or privilege hereunder.
11.4 Assignment. Neither this Agreement nor any of the rights and
obligations of a Party hereunder may be assigned by such Party in whole or in
part without the prior written consent of the other Party, which consent may
not be withheld unreasonably. This Agreement shall enure to the benefit of and
be binding upon the Parties hereto and their respective successors and
permitted assigns.
11.5 Further Assurances. The Parties agree that they and each of
them will execute all documents and do all acts and things as may be necessary
or desirable within their respective powers to carry out and give effect to the
true intents and purposes of this
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Agreement including the execution after the Closing Date of such further
assignments, conveyances or assurances in law as the Purchaser deems necessary
or desirable to vest, perfect, confirm or record in the Purchaser the title or
other appropriate right to any of the Purchased Assets or to perfect the
completion of any of the transactions referred to in this Agreement.
11.6 Time of Essence. Time is of the essence of this Agreement.
11.7 Counterparts. This Agreement may be executed in one or more
counterparts each of which, when so executed, shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF the Parties hereto have duly executed this
Agreement effective as of the date first above written.
HECLA MINING COMPANY
Per: /s/ Michael B. White
Michael B. White,
Vice-President - General Counsel
GREAT LAKES IDAHO INC.
Per: /s/ Nicholas Tintor
/s/ John D. McBride
GREAT LAKES MINERALS INC.
Per: /s/ Nicholas Tintor
/s/ John D. McBride