UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 14, 2016
(Exact name of registrant as specified in its charter)
Nevada
(State or Other Jurisdiction of Incorporation)
001-36908 |
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98-0138393 |
(Commission File Number) |
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(IRS Employer Identification No.) |
665 Anderson Street
Winnemucca, Nevada
89445
(Address of Principal Executive Offices)
(775) 625-3600
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):
x |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 Entry into a Material Definitive Agreement
On March 14, 2016, Paramount Gold Nevada Corp. (“Paramount”) and Calico Resources Corp. (“Calico”) entered into an Arrangement Agreement (the “Agreement”) providing for the acquisition of Calico by Paramount (the “Transaction”). The principal asset of Calico is the Grassy Mountain Gold Project in Oregon, USA.
Arrangement Agreement
The Transaction is structured as a Plan of Arrangement under the Business Corporations Act (British Columbia) and is subject to approval by the Supreme Court of British Columbia (the “Court”). Under the terms of the Agreement, each issued and outstanding share of Calico’s common shares will be converted into the right to receive 0.07 of a share of common stock of Paramount. All outstanding stock options to purchase common shares of Calico will be terminated prior to the closing of the Transaction. After the closing of the Transaction, it is projected that existing shareholders of Calico will own approximately 46% of Paramount’s common stock, while existing stockholders of Paramount will continue to own the remaining 54%. Paramount stockholder are expected to hold 57% of the pro forma entity's common stock on a fully-diluted basis, and Calico’s shareholders are expected to hold the remaining 43%. No fractional shares of Paramount’s common stock will be issued in the Transaction, and Calico’s shareholders will receive cash in lieu of any such fractional shares.
The Transaction was unanimously approved by the board of directors of both parties.
The completion of the Transaction is subject to customary closing conditions, including, among others: (i) receipt of an interim order from the Court: (ii) the approval of Calico’s shareholders of the Transaction: (iii) the approval by Paramount’s stockholders of the issuance of Paramount’s common stock to Calico’s shareholders: (iv) the approval for listing by the NYSE MKT LLC of Paramount’s common stock issuable to Calico’s shareholders: (v) the absence of material adverse effect on either Paramount or Calico, and (vi) the receipt of a final order from the Court.
The Agreement contains customary representations, warranties and covenants. Certain covenants require that each of the parties: (i) use reasonable best efforts to cause the Transaction to be completed, including with regard to obtaining all the regulatory approvals and (ii) call and hold a special stockholders’ meeting and in the case of Calico, recommend approval of the Transaction, and, in the case of Paramount recommend approval of the issuance of Paramount’s common stock. In addition, Calico has agreed not to solicit alternative transaction proposals.
The Agreement contains certain termination rights and provides that (i) upon termination of the Agreement under specified circumstances, including a change in the recommendation of Calico’s board of directors, Calico will owe Paramount a cash breakup fee of $300,000, and (ii) upon the termination of the Agreement under certain other specified circumstances, including a change in the recommendation of Paramount’s board of directors, Paramount will owe Calico a cash breakup fee of $300,000.
In connection with the Transaction, Paramount and Calico have entered into a loan agreement dated March 14, 2016 (the “Loan Agreement”). Pursuant to the Loan Agreement, Paramount will provide Calico with interim debt financing of up to US$800,000 (the “Interim Loan”), to be repaid 90 days following the termination of the Agreement. The loan will be convertible into shares of Calico’s common shares at a price of CDN$0.10 per share, subject to the approval of the TSX Venture Exchange, and will be secured by all of Calico’s assets. The proceeds of the Interim Loan will be used by Calico for general corporate purposes prior to the completion of the Transaction.
The foregoing description of the Agreement is no a complete description of all the parties rights and obligations under the Agreement. The above description is qualified in its entirety by reference to the Agreement, with is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
Voting and Support Agreement
In connection with the Agreement, certain shareholders of Calico entered into three voting and support agreements, dated March 14, 2016 (collectively the “Voting and Support Agreements”), pursuant to which each such shareholder has agreed, among other things, to vote its shares of common shares of Calico, in favor of the approval of the Agreement.
The foregoing description of the Voting and Support Agreements is not a complete description of all of the parties’ rights and obligations under the Voting and Support Agreements. The above description is qualified in its entirety by reference to each of the Voting and Support Agreements, which are filed as Exhibits 10.1, 10.2 and 10.3 hereto and is incorporated herein by reference.
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Item 9.01. Financial Statements and Exhibits.
(d) List of Exhibits
Exhibit Number |
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Description |
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Exhibit 2.1* |
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Arrangement Agreement and Plan of Arrangement dated March 14, 2016, among Paramount Gold Nevada Corp. and Calico Resources Corp. |
Exhibit 10.1* |
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Voting and Support Agreement, dated as of March 14, 2016, among Paramount Gold Nevada Corp. and the directors and officers of Calico Resources Corp. |
Exhibit 10.2* |
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Voting and Support Agreement, dated as of March 14, 2016, among Paramount Gold Nevada Corp. and Seabridge Gold Inc. |
Exhibit 10.3* |
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Voting and Support Agreement, dated as of March 14, 2016, among Paramount Gold Nevada Corp. and FCMI Financial Corp. (on behalf of FCMI Parent Co.) |
* |
Filed herewith. |
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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PARAMOUNT GOLD NEVADA CORP. |
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Date: March 17, 2016 |
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By: |
/s/ Carlo Buffone |
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Carlo Buffone |
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Chief Financial Officer |
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Exhibit Number |
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Description |
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Exhibit 2.1* |
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Arrangement Agreement and Plan of Arrangement dated March 14, 2016, among Paramount Gold Nevada Corp. and Calico Resources Corp. |
Exhibit 10.1* |
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Voting and Support Agreement, dated as of March 14, 2016, among Paramount Gold Nevada Corp. and the directors and officers of Calico Resources Corp. |
Exhibit 10.2* |
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Voting and Support Agreement, dated as of March 14, 2016, among Paramount Gold Nevada Corp. and Seabridge Gold Inc. |
Exhibit 10.3* |
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Voting and Support Agreement, dated as of March 14, 2016, among Paramount Gold Nevada Corp. and FCMI Financial Corp. (on behalf of FCMI Parent Co.) |
* Filed herewith
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Exhibit 2.1
ARRANGEMENT AGREEMENT
BETWEEN
PARAMOUNT GOLD NEVADA CORP.
– AND –
Calico RESOURCES CORP.
MARCH 14, 2016
1. |
2 |
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2. |
11 |
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3. |
12 |
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4. |
33 |
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5. |
40 |
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6. |
43 |
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7. |
48 |
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8. |
52 |
ARRANGEMENT AGREEMENT DATED the 14 th day of March, 2016.
BETWEEN:
PARAMOUNT GOLD NEVADA CORP. , a corporation duly organized under the laws of the State of Nevada and having an office at 665 Anderson Street, Winnemucca, Nevada 89445
(hereinafter called “ Paramount ”)
AND:
CALICO RESOURCES CORP. , a company duly organized under the laws of the Province of British Columbia and having an office at #615-800 West Pender Street, Vancouver, British Columbia, V6C 2V6
(hereinafter called “ Calico ”)
WHEREAS:
B. |
The Calico Board has unanimously approved the transactions contemplated by this Agreement and, subject to the terms and conditions contained herein, Calico has agreed to submit for approval (i) the Arrangement Resolution to the Calico Shareholders, voting together as a class, and (ii) the Plan of Arrangement to the Court; |
C. |
The Paramount Board has unanimously approved the transactions contemplated by this Agreement (including the issuance of the Paramount Shares comprising the Arrangement Consideration) and, subject to the terms and conditions contained herein, Paramount has agreed to submit for approval the Share Issuance Resolution to the Paramount Shareholders, voting together as a class; |
D. |
The Calico Board has unanimously determined to recommend approval of the Arrangement Resolution to the Calico Shareholders; |
E. |
The Paramount Board has unanimously determined to recommend approval of the Share Issuance Resolution to the Paramount Shareholders; |
F. |
Calico Supporting Shareholders representing approximately 37% of the issued and outstanding Calico Shares as of the date hereof have executed and delivered to Paramount, or have agreed to execute and deliver to Paramount, Calico Support Agreements concurrently with the execution of this Agreement; and |
G. |
Paramount and Calico desire to make certain representations, warranties and covenants in connection with, and to prescribe certain conditions to, the transactions contemplated hereby. |
NOW, THEREFORE , in consideration of the foregoing and the representations, warranties, covenants and conditions set forth in this Agreement, and intending to be legally bound, Paramount and Calico agree as follows:
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(a) |
all capitalized terms which are not otherwise defined in this Agreement shall have the meaning ascribed to them in the Plan of Arrangement; |
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(g) |
“ BCBCA ” means the Business Corporations Act (British Columbia) and the regulations made thereunder, as amended; |
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in the case of Calico, by or on behalf of Calico or a Subsidiary of Calico or in respect of which Calico or a Subsidiary of Calico has an actual, actuarial or contingent liability; |
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(i) |
“ Board of Directors ” means the Calico Board, in the case of Calico, and the Paramount Board, in the case of Paramount; |
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(j) |
“ Business Day ” means a day that is not a Saturday, Sunday or civic or statutory holiday in Vancouver, British Columbia or Winnemucca, Nevada; |
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(n) |
“ Calico Circular ” means the information circular to be sent to the Calico Shareholders in connection with the Calico Meeting; |
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(o) |
“ Calico Disclosure Letter ” means the letter dated of even date herewith and delivered by Calico to Paramount in the form accepted by and initialed on behalf of Paramount with respect to certain matters in this Agreement; |
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(r) |
“ Calico Options ” means options to purchase Calico Shares granted under Calico’s stock option plan; |
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(s) |
“ Calico Properties ” means those mineral properties described in the Calico Disclosure Letter and any one of such mineral properties is referred to as a “ Calico Property ”; |
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(v) |
“ Calico Securities ” means the Calico Options, Calico Shares and other securities convertible into Calico Shares; |
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(y) |
“ Calico Shares ” means the common shares without par value in the capital of Calico; |
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(z) |
“ Calico Subsidiary” or “Calico Subsidiaries ” means, collectively, the direct and indirect subsidiaries of Calico, which is limited to Calico Resources USA Corp. ; |
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(aa) |
“ Calico Support Agreements ” means the voting and support agreements dated the date hereof and made between Paramount and the Supporting Calico Shareholders; |
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(bb) |
“ Calico Termination Fee Event ” has the meaning ascribed thereto in Section 6.10; |
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(cc) |
“ Canadian Securities Administrators ” means, collectively, the securities regulators in each of the provinces of Canada; |
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(hh) |
“ Confidentiality Agreement ” means that certain confidentiality agreement dated June 26, 2015, entered into between Paramount and Calico; |
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(ii) |
“ Court ” means the Supreme Court of British Columbia; |
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(jj) |
“ Dissent ” means the rights of dissent in respect of the Arrangement described in the Plan of Arrangement; |
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(kk) |
“ DOGAMI ” means the State of Oregon – Department of Geology and Mineral Industries; |
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(ll) |
“ Effective Date ” has the meaning thereto ascribed in the Plan of Arrangement; |
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(pp) |
“ Final Order ” means the final order to be made by the Court approving the Arrangement as provided for in Section 2.2; |
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(ss) |
“ HSR Act ” means the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; |
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(uu) |
“ Interim Financing ” means the debt financing of up to US$800,000 to be provided by Paramount to Calico; |
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(zz) |
“ material change ” has the meaning ascribed to such term in the Securities Act (British Columbia) in the case of Calico and the U.S. Securities Law, in the case of Paramount; |
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(aaa) |
“ material fact ” has the meaning ascribed to such term in the Securities Act (British Columbia) in the case of Calico and the U.S. Securities Law, in the case of Paramount; |
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(bbb) |
“ misrepresentation ” has the meaning ascribed to such term in the Securities Act (British Columbia) in the case of Calico and the U.S. Securities Law, in the case of Paramount; |
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(ccc) |
“ NI 43-101 ” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects ; |
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(ggg) |
“ Paramount ” means Paramount Gold Nevada Corp., a corporation existing under the laws of the State of Nevada; |
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(hhh) |
“ Paramount Board ” means the board of directors of Paramount, as constituted from time-to-time; |
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(iii) |
“ Paramount Change in Recommendation ” has the meaning ascribed thereto in Section 6.5(b)(iii)(A); |
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(mmm) |
“ Paramount Properties ” means those mineral properties listed in Schedule D hereto and any one of the listed mineral properties is referred to as a “ Paramount Property ”; |
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(ppp) |
“ Paramount Securities ” means the Paramount Shares and other securities convertible into Paramount Shares; |
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(sss) |
“ Paramount Shares ” means the shares of common stock with par value of US$0.01; |
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(uuu) |
“ Paramount Termination Fee Event ” has the meaning ascribed thereto in Section 6.8; |
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(vvv) |
“ Parties ” means Paramount and Calico, together, and “ Party ” means either Paramount or Calico, as the case may be; |
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(iii) |
rights vested in or exercisable by indigenous peoples including such rights arising out of the designation of lands in the U.S. as Indian Country; |
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(vi) |
security given by the Party or any of its Subsidiaries to a public utility or any Governmental Entity when required in the ordinary course of business of the Party and its subsidiaries; |
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(viii) |
any reservations or exceptions contained in the original grants from the government, as applicable, and the paramount title of the government to lands covered by unpatented mining claims; |
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(cccc) |
“ Seabridge Put ” means the right of Seabridge to exercise the NPI in advance for $10 Million; |
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(ffff) |
“ Securities Administrators ” means, collectively, the Canadian Securities Administrators and the U.S. Securities Administrators; |
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excluding any body corporate in respect of which such direction or control is not exercised by the specified body corporate as a result of any existing contract, agreement or commitment; |
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(kkkk) |
“ Supporting Calico Shareholders ” means the Persons who are party to the Calico Support Agreements, as specified in the Calico Disclosure Letter; |
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(qqqq) |
“ U.S. Exchange Act ” means Securities Exchange Act of 1934 , as amended, of the United States; |
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(tttt) |
“ U.S. Securities Administrators ” means, collectively, the SEC and any state securities commission or similar regulatory authority of any state of the United States; and |
1.2 Interpretation Not Affected by Headings, etc.
The division of this Agreement into Articles, Sections and other portions and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Unless otherwise indicated, all references to an “Article”, “Section” or “Schedule” followed by a number and/or a letter refer to the specified Article or Section of or Schedule to this Agreement. The terms “this Agreement” and, unless otherwise specified, the terms “hereof”, “herein” and “hereunder” and similar expressions, refer to this Agreement (including the Schedules hereto) and not to any particular Article, Section or other portion hereof.
In this Agreement, unless the context otherwise requires, words used herein importing the singular include the plural and vice versa and words importing gender include all genders and neuter.
In the event that any date on which any action is required to be taken hereunder by any of the Parties is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.
Notwithstanding any other provision hereof, to the extent any covenants contained herein relate, directly or indirectly, to a Subsidiary of either Paramount or Calico, each such provision will be construed as a covenant by Paramount or Calico, as the case may be, to cause (to the fullest extent to which it is legally capable) that Subsidiary to perform the required action.
Unless otherwise stated, all references in this Agreement to sums of money are expressed in lawful money of Canada. References to “US$” are reference to the lawful currency of the United States of America.
Where the phrases “to the knowledge of Calico” or “to Calico’s knowledge” or “to the knowledge of Paramount” or “to Paramount’s knowledge” are used in respect of Calico or the Calico Subsidiaries, or Paramount or the Paramount Subsidiaries, as the case may be, such phrase shall mean, in respect of each representation and warranty or other statement which is qualified by such phrase, that such representation and warranty or other statement is being made based upon: (a) in the case of Calico and of the Calico Subsidiaries, the collective actual knowledge of those officers of Calico set forth in the Calico Disclosure Letter and includes the fact that nothing has come to the attention of Calico to the contrary; and (b) in the case of Paramount and of the Paramount Subsidiaries, the
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collective actual knowledge of those officers of Paramount set forth in the Paramount Disclosure Letter and includes the fact that nothing has come to the attention of Paramount to the contrary.
Except as expressly stated otherwise, any reference in this Agreement to a statute includes all rules and regulations made thereunder, all amendments to that statute or the rules and regulations made thereunder in force from time to time, and any statute or rule or regulation that supplements or supersedes that statute or the rules or regulations made thereunder.
This Agreement and the other agreements and documents referred to herein, constitute the entire agreement between the Parties pertaining to the terms of the Arrangement and ancillary arrangements and supersede all other prior agreements, understandings, negotiations and discussions, whether oral or written, between the Parties with respect to the terms of the Arrangement and such arrangements.
Unless otherwise stated, all accounting terms used in this Agreement:
The following Schedules are annexed to this Agreement, and are hereby incorporated by reference to this Agreement and form a part hereof:
Schedule A |
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Plan of Arrangement |
Schedule B |
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Arrangement Resolution |
Schedule C |
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Share Issuance Resolution |
Schedule D |
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Paramount Properties |
The Parties agree to carry out the Arrangement in accordance with and subject to the terms and conditions set out in this Agreement and in the Plan of Arrangement.
Calico shall, as soon as reasonably practicable, apply to the Court pursuant to Section 288 of the BCBCA for the interim order of the Court (the “ Interim Order ”) providing for, among other things, the calling and holding of the Calico Meeting for the purpose of considering and, if deemed advisable, approving the Arrangement, and for the form of approval by Calico Shareholders of the Arrangement. If the approval of the Arrangement as set forth in the
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Interim Order is obtained, Calico shall take the necessary steps to submit the Arrangement to the Court and apply for the final order (the “ Final Order ”) in such fashion as the Court may direct and, as soon as practicable thereafter.
2.3 The Parties agree that the Arrangement will be carried out with the intention that all Paramount Shares will be issued in reliance on the exemption from the registration requirements of the United States Securities Act of 1933 , as amended (the “ U.S. Securities Act ”), provided by Section 3(a)(10) of the U.S. Securities Act (the “ Section 3(a)(10) Exemption ”). In order to ensure the availability of the Section 3(a)(10) Exemption, the Parties agree that the Arrangement will be carried out on the following basis:
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(b) |
the Court will be advised as to the intention of the Parties to rely on the Section 3(a)(10) Exemption prior to the hearing required to approve the Arrangement; |
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(c) |
the Court will be required to satisfy itself as to the fairness of the Arrangement to the Calico Shareholders subject to the Arrangement; |
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(d) |
the Final Order approving the Arrangement that is obtained from the Court will expressly state that the Arrangement is approved by the Court as being fair to the Calico Shareholders; |
“This Order will serve as a basis of a claim to an exemption, pursuant to section 3(a)(10) of the United States Securities Act of 1933, as amended, from the registration requirements otherwise imposed by that Act, regarding the exchange of Calico Shares for securities of Paramount by Calico Shareholders, pursuant to the Plan of Arrangement.”
3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Paramount
As at the date of this Agreement and as at the Closing Date, Paramount represents and warrants to Calico, and acknowledges that Calico is relying thereon, that, except as set forth in the Paramount Disclosure Letter:
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which is material to its business and operations, other than pursuant to this Agreement and is not a party to any agreement to acquire or lease any other business operations; |
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(c) |
Paramount has the corporate power to enter into this Agreement and, subject to obtaining the requisite approvals contemplated hereby, to carry out its obligations hereunder; |
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(i) |
Paramount has no reporting requirements under any jurisdiction other than the United States of America and the Province of Ontario, and is not on a list of defaulting issuers maintained by the SEC or the Ontario Securities Commission, and no regulatory authority having jurisdiction has issued any order preventing or suspending trading in any securities of Paramount which is currently outstanding; |
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(p) |
there are no known or anticipated material liabilities of Paramount or any of the Paramount Subsidiaries of any kind whatsoever (including absolute, accrued or contingent liabilities) nor any commitments whether or not determined or determinable, in respect of which Paramount is or may become liable other than the liabilities disclosed on, reflected in or provided for in the financial statements referred to in Section 3.1(k) or Section 3.1(l), or the Paramount Disclosure Letter; |
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(q) |
the corporate records and minute books of Paramount and the Paramount Subsidiaries as required to be maintained by them under the Laws of their respective jurisdictions of incorporation are up to date and contain complete and accurate minutes of all meetings of its directors, any committees of the board of directors and shareholders held and all resolutions consented to in writing; |
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(s) |
Paramount and each Paramount Subsidiary has duly filed on a timely basis all Tax Returns required to be filed by it and has paid or withheld all Taxes which are due and payable or required to be withheld or remitted, and has paid all assessments and reassessments, and all other Taxes due and payable by it on or before the date hereof; adequate provision has been made for Taxes payable for the current period for which Tax Returns are not yet required to be filed; there are no agreements, waivers or other arrangements providing for an extension of time with respect to the filing of any Tax Return, or payment of any Tax, by any of them; there are no actions, suits, proceedings, investigations, audits, examinations or claims commenced or to the knowledge of Paramount, threatened or contemplated against any of them in respect of Taxes or any matters under discussion with any Governmental Entity relating to Taxes asserted by any such Governmental Entity; |
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(t) |
there are no ongoing Tax audits or other Tax proceedings and no waivers of statutes of limitations have been given or requested with respect to Paramount; |
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(u) |
no Tax liens have been filed against Paramount, except for Taxes not yet due; |
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(v) |
no unresolved deficiencies or additions to Taxes have been proposed, asserted, or assessed in writing against Paramount by any Governmental Entity; |
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(w) |
no claim has been made in writing within the last three years by any Governmental Entity in a jurisdiction in which Paramount does not file Tax Returns that Paramount is or may be subject to taxation by that jurisdiction; |
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(x) |
Paramount is not and has not been a member of any “affiliated group” within the meaning of Code Section 1504(a) or any similar group under a similar provision of state, local or non-U.S. law; |
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(z) |
Paramount has never engaged in any “listed transaction” for purposes of Treasury Regulation sections 1.6011-4(b) or 301.6111-2(b)(2) or any analogous provision of state, local or foreign Law; |
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(aa) |
Paramount has disclosed on its U.S. federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code; |
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(bb) |
Paramount (i) is not a party to any joint venture, partnership, or other arrangement that is treated as a partnership for United States federal income Tax purposes, (ii) has not made an entity classification (“check-the-box”) election under Section 7701 of the Code, (iii) is not or has never been a shareholder of a “controlled foreign corporation” as defined in Section 957 of the Code (or any similar provision of state, local or foreign Law), or (iv) is not or has never been a shareholder in a “passive foreign investment company” within the meaning of Section 1297 of the Code; |
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(cc) |
Paramount does not have any actual or potential liability under Treasury Regulations Section 1.1502-6 (or any comparable or similar provision of federal, provincial, state, local or foreign Law), as a transferee or successor, pursuant to any contractual obligation, or otherwise for any material Taxes of any Person; |
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(dd) |
Paramount is not a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement; |
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(ee) |
Paramount has not distributed to its shareholders or security holders stock or securities of a controlled corporation, nor has stock or securities of Paramount been distributed, in a transaction to which Section 355 of the Code applies (i) in the two (2) years prior to the date of this Agreement or (ii) in a distribution that could otherwise constitute part of a “plan” or “series of related transactions” (within the meaning of Section 355(e) of the Code) that includes the transactions contemplated by this Agreement; |
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(ff) |
Paramount will not incur any Tax as a result of or with respect to the Plan of Arrangement; |
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(gg) |
on the Effective Date, Paramount shall not have any Tax obligations or liabilities except for: (A) those Tax obligations or liabilities incurred in the ordinary course of its business that are not yet due and payable; and (B) Tax obligations for which adequate reserves have been established on Paramount’s books and records; |
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(hh) |
Paramount is a “United States real property holding corporation” as defined under Section 897(c)(2) of the Code; |
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Laws) of any governmental entities, regulatory agencies or bodies having, asserting or claiming jurisdiction over it or over any part of its operations or assets, except in all cases above where such would not result in a Paramount Material Adverse Effect; |
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(ll) |
there are no environmental audits, evaluations, assessments, studies or tests that were commissioned by Paramount respecting the business, operations, properties or facilities of Paramount or the Paramount Subsidiaries except for environmental audits, evaluations, assessments, studies or tests incurred in the ordinary course of the business of Paramount and the Paramount Subsidiaries; |
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(mm) |
Paramount has filed with the applicable Securities Administrators all technical reports required to be filed under applicable Laws in respect of each property material to Paramount and all public disclosure made by Paramount regarding the Paramount Properties complies in all material respects with the requirements of applicable Laws; |
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(nn) |
there is no agreement, judgment, injunction, order or decree binding upon Paramount or any of the Paramount Subsidiaries that has or could reasonably be expected to have the effect of prohibiting, restricting or materially impairing any business practice of Paramount or the Paramount Subsidiaries, any acquisition of property by Paramount or the Paramount Subsidiaries or the conduct of business by Paramount or the Paramount Subsidiaries as currently conducted other than such agreements, judgments, injunctions, orders or decrees which would not, individually or in the aggregate, have a Paramount Material Adverse Effect; |
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(oo) |
the Paramount Board has: |
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(i) |
determined unanimously that, as of the date of this Agreement, the Arrangement is fair to the Paramount Shareholders and is in the best interests of Paramount; |
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(iii) |
determined unanimously, as of the date of this Agreement, to recommend that the Paramount Shareholders vote in favor of the Share Issuance Resolution; |
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(qq) |
the books, records and accounts of Paramount in all material respects, (i) have been maintained in accordance with good business practices and on a basis consistent with prior years, except as otherwise disclosed in Paramount Disclosure Letter), (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and dispositions of the assets of Paramount, and (iii) accurately and fairly reflect the basis for the Paramount financial statements described in Subsection 3.1(k) and Subsection 3.1(l); |
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(uu) |
Benefit Plans: |
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(i) |
Paramount has provided directly to Calico copies of all Benefit Plans of Paramount; |
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(ii) |
Paramount has complied, in all material respects, with all of the terms of the Paramount Benefit Plans, including the provisions of any collective agreements, funding and investment contracts or obligations applicable thereto, arising under or relating to such Benefit Plans, whether written or oral, which are maintained by or binding upon Paramount. All such Benefit Plans have been administered in accordance with the documents governing the Benefit Plans and all reports and filings with Governmental Entities required in connection with each Benefit Plan have been timely made; and |
|
(iii) |
all Benefit Plans of Paramount are fully funded and in good standing with such Governmental Entities as may be applicable and no notice of underfunding, non-compliance, failure to be in good standing or otherwise has been received by Paramount from any such Governmental Entities. No action has been taken, no event has occurred and no condition or circumstance exists that has resulted in, or could reasonably be expected to result in, any Benefit Plan of Paramount, being ordered or required to be terminated or wound up in whole or in part or having its registration under applicable legislation refused or revoked, or being placed under the administration of any trustee or receiver or regulatory authority; |
|
(vv) |
Employment Matters: |
|
(i) |
none of Paramount or any of the Paramount Subsidiaries: |
|
(A) |
is a party to any collective bargaining agreement or letter of understanding, letter of intent or other written communication with any trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent which may qualify as a trade union, which would apply to any employees of Paramount, nor has any trade union, council of trade unions, employee bargaining agency or affiliated bargaining agent applied or threatened to apply for certification as bargaining agent for the employees of Paramount, nor is there a threatened or apparent union-organizing campaign for employees not covered under a collective bargaining agreement; or |
|
(B) |
subject to any current, pending or threatened strike or lockout; |
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|
tribunal or instrumentality, whether domestic or foreign based on, arising out of, in connection with, or otherwise relating to unfair labor practices, the employment application for employment of or termination of employment of any individual by Paramount respecting employment or labor standards, including but not limited to applicable employment equity, pay equity, labor relations, workers’ compensation or workplace safety and insurance, occupational health and safety, privacy, wrongful dismissal or human rights Laws; |
|
(iii) |
there are no material notices of assessment, provisional assessment, reassessment, supplementary assessment, penalty assessment or increased assessment or any other communications related thereto which Paramount has received from any workers’ compensation or workplace safety and insurance board or similar authorities in any jurisdictions where the business is carried on which are unpaid on the date hereof or which will be unpaid at the Effective Date and there are no facts or circumstances which may result in a material increase in liability from any applicable workers’ compensation or workplace safety and insurance legislation, regulations or rules after the Effective Date. The accident cost experience of Paramount is such that there are no such material pending or possible assessments and there are no claims or potential claims which may materially affect the accident cost experience of Paramount; and |
|
(iv) |
to the knowledge of Paramount, without investigation, no employee of Paramount is bound by any non-compete agreement or other agreement or restriction of any kind that would impede in any way the ability of such employee to carry out fully all activities of such employee in furtherance of the business of Paramount; |
|
(ww) |
Paramount Properties: |
|
(ii) |
the disclosure made in the Paramount Public Record (including without limitation technical reports) concerning the Paramount Properties is complete and accurate in all material respects and all known facts of a scientific or technical nature are fully and accurately disclosed in Paramount’s most recent public technical report related to such Paramount Properties, and nothing has come to the attention of Paramount to indicate that any of the foregoing statements are or may be inaccurate in any material respect; |
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|
Paramount Subsidiaries are in default of any of the material provisions of any such leases, licences and claims nor, to the knowledge of Paramount, has any such default been alleged; |
|
(B) |
none of the Paramount Properties or any mineral rights therein is subject to any option, pre-emption right, right of first refusal or purchase, or acquisition right; |
|
(C) |
no royalty or other payment is payable in respect of any of the Paramount Properties and all work required to be performed in connection therewith has been performed; |
|
(F) |
the Paramount Properties are not subject to the withdrawal of mineral claim rights as part of the sage grouse analysis or any other government proposition or decision; |
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|
which it is currently being utilized, subject to normal wear and tear and technical obsolescence, repair or replacement, except for such property whose failure to be in such condition does not, and could not be reasonably expected to have, a Paramount Material Adverse Effect; |
|
(zz) |
there is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress or, to the knowledge of Paramount, threatened against Paramount or any of the Paramount Subsidiaries before any Governmental Entity; |
|
(aaa) |
there are reasonable grounds for believing that (i) Paramount is able to pay its liabilities as they become due, (ii) the realizable value of the assets of Paramount are not less than the aggregate of the liabilities thereof and the stated capital of all classes of shares thereof, and (iii) no creditor of Paramount or any Paramount Subsidiary will be prejudiced by the Arrangement; |
|
(bbb) |
no shareholder rights plan is in force in respect of Paramount; |
|
(ccc) |
the auditors of Paramount are independent public accountants as required by applicable Laws and there is not now, and there has never been, any reportable disagreement with the present or any former auditors of Paramount; |
|
(ddd) |
none of Paramount or any of the Paramount Subsidiaries own or license any patents, patent rights, trademarks, trade names, service marks, copyrights, know how or other proprietary intellectual property rights that are material to the conduct of the business of Paramount or any of the Paramount Subsidiaries and, with respect to its mineral property databases, Paramount or the Paramount Subsidiaries holds all such rights as are necessary to enable it to continue to use these databases, consistent with their past use or in the ordinary course of its business; |
|
(eee) |
none of Paramount or any of the Paramount Subsidiaries is a party to or bound by any non-competition agreement or any other agreement, obligation, judgment, injunction, order or decree which purports to (i) limit the manner or the localities in which all or any material portion of the business of Paramount or any of the Paramount Subsidiaries are conducted, (ii) limit any business practice of Paramount or any of the Paramount Subsidiaries in any material respect, or (iii) restrict any acquisition or disposition of any property by Paramount or any of the Paramount Subsidiaries in any material respect; |
|
(fff) |
no order (or the equivalent) ceasing or suspending the trading of its securities or prohibiting the sale of securities by Paramount or the Paramount Subsidiaries has been issued and is in force as of the date hereof and, to the knowledge of Paramount, no proceedings for this purpose have been instituted or are pending, contemplated or threatened; |
|
(ggg) |
none of Paramount or any of the Paramount Subsidiaries is indebted to any of its directors or officers or any of their associates, or, to Paramount’s knowledge, to any Paramount securityholder; |
|
(hhh) |
none of the directors or officers of Paramount or any of their associates or, to Paramount’s knowledge, Paramount securityholders, is indebted or under obligation to any of the Paramount Subsidiaries on any account whatsoever; |
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|
(kkk) |
Paramount acknowledges that the Arrangement will be subject to the review and approval of the TSXV and that the Calico Circular will be subject to the review of the TSXV; and |
3.2 Representations and Warranties of Calico
As at the date of this Agreement and as at the Closing Date, Calico represents and warrants to Paramount, and acknowledges that Paramount is relying thereon, that, except as set forth in the Calico Disclosure Letter:
- 23 -
- 24 -
|
(m) |
the Calico Shares are listed on the TSXV and Calico is in compliance with all rules, regulations and policies of the TSXV in all material respects; |
- 25 -
|
(s) |
there are no ongoing Tax audits or other Tax proceedings and no waivers of statutes of limitations have been given or requested with respect to Calico; |
|
(u) |
no unresolved deficiencies or additions to Taxes have been proposed, asserted, or assessed in writing against Calico by any Governmental Entity; |
|
(w) |
Calico is not and has not been a member of any “affiliated group” within the meaning of Code Section 1504(a) or any similar group under a similar provision of state, local or non-U.S. law; |
|
(y) |
Calico has never engaged in any “listed transaction” for purposes of Treasury Regulation sections 1.6011-4(b) or 301.6111-2(b)(2) or any analogous provision of state, local or foreign Law; |
|
(cc) |
Calico is not a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or similar agreement; |
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|
(ee) |
Calico will not incur any Tax as a result of or with respect to the Interim Financing and the Plan of Arrangement; |
|
(gg) |
Calico is a “United States real property holding corporation” as defined under Section 897(c)(2) of the Code; |
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|
(i) |
determined unanimously that, as of the date of this Agreement, the Arrangement Consideration is fair, from a financial point of view, to the Calico Shareholders and is in the best interests of Calico and the Calico Shareholders; |
|
(ii) |
received an opinion from Canaccord Genuity Corp. that as of the date of this Agreement, the Arrangement Consideration to be paid under the Arrangement is fair, from a financial point of view, to Calico and the Calico Shareholders; and |
|
(iii) |
determined unanimously, as of the date of this Agreement, to recommend that the Calico Shareholders vote in favor of the Arrangement Resolution; |
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- 29 -
|
tribunal or instrumentality, whether domestic or foreign based on, arising out of, in connection with, or otherwise relating to unfair labor practices, the employment application for employment of or termination of employment of any individual by Calico respecting employment or labor standards, including but not limited to applicable employment equity, pay equity, labor relations, workers’ compensation or workplace safety and insurance, occupational health and safety, privacy, wrongful dismissal or human rights Laws; |
|
(ii) |
the disclosure made in the Calico Public Record (including without limitation technical reports) concerning the Calico Properties is complete and accurate in all material respects and all known facts of a scientific or technical nature are fully and accurately disclosed in Calico’s most recent public technical report related to such Calico Properties (if any), and nothing has come to the attention of Calico to indicate that any of the foregoing statements are or may be inaccurate in any material respect; |
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|
of any such leases, licences and claims nor, to the knowledge of Calico, has any such default been alleged; |
|
(B) |
none of the Calico Properties or any mineral rights therein is subject to any option, pre-emption right, right of first refusal or purchase, or acquisition right; |
|
(C) |
no royalty or other payment is payable in respect of any of the Calico Properties and all work required to be performed in connection therewith has been performed; |
|
(F) |
Calico Properties are not subject to the withdrawal of mineral claim rights as part of the sage grouse analysis or any other government proposition or decision. |
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|
have a good and valid interest in each parcel of such leased real property, free and clear of all Liens, other than Permitted Liens; |
|
(ggg) |
none of Calico or any of the Calico Subsidiaries is indebted to any of its directors or officers or any of their associates, or, to Calico’s knowledge, to any Calico securityholder; |
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|
(lll) |
No executive officer or director of Calico and, to Calico’s Knowledge, no Affiliate owning any Calico Shares, is a party to any agreement with or binding upon Calico or any of its assets, rights or properties or has any interest in any property owned by Calico or has engaged in any transaction with any of the foregoing within the last twelve (12) months. |
|
(a) |
Consultation. Each Party agrees to consult with the other Party, and to provide the other Party with a reasonable prior opportunity to review and comment on, any press release or public statement or any filing to be made with any Governmental Entity with respect to this Agreement or the Arrangement (including any filing with any securities administrator or stock exchange with respect thereto) prior to the release or submission thereto; provided that, if a Party is required by applicable Laws to make a public announcement with respect to this Agreement and/or the Arrangement, such Party will provide as much prior notice (including the proposed text of the announcement) to the other Party as is reasonably possible. All requests and enquiries from any Governmental Entity with respect to the Arrangement shall be dealt with by Paramount and Calico in consultation with each other, and Paramount and Calico shall promptly co-operate with and provide all necessary information and assistance reasonably required by such Governmental Entity upon being requested to do so by such authority. Furthermore: |
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Each Party agrees to consult with the other Party prior to issuing any press release or making any announcement regarding its mineral reserves or resources and, subject to applicable Laws, each Party agrees that it will not issue any press release or make any announcement regarding its mineral reserves or resources without the prior written consent of the other Party, such consent not to be unreasonably withheld.
|
(iii) |
the taking of all such action as may be required under applicable Laws in connection with the transactions contemplated by this Agreement and the Plan of Arrangement. |
Paramount hereby covenants and agrees that it shall take such steps and do all such other acts and things, as may be necessary or desirable in order to give effect to the transactions contemplated by this Agreement, subject to shareholder and regulatory approval and, without limiting the generality of the foregoing, shall:
|
(a) |
use its commercially reasonable efforts to, prior to the completion of the Arrangement, obtain listing on the NYSE MKT of the Paramount Shares to be issued pursuant to the Arrangement; |
|
(b) |
use its commercially reasonable efforts to apply for and obtain such consents, orders or approvals as counsel for Calico (in consultation with counsel for Paramount and acting reasonably) may advise are necessary or desirable for the implementation of the Arrangement and, without limiting the generality of the foregoing, to: |
|
(i) |
apply for and obtain approval of the Arrangement by the NYSE MKT in respect of Paramount; and |
|
(ii) |
obtain written consents from any persons who are parties to agreements (including without limiting the foregoing, any property agreements, option agreements, warrant agreements or warrant certificates) with Paramount where consents to the transactions contemplated by the Arrangement are required under those contracts or agreements; |
|
(c) |
in a timely and expeditious matter, prepare, in consultation with Calico, and, subject to obtaining the Interim Order, file the Paramount Proxy Statement (which shall be in form and substance |
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|
(i) |
carry out the terms of the Interim Order and the Final Order applicable to it and use its reasonable efforts to comply promptly with all requirements which applicable Laws may impose on |
- 35 -
|
Paramount or its Subsidiaries with respect to the transactions contemplated hereby and by the Arrangement; |
|
(j) |
defend all lawsuits or other legal, regulatory or other proceedings to which it is a party challenging or affecting this Agreement or the consummation of the transactions contemplated hereby; |
|
(l) |
use its commercially reasonable efforts to obtain all other necessary securityholder approval of the Paramount Shareholders; |
|
(n) |
obtain all required certifications and consent of the auditors of Paramount in respect of the Paramount financial statements to be provided in the Calico Circular; |
|
(o) |
make arrangements for the prompt delivery of certificates representing Paramount Shares as provided in the Plan of Arrangement; |
|
(p) |
if required by applicable Laws, use its commercially reasonable efforts to make and clear its filing required to be made in relation the HSR Act; |
|
(r) |
use its commercially reasonable efforts to obtain all necessary waivers, consents and approvals required to give effect to the Share Issuance Resolution; |
|
(t) |
promptly notify Calico if at any time it becomes aware that the Calico Circular or Paramount Proxy Statement contains any material misrepresentation or otherwise requires an amendment or supplement to the Calico Circular or Paramount Proxy Statement or any related application and promptly deliver written notice to Calico setting out full particulars thereof. In any such event, Paramount shall cooperate with Calico in the preparation of any required supplement or amendment to the Calico Circular or Paramount Proxy Statement or such other document, as the case may be; |
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|
(i) |
other than in the normal course of business or except in accordance with existing agreements, sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber (or permit any of the Paramount Subsidiaries to sell, pledge, lease, dispose of, grant any interest in, encumber or agree to sell, pledge, lease, dispose of, grant any interest in or encumber) any material assets of Paramount; |
|
(ii) |
issue, redeem, purchase or offer to purchase (or permit any of the Paramount Subsidiaries to issue, redeem, purchase or offer to purchase) any common shares or other securities of Paramount: |
|
(iii) |
other than in the normal course of business or except in accordance with existing agreements, acquire, directly or indirectly (or permit any of the Paramount Subsidiaries to acquire directly or indirectly) any material assets, including but not limited to mining properties or interests therein or securities of other companies or enter into any joint venture, earn-in or similar agreements or arrangements; or |
|
(iv) |
enter into or modify any employment, severance, collective bargaining or similar agreements, policies or arrangements with, or grant any bonuses, salary increases, severance or termination pay to, any employees, officers or directors of Paramount other than as disclosed in the Paramount Disclosure Letter or pursuant to agreements in effect (without amendment) on the date hereof. |
Calico hereby covenants and agrees that it shall take such steps and do all such other acts and things, as may be necessary or desirable in order to give effect to the transactions contemplated by this Agreement, subject to shareholder and regulatory approval and, without limiting the generality of the foregoing, shall:
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|
(e) |
obtain all required certifications and consents of the auditors of Calico in respect of the Calico financial statements to be provided in the Calico Circular; |
|
(h) |
use its commercially reasonable efforts to obtain all other necessary securityholder approval of the Calico Shareholders; |
|
(j) |
cooperate in the preparation of the Paramount Proxy Statement and ensure that the Paramount Proxy Statement shall contain prospectus-level disclosure respecting Calico and the Calico Subsidiaries and the information and consolidated financial statements related to Calico and the pro forma financial statements to be contained in the Paramount Proxy Statement shall be true, correct and complete in all material respects as they relate to Calico and shall not contain any misrepresentation and shall comply with applicable Laws on the date of the mailing thereof and any such financial statements that are to be included in the Paramount Proxy Statement shall be prepared in accordance with the requirements of Regulation 14A under the U.S. Exchange Act, including, if applicable, reconciliations to U.S. GAAP and auditor review and qualification standards under the U.S. Exchange Act and the Public Company Accounting Oversight Board; |
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|
(l) |
defend all lawsuits or other legal, regulatory or other proceedings to which it is a party challenging or affecting this Agreement or the consummation of the transactions contemplated hereby; |
|
(n) |
use its commercially reasonable efforts to have lifted or rescinded any injunction or restraining order or other order which may adversely affect the ability of the Parties to consummate the transactions contemplated hereby; |
|
(p) |
if required by applicable Laws, use its commercially reasonable efforts to make and clear its filing required to be made in relation the HSR Act; |
|
(q) |
use its commercially reasonable efforts to obtain all necessary waivers, consents and approvals required to be obtained by Calico or a Calico Subsidiary from other parties to material agreements of Calico; |
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|
agree to sell, pledge, lease, dispose of, grant any interest in or encumber) any material assets of Calico; |
5.1 Mutual Conditions Precedent
The Parties’ obligations to complete the transactions contemplated in this Agreement are subject to satisfaction of the following conditions on or before the Closing Date:
|
(e) |
the TSXV shall have accepted notice for filing in respect of Calico, subject only to standard conditions of completion; |
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|
(i) |
the issuance and exchange of Paramount Shares to be issued and exchanged for Calico Shares pursuant to the Arrangement will be exempt from the registration requirements of the U.S. Securities Act and the registration and prospectus requirements of applicable Securities Legislation in each of the provinces and territories of Canada in which Calico Shareholders are resident; |
For greater certainty, the parties acknowledge and agree that Paramount shall have no right under this Agreement, under contract (except for the secured promissory note to be issued in connection with the Interim Financing), in equity or otherwise, absolute or contingent, to acquire any shares of Calico, and any such right will arise only and by virtue of the Plan of Arrangement if and when the Plan of Arrangement is approved by the Calico Shareholders.
5.2 Conditions solely for the benefit of Paramount
The obligations of Paramount to complete the transactions contemplated in this Agreement are subject to satisfaction of the following conditions on or before the Closing Date:
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|
(e) |
Paramount shall have received a certificate of a senior officer of Calico confirming that the obligations, covenants and agreements of Calico set out in Section 4.3 have been completed as at the Closing Date; |
|
(f) |
receipt of the resignation of all of the directors and officers of Calico as of the Closing Date; |
|
(h) |
Calico Shareholders holding no more than 5% of the outstanding Calico Shares shall have validly exercised their Dissent Rights (and not withdrawn such exercise) and Paramount shall have received a certificate dated the day immediately preceding the Effective Date of two officers of Calico to such effect |
The foregoing conditions in this Section 5.2 are inserted for the exclusive benefit of Paramount and may be waived by it in whole or in part by Paramount at any time.
5.3 Conditions solely for the benefit of Calico
The obligations of Calico to complete the transactions contemplated in this Agreement are subject to satisfaction of the following conditions on or before the Closing Date:
|
(b) |
Paramount will be in compliance with all rules, regulations and policies of the NYSE MKT in all material respects; |
|
(f) |
Paramount shall have provided the Interim Financing, on terms and in form and substance reasonably satisfactory to Calico. |
The foregoing conditions in this Section 5.3 are inserted for the exclusive benefit of Calico and may be waived by it in whole or in part by Calico at any time.
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5.4 Notice and Cure Provisions
Each Party will give prompt notice to the other of the occurrence, or failure to occur, at any time from the date hereof until the earlier to occur of the termination of this Arrangement and the Effective Time of any event or state of facts which occurrence or failure would, or would be likely to:
|
(a) |
cause any of the representations or warranties of any Party contained herein to be untrue or inaccurate in any material respect on the date hereof or at the Effective Time; or |
|
(b) |
result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any Party hereunder prior to the Effective Time. |
Paramount may not exercise its rights to terminate this Agreement and Calico may not exercise its right to terminate this Agreement unless the Party intending to rely on a termination provision in this Agreement has delivered a written notice to the other Party specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for the non-fulfillment or the applicable condition or termination right, as the case may be. If any such notice is delivered, provided that a Party is proceeding diligently to cure such matter and such matter is capable of being cured, no Party may terminate this Agreement until the expiration of a period of five (5) Business Days from such notice, and then only if such matter has not been cured by such date. If such notice has been delivered prior to the making of the application for the Final Order, such application shall be postponed until the expiry of such period. For greater certainty, in the event that such matter is cured within the time period referred to herein without a Paramount Material Adverse Effect or Calico Material Adverse Effect, as the case may be, this Agreement may not be terminated as a result of the cured breach.
6. AMENDMENT, WAIVER, CLOSING AND TERMINATION
This Agreement and the Plan of Arrangement may, at any time and from time to time before the Effective Date, be amended by written agreement of the Parties hereto without, subject to applicable law, further notice to or authorization on the part of their respective shareholders. Without limiting the generality of the foregoing, any such amendment may:
|
(b) |
waive any inaccuracies or modify any representation contained herein or any document to be delivered pursuant hereto; |
|
(c) |
waive compliance with or modify any of the covenants herein contained or waive or modify performance of any of the obligations of the Parties hereto; |
|
(d) |
waive compliance with or modify any mutual conditions precedent herein contained; and/or |
6.2 This Agreement and the Schedules hereto may be amended in accordance with the Final Order, but if the terms of the Final Order require any such amendment, the rights of the Parties hereto under Sections 5.1, 5.2, 5.3, 6.1, 6.2, 6.5, 6.9 and 6.11 shall remain unaffected.
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Any Party may: (i) extend the time for the performance of any of the obligations or acts of the other Party; (ii) waive compliance, except as provided herein, with any of the other Party’s agreements or the fulfilment of any conditions to its own obligations contained herein; or (iii) waive inaccuracies in any of the other Party’s representations or warranties contained herein or in any document delivered by the other Party; provided, however , that any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such Party and, unless otherwise provided in the written waiver, will be limited to the specific breach or condition waived.
The completion of the Arrangement (the “ Closing ”) will be at the offices of Gowling WLG (Canada) LLP, 550 Burrard St, Suite 2300, Bentall 5, PO Box 30, Vancouver, BC V6C 2B5 on the second Business Day following the satisfaction, or to the extent permitted by applicable Law, waiver of the conditions set forth in Article 5 (other than those conditions that by their nature are to be satisfied at the Closing) (the “ Closing Date ”), or such other place or date as may be mutually agreed by the Parties. At the Closing, parties will exchange documents to effect the Closing including documents to confirm the matters set out in Article 5 of the Plan of Arrangement and to complete the Arrangement and related matters as contemplated hereby.
This Agreement:
|
(a) |
shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms; |
|
(b) |
may be terminated at any time prior to the Effective Time (notwithstanding Calico Shareholder Approval, Paramount Shareholder Approval, or Court approval of the Arrangement, as applicable): |
|
(C) |
Calico Shareholder Approval shall not have been obtained at the Calico Meeting in accordance with the Interim Order; or |
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Except as otherwise provided herein, all fees, costs and expenses incurred in connection with this Agreement and the Plan of Arrangement shall be paid by the Party incurring such fees, costs or expenses.
For the purposes of this Agreement:
6.8 Paramount Termination Fee Event
For the purposes of this Agreement, “ Paramount Termination Fee Event ” means the termination of this Agreement by Calico pursuant to (i) Subsection 6.5(b)(iii)(A) (but not including a termination by Calico pursuant to Subsection 6.5(b)(iii)(A) in circumstances where the Paramount Change in Recommendation resulted from the occurrence of a Calico Material Adverse Effect) prior to the Paramount Meeting.
6.9 Payment by Paramount of Paramount Termination Fee
If a Paramount Termination Fee Event occurs, Paramount shall pay the Paramount Termination Fee to Calico by wire transfer of immediately available funds within two (2) business days following such termination.
6.10 Calico Termination Fee Event
For the purposes of this Agreement, “ Calico Termination Fee Event ” means the termination of this Agreement:
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|
respect of one or more Acquisition Proposals or (B) there shall have been consummated one or more Acquisition Proposals for Calico. |
6.11 Payment by Calico of Calico Termination Fee
If a Calico Termination Fee Event occurs, Calico shall pay the Calico Termination Fee to Paramount by wire transfer of immediately available funds, as follows
|
(a) |
if the Calico Termination Fee is payable pursuant to Subsection 6.10(a), the Calico Termination Fee shall be payable within two (2) Business Days following such termination; |
|
(b) |
if the Calico Termination Fee is payable pursuant to Subsection 6.10(b), the Calico Termination Fee shall be payable prior to or concurrently with such termination; or |
Each of the Parties acknowledges that the agreements contained in this Article 6 are an integral part of the transactions contemplated in this Agreement and that, without those agreements, the Parties would not enter into this Agreement. Each Party acknowledges that all of the payment amounts set out in this Article 6 are payments of liquidated damages which are a genuine pre-estimate of the damages, which the Party entitled to such damages will suffer or incur as a result of the event giving rise to such payment and the resultant termination of this Agreement and are not penalties. Each of the Parties irrevocably waive any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. For greater certainty, each Party agrees that, upon any termination of this Agreement under circumstances where Paramount or Calico is entitled to a Fee and such Fee is paid in full, Paramount or Calico, as the case may be, shall be precluded from any other remedy against the other Party at Law or in equity or otherwise (including, without limitation, an order for specific performance), and shall not seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, against the other Party or any of its Subsidiaries or any of their respective directors, officers, employees, partners, managers, members, shareholders or affiliates or their respective representatives in connection with this Agreement or the transactions contemplated hereby, provided, however that payment by a Party of a Fee shall not be in lieu of any damages or any other payment or remedy available in the event of any wilful or intentional breach by such Party of any of its obligations under this Agreement.
Each Party will give prompt notice to the other of the occurrence, or failure to occur, at any time from the date hereof until the earlier to occur of the termination of this Agreement pursuant to its terms and the Effective Time of any event or state of facts which occurrence or failure would, or would be likely to:
|
(b) |
result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by such Party hereunder prior to the Effective Time, |
provided, however , that the delivery of any notice pursuant to this Section 6.13 shall not limit or otherwise affect the remedies available hereunder to the Party receiving that notice.
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No Party may elect not to complete the transactions contemplated hereby pursuant to the conditions set forth herein or any termination right arising therefrom under Section 6.5 and no payments are payable as a result of such termination pursuant to Section 6.9 and Section 6.11 unless, prior to the Effective Date, the Party intending to rely thereon has delivered a written notice to the other Party specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for the non-fulfillment or the applicable condition or termination right, as the case may be. If any such notice is delivered, provided that a Party is proceeding diligently to cure such matter and such matter is capable of being cured, no Party may terminate this Agreement until the expiration of a period of five (5) Business Days from such notice.
7. NON-SOLICITATION; Right to match
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|
(vi) |
Calico has previously, or concurrently will have, paid to Paramount the Paramount Termination Fee; |
and Calico further agrees that it will not withdraw, modify or qualify (or propose to withdraw, modify or qualify) in any manner adverse to Paramount the approval or recommendation of the Arrangement, nor accept, approve or recommend any Acquisition Proposal unless the requirements of this Subsections 7.1(e)(i) through 7.1(e)(vi) have been satisfied.
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|
delivery of a Force the Vote Notice, the Calico Meeting shall be held in accordance with this Agreement regardless of whether any Calico Change in Recommendation has occurred. |
|
(j) |
Calico acknowledges and agrees that each successive modification of any Acquisition Proposal shall constitute a new Acquisition Proposal for the purposes of this Section 7.1. |
7.2 Access to Information; Confidentiality
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(a) |
From the date hereof until the earlier of the Effective Time and the termination of this Agreement, subject to compliance with applicable Laws and the terms of any existing Contracts, Calico shall, and shall cause its officers, directors, employees, independent auditors, accounting advisers and agents to, afford to Paramount and to the officers, employees, agents and representatives of Paramount such access as Paramount may reasonably require at all reasonable times, including for the purpose of facilitating integration business planning, to their officers, employees, agents, properties, books, records and Contracts, and shall furnish Paramount with all data and information as Paramount may reasonably request. |
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7.3 Insurance and Indemnification
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(a) |
Paramount will, or will cause Calico to, maintain in effect without any reduction in scope or coverage for six years from the Effective Date customary policies of directors’ and officers’ liability insurance providing protection no less favourable to the protection provided by the policies maintained by Calico which are in effect immediately prior to the Effective Date and providing protection in respect of claims arising from facts or events which occurred on or prior to the Effective Date; provided, however , that Paramount acknowledges and agrees that prior to the Effective Date, Calico may, in the alternative, purchase prepaid non-cancellable run off directors’ and officers’ liability insurance for a period of six (6) years from the Effective Date with the prior written consent of Paramount. |
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(b) |
Paramount agrees that it shall directly honour all rights to indemnification or exculpation now existing in favour of present and former officers and directors of Calico and acknowledges that such rights shall survive the completion of the Plan of Arrangement and shall continue in full force and effect. |
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(c) |
The provisions of this Section 7.3 are intended for the benefit of, and shall be enforceable by, each insured or indemnified person, his or her heirs and his or her legal representatives and, for such purpose, Calico hereby confirms that it is acting as agent and trustee on their behalf. |
This Agreement shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms.
8.2 Survival of Representations and Warranties
The representations and warranties contained in Article 3 shall survive the execution and delivery of this Agreement and shall expire and be terminated and extinguished on the earlier of the Effective Date and the date on which this Agreement is terminated in accordance with its terms. Any investigation by Paramount and its advisors shall not mitigate, diminish or affect the representations and warranties of Calico contained in this Agreement. Any investigation by Calico and its advisors shall not mitigate, diminish or affect the representations and warranties of Paramount contained in this Agreement.
8.3 Public Disclosure
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(c) |
All such information in written form and documents will be returned to the party originally delivering them in the event that the transactions provided for in this Agreement are not completed. |
8.4 Time of the Essence
Time is of the essence under this Agreement.
Each Party hereto will, from time to time, at the request of the other Parties, do such further acts and execute and deliver all such further documents, agreements and instruments as will be reasonably required in order to fully perform and carry out the terms, conditions and intent of this Agreement.
This Agreement, together with the agreements and other documents herein or therein referred to (for greater certainty, including the Paramount Disclosure Letter and Calico Disclosure Letter), constitute the entire agreement and understanding between the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, between the Parties with respect to the subject matter hereof. There are no representations, warranties, covenants or conditions with respect to the subject matter hereof except as contained herein. The Parties intend that this Agreement will be binding upon them until terminated.
Any notice, consent, waiver, direction or other communication required or permitted to be given under this Agreement by a Party shall be in writing and shall be delivered by hand to the Party to which the notice is to be given at the following address or sent by facsimile to the following numbers or to such other address or facsimile number as shall be specified by a Party by like notice:
Paramount Gold Nevada Corp.
665 Anderson Street,
Winnemucca, Nevada 89445
Attention: Carlo Buffone, Chief Financial Officer
Email:
carlo@paramountnevada.com
with a copy to:
LeClairRyan
One Riverfront Plaza
- 53 -
1037 Raymond Boulevard, 16th Floor
Newark, New Jersey 07102
United States of America
Attention: James T. Seery, Esq.
Facsimile: (973) 491-3555
Email: James.seery@leclairryan.com
and with a copy to:
Gowling WLG (Canada) LLP
550 Burrard Street, Suite 2300
Vancouver, British Columbia
Canada V6C 2B5
Attention: Brett Kagetsu
Facsimile: (604) 683-3558
Email:
brett.kagetsu@gowlingwlg.com
Calico Resources Corp.
2300-1066 West Hastings Street
Vancouver, British Columbia, V6E 3X3
Canada
Attention: Paul Parisotto, President and Chief Executive Officer
Facsimile: (604) 684-0279
Email:
pparisotto@coniston.ca
with a copy (which shall not constitute notice) to:
Bennett Jones LLP
3400 One First Canadian Place, P.O. Box 130
Toronto, Ontario, M5X 1A4
Canada
Attention: Sander A.J.R. Grieve
Facsimile: (416) 863-1716
Email:
grieves@bennettjones.com
and any such notice delivered on a Business Day in accordance with the foregoing will be deemed to have been received on the date of delivery or facsimile transmission.
- 54 -
This Agreement and the rights and obligations of the Parties hereunder will be governed by and construed according to the Laws of the Province of British Columbia, except that matters regarding the Paramount Shares shall be governed by the laws of the United States of America and the State of Nevada. Each of the Parties hereby irrevocably attorns to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of all matters arising under and in relation to this Agreement and Arrangement. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
This Agreement shall enure to the benefit of the Parties and their respective successors and permitted assigns and shall be binding upon the Parties and their respective successors. This Agreement may not be assigned by any Parties without the prior written consent of the other Party.
8.10 Execution in Counterparts
This Agreement may be executed in any number of counterparts with the same effect as if all parties had signed the same document. All of these counterparts will for all purposes constitute one agreement, binding on the Parties, notwithstanding that all Parties are not signatories to the same counterpart. A facsimile transcribed copy, pdf or photocopy of this Agreement executed by a party in counterpart or otherwise will constitute a properly executed, delivered and binding agreement or counterpart of the executing party.
[Remainder of page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the year and day set forth above.
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PARAMOUNT GOLD NEVADA CORP. |
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By: |
/s/ Glen Van Treek |
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Name: |
Glen Van Treek |
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Title: |
Chief Executive Officer |
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CALICO RESOURCES CORP. |
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By: |
/s/ Paul Parisotto |
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Name: |
Paul Parisotto |
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Title: |
President and Chief Executive Officer |
(Signature Page – Arrangement Agreement)
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Schedule A
PLAN OF ARRANGEMENT
UNDER SECTION 288 OF THE
BUSINESS CORPORATIONS ACT
(BRITISH COLUMBIA)
Article 1
DEFINITIONS AND INTERPRETATION
In this Plan of Arrangement:
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(a) |
“ Arrangement ” means the arrangement pursuant to Division 5 of Part 9 of the Business Corporations Act, on the terms and conditions set forth in this Plan of Arrangement, subject to any amendment or supplement made in accordance with the Arrangement Agreement, this Plan of Arrangement or at the direction of the Court in the Final Order; |
|
(b) |
“ Arrangement Agreement ” means the arrangement agreement dated as of March [14] , 2016 between Paramount and Calico, including the schedules attached thereto, as the same may be supplemented or amended from time to time; |
|
(c) |
“ Arrangement Resolution ” means the special resolution to be considered by the Calico Shareholders approving the Arrangement substantially in the form and content set out in Schedule B to the Arrangement Agreement; |
|
(d) |
“ Business Corporations Act ” means the Business Corporations Act (British Columbia), S.B.C. 2002, c. 57, as amended; |
|
(e) |
“ Business Day ” means any day which is not a Saturday, Sunday or a day on which banks are not open for business in Vancouver, British Columbia; |
|
(f) |
“ Court ” means the Supreme Court of British Columbia; |
|
(g) |
“ Depositary ” means Computershare Investor Services Inc., in its capacity as depositary for the Calico Shares under the Arrangement; |
|
(h) |
“ Dissent Procedures ” means the procedures set forth in Division 2 of Part 8 of the Business Corporations Act required to be taken by a registered holder of Calico Shares to exercise the right of dissent in respect of such Calico Shares in connection with the Arrangement, as modified by Article 6, the Interim Order and the Final Order; |
|
(i) |
“ Dissent Rights ” means the rights of dissent in respect of the Arrangement described in Article 4; |
|
(j) |
“ Dissenting Shareholder ” means a registered Calico Shareholder who validly exercises his, her or its Dissent Rights in strict compliance with the requirements of Article 4 and the Interim Order and who has not withdrawn or have been deemed to have withdrawn such exercise of such Dissent Rights; |
|
(k) |
“ Effective Date ” means the date that is five Business Days after the last of the conditions precedent to the completion of the Arrangement contained in Section [5] of the Arrangement Agreement has been satisfied or waived (other than those conditions which cannot, by their terms, be satisfied until the Effective Date, but subject to satisfaction or waiver of such conditions as of the Effective Date) or such earlier or later date as is agreed to in writing by Paramount and Calico; |
A-1
|
(m) |
“ Final Order ” means the final order of the Court approving the Arrangement as such order may be amended by the Court at any time prior to the Effective Date (with the consent of the parties, acting reasonably) or, if appealed then, unless such appeal is withdrawn or denied, as affirmed or amended on appeal; |
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(n) |
“ Interim Order ” means the interim court order of the Court providing for, among other things, the calling and holding of the Calico Meeting, as the same may be amended, supplemented or varied by the Court (with the consent of the parties, acting reasonably); |
|
(o) |
“ Letter of Transmittal ” means, as the context requires, either a form of letter of transmittal sent or caused to be sent by Calico to the Calico Shareholders providing for the delivery of certificates representing their Calico Shares to the Depositary, or an executed letter of transmittal substantially in such form; |
|
(p) |
“ Paramount ” means Paramount Gold Nevada Corp.; |
|
(q) |
“ Paramount Shares ” means the shares of common stock with par value of US$0.01 each in the capital of Paramount; |
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(r) |
“ parties ” means Paramount and Calico, and “ party ” means either of them; |
|
(s) |
“ Plan of Arrangement ” means this plan of arrangement as amended and supplemented from time to time in accordance with Article 6 herewith (with the consent of Paramount and Calico, acting reasonably), the Arrangement Agreement or made at the direction of the Court; |
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(t) |
“ Calico ” means Calico Resources Corp.; |
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(u) |
“ Calico Circular ” means the management information circular of Calico, including all schedules, appendices and exhibits attached thereto, and the notice of meeting and proxy form to be sent by Calico to the Calico Shareholders soliciting their approval of the Arrangement Resolution, including any amendments or supplements thereto; |
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(v) |
“ Calico Meeting ” means the special meeting of Calico Shareholders and any adjournment or postponement thereof to be held in accordance with the Interim Order to consider and, if deemed advisable, pass the Arrangement Resolution; |
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(w) |
“ Calico Options ” means options to purchase Calico Shares; |
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(x) |
“ Calico Shareholder ” means at any time a registered holder at that time of Calico Shares; |
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(y) |
“ Calico Shares ” means the common shares in the authorized share structure of Calico; |
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(z) |
“ Calico Warrants ” means warrants to purchase Calico Shares; |
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(aa) |
“ Registrar ” means the Registrar of Companies appointed under Section 400 of the Business Corporations Act; |
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(bb) |
“ Share Exchange Ratio ” has the meaning given to it in Section 3.1(b); and |
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(cc) |
“ Tax Act ” means the Income Tax Act (Canada), as amended. |
- 2 -
The division of this Plan of Arrangement into Articles and Sections and the insertion of headings are for convenience of reference only and do not affect the construction or interpretation of this Plan of Arrangement. Unless otherwise specified, references to sections are to sections of this Plan of Arrangement.
Unless the context otherwise requires, words importing the singular number only will include the plural and vice versa; words importing the use of any gender will include all genders; and words importing persons will include firms and corporations and vice versa.
In the event that any date on which any action is required to be taken hereunder by any of the parties is not a Business Day, such action will be required to be taken on the next succeeding Business Day.
Any reference in this Plan of Arrangement to a statute includes all regulations and rules made thereunder, all amendments to such statute or regulation in force from time to time and any statute or regulation that supplements or supersedes such statute or regulation.
Article 2
ARRANGEMENT AGREEMENT
This Plan of Arrangement is made pursuant to and is subject to the provisions of the Arrangement Agreement, provided, however, that in the event of any inconsistency between this Plan of Arrangement and the Arrangement Agreement, the provisions of this Plan of Arrangement will prevail. At the Effective Time, without any further act or formality, the Arrangement will be binding upon Paramount, Calico and the Calico Shareholders.
Commencing at the Effective Time, the following will occur and will be deemed to occur in the following sequence without any further authorization, act or formality by Paramount, Calico, Calico Shareholders or any other person:
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(i) |
such Dissenting Shareholder will cease to be the holder of such Calico Share at the Effective Time and such Dissenting Shareholder’s name will be removed from the |
- 3 -
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central securities register of Calico in respect of such Calico Share as of the Effective Time; and |
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(ii) |
Paramount will be deemed to be the transferee of such Calico Share (free from any claim, lien or encumbrance) as of the Effective Time and Paramount’s name will be entered in the central securities register of Calico as the holder thereof; |
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(i) |
the holder of such Calico Share will cease to be the holder thereof at the Effective Time concurrently with the exchange referred to in this Section 3.1(b) and such holder’s name will be removed from the central securities register of Calico in respect of such Calico Share as of the Effective Time; |
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(ii) |
Paramount will be deemed to be the transferee of such Calico Share (free from any claim, lien or encumbrance) as of the Effective Time and Paramount’s name will be entered in the central securities register of Calico as the holder thereof; and |
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(iii) |
Paramount will issue to the holder of such Calico Share 0.07 of a Paramount Share as the sole consideration therefor and the [shareholder register] of Paramount will be revised accordingly; and |
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(c) |
all Calico Options and Calico Warrants will be terminated and cancelled as of the Effective Time with no consideration payable therefor, and each holder of Calico Options or Calico Warrants will cease to have any rights as a holder of Calico Options or Calico Warrants. |
If the aggregate number of Paramount Shares to which a Calico Shareholder would otherwise be entitled under the Arrangement would include a fractional Paramount Share, then the number of Paramount Shares that such Calico Shareholder is entitled to receive will be rounded down to the next whole number and such Calico Shareholder will not receive cash or any other compensation in lieu of such fractional Paramount Share.
Each Calico Shareholder may exercise rights of dissent (the “ Dissent Right ”) with respect to the Calico Shares held by it pursuant to and in the manner set forth in the Interim Order and Section 238 of the Business Corporations Act, provided that written notice of dissent contemplated by section 242 of the Business Corporations Act must be received by Calico no later than 5:00 p.m. (Vancouver time) on the Business Day that is two Business Days before the Calico Meeting or any date to which the Calico Meeting may be postponed or adjourned. Dissenting Shareholders who:
- 4 -
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Shares, free of any claims, liens, or encumbrances, to Paramount in accordance with Section 3.1(a) and will be paid by Paramount an amount in cash equal to such fair value; or |
|
(b) |
are ultimately not entitled, for any reason, to be paid by Paramount the fair value for their Calico Shares in respect of which they duly exercised Dissent Rights will be deemed to have participated in the Arrangement in respect of those Calico Shares on the same basis as a non-dissenting Calico Shareholder, as the case may be, and will be entitled to receive only the Paramount Shares that such non-dissenting Calico Shareholder is entitled to receive on the basis set forth in Section 3.1(b) and, for greater certainty, will be considered to have exchanged such Calico Shares for Paramount Shares pursuant to, and at the same time as Calico Shares were exchanged pursuant to Section 3.1(b). |
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(a) |
In no event will Paramount, Calico or any other person be required to recognize a Dissenting Shareholder as a registered or beneficial owner of Calico Shares at or after the Effective Time, and at the Effective Time the names of such Dissenting Shareholders will be deleted from the central securities register of Calico as at the Effective Time. |
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(b) |
For greater certainty, in addition to any other restrictions in the Interim Order, no person will be entitled to exercise Dissent Rights with respect to Calico Shares in respect of which a person has voted in favour of the Arrangement. |
Article 5
DELIVERY OF PARAMOUNT CERTIFICATES
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(b) |
Calico will cause the Letter of Transmittal to be sent to each Calico Shareholder prior to the Calico Meeting. |
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(c) |
Any deposit of a Letter of Transmittal and accompanying certificates, or other documentation as provided in the Letter of Transmittal, may be made at any of the offices of the Depositary specified in the Letter of Transmittal. |
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(i) |
forward or cause to be forwarded by first class mail (postage prepaid) to the former Calico Shareholder at the address specified in the Letter of Transmittal; or |
|
(ii) |
if requested by the former Calico Shareholder in the Letter of Transmittal, to make available at the Depositary for pick‑up by the former Calico Shareholder; or |
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(iii) |
if the Letter of Transmittal neither specifies an address nor contains a request as described in (ii), to forward or cause to be forwarded by first class mail (postage prepaid) to the former Calico Shareholder at the address of such holder as shown on the central securities register maintained by or on behalf of Calico, |
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certificates representing the number of Paramount Shares issuable to such former Calico Shareholder as determined in accordance with the provisions hereof. Such certificates will be deemed to have been delivered to such former Calico Shareholder at the time such certificates are forwarded or made available for pick-up in accordance with this Section 5.1(d).
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(f) |
After the Effective Date, any certificate formerly representing Calico Shares will represent only the right to receive Paramount Shares pursuant to Section 3.1 or to be paid the fair value for the Calico Shares pursuant to Section 4.1 and any dividends or other distributions to which the former Calico Shareholder is entitled under Section 5.1(e) and any such certificate formerly representing Calico Shares not duly surrendered on or prior to the sixth anniversary of the Effective Date will cease to represent a claim or interest of any kind or nature (including a right to receive Paramount Shares pursuant to Section 3.1, a right to be paid the fair value for the Calico Shares pursuant to Section 4.1, or a claim for dividends or other distributions under Section 5.1(e)) against Paramount or Calico by a former Calico Shareholder. On such date, all Paramount Shares to which the holder of such certificates or any former Calico Shareholder was entitled will be deemed to have been surrendered to Paramount for cancellation without compensation therefor. |
Calico, Paramount and the Depositary will be entitled to deduct and withhold from any consideration deliverable or otherwise payable to any Calico Shareholder such amounts as Calico, Paramount or the Depositary is required or permitted to deduct or withhold with respect to such consideration under the Tax Act or any provision of any applicable federal, provincial, state, local or foreign tax law or treaty, in each case, as amended. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts will be treated for all purposes hereof as having been paid to the Calico Shareholder in respect of which such deduction and withholding was made, provided that such deducted or withheld amounts are actually remitted to the appropriate taxing authority. The Depositary is authorized, as agent for the Calico Shareholders, to sell such portion of the Paramount Shares otherwise deliverable to applicable Calico Shareholders as is necessary to provide sufficient funds to Paramount, Calico or the Depositary, as the case may be, to enable them to comply with such deduction or withholding requirement (after deducting commission, other reasonable expenses incurred in connection with the sale, and any applicable taxes), and Paramount, Calico or the Depositary will notify the applicable Calico Shareholder and remit any unapplied consideration including any unapplied balance of the net proceeds of such sale.
If any certificate which prior to the Effective Date represented outstanding Calico Shares which were exchanged pursuant to Section 3.1 has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such certificate to be lost, stolen or destroyed, the Depositary will issue in exchange for such lost, stolen or destroyed certificate, certificates representing Paramount Shares deliverable in respect thereof, if any, as determined in accordance with Section 3.1. When seeking such certificate in exchange for any lost, stolen or destroyed certificate, the person to whom certificates representing Paramount Shares are to be issued will, as
- 6 -
a condition precedent to the issuance thereof, give a bond satisfactory to Paramount and its transfer agent, in such sum as Paramount may direct or otherwise indemnify Paramount and its transfer agent in a manner satisfactory to Paramount and its transfer agent against any claim that may be made against Paramount or its transfer agent with respect to the certificate alleged to have been lost, stolen or destroyed.
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(a) |
Calico and Paramount reserve the right to amend, modify and/or supplement this Plan of Arrangement at any time and from time to time on or before the Effective Date, provided that any amendment, modification or supplement must be contained in a written document which is filed with the Court and, if made following the Calico Meeting, approved by the Court and communicated to Calico Shareholders in the manner required by the Court (if so required). |
|
(b) |
Any amendment, modification or supplement to this Plan of Arrangement may be proposed by Calico and Paramount, jointly, at any time prior to or at the Calico Meeting with or without any other prior notice or communication and, if so proposed and accepted by the persons voting at the Calico Meeting (subject to the requirements of the Interim Order), will become part of this Plan of Arrangement for all purposes. |
|
(c) |
Any amendment, modification or supplement to this Plan of Arrangement which is approved by the Court following the Calico Meeting will be effective only if (i) it is consented to by each of Calico and Paramount (acting reasonably) and (ii) if required by the Court, is consented to by the Calico Shareholders voting in the manner directed by the Court. |
|
(d) |
Any amendment, modification or supplement to this Plan of Arrangement may be made following the Effective Date unilaterally by Paramount, provided that it concerns a matter which, in the reasonable opinion of Paramount, is of an administrative nature for the purpose of better giving effect to the implementation of this Plan of Arrangement and is not adverse to the financial or economic interests of any former Calico Shareholder. |
6.2 |
Termination |
This Plan of Arrangement may be withdrawn prior to the Effective Time in accordance with the terms of the Arrangement Agreement.
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Schedule B
ARRANGEMENT RESOLUTION
BE IT RESOLVED BY SPECIAL RESOLUTION THAT:
1. The arrangement (the “ Arrangement ”) under the provisions of Division 5 of Part 9 of the Business Corporations Act (British Columbia) (the “ BCBCA ”) involving Calico Resources Corp. (“ Calico ”), pursuant to the arrangement agreement (the “ Arrangement Agreement ”) between Calico and Paramount Gold Nevada Corp. (“ Paramount ”) dated March 14, 2016, all as more particularly described and to be set forth in the management information circular of Calico (the “ Circular ”) accompanied by the notice of the meeting (as the Arrangement may be modified or amended in accordance with its terms), is hereby authorized, approved and adopted.
2. The plan of arrangement, as it has been or may be modified or amended in accordance with the Arrangement Agreement and its terms, involving Calico (the “ Plan of Arrangement ”), the full text of which is set out as Schedule A to the Arrangement Agreement, is hereby authorized, approved and adopted.
3. The Arrangement Agreement, the actions of the directors of Calico in approving the Arrangement, and the actions of the officers of Calico in executing and delivering the Arrangement Agreement, and any modifications or amendments thereto are hereby ratified and approved.
4. Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the Calico Shareholders (as defined in the Arrangement Agreement) or that the Arrangement has been approved by the Supreme Court of British Columbia (the “ Court ”), the directors of Calico are hereby authorized and empowered, at their discretion, without further notice to or approval of the Calico Shareholders: (i) to amend or modify the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the Arrangement Agreement; and (ii) subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement.
5. Any officer or director of Calico is hereby authorized and directed for and on behalf of Calico to make an application to the Court for an order approving the Arrangement and to execute, under the corporate seal of Calico or otherwise, and to deliver or cause to be delivered, such other documents as are necessary or desirable to give effect to the Arrangement and the Plan of Arrangement in accordance with the Arrangement Agreement, such determination to be conclusively evidenced by the execution and delivery of such articles of arrangement and any such other documents.
6. Any officer or director of Calico is hereby authorized and directed for and on behalf of Calico to execute or cause to be executed and to deliver or cause to be delivered, all such other documents and instruments and to perform or cause to be performed all such other acts and things as, in such person’s opinion, may be necessary or desirable to give full force and effect to the foregoing resolutions and the matters authorized thereby, such determination to be conclusively evidenced by the execution and delivery of such other document or instrument or the doing of any other such act or thing.
B-1
Schedule C
SHARE ISSUANCE RESOLUTION
WHEREAS Paramount Gold Nevada Corp. (“ Paramount ”) has entered into an arrangement agreement dated March 14, 2016 (the “ Arrangement Agreement ”) with Calico Resources Corp. (“ Calico ”) to complete a transaction (the “ Arrangement ”) pursuant to a plan of arrangement (the “ Plan of Arrangement ”) whereby Paramount would acquire all of the issued and outstanding common shares of Calico (the “ Calico Shares ”) in exchange for common shares of Paramount (“ Paramount Shares ”) on the basis of 0.07 of an Paramount Share (the “ Arrangement Consideration ”) for each Calico Share, and whereby all of the outstanding options and warrants to acquire Calico Shares not exercised by the holder thereof prior to the effective time of the Plan of Arrangement would be cancelled on the terms and conditions set out in the Plan of Arrangement, all as will be more fully described in the management information circular of Paramount (the “ Circular ”);
AND WHEREAS Paramount, in accordance with the rules of the NYSE MKT, wishes to obtain the requisite shareholder approval of the issuance of the Paramount Shares comprising the Arrangement Consideration to be issued in connection with the Arrangement;
NOW THEREFORE BE IT RESOLVED BY ORDINARY RESOLUTION THAT:
F-1
Schedule D
Paramount Properties
G-1
Exhibit 10.1
VOTING AND SUPPORT AGREEMENT
VOTING AND SUPPORT AGREEMENT, dated as of March 14, 2016 (this “ Agreement ”), among Paramount Gold Nevada Corp., a Nevada corporation (“ Paramount ”), and each of the stockholders of Calico Resources Corp., a British Columbia corporation (the “ Company ”), listed on Schedule A hereto (each, a “ Stockholder ” and, collectively, the “ Stockholders ”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Arrangement Agreement (as defined below).
RECITALS
WHEREAS, concurrently herewith, Paramount and the Company are entering into an Arrangement Agreement and Plan of Arrangement (the “ Arrangement Agreement ”) pursuant to which Paramount will acquire all of the issued and outstanding common shares of the Company in exchange for the issuance and payment of shares of common stock of Paramount, on the terms and subject to the conditions set forth therein (the “ Share Exchange ”);
WHEREAS, each Stockholder is the record or beneficial owner of shares of common stock of the Company (“ Shares ”) as set forth on Schedule A hereto (with respect to each Stockholder, the Shares listed on Schedule A, together with any additional Shares or other voting securities of the Company of which such Stockholder has as of the date hereof or acquires after the date hereof record or beneficial ownership, including by purchase, as a result of a stock dividend, stock split, recapitalization, combination, reclassification or exchange, upon exercise or conversion of any options, warrants or other securities, or otherwise, such Stockholder’s “ Covered Shares ”);
WHEREAS, as a condition and inducement to Paramount’s willingness to enter into the Arrangement Agreement and to proceed with the transactions contemplated thereby, including the Share Exchange, Paramount and the Stockholders are entering into this Agreement; and
WHEREAS, the Stockholders acknowledge that Paramount is entering into the Arrangement Agreement in reliance on the representations, warranties, covenants and other agreements of the Stockholders set forth in this Agreement and would not enter into the Arrangement Agreement if any Stockholder did not enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Paramount and the Stockholders hereby agree as follows:
AGREEMENT
1. Agreement to Vote. Prior to the Termination Date (as defined below), each Stockholder irrevocably and unconditionally agrees that it shall at any meeting of the stockholders of the Company (whether annual, special or otherwise and whether or not an adjourned or postponed meeting), however called, or in connection with any written consent of stockholders of the Company, however proposed (a) when a meeting is held, appear at such meeting or otherwise cause its Covered Shares to be counted as present thereat for the purpose of establishing a quorum, and if a written consent is proposed, respond to each request by the Company for written consent, and (b) vote (or consent), or provide instructions to the designated proxyholder of the Company's management to vote at such meeting (or validly execute
1
and return and cause such consent to be granted with respect to), all Covered Shares (i) in favor of the Share Exchange, the adoption of the Arrangement Agreement and any other matters necessary for consummation of the Share Exchange and the other transactions contemplated by the Arrangement Agreement and any other action reasonably requested by Paramount in furtherance thereof, and (ii) against (A) any Acquisition Proposal (as defined in the Arrangement Agreement), (B) any proposal for any recapitalization, reorganization, liquidation, dissolution, amalgamation, merger, sale of assets or other business combination between the Company and any other Person (other than the Share Exchange), (C) any other action that would reasonably be expected to impede, interfere with, delay, postpone or adversely affect the Share Exchange or any of the transactions contemplated by the Arrangement Agreement or this Agreement or any action or transaction that would result in a breach of any covenant, representation or warranty or other obligation or agreement of the Company or any of its Subsidiaries contained in the Arrangement Agreement, or of the Stockholder contained in this Agreement, (D) any change in the present capitalization or dividend policy of the Company or any amendment or other change to the Company’s certificate of incorporation or bylaws, except if approved by Paramount and (E) any other change in the Company’s corporate structure or business.
2. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby grants to, and appoints, Paramount, the executive officers of Paramount, and any other designee of Paramount, each of them individually, such Stockholder’s proxy and attorney-in-fact (with full power of substitution) to vote or cause to be voted (including by proxy or written consent, if applicable) the Covered Shares as indicated in Section 1 . This proxy is coupled with an interest and shall be irrevocable, and each Stockholder will take such further action or execute such other instruments as may be necessary to effectuate the intent of this proxy and hereby revokes any proxy previously granted by such Stockholder with respect to its Covered Shares. Paramount may terminate this proxy with respect to the Stockholder at any time at its sole election by written notice provided to the Stockholder.
(b) The proxy granted in this Section 2 shall terminate and be of no further force and effect on the Termination Date.
3. No Inconsistent Agreements. Each Stockholder hereby represents, covenants and agrees that, except as contemplated by this Agreement, such Stockholder (a) has not entered into, and shall not enter into at any time prior to the Termination Date, any voting agreement, voting trust or other agreement that directly or indirectly addresses voting with respect to any Covered Shares and (b) has not granted, and shall not grant at any time prior to the Termination Date, a proxy or power of attorney with respect to any Covered Shares, in either case, which is inconsistent with such Stockholder’s obligations pursuant to this Agreement.
4. Termination . This Agreement shall terminate upon the earliest of (a) the Effective Time (as defined in the Arrangement Agreement), (b) the date that the Arrangement Agreement is terminated in accordance with its terms and (c) written notice of termination of this Agreement by Paramount to the Stockholders (such earliest date, the “ Termination Date ”); provided, that the provisions set forth in Sections 10 and 24 shall survive the termination of this Agreement; provided further, that any liability incurred by any party hereto as a result of a breach of a term or condition of this Agreement prior to such termination shall survive the termination of this Agreement.
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5. Representations and Warranties of Stockholders . Each Stockholder, as to itself (severally and not jointly), hereby represents and warrants, to the best of its knowledge, to Paramount as follows:
(a) Schedule A lists all Shares owned of record or beneficially by such Stockholder, designating any such Shares that are restricted or otherwise subject to vesting requirements. Schedule A lists all options, warrants and other securities convertible into or exercisable or exchangeable for Shares owned of record or beneficially by such Stockholder. Except as set forth on Schedule A , such Stockholder does not own of record or beneficially any voting securities in the Company or any securities convertible into or exercisable or exchangeable for any such voting securities. Such Stockholder does not own of record any Shares which are beneficially owned by a third Person.
(b) Such Stockholder is the record or beneficial owner of all Covered Shares of such Stockholder. Such Stockholder has sole voting power, sole power of disposition and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Covered Shares, with no limitations, qualifications or restrictions on such rights. Such Covered Shares are not subject to any voting trust agreement or other Contract to which such Stockholder is a party restricting or otherwise relating to the voting or Transfer (as defined below) of such Covered Shares. Such Stockholder has not appointed or granted any proxy or power of attorney that is still in effect with respect to such Covered Shares, except as contemplated by this Agreement.
(c) Each such Stockholder which is an entity is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; each such Stockholder who is a natural person has full legal power and capacity to execute and deliver this Agreement and to perform such Stockholder’s obligations hereunder. The execution, delivery and performance of this Agreement by each such Stockholder which is an entity, the performance by such Stockholder of its obligations hereunder have been duly and validly authorized by such Stockholder and no other actions or proceedings on the part of such Stockholder are necessary to authorize the execution and delivery by such Stockholder of this Agreement, the performance by such Stockholder of its obligations hereunder on a timely basis. This Agreement has been duly and validly executed and delivered by such Stockholder and, assuming due authorization, execution and delivery by Paramount, constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). If such Stockholder is married, and any of the Covered Shares of such Stockholder constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by such Stockholder’s spouse and, assuming due authorization, execution and delivery by Paramount, constitutes a legal, valid and binding obligation of such Stockholder’s spouse, enforceable against such Stockholder’s spouse in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).
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(d) Except for the applicable requirements of the U.S. Exchange Act, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Entity is necessary on the part of such Stockholder for the execution, delivery and performance of this Agreement by such Stockholder and (ii) neither the execution, delivery or performance of this Agreement by such Stockholder nor compliance by such Stockholder with any of the provisions hereof shall (A) conflict with or violate, any provision of the organizational documents of any such Stockholder which is an entity, (B) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of such Stockholder pursuant to, any contract to which such Stockholder is a party or by which such Stockholder or any property or asset of such Stockholder is bound or affected or (C) violate any order, writ, injunction, decree, statute, law, rule or regulation applicable to such Stockholder or any of such Stockholder’s properties or assets except, in the case of clause (B) or (C), for breaches, violations or defaults that would not, individually or in the aggregate, materially impair the ability of such Stockholder to perform its obligations hereunder on a timely basis.
(e) There is no action, suit, claim, arbitration, investigation, complaint, inquiry or other proceeding pending against any such Stockholder or, to the knowledge of such Stockholder, any other Person or, to the knowledge of such Stockholder, threatened against any Stockholder or any other Person that restricts or prohibits (or, if successful, would restrict or prohibit) the exercise by Paramount of its rights under this Agreement or the performance by any party of its obligations under this Agreement on a timely basis.
(f) Except as provided in the Arrangement Agreement, no broker, finder, financial advisor or investment banker is entitled to any brokerage, finder’s, financial advisor’s or other fee or commission in connection with the transactions contemplated by the Arrangement Agreement or this Agreement based upon arrangements made by or on behalf of such Stockholder.
(g) Such Stockholder understands and acknowledges that Paramount is entering into the Arrangement Agreement in reliance upon such Stockholder’s execution and delivery of this Agreement and the representations and warranties and covenants of such Stockholder contained herein and would not enter into the Arrangement Agreement if such Stockholder did not enter into this Agreement.
6. Certain Covenants of Stockholder . Each Stockholder, for itself (severally and not jointly), hereby covenants and agrees as follows:
(a) Such Stockholder shall not, and shall not authorize or permit any of its Subsidiaries or Affiliates or its or their Representatives, directly or indirectly, to:
(i) solicit, initiate, endorse, encourage or facilitate any inquiry, proposal or offer with respect to, or the making or completion of, any Acquisition Proposal, or any inquiry, proposal or offer that is reasonably likely to lead to any Acquisition Proposal;
(ii) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person any information or data with respect to, or otherwise cooperate in any way with, any Acquisition Proposal;
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(iii) enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement, binding term sheet or other Contract constituting or related to, or which is intended to or is reasonably likely to lead to, any Acquisition Proposal;
(iv) approve or recommend or propose to approve or recommend any Acquisition Proposal or any Contract constituting or relating to any Acquisition Proposal to the Company or any third Person;
(v) make, or in any manner participate in, a solicitation of proxies or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of Shares (other than in favor of the Share Exchange), or seek to cause stockholders of the Company not to vote to approve the Share Exchange or any other transaction contemplated by the Arrangement Agreement; or
(vi) resolve, agree or propose to do any of the foregoing.
(b) Such Stockholder will immediately cease and cause to be terminated all existing discussions or negotiations (if any) with any Person conducted heretofore with respect to any of the matters described in paragraph (a) above.
(c) Such Stockholder shall promptly (and in any event within 24 hours of receipt) advise Paramount in writing in the event such Stockholder receives (i) any indication by any Person that it is considering making an Acquisition Proposal, (ii) any inquiry or request for information, discussion or negotiation that is reasonably likely to lead to or that contemplates an Acquisition Proposal or (iii) any proposal or offer that is or is reasonably likely to lead to an Acquisition Proposal, in each case together with a description of the material terms and conditions of and facts surrounding any such indication, inquiry, request, proposal or offer, the identity of the Person making any such indication, inquiry, request, proposal or offer, and a copy of any written agreement or other materials provided by such Person. Such Stockholder shall keep Paramount informed (orally and in writing) in all material respects on a timely basis of the status and details (including, within 24 hours after the occurrence of any amendment, modification, development, discussion or negotiation) of any such indication, inquiry, request, proposal or offer, including furnishing copies of any written inquiries, correspondence and draft documentation, and written summaries of any material oral inquiries or discussions.
(d) Except as contemplated hereby, such Stockholder shall not (i) tender into any tender or exchange offer, (ii) sell (constructively or otherwise), transfer, pledge, hypothecate, grant, gift, encumber, assign or otherwise dispose of (collectively “ Transfer ”), or enter into any Contract with respect to the Transfer of any of the Covered Shares or beneficial ownership or voting power thereof or therein (including by operation of law), (iii) grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting agreement with respect to any Covered Shares, or (iv) take any action that would make any representation or warranty of such Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling such Stockholder from performing its obligations under this Agreement. Any Transfer in violation of this provision shall be void.
(e) In the event that such Stockholder acquires record or beneficial ownership of, or the power to vote or direct the voting of, any additional Shares or other voting interests with respect to the
5
Company, such Shares or voting interests shall, without further action of the parties, be deemed Covered Shares and subject to the provisions of this Agreement, and the number of Shares held by such Stockholder set forth on Schedule A hereto will be deemed amended accordingly and such Shares or voting interests shall automatically become subject to the terms of this Agreement. Each Stockholder shall promptly notify Paramount and the Company of any such event.
7. Stockholder Capacity. This Agreement is being entered into by each Stockholder solely in its capacity as a stockholder of the Company, and nothing in this Agreement shall restrict or limit the ability of any Stockholder who is also a director or officer of the Company to take any action in his or her capacity as a director or officer of the Company except for actions specifically prohibited in the Arrangement Agreement.
8. Disclosure . Each Stockholder hereby authorizes Paramount and the Company to publish and disclose in any announcement or disclosure required by Law, the Securities and Exchange Commission or in the Proxy Statement such Stockholder’s identity and ownership of the Covered Shares and the nature of such Stockholder’s obligations under this Agreement, and to disclose a copy of this Agreement.
9. Further Assurances . From time to time, at the request of Paramount and without further consideration, each Stockholder shall take such further action as may reasonably be deemed by Paramount to be necessary or desirable to consummate and make effective the obligations of each Stockholder under this Agreement.
10. Amendment or Supplement . This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party hereto.
11. Waiver . No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of a party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by such party or by a duly authorized officer on behalf of such party.
12. Confidentiality . The Stockholders agree (a) to hold any non-public information regarding Paramount, this Agreement and the Share Exchange in strict confidence and (b) except as required by law or legal process not to divulge any such material non-public information to any third Person.
13. Interpretation . When a reference is made in this Agreement to a Section, paragraph, clause or Schedule, such reference shall be to a Section, paragraph, clause or Schedule of this Agreement unless otherwise indicated. The headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender as the circumstances require, and in the singular or plural as the circumstances require. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified. The words “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in
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this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” References in this Agreement to “vote”, “voting”, “voted” and likewise shall refer to shares being voted or otherwise tabulated in any manner possible, whether in person at a meeting, by written consent, by proxy or otherwise. A Person shall be deemed the “beneficial” owner of, shall be deemed to have “beneficial” ownership of, and shall be deemed to “beneficially” own any securities which such Person or any of such Person’s Affiliates (a) beneficially owns as determined pursuant to Rule 13d 3 under the U.S. Exchange Act as in effect on the date of this Agreement, (b) has the right to acquire (whether such right is exercisable immediately or only after the passage of time), or (c) has the right to vote or dispose of, directly or indirectly. Any agreement, instrument or Law defined or referred to herein means such agreement, instrument or Law as from time to time amended, modified or supplemented, unless otherwise specifically indicated. References to any Law include references to any associated rules, regulations and official guidance with respect thereto. References to a Person are also to its predecessors, successors and assigns. Unless otherwise specifically indicated, all references to “dollars” and “$” are references to the lawful money of the United States of America. References to “days” mean calendar days unless otherwise specified. Each of the parties to this Agreement acknowledges that it has been represented by counsel in connection with this Agreement.
14. Notices . All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of receipt, if delivered personally, (b) on the date of receipt, if delivered by facsimile or e-mail during normal business hours on a Business Day or, if delivered outside of normal business hours on a Business Day, on the first Business Day thereafter, (c) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (d) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
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(i) |
If to a Stockholder, to the address set forth opposite such Stockholder’s name on Schedule A hereto. |
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(ii) |
If to Paramount: |
Paramount Gold Nevada Corp.
665 Anderson Street
Winnemucca, NV 89445
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Attention: |
Glen Van Treek |
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E-mail: |
glen@paramountnevada.com |
with a copy (which shall not constitute notice) to:
LeClairRyan, A Professional Corporation
One Riverfront Plaza
1037 Raymond Boulevard, Sixteenth Floor
Newark, NJ 07102
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Attention: |
James T. Seery |
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E-mail: |
James.Seery@leclairryan.com |
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15 . Entire Agreement . This Agreement and the Arrangement Agreement (including the Exhibits) constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the parties with respect to the subject matter hereof.
16. No Third-Party Beneficiaries . Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.
17. Governing Law . This Agreement and all disputes or controversies arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the internal laws of the Province of British Columbia, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the Province of British Columbia.
18. Submission to Jurisdiction . Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined exclusively in the Province of British Columbia, provided that if jurisdiction is not then available in the Province of British Columbia, then any such legal action or proceeding shall be brought exclusively in any federal court located in the Province of British Columbia . Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and its obligations herein. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in British Columbia, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in British Columbia. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or its obligations hereunder (a) any claim that it is not personally subject to the jurisdiction of the courts in British Columbia as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
19. Assignment; Successors . Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by either party without the prior written consent of the other party, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
20. Enforcement . The parties agree that irreparable damage would occur in the event that the parties do not perform the material provisions of this Agreement in accordance with its terms or otherwise breach such provisions. Accordingly, the parties acknowledge and agree that each party shall
8
be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 18 , this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.
21. Severability . If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as either the economic or legal substance of is the Parties' obligations hereunder are not affected in any manner materially adverse to any party or such party waives its rights under this Section with respect thereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the obligations hereunder are fulfilled to the extent possible.
22. Waiver of Jury Trial . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
23. Fees and Expenses . Except to the extent provided in the Arrangement Agreement, all fees and expenses incurred in connection with this Agreement, the Arrangement Agreement, the Share Exchange and the other transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses, whether or not the Share Exchange is consummated.
24. Counterparts . This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to each other party; provided, however, that if any of the Stockholders fail for any reason to execute this Agreement, then this Agreement shall become effective as to the other Stockholders who execute this Agreement. Delivery of an executed counterpart of this Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of an original counterpart hereof.
[The remainder of this page is intentionally left blank.]
9
IN WITNESS WHEREOF, Paramount and the Stockholders have caused to be executed or executed this Agreement as of the date first written above.
PARAMOUNT GOLD NEVADA CORP. |
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By: |
/s/ Glen Van Treek |
Name: |
Glen Van Treek |
Title: |
Chief Executive Officer |
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|
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Stockholder: |
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|
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By: |
/s/ Paul Parisotto |
Name: |
Paul Parisotto |
Title: |
President, CEO and Director |
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By: |
/s/ Rudi P. Fronk |
Name: |
Rudi P. Fronk |
Title: |
Chairman and Director |
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|
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By: |
/s/ Alec Peck |
Name: |
Alec Peck |
Title: |
Chief Financial Officer |
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|
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By: |
/s/ Allan Williams |
Name: |
Allan Williams |
Title: |
Director |
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By: |
/s/ Kevin Milledge |
Name: |
Kevin Milledge |
Title: |
Director |
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|
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By: |
/s/ Jay S. Layman |
Name: |
Jay S. Layman |
Title: |
Director |
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|
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By: |
/s/ John Pollesel |
Name: |
John Pollesel |
Title: |
Director |
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By: |
/s/ Hugo T. Sorensen |
Name: |
Hugo T. Sorensen |
Title: |
Director |
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By: |
/s/ Vance V. Thornsberry |
Name: |
Vance V. Thornsberry |
Title: |
Vice President, Exploration |
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By: |
/s/ Pamela White |
Name: |
Pamela White |
Title: |
Corporate Secretary |
11
SCHEDULE A
Stockholder |
Address |
Owned Shares |
Options |
Warrants |
Paul Parisotto President / CEO / Director |
1144 Forest Trail Place Oakville, Ontario, L6M 3H7 |
1,486,500 |
750,000 |
Nil |
Rudi P. Fronk Chairman / Director |
5449 South Jasmine Street Greenwood Village, Colorado, 80111 |
1,050,000 |
0 |
Nil |
Alec Peck CFO / Director |
Unit 3, 14655 - 32 Avenue Surrey, B.C. V4P 3R6 |
100,000 |
185,000 |
Nil |
Allan Williams Director |
21071 - 43A Avenue Langley, BC V3A 8K4 |
1,481,000 |
150,000 |
Nil |
Kevin Milledge Director |
4214 Boxer Street Burnaby, B.C., V5J 2V9 |
83,333 |
150,000 |
Nil |
Jay Layman Director |
2808 Canyon Crest Drive Highlands Ranch, Colorado, 80126 |
Nil |
125,000 |
Nil |
John Pollesel Director |
12804 - 200 St. NW Edmonton, Alberta, T5S 0E6 |
Nil |
150,000 |
Nil |
Hugo Sorensen Director |
17204 The Gore Road Caledon, Ontario, L7K 2M4 |
150,000 |
150,000 |
Nil |
Vance Thornsberry VP Exploration |
18418 N Sportsman Paradise Lane Nine Mile Falls, Washington, 99026 |
437,500 |
500,000 |
Nil |
Pamela White Corporate Secretary |
4436 - 62nd Street Ladner, B.C., V4K 3L7 |
20,000 |
125,000 |
Nil |
12
Exhibit 10.2
VOTING AND SUPPORT AGREEMENT
VOTING AND SUPPORT AGREEMENT, dated as of March 14, 2016 (this “ Agreement ”), among Paramount Gold Nevada Corp., a Nevada corporation (“ Paramount ”), and each of the stockholders of Calico Resources Corp., a British Columbia corporation (the “ Company ”), listed on Schedule A hereto (each, a “ Stockholder ” and, collectively, the “ Stockholders ”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Arrangement Agreement (as defined below).
RECITALS
WHEREAS, concurrently herewith, Paramount and the Company are entering into an Arrangement Agreement and Plan of Arrangement (the “ Arrangement Agreement ”) pursuant to which Paramount will acquire all of the issued and outstanding common shares of the Company in exchange for the issuance and payment of shares of common stock of Paramount, on the terms and subject to the conditions set forth therein (the “ Share Exchange ”);
WHEREAS, each Stockholder is the record or beneficial owner of shares of common stock of the Company (“ Shares ”) as set forth on Schedule A hereto (with respect to each Stockholder, the Shares listed on Schedule A, together with any additional Shares or other voting securities of the Company of which such Stockholder has as of the date hereof or acquires after the date hereof record or beneficial ownership, including by purchase, as a result of a stock dividend, stock split, recapitalization, combination, reclassification or exchange, upon exercise or conversion of any options, warrants or other securities, or otherwise, such Stockholder’s “ Covered Shares ”);
WHEREAS, as a condition and inducement to Paramount’s willingness to enter into the Arrangement Agreement and to proceed with the transactions contemplated thereby, including the Share Exchange, Paramount and the Stockholders are entering into this Agreement; and
WHEREAS, the Stockholders acknowledge that Paramount is entering into the Arrangement Agreement in reliance on the representations, warranties, covenants and other agreements of the Stockholders set forth in this Agreement and would not enter into the Arrangement Agreement if any Stockholder did not enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Paramount and the Stockholders hereby agree as follows:
AGREEMENT
1. Agreement to Vote . Prior to the Termination Date (as defined below), each Stockholder irrevocably and unconditionally agrees that it shall at any meeting of the stockholders of the Company (whether annual, special or otherwise and whether or not an adjourned or postponed meeting), however called, or in connection with any written consent of stockholders of the Company, however proposed (a) when a meeting is held, appear at such meeting or otherwise cause its Covered Shares to be counted as present thereat for the purpose of establishing a quorum, and if a written consent is proposed, respond to each request by the Company for written consent, and (b) vote (or consent), or provide instructions to
1
the designated proxyholder of the Company's management to vote at such meeting (or validly execute and return and cause such consent to be granted with respect to), all Covered Shares (i) in favor of the Share Exchange, the adoption of the Arrangement Agreement and any other matters necessary for consummation of the Share Exchange and the other transactions contemplated by the Arrangement Agreement and any other action reasonably requested by Paramount in furtherance thereof, and (ii) against (A) any Acquisition Proposal (as defined in the Arrangement Agreement), (B) any proposal for any recapitalization, reorganization, liquidation, dissolution, amalgamation, merger, sale of assets or other business combination between the Company and any other Person (other than the Share Exchange), (C) any other action that would reasonably be expected to impede, interfere with, delay, postpone or adversely affect the Share Exchange or any of the transactions contemplated by the Arrangement Agreement or this Agreement or any action or transaction that would result in a breach of any covenant, representation or warranty or other obligation or agreement of the Company or any of its Subsidiaries contained in the Arrangement Agreement, or of the Stockholder contained in this Agreement, (D) any change in the present capitalization or dividend policy of the Company or any amendment or other change to the Company’s certificate of incorporation or bylaws, except if approved by Paramount and (E) any other change in the Company’s corporate structure or business.
2. No Inconsistent Agreements . Each Stockholder hereby represents, covenants and agrees that, except as contemplated by this Agreement, such Stockholder (a) has not entered into, and shall not enter into at any time prior to the Termination Date, any voting agreement, voting trust or other agreement that directly or indirectly addresses voting with respect to any Covered Shares and (b) has not granted, and shall not grant at any time prior to the Termination Date, a proxy or power of attorney with respect to any Covered Shares, in either case, which is inconsistent with such Stockholder’s obligations pursuant to this Agreement.
3. Termination . This Agreement shall terminate upon the earliest of (a) the Effective Time (as defined in the Arrangement Agreement), (b) the date that the Arrangement Agreement is terminated in accordance with its terms and (c) written notice of termination of this Agreement by Paramount to the Stockholders (such earliest date, the “ Termination Date ”); provided, that the provisions set forth in Sections 10 and 24 shall survive the termination of this Agreement; provided further, that any liability incurred by any party hereto as a result of a breach of a term or condition of this Agreement prior to such termination shall survive the termination of this Agreement.
4. Representations and Warranties of Stockholders . Each Stockholder, as to itself (severally and not jointly), hereby represents and warrants, to the best of its knowledge, to Paramount as follows:
(a) Schedule A lists all Shares owned of record or beneficially by such Stockholder, designating any such Shares that are restricted or otherwise subject to vesting requirements. Schedule A lists all options, warrants and other securities convertible into or exercisable or exchangeable for Shares owned of record or beneficially by such Stockholder. Except as set forth on Schedule A , such Stockholder does not own of record or beneficially any voting securities in the Company or any securities convertible into or exercisable or exchangeable for any such voting securities. Such Stockholder does not own of record any Shares which are beneficially owned by a third Person.
(b) Such Stockholder is the record or beneficial owner of all Covered Shares of such Stockholder. Such Stockholder has sole voting power, sole power of disposition and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Covered Shares, with no limitations, qualifications or restrictions on such rights. Such Covered Shares are not subject to
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any voting trust agreement or other Contract to which such Stockholder is a party restricting or otherwise relating to the voting or Transfer (as defined below) of such Covered Shares. Such Stockholder has not appointed or granted any proxy or power of attorney that is still in effect with respect to such Covered Shares, except as contemplated by this Agreement.
(c) Each such Stockholder which is an entity is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder; each such Stockholder who is a natural person has full legal power and capacity to execute and deliver this Agreement and to perform such Stockholder’s obligations hereunder. The execution, delivery and performance of this Agreement by each such Stockholder which is an entity, the performance by such Stockholder of its obligations hereunder have been duly and validly authorized by such Stockholder and no other actions or proceedings on the part of such Stockholder are necessary to authorize the execution and delivery by such Stockholder of this Agreement, the performance by such Stockholder of its obligations hereunder on a timely basis. This Agreement has been duly and validly executed and delivered by such Stockholder and, assuming due authorization, execution and delivery by Paramount, constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). If such Stockholder is married, and any of the Covered Shares of such Stockholder constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by such Stockholder’s spouse and, assuming due authorization, execution and delivery by Paramount, constitutes a legal, valid and binding obligation of such Stockholder’s spouse, enforceable against such Stockholder’s spouse in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).
(d) Except for the applicable requirements of the U.S. Exchange Act, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Entity is necessary on the part of such Stockholder for the execution, delivery and performance of this Agreement by such Stockholder and (ii) neither the execution, delivery or performance of this Agreement by such Stockholder nor compliance by such Stockholder with any of the provisions hereof shall (A) conflict with or violate, any provision of the organizational documents of any such Stockholder which is an entity, (B) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of such Stockholder pursuant to, any contract to which such Stockholder is a party or by which such Stockholder or any property or asset of such Stockholder is bound or affected or (C) violate any order, writ, injunction, decree, statute, law, rule or regulation applicable to such Stockholder or any of such Stockholder’s properties or assets except, in the case of clause (B) or (C), for breaches, violations or defaults that would not, individually or in the aggregate, materially impair the ability of such Stockholder to perform its obligations hereunder on a timely basis.
(e) There is no action, suit, claim, arbitration, investigation, complaint, inquiry or other proceeding pending against any such Stockholder or, to the knowledge of such Stockholder, any other Person or, to the knowledge of such Stockholder, threatened against any Stockholder or any other
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Person that restricts or prohibits (or, if successful, would restrict or prohibit) the exercise by Paramount of its rights under this Agreement or the performance by any party of its obligations under this Agreement on a timely basis.
(f) Except as provided in the Arrangement Agreement, no broker, finder, financial advisor or investment banker is entitled to any brokerage, finder’s, financial advisor’s or other fee or commission in connection with the transactions contemplated by the Arrangement Agreement or this Agreement based upon arrangements made by or on behalf of such Stockholder.
(g) Such Stockholder understands and acknowledges that Paramount is entering into the Arrangement Agreement in reliance upon such Stockholder’s execution and delivery of this Agreement and the representations and warranties and covenants of such Stockholder contained herein and would not enter into the Arrangement Agreement if such Stockholder did not enter into this Agreement.
5. Certain Covenants of Stockholder . Each Stockholder, for itself (severally and not jointly), hereby covenants and agrees as follows:
(a) Such Stockholder shall not, and shall not authorize or permit any of its Subsidiaries or Affiliates or its or their Representatives, directly or indirectly, to:
(i) solicit, initiate, endorse, encourage or facilitate any inquiry, proposal or offer with respect to, or the making or completion of, any Acquisition Proposal, or any inquiry, proposal or offer that is reasonably likely to lead to any Acquisition Proposal;
(ii) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person any information or data with respect to, or otherwise cooperate in any way with, any Acquisition Proposal;
(iii) enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement, binding term sheet or other Contract constituting or related to, or which is intended to or is reasonably likely to lead to, any Acquisition Proposal;
(iv) approve or recommend or propose to approve or recommend any Acquisition Proposal or any Contract constituting or relating to any Acquisition Proposal to the Company or any third Person;
(v) make, or in any manner participate in, a solicitation of proxies or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of Shares (other than in favor of the Share Exchange), or seek to cause stockholders of the Company not to vote to approve the Share Exchange or any other transaction contemplated by the Arrangement Agreement; or
(vi) resolve, agree or propose to do any of the foregoing.
(b) Such Stockholder will immediately cease and cause to be terminated all existing discussions or negotiations (if any) with any Person conducted heretofore with respect to any of the matters described in paragraph (a) above.
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(c) Such Stockholder shall promptly (and in any event within 24 hours of receipt) advise Paramount in writing in the event such Stockholder receives (i) any indication by any Person that it is considering making an Acquisition Proposal, (ii) any inquiry or request for information, discussion or negotiation that is reasonably likely to lead to or that contemplates an Acquisition Proposal or (iii) any proposal or offer that is or is reasonably likely to lead to an Acquisition Proposal, in each case together with a description of the material terms and conditions of and facts surrounding any such indication, inquiry, request, proposal or offer, the identity of the Person making any such indication, inquiry, request, proposal or offer, and a copy of any written agreement or other materials provided by such Person. Such Stockholder shall keep Paramount informed (orally and in writing) in all material respects on a timely basis of the status and details (including, within 24 hours after the occurrence of any amendment, modification, development, discussion or negotiation) of any such indication, inquiry, request, proposal or offer, including furnishing copies of any written inquiries, correspondence and draft documentation, and written summaries of any material oral inquiries or discussions.
(d) Except as contemplated hereby, such Stockholder shall not (i) tender into any tender or exchange offer, (ii) sell (constructively or otherwise), transfer, pledge, hypothecate, grant, gift, encumber, assign or otherwise dispose of (collectively “ Transfer ”), or enter into any Contract with respect to the Transfer of any of the Covered Shares or beneficial ownership or voting power thereof or therein (including by operation of law), (iii) grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting agreement with respect to any Covered Shares, or (iv) take any action that would make any representation or warranty of such Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling such Stockholder from performing its obligations under this Agreement. Any Transfer in violation of this provision shall be void.
(e) In the event that such Stockholder acquires record or beneficial ownership of, or the power to vote or direct the voting of, any additional Shares or other voting interests with respect to the Company, such Shares or voting interests shall, without further action of the parties, be deemed Covered Shares and subject to the provisions of this Agreement, and the number of Shares held by such Stockholder set forth on Schedule A hereto will be deemed amended accordingly and such Shares or voting interests shall automatically become subject to the terms of this Agreement. Each Stockholder shall promptly notify Paramount and the Company of any such event.
6. Stockholder Capacity . This Agreement is being entered into by each Stockholder solely in its capacity as a stockholder of the Company, and nothing in this Agreement shall restrict or limit the ability of any Stockholder who is also a director or officer of the Company to take any action in his or her capacity as a director or officer of the Company except for actions specifically prohibited in the Arrangement Agreement.
7. Disclosure . Each Stockholder hereby authorizes Paramount and the Company to publish and disclose in any announcement or disclosure required by Law, the Securities and Exchange Commission or in the Proxy Statement such Stockholder’s identity and ownership of the Covered Shares and the nature of such Stockholder’s obligations under this Agreement, and to disclose a copy of this Agreement.
8. Further Assurances . From time to time, at the request of Paramount and without further consideration, each Stockholder shall take such further action as may reasonably be deemed by
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Paramount to be necessary or desirable to consummate and make effective the obligations of each Stockholder under this Agreement.
9. Amendment or Supplement . This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party hereto.
10. Waiver . No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of a party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by such party or by a duly authorized officer on behalf of such party.
11. Confidentiality . The Stockholders agree (a) to hold any non-public information regarding Paramount, this Agreement and the Share Exchange in strict confidence and (b) except as required by law or legal process not to divulge any such material non-public information to any third Person.
12. Interpretation . When a reference is made in this Agreement to a Section, paragraph, clause or Schedule, such reference shall be to a Section, paragraph, clause or Schedule of this Agreement unless otherwise indicated. The headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender as the circumstances require, and in the singular or plural as the circumstances require. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified. The words “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” References in this Agreement to “vote”, “voting”, “voted” and likewise shall refer to shares being voted or otherwise tabulated in any manner possible, whether in person at a meeting, by written consent, by proxy or otherwise. A Person shall be deemed the “beneficial” owner of, shall be deemed to have “beneficial” ownership of, and shall be deemed to “beneficially” own any securities which such Person or any of such Person’s Affiliates (a) beneficially owns as determined pursuant to Rule 13d 3 under the U.S. Exchange Act as in effect on the date of this Agreement, (b) has the right to acquire (whether such right is exercisable immediately or only after the passage of time), or (c) has the right to vote or dispose of, directly or indirectly. Any agreement, instrument or Law defined or referred to herein means such agreement, instrument or Law as from time to time amended, modified or supplemented, unless otherwise specifically indicated. References to any Law include references to any associated rules, regulations and official guidance with respect thereto. References to a Person are also to its predecessors, successors and assigns. Unless otherwise specifically indicated, all references to “dollars” and “$” are references to the lawful money of the United States of America. References to “days” mean calendar days unless otherwise specified. Each of the parties to this Agreement acknowledges that it has been represented by counsel in connection with this Agreement.
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13. Notices . All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of receipt, if delivered personally, (b) on the date of receipt, if delivered by facsimile or e-mail during normal business hours on a Business Day or, if delivered outside of normal business hours on a Business Day, on the first Business Day thereafter, (c) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (d) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
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(i) |
If to a Stockholder, to the address set forth opposite such Stockholder’s name on Schedule A hereto. |
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(ii) |
If to Paramount: |
Paramount Gold Nevada Corp.
665 Anderson Street
Winnemucca, NV 89445
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Attention: |
Glen Van Treek |
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E-mail: |
glen@paramountnevada.com |
with a copy (which shall not constitute notice) to:
LeClairRyan, A Professional Corporation
One Riverfront Plaza
1037 Raymond Boulevard, Sixteenth Floor
Newark, NJ 07102
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Attention: |
James T. Seery |
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E-mail: |
James.Seery@leclairryan.com |
14. Entire Agreement . This Agreement and the Arrangement Agreement (including the Exhibits) constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the parties with respect to the subject matter hereof.
15. No Third-Party Beneficiaries . Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.
16. Governing Law . This Agreement and all disputes or controversies arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the internal laws of the Province of British Columbia, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the Province of British Columbia.
17. Submission to Jurisdiction . Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined exclusively in the Province of British Columbia, provided that if jurisdiction is not then available in the Province of British Columbia, then
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any such legal action or proceeding shall be brought exclusively in any federal court located in the Province of British Columbia. Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and its obligations herein. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in British Columbia, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in British Columbia. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or its obligations hereunder (a) any claim that it is not personally subject to the jurisdiction of the courts in British Columbia as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
18. Assignment; Successors . Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by either party without the prior written consent of the other party, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
19. Enforcement . The parties agree that irreparable damage would occur in the event that the parties do not perform the material provisions of this Agreement in accordance with its terms or otherwise breach such provisions. Accordingly, the parties acknowledge and agree that each party shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in the courts described in Section 18 , this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.
20. Severability . If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as either the economic or legal substance of is the Parties' obligations hereunder are not affected in any manner materially adverse to any party or such party waives its rights under this Section with respect thereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the obligations hereunder are fulfilled to the extent possible.
21. Waiver of Jury Trial . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
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OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22. Fees and Expenses . Except to the extent provided in the Arrangement Agreement, all fees and expenses incurred in connection with this Agreement, the Arrangement Agreement, the Share Exchange and the other transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses, whether or not the Share Exchange is consummated.
23. Counterparts . This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to each other party; provided, however, that if any of the Stockholders fail for any reason to execute this Agreement, then this Agreement shall become effective as to the other Stockholders who execute this Agreement. Delivery of an executed counterpart of this Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of an original counterpart hereof.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, Paramount and the Stockholders have caused to be executed or executed this Agreement as of the date first written above.
PARAMOUNT GOLD NEVADA CORP. |
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By: |
/s/ Glen Van Treek |
Name: |
Glen Van Treek |
Title: |
Chief Executive Officer |
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Stockholder: |
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SEABRIDGE GOLD INC. |
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By: |
/s/ Rudi P. Fronk |
Name: |
Rudi P. Fronk |
Title: |
Chairman and Director |
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By: |
/s/ C. Bruce Scott |
Name: |
C. Bruce Scott |
Title: |
Vice President Corporate Affairs & |
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Corporate Secretary |
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SCHEDULE A
Stockholder |
Address |
Owned Shares |
Options |
Warrants |
Seabridge Gold Inc. |
106 Front Street East, Suite 400, Toronto, ON M5A 1E1 |
13,859,477 |
Nil |
Nil |
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Exhibit 10.3
CONFIDENTIAL
VOTING AND SUPPORT AGREEMENT
VOTING AND SUPPORT AGREEMENT, dated as of March 14, 2016 (this “ Agreement ”), among Paramount Gold Nevada Corp., a Nevada corporation (“ Paramount ”), and each of the stockholders of Calico Resources Corp., a British Columbia corporation (the “ Company ”), listed on Schedule A hereto (each, a “ Stockholder ” and, collectively, the “ Stockholders ”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Arrangement Agreement (as defined below).
RECITALS
WHEREAS, concurrently herewith, Paramount and the Company are entering into an Arrangement Agreement and Plan of Arrangement (the “ Arrangement Agreement ”) pursuant to which Paramount will acquire all of the issued and outstanding common shares of the Company in exchange for the issuance and payment of shares of common stock of Paramount, on the terms and subject to the conditions set forth therein (the “ Share Exchange ”);
WHEREAS, each Stockholder is the record or beneficial owner of shares of common stock of the Company (“ Shares ”) as set forth on Schedule A hereto (with respect to each Stockholder, the Shares listed on Schedule A, together with any additional Shares or other voting securities of the Company of which such Stockholder has as of the date hereof or acquires after the date hereof record or beneficial ownership, including by purchase, as a result of a stock dividend, stock split, recapitalization, combination, reclassification or exchange, upon exercise or conversion of any options, warrants or other securities, or otherwise, such Stockholder’s “ Covered Shares ”);
WHEREAS, as a condition and inducement to Paramount’s willingness to enter into the Arrangement Agreement and to proceed with the transactions contemplated thereby, including the Share Exchange, Paramount and the Stockholders are entering into this Agreement; and
WHEREAS, the Stockholders acknowledge that Paramount is entering into the Arrangement Agreement in reliance on the representations, warranties, covenants and other agreements of the Stockholders set forth in this Agreement and would not enter into the Arrangement Agreement if any Stockholder did not enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, Paramount and the Stockholders hereby agree as follows:
AGREEMENT
1. Agreement to Vote. Prior to the Termination Date (as defined below), each Stockholder irrevocably and unconditionally agrees that it shall at any meeting of the stockholders of the Company (whether annual, special or otherwise and whether or not an adjourned or postponed meeting), however called, or in connection with any written consent of stockholders of the Company, however proposed (a) when a meeting is held, appear at such meeting or otherwise cause its Covered Shares to be counted as present thereat for the purpose of establishing a quorum, and if a written consent is proposed, respond to each request by the Company for written consent, and (b) vote (or consent), or provide instructions to the designated proxyholder of the Company's management to vote at such meeting (or validly execute and
1
return and cause such consent to be granted with respect to), all Cov ered Shares (i) in favor of the Share Exchange, the adoption of the Arrangement Agreement and any other matters necessary for consummation of the Share Exchange and the other transactions contemplated by the Arrangement Agreement and any other action reaso nably requested by Paramount in furtherance thereof, and (ii) against (A) any Acquisition Proposal (as defined in the Arrangement Agreement), (B) any proposal for any recapitalization, reorganization, liquidation, dissolution, amalgamation, merger, sale of assets or other business combination between the Company and any other Person (other than the Share Exchange), (C) any other action that would reasonably be expected to impede, interfere with, delay, postpone or adversely affect the Share Exchange or any of the transactions contemplated by the Arrangement Agreement or this Agreement or any action or transaction that would result in a breach of any covenant, representation or warranty or other obligation or agreement of the Company or any of its Subsidiarie s contained in the Arrangement Agreement, or of the Stockholder contained in this Agreement, (D) any change in the present capitalization or dividend policy of the Company or any amendment or other change to the Company’s certificate of incorporation or by laws, except if approved by Paramount and (E) any other change in the Company’s corporate structure or business.
2. No Inconsistent Agreements. Each Stockholder hereby represents, covenants and agrees that, except as contemplated by this Agreement, such Stockholder (a) has not entered into, and shall not enter into at any time prior to the Termination Date, any voting agreement, voting trust or other agreement that directly or indirectly addresses voting with respect to any Covered Shares and (b) has not granted, and shall not grant at any time prior to the Termination Date, a proxy or power of attorney with respect to any Covered Shares, in either case, which is inconsistent with such Stockholder’s obligations pursuant to this Agreement.
3. Termination . This Agreement shall terminate upon the earliest of (a) the Effective Time (as defined in the Arrangement Agreement), (b) the date that the Arrangement Agreement is terminated in accordance with its terms and (c) written notice of termination of this Agreement by Paramount to the Stockholders (such earliest date, the “ Termination Date ”); provided, that the provisions set forth in Sections 10 and 24 shall survive the termination of this Agreement; provided further, that any liability incurred by any party hereto as a result of a breach of a term or condition of this Agreement prior to such termination shall survive the termination of this Agreement.
4. Representations and Warranties of Stockholders . Each Stockholder, as to itself (severally and not jointly), hereby represents and warrants, to the best of its knowledge, to Paramount as follows:
(a) Schedule A lists all Shares owned of record or beneficially by such Stockholder, designating any such Shares that are restricted or otherwise subject to vesting requirements. Schedule A lists all options, warrants and other securities convertible into or exercisable or exchangeable for Shares owned of record or beneficially by such Stockholder. Except as set forth on Schedule A , such Stockholder does not own of record or beneficially any voting securities in the Company or any securities convertible into or exercisable or exchangeable for any such voting securities. Such Stockholder does not own of record any Shares which are beneficially owned by a third Person.
(b) Such Stockholder is the record or beneficial owner of all Covered Shares of such Stockholder. Such Stockholder has sole voting power, sole power of disposition and sole power to agree to all of the matters set forth in this Agreement, in each case with respect to all of such Covered Shares, with no limitations, qualifications or restrictions on such rights. Such Covered Shares are not subject to any voting trust agreement or other Contract to which such Stockholder is a party restricting or otherwise relating to the voting or Transfer (as defined below) of such Covered Shares. Such Stockholder has not appointed or granted any proxy or power of attorney that is still in effect with respect to such Covered Shares, except as contemplated by this Agreement.
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(c) Each such Stockholder which is an entity is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority to execute and deliver this Agreement and to perform its obligati ons hereunder; each such Stockholder who is a natural person has full legal power and capacity to execute and deliver this Agreement and to perform such Stockholder’s obligations hereunder. The execution, delivery and performance of this Agreement by each such Stockholder which is an entity, the performance by such Stockholder of its obligations hereunder have been duly and validly authorized by such Stockholder and no other actions or proceedings on the part of such Stockholder are necessary to authorize t he execution and delivery by such Stockholder of this Agreement, the performance by such Stockholder of its obligations hereunder on a timely basis. This Agreement has been duly and validly executed and delivered by such Stockholder and, assuming due autho rization, execution and delivery by Paramount, constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder in accordance with its terms, except as enforcement may be limited by applicable bankruptcy, insolven cy, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law). If such Stockholder is married, and any of the Covered Shares o f such Stockholder constitute community property or otherwise need spousal or other approval for this Agreement to be legal, valid and binding, this Agreement has been duly and validly executed and delivered by such Stockholder’s spouse and, assuming due a uthorization, execution and delivery by Paramount, constitutes a legal, valid and binding obligation of such Stockholder’s spouse, enforceable against such Stockholder’s spouse in accordance with its terms, except as enforcement may be limited by applicabl e bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general principles of equity (regardless of whether considered in a proceeding in equity or at law).
(d) Except for the applicable requirements of the U.S. Exchange Act, (i) no filing with, and no permit, authorization, consent or approval of, any Governmental Entity is necessary on the part of such Stockholder for the execution, delivery and performance of this Agreement by such Stockholder and (ii) neither the execution, delivery or performance of this Agreement by such Stockholder nor compliance by such Stockholder with any of the provisions hereof shall (A) conflict with or violate, any provision of the organizational documents of any such Stockholder which is an entity, (B) result in any breach or violation of, or constitute a default (or an event which, with notice or lapse of time or both, would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any property or asset of such Stockholder pursuant to, any contract to which such Stockholder is a party or by which such Stockholder or any property or asset of such Stockholder is bound or affected or (C) violate any order, writ, injunction, decree, statute, law, rule or regulation applicable to such Stockholder or any of such Stockholder’s properties or assets except, in the case of clause (B) or (C), for breaches, violations or defaults that would not, individually or in the aggregate, materially impair the ability of such Stockholder to perform its obligations hereunder on a timely basis.
(e) There is no action, suit, claim, arbitration, investigation, complaint, inquiry or other proceeding pending against any such Stockholder or, to the knowledge of such Stockholder, any other Person or, to the knowledge of such Stockholder, threatened against any Stockholder or any other Person that restricts or prohibits (or, if successful, would restrict or prohibit) the exercise by Paramount of its rights under this Agreement or the performance by any party of its obligations under this Agreement on a timely basis.
(f) Except as provided in the Arrangement Agreement, no broker, finder, financial advisor or investment banker is entitled to any brokerage, finder’s, financial advisor’s or other fee or commission in connection with the transactions contemplated by the Arrangement Agreement or this Agreement based upon arrangements made by or on behalf of such Stockholder.
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(g) Such Stockholder understands and acknowledges that Paramount is entering into the Arrangement Agreement in reliance upon such Stockholder’s execution and delivery of this Agreement and the representations and warranties and covenants of su ch Stockholder contained herein and would not enter into the Arrangement Agreement if such Stockholder did not enter into this Agreement.
5. Certain Covenants of Stockholder . Each Stockholder, for itself (severally and not jointly), hereby covenants and agrees as follows:
(a) Such Stockholder shall not, and shall not authorize or permit any of its Subsidiaries or Affiliates or its or their Representatives, directly or indirectly, to:
(i) solicit, initiate, endorse, encourage or facilitate any inquiry, proposal or offer with respect to, or the making or completion of, any Acquisition Proposal, or any inquiry, proposal or offer that is reasonably likely to lead to any Acquisition Proposal;
(ii) enter into, continue or otherwise participate in any discussions or negotiations regarding, or furnish to any Person any information or data with respect to, or otherwise cooperate in any way with, any Acquisition Proposal;
(iii) enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement, binding term sheet or other Contract constituting or related to, or which is intended to or is reasonably likely to lead to, any Acquisition Proposal;
(iv) approve or recommend or propose to approve or recommend any Acquisition Proposal or any Contract constituting or relating to any Acquisition Proposal to the Company or any third Person;
(v) make, or in any manner participate in, a solicitation of proxies or powers of attorney or similar rights to vote, or seek to advise or influence any Person with respect to the voting of Shares (other than in favor of the Share Exchange), or seek to cause stockholders of the Company not to vote to approve the Share Exchange or any other transaction contemplated by the Arrangement Agreement; or
(vi) resolve, agree or propose to do any of the foregoing.
(b) Such Stockholder will immediately cease and cause to be terminated all existing discussions or negotiations (if any) with any Person conducted heretofore with respect to any of the matters described in paragraph (a) above.
(c) Such Stockholder shall promptly (and in any event within 24 hours of receipt) advise Paramount in writing in the event such Stockholder receives (i) any indication by any Person that it is considering making an Acquisition Proposal, (ii) any inquiry or request for information, discussion or negotiation that is reasonably likely to lead to or that contemplates an Acquisition Proposal or (iii) any proposal or offer that is or is reasonably likely to lead to an Acquisition Proposal, in each case together with a description of the material terms and conditions of and facts surrounding any such indication, inquiry, request, proposal or offer, the identity of the Person making any such indication, inquiry, request, proposal or offer, and a copy of any written agreement or other materials provided by such Person. Such Stockholder shall keep Paramount informed (orally and in writing) in all material respects on a timely basis of the status and details (including, within 24 hours after the occurrence of any amendment, modification, development, discussion or negotiation) of any such indication, inquiry, request, proposal or
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offer, including furnishing copies o f any written inquiries, correspondence and draft documentation, and written summaries of any material oral inquiries or discussions.
(d) Except as contemplated hereby, such Stockholder shall not (i) tender into any tender or exchange offer, (ii) sell (constructively or otherwise), transfer, pledge, hypothecate, grant, gift, encumber, assign or otherwise dispose of (collectively “ Transfer ”), or enter into any Contract with respect to the Transfer of any of the Covered Shares or beneficial ownership or voting power thereof or therein (including by operation of law), (iii) grant any proxies or powers of attorney, deposit any Covered Shares into a voting trust or enter into a voting agreement with respect to any Covered Shares, or (iv) take any action that would make any representation or warranty of such Stockholder contained herein untrue or incorrect or have the effect of preventing or disabling such Stockholder from performing its obligations under this Agreement. Any Transfer in violation of this provision shall be void.
(e) In the event that such Stockholder acquires record or beneficial ownership of, or the power to vote or direct the voting of, any additional Shares or other voting interests with respect to the Company, such Shares or voting interests shall, without further action of the parties, be deemed Covered Shares and subject to the provisions of this Agreement, and the number of Shares held by such Stockholder set forth on Schedule A hereto will be deemed amended accordingly and such Shares or voting interests shall automatically become subject to the terms of this Agreement. Each Stockholder shall promptly notify Paramount and the Company of any such event.
6. Stockholder Capacity. This Agreement is being entered into by each Stockholder solely in its capacity as a stockholder of the Company, and nothing in this Agreement shall restrict or limit the ability of any Stockholder who is also a director or officer of the Company to take any action in his or her capacity as a director or officer of the Company except for actions specifically prohibited in the Arrangement Agreement.
7. Disclosure . Each Stockholder hereby authorizes Paramount and the Company to publish and disclose in any announcement or disclosure required by Law, the Securities and Exchange Commission or in the Proxy Statement such Stockholder’s identity and ownership of the Covered Shares and the nature of such Stockholder’s obligations under this Agreement, and to disclose a copy of this Agreement.
8. Further Assurances . From time to time, at the request of Paramount and without further consideration, each Stockholder shall take such further action as may reasonably be deemed by Paramount to be necessary or desirable to consummate and make effective the obligations of each Stockholder under this Agreement.
9. Amendment or Supplement . This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each party hereto.
10. Waiver . No failure or delay of any party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of a party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by such party or by a duly authorized officer on behalf of such party.
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11. Confidentiality . The Stockholders agree (a) to hold any non-public information regarding Paramount, this Agreement and the Share Exchange in strict confidence and (b) except as required by law or legal process not to divulge any such material non-public information to any third Person.
12. Interpretation . When a reference is made in this Agreement to a Section, paragraph, clause or Schedule, such reference shall be to a Section, paragraph, clause or Schedule of this Agreement unless otherwise indicated. The headings contained in this Agreement are for convenience of reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. All words used in this Agreement will be construed to be of such gender as the circumstances require, and in the singular or plural as the circumstances require. The word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified. The words “hereof,” “hereto,” “hereby,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “or” is not exclusive. The word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing extends, and such phrase shall not mean simply “if.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” References in this Agreement to “vote”, “voting”, “voted” and likewise shall refer to shares being voted or otherwise tabulated in any manner possible, whether in person at a meeting, by written consent, by proxy or otherwise. A Person shall be deemed the “beneficial” owner of, shall be deemed to have “beneficial” ownership of, and shall be deemed to “beneficially” own any securities which such Person or any of such Person’s Affiliates (a) beneficially owns as determined pursuant to Rule 13d 3 under the U.S. Exchange Act as in effect on the date of this Agreement, (b) has the right to acquire (whether such right is exercisable immediately or only after the passage of time), or (c) has the right to vote or dispose of, directly or indirectly. Any agreement, instrument or Law defined or referred to herein means such agreement, instrument or Law as from time to time amended, modified or supplemented, unless otherwise specifically indicated. References to any Law include references to any associated rules, regulations and official guidance with respect thereto. References to a Person are also to its predecessors, successors and assigns. Unless otherwise specifically indicated, all references to “dollars” and “$” are references to the lawful money of the United States of America. References to “days” mean calendar days unless otherwise specified. Each of the parties to this Agreement acknowledges that it has been represented by counsel in connection with this Agreement.
13. Notices . All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of receipt, if delivered personally, (b) on the date of receipt, if delivered by facsimile or e-mail during normal business hours on a Business Day or, if delivered outside of normal business hours on a Business Day, on the first Business Day thereafter, (c) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier, or (d) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice:
(i) If to a Stockholder, to the address set forth opposite such Stockholder’s name on Schedule A hereto.
(ii) If to Paramount:
Paramount Gold Nevada Corp.
665 Anderson Street
Winnemucca, NV 89445
Attention: Glen Van Treek
E-mail: glen@paramountnevada.com
with a copy (which shall not constitute notice) to:
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LeClairRyan, A Professional Corporation
One Riverfront Plaza
1037 Raymond Boulevard, Sixteenth Floor
Newark, NJ 07102
Attention: James T. Seery
E-mail: James.Seery@leclairryan.com
14. Entire Agreement . This Agreement and the Arrangement Agreement (including the Exhibits) constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the parties with respect to the subject matter hereof.
15. No Third-Party Beneficiaries . Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.
16. Governing Law . This Agreement and all disputes or controversies arising out of or relating to this Agreement shall be governed by, and construed in accordance with, the internal laws of the Province of British Columbia, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the Province of British Columbia.
17. Submission to Jurisdiction . Each of the parties irrevocably agrees that any legal action or proceeding arising out of or relating to this Agreement brought by any party or its Affiliates against any other party or its Affiliates shall be brought and determined exclusively in the Province of British Columbia, provided that if jurisdiction is not then available in the Province of British Columbia, then any such legal action or proceeding shall be brought exclusively in any federal court located in the Province of British Columbia . Each of the parties hereby irrevocably submits to the jurisdiction of the aforesaid courts for itself and with respect to its property, generally and unconditionally, with regard to any such action or proceeding arising out of or relating to this Agreement and its obligations herein. Each of the parties agrees not to commence any action, suit or proceeding relating thereto except in the courts described above in British Columbia, other than actions in any court of competent jurisdiction to enforce any judgment, decree or award rendered by any such court in British Columbia. Each of the parties further agrees that notice as provided herein shall constitute sufficient service of process and the parties further waive any argument that such service is insufficient. Each of the parties hereby irrevocably and unconditionally waives, and agrees not to assert, by way of motion or as a defense, counterclaim or otherwise, in any action or proceeding arising out of or relating to this Agreement or its obligations hereunder (a) any claim that it is not personally subject to the jurisdiction of the courts in British Columbia as described herein for any reason, (b) that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) that (i) the suit, action or proceeding in any such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.
18. Assignment; Successors . Neither this Agreement nor any of the rights, interests or obligations under this Agreement may be assigned or delegated, in whole or in part, by operation of law or otherwise, by either party without the prior written consent of the other party, and any such assignment without such prior written consent shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.
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19. Enforcement . The parties agree that irreparable damage would occur in the event that the parties do not perform the material provisions of this Agreement in accordance with its terms or otherwise breach such provis ions. Accordingly, the parties acknowledge and agree that each party shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in th e courts described in Section 18 , this being in addition to any other remedy to which such party is entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.
20. Severability . If any term or other provision of this Agreement is held to be invalid, illegal or incapable of being enforced by any rule of Law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as either the economic or legal substance of is the Parties' obligations hereunder are not affected in any manner materially adverse to any party or such party waives its rights under this Section with respect thereto. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the obligations hereunder are fulfilled to the extent possible.
21. Waiver of Jury Trial . EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
22. Fees and Expenses . Except to the extent provided in the Arrangement Agreement, all fees and expenses incurred in connection with this Agreement, the Arrangement Agreement, the Share Exchange and the other transactions contemplated hereby and thereby shall be paid by the party incurring such fees or expenses, whether or not the Share Exchange is consummated.
23. Counterparts . This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to each other party; provided, however, that if any of the Stockholders fail for any reason to execute this Agreement, then this Agreement shall become effective as to the other Stockholders who execute this Agreement. Delivery of an executed counterpart of this Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of an original counterpart hereof.
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IN WITNESS WHEREOF, Paramount and the Stockholders have caused to be executed or executed this Agreement as of the date first written above.
PARAMOUNT GOLD NEVADA CORP.
By: /s/ Glen Van Treek
Name: Glen Van Treek
Title: Chief Executive Officer
Stockholder:
FCMI FINANCIAL CORP.
By: /s/ Dan Scheiner
Name: Dan Scheiner
Title: Vice President
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SCHEDULE A
Stockholder |
Address |
Owned Shares |
Options |
Warrants |
FCMI Financial Corp. |
Suite 250, BCE Place, 181 Bay Street, Toronto,
|
20,075,000 |
Nil |
Nil |
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