<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
----------------- -------------
Commission file number 0-4846-3
------------------------------------------
CONSOLIDATED SILVER CORPORATION
------------------------------------------------
(Exact name of registrant as specified in its charter)
Idaho 82-0288840
---------------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
---------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
208-769-4100
------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months, and
(2) has been subject to such filing requirements for at least the
past 90 days. Yes XX . No .
---- ----
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
<TABLE>
<CAPTION>
Class Outstanding July 31, 1995
--------------------------------------- -------------------------
<S> <C>
Common stock, par value $0.10 per share 8,205,683 shares
</TABLE>
<PAGE> 2
CONSOLIDATED SILVER CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
I N D E X
---------
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. - Financial Information
Item 1 - Balance Sheets - June 30, 1995 and
December 31, 1994 3
- Statements of Loss and Retained Deficit -
Three Months and Six Months Ended
June 30, 1995 and 1994 4
- Statements of Cash Flows - Six Months Ended
June 30, 1995 and 1994 5
- Notes to Financial Statements 6
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 6
PART II. - Other Information
Item 6 - Exhibits and Reports on Form 8-K 8
</TABLE>
-2-
<PAGE> 3
PART I - FINANCIAL INFORMATION
CONSOLIDATED SILVER CORPORATION
Balance Sheets (Unaudited)
__________
<TABLE>
<CAPTION>
ASSETS
June 30, December 31,
1995 1994
----------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 735,162 $ 753,486
Accounts receivable 500 500
Income tax refund receivable 16,074 13,439
Other current assets 2,444 597
----------- -----------
Total current assets 754,180 768,022
----------- -----------
Properties, plant and equipment, at cost
Mining properties 231,672 231,672
Less - Accumulated depletion (231,672) (231,672)
Plant, equipment and facilities 1,297,686 1,297,686
Less - Accumulated depreciation (1,297,686) (1,297,686)
----------- -----------
- - - -
----------- -----------
Total assets $ 754,180 $ 768,022
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,966 $ 4,730
Property taxes payable 11,580 11,590
----------- -----------
Total current liabilities 32,546 16,320
----------- -----------
Preferred stock; $100 par value; authorized,
issued and outstanding, 12,500 shares 1,250,000 1,250,000
----------- -----------
Common stock; 10 cents par value; authorized,
10,000,000 shares; issued 1995 and 1994,
8,205,689 shares 820,569 820,569
Discount on common stock issued (190,709) (190,709)
Capital surplus 3,015 3,015
Retained deficit (1,161,217) (1,131,149)
----------- -----------
(528,342) (498,274)
Less, common stock reacquired at cost, 6 shares 24 24
----------- -----------
(528,366) (498,298)
----------- -----------
Total shareholders' equity 721,634 751,702
----------- -----------
Total liabilities and shareholders' equity $ 754,180 $ 768,022
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-3-
<PAGE> 4
PART I - FINANCIAL INFORMATION (Continued)
CONSOLIDATED SILVER CORPORATION
Statements of Loss and Retained Deficit (Unaudited)
----------
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------- ------------------------
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Rental income $ 1,500 $ - - $ 3,000 $ - -
Transfer fees 152 88 348 188
Interest 10,103 6,416 19,776 11,879
Miscellaneous (60) - - 460 - -
----------- ----------- ----------- -----------
11,695 6,504 23,584 12,067
Expenses:
General and administrative 34,163 21,387 56,257 40,684
----------- ----------- ----------- -----------
Net loss before
income tax benefit (22,468) (14,883) (32,673) (28,617)
Income tax benefit 1,054 5,359 2,605 10,688
----------- ----------- ----------- -----------
Net loss (21,414) (9,524) (30,068) (17,929)
Deficit at beginning of
period (1,139,803) (1,109,375) (1,131,149) (1,100,970)
----------- ----------- ----------- -----------
Deficit at end of period $(1,161,217) $(1,118,899) $(1,161,217) $(1,118,899)
=========== =========== =========== ===========
Net income per share of
common stock $ - - $ - - $ - - $ - -
===== ===== ===== ======
Cash dividends per share $ - - $ - - $ - - $ - -
===== ===== ===== ======
Weighted average number of
common shares outstanding 8,205,683 8,205,683 8,205,683 8,205,683
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
<PAGE> 5
PART I - FINANCIAL INFORMATION (Continued)
CONSOLIDATED SILVER CORPORATION
Statements of Cash Flows (Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
-------------------------
June 30, June 30,
1995 1994
----------- -----------
<S> <C> <C>
Operating activities:
Net loss $ (30,068) $ (17,929)
Change in:
Income tax refund receivable (2,635) (10,718)
Other current assets (1,847) - -
Accounts and property taxes payable 16,226 (6,352)
--------- ---------
Net cash used by operating activities (18,324) (34,999)
--------- ---------
Net decrease in cash and cash equivalents (18,324) (34,999)
Cash and cash equivalents at beginning of period 753,486 785,987
--------- ---------
Cash and cash equivalents at end of period $ 735,162 $ 750,988
========= =========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-5-
<PAGE> 6
PART I - FINANCIAL INFORMATION (Continued)
CONSOLIDATED SILVER CORPORATION
NOTES TO FINANCIAL STATEMENTS
Note 1. Notes to the financial statements as of December 31,
1994, as set forth in the Company's 1994 Annual Report on
Form 10-K, substantially apply to these interim financial
statements and are not repeated here.
Note 2. The financial information given in the accompanying
unaudited interim financial statements reflects all
adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the
interim periods reported. All such adjustments are of a
normal recurring nature. All financial statements
presented herein are unaudited. However, the balance
sheet as of December 31, 1994, was derived from the
audited balance sheet described in Note 1 above.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company's general financial condition declined slightly
during the six-month period ending June 30, 1995. Cash and cash
equivalents decreased from $753,486 at December 31, 1994 to
$735,162 at June 30, 1995 principally due to continuing cash
requirements for property care-and-maintenance expenses. Working
capital also decreased from $751,702 at December 31, 1994 to
$721,634 at June 30, 1995 primarily due to a decrease in cash and
cash equivalents, as previously discussed, and an increase in
current liabilities.
The net loss of $21,414 for the three months ending June 30,
1995 increased $11,890, or 125%, compared to the $9,524 net loss
for the same period ended June 30, 1994. The increase in the net
loss was primarily due to a $12,776 increase in general and
administrative expense resulting from increased consulting fees and
labor costs coupled with a $4,305 reduction in income tax benefits,
which were partially offset by a $5,191 increase in revenue due to
increased interest and rental income.
For the first six months of 1995, the Company incurred a net
loss of $30,068 compared to a net loss of $17,929 for the same
period ended June 30, 1994. The $12,139, or 68%, increase in the
net loss is principally due to a $15,573 increase in general and
administrative expenses, primarily consulting fees and labor costs,
and a $8,083 decrease in income tax benefits; all of which were
partially offset by a $7,897 increase in interest income and a
$3,000 increase in rental income.
-6-
<PAGE> 7
On June 19, 1995, the Company agreed to sell its Consolidated
Silver mine to Sunshine Precious Metals, Inc. The agreement, which
is subject to approval by the Company's shareholders, requires
Sunshine to pay the Company $750,000 and grant the Company a
sliding scale royalty, which varies from two percent to four
percent depending upon the change in the silver price from $4.99 to
$7.00 per ounce, on any future production from the property. The
Company expects to recognize a $750,000 pretax gain from the sale.
The Company is also finalizing a definitive agreement with Hecla
Mining Company, a major shareholder of the Company, to acquire
Hecla's interest in Minera El Morro, S.A. de C.V. which holds the
Ojo Caliente silver exploration project in Zacatecas, Mexico. The
terms of the transaction, which were approved by the Company's
Board of Directors, will be conditioned upon shareholder approval
of the Sunshine transaction. The Company shall purchase its
interest by reimbursing Hecla for its expenditures on the project
incurred to the closing date, not to exceed $800,000.
Management continues to evaluate a number of other business
opportunities which may be available and believes the Company has
sufficient cash and cash equivalents at June 30, 1995, to meet its
present and intermediate financial requirements.
-7-
<PAGE> 8
PART II - OTHER INFORMATION
CONSOLIDATED SILVER CORPORATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 10.1 - Purchase agreement between Consolidated
Silver Corporation and Sunshine Precious Metals, Inc.
dated July 1, 1995.
(b) Reports on Form 8-K
Report on Form 8-K dated June 19, 1995, related to the
sale of the Consolidated Silver mine property to
Sunshine Precious Metals, Inc. and acquisition of the
Ojo Caliente project.
Items 1, 2, 3, 4 and 5 of Part II are omitted from this report as
inapplicable.
SIGNATURES
----------
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 thereunto duly authorized.
CONSOLIDATED SILVER CORPORATION
------------------------------------
(Registrant)
Date: August 10, 1995 By /s/ RALPH R. NOYES
---------------------------------
Ralph R. Noyes, President
Date: August 10, 1995 By /s/ J. T. HEATHERLY
----------------------------------
J. T. Heatherly, Chief Accounting
Officer
-8-
<PAGE> 9
EXHIBIT INDEX
-------------
Exhibit
No. Description
------- ---------------------------
10.1 Purchase Agreement between Consolidated
Silver Corporation and Sunshine Precious
Metals, Inc. dated July 1, 1995
27 Financial Data Schedule
<PAGE> 1
Exhibit 10.1
PURCHASE AGREEMENT
between
CONSOLIDATED SILVER CORPORATION
-and-
SUNSHINE PRECIOUS METALS, INC.
DATED: July 1, 1995
<PAGE> 2
PURCHASE AGREEMENT
INDEX
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
1 Purchase And Sale Of Property............................5
2 Property.................................................5
3 Assumption Of Obligations And Liabilities By Sunshine....5
4 Purchase Price...........................................6
5 Possession...............................................6
6 Representations And Warranties Of Con Sil
a. Organization.........................................6
b. Qualification........................................6
c. Authorization and Approval of Agreement..............6
d. Ability to Carry Out Agreement.......................7
e. Governmental Licenses, Permits and Approvals.........7
f. Legal Proceedings; Compliance with Laws..............7
g. Broker's Fee.........................................8
h. Machinery and Equipment..............................8
i. Material Agreements and Instruments..................8
j. Title to Real Property...............................8
7 Representations And Warranties Of Sunshine
a. Organization.........................................9
b. Authorization and Approval of Agreement..............9
c. Ability to Carry Out Agreement.......................9
d. Broker's Fee.........................................10
8 Covenants Of Con Sil
a. Conduct of Business..................................10
b. Access to Properties, Books and Records..............10
c. Liens................................................11
d. Closing Letter.......................................11
9 Covenants Of Sunshine
a. Conduct of Business..................................11
b. Compliance with Law and Permits......................11
c. Maintenance of Property..............................11
d. Liens................................................11
e. Indemnity............................................12
f. Confidentiality......................................12
</TABLE>
<PAGE> 3
PURCHASE AGREEMENT
INDEX (Continued)
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
10 Closing..................................................12
11 Transfers And Deliveries By Sunshine
a. The Consideration....................................13
b. Written Opinion......................................13
c. Executed Counterparts................................14
12 Transfers And Deliveries By Con Sil
a. Physical Possession..................................14
b. Bill of Sale.........................................14
c. Deed.................................................14
d. Written Opinion......................................14
e. Certificates of Title or Origin......................15
f. Closing Letter.......................................15
13 Prorations
a. Ad Valorem Taxes.....................................15
b. Utilities............................................15
c. Other Proratable Expenses............................15
14 Conditions To Obligations Of Sunshine
a. Shareholder Approval.................................15
b. Satisfactory Proceedings.............................15
c. Representations and Warranties Correct...............15
15 Conditions To Obligations Of Con Sil
a. Shareholder Approval.................................16
b. Satisfactory Proceedings.............................16
c. Representations and Warranties Correct...............16
d. Assumption...........................................16
16 Further Assurances Of Con Sil And Sunshine...............16
17 Books, Records, And Miscellaneous........................16
</TABLE>
<PAGE> 4
PURCHASE AGREEMENT
INDEX (Continued)
<TABLE>
<CAPTION>
SECTION PAGE
<S> <C> <C>
18 Fees And Expenses
a. Fees................................................17
b. Expenses............................................17
19 Survival Of Representations And Warranties; Covenants
And Agreements
a. Representations and Warranties......................17
b. Covenants, Conditions and Agreements................17
20 Indemnification.........................................17
21 Environmental Matters...................................18
22 Shareholder Consent.....................................21
23 Termination Of Agreement................................21
24 Liability On Termination................................21
25 Surrender Of Possession On Termination..................21
26 Miscellaneous
a. Exhibits and Schedules..............................22
b. No Assignment, Successors, Assigns, Etc.............22
c. Governing Law.......................................22
d. Counterparts........................................23
e. Notices.............................................23
f. Amendment...........................................23
g. Entire Agreement....................................23
h. Waiver..............................................23
Exhibit A - Properties
Exhibit B - Royalty Deed
Exhibit C - Licenses and Permits
Exhibit D - Legal Proceedings
Exhibit E - Agreements and Instruments
Exhibit F - Deed
</TABLE>
<PAGE> 5
PURCHASE AGREEMENT
THIS AGREEMENT is made the 1st day of July, 1995, between
Consolidated Silver Corporation, an Idaho corporation ("Con Sil"),
and Sunshine Precious Metals, Inc., a Delaware corporation
("Sunshine").
RECITALS
WHEREAS, Con Sil is the owner of certain mining properties
consisting of patented and unpatented mining claims, together with
certain plant, equipment and facilities located thereon; and
WHEREAS, Sunshine desires to purchase from Con Sil and Con Sil
desires to sell to Sunshine those certain assets owned by Con Sil
located in Shoshone County, Idaho, upon the terms and subject to
the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual promises, covenants and conditions herein contained, the
parties hereto agree as follows:
1. PURCHASE AND SALE OF PROPERTY. Upon the terms and subject to
the conditions set forth herein, Con Sil hereby agrees to
sell, convey, assign, transfer and deliver to Sunshine and
Sunshine hereby agrees to purchase, acquire and accept from
Con Sil as of 12:01 a.m. PST (the "Effective Time") on the
Closing Date, as defined in Section 10, all right, title and
interest in and to the Property, as defined in Section 2
hereof.
2. PROPERTY. The assets to be sold by Con Sil to Sunshine
pursuant to this Agreement (the "Property") shall include,
without limitation, all of Con Sil's transferable right, title
and interest in and to all property and assets, real and
personal, set forth in Exhibit "A" attached hereto and by this
reference incorporated herein.
3. ASSUMPTION OF OBLIGATIONS AND LIABILITIES BY SUNSHINE. Except
as set forth in this Agreement or the exhibits hereto,
Sunshine shall not assume or be responsible for any obligation
or liability of Con Sil whether fixed or contingent, known or
unknown, except to the extent required by agreement(s) between
Sunshine and another party or parties. Sunshine shall be
entitled to claim and assert any defense by way of
counterclaim, off-set, statute of limitations, or otherwise,
or any other rights of Con Sil with respect to any and all
such debts, obligations and liabilities of Con Sil, to the
same extent as Con Sil would be entitled to do absent the
assumption thereof by Sunshine.
<PAGE> 6
4. PURCHASE PRICE. The Purchase Price payable to Con Sil as
consideration for the sale of the Property shall be paid as
follows:
a. SEVEN HUNDRED FIFTY THOUSAND DOLLARS ($750,000) to be
paid at the rate of FIVE THOUSAND DOLLARS ($5,000) per
month from the date hereof with the balance due at
Closing.
b. As additional consideration Sunshine shall pay Con Sil a
Production Royalty under the terms of the Royalty Deed
set forth in Exhibit "B" attached hereto.
5. POSSESSION. Sunshine shall be entitled to immediate
possession of the Property upon execution of this Agreement.
Sunshine shall have free and unrestricted access to the
Property and shall have the exclusive right to enter upon and
occupy the Property for all purposes reasonably incident to
exploring for, developing, mining (by underground mining,
surface mining or any other method), extracting, milling,
stockpiling, storing, processing, removing and marketing
therefrom all ores, minerals and materials of every nature or
sort including the right of placing, constructing,
maintaining, using and, thereafter, removing such structures,
facilities, equipment, roadways, haulageways and other
improvements as may be necessary, useful or convenient for the
full enjoyment of all of the rights granted to Sunshine
herein.
6. REPRESENTATIONS AND WARRANTIES OF CON SIL. Con Sil represents
and warrants to Sunshine that:
a. ORGANIZATION. Con Sil is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Idaho and has all requisite power and
authority (corporate and other) to own, use or deal in
the Property.
b. QUALIFICATION. Con Sil is duly qualified to do business
and is in good standing in those states or other
jurisdictions where qualification is required in
connection with the ownership of, use of or dealing in
the Property.
c. AUTHORIZATION AND APPROVAL OF AGREEMENT. The execution,
delivery and performance by Con Sil of this Agreement and
all documents contemplated hereby have been duly and
effectively authorized by all necessary corporate action
on the part of Con Sil, and, except for approval by its
directors and stockholders, no consent, approval or other
action is required by Con Sil's Certificate of
Incorporation, By-Laws or otherwise.
<PAGE> 7
d. ABILITY TO CARRY OUT AGREEMENT. Con Sil is not a party
to, subject to or bound by any judgment, order, writ,
injunction or decree of any court or governmental body
which would (i) prevent the carrying out of this
Agreement, or (ii) materially adversely affect its
ownership and use of the Property. Neither the execution
and delivery of this Agreement by Con Sil, nor the
performance of Con Sil's obligations hereunder, will
constitute a violation of, or be in conflict with, or
result in the breach of, or constitute a default under,
or create (or cause the acceleration of the maturity of)
any debt, obligation or liability pursuant to, or result
in the creation or imposition of any security interest,
lien or other encumbrance upon the Property under (i) any
term or provision of the Certificate of Incorporation or
By-Laws of Con Sil, (ii) any obligation of Con Sil under
any loan or financing agreement, lease or other agreement
or instrument of any kind to which Con Sil is a party.
No consent or approval of any federal, state or local
authority is required for Con Sil's consummation of the
sale of the Property.
e. GOVERNMENTAL LICENSES, PERMITS AND APPROVALS. Con Sil
has attached as Exhibit "C" hereto a list of all federal,
state and local governmental licenses, permits,
contracts, agreements and approvals currently held or
being applied for by Con Sil pertaining to the Property
and all agreements and contracts between or among any
federal, state or local governmental authority, agency or
instrumentality and Con Sil relating to the Property and
which are not listed on other Exhibits hereto. All such
licenses, permits, contracts, agreements and approvals
are in full force and effect unless otherwise indicated
in Exhibit "C";
f. LEGAL PROCEEDINGS; COMPLIANCE WITH LAWS. Except as set
forth in Exhibit "D", attached hereto, no litigation,
proceedings or governmental investigation is pending or,
to the knowledge of a principal officer of Con Sil or Con
Sil, threatened with respect to Con Sil or the Property,
nor is Con Sil operating under or subject to, or in
default with respect to, any order, writ, injunction, or
decree of any court or governmental agency or body as of
the date of this Agreement. To the best of Con Sil's
knowledge, it has substantially complied with all laws,
rules and regulations, federal, state and local, which
affect the Property. There are no outstanding material
commitments to federal, state or local governmental
authorities for corrective action which require Con Sil
to act with respect to health, safety or the environment
and which relate to the operation or condition of the
Property, except as disclosed in Exhibits "C" and "D".
<PAGE> 8
The disclosures in Exhibit "D" relate to certain
environmental investigations and proceedings and the
possibility that claims relating to such investigations
and proceedings may be asserted in the future with
respect to the Property. Prior to the date hereof, Con
Sil has not received any notice or claim that it is a
potentially responsible party in any proceedings set
forth in Exhibit "D" and, to the best of its knowledge,
Con Sil is not aware that any such claims have been made
against Con Sil.
g. BROKER'S FEE. Con Sil has not caused to be incurred for
or by Sunshine any liability for any fee or commission in
the nature of a finder's, originator's or broker's fee in
connection with the subject matter of this Agreement.
h. MACHINERY AND EQUIPMENT. All machinery, equipment,
supplies, fixtures, vehicles and all other personal
property located in or on the Property are sold in the
condition existing at the Effective Time. Con Sil makes
no warranty or representation, express or implied, as to
merchantability, fitness for a particular purpose or
otherwise.
i. MATERIAL AGREEMENTS AND INSTRUMENTS. Except as set forth
in other Exhibits to this Agreement, Con Sil has attached
as Exhibit "E" hereto a list and brief description of all
contracts, indentures, guarantees, agreements, or other
instruments relating to the Property to which Con Sil is
a party as of the date hereof and which are to be
assigned and assumed by Sunshine pursuant to this
Agreement. Con Sil is not in default or breach, in any
material respects, under any of the foregoing and to the
best of Con Sil's knowledge no event has occurred which,
with the lapse of time or the giving of notice or both
would constitute such a material default or breach by Con
Sil except as set forth in Exhibit "E". Con Sil has
provided to Sunshine copies of all such material
contracts, indentures, guarantees, agreements, or other
instruments listed in Exhibit "E".
j. TITLE TO REAL PROPERTY. As to the real property
described in Exhibit "A", with the exception of the
unpatented mining claims, Con Sil warrants as follows:
i) Con Sil has, to the best of its knowledge, good and
marketable title in fee simple or such lesser
estate indicated on Exhibit "A".
ii) Con Sil has not, prior to the time of this
Agreement, conveyed any interest in said property
<PAGE> 9
to any third party except as indicated on Exhibit
"A".
iii) The property is free from all liens, encumbrances
and charges done, made, or suffered by Con Sil or
its agents, except for a) current taxes and
assessments not delinquent, and b) liens,
encumbrances, and charges which do not materially
detract from the value of or interfere with the use
of the properties subject thereto or affected
thereby.
iv) Sunshine shall have quiet enjoyment against Con Sil
and its agents.
v) As to the unpatented mining claims, Con Sil
warrants that, to the best of its knowledge,
information and belief, said claims have been
located and maintained in compliance with all
applicable laws in the State of Idaho and the
United States of America; that the land subject to
the unpatented claims has not now been claimed by
any third party; that Con Sil has filed all
required proofs of labor with respect to the same;
provided, however, Con Sil does not warrant against
a claim of invalid discovery by any third party.
7. REPRESENTATIONS AND WARRANTIES OF SUNSHINE. Sunshine
represents and warrants to Con Sil that:
a. ORGANIZATION. Sunshine is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Delaware and has all requisite power and
authority (corporate and other) to carry on its business
as now being conducted.
b. AUTHORIZATION AND APPROVAL OF AGREEMENT. The execution,
delivery and performance by Sunshine of this Agreement
and all documents contemplated hereby have been duly and
effectively authorized by all necessary corporate action
on the part of Sunshine, and no consent, approval or
other action by its stockholders is required by
Sunshine's Certificate of Incorporation, By-Laws or
otherwise.
c. ABILITY TO CARRY OUT AGREEMENT. Sunshine is not a party
to, subject to, or bound by any judgment, order, writ,
injunction, or decree of any court or governmental body
which would prevent the carrying out of this Agreement.
Neither the execution and delivery of this Agreement nor
the performance of Sunshine's obligations hereunder will
constitute a violation of, or be in conflict with, or
<PAGE> 10
result in the breach of, or constitute a default under
(i) any term or provision of the Certificate of
Incorporation or By-Laws of Sunshine, (ii) any obligation
of Sunshine under any loan or financing agreement, lease
or other agreement or instrument of any kind to which
Sunshine is a party, or (iii) any statute or law. No
consent or approval of any Federal, state or local
authority is required for the consummation or validity
of the purchase of the Property.
d. BROKER'S FEE. Sunshine has not caused to be incurred for
or by Con Sil any liability for any fee or commission in
the nature of a finder's, originator's or broker's fee in
connection with the subject matter of this Agreement.
8. COVENANTS OF CON SIL. It is covenanted and agreed that
between the date hereof and the Closing Date:
a. CONDUCT OF BUSINESS. Con Sil shall not, without the
prior written consent of Sunshine:
i. enter into any agreement (other than agreements
entered into in the ordinary course of business)
which will become an obligation of Sunshine or
would otherwise affect the Property;
ii. lease, mortgage, or otherwise encumber any of the
Property; or
iii. enter into discussions or negotiations with any
third party concerning the sale of any of the
Property or timber rights associated with the
Property prior to the Closing Date, or grant
options or rights, or enter into any contract or
commitment to sell any of the Property or timber
rights.
b. ACCESS TO PROPERTIES, BOOKS AND RECORDS. Con Sil has
made and will, during normal business hours and subject
to reasonable notification by Sunshine to Con Sil, and
subject to Con Sil's reasonable requirements and rules,
permit Sunshine and Sunshine's authorized officers,
employees, attorneys, engineers, accountants and other
agents and representatives to have access to the
properties, books and records, and documents relating to
the Property. Con Sil shall have the right, in lieu
thereof, where such information is included within Con
Sil's other corporate records, to make copies of or
provide such information from such books and records and
documents as Sunshine may from time to time reasonably
request.
<PAGE> 11
c. LIENS. Con Sil will have discharged or released by the
Closing Date all mortgages, liens (except liens, if any,
for taxes not yet due and inchoate liens of materialmen,
mechanics, workmen, repairmen, employees or other similar
liens arising in the ordinary course of business which
are not delinquent or which are bonded, all of which it
agrees to discharge in due course unless such are to be
assumed by Sunshine as provided herein), security
interests and encumbrances on the Property and
properties.
d. CLOSING LETTER. Con Sil shall provide Sunshine a letter
from the Vice President of Con Sil at Closing to the
effect that from the date of signing this Agreement to
the Effective Time there has been no material change in
respect to the Property, except for changes resulting
from Sunshine's activities pursuant to its right of
possession of the Property, and that all disclosures in
Exhibits "A", "C", "D", and "E" are current as of the
Effective Time.
9. COVENANTS OF SUNSHINE. It is covenanted and agreed that
between the date hereof and the Closing Date:
a. CONDUCT OF BUSINESS.
i. Sunshine shall perform or cause to be performed all
work upon the Property in a good and workmanlike
manner and in accordance with sound mining and
engineering practices.
ii. Sunshine shall not, without the prior written
consent of Con Sil, lease, mortgage, or otherwise
encumber or assign any interest in the Property.
b. COMPLIANCE WITH LAW AND PERMITS. All work performed or
caused to be performed by Sunshine upon the property
shall be in substantial compliance with all applicable
federal, state and local laws, rules and regulations and
Sunshine shall comply with all licenses and permits set
forth in Exhibit "C".
c. MAINTENANCE OF PROPERTY. Sunshine shall take or cause to
be taken such steps as shall be necessary to maintain the
Property in good standing.
d. LIENS. Sunshine agrees to keep the Property free and
clear from any liens arising from Sunshine's operations
and pay promptly for all labor performed, and for all
supplies, material and equipment used or placed on the
Property by or for it, provided that any such lien placed
upon the Property shall not be a breach of this section
<PAGE> 12
provided that Sunshine, in good faith, is diligently
contesting the validity of such lien.
e. INDEMNITY. Sunshine shall indemnify and save harmless
Con Sil from and against any and all claims, demands,
suits or causes of action in law or equity of whatsoever
kind and character resulting from any act, operations or
negligence of Sunshine on the Property or in connection
therewith between the date hereof and the Closing Date.
f. CONFIDENTIALITY. In the event of the termination of this
Agreement, Sunshine shall promptly return to Con Sil all
documents, work papers, and other material obtained by
Sunshine or on its behalf from Con Sil or Con Sil's
representatives as a result of this Agreement or in
connection herewith, whether so obtained before or after
the execution hereof, and Sunshine shall not retain any
copy or other reflection of any such documents, work
papers and other material. Sunshine shall at all times
prior to the Closing Date, and in the event of
termination of this Agreement, cause any information so
obtained to be kept confidential and will not use, or
permit the use of, such documents, work papers and other
materials in its business or in any other manner or for
any other purpose, unless such information (i) becomes
generally available to the public other than as a result
of a disclosure by Sunshine or its representatives, (ii)
was available to Sunshine on a non-confidential basis
prior to its disclosure to Sunshine by Con Sil or its
representatives, or (iii) becomes available to Sunshine
on a non-confidential basis from a source other than Con
Sil or its representatives, provided that such source is
not bound by a confidentiality agreement with Con Sil or
its representatives; provided, further, that to the
extent information obtained by Sunshine as a result of
this Agreement, whether so obtained before or after the
execution hereof, relates to Con Sil or any affiliate,
Sunshine's obligation hereunder shall survive for a
period of three years from the date of this Agreement and
shall not terminate on the Closing Date or upon
termination of this Agreement.
g. Sunshine shall permit Con Sil's representative access to
the Property and to all information (including, without
limitation, all exploration results) generated or
acquired by Sunshine with respect to the Property.
10. CLOSING. The Closing shall take place at 9:00 a.m., local
time, in the offices of Con Sil located at 6500 Mineral Drive,
Coeur d'Alene, Idaho, 83814, on the first business day
following approval of the Agreement by the Con Sil
shareholders, or such other date mutually agreed upon in
<PAGE> 13
writing by the parties hereto (the "Closing Date"), provided
that the Closing must occur prior to November 1, 1995, unless
extended by mutual written agreement.
11. TRANSFERS AND DELIVERIES BY SUNSHINE. Sunshine shall execute,
where applicable, and deliver to Con Sil at the Closing the
following:
a. The Consideration provided for in Section 4 hereto
consisting of:
i. Seven hundred fifty thousand dollars ($750,000)
less the sum of the monthly five thousand dollars
($5,000) payments made from the date of this
Agreement until Closing; and
ii. the Royalty Deed set forth in Exhibit "B".
b. Written Opinion of the legal counsel of Sunshine, dated
as of the Closing Date, substantially stating, in his
opinion, that Sunshine's corporate existence and good
standing are as represented in Section 7 hereof; that
Sunshine has taken all corporate action necessary to
authorize the execution and performance of this
Agreement; that this Agreement and the instruments
delivered by Sunshine to Con Sil pursuant to or in
connection with this Agreement have been duly executed
and delivered by Sunshine and are valid, binding and
enforceable against Sunshine in accordance with their
respective terms (except to the extent that enforcement
is affected by laws pertaining to bankruptcy,
reorganization, insolvency and creditors' rights and by
the availability of injunctive relief and specific
performance); that neither the execution and delivery by
Sunshine of this Agreement nor its compliance herewith,
will conflict with Sunshine's Certificate of
Incorporation or By-Laws, or to his knowledge will result
in a default under or breach of the terms, conditions or
provisions of any agreement or instrument to which
Sunshine is a party or by which it may be bound; and that
neither the execution and delivery of this Agreement by
Sunshine nor its compliance herewith will result in a
violation of any statute, regulation, law, ordinance, or,
to the best of his knowledge, order, writ, judgment or
decree of any court, agency or governmental authority;
that Sunshine is not a party to or affected by any
pending legal, administrative or other action which
materially affects Sunshine's execution, delivery and
performance of this Agreement.
<PAGE> 14
c. Executed Counterparts of all transfers and assignments
and assumptions (where required) to transfer or assign to
Sunshine the Property.
12. TRANSFERS AND DELIVERIES BY CON SIL. Con Sil shall execute,
where applicable, and deliver to Sunshine at the Closing,
unless otherwise provided herein, the following:
a. Physical Possession of all tangible property constituting
part of the Property.
b. Bill of Sale for such, if any, of the personal property
requiring a transfer of title to Sunshine.
c. Deed conveying to Sunshine the interests in patented
mining claims, certain fee property and unpatented mining
claims to be conveyed hereunder, in the form of Exhibit
"F" hereto.
d. Written Opinion of legal counsel for Con Sil, dated as of
the Closing Date, substantially stating, in his opinion,
that Con Sil's corporate existence and good standing are
as stated in Section 6 hereof; that Con Sil has taken all
corporate action necessary to authorize the execution and
performance of this Agreement; that this Agreement and
the instruments delivered by Con Sil to Sunshine pursuant
to or in connection with this Agreement have been duly
executed and delivered by Con Sil and are valid, binding
and enforceable against Con Sil in accordance with their
terms (except to the extent that enforcement is affected
by laws pertaining to bankruptcy, reorganization,
insolvency and creditors' rights and by the availability
of injunctive relief and specific performance); that
neither the execution and delivery by Con Sil of this
Agreement nor its compliance herewith will conflict with
Con Sil's Certificate of Incorporation or By-Laws or
result in the creation or imposition of any lien, charge
or encumbrance upon the Property or, to the best of his
knowledge, result in a default under, or a breach of the
terms, conditions or provisions of, any agreement or
instrument affecting ownership and use of the Property
to which Con Sil is a party or by which it is bound; that
Con Sil is not a party to, nor subject to or bound by,
any judgment, injunction or decree of any court or
governmental authority which may restrict or interfere
with the performance of this Agreement or such other
instruments and documents; that except as set forth in
Exhibit "D" hereto, to the best of his knowledge, Con Sil
is not a party to, or affected by, any pending legal,
administrative or other action, which materially
adversely affects the Property;
<PAGE> 15
e. Certificates of Title or Origin (or like documents) with
respect to any item of equipment for which a certificate
of title or origin is required;
f. Closing Letter as provided for in Section 8d.
13. PRORATIONS. Expenses which will require proration will be
prorated as follows:
a. AD VALOREM TAXES. All ad valorem taxes (both real and
personal property) shall be prorated between the parties
as of the Closing Date and cash settlement therefore
shall be made at Closing.
b. UTILITIES. Con Sil will request that utility companies
take meter readings or follow similar procedures to
invoice Con Sil for services provided through the
Effective Time, which invoices shall be paid by Con Sil.
Other utility bills received after the Effective Time
which require proration will be paid by Sunshine.
Sunshine will invoice Con Sil for its pro rata share of
such invoices and will be promptly reimbursed by Con Sil.
c. OTHER PRORATABLE EXPENSES. Invoices received after the
Effective Time for other proratable expenses will be paid
by Sunshine. Sunshine will invoice Con Sil for its pro
rata share of such invoices and will be promptly
reimbursed by Con Sil.
14. CONDITIONS TO OBLIGATIONS OF SUNSHINE. The obligation of
Sunshine to close under this Agreement is subject to the
satisfaction at or prior to the Closing Date of each of the
following conditions precedent, unless waived by Sunshine:
a. SHAREHOLDER APPROVAL. The Con Sil Shareholders shall
have approved this Agreement.
b. SATISFACTORY PROCEEDINGS. All actions to be taken by Con
Sil in connection with the transactions contemplated
hereby and all instruments and documents required to be
delivered by Con Sil in connection therewith or incident
thereto shall be satisfactory to Sunshine and its
counsel.
c. REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties of Con Sil contained in
Section 6 of this Agreement shall be true and correct on
and as of the Closing Date in all material respects.
<PAGE> 16
15. CONDITIONS TO OBLIGATIONS OF CON SIL. The obligation of Con
Sil to close under this Agreement is subject to the
satisfaction at or prior to the Closing Date of each of the
following conditions precedent, unless waived by Con Sil:
a. SHAREHOLDER APPROVAL. The Con Sil Shareholders shall have
approved this Agreement and the holders of no more than
333,000 shares of Con Sil Common Stock shall have
exercised dissenters' rights.
b. SATISFACTORY PROCEEDINGS. All actions to be taken by
Sunshine in connection with the transactions contemplated
hereby and all instruments and documents required to be
delivered by Sunshine in connection therewith or incident
thereto shall be satisfactory to Con Sil and its counsel.
c. REPRESENTATIONS AND WARRANTIES CORRECT. All
representations and warranties of Sunshine contained in
Section 7 of this Agreement shall be true and correct on
and as of the Closing Date in all material respects.
d. ASSUMPTION. Sunshine shall have assumed the contracts,
permits, leases and obligations set forth in Sections C
and E.
16. FURTHER ASSURANCES OF CON SIL AND SUNSHINE. After the Closing
Date, Con Sil shall perform such other actions, and shall
execute, acknowledge and deliver such assignments, transfers,
consents and other documents as Sunshine reasonably requests
to convey title to purchaser and protect Sunshine's right,
title and interest in, and enjoyment of, the Property intended
to be assigned and transferred to Sunshine pursuant to this
Agreement; and Sunshine shall perform all such other action
and shall execute, acknowledge and deliver all such other
documents as Con Sil may reasonably request to perfect and
protect Con Sil's rights under this Agreement. Each party
agrees to cooperate with the other party, at its own cost and
expense, with respect to the defense of any claims or
litigation commenced by any third party against the other
party subsequent to the Closing Date which relates to Con Sil
or the Property, and shall provide such witnesses and
documents as the other party reasonably requests.
17. BOOKS, RECORDS, AND MISCELLANEOUS. On the Closing Date, or as
soon thereafter as is practicable, Con Sil shall turn over to
Sunshine all of the books, records, maps, personal property
tax returns and files, or copies thereof (the "Documents")
which relate solely to the Property. Both prior to and after
the Closing Date, Con Sil agrees to make its books and
records relating to the Property available for inspection by
Sunshine at any reasonable time upon reasonable request, or,
in lieu thereof and at Con Sil's option, shall make such
<PAGE> 17
copies or provide such information from such books and records
as Sunshine may from time to time reasonably request. After
the Closing Date, the Documents will be retained by Sunshine
in part for Con Sil's benefit and will be available for review
and copying by Con Sil for any proper purpose upon reasonable
notice during Sunshine's normal business hours. Con Sil or
Sunshine, as the case may be, shall use their best efforts not
to destroy any Documents without 30 days prior written notice
to the other, for a period of 5 years after the Closing Date.
18. FEES AND EXPENSES.
a. FEES. Sunshine shall pay all transfer fees payable in
connection with the purchase and sale hereunder, and all
recordation and filing fees and other fees relating to
the documents.
b. EXPENSES. Each of the parties hereto will pay its own
expenses incident to the preparation and carrying out of
this Agreement and the expenses and fees involved in the
preparation and delivery of all documents, reports and
opinions required to be delivered by or on behalf of it
hereunder, whether or not the transactions contemplated
hereby are consummated.
19. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; COVENANTS AND
AGREEMENTS.
a. REPRESENTATIONS AND WARRANTIES. The representations and
warranties set forth in Sections 6 and 7 shall survive
the Closing Date from the Effective Time until December
31, 1996, at which time they shall automatically
terminate and shall not merge into any of the deeds,
assignments, bill of sale or other instruments delivered
at Closing.
b. COVENANTS, CONDITIONS AND AGREEMENTS. The Covenants and
Conditions set forth in Sections 8 and 9 (except for
Sections 8c, 8e, 9e, and 9f), shall terminate as of and
shall not survive the Closing Date.
c. Except as otherwise provided in Sections 19a and 19b, all
the obligations of each party under Section 20 shall
survive the Closing Date.
20. INDEMNIFICATION. The parties hereto shall be indemnified as
follows:
a. Con Sil shall defend, indemnify and hold harmless
Sunshine, its officers, directors, successors and assigns
against all damages, claims, losses, liabilities, costs
and expenses which arise out of the breach of the
<PAGE> 18
representations and warranties, the covenants and
agreements which survive the Closing pursuant to Section
19 except for loss of profits; consequential, incidental
or special damages.
b. Sunshine shall defend, indemnify and hold harmless Con
Sil, its officers, directors, successors and assigns
against all damages, claims, losses, liabilities, costs
and expenses which arise out of the breach of the
representations and warranties, the covenants and
agreements which survive the Closing pursuant to Section
19 except for loss of profits; consequential, incidental
or special damages.
c. The right of either party to indemnification hereunder is
contingent on receipt by the indemnifying party of a
promptly delivered written notice of a claim for
indemnification from the party seeking such
indemnification.
d. Upon receipt of a notice claiming indemnification the
indemnifying party shall proceed to assume the defense
with respect to any third party litigation then pending
with respect to such claims.
e. The party seeking indemnification for any third party
claims pursuant to this Section shall have the right, at
its sole cost and expense, to participate in any legal
action in respect of which indemnification is sought,
provided, however, that the party from whom
indemnification is sought shall have the sole right to
settle or otherwise dispose of such legal action in any
manner it deems appropriate without the consent of the
other party.
f. In the event that, after receipt of notice under Section
20c above, the indemnifying party fails to assume the
defense of any action brought by a third party where the
obligation to defend is owed to the party seeking
indemnification, then the party seeking indemnification
shall be entitled to its reasonable attorney's fees in
addition to recoveries allowed under this Section.
21. ENVIRONMENTAL MATTERS. Sunshine acknowledges that Con Sil has
advised Sunshine that: (i) the Property was used by Con Sil
and previous owners or lessees for mining activities; and (ii)
due to the past and present use of the Property, there may be
Hazardous Substances or environmental conditions associated
with the Property. Except as specifically provided or
disclosed in this Section 21, Con Sil makes no warranty or
representation of any type or character, written or implied,
regarding Hazardous Substances situated on or environmental
<PAGE> 19
conditions associated with the Property, or that Con Sil has
complete knowledge or information about these matters.
Sunshine hereby agrees to accept the Property in an "as is"
condition.
Con Sil and Sunshine hereby agree to an allocation of their
respective environmental liabilities whereby: (1) Sunshine
hereby assumes all environmental, reclamation, and permit-
related responsibilities, obligations and liabilities
occurring on the Property which arises from or relates to any
Hazardous Substance Law caused by or arising from or relating
to activities on or operations or ownership of or conditions
existing on the Property, whether prior to or after the
Closing Date; (2) Con Sil hereby assumes all environmental
and reclamation liability occurring off-site (i.e., at any
location except on the Property) which arises from or relates
to any Hazardous Substance caused by or arising from or
relating to activities on or operations or ownership of or
conditions existing on the Property prior to the Closing Date;
and (3) Sunshine hereby assumes all environmental and
reclamation liability occurring off-site (i.e., at any
location except on the Property) which arises from or relates
to any Hazardous Substance caused by or arising from or
relating to activities on or operations or ownership of or
conditions existing on the Property on or after the Closing
Date.
In the case of (1) or (3) above, Sunshine agrees to protect,
indemnify, and hold harmless Con Sil and shall have the right
and duty to defend Con Sil against all claims and actions by
governmental agencies and other third parties, and to
discharge all obligations and liabilities of Sunshine or Con
Sil to such governmental agencies and other third parties. In
the case of (2) above, Con Sil agrees to protect, indemnify,
and hold harmless Sunshine and shall have the right and duty
to defend Sunshine against all claims and actions by
governmental agencies and other third parties, and to
discharge all obligations and liabilities of Con Sil or
Sunshine to such governmental agencies and other third
parties.
Any indemnification sought under this Section 21 shall be
governed in applicable part by the provisions of Section 20 c
through f.
In entering into the agreements set out in this Section,
neither Con Sil nor Sunshine is admitting any liability to any
third parties regarding the matters addressed in this Section.
Con Sil and Sunshine also agree and acknowledge that
invocation of the cross indemnities outlined here may,
depending on the facts, require the parties to allocate
<PAGE> 20
between themselves responsibility for certain claims,
obligations or liabilities.
As used herein "Hazardous Substance" means any substance,
material, or waste (i) which contains gasoline, diesel fuel,
or other petroleum hydrocarbons, (ii) which is flammable,
explosive, radioactive, corrosive, carcinogenic, hazardous,
toxic, or a pollutant or contaminant, (iii) the presence of
which on the Property causes or threatens to cause a nuisance
or health hazard affecting the Property, or (iv) the presence
of which on the Property requires investigation or remediation
under any Hazardous Substance Law, as the same may hereafter
be amended, and shall include without limitation:
a. those substances included within the definitions of
"hazardous substances", "hazardous materials", "toxic
substances", "pollutant or contaminant" or "solid waste"
in CERCLA, RCRA, and the Hazardous Materials
Transportation Act, 49 U.S.C. Sections 1801, et seq., as
amended, and in the regulations promulgated pursuant to
said laws,
b. those substances listed in the United States Department
of Transportation Table (49 C.F.R. 172.101 and amendments
thereto) or by the Environmental Protection Agency (or
any successor agency) as hazardous substances or
materials (40 C.F.R. part 302 and amendments thereto),
c. such other substances, materials, and wastes which are or
become regulated under applicable local, state, or
federal law, or the United States government, or which
are classified as hazardous, dangerous, infectious or
toxic under federal, state or local laws or regulations,
d. any material, waste or substance which is (A) petroleum,
(B) asbestos, (C) polychlorinated biphenyls or (D)
designated as a "hazardous substance" or "oil" pursuant
to Section 311 of the Clean Water Act, 33 U.S.C. Sections
1251, et seq., (33 U.S.C. 1321) or listed pursuant to
Section 307 of the Clear Water Act (33 U.S.C. 1317), and
e. any "pesticide" as defined in the Federal Insecticide,
Fungicide and Rodenticide Act, 7 U.S.C. 136(U);
"Hazardous Substance Law" means CERCLA; the RCRA; the
Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq., as amended; the Clean Water Act, 33 U.S.C.
Sections 1251, et seq., as amended; the Clean Air Act, 42
U.S.C. Sections 7401, et seq., as amended; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601, et seq., as
amended; the National Environmental Policy Act, 42 U.S.C.
Sections 4321, et seq., as amended; the Occupational Safety
<PAGE> 21
and Health Act, 29 U.S.C. Sections 651, et seq., as amended;
the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq., as amended; and any other federal, state, or
local law, common law, ordinance, regulation, rule or
interpretation thereof, whether currently in force or enacted
in the future, which pertains to health, public welfare,
industrial hygiene, hazardous waste or environmental
conditions or which regulates or proscribes the use, storage,
disposal, clean-up, transportation, release or threatened
release into the environment or presence of materials or
substances which have been determined to be a nuisance or
dangerous, toxic or hazardous or a pollutant or contaminant.
The term includes any licenses, permits, plans, or approvals
generated pursuant to or as a result of any of the above.
22. SHAREHOLDER CONSENT. The parties acknowledge that
consummation of the sale of the Property contemplated by this
Agreement is subject to the approval by the holders of a
majority of the issued and outstanding shares of Con Sil.
23. TERMINATION OF AGREEMENT. This Agreement and the transactions
contemplated hereby will terminate as follows:
a. On October 1, 1995, if the shareholders of Con Sil shall
not have approved the Agreement
b. On November 1, 1995, if the Closing shall not have taken
place, unless such date is extended by mutual agreement.
c. On the Closing Date by Sunshine if the conditions set
forth in Section 14 shall not have been met or waived;
d. On the Closing Date by Con Sil if the conditions set
forth in Section 15 shall not have been met or waived; or
e. At any time, by mutual consent of the parties hereto;
24. LIABILITY ON TERMINATION. In the event of termination of this
Agreement pursuant to Section 23, neither of the parties
hereto shall have any liability of any kind to the other
except that Sunshine shall return all books, records and
documents furnished to it by Con Sil and remain bound by the
obligations contained herein in Section 9e and 9f hereof.
25. SURRENDER OF POSSESSION ON TERMINATION. Upon termination of
this Agreement for any reason:
a. Sunshine will surrender peaceable possession of the
Property, and Con Sil shall thereupon have the right to
take full and complete possession thereof, without
further consideration, subject to the rights of Sunshine
to go upon the Property for a period not to exceed six
<PAGE> 22
months for the purpose of removing and disposing of the
buildings, structures, improvements, machinery, equipment
and supplies erected or placed in or upon the Property by
Sunshine. Any such property not removed within the time
provided shall become the sole property of Con Sil and
Sunshine shall have no further right, title or interest
with respect thereto, except the termination of this
Agreement shall have no effect on the validity of the
Amended Agreement and Easement dated January 8, 1979 by
and between Sunshine and Con Sil.
b. Sunshine shall have the right of reasonable ingress to
and egress from the Property for so long after
termination of this Agreement as is necessary for
Sunshine to accomplish reclamation or restoration of the
Property pursuant to law for activities of Sunshine on
the Property, or to make such inspections as may be
required of Sunshine by state or federal law.
c. Within a reasonable time after termination, Sunshine
agrees to provide Con Sil with copies of all factual data
generated by Sunshine's activities on the Property prior
to termination; however, Sunshine shall not be liable to
Con Sil for the completeness or accuracy thereof.
d. Con Sil shall be entitled to retain all monthly payments
made pursuant to Section 4a. to date of termination.
26. MISCELLANEOUS
a. EXHIBITS AND SCHEDULES. All Exhibits and Schedules
attached to this Agreement shall be deemed part of this
Agreement and incorporated herein, where applicable, as
if fully set forth herein.
b. NO ASSIGNMENT, SUCCESSORS, ASSIGNS, ETC. The terms and
conditions of this Agreement shall inure to the benefit
of, and shall be binding upon, the parties hereto, their
respective successors and assigns; provided, however,
that this Agreement shall not be assigned or conveyed by
any party to any person or entity without the prior
written consent of the other party hereto, except that
Sunshine may assign this Agreement without consent to any
corporation controlling or controlled by it (the term
control shall mean an ownership and controlling interest
of greater than 50.1%). In the event of an assignment,
the assigning party shall not be relieved of any of its
obligations and undertakings contracted for herein.
c. GOVERNING LAW. This Agreement shall be construed in
accordance with, and governed by, the law of the state of
Idaho applicable to agreements made and to be performed
<PAGE> 23
wholly within this jurisdiction. Venue to enforce any
claim arising from any provision of this Agreement shall
lie in Kootenai County, Idaho.
d. COUNTERPARTS. This Agreement may be executed
simultaneously in any number of counterparts, each of
which shall be deemed an original and all of which shall
constitute one and the same instrument.
e. NOTICES. Any notices or other communications, including
a notice of change in address, shall be in writing and
shall be considered to have been duly given on the
earlier of (1) the date of actual receipt or (2) three
days after deposit in the first-class certified U.S.
mail, postage prepaid, return receipt requested:
If to Con Sil, to:
Consolidated Silver Corporation
6500 Mineral Drive
Coeur d'Alene, Idaho 83814-8788
Attention: President
If to Sunshine, to:
Sunshine Precious Metals, Inc.
877 West Main - Suite 600
Boise, Idaho 83702
f. AMENDMENT. This Agreement may be amended at any time
prior to Closing by written instrument executed by the
parties hereto.
g. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto relating to the
subject matter herein.
h. WAIVER. Any default, misrepresentation or breach of any
covenant or warranty by a party in connection with this
Agreement may be waived in writing by the other party. No
such waiver shall be deemed to extend to any prior or
subsequent default, misrepresentation or breach of any
covenant or warranty, or affect any rights arising by
virtue of any prior or subsequent default,
misrepresentation or breach of any covenant or warranty.
<PAGE> 24
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers,
all as of the day and year first above written.
CONSOLIDATED SILVER SUNSHINE PRECIOUS
CORPORATION METALS, INC.
By: /s/ Ralph Noyes By: /s/ John S. Simko
--------------------------- -----------------------
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 735
<SECURITIES> 0
<RECEIVABLES> 17
<ALLOWANCES> 0
<INVENTORY> 2
<CURRENT-ASSETS> 754
<PP&E> 1,529
<DEPRECIATION> (1,529)
<TOTAL-ASSETS> 754
<CURRENT-LIABILITIES> 32
<BONDS> 0
<COMMON> 821
0
1,250
<OTHER-SE> (1,349)
<TOTAL-LIABILITY-AND-EQUITY> 754
<SALES> 0
<TOTAL-REVENUES> 24
<CGS> 0
<TOTAL-COSTS> 56
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (33)
<INCOME-TAX> 3
<INCOME-CONTINUING> (30)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (30)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
