SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 18, 2000
CROWN RESOURCES CORPORATION
(Exact name of registrant as specified in its charter)
Washington 0-17480 84-1097086
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation) Number)
1675 Broadway, Suite 2400, Denver, Colorado 80202
(Address of Principal Executive Offices)
Registrant's telephone number,
including area code: (303) 534-1030
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets.
On October 18, 2000 the Company's subsidiary, Solitario
Resources Corporation ("Solitario"), completed a corporate
reorganization as contemplated by a plan of arrangement between
Solitario and Altoro Gold Corp. ("Altoro") of Vancouver, B.C.
Altoro owns several mineral resource exploration properties in
Bolivia and Brazil. Two of these properties are the 126,000 - acre
Pedra Branca property in Brazil which covers a favorable Platinum
Group Metal (PGM) ultra-mafic complex and the 125,000 - acre Rincon
del Tigre property in Bolivia with a PGE bearing ultra mafic
complex. Solitario plans on exploring Altoro properties with its
own personnel and/or with existing property and new joint venture
partners.
As of the effective date, every shareholder of Altoro was
issued one common share of Solitario for every three common shares
of Altoro and one Solitario warrant for every three Altoro
warrants. As a result, Solitario issued an additional 6,228,894
shares and reserved 825,241 shares for issuance upon the exercise
of 825,241 warrants to Altoro warrant holders.
As a result of this corporate reorganization, the Company's
ownership in Solitario is now at 41.3 percent.
Exhibit
Number Description
2.1 Arrangement Agreement between Altoro Gold Corp of
Vancouver, B.C. and Solitario Resources
Corporation to proceed with a merger by way of a
Plan of Arrangement.
20.1 Solitario Resources Corporation's Press Release
dated October 19, 2000.
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.
CROWN RESOURCES CORPORATION
Dated: November 9, 2000 By: /s/ James R. Maronick
James R. Maronick
Chief Financial Officer
INDEX TO EXHIBITS
Exhibit
Number Description Page No.
2.1 Arrangement Agreement between Altoro Gold Corp of
Vancouver, B.C. and Solitario Resources Corporation to
proceed with a merger by way of a Plan of Arrangement.
20.1 Solitario Resources Corporation's Press Release
dated October 19, 2000.
<PAGE>
Exhibit 2.1
ARRANGEMENT AGREEMENT
THIS ARRANGEMENT AGREEMENT made as of the 3 RD day of August, 2000.
BETWEEN:
ALTORO GOLD CORP., a corporation incorporated pursuant to the laws of the
Province of British Columbia, and having a head office at Suite 709, 700
West
Pender Street, Vancouver, British Columbia, V6C 1G8
("Altoro")
OF THE FIRST PART
AND:
SOLITARIO RESOURCES CORPORATION, a corporation incorporated
pursuant to the laws of the State of Colorado, and having a head office at
Suite 2400, 1675 Broadway Street, Denver, Colorado, 80202
("Solitario")
OF THE SECOND PART
WHEREAS:
A. Altoro and Solitario wish to proceed with a proposed merger by way of
Plan of Arrangement under the Act
whereby the Members of Altoro will exchange their Altoro Common Shares for
Solitario Common Shares with the
result that Altoro will become a wholly-owned subsidiary of Solitario;
B. Altoro proposes to convene a meeting of its Members to consider the
Arrangement on the terms set forth in
the Plan of Arrangement annexed as Appendix 1 hereto;
C. The board of directors of Altoro has unanimously determined that it
would be advisable and in the best interests
of Altoro for Altoro to enter into this Agreement;
D. Upon the Arrangement becoming effective, among other things, the
outstanding Altoro Common Shares will
be exchanged for Solitario Common Shares in accordance with the provisions
of this Agreement and the Plan of
Arrangement; and
E. The parties have entered into this Agreement to provide for the matters
referred to in the foregoing recitals and
for other matters relating to the Arrangement.
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged
by each of the parties hereto, the parties hereto hereby covenant and agree
as follows:
ARTICLE 1
DEFINITIONS, INTERPRETATION AND APPENDICES
1.1 Definitions
In this Agreement, including the recitals hereto, unless there is something
in the subject matter or context
inconsistent therewith, the following capitalized words and terms shall
have the following meanings:
(a) "Acquisition Proposal" means collectively any enquiries or proposals
regarding any merger,
amalgamation, take-over bid, sale of material assets (or any lease, long-
term supply agreement or
other arrangement having the same economic effect as a sale), any material
sale of Altoro Common
Shares or Altoro Warrants, units or rights or interests therein or thereto
or similar transactions
involving Altoro or its Subsidiaries;
<PAGE>
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b) "Act" means the Company Act, R.S.B.C. 1996, c.62, as amended;
(c) "Agreement" means this arrangement agreement including the Appendices
attached hereto, as the
same may be supplemented or amended from time to time;
(d) "Altoro" means Altoro Gold Corp., a corporation incorporated under the
provisions of the Act;
(e) "Altoro Common Shares" means the common shares without par value which
Altoro is authorized
to issue;
(f) "Altoro Options" means the rights (whether or not vested) to purchase
Altoro Common Shares
which are presently or from time to time outstanding;
(g) "Altoro Warrants" means the presently outstanding common share purchase
warrants of Altoro
entitling the holders to purchase Altoro Common Shares in accordance with
the terms and conditions
thereof;
(h) "Applicable Laws" means collectively the Competition Act (Canada), the
Investment Canada Act,
the applicable securities laws of the provinces and territories of Canada,
the Act, the Colorado
Business Corporation Act, the rules of the TSE, the CDNX, the United States
Securities Act of 1933,
the United States Securities Exchange Act of 1934, as amended, and state
securities or "blue-sky"
laws of the states of the United States;
(i) "Arrangement" means the statutory arrangement involving Altoro, the
Members and Solitario,
pursuant to section 252 of the Act as contemplated by the provisions of
this Agreement and the Plan
of Arrangement or any amendment or variation thereto made in accordance
with the terms thereof;
(j) "Business Day" means a day which is not a Saturday, Sunday or statutory
holiday in British
Columbia;
(k) "CDNX" means the Canadian Venture Exchange;
(l) "Court" means the Supreme Court of British Columbia;
(m) "Effective Date" means the date that certified copies of the Final
Order and Agreement, including
the Plan of Arrangement, are accepted for filing by the Registrar under the
Act giving effect to the
Arrangement;
(n) "Effective Time" means 12:01 a.m., Vancouver time, on the Effective
Date;
(o) "Final Order" means the final order of the Court approving the
Arrangement pursuant to the Act;
(p) "Information Circular" means the definitive form, together with any
amendments thereto, of the
management information circular of Altoro prepared in accordance with
applicable laws to be sent
to the Members in connection with the Meeting;
(q) "Interim Order" means the interim order of the Court pursuant to the
application therefor
contemplated by section 4.3 hereof;
(r) "Meeting" means the extraordinary meeting of the Members and any
adjournment or postponement
thereof, to be held to consider, among other things, and, if deemed
advisable, approve the
Arrangement;
(s) "Members" means the holders of Altoro Common Shares;
<PAGE>
- 3 -(
t) "Person" means and includes an individual, sole proprietorship,
partnership, unincorporated
association, unincorporated syndicate, unincorporated organization, trust,
body corporate, a trustee,
executor, administrator or other legal representative and the Crown or any
agency or instrumentality
thereof;
(u) "Plan of Arrangement" means the plan of arrangement which is attached
to this Agreement as
Appendix 1 and any amendment or variation thereto made in accordance with
section 6.1 hereof;
(v) "Private Placement" means the private placement by Altoro of up to
1,000,000 units, comprised of
an aggregate of 1,000,000 Altoro Common Shares and 500,000 Altoro share
purchase warrants;
(w) "Property Agreements" means the property agreements of Altoro listed on
Appendix 2;
(x) "Public Documents" means collectively documents or information filed by
Altoro under Applicable
Laws, including without limitation Altoro's: (i) 1999 Annual Report to
shareholders; (ii) proxy
circular relating to Altoro's 2000 Annual Meeting of Shareholders; (iii)
1999 Annual Information
Form; and (iv) report for the quarter ended March 31, 2000;
(y) "Registrar" means the "registrar" as defined in the Act;
(z) "Solitario" means Solitario Resources Corporation, a company
incorporated under the laws of the
State of Colorado;
(aa) "Solitario Common Shares" means the shares of US$0.01 par value common
stock which Solitario
is authorized to issue;
(bb) "Solitario Warrants" means share purchase warrants of Solitario
entitling holders to purchase
Solitario Common Shares in accordance with the terms and conditions
thereof;
(cc) "Subsidiary" means, with respect to a specified body corporate, a body
corporate of which more than
50% of the outstanding shares ordinarily entitled to elect a majority of
the directors thereof, whether
or not shares of any other class or classes shall or might be entitled to
vote upon the happening of any
event or contingency, are at the time owned, directly or indirectly, by
such specified body corporate,
and includes a body corporate in like relation to a Subsidiary;
(dd) "TSE" means The Toronto Stock Exchange; and
(ee) "1933 Act" means the United States Securities Act of 1933, as amended
and the rules and regulations
thereunder.
1.2 Interpretation Not Affected by Headings
The division of this Agreement into articles, sections, subsections,
paragraphs and subparagraphs and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of the
provisions of this Agreement. The terms "this Agreement", "hereof",
"herein", "hereunder" and similar expressions refer
to this Agreement and the appendices hereto as a whole and not to any
particular article, section, subsection, paragraph
or subparagraph hereof and include any agreement or instrument
supplementary or ancillary hereto.
1.3 Construction
In this Agreement, unless something in the context is inconsistent
therewith:
(a) the words "include" or "including" when following any general term or
statement are not to be
construed as limiting the general term or statement to the specific items
or matters set forth or to
similar items or matters, but rather as permitting it to refer to all other
items or matters that could
reasonably fall within its broadest possible scope;
<PAGE>
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b) a reference to a statute shall be deemed to include every regulation
made pursuant thereto, all
amendments to the statute or to any such regulation enforced from time to
time, and any statute or
regulation that supplements or supersedes such statute or any such
regulation;
(c) a reference to time or date is to the local time or date in Vancouver,
British Columbia, unless
specifically indicated otherwise;
(d) a reference to a particular corporation includes the corporation
derived from the amalgamation of the
particular corporation, or of a corporation to which such reference is
extended by this paragraph (d),
with one or more other corporations;
(e) a word importing the masculine gender includes the feminine or neuter
and a word importing the
singular includes the plural and vice versa; and
(f) a reference to "approval", "authorization", "consent", designation" or
"notice' means written
approval, authorization, consent, designation or notice unless specifically
indicated otherwise.
1.4 Date for Any Action
In the event that any date on which any action is required to be taken
hereunder by either 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 in such
place, unless otherwise agreed to.
1.5 Currency
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada unless
otherwise specified.
1.6 Accounting Principles
Whenever in this Agreement reference is made to generally accepted
accounting principles, such reference shall
be deemed to be to the Canadian generally accepted accounting principles
from time to time approved by the Canadian
Institute of Chartered Accountants, or any successor thereto, applicable as
at the date on which a calculation is made
or required to be made in accordance with generally accepted accounting
principles.
1.7 Appendices
The following appendix is attached hereto and shall be deemed to be
incorporated into and form part of this
Agreement:
Appendix Title
1 Plan of Arrangement
2 Altoro Property Agreements
1.8 Entire Agreement
This Agreement, together with the appendices, agreements and other
documents herein or therein referred to,
constitute the entire agreement among the parties pertaining to the subject
manner hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, among the parties with respect to
the subject matter hereof.
<PAGE>
- 5 -ARTICLE
2
ARRANGEMENT
2.1 Arrangement
Altoro and Solitario agree to effect the Arrangement pursuant to the
provisions of section 252 of the Act on
the terms and subject to the conditions contained in this Agreement and the
Plan of Arrangement. In particular, Altoro
shall as soon as practicable, apply to the Court pursuant to Sections 252
and 254 of the Act for the Interim Order
providing for, among other things, the calling and holding of the Meeting
for the purposes of considering and, if deemed
advisable, approving the Arrangement. If the Arrangement is approved at the
Meeting in accordance with the Interim
Order, Altoro will take, as soon as reasonably possible, the necessary
steps to submit the Arrangement to the Court and
apply for the Final Order in such fashion as the Court may direct approving
the Arrangement subject to the satisfaction,
waiver or release of the conditions set forth in Article 5. If the Final
Order is obtained, subject to the satisfaction, waiver
or release of the conditions set forth in Article 5, Altoro will file a
certified copy of the Final Order for acceptance by
the Registrar to give effect to the Arrangement pursuant to Sections 252
and 254 of the Act.
2.2 Effective Date of Arrangement
The Arrangement shall become effective at the Effective Time on the
Effective Date, and at such time, among
other things: (i) all of the Altoro Common Shares outstanding on the
Effective Date will be exchanged for Solitario
Common Shares on the basis of one (1) Solitario Common Share for every
three (3) Altoro Common Shares held; (ii) all
Altoro Warrants outstanding on the Effective Date will be exchanged for
Solitario Warrants on the basis of one-third
(1/3) of a Solitario Warrant for each (1) one Altoro Warrant held; and
(iii) Altoro will become a wholly-owned
subsidiary of Solitario, on the terms and subject to the conditions
contained in this Agreement and the Plan of
Arrangement.
2.3 Commitment to Effect Arrangement
Subject to satisfaction of the terms and conditions of this Agreement and
termination pursuant to Article 6, the
parties shall each use all reasonable efforts and do all things reasonably
required to cause the Arrangement to become
effective on October 13, 2000, or on such other date as Altoro and
Solitario may mutually determine and, in conjunction
therewith, to cause the transactions contemplated by the Plan of
Arrangement to be completed prior to the Effective
Date. Without limiting the generality of the foregoing, the parties shall
proceed forthwith to apply for the Interim Order
and, upon obtainment thereof, Altoro shall call the Meeting and mail the
Information Circular to the Members.
2.4 Filing of Final Order
Subject to the rights of termination contained in Article 6 hereof, upon
the Members approving the
Arrangement by special resolution in accordance with the provisions of the
Act, Altoro obtaining the Final Order and
the other conditions contained in Article 5 hereof being complied with,
Altoro shall file certified copies of the Final
Order and this Agreement with the Registrar pursuant to section 252 of the
Act, together with such other documents
as may be required in order to effect the Arrangement and shall request
that such certified copy of the Final Order be
accepted for filing by the Registrar. Upon such filing and issuance by the
Registrar of certified copies of such documents
giving effect to the Arrangement pursuant to section 252 of the Act,
Solitario and Altoro shall exchange such other
documents as may be necessary or desirable in connection with the
completion of the transactions contemplated by this
Agreement and the Plan of Arrangement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of Altoro
Altoro hereby represents and warrants to Solitario as follows (and
acknowledges that Solitario is relying upon
these representations and warranties in connection with the entering into
of this Agreement):
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a) Altoro has been duly incorporated and organized, and is validly existing
as a corporation, under the
laws of the Province of British Columbia, and has full corporate power and
authority to own its assets
and conduct its business as now owned and conducted;
(b) Altoro is duly qualified to carry on business, and is in good standing,
in each jurisdiction in which
the character of its properties, owned or leased, or the nature of its
activities makes such qualification
necessary, except where the failure to be so qualified will not have a
material adverse effect on the
business, assets, properties, condition (financial or otherwise), results
of operations or prospects of
Altoro (a "Material Adverse Effect");
(c) each Subsidiary of Altoro has been duly incorporated and organized, and
is validly existing as a
corporation in good standing, under the laws of its jurisdiction of
incorporation as set forth in the
Annual Information Form of Altoro dated May 20, 1999 and is duly qualified
to carry on business
in each jurisdiction in which the character of its properties, owned or
leased, or the nature of its
activities makes such qualification necessary, except where the failure to
be so qualified will not have
a Material Adverse Effect;
(d) Altoro and each of its Subsidiaries has complied with and is in
compliance with all laws and
regulations applicable to the operation of its respective businesses,
including the Applicable Laws,
except where failure so to comply will not have a Material Adverse Effect,
and has all the licences,
permits, orders or approvals of, and each of them has made all required
registrations with, any
governmental or regulatory body that is material to the conduct of its
business;
(e) the authorized and outstanding Altoro Warrants consist of: (i)
1,417,392 issued warrants, each
entitling the holder to purchase one Altoro Common Share for $0.35 until
October 24, 2000;
(ii) 275,000 issued warrants, each entitling the holder to purchase one
Altoro Common Share for
$0.35 until December 6, 2000; (iii) 483,333 issued warrants, each entitling
the holder to purchase one
Altoro Common Share for $0.60 until May 9, 2001;(iv) 300,000 issued
warrants, each entitling the
holder to purchase one Altoro Common Share for $0.35 until July 28, 2001
and
(v) 500,000 authorized warrants to be issued in connection with the Private
Placement each entitling
the holder to purchase one Altoro Common Share for $0.35 until one year
after the date of issue;
(f) the authorized capital of Altoro consists of 100,000,000 Altoro Common
Shares. As of the date
hereof, 18,281,115 Altoro Common Shares are issued and outstanding, up to a
maximum of
1,700,000 Altoro Common Shares may be issued pursuant to Altoro Options
under any Stock Option
Plan and up to a maximum of 2,475,725 Altoro Common Shares may be issued
pursuant to Altoro
Warrants. Upon completion of the Private Placement, a maximum of an
additional 1,000,000 Altoro
Common Shares will be issued and a maximum of 2,975,725 Altoro Common
Shares may be issued
pursuant to Altoro Warrants;
(g) other than Altoro Warrants, Altoro Options and the Property Agreements
there are no options,
warrants, conversion privileges, calls or other rights, agreements,
arrangements, commitments or
obligations of Altoro or its Subsidiaries to issue or sell any Altoro
Common Shares or any shares of
the capital stock of its Subsidiaries or securities or obligations of any
kind convertible into or
exchangeable for any Altoro Common Shares or Altoro Warrants, any of its
Subsidiaries or any other
person, nor are there outstanding any stock appreciation rights, phantom
equity or similar rights,
agreements, arrangements or commitments based upon the book value, income
or any other attribute
of Altoro or any of its Subsidiaries. The holders of outstanding Altoro
Common Shares and Altoro
Warrants are not entitled to any pre-emptive or other similar rights;
(h) Altoro has the requisite corporate power and authority to enter into
this Agreement and to perform
its obligations hereunder;
(i) other than in connection with or in compliance with the provisions of
the Applicable Laws, no
authorization, consent or approval of, or filing with, any public body,
court or authority is necessary
for the consummation by Altoro of its obligations under this Agreement;
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j) the execution and delivery of this Agreement by Altoro and the
consummation by Altoro of the
transactions contemplated by this Agreement have been or will be duly
authorized by the board of
directors of Altoro and no other corporate proceedings on the part of
Altoro are necessary to authorize
this Agreement and the transactions contemplated hereby;
(k) this Agreement has been duly executed and delivered by Altoro and
constitutes a valid and binding
obligation of Altoro, enforceable by Solitario against Altoro in accordance
with its terms, subject to
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
other laws relating to or
affecting creditors' rights generally and to general principles of equity;
(l) the execution and delivery by Altoro of this Agreement and performance
by it of its obligations
hereunder will not:
(i) result in a violation or breach of any provision of:
A. its memorandum or its articles or those of any of its Subsidiaries; or
B. subject to obtaining the required regulatory approvals under the
Applicable Laws,
any law, regulation, order, judgment or decree to which it or its
Subsidiaries is
subject or by which it is bound; or
C. any agreement, contract, licence, franchise or permit to which it is a
party or by
which it or its Subsidiaries is bound;
(ii) give rise to any right of termination, or acceleration of
indebtedness, or cause any
indebtedness to come due before its stated maturity, in any case, or give
rise to any rights of
first refusal or change in control or influence or any restriction or
limitation under any such
agreement, contract, licence, franchise or permit; or
(iii) result in the imposition of any encumbrance, charge or lien upon any
of its assets or the
assets of any of its Subsidiaries other than any such violations, breaches,
rights or
encumbrances, charges or liens that will not, individually or in the
aggregate, prevent or
materially delay consummation of the transactions contemplated by this
Agreement;
(m) other than as referred to in Public Documents, or as set forth in a
list provided to Solitario of such
agreements, there are no agreements material to the conduct of Altoro's
business and Solitario has
been provided with true and complete copies of all such material
agreements. Except as disclosed in
writing to Solitario, no approval or consent of any person is needed in
order that the agreements
continue in full force and effect following consummation of the
transactions contemplated hereby;
(n) the Public Documents of Altoro are, as of their respective dates, in
compliance in all material respects
with the Applicable Laws and did not contain any untrue statement of a
material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the
circumstances under which they were made, not misleading as at the time at
which they were filed
with applicable securities regulatory authorities;
(o) the audited consolidated balance sheets and related consolidated
statement of loss and deficit and
consolidated statement of cash flows of Altoro for the fiscal year ending
December 31, 1999, and the
unaudited consolidated balance sheets and related consolidated statement of
loss and deficit and
consolidated statement of cash flows for the period ended March 31, 2000
(the "Altoro Financial
Statements") and contained in the Public Documents, were prepared in
accordance with generally
accepted accounting principles in Canada consistently applied, and fairly
present the consolidated
financial condition of Altoro at the respective dates indicated and the
results of operations of Altoro
(on a consolidated basis) for the periods covered;
(p) since December 31, 1999, and except as disclosed in the Public
Documents:
- 8 -(
i) Altoro and its Subsidiaries have conducted their respective businesses
only in the usual,
ordinary and regular course and consistent with past practice;
(ii) no liability or obligation of any nature (whether absolute, accrued,
contingent or otherwise)
that has had or is reasonably likely to have a Material Adverse Effect has
been incurred by
Altoro or its Subsidiaries; and
(iii) there has not been any event that has had or is reasonably likely to
have a Material Adverse
Effect;
(q) except as set forth in the Public Documents or as disclosed previously
in writing to Solitario, none
of Altoro or its Subsidiaries is a party to any written or oral agreement
providing for severance or
termination payments to, or any employment agreement with, any senior
officer or director, and is not
a party to any collective bargaining or similar agreement;
(r) except as set forth in the Public Documents or as set forth in
documents previously delivered by
Altoro to Solitario, Altoro and its Subsidiaries have no employee benefit
plans and Altoro and each
of its Subsidiaries has complied with all federal, provincial, state, local
or foreign laws relating to
wages, fringe benefits and the payment of withholding and similar taxes,
has complied with all
applicable provisions of all legislation dealing with employees and
employee pension and other
benefit plans, has made all filings required to be made in connection with
such plans and has made
in a timely manner all contributions to any such plan that they are
required to make, the omission of
which would have any Material Adverse Effect;
(s) the corporate records and minute books of Altoro and its Subsidiaries
have been maintained in
accordance with all applicable statutory requirements and are complete and
accurate in all material
respects;
(t) to the best of Altoro's knowledge, the business carried on by Altoro
and its Subsidiaries complies
with all applicable environmental laws;
(u) none of Altoro and its Subsidiaries has received any environmental
notice which has not been
resolved to the satisfaction of the issuer of the environmental notice, and
none of Altoro and its
Subsidiaries is aware of any facts which are reasonably likely to give rise
to an environmental notice;
(v) Altoro and its Subsidiaries have obtained all permits required under
applicable environmental laws
in order for their business to be carried on as now conducted and such
permits are valid and in full
force and effect;
(w) to the best of Altoro's knowledge, all hazardous substances disposed
of, treated or stored on or off
site of the respective mineral tenures of Altoro and its Subsidiaries have
been disposed of, treated and
stored in compliance with all applicable environmental laws;
(x) each of Altoro and its Subsidiaries has prepared in a true, correct and
complete manner, and duly and
timely filed or cause to be filed, all tax returns, material elections,
filings and reports required to be
filed by it, has paid or caused to be paid, all taxes which are now due and
payable in all material
respects, and has made adequate provision in the Altoro Financial
Statements for all the taxes to
become due, as the case may be; and with respect to any period after March
31, 2000, no liability for
taxes has arisen for Altoro or its Subsidiaries, except for taxes in the
ordinary course of its business;
(y) each of Altoro and its Subsidiaries has made adequate and timely
installments on account of material
taxes for each period ending on or prior to the date of this Agreement;
(z) each of Altoro and its Subsidiaries has withheld from payments made to
its past or present employees,
officers and directors, and to non-residents, the required amount in
respect of taxes and other
deductions to be withheld therefrom, and has remitted any withheld amounts
to the applicable
governmental entity within the required time periods under the applicable
tax legislation;
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aa) neither Altoro nor any of its Subsidiaries has received any refund of
taxes or any credit against taxes
from any relevant governmental entity to which it was not entitled and
which has not been returned
to any relevant governmental entity;
(bb) all tax returns of Altoro and its Subsidiaries have been filed and
there are no outstanding waivers of
any limitation periods or agreements providing for an extension of time for
filing of any tax return,
election or designation or the payment of any taxes;
(cc) there is not now any claim concerning any tax liability of Altoro or
any its Subsidiaries either (a)
claimed or raised by any governmental entity in writing; or (b) as to which
Altoro has knowledge;
(dd) to the best of Altoro's knowledge, neither Altoro nor any of its
Subsidiaries has any liability for the
taxes of any other corporation under any applicable tax law as a
transferee, successor, by contract,
operation of law or otherwise;
(ee) except as set forth or reflected in the Public Documents, or as
disclosed previously in writing to
Solitario, there is no claim, action, proceeding or investigation pending
or, to the knowledge of
Altoro, threatened against or relating to Altoro or any of its Subsidiaries
or affecting any of their
properties or assets before any court or governmental or regulatory
authority or body that, if adversely
determined, is likely to have a Material Adverse Effect or prevent or
materially delay consummation
of the transactions contemplated by this Agreement, nor is Altoro aware of
any basis for any such
claim, action, proceeding or investigation. Neither Altoro nor any of its
Subsidiaries is subject to any
outstanding order, writ, injunction or decree that has had or is reasonably
likely to have a Material
Adverse Effect or prevent or materially delay consummation of the
transactions contemplated by this
Agreement.
3.2 Representations and Warranties of Solitario
Solitario hereby represents and warrants to Altoro as follows (and
acknowledges that Altoro is relying upon
these representations and warranties in connection with the entering into
of this Agreement):
(a) Solitario has been duly incorporated and organized, and is validly
existing, as a company under the
laws of the State of Colorado, and has full corporate power and authority
to own its assets and
conduct its business, as now owned and conducted;
(b) Solitario is duly qualified to carry on business, and is in good
standing, in each jurisdiction in which
the character of its properties, owned or leased, or the nature of its
activities makes such qualification
necessary, except where the failure to be so qualified will not have a
Material Adverse Effect on the
business, assets, properties, condition (financial or otherwise), results
of operations or prospects of
Solitario;
(c) Solitario has complied with and is in compliance with all laws and
regulations applicable to the
operation of its business, including the Applicable Laws, except where
failure so to comply will not
have a Material Adverse Effect, and has all the licences, permits, orders
or approvals of, and has made
all required registrations with, any governmental or regulatory body that
is material to the conduct of
its business;
(d) the authorized capital of Solitario consists of 50,000,000 Solitario
Common Shares and 10,000,000
shares of US$0.01 par value preferred shares and as of the date hereof,
16,854,521 Solitario Common
Shares and no preferred shares are issued and outstanding;
(e) other than 1,749,750 employee stock options, there are no options,
warrants, conversion privileges,
calls or other rights, agreements, arrangements, commitments or obligations
of Solitario to issue or
sell any Solitario Common Shares or any securities or obligations of any
kind convertible into or
exchangeable for any Solitario Common Shares, nor are there outstanding any
stock appreciation
rights, phantom equity or similar rights, agreements, arrangements or
commitments based upon the
- 10 -book
value, income or any other attribute of Solitario. The holders of
outstanding Solitario Common
Shares are not entitled to any pre-emptive or other similar rights;
(f) Solitario has the requisite corporate power and authority to enter into
this Agreement and to carry out
its obligations hereunder;
(g) other than in connection with or in compliance with the provisions of
the Applicable Laws, no
authorization, consent or approval of, or filing with, any public body,
court or authority is necessary
for the consummation by Solitario of its obligations under this Agreement;
(h) the execution and delivery of this Agreement by Solitario and the
consummation by Solitario of the
transactions contemplated by this Agreement have been or will be duly
authorized by its board of
directors of Solitario and no other corporate proceedings on the part of
Solitario are necessary to
authorize this Agreement and the transactions contemplated hereby;
(i) this Agreement has been duly executed and delivered by Solitario and
constitutes a valid and binding
obligation of Solitario, enforceable by Altoro against Solitario in
accordance with its terms, subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and other laws relating to
or affecting creditors' rights generally and to general principles of
equity;
(j) the execution and delivery by Solitario of this Agreement and the
performance by it of its obligations
hereunder will not:
(i) result in a violation or breach of any provision of:
A. its articles of incorporation or by-laws;
B. subject to obtaining all required regulatory approvals under the
Applicable Laws,
any law, regulation, order, judgment or decree to which it is subject or by
which it
is bound;
C. any agreement, contract, licence, franchise or permit to which it is a
party or by
which it is bound; or
(ii) give rise to any right of termination, or acceleration of
indebtedness, or cause any
indebtedness to come due before its stated maturity, in any case, or give
rise to any rights of
first refusal or change in control or influence or any restriction or
limitation under any such
agreement, contract, licence, franchise or permit; or
(iii) result in the imposition of any encumbrance, change or a lien upon
any of its assets, other
than any such violations, breaches, rights or encumbrances, charges or
liens that will not,
individually or in the aggregate, prevent or materially delay consummation
of the
transactions contemplated by this Agreement;
(k) other than as referred to in the public documents of Solitario filed
under Applicable Laws, there are
no agreements material to the conduct of Solitario's business and Altoro
has been provided with true
and complete copies of all such material agreements or access thereto.
Except as disclosed in writing
to Altoro, no approval or consent of any person is needed in order that the
agreements continue in full
force and effect following consummation of the transactions contemplated
hereby;
(l) other than in connection with or in compliance with the provisions of
the Applicable Laws no
authorization, consent or approval of, or filing with, any public body,
court or authority is necessary
on the part of Solitario for the consummation of the transactions
contemplated by this Agreement,
except for such authorizations, consents, approvals and filings as to which
the failure to obtain or
make would not, individually or in the aggregate, prevent or materially
delay consummation of the
transactions contemplated by this Agreement;
- 11 -(
m) the documents or information of Solitario filed by Solitario under
Applicable Laws are, as of their
respective dates, in compliance in all material respects with such
Applicable Laws and do not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or
necessary to make the statements made therein, in light of the
circumstances under which they were
made, not misleading as at the time they were filed with applicable
securities regulatory authorities;
(n) the audited consolidated balance sheets and related consolidated
statements of operations,
consolidated statements of cash flows and consolidated statements of
stockholders' equity of Solitario
for the fiscal year ending December 31, 1999, and the unaudited
consolidated balance sheets and
related consolidated statements of operations, consolidated statements of
cash flows and consolidated
statements of stockholders' equity for the period ended March 31, 2000, and
contained in the public
documents of Solitario filed under Applicable Laws, were prepared in
accordance with generally
accepted accounting principles in the United States consistently applied,
and fairly present the
consolidated financial condition of Solitario at the respective dates
indicated and the results of
operations of Solitario (on a consolidated basis) for the periods covered;
(o) since December 31, 1999, and except as disclosed in the public
documents of Solitario:
(i) Solitario has conducted its business only in the usual, ordinary and
regular course and
consistent with past practice;
(ii) no liability or obligation of any nature (whether absolute, accrued,
contingent or otherwise)
that has had or is reasonably likely to have a Material Adverse Effect has
been incurred; and
(iii) there has not been any event that has had or is reasonably likely to
have a Material Adverse
Effect;
(p) the corporate records and minute books of Solitario have been
maintained in accordance with all
applicable statutory requirements and are complete and accurate in all
material respects; and
(q) except as set forth or reflected in the public documents of Solitario
filed under Applicable Laws, or
as disclosed previously in writing to Altoro, there is no claim, action,
proceeding or investigation
pending or, to the knowledge of Solitario, threatened against or relating
to Solitario or affecting its
properties or assets before any court or governmental or regulatory
authority or body that, if adversely
determined, is likely to have a Material Adverse Effect or prevent or
materially delay consummation
of the transactions contemplated by this Agreement, nor is Solitario aware
of any basis for any such
claim, action, proceeding or investigation. Solitario is not subject to any
outstanding order, writ,
injunction or decree that has had or is reasonably likely to have a
Material Adverse Effect or prevent
or materially delay consummation of the transactions contemplated by this
Agreement.
ARTICLE 4
COVENANTS
4.1 Covenants of Solitario
Solitario hereby covenants and agrees with Altoro that from the date hereof
until the Effective Date:
(a) Solitario shall conduct its business only in, not take any action
except in, and maintain its facilities
in, the usual, regular and ordinary course of business and consistent with
past practice except as
otherwise agreed by Altoro;
(b) Solitario shall not directly or indirectly do or permit to occur any of
the following:
(i) issue, sell, pledge, lease, dispose of, encumber or agree to issue,
sell, pledge, lease, dispose,
of or encumber (or permit any of its subsidiaries to issue, sell, pledge,
lease, dispose of,
encumber or agree to issue, sell, pledge, lease, dispose of or encumber):
- 12 -A.
any additional shares of, or any options, warrants, calls, conversion
privileges or
rights of any kind to acquire any shares of, any capital stock of Solitario
other than
pursuant to the exercise of Solitario Warrants; or
B. except in the ordinary course of business, any assets of Solitario;
(ii) amend or propose to amend its articles;
(iii) split, combine or reclassify any outstanding Solitario Common Shares,
or declare, set aside
or pay any dividend or other distribution payable in cash, stock, property
or otherwise with
respect to the Solitario Common Shares;
(iv) redeem, purchase or offer to purchase any Solitario Common Shares or
other securities of
Solitario;
(v) merge into or with, or amalgamate or consolidate with, or enter into
any other corporate
reorganization with, or sell all or substantially all of its assets to, any
corporation, Person,
partnership or other business organization whatsoever or perform any act or
enter into any
transaction or negotiation which interferes or is inconsistent with the
completion of the
transaction as contemplated hereby;
(vi) reduce the stated capital of Solitario;
(vii) acquire or agree to acquire (by merger, amalgamation, acquisition of
stock or assets or
otherwise) any person, corporation, partnership or other business
organization or division;
or
(viii) incur or commit to incur any indebtedness for borrowed money or
issue any debt securities
except for the borrowing of working capital in the ordinary course of
business and consistent
with past practice;
(c) Solitario will not enter into any transaction or incur any obligation
if the same would have a material
adverse effect on Solitario or the Arrangement, other than in the ordinary
course of business;
(d) Solitario shall:
(i) use its best efforts to preserve intact its business organizations and
goodwill;
(ii) not take any action that would render, or that reasonably may be
expected to render, any
representation or warranty made by it in this Agreement untrue at any time
prior to the
Effective Time if then made; and
(iii) promptly notify Altoro orally and in writing of any material adverse
change in the normal
course of its business or in the operation of its properties, and of any
material governmental
or third party complaints, investigations or hearings (or communication
indicating that the
same may be contemplated);
(e) Solitario will, on or before the Effective Date, conditionally allot
and reserve for issuance a sufficient
number of Solitario Common Shares to meet the obligations of Solitario
under this Agreement and
the Plan of Arrangement;
(f) Solitario will provide to Altoro in a timely manner any information and
documents requested by
Altoro to make any necessary filings under Applicable Laws; and
(g) Solitario shall perform the obligations required to be performed by it,
and shall enter into all
agreements required to be entered into by it, under this Agreement and the
Plan of Arrangement and
shall do all such other acts and things as may be necessary or desirable in
order to carry out and give
- 13 -effect
to the Arrangement and related transactions as described in the Information
Circular and,
without limiting the generality of the foregoing, Solitario shall seek and
cooperate with Altoro in
seeking:
(i) the Interim and Final Order as provided for in section 4.3, and
(ii) such other consents, orders, rulings, approvals and assurances as
counsel may advise are
necessary or desirable for the implementation of the Arrangement, including
those referred
to in section 5.3.
4.2 Covenants of Altoro
Altoro hereby covenants and agrees with Solitario that except as otherwise
contemplated by this Agreement
from the date hereof until the Effective Date:
(a) Altoro shall, and shall cause each of its Subsidiaries to conduct its
and their respective businesses
only in, not take any action except in, and maintain their respective
facilities in, the usual, ordinary
and regular course of business and consistent with past practice, except as
otherwise agreed to by
Solitario;
(b) Altoro shall not directly or indirectly do or permit to occur any of
the following:
(i) issue, sell, pledge, lease, dispose of, encumber or agree to issue,
sell, pledge, lease, dispose,
of or encumber (or permit any of its Subsidiaries to issue, sell, pledge,
lease, dispose of,
encumber or agree to issue, sell, pledge, lease, dispose of or encumber):
A. any additional shares of, or any options, warrants, calls, conversion
privileges or
rights of any kind to acquire any shares of, any capital stock of Altoro or
any of its
Subsidiaries other than pursuant to the exercise of the Altoro Options and
Altoro
Warrants and the Private Placement; or
B. except in the ordinary course of business, any assets of Altoro or any
of its
Subsidiaries;
(ii) amend or propose to amend its articles or those of any of its
Subsidiaries;
(iii) split, combine or reclassify any outstanding Altoro Common Share or
Altoro Warrant, or
declare, set aside or pay any dividend or other distribution payable in
cash, stock, property
or otherwise with respect to the Altoro Common Shares or Altoro Warrants;
(iv) redeem, purchase or offer to purchase (or permit any of its
Subsidiaries to redeem, purchase
or offer to purchase) any Altoro Common Shares or Altoro Warrants or other
securities of
Altoro or any of its Subsidiaries;
(v) merge into or with, or amalgamate or consolidate with, or enter into
any other corporate
reorganization with, or sell all or any part of its assets to, any
corporation, Person,
partnership or other business organization whatsoever or perform any act or
enter into any
transaction or negotiation which interferes or is inconsistent with the
completion of the
transaction as contemplated hereby;
(vi) reduce the stated capital of Altoro or of any of its Subsidiaries;
(vii) acquire or agree to acquire (by merger, amalgamation, acquisition of
stock or assets or
otherwise) any person, corporation, partnership or other business
organization or division;
or
- 14 -(
viii) incur or commit to incur any indebtedness for borrowed money or issue
any debt securities
except for the borrowing of working capital in the ordinary course of
business and consistent
with past practice;
(c) Altoro shall not, and shall cause each of its Subsidiaries to not:
(i) enter into or modify any employment, severance, collective bargaining
or similar agreements
or arrangements with, or grant any bonuses, salary increases, severance or
termination pay
to, any officers or directors other than pursuant to agreements previously
entered into; or
(ii) in the case of employees who are not officers or directors, take any
action other than in the
ordinary, regular and usual course of business and consistent with past
practice (none of
which actions shall be unreasonable or unusual) with respect to the grant
of any bonuses,
salary increases, severance or termination pay or with respect to any
increase of benefits
payable in effect on the date hereof;
(iii) adopt or amend any bonus, profit sharing, incentive, compensation,
stock option, pension,
retirement, deferred compensation, employment or other employee benefit
plan, agreement,
trust, fund or arrangement for the benefit or welfare of any employee;
(d) Altoro shall use its best efforts to cause its current insurance (or
re-insurance) policies not to be
cancelled or terminated or any of the coverage thereunder to lapse, unless
simultaneously with such
termination, cancellation or lapse, replacement policies underwritten by
insurance and reinsurance
companies of nationally recognized standing providing coverage equal to or
greater than the coverage
under the cancelled, terminated or lapsed policies for substantially
similar premiums are in full force
and effect;
(e) Altoro shall:
(i) use its best efforts, and cause each of its Subsidiaries to use its
best efforts, to preserve intact
their respective business organizations and goodwill, to keep available the
services of its
officers and employees as a group and to maintain satisfactory
relationships with suppliers,
distributors, customers and others having business relationships with it or
its Subsidiaries;
(ii) not take any action, or permit any of its Subsidiaries to take any
action that would render,
or that reasonably may be expected to render, any representation or
warranty made by it in
this Agreement untrue at any time prior to the Effective Time if then made;
and
(iii) promptly notify Solitario orally and in writing of any material
adverse change in the normal
course of its or any of its Subsidiaries' businesses or in the operation of
its or any of its
Subsidiaries' businesses or in the operation of its or any of its
Subsidiaries' properties, and
of any material governmental or third party complaints, investigations or
hearings (or
communication indicating that the same may be contemplated);
(f) Altoro will provide to Solitario in a timely manner any information and
documents requested by
Solitario to make any necessary filings under Applicable Laws;
(g) Altoro will convene the Meeting on or about October 4, 2000 and will
solicit proxies to be voted at
the Meeting in favour of the approval of this Agreement, the Arrangement
and the other matters
incidental to the Arrangement;
(h) Altoro shall, in a timely and expeditious manner, file the Information
Circular in all jurisdictions
where the Information Circular is required to be filed by Altoro and mail
or caused to be mailed the
Information Circular to the Members of record, the directors of Altoro and
the auditors of Altoro all
in accordance with the terms of the Interim Order and applicable law;
- 15 -(
i) Altoro shall perform the obligations required to be performed by it, and
shall enter into all agreements
required to be entered into by it under this Agreement and the Plan of
Arrangement and shall do all
such other acts and things as may be necessary or desirable in order to
carry out and give effect to the
transactions as described in the Information Circular and, without limiting
the generality of the
foregoing, Altoro shall seek:
(i) the approval of the Members required for the implementation of the
Arrangement,
(ii) the Interim and Final Order as provided for in section 4.3, and
(iii) such other consents, orders, rulings, approvals and assurances as
counsel may advise are
necessary or desirable for the implementation of the Arrangement, including
those referred
to in section 5.3.
4.3 Interim Order and Final Order
Altoro will apply to the Court, pursuant to subsection 252 of the Act for
the Interim Order providing for, among
other things, the calling and holding of the Meeting for the purpose of,
among other matters, considering and, if deemed
advisable, approving the Arrangement. Altoro covenants and agrees that if
the approval of the Arrangement by the
Members of Altoro as set out in subsection 5.1(a) hereof and the Interim
Order is obtained, as soon as practicable
thereafter, Altoro will take the necessary actions to submit the
Arrangement to the Court for approval and apply for the
Final Order in such fashion as the Court may direct and in doing so, advise
the Court, prior to the granting of the Final
Order that, if the Arrangement is approved, the Solitario Common Shares to
be issued pursuant to the Arrangement will
not require registration under the 1933 Act by virtue of section 3(a)(10)
thereof and, subject to compliance with any of
the other conditions provided for in Article 5 hereof and to the rights of
termination contained in Article 6 hereof, file,
as soon as practicable thereafter, pursuant to subsection 252 of the Act, a
certified copy of the Final Order and this
Agreement, together with such other documents as may be required, with the
Registrar, to give effect to the
Arrangement.
4.4 Cooperation, Consents and Approvals
Each party will, and will cause its Subsidiaries to, cooperate and use
their respective reasonable efforts:
(a) to obtain, before the Effective Date, all authorizations, waivers,
exemptions, consents, orders and
other approvals from domestic and foreign courts, governmental or
regulatory agencies, boards,
commissions or other authorities, shareholders and third parties as are
necessary for the
consummation of the transactions contemplated hereby; and
(b) to satisfy each of the conditions precedent to be satisfied by it and
to take, or cause to be taken, all
other action and to do, or cause to be done, all other things necessary or
advisable under applicable
laws and regulations to permit the completion of the Arrangement in
accordance with the provisions
of this Agreement and the Plan of Arrangement.
4.5 Non-Solicitation
From and after the date of this Agreement, Altoro agrees that it will not,
directly or indirectly, through any
director, officer, employee, representative or agent of Altoro or any of
its Subsidiaries: (i) solicit, initiate or knowingly
encourage (including by way of furnishing non-public information or
entering into any form of agreement, arrangement
or understanding) the initiation of any inquiries or proposals regarding an
Acquisition Proposal; (ii) participate in any
discussions or negotiations regarding any Acquisition Proposal; (iii)
approve or recommend any Acquisition Proposal;
or (iv) cause Altoro to enter into any agreement related to any Acquisition
Proposal; provided that, and subject to
section 4.6, notwithstanding the preceding part of this section and any
other provision of this Agreement, nothing will
prevent the board of directors of Altoro from considering, negotiating,
approving, recommending to the members, or
entering into an Agreement in respect of an unsolicited bona fide written
Acquisition Proposal that the board of directors
of Altoro determines in good faith, after consultation with financial
advisors and after receiving advice of outside
counsel advising the board of directors of Altoro that failure to take such
action would be inconsistent with their
fiduciary duties, would, if consummated in accordance with its terms,
result in a transaction more favourable to the
- 16 -Members
than the transaction contemplated by this Agreement and having a value per
Altoro Common Share greater
than the per share value attributable thereto under the transaction
contemplated by this Agreement (any such Acquisition
Proposal being referred to herein as a "Superior Proposal").
4.6 Notice of Superior Proposal Determination
(a) Altoro will immediately notify Solitario, at first orally and then in
writing, of all current Acquisition
Proposals and of all future Acquisition Proposals of which Altoro's board
of directors or senior
officers are or become aware, or any amendments to the foregoing, or any
request for non-public
information relating to Altoro or any Subsidiaries in connection with an
Acquisition Proposal or for
access to the properties, books or records of Altoro by any Person that
informs Altoro or such
Subsidiary that it is considering making, or has made, an Acquisition
Proposal. Such notice shall
include a description of the material terms and conditions of any proposal
and shall provide such
details of the proposal, inquiry or contact as Solitario may reasonably
request including the identity
of the person making such proposal, inquiry or contact.
(b) If Altoro receives a request for material non-public information from a
Person who proposes a bona
fide Acquisition Proposal in respect of Altoro (the existence and content
of which have been disclosed
to Solitario), and the board of directors of Altoro determines that such
proposal would likely be a
Superior Proposal pursuant to section 4.5 having received the advice
referred to therein, then, and
only in such case, the board of directors of Altoro may, subject to the
execution by such Person of
a confidentiality agreement containing a standstill provision, provide such
Person with access to
information regarding Altoro or any of its Subsidiaries; provided, however,
that the Person making
the Acquisition Proposal shall not be precluded under such confidentiality
agreement from making
the Acquisition Proposal, and provided further that Altoro sends a copy of
any such confidentiality
agreement to Solitario immediately upon its execution and Solitario is
provided with a list of or copies
of the information provided to such Person and immediately provided with
access to similar
information to which such Person was provided.
(c) Altoro shall not accept, approve, recommend or enter into any agreement
in respect of an Acquisition
Proposal (other than a confidentiality agreement contemplated in section
4.6(b)) on the basis that it
would constitute a Superior Proposal unless: (i) it has provided Solitario
with a copy of the
Acquisition Proposal document which the board of directors of Altoro has
determined would be a
Superior Proposal; and (ii) five Business Days have elapsed from the later
of the date Solitario
received notice of Altoro's proposed determination to accept, approve,
recommend or enter into an
Agreement in respect of such Acquisition Proposal and the date Solitario
received a copy of the
Acquisition Proposal. For greater certainty, Altoro shall be entitled to
adjourn or delay the Meeting
for a period of five Business Days from the date of receipt of such
Acquisition Proposal, provided
however, that the Meeting shall not be adjourned beyond October 31, 2000.
(d) During such five Business Day period, Altoro acknowledges that
Solitario shall have the opportunity,
but not the obligation, to offer to amend the terms of this Agreement and
the Plan of Arrangement.
The board of directors of Altoro will review any offer to amend the terms
of this Agreement made
by Solitario, in good faith in order to determine, in the discretion of the
board of directors of Altoro
and in the exercise of their fiduciary duties, whether Solitario's offer to
amend the terms of this
Agreement upon acceptance by Altoro would result in the Acquisition
Proposal not being a Superior
Proposal. If the board of directors of Altoro so determines, Altoro will
enter into an amended
agreement with Solitario reflecting Solitario's amended proposal. If the
board of directors of Altoro
continues to believe, in good faith and after consultation with financial
advisors and outside counsel,
that the Acquisition Proposal is nonetheless a Superior Proposal and
therefore reject Solitario's
amended proposal, Altoro will pay to Solitario the Break Fee payable to
Solitario under section 4.7
as required thereunder.
(e) Altoro shall promptly reaffirm its recommendation of the Arrangement by
press release after: (i) any
Acquisition Proposal (which is determined not to be a Superior Proposal) is
publicly announced or
made; or (ii) Solitario increases (by written notice to Altoro), within
five Business Days after
- 17 -receiving
written notice from Altoro pursuant to this section 4.6, the consideration
offered under the
Arrangement to match or better the consideration under a Superior Proposal.
(f) Altoro also acknowledges and agrees that each successive material
modification of any Acquisition
Proposal will constitute a new Acquisition Proposal for purposes of this
subsection 4.6.
(g) Altoro shall ensure that its officers, directors and employees and its
Subsidiaries and their officers,
directors and employees and any financial advisors or other advisors or
representatives retained by
it are aware of the provisions of this section 4.6.
4.7 Break Fee
(a) If, (i) Altoro terminates in a manner adverse to Solitario, their
approval or recommendation of the
terms of this Agreement other than pursuant to section 4.6, or approves or
recommends any Superior
Proposal, or determines at the conclusion of the process set out in section
4.6 that any Acquisition
Proposal is a Superior Proposal, or resolves to take any of the foregoing
actions; or (ii) Altoro is in
default in any material respect under this Agreement; then in any such case
Altoro shall pay to
Solitario cash (the "Break Fee") equal to four percent (4%) of the value of
Altoro's Common Shares
to be determined on the basis of the average of the closing prices of the
Altoro Common Shares on
the CDNX for the twenty (20) days ending on the the date of termination of
this Agreement (the
"Average Price"). Solitario has the option to receive the Break Fee all or
in part in Altoro Common
Shares on the basis of the Average Price.
(b) In the event that: (i) this Agreement is terminated except through the
fault of Solitario or due to failure
to obtain required regulatory approvals; or (ii) the Break Fee is payable,
then Altoro shall pay to
Solitario within 10 business days following the date of the termination of
this Agreement full
reimbursement to Solitario for any and all expenses paid or required to be
paid by Solitario, or other
costs incurred by Solitario, in connection with this Agreement and the
transactions contemplated
hereby, including, without limitation, amounts paid or payable to its
respective financial advisors and
its counsel, if any, its auditors, legal counsel, printers, transfer agent
and other arm's length third
parties that perform services on its behalf in connection with the
negotiation of this Agreement, the
due diligence review conducted by Solitario in connection with the entering
into of this Agreement.
4.8 Material Changes
Each of the parties will advise the other party orally and in writing of
any material change with respect to it
or its Subsidiaries on a consolidated basis promptly after it has occurred
and will promptly send to the other parties a
copy of any press release or material change reports filed by it with
securities regulatory authorities.
4.9 Notification
Each of the parties will promptly notify the other party if any of the
representations and warranties made by
it in this Agreement ceases to be true, accurate and complete in any
material respect and of any failure to comply in any
material respect with any of its obligations hereunder.
ARTICLE 5
CONDITIONS
5.1 Conditions Precedent for the Benefit of Solitario
The obligation of Solitario to complete the transactions contemplated by
this Agreement shall be subject to
satisfaction on or before the Effective Date of the following conditions
each of which is for Solitario's exclusive benefit
and may be assented or waived by it in its sole discretion at any time, in
whole or in part:
(a) Solitario shall have been satisfied that since December 31, 1999, there
has been no undisclosed action
prior to the date hereof, nor any action (whether disclosed or undisclosed)
subsequent to the date
hereof and prior to the Effective Date, by any person or company other than
Solitario, including a
- 18 -governmental
or regulatory authority, or by Altoro, any Subsidiary or associate of
Altoro or the
directors or senior officers of Altoro or any of their respective
Subsidiaries or associates, or event or
circumstance, that has resulted in, or may in the opinion of Solitario
acting reasonably result in, a
Material Adverse Effect;
(b) any agreement, understanding or commitment by Altoro or any Subsidiary
or associate of Altoro made
or entered into on or after the date hereof to sell, transfer, lease or
dispose of any material asset or part
thereof of Altoro or of any Subsidiary or associate of Altoro or to make
any other material change in
the business, operations, assets, liabilities, capital, financial condition
or affairs of Altoro considered
as a whole being satisfactory to, and approved in writing by, Solitario;
(c) no undisclosed action prior to the date hereof but subsequent to
December 31, 1999, nor any action
(whether disclosed or undisclosed) subsequent to the date hereof, by any
person or company other
than Solitario, including any action by a governmental or regulatory
authority, by Altoro, any
Subsidiary or associate of Altoro or by any director or senior officer of
Altoro or any of its
Subsidiaries or associates, or event or circumstance, shall result in a
Material Adverse Effect;
(d) the unconditional release or waiver on terms reasonably satisfactory to
Solitario and to its counsel by
all applicable third parties of all material provisions contained in any
indenture, instrument,
agreement, undertaking or commitment relating to any indebtedness for, or
in respect of, borrowed
money, or relating to any development agreement, joint venture agreement,
partnership agreement,
co-ownership agreement or other agreement relating to the conduct of
business or the ownership of
material assets by Altoro, or any Subsidiary or associate of Altoro, to
which Altoro or any Subsidiary
or associate of Altoro is a party, that are required in connection with the
transaction contemplated by
this Agreement;
(e) Solitario shall have entered into a consulting agreement with Ross
Beaty to retain the services of
Mr. Beaty;
(f) the board of directors of Altoro shall have adopted all necessary
resolutions, and all other necessary
corporate action shall have been taken by Altoro and the Subsidiaries, to
permit the consummation
of the Arrangement;
(g) the board of directors of Altoro shall have made and shall not have
modified or amended, in a manner
adverse to Solitario, prior to the Meeting, an affirmative recommendation
that the holders of the
Altoro Shares approve the Arrangement;
(h) all outstanding Altoro Options and Altoro Warrants to purchase or
otherwise acquire authorized and
unissued Altoro Common Shares under option, rights, privilege or other
entitlement as at the date
hereof shall have been exercised in full or irrevocably released,
surrendered and waived by the
holders thereof on terms and conditions satisfactory to Solitario; and
(i) the representations and warranties of Altoro as set out in this
Agreement shall be true and correct as
of the Effective Date as if they were made on and as of such date, except
as affected by the
transaction contemplated or permitted by this Agreement.
5.2 Conditions Precedent for the Benefit of Altoro
The obligation of Altoro to complete the transactions contemplated by this
Agreement shall be subject to
satisfaction on or before the Effective Date of the following conditions
each of which is for Altoro's exclusive benefit
and may be assented or waived by it in its sole discretion at any time, in
whole or in part:
(a) Altoro shall have been satisfied that since December 31, 1999, there
has been no undisclosed action
prior to the date hereof, nor any action (whether disclosed or undisclosed)
subsequent to the date
hereof and prior to the Effective Date, by any person or company other than
Altoro, including a
governmental or regulatory authority, or by Solitario, or associate of
Solitario or the directors or
senior officers of Solitario or any of their respective associates, or
event or circumstance, that has
- 19 -resulted
in, or may in the opinion of Altoro acting reasonably result in, a material
adverse change in
the business, results of operations, assets, liabilities, prospects,
financial condition or affairs of
Solitario considered as a whole;
(b) the board of directors of Solitario shall have adopted all necessary
resolutions, and all other necessary
corporate action shall have been taken by Solitario to permit the
consummation of the Arrangement
and the issue of the Solitario Common Shares contemplated thereby;
(c) no undisclosed action prior to the date hereof but subsequent to
December 31, 1999, nor any action
(whether disclosed or undisclosed) subsequent to the date hereof, by any
person or company other
than Altoro, including any action by a governmental or regulatory
authority, by Solitario, or any
Subsidiary or associate of Solitario or by any director or senior officer
of Solitario or any Subsidiary
or associates of Solitario, or event or circumstance, shall result in a
material adverse change in the
business, results of operations, assets, liabilities, prospects, financial
condition or affairs of Solitario
considered as a whole; and
(d) the representations and warranties of Solitario as set out in this
Agreement shall be true and correct
as of the Effective Date as if they were made on and as of such date,
except as affected by the
transaction contemplated or permitted by this Agreement.
5.3 Mutual Conditions Precedent
The respective obligations of Solitario and Altoro to complete the
transactions contemplated by this Agreement
and the obligation of Altoro to file a copy of the Final Order and a
certified copy of this Agreement with the Registrar
shall be subject to the satisfaction, on or before the Effective Date of
the following conditions:
(a) the Arrangement, with or without amendment, shall have been approved
and adopted at the Meeting
by the Members in accordance with the provisions of the Act and the Interim
Order and the
Arrangement shall have otherwise been approved and adopted by the requisite
majorities of persons
entitled or required to vote thereon as determined by the Court;
(b) the Interim Order shall have been granted in form and substance
satisfactory to Altoro;
(c) the Final Order shall have been obtained in form and substance
satisfactory to Altoro and having
regard to this Agreement and a certified copy, together with a certified
copy of this Agreement, and
any other required documents, shall have been accepted by the Registrar for
filing;
(d) the CDNX and TSE shall have approved the terms of the Arrangement
subject to compliance with
the usual requirements of such exchanges;
(e) if a notice of the Arrangement is required under the Competition Act
(Canada), the Director of
Investigation and Research appointed under the Competition Act (Canada)
shall have advised Solitario
in form and on terms satisfactory to it that the Director of Investigation
and Research shall not oppose
or threaten to oppose the transaction contemplated by this Agreement and
Plan of Arrangement, nor
make or threaten to make an application under Part VII of that Act in
respect of the transaction
contemplated by this Agreement and the Plan of Arrangement;
(f) all other consents, orders, rulings, approvals and assurances,
including regulatory and judicial
approvals and orders (including, without limitation, the consent of the
Quebec Securities Commission
under Section 50 of the Securities Act (Quebec)) required, necessary or
desirable for the Arrangement
to become effective shall have been obtained or received from the Persons,
authorities or bodies
having jurisdiction in the circumstances, each in a form acceptable to
Altoro and Solitario;
(g) no order or decree of any domestic or foreign court, tribunal,
governmental agency or other regulatory
authority or administrative agency, board or commission, and no law,
regulation, policy, directive or
order shall be enacted, promulgated, made, issued or applied to cease
trade, enjoin, prohibit or impose
material limitations on the Arrangement or transactions contemplated
thereby; and
- 20 -(
h) this Agreement shall not have been terminated under Article 6 hereof.
5.4 Conditions and Obligations of Each Party
The obligation of each of the parties to complete the transactions
contemplated by this Agreement is further
subject to the condition, which may be waived by any such party without
prejudice to its right to rely on any other
condition in favour of such party, that each and every one of the covenants
of the other party hereto to be performed
on or before the Effective Date pursuant to the terms of this Agreement
shall have been duly performed by such party
and that, except as affected by the transactions contemplated by this
Agreement, the representations and warranties of
the other party hereto shall be true and correct in all material respects
as at the Effective Date, with the same effect as
if such representations and warranties had been made at and as of such
time, and as of such time each such party shall
have received a certificate, dated the Effective Date, of a senior officer
of each party confirming the same.
5.5 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 Effective Date, 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 Date; 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 Date.
No party may elect not to complete the transactions contemplated hereby
pursuant to the conditions precedent
contained in Sections 5.1, 5.2, 5.3 and 5.4 or any termination right under
Article 6 unless, prior to the filing of the Final
Order for acceptance by the Registrar pursuant to Section 252 of the Act,
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 precedent 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, no party may
terminate this Agreement until the later of the
termination date and the expiration of a period of 30 days from such
notice, and if such notice has been delivered prior
to the date of the Meeting, the Meeting shall be postponed accordingly.
5.6 Arrangement and Closing
Altoro shall promptly advise Solitario as to the date on which certified
copies of the Final Order and this
Agreement, together with any other required documents, will be filed with
the Registrar and upon the acceptance of such
certified copies by the Registrar, the parties shall exchange such other
documents as may be necessary or desirable in
connection with the completion of the transactions contemplated by this
Agreement and the Arrangement.
ARTICLE 6
AMENDMENT AND TERMINATION
6.1 Amendment
Subject to any mandatorily applicable restrictions under the Act or the
Final Order, this Agreement (other than
the Plan of Arrangement, the amendment provisions of which are set out
therein) may, at any time and from time to time
before or after the holding of the Meeting, but no later than the Effective
Time, be amended by the written agreement
of Solitario and Altoro without, subject to applicable law, further notice
to or authorization on the part of the Members.
Without limiting the generality of the foregoing, any such amendment may:
(a) change the time for the performance of any of the obligations or acts
of Solitario or Altoro herein;
(b) waive any inaccuracies in or modify any representation or warranty
contained herein or in any
document to be delivered pursuant hereto;
- 21 -(
c) waive compliance with or modify any of the covenants contained herein or
waive or modify the
performance of any of the obligations of Solitario and Altoro herein; or
(d) waive compliance with or modify any conditions precedent herein
contained;
provided that, notwithstanding the foregoing, the terms of section 3.1 of
the Plan of Arrangement and subsection 5.1(a)
of this Agreement shall not be amended in a manner materially prejudicial
to the Members without the approval of the
Members given in the same manner as required for the approval of the
Arrangement or as may be ordered by the Court.
This Agreement and the Plan of Arrangement may be amended in accordance
with the Final Order.
6.2 Termination
(a) This Agreement and the Plan of Arrangement may, at any time before or
after the holding of the
Meeting but prior to the Effective Date, except as to the payment of the
Break Fee be terminated:
(i) by mutual agreement in writing of Solitario and Altoro;
(ii) by Solitario if, prior to termination of this Agreement there is a
Superior Proposal and
Solitario does not proceed with an amendment to this Agreement in
accordance with section
4.6;
(iii) by Altoro if, prior to termination of this Agreement the board of
directors of Altoro
determines to proceed with a Superior Proposal in accordance with section
4.6;
(iv) by Altoro at any time on or after December 15, 2000, if by that date,
the conditions set forth
in section 5.2 have not been satisfied or waived; and
(v) by Solitario at any time on or after December 15, 2000, if by that
date, the conditions set
forth in section 5.1 have not been satisfied or waived;
without further notice to, or action on the part of the Members for
whatever reason it may consider
appropriate;
(b) If the Effective Date has not occurred at or before 5:00 p.m.
(Vancouver time) on December 15, 2000,
this Agreement shall terminate unless the parties shall otherwise agree;
and
(c) Either of Altoro or Solitario may, at the discretion of their
respective boards of directors, terminate
their respective obligations hereunder if prior to the Effective Date there
shall occur any material
adverse change, as determined by the respective boards of directors, in or
with respect to the assets,
liabilities (actual or contingent), capital, operations, business or
undertaking of the other company.
6.3 Effect of Termination
Upon the termination of this Agreement pursuant to this Article 6 the
provisions hereof will become void and
neither party shall have any liability or further obligation to perform its
obligations hereunder except as otherwise
contemplated hereby, and provided that, neither the termination of this
Agreement nor anything contained in this section
6.3 shall relieve any party from any liability for any breach by it of this
Agreement.
ARTICLE 7
MERGER
7.1 Merger of Conditions
The conditions set out in sections 5.1, 5.2, 5.3 and 5.4 shall be
conclusively deemed to have been satisfied,
waived or released upon the delivery to the Registrar pursuant to
subsection 252 of the Act of a certified copy of the
Final Order and any other required documents to give effect to the
Arrangement and any amendments to the
memorandum of Altoro and articles of Solitario.
<PAGE>
Exhibit 20.1
October 19, 2000
PLAN OF ARRANGEMENT BECOMES EFFECTIVE
DENVER, COLORADO: Solitario Resources Corporation ("Solitario") is pleased
to announce that corporate reorganization as contemplated by the plan of
arrangement between Altoro Gold Corp. ("Altoro") and Solitario became
effective as of October 18, 2000 (the "Effective Date").
As of the Effective Date, every shareholder of record of Altoro is
entitled to receive one common share of Solitario for every three common
shares of Altoro. Solitario has requested that shareholders of Altoro
exchange their share certificates for Solitario share certificates. The
common shares of Solitario issued to Altoro shareholders will be listed on
the Toronto Stock Exchange under the symbol "SLR", and the shares of Altoro
will be delisted from the Canadian Venture Exchange.
Solitario is a gold, PGE and base metals exploration company actively
exploring in Peru, Bolivia and Brazil. Solitario is a 42%-owned
subsidiary of Crown Resources Corporation (NASDAQ: CRRS; TSE: CRO) and is
traded on the Toronto Stock Exchange under the symbol SLR.
The Toronto Stock Exchange and the Canadian Venture Exchange have neither
approved nor disapproved of the contents of this news release.
FOR MORE INFORMATION, CONTACT:
Solitario Resources Corporation: Altoro Gold Corporation:
Debbie W. Mino: (800) 229-6827 Joan McCorquodale
Christopher E. Herald David O'Connor
(303) 534-1030 (604) 718-9079
E-mail: [email protected] E-mail: [email protected]
