SHARE PURCHASE AGREEMENT
 
BETWEEN

INTI HOLDINGS LIMITED

and

RAE-WALLACE MINING COMPANY

and

RAE WALLACE PERU S.A.C.

and

GEORGE COLE
 
 
 

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TABLE OF CONTENTS
 
ARTICLE 1 INTERPRETATION
1
1.1
Definitions
1
1.2
Best Knowledge
6
1.3
Currency
6
1.4
Governing Law
6
1.5
Interpretation Not Affected by Headings
6
1.6
Number and Gender
6
1.7
Time of Essence
6
1.8
Severability
7
1.9
Accounting Terms
7
1.10
Calculation of Time Periods
7
1.11
Statutory Instruments
7
1.12
Incorporation of Schedules
7
ARTICLE 2 PURCHASE AND SALE
7
2.1
Purchased Shares
7
2.2
Purchase Price
8
2.3
Payment of Purchase Price
8
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
8
3.1
Representations and Warranties of the Vendor, the Shareholder and the
Corporation
8
3.2
Representations and Warranties of the Purchaser
20
3.3
Survival of Covenants, Representations and Warranties of the Parties
21
ARTICLE 4 COVENANTS
22
4.1
Conduct During Interim Period
22
4.2
Access to Information
23
4.3
Satisfaction of Closing Conditions
24
4.4
Delivery of Records
24
ARTICLE 5 CONDITIONS OF CLOSING
24
5.1
Conditions for the Benefit of the Purchaser
24
5.2
Waiver or Termination by the Purchaser
26
5.3
Conditions for the Benefit of the Vendor and the Shareholder
27
5.4
Waiver or Termination by the Vendor and the Shareholder.
27
5.5
Conditions Precedent
28
5.6
Survival following Termination
28
ARTICLE 6 CLOSING ARRANGEMENTS
28
6.1
Place of Closing
28
6.2
Deliveries at the Closing
28
ARTICLE 7 INDEMNIFICATION
28
7.1
Indemnification by the Vendor
28
7.2
Indemnification by the Purchaser
29
7.3
Notice of Claim
29
7.4
Procedure for Indemnification
30
7.5
General Indemnification Rules
30
ARTICLE 8 GENERAL
32
8.1
Confidentiality
32
8.2
Notices
32
8.3
Public Announcements and Disclosure
33
8.4
Assignment
33
8.5
Best Efforts
33
8.6
Expenses
34
8.7
Further Assurances
34
8.8
Entire Agreement
34
8.9
Waiver, Amendment
34
8.10
Rights Cumulative
34
8.11
Arbitration
34
8.12
Counterparts
35
Schedule 1.1(hh) – Peruvian Documents
1
Schedule 3.1(15) – Financial Statements
1
Schedule 3.1(28)(32)(33) - Material Contracts, Real and Leased Properties,
Authorizations and Mineral Rights
1
Schedule 3.1(29) – Bank Accounts and Powers of Attorney
1

 
 
 

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SHARE PURCHASE AGREEMENT

THIS AGREEMENT made as of the 3rd day of April, 2013,

BETWEEN:

INTI HOLDINGS LIMITED,
a corporation incorporated pursuant to the laws of the Cayman Islands
(the “Purchaser”)

- and -

RAE-WALLACE MINING COMPANY,
a corporation incorporated pursuant to the laws of the Cayman Islands
(the “Vendor”)

- and -

RAE WALLACE PERU S.A.C.
a corporation incorporated pursuant to the laws of Peru
(the “Corporation”)

-and-

GEORGE COLE
an individual resident in the United States of America
(the “Shareholder”)

WHEREAS the Vendor and the Shareholder are the registered and beneficial owners
of all of the issued and outstanding shares in the capital of the Corporation;
 
AND WHEREAS the Purchaser wishes to purchase, and the Vendor wishes to sell, the
Purchased Shares (as defined below) on the terms and conditions in this
Agreement.
 
NOW THEREFORE BE IT RESOLVED THAT:
 
ARTICLE 1
INTERPRETATION
 
1.1           Definitions
 
In this Agreement and in the schedules, the following terms and expressions will
have the following meanings:
 
 
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(a)
“Agreement” means this share purchase agreement and all instruments amending it;
“hereof”, “hereto” and “hereunder” and similar expressions mean and refer to
this Agreement and not to any particular Article, Section, or other subdivision;
“Article”, “Section” or other subdivisions of this Agreement followed by a
number means and refers to the specified Article, Section or other subdivision
of this Agreement;

 
 
(b)
“assessment” shall include a reassessment or additional assessment and the term
“assessed” shall be interpreted in the same manner;

 
 
(c)
“Business” means the business carried on by the Corporation which primarily
involves the exploration of mineral properties in the Republic of Peru and all
operations related thereto;

 
 
(d)
“Business Day” means any day other than a Saturday, a Sunday or a statutory
holiday in the Province of Ontario or any other day on which the principal
chartered banks located in the City of Toronto are not open for business during
normal banking hours;

 
 
(e)
“Claim” has the meaning ascribed in Section 7.3;

 
 
(f)
“Closing” means the completion of the Transactions pursuant to this Agreement at
the Closing Time;

 
 
(g)
“Closing Date” means April 2, 2013, or such other date as the Parties may agree
upon;

 
 
(h)
“Closing Time” means 10:00 a.m. in the City of Toronto on the Closing Date or
such other time on the Closing Date as the Parties may agree upon as the time at
which the Closing shall take place;

 
 
(i)
“Closing Time Year” means the taxation year of the Corporation ending at the
Closing Time;

 
 
(j)
“Consent” means a license, permit, approval, consent, certificate, registration
or authorization (including, without limitation, those made or issued by a
Regulatory Authority, in respect of a Contract, or otherwise);

 
 
(k)
“Contract” means any agreement, understanding, indenture, contract, lease, deed
of trust, license, option, instrument or other commitment;

 
 
(l)
“Deposit” has the meaning ascribed in Section 2.3;

 
 
(m)
“Encumbrances” means mortgages, charges, pledges, security interests, liens,
encumbrances, actions, claims, demands and equities of any nature whatsoever or
howsoever arising and any rights or privileges capable of becoming any of the
foregoing;

 
 
(n)
“Environmental Consents” has the meaning ascribed in Section 3.1(34)(ii);

 
 
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(o)
“Environmental Laws” has the meaning ascribed in Section 3.1(34)(i);

 
 
(p)
“Financial Statements” means the financial statements of the Corporation for the
most recently completed reporting period consisting of a balance sheet, an
income statement, a statement of changes in financial position and a statement
of retained earnings together with the accompanying notes, a copy of which are
attached as Schedule 3.1(15);

 
 
(q)
“Financial Statements Date” means the date of the balance sheet included in the
Financial Statements;

 
 
(r)
“IFRS” means the International Financial Reporting Standards, as used by
publicly accountable enterprises, adopted from time to time by the Accounting
Standards Board as the accounting principles generally accepted in Canada and as
issued, established and updated into the CICA Handbook of the Canadian Institute
of Chartered Accountants, applied in a consistent manner from one accounting
period to another;

 
 
(s)
“Hazardous Substance” has the meaning ascribed in Section 3.1(34)(iii);

 
 
(t)
“Indemnified Party” has the meaning ascribed in Section 7.3;

 
 
(u)
“Indemnifying Party” has the meaning ascribed in Section 7.3;

 
 
(v)
“Interim Period” means the period from and including the date of this Agreement
to and including the Closing Date;

 
 
(w)
“ITA” means the Income Tax Act (Canada);

 
 
(x)
“Law” or “Laws” means all requirements imposed by statutes, regulations, rules,
ordinances, by-laws, decrees, codes, policies, judgments, orders, rulings,
decisions, approvals, notices, permits, guidelines or directives of any
Regulatory Authority;

 
 
(y)
“Leased Premises” means the premises leased or subleased by the Corporation
under the Leases;

 
 
(z)
“Leases” means the leases, subleases, agreements to lease and tenancy agreements
under which the Corporation leases or subleases any real property as lessee or
sublessee, as listed in Schedule 3.1(28)(32)(33);

 
 
(aa)
“Lessee” has the meaning ascribed in Section 3.1(32)(c);

 
 
(bb)
“Mineral Rights” has the meaning ascribed in Section 3.1(33);

 
 
(cc)
“NI 45-106” means National Instrument 45-106 Prospectus and Registration
Exemptions adopted by the Ontario Securities Commission;

 
 
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(dd)
“Parties” means the Vendor, the Purchaser, the Corporation and the Shareholder,
and any other person that may become a party to this Agreement and Party means
any one of them;

 
 
(ee)
“Pilot Gold NSR” means the 2% net smelter return royalty with respect to certain
Mineral Rights, and for greater certainty such 2% net smelter return royalty not
with respect to any interest in the Liscay project, granted in favour of Pilot
Gold Inc. (“Pilot Gold”) pursuant to a termination agreement dated July 18th,
2012;

 
 
(ff)
“Permitted Encumbrances” means:

 
 
(i)
liens for Taxes, assessments and governmental charges due and being contested in
good faith and diligently by appropriate proceedings (and for the payment of
which adequate provision has been made);

 
 
(ii)
servitudes, easements, restrictions, rights of parties in possession, zoning
restrictions, encroachments, reservations, rights-of-way and other similar
rights in real property or any interest therein, provided the same are not of
such nature as to materially adversely affect the validity of title to or the
value, marketability or use of the property subject thereto by the Corporation;

 
 
(iii)
liens for Taxes either not due and payable or due but for which notice of
assessment has not been given;

 
 
(iv)
undetermined or inchoate liens, charges and privileges incidental to current
construction or current operations and Encumbrances claimed or held by any
Regulatory Authority that have not at the time been filed or registered against
the title to the asset or served upon the Corporation pursuant to law or that
relate to obligations not due or delinquent;

 
 
(v)
assignments of insurance provided to landlords (or their mortgagees) pursuant to
the terms of any Lease and liens or rights reserved in any Lease for rent or for
compliance with the terms of such Lease;

 
 
(vi)
security given in the ordinary course of the Business to any Regulatory
Authority in connection with the operations of the Business, other than security
for borrowed money; and

 
 
(vii)
the reservations of any real property or interest therein and statutory
exceptions to title that do not materially detract from the value of the real
property concerned or materially impair its use in the operation of the
Business;

 
 
(gg)
“person” includes any individual, corporation, partnership, firm, joint venture,
syndicate, association, trust, government, governmental agency and any other
form of entity or organization;

 
 
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(hh)
“Peruvian Documents” means the corporate and tax documents that are required to
be delivered by the Vendor and the Purchaser to SUNAT as attached as Schedule
1.1(hh);

 
 
(ii)
“Purchase Price” has the meaning ascribed in Section 2.2;

 
 
(jj)
“Purchased Shares” means the Shareholder Share and the Vendor Shares;

 
 
(kk)
“Real Properties” means the real properties, other than the mineral properties,
owned by the Corporation which are described in Schedule 3.1(28)(32)(33);

 
 
(ll)
“Records” means all technical, business and financial records relating to the
Business, including, without limitation, minute books, share ledger, customer
lists, operating data, files, financial books, correspondence, credit
information, research materials, contract documents, title documents, leases,
surveys, records of past sales, supplier lists, employee documents, inventory
data, accounts receivable data, financial statements and any other similar
records in any form whatsoever (including written, printed, electronic or
computer printout form);

 
 
(mm)
“Regulatory Authority” means any government, regulatory or administrative
authority, agency, commission, utility or board (federal, provincial, municipal
or local, domestic or foreign) having jurisdiction in the relevant circumstances
and any person acting under the authority of any of the foregoing and any
judicial, administrative or arbitral court, authority, tribunal or commission
having jurisdiction in the relevant circumstances;

 
 
(nn)
“Release” has the meaning ascribed in Section 3.1(34)(iv);

 
 
(oo)
“Royalty Agreement” means the purchase agreement made effective as of the 8th
day of July, 2010 between Geologix Explorations Inc., Geologix (Peru) S.A.
(“Geologix”), the Vendor and the Corporation by which Geologix granted Newmont
Peru S.R.L. a two percent (2%) net smelter return royalty for precious metals
and a one percent (1%) net smelter return royalty for all other minerals from
the sale or other disposition of all minerals produced from the properties;

 
 
(pp)
“Securities Act” means the Securities Act (Ontario);

 
 
(qq)
“Shareholder Share” means the 1 common share issued and outstanding in the
capital of the Corporation being sold by the Shareholder and purchased by the
Purchaser;

 
 
(rr)
“SUNAT” means the Peruvian National Superintendence of Tax Administration;

 
 
(ss)
“Tax” and “Taxes” have the meaning ascribed in Section 3.1(31)(i);

 
 
(tt)
“Tax Return” has the meaning ascribed in Section 3.1(31)(ii);

 
 
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(uu)
“Termination Agreement” means the termination agreement made as of the 9th day
of July, 2012 (as amended by an amending agreement dated January 30, 2013)
between Pilot Gold, the Vendor and the Corporation by which the parties agreed
to, among other things, terminate an option agreement with respect to the
Mineral Rights and grant Pilot Gold the Pilot Gold NSR;

 
 
(vv)
“Transactions” means the purchase and sale of the Purchased Shares and all other
transactions contemplated by this Agreement; and

 
 
(ww)
“Vendor Shares” means the 3,613,879 issued and outstanding common shares in the
capital of the Corporation being sold by the Vendor and purchased by the
Purchaser.

 
1.2           Best Knowledge
 
Any reference herein to “the best knowledge” of the Vendor will be deemed to
mean the actual knowledge of the Chief Executive Officer and Chief Financial
Officer of the Vendor, together with the knowledge which they would have had if
they had conducted a diligent inquiry into the relevant subject matter.
 
1.3           Currency
 
Unless otherwise indicated, all references to dollar amounts in this Agreement
are expressed in United States currency.
 
1.4           Governing Law
 
This Agreement shall be governed by and construed and interpreted in accordance
with the laws of the Province of Ontario and the laws of Canada applicable
therein. The Parties hereby irrevocably attorn to the non-exclusive jurisdiction
of the courts of Ontario with respect to any matter arising under or related to
this Agreement.
 
1.5           Interpretation Not Affected by Headings
 
The division of this Agreement into articles and sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
 
1.6           Number and Gender
 
In this Agreement, unless the context otherwise requires, any reference to
gender shall include both genders and words importing the singular number shall
include the plural and vice-versa.
 
1.7           Time of Essence
 
Time shall be of the essence of every provision of this Agreement.
 
 
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1.8           Severability
 
Each of the provisions contained in this Agreement is distinct and severable and
a declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof.
 
1.9           Accounting Terms
 
All accounting terms not specifically defined in this Agreement shall be
construed in accordance with IFRS.
 
1.10           Calculation of Time Periods
 
Where a time period is expressed to begin or end at, on or with a specified day,
or to continue to or until a specified day, the time period includes that day.
Where a time period is expressed to begin after or to be from a specified day,
the time period does not include that day. Where anything is to be done within a
time period expressed after, from or before a specified day, the time period
does not include that day. If the last day of a time period is not a Business
Day, the time period shall end on the next Business Day.
 
1.11           Statutory Instruments
 
Unless otherwise specifically provided in this Agreement, any reference in this
Agreement to any Law shall be construed as a reference to such Law as amended or
re-enacted from time to time or as a reference to any successor thereto.
 
1.12           Incorporation of Schedules
 
The following are the schedules attached to and incorporated by reference into
this Agreement:
 
Schedule 1.1(hh)
Peruvian Documents

Schedule 3.1(15)
Financial Statements;

Schedule 3.1(28)(32)(33)
Material Contracts, Real Properties and Leased Premises and Mineral Rights

Schedule 3.1(29)
Bank Accounts and Powers of Attorney

 
 
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ARTICLE 2
PURCHASE AND SALE
 
2.1           Purchased Shares
 
On the terms and subject to the fulfilment of the conditions of this Agreement,
the Vendor and the Shareholder each agree to sell, assign and transfer to the
Purchaser, and the Purchaser agrees to purchase from the Vendor and the
Shareholder at the Closing Time on the Closing Date, all of the Purchased
Shares.
 
2.2           Purchase Price
 
The purchase price (the “Purchase Price”) payable by the Purchaser to the Vendor
for the Purchased Shares shall be seven hundred thousand dollars (USD$700,000).
 
2.3           Payment of Purchase Price
 
The Purchase Price shall be paid and satisfied by the payment by cash, certified
cheque, or wire payment in immediate available funds to the Vendor on the
Closing Date of seven hundred thousand dollars (USD$700,000).
 
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
 
3.1           Representations and Warranties of the Vendor, the Shareholder and
the Corporation
 
The Vendor and the Shareholder hereby make the following representations and
warranties to the Purchaser and acknowledge that the Purchaser is relying on
such representations and warranties in entering into this Agreement and
completing the Transactions:
 
(1)           Incorporation and Existence of the Corporation  The Corporation is
a corporation incorporated and existing under the laws of Peru and is a
majority-owned subsidiary of the Vendor.
 
(2)           Incorporation and Existence of the Vendor  The Vendor is a
corporation incorporated and existing under the laws of the Cayman Islands.
 
(3)           Corporate Power  The Corporation has the corporate power and
authority to own or lease its property and to carry on the Business as now being
conducted by it.
 
(4)           Qualification  The Corporation is duly qualified, licensed or
registered to carry on business and is in good standing in the jurisdiction of
its incorporation.
 
(5)           Authorized and Issued Capital  The authorized capital of the
Corporation consists of an unlimited number of common shares of which at the
date of this Agreement 3,613,880 common shares have been duly issued and are
outstanding as fully paid and non-assessable common shares of the Corporation
and at the Closing Time, 3,613,880 common shares shall have been duly issued and
shall be outstanding as fully paid and non-assessable common shares of the
Corporation.
 
(6)           Options and Warrants  Except for the Purchaser’s right in this
Agreement, no person has any option, warrant, right, call, commitment,
conversion right, right of exchange or other agreement or any right or privilege
(whether by law, pre-emptive or contractual) capable of becoming an option,
warrant, right, call, commitment, conversion right, right of exchange or other
agreement for: (a) the purchase from the Vendor or the Shareholder of any of the
Purchased Shares; (b) the purchase, subscription, allotment or issuance of any
unissued shares or securities of the Corporation; or (c) other than in the
ordinary course of the Business, the purchase or other acquisition from the
Corporation of any of its undertaking, property or assets.  The Vendor, the
Shareholder and the Corporation have each respectively waived any legal
pre-emptive right to acquire any of the Purchased Shares.
 
 
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(7)           Title to Purchased Shares  The Vendor Shares are owned by the
Vendor as the registered and beneficial owner with good and marketable title,
free and clear of all Encumbrances and the Vendor has the exclusive right to
sell, dispose or transfer the Vendor Shares.  The Shareholder Share is owned by
the Shareholder as the registered and beneficial owner with good and marketable
title, free and clear of all Encumbrances and the Shareholder has the exclusive
right to sell, dispose or transfer the Shareholder Share.
 
(8)           Dividends and Distributions  Since the Financial Statements Date,
the Corporation has not, directly or indirectly, declared or paid any dividends
or declared or made any other distribution on any of its shares of any class and
has not, directly or indirectly, reduced the capital of the Corporation or
reduced the face value of its shares, redeemed, purchased or otherwise acquired
any of its outstanding shares of any class or agreed to do so.
 
(9)           Corporate Records  The corporate records of the Corporation are
complete and accurate and all corporate proceedings and actions reflected
therein have been conducted or taken in compliance with all applicable Laws and
with the articles and by-laws of the Corporation and without limiting the
generality of the foregoing, (a) the minute books contain complete and accurate
minutes of all meetings of the directors and shareholders of the Corporation
held since their respective dates of incorporation, and all such meetings were
duly called and held; (b) the minute books contain all written resolutions
passed by the directors and shareholders of the Corporation and all such
resolutions were duly passed; (c) the share certificate books or share ledger,
registers of shareholders and registers of securities transfers of the
Corporation and any existing Encumbrance upon the shares are completely and
accurately recorded, and all transfers of securities have been duly completed
and approved and any exigible tax payable in connection with the transfer of any
securities of the Corporation has been duly paid; and (d) the registers of
directors and officers are complete and accurate and all former and present
directors and officers of the Corporation were duly elected or appointed as the
case may be.
 
(10)           Validity of Agreement
 
 
(a)
The Vendor and the Shareholder have all necessary corporate power to own the
Purchased Shares and to enter into and perform their obligations under this
Agreement, and each of the Vendor, Corporation and the Shareholder have all
necessary corporate power to enter into and perform their respective obligations
under any other agreements or instruments to be delivered or given by it
pursuant to this Agreement.

 
 
(b)
The Vendor’s execution and delivery of, and performance of its obligations
under, this Agreement and the consummation of the Transactions have been duly
authorized by all necessary corporate action on the part of each of the Vendor
and the Corporation, respectively.

 
 
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(c)
This Agreement or any other agreements entered into pursuant to this Agreement
to which either of the Corporation or the Vendor is a party constitute legal,
valid and binding obligations of each of the Corporation or the Vendor, as the
case may be, enforceable against each of them in accordance with their
respective terms, except as enforcement may be limited by bankruptcy, insolvency
and other laws affecting the rights of creditors generally and except that
equitable remedies may be granted only in the discretion of a court of competent
jurisdiction.

 
(11)           No Violation  The execution and delivery of this Agreement by the
Vendor, the consummation of the Transactions and the fulfilment by the Vendor of
the terms, conditions and provisions hereof will not (with or without the giving
of notice or lapse of time, or both):
 
 
(a)
contravene or violate or result in a breach or a default under or give rise to a
right of termination, amendment or cancellation or the acceleration of any
obligations of the Vendor or the Corporation:

 
 
(i)
any applicable Law;

 
 
(ii)
any judgment, order, writ, injunction or decree of any Regulatory Authority
having jurisdiction over the Vendor or the Corporation;

 
 
(iii)
the articles, by-laws or any resolutions of the board of directors or
shareholders of the Vendor or the Corporation;

 
 
(iv)
any Consent held by the Vendor or the Corporation or necessary to the ownership
of the Purchased Shares or the operation of the Business; or

 
 
(v)
the provisions of any Contract to which the Vendor or the Corporation is a party
or by which any of them is, or any of their properties or assets are, bound; or

 
 
(b)
result in the creation or imposition of any Encumbrance on any of the Purchased
Shares or any of the property or assets of the Corporation.

 
(12)           Shareholders’ Agreements  There are no shareholders’ agreements,
pooling agreements, voting trusts or other similar agreements with respect to
the ownership or voting of any of the shares of the Corporation.  The Vendor,
the Shareholder and the Corporation have each waived their respective statutory
pre-emptive right to acquire the Purchased shares.
 
(13)           Private Issuer  The Corporation is a private company and the sale
of the Vendor Shares by the Vendor to the Purchaser will be made in compliance
with applicable securities laws.
 
(14)           Regulatory and Contractual Consents There is no requirement under
any contract or to make any filing with, give any notice to or obtain any
Consent from any Regulatory Authority as a condition to the lawful consummation
of the Transactions.
 
(15)           Financial Statements  The Financial Statements:
 
 
(a)
have been prepared in accordance with IFRS on a basis consistent with that of
prior fiscal periods;

 
 
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(b)
are complete and accurate; and

 
 
(c)
present fairly the assets, liabilities (whether accrued, absolute, contingent or
otherwise) and financial condition of the Corporation at the respective balance
sheet dates, and the results of operations of the Corporation.

 
(16)           Records  The Records have been duly maintained in accordance with
all applicable legal requirements and contain full and accurate records of all
material matters relating to the Business. All material financial transactions
relating to the Business have been accurately recorded in the Records in
accordance with IFRS.  No Records are in the possession of, recorded, stored,
maintained by, or otherwise dependent on, any other person.
 
(17)           No Material Adverse Change Since the Financial Statements Date,
no material adverse change has occurred in any of the assets, business,
financial condition, earnings, results of operations or prospects of the
Corporation nor has any other event, condition, or state of facts occurred or
arisen which might have a material adverse effect on the assets, business,
financial condition, earnings, results of operations or prospects of the
Corporation.
 
(18)           Absence of Undisclosed Liabilities  Except to the extent
reflected or reserved against in the balance sheet (including the notes thereto)
forming part of the Financial Statements or incurred subsequent to the date
thereof and except in respect of normal trade payables arising in the ordinary
course of the Business, the Corporation does not have any outstanding
indebtedness or any liabilities (whether accrued, absolute, contingent or
otherwise) nor any outstanding commitments or obligations of any kind exceeding
$10,000.
 
(19)           Consents The Corporation has conducted the Business in compliance
with, and holds all Consents necessary for the lawful operation of the Business,
pursuant to all applicable Laws, and all of which are valid and subsisting and
in good standing with no violations as of the date of this Agreement. All such
Consents are renewable by their terms or in the ordinary course of the Business
without the need for the Corporation to comply with any special qualification or
procedures or to pay any amounts other than routine filing fees.
 
(20)           Compliance with Laws  The Corporation has complied, and the
Business is now being conducted in compliance, with all Laws applicable to the
Business, and to the Corporation.
 
(21)           Conduct of Business in Ordinary Course  Since
the Financial Statements Date the Business has been carried on in the ordinary
course consistent with past practice. The Business is the only business
operation carried on by the Corporation, and the property and assets owned or
leased by the Corporation are sufficient to carry on the Business at the Closing
Date.
 
(22)           Location of Tangible Personal Property  All the tangible and
intangible assets of the Corporation are situate at the location of the
jurisdiction of its incorporation.
 
(23)           Condition of Assets  All material tangible personal property used
by the Corporation in or in connection with the Business or any part thereof is
in good operating condition, repair and proper working order, having regard to
its use and age, except only for reasonable wear and tear.
 
 
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(24)           Title to Personal and Other Property  The property and assets of
the Corporation (other than the Real Properties) are owned by the Corporation as
the beneficial owner with a good and marketable title, free and clear of all
Encumbrances other than the Permitted Encumbrances.
 
(25)           Litigation  There are no actions, suits or proceedings, judicial
or administrative, (whether or not purportedly on behalf of the Corporation)
pending or threatened, by or against or affecting the Corporation, at law or in
equity, or before or by any Regulatory Authority. Further, there are no grounds
on which any such action, suit or proceeding might be commenced with any
reasonable likelihood of success and there is not presently outstanding against
the Corporation any judgment, injunction or other order of any Regulatory
Authority.
 
(26)           Capital Expenditures  Other than certain property payments not
exceeding the aggregate of $100,000 due in June 2013, the Corporation is not
committed to make any capital expenditures, nor have any capital expenditures
been authorized by the Corporation at any time since the Financial Statements
Date, except for capital expenditures made in the ordinary course of the
Business which, in the aggregate, do not exceed $10,000.
 
(27)           Accounts Receivable The accounts receivable due or accruing to
the Corporation reflected in the Financial Statements and all accounts
receivable of the Corporation arising since the date of the Financial Statements
arose from bona fide transactions in the ordinary course of the Business and are
valid, enforceable and fully collectible accounts (subject to a reasonable
allowance, consistent with past practice, for doubtful accounts as reflected in
the Financial Statements in accordance with IFRS or as previously disclosed in
writing to the Purchaser). Such accounts receivable are not subject to any
defence, set-off or counterclaim.
 
(28)           Material Contracts The contracts listed in Schedule
3.1(28)(32)(33) constitutes all the material Contracts of the
Corporation.  Without limiting the generality of the foregoing, and except as
otherwise set out in Schedule 3.1(28)(32)(33), the Corporation is not a party to
or bound by any:
 
 
(a)
distributor, sales, advertising, agency or manufacturer’s representative
Contract;

 
 
(b)
collective bargaining agreement or other Contract with any labour union;

 
 
(c)
continuing Contract for the purchase of materials, supplies, equipment or
services involving more than $10,000 in respect of any such Contract;

 
 
(d)
employment or consulting Contract or any other Contract with any officer,
employee or consultant other than oral Contracts of indefinite hire terminable
by the employer without cause on reasonable notice;

 
 
(e)
profit sharing, bonus, stock option, pension, retirement, disability, stock
purchase, medical, dental, hospitalization, insurance or similar plan or
agreement providing benefits to any current or former director, officer,
employee or consultant;

 
 
(f)
trust indenture, mortgage, promissory note, loan agreement, guarantee or other
Contract for the borrowing of money, the provision of financial assistance of
any kind or a leasing transaction of a type required to be capitalized in
accordance with IFRS, or any Contract creating an Encumbrance relating thereto;

 
 
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(g)
commitment for charitable contributions;

 
 
(h)
Contract for capital expenditures in excess of $10,000 in the aggregate;

 
 
(i)
Contract for the sale of any assets, other than sales of inventory to customers
in the ordinary course of the Business;

 
 
(j)
Contract pursuant to which the Corporation is a lessor of any machinery,
equipment, motor vehicles, office furniture, fixtures or other personal property
material to the Business;

 
 
(k)
Contract pursuant to which the Corporation is committed to process minerals or
any other material;

 
 
(l)
Contract pursuant to which the Corporation is committed to transport minerals,
concentrates, dumps, tailings or any other material;

 
 
(m)
Contract pursuant to which the Corporation is committed to sell or transfer any
minerals or any other material;

 
 
(n)
Contract pursuant to which the Corporation is committed to store minerals,
concentrates, leached solutions, drilling cores, machinery or any other material
or equipment;

 
 
(o)
confidentiality, secrecy or non-disclosure Contract (whether the Corporation is
a beneficiary or obligor thereunder) relating to any proprietary or confidential
information or any non-competition or similar Contract;

 
 
(p)
agreement of guarantee, support, indemnification, assumption or endorsement of,
or any other similar commitment with respect to, the obligations, liabilities
(whether accrued, absolute, contingent or otherwise) or indebtedness of, or any
agreement to provide financial assistance of any kind to, any other person
(except for cheques endorsed for collection);

 
 
(q)
Contract that expires, or may expire if the same is not renewed or extended at
the option of any person other than the Corporation, more than one year after
the date of this Agreement;

 
 
(r)
Contract with any officer, director, employee, shareholder or any other person
not dealing at arm’s length with the Corporation (within the meaning of the ITA)
except for Contracts of employment; or

 
 
(s)
Contract entered into by the Corporation other than in the ordinary course of
the Business.

 
 
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The Corporation has performed all of its obligations required to be performed by
it and is entitled to all of the benefits under any Contract relating to the
Business to which it is a party or by which it is bound. The Contracts listed in
Schedule 3.1(28)(32)(33) are all in full force and effect unamended and, other
than as disclosed to the Purchaser in writing or otherwise or other than as
disclosed in the Financial Statements, no default nor pending obligation (even
if at the time of this Agreement such pending obligation does not constitute an
event of default) exists on the part of any of the parties thereto. The
Corporation is not in default or in breach of any Contract to which it is a
party and there exists no condition, event or act which, with the giving of
notice or lapse of time or both would constitute such a default or breach and
all such Contracts are in good standing and in full force and effect unamended
and the Corporation is entitled to all benefits thereunder. The Vendor has
provided to the Purchaser a true and complete copy of each Contract listed in
Schedule 3.1(28)(32)(33) and all amendments.
 
(29)           Bank Accounts and Powers of Attorney  Schedule 3.1(29) is a
correct and complete list showing (i) the name of each bank, trust company or
similar institution in which the Corporation or a Subsidiary has an account or
safe deposit box, the number or designation of each such account and safe
deposit box and the names of all persons authorized to draw thereon or to have
access thereto; and (ii) the names of any persons holding powers of attorney
from the Corporation and a summary of the terms.
 
(30)           Brokers None of the Vendor, the Shareholder or the Corporation
has engaged any broker or other agent in connection with the Transactions and,
accordingly, there is no commission, fee or other remuneration payable to any
broker or agent who purports or may purport to act or have acted for the Vendor
or the Corporation.
 
(31)           Tax Matters
 
 
(a)
For purposes of this Section 3.1(31), the following definitions shall apply:

 
 
(i)
“Tax” and “Taxes” shall mean any or all national, federal, regional, provincial,
local or foreign income, gross receipts, real property gains, goods and
services, license, payroll, employment, excise, severance (including the
“Compensación por Tiempo de Servicios”), workers profit sharing, mandatory
workers insurances, indemnifications for layouts, pension premiums, stamp,
occupation, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, mining
concession fees, penalties for not meeting the annual minimum production or
investment, or other taxes, levies, governmental charges or assessments of any
kind whatsoever, including, without limitation, any estimated tax payments,
interest, penalties or other additions, whether or not disputed.

 
 
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(ii)
“Tax Return” shall mean any return, declaration, report, estimate, information
return or statement, or claim for refund relating to, or required to be filed in
connection with any Taxes, including information returns or reports with respect
to withholding at source or payments to third parties, and any schedules or
attachments or amendments of any of the foregoing.

 
 
(b)
The Corporation has timely filed, or has caused to be timely filed on its
behalf, all Tax Returns required to be filed by it, all such Tax Returns are
complete and accurate in all material respects, for all periods through December
31, 2011 for the Corporation.  All Taxes shown to be due on such Tax Returns, or
otherwise owed, have been timely paid, other than those which are being
contested in good faith and in respect of which adequate reserves have been
provided in the most recently published financial statements of the
Corporation.  The Corporation’s Financial Statements reflect a reserve in
accordance with IFRS for all Taxes payable by the Corporation for all taxable
periods and portions thereof through the date of such financial statements.  No
deficiency with respect to any Taxes has been proposed, asserted or assessed in
writing against the Corporation, there are no actions, suits, proceedings,
investigations or claims pending or threatened against the Corporation in
respect of Taxes or any matters under discussion with any Regulatory Authority
relating to Taxes, in each case which are likely to have a material adverse
effect on the Corporation, and no waivers or written requests for waivers of the
time to assess any such Taxes are outstanding or pending.  The Corporation has
withheld from each payment made to any of their past or present employees,
officers or directors, and to any non-resident of Canada, the amount of all
Taxes required to be withheld therefrom and have paid the same to the proper tax
or receiving officers within the time required under applicable
legislation.  The Corporation, Vendor or Shareholder, as applicable, has
remitted or will promptly remit upon completion of the transaction contemplated
herein to the appropriate tax authorities all amounts collected by it in respect
of Taxes payable with respect to the transaction contemplated by this Agreement
or otherwise.  There are no liens for Taxes upon any asset of the Corporation
except liens for taxes not yet due.

 
 
(c)
The Corporation is not a party to any joint venture, partnership or other
arrangement or Contract that could be treated as a partnership for Tax purposes.

 
(32)           Real Properties and Leased Premises
 
 
(a)
Schedule 3.1(28)(32)(33) lists all Real Properties owned in whole or in part by
the Corporation and sets forth the legal descriptions. There are no Contracts to
sell, transfer or otherwise dispose of any of the Real Properties, or to
purchase or acquire any real properties other than the Real Properties, or which
would restrict the ability of the Corporation to acquire or transfer any of the
Real Properties.

 
 
(b)
The Corporation is the absolute beneficial owner of, and has good and marketable
title in fee simple to each of the Real Properties, free and clear of any and
all Encumbrances, except for the Permitted Encumbrances. Complete and correct
copies of all documents creating those Permitted Encumbrances which affect the
Real Properties have been provided to the Purchaser. Except as otherwise
disclosed in Schedule 3.1(28)(32)(33), none of the Real Properties is leased,
subject to an usufruct, subject to an easement, or licenced, in whole or in
part, to any other person.

 
 
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(c)
Schedule 3.1(28)(32)(33) describes all Leases under which the Corporation leases
or subleases any real property as lessee or sublessee (hereinafter in this
section referred to as the “Lessee”). Other than the Leases, the Corporation is
not a party to or is not bound, as Lessee, by any lease, sublease, license or
other instrument relating to real property. Complete and correct copies of the
Leases have been provided to the Purchaser. The Leases are in full force and
effect, unamended. The Lessee under each Lease is exclusively entitled to all
rights and benefits as Lessee under such Lease, and no Lessee has sublet,
assigned, licensed or otherwise conveyed any rights in any of the Leased
Premises or in any of the Leases to any other person.

 
 
(d)
All rental and other payments and other obligations required to be paid and
performed by the Lessee pursuant to each of the Leases have been duly paid and
performed. The Lessee is not in default of any of its obligations under any of
the Leases and none of the landlords or other parties to the Leases are in
default of any of their obligations under any of the Leases. No waiver,
indulgence or postponement of the Lessee’s obligations under any of the Leases
has been granted by the landlord thereunder. There exists no event of default
under any Lease or event, occurrence, condition or act which, with the giving of
notice, the lapse of time or the happening of any other event or condition,
would become a default under the Lease. None of the terms and conditions of any
of the Leases will be affected by, nor will any of the Leases be in default as a
result of, the completion of the Transactions, and all Consents of landlords or
other parties to the Leases required in order to complete the Transactions have
been obtained, or will have been obtained by the Closing Time, and are, or once
obtained will be, in full force and effect.

 
 
(e)
The use by the Corporation of each of the Real Properties and Leased Premises is
not in breach of any Laws, including any building, zoning or other statutes or
any official plan, or any covenants, restrictions, rights or easements,
affecting such Real Property or Leased Premises.  All buildings, structures and
improvements situated on any of the Real Properties, and those situated on any
of the Leased Premises, are located wholly within the boundaries of such Real
Property or Leased Premises, as applicable, and comply with all Laws, covenants,
restrictions, rights and easements affecting the same. There are no outstanding
work orders, non-compliance orders, deficiency notices or other such notices
relative to any of the Real Properties or Leased Premises. No part of any of the
Real Properties or Leased Premises has been condemned, taken or expropriated by
any Regulatory Authority, nor has any notice or proceeding in respect thereof
been given, commenced or threatened.  Each of the Real Properties and Leased
Premises is fully serviced by utilities having adequate capacities for the
normal operations of the Business. Each of the Real Properties and Leased
Premises has adequate rights of access to and from public streets or highways
for the normal operations of the Business and there is no fact or circumstance
which could result in the termination or restriction of such access. There is no
defect or condition affecting any of the Real Properties or Leased Premises (or
the soil or subsoil thereof) or any adjoining property which would impair the
current use of such Real Property or Leased Premises.

 
 
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(f)
No amounts including, without limitation, municipal property Taxes, local
improvement Taxes, levies or assessments, are owing by the Corporation in
respect of any of the Real Properties or the Leased Premises to any Regulatory
Authority or public utility, other than current accounts which are not in
arrears. There are no outstanding appeals on assessments which have been issued
or raised by any Regulatory Authority or by the Corporation concerning any
realty, business or other Taxes with respect to any of the Real Properties or
Leased Premises. All amounts for labour or materials supplied to or on behalf of
the Corporation relating to the construction, alteration or repair of or on any
of the Real Properties or Leased Premises have been paid in full and no one has
filed or has a right to file any construction, builders’, mechanics’ or similar
liens.

 
 
(g)
The buildings and structures comprising the Real Properties and the Leased
Premises are free of any structural defect. The heating, ventilating, plumbing,
drainage, electrical and air conditioning systems and all other systems used in
any of the Real Properties or the Leased Premises are in good working order,
fully operational and free of any defect, except for normal wear and tear.

 
(33)           Interest in Mineral Rights
 
 
(a)
All of the Corporation’s material mineral interests and rights (including any
material claims, concessions, exploration licenses, exploitation licenses,
prospecting permits, mining leases and mining rights, in each case, either
existing under contract, by operation of Law or otherwise) (collectively, the
“Mineral Rights”), are set out in Schedule 3.1(28)(32)(33).  Other than the
Mineral Rights set out in Schedule 3.1(28)(32)(33), the Corporation does not
own, lease or have any interest in any material mineral interests and rights,
including rights upon ore processing facilities.

 
 
(b)
Except as set forth in Schedule 3.1(28)(32)(33), the Corporation is the sole
legal and beneficial owner or all right, title and interest in and to the
Mineral Rights, free and clear of any Encumbrances.

 
 
(c)
All of the Mineral Rights have been properly located and recorded in compliance
with applicable Law, including the registry of their UTM coordinates at the
registry file of each of the rights comprising the Mineral Rights, and are
comprised of valid and subsisting mineral claims, with full authority to explore
and mine on them.

 
 
(d)
The Mineral Rights are in good standing under applicable law and any and all
work and investment required to be performed and filed in respect thereof has
been performed and filed, all Taxes, rentals, fees, expenditures and other
payments in respect thereof have been paid or incurred and all filings in
respect thereof have been made.

 
 
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(e)
There is no overlapping or material adverse claim against or challenge to the
title to or ownership of the Mineral Rights.

 
 
(f)
The Corporation has the exclusive right to deal with the Mineral Rights.

 
 
(g)
Other than the Royalty Agreement and the Pilot Gold NSR, no Person other than
the Corporation has any interest in the Mineral Rights or the production or
profits therefrom or any royalty in respect thereof or any right to acquire any
such interest.

 
 
(h)
Other than the right of first refusal granted to Pilot Gold pursuant to the
Termination Agreement, there are no options, back-in rights, earn-in rights,
rights of first refusal or similar provisions or rights which would affect the
Corporation’s interest in the Mineral Rights.

 
 
(i)
The Mineral Rights are not located within any natural protected area or its
buffering zone, any town or its expansion zone, or any area banned for mining
activities.  There are not material restrictions on the ability of the
Corporation to use, transfer, explore, develop, construct or exploit the Mineral
Rights, except pursuant to the applicable Law.

 
 
(j)
The Corporation has not received any notice, whether written or oral, from any
Regulatory Authority of any revocation or intention to revoke any interest of
the Corporation in any of the Mineral Rights.

 
 
(k)
The Corporation has all surface rights, including fee simple estates, leases,
easements, right of way and permits or licences for operations from landowners
or Regulatory Authorities permitting the use of surface land by the Corporation,
and mineral interests for development and current exploration of the Mineral
Rights and no third party, local community or group holds any such rights that
are required by the Corporation to develop and currently exploit the Mineral
Rights.

 
 
(l)
All mines located in or on the lands of the Corporation or lands pooled or
unitized therewith, which have been abandoned by the Corporation, have been
abandoned in accordance with good mining practices and in compliance with all
applicable Laws, and all future abandonment, remediation and reclamation
obligations known to the Corporation as of the date hereof have been accurately
set forth in Schedule 3.1(28)(32)(33) without omission of information necessary
to make the disclosure not misleading.

 
(34)           Environmental Matters
 
 
(a)
For the purposes of this Agreement, the following terms and expressions shall
have the following meanings:

 
 
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(i)
“Environmental Laws” means all Laws applicable to the environment, occupational
health and safety, product safety, product liability and public safety.

 
 
(ii)
“Environmental Consents” includes all Consents issued by or issuable by any
Regulatory Authority under Environmental Laws.

 
 
(iii)
“Hazardous Substance” means, any material or substance that may impair the
quality of the environment or which under Environmental Laws is deemed to be
“hazardous”, a “pollutant”, “toxic”, “deleterious”, “caustic”, “dangerous”, a
“waste”, a “hazardous material”, a “source of contamination” or analogous
substance including, without limitation, petroleum and petroleum products,
asbestos, polychlorinated biphenyls, and flammable and radioactive materials.

 
 
(iv)
“Release” means any release, spill, leak, emission, discharge, leach, dumping,
migration, pumping, pouring, emitting, emptying, injecting, spraying, burying,
abandoning, incinerating, seeping, escape, disposal or similar or analogous act
as defined in any Environmental Laws.

 
 
(b)
The Corporation, the operation of the Business and the assets owned or used by
the Corporation have been and are in compliance with all Environmental Laws,
including all Environmental Consents.

 
 
(c)
The Corporation has not been charged with or convicted of any offence for
non-compliance with Environmental Laws, or been fined or otherwise sentenced or
settled any prosecution short of conviction; and (ii) there are no notices of
judgment or commencement of proceedings of any nature and the Corporation has
never been investigated relating to any breach or alleged breach of
Environmental Laws.

 
 
(d)
The Corporation has obtained all Environmental Consents necessary to conduct the
initial exploration activities and to own, use and operate their respective
properties and assets.

 
 
(e)
There are no Hazardous Substances located on or in or under the surface of the
Mineral Rights or any Real Properties or Leased Premises of the Corporation, and
no Release of any Hazardous Substances has occurred on, in or from any of the
Mineral Rights, Real Properties or Leased Premises or has resulted from the
operation of the Business and the conduct of activities thereon.

 
 
(f)
The Corporation has not used the area of the Mineral Rights or any of its Real
Properties or Leased Premises to produce, generate, manufacture, treat, store,
handle, transport or dispose of any Hazardous Substances except in compliance
with Environmental Laws.

 
 
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3.2           Representations and Warranties of the Purchaser
 
The Purchaser hereby makes the following representations and warranties to the
Vendor and acknowledges that the Vendor is relying on such representations and
warranties in entering into this Agreement and completing the Transactions:
 
(1)           Incorporation and Existence  It is a corporation duly organized,
and is validly subsisting, under the laws of the Cayman Islands and is
up-to-date in the filing of all corporate and similar returns under the laws of
that jurisdiction.
 
(2)           Validity of Agreement
 
 
(a)
The Purchaser has all necessary corporate power to own the Purchased Shares. The
Purchaser has all necessary corporate power to enter into and perform its
obligations under this Agreement and any other agreements or instruments to be
delivered or given by it pursuant to this Agreement.

 
 
(b)
The execution, delivery and performance by the Purchaser of this Agreement and
the consummation of the Transactions have been duly authorized by all necessary
corporate action on the part of the Purchaser.

 
 
(c)
This Agreement or any other agreements entered into pursuant to this Agreement
to which the Purchaser is a party constitute legal, valid and binding
obligations of the Purchaser, enforceable against the Purchaser in accordance
with their respective terms, except as enforcement may be limited by bankruptcy,
insolvency and other laws affecting the rights of creditors generally and except
that equitable remedies may be granted only in the discretion of a court of
competent jurisdiction.

 
(3)           No Violation  The execution and delivery of this Agreement by the
Purchaser, the consummation of the Transactions and the fulfilment by the
Purchaser of the terms, conditions and provisions hereof will not (with or
without the giving of notice or lapse of time, or both):
 
 
(a)
contravene or violate or result in a breach or a default under or give rise to a
right of termination, amendment or cancellation or the acceleration of any
obligations of the Purchaser, under:

 
 
(i)
any applicable Law;

 
 
(ii)
any judgment, order, writ, injunction or decree of any Regulatory Authority
having jurisdiction over the Purchaser;

 
 
(iii)
the articles, by-laws or any resolutions of the board of directors or
shareholders of the Purchaser;

 
 
(iv)
any Consent held by the Purchaser; or

 
 
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(v)
the provisions of any Contract to which the Purchaser is a party or by which it
is, or any of its properties or assets are, bound.

 
(4)           Subsidiary of a Reporting Issuer  The Purchaser is a wholly-owned
subsidiary of Universal Tech Corp, a reporting issuer, as such term is defined
under the provisions of U.S. securities Laws.  Universal Tech Corp is not listed
on the list of defaulting reporting issuers maintained by applicable Regulatory
Authorities. Universal Tech Corp is not in default of any of the provisions of
applicable securities Laws, the regulations made thereunder and all applicable
policy statements promulgated in respect thereof.
 
(5)           Brokers  The Purchaser has not engaged any broker or other agent
in connection with the Transactions and, accordingly, there is no commission,
fee or other remuneration payable to any broker or agent who purports or may
purport to have acted for the Purchaser.
 
(6)           Consents  There is no requirement for the Purchaser to make any
filing with, give any notice to or obtain any Consent from any Regulatory
Authority as a condition to the lawful consummation of the Transactions.
 
(7)           Bankruptcy  The Purchaser is not an insolvent person within the
meaning of the Bankruptcy and Insolvency Act (Canada) and has not made an
assignment in favour of its creditors or proposal in bankruptcy to its creditors
or any class thereof, and no petition for a receiving order has been presented
in respect of it.  The Purchaser has not initiated proceedings with respect to a
compromise or arrangement with its creditors or for its winding up, liquidation
or dissolution.  No receiver or interim receiver has been appointed in respect
of it or any of its undertakings, property or assets and no execution or
distress has been levied on any of its undertakings, property or assets, nor
have any proceedings been commenced in connection with any of the foregoing.
 
3.3           Survival of Covenants, Representations and Warranties of the
Parties
 
All covenants, representations and warranties made herein or in any agreement,
certificate or other document delivered or given pursuant to this Agreement
(other than those which are expressly waived in writing as part of the Closing
herein) shall survive the execution and delivery of this Agreement and the
completion of the transactions contemplated by this Agreement and,
notwithstanding such completion or any investigation made by or on behalf of the
Party to whom or in whose favour such covenants, representations and warranties
were made, shall continue in full force and effect for the respective benefit of
the Purchaser, the Vendor, or the Shareholder, as the case may be, for a period
of two years following the Closing Date, after which period the respective
Parties shall be released from their respective obligations and liabilities
hereunder, except in respect of claims made in writing prior to expiry of such
period, provided that:
 
(1)           all covenants, representations and warranties relating to Taxes,
tax liability or other tax matters for any period ending prior to or on the
Closing Date shall survive the Closing for any period during which any taxing
authority may make any claim or assessment based on any return filed or failed
to be filed plus a period of six months, after which period the Purchaser and
Vendor shall be released from their respective obligations and liabilities
hereunder, except in respect of claims made in writing prior to the expiry of
such period,
 
 
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(2)           any claim based on or with respect to the inaccuracy or
non-performance or non-fulfillment or breach of any representation, warranty or
covenant of a Party respecting Taxes, tax liability or other tax matters set out
herein may be brought by the Purchaser, Vendor, or the Shareholder, as the case
may be, at any time, if such claim is based upon any failure or omission to file
a return or any misrepresentation made or fraud committed in filing a return or
in supplying information under any legislation pursuant to which a Tax is
imposed,
 
(3)           any claim based upon any misrepresentation, or breach or
inaccuracy in any of the representations and warranties of a Party set out
herein may be brought against such Party at any time if such Party knew of such
misrepresentation, breach or inaccuracy at the time such representation or
warranty was made by such Party,
 
(4)           any claim based upon a defect in title of or the inability of the
Vendor to sell the Purchased Shares may be brought by the Purchaser at any time;
and
 
(5)           no claim for any breach of any of the covenants, representations
and warranties contained in this Agreement or in any agreement, instrument,
certificate or other document executed or delivered pursuant to this Agreement
may be made after the applicable expiration time set out in this Section 3.3
notwithstanding that such breach was not objectively discoverable.
 
ARTICLE 4
COVENANTS
 
4.1           Conduct During Interim Period
 
During the Interim Period, without in any way limiting any other obligations of
the Vendor and the Shareholder in this Agreement:
 
(1)           Conduct Business in the Ordinary Course  The Vendor shall cause
the Corporation to conduct the Business and the operations and affairs of the
Corporation only in the ordinary course of the Business consistent with past
practice, and the Vendor shall ensure that the Corporation shall not, without
the prior written consent of the Purchaser, enter into any transaction or
refrain from doing any action that would constitute a breach of any
representation, warranty, covenant or other obligation of the Vendor or the
Shareholder contained herein, and provided further that, without limiting the
generality of the foregoing, the Vendor shall cause the Corporation to ensure
that the Corporation does not:
 
 
(i)
amends its articles, by-laws, constating documents or other organizational
documents;

 
 
(ii)
amalgamates, merges, reorganizes or consolidates with, or acquires all or
substantially all the shares or assets of any person; or

 
 
(iii)
transfers, leases, licenses, sells or otherwise disposes of any of its assets,
or permits any Encumbrance to attach to or affect any of its assets, or does any
act or thing other than in the ordinary course of the Business consistent with
past practice;

 
 
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(2)           Continue Insurance  The Vendor shall cause the Corporation to
continue to maintain in full force and effect all policies of insurance or
renewals now in effect, and shall take out, at the expense of the Purchaser,
such additional insurance as may be reasonably requested by the Purchaser, and
shall give all notices and present all claims under all policies of insurance in
a timely fashion.
 
(3)           Contractual Consents  The Vendor shall use its best efforts to
make, give or obtain or cause the Corporation to make, give or obtain, as
applicable, at or prior to the Closing Time the filings, notifications and
Consents described in Schedule 3.1(14) in respect of Contracts, on such terms as
are acceptable to the Purchaser, acting reasonably.
 
(4)           Preserve Goodwill  The Vendor shall use its best efforts to
preserve intact, and cause the Corporation to preserve intact, the Business and
the property, assets, operations and affairs of the Corporation and to carry on
the Business and the affairs of the Corporation as currently conducted, and to
promote and preserve for the Purchaser the goodwill of suppliers, customers and
others having business relations with the Corporation.
 
(5)           Discharge Liabilities  The Vendor shall cause the Corporation to
pay and discharge the liabilities of the Corporation in the ordinary course of
the Business in accordance and consistent with the past practice of the
Corporation, except those contested in good faith by the Corporation.
 
(6)           Corporate Action  The Shareholder and the Vendor shall take and
cause the Corporation to take all necessary corporate action, steps and
proceedings to approve or authorize, validly and effectively, the execution and
delivery of this Agreement and the other agreements and documents contemplated
by this Agreement and to complete the transfer of the Purchased Shares to the
Purchaser free and clear of all Encumbrances except for the Permitted
Encumbrances and to cause all necessary meetings of directors and shareholders
of the Vendor and the Corporation to be held for such purpose, including the
waiver by the Corporation of its right of first refusal to acquire any of the
Purchased Shares.
 
(7)           Exclusive Dealing  Neither the Vendor nor the Shareholder shall
take any action, directly or indirectly, to encourage, initiate or engage in
discussions or negotiations with, or provide any information to any person,
other than the Purchaser, concerning any purchase of any shares in the capital
of the Corporation, the material assets of the Corporation, a controlling
interest in the Vendor or the Corporation or any merger, sale of substantial
assets or similar transaction involving the Corporation or the Business, and the
Vendor shall ensure that the Corporation does not take any such action.
 
 
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4.2           Access to Information
 
The Vendor shall at all times during the Interim Period make available to the
Purchaser and its representatives and advisers for examination all Records and
corporate records of the Corporation in its possession or under its control,
including environmental and health and safety reports. The Vendor shall at all
times during the Interim Period give the Purchaser and its representatives and
advisers access to the premises of the Corporation during normal business hours
and upon reasonable notice, in order to make such investigations as the
Purchaser shall deem necessary or advisable, including for purposes of
conducting any environmental audits, environmental site assessments (including
soil and groundwater testing) or other investigations. The Vendor shall give
such persons all means necessary to effect such examinations and investigations
and shall cause its agents, employees, officers and directors to use their best
efforts to aid such persons in such examinations and investigations. The Vendor
authorizes and consents to the release by any Regulatory Authority having
jurisdiction of any information, and shall sign any documents or forms of
consent incidental thereto. The exercise of any rights of access, inspection or
examination by or on behalf of the Purchaser shall not affect or mitigate the
Vendor’s covenants, representations and warranties in this Agreement. The Vendor
shall provide the Purchaser and its representatives and advisers at all times
during the Interim Period with an opportunity to meet with the auditors and any
employees, advisers or personnel of the Corporation.
 
4.3           Satisfaction of Closing Conditions
 
The Vendor and the Shareholder jointly and severally agree to use their best
efforts to ensure that the conditions set forth in Section 5.1, and the
Purchaser agrees to use its best efforts to ensure that the conditions set forth
in Section 5.3, are fulfilled at or prior to the Closing Time. Each of the
Parties agrees use its best efforts to ensure that the conditions set forth in
Section 5.5 are fulfilled at or prior to the Closing Time.
 
4.4           Delivery of Records
 
At the Closing Time, the Vendor and the Shareholder shall deliver to the
Purchaser all the Records and corporate records of the Corporation. The
Purchaser agrees that it will preserve such records so delivered to it for a
period of six years from the Closing Date, or for such longer period as is
required by any applicable Law, and will permit the Vendor or its authorized
representatives reasonable access thereto in connection with the affairs of the
Vendor, but the Purchaser shall not be responsible or liable to the Vendor for
or as a result of any accidental loss or destruction of or damage to any such
records.
 
ARTICLE 5
CONDITIONS OF CLOSING
 
5.1           Conditions for the Benefit of the Purchaser
 
The obligation of the Purchaser to complete the Transactions will be subject to
the fulfilment of the following conditions at or prior to the Closing Time:
 
(1)           Representations, Warranties and Covenants  The representations and
warranties of the Vendor and the Shareholder made in or pursuant to this
Agreement shall be true and accurate at the Closing Time with the same force and
effect as though such representations and warranties had been made as of the
Closing Time. The Vendor and the Shareholder shall have complied with all
covenants and agreements in this Agreement to be performed or caused to be
performed by them at or prior to the Closing Time. In addition, the Vendor and
the Shareholder shall have delivered to the Purchaser a certificate confirming
the foregoing. The receipt of such certificate and the completion of the
Transactions shall not be deemed to constitute a waiver of any of the
representations, warranties or covenants of the Vendor and the Shareholder
contained in this Agreement. Such representations, warranties and covenants
shall continue in full force and effect as provided in Section 3.3.
 
 
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(2)           No Material Adverse Change  Except as has been specifically
permitted in this Agreement, since the date of this Agreement there shall not
have been:
 
 
(a)
any material adverse change in any of the assets, business, financial condition,
earnings, results of operations or prospects of the Corporation that has, or
threatens to have, a material adverse effect on the assets, business, financial
condition, earnings, results of operations or prospects of the Corporation on a
consolidated basis or which might materially adversely affect the ability of the
Corporation to carry on the Business after the Closing substantially as such
Business is being conducted upon the date of this Agreement; or

 
 
(b)
any damage, destruction or loss, or other event, development or condition of any
character (whether or not covered by insurance) which would have a material
adverse effect on the assets, business, financial condition, earnings, results
of operations or prospects of the Corporation on a consolidated basis.

 
(3)           No Action to Restrain/No Adverse Law No Law shall have been made,
and no action or proceeding shall be pending or threatened, which is likely to
result in an order, decision or ruling imposing any limitations or conditions
which may have a material adverse effect on the Transactions, the right of the
Purchaser to own the Purchased Shares, or the assets, business, financial
condition, earnings, results of operations or prospects of the Corporation on a
consolidated basis.
 
(4)           Consents All filings, notifications and Consents with, to or from
Regulatory Authorities and third parties, including the parties to the material
Contracts and the lessors of the Leased Premises listed on Schedule
3.1(28)(32)(33), required to permit the change of ownership of the Purchased
Shares contemplated hereby without resulting in the violation of or a default
under or any termination, amendment or acceleration of any obligation under any
licence, permit, lease, or material Contract affecting the Business or otherwise
adversely affecting the Business, the Corporation, shall have been made, given
or obtained on terms acceptable to the Purchaser acting reasonably.
 
(5)           Deliveries  The Vendor shall have delivered to the Purchaser the
following in form and substance satisfactory to the Purchaser:
 
 
(a)
duly executed resignations effective as at the Closing Time of each director and
officer of the Corporation specified by the Purchaser;

 
 
(b)
all Records and all corporate records of the Corporation and other documents
referred to in this Agreement or any Schedule;

 
 
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(c)
certificates representing the Vendor Shares, accompanied by a notarized copy of
the entry of the share ledger of the Corporation duly signed by an authorized
officer of the Corporation showing the transfer of the Vendor Shares to the
Purchaser, and all such other assurances, consents and other documents as the
Purchaser may reasonably request to effectively transfer to the Purchaser title
to the Vendor Shares free and clear of all Encumbrances;

 
 
(d)
a certificate representing the Shareholder Share, accompanied by a notarized
copy of the entry of the share ledger of the Corporation duly signed by an
authorized officer of the Corporation showing the transfer of the Shareholder
Share to the Purchaser, and all such other assurances, consents and other
documents as the Purchaser may reasonably request to effectively transfer to
such person as the Purchaser so directs title to the Shareholder Share free and
clear of all Encumbrances;

 
 
(e)
a waiver from the Vendor with respect to its right of first refusal on the
transfer of the Shareholder Share by the Shareholder;

 
 
(f)
a waiver from the Shareholder with respect to his right of first refusal on the
transfer of the Vendor Shares held by the Vendor;

 
 
(g)
a waiver from the Corporation with respect to its right of first refusal on the
transfer of the Purchased Shares;

 
 
(h)
a written confirmation of no interest and quit claim from Pilot Gold whereby
Pilot Gold releases, discharges, and quit claims any rights in and to the
Mineral Rights, subject to the Pilot Gold NSR; and

 
 
(i)
all documentation and other evidence reasonably requested by the Purchaser in
order to establish the due authorization and consummation of the Transactions,
including the taking of all corporate proceedings by the boards of directors and
shareholders of the Vendor and the Corporation required to effectively carry out
the obligations of the Vendor and the Corporation pursuant to this Agreement.

 
5.2           Waiver or Termination by the Purchaser
 
The conditions contained in Section 5.1 are inserted for the exclusive benefit
of the Purchaser and may be waived in whole or in part by the Purchaser at any
time without prejudice to any of its rights of termination in the event of
non-performance of any other condition in whole or in part. If any of the
conditions contained in Section 5.1 are not fulfilled or complied with by the
time provided for, the Purchaser may, at or prior to the Closing Time, terminate
this Agreement by notice in writing after such time required to the Vendor and
the Shareholder. In such event the Purchaser shall be released from all
obligations in this Agreement (except as set out in Section 5.6) and, unless the
condition or conditions which have not been fulfilled are reasonably capable of
being fulfilled or caused to be fulfilled by the Vendor, the Shareholder or the
Corporation, then the Vendor and the Shareholder shall also be released from all
obligations in this Agreement (except as set out in Section 5.6).
 
 
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5.3           Conditions for the Benefit of the Vendor and the Shareholder
 
The obligations of the Vendor and the Shareholder to complete the Transactions
will be subject to the fulfilment of the following conditions at or prior to the
Closing Time:
 
(1)           Representations, Warranties and Covenants  The representations and
warranties of the Purchaser made in or pursuant to this Agreement shall be true
and accurate at the Closing Time with the same force and effect as though such
representations and warranties had been made as of the Closing Time. The
Purchaser shall have complied with all covenants and agreements in this
Agreement to be performed or caused to be performed by it at or prior to the
Closing Time. In addition, the Purchaser shall have delivered to the Vendor and
the Shareholder a certificate confirming the foregoing. The receipt of such
certificate and the completion of the Transactions shall not be deemed to
constitute a waiver of any of the representations, warranties or covenants of
the Purchaser contained in this Agreement. Such representations, warranties and
covenants shall continue in full force and effect as provided in Section 3.3.
 
(2)           Deliveries  The Purchaser shall have delivered to the Vendor the
following in form and substance satisfactory to the Vendor:
 
 
(a)
payment of the Purchase Price to be paid under Section 2.3;

 
 
(b)
receipt for the certificates representing the Purchased Shares;

 
 
(c)
a certificate of status or the equivalent under the laws of the jurisdiction
governing the corporate existence of the Purchaser;

 
 
(d)
a written confirmation and acknowledgement of the Pilot Gold NSR in accordance
with Section 4(b)(ii) of the Termination Agreement; and

 
 
(e)
all documentation and other evidence reasonably requested by the Vendor in order
to establish the due authorization and consummation of the Transactions,
including the taking of all corporate proceedings by the boards of directors and
shareholders of the Purchaser required to effectively carry out the obligations
of the Vendor and the Corporation pursuant to this Agreement.

 
5.4           Waiver or Termination by the Vendor and the Shareholder.
 
The conditions contained in Section 5.3 are inserted for the exclusive benefit
of the Vendor and the Shareholder and may be waived in whole or in part by the
Vendor and the Shareholder at any time without prejudice to any of their rights
of termination in the event of non-performance of any other condition in whole
or in part. If any of the conditions contained in Section 5.3 are not fulfilled
or complied with by the time provided for, the Vendor may, on behalf of itself
and the Shareholder, at or prior to the Closing Time, terminate this Agreement
by notice in writing after such time to the Purchaser. In such event the Vendor
and the Shareholder shall be released from all obligations in this Agreement
(except as set out in Section 5.6) and, unless the condition or conditions which
have not been fulfilled are reasonably capable of being fulfilled or caused to
be fulfilled by the Purchaser or the Corporation, then the Purchaser shall also
be released from all obligations in this Agreement (except as set out in Section
5.6).
 
 
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5.5           Conditions Precedent
 
The purchase and sale of the Purchased Shares is subject to the following
conditions to be fulfilled at or prior to the Closing Time, which conditions are
true conditions precedent to the completion of the Transactions:
 
(1)           No Legal Action  No action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit any of the Transactions
or the right of the Corporation to conduct the Business after Closing on
substantially the same basis as heretofore conducted.
 
If any conditions precedent shall not have been fulfilled at or prior to the
Closing Time, this Agreement shall be terminated and the Parties shall be
released from all obligations under this Agreement, except as set out in Section
5.6.
 
5.6           Survival following Termination
 
In the event of termination of this Agreement at or prior to the Closing Time
pursuant to Sections 5.2, 5.3(1) or 5.5, the provisions of Article 1, Article 7
and Article 8 and Sections 5.2, 5.4 and 5.5 shall survive such termination
indefinitely. Upon such termination, the Purchaser shall promptly deliver to the
Vendor all copies of all Records and corporate records of the Corporation and
other written material obtained by the Purchaser from the Vendor or the
Corporation in connection with this Agreement.
 
ARTICLE 6
CLOSING ARRANGEMENTS
 
6.1           Place of Closing
 
The Closing shall take place at the Closing Time at the offices of Irwin Lowy
LLP, 130 Adelaide Street West, Suite 1010, Toronto, Ontario, M5H 3P5.
 
6.2           Deliveries at the Closing
 
At the Closing Time, upon fulfillment of all the conditions set out in Article 5
that have not been waived in writing by the Purchaser, the Vendor, or the
Shareholder, as applicable, the Parties or Parties’ counsel shall deliver such
deliveries as provided in Sections 5.1(b)(5) and 5.3(2).
 
ARTICLE 7
INDEMNIFICATION
 
7.1           Indemnification by the Vendor
 
Subject to Section 3.3, the Vendor shall indemnify and save the Purchaser
harmless for and from:
 
(1)           all debts and liabilities of the Corporation, including
liabilities for any Taxes, existing at the Closing Time and not disclosed on or
included in the Financial Statements, except liabilities accruing or incurred
subsequent to the Financial Statements Date in the ordinary course of the
Business, consistent with past practice and except liabilities disclosed in this
Agreement or any Schedule;
 
 
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(2)           all contingent liabilities which the Corporation becomes obligated
to pay and which exist at the Closing Time whether or not disclosed or reflected
in the Financial Statements, and whether or not the Vendor or the Corporation or
any of them have notice thereof or of the facts or circumstances which give rise
thereto;
 
(3)           any assessment for Taxes for any period up to the Closing Date for
which no adequate reserve has been provided and disclosed in the Financial
Statements;
 
(4)           any loss, damages or deficiencies suffered by the Purchaser or by
the Corporation as a result of any breach of representation, warranty or
covenant on the part of the Vendor contained in this Agreement or in any
certificate or document delivered pursuant to or contemplated by this Agreement;
 
(5)           any warranty, damage or similar claim made against the Corporation
for or arising from defects in any goods, materials, service or workmanship, in
each case provided by the Corporation on or prior to the Closing Date for which
the Corporation is or is alleged to be liable; and
 
(6)           all claims, demands, costs and expenses, including legal fees, in
respect of the foregoing.
 
7.2           Indemnification by the Purchaser
 
Subject to Section 3.3, the Purchaser shall indemnify and save the Vendor and
the Shareholder harmless for and from:
 
(1)           any loss, damages or deficiencies suffered by the Vendor as a
result of any breach of representation, warranty or covenant on the part of the
Purchaser contained in this Agreement or in any certificate or document
delivered pursuant to or contemplated by this Agreement; and
 
(2)           all claims, demands, costs and expenses, including legal fees, in
respect of the foregoing.
 
7.3           Notice of Claim
 
A Party entitled to and seeking indemnification pursuant to the terms of this
Agreement (the “Indemnified Party”) shall promptly give written notice to the
Party or Parties, as applicable, responsible for indemnifying the Indemnified
Party (the “Indemnifying Party”) of any claim for indemnification pursuant to
Sections 7.1 or 7.2 (a “Claim”, which term shall include more than one
Claim).  Such notice shall specify whether the Claim arises as a result of a
claim by a person against the Indemnified Party (a “Third Party Claim”) or
whether the Claim does not so arise (a “Direct Claim”), and shall also specify
with reasonable particularity (to the extent that the information is available):
 
(1)           the factual basis for the Claim; and
 
 
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(2)           the amount of the Claim, or, if any amount is not then
determinable, an approximate and reasonable estimate of the likely amount of the
Claim.
 
7.4           Procedure for Indemnification
 
(1)           Direct Claims  With respect to Direct Claims, following receipt of
notice from the Indemnified Party of a Claim, the Indemnifying Party shall have
30 days to make such investigation of the Claim as the Indemnifying Party
considers necessary or desirable.  For the purpose of such investigation, the
Indemnified Party shall make available to the Indemnifying Party the information
relied upon by the Indemnified Party to substantiate the Claim.  If the
Indemnified Party and the Indemnifying Party agree at or prior to the expiration
of such 30 day period (or any mutually agreed upon extension thereof) to the
validity and amount of such Claim, the Indemnifying Party shall immediately pay
to the Indemnified Party the full agreed upon amount of the Claim.
 
If the Indemnified Party and the Indemnifying Party do not agree within such
period (or any mutually agreed upon extension), the Indemnified Party and the
Indemnifying Party agree that the dispute shall be submitted to arbitration
pursuant to the Arbitration Act, 1991 (Ontario).  Such dispute shall not be made
the subject matter of an action in a court by either the Indemnified Party or
the Indemnifying Party unless the dispute has first been submitted to
arbitration and finally determined pursuant to the provisions of the Arbitration
Act, 1991 (Ontario). Any such action commenced thereafter shall only be for
judgment in accordance with the decision of the arbitrators and the costs
incidental to the action. In any such action the decision of the arbitrators
shall be conclusively deemed to determine the rights and liabilities as between
the Parties to the arbitration in respect of the matter in dispute.
 
(2)           Third Party Claims  With respect to any Third Party Claim, the
Indemnifying Party shall have the right, at its own expense, to participate in
or assume control of the negotiation, settlement or defence of such Third Party
Claim and, in such event, the Indemnifying Party shall reimburse the Indemnified
Party for all the Indemnified Party’s out-of-pocket expenses incurred as a
result of such participation or assumption. If the Indemnifying Party elects to
assume such control, the Indemnified Party shall cooperate with the Indemnifying
Party, shall have the right to participate in the negotiation, settlement or
defence of such Third Party Claim at its own expense and shall have the right to
disagree on reasonable grounds with the selection and retention of counsel, in
which case counsel satisfactory to the Indemnifying Party and the Indemnified
Party shall be retained by the Indemnifying Party. If the Indemnifying Party,
having elected to assume such control, thereafter fails to defend any such Third
Party Claim within a reasonable time, the Indemnified Party shall be entitled to
assume such control and the Indemnifying Party shall be bound by the results
obtained by the Indemnified Party with respect to such Third Party Claim.
 
7.5           General Indemnification Rules
 
The obligations of the Indemnifying Party to indemnify the Indemnified Party in
respect of Claims shall also be subject to the following:
 
 
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(1)           Any Claim arising as a result of a breach of a representation or
warranty shall be made not later than the date on which, pursuant to Sections
3.3, such representation and warranty terminated;
 
(2)           If any Third Party Claim is of a nature such that the Indemnified
Party is required by applicable law to make a payment to any person (a “Third
Party”) with respect to such Third Party Claim before the completion of
settlement negotiations or related legal proceedings, the Indemnified Party may
make such payment and the Indemnifying Party shall, forthwith after demand by
the Indemnified Party, reimburse the Indemnified Party for any such payment. If
the amount of any liability of the Indemnified Party under the Third Party Claim
in respect of which such a payment was made, as finally determined, is less than
the amount which was paid by the Indemnifying Party to the Indemnified Party,
the Indemnified Party shall, forthwith after receipt of the difference from the
Third Party, pay the amount of such difference to the Indemnifying Party;
 
(3)           Except in the circumstance contemplated by Section 7.5(4), and
whether or not the Indemnifying Party assumes control of the negotiation,
settlement or defence of any Third Party Claim, the Indemnified Party shall not
negotiate, settle, compromise or pay any Third Party Claim except with the prior
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld);
 
(4)           The Indemnified Party shall not permit any right of appeal in
respect of any Third Party Claim to terminate without giving the Indemnifying
Party notice and an opportunity to contest such Third Party Claim;
 
(5)           The Indemnified Party and the Indemnifying Party shall cooperate
fully with each other with respect to Third Party Claims and shall keep each
other fully advised with respect thereto (including supplying copies of all
relevant documentation promptly as it becomes available); and
 
(6)           Notwithstanding Section 7.4(2), the Indemnifying Party shall not
settle any Third Party Claim or conduct any related legal or administrative
proceeding in a manner which would, in the opinion of the Indemnified Party,
acting reasonably, have a material adverse impact on the Indemnified Party.
 
(7)           The provisions of this Article 7 shall constitute the sole remedy
available to a Party against another Party with respect to any and all breaches
of any agreement, covenant, representation or warranty made by such other Party
in this Agreement.
 
(8)           The amount of any Claim due under this Agreement shall be reduced
by:
 
 
(a)
the amount of any insurance or other reimbursement received by the Indemnifying
Party in relation to the breach or other event giving rise to the Claim; and

 
 
(b)
the amount expected to be recovered under any counterclaims against third
parties in relation to the breach or other event giving rise to the Claim.

 
 
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(9)           Notwithstanding any provision contained herein to the contrary:
 
 
(a)
there shall be no liability of an Indemnifying Party for any Claim unless an
individual Claim group or series of Claims exceed $10,000, it being understood
that such Claims shall accumulate until such time or times as the aggregate of
all such Claims exceed $10,000, whereupon the Indemnified Party shall be
entitled to claim indemnification hereunder for all such Claims including such
accumulated $10,000amount; and

 
 
(b)
the maximum cumulative amount of Claims recoverable from the Indemnified Party
under this Agreement shall in no event exceed $700,000.

 
ARTICLE 8
GENERAL
 
8.1           Confidentiality
 
The Purchaser covenants and agrees that, except as otherwise authorized by the
Vendor, neither the Purchaser nor its representatives, agents or employees will
disclose to third parties, directly or indirectly, any confidential information
or confidential data relating to the Vendor, the Corporation or the Business
discovered or received by the Purchaser or its representatives, agents or
employees as a result of the Vendor and the Corporation making available to the
Purchaser and its representatives, agents or employees the information requested
by them in connection with the Transactions.
 
8.2           Notices
 
(1)           Any notice or other communication required or permitted to be
given hereunder shall be in writing and shall be delivered in person,
transmitted by facsimile or similar means of recorded electronic communication
or sent by registered mail, charges prepaid, addressed as follows:
 
 
(a)
if to the Vendor or the Shareholder:

 
Rae-Wallace Mining Company
c/o Irwin Lowy LLP
130 Adelaide St. West, Suite 1010
Toronto, Ontario
M5H 3P5

Attention:        Chris Irwin
Fax No.:            416-361-2519

 
(b)
if to the Purchaser:

 
Address: __________________________________________
 
__________________________________________________
 
__________________________________________________
 
 
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Attention:        ______________________________
 
Fax No.:            ______________________________
 

 
 
(c)
if to the Corporation:

 
Av Larco 1301- 1203, Miraflores,
Lima, Perú

Attention:        Jenny Egusquiza
Tel/Fax No.:     715-0931  715-0932
 
(2)           Any such notice or other communication shall be deemed to have
been given and received on the day on which it was delivered or transmitted (or,
if such day is not a Business Day, on the next following Business Day) or, if
mailed, on the third Business Day following the date of mailing; provided,
however, that if at the time of mailing or within three Business Days thereafter
there is or occurs a labour dispute or other event that might reasonably be
expected to disrupt the delivery of documents by mail, any notice or other
communication hereunder shall be delivered or transmitted by means of recorded
electronic communication as described.
 
(3)           Any Party may at any time change its address for service from time
to time by giving notice to the other Parties in accordance with this Section
8.2.
 
8.3           Public Announcements and Disclosure
 
The Parties shall consult with each other before issuing any press release or
making any other public announcement with respect to this Agreement or the
Transactions and, except as required by any applicable Law or stock exchange
having jurisdiction, no Party shall issue any such press release or make any
such public announcement without the prior written consent of the others, which
consent shall not be unreasonably withheld or delayed. Prior to any such press
release or public announcement, none of the Parties shall disclose this
Agreement or any aspect of the Transactions except to its board of directors,
its senior management, its legal, accounting, financial or other professional
advisors, any financial institution contacted by it with respect to any
financing required in connection with the Transactions and counsel to such
institution, or as may be required by any applicable Law or stock exchange
having jurisdiction.
 
8.4           Assignment
 
The Purchaser may assign the Agreement or its rights under this Agreement in
whole or in part to any other person; provided, however, that any such
assignment shall not relieve the Purchaser from any of its obligations
hereunder. Neither the Vendor nor the Shareholder may assign its rights under
this Agreement.
 
8.5           Best Efforts
 
The Parties acknowledge and agree that, for all purposes of this Agreement, an
obligation on the part of any Party to use its “best efforts” to obtain any
waiver, Consent or other document shall not require such Party to make any
payment to any person for the purpose of procuring the same, other than payments
for amounts due and payable to such person, payments for incidental expenses
incurred by such person and payments required by any applicable law or
regulation.
 
 
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8.6           Expenses
 
Unless otherwise provided, each of the Vendor, the Shareholder and the Purchaser
shall be responsible for the expenses (including fees and expenses of legal
advisers, accountants and other professional advisers) incurred by them,
respectively, in connection with the negotiation and settlement of this
Agreement and the completion of the Transactions. In the event of termination of
this Agreement, the obligation of each Party to pay its own expenses will be
subject to any rights of such Party arising from a breach of this Agreement by
another Party.
 
8.7           Further Assurances
 
Each of the Parties shall promptly do, make, execute, deliver, or cause to be
done, made, executed or delivered, all such further acts, documents and things
as the other Parties may reasonably require from time to time after Closing at
the expense of the requesting Party for the purpose of giving effect to this
Agreement and shall use reasonable efforts and take all such steps as may be
reasonably within its power to implement to their full extent the provisions of
this Agreement.
 
8.8           Entire Agreement
 
This Agreement, including all Schedules, constitutes the entire agreement
between the Parties with respect to the subject matter and supersedes all prior
agreements, understandings, negotiations and discussions, whether written or
oral. There are no conditions, covenants, agreements, representations,
warranties or other provisions, express or implied, collateral, statutory or
otherwise, relating to the subject matter except provided in this Agreement. No
reliance is placed by any Party on any warranty, representation, opinion, advice
or assertion of fact made by any Party or its directors, officers, employees or
agents, to any other Party or its directors, officers, employees or agents,
except to the extent that it has been reduced to writing and included in this
Agreement.
 
8.9           Waiver, Amendment
 
Except as expressly provided in this Agreement, no amendment or waiver of this
Agreement shall be binding unless executed in writing by the Party to be bound.
No waiver of any provision of this Agreement shall constitute a waiver of any
other provision, nor shall any waiver of any provision of this Agreement
constitute a continuing waiver unless otherwise expressly provided.
 
8.10           Rights Cumulative
 
The rights and remedies of the Parties are cumulative and not alternative.
 
8.11           Arbitration
 
All disputes arising out of or in connection with this Agreement, including as
to its existence, formation, validity or termination, shall be finally settled
under the provisions of the Arbitration Act, 1991 (Ontario) by one arbitrator
appointed by mutual agreement of the Parties or in accordance with the
provisions of the Arbitration Act, 1991 (Ontario).  The seat of arbitration
shall be Toronto, Ontario, Canada.  The language of the arbitration shall be
English.
 
 
34

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8.12           Counterparts
 
This Agreement may be executed in any number of counterparts, and/or by
facsimile or e-mail transmission of PDF files, each of which shall constitute an
original and all of which, taken together, shall constitute one and the same
instrument. Any Party executing this Agreement by fax or PDF file shall,
immediately following a request by any other Party, provide an originally
executed counterpart of this Agreement provided, however, that any failure to so
provide shall not constitute a breach of this Agreement except to the extent
that such electronic execution is not otherwise permitted under the Electronic
Commerce Act, 2000 (Ontario).
 
IN WITNESS WHEREOF this Agreement has been executed by the Parties.
 
 

 
INTI HOLDINGS LIMITED
           
Per: 
/s/ James Davidson      
Authorized Representative
                   
RAE WALLACE PERU S.A.C.
           
Per:
       
Authorized Representative
                   
RAE-WALLACE MINING COMPANY
           
Per:
       
Authorized Representative
 

 
 
SIGNED, SEALED AND DELIVERED
)
   
in the presence of
)
     
)
     
)
     
)
       
)
/s/ George Cole
 
Witness
)    
GEORGE COLE
 

 
 
35

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Schedule 1.1(hh)

Peruvian Documents

(SUNAT documents to be Provided)
 
 
 

--------------------------------------------------------------------------------

 

 
Schedule 3.1(15)

Financial Statements

(Financial Statements to be Provided)
 
 
 

--------------------------------------------------------------------------------

 

 
Schedule 3.1(28)(32)(33)

Material Contracts, Real and Leased Properties, Authorizations and Mineral
Rights

 
1.
Escritura Pública de Transferencia de Concesiones Mineras y Bienes de Geologix
(Peru) S.A. a Rae Wallace Perú S.A.C;

 
2.
the Royalty Agreement (as defined and further described above) and the according
two percent (2%) net smelter return royalty for precious metals and a one
percent (1%) net smelter return royalty for all other minerals from the sale or
other disposition of all minerals produced from the properties granted by
Geologix in favour of Newmont Peru S.R.L.;

 
3.
the Termination Agreement (as defined and further described above) and the
according Pilot Gold NSR;

 
4.
Autorización de Uso y Servidumbre para Uso de Terrenos de la Comunidad Indígena
de Ccarhuancho de fecha 12 de Febrero del 2011;

 
5.
Contrato de Arrendamiento del inmueble ubicado en cale los lirios Mz K
-24-Urbanización Alpamayo, Ate Vitarte, Lima Perú; and

 
6.
Constancia de Aprobación de Declaracion de Impacto Ambiental Proyecto Toro
Blanco de fecha 11 de Julio del 2011.

MINERAL RIGTHS

LISCAY PROYECT
Nº
Name
Code
Area
Public Registry Entry
1
Liscay 1
01-05978-07
1000 Has.
12195849
2
Liscay 2
01-06190-07
1000 Has.
12195366
3
Liscay G3
01-06191-07
1000 Has.
12195746
4
Liscay 4
01-06230-07
1000 Has.
12195717
5
Liscay 5
01-06231-07
1000 Has.
12195697
6
Liscay 6
01-06431-07
1000 Has.
12437912
7
Liscay 7
01-06432-07
800 Has.
12196815
8
Liscay 8 1000
01-00399-08
1000 Has.
12438282
9
Liscay 9 1000
01-02352-08
1000 Has.
12437777
10
Liscay S 1 1000
01-00798-08
1000 Has.
12194178
11
Liscay S 2 1000
01-00800-08
1000 Has.
12190152
12
Liscay S 3 1000
01-00799-08
1000 Has.
12190327

 
TORO BLANCO PROJECT

Nº
Name
Code
Area
 Public registry Entry
1
Tambo Nuevo 15
01-02803-04
900 Has.
11048698

CAYHUA PROJECT

Nº
Name
Code
Area
 Public Registry Entry
1
Tambo Nuevo 11
01-00443-04
400 Has.
11028687

LACHOC PROJECT

Nº
Name
Code
Area
 Public Registry Entry
1
Lachoc
01-01132-07
1000 Has.
11111717
2
Los Osos 2006
01-02150-06
600 Has.
11098035

LAGARTIJA PROJECT

Nº
Name
Code
Area
 Public Registry Entry
1
Lagartija 1
01-02097-06
1000 Has.
12139565
2
Los Lagartos 1 1000
01-01910-08
1000 Has.
12194143
3
Los Lagartos 2 1000
01-01911-08
1000 Has.
12540787

MIRKO PROJECT

Nº
Name
Code
Area
 Public Registry Entry
1
Hermosita
01-01353-07
1000 Has.
11111698
2
Hermosita 500
01-01484-07
500 Has.
11111712
3
Hermosita 1000
01-01485-07
1000 Has.
11111700

SAN FELIPE PROJECT

Nº
Name
Code
Area
 Public Registry Entry
1
Tambo Nuevo 4
01-00094-04
400 Has.
11028676

SURA PROJECT

Nº
Name
Code
Area
 Public Registry Entry
1
Tambo Nuevo 5
01-00106-04
1000 Has.
11028837
2
Tambo Nuevo 6
01-00107-04
500 Has.
11028675
3
Tambo Nuevo 13
01-00920-04
400 Has.
11111690

 
 
 

--------------------------------------------------------------------------------

 
 
Schedule 3.1(29)

Bank Accounts and Powers of Attorney

Bank Accounts:

 
1.
Banco de Credito del Peruú BCP  Soles  Nº 011-0387-0100019405-88; and

 
2.
Banco de Credito del Peruú BCP   US$  Nº 0011-0387-0100019391-80.