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EXHIBIT 10.20
DATA PURCHASE, PRODUCTION PAYMENT GRANT AND
OPTION TO PURCHASE PRODUCTION PAYMENT AGREEMENT
This Data Purchase, Production Payment Grant and Option to
Purchase
Production Payment Agreement (the
"Agreement") is executed and made effective as
of this 1st day of August, 2003 (the
"Effective Date"), by and between Vista
Gold Corp., a company continued under the
laws of the Yukon Territory, Canada,
("Vista") and Enrique Gaitan Maumejean, an
individual ("Gaitan"). Vista and
Gaitan are at times referred to herein
individually as a "Party" and
collectively as the "Parties."
RECITALS
A. Gaitan owns certain
information and data related to the Guadalupe de los
Reyes Mining District in Sinaloa, Mexico,
(hereinafter referred to as the
"Data"). A partial inventory of the Data is
listed on Exhibit A, attached
hereto. The Data is currently located in
Domicilio Conocido, Minera la Cantera,
Guadalupe, Zacatecas 98000, Mexico; in
Gaitan's lawyer's offices in San
Francisco 656, Apt. 601, Colonia del Valle,
Mexico City, Mexico; and in the
offices of Pincock, Allen and Holt Inc.,
274 Union Blvd., Lakewood, Colorado
80228. For purposes of this Agreement, the
Data shall include, but not be
limited to, all originals or copies of
drill hole geologic logs and assay
certificates, drill hole survey
coordinates, drill samples, assay pulps,
records, reports, results, maps, charts,
and all other information and data,
whether in written, oral or electronic
form, which pertains to the Guadalupe de
los Reyes Mining District in Sinaloa,
Mexico, that is now owned or controlled by
Gaitan or hereafter becomes available to
Gaitan.
B. Vista desires to acquire the
Data referred to in Recital A for its use in
evaluating certain mining concessions in
the Guadalupe de los Reyes Mining
District as well as on adjacent mining
projects located in Sinaloa, Mexico.
C. Vista desires to grant to
Gaitan a production payment equivalent to 2% of
the net smelter returns on certain mining
concessions in Sinaloa, Mexico, which
are described in Exhibit B, attached
hereto, and which are being acquired by
Vista's affiliate, Minera Paredones
Amarillos, S.A. de C.V., from Gaitan
concurrently with the execution of this
Agreement.
D. Gaitan and Vista wish to
enter into this Agreement (i) for the sale of the
Data to Vista; (ii) for Vista to grant the
production payment to Gaitan; and
(iii) for Gaitan to grant Vista an option
to purchase the production payment to
be granted to Gaitan in the mining
concessions described in Exhibit B, all on
the terms hereinafter set forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and
agreements
set forth herein, the Parties agree as
follows:
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1. PURCHASE AND SALE OF DATA.
Vista agrees to purchase from Gaitan and Gaitan agrees to sell
to
Vista, all of Gaitan's right, title and
interest in and to the Data. The
Purchase Price for the Data shall be One
Million Three Hundred Thousand Dollars
(US$1,300,000), payable in installments as
follows:
(a) Gaitan hereby acknowledges that he
has received a total of US$100,000
paid to him in five monthly payments of US$20,000 each from
Vista
prior to the Effective Date;
(b) Vista shall pay US$200,000 to
Gaitan upon the execution of this
Agreement by both Vista and Gaitan. In addition, upon the execution
of
this Agreement by both Vista and Gaitan, Vista shall also
reimburse
Gaitan for the mining duties (surface taxes) paid by Gaitan for
calendar year 2002 and the first semester of 2003 up to a
maximum
amount of US$15,000, for the mining concessions described in
Exhibit
B, attached hereto.
(c) On or before August 1, 2004, Vista
shall pay US$500,000 to Gaitan, or,
at Vista's sole election and in lieu of the cash payment, Vista
shall
issue and deliver to
Gaitan common shares of Vista, the number of
shares shall be determined by dividing US$500,000.00 by the
average
closing price of such shares on the American Stock Exchange over
the
last ten (10) trading days immediately prior to July 31, 2004.
If
Vista elects to deliver the shares, the shares shall have a value
of
US$500,000 as calculated pursuant to the method set forth in
this
paragraph.
(d) On or before August 1, 2005, Vista
shall pay US$100,000 to Gaitan.
(e) On or before August 1, 2006, Vista
shall pay US$100,000 to Gaitan.
(f) On or before August 1, 2007, Vista
shall pay US$100,000 to Gaitan.
(g) On or before August 1, 2008, Vista
shall pay US$100,000 to Gaitan.
(h) On or before August 1, 2009, Vista
shall pay US$100,000 to Gaitan.
(i) In the event that commercial
production of gold and/or silver is to be
commenced upon any of the mining concessions described in Exhibit
B,
attached hereto, prior to August 1, 2009, Vista shall pay to
Gaitan
the balance of the foregoing installment payments upon the
commencement of such commercial production.
(j) All payments due hereunder, unless
otherwise noted, shall be made to
Gaitan as follows:
a. If by
delivery of shares, delivered to the following address:
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Enrique Gaitan Maumejean
Sierra Paracaima 945
Lomas de Chapultepec
Mexico City, 11000
Mexico
b. If by wire or
check, wired or delivered to the following account:
Enrique Gaitan M.
Wells Fargo Bank
Palo Alto, California
Acct. # 1008524603
ABA # 121000248
Or to the account instructed by Gaitan at the time of
payment.
2. DELIVERIES UPON FINAL
EXECUTION.
(a) Concurrent with the final execution of this Agreement, Vista
shall
deliver to Gaitan the following:
(i) The
payment of US$200,000 of the Purchase Price due upon the
execution of this Agreement by both Parties by wire transfer
in immediately available funds; and
(ii)
The payment of up to US$15,000 by wire transfer in immediately
available funds to
reimburse Gaitan for the mining duties
(surface taxes) paid by Gaitan for calendar year 2002 and the
first semester of 2003 on the mining concessions described in
Exhibit B, attached hereto, the receipts for which Gaitan
shall present copies of at closing.
(b) Concurrent with the final execution of this Agreement, Gaitan
shall
deliver to Vista the following:
(i)
A duly executed Bill of Sale covering the Data in the form of
Exhibit C attached hereto.
(ii) On or
within ten (10) days after the execution of this
Agreement by both Parties, Gaitan shall ship or caused to be
shipped to Vista at 7961 Shaffer Parkway, Suite 5, Littleton,
Colorado 80127, all of the Data that is currently in Gaitan's
possession in Zacatecas City, Mexico. All Data currently in
Zacatecas City, Mexico, shall be shipped to Vista via DHL
courier and the shipment charges shall be paid by or charged
to Vista. All risk of loss or damage to the Data and all
responsibilities, obligations and risks associated with the
Data shall transfer to Vista upon Gaitan's delivery of the
Data, packaged for shipment to Vista, to DHL in
Zacatecas City, Mexico. All Data that is in Gaitan's lawyer's
offices in San
Francisco 656, Apt. 601, Colonia del Valle,
Mexico City, Mexico, shall be delivered to Vista's lawyer's
offices in Boulevard Virreyes No. 135, Lomas Virreyes 11000,
Mexico City, Mexico.
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The obligations of each Party to deliver
the items specified in this Section and
to complete the transaction contemplated in
this Agreement shall be conditional
upon and subject to the complete and timely
performance by the other Party of
its obligations hereunder.
3. GRANT OF PRODUCTION PAYMENT.
Vista hereby grants to Gaitan a production payment equivalent to
two
percent (2%) of the net smelter returns
from the production of gold, silver and
other minerals from the mining concessions
described in Exhibit B, attached
hereto. For purposes of this Agreement, the
"Production Payment" shall have the
meaning set forth in Exhibit D, attached
hereto.
4. OPTION TO PURCHASE PRODUCTION
PAYMENT.
Gaitan
hereby grants to Vista, at any time for a term of fifty (50)
years following the Effective Date of this
agreement, the option to purchase the
Production Payment (the "Option") for a
purchase price of US$1,000,000. Vista
may exercise the Option at any time during
the 50-year term of the Option by
sending written notice of its election to
exercise the Option to Gaitan.
Following Gaitan's receipt of such notice,
the parties shall set a closing date
for the transfer and assignment of the
Production Payment to Vista and the
payment to Gaitan for the Production
Payment; all to occur as soon as reasonably
practicable and in any event, within thirty
(30) days from the date Gaitan
receives such notice.
5. TRANSFER OF PRODUCTION PAYMENT BY
GAITAN.
If Gaitan
desires to sell, transfer or assign all or any part of his
interest in the Production Payment to any
third person or persons; (i) any such
sale, transfer or assignment of all or any
part of Gaitan's interest in the
Production Payment shall be expressly made
subject to the Option as provided in
Section 4, and on the condition that any
such person or persons agree in writing
to that effect; (ii) Gaitan shall provide
Vista with advance notice of his
intention to make such sale, transfer or
assignment, and prompt notice of the
completion of such sale, transfer or
assignment; and (iii) except in the case of
a sale, transfer or assignment to a person
or persons related to Gaitan, Vista
shall have the right of first refusal to
acquire such interest as hereinafter
provided:
(a) If Gaitan intends to transfer all or any part of his interest
in
the Production Payment, Gaitan shall promptly notify Vista in
writing
of the price and other terms and conditions of the proposed
transfer,
which shall be for a monetary consideration only. Vista shall
have
thirty (30) days from the date such notice is received to notify
Gaitan
whether it elects to acquire the offered interest at the same price
and
on the same terms and conditions as set forth in the notice. If
Vista
does so elect, the transfer shall be consummated promptly after
notice
of such election is delivered to Gaitan.
(b) If Vista fails to so elect within the period provided for
in
paragraph (a), Gaitan shall have one hundred eighty (180) days
following the expiration of such period to
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consummate the transfer to a third party at a price and on terms
no
less favorable to Gaitan than those set forth in the notice
required
in section (a) above. If Gaitan consummates the transfer to a
third
party, Gaitan will promptly notify Vista in writing of the
transfer
and will provide Vista with documentation of the terms of the
transfer.
(c) If Gaitan fails to consummate the transfer to a third party
within
the period set forth in paragraph (b), or, if Gaitan modifies the
price
or the terms and conditions of the proposed transfer, Vista's right
of
first refusal shall be deemed to be revived. Any subsequent
proposal to
transfer such interest shall be conducted in accordance with all of
the
procedures set forth in this Section.
6. REPRESENTATIONS AND WARRANTIES OF
GAITAN.
Gaitan, as of the date of execution of this Agreement by
Gaitan,
represents and warrants to Vista, as
follows:
(a) CAPACITY AND AUTHORIZATION. Gaitan has the necessary power
and
authority to execute and deliver this
Agreement and to perform the transactions
contemplated herein.
(c) NO CONFLICTS. Neither the execution, delivery or performance
of
this Agreement by Gaitan will contravene,
conflict with or result in a violation
or breach of any agreement, covenant, law,
rule, regulation, judicial or
administrative order or other legal
restriction or requirement by which Gaitan
or his assets may be bound, or give any
governmental body or other person or
entity the right to challenge this
Agreement or the performance hereof under any
existing legal requirement, order, decree
or agreement to which Gaitan is
subject.
(d) VALID AND BINDING OBLIGATIONS. This Agreement has been duly
executed and delivered by Gaitan and is
valid, binding and enforceable against
Gaitan in accordance with its terms.
(e) TITLE TO THE DATA. Gaitan is the sole and lawful owner of good
and
marketable title to the Data, free and
clear of any and all liens, claims,
encumbrances or rights of third
parties.
(f) CONDITION OF THE DATA. The Parties acknowledge that Vista's
representatives inspected the Data located
in Zacatecas City, Mexico, on or
about February, 2003. Since February, 2003,
(i) Gaitan has not disposed of or
moved any of the Data, except for the Data
that Vista's representatives shipped
to Denver, Colorado in February, 2003; and
(ii) there has been no material
change in the condition of the Data stored
in Zacatecas City, Mexico.
(g) STORAGE. All rental and other storage costs and fees, if any,
have
been paid by Gaitan through the date of
final execution and delivery of this
Agreement, and there are no outstanding
claims or invoices for storage, or
transportation of the Data, nor is Gaitan
aware of any existing but unasserted
claims or invoices relating to the Data, as
of the date of this Agreement.
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7. CONCURRENT AGREEMENT.
(a) All of the obligations of Gaitan
and Vista hereunder are subject to
and
conditional upon the concurrent execution of that certain
Contract
of Assignment of Rights between Gaitan and Minera Paredones
Amarillos,
S.A. de C.V. ("MPA") whereby Gaitan assigns to MPA his interest in
the
mining concessions described in Exhibit B, attached hereto, as
more
particularly described therein.
(b) In addition, all of the
obligations of Gaitan and Vista hereunder are
subject to and conditional upon the concurrent execution of
that
certain Escrow Agent Contract between Gaitan, Minera Paredones
Amarillos, S.A. de C.V. ("MPA") and Juan Manuel Gonzalez Olguin
("JMGO"), whereby Gaitan and MPA appoint JMGO as escrow agent for
the
titles of the concessions described in Exhibit B, attached hereto,
for
the duration of this agreement.
8. REPRESENTATIONS AND WARRANTIES OF
VISTA.
Vista, as of the date of execution of this Agreement by Vista,
represents and warrants to Gaitan, as
follows:
(a) ORGANIZATION AND GOOD STANDING. Vista is a corporation
continued
under the laws of the Yukon Territory,
Canada; is validly existing; and is
qualified to conduct business and is in
good standing in those jurisdictions
where necessary to carry out the purposes
of this Agreement.
(b) CAPACITY AND AUTHORIZATION. Vista has the necessary corporate
power
and authority to execute and deliver this
Agreement and to perform the
transactio
