EXHIBIT 10.36
SHARE PURCHASE AGREEMENT
THIS AGREEMENT dated effective March 27, 2001
AMONG:
BELMONT RESOURCES INC. having a business address of
Xxxxx 000 - 000 Xxxx Xxxxxx Xxxxxxxxx, X.X. X0X 0X0,
(the "Vendor")
OF THE FIRST PART
AND:
EUROGAS, INC., having a business address of Xxxxxxxxxxx 00,
Xxxxxx 00-000, Xxxxxx
(the "Purchaser")
OF THE SECOND PART
AND:
ROZMIN s.r.o., having a business address of Xxxxxxxxxx
000, Xxxxxxx 00000, Xxxxxx Xxxxxxxx
OF THE THIRD PART
WHEREAS:
A. The Purchaser and the Vendor are shareholders of Rozmin s.r.o.,
a company incorporated pursuant to the laws of Slovakia and
joint venture partners in the development of a certain talc
industrial mineral deposit located near Gemerska Poloma;
B. The Vendor holds a 57% equity interest in Rozmin s.r.o. equal to
a paid up capital amount of 228,000 SKK, which the Purchaser
wishes to purchase on the terms and conditions described herein.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of one
dollar (the receipt and sufficiency of which is hereby acknowledged)
and the mutual promises contained herein the parties agree as
follows:
ARTICLE 1.
Definitions
1.1 In this Agreement:
(a) "Closing" means the closing of the purchase and sale of the
Shares and certain other matters disclosed herein;
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(b) "Commercial Production" means the point when talc industrial
mineral has completed mine extraction, crushing, classifying and/or
milling and available to sell to the consumer market.
(c) "Deposit" means that certain talc industrial mineral
deposit located near Gemerska Poloma, the mineral extraction rights
of which are held by Rozmin s.r.o.
(d) "Encumbrances" means mortgages, charges, pledges, security
interests, liens, encumbrances, actions, and claims of any nature
whatsoever;
(e) "Purchase Price Shares" means 12,000,000 common shares in
the capital stock of the Purchaser; and
(f) "Shares" means a 57% equity interest in the capital stock
of Rozmin s.r.o. equal to a paid up capital amount of 228,000 SKK.
ARTICLE 2
Purchase And Sale
2.1 Purchased Shares. Relying upon the representations and
warranties herein contained, and on and subject to the terms and
conditions hereof, the Vendor will sell to the Purchaser and the
Purchaser will accept and acquire from the Vendor the Shares in
consideration of:
(a) the Purchase Price Shares;
(b) the Purchaser hereby undertaking to register and
qualify, at its expense, the Purchase Price Shares under
the Securities Act of 1933 (United States), which
registration and qualification shall be carried out by
making the necessary filings with the Securities and
Exchange Commission ("S.E.C") within 30 days from the date
this Agreement is approved by the Canadian Venture
Exchange;
(c) the Purchaser hereby granting the right to the Vendor
to require the Purchaser to register and qualify, at the
expense of the Purchaser, the Purchase Price Shares under
the Securities Act of 1933 (United States) at any time;
(d) Rozmin s.r.o. hereby granting a royalty to the Vendor
of 2% calculated on the gross sale revenue of any talc sold
with such royalty to be paid on March 31, June 30,
September 30 and December 31 of each year of the mining
life of the Deposit;
(e) the payment by the Purchaser to the Vendor of a
US$100,000 non-refundable advance royalty (the "US$100,000
NRAR") within 30 days of the execution of this Agreement by
all parties.
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ARTICLE 3
Representations, Warranties And Covenants Of the Vendor
3.1 Covenants, Representations and Warranties. The Vendor
covenants, represents and warrants to the Purchaser that now and
at Closing:
(a) the Vendor is the registered and beneficial owner of
the Shares and have a good and marketable title to the
Shares free and clear of all mortgages, liens, charges,
security interests, adverse claims, charges, encumbrances
and demands whatsoever;
(b) no person, firm or corporation has any agreement or
option or any right or privilege, whether by law, pre-
emption or contract, that is capable of becoming an
agreement or option for the purchase of the Shares; and
(c) subject to the right of the Vendor to sell the
Purchase Price Shares in any quotation service or stock
market in which the shares of the Purchaser are traded at
any time, the Purchaser will have the right to buy-back any
unsold Purchase Price Shares (up to 6,000,000) at US$2.00
per share within one year of the date of execution of this
Agreement by all parties; and providing the Purchaser has
delivered 30 days written notice to the Vendor of
Purchasers intent to buy-back.
ARTICLE 4
Representations, Warranties And Covenants Of
the Purchaser and Rozmin s.r.o.
4.1 Covenants, Representations and Warranties. The Purchaser
covenants, represents and warrants to the Vendor that now and at
the Closing:
(a) it has the full authority to enter into this
Agreement;
(b) if the average weighted trading price of the shares of
the Purchaser as quoted on the NASD OTC market is less than
US$0.30 for any 10 trading day period within one year of
the date of execution of this Agreement by all parties,
then the Purchaser will issue to the Vendor that number of
common shares equal to 1,000,000 multiplied by the
following factor:
(US$0.30-(10 day ave. w. tr. price))/0.05
(c) in the event the Vendor is unable from the sale of the
Purchase Price Shares to recover 125% of its initial
investment in the Deposit equal to CDN$3,000,000 (based on
an initial investment of CDN$2,400,000) within one year of
the date of execution of this Agreement by all parties due
to depressed market conditions or a depressed trading price
then the Purchaser shall within 10 business days of the
written request by the Vendor issue such additional common
shares to compensate for any shortfall from the
CDN$3,000,000, with the deemed price of such shares to be
the average weighted trading price for the 10 day period
prior to the date of receipt of the written notice by the
Purchaser;
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(d) the Purchaser agrees to arrange the necessary
financing to place the Gemerska Poloma talc deposit into
Commercial Production within one year from the date of
execution of this Agreement by all parties, however if this
is not accomplished (other than for reasons beyond the
Purchaser's control) then the Purchaser will pay the Vendor
an advance royalty of US$10,000 per month for each month of
delay in achieving commercial production;
(e) the Purchaser will be responsible for the Vendor's
share of the working capital budget of Rozmin s.r.o. from
January 1, 2001 as well as any investment capital expenses
incurred and outstanding since the start of the surface
installations;
(f) during the period of obtaining regulatory approval
from the Canadian Venture Exchange, the Purchaser will use
its best efforts to keep Rozmin s.r.o. and the Deposit in
good standing with all applicable laws and regulations;
4.2 Covenants, Representations and Warranties. Rozmin s.r.o.
covenants, represents and warrants to the Vendor that now and at
the Closing:
(a) Rozmin s.r.o. will keep true and accurate records of
its operations and sales;
(b) the Vendor shall at all times have the authority to
inspect the Deposit and the facilities related to the
Deposit and to audit any records related to the sale of
talc or affecting royalties payable to the Vendor.
ARTICLE 5
Survival Of Representations, Warranties
And Covenants, And Indemnification
5.1 Survival and Indemnification. The representations, warranties
and covenants made by Rozmin s.r.o., the Vendor and the
Purchaser in this Agreement will survive any Closing and,
notwithstanding such Closing or any investigation made by or on
behalf of Rozmin s.r.o., the Vendor, the Purchaser or any other
person acting on their behalf, will continue in full force and
effect.
ARTICLE 6
Closing
6.1 Within 30 days of the date of approval by the Canadian Venture
Exchange of the transactions described in this Agreement the Vendor
shall deliver In trust to the solicitor (the "Trust") for Rozmin
s.r.o. any and all transfer documentation necessary for the transfer
of the Shares to the Purchaser against payment of the Purchase Price
Shares and the US$100,000 NRAR (if not already paid). The terms of
the Trust are that:
a) the ownership of the Shares shall not pass to the Purchaser; and
b) no instructions to proceed with the share transfer in the Slovak
Republic District Court will be given to the Rozmin s.r.o.
Solicitor,
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unless and until the Vendor has received 125% of its initial
investment equal to CDN $3,000,000 through the sale of the
Purchase Price Shares.
ARTICLE 7
Miscellaneous
7.1 Appointments. Due to the Vendor by virtue of this Agreement
receiving 12,000,000 common shares of the purchaser, as well as
previously holding 2,500,000 warrants to purchase an additional
2,500,000 shares of the Purchaser at a price of US$0.40 per
share; the Vendor shall have the right to appoint one director
of the Vendor to the Purchasers Board. Such appointment will not
take place until Canadian Venture Exchange approval of this
Agreement. Should the Vendor proceed with such appointments the
director shall remain until the next Annual General Meeting of
the Purchaser, however such term will not be less than one year.
The Purchaser also agrees that during the term of this Agreement
to coordinate all financial statements, 10Q's 10K or other
S.E.C. related matters with the Chief Financial Officer of the
Vendor.
7.2 Arbitration. Any dispute between the parties in respect of the
interpretation of this Agreement or any matter to be agreed upon
under this Agreement, or otherwise arising under this Agreement
will be determined by arbitration. Either party may, by written
notice to the other as provided herein, demand arbitration of
any dispute under this Agreement. Upon a demand for arbitration,
each party will, within 10 days after the date on which notice
of the demand is given, appoint an arbitrator and the 2
arbitrators so appointed will choose a third arbitrator. If
either party fails to appoint an arbitrator, the arbitrator
appointed by the other party will proceed to determine the
dispute as sole arbitrator. If the arbitrators appointed by the
parties do not within 3 days after they have both been appointed
agree on a third arbitrator, the third arbitrator will be
appointed pursuant to the Commercial Arbitration Act (British
Columbia). The decision of the arbitrator or the arbitrators or
a majority of them will be final and binding upon the parties.
7.3 Further Assurances. Each of the parties hereby covenants and
agrees that at any time and from time to time either before or
after the Closing it will, upon the request of the other party,
do, execute, acknowledge and deliver or cause to be done,
executed, acknowledged and delivered all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney
and assurances as may be required for the better carrying out
and performance of all the terms of this Agreement.
7.4 Notice. Any notice required or permitted to be given or
delivery required to be made to any party may be effectively
given or delivered if it is delivered personally or by telex or
telecopy at the addresses or telephone numbers set out above or
to such other address or telephone number as the party entitled
to or receiving such notice may notify the other party as
provided for herein. Delivery shall be deemed to have been
received:
(a) the same day if given by personal service or if
transmitted by fax; and
(b) the fifth business day next following the day of
posting if sent by regular post.
7.5 Governing Law. This Agreement will be governed by and be
construed in accordance with the laws of British Columbia.
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7.6 Successors and Assigns. This Agreement will be binding upon and
enure to the benefit of the parties hereto and their respective
successors and permitted assigns as the case may be.
7.7 Entire Agreement. This Agreement constitutes the entire
agreement between the parties and supersedes all prior letters
of intent, agreements, representations, warranties, statements,
promises, information, arrangements and understandings, whether
oral or written, express or implied. In the event of any
conflict or ambiguity in the interpretation of any provisions as
between this Agreement and any translation of any or all of this
Agreement, the English version of the provisions this Agreement
shall prevail.
7.8 Time of the Essence. Time will be of the essence.
7.9 Amendment. No modification or amendment to this Agreement may
be made unless agreed to by the parties thereto in writing.
7.10 Severability. In the event any provision of this Agreement will
be deemed invalid or void, in whole or in part, by any court of
competent jurisdiction, the remaining terms and provisions will
remain in full force and effect.
7.11 Headings. The headings contained herein are inserted for
convenience only and will not be construed as part of the
Agreement.
7.12 Counterparts. This Agreement may be executed by facsimile and
in any number of counterparts with the same effect as if all
parties to this Agreement had signed the same document and all
counterparts will be construed together and will constitute one
and the same instrument, and any facsimile signature shall be
taken as an original.
IN WITNESS WHEREOF the parties hereto have duly executed this
Agreement as of , 2001.
BELMONT RESOURCES INC. EUROGAS, INC.
/s/ Xxxx Xxxxx /s/ Xxxxxxxx X. Andraczke
-------------------------- -------------------------
Per: Authorized Signatory Per: Authorized Signatory
Name:Xxxx Xxxxx Name: Xxxxxxx X. Andraczke
ROZMIN s.r.o.
/s/ Ondrej Rozloznik
-------------------------
Per: Authorized Signatory
Name: Ondrej Rozloznik
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