Share Sale Agreement De Beira Goldfields Inc Purchaser and Emco Corporation Vendor Cullen Babington Hughes Western Australia 6010 Telephone +61 8 9284 5522 Facsimile +61 8 9284 5588 Email mail@cbhlegal.com.au
De
Beira Goldfields Inc
Purchaser
and
Emco
Corporation
Vendor
Xxxxxx
Xxxxxxxxx Xxxxxx
L
a w y e r s
000
Xxxxxxxx Xxxxxxx, Xxxxxxxxx
Xxxxxxx
Xxxxxxxxx 0000
Telephone
x00 0 0000 0000
Facsimile
x00 0 0000 0000
Email
xxxx@xxxxxxxx.xxx.xx
Page
- 1
1. DEFINITIONS
AND INTERPRETATIONS
2. SALE
AND
PURCHASE OF THE COMPANY
3. SETTLEMENT
4. THE
PURCHASER'S POST SETTLEMENT OBLIGATIONS
5. BOARD
AND
OPERATOR
6. DIVIDEND
POLICY
7. SHARE
TRANSFER
8. PRE-EMPTION
RIGHTS
9. CONTROL
CHANGE
10. INDEPENDENT
VALUER
11. SHAREHOLDER
AGREEMENTS
12. PERFECTION
OF TITLE
13. VENDOR'S
WARRANTIES
14. PURCHASER'S
WARRANTIES
15. NOTICES
16. CONFIDENTIALITY
17. FURTHER
ASSURANCE
18. GOVERNING
LAW
19. VARIATION
20. COSTS
21. MISCELLANEOUS
This
document is the copyright of Xxxxxx Xxxxxxxxx Xxxxxx Pty Ltd and no part of
it
may be reproduced, stored or transmitted without prior written
permission.
Page
- 2
DATED:
BETWEEN
| 1. |
De
Beira Goldfields Inc
a
company incorporated in Nevada, United States of America with Securities
and Exchange Commission File number 000 - 51707 and an address at 00
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxxx 0000 (Purchaser).
|
| 2. |
Emco
Corporation Inc., S.A. a
company constituted according to the laws of the Republic of Panama,
inscribed at File number 159366 of the Mercantile Microfilm Section
of the
Public Registry of the Republic of Panama, domiciled at the Republic
of
Panama, Province of Panama, District of Panama, Corregimiento of Bella
Vista, Campo Alegre Urbanization, Xxxxxxx Xxxxx Street, Xxxxxxxx XX
Building, Second Floor, Office 2-A (Vendor)
|
BACKGROUND
| A. |
The
Vendor is the legal and beneficial owner of the Sale
Shares.
|
| B. |
The
Company owns the Mineral Properties.
|
| C. |
The
Vendor has agreed to sell and the Purchaser has agreed to purchase
the
Sale Shares on the terms and conditions set out in this
Document.
|
OPERATIVE
PROVISIONS
| 1. |
DEFINITIONS
AND INTERPRETATIONS
|
| 1.1 |
Definitions
|
In
this
Document:
Authorisation
means
any permit, approval, authorisation, consent, exemption, filing, licence,
notarisation, registration or waiver however described and any renewal or
variation to any of them.
Business
means
the business of the Company as at the Execution Date.
Business
Contracts
means
all material agreements, leases, contracts and arrangements to which Company
is
a party and which are, in whole or in part, executory as at
Settlement.
Business
Day
means a
day on which banks are open for general banking business in the Republic of
Panama excluding Saturdays and Sundays.
Claim
means
in
relation to any Party, a claim, action or proceeding, judgment, damage, loss,
cost, expense or liability incurred by or to or made or recovered by or against
the Party, however arising and whether present, unascertained, immediate, future
or contingent.
Company
means
Minanca Minera Nanguipa, Compañía
Anónima.
a
company constituted according to the laws of the Republic of Ecuador, with
Unique Taxpayer Record number 099124537500, and domiciled at the Republic of
Ecuador, Province of Guayas, Canton of Guayaquil, City of Guayaquil, October
the
0xx
Xxxxxx
& Esmeraldas Intersection, Finansur Building Nº 1911, Fifteenth Floor,
Office 2.
Page
- 3
Consideration
means
the consideration payable pursuant to clause
2.2.
Deposit
means
the sum of $500,000.00.
Director
means
a
director of the Company.
Document
means
the
share sale agreement hereby constituted and includes the Schedules and the
recitals hereto.
Encumbrance
means an
interest or power reserved in or over an interest in any asset including, but
not limited to, any retention of title; or
| (a) |
created
or otherwise arising in or over any interest in any asset under a xxxx
of
sale, mortgage, charge, lien, pledge, trust or power;
or
|
| (b) |
by
way of, or having similar commercial effect to, security for the payment
of a debt, any other monetary obligation or the performance of any
other
obligation, and includes, but is not limited to, any agreement to grant
or
create any of the above,
|
other
than the Permitted Encumbrances.
Environmental
Law
means
any law concerning environmental matters which regulates or affects any Mineral
Property, and includes but is not limited to laws concerning land use,
development, pollution, waste disposal, toxic and hazardous substances,
conservation of natural or cultural resources and resource allocation including
any law relating to exploration for or development of any natural
resource.
Environmental
Liability
means
any obligation, expense, penalty or fine under an Environmental Law, including
rehabilitation and rectification work of whatsoever nature or kind.
force
majeure
means
matters beyond the reasonable control of the relevant party including strikes,
lockouts, labour and civil disturbances, acts of God, unavoidable accidents,
laws, rules, regulations, orders or decrees of any national municipal or other
governmental agency whether domestic or foreign, acts of war and conditions
arising out of or attributable to war (declared or undeclared), shortage of
necessary equipment, materials, labour or restrictions on them or limitations
on
their use, refusal of or delay in obtaining exchange control approval or
authority or delays in transportation.
Governmental
Agency
means,
in relation to any matter, any relevant federal government, state government,
local authority, statutory authority, administrative body of department,
tribunal or agency having authority in respect of that matter.
Insolvency
Event means:
| (a) |
a
receiver, manager, receiver and manager, trustee, administrator,
controller or similar officer is appointed in respect of a person or
any
asset of a person;
|
| (b) |
a
liquidator or provisional liquidator is appointed in respect of the
corporation;
|
Page
- 4
| (c) |
any
application (not being an application withdrawn or dismissed within
7
days) is made to a court for an order, or an order is made, or a meeting
is convened, or a resolution is passed, for the purposes
of:
|
| (i) |
appointing
a person referred to in paragraphs (a) or
(b);
|
| (ii) |
winding
up a corporation; or
|
| (iii) |
proposing
or implementing a scheme of arrangement;
|
| (d) |
any
event or conduct occurs which would enable a court to grant a petition,
or
an order is made, for the bankruptcy of an individual or his estate
under
any insolvency provision;
|
| (e) |
a
moratorium of any debts of a person, or an official assignment, or
a
composition, or an arrangement (formal or informal) with a person's
creditors, or any similar proceeding or arrangement by which the assets
of
a person are subjected conditionally or unconditionally to the control
of
that person's creditors or a trustee, is ordered, declared, or agreed
to,
or is applied for and the application is not withdrawn or dismissed
within
7 days;
|
| (f) |
a
person becomes, or admits in writing that it is, is declared to be,
or is
deemed under any applicable law to be, insolvent or unable to pay its
debts; or
|
| (g) |
any
writ of execution, garnishee order, mareva injunction or similar order,
attachment, distress or other process is made, levied or issued against
or
in relation to any asset of a person.
|
Last
Accounts means
the
consolidated balance sheet and profit and loss account of the Company for the
period ended on the Last Accounts Balance Date, true copies of which are annexed
to this Document as Schedule 3.
Last
Accounts Balance Date
means
December the 31st,
2005.
Loan
means
the
amount advanced by the Purchaser to the Company under clause
4.1and
clause 4.2.
Mine
means
the
gold mine operated by the Company under the Mining Concession Title for the
Minanca Area, Code number 389, issued by Resolution of the National Mining
Office of the Ministry of Energies & Mining of the Republic of Ecuador, on
July the 6th,
2001.
Mineral
Properties means
the
mining and exploration permits set out in Item
1
and
Mineral Property means any one of them.
Mining
Information
means:
| (a) |
surveys,
maps, plans and diagrams of the Mineral
Properties;
|
| (b) |
drill
samples and cores and drilling location maps related to drilling conducted
on the Mineral Properties;
|
| (c) |
geological
and geochemical samples and geophysical logs and reports with respect
to
mineral seams located within the Mineral Properties and all other
technical data and information;
|
Page
- 5
| (d) |
mining,
beneficiation, marketing and feasibility studies relating to the
operations, or proposed operations, on the Mineral Properties;
and
|
| (e) |
other
documents or information relating specifically to the Mineral Properties,
to work carried out or proposed to be carried out in the Mineral
Properties, or to the conduct of operations on the Mineral
Properties,
|
in
the
possession or owned by the Vendors or the Company and howsoever held or stored
whether in writing or in electronic tape or disc storage.
Party
means a
party to this Document and Parties
has a
corresponding meaning.
Permitted
Encumbrances
means:
| (a) |
rights
reserved to or vested in any Governmental Agency by the terms of any
instrument or grant affecting; or
|
| (b) |
taxes
or royalties imposed by any Governmental Agency in respect of;
or
|
| (c) |
the
terms and conditions of grant of,
|
the
Mineral Properties.
Purchase
Price
means
$30,400,000.00.
Purchaser
Shares
means
such number of restricted common ordinary shares in the capital of the Purchaser
resulting from the division of the Purchase Price (less the amount referred
to
in clause
2.3(b))
by the
closing offer price of the Purchaser's shares as quoted on the NASDAQ over
the
counter Bulletin Board on the last trading day prior to the Settlement
Date.
Revenue
Authority
means
any federal, state, territory or local government authority or instrumentality
in respect of Tax.
Sale
Shares
means
17,200 issued common shares in the Company, completely paid &
liberated.
Schedule
means
a
schedule to this Document.
Settlement
means
settlement of the sale and purchase of the Sale Shares pursuant to this
Document, whether on the Settlement Date or otherwise.
Settlement
Date
means
July 10 2006 or such other date as agreed by the Parties.
Shareholder
means
a
Party that is the registered holder of Shares.
Shares
mean
issued shares in the Company.
Statutes
means
all
legislation of any country, state or territory enforced at any time, and any
rule, regulation, ordinance, by law, statutory instrument, order or notice
at
any time made under that legislation.
Tax
means
any tax, levy, charge, impost, duty, fee, deduction, compulsory loan,
withholding, stamp, transaction, registration, duty or similar charge which
is
assessed, levied, imposed or collected by any government agency and includes,
but is not limited to, any interest, fine, penalty, charge, fee or any other
accounting imposed on, or in respect of any of the above.
Page
- 6
Transaction
means
the sale and purchase of the Sale Shares as contemplated in clause
2.1.
| 1.2 |
Interpretation
|
In
this
Document unless the context otherwise requires:
| (a) |
headings
are for convenience only and do not affect its
interpretation;
|
| (b) |
an
obligation or liability assumed by, or a right conferred on, 2 or more
Parties binds or benefits all of them jointly and each of them
severally;
|
| (c) |
the
expression person
includes an individual, the estate of an individual, a corporation,
an
authority, an association or joint venture (whether incorporated or
unincorporated), a partnership and a
trust;
|
| (d) |
a
reference to any party includes that party's executors, administrators,
successors and permitted assigns, including any person taking by way
of
novation;
|
| (e) |
a
reference to any document (including this Document) is to that document
as
varied, novated, ratified or replaced from time to
time;
|
| (f) |
a
reference to any statute or to any statutory provision includes any
statutory modification or re-enactment of it or any statutory provision
substituted for it, and all ordinances, by-laws, regulations, rules
and
statutory instruments (however described) issued under
it;
|
| (g) |
words
importing the singular include the plural (and vice versa) and words
indicating a gender include every other
gender;
|
| (h) |
reference
to parties, clauses, schedules, exhibits or annexures are references
to
parties, clauses, schedules, exhibits and annexures to or of this Document
and a reference to this Document includes any schedule, exhibit or
annexure to this Document;
|
| (i) |
where
a word or phrase is given a defined meaning, any other part of speech
or
grammatical form of that word or phrase has a corresponding meaning;
|
| (j) |
reference
to an Item
is
to an item in Schedule 1; and
|
| (k) |
a
reference to $
or
dollar
is
to currency of the United States of
America.
|
| 2. |
SALE
AND PURCHASE
OF THE COMPANY
|
| 2.1 |
Sale
and
Purchase
|
The
Vendor sells and the Purchaser agrees to purchase the Sale Shares free of
Encumbrances for the Consideration and otherwise on the terms and conditions
set
out in this Document.
| 2.2 |
Deposit
|
The
Vendor acknowledges receipt of the Deposit to be disbursed only in accordance
with this Document.
Page
- 7
| 2.3 |
Consideration
|
The
Consideration payable by the Purchaser for the acquisition of the Sale
Shares is the Purchase Price satisfied by:
| (a) |
the
issue to the Vendor of
the Purchaser Shares; and
|
| (b) |
the
payment to the Vendor of $400,000.00 to be deducted from the
Deposit.
|
| 3. |
SETTLEMENT
|
| 3.1 |
Time
for Settlement
|
Settlement
must take place on the Settlement Date at the Purchaser's office or at such
other place or time as the Parties may agree.
| 3.2 |
The
Vendor's obligations at
Settlement
|
At
Settlement, the Vendor must deliver to the Purchaser:
| (a) |
share
certificates in respect of the Sale
Shares;
|
| (b) |
proof
that a meeting of the Directors has been held approving the transfer
of
the Sale Shares to the Purchaser subject to execution of the share
transfer by the Purchaser;
|
| (c) |
instruments
of transfer for the Sale Shares in favour of the Purchaser which have
been
duly executed by the Vendor;
|
| (d) |
all
available copies of the constitution of the
Company;
|
| (e) |
the
minute books and other records of meetings or resolutions of members
and
directors of the Company;
|
| (f) |
all
Mining Information;
|
| (g) |
all
registers of the Company (including the register of members, register
of
options, register of directors, register of charges) in proper order
and
condition and fully entered up to the Settlement
Date;
|
| (h) |
all
cheque books, financial and accounting books and records, copies of
tax
returns and assessments, mortgages, leases, agreements, insurance
policies, title documents, licences, indicia of title, contracts,
certificates and all other records, papers, books and documents of
the
Company.
|
| (i) |
all
current Authorisations and other documents issued to the Company under
any
legislation or ordinance relating to its business activities
and
|
| (j) |
any
other documents, transfers or other things that may be required by
the
Purchaser to give effect to the terms of this
Document.
|
| 3.3 |
Purchaser's
obligations at Settlement
|
At
Settlement, the Purchaser must:
| (a) |
allot
and issue the Purchaser Shares to the Vendor (or its nominees as stated
in
writing to the Purchaser at least 3 days prior to Settlement)
;
|
Page
- 8
| (b) |
deliver
to the Vendor a certificate or holding statement for those Purchaser
Shares;
|
| (c) |
if
required by the Vendor by notice in writing to the Purchaser at least
three days prior to Settlement, provide confirmation of the cost base
of
the Purchaser Shares; and
|
| (d) |
deliver
to the Vendor a certified copy of the director's resolution of the
Purchaser approving the Transaction.
|
| 4. |
THE
PURCHASER'S POST SETTLEMENT
OBLIGATIONS
|
| 4.1 |
Loan
to the Company
|
Following
Settlement the Purchaser must make available to the Company $7,000,000.00 as
a
loan in accordance with the following timetable for the purposes as below
stated:
| (a) |
$1,500,000.00
within 15 days of Settlement to be used for upgrade expenditures at
the
Mine;
|
| (b) |
$400,000.00
by no later than 31 July 2006 to be used for upgrade expenditures at
the
Mine;
|
| (c) |
$1,375,000.00
to be paid to the Bank of Guayaquil to repay debt owed by the Company
to
the Bank of Guayaquil by no later than October 2
2006;
|
| (d) |
$3,725,000.00
to be to be expended on exploration expenditure on the Mineral Properties
to be advanced to the Company in 5 equal instalments each of $745,000.00
commencing 1 September 2006.
|
| 4.2 |
Deposit
|
Following
payment to the Vendor of the amount due under clause
2.3(b) the
Vendor must pay the balance of $100,000.00 to the Company which amount forms
part of the Loan.
| 4.3 |
Terms
and Conditions of Loan
|
| (a) |
The
Loan is repayable on demand by the Purchaser but only from cash surpluses
from the sale of mineral products from the Mining
Permits.
|
| (b) |
Repayment
of the Loan ranks in priority ahead of:
|
| (i) |
loan
repayments to other persons (other than the amount referred to in
clause
4.1(c);
and
|
| (ii) |
dividends,
capital returns, loans or distributions of any nature to shareholders
of
the Company.
|
| (c) |
The
Loan carries no interest.
|
| 4.4 |
Security
|
The
Company must grant a registrable mortgage over its assets to the Purchaser
in a
form approved by the Purchaser at the cost of the Company immediately after
the
Company’s liability to the Bank of Guayaquil is paid in full and the security
interest granted by the Company to the Bank of Guayaquil has been
released.
Page
- 9
| 4.5 |
Force
Majeure
|
| (a) |
Force
majeure applies to the Purchaser's obligations under this clause and
the
obligations of the Purchaser are suspended and the time for the
expenditure of funds by the Purchaser is extended to the extent that
the
Purchaser is prevented or hindered from performance or expenditure
by
force majeure.
|
| (b) |
The
Purchaser is not entitled to the benefit of clause
4.5(a)
if
the force majeure event is caused by lack of funds or by the negligence
of
the Purchaser.
|
| (c) |
If
force majeure causes a suspension or extension the Purchaser must give
notice thereof as soon as reasonably possible to the Vendor stating
the
date extent and nature thereof.
|
| (d) |
If
the Purchaser’s obligations or expenditure requirements have been
suspended or extended the Purchaser must resume performance or expenditure
as soon as reasonably possible after the removal of the force majeure
and
must provide notice of that to the Vendor.
|
| 5. |
BOARD
AND OPERATOR
|
| 5.1 |
Board
|
As
soon
as is practicable after Settlement, the Vendor and the Company must take all
necessary steps to ensure that the appointment of directors nominated by the
Purchaser results in those constituting the majority of the board of the
Company.
| 5.2 |
Operator
|
Subject
to Settlement, the Company appoints the Purchaser as joint operator of the
Mine
with Xxxxxxx, X. X. a company constituted according to the laws of the Republic
of Ecuador, with Unique Taxpayer Record number 0991308180001.
For
this
purpose, the particular terms of operation shall consist of Xxxxxxx, X. X.
being
in charge of the day-by-day onsite operation, and the Purchaser being in charge
of providing onsite assistance regarding technical oversight for both mining
and
milling. In any case, procedures and final authorization shall be deemed by
the
Purchaser.
| 6. |
DIVIDEND
POLICY
|
The
Directors must, within a reasonable period, adopt a dividend policy under which
all profits derived from the operations of the Company and legally available
for
distribution or payment to shareholders (distributable
profits)
are
distributed to Shareholders in proportion to each Shareholders percentage
holding in the Company:
| (a) |
subject
to compliance with clause
4.3(b):
and
|
| (b) |
consistent
with prudent financial management; the Company's business plan, proper
provisioning for taxation, working capital and operational requirements
of
the Company; and
|
Page
- 10
| (c) |
subject
to the terms and covenants of all agreements pursuant to which any
bank or
financial institution has provided credit, loans or other financial
accommodation to the Company.
|
| 7. |
SHARE
TRANSFER
|
| 7.1 |
Transfers
|
A
Shareholder must not sell or transfer any legal or beneficial interest in its
Shares except:
| (a) |
in
compliance with this clause; or
|
| (b) |
with
the prior written consent of all other Shareholders;
or
|
| (c) |
to
a body corporate that beneficially is wholly owned by that
Shareholder.
|
| 7.2 |
Security
Interests
|
A
Shareholder must not execute or create, or attempt to execute or create, or
permit to exist any security interest over its Shares to or in favour of any
person, except with the prior written consent of all other
Shareholders.
| 7.3 |
Transfer
Restrictions
|
| (a) |
A
Shareholder must not transfer any legal or beneficial interest in its
Shares if the transfer would constitute a breach of or default under
any
provision of any project contract.
|
| (b) |
Each
Shareholder indemnifies any other Shareholder against any claim, damage,
loss or cost of any nature or description, including without limitation
legal costs on a solicitor and own client basis, arising out of any
breach
of this provision by that Shareholder.
|
| 8. |
PRE-EMPTION
RIGHTS
|
| 8.1 |
Sale
Notice
|
| (a) |
A
Shareholder (Seller)
wishing to sell its Shares (Disposal
Shares)
must give a notice (Sale
Notice)
to the board of the Company stating that the Seller wishes to sell
the
Disposal Shares specifying:
|
| (i) |
the
number of Disposal Shares proposed for sale;
and
|
| (ii) |
the
price for the sale of the Disposal Shares which must be a single
instalment cash price (Sale
Price);
and
|
| (iii) |
any
other material terms and conditions.
|
| (b) |
A
Sale Notice once given is irrevocable for a period of 25 Business Days
after the date of the Sale Notice.
|
| 8.2 |
First
Refusal Right
|
The
board
must, within 5 Business Days of receipt of a Sale Notice, offer the Disposal
Shares to each other Shareholder (Remaining
Shareholder)
by
written notice specifying:
| (a) |
the
number of Disposal Shares;
|
Page
- 11
| (b) |
the
Sale Price;
|
| (c) |
other
material terms and conditions stated in the Sale Notice;
and
|
| (d) |
the
closing date of the offer (Closing
Date)
being a period of 20 Business Days following the date of the
offer.
|
| 8.3 |
Offer
Acceptance
|
| (a) |
A
Remaining Shareholder may:
|
| (i) |
accept
the offer in relation to all or part of the Disposal Shares; or
|
| (ii) |
reject
the offer,
|
by
giving
written notice (Acceptance) to
the
board on or before the Closing Date.
| (b) |
Each
Acceptance must be unconditional and is
irrevocable.
|
| (c) |
An
offer by a Remaining Shareholder to purchase a stated number of Disposal
Shares is deemed to include an offer to purchase any lesser number
of
Disposal Shares allocated to that Remaining Shareholder pursuant to
this
clause.
|
| (d) |
A
Remaining Shareholder is deemed to have rejected the offer if no
Acceptance is received by the Closing
Date.
|
| 8.4 |
Disposal
Shares Apportionment
|
| (a) |
The
Disposal Shares must be apportioned between the Remaining Shareholders
in
proportion to their shareholder percentages subject to any limit to
the
number of Shares to be acquired under this clause specified in the
Acceptance of that Remaining Shareholder.
|
| (b) |
Disposal
Shares that would in any apportionment to a Remaining Shareholder exceed
the number specified by that Remaining Shareholder in its Acceptance
must
be reapportioned among the other Remaining Shareholders who have notified
acceptances as closely as possible in proportion to their shareholder
percentages.
|
| (c) |
This
provision applies to any reapportionment and the process must be repeated
as many times as necessary until all Disposal Shares have been
allocated.
|
| 8.5 |
Notification
|
The
board
must notify the Seller and any Remaining Shareholder who has accepted an offer
of the number of Shares allocated to that Remaining Shareholder within 5
Business Days following the Closing Date.
| 8.6 |
Completion
|
| (a) |
Completion
of the transfer of Disposal Shares must be effected within 10 Business
Days following the Closing Date at the registered office of the
Company.
|
Page
- 12
| (b) |
The
Remaining Shareholder must purchase the Disposal Shares at completion
by
delivering cash or a bank cheque in payment of the Sale Price for the
Disposal Shares to the Seller.
|
| (c) |
The
Seller must at completion deliver to the Remaining Shareholder the
certificates relating to the Disposal Shares and a duly executed transfer
of the Disposal Shares.
|
| 8.7 |
Default
|
If
a
Seller defaults in completing transfer of Disposal Shares pursuant to this
provision the board must:
| (a) |
receive
the Sale Price for the Disposal Shares from the Remaining Shareholder
on
behalf of the Seller;
|
| (b) |
give
to the Remaining Shareholder a valid receipt for the Sale Price on
behalf
of the Seller;
|
| (c) |
authorise
a person to execute on behalf of the Seller transfers of the Disposal
Shares in favour of the Remaining
Shareholder;
|
| (d) |
register
the Remaining Shareholder as the holder of the Disposal Shares;
and
|
| (e) |
take
all further action necessary to complete the transfer of the Disposal
Shares,
|
and
each
Shareholder hereby appoints the board and each Director from time to time as
its
lawful attorney to effect the matters required under this clause
8.7.
| 8.8 |
Third
Party Transfer
|
A
Seller
may transfer any Disposal Shares, which have not been offered for sale and
accepted for purchase by the Remaining Shareholders in accordance with this
clause to any person, upon terms which are at least as equally favourable to
the
Seller as the terms set out in the Sale Notice at any time before 6 months
following the date of the Sale Notice.
| 9. |
CONTROL
CHANGE
|
| 9.1 |
Effective
Control
|
A
change
in the effective control of a shareholder occurs for the purposes of this
provision in the event that any single person holding directly or indirectly
more than 50 per centum of the issued capital of that Shareholder at the time
when that Shareholder originally become a Shareholder ceases to hold the
beneficial interest in at least 50 per centum of the issued capital of that
Shareholder.
| 9.2 |
Control
Change
|
| (a) |
A
Shareholder must immediately notify each other Shareholder and the
board
of any change in the effective control of that
Shareholder.
|
| (b) |
In
the event of any change in effective control of a Shareholder that
Shareholder is deemed to have notified each other Shareholder that
that
Shareholder wishes to sell and transfer all its Shares at a value
determined in accordance with clause
10.
|
Page
- 13
| 9.3 |
Transfer
Procedure
|
| (a) |
The
board must, upon receipt of the independent valuation of the Shares
of a
Shareholder affected by a change in effective control, offer those
Shares
to all other Shareholders at a price equal to the independent valuation
of
the Shares determined in accordance with clause
10.
|
| (b) |
The
pre-emptive rights in favour of Remaining Shareholders contained in
clause
8
apply with any necessary modification to an offer of Shares by the
board
pursuant to this clause
9.
|
| 10. |
INDEPENDENT
VALUER
|
| 10.1 |
Appointment
|
| (a) |
The
board must appoint an independent valuer to determine the value of
each
Share within 10 Business Days following notice or becoming aware that
there has been a change in the effective control of a
Shareholder.
|
| (b) |
The
independent valuer appointed under this clause
10
must:
|
| (i) |
be
a qualified accountant of at least 10 years standing or other person
experienced in the valuation of mineral assets;
and
|
| (ii) |
not
have had any business dealing with any Shareholder in the period of
2
years before the date of appointment.
|
| 10.2 |
Valuation
|
| (a) |
The
independent valuer must be instructed to determine the fair market
value
of the Shares by valuing the Company as a whole on a going concern
basis
as at the end of the month before the month in which the independent
valuer is appointed.
|
| (b) |
The
fair market value of each share is the proportionate amount of the
value
of the Company, without any premium for control or diminution for a
minority interest.
|
| 10.3 |
Information
Access
|
The
board
must:
| (a) |
provide
access for the independent valuer at all reasonable times to the
accounting and other records of the Company; and
|
| (b) |
procure
any officer of the Company to provide any information and explanation
that
the independent valuer may require for the purposes of valuation of
the
Company.
|
| 10.4 |
Determination
Period
|
The
board
must use its best endeavours to ensure that the independent valuer completes
the
valuation as soon as practicable and in any event within 60 days following
receipt of instructions.
Page
- 14
| 10.5 |
Valuation
Procedure
|
The
independent valuer in determining the valuation of the Shares:
| (a) |
acts
as an expert and not as an arbitrator;
|
| (b) |
may
obtain or refer to any document, information or material and undertake
any
inspection or inquiry as the independent valuer considers
appropriate;
|
| (c) |
must
provide the board with a draft valuation and permit any Director an
opportunity to comment on the draft valuation before final completion;
and
|
| (d) |
may
engage any assistance that the independent valuer reasonably considers
appropriate or necessary to determine the
valuation.
|
| 10.6 |
Conclusive
Effect
|
The
valuation as determined by the independent valuer is final and binding upon
each
Shareholder.
| 10.7 |
Costs
|
The
Company must pay the reasonable costs of the independent valuer.
| 11. |
SHAREHOLDER
AGREEMENTS
|
| 11.1 |
Agreement
to be bound
|
The
board
must not register a person as a Shareholder, whether under a transfer of shares
or otherwise, except where that person has previously entered into an agreement
in form and substance satisfactory to the board by which that person agrees
to
be bound by this Document.
| 11.2 |
Shareholders
Agreement
|
If
a
Party requests in writing that Shareholders agreement be entered into the
Parties must use their best endeavours to negotiate such agreement in good
faith.
| 12. |
PERFECTION
OF TITLE
|
If
any of
the rights of the Vendor as legal and beneficial owners of the Sale Shares
are
not legally capable of being transferred to, conferred upon or exercised by
the
Purchaser in its name as and from Settlement, the Vendor transfers these rights
to be exercised by the Purchaser in the name of the Vendor and the Vendor holds
these rights in trust for the Purchaser.
| 13. |
VENDOR'S
WARRANTIES
|
| 13.1 |
Warranties
and Representations
|
The
Vendor warrants and represents to the Purchaser and it is a condition of this
Document that both at the date of execution of this Document and at the
Settlement Date the statements set out in Schedule 2 are true, complete and
accurate.
Page
- 15
| 13.2 |
Indemnity
by the Vendor
|
The
Vendor indemnifies and must keep the Purchaser indemnified against:
| (a) |
any
Claims, demands, actions, losses, costs, expenses, proceedings or
liabilities of whatsoever nature suffered or incurred by the Purchaser
as
a result of any breach of the terms of this Document by the Vendor;
and
|
| (b) |
all
loss, damage and costs suffered by the Purchaser arising in consequence
of
any of the warranties and representations set out in Schedule 2 being
false, misleading or incorrect.
|
| 13.3 |
Minimum
and Maximum Warranty Amount
|
| (a) |
The
Vendor is not liable to the Purchaser for any Claim arising from a
breach
of any warranty or any term of this Document unless the amount finally
adjudicated or agreed as being payable in respect of the Claim exceeds
$10,000.
|
| (b) |
The
maximum amount which the Purchaser may recover from the Vendor in respect
of a breach of warranty or any term of this Document in respect of
all
Claims is the amount equal to the Consideration as determined in
accordance with International Financial Reporting Standards, save in
the
case of fraud or wilful neglect where the amount is
unlimited.
|
| 14. |
PURCHASER'S
WARRANTIES
|
| 14.1 |
Warranties
and Representations
|
The
Purchaser warrants and represents to the Vendor that:
| (a) |
the
execution and delivery of this Document has been duly and validly
authorised by all necessary corporate action on behalf of the
Purchaser;
|
| (b) |
the
Purchaser has full corporate power and lawful authority to execute
and
deliver this Document and to observe and perform or cause to be observed
and performed all of its obligations in and under this Document;
and
|
| (c) |
the
Purchaser Shares issued to the Vendor at Settlement are free of
Encumbrances provided that nothing in this clause
14.1(c) constitutes
a warranty or representation by the Purchaser that the Purchaser Shares
will not be subject to a period of escrow imposed in accordance with
the
listing or trading rules of any applicable stock
exchange.
|
| 14.2 |
Indemnity
|
The
Purchaser indemnifies the Vendor and must keep it indemnified against all loss,
damage and costs suffered by it by reason of the warranties or representations
contained in clause
14.1
proving
to be false, misleading or incorrect.
Page
- 16
| 15. |
NOTICES
|
| 15.1 |
Requirements
for Notice
|
Each
notice authorised or required to be given to any Party must be in writing;
and
| (a) |
delivered
personally; or
|
| (b) |
sent
by properly addressed and prepaid mail; or
|
| (c) |
facsimile,
|
addressed
to the Party at its address set out in clause
15.2,
or to
such other address as it may from time to time notify to the other Party
pursuant to clause
15.3.
| 15.2 |
Address
of Parties
|
The
initial address of the Parties is as follows:
The
Vendor
By
mail:
X.X. Xxx Xx 0000-00000 Xxxx 0, Xxxxxx, Xxxxxxxx of Panama
By
delivery: As above
By
facsimile: (000) 000-0000
The
Purchaser:
By
mail:
00 Xxxxxx Xx, Xxxxxxxx, Xxxxxxx Xxxxxxxxx 0000
By
delivery: As above
By
facsimile: + 61 8 9240
2406
| 15.3 |
Change
of Address
|
Each
Party may from time to time change its address by giving notice pursuant to
clause
15
to the
other Parties.
| 15.4 |
Receipt
of Notice
|
Any
notice given pursuant to this clause
15
is
deemed received:
| (a) |
in
the case of personal delivery, on the actual day of delivery if delivered
prior to 5 pm (Perth time) on a Business Day or on the next following
Business Day if delivered after 5 pm (Perth time) on a Business Day
or on
other than a Business Day;
|
| (b) |
if
sent by mail, on the second clear Business Day after the day of posting;
or
|
| (c) |
if
sent by facsimile, on the day the facsimile was sent by clear
transmission.
|
Page
- 17
| 16. |
CONFIDENTIALITY
|
The
terms
of this Document, the existence of this Document and any information which
a
Party may obtain concerning the affairs or assets of another Party must be
kept
confidential and must not be used for any purpose other than the completion
of
the Transaction.
| 17. |
FURTHER
ASSURANCE
|
Each
Party must sign, execute and do all deeds, acts, documents and things as may
reasonably be required by the other Party to effectively carry out and give
effect to the terms and intentions of this Document.
| 18. |
GOVERNING
LAW
|
This
Document is governed by and construed in accordance with the law from time
to
time in the Republic of Panama and the Parties agree to submit to the
non-exclusive jurisdiction of the courts of Panama and the courts which hear
appeals therefrom.
| 19. |
VARIATION
|
No
modification or alternation of the terms of this Document is binding unless
made
in writing dated subsequent to the date of this Document and duly executed
by
all Parties.
| 20. |
COSTS
|
| 20.1 |
Stamp
Duty
|
All
stamp
duty assessed on or in respect of this Document is payable by the
Purchaser.
| 20.2 |
Legal
Costs
|
Each
Party must bear their own legal costs incidental to the preparation, negotiation
and execution of this Document.
| 21. |
MISCELLANEOUS
|
| 21.1 |
Severance
|
If
any
provision of this Document is invalid and not enforceable in accordance with
its
terms, all other provisions which are self-sustaining and capable of separate
enforcement without regard to the invalid provision continue to be valid and
forceful in accordance with their terms.
| 21.2 |
Entire
Agreement
|
This
Document constitutes the sole understanding of the Parties with respect to
the
subject matter and replaces all other agreements with respect
thereto.
| 21.3 |
Counterparts
|
This
Document may be executed in any number of counterparts (including by way of
facsimile) each of which is deemed for all purposes to be an original and all
such counterparts taken together are deemed to constitute one and the same
instrument.
Page
- 18
| 21.4 |
Time
|
Time
is
of the essence in this Document in all respects.
EXECUTED
by the
Parties as an Agreement
|
EXECUTED
BY Emco
Corporation Inc., S.A. (File
number 159366 of the Mercantile Microfilm Section of the Public Registry)
in accordance with its constituent documents and the law applicable
in its
place of incorporation
|
|
|
|
/s/
Xxxxxxxxx Xxxxxxx
|
||
|
Director
- Xxxxxxxxx Xxxxxxx
/s/
Xxxxxxx Xxxxxx Xx Xxxxxxxx
|
||
|
Director/Secretary
Xxxxxxx
Xxxxxx Xx Xxxxxxxx
|
|
EXECUTED
BY De
Beira Goldfields Inc
(Securities
and Exchange Commission File number 000 - 51707] in accordance with
its
constituent documents and the law applicable in its place of
incorporation
|
|
|
|
/s/
Reg Gillard
|
||
|
Director
- Reg Gillard
/s/
Xxxxxx Xxxx
|
||
|
Witness
- Xxxxxx Xxxx
|
Page
- 19
SCHEDULE
1
| 1. |
MINERAL
PROPERTIES
|
|
Permit
Type / Name
|
Number
|
Award
Date
|
Renewal
Date
|
|
Mining
Concession Title for the Minanca Area, issued by Resolution of the
National Mining Office of the Ministry of Energies & Mining of the
Republic of Ecuador
|
Code
389
|
March
the 31st,
1997
|
Thirty
years, starting from March the 31st,
1997
|
Page
- 20
SCHEDULE
2
Vendor
Warranties
| 1. |
SHARE
CAPITAL
|
| (a) |
(Shares
Fully Paid):
The Sale Shares are fully paid up and have been duly issued and
allotted.
|
| (b) |
(No
right to subscribe):
No person has any right or option to subscribe for or to otherwise
acquire
any further Shares.
|
| (c) |
(No
options):
There are no outstanding options, contracts, calls, first refusals,
commitments, rights or demands of any kind relating to the issued or
unissued capital of the Company .
|
| (d) |
(No
other allotments):
The Vendor is not under any obligation to allot any of the Sale Shares
to
any person or persons or to grant any option over any part of the Sale
Shares.
|
| (e) |
(The
Vendor is owner):
The Vendor is the registered holder and beneficial owner of 100% of
the
Sale Shares, which are free of any
Encumbrance.
|
| (f) |
(Right
and power to sell):
The Vendor has complete and unrestricted power and right to sell, assign
and transfer the Sale Shares to the
Purchaser.
|
| (g) |
(Issued
Capital):
The Company has issued 21,500 Common Shares and is not under any
obligation to allot, issue or grant Shares to any other
person.
|
| 2. |
CORPORATE
AUTHORITY
|
The
Company:
| (a) |
is
duly registered, has full corporate power to own its assets and Business
and to carry on the Business as now conducted;
and
|
| (b) |
has
done everything necessary to do business lawfully in all jurisdictions
in
which the Business is carried on.
|
| 3. |
THE
LAST ACCOUNTS
|
| 3.1 |
The
Last Accounts:
|
| (a) |
disclose
a true and fair view of the state of the affairs, financial position
and
assets and liabilities of the Company as at the Last Accounts Balance
Date, and the income, expenses and results of the operations of the
Company for the period ended on that
date;
|
| (b) |
include
in their respective balance sheets all such reserves and provisions
for
Tax as are adequate to cover all Tax liabilities (whether or not assessed
and whether actual, contingent, deferred or otherwise) of the Company
up
to the Last Accounts Balance Date;
|
| (c) |
contain
adequate provisions in respect of all other liabilities (whether actual,
contingent, deferred or otherwise) of the Company as at the Last Accounts
Balance Date and proper disclosure (in note form) of any contingent
or
other liabilities not included or provided therein;
and
|
Page
- 21
| (d) |
were
prepared:
|
| (i) |
in
accordance with International Financial Reporting Standards applied
on a
consistent basis and without making any revaluation of
assets;
|
| (ii) |
in
the manner described in the notes to them;
and
|
| (iii) |
on
a consistent basis with the accounts for the previous financial
year.
|
| 3.2 |
Period
Since Last Accounts Balance Date
|
| (a) |
(No
material adverse change):
There has not since the Last Accounts Balance Date
been:
|
| (i) |
any
material adverse change to the financial condition of or in the trading
operations of the Company from that shown in the Last Accounts;
or
|
| (ii) |
any
material change in the nature, amount, valuation or basis of valuation
of
the assets or in the nature or amount of any liabilities of the Company
.
|
| (b) |
(No
material effect on operations):
There has not arisen since the Last Accounts Balance Date any item,
transaction or event of a material or unusual nature likely to affect
substantially the operations or results or state of affairs of the
Company.
|
| (c) |
(Business
carried on in normal course):
Since the Last Accounts Balance Date, the Company has carried on the
Business in the ordinary regular and normal course, no amount has been
acquired or disposed of, no liability has been incurred except in the
ordinary course of business, and no contingent liability has been incurred
by the Company.
|
| (d) |
(No
debts released or settled):
None of the debts shown in the Last Accounts have been released or
settled
for an amount less than that reflected for such debts in the Last
Accounts, and all such debts owing to and accounts receivable of the
Company are now and on Settlement are good and collectable in the amount
disclosed in the Last Accounts (other than for any allowance in the
Last
Accounts in respect of doubtful debts). All such accounts receivable
and
debts are not subject to any counterclaim or set-off except for moneys
payable by persons also shown as creditors of the Company in the amounts
shown in the Last Accounts (as such amounts may have been affected
by
transactions in the ordinary course of business since the Last Accounts
Balance Date).
|
| (e) |
(No
Insolvency Event):
Since the Last Accounts Balance Date no Insolvency Event has occurred
in
respect of the Company nor has any act occurred or any omission made
which
may result in an Insolvency Event occurring in respect of the
Company.
|
| (f) |
(No
additional remuneration):
Since the Last Accounts Balance Date there has not been material change
in
the remuneration or benefits paid to or given or expected by the officers
or employees of the Company.
|
Page
- 22
| 4. |
RECORDS
AND SYSTEMS
|
All
books
of accounts and other records of any kind of the Company:
| (a) |
have
been fully, properly and accurately kept on a consistent basis and
completed in accordance with proper business and accounting practices
and
all applicable Statutes;
|
| (b) |
have
not had any material records or information removed from
them;
|
| (c) |
do
not contain or reflect any material inaccuracies or discrepancies;
and
|
| (d) |
give
and reflect a true and fair view of the trading transactions, or the
financial and contractual position of the Company and of their assets
and
liabilities; and
|
| (e) |
are
in the possession of the Company.
|
| 5. |
CONTRACTS
AND COMMITMENTS
|
| (a) |
(Contracts
binding):
Every contract, instrument or other commitment to which the Company
is a
party (including all Business Contracts and Leases) is valid and binding
according to its terms and, without prejudice to any other warranty,
no
party to any such commitment is in material default under the terms
of
that commitment.
|
| (b) |
(No
contracts outside ordinary course of business):
The Company is not party to any contract or commitment entered into
which
is in existence and:
|
| (i) |
is
outside the ordinary course of business;
|
| (ii) |
even
if entered into in the ordinary course of business, involves or is
likely
to involve obligations or liabilities which by reason of their magnitude
or nature ought reasonably to be made known to an intending purchaser
of
the Sale Shares;
|
| (iii) |
is
not at arm's length or not on normal commercial terms;
or
|
| (iv) |
is
long term, substantial or onerous.
|
| (c) |
(No
guarantees given):
The Company has not guaranteed or indemnified or is directly or indirectly
obliged in any way to guarantee, assume or provide funds to satisfy
any
obligation of any person, or has given a letter of comfort to any
person.
|
| (d) |
(No
contract by unilateral act):
No offer, tender, quotation or the like given or made by the Company
is
capable of giving rise to a contract merely by any unilateral act of
a
third party, other than in the ordinary course of
business.
|
| (e) |
(Capital
expenditure):
There are no outstanding commitments of the Company for capital
expenditure other than replacements and normal purchases of plant and
equipment in the ordinary course of
business.
|
| (f) |
(No
foreign exchange exposure):
There are no foreign exchange contracts binding the Company, and there
are
no foreign exchange exposures of the
Company.
|
Page
- 23
| (g) |
(No
profit sharing):
The Company is not party to any agreement, arrangement or understanding
where it is bound to share profits or waive or abandon any
rights.
|
| (h) |
(No
other payments):
The Company is not subject to any agreement, arrangement or understanding
that involves directly or indirectly any offer or payment to any
government official or any other third party to influence him or to
assist
in the obtaining or retaining of business, nor involves any offer or
payment to any other person while knowing or having reason to know
that
all or a portion of the matter offered or any such payment would be
made
available or paid to any government official or third party for the
same
purpose.
|
| (i) |
(Securities
enforceable):
All securities (including any guarantee or indemnity) granted in favour
of
the Company are valid and enforceable by that member against the grantor
in accordance with the terms of that
security.
|
| 6. |
PERMITS
AND COMPLIANCE WITH STATUTES
|
| (a) |
(All
Permits obtained):
The Company has all permits, licenses, authorities, registrations and
approvals necessary for properly carrying on its Business (Permits).
|
| (b) |
(Permanent
and unconditional):
All Permits have been obtained on a permanent and unconditional basis,
or
if the Permits are not permanent and unconditional, the Company possesses
all documents necessary to permit the Purchaser to renew or transfer
the
Permits.
|
| (c) |
(No
revocation or variation):
There is no circumstance or fact which may:
|
| (i) |
result
in the revocation or variation in any material respect of any of the
Permits;
|
| (ii) |
hinder
or prevent the transfer or grant of such Permits to the Purchaser;
or
|
| (iii) |
prejudice
the continuance or renewal of such Permits in favour of the
Purchaser.
|
| (d) |
(Reports
and returns):
All reports, returns, payments and other information required to be
made
or given in respect of any Permits have been duly made or given.
|
| (e) |
(Compliance
with Statutes):
The Business is conducted in compliance with all Statutes and there
are no
allegations of any contravention of any Statute by the Company.
|
| 7. |
CORPORATE
MATTERS
|
| (a) |
(Assets
owned by the Company):
The Company is the legal and beneficial owner of all of their assets,
which are free of any Encumbrance, except as disclosed in the Last
Accounts.
|
| (b) |
(Compliance
with contracts):
The Company has complied in all respects with:
|
Page
- 24
| (i) |
their
Constitutions;
|
| (ii) |
any
instrument to which they are a party or by which they are bound, including
all Business Contracts and Leases; and
|
| (iii) |
all
legal requirements and all judgments, orders, injunctions and requirements
of any Court or Government Authority,
|
| (iv) |
and
there has not occurred any event which, with the passing of time or
giving
of notice, would constitute a material breach of default or any of
the
above.
|
| (c) |
(Capacity
of the Company):
The Company:
|
| (i) |
does
not hold and has not agreed to acquire or take up any shares in the
capital of any company; and
|
| (ii) |
is
not a trustee or manager of any trust estate or
fund;.
|
| (d) |
(No
powers of attorney):
There are no powers of attorney given by the Company in favour of any
person which are or may come to be in force in relation to the Business
or
the Company
|
| (e) |
(Officers
duly appointed):
All of the directors and secretaries of the Company have been duly
appointed.
|
| (f) |
(No
name changes):
The name of the Company must not be changed before
Settlement.
|
| (g) |
(Plant
and equipment):
All plant, equipment and vehicles owned by the Company are in good
order
and repair except for fair wear and tear.
|
| (h) |
(All
duties and taxes paid):
All stamp duties and other taxes for which the Company is primarily
liable
in respect of every deed, agreement or other document to which the
Company
is or has been a party have been duly paid or adequately provided for.
|
| (i) |
(Constitution):
The Constitution of the Company must not be replaced or altered prior
to
Settlement.
|
| (j) |
(Filings):
The Company has filed all annual returns, resolutions, particulars,
other
forms, returns and documents as and where required to be filed or
registered under all Statutes, such returns and forms were accurate
in all
material respects.
|
| 8. |
ASSETS
|
All
the
fixed assets, current assets and other assets and property used in connection
with the Business are:
| (a) |
legally
and beneficially owned by the Company free of Encumbrances (and, in
particular, no such assets are the subject of any hire purchase agreement
or credit purchase agreement or any agreement for payment on deferred
terms), except for the security granted to the Bank of Guayaquil;
and
|
| (b) |
not
used by any other person.
|
Page
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| 9. |
THE
MINERAL PROPERTIES
|
| (a) |
(No
Encumbrances):
The Mineral Properties are free from all mortgages, charges, liens
and
other Encumbrances, except for the security granted to the Bank of
Guayaquil.
|
| (b) |
(In
Good Standing):
The Mineral Properties are in good standing and have been properly
maintained and all expenditure and work requirements, rates, rentals
and
other outgoings which have fallen due for performance or payment in
respect of the Mineral Properties have been performed or
paid.
|
| (c) |
(No
Notice of Revocation):
The Company has not received notice of any act or omission which may
render the Mineral Properties subject to cancellation, revocation or
forfeiture, which may cause any term or condition to be amended or
otherwise varied, which may restrict the enjoyment of rights conferred
by
the Mineral Properties or which may prejudice their
renewal.
|
| (d) |
(No
Breach of Conditions):
The Company is not and has never been in breach of any of the terms
and
conditions to which the Mineral Properties are subject, and is not
aware
of any such breach.
|
| (e) |
(No
Claims):
There are no claims, demands, litigation or proceedings pending or
threatened against the Mineral
Properties.
|
| (f) |
(No
royalty) There
are no tribute, production or profit sharing, royalty, carried interest,
toll treatment or smelting, production sale or delivery or similar
agreements or arrangements affecting the any Mineral Property or the
Vendor's interest in the Mineral Properties or any of them or any metals
or minerals which may be derived.
|
| (g) |
(Environmental
Laws) There
is no outstanding notice or order issued under the Environmental Law
of
any government, governmental body or authority, the implementation
of
which (whether by force of law or voluntarily) might materially and
adversely affect the Mineral Properties or impose an Environmental
Liability in relation to the Mineral
Properties.
|
| (h) |
(Environmental
Laws) To
the best of the Vendors knowledge, the Company has complied with the
requirements of each government, governmental body or authority having
authority in relation to Environmental Law and land owner matters in
respect of the Mineral Properties.
|
| 10. |
ABSENCE
OF LITIGATION
|
| (a) |
(No
current litigation):
Neither the Company nor any person for whom it may be vicariously liable
is engaged in any capacity in any prosecution, litigation, arbitration
proceedings or administrative or governmental challenge or investigation
(Litigation).
|
| (b) |
(No
pending Litigation):
There is no Litigation pending, threatened, anticipated or contemplated
against the Company or any person for whom it may be vicariously
liable.
|
Page
- 26
| (c) |
(No
facts giving rise to Litigation):
No fact or circumstance exists which may give rise to any Litigation
which
could materially affect the ability of the Company continuing to operate
its Business.
|
| (d) |
(No
outstanding judgments):
There are no unsatisfied or outstanding judgments, orders, decrees,
stipulations, or notices affecting the Company or any person for whom
any
of them may be vicariously liable.
|
| 11. |
TAXATION
|
| (a) |
(Compliance):
The Company has duly complied with all Tax
obligations.
|
| (b) |
(No
dispute):
The Company has not made a false or misleading statement to a taxation
officer in relation to any income or franking year and there is no
unresolved dispute with any Revenue Authority involving the
Company.
|
| (c) |
(Other
tax returns filed):
All necessary information, declarations, certificates, notices, returns
and any other required lodgements in respect of Taxes, have been properly
and duly submitted by the Company to all relevant Revenue Authorities
in
respect of Tax. The Company has not made a false or misleading statement
in relation thereto and there is no unresolved dispute with any Revenue
Authority involving the Company, nor are there any facts or circumstances
which might give rise to any dispute.
|
| (d) |
(All
other taxes assessed and paid):
All Taxes which have been assessed or imposed or which are deemed to
have
been assessed or imposed or which are lawfully assessable or payable
by or
upon the Company which were due and payable as at the Last Accounts
Balance Date have been paid or remitted to the relevant Revenue Authority
by the Company.
|
| (e) |
(No
penalty or fine paid or payable):
The Company has not in the past five years paid or become liable to
pay,
nor are there any circumstances by reason of which the Company is likely
to become liable to pay, any penalty, fine or interest with respect
to any
Tax under any legislation.
|
| (f) |
(No
tax audit or investigation conducted):
The Company has not in the past five years suffered any investigation,
audit, visit or written request for the production of information by
any
Revenue Authority except for routine surveillance visits in the ordinary
course of business. The Company has not been notified of nor is aware
of
any such proposed investigation, audit, visit or
request.
|
| (g) |
(No
non-arm's length transactions):
The Company has not been a party to nor has participated in any non-arm's
length transaction that could be affected by the exercise of discretionary
powers of the relevant Revenue Authority.
|
| (h) |
(No
tax avoidance):
The Company has not been a party to nor has participated in transactions
or arrangements that could give rise to the exercise by the Relevant
Authority of its powers in relation to losses and outgoings incurred
under
tax avoidance schemes, or in relation to international agreements or
schemes to reduce income tax, or any other discretionary powers of
the
relevant Revenue Authority by virtue of which transactions or arrangements
entered into by the Company may be re-opened, revised or given an
interpretation different from that adopted by the
Company.
|
Page
- 27
| (i) |
(Tax
file numbers):
The Company has duly complied with all obligations imposed in relation
to
the quotation of tax file numbers by employees of the Company and the
deduction by the Company of tax
instalments.
|
| (j) |
(Income
tax returns filed):
The Company has filed all Tax returns for the income year, franking
year
and tax periods covered by the Last Accounts and for all previous years,
together with any applicable certificates, notices, declarations and
any
other lodgements whether mandatory or otherwise in the interests of
the
Company; all such returns were correct and on a proper basis, and no
dispute exists in relation to any of them, nor are there any facts
or
circumstances which might give rise to any
disputes.
|
| (k) |
(All
income tax assessed and paid):
All Tax for the income year, franking year and tax periods covered
by the
Last Accounts and all prior income, franking years and tax periods
which
have been assessed or imposed or which is deemed to have been assessed
or
imposed or which is lawfully assessable or payable by or upon the Company
has been duly assessed and paid.
|
| (l) |
(Proper
records kept):
All documents and records have been kept and maintained in compliance
with
all Statutes including, without limitation, all records required in
relation to the franking account balance of the Company and records
necessary to permit the ascertainment of all information required in
relation to capital gains and capital losses including net capital
gains
and net capital losses and records necessary to attribute the goods
and
services tax paid and payable on taxable supplies to a tax period and
to
attribute all creditable acquisitions to a tax period and to claim
an
input tax credit, in respect of all creditable
acquisitions.
|
| 12. |
MATERIAL
DISCLOSURE
|
| (a) |
(All
material information):
Any information known or which should be known to the Purchaser concerning
the Company which might reasonably be regarded as material to a purchaser
for value of the:
|
| (i) |
Sale
Shares; or
|
| (ii) |
the
Mineral Properties,
|
has
been
disclosed in writing to the Purchaser.
| (b) |
(True,
complete and accurate):
All information concerning the Company, the Mineral Properties or the
Sale
Shares is true, complete and accurate in all respects, and is not
misleading or deceptive.
|
| (c) |
(No
material error or misstatement):
No representation, warranty or document made or furnished by the Company
in connection with this Document contains any material error or
misstatement nor does it omit to state any material
fact.
|
| (d) |
(No
adverse acts):
Nothing has been done or omitted to be done in relation to the Sale
Shares
by the Company which might materially adversely affect the interests
of
the Purchaser as an intending purchaser of the Sale
Shares.
|
Page
- 28
| (e) |
(Forecasts
and projections):
All the forecasts and projections (if any) that have been disclosed
to the
Purchaser:
|
| (i) |
were
made after due and careful consideration on the part of the
author;
|
| (ii) |
are
based on information which the author reasonably believed was reliable;
and
|
| (iii) |
are
fair and reasonable in the circumstances prevailing at the time such
forecasts and projections were made and in light of the assumptions
made
which were in turn fair and reasonable.
|
Page
- 29
SCHEDULE
3
LAST
ACCOUNTS
Page
- 30
