Exhibit 10.4
DATED December 3, 1998
(1) TOUCAN MINING LIMITED
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(2) TOUCAN GOLD CORPORATION INC
- and -
(3) ANAGRAM LIMITED
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AGREEMENT
for the sale and purchase of the whole of
the issued share capital of MINERADORA DE BAUXITA LTDA
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MATHESON ORMSBY PRENTICE
POUNTNEY HILL HOUSE
6 LAURENCE POUNTNEY HILL
LONDON EC4R 0BL
TEL: 0171 404 0998
FAX: 0171 583 5644
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INDEX
Clause No. Heading Page No.
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1. Interpretation 1
2. Sale and Purchase 4
3. Consideration 4
4. Completion Arrangements 4
5. Representations, Warranties and Indemnities 5
6. Discharge from Indebtedness 6
7. Secrecy 6
8. General 6
9. Notices 7
10. Law 7
SCHEDULE I Particulars of the Company 8
SCHEDULE II Representations and Warranties 9
SCHEDULE III Completion Arrangements 10
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THIS AGREEMENT is made the 3rd day of December, 1998.
BETWEEN:
(1) TOUCAN MINING LIMITED, a private limited company incorporated under the
laws of Isle of Man whose registered office is at Celtic House,
Douglas, Isle of Man (the "Vendor"); and
(2) TOUCAN GOLD CORPORATION INC., a corporation existing under the laws of
the State of Delaware, and whose Principal Executive Offices are
situate at 8201 Preston Road, Suite 600, Dallas, Texas 75225, USA (the
"Parent"); and
(3) ANAGRAM LIMITED, a private limited company incorporated under the laws
of the Isle of Man whose registered office is at Celtic House, Victoria
Street, Douglas, Isle of Man (the "Purchaser").
WHEREAS:
(A) Mineradora de Bauxita Ltda ("the Company") is a private company
limited by shares incorporated under the laws of Brazil, the particulars whereof
are set out in Schedule I;
(B) The Vendor is the legal and beneficial owner of the whole of the
issued share capital of the Company (hereafter referred to as the "Shares"); and
(C) Upon the exercise by the Purchaser of an option granted by the
Vendor to the Purchaser pursuant to an option agreement dated December 1998
between the Vendor, the Parent and the Purchaser, the Vendor has agreed to sell
and the Purchaser has agreed to purchase the Shares on the terms and subject to
the conditions hereinafter contained.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement and the Schedules hereto the following
words and expressions shall have the following meanings:
"Completion" completion of the obligations of the parties
required by Clause 5 and Schedule III;
"Consideration" the consideration for the Shares payable by
the Purchaser to the Vendor in accordance
with Clause 3;
"the Inter-Company Debt" all monies due and owing by the Company to
the Parent as evidenced more particularly in
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the Loan Note (as such term is defined in the
Option Agreement);
"the Option Agreement" the agreement between the
Vendor, the Parent and the Purchaser
dated December 1998 under which
inter alia the Vendor granted the
Purchaser an option to purchase
the Shares;
"p" sterling pennies;
"person" any individual, firm, company or other
incorporated or unincorporated body;
"the Purchaser's Solicitors" Matheson Ormsby Prentice of Pountney Hill
House, 6 Laurence Pountney Hill, London
EC4R 0BL;
"the Shares" all of the issued ordinary shares in the capital
of the Company legally and beneficially
owned by the Vendor;
"the Vendor's Solicitors" Walsh Lawson of 54-62 Regents Street,
London W1R 5PJ;
"the Warranties" the representations, warranties and
undertakings set out in Schedule 2 hereto;
"the Warrantors" the Vendor and the Parent;
"in writing" includes any communication made by letter,
cablegram, telex, facsimile transmission or
electronic mail;
"$, US$" dollars, the lawful currency of the United
States;
"(British Pound)" sterling pounds, the lawful currency of the
United Kingdom;
"R$" Reals, the lawful currency of Brazil.
1.2 In this Agreement references to statutes, by-laws,
regulations and delegated legislation shall include any statute, by-law,
regulation or delegated legislation modifying, reenacting, extending or made
pursuant to the same or which is modified, re-enacted, or extended by the same
or pursuant to which the same is made.
1.3 A document is in "the agreed form" if it is in the form of
a draft agreed between and initialled by or on behalf of the parties hereto on
or before the date hereof.
1.4 The Schedules to this Agreement are an integral part of
this Agreement and references to this Agreement include references to such
Schedules.
1.5 References in this Agreement to Clauses, Sub-Clauses,
paragraphs and Schedules are references to those contained in this Agreement.
1.6 All representations, warranties, covenants, undertakings,
agreements and obligations given or entered into by the Warrantors hereunder are
given or entered into jointly and severally and the act or default of any of the
Warrantors shall be deemed to be the act or default (as the case might be) of
all of the Warrantors;
1.7 Unless the context otherwise requires and unless otherwise
specified, for the purpose of construction of the Warranties insofar as the
Company carries on any part of its business in a jurisdiction outside England
and Wales, the references to any statutory provision enacted or accounting
principles applying in England and Wales shall be deemed to include references
to any corresponding or equivalent provision in the local legislation in force
or generally accepted accounting principles applying where the Company so
carries on business and the references to any governmental or administrative
authority or agency shall include references to the equivalent local government
or administrative authority or agency.
2. SALE AND PURCHASE
2.1 The Vendor as beneficial owner shall sell and the
Purchaser shall purchase for the Consideration the Shares on and with effect
from Completion free from any lien, charge, encumbrance, claim, option or equity
and together with all dividends, benefits and other rights and privileges
accruing or attaching thereto at or in respect of any period after Completion
whether accruing or attaching before or after the date of this Agreement.
2.2 Neither the Vendor nor the Purchaser shall be obliged to
complete the sale and purchase of any of the Shares unless the sale and purchase
of all the Shares is completed simultaneously in accordance with provisions of
this Agreement.
2.3 The Vendor hereby waives any and all pre-emption rights
which it may have in relation to the sale of any of the Shares to the Purchaser
hereunder whether arising under the constituent documentation of the Company or
otherwise.
2.4 On completion the Purchaser shall employ Mr David
Carmichael on terms satisfactory to him which shall be substantially similar to
those in the form of the existing Agreement dated 1 April 1997 of which a copy
has been supplied to the Purchaser subject to the
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caveat that the Purchaser shall be under no obligation to extend to Mr David
Carmichael any terms that shall be more onerous upon the Purchaser in terms of
its obligations than those that persist pursuant to the existing Agreement
referred to herein.
3. CONSIDERATION
The consideration ("the Consideration") for the sale and purchase
hereunder of the Shares shall be the payment by the Purchaser to the Vendor of
US$2,500,000 which shall be paid by bank draft to the Vendor's Solicitors upon
Completion hereof.
4. COMPLETION ARRANGEMENTS
4.1 Completion shall take place at the offices of the Vendors
Solicitors or such place as shall be reasonably acceptable to both parties at
and at Completion each of the parties shall fulfil the obligations imposed upon
it by Schedule III.
4.2 The Vendor shall (and shall procure that all other
necessary parties shall) on and at all times after Completion execute and do all
such deeds, documents, acts and things as the Purchaser shall reasonably require
at or after Completion for assuring to or vesting in the Purchaser or its
nominees the full beneficial ownership of and legal title to the Shares and to
such dividends, rights and privileges which are agreed to be sold and purchased
hereunder and otherwise for carrying into effect the terms of this Agreement.
5. REPRESENTATIONS, WARRANTIES AND INDEMNITIES
5.1 The Warrantors hereby represent, warrant, undertake and
agree to and with the Purchaser in the terms of Schedule II and such
representations, warranties, undertakings and agreements shall be separate and
independent of each other shall continue in full force and effect hereafter
notwithstanding Completion and shall be and be deemed to be made and given and
shall have effect both at the date hereof and immediately prior to Completion by
reference to the circumstances subsisting at that time.
5.2 The parties acknowledge that the Purchaser is entering
into this Agreement in reliance on the Warranties and that the Purchaser is
entering into this Agreement with the intention that the business of the Company
shall or may be continued as a going concern utilising all the assets subject
only to the liabilities to which the Company would on Completion, in accordance
with the terms of this Agreement, be entitled and bound and also on the basis
that all the Warranties are true, accurate and not misleading in any respect.
5.3 The Warrantors shall not allow or procure any act or
omission on or before Completion which would constitute a breach of any of the
representations, warranties, undertakings or agreements contained in this
Agreement and the Warrantors undertake both before and after Completion fully
and promptly to notify the Purchaser in writing of any matter or thing which is
or might be a breach or non-fulfilment of or inconsistent with any of the same
or which would or might entitle the Purchaser to rescind this Agreement or claim
damages under it.
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5.4 Each of the Warranties shall be construed as separate and
independent and save as otherwise expressly provided shall not be limited by
reference to any other warranty, clause, sub-clause, paragraph, sub-paragraph or
any provision in this Agreement or the Schedules.
5.5 The Warrantors hereby covenant with and undertake to the
Purchaser to fully and promptly notify the Purchaser in writing of any matter or
thing which may arise or became known to all or any of them after the date
hereof which is or might with a lapse of time be a breach of any of the
Warranties.
5.6 Without prejudice to the foregoing provisions of this
Clause the Warrantors hereby agree to indemnify and keep indemnified the
Purchaser from and against all claims, demands, actions, damages, losses
(including loss of profit), liabilities, penalties and expenses sustained by the
Purchaser and/or any other such person directly or indirectly in respect of any
breach by the Vendor of any of the above provisions of this Clause and Schedule
II.
6. DISCHARGE OF INDEBTEDNESS
The Vendor shall procure on or before Completion that save for the
Inter-Company Debt, the Company shall be released from all debts and obligations
of any kind owed or outstanding to, and from all guarantees, indemnities,
mortgages and surety and security arrangements of any kind given by the Company
in favour of, and all rights of subrogation arising against the Company from the
Vendor or the Parent.
7. SECRECY
The Vendor hereby undertakes to the Purchaser that the Vendor shall not
at any time hereafter save with the prior consent in writing of the Purchaser
(which shall not be unreasonably withheld) or as may be required by law or any
regulatory requirements divulge or communicate to any person other than to
directors, officers, employees or professional advisers of the Vendor or the
Parent whose province it is to know the same or its shareholders any secret or
confidential information concerning the Company or of any customer or client of
the Company save to the extent to which such information shall come within the
public domain other than through any unauthorised disclosure by the Vendor or
any Associate thereof.
8. GENERAL
Save as is herein provided no failure or delay by the Vendor or the
Purchaser in exercising any right, power or privilege under this Agreement shall
operate as a waiver thereof nor shall any single or partial exercise by the
Purchaser or the Vendor of any right, power or privilege preclude any further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided are cumulative and not exclusive of any
rights and remedies provided by law.
9. NOTICES
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9.1 Any notice or other communication given or made under this
Agreement shall be in writing and may be delivered to the relevant party or sent
by first class prepaid letter, or telex or facsimile transmission to the address
of that party specified in this Agreement or to that party's telex or facsimile
transmission number thereat or such other address or number as may be notified
hereunder by that party from time to time for this purpose and shall be
effectual notwithstanding any change of address not so notified.
9.2 Unless the contrary shall be proved, each such notice or
communication shall be deemed to have been given or made and delivered, if by
letter, 48 hours after posting, if by delivery, when left at the relevant
address and, if by telex or facsimile transmission, when transmitted.
10. LAW
10.1 This Agreement shall be governed by and construed in all
respects in accordance with the laws of England and the parties agree to submit
to the non-exclusive jurisdiction of the English Courts as regards any claim or
matter arising in relation to this Agreement.
IN WITNESS whereof this Agreement has been duly executed the day and
year first above written.
TOUCAN MINING LIMITED
By: /s/ R.P. Jeffcock
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R.P. Jeffcock
TOUCAN GOLD CORPORATION
By: /s/ R.P. Jeffcock
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R.P. Jeffcock
ANAGRAM LIMITED
By: /s/ David Walsh
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David Walsh
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SCHEDULE 1
Particulars of the Company
Date of Incorporation: 8 July 1971
Place of registration: Junta Comercial do Para, Brazil
Company Registration Number: 15.20002983-8
Authorised Share Capital: R$10,000
Issued Share Capital: 10,000 quotas of R$1.00 each all beneficially held by the
Vendor, the legal ownership of one quota being held by
Mr. Carlos Eduardo Lins e Silva.
Director: Mr. Igor Mousasticoshvily, Rua Figueiredo Magalhaes,
421, Apartamento 301, Rio de Janeiro, RJ.
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SCHEDULE II
Representations and Warranties
1. The Vendor shall sell the Shares as beneficial owner and hereby
warrants that the Purchaser shall obtain a good title to the Shares
free from all liens charges encumbrances or other security interest of
whatsoever nature.
2. The Shares are fully paid up and neither the Company nor any third
party has exercised or purported to exercise or claimed any lien over
any of them, in addition, no person has the right to call for the issue
of any share or loan capital of the Company by reason of any conversion
rights or under any option or other agreement.
3. The last filed relevant Form 10QSB or 10KSB prior to the exercise of
the Option pursuant to the Option Agreement is true and correct in all
material respects.
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SCHEDULE III
Completion Arrangements
At Completion:
1. Board Meetings
The Vendor shall procure that a Board Meeting of the Company is duly
convened and held at which valid resolutions are passed:
(a) that the transfers referred to in paragraph 2 below be
approved, and that the Purchaser be forthwith placed on the
register of members of the Company as the holder of the
Shares;
(b) that there be appointed as directors and secretary of the
Company such persons as the Purchaser may nominate;
(c) that the resignations of the directors and secretaries and
auditors referred to in paragraph 2 below be accepted; and
2. A Board Meeting of the Purchaser is duly convened and held at which
valid resolutions are passed approving the purchase of the Shares and
the entering into of this Agreement and any other documents to be
entered into by the Purchaser and authorising such persons signing on
the Purchaser's behalf to do so;
3. Delivery by the Vendor
The Vendor shall deliver to the Purchaser's Solicitors:
(a) copies certified as correct by the Secretary of the Company of
the resolutions passed at the Board Meetings referred to in
paragraph 1 above;
(b) duly executed transfers of the Shares in favour of the
Purchaser or its nominees together with the relevant share
certificates;
(c) any powers of attorney or other authorities under which any
transfers have been executed which shall be duly stamped and
executed;
(d) the statutory books, certificate(s) of incorporation and of
incorporation on change of name, up to date as at Completion,
and the Common Seal of the Company.
4. Delivery by the Purchaser
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The Purchaser shall deliver to the Vendor's solicitors the payment of
such funds as required pursuant to Clause 3 hereunder.
5. Release of Sureties, etc.
The Vendor shall procure that the Company be released from any
guarantee, surety, indemnity, mortgage, charge or other security given
by it in respect of all or any of the obligations of the Vendor or any
shareholder, director, officer or employee of the Vendor.
PRESENT when the COMMON SEAL )
WAS AFFIXED HERETO )
by TOUCAN MINING LIMITED )
in the presence of: )
Director:
Director/Secretary:
EXECUTED by duly authorized officers of )
TOUCAN GOLD CORPORATION INC. )
in accordance with its by laws and constitution )
PRESENT when the Common Seal of )
ANAGRAM LIMITED )
was affixed hereto in the presence of: )
Director:
Director/Secretary:
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SCHEDULE 3
Loan Note
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SCHEDULE 4
Assignment of Loan Note
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SCHEDULE 5
Details of the Claims
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SCHEDULE 6
Foreign Counsels' Opinions
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PRESENT when the Common Seal of )
TOUCAN MINING LIMITED )
was affixed hereto )
EXECUTED by duly authorized )
officers of TOUCAN GOLD )
CORPORATION INC. )
in accordance with its bylaws )
and constitution )
PRESENT when the Common Seal )
of ANAGRAM LIMITED )
was affixed hereto )
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SCHEDULE II
The Supplemental Agreement
(Omitted. See Exhibit 10.2)
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