SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) June 9 , 1999
--------------------------------
TOUCAN GOLD CORPORATION
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(Exact name of registrant as specified in charter)
Delaware 33-28562 75-2661571
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No
8201 Preston Road, Suite 600, Dallas, Texas 75225
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (214) 890-8065
-----------------------------
--------------------------------------------------
(Former name or former address, if changed since last report)
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<PAGE>
Item 2. Acquisition or Disposition of Assets
------------------------------------
On July 15, 1999, Toucan Gold Corporation (the "Company") completed the
sale of all of the share capital of Mineradora de Bauxita Ltda. ("MBL"), the
Brazilian subsidiary through which the Company's Brazilian exploration
activities had been conducted. As reported in a Current Report on Form 8-K,
filed with the Securities and Exchange Commission on January 5, 1999 (the
"January 8-K"), the Company on December 4, 1998 consummated certain
transactions, involving, among other things, the grant of an option (the "MBL
Option") to Minmet PLC ("Minmet"), an Irish company, whose shares are quoted on
the Exploration Securities Market of the Irish Stock Exchange, to purchase all
of the issued share capital of MBL.
Toucan Mining Limited ("TML"), the Company's wholly-owned subsidiary
that was the beneficial owner of the issued share capital of MBL at such time,
granted the MBL Option to Minmet to acquire all of the issued share capital of
MBL. TML received 7.5 million ordinary shares (the "Option Shares") in Minmet
solely for TML granting the MBL Option.
On June 30, 1999, Minmet exercised the MBL Option. The exercise of the
MBL Option was consummated on July 15, 1999 and in connection therewith Minmet
has acquired all of the issued share capital of MBL by issuing an additional 25
million ordinary shares (the "Completion Shares") in Minmet to TML.
Additionally, as reported in the January 8-K, the sale and distribution
of the Completion Shares are restricted without Minmet's consent as follows: TML
or the Company may sell up to 3 million of the Completion Shares in each of the
three six (6) month periods after the issuance thereof. Any Completion Shares
not disposed of in a six (6) month period may be added to the number of
Completion Shares that may be sold in later periods.
Minmet has agreed that the Completion Shares may be placed through
Minmet's brokers with Minmet's consent and that it will act reasonably in
respect of all such requests by the Company or TML in connection with the sale
of the Completion Shares.
Finally, on December 4, 1998, the Company granted an option (the "Loan
Option") to Minmet to acquire from the Company the benefit of the loans that it
has made to MBL in the principal amount of $1 million. The Company received the
sum of U.S. $275,000 solely for the Company granting the Loan Option. On June
30, 1999, Minmet exercised the Loan Option. The exercise of the Loan Option was
consummated on July 15, 1999 and in connection therewith Minmet paid the Company
$250,000 and issued to the Company warrants (the "Warrants") to subscribe for a
further 7.7 million Ordinary Shares (the "Warrant Shares") of Minmet at an
exercise price of (sterling) 8 pence per share.
Following the consummation of the MBL Option and the Loan Option, TML
retained the claim in the Cuiaba Basin of Brazil that has been delivered to TML
pursuant to the Agreement of Settlement and Release with Joseph J. Haraoui (as
described in Item 5 hereof) and its rights pursuant to such agreement to acquire
the other six (6) claims in the Cuiaba Basin of Brazil.
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<PAGE>
On July 16, 1999, the Board of Directors of the Company approved the
spin-off of all of the outstanding shares (the "TML Shares") of TML to the
stockholders of the Company. The TML shares will be distributed on a share for
share basis to holders of Common Stock as of the record date. The record date
for determining the holders of Common Stock entitled to the distribution of the
TML Shares has been set for August 3, 1999. Pursuant to Delaware corporate law,
if the distribution of the TML Shares is not consummated within 60 days of such
date a new record date will be selected. The date of the distribution of the TML
Shares has not been determined because the consummation of the distribution of
the TML Shares is dependent upon the satisfaction of the following conditions:
(i) the conversion of TML into a public limited company under Isle of Man law
and the change of its name from Toucan Mining Limited to Toucan Mining Plc; (ii)
the registration of the TML Shares under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"); and (ii) the furnishing of an Information
Statement to the stockholders as of the record date describing TML and the
distribution of the TML Shares that substantially complies with Regulation 14C
under the Exchange Act.
Item 5. Other Events
------------
In September 1996, the Company entered into an agreement (the "Claims
Agreement") to acquire from Joseph J. Haraoui twenty-five (25) priority claims
(the "Claims") in the Cuiaba Basin of Brazil. Subsequently, there was a dispute
between the Company and Mr. Haraoui relating to the Claims and the amount and
nature of the consideration that was to be paid by the Company to Mr. Haraoui in
connection with the delivery of the Claims. On June 9, 1999, the Company (and
related parties) seeking to resolve this dispute entered into an Agreement of
Settlement and Release (the "Agreement") with Mr. Haraoui and related parties
(collectively "Haraoui") to settle all disputes between the Company and Haraoui
relating to the Claims.
Pursuant to the terms of the Agreement, Haraoui released the Company
and certain related parties, including the officers and directors of the Company
and MBL, from all claims or liabilities relating to the Claims. The Company
delivered to Haraoui an aggregate of 250,000 shares of the Company's common
stock, par value $0.01 per share (the "Common Stock"). The Agreement
acknowledged that Haraoui was entitled to receive 210,000 shares (the "Initial
Shares") of Common Stock pursuant to the Claim Agreement and, therefore, the
Company acknowledged that the holding period for purposes of Rule 144
promulgated pursuant to the Securities Act of 1933, as amended, with respect to
the Initial Shares had commenced on the date of the Claims Agreement. In
addition, TML paid to Haraoui a cash payment of U.S. $50,000.
Pursuant to the terms of the Agreement, Haraoui delivered to TML the
seventh (7th) claim on Exhibit A to the Agreement and agreed to use his best
efforts to deliver to TML (or its assignee) all of the first six (6) claims
described on Exhibit A to the Agreement, certified by the Departamento Nacional
De Produca Mineral ("DNPM"), with priority, having good, clean and transferrable
title and published by the Brazilian authorities in the Government Gazette (each
a "Certified Claim" and collectively the "Certified Claims"). Further, it was
agreed that prior to June 30, 2002 (the "Termination Date"), Haraoui would not
pledge, sell, give an option to purchase, contract to sell or otherwise assign
any of the above-referenced claims to any person or entity other than TML (or
its assignees).
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TML agreed to pay to Haraoui or Haraoui's nominee an additional cash
payment of U.S.$20,000 for each Certified Claim that is delivered to TML. If a
claim referenced on Exhibit A to the Agreement was not delivered to TML as a
Certified Claim on or before the Termination Date, TML would have no obligation
whatsoever to make any payment to Haraoui with respect to such claim.
Item 7. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information Page
Pro Forma Unaudited Balance Sheet F-1
as of March 31, 1999
Notes to Pro Forma Financial F-2
Statements (unaudited)
(c) Exhibits
10.1* Agreement of Settlement and Release, dated
June 9, 1999, by and among Joseph J. Haraoui,
Toucan Gold Corporation and Toucan Mining
Limited.
10.2(1) Agreement for the sale and purchase of the
whole of the issued share capital of Anagram
Limited, dated December 3, 1998, among Toucan
Mining Limited, Toucan Gold Corporation, Inc.
and Minmet Plc (Exhibit 10.1).
10.3(1) Supplemental Agreement, dated December 3,
1998 among Toucan Mining Limited, Toucan Gold
Corporation, Inc., and Minmet Plc (Exhibit
10.2).
10.4(1) Option Agreement Regarding Mineradora De
Bauxita Ltda, dated December 3, 1998, among
Toucan Mining Limited, Toucan Gold
Corporation, Inc. and Anagram Limited
(Exhibit 10.3).
10.5(1) Agreement for the purchase of the whole of
the issued share capital of Mineradora de
Bauxita Ltda, dated December 3, 1998 among
Toucan Mining Limited, Toucan Gold
Corporation, Inc. and Anagram Limited
(Exhibit 10.4).
10.6(1) Form of Minmet Plc Warrant Instrument
(Exhibit 10.5).
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<PAGE>
(1) Incorporated by reference to the exhibit
shown in parenthesis included in the
Company's Current Report on Form 8-K, filed
by the Company with the Securities and
Exchange Commission on January 5, 1999.
* Filed herewith
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TOUCAN GOLD CORPORATION
(Registrant)
Date: July 30, 1999 By: /s/ Robert A. Pearce
-----------------------
Robert A. Pearce
Chief Financial Officer
6
<PAGE>
<TABLE>
<CAPTION>
Toucan Gold Corporation
PRO FORMA UNAUDITED BALANCE SHEET
Pro forma
Actual adjustments - Pro forma
March 31, increase March 31,
ASSETS 1999 (decrease) 1999
------ ------------ ------
<S> <C> <C> <C> <C>
Cash $ 14,439 (2) $ (12,382) $ 252,057
(1) 250,000
Investment in Minmet Plc - (1) 1,380,400 774,200
(2) (606,200)
Receivable and other assets 133,156 (2) (158) 132,998
-------- ----- --------
Total current assets 147,595 1,011,660 1,159,255
Investment in Minmet Plc, less current portion - (1) 1,769,600 718,900
(2) (1,050,700)
Investment in Toucan Mining Limited - (2) 1,597,964 1,597,964
Mineral rights 2,589,869 (1) (2,589,869) -
---------- ---------- ---
$ 2,737,464 $ 738,655 $3,476,119
========== ======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Amounts payable to related parties $ 24,476 (2) $ (24,476) $ -
Accrued expenses and other liabilities 201,454 (2) (47,000) 154,454
-------- -------- --------
Total current liabilities 225,930 (71,476) 154,454
Stockholders' equity
Preferred stock, par value $.01 per share; authorized,
2,000,000 shares; issued and outstanding, none - -
Common stock, $.01 par value per share; authorized
30,000,000 shares; issued and outstanding,
8,237,933 shares 82,379 82,379
Additional paid-in capital 4,526,226 4,526,226
Accumulated deficit (2,097,071) (1) 810,131 (1,286,940)
---------- -------- ----------
Total stockholders' equity 2,511,534 810,131 3,321,665
---------- -------- ----------
$ 2,737,464 $ 738,655 $3,476,119
========== ======== =========
</TABLE>
The accompanying notes are an integral part of these statements.
F-1
<PAGE>
Toucan Gold Corporation
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(unaudited)
NOTE A - GENERAL
On June 30, 1999, Minmet Plc (Minmet) exercised its option to acquire all of
the issued share capital of Mineradora de Bauxita Ltda. (MBL), a subsidiary
of Toucan Mining Limited (TML) which is a subsidiary of Toucan Gold
Corporation (Toucan Gold). All of the Company's exploration activities had
been conducted through MBL. Minmet also exercised its option to acquire
loans made from Toucan Gold to MBL in the principal amount of $1,000,000.
Consideration due under the option, which consisted of (1) 25,000,000 Minmet
Ordinary Shares, (2) $250,000 in cash and (3) warrants to purchase 7,700,000
Minmet Ordinary Shares for (pound).08 per share, was paid in July 1999.
On July 16, 1999, the Board of Directors of Toucan Gold approved the
spin-off of all of the outstanding common shares of Toucan Mining to the
Toucan Gold stockholders. Record date for the spin-off is August 3, 1999;
provided, however, that the record date will be effective only if the
spin-off is effected with 60 days of the record date.
The accompanying pro forma balance sheet gives effect to the sale of MBL as
though it had occurred on March 31, 1999. The pro forma balance sheet
presents Toucan Gold's investment in Toucan Mining on the equity method of
accounting because of the spin-off of Toucan Mining.
As a result of the sale of MBL and the spin-off of Toucan Mining, Toucan
Gold will have no operations. On July 22, 1999, Toucan Gold acquired all of
the outstanding capital shares of ITIS Technologies Limited
(ITIS), a U.K. company. Consideration given was 4,680,375 Toucan Gold common
shares, which shares are to be issued within 20 days of the closing. Upon
issuance of such shares, the ITIS shareholders will own 34% of the common
stock of Toucan Gold, not including outstanding options or warrants. ITIS is
a software development company offering business to business software to
facilitate secure Internet transactions. The transaction with ITIS will
deemed to be a recapitalization of ITIS for accounting purposes.
F-2
<PAGE>
Toucan Gold Corporation
NOTES TO PRO FORMA STATEMENTS - CONTINUED
NOTE B - PRO FORMA ADJUSTMENTS
<TABLE>
<CAPTION>
(1) To reflect the sale of MBL and MBL's debt held by to the Company:
<S> <C> <C>
Proceeds:
Shares of Minmet Plc $ 2,765,000
Minmet Plc warrants 385,000
Cash 250,000
--------
3,400,000
Cost of investment in MBL and MBL's debt (2,589,869)
----------
Gain $ 810,131
========
</TABLE>
<TABLE>
<CAPTION>
(2) To reclassify the accounts of Toucan Mining to the equity method of
accounting, because of the proposed spin-off of 100% of the equity
ownership of Toucan Mining, and to allocate the proceeds of sale
between Toucan Gold and Toucan Mining.
<S> <C> <C> <C> <C>
Allocated to
-----------------------------
Form of proceeds Total Toucan Gold Toucan Mining
---------------- ------------ ----------- -------------
Cash $ 250,000 $ 250,000 $ -
Shares of Minmet Plc 2,765,000 1,493,100 1,271,900
Minmet Plc warrants 385,000 - 385,000
----------- ---------- ----------
$3,400,000 $1,743,100 $1,656,900
</TABLE>
For purposes hereof, shares of Minmet Plc were valued at (sterling) 7
pence per share based on the trading price of shares of Minmet Plc on
the Irish Stock Exchange, as of June 30, 1999, of (sterling) 8.25
pence per share and taking into account the restrictions on transfer
of the Minmet Plc shares applicable to Toucan Gold and Toucan Mining.
F-3
Exhibit 10.1
<PAGE>
AGREEMENT OF SETTLEMENT AND RELEASE
This Agreement of Settlement and Release (this "Agreement") is entered
into by Joseph J. Haraoui, for himself and for his affiliates, predecessors,
successors, assigns, heirs and beneficiaries, including but not limited to,
Tamin Mineracao Ltda. ("Tamin"), Mineracao Luzema Ltda., Mineracao Italia Ltda.
and Cedro Mineracao Ltda., and all other persons, firms and entities relating to
such persons or entities, and each of them (collectively referred to herein as
"Zuzu"), Toucan Gold Corporation, a Delaware Corporation, and its subsidiaries
("TGC") and Toucan Mining Limited, an Isle of Man corporation, and its
subsidiaries ("TML") TGC and TML shall be collectively referred to herein as
"Toucan." Zuzu and Toucan are collectively referred to herein as the "Parties."
WHEREAS, in September of 1996, TGC entered into an agreement to acquire
from Zuzu twenty-five (25) priority claims (the "Claims") in the Cuiaba Basin of
Brazil (the "Claims Agreement");
WHEREAS, certain terms of the Claims Agreement were set forth in that
certain Termo de Compromiso, dated September 24, 1996, by and between Igor
Mousasticoshvily, Sr., on behalf of TGC and Zuzu, on behalf of Tamin, that
certain Procuracao, dated September 26, 1996, executed by Zuzu on behalf of
Tamin and that certain Letter from Roy G. Williams and addressed to Igor
Mousasticoshvily, dated as of February 22, 1996;
WHEREAS, there has been a dispute between the Parties relating to the
Claims and the amount that is to be paid by TGC to Zuzu in connection with the
delivery of the Claims; and
WHEREAS, in consideration of the terms and conditions set forth in this
Agreement, which have been agreed to by the Parties, the Parties desire to
settle and release all disputes relating to the Claims which the Parties have or
may have with one another.
NOW, THEREFORE, for and in consideration of the terms and conditions
described below and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby agree as
follows:
1. Zuzu, shall and hereby does fully RELEASE, REMISE, CANCEL, ACQUIT
and FOREVER DISCHARGE Toucan and its affiliates, predecessors, successors,
assigns, attorneys and members, and their respective partners, members (and any
affiliates thereof), officers, shareholders, managers, directors, agents,
contractors, representatives, employees and attorneys, including but not limited
to, Mineradora de Bauxita Ltda., an authorized mining company organized under
the laws of Brazil, and its subsidiaries ("MBL"), Roy G. Williams ("Williams"),
Robert P. Jeffcock ("Jeffcock"), L. Clark Arnold ("Arnold"), Don Box ("Box"),
Robert A. Pearce ("Pearce"), Igor Mousasticoshvily, Sr. ("Mousasticoshvily"),
and the successors and assigns of each of TGC, MBL, TML, Williams, Jeffcock,
Arnold, Box, Pearce and Mousasticoshvily (collectively, the "Released Parties")
from any and all past or present, known or unknown, suspected or unsuspected,
contingent or fixed, past, present or future debts, obligations, claims,
demands, losses, damages, causes of action, rights of action or other
liabilities whatsoever, both in law and in equity (including attorneys' fees and
costs
1
<PAGE>
in connection therewith) relating to the Claims, which such releasing party may
have had or may now have against the Released Parties, or otherwise involving
the Released Parties, in any way resulting from any actions, events or
occurrences prior in time to the date hereof.
2. In connection with the execution and delivery of the Agreement by
the Parties, TGC shall deliver to Zuzu an aggregate of 250,000 shares (the
"Shares") of TGC common stock, par value $0.01 per share (the "Common Stock").
(a) The Parties agree that pursuant to the Claims Agreement, as of
April 1997, Zuzu was entitled to receive 210,000 shares (the "Initial
Shares") of Common Stock. TGC acknowledges that the holding period for
purposes of Rule 144(k) promulgated pursuant to the Securities Act of
1933, as amended (the "Securities Act"), with respect to the Initial
Shares has expired. TGC further acknowledges that Zuzu is not an
affiliate (as such term is defined pursuant to Rule 144) of TGC and has
not been an affiliate of TGC within the preceding three (3) months,
and, therefore, Zuzu shall be entitled to sell the Initial Shares
without registration under the Securities Act pursuant to Rule 144(k),
and the stock certificate evidencing the Initial Shares shall not bear
a restrictive legend.
(b) Zuzu acknowledges that (i) the remaining 40,000 shares (the
"Restricted Shares") of Common Stock comprising the Shares shall be
restricted securities within the meaning of Rule 144; (ii) shall be
subject to the terms and conditions of Rule 144, including the two-year
holding period requirement of Rule 144(k); and (iii) the stock
certificate evidencing the Restricted Shares shall bear a securities
legend reflecting such restrictions. Zuzu further represents that he is
acquiring the Restricted Shares solely for his own account and not with
a view to or for resale in connection with any distribution or public
offering thereof, within the meaning of any applicable securities laws
and regulations, unless such distribution or offering is registered
under Securities Act or an exemption from such registration is
available, including Rule 144(k).
3. In connection with the execution and delivery of the Agreement by
the Parties, TML shall pay to Zuzu, or Zuzu's nominee, a cash payment equal to
U.S. $50,000.
4. The delivery to Zuzu of the certificates evidencing the Shares
referred to in Paragraph 3 hereof and the cash payment referenced to in
Paragraph 4 hereof shall be made on the fifth business day following the
execution of this Agreement by all of the Parties. The date of delivery of such
Certificates and cash payment shall be referred to herein as the Effective Date.
5. Zuzu will use his best efforts to deliver to TML (or its assignee)
all of the seven (7) claims described on Exhibit A, attached hereto, certified
by the Departamento Nacional De Produca Mineral ("DNPM"), with priority, having
good, clean and transferrable title and published by the Brazilian authorities
in the Government Gazette (each a "Certified Claim" and collectively the
"Certified Claims"). Prior to June 30, 2002 (the "Termination Date"), Zuzu shall
not pledge, sell, give an option to purchase, contract to sell or otherwise
assign any of the seven (7) above-referenced claims to any person or entity
other than TML (or its assignees) pursuant to this Agreement.
2
<PAGE>
6. Claim DNPM No. 869.820/96 shall be delivered to TML (or its
assignee) without consideration prior to the delivery to TML (or its assignee)
of any of the other Certified Claims (the "Other Certified Claims") set forth as
Exhibit A hereto.
7. TML shall pay to Zuzu, or Zuzu's nominee, an additional cash
payment of U.S.$20,000 for each Other Certified Claim that is delivered to TML
on the fifth business day after such Other Certified Claim is delivered to TML,
subject to the provisions of Paragraph 8 of this Agreement.
8. If a claim referenced on Exhibit A is not delivered to TML as a
Certified Claim on or before the Termination Date, TML shall have no obligation
whatsoever to make any payment to Zuzu with respect to such claim.
9. This Agreement is the result of disputed matters among the Parties
and is not intended to and does not reflect or constitute an admission or
acknowledgment of any liability or fault by any of the Parties under any theory
of liability.
10. This Agreement reflects the complete agreement of the Parties with
respect to all matters pertaining to the settlement of any and all claims
between any and all of the Parties.
11. The Parties hereto represent and warrant that they (i) have
carefully read this Agreement and know and understand this Agreement's contents
completely, (ii) have had adequate opportunity to be represented and advised by
an attorney of their choice and fully understand their right to discuss all
aspects of this Agreement with such attorney, (iii) are executing this Agreement
of their own free will, act and deed, without being induced to do so in any way
by any of the other Parties, (iv) did not rely, in making this Agreement, on any
statement or representation by any of the persons or entities that are being by
this Agreement, or by any persons representing those persons or entities, other
than as expressly stated in this Agreement, and (v) have not sold, assigned,
transferred, conveyed or otherwise disposed of any or all of the debts,
obligations, claims, demands, losses, damages, causes of action, rights of
action or other liabilities, whether known or unknown, past or present, released
by this Agreement.
12. This Agreement shall not be modified except by further written
agreement among the Parties and only as such written instrument clearly
specifies its intent to amend, modify, or change this Agreement.
13. It is understood and agreed that this Agreement shall be binding
upon and inure to the benefit of all of the Parties and their respective
beneficiaries, heirs, successors and assigns. The undersigned agree and warrant
that the representations and warranties made in this Agreement shall survive the
execution of this Agreement and shall be the continuing representations of the
undersigned.
14. The recitals made herein are incorporated into this Agreement in
their entirety as if set forth verbatim in the body of this Agreement.
3
<PAGE>
15. This Agreement supersedes any and all prior agreements,
understandings, oral or written, among the Parties pertaining to the subject
matter hereof.
16. Should any Party employ an attorney or attorneys to enforce any of
the provisions hereof or to protect its interest in any manner arising under or
relating to this Agreement, or to recover damages for breach of this Agreement,
the non-prevailing Party or Parties in any action pursued in a court of
competent jurisdiction (the finality of which is not legally contested) agree(s)
to pay, jointly or severally, to the prevailing Party or Parties all reasonable
costs, damages, and expenses, including attorneys' fees, expended or incurred in
connection therewith.
17. This Agreement may be executed in several counterparts and it
shall not be necessary for each Party to execute each of such counterparts, but
when all of the Parties have executed and delivered one of such counterparts,
the counterparts, when taken together, shall be deemed to constitute one and the
same instrument, enforceable against each Party in accordance with its terms.
18. All notices, requests, demands and other communications that are
required to be or may be given under this Agreement by any Party to any of the
other Parties shall be in writing and shall be deemed to have been duly given
when (a) delivered in person, (b) delivered by an overnight courier service
(such as Federal Express or UPS, etc.) or (c) delivered by certified or
registered first class mail, postage prepaid, return receipt requested, to the
Party to whom the same is so given or made:
If to TGC addressed to: Toucan Gold Corporation
8201 Preston Road
Suite 600
Dallas, Texas 75225
ATTN: President
with a copy to: Jenkens & Gilchrist, P.C.
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202
ATTN: Mark D. Wigder, Esq.
If to TML: Toucan Mining Limited
Celtic House
Victoria Street
Douglas, Isle of Man IM99 1QZ.
ATTN: Corporate Secretary
with a copy to: Jenkens & Gilchrist, P.C.
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202
ATTN: Mark D. Wigder, Esq.
4
<PAGE>
If to Zuzu: at the address of Zuzu as set forth on
Exhibit B.
19. If and to the extent that any court of competent jurisdiction holds
any provision (or any part thereof) of this Agreement to be invalid or
unenforceable, such holding shall in no way affect the validity of the remainder
of this Agreement.
20. TML may assign its rights under this Agreement (i) to any person or
entity that is an affiliate (as defined under the Securities Act) of TML, (ii)
to Minmet PLC or its affiliates, or (iii) to any other person or entity provided
that TML has deposited the sum of $120,000 minus the product of $20,000 and the
number of Other Certified Claims that have been delivered to TML and for which
Zuzu has received payment in an escrow account with a financial institution with
assets in excess of U.S.$100,000,000 pursuant to an escrow agreement that
provides for (i) the payment to Zuzu out of such escrowed funds of $20,000 for
each Other Certified Claims delivered to TML's assignee prior to the Termination
Date and (ii) the payment to TML of the escrowed funds (plus interest thereon)
remaining in the escrow account on the first business day following the
Termination Date.
21. This Agreement shall be governed by and construed in accordance
with the internal laws of Brazil, without regard to principles of conflicts of
law.
[Remainder of Page Left Intentionally Blank]
5
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement to be
effective on the latest date written below.
Executed on ____________, 1999.
JOSEPH J. HARAOUI,
individually and on behalf of Zuzu
TOUCAN GOLD CORPORATION,
a Delaware corporation
Executed on ____________, 1999. By: /s/ Robert A. Pearce
------------------------------
Name: Robert A. Pearce
------------------------------
Title: Chief Financial Officer
------------------------------
TOUCAN MINING LIMITED,
an Isle of Man corporation
Executed on ____________, 1999. By: /s/ Robert P. Jeffcock
------------------------------
Name: Robert P. Jeffcock
------------------------------
Title: Director
------------------------------
6
<PAGE>
EXHIBIT A
DNPM Claim Number
1. 869.820/96
2. 867.245/95
3. 867.246/95
4. 867.247/95
5. 867.249/95
6. 867.250/95
7. 867.234/95
A-1
<PAGE>
EXHIBIT B
Zuzu's Address:
B-1
