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) December 4, 1998
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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Item 2. Acquisition or Disposition of Assets
On December 4, 1998, Toucan Gold Corporation (the "Company")
consummated the following transactions, involving, among other things, the grant
of an 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 Mineradora de Bauxita Ltda. ("MBL"), the
Brazilian subsidiary of the Company through which the Company's Brazilian
exploration activities are conducted.
Toucan Mining Limited ("TML"), the Company's wholly-owned subsidiary
that is the beneficial owner of the issued share capital of MBL, granted an
option (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. If the MBL Option is exercised by
Minmet, Minmet will acquire all of the issued share capital of MBL by issuing an
additional 25 million Ordinary Shares (the "Completion Shares") in Minmet to
TML. The MBL Option expires on June 30, 1999, subject to earlier termination
under certain circumstances.
TML is restricted from selling or distributing the Option Shares during
the term of the MBL Option and for two (2) months thereafter without the consent
of Minmet.
The sale and distribution of the Completion Shares are also restricted
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 Option Shares and 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 for the sale of the
Option Shares and the Completion Shares.
Pursuant to the terms and conditions of the Transaction Documents (as
defined below), from November 1, 1998 to the expiration of the MBL Option,
Minmet is obligated (i) to conduct detailed ground and airborne geophysical
surveys of MBL's claims and additional geological mapping, (ii) to cover all of
MBL's reasonable overhead and costs, and (iii) to spend a minimum of $500,000 on
claim development efforts with MBL, including expenses incurred through (i) and
(ii). MBL will have the benefit of these obligations even if the MBL Option is
not exercised.
In addition, 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 approximate principal amount of $975,000. The Company received the
sum of U.S. $275,000 solely for the Company granting the Loan Option. The Loan
Option expires on June 30, 1999, subject to earlier termination under certain
circumstances. If the Loan Option is exercised, Minmet will pay to the Company
the further sum of U.S. $250,000 and will issue 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 (British Pound) 0.08p per share.
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The grant of the MBL and Loan Options to Minmet was accomplished
through the sale of all of the issued share capital of Anagram Limited, a newly
formed, wholly-owned subsidiary of TML and a private limited company
incorporated under the laws of the Isle of Man ("Anagram") pursuant to an
Agreement dated December 3, 1998 among the Company, TML and Minmet (the
"Purchase Agreement"). Through the purchase of Anagram by Minmet and the
assumption by Minmet of that certain Option Agreement among the Company, MBL and
Anagram dated December 3, 1998 (the "Option Agreement") and that certain
Supplemental Agreement dated December 3, 1998 among the Company, MBL, Anagram
and Minmet (the "Supplemental Agreement," collectively with the Purchase
Agreement and the Option Agreement, the "Transaction Documents"), Minmet
obtained the MBL Option and the Loan Option and incurred the obligations
detailed above.
The Company has reached agreement with certain of its creditors,
including certain affiliates of the Company, for the creditors to receive
Ordinary Shares of Minmet from the Option Shares held by the Company in payment
of the obligations of the Company to such creditors. Such creditors and Roy G.
Williams received such Minmet Shares with the same restrictions on transfer
applicable to the Company and described above. For this purpose the Minmet
Shares were valued at approximately $0.09 per share, and the Company
extinguished $640,720 of obligations with 7,100,000 Minmet Shares. The Company
has agreed to pay Roy G. Williams certain fees for introducing Minmet to the
Company, negotiation of the MBL Option, arranging short term funding of the
Company's operations, and providing basic office accommodations and secretarial
assistance. On the execution of the Transaction Documents, Mr. Williams was paid
a fee of $60,000. The Company paid the fee by issuing to Mr. Williams 180,000
shares in the Company valued for this purpose at $0.20 per share and
transferring to Mr. Williams 265,000 Minmet Shares valued for this purpose at
approximately $0.09 per share. On the exercise of the MBL Option, Mr. Williams
will be entitled to a further fee of $60,000 payable as to $36,000 in cash or
the equivalent value in shares of the Company and as to $24,000 in cash or the
equivalent value in shares of Minmet.
While the Transaction Documents may permit the Company to distribute
the Option Shares, the Completion Shares, the Warrants, and the Warrant Shares
(collectively, the "Minmet Securities") to stockholders of the Company, subject
to certain limitations, the Board of Directors of the Company in approving the
various agreements with Minmet has determined for securities law reasons that no
Minmet Securities will be distributed to stockholders of the Company.
Accordingly, the Board of Directors of the Company has no present intention of
distributing any of the Minmet Securities to stockholders of the Company, and no
such distribution can be made to stockholders of the Company unless with the
unanimous consent of the Board based on an opinion of counsel that such
distribution will not require registration under the Securities Act of 1933, as
amended, of the issuance of the Minmet Securities to TML or the Company or such
distribution. Consequently, depending on the amount and nature of other assets
owned by the Company at relevant times, the Company may need to acquire
non-securities assets or sell or otherwise dispose of the Minmet Securities in
order to avoid being deemed to be an investment company under the Investment
Company Act of 1940, as amended.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
Not applicable.
(b) Pro Forma Financial Information
Not applicable.
(c) Exhibits
10.1 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
10.2 Supplemental Agreement dated December 3,
1998 among Toucan Mining Limited, Toucan
Gold Corporation Inc. and Minmet plc
10.3 Option Agreement Re Mineradora De Bauxita
Ltda dated December 3, 1998 among Toucan
Mining Limited, Toucan Gold Corporation Inc.
and Anagram Limited
10.4 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 Corpora-
tion Inc. and Anagram Limited
10.5 Form of Minmet plc Warrant Instrument
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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: January 4, 1999 By: /s/ Robert A. Pearce
-----------------------
Robert A. Pearce
Chief Financial Officer
5
Exhibit 10.1
DATED DECEMBER 3, 1998
(1) TOUCAN MINING LIMITED
- and -
(2) TOUCAN GOLD CORPORATION INC
- and -
(3) MINMET PLC
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AGREEMENT
for the sale and purchase of the whole of
the issued share capital of Anagram Limited
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MATHESON ORSMBY PRENTICE
POUNTNEY HILL HOUSE
6 LAURENCE POUTNEY HILL
LONDON EC4R 0BL
TEL: + 44 171 404 0998
FAX: + 44 171 583 5644
1
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<S> <C> <C> <C>
INDEX
Clause No. Heading Page No.
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1. Interpretation 1
2. Pre-Condition 3
3. Sale and Purchase 3
4. Consideration 3
5. Completion 4
6. Warranties 4
7. Costs 4
8. Further Assurance 4
9. Notices 4
10. Law 5
11. Counterparts 5
SCHEDULE I The Option Agreement 6
SCHEDULE II The Supplemental Agreement 7
</TABLE>
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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 the Isle of Man, whose registered office is at Celtic House,
Douglas, Isle of Man (the "Vendor"); and
(2) TOUCAN GOLD CORPORATION INC., a public limited company incorporated
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");
(3) MINMET PLC, a public limited company incorporated under the laws of
Ireland and whose registered office is at 10 Fitzwilliam Square, Dublin
2 (the "Purchaser").
WHEREAS:
(A) Anagram Limited (the "Company") is a private company limited by
shares incorporated under the laws of the Isle of Man and whose registered
office is at Celtic House, Victoria Street, Douglas, Isle of Man.
(B) The Vendor is the legal and beneficial owner of the entire issued
share capital of the Company, (hereafter referred to as the "Sale Shares").
(C) The Vendor has agreed to sell and the Purchaser has agreed to
purchase the Sales Shares on the terms and subject to the conditions hereinafter
contained.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In the Agreement and the Schedule hereto the following
words and expressions shall have the following meanings:
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<CAPTION>
<S> <C> <C>
"Assignment of Loan Note" the assignment of the loan note as
annexed to the Option Agreement;
"Claims" the priority exploration claims
and applications of the Company in
respect of various locations in the
Cuiaba region, Brazil, as more
fully set out in the Schedule to
the Option Agreement;
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"Completion" completion of the sale and purchase of the
Sale Shares in accordance with this
Agreement;
"Encumbrance" a mortgage, charge, pledge, lien, option,
restriction, right of first refusal, pre-emption
right, third party right or interest, other
encumbrance or security interest of any kind,
or another type of preferential arrangement
(including, without limitation, a title transfer
or retention arrangement) having similar
effect;
the "Option Agreement" the agreement between the Vendor, the
Parent and the Company of even date and
attached hereto as Schedule 1;
"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 Sale Shares" all of the issued ordinary shares in the capital
of the Company legally and beneficially
owned by the Vendor;
"the Share Purchase Agreement" the agreement between the Vendor, the
Parent and the Company annexed to the
Option Agreement in Schedule II thereof;
"the Supplemental Agreement" the agreement between the Vendor, the
Parent, the Company and the Purchaser in
the agreed form as annexed hereto in
Schedule II;
"US$" dollars, the lawful currency of the United
States of America;
"the Vendor's Solicitors" Walsh Lawson of 54-62 Regents Street,
London W1R 5PJ;
"(British Pound)" sterling pounds, the local currency of the
United Kingdom.
</TABLE>
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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, re-enacting, 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 For the avoidance of doubt, words and phrases utilised in
the Option Agreement have the same meaning as in this Agreement unless the
context otherwise requires.
2. PRE-CONDITION
Notwithstanding any other provision of this Agreement, the obligations
of the Purchaser hereunder and Completion are conditional upon the Vendor, the
Parent and the Company entering into the Supplemental Agreement in the agreed
form annexed hereto at Schedule II.
3. SALE AND PURCHASE
3.1 The Vendor agrees to sell with full title guarantee and
the Purchaser agrees to buy the Sale Shares and each right attaching to the Sale
Shares at or after the date of this Agreement, free of any Encumbrance and the
Vendor hereby waives any rights of pre-emption it has in relation to any of the
Sale Shares.
3.2 The Vendor warrants that it is the sole legal and
beneficial owner of and has full lawful right, title and authority to transfer
the beneficial ownership of the Sale Shares free from any Encumbrance, and that
the Sale Shares comprise the entire issued share capital of the Company.
4. CONSIDERATION
4.1 The total purchase consideration payable by the Purchaser
for the purchase of the Sale Shares shall be the allotment of 7,500,000 ordinary
shares in the Purchaser (the "Allotted Shares") to the Vendor subject always to
the restrictions contained in Clause 4.2.
4.2 It is hereby agreed that the Vendor will be restricted
from transferring, selling, disposing or dealing in any way with the Allotted
Shares during the Option Period (together with a further period of two months
thereafter in the case of the matters referred to at (ii), (iii) and (iv) below)
until the first to happen of the following events, namely:
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(i) The Option is exercised by the Optionee; or
(ii) The Optionee notifies the Optionor in writing
that it wishes to terminate the Option; or
(iii) 30 June 1999, or such later date as may be
agreed by all the parties to the Option Agreement; or
(iv) The breach by the Optionee of its obligation
more particularly referred to in Clause 5.1(iv) in the Option
Agreement.
4.3 For the avoidance of doubt, in the event of the Option
being exercised by the Optionee in accordance with Clause 3, the restrictions
set out at Clause 4.1 of the Share Purchase Agreement shall not be applicable in
respect of the Allotted Shares.
4.4 In the event of the Vendor asserting a breach by the
Company in accordance with the provisions of clause 5.1(iv) of the Option
Agreement, full details of such breach shall be notified to the Purchaser in
writing prior to any exercise by the Vendor of its rights pursuant to clause
4.2(iv) the Purchaser shall be provided with a period of seven working days to
remedy the alleged breach to the satisfaction of the Vendor.
4.5 Notwithstanding the provisions of Clause 4.2 above, the
Allotted Shares may be placed through the Purchaser's brokers in agreement with
the Purchaser at any time after the date hereof. The Purchaser undertakes to act
reasonably in respect of all requests for sale of the Allotted Shares from the
Vendor.
5. COMPLETION
5.1 Completion shall take place at the offices of the Vendors
Solicitors or at such other place as the parties may agree immediately after the
signing of this Agreement.
5.2 At Completion the Vendor shall deliver to the Purchaser
(i) an executed stock transfer form in respect of the Sales Shares together with
any and every Share Certificate which the Vendor's may possess representing all
or any of the Sale Shares; (ii) a letter executed as a deed in the form required
by the Purchaser from each present director and secretary of the Company
resigning their respective offices from the Company.
5.3 The Vendor shall procure that at Completion the directors
of the Company hold a meeting at which they approve (subject to stamping if
applicable) the registration of the Purchaser as owner of the Sale Shares; and
the appointment of such persons as nominated by the Purchaser as directors of
the Company with effect from the end of the meeting.
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6. WARRANTIES
6.1 The Vendor warrants, represents and undertakes to the
Purchaser that save for entering into the Option Agreement, the Company has not
carried on any trade or business and that other than the rights and interests
arising from the Option Agreement, the Company has no interest whatsoever in any
assets and does not have any liabilities.
6.2 Save as disclosed in writing to the Purchaser prior to the
signing hereof and as is apparent from the Memorandum dated 17 November 1998 to
the Purchaser from Pinheiro Neto - Advogados, Mineradora de Bauxita Ltda with
head offices at Avenida Tapajos Nr 2097 in the City of Santarem, State of Para,
Brazil is the beneficial owner of the Claims.
7. COSTS
7.1 Except where this Agreement provides otherwise, each party
shall pay its own costs relating to the negotiation, preparation, execution and
performance by it of this Agreement and of each document referred to in it.
8. FURTHER ASSURANCE
8.1 After Completion the Vendor and the Parent shall do all
such things as the Purchaser reasonably requests to vest in the Purchaser title
to the Sale Shares or to comply with the Purchaser's obligations under this
Agreement.
9. NOTICES
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 Wales and the parties agree
to submit to the nonexclusive jurisdiction of the English Courts as regards any
claim or matter arising in relation to this Agreement.
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11. COUNTERPARTS
11.1 This Agreement may be executed in any number of
counterparts each of which when executed and delivered is an original, but all
the counterparts together consitute the same document.
TOUCAN MINING LIMITED
By: /s/ R.P. Jeffcock
--------------------------
R.P. Jeffcock
TOUCAN GOLD CORPORATION
By: /s/ R.P. Jeffcock
--------------------------
R.P. Jeffcock
MINIMET PLC
By: /s/ Michael Nolan
--------------------------
Michael Nolan
By: /s/ Gordon P. Riddler
--------------------------
Gordon P. Riddler
8
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SCHEDULE I
The Option Agreement
(Omitted. See Exhibit 10.3)
9
Exhibit 10.2
DATED DECEMBER 3, 1998
(1) TOUCAN MINING LIMITED
- and -
(2) TOUCAN GOLD CORPORATION INC.
- and -
(3) ANAGRAM LIMITED
- and -
(4) MINMET PLC
--------------------------------
SUPPLEMENTAL AGREEMENT
--------------------------------
MATHESON ORMSBY PRENTICE
SOLICITORS
POUNTNEY HILL HOUSE
6 LAURENCE POUNTNEY HILL
LONDON
EC4R 0BL
TEL: 0171 404 0998
FAX: 0171 583 5644
1
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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 the Isle of Man and whose registered office is at Celtic House,
Victoria Street, Douglas, Isle of Man ("the Optionor"); and
(2) TOUCAN GOLD CORPORATION INC., a public limited company incorporated
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 and whose registered office is at Celtic House,
Victoria Street, Douglas, Isle of Man ("the Optionee"); and
(4) MINMET PLC, a public limited company incorporated under the laws of
Ireland and whose registered office is at 10 Fitzwilliam Square, Dublin
2 ("Minmet")
WHEREAS
(A) An Option Agreement was executed between the Optionor, the Parent
and the Optionee on the day of December 1998 (the "Option Agreement") relating
to the grant of an option to the Optionee to purchase the entire issued share
capital of Mineradora de Bauxita Ltda and to acquire the Inter-Company Debt (as
defined in the Option Agreement).
(B) Minmet has agreed to purchase the entire issued share capital of
the Optionee subject to the parties thereto entering into this Supplemental
Agreement so that the Option Agreement is amended in the manner set out herein.
(C) The parties hereby further agree that, save as set out hereunder,
the terms of the Option Agreement shall continue to apply as set out in the
Option Agreement and that the terms defined therein shall have the same meaning
whenever used herein.
NOW IT IS HEREBY AGREED as follows:
1. The terms of the Share Purchase Agreement between the Optionor, the
Parent and the Optionee which is annexed to the Option Agreement in Schedule II
are amended so that:
(a) Clause 3 thereof is deleted and the following clause is
inserted as Clause 3:
"3.1 The consideration for the sale and purchase
hereunder of the Shares (the "Consideration") shall be the
allotment to the Vendor of 25,000,000 ordinary shares (the
"Consideration Shares") in Minmet plc of 10 Fitzwilliam
Square, Dublin 2 ("Minmet").
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3.2 The Vendor covenants and undertakes with Minmet
that it will hold and will not transfer or otherwise dispose
of any Consideration Shares referred to at 3.1 above otherwise
than in accordance with this Clause 3, namely: (i) the Vendor
may sell up to 3,000,000 Consideration Shares in each of the
three 6 month periods after the date hereof, and it is hereby
agreed that any Consideration Shares not disposed of in
earlier periods may be added to those saleable in later
periods, (ii) in addition the Vendor will be free to
distribute such number of Consideration Shares as would equal
the number of shares of the Parent in issue at the time in
each of the second and third six month periods. The Vendor and
Minmet further agree that the Consideration Shares not so
distributed in a second period of six months will be aded to
those available for distribution in the third period of six
months.
3.3 Notwithstanding the provision of Clause 3.2 the
Consideration Shares may be placed through Minmet's brokers in
agreement with Minmet at any time after the date hereof.
Minmet undertakes to act reasonably in respect of all requests
for sale of the Consideration Shares from the Vendor.
3.4 The Consideration Shares allotted hereunder will
rank pari passu in all respects with those ordinary shares of
Minmet in issue on the date hereof, and Minmet agrees and
undertakes to make application and otherwise procure that the
Consideration Shares allotted to the Vendor hereunder shall be
quoted or otherwise dealt in on a pari passu basis as the
other ordinary shares in issue on the date hereof.
3.5
3.5.1 In the event of:
(a) any subdivision, consolidation
or similar reorganisation of the Consideration Shares;
(b) any dividend or other distri-
bution by Minmet, subdivision, consolidation, reorganisation,
repurchase or exchange of the Consideration Shares or other
securities of Minmet or other similar corporate transaction
or event occurring in respect of or affecting the Considera-
tion Shares such that an adjustment is necessary in order to
preserve (as far as possible) the equivalent economic value of
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the rights of the Vendor immediately prior to the relevant
transaction or event, having regard to any diluting or con-
centrating effect of the relevant transaction or event;
the auditors for the time being of Minmet shall certify the
appropriate adjustment to all or any of the Consideration
Shares and their determination shall (save in the case of
manifest error) bind Minmet and the Vendor.
3.5.2 Any adjustment made in accordance with
3.5.1 above shall take effect from the date of the relevant
transaction or event, or, if earlier, the record date for that
transaction or event. Notice of any adjustment shall be sent
to the Vendor within 28 days together with a share certificate
in respect of any additional Consideration Shares to which it
is thereby entitled.
(b) Schedule III thereof is deleted and the provisions set out
in Schedule I hereto are inserted in its place as Schedule III.
2. The terms of the Assignment of Loan Note between the Parent and the
Optionee which is annexed to the Option Agreement in Schedule IV are amended so
that Clause 1 thereof is deleted and the following Clause inserted as Clause 1:
"1 In consideration of the payment of US$250,000 by Minmet plc
of 10 Fitzwilliam Square, Dublin 2, Ireland ("Minmet") to the Vendor
(the receipt of which is hereby acknowledged) and the grant by Minmet
to the Vendor of 7,700,000 warrants in Minmet pursuant to the terms of
the Warrant Instrument attached hereto, the Vendor as beneficial owner
assigns to Minmet all that the Debt due and owing to the Vendor by the
Debtor and all interest due and to become due for the same and the full
benefit and advantage of the same to hold to Minmet absolutely."
The Warrant Instrument referred to above will be in the form of the
Instrument attached hereto and initialed by the parties for identification
purposes.
3. Guarantee
3.1 Minmet hereby guarantees to the Optionor and the Parent
that the Optionee will duly observe and perform all of the obligations on its
part contained in the Option Agreement together with any and all obligations
arising upon the exercise of the Options contained therein and will pay to and
indemnify the Optionor and the Parent as the case may be in respect of all
losses damages expenses and costs resulting from the breach by the Optionee of
such obligations.
3.2 This guarantee shall not be discharged by either the
Optionor or the Parent giving to the Optionee time or other indulgence in
respect of its obligations under the Option Agreement and/or the Share Purchase
Agreement.
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4. Governing Law
This Agreement shall be governed by and construed in all respects in
accordance with the laws of England and Wales 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.
AS WITNESS the hands of the authorised representative of the parties
hereto the day and year first before written.
TOUCAN MINING LIMITED
By: /s/ R.P. Jeffcock
--------------------------
R.P. Jeffcock
TOUCAN GOLD CORPORATION
By: /s/ R.P. Jeffcock
--------------------------
R.P. Jeffcock
ANAGRAM LIMITED
By: /s/ David Walsh
--------------------------
David Walsh
MINIMET PLC
By: /s/ Michael Nolan
--------------------------
Michael Nolan
By: /s/ Gordon P. Riddler
--------------------------
Gordon P. Riddler
5
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SCHEDULE I
Completion Arrangements for the Share Purchase Agreement
and the Assignment of Loan Note
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:
(a) 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;
(b) that the allotments to the Vendor of the Consideraton Shares
be approved subject to the restrictions on sale contained in
Clause 3.2.
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;
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(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
The Purchaser shall deliver to the Vendor's solicitors:
(a) Share Certificates in respect of the Consideration Shares; and
(b) certified copies of all board resolutions in relation to the
issue of the Consideration Shares to the Vendor; and
(c) a bank draft for US$250,000; and
(d) warrant certificates in respect of 7,700,000 ordinary shares
in Minmet issued pursuant to the Warrant Instrument.
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.
7
<PAGE>
SCHEDULE II
The Option Agreement
(Omitted. See Exhibit 10.3)
8
Exhibit 10.3
DATED DECEMBER 3, 1998
(1) TOUCAN MINING LIMITED
- and -
(2) TOUCAN GOLD CORPORATION INC.
- and -
(3) ANAGRAM LIMITED
-----------------------------------
OPTION AGREEMENT
RE
MINERADORA DE BAUXITA LTDA
-----------------------------------
MATHESON ORMSBY PRENTICE
POUNTNEY HILL HOUSE
6 LAURENCE POUNTNEY HILL
LONDON EC4R 0BL
TEL: 0171 404 0998
FAX: 0171 583 5644
1
<PAGE>
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,
Victoria Street, Douglas, Isle of Man (the "Optionor"); and
(2) TOUCAN GOLD CORPORATION INC., a public limited company incorporated
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 "Optionee"):
RECITALS:
(A) Mineradora de Bauxita Ltda ("the Company") is a company
incorporated under the laws of Brazil and has an authorised share capital of
R$10,000 comprising 10,000 quotas of R$1 each.
(B) The Optionor is the registered owner of the entire issued share
capital of the Company (hereafter referred to as the "Option Shares") and has
agreed to grant an option to the Optionee to purchase the Option Shares of the
Company. In addition the Parent has agreed to grant to the Optionee an option to
acquire the Inter-Company Debt (as defined herein) on the terms and subject to
the conditions set out herein.
NOW IT IS AGREED as follows:
1. Interpretation
In this Agreement the following words and phrases shall have
the following meanings:
<TABLE>
<CAPTION>
<S> <C> <C>
"Assignment of Loan Note" means the assignment of the Inter-Company
Debt from the Parent to the Optionee in the
agreed form and attached hereto in
Schedule 4;
"the Claims" means the priority exploration claims
and applications of the Company in
respect of various locations in the
Cuiaba region, Brazil, as more fully
set out in Schedule 5;
1
<PAGE>
"Exercise Date" means the date on which the Option Notice is
given;
"Inter-Company Debt" means all monies owing and due by the
Company to the Parent as evidenced more
particularly in the Loan Note attached hereto
as Schedule 3;
"the Option" means the options referred to in Clause 2
below;
"Option Notice" means a notice in the form set out in
Schedule 1 below;
"Option Period" means the period commencing on 1
November 1998 and expiring on
the happening of the first of the
following four events, namely:
(i) the Option is exercised by the
Optionee; or
(ii) the Optionee notifies
the Optionor in writing
that it wishes to terminate
the Option; or
(iii) 30 June 1999, or such
later date as may be
agreed by all the
parties to the Option
Agreement; or
(iv) the breach by the
Optionee of its
obligation more
particularly referred
to in Clause 5.1(iv)
herein;
"Option Price" means the consideration for the
acquisition of the Option Shares
and the acquisition of the
Inter-Company Debt as set out
respectively in the Share Purchase
Agreement and the Assignment of Loan
Note;
"Option Shares" means the entire issued share capital of the
Company legally and beneficially owned by
the Optionor;
"R$" means Reals, the lawful currency of Brazil;
2
<PAGE>
"Share Purchase Agreement" means the agreement between the parties
hereto in the agreed form and attached hereto
in Schedule 2;
"US$" means the lawful currency of the United
States of America;
"Warrantors" means the Optionor and the Parent;
"(British Pound)" Sterling, the lawful currency of the United
Kingdom.
</TABLE>
1.2 A document is in "the agreed form" if it is in the form
agreed between and initialled by or on behalf of the parties hereto on or before
the date hereof and annexed hereto.
2. The Option
2.1 Subject to the terms and conditions hereinafter appearing
and in consideration of the assumption by the Optionee of the obligations set
out in Clause 5 below by the Optionor the Optionor hereby grants to the Optionee
an option to purchase from the Optionor at the Option Price the Option Shares,
free from all charges, liens and encumbrances and together with the right to
receive and retain all dividends and other distributions declared paid or made
thereon at any time after the Exercise Date and with the benefit of all accrued
benefits rights and privileges attaching thereto at the Exercise Date.
2.2 Subject to the terms and conditions hereinafter appearing
and in consideration of the payment by the Optionee to the Parent of US$275,000
which shall be payable by the Optionee within three days after the date hereof,
the Parent hereby grants to the Optionee an Option to purchase the Inter-Company
Debt for the Option Price.
3. Exercise of the Option
3.1 The Option may only be exercised by the Optionee during
the Option Period by the Optionee giving the Option Notice to the Optionor and
the Parent.
3.2 The Option shall only be exercisable on one occasion and
in respect of the whole of the Option Shares and the Inter-Company Debt.
4. Obligations of Optionor during the Option Period and thereafter
The Optionor shall be responsible during the Option Period and at any
time thereafter in this instance to ensure the prompt payment of all creditors
of the Company as at 1 November 1998 some (but not necessarily all) of which are
detailed in the list of creditors in the agreed form. For the avoidance of doubt
and for the sake of clarity notwithstanding that a specific creditor of the
3
<PAGE>
Company is not specifically referred to in the agreed form list but specifically
relates to activities of the Company whether by act or omission prior to 1
November 1998 these shall be the responsibility of the Optionor.
5. Obligations of Optionee during the Option Period
5.1 The Optionee shall;
(i) as soon as reasonably practicable hereafter
commence and thereafter diligently proceed with and complete a survey
of the claims including a ground geophysical orientation survey,
additional geological mapping and an airborne geophysical survey (to
include magnetics and radio metrics) (the "Exploration Plan");
(ii) prepare and complete all appropriate plans, logs
and records of the Exploration Plan and shall supply copies thereof to
the Company at no cost to the Company;
(iii) in so far as the Optionee shall not have
expended the sum of US$500,000 on the Exploration Plan by the end of
the Option Period (which, for the avoidance of all doubt, incorporates
all expenditure of the Optionee referred to in subclauses (iv) and (v)
below) then if the Option shall not be exercised the Optionee shall pay
to the Optionor at the end of the Option Period an amount equal to the
difference between the amount that it shall have so expended and the
sum of US$500,000
(iv) assume responsibility for and pay all reasonable
overheads and other costs incurred by the Company as from 1st November
1998 and relating to the acitivites of the Company after 1 November
1998 until the end of the Option Period. For the avoidance of all
doubt, such reasonable costs are to include the salary of Mr David
Carmichael, all annual exploration fees and any taxation that may
become payable on the registration of the Claims under the laws of
Brazil during the Option Period;
(v) on the signing hereof pay to the Optionor an
agreed sum being the amount of the overheads and other costs incurred
by the Company during the period from 1 November 1998 until the date
hereof as agreed by the parties; and
(vi) for the avoidance of doubt in the event that the
Option shall not be exercised none of the Company the Optionor or the
Parent shall be liable to refund to the Optionee any money paid by the
Optionee pursuant to the provisions of sub-clauses (iv) and (v) hereof.
5.2 The Optionor shall procure that the Company will in so far
as it is able and at the cost of the Optionee give the Optionee full access to
the Claims, office facilities, documentation, information, staff and give the
Optionee all other necessary assistance in order to facilitate the exploration
referred to in this Clause 5.
4
<PAGE>
5.3 The Optionee hereby undertakes to act reasonably to
protect and not dissipate the assets of the Company or do any such thing which
may adversely effect the Claims during the Option Period in any way whatsoever
by the Company, the Parent and the Optionor or indeed any other third party.
5.4 For the sake of clarity, if the Option is not exercised by
the Optionee the Optionee shall not take any action that may impede the use by
the Optionor of the Exploration Plan pursuant to the laws of Brazil.
6. Committee
6.1 The Optionor and the Optionee hereby agree to establish a
Committee during the Option Period, consisting of two representatives of each of
the Optionor and Optionee. The Committee will approve and monitor the
Exploration Plan undertaken by the Optionee during the Option Period together
with the incurring of any liabilities and the making of any disbursements of the
Company.
6.2 It is hereby agreed and acknowledged that save with the
consent of the Optionee (which consent shall not be unreasonably withheld or
delayed) the Company shall not during the Option Period:
(i) withdraw any of the Claims;
(ii) incur any new obligations of any nature
whatsoever;
(iii) enter into any joint venture involving the
Claims;
(iv) do any matter which would fundamentally alter
the corporate or financial status of the
Company.
7. Completion
7.1 Completion of the sale and purchase of the Option Shares
and the assumption of the Inter-Company Debt shall take place within seven days
of the Exercise Date and shall be in accordance with the terms and conditions of
the Share Purchase Agreement.
7.2 The Parent confirms that in further consideration of an
amount of (British Pound) 1 duly acknowledged by the Parent hereunder and
received from the Optionee it hereby unconditionally agrees to guarantee all the
obligations of the Optionor arising hereunder to the Optionee.
8. Matters requiring the Optionee's consent
Without prejudice to the provisions of clause 6, the Optionor hereby
covenants with and undertakes to the Optionee that whilst the Option remains
unexercised it will procure so far as it lawfully can (whether by exercising or
procuring the exercise of voting rights or otherwise) that the Company shall in
5
<PAGE>
no circumstances increase its issued share capital or loan capital (if any) or
create or issue any warrants, options or other rights over its issued share
capital nor purchase or redeem any of its issued share capital from time to time
and shall not without the prior written consent of the Optionee (which shall not
be unreasonably withheld or delayed):-
(i) sell, lease, transfer or otherwise dispose of its under-
taking or a substantial part thereof;
(ii) consolidate, amalgamate with or acquire any interest in
any other company, association partnership or legal entity;
(iii) change the nature of its business;
(iv) acquire or dispose of land or any interest in land;
(v) cease any business operation;
(vi) make or have any borrowing, other than normal trade
credit and loans from the Optionor or the Parent;
(vii) create or have any mortgage, charge, lien, encumbrance
or other security interest over any of its assets (other than liens
arising in the normal course of business);
(viii) enter into or have any contract of a material nature
outside the normal course of its business or on other than arm's length
terms.
9. Security
The Optionor shall at the reasonable request of the Optionee do all
such matters as the Optionee may request and which may be permissible under
Brazilian law in relation to the provision of ongoing security to the Optionee
as to the due and proper performance of the obligations of the Optionor relating
to the transfer of the Option Shares to the Optionee. It is hereby agreed by the
parties that any documentation arising hereunder shall be retained by the
Optionor's Solicitors until such time as the Option is exercised, provided that
if the Option is not exercised during the Option Period, any documentation
arising hereunder shall be returned forthwith to the Optionor.
10. Warranty
10.1 The Warrantors hereby agree to indemnify and keep
indemnified the Optionee from and against all claims demands actions damages
losses (including loss of profit) liabilities penalties and expenses sustained
by the Optionee directly or indirectly in respect of any breach by the
Warrantors in respect of the warranties referred to at 10.2 below.
10.2 The Warrantors warrant that:
6
<PAGE>
(i) the Optionor shall sell the Option Shares as
beneficial owner entitled to all the proceeds thereof and hereby
warrants that the Optionee shall obtain a good title to the Option
Shares free from all liens charges encumbrances or other security
interests of whatsoever nature;
(ii) all the Option 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;
(iii) the Optionor and the Parent have the respective
power and authority to enter into this Agreement without infringing any
applicable law and also has the power and authority to complete the
subsequent sale and purchase arrangements envisaged pursuant to this
Agreement, such authority being evidenced by formal legal opinions from
Foreign Counsel to the satisfaction of the Optionee as annexed hereto
at Schedule 6;
(iv) all material creditors of the Company as at 1
November 1998 are detailed in the list of creditors of the Company in
the agreed form.
11. Restriction on Transfer
The Optionor undertakes that during the Option Period it shall not sell
transfer dispose of or otherwise deal in any interest the Optionor may have in
the Option Shares without the prior written consent of the Optionee.
12. Notices
Any notice under this Agreement shall be in writing and shall be given
or served by personal delivery, telex or by leaving it or sending it by pre-paid
first-class recorded delivery or registered post at in the case of the Optionor
and the Parent 27 Albermarle Street, London W1X 4LQ and in the case of the
Optionee hereinbefore set forth or such other address which it may notify in
writing to the other in accordance with the terms hereof. Any notice so given or
served shall, unless the contrary is proved, be deemed to have been duly given
or served on the date of delivery (if by personal delivery), proper despatch (if
by telex), or forty-eight hours from the time of posting (if by post).
13. Expiry/ Termination of Option Period
On expiry of the Option Period, this Agreement shall cease and be of no
further effect, save as regards any rights of any of the parties hereto as the
result of the breach prior to such expiry or completion by any other party of
its obligations hereunder.
14. Time of the Essence
7
<PAGE>
Time shall be of the essence in relation to all dates and periods
hereunder.
15. Costs
The Optionee agrees to contribute to the reasonable costs and expenses
of the Optionor in relation to the preparation and execution of this Agreement,
and all documents ancilliary thereto with the relevant amount to be agreed
between the parties as at the date hereof.
16. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of England and Wales 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.
17. Joint and Several
The liability of the Warrantors hereunder to the Optionee shall be
joint and several.
AS WITNESS the hands of the authorised representatives of the parties
hereto the day and year first before written.
TOUCAN MINING LIMITED
By: /s/ R.P. Jeffcock
--------------------------
R.P. Jeffcock
TOUCAN GOLD CORPORATION
By: /s/ R.P. Jeffcock
--------------------------
R.P. Jeffcock
MINIMET PLC
By: /s/ Michael Nolan
--------------------------
Michael Nolan
By: /s/ Gordon P. Riddler
--------------------------
Gordon P. Riddler
8
<PAGE>
SCHEDULE 1
Option Notice
To: Toucan Mining Limited
Celtic House
Victoria Street
Douglas
Isle of Man
and: Toucan Gold Corporation Inc
8201 Preston Road
Suite 600
Dallas
Texas 75225
USA
Pursuant to an Agreement dated _____ December, 1998, and made between
us whereby you granted to us an option to purchase the Shares (as defined in the
said Agreement) now held by you and the Inter-Company Debt (as further defined
in the said Agreement), we hereby GIVE NOTICE that we wish to exercise our
rights under the said Agreement and require you to join with us in performing
our respective obligations thereunder at the registered office of the Company at
_____ am/pm on the _____ day of ____________, 19__, being within seven days but
not before five days after the giving of this Option Notice.
Dated this _____ day of __________, 199_.
For and on behalf of
ANAGRAM LIMITED
9
<PAGE>
SCHEDULE 2
Share Purchase Agreement
(Omitted. See Exhibit 10.4)
10
Exhibit 10.4
DATED December 3, 1998
(1) TOUCAN MINING LIMITED
- and -
(2) TOUCAN GOLD CORPORATION INC
- and -
(3) ANAGRAM LIMITED
--------------------------------------------------------
AGREEMENT
for the sale and purchase of the whole of
the issued share capital of MINERADORA DE BAUXITA LTDA
---------------------------------------------------------
MATHESON ORMSBY PRENTICE
POUNTNEY HILL HOUSE
6 LAURENCE POUNTNEY HILL
LONDON EC4R 0BL
TEL: 0171 404 0998
FAX: 0171 583 5644
1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
INDEX
Clause No. Heading Page No.
- -----------------------------------------------------------------------------------------------------------------------------------
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
</TABLE>
2
<PAGE>
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:
<TABLE>
<CAPTION>
<S> <C> <C>
"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
3
<PAGE>
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.
</TABLE>
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
4
<PAGE>
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.
5
<PAGE>
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
6
<PAGE>
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
--------------------------
R.P. Jeffcock
TOUCAN GOLD CORPORATION
By: /s/ R.P. Jeffcock
--------------------------
R.P. Jeffcock
ANAGRAM LIMITED
By: /s/ David Walsh
--------------------------
David Walsh
7
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<TABLE>
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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.
</TABLE>
8
<PAGE>
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.
9
<PAGE>
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
10
<PAGE>
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:
11
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SCHEDULE 3
Loan Note
12
<PAGE>
SCHEDULE 4
Assignment of Loan Note
13
<PAGE>
SCHEDULE 5
Details of the Claims
14
<PAGE>
SCHEDULE 6
Foreign Counsels' Opinions
15
<PAGE>
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 )
16
<PAGE>
SCHEDULE II
The Supplemental Agreement
(Omitted. See Exhibit 10.2)
17
Exhibit 10.5
DATED ________________ 199_____
MINMET plc
-----------------------------------------------------
WARRANT INSTRUMENT
relating to warrants in registered form
to subscribe for Warrant Shares
(being 7,700,000 Ordinary Shares
in Minmet plc)
-----------------------------------------------------
MATHESON ORMSBY PRENTICE
POUNTNEY HILL HOUSE
6 LAURENCE POUNTNEY HILL
LONDON EC4R 0BL
TEL: 0171 404 0998
FAX: 0171 583 5644
REF: SGW\F:\Docs\MARY\DAVID\Document.3
1
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<S> <C> <C> <C>
TABLE OF CONTENTS
Clause No. Heading Page No.
- -----------------------------------------------------------------------------------------------------------------------------------
1. Interpretation and Definitions 1
2. Constitution and Form of Warrants 3
3. Certificates and Conditions 3
4. Subscription Rights 3
5. Subscription Price 3
6. Exercise of Subscription Rights 4
7. Winding up of the Company 4
8. Transfer and Transmission of Warrants 5
9. Meetings of Warrantholders 5
10. Modification of Rights 5
11. Purchase 5
12. Adjustment of the Warrants 5
13. Replacement of Certificates 6
14. Notices 6
15. Governing Law 6
SCHEDULE 1 Form of Certificate 7
SCHEDULE 2 Provisions as to transfer, transmission and other matters 11
SCHEDULE 3 Provisions as to Meetings of Warrantholders 15
</TABLE>
2
<PAGE>
THIS INSTRUMENT is executed on ___________________, 199___ by MINMET plc of 10
Fitzwilliam Square, Dublin 2, Ireland
WHEREAS:
A. The Company has by resolution of its Directors passed on
_______________ 199___ determined to create and issue warrants to
subscribe in cash at 8p per share for Ordinary Shares of IR1p each in
the capital of the Company; and
B. The Company has accordingly determined to execute this Instrument in
order more particularly to define the rights and interests of the
registered holders for the time being of such warrants and to afford
protection for such rights and interests.
1. Interpretation and Definitions
1.1 In this Instrument the following expressions have the following
meanings save where the context otherwise requires:-
<TABLE>
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<S> <C> <C>
"Act" the Companies Act 1963-1990;
"Articles" the Articles of Association of the Company as at the date
hereof;
"Auditors" the auditors of the Company for the time being;
"Certificate" in relation to a Warrant, a certificate evidencing the
Subscription Rights and other rights for the time being
vested in the relevant Warrantholder in the form,
or substantially in the form, set out in Schedule 1;
"Company" Minmet plc whose registered office is situate at 10
Fitzwilliam Square, Dublin 2.
"Conditions" the terms and conditions set out in the Second Schedule to
the Certificate as altered from time to time in accordance
with the provisions of this Instrument;
"Directors" the board of directors of the Company for the time being;
"Equity Shares" issued and unissued Shares which are equity share capital of
the Company;
"Extraordinary Resolution" has the meaning ascribed thereto in Paragraph 17 of
Schedule 3;
3
<PAGE>
"Group" the Company and its subsidiaries from time to time;
"IR p" Irish pennies
"Notice of Exercise" in relation to a Warrant, a duly completed notice in the form
set out in the First Schedule to the relevant Certificate;
"Ordinary Distribution" any payment or distribution to holders of issued Equity
Shares in respect of such shares;
"Ordinary Shares" ordinary shares of IR1p each of the Company;
"p" Sterling pennies;
"Register" the register of persons for the time being entitled to the
benefit of the Warrants to be maintained pursuant to the
provisions of Paragraph 8;
"Relevant Date" any date or dates prior to the Termination Date;
"Share Register" the register of members of the Company;
"Shares" shares in the capital of the Company;
"Subscription Period" the period of three years from the date of this Instrument;
"Subscription Price" in relation to any Shares the subject of Subscription Rights,
means the price set out in Paragraph 5;
"Subscription Rights" the rights for the time being conferred by the Warrants to
subscribe for Shares which are constituted by virtue of the
provisions of Paragraph 2.1 of this Instrument over and in relation to
7,700,000 Warrant Shares;
"Subsidiary" as defined in Section 155 of the Act;
"Termination Date" third anniversary of the date of this instrument (such date
inclusive);
"Warrantholder" in relation to a Warrant, the person or persons in whose
name such Warrant is registered for the time being in the
Register;
"Warrants" the warrants of the Company;
4
<PAGE>
"Warrant Shares" Ordinary Shares issued pursuant to Warrants, which said Ordinary
Shares shall have the same rights attaching to the Ordinary
Shares in the Articles at the date hereof.
</TABLE>
1.2 Words and expressions defined in the Articles shall, unless otherwise
deemed in this Instrument or unless the context otherwise requires,
have the same meaning when used in this Instrument.
1.3 Headings are inserted for convenience of reference only and shall be
ignored in the interpretation of this Instrument.
1.4 In this Instrument, unless the context otherwise requires:-
(a) references to Paragraphs and Schedules are to be construed as
references to the Instrument include its Schedules;
(b) reference to (or to any specified provision of) this
Instrument or any other document or instrument shall be
construed as a reference to this Instrument, that provision or
that document or instrument as in force for the time being and
as amended in accordance with the terms thereof and (where
such consent is required by the terms of this Instrument as a
condition to such amendment being made) the prior sanction of
an Extraordinary Resolution;
(c) words importing the plural shall include the singular and vice
versa; and
(d) references to statutory provisions shall be construed as
references to those provisions as replaced, amended or
reenacted from time to time.
2. Constitution and Form of Warrants.
2.1 The Warrants shall confer the right, exercisable on the terms and
subject to the conditions hereinafter set out, to subscribe in cash at
the applicable Subscription Price for 7,700,000 Warrant Shares. The
Company undertakes to comply with the terms and conditions of this
Instrument and specifically, but without limitation, to give effect to
all Subscription Rights in accordance with the terms thereof for the
time being.
2.2 The Warrants shall be in registered form and will be transferable in
accordance with the provisions of Schedule 2. The Warrants are issued
subject to the Memorandum of Association of the Company and the
Articles and otherwise on the terms of this Instrument which are
binding upon the Company and each Warrantholder and all persons
claiming through them.
5
<PAGE>
3. Certificates and Conditions.
Entitlement to the Subscription Rights and other rights attaching to
the Warrants for the time being held by a Warrantholder shall be
evidenced by the issue to such Warrantholder of a Certificate which
shall have endorsed thereon the Conditions.
4. Subscription Rights.
The Subscription Rights may be exercisable, at the option of the
Warrantholder, on and as of the Relevant Date, which for the avoidance
of doubt shall be no later than the Termination Date, by the
Warrantholder serving notice on the Company in accordance with
Paragraph 6. In the event that the Subscription Rights have not been
exercised before 5pm on the Termination Date, the Subscription Rights
then unexercised shall lapse and become unenforceable save in respect
of any prior breach by the Company of any of its obligations hereunder.
5. Subscription Price.
The Subscription Price for each Warrant Share shall be 8p.
6. Exercise of Subscription Rights.
6.1 Subject to Paragraph 4.1, Subscription Rights conferred by a Warrant
may be exercised in whole or in part by the relevant Warrantholder
completing the Notice of Exercise and lodging the relevant Certificate
at the registered office of the Company for the time being together
with a remittance for the aggregate Subscription Price of the Warrant
Shares in respect of which Subscription Rights are to be exercised.
6.2 Once lodged in accordance with Paragraph 6.1, a Notice of Exercise
shall be irrevocable.
6.3 Shares falling to be issued upon the exercise of Subscription Rights
conferred by a Warrant shall be allotted and issued, subject only to
the provisions of Paragraph 10.2, to the Warrantholder or to such
person or persons as may be nominated by the relevant Warrantholder in
the relevant Notice of Exercise (provided that the Company shall have
consented in advance to the nomination of any such person or persons
other than the Warrantholder as aforesaid no later than 28 days after
the relative Certificate (with such Notice of Exercise duly completed
and accompanied by the requisite remittance for the relevant portion of
the Subscription Price) is lodged at the registered office of the
Company in accordance with Paragraph 6.1. Certificates for such Shares
shall be issued (free of charge) within 14 days from the date of
allotment and issue of such Shares.
6.4 Warrants in respect of which Subscription Rights have been exercised in
full will be cancelled. In the event of partial exercise of the
Subscription Rights evidenced by a Certificate, the Company shall, at
the same time as it issues certificates for the Shares in respect of
which such Subscription Rights have been exercised, issue a fresh
Certificate to the relevant Warrantholder for any unexercised balance
of the Subscription Rights which remain exercisable.
6
<PAGE>
6.5 Shares allotted pursuant to the exercise of Subscription Rights will
rank pari passu in all respects with those Ordinary Shares in issue on
the Relevant Date (or if there is no Relevant Date, the date on which
the Notice of Exercise is lodged in accordance with paragraph 6.1) and
will rank for all dividends and distributions paid on any date or by
reference to any Record Date on or after the date on which the Warrant
Shares are issued pursuant to the relevant Notice of Exercise being
lodged at the registered office in accordance with Paragraph 6.1 and
otherwise shall have the rights and privileges prescribed in the
Articles. The Company agrees and undertakes to make application and
otherwise procure that the Ordinary Shares so allotted shall be quoted
or otherwise dealt in on a pari passu basis as the other Ordinary
Shares.
7. Winding up of the Company.
If, prior to the end of the Subscription Period, an order is made or an
effective resolution is passed for winding up the Company (except for
the purpose of implementing a reconstruction or amalgamation on terms
sanctioned by an Extraordinary Resolution whereby Warrantholders are
granted substitute warrants over the equity share capital of the
reconstructed or amalgamated company of a value no less than the value
of the Warrants in issue immediately prior to such reconstruction or
amalgamation) each Warrantholder will (if in such winding up there
shall be a surplus available for distribution amongst the holders of
the Warrant Shares which, taking into account the amounts payable to
exercise Subscription Rights, exceeds in respect of each Warrant Shares
a sum equal to the relevant Subscription Price) be treated as if,
immediately before the date of such order or resolution, the
Subscription Rights had been exercised in full on the terms then
current and shall accordingly be entitled to receive out of the assets
available in the liquidation according to the priority rights which
would have been applicable to the relevant Warrant Shares under the
Articles such sum as he would have received had he been the holder of
the Warrant Shares to which he would have become entitled by virtue of
such subscription after deducting a sum per Share equal to the
Subscription Price. Subject to the foregoing provisions of this
Paragraph 7, all Subscription Rights shall lapse upon an order being
made or an effective resolution being passed for winding up the
Company.
8. Transfer and Transmission of Warrants.
The Company shall maintain a register of Warrants and the persons
entitled thereto and the provisions of Schedule 2 shall apply in
relation to the transfer and transmission thereof.
9. Meetings of Warrantholders.
The provisions of Schedule 3 shall apply in relation to meetings of
Warrantholders.
7
<PAGE>
10. Modification of Rights.
10.1 Any modification to this Instrument may be effected only by instrument
executed by the Company with the prior sanction of an Extraordinary
Resolution.
10.2 All or any of the rights for the time being attached to the Warrants
(including the Subscription Rights) may, with the prior consent of the
Company, from time to time (whether or not the Company is being wound
up) be altered or abrogated with the sanction of an Extraordinary
Resolution.
11. Purchase.
The Company shall have the right to purchase Warrants by tender
(available to all Warrantholders alike) at any price, if the terms of
such tender are accepted by the Warrantholders. All Warrants so
purchased by the Company shall forthwith be cancelled and shall not be
available for reissue or resale.
12. Adjustment of the Warrants
12.1 Subject to paragraph 12.3 below in the event of:
(a) any subdivision, consolidation or similar reorganisation of the
Ordinary Shares;
(b) any dividend or other distribution by the Company (whether in the
form of cash, Ordinary Shares, other securities or other
property), subdivision, consolidation, reorganisation, repurchase
or exchange of Ordinary Shares or other securities of the
Company, issue of Warrants or other rights to acquire Ordinary
Shares or other securities of the Company or other similar
corporate transaction or event occurring in respect of or
affecting the Ordinary Shares such that an adjustment is
necessary in order to preserve (so far as possible) the
equivalent economic value of the rights of Warrantholders
immediately prior to the relevant transaction or event, having
regard to any diluting or concentrating effect of the relevant
transaction or event,
then the auditors for the time being of the Company shall certify the
appropriate adjustment to all or any of (i) the number of Warrants and
(ii) the Subscription Price and their determination shall (save in the
case of manifest error) bind the Company and the Warrantholders.
12.2 Any adjustment made in accordance with sub-paragraph 1 shall take
effect from the date of the relevant transaction or event, or, if
earlier, the record date for that transaction or event. Notice of any
adjustment will be sent to each Warrantholder within 28 days together
with a Warrant certificate in respect of any additional Warrants to
which he is thereby entitled.
8
<PAGE>
12.3 No adjustments shall be made pursuant to sub-paragraph 1 above in
respect of the issue of Warrants or other rights to acquire Ordinary
Shares described in this document.
13. Replacement of Certificates.
If a certificate is mutilated, defaced, lost, stolen or destroyed it
will be replaced at the registered office of the Company for the time
being upon payment by the claimant of such reasonable costs as may be
incurred in connection therewith and on such terms as to evidence and
indemnity as the Company may reasonably require. Mutilated or defaced
Certificates must be surrendered before replacements will be issued.
14. Notices.
Any notice to Warrantholders required for the purposes of any provision
of this Instrument shall be given in accordance with the provisions of
Paragraphs 16 to 21 (inclusive) of Schedule 2.
15. Governing Law.
The provisions of this Instrument shall be subject to and governed by
the law of Ireland. The Warrantholders shall have the right to bring
legal action against the Company with respect to the Warrants and
covenants contained herein or therein in any competent court which has
jurisdiction.
9
<PAGE>
SCHEDULE 1
Form of Certificate
MINMET plc
(Incorporated under the Companies Acts 1963-1990)
WARRANTS
WARRANT to subscribe for Ordinary Shares of IR1p each at 8p per Share
Certificate No: ...............................
Date of Issue: 199__
Name and Address of Warrantholder:
NUMBER OF SHARES
THE SUBJECT OF THIS
CERTIFICATE
...................Ordinary Shares
The Warrants of the Company are constituted by an instrument (the "Instrument")
dated _____________, 199____. Constitution of the Warrants and execution of the
Instrument by the Company was authorised by a resolution of the Board of
Directors of the Company passed on _____________, 199__.
THIS IS TO CERTIFY that the Warrantholder named above is the registered holder
of the right to subscribe in cash for the number of Shares and at the
subscription price per Share set out above on the terms and conditions set out
in the Instrument.
PRESENT when the )
Common Seal of )
MINMET plc )
was affixed hereto:- )
Director
Director/Secretary
10
<PAGE>
FIRST SCHEDULE TO THE CERTIFICATE
Notice of Exercise
To: The Directors
Minmet plc
We hereby exercise the Subscription Rights over _______________ of the Shares
(being Ordinary Shares) the subject of this Certificate and attach hereto a
bankers draft for (pound) _______, being the aggregate Subscription Price
payable in respect thereof.
Signed
Full Name
Address
11
<PAGE>
We hereby request that a Certificate for the said Shares be sent by post at our
risk to us at the first address shown above or to the agent lodging the
Certificate as mentioned below. We agree that the said Shares are accepted
subject to the Memorandum and Articles of Association of the Company.
Signed
Full Name
Address
Lodged by: (agent to whom certificate(s) should be sent).
Name of Agent
Address
* Specify percentage proportion
12
<PAGE>
SECOND SCHEDULE TO THE CERTIFICATE
The Conditions
This Warrant to subscribe for Ordinary Shares (the "Warrant") is constituted by
an instrument of the Company (the "Instrument") dated ________________, 199___.
Constitution of the Warrant and execution of the Instrument by the Company was
authorised by a resolution of the Board of Directors of the Company passed on
_______________, 199___. The Warrant is subject to the provisions of the
Instrument. Copies of the Instrument are available for inspection at the
registered office for the time being of the Company during normal business hours
on weekdays (excluding Saturdays and Bank Holidays). The Warrantholder is
entitled to the benefit of, is bound by and is deemed to have knowledge of, all
the provisions of the Instrument.
13
<PAGE>
SCHEDULE 2
Provisions as to transfer, transmission
and other matters
1. An accurate register of entitlement to the Warrants (the "Register") will
be kept by the Company and there shall be entered in the Register:
(a) the names and addresses of the persons for the time being
entitled to be registered as the holders of the Warrants;
(b) the number of Warrants held by every such registered holder;
(c) the number of Warrant Shares and the class the subject of the
Subscription Rights comprised in each such Warrant; and
(d) the date on which the name of every such registered holder is
entered in the Register in respect of the Warrants standing to
his name.
2. Any change in the name or address of any Warrantholder shall forthwith be
notified to the Company which shall cause the Register to be altered
accordingly. The Warrantholders or any of them and any person authorised by
any such Warrantholder shall be at liberty at all reasonable times during
office hours to inspect the Register and to take copies of or extracts from
the same or any part thereof.
3. The Company shall be entitled to treat the relevant Warrantholder as the
absolute owner of a Warrant and accordingly shall not, except as ordered by
a court of competent jurisdiction or as required by law, be bound to
recognise any equitable or other claim to or interest in such Warrant on
the part of any other person whether or not it shall have express or other
notice thereof.
4. Every Warrantholder will be recognised by the Company as entitled to his
Warrants free from any equity, set-off or cross-claim on the part of the
Company against the original or any intermediate holder of such Warrants.
5. (a) Subject only to compliance with the formal requirements set out in
the remainder of this Schedule, Warrants shall be freely transferable
individually or in any multiple to any member of the Warrantholders
group, meaning in relation to any Warrantholder, a company of which
the Warrantholder is a Subsidiary, or a Subsidiary of that
Warrantholder or a Subsidiary of a company of which the Warrantholder
or a Subsidiary of a company of which the Warrantholder is a
Subsidiary.
14
<PAGE>
(b) If a Warrantholder proposes to transfer any Warrants to any person
other than as described in paragraph 5(a) above, such Warrantholder
shall First give written notice to the Company of its intention to
transfer the said Warrants, the identity of the proposed transferee or
transferees and the price offered by such proposed transferee or
transferees for such Warrants ("Third Party Price") ("Transfer
Notice"). The Company shall within 21 days after the giving of the
Transfer Notice give written notice to such Warrantholder of whether
it consents to the proposed transfer of the said warrants it is
acknowledged that the Company may only withhold its consent where the
proposed transferee is involved in a business competitive to the
business of the Company. In the case of failure by the Company to give
such notice within such period and subject as aforesaid, the Company
shall be deemed to have given its consent to such transfer on the 21st
day after the giving of the Transfer Notice. If the Company gives
notice of refusal of its consent to such transfer on the basis that
the proposed transferee is involved in a business competitive to the
business of the Company as aforesaid the Company shall thereupon have
the right to acquire the Warrants, the subject of the Transfer Notice
for cash at the Third Party Price within 10 days after the giving of
notification of such refusal ("Purchase Option"). In the event (i) of
deemed consent as aforesaid or (ii) failure by the Company to exercise
the Purchase Option or (iii) that the Company by notice gives its
consent to such transfer, the refusal of consent by the Company to the
proposed transfer of the said Warrants shall be deemed revoked and the
Warrantholder may within 56 days from the date of receipt of consent
or deemed consent from the Company, transfer all of such Warrants for
a consideration not less than the price contained in Transfer Notice
to the person(s) named in the Transfer Notice and the directors shall
(subject to the other provisions of this Schedule) be obliged to
register such transfer(s).
6. Every transfer of a Warrant shall be made by an instrument of transfer in
the usual or common form or in any other form which may be approved for the
time being by the Directors.
7. The instrument of transfer of a Warrant shall be signed by or on behalf of
the transferor but need not be signed by or on behalf of the transferee.
The transferor shall be deemed to remain the holder of the Warrant until
the name of the transferee is entered in the Register in respect thereof.
8. The Directors may decline to recognise any instrument of transfer of a
Warrant unless such instrument is deposited at the registered office of the
Company accompanied by the Certificate for the Warrant to which it relates,
and such other evidence as the Directors may reasonably require to show the
right of the transferor to make the transfer. The Directors may waive
production of any Certificate upon production to them of satisfactory
evidence of the loss or destruction of such instrument together with such
indemnity as they may require.
15
<PAGE>
9. No fee shall be charged for any registration of a transfer of a Warrant
or for the registration of any other documents which in the opinion of
the Directors require registration.
10. The registration of a transfer shall be conclusive evidence of the
approval by the Directors of such transfer.
11. In the event of the death of a Warrantholder the survivors, or survivor
where the deceased was a joint holder, and the executors or
administrators of the deceased where he was a sole or only surviving
Warrantholder, shall be the only persons recognised by the Company as
having any title to his Warrants, but nothing herein contained shall
release the estate of a deceased Warrantholder (whether sole or joint)
from any liability in respect of any Warrant solely or jointly held by
him.
12. Subject to any other provision herein contained any person becoming
entitled to a Warrant in consequence of the death or bankruptcy of a
Warrantholder or otherwise than by transfer may, upon producing such
evidence of title as the Directors shall require, and subject as
hereinafter provided, be registered himself as holder of the Warrant.
13. Subject to any other provision herein contained, if the person so
becoming entitled shall elect to be registered himself, he shall
deliver or send to the Company a notice in writing signed by him
stating that he so elects. All the limitations, restrictions and
provisions herein contained relating to the right of transfer and the
registration of transfers of Warrants shall be applicable to any such
notice of election as aforesaid as if the death or bankruptcy of the
Warrantholder had not occurred and the notice of election were a
transfer executed by such Warrantholder
14. A person becoming entitled to a Warrant in consequence of the death or
bankruptcy of a Warrantholder shall be entitled to receive and may give
a good discharge for any moneys payable in respect thereof but shall
not be entitled to receive notices of or to attend or vote at meetings
of the Warrantholders or, save as aforesaid, to any of the rights or
privileges of a Warrantholder until he shall have become the registered
holder of the Warrant
15. Every Warrantholder shall register with the Company an address in
Ireland to which notices can be sent and if any Warrantholder shall
fail so to do notice may be give to such Warrantholder by sending the
same by any of the methods referred to in Paragraph 16 of this Schedule
to his last known place of business or residence or, if none, by
exhibiting the same for three days at the registered office for the
time being of the Company.
16. Notices and other communications to Warrantholders may be given by
personal delivery, prepaid letter by post (airmail in the case of an
address outside Ireland), or telex message. In proving service of any
notice or other communication seat by post it shall be sufficient to
prove that the envelope or wrapper containing the notice or other
communication was properly addressed and stamped and was deposited in a
post box or at the post office.
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17. A notice or other communication given pursuant to the provisions of
Paragraph 16 of this Schedule shall be deemed to have been served:-
(a) at the time of delivery, if delivered personally to the
registered address;
(b) on the second day following its posting, if sent by prepaid
letter by post to an address in Ireland;
(c) on the third day following its posting, if sent by prepaid
airmail letter to an address outside Ireland;
(d) on the day following the despatch of the telex, if sent by telex.
18. All notices and other communications with respect to Warrants standing in
the names of joint registered holders shall be given to whichever of such
persons is named first in the Register and such notice so give shall be
sufficient notice to all the registered holders of such Warrants.
19. Any person who, whether by operation of law, transfer or other means
whatsoever, shall become entitled to any Warrant shall be bound by every
notice in respect of such Warrant which prior to his name and address being
entered on the Register shall have been duly give to the person from whom
he derives his title to such Warrant.
20. Any notice or other communication given to a Warrantholder in accordance
with this Schedule shall, notwithstanding that such Warrantholder may then
be deceased and whether or not the Company has notice of his decease, be
deemed to have been duly served in respect of any Warrants whether held
solely or jointly with other persons by such Warrantholder until some other
person be registered in his stead as the holder or joint holder thereof and
such service shall for all purposes of these presents be deemed a
sufficient service of such notice or document on his or her executors or
administrators and all persons (if any) jointly interested with him in any
such Warrant.
21. When a given number of days' notice or notice extending over any other
period is required to be given, the day of service shall be included but
the day upon which such notice will expire shall not be included in such
number of days or other period. The signature to any notice to be given by
the Company may be written or printed.
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SCHEDULE 3
Provisions as to Meetings of Warrantholders
1. The Company at any time may, and upon a request in writing of the
Warrantholders holding Warrants conferring not less than 10 per cent of the
Aggregate Warrants Entitlements shall, convene a meeting of Warrantholders.
Every such meeting shall be held at such reasonably convenient and
appropriate place in the United Kingdom as the Directors may approve.
2. At least 21 days' notice of the meeting shall be given to Warrantholders.
The notice shall specify the day, time and place of the meeting and the
terms of the resolutions to be proposed.
3. A person (who may, but need not be, a Warrantholder) nominated in writing
by the Company shall be entitled to take the chair at every such meeting
but if no such nomination is made, or if at any meeting the person
nominated shall not be present within 15 minutes after the time appointed
for the holding of such meeting, the Warrantholders present shall choose
any person to be chairman.
4. At any such meeting any one person holding Warrants and/or being proxies
and being or representing in the aggregate Warrantholders registered as the
holders of Warrants conferring not less than 10 per cent. of the Aggregate
Warrants Entitlements shall (except for the purpose of passing an
Extraordinary Resolution) form a quorum for the transaction of business and
no business other than the choosing of a chairman shall be transacted at
any meeting unless the requisite quorum be present at the commencement of
business. The quorum at any such meeting for the passing of an
Extraordinary Resolution shall be one person holding Warrants and/or being
proxies and being or representing in the aggregate Warrantholders
registered as the holders of Warrants conferring not less than 50 per cent.
of the Aggregate Warrants Entitlements.
5. If within half an hour after the time appointed for any meeting, a quorum
is not present, the meeting shall, if convened upon the requisition of
Warrantholders be dissolved. In any other case it shall stand adjourned for
such period, not being less than 14 days or more than 28 days, and to such
time and place, as may be appointed by the chairman. At such adjourned
meeting one person present in person holding Warrants or being proxies
(whatever the Subscription Rights conferred by the number of Warrants so
held or represented) shall for all purposes form a quorum and shall have
the power to pass any resolution (including an Extraordinary Resolution)
and to decide upon all matters which could properly have been dealt with at
the meeting from which the adjournment took place had a quorum been present
at such meeting.
6. The chairman may with the consent of (and shall if directed by) any meeting
adjourn the same from time to time and from place to place but no business
shall be transacted at any adjourned meeting except business which might
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lawfully have been transacted at the meeting from which the adjournment
took place.
7. At least ten days' notice of any meeting adjourned through want of a quorum
shall be given to Warrantholders in the same manner as of an original
meeting, and such notice shall state the quorum required at such adjourned
meeting. Subject as aforesaid, it shall not be necessary to give any notice
of an adjourned meeting.
8. Every question submitted to a meeting shall be decided in the first
instance by a show of hands and in case of equality of votes the chairman
shall both on a show of hands and on a poll have a casting vote in addition
to the vote or votes (if any) to which the chairman may be entitled as a
Warrantholder or as a proxy.
9. At any meeting, unless a poll is demanded by the chairman or by one or more
Warrantholders (or by their proxies) being or representing in the aggregate
Warrantholders registered as the holders of Warrants conferring not less
than 10 per cent. of the Aggregate Warrants Entitlement (before or on the
declaration of the result of a show of hands), a declaration by the
chairman that a resolution has been carried or carried by a particular
majority or lost or not carried by any particular majority shall be
conclusive evidence of the fact without proof of the number or proportion
of the votes recorded in favour of or against such resolution.
10. If at any meeting a poll is so demanded, it shall be taken in such manner
and, subject as hereinafter provided, either at once or after any
adjournment, as the chairman directs, and the result of such poll shall be
deemed to be the resolution of the meeting at which the poll was demanded.
The demand for a poll shall not prevent the continuance of the meeting for
the transaction of any business other than the question on which the poll
has been demanded.
11. Any poll demanded at any meeting on the election of a chairman or on any
question of adjournment shall be taken at the meeting without adjournment.
12. The Company (through its representatives and legal and financial advisers)
shall be entitled to attend and speak at any meeting of Warrantholders.
Save as aforesaid, no person shall be entitled to attend or vote at any
meeting of Warrantholders or to join with others in requesting the
convening of such a meeting unless he is a Warrantholder or the duly
appointed proxy of a Warrantholder. Neither the Company nor any Subsidiary
of the Company shall be entitled to vote in respect of Warrants held by it
or on its behalf nor shall the holding of any such Warrants count towards a
quorum.
13. Subject as provided in paragraph 12 of this Schedule, at any meeting:-
13.1 on a show of hands every Warrantholder who is present in
person (or in the case of a corporation by a duly authorised
representative) and every person who is a proxy shall have one
vote; and
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13.2 on a poll every Warrantholder who is present in person or by
proxy as aforesaid shall have a number of votes equal to the
proportion (expressed as a percentage figure rounded up or, as
appropriate, down to the nearest one hundredth of one per
cent.) of the Aggregate Warrants Entitlement represented by
the Warrants of which he is the holder.
Any person entitled to more than one vote need not use all his votes or
cast all the votes to which he is entitled in the same way.
14. A proxy need not be a Warrantholder.
15. A meeting of Warrantholders shall in addition to all other powers (but
without prejudice to any powers conferred on other persons by this
Instrument) have the following powers exercisable by Extraordinary
Resolution namely.-
(a) power to sanction any compromise or arrangement proposed to be
made between the Company and the Warrantholders or any of them;
(b) power to sanction any proposal by the Company for the
modification, abrogation variation or compromise of, or
arrangement in respect of, the rights of the Warrantholders
against the Company whether such rights shall arise under these
presents or otherwise;
(c) power to sanction any proposal by the Company for the exchange or
substitution for the Warrants of, or the conversion of the
Warrants into, shares, stock, bonds, debentures, debenture stock
or other obligations or securities of the Company, or any other
body corporate formed or to be formed;
(d) power to assent to any modification of the provisions contained
in this Instrument which shall be proposed by the Company;
(e) power to authorise any person to concur in and execute and do all
such documents, acts and things as may be necessary to carry out
and give effect to any Extraordinary Resolution;
(f) power to discharge or exonerate any person from any liability in
respect of any act or omission for which such person may have
become responsible under this Instrument;
(g) power to give any authority, direction or sanction which under
the provisions of this Instrument is required to be given by
Extraordinary Resolution; and
(h) power to appoint any persons (whether Warrantholders or not) as a
committee or committees to represent the interest of the
Warrantholders and to confer upon such committee any powers or
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discretions which the Warrantholders could themselves exercise
by Extraordinary Resolution.
16. An Extraordinary Resolution shall be binding upon all the Warrantholders,
whether present or not present at such meeting, and each of the
Warrantholders shall be bound to give effect accordingly. The passing of
any such resolution shall be conclusive evidence that the circumstances of
such resolution justified the passing thereof.
17. The expression "Extraordinary Resolution" where used in this Instrument
means a resolution passed at a meeting of the Warrantholders duly convened
and held and carried by a majority consisting of not less than 75 per cent
of the votes cast upon a show of hands or, if a poll is duly demanded, by a
majority consisting of not less than 75 per cent. of the votes cast on a
poll.
18. Minutes of all resolutions and proceedings at every meeting shall be made
and duly entered in books to be from time to time provided for that purpose
by the Company, and any such minutes, if the same are signed by the
chairman of the meeting at which such resolutions were passed or
proceedings transacted or by the chairman of the next succeeding meeting of
the Warrantholders, shall be conclusive evidence of the matters therein
contained and, until the contrary is provided, every meeting in respect of
the proceedings of which minutes have been made and signed as aforesaid
shall be deemed to have been duly convened and held and all resolutions
passed or proceedings transacted thereafter to have been duly passed and
transacted.
19. Anything which, under the terms of this Instrument, may be done by
resolution passed at a meeting of the Warrantholders (including
specifically, but without limitation, the passing of an Extraordinary
Resolution) may be done, without a meeting and without any previous notice
being required, by resolution in writing signed by or on behalf of all the
Warrantholders who, at the date of such resolution, would be entitled to
attend and vote at such meeting. The signatures to any such resolution need
not be on a single document provided each is on a document which accurately
states the terms of the resolution. The date of the resolution means when
the resolution is signed by or on behalf of the last Warrantholder to sign.
This paragraph 19 shall be read subject to paragraph 13.2 of this Schedule.
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IN WITNESS WHEREOF the Company has caused its Common Seal to be hereunto affixed
on the dated first hereinbefore written.
PRESENT when the )
Common Seal of )
MINMET plc )
was affixed hereto )
Director
Director / Secretary
22
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Present when the Common Seal
was affixed hereto by
TOUCAN MINING LIMITED
in the presence of:-
Director
Director / Secretary
Executed by duly authorised officers of TOUCAN GOLD CORPORATION INC in
accordance with its bye laws and constitution:
Director
Director / Secretary
Present when the Common Seal
was affixed hereto by
ANAGRAM LIMITED
in the presence of:
Director
Director / Secretary
Present when the Common Seal
was affixed hereto by
MINMET PLC
in the presence of:
Director
Director / Secretary
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PRESENT when the COMMON SEAL )
of TOUCAN MINING )
LIMITED was affixed hereto )
Director:
Director/Secretary:
EXECUTED by a DULY )
AUTHORISED officer of )
TOUCAN GOLD CORPORATION )
INC in accordance with its by-laws )
and constitution )
PRESENT when the COMMON SEAL )
of MINMET PLC )
was affixed hereto )
Director:
Director/Secretary:
24
