POOLING AGREEMENT
THIS AGREEMENT is made effective this 24th day of October, 2002.
BETWEEN:
DALIAN XINDIE CHITIN CO. LTD., a corporation duly incorporated pursuant
to the laws of China, and having an office at No 00 Xxxxxxxx Xxxx,
Xxxxxxxxx Xxxxxxxx, Xxxxxx;
("Xindie")
OF THE FIRST PART
AND:
BIG BAR GOLD CORPORATION, a body corporate duly incorporated pursuant
to the laws of the Province of British Columbia and having an office
at 000 -000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0;
("Big Bar")
OF THE SECOND PART
WHEREAS:
A In connection with a Licensing Agreement dated October 24, 2002 between
Xindie and Big Bar (the "Licensing Agreement"), Big Bar has agreed to issue,
subject to TSX Venture Exchange ("Exchange") acceptance for filing, up to
12,000,000 common shares in its capital to Xindie (the "Shares");
B Xindie has agreed to place the Shares in a pool with a trustee
(the "Trustee") mutually acceptable to the parties hereto and the Exchange
upon and subject to the terms and conditions hereinafter more particularly
set out;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants and conditions hereinafter contained, the parties hereto
agree as follows:
1. POOLING OF SHARES
1.1 Xindie hereby agrees that upon the day the Shares are issued, Big Bar
shall retain and deliver the certificates representing the Shares to the
Trustee.
1.2 Xindie shall be entitled to a letter or receipt from the Trustee stating
the number of Shares represented by certificates held for it by the Trustee,
subject to the terms of this Agreement, but such letter or receipt shall not
be assignable.
2. RELEASE OF SHARES FROM POOL
2.1 The Trustee is hereby instructed to release such number of Shares to
Xindie from the pool (each a "Release") on a semi-annual basis based on the
following formula:
revenue received by Big Bar pursuant
Number of to Licensing Agreement Number of Shares
Shares = -------------------------------------- x Originally Pooled
Released total deemed consideration paid to
Xindie pursuant to Licensing Agreement
2.2 The releases described in paragraph 3 above shall be based on audited
statements of revenue and Share Release calculations prepared by Big Bar's
auditor, which Big Bar shall deliver to Xindie and the Trustee by August 31 of
the same calendar year by for the period from January 1 to June 30 and by
February 28 of the following calendar year for the period from July 1 to
December 31. Upon the receipt of such calculations, the Trustee shall release
the indicated number of Shares from the pool to Xindie.
2.3 Xindie or its agents shall have the right at all reasonable times,
including for a period of one month following the date of a Release, to
inspect such records, statements and returns and make copies thereof at its
own expense for the purpose of verifying the amount of a particular Release.
Xindie shall have the right to have such accounts audited by independent
auditors at its own expense.
2.4 Each Share Release calculation prepared by Big Bar's auditor shall be
final and not subject to adjustment unless Xindie delivers to Big Bar written
exceptions in reasonable detail within one month after the Xindie receives a
copy of the Share Release calculation the report. Xindie, or its representative
duly authorized in writing, at its expense, shall have the right to audit the
books and records of Big Bar related to the Share Release calculation to
determine the accuracy thereof, but shall not have access to any other books
andrecords of Big Bar. The audit shall be conducted by a chartered or
certified public accountant of recognized standing. Xindie shall have the
right to conditional access to Big Bar's books and records on execution of
a written agreement by Xindie's auditor that all information will be held in
confidence and used solely for purposes of audit and resolution of any disputes
related to a Share Release calculation. A copy of the Xindie's report shall be
delivered to Big Bar and the amount which should have been paid according to
Xindie's report, if acceptable to Big Bar, shall be paid forthwith.
2.5 All disputes arising out of or in connection with this Agreement,
or in respect of any Share Release calculation, shall be referred to and
finally resolved by arbitration under the rules of the British Columbia
International Commercial Arbitration Centre.
2.6 The appointing authority shall be the British Columbia International
Commercial Arbitration Centre and the case shall be administered by the
British Columbia International Commercial Arbitration Centre in accordance
with its "Procedure for Cases under the BCICAC Rules" at Vancouver, British
Columbia.
3. RETENTION OF CERTAIN SHAREHOLDER RIGHTS
3.1 Xindie may exercise voting rights attached to the Shares during the
currency of this Agreement.
3.2 Xindie may receive a dividend or other distribution on the Shares,
and elect the manner of payment from the standard options offered by Big Bar.
If the Trustee receives a dividend or other distribution on the Shares, the T
rustee will pay the dividend or other distribution to Xindie on receipt.
4. ADDITIONAL AGREEMENTS
4.1 Xindie hereby acknowledges that it shall be required to enter into
additional agreements restricting its ability to sell, transfer, assign,
mortgage or otherwise deal in any way with the Shares in accordance with
Exchange requirements, including, without limitation, executing an escrow
agreement in the form contained in the Exchange's Corporate Finance Manual
and known as "Form 5D - Escrow Agreement" and any additional requirements that
may be in effect from time to time.
4.2 It is contemplated that this Agreement will be replaced, as soon as
practicable with an agreement between Big Bar, Xindie and the Trustee, which
agreement shall be subject to Exchange acceptance for filing.
5. RESTRICTIONS ON TRANSFER
5.1 While Shares are subject to the pooling conditions of this Agreement,
Xindie shall not sell, deal in, assign, or transfer in any manner whatsoever
any of such Shares or beneficial ownership of or any interest therein, and the
Trustee shall not accept or acknowledge any transfer, assignment, declaration
or trust or any other document evidencing a change in legal or beneficial
ownership of or interest in such Shares, except as may be required by reason
of the bankruptcy of Xindie, in which case the Trustee shall hold the said
certificates for the Shares subject to this Agreement for whatever person or
persons, firm or corporation that may thus become legally entitled thereto.
5.2 Xindie acknowledges and covenants that notwithstanding the terms of
this Agreement, it shall comply with all restrictions from resale relating to
the Shares which are imposed by securities legislation and Exchange policy.
6. GENERAL PROVISIONS
6.1 This Agreement may be executed in several parts, and by facsimile,
in the same form and such parts so executed shall together constitute one
original Agreement and such parts, if more than one, shall be read together
and construed as if all the signing parties hereto had executed one copy of
this Agreement.
6.2 The parties hereto agree that in consideration of the Trustee agreeing
to act as trustee as aforesaid, Xindie does hereby covenant and agree from time
to time and at all times hereafter, well and truly to save, defend and keep
harmless and fully indemnify the Trustee, its successors and assigns, from and
against all loss, costs, charges, damages, and expenses which the said Trustee,
its successors and assigns may at any time or times hereafter bear, sustain,
suffer or be put to for or by reason or on account of its acting as trustee
pursuant to this Agreement.
6.3 It is further agreed by and between the parties hereto, and without
restricting the foregoing indemnity, that in case proceedings should hereafter
be taken in any Court respecting the Shares hereby pooled, the Trustee shall
not be obliged to defend any such action or submit its rights to the Court
until it shall have been indemnified by other good and sufficient security
in addition to the indemnity hereinbefore given against its costs of such
proceedings.
IN WITNESS WHEREOF Xindie and Big Bar have executed these presents
as and from the day and year first above written.
DALIAN XINDIE CHITIN CO. LTD. BIG BAR GOLD CORPORATION
per: /s/ Xxxx Xxxxx Xu per: /s/ Xxxxx Xxxxx
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Authorized Signatory Authorized Signatory
