Exhibit 10.31
SHARE PURCHASE AGREEMENT
THIS AGREEMENT dated effective March 27, 2001
AMONG:
BELMONT RESOURCES INC. having a business address of Xxxxx 000
- 000 Xxxx Xxxxxx Xxxxxxxxx, X.X. X0X 0X0,
(the "Vendor")
OF THE FIRST PART
AND:
EUROGAS, INC., having a business address of Xxxxxxxxxxx 00,
Xxxxxx 00-000, Xxxxxx
(the "Purchaser")
OF THE SECOND PART
AND:
ROZMIN s.r.o., having a business address of Xxxxxxxxxx 000,
Xxxxxxx 00000, Xxxxxx Xxxxxxxx
OF THE THIRD PART
WHEREAS:
A. The Purchaser and the Vendor are shareholders of Rozmin s.r.o., a
company incorporated pursuant to the laws of Slovakia and joint
venture partners in the development of a certain talc industrial
mineral deposit located near Gemerska Poloma;
B. The Vendor holds a 57% equity interest in Rozmin s.r.o. equal to a
paid up capital amount of 228,000 SKK, which the Purchaser wishes to
purchase on the terms and conditions described herein.
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of one dollar (the
receipt and sufficiency of which is hereby acknowledged) and the mutual
promises contained herein the parties agree as follows:
ARTICLE 1.
Definitions
1.1 In this Agreement:
(a) "Closing" means the closing of the purchase and sale of the
Shares and certain other matters disclosed herein;
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(b) "Commercial Production" means the point when talc industrial mineral has
completed mine extraction, crushing, classifying and/or milling and available
to sell to the consumer market.
(c) "Deposit" means that certain talc industrial mineral deposit
located near Gemerska Poloma, the mineral extraction rights of which are held
by Rozmin s.r.o.
(d) "Encumbrances" means mortgages, charges, pledges, security
interests, liens, encumbrances, actions, and claims of any nature whatsoever;
(e) "Purchase Price Shares" means 12,000,000 common shares in
the capital stock of the Purchaser; and
(f) "Shares" means a 57% equity interest in the capital stock of
Rozmin s.r.o. equal to a paid up capital amount of 228,000 SKK.
ARTICLE 2
Purchase And Sale
2.1 Purchased Shares. Relying upon the representations and warranties
herein contained, and on and subject to the terms and conditions
hereof, the Vendor will sell to the Purchaser and the Purchaser will
accept and acquire from the Vendor the Shares in consideration of:
(a) the Purchase Price Shares;
(b) the Purchaser hereby undertaking to register and qualify, at
its expense, the Purchase Price Shares under the Securities
Act of 1933 (United States), which registration and
qualification shall be carried out by making the necessary
filings with the Securities and Exchange Commission ("S.E.C")
within 30 days from the date this Agreement is approved by
the Canadian Venture Exchange;
(c) the Purchaser hereby granting the right to the Vendor to
require the Purchaser to register and qualify, at the expense
of the Purchaser, the Purchase Price Shares under the
Securities Act of 1933 (United States) at any time;
(d) Rozmin s.r.o. hereby granting a royalty to the Vendor of 2%
calculated on the gross sale revenue of any talc sold with
such royalty to be paid on March 31, June 30, September 30
and December 31 of each year of the mining life of the
Deposit;
(e) the payment by the Purchaser to the Vendor of a US$100,000
non-refundable advance royalty (the "US$100,000 NRAR") within
30 days of the execution of this Agreement by all parties.
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ARTICLE 3
Representations, Warranties And Covenants Of the Vendor
3.1 Covenants, Representations and Warranties. The Vendor covenants,
represents and warrants to the Purchaser that now and at Closing:
(a) the Vendor is the registered and beneficial owner of the
Shares and have a good and marketable title to the Shares
free and clear of all mortgages, liens, charges, security
interests, adverse claims, charges, encumbrances and demands
whatsoever;
(b) no person, firm or corporation has any agreement or option or
any right or privilege, whether by law, pre-emption or
contract, that is capable of becoming an agreement or option
for the purchase of the Shares; and
(c) subject to the right of the Vendor to sell the Purchase Price
Shares in any quotation service or stock market in which the
shares of the Purchaser are traded at any time, the Purchaser
will have the right to buy-back any unsold Purchase Price
Shares (up to 6,000,000) at US$2.00 per share within one year
of the date of execution of this Agreement by all parties;
and providing the Purchaser has delivered 30 days written
notice to the Vendor of Purchasers intent to buy-back.
ARTICLE 4
Representations, Warranties And Covenants Of
the Purchaser and Rozmin s.r.o.
4.1 Covenants, Representations and Warranties. The Purchaser covenants,
represents and warrants to the Vendor that now and at the Closing:
(a) it has the full authority to enter into this Agreement;
(b) if the average weighted trading price of the shares of the
Purchaser as quoted on the NASD OTC market is less than
US$0.30 for any 10 trading day period within one year of the
date of execution of this Agreement by all parties, then the
Purchaser will issue to the Vendor that number of common
shares equal to 1,000,000 multiplied by the following factor:
(US$0.30-(10 day ave. w. tr. price))/0.05
(c) in the event the Vendor is unable from the sale of the
Purchase Price Shares to recover 125% of its initial
investment in the Deposit equal to CDN$3,000,000 (based on an
initial investment of CDN$2,400,000) within one year of the
date of execution of this Agreement by all parties due to
depressed market conditions or a depressed trading price then
the Purchaser shall within 10 business days of the written
request by the Vendor issue such additional common shares to
compensate for any shortfall from the CDN$3,000,000, with the
deemed price of such shares to be the average weighted
trading price for the 10 day period prior to the date of
receipt of the written notice by the Purchaser;
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(d) the Purchaser agrees to arrange the necessary financing to
place the Gemerska Poloma talc deposit into Commercial
Production within one year from the date of execution of this
Agreement by all parties, however if this is not accomplished
(other than for reasons beyond the Purchaser's control) then
the Purchaser will pay the Vendor an advance royalty of
US$10,000 per month for each month of delay in achieving
commercial production;
(e) the Purchaser will be responsible for the Vendor's share of
the working capital budget of Rozmin s.r.o. from January 1,
2001 as well as any investment capital expenses incurred and
outstanding since the start of the surface installations;
(f) during the period of obtaining regulatory approval from the
Canadian Venture Exchange, the Purchaser will use its best
efforts to keep Rozmin s.r.o. and the Deposit in good
standing with all applicable laws and regulations;
4.2 Covenants, Representations and Warranties. Rozmin s.r.o. covenants,
represents and warrants to the Vendor that now and at the Closing:
(a) Rozmin s.r.o. will keep true and accurate records of its
operations and sales;
(b) the Vendor shall at all times have the authority to inspect
the Deposit and the facilities related to the Deposit and to
audit any records related to the sale of talc or affecting
royalties payable to the Vendor.
ARTICLE 5
Survival Of Representations, Warranties
And Covenants, And Indemnification
5.1 Survival and Indemnification. The representations, warranties and
covenants made by Rozmin s.r.o., the Vendor and the Purchaser in this
Agreement will survive any Closing and, notwithstanding such Closing
or any investigation made by or on behalf of Rozmin s.r.o., the
Vendor, the Purchaser or any other person acting on their behalf, will
continue in full force and effect.
ARTICLE 6
Closing
6.1 Within 30 days of the date of approval by the Canadian Venture Exchange
of the transactions described in this Agreement the Vendor shall
deliver In trust to the solicitor (the "Trust") for Rozmin s.r.o. any
and all transfer documentation necessary for the transfer of the Shares
to the Purchaser against payment of the Purchase Price Shares and the
US$100,000 NRAR (if not already paid). The terms of the Trust are
that: the ownership of the Shares shall not pass to the Purchaser; and
b) no instructions to proceed with the share transfer in the Slovak
Republic District Court will be given to the Rozmin s.r.o. Solicitor,
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unless and until the Vendor has received 125% of its initial
investment equal to CDN $3,000,000 through the sale of the Purchase
Price Shares.
ARTICLE 7
Miscellaneous
7.1 Appointments. Due to the Vendor by virtue of this Agreement receiving
12,000,000 common shares of the purchaser, as well as previously
holding 2,500,000 warrants to purchase an additional 2,500,000 shares
of the Purchaser at a price of US$0.40 per share; the Vendor shall
have the right to appoint one director of the Vendor to the Purchasers
Board. Such appointment will not take place until Canadian Venture
Exchange approval of this Agreement. Should the Vendor proceed with
such appointments the director shall remain until the next Annual
General Meeting of the Purchaser, however such term will not be less
than one year. The Purchaser also agrees that during the term of this
Agreement to coordinate all financial statements, 10Q's 10K or other
S.E.C. related matters with the Chief Financial Officer of the Vendor.
7.2 Arbitration. Any dispute between the parties in respect of the
interpretation of this Agreement or any matter to be agreed upon under
this Agreement, or otherwise arising under this Agreement will be
determined by arbitration. Either party may, by written notice to the
other as provided herein, demand arbitration of any dispute under this
Agreement. Upon a demand for arbitration, each party will, within 10
days after the date on which notice of the demand is given, appoint an
arbitrator and the 2 arbitrators so appointed will choose a third
arbitrator. If either party fails to appoint an arbitrator, the
arbitrator appointed by the other party will proceed to determine the
dispute as sole arbitrator. If the arbitrators appointed by the
parties do not within 3 days after they have both been appointed
agree on a third arbitrator, the third arbitrator will be appointed
pursuant to the Commercial Arbitration Act (British Columbia).
The decision of the arbitrator or the arbitrators or a majority
of them will be final and binding upon the parties.
7.3 Further Assurances. Each of the parties hereby covenants and agrees
that at any time and from time to time either before or after the
Closing it will, upon the request of the other party, do, execute,
acknowledge and deliver or cause to be done, executed, acknowledged
and delivered all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be required for
the better carrying out and performance of all the terms of this
Agreement.
7.4 Notice. Any notice required or permitted to be given or delivery
required to be made to any party may be effectively given or delivered
if it is delivered personally or by telex or telecopy at the addresses
or telephone numbers set out above or to such other address or
telephone number as the party entitled to or receiving such notice may
notify the other party as provided for herein. Delivery shall be
deemed to have been received:
(a) the same day if given by personal service or if transmitted
by fax; and
(b) the fifth business day next following the day of posting if
sent by regular post.
7.5 Governing Law. This Agreement will be governed by and be construed
in accordance with the laws of British Columbia.
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7.6 Successors and Assigns. This Agreement will be binding upon and enure
to the benefit of the parties hereto and their respective successors
and permitted assigns as the case may be.
7.7 Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes all prior letters of intent,
agreements, representations, warranties, statements, promises,
information, arrangements and understandings, whether oral or written,
express or implied. In the event of any conflict or ambiguity in the
interpretation of any provisions as between this Agreement and any
translation of any or all of this Agreement, the English version of
the provisions this Agreement shall prevail.
7.8 Time of the Essence. Time will be of the essence.
7.9 Amendment. No modification or amendment to this Agreement may be
made unless agreed to by the parties thereto in writing.
7.10 Severability. In the event any provision of this Agreement will be
deemed invalid or void, in whole or in part, by any court of competent
jurisdiction, the remaining terms and provisions will remain in full
force and effect.
7.11 Headings. The headings contained herein are inserted for convenience
only and will not be construed as part of the Agreement.
7.12 Counterparts. This Agreement may be executed by facsimile and in any
number of counterparts with the same effect as if all parties to this
Agreement had signed the same document and all counterparts will be
construed together and will constitute one and the same instrument,
and any facsimile signature shall be taken as an original.
IN WITNESS WHEREOF the parties hereto have duly executed this Agreement as
of April 17th , 2001.
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BELMONT RESOURCES INC. EUROGAS, INC.
/s/ Xxxx Xxxxx /s/ Xxxxxxx X. Andraczke
------------------------------ -------------------------------
Per: Authorized Signatory Per: Authorized Signatory
Name: Xxxx Xxxxx Name: Xxxxxxx X. Andraczke
ROZMIN s.r.o.
/s/ Ondrej Rozloznik
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Per: Authorized Signatory
Name: Ondrej Rozloznik
