21 March 1997
Fenway Resources, Ltd.
Suite 000, 000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx XX
Xxxxxx
Re: Amendment to MOA and other Agreements
Gentlemen:
This is to confirm and acknowledge that we hereby amend any and all prior
agreements between Fenway Resources Ltd. ("Fenway") and Central Palawan Mining
and Industrial Corporation ("CPMIC"), Palawan Star Mining Ventures Inc.
("Palawan Star") and Pyramid Hill Mining and Industrial Corp. ("Pyramid Hill"),
insofar as and in accordance with the terms and amendments set forth below:
(A) Reference and Interpretation
CPMIC, Palawan Star and Pyramid Hill shall be collectively referred to as the
"Consortium". For all purposes of this Amending Agreement, all defined terms
have the same meanings as those set out in the Memoranda of Agreement and other
original agreements, except as otherwise expressly provided or unless the
context otherwise requires.
(B) Joint Venture Mining Company
It is agreed that a Joint Venture Mining Company ("JVMC") will be established as
a joint venture between Stradec (60% equity) and Fenway (40% equity). Neither
the Consortium nor each member of the Consortium will have any equity interest
in the JVMC and each member assigns and waives all rights to own and subscribe
to the shares of the JVMC. However, it shall be the sole responsibility of
Fenway to pay the Consortium 9% of Net Profits of the Joint Venture Mining
Company as consideration for the transfer of their interest in the each of the
Properties, including the mining claims, the MPSA and the ECC.
The Consortium shall have entitlement to royalty payments per tonne of raw
material quarried or mined from the Property belonging individually to CPMIC,
Palawan Star, Pyramid Hill and in turn each member of the Consortium waives and
surrenders their individual entitlement to such royalty payments in favour of
the Consortium.
The Property consisting of the mining claims, the MPSA and the ECC and all
rights, title and interest thereto shall be transferred by each member of the
Consortium to the JVMC and/or any entity it designates as consideration for the
royalty from the JVMC and the net profit interest in the JVCC. It is hereby
understood that each of the members of the Consortium agrees to be substituted
by the JVMC or any entity it designates in the MPSA filed for each Property
(C) Advances in relation to the Joint Venture Mining Company
For and in consideration of this Letter Amendment Agreement, Fenway shall upon
signing hereof pay the Consortium the amount of CANS$100,000.00 as advance
maintenance payment which shall be deducted from the royalty payable to the
Consortium. In addition, the JVMC hereby undertakes to advance to each member of
the Consortium the amount of CANS$100,000.00 as maintenance payment per year
payable in quarterly tranches as advance royalties, to be deducted from the
royalty of US$0.35 cents per tonne of raw material used in the manufacture of
cement from the Property belonging individually to CPMIC, Palawan Star and
Pyramid Hill. It is hereby understood that upon commencement of commercial
production of any one of the Properties of the Consortium, the advance royalty
payable by Fenway shall cease.
2
For this purpose, CPMIC is hereby appointed by Palawan Star and Pyramid Hill as
its duly authorised and sole representative to receive for and in behalf of the
Consortium the foregoing advance royalty.
The advance of the royalty and the royalty itself are obligations of the JVMC.
(D) Joint Venture Cement Manufacturing Company
Each member of the Consortium hereby assigns to and gives their unconditional
approval and consent to allow Strategic Alliance Development Corp. ("Stradec")
to be the sole Participant (who shall provide Production Funds) in a joint
venture cement manufacturing company (the "JVCC") which will be formed together
with Fenway for the development of the Palawan Cement Project as to the
manufacturing of cement and cement products. A Joint Venture Agreement will be
signed on or before 30 April 1997 between Stradec and Fenway with the conforme
of the Consortium, wherein Stradec will own 51% equity and Fenway will own 49%
equity in the JVCC. The Consortium agrees that it foregoes any representation in
the JVCC and in any project decision making.
(E) Interest in Net Profits of the Joint Venture Cement Manufacturing Company
The Consortium is entitled to 9% interest in the net profits of the JVCC,
payable to CPMIC as representative of the Consortium by Fenway out of its 49%
equity interest in the JVCC. The computation of the 9% net profit interest in
the JVCC shall be based on audited Financial Statements of the JVCC. CPMIC is
hereby appointed by Palawan Star and Pyramid Hill as its duly authorised and
sole representative to receive the Consortium's 9% interest in the net profits
of the JVCC. CPMIC warrants and represents that it is the duly authorised and
sole agent of Palawan Start and Pyramid Hill and acknowledges authority to
manage any properties or assets owned by Palawan Star and Pyramid Hill.
(F) Conditions Precedent
The parties also agree that the procurement of an Environmental Compliance
Certificate ("ECC") and a Mineral Production Sharing Agreement (AMPSA@) shall
be pre-conditions to the establishment of the JVMC and the JVCC for the
manufacturing of cement and that the June 30, 1997 production funding deadline
and the right to purchase 10% of Fenway's interest be waived in consideration of
Fenway's obligation in paragraph C and the Joint Venture Agreement in paragraph
D of this letter agreement.
(G) Share Options and Warrants
The Consortium members will have an option to purchase Fenway shares in the
manner described below, subject to the approval of the Vancouver Stock Exchange,
the British Columbia Securities Commission and any other Regulatory Authority.
The terms and conditions governing the release, the quantity and the pricing of
the options and warrants are:
------------------------------------------------------------------------------------------------
CPMIC PALAWAN STAR PYRAMID HILL
------------------------------------------------------------------------------------------------
1 million shares @CAN$2.00/sh 1 million shares @CAN$4.00/sh 4 million shares @CAN$2.0O/sh
------------------------------------------------------------------------------------------------
with 1:1 warrant @CAN$3.00/sh 1 million shares @CAN$5.00/sh
------------------------------------------------------------------------------------------------
exercisable at any time exercisable at any time exercisable at any time
------------------------------------------------------------------------------------------------
The common conditions governing both Stock Options and Warrants are as follows:
a) The timing of the release of the shares is subject to the release of the
senior financing or funding;
b) They are exercisable only upon receipt of the Production Funds;
c) The terms and payment are to be determined in a separate agreement to be
entered into between and among Fenway and the individual members of the
Consortium.
3
Subject to the approval by the relevant Securities Regulatory Authorities, it is
expressly understood that the stock options and warrants referred to above may
not be exercised by the Consortium until such time as Fenway has received the
Acceptable Funding Commitment, provided however, that Fenway may issue at any
time all or a portion of the warrants and the Consortium may exercise at any
time the warrants in the event the issued and outstanding share capital of
Fenway is increased in order to facilitate and/or meet the financing
requirements to undertake the Palawan Cement Project.
This agreement amends and supersedes all previous agreements, provisions or
contracts regarding the Palawan Cement Project only to the extent of the
amendments made herein. The obligations of each member of the Consortium under
the Memoranda of Agreement such as but not limited to any mining claims, the
MPSA and the ECC shall continue to be in force. All other terms and conditions
of the Memoranda of Agreement remain unaltered and in full force and effect.
This agreement shall be subject to the approval of the relevant Regulatory
Authorities.
CPMIC, Palawan Star and Pyramid Hill agree to conform to the joint venture
agreement to be signed and executed by Fenway and Stradec on or before 30 April
1997.
Very truly yours,
CENTRAL PALAWAN MINING AND INDUSTRIAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
[Name of Authorized Signatory]
as authorized by Board Resolution No._____dated____________1997 and notarized by
[Name of Notary Public], Document No.____, Page No.___, Book No.__, Series 1997.
PALAWAN STAR MINING VENTURES INC.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-----------------------------------
[Name of Authorized Signatory]
as authorized by Board Resolution No._____dated____________1997 and notarized by
[Name of Notary Public], Document No.____, Page No.___, Book No.__, Series 1997.
PYRAMID HILL MINING AND INDUSTRIAL CORP.
By: /s/ Xxxxxxxx X. Xxxxxxxx
-----------------------------------
[Name of Authorized Signatory]
as authorized by Board Resolution No._____dated____________1997 and notarized by
[Name of Notary Public], Document No.____, Page No.___, Book No.__, Series 1997.
4
Conformed To By:
FENWAY RESOURCES LTD.
By: X. Xxxx Xxxxxx
ACKNOWLEDGMENT
REPUBLIC OF THE PHILIPPINES)
Makati City )S.S.
BEFORE ME, this ___day of_____________1997, personally appeared the
following with their Passports/Community Tax Certificates, to wit:
NAME PASSPORT/CTC NO. DATE/PLACE ISSUED
CPMIC
XXXXX X. XXXXXXXXX Passport#AA.718589
CTC No. 12862552C 2-21-96/Paranaque
Palawan Star
XXXXXXX X. XXXXXX, XX. CTC No. 4993552 1-01-97/Puerto Princesa City
Pyramid Xxxx
XXXXXXXX X. XXXXXXXX Passport#J740786/Manila
CTC No. 8095763D 4-2-96/Manila
Fenway Resources Ltd.
X. Xxxx Xxxxxx Passport#XX0000000 3-8-93/Vancouver, Canada
known to me and to me known to be the same person who executed the foregoing
Letter Amendment Agreement and acknowledged that the same is their own free and
voluntary act and deed, and those of the entities they represent.
IN WITNESS WHEREOF, I have hereunto set my hand and notarial seal on the
date and in the place hereinbefore stated.
XXXXXX X. XXXX
Notary Public
Until December 31, 1997
PTR No. 8004952/1-16-97/Makati City
IBP No. 430572/1-24-97/Makati City
