EXHIBIT 2.1
Share Purchase Agreement
March 30, 2001
This Agreement has been entered into among:
HARBOR FAR EAST EXPLORATION, L.L.C., a legal entity under the laws of the
State of Delaware, USA (hereafter the "Seller"), represented by its Vice
President and Treasurer, Xxxxxx X. Xxxxxx, acting on the basis of a Power of
Attorney, dated March 29, 2001, and the Consent of its Sole Member, dated March
12, 2001;
CLOSED JOINT STOCK COMPANY "ARTEL STARATELEI "AMUR", a Russian legal entity
(hereafter the "Buyer"), represented by its General Director, Xxxxxx X.
Xxxxxxxx, acting on the basis of its charter; and
CLOSED JOINT-STOCK COMPANY "TAS-YURJAH" MINING COMPANY", a Russian legal
entity (hereafter the "Company"), represented by its General Director, Xxxxxxxx
X. Kravstov, acting on the basis of its charter.
The Seller, the Buyer and the Company shall be referred to collectively
hereafter as the "Parties".
DEFINITIONS
Unless otherwise provided under this Agreement, the following terms shall
have the following definitions:
AGREEMENT - this Share Purchase Agreement
SHARES - One hundred thirty-eight (138) shares of common stock of Closed
Joint Stock Company "Tas-Yurjah" Mining Company", with a par value of 1000 (one
thousand) rubles each, constituting 94.5% (ninety-four and five tenths of a
percent) of the Authorized Capital of the Company.
The shares have been issued in book-entry form.
The emission of these shares was registered by the Financial Administration
of the Khabarovsk Territory Administration on March 20, 1997. The state
registration number of the issuance of these shares is 22-1-678.
A report regarding the results of the placement of these shares was
registered by the Financial Administration of the Khabarovsk Territory
Administration on March 20, 1997.
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As of the date of execution of this Agreement, the Shares belong to the
Seller (with rights of ownership), are not subject to any pledges and are not
encumbered by any other rights of third parties, and are not under dispute or
under arrest, as confirmed by an Extract from the Company's shareholders'
register provided by the Company's registrar.
LOAN AGREEMENT - Loan Agreement of February 14, 1997 entered into between
the Company and State Street Bank and Trust Company, a legal entity in
accordance with the laws of the Commonwealth of Massachusetts, USA (the
"Lender"), as well as the First Amendment to this Loan Agreement, entered into
by the parties thereto on April 10, 1998 and the Second Amendment to this Loan
Agreement, entered into by the parties thereto on June 30, 1999.
ARTICLE 1. SUBJECT OF THE AGREEMENT
1.1. The Seller shall be obligated to transfer ownership of the Shares to the
Buyer, and the Buyer shall be obligated to accept and pay for the Shares
according to the terms and conditions of this Agreement.
ARTICLE 2. PURCHASE PRICE AND PAYMENT PROCEDURES
2.1. The Purchase Price for the Shares shall be US$531,948.00 (five hundred
thirty-one thousand nine hundred forty-eight US Dollars).
2.2. The Purchase Price is firm.
2.3. Payment for the Shares, as well as other payments contemplated under this
Agreement, except for payments under the Loan Agreement provided for under
Section 3.1.2 below, shall be made in Russian rubles according the
exchange rate in effect at the Central Bank of the Russian Federation on
the date the corresponding amounts are transferred out of the
correspondent account of the payor's bank
2.4. The date of performance of any monetary obligations under this Agreement
(the Payment Date) shall be date the corresponding amounts are transferred
into the account of the payee.
ARTICLE 3. CONDITIONS PRECEDENT TO THE SALE OF SHARES
3.1 The Buyer shall not be obligated to pay the Seller the Purchase Price for
the Shares, and the Seller shall not be obligated to transfer the Shares
to the Buyer until all of the following conditions precedent (the
"Conditions Precedent") have been fulfilled:
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3.1.1. PROVISION OF A SPECIAL PURPOSE LOAN TO THE COMPANY
In order for the Company to perform the terms and conditions of Section
3.1.2. below, the Khabarovsk Branch of the Bank of Foreign Trade
"Vneshtorgbank" (hereafter "Vneshtorgbank") shall provide the Company with
a special purpose loan, on the basis of a corresponding loan agreement, in
an amount sufficient for the performance by the Company in full of its
obligations to State Street Bank and Trust Company under Section 3.1.2,
including it obligation to pay all principal and accrued interest
outstanding under the Loan Agreement as of the date of final repayment by
the Company to State Street Bank and Trust Company, as well as performance
of its obligations to obtain foreign currency (US Dollars) and to pay
related banking fees, which although not specifically mentioned the Loan
Agreement, is necessary in order for the Company to perform its primary
obligations.
The Buyer shall be obligated to provide assistance in obtaining this
special purpose loan, and, toward this end, shall guaranty such loan.
3.1.2 PREPAYMENT OF LOAN
In order to perform the terms and conditions for prepayment of indebtedness
under the Loan Agreement, the Company shall be obligated to repay State
Street Bank and Trust Company all loan amounts received under the Loan
Agreement, as well as all accrued interest payable on such amounts under
the Loan Agreement as of the date of repayment. The repayment of the loan
and accrued interest thereon shall be made by the Company with the funds
received from Vneshtorgbank in accordance with Section 3.1.1 above.
The payment of these amounts shall be made in accordance with the terms of
the Loan Agreement and on the basis of a letter from State Street Bank and
Trust Company agreeing to prepayment of the loan and accrued interest
thereon under the Loan Agreement.
As of April 30, 2001, the anticipated amount of principal outstanding under
the Loan Agreement will be US$6,029,367.00 (six million twenty-nine
thousand three hundred sixty-seven US Dollars) and the anticipated amount
of accrued interest outstanding thereon will be US$1,938,685.00 (one
million nine hundred thirty-eight thousand six hundred eighty-five US
Dollars). Interest has accrued and will continue to accrue on the
principal amount of the loan outstanding under the Loan Agreement at the
rate of LIBOR + 4% per annum until such time as such loan is repaid in
full.
The proper performance by the Company of the terms and conditions of this
section and, accordingly, the terms and conditions of prepayment of the
loan under the Loan Agreement, shall be confirmed by letters exchanged
between the Company and State Street Bank and Trust Company in which the
parties confirm the payment of all amounts due and owing under the Loan
Agreement, the absence of any mutual claims, and the fact of early
termination of the Loan Agreement.
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3.1.3. WAIVER BY JSC "DALPLAZ" OF A RIGHT OF FIRST REFUSAL TO PURCHASE THE
SHARES
In accordance with the requirements of the Federal Law "On Joint Stock
Companies", Joint Stock Company "Dalplaz" Mining Company" ("Dalplaz"), as a
shareholder of the Company, shall have a right of first refusal to purchase
the Shares being sold. Insofar as the sale of the Shares to the Buyer is
possible only after Dalplaz refuses to buy the Shares, the Parties shall
jointly conduct negotiations with Dalplaz with the aim of obtaining from
Dalplaz a document (Minutes of a Board of Directors Meeting) confirming
such refusal.
3.2 The fact of performance of all of the above referenced Conditions Precedent
shall be confirmed by an Act on Performance of Conditions Precedent.
3.3. The Conditions Precedent set forth in this Article shall be performed no
later than April 30, 2001.
In the event the Parties do not agree otherwise, the failure to perform all or
some of the Conditions Precedent within the time frame set forth above shall
give the Seller the right to unilaterally refuse to perform its obligations
under this Agreement.
ARTICLE 4. OBLIGATIONS OF THE PARTIES
4.1 THE COMPANY SHALL BE OBLIGATED:
4.1.1 To enter into a loan agreement with Vneshtorgbank in accordance with
Section 3.1.1 above.
4.1.2 To prepay all of its indebtedness under the Loan Agreement using the
loan obtained from Vneshtorgbank.
After the performance by the Parties of all the Conditions Precedent to the sale
of Shares, the Parties shall proceed with the purchase and sale of the Shares
and toward this end shall assume the following obligations:
4.2 THE BUYER SHALL BE OBLIGATED:
4.2.1 In accordance with the requirements of Article 18 of the Federal
Law of the Russian Federation "On competition and limitation of
monopolistic activity in the markets for goods", to ensure that the
preliminary approval of antimonopoly authorities for the acquisition
of the Shares by the Buyer is obtained.
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4.2.2 Within 15 (fifteen) business days after the date of receipt of an
original Act on Performance of Conditions Precedent, pay for the
Shares in full, by transferring the Purchase Price to the Seller's
bank account indicated by the Seller to the Buyer in writing
(Section 4.3.3 below).
The Buyer shall be considered to have fulfilled its obligations with
respect to payment for the Shares as of the moment the entire amount
of the Purchase Price has been transferred into the Seller's bank
account (hereafter the "Share Payment Date").
4.2.3 Perform all actions necessary in order to register the Buyer in the
Company's Shareholders Register as the owner of the Shares for its
own account.
4.3 THE SELLER SHALL BE OBLIGATED:
4.3.1 Within 2 (two) business days after the date of performance of the
condition precedent set forth in Section 3.1.2 above, to sign on
Seller's behalf, and to transfer to the Buyer, the Act on
Performance of Conditions Precedent provided for in Section 3.2
above.
4.3.2 Within 3 (three) business days after the Share Payment Date, to
provide to the Buyer, in accordance with agreed upon procedures,
documents necessary for registering in the Company's shareholders'
register the transfer of rights to the Shares to the Buyer, namely:
1) an original Transfer Order on the basis of which a notation will
be made in the Company's shareholders' register regarding the
transfer of ownership rights to the Shares to the Buyer, and
2) a notarized copy of a document confirming the rights of the
authorized representative of the Seller to sign the Transfer
Order (Consent dated November 20, 2000 regarding the appointment
of Xxxxxxx X. Xxxxxx as President of Harbor Far East
Exploration, L.L.C.).
4.3.3 In order to ensure that payment for the Shares can be made, to open
a "K" type account in an authorized Russian bank and to inform the
Buyer of the requisites for this account in a timely fashion.
ARTICLE 5. THE MOMENT OF TRANSFER OF OWNERSHIP RIGHTS TO THE SHARES
5.1 The rights of ownership of the Shares shall be transferred to the Buyer as
of the moment the corresponding notation is made to the account of the
Buyer in the Company's shareholders' register.
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5.2. The rights associated with the Shares shall be transferred to the Buyer as
of the moment the rights of ownership of the Shares are transferred.
ARTICLE 6. LIABILITY OF THE PARTIES
6.1 In the event of failure by the Parties to perform all or some of the
Conditions Precedent and the refusal, in this regard, by any Party to
complete the transactions contemplated herein with respect to the purchase
and sale of Shares, none of the Parties will have grounds to bring any
claims with respect to the other Party or Parties to this Agreement.
6.2 In the event the Parties perform all the Conditions Precedent stipulated
under this Agreement and the Buyer delays payment for the Shares beyond the
time frame set forth in Section 4.2.2 of this Agreement, the Seller shall
have the right to demand, and the Buyer shall be obligated on the basis of
such demand to pay the Seller, a fine in the amount of 0.02% (two one
hundredths of a percent) of the sum of the delayed payment for each day of
delay, and the amount of the fine shall be payable simultaneously with the
principal amount. This provision shall not be construed as an obligation of
the Seller to demand payment of such fine or as an obligation of the Buyer
to pay such fine without a written demand therefor from the Seller.
6.3 In the event the Buyer fails to perform its obligations set forth in
Section 4.2.1 above (obtaining the preliminary approval of this transaction
from federal antimonopoly authorities) and as a result the Seller incurs
damages, including damages incurred as a result of this Agreement being
deemed null and void, the Buyer shall be obligated to indemnify the Seller
in full for such damages.
ARTICLE 7. WAIVER OF CLAIMS
7.1 After the performance by the Parties of all obligations set forth in this
Agreement, the Seller, on the one hand, and the Company and the Buyer, on
the other hand, shall waive all material and other claims toward the other
in connection with:
1. This Agreement;
2. The participation of the Seller in the Company as a shareholder; and
3. The participation of the Seller as a party in any other transactions
entered into with the Company.
ARTICLE 8 ARBITRATION
8.1 In the event any dispute, controversy or claim arising out of this
Agreement or in connection with this Agreement or its breach, invalidity or
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termination, cannot be resolved through mutual negotiations among the
parties, such dispute shall be submitted for resolution to the Arbitration
Institute of Stockholm Chamber of Commerce (Sweden) and shall be finally
settled by arbitration in accordance with the Rules of such Institute by
three arbitrators. The arbitration shall be conducted in the city of
Stockholm.
The language of the arbitration shall be English
The arbitrators shall have the right to proceed to an award notwithstanding
the failure of the other party (parties) to participate in the proceedings.
The prevailing party shall be entitled to an award of reasonable attorney
fees incurred in connection with the arbitration in such amount as may be
determined by the arbitrators. The award of the arbitrators shall be the
sole and exclusive remedy of the parties.
ARTICLE 9 FORCE MAJEURE
9.1 The Parties shall not be liable for failure, in part or in full, to perform
their obligations under this Agreement if such failure is the result of a
force majeure event, namely: fire, flooding; earthquakes, wars acts or
other actions of bodies of state power and management of the Russian
Federation and the United States of America or other circumstances beyond
the Parties' control that arise after the execution of this Agreement and
that the Parties could not foresee or avoid, provided that these
circumstances directly influenced the performance of the Parties'
obligations under this Agreement.
9.2 In the event of an occurrence of a force majeure event, the time frame for
performance by the Parties affected by such event of their obligations
under this Agreement shall be extended by the period of time during which
such event and its results remain in effect.
9.3 In a force majeure event continues for more than 4 (four) months or when it
becomes clear that the results of such event will remain in effect beyond
this period, the Parties shall conduct negotiations with the aim of
identifying acceptable alternative means of performing this Agreement and
achieving the corresponding undertakings hereunder. If such an agreement is
not achieved, any of the Parties shall have the right to unilaterally
refuse to perform its contractual obligations hereunder.
ARTICLE 10 NOTICES
10.1 All notices and correspondence contemplated by or permitted under this
Agreement shall be in writing and shall be sent to the addresses indicated
below:
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If to the Seller: Harbor Far East Exploration, L.L.C.
Xxx Xxxxxxx Xxxx Xxxxxxxxxxx
Xxxxxx, XX 00000
XXX
Tel: 0-000-000-0000
Fax: 0-000-000-0000
Attention: President
If to the Buyer: Closed Joint Stock Company "Artel Staratelei "Amur"
Vostochnoe shosse, 10
Khabarovsk 680014
Russian Federation
Tel: 0-0000-00-00-00
Fax: 0-0000-00-00-00
Attention: General Director
If to the Company: Closed Joint-Stock Company "Tas-Yurjah" Mining Company"
xx. Xxxxxxxxxxxxxx, 00, xxxxxx 000
Xxxxxxxxxx 000000
Xxxxxxx Federation
Tel/Fax: 0-0000-000000
Attention: General Director
10.2 Notices (or other correspondence) shall be considered to have been
received t10 days after transmittal to a courier service (postage prepaid,
return receipt requested) or, if the notice is sent by fax, on the date
indicated on the received (sent) fax copy.
ARTICLE 11 MISCELLANEOUS
11.1 This Agreement shall be governed in accordance with the laws of the
Russian Federation.
11.2 Except as otherwise expressly provided herein, each Party will pay all
fees and expenses (including, without limitation, legal and accounting
fees and expenses) that it incurs in connection with the transactions
contemplated hereby.
11.3 Except as may be required by applicable law or the rules of any
securities exchange or regulatory body, the parties agree that, prior to
the transfer of the Shares by the Seller to the Buyer hereunder, any and
all general public announcements or other general public communications
concerning this Agreement and the purchase and sale of the Shares by the
Buyer and Seller hereunder shall be subject to the mutual agreement of the
Parties.
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11.4 All amendments, modifications and attachments to this Agreement
shall be in writing and shall be properly executed by authorized
representatives of the Parties.
11.5 The invalidity of any provision of this Agreement shall not affect the
validity of the other provisions of this Agreement.
11.6 This Agreement constitutes the full agreement among the Parties with
respect to the subject matter of this Agreement and supercedes all prior
oral and written understandings, promises and agreements among the
Parties.
11.7 This Agreement shall enter into effect as of the date of its execution and
shall remain in effect until performance by the Parties of their
obligations arising out of the provisions of this Agreement.
11.8 This Agreement has been executed in 6 counterparts (3 counterparts in
Russian and 3 counterparts in English), all having equal legal force, with
one counterpart in each language for each Party. In the event of a
discrepancy between the Russian and English texts, the English language
text shall take precedence.
SIGNATURES OF THE PARTIES
FOR THE SELLER FOR THE BUYER
Harbor Far East Exploration, L.L.C. Closed Joint Stock Company
"Artel Staratelei "Amur"
/s/ Xxxxxx X.Xxxxxx /s/ Xxxxxx X.Xxxxxxxx
------------------- ---------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxxxx
Vice President and Treasurer General Director
(by Power of Attorney, dated March 29, 2001)
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxxx
Chief Accountant
FOR THE COMPANY
Closed Joint-Stock Company "Tas-Yurjah" Mining Company"
/s/ Xxxxxxxx X. Kravstov
------------------------
Xxxxxxxx X. Kravstov
General Director
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/s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Deputy General Director
/s/ Xxxxx X. Katanaeva
----------------------
Xxxxx X. Katanaeva
Chief Accountant
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