ACQUISITION AGREEMENT
AMONG
BEKEM METALS, INC.
AND
KAZAKH METALS, INC.
AND
THE SHAREHOLDERS OF
KAZAKH METALS, INC.
DATED OCTOBER 24, 2005
TABLE OF CONTENTS
Acquisition Agreement.........................................................1
Agreement..................................................................1
Section 1 - Transfer of Shares..........................................1
Section 2 - Issuance of Exchange Stock to KAZAKH METALS Shareholders....1
Section 3 - Closing.....................................................2
Section 4 - Representations and Warranties by KAZAKH METALS and
Certain Shareholders......................................5
Section 5 - Representations and Warranties by BEKEM METALS..............9
Section 6 - Access and Information.....................................13
Section 7 - Covenants of KAZAKH METALS and Certain Shareholders........14
Section 8 - Covenants of BEKEM METALS..................................15
Section 9 - Additional Covenants of the Parties........................17
Section 10 - Survival of Representations, Warranties and Covenants.....18
Section 11 - Conditions Precedent to Obligations of Parties............18
Section 12 - Termination, Amendment, Waiver............................21
Section 13 - Miscellaneous.............................................23
Exhibit List.................................................................27
Schedule List................................................................27
ACQUISITION AGREEMENT
This Acquisition Agreement ("Agreement") is entered into as of this
24th day of October 2005 by and between BEKEM METALS INC., a Utah corporation
("BEKEM METALS"), and KAZAKH METALS, INC., a British Virgin Islands
international business company ("KAZAKH METALS"), and those shareholders
executing Offshore Restricted Securities Agreements attached hereto as Exhibit A
and listed in Exhibit B hereto, being all of the shareholders of KAZAKH METALS
as of the date this Agreement is executed.
PLAN OF EXCHANGE
The transaction contemplated by this Agreement is intended to be an
acquisition whereby BEKEM METALS will acquire 100% of KAZAKH METALS's issued and
outstanding common stock, (no par value) in exchange for 61,200,000 shares of
BEKEM METALS's common stock, $.001 par value (the "Exchange Stock"). Upon the
consummation of the exchange transaction and the issuance and transfer of the
Exchange Stock as set forth in Section 2 hereinbelow, KAZAKH METALS Shareholders
would hold approximately sixty-one percent (61%) of the then-outstanding common
stock of BEKEM METALS representing a controlling interest in BEKEM METALS. The
Exchange Transaction will result in KAZAKH METALS becoming a wholly-owned
subsidiary of BEKEM METALS.
AGREEMENT
Section 1
Transfer of Shares
1.1 All shareholders of KAZAKH METALS (the "Shareholders" or the "KAZAKH
METALS Shareholders"), as of the date of Closing as such term is
defined in Section 3 herein (the "Closing" or the "Closing Date"),
shall transfer, assign, convey and deliver to BEKEM METALS on the
Closing Date, certificates representing one hundred percent (100%) of
the KAZAKH METALS Stock. The transfer of the KAZAKH METALS Stock shall
be made free and clear of all liens, mortgages, pledges, encumbrances
or charges, whether disclosed or undisclosed, except as the KAZAKH
METALS Shareholders and BEKEM METALS shall have otherwise agreed in
writing.
Section 2
Issuance of Exchange Stock to KAZAKH METALS Shareholders
2.1 As consideration for the transfer, assignment, conveyance and delivery
of the KAZAKH METALS Stock hereunder, BEKEM METALS shall, at the
Closing issue to the KAZAKH METALS Shareholders, pro rata in accordance
with each Shareholder's percentage ownership of KAZAKH METALS
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immediately prior to the Closing, certificates representing 61,200,000
shares of BEKEM METALS Common Stock. The parties intend that the
Exchange Shares being issued will be used to acquire all outstanding
KAZAKH METALS Shares. To the extent that less than 100% of the KAZAKH
METALS Stock is acquired, the number of shares issuable to those KAZAKH
METALS Shareholders who have elected to participate in the exchange
described in this Agreement (the "Exchange") shall decrease
proportionately.
2.2 The issuance of the Exchange Stock shall be made free and clear of all
liens, mortgages, pledges, encumbrances or charges, whether disclosed
or undisclosed, except as the KAZAKH METALS Shareholders and BEKEM
METALS shall have otherwise agreed in writing. As provided herein, and
immediately prior to the Closing, BEKEM METALS shall have issued and
outstanding: (i) not more than 38,888,888 shares of Common Stock; and
(ii) shall have no preferred stock or other securities issued and
outstanding.
2.3 None of the Exchange Stock issued to the KAZAKH METALS Shareholders,
nor any of the KAZAKH METALS Stock transferred to BEKEM METALS
hereunder shall, at the time of Closing, be registered under federal
securities laws but, rather, shall be issued pursuant to an exemption
therefrom and be considered "restricted stock" within the meaning of
Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Act"). All of such shares shall bear a legend worded substantially as
follows:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act") and
are `restricted securities' as that term is defined in Rule
144 under the Act. The shares may not be offered for sale,
sold or otherwise transferred except pursuant to an exemption
from registration under the Act, the availability of which is
to be established to the satisfaction of the Company."
The respective transfer agents of BEKEM METALS and KAZAKH METALS shall
annotate their records to reflect the restrictions on transfer embodied
in the legend set forth above. There shall be no requirement that BEKEM
METALS register the Exchange Stock under the Act, nor shall KAZAKH
METALS or the Shareholders be required to register any KAZAKH METALS
Shares under the Act.
Section 3
Closing
3.1 Closing of Transaction. Subject to the fulfillment or waiver of the
conditions precedent set forth in Section 11 hereof, the Closing shall
take place on the Closing Date at the offices of, Poulton & Yordan,
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Attorneys at Law, 000 Xxxxx 000 Xxxx, Xxxx Xxxx Xxxx, Xxxx 00000, at
10:00 A.M., local time, or at such other time on the Closing Date as
KAZAKH METALS and BEKEM METALS may mutually agree in writing.
3.2 Closing Date. The Closing Date of the Exchange shall take place on a
date chosen by mutual agreement of KAZAKH METALS and BEKEM METALS
within forty-five (45) days from the date of this Agreement, or such
later date upon which KAZAKH METALS and BEKEM METALS may mutually agree
in writing, or as extended pursuant to subsection 12.1(b) hereinbelow.
3.3 Deliveries at Closing.
(a) KAZAKH METALS shall deliver or cause to be delivered to BEKEM
METALS at Closing:
(1) certificates representing all shares, or an amount of
shares acceptable to BEKEM Metals, of the KAZAKH
METALS Stock as described in Section 1, each endorsed
in blank by the registered owner;
(2) an agreement from each Shareholder surrendering his
or her shares agreeing to a restriction on the
transfer of the Exchange Stock as described in
Section 2 hereof ("Offshore Restricted Securities
Agreement");
(3) a copy of a consent of KAZAKH METALS's board of
directors authorizing KAZAKH METALS to take the
necessary steps toward Closing the transaction
described by this Agreement in the form set forth in
Exhibit B;
(4) Certificates of Good Standing for KAZAKH METALS and
its Subsidairy issued not more than thirty (30) days
prior to Closing by the regulatory authorities of the
British Virgin Islands and Republic of Kazakhstan,
respectively;
(5) an opinion of Xxxxxxx Xxxxx Esq., special counsel to
KAZAKH METALS, dated the Closing Date, in a form
deemed acceptable by BEKEM METALS and its counsel;
(6) Articles of Incorporation and Bylaws of KAZAKH METALS
and its Subsidiary certified as of the Closing Date
by the President and Secretary of KAZAKH METALS;
(7) such other documents, instruments or certificates as
shall be reasonably requested by BEKEM METALS or its
counsel.
(b) BEKEM METALS shall deliver or cause to be delivered to KAZAKH
METALS at Closing:
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(1) a copy of a consent of BEKEM METALS's board of
directors authorizing BEKEM METALS to take the
necessary steps toward Closing the transaction
described by this Agreement in the form set forth in
Exhibit C;
(2) a copy of a Certificate of Good Standing for BEKEM
METALS issued not more than ten (10) days prior to
Closing by the Secretary of State of Utah;
(3) all of BEKEM METALS's corporate records;
(4) stock certificate(s) or a computer listing from BEKEM
METALS's transfer agent representing the Exchange
Stock to be newly issued by BEKEM METALS under this
Agreement, which certificates shall be in the names
of the appropriate KAZAKH METALS Shareholders, each
in the appropriate denomination as described in
Section 2;
(5) an opinion of Poulton & Yordan, Attorneys at Law,
counsel to BEKEM METALS, dated the Closing Date, in a
form deemed acceptable by KAZAKH METALS and its
counsel;
(7) Articles of Incorporation and Bylaws of BEKEM METALS
certified as of the Closing Date by the President and
Secretary of BEKEM METALS;
(8) such other documents, instruments or certificates as
shall be reasonably requested by KAZAKH METALS or its
counsel.
3.4 Filings; Cooperation.
(a) Prior to the Closing, the parties shall proceed with due
diligence and in good faith to make such filings and take such
other actions as may be necessary to satisfy the conditions
precedent set forth in Section 11 below.
(b) On and after the Closing Date, BEKEM METALS, KAZAKH METALS and
the Shareholders set forth in Exhibit A shall, on request and
without further consideration, cooperate with one another by
furnishing or using their best efforts to cause others to
furnish any additional information and/or executing and
delivering or using their best efforts to cause others to
execute and deliver any additional documents and/or
instruments, and doing or using their best efforts to cause
others to do any and all such other things as may be
reasonably required by the parties or their counsel to
consummate or otherwise implement the transactions
contemplated by this Agreement.
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Section 4
Representations and Warranties by KAZAKH METALS and Certain Shareholders
4.1 Subject to the schedule of exceptions, attached hereto and incorporated
herein by this reference, (which schedules shall be acceptable to BEKEM
METALS), KAZAKH METALS and those Shareholders listed on Exhibit A
represent and warrant to BEKEM METALS as follows:
(a) Organization and Good Standing of KAZAKH METALS. The Articles
of Incorporation of KAZAKH METALS AND KYZYL KAIN MAMYT LLP,
Kazakhstan limited liability partnership, its wholly owned
subsidiary, and all Amendments thereto as presently in effect,
and the Bylaws of KAZAKH METALS AND KYZYL KAIN MAMYT, as
presently in effect, certified by the President and Secretary
of KAZAKH METALS AND KYZYL KAIN MAMYT, respectively, have been
delivered to BEKEM METALS and are complete and correct and
since the date of such delivery, there has been no amendment,
modification or other change thereto.
(b) Capitalization. KAZAKH METALS's authorized capital stock is
50,000 shares of $1.00 par value Common Stock (defined as
"KAZAKH METALS Common Stock"), of which 50,000 shares are
issued and outstanding prior to the Closing Date, and held of
record by approximately eighteen (18) shareholders, who are
currently not residents of the United States. All of such
outstanding shares are validly issued, fully paid and
non-assessable. There are no outstanding options and warrants
for KAZAKH METALS Common Stock. All securities issued by
KAZAKH METALS as of the date of this Agreement have been
issued in compliance with all applicable securities laws.
Except as set forth in Schedule 4.1(b), no other equity
securities or debt obligations of KAZAKH METALS are
authorized, issued or outstanding.
(c) Subsidiaries. Other than KYZYL KAIN MAMYT LLP, and as set
forth in Schedule 4.1 (c), KAZAKH METALS has no subsidiaries
and no other investments, directly or indirectly, or other
financial interest in any other corporation or business
organization, joint venture or partnership of any kind
whatsoever.
(d) Financial Statements. KAZAKH METALS will deliver to BEKEM
METALS, prior to Closing, a copy of KAZAKH METALS's unaudited
financial statements for the nine (9) months ended September
30, 2005, which will be true and complete and will have been
prepared in conformity with generally accepted accounting
principles and within 90 days of the date of this Agreement,
audited financial statements for the fiscal year ended
December 31, 2004 prepared in compliance with U.S. GAAP and
GAAS. Other than changes in the usual and ordinary conduct of
the business since September 30, 2005, there have been and, at
the Closing Date, there will be no material adverse changes in
such financial statements.
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(e) Absence of Undisclosed Liabilities. Other than as set forth in
Schedule 4.1 (e), neither KAZAKH METALS nor its subsidiaries
has any liabilities which are not adequately reflected or
reserved against in the KAZAKH METALS Financial Statements or
otherwise reflected in this Agreement and KAZAKH METALS shall
not have as of the Closing Date, any liabilities (secured or
unsecured and whether accrued, absolute, direct, indirect or
otherwise) which were incurred after September 30, 2005, and
would be individually or in the aggregate, material to the
results of operations or financial condition of KAZAKH METALS
as of the Closing Date.
(f) Litigation. Except as disclosed in Schedule 4.1(f), there are
no outstanding orders, judgments, injunctions, awards or
decrees of any court, governmental or regulatory body or
arbitration tribunal against KAZAKH METALS or its subsidiary
or its properties. Except as disclosed in Schedule 4.1(f),
there are no actions, suits or proceedings pending, or, to the
knowledge of KAZAKH METALS, threatened against or affecting
KAZAKH METALS or its affiliated companies, any of its officers
or directors relating to their positions as such, or any of
its properties, at law or in equity, or before or by any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic
or foreign, in connection with the business, operations or
affairs of KAZAKH METALS or its affiliated company which might
result in any material adverse change in the operations or
financial condition of KAZAKH METALS, or which might prevent
or materially impede the consummation of the transactions
under this Agreement.
(g) Compliance with Laws. To the best of its knowledge, the
operations and affairs of KAZAKH METALS and its affiliated
companies do not violate any law, ordinance, rule or
regulation currently in effect, or any order, writ, injunction
or decree of any court or governmental agency, the violation
of which would substantially and adversely affect the
business, financial conditions or operations of such
affiliated company or KAZAKH METALS .
(h) Absence of Certain Changes. Except as set forth in Schedule
4.1(h), or otherwise disclosed in writing to BEKEM METALS,
since September 30, 2005,
(i) KAZAKH METALS has not entered into any material
transaction;
(ii) there has been no change in the condition (financial
or otherwise), business, property, prospects, assets
or liabilities of KAZAKH METALS as shown on the
KAZAKH METALS Financial Statement, other than changes
that both individually and in the aggregate do not
have a consequence that is materially adverse to such
condition, business, property, prospects, assets or
liabilities;
(iii) there has been no damage to, destruction of or loss
of any of the properties or assets of KAZAKH METALS
(whether or not covered by insurance) materially and
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adversely affecting the condition (financial or
otherwise), business, property, prospects, assets or
liabilities of KAZAKH METALS;
(iv) KAZAKH METALS has not declared, or paid any dividend
or made any distribution on its capital stock,
redeemed, purchased or otherwise acquired any of its
capital stock, granted any options to purchase shares
of its stock, or issued any shares of its capital
stock except in conjunction with the private
placement described in Schedule 4.1(h);
(v) there has been no material change, except in the
ordinary course of business, in the contingent
obligations of KAZAKH METALS by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(vi) there have been no loans made by KAZAKH METALS to its
employees, officers or directors;
(vii) there has been no waiver or compromise by KAZAKH
METALS of a valuable right or of a material debt owed
to it;
(viii) there has been no extraordinary increase in the
compensation of any of KAZAKH METALS's employees;
(ix) there has been no agreement or commitment by KAZAKH
METALS to do or perform any of the acts described in
this Section 4.1(h); and
(x) there has been no other event or condition of any
character, which might reasonably be expected either
to result in a material and adverse change in the
condition (financial or otherwise), business,
property, prospects, assets or liabilities of KAZAKH
METALS or to impair materially the ability of KAZAKH
METALS to conduct the business now being conducted.
(i) Employees. There are, except as disclosed in Schedule 4.1(i),
no collective bargaining, bonus, profit sharing, compensation,
or other plans, agreements or arrangements between KAZAKH
METALS and any of its directors, officers or employees and
there is no employment, consulting, severance or
indemnification arrangements, agreements or understandings
between KAZAKH METALS on the one hand, and any current or
former directors, officers or employees of KAZAKH METALS on
the other hand.
(j) Assets. All of the assets reflected on the September 30, 2005,
KAZAKH METALS Financial Statements or acquired and held as of
the Closing Date, will be owned by KAZAKH METALS on the
Closing Date. Except as set forth in Schedule 4.1(j), KAZAKH
METALS owns outright and has good and marketable title, or
holds valid and enforceable leases, to all of such assets.
None of KAZAKH METALS's equipment used by KAZAKH METALS in
connection with its business has any material defects and all
of them are in all material respects in good operating
condition and repair, and are adequate for the uses to which
they are being put; none of KAZAKH METALS's equipment is in
need of maintenance or repairs, except for ordinary, routine
maintenance and repair. KAZAKH METALS represents that, except
to the extent disclosed in Schedule 4.1(j) to this Agreement
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or reserved against on its balance sheet as of September 30,
2005, it is not aware of any accounts and contracts receivable
existing that in its judgment would be uncollectible.
(k) Tax Matters. Other than as set forth in Schedule 4.1 (k), all
federal, foreign, state and local tax returns, reports and
information statements required to be filed by or with respect
to the activities of KAZAKH METALS and its subsidiary have
been timely filed. Since September 30, 2005, KAZAKH METALS has
not incurred any liability with respect to any federal,
foreign, state or local taxes except in the ordinary and
regular course of business. Such returns, reports and
information statements are true and correct in all material
respects insofar as they relate to the activities of KAZAKH
METALS. On the date of this Agreement, neither KAZAKH METALS
nor its subsidiary is delinquent in the payment of any such
tax or assessment, and no deficiencies for any amount of such
tax have been proposed or assessed.
(l) Operating Authorities. To the best knowledge of KAZAKH METALS,
KAZAKH METALS and its subsidiary have all material operating
authorities, governmental certificates and licenses, permits,
authorizations and approvals ("Permits") required to conduct
its business as presently conducted or proposed to be
conducted. Such Permits are set forth on Schedule 4.1(l).
Since KAZAKH METALS's inception, there has not been any notice
or adverse development regarding such Permits; such Permits
are in full force and effect; no material violations are or
have been recorded in respect of any permit; and no proceeding
is pending or threatened to revoke or limit any Permit.
(m) Continuation of Key Management. To the best knowledge of
KAZAKH METALS, all key management personnel of KAZAKH METALS
intend to continue their employment with KAZAKH METALS after
the Closing.
(n) Books and Records. The books and records of KAZAKH METALS and
its subsidiary are complete and correct, are maintained in
accordance with good business practice and accurately present
and reflect, in all material respects, all of the transactions
therein described, and there have been no transactions
involving KAZAKH METALS or its subsidiary which properly
should have been set forth therein and which have not been
accurately so set forth.
(o) Authority to Execute Agreement. The Board of Directors of
KAZAKH METALS, pursuant to the power and authority legally
vested in it, has duly authorized the execution and delivery
by KAZAKH METALS of this Agreement, and has duly authorized
each of the transactions hereby contemplated. KAZAKH METALS
has the power and authority to execute and deliver this
Agreement, to consummate the transactions hereby contemplated
and to take all other actions required to be taken by it
pursuant to the provisions hereof. KAZAKH METALS has taken all
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actions required by law, its Articles of Incorporation, as
amended, or otherwise to authorize the execution and delivery
of this Agreement. This Agreement is valid and binding upon
KAZAKH METALS and those Shareholders listed in Exhibit A
hereto in accordance with its terms. Neither the execution and
delivery of this Agreement nor the consummation of the
transactions contemplated hereby will constitute a violation
or breach of the Articles of Incorporation, as amended, or the
Bylaws, as amended, of KAZAKH METALS, or any agreement,
stipulation, order, writ, injunction, decree, law, rule or
regulation applicable to KAZAKH METALS.
(p) Finder's Fees. KAZAKH METALS is not, and on the Closing Date
will not be liable or obligated to pay any finder's, agent's
or broker's fee arising out of or in connection with this
Agreement or the transactions contemplated by this Agreement.
4.2 Disclosure. At the date of this Agreement, KAZAKH METALS and those
Shareholders listed in Exhibit A have, and at the Closing Date they
will have, disclosed all events, conditions and facts materially
affecting the business and prospects of KAZAKH METALS. KAZAKH METALS
and such Shareholders have not now and will not have at the Closing
Date, withheld knowledge of any such events, conditions or facts which
they know, or have reasonable grounds to know, may materially affect
KAZAKH METALS's business and prospects. Neither this Agreement nor any
certificate, exhibit, schedule or other written document or statement,
furnished to BEKEM METALS by KAZAKH METALS and/or by such Shareholders
in connection with the transactions contemplated by this Agreement
contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to be stated in
order to make the statements contained herein or therein not
misleading.
Section 5
Representations and Warranties by BEKEM METALS
5.1 Subject to the schedule of exceptions, attached hereto and incorporated
herein by this reference, (which schedules shall be acceptable to
KAZAKH METALS), BEKEM METALS represents and warrants to KAZAKH METALS
and those Shareholders listed in Exhibit A as follows:
(a) Organization and Good Standing. BEKEM METALS is currently a
corporation duly organized, validly existing and in good
standing under the laws of the State of Utah and has full
corporate power and authority to own or lease its properties
and to carry on its business as now being conducted and as
proposed to be conducted. BEKEM METALS is qualified to conduct
business as a foreign corporation in no other jurisdiction,
and the failure to so qualify in any other jurisdiction does
9
not materially, adversely affect the ability of BEKEM METALS
to carry on its business as most recently conducted. The
Articles of Incorporation of BEKEM METALS and all amendments
thereto as presently in effect, certified by the Secretary of
State of Utah, and the Bylaws of BEKEM METALS as presently in
effect, certified by the President and Secretary of BEKEM
METALS, have been delivered to KAZAKH METALS and are complete
and correct and since the date of such delivery, there has
been no amendment, modification or other change thereto.
(b) Capitalization. BEKEM METALS's authorized capital stock
consists of 150,000,000 shares of $.001 par value Common stock
(defined above as "BEKEM METALS Common Stock"), of which not
more than 38,888,888 will be issued and outstanding, prior to
Closing Date. Except as set forth in Schedule 5.1(b), no other
equity securities or debt obligations of BEKEM METALS are
authorized, issued or outstanding and as of the Closing, there
will be no other outstanding options, warrants, agreements,
contracts, calls, commitments or demands of any character,
preemptive or otherwise, other than this Agreement, relating
to any of the BEKEM METALS Common Stock, and there will be no
outstanding security of any kind convertible into BEKEM METALS
Common Stock. The shares of BEKEM METALS Common Stock are free
and clear of all liens, charges, claims, pledges, restrictions
and encumbrances whatsoever of any kind or nature that would
inhibit, prevent or otherwise interfere with the transactions
contemplated hereby. All of the outstanding BEKEM METALS
Common Stock are validly issued, fully paid and nonassessable
and there are no voting trust agreements or other contracts,
agreements or arrangements restricting or affecting voting or
dividend rights or transferability with respect to the
outstanding shares of BEKEM METALS Common Stock.
(c) Issuance of Exchange Stock. All of the BEKEM METALS Common
Stock to be issued to or transferred to KAZAKH METALS
Shareholders pursuant to this Agreement, when issued,
transferred and delivered as provided herein, will be duly
authorized, validly issued, fully paid and nonassessable, and
will be free and clear of all liens, charges, claims, pledges,
restrictions and encumbrances whatsoever of any kind or
nature, except those restrictions imposed by State or Federal
corporate and securities regulations.
(d) Shareholder Approval. BEKEM METALS will not be required to
obtain any approval of the transaction set forth in this
Agreement by its shareholders under the laws of the State of
Utah.
(e) No Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions
contemplated hereby nor compliance by BEKEM METALS with any of
the provisions hereof will:
(1) violate or conflict with, or result in a breach of
any provisions of, or constitute a default ( or an
event which, with notice or lapse of time or both,
would constitute a default) under, any of the terms,
conditions or provisions of the Articles of
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Incorporation or Bylaws of BEKEM METALS or any note,
bond, mortgage, indenture, deed of trust, license,
agreement or other instrument to which BEKEM METALS
is a party, or by which it or its properties or
assets may be bound or affected; or
(2) violate any order, writ, injunction or decree, or any
statute, rule, permit, or regulation applicable to
BEKEM METALS or any of its properties or assets.
(f) Subsidiaries. Except as set forth in Schedule 5.1 (f), BEKEM
METALS has no subsidiaries and no investments, directly or
indirectly, or other financial interest in any other
corporation or business organization, joint venture or
partnership of any kind whatsoever.
(g) Financial Statements. BEKEM METALS will deliver to KAZAKH
METALS prior to Closing, copies of all of BEKEM METALS's
audited financial statements for the period ended December 31,
2004 and unaudited financial statements through September 30,
2005, all of which are true and complete and have been
prepared in accordance with generally accepted accounting
principles.
(h) SEC Filings. BEKEM METALS will deliver to KAZAKH METALS prior
to Closing, copies of all of BEKEM METALS's recent filings
made with the Securities and Exchange Commission ("SEC"
including Forms 10-KSB and 10-QSB and any proxy material).
(i) Absence of Certain Changes. Since September 30, 2005 there has
been no material change in BEKEM METALS's financial
conditions, assets or liabilities, except as set forth in
Schedule 5.1(i).
(j) Absence of Undisclosed Liabilities. Except as disclosed in
BEKEM METALS's Financial Statements, BEKEM METALS did not
have, as of the Closing Date, any liabilities (secured or
unsecured and whether accrued, absolute, direct, indirect or
otherwise) which were incurred after September 30, 2005, and
would be individually or in the aggregate, material to the
results of operation or financial condition of BEKEM METALS.
(k) Litigation. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, governmental or
regulatory body or arbitration tribunal against BEKEM METALS
or its properties. There are no actions, suits or proceedings
pending, or, to the knowledge of BEKEM METALS, threatened
against or relating to BEKEM METALS. BEKEM METALS is not, and
on the Closing Date will not be, in default under or with
respect to any judgment, order, writ, injunction or decree of
any court or of any federal, state, municipal or other
governmental authority, department, commission, board, agency
or other instrumentality; and BEKEM METALS has, and on the
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Closing Date will have, complied in all material respects with
all laws, rules, regulations and orders applicable to it, if
any.
(l) Contracts. BEKEM METALS is not a party to any written or oral
commitment for capital expenditures except as contemplated by
this Agreement. BEKEM METALS is not a party to, nor is its
property bound by any written or oral, express or implied,
agreement, contract or other contractual obligation including,
without limitation, any real or personal property leases, any
employment agreements, any consulting agreements any personal
services agreements or any other agreements that require BEKEM
METALS to pay any money or deliver any assets or services.
BEKEM METALS has in all material respects performed all
obligations required to be performed by it to date and is not
in default in any material respect under any agreements or
other documents to which it was a party.
(m) Tax Matters. Except as set forth in Schedule 5.1(m), all
federal, foreign, state and local tax returns, reports and
information statements required to be filed by or with respect
to the activities of BEKEM METALS have been filed for all the
years and periods for which such returns and statements were
due, including extensions thereof. Since September 30, 2005
BEKEM METALS has not incurred any liability with respect to
any federal, foreign, state or local taxes except in the
ordinary and regular course of business. Such returns, reports
and information statements are true and correct in all
material respects insofar as they relate to the activities of
BEKEM METALS. On the date of this Agreement, BEKEM METALS is
not delinquent in the payment of any such tax or assessment,
and no deficiencies for any amount of such tax have been
proposed or assessed. Any tax sharing agreement among or
between BEKEM METALS and any affiliate thereof shall be
terminated as of the Closing Date.
(n) Authority to Execute Agreement. The Board of Directors of
BEKEM METALS, pursuant to the power and authority legally
vested in it, has duly authorized the execution and delivery
by BEKEM METALS of this Agreement and the Exchange Stock, and
has duly authorized each of the transactions hereby
contemplated. BEKEM METALS has the power and authority to
execute and deliver this Agreement, to consummate the
transactions hereby contemplated and to take all other actions
required to be taken by it pursuant to the provisions hereof.
BEKEM METALS has taken all the actions required by law, its
Certificate of Incorporation, as amended, its Bylaws, as
amended, applicable state law or otherwise to authorize the
execution and delivery of the Exchange Stock pursuant to the
provisions hereof. This Agreement is valid and binding upon
BEKEM METALS in accordance with its terms.
(o) Finder's Fees. BEKEM METALS is not, and on the Closing Date,
will not be liable or obligated to pay any finder's, agent's
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or broker's fee arising out of or in connection with this
Agreement or the transactions contemplated by this Agreement.
(p) Books and Records. The books and records of BEKEM METALS are
complete and correct, are maintained in accordance with good
business practice and accurately present and reflect in all
material respects, all of the transactions therein described
and there have been no transactions involving BEKEM METALS
which properly should have been set forth therein and which
have not been accurately so set forth.
5.2 Disclosure. BEKEM METALS has and at the Closing Date it will have,
disclosed all events, conditions and facts materially affecting the
business and prospects of BEKEM METALS. BEKEM METALS has not now and
will not have at the Closing Date, withheld knowledge of any such
events, conditions and facts which it knows, or has reasonable grounds
to know, may materially affect BEKEM METALS's business and prospects.
Neither this Agreement, nor any certificate, exhibit, schedule or other
written document or statement, furnished to KAZAKH METALS or the KAZAKH
METALS Shareholders by BEKEM METALS in connection with the transactions
contemplated by this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to be stated in order to make the statements contained
herein or therein not misleading.
Section 6
Access and Information
6.1 As to KAZAKH METALS. Subject to the protections provided by subsection
9.4 herein, KAZAKH METALS shall give to BEKEM METALS and to BEKEM
METALS's counsel, accountants and other representatives full access
during normal business hours throughout the period prior to the
Closing, to all of KAZAKH METALS's properties, books, contracts,
commitments, and records, including information concerning products and
customer base, and patents held by, or assigned to, KAZAKH METALS, and
furnish BEKEM METALS during such period with all such information
concerning KAZAKH METALS's affairs as BEKEM METALS reasonably may
request.
6.2 As to BEKEM METALS. Subject to the protections provided by subsection
9.4 herein, BEKEM METALS shall give to KAZAKH METALS, the KAZAKH METALS
Shareholders and their counsel, accountants and other representatives,
full access, during normal business hours throughout the period prior
to the Closing, to all of BEKEM METALS's properties, books, contracts,
commitments, and records, if any, and shall furnish KAZAKH METALS and
the KAZAKH METALS Shareholders during such period with all such
information concerning BEKEM METALS's affairs as KAZAKH METALS and the
KAZAKH METALS Shareholders reasonably may request.
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Section 7
Covenants of KAZAKH METALS and Certain Shareholders
7.1 No Solicitation. For a period of forty-five (45) days from the date of
this Agreement, KAZAKH METALS and those Shareholders listed on Exhibit
A, to the extent within each Shareholder's control, will use their best
efforts to cause its officers, employees, agents and representatives
not, directly or indirectly, to solicit, encourage, or initiate any
discussions with, or indirectly to solicit, encourage, or initiate any
discussions with, to, any person or entity other than BEKEM METALS and
its officers, employees, and agents, concerning any merger, sale of
substantial assets, or similar transaction involving KAZAKH METALS, or
any sale of any of its capital stock or of the capital stock held by
such Shareholders in excess of fifty percent (50%) of such
Shareholder's current stock holdings except as otherwise disclosed in
this Agreement. KAZAKH METALS will notify BEKEM METALS immediately upon
receipt of an inquiry, offer, or proposal relating to any of the
foregoing. None of the foregoing shall prohibit providing information
to others in a manner in keeping with the ordinary conduct of KAZAKH
METALS's business, or providing information to government authorities.
7.2 Conduct of Business Pending the Transaction. KAZAKH METALS and those
Shareholders listed on Exhibit A, to the extent within each
Shareholder's control, covenant and agree with BEKEM METALS that, prior
to the consummation of the transaction called for by this Agreement,
and Closing, or the termination of this Agreement pursuant to its
terms, unless BEKEM METALS shall otherwise consent in writing, and
except as otherwise contemplated by this Agreement, KAZAKH METALS and
those Shareholders listed on Exhibit A, to the extent within each
Shareholder's control, will comply with each of the following:
(a) Its business shall be conducted only in the ordinary and usual
course. KAZAKH METALS shall use reasonable efforts to keep
intact its business organization and good will, keep available
the services of its respective officers and employees, and
maintain good relations with suppliers, creditors, employees,
customers, and others having business or financial
relationships with it, and it shall immediately notify BEKEM
METALS of any event or occurrence which is material to, and
not in the ordinary and usual course of business of KAZAKH
METALS.
(b) It shall not (i) amend its Articles of Incorporation or Bylaws
or (ii) split, combine, or reclassify any of its outstanding
securities, or declare, set aside, or pay any dividend or
other distribution on, or make or agree or commit to make any
exchange for or redemption of any such securities payable in
cash, stock or property.
(c) It shall not (i) issue or agree to issue any additional shares
of, or rights of any kind to acquire any shares of, its
capital stock of any class, or (ii) enter into any contract,
14
agreement, commitment, or arrangement with respect to any of
the foregoing, except as set forth in this Agreement.
(d) It shall not create, incur, or assume any long-term or
short-term indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures, except in
the ordinary course of business and consistent with past
practice.
(e) It shall not (i) adopt, enter into, or amend any bonus, profit
sharing, compensation, stock option, warrant, pension,
retirement, deferred compensation, employment, severance,
termination or other employee benefit plan, agreement, trust
fund, or arrangement for the benefit or welfare of any
officer, director, or employee, or (ii) agree to any material
(in relation to historical compensation) increase in the
compensation payable or to become payable to, or any increase
in the contractual term of employment of, any officer,
director or employee except, with respect to employees who are
not officers or directors, in the ordinary course of business
in accordance with past practice, or with the written approval
of BEKEM METALS.
(f) It shall not sell lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets or
properties except for: (i) sales, encumbrances, and other
dispositions or grants in the ordinary course of business and
consistent with past practice; (ii) liens for taxes not yet
due; (iii) liens or encumbrances that are not material in
amount or effect and do not impair the use of the property, or
(iv) as specifically provided for or permitted in this
Agreement.
(g) It shall not enter into any material agreement, commitment, or
understanding, whether in writing or otherwise, with respect
to any of the matters referred to in subparagraphs (a) through
(f) above.
(h) It will continue properly and promptly to file when due all
federal, state, local, foreign, and other tax returns,
reports, and declarations required to be filed by it, and will
pay, or make full and adequate provision for the payment of,
all taxes and governmental charges due from or payable by it.
(i) It will comply with all laws and regulations applicable to it
and its operations.
Section 8
Covenants of BEKEM METALS
8.1 No Solicitation. For a period of forty-five (45) days from the date of
this Agreement, BEKEM METALS will not discuss or negotiate with any
other corporation, firm or other person or entertain or consider any
inquiries or proposals relating to the possible disposition of its
shares of capital stock, or its assets, and will conduct business only
15
in the ordinary course. Notwithstanding the foregoing, BEKEM METALS
shall be free to engage in activities mentioned in the preceding
sentence, which are designed to further the mutual interests of the
parties to this Agreement.
8.2 Conduct of BEKEM METALS Pending Closing. BEKEM METALS covenants and
agrees with KAZAKH METALS that, prior to the consummation of the
transactions called for by this Agreement, and Closing, or the
termination of this Agreement pursuant to its terms, unless KAZAKH
METALS shall otherwise consent in writing, and except as otherwise
contemplated by this Agreement, BEKEM METALS will comply with each of
the following.
(a) No change will be made in BEKEM METALS's Certificate of
Incorporation or Bylaws or in BEKEM METALS's authorized or
issued shares of stock, except as contemplated in this
Agreement or as may be first approved in writing by KAZAKH
METALS.
(b) No dividends shall be declared, no stock options granted and
no employment agreements shall be entered into with officers
or directors in BEKEM METALS, except as may be first approved
in writing by KAZAKH METALS.
(c) It shall not (i) issue or agree to issue any additional shares
of, or rights of any kind to acquire any shares of, its
capital stock of any class, or (ii) enter into any contract,
agreement, commitment, or arrangement with respect to any of
the foregoing, except as set forth in this Agreement.
(d) It shall not create, incur, or assume any long-term or
short-term indebtedness for money borrowed or make any capital
expenditures or commitment for capital expenditures, except in
the ordinary course of business and consistent with past
practice.
(e) It shall not (i) adopt, enter into, or amend any bonus, profit
sharing, compensation, stock option, warrant, pension,
retirement, deferred compensation, employment, severance,
termination or other employee benefit plan, agreement, trust
fund, or arrangement for the benefit or welfare of any
officer, director, or employee, or (ii) agree to any material
(in relation to historical compensation) increase in the
compensation payable or to become payable to, or any increase
in the contractual term of employment of, any officer,
director or employee except, with respect to employees who are
not officers or directors, in the ordinary course of business
in accordance with past practice, or with the written approval
of BEKEM METALS.
(f) It shall not sell lease, mortgage, encumber, or otherwise
dispose of or grant any interest in any of its assets or
properties except for: (i) sales, encumbrances, and other
dispositions or grants in the ordinary course of business and
16
consistent with past practice; (ii) liens for taxes not yet
due; (iii) liens or encumbrances that are not material in
amount or effect and do not impair the use of the property, or
(iv) as specifically provided for or permitted in this
Agreement.
(g) It shall not enter into any material agreement, commitment, or
understanding, whether in writing or otherwise, with respect
to any of the matters referred to in subparagraphs (a) through
(f) above.
(h) It will continue properly and promptly to file when due all
federal, state, local, foreign, and other tax returns,
reports, and declarations required to be filed by it, and will
pay, or make full and adequate provision for the payment of,
all taxes and governmental charges due from or payable by it.
(i) It will comply with all laws and regulations applicable to it
and its operations.
Section 9
Additional Covenants of the Parties
9.1 Cooperation. Both KAZAKH METALS and BEKEM METALS will cooperate with
each other and their respective counsel, accountants and agents in
carrying out the transaction contemplated by this Agreement, and in
delivering all documents and instruments deemed reasonably necessary or
useful by the other party. Furthermore, both KAZAKH METALS and BEKEM
METALS shall collaborate on the preparation and dissemination of an
offer, which the Board of Directors of KAZAKH METALS shall approve and
recommend, to the KAZAKH METALS Stockholders, to exchange their
outstanding shares of KAZAKH METALS Common Stock for shares of BEKEM
METALS Common Stock.
9.2 Expenses. Each of the parties hereto shall pay all of its respective
costs and expenses (including attorneys' and accountants' fees, costs
and expenses) incurred in connection with this Agreement and the
consummation of the transactions contemplated herein.
9.3 Publicity. Prior to the Closing, any written news releases or public
disclosure by either party pertaining to this Agreement shall be
submitted to the other party for its review and approval prior to such
release or disclosure, provided, however, that (a) such approval shall
not be unreasonably withheld, and (b) such review and approval shall
not be required of disclosures required to comply, in the judgment of
counsel, with federal or state securities or corporate laws or
policies.
9.4 Confidentiality. While each party is obligated to provide access to and
furnish information in accordance with Section 6 herein, it is
understood and agreed that such disclosure and information subsequently
obtained as a result of such disclosures are proprietary and
17
confidential in nature. Each party agrees to hold such information in
confidence and not to reveal any such information to any person who is
not a party to this Agreement, or an officer, director or key employee
thereof, and not to use the information obtained for any purpose other
than assisting in its due diligence inquiry in conjunction with the
transaction contemplated by this Agreement. Upon request of any party,
a confidentiality agreement, acceptable to the disclosing party, will
be executed by any person selected to receive such proprietary
information, prior to receipt of such information.
Section 10
Survival of Representations, Warranties and Covenants
10.1 The representations, warranties and covenants of KAZAKH METALS and those
Shareholders listed in Exhibit A contained herein shall survive the execution
and delivery of this Agreement, the Closing and the consummation of the
transactions called for by this Agreement. The representations, warranties and
covenants of BEKEM METALS contained herein shall survive the execution and
delivery of this Agreement, the Closing and the consummation of the transactions
called for by this Agreement.
Section 11
Conditions Precedent to Obligations of Parties
11.1 Conditions to Obligations of the Parties. The obligations of BEKEM
METALS, KAZAKH METALS and those Shareholders listed in Exhibit A under
this Agreement shall be subject to the fulfillment, on or prior to the
Closing, of all conditions elsewhere herein set forth, including, but
not limited to, receipt by the appropriate party of all deliveries
required by Sections 4 and 5 herein, and fulfillment, prior to Closing,
of each of the following conditions:
(a) All representations and warranties made by KAZAKH METALS
Shareholders listed in Exhibit A and BEKEM METALS in this
Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same effect as if such
representations and warranties had been made on and as of the
Closing Date.
(b) KAZAKH METALS Shareholders listed in Exhibit A and BEKEM
METALS shall have performed or complied with all covenants,
agreements and conditions contained in this Agreement on their
part required to be performed or complied with at or prior to
the Closing.
(c) All material authorizations, consents or approvals of any and
all governmental regulatory authorities necessary in
connection with the consummation of the transactions
contemplated by this Agreement shall have been obtained and be
in full force and effect.
18
(d) The Closing shall not violate any permit or order, decree or
judgment of any court or governmental body having competent
jurisdiction and there shall not have been instituted any
legal or administrative action or proceeding to enjoin the
transaction contemplated hereby or seeking damages from any
party with respect thereto.
11.2 Conditions to Obligations of BEKEM METALS. The obligations of BEKEM
METALS to consummate the transactions contemplated herein are subject
to satisfaction (or waiver by it) of the following conditions:
(a) Each KAZAKH METALS Shareholder acquiring Exchange Stock will
be required, at Closing, to submit an agreement confirming
that all the Exchange Stock received will be acquired for
investment and not with a view to, or for sale in connection
with, any distribution thereof, and agreeing not to transfer
any of the Exchange Stock for a period of two years from the
date of the Closing, except for those transfers falling within
the exemption from registration under the Securities Act of
1933 and any applicable state securities laws, which transfers
do not constitute a public distribution of securities, and in
which the transferees execute an investment letter in form and
substance satisfactory to counsel for BEKEM METALS. The
foregoing provision shall not prohibit the registration of
those shares at any time following the Closing. Each KAZAKH
METALS Shareholder acquiring Exchange Stock will be required
to transfer to BEKEM METALS at the Closing his/her respective
KAZAKH METALS Shares, free and clear of all liens, mortgages,
pledges, encumbrances or changes, whether disclosed or
undisclosed.
(b) All schedules, prepared by KAZAKH METALS shall be current or
updated as necessary as of the Closing Date.
(c) Each party shall have received favorable opinions from the
other party's counsel on such matters in connection with the
transactions contemplated by this Agreement as are reasonable.
(d) If shareholders, who in the aggregate own five percent (5%) or
more of the KAZAKH METALS shares of Common Stock, dissent from
the proposed share exchange, or are unable or for any reason
refuse to transfer any or all of their KAZAKH METALS shares of
Common Stock to BEKEM METALS in accordance with Section 1 of
this Agreement, BEKEM METALS, at its option, may terminate
this Agreement.
(e) Each party shall have satisfied itself that since the date of
this Agreement the business of the other party has been
conducted in the ordinary course. In addition, each party
shall have satisfied itself that no withdrawals of cash or
other assets have been made and no indebtedness has been
19
incurred since the date of this Agreement, except in the
ordinary course of business or with respect to services
rendered or expenses incurred in connection with the Closing
of this Agreement, unless said withdrawals or indebtedness
were either authorized by the terms of this Agreement or
subsequently consented to in writing by the parties.
(g) Each party covenants that, to the best of its knowledge, it
has complied in all material respects with all applicable
laws, orders and regulations of federal, state, municipal
and/or other governments and/or any instrumentality thereof,
domestic or foreign, applicable to their assets, to the
business conducted by them and to the transactions
contemplated by this Agreement.
11.3 Conditions to Obligation of KAZAKH METALS and the KAZAKH METALS
Shareholders. The obligations of KAZAKH METALS and the KAZAKH METALS
Shareholders listed in Exhibit A to consummate the transactions
contemplated herein are subject to satisfaction (or waiver by them) of
the following conditions:
(a) BEKEM METALS shall have provided to KAZAKH METALS through
September 30, 2005, all unaudited financial statements
prepared in accordance with generally accepted accounting
principles by independent accountants of BEKEM METALS. BEKEM
METALS shall also provide, as of a date within thirty days of
Closing, an update on any material change in the
aforementioned financial statements.
(b) Each party shall have granted to the other party (acting
through its management personnel, counsel, accountants or
other representatives designated by it) full opportunity to
examine its books and records, properties, plants and
equipment, proprietary rights and other instruments, rights
and papers of all kinds in accordance with Sections 4 and 5
hereof, and each party shall be satisfied to proceed with the
transactions contemplated by this Agreement upon completion of
such examination and investigation.
(c) BEKEM METALS and KAZAKH METALS shall agree to indemnify each
other party against any liability to any broker or finder to
which that party may become obligated.
(d) The Exchange shall be approved by the Board of Directors of
both KAZAKH METALS and BEKEM Metals. Furthermore, the Exchange
shall be approved by the shareholders of KAZAKH METALS and
BEKEM METALS, if deemed necessary or appropriate by counsel
for the same, within thirty (30) days following execution of
this Agreement. If such a meeting is deemed necessary, the
management of KAZAKH METALS and BEKEM METALS agree to
recommend approval to their respective Shareholders and to
solicit proxies in support of the same.
(f) KAZAKH METALS agrees, immediately following the Closing of
this Agreement, to use its best efforts to amend BEKEM
20
METALS's Certificate of Incorporation to change BEKEM METALS's
name to "Bekem Metals, Inc." or to a name that is
substantially similar.
(g) BEKEM METALS and KAZAKH METALS and their respective legal
counsel shall have received copies of all such certificates,
opinions and other documents and instruments as each party or
its legal counsel may reasonably request pursuant to this
Agreement or otherwise in connection with the consummation of
the transactions contemplated hereby, and all such
certificates, opinions and other documents and instruments
received by each party shall be reasonably satisfactory, in
form and substance, to each party and its legal counsel.
(h) Both KAZAKH METALS and BEKEM METALS shall have the right to
waive any or all of the conditions precedent to its
obligations hereunder not otherwise legally required;
provided, however, that no waiver by a party of any condition
precedent to its obligations hereunder shall constitute a
waiver by such party of any other condition.
(i) BEKEM METALS shall have obtained all necessary Blue Sky
approvals or exemptions for the issuance of the Exchange Stock
required prior to the Closing Date
Section 12
Termination, Amendment, Waiver
12.1 This Agreement may be terminated at any time prior to the Closing, and
the contemplated transactions abandoned, without liability to either
party, except with respect to the obligations of BEKEM METALS, KAZAKH
METALS and those KAZAKH METALS Shareholders listed in Exhibit A under
Section 9.4 hereof:
(a) By mutual agreement of BEKEM METALS and KAZAKH METALS;
(b) If the Closing (as defined in Section 3) has not have taken
place on or prior to January 31, 2006, this Agreement can be
terminated upon written notice given by BEKEM METALS or KAZAKH
METALS which is not in material default;
(c) By BEKEM METALS, if in its reasonable believe there has been a
material misrepresentation or breach of warranty on the part
of any Shareholder listed in Exhibit A in the representations
and warranties set forth in the Agreement.
(d) By KAZAKH METALS or a majority of those Shareholders listed in
Exhibit A (as measured by their equity interest) if, in the
reasonable belief of KAZAKH METALS or any such Shareholders,
21
there has been a material misrepresentation or breach of
warranty on the part of BEKEM METALS in the representations
and warranties set forth in the Agreement;
(e) By BEKEM METALS if, in its opinion or that of its counsel, the
Exchange does not qualify for exemption from registration
under applicable federal and state securities laws, or
qualification, if obtainable, cannot be accomplished in BEKEM
METALS's opinion or that of its counsel, without unreasonable
expense or effort;
(f) By BEKEM METALS or by a majority of those Shareholders listed
in Exhibit A (as measured by their equity interest) if either
party shall determine in its sole discretion that the Exchange
has become inadvisable or impracticable by reason of the
institution or threat by state, local or federal governmental
authorities or by any other person of material litigation or
proceedings against any party [it being understood and agreed
that a written request by a governmental authority for
information with respect to the Exchange, which information
could be used in connection with such litigation or
proceedings, may be deemed to be a threat of material
litigation or proceedings regardless of whether such request
is received before or after the signing of this Agreement];
(g) By BEKEM METALS if the business or assets or financial
condition of KAZAKH METALS, taken as a whole, have been
materially and adversely affected, whether by the institution
of litigation or by reason of changes or developments or in
operations in the ordinary course of business or otherwise;
or, by a majority of those Shareholders listed in Exhibit A
(as measured by their equity interest) if the business or
assets or financial condition of BEKEM METALS, taken as a
whole, have been materially and adversely affected, whether by
the institution of litigation or by reason of changes or
developments or in operations in the ordinary course of
business or otherwise;
(h) By BEKEM METALS if holders of five percent (5%) or more of the
KAZAKH METALS Shares fail to tender their stock at the Closing
of the Exchange;
(i) By BEKEM METALS or KAZAKH METALS if, in the opinion of BEKEM
METALS's independent accountants, it should appear that the
combined entity will not be auditable to SEC accounting
standards;
(j) By KAZAKH METALS if BEKEM METALS fails to perform material
conditions set forth in Sub-Section 11.1 and 11.3 herein;
(k) By KAZAKH METALS if examination of BEKEM METALS's books and
records pursuant to Section 5 herein uncovers a material
deficiency;
(l) By BEKEM METALS if KAZAKH METALS fails to perform material
conditions set forth in Sub-Section 11.1 and 11.2 herein; and
22
(m) By BEKEM METALS if examination of KAZAKH METALS's books and
records pursuant to Section 4 herein uncovers a material
deficiency.
12.2 No modification or amendment of any provision of this Agreement shall
be effective unless specifically made in writing and duly signed by the
party to be bound.
Section 13
Miscellaneous
13.1 Entire Agreement. This Agreement (including the Exhibits and Schedules
hereto) contains the entire agreement between the parties with respect
to the transactions contemplated hereby, and supersedes all
negotiations, representations, warranties, commitments, offers,
contracts, and writings prior to the date hereof. No waiver and no
modification or amendment of any provision of this Agreement shall be
effective unless specifically made in writing and duly signed by the
party to be bound thereby.
13.2 Binding Agreement.
(a) This Agreement shall become binding upon the parties when, but
only when, it shall have been signed on behalf of all parties.
(b) Subject to the condition stated in subsection (a), above, this
Agreement shall be binding upon, and inure to the benefit of,
the respective parties and their legal representatives,
successors and assigns. This Agreement, in all of its
particulars, shall be enforceable by the means set forth in
subsection 13.9 for the recovery of damages or by way of
specific performance and the terms and conditions of this
Agreement shall remain in full force and effect subsequent to
Closing and shall not be deemed to be merged into any
documents conveyed and delivered at the time of Closing. In
the event that subsection 13.9 is found to be unenforceable as
to any party for any reason or is not invoked by any party,
and any person is required to initiate any action at law or in
equity for the enforcement of this Agreement, the prevailing
party in such litigation shall be entitled to recover from the
party determined to be in default, all of its reasonable costs
incurred in said litigation, including attorneys' fees.
13.3 Shareholders Owning at Least Five Percent (5%) of the Outstanding
Common Stock of KAZAKH METALS. The Shareholders of the outstanding
common stock of KAZAKH METALS (see Exhibit A hereto) are only executing
this Agreement with respect to Sections 3.4, 4, 7, 9.4, 10, 11.1 and
11.3, 12.1(d and f ), 13.2, 13.3, 13.4, 13.8, and 13.9.
23
13.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which may be deemed an original, but all of which
together, shall constitute one and the same instrument.
13.5 Severability. If any provisions hereof are to be held invalid or
unenforceable by any court of competent jurisdiction or as a result of
future legislative action, such holding or action shall be strictly
construed and shall not affect the validity or effect or any other
provision hereof.
13.6 Assignability. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto; provided,
that neither this Agreement nor any right hereunder shall be assignable
by KAZAKH METALS or BEKEM METALS without prior written consent of the
other party.
13.7 Captions. The captions of the various Sections of this Agreement have
been inserted only for convenience of reference and shall not be deemed
to modify, explain, enlarge or restrict any of the provisions of this
Agreement.
13.8 Governing Law. The validity, interpretation and effect of this
Agreement shall be governed exclusively by the laws of the State of
Utah.
13.9 Dispute Resolution. In the event of a dispute between the parties
hereto involving a claim of breach of representation or warranty
hereunder, or to enforce a covenant herein (either or both of which are
referred to hereafter as a "Claim"), if it is the desire of any party
for quick resolution, the rights and obligations of the parties hereto
arising under the terms of this Agreement with respect to such Claims
and/or resolution of such disputes will be by the means of the judgment
of an independent third party ("Rent-A-Judge") who has been selected
and hired through the mutual agreement of the parties. The utilization
of this subsection 13.9, if invoked by any party hereto, shall be the
exclusive remedy for resolving a Claim regardless of whether legal
action has or has not been otherwise instituted. If legal action has
been instituted by any party, and this subsection 13.9 is invoked in a
timely manner, any such legal action shall be void ab initio and
immediately withdrawn.
(a) In the event of a Claim by any party, any party may make a
written request upon the other parties for a "Rent-A-Judge." A
request by any party for the employment of a "Rent-A-Judge" to
resolve the Claim shall be binding on all other parties to
this Agreement in accordance with the terms hereof.
The parties may agree upon one "Rent-A-Judge," but in the
event that they cannot agree, there shall be three, one named
in writing by each of the parties within twenty (20) days
after the initial demand for employment of a "Rent-A-Judge,"
and a third chosen by the two appointed. Should either party
refuse or neglect to join in the appointment of the
24
"Rent-A-Judge(s)" or to furnish the "Rent-A-Judge(s) with any
papers or information demanded, the "Rent-A-Judge(s)" are
empowered by all parties to this Agreement to proceed ex
parte.
(b) Claim resolution proceedings shall take place in the City or
County of Salt Lake, State of Utah, and the hearing before the
"Rent-A-Judge(s)" of the matter to be arbitrated shall be at
the time and place within said city or county as is selected
by the "Rent-A-Judge(s)." The "Rent-A-Judge(s)" shall select
such time and place promptly after appointment and shall give
written notice thereof to each party at least thirty (30) days
prior to the date so fixed. At the hearing, any relevant
evidence may be presented by either party, and the formal
rules of evidence applicable to judicial proceedings shall not
govern. Evidence may be admitted or excluded in the sole
discretion of the "Rent-A-Judge(s)." Said "Rent-A-Judge(s)"
shall hear and determine the matter and shall execute and
acknowledge their award in writing and cause a copy thereof to
be delivered to each of the parties.
(c) If there is only one (1) "Rent-A-Judge," his or her decision
shall be binding and conclusive on the parties, and if there
are three (3) "Rent-A-Judge(s)" the decision of any two (2)
shall be binding and conclusive.
(d) If three (3) "Rent-A-Judge(s)" are selected under the
foregoing procedure, but two (2) of the three (3) fail to
reach an agreement in the determination of the matter in
question, the matter shall be decided by three (3) new
"Rent-A-Judge(s)" who shall be appointed and shall proceed in
the same manner, and the process shall be repeated until a
decision is finally reached by two (2) of the three (3)
"Rent-A-Judge(s)" selected.
(e) The costs of such Claim resolution shall be borne by the
parties equally and each party shall pay its own attorneys'
fees; provided, however, that in the event either party
challenges or in any way seeks to have the Rent-A-Judge's
decision or award vacated or corrected or modified, if the
challenge is denied or the original decision or award is
affirmed, the challenging party shall pay the costs and fees,
including reasonable attorneys' fees, of the non-challenging
party, both for the challenge and for the original Claim
resolution process.
13.10 Notices. All notices, requests, demands and other communications under
this Agreement shall be in writing and delivered in person or sent by
certified mail, postage prepaid and properly addressed as follows:
To KAZAKH METALS:
Xxxxxx Xxxxxx
Kazakh Metals, Inc.
25
0X Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxxx 0000
Fax 00 0 00 000 000
To BEKEM METALS:
Xxxxx Cherdabayev, President
Bekem Metals Corporation
000 Xxxxxx Xxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Fax (000) 000-0000
With a Copy to:
Xxxxxx Xxxxxxx
000 Xxxxx 000 Xxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
Fax (000) 000-0000
Any party may from time to time change its address for the purpose of
notices to that party by a similar notice specifying a new address, but
no such change shall be deemed to have been given until it is actually
received by the respective party hereto.
All notices and other communications required or permitted under this
Agreement which are addressed as provided in this Section 13.10 if
delivered personally, shall be effective upon delivery; and, if
delivered by mail, shall be effective three days following deposit in
the United States mail, postage prepaid.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
BEKEM METALS CORPORATION
By: /s/ Xxxxx Cherdabeyev
-----------------------------
Xxxxx Cherdabeyev, President
KAZAKH METALS, INC.
By: /s/ Xxxxxx Xxxxxx
-----------------------------
Xxxxxx Xxxxxx, Director
26
Exhibit List
Exhibit A: Offshore Restricted Securities Agreement
Exhibit B: Shareholders of Kazakh Metals, Inc.
Exhibit C: Consent of Board of Directors of Kazakh Metals, Inc.
Exhibit D: Consent of Board of Directors of Bekem Metals, Inc.
Schedule List
Schedule 4.1(b): Kazakh Metals, Inc., Common Stock, Options and
Warrants Outstanding
Schedule 4.1(c): Kazakh Metals, Inc. Subsidiaries
Schedule 4.1(f): Litigation Involving Kazakh Metals, Inc.
Schedule 4.1(h): Absence of Certain Changes - Kazakh Metals, Inc.
Schedule 4.1(i): Kazakh Metals, Inc. Employee Benefit Plans
Schedule 4.1(j): Asset Ownership Exceptions
Schedule 4.1(l): Operating Permits/Licenses
Schedule 5.1(b): Bekem Metals, Inc., Common Stock, Options and
Warrants Outstanding
Schedule 5.1(f): Bekem Metals, Inc. Subsidiaries
Schedule 5.1(m): Bekem Metals, Inc., Tax Matters
27
Exhibit A
OFFSHORE RESTRICTED SECURITIES AGREEMENT
This Agreement is executed by the undersigned in connection with the
exchange of shares pursuant to an Acquisition Agreement, dated as of the 24th
day of October 2005 ("Acquisition Agreement") whereby the undersigned agrees to
exchange all of its shares in Kazakh Metals, Inc. for shares of restricted
common stock (hereinafter referred to as the "Shares") of Bekem Metals, Inc.
(hereinafter referred to as "Seller") a corporation organized under the laws of
the State of Utah, United States of America, with its principal administrative
office at, 000 Xxxxxx Xxx, Xxxxx 000, Xxxx Xxxx Xxxx, Xxxx 00000. This Agreement
is executed in reliance upon the transaction exemption afforded by Regulation S
("Regulation S") as promulgated by the Securities and Exchange Commission
("SEC"), under the Securities Act of 1933, as amended, (the "1933 Act"). The
Shares are being acquired from Seller pursuant to Rule 903 of Regulation S. The
capitalized terms used herein and not defined herein shall have the meanings
given to them in Regulation S.
The undersigned, (hereinafter referred to as "Buyer"), hereby
represents and warrants to, and agrees with Seller as follows:
1. AGREEMENT TO BE BOUND BY CERTAIN TERMS OF THE ACQUISITION AGREEMENT:
a. By executing this agreement, the Seller hereby agrees to be bound as
a signatory to the Acquisition Agreement with respect to Sections 3.4, 4, 7,
9.4, 10, 11.1 and 11.3, 12.1(d and f), 13.2, 13.3, 13.4, 13.8, and 13.9 of such
Acquisition Agreement.
2. BUYER'S REPRESENTATIONS; ACCESS TO INFORMATION; INDEPENDENT INVESTIGATION.
a. OFFSHORE TRANSACTION. Buyer represents and warrants to Seller as
follows:
(i) Buyer is not a U.S. Person or and buyer was not formed for the
purpose of investing in securities which have not been registered under the 1933
Act in reliance upon Regulation S by or for the benefit of a U.S. person;
(ii) At the time the buy order was originated, Buyer was outside the
United States;
(iii) No offer to sell or purchase the Shares was made in the United
States;
(iv) Buyer has not engaged in nor will engage in any "Directed Selling
Efforts," i.e., any activity undertaken for the purpose of, or that could
reasonably be expected to have the effect of, conditioning the market in the
United States for any of the Shares being purchased by the Buyer.
(v) Buyer is purchasing the Shares for its own account and for
investment purposes and not with the view towards distribution or for the
account of a U.S. Person;
(vi) All subsequent offers and sales of the shares shall be made in
compliance with Regulation S and/or pursuant to registration of the Shares under
the 1933 Act or pursuant to an exemption from registration under the 1933 Act,
including but not limited to, compliance with the applicable provisions under
the Act. In any case, the Shares will not be resold to U.S. Persons or within
the United States until after the end of a one year restricted period commencing
on the date of Closing of the purchase of the Shares and otherwise in compliance
with Rule 904 of Regulation S;
(vii) Buyer understands that the shares are being offered and exchanged
in reliance on specific exemptions from the registration requirements of Federal
and States securities laws and that the Seller is relying upon the truth and
accuracy of the representations, warranties, agreement herein in order to
determine the applicability of such exemptions and the suitability of Buyer to
acquire the Shares.
(viii) Buyer acknowledges that, in making the decision to exchange the
Shares, has relied solely upon independent investigations made by it and not
upon any representations made by Seller with respect to Seller or the Shares
except as set forth in the Acquisition Agreement.
(ix) Buyer and any person receiving a selling concession or acting as a
distributor or dealer on behalf of the Buyer prior to the expiration of the
restricted period under Regulation S will send a confirmation or other notice to
any other purchaser stating that the purchase is subject to the same
restrictions on offers and sales that apply to the Buyer.
b. NO GOVERNMENT RECOMMENDATION OR APPROVAL. Buyer understands that no
Federal of State agency has passed on or made any recommendation or endorsement
of the Shares.
3. SELLER'S REPRESENTATIONS. SELLER REPRESENTS . Seller represents and warrants
to Buyer as follows:
a. REPORTING COMPANY. Seller is registered under section 12(g) of the
Securities Exchange Act of 1934, as amended, (the "Exchange Act"). Seller is a
"reporting issuer" as defined by Rule 902 of Regulation S. Seller's common stock
trades on the OTCBB under the symbol BKMM.
b. OFFSHORE TRANSACTION.
(i) Seller has not offered the securities which are the subject of this
transaction to any person in the United States, any identifiable groups of U.S.
citizens abroad, or to any U.S. Person as that term is defined in Regulation S.
(ii) At the time the buy order was originated, Seller and/or its agents
reasonably believed Buyer was outside of the United States and was not a U.S.
Person.
2
(iii) Seller and/or its agents reasonably believe that the transaction
has not been pre-arranged with a buyer in the United States.
d. NO DIRECTED SELLING EFFORTS. Seller has not engaged in nor will
engage in any "Directed Selling Efforts," i.e., any activity undertaken for the
purpose of , or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the Shares being
purchased by the Buyer.
e. FULLY PAID SHARES. The Shares when issued and delivered will be duly
and validly authorized and issued, fully paid and non-assessable and will not
subject the holders thereof to personal liability by reason of being such
holders. There are no preemptive rights of any shareholders of Seller. The
Shares are free and clear of any security interest, liens, claims, or other
encumbrances.
f. VALID AGREEMENT. Upon execution of the Acquisition Agreement and
receipt of Offshore Restricted Securities Agreements from all holders of shares
of Kazakh Metals, Inc., this Agreement will be a valid and binding agreement in
accordance with its terms and the terms of the Acquisition Agreement, subject to
general principles of equity and to bankruptcy or other laws affecting the
enforcement of creditors' rights generally.
g. NON-CONTRAVENTION. The execution and delivery of this Agreement and
the issuance of the Shares and the transaction contemplated by this Agreement do
not and will not conflict with or result in a breach by the Seller of any of the
terms or provisions of, or constitute a default under, the articles of
incorporation or by-laws of Seller, or any indenture, mortgage, deed of trust or
other material agreement or instrument to which Seller is a party of by which it
or any of its properties or assets are bound, or any existing applicable law,
rule or regulation or any applicable decree, judgment or order of any other
governmental body having jurisdiction over Seller or any of its properties or
assets.
4. EXEMPTION; RELIANCE ON REPRESENTATION.
a. PURCHASE AND SALE UNDER REGULATION S. Buyer understands that the
offer and sale of the Shares are not being registered under the 1933 Act. Seller
is relying on the rules governing offers and sales made outside the United
States pursuant to Regulation S as an exemption from registration for this
transaction between the Seller and the Buyer.
b. RESTRICTED SECURITIES. Buyer agrees that the Shares were acquired
directly from Seller in a transaction not involving any public offering and are
deemed to be "restricted securities" as defined in SEC Rule 144(a)(3). Buyer
further understands that "restricted securities" can not be resold publicly
within the United States except, pursuant to an effective registration statement
or an exemption from such registration. Buyer acknowledges that SEC Rule 144
permits the public resale of "restricted securities" in reliance upon an
exemption from registration under Section 4(1) of the 1933 Act only if the
conditions of Rule 144 are met. In general, the conditions which must be met to
rely on Rule 144 to publicly resell restricted securities in the United States
are as follows:
3
(i) A minimum of one year must lapse between the later of the date of
the acquisition of the Shares from Seller or the date of upon which the full
purchase price has been paid to the Seller and the date of resale of the Shares.
(ii) The amount of Shares which may be sold by any person (or persons
whose sales must be aggregated under the Rule) in any ninety day period may not
exceed the greater of 1% of the then outstanding shares of common stock of the
Company or the average weekly volume during the four calendar weeks prior to
such sale.
(iii) The Shares must be sold in "Brokers Transactions" within the
meaning of Section 4(4) of the 1933 Act or in transactions directly with a
"market maker" as defined in Section 3(a)(38) of the Exchange Act of 1934.
(iv) A Notice of Intention to Sale must be filed with the SEC.
(v) There must be current public information available with respect to
the Shares.
c. COMPLIANCE WITH SECURITIES LAWS. Buyer understands and agrees that
because the Shares are being acquired under Regulation S and are "restricted
securities," Buyer will be required to comply with both the provisions of
Regulation S and Rule 144 in any resale of the Shares, absent registration of
the Shares or an exemption therefrom.
5. TRANSFER AGENT INSTRUCTIONS.
Seller and Buyer agree that the Seller will deliver at Closing
certificates representing the Shares duly endorsed for transfer, or Seller's
transfer agent will be instructed to issue one or more share certificates
representing the Shares in the name of Buyer and in such denominations to be
specified prior to Closing to the Security Holder as described in paragraph 6
below. All certificates shall bear appropriate restrictive legends to the effect
that no transfer of the Share may be made except in compliance with the
provisions of Regulation S.
Buyer agrees that Seller's transfer agent is hereby directed and
authorized to refuse to register any transfer of the Shares which is not made in
accordance with the provisions of Regulation S. Seller agrees that a "stop
transfer" instruction be placed with the transfer agent until the end of the
restricted period under Regulation S. Otherwise, the Shares shall be
transferable on the books and records of the Company. Nothing in this section,
however, shall affect in any way the Buyer's obligations and agreement to comply
with all applicable securities laws upon resale of the Shares.
6. STOCK DELIVERY INSTRUCTIONS.
The share certificates shall be delivered to Buyer. The Buyer shall
hold the certificates for the restricted period of one year from the date of
Closing. Upon delivery of the certificates to the Buyer, Buyer shall be entitled
to enjoy all benefits of ownership of the Shares, including but not limited to,
the rights to vote the Shares and receive distributions and collect dividends,
if any, paid thereon.
4
7. CLOSING DATE.
The date of the delivery of the Shares (the "Closing Date") shall be as
of not later than the date as set forth in the Acquisition Agreement or such
other mutually agreed to time.
8. CONDITIONS TO THE SELLER'S OBLIGATION TO SELL.
Buyer understands that Seller's obligation to sell the stock is
conditioned upon:
a. The receipt and acceptance by Seller of this Agreement executed by
Buyer for all of the Shares as evidenced by execution of this Agreement by the
President or Secretary of the Seller and
b. Delivery into the closing depository by Buyer of its certificate for
shares of Kazakh Metals, Inc. as set forth in Exhibit A of the Acquisition
Agreement duly indorsed for transfer to the Seller.
9. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE.
Seller understands that Buyer's obligation to purchase the Stock is
conditioned upon:
a. Acceptance and execution by Buyer of this Agreement for the exchange
of Shares; and
b. Delivery of certificates for Shares of Common Stock with restrictive
legends as described herein to the Seller.
10. GOVERNING LAW.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Utah, United States of America. A facsimile
transmission of this signed agreement shall be legal and binding to all parties
hereto.
IN WITNESS WHEREOF, this Offshore Restricted Securities Agreement was
duly executed on the date first written below.
Dated this ____ day of the month of October, 2005.
Buyer:
-----------------------------------------
(Signature)
-----------------------------------------
(Print Name and Title)
-----------------------------------------
(Address)
-----------------------------------------
(City)
-----------------------------------------
(Country)
5
EXHIBIT B
KAZAKH METALS, INC.
SHAREHOLDERS LIST
Number of Kazakh Number of Bekem
Metals, Inc. Shares Metals, Inc. Shares
to be to be
Shareholder Name and Address Exchanged Exchanged
---------------------------- --------- ---------
CENTRAL ASIAN METALS INC. 12,667 15,504,408
Attn: Lakeside Management Ltd. (Xxx Xxxxxxx)
c/x Xxxx, Xxx Xxxxxxx 0, 0xx Xxxxx
X.X. Xxx 0000 XX - 6901 - Lugano
LANDSGATE MARKETING LIMITED 4,175 5,110,200
Attn: Xxxxxxxx Xxxx Xxxxxx
0000 Xxxxx 0000 Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
COMODIDAD Y FANTASIA EN TIERRA, S.A. 4,165 5,097,960
Attn: Xxxx Xxxxxxx (3-101-408701)
Apdo. 947-2400
Desamparados
San Xxxx, Costa Rica:
LAS TIERRAS DEL DELEITE, S.A. 4,165 5,097,960
Attn: Xxx X. Xxxxx (3-101-409555)
Desamparados, El Xxxxx
de bar Pecos xxxx 000 X 00 X
Xxx Xxxx, Xxxxx Xxxx
INVERSIONES TENTADORAS PARA HABITAR, S.A. 4,165 5,097,960
Attn: Xxxx X. Xxxxxxxxxx (3-101-410316)
Desamparados, Xxxxx Xxxxxx
xx Xxxx Xxx, 00 norte,
casa de alto a mano derecha
San Xxxx, Costa Rica
ENVASES Y FORMAS PARA LA VENTA, S.A. 4,165 5,097,960
Attn: Xxxxx Xxxxx (3-101-410575)
Barrio Santa Xxxxx, xx xxxxx Union Tica,
200 oeste y 00 xxx
Xxxxx Xxxxxx, Xxxxxxxxxxxx
Xxx Xxxx, Xxxxx Xxxx
EMRJD CREACIONES DE PUNTARENAS, S.A. 4,165 5,097,960
Attn: Xx Xxxxxxxxx (3-101-411828)
Jaco Centro, Xxxxxxxx,
bajos de la Fiscalia xx Xxxxxxxx
Puntarenas, Costa Rica
BALMONT TRADING S.A. 4,000 4,896,000
Attn: Aidarkhan Takuov
00 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxx 000000
Republic of Kazakhstan
DARNLEY INTERNATIONAL LIMITED: 3,333 4,079,592
Attn: Xxxxxx Xxxxxxxxx Xxxxxxxx
00 Xxxxx 000 Xxxx, #00
Xxxxx, Xxxx 00000
Apdo. 947-2400
Desamparados
San Xxxx, Costa Rica
RESURSOV KAZAKHSTANA FOUNDATION 950 1,162,800
Isthmian International Management Group, S.A.
Attn: Xxxxxx Xxxxxxx (7-118-470)
Calle G, El Cangrejo
Edificio Benidor, PB-A 0
Xxxxx Xxxxx, Xxxxxx
Xxxxxxxxx de Panama
San Xxxx, Costa Rica
RETIREMENT HOME IN JACO, S.A. 810 991,440
Attn: Xxxxxxx Xxxxxxxxx Xxxxxx (1-832-451)
Apdo. 947-2400
Desamparados
San Xxxx, Costa Rica
MY SPECIAL FARM IN JACO, S.A. 810 991,440
Attn: Xxxxx Xxxxxxx Xxxxxx Xxxxxx (1-1197-0325)
Multicentro Costa Brava, local #7
Bajos de la Fiscalia xx Xxxxxxxx
Bufete Xxxxxxxxx Xxxxxx y Asoc.
Jaco, Xxxxxxxx
Puntarenas, Costa Rica
INVERSIONES Y DESARROLLOS MAR Y PLATA CRI, S.A. 810 991,440
Attn: Xxxxx Xxxxxxxxx Xxxxxx (1-1100-260)
Xxxxxxx Centro
200 mts. norte de la oficina de correos
Xxxxxx Xxxxxxx y Asoc.
Heredia, Costa Rica
INVERSIONES CAPITAL VARIO CR S.A. 810 991,440
Attn: Xxxxxxxx Xxxxxxxxx Xxxxxx (1-1201-0933)
Barrio Santa Xxxxx
00 xxxxx xx Xxxx Bar
Casa de alto, porton negro, mano der.
Desamparados
San Xxxx, Costa Rica
2
PLATINO AVENTURAS INTERNACIONALES, S.A. 810 991,440
Attn: Xxxxx Xxxxxxxxx Xxxxxx (1-1100-260)
Xxxxxxx Centro
200 mts. norte de la oficina de correos
Xxxxxx Xxxxxxx y Asoc.
3
EXHIBIT C
Consent of Director of Kazakh Metals, Inc.
A special meeting of the Directors of Kazakh Metals, Inc. (the
"Corporation"), a British Virgin Islands, international business company, was
held by consent and without an actual meeting. The undersigned, being the sole
Director, does hereby waive notice of the time, place and purpose of this
meeting of the Directors of the Corporation and, in lieu thereof, hereby agrees
and consents to the adoption of the following corporate actions.
WHEREAS, the Corporation intends to exchange all of the issued and
outstanding capital stock of the Corporation for a specified number of BEKEM
METALS, INC. ("BEKEM METALS") common shares;
WHEREAS, the Corporation's legal counsel has prepared a formal
acquisition agreement consistent with the terms of the negotiations, which
"Acquisition Agreement" is attached hereto;
WHEREAS, it is in the Corporation's best interests to approve the terms
and execution of the Acquisition Agreement on behalf of the Corporation;
NOW, THEREFORE, BE IT RESOLVED, that the terms and conditions of the
exchange as set forth in the Acquisition Agreement are hereby are, ratified and
confirmed, and the Director of the Corporation, Xxxxxx Xxxxxx is authorized to
execute the same on behalf of the Corporation.
General Authorization
BE IT RESOLVED that the Director of the Corporation be, and he
hereby is, authorized, directed and empowered to prepare or cause to be
prepared, execute and deliver all such documents and instruments and to
undertake all such actions as they deem necessary or advisable in order
to carry out and perform any or all of the matters contemplated by the
Acquisition Agreement and as authorized in the foregoing resolution.
IN WITNESS WHEREOF, each of the undersigned has executed this written
consent, which shall be effective as of October __, 2005.
-------------------------
Xxxxxx Xxxxxx, Director
EXHIBIT D
Consent of Directors of Bekem Metals, Inc.
A special meeting of the Directors of Bekem Metals, Inc., (the
"Corporation"), a Utah corporation, was held by consent and without an actual
meeting. The undersigned, being all of the Directors, do hereby waive notice of
the time, place and purpose of this meeting of the Directors of the Corporation
and, in lieu thereof, hereby agree and consent to the adoption of the following
corporate actions.
WHEREAS, the Corporation intends to purchase all the issued and
outstanding capital stock of KAZAKH METALS, INC. ("KAZAK METALS") in exchange
for a specified number of the Corporation's common stock;
WHEREAS, the Corporation's legal counsel has prepared a formal
acquisition agreement, which "Acquisition Agreement" is attached hereto as
Exhibit A;
WHEREAS, it is in the Corporation's best interests to approve the terms
and execution of the Acquisition Agreement on behalf of the Corporation;
NOW, THEREFORE, BE IT RESOLVED that the terms and conditions of the
exchange as set forth in the Acquisition Agreement are, ratified and confirmed,
and the President of the Corporation is authorized to execute the same on behalf
of the Corporation.
General Authorization
BE IT RESOLVED that the President of the Corporation be, and
hereby is authorized, directed and empowered to execute, prepare or
cause to be prepared, execute and deliver all such documents and
instruments and to undertake all such actions as they deem necessary or
advisable in order to carry out and perform any or all of the matters
contemplated by the Acquisition Agreement and is authorized in the
foregoing resolution.
IN WITNESS WHEREOF, each of the undersigned has executed this written
consent, which shall be effective as of October 19, 2005.
-------------------------------- -----------------------------
Xxxxx Cherdabeyev, Director Xxxxx Xxxxxxx, Director
--------------------------------
Dosan Kassymkhanuly, Director
