EXHIBIT 10.1 B
LETTER OF INTENT
THIS LETTER OF INTENT made as of the
15th day of July, 1997
BETWEEN
SAOWANI DEVELOPMENT S.A.R.L., a company duly incorporated pursuant to the laws
of Madagascar and having an office located at Lot MA II, 1 Bis, Maibahoaka,
Ivato, Antananarivo, Madagascar.
(hereinafter referred to as "SAO")
- and -
MISS SAOWANI CHAQIPHAN Lot MA II, 1 Bis,
Maibahoaka, Ivato, Antananarivo, Madagascar.
(hereinafter referred to as "MISS S")
- and -
XX. XXXX XXXXXXX
Lot MA II, 1 Bis, Maibahoaka, Ivato, Antananarivo, Madagascar.
(hereinafter referred to as "MR. D")
- and -
FULCRUM HOLDINGS OF AUSTRALIA INC., a body corporate dully incorporated under
the laws of Delaware, having an office at #300, 000 Xxxxx Xxxxxxx Xxxxxxx Xxxx
Xxxxx, Xxxxxxx U.S.A (Hereinafter referred to as "FULCRUM")
WHEREAS:
1. XXXX XXXXXXX AND SAOWANI CHAQIPHAN ARE THE ONE HUNDRED (100%) PERCENT
OWNERS OF THE ISSUED, OUTSTANDING AND VOTING STOCK OF A MADAGASCAR
CORPORATION CALLED SAOWANI DEVELOPMENT S.A.R.L.; AND WHEREAS
2. MR. D AND MISS S WISH TO SELL TO FULCRUM AND FULCRUM WISHES TO PURCHASE,
90% OF MR. D AND MISS S'S RIGHT, TITLE AND INTEREST IN AND TO THE STOCK OF
SAO; AND WHEREAS
3. SAO HAS MINING INTERESTS IN EMERALD, SAPPHIRE AND GOLD PROPERTIES MORE
SPECIFICALLY CALLED: PERIMETERS (21/2KM. X 21/2KM); AND WHEREAS
4. Description of Emerald Perimeters are:
Permit No. Q53-761, northeast of the Xxxx Steven's Mine
XV YV Substance Commune
-- -- --------- -------
546.250 538.750 Emerald Mananjary
543.750 538.750 Emerald Mananjary
541.250 538.750 Emerald Mananjary
A mica vein of immense value can be put into production immediately to
produce emeralds, alluvial gold from the river and rich hard rock gold.
These perimeters are subject to verification by the Ministry of Mines in
Antananarivo, Madagascar. At this time, there are no gold mining permits,
but applications for some have been made. The aforementioned perimeters
were acquired wherein SAO obtains eighty (80%) percent of production while
twenty (20%) percent remains with the current landowners
5. Description of Gold Perimeters are:
South of the BRGM block Madagascar Primary Sector s.a.r.l.
YV Substance Department Commune
-- --------- ---------- -------
706.25 1428.75 OR Ambilobe
708.75 1428.75 OR Betsiaka
716.25 1433.75 OR Ambilobe
718.75 1433.75 OR Betsiaka
708.75 1431.25 OR Ambilobe
711.25 1431.75 OR Betsiaka
713.75 1431.75 OR Ambilobe
713.75 1433.75 OR Betsiaka
A CANADIAN GEOLOGIST HAS EXAMINED SOME OF THESE PERIMETERS AND SAMPLES
HAVE BEEN TAKEN. THE INDICATION IS THAT THESE PERIMETERS HAVE POTENTIAL
GOLD MINERALIZATION AND SHOULD HAVE FURTHER RESEARCH AND EXPLOITATION WORK
CARRIED OUT (IN MALAGASY MINING TERMS RESEARCH IS EXPLORATION AND
EXPLOITATION IS MINING). AFTER THE MALAGASY INTEREST, SAO HAS A 70% NET
INTEREST IN PERIMETERS.
6. Description of Sapphire Interests are:
AFTER THE MALAGASY INTEREST, SAO HAS A 75% NET INTEREST AGREEMENT ON TWO
PERIMETERS IN THE SOUTH.
NOW THEREFORE PURSUANT TO THE TERMS AND CONDITIONS HEREINAFTER STATED.
7. ALL INFORMATION REQUIRED BY EITHER PARTY IS BE VALIDATED BY OCTOBER 31,
1997, OR SUCH LATER DATE AS POSSIBLE, BUT IN ANY EVENT OR BEFORE JANUARY
1, 1998 AFTER WHICH, IF ACCEPTABLE TO FULCRUM, MR. D, MISS. S, IT IS THE
PARTIES' INTENT TO ENTER INTO A DEFINITIVE PURCHASE AND SALE AGREEMENT
WHEREIN FULCRUM WOULD PURCHASE NINETY (90%) PERCENT OF THE ISSUED,
OUTSTANDING AND VOTING SHARES OF SAO.
8. THIS CONTRACT IS ASSIGNABLE BY FULCRUM EITHER PRIOR TO OR SUBSEQUENT TO
THIS LETTER OF INTENT BEING REDUCED TO A SHARE PURCHASE AGREEMENT UPON
SUCH TERMS AND CONDITIONS AS ARE REQUIRED TO GIVE FULL FORCE AND EFFECT TO
THE INTENT OF THE PARTIES THE CONSENT OF SAO, MR. D., AND MISS S. NOT
BEING REQUIRED THERETO.
9. THE TERMS OF THE DEFINITIVE PURCHASE AND SALE AGREEMENT BETWEEN THE
PARTIES WOULD INCLUDE, BUT WOULD NOT LIMITED TO, THE FOLLOWING:
A) FULCRUM WOULD SPEND ONE HUNDRED (100%) PER CENT OF ALL MONIES
NECESSARY TO CARRY OUT THE RESEARCH AND DEVELOPMENT WORK ON THE
PROPERTIES INCLUDED BUT NOT LIMITED TO ALL NECESSARY EQUIPMENT SUCH
AS BULLDOZERS, BACK HOES, WASHING PLANTS ETC.;
B) FULCRUM, SHALL, ON A TIMELY BASIS, SUPPLY MR. D AND MISS S WITH
COPIES OF ALL ENGINEERING REPORTS GENERATED FROM THE PROPERTY;
C) AN APPROPRIATE FINDER'S FEE SHALL BE PAYABLE BY FULCRUM TO A
DESIGNATED 3RD PARTY IN ACCORDANCE WITH THE POLICIES OF THE NATIONAL
ASSOCIATION OF SECURITIES DEALERS;
D) ON THE GOLD PERIMETERS NOTED IN ARTICLE 4, FULCRUM WILL RECEIVE
NINETY (90%) PERCENT OF ALL DEFINED PROFITS EARNED BY THE
EXPLOITATION AND SALE OF ALL MINERALS AND ANY OTHER INCOMES DERIVED
OF THE AFOREMENTIONED PERIMETERS UNTIL FULCRUM HAS EARNED ONE
HUNDRED (100%) PERCENT OF ITS EXPENDITURES PLUS INTEREST AT THE RATE
OF LIBR + FIVE (5%) PERCENT AND THEREAFTER WOULD RECEIVE EACH IT'S
RESPECTIVE PERCENTAGE PURSUANT TO THE SAO UNDERLYING AGREEMENT;
E) FULCRUM SHALL, UPON EXECUTION OF THE DEFINITIVE PURCHASE AND SALE
AGREEMENT, ARRANGE FOR MR. D TO EARN ONE MILLION FIVE HUNDRED
THOUSAND COMMON VOTING SHARES OF A DEEMED PUBLIC COMPANY, WHICH WILL
BE SUBJECT TO THE PRICING OF US$0.10 AND WILL ARRANGE FOR A RELEASE
OF THE COMMON VOTING SHARES IN ACCORDANCE WITH THE RULES PRESCRIBED
BY THE SECURITIES EXCHANGE COMMISSION.
i) The parties hereto are aware of which deemed publicly traded
"Company" is referred to herein and Mr. D's acceptance of the
shares is deemed satisfaction of payment of the consideration
herein.
10. THE DEFINITIVE PURCHASE AND SALE AGREEMENT SHALL CONTAIN SUCH
REPRESENTATIONS AND WARRANTIES ON BEHALF OF MR. D, MISS. S AND SAO AS
SHALL BE USUAL AND CUSTOMARY FOR THE TYPE OF TRANSACTION CONTEMPLATED
HEREIN AND SHALL INCLUDE REPRESENTATIONS AND WARRANTIES AS TO:
A) LEGAL OPINION AS TO TITLE OF THE PERIMETERS;
B) THE ABSENCE OF ANY ADVERSE INTEREST OR LITIGATION PENDING OR
THREATENED RESPECTING MR. D, MISS S. OR SAO.
C) SUBSTANTIAL COMPLIANCE BY ALL PARTIES CONCERNED WITH ALL APPLICABLE
LAWS AND REGULATIONS;
D) THE ABSENCE OF DEFAULT BY MR. D, MISS S. OR SAO UNDER ANY AND ALL
CONTRACTS, LEASES AND AGREEMENTS TO WHICH IT IS A PARTY; AND
e) Such further representations and warranties as may be required
or necessary.
11. UNDER THE DEFINITIVE PURCHASE AND SALE AGREEMENT, FULCRUM WOULD BE SUBJECT
TO THE FOLLOWING CONDITIONS TO BE FULFILLED OR PERFORMED BY THE TIME
INDICATED UNLESS ANY SUCH CONDITION IS WAIVED IN WRITING BY ALL PARTIES
CONCERNED:
A) PREFERABLY ON OR BEFORE OCTOBER 31, 1997 AND IN ANY EVENT NO LATER
THAN JANUARY 31, 1998 OR SUCH OTHER DATE AS MAYBE MUTUALLY AGREED BY
THE PARTIES, FULCRUM SHALL PRODUCE AN INDEPENDENT ENGINEERING REPORT
WITH RESPECT TO THE PERIMETERS IN A FORM SATISFACTORY TO ALL PARTIES
CONCERNED;
12. PRIOR TO CLOSING, ALL PRIVATE, GOVERNMENTAL OR REGULATORY CONSENTS OR
APPROVALS NECESSARY OR DESIRABLE FOR THE COMPLETION OF THE TRANSACTION
HEREIN CONTEMPLATED SHALL HAVE BEEN OBTAINED, INCLUDING BUT WITHOUT
RESTRICTING THE GENERALITY OF THE FOREGONE APPROVALS FROM THE PERIMETERS
MINORITY INTEREST HOLDERS TO THE TRANSACTION, THE INTEREST OF SAO AND A
MUTUALLY AGREEABLE FORM OF PAYMENT FROM SAO TO THE MINORITY INTEREST
HOLDERS OF PRODUCTION OR PRODUCTION VALUE.
13. THE MATTERS SET FORTH IN THE LETTER OF INTENT CONSTITUTE AN EXPRESSION OF
THE PARTIES MUTUAL INTENT ONLY, AND ARE ENTIRELY CONTINGENT UPON THE
NEGOTIATION, EXECUTION AND DELIVERY OF A DEFINITIVE PURCHASE AND SALE
AGREEMENT (THE "DEFINITIVE PURCHASE AND SALE AGREEMENT") BETWEEN MR. D &
MISS S AND FULCRUM CONTAINING TERMS, CONDITIONS AND PROVISIONS IN A FORM
AND SUBSTANCE SATISFACTORY TO ALL PARTIES AND THEIR RESPECTIVE LEGAL
COUNSEL INCLUDING BUT NOT LIMITED TO THE TERMS OF THIS LETTER OF INTENT.
14. SUBJECT TO THE TERMS AND CONDITIONS HEREOF, ALL COMMON SHARES ISSUED
HEREUNDER SHALL BE ISSUED FREE TRADING, SUBJECT TO APPLICABLE HOLD PERIODS
AND ANY ESCROW REQUIREMENTS AS MAY BE IMPOSED BY APPLICABLE SECURITIES
LEGISLATION AND ANY OTHER REGULATORY AUTHORITIES HAVING JURISDICTION THERE
OVER.
15. FULCRUM WILL:
A) Forthwith, retain an independent engineer to conduct an engineering
report of the perimeters; and
b) FULCRUM will pay for all expenses legal and otherwise respecting
this transaction.
16. EACH OF THE PARTIES HERETO WILL USE THEIR BEST COMMERCIAL EFFORTS TO
EXECUTE THE DEFINITIVE PURCHASE AND SALE AGREEMENT BY OCTOBER 31, 1997 AND
IN ANY EVENT NO LATER THAN JANUARY 31, 1998 OR SUCH OTHER DATE AS MUTUALLY
AGREEABLE BY THE PARTIES.
17. EACH PARTY TO THE DEFINITIVE PURCHASE AND SALE AGREEMENT SHALL HAVE
RECEIVED FAVOURABLE OPINIONS AS TO SUCH LEGAL MATTERS IN CONNECTION WITH
THE TRANSACTIONS CONTEMPLATED HEREIN AS MAY BE REASONABLY DEEMED
APPROPRIATE.
18. FROM THE DATE HEREOF TO CLOSING, MR. D, MISS S. AND SAO WILL GRANT TO
FULCRUM AND ITS REPRESENTATIVES AND AGENTS, ACCESS TO THE BOOKS AND
RECORDS OF MR. D, MISS S AND SAO AS MAY BE REASONABLY BE REQUIRED FOR THE
PURPOSE OF EXAMINING SAME IN CONNECTION WITH COMPLETING THE TRANSACTIONS
CONTEMPLATED HEREIN.
19. THIS TRANSACTION MUST BE APPROVED BY FULCRUM'S, OR FULCRUM'S ASSIGNEE, AND
THE DEEMED PUBLIC COMPANY REFERRED TO IN PARAGRAPH 9 HEREIN, DIRECTORS AND
SHAREHOLDERS.
20. TIME IS OF THE ESSENCE.
21. IF THE FOREGOING ACCURATELY SETS FORTH YOUR UNDERSTANDING OF OUR INTENT,
PLEASE INDICATE YOUR GOOD FAITH INTENTION TO ENTER INTO NEGOTIATIONS TO
CARRY OUT THE TRANSACTIONS DESCRIBED HEREIN BY EXECUTING THE ENCLOSED COPY
OF THIS LETTER OF INTENT AND RETURNING IT TO US, WHEREUPON ALL PARTIES
SHALL PROCEED PROMPTLY WITH THE PREPARATION OF A DRAFT THE DEFINITIVE
PURCHASE AND SALE AGREEMENT.
22. THIS LETTER OF INTENT WILL REMAIN CONFIDENTIAL BETWEEN THE PARTIES HERETO
AND NO PARTY SHALL RELEASE ANY INFORMATION RESPECTING SAME TO ANY PARTY
WITHOUT THE EXPRESS WRITTEN CONSENT OF AL PARTIES.
23. ALL COPIES OF THIS LETTER OF INTENT MAY BE EXECUTED AND SENT BY ELECTRONIC
TRANSMISSION, BUT ORIGINALLY EXECUTED DOCUMENTS MUST BE DELIVERED WITHIN A
REASONABLE TIME TO ALL PARTIES CONCERNED
XX. XXXX XXXXXXX
Per:
/s/ Xxxx Xxxxxxx /s/ [ILLEGIBLE]
---------------------------------- --------------------------------------
Authorized Signatory Witness
MISS SAOWANI CHAQIPHAN
Per:
/s/ Saowani Chaqiphan /s/ [ILLEGIBLE]
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Authorized Signatory Witness
FULCRUM HOLDINGS OF AUSTRALIA INC.
Per:
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx Xxxxxx
---------------------------------- --------------------------------------
Authorized Signatory Witness
SAOWANI DEVELOPMENTS S.A.R.L.
Per:
/s/ Saowani Chaqiphan /s/ [ILLEGIBLE]
---------------------------------- --------------------------------------
Authorized Signatory Witness
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