Filed by Automated Filing Services Inc. (604) 609-0244 - Spur Ventures Inc. -
Exhibit 3.5
Supplementary Agreement II
This Agreement is made on April 20, 2004 at Yichang, China
BETWEEN
Spur Chemicals (BVI) Inc. ("Spur")
Legal Address: Road Town, Tortola, British Virgin Islands
Legal Representative:
Name: Yingbin Ian He
Title: President
Nationality: Canadian
AND
Hubei Yichang Phosphorus Chemicals Group Company Limited("YPCC")
Legal Address: 114 Yanjiang Avenue, Yichang City, Hubei, China 443000
Legal Representative:
Name: Qin Qigui
Title: General Manager
Nationality: Chinese
WHEREAS:
A. Spur has invested substantial amount of time and capital into the
fertilizer and the phosphate mine projects since 1996, totaling more than RMB
50,000,000;
B. Spur and YPCC signed a joint venture contract on June 25, 2003 on the
establishment of Yichang Maple Leaf Chemicals Ltd. ("YMC");
C. Spur and YPCC signed a supplementary contract on November 9, 2003 with
a view to restructuring YMC in due course in order to improve the project
economics and to maximize the profit of the project;
D. Spur, YPCC and Yuanfeng Chemicals Ltd. entered into a joint venture
contract and an acquisition agreement on November 8, 2004 under which Spur has
acquired 65% of the Xinyuan Factory and Yichang Spur Chemicals Ltd. ("YSC") has
been established. The total investment in YSC is RMB 150,000,000 to construct a
phosphoric acid plant with an annual capacity of 60,000 tonnes per year and a
NPK fertilizer plant with an annual capacity of 300,000 tonnes;
E. A Scoping Study on One Million t/a High Grade Phosphate Fertilizer
Project dated December 2003 authored by Nanhua Group Design Institute and a Mine
Design Planning Report of a Sino-Canadian Joint Venture Yichang Phosphate
Fertilizer Project Phosphate Mine dated March 2004 authored by China Global
Engineering Company Huabei Design Institute have been produced; and
F. After intensive negotiation between Spur and YPCC and consultation
with Yichang Government, Spur and YPCC wish to restructure YMC with the
following terms and conditions.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT THE PARTIES AGREE AS FOLLOWS:
1. Definition and Appendices
The following terms shall have the meanings set out below:
"Canadian Dollar" or "Can $" means the lawful currency of Canada.
"Renminbi" or "RMB" means the lawful currency of China.
"United States Dollars" or "US$" means the lawful currency of the United States
of America.
This Supplementary Agreement is based on the following reports and
appendices:
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2. Restructure of YMC
The Parties agree to restructure YMC as follows:
(a) The restructured YMC shall have a total investment of RMB770
million based on the annual production scale of 700,000 tonne
phosphate fertilizer per year (the total scale is 1,000,000
tonnes per year, and YSC will implement and produce the first
300,000 tons) and annual production scale of 1,200,000 tonne
mining capacity. The restructured YMC shall have a registered
capital of RMB269.5 million.
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(b) YPCC shall invest its mining rights as evidenced by its mining
licenses valued at RMB57,340,000, accounting for 21.28% of the
registered capital.
(c) Spur shall invest foreign exchange cash in the amount of US
$25,560,000 (equivalent to RMB212,160,000), accounting for 78.72%
of the registered capital.
(d) YMC shall submit its restructure application for adjustment of the
registered capital with a board of directors' resolution, this
Supplementary Agreement, the Fertilizer Preparatory Feasibility
Study Report, and the Mine Project Design to Yichang Government,
Hubei Government and Central Government for approval as soon as
possible.
3. First Instalment Payment
The first instalment payment to the registered capital of the
restructured YMC shall be as follows:
(a) Within three months of the approval of the restructured YMC, Spur
shall invest RMB31,820,000 (US $3,834,000), accounting for 15% of
the registered capital to the restructured YMC, to the restructured
YMC. Because Spur has invested RMB4,410,000 (Can $700,000) towards
the registered capital of YMC, Spur shall only pay RMB27,410,000(US
$3,302,000)to the registered capital of the restructured YMC.
(b) Within three months of the approval of the restructured YMC, YPCC
shall transfer its mining rights over Dianziping as evidenced by
its mining license to YMC.
(c) YPCC covenants with Spur the following:
YPCC shall complete the transfer of the mining license to the
restructured YMC over Shukongping within 6 months of the approval
of the restructured YMC.
4. Supplementary Provision
Both parties shall take steps to implement the provisions under this
Supplementary Agreement and give effect to the provisions of this Supplementary
Agreement.
If there is any conflict or discrepancy between this Supplementary
Agreement and the joint venture contract, articles of association, or the
supplementary contract of YMC, this Supplementary Agreement shall prevail.
This Supplementary Agreement shall be written in both Chinese and
English. Both versions are equally authentic and have same legal effect.
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This Supplementary Agreement is signed in Yichang, Hubei, China, by
the authorized representatives of YPCC and Spur on April 20, 2004.
The Corporate Seal of Hubei Yichang )
Chemical Group Company Limited )
was hereunto affixed in the presence of: )
)
)
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Authorized Signatory )
)
) c/s
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Authorized Signatory )
)
The Corporate Seal of Spur Chemicals )
(BVI) Inc. was hereunto affixed in the )
presence of: )
)
)
)
Authorized Signatory )
)
) c/s
)
Authorized Signatory )
)
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