DATED THE 17th DAY OF February 2014

 

 

 

 

 

VERDE RESOURCES, INC.

 

AND

 

FEDERAL MINING RESOURCES LIMITED

 

AND

 

GOLD BILLION GLOBAL LIMITED

 

 

 

 

 

 

 

SUPPLEMENTARY AGREEMENT

 

TO

 

ASSIGNMENT AGREEMENT

 

FOR THE ASSIGNMENT OF MANAGEMENT RIGHTS IN

 

MERAPOH GOLD MINES IN MALAYSIA

 

                                                                         

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THIS AGREEMENT is made on the 17th day of February 2014.

 

BETWEEN:

 

VERDE RESOURCES, INC., a company incorporated in Nevada, USA having a company
registration number 27-2448672 and its principal executive offices at Unit 1503,
15/F., The Phoenix, 21-25 Luard Road, Wanchai, Hong Kong (hereinafter "the
Assignee").

 

AND

 

FEDERAL MINING RESOURCES LIMITED, a company incorporated in British Virgin
Islands having a company registration number 1603878 and its registered office
address at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola,
British Virgin Islands (hereinafter "the Assignor").

 

AND

 

GOLD BILLION GLOBAL LIMITED, a company incorporated in British Virgin Islands
having a company registration number 1759774 and its registered office address
at P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British
Virgin Islands (hereinafter "the Subsidiary").

 

WHEREAS:

 

A.      The Assignor owns 85% equity interest in CHAMPMARK SDN BHD (Company No.
235619-U), a private limited liability company incorporated in Malaysia under
the Companies Act, 1965 and having its registered office at G-1-10, Kuchai
Business Park, Jalan 1/127 off Jalan Kuchai Lama, 58200 Kuala Lumpur, Malaysia
(hereinafter referred to as “Champmark”). 

 

B.      Champmark is the Mining Contractor of the Mining Lease No. ML 08/2008
for Site IV-1 estimated to contain a total of 400 acres at the Merapoh Gold Mine
under the Contract of Work dated 21st July 2004 with MMC Corporation Berhad
(“MMC”), the Permit Holder of the Mining Lease. There are 6 other sites, in
addition to Site IV-1, at the final stage of approval for mining licenses.

 

C.      The Assignor set up a subsidiary company Gold Billion Global Limited
(the Subsidiary) on the 7th February 2013. Under a mutual agreement between the
Assignor and the Assignee, the Assignor agreed to transfer the Subsidiary to the
Assignee on 18th October 2013 and was completed on 25th October 2013.

                                                                         

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D.      The Assignee through the Subsidiary, agrees to accept and the Assignor
agrees to assign its management rights of Champmark’s mining operation at the
Mining Lease (hereinafter "the Management Rights") from the Assignor on the
terms and conditions hereinafter appearing. Champmark shall remain to be the
Mining Contractor of the Mining Lease.

 

E.      Subject to audit of the Subsidiary and Board approval of the Parties,
the Assignor and Assignee enter into this Supplementary Agreement to clarify the
rights and obligations and terms and conditions of the mutual agreement and to
complete the acquisition of the Subsidiary. In addition to the Management Rights
in the Original Agreement, full control of the 85% interest in Champmark and the
additional rights and obligations as defined in Clause 2.1 are assigned to the
Assignee by the Assignor as per this Supplementary Agreement.

 

NOW IT IS HEREBY AGREED AS FOLLOWS:

 

1       INTERPRETATION 

1.1    Definitions  

In this Supplemental Agreement, the following words and expressions shall have
the following meanings:

“Entire Agreement” means the Original Agreement as amended by this Supplemental
Agreement;

“Original Agreement” means the Assignment Agreement For The Assignment Of
Management Rights In Merapoh Gold Mines In Malaysia that was entered into on the
25th day of October 2013, between the Parties;

“Parties” means the signatories to this Supplemental Agreement; and

“Supplemental Agreement” means this supplemental agreement.

  

1.2    One agreement

The Original Agreement, together with this Supplemental Agreement, shall, with
effect on and from the date hereof, be read and construed as one document and
references in the Original Agreement to “this Agreement” shall from the date
hereof (but not for any purposes prior to the date hereof) incorporate
references to this Supplemental Agreement.

  

 

                                                                         

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1.3    Terms defined

In this Supplemental Agreement, unless the context requires otherwise, terms
defined in the Original Agreement and not otherwise defined herein, shall have
the same meanings in this Supplemental Agreement.

  

1.4    Immediate effect

The amendments provided for in this Supplemental Agreement shall, save where
expressly provided to the contrary, take effect forthwith upon execution of this
Supplemental Agreement by the Parties.

 

2       AMENDMENTS & CLARIFICATIONS TO THE ORIGINAL AGREEMENT

 

2.1      Assignment Of Additional Rights & Obligations

On July 1, 2013, the Assignor has assigned its rights and obligation on
Champmark to the Subsidiary.

Champmark is a deemed subsidiary of the Subsidiary where

(i)            the Subsidiary has control the Board of Directors of Champmark
and the right to appoint directors in Champmark to represent the 85%
shareholding in Champmark;

(ii)          the Subsidiary has rights to receive future benefits and residual
value, and obligation to absorb loss and finance for Champmark;

(iii)         the Subsidiary has the power to direct the activities of Champmark
that most significantly impact Champmark’s economic performance and the
obligation to absorb losses of Champmark that could potentially be significant
to the Champmark or the right to receive benefits from Champmark that could
potentially be significant to Champmark; and

(iv)         the Subsidiary is the primary beneficiary of Champmark because the
Subsidiary can direct the activities of Champmark through the common directors
and 85% shareholder of the Assignor.

It is determined that Champmark is de-facto agent of the Subsidiary and so the
Subsidiary will consolidate Champmark from July 1, 2013.  

Under the terms of the Assignment Agreement, the Assignor has assigned its
management rights of Champmark’s mining operation in the Mining Lease to the
Subsidiary in exchange for 80,000,000 shares of the Assignee’s common stock.

The Subsidiary and its deemed subsidiary become wholly-owned subsidiary and
deemed 85% subsidiary of the Assignee. The acquisition of 100% of the issued and
outstanding capital stock of the Subsidiary was completed subject to the
approval of the Board of Directors of the Parties and the audit of the
Subsidiary.

                                                                         

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2.2      Reverse Acquisition

The Assignee as the legal parent shall be the accounting acquiree while the
Subsidiary shall be the accounting acquirer. There is a 15% non-controlling
interest of Champmark after the acquisition.

This transaction was accounted for as a recapitalization effected by a share
exchange, wherein the Subsidiary with its 85% deemed subsidiary Champmark was
considered the acquirer for accounting and financial reporting purposes. The
assets and liabilities of the acquired entity have been brought forward at their
book value and no goodwill has been recognized.

As a result of the acquisition, the Assignee holds 100% equity interest in the
Subsidiary and 85% variable interest in Champmark. The Assignee’s consolidated
subsidiaries include the Subsidiary being the Assignee’s wholly owned subsidiary
and 85% of Champmark being a variable interest entity (VIE) and deemed
subsidiary of the Subsidiary.

 

2.3    Amended Wording

The typographical error for “Gold Billions Ltd.” in the Original Agreement shall
be replaced with “Gold Billion Global Limited”.

 

3       COMPLETION

Subject to audit of the Subsidiary and Board approval of the Parties, completion
of the Supplementary Agreement shall take place on 17 February 2014. 

 

4       WARRANTIES AND REPRESENTATIONS

1        

2        

3        

4        

4.1      The Assignor hereby warrants and represents to the Assignee that the
Assignor is the beneficial owner of the Management Rights and is fully capable
of entering into this Agreement and to perform all obligations and duties
hereunder without the consent, approval, permission, license or concurrence of
any third party save as mentioned in this Agreement.

 

4.2      The Assignee hereby warrants and represents to the Assignor that the
Assignee is fully capable of entering into this Agreement and to perform all
obligations and duties hereunder without the consent, approval, permission,
license or concurrence of any third party save as mentioned in this Agreement.

                                                                         

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4.3      The Subsidiary hereby warrants and represents to the Assignee that the
Subsidiary, being the principal of Champmark and having complete authority to
represent Champmark, is fully capable of entering into this Agreement and to act
on behalf of Champmark.

 

4.4      Each of the warranties and representations, undertakings and identities
contained in this Agreement will survive the completion of the assignment of the
Management Rights.

 

4.5      Prior to the Completion Date, if any of the warranties, representations
or undertakings in this Agreement are found to be materially untrue, inaccurate
or misleading or have not been fully carried out in any material respect, or in
the event of the Assignor becoming unable or failing to do anything required
under this Agreement to be done by it at or before the Completion Date, the
Assignee may by notice in writing rescind this Agreement but without prejudice
to any claim the Assignee may have against the Assignor hereunder.

 

5       TIME 

5.1      Time shall be of the essence of this Agreement.

5.2      No time or indulgence given by any party to the other party shall be
deemed or in any way be construed as a waiver of any of its rights and remedies
hereunder.

 

6       CONFIDENTIALITY 

Other than such disclosure as may be required by law or any competent
authorities, neither of the parties hereto shall make, and the Assignor shall
procure that the Company will not make any announcement or release or disclose
any information concerning this Agreement or the transactions herein referred to
or disclose the identity of the other party (save disclosure to their respective
professional advisers under a duty of confidentiality) without the written
consent of the other patty.

 

7       ASSIGNMENT 

This Agreement shall be binding on and shall ensure for the benefits of the
successors and assigns of the parties hereto but shall not be assigned by any
party without the prior written consent of the other party.

 

                                                                         

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8       NOTICES AND OTHER COMMUNICATION

Any notice or other communication to be given under this Agreement shall be in
writing and may be delivered by hand or given by facsimile, telex or cable. Any
such notice or communication shall be sent to the party to whom it is addressed
and must contain sufficient reference and/or particulars to render it readily
identifiable with the subject matter of this Agreement. If so delivered by hand
or given by facsimile, telex or cable such notice or communication shall be
deemed received on the date of dispatch and if so sent by post (or, if sent to
an address outside of British Virgin Islands, so sent by first class air-mail)
shall be deemed received 2 business days after the date of dispatch.

 

To the Assignee:

VERDE RESOURCES, INC.

Unit 1503, 15/F., The Phoenix, 21-25 Luard Road, Wanchai, Hong Kong

Fax:          852-2152 0612

Email:         mdwu@fcihk.com

 

To the Assignor:

FEDERAL MINING RESOURCES LIMITED

Suite 4703, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong

Fax:          852-2827 7733

Email:         alai@yclhk.com

 

To the Subsidiary:

GOLD BILLION GLOBAL LIMITED

Unit 1503, 15/F., The Phoenix, 21-25 Luard Road, Wanchai, Hong Kong

Fax:          852-2152 0612

Email:         mdwu@fcihk.com

 

9       COST AND EXPENSES

Each party shall bear its legal and professional fees, costs and expenses
incurred in the negotiations, preparation and execution of this Agreement.

 

10    GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
British Virgin Islands.

 

 

                                                                         

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IN WITNESSS whereof the parties hereto have executed this Agreement the day and
year first above written.

 

 

The Common Seal of                                             )

VERDE RESOURCES, INC.                              )

was affixed in the presence of                              )

Director of the Company:                                      )

 

 

 

/s/ Ming Ding Wu

_____________________

Ming Ding Wu                                                        )

 

 

The Common Seal of                                            )

FEDERAL MINING RESOURCES LIMITED  )

was affixed in the presence of                             )

Director of the Company:                                     )

 

 

 

/s/ Andy Kui Shing Lai

_____________________

Andy Kui Shing Lai                                               )

 

 

The Common Seal of                                            )

GOLD BILLION GLOBAL LIMITED                 )

was affixed in the presence of                             )

Director of the Company:                                     )

 

 

 

/s/ Ming Ding Wu

_____________________

Ming Ding Wu                                                       )