THE SECURITIES REPRESENTED BY THIS RESTATED CONVERTIBLE LOAN AND OPTION
AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF A REGISTRATION STATEMENT COVERING THIS
RESTATED CONVERTIBLE LOAN AND OPTION AGREEMENT OR AN OPINION OF COUNSEL TO THE
COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED. THIS PROMISSORY NOTE IS NOT A
SUITABLE INVESTMENT FOR PERSONS WHO ARE NOT ABLE TO BEAR THE TOTAL LOSS OF THIS
INVESTMENT AND HAS ADEQUATE FINANCIAL RESOURCES TO PROVIDE AND MEET ITS
FINANCIAL NEEDS
Restated Convertible Loan and Option Agreement
between
Eastern Goldfields SA (Proprietary) Limited
and
Eastern Goldfields Inc
and
Asian Investment Management Services Limited
CONTENTS
No
Clause
Page No.
1.
PARTIES
1
2.
RECITALS
1
3.
DEFINITIONS
2
4.
SUSPENSIVE
CONDITIONS
6
5.
CANCELLATION AND SUBSTITUTION OF CONVERTIBLE
LOAN
AGREEMENT
7
6.
ADDITIONAL LOAN
FACILITY
7
7.
INTEREST
8
8.
CONVERSION OF
LOAN
8
9.
ISSUE OF ADDITIONAL SHARE
CAPITAL
9
10.
FAILURE TO UNDERTAKE THE
LISTING
9
11.
OPTION TO
SUBSCRIBE
10
12.
RIGHT OF FIRST REFUSAL ON
FUNDING
11
13.
REPRESENTATIONS AND
WARRANTIES
11
14.
FURTHER
ASSISTANCE
12
15.
BREACH
13
16.
DOMICILIUM
13
17.
ARBITRATION
14
18.
GENERAL
15
Restated Convertible Loan and Option Agreement
1.
PARTIES
1.1
EASTERN GOLDFIELDS SA (PROPRIETARY) LIMITED, A PRIVATE
LIMITED LIABILITY COMPANY DULY INCORPORATED IN ACCORDANCE WITH THE COMPANY LAWS
OF THE RSA UNDER REGISTRATION NUMBER 1993/006883/07 (EGSA);
1.2
EASTERN GOLDFIELDS INC, A NEVADA CORPORATION WITH
REGISTRATION NUMBER 88-0441307 (EGI); AND
1.3
ASIAN INVESTMENT MANAGEMENT SERVICES LIMITED, A LIMITED
LIABILITY COMPANY DULY INCORPORATED IN ACCORDANCE WITH THE COMPANY LAWS OF THE
BRITISH VIRGIN ISLANDS UNDER REGISTRATION NUMBER 30267 (AIMS).
2.
RECITALS
2.1
EGSA, AIMS AND THE PHOENIX GOLD FUND ENTERED INTO THE
CONVERTIBLE LOAN AGREEMENT ON 31 MARCH 2008 IN TERMS OF WHICH, AMONGST OTHER
THINGS:
2.1.1
THE EGSA REQUIRED PRE-LISTING FUNDS PRIOR TO ITS PROPOSED
LISTING ON THE JSE AS WELL AS WORKING CAPITAL IN ORDER TO FUND ITS MINING
OPERATIONS;
2.1.2
THE EGSA INTENDED LISTING ITS ISSUED ORDINARY SHARE
CAPITAL ON THE JSE WITHIN 12 (TWELVE) MONTHS FROM THE SIGNATURE DATE OF THE
CONVERTIBLE LOAN AGREEMENT;
2.1.3
AIMS AND THE PHOENIX GOLD FUND ADVANCED TO EGSA AN AMOUNT
OF R32 000 000
(THIRTY TWO MILLION RAND) AND AGREED TO CONVERT THAT SUM INTO
ORDINARY SHARES OF EGSA UPON THE JSE HAVING APPROVED THE COMPANY FOR LISTING;
AND
2.1.4
FOR THE PURPOSES OF THE CONVERTIBLE LOAN AGREEMENT, EGSA,
AIMS AND THE PHOENIX GOLD FUND VALUED THE COMPANY AT ZAR 432 000 000 (FOUR
HUNDRED AND THIRTY TWO MILLION RAND) AND THE PERCENTAGE SHAREHOLDING THAT WOULD
HAVE BEEN ISSUED TO AIMS AND THE PHOENIX GOLD FUND IN ORDER TO DISCHARGE THE
INITIAL LOAN WAS TO HAVE BEEN CALCULATED ACCORDINGLY.
2.2
FOR VARIOUS ECONOMIC, FINANCIAL AND PRACTICAL REASONS,
EGSA DID NOT LIST ITS ISSUED ORDINARY SHARE CAPITAL ON THE JSE AS CONTEMPLATED
IN THE CONVERTIBLE LOAN AGREEMENT.
2.3
PRIOR TO 27 MARCH 2009, THE PHOENIX GOLD FUND CEDED AND
ASSIGNED ALL