| Mon 16 May 2011, 7:17 | | GDO - Gold One International Limited - Recommended offer |
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GDO
GDO
GDO - Gold One International Limited - Recommended offer
Gold One International Limited
(Previously BMA Gold Limited)
Registered in Western Australia under the Corporations Act, 2001 (Cth)
Registration number ACN: 094 265 746
Registered as an external company in the Republic of South Africa
Registration number: 2009/000032/10
Share code on the ASX/JSE: GDO
ISIN: AU000000GDO5
OTCQX International: GLDZY
("Gold One" or the "company")
CASH OFFER TO GOLD ONE SHAREHOLDERS OF A$0.55 PER SHARE
TRANSFORMATIONAL TRANSACTION FOR GOLD ONE AND INTRODUCTION OF A STRATEGIC
PARTNER WITH A MINIMUM CAPITAL INJECTION OF A$150 MILLION
- Offer of A$0.55 (ZAR4.08*) per share by a consortium to Gold One
shareholders
- Offer price represents a premium of 27.9% to the closing price and 25.1%
premium to the 30-day volume weighted average price on the ASX on 12 May
2011
- Consortium of long-term strategic partners consist of Baiyin Non-Ferrous
Group (a subsidiary of the CITIC Group), the China-Africa Development
Fund (a subsidiary of the China Development Bank, and the Long March
Capital Group
- Consortium aims to secure an overall stake of 60% to 75% in Gold One
- Capital injection of a minimum of A$150 million (ZAR1.1 billion*) by the
consortium
- Current listings of Gold One on the ASX and the JSE to be maintained,
with the possibility of a future listing on the Hong Kong Securities
Exchange
- Gold One intends to become an active participant in the consolidation of
the global gold industry
- Transaction is recommended by the Gold One board of directors, in the
absence of a superior proposal, and subject to the opinion of an
independent expert
1. Introduction
JOHANNESBURG - 16 May 2011. Gold One International Limited (ASX and JSE:
GDO) is pleased to announce that the company has entered into a
Transaction Implementation Agreement ("TIA") with a consortium of
Chinese investors ("Consortium"), whereby the Consortium is seeking to
become the long-term strategic partner of Gold One and its major
shareholder. A copy of the TIA is attached as Annexure B to this
announcement.
The announcement of this transaction signals the commencement of a
landmark period of transformation for Gold One, which will position the
company as an active participant in the consolidation of the African and
the global gold mining industry. This transaction will combine Gold
One`s solid operating platform and strong, experienced management team,
with the extensive international presence and financial resources of the
Consortium.
Gold One has for some time actively investigated a range of alternatives
to increase its scale and production capacity and has identified a
strong investment partner in the Consortium. Gold One management
believes the Consortium is committed and has the financial resources to
back the company in pursuing value accretive opportunities for Gold One.
Through a series of interdependent transactions including an offer for
existing Gold One shares and a minimum A$150 million (ZAR1.1 billion*)
capital injection into Gold One, the Consortium plans to achieve a 60%
to 75% shareholding in the company.
Gold One President and Chief Executive Officer Neal Froneman commented:
"We are extremely excited about this opportunity for Gold One to form a
strategic partnership with this Consortium, led by a Fortune Global 500
Chinese corporation. We have been in dialogue with our future partners
for some time and they have visited our operations on a number of
occasions. We share a common vision, and have a similar culture and
ambition for Gold One. In addition we have identified many areas where
we can leverage off our complementary skills. I am confident that this
partnership will create long-term value for those Gold One shareholders
who elect to remain invested in Gold One, while also providing an
attractive opportunity for Gold One shareholders who elect to accept the
Consortium`s offer to realise the value of their Gold One holding."
Baiyin Chairman Li Peixing says: "As part of our going global strategy,
Baiyin has been seeking opportunities to invest in precious metals
assets, in particular in Africa. We identified Gold One as a well
managed gold company with a quality portfolio of resources, offering
significant growth prospects and a strong and dedicated team. Our
investment strategy focuses on securing companies with high quality
resources, low cash costs, and experienced operational teams that can
deploy our capital effectively. We think Gold One is such a company.
The Consortium will commit substantial financial and technical support
to assist Gold One to realise its strategy of expanding its African
portfolio of assets, and subsequently, international assets."
The Consortium comprises Baiyin Non-Ferrous Group Co. Limited
("Baiyin"), a subsidiary of the CITIC Group, the China-Africa
Development Fund ("CADF"), a subsidiary of the China Development Bank,
and the Long March Capital Group ("Long March"), all of which are acting
through BCX Gold Investment Holdings Limited ("BidCo"). More information
on the Consortium is set out at the end of this announcement.
The Consortium has already entered into an agreement with African Global
Capital (SA) (Pty) Limited through Navada Trading (Pty) Limited ("AGC"),
to acquire AGC`s 17.7% shareholding in Gold One through a wholly owned
subsidiary of Baiyin ("AGC Acquisition"). Completion of the AGC
Acquisition is subject, inter alia, to approval from the Australian
Foreign Investment Review Board ("FIRB").
2. Terms of the Transaction
The transaction will be executed through a series of interdependent
steps, namely, the Consortium through BidCo:
- making an off-market offer for all of the outstanding issued shares
in Gold One ("Offer Shares") at an offer price of A$0.55 (ZAR4.08*)
("Offer Price") per Gold One share ("Offer");
- subscribing for 375,000,000 Gold One ordinary shares ("Initial
Subscription Shares") at A$0.40 (ZAR2.97*) ("Initial Subscription
Price") per Gold One share ("Initial Subscription"), subject to:
- certain conditions precedent, including Gold One shareholder
approval;
- BidCo`s Offer for all of Gold One`s issued ordinary shares that it
does not already own being completed; and
- a "clawback" in favour of BidCo through the issue to Bidco of new
shares for no additional consideration up to a maximum of
492,002,621 shares ("Adjustment Subscription Shares"), should Gold
One`s forecast 2011 production targets (which it expects it will
achieve) not be met by the company ("Adjustment Subscription"),
subject to the fulfilment or waiver, as the case may be, of the
conditions precedent set out in section 5 to the TIA and in
accordance with the formula set out in Schedule 5 to the TIA (refer
to Annexure B); and
- to the extent that the aggregate Gold One shareholding achieved by
it through the AGC Acquisition, the Initial Subscription and the
Offer is less than 60% on a fully diluted basis, subscribing for up
to a maximum of 188,679,245 additional Gold One shares ("Additional
Subscription Shares") at an issue price of A$0.53 (ZAR3.93*) per
Gold One share ("Additional Subscription Price"), to achieve a
minimum 60% shareholding in Gold One, or such lower percentage as
may be acceptable to the Consortium ("Additional Subscription").
Gold One and BidCo are hereinafter collectively referred to as the
"Parties", whereas the Initial Subscription, the Adjustment
Subscription, the Offer and the Additional Subscription are hereinafter
collectively referred to as the "Transaction".
The Transaction, including the Adjustment Subscription Shares, is
recommended by the Gold One board of directors (the "Board"), in the
absence of a superior proposal, and subject to the opinion of an
independent expert. The Board will appoint an independent expert to
provide it with an opinion as to the fairness and reasonableness of the
Transaction to the shareholders of Gold One.
3. Transaction Rationale
The Transaction will introduce a strong investment partner to Gold One.
The Board believes that partnering with the Consortium will strengthen
the company`s ability to grow organically and acquisitively. The
Consortium is supportive of Gold One`s fundamental growth strategy, and
has committed to provide substantial financial, technical and corporate
resources to support its implementation.
The Consortium has demonstrated its willingness to assist Gold One in
its strategic objectives through its agreed funding of the Initial
Subscription and Additional Subscription. The amount raised through the
Initial Subscription will be used to enhance and expand the current
operations of Gold One, whilst also providing funding for identified
acquisition opportunities such as the proposed acquisition of gold
producer Rand Uranium (Pty) Limited by Gold One, announced on 28 April
2011.
The Transaction structure has the benefit of catering to the
requirements of both shareholders of Gold One who hold a positive view
of these current developments and wish to continue to remain invested
and participate in the future growth of the company, as well as those
who want to take this opportunity to realise all or part of an
attractive cash premium on their investment.
Gold One and the Consortium anticipate that substantial business and
strategic benefits will arise from this partnership. The Consortium
provides the company with:
- a supportive anchor shareholder, that shares with Gold One a common
vision for the expansion plans of the company;
- access to capital and competitive financing for Gold One through
its access to significant financial resources;
- a wealth of technical mining experience through Baiyin`s mining and
technical experience in challenging environments and commitment to
technology exchange initiatives that will benefit both existing and
future operations of the company; and
- CITIC Group, a premium corporate brand in Asian financial markets,
which will assist Gold One to access, as required, the Asian
capital markets at potentially significantly higher valuations.
Gold One and the Board believe that the Offer Price represents an
attractive proposition for its shareholders who wish to realise their
investment in Gold One. By accepting the Offer, either in whole or in
part only, shareholders will be able to realise attractive investment
appreciation at a price that represents a premium of 27.9% and a premium
of 31.0% to the closing price of Gold One shares on the ASX on 12 May
20111 and 30 March 20112 respectively.
Footnotes:
1. A trading halt was implemented in respect of the company`s
securities on 13 May 2011, at the request of the company pending
the release of this announcement.
2. Last business day prior to Gold One informing shareholders that it
was assessing a potential change of control transaction.
The Consortium is supportive of, and will retain in full the current
management of Gold One as well as the black economic empowerment
structures in place for the company`s South African subsidiaries. The
Consortium further does not seek, as part of the Transaction, any change
in the current listings of Gold One on the ASX and the JSE. It has,
however, indicated to the company that it may in due course propose an
amendment to the listings of Gold One, including seeking a listing on
the Hong Kong Securities Exchange.
4. Transaction Details
In terms of the TIA, subject to the fulfilment or waiver, as the case
may be, of the conditions precedent summarised in Annexure A, BidCo will
make the Offer on or about 22 June 2011, and the Initial Subscription,
and if applicable, the Additional Subscription will complete on or about
28 September 2011. In the event that the Adjustment Subscription is
required it will be implemented approximately one month after the
announcement and publication of the annual financial results of Gold One
for the year ending 31 December 2011.
The Initial Subscription Price, the Offer Price and the Additional
Subscription Price each represent the premium or (discount), whichever
is applicable, to the Gold One share price as set out in the table
below:
30-Day Share 30-Day 6-Month 12-Month
volume price on VWAP on VWAP on VWAP on the
weighted the ASX as the ASX as the ASX as ASX as at 12
average at closing at 12 May at 12 May May 20112
price on 12 May 20112 20112
("VWAP") 20112
on the ASX
as at 30
March
20111
Initial 12.3% (7.0%) (9.1%) 7.8% 15.8%
Subscriptio
n Price
Offer Price 54.4% 27.9% 25.1% 48.2% 59.2%
Additional 48.8% 23.3% 20.5% 42.8% 53.4%
Subscriptio
n Price (if
applicable)
Notes:
1. Last business day prior to Gold One informing shareholders
that it was assessing a potential change of control
transaction.
2. A trading halt was implemented in respect of the company`s
securities on 13 May 2011, at the request of the company
pending the release of this announcement.
30-Day Share 30-Day 6-Month 12-Month
VWAP on price on VWAP on VWAP on VWAP on
the JSE as the JSE as the JSE as the JSE as the JSE as
at 30 at closing at 12 May at 12 May at 12 May
March on 12 May 20112 20112 20112
20111 20112
Initial 16.6% (11.4%) (7.6%) 10.1% 23.5%
Subscripti
on Price
Offer 60.3% 21.9% 27.1% 51.4% 69.8%
Price
Additional 54.5% 17.5% 22.5% 45.9% 63.6%
Subscripti
on Price
(if
applicable
)
Notes:
1. Last business day prior to Gold One informing shareholders
that it was assessing a potential change of control
transaction.
2. A trading halt was implemented in respect of the company`s
securities on 13 May 2011, at the request of the company
pending the release of this announcement.
Subject to the implementation of the Offer, the level of acceptances
under the Offer, the issue of the Initial Subscription Shares, and (to
the extent required) the Additional Subscription Shares, BidCo (unless
it determines to hold a lower percentage) will likely hold an interest
in Gold One in the range of 60% to 75%, on a fully diluted basis.
Should Gold One not achieve its forecast production target of 120,000
ounces of gold in its financial year ending 31 December 2011 (which it
expects it will achieve), other than by reason of matters outside of its
control, BidCo will be entitled to be issued with a number of Adjustment
Subscription Shares, which number will be calculated in accordance with
Schedule 5 to the TIA (refer to Annexure B), up to a maximum of
492,002,621 shares. No additional consideration will be payable in
respect of the issue of Adjustment Subscription Shares (if any).
BidCo does not intend to make an offer for the Gold One options or
convertible bonds. However, option holders and bond holders have the
ability to convert their Gold One securities to ordinary Gold One shares
and participate in the Offer.
The Offer
The Consortium intends to make the Offer through BidCo to Gold One
shareholders on or about 22 June 2011, subject to the fulfilment or
waiver, as the case may be, of certain conditions precedent as set out
in Annexure A.
In terms of its arrangements, BidCo confirms that:
- the Consortium is in the process of securing ownership and control
of 17.7% of the issued shares in Gold One;
- no person or entity is acting in concert with the Consortium and/or
BidCo in respect of the Transaction; and
- the Consortium/BidCo does not hold any option to purchase shares in
Gold One.
Subject to the fulfilment or waiver, as the case may be, of the
conditions precedent detailed in Annexure A, and following the AGC
Acquisition, the Initial Subscription, the Additional Subscription (if
required), and the Offer, it is expected that BidCo will acquire up to a
maximum of 75% of Gold One on a fully diluted basis resulting in a
change of control of Gold One.
5. Funding and Guarantee by Baiyin
The Consortium intends to fund BidCo with regard to the Offer, the
Initial Subscription and to the extent required, the Additional
Subscription by way of a cash consideration. The obligations of BidCo
have been guaranteed by Baiyin.
6. Other Terms
A summary of various conditions to the Transaction is set out in
Annexure A.
The conditions precedent to the Initial Subscription and Additional
Subscription are set out in clause 3 of the TIA and the defeating
conditions to the Offer are set out in paragraph 5 of Schedule 3 to the
TIA (refer to Annexure B). The conditions precedent to the Adjustment
Subscription are set out in clause 5 of the TIA.
The Parties have also agreed to certain arrangements. A summary of the
arrangements is set out in Annexure A, and set out in full in sections
10, 11, 16, 19 and 22 of the TIA (refer to Annexure B).
7. Indicative Timetable
2011
Wednesday, 22 June BidCo lodges Bidder`s Statement with ASIC and ASX
and serves it on Gold One
Wednesday, 22 June Gold One lodges its Target Statement with ASIC and
ASX and serves it on BidCo
Wednesday, 22 June BidCo despatches Bidder`s Statement to Gold One
Shareholders
Wednesday, 22 June Gold One despatches its Target Statement together
with a circular in respect of the Transaction and
the potential Adjustment Subscription, containing a
notice of meeting, to Gold One shareholders
Wednesday, 22 June Offer opens
Friday, 22 July Gold One shareholders meeting
Wednesday, 21 Close of Offer (unless extended)
September
The above dates are indicative only and are subject to change.
8. Other Details
Gold One`s transaction advisers are Macquarie Capital Advisers Limited
and Hartleys Limited. Gold One`s Australian legal counsel is Blake
Dawson and its South African legal counsel is Edward Nathan Sonnenbergs.
The Consortium`s corporate adviser is Rand Merchant Bank, a division of
FirstRand Bank Limited. Its Australian legal adviser is Mallesons
Stephen Jaques and its South African legal counsel is Edward Nathan
Sonnenbergs.
* Average exchange rate of ZAR7.42390:A$1
ENDS
Parktown, Johannesburg
16 May 2011
Sponsor
Macquarie First South Advisers (Pty) Limited
Issued by Gold One International Limited
www.gold1.co.za
For further information please contact:
On behalf of Gold One:
Neal Froneman
President and CEO
+27 11 726 1047 (office) +27
83 628 0226 (mobile)
neal.froneman@gold1.co.za
Mark Wheatley
Chairman
+61 2 9963 6400 (office)
+61 417 688 539 (mobile)
mark.wheatley@gold1.com.au
Ilja Graulich
Investor Relations
+27 11 726 1047 (office)
+27 83 604 0820 (mobile)
ilja.graulich@gold1.co.za
Carol Smith
Investor Relations
+27 11 726 1047 (office)
+27 82 338 2228 (mobile)
carol.smith@gold1.co.za
Derek Besier
Farrington National Sydney
+61 2 9332 4448 (office)
+61 421 768 224 (mobile)
derek.besier@farrington.com.au
Sean Chilvers
Macquarie First South Advisers
+27 11 583 2283 (office)
+27 83 280 4101 (mobile)
sean.chilvers@macquarie.com
Grey Egerton-Warburton
Hartleys
+61 8 9268 2851 (office)
+61 417 355 165 (mobile)
grey_warburton@hartleys.com.au
On behalf of the Consortium:
Clement Kwong
Long March Capital
+86 108 515 1966 (office)
+86 1860 218 9000 (mobile)
clement@longmarchcapital.com
Craig Forbes
Rand Merchant Bank
+27 11 282 1156 (office)
+27 72 237 2001 (mobile)
craig.forbes@rmb.co.za
About Gold One
Gold One is a gold producer listed on the financial markets operated by the
ASX Limited and the JSE Limited, issuer code GDO. Its flagship operation is
the newly built shallow Modder East mine on the East Rand, some 30 kilometres
from Johannesburg.
Modder East is the first new mine to be built in the region in 28 years and
distinguishes itself from most of the other gold mines in South Africa owing
to its shallow nature (300 metres to 500 metres below surface). To date
Modder East has provided direct employment opportunities for over 1,100
people. Gold One also owns the nearby existing Sub Nigel mine, which is used
primarily as a training centre in the build-up of Modder East to full
production. Gold One`s other projects and targets include Ventersburg in the
Free State Goldfields, the Tulo concession in Mozambique and the Etendeka
greenfield project in Namibia. Gold One has an issued share capital of
807,664,732 shares.
About the Consortium
The Consortium currently comprises Baiyin (60%), the CADF (30%) and Long
March (10%), acting through BidCo, which is incorporated in the British
Virgin Islands. The government of the People`s Republic of China ("PRC") is
the beneficial owner of Baiyin and the CADF. One or more of Baiyin`s
shareholders, which includes CITIC Guoan Industry Information Co. Ltd ("CITIC
Guoan"), may ultimately take an indirect interest, through an investment
holding vehicle, in BidCo of up to 20%.
Baiyin was founded in 1954 and is a large scale mining and smelting group
based in the Gansu Province, which is in West China. It is one of China`s
earliest large-scale state owned copper-sulphur production and mining
enterprises and was restructured in November 2008. The company is currently
owned by the Gansu Province government (47%) and CITIC Group (41%.1 via CITIC
Guoan and 3.7% directly).
CADF is a wholly owned subsidiary of the China Development Bank Corporation
("CDB"). The CDB is a majority state-owned bank dedicated to strengthening
the competitiveness of the PRC and improving the living standards of its
people. The CDB`s major shareholders are:
- the PRC Ministry of Finance - 51.3%
- Central Huijin Investment Limited -48.7%.
CADF is the first equity fund in China to focus specifically on direct
investments from China to Africa and has a target size of US$5 billion.
Since its inception, CADF has made investments in a variety of sectors in
over 20 African countries.
Long March is an investment management and advisory firm incorporated in the
British Virgin Islands and focussed on the investment and management of
Chinese capital in foreign resources companies and properties. It is jointly
owned by Messrs Alex Yao and Clement Kwong.
The principals of Long March have over 60 years of combined private equity
investment and merger and acquisition advisory experience, and have
collectively managed capital investments of over US$ 1 billion, and advisory
assignments involving more than US$ 5 billion in aggregate. Long March has
strong relationships in the Chinese mining and consumer sectors, among state
financial institutions and leading state-owned enterprises, and in the Hong
Kong capital markets.
Forward-Looking Statement
This release includes certain forward-looking statements and forward-looking
information. All statements other than statements of historical fact included
in this release including, without limitation, statements regarding future
plans and objectives of Gold One International Limited are forward-looking
statements (or forward-looking information) that involve various risks,
assumptions and uncertainties. There can be no assurance that such statements
will prove to be accurate and actual values, results and future events could
differ materially from those anticipated in such statements. Important
factors could cause actual results to differ materially from Gold One`s
expectations. Such factors include, among others: the actual results of
exploration activities; actual results of reclamation activities; the
estimation or realisation of mineral reserves and resources; the timing and
amount of estimated future production; costs of production; capital
expenditures; costs and timing of the development of Modder East and new
deposits; availability of capital required to place Gold One`s properties
into production; the ability to obtain or maintain a listing in South Africa,
Australia, Europe or North America; conclusions of economic evaluations;
changes in project parameters as plans continue to be refined; future prices
of gold and other commodities; possible variations in ore grade or recovery
rates; failure of plant, equipment or processes to operate as anticipated;
accidents; labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals, permits or financing or in the completion
of development or construction activities, economic and financial market
conditions; political risks; Gold One`s hedging practices; currency
fluctuations; title disputes or claims limitations on insurance coverage.
Although Gold One has attempted to identify important factors that could
cause actual results to differ materially, there may be other factors that
cause results not to be as anticipated, estimated or intended. Any forward-
looking statements in this release speak only at the time of issue. There can
be no assurance that such statements will prove to be accurate as actual
values, results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not place undue
reliance on forward-looking statements. Gold One does not undertake to update
any forward-looking statements that are included herein, or revise any
changes in events, conditions or circumstances on which any such statement is
based, except in accordance with applicable securities laws and stock
exchange listing requirements.
ANNEXURE A - SUMMARY OF CONDITIONS AND OTHER ARRANGEMENTS
The Transaction is subject to various conditions, including, inter alia, the
following:
- Gold One shareholder approval;
- applicable regulatory approvals including the approval of the Australian
Foreign Investment Review Board, the approval of the Namibian
Competition Commission, South African regulatory approvals including
Reserve Bank, Competition Authorities and Takeovers Regulation Panel
approval, and Chinese approvals including National Development and
Reform Commission, Ministry of Commerce and State Administration of
Foreign Exchange approval;
- an independent expert concluding that the Transaction is fair and
reasonable to Gold One shareholders;
- Gold One`s board does not, before the end of the takeover offer period,
withdraw the recommendations in this announcement;
- BidCo obtaining an aggregate interest in at least 60% of Gold One`s
issued share capital on a fully diluted basis through a combination of
acceptances under the Offer, the Initial Subscription and the Additional
Subscription (if needed);
- no material adverse change, effect, event, occurrence, state of fact or
development occurring from the date of this announcement until the end
of the Offer period;
- no prescribed occurrences during the takeover Offer period;3
- all required third party approvals are obtained;
- there is no action by a public authority adversely affecting the
Transaction;
- no rights are exercised by third parties under certain agreements or
instruments;
- there are no material acquisitions, disposals or new commitments by Gold
One (subject to certain exceptions);
- no third party acquires a relevant interest (as defined in the
Corporations Act 2001 (Cth)) in 20% or more of Gold One`s shares;
- Gold One or a subsidiary, or BidCo and Baiyin not becoming insolvent;
- from the date of this announcement until the end of the takeover offer
period a Target Warranty or (in relation to the subscription for shares)
Bidder Warranty, each as defined in the TIA, is not found to be
incorrect or misleading in a material respect;
- Gold One does not, from the date of this announcement until the end of
the offer period, announce or declare (or announce an intention to make
or declare) any distribution (subject to certain exceptions);
- Gold One does not agree to conclude a Target Project (as defined in the
TIA) which involves the issue of Gold One shares at a price lower than
the Offer Price (except in the case of Goliath Gold Mining Limited4) or
involves the aggregate consideration payable being more than 5% of the
market capitalisation of Gold One (except in the case of Goliath Gold
Mining Limited and, further to a waiver granted by BidCo, the proposed
acquisition of Rand Uranium (Pty) Limited);
- Gold One does not breach the TIA in any material respect; and
- Gold One and BidCo have a right to terminate the TIA in certain
circumstances.
Footnotes:
3. Prescribed occurrences include (without limitation) events such as
Gold One or any of its subsidiaries charging (or agreeing to charge) a
substantial part of its business or property; issuing (or agreeing to
issue) certain securities; or resolving to be (or a court ordering that
the company be) wound up or an administrator, receiver or liquidator
being appointed or the company entering into a deed of company
arrangement; or Gold One or a subsidiary entering into a material
contract. Paragraph 5(d) of Schedule 3 to the TIA provides further
information (refer to Annexure B).
4 As announced on 13 October 2010, Goliath Gold Mining Limited,
previously known as White Water Resources Limited ("Goliath Gold"), a
JSE listed and gold focused development company, will be created through
the reverse acquisition of Goliath Gold by Gold One Africa Limited, a
wholly-owned subsidiary of Gold One (refer to www.goliathgold.co.za).
The above list represents a summary of various conditions precedent to
the Initial Subscription, the Additional Subscription and the Adjustment
Subscription, and defeating conditions to the Offer, all which are set
out in the TIA (refer to Annexure B). The conditions precedent to the
Initial Subscription and the Additional Subscription are set out in
clause 3 of the TIA. The conditions precedent to the Adjustment
Subscription are set out in clause 5 of the TIA. The defeating
conditions to the Offer are set out in paragraph 5 of Schedule 3 to the
TIA.
The Parties have also agreed to the following arrangements:
- Gold One will not solicit any competing proposal nor will it
participate in any discussions or negotiations in relation to any
competing proposal which is not solicited by it, unless failure to
do so would involve a breach of the fiduciary duties of the
directors of Gold One;
- subject to its fiduciary duties, Gold One must disclose all
material details of a competing proposal to BidCo and allow BidCo a
right to match;
- will not, subject to certain exceptions, acquire securities or
solicit proxies from Gold One shareholders or otherwise seek to
influence or control the management or policies of Gold One;
- while it holds at least 50% of Gold One`s shares, BidCo has the
right but not the obligation to participate in any proposed offer
by Gold One of Gold One shares or equity securities that may be
convertible into Gold One shares ("Right to Participate"), subject
to certain exceptions. The Right to Participate is subject to the
completion of the Transaction, and regulatory approval;
- a "break fee" of A$5 million is payable by Gold One and BidCo in
certain circumstances; and
- there are a number of warranties and specific indemnities given by
Gold One in connection with the Transaction.
The arrangements are set out in sections 10, 11, 16, 19 and 22 of the
TIA (refer to Annexure B).
ANNEXURE B - TRANSACTION IMPLEMENTATION AGREEMENT
Transaction Implementation Agreement
Gold One International Limited
ABN 35 094 265 746
BCX Gold Investment Holdings Ltd
Co. No. 1615241
Baiyin Non-Ferrous Group Co. Ltd.
Registration No. 620400000000010
Blake Dawson
Level 32, Exchange Plaza
2 The Esplanade
Perth WA 6000
Australia
T 61 8 9366 8000
F 61 8 9366 8111
Reference
DRD AXP 09 2030 3158
CopyrightBlake Dawson 2011
Contents
1. INTERPRETATION 1
1.1 Definitions 1
1.2 Rules for interpreting this document 11
2. SUBSCRIPTION FOR SUBSCRIPTION SHARES
AND ADJUSTMENT SUBSCRIPTION SHARES 12
2.1 Issue and subscription of Subscription Shares 12
2.2 Issue and subscription of Adjustment Subscription Shares 12
2.3 Directors recommendation 12
3. SUBSCRIPTION CONDITIONS PRECEDENT 13
3.1 Subscription Conditions Precedent 13
3.2 Waiver of Subscription Conditions Precedent 13
3.3 Obligations to satisfy Subscription Conditions Precedent 14
4. SUBSCRIPTION COMPLETION 14
4.1 Time and place for Subscription Completion 14
4.2 Number of Additional Subscription Shares 14
4.3 Bidder`s obligations at Subscription Completion 16
4.4 Target`s obligations at Subscription Completion 16
4.5 Target`s obligations following Subscription Completion 16
5. ADJUSTMENT SUBSCRIPTION CONDITIONS PRECEDENT 16
5.1 Adjustment Subscription Conditions Precedent 16
5.2 Waiver of Adjustment Subscription Conditions Precedent 17
6. ADJUSTMENT SUBSCRIPTION COMPLETION 17
6.1 Time and place for Adjustment Subscription Completion 17
6.2 Bidder`s obligations at Adjustment Subscription Completion 17
6.3 Target`s obligations at Adjustment Subscription Completion 17
6.4 Target`s obligations following Adjustment Subscription Completion
17
7. FUNDING 18
7.1 Bidder compliance with TRP requirements 18
7.2 Target use of funds 18
7.3 Alternative funding arrangements 18
8. THE BID 18
8.1 Bidder agrees to make Bid 18
8.2 Target recommendation 18
9. FACILITATING THE BID 19
9.1 Reasonable access 19
9.2 Access to people and information 19
9.3 Confidentiality Agreement binds both parties 20
9.6 Offer documents 21
9.7 Early dispatch of Offer 21
9.8 Conditions 22
10. EXCLUSIVITY 23
10.1 Clause does not apply to Target Projects 23
10.2 Cease all existing discussions 23
10.3 No solicitation 23
10.4 No talk 23
10.5 No due diligence 23
10.6 Notice of unsolicited approach 24
10.7 Right to match 24
10.8 Fiduciary exception 24
10.9 Standstill 25
10.10 Exception to Standstill 25
11. UNDERTAKINGS TO PAY COMPENSATING AMOUNTS 26
11.1 Acknowledgments 26
11.2 Target`s Undertaking 26
11.3 Bidder`s Undertaking 28
11.4 Compensating Amount 29
11.5 Demand for payment 29
11.6 Repayment 29
11.7 Trigger Disputes 29
11.8 Set Off 29
11.9 Compliance with law 30
11.10 Other claims 30
12. TAKEOVER OFFER - VARIATION AND WAIVER 31
12.1 Variation 31
12.2 Waiver of conditions and extension 31
13. TIMETABLE AND JOINT DISPATCH 31
14. PUBLIC ANNOUNCEMENTS 31
14.1 Initial Announcement 31
14.2 Consultation 31
15. CURRENT OR PROPOSED TRANSACTIONS 32
15.1 Target Projects 32
16. RIGHT OF FIRST REFUSAL 32
16.1 Right to participate 32
16.2 Terms of Proposed Equity Offer 33
16.3 Number of Equity Securities 33
16.4 Approvals required 33
16.5 Lapse of offer 33
16.6 Limitations on the effect of this clause 33
17. TRANSITIONAL STEPS AND BIDDER`S INTENTIONS 34
17.1 Target Executive Team 34
17.2 Principles of Target Board representation 34
17.3 Technical and Development Sub-Committee 35
18. BIDDER NOMINATION RIGHTS 35
18.1 Application 35
18.2 Right to nominate Target directors 35
18.3 Replacement of Nominee Director 35
18.4 Precondition to appointment 36
18.5 Restriction on nomination right 36
18.6 Appointment by Target Board in interim 36
18.7 Initial constitution of Target Board 36
18.8 Boards of other Target Group companies 37
18.9 Target committees 37
18.10 Nominee Directors will not deliberate on certain matters 37
19. WARRANTIES AND INDEMNITIES 38
19.1 General Warranties 38
19.2 Target Warranties 38
19.3 Bidder Warranties 41
19.4 Reliance on Warranties 41
19.5 Target Indemnities 41
20. LIMITATIONS OF TARGET WARRANTIES AND TARGET INDEMNITIES 42
20.1 Disclosures 42
20.2 Limitations 42
20.3 No liability if loss is otherwise compensated for 43
20.4 No claims for consequential loss 43
20.5 Time limit on claim 43
20.6 Minimum amount of Claim 43
20.7 Maximum amount of Claim 44
21. GUARANTEE BY BIDDER GUARANTOR 44
21.1 Definitions in guarantee 44
21.2 Obligations guaranteed 44
21.3 Consequences of Bidder default 44
21.4 Provisions applying to this guarantee 45
21.5 Warranties of Bidder Guarantor 45
21.6 Indemnity 45
21.7 Application of the indemnity 45
21.8 Expiry of Guarantee 46
22. TERMINATION 46
22.1 Termination for material breach 46
22.2 Termination for non-satisfaction of Subscription Conditions Precedent
46
22.3 Other termination rights 46
22.4 Effect of termination 47
23. NOTICES 47
24. AMENDMENT AND ASSIGNMENT 48
24.1 Amendment 48
24.2 Assignment 48
25. GENERAL 48
25.1 Application 48
25.2 Model Law applies 49
25.3 Continuance of performance 49
25.4 Governing law 49
25.5 Serving documents 49
25.6 Liability for expenses 49
25.7 Operation of this document 50
25.8 GST on claims 50
25.9 Counterparts 50
Schedule
1 DETAILS OF CONSORTIUM OF INVESTORS 51
2 APPLICATION FOR SUBSCRIPTION SHARES / ADJUSTMENT SUBSCRIPTION SHARES
53
3 AGREED BID TERMS 54
4 TIMETABLE 63
5 CALCULATION OF NUMBER OF ADJUSTMENT SUBSCRIPTION SHARES 64
6 TARGET GROUP 71
7 TARGET EXECUTIVE TEAM 73
8 PROVISIONS APPLYING TO GUARANTEE BY BIDDER GUARANTOR 84
9 TARGET INDEMNITY EVENTS 89
Transaction Implementation Agreement
DATE 13 May 2011
PARTIES
Gold One International Limited
ABN 35 094 265 746 (Target)
BCX Gold Investment Holdings Ltd
Co. No. 1615241 (Bidder)
Baiyin Non-Ferrous Group Co. Ltd.
Registration No. 620400000000010 (Bidder Guarantor)
BACKGROUND
A. Bidder is a special purpose vehicle incorporated for the purposes of the
Consortium undertaking the Transaction.
B. Target is executing this document at the request of Bidder Guarantor and
the Consortium. Accordingly, Bidder Guarantor has agreed to guarantee the
obligations of Bidder under this document.
C. The Consortium wishes to acquire control of Target, through Bidder, and
Target wishes to raise funds to enable it to pursue acquisition opportunities
and fund capital expenditures.
D. To achieve the objectives referred to above:
(1) Bidder is proposing to make the Bid; and
(2) Target has agreed to issue the Subscription Shares and Adjustment
Subscription Shares to Bidder on the terms of this document.
E. The Offer and the Subscription are inter-dependent. Target will not
issue the Subscription Shares unless the Offer has closed having first become
unconditional.
OPERATIVE PROVISIONS
1. INTERPRETATION
1.1 Definitions
The following definitions apply in this document.
Additional Subscription Shares means the number of Target Shares referred to
in clause 4.2 (if any).
Adjustment Subscription means the subscription for, and issue of, the
Adjustment Subscription Shares under the terms of this document.
Adjustment Subscription Completion means completion of the Adjustment
Subscription in accordance with clause 6.
Adjustment Subscription Completion Date means the latest of the following:
(a) five Business Days after satisfaction of the Adjustment Subscription
Conditions Precedent; and
(b) any other date agreed between the parties in writing,
but in any event must occur:
(c) at least one month after the publication and announcement of Target`s
annual financial results for the year ended 31 December 2011; and
(d) two Business Days after the date on which the number of Adjustment
Subscription Shares is determined in accordance with the terms set out in
Schedule 5.
Adjustment Subscription Conditions Precedent means the conditions precedent
to the obligations of the parties in respect of the Adjustment
Subscription arising, which are set out in clause 5.1 and Adjustment
Subscription Condition Precedent means any one of them.
Adjustment Subscription Shares means the number of Target Shares determined
in accordance with Schedule 5 (if any).
Agreed Bid Terms means the terms set out in Schedule 3.
Announcement Date means the date the Transaction is publicly announced by
both parties under clause 14.1.
Appointed Expert means, for the purpose of clause 11.7:
(a) a person agreed between Bidder and Target, being a Senior Counsel of the
Australian bar for a period of not less than five years and with experience
in transactions of the nature contemplated by this document; or
(b) failing agreement between Bidder and Target under paragraph (a) above
within two Business Days of a party seeking that agreement, a person
appointed by the President of the Law Society of Western Australia.
Approval means a licence, permit, authority, consent, approval, order,
exemption, waiver, ruling or decision.
ASIC means the Australian Securities and Investments Commission.
ASX means ASX Limited (ABN 98 008 624 691) or, as the context requires, the
financial market conducted by it.
Associated Persons means:
(a) each related body corporate of the relevant party;
(b) each relevant party`s directors, officers, employees, consultants,
advisers and agents; and
(c) each related body corporate of a relevant party`s directors, officers,
employees, consultants, advisers and agents.
Base Subscription Shares means 375,000,000 Target Shares issued in the
following tranches:
(a) Tranche 1, being the number of Base Subscription Shares issued at the
relevant Subscription Price, totalling in aggregate a subscription amount of
US$30,000,000; and
(b) Tranche 2, being the balance of the Base Subscription Shares issued at
the relevant Subscription Price.
Bid means a takeover bid under Chapters 6 to 6C of the Corporations Act under
which Bidder offers to acquire all Target Shares on terms no less favourable
than the Agreed Bid Terms.
Bidder means BCX Gold Investment Holdings Ltd Co. No. 1615241, a company
registered under the laws of the British Virgin Islands.
Bidder Guarantor means Baiyin Non-Ferrous Group Co Ltd, a company registered
under the laws of the People`s Republic of China under Registration No.
620400000000010.
Bidder`s Undertaking means the undertaking set out in clause 11.3.
Bidder Warranty means a Warranty set out in clause 19.1 to the extent it
relates to Bidder and a Warranty set out in clause 19.3.
Business Day means a day (other than Saturday, Sunday or public holiday) on
which banks are open for general banking business in all of Perth, Australia,
Johannesburg, South Africa and the Hong Kong Special Administrative Region
and the People`s Republic of China.
Claim includes any allegation, debt, cause of action, Liability, claim,
proceeding, suit or demand of any nature howsoever arising and whether
present or future, fixed or unascertained, actual or contingent, whether at
law, in equity, under statute or otherwise.
Cleansing Notice means a notice in relation to the Subscription Shares and
Adjustment Subscription Shares given by Target in accordance with section
708A(5) of the Corporations Act.
Compensating Amount means the amount referred to in clause 11.4.
Competition Authorities Approval means the Approval required to be obtained
from the South African Competition Authorities in connection with the
Transaction and the potential Adjustment Subscription.
Competing Proposal means any proposal or offer (including a scheme of
arrangement, takeover bid, reverse takeover, capital reduction, share buy-
back, amalgamation, restructuring, sale of assets, sale of shares or joint
venture or other synthetic merger or any other transaction or arrangement)
that would if completed substantially in accordance with its terms, result in
any person or persons other than Bidder acquiring, or agreeing to acquire,
directly or indirectly:
(a) an interest (including an economic interest) in all or a material part
of the assets or business of Target or its related bodies corporate; or
(b) an interest (whether legal, beneficial or synthetic) or a relevant
interest in more than 20% of the voting shares of Target,
but, for the avoidance of doubt, does not include any proposal or offer
contemplated by, or in connection with, a Target Project undertaken in
accordance with clause 15.1.
Completion of the Transaction means the Subscription Completion and the
implementation of the Bid and occurs at the latest of the following:
(a) the Subscription Shares being transferred to Bidder pursuant to
Subscription Completion; or
(b) Target Shares being transferred to Bidder pursuant to the Bid.
Condition means a condition to the Bid.
Condition Period means the period beginning on the Announcement Date and
ending at the end of the Offer Period.
Confidentiality Agreement means the Confidentiality Agreement dated 18
November 2010 between Target and Baiyin Non-Ferrous Group Co. Ltd.
(Registration No. 620400000000010(1-1)) as amended by the Addendum No.1 to
the Confidentiality Agreement dated 18 March 2011 and as otherwise amended
from time to time.
Consortium means the consortium of investors associated with Bidder, the
members and respective shareholders of which, as at the date of this
document, are set out in Schedule 1.
Corporations Act means the Corporations Act 2001 (Cth) as modified by any
relevant exemption or declaration by ASIC.
Disclosure Letter means the disclosure letter provided by Target to Bidder on
or before execution of this document about the Target Warranties.
Disclosure Material means:
(a) the Disclosure Letter; and
(b) the information and material contained in the document file provided by
Target to Bidder with the Disclosure Letter and initialled by Bidder and
Target.
End Date means the date which is the latest of the following:
(a) 31 December 2011; and
(b) any other date agreed between the parties in writing.
Equity Securities has the same meaning as in the Listing Rules.
FATA means the Foreign Acquisitions and Takeovers Act 1975 (Cth).
Goliath Gold means Goliath Gold Mining Limited, a company incorporated in
South Africa.
Goliath Transaction means the transaction between Target and Goliath Gold
publicly announced by Target on 12 November 2010.
Government Agency means any government, governmental, semi-governmental,
administrative, fiscal or judicial body, department, commission, authority,
tribunal, agency or entity, whether in Australia or otherwise and
specifically includes, without limitation, JSE and ASX.
Independent Expert means the independent expert to be appointed by Target.
Independent Expert`s Report means the report prepared by the Independent
Expert.
Initial Announcement has the meaning set out in clause 14.1.
Initial Recommendation means the recommendation of Target Board regarding the
Transaction and the potential Adjustment Subscription in the form set out in
the Initial Announcement.
Insolvency Event means, for a person, any of the following events:
(a) being in liquidation or provisional liquidation or under administration;
(b) having a controller (as defined in the Corporations Act) or analogous
person appointed to it or any of its property;
(c) being taken under section 459F(1) of the Corporations Act to have failed
to comply with a statutory demand;
(d) being unable to pay its debts or otherwise insolvent;
(e) taking any step that could result in the person becoming an insolvent
under administration (as defined in section 9 of the Corporations Act);
(f) entering into a compromise or arrangement with, or assignment for the
benefit of, any of its members or creditors;
(g) a provisional or final judicial manager under Chapter XV of the South
African Companies Act, 1973 or a business rescue practitioner under Chapter 6
of the South African Companies Act, 2008 is appointed to it; or
(h) any analogous event under the Laws of any applicable jurisdiction.
JSE means JSE Limited, registration number 2005/022939/06, a company
incorporated in South Africa or, as the context requires, the financial
market conducted by it.
JSE Listings Requirements means the listings requirements of JSE, and any
other requirements which are applicable while Target is admitted to the list
of JSE, where the JSE determines such requirements must be complied with in
addition to the Listing Rules.
Law means all statutes, regulations, statutory rules, orders, and terms and
conditions of any grant of approval, permission, authority or license of any
Public Authority.
Lead Independent Director means the Lead Independent Director as contemplated
in the JSE Listings Requirements and the King Code of Corporate Governance in
South Africa (King III).
Liability means any liability or obligation (whether actual, contingent or
prospective), including for any Loss irrespective of when the acts, events or
things giving rise to the liability occurred.
Listing Rules means the listing rules of ASX.
Loss means all damage, loss, cost, Claim, Liability or expense (including
legal costs and expenses of whatsoever nature or description).
Material Adverse Change has the meaning given to it in paragraph 5(k) of
Schedule 3.
Material Contract means a contract for the provision of goods or services to
or by a member of Target Group, the termination of which is reasonably likely
to have a material adverse impact on the operation or reputation of Target
Group as a whole or an adverse impact on the profitability of Target Group as
a whole exceeding A$500,000 in any financial year of Target.
Modder East Stoppage Event means the Target Indemnity Event set out in
paragraph 2(n) of Schedule 9.
Notice of Meeting means the notice of meeting to be sent to Target
Shareholders for the purpose of convening the Target Shareholders` Meeting.
Offer means each offer to acquire Target Shares to be made by Bidder to
Target Shareholders in connection with the Bid.
Offer Price means the offer price set out in paragraph 1 of the Agreed Bid
Terms.
Offer Period means the period during which Offer is open for acceptance.
Participation Exception means:
(a) an issue of Target Shares as a result of the exercise of Target Options
or the conversion of the Target Convertible Bonds;
(b) any issue of Target Shares prior to Completion of the Transaction that
is contemplated by a Target Project undertaken in accordance with clause
15.1;
(c) an issue of Target Shares or other Equity Securities subsequent to
Completion of the Transaction to employees, officers, consultants or
directors of Target pursuant to a compensation or incentive scheme
established and disclosed to ASX prior to the date of this document;
(d) an issue of Target Shares or other Equity Securities subsequent to
Completion of the Transaction to directors or other officers of Target
approved by Target`s shareholders at any time or times; or
(e) an issue of Shares under a dividend reinvestment plan or bonus share
plan of Target which does not exclude participation by Bidder.
Prescribed Event means an event referred to in paragraph 5(d) of Schedule 3.
PRC Approvals means the Approvals required to be obtained from the following
People`s Republic of China entities:
(a) the National Development and Reform Commission;
(b) the Ministry of Commerce; and
(c) the State Administration of Foreign Exchange.
Project Maverick means the proposed acquisition by Target for all of the
shares of Rand Uranium (Proprietary) Limited, publicly announced by Target to
ASX on 28 April 2011.
Properties means all of the material prospecting and mining rights, land and
buildings owned, occupied and otherwise used by Target Group.
Pro Rata Offer means an offer made to all holders of Target Shares on a pro
rata basis.
Public Authority means any government or any governmental, semi-governmental,
administrative, statutory or judicial entity, authority or agency, whether in
Australia or elsewhere, including the following entities:
(a) South African entities:
(i) South African Reserve Bank;
(ii) South African Competition Authorities;
(iii) TRP;
(b) People`s Republic of China entities:
(i) National Development and Reform Commission;
(ii) Ministry of Commerce;
(iii) State Administration of Foreign Exchange;
(c) Namibian Competition Commission; and
(d) any self-regulatory organisation established under statute or any stock
exchange, including ASX and JSE,
but excludes the Takeovers Panel, ASIC and any court that hears or determines
proceedings under section 657G or proceedings commenced by a person specified
in section 659B(1) of the Corporations Act in relation to the Bid except if
the determination or decision materially increases the costs of the
Transaction to Bidder or affects the viability of the Transaction and the
potential Adjustment Subscription.
Register means the share register of Target (including any register of
Target Options and Target Convertible Bonds) and Registry has a corresponding
meaning.
Related Party has the same meaning as it would have in section 9 of the
Corporations Act if all references in section 9 to "public company" were to
"public company" or "proprietary company".
Standstill Period means the period starting from the date of this document
and ending on the earlier of:
(a) six months from the date of this document; and
(b) the date the Target Shares are transferred to Bidder pursuant to the
Bid.
Subscription means the subscription for, and issue of, the Subscription
Shares under the terms of this document.
Subscription Completion means completion of the Subscription in accordance
with clause 4.
Subscription Completion Date means the latest of the following:
(a) five Business Days after satisfaction (or waiver under clause 3.2) of
the Subscription Conditions Precedent; and
(b) any other date agreed between the parties in writing,
but in any event must occur at least two Business Days after the end of the
Offer Period.
Subscription Conditions Precedent means the conditions precedent to the
obligations of the parties in respect of the Subscription arising, which are
set out in clause 3.1 and Subscription Condition Precedent means any one of
them.
Subscription Price means:
(a) for each Base Subscription Share:
(i) issued under Tranche 1, A$0.40;
(ii) issued under Tranche 2, A$0.40; and
(b) for each Additional Subscription Share, A$0.53.
Subscription Shares means the Base Subscription Shares and, if any, the
Additional Subscription Shares.
Superior Proposal means a bona fide Competing Proposal which Target Board has
determined in good faith after consultation with their external legal and
financial advisers, is:
(a) reasonably capable of being valued and completed, taking into account
all aspects of the Competing Proposal or the proposal and the person making
it; and
(b) more favourable to Target Shareholders (as a whole) than the
Transaction, taking into account all the terms and conditions of the
Competing Proposal.
Target means Gold One International Limited ABN 35 094 265 746, incorporated
in Australia and registered in South Africa as an external company under
Registration No. 2009/000032/10.
Target`s Annual General Meeting means the annual general meeting of Target
Shareholders to be held on 19 May 2011 (and any adjournment of that meeting).
Target Board means the board of directors of Target.
Target Convertible Bond means a bond which may be convertible into Target
Shares under its terms, which is on issue as at the date of this document.
Target Group means Target and its subsidiaries as at the date of this
document and as set out in Schedule 6.
Target Executive Team has the meaning set out in Schedule 7.
Target Indemnities means the indemnities set out in clause 19.5 and
Target Indemnity means any one of them.
Target Indemnity Events means the events set out in Schedule 9.
Target Option means an option to subscribe for a Target Share, which is on
issue as at the date of this document.
Target Projects means the following transactions:
(a) Goliath Transaction;
(b) Project Maverick;
(c) the transaction referred to as Project Solar, the nature of which has
been disclosed by Target to Bidder before the date of this document; and
(d) the transaction referred to as Project Jester, the nature of which has
been disclosed by Target to Bidder before the date of this document,
and any other transactions to be implemented by Target that are agreed
between the parties (both parties acting reasonably and in good faith) to be
value accretive to Target and in line with Target`s asset expansion strategy.
Target Share means a fully paid ordinary share in the capital of Target.
Target Shareholder means a holder of a Target Share.
Target Shareholders` Meeting means the general meeting of Target Shareholders
to be convened to consider the Target Shareholders` Resolution.
Target Shareholders` Resolution means the resolution or resolutions to be
considered by Target Shareholders at the Target Shareholders` Meeting to
approve the Subscription and the Adjustment Subscription for all purposes,
including for the purpose of section 611, item 7 of the Corporations Act
(which the parties acknowledge is an exception to the requirement under
Listing Rule 7.1), and Listing Rule 10.11 (if required), and in accordance
with rule 22.1 of Target`s constitution.
Target Undertaking means the undertaking set out in clause 11.2.
Target Warranty means a Warranty set out in clause 19.1 to the extent it
relates to Target and a Warranty set out in clause 19.2.
Timetable means the timetable set out in Schedule 4.
Transaction means the Subscription and the Bid.
Transition Period means the period of 12 months from Completion of the
Transaction.
Trigger Dispute means any dispute between the parties as to whether an event
in clause 11 has occurred.
TRP means the South African Takeovers Regulation Panel, being from 1 May 2011
the successor of the South African Securities Regulation Panel.
Unacceptable Circumstances has the meaning given in section 657A of the
Corporations Act.
Voting Power has the meaning given in section 610 of the Corporations Act.
Warranties means Bidder Warranties and Target Warranties, or either one of
them as the context requires.
1.2 Rules for interpreting this document
Headings are for convenience only, and do not affect interpretation. The
following rules also apply in interpreting this document, except where the
context makes it clear that a rule is not intended to apply.
(a) Words and phrases which are defined by the Corporations Act have the
same meaning in this document. If a special meaning is given for the
purposes of Chapter 6 or 6A or a provision of Chapter 6 or 6A of the
Corporations Act the word or phrase has that meaning.
(b) A reference to:
(i) a legislative provision or legislation (including subordinate
legislation) is to that provision or legislation as amended, re enacted
or replaced, and includes any subordinate legislation issued under it;
(ii) a document (including this document) or agreement, or a provision of a
document (including this document) or agreement, is to that document,
agreement or provision as amended, supplemented, replaced or novated;
(iii) a party to this document or to any other document or agreement
includes a successor in title, permitted substitute or a permitted
assign of that party;
(iv) a person includes any type of entity or body of persons, whether or not
it is incorporated or has a separate legal identity, and any executor,
administrator or successor in law of the person;
(v) Australian dollars or A$ is a reference to the lawful currency of
Australia; and
(vi) anything (including a right, obligation or concept) includes each part
of it.
(c) A singular word includes the plural, and vice versa.
(d) A word which suggests one gender includes the other genders.
(e) If a word or phrase is defined, any other grammatical form of that word
or phrase has a corresponding meaning.
(f) If an example is given of anything (including a right, obligation or
concept), such as by saying it includes something else, the example does
not limit the scope of that thing.
(g) The expression this document includes the agreement recorded in this
document.
2. SUBSCRIPTION FOR SUBSCRIPTION SHARES AND ADJUSTMENT SUBSCRIPTION SHARES
2.1 Issue and subscription of Subscription Shares
Subject to clause 3.1, Bidder agrees to:
(a) subscribe for the Subscription Shares; and
(b) pay the Subscription Price for the Subscription Shares,
and Target agrees to issue the Subscription Shares to Bidder, on the terms of
this document.
2.2 Issue and subscription of Adjustment Subscription Shares
Subject to clause 5.1, Bidder agrees to subscribe for the Adjustment
Subscription Shares and Target agrees to issue the Adjustment Subscription
Shares to Bidder, on the terms of this document.
2.3 Directors recommendation
Target agrees to include in:
(a) the Notice of Meeting; and
(b) any public announcement regarding the Transaction,
a statement to the effect that Target Board recommends voting in favour of
the Target Shareholders` Resolution, subject to the Independent Expert
concluding that the Transaction and the potential Adjustment Subscription is
fair and reasonable to Target Shareholders and in the absence of a Superior
Proposal.
3. SUBSCRIPTION CONDITIONS PRECEDENT
3.1 Subscription Conditions Precedent
The respective obligations of the parties set out in clauses 2.1 and 2.2 do
not arise until:
(a) (Target Shareholder approval) the Target Shareholders` Resolution is
approved by the requisite majority of Target Shareholders;
(b) (Independent Expert`s conclusion) Independent Expert concludes in the
Independent Expert`s Report that the Transaction is fair and reasonable
to Target Shareholders and maintains that conclusion until the end of
the Offer Period;
(c) (Bid is unconditional) Bidder gives a notice under section 630(3) of the
Corporations Act stating that the Offer is free of all Conditions;
(d) (Bidder receives Target Shares the subject of acceptances under the
Offer) the Offer Period has ended and Bidder has paid the Bid
consideration to the accepting Target Shareholders in respect of the
relevant Target Shares;
(e) (satisfaction or waiver of all Bid Conditions) all of the Conditions set
out in paragraph 5 of Schedule 3 are satisfied or waived;
(f) (no breach of Target Warranty) during the Condition Period, a Target
Warranty is not found to be misleading, or otherwise not correct, in a
material respect;
(g) (no Bidder Insolvency Event) during the Condition Period, Bidder or
Bidder Guarantor does not become subject to an Insolvency Event; and
(h) (no breach of Bidder Warranty) during the Condition Period, a Bidder
Warranty is not found to be misleading, or otherwise not correct, in a
material respect.
3.2 Waiver of Subscription Conditions Precedent
(a) Bidder and Target acknowledge that the Subscription Conditions Precedent
set out in clause 3.1(a) cannot be waived.
(b) The Subscription Conditions Precedent referred to in clause 3.1(d) may
only be waived by both Bidder and Target in writing.
(c) The Subscription Conditions Precedent referred to in clauses 3.1(b),
3.1(c), 3.1(g) and 3.1(h) may only be waived by Target in writing.
(d) The Subscription Condition Precedent referred to in clauses 3.1(e) and
3.1(f) may only be waived by Bidder in writing, except, in the case of
clause 3.1(e), to the extent that Subscription Condition Precedent
relates to the Conditions set out in paragraphs 5(c) (foreign investment
approval) and 5(e) (regulatory approvals) of Schedule 3, or any other
Condition required to be satisfied by Law in order for Subscription
Completion and Adjustment Subscription Completion to occur.
3.3 Obligations to satisfy Subscription Conditions Precedent
(a) Both parties must use all reasonable endeavours to ensure that the
Subscription Conditions Precedent in clause 3.1 are satisfied on or
before the End Date.
(b) Both parties must keep each other informed of any circumstances of which
they are aware which may result in any Subscription Condition Precedent
not being satisfied in accordance with its terms.
4. SUBSCRIPTION COMPLETION
4.1 Time and place for Subscription Completion
Subscription Completion must take place at 4.00 pm (Johannesburg Time)
on the Subscription Completion Date at 45 Empire Road, Parktown,
Johannesburg, or such other time or places the parties may agree, save
that the issue of the Base Subscription Shares under Tranche 1 must
occur immediately before the issue of the Base Subscription Shares under
Tranche 2 and the Additional Subscription Shares.
4.2 Number of Additional Subscription Shares
On the date two Business Days prior to the Subscription Completion Date
(Calculation Date), Bidder must notify Target of the number of
Additional Subscription Shares, being a number between 0 and
188,679,245, determined as follows:
(a) if Bidder will have an aggregate interest in less than 60% (by number
and calculated in accordance with clause 4.2(b)) of the Target Shares on
issue at Subscription Completion if only the Base Subscription Shares
are issued, then that number of Additional Subscription Shares which, if
issued to Bidder on the Subscription Completion Date, would give Bidder
an aggregate interest of up to 60% (by number and calculated in
accordance with clause 4.2(b), but having regard also to the Additional
Subscription Shares which will be issued) of the Target Shares;
(b) for the purpose of determining the aggregate interest held by Bidder as
a percentage of the Target Shares on issue prior to the issue of any
Additional Subscription Shares under clause 4.2(a), the following are to
be taken into account:
(i) in calculating the aggregate interest held by Bidder, any combination of
the following:
(A) the relevant interests obtained by Bidder as a result of acceptances
under the Offer;
(B) the Base Subscription Shares to be issued to Bidder;
(C) any other Target Shares which either Bidder, Bidder Guarantor or any
related body corporate of either of them has purchased or agreed to
purchase on or before the Calculation Date; and
(D) assuming:
(I) all Target Options held by any of Bidder, Bidder Guarantor or any
related body corporate of either of them on the Calculation Date (if
any) were exercised;
(II) all Target Convertible Bonds held by any of Bidder, Bidder Guarantor or
any related body corporate of either of them on the Calculation Date (if
any) were converted to Target Shares (at the conversion rate that would
be applicable on the day after the Subscription Completion Date and as
calculated in accordance with clause 4.2(b)(ii)(C)) subject, in any
event, to a maximum of 361,606 Target Shares per Target Convertible
Bond; and
(ii) in calculating the total Target Shares on issue, assuming:
(A) the Base Subscription Shares are issued;
(B) all Target Options on issue as at the Calculation Date were exercised;
(C) all Target Convertible Bonds on issue as at the Calculation Date were
converted to Target Shares (at the conversion rate that would be
applicable on the day after the Subscription Completion Date) subject,
for the purpose of this calculation, to the conversion rate as at the
date of this document being adjusted as a result of only the following
events under the terms of the Target Convertible Bonds (Bond Terms):
(I) the issue of the Base Subscription Shares (in accordance with condition
6(b)(vi) of the Bond Terms); and
(II) a change of control (in accordance with condition 6(b)(x) of the Bond
Terms),
and which, in any event, such calculation is limited to a maximum of
361,606 Target Shares per Target Convertible Bond; and
(D) all Target Shares which, prior to the Calculation Date, have been agreed
to be issued in connection with any Target Project, are issued.
4.3 Bidder`s obligations at Subscription Completion
On the Subscription Completion Date, Bidder must:
(a) deliver to Target applications for Tranche 1 and Tranche 2 of the Base
Subscription Shares and the Additional Subscription Shares (if any),
duly completed and executed by Bidder, in the form set out in Schedule 2
or in any other form Target agrees to accept; and
(b) pay the Subscription Price to Target in immediately available funds by
way of bank transfer to the bank account nominated by Target, or in any
other form that Target may agree to accept as payment.
4.4 Target`s obligations at Subscription Completion
On the Subscription Completion Date, Target must:
(a) issue the Subscription Shares to Bidder; and
(b) register Bidder as the holder of the Subscription Shares.
4.5 Target`s obligations following Subscription Completion
Target must:
(a) apply to ASX and JSE and use its best endeavours to obtain official
quotation of the Subscription Shares by ASX and JSE with effect from the
Subscription Completion Date;
(b) issue a Cleansing Notice within five Business Days of the Subscription
Completion Date or, if a Cleansing Notice cannot be issued, issue a
prospectus in accordance with section 708A(11) of the Corporations Act
by no later than the Subscription Completion Date; and
(c) deliver to Bidder a holding statement showing Bidder as the holder of
the Subscription Shares as soon as practicable after Subscription
Completion.
5. ADJUSTMENT SUBSCRIPTION CONDITIONS PRECEDENT
5.1 Adjustment Subscription Conditions Precedent
The respective obligations of the parties set out in clause 2.2 do not
arise until the fulfilment of the conditions set out below:
(a) (Subscription Completion) Subscription Completion occurs; and
(b) (annual gold production) Target achieves an annual gold production of
less than 120,000 ounces for the financial year ended 31 December 2011,
as set out in the financial results published and announced for that
financial year.
If, at any time before the publication and announcement of the financial
results referred to in clause 5.1(b), Target provides to Bidder a
certificate in writing from Target`s auditor to the effect that Target
has achieved annual gold production of 120,000 ounces or more as at the
date of the certificate, such certificate will be evidence of such
achievement and, notwithstanding any other provision of this document,
no Adjustment Subscription Shares will be issued to Bidder.
5.2 Waiver of Adjustment Subscription Conditions Precedent
Bidder and Target acknowledge that the Adjustment Subscription
Conditions Precedent set out in clause 5.1 cannot be waived.
6. ADJUSTMENT SUBSCRIPTION COMPLETION
6.1 Time and place for Adjustment Subscription Completion
Adjustment Subscription Completion must take place at 4.00 pm
(Johannesburg Time) on the Adjustment Subscription Completion Date at 45
Empire Road, Parktown, Johannesburg, or such other time or places the
parties may agree.
6.2 Bidder`s obligations at Adjustment Subscription Completion
On the Adjustment Subscription Completion Date, Bidder must deliver to
Target an application for the Adjustment Subscription Shares, duly
completed and executed by Bidder, in the form set out in Schedule 2 or
in any other form Target agrees to accept.
6.3 Target`s obligations at Adjustment Subscription Completion
At the Adjustment Subscription Completion Date, Target must:
(a) issue the Adjustment Subscription Shares to Bidder;
(b) register Bidder as the holder of the Adjustment Subscription Shares.
6.4 Target`s obligations following Adjustment Subscription Completion
Target must:
(a) apply to ASX and JSE and use its best endeavours to obtain official
quotation of the Adjustment Subscription Shares by ASX and JSE with
effect from the Adjustment Subscription Completion Date;
(b) issue a Cleansing Notice within five Business Days of the Adjustment
Subscription Completion Date or, if a Cleansing Notice cannot be issued,
lodge a prospectus in accordance with section 708A(11) of the
Corporations Act by no later than the Adjustment Subscription Completion
Date; and
(c) deliver to Bidder a holding statement showing Bidder as the holder of
the Adjustment Subscription Shares as soon as practicable after
Adjustment Subscription Completion.
7. FUNDING
7.1 Bidder compliance with TRP requirements
Bidder agrees to comply with all requirements, if any, imposed on Bidder
by TRP in relation to its conduct of the Offer.
7.2 Target use of funds
Target and Bidder acknowledge that the funds raised by the Subscription
will be applied by Target:
(a) towards its working capital requirements;
(b) to fund additional capital expenditures in its existing operations,
including the Ventersburg project;
(c) to fund exploration and drilling of its Properties under development;
and
(d) to fund the Target Projects, including Project Maverick, and other
acquisitions of new properties.
7.3 Alternative funding arrangements
In the event that all the Additional Subscription Shares are not issued,
Bidder agrees to use its reasonable efforts to assist Target in
arranging funding for Target to pursue investment opportunities and fund
capital expenditures.
8. THE BID
8.1 Bidder agrees to make Bid
Bidder agrees to make the Bid.
8.2 Target recommendation
Target agrees to include in its target`s statement and any announcements
it makes in relation to the Transaction, the Initial Recommendation and
to procure that Target Board maintains that recommendation subject to
the Independent Expert concluding that the Transaction is fair and
reasonable to Target Shareholders and in the absence of a Superior
Proposal.
9. FACILITATING THE BID
9.1 Reasonable access
To facilitate the Bid, Target has already and will continue to use its
reasonable endeavours to provide Bidder with reasonable access to:
(a) the books and records of Target;
(b) the data room made available by Target;
(c) the Properties; and
(d) Target`s senior management, external auditors and accountants and other
advisers.
9.2 Access to people and information
Between the date of this document and the earlier of the date on which
the Offer Period ends, and the date this document is terminated, Target
must, to the extent legally permitted, and to the extent reasonably
required to implement the Transaction and the potential Adjustment
Subscription and to ensure that Target Group is integrated into the
group of companies of Bidder in an orderly and timely manner:
(a) provide all necessary information about the Register to Bidder that
Bidder requires in order to assist Bidder to implement the Offer and
solicit acceptances under the Offer;
(b) provide all necessary directions to the Registry promptly to provide any
information that Bidder reasonably requests in relation to the Register,
including any sub-register, and, where requested by Bidder, Target must
procure such information to be provided to Bidder in such electronic
form as is reasonably requested by Bidder;
(c) as soon as reasonably practicable, provide Bidder and its related bodies
corporate with any documents, records, and other information (subject to
any existing confidentiality obligations owed to third parties, or
applicable privacy laws) reasonably requested by them; and
(d) provide Bidder and its related bodies corporate with reasonable access
within normal business hours to Target`s officers and advisers (provided
that such access does not impose an undue burden on Target), which
Bidder reasonably requires for the purposes of:
(i) understanding Target`s financial position (including its cashflow and
working capital position), progress on mining projects, and management
control and business systems and operations of Target`s business;
(ii) implementing the Transaction and the potential Adjustment Subscription;
(iii)preparing for carrying on the business of Target following
implementation of the Transaction; and
(iv) any other purpose which is agreed in writing between the parties.
9.3 Confidentiality Agreement binds both parties
Both parties acknowledge that the rights and obligations of each party
set out in clauses 9.1 and 9.2 are subject to the Confidentiality
Agreement, which continues to bind Target and Bidder`s Guarantor and
which will bind Bidder as if it were included in the definition of
"Party" or "Baiyin", as the context may require, in the Confidentiality
Agreement.
9.4 Secondment
Between the date of this document and the date on which the Offer Period
ends, Bidder may, acting reasonably, place an employee or contractor on
a one month secondment within Target`s organisation for the purpose of
understanding Target`s business and projects. During the secondment,
the secondee will act in accordance with the reasonable instructions of
Target. The secondee must be removed by Bidder if required by Target
(acting reasonably) in relation to any failure to follow reasonable
instructions or disciplinary matter. More detailed secondment terms may
be agreed by the parties, acting reasonably. This secondment terminates
on the date of termination of this agreement (unless otherwise agreed by
the parties).
9.5 Conduct of business
(a) Subject to clause 9.5(b), between the Announcement Date and the date on
which the Offer Period ends, Target will conduct and will procure that
Target Group conducts, the business of Target Group in the usual and
ordinary course.
(b) Bidder and Target acknowledge that Target and Target Group:
(i) are permitted to do anything:
(A) in relation to a Target Project undertaken in accordance with clause
15.1 (except that an amount may be payable in the circumstances set out
under clause 11.2(h) and a Condition may be breached in the
circumstances set out under paragraphs 5(o) (Target Projects - share
consideration) and 5(p) (Target Projects - size) of Schedule 3);
(B) to the extent legally permitted, in relation to matters for which Bidder
has given its prior written consent, not to be unreasonably withheld;
(C) in relation to matters disclosed in, contemplated by or otherwise
consistent with, the business plan disclosed to Bidder prior to the date
of this document;
(D) in relation to matters specifically contemplated by this document,
including, but not limited to, the Goliath Distribution in Specie; or
(E) where, in the reasonable opinion of Target Board, formed in good faith
after having consulted with its legal and financial advisers, failing to
take, or failing to refuse to take, such action would or would be likely
to constitute a breach of the duties of the directors of Target; and
(ii) to the extent any conduct of Target or Target Group does not fall under
clause 9.5(b)(i), are not permitted to do anything which would result
in:
(A) any material increase in external liabilities, guarantees or
obligations, or any other material contracts, outside of the ordinary
course of business; or
(B) a Prescribed Event.
9.6 Offer documents
(a) Each party agrees that it will provide to the other such information as
is reasonably needed by the other party in order to enable the other
party to prepare the Notice of Meeting, the bidder`s statement and the
target`s statement (as appropriate).
(b) Each party agrees to, and to procure its representatives to, do such
things as are reasonably necessary to expedite the preparation of the
Notice of Meeting, bidder`s statement and the target`s statement and the
lodgement of the bidder`s statement and the target`s statement with ASIC
and despatch to Target Shareholders.
(c) Each party agrees to consider in good faith all reasonable and timely
comments received from the other and its external legal and other
advisers on the draft Notice of Meeting, bidder`s statement and target`s
statement (as appropriate).
9.7 Early dispatch of Offer
(a) For the purposes of item 6 in section 633(1) of the Corporations Act and
subject to the matters listed in clause 9.7(b), Target will agree that
offers under the Bid may be sent to holders of Target Shares on the day
on which the bidder`s statement for the Bid is sent to Target or within
28 days after that day, as Bidder may elect.
(b) Clause 9.7(a) is subject to:
(i) Bidder providing Target with an initial draft of its bidder`s statement
for review not less than 10 Business Days before it is lodged with ASIC
under item 2 of section 633(1) of the Corporations Act;
(ii) Bidder providing Target with a final draft of its bidder`s statement for
review not less than two Business Days before it is lodged with ASIC
under item 2 of section 633(1) of the Corporations Act; and
(iii) Bidder taking account of all reasonable comments provided to it by
Target prior to finalising its bidder`s statement.
9.8 Conditions
(a) Target agrees to use reasonable endeavours not to do (or omit to do)
anything which will, or is likely to, result in any of the Conditions
being breached, and Target agrees to use best endeavours to ensure that
the Conditions in paragraphs 5(f) and 5(i) of Schedule 3 are fulfilled.
(b) Nothing in this clause 9 prevents Target or Target Board from taking, or
failing to take, action where to do otherwise would, in the reasonable
opinion of Target Board, constitute a breach of the duties of the
directors of Target. The reasonable opinion of Target Board must be
based on specific legal, and any other appropriate, advice.
(c) To avoid any doubt, in this document, a reference to a Condition being
breached includes a reference to a Condition not being, or not being
capable of being, satisfied.
(d) Bidder agrees to use its best endeavours to ensure satisfaction of the
Conditions set out in paragraphs 5(c), 5(e) and 5(f) of Schedule 3 (but
is not obliged to waive any Conditions or accept any conditional
approval).
(e) To avoid doubt, nothing in this document will restrict Target from
entering into and completing any arrangement in relation to a Target
Project undertaken in accordance with clause 15.1 (except that an amount
may be payable in the circumstances set out under clause 11.2(h) and a
Condition may be breached in the circumstances set out under paragraphs
5(o) (Target Projects - share consideration) and 5(p) (Target Projects -
size) of Schedule 3).
10. EXCLUSIVITY
10.1 Clause does not apply to Target Projects
For the avoidance of doubt, this clause 10 does not apply to anything
Target may do in pursuing, entering into and completing any arrangement
in relation to a Target Project undertaken in accordance with clause
15.1.
10.2 Cease all existing discussions
Target represents and warrants that, other than the discussions with
Bidder in respect of the Transaction, neither it nor any of its
Associated Persons is currently in any other negotiations or discussions
in respect of any Competing Proposal with any person.
10.3 No solicitation
During the Condition Period, Target must not and must ensure that its
Associated Persons do not and Target must not require any adviser or
agent to, directly or indirectly solicit, initiate or encourage any
inquiries, proposals or discussions regarding any Competing Proposal
(whether from a person with whom Target has previously been in
discussions or not) or communicate any intention to do any of those
things.
10.4 No talk
Subject to clause 10.8, during the Condition Period, Target must not and
must ensure that its Associated Persons do not directly or indirectly:
(a) negotiate or enter into; or
(b) participate in negotiations or discussions with any other person
regarding, a Competing Proposal (or communicate any intention to do any
of those things), even if that person`s Competing Proposal was not
directly or indirectly solicited, invited, facilitated, encouraged or
initiated by Target or any of its Associated Persons, or the person has
publicly announced the Competing Proposal.
10.5 No due diligence
Without limiting the general nature of clause 10.4, but subject to
clause 10.8, during the Condition Period, Target must not, without
Bidder`s prior written consent:
(a) solicit, invite, facilitate or encourage any party (other than Bidder)
to undertake due diligence investigations on Target or any of its
related bodies corporate; or
(b) make available to any person (other than to Bidder) or permit any such
person to receive any non-public information relating to Target or any
of its related bodies corporate with a view to obtaining any offer,
proposal or expression of interest from any person in relation to any
Competing Proposal.
10.6 Notice of unsolicited approach
During the Condition Period, Target must immediately inform Bidder if it
or any of its Associated Persons or other related persons:
(a) receives any unsolicited approach with respect to any Competing Proposal
and, at Bidder`s request, must disclose to Bidder the fact that such an
approach has been made and all material details of the Competing
Proposal, including details of the person making the unsolicited
approach;
(b) receives any request for information relating to Target or any of its
related bodies corporate or any of their businesses or operations or any
request for access to the books or records of Target or any of its
related bodies corporate, which Target has reasonable grounds to suspect
may relate to a current or future Competing Proposal; or
(c) provides any information relating to Target or any of its related bodies
corporate or any of their businesses or operations to any person in
connection with or for the purposes of a current or future Competing
Proposal and, at Bidder`s request, must provide to Bidder a copy of that
information.
10.7 Right to match
(a) During the Condition Period, Target must not enter into any legally
binding agreement in relation to a Superior Proposal unless Target has
notified Bidder of the Superior Proposal and Bidder has not, within 72
hours of receipt by Bidder of that notification, submitted a written
proposal to Target (Bidder`s Revised Proposal) which is on terms that
are more favourable to Target Shareholders (as a whole).
(b) If Target Board determines in good faith that Bidder`s Revised Proposal
is on terms that are more favourable to Target Shareholders (as a whole)
than the Superior Proposal, Target must, in the absence of another
Superior Proposal, proceed with Bidder`s Revised Proposal.
(c) For the purpose of this clause 10.7, each successive variation to any
Competing Proposal in relation to a Superior Proposal will be deemed to
constitute a new proposal and the provisions of this clause will apply
to each such new proposal.
(d) If Target gives Bidder a notification under clause 10.7(a), Bidder
agrees that the notification and its contents will be kept confidential.
10.8 Fiduciary exception
Nothing in clause 10.4, 10.5 or 10.6 requires Target or Target Board to
do or refrain from doing anything with respect to an offer or proposal
that constitutes a bona fide Competing Proposal (which was not
solicited, invited, facilitated, encouraged or initiated by Target in
contravention of clause 10.3), including the formation of such an offer
or proposal, where doing or refraining from doing that thing (in the
reasonable opinion of Target Board formed in good faith after receiving
advice from its legal and financial advisers) would or may be reasonably
likely to involve a breach of the duties of the directors of Target.
10.9 Standstill
Subject to clause 10.10, during the Standstill Period, Bidder must not
and must make sure its Associated Persons do not:
(a) acquire or offer to acquire, any securities or property or any right or
option to acquire any securities or property of Target; or
(b) enter into any arrangements involving the conferring of rights the
economic effect of which is equivalent, or substantially equivalent, to
acquiring, holding or disposing of securities in Target; or
(c) solicit proxies from shareholders of Target or otherwise seek to
influence or control the management or policies of Target,
unless Bidder has given Target prior written notice of its intention to
do any of the acts set out in paragraphs (a) to (c) above, and Target
gives it prior written consent.
10.10 Exception to Standstill
Clause 10.9 does not apply to anything done by Bidder or its Associated
Persons:
(a) in order to carry out the Transaction under the terms of this document;
(b) in order to pursue and implement any transaction for the acquisition of
any Target Shares from a Target Shareholder, where the details of that
transaction have been fully and fairly disclosed to Target by Bidder on
or before the date of this document;
(c) in order to pursue and implement any transaction for the acquisition of
any Target Convertible Bonds from a holder of Target Convertible Bonds
at any time before Completion of the Transaction; or
(d) if Target Board does not make the Initial Recommendation, or withdraws
such recommendation for any reason.
11. UNDERTAKINGS TO PAY COMPENSATING AMOUNTS
11.1 Acknowledgments
Based on the representations made to it by the other party, each of
Bidder and Target acknowledges that:
(a) if they enter into this document and the Transaction is subsequently not
implemented, each party will incur significant costs;
(b) each party has requested that provision be made for the payments
outlined in this clause 11, without which neither of them would have
entered into this document;
(c) the board of directors of each of Bidder and Target:
(i) has received legal advice in relation to this document and the operation
of this clause 11; and
(ii) believes the implementation of the Transaction and the potential
Adjustment Subscription will provide significant benefits to Bidder,
Target and their respective stakeholders, such that it is reasonable and
appropriate for each party to agree to the payment it agrees to make
under this clause 11 in order to secure the other party`s participation
in the Transaction; and
(d) the amount each party has agreed to pay the other party under this
clause 11 represents a genuine and reasonable estimate of cost and loss
that would be suffered by that party if this document was entered into
and the Transaction and the potential Adjustment Subscription was
subsequently not implemented.
11.2 Target`s Undertaking
Subject to Target and Bidder otherwise agreeing in writing, Target
undertakes to pay the Compensating Amount to Bidder once only if one or
more of the following occurs during the Condition Period:
(a) (Competing Proposal) a Competing Proposal becomes open for acceptance
and:
(i) under that Competing Proposal, a person acquires or agrees to acquire,
directly or indirectly, an interest in all or a material part of the
assets or business of Target or its related bodies corporate, or a
interest (legal, beneficial or synthetic) or relevant interest in more
than 20% of the voting shares of Target, before the end of the Offer
Period; or
(ii) in the case of a Competing Proposal that is a takeover bid made under
Chapter 6 of the Corporations Act, the Competing Proposal becomes free
from any defeating conditions either before or after the end of the
offer period under the Competing Proposal;
(b) (recommendation) Bidder or its related bodies corporate do not acquire
or become entitled to acquire or otherwise have an aggregate interest in
more than 60% (by number) of the Target Shares on issue at that time
(calculated as set out in paragraph 5(b) of Schedule 3), and:
(i) (failure to recommend) Target Board does not make the Initial
Recommendation where the Independent Expert concludes that the
Transaction and the potential Adjustment Subscription is fair and
reasonable to Target Shareholders, in the absence of a Superior
Proposal; or
(ii) (change of recommendation) Target Board, having made the Initial
Recommendation, withdraws or changes that recommendation in a material
respect after the date of this document to no longer support the
Transaction (unless Target Board does so as a result of the Independent
Expert changing its opinion that the Transaction is fair and reasonable
to Target Shareholders in the absence of a Superior Proposal) or
publicly recommends that a Superior Proposal is in the interests of
Target Shareholders;
(c) (Superior Proposal) notwithstanding any other provision of this clause
11, Target terminates this document where a Superior Proposal arises;
(d) (breach of clause 10) Target is in breach of clause 10 and does not
cease the conduct which caused the breach within three Business Days
following written notice from Bidder outlining the nature of the breach;
(e) (breach of conditions) Target or any director of Target does (or omits
to do) anything (whether or not it may be permitted by the terms of this
agreement) which results in any of the conditions in clause (c), (d) or
(f) of this clause being breached or being unable to be fulfilled;
(f) (Prescribed Event or Material Adverse Change) all of the following are
satisfied:
(i) a Prescribed Event or Material Adverse Change occurs prior to the end of
the Offer Period;
(ii) this agreement is terminated in accordance with clause 22; and
(iii) all of the following apply in relation to the Prescribed Event or
Material Adverse Change:
(A) the prevention of the Prescribed Event or Material Adverse Change was
within the reasonable control of Target and the failure to so prevent
was not:
(I) pursuant to a contractual right of Target exercised for a legitimate
purpose; or
(II) otherwise a legitimate exercise of Target Board`s discretion, functions
or responsibilities; and
(B) had the Prescribed Event or Material Adverse Change occurred prior to
the date of this document, the Prescribed Event or Material Adverse
Change might reasonably be expected to have resulted in Bidder not
entering into this document; and
(C) Target has failed to rectify the Prescribed Event or Material Adverse
Change within 5 Business Days after receipt of notice from Bidder
requiring Target to do so.
(g) (material breach) Target is in material breach of any applicable clause
of this document and Bidder terminates this document pursuant to clause
22.1 as a result; or
(h) (Target Projects) in relation to a Target Project, Target enters into
binding arrangements which involve:
(i) the issue, or agreement to issue, Target Shares at an issue price lower
than the Offer Price; or
(ii) the aggregate consideration payable by Target for an individual Target
Project is more than 5% of the market capitalisation of Target
(determined by multiplying the total number of Target Shares then on
issue by the closing price of a Target Share on ASX) on the date Target
enters into binding arrangements in relation to that Target Project,
provided that this clause 11.2(h) does not apply to any arrangements in
respect of the Goliath Transaction.
11.3 Bidder`s Undertaking
Bidder undertakes to pay the Compensating Amount to Target once only if
Bidder is in material breach of any applicable clause of this document
and Target terminates this document pursuant to clauses 22.1 or 22.3(a)
as a result.
11.4 Compensating Amount
The Compensating Amount is:
(a) in the case of Target`s Undertaking, A$5,000,000 plus the amount of any
GST payable; and
(b) in the case of Bidder`s Undertaking, A$5,000,000 plus the amount of any
GST payable.
11.5 Demand for payment
(a) Any demand for payment of the applicable Compensating Amount must be in
writing and the recipient of that demand (Payer) must pay the
Compensating Amount to Bidder or Target (as the case may be) (Payee)
within five Business Days of receipt of the demand.
(b) The Payer`s obligation to make the payment referred to in clause 11.5(a)
will be satisfied by the payment of the relevant Compensating Amount in
immediately available funds to the account nominated by the Payee for
the purposes of this clause.
11.6 Repayment
If Bidder ultimately acquires beneficial ownership of 50.1% or more of
Target Shares within 6 months of receiving the Compensating Amount,
Bidder must repay to Target any amount received under clause 11 which
has not already been refunded under clause 11.8 or 11.9.
11.7 Trigger Disputes
(a) If there is a Trigger Dispute between the parties which is not resolved
within two Business Days of one party notifying the other, the Trigger
Dispute must be referred to the Appointed Expert.
(b) The parties must instruct the Appointed Expert to determine the Trigger
Dispute within 10 Business Days.
(c) In determining the dispute, the Appointed Expert will act as an expert
and not an arbitrator.
(d) The determination of the Appointed Expert will, in the absence of
manifest error, be final and binding on the parties.
(e) The Appointed Expert`s fees will be borne by the party who raises the
Trigger Dispute unless the Appointed Expert determines otherwise.
11.8 Set Off
If Bidder does not acquire beneficial ownership of 50.1% or more of
Target Shares and, within 12 months of the date of this document,
accepts a Competing Proposal for any Target Shares, or otherwise
disposes of any Target Shares, acquired after the date of this document,
Bidder must:
(a) prior to payment of the Compensating Amount, notify Target of any profit
for Bidder on that disposal (net of tax payable by Bidder) and Target
may reduce the Compensating Amount by that amount; or
(b) after payment of the Compensating Amount, promptly refund to Target an
amount equal to any profit for Bidder on that disposal (net of tax
payable by Bidder).
11.9 Compliance with law
(a) Unlawful Amount means all or any part of the payment required to be made
under this clause 11 that is found by the Takeovers Panel or a Court to
be unlawful, involve a breach of director`s duties or to constitute
Unacceptable Circumstances.
(b) If the Takeovers Panel or a Court finds an Unlawful Amount and the
period for lodging an application for review or a notice of appeal of
that decision has expired without such application or notice having been
lodged or if an application for review or a notice of appeal has been
lodged with the Takeovers Panel or a Court within the prescribed period
and the relevant review Panel or Court finds an Unlawful Amount then:
(i) the applicable undertaking under clause 11 does not apply to the extent
of the Unlawful Amount; and
(ii) Bidder (in the case of Target`s Undertaking) or Target (in the case of
Bidder`s Undertaking) must refund the whole or any relevant part of any
Unlawful Amount paid to Target or Bidder under this document.
11.10 Other claims
(a) Notwithstanding any other provision of this document other than clause
11.10(b), each of Bidder and Target acknowledges and agrees that the
payment of the applicable Compensating Amount by Target or Bidder (as
the case may be) will constitute full satisfaction of all Liability to
Bidder or Target (as applicable) under this document (or otherwise), in
respect of any breach by Target or Bidder (as applicable) of a term of
this document or any other Claim.
(b) Provided Subscription Completion has occurred, Clause 11.10(a) does not
apply to a breach by either party of any of the Warranties or any Claim
under a Target Indemnity, which are dealt with in clauses 19 and 20.
12. TAKEOVER OFFER - VARIATION AND WAIVER
12.1 Variation
Bidder may vary the terms of the Bid in any manner permitted by the
Corporations Act and so that the varied terms are not materially less
favourable to holders of Target Shares than those set out in the Agreed
Bid Terms.
12.2 Waiver of conditions and extension
Subject to the Corporations Act and any other applicable Law, Bidder
may:
(a) declare the Bid to be free from any Condition;
(b) waive any alleged breach of a Condition before or after the alleged
breach has occurred; or
(c) subject to the Agreed Bid Terms, extend the Bid at any time.
13. TIMETABLE AND JOINT DISPATCH
(a) Each party agrees to use reasonable endeavours to implement the
Transaction and the potential Adjustment Subscription in accordance with
the Timetable set out in Schedule 4.
(b) Each party agrees to use reasonable endeavours to send the Notice of
Meeting, bidder`s statement and target`s statement together, provided
that Bidder has complied with its obligations in clause 9.7(b).
14. PUBLIC ANNOUNCEMENTS
14.1 Initial Announcement
Immediately after the execution of this document by both parties, Bidder
and Target must issue a simultaneous joint public announcement to ASX
and JSE concerning the Transaction and the potential Adjustment
Subscription in a form agreed by both parties.
14.2 Consultation
(a) Subject to clause 14.2(b), each party must use its best endeavours to
consult with the other party prior to making any public announcements or
communications to shareholders in connection with the Transaction and
the potential Adjustment Subscription (including without limitation the
Initial Announcement referred to in clause 14.1).
(b) Where a party is required to make an announcement by applicable Law,
Listing Rules or JSE Listings Requirements or make any disclosure
relating to the Transaction (including any supplementary bidder`s
statement or target`s statement) it may do so only after it has:
(i) given the other party as much notice as is reasonably practicable; and
(ii) consulted with the other party as to the content of that announcement or
disclosure.
15. CURRENT OR PROPOSED TRANSACTIONS
15.1 Target Projects
Bidder acknowledges that:
(a) Target is either currently pursuing or implementing, or plans to pursue
or implement after the date of this document, the Target Projects;
(b) the Target Projects are expected to be value accretive to Target and in
line with Target`s asset expansion strategy; and
(c) Target may issue Target Shares pursuant to some or all of the Target
Projects after the date of this document,
and acknowledges and agrees that nothing in this document will restrict
Target from pursing or implementing any Target Project on or after the
date of this document.
For the avoidance of doubt, Bidder agrees that the pursuit or
implementation of the Target Projects in accordance with this clause
15.1 will not breach any clause of this document or any Condition or
affect the Offer Price (except that an amount may be payable in the
circumstances set out under clause 11.2(h) and a Condition may be
breached in the circumstances set out under paragraphs 5(o) (Target
Projects - share consideration) and 5(p) (Target Projects - size) of
Schedule 3).
16. RIGHT OF FIRST REFUSAL
16.1 Right to participate
Subject to clause 16.6 and Bidder being the registered holder of at
least 50.1% of all issued Target Shares, Bidder has the right but not
the obligation to participate in any proposed offer by Target of Target
Shares or Equity Securities that may convert into Target Shares
(Proposed Equity Offer) on the terms set out in this clause 16.
16.2 Terms of Proposed Equity Offer
Except where a Proposed Equity Offer is a Participation Exception,
Target must ensure that Bidder may participate in the Proposed Equity
Offer by making an offer for the issue to Bidder of the number of Equity
Securities determined in accordance with clause 16.3 on the same terms
and conditions as offers of Equity Securities are made to other
investors or shareholders pursuant to the Proposed Equity Offer (and,
where the consideration payable by other investors or shareholders does
not take the form of cash, an equivalent cash amount).
16.3 Number of Equity Securities
Where, in respect of a Proposed Equity Offer, Target is required under
clause 16.2 to offer to issue Equity Securities to Bidder, the number of
Equity Securities to be offered to Bidder will be:
(a) where the Proposed Equity Offer is a Pro Rata Offer, the pro rata
entitlement of Bidder; or
(b) otherwise, the number of Equity Securities which would need to be issued
to Bidder so that after the issue of Equity Securities under the
Proposed Equity Offer the percentage holding of Bidder is the same as
the percentage holding it held immediately before the issue of Equity
Securities pursuant to the Proposed Equity Offer.
16.4 Approvals required
Any offer made to Bidder in accordance with clause 16.2 is conditional
on receipt of all Approvals required from Target Shareholders and any
Public Authorities. The parties must use reasonable endeavours to
obtain any such approvals within the period stipulated in clause
16.5(b).
16.5 Lapse of offer
Any offer made to Bidder in accordance with clause 16.2 will lapse if,
from the time Target provides Bidder with the terms of the relevant
transaction:
(a) Bidder does not accept the offer within 5 Business Days; or
(b) Bidder or Target does not obtain the Approvals required by clause 16.4
within three months.
For the avoidance of doubt, if the offer lapses under this clause 16.5,
Target will not be restricted from offering Target Shares or Equity
Securities that may convert into Target Shares to a third party.
16.6 Limitations on the effect of this clause
(a) This clause 16 only comes into effect after Completion of the
Transaction.
(b) Subject to clause 16.6(a), in addition to compliance with all other
applicable Laws and the Listing Rules, the rights of Bidder under this
clause 16 will be subject to and conditional on Target obtaining either
one or both of the following, as required by ASX:
(i) written notice from ASX that this clause 16 does not contravene Listing
Rule 6.18;
(ii) a waiver from ASX of Listing Rule 6.18 that allows the parties to give
full effect to this clause 16.
(c) Nothing in this clause 16 will prevent or delay any transaction
(including any Proposed Equity Offer) from being carried out by Target
in accordance with its terms. For the avoidance of doubt, any aspect of
the offer made to Bidder in accordance with clause 16.2 (including any
Approvals required under clause 16.4) will not form part of any
conditions to any transaction (including any Proposed Equity Offer) to
be carried out by Target.
17. TRANSITIONAL STEPS AND BIDDER`S INTENTIONS
In the event that Bidder acquires a controlling interest in Target,
Bidder makes the following acknowledgements and representations
regarding transitional steps.
17.1 Target Executive Team
During the Transition Period, Bidder intends to:
(a) procure the retention of the Target Executive Team to manage the
business of Target; and
(b) procure the remuneration of the Target Executive Team in the manner set
out in Schedule 7.
17.2 Principles of Target Board representation
Without limiting clause 18, following Completion of the Transaction,
Bidder intends to reconstitute Target Board in accordance with the
following principles:
(a) representation of Bidder (including on all Target Board sub-committees),
which will be in proportion with Bidder`s total shareholding in Target;
(b) size, which will be suitable for Target Board to perform its duties and
function;
(c) composition, which will incorporate an appropriate mix of experience and
qualifications of board members and have regard to relevant corporate
governance considerations, including the ASX Corporate Governance
Principles and Recommendations; and
(d) independence, which will require a Lead Independent Director and at
least four independent, non-executive directors.
17.3 Technical and Development Sub-Committee
Bidder and Target agree to use their best endeavours to form a Technical
and Development Sub-Committee, the composition and purpose of which is
to be agreed as soon as possible after the date of this document.
18. BIDDER NOMINATION RIGHTS
18.1 Application
This clause 18 does not operate unless and until each of the following
occurs:
(a) the Bid has become unconditional and the Offer Period has subsequently
ended; and
(b) Bidder, Bidder Guarantor and any related body corporate of either of
them being the registered holders of, in aggregate, at least 50.1% of
the total issued Target Shares.
18.2 Right to nominate Target directors
For so long as Bidder, Bidder Guarantor and any related body corporate
of either of them hold in aggregate not less than 15% of the total
issued Target Shares at any time, Bidder will be able to nominate
members to Target Board on a proportional basis, and in any case no less
than one member for each complete 15% shareholding in Target (Nominee
Directors).
18.3 Replacement of Nominee Director
(a) Bidder may by notice to Target:
(i) remove any Nominee Director appointed to Target Board;
(ii) nominate a replacement Nominee Director who will be appointed as a
casual vacancy other than in the circumstances referred to in clause
18.3(a)(iii) (Replacement Nominee Director); or
(iii) in circumstances where a Nominee Director appointed to Target Board
is due to retire by rotation under Target`s constitution (Incumbent
Nominee Director), propose a new nominee whose appointment will be
considered at the next annual general meeting, and if such a nomination
is made, the Incumbent Nominee Director will not be eligible to offer
him or herself for re-election.
(b) If Bidder exercises its right to propose a Replacement Nominee Director
under clause 18.3(a)(ii):
(i) the Incumbent Nominee Director must retire in accordance with Target`s
constitution; and
(ii) any Replacement Nominee Director will be considered for election at the
next annual general meeting.
18.4 Precondition to appointment
Prior to the appointment of any Nominee Director or the replacement of
the Incumbent Nominee Director, that person must first agree with Target
that they will retire when required to do so in the circumstances
referred to in clause 18.3.
18.5 Restriction on nomination right
Bidder may not nominate a person as a Nominee Director under clause 18.2
(or any Replacement Nominee Director under clause 18.3(a)(ii) or
18.3(a)(iii)) if that person has been removed or, being a director of
Target retiring by rotation, is not re-elected by resolution of Target
Shareholders.
18.6 Appointment by Target Board in interim
(a) Target Board will promptly appoint any Nominee Director (or any
Replacement Nominee Director other than one appointed under clause
18.3(a)(iii)) as a casual or additional director of Target Board until
the next annual general meeting of Target, at which time that Nominee
Director will (subject to clause 18.3(a)(i)) be subject to election by
Target Shareholders in accordance with Target`s constitution, the
Listing Rules and the JSE Listings Requirements.
(b) For the avoidance of doubt, the obligation of Target Board to appoint
any Nominee Director (or any Replacement Nominee Director) under this
clause 18.6 only operates if Bidder is entitled to nominate a Nominee
Director under clause 18.2.
18.7 Initial constitution of Target Board
The parties agree that, during the Transition Period, Target Board will
initially consist of 11 persons, namely:
(a) a Chief Executive Officer, being the Chief Executive Officer of Target
as at the date of this document;
(b) a Chief Financial Officer of Target, being the Chief Financial Officer
of Target as at the date of this document;
(c) a Lead Independent Director, being one of the independent directors that
are on the Target Board as at the date of this document;
(d) five independent directors, comprising of:
(i) two independent directors that are on the Target Board as at the date of
this document; and
(ii) three independent directors nominated by Bidder; and
(e) three non-executive Nominee Directors, one of whom will be the chairman.
18.8 Boards of other Target Group companies
The powers and authority of the boards of each company in Target Group
(except Target) will be determined by Target Board from time to time.
18.9 Target committees
Bidder will be entitled to nominate members to each of the committees of
Target including the Audit Committee and Remuneration Committee, in
proportion with Bidder`s total shareholding in Target and in accordance
with the principles set out in clause 17.2, as they apply to the
committees of Target.
18.10 Nominee Directors will not deliberate on certain matters
Bidder and Target acknowledge and agree, and it will be a condition that
each Nominee Director (or any Replacement Nominee Director) or any other
director nominated by Bidder acknowledges and agrees before being
nominated to be a member of Target Board that, due to the potential
conflict of interest or any potential material personal interest of the
Nominee Director (or Replacement Nominee Director) or any other director
nominated by Bidder, a Nominee Director (or Replacement Nominee
Director) or any other director nominated by Bidder must not be present
while any of the following matters are being considered by Target Board
and must not vote on any of the following matters:
(a) any dispute or difference between Target and Bidder arising out of or in
connection with this document, including any dispute or difference as to
the formation, validity, existence or termination of this document; or
(b) without limiting clause 18.10(a), any matter where Bidder has alleged a
breach of a Target Warranty or made any Claim in relation to this
document (including a Claim under a Target Indemnity).
For the avoidance of doubt, this clause 18.10 does not in any way limit
the duties that each Nominee Director or any other director nominated by
Bidder will need to observe and perform while being a member of Target
Board, and this clause 18.10 does not apply to any independent directors
nominated by Bidder.
19. WARRANTIES AND INDEMNITIES
19.1 General Warranties
Each party represents and warrants to the other party that each of the
following Warranties is correct and not misleading on the date of this
document up to and including Completion of the Transaction as if made on
and as at each of those dates (unless expressly stated otherwise):
(a) it is duly incorporated under the Laws of the place of its
incorporation;
(b) it has the power and authority to enter into this document and perform
and observe all its terms;
(c) this document constitutes its legal, valid and binding agreement
enforceable against it in accordance with its terms;
(d) it is not bound by any contract which may restrict its right or ability
to enter into or perform the agreement contained in this document; and
(e) no resolutions have been passed and no other step has been taken or
legal proceedings commenced or threatened against it for its winding up
or dissolution or for the appointment of a liquidator, receiver,
administrator or similar officer over any or all of its assets and no
regulatory action has been taken which would prevent, inhibit or
otherwise have a material adverse effect on its ability to fulfil its
obligations under this document.
19.2 Target Warranties
Subject to clause 20, Target represents and warrants to Bidder that each
of the following Warranties is correct and not misleading on the date of
this document up to and including Completion of the Transaction as if
made on and as at each of those dates (unless expressly stated
otherwise):
(a) (continuous disclosure) Target is in compliance with ASX Listing Rule
3.1 in relation to continuous disclosure and is not relying on the carve-
out in Listing Rule 3.1A to withhold any information from disclosure,
except as disclosed by Target to Bidder in writing on or prior to the
date of this document;
(b) (no Prescribed Occurrences) Target is not aware of any act, omission,
event or fact that would result in one or more of the conditions set out
in paragraph 5(d) of Schedule 3 being triggered, except as disclosed by
Target to Bidder in writing on or before the date of this document;
(c) (Disclosure Material) The Disclosure Material has been prepared and
provided in good faith and to the best of Target`s knowledge and belief
is accurate in all material respects, and Target has not deliberately
withheld from Bidder any information that is material to Target Group as
a whole (whether that information is in the Disclosure Materials or
otherwise). In addition, no Disclosure Material is, to the best of
Target`s knowledge and belief, false or misleading in any material
respect;
(d) (licences, consents and authorisations) Each member of Target Group
holds all material licences, consents, certificates, permissions,
consents and authorisations required for the carrying on of its business
and use of its properties as they are being carried on and used as at
the date of this document, and nothing has occurred to the knowledge and
belief of the relevant member of Target Group which is likely to have
the effect of its material licences, permits or franchises being revoked
or altered in any materially adverse way, or not being renewed or being
capable of being renewed on reasonably acceptable terms;
(e) (compliance with Laws) Each member of Target Group has conducted its
business in all material respects in accordance with applicable Laws,
including without limitation all black economic empowerment requirements
of the South African Mineral and Petroleum Resources Development Act,
No. 28 of 2004, as amended, the Broad-Based Socio-Economic Empowerment
Charter for the South African Mining Industry, published in South
African Government Gazette No. 26661 on 13 August 2004 and related
legislation. Target is not aware of any allegation of any material
breach of any such laws.
(f) (environmental matters)
(i) (contamination and pollution)
(A) As far as Target is actually aware, having made reasonable enquires at
the time of:
(I) the relevant member of Target Group acquiring or occupying the
Properties (while being a member of Target Group); or
(II) the Target acquiring a member of Target Group which, at that time, owned
or occupied any Properties,
the Properties, at the times referred to in items (I) or (II) above (as
the case may be), were free from any contamination and there had been no
migration of contamination from the Properties to other land or to
water.
(B) Since the time:
(I) the relevant member of Target Group first acquired or occupied the
Properties (while being a member of Target Group); or
(II) Target acquired a relevant member of Target Group which, at the time of
acquisition, owned or occupied any Properties,
no member of Target Group has caused or contributed to any contamination
of the Properties or caused or contributed to any migration of
contamination from the Properties to other land or to water.
(C) As far as Target is actually aware, having made reasonable enquires at
the time Target acquired a relevant member of Target Group, no member of
Target Group, on or before that time of acquisition, caused or
contributed to contamination of any previously owned or occupied land.
(D) Since the time Target acquired a relevant member of Target Group, no
member of Target Group has caused or contributed to contamination of any
previously owned or occupied land.
(ii) (environmental management) Each member of Target Group has in place, and
is complying with the terms of, systems and processes designed to ensure
its compliance with all applicable laws. Those systems and processes
have been designed with professional skill, care and diligence.
(iii) (rehabilitation obligations) Each member of Target Group has made
adequate provision for the rehabilitation of any areas on any of the
Properties where a member of Target Group has undertaken prospecting or
mining activities, and each member of Target Group has environmental
rehabilitation guarantees in place that are sufficient to cover the
costs of any rehabilitation that may be required under any applicable
Laws in respect of such areas.
(g) (securities) Target`s issued securities as at the date of this document
(unless otherwise stated) consist of:
(i) 807,664,732 Target Shares;
(ii) 500 Target Convertible Bonds (the conversion ratio of which will alter
depending on the occurrence of specified circumstances or events, which
Bidder and Bidder Guarantor are aware of); and
(iii) 87,861,730 Target Options, each convertible into one Target Share,
and those securities comprise the whole of the issued and outstanding
share capital of Target and it has not issued or agreed to issue any
other securities or instruments which are still outstanding and which
may convert into or be exchangeable for or entitle the holder to Target
Shares.
(h) (Goliath Gold) Neither Goliath Gold nor any of its related bodies
corporate is subject to any liability or contingent liability which, if
the Goliath Transaction completes (Goliath Completion), will, on Goliath
Completion, become a direct, actual liability of Target Group (which,
for the avoidance of doubt, does not include Goliath Gold or any of its
subsidiaries)other than as expressly provided for in, or contemplated
by, the agreements for the Goliath Transaction given to Bidder prior to
the date of this document.
19.3 Bidder Warranties
Bidder represents and warrants to Target that each of the following
Warranties is correct and not misleading on the date of this document up
to and including Completion of the Transaction as if made on and as at
each of those dates (unless expressly stated otherwise):
(a) Bidder has sufficient cash or access to sufficient cash to perform its
obligations under this document; and
(b) as at the date of this document, Bidder is not aware of any fact, event,
act or omission that would result in one or more of the Subscription
Conditions Precedent or Conditions not being satisfied.
19.4 Reliance on Warranties
Bidder acknowledges that it has not entered into this document in
reliance on any other representations or warranties (pre-contractual or
otherwise) given or made by Target.
19.5 Target Indemnities
(a) Subject to clause 20, if all of the following occur:
(i) a Target Indemnity Event occurs; and
(ii) Bidder makes a Claim of breach of a Target Warranty to a competent court
or tribunal as a result of the occurrence of the relevant Target
Indemnity Event; and
(iii) the competent court or tribunal referred to in clause 19.5(a)(ii)
determines that the Claim of breach of a Target Warranty:
(A) cannot be pursued by Bidder; or
(B) the amount of the Claim must be reduced,
by reason only of Bidder`s knowledge of any matter, fact or circumstance
surrounding the relevant Target Indemnity Event (the amount of such a
Claim that cannot be pursued or the reduced amount of such a Claim being
referred to in this clause as a Deemed Disclosure Amount),
then Target indemnifies Bidder against any Loss that Bidder suffers
because of the Target Indemnity Event to the extent of the Deemed
Disclosure Amount.
(b) If a Claim for a breach of a Target Warranty relates to a Modder East
Stoppage Event which has occurred, then the parties agree that Target
will be liable to pay to Bidder A$105,000,000 in respect of that Claim
less any amount paid or payable in respect of other Claims made in
respect of Target Warranties and Target Indemnities.
For the avoidance of doubt, if a Claim in relation to a Modder East
Stoppage Event is made in accordance with this clause 19.5(b), then the
maximum amount of all aggregate Claims that may be made under this
document under clause 20.7 will be fully utilised and no other Claims by
Bidder under this document will be able to be made.
If, for any reason, a Claim in relation to a Modder East Stoppage Event
made in accordance with this clause 19.5(b) cannot be validly be made in
law, this clause 19.5(b) shall be deemed to be deleted from this
document.
20. LIMITATIONS OF TARGET WARRANTIES AND TARGET INDEMNITIES
20.1 Disclosures
No Target Warranty is breached by reason of, and Target is not liable to
Bidder or any other person for breach of any Target Warranty in respect
of, any fact, matter or circumstance:
(a) fairly disclosed in the Disclosure Material;
(b) of which Bidder would have been aware had it conducted searches before
the date of this document of records of any Government Agency open to
public inspection in Australia or South Africa;
(c) of which Bidder, Bidder Guarantor, China Development Bank, Long March
Capital Limited or any of their related bodies corporate, is actually
aware of before the date of this document; or
(d) contained in this document, including any schedule, exhibit or annexure.
The Target Warranties are qualified by each such fact, matter and
circumstance.
20.2 Limitations
No Target Warranty is breached by reason of, and Target is not liable to
Bidder or any other person for breach of any Target Warranty or under
any Target Indemnity in respect of, any fact, matter or circumstance:
(a) which arises from any change after the date of this document in any Law
or in its interpretation or in any administrative practice or ruling of
a Government Agency (even if the change has retrospective effect); or
(b) to the extent that it is caused by, or contributed to by, any act,
omission, transaction or arrangement:
(i) of or by or on behalf of Bidder or any related body corporate of Bidder;
(ii) of or by or on behalf of Target, or any other person, at the request of
or with the consent of Bidder; or
(iii) in accordance with implementing, or permitted by, the terms of this
document or of any other agreement contemplated by it.
20.3 No liability if loss is otherwise compensated for
Bidder may only recover once for the same Loss, and Target is not liable
to Bidder or any other person for any Loss to the extent:
(a) that the same Loss has been recovered in another Claim or the subject of
the Claim is made good or is compensated for without cost to Bidder;
(b) that there are any corresponding savings by, or net benefit to, Bidder
or any of its related bodies corporate; or
(c) that Bidder or any of its related bodies corporate has actually
recovered an amount from a person other than Target.
20.4 No claims for consequential loss
Neither party will be liable to the other party in any circumstances for
any indirect, special or consequential loss or damage, including but not
limited to loss of revenue, loss of production, loss of product, loss of
contract or loss of profit howsoever arising and whether in an action in
contract, tort (including without limitation, negligence), in equity,
product liability, under statute, or on any other basis.
20.5 Time limit on claim
Bidder must not make any Claim under this document, including for a
breach of Warranty or under a Target Indemnity, unless the Claim has
been notified to Target within 24 months from Completion of the
Transaction.
20.6 Minimum amount of Claim
Bidder must not make any Claim for breach of a Target Warranty or under
a Target Indemnity unless the amount of the Claim exceeds A$250,000 in
aggregate in respect of all Claims.
20.7 Maximum amount of Claim
Target`s total liability for Loss for breach of a Target Warranty and
under a Target Indemnity is limited in aggregate for any and all Claims
to A$105,000,000.
21. GUARANTEE BY BIDDER GUARANTOR
21.1 Definitions in guarantee
The following definitions apply in this clause 21 and in Schedule 8.
Guaranteed Money means all amounts (including damages) that are payable,
owing but not payable, or that otherwise remain unpaid by Bidder to
Target on any account at any time under or in connection with this
document, whether present or future, actual or contingent.
Guaranteed Obligations means the obligations of Bidder to pay the
Guaranteed Money and all its other obligations to Target (monetary or
non monetary, present or future, actual or contingent) under or in
connection with this document, including, without limitation,
obligations in relation to the Offer.
21.2 Obligations guaranteed
In consideration of Target entering into this document at the request of
Bidder Guarantor, Bidder Guarantor guarantees to Target the due and
punctual:
(a) (payment) payment by Bidder of the Guaranteed Money; and
(b) (performance) performance by Bidder of the Guaranteed Obligations.
21.3 Consequences of Bidder default
(a) (payment on demand) If Bidder defaults in the due and punctual payment
of any Guaranteed Money, Bidder Guarantor must pay that money on demand
to, or as directed by, Target.
(b) (costs on demand) If Bidder defaults in the due and punctual performance
of any Guaranteed Obligation, Bidder Guarantor:
(i) (costs) must indemnify Target and hold Target harmless against all
losses, liabilities and expenses (including legal expenses on a full
indemnity basis) that Target incurs (directly or indirectly) as a result
of that default; and
(ii) (demand) must pay the amount of those losses, liabilities and expenses
on demand to, or as directed by, Target.
21.4 Provisions applying to this guarantee
The provisions set out in Schedule 8 apply to the guarantee given by
Bidder Guarantor in this clause 21.
21.5 Warranties of Bidder Guarantor
(a) Bidder Guarantor represents and warrants, and it is a condition of this
document that:
(i) Bidder Guarantor has sufficient cash to perform its obligations under
this document; and
(ii) Bidder Guarantor is not aware of any fact, event, act or omission that
would result in one or more of the Subscription Conditions Precedent or
the Conditions not being satisfied; and
(b) Bidder Guarantor acknowledges that Target has executed this document in
reliance on the representations and warranties in this clause.
21.6 Indemnity
In consideration of Target entering into this document at the request of
Bidder Guarantor, Bidder Guarantor (as primary obligor) must
unconditionally indemnify Target against, and must pay Target on demand
the amount of, any loss that Target may suffer because:
(a) (unenforceable) the Guaranteed Obligations are unenforceable;
(b) (unrecoverable) the Guaranteed Money is not recoverable from Bidder or
is repaid or restored after it has been recovered; or
(c) (Warranties inaccurate or misleading or deceptive) any of the Bidder
Warranties is untrue, incomplete or accurate, or is misleading or
deceptive, or likely to mislead or deceive,
including the amount of any Guaranteed Money (or any money which, if
recoverable, would have formed part of the Guaranteed Money) that is not
or may not be recoverable from Bidder.
21.7 Application of the indemnity
The indemnity in clause 21.6 extends to any money that is not
recoverable:
(a) (incapacity) because of any legal limitation, disability or incapacity
of or affecting Bidder; or
(b) (unenforceable) because any transaction relating to that money was void,
illegal, voidable or unenforceable.
21.8 Expiry of Guarantee
Notwithstanding anything to the contrary contained in this document,
Bidder Guarantor will have no liability under this clause 21 or in
Schedule 8 following payment by Bidder or Bidder Guarantor of the
Subscription Price.
22. TERMINATION
22.1 Termination for material breach
A party (the Terminating Party) may terminate this document at any time
by notice to the other party if:
(a) the other party is in breach of any clause of this document, which
breach is material in the context of the Transaction;
(b) the Terminating Party has given notice to the other party setting out
full details of the material breach and stating an intention to
terminate this document; and
(c) the material breach has continued to exist for 5 Business Days from the
time such notice was given.
For the avoidance of doubt, this clause 22.1 does not apply to the non-
satisfaction of any Subscription Conditions Precedent (so long as the
applicable party complies with clause 3.3), which is dealt with in
clause
22.2.
22.2 Termination for non-satisfaction of Subscription Conditions Precedent
If either of the following occurs:
(a) the Subscription Conditions Precedent are not satisfied or waived under
clause 3.2 on or before the End Date; or
(b) both parties (both acting reasonably and in good faith) agree that it is
evident that any of the Subscription Conditions Precedent will not be
satisfied on or before the End Date,
then either party may terminate this document by giving written notice
to the other party at any time on or before the fifth Business Day after
the End Date.
22.3 Other termination rights
(a) Target may terminate this document at any time by notice to Bidder if
Bidder fails to lodge the bidder`s statement with ASIC or dispatch
offers under the Bid to holders of Target Shares in accordance with the
Corporations Act, or withdraws the Offer for any reason including non-
satisfaction of a Condition.
(b) Bidder may terminate this document at any time by notice to Target if
Target recommends a Competing Proposal.
22.4 Effect of termination
Termination of this document will not affect:
(a) clauses 1, 19, 20, 21, 23 and 25, and this clause 22, which survive
termination; and
(b) any liability of a party arising under or for breach of this document
prior to its termination.
23. NOTICES
(a) A notice, consent or other communication under this document is only
effective if it is in writing, signed and either left at the addressee`s
address or sent to the addressee by mail or fax. If it is sent by mail,
it is taken to have been received 3 working days after it is posted. If
it is sent by fax, it is taken to have been received when the addressee
actually receives it in full and in legible form.
(b) A person`s address and fax number are those set out below, or as the
person notifies the sender:
Gold One International Limited
Address: Level 3
100 Mount Street
NORTH SYDNEY NSW 2060
Fax number: +61 2 9963 6499
Attention: Company Secretary
With a copy to:
Address: 1st Floor
45 Empire Road
PARKTOWN
GAUTENG 2193
Fax number: +27 11 726 1087
Attention: Managing Director
BCX Gold Investment Holdings Ltd
Address: C/- Mallesons Stephen Jaques
Level 61, Governor Phillip Tower
1 Farrer Place
SYDNEY NSW 2000
Fax number: +61 2 9296 3999
Attention: M&A Practice Team Leader
With a copy to
Address: C/- Suite 2111 Oriental Plaza
1 Chang An Avenue
Beijing, China 100738
Fax number: +86 10 85151866
Attention: Alex Yao
Baiyin Non-Ferrous Group Co. Ltd
Address: C/- Mallesons Stephen Jaques
Level 61, Governor Phillip Tower
1 Farrer Place
SYDNEY NSW 2000
Fax number: +61 2 9296 3999
Attention: M&A Practice Team Leader
With a copy to
Address: 96 Youhao Road,
Baiyin District, Gansu, China
Fax number: +86 10 85151866
Attention: Liao Ming
24. AMENDMENT AND ASSIGNMENT
24.1 Amendment
This document can only be amended or replaced by another document executed by
the parties.
24.2 Assignment
A party may only assign, declare a trust over or otherwise deal with its
rights under this document with the written consent of the other party.
25. GENERAL
25.1 Application
(a) Subject to paragraph (b), any dispute or difference between Target and
Bidder arising out of or in connection with this document, including any
dispute or difference as to the formation, validity, existence or
termination of this document (Dispute), must be resolved by:
(i) to the extent the Dispute can be heard and is within the jurisdiction of
the Takeovers Panel, the relevant proceedings of the Takeovers Panel;
and
(ii) in any other case, arbitration in accordance with the rules of the
Australian Centre for International Commercial Arbitration (ACICA
Arbitration Rules) (which are deemed to be incorporated by reference
into this clause).
(b) If the Dispute is to be resolved by arbitration under clause
25.1(a)(ii), the seat of the arbitration will be Perth, Western
Australia, and the language of the arbitration will be English.
25.2 Model Law applies
The UNCITRAL Model Law on International Commercial Arbitration as
adopted by the International Arbitration Act 1974 shall apply to any
arbitration conducted under clause 25.1(a)(ii). Except to the extent
that they are inconsistent with the ACICA Arbitration Rules the optional
provisions in Division 3 of the International Arbitration Act 1974 shall
apply to any arbitration conducted under clause 25.1(a)(ii).
25.3 Continuance of performance
Despite the existence of a Dispute, the parties must continue to perform
their respective obligations under this document.
25.4 Governing law
(a) This document is governed by the law of Western Australia.
(b) Subject to clause 25.1, each party submits to the jurisdiction of the
courts of Western Australia, and any court that may hear appeals from
any of those courts, for any proceedings in connection with this
document.
25.5 Serving documents
Without preventing any other method of service, any document required to
be served for any action, Dispute, claim, or any other proceeding in
connection with this document may be served on a party by being
delivered to or left at that party`s address as set out in clause 23(b).
Bidder appoints Mallesons Stephen Jaques of Level 61, Governor Phillip
Tower, 1 Farrer Place, Sydney, NSW, 2000 as its agent to receive service
of process for any proceedings in connection with this document. Bidder
undertakes to maintain this appointment (or another appointment notified
to Target in writing and reasonably acceptable to Target) until the end
of the period being 24 months from Completion of the Transaction, and
agrees that any such process served on that person is taken to be served
on it. Any process served on Bidder must be copied to Bidder at the
address referred to in clause 23(b).
25.6 Liability for expenses
Each party must pay its own expenses incurred in negotiating, executing,
stamping and registering this document.
25.7 Operation of this document
(a) This document contains the entire agreement between the parties about
its subject matter other than the Confidentiality Agreement. Any
previous understanding, agreement, representation or warranty relating
to that subject matter is replaced by this document and has no further
effect.
(b) Any provision of this document which is unenforceable or partly
unenforceable is, where possible, to be severed to the extent necessary
to make this document enforceable, unless this would materially change
the intended effect of this document.
25.8 GST on claims
(a) Words defined in A New Tax System (Goods and Services Tax) Act 1999
(Cth) have the same meaning in this clause.
(b) If a party provides a payment for or any satisfaction of a claim or a
right to claim under or in connection with this document (for example,
for a breach of any warranty or under an indemnity) that gives rise to
a liability for GST, the provider must pay, and indemnify the recipient
on demand against, the amount of that GST.
(c) If a party has a claim under or in connection with this document for a
cost on which that party must pay an amount for GST, the claim is for
the cost plus the amount for GST (except any amount for GST for which
that party is entitled to an input tax credit).
25.9 Counterparts
This document may be executed in counterparts.
Schedule 1: DETAILS OF CONSORTIUM OF INVESTORS
(For the release with pictures and schematics, please refer to the
Company`s website: www.gold1.co.za)
Member Shareholders Beneficia Consortium Voting
l Owner Ownership Control
Baiyin CITIC Guoan Governmen 60% 60%
41.1% t of
People`s
Gansu Republic
Provincial of China
State Assets
Commission39.
4%
Gansu Xinye
State Asset
Administratio
n Company
7.3%
Xinda Asset
Management
6.8%
CITIC Group
3.7%
Dongfang
Asset
Management Co
0.80%
Huarong Asset
Management Co
0.38%
Gansu
Economic
Cooperation
Co 0.36%
Changcheng
Asset
Management Co
0.14%
CAD Fund China Governmen 30% 30%
Development t of
Bank People`s
Republic
of China
Long March Long March Alex Yao 10% on 10%
Capital Capital 50% behalf of
(China) Limited Clement Chang Xin
Kwong 50% Element
Developmen
t LLP
Schedule 2: APPLICATION FOR SUBSCRIPTION SHARES / ADJUSTMENT SUBSCRIPTION
SHARES
(Note: The appropriate wording will need to be chosen from the form below
depending on whether Bidder is applying for Tranche 1 or Tranche 2 of the
Base Subscription Shares and the Additional Subscription Shares on the
Subscription Completion Date or Adjustment Subscription Shares (if any) on
the Adjustment Subscription Completion Date.)
To: Gold One International Limited (Company)
Level 3
100 Mount Street
NORTH SYDNEY NSW 2060
Attention: Company Secretary
(date)
Dear Sirs
Application for (Subscription Shares / Adjustment Subscription Shares)
pursuant to the Transaction Implementation Agreement
BCX Gold Investment Holdings Ltd:
1. applies, and agrees to subscribe, for (Tranche 1 and Tranche 2 of the
Base Subscription Shares / (?) Additional Subscription Shares / the
Adjustment Subscription Shares); and
2. (agrees to pay the Subscription Price upon Subscription Completion),
in accordance with the Transaction Implementation Agreement between the
Company and BCX Gold Investment Holdings Ltd dated (date) May 2011
(Transaction Implementation Agreement); and
3. agrees to be bound by the terms of the constitution of the Company.
Capitalised terms which are used but not defined in this application have the
meaning given to them in the Transaction Implementation Agreement.
Yours faithfully
BCX Gold Investment Holdings Ltd
(insert execution panel)
Schedule: 3 AGREED BID TERMS
1. Offer Price
A$0.55 per Target Share.
2. Offer Period
The initial closing date of the Offer will be 21 September 2011.
3. Securities subject to the Offer
(a) The Offer will extend to all Target Shares that are issued before the
end of the Offer Period as a result of the exercise of Target Options and the
conversion of Target Convertible Bonds.
(b) Target Shareholders may accept the Offer for all or only some of their
Target Shares.
4. Announcement Date
Within 24 hours of signature of the Transaction Implementation Agreement
between Target and Bidder.
5. Conditions
The Offer and any contract resulting from acceptance of the Offer, must be
subject only to conditions substantially on the terms set out below.
(a) Target Shareholders` Resolution
The Target Shareholders` Resolution is approved by the requisite majority of
Target Shareholders during the Condition Period.
(b) Minimum acceptance condition
During the Condition Period, Bidder has an aggregate interest in at least 60%
(by number) of the Target Shares on issue at that time. For the purpose of
determining under this condition the aggregate interest held by Bidder as a
percentage of the Target Shares on issue at any relevant time, the following
are to be taken into account:
(i) in calculating the aggregate interest held by Bidder, the aggregate of
the following:
(A) the relevant interests obtained by Bidder as a result of acceptances
under the Offer;
(B) the Base Subscription Shares and the maximum possible number of
Additional Subscription Shares (being 188,679,245 Target Shares) that would
be issued to Bidder if Subscription Completion were to occur; and
(C) any other Target Shares which either Bidder, Bidder Guarantor or any
related body corporate of either of them has purchased or agreed to purchase
on or before the relevant time; and
(D) assuming:
(I) all Target Options held by any of Bidder, Bidder Guarantor or any
related body corporate of either of them at the relevant time (if any) were
exercised;
(II) all Target Convertible Bonds held by any of Bidder, Bidder Guarantor or
any related body corporate of either of them at the relevant time (if any)
were converted to Target Shares (at the conversion rate that would be
applicable at the day after the Subscription Completion Date and as
calculated in accordance with paragraph 5(b)(ii)(C)) subject, in any event,
to a maximum of 361,606 Target Shares per Target Convertible Bond; and
(ii) in calculating the total Target Shares on issue, assuming:
(A) the Base Subscription Shares and the maximum possible number of
Additional Subscription Shares (being 188,679,245 Target Shares) are issued;
(B) all Target Options on issue as at the relevant time were exercised;
(C) all Target Convertible Bonds on issue as at the relevant time were
converted to Target Shares (at the conversion rate that would be applicable
at the day after the Subscription Completion Date) subject, for the purpose
of this calculation, to the conversion rate as at the date of this document
being adjusted as a result of only the following events under the terms of
the Target Convertible Bonds (Bond Terms):
(I) the issue of the Subscription Shares, assuming the issue of the maximum
possible number of Additional Subscription Shares (being 188,679,245 Target
Shares) to Bidder (in accordance with condition 6(b)(vi) of the Bond Terms);
and
(II) a change of control (in accordance with condition 6(b)(x) of the Bond
Terms);
and which, in any event, such calculation is limited to a maximum of 361,606
Target Shares per Target Convertible Bond; and
(D) all Target Shares which, prior to the relevant time, have been agreed to
be issued in connection with any Target Project, are issued.
(c) Foreign investment approval
Bidder receives written notice issued by or on behalf of the Australian
Treasurer during the Condition Period stating that there are no objections
under the Australian Government`s foreign investment policy to the
acquisition by Bidder of up to a 100% interest in Target, such notice being
unconditional.
(d) No Prescribed Events
None of the following events happens during the Condition Period:
(i) Target converts all or any of its shares into a larger or smaller number
of shares;
(ii) Target or a subsidiary of Target resolves to reduce its share capital in
any way, except in the case of the Goliath Distribution In Specie if Target
elects to implement that distribution by way of a reduction in share capital;
(iii)Target or a subsidiary of Target:
(A) enters into a buy-back agreement; or
(B) resolves to approve the terms of a buy-back agreement under section
257C(1) or 257D(1) of the Corporations Act;
(iv) Target or a subsidiary of Target issues shares other than Target Shares
issued:
(A) under the terms of this document;
(B) under the terms of acquisition of any Target Projects in accordance with
clause 15.1; or
(C) as a result of exercise or conversion of Target Options or Target
Convertible Bonds, or grants an option over its shares, or agrees to make
such an issue or grant such an option;
(v) Target or a subsidiary of Target issues, or agrees to issue, convertible
notes;
(vi) Target or a subsidiary of Target disposes, or agrees to dispose, of the
whole, or a substantial part, of its business or property, except in the case
of the Goliath Transaction and Goliath Distribution In Specie;
(vii)Target or a subsidiary of Target charges, or agrees to charge,
the whole, or a substantial part, of its business or property;
(viii)Target or a subsidiary of Target resolves to be wound up;
(ix) a liquidator or provisional liquidator of Target or of a subsidiary of
Target is appointed;
(x) a court makes an order for the winding up of Target or of a subsidiary
of Target;
(xi) an administrator of Target, or of a subsidiary of Target, is appointed
under section 436A, 436B or 436C of the Corporations Act;
(xii)Target or a subsidiary of Target executes a deed of company arrangement;
(xiii)a receiver, or a receiver and manager, is appointed in relation to the
whole, or a substantial part, of the property of Target or of a subsidiary of
Target;
(xiv)Target or a subsidiary of Target adopts a new constitution or modifies
or repeals its constitution or a provision of it, except the amendments to
Target`s constitution proposed to be adopted at Target`s Annual General
Meeting;
(xv) Target or a subsidiary of Target enters into a Material Contract, other
than one contemplated by, or deemed necessary or desirable (by Target, acting
reasonably) in connection with, any Target Project undertaken in accordance
with clause 15.1;
(xvi)Target ceases to be admitted to the official list of ASX or JSE; or
(xvii)a provisional or final judicial manager under Chapter XV of the South
African Companies Act, 1973 or a business rescue practitioner under Chapter 6
of the South African Companies Act, 2008 is appointed for a South African
subsidiary of Target.
(e) Regulatory approvals
During the Condition Period, Bidder receives all Approvals which are required
by Law or by any Public Authority to permit:
(i) the Offer to be made to and accepted by Target Shareholders;
(ii) Bidder to acquire the Subscription Shares and the Adjustment Shares,and
those Approvals are on an unconditional basis and remain in force in all
respects and there is no notice or indication of intention to revoke,
suspend, restrict, modify or not renew those Approvals.
(f) Third party consents
During the Condition Period, any additional Approvals of a third party (not
covered under paragraph 5(e) above) to permit the Transaction and the
Adjustment Subscription to complete and the Offer to be made and accepted by
Target Shareholders are obtained on an unconditional basis. Those approvals
remain in force in all respects and there is no notice or indication of
intention to revoke, suspend, restrict, modify or not renew those approvals.
(g) Distributions
During the Condition Period, Target does not make or declare, or announce an
intention to make or declare, any distribution (whether by way of dividend,
capital reduction or otherwise and whether in cash or in specie), except for
the Goliath Distribution in Specie.
(h) No action by Public Authority adversely affecting Bid
During the Condition Period:
(i) there is not in effect any preliminary or final decision, order or
decree issued by a Public Authority; and
(ii) no application is made to any Public Authority (other than an
application by Bidder or a related body corporate of Bidder, an application
under section 657C or 657G of the Corporations Act, or an application
commenced by a person specified in section 659B(1) of the Corporations Act in
relation to the Offer), or action or investigation is announced, threatened
or commenced by a Public Authority,
in consequence of, or in connection with, the Transaction (other than a
determination by ASIC or the Takeovers Panel in exercise of the powers and
discretions conferred by the Corporations Act), and there is no change in law
which:
(iii)restrains, prohibits or impedes (or if granted could restrain, prohibit
or impede), or otherwise materially adversely impacts on, the making of the
Transaction or the completion of any transaction contemplated by the
Transaction or the rights of Bidder in respect of Target and the Target
Shares to be acquired under the Transaction and the potential Adjustment
Subscription; or
(iv) requires the divestiture by Bidder of any Target Shares, or the
divestiture of any assets of Target or a subsidiary of Target, Bidder or a
related body corporate of Bidder or otherwise.
(i) No persons exercising rights under certain agreements or instruments
During the Condition Period, no person exercises or purports to exercise, or
states an intention to exercise, any rights under any provision of any
Material Contract or other instrument to which a member of Target Group is a
party, or by or to which a member of Target Group or any of its assets may be
bound or be subject, which results, or could result, to an extent which is
material in the context of Target Group (taken as a whole), in:
(i) any monies borrowed by a member of Target Group being or becoming
repayable or being capable of being declared repayable immediately or earlier
than the repayment date stated in such agreement or other instrument;
(ii) any such agreement or other instrument being terminated or modified or
any action being taken or arising thereunder;
(iii)the interest of a member of Target Group in any firm, joint venture,
trust, corporation or other entity or asset (or any arrangements relating to
such interest) being terminated, sold or modified in a materially adverse
respect; or
(iv) the business of a member of Target Group with any other person being
adversely affected in a material respect,
as a result of the Subscription or the acquisition of Target Shares by
Bidder;
(j) No material acquisitions, disposals or new commitments
Except for any proposed transaction publicly announced by Target before the
date of this document or any Target Project undertaken in accordance with
clause 15.1, none of the following events occurs during the Condition Period:
(i) Target or a subsidiary of a Target acquires, offers to acquire or agrees
to acquire one or more companies, businesses or assets (or any interest in
one or more companies, businesses or assets) for an amount in aggregate
greater than 10% of Target`s net assets as stated in the balance sheet of
Target`s audited accounts for the financial year ended 31 December 2010 or
makes an announcement in relation to such an acquisition, offer or agreement;
(ii) a member of Target Group disposes of, offers to dispose of or agrees to
dispose of one or more companies, businesses or assets (or any interest in
one or more companies, businesses or assets) for an amount, or in respect of
which the book value (as recorded in Target`s statement of financial position
as at 31 December 2010) is, in aggregate, greater than 10% of Target`s net
assets as stated in the balance sheet of Target`s audited accounts for the
financial year ended 31 December 2010 or makes an announcement in relation to
such a disposition, offer or agreement;
(iii)a member of Target Group enters into, or offers to enter into or agrees
to enter into, any agreement, joint venture, partnership, management
agreement or commitment which would require expenditure, or the foregoing of
revenue, by Target and/or its subsidiaries of an amount which is, in
aggregate, more than 10% of Target`s net assets as stated in the balance
sheet of Target`s audited accounts for the financial year ended 31 December
2010, other than in the ordinary course of business, or makes an announcement
in relation to such an entry, offer or agreement; or
(iv) a member of Target Group becomes a party to any agreement, joint
venture, partnership, management agreement or commitment with a Related Party
(or an existing agreement, joint venture, partnership, management agreement
or commitment with a Related Party is amended or extended) under which a
member of Target Group gives or proposes to give to the Related Party a
financial benefit of an amount which is (in aggregate) more than A$50,000.
(k) No material adverse change
No change, effect, event, occurrence, state of facts or development (each an
Event) occurs during the Condition Period which has, or would be reasonably
expected to have, a material adverse impact on the trading or financial
condition of Target, and including any of the following:
(i) two or more members of the Target Executive Team or Neal Froneman ceases
to be in full time employment of Target;
(ii) (index decline) the S&P ASX 200 Index falls to a level that is 80% or
less of the level as at the close of trading on the Business Day immediately
before the date of this document and remains at or below that 80% level for
at least 15 consecutive Business Days;
(iii)(gold price decline) the London bullion price on the London Metal
Exchange falls to a level that is 80% or less of the price of gold in
US$/troy ounces as determined by Members of The London Gold Market Fixing
Limited at 3pm London local time on the Business Day immediately before the
date of this document and remains at or below that 80% level for at least 15
consecutive Business Days;
(iv) a natural disaster materially and directly affecting the operations of
Target Group for a period of at least 15 Business Days;
(v) a change in any applicable laws or regulations which would result in a
material impairment of the cost structure of Target Group;
but, for the avoidance of doubt, does not include any Event:
(i) required or specifically permitted by this document; or
(ii) that occurs with the written consent of Bidder.
(l) Independent Expert`s conclusion
During the Condition Period, Independent Expert concludes in the Independent
Expert`s Report that the Transaction and the potential Adjustment
Subscription is fair and reasonable to Target Shareholders and maintains that
conclusion.
(m) Directors Recommendation
During the Condition Period, Target Board does not withdraw or change the
Initial Recommendation.
(n) Other persons acquiring a relevant interest
During the Condition Period, no person or persons (other than any associate
of Bidder) acquires a relevant interest in 20% or more of the Target Shares.
(o) (Target Projects - share consideration) During the Condition Period and
in relation to a Target Project, Target does not enter into binding
arrangements which involve the issue or, or agreement to issue, Target Shares
at an issue price lower than the Offer Price, provided that this Condition
5(o) does not apply to any arrangements in respect of the Goliath
Transaction.
(p) (Target Projects - size) During the Condition Period and in relation to
a Target Project, Target does not enter into binding arrangements which
involve the aggregate consideration payable by Target for an individual
Target Project being more than 5% of the market capitalisation of Target
(determined by multiplying the total number of Target Shares then on issue by
the closing price of a Target Share on ASX) on the date Target enters into
binding arrangements in relation to that Target Project, provided that this
Condition 5(p) does not apply to any arrangements in respect of the Goliath
Transaction.
(q) (material breach) During the Condition Period, Target is not in material
breach of clause 9 or 10 of this document and Bidder does not terminate this
document pursuant to clause 22.1 as a result.
Schedule 4: TIMETABLE
Event Date
Joint announcement of Transaction Monday, 16 May 2011
Bidder to apply for FIRB Approval Tuesday, 17 May 2011
Bidder to apply for all PRC Approvals Monday, 30 May 2011
and Competition Authorities Approval
Bidder lodges bidder`s statement with Wednesday, 22 June 2011
ASIC and serves it on ASX and Target
Bidder dispatches bidder`s statement to
Target Shareholders
Target lodges target`s statement with
ASIC and serves it on ASX and Bidder
Target dispatches target`s statement to
Target Shareholders
Target dispatches Notice of Meeting
Offer Period commences Wednesday, 22 June 2011
Target Shareholders` Meeting held Friday, 22 July 2011
Initial closing date of Offer Wednesday, 21 September 2011
Subscription Completion Date Wednesday, 28 September 2011
Schedule 5: CALCULATION OF NUMBER OF ADJUSTMENT SUBSCRIPTION SHARES
The number of Adjustment Subscription Shares is a number between 0 and
492,002,621, which must be calculated in accordance with this Schedule 5 on
the date two Business Days before the Adjustment Subscription Completion Date
(Adjustment Calculation Date).
For the avoidance of doubt, the number of Adjustment Subscription Shares must
never exceed 492,002,621, so that, if the calculation made on the Adjustment
Calculation Date in accordance with this Schedule 5 resulted in a number of
Adjustment Subscription Shares that was in excess of 492,002,621, the number
of Adjustment Subscription Shares would nevertheless be deemed to be
492,002,621.
1. Adjustment Subscription Share Formula
Number of Grossed-up Acquisition Cost / Target Production
Adjustment = * Production Shortfall
Subscription
Shares (pre-
reduction
event
calculation)
Blended Entry Price
Each component of this formula to be calculated on the Adjustment Calculation
Date is set out below. The final number of Adjustment Subscription Shares is
subject to the reduction set out in paragraph Error! Reference source not
found..
2. Grossed-Up Acquisition Cost
Grossed-up Acquisition Cost is calculated as follows:
Grossed-up Total Acquisition Cost
Acquisition =
Cost
Bidder`s Fully Diluted Percentage
Shareholding
2.1. Bidder`s Fully Diluted Percentage Shareholding
For the purpose of determining the aggregate interest held by Bidder as a
percentage of the Target Shares on issue on a fully diluted basis on
Completion of the Transaction (Bidder`s Fully Diluted Percentage
Shareholding), the following are to be taken into account:
(Total Target Shares Acquired) in calculating the total number of Target
Shares held by Bidder on a fully diluted basis, the aggregate of the
following number of Target Shares (Total Target Shares Acquired):
all Target Shares acquired by Bidder under the Subscription and as a result
of acceptances under the Offer (which, for the avoidance of doubt, must have
taken place by Completion of the Transaction);
any other Target Shares which either Bidder, Bidder Guarantor or any related
body corporate of either of them holds or agrees to purchase on or before
Completion of the Transaction; and
assuming:
all Target Options held, or agreed to be purchased, by any of Bidder, Bidder
Guarantor or any related body corporate of either of them on Completion of
the Transaction (if any) were exercised; and
all Target Convertible Bonds held, or agreed to be purchased, by any of
Bidder, Bidder Guarantor or any related body corporate of either of them on
Completion of the Transaction (if any) were converted to Target Shares (at
the conversion rate applicable on the day after the Subscription Completion
Date and as calculated in accordance with paragraph (b)(ii)) subject, in any
event, to a maximum of 361,606 Target Shares per Target Convertible Bond;
(total Target Shares on issue) in calculating the total Target Shares on
issue on a fully diluted basis on Completion of the Transaction, assuming:
all Target Options on issue as at Completion of the Transaction were
exercised;
all Target Convertible Bonds on issue as at Completion of the Transaction
were converted to Target Shares (at the conversion rate applicable on the day
after the Subscription Completion Date) subject, for the purpose of this
calculation, to the conversion rate as at the date of this document being
adjusted as a result of only the following events under the terms of the
Target Convertible Bonds (Bond Terms):
the issue of the Subscription Shares (in accordance with condition 6(b)(vi)
of the Bond Terms); and
a change of control (in accordance with condition 6(b)(x) of the Bond Terms);
and which, in any event, such calculation is limited to a maximum of 361,606
Target Shares per Target Convertible Bond; and
all Target Shares which, prior to Completion of the Transaction, have been
agreed to be issued in connection with any Target Project, are issued.
2.2 Total Acquisition Cost
Total Acquisition Cost is calculated by aggregating the following amounts in
Australian dollars:
the cost of purchasing all Target Shares described under paragraphs (a)(i)
and (a)(ii);
the cost of purchasing all the Target Options and Target Convertible Bonds
described under paragraph (a)(iii); and
the cost of exercising all the Target Options (ie the aggregate exercise
price) and converting all the Target Convertible Bonds (ie the aggregate
conversion price) described under paragraph (a)(iii).
3. Target Production
Target Production means 120,000 ounces, being the number of ounces of annual
gold production of Target targeted for the financial year ended 31 December
2011.
4. Production Shortfall
Production Shortfall means the number of ounces that is the difference
between Target Production and Actual Production, provided that, regardless of
the amount of the Actual Production, the amount of the Production Shortfall
for the purpose of this calculation must not exceed 36,000.
4.1 Target Production
Target Production has the meaning set out in paragraph 3.
4.2 Actual Production
Actual Production means the actual number of ounces of annual gold production
of Target for the financial year ended 31 December 2011 (excluding the number
of ounces produced under any Target Project that is not directly attributable
to Target`s existing operations as at the date of this document), as set out
in the financial results of Target published and announced for that financial
year.
5. Blended Entry Price
Blended Entry Price is calculated as follows:
Blended Total Acquisition Cost
Entry =
Price
Total Target Shares Acquired
5.1 Total Acquisition Cost
Total Acquisition Cost has the meaning set out in paragraph 2.2.
5.2 Total Target Shares Acquired
Total Target Shares Acquired has the meaning set out in paragraph 2.1(a).
6. Reduction for Events Outside of Target`s Control
6.1 Reduction
To the extent that the Production Shortfall is attributable, in whole or in
part, to one or more of the following (Events Outside of Target`s Control):
(a) a force majeure event;
(b) without limiting paragraph 6.1(a) above, any natural disasters or acts
of terrorism;
(c) without limiting paragraphs 6.1(a) and 6.1(b) above, a prolonged period
of interruption in the level of supply of electricity, other power sources,
water, or any other critical factor of production for any reason outside of
Target`s immediate control or beyond reasonable means of prevention;
(d) a prolonged employee or contractor strike for any reason outside of
Target`s immediate control or beyond reasonable means of prevention;
(e) any alteration to the mine plans or business plans of Target, or any
other act or thing in connection with Target`s operations, made at the
request of, or with the fully informed consent of, Bidder; or
(f) any other event that is not within the reasonable control of Target,
then the number of Adjustment Subscription Shares (pre-reduction event
calculation) calculated under paragraph 1 will be reduced by the following
formula:
Number of = Number of * (1 - Event
Adjustment Adjustment Factor)
Subscription Subscription
Shares Shares (pre-
reduction event
calculation)
Where:
Number of Adjustment Subscription Shares (pre-reduction event calculation)
means the number of Adjustment Subscription Shares calculated under paragraph
0.
Event Factor means the extent to which the Production Shortfall is solely or
predominantly attributable, in whole or in part, to one or more of the Events
Outside of Target`s Control, expressed as a percentage that is to be agreed
between Bidder and Target (acting reasonably).
6.2 Event Factor dispute
(a) If there is a dispute between Bidder and Target as to the value of the
Event Factor, the dispute must be referred to an expert (Appointed Expert)
being:
(i) a person agreed between the parties, being an independent chartered
accountant with not less than 10 years experience as a practising chartered
accountant in private practice in Australia, as agreed between Bidder and
Target; or
(ii) failing agreement between Bidder and Target under paragraph
6.2(a)(i) within two Business Days of a party seeking that agreement, a
person nominated at the request of Bidder and Target by the President of the
Institute of Arbitrators and Mediators Australia.
(b)Bidder and Target must instruct the Appointed Expert to determine the
value of the Event Factor within 10 Business Days.
(c)In determining the dispute, the Appointed Expert will act as an expert and
not an arbitrator.
(d)The determination of the Appointed Expert will, in the absence of manifest
error, be final and binding on Bidder and Target.
(e)The Appointed Expert`s fees will be borne equally by both parties, unless
the Appointed Expert determines otherwise.
WORKED EXAMPLE
The following worked example calculates the number of Adjustment Subscription
Shares assuming the following inputs are true on the Adjustment Calculation
Date:
Input Unit Value
Production Target Ounces 120,000
Production Shortfall Ounces 20,000
Total Target Shares Acquired Target 893,000,000
Shares
Total Target Shares on Issue Target 1,451,329,492
Shares
Total Acquisition Cost Australian A$432,046,213
Dollar
Event Factor Percentage 40%
For the purpose of displaying the calculated values in this worked example,
some of the figures in steps 1 to 4 below have been rounded. However, the
final calculation of the number of Adjustment Subscription Shares in this
worked example, as set out below, reflects the true number of Adjustment
Subscription Shares that would be calculated, based on the inputs set out
above and if there were no rounding limitations whatsoever.
Step 1
Bidder`s Fully = 893,000,000 = 61.53%
Diluted
Percentage
Shareholding
1,451,329,492
The total Target Shares on issue is the fully diluted number of Shares on
issue on a fully diluted basis, assuming that all convertible instruments are
converted to Target Shares in accordance with paragraph (b). Similarly, the
Total Target Shares Acquired is calculated on a fully diluted basis in
accordance with paragraph (a).
Step 2
Blended Entry = A$432,046,213 = A$0.4838
Price
893,000,000
The Total Acquisition Cost should be calculated in accordance with paragraph
0.
Step 3
Grossed-Up = A$432,046,213 = A$702,174,032
Acquisition Cost
61.53%
Step 4
Number of = A$702,174,032 / = 241,888,249
Adjustment 120,000 * 20,000
Subscription
Shares (pre-
reduction event
calculation)
$0.4838
Step 5
Number of = 241,888,249 * (1 - = 145,132,949
Adjustment 40%)
Subscription
Shares
The Event Factor used for this worked example is 40%, meaning that, under
this worked example, Bidder and Target have agreed that the Production
Shortfall of 20,000 ounces was 40% attributable to one or more of the Events
Outside of Target`s Control.
Schedule 6: TARGET GROUP
Name of ABN/CAN Place of Register Issued Registe Date Directors
subsidiar /ARBN/ reg incorpor ed capita red of and
y no ation office l shareho format officers
(if not (if lders ion
Australi differen
a) t to
Target)
Gold One 1984/006179 South 665,01 Gold 18 Neal
Africa /06 Africa 7,784 One June Froneman
Limited Interna 1984 Christopher
tional Chadwick
Limited Izak Marais
Sandile
Zungu
Sandile
Swana
Pierre
Kruger
New 1996/002710 South 188,02 Gold 4 Neal
Kleinfont /07 Africa 8,148 One March Froneman
ein Africa 1996 Pierre
Mining Limited Kruger
Company
Limited
New 1998/007350 South 120 New 20 Neal
Kleinfont /07 Africa Kleinfo April Froneman
ein ntein 1998 Izak Marais
Goldmine Mining Pierre
(Pty) Ltd Company Kruger
Limited
New 1992/005188 South 1 New 9 Neal
Kleinfont /07 Africa Kleinfo Septem Froneman
ein Gold ntein ber Izak Marais
Claims Goldmin 1992 Pierre
(Pty) Ltd e (Pty) Kruger
Ltd
Etendeka 2003/290 Namibia 3rd 100 Gold 11 Izak Marais
Prospecti Floor One April Pierre
ng and 244 Africa 2003 Kruger
Mining Independ Limited
Company ent
(Pty) Ltd Avenue,
Windhoek
Gold One NUIT Mozambiq Avenida 20,000 Gold 16 Izak Marais
Mozambiqu 400155951 ue Kenneth Metica One Februa Christopher
e Lda Kuanda ls Africa ry Chadwick
No. 592 Limited 2006 Pierre
CP. 1839 (97.5%) Kruger
Maputo New
Kleinfo
ntein
Mining
Company
Limited
(2.5%)
Twin 064 698 504 510 Gold 14 Mark
Hills One July Wheatley
Operation Interna 1994 Ken Winters
s (Pty) tional
Ltd Limited
Australia 091 097 675 10 Gold 5 Mark
n Silicon One Januar Wheatley
Operation Interna y 2000 Ken Winters
s (Pty) tional
Limited Limited
Schedule 7
TARGET EXECUTIVE TEAM
1. BACKGROUND
The following arrangements (Arrangements) have been agreed by the Target with
the Bidder and the Bidder`s Guarantor in relation to the compensation of the
Target Executives and management (Management).
The Arrangements are intended to ensure that key executives are retained by
Target notwithstanding the anticipated change of control of Target.
Retention of Management is a key consideration of the Bidder in determining
to proceed with the Transaction.
2. INTERPRETATION
2.1 Definitions
In addition to the definitions set out in clause 1.1 of this document, the
following definitions apply in this Schedule 7:
Bonus Amount has the meaning in paragraph 6.2(a).
Bonus Instalments has the meaning in paragraph 6.2(b).
Executive Offer Period means the period of one year starting from the
date which is two years from Completion of the Transaction.
Executive Offer Price means the Offer Price.
Executive Options means the Target Options held by an Executive as at the
date of this document.
Executive Vice Presidents means the persons from time to time appointed to
the position of executive vice president, such positions to be created on or
after the date of this document by Target at the initiative of the Chief
Executive Officer, Target Board or, if in existence at the time of such
creation, an executive appointments committee, and with the consent of each
of those persons or entities.
Target Executive Team means the persons holding a position in one the
following categories on or after the date of this document:
(a) Chief Executive Officer;
(b) Executive Vice Presidents; and
(c) Senior Vice Presidents.
and Executive means any one of those persons.
Remaining Executive Options has the meaning in paragraph 4.2.
Senior Vice Presidents means the persons holding one of the following
positions on or after the date of this document:
(d) Chief Financial Officer;
(e) Senior Vice President: RSA Operations;
(f) Senior Vice President: Projects and Exploration;
(g) Senior Vice President: Business Development; or
(h) Senior Vice President: General Counsel and Company Secretary,
and any other senior vice president positions created on or after the date of
this document by Target at the initiative of the Chief Executive Officer,
Target Board or, if in existence at the time of such creation, an executive
appointments committee, and with the consent of each of those persons or
entities.
2.2 Application
(a) This paragraph 2 and paragraphs, 1, 3, 4.1 and 9 operate from the date
of the document.
(b) Subject to paragraph 2.2(a), all other paragraphs of this Schedule 7 do
not operate unless and until each of the following occurs:
(i) the Bid has become unconditional and the Offer Period has subsequently
ended; and
(ii) Bidder, Bidder Guarantor and any related body corporate of either of
them being the registered holders of, in aggregate, at least 50.1% of the
total issued Target Shares.
3. IMPLEMENTATION OF THE ARRANGEMENTS
(a) The Target, Bidder and Bidder`s Guarantor acknowledge that the Target
Executives are not party to this document. However, Target, Bidder and the
Bidder`s Guarantor will use their respective reasonable endeavours to ensure
that the Target Executives compensation package will be implemented
materially in accordance with the principles expressed in this schedule, and
that both the principles set out here in and the final plan of implementation
will require the approval of the Target`s remuneration committee.
(b) The parties acknowledge and agree that the payments and incentives take
into account the fact that the roles and responsibilities of those executives
are expected to increase as a result of the further expansion of the Target
and the new projects that Target is expected to pursue, and may entail the
addition of new members of senior experience into the team of Target
Executives eligible to receive compensation under these arrangements.
(c) The parties agree and acknowledge that the addition of new members to
the team of Target Executives shall be made with the agreement of the Chief
Executive Officer, Target Board and an appointments committee, if any is
established.
(d) Subject to paragraph 3(e) below, the parties also agree that the plan
implementation may be drafted by and will be subject to the review and
guidance by a reputable third party executive compensation firm, which will
advise both the Target Board and the remuneration committee thereon and to
ensure that the provisions set forth herein are in line with or above
prevailing industry standards.
(e) Notwithstanding any other provision of this Schedule 7, the parties
agree that the retention bonus arrangements set out in clause 6 are in agreed
form and are not subject to further change or review. For avoidance of
doubt, those executives which have received or will receive any payments
pursuant to their existing service agreements or employment contracts in
respect of a event of change of control of the Target will not be eligible
for retention bonuses payable pursuant to clause 6.
4. TREATMENT OF EXECUTIVE OPTIONS
4.1 Exercise of Executive Options for acceptance into Bid
(a) Each party acknowledges that the Executive Options may be exercised
during the Offer Period.
(b) Subject to the Listing Rules, Corporations Act and any other applicable
Law, during the Offer Period, Target agrees to use its reasonable endeavours
to procure that each Executive:
(i) exercises no more than 50% of the Executive Options held by it; and
(ii) accepts into the Bid in respect of all Target Shares acquired through
the exercise of the Executive Options under paragraph 4.1(b)(i).
4.2 Treatment of Remaining Executive Options and Executive Restricted Shares
Subject to paragraph 4.2(b), Target agrees to use its reasonable endeavours
to procure that each Executive does not transfer, or otherwise dispose of:
(a) the balance of the Executive Options not exercised under paragraph
4.1(b)(i) (Remaining Executive Options); or
(b) any Target Shares acquired through the exercise of any of the Remaining
Executive Options (Restricted Executive Shares),
for a period of two years after Completion of the Transaction.
4.3 Offer for Remaining Executive Options and Executive Restricted Shares
Subject to obtaining any necessary regulatory or shareholder Approvals,
during the Executive Offer Period:
(a) to the extent the Executive holds any Remaining Executive Options:
(i) Bidder must offer to purchase all Remaining Executive Options held by
the Executive at a price being the difference between the Executive Offer
Price and the exercise price of each relevant Remaining Executive Option; or
(ii) Bidder must offer to pay the difference between the Executive Offer
Price and the exercise price of each relevant Remaining Executive Option in
consideration for the cancellation of all Remaining Executive Options held by
the Executive; and
(b) to the extent the Executive holds any Restricted Executive Shares:
(i) Bidder must offer to purchase all the Restricted Executive Shares held
by the Executive for the Executive Offer Price; or
(ii) Target must offer to buy-back the Restricted Executive Shares held by
the Executive for the Executive Offer Price.
(c) For the avoidance of doubt:
(i) this paragraph 4.3 applies to an Executive regardless of whether they
remain in the employment of Target at any time before or during the Executive
Offer Period; and
(ii) an Executive is not obliged to accept any of the offers set out in
paragraphs 4.3(a) and 4.3(b).
5. EXECUTIVE REMUNERATION AND TERMS OF EMPLOYMENT
5.1 Executive remuneration
Bidder and Target agree that Target will, as soon as practicable, remunerate
each Executive:
(a) at a level the Bidder and Target determine (both in consultation and
acting reasonably) is at or above industry standards relevant to Target from
time to time with reference to the relevant peer group; and
(b) despite paragraph 5.1(a), at a level that is no less than the current
remuneration being provided to each Executive as at the date of this
document.
5.2 Non-solicitation and restraint provisions
Bidder and Target agree to use their reasonable endeavours to negotiate with
each Executive appropriate non-solicitation and restraint terms (which
includes, for the avoidance of doubt, non-competition terms), which will be
incorporated into the current terms of employment of each Executive.
6. RETENTION BONUS PAYMENTS
6.1 Offer of bonus arrangements
Bidder and Target agree that Target will, as soon as practicable, offer bonus
arrangements on the terms set out in paragraph 6.2, in consideration of the
increased responsibility of each Executive and as an incentive for each
Executive to stay within the employment of Target.
6.2 Terms of bonus arrangements
(a) Bonus Amount
The total amount of the bonus to be paid to each Executive is as follows
(Bonus Amount):
(i) for the Chief Executive Officer, the equivalent of two years` salary at
the rate set out in the current employment agreement of the Chief Executive
Officer (as varied in writing), plus an additional 25% of that accumulated
amount; and
(ii) for each other Executive, the equivalent of one and a half years` salary
at the rate set out in the current employment agreement of the relevant
Executive (as varied in writing), plus an additional 25% of that accumulated
amount.
(b) Timing of payment
The Bonus Amount for each Executive under paragraph 6.2(a) will be paid in
the following instalments (Bonus Instalments):
(i) within five Business Days after Completion of the Transaction - one
third of the Bonus Amount;
(ii) on the first anniversary of Completion of the Transaction - one third of
the Bonus Amount; and
(iii)on the second anniversary of Completion of the Transaction - one third
of the Bonus Amount.
(c) Bonus Entitlements on termination
An Executive will be entitled to be paid any outstanding Bonus Instalments in
the event of any of the following (each a Termination Event):
(i) in their entirety on termination by Target of an Executive without
cause;
(ii) in their entirety on an Executive being made redundant;
(iii)in their entirety on termination of an Executive resulting from a
material diminution in role;
(iv) on a pro rata basis on termination by an Executive on good terms;
(v) none on termination by Target of an Executive with cause.
7. ANNUAL BONUSES
The parties agree that annual bonuses, in line with those paid in the past
years of operation of the Target, will continued to be paid pursuant to the
satisfaction of key performance indicators (KPIs) as may be agreed between
the Bidder, Target and each Executive, subject to the approval of the
remuneration committee and the Board of Directors. Target may engage the
services of a reputable third party executive compensation firm (to be agreed
between the parties) to review and provide advice on what KPIs are
appropriate having regard to the relevant industry standards and the roles,
responsibilities and expertise of each Executive. These KPIs are
contemplated by the parties to include, if and where appropriate, performance
benchmarks in:
(a) Revenue,
(b) EBITDA,
(c) Unit production costs,
(d) Return on capital,
(e) Return on equity,
(f) Safety, and
(g) Production level,
among others.
8. PERFORMANCE RIGHTS
8.1 Issue of Performance Rights
(a) Bidder and Target agree to Target, as soon as practicable, issuing the
Performance Rights to the Target Executive Team on the terms set out in
paragraph 8.2.
(b) For avoidance of doubt:
(i) the parties agree that the mechanisms and definitions set forth herein
shall be subject to review and adjustment by a reputable third party
executive compensation firm, which will take into account considerations
including but not limited to taxation, feasibility, impact on accounting,
prevailing industry standards among others, and that the final plan shall be
subject to approval of the remuneration committee and Target Board; and
(ii) those members of the Executive Team participating as beneficiaries in
the Performance Rights scheme shall not be eligible under any other incentive
share scheme of Target.
8.2 Terms of Performance Rights
1. DEEMED BASE Total number of Target shares on issue
VALUE OF GOLD on the date of Completion of
ONE (BV) Transaction multiplied by the Offer
Price, plus the aggregate value of
any equity or equity-equivalent
(including any security instrument
which is convertible into equity)
raisings undertaken by the Target,
any equity raised through the exercise
of options or conversion of any
existing security into equity,
and the cost to the Bidder, if any, of
any financial assistance provided by
or guaranteed by the Bidder,
between the Completion of the
Transaction and the dates of each of
the First Calculation (see item 4) and
Second Calculation (see item 5), as
the case may be.
2. INCENTIVE VALUE The average market capitalisation of
(IV) Target (determined by multiplying the
total number of Target Shares then on
issue by the closing price of a Target
Share on ASX, or any other primary
exchange of listing of the Target at
the time of calculation) over the 60
trading days immediately before the
dates of each of the First Calculation
(see item 4) and the Second
Calculation (see item 5), as the case
may be.
3. PERFORMANCE Issue of the Performance Rights is
TRIGGERS only triggered if the Incentive Value
must exceed a value equal to a
compounded 12% increase over the Base
Value on the dates of each of the
First Calculation (see item 4) and
Second Calculation (see item 5), as
the case may be.
4. FIRST Calculation Date: The third
CALCULATION OF anniversary of Completion of the
NUMBER OF TARGET Transaction.
SHARES ISSUED ON Formula:
VESTING OF ALL
PERFORMANCE Where:
RIGHTS CTS = Number of Target Shares issued
on vesting of all Performance Rights
issued to the Target Executive Team.
IV = Incentive Value
BV = Base Value
TSP = 60-day volume weighted average
price of a Target Share up to the date
immediately before the Calculation
Date.
5. SECOND Calculation Date: The fifth
CALCULATION OF anniversary of Completion of the
NUMBER OF TARGET Transaction.
SHARES ISSUED Formula:
UNDER
PERFORMANCE Where:
RIGHTS CTS = Number of Target Shares issued
on vesting of all Performance Rights
issued to the Target Executive Team.
IV = Incentive Value
BV = Base Value
TSP = 60-day volume weighted average
price of a Target Share up to the date
immediately before the Calculation
Date.
6. PERFORMANCE Within 30 days after the date of the
RIGHTS VESTING First Calculation, and if applicable,
PERIOD the Second Calculation.
7. NUMBER OF TARGET If the number of Target Shares
SHARES TO BE calculated in accordance with the
ISSUED PURSUANT Second Calculation (see item 5)
TO SECOND exceeds the number of Target Shares
CALCULATION calculated in accordance with the
First Calculation (see item 4), then,
subject to all other performance
triggers being satisfied on the date
of the Second Calculation, Target
Executive Team will be issued
additional Target Shares equal to the
difference in the calculations
described above.
8. APPORTIONMENT Subject to the final approval of the
remuneration committee, the number of
Target Shares resulting from the
vesting of all Performance Rights to
be issued to the Target Executive Team
will be apportioned to each category
in the following manner:
Chief Executive Officer - 25%;
Executive Vice Presidents - 65%; and
Senior Vice Presidents - 10%.
To the extent there is more than one
person within each category set out
above, the Target Shares are to be
apportioned to the Executives within
that category based on the:
remuneration level; and
length of service,
of that Executive in comparison to the
other Executives within that category,
save that each Executive within the
category of Senior Vice Presidents is
entitled to a maximum portion of 2% of
the total Target Shares. If there are
less than five Executives within the
category of Senior Vice Presidents at
the time of apportionment, then the
difference between 10% of the total
Target Shares and the aggregate
maximum entitlement of those
Executives will be apportioned evenly
between the categories of the Chief
Executive Officer and the Executive
Vice Presidents.
9. TERMINATION Performance Rights will vest for an
Executive at a time before the dates
of each of the First Calculation (see
item 4) and Second Calculation (see
item 5), as the case may be, in the
event of any of the following (each a
Termination Event):
in their entirety on termination by
Target of an Executive without cause;
on a pro rata basis on an Executive
being made redundant;
on a pro rata basis on termination of
an Executive resulting from a material
diminution in role;
on a pro rata basis on termination by
an Executive on good terms;
not at all on termination of an
Executive for cause.
If a Termination Event occurs in
relation to an Executive:
the Performance Triggers set out in
item 3 will be calculated from the
date immediately before the date of
the Termination Event, with the
Incentive Value in item 2 being
calculated with reference to that
date; and
if the Performance Triggers are met,
the calculation of the number of
Target Shares to be converted from the
Performance Rights (set out in items
4, 5 and 7, as the case may be), and
the resulting apportionment (set out
in item 8) will be calculated with
reference to the date of the
Termination Event for that Executive.
For the avoidance of doubt, all other
Executives will have their Performance
Right entitlements calculated in the
manner set out in items 4, 5 and 7 (as
the case may be) as if the Executive
subject to the Termination Event was
not subject to such an event.
9. GENERAL
(a) Each party agrees to use their reasonable endeavours to perform the
obligations set out in this Schedule 7.
(b) Notwithstanding anything else in this Schedule 7, the performance of the
obligations set out in this Schedule 7 is subject to any Approvals required
under the Listing Rules, the Corporations Act and any other applicable Law,
including the approval of Target Shareholders.
(c) Each party acknowledges and agrees that, in determining how to deal with
any Remaining Executive Options and Restrictive Executive Shares in the
manner set out in paragraph 4.3, the parties will have regard to timing
considerations and the cost of complying with any legal and regulatory
requirements.
(d) Each party acknowledges and agrees that, to the extent an Executive
requests for the exercise period of their Remaining Executive Option to be
extended so that it is not required to exercise any of those options in order
to comply with paragraph 4.2, the parties will use their reasonable
endeavours to procure a waiver from ASX so that the relevant exercise period
can be extended.
Schedule 8
(Clause 21)
PROVISIONS APPLYING TO GUARANTEE BY BIDDER GUARANTOR
1. Nature of obligations and enforcement
Bidder Guarantor`s obligations in this document:
(a) (principal obligations) are principal obligations, and not ancillary or
collateral to any other right or obligation; and
(b) (immediately enforceable) may be enforced against Bidder Guarantor
without Target first being required to:
(i) (remedies) exhaust any remedy it may have against Bidder; or
(ii) (securities) enforce any security it may hold relating to the Guaranteed
Obligations.
2. Preservation of Bidder Guarantor`s obligations
Bidder Guarantor`s obligations in this document are absolute, unconditional
and irrevocable. The liability of Bidder Guarantor under this document
extends to and is not affected by any circumstance, act or omission which,
but for this subclause, might otherwise affect it at law or in equity
including:
(a) (indulgence) the grant of any time, waiver or other indulgence or
concession;
(b) (discharge of others) the discharge or release of Bidder, Bidder
Guarantor or any other person;
(c) (other arrangements) any transaction or arrangement that may take place
between Target and Bidder, Bidder Guarantor or any other person;
(d) (despite Insolvency Event) the occurrence of an Insolvency Event in
relation to Bidder or Bidder Guarantor ;
(e) (despite collateral securities) Target or any other person dealing or
not dealing in any way with any other guarantee, encumbrance, document or
agreement;
(f) (despite other remedies) Target or any other person:
(i) (collateral securities) exercising or not exercising any other guarantee
or encumbrance or any right or remedy conferred on it by law or in equity or
by any document or agreement; or
(ii) (Bidder debt) not recovering any money owing by Bidder;
(g) (despite variation of obligations) any variation (including a variation
which increases, or extends the duration of, the Guaranteed Money or the
Guaranteed Obligations), replacement, extinguishment, unenforceability,
failure, loss, abandonment or transfer of any document or agreement relating
to the Guaranteed Obligations (including this document);
(h) (despite obligations being unenforceable) the Guaranteed Obligations or
the obligations of Bidder Guarantor or any other person under this document
or any other document or agreement relating to the Guaranteed Obligations or
this document (including any other guarantee or encumbrance) being or
becoming illegal, void, voidable, unenforceable or disclaimed by a liquidator
or trustee for creditors or in bankruptcy;
(i) (despite lack of notice) Target not giving Bidder Guarantor notice of
any default by Bidder or any other person;
(j) (despite non disclosure) Target not disclosing any information to Bidder
Guarantor;
(k) (information) any representation made or information given by Target to
Bidder Guarantor;
(l) (despite changed capacity) any change in the legal capacity, rights or
obligations of, or other circumstance related to, Bidder or Bidder Guarantor
;
(m) (despite incapacity) any legal limitation, disability, incapacity or
other circumstance related to Bidder or Bidder Guarantor;
(n) (despite irregularity) any invalidity or irregularity in the execution
of this document or any deficiency in the powers of Bidder or Bidder
Guarantor;
(o) (despite delay, error) any laches, acquiescence, delay, act, omission or
mistake on the part of, or suffered by, Target or any other person, in
relation to this document or any other guarantee, encumbrance, document or
agreement;
(p) (despite insolvency dividend) the receipt by Target or any other person
of any dividend or money after an Insolvency Event in relation to Bidder or
Bidder Guarantor ;
(q) (despite judgment against Bidder) any judgment or right which Target may
have or exercise against Bidder or Bidder Guarantor;
(r) (despite change in constitution) the amendment of the constitution,
trust deed or other constituent document of Bidder or Bidder Guarantor;
(s) (despite change in interest) if Bidder Guarantor is a director or
shareholder of Bidder, any change in that directorship or shareholding.
3. Continuity
This document is a continuing security, and remains in full force until the
Guaranteed Obligations have been irrevocably paid and performed in full
despite any transaction or other thing (including a settlement of account or
intervening payment).
4. Limitations on Bidder Guarantor`s rights
Until the Guaranteed Obligations have been irrevocably paid and performed in
full, Bidder Guarantor may not:
(a) (no benefit of securities) share in any guarantee, encumbrance or money
received or receivable by Target in relation to the Guaranteed Obligations,
or stand in the place of Target in relation to any guarantee, encumbrance or
right to receive money;
(b) (not claim indemnity from debtor) take any steps to enforce a right or
claim against Bidder relating to any money paid by Bidder Guarantor to Target
under this document;
(c) (waiver rights as surety) have or exercise any rights as surety in
competition with Target;
(d) (waive Bidder payments) receive, claim or have the benefit of any
payment (including a payment under a guarantee), distribution or encumbrance
from or on account of Bidder or;
(e) (no setoff) in reduction of its liability under this document, raise a
defence, set off or counterclaim available to itself, Bidder or a co-surety
or co-indemnifier against Target or claim a set off or make a counterclaim
against Target; or
(f) (waive equities) claim to be entitled by way of contribution, indemnity,
subrogation, marshalling or otherwise to the benefit of any agreement or
document to which Target is a party.
5. No marshalling
Target is not under any obligation to marshal or appropriate in favour of
Bidder Guarantor or to exercise, apply, perfect or recover any encumbrance
that Target holds at any time or any funds or property that Target may be
entitled to receive or have a claim on.
6. Proving debt after Insolvency Event
If Bidder is wound up or bankrupted, Bidder Guarantor irrevocably authorises
Target to:
(a) (Target may prove) prove for all money that Bidder Guarantor has paid
under this document; and
(b) (suspense account) retain and carry to a suspense account and
appropriate at Target`s discretion any dividends and other money received in
relation to the Guaranteed Money,
until the Guaranteed Obligations have been irrevocably paid and performed in
full. Target is not obliged to do this.
7. Application of money after Insolvency Event
If an Insolvency Event has occurred in relation to Bidder or Bidder
Guarantor, any amount paid by Bidder or Bidder Guarantor (as the case may be)
within the preceding 6 months (relevant payment) will only be applied against
any Guaranteed Obligations if:
(a) (Target determines finality) Target forms the opinion in good faith
(which will be conclusively binding on Bidder Guarantor) that it will not be
required to pay the relevant payment to any person under any law relating to
bankruptcy, winding up or the protection of creditors; or
(b) (court determines finality) a final judgment is given by a court of
competent jurisdiction in favour of Target that it is not required to pay the
relevant payment to any person under any law relating to bankruptcy, winding
up or the protection of creditors.
8. Reinstatement of creditor after Insolvency Event
If an amount is applied against any Guaranteed Obligations and Target forms
the opinion in good faith that it is obliged to pay the relevant payment to
any person under any law relating to bankruptcy, winding up or the protection
of creditors:
(a) (reinstatement) Target`s rights are to be reinstated and will be the
same in relation to that amount as if the application, or the payment or
transaction giving rise to it, had not been made;
(b) (restoration of security) Bidder Guarantor must immediately do anything
(including the signing of documents) required by Target to restore to Target
any guarantee or encumbrance to which it was entitled immediately before that
application or the payment or transaction giving rise to it; and
(c) (limited release) any discharge or release between Target and Bidder
Guarantor is subject to reinstatement of Target`s rights under this
subclause.
9. Target not liable
Target is not liable for any loss suffered by Bidder Guarantor as a direct or
indirect result of:
(a) (exercise of Target`s rights) Target`s exercise or attempted exercise
of, or failure to exercise, any of its rights contained in this document; or
(b) (collateral securities) any release or dealing with any other guarantee
or encumbrance (including any prejudice to or loss of Bidder Guarantor`s
rights of subrogation).
Schedule 9
(Clauses 1.1 and 19.5)
TARGET INDEMNITY EVENTS
1. Interpretation
In addition to the definitions set out in clause 1.1 of this document, the
following definitions apply in this Schedule 9:
Grinaker means Grinaker-LTA Mining Contracting, a business unit of Aveng
(Africa) Limited.
Grinaker Dispute means the dispute between Grinaker and New Kleinfontein
Goldmine (Proprietary) Limited, a wholly owned subsidiary of Target,
regarding a claim by Grinaker for payment of a sum of A$3.951 million under a
contract works agreement between the parties, such dispute being referred to
arbitration in August 2009.
2. Target Indemnity Events
The following events are Target Indemnity Events:
(a) (constitution of Goliath Gold) Goliath Gold`s constitution not complying
with all applicable Laws (including the Listing Rules and JSE Listings
Requirements), but only to the extent that such non-compliance results in a
direct, actual liability of Target Group (which, for the avoidance of doubt,
does not include Goliath Gold or any of its subsidiaries);
(b) (potential WWG claim) White Water Gold (Pty) Ltd (WWG) making a
successful claim for damages in relation to the potentially disputed
termination by Goliath Gold of a sale agreement dated 24 August 2005 between
WWG and Goliath Gold, but only to the extent that such a claim becomes a
direct, actual liability of Target Group (which, for the avoidance of doubt,
does not include Goliath Gold or any of its subsidiaries);
(c) (non-conversion of old order mining right) the non-conversion of the old
order mining right (DMR Ref: ML 15/2004) held by New Kleinfontein Goldmine
(Proprietary) Limited into a `new order` mining right in accordance with the
provisions of the South African Mineral and Petroleum Resources Development
Act, 2002 (MPRDA);
(d) (non-renewal of rights and permits) the non-renewal of the following
rights and permits:
(i) the prospecting right in respect of Wit Nigel over certain farms in the
districts of Nigel and Heidelberg (DMR Ref: GP (73) PR) (Wit Nigel
Prospecting Right) held by Goliath Gold, but only to the extent that such non-
renewal results in a direct, actual liability of Target Group (which, for the
avoidance of doubt, does not include Goliath Gold or any of its
subsidiaries);
(ii) the prospecting right (Registration Number: 239/2006 (PR)) in respect of
the Holfontein Project held by New Kleinfontein Goldmine (Proprietary)
Limited;
(iii)the prospecting right (Registration Number: 361/2006 (PR)) in respect of
the New Kleinfontein/Turnbridge Project held by New Kleinfontein Goldmine
(Proprietary) Limited;
(iv) the prospecting right (Registration Number: 50/2006 (PR)) in respect of
the Sub Nigel 4 & 5 Project held by Gold One Africa Limited;
(v) the exclusive prospecting licence 3377 (EPL 3377) in respect of the
Etendeka Project held by Etendeka Prospecting and Mining Company (Pty) Ltd;
and
(vi) the mining permit (DMR Ref: MP 02/2008) held by New Kleinfontein
Goldmine (Proprietary) Limited;
(e) (refusal of applications to register) the refusal of applications for
registration with the Mining and Petroleum Title Registration Office of the
following rights:
(i) the prospecting right in respect of the Sub-Nigel 8 Project (GP
30/5/1/1/2/260 PR) held by Gold One Africa Limited; and
(ii) the prospecting right in respect of the Ventersburg 4 Project (FS
30/5/1/1/2/865 (PR)) held by Gold One Africa Limited;
(f) (release of records refused) an application made by Target or any other
relevant member of Target Group for the release by Robert Gray of mining
records relating to previous mining on the area the subject of the Wit Nigel
Prospecting Right being refused by any competent court or tribunal;
(g) (Mining Concession 557C) Gold One Mozambique Limitada not procuring an
environmental management plan or land use permit, that complies with all
applicable Laws, for the mining concession granted to Gold One Mozambique
Limitada, being Mining Concession 557C;
(h) (Historically Disadvantaged Persons and Historically Disadvantaged South
Africans) all prospecting and mining rights subject to the MPRDA (which is to
be read with the Broad-Based Socio-Economic Empowerment Charter for the South
African Mining Industry, published in South African Government Gazette No.
26661 on 13 August 2004) not being held by "Historically Disadvantaged
Persons and/or Historically Disadvantaged South Africans" as required and in
accordance with that legislation;
(i) (environmental issues) it being determined that, prior to the time of:
(i) the relevant member of Target Group acquiring or occupying the
Properties (while being a member of Target Group); or
(ii) the Target acquiring a member of Target Group which, at that time, owned
or occupied any Properties,
any underground workings on Properties on the East Rand, and the previous
tailings facility of the Modder East Mine, resulted in any contamination, or
there had been migration of contamination from those Properties to other land
or to water;
(j) (Sub-Nigel mine) upon closure of the Sub-Nigel mine, Target is unable to
pump water from that mine;
(k) (Black Economic Empowerment arrangements) the Black Economic Empowerment
arrangements relating to Gold One Africa Limited do not become unconditional;
(l) (errors) any errors in descriptions contained in the following
documents:
(i) Sale Agreement dated 4 September 2006 between Gold One Africa Limited
and Micawber 400 (Proprietary) Limited; and
(ii) Articles of Association of Etendeka Prospecting and Mining Company (Pty)
Ltd;
(m) (Grinaker Dispute) Grinaker making a successful claim for an amount in
excess of A$10 million under the Grinaker Dispute, but only to the extent
that claim exceeds A$10 million; and
(n) (Modder East Stoppage Event) a stoppage of production for a period of 12
months or more during the 24 month period from Completion of the Transaction
resulting from:
(i) a rescission or termination of the right by the Target to mine Modder
East by the relevant Government Authority as a result of the failure to
convert Gold One Africa Limited`s Modder East old order mining right into a
new order mining right; and
(ii) a rescission or termination of the right by the Target to continue its
mining operations as a result of Modder East Mine not holding the required
environmental authorisations or approvals in respect of its mining
operations.
EXECUTED as an agreement.
Each person who executes this document on behalf of a party under a power of
attorney declares that he or she is not aware of any fact or circumstance
that might affect his or her authority to do so under that power of attorney.
EXECUTED by Gold One International Limited (ABN 35 094 265 746):
Signature of director Signature of director/secretary
Name: Neal Froneman Name: Chris Chadwick
EXECUTED by BCX Gold Investment Holdings Ltd (Co. No. 1615241):
Signature of director
Name: Clement Kwong
EXECUTED by Baiyin Non-Ferrous Group Co. Ltd. (Registration No.
620400000000010):
Signature of director Signature of director/secretary
Name: Li Peixing Name: Liao Ming
Date: 16/05/2011 07:17:01 Produced by the JSE SENS Department.
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