EXHIBIT 1
ACQUISITION AND FRAMEWORK AGREEMENT
between
GOLD FIELDS EXPLORATION B V
and
GOLD FIELDS FINLAND OY
and
NORTH AMERICAN PALLADIUM LIMITED
and
NORTH AMERICAN PALLADIUM FINLAND OY
Dated
24 March 2006
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND INTERPRETATION....................................................1
1.1 DEFINITIONS..............................................................1
1.2 INTERPRETATION..........................................................11
2. EFFECTIVENESS, TERM AND TERMINATION..............................................12
2.1 EFFECTIVENESS...........................................................12
2.2 LONG STOP DATE..........................................................12
2.3 TERMINATION.............................................................13
2.4 EFFECT UPON TERMINATION.................................................13
3. TRANSACTIONS ON AND AFTER EFFECTIVE DATE.........................................13
3.1 ORGANISATION OF GFAP....................................................13
3.2 APPROVAL OF [OMITTED]...................................................14
3.3 NO PARTNERSHIP..........................................................14
3.4 NAPL AND GFBV MAY NOT BIND..............................................14
4. REPRESENTATIONS AND WARRANTIES...................................................14
4.1 REPRESENTATIONS AND WARRANTIES..........................................14
4.2 SURVIVAL AND ACKNOWLEDGEMENT............................................14
5. GRANT AND EXERCISE OF OPTION.....................................................14
5.1 GRANT OF OPTION.........................................................14
5.2 REDUCTION OF INTEREST...................................................14
5.3 OPTION CONDITIONS.......................................................15
5.4 EXERCISE OF OPTION......................................................16
5.5 SHAREHOLDERS' AGREEMENT.................................................16
6. CONSIDERATION....................................................................16
7. MANAGEMENT AND FUNDING...........................................................16
7.1 MANAGEMENT AND MANAGING DIRECTOR........................................16
7.2 FUNDING OF APPROVED EARN-IN EXPENDITURES................................18
7.3 WITHDRAWAL BY THE NAPL GROUP............................................18
8. PROGRAMMES AND BUDGETS...........................................................19
8.1 WORK IN ACCORDANCE WITH APPROVED PROGRAMMES AND BUDGETS.................19
8.2 PROGRAMMES AND BUDGETS..................................................19
8.3 CONDUCT OF WORK.........................................................19
9. RESTRICTED MATTERS AND CORPORATE MATTERS.........................................19
9.1 APPROVAL OF GFAP RESTRICTED MATTERS.....................................19
9.2 CORPORATE MATTERS.......................................................20
9.3 APPROVAL OF GFF RESTRICTED MATTERS......................................20
10. COVENANTS........................................................................20
10.1 MAINTENANCE OF INTEREST IN NAPL.........................................20
10.2 CHANGES TO CAPITAL STRUCTURE............................................21
10.3 CHANGE OF NAMES.........................................................21
10.4 AREA OF INTEREST........................................................21
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10.5 OTHER ACTIVITIES AND INTEREST...........................................22
10.6 INDEMNIFICATION.........................................................22
10.7 REGISTRATION RIGHTS.....................................................23
11. MISCELLANEOUS....................................................................24
11.1 UNAVOIDABLE DELAYS......................................................24
11.2 NOTICES.................................................................24
11.3 FURTHER ASSURANCES, REGISTRATION, SECURITY..............................26
11.4 PAYMENT OF COSTS AND EXPENSES...........................................26
11.5 SEVERANCE...............................................................26
11.6 ENTIRE AGREEMENT; AMENDMENT AND WAIVER..................................26
11.7 CHANGE OF CONTROL.......................................................27
11.8 SUCCESSORS AND ASSIGNS..................................................27
11.9 THIRD PARTY RIGHTS......................................................27
11.10 CONFIDENTIALITY.........................................................28
11.11 COUNTERPARTS............................................................28
11.12 GOVERNING LAW...........................................................28
11.13 DISPUTE RESOLUTION......................................................28
11.14 TIME OF THE ESSENCE.....................................................28
SCHEDULE 1 REPRESENTATIONS AND WARRANTIES................................................31
SCHEDULE 2 FORM OF SHAREHOLDERS' AGREEMENT...............................................40
SCHEDULE 3 TRANSFER AND SUBSCRIPTION TERMS...............................................41
SCHEDULE 4 FORM OF MD AGREEMENT..........................................................42
SCHEDULE 5 LICENSES AND MINERAL RIGHTS...................................................43
SCHEDULE 6 EFFECT OF TERMINATION.........................................................44
SCHEDULE 7 TRANSFER OF PURCHASED INTEREST................................................45
SCHEDULE 8 ENCUMBRANCES..................................................................46
SCHEDULE 9 PROPERTY AGREEMENTS...........................................................47
SCHEDULE 10 FORM OF SERVICES AGREEMENT...................................................48
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THIS AGREEMENT dated 24 March 2006 between:
(1) GOLD FIELDS EXPLORATION B V ("GFBV"), a limited liability company,
registration no. 27123830, organised and existing under the laws of The
Netherlands;
(2) GOLD FIELDS FINLAND OY ("GFF"), a limited liability company,
registration no. 1606318-8, organised and existing under the laws of
Finland;
(3) NORTH AMERICAN PALLADIUM LTD. ("NAPL"), a corporation, registration no.
275053-8, organised and existing under the laws of Canada;
(4) NORTH AMERICAN PALLADIUM FINLAND OY ("NAPF"), a limited liability
company, registration no. 2005591-4, organised and existing under the
laws of Finland.
WHEREAS:
(A) NAPF is a wholly owned subsidiary of NAPL.
(B) 99.983% of the entire issued share capital of GFF is held by GFBV and
the remaining 0.017% by its Affiliate, Orogen (as hereinafter defined).
(C) GFAP (as hereinafter defined) is a wholly owned subsidiary of GFF.
(D) GFBV owns Interests in the APP Project Licenses through GFF and GFAP
and is developing the APP Project.
(E) GFBV, GFF, NAPL and NAPF wish to co-operate in the further development
of the APP Project.
(F) GFBV intends to grant to NAPL an option to acquire an Interest in the
APP Project through the acquisition of and subscription for ordinary
shares in the share capital of GFF, subject to and in accordance with
the terms of this Agreement.
NOW THIS AGREEMENT WITNESSES as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement the following words and expressions have the
following meanings:
"ACQUIROR" has the meaning set out in Clause 10.4.1;
"ADDITIONAL MINERAL INTERESTS" means any Interest acquired pursuant to
Clause 10.4;
"ADVANCE" means any advance granted by NAPF to GFAP,
without duplication, in accordance with the terms of
this Agreement;
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"AFFILIATE" means with respect to any person, any party which
controls, is controlled by or under common control
with such person, whether directly or indirectly;
"AGREEMENT" means this Acquisition and Framework Agreement;
"AMEX" means the American Stock Exchange;
"APP PROJECT" means the exploration and development project in
respect of the APP Property;
"APP PROJECT LICENSES" means the claims and mining leases as more
specifically set out in Schedule 5;
"APP PROPERTY" means the APP Project Licenses and any Additional
Mineral Interests, together with any renewals thereof
and any other form of substitute or successor title
thereto, including any Mineral Rights derived from
or into which any such licenses or interests may have
been or may hereafter be converted;
"APPLICABLE LAW" means any and all laws, statutes, regulations,
ordinances, rules, guidelines, policies, notices, orders
and directions or other requirements of any
Government Agency applicable to the Parties hereto,
the transactions contemplated hereby or the
properties and interests subject to the terms of this
Agreement or any of them;
"APPROVED EARN-IN means, in relation to the Option Period,
EXPENDITURE" Earn-in Expenditures incurred pursuant to
Programmes and Budgets implemented during
such period;
"AREA OF INTEREST" means the area within 25km of the perimeter of any
of the Mineral Rights comprising the APP Property;
"BUSINESS DAY" means a day (other than a Saturday or Sunday) when
clearing banks are open for business in Toronto,
Ontario, Helsinki, Finland and Denver, Colorado;
"CHANGE OF CONTROL" means one of the following (i) NAPF ceases to be a
wholly-owned subsidiary of NAPL, or (ii) NAPL
ceases to be a public listed company, or (iii) any of
the shareholders of NAPL (save for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Oil Company) or a third party
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acting individually or in concert with others
acquire control over more than 35% of the voting share
capital of NAPL and such acquisition has a Material
Adverse Effect;
"CLAIMS" means all losses, damages expenses, liabilities
(whether accrued, actual, contingent, latent or
otherwise), claims and demands of whatsoever nature
or kind, including legal and other professional fees
and costs;
"CONFIDENTIAL means any information or data of whatsoever
INFORMATION" kind and in whatever form, all copies thereto and
all information derived therefrom relating to the
APP Property and the activities of the Parties
thereon, except to the extent that any portion of
such information:
(a) is in or hereafter comes into the public
domain otherwise than by reason of breach of
an obligation of confidentiality under this
Agreement;
(b) is lawfully and in good faith obtained by a
Party hereto from a third party without breach of
an obligation or confidentiality under or
pursuant to this Agreement; or
(c) the disclosing Party believes in good faith is
required to be disclosed by Applicable Law;
"CONSIDERATION SHARES" means:
(a) in the event GFBV does not exercise the
back-in right set out in Clause 5.2, 9,227,033 NAPL
Shares; or
(b) in the event GFBV exercises the back-in right
set out in Clause 5.2, 7,381,636 NAPL
Shares;
"CORPORATE MATTERS" means any matter of a corporate nature, required to
be undertaken by the GFAP Board, pursuant to
Applicable Law, including, without limitation, the
preparation and approval of financial statements and
tax returns and matters not otherwise addressed in
this Agreement, the Services Agreement or the MD
Agreement;
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"EARN-IN in respect of the APP Property means from the
EXPENDITURES" Effective Date, the sum of all costs of acquisition
and maintenance and all exploration and
development expenditures and all other costs and
expenses of whatsoever kind or nature including,
without limitation, any and all expenses incurred
and/or the value of all technical and professional
consulting services provided by members of the
NAPL Group in the completion of the Feasibility
Study, the Re Scoping Study and Exploration
Programme and expenses of a capital nature,
incurred or chargeable by GFAP;
"EFFECTIVE DATE" means the fifth Business Day following the first date
on which each of the conditions set out in Clause 2.1
have been satisfied or waived, as applicable;
"ENCUMBRANCES" means any (other than by virtue of this Agreement)
interest or equity of any person (including any right
to acquire, option or right of pre-emption or first
offer or first refusal) or any mortgage, charge,
pledge, lien, assignment, hypothecation, security
interest, title retention or other security agreement
or arrangement or any restriction on use, voting,
transfer, receipt of income or exercise of any other
attribute of ownership with the exception of liens
arising by operation of law in the ordinary and usual
course of business;
"EXERCISE DATE" means the date of the exercise of the Option
in accordance with Clause 5.4;
"EXERCISE NOTICE" has the meaning set out in Clause 5.4.1;
"FEASIBILITY STUDY" means a report evaluating the commercial feasibility
of placing the APP Property, or any part thereof, into
commercial mining production at costs then current or
then reasonably estimated to be in effect over the life
of the mine, and which must:
(a) be prepared in accordance with mining
industry practices and standards in North
America in particular National Instrument
43-101 of the Canadian securities
administrators;
(b) include reviews of all relevant issues, a
statement of the reserves, a description of
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the nature and scale of any proposed operation,
an estimate of the construction and other costs
necessary to achieve commercial production and of
the operating costs, sustaining capital and
closure costs after the commencement thereof; and
(c) equal or exceed the criteria for a bankable
document, that is to say, a document in form
and substance appropriate for presentation to
a reputable bank or other financial
institution from which financing might be
sought for comparable projects;
"FIRST DEVELOPMENT PROPOSAL shall have the meaning assigned thereto in
AND BUDGET" Clause 5.3.4;
"GAAP" means, as applicable, generally accepted accounting
principles of Canada or the International
Financial Reporting Standards, in each case
consistently applied;
"GFAP" means Gold Fields Artic Platinum Oy, a limited
liability company, registration no. 1606745-3,
organised and existing under the laws of Finland;
"GFAP BOARD" means the board of directors of GFAP;
"GFAP BUSINESS" means (i) the investment by GFAP directly in the
APP Project, (ii) the implementation of the Re-Scoping
Study and Exploration Programme and approved Programmes
and Budgets, (iii) the preparation of the Feasibility
Study and the First Development Proposal and Budget,
(iv) all actions undertaken by GFAP which are necessary
and incidental to the foregoing, and (v) the
performance by GFAP of its obligations, and the
enforcement by GFAP of its rights, under this
Agreement, the Services Agreement and the MD Agreement;
"GFAP RESTRICTED MATTERS" means, in relation to GFAP, any of the following:
(a) a variation of its memorandum and articles of
association (other than as contemplated by this
Agreement) or the rights attaching to any
shares in the share capital;
(b) any increase, decrease or change in the amount of
the authorised or issued share
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capital (whether by way of capitalisation issue,
rights issue, sub-division, consolidation, reduction
of capital, share repurchase or otherwise) except as
required to enable the transactions contemplated
by this Agreement;
(c) any amendment or alteration in the rights,
privileges, restrictions or conditions attaching
to any issued or unissued shares in the share
capital;
(d) the granting of any option or other interest (in the
form of convertible securities or in any other form)
over or in its share capital, any redemption or
purchase of any of its own shares or any other
reorganisation of its share capital (save as provided
in this Agreement);
(e) the engaging in any business other than the
GFAP Business or the expenditure of any
monies other than in good faith for the
purposes of or in connection with the carrying
on of the GFAP Business;
(f) the incurring of any indebtedness other than
for the purposes of or in connection with the
carrying on of the GFAP Business;
(g) the declaration or payment of any dividend or the
making of any other distribution (by way of
capitalisation, repayment or in any other manner)
other than as may be required to give effect to
the agreement between the parties that members of
the GFBV Group are entitled to cash and cash
equivalents in the accounts of the company in
excess of amounts contemplated as required under
paragraph 1.3.16 of Schedule 1;
(h) the entering into of any transaction or
arrangement with any member of the NAPL Group
or the GFBV Group which is not on commercial
arm's length terms;
(i) the entering into of any transaction or
arrangement of any nature whatsoever (other than
any borrowing, transaction or arrangement
contemplated by this
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Agreement), in each case other than in the
ordinary course of the GFAP Business;
(j) any disposal, abandonment or encumbrance of
any of the APP Properties; and
(k) any amendments to the Services Agreement
and the MD Agreement;
"GFBV GROUP" means, collectively, GFBV and all Affiliates thereof;
"GFF BUSINESS" means (i) the investment by GFF directly or
indirectly in the development of the APP Project, (ii)
the investment in GFAP, (iii) all actions taken by GFF
which are necessary and incidental to the foregoing and
(iv) the performance by GFF of its obligations, and the
enforcement by GFF of its rights, under this Agreement;
"GFF RESTRICTED MATTERS" means, in relation to GFF, any of the following:
(a) any of the matters set out in paragraphs (a) -
(d), (g) and (h), of the definition of GFAP
Restricted Matters;
(b) the engaging in any business other than the
GFF Business or the expenditure of any monies
other than in good faith for the purposes of
or in connection with the carrying on of the
GFF Business;
(c) the incurring of any indebtedness other than
for the purposes of or in connection with the
carrying on of the GFF Business; and
(d) the entering into of any transaction or
arrangement of any nature whatsoever (other
than any borrowing, transaction or
arrangement contemplated by this Agreement),
in each case other than in the ordinary
course of the GFF Business;
"GFF SHARES" means the ordinary shares each with a par value of
euro)1000 in the share capital of GFF;
"GOVERNMENT AGENCY" means any legitimate and internationally
recognised present or future government or governmental,
administrative, fiscal, or judicial body, department,
commission, authority, tribunal, agency or entity;
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"INTEREST" means without limitation, a legal, beneficial or
equitable interest, whether direct or indirect;
"LOAN NOTES" means the loan notes denominated in Euros issued by
GFAP to NAPF from time to time in connection with Advances, which
shall be in agreed form and shall bear no interest;
"LONG STOP DATE" means 7 April 2006;
"MANAGING DIRECTOR" means the person appointed to the position of
managing director of GFAP;
"MATERIAL ADVERSE EFFECT" means that the relevant event or circumstance (or any
effect or consequence thereof):
(i) would or would be reasonably likely to affect
materially and adversely the ability of NAPL
or NAPF to comply with any of its obligations
under this Agreement, the Shareholders'
Agreement or the Services Agreement;
(ii) would or would be reasonably likely to affect
materially and adversely the validity or
enforceability of any of this Agreement, the
Shareholders' Agreement or the Services
Agreement;
(iii) would or would be reasonably likely to affect
materially and adversely the APP Project or the
business, condition (financial or otherwise), operation
or prospects of NAPL or NAPF; or
(iv) would or would be reasonably likely to affect
materially and adversely the business, condition
(financial or otherwise), operation or prospects
of GFBV;
"MD AGREEMENT" means an agreement to be entered into between
GFAP and the Managing Director in accordance with
Clause 7.1.8 and substantially in the form of
Schedule 4 attached hereto;
"MEMORANDUM AND ARTICLES means the memorandum and articles of
OF ASSOCIATION (NEW)" association of GFAP, amended to provide for
the management arrangements contemplated
under this Agreement;
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"MINERAL RIGHTS" means prospecting licenses, mining licenses, mineral
concessions, mining leases, surface rights, water rights and other
rights relating to, minerals or to access to minerals and other forms
of mineral title under Applicable Law, whether contractual, statutory
or otherwise;
"NAPFS" means North American Palladium Arctic Services
Oy, a limited liability company, registration no.
2003981-8, organised and existing under the laws of
Finland;
"NAPL SHARES" means the common shares in the share capital of
NAPL;
"NAPL GROUP" means, collectively, NAPL and all Affiliates thereof;
"OFFER NOTICE" has the meaning set out Clause 10.4.1;
"OFFEREE" has the meaning set out in Clause 10.4.1;
"OPTION" means the sole and exclusive right to acquire the
Purchased Interests, as set out in Clause 5.1;
"OPTION CONDITIONS" means the conditions set out in Clause 5.3;
"OPTION PERIOD" means the period from the Effective Date to August 31, 2008;
"OROGEN" means Orogen Holding BVI Limited, a limited
liability company, registration no. 184982 organised and
existing under the laws of the British Virgin Islands, an
Affiliate of GFBV;
"PARTIES" means each of GFBV, GFF, NAPL and NAPF;
"PROGRAMME AND BUDGET" means any work programme and associated budget
in relation to Earn-in Expenditures undertaken during the Option
Period, on and in respect of the APP Project;
"PROPERTY AGREEMENTS" means the agreements described in Schedule 9.
"PURCHASED INTERESTS" means:
(a) in the event GFBV does not exercise the back-in
right set out in Clause 5.2, such number of GFF
Shares as would give NAPL a shareholding of 60%
(sixty percent) of all issued and outstanding
ordinary shares of GFF thereby providing
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for a 60% (sixty percent) Interest in the
APP Project; or
(b) in the event GFBV exercises the back-in right
set out in Clause 5.2, such number of GFF
Shares as would give NAPL a shareholding of
50% (fifty percent) less one ordinary share
of all issued and outstanding ordinary shares
of GFF, or 50% of all issued and outstanding
ordinary shares of GFF, if approved by
[omitted], thereby providing for corresponding
Interest in the APP Project;
"RE-SCOPING STUDY AND means a re-scoping study and exploration
EXPLORATION PROGRAMME" programme to be undertaken in respect of the
APP Property including: (a) definition of a
combined mineable resource of at least 5.0 million
ounces of two platinum group elements and gold
combined at grades greater than 3.0 grams per
tonne (the "TARGET GRADE"); (b) exploration on the
properties known as the SK Reef and the SJ Reef
mining properties and claims, and which are
included in the APP Property, to: (i) drill and
examine mining claims that have the potential to
satisfy the Target Grade; (ii) obtain sufficient
data to create a new geological model that
supports a combined mine plan for all of the APP
Property; and (iii) identify other high potential
geological zones along the Archaean-Proterozoic
contact of the APP Property; (c) examine various
mine design options to efficiently exploit all
identified mineral resources of the APP Property
and produce a marketable product in a
cost-effective manner; (d) evaluate the metallurgy
of various ore types contained within the APP
Property and categorize as to possible processing
options; and (e) maintain the APP Property in good
standing;
"RULES OF ARBITRATION" has the meaning set out in Clause 11.13;
[OMITTED] means the [omitted];
[OMITTED] [omitted];
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"SATISFACTION DATE" means the date on which GFBV has delivered written
acknowledgement to NAPL of the satisfaction by
NAPL of each of the Option Conditions;
"SERVICES AGREEMENT" means the services agreement to be entered
into between GFAP, NAPL and NAPFS, in respect
of the services to be provided by each of NAPL
and NAPFS, substantially in the form of Schedule 10
attached hereto;
"SHAREHOLDERS' means the shareholders' agreement to be
AGREEMENT" concluded by NAPL and GFBV in accordance with
Clause 5.5, in the form attached hereto
as Schedule 2;
"TRANSFER AND SUBSCRIPTION means the terms and conditions attached hereto as
TERMS" Schedule 3; and
"TSX" means the Toronto Stock Exchange.
1.2 INTERPRETATION
In this Agreement:
1.2.1 any reference to "WRITING" or "WRITTEN" will mean any method
of reproducing words in a legible and non-transitory form
(including e-mail);
1.2.2 references to the word "INCLUDE" or "INCLUDING" are to be
construed without limitation;
1.2.3 the table of contents and headings are inserted for
convenience only and will not affect its construction;
1.2.4 unless the context otherwise requires, words denoting the
singular will include the plural and vice versa, references to
any gender will include all other genders and references to a
person will include any individual, firm, body corporate,
government, state or agency of a state of any joint venture,
association or partnership in each case whether or not having
a separate legal personality;
1.2.5 references to Schedules and Clauses are to Schedules and
Clauses of this Agreement unless otherwise specified and
references within a Schedule to paragraphs are to paragraphs
of that Schedule unless otherwise specified. The Schedules are
deemed to be incorporated in this Agreement in their entirety;
1.2.6 references to any statute, statutory provision, directive or
treaty include a reference to that statute, statutory
provision, directive or treaty as amended, extended,
consolidated or replaced from time to time (whether before or
after the date of this Agreement) and include any order,
regulation, instrument or other subordinate legislation made
under the relevant statute, statutory provision, directive
or treaty;
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1.2.7 references to any English legal term for any action, remedy,
method or judicial proceeding, legal document, legal status,
court, official or any legal concept, state of affairs or
thing will in respect of any jurisdiction other than England
be deemed to include that which most approximates in that
jurisdiction to the English legal term;
1.2.8 references to times of the day are to Toronto time and
references to a day are to a period of 24 hours running from
midnight on the previous day;
1.2.9 references to "CONTROL" (including with correlative meanings,
the terms "CONTROLLED BY", "UNDER COMMON CONTROL WITH" and
"CONTROLLING"), as used with respect to any person, means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such
person, whether through the ownership of voting shares, by
contract or otherwise;
1.2.10 a "PERSON" will be construed as a reference to any person,
firm, company, corporation, government, state or agency of a
state or any association or partnership (whether or not having
separate legal personality) of two or more of the foregoing;
1.2.11 references "TO THE BEST OF THE KNOWLEDGE, INFORMATION AND
BELIEF" of GFBV or GFF shall mean the actual knowledge,
information and belief of the executive directors of GFBV or
GFF, as the case may be;
1.2.12 "$" and "DOLLARS" denote the lawful currency of the United
States of America for the time being; and
1.2.13 "(EURO)" and "EUROS" denote the lawful currency of the
European Union for the time being.
2. EFFECTIVENESS, TERM AND TERMINATION
2.1 EFFECTIVENESS
This Agreement, save for the provisions of Clauses 2.1, 2.2, 4, 11.1,
11.2, 11.3, 11.4, 11.5, 11.6, 11.10, 11.12 and 11.13, which shall be
of immediate force and effect upon execution hereof, shall become
effective upon the fifth Business Day following the date on which the
following condition has either been satisfied or waived by GFBV:
2.1.1 the delivery by NAPL to GFBV of an opinion of legal counsel to
NAPL in a form and substance satisfactory to GFBV that all
required consents, approvals and authorizations, including
unconditional approvals from the TSX (subject only to notice
of the issuance of the Consideration Shares being filed with
the TSX) and AMEX to the extent required, for the issuance of
the Consideration Shares on the terms set out in this
Agreement have been obtained by NAPL;
2.2 LONG STOP DATE
If the condition set out in Clause 2.1 has not been satisfied (or
waived, as applicable) prior to the Long Stop Date, NAPL or GFBV may
by notice to each of the other
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Parties terminate this Agreement, provided that such
termination shall be without prejudice to the accrued rights
and obligations of the Parties on and prior to such
termination. The Parties shall use their reasonable
commercial endeavours to procure that the conditions in
Clause 2.1 are satisfied as soon as practicable after the
date hereof and in any event prior to the Long Stop Date.
2.3 TERMINATION
This Agreement shall terminate:
2.3.1 in accordance with Clause 2.2;
2.3.2 automatically in accordance with Clause 5.3;
2.3.3 automatically if NAPL fails to deliver the Exercise Notice in
accordance with the terms of Clause 5.4.1;
2.3.4 on the date of any material breach by NAPL and/or NAPF of the
terms of this Agreement or by the Managing Director of the
terms of the MD Agreement or by NAPL and/or NAPFS of the terms
of the Services Agreement, where such breach has not been
remedied or waived within 20 Business Days of receipt of
notice of such breach from the relevant aggrieved Party;
2.3.5 on the date on which NAPL shall be deemed to have withdrawn in
accordance with Clause 7.3;
2.3.6 in accordance with Clause 11.1; or
2.3.7 by mutual written agreement between the Parties,
provided that any such termination shall be without prejudice to the
accrued rights and obligations of the Parties on and prior to such
termination, including without limitation those obligations set out
in Clause 2.4 below. Notwithstanding the foregoing, the provisions of
Clause 10.6 (indemnification), Clause 11.10 (confidentiality), Clause
11.12 (governing law) and Clause 11.13 (dispute resolution) shall
survive termination of this Agreement and remain in full force and
effect for a period of three years from the date of termination
hereof.
2.4 EFFECT UPON TERMINATION
In the event of termination under Clause 2.3 pursuant to any of
Clause 2.3.2, Clause 2.3.3, Clause 2.3.4, Clause 2.3.5, or, during
the Option Period, pursuant to Clause 2.3.6 or Clause 2.3.7, the
Parties hereto agree that the provisions of Schedule 6 shall apply.
3. TRANSACTIONS ON AND AFTER EFFECTIVE DATE
3.1 ORGANISATION OF GFAP
Within 30 days of the Effective Date:
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3.1.1 GFF shall procure that the Memorandum and Articles of
Association (new) are duly adopted by GFAP in accordance with
Applicable Law;
3.1.2 the Parties shall procure that the directors of GFAP,
including the Managing Director, be appointed (in accordance
with Clause 7.1);
3.1.3 GFAP shall open and maintain an account in its name with an
account bank approved by GFF into which all Advances funded by
NAPL, through its subsidiary NAPF, pursuant to Clause 7.2
shall be deposited.
3.2 APPROVAL OF [OMITTED]
[Omitted]
3.3 NO PARTNERSHIP
The relationship between the Parties pursuant to this Agreement is
strictly that of independent contractors and will not constitute a
partnership or agency for any purpose.
3.4 NAPL AND GFBV MAY NOT BIND
Neither GFBV nor NAPL (nor any of their respective Affiliates) shall
be entitled to incur any obligations on behalf of any of, or to act
on behalf of or bind, the other Parties hereto or GFAP.
4. REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the others that the statements
made by it in Schedule 1 are true, accurate and not misleading as of
the respective dates thereof.
4.2 SURVIVAL AND ACKNOWLEDGEMENT
The representations and warranties set forth in Clause 4.1 and
Schedule 1 will survive the relevant dates set out in Schedule 1 and
continue in full force and effect until the expiry of the relevant
limitation periods under Applicable Law.
5. GRANT AND EXERCISE OF OPTION
5.1 GRANT OF OPTION
GFBV hereby grants to NAPL the sole and exclusive right and option to
acquire the Purchased Interests upon and subject to the terms of this
Agreement.
5.2 REDUCTION OF INTEREST
GFBV may, in its sole discretion, on written notice to NAPL provided
at any time after the Effective Date but no later than the
Satisfaction Date, elect to decrease the Interest to be acquired by
NAPL in the APP Project from 60% (sixty percent) to (i) 50% (fifty
percent) less one ordinary share; or (ii) 50% (fifty percent), if
approved
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by [omitted], in which case the number of GFF Shares
constituting the Purchased Interest shall decrease as contemplated
under this Agreement.
5.3 OPTION CONDITIONS
The right of NAPL to exercise the Option is subject to fulfillment by
the NAPL Group of the following conditions (the "OPTION CONDITIONS")
and the delivery of the notice of satisfaction by NAPL referred to in
this Clause 5.3 prior to the expiry of the Option Period:
5.3.1 the completion of the Re-Scoping Study and Exploration
Programme and the delivery by the NAPL Group to GFBV of a
written report in respect of the completed Re-Scoping Study
and Exploration Programme;
5.3.2 the completion and delivery by the NAPL Group to GFBV of the
Feasibility Study;
5.3.3 the incurring by NAPL of Approved Earn-in Expenditures
(through Advances made under the terms of this Agreement) in
an aggregate amount of at least $12.5 million. For the
avoidance of doubt, if the Approved Earn-in Expenditure
exceeds in aggregate the sum of $12.5 million, NAPL shall be
obliged to make Advances in order to fund such excess as well;
and
5.3.4 NAPL shall have made a determination to develop a mine in
respect of the APP Project of at least a 3mtpa throughput and
shall have delivered to GFBV (i) a formal development proposal
and associated budget in respect thereof based on the
Feasibility Study delivered in accordance with Clause 5.3.2
and approved by NAPL (the "FIRST DEVELOPMENT PROPOSAL AND
BUDGET"), together with such supporting documentation and
information as GFBV shall reasonably require, and (ii) a
written undertaking from NAPL providing that it shall, subject
to Applicable Law, (x) vote any shareholding of NAPL in GFF
(acquired pursuant to the terms of this Agreement) in favour
of and (y) use its best efforts to procure that any director
of GFF appointed by NAPL under the terms of the Shareholders'
Agreement votes in favour of, the First Development Proposal
and Budget as and when it is considered by the board of
directors of GFF under the terms of the Shareholders'
Agreement.
Upon completion of all of the Option Conditions, NAPL
shall promptly provide written notice to GFBV of the
satisfaction of the Option Conditions together with a
certificate signed by the chief financial officer of
NAPL certifying the amount of Approved Earn-in
Expenditure that has been incurred. Within 20 Business
Days of receipt of such notice, GFBV shall confirm its
acceptance in writing to NAPL that the conditions have
been satisfied in accordance with their terms. If no
such notice is given by GFBV, NAPL shall be deemed to
have satisfied the conditions on the last day of such
20 Business Day period. If GFBV elects to exercise its
back-in right in accordance with Clause 5.2, it shall
simultaneously with the written acceptance contemplated
in this Clause, deliver written notice of the exercise
of such election as contemplated in Clause 5.2 to NAPL,
to the extent that it has not already delivered such
written notice to NAPL. In the event that any of the
Option Conditions referred to in this Clause 5.3 are
not fulfilled prior to the expiry of the Option Period,
the Option shall expire and the provisions of Clauses
2.3 and 2.4 shall apply.
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5.4 EXERCISE OF OPTION
5.4.1 NAPL may, within 10 Business Days of the Satisfaction Date,
exercise the Option by notice in writing delivered to GFBV
(the "EXERCISE NOTICE").
5.4.2 The Exercise Notice shall specify the Purchased Interest to
which such notice relates and, upon the delivery of such
notice and subject to the issuance by NAPL of the relevant
number of Consideration Shares to GFBV, NAPL shall have
thereby acquired the relevant Interest in GFF and the
provisions of Clause 5.5 shall apply.
5.4.3 Following the delivery of the Exercise Notice, GFBV and GFF
shall, against the issuance of the Consideration Shares by
NAPL to GFBV in accordance with the terms of this Agreement
and the Transfer and Subscription Terms, and subject to
Applicable Laws, enter into appropriate documentation
formalizing the transfer of the Purchased Interests in
accordance with the Transfer and Subscription Terms and the
transaction steps set out in Schedule 7.
5.5 SHAREHOLDERS' AGREEMENT
5.5.1 Upon the delivery of the Exercise Notice and the completion of
the related transfers of Consideration Shares and Purchased
Interests contemplated under this Agreement, NAPL and GFBV
shall enter into the Shareholders' Agreement within 10
Business Days of the Exercise Date.
5.5.2 Prior to the Exercise Date, GFBV may at its election
acquire the 0.017% GFF Shares held by Orogen.
5.5.3 If GFBV elects not to acquire the GFF Shares held by Orogen in
accordance with Clause 5.5.2, it shall no later than 10
Business Days after the Satisfaction Date notify NAPL in
writing hereof. In such event, the Parties undertake to amend
the form of Shareholders' Agreement in order to provide that
Orogen becomes a party to the Shareholders' Agreement, and
GFBV shall cause Orogen to duly execute and deliver the
Shareholders' Agreement.
6. CONSIDERATION
The consideration for the purchase and sale of the Purchased
Interests in accordance with the terms of this Agreement shall be the
aggregate of the issuance and allotment of the Consideration Shares
to GFBV and the undertaking by NAPL of the funding obligations set
out in Clause 7.2.
7. MANAGEMENT AND FUNDING
7.1 MANAGEMENT AND MANAGING DIRECTOR
7.1.1 During the Option Period, NAPL shall nominate all the
directors of GFAP, including the Managing Director. GFF shall
appoint the directors and Managing Director so nominated by
NAPL and approved by GFF.
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7.1.2 During the Option Period, the Managing Director shall perform
his or her duties in accordance with the terms of the
Memorandum and Articles of Association (new) and the MD
Agreement.
7.1.3 During the Option Period, GFF shall be entitled to nominate up
to 3 persons to be present at all GFAP Board meetings ("the
GFBV Observers"). Such persons shall not be voting members at
such board meetings. The GFAP Board shall ensure that
reasonable prior written notice of any proposed GFAP Board
Meeting shall be given to each GFBV Observer together with a
reasonably detailed agenda of the matters to be discussed at
such meeting accompanied by any relevant papers and
information.
7.1.4 NAPL shall, subject to Clause 7.1.5, be entitled, from time to
time during the Option Period, and with the prior written
consent of GFBV, to remove any director of GFAP (including the
Managing Director) and to nominate a new director to replace
any person so removed and GFF shall appoint the director so
nominated by NAPL and approved by GFF.
7.1.5 In the event this Agreement terminates in accordance with the
provisions of Clause 2.3 and 2.4, all the directors of GFAP,
including the Managing Director, shall immediately resign and
GFF shall be entitled to remove such directors (and the
Managing Director) and to appoint replacement directors
(including the Managing Director) of GFAP.
7.1.6 During the Option Period, the implementation of all Programmes
and Budgets by GFAP shall be managed by GFAP and the Managing
Director in accordance with the applicable terms of this
Agreement and the terms of the MD Agreement and the Services
Agreement.
7.1.7 During the Option Period, in the event of (i) any claim
pursuant to Clause 10.6.1 hereof, or (ii) the negligence,
willful default or material breach by NAPL of its obligations
hereunder, (iii) the negligence, willful default or material
breach by the Managing Director of its obligations under this
Agreement and/or the
MD Agreement or (iv) the negligence, willful default or
material breach of NAPFS or NAPL under the Services
Agreement, where such negligent act or omission,
default or material breach has not been remedied or
waived within 20 Business Days of receipt of notice of
such negligent act or omission, default or material
breach, GFF shall be entitled to remove any and all
directors of GFAP (including the Managing Director) and
replace any person so removed.
7.1.8 During the Option Period, NAPL shall procure that (i) the
Managing Director enters into the MD Agreement, (ii) the
Managing Director complies with all provisions of this
Agreement applicable to the Managing Director and with the MD
Agreement; (iii) NAPFS enters into the Services Agreement
together with NAPL; and (iv) NAPFS complies with all
provisions of the Services Agreement.
7.1.9 GFAP shall maintain and keep full, complete and accurate
books of account, records and information with respect to the
APP Project, the implementation of the Programmes and Budgets
and the operations of GFAP generally, at the
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registered office of GFAP. During the Option Period,
GFBV and/or GFF and their representatives shall have
the right to receive, within a reasonable time after
its written request therefore, any such information
relating to the APP Project, the implementation of the
Programmes and Budgets and the operations of GFAP
generally as it may reasonably request and shall be
entitled, at all reasonable times, to have access to
the registered office of GFAP, the APP Property and all
books of account, records and information in connection
with the APP Project, the implementation of the
Programmes and Budgets and the operations of GFAP
generally.
7.1.10 The GFAP Board shall submit regularly (and in any event no
later than quarterly) written reports to GFF of all matters
considered by the GFAP Board.
7.2 FUNDING OF APPROVED EARN-IN EXPENDITURES
7.2.1 During the Option Period, NAPL shall, through its subsidiary
NAPF, make all Advances (at times and in the manner determined
by the Managing Director) in accordance with Clause 7.2.3, in
order to fund all Approved Earn-in Expenditures in connection
with the APP Project.
7.2.2 All Advances shall, unless otherwise agreed between GFBV and
NAPL, be in the form of cash (denominated in Euros) by way of
loans to GFAP upon and subject to the terms of, and evidenced
by, Loan Notes issued by GFAP.
7.2.3 The Managing Director shall, not less than 14 Business Days
prior to the commencement of each quarter in respect of which
Approved Earn-in Expenditures shall be incurred, by notice in
writing to NAPL (each, a "CASH CALL") demand that NAPL,
through its subsidiary NAPF, make the Advances it is required
to make in accordance with Clause 7.2.1. Advances validly
demanded pursuant to each Cash Call shall be made by NAPL,
through its subsidiary NAPF, not later than 5 (five) Business
Days before the commencement of such quarter.
7.2.4 During the Option Period, NAPL undertakes to capitalise NAPF
with nominal shares and the remainder of the subscription in
NAPF shall be made by share premium.
7.3 WITHDRAWAL BY THE NAPL GROUP
The NAPL Group shall be deemed to have withdrawn from this Agreement
if either of the following have occurred:
7.3.1 the NAPL Group shall have given notice to GFBV clearly
indicating its intention to withdraw from this Agreement in
accordance with this Clause 7.3; or
7.3.2 NAPL and members of the NAPL Group shall not have conducted
any material activities in respect of the Re-Scoping Study and
Exploration Programme and the Feasibility Study for a period
of six consecutive months
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for any reason other than the occurrence of unavoidable
delays in accordance with Clause 11.1;
and upon the occurrence of such a withdrawal, the terms of Clause
2.4 shall apply.
8. PROGRAMMES AND BUDGETS
8.1 WORK IN ACCORDANCE WITH APPROVED PROGRAMMES AND BUDGETS
No work shall be conducted or undertaken nor shall any Earn-in
Expenditure be incurred by GFAP or funded by NAPL (either directly or
indirectly through its Affiliates, employees, directors, officers or
agents) unless such work or Earn-in Expenditure is contemplated by a
Programme and Budget and otherwise complies with the provisions of
this Agreement.
8.2 PROGRAMMES AND BUDGETS
Unless otherwise approved by GFBV and NAPL, all proposed Programmes
and Budgets relating to the APP Project, to the extent that such
Programmes and Budgets relate to work to be conducted prior to the
expiry of the Option Period, shall be prepared by the Managing
Director and copies thereof submitted to the GFAP Board and the GFBV
Observers on an annual basis. During the Option Period and provided
NAPL and NAPF are in compliance with their obligations under this
Agreement (including its funding obligations under Clause 7.2) and
the Services Agreement and the Managaing Director is in compliance
with his or her obligations under the MD Agreement, the GFAP Board
shall have the authority to approve any proposed Programme and Budget
and the making of any Earn-in Expenditures relating thereto unless
such approval or the making of such Earn-in Expenditures would:
8.2.1 cause GFF or GFAP to be in breach of its obligations under any
APP Project agreements, licenses or permits (including the APP
Project License) or cause a breach by GFF or GFAP of
Applicable Law; or
8.2.2 be materially prejudicial to GFF or GFAP.
8.3 CONDUCT OF WORK
Unless otherwise approved by GFBV and NAPL, all work relating to the
APP Project under Programmes and Budgets prepared and submitted
pursuant to Clause 8.2 shall be implemented by GFAP under the
management authority granted to the Managing Director pursuant to the
MD Agreement. GFAP shall enter into the Services Agreement with NAPFS
and NAPL substantially in the form of the draft Services Agreement
attached hereto as Schedule 10.
9. RESTRICTED MATTERS AND CORPORATE MATTERS
9.1 APPROVAL OF GFAP RESTRICTED MATTERS
During the Option Period, no decision of the GFAP Board shall be of
any force or effect in respect of any of the GFAP Restricted Matters,
unless and until GFF shall have consented in writing thereto.
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9.2 CORPORATE MATTERS
GFF shall provide direction to the GFAP Board in relation to any
Corporate Matters and the GFAP Board shall deal with any such
Corporate Matters in the manner so directed by GFF.
9.3 APPROVAL OF GFF RESTRICTED MATTERS
During the Option Period, no decision of the GFF Board shall be of
any force or effect in respect of any of the GFF Restricted Matters,
unless and until NAPL shall have consented in writing thereto.
10. COVENANTS
10.1 MAINTENANCE OF INTEREST IN NAPL
10.1.1 Following the exercise of the Option, if NAPL proposes to
issue for cash any equity securities, including securities
convertible or exchangeable for equity securities (the
"SECURITIES") pursuant to a private placement or any public
offer to finance, directly or indirectly, the development and
construction of a mine (the "MINE") to bring the APP Project
into production, GFBV or an Affiliate designated by GFBV shall
have the right to acquire from NAPL on terms set out in Clause
10.1.2 and 10.1.3 such number of Securities that when combined
with the Consideration Shares and any NAPL Shares acquired
pursuant to Clause 10.1.4, if any, would result in the GFBV
Group holding GFBV's Outstanding Interest (as hereinafter
defined) of the issued and outstanding shares of NAPL.
10.1.2 NAPL shall as soon as practicably possible give to GFBV
written notice of each proposed issuance of Securities
pursuant to a private placement, or any public offer referred
to in Clause 10.1.1, setting forth the date and other terms of
the issuance in reasonable detail ("NOTICE"), such Notice
to be provided prior to the proposed issuance when reasonably
possible.
10.1.3 Within 5 (five) Business Days after receipt of the Notice,
GFBV shall, if it elects to acquire the Securities pursuant
hereto, give notice to NAPL of its commitment to purchase or
cause an Affiliate of GFBV to purchase such Securities from
NAPL at a price and on other terms and conditions equal to the
price paid and the other BONA FIDA terms and conditions agreed
to by the other purchasers of such Securities.
10.1.4 If on the date that GFBV receives the Consideration
Shares, the number of Consideration Shares would result in the
GFBV Group holding less than the Outstanding Interest, GFBV or
an Affiliate designated by it, shall have the right on the
Exercise Date to subscribe, on the terms set out in this
Clause 10.1.4, for such number of additional NAPL Shares so
that when combined with the Consideration Shares, would result
in the GFBV Group holding the Outstanding Interest of the
issued and outstanding shares of NAPL. GFBV shall subscribe
for these additional NAPL Shares at a subscription price equal
to the then current publicly quoted and traded NAPL Share
market price.
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10.1.5 The obligations of NAPL under Clause 10.1.4 shall be subject
to compliance with Applicable Law and conditional upon NAPL
obtaining all consents, approvals and authorisations,
including regulatory approvals from the TSX and AMEX to the
extent required, PROVIDED THAT NAPL shall use its best efforts
to obtain such required consents, approvals and
authorizations.
10.1.6 As used herein, the term "Outstanding Interest" shall be
calculated as follows:
10.1.6.1 in the event that GFBV exercises the back-in right set out in
Clause 5.2, the percentage of the outstanding Securities of
NAPL represented by the relevant number of Consideration
Shares on the date of announcement of the transactions
contemplated by this Agreement in the press. For greater
certainty, NAPL and GFBV hereby agree and acknowledge that in
this event, on the date of announcement of the transactions
contemplated by this Agreement in the press, the Outstanding
Interest is 14.15 percent (the number of Consideration Shares
being equal to 7 381 636); and
10.1.6.2 in the event that GFBV does not exercise the back-in right set
out in Clause 5.2, the percentage of the outstanding
Securities of NAPL represented by the relevant number of
Consideration Shares on the date of announcement of the
transactions contemplated by this Agreement in the press. For
greater certainty, NAPL and GFBV hereby agree and acknowledge
that in this event, on the date of announcement of the
transactions contemplated by this Agreement in the press, the
Outstanding Interest is 17.68 percent (the number of
Consideration Shares being equal to 9 227 033).
10.2 CHANGES TO CAPITAL STRUCTURE
If during the Option Period there is any share consolidation, split,
reclassification or any other changes to the capital structure of
NAPL, the number of Consideration Shares to be issued by NAPL under
the terms of this Agreement shall be adjusted, with any adjustment
calculation done on the basis that GFBV holds the relevant number of
Consideration Shares as at the date of the relevant capital
restructuring and such shares are subject to any such restructuring.
10.3 CHANGE OF NAMES
As soon as practicable after the Exercise Date, GFF undertakes to
change its name and shall procure that GFAP changes its name to
remove reference to `Gold Fields' therein.
10.4 AREA OF INTEREST
10.4.1 During the Option Period, if GFBV or NAPL or any Affiliate of
either Party acquires any Mineral Rights within the Area of
Interest during the term of this Agreement (the "ACQUIROR"),
the Acquiror will immediately notify the other party (the
"OFFEREE") offering the Mineral Rights for inclusion in the
APP Property (the "OFFER NOTICE").
10.4.2 Unless the Offeree gives counter notice to the Acquiror
rejecting the Mineral Rights for inclusion in the APP Project
(the "REJECTION NOTICE") within 30
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days after receipt of Offer Notice, then the Mineral
Rights will promptly thereafter be contributed by the
Acquiror to GFAP at cost and will form part of the APP
Property and be subject to this Agreement.
10.4.3 If the Offeree gives the Rejection Notice then the Acquiror
shall be entitled to retain the Mineral Rights which will
thereafter be excluded from the Area of Interest.
10.5 OTHER ACTIVITIES AND INTEREST
This Agreement and the rights and obligations of the Parties, are
strictly limited to the APP Property. Except as specifically provided
herein, each Party shall have the free and unrestricted right to
enter into, conduct and benefit from activities and venues of any
kind whatsoever, including those involving Mineral Rights adjoining
the Area of Interest, whether or not competitive with the activities
undertaken pursuant hereto, without disclosing such activities to the
other party or inviting or allowing the others to participate and
will be under no fiduciary or other obligation to the other Parties
with respect thereto.
10.6 INDEMNIFICATION
10.6.1 NAPL and NAPF agree to indemnify and hold harmless each of the
members of the GFBV Group and their respective officers,
directors, employees, agents and attorneys (each an "GFBV
INDEMNIFIED Party") from and against any Claims of any kind
which may be imposed upon, incurred by, or asserted by third
parties against such GFBV Indemnified Party relating to or
arising out of (i) the negligence, willful misconduct or
breach by NAPL or NAPF of any of their respective obligations
contained in this Agreement, (ii) the negligence, willful
misconduct or breach by the Managing Director of any of its
obligations under this Agreement and/or the MD Agreement or
(iii) the negligence, willful misconduct or breach by NAPL or
NAPFS of any of its obligations under the Services Agreement;
provided that where NAPL or NAPFS or the MD engages the
services of a third party subcontractor, any claim under this
indemnity arising out of the actions of such third party
subcontractor, shall be subject to a maximum amount equal to
the value of any insurance, that in terms of prevailing North
America industry practice, ought to have been procured by such
third party subcontractor.
10.6.2 GFBV and GFF agree to indemnify and hold harmless each of
the members of the NAPL Group and their respective officers,
directors, employees, agents, attorneys (each an "NAPL
INDEMNIFIED PARTY") from and against any Claims of any kind
which may be imposed upon, incurred by, or asserted by third
parties against such NAPL Indemnified Party relating to or
arising out of (i) a breach by GFBV or GFF of any
representation or warranty made by either of them in this
Agreement or any material breach by either of them of their
respective obligations contained in this Agreement, (ii) any
of the Corporate Matters, or (iii) negligent or willful
misconduct in the exercise by GFBV or GFF of the APP Property
access rights granted pursuant to Clause 7.1.9.
10.6.3 NAPL and NAPF agree to indemnify and hold harmless each
GFBV Indemnified Party from and against 50% of all Claims of
any kind which may
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be imposed upon, incurred by, or asserted by third
parties against such GFBV Indemnified Party relating
to or arising out of any occurrence or event relating in any
manner to the operations of GFAP during the Option Period
where such occurrence or event is not otherwise provided for
under the indemnity in Clause 10.6.1 or Clause 10.6.2.
10.6.4 Notwithstanding the foregoing, no Party will have any
liability whatsoever to the others for indirect or
consequential damages in connection with this Agreement
whether pursuant to this Clause 10.6 for indemnification or
otherwise and whether in contract or in tort.
10.7 REGISTRATION RIGHTS
10.7.1 NAPL and GFBV shall negotiate in good faith and use their
commercially reasonable efforts to enter into an agreement
(the "REGISTRATION RIGHTS
AGREEMENT") providing for the registration under the U.S.
Securities Act of 1933 (the "1933 ACT") of the Consideration
Shares from time to time by GFBV (or any of its Affiliates).
The Registration Rights Agreement shall be entered into as
soon as practicable and in any event on or before 30 June
2006, provided that GFBV shall be entitled at any time and
from time to time unilaterally to extend such date to a date
not later than 31 December 2006, and provided further that
NAPL and GFBV may further extend such date by mutual
agreement. Unless otherwise agreed between NAPL and GFBV, the
Registration Rights Agreement shall provide as follows:
10.7.1.1 NAPL shall be obliged, upon each request of GFBV
following the issuance of the Consideration Shares, to
use its best efforts promptly to prepare, file and have
declared effective under the 1933 Act one or more
registration statements (collectively, the "REGISTRATION
Statement") covering the resale of the Consideration
Shares, and to maintain the effectiveness of the
Registration Statement until the later of (i) three
years from the date of the issuance of the Consideration
Shares covered by the Registration Statement or (ii)
such time as all the Consideration Shares held by GFBV
(or any of its Affiliates) may be immediately resold
under Rule 144 under the 1933 Act during any 90 day
period;
10.7.1.2 Notwithstanding the generality of Clause 10.7.1.1, NAPL
shall not be required to file a Registration Statement
if at the time of such filing NAPL is not then eligible
to file a registration statement on Form F-10 (or any
successor form) pursuant to the U.S./Canada
Multi-Jurisdictional Disclosure System (or any
successor system);
10.7.1.3 the management of NAPL shall provide such assistance to
GFBV in connection with any sale of Consideration
Shares in accordance with this Clause 10.7 as GFBV may
reasonably request, including participating and
cooperating with any underwriters' or brokers' due
diligence investigations;
10.7.1.4 NAPL shall enter into customary documentation in
connection with any sale of Consideration Shares in
accordance with this Clause 10.7;
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10.7.1.5 NAPL will provide to GFBV customary and reasonable
indemnities in connection with any sale of
Consideration Shares in accordance with this Clause
10.7 (including the related Registration Statement);
and
10.7.1.6 GFBV shall reimburse NAPL in respect of all reasonable
costs and expenses incurred by NAPL, including the
reasonable fees and disbursements of NAPL's counsel, in
connection the performance by NAPL of its obligations
under the Registration Rights Agreement,
and shall contain such other terms and conditions as are
customarily included in registration rights agreements.
10.7.2 For purposes of Clause 10.7.1 only, "CONSIDERATION SHARES"
shall mean the Consideration Shares, together with any NAPL
Shares acquired by GFBV pursuant to Clause 10.1.4.
11. MISCELLANEOUS
11.1 UNAVOIDABLE DELAYS
If any Party is prevented or delayed in exercising or complying with
any of its rights or obligations under this Agreement by reason of
events, whether foreseeable or unforseeable, beyond its reasonable
control, other than a lack of funds, such Party may give notice to
the other Parties of the event and upon giving of such notice all
relevant times herein provided for will be extended by the period
necessary to allow such circumstances to cease to exist or be
overcome and in any such event the Party so affected will use all
reasonable commercial efforts to do so promptly. In the event that
such circumstances continue for 180 days or more, GFBV shall have the
right to terminate this Agreement and the provisions of Clause 2.4
shall apply; provided that GFBV undertakes not to exercise its right
to terminate for a further period not exceeding 90 days in the event
that NAPL may reasonably request so, provided further that NAPL may
only make one such request.
11.2 NOTICES
11.2.1 Any demand, notice or other communication to be given in
connection with the matters contemplated by this Agreement
will only be effective if given in writing in English and:
11.2.1.1 personally delivered, in which case it will be deemed to have
been given upon delivery at the address set forth below; or
11.2.1.2 if sent by pre-paid reputable courier, in which case it will
be deemed to have been given upon delivery at the address set
forth below on the day of such delivery, as confirmed by such
courier; or
11.2.1.3 sent by facsimile to the number set forth below in which case
it will be deemed to have been given when dispatched, but will
only be effective if its uninterrupted transmission can be
confirmed by a transmission report of sender.
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Any notice given or deemed to have been given after 5.00 p.m.
on any Business Day or at any time on a day which is not a
Business Day in the place of receipt will be deemed to have
been given at 9.00 a.m. on the next Business Day in the place
of receipt.
11.2.2 The addresses and other details for notice of the Parties
are:
To: North American Palladium Ltd.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇. ▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Attention: President
To: North American Palladium Finland, Oy
c/o Gold Fields Arctic Platinum Oy
Ahjotie, 96320, Rovaniemi
Facsimile: ▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇
Attention: Managing Director
To: Gold Fields Exploration B.V.
MeesPierson Intertrust
Rokin 55
1012KK
Amsterdam
Facsimile: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Attention:
With a copy to: Gold Fields Limited
▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇
Postnet Suite 252
Private Bag X30500
Houghton, 2041
Facsimile: ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Legal Administrator
To: Gold Fields Finland, Oy
Procope & Hornborg Law Offices
▇▇▇▇▇▇▇▇▇▇ ▇
▇ ▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
Facsimile: 09358 103090333
Attention: Lotta Uusitalo
or such other address, individual or facsimile number
as may be designated by notice given by the Parties to
the others.
-25-
11.3 FURTHER ASSURANCES, REGISTRATION, SECURITY
Each Party will, from time to time on being requested to do so by
another Party, now or at any time in the future do or procure the
doing of all such acts and/or execute or procure the execution of all
such documents necessary or desirable to give effect to the
transactions effected or to be effected pursuant to this Agreement.
11.4 PAYMENT OF COSTS AND EXPENSES
Save as otherwise stated in this Agreement, each Party will pay its
own costs and expenses incurred in connection with the preparation,
execution and carrying into effect of this Agreement and the other
documents and instruments executed pursuant hereto or in connection
herewith.
11.5 SEVERANCE
11.5.1 Each of the provisions of this Agreement is severable. If any
such provision is or becomes illegal, invalid or unenforceable
in any respect under the law of any jurisdiction, the
legality, validity or enforceability in that jurisdiction of
the remaining provisions of this Agreement will not in any way
be affected or impaired thereby.
11.5.2 The Parties agree that if any provision of this Agreement
should for any reason be held to be invalid or unenforceable
in any respect under the law of any jurisdiction the Parties
will use reasonable endeavours to negotiate in good faith to
seek to agree for the purposes of the operation of this
Agreement in that jurisdiction a valid or enforceable
provision in substitution for the invalid or unenforceable
provision which achieves materially the same effect as would
have been achieved by the invalid or unenforceable provision.
11.6 ENTIRE AGREEMENT; AMENDMENT AND WAIVER
11.6.1 Subject as provided in Clause 11.6.2 below, this Agreement
(together with any documents referred to in this Agreement)
constitutes the entire agreement and understanding between the
Parties in respect of the subject matter hereof, and
supersedes and extinguishes any prior drafts, agreements,
undertakings, representations, statements, warranties and
arrangements of any nature whatsoever, whether or not in
writing, between the Parties in connection with the subject
matter of this Agreement except to the extent that the same is
in terms repeated or otherwise reflected in the warranties or
otherwise in this Agreement or any document referred to in
this Agreement.
11.6.2 Nothing in this Agreement or in any document referred to
herein will be read or construed as excluding any liability or
remedy as a result of fraud or wilful non-disclosure.
11.6.3 No variation of this Agreement will be of any effect unless it
is agreed in writing and signed by or on behalf of each of the
Parties.
11.6.4 Any waiver of any right, power or remedy under this Agreement
must be in writing and may be given subject to any conditions
thought fit by the grantor
-26-
and will be effective only in the instance and only for
the purpose for which it is given.
11.6.5 Failure of a Party to insist upon strict performance of a
provision of this Agreement or an obligation, or delay in the
exercise of a right or remedy, will not act as a waiver or
release.
11.7 CHANGE OF CONTROL
11.7.1 If at any time:
11.7.1.1 NAPL and/or NAPF is placed under judicial management, in
liquidation, or under winding up, whether voluntary,
compulsory, final or provisional, or compounds or enters into
a general arrangement of compromise with its creditors, or,
11.7.1.2 a Change of Control occurs,
GFBV shall, notwithstanding the provisions of Clause 11.8 or any
other provision to the contrary contained herein, have the right to
sell, transfer, assign or otherwise dispose of its Interest in and
the benefit of its rights and obligations under this Agreement and
shall on the date of such sale, transfer, assignment or disposal have
no further rights or obligations under this Agreement provided that
any such sale, transfer, assignment or disposal is in conjunction
with the sale by GFBV of all of the GFF Shares held by it as at the
date of any such sale, transfer, assignment or disposal and provided
further that any such assignee agrees in writing to be bound by the
terms of this Agreement.
11.8 SUCCESSORS AND ASSIGNS
11.8.1 Subject as provided below, no Party nor any other person
with enforceable rights under this Agreement may, save with
the prior written consent of the other Parties to this
Agreement, sell, transfer, assign or otherwise dispose of or
grant or suffer to exist any Encumbrance or other interest in
any Interest in or the benefit of its rights under this
Agreement whether absolutely or by way of security or deal in
any way with any Interest it has under this Agreement provided
that NAPL or NAPF may, without the consent of GFBV or GFF; and
GFBV may, without the consent of NAPL or NAPF, assign their
rights and the benefits of all or any of any its obligations
under this Agreement to an Affiliate, provided that any such
assignment will not result in any material adverse tax
consequence for the non-assigning Parties.
11.8.2 Successors in title and permitted assigns of each of the
Parties will be able to enforce the provisions of this
Agreement as if they were parties to it.
11.9 THIRD PARTY RIGHTS
Except as provided in this Agreement, a person who is not a party to
this Agreement may not enforce any of its terms. Notwithstanding any
term of this Agreement, the consent of any third party is not
required for any variation (including any release or compromise of
any liability under) or termination of this Agreement.
-27-
11.10 CONFIDENTIALITY
All Confidential Information coming into the possession of a Party by
virtue of this Agreement with respect to the business or operations
of the other Parties or in any way relating to the APP Project and/or
the APP Property will be kept confidential and will not be disclosed
to any person other than the officers, directors, employees, agents
and representatives of such Party who need to know such Confidential
Information for purposes related to this Agreement and the
performance and exercise by such Party of its rights and obligations
hereunder. This Clause 11.10 shall survive termination of this
Agreement for a period of three years after termination of this
Agreement.
11.11 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which when executed, will be an original, and all the counterparts
together will constitute one and the same agreement.
11.12 GOVERNING LAW
This Agreement will be governed by and construed in accordance with
English law.
11.13 DISPUTE RESOLUTION
11.13.1 Any disputes concerning the subject matter of this Agreement
will, in the first instance, be forthwith referred for
resolution between the Chairman of GFBV and the President of
NAPL, and if such dispute cannot be resolved within thirty
(30) days of such referral, will be referred for arbitration
in accordance with the provisions of Clause 11.13.2.
11.13.2 All disputes referred to arbitration pursuant to Clause
11.13.1 will be finally settled by arbitration in accordance
with the Rules of Arbitration of the International Chamber of
Commerce (the "RULES OF ARBITRATION"). In connection with any
such arbitration, each of GFBV and NAPL will appoint one
arbitrator and such arbitrators will agree on and appoint a
third arbitrator. The arbitration will be conducted in the
English language, and the arbitration will take place in
London, England. Any award made pursuant to this Clause
11.13.1 will be final and binding on all Parties hereto and
may be enforced in any court of competent jurisdiction. Any
report prepared by any arbitration panel constituted hereunder
will be delivered to each of the Parties hereto. Costs of the
arbitration will be borne by the Parties in accordance with
the Rules of Arbitration.
11.13.3 Notwithstanding any provisions of the Rules of Arbitration to
the contrary, the Parties hereby agree pursuant to section 48
of the Arbitration Act 1996 (United Kingdom) that the
arbitration panel will be entitled, if it so deems
appropriate, to provide for the remedy of specific performance
in the manner in which such remedy is provided by the courts
of England.
11.14 TIME OF THE ESSENCE
-28-
Any times, dates or periods specified in this Agreement may be
extended or altered by agreement in writing between the Parties. Time
shall however be of the essence of this Agreement, both as regards
times, dates and periods specified in this Agreement and as to any
times, dates or periods that may by agreement between the Parties be
substituted for any of them.
-29-
IN WITNESS WHEREOF the Parties have executed this Agreement with the intention
that it be delivered on the day and year written above.
EXECUTED on behalf of
NORTH AMERICAN PALLADIUM LTD.,
by
_____________________________
EXECUTED on behalf of
NORTH AMERICAN PALLADIUM FINLAND OY,
by
_____________________________
EXECUTED on behalf of
GOLD FIELDS EXPLORATION B.V.
by
_____________________________
EXECUTED on behalf of
GOLD FIELDS FINLAND OY
by
_____________________________
-30-
SCHEDULE 1
REPRESENTATIONS AND WARRANTIES
1.1 MUTUAL REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the others that as of
the date of this Agreement the representations and warranties
set forth in this Clause 1.1 are true and correct (and such
representations and warranties shall survive the execution and
delivery of this Agreement and continue in full force and
effect thereafter):
1.1.1 it is a company duly incorporated, validly
subsisting and in good standing under the laws of the
jurisdiction of its incorporation or formation, as
applicable;
1.1.2 it has all requisite capacity, power and authority to
carry on its business and to enter into this
Agreement and any agreement or instrument referred to
or contemplated by this Agreement and to carry out
and perform all of its obligations and duties
hereunder and thereunder;
1.1.3 it has duly obtained all requisite authorisations for
the execution, delivery and performance of this
Agreement and this Agreement constitutes a legal,
valid and binding agreement enforceable against it in
accordance with its terms;
1.1.4 compliance with the terms of this Agreement and any
agreement or instrument referred to or contemplated
by this Agreement shall not breach or constitute a
default under (i) any provision of its memorandum and
articles of association or equivalent constitutional
documents, (ii) any agreement or instrument to which
it is a party or by which it is bound, or (iii) any
order, judgment, decree or other restriction
applicable to it; and
1.1.5 it will not be required to give any notice to or make
any filing with or obtain any permit, consent, waiver
or other authorisation from any Government Agency or
other person in connection with the execution,
delivery and performance of this Agreement, other
than as have been obtained as at the date of this
Agreement or as contemplated in Clause 2.1 of this
Agreement.
1.2 NAPL AND NAPF REPRESENTATIONS AND WARRANTIES
Each of NAPL and NAPF represents and warrants to GFBV and GFF
that as of the date of this Agreement and as at the Exercise
Date, the representations and warranties set forth in this
Clause 1.2 are true and correct (and such representations and
warranties shall survive the execution and delivery of this
Agreement and the Exercise Date and continue in full force and
effect thereafter):
-31-
1.2.1 each of them has, at all times, conducted their
business in compliance with all Applicable Laws,
regulations and applicable policies of securities
regulatory authorities;
1.2.2 NAPL has given notice to each of the TSX and the AMEX
of the issuance of the Consideration Shares as
contemplated under the terms of this Agreement in
accordance with the rules of each such exchange, each
of the TSX and the AMEX has accepted such notice, and
such acceptance is not subject to any conditions
(other than customary conditions relating to the
filing of documentation in connection with the
completion of the transaction contemplated by this
Agreement);
1.2.3 the shares constituting the Consideration Shares
shall be validly allotted and issued to GFBV as fully
paid up shares free of any Encumbrance and subject to
no commitment by NAPL to issue such shares (except
pursuant to this Agreement) or create an Encumbrance
affecting such shares;
1.2.4 as at 27 February 2006, the authorised share capital
of NAPL consists of an unlimited number of NAPL
Shares, of which 52,216,770 have been issued and are
outstanding and an unlimited number of special
shares, issuable in series, of which none are issued
and outstanding;
1.2.5 NAPL's public documents have been filed in accordance
with Applicable Laws and contain no untrue statement
of a material fact and do not omit to state any
material fact necessary to make the statements
contained therein, in light of the circumstances
under which made, not misleading;
1.2.6 the statutory books of NAPL have been properly kept,
are up-to-date and contain complete and accurate
details of all matters required by Applicable Laws to
be entered in them. No notice or indication that any
of them is incorrect or should be rectified has been
received;
1.2.7 NAPL owns 100% of the shares in NAPF and no third
party owns or has any option or other right to
acquire shares in NAPF and all shares in NAPF are
free and clear of any Encumbrance;
1.2.8 NAPF is a single purpose company with the sole
objective and business of undertaking its obligations
under this Agreement and NAPF does not have any
obligations other than in connection therewith;
1.2.9 neither NAPL, nor any of its affiliates (as
defined in Regulation D under the Securities Act
("REGULATION D")), nor any persons acting on its or
their behalf, (i) has made or will make any offers or
sales of any security, or has solicited or will
solicit offers to buy, or otherwise has taken or
will take any other action negotiated in respect of,
any security, under circumstances that would require
the registration of the Consideration Shares under
the 1933 Act; or (ii) has engaged or will engage in
any form of "general solicitation" or "general
advertising"
-32-
(as defined in Regulation D) in connection with
the sale of the Consideration Shares in the
United States;
1.2.10 neither NAPL, nor any of its affiliates (as defined
in Rule 405 under the Securities Act) ("Affiliates"),
nor any persons acting on its or their behalf has
engaged or will engage in any "directed selling
efforts" (as defined in Regulation S) with respect to
the Consideration Shares;
1.2.11 NAPL has not distributed and none of its Affiliates
have distributed and, prior to the later to occur of
(i) the closing and (ii) completion of the
distribution of the Consideration Shares, neither
NAPL nor any of its Affiliates shall distribute any
offering material in connection with the offering and
sale of the Consideration Shares; and
1.2.12 there are no legal or governmental proceedings
pending or, to the knowledge of NAPL, threatened that
may prevent the sale of the Consideration Shares as
contemplated hereby or permit the unwinding of such
sales and the clawback of the Consideration Shares.
1.3 GFF AND GFBV REPRESENTATIONS AND WARRANTIES
Each of GFBV and GFF represents and warrants to NAPL and NAPF
that as of the date of this Agreement the representations and
warranties set forth in this Clause 1.3 are true and correct
(and such representations and warranties shall survive the
execution and delivery of this Agreement and continue in full
force and effect thereafter):
1.3.1 GFAP has, at all times, conducted its business in
compliance with all Applicable Laws;
1.3.2 Each of GFF and GFAP has good and valid title to all
of its material properties and assets, including
without limitation in respect of the APP Property,
free and clear from any material claims and
Encumbrances other than as set out in Schedule 8;
1.3.3 GFBV has all necessary corporate power to grant the
Option and to perform its obligations relating
thereto;
1.3.4 The Option constitutes the legal, valid and binding
obligation of GFBV enforceable against GFBV in
accordance with its terms;
1.3.5 The shares constituting the Purchased Interest and
covered by the Option subject to (i) purchase and
sale, have been validly allotted and issued, are
fully paid up and are legally and beneficially owned
by GFBV free of any Encumbrances, and no commitment
has been given by GFBV to sell, transfer or assign
any ownership interest in such shares (except
pursuant to the Option) or create an Encumbrance
affecting such shares and no person has
claimed any right in connection with any of those
things, and (ii) subject to subscription, shall be
validly allotted and issued as fully paid up shares
free of any Encumbrance, and subject to no
commitment by GFF to issue such
-33-
shares (except pursuant to the Option)
or create an Encumbrance affecting such shares;
1.3.6 GFBV has made available to NAPL all relevant
information in its possession and control concerning
GFF and GFAP and title to the APP Project Licenses
and the technical information, data, records,
engineering, trade secrets, maps, plans and drawings
relating to the APP Project Licenses;
1.3.7 GFAP holds the APP Project Licenses and Mineral
Rights and such APP Project Licenses and Mineral
Rights are, to the extent described in Schedule 5,
sufficient, current and in full force and effect;
Schedule 5 sets forth a true, complete and accurate
listing of the APP Project Licenses and Mineral
Rights and the status thereof and NAPL has been
provided with a true and correct copies thereof;
1.3.8 to the best of GFBV's and GFF's knowledge, the APP
Project Licenses and Mineral Rights attaching thereto
(as described in Schedule 5) have been properly
staked or otherwise properly constituted, as
applicable, and are valid and in good standing to the
date hereof, in accordance with Applicable Law;
1.3.9 Schedule 9 sets forth a true, complete and accurate
listing of the Property Agreements; NAPL has been
provided with a true and correct copy of each of the
Property Agreements;
1.3.10 each of GFBV, GFF and GFAP has not entered into any
material agreements and has not made any material
commitment in respect of the APP Project Licenses
other than the Property Agreements, or other than
those otherwise disclosed in writing to NAPL;
1.3.11 to the best of GFBV's and GFF's knowledge, and except
as otherwise provided herein, there is no judgment,
decree, injunction, ruling or order of any court,
Governmental Authority, instrumentality or arbitrator
and no claim, suit, action, litigation, arbitration
or governmental proceeding in progress, pending or
threatened against or relating to, and affecting any
part of the land covered by the APP Project Licenses
which prevents or which seeks to prevent it from
entering into and performing its obligations
hereunder and the transaction contemplated hereby;
1.3.12 to the best of GFBV's and GFF's knowledge, the APP
Project Licenses and the activities and operations
that have been carried out thereon have been in
compliance in all material respects with all
Applicable Laws and directives of all Governmental
Authorities and it has not received notice of
non-compliance from any such Government Authorities;
1.3.13 each of GFF and GFAP has not entered into any labour
contracts, collective bargaining agreements, or any
other labour-related obligations and liabilities
which may affect the APP Project Licenses
-34-
or any operations conducted thereon other than as
disclosed to NAPL in writing;
1.3.14 to the best of GFBV's and GFF's knowledge, all the
lands covered by the APP Project Licenses are free
and clear of any hazardous substance, as such term is
defined under Applicable Law, and there is no
judicial or administrative proceeding pending and no
environmental order has been issued or, to the best
of its knowledge, threatened, concerning the possible
violation of any Applicable Law or environmental
orders in respect of the APP Project Licenses;
1.3.15 to the best of GFBV's and GFF's knowledge, all
environmental approvals required with respect to
current activities carried out by it on any part of
the land covered by the APP Project Licenses, have
been obtained, are valid and in full force and
effect, have been complied with and there have been
and are no proceedings commenced or threatened to
revoke or amend any such environmental approvals; and
1.3.16 the indebtedness of each of GFF and GFAP, other than
the indebtedness owed to Orogen, do not exceed the
cash and cash equivalents of each of GFF and GFAP,
respectively.
1.4 GFBV REPRESENTATIONS AND WARRANTIES
GFBV represents and warrants to NAPL that as of the date of
issuance of the Consideration Shares the representations and
warranties set forth in this Clause 1.4 are true and correct.
1.4.1 GFBV understands that the Consideration Shares have
not been registered under the United States
Securities Act of 1933, as amended (the "1933 Act")
or any applicable state securities laws and that the
contemplated issuance would be made in reliance on a
private placement exemption;
1.4.2 GFBV has had access to such additional information,
if any, concerning NAPL as it has considered
necessary in connection with its investment decision
to acquire the Consideration Shares pursuant to the
terms of the Agreement;
1.4.3 GFBV has such knowledge and experience in financial
and business matters as to be capable of evaluating
the merits and risks of its investment in the
Consideration Shares pursuant to the terms of the
Agreement, and is able to bear the economic risks of
such investment;
1.4.4 GFBV is an "institutional" accredited investor within
the meaning of Rule 501(a)(3) of Regulation D under
the 1933 Act and if it acquires the Consideration
Shares pursuant to the terms of the Agreement, it
does so for its own account, and not with a view to
any resale, distribution or other disposition of the
Consideration Shares in violation of United States
securities laws or applicable state securities laws;
-35-
1.4.5 GFBV acknowledges that it has not agreed to acquire
the Consideration Shares pursuant to the terms of the
Agreement as a result of any general solicitation or
general advertising (as those terms are used in
Regulation D under the ▇▇▇▇ ▇▇▇) including, but not
limited to, any advertisements, articles, notices or
other communications published in any newspaper,
magazine or similar media or broadcast over radio or
television or the Internet or any seminar or meeting
whose attendees have been invited by general
solicitation or general advertising;
1.4.6 GFBV agrees that if it decides to offer, sell or
otherwise transfer any of the Consideration Shares
issued to it pursuant to the terms of the Agreement,
such Consideration Shares may be offered, sold or
otherwise transferred only (i) to NAPL, (ii) in an
offshore transaction complying with Rule 903 or 904
of Regulation S under the 1933 Act (iii) within the
United States in accordance with an exemption from
registration under the 1933 Act provided by Rule 144
or 144A thereunder, if available, (iv) in accordance
with any other exemption from registration under the
1933 Act or pursuant to an effective registration
statement that covers resales of securities and in
compliance with any applicable state securities laws;
1.4.7 GFBV understands and acknowledges that upon the
original issuance thereof, and until such time as the
same is no longer required under applicable
requirements of the 1933 Act or applicable state
securities laws, certificates representing
Consideration Shares, and all certificates issued in
exchange therefor or in substitution thereof, shall
bear the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "1933 ACT"). THE HOLDER HEREOF,
BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT
OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) IN AN OFFSHORE TRANSACTION COMPLYING
WITH RULE 903 OR 904 OF REGULATION S UNDER THE 1933
ACT (C) IN COMPLIANCE WITH AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE 1933 ACT PROVIDED
BY RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS
(D) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE
STATE SECURITIES LAWS, AND THE HOLDER HAS, PRIOR TO
SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF
COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN
EITHER CASE REASONABLY SATISFACTORY TO THE COMPANY,
OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT THAT COVERS RESALES OF SECURITIES.
-36-
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE
"GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA. AT ANY TIME THAT THE
COMPANY IS A "FOREIGN ISSUER" WITHIN THE MEANING
OF REGULATION S AT THE TIME OF SALE, A NEW
CERTIFICATE BEARING NO LEGEND, THE DELIVERY OF
WHICH WILL CONSTITUTE "GOOD DELIVERY"MAY BE
OBTAINED FROM THE COMPANY'S TRANSFER AGENT, UPON
DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED
DECLARATION, IN A FORM SATISFACTORY TO THE
COMPANY'S TRANSFER AGENT AND THE COMPANY, TO THE
EFFECT THAT SUCH SALE IS BEING MADE IN ACCORDANCE
WITH RULE 903 OR RULE 904 OF REGULATION S UNDER
THE 1933 ACT. THE COMPANY OR ITS TRANSFER AGENT
MAY ALSO REQUIRE AN OPINION OF COUNSEL FROM THE
SELLER IN CONNECTION WITH ANY OFFER, SALE OR
TRANSFER OF THE SECURITIES REPRESENTED HEREBY OR
THE REMOVAL OF THIS LEGEND IN CONNECTION
THEREWITH";
provided, that if Consideration Shares are being sold
pursuant to Rule 903 or Rule 904 of Regulation S
under the 1933 Act, and provided that the NAPL is a
"foreign issuer" within the meaning of Regulation S
at the time of sale, any such legend may be removed
by providing a declaration to NAPL's transfer agent,
to the effect set forth in Annex A hereto (or as NAPL
may prescribe from time to time and, if required by
the transfer agent, an opinion of counsel of
recognized standing reasonably satisfactory to the
transfer agent, that such legend is no longer
required under applicable requirements of the 1933
Act); and provided, further, that, if any such
Consideration Shares are being sold pursuant to Rule
144 under the 1933 Act, the legend may be removed by
delivery to NAPL's transfer agent and NAPL an opinion
of counsel, of recognized standing reasonably
satisfactory to NAPL, that such legend is no longer
required under applicable requirements of the 1933
Act or state securities laws;
1.4.8 GFBV consents to NAPL making a notation on its
records or giving instructions to any registrar or
transfer agent of the Consideration Shares in order
to implement the restrictions on transfer set forth
and described herein; and
1.4.9 if required by applicable securities legislation,
regulatory policy or order or by any securities
commission, stock exchange or other regulatory
authority, GFBV will execute, deliver and file and
otherwise assist NAPL in filing reports,
questionnaires, undertakings and other documents with
respect to the issue of the Consideration Shares.
-37-
ANNEX A TO SCHEDULE 1
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO: Computershare Investor Services Inc.,
as registrar and transfer agent for the Common Shares of
North American Palladium Ltd.
The undersigned:
o acknowledges that the sale of the securities of North American Palladium Ltd.
to which this declaration relates is being made in reliance on Rule
[903][904] of Regulation S under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act "), and
o certifies that:
1. [IF THE TRANSFER IS TO BE MADE UNDER RULE 904, INSERT -- it
is not an affiliate of North American Palladium Ltd. (as defined in Rule 405
under the U.S. Securities Act),]
2. [IF THE TRANSFER IS TO BE MADE UNDER RULE 904, INSERT --
the offer of the securities was not made to a person in the United States and
either (A) at the time the buy order was originated, the buyer was outside the
United States, or the seller and any person acting on its behalf reasonably
believes that the buyer was outside the United States, or (B) the transaction
was executed on or through the facilities of the Toronto Stock Exchange, and
neither the seller nor any person acting on its behalf knows that the
transaction has been prearranged with a buyer in the United States,]
3. [IF THE TRANSFER IS TO BE MADE UNDER RULE 903, INSERT --
the offer of the securities was not made to a person in the United States and at
the time the buy order was originated, the buyer was outside the United States,
or the seller and any person acting on its behalf reasonably believes that the
buyer was outside the United States.]
4. neither the seller nor any affiliate of the seller nor any
person acting on any of their behalf has engaged or will engage in any directed
selling efforts in the United States in connection with the offer and sale of
the securities,
5. the sale is bona fide and not for the purpose of "washing
off" the resale restrictions imposed because the securities are "restricted
securities" (as that term is defined in Rule 144(a)(3) under the U.S. Securities
Act),
6. the seller does not intend to replace the securities sold
in reliance on Rule [903][904] of Regulation S with fungible unrestricted
securities, and
7. the contemplated sale is not a transaction, or part of a
series of transactions which, although in technical compliance with Regulation
S, is part of a plan or scheme to evade the registration provisions of the U.S.
Securities Act.
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Terms used in this declaration have the meanings given to them in
Regulation S under the Securities Act.
[NAME]
By:
------------------------------
Name:
Dated: Title:
-39-
SCHEDULE 2
FORM OF SHAREHOLDERS' AGREEMENT
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SCHEDULE 3
TRANSFER AND SUBSCRIPTION TERMS
The following terms and conditions are the Transfer and Subscription Terms which
shall apply to issuances, sales and/or subscriptions of Consideration Shares,
Purchased Interests and other Interests, as applicable (in this Schedule, the
"INTERESTS") as provided in the Agreement:
1. TIMING - The completion of the issuance of, purchase and sale of, or
subscription for, the Interests shall occur as soon as practicable but
in any event shall not occur later than seven (7) Business Days after
the obligation of issuance, purchase and sale or subscription, as
applicable, arises under the Agreement.
2. PLACE OF COMPLETION - The completion shall occur at the registered
office for the time being of GFAP (or such other place as may be agreed
between the Parties).
3. DELIVERY FREE OF ENCUMBRANCES - The Interests shall be delivered by
NAPL to GFBV, GFF to NAPL or by GFF to any subscriber, as applicable,
free and clear of any Encumbrances.
4. DOCUMENTATION - At completion, (i) in the case of a purchase and
sale, the seller shall deliver share certificates or other instruments
representing the Interests together with, in the case of shares, share
transfer forms duly executed in blank for transfer and such other
documents as may, in the reasonable opinion of purchaser, be necessary
or desirable or required under Applicable Law in order for the
purchaser (or such Affiliate of the purchaser as may be nominated by
the purchaser by notice in writing delivered not less than two (2)
Business Days prior to completion) to become the registered and
beneficial owner of the purchased Interests free and clear of any
Encumbrances; and (ii) in the case of an allotment and issuance and/or
subscription for Shares, NAPL or GFF, as applicable, shall deliver
share certificates representing the shares being issued and such other
documents as may, in the reasonable opinion the subscriber, be
necessary or desirable or required under Applicable Law in order for
the subscriber (or such Affiliate of the subscriber as may be nominated
by the subscriber by notice in writing delivered not less than two (2)
Business Days prior to completion) to become the registered and
beneficial owner of the shares free and clear of any Encumbrances.
5. RECORDING IN SHAREHOLDERS REGISTER - In the case of Interests
comprising shares, at completion the Parties shall procure that the
purchaser or subscriber (or such Affiliate of the purchaser or
subscriber as may be nominated by the purchaser or subscriber by notice
in writing delivered not less than two (2) Business Days prior to
completion) is recorded on the applicable shareholders register as the
registered owner of such shares and that new certificates in the name
of the purchaser or subscriber or such Affiliate of the purchaser or
subscriber, as the case may be, representing such shares is issued and
delivered to the purchaser, subscriber or such Affiliate.
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SCHEDULE 4
FORM OF MD AGREEMENT
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SCHEDULE 5
LICENSES AND MINERAL RIGHTS
-43-
SCHEDULE 6
EFFECT OF TERMINATION
In the event of termination of the Agreement in accordance with Clause 2.4 of
the Agreement, GFBV shall purchase and NAPL shall sell all of the issued and
outstanding shares of NAPF for the nominal consideration of one Euro upon and in
accordance with the Transfer and Subscription Terms and NAPL shall give the
representations and warranties set out in paragraphs 1.2.7 and 1.2.8 of Schedule
1, as well as a representation and warranty that NAPF has no liabilities, actual
or contingent (such representations and warranties to be true and correct as at
the date of transfer of the NAPF shares to GFBV and to survive the date of such
transfer and to remain in full force and effect thereafter) .
For greater certainty, any amount of Approved Earn-in Expenditures funded by
Advances prior to such date of termination in accordance with Clause 7.2 of the
Agreement shall not be reimbursed to any member of the NAPL Group.
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SCHEDULE 7
TRANSFER OF PURCHASED INTEREST
In the event that NAPL has exercised the Option to acquire the Purchased
Interest, the acquisition thereof shall be implemented in accordance with the
following steps, it being recognized that the Transfer and Subscription Terms
apply to the subscriptions and transfers set out in Steps 1 and 2 below:
1. NAPL will subscribe for newly issued ordinary shares of GFF for a cash
consideration equal to the full amount of all Advances made by NAPL
(through its subsidiary NAPF) pursuant to the terms of Clause 7.2 (in
this Schedule, the "ADVANCED AMOUNT").
2. NAPL will acquire such number of GFF Shares from GFBV as would result
in NAPL owning, in combination with the shares of GFF subscribed for in
step 1 of this Schedule 7, such number of GFF Shares as would equal 50%
or 60%, as applicable, of the issued and outstanding GFF Shares.
3. GFF will use the Advanced Amount of cash received from the share
subscription in step 1 to subscribe for additional ordinary shares of
GFAP.
4. GFAP will use the Advanced Amount of cash received from the share
subscription in step 3 to repay the full amount of the Advances made by
NAPF pursuant to the terms of Clause 7.2.
5. NAPF will distribute the proceeds received on the repayment of its
loan in step 4 to NAPL as a reduction of its share capital.
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SCHEDULE 8
ENCUMBRANCES
1. Certain of the APP Project Licenses are subject to the terms and conditions
of the Purchase Agreement dated 9 April 2002 by and between South Atlantic
Resources Limited, North Atlantic Resources Ab and the Arctic Platinum
Partnership (now GFAP).
-46-
SCHEDULE 9
PROPERTY AGREEMENTS
-47-
SCHEDULE 10
FORM OF SERVICES AGREEMENT
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