EXHIBIT 99.4
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT, dated as of June 10, 2002 (this "AGREEMENT") is made and
entered into by and between Echo Bay Mines Ltd. ("ECHO BAY"), Newmont Mining
Corporation of Canada Limited (the "SHAREHOLDER") and its parent Newmont Mining
Corporation ("NEWMONT");
WHEREAS Kinross Gold Corporation ("KINROSS"), TVX Gold Inc. ("TVX") and Echo Bay
have entered into an agreement coincident with the execution of this Agreement
dated as of June 10, 2002 (the "COMBINATION AGREEMENT"), a true and complete
copy of which has been delivered to the Shareholder and is attached as Schedule
A hereto, pursuant to which Kinross, TVX and Echo Bay have agreed to take all
necessary steps to create a new high quality senior producer by combining their
respective businesses and acquiring the interest of Newmont in the joint venture
between TVX and certain subsidiaries of Newmont (the "COMBINATION");
AND WHEREAS the Combination will include an arrangement carried out under the
provisions of the Canada Business Corporations Act in which Kinross will issue
Kinross Common Shares to holders of common shares of each of TVX and Echo Bay;
AND WHEREAS as an inducement and a condition to entering into the Combination
Agreement, the parties to the Combination Agreement have required that the
Shareholder enter into an agreement to support the Combination and vote its
shares in Echo Bay in favour of the participation of Echo Bay in the
Arrangement;
NOW THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants and agreements contained herein and the benefits to be
received by the parties under the terms of the Combination, the parties hereto
agree as follows:
ARTICLE 1
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DEFINITIONS
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1.1 DEFINITIONS
For purposes of this Agreement, all capitalized terms used but not defined
herein shall have the respective meaning ascribed to them in the Combination
Agreement. The following terms have the meanings set out below:
"ACQUISITION PROPOSAL" means an "Acquisition Proposal" (as defined in the
Combination Agreement) with respect to Echo Bay;
"BENEFICIALLY OWN" or "BENEFICIAL OWNERSHIP" with respect to any security
means all securities which are owned, directly or indirectly or over which
control or direction of the voting or disposition is exercised;
"CHANGE OF CONTROL PROPOSAL" means "Change of Control Proposal" (as
defined in the Combination Agreement) with respect to Echo Bay;
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"MATERIAL" means "Material" (as defined in the Combination Agreement)
in relation to the affairs of Echo Bay;
"SHAREHOLDER'S SHARES" means the 244,994,150 Echo Bay Common Shares
beneficially owned, directly or indirectly, by the Shareholder; and
"SUPERIOR PROPOSAL" means a "Superior Proposal" (as defined in the
Combination Agreement) with respect to Echo Bay.
ARTICLE 2
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AGREEMENT TO VOTE IN FAVOUR OF THE COMBINATION
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2.1 AGREEMENT TO VOTE THE SHAREHOLDER'S SHARES IN FAVOUR OF COMBINATION
(a) Unless this Agreement is terminated in accordance with its terms, the
Shareholder hereby agrees:
(i) at the Echo Bay Meeting or at any adjournment thereof or in
any circumstance upon which a vote, consent or other approval
(including by written consent) with respect to the Arrangement
is sought, to vote the Shareholder's Shares in favour of the
participation of Echo Bay in the Arrangement; and
(ii) that it will not option, sell, transfer, pledge, encumber,
grant a security interest in, hypothecate or otherwise convey
the Shareholder's Shares, or any right or interest therein
(legal or equitable), to any person, entity or group or agree
to do any of the foregoing.
(b) Unless this Agreement is terminated in accordance with its terms,
the Shareholder agrees to deposit with the registrar and transfer
agent of the Echo Bay Common Shares, a duly completed and executed
proxy in respect of all of the Shareholder's Shares, voting all of
such shares in favour of the participation of Echo Bay in the
Arrangement.
(c) The Shareholder agrees that neither it nor any person acting on its
behalf will withdraw or take any action to withdraw, amend or
invalidate the proxy deposited by the Shareholder pursuant to this
Agreement unless this Agreement is terminated in accordance with its
terms.
(d) Newmont agrees to cause the Shareholder to perform its covenants
hereunder on a timely basis.
ARTICLE 3
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REPRESENTATIONS AND WARRANTIES
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3.1 REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER AND NEWMONT
Each of the Shareholder and Newmont hereby represents and warrants to Echo
Bay that:
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(a) it is a corporation duly incorporated and validly existing under the
laws of its jurisdiction of incorporation; it has all necessary
power, authority, capacity and right, and has received all requisite
corporate approvals, to enter into this Agreement and to complete
the transactions contemplated hereby and this Agreement has been
duly executed and delivered by it and constitutes a legal, valid and
binding agreement enforceable by Echo Bay against it in accordance
with its terms subject, however, to limitations with respect to
enforcement imposed by law in connection with bankruptcy, insolvency
and other laws affecting rights of creditors generally, the
equitable power of the courts to stay proceedings before them and
the execution of judgments, the qualification that equitable
remedies such as specific performance and injunction may be granted
only in the discretion of a court of competent jurisdiction from
which they are sought and rights to indemnity and contribution may
be limited by applicable law and provided further that no
representation and warranty is given with respect to the
enforceability of sections 2.1(b) and 2.1(c);
(b) the Shareholder is the sole beneficial owner of the Shareholder's
Shares, and the Shareholder's Shares constitute all of the Echo Bay
Common Shares owned or controlled, directly or indirectly, by the
Shareholder and Newmont and their Subsidiaries. The Shareholder has
the exclusive right to vote the Shareholder's Shares as provided in
this Agreement and the Shareholder is not a party to, bound or
affected by or subject to, any provision, statute, regulation,
judgment, order, decree or law or any indenture, mortgage, trust
deed or other agreement or instrument to which it is a party or by
which it is bound under which default would occur as a result of the
execution and delivery of this Agreement or the performance by
Newmont or the Shareholder of its covenants provided for in this
Agreement;
(c) the Shareholder's Shares are held by the Shareholder with good and
marketable title, free and clear of any and all mortgages, liens,
charges, restrictions, security interests, adverse claims, pledges,
encumbrances and demands or rights of others of any nature or kind
whatsoever;
(d) no person, firm or corporation has any agreement or option, or any
right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option, for the purchase,
requisition or transfer from the Shareholder or Newmont of any of
the Shareholder's Shares, or any interest therein or right thereto,
except pursuant to this Agreement;
(e) neither the Shareholder nor Newmont has previously granted or agreed
to grant any ongoing proxy in respect of the Shareholder's Shares or
entered into any voting trust, vote pooling, shareholders agreement
or other agreement with respect to the right to vote the
Shareholder's Shares, call meetings of shareholders of Echo Bay or
give consents or approvals of any kind as to the Shareholder's
Shares;
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(f) no consent, waiver, approval, authorization, exemption,
registration, license or declaration of or by, or filing with, or
notification to any governmental, administrative or regulatory
authority is required to be made or obtained by Newmont or the
Shareholder in connection with (i) the execution and delivery by
them and the enforcement against either of them of this Agreement or
(ii) the consummation of any transactions by the Shareholder or
Newmont provided for herein except for the filing of press releases
and material change reports under applicable securities legislation;
(g) the Shareholder is not a non-resident of Canada for the purposes of
the Income Tax Act (Canada); and
(h) the consideration to be provided in exchange for the Echo Bay Common
Shares in the Combination was determined by the parties to the
Combination Agreement in circumstances in which the Shareholder had
full knowledge of and access to information concerning Echo Bay such
that the underlying value of Echo Bay was a material factor
considered by the Shareholder in determining whether to vote the
Shareholder's Shares in favour of the Combination and there were no
non-financial factors or other factors peculiar to the Shareholder
which were considered relevant by the Shareholder in assessing the
consideration to be received in exchange for the Shareholder's
Shares which had the effect of reducing the consideration that would
otherwise have been considered acceptable by the Shareholder.
3.2 REPRESENTATIONS AND WARRANTIES OF ECHO BAY
Echo Bay represents and warrants to the Shareholder and Newmont that:
(a) it has entered into the Combination Agreement, a true and complete
copy of which is attached hereto as Schedule A and each of the
Combination Agreement and this Agreement has been duly authorized,
executed and delivered by Echo Bay and constitutes a legal, valid
and binding obligation of Echo Bay enforceable by the other parties
to such agreement against Echo Bay in accordance with their
respective terms, subject, however, to limitations with respect to
enforcement imposed by law in connection with bankruptcy, insolvency
and other laws affecting rights of creditors generally, the
equitable power of the courts to stay proceedings before them and
the execution of judgments, the qualification that equitable
remedies such as specific performance and injunction may be granted
only in the discretion of a court of competent jurisdiction from
which they are sought and rights to indemnity and contribution may
be limited by applicable law;
(b) the execution and delivery of the Combination Agreement and this
Agreement, the consummation by Echo Bay of the transactions
contemplated in the Combination Agreement and this Agreement and
compliance by Echo Bay with the terms of the Combination Agreement
and this Agreement do not and will not result in any violation of
the charter or by-laws or similar documents of Echo Bay or any
Subsidiary and Echo Bay is not a party to, bound or affected by or
subject
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to, any provision, statute, regulation, judgment, order, decree or
law or any indenture, mortgage, trust deed or other agreement or
instrument to which it is a party or by which it is bound which
would be violated, contravened or breached by, or under which
default would occur as a result of, the execution and delivery of
this Agreement, the performance by Echo Bay of its covenants or the
consummation of any of the transactions provided for in this
Agreement;
(c) the special committee or independent committee formed by the Board
of Directors of Echo Bay to consider the participation of Echo Bay
in the Combination has recommended that the Board of Directors
approve Echo Bay's participation in the Combination on the basis set
out in the Combination Agreement and has further recommended that
such Board of Directors recommend to the shareholders of Echo Bay
that they approve its participation in the Combination on such
basis;
(d) the Board of Directors of Echo Bay has determined that:
(i) the Combination is fair to the shareholders of Echo Bay and is
in the best interests of Echo Bay, and
(ii) it will recommend to the shareholders of Echo Bay that they
should vote in favour of the Arrangement;
(e) Echo Bay has received an opinion from its financial advisors that as
of the date of the opinion, the exchange ratio prescribed in the
Combination Agreement is fair to the shareholders of Echo Bay from a
financial point of view; and
(f) the Board of Directors has instructed management of Echo Bay to take
all necessary actions to enable Echo Bay to participate in and
complete the Combination.
ARTICLE 4
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COVENANTS OF THE SHAREHOLDER AND NEWMONT
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4.1 GENERAL
Each of the Shareholder and Newmont hereby covenants that from the date
hereof until the earlier of the Effective Date or the date on which this
Agreement is terminated:
(a) except as permitted by this Agreement, it will not take any action
of any kind which would be inconsistent with the Combination
Agreement, including but not limited to any action to solicit,
initiate, facilitate or knowingly encourage (including by way of
furnishing information or entering into any form of agreement,
arrangement or understanding) the initiation of an Acquisition
Proposal; provided however that the foregoing shall not prevent any
director, officer or employee of the Shareholder or Newmont who is a
director of Echo Bay form responding in his or her capacity as a
director to a bona fide Acquisition Proposal as permitted by the
Combination Agreement;
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(b) it will notify Echo Bay promptly upon becoming aware of any
Acquisition Proposal;
(c) it will use all reasonable commercial efforts to assist Echo Bay and
the other parties to the Combination Agreement to successfully
complete the Combination; and
(d) during the period when Echo Bay is or may be subject to the
provisions of Article 7 of the Combination Agreement, if the
Shareholder wishes to option, sell, transfer, pledge, encumber,
grant a security interest in, hypothecate or otherwise convey all or
substantially all of the Shareholder's Shares, or any right or
interest therein (legal or equitable), to any person or entity or
group of persons or entities acting jointly or in concert (other
than underwriters or agents in the context of a distribution to the
public), or agree to do any of the foregoing, where an offer on the
same terms is not made for all of the shares of the other holders of
Echo Bay Common Shares, it may only do so if it delivers to Echo Bay
an agreement duly executed by such person, entity or group whereby
they become obligated to Echo Bay on substantially similar terms to
those contained in this Agreement.
4.2 COVENANT TO INDEMNIFY
(a) If the Shareholder fails to comply with Section 2.1 of this
Agreement and the holders of Echo Bay Common Shares do not approve
the requisite resolutions by which Echo Bay would participate in the
Arrangement, then Newmont and the Shareholder jointly and severally
agree to indemnify and hold harmless Echo Bay from and against any
and all damages or fees payable by Echo Bay pursuant to section 7.2
of the Combination Agreement; provided that neither the Shareholder
nor Newmont shall be required to indemnify Echo Bay under this
section 4.2(a) if the Board of Directors of Echo Bay has withdrawn
or changed its recommendation with respect to the Arrangement or
recommended in favour of another Acquisition Proposal.
(b) If a bona fide Acquisition Proposal is publicly announced, proposed,
offered or made, and is not withdrawn, to the shareholders of Echo
Bay or to Echo Bay, and the shareholders of Echo Bay do not approve
the requisite resolutions by which Echo Bay would participate in the
Combination, and thereafter the Combination Agreement is terminated
in accordance with its terms and within six months after the
termination, the Shareholder or Newmont enters into or consummates a
Change of Control Proposal, unless (i) such Change of Control
Proposal is recommended by the Board of Directors of Echo Bay or
(ii) a Damages Event under sections 7.1(a), 7.1(c) or 7.1(d) of the
Combination Agreement is, or has previously been, triggered by Echo
Bay, then Newmont and the Shareholder jointly and severally agree to
indemnify and hold harmless Echo Bay from and against any and all
damages or fees payable by Echo Bay pursuant to section 7.1(b) of
the Combination Agreement.
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(c) Nothing in this Section 4.2 shall relieve the parties hereto from
liabilities for any breach of this Agreement.
ARTICLE 5
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COVENANTS OF ECHO BAY
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5.1 MODIFICATION OF THE COMBINATION TERMS
Echo Bay will not, without the prior written consent of the Shareholder,
change or permit the number of Kinross Shares which the holders of Echo Bay
Common Shares or the holders of TVX Common Shares shall have the right to
receive on the Arrangement to change, or amend, modify or change any other term
of the Combination if that amendment would adversely affect Echo Bay or the
interests of its shareholders.
5.2 CALL AND HOLD THE MEETING
Echo Bay will call the Echo Bay Meeting and prepare, in consultation with
Kinross and TVX, the Joint Information Circular with respect to the Meetings,
complying in all material respects with all applicable Laws in effect on the
date of mailing and not containing any misrepresentation, as defined under
applicable Laws, with respect to the Combination and Echo Bay and its
Subsidiaries taken as a whole.
ARTICLE 6
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TERMINATION
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6.1 TERMINATION
Echo Bay, the Shareholder and Newmont (each a "TERMINATING PARTY"),
provided that the terminating party is not then in breach of any of its
representations, warranties or covenants contained herein, may, without
prejudice to any other rights, terminate this Agreement by written notice to the
other parties to this Agreement:
(a) if the Arrangement proposed to the shareholders of Echo Bay does not
correspond in all respects with respect to the exchange ratios or
otherwise does not correspond in all material respects with respect
to other aspects of the Arrangement set forth in the Combination
Agreement;
(b) if the shareholder rights plan of Kinross is not authorized to be
terminated, or is in fact not terminated, prior to the Effective
Date, and the Arrangement cannot otherwise be effected on a tax
deferred "roll-over" basis for Canadian shareholders of Echo Bay
pursuant to the Income Tax Act (Canada); or
(c) if the Combination Agreement is terminated in accordance with its
terms;
provided however, that this Agreement shall automatically terminate on the
Effective Date.
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6.2 EFFECT OF TERMINATION
In the case of any termination of this Agreement pursuant to this ARTICLE
6, this Agreement shall be of no further force and effect. Such termination
shall not relieve any party from liability for any breach of this Agreement
prior to such termination and Sections 4.1(d) and 4.2 shall survive the
termination of this Agreement.
ARTICLE 7
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GENERAL
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7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties shall not survive the completion of the
Combination other than the representations and warranties in section 3.1 of this
Agreement which shall survive for a period of three years after the date of this
Agreement.
7.2 DISCLOSURE
Except as required by applicable Laws, or as required by any Governmental
Entity, judicial or other authority, or in accordance with the requirements of
any stock exchange, none of Echo Bay, Newmont or the Shareholder shall make any
public announcement or statement with respect to this Agreement without the
approval of the other parties, which approval shall not be unreasonably
withheld. The parties agree that Echo Bay shall be permitted to issue the
Announcement Press Release substantially in the form attached as Schedule 2.1 to
the Combination Agreement and furthermore that Echo Bay shall be permitted to
disclose and describe this Agreement in the Joint Information Circular. The
parties agree that Newmont shall also be permitted to issue a press release
substantially in the form previously circulated to Echo Bay in connection with
the announcement of the Combination.
7.3 ASSIGNMENT
This Agreement shall not be assignable without the consent of the other
parties, except that Echo Bay may assign this Agreement to Kinross and TVX.
7.4 TIME
Time shall be of the essence of this Agreement.
7.5 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein.
7.6 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding between
and among the parties hereto with respect to the subject matter hereof and
supersedes any prior agreement,
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representation or understanding with respect thereto, other than the
Confidentiality Agreement and the agreement in respect of the ▇▇▇▇▇/Cove
Purchase.
7.7 AMENDMENTS
This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by all of
the parties hereto.
7.8 SPECIFIC PERFORMANCE AND OTHER EQUITABLE RIGHTS
Each of the parties recognizes and acknowledges that this Agreement is an
integral part of the transactions contemplated in respect of the Combination,
that the parties to the Combination Agreement would not contemplate
participating in the Combination, unless this Agreement was executed and that a
breach by a party or parties of any covenants or other commitments contained in
this Agreement will cause the other party or parties to sustain injury for which
it or they would not have an adequate remedy at law for money damages.
Therefore, each of the parties agrees that in the event of any such breach, the
aggrieved party shall be entitled to the remedy of specific performance of such
covenants or commitments and preliminary and permanent injunctive and other
equitable relief in addition to any other remedy to which it may be entitled, at
law or in equity, and the parties further agree to waive any requirement for the
securing or posting of any bond in connection with the obtaining of any
injunctive or other equitable relief.
7.9 NOTICES
Any notice, request, consent, agreement or approval which may or is
required to be given pursuant to this Agreement shall be in writing and shall be
sufficiently given or made if delivered or telecopied in the case of:
(a) Newmont or the Shareholder, addressed as follows:
Suite 1900, Box, 2005
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Stikeman Elliott
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
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Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to Echo Bay:
Echo Bay Mines Ltd.
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Fraser ▇▇▇▇▇▇ Casgrain LLP
▇▇▇▇, ▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the relevant party may from time to time advise by
notice in writing given pursuant to this section. The date of receipt of any
such notice, request, consent, agreement or approval shall be deemed to be the
date of delivery or facsimile (if during normal business hours or, if not, the
next day).
7.10 EXPENSES
Subject to Section 4.2, each of the parties shall pay its legal, financial
advisory and accounting costs and expenses incurred in connection with the
preparation, execution and delivery of this Agreement and all documents and
instruments executed or prepared pursuant hereto and any other costs and
expenses whatsoever and howsoever incurred.
7.11 SEVERABILITY
The illegality, invalidity or unenforceability in any jurisdiction of any
provision in this agreement or of any covenant herein contained on the part of
any party shall not affect the legality, validity or enforceability of any other
provision or covenant hereof or herein contained and such provision or covenant
shall be ineffective only to the extent of such illegality, invalidity or
unenforceability in such jurisdiction without affecting or impairing the
legality, validity or enforceability of the remaining provisions or covenants
and any such illegality, invalidity or unenforceability shall not affect or
impair such provisions or covenants in any other jurisdiction.
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7.12 COUNTERPARTS.
This Agreement may be executed in one or more counterparts which together
shall be deemed to constitute one valid and binding agreement and delivery of
the counterparts may be effected by means of a facsimile transmission.
ECHO BAY MINES LTD. NEWMONT MINING CORPORATION
OF CANADA LIMITED
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Per: Per:
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NEWMONT MINING CORPORATION
Per: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Per:
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