Dated September 13, 2002
GOLDEN STAR RESOURCES LTD.
as the Sponsor
and
STANDARD BANK LONDON LIMITED
as the Security Trustee
--------------------------------------
SUPPORT AGREEMENT
for
WASSA GOLD PROJECT
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Mayer, Brown, ▇▇▇▇ & Maw
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
TABLE OF CONTENTS
PAGE
1. DEFINITIONS AND INTERPRETATIONS..................................................1
2. GUARANTEE AND INDEMNITY..........................................................6
3. REPRESENTATIONS AND WARRANTIES...................................................9
4. UNDERTAKINGS OF THE SPONSOR.....................................................17
5. NEGATIVE COVENANTS..............................................................22
6. ACKNOWLEDGMENTS AND CONSENTS OF THE SPONSOR.....................................25
7. STEP-IN AND STEP-OUT RIGHTS.....................................................26
8. MISCELLANEOUS PROVISIONS........................................................27
9. GOVERNING LAW AND SUBMISSION TO JURISDICTION....................................35
SCHEDULE 1 Disclosure Schedule
SCHEDULE 2 Form of Compliance Certificate
SCHEDULE 3 Payment Notice
i
THIS SUPPORT AGREEMENT (as amended, modified or supplemented from time to time,
this "AGREEMENT"), dated September 13, 2002, made between:
(1) GOLDEN STAR RESOURCES LTD., a company amalgamated and continuing under
the federal laws of Canada (the "SPONSOR"); and
(2) STANDARD BANK LONDON LIMITED in its capacity as security trustee for the
Finance Parties (in such capacity the "SECURITY TRUSTEE").
WHEREAS:
(A) pursuant to the Loan Agreement, the Lenders have agreed to make certain
loans available to the Borrower on the terms and conditions of the Loan
Agreement;
(B) the Sponsor owns, indirectly, a majority of the outstanding share
capital of the Borrower; and
(C) the Sponsor has determined that the execution, delivery and performance
of this Agreement are within its corporate powers and in its best
interests, and have been duly authorised.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and in order to induce the Lenders to make or
participate in the Loan to the Borrower pursuant to the Loan Agreement and to
enter into the transactions contemplated thereby, the Sponsor agrees, with the
Security Trustee, as follows:
1. DEFINITIONS AND INTERPRETATIONS
1.1 DEFINITIONS
The following terms (whether or not underscored) when used in this
Agreement, including its preamble and recitals, shall have the following
meanings:
"ADDRESS FOR NOTICES" is defined in Clause 8.8;
"AGREEMENT" is defined in the preamble;
"BARNEX AGREEMENT" means the Share Sale Agreement between the Sponsor
and Barnato Exploration Limited dated June 21, 2001.
"COMMON TERMS AGREEMENT" means that certain agreement, dated June 26,
2002, as amended, modified or supplemented from time to time among (1)
Wexford Goldfields Limited, as the borrower, (2) the other Obligors
party thereto from time to time, (3) Standard Bank London Limited, as
the facility agent and the security trustee, and (4) The Law Debenture
Trust Corporation p.l.c., as the initial Royalty Holder;
"COMPLIANCE CERTIFICATE" means a certificate duly executed by an
Authorised Representative of the Sponsor in the form annexed as Schedule
2;
"CURRENT ASSETS" means, in respect of the Sponsor, the sum of its
inventory, trade receivables and other receivables including sundry
debtors (falling due within 12 months);
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"CURRENT LIABILITIES" means, in respect of the Sponsor, the sum of all
its consolidated liabilities falling due within 12 months;
"DISCLOSURE SCHEDULE" means the disclosure schedule attached hereto as
Schedule 1;
"DISPUTE" is defined in Clause 9.2(a);
"EFFECTIVE DATE" is defined in Clause 8.7;
"ENVIRONMENTAL REVIEW STANDARDS" is defined in Clause 3.15(a);
"EXCLUDED OBLIGATIONS" means all Obligations of the Borrower under the
Asset Sale Agreements (excluding any such Obligations arising pursuant
to Clauses 4.1 and of the Asset Sale Agreement, dated 1 March , 2002
and/or Clauses 4.1(a) and 4.2 of the Asset Sale Agreement, dated 15
March, 2002);
"FACILITY A COMMITMENT" has the meaning given to it in the Loan
Agreement;
"FACILITY A OUTSTANDINGS" has the meaning given to it in the Loan
Agreement;
"FINANCIAL INDEBTEDNESS" means any indebtedness in respect of or arising
under or in connection with:
(a) moneys borrowed (including overdrafts); or
(b) money raised including any debenture, bond (other than a
performance bond issued in the ordinary course of trading by one
member of the Group in respect of the obligations of another
member of the Group), note or loan stock or other similar
instrument; or
(c) any acceptance or documentary credit; or
(d) receivables sold or discounted (otherwise than on a non-recourse
basis); or
(e) the acquisition cost of any asset to the extent unconditionally
payable (except for any condition relating to time of payment)
after the time of acquisition or possession by the person liable
as principal obligor for the payment thereof where the deferred
payment is arranged primarily as a method of raising finance or
financing or refinancing the acquisition of the asset acquired
(but not including any royalty payment obligation pursuant to a
Royalty Agreement or the Barnex Agreement); or
(f) the sale price of any asset to the extent paid before the time of
sale or delivery by the person liable to effect such sale or
delivery where the advance payment is arranged primarily as a
method of raising finance or financing or refinancing the
manufacture, assembly, acquisition or holding of the asset to be
sold; or
(g) finance leases, credit sale or conditional sale agreements
(whether in respect of land, buildings, plant, machinery,
equipment or otherwise) which are treated as finance leases in
accordance with GAAP (but not including liabilities under
operating leases); or
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(h) any agreement for managing or hedging currency and/or interest
rate and/or commodity risk provided that where such agreement
provides for netting to occur this paragraph (h) shall include
the net amount of the payment obligation outstanding from the
relevant member of the Group thereunder after such netting-off
has occurred; or
(i) the amount payable under any put option or other arrangement
whereby any member of the Group is liable, at the request of a
third party, to purchase share capital or other securities issued
by it or any other member of the Group; or
(j) the amount payable by any member of the Group in respect of the
redemption of any share capital or other securities issued by it
or any other member of the Group (if the share capital or other
securities are redeemable at the option of their holder or if the
relevant member of the Group is otherwise obliged to redeem
them); or
(k) amounts raised under any other transaction required to be
accounted for as a borrowing; or
(l) any guarantee, indemnity or similar assurance against financial
loss of any person in respect of any indebtedness falling within
paragraphs (a) to (k) inclusive of this definition,
and so that, where the amount of Financial Indebtedness falls to be
calculated, no amount shall be taken into account more than once in the
same calculation;
"GUARANTEED OBLIGATIONS" means all Liabilities of the Borrower now or
hereafter existing (excluding any Liability in respect of any Excluded
Obligations);
"INDEMNIFIED LIABILITIES" is defined in Clause 8.10;
"INDEMNIFIED PARTIES" is defined in Clause 8.10;
"INTEREST" means interest and amounts in the nature of interest paid or
payable in respect of any Financial Indebtedness of any member of the
Group excluding any interest paid or payable on Financial Indebtedness
between any member of the Group and any other member of the Group but
including, without limitation:
(a) the interest element of finance leases;
(b) discount and acceptance fees payable (or deducted) in respect of
any Financial Indebtedness;
(c) fees payable in connection with the issue or maintenance of any
bond, letter of credit, guarantee or other assurance against
financial loss which constitutes Financial Indebtedness and which
is issued by a third party on behalf of a member of the Group;
(d) repayment and prepayment premiums payable or incurred in repaying
or prepaying any Financial Indebtedness; and
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(e) commitment, utilisation and non-utilisation fees payable or
incurred in respect of Financial Indebtedness (but excluding any
fees payable in relation to any borrowing for arranging such
borrowing and which are paid at the commencement of such
borrowing);
"MATERIAL AGREEMENTS" is defined in Clause 3.20;
"NET WORTH" means (in each case calculated at the end of each quarter):
(a) the stated share capital fully paid up and the additional paid in
capital of the Group; plus
(b) the aggregate amount standing to the credit of the Group's
consolidated capital and revenue reserves (including any share
premium account and capital redemption reserve fund); plus or
minus
(c) the amount standing to the credit or debit, as the case may be,
of the consolidated profit and loss account of the Group; less
(d) any dividend or other distribution declared, recommended or made
by any Group Member to the extent such distribution is not
provided for in such accounts; less
(e) the amount of any writing up of the book value of any assets of
any Group Member after the Effective Date or, in the case of a
company becoming a subsidiary after the Effective Date, after the
date of its becoming a subsidiary; less
(f) the amount of any sums required to be set aside for taxation
payable by any Group Member and not provided for in such
accounts; less (if not already deducted)
(g) any amount attributable to minority interests; less
(h) any amount attributable to goodwill or other intangible assets of
the Group but after adding back any amortised goodwill;
"OPERATING CASH FLOW" means the net cash provided by the operating
activities of the Group after adding back interest expense, in each case
determined in accordance with GAAP;
"PARTY" means a party to this Agreement;
"PAYMENT CURRENCY" is defined in Clause 8.14(a)(i);
"PAYMENT NOTICE" means a notice substantially in the form of Schedule 3
hereto;
"PROCESS AGENT" is defined in Clause 9.6(a);
"RELEVANT CURRENCY" is defined in Clause 8.14(a)(i);
"SEC" means the U.S. Securities and Exchange Commission;
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"SECURITY TRUSTEE" is defined in the preamble;
"SPONSOR" is defined in the preamble;
"STEP-IN DATE" means the date specified in the Step-in Notice as the
date for assumption of the obligations of the Borrower under the
Management Agreement;
"STEP-IN NOTICE" means a written notice served by the Security Trustee
on the Sponsor pursuant to Clause 7.1;
"STEP-IN PERIOD" means the period from (and including) the Step-in Date
to (and excluding) the earlier of:
(a) the Step-out Date; and
(b) the date which is one year after the Step-in Date.
"STEP-OUT DATE" means the date specified in the Step-out Notice as the
date for the termination of the obligations of the Substitute Entity
under the Management Agreement;
"STEP-OUT NOTICE" means a written notice served by the Security Trustee
or a Substitute Entity pursuant to Clause 7.5;
"SUBSTITUTE ENTITY" means the person appointed by the Security Trustee
for the purposes of assuming the rights and obligations of the Borrower
under the Management Agreement;
"SUSPENSION PERIOD" has the meaning provided in Clause 5.9;
"TAX CREDIT" is defined in Clause 8.12;
"TAX PAYMENT" is defined in Clause 8.12; and
"TAXES" is defined in Clause 8.11(a).
"TERMINATION ACTION" has the meaning provided in Clause 5.9;
"TERMINATION DATE" means the later of:
(a) the Discharge Date;
(b) the date on which all Liabilities to each Finance Party have been
irrevocably and fully discharged; and
(c) the date on which the last shipment of Gold has occurred and the
Mine has been closed in accordance with the Development Plan.
"TERMINATION NOTICE" means a written notice served by the Sponsor on the
Security Trustee pursuant to Clause 5.9.
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1.2 INTERPRETATION.
Unless a clear contrary intention appears, this Agreement shall be
construed and interpreted in accordance with the provisions set forth
below:
(a) the parties hereto intend that this Agreement shall take effect
as a deed.
(b) capitalised terms used but not defined in this Agreement
(including the preamble hereto) have the same meanings as in the
Common Terms Agreement; and
(c) this Agreement is a Finance Document and shall be interpreted and
construed in accordance with the terms and provisions of the
Common Terms Agreement (including Clauses 1.2 to 1.5 thereof
which are hereby incorporated into this Agreement with all
necessary consequential changes).
2. GUARANTEE AND INDEMNITY
2.1 GUARANTEE AND INDEMNITY
The Sponsor hereby irrevocably and unconditionally:
(a) guarantees to each Finance Party the due and punctual observance
and performance of all the Guaranteed Obligations and agrees to
pay to the Security Trustee on demand the Guaranteed Obligations
which shall not have been paid by the Borrower at the time such
demand is made; and
(b) agrees as a primary obligation to indemnify each Finance Party on
demand by the Security Trustee from and against any cost, loss or
liability incurred or suffered by such Finance Party as a result
of any of the Guaranteed Obligations being or becoming void,
voidable, unenforceable, invalid, illegal or ineffective as
against the Borrower for any reason whatsoever, whether or not
known to such Finance Party or any other person. The amount of
such cost, loss or liability shall be the amount which such
Finance Party would otherwise have been entitled to recover from
the Borrower.
2.2 ADDITIONAL SECURITY
The obligations of the Sponsor herein contained shall be in addition to
and independent of every other security which any Finance Party may at
any time hold in respect of any of the Guaranteed Obligations and shall
not be prejudiced in any way by any such security.
2.3 RELEASE OF OBLIGATIONS
The obligations of the Sponsor herein contained shall constitute and be
continuing obligations notwithstanding any settlement of account or
other matter or thing whatsoever, and in particular, but without
limitation, shall not be considered satisfied by any intermediate
payment or satisfaction of any of the Guaranteed Obligations and shall
continue in full force and effect; provided, however, that the Sponsor's
obligations pursuant to Clause 2.1 shall (subject to Clause 2.10) cease
on the earlier of:
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(a) the Release Date (other than in respect of any demand for payment
made prior to the Release Date); and
(b) the date on which all of the Facility A Outstandings, together
with all interest thereon and any costs in relation thereto for
which the Borrower is liable pursuant to any Finance Document
shall have been irrevocably and unconditionally paid and
discharged in full and the Lenders shall be under no further
obligations to advance funding pursuant to the Loan Agreement.
2.4 RIGHTS NOT AFFECTED
Neither the obligations of the Sponsor herein contained nor the rights,
powers and remedies conferred in respect of the Sponsor upon the Finance
Parties by this Agreement (whether pursuant to this Clause 2 or
otherwise) or by law shall be discharged, impaired or otherwise affected
by:
(a) the winding-up or dissolution of the Borrower or any change in
the Borrower's status, function, control or ownership;
(b) any of the Guaranteed Obligations being or becoming illegal,
invalid, unenforceable or ineffective in any respect;
(c) time or other indulgence being granted or agreed to be granted to
the Borrower or any other person in respect of the Guaranteed
Obligations;
(d) any amendment to, or any variation, waiver or release of, any
Guaranteed Obligation except if, and to the extent that, the
obligations of the Borrower are actually expressly reduced with
the consent of the Finance Parties;
(e) the taking, variation, compromise, exchange, renewal or release
of or refusal or neglect to perfect, take up or enforce, any
rights against, or security over assets of, the Borrower or any
other person or any non-presentation or any instrument or any
failure to realise the full value of any security;
(f) any other act, event or omission which, but for this Clause 2.4,
might operate to discharge, impair or otherwise affect any of the
obligations of the Sponsor herein contained or any of the rights,
powers or remedies conferred upon the Finance Parties by this
Agreement or by law; or
(g) any incapacity or lack of power, authority or legal personality
of, or dissolution or change in the members or status of the
Borrower or any other person.
2.5 CONDITIONAL SETTLEMENT
Any settlement or discharge between the Sponsor and any Finance Party
shall be conditional upon no security or payment to such Finance Party
by any Obligor or any other person on behalf of any Obligor being
avoided or reduced by virtue of any provisions or enactments relating to
bankruptcy, insolvency or liquidation for the time being in force and,
if any such security or payment is so avoided or reduced the liability
of each Obligor shall continue as if the settlement or discharge had not
occurred and each Finance Party shall be entitled to recover the value
or amount of
7
such security or payment from the Sponsor subsequently as if such
settlement or discharge had not occurred.
2.6 RETENTION OF GUARANTEE
The Security Trustee may following repayment of all of the Guaranteed
Obligations in its absolute discretion retain an original counterpart of
this Agreement for a period of 25 months after the Guaranteed
Liabilities shall have been paid and discharged in full. If at any time
within that period of 25 months a petition is presented to a competent
court for a winding-up or administration order to be made in respect of
any of the Obligors or steps are taken to wind up any of the Obligors
voluntarily, then the Security Trustee may continue to retain an
original counterpart of this Agreement for such further period as the
Security Trustee in its absolute discretion shall determine.
2.7 NO OBLIGATION TO TAKE ACTION
No Finance Party shall be obliged and the Sponsor waives any rights it
may have of first requiring any Finance Party, before exercising any of
the rights, powers or remedies conferred upon it in respect of the
Sponsor by this Agreement or by law:
(a) to make any demand of any Obligor;
(b) to take any action, obtain judgment in any court against or
otherwise exhaust its remedies against any Obligor;
(c) to make or file any claim or proof in a winding-up or dissolution
of any Obligor; or
(d) to enforce or seek to enforce any other security taken in respect
of any of the Guaranteed Obligations.
This waiver applies irrespective of any law or any provision of a
Finance Document to the contrary.
2.8 SPONSOR NOT TO TAKE ACTION
The Sponsor agrees that, so long as any of the Guaranteed Obligations
are or may be owed by the Borrower, or the Borrower is under any actual
or contingent obligations in connection therewith, the Sponsor shall not
exercise any rights which the Sponsor may at any time have by reason of
performance by it of its obligations hereunder:
(a) to be indemnified by or to seek reimbursement from the Borrower;
and/or
(b) to claim any contribution from any other guarantor of the
Guaranteed Obligations; and/or
(c) to take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of any Finance Party
hereunder or of any other security taken pursuant to, or in
connection with, the Common Terms Agreement or any other Finance
Document by any Finance Party.
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2.9 SUSPENSE ACCOUNT
If the Borrower is wound up, goes into liquidation, becomes bankrupt or
makes any composition or arrangement with its creditors, neither the
existence of the guarantee or indemnity contained in this Clause 2, the
rights of any Finance Party pursuant to Clause 4, nor any monies
received or recovered by any Finance Party pursuant to this Clause 2 or
Clause 4 shall impair the right of such Finance Party to prove in such
winding up, liquidation, bankruptcy, composition or arrangement for the
total amount due from the Borrower and, to this end or so as to preserve
intact the obligations of any person answerable for any part of such
total amount, any Finance Party may at any time and after any such event
takes place and, for so long as such Finance Party thinks fit prior to
satisfaction in full of each of the Sponsor's obligations under this
Agreement, keep any monies received or recovered under this Agreement in
a separate or suspense account, in such name as such Finance Party
thinks fit, without any intermediate obligation on the part of such
Finance Party to apply the same in or towards discharge of any part of
such total amount.
2.10 LIMITATION OF LIABILITY
The Sponsor's liability pursuant to this Deed shall be limited to:
(a) in respect of Clause 2.1, the Facility A Outstandings from time
to time, together with accrued and unpaid interest thereon and
any cost incurred by any Finance Party in relation thereto for
which the Borrower is liable pursuant to Clause 15.3 of the
Common Terms Agreement; and
(b) in each other case, any loss suffered by any Finance Party as a
result of a breach by the Sponsor of any of its obligations
pursuant to this Deed.
3. REPRESENTATIONS AND WARRANTIES
3.1 MAKING OF REPRESENTATIONS AND WARRANTIES
The representations and warranties set forth in this Clause shall be
made:
(a) on the date of this Agreement;
(b) upon the delivery of each Utilisation Request delivered on or
after the New Ownership Date;
and shall be deemed to have been made on:
(c) each Utilisation Date on or after the New Ownership Date (both
immediately before and immediately after the application of the
proceeds of the relevant Loans);
(d) the New Ownership Date;
(e) the Economic Completion Date;
(f) the Release Date;
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(g) any date on which any person grants further security pursuant to
any Finance Document on or after the New Ownership Date;
(h) any date the Borrower enters into a Royalty Agreement other than
the First Royalty Agreement;
(i) any date when any person accedes to or becomes party to any
Finance Document as an Obligor on or after the New Ownership
Date; and
(j) on the last day of each twelve monthly period ending after the
New Ownership Date;
provided, however, that no such representation or warranty (other than
those in Clauses 3.13, 3.14, 3.18) shall be made, or deemed to be made,
at any time after the Release Date.
3.2 ORGANISATION, POWER, AUTHORITY, ETC
The Sponsor:
(a) is duly qualified to do business and is in good standing (where
such concept is applicable) as a foreign company in each
jurisdiction where the nature of its business makes such
qualification necessary and where the failure to so qualify would
have a Materially Adverse Effect on it;
(b) has full power and authority, and holds all requisite Approvals,
to own and hold under lease its property, to ▇▇▇ and to be sued
in its own name and to conduct its business substantially as
currently conducted by it; and
(c) has full power and authority to enter into and perform its
obligations under this Agreement and the other Operative
Documents executed or to be executed by it.
3.3 DUE AUTHORISATION; NON-CONTRAVENTION
The execution and delivery by the Sponsor of this Agreement and each
other Operative Document executed or to be executed by it and the
performance by it of its obligations hereunder and thereunder:
(a) has been duly authorised by all necessary corporate action on its
part and do not require any Approval, except where failure to
obtain such Approval could not lead to a Materially Adverse
Effect with respect to the Sponsor;
(b) do not and will not conflict with, result in any violation of, or
constitute any default under, any provision of any Requirement of
Law or Approval binding on it, except where such conflict,
violation or default could not lead to a Materially Adverse
Effect with respect to the Sponsor;
(c) will not result in or require the creation or imposition of any
lien on any of its properties pursuant to the provisions of any
Contractual Obligation); and
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(d) will not cause any borrowing, negative pledge or other limitation
on it or the powers of the directors or other officers of the
Sponsor to be exceeded.
3.4 VALIDITY, ETC
This Agreement constitutes, and each other Operative Document executed
or to be executed by the Sponsor constitutes, or on the due execution
and delivery by it thereof will constitute, the legal, valid, and
binding obligation of the Sponsor enforceable against it in accordance
with its terms (subject, as to enforcement, to bankruptcy and insolvency
laws and other similar laws of applicability to creditors generally and
to general equitable principles).
3.5 LEGAL STATUS; NO IMMUNITY
Neither the Sponsor nor any of its properties or revenues enjoys any
right of immunity from suit, set-off, attachment, execution, attachment,
judgment or other legal process in respect of the Sponsor's obligations
under any of the Operative Documents to which it is a party.
3.6 FINANCIAL INFORMATION
All balance sheets and all statements of profit and loss and cash flow
and all other financial information relating to the Sponsor which has
been furnished by or on behalf of the Sponsor to a Finance Party for the
purposes of or in connection with any Finance Document or any
transaction contemplated thereby, including the most recent consolidated
balance sheet of the Sponsor filed with the U.S. Securities and Exchange
Commission, and the related consolidated statements of profit and loss
and cash flow of the Sponsor have been prepared in accordance with GAAP
consistently applied throughout the periods involved (except as
disclosed therein) and present fairly the financial position of the
Sponsor as at the dates thereof and the results of its operations for
the periods then ended. The Borrower does not have any material
contingent liability or liability for taxes, long-term leases or unusual
forward or long-term commitments (in each case incurred on or after the
New Ownership Date) which are not reflected in the financial statements
described in this Clause or in the notes thereto.
3.7 ABSENCE OF DEFAULT
(a) The Sponsor is not in default in the payment of (or in the
performance of any material obligation applicable to) any
indebtedness;
(b) No Default is outstanding or would result (or has resulted) from
the making of any Loan; and
(c) The Sponsor is not in default under any material provision of any
Operative Document to which it is party, any material Requirement
of Law or the terms or conditions upon which any Approval has
been granted.
3.8 LITIGATION, ETC.
There is no pending or, to the knowledge of the Sponsor, threatened
litigation, arbitration, employment dispute or governmental
investigation or proceeding against
11
the Sponsor or to which any of its business, operations, properties,
assets (including the Mine), revenues or prospects is subject which, if
adversely determined, could reasonably have a Materially Adverse Effect
with respect to the Sponsor. In the case of any litigation so disclosed,
there has been no development in such litigation since the Effective
Date which could reasonably have a Materially Adverse Effect with
respect to the Sponsor.
3.9 MATERIALLY ADVERSE EFFECT
Since the New Ownership Date, there have been no occurrences which,
individually or in the aggregate, could reasonably be expected to have a
Materially Adverse Effect with respect to the Sponsor.
3.10 BURDENSOME AGREEMENTS
The Sponsor is not a party or subject to any Contractual Obligation or
Organic Document which has or may reasonably be expected to have a
Materially Adverse Effect on it.
3.11 TAXES AND OTHER PAYMENTS
The Sponsor has:
(a) except as disclosed in filings made with the SEC, filed all tax
returns and reports required by Applicable Law to have been filed
by it; and
(b) paid all taxes and governmental charges due and owing and all
claims for sums due for labour, material, supplies, personal
property and services of every kind and character provided with
respect to, or used in connection with its business and no claim
for the same exists except as permitted hereunder, except any
such taxes, charges or amounts:
(i) in respect of which the relevant invoice or demand for
payment was issued not more than 120 days prior to the
payment thereof (and in respect of which the Sponsor will
pay prior to the end of such period); or
(ii) which are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its
books.
3.12 SUBSIDIARIES
As at the New Ownership Date, the Sponsor has no subsidiaries other than
those referred to in Item 1 ("SUBSIDIARIES") of the Disclosure Schedule.
3.13 PROJECT DOCUMENTS
(a) Except as disclosed in writing and agreed to by the Security
Trustee, each of the Project Documents to which the Sponsor is a
party is:
(i) in full force and effect;
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(ii) enforceable by the Sponsor against all other parties
thereto in accordance with its terms (subject, as to
enforcement, to bankruptcy and insolvency laws and other
laws of applicability generally and to general equitable
principles); and
(iii) in the form previously or concurrently delivered to the
Facility Agent or the Security Trustee pursuant to the
relevant Finance Document.
(b) All material performance required under each Project Document of
the Sponsor (and, to the best of the knowledge of the Sponsor, of
each other party) has occurred (except performance required by
any relevant Project Document to be performed at a later date),
and no default (however denominated or described) in the
performance of the obligations of the Sponsor (or, to the best of
the knowledge of the Sponsor, of any other party) under any
Project Document to which the Sponsor is a party has occurred and
is continuing.
3.14 ADEQUACY OF INFORMATION
The Sponsor represents and warrants that:
(a) the factual statements contained (or if not yet provided to any
Finance Party, will contain when so provided) in each of the
Development Plan, Environmental Impact Statement and Insurance
Summary, based upon the assumptions stated therein, have been or
will be prepared with due care, are true and correct in all
material respects and do not and will not omit to state any
information or fact the omission of which might render any
conclusion or statement contained in any such document misleading
in any material respect;
(b) the Development Plan contains (or if not yet provided to any
Finance Party, will contain when so provided) summary
descriptions of the Project Assets and the Project and the
operation of the Mine as proposed to be conducted throughout the
Project Period;
(c) the Environmental Impact Statement, the Technical Review and the
Insurance Summary contain (or if not yet provided to any Finance
Party, will contain when so provided) summary descriptions of the
environmental, technical and insurance aspects respectively of
the Project Assets and the Project and the operation of the Mine
as now conducted and as proposed to be conducted throughout the
Project Period; and
(d) the financial projections, estimates and other expressions of
view as to future circumstances contained (or if not yet provided
to any Finance Party, will contain when so provided) in the
Development Plan are fair and reasonable and, to the best of the
Sponsor's knowledge, have been (or, if not yet provided, will be
when provided) arrived at after reasonable enquiry and have been
made in good faith by the persons responsible therefor.
3.15 ENVIRONMENTAL WARRANTIES
The Sponsor represents and warrants that:
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(a) all facilities and property (including underlying groundwater)
owned, operated, leased or utilised by any Obligor or, so far as
such Obligor is aware having made enquiry, any other Project
Party (in each case) in connection with the Project have been
(from the New Ownership Date), and will continue to be (including
from the date of delivery of the initial Environmental Impact
Statement pursuant to Clause 2.2(a) of the Common Terms
Agreement), owned, operated, leased or utilised by such person in
compliance with the standards set out in, referred to or utilised
by the Environmental Impact Statement (the "ENVIRONMENTAL REVIEW
STANDARDS") and in compliance with all Environmental Laws except
where any failure to so comply:
(i) would not reasonably be expected to have a Materially
Adverse Effect with respect to such Obligor; or
(ii) has not resulted in, and would not reasonably be likely to
result in, any action being taken by any Governmental
Agency or any other person;
(b) there has not been since the New Ownership Date any past, and
there are no pending or, to its knowledge, threatened:
(i) claims, complaints, notices or requests for information
received by it or, so far as it is aware, having made
reasonable enquiry, any other Project Party in connection
with the Project with respect to any alleged violation of
Environmental Review Standards or any Environmental Law;
or
(ii) claims, complaints, notices or inquiries to it, or so far
as it is aware having made reasonable enquiry, such
Project Party in connection with the Project regarding
potential liability under any Environmental Review
Standard or Environmental Law;
(c) since the New Ownership Date there have been no releases or
emissions of Hazardous Materials at, on or under any property now
or previously owned, operated or leased by the Borrower or, so
far as the Sponsor is aware having made enquiry, any other
Project Party in connection with the Project that, singly or in
the aggregate, have, or may reasonably be expected to have, a
Materially Adverse Effect with respect to it;
(d) since the New Ownership Date the Borrower, and so far as it is
aware having made enquiry, each other Project Party has been
issued with, and is in compliance with, all Environmental Review
Standards and Approvals relating to environmental matters which
are necessary or advisable for the Project except where any
failure to so comply:
(i) would not reasonably be expected to have a Materially
Adverse Effect with respect to it; or
(ii) has not resulted in, and would not reasonably be likely to
result in, any action being taken by any Governmental
Agency or any other person;
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(e) since the New Ownership Date no property now or previously owned,
operated or leased by the Borrower is listed or, to its
knowledge, proposed for listing on any governmental or regulatory
list of sites requiring investigation or clean-up;
(f) there have not been since the New Ownership Date any underground
or above-ground storage tanks, active or abandoned, including
petroleum storage tanks, on or under any property now or
previously owned on or after the New Ownership Date, operated or
leased on or after the New Ownership Date by the Borrower that,
singly or in the aggregate, could reasonably be expected to have,
a Materially Adverse Effect with respect to the Borrower;
(g) since the New Ownership Date the Borrower has not and, so far as
the Borrower is aware having made reasonable enquiry no other
Project Party has, directly transported or directly arranged for
the transportation of any Hazardous Material in connection with
the Project which may lead to material claims against the
Borrower for any remedial work, damage to natural resources or
personal injury;
(h) there have not been since the New Ownership Date any
polychlorinated biphenyls or friable asbestos present at any
property now or previously owned on or after the New Ownership
Date, operated or leased on or after the New Ownership Date by
the Borrower or, so far as the Borrower is aware having made
reasonable enquiry, any other Project Party in connection with
the Project that, singly or in the aggregate, could reasonably be
expected to have, a Materially Adverse Effect with respect to the
Borrower; and
(i) there have not been since the New Ownership Date any conditions
that exist at, on or under any property now or previously owned,
leased, operated, licensed or used in each case on or after the
New Ownership Date by the Borrower or any other Project Party in
connection with the Project which, with the passage of time, or
the giving of notice or both, would give rise to liability under
any Environmental Review Standard or Environmental Law that,
individually or in the aggregate, has, or could reasonably be
expected to have, a Materially Adverse Effect with respect to the
Borrower.
3.16 PARI PASSU
The payment Obligations of the Sponsor under each Finance Document to
which it is a party rank at least pari passu in right of payment with
all of the Sponsor's other unsecured indebtedness, other than any such
indebtedness which is preferred by mandatory provisions of Applicable
Law or as set out in any Finance Document.
3.17 ROYALTIES, ETC.
Other than as disclosed in Item 2 ("ROYALTY AGREEMENTS") of the
Disclosure Schedule, neither the Mine nor the Borrower's interest
therein is subject to any royalty, net smelter return obligation, net
profit payment or similar arrangement.
15
3.18 MANAGEMENT OF MINE
The Borrower has sole responsibility for the construction, operation and
management of the Mine and has not and does not propose to enter into
any agreement for any third party to construct, operate or manage all or
part of the Mine, except as provided in any Project Document.
3.19 SOLVENCY
The Sponsor is not unable to pay its debts within the meaning of Section
123 of the Insolvency ▇▇▇ ▇▇▇▇ or within the meaning of any equivalent
legislation in its place of incorporation or in any place in which it
carries on its business or its assets are located.
3.20 MATERIAL AGREEMENTS
The Borrower has provided to the Facility Agent and the Security Trustee
certified copies of all Instruments which are Material Agreements or
otherwise material or reasonably likely to be material to:
(a) any Finance Party's decision to enter into the Finance Documents
to which it becomes a party on or after the New Ownership Date
and, in the case of any other Obligor to which it becomes a party
at any time;
(b) the Project; or
(c) any Obligor's rights and obligations pursuant to any Operative
Document,
and each such Instrument in existence as at the date hereof and on the
New Ownership Date is listed under Item 3 ("MATERIAL AGREEMENTS") of the
Disclosure Schedule.
3.21 REGISTRATION
It is not necessary or advisable that this Agreement or any other
Operative Document to which the Sponsor is a party be filed, registered,
recorded or enrolled with any court, public office or other authority in
any jurisdiction or that any stamp, documentary, registration or similar
tax or duty be paid on or in relation to this Agreement or any other
such Operative Document.
3.22 LEASES
The Borrower has acquired all leases of real property and other rights
of whatever nature necessary for the present and proposed conduct of its
business and the carrying out of the Project.
3.23 ISSUE OF SHARES
There are no agreements or arrangements in force (in the case of the
Borrower, on or after the New Ownership Date) which provide for the
present or future issue, allotment or transfer of, or grant to any
person the right (whether conditional or otherwise) to call for the
issue, allotment or transfer of any share or loan capital of the
16
Borrower or the Holding Company (including any option or right of
pre-emption or conversion).
3.24 SPECIAL PURPOSE VEHICLE
The Borrower has not traded (on or after the New Ownership Date) or
incurred any liabilities (on or after the New Ownership Date) other than
in connection with its participation in the transactions contemplated in
the Operative Documents.
3.25 TAX STATUS
The Borrower is and has been since the New Ownership Date a company
resident in Ghana and, except as stated in the Deed of Warranty, is
subject to Applicable Laws relating to taxation.
4. UNDERTAKINGS OF THE SPONSOR
4.1 CERTAIN AFFIRMATIVE COVENANTS
The Sponsor agrees with each Finance Party that, on and from the New
Ownership Date until (except in the case of Clauses 4.2(a) through
4.2(h), 4.5, 4.7 and 4.10) the Termination Date and (in the case of
Clauses 4.2(a) through 4.2(h), 4.5, 4.7 and 4.10 below) until the
earlier of:
(a) the Release Date; and
(b) the date that all Guaranteed Obligations have been irrevocably
and unconditionally paid and performed in full and the Lenders
shall be under no further obligation to advance funds pursuant to
the Loan Agreement,
it will in each case perform its undertakings set forth in this Clause
(and, where stated, cause each other Obligor to perform its obligations
set forth below).
4.2 FINANCIAL INFORMATION, ETC.
The Sponsor will furnish, or will cause to be furnished, to the Facility
Agent (with copies for each Lender) copies of the following financial
statements, reports and information in either hardcopy or digital
format:
(a) promptly when available, and in any event within 120 days after
the close of each Fiscal Year of the Sponsor its audited
financial statements for the prior Fiscal Year in the form
submitted to the U.S. Securities and Exchange Commission on Form
10-K, and in each case reported on without Impermissible
Qualification (other than an Impermissible Qualification which
has the prior written consent of the Security Trustee acting on
the instructions of the Secured Parties (acting reasonably);
(b) promptly when available, and in any event within 45 days after
the close of each of the first three Fiscal Quarters of each
Fiscal Year its unaudited financial statements for such Fiscal
Quarter in the form submitted to the U.S. Securities and Exchange
Commission on Form 10-Q;
17
(c) on each of the Economic Completion Date, the Release Date and
within 20 Business Days of each Calculation Date (other than the
Economic Completion Date and the Release Date), a Compliance
Certificate calculated as of the Economic Completion Date, the
Release Date or such Calculation Date, as the case may be,
indicating, inter alia, compliance with financial covenants set
forth in Clause 5.3 on each Calculation Date coinciding with or
scheduled to occur thereafter, together with such information
concerning the calculations and assumptions used by the Sponsor
in preparing such Compliance Certificate as the Security Trustee
may (acting reasonably) request;
(d) without prejudice to the provisions of Clause 7.1(g) or 7.1(h) of
the Common Terms Agreement, the Sponsor will and will cause each
other Obligor to furnish promptly upon the occurrence thereof
copies of any Instrument, correspondence or other item of
documentation amending, supplementing or otherwise modifying any
material provision of any Project Document to which the Sponsor
or such Obligor is a party and a detailed report of any departure
from the performance by any party of any of its material
obligations under any Project Document to which it is a party;
(e) promptly upon receiving knowledge of the same, the Sponsor will
furnish notice of the occurrence of any material default or event
of default (however described but without prejudice to the
provisions of Clause 7.1(g) or 7.1 (h) of the Common Terms
Agreement) by any party under, or any other material change in or
circumstance affecting, any of the Project Documents to which it
is a party;
(f) without limiting any other provision of this Clause, as soon as
possible and in any event within three Business Days after the
occurrence of any Default of which it becomes aware with respect
to the Sponsor, the Sponsor will furnish a statement of its chief
financial officer or other officer setting forth details of such
Default and the action which the Sponsor has taken and proposes
to take with respect thereto;
(g) as soon as possible and in any event within five Business Days
after:
(i) the occurrence of any adverse development with respect to
any litigation, arbitration, employment dispute, or
governmental investigation or proceeding to which an
Obligor is a party which could reasonably have a
Materially Adverse Effect with respect to any Obligor; or
(ii) the commencement of any material litigation, arbitration,
employment dispute or governmental investigation or
proceeding to which an Obligor is a party,
the Sponsor will furnish to the Facility Agent notice thereof
and copies of all documentation relating thereto;
(h) without limiting any other provision of this Clause, the Sponsor
as soon as possible and in any event within three Business Days
after the Sponsor knows or has reason to know of the occurrence
of any circumstance which could
18
reasonably have a Materially Adverse Effect with respect to the
Sponsor, furnish notice of such occurrence; and
(i) the Sponsor will furnish such other information with respect to
the financial condition, business, property, assets, revenues and
operations of any Obligor as any Finance Party may from time to
time reasonably request in connection with the Project or any of
the Operative Documents.
4.3 COMPLIANCE WITH LAWS
The Sponsor will comply in all material respects with all Applicable
Laws.
4.4 APPROVALS
(a) The Sponsor will obtain, maintain in full force and effect, and
comply in all respects with, all Approvals as may be required or
advisable from time to time for the Sponsor to execute, deliver,
perform and preserve its rights under any of the Operative
Documents executed or to be executed by it in each case where
failure to obtain, maintain in full force and effect and comply
with such Approval which, may lead to a Materially Adverse
Effect.
(b) The Sponsor shall take all steps within its powers to obtain,
maintain and when necessary renew all rights, powers, privileges,
licences, consents, approvals and agreements the benefit of which
it may enjoy from time to time and which may be of material
benefit to it or the Project and defend any action, claim or
other proceedings in any court or tribunal which may be brought
against it by any person where failure to obtain, maintain, renew
and defend such rights, powers, privileges, licences, consents,
approvals or agreements may lead to a Materially Adverse Effect.
4.5 MAINTENANCE OF CORPORATE EXISTENCE
The Sponsor will do and will cause to be done at all times all things
necessary to maintain and preserve its corporate existence.
4.6 FOREIGN QUALIFICATION
The Sponsor will do and will cause to be done at all times all things
necessary to be duly qualified to do business and be in good standing
(where such concept is relevant) as a foreign company or corporation in
each jurisdiction where the nature of its business makes such
qualification necessary.
4.7 PAYMENT OF TAXES, ETC.
The Sponsor will pay and discharge, as the same may become due and
payable, all taxes, assessments, fees and other governmental charges or
levies against it or on any of its property, as well as claims of any
kind or character (including claims for sums due for labour, material,
supplies, personal property and services); provided, however, that the
foregoing shall not require the Sponsor to pay or discharge any such
tax, assessment, fee, charge, levy or claim:
19
(a) in respect of which the relevant invoice or demand for payment
was issued not more than 120 days prior to the payment thereof
(and in respect of which the Sponsor has, upon request,
demonstrated to the satisfaction of the Required Secured Parties
that it will pay prior to the end of such period); or
(b) which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
GAAP shall have been set aside on its books.
4.8 PROVISION OF STAFF
The Sponsor shall ensure that there are sufficient competent technical
and management employees engaged in connection with the Mine and the
Project for the operation, development and maintenance of the Mine
substantially in accordance with (if effective) the Development Plan.
4.9 ENVIRONMENTAL COVENANTS
(a) The Sponsor will, and will use all reasonable efforts to ensure
that each other Project Party will:
(i) use and operate the Mine, the Project Assets and all of
the facilities and properties related thereto in
compliance with, keep all Approvals relating to
environmental matters in effect and remain in compliance
with, and handle all Hazardous Materials in compliance
with, the Environmental Review Standards and with all
applicable Environmental Laws and Environmental Licences,
the breach of which could reasonably be expected to lead
to:
(x) any action being taken against the Sponsor or the
Borrower or any other Project Party by any
Governmental Agency or any other person; or
(y) a Materially Adverse Effect occurring with respect
to the Sponsor or the Borrower; and
(ii) immediately notify the Security Trustee and provide copies
upon receipt of all written claims, complaints, notices or
inquiries relating to the condition of the facilities and
properties related to the Mine and the Project Assets or
compliance with the Environmental Review Standards or
Environmental Laws or Environmental Licences relating to
the Project in either case which could reasonably be
expected to result in:
(x) any material action being taken against the Sponsor
by any Governmental Agency or any other person; or
(y) a Materially Adverse Effect occurring with respect
to the Borrower, and shall promptly cure any
non-compliance which is the subject matter of any
actions and proceedings relating to
20
such Environmental Review Standards or
Environmental Laws or Environmental Licences.
(b) Without prejudice to clause (a), the Sponsor shall:
(i) use and operate all of its facilities and properties in
compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licences and other
authorisations relating to environmental matters in effect
and remain in compliance therewith, and handle all
Hazardous Materials in material compliance with all
applicable Environmental Laws or Environmental Licences
where failure to so comply would reasonably be expected to
result in:
(x) any action being taken against any Obligor by any
Governmental Agency or any other person; or
(y) a Materially Adverse Effect with respect to any
Obligor; and
(ii) provide such information and certifications which any
Finance Party may reasonably request from time to time to
evidence compliance with this clause.
4.10 PARI PASSU
The Sponsor will ensure that its payment Obligations under this
Agreement and each other Finance Document to which it is a party rank at
least pari passu in right of payment with all of the Sponsor's present
and future other unsecured indebtedness, other than any such
indebtedness which is preferred by mandatory provisions of Applicable
Law or any Finance Document.
4.11 ACCURACY OF INFORMATION
The Sponsor shall ensure that factual information hereafter furnished by
or on behalf of the Sponsor or any other Obligor in writing to any
Finance Party for the purposes of or in connection with any Finance
Document or any transaction contemplated thereby will be true and
accurate in all material respects on the date as of which such
information is dated or certified and such information shall not be
incomplete by omitting to state any material fact necessary to make such
information not misleading in any material respect.
4.12 PROJECT DOCUMENTS
The Sponsor undertakes to ensure that, except to the extent expressly
permitted pursuant to this Agreement or any other Finance Document:
(a) it will not enter into any Material Agreement without the prior
written consent of the Security Trustee;
(b) to the extent reasonably within its control, any other relevant
Project Party observes their respective obligations under all
Project Documents to which it is a party in all material
respects;
21
(c) it does not, other than with the prior written consent of the
Security Trustee, abandon, settle, compromise or discontinue or
become non-suited in respect of proceedings against any party in
connection with any Project Document to which it is a party; and
(d) it takes the action that a prudent, diligent and reasonable
person would take to cause each party to a Project Document to
which it is party to observe and perform its obligations in
connection with that Project Document, and if that party defaults
in the performance of those obligations to take the action that a
prudent, diligent and reasonable person would take to enforce its
resulting rights thereunder, unless the Security Trustee agrees
otherwise in writing.
5. NEGATIVE COVENANTS
5.1 CERTAIN NEGATIVE COVENANTS
The Sponsor agrees with each Finance Party that on and from the New
Ownership Date, until (except in the case of Clauses 5.9 through 5.13
which shall apply until the Termination Date) the earlier of:
(a) the Release Date; and
(b) the date that all Guaranteed Obligations have been irrevocably
and unconditionally paid and performed in full and the Lenders
shall be under no further obligation to advance funds pursuant to
the Loan Agreement,
it will perform its obligations set forth in this Clause.
5.2 BUSINESS ACTIVITIES; ORGANIC DOCUMENTS; FISCAL YEAR
(a) The Sponsor will not abandon or vary its principal business
activity, being that of a mining and exploration company;
provided, however, that such activity may be carried out directly
or indirectly through any of its subsidiaries;
(b) The Sponsor will not (without first promptly notifying the
Security Trustee):
(i) change, or permit any change to, its corporate name or to
any material provision of its Organic Documents; or
(ii) change its Fiscal Year.
5.3 FINANCIAL CONDITION OF THE SPONSOR
The Sponsor will not, on any date, between the period commencing on the
New Ownership Date and ending on the Release Date, permit:
(a) its Net Worth to be less than U.S.$18,000,000; or
(b) its ratio of Current Assets to Current Liabilities to be less
than 1:1; or
(c) the ratio of:
22
(i) Operating Cash Flow for any 6 month period; to
(ii) Interest expense of the Group for such period,
to be less than 4:1; or
(d) the ratio of
(i) Financial Indebtedness, of the Group; to
(ii) Net Worth,
to be, at any time, more than 1.5:1; or
(e) the ratio of:
(i) indebtedness (but not including any royalty payment
obligation pursuant to a Royalty Agreement or the Barnex
Agreement) of the Group; to
(ii) Net Worth,
to be, at any time, more than 1.5:1.
5.4 RESTRICTIVE AGREEMENTS, ETC.
The Sponsor will not enter into any agreement (excluding this Agreement
and the other Finance Documents to which it is a party):
(a) prohibiting the creation or assumption of any lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired; or
(b) restricting the ability of the Sponsor to amend or otherwise
modify this Agreement or any other Operative Document.
5.5 INCONSISTENT AGREEMENTS
The Sponsor will not enter into any agreement containing any provision
which would be violated or breached by the making of the Loans or by the
performance by the Sponsor of its obligations hereunder or under any
other Operative Document.
5.6 PROJECT DOCUMENTS
The Sponsor shall not, without the prior written consent of the Security
Trustee:
(a) amend, modify or waive any provision of any Project Document to
which it is a party; or
(b) terminate (other than in accordance with its terms (excluding,
however, as a result of the breach of any obligation by any party
thereto)) or replace, any Project Document to which it is a
party, provided that if a Contractor has defaulted under any
Project Document or such Project Document has expired, the
Borrower may within 45 days of such default or expiry replace
such
23
Contractor with another Contractor acceptable to the Security
Trustee on substantially similar terms to such Project Document.
5.7 ACTIONS UNDER PROJECT DOCUMENTS
The Sponsor will not take or refrain from taking any action under any of
the Project Documents which would have a material adverse effect on:
(a) the ability of the Borrower to consummate the Project and operate
the Mine in accordance with the Development Plan;
(b) any collateral subject to any Security Agreement and the
perfection and priority of the liens granted or purported to be
granted therein; or
(c) the ability of the Sponsor to pay and perform its Obligations.
5.8 ROYALTY AGREEMENTS
The Sponsor will not enter into any agreement relating to the granting
of royalties or net profits interests in connection with the Project
other than as set forth in the royalty agreements listed in Item 2
("ROYALTY AGREEMENTS") of the Disclosure Schedule.
5.9 NOTICE OF TERMINATION
The Sponsor undertakes to the Security Trustee that:
(a) it will not exercise or seek any right of termination of, or
discontinue the performance of any of its obligations under, the
Management Agreement (any such action being referred to as
"TERMINATION ACTION"), without first giving to the Security
Trustee a Termination Notice specifying the event giving rise to
such right of termination;
(b) for a period of thirty days following receipt by the Security
Trustee of a Termination Notice (the "SUSPENSION PERIOD"), it
will not take any Termination Action. The Suspension Period may
run concurrently with the period of, and the Termination Notice
may be served at the same time as, any notice of default (or
similar notice) served by the Sponsor under the Management
Agreement, provided that the Sponsor shall not take any
Termination Action until the end of the Suspension Period; and
(c) if the Security Trustee has served a Step-in Notice pursuant to
Clause 7.1, it will not terminate the Management Agreement until
the expiration of the Step-in Period.
5.10 AMENDMENTS TO THE MANAGEMENT AGREEMENT
The Sponsor will not amend or agree with the Borrower any amendments to
any of the terms of the Management Agreement without the prior written
consent of the Security Trustee.
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5.11 ASSIGNMENT OF MANAGEMENT AGREEMENT
The Sponsor will not assign, transfer or otherwise dispose of any of its
rights or obligations under the Management Agreement without obtaining
the prior written consent of the Security Trustee.
5.12 PAYMENTS TO THE BORROWER
The Sponsor undertakes to pay to such account at such bank as the
Security Trustee may from time to time notify by way of a Payment Notice
to the Sponsor all moneys payable by the Sponsor to the Borrower under
or in connection with the Management Agreement.
5.13 INFORMATION
The Sponsor shall provide the Security Trustee with the following
information both promptly upon the occurrence of the event in question
and promptly following a request therefor from the Security Trustee:
(a) any breach by the Borrower of any terms of the Management
Agreement; or
(b) the occurrence of any event or circumstance that makes or is
likely to make it impossible for the Sponsor to perform any of
its obligations under the Management Agreement in accordance with
its terms; or
(c) any Termination Action by the Sponsor.
6. ACKNOWLEDGMENTS AND CONSENTS OF THE SPONSOR
6.1 CONSENT TO SECURITY
The Sponsor hereby:
(a) acknowledges that this Agreement shall constitute notice in
writing to it of the security created or to be created by the
Security Agreement over the right, title, benefit and interest of
the Borrower under the Management Agreement;
(b) consents for purposes of the Management Agreement to the creation
and subsistence of such security and the exercise by the Security
Trustee of all its rights and remedies with respect to such
security; and
(c) without in any way limiting the consent in clause (b) and to the
extent that it is required by any relevant provision of the
Management Agreement, consents to any assignment by the Borrower
to the Security Trustee of its rights and interest in the
Management Agreement.
6.2 NO LIABILITY
The Sponsor agrees and acknowledges that, notwithstanding anything to
the contrary contained in this Deed, the Borrower will remain liable to
observe and perform all of the Borrower's obligations under the
Management Agreement and neither the Security Trustee nor any of the
other Finance Parties will be under any obligation or
25
liability with respect to those obligations by reason of or arising out
of this Deed. Neither the Security Trustee nor any of the other Finance
Parties will be required in any manner to perform or fulfill any
obligations of the Borrower under the Management Agreement, or to make
any payment, or make any enquiry as to the nature or sufficiently of any
payment received by it, or to present file any claim or take any other
action to collect or enforce any of the Borrower's rights under the
Management Agreement.
6.3 TERMINATION OF MANAGEMENT AGREEMENT
The Borrower may not terminate the Management Agreement without the
prior written consent of the Security Trustee, and the Sponsor
acknowledges and agrees that no such termination shall be valid or
effective without the prior written consent of the Security Trustee.
7. STEP-IN AND STEP-OUT RIGHTS
7.1 EXERCISE OF STEP-IN RIGHTS
At any time during the Suspension Period the Security Trustee may give a
notice (a "STEP-IN NOTICE") to the Sponsor:
(a) requiring the Sponsor to continue to perform its obligations
under the Management Agreement for the duration of the Step-in
Period; and
(b) acknowledging that the Substitute Entity notified to the Sponsor
is to become a joint and several obligor with the Borrower in
respect of the obligations of the Borrower under the Management
Agreement arising during the Step-in Period and will undertake to
the Sponsor to discharge all payments then due to the Sponsor
under the terms of the Management Agreement within thirty days.
7.2 OPERATION OF STEP-IN RIGHTS
During the Step-in Period the Substitute Entity shall enjoy all rights
of the Borrower under the Management Agreement and shall be jointly and
severally liable with the Borrower for the performance of all the
obligations of the Borrower under the Management Agreement which arise
during the Step-in Period and for payment of any sums which arise before
the Step-in Period but, as between the Borrower and the Substitute
Entity, the latter alone (to the exclusion of the Borrower) shall have
the authority to deal with the Sponsor and exercise the powers and
discretions available to the Borrower under the Management Agreement and
the Borrower shall not be released, nor shall its liability be affected
or impaired, as a result of the exercise by the Substitute Entity alone
of any such authority, powers or discretions or by any other act or
omission on the part of, or indulgence or release granted to, the
Substitute Entity, whether or not with the knowledge or consent of the
Borrower.
7.3 TERMINATION ACTION DURING STEP-IN PERIOD
During the Step-in Period:
(a) any grounds for the Sponsor to take Termination Action, whether
outstanding or continuing on or arising before or after the
Step-in Date, shall, to the extent
26
such grounds are caused by any act or default of the Borrower,
be deemed not to have effect; but
(b) any grounds for the Sponsor to take Termination Action caused by
an act or default of the Substitute Entity shall give rise to the
Sponsor's right to take Termination Action.
7.4 SPONSOR'S OBLIGATIONS DURING STEP-IN PERIOD
During the Step-in Period, the Sponsor shall owe its obligations,
liabilities and duties with respect to the performance of the Management
Agreement to the Borrower and the Substitute Entity jointly but receipt
of, or performance by the Sponsor in favour of, either of them shall be
a good discharge.
7.5 STEP-OUT RIGHTS
The Substitute Entity, on giving the Sponsor not less than thirty days'
prior written notice (a "STEP-OUT NOTICE"), may terminate its
obligations, liabilities and duties to the Sponsor under this Agreement
and the Management Agreement (but without affecting the continuation of
the Borrower's obligations towards the Sponsor under the Management
Agreement).
7.6 TERMINATION OF STEP-IN PERIOD
From the last day of the Step-in Period, the Substitute Entity shall be
released from all obligations, liabilities and duties under this
Agreement and the Management Agreement towards the Sponsor other than
those that arose during the Step-in Period but have not been fully
performed.
7.7 ADDITIONAL STEP-IN RIGHTS
Notwithstanding that, as between the Borrower and the Sponsor, the
Sponsor's right of termination of the Management Agreement may not have
arisen, the provisions of Clause 7.1 shall nevertheless apply if the
Security Trustee gives notice to the Sponsor and the Borrower and the
Substitute Entity complies with the requirements on its part under
Clause 7.1.
8. MISCELLANEOUS PROVISIONS
8.1 CERTIFICATE
A certificate, determination, notification or opinion of the Security
Trustee as to any amount payable under any Finance Document will be
conclusive and binding on the Sponsor except in the case of manifest
error.
8.2 LATE PAYMENTS
(a) If the Sponsor fails to pay any amount payable by it to a Finance
Party under a Finance Document on its due date, interest shall
accrue on the overdue amount from the due date up to the date of
actual payment (both before and after judgment) at a rate two per
cent higher than the rate which would have been payable if the
overdue amount had, during the period of non-payment,
27
constituted a Loan in the currency of the overdue amount for
successive Interest Periods, each of a duration selected by (in
the case of amounts due to the Security Trustee) the Security
Trustee, (in the case of amounts due to a Lender or the Facility
Agent) the Facility Agent or (in the case of amounts due to a
Royalty Holder) each Royalty Holder (in each case, acting
reasonably). Any interest accruing under this Clause 6.2 shall
be immediately payable by the Sponsor on demand by the person to
whom such amount is payable or (in the case of the Lenders) the
Facility Agent.
(b) Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest
Period applicable to that overdue amount but will remain
immediately due and payable.
8.3 APPLICATIONS FOR MONIES
For the purpose of or pending the discharge of any of the Guaranteed
Obligations, but subject to the provisions of the Common Terms
Agreement, the Security Trustee may convert any monies received,
recovered, or realised or subject to application by the Security Trustee
under this Agreement (including the proceeds of any previous conversion
under this Agreement) from their existing currency or denomination into
such other currency of denomination in the manner contemplated by the
Common Terms Agreement, mutatis mutandis. Each previous reference in
this Clause to a currency extends to any funds of that currency and, for
the avoidance of doubt, funds of one currency may be converted into
different funds of the same currency.
8.4 ASSIGNMENT
All of the rights, privileges, remedies and options provided to the
Security Trustee hereunder shall enure to the benefit of its successors
and permitted assigns as set forth in the Common Terms Agreement. The
Sponsor may not assign its rights nor delegate its obligations
hereunder.
8.5 SEVERABILITY
If at any time any provision hereof or of any other Finance Document is
or becomes illegal, invalid or unenforceable in any respect under the
law of any jurisdiction, neither the legality, validity or
enforceability of the remaining provisions hereof nor the legality,
validity or enforceability of such provision under the law of any other
jurisdiction shall in any way be affected or impaired thereby.
8.6 WAIVERS, AMENDMENTS, ETC.
The provisions of this Agreement may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in
writing and consented to by the Security Trustee, the Sponsor and the
Required Secured Parties; provided, however, that no such amendment,
modification or waiver which would materially reduce the obligations of
the Sponsor under this Agreement shall be made without the consent of
each Secured Party; and provided that nothing in this Clause 8.6 shall
prevent the Security Trustee exercising its rights against the Sponsor
pursuant to any Finance Document unless it is directed otherwise by the
Required Secured Parties and notwithstanding the Contracts (Third Party
Rights) ▇▇▇ ▇▇▇▇, except as stated in this
28
Clause, no consent is required from any other person to amend the
provisions of this Agreement.
8.7 COUNTERPARTS, EFFECTIVENESS, ETC.
This Agreement may be executed by the parties hereto in several
counterparts, each of which shall, when executed, be deemed to be an
original and all of which shall constitute together one and the same
agreement. This Agreement shall become effective on the date (the
"EFFECTIVE DATE") when counterparts hereof executed on behalf of the
Sponsor shall have been received by the Security Trustee.
8.8 NOTICES
All notices and other communications provided to any party hereto under
this Agreement shall be in writing and shall be sent by hand delivery,
courier delivery, email (if the receiving party shall have email
facilities (and copied by facsimile)) or facsimile and addressed or
delivered to it at its address set forth below its signature hereto and
designated as its "ADDRESS FOR NOTICES" or at such other address as may
be designated by such party. Any notice:
(a) if sent by hand delivery or courier delivery, shall be deemed
received when delivered; and
(b) if transmitted by email (and copied by facsimile) or facsimile,
shall be deemed given when transmitted by facsimile (answerback
received at both the beginning and end of the relevant
transmission and transmission confirmed by the sending facsimile
machine in the case of facsimiles).
8.9 COSTS AND EXPENSES
The Sponsor agrees to:
(a) pay or (by way of loan) cause the Borrower to pay on demand all
reasonable out-of-pocket expenses of each Finance Party for:
(i) the negotiation, preparation, execution and delivery of
this Agreement and each other Finance Document, including
Schedules;
(ii) for the cost of preparing the Development Plan;
(iii) any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Finance
Document or the Development Plan as may from time to time
hereafter be required whether or not the transactions
contemplated hereby are consummated,
(b) pay or (by way of a loan) cause the Borrower to pay all
reasonable out-of-pocket expenses (inclusive as aforesaid) of the
Representatives (including reasonable fees and expenses of legal
advisers to each Representative) on a full indemnity basis and
any stamp or other taxes incurred in connection with the
preparation and review of the form of any Instrument relevant to
this Agreement or any other Finance Document, the consideration
of legal questions relevant hereto and thereto and the filing,
recording, refiling or re-
29
recording of any Finance Document and all amendments or
supplements to any thereof and any and all other documents or
Instruments of further assurance required to be filed or
recorded or refiled or re-recorded by the terms hereof or of any
other Finance Document.
(c) pay or (through a loan) cause the Borrower to pay on demand all
reasonable out-of-pocket expenses of each Finance Party's
officers or agents incurred during the period from the New
Ownership Date to the Release Date, in connection with its annual
on-site inspections of the Mine and all fees and expenses of the
Independent Engineer for the preparation of the Technical Review,
each Annual Independent Engineer's Report and other reports
required of it (whether or not such documents are actually
completed), the fees and expenses of any Expert, the fees and
expenses of the independent chartered accountants and certified
public accountants in connection with the performance of their
duties described in Clause 15.3 of the Common Terms Agreement,
the certification of each Compliance Certificate and any
compliance certificate provided under this Agreement, the
Economic Completion Certificate or any other matter relating to
the Project and the Mine, and all reasonable fees and expenses of
the Insurance Consultant and the Project Account Banks in
connection with the performance of their respective duties
referred to herein; and
(d) reimburse each Finance Party upon demand for all out-of-pocket
expenses (including fees and expenses of legal advisers to such
Finance Party on a full indemnity basis) incurred by such Finance
Party in connection with:
(i) the negotiation and completion of any restructuring or
work-out, whether or not consummated whatever the nature
of such expenses are, of any Obligations of the Sponsor;
and
(ii) the enforcement of any Obligations of the Sponsor.
The liability of the Sponsor to pay expenses pursuant to Clause (a)(i)
and (b) in respect of expenses incurred prior to the New Ownership Date
shall not exceed an aggregate amount of Pound Sterling50,000.
8.10 INDEMNIFICATION
The Sponsor hereby indemnifies, exonerates and holds each Finance Party
and each of its officers, directors, shareholders, employees, advisers
and agents (the "INDEMNIFIED PARTIES") free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages and expenses in connection therewith (including
reasonable fees and expenses of legal advisers on a full indemnity basis
and inclusive of United Kingdom or Ghanaian value added tax or other
similar tax payable in connection therewith and including any amount
paid by any Lender to either Representative (the "INDEMNIFIED
LIABILITIES"), incurred by the Indemnified Parties (in the case of (b)
and (c) up to the date which is 6 months following the Termination Date)
or any of them as a result of, or arising out of, or relating to:
30
(a) the entering into and performance of this Agreement and any other
Finance Document to which the Sponsor is a party by any of the
Indemnified Parties;
(b) any investigation, litigation or proceeding related to any
environmental clean-up, audit, compliance or other matter
relating to the protection of the environment or the release by
any Obligor of any Hazardous Material; or
(c) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, or release or threatened release
from, any real property owned or operated by any Obligor of any
Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within
the control of, such Obligor,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified
Party's negligence or wilful misconduct, and if and to the extent that
the foregoing undertaking may be unenforceable for any reason, each
Obligor hereby jointly and severally agrees to make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under Applicable Law; provided,
however, that the Sponsor's liability pursuant to sub-clauses (b) and
(c) shall exclude any liability incurred by any Lender or Representative
solely in its capacity as a lender (or agent or representative of a
lender) to Satellite Goldfields Limited.
8.11 TAXES
(a) All payments by the Sponsor of principal of, and interest on, the
Guaranteed Obligations and all other amounts payable pursuant to
this Agreement or any other Finance Document to which the Sponsor
is a party to any Finance Party shall be made free and clear of,
and without deduction for any, present or future income, excise,
stamp or other taxes, fees, duties, withholdings or other charges
of any nature whatsoever imposed by any taxing authority of any
jurisdiction, in each case other than franchise taxes and taxes
imposed on or measured by the recipient's net income or receipts
(such non-excluded items referred to as "TAXES") other than as
required by Applicable Law. In the event that any withholding or
deduction from any payment to be made by the Sponsor hereunder or
under any other Finance Document is required in respect of any
Taxes pursuant to any Applicable Law, the Sponsor will:
(i) to the extent that any such Taxes are payable by the
Sponsor, pay directly to the relevant authority the full
amount to be so withheld or deducted;
(ii) promptly forward to the recipient of such payment an
official receipt or other documentation satisfactory to
the recipient of such payment (to the extent the same is
available to the Sponsor) evidencing such payment to such
authority; and
(iii) pay to the recipient of such payment for the account of
the person or persons entitled thereto such additional
amount or amounts as is necessary to ensure that the net
amount actually received by such
31
person will be equal to the full amount such person
would have received had no such withholding or deduction
been required;
(b) If any Taxes are directly asserted against any Finance Party with
respect to any payment received by such Finance Party hereunder
or under any other Finance Document to which the Sponsor is a
party, such Finance Party may pay such Taxes and the Sponsor will
promptly pay such additional amounts (including any penalties,
interest or expenses except to the extent that the same are
incurred as a result of the negligence or wilful misconduct of
such Finance Party) as is or are necessary in order that the net
amount received by such Finance Party after the payment of such
Taxes (including any Taxes on such additional amount) shall equal
the amount such Finance Party would have received had such Taxes
not been asserted;
(c) If the Sponsor fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the recipient of such
payment, for its own account and/or, as the case may be, the
account of the relevant Finance Parties, the required receipts or
other required documentary evidence, the Sponsor shall indemnify
the recipient of such payment or such Finance Parties, as the
case may be, for any incremental Taxes, interest or penalties
that may become payable by any such Finance Party as a result of
any such failure (excluding, however, any such incremental Taxes,
interest or penalties incurred as a result of the negligence or
wilful misconduct of such Finance Party). For the purposes of
this Clause, a distribution hereunder or under any other Finance
Document by a Representative, the Facility Agent or any Lender to
or for the account of any Lender or other Finance Party shall be
deemed a payment by the Sponsor;
(d) The Finance Parties agree to cooperate with the Sponsor in
completing and delivering or filing tax-related forms which would
reduce or eliminate any amount of Taxes required to be deducted
or withheld on account of any payment made by the Obligor under
this Agreement or any other Finance Document; provided, however,
that no Finance Party shall be under any obligation to execute
and deliver any such form if, in the opinion of such Finance
Party, completion of any such form might reasonably be expected
to result in an adverse consequence with respect to the business
or tax position of such Finance Party.
(e) The Sponsor hereby further indemnifies, exonerates and holds each
Indemnified Party free and harmless from and against any and all
Indemnified Liabilities incurred by the Indemnified Parties or
any of them as a result of, or arising out of, or relating to any
Taxes payable in connection with any payment made:
(i) to the Sponsor by the Borrower, or
(ii) to any Finance Party in respect of any Royalty Agreement,
including without limitation, any loss suffered by any
Finance Party (including as a result of the decrease in
value of any lien) as a result of any Governmental Agency
assessing any Taxes (either on the Borrower or
32
such Finance Party) on any payment made pursuant to any
Royalty Agreement,
and to the extent any Taxes are payable on any such payment, the Sponsor
shall make a cash loan to or equity investment in the Borrower in an
amount equal to such Taxes and shall pay such loan or equity investment
into a Project Account not held with a bank in Ghana.
8.12 TAX CREDITS
If the Sponsor pays any additional amount under Clause 8.11(a) (a "TAX
PAYMENT") and any Finance Party effectively obtains a refund of tax or
credit against tax on its overall net income, by reason of that Tax
Payment (a "TAX CREDIT"), and the Finance Party is able to identify the
Tax Credit as being attributable to the Tax Payment, then the Finance
Party shall reimburse to the Sponsor such amount as it shall determine
to be the proportion of the Tax Credit as will leave the Finance Party
after that reimbursement, in no better or worse position than it would
have been in if the Tax Payment had not been required. Each Finance
Party shall have an absolute discretion as to whether to claim any Tax
Credit and, if it does claim, the extent, order and manner in which it
does so. No Finance Party shall be obliged to disclose any information
regarding its tax affairs or computations to the Sponsor. Nothing shall
interfere with the right of each Finance Party to arrange its tax
affairs in whatever manner it thinks fit.
8.13 SET OFF
The Sponsor authorises each Finance Party after the occurrence of an
Event of Default to apply any credit balance to which the Sponsor is
entitled on any account of the Sponsor with that Finance Party (at any
office and in any currency or commodity (including Gold)) in or towards
satisfaction of any sum due and payable from the Sponsor to any Finance
Party hereunder and for this purpose, each Finance Party is authorised
to purchase with the moneys standing to the credit of any such account
such other currencies as may be necessary to effect such application. No
Finance Party shall be obliged to exercise any right granted to it
pursuant to this Clause.
8.14 CURRENCY OF PAYMENT
(a) If:
(i) any amount payable by the Sponsor under this Agreement or
any Finance Document is received by a Finance Party
entitled thereto in a currency (the "PAYMENT CURRENCY")
other than the amount agreed to be payable in the currency
in which the relevant Obligation is denominated (the
"RELEVANT CURRENCY"), whether as a result of any judgement
or order or the enforcement thereof, the liquidation of
the Sponsor or otherwise; and
(ii) the amount produced by converting the Payment
Currency so received into the Relevant Currency is less
than the required amount of the Relevant Currency, then
the Sponsor shall, as an independent obligation separate
and independent from its other obligations
33
contained hereunder and in any other Finance Document,
indemnify such Finance Party for the deficiency and any
loss sustained as a result.
(b) Such conversion shall be made promptly following receipt at such
prevailing rate of exchange in such market as is reasonably
determined by such Finance Party as being most appropriate for
the conversion. The Sponsor shall in addition pay the reasonable
costs of the conversion. The Sponsor waives any right it may have
in any jurisdiction to pay any amount under this Agreement or any
other Finance Document in a currency other than the Relevant
Currency.
(c) For the purposes of this Clause, a distribution hereunder or
under any other Finance Document by a Finance Party to or for the
account of another Finance Party shall be deemed to be a payment
by the Sponsor.
8.15 ROLE OF THE LAW DEBENTURE TRUST CORPORATION P.L.C.
The Sponsor acknowledges that The Law Debenture Trust Corporation p.l.c.
is a party to the Asset Sale Agreements, the First Royalty Agreement and
the Common Terms Agreement in its capacity as security trustee pursuant
to the Definition & Common Terms Agreement dated May 9, 1998 (as
amended) between, inter alia, Satellite Goldfields Limited and certain
other parties.
8.16 NO OBLIGATIONS FOR MINE
It is expressly understood that none of the Independent Engineer, the
Insurance Consultant or any Finance Party assumes any obligation to the
Sponsor or any other party in respect of the operation, development,
exploration and production of the Mine in accordance with the
Development Plan or otherwise.
8.17 SURVIVAL
The obligations of the Sponsor under Clauses 8.9, 8.10, 8.11 and 8.14
and all obligations of the Finance Parties pursuant to Clause 8.12,
shall, in each case, survive any termination of this Agreement. The
representations and warranties made and indemnity and reimbursement
obligations of the Sponsor in this Agreement and in each other Finance
Document to which it is a party shall survive the execution and delivery
of this Agreement and each such other Finance Document.
8.18 HEADINGS
The various headings of this Agreement and of each other Finance
Document are inserted for convenience only and shall not affect the
meaning or interpretation of this Agreement or such other Finance
Document or any provisions hereof or thereof.
8.19 ENGLISH LANGUAGE
This Agreement and the other Finance Documents have been negotiated in
English and executed in the English language. All certificates, reports,
notices and other documents and communications given or delivered
pursuant to this Agreement and the other Finance Documents shall be in
the English language or, if not in the English language, shall be
accompanied by a certified English translation thereof. In the case
34
of any document originally issued in a language other than English, the
English language version of any such document shall, absent manifest
error, control the meaning and interpretation of the matters set forth
therein.
8.20 DELAY
No failure or delay on the part of any Finance Party in exercising any
power or right under this Agreement or any other Finance Document shall
operate as a waiver thereof, nor shall any single or partial exercise of
any such power or right preclude any other or further exercise thereof
or the exercise of any other power or right. No notice to or demand on
the Sponsor in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by any Finance
Party under this Agreement or any other Finance Document shall, except
as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require
any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
9. GOVERNING LAW AND SUBMISSION TO JURISDICTION
9.1 LAW.
This Agreement and all matters and disputes relating hereto shall be
governed and construed in accordance with English law.
9.2 JURISDICTION OF ENGLISH COURTS
(a) The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement
(including a dispute regarding the existence, validity or
termination of this Agreement) (a "DISPUTE").
(b) The Parties agree that the courts of England are the most
appropriate and convenient courts to settle Disputes and
accordingly no Party will argue to the contrary.
(c) This Clause 7.2 is, as against the Sponsor, for the benefit of
the Finance Parties only. As a result, no Finance Party shall be
prevented from taking proceedings against the Sponsor relating to
a Dispute in any other courts with jurisdiction. To the extent
allowed by law, the Finance Parties may take concurrent
proceedings against the Sponsor in any number of jurisdictions.
9.3 FORUM.
The Sponsor irrevocably waives any objection which it might now or
hereafter have to the courts referred to in Clause 7.2 being nominated
as the forum to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with
this Agreement and agrees not to claim that any such court is not a
convenient or appropriate forum.
9.4 NON-EXCLUSIVE.
The submission to the jurisdiction of the courts referred to in Clause
7.2 shall not (and shall not be construed so as to) limit the right of
any Finance Party to take
35
proceedings against the Sponsor in any other court of competent
jurisdiction nor shall the taking of proceedings in any one or more
jurisdictions preclude the taking of proceedings in any other
jurisdiction, whether concurrently or not.
9.5 WAIVER OF IMMUNITY.
To the extent that the Sponsor may be entitled in any jurisdiction to
claim for itself or its assets, immunity from suit, execution,
attachment or other legal process whatsoever, it hereby irrevocably
agrees not to claim and hereby irrevocably waives such immunity to the
fullest extent permitted by the laws of such jurisdiction.
9.6 SERVICE OF PROCESS
Without prejudice to any other mode of service allowed under any
relevant law, the Sponsor
(a) hereby irrevocably appoints:
Moriah Limited (No. 03991620) a company incorporated in England and
Wales and having its registered office at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇
as its agent for service of process (the "PROCESS AGENT") in relation to
any proceedings before the English courts in connection with any Finance
Document; and
(b) agrees that failure by the Process Agent to notify the Borrower
of the process will not invalidate the proceedings concerned.
The parties hereto have caused this Agreement to be duly executed and delivered
as a deed on the day and year first above written.
36
EXECUTED as a Deed on behalf of
GOLDEN STAR RESOURCES LTD.
Signature:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
Witness:
------------------------------------
Name:
------------------------------------
Address:
------------------------------------
------------------------------------
------------------------------------
Occupation:
------------------------------------
-S1-
EXECUTED as a Deed on behalf of
STANDARD BANK LONDON
LIMITED, as Security Trustee
Signature:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
and
Signature:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
-S2-
SCHEDULE 1
DISCLOSURE SCHEDULE
Item 1 Subsidiaries
No Name Jurisdiction of Incorporation
---- ------------------------------------- -----------------------------
1. Golden Star Resources Ltd Canada(1)
2. Golden Star Holdings Ltd* Barbados
3. Golden Star Management Ltd* Bahamas
4. Venezuela Investments Ltd* Barbados
5. Venhold Investments (1994) Ltd Barbados
6. Pan African Resources Corporation Yukon
7. Pan African Resources Corporation Barbados(2)
8. PARC Dioulafoundou Ltd* Barbados
9. PARC Gabon SA* (99.9%) Gabon
10. PARC Cote d'Ivoire SA (99.9%) Ivory Coast
11. PARC Fougala* (99.3%) Mali
12. Southern Star Resources Ltd* Barbados
13. Southern Star Bolivia SRL* ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ Sul do Brasil Empreendimentos Brazil
LTDA*
15. Estrela de Ouro Empreendimentos LTDA* Brazil
(49%)
16. Southern Star Equador SA* Ecuador
17. Southern Star Argentina* Barbados
18. Guyanor Ressources S.A. (72.6%) France(3)
19. Societe de Travaux Publics et de Mines France
Auriferes en Guyane
20. Societe des Mines de St-Elie France(4)
21. Societe des Mines de Yaou & Dorlin (50%) France
----------
(1) Registered in Colorado, Florida, New York, Suriname, Guyana, Eritrea,
Ethiopia, Ivory Coast.
(2) Registered in Kenya, Eritrea, Sierra Leone, Mali, Burkina Faso.
(3) Rights issue, approved by shareholders, scheduled for Q4, 2002 could
increase ownership to greater than 90%.
(4) Subject to sale pending French regulatory approval.
* Denotes inactive, with no material assets or liabilities.
SS-1
22. Societe des Mines de Yaou & Dorlin (50%) France(5)
23. Caystar Holdings Cayman Islands
24. Bogoso Holdings Cayman Islands
25. Bogoso Gold Limited (90%) Ghana
26. Barnex (Ghana) Limited Ghana
27. New Century Mines Ghana(6)
28. GSR (IOM) Limited Isle of Man(7)
29. Barnex (Prestea) Limited Ghana(8)
30. Wasford Holdings Cayman Islands
31. Wexford Goldfields Limited (90%) Ghana(9)
32. JCI (Ghana) Limited Ghana(10)
- Means inactive with no material assets or liabilities.
Item 2 Royalty Agreements
By virtue of the Minerals Royalties Regulations 1987 (L.I. 1349), mining
companies are subject to the payment of royalties to Ghana based on
profitability in terms of operating ratios which is the ratio expressed in terms
of the percentage which the operating margin bears to turnover during each
royalty period. The rate of royalty payable according to the law as:
(c) Where the operating ratio is thirty per cent (30%) or less, the
rate of royalty payment is three per cent (3%) of turnover or
gross value of minerals won.
(d) where the operating ratio is more than thirty per cent (30%) but
less than seventy per cent (70%) the rate of royalty payment is
three per cent (3%) plus 0.225 of every one per cent (1%) by
which the operating ratio exceeds thirty per cent (30%).
(e) where the operating ratio is seventy per cent (70%) or more the
rate of royalty payment is twelve per cent (12%).
(f) See also the Deed of Warranty.
The Borrower has or will enter into the First Royalty Agreement and has or will
enter into a royalty agreement with the Lenders and Standard Bank London
Limited.
----------
(5) Subject to purchase pending French regulatory approvals.
(6) Unincorporated JV with Prestea Gold Resources Limited (45%) and the
Government of Ghana (10%) on the Prestea Underground.
(7) Merged with Bogoso Holdings as at January 1, 2002.
(8) Merged with Bogoso Gold Limited on January 1, 2002.
(9) Subject to purchase pending final documentation and Ghanaian regulatory
approvals.
(10) Subject to purchase pending confirmation of renewal of the primary asset by
the Government of Ghana. BoG approval for the transfer of shares already
obtained.
SS-2
Item 3 Material Agreements
1. All Operative Documents and all documents provided to the Facility Agent
prior to the New Ownership Date and identified by an attached
certificate signed by an Authorised Officer of the Borrower as a
"MATERIAL AGREEMENT".
SS-3
SCHEDULE 2
FORM OF COMPLIANCE CERTIFICATE
To: [Standard Bank London Limited] as Security Trustee
From: Golden Star Resources Ltd.
Dated:
Dear Sirs
SUPPORT AGREEMENT, DATED [-], 2002, BETWEEN (1) GOLDEN STAR RESOURCES LTD., AS
THE SPONSOR, AND (2) STANDARD BANK LONDON LIMITED, AS THE SECURITY TRUSTEE (THE
"AGREEMENT")
1. We refer to the Agreement. This is a Compliance Certificate. Terms
defined in the Agreement have the same meaning when used in this
Compliance Certificate unless given a different meaning in this
Compliance Certificate.
2. We confirm that as at (11)[ ] (the "COMPLIANCE DATE") and as at
the date hereof:
(a) our Net Worth is (12)[ ]; or
(b) our ratio of Current Assets to Current Liabilities is (13)
[ ]; or
(c) the ratio of:
(i) Operating Cash flow for the 6 month period prior to the
Compliance Date; to
(ii) Interest expense of the Group for such period is
(14)[ ]
(d) the ratio of
(i) Financial Indebtedness of the Group; to
(ii) Net Worth,
As at the Compliance Date is (15)[ ]
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(11) Compliance Date: date of most recent accounts/Release Date
(12) not to be less than U.S.$18,000,000
(13) not to be less than 1:1
(14) not to be less than 4:1
SS-4
(e) The ratio of:
(i) indebtedness of the Group; to
(ii) Net Worth
Is not more than (16)[ ]
3. [We confirm that no Default is continuing.](17)
Signed:
-----------------------------------
Director
of
Golden Star Resources Ltd.
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(15) not to be more than 1.5:1
(16) not to be more than 1.5:1
(17) If this statement cannot be made, the certificate should identify any
Default that is continuing and the steps, if any, being taken to remedy it.
SS-5
SCHEDULE 3
PAYMENT NOTICE
TO: Golden Star Resources Ltd.
We refer to the Support Agreement dated [_], 2002 (the "Agreement") between
Golden Star Resources Ltd. and Standard Bank London Limited, as security
trustee.
Pursuant to Clause 5.2 of the Agreement we set forth below the account into
which you shall pay all monies payable by yourselves to the Borrower under or in
connection with the Management Agreement.
Account to which moneys
are to be forwarded
-----------------------------
-----------------------------
-----------------------------
Capitalised terms used but not otherwise defined herein shall have the meanings
provided in the Agreement.
Dated this _______ day of ___________, 2002.
STANDARD BANK LONDON LIMITED
as the Security Trustee
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
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