EX-4.48
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y03272exv4w48.htm
EX-4.48
Exhibit 4.48
RANDGOLD RESOURCES LIMITED
AND
0858065 B.C. LTD
AND
MOTO GOLDMINES LIMITED
ARRANGEMENT AGREEMENT
DATED August 5, 2009
TABLE OF CONTENTS
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| | | Page | |
| ARTICLE 1 INTERPRETATION
| | | 1 | |
|
| | | | |
| 1.1 Definitions
| | | 1 | |
| 1.2 Interpretation Not Affected by Headings
| | | 14 | |
| 1.3 Number and Gender
| | | 14 | |
| 1.4 Date for Any Action
| | | 14 | |
| 1.5 Currency
| | | 14 | |
| 1.6 Accounting Matters
| | | 15 | |
| 1.7 Knowledge
| | | 15 | |
| 1.8 Schedules
| | | 15 | |
|
| | | | |
| ARTICLE 2 THE ARRANGEMENT
| | | 15 | |
|
| | | | |
| 2.1 Arrangement
| | | 15 | |
| 2.2 Court Orders
| | | 15 | |
| 2.3 Moto Meeting
| | | 16 | |
| 2.4 Moto Circular
| | | 17 | |
| 2.5 Final Order
| | | 19 | |
| 2.6 Court Proceedings
| | | 19 | |
| 2.7 Effect on the Arrangement and Effective Date
| | | 20 | |
| 2.8 Payment of Consideration
| | | 20 | |
| 2.9 Preparation of Filings
| | | 20 | |
| 2.10 Announcement and Shareholder Communications
| | | 21 | |
| 2.11 Withholding Taxes
| | | 21 | |
|
| | | | |
| ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF MOTO
| | | 21 | |
|
| | | | |
| 3.1 Representations and Warranties
| | | 21 | |
| 3.2 Survival of Representations and Warranties
| | | 39 | |
|
| | | | |
| ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF RANDGOLD
| | | 39 | |
|
| | | | |
| 4.1 Representations and Warranties
| | | 39 | |
| 4.2 Survival of Representations and Warranties
| | | 43 | |
|
| | | | |
| ARTICLE 5 COVENANTS OF MOTO AND RANDGOLD
| | | 43 | |
|
| | | | |
| 5.1 Covenants of Moto Regarding the Conduct of Business
| | | 43 | |
| 5.2 Covenants of Moto Relating to the Arrangement
| | | 47 | |
| 5.3 Covenants of Randgold Regarding the Performance of Obligations
| | | 48 | |
| 5.4 Mutual Covenants
| | | 49 | |
| 5.5 Employment Agreements
| | | 51 | |
| 5.6 Randgold Guarantee
| | | 52 | |
|
| | | | |
| ARTICLE 6 CONDITIONS
| | | 52 | |
|
| | | | |
| 6.1 Mutual Conditions Precedent
| | | 52 | |
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TABLE OF CONTENTS
(continued)
| | | | | |
| | | Page | |
| 6.2 Additional Conditions Precedent to the Obligations of Randgold
| | | 53 | |
| 6.3 Additional Conditions Precedent to the Obligations of Moto
| | | 54 | |
| 6.4 Satisfaction of Conditions
| | | 55 | |
|
| | | | |
| ARTICLE 7 ADDITIONAL AGREEMENTS
| | | 55 | |
|
| | | | |
| 7.1 Notice and Cure Provisions
| | | 55 | |
| 7.2 Non-Solicitation
| | | 56 | |
| 7.3 Right to Match
| | | 58 | |
| 7.4 Expenses and Termination Fees
| | | 59 | |
| 7.5 Access to Information; Confidentiality
| | | 61 | |
| 7.6 Insurance and Indemnification
| | | 61 | |
|
| | | | |
| ARTICLE 8 TERM, TERMINATION, AMENDMENT AND WAIVER
| | | 62 | |
|
| | | | |
| 8.1 Term
| | | 62 | |
| 8.2 Termination
| | | 62 | |
| 8.3 Amendment
| | | 64 | |
| 8.4 Waiver
| | | 64 | |
|
| | | | |
| ARTICLE 9 GENERAL PROVISIONS
| | | 65 | |
|
| | | | |
| 9.1 Privacy
| | | 65 | |
| 9.2 Notices
| | | 65 | |
| 9.3 Governing Law; Waiver of Jury Trial
| | | 66 | |
| 9.4 Injunctive Relief
| | | 67 | |
| 9.5 Time of Essence
| | | 67 | |
| 9.6 Entire Agreement, Binding Effect and Assignment
| | | 67 | |
| 9.7 Severability
| | | 67 | |
| 9.8 Counterparts, Execution
| | | 68 | |
|
| | | | |
| SCHEDULE A TO THE ARRANGEMENT AGREEMENT
| | | 70 | |
|
| | | | |
| SCHEDULE B TO THE ARRANGEMENT AGREEMENT
| | | 85 | |
|
| | | | |
| SCHEDULE C TO THE ARRANGEMENT AGREEMENT
| | | 87 | |
|
| | | | |
| SCHEDULE D TO THE ARRANGEMENT AGREEMENT
| | | 88 | |
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ARRANGEMENT AGREEMENT
THIS
ARRANGEMENT AGREEMENT dated August 5, 0000,
X X X X X X X:
RANDGOLD RESOURCES LIMITED, a corporation incorporated under the laws of Jersey
(“Randgold”)
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0858065 B.C. LTD., a corporation incorporated under the laws of the Province of
British Columbia (“Subco”)
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MOTO GOLDMINES LIMITED, a corporation incorporated under the laws of the Province of
British Columbia (Canada) (“Moto”)
THIS AGREEMENT WITNESSES THAT in consideration of the covenants and agreements herein
contained and other good and valuable consideration (the receipt and sufficiency of which are
hereby acknowledged), the Parties hereto covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, unless the context otherwise requires:
“Acquisition Proposal” means, other than the transactions contemplated by this
Agreement, any offer, proposal, expression of interest, or inquiry from any person
(other than Randgold or any of its affiliates) relating to: (i) any acquisition or
sale, direct or indirect, of: (a) the assets of Moto and/or one or more of its
subsidiaries that, individually or in the aggregate, constitute 20% or more of the
fair market value of the consolidated assets of Moto and its subsidiaries taken as a
whole; or (b) 20% or more of any voting or equity securities of Moto or any of its
subsidiaries whose assets, individually or in the aggregate, constitute 20% or more
of the fair market value of the consolidated assets of Moto and its subsidiaries;
(ii) any take-over bid, tender offer or exchange offer for any class of voting or
equity securities of Moto; or (iii) a plan of arrangement, merger, amalgamation,
consolidation, share exchange, business combination,
reorganization, recapitalization, liquidation, dissolution or other similar
transaction involving Moto or any of its subsidiaries whose assets, individually or
in the aggregate, constitute 20% or more of the fair market value of the
consolidated assets of Moto and its subsidiaries;
“affiliate” has the meaning ascribed thereto in the Securities Act;
“Agreement” means this
arrangement agreement, together with the Disclosure Letter,
as the same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof;
“AIM” means the Alternative Investment Market of the London Stock Exchange;
“AngloGold” means AngloGold Xxxxxxx Limited, a corporation existing under the laws
of South Africa;
“Approvals” means the approvals listed on Schedule 5.1(j) to the Disclosure Letter;
“Arrangement” means the arrangement under section 288 of the BCBCA on the terms and
subject to the conditions set out in the Plan of Arrangement, subject to any
amendments or variations thereto in accordance with Section 8.3 hereof or the Plan
of Arrangement or at the direction of the Court;
“Arrangement Resolution” means the special resolution to be considered at the Moto
Meeting, substantially in the form and content of Schedule B hereto;
“ATF” means the revised Financial and Technical Assistance Contract between OKIMO
and Kibali dated July 3, 2008 as amended by an agreement dated September 30, 2008;
“BCBCA” means the Business Corporations Act (
British Columbia) and the regulations
made thereunder, as promulgated or amended from time to time;
“BCSC” means the
British Columbia Securities Commission, and includes any successor
thereto;
“business day” means any day, other than a Saturday, a Sunday or a statutory or
civic holiday in London, England, New York, New York, Toronto, Ontario, Perth,
Australia or Vancouver,
British Columbia;
“Cash Consideration” means US$4.47 in cash for each Moto Share which a Former Moto
Shareholder may elect to receive, subject to the Cash Parameter, by making the
appropriate Election;
“Cash Parameter” means US$243,787,378.72 being the maximum amount of cash Subco
shall be obligated to pay, and that Former Moto Shareholders that
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make an Election to receive the Cash Consideration shall collectively be entitled to
receive (other than in respect of any cash payable in lieu of fractional Randgold
Shares or Randgold ADSs), pursuant to the Arrangement;
“Change in Recommendation” has the meaning ascribed thereto in Section 8.2.1(c)(i);
“Competition Act” means the Competition Act (Canada), as amended from time to time;
“Concessions” means any mining concession, claim, lease, licence, permit or other
right to explore for, exploit, develop, mine or produce minerals or any interest
therein which Moto or any of its subsidiaries owns or has a right or option to
acquire or use, all as indicated in the list set out in Section 3.1(s) of the
Disclosure Letter;
“Confidentiality Agreement” means the letter agreement among Randgold, AngloGold and
Moto dated July 22, 2009 pursuant to which Randgold and AngloGold have been provided
with access to confidential information of Moto and Moto has been provided with
access to confidential information of Randgold and AngloGold;
“Contract” means any contract, agreement, license, franchise, lease, arrangement or
other right or obligation to which Moto or any of its subsidiaries is a party or by
which Moto or any of its subsidiaries is bound or affected or to which any of their
respective properties or assets is subject;
“Converted Randgold Option” shall have the meaning ascribed thereto in the Plan of
Arrangement;
“Court” means the Supreme Court of
British Columbia;
“Data Room Information” means the documents listed in the index attached to the
Disclosure Letter;
“Data
Site” means the secure website at
xxxxx://xxxxxxx.xxxxxxxxxx.xxx;
“Depositary” means any trust company, bank or financial institution agreed to in
writing between Randgold and Moto for the purpose of, among other things, exchanging
certificates representing Moto Shares for certificates representing the Randgold
Share Consideration and Randgold ADS Consideration and paying the Cash Consideration
in connection with the Arrangement;
“Depositary Interests” means depositary interests representing Moto Shares which
depositary interests are listed for trading on AIM;
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“Disclosure Letter” means the disclosure letter executed by Moto and delivered to
Randgold in connection with the execution of this Agreement, as such letter may be
amended, supplemented or otherwise modified from time to time with the consent of
Randgold;
“Dissent Rights” means the rights of dissent in respect of the Arrangement described
in the Plan of Arrangement;
“DRC” means The Democratic Republic of Congo;
“Effective Date” means the date agreed to by Randgold and Moto in writing as the
effective date of the Arrangement, after all of the conditions precedent to the
completion of the Arrangement as set out in the
Arrangement Agreement and the Final
Order have been satisfied or waived;
“Effective Time” means 12:01 a.m. (Vancouver time) on the Effective Date;
“Election” means the election to be made by each Former Moto Shareholder pursuant to
the Letter of Transmittal and Election Form to receive the Cash Consideration, the
Randgold Share Consideration, the Randgold ADS Consideration or some combination
thereof, subject to the Cash Parameter;
“Election Deadline” means 4:00 p.m. (Vancouver time) on the day that is two business
days before the Moto Meeting;
“Environmental Laws” means all applicable federal, provincial, state, local and
foreign Laws, imposing liability or standards of conduct for, or relating to, the
regulation of activities, materials, substances or wastes in connection with, or
for, or to, the protection of human health, safety, the environment or natural
resources (including ambient air, surface water, groundwater, wetlands, land surface
or subsurface strata, wildlife, aquatic species and vegetation);
“Environmental Liabilities” means, with respect to any person, all liabilities,
remedial and removal costs, investigation costs, capital costs, operation and
maintenance costs, losses, damages, (including punitive damages, property damages,
consequential damages and treble damages), costs and expenses, fines, penalties and
sanctions incurred as a result of, or related to, any claim, suit, action,
administrative order, investigation, proceeding or demand by any person, whether
based in contract, tort, implied or express warranty, strict liability, criminal or
civil statute or common law arising under, or related to, any Environmental Laws,
Environmental Permits, or in connection with any Release or threatened Release
whether on, at, in, under, from or about or in the vicinity of any real or personal
property;
“Environmental Permits” means all permits, licenses, written authorizations,
certificates, approvals, program participation requirements, sign-offs or
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registrations required by or available with or from any Governmental Entity under
any Environmental Laws;
“Exchanges” means, collectively, the TSX and AIM;
“Feasibility Study” means the optimized feasibility study in respect of the Moto
Gold Project prepared by Lycopodium Minerals Pty. Ltd.;
“Final Order” means the final order of the Court pursuant to section 291 of the
BCBCA, approving the Arrangement as such order may be amended by the Court at any
time prior to the Effective Date or, if appealed, then, unless such appeal is
withdrawn or denied, as affirmed or as amended on appeal;
“Former Moto Shareholders” means the holders of Moto Shares immediately prior to the
Effective Time;
“GAAP” means Canadian generally accepted accounting principles;
“GICC Agreement” means the agreement dated December 31, 2007 between Moto and
Generale Industrielle Commerce au Congo, as amended by a letter agreement dated
December 4, 2008;
“Governmental Entity” means: (a) any multinational, federal, provincial, state,
regional, municipal, local or other government, governmental or public department,
central bank, court, tribunal, arbitral body, commission, board, bureau or agency,
domestic or foreign; (b) any subdivision, agent, commission, board or authority of
any of the foregoing; (c) any quasi-governmental or private body, including any
tribunal, commission, regulatory agency or self-regulatory organization, exercising
any regulatory, expropriation or taxing authority under or for the account of any of
the foregoing; or (d) any stock exchange, including the Exchanges;
“Hazardous Substance” means any pollutant, contaminant, waste or chemical or any
toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous or
deleterious substance, waste or material, including petroleum, polychlorinated
biphenyls, asbestos and urea-formaldehyde insulation, and any other material or
contaminant regulated or defined under any Environmental Law;
“HSR Act” means the United States Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended from time to time;
“including” means including without limitation, and “include” and “includes” each
have a corresponding meaning;
“Intellectual Property” means any licenses for or other rights to use, any
inventions, patent applications, patents, trade-marks (both registered and
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unregistered), trade names, copyrights, trade secrets and other proprietary
information of Moto;
“Interim Order” means the interim order of the Court, providing for, among other
things, the calling and holding of the Moto Meeting, as the same may be amended by
the Court;
“IFRS” means the International Financial Reporting Standards as issued by the
International Accounting Standards Board;
“Investment Canada Act” means the Investment Canada Act, as amended from time to
time;
“Jersey JVCo” means a company incorporated under the laws of Jersey and owned,
indirectly, 50% by Randgold and, indirectly, 50% by AngloGold;
“Joint Venture Agreement” means the joint venture agreement relating to the
constitution of a joint venture company for the development of the Moto Gold Project
dated March 10, 2009 between OKIMO, Moto, Border Energy Pty. Limited and Kibali;
“July 2009 Protocol” means the protocol agreement entered or to be entered into
between Moto and the DRC Government regarding the early extension of the Concessions
and the DRC Government’s approval of a change of control of Moto in the form
provided by Moto to Randgold on July 24, 2009, as amended from time to time with the
consent of Randgold, such consent not to be unreasonably withheld or delayed (it
being acknowledged and agreed that a refusal by Randgold to consent to any material
increase in the obligations of Moto, or material decrease in the rights of Moto,
under the July 2009 Protocol shall not be, or be deemed to be, an unreasonable
withholding of consent);
“Key Regulatory Approvals” means those sanctions, rulings, consents, orders,
exemptions, permits and other approvals (including the lapse, without objection, of
a prescribed time under a statute or regulation that states that a transaction may
be implemented if a prescribed time lapses following the giving of notice without an
objection being made) of Governmental Entities as set out in Schedule C hereto;
“Key Third Party Consents” means those consents, approvals and notices required from
any third party to proceed with the transactions contemplated by this Agreement and
the Plan of Arrangement, as set out in Schedule D hereto;
“Kibali” means Kibali Goldmines s.p.r.l., the DRC incorporated joint venture company
that is carrying out the Moto Gold Project and that is owned as to 70% by Moto and
30% by OKIMO;
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“Law” or “Laws” means all laws (including common law), by-laws, statutes, rules,
regulations, principles of law and equity, orders, rulings, ordinances, judgements,
injunctions, determinations, awards, decrees or other requirements, whether domestic
or foreign, and the terms and conditions of any grant of approval, permission,
authority or license of any Governmental Entity or self- regulatory authority
(including the Exchanges), and the term “applicable” with respect to such Laws and
in a context that refers to one or more Parties, means such Laws as are applicable
to such Party or its business, undertaking, property or securities and emanate from
a Person having jurisdiction over the Party or Parties or its or their business,
undertaking, property or securities;
“Letter of Transmittal and Election Form” means a form whereby Former Moto
Shareholders may elect, subject to the Cash Parameter, to receive the Cash
Consideration, the Randgold Share Consideration, the Randgold ADS Consideration or
some combination thereof in exchange for their Moto Shares;
“Liens” means any hypothecs, mortgages, pledges, assignments, liens, charges,
security interests, encumbrances and adverse rights or claims, other third person
interest or encumbrance of any kind, whether contingent or absolute, and any
agreement, option, right or privilege (whether by Law, contract or otherwise)
capable of becoming any of the foregoing;
“Locked-up Shareholders” means each of the officers and directors of Moto, Société
D’organisation, De Participation Et De Management Orgamon (and its affiliates),
Mackenzie Financial Corporation and Electrum Strategic Holdings, LLC;
“Material Adverse Effect” means in respect of any person, any change, effect, event
or occurrence that individually or in the aggregate with other such changes,
effects, events or occurrences, is or would reasonably be expected to be, material
and adverse to the business, results of operations or financial condition of that
person and its subsidiaries, taken as a whole, except any change, effect, event or
occurrence resulting from or relating to: (i) the announcement of the execution of
this Agreement or the transactions contemplated hereby and, in the case of Moto, the
communication by Randgold of its plans or intentions with respect to Moto or any of
its subsidiaries; (ii) changes in general economic, securities, financial, banking
or currency exchange markets; (iii) any change in GAAP; (iv) any natural disaster
provided that it does not have a materially disproportionate effect on that person
relative to comparable exploration and/or mining companies; (v) changes affecting
the mining industry generally or the price of precious metals, provided that such
changes do not have a materially disproportionate effect on that person relative to
comparable mining and/or exploration companies; (vi) generally applicable changes in
applicable Law; (vii) the commencement or continuation of any war, armed hostilities
or acts of terrorism other than in the area of the Moto Gold Project and directly
affecting the Moto Gold Project; (viii) changes in political or civil conditions in
the DRC that do not disproportionately affect Moto
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relative to comparable mining and/or exploration companies; or (ix) any decrease in
the market price or any decline in the trading volume of that person’s common shares
on the principal stock exchange for such securities (it being understood that the
causes underlying such change in market price or trading volume (other than those in
items (i) to (ix) above) may be taken into account in determining whether a Material
Adverse Effect has occurred);
“Material Contracts” means any Contract: (i) if terminated or modified or if it
ceased to be in effect, would reasonably be expected to have a Material Adverse
Effect on Moto; (ii) under which Moto or any of its subsidiaries has directly or
indirectly guaranteed any liabilities or obligations of a third party (other than
ordinary course endorsements for collection) in excess of $1,000,000 in the
aggregate; (iii) relating to indebtedness for borrowed money, whether incurred,
assumed, guaranteed or secured by any asset, with an outstanding principal amount in
excess of $1,000,000; (iv) providing for the establishment, organization or
formation of any joint ventures; (v) under which Moto or any of its subsidiaries is
obligated to make or expects to receive payments in excess of $500,000 over the
remaining term of the contract; (vi) that limits or restricts Moto or any of its
subsidiaries from engaging in any line of business or any geographic area in any
material respect or (vii) that is otherwise material to Moto and its subsidiaries,
considered as a whole; and, for greater certainty, includes the Material Contracts
listed in Schedule 3.1(t) to the Disclosure Letter;
“material fact” has the meaning ascribed thereto in the Securities Act;
“material subsidiary” means, in the case of Moto, those subsidiaries of Moto as
indicated in Schedule 3.1(i) of the Disclosure Letter;
“MD&A” has the meaning ascribed thereto in Section 3.1(k);
“Moto Benefit Plans” has the meaning ascribed thereto in Section 3.1(aa)(i);
“Moto Board” means the board of directors of Moto as the same is constituted from
time to time;
“Moto Circular” means the notice of the Moto Meeting and accompanying management
information circular, including all schedules, appendices and exhibits thereto, to
be sent to the Moto Securityholders in connection with the Moto Meeting, as amended,
supplemented or otherwise modified from time to time;
“Moto Financial Statements” has the meaning ascribed thereto in Section 3.1(k);
“Moto Gold Project” means the 70% joint venture interest of Moto in the Moto Gold
Project located in the north-east of the DRC, approximately 560 kilometres
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northeast of the City of Kisangani and 150 kilometres west of the Ugandan border
town of Arua;
“Moto Meeting” means the special meeting of Moto Securityholders, including any
adjournment or postponement thereof, to be called and held in accordance with the
Interim Order to consider the Arrangement Resolution;
“Moto Options” means the outstanding options to purchase Moto Shares granted under
the Moto Stock Option Plan;
“Moto Public Disclosure Record” means all documents and information required to be
filed by Moto under applicable Securities Laws on the System for Electronic Document
Analysis Retrieval (SEDAR), during the three years prior to the date hereof;
“Moto Securityholders” means, collectively, the holders of Moto Shares and Moto
Options;
“Moto Securityholder Approval” means approval of the Arrangement Resolution by: (a)
66 2/3% of the votes cast on the Arrangement Resolution by Moto Securityholders,
voting as a single class, present in person or by proxy at the Moto Meeting; and (b)
a simple majority of the Moto Shares that are voted at the Moto Meeting;
“Moto Shareholder Rights Plan” means the Shareholder Protection Rights Agreement
dated as of February 4, 2008 between Moto and Computershare Investor Services Inc.,
as rights agent, as amended from time to time;
“Moto Shareholders” means the holders of Moto Shares;
“Moto Shares” means common shares in the capital of Moto, as currently constituted,
including Moto Shares represented by Depositary Interests;
“Moto Stock Option Plan” means the Incentive Stock Option Plan of Moto approved by
holders of Moto Shares on May 30, 2008;
“Moto Warrant” means the warrant issued by Moto to Alchemy Securities Pty. Ltd. on
or about May 3, 2006 providing for the right to acquire 500,000 Moto Shares at the
price of $7.65 per Moto Share on or before May 2, 2010;
“NASDAQ” means the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotations System;
“NI 43-101” means National Instrument 43-101 — Standards of Disclosure for Mineral
Projects;
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“ordinary course of business”, “ordinary course of business consistent with past
practice”, or any similar reference, means, with respect to an action taken by a
person, that such action is consistent with the past practices of such person and is
taken in the ordinary course of the normal day-to-day business and operations of
such person; provided that in any event such action is not unreasonable or unusual;
“OKIMO” means Office des Mines d’Or de Kilo-Moto, a DRC government- owned entity;
“OKIMO Assignment” means the agreement dated December 31, 2007 between Orgaman and
Moto pursuant to which Orgaman assigned the right to receive payment of the OKIMO
Loan to Moto in consideration of the agreement of Moto to pay the Loan Consideration
(as such term is defined therein) to Orgaman;
“OKIMO Loan” means a loan in the amount of US$25,265,843 owing by OKIMO to Orgaman,
as at August 4, 2009;
“Option Election” has the meaning ascribed to such term in the Plan of Arrangement;
“Option Letter of Transmittal and Election Form” has the meaning ascribed to such
term in the Plan of Arrangement;
“Orgaman” means Societe d’Organization, de Participation et de Management, a
Congolese incorporated company;
“Outside Date” means December 4, 2009, or such later date as may be agreed to in
writing by the Parties, acting reasonably;
“Parties” means Moto, Subco and Randgold, and “Party” means one of them;
“Permit” means any license, permit, certificate, consent, order, grant, approval,
classification, registration or other authorization of and from any Governmental
Entity, other than the Concessions;
“person” includes an individual, partnership, association, body corporate, trustee,
executor, administrator, legal representative, government (including any
Governmental Entity) or any other entity, whether or not having legal status;
“Pre-Acquisition Reorganization” has the meaning ascribed to it in Section 5.4(c);
“Plan of Arrangement” means the plan of arrangement, substantially in the form of
Schedule A hereto, and any amendments or variations thereto made in accordance with
Section 8.3 hereof or the Plan of Arrangement or at the direction of the Court;
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“Randgold ADS Consideration” means 0.07061 of a Randgold ADS for each Moto Share
which a Former Moto Shareholder may elect to receive by making the appropriate
Election or by having been deemed to have made a Randgold ADS Deemed Election;
“Randgold ADS Deemed Election” has the meaning ascribed to it in the Plan of
Arrangement;
“Randgold ADSs” means the American depositary shares of Randgold, each representing
one Randgold Share;
“Randgold Financial Statements” has the meaning ascribed thereto in Section 4.1(h);
“Randgold Option Plan” means the Randgold Resources Limited Share Option Scheme;
“Randgold Options” means options to purchase Randgold Shares granted under the
Randgold Option Plan;
“Randgold Public Disclosure Record” means all documents and information required to
be filed by Randgold under the rules and regulations promulgated under the U.S.
federal securities laws on the SEC’s XXXXX database, during the three years prior to
the date hereof;
“Randgold Share Consideration” means 0.07061 of a Randgold Share for each Moto Share
which a Former Moto Shareholder may elect to receive by making the appropriate
Election or by having been deemed to have made a Randgold Share Deemed Election;
“Randgold Share Deemed Election” has the meaning ascribed to it in the Plan of
Arrangement;
“Randgold Shareholders” means the holders of Randgold Shares;
“Randgold Shares” means the ordinary shares in the authorized share capital of
Randgold;
“Randgold Technical Reports” has the meaning ascribed to such term in Section
2.4(c);
“Red Back” means Red Back Mining Inc;
“Red Back Agreement” means the
arrangement agreement entered into between Moto and
Red Back dated June 1, 2009 (as amended);
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“Red Back Termination Fee” means the termination fee set out in Section 7.4 of the
Red Back Agreement;
“Regulatory Authorities” has the meaning ascribed to such term in Section 3.1(z)(i);
“Regulatory Authorizations” has the meaning ascribed to such term in section
3.1(z)(ii);
“Release” means any release, spill, emission, leaking, pumping, pouring, emitting,
emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Substance in the indoor or outdoor environment,
including the movement of Hazardous Substance through or in the air, soil, surface
water, ground water or property;
“Response Period” has the meaning ascribed to such term in Section 7.3.1(b);
“Returns” means all reports, forms, elections, information statements and returns
(whether in tangible, electronic or other form) including any amendments, schedules,
attachments, supplements, appendices and exhibits thereto relating to, or required
to be filed or prepared in connection with any Taxes;
“SEC” means the United States Securities and Exchange Commission;
“Securities Act” means the Securities Act (
British Columbia) and the rules,
regulations and published policies made thereunder, as now in effect and as they may
be promulgated or amended from time to time;
“Securities Authorities” means the BCSC and the applicable securities commissions
and other securities regulatory authorities in each of the other provinces of
Canada;
“Securities Laws” means the Securities Act, together with all other applicable
Canadian provincial securities laws, rules and regulations and published policies
thereunder, as now in effect and as they may be promulgated or amended from time to
time;
“SEDAR” means the System for Electronic Document Analysis and Retrieval;
“Share Exchange Ratio” shall have the meaning ascribed thereto in the Plan of
Arrangement;
“SRP Rights” means the rights issued pursuant to the Moto Shareholder Rights Plan;
“Subco” means 0858065 B.C. Ltd., a corporation incorporated under the laws of
British Columbia that, as at the date of this Agreement, is an indirect wholly-
- 12 -
owned subsidiary of Randgold and that, at the Effective Time, will be an indirect
wholly-owned subsidiary of Jersey JVCo;
“subsidiary” means, with respect to a specified body corporate, any body corporate
of which more than 50% of the outstanding shares ordinarily entitled to elect a
majority of the board of directors thereof (whether or not shares of any other class
or classes shall or might be entitled to vote upon the happening of any event or
contingency) are at the time owned directly or indirectly by such specified body
corporate and shall include any body corporate, partnership, joint venture or other
entity over which such specified body corporate exercises direction or control or
which is in a like relation to a subsidiary;
“Superior Proposal” means any bona fide, unsolicited, written Acquisition Proposal
made after the date of this Agreement (and not obtained in violation of Section 7.2)
that relates to the acquisition of 100% of the outstanding Moto Shares (other than
Moto Shares owned by the Person making the Superior Proposal) or all or
substantially all of the consolidated assets of Moto and its subsidiaries and (i)
that is reasonably capable of being completed without undue delay, taking into
account all financial, legal, regulatory and other aspects of such proposal and the
person making such proposal; (ii) that, in the case of an Acquisition Proposal to
acquire 100% of the outstanding Moto Shares, is made available to all Moto
Shareholders on the same terms and conditions; (iii) is not subject to a due
diligence condition; (iv) which is fully financed or in respect of which the Board
of Directors of Moto has concluded, in good faith, there is a reasonable likelihood
that any required financing will be obtained; and (iv) in respect of which the Moto
Board determines, in its good faith judgment, after receiving the written advice of
its outside legal and financial advisors, that (a) failure to recommend such
Acquisition Proposal to the holders of Moto Shares would be inconsistent with its
fiduciary duties under applicable Law; and (b) having regard for all of its terms
and conditions, such Acquisition Proposal, would, if consummated in accordance with
its terms (but not assuming away any risk of non-completion), result in a
transaction more favourable to the holders of Moto Shares from a financial point of
view than the Arrangement, after taking into account any change to the Arrangement
proposed by Randgold pursuant to Section 7.3;
“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, as
amended from time to time;
“Taxes” means: (a) any and all taxes, imposts, levies, withholdings, duties, fees,
premiums, assessments and other charges of any kind, however denominated and
instalments in respect thereof, including any interest, penalties, fines or other
additions that have been, are or will become payable in respect thereof, imposed by
any Governmental Entity, including for greater certainty all income or profits taxes
(including Canadian federal, provincial and territorial income taxes), payroll and
employee withholding taxes, employment taxes, unemployment insurance,
- 13 -
disability taxes, social insurance taxes, sales and use taxes, ad valorem taxes,
excise taxes, goods and services taxes, harmonized sales taxes, franchise taxes,
gross receipts taxes, capital taxes, business license taxes, mining royalties,
alternative minimum taxes, estimated taxes, abandoned or unclaimed (escheat) taxes,
occupation taxes, real and personal property taxes, stamp taxes, environmental
taxes, transfer taxes, severance taxes, workers’ compensation, Canada,
British
Columbia, the DRC and other government pension plan premiums or contributions and
other governmental charges, and other obligations of the same or of a similar nature
to any of the foregoing, which a Party or any of its subsidiaries is required to
pay, withhold or collect, together with any interest, penalties or other additions
to tax that may become payable in respect of such taxes, and any interest in respect
of such interest, penalties and additions whether disputed or not; and (b) any
liability for the payment of any amount described in clause (a) of this definition
as a result of being a member of an affiliated, consolidated, combined or unitary
group for any period, as a result of any Tax sharing or Tax allocation agreement,
arrangement or understanding, or as a result of being liable to another person’s
Taxes as a transferee or successor, by contract or otherwise;
“Termination Fee” has the meaning ascribed thereto in Section 7.4.3;
“Termination Fee Event” has the meaning ascribed thereto in Section 7.4.4;
“Tripartite Agreement” means an agreement dated 12 June 2009 among Moto, Kibali, a
subsidiary of Moto, Orgaman and OKIMO in respect of the novation of Kibali to all
rights of Orgaman in respect of the OKIMO Loan;
“TSX” means the Toronto Stock Exchange;
“United States” means the United States of America, its territories and possessions,
any State of the United States and the District of Columbia;
“U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as the
same has been, and hereafter from time to time, may be amended;
“U.S. Securities Act” means the United States Securities Act of 1933 as the same has
been, and hereinafter from time to time may be, amended;
“U.S. Tax Code” means the United States Internal Revenue Code of 1986, as amended;
and
“Voting Agreements” means the voting agreements (including all amendments thereto)
between Randgold and the Locked-up Shareholders setting forth the terms and
conditions upon which they have agreed to vote their Moto Shares and Moto Options in
favour of the Arrangement Resolution.
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1.2 Interpretation Not Affected by Headings
The division of this Agreement into Articles, Sections, subsections and paragraphs and the
insertion of headings are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement. Unless the contrary intention appears, references in
this Agreement to an Article, Section, subsection, paragraph or Schedule by number or letter or
both refer to the Article, Section, subsection, paragraph or Schedule, respectively, bearing that
designation in this Agreement.
1.3 Number and Gender
In this Agreement, unless the contrary intention appears, words importing the singular include
the plural and vice versa, and words importing gender include all genders.
1.4 Date for Any Action
If the date on which any action is required to be taken hereunder by a Party is not a business
day, such action shall be required to be taken on the next succeeding day which is a business day.
1.5 Currency
Unless otherwise stated, all references in this Agreement to sums of money are expressed in
lawful money of Canada and “$” refers to Canadian dollars.
1.6 Accounting Matters
Unless otherwise stated, all accounting terms used in this Agreement in respect of Moto shall
have the meanings attributable thereto under GAAP and all determinations of an accounting nature in
respect of Moto required to be made shall be made in a manner consistent with GAAP consistently
applied.
1.7 Knowledge
In this Agreement, references to “the knowledge of Moto” means the actual knowledge of Xxxxxx
Xxxxxxx, solely in his capacity as Chief Operating Officer of Moto, and Xxxx Xxxxxxx, solely in his
capacity as the Chief Financial Officer of Moto, after due enquiry within Moto and its subsidiaries
and references “to the knowledge of Randgold” means the actual knowledge of Xxxx Xxxxxxx, solely in
his capacity as Chief Executive Officer of Randgold, and Xxxxxx Xxxxxxxxxxxx, solely in his
capacity as the Chief Financial Officer of Randgold, after due enquiry within Randgold and its
subsidiaries .
1.8 Schedules
The following Schedules are annexed to this Agreement and are incorporated by reference into
this Agreement and form a part hereof:
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| | | | | |
| Schedule A
| | -
| | Plan of Arrangement |
| Schedule B
| | -
| | Arrangement Resolution |
| Schedule C
| | -
| | Key Regulatory Approvals |
| Schedule D
| | -
| | Key Third Party Consents |
ARTICLE 2
THE ARRANGEMENT
2.1 Arrangement
Moto and Randgold agree that the Arrangement will be implemented in accordance with and
subject to the terms and conditions contained in this Agreement and the Plan of Arrangement.
2.2 Court Orders
| | (a) | | Moto shall apply to the Court, in a manner acceptable to Randgold, acting
reasonably, pursuant to section 291 of the BCBCA for the Interim Order and the Final
Order as follows: |
| | (i) | | As soon as reasonably practicable following the date of
execution of this Agreement, Moto shall file, proceed with and diligently
prosecute an application to the Court for the Interim Order which shall
provide, among other things: |
| | (A) | | the class of persons to whom notice is to be
provided in respect of the Arrangement and the Moto Meeting and the
manner in which such notice is to be provided; |
| |
| | (B) | | that the requisite approval for the Arrangement
Resolution shall be as set forth in the definition of “Moto
Securityholder Approval” herein; |
| |
| | (C) | | that in all other respects, the terms,
conditions and restrictions of the Moto constating documents, including
quorum requirements and other matters, shall apply in respect of the
Moto Meeting; |
| |
| | (D) | | for the grant of Dissent Rights to registered
holders of Moto Shares; |
| |
| | (E) | | for notice requirements with respect to the
presentation of the application to the Court for the Final Order; |
| |
| | (F) | | that the Moto Meeting may be adjourned from
time to time by management of Moto in accordance with the terms of the
Agreement without the need for additional approval of the Court; |
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| | (G) | | that the record date for Moto Shareholders
entitled to notice of and to vote at the Moto Meeting will not change
in respect of any adjournment(s) of the Moto Meeting; and |
| |
| | (H) | | that it is Randgold’s intention to rely upon
Section 3(a)(10) of the U.S. Securities Act to implement the
transactions contemplated hereby in respect of the Moto Securityholders
who are resident in the United States. |
| | (ii) | | subject to obtaining the approvals contemplated by the Interim
Order, and as may be directed by the Court in the Interim Order, take all steps
necessary or desirable to submit the Arrangement to the Court and to apply for
the Final Order. |
2.3 Moto Meeting
Subject to receipt of the Interim Order and the terms of this Agreement:
| | (a) | | Moto agrees to convene and conduct the Moto Meeting in accordance with the
Interim Order, Moto’s constating documents and applicable Laws on the date that is 21
days after the filing of the Moto Circular on SEDAR, or such other date as the
Parties may agree upon, each acting reasonably, provided, however, that (x) the
Randgold Technical Reports are filed as required by NI 43-101 prior to or
concurrently with the filing by Moto of the Moto Circular on SEDAR; and (y) if the
date of the Moto Meeting falls within the Response Period, Moto shall be permitted to
postpone the meeting until the business day following the expiry of the Response
Period. |
| |
| | (b) | | Moto will use its commercially reasonable efforts to solicit proxies in
favour of the approval of the Arrangement Resolution, including, if so requested by
Randgold, using proxy solicitation services. |
| |
| | (c) | | Moto will advise Randgold as Randgold may reasonably request, and at least
on a daily basis on each of the last 10 business days prior to the date of the Moto
Meeting, as to the tally of the proxies received by Moto in respect of the
Arrangement Resolution. |
| |
| | (d) | | Moto will promptly advise Randgold of any written notice of dissent or
purported exercise by any Moto Shareholder of Dissent Rights received by Moto in
relation to the Arrangement Resolution and any withdrawal of Dissent Rights received
by Moto and, subject to applicable Law, any written communications sent by or on
behalf of Moto to any Moto Shareholder exercising or purporting to exercise Dissent
Rights in relation to the Arrangement Resolution. |
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| | (e) | | Within 5 days of the date of execution of this Agreement, Moto will use its
best efforts to prepare or cause to be prepared and provide to Randgold a list of the
holders of Moto Options and will deliver to Randgold thereafter on demand
supplemental lists setting out any changes thereto, all such deliveries to be in
printed form and, if available, in computer-readable format. |
| | (f) | | As soon as reasonably practicable and in any event not later than September
4, 2009, Moto will convene a meeting of the Moto Board to approve the Moto Circular,
provided that Randgold has provided Moto with all information referred to in Section
2.4(c) to be provided by Randgold as is required, as determined by Randgold, acting
reasonably, to be included in the Moto Circular pursuant to Securities Laws,
including the Randgold Technical Reports in a form, as determined by Randgold, acting
reasonably, that can be filed in accordance with NI 43-101 not later than August 31,
2009, failing which Moto will convene such meeting of the Moto Board no later than 4
days following delivery of such information by Randgold to Moto. |
2.4 Moto Circular
| | (a) | | Moto shall prepare the Moto Circular in compliance with applicable
Securities Laws and file on SEDAR the Moto Circular on a timely basis, and in any
event on or before the date that is five business days after the meeting of the Moto
Board referred to in Section 2.3(f), or such other date as the Parties may agree
upon, each acting reasonably, in all jurisdictions where the same is required to be
filed and mail the same as required by the Interim Order and in accordance with all
applicable Laws, in all jurisdictions where the same is required, complying in all
material respects with all applicable Laws on the date of mailing thereof; provided
in any event that the Randgold Technical Reports are filed as required by NI 43-101
concurrently with the filing by Moto of the Moto Circular on SEDAR. Without limiting
the generality of the foregoing, Moto shall, in consultation with Randgold, use all
commercially reasonable efforts to abridge the timing contemplated by National
Instrument 54-101 — Communication with Beneficial Owners of Securities of a
Reporting Issuer, as provided in section 2.20 thereof. |
| | (b) | | Moto shall ensure that the Moto Circular complies in all material respects
with all applicable Laws, and, without limiting the generality of the foregoing, that
the Moto Circular will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements contained therein not misleading in light of the circumstances in which
they are made (other than in each case with respect to any information relating to
Randgold and its affiliates, including the Randgold Shares and Randgold ADSs, and
AngloGold and the arrangements between Randgold and AngloGold with respect to the
Moto Gold Project) and shall provide Moto Securityholders with information in
sufficient detail to permit them to form a
reasoned judgment concerning the matters to be placed before them at the Moto |
- 18 -
| | | | Meeting and to allow Randgold to rely upon the exemption from registration
provided under Section 3(a)(10) of the U.S. Securities Act with respect to the
issuance of Randgold Shares and Randgold ADSs in exchange for Moto Shares pursuant
to the transactions described herein. Subject to Section 7.2, the Moto Circular
will include the unanimous recommendation of the Moto Board that Moto
Securityholders vote in favour of the Arrangement Resolution, and a statement that
each director of Moto intends to vote all of such director’s Moto Shares
(including any Moto Shares issued upon the exercise of any Moto Options) and Moto
Options in favour of the Arrangement Resolution, subject to the other terms of
this Agreement and the Voting Agreements. |
| | (c) | | Randgold will furnish to Moto all such information regarding Randgold, its
affiliates, the Randgold Shares, the Randgold ADSs, AngloGold and the arrangements
between Randgold and AngloGold with respect to the Moto Gold Project as may be
reasonably required by Moto (including, as required by Section 14.2 of Form 51-102
F5) in the preparation of the Moto Circular and other documents related thereto.
Randgold shall also use commercially reasonable efforts to (i) file all technical
reports required by NI 43-101 in respect of Randgold’s mineral projects on properties
material to Randgold (the “Randgold Technical Reports”) by August 31, 2009 and in any
event on or prior to the filing of the Moto Circular on SEDAR, (ii) ensure that the
estimated proven and probable mineral reserves and estimated indicated, measured and
inferred mineral resources disclosed in the Randgold Technical Reports have been
prepared and disclosed in all material respects in accordance with all applicable
Laws, including NI 43-101; (iii) ensure that the information provided by Randgold to
the Qualified Persons (as defined in NI 43-101) in connection with the preparation of
such estimates is complete and accurate at the time such information is furnished,
and (iv) obtain and file any necessary consents from Qualified Persons and its
auditors to the use of any financial or technical information required to be included
in the Moto Circular. Randgold shall ensure that no such information will include any
untrue statement of a material fact or omit to state a material fact required to be
stated in the Moto Circular in order to make any information so furnished or any
information concerning Randgold, AngloGold and the arrangements between Randgold and
AngloGold with respect to the Moto Gold Project not misleading in light of the
circumstances in which it is disclosed and shall constitute full, true and plain
disclosure of such information concerning Randgold and Subco. |
| | (d) | | Randgold and its legal counsel shall be given a reasonable opportunity to
review and comment on the Moto Circular, prior to the Moto Circular being printed and
mailed to Moto Shareholders and filed with the Securities Authorities, and reasonable
consideration shall be given to any comments made by Randgold and its counsel,
provided that all information relating solely to Randgold, AngloGold and the
arrangements between Randgold and AngloGold with
respect to the Moto Gold Project included in the Moto Circular shall be in form |
- 19 -
| | | | and content satisfactory to Randgold, acting reasonably. Moto shall provide
Randgold with a final copy of the Moto Circular prior to mailing to the Moto
Securityholders. |
| | (e) | | Moto and Randgold shall each promptly notify each other if at any time
before the Effective Date it becomes aware (in the case of Moto only with respect to
Moto and in the case of Randgold only with respect to Randgold) that the Moto
Circular contains an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements contained
therein not misleading in light of the circumstances in which they are made, or that
otherwise requires an amendment or supplement to the Moto Circular, and the Parties
shall co-operate in the preparation of any amendment or supplement to the Moto
Circular, as required or appropriate, and Moto shall promptly mail or otherwise
publicly disseminate any amendment or supplement to the Moto Circular to Moto
Securityholders and, if required by the Court or applicable Laws, file the same with
the Securities Authorities and as otherwise required. |
| | (f) | | Moto shall cause to be sent with the Moto Circular to each Moto Shareholder
entitled to receive such notice of the Moto Meeting pursuant to the Interim Order at
each such Moto Shareholder’s address shown on Moto’s register of shareholders, a
Letter of Transmittal and Election Form. The Letter of Transmittal and Election Form
shall, among other things, allow the Moto Shareholders to make the Election. |
| | (g) | | Moto shall cause to be sent with the Moto Circular to each holder of Moto
Options at each such holder’s address shown on Moto’s register of optionholders, an
Option Letter of Transmittal and Election Form. The Option Letter of Transmittal and
Election Form shall, among other things, allow the Moto Shareholders to make the
Option Election. |
2.5 Final Order
If (i) the Interim Order is obtained, (ii) the Arrangement Resolution is passed at the Moto
Meeting by Moto Securityholders as provided for in the Interim Order and as required by applicable
Law, and (iii) the Key Regulatory Approvals and Key Third Party Consents are obtained, and subject
to the terms of this Agreement, Moto shall as soon as reasonably practicable thereafter and in any
event within three business days thereafter take all steps necessary or desirable to submit the
Arrangement to the Court and diligently pursue an application for the Final Order pursuant to
section 291 of the BCBCA.
2.6 Court Proceedings
Subject to the terms of this Agreement, Randgold will cooperate with, assist and consent to
Moto seeking the Interim Order and the Final Order, including by providing Moto on
a timely basis any information required to be supplied by Randgold in connection therewith.
- 20 -
Moto will provide legal counsel to Randgold with reasonable opportunity to review and comment upon
drafts of all material to be filed with the Court in connection with the Arrangement, and will give
reasonable consideration to all such comments. Moto will also provide legal counsel to Randgold on
a timely basis with copies of any notice of appearance or notice of intent to oppose and any
evidence served on Moto or its legal counsel in respect of the application for the Interim Order or
the Final Order or any appeal therefrom. Subject to applicable Law, Moto will not file any
material with the Court in connection with the Arrangement or serve any such material, and will not
agree to modify or amend materials so filed or served, except as contemplated hereby or with
Randgold’s prior written consent, such consent not to be unreasonably withheld, conditioned or
delayed; provided that nothing herein shall require Randgold to agree or consent to any increase in
the Randgold Share Consideration, the Randgold ADS Consideration, the Cash Consideration or the
Cash Parameter or other modification or amendment to such filed or served materials that expands or
increases Randgold or Subco’s obligations set forth in this Agreement.
2.7 Effect on the Arrangement and Effective Date
Subject to the satisfaction or, where not prohibited and subject to applicable Law, the waiver
of the conditions set forth in Article 6 by the applicable Party for whose benefit such conditions
exist (excluding conditions that, by their terms, cannot be satisfied until the Effective Date, but
subject to the satisfaction or, where not prohibited, the waiver of those conditions as of the
Effective Date by the applicable Party for whose benefit such conditions exist), upon the
Arrangement Resolution having been approved and adopted by the Moto Securityholders at the Moto
Meeting, in accordance with the Interim Order and Moto obtaining the Final Order, the Arrangement
shall be effective at the Effective Time on the Effective Date.
2.8 Payment of Consideration
Randgold will, following receipt of the Final Order and prior to the Effective Time, ensure
that the Depositary has been provided with (i) sufficient funds in escrow to pay the Moto
Shareholders making an Election to receive the Cash Consideration, (ii) sufficient Randgold Shares
in escrow to satisfy the delivery of Randgold Shares to Moto Shareholders making an Election to
receive the Randgold Share Consideration or having been deemed to have made a Randgold Share Deemed
Election, and (iii) sufficient Randgold ADSs in escrow to satisfy the delivery of Randgold ADSs to
Moto Shareholders making an Election or having been deemed to have made a Randgold ADS Deemed
Election to receive the Randgold ADS Consideration to be paid pursuant to the Arrangement.
2.9 Preparation of Filings
Randgold and Moto shall co-operate in the preparation of any application for the Key
Regulatory Approvals and any other orders, registrations, consents, filings, rulings, exemptions,
no-action letters and approvals and the preparation of any documents reasonably deemed by either of
the Parties to be necessary to discharge its respective obligations or
otherwise advisable under applicable Laws in connection with this Agreement or the Plan of
Arrangement.
- 21 -
2.10 Announcement and Shareholder Communications
Randgold and Moto shall each publicly announce the transactions contemplated hereby promptly
following the execution of this Agreement by Randgold, Subco and Moto, the text and timing of each
such announcement to be approved by Randgold and Moto in advance, acting reasonably. Randgold and
Moto agree to co-operate in the preparation of presentations, if any, to Moto Securityholders
regarding the Plan of Arrangement, and no Party shall (i) issue any news release or otherwise make
public announcements with respect to this Agreement or the Plan of Arrangement without the consent
of the other Party (which consent shall not be unreasonably withheld or delayed) or (ii) make any
filing with any Governmental Entity or with any Exchange with respect thereto without prior
consultation with the other Party; provided, however, that the foregoing shall be subject to each
Party’s overriding obligation to make any disclosure or filing required under applicable Laws or
stock exchange rules, and the Party making such disclosure shall use all commercially reasonable
efforts to give prior oral or written notice to the other Party and reasonable opportunity to
review or comment on the disclosure or filing, and if such prior notice is not possible, to give
such notice immediately following the making of such disclosure or filing.
2.11 Withholding Taxes
Randgold, Moto and the Depositary shall be entitled to deduct and withhold from any
consideration payable or otherwise deliverable to any person hereunder and from all dividends or
other distributions otherwise payable to any former Moto Securityholders such amounts as Randgold,
Moto or the Depositary may be required or permitted to deduct and withhold therefrom under any
provision of applicable Laws in respect of Taxes. To the extent that such amounts are so deducted,
withheld and remitted, such amounts shall be treated for all purposes under this Agreement as
having been paid to the person to whom such amounts would otherwise have been paid.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF MOTO
3.1 Representations and Warranties
Moto hereby represents and warrants to and in favour of Randgold as follows, except to the
extent that such representations and warranties are qualified by the Disclosure Letter (which shall
make reference to the applicable section, subsection, paragraph or subparagraph below in respect of
which such qualification is being made), and acknowledges that Randgold is relying upon such
representations and warranties in connection with the entering into of this Agreement:
| | (a) | | Board Approval. As of the date hereof, the Moto Board, after
consultation with its financial and legal advisors, has determined that the Plan of
Arrangement is
fair to the Moto Securityholders and is in the best interests of Moto and has
resolved unanimously to recommend to the Moto Securityholders that they vote in
favour of the Arrangement Resolution. The Moto Board has approved the |
- 22 -
| | | | Arrangement pursuant to the Plan of Arrangement and the execution and performance of this
Agreement. |
| | (b) | | Fairness Opinion. The Moto Board has received the opinion of BMO
Xxxxxxx Xxxxx Inc., its financial advisor, to the effect that, as of the date of such
opinion, subject to the assumptions and limitations set out therein, the
consideration to be received by the Moto Shareholders in connection with the
transactions contemplated by this Agreement is fair, from a financial point of view,
to such Moto Shareholders. |
| | (c) | | Organization and Qualification. Moto and each of its material
subsidiaries is a corporation duly incorporated or an entity duly created and validly
existing under the applicable Laws of its jurisdiction of incorporation, continuance
or creation and has all necessary corporate or other power and capacity to own its
property and assets as now owned and to carry on its business as it is now being
conducted. Moto and each of its material subsidiaries: (a) except as disclosed in
Schedule 3.1(c) of the Disclosure Letter, has all material Permits necessary to
conduct its business substantially as now conducted, as disclosed in the Moto Public
Disclosure Record; and (b) is duly registered or otherwise authorized and qualified
to do business and each is in good standing in each jurisdiction in which the
character of its properties, owned, leased, licensed or otherwise held, or the nature
of its activities makes such qualification necessary, except where the failure to be
so registered or in good standing would not reasonably be expected to have a Material
Adverse Effect on Moto. |
| | (d) | | Authority Relative to this Agreement. Moto has the requisite
corporate power and capacity to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by Moto and the
performance by Moto of its obligations under this Agreement have been duly authorized
by the Moto Board and except for Moto Securityholder Approval, no other corporate
proceedings on its part are necessary to authorize this Agreement or the Arrangement.
This Agreement has been duly executed and delivered by Moto and, constitutes a
legal, valid and binding obligation of Moto, enforceable against Moto in accordance
with its terms, subject to the qualification that such enforceability may be limited
by bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting rights of creditors and that equitable remedies, including
specific performance, are discretionary and may not be ordered. |
| | (e) | | No Violation. Neither the authorization, execution and delivery of
this Agreement by Moto nor the completion of the transactions contemplated by this
Agreement or the Arrangement, nor the performance of its obligations thereunder, nor
compliance by Moto with any of the provisions hereof will: |
| | (1) | | violate, conflict with, or result (with or without notice or
the passage of time) in a violation or breach of any provision of, or require,
other than the |
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| | | | Key Third Party Consents, any consent, approval or notice under,
or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) or result in a right of termination or except
as disclosed in Schedule 3.1(e) of the Disclosure Letter, acceleration of
indebtedness under, or result in the creation of any Lien upon, any of the
properties or assets of Moto or any of its material subsidiaries, or cause any
indebtedness to come due before its stated maturity or cause any credit
commitment to cease to be available or cause any payment or other obligation to
be imposed on Moto or any of its material subsidiaries, under any of the terms,
conditions or provisions of: |
| | (A) | | their respective articles, charters or by-laws
or other comparable organizational documents; or |
| | (B) | | any Permit or Material Contract to which Moto
or any of its subsidiaries is a party or to which any of them, or any
of their respective properties or assets, may be subject or by which
Moto or any of its subsidiaries is bound; or |
| | (2) | | subject to obtaining the Key Regulatory Approvals, |
| | (A) | | result (with or without notice or the passage
of time) in a violation or breach of or constitute a default under any
provisions of any Laws applicable to Moto or any of its subsidiaries or
any of their respective properties or assets; or |
| | (B) | | cause the suspension or revocation of any
Permit currently in effect in regard of Moto or any of its subsidiaries |
| | | | (except, in the case of each of clauses (1) and (2) above, for such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of Liens which, or any consents (expressly excluding the Key Third
Party Consents and Key Regulatory Approvals), approvals or notices which if
not given or received, would not, individually or in the aggregate,
reasonably be expected to have any Material Adverse Effect); or |
| | (3) | | give rise to any rights of first refusal or, except as
disclosed in Schedule 3.1(e) of the Disclosure Letter, trigger any change in
control provisions, rights of first offer or first refusal or any similar
provisions or any restrictions or limitation under any such note, bond,
mortgage, indenture, contract, license, franchise or Permit. |
| | | | The Key Third Party Consents listed in Schedule D are the only consents, approvals
and notices required from any third party under any Contracts of Moto or any of its
subsidiaries in order for Moto and its subsidiaries to proceed with the |
- 24 -
| | | | execution and delivery of this Agreement and the completion of the transactions contemplated
by this Agreement and the Arrangement pursuant to the Plan of Arrangement. |
| | (f) | | Capitalization. The authorized share capital of Moto consists of
an unlimited number of Moto Shares. As of the close of business on August 4, 2009,
there are issued and outstanding only 110,456,027 Moto Shares. As of the close of
business on August 4, 2009, an aggregate of up to 11,689,050 Moto Shares are issuable
upon the exercise of Moto Options. 500,000 Moto Shares are issuable pursuant to the
Moto Warrant and, except pursuant to the GICC Agreement and the OKIMO Assignment and
as disclosed in Schedule 3.1(f) of the Disclosure Letter, there are no other options,
warrants, conversion privileges or other rights, shareholder rights plans (other than
the Moto Shareholder Rights Plan), agreements, arrangements or commitments
(pre-emptive, contingent or otherwise) of any character whatsoever requiring or which
may require the issuance, sale or transfer by Moto of any securities of Moto
(including Moto Shares), or any securities or obligations convertible into, or
exchangeable or exercisable for, or otherwise evidencing a right or obligation to
acquire, any securities of Moto (including Moto Shares) or subsidiaries of Moto. All
outstanding Moto Shares have been duly authorized and validly issued, are fully paid
and non-assessable, and all Moto Shares issuable upon the exercise of Moto Options in
accordance with their respective terms have been duly authorized and, upon issuance,
will be validly issued as fully paid and non-assessable, and are not and will not be
subject to, or issued in violation of, any pre-emptive rights. All securities of
Moto (including the Moto Shares and the Moto Options) have been issued in compliance
with all applicable Laws and Securities Laws. Other than the Moto Options, there are
no securities of Moto or of any of its subsidiaries outstanding which have the right
to vote generally (or are convertible into or exchangeable for securities having the
right to vote generally) with the Moto Shareholders on any matter. Except as
disclosed in Schedule 3.1(f) of the Disclosure Letter, there are no outstanding
contractual or other obligations of Moto or any subsidiary to repurchase, redeem or
otherwise acquire any of its securities or with respect to the voting or disposition
of any outstanding securities of any of its subsidiaries, other than the Moto
Options. There are no outstanding bonds, debentures or other evidences of
indebtedness of Moto or any of its subsidiaries having the right to vote with the
holders of the outstanding Moto Shares on any matters. |
| | (g) | | Moto Shareholder Rights Plan. Moto has taken all corporate action
required for it to perform its obligations under Section 5.2(a) hereof. |
| | (h) | | Reporting Status and Securities Laws Matters. Moto is a “reporting
issuer” and not on the list of reporting issuers in default under applicable Canadian
provincial Securities Laws in each of the Provinces of British Columbia, Alberta,
Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, |
- 25 -
| | | | Xxxxxx Xxxxxx Island and Newfoundland and Labrador. No delisting, suspension of trading in or cease trading
order with respect to any securities of Moto and, to the knowledge of Moto, no
inquiry or investigation (formal or informal) of any Securities Authority or Exchange
is in effect or ongoing or, to the knowledge of Moto, expected to be implemented or
undertaken. |
| | (i) | | Ownership of Subsidiaries. Schedule 3.1(i) of the Disclosure
Letter includes complete and accurate lists of all subsidiaries owned, directly or
indirectly, by Moto, each of which is wholly-owned other than as disclosed in
Schedule 3.1(i) of the Disclosure Letter. All of the issued and outstanding shares
of capital stock and other ownership interests in the subsidiaries of Moto are duly
authorized, validly issued, fully paid and, where the concept exists, non-assessable,
and all such shares and other ownership interests held directly or indirectly by Moto
are legally and beneficially owned free and clear of all Liens, and there are no
outstanding options, warrants, rights, entitlements, understandings or commitments
(contingent or otherwise) regarding the right to purchase or acquire, or securities
convertible into or exchangeable for, any such shares of capital stock or other
ownership interests in or material assets or properties of any of the subsidiaries of
Moto, except as disclosed in Schedule 3.1(i) of the Disclosure Letter. There are no
contracts, commitments, agreements, understandings, arrangements or restrictions
which require any subsidiaries of Moto to issue, sell or deliver any shares in its
share capital or other ownership interests, or any securities or obligations
convertible into or exchangeable for, any shares of its share capital or other
ownership interests. Except as otherwise disclosed in Schedule 3.1(i) of the
Disclosure Letter there are no outstanding options, rights, entitlements,
understandings or commitments (contingent or otherwise) providing to any third party
the right to acquire any shares or other ownership interests in any subsidiaries of
Moto. Except as otherwise disclosed in Schedule 3.1(i) of the Disclosure Letter, all
ownership interests of Moto and its subsidiaries are owned free and clear of all
Liens of any kind or nature whatsoever held by third parties. |
| | (j) | | Public Filings. Moto has filed all documents required to be filed
by it in accordance with applicable Securities Laws with the Securities Authorities
or the Exchanges. All such documents and information comprising the Moto Public
Disclosure Record, as of their respective dates (and the dates of any amendments
thereto), (1) did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading, and (2) complied in all material respects with the requirements of
applicable Securities Laws, and any amendments to the Moto Public
Disclosure Record required to be made have been filed on a timely basis with the
Securities Authorities or the Exchanges. Moto has not filed any confidential
material change report with any Securities Authorities that at the date of this
Agreement remains confidential. |
- 26 -
| | (k) | | Moto Financial Statements. Moto’s audited financial statements as
at and for the fiscal years ended December 31, 2008, 2007 and 2006 (including the
notes thereto) and related management’s discussion and analysis (“MD&A”) and Moto’s
unaudited financial statements as at and for the three months ended March 31, 2009
(collectively, the “Moto Financial Statements”) were prepared in accordance with GAAP
consistently applied (except (A) as otherwise indicated in such financial statements
and the notes thereto or, in the case of audited statements, in the related report of
Moto’s independent auditors, or (B) in the case of unaudited interim statements, are
subject to normal period-end adjustments and may omit notes which are not required by
applicable Laws in the unaudited statements) and fairly present in all material
respects the consolidated financial position, results of operations and cash flows of
Moto and its subsidiaries as of the dates thereof and for the periods indicated
therein (subject, in the case of any unaudited interim financial statements, to
normal period-end adjustments) and reflect reserves required by GAAP in respect of
all material contingent liabilities, if any, of Moto and its subsidiaries on a
consolidated basis. There has been no material change in Moto’s accounting policies,
except as described in the notes to the Moto Financial Statements, since December 31,
2008. |
| | (l) | | Internal Controls and Financial Reporting. Moto (i) has designed
disclosure controls and procedures to provide reasonable assurance that material
information relating to Moto, including its consolidated subsidiaries, is made known
to the Chief Operating Officer and the Chief Financial Officer of Moto by others
within those entities, particularly during the periods in which filings are being
prepared; (ii) has designed internal controls to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with GAAP; and (iii) has disclosed in
its MD&A for its most recently completed financial year, for each material weakness
relating to design existing at the financial year end (a) a description of the
material weakness, (b) the impact of the material weakness on Moto’s financial
reporting and internal controls over financial reporting; and (c) Moto’s further
plans, if any, or any actions already undertaken, for remediating the material
weakness. |
| | (m) | | Books and Records. The financial books, records and accounts of
Moto and its material subsidiaries, have in all material respects, been maintained in
accordance with applicable Law, in accordance with GAAP and, in each case, are stated
in reasonable detail and accurately and fairly reflect the material
transactions and dispositions of the assets of Moto and its material subsidiaries
and accurately and fairly reflect the basis for Moto Financial Statements. |
| | (n) | | Minute Books. Except as disclosed in Schedule 3.1(n) of the
Disclosure Letter, the minute books of each of Moto and its material subsidiaries are
true and correct in all material respects; they contain the duly signed minutes of
all |
- 27 -
| | | | meetings of the boards of directors and shareholders and all resolutions passed
by the boards of directors and the shareholders thereof. |
| | (o) | | No Undisclosed Liabilities. Moto and its subsidiaries have no
outstanding indebtedness or liabilities and are not party to or bound by any
suretyship, guarantee, indemnification or assumption agreement, or endorsement of, or
any other similar commitment with respect to the obligations, liabilities or
indebtedness of any person, other than those specifically identified in the Moto
Financial Statements, or as disclosed in Schedule 3.1(o) of the Disclosure Letter, or
incurred in the ordinary course of business since the date of the most recent
financial statements of Moto filed on SEDAR. |
| | (p) | | No Material Change. Since December 31, 2008, except as disclosed
in the Moto Public Disclosure Record, there has been no material change in respect of
Moto and its subsidiaries taken as a whole, and the debt, business and material
property of Moto and its subsidiaries conform in all respects to the description
thereof contained in the Moto Public Disclosure Record; and there has been no
dividend or distribution of any kind declared, paid or made by Moto on any Moto
Shares. |
| | (q) | | Litigation. Except as disclosed in Schedule 3.1(q) of the
Disclosure Letter, there are no material claims, actions, suits, grievances,
complaints or proceedings pending or, to the knowledge of Moto, threatened affecting
Moto or any of its subsidiaries or affecting any of their respective property or
assets at law or in equity before or by any Governmental Entity, including matters
arising under Environmental Laws. Neither Moto nor any of its subsidiaries nor their
respective assets or properties is subject to any outstanding material judgment,
order, writ, injunction or decree. |
| | (r) | | Taxes. Except as disclosed in Schedule 3.1(r) of the Disclosure
Letter, Moto and each of its material subsidiaries has duly and timely filed all
Returns required to be filed by it prior to the date hereof, other than those which
have been administratively waived, and all such Returns are complete and correct in
all material respects: |
| | (i) | | Moto and each of its material subsidiaries has paid on a timely
basis all Taxes which are due and payable, all assessments and reassessments,
other than those which are being or have been contested in good faith and in
respect of which reserves have been provided in the most recently published
Moto Financial Statements. |
| | (ii) | | Except as provided for in the Moto Financial Statements, no
material deficiencies, litigation, proposed adjustments or matters in
controversy exist or have been asserted with respect to Taxes of Moto or any of
its material subsidiaries, and neither Moto nor any of its material
subsidiaries is a party to any action or proceeding for assessment or
collection of Taxes |
- 28 -
| | | | and no such event has been asserted or, to the knowledge of
Moto, threatened against Moto or any of its material subsidiaries or any of
their respective assets, that would reasonably be expected to have a Material
Adverse Effect. |
| | (iii) | | No claim has been made by any Governmental Entity in a
jurisdiction where Moto and any of its material subsidiaries does not file
Returns that Moto or any of its material subsidiaries is or may be subject to
Tax by that jurisdiction. |
| |
| | (iv) | | Other than as disclosed in Schedule 3.1(r)(iv) of the
Disclosure Letter, there are no Liens for unpaid Taxes (other than in respect
of Taxes not yet due and payable) upon any of the assets of Moto or any of its
material subsidiaries. |
| |
| | (v) | | Moto and each of its material subsidiaries has withheld or
collected all amounts required to be withheld or collected by it on account of
Taxes and has remitted all such amounts to the appropriate Governmental Entity
when required by Law to do so, except where the failure to do so would not,
individually or in the aggregate, result in a Material Adverse Effect. |
| |
| | (vi) | | There are no outstanding agreements extending or waiving the
statutory period of limitations applicable to any claim for, or the period for
the collection or assessment or reassessment of, Taxes due from Moto or any of
its material subsidiaries for any taxable period and no request for any such
waiver or extension is currently pending. |
| |
| | (vii) | | To the extent available, Moto will provide Randgold with true,
correct and complete copies of all the income and capital Tax returns,
examination reports and statements of deficiencies for taxable periods, or
transactions consummated, for which the applicable statutory periods of
limitations have not expired, in respect of Moto and each of its material
subsidiaries. |
| |
| | (viii) | | The Moto Shares are listed on a “recognised stock exchange” as defined by the
Tax Act. |
| | (i) | | Other than as disclosed in Section 3.1(s) of the Disclosure
Letter, Moto does not own or have an option or right to acquire any interests
in real or immoveable property, including licenses, leases, rights of way, surface
rights, easements, permits for the use of land or other real property. |
| | (ii) | | Except as disclosed in Schedule 3.1(s) of the Disclosure
Letter, the Concessions are the only mining concessions, claims, leases,
licenses, permits or other rights that are required to conduct the activities
of Moto |
- 29 -
| | | | or its subsidiaries as currently conducted in respect of the Moto Gold
Project. |
| | (iii) | | Except as disclosed in Schedule 3.1(s) of the Disclosure
Letter, and subject to the Joint Venture Agreement, each Concession is in good
standing. The interests of Moto or its material subsidiaries in each
Concession is held free and clear of all Liens, except as set out in Schedule
3.1(s) of the Disclosure Letter. The Disclosure Letter sets out an up to date,
true and accurate list in all material respects of (i) the interests of Moto
and its material subsidiaries in each of the Concessions; (ii) the agreement or
document pursuant to which Moto or its material subsidiaries holds its interest
in such Concessions; and (iii) Moto or its material subsidiaries are lawfully
authorized to hold its interest in the Concessions, as set out in the
Disclosure Letter. |
| | (iv) | | Except as disclosed in Schedule 3.1(s) of the Disclosure
Letter, and subject to the Joint Venture Agreement and applying customary
standards in the mining industry: |
| | (A) | | each Concession has been properly located and
recorded in compliance with applicable Laws and comprises a valid and
subsisting mineral claim in each case in all material respects; |
| |
| | (B) | | any and all assessment work required to be
performed and filed under the Concessions has been performed and filed; |
| |
| | (C) | | any and all Taxes and other payments required
to be paid in respect of the Concessions and all rental payments
required to be paid in respect of the Concessions have been paid; |
| |
| | (D) | | any and all filings required to be filed in
respect of the Concessions have been filed; |
| |
| | (E) | | Moto or its material subsidiaries have the
exclusive right to deal with the Concessions; |
| |
| | (F) | | no other Person has any material interest in
the Concessions or any right to acquire any such interest; |
| |
| | (G) | | there are no back-in rights, earn-in rights,
rights of first refusal, royalty rights or similar provisions which
would materially affect Moto’s or any of its material subsidiaries’
interests in the Concessions; and |
| |
| | (H) | | neither Moto nor any of its material
subsidiaries have received any notice, whether written or oral from any
Governmental Entity or |
- 30 -
| | | | any Person with jurisdiction or applicable authority of any
revocation or intention to revoke Moto’s or any of its material
subsidiaries’ interests in the Concessions. |
| | (v) | | Moto will provide Randgold with access to full and complete
copies of all exploration information and data within the possession or control
of Moto and its material subsidiaries, including, without limitation, all
geological, geophysical and geochemical information and data (including all
drill, sample and assay results and all maps) and all technical reports,
feasibility studies and other similar reports and studies concerning the
Concessions and Moto or its subsidiaries has the sole right, title, ownership
and right to use all such information, data reports and studies, all of which
information will be confidential information for the purposes of the
Confidentiality Agreement. |
| |
| | (vi) | | Except as disclosed in Schedule 3.1(s) of the Disclosure
Letter, all work and activities carried out on the Concessions by Moto or its
material subsidiaries or, to the knowledge of Moto, by any other person
appointed by Moto or any of its material subsidiaries have been carried out in
all material respects in compliance with all applicable Laws, and neither Moto
nor any of its material subsidiaries, nor, to the knowledge of Moto, any other
person, has received any notice of any material breach of any such applicable
Laws. |
| |
| | (vii) | | Moto and its material subsidiaries have made or will make
available to Randgold all material information in its possession or under its
control relating to the Concessions and the Moto Gold Project. |
| | (t) | | Contracts. Schedule 3.1(t) of the Disclosure Letter includes a
complete and accurate list of all Material Contracts to which Moto or any of its
material subsidiaries is a party and that are currently in force. All Material
Contracts are in full force and effect, and Moto or its material subsidiaries are
entitled to all rights and benefits thereunder in accordance with the terms thereof.
Moto will make available to Randgold for inspection true and complete copies of all
Material Contracts, and all such Material Contracts will be contained in the Data
Room Information or will be provided to Randgold pursuant to its due diligence
requests. All of the Material Contracts are valid and binding obligations of Moto or
a material subsidiary as the case may be, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency and other laws
affecting the enforcement of creditors’ rights generally and subject to the
qualification that equitable remedies may only be granted in the discretion of a
court of competent jurisdiction. Moto and its material subsidiaries have complied in
all material respects with all terms of such Material Contracts, have paid all
amounts due thereunder of, as and when due, have not waived any rights thereunder and
no material default or breach exists in respect thereof on the part of Moto or any of
its material subsidiaries or, to |
- 31 -
| | | | the knowledge of Moto, on the part of any other party thereto, and no event has
occurred which, after the giving of notice or the lapse of time or both, would
constitute such a default or breach or trigger a right of termination of any of
the Material Contracts. As at the date hereof, neither Moto nor any of its
material subsidiaries has received written notice that any party to a Material
Contract intends to cancel, terminate or otherwise modify or not renew such
Material Contract, and to the knowledge of Moto, no such action has been
threatened. Except as specifically noted in Schedule 3.1(t) of the Disclosure
Letter, neither Moto nor any of its material subsidiaries is a party to any
Material Contract that contains any non-competition obligation or otherwise
restricts in any material way the business of Moto or any of its material
subsidiaries. |
| |
| | (u) | | Permits. Except as disclosed in Schedule 3.1(u) of the Disclosure
Letter, Moto and each of its material subsidiaries has obtained and is in compliance
with all material Permits required by applicable Laws, necessary to conduct its
current business as now being conducted. To the knowledge of Moto, there are no
facts, events or circumstances that would reasonably be expected to result in a
failure to obtain or be in compliance with such material Permits as are necessary to
conduct its business as it is currently being conducted as set forth in the Moto
Public Disclosure Documents. |
| |
| | (v) | | Intellectual Property. There is no action, suit, proceeding or
claim pending or to the knowledge of Moto, threatened by others challenging Moto’s or
any of its material subsidiaries’ rights in or to any Intellectual Property which is
used for the conduct of Moto’s and its material subsidiaries’ business as currently
carried on as set forth in the Moto Public Disclosure Documents. |
| |
| | (w) | | HSR Act. As determined in accordance with the HSR Act and
regulations thereunder Moto and all entities controlled by Moto: (i) do not hold U.S.
assets located in the United States having an aggregate fair market value in excess
of US $65.2 million; and (ii) did not have aggregate sales in or into the United
States in excess of US $65.2 million in Moto’s most recent fiscal year. |
| |
| | (x) | | Environmental Matters. To the knowledge of Moto, each of Moto and
its material subsidiaries and their respective businesses and operations: |
| | (i) | | is in material compliance with all Environmental Laws and all
terms and conditions of all Environmental Permits; |
| |
| | (ii) | | has not received any order, request or notice from any person
alleging a material violation of any Environmental Law; |
| |
| | (iii) | | (i) is not a party to any litigation or administrative
proceeding, nor is any litigation or administrative proceeding threatened
against it or its property or assets, which in either case (1) asserts or
alleges that it violated any Environmental Laws, (2) asserts or alleges that it
is required to clean up, |
- 32 -
| | | | remove or take remedial or other response action due to the Release of any
Hazardous Substances, or (3) asserts or alleges that it is required to pay
all or a portion of the cost of any past, present or future cleanup, removal
or remedial or other response action which arises out of or is related to
the Release of any Hazardous Substances, and (ii) is not subject to any
judgment, decree, order or citation related to or arising out of applicable
Environmental Law and has not been named or listed as a potentially
responsible party by any Governmental Entity in a matter arising under any
Environmental Laws; and |
| |
| | (iv) | | except as disclosed in Schedule 3.1(x) of the Disclosure
Letter, is not involved in remediation operations and does not know of any
facts, circumstances or conditions, including any Release of Hazardous
Substance, that would reasonably be expected to result in any Environmental
Liabilities other than remediation operations contemplated by the Feasibility
Study. |
| | (y) | | Mineral Reserves and Resources. The estimated proven and probable
mineral reserves and estimated indicated, measured and inferred mineral resources
disclosed in the Moto Public Disclosure Record have been prepared and disclosed in
all material respects in accordance with all applicable Laws. The information
provided by Moto to the Qualified Persons (as defined in NI 43-101) in connection
with the preparation of such estimates was complete and accurate at the time such
information was furnished. Except as disclosed in Schedule 3.1(y) of the Disclosure
Letter, to the knowledge of Moto, no material mineral deposits of the Moto Gold
Project are subject to illegal occupation. There has been no material reduction in
the aggregate amount of estimated mineral reserves or estimated mineral resources of
Moto and its subsidiaries, taken as a whole, from the amounts disclosed in the Moto
Public Disclosure Record. |
| |
| | (z) | | Regulatory. |
| | (i) | | Moto and its material subsidiaries have operated and are
currently operating in material compliance with all applicable Laws, including
all applicable published rules, regulations, guidelines and policies of any
regulatory or governmental agency having jurisdiction over Moto or its material
subsidiaries or their respective activities (collectively, the “Regulatory
Authorities”); and |
| |
| | (ii) | | Moto and its material subsidiaries have operated and are
currently operating their respective businesses in compliance with all
licenses, permits, authorizations, approvals registrations and consents of the
Regulatory Authorities (the “Regulatory Authorizations”) in all material
respects and have made all requisite material declarations and filings with the
Regulatory Authorities. Moto and its material subsidiaries have not |
- 33 -
| | | | received any written notices or other correspondence from the Regulatory
Authorities regarding any circumstances that have existed or currently exist
which would lead to a loss, suspension, or modification of, or a refusal to
issue, any material Regulatory Authorization relating to its activities
which would reasonably be expected to restrict, curtail, limit or adversely
affect the ability of Moto or any of its material subsidiaries to operate
their respective businesses in a manner which would have a Material Adverse
effect on Moto. |
| | (i) | | Moto and each of its material subsidiaries has complied, in all
material respects, with the terms of all agreements, health, welfare,
supplemental unemployment benefit, bonus, incentive, profit sharing, deferred
compensation, stock purchase, stock compensation, stock option, disability,
pension or retirement plans and other employee compensation or benefit plans,
policies, arrangements, practices or undertakings, whether oral or written,
formal or informal, funded or unfunded, insured or uninsured which are
maintained by or binding upon Moto or such material subsidiary or in respect of
which Moto or any of its material subsidiaries has any actual or potential
liability (collectively, the “Moto Benefit Plans”) and with all applicable Laws
and collective bargaining agreements relating thereto. |
| |
| | (ii) | | Schedule 3.1(aa) of the Disclosure Letter sets forth a complete
list and description of the terms of the Moto Benefit Plans. |
| |
| | (iii) | | Each Moto Benefit Plan is and has been established, registered
(if required), qualified, invested and administered, in all material respects,
in compliance with the terms of such Moto Benefit Plan (including the terms of
any documents in respect of such Moto Benefit Plan), all applicable Laws and
any collective bargaining agreement relating thereto. |
| |
| | (iv) | | All obligations of Moto or any of its material subsidiaries
regarding the Moto Benefit Plans have been satisfied in all material respects
and no Taxes are owing or exigible under any of the Moto Benefit Plans by Moto
or any of its material subsidiaries except as specifically noted in Schedule
3.1(aa) of the Disclosure Letter. All employer and employee payments,
contributions and premiums required to be remitted, paid to or in respect of
each Moto Benefit Plan have been paid or remitted in a timely fashion in
accordance with its terms and all applicable Laws except as specifically noted
in Schedule 3.1(aa) of the Disclosure Letter. |
| |
| | (v) | | Each Moto Benefit Plan is insured or funded in compliance with
the terms of such Moto Benefit Plan, all applicable Laws and any collective
bargaining agreement relating thereto and is in good standing with such |
- 34 -
| | | | Governmental Entities as may be applicable and, as of the date hereof, no
currently outstanding notice of under-funding, non-compliance, failure to be
in good standing or otherwise has been received by Moto or any of its
material subsidiaries from any such Governmental Entities. |
| |
| | (vi) | | To the knowledge of Moto, (i) no Moto Benefit Plan is subject
to any pending investigation, examination or other proceeding, action or claim
initiated by any Governmental Entity, or by any other party (other than routine
claims for benefits), and (ii) there exists no state of facts which after
notice or lapse of time or both would reasonably be expected to give rise to
any such investigation, examination or other proceeding, action or claim or to
affect the registration or qualification of any Moto Benefit Plan required to
be registered or qualified. |
| |
| | (vii) | | Except as disclosed in Schedule 3.1(aa) of the Disclosure
Letter, Moto and its material subsidiaries have no formal plan and have made no
promise or commitment, whether legally binding or not, to create any additional
Moto Benefit Plan or to improve or change the benefits provided under any Moto
Benefit Plan. |
| |
| | (viii) | | There is no entity other than Moto and any of its material subsidiaries
participating in any Moto Benefit Plan. |
| |
| | (ix) | | Except as disclosed in Schedule 3.1(aa) of the Disclosure
Letter, none of the Moto Benefit Plans provide benefits beyond retirement or
other termination of service to employees or former employees or to the
beneficiaries or dependants of such employees and where there are such Moto
Benefit Plans disclosed in Schedule 3.1(aa), each such Moto Benefit Plan may be
amended or terminated at any time without incurring any liability thereunder
other than in respect of claims incurred prior to such amendment or
termination. |
| |
| | (x) | | Except as disclosed in Schedule 3.1 (aa) or Section 5.5 of the
Disclosure Letter, neither the execution and delivery of this Agreement by Moto
nor completion of the Arrangement pursuant to the Plan of Arrangement nor
compliance by Moto with any of the provisions hereof shall, subject to Section
5.5, result in any payment (including severance, unemployment compensation,
bonuses or otherwise) becoming due to any director or employee of Moto or any
of its subsidiaries or result in any increase or acceleration of contributions,
liabilities or benefits or acceleration of vesting, under any Moto Benefit Plan
or restriction held in connection with a Moto Benefit Plan. |
| |
| | (xi) | | All data necessary to administer each Moto Benefit Plan is in
the possession of Moto or one of its material subsidiaries or their respective
agents and is in a form which is sufficient for the proper administration of |
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| | | | the Moto Benefit Plan in accordance with its terms and all applicable Laws
and such data is complete and correct. |
| | (bb) | | Labour and Employment. |
| | (i) | | Schedule 3.1(bb)(i) of the Disclosure Letter sets forth a
complete list of all expatriate and Perth-based employees of Moto and its
material subsidiaries, together with their titles, service dates and material
terms of employment, including current wages, salaries or hourly rate of pay,
and bonus (whether monetary or otherwise). Except as disclosed in Schedule
3.1(bb)(i) of the Disclosure Letter, no such employee is on long-term
disability leave, extended absence or worker’s compensation leave. As at
August 4, 2009, none of the material employees of Moto or its material
subsidiaries has indicated an intention to resign their employment. All
current assessments under applicable workers compensation legislation in
relation to the employees listed in Schedule 3.1(bb)(i) of the Disclosure
Letter have been paid or accrued by Moto and its material subsidiaries, as
applicable, and Moto and its material subsidiaries are not subject to any
special or penalty assessment under such legislation which has not been paid. |
| |
| | (ii) | | Except for those written employment contracts with salaried
employees of Moto and any of its material subsidiaries identified in Schedule
3.1(bb)(ii) of the Disclosure Letter, there are no written contracts of
employment entered into with any such employees or any oral contracts of
employment. Except for those agreements or provisions described in Schedule
5.5 of the Disclosure Letter, no employee of Moto or any of its material
subsidiaries is party to a change of control, severance, termination, golden
parachute or similar agreement or provision or would receive payments under
such agreement or provision as a result of the Arrangement. |
| |
| | (iii) | | Moto will provide to Randgold a complete list of the
collective agreements, either directly or by operation of law, between Moto or
any of its material subsidiaries with any trade union or association which may
qualify as a trade union (collectively the “Collective Agreements”). Other
than as disclosed in Schedule 3.1(bb)(iii) of the Disclosure Letter, there are
no outstanding or, to the knowledge of Moto, threatened labour tribunal
proceedings of any kind, including unfair labour practice proceedings or any
proceedings which could result in certification of a trade union as bargaining
agent for any employees of Moto or any of its material subsidiaries not already
covered by a collective agreement. Other than as disclosed in Schedule
3.1(bb)(iii) of the Disclosure Letter there are no threatened or apparent union
organizing activities involving employees of Moto or any of its material
subsidiaries nor is Moto or any of its material subsidiaries currently
negotiating any of the Collective |
- 36 -
| | | | Agreements. To the knowledge of Moto, there is no default or violation
under any of the Collective Agreements. There is no strike or lockout
involving the employees covered by the collective agreements listed in
Schedule 3.1(bb)(iii) of the Disclosure Letter. |
| | (cc) | | Compliance with Laws. Moto and its material subsidiaries have
complied with and are not in violation of any applicable Laws, other than
non-compliance or violations which would not, individually or in the aggregate, have
a Material Adverse Effect. |
| |
| | (dd) | | Absence of Cease Trade Orders. No order ceasing or suspending
trading in the Moto Shares (or any of them) or any other securities of Moto is
outstanding and no proceedings for this purpose have been instituted or, to the
knowledge of Moto, are pending, contemplated or threatened. |
| |
| | (ee) | | Related Party Transactions. Except as contemplated hereby or as
disclosed in Schedule 3.1(ee) of the Disclosure Letter, there are no Contracts or
other transactions currently in place between Moto or any of its material
subsidiaries, on the one hand, and: (i) to the knowledge of Moto, any officer or
director of Moto or any of its material subsidiaries; (ii) to the knowledge of Moto,
any holder of record or, to the knowledge of Moto, beneficial owner of 10% or more of
the Moto Shares; and (iii) to the knowledge of Moto, any affiliate or associate of
any such, officer, director, holder of record or beneficial owner, on the other hand. |
| |
| | (ff) | | Expropriation. No part of the property or assets of Moto or any of
its material subsidiaries has been taken, condemned or expropriated by any
Governmental Entity nor has any written notice or proceeding in respect thereof been
given or commenced nor does Moto or any of its material subsidiaries know of any
intent or proposal to give such notice or commence any such proceedings. |
| |
| | (gg) | | Registration Rights. No Moto Shareholder has any right to compel
Moto to register or otherwise qualify the Moto Shares (or any of them) for public
sale or distribution. |
| |
| | (hh) | | Rights of Other Persons. Other than as disclosed in Schedule
3.1(hh) of the Disclosure Letter, no person has any right of first refusal or option
to purchase or any other right of participation in any of the material properties or
assets owned by Moto or any of its material subsidiaries, or any part thereof. |
| |
| | (ii) | | Restrictions on Business Activities. There is no arbitral award,
judgment, injunction, constitutional ruling, order or decree binding upon Moto or any
of its material subsidiaries that has or could reasonably be expected to have the
effect of prohibiting, restricting, or impairing any business practice of any of
them, any acquisition or disposition of property by any of them, or the conduct of
the |
- 37 -
| | | | business by any of them as currently conducted, which could reasonably be expected
to have a Material Adverse Effect on Moto. |
| |
| | (jj) | | Brokers. Except as disclosed by Moto to Randgold, no broker,
investment banker, financial advisor or other person is entitled to any broker’s,
finder’s, financial advisor’s or other similar fee or commission in connection with
the transactions contemplated hereby based upon arrangements made by or on behalf of
Moto, and the aggregate amount of such fees that may become payable in respect of all
such arrangements is set out in Schedule 3.1(jj) to the Disclosure Letter. |
| |
| | (kk) | | Insurance. As of the date hereof, Moto and its material
subsidiaries have such policies of insurance as are listed in Schedule 3.1(kk) of the
Disclosure Letter. All insurance maintained by Moto or any of its material
subsidiaries is in full force and effect and in good standing and neither Moto nor
any of its subsidiaries is in default, whether as to payment of premium or otherwise,
under the terms of any such insurance nor has Moto or any of its material
subsidiaries failed to give any notice or present any material claim under any such
insurance in a due and timely fashion or received notice or otherwise become aware of
any intent of an insurer to either claim any default on the part of Moto or any of
its material subsidiaries or not to renew any policy of insurance on its expiry or to
increase any deductible or cost, except where such failure or default or other event
would not reasonably be expected to have a Material Adverse Effect. |
| |
| | (ll) | | Data Room Information. All Data Room Information is accurate in
all material respects as at its respective date as stated therein, or, if any Data
Room Information is undated, as of the date of its delivery to the Data Site for
purposes of the transactions contemplated by this Agreement. Additionally, all
information provided to Randgold in relation to Randgold’s due diligence requests,
including information not provided in the Data Room Information, will be accurate in
all material respects as at its respective date as stated therein. To the extent
that there is a material change to any of the Data Room Information or any other
information provided to Randgold since the date posted to the Data Site or provided
to Randgold, as the case may be, such information will be accurate in all material
respects or is no longer relevant or material to Moto or additional information has
been provided to the Data Site or to Randgold which supercedes or replaces such
information. |
| |
| | (mm) | | United States Securities Laws. |
| | (i) | | Moto is a “foreign private issuer” as defined in Rule 3b-4
under the U.S. Exchange Act; |
| |
| | (ii) | | no securities of Moto are registered or required to be
registered under Section 12 of the U.S. Exchange Act, and Moto is not required
to file reports under Section 13 or Section 15(d) of the U.S. Exchange Act; and |
- 38 -
| | (iii) | | Moto is not an “investment company” as defined in the United
States Investment Company Act of 1940, as amended. |
| | (nn) | | Report Regarding Operations. Moto engaged each of “Risk
Opportunity” and its successor “Arden Consulting” (together the “Authors”) to prepare
a report relating to the viability of conducting exploration and mining activities at
the Moto Gold Project in light of the security and political risks associated with
the conduct of such activities in that area of the DRC (together the “Security
Reports”). Moto represents and warrants as follows with respect to the Security
Reports: |
| | (i) | | Moto has provided or will provide a complete copy of the
Security Reports to Randgold, including copies of any and all correspondence
(written or verbal) relating to the Security Reports between Moto and the
Authors; |
| |
| | (ii) | | The conclusions expressed in the Security Reports are
reasonable; |
| |
| | (iii) | | Moto is not aware of any facts or information which would make
the conclusions or analysis set forth in the Security Reports incorrect,
incomplete or misleading in any respect; and |
| |
| | (iv) | | The consultants who prepared the Security Reports were provided
with all information in the possession or within the control of Moto that was
requested by such consultants or which would be relevant to a full and accurate
assessment of the matters dealt with in the Security Reports. |
| | (oo) | | Viability of Mining Operations. As of the date of this Agreement,
Moto has no information that would cause it to conclude, acting reasonably, that the
development of the Moto Gold Project in accordance with the Feasibility Study is not
possible given existing security or political factors. |
| |
| | (pp) | | Change of Control. The completion of the Arrangement will
constitute a “Change of Control” within the meaning of the OKIMO Assignment and the
GICC Agreement. |
| |
| | (qq) | | Competition Act. As determined in accordance with the Competition
Act and regulations thereunder, Moto and all entities controlled by Moto: (i) does
not have assets in Canada having an aggregate book value exceeding $70 million; and
(ii) does not have gross revenues from sales in or from Canada generated by its
assets in Canada that exceed $70 million, based on the audited financial statements
for Moto’s most recently completed fiscal year. |
| |
| | (rr) | | Sanctions and Similar Laws. Neither Moto nor its subsidiaries nor,
to the knowledge of Moto, any of its officers, directors, employees or agents (nor
any person acting on behalf of the foregoing) directly or indirectly has given, |
- 39 -
| | | | offered or agreed to give or offer a loan, reward, advantage or benefit of any
kind to any (1) person who holds a legislative, administrative or judicial
position of a foreign state, (2) person who performs public duties or functions
for a foreign state, including a person employed by a board, commission,
corporation or other body or authority that is established to perform a duty of
function on behalf of the foreign state, or is performing such duty or function,
or (3) agent of a public international organization that is formed by two or more
states or governments, or by two or more such public international organizations,
as consideration for an act or omission by the official in connection with the
performance of the official’s duties or functions, or to induce the official to
use his or her position to influence any acts or decisions of the foreign state or
public international organization for which the official performs duties or
functions, except as permitted by the Corruption of Foreign Public Officials Act
(Canada). |
3.2 Survival of Representations and Warranties
The representations and warranties of Moto contained in this Agreement shall not survive the
completion of the Arrangement and shall expire and be terminated on the earlier of the Effective
Time and the date on which this Agreement is terminated in accordance with its terms.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF RANDGOLD
4.1 Representations and Warranties
Randgold hereby represents and warrants to and in favour of Moto as follows, and acknowledges
that Moto is relying upon such representations and warranties in connection with the entering into
of this Agreement:
| | (a) | | Authority Relative to this Agreement. Randgold has the requisite
corporate power and capacity to enter into this Agreement and to perform its
obligations hereunder. The execution and delivery of this Agreement by Randgold and
the performance of its obligations thereunder have been duly authorized by its board
of directors and no other corporate proceedings on its part are necessary to
authorize this Agreement or the Arrangement. This Agreement has been duly executed
and delivered by Randgold and constitutes a legal, valid and binding obligation of
Randgold enforceable against it in accordance with its terms, subject to the
qualification that such enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws of general application relating to or affecting rights
of creditors and that equitable remedies, including specific performance, are
discretionary and may not be ordered. |
| |
| | (b) | | Organization and Qualification. Randgold and each of its
subsidiaries is a corporation duly incorporated or an entity duly created and validly
existing |
- 40 -
| | | | under all the applicable Laws of its jurisdiction of incorporation, continuance or
creation and has all necessary corporate or other power and capacity to own its
property and assets as now owned and to carry on its business as it is now being
conducted. Randgold and each of its subsidiaries (a) has all Permits necessary to
conduct its business substantially as now conducted, and (b) is duly registered or
otherwise authorized and qualified to do business and each is in good standing in
each jurisdiction in which the character of its properties, owned, leased,
licensed or otherwise held, or the nature of its activities makes such
qualification necessary, except where the failure to be so registered or in good
standing or to have such Permits would not reasonably be expected to have a
Material Adverse Effect on Randgold. |
| |
| | (c) | | No Material Change. Since December 31, 2008 except as disclosed in
the Randgold Public Disclosure Record, there has been no material change in respect
of Randgold and its subsidiaries, taken as a whole, and the debt, business and
material property of Randgold and its subsidiaries conform in all material respects
to the description thereof contained in the Randgold Public Disclosure Record; and
there has been no dividend or distribution of any kind declared, paid or made by
Randgold on any Randgold Shares. |
| |
| | (d) | | No Violations. Neither the execution and delivery of this
Agreement by Randgold nor the completion of the transactions contemplated by the
Agreement or the Arrangement nor the performance of its obligations thereunder nor
compliance by Randgold with any of the provisions thereof will violate, conflict
with, or result in a breach of any material provision of, require any consent,
approval or notice under, or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under: (A) the articles of
incorporation or other constating documents of Randgold or any of its subsidiaries;
or (B) any material contract or other instrument or obligation to which Randgold or
any of its subsidiaries is a party or to which it, or any of its properties or
assets, may be subject or by which Randgold or any of its subsidiaries is bound and,
in each case, individually or in the aggregate would materially adversely affect
Randgold’s ability to perform its obligations under this Agreement; or (C) violate,
breach or constitute a default under any Law applicable to Randgold or any of its
subsidiaries or any of its properties or assets. |
| |
| | (e) | | Capitalization. The authorized share capital of Randgold consists
of 100,000,000 Randgold Shares. As of the close of business on August 4, 2009,
82,532,302 Randgold Shares were issued and outstanding and an aggregate of up to
2,393,770 Randgold Shares were issuable upon the exercise of Randgold Options and
other than restricted Randgold Shares issuable under Randgold’s Restricted Share
Scheme, there are no options, warrants, conversion privileges or other rights,
shareholder rights plans, agreements, arrangements or commitments (pre-emptive,
contingent or otherwise) of any character |
- 41 -
| | | | whatsoever requiring or which may require the issuance, sale or transfer by
Randgold of any securities of Randgold (including Randgold Shares), or any
securities or obligations convertible into, or exchangeable or exercisable for, or
otherwise evidencing a right or obligation to acquire, any securities of Randgold
(including Randgold Shares) or subsidiaries of Randgold. Other than Randgold
Options and Randgold Shares, there are no securities of Randgold or of any of its
subsidiaries outstanding which have the right to vote generally (or are
convertible into or exchangeable for securities having the right to vote
generally) with the Randgold Shareholders on any matter. There are no outstanding
contractual or other obligations of Randgold or any subsidiary to repurchase,
redeem or otherwise acquire any of its securities or with respect to the voting or
disposition of any outstanding securities of any of its subsidiaries, other than
the Randgold Options and restricted Randgold Shares issuable under Randgold’s
Restricted Share Scheme. There are no outstanding bonds, debentures or other
evidences of indebtedness of Randgold or any in its subsidiaries having the right
to vote with the holders of the outstanding Randgold Shares on any matters. |
| |
| | (f) | | Reporting Status and Securities Laws Matters. Randgold Shares and
Randgold ADSs are registered under the U.S. Exchange Act. No delisting, suspension
of trading in or cease trading order with respect to any securities of Randgold and,
to the knowledge of Randgold, no inquiry or investigation (formal or informal) of the
SEC, the NASDAQ or the London Stock Exchange, is in effect or ongoing or, to the
knowledge of Randgold, expected to be implemented or undertaken. |
| |
| | (g) | | Public Filings. Randgold has filed all documents in the Randgold
Public Disclosure Record required to be filed by it in accordance with applicable
U.S. federal securities laws. All such documents and information comprising the
Randgold Public Disclosure Record, as of their respective filing dates (and the dates
of any amendments thereto), (1) did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were made,
not misleading, and (2) complied in all material respects with the requirements of
applicable U.S. federal securities laws, and any amendments to the Randgold Public
Disclosure Record required to be made have been filed on a timely basis with the SEC. |
| |
| | (h) | | Randgold Financial Statements. Randgold’s audited financial
statements as at and for the fiscal years ended December 31, 2008, 2007 and 2006
(including the notes thereto and related Operating and Financial Review and Prospects
section of Randgold’s annual report on Form 20-F for the year ended December 31, 2008
) and Randgold’s unaudited financial statements as at and for the three months ended
March 31, 2009 (collectively, the “Randgold Financial Statements”) were prepared in
accordance with IFRS consistently applied |
- 42 -
| | | | (except as otherwise indicated in such financial statements and the notes thereto
or in the related report of Randgold’s independent auditors) and fairly present in
all material respects the consolidated financial position, results of operations
and changes in financial position of its subsidiaries as of the dates thereof and
for the periods indicated therein and reflect reserves required by IFRS in respect
of all material contingent liabilities, if any, of Randgold and its subsidiaries
on a consolidated basis. There has been no material change in Randgold’s
accounting policies, except as described in the notes to the Randgold Financial
Statements, since December 31, 2008. |
| |
| | (i) | | No Undisclosed Liabilities. Randgold and its subsidiaries have no
outstanding indebtedness or liabilities and are not party to or bound by any
suretyship, guarantee, indemnification or assumption agreement, or endorsement of, or
any other similar commitment with respect to the obligations, liabilities or
indebtedness of any person, other than those specifically identified in the Randgold
Financial Statements or incurred in the ordinary course of business since the date of
the most recent financial statements of Randgold filed on the SEC’s XXXXX database. |
| |
| | (j) | | Litigation. There are no material claims, actions, suits,
grievances, complaints or proceedings pending or, to the knowledge of Randgold,
threatened affecting Randgold or any of its subsidiaries or affecting any of their
respective property or assets at law or in equity before or by any Governmental
Entity, including matters arising under Environmental Laws. Neither Randgold nor any
of its subsidiaries nor their respective assets or properties is subject to any
outstanding material judgment, order, writ, injunction or decree. |
| |
| | (k) | | Reserve Information. The reserve information contained in
Randgold’s annual report on Form 20-F for the year ended December 31, 2008 is in
accordance with the SEC’s Industry Guide 7. None of the mineral deposits that are
material to Randgold and its subsidiaries taken as a whole are, to the knowledge of
Randgold, subject to illegal occupation. There has been no material reduction in the
aggregate amount of estimated mineral reserves of Randgold and its subsidiaries,
taken as a whole, from the amounts disclosed in Randgold’s Public Disclosure Record,
subject to depletion in the ordinary course of business. |
| |
| | (l) | | Issuance of Randgold Shares and Randgold ADSs. The Randgold Shares
to be issued as part of the Randgold Share Consideration, and the Randgold Shares
represented by the Randgold ADS Consideration, will, when issued pursuant to the
Arrangement, be duly and validly issued as fully paid and non-assessable ordinary
shares in the capital of Randgold. |
| |
| | (m) | | Absence of Cease Trade Orders. No order ceasing or suspending
trading in Randgold Shares or Randgold ADSs (or any of them) or any other securities
of Randgold is outstanding and no proceedings for this purpose have been |
- 43 -
| | | | instituted or, to the knowledge of Randgold, are pending, contemplated or
threatened. |
| |
| | (n) | | Investment Canada. Subco will be, a “WTO Investor” for purposes of
the Investment Canada Act, as that term is defined in the Investment Canada Act and
the regulations thereunder. |
| |
| | (o) | | Compliance with Laws. Randgold and its subsidiaries have complied
with and are not in violation of any applicable Laws, other than non-compliance or
violations which would not, individually or in the aggregate, have a material adverse
effect on the business, prospects, results of operations or financial condition of
Randgold and its subsidiaries, taken as a whole. |
| |
| | (p) | | Due Diligence Material. All information provided to Moto in
relation to Moto’s due diligence requests will be accurate in all material respects
as at its respective date as stated therein. To the extent that there is a material
change to any of the information provided to Moto since the date provided to Moto,
such information will be accurate in all material respects or is no longer relevant
or material to Moto or additional information has been provided to Moto which
supercedes or replaces such information. |
| |
| | (q) | | United States Securities Laws. |
| | (i) | | Randgold is a “foreign private issuer” as defined in Rule 3b-4
under the U.S. Exchange Act; and |
| |
| | (ii) | | Randgold is not an “investment company” as defined in the
United States Investment Company Act of 1940, as amended. |
4.2 Survival of Representations and Warranties
The representations and warranties of Randgold contained in this Agreement shall not survive
the completion of the Arrangement and shall expire and be terminated on the earlier of the
Effective Time and the date on which this Agreement is terminated in accordance with its terms.
ARTICLE 5
COVENANTS OF MOTO AND RANDGOLD
5.1 Covenants of Moto Regarding the Conduct of Business
Moto covenants and agrees that, during the period from the date of this Agreement until the
earlier of the Effective Time and the time that this Agreement is terminated in accordance with its
terms, except as required or permitted by this Agreement, applicable Laws or any Governmental
Entities or consented to by Randgold in writing, Moto shall, and shall cause each of its
subsidiaries to, conduct its business in the ordinary course of business
- 44 -
consistent with past practice. Without limiting the generality of the foregoing, from the
date of this Agreement until the earlier of the Effective Time and the time that this Agreement is
terminated in accordance with its terms, except as required or permitted by this Agreement, Moto
shall not, nor shall it permit any of its subsidiaries to, directly or indirectly, without the
prior written consent of Randgold (which consent shall not be unreasonably withheld or delayed):
| | (a) | | take any action except in the ordinary course of business of Moto and its
material subsidiaries, it being acknowledged and agreed that, for the purposes of
this Article 5.1, the performance by Moto and its subsidiaries of their respective
obligations under the Joint Venture Agreement, the Tripartite Agreement and the ATF,
and the entering into by Moto, and the performance by Moto of those obligations
under, the July 2009 Protocol are within the ordinary course of business of Moto and
its subsidiaries and Moto shall use commercially reasonable efforts to maintain and
preserve its and its material subsidiaries’ business organization, assets, employees,
goodwill and business relationships; |
| |
| | (b) | | (i) amend its articles, charter or by-laws or other comparable
organizational documents; (ii) split, combine or reclassify any shares in the capital
of Moto or any of its subsidiaries, or declare, set aside or pay any dividend or
other distribution or payment (whether in cash, securities or property or any
combination thereof) in respect of the Moto Shares owned by any person or the
securities of any subsidiary owned by a person other than Moto other than, in the
case of any subsidiary wholly-owned by Moto, any dividends payable to Moto or any
other wholly-owned subsidiary of Moto; (iii) issue, grant, deliver, sell or pledge,
or agree to issue, grant, deliver, sell or pledge, any shares of Moto or its
subsidiaries, or any rights convertible into or exchangeable or exercisable for, or
otherwise evidencing a right to acquire, shares or other securities of Moto or its
subsidiaries, other than: (A) the issuance of Moto Shares pursuant to the terms of
the outstanding Moto Options and the Moto Warrant; (B) the issue of Moto Shares in
accordance with the OKIMO Assignment if Moto elects to satisfy up to 50% of any
amount due and not paid thereunder as of the date of this Agreement by the issue of
Moto Shares; the number of Moto Shares to be issued in that regard to be calculated
in accordance with the provisions of Section 4.2 of the OKIMO Assignment; (C) the
issue of Moto Shares under the GICC Agreement in full discharge of Moto’s obligation
to issue shares pursuant to that agreement; (D) transactions in the ordinary course
of business and consistent with past practices between two or more Moto wholly-owned
subsidiaries or between Moto and a Moto wholly-owned subsidiary, and (E) as required
under applicable Law or existing Material Contracts set forth in Schedule 3.1(t) of
the Disclosure Letter; (iv) redeem, purchase or otherwise acquire, or offer to
redeem, purchase or otherwise acquire, any outstanding securities of Moto or any of
its subsidiaries, (v) amend the terms of any of its securities; (vi) adopt a plan of
liquidation or resolution providing for the liquidation or dissolution of Moto or any
of its subsidiaries; (vii) amend its accounting policies or adopt new accounting
policies, in each |
- 45 -
| | | | case except as required in accordance with GAAP; or (viii) enter into any
agreement with respect to any of the foregoing; |
| |
| | (c) | | except in the ordinary course of business consistent with past practice and
except as set forth in Schedule 5.1(c) of the Disclosure Letter, (i) sell, pledge,
hypothecate, lease, license, sell and lease back, mortgage, dispose of or encumber or
otherwise transfer, any assets, securities, properties, interests or businesses of
Moto or any of its subsidiaries; (ii) acquire (by merger, amalgamation, consolidation
or acquisition of shares or assets or otherwise), directly or indirectly, any assets,
securities, properties, interests, businesses, corporation, partnership or other
business organization or division thereof, or make any investment either by the
purchase of securities, contribution of capital, property transfer, or purchase of
any other property or assets of any other person, for an amount greater than
$200,000; (iii) incur, create, assume or otherwise become liable for, any
indebtedness for borrowed money or any other liability or obligation or issue any
debt securities or assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other person, or make any loans, capital
contributions, investments or advances; (iv) pay, discharge or satisfy any material
liabilities or obligations other than: (A) the payment of any amounts that become due
and payable under the OKIMO Assignment prior to the Effective Date in accordance with
the terms of the OKIMO Assignment (other than by an acceleration of the obligations
thereunder due to a breach thereof by Moto); (B) the incurrence of obligations in
respect of the construction of the hydro electric infrastructure described in the
Feasibility Study or ATF, subject to prior consultation with Randgold; (C) payment of
the Red Back Termination Fee pursuant to the Red Back Agreement; and (D) payment of
those amounts payable or that may become payable prior to the Effective Date pursuant
to the July 2009 Protocol; (v) waive, release, grant or transfer any rights of
material value; or (vi) authorize or propose any of the foregoing, or enter into any
agreement to do any of the foregoing; |
| |
| | (d) | | other than as is necessary to comply with applicable Laws or Contracts, or
in accordance with the Moto Benefit Plans: (i) grant to any officer, employee or
director of Moto or any of its subsidiaries an increase in compensation in any form,
or grant any general salary increase; (ii) make any loan to any officer, employee, or
director of Moto or any of its subsidiaries; (iii) take any action with respect to
the grant of any severance, change of control, bonus or termination pay to, or enter
into any employment agreement, deferred compensation or other similar agreement (or
amend any such existing agreement) with, or hire or terminate employment (except for
just cause) of, any officer, employee or director of Moto or any of its subsidiaries,
provided, however, that bonuses in an aggregate amount of not more than $800,000 may
be awarded to the senior officers, senior managers and non-executive directors of
Moto; (iv) increase any benefits payable under any existing severance or |
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| | | | termination pay policies or employment agreements, or adopt or materially amend or
make any contribution to any Moto Benefit Plan or other bonus, profit sharing,
option, pension, retirement, deferred compensation, insurance, incentive
compensation, compensation or other similar plan, agreement, trust, fund or
arrangement for the benefit of directors, officers or employees or former
directors, officers, employees of Moto or any of its subsidiaries; (v) increase
bonus levels or other benefits payable to any director, executive officer or
employee of Moto or any of its subsidiaries; (vi) provide for accelerated vesting,
removal of restrictions or an exercise of any stock based or stock related awards
(including stock options, stock appreciation rights, deferred share units,
performance units and restricted share awards) upon a change of control (other
than in connection with the Arrangement) occurring on or prior to the Effective
Time; or (vii) establish, adopt or amend (except as required by applicable Law)
any collective bargaining agreement or similar agreement; |
| |
| | (e) | | settle, pay, discharge, satisfy, compromise, waive, assign or release (i)
any material action, claim or proceeding brought against Moto and/or any of its
subsidiaries; or (ii) any action, claim or proceeding brought by any present, former
or purported holder of its securities in connection with the transactions
contemplated by this Agreement or the Plan of Arrangement; |
| |
| | (f) | | enter into any agreement or arrangement that limits or otherwise restricts
in any material respect Moto or any of its subsidiaries or any successor thereto, or
that would, after the Effective Time, limit or restrict in any material respect Moto
or any of its subsidiaries from competing in any manner; |
| |
| | (g) | | waive, release or assign any material rights, claims or benefits of Moto or
any of its subsidiaries; |
| |
| | (h) | | other than in the ordinary course of business consistent with past
practice, (i) enter into any agreement that if entered into prior to the date hereof
would be a Material Contract other than agreements contemplated by the ATF and the
July 2009 Protocol (if not entered into prior to the date hereof); (ii) modify, amend
in any material respect, transfer or terminate any Material Contract, or waive,
release or assign any material rights or claims thereto or thereunder; |
| |
| | (i) | | change any method of Tax accounting, make or change any Tax election, file
any materially amended Return, settle or compromise any Tax liability, agree to an
extension or waiver of the limitation period with respect to the assessment,
reassessment or determination of Taxes, enter into any closing agreement with respect
to any Tax or surrender any right to claim a material Tax refund; |
| |
| | (j) | | take any action or fail to take any action which action or failure to act
would result in the material loss, expiration or surrender of, or the loss of any
material benefit under, or reasonably be expected to cause any Governmental Entity to
institute proceedings for the suspension, revocation or limitation of rights under, |
- 47 -
| | | | any material Permits or any Approvals listed in Schedule 5.1(j) of the Disclosure
Letter of or from any Governmental Entity necessary to conduct its businesses as
now conducted or as proposed to be conducted; or fail to prosecute with
commercially reasonable due diligence any pending applications to any Governmental
Entities for Approvals; |
| |
| | (k) | | take any action or fail to take any action that is intended to, or would
reasonably be expected to, individually or in the aggregate, prevent, materially
delay or materially impede the ability of Moto to consummate the Arrangement or the
other transactions contemplated by this Agreement other than in connection with a
Pre-Acquisition Reorganization; or |
| |
| | (l) | | agree, resolve or commit to do any of the foregoing. |
Moto shall use its commercially reasonable efforts to cause the current insurance (or
re-insurance) policies maintained by Moto or any of its subsidiaries, including directors’ and
officers’ insurance, not to be cancelled or terminated or any of the coverage thereunder to lapse,
unless simultaneously with such termination, cancellation or lapse, replacement policies
underwritten by insurance or re-insurance companies of nationally recognized standing having
comparable deductions and providing coverage equal to or greater than the coverage under the
cancelled, terminated or lapsed policies for substantially similar premiums are in full force and
effect; provided that, subject to Section 7.6, none of Moto or any of its subsidiaries shall obtain
or renew any insurance (or re-insurance) policy for a term exceeding 12 months.
Subject to compliance with applicable competition or anti-trust laws, Moto shall promptly
notify Randgold in writing of any circumstance or development that, to the knowledge of Moto, is or
could reasonably be expected to constitute a Material Adverse Effect.
Moto and its subsidiaries will cooperate in good faith with Randgold to analyze and, if
reasonably requested by Randgold, adjust or modify the internal control and record keeping systems
of Moto and its subsidiaries with the goal of ensuring that, as of the Effective Time, those
systems are in compliance with laws applicable to companies with securities listed on a US exchange
with respect to preventing and detecting (i) any corrupt or illegal payments and (ii) the creation
of any inaccurate books or records that would disguise or otherwise facilitate such payments.
Notwithstanding any of the foregoing provisions of this section 5.1, in connection with any
Termination Fee Event Moto may issue shares or incur debt if its directors determine in good faith
it is necessary to do so to pay the Termination Fee under this Agreement, provided that the funds
so raised are solely used for paying such Termination Fee.
5.2 Covenants of Moto Relating to the Arrangement
Moto shall and shall cause its subsidiaries to perform all obligations required or desirable
to be performed by Moto or any of its subsidiaries under this Agreement, co-operate with Randgold
in connection therewith, and do all such other acts and things as may be
- 48 -
necessary or desirable in order to consummate and make effective the transactions contemplated
in this Agreement and, without limiting the generality of the foregoing, Moto shall and, where
applicable, shall cause its subsidiaries to:
| | (a) | | immediately defer the separation time of the SRP Rights and continue to
defer the separation time unless otherwise requested by Randgold; |
| |
| | (b) | | promptly, and in any event within five business days following the date of
this Agreement, provide to Randgold (if such agreement remains in effect and if
providing a copy of such agreement is not prohibited by the terms of such agreement)
a copy of each confidentiality and/or standstill agreement which has been entered
into by Moto and any third party pursuant to which confidential information of Moto
has been provided; |
| |
| | (c) | | on or immediately prior to the Effective Date or on such earlier date as
Randgold may request and as may be permitted, waive, suspend the operation of or
otherwise render the Shareholder Rights Plan inoperative or ineffective as regards
the Plan of Arrangement, it being understood that Moto will have no obligation to
take any such action until all other conditions to the Plan of Arrangement have been
satisfied or waived; |
| |
| | (d) | | subject to obtaining confirmation that insurance coverage is maintained as
contemplated in Section 7.6.1, and provided that the Effective Date has occurred, it
shall use its reasonable commercial efforts to cause such members of the Moto Board
to resign as Randgold may require, at the time and in the manner requested by
Randgold, as of the Effective Date, with a nominee of Randgold to be appointed to the
Moto Board immediately after each such resignation; |
| |
| | (e) | | apply for and use its best efforts to obtain all Key Regulatory Approvals
relating to Moto or any of its subsidiaries which are typically applied for by an
offeree and, in doing so, keep Randgold reasonably informed as to the status of the
proceedings related to obtaining the Key Regulatory Approvals, including providing
Randgold with copies of all related applications and notifications, in draft form
(except where such material is confidential in which case it will be provided
(subject to applicable Laws) to Randgold’s outside counsel on an “external counsel”
basis), in order for Randgold to provide its comments thereon, which shall be given
due and reasonable consideration; |
| |
| | (f) | | use its best efforts to obtain as soon as practicable following execution
of this Agreement all third party consents, approvals and notices required under any
of the Material Contracts, and all Key Third Party Consents; |
| |
| | (g) | | defend all lawsuits or other legal, regulatory or other proceedings against
Moto challenging or affecting this Agreement or the consummation of the transactions
contemplated hereby; and |
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| | (h) | | allow representatives of Randgold (including legal and financial advisors)
to attend the Moto Meeting and allow officers of Randgold to speak to any motion
relating to the Arrangement Resolution. |
5.3 Covenants of Randgold Regarding the Performance of Obligations
5.3.1 Randgold shall, and shall cause its subsidiaries to, perform all obligations required to be
performed by Randgold or any of Randgold’s subsidiaries under this Agreement, co-operate with Moto
in connection therewith, and do all such other acts and things as may be necessary or desirable in
order to consummate and make effective, as soon as reasonably practicable, the transactions
contemplated in this Agreement and, without limiting the generality of the foregoing, Randgold
shall and where appropriate shall cause its subsidiaries to:
| | (a) | | apply for and use its best efforts to obtain all Key Regulatory Approvals
relating to Randgold or any of Randgold’s subsidiaries which are typically applied
for by an offeror and, in doing so, keep Moto reasonably informed as to the status of
the proceedings related to obtaining the Key Regulatory Approvals, including
providing Moto with copies of all related applications and notifications in draft
form (except where such material is confidential in which case it will be provided
(subject to applicable Laws) to Moto’s outside counsel on an “external counsel”
basis), in order for Moto to provide its reasonable comments thereon; |
| |
| | (b) | | subject to the terms and conditions of this Agreement and of the Plan of
Arrangement and applicable Laws, pay the aggregate Randgold Share Consideration,
Randgold ADS Consideration and Cash Consideration to be paid pursuant to the
Arrangement at the time provided herein and pay any amounts payable in respect of
Moto Options pursuant to the Plan of Arrangement, either in cash or in Converted
Randgold Options, upon the transfer of such Moto Options to Moto for cancellation or
the conversion of such Moto Options into Converted Randgold Options, as the case may
be, pursuant to and in accordance with the Plan of Arrangement; |
| |
| | (c) | | not take any action that is intended to, or would reasonably be expected
to, individually or in the aggregate, prevent, materially delay or materially impede
the ability of Randgold to consummate the Arrangement or the other transactions
contemplated by this Agreement; |
| |
| | (d) | | based upon the representation of Moto that the completion of the
Arrangement will constitute a “Change of Control” within the meaning of the OKIMO
Assignment, Randgold acknowledges that the amounts owing under the OKIMO Assignment
shall become payable in full within seven business days of the Effective Date.
Randgold agrees that it will make arrangements to provide Moto with sufficient funds
prior to the Effective Date to ensure that, following the Effective Date and
conditional upon the Effective Date occurring, the full amount of the Loan
Consideration outstanding under the OKIMO Assignment can be paid in accordance with
the OKIMO Assignment. |
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5.3.2 If, at any time prior to the Effective Date, Randgold effects a split, consolidation or other
alteration of the issued and outstanding Randgold Shares such that the Share Exchange Ratio, the
Randgold ADS Consideration, the Randgold Share Consideration and/or the Cash Consideration no
longer reflects the intention of the Parties in relation to the effect of the exchange of shares
and/or cash contemplated by the Arrangement, the Board of Directors of Randgold shall make such
adjustments to Share Exchange Ratio, the Randgold ADS Consideration, the Randgold Share
Consideration and/or the Cash Consideration and such other conforming changes that, in their sole
discretion and acting in good faith, they determine to be equitable in the circumstances.
5.4 Mutual Covenants
Each of the Parties covenants and agrees that, except as contemplated in this Agreement,
during the period from the date of this Agreement until the earlier of the Effective Time and the
time that this Agreement is terminated in accordance with its terms:
| | (a) | | it shall, and shall cause its subsidiaries to, use commercially reasonable
efforts to satisfy (or cause the satisfaction of) the conditions precedent to its
obligations hereunder as set forth in Article 6 to the extent the same is within its
control and to take, or cause to be taken, all other action and to do, or cause to be
done, all other things necessary, proper or advisable under all applicable Laws to
complete the Plan of Arrangement, including using its commercially reasonable efforts
to: (i) obtain all Key Regulatory Approvals required to be obtained by it: (ii)
effect all necessary registrations, filings and submissions of information requested
by Governmental Entities required to be effected by it in connection with the Plan of
Arrangement; (iii) oppose, lift or rescind any injunction or restraining order
against it or other order or action against it seeking to stop, or otherwise
adversely affecting its ability to make and complete, the Plan of Arrangement; and
(iv) co-operate with the other Party in connection with the performance by it and its
subsidiaries of their obligations hereunder; in addition, subject to the terms and
conditions of this Agreement, none of the Parties shall knowingly take or cause to be
taken any action which would reasonably be expected to prevent or materially delay
the consummation of the transactions contemplated hereby; |
| |
| | (b) | | it shall not take any action, refrain from taking any commercially
reasonable action, or permit any action to be taken or not taken, which is
inconsistent with this Agreement or which would reasonably be expected to
significantly impede the making or completion of the Plan of Arrangement except as
permitted by this Agreement; |
| |
| | (c) | | Moto shall effect such reorganization of its business, operations,
subsidiaries and assets or such other transactions (each, a “Pre-Acquisition
Reorganization”) as Randgold may reasonably request prior to the Effective Date, and
the Plan of Arrangement, if required, shall be modified accordingly; provided,
however, that Moto need not effect a Pre-Acquisition Reorganization |
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| | | | which in the opinion of Moto, acting reasonably: (i) would require Moto to obtain
the prior approval of the shareholders of Moto in respect of such Pre-Acquisition
Reorganization other than at the Moto Meeting; or (ii) would impede or materially
delay the consummation of the Arrangement. Without limiting the foregoing and
other than as set forth in clause (i) above, Moto shall use its best efforts to
obtain all necessary consents, approvals or waivers from any persons to effect
each Pre- Acquisition Reorganization, and Moto shall cooperate with Randgold in
structuring, planning and implementing any such Pre-Acquisition Reorganization.
Randgold shall provide written notice to Moto of any proposed Pre-Acquisition
Reorganization at least 10 business days prior to the date of the Moto Meeting.
In addition: |
| | (A) | | Randgold shall indemnify and save harmless Moto
and its subsidiaries’ respective officers, directors, employees,
agents, advisors and representatives from and against any and all
liabilities, losses, damages, claims, costs, expenses, interest awards,
judgments and penalties suffered or incurred by any of them in
connection with or as a result of any Pre-Acquisition Reorganization; |
| |
| | (B) | | any Pre-Acquisition Reorganization shall not
become effective unless Randgold shall have waived or confirmed in
writing the satisfaction of all conditions in its favour in Section 6.1
and Section 6.2 and shall have confirmed in writing that it is prepared
to promptly without condition (other than the satisfaction of the
condition contemplated by Section 6.2(a) as it relates to the Pre-
Acquisition Reorganization) proceed to effect the Arrangement; |
| |
| | (C) | | any Pre-Acquisition Reorganization shall not
unreasonably interfere in material operations prior to the Effective
Time of Moto or any of its subsidiaries; |
| |
| | (D) | | unless the Parties otherwise agree, any
Pre-Acquisition Reorganization shall not require any filings with,
notifications to or approvals of any Governmental Entity or third party
(other than such Tax rulings, and filing such Tax elections or
notifications and prefilings or pre-clearances with corporations
branches or similar Governmental Entities, as are necessary or
advisable in the circumstances); |
| |
| | (E) | | any Pre-Acquisition Reorganization shall not
require Moto or any subsidiary to contravene any applicable Laws, their
respective organizational documents or any Material Contract; and |
| |
| | (F) | | Moto and its subsidiaries shall not be
obligated to take any action that could result in any Taxes being
imposed on, or any adverse |
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| | | | Tax or other consequences to, any securityholder of Moto
incrementally greater than the Taxes or other consequences to such
party in connection with the consummation of the Arrangement in the
absence of any Pre-Acquisition Reorganization. |
| |
| | (d) | | Randgold acknowledges and agrees that the planning for and implementation
of any Pre-Acquisition Reorganization shall not be considered a breach of any
covenant under this Agreement and shall not be considered in determining whether a
representation or warranty of Moto hereunder has been breached. Randgold and Moto
shall work cooperatively and use reasonable commercial efforts to prepare prior to
the Effective Time all documentation necessary and do such other acts and things as
are necessary to give effect to such Pre-Acquisition Reorganization. For greater
certainty, Moto shall not be liable for the failure of Randgold to benefit from any
anticipated tax efficiency as a result of a Pre- Acquisition Reorganization. |
5.5 Employment Agreements
Following the approval of the Arrangement Resolution, Randgold shall cause Moto to honour such
obligations, if any, under Moto’s employment agreements as are specifically disclosed in Schedule
5.5 of the Disclosure Letter, including, without limitation, by paying to the individuals party to
such agreements, in each case, such amounts as disclosed in Schedule 5.5 of the Disclosure Letter.
5.6 Randgold Guarantee
Randgold hereby unconditionally and irrevocably guarantees the due and punctual performance by
Subco of each and every obligation of Subco arising under the Arrangement.
ARTICLE 6
CONDITIONS
6.1 Mutual Conditions Precedent
The obligations of the Parties to complete the transactions contemplated by this Agreement,
are subject to the fulfillment, on or before the Effective Time, of each of the following
conditions precedent, each of which may only be waived with the mutual consent of the Parties:
| | (a) | | the Arrangement Resolution shall have been approved and adopted by the Moto
Securityholders at the Moto Meeting in accordance with the Interim Order; |
| |
| | (b) | | the Interim Order and the Final Order shall each have been obtained on
terms consistent with this Agreement, and shall not have been set aside or modified
in a manner unacceptable to Moto and Randgold, acting reasonably, on appeal or
otherwise; |
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| | (c) | | there shall not exist any prohibition at Law, including a cease trade
order, injunction or other prohibition or order at Law or under applicable
legislation, against Randgold or Moto which shall prevent the consummation of the
Arrangement; |
| |
| | (d) | | Randgold Shares and Randgold ADSs to be issued in the United States
pursuant to the Arrangement shall be exempt from registration requirements under the
U.S. Securities Act pursuant to Section 3(a)(10) of the U.S. Securities Act;
provided, however, that Moto shall not be entitled to rely on the provisions of this
Section 6.1(d) in failing to complete the transactions contemplated by this Agreement
in the event that Moto fails to advise the Court prior to the hearing in respect of
the Final Order, as required by the terms of the foregoing exemptions, that Randgold
will rely on the foregoing exemptions based on the Court’s approval of the
transaction; |
| |
| | (e) | | the Key Regulatory Approvals shall have been obtained; |
| |
| | (f) | | the Key Third Party Consents shall have been obtained; |
| |
| | (g) | | this Agreement shall not have been terminated in accordance with its terms;
and |
| |
| | (h) | | the distribution of the securities pursuant to the Arrangement shall be
exempt from the prospectus and registration requirements of applicable Canadian
securities laws either by virtue of exemptive relief from the securities regulatory
authorities of each of the provinces of Canada or by virtue of applicable exemptions
under Canadian securities laws and shall not be subject to resale restrictions under
applicable Canadian securities laws (other than as applicable to control persons or
pursuant to section 2.6 of National Instrument 45-102). |
6.2 Additional Conditions Precedent to the Obligations of Randgold
The obligations of Randgold to complete the transactions contemplated by this Agreement shall
also be subject to the fulfillment of each of the following conditions precedent (each of which is
for the exclusive benefit of Randgold and may be waived by Randgold):
| | (a) | | all covenants of Moto under this Agreement to be performed on or before the
Effective Time which have not been waived by Randgold shall have been duly performed
by Moto in all material respects, and Randgold shall have received a certificate of
Moto addressed to Randgold and dated the Effective Time, signed on behalf of Moto by
two senior executive officers of Moto (on Moto’s behalf and without personal
liability), confirming the same as at the Effective Date; |
| |
| | (b) | | all representations and warranties of Moto set forth in this Agreement
shall be true and correct in all respects, without regard to any materiality or
Material Adverse Effect qualifications contained in them as of the Effective Time, as
though made on and as of the Effective Time (except for representations and |
- 54 -
| | | | warranties made as of a specified date, the accuracy of which shall be determined
as of that specified date), except where any failure or failures of any such
representations and warranties (other than those contained in Sections 3.1(c),
3.1(d), 3.1(f) and 3.1(s)) to be so true and correct in all respects would not
reasonably be expected to have a Material Adverse Effect on Moto (it being a
separate condition that the representations and warranties of Moto made in
Sections 3.1(c), 3.1(d), 3.1(f) and 3.1(s)) must be accurate in all respects when
made and, except as contemplated by this Agreement, on and as of the Effective
Time, as though made on and as of the Effective Time); and Randgold shall have
received a certificate of Moto addressed to Randgold and dated the Effective Time,
signed on behalf of Moto by two senior executive officers of Moto (on Moto’s
behalf and without personal liability), confirming the same as at the Effective
Date; |
| | (c) | | since the date of this Agreement, there shall not have occurred any event,
occurrence, development or circumstance that, individually or in the aggregate has
had or would reasonably be expected to have a Material Adverse Effect on Moto; and |
| |
| | (d) | | holders of no more than 5% of the Moto Shares shall have exercised Dissent
Rights. |
The foregoing conditions will be for the sole benefit of Randgold and may be waived by them in
whole or in part at any time.
6.3 Additional Conditions Precedent to the Obligations of Moto
The obligations of Moto to complete the transactions contemplated by this Agreement shall also
be subject to the fulfillment of each of the following conditions precedent (each of which is for
the exclusive benefit of Moto and may be waived by Moto):
| | (a) | | all covenants of Randgold under this Agreement to be performed on or before
the Effective Time shall have been duly performed by Randgold in all material
respects, and Moto shall have received a certificate of Randgold, addressed to Moto
and dated the Effective Time, signed on behalf of Randgold by two of its senior
executive officers (on Randgold’s behalf and without personal liability), confirming
the same as of the Effective Date; |
| |
| | (b) | | all representations and warranties of Randgold set forth in this Agreement
shall be true and correct in all respects, without regard to any materiality or
Material Adverse Effect qualifications contained in them as of the Effective Time, as
though made on and as of the Effective Time (except for representations and
warranties made as of a specified date, the accuracy of which shall be determined as
of that specified date), except where the failure or failures of all such
representations and warranties (other than those contained in Section 4.1(a), 4.1(b)
and 4.1(d)) to be so true and correct in all respects would not |
- 55 -
| | | | reasonably be expected to have a Material Adverse Effect on Subco or Randgold (it
being a separate condition that the representations and warranties of Randgold
made in Section 4.1(a), 4.1(b) and 4.1(d) must be accurate in all respects when
made and, except as contemplated by this Agreement, on and as of the Effective
Time, as though made on and as of the Effective Time); and Moto shall have
received a certificate of Randgold, addressed to Moto and dated the Effective
Time, signed on behalf of each of Randgold by two senior executive officers of
each of Randgold (on Randgold’s behalf and without personal liability), confirming
the same as at the Effective Date; |
| | (c) | | since the date of Moto Securityholder Approval, there shall not have
occurred any event, occurrence, development or circumstance that, individually or in
the aggregate has had or would reasonably be expected to have a Material Adverse
Effect on Randgold; |
| |
| | (d) | | admission of the Randgold Shares comprising the Randgold Share
Consideration to the Official List of the UK Listing Authority becoming effective in
accordance with the listing rules made by the UK Listing Authority (pursuant to Part
VI of the Financial Services and Markets Act 2000) and admission of the Randgold
Shares comprising the Randgold Share Consideration to trading on the London Stock
Exchange’s market for listed securities becoming effective in accordance with the
Admission and Disclosure Standards of the London Stock Exchange; and |
| |
| | (e) | | Randgold shall have delivered evidence satisfactory to Moto of the approval
of the listing and posting for trading on the NASDAQ of the Randgold ADSs comprising
the Randgold ADS Consideration. |
The foregoing conditions will be for the sole benefit of Moto and may be waived by it in whole
or in part at any time.
6.4 Satisfaction of Conditions
The conditions precedent set out in Section 6.1, Section 6.2 and Section 6.3 shall be
conclusively deemed to have been satisfied, waived or released at the Effective Time.
ARTICLE 7
ADDITIONAL AGREEMENTS
7.1 Notice and Cure Provisions
Each Party will give prompt notice to the other of the occurrence, or failure to occur, at any
time from the date hereof until the earlier to occur of the termination of this Agreement and the
Effective Time of any event or state of facts which occurrence or failure would, or would be likely
to:
- 56 -
| | (a) | | cause any of the representations or warranties of any Party contained
herein to be untrue or inaccurate in any material respect on the date hereof or at
the Effective Time (provided that this paragraph (a) shall not apply in the case of
any event or state of facts resulting from actions or omissions of Moto which are
permitted or required by this Agreement); or |
| |
| | (b) | | result in the failure to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by any Party hereunder prior to the
Effective Time. |
Randgold may not exercise its rights to terminate this Agreement pursuant to Section
8.2.1(c)(iii) and Moto may not exercise its right to terminate this Agreement pursuant to Section
8.2.1(d)(iii) unless the Party intending to rely thereon has delivered a written notice to the
other Party specifying in reasonable detail all breaches of covenants, representations and
warranties or other matters which the Party delivering such notice is asserting as the basis for
the non-fulfillment or the applicable condition or termination right, as the case may be. If any
such notice is delivered, provided that a Party is proceeding diligently to cure such matter and
such matter is capable of being cured, no Party may terminate this Agreement until the expiration
of a period of fifteen business days from such notice, and then only if such matter has not been
cured by such date. If such notice has been delivered prior to the making of the application for
the Final Order, such application and such filing shall be postponed until the expiry of such
period. For greater certainty, in the event that such matter is cured within the time period
referred to herein without a Material Adverse Effect, this Agreement may not be terminated as a
result of the cured breach.
7.2 Non-Solicitation
7.2.1 Except as otherwise expressly provided in this Section 7.2, Moto shall not, directly or
indirectly, through any officer, director, employee, representative (including any financial or
other advisor) or agent of Moto or any of its subsidiaries (collectively, the “Representatives”),
(i) solicit, initiate, knowingly encourage or facilitate (including by way of furnishing
information or entering into any form of agreement, arrangement or understanding) the initiation of
any inquiries or proposals regarding an Acquisition Proposal, (ii) participate in any discussions
or negotiations with any person (other than Randgold or any of its affiliates) regarding an
Acquisition Proposal, (iii) approve, accept, endorse or recommend, or propose publicly to accept,
approve, endorse or recommend, any Acquisition Proposal, (iv) accept or enter into or publicly
propose to accept or enter into, any agreement, understanding or arrangement or other contract in
respect of an Acquisition Proposal or (v) make a Change in Recommendation.
7.2.2 Except as otherwise provided in this Section 7.2, Moto shall, and shall cause its
subsidiaries and Representatives to immediately cease and cause to be terminated any solicitation,
encouragement, discussion or negotiation with any persons conducted heretofore by Moto, its
subsidiaries or any Representatives with respect to any Acquisition Proposal, and, in connection
therewith, Moto will discontinue access to any of its confidential information (and not establish
or allow access to any of its confidential information, or any data room, virtual or
- 57 -
otherwise) and shall as soon as possible request, to the extent that it is entitled to do so (and
exercise all rights it has to require) the return or destruction of all confidential information
regarding Moto and its subsidiaries previously provided to any such person or any other person and
will request (and exercise all rights it has to require) the destruction of all material including
or incorporating or otherwise reflecting any material confidential information regarding Moto and
its subsidiaries. Moto agrees that, except as permitted Section 7.2.3 neither it nor any of its
subsidiaries, shall terminate, waive, amend or modify any provision of any existing confidentiality
agreement relating to an Acquisition Proposal or any standstill agreement to which it or any of its
subsidiaries is a party (it being acknowledged and agreed that the automatic termination of any
standstill provisions of any such agreement as the result of the entering into and announcement of
this Agreement by Moto, pursuant to the express terms of any such agreement, shall not be a
violation of this Section 7.2.2) and Moto undertakes to enforce all standstill, non-disclosure,
non-disturbance, non-solicitation and similar covenants that it or any of its subsidiaries have
entered into prior to the date hereof.
7.2.3 Notwithstanding Sections 7.2.1 and 7.2.2 and any other provision of this Agreement or of any
other agreement between Randgold and Moto, if at any time following the date of this Agreement and
prior to obtaining the Securityholder Approval of the Arrangement Resolution at the Moto Meeting,
Moto receives a bona fide, written Acquisition Proposal that the Moto Board determines in good
faith, after consultation with its financial advisors and outside counsel, constitutes or, if
consummated in accordance with its terms (disregarding, for the purposes of any such determination,
any term of such Acquisition Proposal that provides for a due diligence investigation), could
reasonably be expected to be a Superior Proposal, then Moto may, provided it is in compliance with
Sections 7.2.2 and 7.2.4:
| | (a) | | furnish information with respect to Moto and its subsidiaries to the person
making such Acquisition Proposal; |
| |
| | (b) | | enter into, participate, facilitate and maintain discussions or
negotiations with, and otherwise cooperate with or assist, the person making such
Acquisition Proposal; and/or |
| |
| | (c) | | waive any standstill provision or agreement that would otherwise prohibit
such person from making such Acquisition Proposal; |
provided that Moto shall not, and shall not allow its Representatives to, disclose any non-public
information with respect to Moto to such person (i) if such non public information has not been
previously provided to, or is not concurrently provided to, Randgold; and (ii) without entering
into an agreement with such person substantially in the form of the Confidentiality Agreement
containing terms that are no more favourable to such person than those found in the Confidentiality
Agreement.
7.2.4 Moto shall promptly notify Randgold, at first orally and then in writing within 24 hours of
receipt of the Acquisition Proposal, in the event it receives an Acquisition Proposal following the
date of this Agreement, including the material terms and conditions thereof, and the identity of
the person or persons making the Acquisition Proposal, and shall include copies of
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any such proposal, inquiry, offer or request, and a copy of any agreement entered into in
accordance with Section 7.3 hereof, or any amendment to any of the foregoing. Moto shall
thereafter also provide such other details of such proposal, inquiry, offer or request, or any
amendment to any of the foregoing, as Randgold may reasonably request. Moto shall keep Randgold
fully informed as to the status, including any changes to the material terms, of such proposal,
inquiry, offer or request, or any amendment to any of the foregoing, and shall respond promptly to
all inquiries from Randgold with respect thereto.
7.2.5 Subject to Section 7.3, at any time following the date of this Agreement and prior to
obtaining Moto Securityholder Approval, if Moto receives an Acquisition Proposal which the Moto
Board concludes in good faith constitutes a Superior Proposal, the Moto Board may, subject to
compliance with the procedures set forth in Section 8.2, terminate this Agreement to enter into a
definitive agreement with respect to such Superior Proposal.
7.2.6 Nothing contained in this Agreement shall prohibit the Moto Board from taking any action or
making a Change in Recommendation or from making any disclosure to any securityholders of Moto
prior to the Effective Time, if, in the good faith judgment of the Moto Board, after consultation
with outside legal counsel, failure to take such action or make such disclosure would be
inconsistent with the Moto Board’s exercise of its fiduciary duties or such action or disclosure is
otherwise required under applicable Law (including by responding to an Acquisition Proposal under a
directors’ circular or otherwise as required under Securities Laws); provided that, for greater
certainty, in the event of a Change of Recommendation and a termination by Randgold of this
Agreement pursuant to Section 8.2.1(c)(i), but not including a termination by Randgold pursuant to
Section 8.2.1(c)(i) where the Change in Recommendation resulted from the occurrence of an Material
Adverse Effect with respect to Randgold, Moto shall pay the Termination Fee as required by Section
7.4. In addition, subject to the provisions of this Section 7.2 and Section 7.3, nothing contained
in this Agreement shall prevent Moto or the Moto Board from calling and holding a meeting of Moto
Shareholders, or any of them, requisitioned by Moto Shareholders, or any of them, in accordance
with the BCBCA or ordered to be held by a court in accordance with applicable Laws.
7.3 Right to Match
7.3.1 Moto covenants that it will not accept, approve, endorse, recommend or enter into any
agreement, understanding or arrangement in respect of a Superior Proposal (other than a
confidentiality and standstill agreement permitted by Section 7.2.3) unless:
| | (a) | | Moto has complied with its obligations under Section 7.2 and has provided
Randgold with a copy of the Superior Proposal; and |
| |
| | (b) | | a period (the “Response Period”) of five business days has elapsed from the
date that is the later of (x) the date on which Randgold receives written notice from
the Moto Board that the Moto Board has determined, subject only to compliance with
this Section 7.3, to accept, approve, endorse, recommend or enter into a definitive
agreement with respect to such Superior Proposal, and (y) the date Randgold receives
a copy of the Superior Proposal. |
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7.3.2 During the Response Period, Randgold will have the right, but not the obligation, to offer to
amend this Agreement and the Plan of Arrangement, including an increase in, or modification of, the
aggregate consideration. The Moto Board shall review any such offer by Randgold to amend this
Agreement and the Plan of Arrangement to determine whether the Acquisition Proposal to which
Randgold is responding would continue to be a Superior Proposal when assessed against the
Arrangement as it is proposed in writing by Randgold to be amended. If the Moto Board determines
that the Acquisition Proposal no longer constitutes a Superior Proposal, the Moto Board will cause
Moto to enter into an amendment to this Agreement with Randgold incorporating the amendments to the
Agreement and Plan of Arrangement as set out in the written offer to amend, and will promptly
reaffirm its recommendation of the Arrangement and by the prompt issuance of a press release to
that effect. If the Moto Board determines that the Acquisition Proposal continues to be a Superior
Proposal, Moto may approve and recommend that holders of Moto Shares accept such Superior Proposal
and may terminate this Agreement pursuant to Section 8.2.1(d)(i) in order to accept or enter into
an agreement, understanding or arrangement to proceed with the Superior Proposal.
7.3.3 Each successive amendment to any Acquisition Proposal that results in an increase in, or
modification of, the consideration (or value of such consideration) to be received by the holders
of the Moto Shares shall constitute a new Acquisition Proposal for the purposes of this Section 7.3
and Randgold shall be afforded a new Response Period and the rights afforded in paragraph 7.3.2 in
respect of each such Acquisition Proposal.
7.4 Expenses and Termination Fees
7.4.1 Except as otherwise provided herein, all fees, costs and expenses incurred in connection with
this Agreement and the Plan of Arrangement shall be paid by the Party incurring such fees, costs or
expenses except:
| | (a) | | in the event this Agreement is terminated by Randgold pursuant to Section
8.2.1(e), then Randgold shall promptly, but in no event later than five business days
following the request by Moto, pay the reasonable charges and expenses actually
incurred by Moto in connection with the negotiation of this Agreement (upon being
provided with supporting invoices), and the transactions contemplated hereby, subject
to a maximum of $2,000,000, as reimbursement to Moto payable by wire transfer of same
day funds; or |
| |
| | (b) | | in the event this Agreement is terminated pursuant to Section 8.2.1(b)(i)
solely due to any failure: |
| | (1) | | by Randgold to file, or provide to Moto for filing, on SEDAR
the Randgold Technical Reports in a form, determined by Randgold, acting
reasonably, that can be filed in accordance with NI 43-101; |
| |
| | (2) | | by Randgold to provide Moto with all information referred to in
Section 2.4(c) to be provided by Randgold as is required to be included in the
Moto Circular pursuant to Securities Laws; |
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| | (3) | | of the Randgold Shares or the Randgold ADSs to be issued by
Randgold pursuant to the Arrangement to be admitted to listing on the official
list of the UK Listing Authority or to trading on the London Stock Exchange
plc, or NASDAQ, as applicable, provided that Moto has promptly provided upon
request all such financial and other information regarding Moto as may be
required in order to achieve such admission, or |
| |
| | (4) | | by Randgold to perform any of its obligations under Section
5.3.1(b), |
| |
| | | | then Randgold shall promptly, but in no event later than five business days
following the request by Moto, pay the Red Back Termination Fee, as reimbursement
to Moto payable by wire transfer of same day funds; or |
| | (c) | | in the event this Agreement is terminated pursuant to Section 8.2.1(e),
then Randgold shall promptly, but in no event later than five business days following
the request by Moto, pay the Red Back Termination Fee, as reimbursement to Moto
payable by wire transfer of same day funds. |
7.4.2 If a Termination Fee Event occurs, Moto shall pay Randgold (by wire transfer of immediately
available funds) the Termination Fee in accordance with Section 7.4.5.
7.4.3 For the purposes of this Agreement, “Termination Fee” means US$14,627,300.00.
7.4.4 For the purposes of this Agreement, “Termination Fee Event” means the termination of this
Agreement:
| | (a) | | by Randgold pursuant to Section 8.2.1(c)(i), (except where the Change in
Recommendation which has led to the termination pursuant to Section 8.2.1(c)(i) was
made solely because the Board of Directors of Moto, acting in good faith, determined
that a change, effect, event or occurrence had taken place that constituted a
Material Adverse Effect on Randgold and that, as a consequence, it would be
inconsistent with the Board’s fiduciary obligations to continue to recommend that
Moto Securityholders vote in favour of the Arrangement), Section 8.2.1(c)(iv) or
Section 8.2.1(c)(vi); |
| |
| | (b) | | by Moto pursuant to Section 8.2.1(d)(i); or |
| |
| | (c) | | by Randgold pursuant to Section 8.2.1(b)(i), or Section 8.2.1 (c)(v) or by
either Party pursuant to 8.2.1(b)(iii), but only if, in the case of this paragraph
(c), prior to the earlier of the termination of this Agreement or the holding of the
Moto Meeting, following the date of this Agreement, a bona fide Acquisition Proposal,
or the intention to make an Acquisition Proposal, with respect to Moto shall have
been made to Moto or publicly announced by any person (other than Randgold or any of
its affiliates) and within six months following the date of such termination: |
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| | (i) | | an Acquisition Proposal is consummated by Moto; or |
| |
| | (ii) | | Moto and/or one or more of its subsidiaries enters into a
definitive agreement in respect of, or the Moto Board approves or recommends,
an Acquisition Proposal which is subsequently consummated at any time
thereafter; |
| |
| | provided that, for the purposes of this Section 7.4.4(c), all references to “20%” in
the definition of “Acquisition Proposal” shall be deemed to be references to “50%”. |
7.4.5 If a Termination Fee Event occurs due to a termination of this Agreement by Moto pursuant to
Section 8.2.1(d)(i), or by Randgold pursuant to Section 8.2.1(c)(i) or Section 8.2.1(c)(vi), the
Termination Fee shall be payable simultaneously with the occurrence of such Termination Fee Event.
If a Termination Fee Event occurs due to a termination of this Agreement by Randgold pursuant to
Section 8.2.1(c)(iv), the Termination Fee shall be payable within two business days following such
Termination Fee Event. If a Termination Fee Event occurs in the circumstances set out in Section
7.4.4(c), the Termination Fee shall be payable within two business days following the closing of
the applicable transaction referred to therein.
7.4.6 Each of the Parties acknowledges that the agreements contained in this Section 7.4 are an
integral part of the transactions contemplated in this Agreement and that, without those
agreements, the Parties would not enter into this Agreement. Each Party acknowledges that all of
the payment amounts set out in this Section 7.4 are payments of liquidated damages which are a
genuine pre-estimate of the damages, which the Party entitled to such damages will suffer or incur
as a result of the event giving rise to such payment and the resultant termination of this
Agreement and are not penalties. Moto irrevocably waives any right it may have to raise as a
defense that any such liquidated damages are excessive or punitive. For greater certainty, each
Party agrees that, upon any termination of this Agreement under circumstances where Randgold is
entitled to the Termination Fee and such Termination Fee is paid in full, Randgold shall be
precluded from any other remedy against Moto at law or in equity or otherwise (including, without
limitation, an order for specific performance), and shall not seek to obtain any recovery,
judgment, or damages of any kind, including consequential, indirect, or punitive damages, against
Moto or any of its subsidiaries or any of their respective directors, officers, employees,
partners, managers, members, shareholders or affiliates in connection with this Agreement or the
transactions contemplated hereby.
7.4.7 Nothing in this Section 7.4 shall relieve or have the effect of relieving any Party in any
way from liability for damages incurred or suffered by a Party as a result of an intentional or
willful breach of this Agreement.
7.4.8 Nothing in this Section 7.4 shall preclude a Party from seeking injunctive relief to restrain
any breach or threatened breach of the covenants or agreements set forth in this Agreement or the
Confidentiality Agreement or otherwise to obtain specific performance of any such covenants or
agreements, without the necessity of posting bond or security in connection therewith.
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7.4.9 In no event shall Moto be obligated to pay to Randgold an amount in respect of the
termination of this Agreement that is, in aggregate, in excess of the Termination Fee.
7.5 Access to Information; Confidentiality
From the date hereof until the earlier of the Effective Time and the termination of this
Agreement, subject to compliance with applicable Law and the terms of any existing Contracts, Moto
shall, and shall cause its subsidiaries and their respective officers, directors, employees,
independent auditors, accounting advisers and agents to, afford to Randgold and AngloGold and to
their respective officers, employees, agents and representatives such access as Randgold may
reasonably require at all reasonable times, including for the purpose of facilitating integration
business planning, to their officers, employees, agents, properties, books, records and Contracts,
shall furnish Randgold and AngloGold with all data and information as Randgold may reasonably
request and shall cooperate with Randgold in securing access for Randgold and AngloGold to any
documents, agreements, corporate records or minute books not in the possession or under the control
of Moto. Randgold and Moto acknowledge and agree that information furnished to Randgold and
AngloGold pursuant to this Section 7.5 shall be subject to the terms and conditions of the
Confidentiality Agreement.
7.6 Insurance and Indemnification
7.6.1 Randgold will, or will cause Moto and its subsidiaries to, maintain in effect without any
reduction in scope or coverage for six years from the Effective Date customary policies of
directors’ and officers’ liability insurance providing protection no less favourable to the
protection provided by the policies maintained by Moto and its subsidiaries which are in effect
immediately prior to the Effective Date and providing protection in respect of claims arising from
facts or events which occurred on or prior to the Effective Date; provided, however, that Randgold
acknowledges and agrees that prior to the Effective Date, Moto may, in the alternative, purchase
run off directors’ and officers’ liability insurance for a period of up to six years from the
Effective Date with the prior written consent of Randgold.
7.6.2 Randgold agrees that it shall directly honour all rights to indemnification or exculpation
now existing in favour of present and former officers and directors of Moto and its subsidiaries to
the extent that they are disclosed in Schedule 7.6.2 of the Disclosure Letter, and acknowledges
that such rights, to the extent that they are disclosed in Schedule 7.6.2 of the Disclosure Letter,
shall survive the completion of the Plan of Arrangement and shall continue in full force and effect
for a period of not less than six years from the Effective Date.
7.6.3 The provisions of this Section 7.6 are intended for the benefit of, and shall be enforceable
by, each insured or indemnified person, his or her heirs and his or her legal representatives and,
for such purpose, Moto hereby confirms that it is acting as agent and trustee on their behalf.
Furthermore, this Section 7.6 shall survive the termination of this Agreement as a result of the
occurrence of the Effective Date for a period of six years.
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ARTICLE 8
TERM, TERMINATION, AMENDMENT AND WAIVER
8.1 Term
This Agreement shall be effective from the date hereof until the earlier of the Effective Time
and the termination of this Agreement in accordance with its terms.
8.2 Termination
8.2.1 This Agreement, other than Section 7.4 hereof, may be terminated and the Arrangement may be
abandoned at any time prior to the Effective Time (notwithstanding any approval of this Agreement
or the Arrangement Resolution by the Moto Securityholders or the Arrangement by the Court):
| | (a) | | by mutual written agreement of Moto and Randgold ; or |
| |
| | (b) | | by either Moto or Randgold, if: |
| | (i) | | the Effective Time shall not have occurred on or before the
Outside Date, except that the right to terminate this Agreement under this
8.2.1(b)(i) shall not be available to any Party whose failure to fulfill any of
its obligations or breach of any of its representations and warranties under
this Agreement has been the cause of, or resulted in, the failure of the
Effective Time to occur by such Outside Date; or |
| |
| | (ii) | | after the date hereof, there shall be enacted or made any
applicable Law that makes consummation of the Arrangement illegal or otherwise
prohibited or enjoins Moto or Randgold from consummating the Arrangement and
such applicable Law (if applicable) or enjoinment shall have become final and
non-appealable; or |
| |
| | (iii) | | the Arrangement Resolution shall have failed to obtain the
Moto Securityholder Approval at the Moto Meeting (including any adjournment or
postponement thereof) in accordance with the Interim Order; or |
| | (i) | | prior to obtaining the Moto Securityholder Approval, the Moto
Board fails to recommend or withdraws, amends, modifies or qualifies, in a
manner adverse to Randgold or fails to reaffirm its recommendation of the
Arrangement within five business days (and in any case prior to the Moto
Meeting) after having been requested in writing by Randgold to do so, in a
manner adverse to Randgold, (it being understood that the taking of a neutral
position or no position with respect to an Acquisition Proposal beyond a period
of five business days (or beyond the date which is one |
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| | | | day prior to the Moto Meeting, if sooner) shall be considered an adverse
modification) (a “Change in Recommendation”); or |
| |
| | (ii) | | any of the conditions set forth in Section 6.1 or Section 6.2
is not satisfied, and such condition is incapable of being satisfied by the
Outside Date; or |
| |
| | (iii) | | subject to Section 7.1, a breach of any representation or
warranty or failure to perform any covenant or agreement on the part of Moto
set forth in this Agreement (other than as set forth in Section 7.2) shall have
occurred that would cause the conditions set forth in Section 6.1 or Section
6.2 not to be satisfied, and such conditions are incapable of being satisfied
by the Outside Date; provided that Randgold is not then in breach of this
Agreement so as to cause any of the conditions set forth in Section 6.1 or
Section 6.3 not to be satisfied; or |
| |
| | (iv) | | Moto is in breach or in default of any of its obligations or
covenants set forth in Section 7.2 other than an immaterial breach of Moto’s
obligation under Section 7.2 to provide notice of an Acquisition Proposal to
Randgold within a prescribed period; or |
| |
| | (v) | | the Moto Meeting has not occurred on or before the later of (A)
October 5, 2009 and (B) the date that is 35 days after the date on which
Randgold provides Moto with all information referred to in section 2.4(c) to be
provided by Randgold as is required, as determined by Randgold, acting
reasonably, to be included in the Moto Circular pursuant to Securities Laws, or
such other date as the Parties may agree upon, each acting reasonably, provided
that the right to terminate this Agreement pursuant to this Section 8.2.1(c)(v)
shall not be available to Randgold if the failure by Randgold to fulfill any
obligation hereunder is the cause of, or results in, the failure of the Moto
Meeting to occur on or before such date; or |
| |
| | (vi) | | the Moto Board authorizes Moto to enter into a binding written
agreement relating to a Superior Proposal; or |
| | (i) | | the Moto Board authorizes Moto, subject to complying with the
terms of this Agreement, to enter into a legally binding agreement with respect
to a Superior Proposal; provided that concurrently with such termination, Moto
pays the Termination Fee payable pursuant to Section 7.4; or |
| |
| | (ii) | | any of the conditions set forth in Section 6.1 or Section 6.3
is not satisfied, and such condition is incapable of being satisfied by the
Outside Date; or |
| |
| | (iii) | | subject to Section 7.1, a breach of any representation or
warranty or failure to perform any covenant or agreement on the part of
Randgold set forth in |
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| | | | this Agreement shall have occurred that would cause the conditions set forth
in Section 6.1 or Section 6.3 not to be satisfied, and such conditions are
incapable of being satisfied by the Outside Date; provided that Moto is not
then in breach of this Agreement so as to cause any of the conditions set
forth in Section 6.1 or Section 6.2 not to be satisfied; or |
| | (e) | | by either Randgold or Moto in the event that Randgold is required by any
Governmental Authority, Securities Authority or Exchange to call and hold a meeting
of its shareholders to obtain their approval for the issuance of Randgold Shares or
Randgold ADSs pursuant to the Arrangement or any other aspect of the Arrangement and
such approval is not obtained at that meeting. |
8.2.2 The Party desiring to terminate this Agreement pursuant to this Section 8.2 (other than
pursuant to Section 8.2.1(a)) shall give notice of such termination to the other Parties.
8.2.3 If this Agreement is terminated pursuant to this Section 8.2, this Agreement shall become
void and of no effect without liability of any Party (or any shareholder, director, officer,
employee, agent, consultant or representative of such Party) to any other Party hereto, except as
otherwise expressly contemplated hereby, and provided that the provisions of this Section 8.2.3 and
Sections 7.4, 7.5, 9.3, 9.6 and 9.7 and the provisions of the Confidentiality Agreement (including
any standstill provisions contained therein) shall survive any termination hereof pursuant to
Section 8.2.1; provided further that neither the termination of this Agreement nor anything
contained in this Section 8.2 shall relieve a Party from any liability arising prior to such
termination.
8.3 Amendment
This Agreement and the Plan of Arrangement may, at any time and from time to time before or
after the holding of the Moto Meeting but not later than the Effective Time, be amended by mutual
written agreement of the Parties, and any such amendment may, subject to the Interim Order and the
Final Order and applicable Law, without limitation:
| | (a) | | change the time for performance of any of the obligations or acts of the
Parties; |
| |
| | (b) | | waive any inaccuracies or modify any representation or warranty contained
herein or in any document delivered pursuant hereto; |
| |
| | (c) | | waive compliance with or modify any of the covenants herein contained and
waive or modify performance of any of the obligations of the Parties; and/or |
| |
| | (d) | | waive compliance with or modify any mutual conditions precedent herein
contained. |
8.4 Waiver
Any Party may (i) extend the time for the performance of any of the obligations or acts of the
other Party, (ii) waive compliance, except as provided herein, with any of the other
- 66 -
Party’s agreements or the fulfilment of any conditions to its own obligations contained
herein, or (iii) waive inaccuracies in any of the other Party’s representations or warranties
contained herein or in any document delivered by the other Party; provided, however, that any such
extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf
of such Party and, unless otherwise provided in the written waiver, will be limited to the specific
breach or condition waived; and provided further that, for the purposes of this Section 8.4, Subco
and Randgold shall be deemed to constitute one and the same Party.
ARTICLE 9
GENERAL PROVISIONS
9.1 Privacy
Each Party shall comply with applicable privacy Laws in the course of collecting, using and
disclosing personal information about an identifiable individual (the “Transaction Personal
Information”). Randgold and Subco shall not disclose Transaction Personal Information to any
Person other than to its advisors who are evaluating and advising on the transactions contemplated
by this Agreement. If Randgold and Subco complete the transactions contemplated by this Agreement,
Randgold and Subco shall not, following the Effective Date, without the consent of the individuals
to whom such Transaction Personal Information relates or as permitted or required by applicable
Law, use or disclose Transaction Personal Information:
| | (a) | | for purposes other than those for which such Transaction Personal
Information was collected by Moto prior to the Effective Date; and |
| |
| | (b) | | which does not relate directly to the carrying on of Moto’s business or to
the carrying out of the purposes for which the transactions contemplated by this
Agreement were implemented. |
Randgold and Subco shall protect and safeguard the Transaction Personal Information against
unauthorized collection, use or disclosure. Randgold and Subco shall cause its advisors to observe
the terms of this Section and to protect and safeguard Transaction Personal Information in their
possession. If this Agreement shall be terminated, Randgold and Subco shall promptly deliver to
Moto all Transaction Personal Information in its possession or in the possession of any of its
advisors, including all copies, reproductions, summaries or extracts thereof.
9.2 Notices
All notices and other communications given or made pursuant hereto shall be in writing and
shall be deemed to have been duly given or made as of the date delivered or sent if delivered
personally or sent by facsimile or e-mail transmission, or as of the following business day if sent
by prepaid overnight courier, to the Parties at the following addresses (or at such other addresses
as shall be specified by any Party by notice to the other given in accordance with these
provisions):
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(a) if to Randgold or Subco:
La Xxxxx Xxxxxxxx
Xx Xxxxx Xxxxxx
Xx. Xxxxxx, Xxxxxx XX0 0XX
Channel Islands
Attention: Dr. Xxxx Xxxxxxx
Facsimile: x00 00 000 0000
Email: xxxxxxxx@xxxxxxxxxxxxxxxxx.xxx
with a copy (which shall not constitute notice) to:
Blake, Xxxxxxx & Xxxxxxx LLP
00 Xxxxxxx Xxxx
0xx Xxxxx
Xxxxxx, XX0X 0XX
Xxxxxxx
Attention: Xxxxx Xxxxxxx
Facsimile: x00-000 000-0000
Email: xxxxx.xxxxxxx@xxxxxx.xxx
if to Moto:
Xxxxx 0, 00 Xxx Xxxxxx
Xxxxxxx Xxxxxxx Xxxxxxxxx, 0000
Attention: Xxxx Xxxxxxx
Facsimile: 461 8 9381 4840
Email: xxxxxxxx@xxxxxxxxxxxxx.xxx
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx LLP
0000 Xxxxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxx
Facsimile: x0 (000) 000-0000
Email: xxxxxxxxxx@xxxxxxxxxxxxx.xxx
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9.3 Governing Law; Waiver of Jury Trial
This Agreement, including the Plan of Arrangement, shall be governed, including as to
validity, interpretation and effect, by the laws of the Province of British Columbia and the laws
of Canada applicable therein. Each of the Parties hereby irrevocably attorns to the exclusive
jurisdiction of the Courts of the Province of British Columbia in respect of all matters arising
under and in relation to this Agreement and waives any defences to the maintenance of an action in
the Courts of the Province of British Columbia. EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF
THIS AGREEMENT.
9.4 Injunctive Relief
Subject to Section 7.4, the Parties agree that irreparable harm would occur for which money
damages would not be an adequate remedy at law in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the Parties shall be entitled to an injunction or injunctions and
other equitable relief to prevent breaches of this Agreement, any requirement for the securing or
posting of any bond in connection with the obtaining of any such injunctive or other equitable
relief hereby being waived.
9.5 Time of Essence
Time shall be of the essence in this Agreement.
9.6 Entire Agreement, Binding Effect and Assignment
Randgold and Subco may assign all or any part of their rights under this Agreement to, and its
obligations under this Agreement may be assumed by, a direct or indirect subsidiary of Randgold,
provided that if such assignment and/or assumption takes place, Randgold shall continue to be
liable jointly and severally with such subsidiary for all of its obligations hereunder. This
Agreement shall be binding on and shall enure to the benefit of the Parties and their respective
successors and permitted assigns.
This Agreement (including the exhibits and schedules hereto and the Disclosure Letter) and the
Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements
and understandings, both written and oral, between the Parties, or any of them, with respect to the
subject matter hereof and thereof and, except as expressly provided herein, this Agreement is not
intended to and shall not confer upon any person other than the Parties any rights or remedies
hereunder. Except as expressly permitted by the terms hereof, neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by either of the Parties without the
prior written consent of the other Party.
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9.7 Severability
If any term or other provision of this Agreement is invalid, illegal or incapable of being
enforced by any rule or Law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially adverse to any Party.
Upon such determination that any term or other provision is invalid, illegal or incapable of being
enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
9.8 Counterparts, Execution
This Agreement may be executed in two or more counterparts, each of which shall be deemed to
be an original but all of which together shall constitute one and the same instrument. The Parties
shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic
copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally
effective to create a valid and binding agreement between the Parties.
[Remainder of page intentionally left blank. Signature page follows.]
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IN WITNESS WHEREOF Randgold, Subco and Moto have caused this Agreement to be executed as of
the date first written above by their respective officers thereunto duly authorized.
| | | | | |
| | RANDGOLD RESOURCES LIMITED
| |
| | By: | /s/ X X Xxxxxxx
| |
| | | Name: | Xx. X X Xxxxxxx | |
| | | Title: | Chief Executive Officer | |
| |
| | 0858065 B.C. LTD.
| |
| | By: | /s/ Xxxxxx Xxxxxxxxxxxx
| |
| | | Name: | Xxxxxx Xxxxxxxxxxxx | |
| | | Title: | Director | |
| |
| | MOTO GOLDMINES LIMITED
| |
| | By: | /s/ Xxxxxx X. Xxxxxxx
| |
| | | Name: | Xxxxxx X. Xxxxxxx | |
| | | Title: | President and Chief Operating Officer | |
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SCHEDULE A
TO THE ARRANGEMENT AGREEMENT
PLAN OF ARRANGEMENT
UNDER SECTION 288 OF THE
BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Section 1.01 Definitions
In this Plan of Arrangement, unless the context otherwise requires, the following words and
terms with the initial letter or letters thereof capitalized shall have the meanings ascribed to
them below:
| | (a) | | “AIM” means the Alternative Investment Market of the London Stock Exchange; |
| |
| | (b) | | “AngloGold” means AngloGold Xxxxxxx Limited, a corporation existing under the
laws of South Africa; |
| |
| | (c) | | “Arrangement” means the arrangement under section 288 of the BCBCA on the terms
and subject to the conditions set out in this Plan of Arrangement, subject to any
amendments or variations thereto made in accordance with Section 8.3 of the Arrangement
Agreement or this Plan of Arrangement at the direction of the Court; |
| |
| | (d) | | “Arrangement Agreement” means the arrangement agreement dated as of August 5,
2009 among Randgold, Subco and Moto, together with the Disclosure Letter, as the same
may be amended, supplemented or otherwise modified from time to time in accordance with
the terms thereof; |
| |
| | (e) | | “Arrangement Resolution” means the special resolution to be considered at the
Moto Meeting substantially in the form and content of Schedule B to the Arrangement
Agreement; |
| |
| | (f) | | “BCBCA” means the Business Corporations Act (British Columbia) and the
regulations made thereunder, as promulgated or amended from time to time; |
| |
| | (g) | | “Business Day” means any day other than a Saturday, a Sunday or a statutory or
civic holiday in London, England, New York, New York, Toronto, Ontario, Perth,
Australia or Vancouver, British Columbia; |
| |
| | (h) | | “Cash Consideration” means US$4.47 in cash for each Moto Share which a Former
Moto Shareholder may elect to receive, subject to the Cash Parameter, by making the
appropriate Election; |
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| | (i) | | “Cash Parameter” means US$243,787,378.72, being the maximum amount of cash that
Subco shall be obligated to pay, and that Former Moto Shareholders that make an
Election to receive the Cash Consideration shall collectively be entitled to receive
(other than in respect of any cash payable in lieu of fractional Randgold Shares or
Randgold ADSs), pursuant to the Arrangement; |
| |
| | (j) | | “Converted Randgold Option” shall have the meaning ascribed to such term in
Section 3.01(m) hereof; |
| |
| | (k) | | “Court” means the Supreme Court of British Columbia; |
| |
| | (l) | | “Deemed Option Election” means the deemed election contemplated by Section
3.01(j) hereof; |
| |
| | (m) | | “Depositary” means any trust company, bank or financial institution agreed to
in writing between Randgold and Moto for the purpose of, among other things, exchanging
certificates representing Moto Shares for certificates representing the Randgold Share
Consideration and Randgold ADS Consideration and paying the Cash Consideration in
connection with the Arrangement; |
| |
| | (n) | | “Depositary Interests” means depositary interests representing Moto Shares
which depositary interests are listed for trading on the AIM; |
| |
| | (o) | | “Dissent Rights” shall have the meaning ascribed thereto in Article 4.01; |
| |
| | (p) | | “Dissenting Shareholder” means a registered holder of Moto Shares who dissents
in respect of the Arrangement in strict compliance with the Dissent Rights and who is
ultimately entitled to be paid fair value for such holder’s Moto Shares; |
| |
| | (q) | | “Effective Date” means the date agreed to by Randgold and Moto in writing as
the effective date of the Arrangement, after all of the conditions precedent to the
completion of the Arrangement as set out in the Arrangement Agreement and the Final
Order have been satisfied or waived; |
| |
| | (r) | | “Effective Time” means 12:01 a.m. (Vancouver time) on the Effective Date; |
| |
| | (s) | | “Election” means the election to be made by each Former Moto Shareholder
pursuant to the Letter of Transmittal and Election Form to receive the Cash
Consideration, the Randgold Share Consideration, the Randgold ADS Consideration or some
combination thereof, subject to the Cash Parameter; |
| |
| | (t) | | “Election Deadline” means 4:00 p.m. (Vancouver time) on the day that is two
Business Days before the Moto Meeting; |
| |
| | (u) | | “Final Order” means the final order of the Court pursuant to section 291 of the
BCBCA, approving the Arrangement as such order may be amended by the Court |
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| | | | at any time prior to the Effective Date or, if appealed, then, unless such appeal is
withdrawn or denied, as affirmed or as amended on appeal; |
| |
| | (v) | | “Former Moto Shareholders” means the holders of Moto Shares immediately prior
to the Effective Time; |
| |
| | (w) | | “Former Moto Optionholders” means the holders of Moto Options immediately prior
to the Effective Time; |
| |
| | (x) | | “In-The-Money Amount” in respect of a Moto Option means the amount, if any, by
which US$4.47 exceeds the amount payable pursuant to such Moto Option to acquire a Moto
Share after such amount payable is converted to U.S. dollars based on the noon exchange
rate published by the Bank of Canada for Canadian dollars to U.S. dollars on the
Effective Date; |
| |
| | (y) | | “In-The-Money Moto Option” means a Moto Option, whether or not vested, with an
In-the-Money Amount; |
| |
| | (z) | | “In-The-Money Option Election” has the meaning ascribed to such term in Section
3.01(k) hereof; |
| |
| | (aa) | | “including” means including without limitation, and “include” and “includes”
each have a corresponding meaning; |
| |
| | (bb) | | “Interim Order” means the interim order of the Court, providing for, among
other things, the calling and holding of the Moto Meeting, as the same may be amended
by the Court; |
| |
| | (cc) | | “Jersey JVCo” means • , a company incorporated under the laws of Jersey
and owned, indirectly, 50% by Randgold and, indirectly, 50% by AngloGold; |
| |
| | (dd) | | “Letter of Transmittal and Election Form” means a form whereby Former Moto
Shareholders may elect, subject to the Cash Parameter, to receive the Cash
Consideration, the Randgold Share Consideration, the Randgold ADS Consideration or some
combination thereof in exchange for their Moto Shares; |
| |
| | (ee) | | “Moto” means Moto Goldmines Limited, a company existing under the BCBCA; |
| |
| | (ff) | | “Moto Meeting” means the special meeting of Moto Securityholders, including any
adjournment or postponement thereof, to be called and held in accordance with the
Interim Order to consider the Arrangement Resolution; |
| |
| | (gg) | | “Moto Options” means the outstanding options to purchase Moto Shares granted
under the Moto Stock Option Plan; |
| |
| | (hh) | | “Moto Securityholders” means, collectively, the holders of Moto Shares and Moto
Options; |
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| | (ii) | | “Moto Shareholder Rights Plan” means the Shareholder Protection Rights
Agreement dated as of February 4, 2008 between Moto and Computershare Investor Services
Inc., as rights agent, as amended from time to time; |
| |
| | (jj) | | “Moto Shares” means the issued and outstanding common shares of Moto, including
Moto Shares represented by Depositary Interests; |
| |
| | (kk) | | “Moto Stock Option Plan” means the Incentive Stock Option Plan of Moto approved
by holders of Moto Shares on May 30, 2008; |
| |
| | (ll) | | “NASDAQ” means the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotations System; |
| |
| | (mm) | | “Option Election” means the election to be made by each holder of In-The-Money
Moto Options pursuant to the Option Letter of Transmittal and Election Form to receive
either (X) cash payment equaling the In-The-Money Amount for such In-The-Money Moto
Options, or (Y) Converted Randgold Options for such In-The-Money Moto Options; |
| |
| | (nn) | | “Option Letter of Transmittal and Election Form” means a form delivered to the
holders of In-The-Money Moto Options whereby they may elect to receive either (X) a
cash payment equaling the In-The-Money Amount for such In-The-Money Moto Options, or
(Y) Converted Randgold Options for such In-The-Money Moto Options; |
| |
| | (oo) | | “Parties” means, Moto, Subco and Randgold, and “Party” means one of them; |
| |
| | (pp) | | “Plan of Arrangement” means this plan of arrangement and any amendments or
variations hereto made in accordance with Section 8.3 of the Arrangement Agreement or
this plan of arrangement or made at the direction of the Court; |
| |
| | (qq) | | “Randgold” means Randgold Resources Limited, a corporation incorporated under
the laws of Jersey; |
| |
| | (rr) | | “Randgold ADS Consideration” means 0.07061 of a Randgold ADS for each Moto
Share which a Former Moto Shareholder may elect to receive by making the appropriate
Election or by having been deemed to have made a Randgold ADS Deemed Election; |
| |
| | (ss) | | “Randgold ADS Deemed Election” means the deemed election contemplated by
Section 3.01(c) hereof; |
| |
| | (tt) | | “Randgold ADSs” means the American depositary shares of Randgold, each
representing one Randgold Share. |
| |
| | (uu) | | “Randgold Share Consideration” means 0.07061 of a Randgold Share for each Moto
Share which a Former Moto Shareholder may elect to receive by making
|
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| | | | the appropriate Election or by having been deemed to have made a Randgold Share
Deemed Election; |
| |
| | (vv) | | “Randgold Share Deemed Election” means the deemed election contemplated by
Section 3.01(d) hereof; |
| |
| | (ww) | | “Randgold Shares” means the ordinary shares in the authorized share capital of
Randgold; |
| |
| | (xx) | | “Share Exchange Ratio” means 0.07061 of a Randgold ADS or Randgold Share, as
applicable, for each Moto Share; |
| |
| | (yy) | | “Subco” means 0858065 B.C. Ltd., a corporation incorporated under the laws of
British Columbia and, at the Effective Time, to be an indirect wholly-owned subsidiary
of Jersey JVCo.; |
| |
| | (zz) | | “Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, as
amended from time to time; and |
| |
| | (aaa) | | “U.S. Tax Code” means the United States Internal Revenue Code of 1986, as
amended. |
In addition, words and phrases used herein and defined in the BCBCA and not otherwise defined
herein shall have the same meaning herein as in the BCBCA unless the context otherwise requires.
Section 1.02 Interpretation Not Affected by Headings
The division of this Plan of Arrangement into articles, sections, paragraphs and subparagraphs
and the insertion of headings herein are for convenience of reference only and shall not affect the
construction or interpretation of this Plan of Arrangement. The terms “this Plan of Arrangement”,
“hereof”, “herein”, “hereto”, “hereunder” and similar expressions refer to this Plan of Arrangement
and not to any particular article, section or other portion hereof and include any instrument
supplementary or ancillary hereto.
Section 1.03 Number, Gender and Persons
In this Plan of Arrangement, unless the context otherwise requires, words importing the
singular shall include the plural and vice versa, words importing the use of either gender shall
include both genders and neuter and the word person and words importing persons shall include a
natural person, firm, trust, partnership, association, corporation, joint venture or government
(including any governmental agency, political subdivision or instrumentality thereof) and any other
entity or group of persons of any kind or nature whatsoever.
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Section 1.04 Date for any Action
If the date on which any action is required to be taken hereunder is not a Business Day, such
action shall be required to be taken on the next succeeding day which is a Business Day.
Section 1.05 Statutory References
Any reference in this Plan of Arrangement to a statute includes all regulations made
thereunder, all amendments to such statute or regulation in force from time to time and any statute
or regulation that supplements or supersedes such statute or regulation.
Section 1.06 Currency
Unless otherwise stated, all references herein to amounts of money are expressed in lawful
money of Canada.
Section 1.07 Governing Law
This Plan of Arrangement shall be governed, including as to validity, interpretation and
effect, by the laws of the Province of British Columbia and the laws of Canada applicable therein.
ARTICLE 2
ARRANGEMENT AGREEMENT
Section 2.01 Arrangement Agreement
This Plan of Arrangement is made pursuant to, and is subject to the provisions of, the
Arrangement Agreement, except in respect of the sequence of the steps comprising the Arrangement,
which shall occur in the order set forth herein.
ARTICLE 3
ARRANGEMENT
Section 3.01 Arrangement
At the Effective Time, the following shall occur and shall be deemed to occur sequentially in
the following order without any further act or formality:
| | (a) | | the Moto Shareholder Rights Plan shall be terminated (and all rights issued
thereunder shall expire) and shall be of no further force or effect; |
| |
| | (b) | | each Moto Share held by a Dissenting Shareholder immediately prior to the
Effective Time shall be deemed to be transferred by the holder thereof, without any
further act or formality on its part, free and clear of all liens, claims and
encumbrances, to Moto for cancellation and Moto shall thereupon be obliged to |
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| | | | pay the amount therefor determined and payable in accordance with Article 4 hereof,
and the name of such holder shall be removed from the central securities register as
a holder of Moto Shares; |
| |
| | (c) | | each Former Moto Shareholder (other than a Dissenting Shareholder) whose
address on the share register of Moto is in Canada or the United States and who does
not deliver to the Depositary by the Election Deadline a duly completed and executed
Letter of Transmittal and Election Form advising of his Election shall be deemed to
have elected to receive the Randgold ADS Consideration (the “Randgold ADS Deemed
Election”); |
| |
| | (d) | | each Former Moto Shareholder (other than a Dissenting Shareholder) whose
address on the share register of Moto is not in Canada or the United States and who
does not deliver to the Depositary by the Election Deadline a duly completed and
executed Letter of Transmittal and Election Form advising of his Election shall be
deemed to have elected to receive the Randgold Share Consideration (the “Randgold Share
Deemed Election”); |
| |
| | (e) | | each Former Moto Shareholder who (i) delivers to the Depositary by the Election
Deadline a duly completed and executed Letter of Transmittal and Election Form
reflecting an Election to receive the Randgold ADS Consideration, or (ii) has been
deemed to have made a Randgold ADS Deemed Election pursuant to Section 3.01(c) hereof,
shall be entitled to receive the Randgold ADS Consideration in accordance with such
Election or such Randgold ADS Deemed Election, as the case may be; |
| |
| | (f) | | each Former Moto Shareholder who (i) delivers to the Depositary by the Election
Deadline a duly completed and executed Letter of Transmittal and Election Form
reflecting an Election to receive the Randgold Share Consideration, or (ii) has been
deemed to have made a Randgold Share Deemed Election pursuant to Section 3.01(d)
hereof, shall be entitled to receive the Randgold Share Consideration in accordance
with such Election or such Randgold ADS Deemed Election, as the case may be; |
| |
| | (g) | | each Former Moto Shareholder who delivers to the Depositary by the Election
Deadline a duly completed and executed Letter of Transmittal and Election Form
reflecting an Election to receive the Cash Consideration shall, subject to Section
3.01(h) hereof, be entitled to receive the Cash Consideration in accordance with such
Election; |
| |
| | (h) | | if the aggregate Cash Consideration elected by Former Moto Shareholders who
have duly made an Election to receive Cash Consideration for some or all of their Moto
Shares (the aggregate cash consideration elected by such Former Moto Shareholders being
referred to hereinafter as the “Requested Cash Amount”) exceeds the Cash Parameter,
then each Former Moto Shareholder electing Cash Consideration shall be entitled to
receive: |
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| | (i) | | the Pro-Rated Cash Consideration (as determined by the
following formula). |
| | | | | | | |
|
| | where: | | P = | | the “Pro-Rated Cash Consideration” |
|
| | | | T = | | the Cash Parameter |
|
| | | | R = | | the Requested Cash Amount |
|
| | | | I = | | the aggregate amount of Cash Consideration elected by such Former Moto Shareholder pursuant to a duly made Election |
| | (ii) | | the number of Randgold ADSs (if the Former Moto Shareholder’s
address on the share register of Moto is in Canada or the United States) or the
number of Randgold Shares (if the Former Moto Shareholder’s address on the
share register of Moto is not in Canada or the United States) equal to the
Residual Stock Consideration (as determined by the following formula). |
| | | | | | | |
|
| | where: | | R = | | the “Residual Stock Consideration” |
|
| | | | I = | | the aggregate amount of Cash Consideration elected by such Former Moto Shareholder pursuant to a duly made Election |
|
| | | | P = | | the Pro-Rated Cash Consideration |
|
| | | | Q = | | US$4.47, being the cash consideration per Moto Share |
|
| | | | S = | | the Share Exchange Ratio |
| | (i) | | each Moto Share held by a Former Moto Shareholder (other than a Dissenting
Shareholder) shall be transferred to Subco and in consideration therefor Subco shall
deliver or cause to be delivered the Randgold Share Consideration and the Randgold ADS
Consideration on the basis set forth in Sections 3.01(c), (d), (e), (f) and (h) hereof
and the Cash Consideration on the basis set forth in Sections 3.01(g) and (h) hereof,
subject to Sections 3.02, 3.03 and Article 5 hereof; |
| | (j) | | each Former Moto Optionholder holding In-The-Money Moto Options who does not
deliver to the Depositary by the Election Deadline a duly completed and executed Option
Letter of Transmittal and Election Form advising of his Option Election shall be deemed
to have elected to receive a cash payment equaling the |
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| | | | In-The-Money Amount for such In-The-Money Moto Options in accordance with Section
3.01(l) hereof (the “Deemed Option Election”); |
| |
| | (k) | | each Former Moto Optionholder holding In-The-Money Moto Options who delivers to
the Depositary by the Election Deadline a duly completed and executed Option Letter of
Transmittal and Election Form advising of his Option Election shall be entitled to
receive in accordance with his Option Election either (X) a cash payment equaling the
In-The-Money Amount of such In-The-Money Moto Options in accordance with Section
3.01(l) hereof (an “In-The-Money Option Election”), or (Y) Converted Randgold Options
for such In-The-Money Moto Options in accordance with Section 3.01(m) hereof; |
| |
| | (l) | | each In-The-Money Moto Option held by a Former Moto Optionholder who has made
an In-The-Money Option Election or is subject to a Deemed Option Election shall be
transferred to Moto for cancellation and, in consideration therefor, Moto shall pay the
holder of such In-The-Money Moto Options an amount in cash equal to the In-The-Money
Amount of such Moto Options; |
| |
| | (m) | | the aggregate number of Moto Options, excluding In-The-Money Moto Options that
are subject to an In-The-Money Option Election or a Deemed Option Election, held by
each Moto Optionholder and outstanding immediately prior to the Effective Time, whether
or not vested, shall be exchanged for options (each a “Converted Randgold Option”) to
acquire (on the same terms and conditions as were applicable to such Moto Options
immediately before the Effective Time under the Moto Stock Option Plan and the
agreement evidencing such Moto Options) the number (rounded down to the nearest whole
number) of Randgold Shares equal to: (A) the number of Moto Shares subject to such Moto
Options immediately prior to the Effective Time; multiplied by (B) the Share Exchange
Ratio. The exercise price per Randgold Share subject to any such Converted Randgold
Option shall be: (i) an amount (rounded up to the nearest one-hundredth of a cent)
equal to: (A) the exercise price per Moto Share subject to each such Moto Option
immediately before the Effective Time divided by (B) the Share Exchange Ratio; and (ii)
converted to, and payable in, U.S. dollars based on the noon exchange rate published by
the Bank of Canada for Canadian dollars to U.S. dollars on the Effective Date; and |
| |
| | (n) | | the Moto Stock Option Plan, and any stock option agreements or other documents
entered into by Moto in connection with the grant of Moto Options, shall be terminated
and be of no further force or effect; provided that, for greater certainty,
notwithstanding such termination, the Converted Randgold Options shall be governed by
the same terms and conditions as were formerly applicable to Moto Options pursuant to
the terminated Moto Stock Option Plan. |
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Section 3.02 Effective Time Procedures
| | (a) | | Following the receipt of the Final Order and prior to the Effective Date, Subco
shall deliver or arrange to be delivered to the Depositary certificates representing
the Randgold Share Consideration and Randgold ADS Consideration required to be
delivered to Former Moto Shareholders and the requisite Cash Consideration required to
be paid to Former Moto Shareholders in accordance with the provisions of Section 3.01
hereof, which certificates and cash shall be held by the Depositary as agent and
nominee for such Former Moto Shareholders for distribution to such Former Moto
Shareholders in accordance with the provisions of Article 5 hereof. |
| |
| | (b) | | Subject to the provisions of Article 5 hereof, on or after the Effective Date
and upon return of a properly completed Letter of Transmittal and Election Form by a
registered Former Moto Shareholder together with certificates representing Moto Shares
and such other documents as the Depositary may require, Former Moto Shareholders shall
be entitled to receive delivery of certificates representing the Randgold Shares and/or
Randgold ADSs and/or a cheque or wire transfer for the Cash Consideration to which they
are entitled pursuant to Section 3.01(i) hereof in exchange for such Moto Shares. |
| |
| | (c) | | On or after the Effective Date and upon return of a properly completed Option
Letter of Transmittal and Election Form by a registered Former Moto Optionholder who
has made an In-The-Money Option Election or is subject to a Deemed Option Election
together such evidence of ownership of In-The-Money Moto Options and such other
documents as Randgold or Subco may reasonably require, such Former Moto Optionholder
shall be entitled to receive a cheque or wire transfer for the cash consideration to
which it is entitled pursuant to Section 3.01(l) hereof. On or after the Effective
Date and upon delivery of such evidence of ownership of Moto Options and such other
documents as Randgold or Subco may reasonably require, a registered Former Moto
Optionholder who has not made an In-The-Money Option Election and has not been deemed
to have made a Deemed Option Election shall be entitled to receive the Converted
Randgold Options to which it is entitled pursuant to Section 3.01(m) hereof. |
Section 3.03 Fractional Randgold Shares/ADSs
A Former Moto Shareholder who is entitled to receive a fraction of a Randgold Share or
Randgold ADS under the Arrangement will receive cash in lieu thereof, based on a whole Randgold
Share or Randgold ADS being valued at US$63.26.
Section 3.04 Fractional Cash
Any Cash Consideration owing to a Former Moto Shareholder or cash consideration owing to a
Former Moto Optionholder shall be rounded up to the next whole cent.
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Section 3.05 Elections
| | (a) | | Former Moto Shareholders making the Election must deposit a duly completed and
executed Letter of Transmittal and Election Form with the Depositary by the Election
Deadline. Randgold and Subco will have the discretion to determine whether Letter of
Transmittal and Election Forms have been properly completed, signed and submitted and
to disregard immaterial defects in such Letter of Transmittal and Election Forms. The
decision of Randgold or Subco in respect of such matters shall be conclusive and
binding. None of Randgold, Subco or the Depositary will be under any obligation to
notify any person of any defect in a Letter of Transmittal and Election Form submitted.
A Letter of Transmittal and Election Form may not be revoked after receipt thereof by
the Depositary. A Former Moto Shareholder of record who holds Moto Shares as a
nominee, custodian, depositary, trustee or in any other representative capacity for
beneficial owners of Moto Shares may submit multiple Letter of Transmittal and Election
Forms. A Former Moto Shareholder who does not deposit a Letter of Transmittal and
Election Form with the Depositary by the Election Deadline or whose Election is
defective or incomplete shall be deemed to have made the Randgold ADS Deemed Election
or Randgold Share Deemed Election, as the case may be. Moto shall use reasonable
efforts to mail the Letter of Transmittal and Election Form to all persons who become
holders of Moto Shares during the period between the record date for the Moto Meeting
and the close of business (Vancouver time) on the date which is seven calendar days
prior to the date of the Moto Meeting and to make the Letter of Transmittal and
Election Form available to all persons who become holders of Moto Shares subsequent to
such day and no later than the Election Deadline. |
| |
| | (b) | | Holders of In-The-Money Moto Options making the Option Election must deposit a
duly completed and executed Option Letter of Transmittal and Election Form with Moto by
the Election Deadline. Randgold, Subco and Moto will have the discretion to determine
whether Option Letter of Transmittal and Election Forms have been properly completed,
signed and submitted and to disregard immaterial defects in such Option Letter of
Transmittal and Election Forms. The decision of Randgold or Subco and Moto in respect
of such matters shall be conclusive and binding. None of Randgold, Subco or Moto will
be under any obligation to notify any person of any defect in an Option Letter of
Transmittal and Election Form submitted. An Option Letter of Transmittal and Election
Form may not be revoked after receipt thereof by Moto. A holder of record of
In-The-Money Moto Options who does not deposit an Option Letter of Transmittal and
Election Form with Moto by the Election Deadline or whose Option Election is defective
or incomplete shall be deemed to have made the Deemed Option Election. |
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ARTICLE 4
DISSENT RIGHTS
Section 4.01 Dissent Rights
Pursuant to the Interim Order, holders of Moto Shares may exercise rights of dissent (“Dissent
Rights”) under Division 2 of Part 8 of the BCBCA, as modified by this Article 4, the Interim Order
and the Final Order, with respect to Moto Shares in connection with the Arrangement, provided that
the written objection to the special resolution to approve the Arrangement contemplated by Section
242 of the BCBCA must be sent to Moto by holders who wish to dissent at least two days before the
Moto Meeting or any date to which the Moto Meeting may be postponed or adjourned and provided
further that holders who exercise such rights of dissent and who:
| | (a) | | are ultimately entitled to be paid fair value for their Moto Shares, which fair
value shall be the fair value of such shares immediately before the passing by the Moto
Securityholders of the Arrangement Resolution, shall be paid an amount equal to such
fair value by Moto; and |
| | (b) | | are ultimately not entitled, for any reason, to be paid fair value for their
Moto Shares shall be deemed to have participated in the Arrangement, as of the
Effective Time, on the same basis as a non-dissenting holder of Moto Shares and shall
be entitled to receive only the Randgold ADS Consideration (if the holder’s address on
the share register of Moto is in Canada or the United States) or the Randgold Share
Consideration (if the holder’s address on the share register of Moto is not in Canada
or the United States) contemplated in Sections 3.01(c) and (d) hereof, respectively,
that such holder would have received pursuant to the Arrangement if such holder had not
exercised Dissent Rights and not made an Election, |
but in no case shall Randgold, Subco, Moto or any other person be required to recognize holders of
Moto Shares who exercise Dissent Rights as holders of Moto Shares after the time that is
immediately prior to the Effective Time, and the names of such holders of Moto Shares who exercise
Dissent Rights shall be deleted from the central securities register as holders of Moto Shares at
the Effective Time.
ARTICLE 5
DELIVERY OF CONSIDERATION
Section 5.01 Delivery of Consideration
| | (a) | | Upon surrender to the Depositary for cancellation of a certificate that
immediately before the Effective Time represented one or more outstanding Moto Shares
that were exchanged for the Randgold Share Consideration, Randgold ADS Consideration
and/or the Cash Consideration in accordance with Section 3.01 hereof, together with
such other documents and instruments as would have been
|
- 83 -
| | | | required to effect the transfer of the Moto Shares formerly represented by such
certificate under the BCBCA and the articles of Moto and such additional documents
and instruments as the Depositary may reasonably require, the holder of such
surrendered certificate shall be entitled to receive in exchange therefor, and the
Depositary shall deliver to such holder following the Effective Time, a certificate
representing the Randgold Shares and/or Randgold ADSs that such holder is entitled
to receive and/or a cheque or wire transfer for the Cash Consideration to which such
holder is entitled in accordance with Section 3.01 hereof. |
| | (b) | | After the Effective Time and until surrendered for cancellation as contemplated
by Section 5.01(a) hereof, each certificate that immediately prior to the Effective
Time represented one or more Moto Shares shall be deemed at all times to represent only
the right to receive in exchange therefor a certificate representing Randgold Shares
and/or Randgold ADSs and/or the Cash Consideration that the holder of such certificate
is entitled to receive in accordance with Section 3.01 hereof. |
Section 5.02 Lost Certificates
In the event any certificate, that immediately prior to the Effective Time represented one or
more outstanding Moto Shares that were exchanged for Randgold Shares, Randgold ADSs and/or the Cash
Consideration in accordance with Section 3.01 hereof, shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the holder claiming such certificate to be lost,
stolen or destroyed, the Depositary shall deliver in exchange for such lost, stolen or destroyed
certificate, a certificate representing Randgold Shares and/or Randgold ADSs and/or a cheque or
wire transfer in the amount of the Cash Consideration that such holder is entitled to receive in
accordance with Section 3.01 hereof. When authorizing such delivery of a certificate representing
Randgold Shares or Randgold ADSs and/or the Cash Consideration that such holder is entitled to
receive in exchange for such lost, stolen or destroyed certificate, the holder to whom a
certificate representing such Randgold Shares and/or Randgold ADSs and/or a cheque or wire transfer
in the amount of the Cash Consideration is to be delivered shall, as a condition precedent to the
delivery of such Randgold Shares, Randgold ADSs and/or cheque or wire transfer, give a bond
satisfactory to Randgold, Subco and the Depositary in such amount as Randgold, Subco and the
Depositary may direct, or otherwise indemnify Randgold, Subco and the Depositary in a manner
satisfactory to Randgold, Subco and the Depositary, against any claim that may be made against
Randgold, Subco or the Depositary with respect to the certificate alleged to have been lost, stolen
or destroyed and shall otherwise take such actions as may be required by the articles of Moto.
Section 5.03 Distributions with Respect to Unsurrendered Certificates
No dividend or other distribution declared or made after the Effective Time with respect to
Randgold Shares or Randgold ADSs with a record date after the Effective Time shall be delivered to
the holder of any unsurrendered certificate that, immediately prior to the Effective Time,
represented outstanding Moto Shares unless and until the holder of such
- 84 -
certificate shall have complied with the provisions of Section 5.01 or Section 5.02 hereof.
Subject to applicable law and to Section 5.04 hereof, at the time of such compliance, there shall,
in addition to the delivery of a certificate representing Randgold Shares and/or Randgold ADSs
and/or a cheque or wire transfer for the Cash Consideration to which such holder is thereby
entitled, be delivered to such holder, without interest, the amount of the dividend or other
distribution with a record date after the Effective Time theretofore paid with respect to such
Randgold Shares or Randgold ADSs.
Section 5.04 Withholding Rights
Randgold, Subco, Moto and the Depositary shall be entitled to deduct and withhold from all
consideration, dividends or other distributions otherwise payable to any Former Moto Shareholder or
Former Moto Optionholder such amounts as Randgold, Subco, Moto or the Depositary is required or
permitted to deduct and withhold with respect to such payment under the Tax Act, the U.S. Tax Code
or any provision of any applicable federal, provincial, state, local or foreign tax law or treaty,
in each case, as amended. To the extent that amounts are so withheld, such withheld amounts shall
be treated for all purposes hereof as having been paid to the Former Moto Shareholder or Former
Moto Optionholder, as applicable, in respect of which such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the appropriate taxing authority.
Section 5.05 Limitation and Proscription
To the extent that a Former Moto Shareholder shall not have complied with the provisions of
Section 5.01 or Section 5.02 hereof on or before the date that is six years after the Effective
Date (the “final proscription date”), then the Randgold Shares and/or Randgold ADSs that such
Former Moto Shareholder was entitled to receive shall be automatically cancelled without any
repayment of capital in respect thereof and the certificates representing such Randgold Shares
and/or Randgold ADSs and/or the Cash Consideration to which such Former Moto Shareholder was
entitled, shall be delivered to Subco by the Depositary and the share certificates shall be
cancelled by Randgold, and the interest of the Former Moto Shareholder in such Randgold Shares,
Randgold ADSs and/or the Cash Consideration to which it was entitled shall be terminated as of such
final proscription date.
ARTICLE 6
AMENDMENTS
Section 6.01 Amendments to Plan of Arrangement
| | (a) | | Randgold and Moto reserve the right to amend, modify or supplement this Plan of
Arrangement at any time and from time to time, provided that each such amendment,
modification or supplement must be (i) set out in writing, (ii) agreed to in writing by
Randgold and Moto, (iii) filed with the Court and, if made following the Moto Meeting,
approved by the Court, and (iv) communicated to the Moto Securityholders if and as
required by the Court. |
- 85 -
| | (b) | | Any amendment, modification or supplement to this Plan of Arrangement may be
proposed by Moto at any time prior to the Moto Meeting provided that Randgold shall
have consented thereto in writing, with or without any other prior notice or
communication, and, if so proposed and accepted by the persons voting at the Moto
Meeting (other than as may be required under the Interim Order), shall become part of
this Plan of Arrangement for all purposes. |
| | (c) | | Any amendment, modification or supplement to this Plan of Arrangement that is
approved by the Court following the Moto Meeting shall be effective only if: (i) it is
consented to in writing by each of Randgold and Moto; and (ii) if required by the
Court, it is consented to by the Moto Securityholders voting in the manner directed by
the Court. |
- 86 -
SCHEDULE B
TO THE ARRANGEMENT AGREEMENT
ARRANGEMENT RESOLUTION
BE IT RESOLVED THAT:
1. The arrangement (the “Arrangement”) under Section 288 of the Business Corporations Act (British
Columbia) (the “BCBCA”) involving Moto Goldmines Limited (“Moto”), all as more particularly
described and set forth in the management information circular (the “Circular”) of Moto dated
• , 2009, accompanying the notice of this meeting (as the Arrangement may be modified or
amended), is hereby authorized, approved and adopted;
2. The plan of arrangement, as it may be or has been modified or amended (the “Plan of
Arrangement”), involving Moto and implementing the Arrangement, the full text of which is set out
in Appendix C to the Circular, is hereby approved and adopted;
3. The arrangement agreement among Moto, Subco and Randgold, dated August 5, 2009, (the
“Arrangement Agreement”) and all the transactions contemplated therein the actions of the directors
of Moto in approving the Arrangement and the actions of the officers of Moto in executing and
delivering the Arrangement Agreement and any amendments thereto are hereby ratified and approved;
4. Notwithstanding that this resolution has been passed (and the Arrangement adopted) by the
securityholders of Moto or that the Arrangement has been approved by the Supreme Court of British
Columbia, the directors of Moto are hereby authorized and empowered, without further notice to, or
approval of, the securityholders of Moto:
| | (a) | | to amend the Arrangement Agreement or the Plan of Arrangement to the extent
permitted by the Arrangement Agreement or the Plan of Arrangement; or |
| | (b) | | subject to the terms of the Arrangement Agreement, not to proceed with the
Arrangement; and |
5. Any one or more directors or officers of Moto is hereby authorized, for and on behalf and in
the name of Moto, to execute and deliver, whether under corporate seal of Moto or not, all such
agreements, forms waivers, notices, certificate, confirmations and other documents and instruments
and to do or cause to be done all such other acts and things as in the opinion of such director or
officer may be necessary, desirable or useful for the purpose of giving effect to these
resolutions, the Arrangement Agreement and the completion of the Plan of Arrangement in accordance
with the terms of the Arrangement Agreement, including:
| | (a) | | all actions required to be taken by or on behalf of Moto, and all necessary
filings and obtaining the necessary approvals, consents and acceptances of appropriate
regulatory authorities; and |
- 87 -
| | (b) | | the signing of the certificates, consents and other documents or declarations
required under the Arrangement Agreement or otherwise to be entered into by Moto; |
such determination to be conclusively evidenced by the execution and delivery of such document,
agreement or instrument or the doing of any such act or thing.
- 88 -
SCHEDULE C
TO THE ARRANGEMENT AGREEMENT
KEY REGULATORY APPROVALS
1. Competition Act
| | | If the transaction contemplated by this Agreement is a notifiable transaction pursuant to
Part IX of the Competition Act, (i) the issuance of an Advance Ruling Certificate provided
that such Advanced Ruling Certificate has not been rescinded prior to the Outside Date; or
(ii) (A) the expiry or termination of the waiting period under section 123 of the
Competition Act, or waiver of the notification requirement pursuant to section 113(c) of
that Act, and (B) the Commissioner of Competition advising the Parties, in writing, that she
has no intention to file an application under Part VIII of the Competition Act, in
connection with the transactions contemplated by this Agreement and such advice has not been
rescinded prior to the Outside Date |
2. Australian FIRB Approvals
| | | If and to the extent required, written notification by the Treasurer of the Commonwealth of
Australia under the Foreign Acquisition and Takeover Act (1975) (Cth) (“FATA”) that the
Australian Commonwealth Government has no objection to the Arrangement under its foreign
investment policy or under FATA. |
- 89 -
SCHEDULE D
TO THE ARRANGEMENT AGREEMENT
KEY THIRD PARTY CONSENTS
None.
- 90 -
DISCLOSURE LETTER
August 5, 2009
| | | |
| To:
| | Randgold Resources Limited (“Randgold”) |
| |
| And To:
| | 0858065 B.C. Ltd. (“Subco”) |
| |
| From:
| | Moto Goldmines Limited (“Moto”) |
Dear Sirs/Mesdames:
Re: Arrangement Agreement
This letter, together with the attached schedules, constitutes the Moto Disclosure Letter referred
to and defined in the arrangement agreement (the “Arrangement Agreement”) among Moto, Subco and
Randgold dated as of the date hereof.
The purpose of this Disclosure Letter is to set forth in the attached schedules the disclosure of
qualifications, modifications or exceptions to certain representations and warranties of Moto
contained in the Arrangement Agreement. This Disclosure Letter is deemed to constitute an integral
part of such agreement.
The numbering of the attached schedules corresponds to the same section or subsection in the
Arrangement Agreement. For greater clarity, any introductory language and headings in this
Disclosure Letter are inserted for convenience of reference only and will not create or be deemed
to create a different standard for disclosure than the language set forth in the Arrangement
Agreement. Information disclosed in any schedule of this Disclosure Letter shall be deemed
disclosed with respect to such other sections or subsections of the Arrangement Agreement or this
Disclosure Letter, as long as the relevance of such disclosure to such other section or subsection
of the Arrangement Agreement is reasonably apparent.
No item in this Disclosure Letter relating to any possible breach or violation of any agreement,
law or regulation shall be construed as an admission or indication that any such breach or
violation exists or has actually occurred, and nothing in this Disclosure Letter constitutes an
admission of any liability or obligation of Moto to any third party or shall confer or give to any
third party any remedy, claim, liability, reimbursement, cause of action, or other right.
This Disclosure Letter is qualified in its entirety by reference to the provisions of the
Arrangement Agreement and is not intended to constitute, and shall not be construed as
constituting, any representation, warranty, undertaking, assurance, covenant, indemnity, guarantee
or other commitment of any nature whatsoever not expressly given in the Arrangement Agreement.
All capitalized terms used in this Disclosure Letter shall have the meaning attributed to such term
in the Arrangement Agreement, unless otherwise stated, and all references to dollars, unless
otherwise specifically indicated, are to Canadian dollars. This Disclosure Letter shall be
governed by and construed in all respects in accordance with the laws of the Province of British
Columbia and the federal laws of Canada.
| | | | | |
| | MOTO GOLDMINES LIMITED
| |
| | | /s/ Xxxxxx X. Xxxxxxx |
| | | | |
| | | Name: | Xxxxxx X. Xxxxxxx | |
| | | Title: | President and Chief Operating
Officer | |
| |
The
Disclosure Letter is accepted and agreed this 5th day of August, 2009.
| | | | | |
| | Randgold Resources Limited
| |
| | | /s/ X. X. Xxxxxxx |
| | | | |
| | | Name: | Xx. X. X. Xxxxxxx | |
| | | Title: | Chief Executive Officer | |
| |
| | 0858065 B.C. Ltd.
| |
| | | /s/ Xxxxxx Xxxxxxxxxxxx |
| | | | |
| | | Name: | Xxxxxx Xxxxxxxxxxxx | |
| | | Title: | Director | |
- 2 -
Data Room Information
[Provided separately]
- 3 -
Schedule 3.1(c)
Organization and Qualification
Not applicable.
- 4 -
Schedule 3.1(e)
No Violation
The following notes, bonds, mortgages, indentures, contracts, licenses, franchises or Permits
contain change of control provisions, rights of first offer or first refusal or similar provisions
that may be triggered by the consummation by Moto of the Arrangement:
The Employment Contracts listed in Schedule 5.5.
The GICC Agreement referred to in Schedule 3.1(f).
The Assignment of OKIMO Receivable referred to in Schedule 3.1(t).
The Hay Street Lease referred to in Schedule 3.1(s).
- 5 -
Schedule 3.1(f)
Capitalization
| • | | The Offer of Appointment as Chairman of Moto to Xxx Xxxxxx Xxxxx (“Sir Xxx”) dated 22 July
2005 (the “Jonah Retainer”) appointing Sir Xxx as Non-Executive Chairman of the Moto board of
directors pursuant to which Sir Xxx was granted the right, whenever Moto makes a material
issuance of Moto Shares, to receive options to acquire Moto Shares to maintain his effective
non-dilutable interest in Moto existing at that time of 5%. |
| • | | Employment Agreement between Kibali (then known as Borgakim Mining sprl) and Xxxx Xxxxxxx
dated 18 June 2008 which provides that “The Company shall endeavour to have stock options in
its ultimate parent entity, Moto Goldmines Limited (“Moto”) granted to the Employee. The
number of options that may be granted will be determined after your initial 12 months service
period. |
- 6 -
Schedule 3.1(i)
Ownership of Subsidiaries
The following table sets out the subsidiaries of Moto and details as to shareholdings of each such
subsidiary.
| | | | | | | |
| | | | | Number of Shares | | Percentage |
| Name of Material Subsidiary | | Shareholder(s) | | held | | Shareholding |
| Moto Goldmines Australia Pty Ltd (ACN
| | Moto | | 163,279,939 | | 100% |
| 004 313 062)1
| | | | ordinary shares | | |
|
| | | | | | |
| Border Energy Pty Ltd (ACN 080 140
| | Moto Goldmines Australia Pty Ltd | | 1,000,001 ordinary | | 100% |
| 987) (“Border”)1,2
| | | | shares | | |
|
| | | | | | |
| Westmount Resources NL (ACN 061 045
| | Moto Goldmines Australia Pty Ltd | | 5 ordinary shares | | 100% |
| 396)
| | | | | | |
|
| | | | | | |
| Border Resources NL (ACN 009 232 400)
| | Moto Goldmines Australia Pty Ltd | | 39,725,322 ordinary | | 100% |
|
| | | | shares | | |
|
| | | | | | |
| Kibali Goldmines s.p.r.l1,3
| | Border | | 7,000,000 | | 70% |
| (formerly Borgakim Mining sprl)
| | L’Office des Mines d’Or de | | 3,000,000 | | 30% |
|
| | Kilo- Moto (“OKIMO”) | | | | |
|
| | | | | | |
| Amani Gold sprl
| | Border | | 199 | | 99.5% |
|
| | Xxxx Xxxxxxx | | 1 | | 0.5% |
|
| | | | | | |
| Kibali Gold sprl
| | Border | | 199 | | 99.5% |
|
| | Xxxx Xxxxxxx | | 1 | | 0.5% |
|
| | | | | | |
| Rambi Mining sprl
| | Border | | 199 | | 99.5% |
|
| | Xxxx Xxxxxxx | | 1 | | 0.5% |
|
| | | | | | |
| Gorumbwa Mining sprl
| | Border | | 199 | | 99.5% |
|
| | Xxxx Xxxxxxx | | 1 | | 0.5% |
|
| | | | | | |
| Blue Rose sprl
| | Border | | 999 | | 99.9% |
|
| | Xxxx Xxxxxxx | | 1 | | 0.1% |
|
| | | | | | |
| Tangold sprl
| | Border | | 999 | | 99.9% |
|
| | Xxxx Xxxxxxx | | 1 | | .01% |
|
| | | | | | |
| Border Energy East Africa Pty Limited
| | Border | | 99 | | 99% |
|
| | Xxxx Xxxxxxx | | 1 | | 1% |
|
| | | | | | |
| | |
| 1 | | Is a material subsidiary of Moto. |
| |
| 2 | | Pursuant to the OKIMO Assignment, Moto granted Orgaman the right to purchase, for no
additional consideration, 100% of Border should Moto abandon all of its equity interest in the Moto
Gold Project. |
| |
| 3 | | OKIMO’s rights in respect of its ownership interest in Kibali are set out in the
contract of association (the “Joint Venture Agreement”) relating to the constitution of a joint
company for the development of the Moto Gold project dated 10 March 2009 between OKIMO, Moto,
Border and Kibali and in the Articles of Kibali. |
- 7 -
Schedule 3.1(n)
Minute Books
Moto
Minutes of the meetings of the directors of Moto held after May 31, 2009 have not yet been drafted
and approved.
Minutes of a meeting of the directors of Moto held on June 18, 2007 have not been prepared.
Minutes of meetings of the directors of Moto held on November 9, 2006, October 12, 2006 and August
10, 2006 are missing, however, they are recorded as approved at the February 4, 2007 meeting of the
directors of Moto.
The minute books for Moto do not contain any minutes of meetings held or resolutions passed by
shareholders prior to May 18, 2005 and by directors prior to July 27, 2005, which relates to the
period prior to the business combination between Moto Goldmines Limited of Australia and King
Products Inc.
Kibali
No representation or warranty is given as to the status of the minute books of Kibali.
- 8 -
Schedule 3.1(o)
No Undisclosed Liabilities
Engagement Letter dated February 3, 2009 addressed to Xxxxxx Xxxxxxx s.e.n.c.r.l.
Letter of Credit from Banque Commerciale du Congo to the benefit of OFIDA (USD 170,000) dated 2
February 2009
Letter of Credit from Banque Commerciale du Congo to the benefit of OFIDA (USD 15,273.49) dated 6
October 2008
- 9 -
Schedule 3.1(q)
Litigation
None.
- 10 -
Schedule 3.1(r)
Taxes
No representation or warranty is given with respect to the filing of tax Returns by Moto’s
subsidiaries in the DRC.
Border Energy East Africa Pty Limited has not yet filed its first tax return and is applying for an
extension of the time by which the tax return must be filed.
A taxable foreign exchange gain was crystallised when Moto Goldmines Australia Pty Ltd (as lender)
and Kibali (then known as Borgakim Mining sprl) (as borrower) entered into the financing agreement
dated 10 March 2009 (document no. 11.7.03 in the Data Room Information and listed on Schedule
3.1(t)). The tax payable in connection with this gain has not yet been determined.
- 11 -
Schedule 3.1(r)(iv)
Liens for Unpaid Taxes
None.
- 12 -
Schedule 3.1(s)
Property
Concessions
The Concessions are: XX Xx 00000; PE N° 11467; XX Xx 00000; XX Xx 00000; XX Xx 00000; XX Xx 00000;
XX Xx 00000; XX 0000; XX 0000; and XX 0000. The Concessions are registered in the Mining Registry
(as defined in the DRC Mining Code and sometimes called CAMI) in the name of Kibali.
Lands
Lease dated of between Cleanair Engineering Pty
Ltd and Taronga Nominees Pty Ltd, as landlord, and Moto Goldmines Australia Ltd, as tenant, for
office premises at Xxxxx 0, Xxxxx Xxxxx, 00 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxxx for a five year
term commencing 1 October 2007 and two five-year renewal terms (the “Hay Street Lease”).
Sub-lease dated 6 March 2008 between Cleanair Engineering Pty Ltd and Taronga Nominees Pty Ltd, as
landlord, Moto Goldmines Australia Ltd, as tenant, and Syndicated Metals Limited, as sub-tenant, of
a portion of the office premises at Xxxxx 0, Xxxxx Xxxxx, 00 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx Xxxxxxxxx
for a three year term commencing 17 December 2007 and a renewal term of 1 year and 288 days
expiring 29 September 2012.
Lease dated 27 April 2007 between CEDIAT Sprl, as lessor, and Borgakim Mining Sprl, as lessee, for
office premises in Kinshasa/Gombe, Boulevard du 30 Juin no 124, DRC for a two year term commencing
1 May 2007 and ending 30 April 2009, renewable for subsequent two- year terms.
Lease dated 24 June 2008 between Madame Liliane Lungungu, as lessor, and La Société Borgakim SPRL,
as lessee, for an apartment at rue Bandoma, numéro 6, Quartier GB, Commune de Ngaliema, Kinshasa,
DRC for a one year term commencing 30 June 2008, renewable annually.
Tenancy Agreement dated 20 January 2007 between Xxxx X. Muduuli, as landlady, and Moto Goldmines
Limited, as tenant, and Mr. Louis Watum and Xx. Xxxxxx Mitima, as guarantors, for residential
premises known as Xxxx Xx. 00, Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxx, Xxxxxx for a term of four years
commencing 1 February 2007.
Tenancy Agreement dated 15 October 2008 between Apolo Hotel Corporation Limited, as landlord, and
Border Energy East Africa Pty Ltd, as tenant, of property known as GoldenLeaves Residence in
Kampala, Unit no. 101, Uganda for a term of three years less one day commencing 15 October 2008.
Rental Agreement dated 19 May 2007 between STC sprl (Société des Travaux et de Construction), as
lessor, and Motogoldmines Louis Watum, as lessee, of villa no. 9, Cité Belle
- 13 -
Vue, l’avenue OAU no. 7, Quartier GB, Commune de Ngaliema, Kinshasa, DRC for an indefinite term
commencing 1 June 2008.
Letter dated 3 March 2009 from Borgakim Mining sprl to Monsieur Achour Xxxxx Xxxxxx, Administrateur
Directeur STC sprl cancelling the rental agreement referred to in the immediately preceding item,
effective 1 June 2009.
- 14 -
Schedule 3.1(t)
Material Contracts
Moto 2008 Stock Option Plan
Moto Share Rights Plan
Jonah Retainer referred to in Schedule 3.1(f)
Employment Contracts with Xxxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxxx Watum referred to in Schedule 5.5
ATF
The GICC Agreement referred to in Schedule 3.1(f).
The Moto Warrant Agreement referred to in Schedule 3.1(f).
Inter-Group Loan Assignment Agreement dated January 30, 2008 between Orgaman, Moto, Border Energy
PTY LTD and the Subsidiaries.
Agreement dated 31 December 2007 between Orgaman, Border and Moto for the acquisition of Orgaman’s
interest in the DRC subsidiaries
OKIMO Assignment
Letter of Guarantee dated February 3, 2009 addressed to Xxxxxx Blaikie s.e.n.c.r.l.
Legal Assistance Agreement dated January 20, 2009 between OKIMO and Xxxxxx Xxxxxxx s.e.n.c.r.l.
Memorandum for the Supply of Security Services by the Public Security Services dated March 11, 2009
between Borgakim Mining SPRL and the Government of the DRC
Memorandum of Understanding for the Supply of Security Services by the Public Security Services of
the DRC dated March 6, 2009 between Borgakim Mining SPRL and the Government of the DRC
The Joint Venture Agreement
Contract of Association Relating to the Constitution of a Joint Company for the Development of the
Moto Gold Project dated March 10, 2009 between L’Office Des Mines D’Or De Kilo-Moto and Moto
Goldmines Limited, Border Energy PTY Limited and Borgakim Mining SPRL
Termination Agreement dated March 10, 2009 between L’Office Des Mines D’Or De Kilo-Moto and
Borgakim Mining SPRL
- 15 -
Letter of Credit from Banque Commerciale du Congo to the benefit of OFIDA (USD 170,000) dated 2
February 2009
Letter of Credit from Banque Commerciale du Congo to the benefit of OFIDA (USD 15,273.49) dated 6
October 2008
Credit line from Banque Commerciale du Congo dated 30 January 2009
Financing Agreement dated March 10, 2009 between Borgakim Mining SPRL and Moto Goldmines Australia
PTY Limited
Financing Agreement dated March 10, 2009 between L’Office Des Mines D’Or De Kilo-Moto and Borgakim
Mining SPRL
The agreements listed as items 10.1.2.01 to 10.1.2.06 on the index of the Data Room Information
The Okimo Financing Agreement between OKIMO and Borgakim listed as item 11.1.06 on the index of the
Data Room Information
Subscription for Shares dated January 30, 2008 between Border Ltd., Moto Goldmines Australia
Limited and Moto Goldmines Limited
Underwriting Agreements for prior issuances of shares of Moto
Drilling Contracts located in section 10.6 of the Data Room Information
Road construction contract for road to Moto Gold Project
Tripartite Agreement
- 16 -
Schedule 3.1(u)
Permits
None.
- 17 -
Schedule 3.1(x)
Environmental
As the current titleholder of the Concessions, Kibali will be liable to the DRC State for any
damage to the environment resulting from its breach of the requisite environmental plans or for a
breach of the DRC Mining Code.
Kibali may under the terms of the DRC Mining Code be liable for Environmental Liabilities in
respect of previous work undertaken on the Concessions by OKIMO. In addition, as envisaged in the
Feasibility Study, Kibali will incur Environmental Liabilities in the ordinary course of carrying
on the Moto Gold Project.
- 18 -
Schedule 3.1(y)
Mineral Reserves and Resources
In common with other DRC operations, artisanal and small scale miners may work in the areas covered
by the Concessions not in compliance with the Mining Code.
- 19 -
Schedule 3.1(aa)
Employee Benefits
Moto 2008 Stock Option Plan and the individual stock option agreement listed in the Data Room
Information. The material terms of the Moto 2008 Stock Option Plan are summarized in the
management information circular of Moto dated April 29, 2009.
Under the rule governing pension plans, referred to as “superannuation” in Australia, an employer
in Australia is required to make a minimum contribution to an Australian resident employee’s
nominated superannuation fund, which acts like a defined contribution plan. Moto is required to
make a minimum contribution of 9% of its Australian resident employees’ gross annual salary,
however, an employee is entitled to elect a higher contribution and Moto currently contributes at
the rate of 10% for all its Australian employees.
The Jonah Retainer referred to in Schedule 3.1(f).
All Perth office full-time employees of Moto have personal life insurance and income protection
insurance paid by Moto. These are personal policies paid by Moto and Moto is not entitled to
copies of these policies.
- 20 -
Schedule 3.1(bb)(i)
Labour and Employment
[Provided separately]
- 21 -
Schedule 3.1(bb)(ii)
Written Employment Contracts with Salaried Employees
The employees listed in Schedule 5.5.
Xxxxxx Xxxxx
Apollo Lumala
Xxxxxxx Xxxxxxxxxx
X.X. Xxxxxxxxxx
Xxxx Xxxxxxx
Xxxxxx Xxxxxx
Kaviera Dhego
Xxxxxx Mitima
Xxxx Xxxxxxx
Xxxxxx Xxxxxx van Xxxxxxx
Xxxxx Agotre
Xxxx Xxxxxxxx
- 22 -
Schedule 3.1(bb)(iii)
Labour Matters
Kibali Goldmines s.p.r.l. (formerly Borgakim Mining sprl) (“Kibali”), the company undertaking the
Moto Gold Project, is required by DRC law to have a union if it has more than 30 employees. Kibali
has one union. The mandate of the union is to ensure compliance with the DRC labour code (for
example, with respect to pay rates), but the union does not have the right to bargain collectively
on behalf of workers and there is no collective agreement. Workers engaged in the Moto Gold Project
have individual agreements with Borgakim Mining sprl, which are in process of being transferred
into the name of Kibali; the union is not a signatory to the employment contracts. There was an
illegal work stoppage for a brief period in late April over the currency in which wages are paid,
however, the workers were ordered back to work and returned to work without incident.
- 23 -
Schedule 3.1(ee)
Related Party Transactions
The Jonah Retainer referred to in Schedule 3.1(f).
Agreement dated 31 December 2007 between Orgaman, Border and Moto for the acquisition of Orgaman’s
interest in the DRC subsidiaries
Loan Assignment Agreement dated January 30, 2008 between Orgaman, Moto, Border and the
Subsidiaries.
OKIMO Assignment
Tripartite Agreement
- 24 -
Schedule 3.1(hh)
Rights of Other Persons
Moto has granted Orgaman the right to purchase, for no additional consideration, 100% of Border
should Moto abandon all of its equity interest in the Moto Gold Project.
OKIMO has certain rights in respect of Kibali as set out in the Joint Venture Agreement and in the
Articles of Kibali.
- 25 -
Schedule 3.1(jj)
Broker, etc., Fees Payable
Moto has agreed with BMO Xxxxxxx Xxxxx Inc. (“BMO”), pursuant to a letter agreement dated March 28,
2009 (the “Engagement”), to pay BMO the following fees:
(a) Work Fee – No Work Fee will be paid for the first three months of the engagement. At
the discretion of Moto, a further work fee will be considered with respect to any work to be
conducted by BMO after such date. The Work Fee will be credited against any Completion Fee
which becomes payable under the Engagement.
(b) Opinion Fee - A fee of $150,000 for the first Opinion, payable in cash on the date that
BMO advises Moto that it is prepared to deliver such requested Opinion. In the event that
BMO is required to update the Opinion in respect of the potential transaction a maximum
charge of $10,000 shall be made. In the event of competing offers a maximum fee of $100,000
shall be made in respect of the first Opinion delivered respect of such transaction and a
maximum of $10,000 for each update required.
(c) Announcement Fee - A fee of $1 million, payable upon the earlier to occur of (i) the
execution by Moto of a binding agreement in respect of a Transaction (as such term is
defined in the Engagement), or (ii) the public announcement of a Transaction recommended by
Moto’s Board of Directors. The announcement fee will be credited against any Completion Fee
which becomes payable under the Engagement.
(d) Completion Fee - If, during the term of the engagement of BMO or within a period of 12
months following termination of the Engagement by Moto, a Transaction is completed or Moto
announces, or enters into an agreement in respect of, a Transaction which is subsequently
completed, Moto will pay BMO a completion fee based on the Transaction Value (as defined
therein) as follows:
— up to $4.25 per Moto share: 0.75% of Transaction Value; plus
— 2% of any incremental Transaction Value from $4.26 to $5.25 (inclusive) per Moto
share; plus
— 3% of any incremental Transaction Value above $5.25 per Moto share.
The minimum fee payable will be $2.5 million. The maximum fee payable will be $10 million.
- 26 -
Schedule 3.1(kk)
Insurance
The insurance policies identified as items 18.1.01 to 18.1.03 in the index to the Data Room
Information.
Moto failed to provide notice within the time required under its directors and officers liability
insurance policy with American Home Assurance Company (the “Insurer”) in respect of the issuance of
Moto Shares pursuant to the short form prospectus dated April 20, 2009. Notice was subsequently
given and the Insurer has accepted cover.
- 27 -
Schedule 5.1(c)
Actions Not in the Ordinary Course of Business
None.
- 28 -
Schedule 5.1(j)
Approvals
None.
- 29 -
Schedule 5.5
Employment Agreements
Xxxx Xxxxxxx
In accordance with the Offer of Employment as Chief Financial Officer of Moto to Xxxx Xxxxxxx dated
16 August 2006, Xx. Xxxxxxx is entitled to receive twelve months’ remuneration in the event that a
third party acquires a majority of the outstanding Moto Shares and Xx. Xxxxxxx is terminated
without cause.
Reference
is made to Employment Contracts made between Moto and each of the named individuals
below. The date of the relevant Employment Contract is set forth following the name of each
individual.
Xxxx Xxxxxxx (November 6, 2008)
Xxxxxx Xxxxxxx (November 6, 2008)
Louis Watum (November 6, 2008)
If the employee gives written notice within three months from the date of a Change of Control or
Change of Employment that happens within two years after a Change of Control (as such terms are
defined in the employee’s Employment Contract), or if the employee’s employment is terminated
within two years of a Change of Control, the employee’s options shall be deemed to have vested
immediately prior to the effective date of resignation and become exercisable in accordance with
the provisions of the 2008 Moto Stock Option Plan and the employee is entitled to severance of two
years’ annual base salary payable within ten days of the effective date of the termination of
employment.
Xxxx Xxxxxxxx (November 1, 2008)
If the employee gives written notice within three months from the date of a Change of Control or
Change of Employment (as such terms are defined in the employee’s Employment Contract), or if the
employee’s employment is terminated within one year of a Change of Control, the employee’s options
shall be deemed to have vested immediately prior to the effective date of resignation and become
exercisable in accordance with the provisions of the 2008 Moto Stock Option Plan and the employee
is entitled to a severance payment of $300,000 (subject to indexing of 10% per year each year from
the date of the Employment Contract) payable within ten days of the effective date of the
termination of employment.
Xxxxxx Xxxxxx (November 6, 2008)
Xxxx Xxxxxxxx (November 5, 2008)
If the employee gives written notice within three months from the date of a Change of Control or
Change of Employment that happens within two years of a Change of Control (as such terms are
defined in the employee’s Employment Contract), or if the employee’s employment is terminated
within two years of a Change of Control, the employee’s options shall be deemed to
- 30 -
have vested immediately prior to the effective date of resignation and become exercisable in
accordance with the provisions of the 2008 Moto Stock Option Plan and the employee is entitled to a
severance payment of one year’s annual base salary payable within ten days of the effective date of
the termination of employment.
Xxxxxxx Xxxxxx (August 18, 2008)
Xxxxx Xxxxxx (September 15, 2008)
Xxx Xxxxxxx (April 21, 2008)
If the employee gives written notice within six weeks from the date of a Change of Control or
Change of Employment that happens within one year of a Change of Control (as such terms are defined
in the employee’s Employment Contract), or if the employee’s employment is terminated within one
year of a Change of Control, the employee is entitled to a severance payment of three months’ base
salary plus one additional week of base salary for each completed year of service. In the case of
Xx. Xxxxxx, the employee’s options shall be deemed to have vested immediately prior to the
effective date of resignation and become exercisable in accordance with the provisions of the 2008
Moto Stock Option Plan payable within ten days of the effective date of the termination of
employment.
Under the Employment Contracts:
“Change of Control” means any of the following:
| (a) | | any change in direct or indirect ownership of the voting shares of the Company and/or
Convertible Securities as a result of or following which an Acquiror beneficially owns,
directly or indirectly, or exercises control or direction over shares of the Company and/or
Convertible Securities such that, assuming only the conversion, exchange or exercise of the
Convertible Securities beneficially owned or controlled by the Acquiror, that would entitle
the holders thereof would be entitled to cast more than 50% of the votes attaching to all
shares of the Company that may be cast to elect directors of the Company; |
| |
| (b) | | the acquisition by any third party of all or substantially all of the assets of the Company; |
| |
| (c) | | a merger of the Company with or into one or more other companies, corporations, trusts or
other entities (other than subsidiaries of, or trusts or other entities controlled by, the
Company): |
| | (i) | | where the members of the board of directors of Moto immediately prior to the
consummation of the merger do not constitute a majority of the directors, trustees or
other governing body of the company, corporation, trust or other entity surviving or
continuing from the merger (the “continuing entity”); |
| |
| | (ii) | | that results in the securityholders of the parties to the merger other than the
Company owning, directly or indirectly, securities of the continuing entity that
entitle the holders thereof to cast more than 50% of the votes attaching to all |
- 31 -
| | | | securities of the continuing entity that may be cast to elect its directors,
trustees or other governing body; or |
| |
| | (iii) | | that has been designated by resolution of the directors of the Company as a
Change of Control prior to the consummation of the merger; and |
“Change of Employment” means any of the following, following a Change of Control:
| (a) | | a change (other than a change that is clearly consistent with a promotion) in the Employee’s
position or duties, responsibilities (including, without limitation, to who the Employee
reports and who reports to the Employee), title or office in effect immediately prior to the
Change of Control, which includes if the Employee is removed or not re- elected or
re-appointed to any such position or office; |
| |
| (b) | | a reduction of the Employee’s remuneration or benefits in effect immediately prior to the
Change of Control, or any failure to increase the Employee’s remuneration or benefits in a
manner consistent with practices in effect immediately prior to the Change of Control or with
practices implemented subsequent to the Change of Control, whichever is more favourable to the
Employee; |
| |
| (c) | | a change in the Employee’s principal employment location other than as expressly contemplated
in the Employment Contract; |
| |
| (d) | | a determination, made in good faith by the Employee, that as a result of the Change of
Control or any action or event thereafter, the Employee’s status or responsibility in the
Company or with respect to its subsidiaries has been diminished or the Employee is being
effectively prevented from carrying out the Employee’s duties and responsibilities as they
existed immediately prior to the Change of Control. |
In addition, the expressions “acquisition” and “merger” include, as the context may require, a
transaction or series of transactions by way of takeover bid, purchase, exchange, lease, statutory
amalgamation, statutory merger, reorganization, consolidation, statutory arrangement,
recapitalization, liquidation or other business combination.
Xxx Jonah, KBE
Jonah Retainer referred to in Schedule 3.1(f).
- 32 -
Schedule 7.6.2
Indemnification
Each of the directors and officers and former directors and officers of Moto is a party to an
Indemnification Agreement substantially in the following form:
INDEMNITY AGREEMENT
THIS AGREEMENT is made , 2007
BETWEEN:
Moto Goldmines Limited, a corporation incorporated under the
laws of British Columbia and with its chief executive office at 00
Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxx Xxxxxxxxx, 0000
(the “Corporation”)
AND:
•, a director and/or senior officer of the
Corporation with an address •
(the “Director”)
WHEREAS:
| A. | | The Articles of the Corporation provide that the Corporation shall indemnify directors and
officers to the fullest extent permitted by the Business Corporations Act (British Columbia)
(the “Act”); and |
| |
| B. | | The Corporation has agreed to enter into this Agreement with the Director to induce the
Director to act or continue to act as a director of the Corporation. |
NOW, THEREFORE, in consideration of the premises and the Director’s service or continued service as
a director of the Corporation the parties covenant and agree as follows:
For the purposes of this Agreement, the following terms have the following meanings:
| 1.1. | | “associated corporation” means a corporation or entity (including a partnership, trust, joint
venture or other unincorporated entity) of which the Director is or was or will be a director
or officer (or holds or held or will hold an equivalent position): |
- 33 -
| | 1.1.1. | | at a time when such corporation or entity was affiliated (within the meaning of the
Act) with the Corporation; or |
| |
| | 1.1.2. | | at the request of the Corporation. |
| 1.2. | | “Document” includes any document or record of the Corporation accessed pursuant to section
9.1 and any document or record regarding or relating to the Corporation or an associated
corporation that was given to the Director during the time he or she was a director or officer
of the Corporation or an associated corporation; |
| |
| 1.3. | | “eligible penalty” means a judgment, penalty or fine awarded or imposed in, or an amount paid
in settlement of, an eligible proceeding; |
| |
| 1.4. | | “eligible proceeding” means a proceeding in which the Director or any of the heirs and
personal or other legal representatives of the Director, by reason of the Director being or
having been a director or officer of, or holding or having held a position equivalent to that
of a director or officer of, the Corporation or an associated corporation: |
| | 1.4.1. | | is or may be joined as a party, or |
| |
| | 1.4.2. | | is or may be liable for or in respect of a judgment, penalty or fine in, or expenses
related to, the proceeding; |
| 1.5. | | “expenses” includes, without limitation, reasonable and actually incurred costs, charges and
expenses, including actual legal and other fees, and out of pocket expenses, including those
incurred in attending discoveries, trials, hearings and meetings to prepare for those
proceedings, and whether incurred before or after the date of this Agreement, but “expenses”
does not include any eligible penalty; and |
| |
| 1.6. | | “proceeding” includes any legal proceeding or investigative action, whether current,
threatened, pending or completed. |
| |
| 2. | | INDEMNITY |
| |
| 2.1. | | Full Indemnity. The Corporation shall, to the fullest extent permitted by applicable
law, immediately indemnify and save harmless the Director in respect of all eligible penalties
and eligible proceedings and expenses related thereto. |
| |
| 2.2. | | Obligation to Indemnify. Without limiting section 2.1, but subject to section 4, the
Corporation shall: |
| | 2.2.1. | | indemnify the Director against all eligible penalties to which the Director is or may
be liable; and |
| |
| | 2.2.2. | | after the final disposition of an eligible proceeding, pay the expenses actually and
reasonably incurred by the Director in respect of that proceeding, regardless of |
- 34 -
| | | | whether the Director was successful, on the merits or otherwise, in the outcome of
the proceeding. |
| 2.3. | | Extension of Indemnity. This indemnity shall extend to cover expenses related to: |
| | 2.3.1. | | investigations, inquiries and hearings, whether or not charges have been laid, a
claim has been made, or an action or proceeding has been commenced against the
Corporation, an associated corporation or the Director; and |
| |
| | 2.3.2. | | any situation in which the Director is compelled by authorities or requested by the
Corporation or by an associated corporation to participate in an investigation,
inquiry, hearing, action or proceeding, |
| | | in any case whether occurring before or after the date of this Agreement. |
| |
| 2.4. | | Presumptions / Knowledge. For the purposes of the indemnity provided under this
Agreement: |
| | 2.4.1. | | The Director shall be deemed, subject only to compelling evidence to the contrary, to
have acted in good faith and in the best interests of the Corporation or associated
corporation, as the case may be, and the Corporation shall have the burden of
establishing the absence of good faith or best interests of the Corporation or
associated corporation, as the case may be; |
| |
| | 2.4.2. | | The knowledge and/or actions, or failure to act, of any other director, officer,
agent or employee of the Corporation or any associated corporation will not be imputed
to the Director for purposes of determining the right to indemnification under this
Agreement; and |
| |
| | 2.4.3. | | The Corporation shall have the burden of establishing that any expense it wishes to
challenge is not reasonable. |
| 2.5. | | Approvals. To the extent that prior court or other approval is required in
connection with any indemnification obligation of the Corporation under this Agreement, the
Corporation shall seek and use all reasonable efforts to obtain that approval as soon as
reasonably possible in the circumstances. |
| |
| 3. | | INDEMNITY NOT INVALIDATED |
The failure of the Director to comply with the provisions of the Act or the Notice of Articles or
Articles of the Corporation or of the constating documents of an associated corporation shall not
invalidate any indemnity to which the Director is entitled under this Agreement and failure to give
notice in a timely fashion as required by section 6 will not disentitle the Director to
indemnification.
- 35 -
| 4. | | INDEMNITY PROHIBITED |
| |
| 4.1. | | General Prohibition. The Corporation shall not indemnify the Director under section
2.2.1 or pay the expenses of the Director under section 2.2.2 or section 7.1: |
| | 4.1.1. | | if, in relation to the subject matter of the eligible proceeding, the Director did
not act honestly and in good faith with a view to the best interests of the Corporation
or the associated corporation, as applicable; or |
| |
| | 4.1.2. | | if, in the case of an eligible proceeding other than a civil proceeding, the Director
did not have reasonable grounds for believing that the conduct of the Director in
respect of which the proceeding was brought was lawful. |
| 4.2. | | Derivative Action. If an eligible proceeding is brought against the Director by or
on behalf of the Corporation or by or on behalf of an associated corporation, the Corporation
shall not: |
| | 4.2.1. | | indemnify the Director under section 2.2.1 in respect of the proceeding; or |
| |
| | 4.2.2. | | pay the expenses of the Director under section 2.2.2 or section 7.1 if the Director
was not wholly successful, on the merits or otherwise, in the outcome of the proceeding
or was not substantially successful on the merits in the outcome of the proceeding. |
| 4.3. | | Proceedings by Director. The indemnity provided under this Agreement will not apply
to any proceeding initiated by the Director against: |
| | 4.3.1. | | the Corporation, unless it is brought to establish or enforce any right under this
Agreement; or |
| |
| | 4.3.2. | | any other person or entity unless the Corporation or an associated corporation has
joined with the Director in or has consented to the initiation of such proceeding. |
| 5. | | MATTERS IN RELATION TO INVESTIGATION AND DEFENCE |
| |
| 5.1. | | Investigation by Corporation. The Corporation may conduct any investigation it
considers appropriate of any eligible proceeding of which it receives notice and will pay all
costs of that investigation. Upon receipt of reasonable notice from the Corporation, the
Director shall, acting reasonably, co-operate fully with the investigation; provided that the
Director will not be required to provide assistance that would materially prejudice the
Director’s defence, the Director’s ability to fulfil the Director’s business obligations, or
the conduct of the Director’s business or personal affairs. |
| |
| 5.2. | | Payment of Per Diem. If the Corporation or an associated corporation requests the
Director to attend as a witness or as a participant other than as a named party in an eligible
proceeding and the Director is not then an employee of the Corporation, the Corporation will
compensate the Director at a rate of A$ per day (or partial day |
- 36 -
| | | of at least 2 hours duration), such rate to be adjusted annually to reflect the percentage
change in the consumer price index weighted average of eight capital cities over financial
years as published by the Australian Bureau of Statistics. |
| |
| 5.3. | | Conduct of Defence. With respect to the indemnity that is provided for in this
Agreement, the Corporation shall review any claim, action or proceeding of any kind whatsoever
against or involving the Director that would come within the terms of section 2 in the
following manner: |
| |
| 5.3.1. | | If both the Corporation and the Director are satisfied that there is no conflict between the
interests of the Corporation and the interests of the Director, the Corporation shall be
entitled to choose to take carriage of the Director’s defence, provided that any settlement of
such claim, action or proceeding must be acceptable to the Director, acting reasonably. |
| |
| 5.3.2. | | If either the Corporation or the Director determines that there is a conflict between the
interests of the Corporation and the interests of the Director, then the Director will
negotiate or defend such claim, action or proceeding independently of the Corporation,
including retaining independent legal counsel, with all the related costs to be paid by the
Corporation in accordance with section 2. The Director may negotiate and settle any such
claim, action or proceeding independently of the Corporation, but the Corporation shall not be
liable for any settlement negotiated without its prior written consent, which consent may not
be unreasonably withheld. |
| |
| 5.3.3. | | If the Director is named as a party to or a witness in any eligible proceeding, or the
Director is questioned or any of the Director’s actions, omissions or activities are in any
way investigated, reviewed or examined, the Director shall be entitled to retain independent
legal counsel at the Corporation’s expense to act on the Director’s behalf to provide an
initial assessment to the Director of the appropriate course of action for the Director and to
continue to represent the Director if it is determined that there is a conflict between the
interests of the Corporation and the interests of the Director. |
| |
| 6. | | NOTICE OF CLAIM |
Upon the Director becoming aware of any actual, threatened or potential action or proceeding that
would come within the terms of section 2, the Director shall give, or cause to be given, written
notice, along with the fullest information obtainable, to the Corporation as soon as practicable.
| 7. | | PAYMENTS |
| |
| 7.1. | | Advancement of Expenses. The Corporation shall pay expenses actually and reasonably
incurred by the Director, as they are incurred in advance of the final disposition of an
eligible proceeding, in respect of that proceeding if the Director first gives the Corporation
a written undertaking that, if it is ultimately determined that the payment of expenses is
prohibited by section 4, the Director shall repay the amounts advanced. |
- 37 -
| 7.2. | | Prompt Payment. The Corporation shall pay any amounts due under section 2 to the
Director or as the Director may direct no later than 30 days after: |
| | 7.2.1. | | notice of any claim or demand to pay monies in connection with an expense described
in section 2 has been received by the Corporation and is due and payable by the
Director; or |
| |
| | 7.2.2. | | an eligible penalty is due and payable by the Director. |
| 7.3. | | Tax Gross Up. Any indemnity payment made pursuant to this Agreement shall be grossed
up by the amount of any tax payable by the Director to taxing authorities having jurisdiction.
The Director shall be entitled to full indemnification notwithstanding any deductible amounts
or policy limits contained in any applicable insurance policy. |
| |
| 8. | | INSURANCE |
| |
| 8.1. | | Obligation to Obtain Insurance. The Corporation shall purchase and maintain in full
force and effect directors’ and officers’ liability insurance policies with a reputable
insurer(s) with coverage similar in scope to those policies held by comparable companies, in
comparable circumstances, to indemnify the Director against any liability or expense that may
be incurred by the Director by reason of the Director being or having been a director or
officer of, or holding or having held a position equivalent to that of a director or officer
of, the Corporation or an associated corporation, which policies are approved by the board of
directors of the Corporation. |
| |
| 8.2. | | Change of Control. If the Corporation is subject to a change of control as a
consequence of a takeover or is sold or enters into a business combination as a result of
which the directors’ and officers’ liability insurance policies are terminated and not
replaced with a substantially similar policy or policies equally applicable to the Director,
the Corporation will cause run off “tail” insurance to be purchased for the benefit of the
Director with substantially the same coverage for the balance of the term referred to in
section 8.5 without any gap in coverage. |
| |
| 8.3. | | Copies. The Corporation shall provide the Director on request with a copy of any
contract of insurance entered into by the Corporation under this section, including any
certificate of insurance, evidence of payment of premiums, policy wording, and evidence of any
renewal of that contract of insurance. The Corporation will promptly notify the Director if
any insurer cancels, makes material changes to directors’ and officers’ liability coverage or
refuses to renew coverage (or any part of the coverage). |
| |
| 8.4. | | No Double-Recovery. The Corporation shall not be liable to provide an indemnity
under this Agreement to the extend that the Director has recovered sums in connection with a
matter covered by this Agreement under any insurance the Corporation has obtained as
contemplated under this section 8, it being the intention of the parties that the Director may
only recover once in respect of the same liability. The Director shall not be required to
wait for payment under any such insurance, but if the Director is indemnified by the |
- 38 -
| | | Corporation and subsequently receives payment in respect of the same liability under such
insurance, the Director shall immediately pay such amount to the Corporation. |
| |
| 8.5. | | Term of Insurance Obligation. The obligations of the Corporation under this section
8 shall continue of 10 years after the Director ceases to be a director or officer of the
Corporation. |
| |
| 9. | | DOCUMENTS AND RECORDS |
| |
| 9.1. | | Right of Access. The Corporation shall permit the Director, at all reasonable times
and at the expense of the Corporation, to have access to, to inspect and to make copies of all
documents and records to which the Director would have had access during the period that the
Director was a director of the Corporation or associated corporation, except that the
Corporation may refuse such access, inspection and copying right if: |
| | 9.1.1. | | the board of directors of the Corporation, acting reasonably and in good faith, has
determined that: |
| | 9.1.1.1. | | to allow access, inspection and copying would be prejudicial to the
Corporation’s interests; or |
| |
| | 9.1.1.2. | | such access, inspection and copying is for an improper purpose or a purpose
that is inconsistent with the Director obtaining protection from a liability or
expense that would come under section 2 of this Agreement; or |
| | 9.1.2. | | such access, inspection and copying is inconsistent with the Director’s rights and
obligations under this Agreement. |
| 9.2. | | Right to Keep Documents. The Director acknowledges and agrees that any Documents
remain the property of the Corporation or the associated corporation and that the Director
must return any Document and all copies to the owner upon demand by the Corporation. Subject
to the foregoing and to section 9.3, the Director may keep and retain possession of any
Document, unless: |
| | 9.2.1. | | conditions regarding possession or disposal of the Document were attached to the
Document when it was given to the Director or subsequently, in which case the Director
shall observe such conditions; or |
| |
| | 9.2.2. | | the Document is subject to legal professional privilege vesting solely in the
Corporation or an associated corporation, |
| |
| | 9.2.3. | | requested by the Corporation to return the Document and any copies. |
| 9.3. | | Confidentiality. The Director shall keep confidential all confidential information
of the Corporation and its associated corporations and all confidential information contained
in any Document, any documents or records that are accessed by the Director pursuant to |
- 39 -
| | | section 9.1 and, in particular, any Document that is the subject of legal professional
privilege of the Corporation, whether solely or joint, except for the purposes of and to the
extent necessary to obtain legal advice in relation to the liability or potential liability
of the Director by virtue of being a director or officer of, or holding a position
equivalent to that of a director or officer of, the Corporation or an associated
corporation. This obligation of confidentiality shall survive indefinitely following the
Director ceasing to be a director or officer of, or holding a position equivalent to that of
a director or officer of, the Corporation or an associated corporation, but shall cease to
apply to any information of the Corporation that comes into the public domain for any reason
other than breach by the Director of this obligation of confidentiality. |
| |
| 9.4. | | Protection of Privilege. The Director shall not, without the prior consent of the
Corporation, act in any way to cause the legal professional privilege of the Corporation or
any associated corporation (whether sole or joint) in a Document to be waived, extinguished or
lost. |
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| 10. | | PROFESSIONAL ADVICE |
The Director may, when considered reasonably necessary by the Director and in accordance with the
Corporation’s policies from time to time and at the Corporation’s expense, but subject to prior
approval of the Corporation, which shall not be unreasonably withheld or delayed, seek professional
advice from independent advisers in relation to and in the course of performing the Director’s
duties to the Corporation or an associated corporation.
| 11. | | RESIGNATION OF DIRECTOR OR OFFICER |
Nothing in this Agreement shall prevent the Director from resigning as a director or officer of, or
from a position equivalent to that of a director or officer of, the Corporation or an associated
corporation at any time, and no such resignation shall in any way affect or impair the rights of
the Director under this Agreement.
If any payment is made under this Agreement, the Corporation shall be subrogated to the extent of
such payment to all the Director’s rights of recovery. In such case, the Director shall execute
all documents required and shall do everything necessary to secure and preserve such rights,
including the execution of such documents as are necessary to enable the Corporation effectively to
bring action in the name of the Director.
If any provision of this Agreement is held to be invalid, illegal or unenforceable for any reason
whatsoever, the validity, legality and enforceability of the remaining provisions of this Agreement
(including, without limitation, all portions of any section of this Agreement containing such
provision held to be invalid, illegal or unenforceable that are not of themselves invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby.
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Any demand, notice or communication (a “notice”) to be given in connection with this Agreement must
be given in writing and may be given by personal delivery, by registered mail, by e-mail or by fax
addressed to the recipient as follows:
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| | | | 14.1. | | | To the Corporation: | | |
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| | | | | | | Moto Goldmines Limited | | |
| | | | | | | 00 Xxxxxx Xxxx,x | | |
| | | | | | | Xxxxxxxx, Xxxxxxx Xxxxxxxxx 0000 | | |
| | | | | | | Xxxxxxxxx | | |
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| | | | | | | Phone: x00 00 0000 0000 | | |
| | | | | | | Fax: x00 00 00000000 | | |
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| | | | | | Email: | | | | |
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| | | 14.1.2. | | | To the Director:
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| | | | | | Phone: | | | | |
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or to such other address, individual, e-mail address, or fax number as may be designated by notice
in accordance with this section. Any notice shall be conclusively deemed to have been given if
personally delivered, on the day of actual delivery thereof; if given by registered mail, on the
fifth business day following the deposit thereof in the mail; if given by e-mail, on the first
business day following transmittal thereof; and, if given by fax, on the first business day
following transmittal thereof. If the party giving any notice knows or ought reasonably to know of
any difficulty with any particular mode of giving notice that might affect prompt receipt of the
notice, any notice shall be given by a mode of delivery of notice that is not subject to such
difficulty.
This indemnity agreement is governed by the laws of the Province of British Columbia and the laws
of Canada applicable therein.
| 16. | | BENEFIT OF THE AGREEMENT |
This Agreement shall enure to the benefit of and be binding upon the Corporation and its
successors, and upon the Director and the Director’s heirs and legal personal representatives.
This Agreement is not assignable by any party.
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IN WITNESS WHEREOF the Corporation and the Director have executed this Agreement as of the date
first above written.
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| | MOTO GOLDMINES LIMITED
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| | By: | | |
| | | Name: | | |
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| | Print Name of Director: | |
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