Execution Copy
[KINROSS LOGO]
November 6, 2006
Bema Gold Corporation
Suite 3100, Three Bentall Centre
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxx, XX X0X 0X0
Attention: Xxxxx X. Xxxxxxx
Chairman, President and Chief Executive Officer
----------------------------------------------------------
This letter agreement (the "Agreement") is to set out our agreement with respect
to the proposed business combination of Kinross Gold Corporation, a corporation
existing under the OBCA ("Kinross") and Bema Gold Corporation, a corporation
existing under the CBCA ("Bema") pursuant to a transaction whereby, among other
things, the holders of common shares of Bema ("Bema Common Shares") will receive
for each one Bema Common Share held 0.441 of a Kinross Common Share (as defined
below) plus $0.01 in cash (collectively, the "Share Consideration").
Although this Agreement is intended to bind the parties, it is intended that a
definitive agreement (together with any ancillary agreement(s), the "Definitive
Agreement") providing for the transactions contemplated herein and containing
substantially similar (in all material respects) terms, conditions, covenants,
representations and warranties to those contained herein (excluding subparagraph
9(a)) will be negotiated in good faith between Bema and Kinross, which
Definitive Agreement will supersede this Agreement.
While we anticipate that the transactions contemplated herein will be structured
as a plan of arrangement, the ultimate form and mechanics of the transactions
contemplated herein will be mutually determined by Kinross and Bema based on
tax, securities and corporate law and other considerations. Unless otherwise
stated, all references to amounts of money herein are expressed in lawful money
of Canada.
1. DEFINITIONS:
(a) "Acquisition Proposal" means, in respect of Bema or any Material
Bema Subsidiary, any bona fide inquiry or proposal (written or oral)
made by a third party regarding any merger, amalgamation, share
exchange, business combination, take-over bid, sale or other
disposition of all or substantially all of its respective assets, or
sale or other disposition of any of the Bema properties listed on
Schedule A, any recapitalization, reorganization, liquidation,
material sale or issue of treasury securities or rights therein or
thereto or rights or options to acquire any material number of
treasury securities or any type of similar
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transaction which would, or could, in any case, constitute a de
facto acquisition or change of control of Bema or any Material Bema
Subsidiary or would or could, in any case, result in the sale or
other disposition of all or substantially all of the assets of Bema
or any Material Bema Subsidiary;
(b) "Agreement" means this letter agreement, together with the schedules
attached hereto, as amended or supplemented from time to time;
(c) "AIM" means the AIM market operated by the London Stock Exchange
plc;
(d) "Antitrust Law" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder,
as amended, the Competition Act (Canada), R.S.C. 1985, c.C-34, as
amended, and any other federal, state, or foreign Law designed or
intended to regulate competition or investment (foreign or
otherwise) or to prohibit, restrict or regulate action having the
purposes or effect of monopolization or restraint of trade;
(e) "Arrangement" means an arrangement under the provisions of section
192 of the CBCA effecting the transactions contemplated herein;
(f) "Asset Consideration" has the meaning set out in subparagraph 2(c)
hereof;
(g) "Assets" has the meaning set out in subparagraph 2(c) hereof;
(h) "Bema" has the meaning set forth in the introductory paragraph
hereof;
(i) "Bema Common Shares" has the meaning set forth in the introductory
paragraph hereof;
(j) "Bema Disclosure Letter" means the letter of even date herewith
delivered by Bema to Kinross in a form accepted by and initialled on
behalf of Kinross with respect to certain matters in this Agreement;
(k) "Bema Documents" has the meaning set out in paragraph (v) of
Schedule J hereof;
(l) "Bema Group Companies" means the Bema Subsidiaries and the Bema
Significant Interest Companies, collectively;
(m) "Bema Meeting" means the special meeting, including any adjournments
or postponements thereof, of the Bema Shareholders to be held, among
other things, to consider and, if deemed advisable, to approve the
transactions contemplated herein;
(n) "Bema Options" means the outstanding options to purchase an
aggregate of 21,363,347 Bema Common Shares issued pursuant to the
Bema Share Option Plans, all as described in Schedule C hereto;
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(o) "Bema Proxy Circular" means the management information circular to
be prepared by Bema in respect of the Bema Meeting;
(p) "Bema Required Vote" means the requisite approval for the
transactions contemplated herein being (i) not less than 66-2/3
percent of the votes cast in respect of the transactions
contemplated herein by Bema Shareholders present in person or by
proxy at the Bema Meeting, (ii) a majority of votes cast in respect
of the transactions contemplated herein by Bema Shareholders present
in person or by proxy at the Bema Meeting, excluding votes cast by
those Bema Shareholders required to be excluded pursuant to the
minority approval provisions of the Rules, and (iii) such other
approval required by the Court or applicable Laws;
(q) "Bema Shareholders" means, at any time, the holders of Bema Common
Shares at such time;
(r) "Bema Share Option Plans" means the share option plans of Bema
described in Schedule C hereto;
(s) "Bema Significant Interest Companies" means the corporations
identified as such in Schedule E attached hereto, collectively;
(t) "Bema Subsidiaries" means the corporations identified as such in
Schedule E attached hereto, collectively;
(u) "Bema Warrants" means the warrants and other securities convertible
or exchangeable into Bema Common Shares, all as described in
Schedule C hereto;
(v) "Business Day" means any day, other than a Saturday, a Sunday or a
statutory holiday in Toronto, Ontario or Vancouver, British
Columbia;
(w) "Canadian GAAP" means accounting principles generally accepted in
Canada;
(x) "CBCA" means the Canada Business Corporations Act;
(y) "Closing Date" means January 30, 2007 or such other date as the
parties hereto agree to;
(z) "Completion Deadline" means the date by which the transactions
contemplated by this Agreement are to be completed, which date shall
be March 30, 2007;
(aa) "Confidentiality Agreement" means the confidentiality agreement
dated November 6, 2006 between Kinross and Bema;
(bb) "Contaminants" means any pollutant, contaminant or waste of any
nature, including without limitation, any hazardous waste, hazardous
substance, hazardous material, toxic substance, dangerous substance,
dangerous good, or
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deleterious substance, as defined, judicially interpreted or
identified in or for the purposes of any Environmental Laws;
(cc) "Court means the Supreme Court of British Columbia;
(dd) "de facto acquisition or change of control" means the acquisition,
directly or indirectly, by any person or group of persons acting
jointly or in concert, of beneficial ownership of, or control or
direction over, sufficient voting securities of Bema to permit such
person or persons to exercise, or to control or direct the voting
of, 20% or more of the total number of votes attached to all
outstanding voting securities of Bema, or, in the case of a Material
Bema Subsidiary, 50% of the total number of votes attached to the
outstanding voting securities of such Material Bema Subsidiary held
by Bema;
(ee) "Definitive Agreement" means a definitive agreement (together with
any necessary ancillary agreements) providing for the transactions
contemplated herein and containing substantially similar (in all
material respects) terms, conditions, covenants, representations and
warranties to those contained herein (excluding subparagraph 9(a));
(ff) "Definitive Agreement Date" means the date upon which the Definitive
Agreement is executed by the parties hereto;
(gg) "Effective Time" means 12:01 a.m. (Toronto time) on the Closing
Date;
(hh) "Employee" means any individual employed or retained by Bema or any
of the Bema Subsidiaries on a full-time, part-time or temporary
basis who provides services to Bema or any of the Bema Group
Companies, including without limitation, those individuals who are
on disability leave, parental leave or other permitted absence;
(ii) "Employee Plans" has the meaning set out in paragraph (t) of
Schedule J hereof and includes the Bema Share Option Plans;
(jj) "Encumbrance" includes any mortgage, pledge, assignment, charge,
lien, claim, security interest, adverse interest, 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;
(kk) "Environmental Approvals" means all permits, certificates, licences,
authorizations, consents, instructions, registrations, directions or
approvals issued or required by any Governmental Entity pursuant to
any Environmental Laws;
(ll) "Environmental Condition" means the generation, discharge, emission
or release into the environment (including, without limitation,
ambient air, surface water,
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groundwater or land), spill, receiving, handling, use, storage,
containment, treatment, transportation, shipment or disposition
prior to the Closing Date of any Contaminants by any person in
respect of which remedial action is required under any Environmental
Laws or as to which any liability is currently or in the future
imposed upon any person based upon the acts or omissions of any
person prior to the Closing Date with respect to any Contaminants or
reporting with respect thereto;
(mm) "Environmental Laws" means all applicable Laws, including applicable
common law and agreements with Governmental Entities, relating to
the protection of the environment and employee and public health and
safety, and includes Environmental Approvals;
(nn) "Expropriation Event" means any nationalization of any assets, or
threats to nationalize assets, or any change or proposed change in
law which may result in a restriction on foreign ownership of assets
or which may restrict sales of gold, copper or silver or export of
gold, copper or silver from a country;
(oo) "Governmental Entity" means any applicable (i) multinational,
federal, provincial, territorial, 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, (ii) subdivision, agency, commission,
board or authority of any of the foregoing, or (iii)
quasi-governmental or private body (including any stock exchange or
Securities Authority) exercising any regulatory, expropriation or
taxing authority under or for the account of any of the foregoing;
(pp) "Kinross" has the meaning set forth in the introductory paragraph
hereof;
(qq) "Kinross Common Shares" means the common shares of Kinross;
(rr) "Kinross Disclosure Letter" means the letter of even date herewith
delivered by Kinross to Bema in a form accepted by and initialled on
behalf of Bema with respect to certain matters in this Agreement;
(ss) "Kinross Documents" has the meaning set out in paragraph (s) of
Schedule K hereof;
(tt) "Kinross Group Companies" means the Kinross Subsidiaries and the
Kinross Significant Interest Companies collectively;
(uu) "Kinross Options" means the outstanding options to purchase an
aggregate of 3,789,760.16 Kinross Common Shares issued pursuant to
the Kinross Share Option Plans, all as described in Schedule D
hereto;
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(vv) "Kinross Share Option Plans" means the share option plans,
restricted share unit plans and deferred share unit plans of Kinross
described in Schedule D hereto;
(ww) "Kinross Significant Interest Companies" means the corporations
identified as such in Schedule F attached hereto, collectively;
(xx) "Kinross Subsidiaries" means the corporations identified as such in
Schedule F attached hereto, collectively;
(yy) "Kinross Warrants" means the warrants and other securities
convertible or exchangeable into Kinross Common Shares, all as
described in Schedule D hereto;
(zz) "knowledge of Bema" means the actual knowledge, after due and
reasonable inquiry, of any of the officers of Bema;
(aaa) "knowledge of Kinross" means the actual knowledge, after due and
reasonable inquiry, of any of the officers of Kinross;
(bbb) "Kupol Agreement" has the meaning set out in subparagraph 2(e)
hereof;
(ccc) "Laws" means all laws, by-laws, rules, regulations, orders,
ordinances, protocols, codes, guidelines, instruments, policies,
notices, directions and judgments or other requirements of any
Governmental Entity;
(ddd) "Material Adverse Change" means, in respect of Kinross or Bema, any
one or more changes, events or occurrences including, without
limitation, an Expropriation Event in a jurisdiction in which it
carries on business, and "Material Adverse Effect" means, in respect
of Kinross or Bema, any state of facts which, in either case, either
individually or in the aggregate are, or would reasonably be
expected to be, material and adverse to the business, operations,
results of operations, prospects, properties, assets, liabilities,
obligations (whether absolute, accrued, conditional or otherwise) or
condition (financial or otherwise) of Kinross and the Kinross
Subsidiaries, or Bema and the Bema Subsidiaries, respectively, on a
consolidated basis, other than any change, event, occurrence or
state of facts: (i) relating to the global economy or securities
markets in general; (ii) affecting the worldwide gold mining
industry in general and which does not have a materially
disproportionate effect on Kinross and the Kinross Subsidiaries on a
consolidated basis, or Bema and the Bema Subsidiaries on a
consolidated basis, respectively; (iii) resulting from changes in
the price of gold, copper or silver; (iv) relating to the rate at
which Canadian dollars can be exchanged for United States dollars or
vice versa; or (v) relating to a change in the market trading price
of shares of Kinross or Bema, either (A) related to this Agreement
and the transactions contemplated herein or the announcement
thereof, or (B) related to such a change in the market trading price
primarily resulting from a change, effect, event or occurrence
excluded from the definition of Material
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Adverse Change under clauses (i) through (iv) inclusive, and except
as explicitly stated herein, references in this Agreement to dollar
amounts are not intended to be, and shall not be deemed to be,
interpretive of the amount used for the purpose of determining
whether a "Material Adverse Change" has occurred or whether a state
of facts exists that has or could have a "Material Adverse Effect"
and such defined terms and all other references to materiality in
this Agreement shall be interpreted without reference to any such
amounts;
(eee) "Material Bema Subsidiary" means any Bema Subsidiary that represents
10% or more of the consolidated assets or consolidated revenues of
Bema and the Bema Group Companies as shown in the last audited
financial statements of Bema;
(fff) "misrepresentation" has the meaning ascribed thereto in the
Securities Act (Ontario);
(ggg) "National Instrument 43-101" means National Instrument 43-101 -
Standards of Disclosure for Mineral Projects of the Canadian
Securities Administrators;
(hhh) "Newco" means a corporation to be established under the federal or
provincial laws of Canada by certain members of Bema's management;
(iii) "NYSE" means the New York Stock Exchange;
(jjj) "OBCA" means the Business Corporations Act (Ontario);
(kkk) "Pension Plans" has the meaning set out in paragraph (t)(iii) of
Schedule J hereof;
(lll) "Pre-Acquisition Reorganization" has the meaning set out in
subparagraph 7(w) hereof;
(mmm) "Prohibited Payments" mean any offer, gift, payment, promise to pay
or authorization to pay money or anything of value to or for the use
or benefit of any government official (including employees and
directors of government-owned companies and other state
enterprises), political party, party official, candidate for public
office or employee of a public international organization in an
effort to win or retain business or secure any improper advantage,
except that the term does not include any payment to a government
official, political party, party official or political candidate
that is expressly permitted under the written laws of the country
involved, or any facilitating payment that is made solely to secure
the provision of routine governmental services;
(nnn) "Rules" means Ontario Securities Commission Rule 61-501 and
Regulation Q-27 of the Autorite des marches financiers;
(ooo) "Russian Properties Agreement" has the meaning set out in
subparagraph 2(d) hereof;
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(ppp) "Xxxxxxxx-Xxxxx Act" means the United States Xxxxxxxx-Xxxxx Act of
2002 and the rules and regulations made thereunder, as now in effect
or amended from time to time;
(qqq) "SEC" means the Securities and Exchange Commission of the United
States of America;
(rrr) "Securities Authorities" means the Ontario Securities Commission and
the other securities regulatory authorities in the provinces and
territories of Canada and the SEC, collectively and "Securities
Authority" means any one of them;
(sss) "SEDAR" means The System for Electronic Document Analysis and
Retrieval, a filing system developed for the Canadian Securities
Administrators;
(ttt) "Share Consideration" has the meaning set out in the introductory
paragraph hereof;
(uuu) "Subsidiary" means, with respect to a specified body corporate, any
body corporate of which the specified body corporate is entitled to
elect a majority of the directors thereof 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 such a body corporate, excluding any
body corporate in respect of which such direction or control is not
exercised by the specified body corporate as a result of any
existing contract, agreement or commitment, and, in the case of
Kinross, includes the Kinross Subsidiaries and, in the case of Bema,
includes the Bema Subsidiaries;
(vvv) "Superior Proposal" means a written Acquisition Proposal in respect
of Bema, if such Acquisition Proposal is not conditional on
obtaining financing and the directors of Bema have determined, in
good faith, after consultation with and receiving advice (which may
include written opinions, a copy of which shall have been provided
to Kinross) from, as appropriate, the financial, legal and other
advisors to Bema, to the effect that such Acquisition Proposal
would, if consummated in accordance with the terms thereof, but
without assuming away the risk of non-completion, result in a
transaction that has a value per Bema Common Share that is more
favourable to Bema Shareholders from a financial point of view than
that contemplated by this Agreement (including any alterations to
this Agreement agreed to in writing by Kinross in response thereto
in accordance with subparagraph 15(a) hereof);
(www) "Tax" and "Taxes" means all taxes, assessments, charges, dues,
duties, rates, fees imposts, levies and similar charges of any kind
lawfully levied, assessed or imposed by any Governmental Entity,
including all income taxes (including any tax on or based upon net
income, gross income, income as specially defined, earnings, profits
or selected items of income, earnings or profits) and all capital
taxes, gross receipts taxes, environmental taxes and charges, sales
taxes, use
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taxes, ad valorem taxes, value added taxes, subsoil use or
extraction taxes and ownership fees, transfer taxes (including,
without limitation, taxes relating to the transfer of interests in
real property or entities holding interests therein), franchise
taxes, licence taxes, withholding taxes, health taxes, payroll
taxes, employment taxes, Canada or Quebec Pension Plan premiums,
excise, severance, social security, workers' compensation,
employment insurance or compensation taxes, mandatory pension and
other social fund taxes or premium, stamp taxes, occupation taxes,
premium taxes, property taxes, windfall profits taxes, alternative
or add-on minimum taxes, goods and services tax, harmonized sales
tax, customs duties or other taxes, fees, imports, assessments or
charges or any kind whatsoever, together with any interest and any
penalties or additional amounts imposed by any taxing authority
(domestic or foreign) on such entity, and any interest, penalties,
additional taxes and additions to tax imposed with respect to the
foregoing;
(xxx) "Tax Act" means the Income Tax Act (Canada);
(yyy) "Tax Returns" means all returns, schedules, elections, declarations,
reports, information returns and statements required to be filed
with any taxing authority relating to Taxes;
(zzz) "Termination Date" means the date upon which this Agreement is
terminated pursuant to the terms of this Agreement;
(aaaa) "TSX" means the Toronto Stock Exchange;
(bbbb) "US Tax Code" means The United States Internal Revenue Code of 1986,
as amended by any successor thereto;
(cccc) "1933 Act" means the Securities Act of 1933, as amended, of the
United States of America;
(dddd) "1934 Act" means the Securities Exchange Act of 1934, as amended, of
the United States of America; and
(eeee) "1940 Act" means the Investment Company Act of 1940, as amended, of
the United States of America.
2. BASIS OF TRANSACTION:
Subject to the terms and conditions hereof, the following matters shall be
effected under the Arrangement and under related or ancillary documents:
(a) Bema Common Shares: As at the Effective Time, Bema Shareholders will
receive the Share Consideration for each one Bema Common Share held.
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(b) Other Bema Securities: As at the Effective Time, each outstanding
(i) Bema Warrant (or any Kinross replacement warrant issued in
substitution therefor) shall entitle the holder thereof to receive
upon the exercise, exchange or conversion thereof the Share
Consideration or 0.441 of a Kinross Common Share plus that portion
of a Kinross Common Share that has a fair market value equal to
approximately $0.01 in cash in lieu of one Bema Common Share and on
the same other terms and conditions as the original Bema Warrant,
and (ii) Bema Option (and/or the Bema Option Plan) shall be amended
to provide for (A) acceleration of vesting upon the change of
control resulting from the transactions contemplated herein, and (B)
exercise by any Bema employee or director who is terminated or
ceases to be a director within 18 months following the Effective
Time of his/her options during the period ending on the first to
occur of (x) one year following termination of employment or ceasing
to be a director, and (y) the expiry of the relevant Bema Option.
Each outstanding Bema Option shall entitle the holder thereof to
receive upon the exercise thereof 0.441 of a Kinross Common Share
plus that portion of a Kinross Common Share that has a fair market
value equal to approximately $0.01 in cash in lieu of one Bema
Common Share and on the same other terms and conditions as the
original Bema Option, amended as provided above (subject to any
modifications that may be reasonable to meet the requirements of
subsection 7(1.4) of the Tax Act). Alternatively, Kinross shall
issue options to replace the Bema Options, provided that such
options to purchase Kinross Common Shares have terms and conditions
substantially similar to the original Bema Options, amended as
provided above (subject to any modifications that may be reasonable
to meet the requirements of subsection 7(1.4) of the Tax Act).
(c) Asset Transfer: At or prior to the Effective Time, Bema, or at the
option of Kinross, a Subsidiary of Bema will transfer the assets
listed in Schedule G hereto (the "Assets") to Newco and Kinross, a
Subsidiary of Kinross or a Subsidiary of Bema will provide Newco
with the option listed in Schedule G hereto, and as consideration
(the "Asset Consideration") therefor shall receive from Newco the
consideration described in Schedule G hereto and the Kinross
Disclosure Letter.
(d) Russian Properties Agreement: Kinross, Bema and Newco shall
negotiate a separate agreement to be entered into by Kinross and
Newco on or before the Closing Date, such timing to be at the option
of Kinross, in respect of Newco's and Kinross' respective interests
in certain Russian exploration properties (the "Russian Properties
Agreement") providing for the matters described in Schedule H
hereto.
(e) Kupol Agreement: Kinross, Bema, or at the option of Kinross, a
Subsidiary of Bema and Newco shall negotiate and on or before the
Closing Date, such timing to be at the option of Kinross, enter into
a separate agreement in respect of Kupol (the "Kupol Agreement")
providing for the matters described in Schedule I hereto.
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(f) Board of Directors: Kinross will select one Bema nominee to be
included in the nominees to be put forward by management of Kinross
for election to the board of directors of Kinross at the next annual
meeting of shareholders of Kinross. Such individual shall have
"observer" status on the Kinross board of directors from the Closing
Date until the next annual meeting of shareholders of Kinross.
(g) Tax Rollover: Each of Kinross and Bema shall (i) structure the
transactions contemplated herein to provide Bema Shareholders who
are persons resident in Canada for the purposes of the Tax Act
(other than such persons who are exempt from tax under the Tax Act)
and partnerships at least one partner of which is such a person with
a tax deferred rollover, (ii) use all reasonable efforts to
structure the transactions contemplated herein in such a manner that
the portion of the gain attributable to the Kinross Common Shares
received by Bema Shareholders would be considered eligible for a
rollover for United States tax purposes, and (iii) structure the
transactions contemplated herein to provide a tax deferred rollover
for holders of Bema Options who received such options in the
capacity of being an employee of Bema for purposes of the Tax Act.
3. DEFINITIVE AGREEMENT:
Kinross and Bema agree to negotiate in good faith and use their best efforts to
enter into the Definitive Agreement as soon as practicable and in any case on or
before December 18, 2006. The Definitive Agreement shall be in form and
substance satisfactory to each of Kinross and Bema, acting reasonably, and shall
include more specific terms regarding the structure of, and mechanics for
completing, the transactions contemplated herein, as well as substantially
similar (in all material respects) terms, conditions, covenants, representations
and warranties to those (other than subparagraph 9(a)) contained in this
Agreement.
4. REPRESENTATIONS AND WARRANTIES OF BEMA:
Bema hereby makes the representations and warranties set out in Schedule J
hereto to and in favour of Kinross and acknowledges that Kinross is relying upon
such representations and warranties in connection with the matters contemplated
by this Agreement and agreeing to complete the transactions contemplated herein.
5. REPRESENTATIONS AND WARRANTIES OF KINROSS:
Kinross hereby makes the representations and warranties set out in Schedule K
hereto to and in favour of Bema and acknowledges that Bema is relying upon such
representations and warranties in connection with the matters contemplated by
this Agreement and agreeing to complete the transactions contemplated herein.
6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES:
The representations and warranties contained in this Agreement shall survive the
execution and delivery of this Agreement and shall expire and be terminated and
extinguished on the Definitive
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Agreement Date. Any investigation by Kinross and its advisors shall not
mitigate, diminish or affect the representations and warranties of Bema
contained in this Agreement. Any investigation by Bema and its advisors shall
not mitigate, diminish or affect the representations and warranties of Kinross
contained in this Agreement.
7. COVENANTS OF BEMA:
Bema hereby covenants and agrees with Kinross as follows:
(a) Bema Meeting. Bema will convene the Bema Meeting for the purpose of
considering the transactions contemplated herein to be held as soon
as reasonably practicable and, in any event, by no later than
January 25, 2007 or such later date as may be mutually agreed upon.
(b) Bema Proxy Circular. As promptly as reasonably practicable, Bema
shall prepare the Bema Proxy Circular, together with any other
documents required by applicable Laws and the rules and policies of
any applicable stock exchange in connection with the approval of the
transactions contemplated herein, and Bema shall provide Kinross
with a reasonable opportunity to review and comment on the Bema
Proxy Circular and all such other documents and the Bema Proxy
Circular and all such other documents shall be reasonably
satisfactory to Kinross before they are filed or distributed to the
shareholders of Bema. Bema shall ensure that the Bema Proxy Circular
and all such other documents comply with all applicable Laws and the
requirements of any applicable stock exchange and, without limiting
the generality of the foregoing, shall ensure that the Bema Proxy
Circular and all such other documents do not contain any
misrepresentation (other than with respect to any information
relating to and provided by Kinross).
(c) Solicitation of Proxies. Subject to the terms of this Agreement,
Bema shall (i) take all lawful action to solicit proxies in favour
of the transactions contemplated herein; (ii) recommend to all Bema
Shareholders that they vote in favour of the transactions
contemplated herein; (iii) publicly reconfirm such recommendation
upon the reasonable request of Kinross; and (iv) not withdraw,
modify or qualify (or publicly propose to or publicly state that it
intends to withdraw, modify or qualify) in any manner adverse to
Kinross such recommendation except as explicitly permitted in
paragraph 15 hereof.
(d) Proceedings. In a timely and expeditious manner, Bema and Bema
Subsidiaries shall take all such actions and do all such acts and
things as are contemplated herein to be taken or done by Bema and
Bema Subsidiaries, as applicable.
(e) Copy of Documents. Except for proxies and other non-substantive
communications, Bema shall furnish promptly to Kinross a copy of
each notice, report, schedule or other document or communication
delivered, filed or received by Bema in connection with this
Agreement, the transactions contemplated herein or the Bema Meeting
or any other meeting at which all Bema Shareholders are
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entitled to attend, any filings made under any applicable Laws and
any dealings or communications with any Governmental Entity,
Securities Authority or stock exchange in connection with, or in any
way affecting, the transactions contemplated by this Agreement.
(f) Usual Business. Other than in connection with completing the
transactions contemplated herein or as disclosed in the Bema
Disclosure Letter, Bema shall, and shall cause the Bema Subsidiaries
to, and shall use its reasonable commercial efforts to cause the
Bema Significant Interest Companies to, conduct business only in,
and not take any action except in, the usual, ordinary and regular
course of business and consistent with past practices.
(g) Certain Actions Prohibited. Other than as disclosed in the Bema
Disclosure Letter or in contemplation of or as required to give
effect to the transactions contemplated herein, Bema shall not (and
shall ensure that the Bema Subsidiaries do not), without the prior
written consent of Kinross, which consent shall not be unreasonably
withheld or delayed, directly or indirectly do or permit to occur
any of the following:
(i) issue, sell, pledge, lease, dispose of, encumber or create
any Encumbrance on or agree to issue, sell, pledge, lease,
dispose of, or encumber or create any Encumbrance on, or
permit a Bema Subsidiary to issue, sell, pledge, lease,
dispose of, encumber or create any Encumbrance on or agree to
issue, sell, pledge, lease, dispose of, or encumber or create
any Encumbrance on, any shares of, or any options, warrants,
calls, conversion privileges or rights of any kind to acquire
any shares of, Bema or any of the Bema Subsidiaries or any of
the shares representing Bema's interest in the Bema
Significant Interest Companies, other than the issue of Bema
Common Shares pursuant to the exercise of the Bema Options or
the Bema Warrants issued and outstanding on the date hereof
in accordance with their terms as of the date hereof;
(ii) other than in the ordinary and regular course of business
consistent with past practice, in respect of rights,
properties or assets that are not, either individually or in
the aggregate, material to Bema, or pursuant to obligations
or rights disclosed in the Bema Disclosure Letter (to the
extent such rights have been exercised or initiated by other
persons), sell, lease or otherwise dispose of, or permit any
of the Bema Subsidiaries to sell, lease or otherwise dispose
of, any material property or assets or enter into any
agreement or commitment in respect of any of the foregoing;
(iii) amend or propose to amend the articles or by-laws (or their
equivalent) of Bema or any of the Bema Subsidiaries or any of
the terms of the
14
Bema Options or the Bema Warrants as they exist at the date
of this Agreement;
(iv) split, combine or reclassify any of the shares of Bema or any
of the Bema Subsidiaries, or declare, set aside or pay any
dividend or other distribution payable in cash, securities,
property or otherwise with respect to the shares of Bema;
(v) redeem, purchase or offer to purchase or permit any of the
Bema Subsidiaries to redeem, purchase or offer to purchase,
any Bema Common Shares and, other than pursuant to the Bema
Share Option Plans, any options or obligations or rights
under existing contracts, agreements and commitments;
(vi) reorganize, amalgamate or merge Bema or any of the Bema
Subsidiaries with any other person other than another Bema
Subsidiary;
(vii) acquire or agree to acquire any corporation or other entity
(or material interest therein) or division of any corporation
or other entity;
(viii) (A) satisfy or settle any claims or disputes which are,
individually or in the aggregate, in an amount in excess of
$5,000,000 or which constitute a claim between Bema and a
Bema Subsidiary or between Bema Subsidiaries; (B) relinquish
any contractual rights which are, individually or in the
aggregate, in an amount in excess of $5,000,000; or (C) enter
into any interest rate, currency or commodity swaps, xxxxxx,
caps, collars, forward sales or other similar financial
instruments other than in the ordinary and regular course of
business and not for speculative purposes;
(ix) incur, authorize, agree or otherwise become committed to
provide guarantees for borrowed money or incur, authorize,
agree or otherwise become committed for any indebtedness for
borrowed money in excess of $20,000,000 in the aggregate, or
permit any of the Bema Subsidiaries to incur, authorize,
agree or otherwise become committed to provide guarantees for
borrowed money or incur, authorize, agree or otherwise become
committed for any indebtedness for borrowed money;
(x) except as required by Canadian GAAP, any other generally
accepted accounting principle to which any Bema Group Company
may be subject or any applicable Laws, make any changes to
the existing accounting practices of Bema or make any
material tax election inconsistent with past practice; or
(xi) agree or commit to do any of the foregoing.
15
(h) Employment Arrangements. Without the prior written consent of
Kinross, Bema shall not, and shall cause the Bema Subsidiaries not
to, other than in the ordinary and regular course of business
consistent with past practice, or pursuant to existing employment
agreements, termination, compensation or other arrangements or
policies or pursuant to any Employee Plans or as required by
applicable Laws, enter into or modify any employment, compensation,
severance, collective bargaining or similar agreement, pension,
retirement or employee benefits plan, agreement, policy or
arrangement with, or grant any bonus, salary increase, option to
purchase shares, phantom stock option, pension or supplemental
pension benefit, profit sharing, tax equalization payment,
retirement allowance, deferred compensation, incentive compensation,
severance, change of control or termination pay to, or make any loan
to, any Employee, officer or director of Bema or any of the Bema
Subsidiaries or any officer or director of any of the Bema
Significant Interest Companies who is a nominee of Bema.
(i) Insurance. Bema shall use its reasonable commercial efforts, and
shall cause the Bema Subsidiaries to use their reasonable commercial
efforts, and shall use its reasonable commercial efforts to cause
the Bema Significant Interest Companies to use their reasonable
commercial efforts, to cause their respective current insurance (or
reinsurance) policies 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 and re-insurance companies of
internationally recognized standing 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.
(j) Certain Actions. Bema shall:
(i) not take any action, shall cause the Bema Subsidiaries to not
take any action, and shall use its reasonable commercial
efforts to cause the Bema Significant Interest Companies to
not take any action, that would interfere with or be
inconsistent with the completion of the transactions
contemplated by this Agreement or would render, or that could
reasonably be expected to render, any representation or
warranty made by Bema in this Agreement untrue or inaccurate
at any time prior to the Effective Time if then made; and
(ii) promptly notify Kinross of (A) any Material Adverse Change or
Material Adverse Effect, or any change, event, occurrence or
state of facts which could reasonably be expected to become a
Material Adverse Change or to have a Material Adverse Effect,
in respect of Bema, (B) any material Governmental Entity or
third person complaints, investigations or hearings (or
communications indicating that the same may be contemplated),
(C) any breach by Bema of any covenant or agreement contained
in this Agreement, and (D) any event occurring subsequent to
the date hereof that would render any representation or
warranty of
16
Bema contained in this Agreement, if made on or as of the
date of such event or the Effective Date, to be untrue or
inaccurate in any material respect.
(k) No Compromise. Bema shall not, and shall cause the Bema Subsidiaries
not to, settle or compromise any claim brought by any present,
former or purported holder of any securities of Bema in connection
with the transactions contemplated by this Agreement prior to the
Effective Time without the prior written consent of Kinross, such
consent not to be unreasonably withheld or delayed.
(l) Contractual Obligations. Except in the ordinary and regular course
of business and consistent with past practice, and other than as
required by applicable Laws, Bema shall not, and shall cause the
Bema Subsidiaries not to, and shall use its reasonable commercial
efforts to cause the Bema Significant Interest Companies not to,
enter into, renew or modify in any respect any material contract,
agreement, lease, commitment or arrangement to which Bema or any of
the Bema Group Companies is a party or by which any of them is
bound, except insofar as may be necessary to permit or provide for
the completion of the Arrangement. Without limiting the generality
of the foregoing, Bema shall not, and shall cause the Bema
Subsidiaries not to, enter into any agreement or provide any consent
or waiver in connection with any transaction or proposed transaction
involving the purchase and sale of shares of Chukotka Mining and
Geological Company without the prior written consent of Kinross and
Bema shall notify Kinross promptly (and in any event within 24
hours) of any such proposed transaction, first orally and then in
writing. In the event that Bema or any Bema Subsidiary has a right
or opportunity to acquire shares of Chukotka Mining Company, Bema
shall notify Kinross promptly (and in any event within 24 hours) of
any such event, first orally and then in writing, and, if requested
by Kinross, use all commercially reasonable efforts to obtain
financing and acquire such shares.
(m) Satisfaction of Conditions. Subject to paragraph 15 hereof, Bema
shall use all commercially reasonable efforts to satisfy, or cause
to be satisfied, all conditions precedent to its obligations to the
extent that 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 transactions contemplated by this Agreement, including
using its commercially reasonable efforts to:
(i) obtain the Bema Required Vote;
(ii) obtain all other consents, approvals and authorizations as
are required to be obtained by Bema or any of the Bema Group
Companies under any applicable Laws or from any Governmental
Entity which would, if not obtained, materially impede the
completion of the transactions contemplated herein or have a
Material Adverse Effect on Bema;
17
(iii) effect all necessary registrations, filings and submissions
of information requested by Governmental Entities required to
be effected by Bema or any of the Bema Group Companies in
connection with the transactions contemplated by this
Agreement and participate and appear in any proceedings of
any party hereto before any Governmental Entity;
(iv) oppose, lift or rescind any injunction or restraining order
or other order or action challenging or affecting this
Agreement, the transactions contemplated hereby or seeking to
stop, or otherwise adversely affecting the ability of the
parties hereto to consummate, the transactions contemplated
hereby;
(v) fulfill all conditions and satisfy all provisions of this
Agreement required to be fulfilled or satisfied by Bema; and
(vi) cooperate with Kinross in connection with the performance by
it of its obligations hereunder, provided however that the
foregoing shall not be construed to obligate Bema to pay or
cause to be paid any monies or to cause any liability to be
incurred to cause such performance to occur.
(n) Refrain from Certain Actions. Subject to paragraph 15 hereof, Bema
shall not take any action, refrain from taking any action (subject
to commercially reasonable efforts), or permit any action to be
taken or not taken, inconsistent with the provisions of this
Agreement or which could reasonably be expected to materially impede
the completion of the transactions contemplated hereby or which
could have a Material Adverse Effect on Bema, provided that where
Bema is required to take any such action or refrain from taking such
action (subject to commercially reasonable efforts) as a result of
this Agreement, it shall immediately notify Kinross in writing of
such circumstances.
(o) Keep Fully Informed. Bema shall, in all material respects, conduct
itself so as to keep Kinross fully informed as to the material
decisions or actions required or required to be made with respect to
the operation of its business.
(p) Cooperation. Bema shall make, or cooperate as necessary in the
making of, all necessary filings and applications under all
applicable Laws required in connection with the transactions
contemplated hereby and take all reasonable action necessary to be
in compliance with such Laws.
(q) Representations. Bema shall use its commercially reasonable efforts
to conduct its affairs and to cause the Bema Subsidiaries to conduct
their affairs so that all of the representations and warranties of
Bema contained herein shall be true and correct on and as of the
Effective Date as if made on and as of such date.
(r) Information. Bema shall continue to make available and cause to be
made available to Kinross and the agents and advisors thereto all
documents,
18
agreements, corporate records and minute books as may be necessary
to enable Kinross to effect a thorough examination of Bema and the
Bema Group Companies and the business, properties and financial
status thereof and shall cooperate with Kinross in securing access
for Kinross to any documents, agreements, corporate records or
minute books not in the possession or under the control of Bema.
Subject to applicable Laws, upon reasonable notice, Bema shall, and
shall cause the Bema Subsidiaries to, and shall use its reasonable
commercial efforts to cause the Bema Significant Interest Companies
to, afford officers, employees, counsel, accountants and other
authorized representatives and advisors of Kinross reasonable
access, during normal business hours from the date hereof until the
earlier of the Effective Time or the termination of this Agreement,
to the properties, books, contracts and records as well as to the
management personnel of Bema and the Bema Group Companies, and,
during such period, Bema shall, and shall cause the Bema
Subsidiaries to, and shall use its reasonable commercial efforts to
cause the Bema Significant Interest Companies to, furnish promptly
to Kinross all information concerning the business, properties and
personnel of Bema and the Bema Group Companies as Kinross may
reasonably request provided however that the disclosure of personal
information is done in compliance with applicable Laws relating to
privacy and does not include disclosure of personnel files or
medical information.
(s) Opinions. Prior to the Definitive Agreement, Bema shall deliver
legal opinions in respect of the title to its Kupol and Cerro Xxxxxx
properties acceptable to Kinross, acting reasonably. Bema shall
deliver to Kinross the written opinion from BMO Capital Markets
relating to the fairness, from a financial point of view, of the
Share Consideration to the Bema Shareholders once received by Bema.
(t) Bema Options and Bema Warrants. Bema shall take all corporate action
necessary to ensure that on the Effective Date all of the
outstanding Bema Options shall be exercisable for 0.441 of a Kinross
Common Share plus that portion of a Kinross Common Share that has a
fair market value equal to approximately $0.01 cash instead of a
Bema Common Share (subject to any modification that may be
reasonable to meet the requirements of subsection 7(1.4) of the Tax
Act), and Bema Warrants (or any Kinross replacement warrant issued
in substitution therefor) and other securities and rights
exercisable for Bema Common Shares provide only for the issuance of
the Share Consideration or 0.441 of a Kinross Common Share plus that
portion of a Kinross Common Share that has a fair market value equal
to approximately $0.01 cash instead of a Bema Common Share (subject
to any modification that may be reasonable to meet the requirements
of subsection 7(1.4) of the Tax Act) upon the due exercise thereof.
(u) Closing Documents. Bema shall execute and deliver, or cause to be
executed and delivered, at the closing of the transactions
contemplated hereby such customary agreements, certificates,
resolutions, opinions and other closing documents as
19
may be required by the other parties hereto, all in form
satisfactory to the other parties hereto, acting reasonably.
(v) Support Agreements. Bema shall use its best efforts to deliver to
Kinross an agreement from each of the directors and the management
of Bema to vote the Bema Common Shares beneficially owned or
controlled by them in favour of the transactions contemplated herein
in a form acceptable to Kinross, acting reasonably, as soon as
practicable following execution of this Agreement, and in any case
prior to November 10, 2006.
(w) Resignations. Subject to confirmation that insurance coverage is
maintained as contemplated by subparagraph 8(j), Bema shall obtain
and deliver to Kinross at the Effective Time evidence reasonably
satisfactory to Kinross of the resignation, effective as of the
Effective Time, of those directors and officers of Bema and the Bema
Subsidiaries designated by Kinross to Bema prior to the Effective
Time.
(x) Pre-Acquisition Reorganizations. Bema agrees that, upon request by
Kinross, Bema shall, and shall cause each of the Bema Subsidiaries
to, at the expense of Kinross, use its commercially reasonable
efforts to (i) effect such reorganizations of its business,
operations and assets and the integration of other affiliated
businesses as Purchaser may request, acting reasonably (each a
"Pre-Acquisition Reorganization") provided that the Pre-Acquisition
Reorganization is not prejudicial to Bema, any of the Bema
Subsidiaries or the Bema Shareholders, and (ii) cooperate with
Kinross and its advisors to determine the nature of the
Pre-Acquisition Reorganizations that might be undertaken and the
manner in which they would most effectively be undertaken. Kinross
acknowledges and agrees that the Pre-Acquisition Reorganizations
shall not (A) delay or prevent consummation of the transactions
contemplated herein (including by giving rise to litigation by third
parties), or (B) be considered in determining whether a
representation or warranty of Bema hereunder has been breached, it
being acknowledged by Kinross that these actions could require the
consent of third parties under applicable contracts. Kinross shall
provide written notice to Bema of any proposed Pre-Acquisition
Reorganization at least thirty days prior to the Effective Time.
Upon receipt of such notice, Kinross and Bema shall, at the expense
of Kinross, work cooperatively and use commercially reasonable
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 Reorganizations. The parties shall
seek to have any such Pre-Acquisition Reorganization made effective
as of the last moment of the day ending immediately prior to the
Closing Date (but after Kinross shall have waived or confirmed that
all conditions to Closing have been satisfied).
Without limiting the generality of the foregoing, Bema understands
that (x) Kinross may enter into transactions (the "bump
transactions") designed to step up the tax basis in certain capital
property of Bema for purposes of the Tax Act and agrees to
co-operate to a reasonable extent with Kinross in order to
facilitate the
20
bump transactions or other reorganizations or transactions which
Kinross determines would be advisable to enhance the tax efficiency
of the combined corporate group and any anticipated dispositions and
to provide such information on a timely basis and to assist in the
obtaining of any such information in order to facilitate a
successful completion of the bump transactions or any such other
reorganizations or transactions as is reasonably requested by
Kinross; and (y) the transactions described in Schedules G, H and I
could affect Kinross tax planning and Bema agrees that it will
co-operate to cause Newco not to have, following the Effective Time,
any rights against Bema or against any assets of Kinross which
consist of shares of Bema or any assets held by Bema directly or
indirectly.
If the transactions contemplated herein are not consummated (other
than as a result of a breach of this Agreement or the Definitive
Agreement by Bema), Kinross will indemnify Bema and the Bema
Subsidiaries for any and all losses, costs and expenses (including
reasonable legal fees and disbursements) incurred in respect of any
proposed or actual Pre-Acquisition Reorganization (including in
respect of any reversal, modification or termination of a
Pre-Acquisition Reorganization).
(y) Stock Exchange Listing and De-listing. Bema shall cooperate with
Kinross and use reasonable commercial efforts to take, or cause to
be taken, all actions, and do or cause to be done all things,
reasonably necessary, proper or advisable on its part under
applicable Laws and rules and policies of the NYSE, TSX and AIM to
enable the delisting by Bema of the Bema Common Shares from the
NYSE, TSX and AIM and the deregistration of the Bema Common Shares
under the 1934 Act as promptly as practicable after the Effective
Time.
(z) Affiliates. Prior to the date of the Bema Meeting, Bema shall
provide to Kinross such information and documents as Kinross shall
reasonably request for the purposes of preparing a list of names and
addresses of those "persons" (as such term is defined in Rule 144
under the 0000 Xxx) who are, in the opinion of Kinross, as of the
time of the Bema Meeting, "affiliates" of Bema within the meaning of
Rule 145 under the 1933 Act. Kinross shall provide this list to Bema
in advance of the Bema Meeting. There shall be added to such list
the names and addresses of any other person subsequently identified
by either Kinross or Bema as a person who may be deemed to be such
an affiliate of Bema; provided, however, that no such person
identified by Kinross shall be on the final list of affiliates of
Bema if Kinross shall receive from Bema, on or before the date of
the Bema Meeting, an opinion of counsel reasonably satisfactory to
Kinross to the effect that such person is not such an affiliate.
Bema shall exercise its best efforts to deliver or cause to be
delivered to Kinross, prior to the date of the Bema Meeting, from
each affiliate of Bema identified in the foregoing list (as the same
may be supplemented as aforesaid), a letter dated as of the Closing
Date in a form to be agreed in the Definitive Agreement and which
sets forth such affiliate's understanding with respect to the
restrictions imposed on the resale of the Kinross
21
Common Shares it receives in the transactions contemplated herein
(the "Affiliate Shares"), including that (A) such affiliate will be
unable to publicly offer or sell in the United States any Affiliate
Shares except pursuant to an effective registration statement or
exemption from the registration requirements of the 1933 Act, (B)
Kinross has no obligation to register the sale of Affiliate Shares
or otherwise facilitate the availability of any exemption under the
1933 Act and (C) Kinross may implement "stop transfer" instructions,
restrictive legending and similar methods to prevent the public
offer or sale in the United States of Affiliate Shares other than in
accordance with the 1933 Act. Kinross may direct any transfer or
exchange agent not to issue certificates representing Affiliate
Shares to an affiliate of Bema until Kinross has received from such
affiliate such a letter.
8. COVENANTS OF KINROSS:
Kinross hereby covenants and agrees with Bema as follows:
(a) Information for Bema Proxy Circular. Kinross shall promptly furnish
to Bema all information concerning Kinross as may be required or
reasonably requested by Bema for the preparation of the Bema Proxy
Circular and hereby covenants that no information furnished by
Kinross in connection therewith or otherwise in connection with the
consummation of the transactions contemplated herein will contain
any misrepresentation.
(b) Proceedings. In a timely and expeditious manner, Kinross and Kinross
Subsidiaries shall take all such actions and do all such acts and
things as are contemplated herein (including issuing the Kinross
Common Shares contemplated herein) to be taken or done by Kinross
and Kinross Subsidiaries, as applicable.
(c) Copy of Documents. Kinross shall furnish promptly to Bema a copy of
each notice, report, schedule or other document or communication
delivered, filed or received by Kinross in connection with the
transactions contemplated herein, any filing under any applicable
Laws and any dealings or communications with any Governmental
Entity, Securities Authority or stock exchange in connection with,
or in any way affecting, the transactions contemplated by this
Agreement.
(d) Certain Actions Prohibited. Other than as disclosed in the Kinross
Disclosure Letter or in contemplation of or as required to give
effect to the transactions contemplated herein, and, except where
doing so would not have a Material Adverse Effect on Kinross,
Kinross shall not, without the prior written consent of Bema, which
consent shall not be unreasonably withheld or delayed, directly or
indirectly do or permit to occur any of the following:
(i) issue, sell, pledge, lease, dispose of, encumber or create
any Encumbrance on or agree to issue, sell, pledge, lease,
dispose of, or encumber or create any Encumbrance on, or
permit a Kinross Subsidiary to issue, sell, pledge, lease,
dispose of, encumber or create any
22
Encumbrance on or agree to issue, sell, pledge, lease,
dispose of, or encumber or create any Encumbrance on, any
shares of, or any options, warrants, calls, conversion
privileges or rights of any kind to acquire any shares of,
Kinross or any of the Kinross Subsidiaries or any of the
shares representing Kinross' interest in the Kinross
Significant Interest Companies, other than the issue of
Kinross Common Shares pursuant to the exercise of the Kinross
Options or the Kinross Warrants issued and outstanding on the
date hereof, in accordance with their terms as of the date
hereof;
(ii) amend or propose to amend the articles or by-laws (or their
equivalent) of Kinross or any of the Kinross Subsidiaries or
any of the terms of the Kinross Options or the Kinross
Warrants as they exist at the date of this Agreement;
(iii) split, combine or reclassify any of the shares of Kinross or
any of the Kinross Subsidiaries or declare, set aside or pay
any dividend or other distribution payable in cash,
securities, property or otherwise with respect to the shares
of Kinross;
(iv) redeem, purchase or offer to purchase, or permit any of the
Kinross Subsidiaries to redeem, purchase or offer to
purchase, any Kinross Common Shares and, other than pursuant
to the Kinross Share Option Plans, any options or obligations
or rights under existing contracts, agreements and
commitments to purchase Kinross Common Shares; or
(v) agree or commit to do any of the foregoing.
(e) Certain Actions. Other than as disclosed in the Kinross Disclosure
Letter, Kinross shall:
(i) not take any action, shall cause the Kinross Subsidiaries not
to take any action, and shall use its reasonable commercial
efforts not to allow any of the Kinross Significant Interest
Companies to take any action, that would interfere with or be
inconsistent with the completion of the transactions
contemplated by this Agreement or would render, or that could
reasonably be expected to render, any representation or
warranty made by Kinross in this Agreement untrue or
inaccurate at any time prior to the Effective Time if then
made; and
(ii) promptly notify Bema of (A) any Material Adverse Change or
Material Adverse Effect, or any change, event, occurrence or
state of facts which could reasonably be expected to become a
Material Adverse Change or to have a Material Adverse Effect,
in respect of Kinross, (B) any material Governmental Entity
or third person complaints, investigations or hearings (or
communications indicating that the same may be
23
contemplated), (C) any breach by Kinross of any covenant or
agreement contained in this Agreement, and (D) any event
occurring subsequent to the date hereof that would render any
representation or warranty of Kinross contained in this
Agreement, if made on or as of the date of such event or the
Effective Date, to be untrue or inaccurate.
(f) Satisfaction of Conditions. Kinross shall use all commercially
reasonable efforts to satisfy, or cause to be satisfied, all of the
conditions precedent to its obligations to the extent the same is
within its control and to take, or cause to be taken, all other
actions and to do, or cause to be done, all other things necessary,
proper or advisable under all applicable Laws to complete the
transactions contemplated by this Agreement, including using its
commercially reasonable efforts to:
(i) obtain all consents, approvals and authorizations as are
required to be obtained by Kinross or any of the Kinross
Group Companies under any applicable Laws or from any
Governmental Entity which would, if not obtained, materially
impede the completion of the transactions contemplated hereby
or have a Material Adverse Effect on Kinross;
(ii) effect all necessary registrations, filings and submissions
of information requested by Governmental Entities required to
be effected by Kinross or any of the Kinross Group Companies
in connection with the transactions contemplated by this
Agreement and participate, and appear in any proceedings of,
any party hereto before any Governmental Entity;
(iii) oppose, lift or rescind any injunction or restraining order
or other order or action challenging or affecting this
Agreement, the transactions contemplated hereby or seeking to
stop, or otherwise adversely affecting the ability of the
parties hereto to consummate, the transactions contemplated
hereby;
(iv) fulfill all conditions and satisfy all provisions of this
Agreement required to be fulfilled or satisfied by it; and
(v) cooperate with Bema in connection with the performance by
Bema of its obligations hereunder, provided however that the
foregoing shall not be construed to obligate Kinross to pay
or cause to be paid any monies or to cause any liability to
be incurred to cause such performance to occur.
(g) Refrain from Certain Actions. Other than as disclosed in the Kinross
Disclosure Letter, Kinross shall not take any action, refrain from
taking any action (subject to commercially reasonable efforts), or
permit any action to be taken or not taken, inconsistent with the
provisions of this Agreement or which could reasonably be expected
to materially impede the completion of the transactions contemplated
hereby or which could have a Material Adverse Effect on Kinross,
provided that where Kinross is required to take any such action or
refrain from taking such
24
action (subject to commercially reasonable efforts) as a result of
this Agreement, it shall immediately notify Bema in writing of such
circumstances.
(h) Cooperation. Kinross shall make, or cooperate as necessary in the
making of, all necessary filings and applications under all
applicable Laws required in connection with the transactions
contemplated hereby and take all reasonable action necessary to be
in compliance with such Laws.
(i) Representations. Kinross shall use commercially reasonable efforts
to conduct its affairs and to cause the Kinross Subsidiaries to
conduct their affairs so that all of the representations and
warranties of Kinross contained herein shall be true and correct on
and as of the Effective Date as if made on and as of such date.
(j) Information. Until the date of the Definitive Agreement, Kinross
shall continue to make available and cause to be made available to
Bema and the agents and advisors thereto all documents, agreements,
corporate records and minute books as may be necessary to enable
Bema to effect a thorough examination of Kinross and the Kinross
Group Companies and the business, properties and financial status
thereof and shall cooperate with Bema in securing access for Bema to
any documents, agreements, corporate records or minute books not in
the possession or under the control of Kinross. Subject to
applicable Laws, until the date of the Definitive Agreement, Kinross
shall, and shall cause the Kinross Subsidiaries to, and shall use
its reasonable commercial efforts to cause the Kinross Significant
Interest Companies to, afford officers, employees, counsel,
accountants and other authorized representatives and advisors of
Bema reasonable access, during normal business hours from the date
hereof until the earlier of the date of the Definitive Agreement or
the termination of this Agreement, to the properties, books,
contracts and records as well as to the management personnel of
Kinross and the Kinross Group Companies, and, during such period,
Kinross shall, and shall cause the Kinross Subsidiaries to, and
shall use its reasonable commercial efforts to cause the Kinross
Significant Interest Companies to, furnish promptly to Bema all
information concerning the business, properties and personnel of
Kinross and the Kinross Group Companies as Bema may reasonably
request provided however that the disclosure of personal information
is done in compliance with applicable Laws relating to privacy and
does not include disclosure of personnel files or medical
information.
(k) Closing Documents. Kinross shall execute and deliver, or cause to be
executed and delivered at the closing of the transactions
contemplated hereby such customary agreements, certificates,
opinions, resolutions and other closing documents as may be required
by Bema, all in form satisfactory to Bema, acting reasonably.
(l) Employment Indemnification and Insurance. Kinross hereby covenants
and agrees that following the Effective Time it will honour all Bema
employment arrangements in effect on the date of this Agreement,
provided that Kinross has
25
been given full written disclosure regarding the terms of such
arrangements prior to the date hereof. Kinross further covenants and
agrees that all rights to indemnification or exculpation in favour
of the current and former directors and officers of Bema and the
other Bema Subsidiaries described in the Bema Disclosure Letter
shall be honoured by Kinross but only to the extent so described and
Kinross will, or will cause Bema and its subsidiaries to, maintain
in effect without any reduction in scope or coverage for six years
from the Effective Time customary policies of directors' and
officers' liability insurance providing protection comparable to the
protection provided by the policies maintained by Bema and its
subsidiaries which are in effect immediately prior to the Effective
Time and providing protection in respect of claims arising from
facts or events which occurred on or prior to the Effective Time;
provided, however, that prior to the Effective Time Bema may, in the
alternative, purchase run off directors' and officers' liability
insurance for a period of up to six years from the Effective Time.
(m) Bema Options.
(i) Kinross acknowledges and agrees that the Bema Share Option
Plans and the agreements evidencing the grant of the Bema
Options shall continue in effect on the same terms and
conditions (subject to the adjustments required after giving
effect to the Arrangement) except that (A) the vesting period
shall be accelerated so that the Bema Options vest upon the
change of control resulting from the transactions
contemplated herein, and (B) a Bema employee who is
terminated or a Bema director who ceases to be a director
within 18 months following the Effective Time may exercise
his/her options during the period ending on the first to
occur of (x) one year following termination of employment or
ceasing to be a director, and (y) the expiry of the relevant
Bema Option. Alternatively, Kinross shall issue options to
replace the Bema Options, provided such options to purchase
Kinross Common Shares have terms and conditions substantially
similar to the original Bema Options, amended as provided
above, and are designed to meet the requirements under
subsection 7(1.4) of the Tax Act.
(ii) Kinross shall take all corporate action necessary to reserve
for issuance a sufficient number of Kinross Common Shares for
delivery upon the exercise of the Bema Options assumed (or
upon the exercise of the options issued to replace the Bema
Options) in accordance with this section.
(iii) Kinross shall prepare and file with the Securities
Authorities, and the stock exchanges on which Kinross Common
Shares are listed, all necessary reports, applications or
other documents and pay all fees required in order to permit
the issuance of Kinross Common Shares upon the exercise of
Bema Options and the free, unrestricted transferability of
26
such shares after such issuance, subject to restrictions
placed upon "control persons" and "affiliates" as defined in
Rule 144 under the 1933 Act, and to obtain the conditional
listing approval of the TSX and the NYSE in respect of such
Kinross Common Shares.
(n) Bema Warrants.
(i) Kinross covenants and agrees that on the Closing Date, it
will execute supplemental indentures by which it will, at the
Effective Time, assume the obligations of Bema to perform and
observe each covenant and condition contained in each of the
Bema Warrant indentures in accordance with its terms (and
which supplemental indentures will reflect the fact that the
Bema Warrants shall become exercisable for the Share
Consideration post transaction) and shall take all corporate
action necessary to reserve for issuance a sufficient number
of Kinross Common Shares for delivery upon exercise of the
Bema Warrants referred to therein (subject to the adjustments
required after giving effect to the Arrangement).
(ii) Kinross shall prepare and file with the Securities
Authorities, and the stock exchanges on which Kinross Common
Shares are listed, all necessary reports, applications or
other documents and pay all fees required in order to permit
the issuance of Kinross Common Shares upon the exercise of
Bema Warrants and the free, unrestricted transferability of
such shares after such issuance, subject to restrictions
placed upon "affiliates" as defined in Rule 144 under the
1933 Act, or "control persons" generally or persons otherwise
engaged in a distribution for purposes of the 1933 Act, and
to obtain the conditional listing approval of the TSX and the
NYSE in respect of such Kinross Common Shares.
9. MUTUAL CONDITIONS OF TRANSACTION:
The obligations of Kinross and Bema to complete the transactions contemplated by
this Agreement shall be subject to the following conditions:
(a) each of Kinross and Bema shall be satisfied in its sole and absolute
discretion, prior to the date of the Definitive Agreement, that as a
result of its due diligence investigations on the other party
(notwithstanding any due diligence investigations previously
conducted), there is no fact with respect to the other party that
would have a Material Adverse Effect on the other party and that has
not been disclosed as of the date hereof in the Bema Documents filed
on SEDAR or the Kinross Documents filed on SEDAR, as the case may be
(without giving effect to any disclosure contained in "Risk Factors"
or similar sections in such Bema Documents or Kinross Documents).
Unless Kinross or Bema provides written notice to the other of them
prior to signing the Definitive Agreement that it is not so
satisfied with the results of its due diligence investigations on
the other
27
of them, each of Kinross and Bema shall then be deemed to be
satisfied that, based on the results of its due diligence
investigations on the other party, there is no such fact with
respect to the other party;
(b) the Bema Required Vote shall have been obtained at the Bema Meeting;
(c) the Effective Time shall be on or before the Completion Deadline;
(d) there shall not be in force any Laws, ruling, order or decree, and
there shall not have been any action taken under any Laws or by any
Governmental Entity or other regulatory authority, that makes it
illegal or otherwise directly or indirectly restrains, enjoins or
prohibits the consummation of the transactions contemplated herein
in accordance with the terms hereof or results or could reasonably
be expected to result in a judgment, order, decree or assessment of
damages, directly or indirectly, relating to the transactions
contemplated herein which has a Material Adverse Effect on Bema or
Kinross;
(e) the TSX and the NYSE shall have conditionally approved the listing
thereon of the Kinross Common Shares to be issued pursuant to the
transactions contemplated herein (including the Kinross Common
Shares that, as a result of the transactions contemplated herein,
will be issuable upon the exercise of the Bema Options and the Bema
Warrants) as of the Effective Date, or as soon as possible
thereafter, subject only to compliance with the usual requirements
of the TSX and NYSE, as applicable;
(f) (i) all consents, waivers, permits, exemptions, orders and approvals
of, and any registrations and filings with, any Governmental Entity
and the expiry, waiver or termination of any waiting periods, in
connection with, or required to permit, the completion of the
transactions contemplated herein, and (ii) all third person and
other consents, waivers, permits, exemptions, orders, approvals,
agreements and amendments and modifications to agreements,
indentures or arrangements shall have been obtained or received on
terms that are reasonably satisfactory to each party hereto, except
where the failure to obtain such consents, waivers, permits,
exemptions, orders or approvals, agreements, amendments or
modifications or the non-expiry of such waiting periods would not,
either individually or in the aggregate, have a Material Adverse
Effect on Bema or Kinross or materially impede the completion of the
transactions contemplated herein; and
(g) this Agreement shall not have been terminated pursuant to the terms
hereof.
The foregoing conditions are for the mutual benefit of the parties hereto and
may be waived in respect of a party hereto, in whole or in part, by such party
hereto in writing at any time. If any such conditions shall not be complied with
or waived as aforesaid on or before the Completion Deadline or, if earlier, the
date required for the performance thereof, or become incapable of being
satisfied prior to then, then any party hereto may terminate this Agreement by
written
28
notice to the other party in circumstances where the failure to satisfy any such
condition is not the result, directly or indirectly, of a breach of this
Agreement by such rescinding party hereto.
10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF KINROSS:
Subject to paragraph 13, the obligation of Kinross to complete the transactions
contemplated herein shall be subject to the satisfaction of the following
conditions:
(a) the representations and warranties made by Bema in the Definitive
Agreement which are qualified by the expression "Material Adverse
Change" or "Material Adverse Effect" or as to materiality shall be
true and correct as of the Closing Date as if made on and as of such
date (except to the extent that such representations and warranties
speak as of an earlier date, in which event such representations and
warranties shall be true and correct as of such earlier date), and
all other representations and warranties made by Bema in the
Definitive Agreement which are not so qualified shall be true and
correct in all material respects as of the Closing Date as if made
on and as of such date (except to the extent that such
representations and warranties speak as of an earlier date, in which
event such representations and warranties shall be true and correct
as of such earlier date and except for representation (l) in
Schedule J, which shall be true and correct as of the Closing Date
as if made on and as of such date), in either case, except where any
failures or breaches of representations and warranties would not
either individually or in the aggregate, in the reasonable judgment
of Kinross, have a Material Adverse Effect on Bema, and Bema shall
have provided to Kinross a certificate of two officers thereof
certifying such accuracy or lack of Material Adverse Effect on the
Closing Date;
(b) from the date of this Agreement to the Closing Date, there shall not
have occurred, and neither Bema nor any of the Bema Subsidiaries
shall have incurred or suffered, a Material Adverse Change or any
one or more changes, effects, events, occurrences or states of facts
that, either individually or in the aggregate, have a Material
Adverse Effect on Bema;
(c) Bema shall have complied in all material respects with its covenants
in the Definitive Agreement and Bema shall have provided to Kinross
a certificate of two officers thereof certifying that, as of the
Closing Date, Bema has so complied with its covenants in the
Definitive Agreement;
(d) each of the directors and the management of Bema designated by
Kinross shall have entered into a support agreement with Kinross in
a form acceptable to Kinross, acting reasonably, providing, among
other things, for a covenant from each of the directors and officers
of Bema to vote the Bema Common Shares beneficially owned or
controlled by them in favour of the transactions contemplated
herein, and none of such directors or management of Bema shall have
breached, in any material respect, any of the representations,
warranties and covenants thereof;
29
(e) the directors of Bema and each of the Bema Group Companies shall
have adopted all necessary resolutions and all other necessary
corporate action shall have been taken by Bema and the Bema Group
Companies to permit the consummation of the transactions
contemplated herein; and
(f) Bema Shareholders holding no more than 5% of the outstanding Bema
Common Shares shall have exercised the right to dissent in respect
of the transactions contemplated herein (and not withdrawn such
exercise) and Kinross shall have received a certificate dated the
day immediately preceding the Effective Date of two officers of Bema
to such effect.
The foregoing conditions are for the benefit of Kinross and may be waived, in
whole or in part, by Kinross in writing at any time. If any of such conditions
shall not be complied with or waived by Kinross on or before the Completion
Deadline or, if earlier, the date required for the performance thereof, or
become incapable of being satisfied prior to then, then Kinross may terminate
this Agreement by written notice to Bema in circumstances where the failure to
satisfy any such condition is not the result, directly or indirectly, of a
breach of this Agreement by Kinross.
11. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BEMA:
Subject to paragraph 13, the obligations of Bema to complete the transactions
contemplated herein shall be subject to the satisfaction of the following
conditions:
(a) the representations and warranties made by Kinross in the Definitive
Agreement which are qualified by the expression "Material Adverse
Change" or "Material Adverse Effect" or as to materiality shall be
true and correct as of the Closing Date as if made on and as of such
date (except to the extent that such representations and warranties
speak as of an earlier date, in which event such representations and
warranties shall be true and correct as of such earlier date), and
all other representations and warranties made by Kinross in the
Definitive Agreement which are not so qualified shall be true and
correct in all material respects as of the Closing Date as if made
on and as of such date (except to the extent that such
representations and warranties speak as of an earlier date, in which
event such representations and warranties shall be true and correct
as of such earlier date and except for representation (j) in
Schedule K, which shall be true and correct as of the Closing Date
as if made on and as of such date), in either case, except where any
failures or breaches of representations and warranties would not
either individually or in the aggregate, in the reasonable judgment
of Bema, have a Material Adverse Effect on Kinross, and Kinross
shall have provided to Bema a certificate of two officers thereof
certifying such accuracy or lack of Material Adverse Effect on the
Closing Date;
(b) from the date of this Agreement to the Closing Date, there shall not
have occurred, and Kinross or any of the Kinross Subsidiaries shall
not have incurred or suffered, a Material Adverse Change or any one
or more changes, effects,
30
events, occurrences or states of facts that, either individually or
in the aggregate, have a Material Adverse Effect on Kinross;
(c) Kinross shall have complied in all material respects with its
covenants in the Definitive Agreement and Kinross shall have
provided to Bema a certificate of two officers thereof, certifying
that, as of the Closing Date, Kinross has so complied with its
covenants in the Definitive Agreement; and
(d) the directors of Kinross and each of the Kinross Group Companies
shall have adopted all necessary resolutions and all other necessary
corporate action shall have been taken by Kinross and the Kinross
Group Companies to permit the consummation of the transactions
contemplated herein.
The foregoing conditions are for the benefit of Bema and may be waived, in whole
or in part, by Bema in writing at any time. If any of such conditions shall not
be complied with or waived by Bema on or before the Completion Deadline or, if
earlier, the date required for the performance thereof, or become incapable of
being satisfied prior to then, then Bema may terminate this Agreement by written
notice to Kinross in circumstances where the failure to satisfy any such
condition is not the result, directly or indirectly, of a breach of this
Agreement by Bema.
12. COMPLETION DATE:
(a) Kinross and Bema shall use their best efforts to enter into a
Definitive Agreement on or before December 18, 2006.
(b) Kinross and Bema shall use their reasonable commercial efforts to
complete the transactions contemplated herein by the Completion
Deadline.
13. NOTICE AND CURE PROVISIONS:
Each party hereto shall give prompt notice to the other party of the occurrence,
or failure to occur, at any time from the date hereof until the Effective Time,
of any event or state of facts which occurrence or failure would, would be
likely to or could:
(a) cause any of the representations or warranties of such party hereto
contained herein to be untrue or inaccurate in any respect on the
date hereof or on the Effective Time;
(b) result in the failure to comply with or satisfy any covenant or
agreement to be complied with or satisfied by such party hereto
prior to the Effective Time; or
(c) result in the failure to satisfy any of the conditions precedent in
favour of the other parties hereto favour contained in Sections 9,
10 or 11 hereof, as the case may be.
31
Subject as herein provided, a party hereto may elect not to complete the
transactions contemplated hereby pursuant to the conditions contained in
Sections 9, 10, 11 hereof or exercise any termination right arising therefrom;
provided, however, that (i) promptly and in any event prior to the filing of the
articles of arrangement with the Director under the CBCA, the party hereto
intending to rely thereon has delivered a written notice to the other parties
hereto specifying in reasonable detail the breaches of covenants or
untruthfulness or inaccuracy of representations and warranties or other matters
which the party hereto delivering such notice is asserting as the basis for the
exercise of the termination right, as the case may be, and (ii) if any such
notice is delivered, and a party hereto is proceeding diligently, at its own
expense, to cure such matter, if such matter is susceptible to being cured, the
party hereto which has delivered such notice may not terminate this Agreement
until the earlier of the Completion Deadline and the expiration of a period of
15 days from date of delivery of such notice. If such notice has been delivered
prior to the date of the Bema Meeting, the Bema Meeting shall be adjourned or
postponed until the expiry of such period.
14. NO SOLICITATION:
During the period commencing on the date hereof and continuing until the
Termination Date, Bema agrees that neither it nor its affiliates, advisors or
representatives (including any person or entity, directly or indirectly, through
one or more intermediaries, controlled by or under common control with Bema)
will, directly or indirectly, (i) solicit or otherwise facilitate (including by
way of furnishing information), initiate, encourage, engage in or respond to any
inquiries or proposals regarding an Acquisition Proposal, (ii) encourage or
participate in any discussions or negotiations regarding any Acquisition
Proposal, (iii) agree to, approve or recommend an Acquisition Proposal, (iv)
withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify,
in any manner, the approval or recommendation of the Bema board of directors or
any committee thereof of this Agreement; (v) approve or recommend, or remain
neutral with respect to, or propose publicly to approve or recommend, or remain
neutral with respect to, any Acquisition Proposal (it being understood that
publicly taking no position or a neutral position with respect to an Acquisition
Proposal until 15 calendar days following the formal commencement of such
Acquisition Proposal shall not be considered to be in violation of this
paragraph 13, or (vi) enter into any agreement related to an Acquisition
Proposal; provided, however, that subject as hereinafter provided, nothing shall
prevent Bema from furnishing non-public information to, or entering into a
confidentiality agreement and/or participating in discussions or negotiations
with, any person in response to a bona fide unsolicited written Acquisition
Proposal that is submitted by such person after the date hereof which is not
withdrawn if (A) the directors of Bema conclude in good faith, based on
information then available and after consultation with Bema's financial advisors
that such Acquisition Proposal constitutes a Superior Proposal or could
reasonably be expected to result in a Superior Proposal; and (B) prior to
providing any non-public information to such person in connection with such
Acquisition Proposal, the Bema board of directors receives from such person an
executed confidentiality agreement which includes a standstill provision that
restricts such person from acquiring, or publicly announcing an intention to
acquire, any securities or assets of Bema (other than pursuant to a Superior
Proposal) for a period of not less than one year from the date of such
confidentiality agreement and Bema sends a copy of any such confidentiality
agreement to
32
Kinross promptly upon its execution and promptly provides Kinross a
list of, or in the case of information that was not previously made available to
Kinross, copies of, any information provided to such person.
Concurrent with the execution hereof Bema shall advise Kinross of any current
Acquisition Proposal and Bema shall promptly (and in any event within 24 hours)
notify Kinross, first orally and then in writing, of any future Acquisition
Proposal which any director, senior officer or agent thereof is or becomes aware
of, any amendment to any such proposal or any request for non-public information
relating to Bema or the Bema Subsidiaries. Such notice shall include a
description of the material terms and conditions of any such Acquisition
Proposal and the identity of the person making such proposal, inquiry, request
or contact.
Bema shall immediately after the execution hereof terminate all existing
discussions or negotiations with any person (other than Kinross) with respect to
any potential Acquisition Proposal.
15. SUPERIOR PROPOSALS:
(a) Bema or the directors thereof may take any action that is prohibited
by subparagraphs 14(iii), (iv), (v) or (vi) in respect of any
Acquisition Proposal only if:
(i) such Acquisition Proposal constitutes a Superior Proposal;
(ii) such Acquisition Proposal is in writing and Kinross has been
provided with a copy of the document containing such Superior
Proposal;
(iii) five business days have elapsed from the date on which
Kinross received written notice of the determination of Bema
or the directors thereof to accept, approve or recommend or
to enter into an agreement in respect of such Superior
Proposal;
(iv) in the event that Kinross has proposed to amend this
Agreement during the five business day period referred to
above, the Bema board of directors (after receiving advice
from its financial advisors and outside legal counsel) shall
have determined in good faith that the Acquisition Proposal
continues to constitute a Superior Proposal after taking into
account such amendments;
(v) Bema's board of directors, after consultation with outside
legal counsel, determines in good faith that the failure to
take such action would be inconsistent with its fiduciary
duties under all applicable Laws; and
(vi) Bema has terminated this Agreement pursuant to paragraph 17
hereof and Bema has made the payment contemplated by, and in
accordance with, paragraph 16 hereof.
33
(b) Bema acknowledges that each successive modification to any
Acquisition Proposal shall constitute a new Acquisition Proposal for
purposes of the requirement under subparagraph 15(a)(iii) hereof and
shall initiate a new ten-business day period.
(c) If the Bema Proxy Circular has been sent to Bema Shareholders prior
to the expiry of the five-business day period set forth in
subparagraph 15(a)(iii) and, during such period, Kinross requests in
writing that the Bema Meeting proceed, unless otherwise ordered by
the Court, Bema may continue to take all reasonable steps necessary
to hold the Bema Meeting and to cause the transactions contemplated
herein to be voted on at the Bema Meeting, or postpone or adjourn
the Bema Meeting at the Bema Meeting (but not beforehand without
Kinross' consent) to a date acceptable to Bema, acting reasonably,
which shall not be later than twenty days after the scheduled date
of the Bema Meeting and shall, in the event that Kinross and Bema
amend the terms of this Agreement pursuant to subparagraph
15(a)(iii), ensure that the details of such amended Agreement are
communicated to the Bema Shareholders prior to the resumption of the
adjourned Bema Meeting.
(d) Where at any time before the Bema Meeting, Bema has provided Kinross
with a notice under subparagraph 15(a), an Acquisition Proposal has
been publicly disclosed or announced, and the five business day
period under subparagraph 15(a)(iii) has not elapsed, then, subject
to applicable Laws, at Kinross' request, Bema will postpone or
adjourn the Bema Meeting at the Bema Meeting (but not beforehand
without Kinross' consent) to a date acceptable to Kinross, acting
reasonably, which shall not be later than twenty days after the
scheduled date of the Bema Meeting and shall, in the event that
Kinross and Bema amend the terms of this Agreement pursuant to
subparagraph 15(a)(iii), ensure that the details of such amended
Agreement are communicated to the Bema Shareholders prior to the
resumption of the adjourned Bema Meeting.
16. TERMINATION FEE:
(a) If:
(i) Bema terminates this Agreement in accordance with paragraph
15 hereof;
(ii) Bema or Kinross terminates this Agreement in accordance with
subparagraph 17(a)(ii) hereof and, within 45 days following
the effective date of such termination, Bema or its board of
directors accepts, approves or recommends, or enters into an
agreement with respect to, an Acquisition Proposal; or
(iii) an Acquisition Proposal (a "Pending Bema Acquisition
Proposal") shall have been publicly announced and such
Pending Bema Acquisition
34
Proposal shall not have been publicly withdrawn prior to the
Bema Meeting, if any, and, thereafter the Bema Required Vote
shall not have been obtained (including if the Bema Meeting
is not held) and Bema completes such Pending Bema Acquisition
Proposal within 12 months following the Completion Deadline,
(any such event being a "Triggering Event"), then Bema shall pay
Kinross an amount in cash equal to $79 million in immediately
available funds to an account designated by Kinross. Such payment
shall be made (a) in the case of a Triggering Event described in
Subparagraph 16(a)(i), concurrently with such termination (and shall
be a condition to the effectiveness of such termination by Bema),
(b) in the case of a Triggering Event described in Subparagraph
16(a)(ii), concurrently with the acceptance approval, recommendation
or entering into of an agreement with respect to, an Acquisition
Proposal, and (c) in the case of a Triggering Event described in
Subparagraph 16(a)(iii), concurrently with completion of the Pending
Bema Acquisition Proposal. The obligation to make any payment
required by this paragraph shall survive any termination of this
Agreement. Bema hereby acknowledges that the payment amount set out
in this subparagraph is a payment of liquidated damages which is a
pre-estimate of the damages which Kinross will suffer or incur as a
result of the event giving rise to such damages and the resultant
non-completion of the transactions contemplated herein and is not a
penalty. Bema hereby irrevocably waives any right it may have to
raise as a defence that any such liquidated damages are excessive or
punitive. Upon receipt of payment of such amount by Kinross, Kinross
shall have no further claim against Bema in respect of the failure
to complete the transactions contemplated herein.
(b) Bema shall pay to Kinross, or cause to be paid to Kinross, in
immediately available funds to an account designated by Kinross, the
reasonable documented expenses of Kinross and its affiliates
incurred in connection with the transactions contemplated hereby not
to exceed $7.5 million, in the event that Kinross shall have
terminated this Agreement pursuant to subparagraph 17(b) hereof.
Such payment shall be in addition to, and not in substitution of,
any other rights which Kinross may have in respect of any breach by
Bema of its covenants hereunder.
(c) Kinross shall pay to Bema, or cause to be paid to Bema, in
immediately available funds to an account designated by Bema, the
reasonable documented expenses of Bema and its affiliates incurred
in connection with the transactions contemplated hereby not to
exceed $7.5 million, in the event that Bema shall have terminated
this Agreement pursuant to subparagraph 17(c) hereof. Such payment
shall be in addition to, and not in substitution of, any other
rights which Bema may have in respect of any breach by Kinross of
its covenants hereunder.
35
17. TERMINATION:
(a) This Agreement may be terminated by either Bema or Kinross (i) in
the circumstances permitted by paragraph 15 hereof, or (ii) if the
Definitive Agreement is not executed by December 18, 2006.
(b) This Agreement may be terminated by Kinross if Kinross is not in
material breach of its obligations under this Agreement and Bema
breaches any of its representations, warranties, covenants or
agreements contained in this Agreement, which breach would give rise
to the failure of a condition set forth in paragraph 9 or 10.
(c) This Agreement may be terminated by Bema if Bema is not in material
breach of its obligations under this Agreement and Kinross breaches
any of its representations, warranties, covenants or agreements
contained in this Agreement, which breach would give rise to the
failure of a condition set forth in paragraph 9 or 11.
(d) This Agreement shall be deemed to be terminated upon payment by Bema
of the termination fee to Kinross pursuant to the Triggering Event
described in subparagraph 16(a)(iii).
(e) Notwithstanding anything herein to the contrary, the obligations and
rights of the parties under paragraph 16 hereof shall survive the
termination of this Agreement.
18. MISCELLANEOUS:
(a) Notices. Any notice, consent, waiver, direction or other
communication required or permitted to be given under this Agreement
by a party hereto shall be in writing and shall be delivered by hand
to the party hereto to which the notice is to be given at the
following address or sent by facsimile to the following numbers or
to such other address or facsimile number as shall be specified by a
party hereto by like notice. Any notice, consent, waiver, direction
or other communication aforesaid shall, if delivered, be deemed to
have been given and received on the date on which it was delivered
to the address provided herein (if a Business Day or, if not, then
the next succeeding Business Day) and if sent by facsimile be deemed
to have been given and received at the time of receipt (if a
Business Day or, if not, then the next succeeding Business Day)
unless actually received after 5:00 p.m. (Toronto time) at the point
of delivery in which case it shall be deemed to have been given and
received on the next Business Day.
The address for service of each of the parties hereto shall be as
follows:
(i) if to Bema:
Bema Gold Corporation
36
Suite 3100, Three Bentall Centre
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxx, XX X0X 0X0
Attention: Xxxxx X. Xxxxxxx and Corporate Secretary
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Stikeman Elliott LLP
0000 Xxxxxxxx Xxxxx Xxxx
000 Xxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Attention: Xxxxxxx X. Xxxxxxxxxxx and Xxxx X. Xxxxxxxxx
Facsimile: (000) 000-0000
(ii) if to Kinross:
Kinross Gold Corporation
52nd Floor, Scotia Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Corporate Secretary
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to:
Blake, Xxxxxxx & Xxxxxxx LLP
2800 - 000 Xxx Xxxxxx
Xxxxxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxx
Facsimile: (000) 000-0000
(b) Costs. Except as provided above under paragraph 16 and in respect of
any fees associated with any filings made pursuant to applicable
Antitrust Laws, which fees shall be paid by Kinross, each of Kinross
and Bema shall pay its own costs and expenses (including all legal,
accounting and financial advisory fees and expenses) in connection
with the transactions contemplated herein including expenses related
to the preparation, execution and delivery of this Agreement and the
documents required hereunder.
37
(c) Public Announcements. Kinross and Bema agree to make a joint press
release with respect to the transactions contemplated herein as soon
as practicable after the execution by them of this Agreement and to
otherwise coordinate the public disclosure and presentations made by
them with respect to the transactions contemplated herein. Kinross
and Bema further agree that there will be no public announcement or
other disclosure of the transactions contemplated herein or of the
matters dealt with herein unless they have mutually agreed thereto
or unless otherwise required by applicable Laws or by regulatory
instrument, rule or policy based on the advice of counsel. If either
Kinross or Bema is required by applicable Laws or regulatory
instrument, rule or policy to make a public announcement with
respect to the transactions contemplated herein, such party hereto
will provide as much notice to the other of them as reasonably
possible, including the proposed text of the announcement.
(d) Law. This letter shall be governed by and be construed in accordance
with the laws of the Province of Ontario and Kinross and Bema
irrevocably attorn to the exclusive jurisdiction of the courts of
such province.
(e) Remedies. The parties hereto acknowledge and agree that an award of
money damages may be inadequate for any breach of this Agreement by
any party hereto or its representatives and advisors and that such
breach may cause the non-breaching party hereto irreparable harm.
Accordingly, the parties hereto agree that, in the event of any such
breach or threatened breach of this Agreement by one of the parties
hereto, Bema (if Kinross is the breaching party) or Kinross (if Bema
is the breaching party) will be entitled, without the requirement of
posting a bond or other security, to seek equitable relief,
including injunctive relief and specific performance. Subject to any
other provision hereof including, without limitation, paragraph 16
hereof, such remedies will not be the exclusive remedies for any
breach of this Agreement but will be in addition to all other
remedies available hereunder or at law or in equity to each of the
parties hereto.
(f) Amendment. This Agreement may, at any time and from time to time be
amended by written agreement of the parties hereto.
(g) Assignment. Neither party hereto may assign its rights or
obligations under this Agreement without the prior written consent
of the other party hereto.
(h) Time of the Essence. Time shall be of the essence in this Agreement.
(i) Binding Effect. This Agreement shall be binding upon and shall enure
to the benefit of the parties hereto and their respective successors
and permitted assigns.
(j) Waiver. Any waiver or release of any of the provisions of this
Agreement, to be effective, must be in writing and executed by the
party hereto granting such waiver or right.
38
(k) Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the
remainder of this Agreement shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
(l) Confidentiality Agreement. The parties acknowledge that the
transactions contemplated by this Agreement are subject to a
confidentiality agreement dated November 5, 2006 between Bema and
Kinross (the "Confidentiality Agreement"), which agreement shall
continue in full force and effect. For greater certainty, any
discussions in connection with this Agreement shall be treated by
the parties hereto as strictly confidential and shall not (without
the prior consent of the other party hereto or as contemplated or
provided herein) be disclosed by either party hereto to any person
other than a director, officer, employee, agent, shareholder or
professional advisor of or to that party hereto with a need to know
for purposes connected with the matters contemplated by this
Agreement and then only on a confidential basis and also on the
basis that the party concerned will be liable for any breach of
confidentiality by a person to whom it makes disclosure. In the
event of a conflict between the provisions hereof and any provision
of the Confidentiality Agreement, the provisions hereof shall
prevail.
(m) Entire Agreement. This Agreement, together with the Confidentiality
Agreement, contains the entire agreement between the parties hereto
with respect to the subject matter hereof and thereof and supersedes
all prior agreements and understandings with respect thereto.
(n) Execution in Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall conclusively be deemed to be
an original and all such counterparts collectively shall be
conclusively deemed to be one and the same.
39
Would you kindly signify your acceptance of the terms contained herein by
executing the enclosed duplicate copy hereof in the place indicated and
thereafter returning such executed copy to Kinross by no later than 8:00 a.m.
Toronto time on Monday, the 6th day of November, 2006, failing which this
Agreement shall be of no force or effect.
KINROSS GOLD CORPORATION
By: "Xxx X. Xxxx"
-------------------------------------
Xxx X. Xxxx
President and Chief Executive Officer
Accepted and agreed as of this 6th day of November, 2006.
BEMA GOLD CORPORATION
By: "Xxxxx X. Xxxxxxx"
-------------------------------------
Xxxxx X. Xxxxxxx
President and Chief Executive Officer
SCHEDULE A
BEMA PROPERTIES
---------------
PROPERTY LOCATION BEMA INTEREST (%)
----------------------- ------------- -----------------
XXXXX XXXXXXX
Xxxx Xxxxxx Xxxxxx Xxxxxx 100%(1)
AFRICA
Petrex South Africa 100%
SOUTH AMERICA
Alderbaran/Cerro Xxxxxx Chile 49%
Quebrada Chile 100%
Xxxxxxx Chile 50%
ASIA
Xxxxxxxx Russia 90%
Kupol Russia 75%
East Pansky Russia 72%(2)
(1) Bema interest held through Victoria Resources Limited
(2) Bema interest held through Consolidated Puma Minerals Corp.
SCHEDULE B
KINROSS PROPERTIES
------------------
PROPERTY LOCATION KINROSS INTEREST (%)
-------- -------- --------------------
NORTH AMERICA
Fort Xxxx USA 100.0%
Round Mtn and area USA 50.0%
Porcupine JV Canada 49.0%
Xxxxxxxxxxx Canada 31.9%
Kettle River USA 100.0%
SOUTH AMERICA
Paracatu Brazil 100.0%
La Coipa Chile 50.0%
Xxxxxxx Chile 50.0%
Crixas Brazil 50.0%
ASIA
Kubaka and area Russia 98.1%
SCHEDULE C
BEMA OPTIONS/BEMA WARRANTS
--------------------------
NUMBER EXERCISE
EXPIRY DATE GRANTED PRICE CDN$ VALUE
-------------- ---------- ---------- ------------
Director and employee stock options April 14, 2016 7,050,000 $ 5.32 $ 37,506,000
Director and employee stock options June 28, 2011 60,000 $ 5.18 $ 310,800
Director and employee stock options Dec. 29, 2008 125,000 $ 4.48 $ 560,000
Director and employee stock options Feb. 13, 2011 1,811,711 $ 4.35 $ 7,880,943
Director and employee stock options April 12, 2014 3,520,000 $ 4.07 $ 14,326,400
Director and employee stock options Oct. 17, 2008 200,000 $ 3.83 $ 766,000
Director and employee stock options Nov. 7, 2009 50,000 $ 3.70 $ 185,000
Director and employee stock options Oct. 31, 2009 50,000 $ 3.64 $ 182,000
Director and employee stock options Jan. 30, 2010 173,000 $ 3.59 $ 621,070
Director and employee stock options Feb. 1, 2010 21,000 $ 3.52 $ 73,920
Director and employee stock options June 9, 2014 55,000 $ 3.46 $ 190,300
Director and employee stock options July 19, 2014 65,000 $ 3.43 $ 222,950
Director and employee stock options Jan 18, 2010 16,668 $ 3.42 $ 57,005
Director and employee stock options April 13, 2015 3,653,334 $ 3.03 $ 11,069,602
Director and employee stock options Aug. 21, 2008 100,000 $ 2.98 $ 298,000
Director and employee stock options July 3, 2010 50,000 $ 2.91 $ 145,500
Director and employee stock options Aug 31, 2010 30,000 $ 2.81 $ 84,300
Director and employee stock options July 10, 2010 300,000 $ 2.79 $ 837,000
Director and employee stock options May 9, 2010 16,667 $ 2.74 $ 45,668
Director and employee stock options May 29, 2010 46,700 $ 2.59 $ 120,953
Director and employee stock options May 15, 2010 50,000 $ 2.42 $ 121,000
Director and employee stock options May 19, 2008 3,419,267 $ 1.49 $ 5,094,708
Director and employee stock options April 19, 2007 500,000 $ 1.04 $ 520,000
EAGC--stock options Oct. 24, 2007 250,000 $ 1.40 $ 350,000
EAGC -Special warrants Oct. 22, 2007 TSX listed spw 23,739,250 $ 1.90 $ 45,104,575
EAGC -bank warrants Oct. 24, 2007 spw 1,500,000 $ 1.40 $ 2,100,000
HVB--Bridge warrants April 28, 2010 500,000 USD 2.8000 $ 1,733,900
HVB -warrants Jan. 24, 2011 100,000 USD 3.3500 $ 414,898
HVB--warrants May 26, 2011 250,000 USD 5.7300 $ 1,774,151
IFC -Warrants re: Kupol loan US$25 million 8,503,401 USD 2.9400 $ 28,999,999
Convertible notes Feb. 26, 2011 15,008,576 USD 4.6640 $ 94,500,000
Warrants attached to Sep 7, 2006 private
placement Sept. 7, 2011 10,580,000 $10.00 $105,800,000
---------- ------------
TOTAL OPTIONS, WARRANTS AND CONVERTIBLE NOTES
OUTSTANDING 81,794,574 $361,996,640
---------- ------------
SCHEDULE D
KINROSS OPTIONS/KINROSS WARRANTS
--------------------------------
PLAN OUTSTANDING(2) VESTED(2)
----------------------------------------------------------------------- -------------- -------------
Warrants (1) issued pursuant to and governed by warrant indenture
dated December 5, 2002. 8,333,333(1) 8,333,333(1)
Incentive Stock Option Plan 2,631,230 830,208
Restricted Share Plan dated February 15, 2001, as amended as of
January 31, 2003, February 28, 2004, May 10, 2004 and December 21, 2005 1,052,320 NIL
Deferred Share Unit Plan dated September 30, 2003, as amended March
27, 2006 106,210.16 106,210.16
(1) 25,000,000 common share purchase warrants of Kinross are outstanding. Each
three common share purchase warrants are exercisable on or before 5:00 p.m.
(eastern standard time) on December 5, 2007 for one Kinross common share at an
exercise price of Cdn.$15.00. The warrants will expire and become null and void
after 5:00 p.m. (eastern standard time) on December 2, 2007.
(2) As of November 5, 2006.
SCHEDULE E
BEMA SIGNIFICANT INTEREST COMPANIES/BEMA SUBSIDIARIES
-----------------------------------------------------
JURISDICTION OF % OWNED DIRECTLY OR INDIRECTLY BY
NAME INCORPORATION BEMA
----------------------------------------- ---------------- ---------------------------------
Bema Gold (Bermuda) Ltd. Bermuda 100%
BGO (Bermuda) Ltd. Bermuda 100%
Minera Bema Gold (Chile) Limitada Chile 100%
Compania Minera Maricunga Chile 50%
Compania Minera San Damian Chile 100%
Compania Xxxxxx Xxxxxx Chile 49%
Bema Gold (US) Inc. Nevada 100%
Arian Resources Limited Barbados 100%
Omsukchansk Mining and Geological Company Russia 90%
Consolidated Puma Minerals Corp. British Columbia 40%(1)
Victoria Resources Limited British Columbia 31%(1)
Consolidated Westview Corporation British Columbia 44%(2)
White Ice Ventures Limited British Virgin
Islands 100%
Kupol Ventures Limited Cyprus 100%
Chukotka Mining & Geological Company Russia 75%(3)
EAGC Ventures Corp. Ontario 100%
Chimera Mines and Minerals Corp. Xxxxxx Xxxxxxx 000%
Xxxxx Xxxxx Xxxxxx (Pty) Ltd. South Africa 100%
Petrex (Proprietary) Ltd. South Africa 100%
Kupol Au-Ag (Barbados) Inc. Barbados 100%
Andean Avasca British Columbia 100%(4)
(1) Publicly traded on the TSX-V
(2) Publicly traded on the NEX board of the TSX-V
(3) 75% less 1 share
(4) The exact legal name of the company is subject to confirmation. The company
was formed in connection with the recently announced joint venture between
Bema and AngloGold Xxxxxxx Limited, pursuant to which the parties agreed to
form a new company to jointly explore mineral opportunities within northern
Columbia. While Bema currently holds 100% of the company, it is intended
that an interest in the company will be transferred to AngloGold Xxxxxxx
Limited pursuant to the terms of a definitive joint venture agreement to be
entered into between the parties.
SCHEDULE F
KINROSS SIGNIFICANT INTEREST COMPANIES/KINROSS SUBSIDIARIES
-----------------------------------------------------------
Where less than all of the outstanding shares of any Kinross Subsidiaries or
outstanding securities representing Kinross' interest in any Kinross Significant
Interest Company are owned directly or indirectly, by Kinross or a Kinross
Subsidiary, the aggregate percentage ownership interest of Kinross and the
Kinross Subsidiaries is disclosed.
LIST OF KINROSS SUBSIDIARIES
JURISDICTION JURISDICTION
------------ ------------
CANADA BRAZIL
TVX (Canada) Inc. TVX Mineracao Ltda
E-Crete Products Inc. - 92% TVX Participacoes Inc.
Kinam (B.C.) Ltd. Montanapar Participacoes Ltda.
Kinam Exploration Canada Ltd. Kinross Empreendimentos e Participacoes S.A.
Crownex Resources (Canada) Ltd. Rio Paracatu Mineracao S.A.
Gold Texas Resources Ltd. CNM Brazil
MCT Mineracao Ltda
UNITED STATES Newinco Comercio e Participacoes Ltda
Kinross Gold U.S.A., Inc.
Enviro-Crete Products Inc. - 92% CHILE
Echo Bay Inc. TVX Minera de Chile Limitada
Echo Bay Minerals Company Compania Nacional de Minera Limitada - 50.1%
Round Mountain Gold Corporation Echo Bay Chile Ltda.
Echo Bay Finance Corporation Kinross Minera Chile Limitada
Sunnyside Gold Corporation Compania Xxxxxx Xxxxx Guanaco - 90%
Echo Bay Alaska Inc.
White Pine Gold Corporation CAYMAN ISLANDS
Echo Bay Management Corporation TVX Cayman Inc.
Echo Bay Exploration Inc. Cayman Newinco Inc.
Kinross Copper Corporation Normandy Cayman Holdco Inc.
Kinross Offshore Services Company Kinross Americas (Cayman) Inc.
Kinross Goldbanks Mining Company Kinross Americas (Cayman) Holdings Inc.
Kinross XxXxxxx Mining Company TVX Investments SA
TVX Delaware, Inc. Cayman Participacoes Inc.
TVX Mineral Hill, Inc. International Gold Mining
Kinam Gold Inc. Miicre Mining Investments Ltd.
Fairbanks Gold Mining Inc. TVX SA
Kinam Exploration Inc. Macaines Mining Properties Ltd.
Guanaco Holdings Inc. TVX Mining Properties Ltd.
Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Gold Corporation OTHER
Xxxxx Mining Company Inc. TVX (Barbados) Inc. (Barbados)
Lassen Gold Mining Inc. TVX Hellas A.E. (Greece)
Wind Mountain Mining Inc. Macedonian Copper Mines S.A. (Greece)
Kinam Chile Credit Corp. Inc. Marwood International Ltd (Bahamas)
Nevada Gold Mining Inc. TVX South America SA (Uruguay)
Luning Gold Inc. Inversiones 871010 C.A. (Venezuela) - 90%
Electrum Resources Corp. Minera Kinross Argentina S.A. (Argentina)
Xxxxx Creek Mining Inc. Kinross Gold Australia Pty. Ltd. (Australia)
Guanaco Mining Company Inc. Echo Bay Barbados Ltd. (Barbados)
Crown Resources Corporation Treasure Valley Holdings Holdings s.r.o. (Czech Rep.)
Gold Capital Corporation Echo Bay Ecuador S.A. (Ecuador)
Crown Resource Corp. of Colorado Omolon Gold Mining Company (Russia) - 98.1%
Gold Texas Resources U.S., Inc. Kinross Ecaudor S.A. (Ecaudor)
Crown Minerals Corporation Kinross El Salvador S.A. (El Salvador)
Kinross Aginskoye Gold Company L.L.C. - 50%
NETHERLANDS
TVX (Netherlands) B.V.
Echo Bay International B.V.
Echo Bay Mexico B.V.
Echo Bay Brazil B.V.
Echo Bay Ecuador B.V.
TVX Dutch Holdings B.V.
LIST OF KINROSS SIGNIFICANT INTEREST COMPANIES
JURISDICTION JURISDICTION
------------ ------------
CANADA CHILE
1126774 Ontario Ltd. - 50% Compania Minera Puren - 32.5%
Compania Xxxxxx Xxxxxx xx Xxx - 00%
XXXXXX XXXXXX SCM Minera La Coipa - 50%
Solitario Resources Corporation - 41.2% Compania Minera Maricunga - 50%
BRAZIL
Mineracao Novo Astro Ltda - 19%
Volta Grande Mineracao Ltda - 50%
Mineracao Serra Grande S.A. - 50%
SCHEDULE G
ASSETS TO BE TRANSFERRED TO NEWCO AND CONSIDERATION THEREFOR
------------------------------------------------------------
Bema, or at the option of Kinross, a subsidiary of Bema to sell the assets
described in i), ii) and iii) below to Newco for aggregate consideration of
US$20 million, US$7 million of which is payable in cash, Newco shares and debt
(as described under "Funding" below) on closing; and US$6.5 million of which is
payable in cash on each of the first and second anniversary dates following
closing:
i) Colombia JV;
ii) Petrex (including existing debt and working capital and hedging
contracts at the Petrex subsidiary level). The parties acknowledge
that if Bema management is unsuccessful in arranging its currently
contemplated restructuring of Petrex with Pamodzi, then, recognizing
that Kinross does not wish to hold Petrex, Newco will acquire Petrex
(including existing debt and working capital and hedging contracts
at the Petrex subsidiary level) pursuant to an alternative
transaction at a price to be negotiated by the parties which price
shall be no less than US$2.5 million;
iii) Subject to complying with applicable Russian law, 50% of Bema's
direct and indirect interest in the Kupol East and West Licenses
("Chukotka Exploration Licenses") (37.5% overall interest) held in a
Russian newco to be established for this purpose;
iv) Newco to assume lease for 31st and 32nd floors at 000 Xxxxxxx Xxxxxx
and to receive all leasehold improvements, furniture, equipment,
supplies, communications and other systems, located in or used in
connection with the premises. Newco to sublease a portion of office
space at 000 Xxxxxxx Xxxxxx to Kinross at mutually agreeable terms;
and
v) Newco to receive an option to purchase from Kinross, a subsidiary of
Kinross or a subsidiary of Bema, the shares in Puma currently held
by a subsidiary of Bema at any time for up to 12 months after
closing at the 30 day volume weighted average price less 10%. Upon
closing and in return for continuing to provide all management
services to Puma, all of the Puma debt owed to Bema or a Bema
subsidiary (approximately $2.0 million) will be transferred as debt
to Newco. Newco will not call on the debt for at least 12 months
after closing. At the option of Kinross, any debt owed by Puma to
Bema will be sold to Kinross, a subsidiary of Kinross or a
subsidiary of Bema.
Newco and its subsidiaries shall provide security only on the Assets in respect
of the payments to be made by Newco on the first and second anniversaries of
closing and the debt referred to in (i) through (iii) above.
2
Newco to provide Bema, the subsidiary of Bema, if applicable, and Kinross with
full release and indemnity with respect to the purchased assets.
Newco to agree that it will not, during the period of 2 years next following the
closing date of the asset sale, directly or indirectly solicit for employment or
employ any party who is now employed by Bema in Russia or who performs functions
on behalf of Bema which are similar to those ordinarily performed by employees
in Russia, other than those employees of Bema who are shareholders of Newco on
the closing date of the asset sale. This prohibition will not extend to general
solicitations of a public nature provided that Newco has not specifically
directed its efforts toward the employees or contract employees of Bema.
Prior to the Definitive Agreement Date Newco and Bema will agree to what the
name of Newco will be and the parties acknowledge that Newco will be entitled to
use the Bema logo.
Funding: Upon closing of the asset sale, Newco to pay Bema, or a subsidiary of
Bema if Kinross so elects, US $7.0 million by issuing to Bema 9.9% of the number
of shares of Newco issued pursuant to two Newco private placements to be
completed prior to the closing of the asset sale, estimated to total
approximately 2.2 million Newco shares valued at US$0.02 and approximately 1.49
million Newco shares valued at US$0.40 such that Bema will own 9.9% of Newco pro
forma the proposed Newco private placements and approximately US$1.41 million in
cash and US$5.0 million in debt which debt will be repayable upon the earlier of
an Newco initial public offering ("IPO") of its securities and 12 months
following closing of the asset sale. Prior to announcement, Newco to provide
evidence satisfactory to Kinross of ability to finance. Upon closing of the
asset sale, Newco to grant to Kinross an option to purchase at the IPO pricing
that number of securities of Newco in any IPO such that on closing of the IPO
Kinross owns up to 19.9% of Newco (subject to the execution of a mutually agreed
one year standstill from date of closing with an exception in the event of any
third party offer or acquisition proposal for the securities or assets of
Newco); and a pre-emptive right to maintain a 9.9% equity interest in Newco for
a period of one year.
Closing of the asset sale to occur, at the option of Kinross, prior to or
concurrently with the closing of the Arrangement transaction, failing which any
agreements to proceed with the Arrangement or the asset sale and other
arrangements contemplated in this schedule may be terminated, at the option of
Kinross.
SCHEDULE H
TERMS OF RUSSIAN PROPERTIES AGREEMENT
-------------------------------------
Kinross and Newco to enter into an agreement providing:
(i) Kinross with rights of first refusal with respect to Newco joint
ventures with respect to exploration properties in Russia beyond the
Area of Influence (as defined in Schedule I); and
(ii) for the rights of Kinross, a subsidiary of Kinross or a subsidiary
of Bema and Newco in respect of the following areas in the former
Soviet Union: (a) Pamir area of Tajikistan, (b) Krygestan, (c)
Chovdar project, Azerbaijan, and (d) Republic of Georgia.
SCHEDULE I
TERMS OF KUPOL AGREEMENT
------------------------
Kinross, Bema, or at Kinross' option a subsidiary of Bema, and Newco to enter
into an exploration arrangement providing:
i) Subject to applicable law, Newco, as operator, has the option to
subcontract with Chukotka Mining & Geological Company ("CMGC") to
carry out exploration under the Chukotka Exploration Licenses (as
defined in Schedule H);
ii) Newco and Kinross to fund the exploration of the Chukotka
Exploration Licenses by each incurring an expenditure of US$10
million on or before the expiry of two years from the closing date;
iii) Following the period ending two years after the closing date,
Kinross and Newco to continue to fund future exploration obligations
relating to the Chukotka Exploration Licenses pro rata to their
respective economic interests. After the earn-in, each party will be
deemed to have contributed US$10 million to the exploration
obligations in respect of the Chukotka Exploration Licenses, and to
the extent that future funding by the parties in respect of such
licenses is not contributed pro rata to their respective interests,
the non-contributing party's economic interest in the Chukotka
Exploration Licenses will be diluted based on the total exploration
costs incurred or deemed incurred on such licenses to such date;
iv) Kinross and Newco to have mutual rights of first refusal with
respect to their interests in the entities holding the Chukotka
Exploration Licences (directly or indirectly, as applicable);
v) Newco and Kinross to agree to share on a 50/50 basis (excluding any
government interest) all exploration opportunities within a 100 km
radius of the Kupol mill site exclusive of the approximately 17
square km Kupol licence area (the "Area of Influence"); and
vi) Before closing Bema shall not exercise its right of first refusal on
the Government of Chukotka's 25% interest in CMGC or refrain from
exercising such right without, in either case, the approval of
Kinross, which shall not be unreasonably withheld. Following
closing, Kinross shall not exercise such right, or refrain from
doing so, without consulting Newco.
SCHEDULE J
REPRESENTATIONS AND WARRANTIES OF BEMA
--------------------------------------
Bema represents and warrants to and in favour of Kinross as follows:
(a) Organization. Each of Bema, the Bema Subsidiaries and, to the
knowledge of Bema, the Bema Significant Interest Companies has been
incorporated, is validly subsisting and has full corporate or legal
power and authority to own its property and assets and to conduct
its business as currently owned and conducted. Each of Bema, the
Bema Subsidiaries and, to the knowledge of Bema, the Bema
Significant Interest Companies is registered, licensed or otherwise
qualified as an extra-provincial corporation or a foreign
corporation in each jurisdiction where the nature of the business or
the location or character of the property and assets owned or leased
by it requires it to be so registered, licensed or otherwise
qualified, other than those jurisdictions where the failure to be so
registered, licensed or otherwise qualified would not have a
Material Adverse Effect on Bema. All of the outstanding shares of
Bema and the Bema Subsidiaries and the outstanding securities
representing Bema's interest in each of the Bema Significant
Interest Companies are duly authorized, validly issued, fully paid
and non-assessable (and, where required, properly registered).
Except as disclosed in the Bema Disclosure Letter, all of the
outstanding shares of the Bema Subsidiaries, and all of the
outstanding securities representing Bema's interest in each of the
Bema Significant Interest Companies, are owned directly or
indirectly by Bema or a Bema Subsidiary. Except pursuant to
restrictions on transfer contained in the articles or by-laws (or
their equivalent) of the applicable Bema Group Company or as
disclosed by Bema in the Bema Disclosure Letter, the outstanding
securities of each Bema Group Company which are owned by Bema (or by
another Bema Group Company) are owned free and clear of all
Encumbrances and neither Bema nor any of the Bema Group Companies is
liable to any Bema Group Company or to any creditor in respect
thereof. Other than as disclosed by Bema in the Bema Disclosure
Letter, there are no outstanding options, rights, entitlements,
understandings or commitments (contingent or otherwise) regarding
the right to acquire any issued or unissued securities of any of the
Bema Group Companies from either Bema or any of the Bema
Subsidiaries.
(b) Capitalization. Bema is authorized to issue an unlimited number of
Bema Common Shares. As at November 3, 2006, there were 482,145,797
Bema Common Shares outstanding, an aggregate of 21,363,347 Bema
Common Shares were set aside for issue under the Bema Options and an
aggregate of 60,431,227 Bema Common Shares were set aside for issue
under the Bema Warrants. The Bema Options and the Bema Warrants are
described in Schedule C attached hereto. Except for the Bema Options
and the Bema Warrants and except as disclosed in the Bema Disclosure
Letter, there are no options, warrants, conversion privileges or
other rights, agreements, arrangements or commitments
(pre-emptive, contingent or otherwise) obligating Bema or any of the
Bema Subsidiaries to issue or sell any shares of Bema or any of the
Bema Subsidiaries or any securities or obligations of any kind
convertible into or exchangeable for any shares of Bema or any of
the Bema Subsidiaries. There are no outstanding bonds, debentures or
other evidences of indebtedness of Bema or any of the Bema Group
Companies having the right to vote with the Bema Shareholders on any
matter. There are no outstanding contractual obligations of Bema or
of any of the Bema Group Companies to repurchase, redeem or
otherwise acquire any outstanding Bema Common Shares or with respect
to the voting or disposition of any outstanding Bema Common Shares.
(c) Authority. Bema has all necessary power, authority and capacity to
enter into this Agreement and all other agreements and instruments
to be executed by Bema as contemplated by this Agreement, and to
perform its obligations hereunder and under such other agreements
and instruments. The execution and delivery of this Agreement by
Bema and the completion by Bema of the transactions contemplated by
this Agreement have been authorized by the directors of Bema and,
subject to the approval by the Bema Shareholders in the manner
contemplated herein, no other corporate proceedings on the part of
Bema are necessary to authorize this Agreement or to complete the
transactions contemplated hereby other than in connection with the
approval by the directors of Bema of the Bema Proxy Circular and the
Definitive Agreement. This Agreement has been executed and delivered
by Bema and constitutes a legal, valid and binding obligation of
Bema, enforceable against Bema in accordance with its terms, subject
to bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium and other applicable Laws relating to or affecting
creditors' rights generally, and to general principles of equity.
The execution and delivery by Bema of this Agreement and the
performance by it of its obligations hereunder and the completion of
the transactions contemplated hereby, do not and will not:
(i) result in a violation, contravention or breach of, require
any consent to be obtained under or give rise to any
termination rights under any provision of,
(A) the articles or by-laws (or their equivalent) of Bema or
any of the Bema Subsidiaries, or, to the knowledge of
Bema, any of the Bema Significant Interest Companies,
(B) except for the consents, waivers, permits, exemptions,
orders or approvals of, and any registrations and
filings with, any Governmental Entity contemplated in
subparagraph 9(f) or as disclosed in the Bema Disclosure
Letter, any Laws, or
(C) except as disclosed in the Bema Disclosure Letter, any
contract, agreement, licence or permit to which Bema,
any of the Bema Subsidiaries, or to the knowledge of
Bema, any of the Bema
3
Significant Interest Companies, is bound or is subject
or of which Bema or any Bema Group Company is the
beneficiary;
(ii) except as disclosed in the Bema Disclosure Letter, give rise
to any right of termination or acceleration of indebtedness,
or cause any indebtedness owing by Bema or any of the Bema
Subsidiaries, or to the knowledge of Bema, any of the Bema
Significant Interest Companies, to come due before its stated
maturity or cause any available credit to cease to be
available;
(iii) except as disclosed in the Bema Disclosure Letter, result in
the imposition of any Encumbrance upon any of the property or
assets of Bema, any of the Bema Subsidiaries, or to the
knowledge of Bema, any of the Bema Significant Interest
Companies, or restrict, hinder, impair or limit the ability
of Bema, any of the Bema Subsidiaries, or to the knowledge of
Bema, any of the Bema Significant Interest Companies to
conduct the business of Bema or any of the Bema Subsidiaries,
or to the knowledge of Bema, any of the Bema Significant
Interest Companies as and where it is now being conducted; or
(iv) except as disclosed in the Bema Disclosure Letter or the Bema
Documents filed on SEDAR, result in any payment (including
termination, severance, unemployment compensation, change of
control, "golden parachute", bonus or otherwise) becoming due
to any Employee, director or officer of Bema or of any Bema
Subsidiary or increase any benefits otherwise payable under
any Employee Plan or result in the acceleration of the time
of payment or vesting of any such benefits;
which would, individually or in the aggregate, have a Material
Adverse Effect on Bema. No consent, approval, order or authorization
of, or declaration or filing with, or waiver of any right of, any
Governmental Entity or other person is required (A) to be obtained
or made by Bema, any of the Bema Subsidiaries, or to the knowledge
of Bema, any of the Bema Significant Interest Companies in
connection with the execution and delivery of this Agreement or the
consummation by Bema of the transactions contemplated hereby other
than (i) in the event the transactions contemplated herein is
structured as an Arrangement, any approvals required pursuant to
orders made by the Court, (ii) filings with the Director under the
CBCA and filings with and approvals required by Securities
Authorities and stock exchanges, (iii) any other consent, waiver,
permit, order or approval referred to in the Bema Disclosure Letter,
(iv) any other consent, approval, order, authorization, waiver,
permit or filing required under any applicable Antitrust Law, and
(v) any other consent, approval, order, authorization, declaration,
filing or waiver which, if not obtained, would not, individually or
in the aggregate, have a Material Adverse Effect on Bema, or (B) to
be obtained in connection with the acquisition (directly or
indirectly) by Kinross of the properties, property rights and
interests (including all exploration,
4
retention, reconnaissance, development or mining rights, licences or
permits) and mining operations owned directly or indirectly by Bema
in connection with the transactions contemplated herein. Without
limiting the generality of the foregoing, subject to obtaining the
Bema Required Vote at the Bema Meeting, Bema has complied with the
requirements of the Rules.
(d) Directors' Approvals. The directors of Bema present at a meeting
have received an oral opinion from BMO Capital Markets, the
financial advisor to the special committee of the board of directors
of Bema, that the Share Consideration is fair, from a financial
point of view, to the Bema Shareholders and have unanimously:
(i) determined that the Share Consideration is fair to the Bema
Shareholders and the transactions contemplated herein are in
the best interests of Bema;
(ii) recommended that the Bema Shareholders vote in favour of the
transactions contemplated herein; and
(iii) authorized the entering into of this Agreement and the
performance by Bema of its obligations hereunder.
(e) Bema Subsidiaries. The only Subsidiaries of Bema are the Bema
Subsidiaries and the only other corporations in which Bema owns a
direct or indirect interest of greater than 10% are the Bema
Significant Interest Companies.
(f) No Defaults. Neither Bema nor any of the Bema Subsidiaries nor, to
the knowledge of Bema, any of the Bema Significant Interest
Companies is in default under, and there exists no event, condition
or occurrence which, after notice or lapse of time or both, would
(to the knowledge of Bema in the case of the Bema Significant
Interest Companies) constitute such a default under, any contract,
agreement or licence to which any of them is a party or by which any
of them is bound which would, individually or in the aggregate, have
a Material Adverse Effect on Bema.
(g) Absence of Changes. Since June 30, 2006, except as publicly
disclosed in the Bema Documents filed on SEDAR prior to the date
hereof, or disclosed in the Bema Disclosure Letter:
(i) Bema and each of the Bema Subsidiaries and, to the knowledge
of Bema, each of the Bema Significant Interest Companies has
conducted its business only in the ordinary and regular
course of business consistent with past practice;
(ii) neither Bema nor any of the Bema Group Companies has incurred
or suffered a Material Adverse Change;
5
(iii) there has not been any acquisition or sale by Bema, any of
the Bema Subsidiaries, or to the knowledge of Bema, any of
the Bema Significant Interest Companies of any material
property or assets thereof;
(iv) other than in the ordinary and regular course of business
consistent with past practice, there has not been any
incurrence, assumption or guarantee by Bema, any of the Bema
Subsidiaries, or to the knowledge of Bema, any of the Bema
Significant Interest Companies of any debt for borrowed
money, any creation or assumption by Bema, any of the Bema
Subsidiaries, or to the knowledge of Bema, any of the Bema
Significant Interest Companies of any Encumbrance, any making
by Bema, any of the Bema Subsidiaries, or to the knowledge of
Bema, any of the Bema Significant Interest Companies of any
loan, advance or capital contribution to or investment in any
other person or any entering into, amendment of,
relinquishment, termination or non-renewal by Bema, any of
the Bema Subsidiaries, or to the knowledge of Bema, any of
the Bema Significant Interest Companies, of any contract,
agreement, licence, lease transaction, commitment or other
right or obligation which would, individually or in the
aggregate, have a Material Adverse Effect on Bema;
(v) Bema has not declared or paid any dividends or made any other
distribution on any of the Bema Common Shares;
(vi) Bema has not effected or passed any resolution to approve a
split, consolidation or reclassification of any of the
outstanding Bema Common Shares;
(vii) other than in the ordinary and regular course of business
consistent with past practice, there has not been any
material increase in or modification of the compensation
payable to or to become payable by Bema or any of the Bema
Subsidiaries to any Employee or to any of their respective
directors or officers or to any director or officer of any of
the Bema Significant Interest Companies who is a nominee of
Bema, or any grant to any Employee or any such director or
officer of any material increase in severance or termination
pay or any material increase or modification of any Employee
Plan (including, without limitation, the granting of Bema
Options pursuant to the Bema Share Option Plans) made to, for
or with any of such Employee, directors or officers;
(viii) Bema has not effected any material change in its accounting
methods, principles or practices; and
(ix) neither Bema nor any of the Bema Subsidiaries has entered
into or adopted any, or materially amended any, collective
bargaining agreement or Employee Plan.
6
(h) Employment Agreements. Other than as publicly disclosed in the Bema
Documents filed on SEDAR prior to the date hereof, or disclosed by
Bema in the Bema Disclosure Letter:
(i) neither Bema nor any of the Bema Subsidiaries is a party to
or bound by any contracts or requirements of any Laws
applicable thereto in respect of any Employee, former
Employee or consultant including:
(A) any contracts or Laws providing for the re-employment of
any Employee;
(B) any bonus, pension, profit sharing, executive
compensation, current or deferred compensation,
incentive compensation, tax equalization, stock
compensation, stock purchase, stock option, stock
appreciation, phantom stock option, savings, severance
or termination pay, retirement, supplementary
retirement, hospitalization insurance, salary
continuation, legal, health or other medical, dental,
life, disability or other insurance plan, program,
agreement or arrangement or other plans or arrangements
providing employee benefits, except for the plans
providing employee benefits described in the Bema
Disclosure Letter;
(C) any written or oral policy, agreement, obligation or
understanding providing for severance or termination
payments to any Employee, consultant, director or
officer of Bema or any Bema Subsidiary or any
employment, service, consulting or other agreement with
any Employee, consultant, director or officer of Bema or
any of the Bema Subsidiaries which provides for
termination of employment or of the contract, as the
case may be, on more than 6 months' notice (excluding
such as results by Law from the employment of an
employee without an agreement as to notice or
severance); and
(ii) there are no overdue payments to employees (including any
amounts related to unused or accrued vacation days).
(i) Collective Agreements. Except as set out in the Bema Disclosure
Letter:
(i) neither Bema nor any of the Bema Subsidiaries is a party to
any collective bargaining agreement, contract or legally
binding commitment to any trade union or employee
organization or group in respect of or affecting the
Employees;
(ii) neither Bema nor any of the Bema Subsidiaries are currently
engaged in any labour negotiation;
7
(iii) neither Bema nor any of the Bema Subsidiaries are a party to
any application, claim, complaint, grievance arbitration or
other proceeding by or respecting any Employees or former
Employees under any Laws or before any Governmental Entity,
including without limitation, any application for
certification or which otherwise involves the recognition of
any trade union or similar employee organization as the
bargaining agent of any of the Employees, or any unfair
labour practice complaint;
(iv) neither Bema nor any of the Bema Subsidiaries are, to the
knowledge of Bema, currently engaged in any unfair labour
practice nor is Bema aware of any pending or threatened
complaint regarding any alleged unfair labour practices;
(v) there is no strike, labour dispute, work slow down or
stoppage against or involving Bema or any of the Bema
Subsidiaries nor, to the knowledge of Bema, are any strikes,
labour disputes, work slowdowns or stoppages pending or
threatened against Bema or any of the Bema Subsidiaries which
would have a Material Adverse Effect on Bema;
(vi) to the knowledge of Bema, there is no lockout pending or
anticipated by Bema or any of the Bema Subsidiaries;
(vii) there is no grievance or arbitration proceeding arising out
of or under any collective bargaining agreement pending or
threatened against Bema or any of the Bema Subsidiaries;
(viii) neither Bema nor any of the Bema Subsidiaries have
experienced any material work stoppage in the 24 month period
immediately preceding the date of this Agreement; and
(ix) to the knowledge of Bema, neither Bema nor any of the Bema
Subsidiaries are, nor have they been in the 24 month period
preceding the date of this Agreement, the subject of any
union organization effort or campaign or similar organization
effort by any employee organization or group in respect of or
affecting Employees.
(j) Financial Matters.
(i) The audited consolidated financial statements of Bema as at
and for the fiscal years ended December 31, 2004 and December
31, 2005 (including the notes thereto and related
management's discussion and analysis) and Bema's unaudited
financial statements as at and for the six months ended June
30, 2006 (including the notes thereto and related
management's discussion and analysis) were prepared in
accordance with Canadian GAAP, consistently applied, and
fairly present in all material respects the consolidated
financial condition of Bema at the respective dates indicated
8
and the results of operations of Bema for the periods covered
on a consolidated basis (subject, in the case of any
unaudited interim consolidated financial statements, to
normal period-end adjustments) and reflect adequate provision
for the liabilities of Bema on a consolidated basis in
accordance with Canadian GAAP. Neither Bema nor any of the
Bema Subsidiaries has any liability or obligation (including,
without limitation, liabilities or obligations to fund any
operations or work or exploration program, to give any
guarantees or for Taxes), whether accrued, absolute,
contingent or otherwise, not reflected in the consolidated
financial statements of Bema for the six months ended June
30, 2006, except liabilities and obligations incurred in the
ordinary and regular course of business since June 30, 2006.
Bema is able to pay its liabilities as they become due; the
realizable value of the assets of Bema is not less than the
aggregate of the liabilities thereof and the stated capital
of all classes of shares thereof.
(ii) The management of Bema has established and maintained a
system of disclosure controls and procedures designed to
provide reasonable assurance that information required to be
disclosed by Bema in its annual filings, interim filings or
other reports filed, furnished or submitted by it under
provincial and territorial securities legislation is reported
within the time periods specified in such legislation, laws
and rules.
(iii) Neither Bema nor any of the Bema Subsidiaries nor, to Bema's
knowledge, any director, officer, employee, auditor,
accountant or representative of Bema or any of the Bema
Subsidiaries has received or otherwise had or obtained
knowledge of any complaint, allegation, assertion or claim,
whether written or oral, regarding the accounting or auditing
practices, procedures, methodologies or methods of Bema or
any of the Bema Subsidiaries or their respective internal
accounting controls, including any complaint, allegation,
assertion or claim that Bema or any of the Bema Subsidiaries
has engaged in questionable accounting or auditing practices,
which has not been resolved to the satisfaction of the Audit
Committee of the Board of Directors of Bema.
(k) Compliance with Certain U.S. Securities Laws. Without limiting any
of the other representations or warranties made herein, Bema and, to
the knowledge of Bema, each of its officers and directors are in
compliance in all material respects with and have complied in all
material respects with the applicable provisions of the 1933 Act,
the 1934 Act and the Xxxxxxxx-Xxxxx Act.
(l) No Prohibited Payments. Neither Bema, a Bema Subsidiary, nor, to the
knowledge of Bema, any Bema Significant Interest Company or officer,
director, Employee, shareholder, agent or other person acting on
behalf of any Bema Group Company, (i) has made any Prohibited
Payments, (ii) has made any payments or provided services that, even
though not Prohibited Payments, were
9
not legal to make or provide or that were not legal for the persons
receiving them to receive, (iii) has received any payments, services
or gratuities that were not legal to receive or that were not legal
for the person making them to provide, (iv) has engaged in any
transactions or made or received payments that were not properly
recorded on the accounting books and records or properly disclosed
on its financial statements, or (v) has maintained any off-book bank
or cash account or "slush funds".
(m) Books and Records. The corporate records and minute books of Bema
and, since the date each Bema Subsidiary was acquired or
incorporated by Bema, the corporate records and minute books of the
Bema Subsidiaries have been maintained in accordance with all
applicable Laws and are complete and accurate in all material
respects. The minute books of Bema and the Bema Subsidiaries
provided to Kinross for review are true and complete in all material
respects and, except as disclosed in the Bema Disclosure Letter, the
minutes and documents contained therein have not been amended or
supplemented since the time of such review. Financial books and
records and accounts of Bema and the Bema Subsidiaries in all
material respects (i) have been maintained in accordance with good
business practices on a basis consistent with prior years, (ii) are
stated in reasonable detail and accurately and fairly reflect the
transactions and acquisitions and dispositions of assets of Bema and
the Bema Group Companies, and (iii) in the case of Bema and the Bema
Subsidiaries, accurately and fairly reflect the basis for the
consolidated financial statements of Bema.
(n) Litigation. There is no complaint, claim, action, proceeding or
investigation pending or in progress or, to the knowledge of Bema,
threatened against or relating to Bema or any of the Bema
Subsidiaries or affecting any of their respective properties,
permits, licences or assets before any Governmental Entity which
individually or in the aggregate has a Material Adverse Effect on
Bema. To the knowledge of Bema, there is no claim, action,
proceeding or investigation pending or threatened against or
relating to any of the Bema Significant Interest Companies or
affecting any of their respective properties or assets before any
Governmental Entity which individually or in the aggregate has a
Material Adverse Effect on Bema. There is no bankruptcy,
liquidation, winding-up or other similar proceeding pending or in
progress, or, to the knowledge of Bema, threatened against or
relating to Bema, any of the Bema Subsidiaries, or to the knowledge
of Bema, any of the Bema Significant Interest Companies, before any
Governmental Entity. Neither Bema, any of the Bema Subsidiaries, or
to the knowledge of Bema, any of the Bema Significant Interest
Companies, nor any of their respective properties or assets is
subject to any outstanding judgment, fine, penalty, order, writ,
injunction or decree that involves or may involve, or restricts or
may restrict, or requires or may require, the expenditure of an
amount of money in the aggregate in excess of $10,000,000 as a
condition to or a necessity for the right or ability of Bema or any
Bema Group Company, respectively, to conduct its business in all
material respects as it has been carried on prior to the
10
date hereof, or that would materially impede the consummation of the
transactions contemplated by this Agreement.
(o) Title to Properties and Condition of Assets. Except as set forth in
the Bema Disclosure Letter, each of Bema or a Bema Subsidiary has
sufficient title (whether in fee simple or equivalent or by means of
an exploration, retention, reconnaissance, development or mining
permit, right or license or similar), free and clear of any title
defect or Encumbrance, to its mineral projects with proven and
probable reserves (other than property as to which it is a lessee,
in which case it has a valid leasehold interest), such properties
being described in Schedule A hereto, except for such defects in
title or Encumbrances that, individually or in the aggregate, do not
have a Material Adverse Effect on Bema. All real and tangible
personal property of Bema and each Bema Group Company is in
generally good repair and is operational and usable in the manner in
which it is currently being utilized, subject to normal wear and
tear and technical obsolescence, repair or replacement, except for
such property whose failure to be in such condition does not have a
Material Adverse Effect on Bema. Bema has provided Kinross with a
list of the material royalty and similar type interests which are
owned or held, directly or indirectly, by Bema and Bema has,
applying customary standards in the mining industry, sufficient
title to all of such material royalty or other interests, free and
clear of any title defects or Encumbrances, except for any such
title defects or Encumbrances that, individually or in the
aggregate, do not have a Material Adverse Effect on Bema. All
required permits or registrations necessary to perfect title in and
to such assets have been carried out in compliance with applicable
Law and are in full force and effect, except for any non-compliance
that, individually or in the aggregate, does not have a Material
Adverse Effect on Bema.
(p) Insurance. Bema and the Bema Subsidiaries maintain policies of
insurance in amounts and in respect of such risks as are normal and
usual for companies of a similar size operating in the mining
industry and as required in accordance with their respective
licences and permits, and such policies are in full force and effect
as of the date hereof.
(q) Environmental. Except as to the matters described in the Bema
Disclosure Letter, since the date Bema acquired each of the Bema
Group Companies there has been no Environmental Condition, and in
respect of each such Bema Group Company, to Bema's knowledge there
exists no Environmental Condition, which, individually or in the
aggregate, has a Material Adverse Effect on Bema. Bema has received
no notice, directive or advisory from any Governmental Entity of any
Environmental Condition that would have a Material Adverse Effect on
Bema.
Each of the Bema Group Companies maintains sufficient financial
reserves, including, but not limited to, financial assurance
required by Governmental
11
Entities pursuant to Environmental Approvals, sufficient to meet the
obligations of such Bema Group Company in respect of reclamation,
remediation, closure and post-closure obligations relating to the
assets and operations of such Bema Group Company.
Except as to matters described in the Bema Disclosure Letter, each
of the Bema Group Companies has all Environmental Approvals required
pursuant to Environmental Laws in respect of the current operations
of such Bema Group Company and is in compliance with such
Environmental Approvals except where any non-compliance would not
have a Material Adverse Effect on Bema.
(r) Tax Matters. Bema and the Bema Subsidiaries have filed or caused to
be filed, and will continue to file and cause to be filed, in a
timely manner all Tax Returns required to be filed by them (all of
which Tax Returns were correct and complete in all material respects
and no material fact has been omitted therefrom) and have paid,
collected, withheld or remitted, or caused to be paid, collected,
withheld or remitted, all Taxes that are due and payable,
collectible and remittable. No extension of time in which to file
any Tax Returns is in effect. Bema has provided adequate accruals in
accordance with Canadian GAAP in its published consolidated
financial statements for any Taxes for the period covered by such
financial statements which have not been paid, whether or not shown
as being due on any Tax Returns. Since such publication date, no
material liability for Taxes not reflected in such consolidated
financial statements has been incurred or accrued by Bema or the
Bema Subsidiaries other than in the ordinary course of business. No
lien for Taxes has been filed or exists other than for Taxes not yet
due and payable.
There are no reassessments of Taxes in respect of Bema or the Bema
Subsidiaries that have been issued and are outstanding and there are
no outstanding issues which have been raised and communicated to
Bema or any Bema Subsidiary by any Governmental Entity for any
taxation year in respect of which a Tax Return of Bema or any Bema
Subsidiary has been audited. No Governmental Entity has challenged,
disputed or questioned Bema or any Bema Subsidiary in respect of
Taxes or Tax Returns. None of Bema or any Bema Subsidiary is
negotiating any draft assessment or reassessment with any
Governmental Entity. Bema is not aware of any contingent liabilities
for Taxes or any grounds for an assessment or reassessment of Bema
or any Bema Subsidiary, including, without limitation, unreported
benefits conferred on any shareholder, aggressive treatment of
income, expenses, credits or other claims for deduction under any
return or notice other than as disclosed in the Financial
Statements. Neither Bema nor any Bema Subsidiary has received any
indication from any Governmental Entity that an assessment or
reassessment of Bema or any Bema Subsidiary is proposed in respect
of any Taxes, regardless of its merits. Neither Bema nor any Bema
Subsidiary has executed or filed with any Governmental Entity any
agreement or waiver extending the period for assessment,
reassessment or collection of any
12
Taxes. All taxation years up to and including the taxation year
ended 1998 are considered closed by Canadian federal and provincial
governmental bodies for the purposes of all Taxes.
Bema and each Bema Subsidiary has withheld from each payment made to
any of its present or former Employees, officers and directors, and
to all other persons all amounts required by law to be withheld, and
furthermore, has remitted such withheld amounts within the
prescribed periods to the appropriate Governmental Entity. Bema and
each Bema Subsidiary has remitted all Canada Pension Plan
contributions, provincial pension plan contributions, employment
insurance premiums, employer health taxes and other Taxes payable by
it in respect of its employees and has remitted such amounts to the
proper Governmental Entity within the time required under the
applicable legislation. Bema and each Bema Subsidiary has charged,
collected and remitted on a timely basis all Taxes as required under
applicable legislation on any sale, supply or delivery whatsoever,
made by them.
Bema and each Bema Subsidiary will not at any time be deemed to have
a capital gain pursuant to subsection 80.03(2) of the Tax Act or any
analogous provincial legislative provision as a result of any
transaction or event taking place in any taxation year ending on or
before the Closing Date.
There are no circumstances existing which could result in the
application of section 78 or 160 of the Tax Act or any equivalent
provincial provision to Bema or any Bema Subsidiary.
Neither Bema nor any Bema Subsidiary has participated, directly or
through a partnership, in a transaction or series of transactions
contemplated in subsection 247(2) of the Tax Act or any analogous
provincial legislative provision.
In respect of the Bema Subsidiaries, no transaction has been entered
into without a valid business purpose.
(s) Employee Plans.
(i) All material written employee benefit, welfare, supplemental
unemployment benefit, bonus, pension, profit sharing, tax
equalization, executive compensation, current or deferred
compensation, incentive compensation, stock compensation,
stock purchase, stock option, stock appreciation, phantom
stock option, savings, severance or termination pay,
retirement, supplementary retirement, hospitalization
insurance, salary continuation, legal, health or other
medical, dental, life, disability or other insurance (whether
insured or self-insured) plan, program, agreement or
arrangement, including any such plans which are sponsored or
maintained by any Governmental Entity sponsored, maintained
or contributed to or
13
required to be contributed to by Bema or any of the Bema
Subsidiaries for the benefit of its Employees or former
Employees and their dependants or beneficiaries to which Bema
or any of the Bema Subsidiaries participates or has any
actual or potential liability or obligations, other than
plans established pursuant to statute (collectively the
"Employee Plans").
(ii) The booklets, brochures, summaries, descriptions and manuals
prepared for, and circulated to, the Employees and former
Employees of Bema and Bema Subsidiaries and their
beneficiaries concerning each Employee Plan, together with
all written communications of a general nature provided to
such Employees and their beneficiaries, accurately describe
the benefits provided under each such Employee Plan referred
to therein.
(iii) All of the Employee Plans have been established, registered,
qualified, funded, invested and administered in accordance
with, and are in good standing under, all Laws, the terms of
such Employee Plans and in accordance with all
understandings, written or oral, between Bema, Bema
Subsidiaries and the Employees or former Employees. No fact
or circumstance exists that could adversely affect the
tax-preferred or tax exempt status of any Employee Plan. None
of the Employee Plans enjoys any special tax status under
Laws, nor have any advance tax rulings or other clearances
from any Governmental Entity been sought or received in
respect of the Employee Plans.
(iv) Bema does not have any "registered pension plan" as that term
is defined in subsection 248(1) of the Tax Act or any Laws
(collectively the "Pension Plans").
(v) No material amendments have been made to any Employee Plan
and no improvements to any Employee Plan have been promised
and no amendments or improvements to any Employee Plan will
be made or promised by Bema or any of the Bema Subsidiaries
prior to the Effective Time.
(vi) No changes have occurred to the Employee Plans or are
expected to occur which would materially affect the actuarial
reports or any of the financial statements relevant to Bema
or the Bema Subsidiaries.
(vii) Except as disclosed in the Bema Disclosure Letter, none of
the Employee Plans provides post-retirement benefits to or in
respect of the Employees or any former Employees or to or in
respect of the beneficiaries of such Employees and former
Employees.
(viii) All data necessary to administer each Employee Plan is in the
possession of Bema and is in a form sufficient for the proper
administration of each Employee Plan.
14
(ix) Bema and/or the Bema Subsidiaries may unilaterally amend,
modify, vary, revise, revoke, or terminate, in whole or in
part, each Employee Plan and take contribution holidays under
or withdraw surplus from each Employee Plan, subject only to
approvals required by Laws.
(x) Subject to obtaining any approvals under Laws, Bema and/or
the Bema Subsidiaries may merge any Employee Plan with any
other arrangement, plan or fund and may transfer without
restriction, the assets from any Employee Plan to any other
arrangement, plan or fund.
(xi) All material obligations regarding the Employee Plans have
been satisfied and there are no outstanding defaults or
violations by any party thereto and no taxes, penalties or
fees are owing or exigible under any of the Employee Plans.
(xii) All contributions or premiums required to be made by Bema or
any Bema Subsidiaries under the terms of each Employee Plan,
any collective bargaining agreement or by Laws have been made
in a timely fashion in accordance with Laws and the terms of
the Employee Plans and any applicable collective bargaining
agreement, and none of Bema nor any Bema Subsidiaries has as
of the Closing Date will not have, any actual or potential
unfunded liabilities (other than liabilities accruing after
the Closing Date) with respect to any of the Employee Plans.
All liabilities of Bema or any Bema Subsidiaries (whether
accrued, absolute, contingent or otherwise) related to all
Employee Plans have been fully and accurately disclosed in
accordance with GAAP in the financial statements and will be
fully and accurately disclosed in the Closing Date balance
sheet.
(xiii) Except as disclosed in the Bema Disclosure Letter, no
Employee Plan, nor any related trust or other funding medium
thereunder, is subject to any pending, threatened or
anticipated investigation, examination or other legal
proceeding, initiated by any Governmental Entity or by any
other person (other than routine claims for benefits), and
there exists no state of facts which after notice or lapse of
time or both could reasonably be expected to give rise to any
such investigation, examination or other legal proceeding or
to affect the registration of any Employee Plan required to
be registered. Further, should any matter arise which could
affect the registration of any Employee Plan, Bema shall, in
a timely fashion, take all steps required to ensure the
registration is not affected.
(xiv) There have been no withdrawals, applications or transfers of
assets from any Employee Plan or the trusts or other funding
media relating thereto except in accordance with the terms of
such Employee Plan, Laws and all applicable agreements. None
of Bema, any Bema Subsidiaries, or any of their agents or
employees, has been in breach of any contractual or
15
fiduciary obligation with respect to the administration of
the Employee Plans or the trusts or other funding media
relating thereto.
(xv) No insurance policy or other contract or agreement affecting
any Employee Plan requires or permits a retroactive increase
in premiums or payments due thereunder. The level of
insurance reserves in respect of each insured Employee Plan
is reasonable and sufficient to provide for all incurred but
unreported claims.
(xvi) Except as disclosed in the Bema Disclosure Letter or as
contemplated in this Agreement, the execution of this
Agreement and the completion of the transactions contemplated
hereby will not (either alone or in conjunction with any
additional or subsequent events) constitute an event under
any Employee Plan that will or may result in any material
payment (whether of severance pay or otherwise), acceleration
of payment or vesting of benefits, forgiveness of
indebtedness, vesting, distribution, restriction on funds,
increase in benefits or obligation to fund benefits with
respect to any Employee.
(xvii) There exists no liability in connection with any former
benefit plan relating to the Employees or former Employees of
Bema or any Bema Subsidiaries or their beneficiaries that has
terminated, and all procedures for termination of each such
former benefit plan have been properly followed in accordance
with the terms of such former benefit plans and Laws.
(t) Reporting Status. Bema is a reporting issuer or its equivalent in
each of the provinces and territories of Canada. Bema is subject to
the filing obligations imposed by section 13 of the 1934 Act. The
Bema Common Shares are listed on the TSX, the NYSE and on AIM. The
Bema Warrants are listed on the TSX.
(u) Reports. Bema has filed (including, as applicable, on SEDAR) or
furnished, as applicable, with the Securities Authorities, stock
exchanges and all applicable self-regulatory authorities all forms,
reports, schedules, statements, certifications, material change
reports and other documents required to be filed or furnished by it
(such forms, reports, schedules, statements, certifications and
other documents, including any financial statements or other
documents, including any schedules included therein, are referred to
as the "Bema Documents"). The Bema Documents, at the time filed or
furnished, (a) did not contain any misrepresentation (as defined in
the Securities Act (Ontario)) and (b) complied in all material
respects with the requirements of applicable securities legislation
and the rules, policies and instruments of all Securities
Authorities having jurisdiction over Bema. Without restricting the
generality of the foregoing, each of the Bema Documents filed or
furnished with the SEC, at the time of its filing or furnishing
complied in all material respects with the applicable requirements
of the 1933 Act, the 1934 Act and the Xxxxxxxx-Xxxxx Act and any
rules and regulations made
16
thereunder applicable to such Bema Documents. As of their respective
dates (or, if amended prior to the date hereof, as of the date of
such amendment) the Bema Documents filed or furnished with the SEC
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 made therein, in light of the circumstances in
which they were made, not misleading. Bema has not filed any
confidential material change or other report or other document with
any Securities Authorities or stock exchange or other
self-regulatory authority which at the date hereof remains
confidential.
(v) Mineral Reserves and Resources. The estimated proven and probable
mineral reserves and estimated, measured, indicated and inferred
mineral resources disclosed in the Bema Documents filed on SEDAR as
of year-end December 31, 2005 have been prepared and disclosed in
all material respects in accordance with National Instrument 43-101.
There has been no material reduction (other than as a result of
operations in the ordinary course of business) in the aggregate
amount of estimated mineral reserves, estimated mineral resources of
Bema and its subsidiaries and Bema's material joint ventures, taken
as a whole, from the amounts disclosed in the Bema Documents filed
on SEDAR.
(w) Compliance with Laws and Exchange Requirements. Bema and, since the
date Bema acquired each of the Bema Subsidiaries, the Bema
Subsidiaries (A) have complied with and are not in violation of any
applicable Laws other than such non-compliance or violations which
would not, individually or in the aggregate, have a Material Adverse
Effect on Bema and (B) have complied and are in compliance, in all
material respects, with any applicable listing and corporate
governance rules and regulations of the TSX, NYSE and AIM. To the
knowledge of Bema, the Bema Subsidiaries and the Bema Significant
Interest Companies (X) have complied with and are not in violation
of any applicable Laws other than such non-compliance or violations
which would not, individually or in the aggregate, have a Material
Adverse Effect on Bema and (Y) have complied and are in compliance,
in all material respects, with any applicable listing and corporate
governance rules and regulations of the TSX, NYSE and AIM.
(x) No Cease Trade. Bema is not subject to any cease trade or other
order of any applicable stock exchange or Securities Authority and,
to the knowledge of Bema, no investigation or other proceedings
involving Bema which may operate to prevent or restrict trading of
any securities of Bema are currently in progress or pending before
any applicable stock exchange or Securities Authority.
(y) No Option on Assets. Except as disclosed in the Bema Disclosure
Letter, no person has any agreement or option or any right or
privilege capable of becoming an agreement or option for the
purchase from Bema or the Bema Subsidiaries of any of the material
assets of Bema or any of the Bema Subsidiaries.
17
(z) Certain Contracts. Except as disclosed in the Bema Disclosure
Letter, neither Bema, nor to the knowledge of Bema any of the Bema
Subsidiaries is, nor since the date Bema acquired each of the Bema
Subsidiaries has any Bema Subsidiary become, a party to or bound by
any non-competition agreement or any other agreement, obligation,
judgment, injunction, order or decree which purports to (i) limit
the manner or the localities in which all or any material portion of
the business of Bema or the Bema Subsidiaries are conducted, (ii)
limit any material business practice of Bema or any Bema Subsidiary
in any material respect, or (iii) restrict any acquisition or
disposition of any material property by Bema or any Bema Subsidiary
in any material respect.
(aa) Foreign Private Issuer. As of the date hereof, Bema is a "foreign
private issuer" as defined in Rule 405 under the 1933 Act.
(bb) Investment Company Status. Bema is not an "investment company", as
such term is defined under the 1940 Act.
(cc) Full Disclosure. Bema has made available to Kinross through Bema
Documents filed on SEDAR and otherwise, all material information,
including financial, operational and other information required by
National Instrument 43-101, in respect of the properties listed in
Schedule A required by National Instrument 43-101 and all such
information as made available to Kinross was true and correct at the
date of filing in all material respects and no material fact or
facts were omitted therefrom which would make such information
misleading.
(dd) No Broker's Commission. Bema has not entered into any agreement that
would entitle any person (including Endeavour) to any valid claim
against Bema for a broker's commission, finder's fee or any like
payment in respect of the Arrangement or any other matter
contemplated by this Agreement, except for the financial advisory
fees disclosed in the Bema Disclosure Letter.
SCHEDULE K
REPRESENTATIONS AND WARRANTIES OF KINROSS
-----------------------------------------
Kinross represents and warrants to and in favour of Bema as follows:
(a) Organization. Each of Kinross, the Kinross Subsidiaries and, to the
knowledge of Kinross, the Kinross Significant Interest Companies,
has been incorporated, is validly subsisting and has full corporate
and legal power and authority to own its property and assets and to
conduct its business as currently owned and conducted. Each of
Kinross, the Kinross Subsidiaries and, to the knowledge of Kinross,
the Kinross Significant Interest Companies, is registered, licensed
or otherwise qualified as an extra-provincial corporation or a
foreign corporation in each jurisdiction where the nature of the
business or the location or character of the property and assets
owned or leased by it requires it to be so registered, licensed or
otherwise qualified, other than those jurisdictions where the
failure to be so registered, licensed or otherwise qualified would
not have a Material Adverse Effect on Kinross. Except as disclosed
in the Kinross Disclosure Letter, all of the outstanding shares of
Kinross and the Kinross Subsidiaries and the outstanding securities
representing Kinross' interest in each of the Kinross Significant
Interest Companies are duly authorized, validly issued, fully paid
and non-assessable (and, where required, properly registered).
Except as disclosed in the Kinross Disclosure Letter, all of the
outstanding shares of the Kinross Subsidiaries and all of the
outstanding securities representing Kinross' interest in each of the
Kinross Significant Interest Companies are owned directly or
indirectly by Kinross or a Kinross Subsidiary. Except pursuant to
restrictions on transfer contained in the articles or by-laws (or
their equivalent) of the applicable Kinross Group Company or as
disclosed by Kinross in the Kinross Disclosure Letter, the
outstanding securities of each Kinross Group Company which are owned
by Kinross (or by another Kinross Group Company) are owned free and
clear of all Encumbrances and neither Kinross nor any of the Kinross
Group Companies is liable to any Kinross Group Company or to any
creditor in respect thereof. Other than as disclosed by Kinross in
the Kinross Disclosure Letter, there are no outstanding options,
rights, entitlements, understandings or commitments (contingent or
otherwise) regarding the right to acquire any issued or unissued
securities of any of the Kinross Group Companies from either Kinross
or any of the Kinross Subsidiaries.
(b) Capitalization. Kinross is authorized to issue an unlimited number
of Kinross Common Shares. As at November 3, 2006 there were
362,556,247 Kinross Common Shares outstanding, an aggregate of
3,789,760.16 Kinross Common Shares were set aside for issue under
the Kinross Options and an aggregate of 8,333,333 Kinross Common
Shares were set aside for issue under the Kinross Warrants. The
Kinross Options and the Kinross Warrants are described in Schedule D
attached hereto. Except for the Kinross Options and the Kinross
2
Warrants and except as contemplated herein or as disclosed in the
Kinross Disclosure Letter, there are no options, warrants,
conversion privileges or other rights, agreements, arrangements or
commitments (pre-emptive, contingent or otherwise) obligating
Kinross or any of the Kinross Subsidiaries to issue or sell any
shares of Kinross or any of the Kinross Subsidiaries or any
securities or obligations of any kind convertible into or
exchangeable for any shares of Kinross or any of the Kinross
Subsidiaries. There are no outstanding bonds, debentures or other
evidences of indebtedness of Kinross or any of the Kinross Group
Companies having the right to vote with the Kinross Shareholders on
any matter. There are no outstanding contractual obligations of
Kinross or of any of the Kinross Group Companies to repurchase,
redeem or otherwise acquire any outstanding Kinross Common Shares or
with respect to the voting or disposition of any outstanding Kinross
Common Shares.
(c) Authority. Kinross has all necessary power, authority and capacity
to enter into this Agreement and all other agreements and
instruments to be executed by Kinross as contemplated by this
Agreement, and to perform its obligations hereunder and under such
other agreements and instruments. The execution and delivery of this
Agreement by Kinross and the completion by Kinross of the
transactions contemplated by this Agreement have been authorized by
the directors of Kinross, and no other corporate proceedings
(including shareholders meetings) on the part of Kinross are
necessary to authorize this Agreement or to complete the
transactions contemplated hereby other than in connection with the
approval by the directors of Kinross of the Definitive Agreement.
This Agreement has been executed and delivered by Kinross and
constitutes, a legal, valid and binding obligation of each of
Kinross, enforceable against Kinross in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other applicable Laws relating to or
affecting creditors' rights generally, and to general principles of
equity. The execution and delivery by Kinross of this Agreement and
the performance by it of its obligations hereunder and the
completion of the transactions contemplated hereby, do not and will
not:
(i) result in a violation, contravention or breach of, require
any consent to be obtained under or give rise to any
termination rights under any provision of,
(A) the articles or by-laws (or their equivalent) of Kinross
or any of the Kinross Subsidiaries, or, to the knowledge
of Kinross, any of the Kinross Significant Interest
Companies,
(B) except for the consents, waivers, permits, exemptions,
orders or approvals of, and any registrations and
filings with, any Governmental Entity contemplated in
subparagraph 9(f) or as disclosed in the Kinross
Disclosure Letter, any Laws, or
3
(C) except as disclosed in the Kinross Disclosure Letter,
any contract, agreement, licence or permit to which
Kinross, or any of the Kinross Subsidiaries, or to the
knowledge of Kinross, any of the Kinross Significant
Interest Companies, is bound or is subject to or of
which Kinross or any Kinross Group Company is the
beneficiary;
(ii) except as disclosed in the Kinross Disclosure Letter, give
rise to any right of termination or acceleration of
indebtedness, or cause any indebtedness owing by Kinross or
any of the Kinross Subsidiaries, or to the knowledge of
Kinross, any of the Kinross Significant Interest Companies,
to come due before its stated maturity or cause any of its
available credit to cease to be available;
(iii) except as disclosed in the Kinross Disclosure Letter, result
in the imposition of any Encumbrance upon any of the property
or assets of Kinross, any of the Kinross Subsidiaries, or to
the knowledge of Kinross, any of the Kinross Significant
Interest Companies, or restrict, hinder, impair or limit the
ability of Kinross, any of the Kinross Subsidiaries, or to
the knowledge of Kinross, any of the Kinross Significant
Interest Companies to conduct the business of Kinross or any
of the Kinross Subsidiaries, or to the knowledge of Kinross,
any of the Kinross Significant Interest Companies as and
where it is now being conducted; or
(iv) except as disclosed in the Kinross Disclosure Letter or the
Kinross Documents filed on SEDAR, result in any payment
(including termination, severance, unemployment compensation,
change of control, "golden parachute", bonus or otherwise)
becoming due to any employee, director or officer of Kinross
or any Kinross Subsidiary or increase any benefits otherwise
payable under any employee benefit plan or result in the
acceleration of the time of payment or vesting of any such
benefits;
which would, individually or in the aggregate, have a Material
Adverse Effect on Kinross. No consent, approval, order or
authorization of, or declaration or filing with, or waiver of any
right of, any Governmental Entity or other person is required to be
obtained or made by Kinross, any of the Kinross Subsidiaries, or to
the knowledge of Kinross, any of the Kinross Significant Interest
Companies in connection with the execution and delivery of this
Agreement or the consummation by Kinross of the transactions
contemplated hereby other than (i) in the event the transactions
contemplated herein is structured as an Arrangement, any approvals
required pursuant to orders made by the Court, (ii) filings with and
approvals required by the Securities Authorities and stock
exchanges, (iii) any other consents, waivers, permits, orders or
approvals referred to in the Kinross Disclosure Letter, (iv) any
other consent, approval, order, authorization, waiver, permit or
filing required under any applicable Antitrust Law, and (v) any
other consent, approval, order, authorization, declaration, filing
or waiver which, if not
4
obtained, would not, individually or in the aggregate, have a
Material Adverse Effect on Kinross.
(d) Directors' Approvals. The directors of Kinross have unanimously
authorized the entering into of this Agreement, and the performance
by Kinross of its obligations hereunder.
(e) Kinross Subsidiaries. The only Subsidiaries of Kinross are the
Kinross Subsidiaries and the only other corporations in which
Kinross owns a direct or indirect interest of greater than 10% are
the Kinross Significant Interest Companies.
(f) No Defaults. Except as disclosed in the Kinross Disclosure Letter,
neither Kinross nor any of the Kinross Subsidiaries nor, to the
knowledge of Kinross, any of the Kinross Significant Interest
Companies is in default under, and there exists no event, condition
or occurrence which, after notice or lapse of time or both, would
(to the knowledge of Kinross in the case of the Kinross Significant
Interest Companies) constitute such a default under, any contract,
agreement or licence to which any of them is a party or by which any
of them is bound which would, individually or in the aggregate, have
a Material Adverse Effect on Kinross.
(g) Absence of Changes. Since June 30, 2006, except as publicly
disclosed in the Kinross Documents filed on SEDAR prior to the date
hereof, or disclosed in the Kinross Disclosure Letter:
(i) Kinross and each of the Kinross Subsidiaries and, to the
knowledge of Kinross, each of the Kinross Significant
Interest Companies has conducted its business only in the
ordinary and regular course of business consistent with past
practice;
(ii) neither Kinross nor any of the Kinross Group Companies has
incurred or suffered a Material Adverse Change;
(iii) there has not been any acquisition or sale by Kinross, any of
the Kinross Subsidiaries, or to the knowledge of Kinross, any
of the Kinross Significant Interest Companies of any material
property or assets thereof;
(iv) other than in the ordinary and regular course of business
consistent with past practice, there has not been any
material increase in or modification of the compensation
payable to or to become payable by Kinross or any of the
Kinross Subsidiaries to any of their employees or to any of
their respective directors or officers, or any grant to any
such employee, director or officer of any increase in
severance or termination pay or any increase or modification
of any bonus, pension, insurance or benefit arrangement made
to, for or with any of such employees, directors or officers;
5
(v) Kinross has not declared or paid any dividends or made any
other distribution on any of the Kinross Common Shares;
(vi) Kinross has not effected or passed any resolution to approve
a split, consolidation or reclassification of any of the
outstanding Kinross Common Shares;
(vii) other than in the ordinary and regular course of business
consistent with past practice, there has not been any
material increase in or modification of the compensation
payable to or to become payable by Kinross or any of the
Kinross Subsidiaries to any of their respective directors or
officers or to any director or officer of any of the Kinross
Significant Interest Companies who is a nominee of Kinross,
or any grant to any such director or officer of any increase
in severance or termination pay or any increase or
modification of any bonus, pension, insurance or benefit
arrangement made to, for or with any of such directors or
officers;
(viii) Kinross has not effected any material change in its
accounting methods, principles or practices; and
(ix) other than as contemplated in connection with the
transactions contemplated herein, Kinross has not adopted
any, or materially amended any, collective bargaining
agreement, bonus, pension, profit sharing, stock purchase,
stock option or other benefit plan or shareholder rights
plan.
(h) Financial Matters.
(i) The audited consolidated financial statements of Kinross as
at and for the fiscal years ended December 31, 2005 and
December 31, 2004 (including the notes thereto and related
management's discussion and analysis) and Kinross' unaudited
financial statements as at and for the six months ended June
30, 2006 (including the notes thereto and related
management's discussion and analysis) were prepared in
accordance with Canadian GAAP consistently applied, and
fairly present in all material respects the consolidated
financial condition of Kinross at the respective dates
indicated and the results of operations of Kinross for the
periods covered on a consolidated basis (subject, in the case
of any unaudited interim consolidated financial statements,
to normal period-end adjustments) and reflect adequate
provision for the liabilities of Kinross on a consolidated
basis in accordance with Canadian GAAP. Neither Kinross nor
any of the Kinross Subsidiaries has any liability or
obligation (including, without limitation, liabilities or
obligations to fund any operations or work or exploration
program, to give any guarantees or for Taxes), whether
accrued, absolute, contingent or otherwise, not reflected in
the consolidated financial statements of Kinross for the six
months ended June
6
30, 2006, except liabilities and obligations incurred in the
ordinary and regular course of business since June 30, 2006.
(ii) The management of Kinross has established and maintained a
system of disclosure controls and procedures designed to
provide reasonable assurance that information required to be
disclosed by Kinross in its annual filings, interim filings
or other reports filed, furnished or submitted by it under
provincial and territorial securities legislation is reported
within the time periods specified in such legislation, laws
and rules.
(iii) Neither Kinross nor any of the Kinross Subsidiaries nor, to
the knowledge of Kinross, any director, officer, employee,
auditor, accountant or representative of Kinross or any of
the Kinross Subsidiaries has received or otherwise had or
obtained knowledge of any complaint, allegation, assertion or
claim, whether written or oral, regarding the accounting or
auditing practices, procedures, methodologies or methods of
Kinross or any of the Kinross Subsidiaries or their
respective internal accounting controls, including any
complaint, allegation, assertion or claim that Kinross or any
of the Kinross Subsidiaries has engaged in questionable
accounting or auditing practices, which has not been resolved
to the satisfaction of the Audit Committee of the Board of
Directors of Kinross.
(i) Compliance with Certain U.S. Securities Laws. Without limiting any
of the other representations or warranties made herein, Kinross and,
to the knowledge of Kinross, each of its officers and directors are
in compliance in all material respects with and have complied in all
material respects with the applicable provisions of the 1933 Act,
the 1934 Act and the Xxxxxxxx-Xxxxx Act.
(j) No Prohibited Payments. Neither Kinross, a Kinross Subsidiary nor,
to the knowledge of Kinross, any Kinross Significant Interest
Company or officer, director, employee, shareholder, agent or other
person acting on behalf of any Kinross Group Company, (i) has made
any Prohibited Payments, (ii) has made any payments or provided
services that, even though not Prohibited Payments, were not legal
to make or provide or that were not legal for the persons receiving
them to receive, (iii) has received any payments, services or
gratuities that were not legal to receive or that were not legal for
the person making them to provide, (iv) has engaged in any
transactions or made or received payments that were not properly
recorded on the accounting books and records or properly disclosed
on its financial statements, or (v) has maintained any off-book bank
or cash account or "slush funds".
(k) Books and Records. The corporate records and minute books of Kinross
and, since the date each Kinross Subsidiary was acquired or
incorporated by Kinross, the corporate records and minute books of
the Kinross Subsidiaries have been maintained in accordance with all
applicable Laws and are complete and accurate in all material
respects. The minute books of Kinross and the Kinross Subsidiaries
7
provided to Bema for review are true and complete in all material
respects and, except as disclosed in the Kinross Disclosure Letter,
the minutes and documents contained therein have not been amended or
supplemented since the time of such review. Financial books and
records and accounts of Kinross and the Kinross Subsidiaries in all
material respects (i) have been maintained in accordance with good
business practices on a basis consistent with prior years, (ii) are
stated in reasonable detail and accurately and fairly reflect the
transactions and acquisitions and dispositions of assets of Kinross
and the Kinross Group Companies, and (iii) in the case of Kinross
and the Kinross Subsidiaries, accurately and fairly reflect the
basis for the consolidated financial statements of Kinross.
(l) Litigation. There is no complaint, claim, action, proceeding or
investigation pending or in progress or, to the knowledge of
Kinross, threatened against or relating to Kinross or any of the
Kinross Subsidiaries or affecting any of their respective
properties, permits, licences or assets before any Governmental
Entity which individually or in the aggregate has a Material Adverse
Effect on Kinross. To the knowledge of Kinross, there is no claim,
action, proceeding or investigation pending or threatened against or
relating to any of the Kinross Significant Interest Companies or
affecting any of their respective properties or assets before any
Governmental Entity which individually or in the aggregate has a
Material Adverse Effect on Kinross. There is no bankruptcy,
liquidation, winding-up or other similar proceeding pending or in
progress, or, to the knowledge of Kinross, threatened against or
relating to Kinross or any of the Kinross Subsidiaries, or to the
knowledge of Kinross, any of the Kinross Significant Interest
Companies, before any Governmental Entity. Neither Kinross, any of
the Kinross Subsidiaries, or to the knowledge of Kinross, any of the
Kinross Significant Interest Companies, nor any of their respective
properties or assets is subject to any outstanding judgment, fine,
penalty, order, writ, injunction or decree that involves or may
involve, or restricts or may restrict, or requires or may require,
the expenditure of an amount of money in the aggregate in excess of
$10,000,000 as a condition to or a necessity for the right or
ability of Kinross or any Kinross Group Company, respectively, to
conduct its business in all material respects as it has been carried
on prior to the date hereof, or that would materially impede the
consummation of the transactions contemplated by this Agreement.
(m) Title to Properties and Condition of Assets. Except as set forth in
the Kinross Disclosure Letter, each of Kinross or a Kinross
Subsidiary has sufficient title (whether in fee simple or equivalent
or by means of an exploration, retention, reconnaissance,
development or mining permit, right or licence or similar), free and
clear of any title defect or Encumbrance, to its mineral projects
with proven and probable reserves (other than property as to which
it is a lessee, in which case it has a valid leasehold interest),
such properties being described in Schedule B hereto, except for
such defects in title or Encumbrances that, individually or in the
aggregate, do not have a Material Adverse Effect on Kinross. All
real and tangible personal property of Kinross and each Kinross
Group Company is in generally
8
good repair and is operational and usable in the manner in which it
is currently being utilized, subject to normal wear and tear and
technical obsolescence, repair or replacement, except for such
property whose failure to be in such condition does not have a
Material Adverse Effect on Kinross. All required permits or
registrations necessary to perfect title in and to such assets have
been carried out in compliance with applicable Law and are in full
force and effect, except for any non-compliance that, individually
or in the aggregate, does not have a Material Adverse Effect on
Kinross.
(n) Insurance. Kinross and the Kinross Subsidiaries maintain policies of
insurance in amounts and in respect of such risks as are normal and
usual for companies of a similar size operating in the mining
industry and as required in accordance with their respective
licences and permits, and such policies are in full force and effect
as of the date hereof.
(o) Environmental. Except as to the matters described in the Kinross
Disclosure Letter, since the date Kinross acquired each of the
Kinross Group Companies there has been no Environmental Condition,
and in respect of each such Kinross Group Company, to the knowledge
of Kinross, there exists no Environmental Condition, which,
individually or in the aggregate, has a Material Adverse Effect on
Kinross. Except as to the matters described in the Kinross
Disclosure Letter, Kinross has received no notice, directive,
advisory from any Government Entity of any Environmental Condition
that would have a Material Adverse Effect on Kinross.
Each of the Kinross Group Companies maintains sufficient financial
reserves, including, but not limited to, financial assurance
required by Governmental Entities pursuant to Environmental
Approvals, sufficient to meet the obligations of such Kinross Group
Company in respect of reclamation, remediation, closure and
post-closure obligations relating to the assets and operations of
such Kinross Group Company.
Except as to matters described in the Kinross Disclosure Letter,
each of the Kinross Group Companies has all Environmental Approvals
required pursuant to Environmental Laws in respect of the current
operations of such Kinross Group Company and is in compliance with
such Environmental Approvals except where any non-compliance would
not have a Material Adverse Effect on Kinross.
(p) Tax Matters. Except as disclosed in the Kinross Disclosure Letter,
Kinross and the Kinross Subsidiaries have filed or caused to be
filed and will continue to file and cause to be filed, in a timely
manner all Tax Returns required to be filed by them (all of which
Tax Returns were correct and complete in all material respects and
no material fact has been omitted therefrom) and have paid,
collected, withheld or remitted, or caused to be paid, collected,
withheld or remitted, all Taxes that are due and payable,
collectible and remittable. No extension of time in
9
which to file any Tax Returns is in effect. Kinross has provided
adequate accruals in accordance with Canadian GAAP in its published
consolidated financial statements for any Taxes for the period
covered by such financial statements which have not been paid,
whether or not shown as being due on any Tax Returns. Since such
publication date, no material liability for Taxes not reflected in
such consolidated financial statements has been incurred or accrued
by Kinross or the Kinross Subsidiaries other than in the ordinary
course of business. No lien for Taxes has been filed or exists other
than for Taxes not yet due and payable.
Except as disclosed in the Kinross Disclosure Letter, there are no
reassessments of Taxes in respect of Kinross or the Kinross
Subsidiaries that have been issued and are outstanding and there are
no outstanding issues which have been raised and communicated to
Kinross or any Kinross Subsidiary by any Governmental Entity for any
taxation year in respect of which a Tax Return of Kinross or any
Kinross Subsidiary has been audited. Except as disclosed in the
Kinross Disclosure Letter, no Governmental Entity has challenged,
disputed or questioned Kinross or any Kinross Subsidiary in respect
of Taxes or Tax Returns. Except as disclosed in the Kinross
Disclosure Letter, none of Kinross or any Kinross Subsidiary is
negotiating any draft assessment or reassessment with any
Governmental Entity. Except as disclosed in the Kinross Disclosure
Letter, Kinross is not aware of any contingent liabilities for Taxes
or any grounds for an assessment or reassessment of Kinross or any
Kinross Subsidiary, including, without limitation, unreported
benefits conferred on any shareholder, aggressive treatment of
income, expenses, credits or other claims for deduction under any
return or notice other than as disclosed in the Financial
Statements. Except as disclosed in the Kinross Disclosure Letter,
neither Kinross nor any Kinross Subsidiary has received any
indication from any Governmental Entity that an assessment or
reassessment of Kinross or any Kinross Subsidiary is proposed in
respect of any Taxes, regardless of its merits. Except as disclosed
in the Kinross Disclosure Letter, neither Kinross nor any Kinross
Subsidiary has executed or filed with any Governmental Entity any
agreement or waiver extending the period for assessment,
reassessment or collection of any Taxes. All taxation years up to
and including the taxation year ended 1992 are considered closed by
Canadian federal and provincial governmental bodies for the purposes
of all Taxes.
Kinross and each Kinross Subsidiary has withheld from each payment
made to any of its present or former employees, officers and
directors, and to all other persons all amounts required by law to
be withheld, and furthermore, has remitted such withheld amounts
within the prescribed periods to the appropriate Governmental
Entity. Kinross and each Kinross Subsidiary has remitted all Canada
Pension Plan contributions, provincial pension plan contributions,
employment insurance premiums, employer health taxes and other Taxes
payable by it in respect of its employees and has remitted such
amounts to the proper Governmental Entity within the time required
under the applicable legislation. Kinross and each Kinross
Subsidiary has charged, collected and remitted on a
10
timely basis all Taxes as required under applicable legislation on
any sale, supply or delivery whatsoever, made by them.
Kinross and each Kinross Subsidiary will not at any time be deemed
to have a capital gain pursuant to subsection 80.03(2) of the Tax
Act or any analogous provincial legislative provision as a result of
any transaction or event taking place in any taxation year ending on
or before the Closing Date.
There are no circumstances existing which could result in the
application of section 78 or 160 of the Tax Act or any equivalent
provincial provision to Kinross or any Kinross Subsidiary.
Neither Kinross nor any Kinross Subsidiary has participated,
directly or through a partnership, in a transaction or series of
transactions contemplated in subsection 247(2) of the Tax Act or any
analogous provincial legislative provision.
In respect of the Kinross Subsidiaries, no transaction has been
entered into without a valid business purpose.
(q) Reporting Status. Kinross is a reporting issuer or its equivalent in
each of the provinces of Canada. Kinross is subject to the filing
obligations imposed by section 13 of the 1934 Act. The Kinross
Common Shares are listed on the TSX and the NYSE.
(r) Reports. Kinross has filed or furnished, as applicable, with the
Securities Authorities, stock exchanges and all applicable
self-regulatory authorities all forms, reports, schedules,
statements, certifications, material change reports and other
documents required to be filed or furnished by it (such forms,
reports, schedules, statements, certifications and other documents,
including any financial statements or other documents, including any
schedules included therein, are referred to as the "Kinross
Documents"). The Kinross Documents, at the time filed or furnished,
(a) did not contain any misrepresentation (as defined in the
Securities Act (Ontario)) and (b) complied in all material respects
with the requirements of applicable securities legislation and the
rules, policies and instruments of all Securities Authorities having
jurisdiction over Kinross. Without restricting the generality of the
foregoing, each of the Kinross Documents filed or furnished with the
SEC, at the time of its filing or furnishing complied in all
material respects with the applicable requirements of the 1933 Act,
the 1934 Act and the Xxxxxxxx-Xxxxx Act and any rules and
regulations made thereunder applicable to such Kinross Documents. As
of their respective dates (or, if amended prior to the date hereof,
as of the date of such amendment) the Kinross Documents filed or
furnished with the SEC 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 made therein, in light
of the circumstances in which they were made, not misleading.
Kinross has not filed
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any confidential material change or other report or other document
with any Securities Authorities or stock exchange or other
self-regulatory authority which at the date hereof remains
confidential.
(s) Mineral Reserves and Resources. The estimated proven and probable
mineral reserves and estimated, measured, indicated and inferred
mineral resources disclosed in the Kinross Documents filed on SEDAR
as of year-end December 31, 2005 have been prepared and disclosed in
all material respects in accordance with National Instrument 43-101.
There has been no material reduction (other than as a result of
operations in the ordinary course of business) in the aggregate
amount of estimated mineral reserves, estimated mineral resources or
mineralized material of Kinross and its subsidiaries and Kinross'
material joint ventures, taken as a whole, from the amounts
disclosed in the Kinross Documents filed on SEDAR.
(t) Compliance with Laws and Exchange Requirements. Kinross and, since
the date Kinross acquired each of the Kinross Subsidiaries, the
Kinross Subsidiaries (A) have complied with and are not in violation
of any applicable Laws other than such non-compliance or violations
which would not, individually or in the aggregate, have a Material
Adverse Effect on Kinross and (B) have complied and are in
compliance, in all material respects, with any applicable listing
and corporate governance rules and regulations of the TSX and NYSE.
To the knowledge of Kinross, the Kinross Subsidiaries and the
Kinross Significant Interest Companies (X) have complied with and
are not in violation of any applicable Laws other than such
non-compliance or violations which would not, individually or in the
aggregate, have a Material Adverse Effect on Kinross and (Y) have
complied and are in compliance, in all material respects, with any
applicable listing and corporate governance rules and regulations of
the TSX and NYSE.
(u) No Cease Trade. Kinross is not subject to any cease trade or other
order of any applicable stock exchange or Securities Authority and,
to the knowledge of Kinross, no investigation or other proceedings
involving Kinross which may operate to prevent or restrict trading
of any securities of Kinross are currently in progress or pending
before any applicable stock exchange or Securities Authority.
(v) No Option on Assets. Except as disclosed in the Kinross Disclosure
Letter, no person has any agreement or option or any right or
privilege capable of becoming an agreement or option for the
purchase from Kinross or the Kinross Subsidiaries of any of the
material assets of Kinross or any of the Kinross Subsidiaries.
(w) Certain Contracts. Except as disclosed in the Kinross Disclosure
Letter, neither Kinross, nor to the knowledge of Kinross any of the
Kinross Subsidiaries is, nor since the date Kinross acquired each of
the Kinross Subsidiaries has any Kinross Subsidiary become, a party
to or bound by any non-competition agreement or any other agreement,
obligation, judgment, injunction, order or decree which purports
12
to (i) limit the manner or the localities in which all or any
material portion of the business of Kinross or the Kinross
Subsidiaries are conducted, (ii) limit any material business
practice of Kinross or any Kinross Subsidiary in any material
respect, or (iii) restrict any acquisition or disposition of any
material property by Kinross or any Kinross Subsidiary in any
material respect.
(x) Foreign Private Issuer. As of the date hereof, Kinross is a "foreign
private issuer" as defined in Rule 405 under the 1933 Act.
(y) Investment Company Status. Kinross is not an "investment company",
as such term is defined under the 1940 Act.
(z) Shares. The Kinross Common Shares to be issued pursuant to the
transactions contemplated herein will, upon issue, be issued as
fully-paid and non-assessable shares.
(aa) Certain Securities Law Matters. The Kinross Common Shares to be
issued in connection with the transactions contemplated herein,
including the Kinross Common Shares to be issued upon the exercise
of the Bema Options and the Bema Warrants will not be subject to any
statutory hold or restricted period under the securities legislation
of any province or territory of Canada and, subject to restrictions
contained therein in respect of "control distributions", will be
freely tradable by the holders thereof. The Kinross Common Shares to
be issued in connection with the Arrangement to Bema Shareholders
who are residents of the United States of America or who are "U.S.
persons" within the meaning of Regulation S under the 1933 Act,
other than persons who are deemed to be affiliates of Bema for the
purposes of Rule 145 under the 1933 Act, will not bear any
restrictive legend imposed as a result of the operation of the 1933
Act.
(bb) Full Disclosure. Kinross has made available to Bema through Kinross
Documents filed on SEDAR and otherwise, all material information,
including financial, operational and other information required by
National Instrument 43-101, in respect of the properties listed in
Schedule B required by National Instrument 43-101 and all such
information as made available to Bema was true and correct in all
material respects and no material fact or facts were omitted
therefrom which would make such information misleading.
(cc) No Broker's Commission. Kinross has not entered into any agreement
that would entitle any person to any valid claim against Kinross for
a broker's commission, finder's fee or any like payment in respect
of the Arrangement or any other matter contemplated by this
Agreement except for the financial advisory fees disclosed in the
Kinross Disclosure Letter.
(dd) Investment Canada. Kinross is not a "non-Canadian" within the
meaning of the Investment Canada Act (Canada).
