SHARE SALE AGREEMENT
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RIO TINTO BRAZILIAN HOLDINGS LIMITED
RIO TINTO BRAZILIAN INVESTMENTS LIMITED
RIO TINTO EUROPEAN HOLDINGS LIMITED
and
TVX PARTICIPACOES LTDA
CAYMAN PARTICIPACOES INC
KINROSS GOLD CORPORATION
TABLE OF CONTENTS
PAGE
1. Definitions and Interpretation............................................5
2. Sale and Purchase........................................................11
3. Purchase Consideration...................................................11
4. Condition Precedent......................................................14
5. Completion...............................................................15
6. Obligations of Vendors and Purchaser between the date of this
Agreement until and including Completion..............................18
7. Separation...............................................................19
8. Acknowledgements and Undertakings by Purchaser...........................22
9. Warranties and Indemnities by Vendors....................................24
10. Co-operation.............................................................32
11. Warranties and Indemnities by the Purchaser..............................33
12. Guarantees...............................................................35
13. Group Support and Cessation of Interests.................................37
14. Announcements and Confidentiality........................................37
15. Costs....................................................................39
16. Merger...................................................................39
17. Assignment...............................................................39
18. Further Assurances.......................................................39
19. Entire Agreement and Remedies............................................40
20. Waiver...................................................................40
21. Time of the Essence......................................................40
22. Exclusion of Third Party Rights under Contracts (Rights of
Third Parties) Act 1999...............................................41
23. Invalidity...............................................................41
24. Notices..................................................................41
25. Appointment of Process Agent.............................................43
26. Governing Law and Jurisdiction...........................................43
2
27. Counterparts.............................................................43
Schedule 1: Particulars of Vendors, Shares and Consideration..................44
Schedule 2: Warranties........................................................45
Schedule 3: Working Capital ..................................................48
Schedule 4: Employees of RPM..................................................54
Schedule 5: Corporate Structure...............................................55
Schedule 6: Powers of Attorney................................................56
Annexure A: Map of the Project Area...........................................59
Annexure B: Due Diligence Documentation.......................................60
Annexure C: Financial Statements..............................................63
Agreed Draft "A" Termination Agreements relating to the Shareholders' Agreement
and the Operation and Management Agreement
Agreed Draft "B" Notes Transfer Agreement
Agreed Draft "C" Deed of Novation relating to the Pre-export Purchase Agreement
Agreed Draft "D" Notes Side Agreement
Agreed Draft "E" Proforma resignation letters
Agreed Draft "F" Deed of termination of purchase and sale contract between RPM
and Rio Tinto Resources Limited
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THIS AGREEMENT is made the 9th day of December, 2004 between:
1. RIO TINTO BRAZILIAN HOLDINGS LIMITED, a company incorporated in England
and Wales with company number 04986803 and having its registered office
at 0 Xx. Xxxxx'x Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx and RIO TINTO
BRAZILIAN INVESTMENTS LIMITED, a company incorporated in England and
Wales with company number 04986798 and having its registered office at 0
Xx. Xxxxx'x Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx (together the
VENDORS and each a VENDOR); and
2. RIO TINTO EUROPEAN HOLDINGS LIMITED, a company incorporated in England
and Wales with company number 0993068 and having its registered office
at 0 Xx. Xxxxx'x Xxxxxx, Xxxxxx XX0X 0XX (RTEH); and
3. TVX PARTICIPACOES LTDA, a company incorporated in Brazil with company
number 29.398.922/0001-80 and having its registered office at Xxxxx xx
Xxxxxxxx, Xx. 000, Xxxxxxx Internacional Rio, 0xx Xxxxx, Xxx xx Xxxxxxx,
Xxxxx of Rio de Janeiro, Brazil (the PURCHASER); and
4. CAYMAN PARTICIPACOES INC., a company incorporated in Grand Cayman and
having its registered office at c/o Chartered Trust Services Ltd., c/o
Close Brothers (Cayman) Limited, 000 Xxxxx Xxxxxx Xxxxxx, PO Box 1034,
GT, Grand Cayman, Cayman Islands, BWI (CAYMANCO); and
5. KINROSS GOLD CORPORATION, a company incorporated in Ontario, Canada and
having its registered office at Suite 5200, Scotia Plaza, 00 Xxxx Xxxxxx
Xxxx, Xxxxxxx, Xxxxxxx, X0X 0XX, Xxxxxx (KINROSS).
RECITALS
A. The Vendors together are the registered holders and beneficial owner of
the Shares, which are the only issued shares in the capital of the
Company.
B. RTEH will be owed an aggregate amount of US$10,268,000 as to principal
as at the Completion Date plus accrued and unpaid interest thereon by
RPM pursuant to floating rate notes (tranches 2, 3 and 5) issued by RPM
to RTEH on, respectively, 17 July 1996, 22 January 1997 and 13 May 1999
(RTEH NOTES).
C. Pursuant to a letter agreement entered into by RTEH and Kinross the
Vendors have agreed to sell the Shares to the Purchaser and RTEH has
agreed to transfer the RTEH Notes to Caymanco and the Purchaser has
agreed to buy the Shares from the Vendors and Caymanco has agreed to
acquire the RTEH Notes from RTEH on the terms of this Agreement.
IT IS AGREED as follows.
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1. DEFINITIONS AND INTERPRETATION
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1.1 DEFINITIONS
The following definitions apply unless the context requires otherwise.
ACCOUNTING POLICIES means the accounting policies set out in Part II of
Schedule 3.
AFFILIATE means, in the case of any party, any company or other
corporate entity or enterprise which directly or indirectly controls, is
controlled by or is under common control with, that party and, in the
case of the Vendors, includes any member of the Rio Tinto Group. For
these purposes, "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies
through ownership of voting securities, contract, voting trust or
otherwise.
ASSIGNMENT CONSIDERATION means the consideration for the assignment of
the RTEH Notes, being an amount equal to the principal amount of the
RTEH Notes and all interest accrued and unpaid thereon as at the
Completion Date (being an amount of $10,447,780).
BUSINESS DAY means a day on which banks are open for business
simultaneously in Xxxxxx, Xxxxxxx and Rio de Janeiro, excluding a
Saturday, a Sunday or a public holiday.
CLAIM means a claim against the Vendors or RTEH, whether in contract or
otherwise, in respect of any of the Warranties or indemnities or under
any provision of this Agreement or the agreements referred to herein.
COMPANY means Morro do Ouro Investimentos S.A., a company incorporated
in Brazil with its registered office at Bloco H, no. 30, 12 o andar
Parte B, CEP 00000-000, Xxxxxxxx, XX, Xxxxxx.
COMPANY'S ACCOUNTANTS means Itecon Instituto Tecnico de Consultoria e
Auditoria S/C (Xxxx Xxxxxxx xx Xxxxxx-CRC/DF: 2864) (in the case of the
Company, MOEM and Xxxxx Xxxxxxx) and Xxxxxx Xxxx xx Xxxxxx Xxxxx
(CRC/RJ: 046502-T-4-MG) (in the case of RPM).
COMPLETION means completion by the Vendors and the Purchaser of the sale
and purchase of the Shares and the assignment by RTEH to Caymanco of the
RTEH Notes as provided in Clause 5.
COMPLETION ACCOUNTS shall have the meaning set out in Schedule 3,
prepared in accordance with the Accounting Policies.
COMPLETION DATE means the later of (i) 31 December 2004 and (ii) the
date on which the condition precedent set out in Clause 4.1 is satisfied
by Kinross or waived by the Vendors.
CONFIDENTIAL INFORMATION shall have the meaning set out in Clause
14.2(a).
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DEFAULT RATE means the aggregate of the LIBOR rate and a margin of 4%
per annum. For these purposes LIBOR means the rate of interest on the
date which is two Business Days prior to the date upon which the default
occurs, being the British Bankers Association Interest Settlement Rate
for United States dollar deposits which appears on the display
designated as page "LIBOR01" on the Xxxxxx'x Screen (or such other
display as may replace such page on the Xxxxxx'x Screen) at or about
11.00 am (London time).
DISCLOSURE MATERIAL means the material (whether in writing, oral, in the
form of electronic media or otherwise) disclosed or made available by
the Vendors or their servants and agents or any of the Vendors'
Affiliates or their servants and agents to the Purchaser, Caymanco,
Kinross or their respective servants or agents or their respective
Affiliates or their respective servants and agents in connection with
the Company and the Subsidiaries including, without prejudice to the
generality of the foregoing, all information which was disclosed in the
due diligence exercise conducted by the Purchaser, Caymanco, Kinross and
their respective servants and agents and their respective Affiliates and
their respective servants and agents, the index for which is set out at
Annexure B and all answers to questions asked by or on behalf of the
Purchaser, Caymanco, Kinross or their respective servants and agents or
their respective Affiliates or their respective servants and agents and
all information which the Purchaser, Caymanco, Kinross or their
respective Affiliates or their respective servants and agents obtained
as a result of the joint venture with the Rio Tinto Group in RPM.
ENVIRONMENT means all or any of the following media: namely air, water
(including, without limitation, territorial, coastal and inland waters
and groundwater and water in drains and sewers) and land and the medium
of air includes (without limitation) the air within any building or the
air within any other man-made or natural structure above or below
ground.
ENVIRONMENTAL LAW means all Laws concerning the pollution or protection
of the Environment or harm to or the protection of human health, animal
welfare, living organisms, or the generation, transportation, storage,
treatment or disposal of any Hazardous Substance.
EXPERT ACCOUNTANT shall have the meaning set out in Schedule 3.
FINANCIAL ACCOUNTS means the statutory accounts of MOEM for the
financial year ending 31 December 2003 comprising a balance sheet as at
31 December 2003 and a profit and loss account for the period from 1
January 2003 to 31 December 2003 and the management accounts for each of
MOI and Xxxxx Xxxxxxx for the financial period ending 31 October 2004,
comprising, in each case, a balance sheet as at 31 October 2004, being
the accounts set out in Annexure C.
GOVERNMENTAL AGENCY means any government or any governmental,
semi-governmental or judicial entity or authority and includes any
self-regulatory organisation established under statute or any stock
exchange.
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GROUP means the Company and the Subsidiaries and RPM.
GROUP SUPPORT shall have the meaning set out in Clause 13.1.
HAZARDOUS SUBSTANCE means any substance whether natural or artificial
and whether in solid or liquid form or in the form of a gas or vapour
whether alone or in combination (chemically or physically) with any
other substance that is causing or capable of causing harm to any living
organism or damage to the Environment.
LAWS means all or any applicable: (a) law (whether criminal, civil or
administrative), common law, judgment, court order, decisions or any
tribunal, statute, statutory instrument, regulation, directive, European
Union decision (insofar as legally binding), by-law, treaty, the Treaty
of Rome and any directives made or passed under or in connection with
it; and (b) (insofar as the following have binding force) government
circular, code of practice and any codes of conduct and guidance notes,
or instruction or decision of any competent regulatory body.
MINING ACT means the Brazilian Decree - law No. 227 dated 28 February
1967.
MINING CONCESSIONS means any concessions or licences, including
exploration licenses (ALVARAS DE PESQUISA), granted under the Mining Act
which are connected with the Project, including any renewal, extension,
modification or variation of them.
MOEM means Morro do Ouro Empreendimentos Minerais S.A., a company
incorporated in Brazil with its registered office at Bloco H, no. o30,
12o andar, Parte B, CEP 00000-000, Xxxxxxxx, XX, Xxxxxx.
NOTES SIDE AGREEMENT means the side agreement between Caymanco and RTEH
(and acknowledged by BankBoston) in the form of Agreed Draft "D", as
required under the terms of letter agreements between First National
Bank of Boston (or BankBoston N.A.) and RTEH dated, respectively, 12
July 1996 and 13 May 1999 in relation to the RTEH Notes.
NOTES TRANSFER AGREEMENT means the transfer agreement between RTEH and
Caymanco in relation to each of the RTEH Notes in the form required by
the RTEH Notes as set out in Agreed Draft "B".
NOTICE shall have the meaning set out in Clause 24.
OBLIGATIONS shall have the meaning set out in Clause 12.2.
OPERATION AND MANAGEMENT AGREEMENT means the operation and management
agreement dated 20 June 2003 between Rio Tinto Brasil Ltda (as assigned
to MOEM), RPM and the Purchaser, as amended.
PRE-EXPORT PURCHASE AGREEMENT means the purchase and sale contract dated
18 May
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2001 between RPM and Rio Tinto Resources Limited (as amended on 28 June
2002) relating to the purchase of gold bars by Rio Tinto Resources
Limited.
PROJECT means the exploration and mining operation conducted currently
and in the past by any member of the Rio Tinto Group at Morro do Ouro,
Brazil, and everything associated with that operation from time to time,
including any relevant Mining Concessions granted under applicable
mining legislation and any renewal, extension, modification or variation
of them, all other freehold and leasehold interests in land, all other
property and assets associated with the conduct of the business of RPM
at Morro do Ouro, Brazil (including plant and equipment) and all
current, future and contingent liabilities of RPM at Morro do Ouro,
Brazil (whether related to its period of ownership of all such property
and assets or otherwise).
PROJECT AREA means the area within the external boundaries of the Mining
Concessions as at the date of this Agreement as set out on the map at
Annexure A.
PURCHASER'S ACCOUNTANT means Deloitte & Touche, or any other firm of
accountants which may be nominated in writing by the Purchaser from time
to time.
PURCHASE PRICE means, together, the Share Consideration and the
Assignment Consideration.
RIO TINTO GROUP means Rio Tinto plc (incorporated in England and Wales),
Rio Tinto Limited (incorporated in Australia) and any other corporation
wherever situated in which Rio Tinto plc and/or Rio Tinto Limited owns
or controls directly or indirectly more than 50% of the shares or stock
carrying the right to vote at a general meeting (or its equivalent) of
the corporation.
RPM means Rio Paracatu Mineracao S.A., a company incorporated in Brazil
with its registered office at Xxxxxxx xx Xxxxxxx, Xxxxxxxx, Xxxxx xx
Xxxxx Xxxxxx, Xxxxxx.
RTEH NOTES shall have the meaning set out in Recital B.
XXXXX XXXXXXX means Rio Xxxxx Xxxxxxx Empreendimentos Minerais S.A., a
company incorporated in Brazil with its registered office at Bloco H,
no. o30, 12o andar, Parte B, CEP 00000-000, Xxxxxxxx, XX, Xxxxxx.
SECURITY INTEREST means an interest or power:
(a) reserved in or over any interest in any asset including, without
limitation, any retention of title; or
(b) created or otherwise arising in or over any interest in any
asset under a xxxx of sale, mortgage, charge, lien, pledge,
trust or power,
by way of security for the payment of a debt or any other monetary
obligation or the performance of any other obligation and whether
existing or agreed to be granted or created.
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SHAREHOLDERS' AGREEMENT means the shareholders' agreement dated 20 June
2003 in relation to RPM between Rio Tinto Brasil Ltda (as assigned to
MOEM) and the Purchaser.
SHARES means all the shares in the capital of the Company, together with
the benefit of all rights (including dividend rights) attached or
accruing to those shares, at Completion.
SHARE CONSIDERATION means the difference between an amount of
$260,000,000 and the Assignment Consideration (as adjusted pursuant to
Clause 3.3).
SUBSIDIARIES means together MOEM and Xxxxx Xxxxxxx (but not RPM) (and
each a SUBSIDIARY).
TARGET DATE means 31 December 2004.
TAX comprises all forms of taxation and statutory, governmental, state,
provincial, local governmental or municipal impositions, duties,
contributions, levies and like impost, in each case whether of Brazil or
elsewhere in the world whenever imposed and all penalties, charges,
costs and interest relating thereto.
TAX AUTHORITY means the Brazilian tax authorities and any other
statutory, governmental, state, provincial or local governmental
authority, body or official whosoever (whether of Brazil or elsewhere in
the world).
TERMINATION AGREEMENTS means the agreements in the form of Agreed Draft
"A" terminating the Shareholders' Agreement and the Operation and
Management Agreement.
VENDORS' ACCOUNTANT means PricewaterhouseCoopers LLP or any other firm
of accountants which may be nominated in writing by the Vendors from
time to time.
WARRANTIES means the warranties contained in Schedule 2.
WORKING CAPITAL shall have the meaning set out in Schedule 3.
WORKING CAPITAL AMOUNT means the actual Working Capital at Completion
determined in accordance with the Completion Accounts and the procedures
set out in Schedule 3.
WORKING CAPITAL DETERMINATION DATE means the date on which the Working
Capital Amount is finally agreed or determined pursuant to Schedule 3.
WORKING CAPITAL STATEMENT shall have the meaning set out in Schedule 3.
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1.2 INTERPRETATION
Headings are for convenience only and do not affect interpretation. The
following rules apply unless the context requires otherwise.
(a) The singular includes the plural and conversely.
(b) A gender includes all genders.
(c) If a word or phrase is defined, its other grammatical forms have
a corresponding meaning.
(d) A reference to a person, corporation, trust, partnership,
unincorporated body or other entity includes any of them.
(e) A reference to a Clause or Schedule or Annexure is a reference
to a clause of or a schedule or annexure to this Agreement, each
of which forms part of this Agreement for all purposes.
(f) A reference to an agreement or document (including, without
limitation, a reference to this Agreement) is to the agreement
or document as amended, varied, supplemented, novated or
replaced, except to the extent prohibited by this Agreement or
that other agreement or document.
(g) A reference to a party to this Agreement or another agreement or
document includes the party's successors and permitted
substitutes or assigns (and, where applicable, the party's legal
personal representatives).
(h) A reference to legislation or to a provision of legislation
includes a modification or re-enactment of it, a legislative
provision substituted for it and a regulation or statutory
instrument issued under it.
(i) A reference to writing includes a facsimile or electronic
transmission and any means of reproducing words or information
(including geological information) in a tangible and permanently
visible form.
(j) A reference to $, dollars and cents is to United States
currency, unless otherwise expressed to the contrary.
(k) References to any English legal term for any action, remedy,
method of judicial proceeding, legal document, legal status,
court, official or any legal concept or thing shall in respect
of any jurisdiction other than England be deemed to include what
most nearly approximates the English legal term in that
jurisdiction and references to any English statute or enactment
shall be deemed to include any equivalent or analogous laws or
rules in any other jurisdiction.
(l) References to documents being "in agreed terms" or an "Agreed
Draft" or any
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similar expression shall be to documents agreed between the
parties, annexed to this Agreement and initialled for the
purposes of identification by RTEH (on behalf of itself and the
Vendors) and the Purchaser (on behalf of itself, Caymanco and
Kinross).
2. SALE AND PURCHASE
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2.1 SALE AND PURCHASE OF SHARES AND RTEH NOTES
(a) Each of the Vendors is the legal and beneficial owner of and,
subject to the terms of this Agreement, each of the Vendors
agrees to sell, the Shares set out opposite the Vendor's name in
column (3) of Schedule 1 to the Purchaser and the Purchaser
agrees to buy the Shares from the Vendors.
(b) RTEH is the legal and beneficial owner of and, subject to the
terms of this Agreement, RTEH agrees to transfer, the RTEH Notes
to Caymanco and Caymanco agrees to buy the RTEH Notes from RTEH.
2.2 WAIVER
The Vendors agree to waive or procure the waiver of any restrictions on
transfer which may exist in relation to the Shares or the shares in the
Subsidiaries to be transferred pursuant to this Agreement under the
constitutional documents of the Company and the Subsidiaries or
otherwise. Each of the Vendors and the Purchaser agrees to waive or
procure the waiver of any restrictions on transfer which may exist in
relation to the shares in RPM owned by MOEM (legally and/or
beneficially) under the constitutional documents of RPM or otherwise.
2.3 ASSIGNMENT OF THE RTEH NOTES
Subject to the terms of this Agreement, RTEH shall assign the RTEH Notes
(including the principal amount thereof and all accrued and unpaid
interest thereon as at Completion) to Caymanco by its execution of the
Notes Transfer Agreement for each of the RTEH Notes.
3. PURCHASE CONSIDERATION
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3.1 AGGREGATE PURCHASE CONSIDERATION
The total consideration for the sale of the Shares and the assignment of
the RTEH Notes shall be the Purchase Price.
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3.2 COMPOSITION OF THE PURCHASE CONSIDERATION
The Purchase Price shall be satisfied by:
(a) the payment to the Vendors by the Purchaser of the Share
Consideration in the amount set out against each Vendor's name
in column (4) of Schedule 1 at Completion;
(b) the payment to RTEH by Caymanco of the Assignment Consideration
at Completion; and
(c) the payment by the Purchaser to the Vendors (in the relevant
proportions set out opposite their respective names in column
(4) of Schedule 1) of such further sums (if any) as shall become
payable in accordance with Clause 3.3.
3.3 WORKING CAPITAL ADJUSTMENT
(a) The Vendors shall be entitled to receive (in the relevant
proportions set out opposite their respective names in column
(4) of Schedule 1) by way of additional consideration for the
Shares, $1 for each $1 by which the Working Capital Amount
exceeds $zero, which sum shall be paid on the dates and in the
manner specified in paragraph (c) of this Sub-Clause 3.3,
subject to a maximum amount of $20,000,000.
(b) The Vendors shall be required to repay to the Purchaser $1 for
each $1 by which the Working Capital Amount, if negative, is
less than $zero, which sum shall be paid by the Vendors on the
date and in the manner specified in paragraph (c) of this
Sub-Clause 3.3, subject to a maximum amount of $20,000,000.
(c) Any additional consideration for the Shares payable by the
Purchaser under paragraph (a) or any sum repayable by the
Vendors under paragraph (b) shall become payable 5 Business Days
after the Working Capital Determination Date and shall be paid
to the Vendors or (as the case may be) the Purchaser in cash.
The calculation of the Working Capital Amount shall be made in
accordance with Schedule 3.
3.4 INCREASE IN CONSIDERATION IN THE EVENT OF DEFAULT
If the Purchaser, Caymanco or Kinross or any of the Vendors fails to pay
or to procure the payment of any sum which it is obliged to pay or
procure as consideration under Clauses 3.2 or 3.3 on the date by which
that payment is due, the amount of such sum in respect of which the
Purchaser or Caymanco or Kinross or the Vendors (as the case may be) is
liable to pay or procure the payment of shall be increased at the
Default Rate (before and after judgment) as applied from the date when
such payment is due until the date of actual payment, without prejudice
to any other rights or remedies which may exist under this Agreement.
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3.5 REDUCTION OF CONSIDERATION
If any payment is made by the Vendors or RTEH to the Purchaser or
Caymanco in respect of any Claim against the Vendors or RTEH for any
breach of this Agreement (or any agreement entered into pursuant to this
Agreement) or under any of the indemnities provided by the Vendors to
the Purchaser and/or Caymanco and its Affiliates contained herein or
pursuant to Clause 3.3(b) or by the Vendors or its Affiliates to RPM or
the relevant RPM employees pursuant to Clause 7.1, the payment shall be
made by way of adjustment of the consideration paid by the Purchaser
and/or Caymanco for the Shares or the RTEH Notes (as appropriate) to
such party or parties and such consideration shall be deemed to have
been reduced by the amount of such payment.
3.6 METHOD OF PAYMENT
All payments required to be made under this Agreement must be made in
United States dollars in immediately available funds before 5.00pm
(London time) on the due date for payment, by telegraphic transfer to a
bank account nominated by the payee or as may be otherwise agreed in
writing between the payee and the payor. Unless otherwise specified in
relation to a particular payment, the details of the bank account
nominated by the Vendors and RTEH are as follows:
[Information omitted]
Unless otherwise specified in relation to a particular payment, the
details of the bank account nominated by the Purchaser and Caymanco are
as follows:
[Information omitted]
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4. CONDITION PRECEDENT
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4.1 CONDITION PRECEDENT
This Agreement other than Clauses 1.2 (Interpretation), 12.1
(Guarantee), 14 (Announcements and Confidentiality), 15 (Costs), 17
(Assignment), 19 (Entire Agreement and Remedies), 20 (Waiver), 24
(Notices), 25 (Appointment of Process Agent) and 26 (Governing Law and
Jurisdiction) is conditional on the following condition precedent being
satisfied on or before 31 December 2004 (the TARGET DATE), namely the
obtaining by Kinross of (i) all necessary consents from Westdeutsche
Landesbank Girozentrale, New York Branch (WESTLB) (and any other
relevant bank or other organisation whose consent may be required,
including any assignee of rights under the Pre-export Purchase Agreement
or as purchaser of on-sale rights pursuant to the Pre-export Purchase
Agreement) to the assignment and novation to Kinross of the Pre-export
Purchase Agreement by entry into Agreed Draft "C" with such amendments
or in such other form as may be agreed between RTEH, Kinross and WestLB
and (ii) a full release and discharge from WestLB in a form satisfactory
to the Vendors of the guarantee provided by Rio Tinto Brasil Ltda to
WestLB in connection with the pre-export financing arrangements to which
the Pre-export Purchase Agreement relates.
4.2 WAIVER
The Vendors may, by written notice to Kinross, waive the condition
precedent set out in Clause 4.1 in whole or in part at any time on or
before the Target Date, subject to any additions or amendments to such
condition precedent as the Vendors think fit.
4.3 SATISFACTION OF CONDITIONS
Kinross shall use its reasonable endeavours to satisfy or procure the
satisfaction of the condition precedent in Clause 4.1 as soon as
possible and in any event on or before the Target Date.
4.4 NOTIFICATION OF SATISFACTION OF CONDITIONS
Kinross shall notify the Vendors (to the extent that they are not
already aware) of the satisfaction of the condition precedent set out in
Clause 4.1 as soon as possible after it has been satisfied and in any
event within one Business Day of such satisfaction.
4.5 FAILURE TO SATISFY CONDITIONS
If the condition precedent set out in Clause 4.1 remains unsatisfied at
the end of the Target Date and has not been waived on or before that
date by the Vendors, the provisions of Clause 4.6 shall apply.
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4.6 TERMINATION
This Clause shall apply only in the circumstances referred to in Clauses
4.5 or 5.5. Where this Clause applies, this Agreement, other than the
Clauses set out in Clause 4.1, shall automatically terminate with
immediate effect and each party's rights and obligations other than
those specified above shall cease immediately on termination.
5. COMPLETION
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5.1 COMPLETION DATE
Completion of the sale and purchase of the Shares and the assignment of
the RTEH Notes shall take place on the Completion Date at such place or
places as the parties may agree.
5.2 PAYMENT OF PURCHASE CONSIDERATION
At Completion the Purchaser and Caymanco shall pay the aggregate sum of
$260,000,000 to the Vendors and RTEH, such payment to be made in
accordance with Clause 3.6.
5.3 VENDORS' OBLIGATIONS
On the Completion Date and after receiving confirmation of the receipt
of the sum of $260,000,000, the Vendors shall (or shall procure the
same):
(a) transfer the Shares to the Purchaser (save for one Share to be
held in the name of Montanapar Participacoes Ltda) by the
registration and annotation in the Company's books of transfer
of shares and registry of shares, as required by Brazilian law;
(b) deliver to the Purchaser the resignations and releases of the
directors (Conselho de Administracao)(if any) or officers
(Diretoria) in the form of Agreed Draft "E" of:
(i) Xxxxx X. Xxxxxxxx and Xxxxxx Xxxxxx Xxxxxx in respect of
the Company;
(ii) Xxxxx X. Xxxxxxxx and Xxxxxx Xxxxxx Xxxxxx in respect of
MOEM;
(iii) Xxxxx X. Xxxxxxxx and Xxxxxx Xxxxxx Xxxxxx in respect of
Xxxxx Xxxxxxx; and
(iv) Xxxxx Xxxxxxxx, Xxxxxxx do Xxxxx Xxxxxxxx and Xxxxxxx
Xxxxxxxxx xx Xxxxxxxx Filho in respect of RPM and shall
procure that such directors transfer the one common
registered share legally (but not beneficially) held in
the capital of RPM by each of them to such person or
persons as the Purchaser may direct;
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(c) transfer to the Purchaser (or such company as the Purchaser may
direct) the one share held by Rio Paranoa Participacoes Ltda in
the capital of Xxxxx Xxxxxxx by the registration and annotation
in the books of transfer of shares and registry of shares of
Xxxxx Xxxxxxx;
(d) ensure that the minute books, statutory books and registers,
books of account, copies of taxation returns and other documents
and papers of the Company, the Subsidiaries and RPM other than:
(i) any exploration or geological reports which do not
relate directly to the Mining Concessions or the Project
Area; and
(ii) documents generated principally for the corporate
purposes of the Vendors or any other member of the Rio
Tinto Group (other than the Company, the Subsidiaries
and RPM),
are located at the premises of RPM, subject to Clause 7.4;
(e) deliver a copy of or extracts from the minutes of meetings of
the directors of the Vendors and RTEH authorizing the Vendors
and RTEH, respectively, to enter into and perform their
obligations under this Agreement, certified to be true and
complete copies or extracts by a director or the Secretary of
the Vendors or RTEH as appropriate;
(f) deliver any power of attorney or other authority under which
this Agreement or any document referred to in it is executed on
behalf of the Vendors or RTEH;
(g) deliver to the Purchaser:
(i) the Termination Agreements, duly executed by MOEM and
RPM;
(ii) a Notes Transfer Agreement for each of the RTEH Notes
and the Notes Side Agreement, duly executed by RTEH,
together with a certificate of incumbency in respect of
RTEH in the form required by BankBoston; and
(iii) evidence of the termination of the powers of attorney
set out in Schedule 6;
(iv) the novation deed in relation to the Pre-export Purchase
Agreement executed by Rio Tinto Resources Limited and
RPM in the form of Agreed Draft "C" (with such
amendments or in such other form as may be agreed
between RTEH, Kinross and WestLB); and
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(h) deliver a copy of the minutes of meetings of the
directors of the Company authorizing and approving the
transfer of the Shares to the Purchaser.
5.4 PURCHASER'S OBLIGATIONS
At Completion the Purchaser, Caymanco and Kinross shall deliver or shall
procure the delivery to the Vendors of:
(a) a copy of or extracts from the minutes of meetings of the
directors of the Purchaser, Kinross and Caymanco authorising the
Purchaser, Kinross and Caymanco, respectively, to enter into and
perform their obligations under this Agreement, certified to be
true and complete copies or extracts by a director or the
secretary of the Purchaser or Kinross or Caymanco as
appropriate;
(b) any power of attorney or other authority under which this
Agreement or any document referred to in it is executed on
behalf of the Purchaser, Caymanco or Kinross;
(c) (i) the Termination Agreements, duly executed by the
Purchaser;
(ii) the Notes Side Agreement, duly executed by Caymanco and
BankBoston, together with a certified copy of a
certificate of incumbency in respect of Caymanco in the
form required by BankBoston;
(iii) the novation deed in relation to the Pre-export Purchase
Agreement duly executed by Kinross and WestLB in the
form of Agreed Draft "C" (with such amendments or in
such other form as may be agreed between RTEH, Kinross
and WestLB).
5.5 CONDITIONS OF COMPLETION
Completion is conditional on the Purchaser, Caymanco, Kinross and the
Vendors complying with all of their respective obligations under this
Clause 5. If any of the Purchaser, Kinross, Caymanco or the Vendors
fails to comply fully with its obligations under this Clause 5 and the
parties in consequence do not complete this Agreement then this
Agreement shall be deemed to be rescinded and:
(a) each party must return to the other all documents delivered to
it under this Clause 5;
(b) each party must repay to the other all payments received by it
under this Clause 5 but excluding any interest accrued thereon;
and
(c) each party must do everything reasonably required by the other
party to reverse any action taken under this Clause 5,
without prejudice to any other rights any party may have in respect of
that failure and the provisions of Clause 4.6 shall apply.
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5.6 NO RIGHT TO TERMINATE OR RESCIND
(a) Subject to Clauses 4.6 and 5.5, the Purchaser, Caymanco and
Kinross shall have no right (including any right under common
law or any right in respect of any Claims other than in the case
of fraud) to delay or defer Completion or to rescind or
terminate this Agreement and shall not be entitled to treat any
of the Vendors and/or RTEH as having repudiated this Agreement.
The sole remedy of the Purchaser, Caymanco and Kinross in
relation to any delay or failure in Completion on the part of
the Vendors or RTEH (other than in the case of fraud) shall be
in damages and the Purchaser, Caymanco and Kinross hereby
expressly and unconditionally waive all other rights and
remedies (whether statutory, at common law, in equity or
otherwise).
(b) Subject to Clauses 4.6 and 5.5, the Vendors shall have no right
(other than in the case of fraud) to delay or defer Completion
or to rescind or terminate this Agreement and shall not be
entitled to treat any of Kinross, Caymanco or the Purchaser as
having repudiated this Agreement. The sole remedy of the Vendors
in relation to any delay or failure in Completion on the part of
the Purchaser, Caymanco and Kinross (other than in the case of
fraud) shall be in damages and the Vendors hereby expressly and
unconditionally waive all other rights and remedies (whether
statutory, at common law, in equity or otherwise).
6. OBLIGATIONS OF VENDORS AND PURCHASER BETWEEN THE DATE OF THIS AGREEMENT
UNTIL AND INCLUDING COMPLETION
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6.1 BUSINESS OF THE GROUP
Between the date of this Agreement and until and including the
Completion Date, the Vendors (to the extent they are lawfully able) must
use their good faith reasonable endeavours to procure that:
(a) the business of the Company and the Subsidiaries is conducted in
the ordinary course of business;
(b) each of the Company and the Subsidiaries does not, without the
prior written consent of the Purchaser (which consent may not be
withheld or delayed unreasonably) enter into any contract or
commitment;
(c) each of the Company and the Subsidiaries does not:
(i) allot or issue or agree to allot or issue any share or
option or any security convertible into any share or
option;
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(ii) declare, make or pay any dividend or other distribution
to shareholders;
(iii) alter or agree to alter its constitutional documents
without the consent of the Purchaser, such consent not
to be unreasonably withheld or delayed;
(iv) pass any special resolution;
(v) commit or omit to do any act that may cause any of the
Warranties to be untrue at Completion;
(vi) hire any employees; or
(vii) create Security Interests on any of their assets.
6.2 REPAYMENT OF PRE-EXPORT FINANCING
The Purchaser acknowledges and agrees that prior to 31 December 2004 the
amounts due to WestLB under the terms of a pre-export financing
agreement dated 28 June 2002 shall be repaid in full by RPM in
accordance with its terms and the parties agree that RPM will enter into
a termination agreement with Rio Tinto Resources Limited in relation to
the related purchase and sale contract for gold bars between Rio Tinto
Resources Limited and RPM dated 18 July 2000 (as amended on 28 June
2002) in the form of Agreed Draft "F" after repayment of the amounts
outstanding under the pre-export financing agreement to WestLB.
6.3 IT IMPLEMENTATION
The Purchaser acknowledges that steps will be taken in the period prior
to Completion to enable RPM's information technology and other
telecommunications systems to operate on a "stand - alone" basis without
any dependence upon the systems of the Rio Tinto Group prior to or with
effect from Completion, subject to Clause 7.3 below.
7. SEPARATION
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7.1 EMPLOYEES
(a) The Purchaser acknowledges and agrees that, save as provided in
paragraph (c) below, all RPM employees as at the date of this
Agreement will remain in the employment of RPM at the Completion
Date, including all employees engaged by RPM pursuant to Clause
6.7 of the Operation and Management Agreement. It is understood
and agreed that such acknowledgement and agreement does not
constitute an agreement to indefinitely retain all of such RPM
employees. The Purchaser agrees to indemnify the Vendors and its
Affiliates against any claim, loss, liability, cost or expense
which they may incur or sustain arising from any breach of
employment contract, dismissal (whether unfair or otherwise) or
termination of employment by way of redundancy of any RPM
employee after
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Completion, including (without limitation) any claims arising
from the planned redundancies of any person but excluding always
any claims made by any RPM employee against RPM relating to the
benefit provided to such RPM employee under the Rio Tinto share
savings scheme (other than the direct compensation paid to such
employees referred to in paragraph (d) below).
(b) Without prejudice to the indemnity set out in paragraph (a)
above, the Vendors agree to reimburse RPM for (i) the costs of
making the RPM employees listed in Part II of Schedule 4
redundant with effect on or before 28 February 2005 (in respect
of each such RPM employee being only the costs required to be
paid by RPM to such RPM employee under relevant Brazilian Laws
directly as a result of such redundancy and a bonus equivalent
to five months' salary for such RPM employee, but not any cost,
liability claim, loss or expense which RPM may incur as a result
of an employment tribunal claim being made against RPM by such
RPM employee in connection with his/her redundancy) and (ii) the
payment to each of the RPM employees listed in Part III of
Schedule 4 of a bonus equivalent to five months' salary for such
RPM employee, within 20 Business Days of receipt of an invoice
by the Vendors setting out the amounts actually paid by RPM to
such RPM employees and any other details as the Vendors think
fit, unless the Vendors or one of their Affiliates elects to
make such payments directly to the relevant RPM employees (to
the extent it is lawfully able). The Purchaser agrees to procure
that RPM will make the payments referred to in sub-paragraphs
(i) and (ii) of this paragraph (b) on or before 28 February
2005, unless the Vendors or one of their Affiliates elects to
make such payments directly to the relevant RPM employees.
(c) The Purchaser acknowledges and agrees that the employment by RPM
of the persons set out in Part I of Schedule 4 has been
transferred to Rio Tinto Brasil Ltda or one of its Affiliates.
(d) The Purchaser acknowledges that, under the rules of the Rio
Tinto share savings scheme, employees of RPM who at Completion
are participants in such scheme will, following Completion,
cease to be entitled to continue to participate in such scheme.
Without prejudice to the limitation on the liability of the
Purchaser under the indemnity set out in paragraph (a) above in
relation to the Rio Tinto share savings scheme, the Purchaser
shall, and shall procure that RPM shall, co-operate with Rio
Tinto plc in relation to any proposals which Rio Tinto plc may
wish to make to such employees of RPM and do all things and
execute all documents which the Vendors may reasonably require
on behalf of Rio Tinto plc to implement any such proposals and
generally in relation thereto. It is agreed that the Purchaser
shall bear 49% and the Vendors shall bear 51% of the aggregate
amount agreed between each of such employees of RPM and the Rio
Tinto Group to be direct compensation for the cessation of their
participation in the Rio Tinto share savings scheme.
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7.2 PENSIONS
It is acknowledged and agreed that prior to Completion the contract
between AIG Unibanco and (inter alia) RPM relating to the provision of
pensions for RPM employees shall be terminated as regards RPM only and
that RPM shall enter into a new contract with AIG Unibanco on the same
terms and subject to the same rules. At Completion, the representatives
of such pension scheme appointed by the Rio Tinto Group shall resign and
the Purchaser shall nominate and appoint such persons as it thinks fit
to act as representatives and shall use all reasonable endeavours to
procure that all necessary documents are executed to effect the same.
The Purchaser agrees that contributions made by RPM after Completion to
the pension scheme under the new contract with AIG Unibanco as referred
to above for each RPM employee shall be no less than the contributions
made by RPM (or on its behalf) to the pension scheme for such RPM
employees immediately prior to Completion.
7.3 GROUP SERVICES
The Purchaser acknowledges and agrees that, with effect from Completion
(and save as otherwise provided herein), the Company, the Subsidiaries
and RPM shall cease to have the benefit of any services provided by the
Rio Tinto Group, including (without limitation) the following:
(a) insurance policies which cover the Company, the Subsidiaries and
RPM on a Rio Tinto Group basis, including health insurance in
respect of all RPM employees as at the Completion Date;
(b) purchasing and other similar arrangements entitling the Company,
the Subsidiaries and RPM to various benefits or rights in
relation to the purchase of goods or services;
(c) human resources, training or accounting support provided to the
Company, the Subsidiaries and RPM by any other member of the Rio
Tinto Group;
(d) information technology and other telecommunications systems
(including access to the Rio Tinto Group intranet and internet,
accounting or other operational software and systems and
satellite communications provided by the Rio Tinto Group to the
Company, the Subsidiaries and/or RPM or which link the Company,
the Subsidiaries and/or RPM to the Rio Tinto Group or any member
thereof).
7.4 ACCESS TO INFORMATION
The Vendors will procure that all information which relates exclusively
to the business and operations of the Company, the Subsidiaries and RPM
is transferred to the Purchaser as soon as reasonably practicable after
the Completion Date but no later than 31 March 2005. The Vendors will
procure that the Purchaser and any persons authorised by it shall be
given reasonable access within normal business hours (i) to the
information which
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relates exclusively to the business and operations of the Company, the
Subsidiaries and RPM during the period in which it is within the control
of the Vendors or its Affiliates and (ii) to the information which does
not relate exclusively to the Company, the Subsidiaries and RPM at any
time after Completion.
8. ACKNOWLEDGEMENTS AND UNDERTAKINGS BY PURCHASER
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8.1 GEOLOGICAL RIGHTS
For the avoidance of doubt, each of the Purchaser and Kinross
acknowledges that nothing in this Agreement will prevent any member of
the Rio Tinto Group, whether alone or with other parties, from
undertaking exploration, mining or other activities in areas other than
the Project Area.
The Vendors agree (for themselves and on behalf of their Affiliates)
that they shall not exploit commercially in Brazil any information
obtained by them during their ownership (directly or indirectly) of RPM
which relates specifically to RPM or its operations other than:
(a) any information or knowledge used or applied by any member of
the Rio Tinto Group for its own business and operations prior to
the date of this Agreement;
(b) information and knowledge generated originally by the Rio Tinto
Group and applied by it in relation to RPM, its business,
affairs and operations during its ownership of RPM; and
(c) information in the public domain.
8.2 DEBT
Caymanco acknowledges that:
(a) it shall be liable for any sum sufficient to cover any tax or
governmental charge which may be imposed in connection with any
exchange, registration of transfer or transfer of the RTEH Notes
which RPM may require to be paid pursuant to Clause 3 of the
private placement and agency agreements between BankBoston N.A.
(or its predecessor or successor entities) and RPM dated 12 July
1996 and 13 May 1999; and
(b) tranche 2 of the RTEH Notes are overdue for repayment in respect
of principal and interest thereon as at the date of this
Agreement and that neither Vendors nor RTEH nor any of their
Affiliates shall be deemed to have given any representation or
warranty that any of the RTEH Notes shall be paid or repaid (as
to principal and interest) when due; and
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(c) neither the Vendors nor RTEH are responsible for the delivery to
BankBoston N.A. (or its predecessor or successor entities) of
the Notes Transfer Agreement for each of the RTEH Notes or the
Notes Side Agreement or the certificates of incumbency in
respect of Caymanco and RTEH in the form required by BankBoston
in order to complete the transfer of the RTEH Notes or the
registration of such transfer.
Caymanco agrees that after delivery of the Notes Transfer Agreement and
the Notes Side Agreement to Caymanco and the certificate of incumbency
in respect of RTEH in the form required by BankBoston pursuant to Clause
5.3(g)(ii), the Vendors, RTEH and their Affiliates shall not be liable
for any act or omission of Caymanco in relation to the RTEH Notes.
8.3 SUBMISSION TO THE BRAZILIAN ANTI-TRUST AUTHORITIES
Kinross and the Purchaser agree to submit or procure the submission of
this Agreement and all other relevant information and documents to the
relevant Brazilian anti-trust regulatory bodies (the REGULATORS) within
15 Business Days (in Brazil only) of the date of this Agreement, as and
to the extent required by Brazilian law, and to bear all costs and
expenses arising from such submission (if any) (other than the costs and
expenses for personnel time and professional advice for each of the
parties in complying with their obligations under paragraphs (a) to (c)
below). Kinross and the Purchaser shall have the responsibility for
contacting and corresponding with the Regulators in relation to this
Agreement and seeking their approval to its terms but each of the
parties agrees to:
(a) consult with each other and its relevant Affiliates at all
times;
(b) promptly provide to the others and their relevant Affiliates
and/or respective professional advisers such information and
assistance as each party or its Affiliates and/or professional
advisers may reasonably request in connection therewith and the
progress therewith, it being understood and agreed that the
Vendors shall be responsible for providing information and
presenting documents with respect to the Vendors' business and
group-related matters; and
(c) provide to the Regulators such information as they may
reasonably request in relation thereto.
The Purchaser agrees to indemnify the Vendors and their Affiliates
against any claim, loss, liability, cost or expense which may be
incurred by them in relation to the late filing or non-filing of any
information required to be filed with the Regulators except to the
extent that such late filing has been occasioned by reason of the breach
by the Vendors with respect to items (b) and (c) above.
Clause 11.3 shall apply (without limiting its generality) in respect of
any decision by the Regulators to set aside or nullify in any way the
transactions described in this Agreement or the agreements referred to
herein.
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9. WARRANTIES AND INDEMNITIES BY VENDORS
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9.1 WARRANTIES
The Vendors warrant solely to the Purchaser and Caymanco in the terms of
the Warranties (other than the warranties set out in paragraphs 1 (in
respect of RTEH only) and 3 of Schedule 2) and RTEH warrants solely to
the Purchaser and Caymanco in the terms of the warranties set out in
paragraphs 1 and 3 of Schedule 2 for itself only (in each case subject
to this Agreement, the provisions of this Clause 9 and to any matter
disclosed in the Disclosure Materials and any matter disclosed or
referred to in this Agreement).
9.2 KNOWLEDGE AND AWARENESS AS TO CERTAIN WARRANTIES
Where any of the Warranties is qualified by the expression "so far as
the Vendors are aware" or any similar expression, that Warranty is
deemed to include an additional statement that for this purpose the
Vendors have made due enquiries of Xxxxx Xxxxxxxx, Xxxxxx Xxxxxxx Filho
of Xxxxxxxx Nero, Xxxx Xxxxx Xxxx Filho of PriceWaterhouseCoopers in
respect of Warranty 7 only, Xxxxxxx Xxxxxxxx of PriceWaterhouseCoopers
in respect of Warranty 6 only and Xxxx Xxxxxxx xx Xxxxxx of Itecon
Instituto Tecnico de Consultoria e Auditoria S/C in respect of Warranty
6 and Warranty 7 only.
9.3 EFFECTIVE DATES
Each of the Warranties:
(a) remains in full force and effect after the Completion Date
despite Completion; and
(b) is given only as at the date of this Agreement.
9.4 EXCLUSIONS OF ENVIRONMENTAL CLAIMS
Each of the Purchaser, Caymanco and Kinross waives (for themselves and
on behalf of each of their Affiliates) forever any and all claims
regarding or relating to the Environment or arising from Environmental
Law (including but not limited to any claim or liability related to
effects on any real property as a result of mining activities) against
the Vendors and its Affiliates related to the Project, any property,
real estate or operations owned or conducted or other affairs or
business conducted by the Company, the Subsidiaries or RPM. The
Purchaser, Caymanco and Kinross will indemnify and hold the Vendors
(each for itself and as trustee for its Affiliates) harmless if any
claim or similar matter should arise from any state authority or other
third party at any time and in relation to any period relating to the
Environment or arising under any Environmental Law.
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9.5 [Information omitted]
9.6 MONETARY AND OTHER LIMITATIONS
Notwithstanding any other provision of this Agreement:
(a) the Vendors and RTEH shall not be liable for any Claim (whether
by way of damages or otherwise) unless such Claim is made in
writing to the Vendors and RTEH by the Purchaser or Caymanco
with respect to it (setting forth in reasonable detail the
nature of the Claim and the damages sought to the extent the
amount can reasonably be determined) on or before (i) the date
being two years after the date of this Agreement in respect of
Warranty 2.1, (ii) the date being six years after the date of
this Agreement in respect of claims [information omitted].
(b) any Claim [information omitted] shall (if it has not
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been previously satisfied, settled or withdrawn) be deemed to be
withdrawn and shall be unenforceable against the Vendors and
RTEH six months after the service of notice of the Claim on the
Vendors and RTEH unless legal proceedings in respect of it (i)
have been commenced by being both issued and served and (ii) are
being pursued with reasonable diligence and no new Claim may be
made in respect of the facts giving rise to such Claim;
(c) the Vendors and RTEH shall have no liability in respect of any
Claim [information omitted].
(d) the aggregate amount of the liability of the Vendors and RTEH
(whether by way of damages or otherwise) in respect of the
aggregate of all Claims [information omitted].
(e) [Information omitted].
(f) the Vendors and RTEH shall not be liable to make any payment to
the Purchaser or Caymanco in respect of any liability which is
contingent unless and until such contingent liability becomes an
actual liability and is due and payable but this paragraph (f)
shall not operate to avoid a Claim made in respect of a
contingent liability within the time limits and containing such
details as are specified in paragraph (a) above and such a Claim
shall (if it has not been previously satisfied, settled or
withdrawn) be deemed to be withdrawn and shall be unenforceable
against the Vendors and RTEH six months after such Claim ceases
to be contingent and no new Claim may be made in respect of the
facts giving rise to such Claim;
(g) the Vendors and RTEH shall not be liable in respect of any Claim
to the extent that:
(i) specific provision or reserve is made for the matter
giving rise to the Claim in any of the Financial
Accounts or the Completion Accounts; or
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(ii) any sum is received by the Company or the Subsidiaries
which has previously been written off as irrecoverable
in the accounts of the Company or the Subsidiaries;
(h) the Vendors and RTEH shall not be liable in respect of any Claim
to the extent that the Claim would not have arisen but for:
(i) any voluntary act, omission or transaction of the
Purchaser, Caymanco or any Affiliate of them or the
Company or the Subsidiaries or RPM or their respective
directors, employees or agents or successors in title,
after Completion;
(ii) any act, omission or transaction occurring before
Completion at the request, direction of or with the
consent of the Purchaser, Caymanco, their Affiliates or
their respective servants and agents;
(iii) any act, omission or transaction in relation to or in
connection with RPM, its affairs, business, operations
and tax planning arrangements;
(iv) the passing of, or any change in, after the date of this
Agreement, any law, rule, regulation or administrative
practice of any government, governmental department,
agency or regulatory body including (without prejudice
to the generality of the foregoing) any increase in the
rates of Tax or any imposition of Tax or any withdrawal
of relief from Tax not actually (or prospectively) in
effect at the date of this Agreement;
(v) any change in accounting or Tax policy, bases or
practice of the Purchaser, Caymanco or any Affiliate of
them or the Company, the Subsidiaries or RPM introduced
or having effect after the date of this Agreement;
(i) the Vendors and RTEH shall have no liability for any Claim to
the extent that any liability, loss, damage, cost, expense or
claim suffered by the Purchaser, Caymanco, the Company or the
Subsidiaries comprised in such Claim is caused or increased by
or is connected with the business, affairs or operations of RPM.
9.7 MITIGATION OF LOSS
The Purchaser and Caymanco shall procure that all reasonable steps are
taken and all reasonable assistance is given to avoid or mitigate any
loss which in the absence of mitigation might give rise to a liability
in respect of any Claim.
9.8 CLAIMS PROCEDURE
If a claim is made by any person which may result in a Claim then:
(a) The Purchaser and Caymanco must immediately give notice of the
claim
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to the Vendors and RTEH;
(b) Without prejudice to the validity of the claim or alleged claim
in question, the Purchaser and Caymanco shall allow, and shall
procure that their Affiliates, the Company, the Subsidiaries and
RPM allow, the Vendors, RTEH and their accountants and
professional advisers to investigate the matter or circumstance
alleged to give rise to such claim and whether and to what
extent any amount is payable in respect of such claim and for
such purpose the Purchaser and Caymanco shall give, and shall
procure that their Affiliates, the Company, the Subsidiaries,
RPM and the current and previous auditors of the Company, the
Subsidiaries and RPM give, subject to their being paid all
reasonable costs and expenses, all such information and
assistance, including access to premises and personnel, and the
right to examine and copy or photograph any assets, accounts,
documents and records (including audit working papers in respect
of any audit of the accounts of the Company and/or the
Subsidiaries and/or RPM relevant to the claim or the potential
claim), as the Vendors, RTEH or their accountants or
professional advisers may reasonably request, provided the
Vendors and RTEH agree to keep all such information confidential
and only to use it for the purpose of the claim in question.
(c) If the Claim in question is a result of or in connection with a
claim by or liability to a third party then:
(i) no admission of liability shall be made by or on behalf
of the Purchaser, Caymanco any of their Affiliates or
the Company or the Subsidiaries or RPM and the claim
shall not be compromised, disposed of or settled without
the consent of the Vendors and RTEH;
(ii) the Vendors and RTEH may cause the Purchaser, Caymanco
or the relevant member of the Group to be put in
sufficient funds to satisfy or pay the claim;
(iii) the Vendors and RTEH shall be entitled at their own
expense in their absolute discretion to take such action
as they shall deem necessary to avoid, dispute, deny,
defend, resist, appeal, compromise or contest such claim
or liability (including, without limitation, making
counterclaims or other claims against third parties) in
the name of and on behalf of the Purchaser, Caymanco,
their relevant Affiliates, the Company, the Subsidiaries
or RPM and to have the conduct of any related
proceedings, negotiations or appeals;
(iv) the Purchaser and Caymanco will give and procure that
their Affiliates, the Company, the Subsidiaries and RPM
and the current and previous auditors of the Company,
the Subsidiaries and RPM give, subject to their being
paid all reasonable costs and expenses, all such
information and assistance, including access to premises
and personnel, and the right to examine and copy or
photograph any assets, accounts, documents and
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records (including audit working papers in respect of
any audit of the accounts of the Company, the
Subsidiaries and RPM relevant to such claim or liability
or potential claim or liability), for the purpose of
avoiding, disputing, denying, defending, resisting,
appealing, compromising or contesting any such claim or
liability as the Vendors, RTEH or their professional
advisers reasonably request. The Vendors and RTEH agree
to keep all such information confidential and only to
use it for the purpose of the claim in question.
9.9 CLAIMS PROCEDURE WITH RESPECT TO TAX MATTERS
Without prejudice to Clause 9.8, the Purchaser agrees (for itself and on
behalf of its Affiliates) with the Vendors that in respect of any and
all returns, assessments, correspondence and other written
communications made by the Purchaser or any member of the Group to the
Brazilian tax authorities:
(a) it will seek the Vendors' prior written consent to the content
of such documentation;
(b) it will take into account all comments made by the Vendors on
the content of such documentation; and
(c) it will not submit any such documentation to the Brazilian tax
authorities without taking into account in full all comments
made by the Vendors pursuant to paragraph (b) and without the
prior written consent of the Vendors pursuant to paragraph (a),
[Information omitted]. Each of the Vendors and the Purchaser (for itself
and on behalf of its Affiliates) agrees that its obligations under this
Clause 9.9 shall be performed in a timely way so as to provide the other
party sufficient time to comply with its obligations and/or exercise its
rights and powers under this Clause 9.9 and under relevant Laws.
The Purchaser and Caymanco will and will procure that the Company, the
Subsidiaries and RPM as far as practicable adopt positions in respect of
Tax after Completion which are consistent in form and substance with the
position taken in determining the provision for Tax in the Financial
Accounts.
9.10 NOTIFICATION
If the Purchaser or Caymanco becomes aware of a Claim or potential Claim
the Purchaser or Caymanco may have against the Vendors or RTEH the
Purchaser and Caymanco must give notice of such Claim to the Vendors and
RTEH within 14 days after becoming so aware.
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9.11 RELIANCE ON OWN JUDGMENT
Each of the Purchaser and Caymanco acknowledges and agrees that:
(a) (i) it has knowledge and experience in financial and
business matters and mineral exploration, mining,
processing and marketing and it is capable of evaluating
the merits and risks associated with the purchase of the
Shares and it is aware of the actual and potential risks
that are generally known within the gold industry or the
Brazilian mining industry and has relied on its own
judgment and evaluation of the Disclosure Material and
on its own inspection and appraisal of RPM;
(ii) it has limited knowledge and experience of the business
and affairs of RPM and that the Vendors and RTEH shall
have no liability whatsoever under this Agreement or
otherwise in relation to or in connection with RPM to
the Purchaser, Caymanco or their Affiliates (including
with respect to the RTEH Notes) save in relation to the
Vendors in respect of Warranty 2.1 or in relation to
RTEH in respect of Warranty 3;
(iii) it has not relied on any conduct of, or statements,
warranties or representations (not forming part of the
Warranties) made to the Purchaser or to any other person
by or on behalf of the Vendors or any other member of
the Rio Tinto Group or any person acting on behalf of
any of them, including any officer, director, employee,
agent or adviser of any of them;
(iv) it has not relied on any opinion, prediction,
projection, forecast or any other information or
document of that nature concerning the past, present or
future performance or prospects of the Company, the
Subsidiaries, RPM or the Project even if that material
is contained in the Disclosure Material;
(b) (i) it has had adequate opportunity:
(A) to examine the Disclosure Material;
(B) to seek such independent advice as it considered
necessary; and
(C) to make inquiries of the Vendors, RTEH, their
Affiliates, the Company, the Subsidiaries and
their representatives;
(ii) it has had satisfactory access to information, including
the Disclosure Materials, in connection with its
purchase of the Shares and the assignment of the RTEH
Notes; and
(iii) neither the Vendors nor RTEH nor any other member of the
Rio Tinto Group nor
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any person acting on behalf of them including any
officer, director, employee, agent or adviser of any of
them has given any representation or warranty as to the
past, present or future performance or prospects of the
Company, the Subsidiaries, RPM or the Project or any
other matter on which it relies.
9.12 NO LIABILITY TO THIRD PARTIES
No person other than the Purchaser or Caymanco is entitled to make any
Claim.
9.13 NO DOUBLE RECOVERY
The Purchaser and Caymanco agrees that they shall not be entitled to
recover damages or obtain payment, reimbursement, restitution or
indemnity more than once in respect of any one shortfall, damage,
deficiency, breach or other set of circumstances which give rise to one
or more Claims. For this purpose recovery by the Company, the
Subsidiaries or RPM shall be deemed to be recovery by the Purchaser and
Caymanco [information omitted].
9.14 INSURANCE
The Vendors and RTEH shall not be liable in respect of a Claim to the
extent that the Claim relates to any loss which is recoverable by the
Purchaser, Caymanco (or any assignees or successor in title thereof),
its Affiliates or the Company, any of the Subsidiaries or RPM from their
insurers or which would have been so recoverable if at all times
following Completion there had been maintained valid and adequate
insurance cover of a type and affording the same degree of cover as that
in force in relation to the Company, the Subsidiaries and RPM at the
date of this Agreement.
9.15 CHANGE OF CONTROL
The Vendors and RTEH shall not be liable for any Claim:
(d) arising from any loss suffered or payment made by the Purchaser,
Caymanco or any member of the Group which would not have been
suffered or made had such company not given warranties and/or
indemnities to any person (other than the Purchaser and
Caymanco) acquiring all or part of the shares in or assets or
undertaking of any member of the Group on or after Completion;
(e) arising from any loss suffered or payment made by any member of
the Group if on the date such Claim was notified to the Vendors
and RTEH pursuant to Clause 9.6(a) such member of the Group was
not a direct or indirect subsidiary of the Purchaser or
Caymanco; or
(f) if on the date such Claim was notified to the Vendors and RTEH
pursuant to
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Clause 9.6(a), the Purchaser or Caymanco had ceased to be a
direct or indirect subsidiary of Kinross.
9.16 INDIRECT AND CONSEQUENTIAL LOSS
The Vendors and RTEH shall not be liable to the Purchaser or Caymanco
for any indirect or consequential loss, loss of profit or punitive
damages as a result of any Claim.
The Purchaser, Kinross and Caymanco shall not be liable to the Vendors
or RTEH for any indirect or consequential loss, loss of profit or
punitive damages as a result of any claim made by the Vendors or RTEH
under any of the indemnities contained in this Agreement or the
documents referred to herein given by the Purchaser, Kinross or
Caymanco.
9.17 WITHDRAWAL AND SETTLEMENT OF CLAIMS
If the Purchaser or Caymanco withdraws or settles a Claim against one
Vendor, the Purchaser and Caymanco shall also withdraw or settle on the
same terms with the other Vendor.
9.18 GENERAL
Clauses 9.6 to 9.17 (inclusive) apply notwithstanding any other
provision of this Agreement to the contrary and shall not cease to have
effect as a consequence of any rescission or termination of any other
provision of this Agreement.
10. CO-OPERATION
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Following Completion, the Purchaser and Caymanco must ensure that the
Purchaser, Caymanco, their Affiliates, the Company, the Subsidiaries and
RPM provide the Vendors all reasonable assistance in relation to any
returns, correspondence and communications with any Tax Authority
involving Tax liabilities of the Vendors or their Affiliates which are
affected by or dependent upon matters concerning the Company, the
Subsidiaries, RPM or the subject matter of this Agreement. The Vendors
must provide all reasonable assistance to the Company, the Subsidiaries
and RPM in relation to any returns, correspondence and communications
with any Tax Authority involving Tax liabilities of the Company, the
Subsidiaries and RPM which are affected by or dependent upon matters
concerning the Vendors or their Affiliates. The party providing
assistance under this Clause 10 will have all reasonable and properly
incurred costs of complying with this Clause 10 reimbursed by the party
being assisted.
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11. WARRANTIES AND INDEMNITIES BY THE PURCHASER
--------------------------------------------------------------------------------
11.1 WARRANTIES
Each of Kinross, the Purchaser and Caymanco warrants to the Vendors and
RTEH that each of the following statements is true and correct in all
material respects.
(a) (STATUS) It is a corporation duly incorporated and validly
existing under the laws of the place of its incorporation
specified in this Agreement.
(b) (POWER) It has the power to enter into and perform its
obligations under this Agreement, to carry out the transactions
contemplated by this Agreement and to carry on its business as
now conducted or contemplated.
(c) (CORPORATE AUTHORISATIONS) It has taken all necessary corporate
action to authorise the entry into and performance of this
Agreement and to carry out the transactions contemplated by this
Agreement.
(d) (DOCUMENTS BINDING) This Agreement is its valid and binding
obligation enforceable in accordance with its terms, subject to
any necessary stamping and registration save and except that the
enforcement hereof may be limited by applicable bankruptcy,
insolvency and other laws of general application affecting the
enforcement of creditors' rights and except that equitable
remedies such as specific performance and injunction are
available only in the discretion of a court of competent
jurisdiction.
(e) (TRANSACTIONS PERMITTED) The execution and performance by it of
this Agreement and each transaction contemplated under this
Agreement do not and will not violate in any respect a provision
of:
(i) a law or treaty or a judgment, ruling, order or decree
of a Governmental Agency binding on it;
(ii) its memorandum or articles of association or other
constituent documents; or
(iii) any other document or agreement which is binding on it
or its assets.
11.2 CESSATION OF ASSOCIATION
The Purchaser must procure that, from Completion, the Company, the
Subsidiaries and RPM cease to hold themselves out as a member of the Rio
Tinto Group or otherwise associated with the Vendors or their Affiliates
and the Purchaser indemnifies the Vendors (each for itself and as
trustee for its Affiliates) against any claim, loss, liability, cost or
expense that may be incurred or sustained by them in connection with a
breach of this Clause 11.2.
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11.3 UNDERTAKING AND INDEMNITY
The Purchaser separately indemnifies the Vendors (each in its own right
and as trustee for its Affiliates) without duplication against any
claim, loss, liability, cost or expense which may be incurred or
sustained by the Vendors or their Affiliates in connection with:
(i) all or any part of any transaction between the Purchaser,
Caymanco, Kinross, the Company, the Subsidiaries or RPM and the
Vendors, RTEH or their Affiliates pursuant to this Agreement or
the agreements referred to herein being set aside or declared
void or voidable or a claim to that effect being upheld,
conceded or compromised;
(ii) the Vendors, RTEH or their Affiliates being required to return
or repay any money or asset received by it under any such
transaction or the equivalent in value of that money or asset.
11.4 NO WITHHOLDINGS
The Purchaser, Caymanco and Kinross must make all payments due under
this Agreement free and clear and without deduction of any taxes,
duties, levies, imposts, deductions, charges and withholdings of Brazil
or any other country or jurisdiction. The Vendors must make any payment
due under Clause 3.3(b) of this Agreement free and clear and without
deduction of any taxes, duties, imposts, deductions, charges and
withholdings of Brazil or any other country or jurisdiction.
[Information omitted] if the Purchaser, Caymanco or Kinross or any of
the Vendors is compelled by law to deduct any such tax, duty, levy,
impost, deduction, charge or withholding, it shall pay to the Vendors or
the Purchaser or Caymanco (as the case may be) such additional amounts
as may be necessary so that the net payment of such amount due under
this Agreement after that deduction is not less than the payment would
have been had there been no deduction.
11.5 NO SET OFF
No party has the right to set off or otherwise deduct or withhold any
money which it is liable to pay to any other party under this Agreement
against any money which such party is or may be liable to pay to it,
whether under this Agreement or otherwise.
11.6 PROTECTION OF DIRECTORS
If any person alleges that any person representing the Vendors or the
Rio Tinto Group has breached the duty he or she owes or owed to the
Company or the Subsidiaries or RPM in his or her capacity as director,
the Purchaser shall procure that all the shareholders of the Company or
the Subsidiaries or RPM in relation to which such breach is alleged,
ratify by way of a unanimous written resolution any act and/or omission
of such director (other than any fraudulent act committed by such
director) which it is alleged constitutes a breach of duty. If the
Purchaser fails to procure such ratification the Purchaser shall
indemnify such director for any loss suffered as a result of the failure
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to procure such ratification, provided always that nothing in this
Clause 11.6 shall affect the ability of the Purchaser or Caymanco to
make a claim under the Warranties in respect of the matter giving rise
to such breach of duty.
12. GUARANTEES
--------------------------------------------------------------------------------
12.1 KINROSS GUARANTEE
In consideration of the Vendors and RTEH agreeing to the obligations and
restrictions set out in this Agreement, Kinross unconditionally and
irrevocably guarantees to the Vendors and RTEH without duplication the
due and punctual discharge by each of the Purchaser and Caymanco and
each of their relevant Affiliates of its obligations of whatever nature
under this Agreement and all agreements referred to herein (which for
the avoidance of doubt shall include its liabilities to pay damages,
agreed or otherwise) and promises to pay on demand each sum (together
with interest on such sum accrued both before and after the date of
demand until the date of payment) which the Purchaser or Caymanco is
liable to pay under this Agreement or the agreements referred to herein.
Kinross's obligations shall be a continuing guarantee. The Vendors and
RTEH may make claims and demands of Kinross without limit of number.
Kinross's obligations shall be in addition to and not in substitution
for, and shall not be prejudiced by, any rights which any member of the
Rio Tinto Group may have pursuant to any other agreement or security
which such person may enter into or obtain and such member of the Rio
Tinto Group may enforce its rights against Kinross without first having
recourse to any such rights or security.
Kinross shall indemnify each of the Vendors and RTEH without duplication
against all losses, claims, costs, charges and expenses to which it may
be subject or which it may incur whilst acting in good faith under this
Agreement and all agreements referred to herein as a result of any
default by the Purchaser or Caymanco or any of their relevant Affiliates
in performing any obligations under this Agreement or any agreement
referred to herein.
Kinross's liability to the Vendors and RTEH shall be as primary obligor
and not merely as surety and shall not be discharged, impaired or
affected by reason of:
(a) any time or indulgence which any of the Vendors or RTEH shall
grant to the Purchaser or Caymanco or any of their relevant
Affiliates;
(b) any legal limitation, disability or incapacity or other
circumstances relating to the Purchaser or Caymanco or any of
their relevant Affiliates, or to any amendment or variation of
any of the terms of this Agreement or any agreement referred to
herein;
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(c) any defect in the obligations of the Purchaser or Caymanco or
their Affiliates; or
(d) any other matter or circumstance whereby but for this provision
Kinross would or might be discharged from liability under this
guarantee.
12.2 RTEH GUARANTEE
In consideration of the Purchaser and Caymanco agreeing to the
obligations and restrictions set out in this Agreement, RTEH
unconditionally and irrevocably guarantees to the Purchaser and Caymanco
without duplication the due and punctual payment by the Vendors (i) for
any breach of Warranty given by the Vendors under this Agreement and all
agreements referred to herein (where the same is settled by the Vendors
or finally determined by a competent court to which there is no appeal
or where the Vendors elect not to appeal), (ii) [information omitted]
(iii) of any amount due by the Vendors under Clause 3.3(b) (together the
OBLIGATIONS).
RTEH's obligations pursuant to this Clause shall be a continuing
guarantee. The Purchaser and Caymanco may make claims and demands of
RTEH without limit of number, subject to the terms of this Agreement.
RTEH's obligations pursuant to this Clause shall be in addition to and
not in substitution for, and shall not be prejudiced by, any rights
which the Purchaser or Caymanco may have pursuant to any other agreement
or security which such person may enter into or obtain and the Purchaser
and Caymanco may enforce its rights against RTEH without first having
recourse to any such rights or security.
RTEH shall indemnify each of the Purchaser and Caymanco without
duplication against all losses, claims, costs, charges and expenses to
which it may be subject or which it may incur whilst acting in good
faith under this Agreement and all agreements referred to herein as a
result of any default by the Vendors in performing the Obligations.
RTEH's liability to the Purchaser or Caymanco pursuant to this Clause
shall be as primary obligor and not merely as surety and shall not be
discharged, impaired or affected by reason of:
(a) any time or indulgence which the Purchaser or Caymanco shall
grant to the Vendors or any member of the Rio Tinto Group;
(b) any legal limitation, disability or incapacity or other
circumstances relating to the Vendors or to any amendment or
variation of any of the terms of this Agreement and all
agreements referred to herein;
(c) any defect in the obligations of the Vendors; or
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(d) any other matter or circumstance whereby but for this provision
RTEH would or might be discharged from liability under this
guarantee.
13. GROUP SUPPORT AND CESSATION OF INTERESTS
--------------------------------------------------------------------------------
13.1 GROUP SUPPORT
Each of the Purchaser and Caymanco agrees that, from Completion, it will
be responsible for any security bonds or similar arrangements and any
guarantees, letters of comfort or other support (financial or otherwise)
provided by the Vendors or any other member of the Rio Tinto Group in
respect of any liability of the Company, the Subsidiaries and RPM (GROUP
SUPPORT) and agrees to (i) obtain a full release and discharge of any
Group Support with effect from Completion which has been notified and
disclosed to the Purchaser or Caymanco or their agents prior to the date
of this Agreement and (ii) use their best endeavours to obtain a full
release and discharge with effect from Completion of any other Group
Support notified by the Vendors to the Purchaser after Completion as
soon as practicable after the date of notification. Until such Group
Support is fully discharged and released, the Purchaser agrees to
indemnify the Vendors (each in their own right and as trustee for each
relevant member of the Rio Tinto Group) in respect of any claim, cost,
expense or liability incurred in respect of any Group Support and must
provide whatever substitute support is required to effect the necessary
discharge or withdrawal.
13.2 Without prejudice to the generality of Clause 13.1, the Purchaser,
Caymanco and the Vendors agree that, with effect from Completion, the
Vendors and its Affiliates shall cease to have any interest in the Group
and its operations and businesses. Accordingly, each of the Purchaser,
Caymanco and the Vendors agree to do all things as may be necessary
(whether before or after Completion) to ensure that such interests cease
(including the assignment and novation of the Pre-export Purchase
Agreement and other contracts not in the ordinary course of business of
the Group to which any member of the Rio Tinto Group may be a party).
14. ANNOUNCEMENTS AND CONFIDENTIALITY
--------------------------------------------------------------------------------
14.1
(a) Subject to Clause 14.3, each of the parties undertakes to keep
confidential all terms of this Agreement and the negotiations
relating to this Agreement (and such other agreements); and
(b) each of the Purchaser, Caymanco and Kinross undertakes to the
Vendors to keep confidential and not disclose or use (A) prior
to the Completion Date any information concerning the business
or the financial or other affairs of the Company, the
Subsidiaries or RPM (including future plans and targets) and (B)
after the Completion Date, any information concerning the
business or the financial or other affairs of the Vendors and
their Affiliates; and
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will not disclose such information or matters to any person
except:
(i) where required by applicable law;
(ii) where required by any recognised stock exchange on which
any party's shares or the shares of any of its
Affiliates are listed (but which is required in the
ordinary course of events and not, for example, as a
consequence of any public offering of debt, shares or
other securities of a party or its Affiliates) or to the
extent of the information contained in the announcements
referred to in Clause 14.3;
(iii) to such of its officers and professional advisers and
those of its Affiliates as may be necessary for ordinary
business purposes, provided that the parties shall use
their best endeavours to ensure all matters disclosed
are kept confidential; or
(iv) with the prior written consent of the other parties
which shall not be unreasonably withheld or delayed; or
(v) to the extent permitted under the Shareholders'
Agreement.
14.2 If Completion does not take place, the Purchaser, Caymanco and Kinross
shall and shall procure that their relevant Affiliates shall forthwith:
(a) return all written information (including information and data
in electronic form) of or relating to the Vendors, the Company,
the Subsidiaries, RPM or the Project provided to the Purchaser,
Caymanco, their Affiliates or their advisers and agents (the
CONFIDENTIAL INFORMATION), without keeping any copies thereof;
(b) destroy all information, analyses, compilations, notes, studies,
memoranda or other documents derived from, containing or
reflecting Confidential Information and expunge the same from
computer systems to the extent that it is held in electronic
form;
(c) Clauses 14.2(a) and (b) shall not apply to any information
available from public records or information lawfully acquired
by the Purchaser or Caymanco otherwise from the Vendors, the
Company, the Subsidiaries, RPM and their respective employees,
officers or agents (including information they already possessed
prior to the date of this Agreement as a result of Kinross's
indirect shareholding in RPM).
14.3 The parties agree to consult with each other as to the proposed wording
of any public announcement concerning the sale and purchase of the
Shares and the terms of this Agreement and, subject to Clause 14.1(ii),
agree not make and to procure that their respective Affiliates do not
make any public announcement concerning such matters unless the other
parties have consented in writing to the form and content of the
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announcement, such consent not to be unreasonably withheld.
14.4 Each of the parties acknowledges that any breach of this Clause 14 may
cause material damage to the other parties and their Affiliates and
monetary damages may not be a sufficient remedy. Consequently, the
parties have the right, in addition to any other remedies available at
law or in equity, to seek injunctive relief against the other parties,
in respect of any breach of this Clause.
15. COSTS
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(a) Each party must bear its own costs arising out of the
negotiation, preparation and execution of this Agreement.
(b) All stamp duty, registration fees, transfer fees and other
similar duties, fees and taxes (including fines, penalties,
interest and fees to the Regulators resulting from the
submission or non-submission pursuant to Clause 8.3) which may
be payable or determined to be payable on or in connection with
this Agreement, the transactions contemplated by this Agreement,
and any other instruments or document executed under this
Agreement or contemplated by it and any amendments or waiver of
or supplement to this Agreement, or any other such instrument or
document must be borne by the Purchaser.
16. MERGER
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The rights and obligations of the parties to this Agreement will not
merge on the completion of any transaction contemplated by this
Agreement. They will survive the execution and delivery of any
assignment or other document entered into for the purpose of
implementing any such transaction.
17. ASSIGNMENT
--------------------------------------------------------------------------------
The rights and obligations of each party under this Agreement are
personal. Such rights and obligations cannot be assigned, encumbered or
otherwise dealt with and no party may attempt, or purport, to do so
without the prior written consent of all other parties to this
Agreement.
18. FURTHER ASSURANCES
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Each party to this Agreement must at its own expense do all such things
and execute all such deeds, instruments, transfers or other documents as
may be reasonably necessary or desirable to give full effect to the
provisions of this Agreement and the transactions contemplated by it,
whether before or after the Completion Date.
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19. ENTIRE AGREEMENT AND REMEDIES
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19.1 This Agreement constitutes the whole agreement between the parties
hereto, and it is accepted that there are no promises, terms, conditions
or obligations expressed or implied other than those expressly set out
in this Agreement or in the agreements referred to herein or attached
hereto. Except as expressly provided herein, no oral explanation or oral
information by any of the parties hereto will alter the meaning or
interpretation of this Agreement. No modification, alteration, addition,
change in or supplement to the terms hereof will be binding on a party
hereto unless executed in writing by all the parties hereto.
19.2 Each of the parties acknowledges that it has not been induced to enter
into this Agreement by any representation, warranty or undertaking not
expressly incorporated into it.
19.3 So far as permitted by law and except in the case of fraud, each party
agrees and acknowledges that its only right and remedy in relation to
any representation, warranty or undertaking made or given in connection
with this Agreement shall be for breach of the terms of this Agreement
to the exclusion of all other rights and remedies (including those in
tort or arising under statute).
19.4 Each party to this Agreement confirms it has received independent legal
advice relating to all the matters provided for in this Agreement,
including the provisions of this Clause, and agrees, having considered
the terms of this Clause and the Agreement as a whole, that the
provisions of this Clause are fair and reasonable.
20. WAIVER
--------------------------------------------------------------------------------
No failure to exercise nor any delay in exercising any right, power or
remedy by a party hereto operates as a waiver. A single or partial
exercise of any right, power or remedy does not preclude any other or
further exercise of that or any other right, power or remedy. A waiver
is not valid or binding on the party granting that waiver unless made in
writing.
21. TIME OF THE ESSENCE
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Time shall be of the essence of this Agreement both as regards any dates
and periods mentioned and as regards any dates and periods which may be
substituted for them in accordance with this Agreement or by agreement
in writing between the parties.
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22. EXCLUSION OF THIRD PARTY RIGHTS UNDER CONTRACTS (RIGHTS OF THIRD
PARTIES) ACT 1999
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No person who is not a party to this Agreement shall have any right
under the Contracts (Rights of Third Parties) Xxx 0000 to enforce any
term of this Agreement.
23. INVALIDITY
--------------------------------------------------------------------------------
If any term in this Agreement shall be held to be illegal, invalid or
unenforceable, in whole or in part, under any enactment or rule of law,
such term or part shall to that extent be deemed not to form part of
this Agreement but the legality, validity or enforceability of the
remainder of this Agreement shall continue in force and shall not be
affected.
24. NOTICES
--------------------------------------------------------------------------------
Any notice, demand, consent or other communication (a NOTICE) given or
made under this Agreement:
(a) must be in writing and signed by a person duly authorised by the
sender;
(b) must either be delivered to the intended recipient by hand or
fax to the address or fax number below or to the address, or fax
number last notified by the intended recipient to the sender in
accordance with this Clause 24:
(i) to the Vendors:
c/o Rio Tinto plc
0 Xx Xxxxx'x Xxxxxx
Xxxxxx, XX0X 0XX
Attention: The Legal Advisor
Fax: x00 (0) 000 000 0000
(ii) to RTEH:
c/o Rio Tinto plc
0 Xx. Xxxxx'x Xxxxxx
Xxxxxx, XX0X 0XX
Attention: The Legal Advisor
Fax: x00 (0) 000 000 0000
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(iii) to the Purchaser:
Xxxxx 0000, Xxxxxx Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx
Xxxxxxx, X0X 0XX
Xxxxxx
Attention: Secretary
Fax: + 0 000 000 0000
(iv) to Caymanco:
Xxxxx 0000, Xxxxxx Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx
Xxxxxxx, X0X 0XX
Xxxxxx
Attention: Secretary
Fax: + 0 000 000 0000
(v) to Kinross:
Xxxxx 0000, Xxxxxx Plaza
00 Xxxx Xxxxxx Xxxx
Xxxxxxx
Xxxxxxx, X0X 0XX
Xxxxxx
Attention: Secretary
Fax: + 0 000 000 0000
(c) will be taken to be duly given or made:
(i) in the case of delivery in person, when delivered during
regular business hours or if delivered outside of
regular business hours, the next business day;
(iii) in the case of fax, on receipt by the sender of a
transmission control report from the despatching machine
showing the relevant number of pages, the correct
destination fax machine number and the result of the
transmission as "OK",
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but if the result is that a Notice would be taken to be
given or made on a day which is not a business day in
the place to which the Notice is sent or is later than
4.00pm (local time) it will be taken to have been duly
given or made at the commencement of business on the
next business day in that place.
25. APPOINTMENT OF PROCESS AGENT
--------------------------------------------------------------------------------
The Purchaser, Caymanco and Kinross each hereby irrevocably appoints HFW
Nominees Limited (for the attention of Xxxxxxxx Xxxx) of Xxxxxx Xxxxx,
Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx (or any successor firm)
as its agent for service of legal process in England. If HFW Nominees
Limited (or any successor firm) ceases to have an address in England,
the Purchaser, Caymanco and Kinross each irrevocably agree to appoint a
new process agent acceptable to the Vendors and RTEH and to deliver to
the Vendors and RTEH within 14 days a copy of a written acceptance of
appointment by such new process agent.
26. GOVERNING LAW AND JURISDICTION
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This Agreement is governed by and interpreted in accordance with the
laws of England and the parties to this Agreement hereby irrevocably
agree to submit to the exclusive jurisdiction of the courts of England.
27. COUNTERPARTS
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This Agreement may be executed in any number of counterparts and by way
of fax transmission, all of such counterparts taken together shall
constitute one and the same instrument.
IN WITNESS whereof this Agreement has been signed on behalf of the parties the
day and year first before written.
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Schedule 1
DETAILS OF VENDORS, SHARES AND CONSIDERATION
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VENDORS' NAMES AND NUMBER OF SHARES NUMBER OF SHARES CASH PAYMENT IN VENDOR
ADDRESSES HELD AT DATE OF TO BE SOLD US$ DOLLARS PROPORTIONS
AGREEMENT
(1) (2) (3) (4) (5)
Rio Tinto Brazilian 765,657,810 765,657,810 249,552,220 100%
Holdings Limited
0 Xx Xxxxx'x
Xxxxxx, Xxxxxx
XX0X 0XX,
Xxxxxx Xxxxxxx
Rio Tinto Brazilian 13 13 0 0%
Investments
Limited
0 Xx Xxxxx'x
Xxxxxx, Xxxxxx
XX0X 0XX,
Xxxxxx Xxxxxxx
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TOTALS 765,657,823 765,657,823 $249,552,220 100%
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Schedule 2
WARRANTIES
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1. CAPACITY OF THE VENDORS
Each of the Vendors and RTEH warrants in respect of itself only that:
1.1 it is a corporation duly incorporated and validly existing under the
laws of the place of its incorporation specified in this Agreement;
1.2 it has the power to enter into and perform its obligations under this
Agreement and to carry out the transactions contemplated by this
Agreement;
1.3 it has taken all necessary corporate action to authorise the entry into
and performance of this Agreement and to carry out the transactions
contemplated by this Agreement; and
1.4 this Agreement is its valid and binding obligation enforceable in
accordance with its terms, subject to any necessary stamping and
registration save and except that the enforcement hereof may be limited
by applicable bankruptcy, insolvency and other laws of general
application affecting the enforcement of creditors' rights and except
that equitable remedies such as specific performance and injunction are
available only in the discretion of a court of competent jurisdiction.
2. TITLE TO THE SHARES
2.1 The Vendors are the legal and beneficial owners of the Shares set out
opposite their respective names in Schedule 1 free from all Security
Interests.
2.2 The Company is the legal and beneficial owner of the entire issued share
capital of each of the Subsidiaries free from all Security Interests
(other than (a) one share in the capital of Xxxxx Xxxxxxx which is
legally and beneficially held by Rio Paranoa Participacoes Ltda free
from all Security Interests and (b) one share in the capital of MOEM
which is legally and beneficially owned by Xxxxx Xxxxxxx free from all
Security Interests).
2.3 MOEM is the legal and beneficial owner of 26,849 shares in the capital
of RPM and is the beneficial owner of 3 shares in the capital of RPM, in
each case, free from all Security Interests.
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3. TITLE TO THE NOTES
RTEH warrants that it is the legal and beneficial owner of the RTEH Notes
free from all Security Interests.
4. STATUS OF THE COMPANY
4.1 The Company is a corporation duly incorporated and validly existing
under the laws of the place of its incorporation specified in this
Agreement.
4.2 So far as the Vendors are aware, the transaction contemplated under this
Agreement does not breach any document or agreement which is binding on
the Company or its assets or any laws which are applicable to it.
5. INSOLVENCY
5.1 As at the date of this Agreement, no resolution has been passed for the
winding up of the Company.
5.2 As at the date of this Agreement no resolution has been passed for the
appointment of an administrator to the Company.
6. ACCOUNTS
(a) The statutory accounts of MOEM for the financial year ended 31
December 2003 show a true and fair view of the state of affairs
of MOEM as at 31 December 2003.
(b) The management accounts of each of the Company and Xxxxx Xxxxxxx
as at 31 October 2004 present fairly, in all material respects,
the financial position of the Company and Xxxxx Xxxxxxx
(respectively) as at 31 October 2004.
7. TAXATION
So far as the Vendors are aware, all Tax which the Company was required
to pay prior to the date of this Agreement has been paid and all returns
which were required to be made by the Company prior to the date of this
Agreement have, so far as the Vendors are aware, been made within the
requisite time periods and on a proper basis.
8. LITIGATION
As at the date of this Agreement, there are no claims or actions in
progress nor, so far as the Vendors are aware, pending or threatened
against the Company.
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9. ASSETS
(a) The assets included in the statutory accounts of MOEM for
financial year ended 31 December 2003 are the property of MOEM
free from any mortgage or charge and are not the subject of any
leasing, hiring or hire-purchase agreement.
(b) The assets included in the management accounts of the Company
and Xxxxx Xxxxxxx in each case as at 31 October 2004 are the
property of the Company and Xxxxx Xxxxxxx (respectively) free
from any mortgage or charge and are not the subject of any
leasing, hiring or hire purchase agreement.
10. LIABILITIES OF THE COMPANY
Save in respect of the items provided for in the management accounts of
the Company as at 31 October 2004, the Company has no liabilities.
11. EMPLOYEES
As at the date of this Agreement, the Company has no employees and no
liabilities in relation to the employment or alleged employment of any
person by the Company.
12. BROKERS FEES
No brokers fees are payable by the Company in connection with the
transactions contemplated in this Agreement.
13. CONSENTS
All (if any) governmental consents required by the Vendors or their
Affiliates in order to implement the shareholding structure set out in
Schedule 5 have been obtained and all (if any) governmental filings
required to be made by the Vendors or its Affilates have been made in
respect of the same.
14. APPLICATION TO THE SUBSIDIARIES
Each of the statements in this Schedule 2 (other than the statements in
paragraphs 1, 2, 3, 6, 9, 10 and 13) would be true and accurate in
relation to each of the Subsidiaries if for references to the Company
there were substituted references to that Subsidiary.
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Schedule 3
WORKING CAPITAL
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PART I
WORKING CAPITAL means, together, 100% of the working capital of the Company and
each of the Subsidiaries and 51% of the working capital of RPM, working capital
in each case being current assets comprising:
o cash;
o bank deposits (held on a restricted and unrestricted basis);
o short-term investments (held on a restricted and unrestricted basis);
o taxes recoverable;
o trade bills receivable;
o ICMS (VAT) recoverable;
o Pis, Cofins and IPI Credits;
o loans (current accounts) owed between RPM and other members of the
Group;
o debtors and prepayments (made up of the following: judicial deposits,
income tax recoverable, insurance premiums deferred, mill maintenance
costs deferred, advances to employees, advances to suppliers, trade
bills, and miscellaneous other items);
o stock and process (made up of the following: ore stockpile, process
concentrate, bullion (unrefined gold) and refined gold);
o tax credits - provisions for loss
less current liabilities comprising:
o creditors and accruals (made up of the following: suppliers, social
contributions, taxes, accrued vacation pay/13th month salary provision,
civil/administrative/labour liabilities and miscellaneous other items);
o taxes payable;
o loans (current accounts) owed between RPM and other members of the
Group;
o debenture remuneration payable;
o principal of short-term loans (owed to both the Vendors or their
Affiliates and the Purchaser or its Affiliates);
o interest payable (owed to both the Vendors or their Affiliates and the
Purchaser or its Affiliates);
o bank loans; and
o deferred income and income and social contribution taxes
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such items as shown in the Completion Accounts.
PREPARATION OF ACCOUNTS, INCLUDING THE COMPLETION ACCOUNTS
The Purchaser shall use all reasonable endeavours to ensure that audited
statutory accounts for the Company, the Subsidiaries and RPM for year ending 31
December 2004 (comprising an audited balance sheet of the Company, an audited
balance sheet of each of the Subsidiaries and an audited balance sheet of RPM,
in each case as at the Completion Date, and an audited profit and loss account
of the Company, an audited profit and loss account of each of the Subsidiaries
and an audited profit and loss account of RPM, in each case in respect of the
period from 1 January 2004 to the Completion Date) are prepared as soon as
practicable after Completion and audited by the Company's Accountants.
The Purchaser shall procure that, at the same time as such audited statutory
accounts are produced, accounts for the Company, each of the Subsidiaries and
RPM (which shall be the audited statutory accounts for such companies (as
referred to above) but with such further adjustments as shall be necessary for
such accounts to be prepared in accordance with the Accounting Policies) are
prepared by the Company's Accountants (the COMPLETION ACCOUNTS).
The Purchaser shall procure that the Company's Accountants deliver (i) to the
Vendors a copy of the Completion Accounts and the statutory accounts for each of
the Company, the Subsidiaries and RPM and (ii) to the Vendors and the Purchaser
a draft statement setting out a calculation of the Working Capital Amount
(WORKING CAPITAL STATEMENT) as soon as practicable but in any event within ten
Business Days after the preparation of the Completion Accounts.
The Working Capital Statement shall be prepared in US dollars. Assets and
liabilities denominated in currencies other than US dollars shall be converted
into US dollars at the mid market closing exchange rate at the Completion Date
as published by Ptax 800 opcao quotacao venda for the Completion Date. The draft
Working Capital Statement shall be prepared on the basis that it relates to the
Company, the Subsidiaries and RPM ignoring the effects of the change in control
or ownership of each of them contemplated by this Agreement or otherwise or any
other effect of this Agreement (including (without limitation) (i) the effects
of any changes in the business of the Company, the Subsidiaries or RPM as
proposed or planned by the Purchaser, [information omitted] RPM on or after the
Completion Date and (ii) the cessation of the Rio Tinto share savings scheme as
regards RPM employees and the bonuses to be paid by RPM to the employees listed
in Part III of Schedule 4 as referred to in Clause 7.1(b)).
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PARTIES TO AGREE THE WORKING CAPITAL AMOUNT
The Vendors and the Purchaser shall endeavour to finalise and agree the Working
Capital Amount within 30 days of receipt by the Vendors of the Completion
Accounts and draft Working Capital Statement and in any event before 28 February
2005.
If no agreement has been reached within such period, the Purchaser's Accountant
and the Vendors' Accountant shall be instructed to prepare a joint draft Working
Capital Statement, based on the Completion Accounts (with such adjustments as
they may agree), as soon as practicable and in any event within 30 days. The
Vendors' Accountant shall be entitled (during normal business hours) to review
all books, records and papers of the Company, the Subsidiaries and RPM which are
relevant for such purposes (including the working papers of the Company's
Accountants) and to discuss with the Company's Accountants, the Company, the
Subsidiaries, RPM and the Purchaser any matters arising therefrom.
FAILURE TO AGREE THE WORKING CAPITAL AMOUNT
In the event of any dispute or disagreement between the Vendors' Accountant and
the Purchaser's Accountant concerning the Working Capital Amount and/or the form
of the Completion Accounts the Vendors may notify the Purchaser or the Purchaser
may notify the Vendors that they want or it wants an independent chartered
accountant from an internationally recognised firm of accountants in the United
Kingdom (being a firm other than the Company's Accountants, the Purchaser's
Accountant and the Vendors' Accountant) to be appointed to settle the subject of
such dispute or disagreement. Such independent chartered accountant shall be a
person or firm agreed between the Purchaser and the Vendors or, in default of
agreement within 10 Business Days of such notification, an independent chartered
accountant to be appointed by the President (or if he is not available the next
most senior available officer) for the time being of the Institute of Chartered
Accountants in England and Wales on the application of either the Vendors or the
Purchaser (the EXPERT ACCOUNTANT).
The Expert Accountant shall settle the matter the subject of such dispute or
disagreement by stating which draft Working Capital Statement put forward by the
Vendors and the Purchaser (or their respective accountants), in its opinion,
most closely resembles the Working Capital Amount and such draft Working Capital
Statement shall comprise the Working Capital Statement for the purposes of this
Agreement.
If there is a referral to the Expert Accountant, the following provisions shall
apply:
(a) the Purchaser (or the Purchaser's Accountant) and the Vendors
(or the Vendors' Accountant) shall each prepare a written
statement on the matters in dispute which, together with any
relevant documents, shall be submitted to the Expert Accountant
and to the other party;
(b) the Expert Accountant shall be entitled:-
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o to stipulate the time periods within which the parties
shall prepare and submit the written statements referred
to in this paragraph (such time period to be at least 14
days) and to disregard any written statement not
delivered to the Expert Accountant within the time
period so stipulated;
o to require the Purchaser and the Vendors and their
respective accountants to attend one or more meetings
and to raise enquiries of them about any matters which
the Expert Accountant considers relevant;
o in the absence of agreement between the parties, to
determine the procedure to be followed in undertaking
the expert determination, insofar as the procedure is
not set out herein; and
o to appoint advisers (including legal advisers) if
required;
(c) the Purchaser and the Vendors shall use all reasonable
endeavours to procure that the Expert Accountant is given all
such assistance and access to documents and other information as
it may reasonably require in order to make its decision; and
(d) the Expert Accountant shall be requested to give its decision on
matters in dispute, with written reasons therefore, within 60
days of the date of its appointment.
CAPACITY AND COSTS
In acting pursuant to this clause, the Vendors' Accountant, the Purchaser's
Accountant and the Expert Accountant (if any) shall be treated as acting as
expert and not as arbitrator and the Working Capital Amount as appearing in any
agreed Working Capital Statement or as finally determined by the Expert
Accountant shall be final and binding on the parties save in the event of any
manifest error in which case such error shall be rectified as soon as
practicable.
The Vendors shall be responsible for the charges of the Vendors' Accountant and
the Purchaser shall be responsible for the charges of the Purchaser's Accountant
and the Company's Accountants under this Schedule. The charges of the Expert
Accountant (if any) shall be borne as it shall direct.
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PART II
ACCOUNTING POLICIES
1. GENERAL
The Completion Accounts shall be prepared on the following basis:
(a) first, reflecting the specific accounting principles, polices, bases,
conventions, rules and estimation techniques and adjustments agreed and
referred to or set out in paragraph 2 below;
(b) secondly, and subject to paragraph (a) above, adopting the same
accounting principles policies treatments and categorisations (i) in
respect of the Completion Accounts for the Company, MOEM and Xxxxx
Xxxxxxx as were used in the preparation of the statutory accounts for
MOEM for financial year ended 31 December 2003 and (ii) in respect of
the Completion Accounts for RPM as were used in the preparation of the
statutory accounts for RPM for financial year ended 31 December 2003, in
each case as there applied including in relation to the exercise of
accounting discretion and judgement; and
(c) thirdly, and subject to paragraphs (a) and (b) above, in accordance with
Brazilian GAAP.
For the avoidance of doubt, paragraph (a) shall take precedence over paragraphs
(b) and (c) and paragraph (b) shall take precedence over paragraph (c).
2. SPECIFIC REQUIREMENTS
(a) There shall be excluded from the current liabilities in the
Completion Accounts relating to RPM the principal amount of all
short term loans provided by the Vendors or their Affiliates or
the Purchaser or its Affiliates (but not for the avoidance of
doubt loans between RPM and any other member of the Group) to
RPM outstanding as at the Completion Date (including the
principal amount of the RTEH Notes and the equivalent notes
issued by RPM to the Purchaser or its Affiliates).
(b) There shall be excluded from the current liabilities in the
Completion Accounts relating to RPM the interest accrued but
unpaid as at Completion on all short term loans provided by the
Vendors or their Affiliates or the Purchaser or its Affiliates
(but not for the avoidance of doubt loans between RPM and any
other member of the Group) to RPM outstanding as at the
Completion Date (including the interest accrued but unpaid as at
Completion on the RTEH Notes and the equivalent notes issued by
RPM to the Purchaser or its Affiliates).
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(c) There shall be excluded from the current liabilities in the
Completion Accounts relating to RPM the interest accrued but
unpaid as at Completion on all debentures provided by RPM and
held by the Purchaser or its Affiliates outstanding as at the
Completion Date.
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Schedule 4
EMPLOYEES
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[Information omitted]
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Schedule 5
CORPORATE STRUCTURE
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[Information omitted]
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Schedule 6
POWERS OF ATTORNEY
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[Information omitted]
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RIO TINTO BRAZILIAN HOLDINGS LIMITED
By: (SIGNED) XXXXX X. XXXXXXX
Name: XXXXX X. XXXXXXX
--------------------------------
Title: DIRECTOR
--------------------------------
RIO TINTO BRAZILIAN INVESTMENTS LIMITED
By: (SIGNED) XXXXX X. XXXXXXX
Name: XXXXX X. XXXXXXX
--------------------------------
Title: DIRECTOR
--------------------------------
RIO TINTO EUROPEAN HOLDINGS LIMITED
By: (SIGNED) X.X. XXXXXXX
Name: X.X. XXXXXXX
--------------------------------
Title: DIRECTOR
--------------------------------
TVX PARTICIPACOES LTDA
By: (SIGNED) XXXX X. XXXXX
Name: XXXX X. XXXXX
--------------------------------
Title: EXECUTED PURSUANT TO
POWER OF ATTORNEY
--------------------------------
AND
By: (SIGNED) XXXXXXX X. XXXXX
Name: XXXXXXX X. XXXXX
--------------------------------
Title: EXECUTED PURSUANT TO
POWER OF ATTORNEY
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CAYMAN PARTICIPACOES INC
By: (SIGNED) XXXX-XXXX XXXXXXXXX
Name: XXXX-XXXX XXXXXXXXX
--------------------------------
Title: VICE PRESIDENT
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AND
By: (SIGNED) XXXXXXX X. XXXXX
Name: XXXXXXX X. XXXXX
--------------------------------
Title: SECRETARY
--------------------------------
KINROSS GOLD CORPORATION
By: (SIGNED) XXXX X. XXXXX
Name: XXXX X. XXXXX
--------------------------------
Title: EXECUTIVE VICE-PRESIDENT
--------------------------------
AND
By: (SIGNED) XXXXXXX X. XXXXX
Name: XXXXXXX X. XXXXX
--------------------------------
Title: SECRETARY
--------------------------------
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Annexure A
MAP OF THE PROJECT AREA
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[TAKEN OUT]
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Annexure B
DUE DILIGENCE DOCUMENTATION
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[Information omitted]
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[Information omitted]
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[Information omitted]
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Annexure C
FINANCIAL STATEMENTS
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[TAKEN OUT]
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