ARRANGEMENT AGREEMENT BETWEEN KINROSS GOLD CORPORATION AND BEMA GOLD CORPORATION
Exhibit
99.1
BETWEEN
KINROSS
GOLD CORPORATION
AND
BEMA
GOLD CORPORATION
December
21, 2006
TABLE
OF CONTENTS
|
Page
|
||||
|
ARTICLE
I
|
DEFINITIONS
AND INTERPRETATION
|
1
|
||
|
1.1
|
Definitions
|
1
|
||
|
1.2
|
Interpretation
Not Affected by Headings
|
10
|
||
|
1.3
|
Number
and Gender
|
10
|
||
|
1.4
|
Date
for Any Action
|
10
|
||
|
1.5
|
Currency
|
10
|
||
|
1.6
|
Accounting
Matters
|
10
|
||
|
1.7
|
Construction
|
10
|
||
|
1.8
|
Statutory
References
|
11
|
||
|
1.9
|
Schedules
|
11
|
||
|
ARTICLE
II
|
THE
ARRANGEMENT
|
11
|
||
|
2.1
|
The
Arrangement
|
11
|
||
|
2.2
|
Court
Proceedings
|
11
|
||
|
2.3
|
Articles
of Arrangement
|
12
|
||
|
2.4
|
Closing
|
12
|
||
|
2.5
|
Preparation
of Filings
|
13 | ||
|
2.6
|
Board
of Directors
|
13
|
||
|
2.7
|
Communications
|
13
|
||
|
2.8
|
U.S.
Tax Treatment
|
14
|
||
|
ARTICLE
III
|
REPRESENTATIONS
AND WARRANTIES OF BEMA
|
14
|
||
|
3.1
|
Representations
and Warranties
|
14
|
||
|
3.2
|
Survival
of Representations and Warranties
|
29
|
||
|
ARTICLE
IV
|
REPRESENTATIONS
AND WARRANTIES OF KINROSS
|
29
|
||
|
4.1
|
Representations
and Warranties
|
29
|
||
|
4.2
|
Survival
of Representations and Warranties
|
39
|
||
-i-
TABLE
OF CONTENTS
(continued)
|
Page
|
||||
|
ARTICLE
V
|
COVENANTS
|
40
|
||
|
5.1
|
Covenants
of Bema
|
40
|
||
|
5.2
|
Covenants
of Kinross
|
50
|
||
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ARTICLE
VI
|
CONDITIONS
|
57
|
||
|
6.1
|
Mutual
Conditions
|
57
|
||
|
6.2
|
Additional
Conditions Precedent to the Obligations of Kinross
|
58
|
||
|
6.3
|
Additional
Conditions Precedent to the Obligations of Bema
|
60
|
||
|
6.4
|
Merger
of Conditions
|
61
|
||
|
6.5
|
Notice
and Cure Provisions
|
61
|
||
|
ARTICLE
VII
|
NON-SOLICITATION
AND TERMINATION FEE
|
62
|
||
|
7.1
|
No
Solicitation
|
62
|
||
|
7.2
|
Superior
Proposals
|
63
|
||
|
7.3
|
Termination
Fee
|
64 | ||
|
ARTICLE
VIII
|
TERMINATION
AND AMENDMENT
|
65
|
||
|
8.1
|
Termination
by the Parties
|
65 | ||
|
8.2
|
Amendment
|
65
|
||
|
ARTICLE
IX
|
GENERAL
PROVISIONS
|
66
|
||
|
9.1
|
Notices
|
66
|
||
|
9.2
|
Costs
|
67
|
||
|
9.3
|
Law
|
68
|
||
|
9.4
|
Remedies
|
68
|
||
|
9.5
|
Amendment
|
68
|
||
|
9.6
|
Assignment
|
68
|
||
|
9.7
|
Time
of the Essence
|
68
|
||
|
9.8
|
Binding
Effect
|
68
|
||
|
9.9
|
Waiver
|
68
|
||
-ii-
TABLE
OF CONTENTS
(continued)
|
Page
|
||||
|
9.10
|
Severability
|
69 | ||
|
9.11
|
Confidentiality
Agreement
|
69
|
||
|
9.12
|
Entire
Agreement
|
69
|
||
|
9.13
|
Third
Party Rights
|
69
|
||
|
9.14
|
No
Personal Liability
|
69
|
||
|
9.15
|
Execution
in Counterparts
|
70
|
||
-iii-
THIS
ARRANGEMENT AGREEMENT
dated
December 21, 2006,
BETWEEN:
KINROSS
GOLD CORPORATION,
a
corporation existing under the laws of the Province of Ontario (“Kinross”)
-
and
-
BEMA
GOLD CORPORATION,
a
corporation existing under the laws of Canada (“Bema”)
WHEREAS
the
Parties have entered into a binding letter agreement dated November 6, 2006
(the
“Letter Agreement”) pursuant to which the Parties agreed to effect a business
combination;
AND
WHEREAS the Parties intend to carry out the proposed business
combination by way of a Plan of Arrangement to be proposed by Bema under the
provisions of the Canada Business Corporations Act;
AND
WHEREAS
the
Arrangement is intended to qualify for U.S. federal income tax purposes as
a
reorganization under the provisions of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated
thereunder and other applicable U.S. federal income tax law;
WITNESSETH
THAT
in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the Parties hereto covenant and agree as follows:
ARTICLE
I
DEFINITIONS
AND INTERPRETATION
| 1.1 |
Definitions
|
In
this
Agreement, unless the context otherwise requires:
“Acquisition
Proposal”
means,
in respect of Bema or any Material Bema Subsidiary, any bona fide inquiry or
proposal (written or oral) made by a third party regarding any merger,
amalgamation, share exchange, business combination, take-over bid, sale or
other
disposition of all or substantially all of its respective assets, or sale or
other disposition of any of the Bema properties listed on Schedule C, any
recapitalization, reorganization, liquidation, material sale or issue of
treasury securities or rights therein or thereto or rights or options to acquire
any material number of treasury securities or any type of similar transaction
which would, or could, in any case, constitute a de
facto
acquisition or change of control of Bema or any Material Bema Subsidiary or
would or could, in any case, result in the sale or other disposition of all
or
substantially all of the assets of Bema or any Material Bema
Subsidiary.
-2-
“Agreement”
means
this Agreement, all Schedules and exhibits hereto, as amended or supplemented
from time to time.
“AIM”
means
the AIM market operated by the London Stock Exchange plc.
“Amalco”
has
the
meaning ascribed thereto in the Plan of Arrangement;
“Antitrust
Law”
means
the Competition
Act
(Canada), R.S.C. 1985, c.C-34, as amended, and any other federal, state, or
foreign Law designed or intended to regulate competition or investment (foreign
or otherwise) or to prohibit, restrict or regulate action having the purposes
or
effect of monopolization or restraint of trade.
“Arrangement”
means
the arrangement under the provisions of Section 192 of the CBCA on the terms
set
out in the Plan of Arrangement, subject to any amendments or variations thereto
made in accordance with this Agreement and Section 7.1 of the Plan of
Arrangement or made at the direction of the Court in the Final Order (with
the
consent of Bema and Kinross, each acting reasonably).
“Arrangement
Resolution”
means
the special resolution of the Bema Shareholders to be considered at the Bema
Meeting, to be substantially in the form set out in Schedule A
hereto.
“Articles
of Arrangement”
means
the articles of arrangement of Bema in respect of the Arrangement, to be filed
with the Director after the Final Order is made.
“B2Gold”
means
B2Gold Corp., a corporation existing under the Business
Corporations Act
(British
Columbia) and owned by certain members of Bema’s management.
“B2Gold
Purchase and Sale Agreement”
means
the agreement among Kinross, White Ice Ventures Limited, Bema Vendorco and
B2Gold dated the date hereof pursuant to which (i) Bema Vendorco has agreed
to
transfer certain assets specified therein to B2Gold prior to the Effective
Time
and (ii) White Ice Ventures Limited has agreed to transfer or cause to be
transferred a direct or indirect interest in certain exploration licences to
B2Gold.
“Bema”
has
the
meaning set forth in the recital of the Parties hereto.
“Bema
Common Shares”
means
the common shares of Bema.
“Bema
Convertible Debentures”
means
the outstanding convertible notes of Bema, all as described in Part (c) of
Schedule E hereto.
“Bema
Disclosure Letter”
means
the letter of even date herewith delivered by Bema to Kinross in a form accepted
by and initialled on behalf of Kinross with respect to certain matters in this
Agreement.
“Bema
Documents”
has
the
meaning set out in subsection 3.1(t) hereof.
-3-
“Bema
Group Companies”
means
the Bema Subsidiaries and the Bema Significant Interest Companies,
collectively.
“Bema
Meeting”
means
the special meeting, including any adjournments or postponements thereof, of
the
Bema Shareholders to be held, among other things, to consider and, if deemed
advisable, to approve the Arrangement Resolution.
“Bema
Options”
means
the outstanding options to purchase Bema Common Shares issued pursuant to the
Bema Share Option Plan, all as described in Part (a) of Schedule E
hereto.
“Bema
Proxy Circular”
means
the management information circular to be prepared by Bema in respect of the
Bema Meeting.
“Bema
Required Vote”
means
the requisite approval for the Arrangement Resolution, being (i) not less than
66-2/3 percent of the votes cast in respect of the Arrangement Resolution by
Bema Shareholders present in person or by proxy at the Bema Meeting, (ii) a
majority of votes cast in respect of the Arrangement Resolution by Bema
Shareholders present in person or by proxy at the Bema Meeting, excluding votes
cast by those Bema Shareholders required to be excluded pursuant to the minority
approval provisions of the Rules, and (iii) such other approval required by
the Interim
Order or by applicable Laws.
“Bema
Shareholders”
means,
at any time, the holders of Bema Common Shares at such time.
“Bema
Share Option Plan”
means
the incentive stock option plan of Bema dated April 18, 1995, as
amended.
“Bema
Significant Interest Companies”
means
the corporations identified as such in Schedule G attached hereto,
collectively.
“Bema
Subsidiaries”
means
the corporations identified as such in Schedule G attached hereto,
collectively.
“Bema
Vendorco”
means
6674321 Canada Inc., a corporation existing under the laws of Canada, which
is a
wholly-owned subsidiary of Bema.
“Bema
Warrants”
means
the outstanding warrants of Bema, all as described in Part (b) of Schedule
E
hereto.
“Business
Day”
means
any day, other than a Saturday, a Sunday or a statutory holiday in Toronto,
Ontario or Vancouver, British Columbia.
“Canadian
GAAP”
means
accounting principles generally accepted in Canada.
“CBCA”
means
the Canada
Business Corporations Act.
“Certificate
of Arrangement”
means
the certificate of arrangement giving effect to the Arrangement, issued pursuant
to subsection 192(7) of the CBCA.
-4-
“Completion
Deadline”
means
March 30, 2007 which date shall be extended until June 29, 2007 in the event
that the approval required by the Federal Anti-Monopoly Service of the Russian
Federation has not been obtained in connection with the Arrangement by March
30,
2007 or the condition in subsection 6.2(h) hereof has not been satisfied (or
waived by Kinross) by March 30, 2007.
“Confidentiality
Agreement”
means
the confidentiality agreement dated November 6, 2006 between Kinross and
Bema.
“Contaminants”
means
any pollutant, contaminant or waste of any nature, including without limitation,
any hazardous waste, hazardous substance, hazardous material, toxic substance,
dangerous substance, dangerous good, or deleterious substance, as defined,
judicially interpreted or identified in or for the purposes of any Environmental
Laws.
“Court”
means
the Superior
Court of Justice (Ontario).
“de
facto
acquisition or change of control”
means
the acquisition, directly or indirectly, by any person or group of persons
acting jointly or in concert, of beneficial ownership of, or control or
direction over, sufficient voting securities of Bema to permit such person
or
persons to exercise, or to control or direct the voting of, 20% or more of
the
total number of votes attached to all outstanding voting securities of Bema,
or,
in the case of a Material Bema Subsidiary, 50% of the total number of votes
attached to the outstanding voting securities of such Material Bema Subsidiary
held by Bema.
“Depositary”
means
Kingsdale Shareholder Services Inc., being the depositary or any other trust
company, bank or financial institution agreed to in writing between Kinross
and
Bema for the purpose of, among other things, exchanging certificates
representing Bema Common Shares for Kinross Common Shares and cash consideration
in connection with the Arrangement;
“Director”
means
the Director appointed pursuant to Section 260 of the CBCA.
“Dissent
Rights”
means
the rights of dissent of a Bema Shareholder in respect of the Arrangement
Resolution described in the Plan of Arrangement.
“Dissenting
Shareholder”
has
the
meaning ascribed thereto in the Plan of Arrangement.
“Dissenting
Shares”
has
the
meaning ascribed thereto in the Plan of Arrangement.
“Effective
Date”
means
the date of the Certificate of Arrangement giving effect to the Arrangement
which shall be issued on the date contemplated in subsection 5.1(g)
hereof.
“Effective
Time”
means
the first moment of time (Toronto time) on the Effective Date.
“Eligible
Holder”
means
a
beneficial holder of Bema Common Shares immediately prior to the Effective
Time,
who is a resident of Canada for purposes of the Tax Act (other than a Tax Exempt
Person), or a partnership any member of which is a resident of Canada for the
purposes of the Tax Act (other than a Tax Exempt Person).
-5-
“Employee”
means
any individual employed or retained by Bema or any of the Bema Subsidiaries
on a
full-time, part-time or temporary basis who provides services to Bema or any
of
the Bema Group Companies, including without limitation, those individuals who
are on disability leave, parental leave or other permitted absence.
“Employee
Plans”
has
the
meaning set out in subsection 3.1(r) hereof and includes the Bema Share Option
Plan.
“Encumbrance”
includes any mortgage, pledge, assignment, charge, lien, claim, security
interest, adverse interest, other third person interest or encumbrance of any
kind, whether contingent or absolute, and any agreement, option, right or
privilege (whether by law, contract or otherwise) capable of becoming any of
the
foregoing.
“Environmental
Approvals”
means
all permits, certificates, licences, authorizations, consents, instructions,
registrations, directions or approvals issued or required by any Governmental
Entity pursuant to any Environmental Laws.
“Environmental
Condition”
means
the generation, discharge, emission or release into the environment (including,
without limitation, ambient air, surface water, groundwater or land), spill,
receiving, handling, use, storage, containment, treatment, transportation,
shipment or disposition prior to the Effective Date of any Contaminants by
any
person in respect of which remedial action is required under any Environmental
Laws or as to which any liability is currently or in the future imposed upon
any
person based upon the acts or omissions of any person prior to the Effective
Date with respect to any Contaminants or reporting with respect
thereto.
“Environmental
Laws”
means
all applicable Laws, including applicable common law and agreements with
Governmental Entities, relating to the protection of the environment and
employee and public health and safety, and includes Environmental
Approvals.
“Expropriation
Event”
means
any nationalization of any assets, or threats to nationalize assets, or any
change or proposed change in law which may result in a restriction on foreign
ownership of assets or which may restrict sales of gold, copper or silver or
export of gold, copper or silver from a country.
“Final
Order”
means
the final order of the Court approving the Arrangement, as such order may be
amended by the Court (with the consent of Bema and Kinross, each acting
reasonably) at any time prior to the Effective Date or, if appealed, then,
unless such appeal is withdrawn or denied, as affirmed or amended on
appeal.
“Governmental
Entity”
means
any applicable (i) multinational, federal, provincial, territorial, state,
regional, municipal, local or other government, governmental or public
department, central bank, court, tribunal, arbitral body, commission, board,
bureau or agency, domestic or foreign, (ii) subdivision, agency, commission,
board or authority of any of the foregoing, or (iii) quasi-governmental or
private body (including any stock exchange or Securities Authority) exercising
any regulatory, expropriation or taxing authority under or for the account
of
any of the foregoing.
-6-
“Interim
Order”
means
the interim order of the Court, as the same may be amended by the Court (with
the consent of Bema and Kinross, each acting reasonably), pursuant to subsection
192(3) of the CBCA, made in connection with the Arrangement.
“Joint
Venture Agreement” means
the
agreement to be entered into among a subsidiary of Kinross, B2Gold
and the Government of Chukotka (or any successor in interest) regarding the
East
Kupol and West Kupol licences and the rights and obligations of the parties
to
such agreement with respect to exploration of the areas covered by such
licences, as will be more fully described therein.
“Kinross”
has
the
meaning set forth in the recital of the Parties hereto.
“Kinross
Common Shares”
means
the common shares of Kinross.
“Kinross
Disclosure Letter”
means
the letter of even date herewith delivered by Kinross to Bema in a form accepted
by and initialled on behalf of Bema with respect to certain matters in this
Agreement.
“Kinross
Documents”
has
the
meaning set out in subsection 4.1(q) hereof.
“Kinross
Group Companies”
means
the Kinross Subsidiaries and the Kinross Significant Interest Companies
collectively.
“Kinross
Options”
means
the outstanding options to purchase an aggregate of 3,789,760.16 Kinross Common
Shares issued pursuant to the Kinross Share Option Plans, all as described
in
Schedule F hereto.
“Kinross
Replacement Options”
has
the
meaning set out in subsection 5.2(n)(i) hereof.
“Kinross
Share Option Plans”
means
the share option plans, restricted share unit plans and deferred share unit
plans of Kinross described in Schedule F hereto.
“Kinross
Significant Interest Companies”
means
the corporations identified as such in Schedule H attached hereto,
collectively.
“Kinross
Subsidiaries”
means
the corporations identified as such in Schedule H attached hereto,
collectively.
“Kinross
Warrants”
means
the warrants and other securities convertible or exchangeable into Kinross
Common Shares, all as described in Schedule F hereto.
“knowledge
of Bema”
means
the actual knowledge, after due and reasonable inquiry, of any of the officers
of Bema.
“knowledge
of Kinross”
means
the actual knowledge, after due and reasonable inquiry, of any of the officers
of Kinross.
-7-
“Laws”
means
all laws, by-laws, rules, regulations, orders, ordinances, protocols, codes,
guidelines, instruments, policies, notices, directions and judgments or other
requirements of any Governmental Entity.
“Letter
Agreement”
has
the
meaning set out in the recitals to this Agreement.
“Material
Adverse Change”
means,
in respect of Kinross or Bema, any one or more changes, events or occurrences
including, without limitation, an Expropriation Event in a jurisdiction in
which
it carries on business, and “Material Adverse Effect” means, in respect of
Kinross or Bema, any state of facts which, in either case, either individually
or in the aggregate are, or would reasonably be expected to be, material and
adverse to the business, operations, results of operations, prospects,
properties, assets, liabilities, obligations (whether absolute, accrued,
conditional or otherwise) or condition (financial or otherwise) of Kinross
and
the Kinross Subsidiaries, or Bema and the Bema Subsidiaries, respectively,
on a
consolidated basis, other than any change, event, occurrence or state of facts:
(i) relating to the global economy or securities markets in general; (ii)
affecting the worldwide gold mining industry in general and which does not
have
a materially disproportionate effect on Kinross and the Kinross Subsidiaries
on
a consolidated basis, or Bema and the Bema Subsidiaries on a consolidated basis,
respectively; (iii) resulting from changes in the price of gold, copper or
silver; (iv) relating to the rate at which Canadian dollars can be exchanged
for
United States dollars or vice versa; or (v) relating to a change in the market
trading price of shares of Kinross or Bema, either (A) related to this Agreement
and the transactions contemplated herein or the announcement thereof, or (B)
related to such a change in the market trading price primarily resulting from
a
change, effect, event or occurrence excluded from the definition of Material
Adverse Change under clauses (i) through (iv) inclusive, and except as
explicitly stated herein, references in this Agreement to dollar amounts are
not
intended to be, and shall not be deemed to be, interpretive of the amount used
for the purpose of determining whether a “Material Adverse Change” has occurred
or whether a state of facts exists that has or could have a “Material Adverse
Effect” and such defined terms and all other references to materiality in this
Agreement shall be interpreted without reference to any such
amounts.
“Material
Bema Subsidiary”
means
any Bema Subsidiary that represents 10% or more of the consolidated assets
or
consolidated revenues of Bema and the Bema Group Companies as shown in the
last
audited financial statements of Bema.
“misrepresentation”
has
the
meaning ascribed thereto in the Securities
Act
(Ontario).
“National
Instrument 43-101”
means
National Instrument 43-101 - Standards of Disclosure for Mineral Projects of
the
Canadian Securities Administrators.
“NYSE”
means
the New York Stock Exchange.
“Parties”
means
Bema and Kinross; and “Party”
means
either of them.
“Pension
Plans”
has
the
meaning set out in subsection 3.1(r)(iv) hereof.
“Person”
means
and includes any individual, partnership, association, limited or unlimited
liability company, joint venture, body corporate, trustee, executor,
administrator, legal representative, government (including any Governmental
Entity) or any other entity, whether or not having legal status.
-8-
“Plan
of Arrangement”
means
the plan of arrangement substantially in the form of Schedule B hereto
as
amended or varied pursuant to the terms hereof and thereof.
“Pre-Acquisition
Reorganization”
has
the
meaning set out in subsection 5.1(bb) hereof.
“Prohibited
Payments”
mean
any offer, gift, payment, promise to pay or authorization to pay money or
anything of value to or for the use or benefit of any government official
(including employees and directors of government-owned companies and other
state
enterprises), political party, party official, candidate for public office
or
employee of a public international organization in an effort to win or retain
business or secure any improper advantage, except that the term does not include
any payment to a government official, political party, party official or
political candidate that is expressly permitted under the written laws of the
country involved, or any facilitating payment that
is
made solely to secure the provision of routine governmental
services.
“Rules”
means
Ontario Securities Commission Rule 61-501 and Regulation Q-27 of the Autorité
des marchés financiers.
“Russian
Properties Agreement” means
the
agreement among 6674348 Canada Inc., Bema and B2Gold dated the date hereof
regarding interests of 6674348 Canada Inc. and B2Gold in certain Russian
exploration properties as more fully described therein.
“Xxxxxxxx-Xxxxx
Act”
means
the United States Xxxxxxxx-Xxxxx
Act of 2002
and the
rules and regulations made thereunder, as now in effect or amended from time
to
time.
“SEC”
means
the Securities and Exchange Commission of the United States of
America.
“Securities
Authorities”
means
the Ontario Securities Commission and the other securities regulatory
authorities in the provinces and territories of Canada, the SEC and the
applicable state securities authorities, collectively and “Securities Authority”
means any one of them.
“SEDAR”
means
The System for Electronic Document Analysis and Retrieval, a filing system
developed for the Canadian Securities Administrators.
“Share
Consideration” means
0.4447 of a Kinross Common Share plus $0.01 in cash for each Bema Common
Share.
“Subsidiary”
means,
with respect to a specified body corporate, any body corporate of which the
specified body corporate is entitled to elect a majority of the directors
thereof and shall include any body corporate, partnership, joint venture or
other entity over which such specified body corporate exercises direction or
control or which is in a like relation to such a body corporate, excluding
any
body corporate in respect of which such direction or control is not exercised
by
the specified body corporate as a result of any existing contract, agreement
or
commitment, and, in the case of Kinross, includes the Kinross Subsidiaries
and,
in the case of Bema, includes the Bema Subsidiaries.
-9-
“Superior
Proposal”
means
a
written Acquisition Proposal in respect of Bema, if such Acquisition Proposal
is
not conditional on obtaining financing and the directors of Bema have
determined, in good faith, after consultation with and receiving advice (which
may include written opinions, a copy of which shall have been provided to
Kinross) from, as appropriate, the financial, legal and other advisors to Bema,
to the effect that such Acquisition Proposal would, if consummated in accordance
with the terms thereof, but without assuming away the risk of non-completion,
result in a transaction that has a value per Bema Common Share that is more
favourable to Bema Shareholders from a financial point of view than that
contemplated by this Agreement (including any alterations to this Agreement
agreed to in writing by Kinross in response thereto in accordance with
subsection 7.2(a) hereof).
“Tax”
and
“Taxes”
means
all taxes, assessments, charges, dues, duties, rates, fees imposts, levies
and
similar charges of any kind lawfully levied, assessed or imposed by any
Governmental Entity, including all income taxes (including any tax on or based
upon net income, gross income, income as specially defined, earnings, profits
or
selected items of income, earnings or profits) and all capital taxes, gross
receipts taxes, environmental taxes and charges, sales taxes, use taxes,
ad
valorem
taxes,
value added taxes, subsoil use or extraction taxes and ownership fees, transfer
taxes (including, without limitation, taxes relating to the transfer of
interests in real property or entities holding interests therein), franchise
taxes, licence taxes, withholding taxes, health taxes, payroll taxes, employment
taxes, Canada or Québec Pension Plan premiums, excise, severance, social
security, workers’ compensation, employment insurance or compensation taxes,
mandatory pension and other social fund taxes or premium, stamp taxes,
occupation taxes, premium taxes, property taxes, windfall profits taxes,
alternative or add-on minimum taxes, goods and services tax, harmonized sales
tax, customs duties or other taxes, fees, imports, assessments or charges or
any
kind whatsoever, and any instalments in respect thereof, together with any
interest and any penalties or additional amounts imposed by any taxing authority
(domestic or foreign) on such entity, and any interest, penalties, additional
taxes and additions to tax imposed with respect to the foregoing.
“Tax
Act”
means
the Income
Tax Act
(Canada).
“Tax
Exempt Person”
means
a
person who is exempt from tax under Part I of the Tax
Act.
“Tax
Returns”
means
all returns, schedules, elections, declarations, reports, information returns
and statements required to be filed with any taxing authority relating to
Taxes.
“Termination
Date”
means
the date upon which this Agreement is terminated pursuant to the terms of this
Agreement.
“TSX”
means
the Toronto Stock Exchange.
“US
Tax Code”
means
the United States Internal Revenue Code of 1986, as amended, or any successor
thereto.
“Voting
Agreements”
means
the voting agreements entered into by the directors and executive officers
of
Bema with Kinross.
“1933
Act”
means
the Securities
Act of 1933,
as
amended, of the United States of America.
-10-
“1934
Act”
means
the Securities
Exchange Act of 1934,
as
amended, of the United States of America.
“1940
Act”
means
the Investment
Company Act of 1940,
as
amended, of the United States of America.
| 1.2 |
Interpretation
Not Affected by
Headings
|
The
division of this Agreement into Articles, Sections, subsections and paragraphs
and the insertion of headings are for convenience of reference only and shall
not affect in any way the meaning or interpretation of this Agreement. Unless
the contrary intention appears, references in this Agreement to an Article,
Section, subsection, paragraph or Schedule by number or letter or both refer
to
the Article, Section, subsection, paragraph or Schedule, respectively, bearing
that designation in this Agreement. References in this Agreement to
“include”,
“includes”,
and
“including”
mean
“including,
without limitation”.
| 1.3 |
Number
and Gender
|
In
this
Agreement, unless the contrary intention appears, words importing the singular
include the plural and vice versa, and words importing gender include all
genders.
| 1.4 |
Date
for Any Action
|
If
the
date on which any action is required to be taken hereunder by a Party is not
a
Business Day in the place in which the action is required to be taken, such
action shall be required to be taken on the next succeeding day which is a
Business Day in such place.
| 1.5 |
Currency
|
Unless
otherwise stated, all references in this Agreement to sums of money or currency
are expressed in lawful money of Canada.
| 1.6 |
Accounting
Matters
|
Unless
otherwise stated, all accounting terms used in this Agreement shall have the
meanings attributable thereto under Canadian GAAP and all determinations of
an
accounting nature required to be made shall be made in accordance with Canadian
GAAP applied on a consistent basis.
| 1.7 |
Construction
|
The
language used in this Agreement is the language chosen by the Parties to express
their intent, and no rule of construction to the effect that any ambiguity
is to
be resolved against the drafting Party shall be applied against any
Party.
-11-
|
1.8
|
Statutory
References
|
A
reference to a statute includes all rules, regulations, policies and blanket
orders made pursuant to such statute and, unless otherwise specified the
provisions of any statute, regulation, rule, policy or blanket order which
amends, supplements and supersedes any such statute, regulation, rule, policy
or
blanket order.
| 1.9 |
Schedules
|
The
following Schedules are annexed to this Agreement and are incorporated by
reference into this Agreement and form a part hereof:
| Schedule A | - | Arrangement Resolution | |
| Schedule B | - | Plan of Arrangement | |
| Schedule C | - | Bema Properties | |
| Schedule D | - | Kinross Properties | |
| Schedule E | - | Bema Options/Bema Warrants | |
| Schedule F | - | Kinross Options/Kinross Warrants | |
| Schedule G | - | Bema Significant Interest Companies/ Bema Subsidiaries | |
| Schedule H | - | Kinross Significant Interest Companies / Kinross Subsidiaries | |
| Schedule I | - | Form of Letter from Bema Affiliates |
ARTICLE
II
THE
ARRANGEMENT
| 2.1 |
The
Arrangement
|
The
Parties agree to carry out the Arrangement in accordance with this Agreement
on
the terms set out in the Plan of Arrangement, subject to such changes as may
be
mutually agreed to by the Parties in accordance with this
Agreement.
| 2.2 |
Court
Proceedings
|
As
soon
as is reasonably practicable, pursuant to Section 192 of
the CBCA, Bema shall:
| (a) |
file,
proceed with and diligently pursue an application to the Court for
the
Interim Order providing for, among other things, the calling and
holding
of the Bema Meeting for the purpose of considering and, if deemed
advisable, approving the Arrangement;
and
|
| (b) |
subject
to obtaining the approvals as contemplated by the Interim Order
and as may
be directed by the Court in the Interim Order, take all steps
necessary or
desirable to submit the Arrangement to the Court and to apply
for the
Final Order.
|
-12-
The
notice of motion for the application for the Interim Order shall request that
the Interim Order provide:
| (i) |
for
the class of Persons to whom notice is to be provided in
respect of the
Arrangement and the Bema Meeting and for the manner in which
such notice
shall be provided;
|
| (ii) |
that
the requisite approval for the Arrangement Resolution
shall be (i) not
less than 66-2/3 percent of the votes cast in respect
of the Arrangement
Resolution by Bema Shareholders present in person
or by proxy at the Bema
Meeting and (ii) a majority of the votes cast in
respect of the
Arrangement Resolution by Bema Shareholders present
in person or by proxy
at the Bema Meeting, excluding votes cast by those
Bema Shareholders
required to be excluded pursuant to the minority
approval provisions of
the Rules;
|
| (iii) |
that
in all other respects, the terms, restrictions
and conditions of the
by-laws and articles of Bema, including quorum
requirements and all other
matters, shall apply in respect of the Bema
Meeting;
|
| (iv) |
for
the grant of Dissent Rights as contemplated in
the Plan of
Arrangement;
|
| (v) |
for
notice requirements with respect to the presentation
of the application to
the Court for the Final
Order;
|
| (vi) |
that
the Bema Meeting may be adjourned
or postponed from time to time
by
management of Bema without the
need for additional approval
of the Court;
and
|
| (vii) |
that
the record date for
Bema Shareholders
entitled to vote
at the Bema Meeting
will not change in
respect of any adjournment(s)
or postponement(s)
of the
Bema
Meeting.
|
Bema
shall permit Kinross to review and comment upon drafts of the notices of motion
and related materials for the applications referred to in this Section 2.2
prior
to service (if applicable) and/or filing of the material and give reasonable
consideration to such comments.
| 2.3 |
Articles
of Arrangement
|
Subject
to the rights of termination contained in Article VIII hereof, upon the Bema
Shareholders approving the Arrangement in accordance with the Interim Order,
Bema obtaining the Final Order and the other conditions contained in Article
VI
hereof being complied with or waived, the Parties shall file the Final Order
with the Director together with the Articles of Arrangement and such other
documents as may be required in order to effect the Arrangement.
| 2.4 |
Closing
|
The
Closing of the Arrangement will take place at the offices of Blake, Xxxxxxx
& Xxxxxxx LLP, 199 Bay Street, Suite 0000, Xxxxxxxx Xxxxx Xxxx, Xxxxxxx,
Xxxxxxx X0X 0X0 at 8:00 a.m. (Toronto time) on the Effective Date.
-13-
|
2.5
|
Preparation
of Filings
|
(a) Bema
and
Kinross shall cooperate in the preparation of applications for the approval
of
any Governmental Entity with jurisdiction over the transactions contemplated
hereby and the preparation of any required documents reasonably deemed by the
Parties to be necessary to discharge their respective obligations under
applicable Laws and in that regard each shall, upon request, furnish to the
other all such information concerning it and, in the case of Bema, the Bema
Shareholders, as may be reasonably required for such purposes.
(b) Each
of
Bema and Kinross shall promptly notify the other Party of any communication
to a
Party from any Governmental Entity in respect of the Arrangement and shall
not
participate in any meeting with any Governmental Entity in respect of any
filings, investigations or other inquiry related to the Arrangement unless
it
consults with the other Party in advance and, to the extent permitted by such
Governmental Entity, gives the other Party the opportunity to attend and
participate thereat.
| 2.6 |
Board
of Directors
|
Provided
the Arrangement is completed, Kinross will select a current member of the Bema
board of directors as one of the nominees proposed by Kinross for election
to
the board of directors of Kinross at the first annual meeting of shareholders
of
Kinross following completion of the Arrangement. The Bema director selected
shall have “observer” status at meetings of the Kinross board of directors
following the Effective Date until such annual meeting of shareholders of
Kinross.
| 2.7 |
Communications
|
(a)
Kinross
and Bema agree to make a joint press release with respect to the Arrangement
as
soon as practicable after the execution by them of this Agreement and to
otherwise coordinate the public disclosure and presentations to investors or
otherwise made by them with respect to the Arrangement. Kinross and Bema further
agree that there will be no public announcement or other disclosure of the
Arrangement or of the matters dealt with herein unless they have mutually agreed
thereto or unless otherwise required by applicable Laws or by regulatory
instrument, rule or policy based on the advice of counsel. If either Kinross
or
Bema is required by applicable Laws or regulatory instrument, rule or policy
to
make a public announcement with respect to the transactions contemplated herein,
such Party hereto will provide as much notice to the other of them as reasonably
possible, including the proposed text of the announcement.
(b)
Kinross
and Bema will consult with the other of them in making any filing with any
Governmental Entity with respect to the Arrangement. Each of Kinross and Bema
shall use its commercially reasonable efforts to enable the other of them to
review and comment on all such filings prior to the filing thereof.
(c)
Without
limiting the obligations of Bema under subsection 5.1(h) hereof, Bema agrees
that Kinross may, on behalf of management of Bema, directly or through a
soliciting dealer actively solicit proxies in favour of the Arrangement on
behalf of management of Bema and shall disclose in the Circular that Kinross
may
make such solicitations.
-14-
|
2.8
|
U.S.
Tax Treatment
|
The
Arrangement is intended to qualify as a reorganization within the meaning of
Section 368(a) of the U.S. Tax Code and the Treasury Regulations promulgated
thereunder, and this Agreement is intended to be a "plan of reorganization"
within the meaning of the Treasury Regulations promulgated under Section 368
of
the U.S. Tax Code. To that end, the parties to this Agreement agree and
acknowledge that: (a) the exchange of securities pursuant to Section 2.1 hereof
and Section 3.1(b) of the Plan of Arrangement; (b) the contribution of the
Bema
Common Shares by Kinross to Kinross Subco effected pursuant to Section 3.1(e)
of
the Plan of Arrangement; and (c) the distribution and amalgamation which the
parties have agreed to effect pursuant to Sections 3.1(f) and 3.1(h) of the
Plan
of Arrangement are interdependent steps in a single integrated transaction,
to
which the parties hereto are legally committed as provided herein and in the
Plan of Arrangement. Each party hereto agrees to treat the Arrangement as a
reorganization within the meaning of Section 368(a) of the U.S. Tax Code for
all
U.S. federal income tax purposes, and agrees to treat this Agreement as a "plan
of reorganization" within the meaning of the Treasury Regulations promulgated
under Section 368 of the U.S. Tax Code, and to not take any position on any
Tax
Return or otherwise take any Tax reporting position inconsistent with such
treatment, unless otherwise required by a "determination" within the meaning
of
Section 1313 of the U.S. Tax Code that such treatment is not correct. Each
party
hereto agrees to act in good faith, consistent with the intent of the parties
and the intended treatment of the Arrangement as set forth in this Section
2.8.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF BEMA
| 3.1 |
Representations
and Warranties
|
Bema
hereby represents and warrants to and in favour of Kinross as follows and
acknowledges that Kinross is relying upon such representations and warranties
in
entering into this Agreement and the Arrangement.
(a)
Organization.
Each of
Bema, the Bema Subsidiaries and, to the knowledge of Bema, the Bema Significant
Interest Companies has been incorporated, is validly subsisting and has full
corporate and legal power and authority to own its property and assets and
to
conduct its business as currently owned and conducted. Each of Bema, the Bema
Subsidiaries and, to the knowledge of Bema, the Bema Significant Interest
Companies is registered, licensed or otherwise qualified as an extra-provincial
corporation or a foreign corporation in each jurisdiction where the nature
of
the business or the location or character of the property and assets owned
or
leased by it requires it to be so registered, licensed or otherwise qualified,
other than those jurisdictions where the failure to be so registered, licensed
or otherwise qualified would not have a Material Adverse Effect on Bema. All
of
the outstanding shares of Bema and the Bema Subsidiaries and the outstanding
securities representing Bema’s interest in each of the Bema Significant Interest
Companies are duly authorized, validly issued, fully paid and non-assessable
(and, where required, properly registered). Except as disclosed in the Bema
Disclosure Letter, all of the outstanding shares of the Bema Subsidiaries,
and
all of the outstanding securities representing Bema’s interest in each of the
Bema Significant Interest Companies, are owned directly or indirectly by Bema
or
a Bema Subsidiary. Except pursuant to restrictions on transfer contained in
the
articles or by-laws (or their equivalent) of the applicable Bema Group Company
or as disclosed by Bema in the Bema Disclosure Letter, the outstanding
securities of each Bema Group Company which are owned by Bema (or by another
Bema Group Company) are owned free and clear of all Encumbrances and neither
Bema nor any of the Bema Group Companies is liable to any Bema Group Company
or
to any creditor in respect thereof. Other than as disclosed by Bema in the
Bema
Disclosure Letter, there are no outstanding options, warrants, rights,
entitlements, understandings or commitments (contingent or otherwise) regarding
the right to acquire any issued or unissued securities of any of the Bema Group
Companies from either Bema or any of the Bema Subsidiaries.
-15-
(b)
Capitalization.
Bema is
authorized to issue an unlimited number of Bema Common Shares. As at December
15, 2006, there were 482,636,578 Bema Common Shares outstanding, an aggregate
of
21,382,659 Bema Common Shares were set aside for issue under the Bema Options,
an aggregate of 45,172,551 Bema Common Shares were set aside for issue under
the
Bema Warrants and an aggregate of 15,008,576 Bema Common Shares were set aside
for issue under the Bema Convertible Debentures. The Bema Options, the Bema
Warrants and the Bema Convertible Debentures are described in Schedule E
attached hereto. Except for the Bema Options, the Bema Warrants and the Bema
Convertible Debentures and except as disclosed in the Bema Disclosure Letter,
there are no options, warrants, conversion privileges or other rights,
agreements, arrangements or commitments (pre-emptive, contingent or otherwise)
obligating Bema or any of the Bema Subsidiaries to issue or sell any shares
of
Bema or any of the Bema Subsidiaries or any securities or obligations of any
kind convertible into or exchangeable for any shares of Bema or any of the
Bema
Subsidiaries. There are no outstanding bonds, debentures or other evidences
of
indebtedness of Bema or any of the Bema Group Companies having the right to
vote
with the Bema Shareholders on any matter. There are no outstanding contractual
obligations of Bema or of any of the Bema Group Companies to repurchase, redeem
or otherwise acquire any outstanding Bema Common Shares or with respect to
the
voting or disposition of any outstanding Bema Common Shares.
(c)
Authority.
Bema
has all necessary power, authority and capacity to enter into this Agreement
and
all other agreements and instruments to be executed by Bema as contemplated
by
this Agreement, and to perform its obligations hereunder and under such other
agreements and instruments, such performance subject to the approval of the
Bema
Shareholders and the Court as provided in this Agreement. The execution and
delivery of this Agreement by Bema and the completion by Bema of the Arrangement
and the transactions contemplated by this Agreement have been authorized by
the
directors of Bema and, subject to the approval by the Bema Shareholders and
the
Court and the filing of the corporate documents required under the CBCA in
the
manner contemplated herein, no other corporate proceedings on the part of Bema
are necessary to authorize this Agreement or to complete the transactions
contemplated hereby other than in connection with the approval by the directors
of Bema of the Bema Proxy Circular. This Agreement has been executed and
delivered by Bema and constitutes a legal, valid and binding obligation of
Bema,
enforceable against Bema in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium and other applicable
Laws relating to or affecting creditors’ rights generally, and to general
principles of equity. The execution and delivery by Bema of this Agreement
and
the performance by it of its obligations hereunder and the completion of the
Arrangement and the transactions contemplated hereby, do not and will
not:
| (i) |
result
in a violation, contravention or breach of, require any consent to
be
obtained under or give rise to any termination rights under any provision
of,
|
-16-
| (A) |
the
articles or by-laws (or their equivalent) of Bema or any of the Bema
Subsidiaries, or, to the knowledge of Bema, any of the Bema Significant
Interest Companies,
|
| (B) |
except
for the consents, waivers, permits, exemptions, orders or approvals
of,
and any registrations and filings with, any Governmental Entity
contemplated in subsection 6.1(h) or as disclosed in the Bema
Disclosure Letter or as contemplated by the B2Gold Purchase and Sale
Agreement or the Joint Venture Agreement, any Laws,
or
|
| (C) |
except
as disclosed in the Bema Disclosure Letter or as contemplated by
the
B2Gold Purchase and Sale Agreement or the Joint Venture Agreement,
any
contract, agreement, licence or permit to which Bema, any of the
Bema
Subsidiaries, or to the knowledge of Bema, any of the Bema Significant
Interest Companies, is bound or is subject or of which Bema or any
Bema
Group Company is the beneficiary;
|
| (ii) |
except
as disclosed in the Bema Disclosure Letter, give rise to any right
of
termination or acceleration of indebtedness, or cause any indebtedness
owing by Bema or any of the Bema Subsidiaries, or to the knowledge
of
Bema, any of the Bema Significant Interest Companies, to come due
before
its stated maturity or cause any of its available credit to cease
to be
available;
|
| (iii) |
except
as disclosed in the Bema Disclosure Letter or as contemplated by
the
B2Gold Purchase and Sale Agreement or the Joint Venture Agreement,
result
in the imposition of any Encumbrance upon any of the property or
assets of
Bema, any of the Bema Subsidiaries, or to the knowledge of Bema,
any of
the Bema Significant Interest Companies, or restrict, hinder, impair
or
limit the ability of Bema, any of the Bema Subsidiaries, or to the
knowledge of Bema, any of the Bema Significant Interest Companies
to
conduct the business of Bema or any of the Bema Subsidiaries, or
to the
knowledge of Bema, any of the Bema Significant Interest Companies
as and
where it is now being conducted; or
|
| (iv) |
except
as disclosed in the Bema Disclosure Letter or the Bema Documents
filed on
SEDAR, result in any payment (including termination, severance,
unemployment compensation, change of control, “golden parachute”, bonus or
otherwise) becoming due to any Employee, director or officer of Bema
or of
any Bema Subsidiary or increase any benefits otherwise payable under
any
Employee Plan or result in the acceleration of the time of payment
or
vesting of any such benefits;
|
which
would, individually or in the aggregate, have a Material Adverse Effect on
Bema.
No consent, approval, order or authorization of, or declaration or filing with,
or waiver of any right of, any Governmental Entity or other person is required
to be obtained or made by Bema, any of the Bema Subsidiaries, or to the
knowledge of Bema, any of the Bema Significant Interest Companies in connection
with the execution and delivery of this Agreement or the consummation by Bema
of
the Arrangement and the transactions contemplated hereby other than (i) any
approvals required pursuant to the Interim Order or the Final Order, (ii)
filings with the Director under the CBCA and filings with and approvals required
by Securities Authorities and stock exchanges, (iii) any consent, approval,
order, authorization, waiver, permit or filing required under any applicable
Antitrust Law and listed in the Bema Disclosure Letter, (iv) any other consent,
waiver, permit, order, authorization, approval or filing referred to in the
Bema
Disclosure Letter, and (v) any other consent, approval, order, authorization,
declaration, filing or waiver which, if not obtained, would not, individually
or
in the aggregate, have a Material Adverse Effect on Bema.
-17-
(d)
Directors’
Approvals.
The
board of directors of Bema have received opinions from BMO Capital Markets,
the
financial advisor to the special committee of the board of directors of Bema,
that (i) the Share Consideration is fair, from a financial point of view, to
the
Bema Shareholders, and (ii) the consideration offered by B2Gold to Bema for
the
property and rights to be transferred to B2Gold under the B2Gold Purchase and
Sale Agreement, the Russian Properties Agreement and the Joint Venture Agreement
is fair, from a financial point of view, to Bema, and
the
directors of Bema present at a meeting have unanimously:
| (i) |
determined
that the Share Consideration is fair to the Bema Shareholders and
the
transactions contemplated herein are in the best interests of
Bema;
|
| (ii) |
recommended
that the Bema Shareholders vote in favour of the Arrangement and
the
transactions contemplated herein;
and
|
| (iii) |
authorized
the entering into of this Agreement and the performance by Bema of
its
obligations hereunder.
|
(e)
Bema
Subsidiaries.
The
only Subsidiaries of Bema are the Bema Subsidiaries and the only other
corporations in which Bema owns a direct or indirect interest of greater than
10% are the Bema Significant Interest Companies.
(f) No
Defaults.
Neither
Bema nor any of the Bema Subsidiaries nor, to the knowledge of Bema, any of
the
Bema Significant Interest Companies is in default under (where such default
has
not been waived and disclosed in the Bema Disclosure Letter), and there exists
no event, condition or occurrence which, after notice or lapse of time or both,
would (to the knowledge of Bema in the case of the Bema Significant Interest
Companies) constitute such a default under, any contract, agreement or licence
to which any of them is a party or by which any of them is bound which would,
individually or in the aggregate, have a Material Adverse Effect on
Bema.
-18-
(g)
Absence
of Changes.
Since
September 30, 2006, except as publicly disclosed in the Bema Documents filed
on
SEDAR prior to the date hereof, or disclosed in the Bema Disclosure Letter
or as
contemplated by the B2Gold Purchase and Sale Agreement or the Joint Venture
Agreement:
| (i) |
Bema
and each of the Bema Subsidiaries and, to the knowledge of Bema,
each of
the Bema Significant Interest Companies has conducted its business
only in
the ordinary and regular course of business consistent with past
practice;
|
| (ii) |
neither
Bema nor any of the Bema Group Companies has incurred or suffered
a
Material Adverse Change;
|
| (iii) |
there
has not been any acquisition or sale by Bema, any of the Bema
Subsidiaries, or to the knowledge of Bema, any of the Bema Significant
Interest Companies of any material property or assets
thereof;
|
| (iv) |
other
than in the ordinary and regular course of business consistent with
past
practice, there has not been any incurrence, assumption or guarantee
by
Bema, any of the Bema Subsidiaries, or to the knowledge of Bema,
any of
the Bema Significant Interest Companies of any debt for borrowed
money,
any creation or assumption by Bema, any of the Bema Subsidiaries,
or to
the knowledge of Bema, any of the Bema Significant Interest Companies
of
any Encumbrance, any making by Bema, any of the Bema Subsidiaries,
or to
the knowledge of Bema, any of the Bema Significant Interest Companies
of
any loan, advance or capital contribution to or investment in any
other
person or any entering into, amendment of, relinquishment, termination
or
non-renewal by Bema, any of the Bema Subsidiaries, or to the knowledge
of
Bema, any of the Bema Significant Interest Companies, of any contract,
agreement, licence, lease transaction, commitment or other right
or
obligation which would, individually or in the aggregate, have a
Material
Adverse Effect on Bema;
|
| (v) |
Bema
has not declared or paid any dividends or made any other distribution
on
any of the Bema Common Shares;
|
| (vi) |
Bema
has not effected or passed any resolution to approve a split,
consolidation or reclassification of any of the outstanding Bema
Common
Shares;
|
| (vii) |
other
than in the ordinary and regular course of business consistent with
past
practice, there has not been any material increase in or modification
of
the compensation payable to or to become payable by Bema or any of
the
Bema Subsidiaries to any Employee or to any of their respective directors
or officers or to any director or officer of any of the Bema Significant
Interest Companies who is a nominee of Bema, or any grant to any
Employee
or any such director or officer of any material increase in severance
or
termination pay or any material increase or modification of any Employee
Plan (including, without limitation, the granting of Bema Options
pursuant
to the Bema Share Option Plan) made to, for or with any of such Employee,
directors or officers;
|
| (viii) |
Bema
has not effected any material change in its accounting methods, principles
or practices; and
|
| (ix) |
neither
Bema nor any of the Bema Subsidiaries has entered into or adopted
any, or
materially amended any, collective bargaining agreement or Employee
Plan.
|
-19-
(h)
Employment
Agreements.
Other
than as publicly disclosed in the Bema Documents filed on SEDAR prior to the
date hereof, or disclosed by Bema in the Bema Disclosure Letter:
| (i) |
neither
Bema nor any of the Bema Subsidiaries is a party to or bound by any
written contracts in respect of any Employee, former Employee or
consultant including:
|
| (A) |
any
written contracts providing for the re-employment of any
Employee;
|
| (B) |
any
written bonus, pension, profit sharing, executive compensation, current
or
deferred compensation, incentive compensation, tax equalization,
stock
compensation, stock purchase, stock option, stock appreciation, phantom
stock option, savings, severance or termination pay, retirement,
supplementary retirement, hospitalization insurance, salary continuation,
legal, health or other medical, dental, life, disability or other
insurance plan, program, agreement or arrangement or other plans
or
arrangements providing employee benefits, except for the plans providing
employee benefits described in the Bema Disclosure
Letter;
|
| (C) |
any
written or, to the knowledge of Bema, oral policy, agreement, obligation
or understanding providing for severance or termination payments
to any
Employee, consultant, director or officer of Bema or any Bema Subsidiary
or any employment, service, consulting or other agreement with any
Employee, consultant, director or officer of Bema or any of the Bema
Subsidiaries which provides for termination of employment or of the
contract, as the case may be, on more than six months’ notice (excluding
such as results by Law from the employment of an employee without
an
agreement as to notice or severance);
and
|
| (ii) |
there
are no overdue payments to employees (including any amounts related
to
unused or accrued vacation days).
|
| (i) |
Collective
Agreements.
Except as set out in the Bema Disclosure
Letter:
|
| (i) |
neither
Bema nor any of the Bema Subsidiaries is a party to any collective
bargaining agreement, contract or legally binding commitment to any
trade
union or employee organization in respect of or affecting the
Employees;
|
| (ii) |
neither
Bema nor any of the Bema Subsidiaries are currently engaged in any
labour
negotiation;
|
| (iii) |
neither
Bema nor any of the Bema Subsidiaries are a party to any application,
claim, complaint, grievance arbitration or other proceeding by or
respecting any Employees or former Employees under any Laws or before
any
Governmental Entity, including without limitation, any application
for
certification or which otherwise involves the recognition of any
trade
union or similar employee organization as the bargaining agent of
any of
the Employees, or any unfair labour practice
complaint;
|
-20-
| (iv) |
neither
Bema nor any of the Bema Subsidiaries are, to the knowledge of Bema,
currently engaged in any unfair labour practice nor is Bema aware
of any
pending or threatened complaint regarding any alleged unfair labour
practices;
|
| (v) |
there
is no strike, labour dispute, work slow down or stoppage against
or
involving Bema or any of the Bema Subsidiaries nor, to the knowledge
of
Bema, are any strikes, labour disputes, work slowdowns or stoppages
pending or threatened against Bema or any of the Bema Subsidiaries
which
would have a Material Adverse Effect on
Bema;
|
| (vi) |
to
the knowledge of Bema, there is no lockout pending or anticipated
by Bema
or any of the Bema Subsidiaries;
|
| (vii) |
there
is no grievance or arbitration proceeding arising out of or under
any
collective bargaining agreement pending or threatened against Bema
or any
of the Bema Subsidiaries;
|
| (viii) |
neither
Bema nor any of the Bema Subsidiaries have experienced any material
work
stoppage in the 24-month period immediately preceding the date of
this
Agreement; and
|
| (ix) |
to
the knowledge of Bema, neither Bema nor any of the Bema Subsidiaries
are,
nor have they been in the 24-month period preceding the date of this
Agreement, the subject of any union organization effort or campaign or
similar organization effort by any employee organization or group
in
respect of or affecting Employees.
|
| (j) |
Financial
Matters.
|
| (i) |
The
audited consolidated financial statements of Bema as at and for the
fiscal
years ended December 31, 2004 and December 31, 2005 (including the
notes
thereto and related management’s discussion and analysis) and Bema’s
unaudited financial statements as at and for the nine months ended
September 30, 2006 (including the notes thereto and related management’s
discussion and analysis) were prepared in accordance with Canadian
GAAP,
consistently applied, and fairly present in all material respects
the
consolidated financial condition of Bema at the respective dates
indicated
and the results of operations of Bema for the periods covered on
a
consolidated basis (subject, in the case of any unaudited interim
consolidated financial statements, to normal period-end adjustments)
and
reflect adequate provision for the liabilities of Bema on a consolidated
basis in accordance with Canadian GAAP. Neither Bema nor any of the
Bema
Subsidiaries has any liability or obligation (including, without
limitation, liabilities or obligations to fund any operations or
work or
exploration program, to give any guarantees or for Taxes), whether
accrued, absolute, contingent or otherwise, not reflected in the
consolidated financial statements of Bema for the nine months ended
September 30, 2006, except liabilities and obligations incurred in
the
ordinary and regular course of business since September 30, 2006.
Bema is
able to pay its liabilities as they become due; the realizable value
of
the assets of Bema is not less than the aggregate of the liabilities
thereof and the stated capital of all classes of shares
thereof.
|
-21-
| (ii) |
The
management of Bema has established and maintained a system of disclosure
controls and procedures designed to provide reasonable assurance
that
information required to be disclosed by Bema in its annual filings,
interim filings or other reports filed, furnished or submitted by
it under
provincial and territorial securities legislation is reported within
the
time periods specified in such legislation, laws and
rules.
|
| (iii) |
Neither
Bema nor any of the Bema Subsidiaries nor, to the knowledge of Bema,
any
director, officer, employee, auditor, accountant or representative
of Bema
or any of the Bema Subsidiaries has received or otherwise had or
obtained
knowledge of any complaint, allegation, assertion or claim, whether
written or oral, regarding the accounting or auditing practices,
procedures, methodologies or methods of Bema or any of the Bema
Subsidiaries or their respective internal accounting controls, including
any complaint, allegation, assertion or claim that Bema or any of
the Bema
Subsidiaries has engaged in questionable accounting or auditing practices,
which has not been resolved to the satisfaction of the Audit Committee
of
the Board of Directors of Bema.
|
(k)
No
Prohibited Payments.
Neither
Bema, a Bema Subsidiary, nor, to the knowledge of Bema, any Bema Significant
Interest Company or officer, director, Employee, shareholder, agent or other
person acting on behalf of Bema or any Bema Group Company, (i) has made any
Prohibited Payments, (ii) has made any payments or provided services that,
even
though not Prohibited Payments, were not legal to make or provide or that were
not legal for the persons receiving them to receive, (iii) has received any
payments, services or gratuities that were not legal to receive or that were
not
legal for the person making them to provide, (iv) has engaged in any
transactions or made or received payments that were not properly recorded on
the
accounting books and records or properly disclosed on its financial statements,
or (v) has maintained any off-book bank or cash account or “slush
funds”.
(l) Books
and Records.
The
corporate records and minute books of Bema and, since the date each Bema
Subsidiary was acquired or incorporated by Bema, the corporate records and
minute books of the Bema Subsidiaries have been maintained in accordance with
all applicable Laws and are complete and accurate in all material respects.
The
minute books of Bema and the Bema Subsidiaries provided to Kinross for review
are true and complete in all material respects and, except as disclosed in
the
Bema Disclosure Letter, the minutes and documents contained therein have not
been amended or supplemented since the time of such review. Financial books
and
records and accounts of Bema and the Bema Subsidiaries in all material respects
(i) have been maintained in accordance with good business practices on a basis
consistent with prior years, (ii) are stated in reasonable detail and accurately
and fairly reflect the transactions and acquisitions and dispositions of assets
of Bema and the Bema Group Companies, and (iii) in the case of Bema and the
Bema
Subsidiaries, accurately and fairly reflect the basis for the consolidated
financial statements of Xxxx.
-00-
(x) Xxxxxxxxxx.
There
is no complaint, claim, action, proceeding or investigation pending or in
progress or, to the knowledge of Bema, threatened against or relating to Bema
or
any of the Bema Subsidiaries or affecting any of their respective properties,
permits, licences or assets before any Governmental Entity which individually
or
in the aggregate has a Material Adverse Effect on Bema. To the knowledge of
Bema, there is no claim, action, proceeding or investigation pending or
threatened against or relating to any of the Bema Significant Interest Companies
or affecting any of their respective properties or assets before any
Governmental Entity which individually or in the aggregate has a Material
Adverse Effect on Bema. There is no bankruptcy, liquidation, winding-up or
other
similar proceeding pending or in progress, or, to the knowledge of Bema,
threatened against or relating to Bema, any of the Bema Subsidiaries, or to
the
knowledge of Bema, any of the Bema Significant Interest Companies, before any
Governmental Entity. Neither Bema, any of the Bema Subsidiaries, or to the
knowledge of Bema, any of the Bema Significant Interest Companies, nor any
of
their respective properties or assets is subject to any outstanding judgment,
fine, penalty, order, writ, injunction or decree that involves or may involve,
or restricts or may restrict, or requires or may require, the expenditure of
an
amount of money in the aggregate in excess of $10,000,000 as a condition to
or a
necessity for the right or ability of Bema or any Bema Group Company,
respectively, to conduct its business in all material respects as it has been
carried on prior to the date hereof, or that would materially impede the
consummation of the Arrangement and the transactions contemplated by this
Agreement.
(n)
Title
to Properties and Condition of Assets.
Except
as set forth in the Bema Disclosure Letter, each of Bema or a Bema Subsidiary
has sufficient title (whether in fee simple or equivalent or by means of an
exploration, retention, reconnaissance, development or mining permit, right
or
licence or similar), free and clear of any title defect or Encumbrance, to
its
mineral projects with proven and probable reserves (other than property as
to
which it is a lessee, in which case it has a valid leasehold interest), such
properties being described in Schedule C hereto, except for such defects in
title or Encumbrances that, individually or in the aggregate, do not have a
Material Adverse Effect on Bema. All real and tangible personal property of
Bema
and each Bema Group Company is in generally good repair and is operational
and
usable in the manner in which it is currently being utilized, subject to normal
wear and tear and technical obsolescence, repair or replacement, except for
such
property whose failure to be in such condition does not have a Material Adverse
Effect on Bema. Bema has provided Kinross with a list of the material royalty
and similar type interests which are owned or held, directly or indirectly,
by
Bema and Bema has, applying customary standards in the mining industry,
sufficient title to all of such material royalty or other interests, free and
clear of any title defects or Encumbrances, except for any such title defects
or
Encumbrances that, individually or in the aggregate, do not have a Material
Adverse Effect on Bema. All required permits or registrations necessary to
perfect title in and to such assets have been carried out in compliance with
applicable Law and are in full force and effect, except for any non-compliance
that, individually or in the aggregate, does not have a Material Adverse Effect
on Bema.
(o)
Insurance.
Bema
and the Bema Subsidiaries maintain policies of insurance in amounts and in
respect of such risks as are normal and usual for companies of a similar size
operating in the mining industry and as required in accordance with their
respective licences and permits, and such policies are in full force and effect
as of the date hereof.
-23-
(p)
Environmental.
Except
as to the matters described in the Bema Disclosure Letter, since the date Bema
acquired each of the Bema Group Companies there has been no Environmental
Condition, and in respect of each such Bema Group Company, to the knowledge
of
Bema there exists no Environmental Condition, which, individually or in the
aggregate, has a Material Adverse Effect on Bema. Bema has received no notice,
directive or advisory from any Governmental Entity of any Environmental
Condition that would have a Material Adverse Effect on Bema.
Each
of
the Bema Group Companies maintains sufficient financial reserves, including,
but
not limited to, financial assurance required by Governmental Entities pursuant
to Environmental Approvals, sufficient to meet the obligations of such Bema
Group Company in respect of reclamation, remediation, closure and post-closure
obligations relating to the assets and operations of such Bema Group
Company.
Except
as
to matters described in the Bema Disclosure Letter, each of the Bema Group
Companies has all Environmental Approvals required pursuant to Environmental
Laws in respect of the current operations of such Bema Group Company and is
in
compliance with such Environmental Approvals except where any non-compliance
would not have a Material Adverse Effect on Bema.
(q)
Tax
Matters.
Except
as disclosed in the Bema Disclosure Letter, Bema and the Bema Subsidiaries
have
filed or caused to be filed, and will continue to file and cause to be filed,
in
a timely manner all Tax Returns required to be filed by them (all of which
Tax
Returns were correct and complete in all material respects and no material
fact
has been omitted therefrom) and have paid, collected, withheld or remitted,
or
caused to be paid, collected, withheld or remitted, all Taxes that are due
and
payable, collectible and remittable. No extension of time in which to file
any
Tax Returns is in effect. Bema has provided adequate accruals in accordance
with
Canadian GAAP in its published consolidated financial statements for any Taxes
for the period covered by such financial statements which have not been paid,
whether or not shown as being due on any Tax Returns. Since such publication
date, no material liability for Taxes not reflected in such consolidated
financial statements has been incurred or accrued by Bema or the Bema
Subsidiaries other than in the ordinary course of business. No lien for Taxes
has been filed or exists other than for Taxes not yet due and
payable.
Except
as
disclosed in the Bema Disclosure Letter, there are no reassessments of Taxes
in
respect of Bema or the Bema Subsidiaries that have been issued and are
outstanding and there are no outstanding issues which have been raised and
communicated to Bema or any Bema Subsidiary by any Governmental Entity for
any
taxation year in respect of which a Tax Return of Bema or any Bema Subsidiary
has been audited. Except as disclosed in the Bema Disclosure Letter, no
Governmental Entity has challenged, disputed or questioned Bema or any Bema
Subsidiary in respect of Taxes or Tax Returns. Except as disclosed in the Bema
Disclosure Letter, none of Bema or any Bema Subsidiary is negotiating any draft
assessment or reassessment with any Governmental Entity. Except as disclosed
in
the Bema Disclosure Letter, Bema is not aware of any contingent liabilities
for
Taxes or any grounds for an assessment or reassessment of Bema or any Bema
Subsidiary, including, without limitation, unreported benefits conferred on
any
shareholder, aggressive treatment of income, expenses, credits or other claims
for deduction under any return or notice other than as disclosed in the
Financial Statements. Except as disclosed in the Bema Disclosure Letter, neither
Bema nor any Bema Subsidiary has received any indication from any Governmental
Entity that an assessment or reassessment of Bema or any Bema Subsidiary is
proposed in respect of any Taxes, regardless of its merits. Except as disclosed
in the Bema Disclosure Letter, neither Bema nor any Bema Subsidiary has executed
or filed with any Governmental Entity any agreement or waiver extending the
period for assessment, reassessment or collection of any Taxes. All taxation
years up to and including the taxation year ended 1998 are considered closed
by
Canadian federal and provincial governmental bodies for the purposes of all
Taxes.
-24-
Bema
and
each Bema Subsidiary has withheld from each payment made to any of its present
or former Employees, officers and directors, and to all other persons all
amounts required by law to be withheld, and furthermore, has remitted such
withheld amounts within the prescribed periods to the appropriate Governmental
Entity. Bema and each Bema Subsidiary has remitted all Canada Pension Plan
contributions, provincial pension plan contributions, employment insurance
premiums, employer health taxes and other Taxes payable by it in respect of
its
employees and has remitted such amounts to the proper Governmental Entity within
the time required under the applicable legislation. Bema and each Bema
Subsidiary has charged, collected and remitted on a timely basis all Taxes
as
required under applicable legislation on any sale, supply or delivery
whatsoever, made by them.
Bema
and
each Bema Subsidiary will not at any time be deemed to have a capital gain
pursuant to subsection 80.03(2) of the Tax Act or any analogous provincial
legislative provision as a result of any transaction or event taking place
in
any taxation year ending on or before the Effective Date.
There
are
no circumstances existing which could result in the application of section
78 or
160 of the Tax Act or any equivalent provincial provision to Bema or any Bema
Subsidiary.
Neither
Bema nor any Bema Subsidiary has participated, directly or through a
partnership, in a transaction or series of transactions contemplated in
subsection 247(2) of the Tax Act or any analogous provincial legislative
provision.
In
respect of the Bema Subsidiaries, no transaction has been entered into without
a
valid business purpose.
| (r) |
Employee
Plans.
|
| (i) |
All
material written employee benefit, welfare, supplemental unemployment
benefit, bonus, pension, profit sharing, tax equalization, executive
compensation, current or deferred compensation, incentive compensation,
stock compensation, stock purchase, stock option, stock appreciation,
phantom stock option, savings, severance or termination pay, retirement,
supplementary retirement, hospitalization insurance, salary continuation,
legal, health or other medical, dental, life, disability or other
insurance (whether insured or self-insured) plan, program, agreement
or
arrangement, sponsored, maintained or contributed to or required
to be
contributed to by Bema or any of the Bema Subsidiaries for the benefit
of
its Employees or former Employees and their dependants or beneficiaries
to
which Bema or any of the Bema Subsidiaries participates or has any
actual
or potential liability or obligations, other than plans established
pursuant to statute (collectively the “Employee Plans”) are customary and
in good standing.
|
-25-
| (ii) |
The
booklets, brochures, summaries, descriptions and manuals prepared
for, and
circulated to, the Employees and former Employees of Bema and Bema
Subsidiaries and their beneficiaries concerning each Employee Plan,
together with all written communications of a general nature provided
to
such Employees and their beneficiaries, accurately describe the benefits
provided under each such Employee Plan referred to
therein.
|
| (iii) |
All
of the Employee Plans have been established, registered, qualified,
funded, invested and administered in material compliance with, and
are in
good standing under, all Laws, the terms of such Employee Plans and
in
accordance with all understandings, written or oral, between Bema,
Bema
Subsidiaries and the Employees or former Employees. No fact or
circumstance exists that could adversely affect the registered status
of
any Employee Plan. None of the Employee Plans enjoys any special
tax
status under Laws, nor have any advance tax rulings or other clearances
from any Governmental Entity been sought or received in respect of
the
Employee Plans.
|
| (iv) |
Bema
does
not have any “registered pension plan” as that term is defined in
subsection 248(1) of the Tax Act or any Laws (collectively the “Pension
Plans”).
|
| (v) |
No
material amendments have been made to any Employee Plan and no material
improvements to any Employee Plan have been promised and no amendments
or
improvements to any Employee Plan will be made or promised by Bema
or any
of the Bema Subsidiaries prior to the Effective
Time.
|
| (vi) |
No
changes have occurred to the Employee Plans or are expected to occur
which
would materially affect the actuarial reports or any of the financial
statements relevant to Bema or the Bema
Subsidiaries.
|
| (vii) |
Except
as disclosed in the Bema Disclosure Letter, none of the Employee
Plans
provides post-retirement benefits to or in respect of the Employees
or any
former Employees or to or in respect of the beneficiaries of such
Employees and former Employees.
|
| (viii) |
All
data necessary to administer each Employee Plan is in the possession
of
Bema and is in a form sufficient for the proper administration of
each
Employee Plan.
|
| (ix) |
Bema
and/or the Bema Subsidiaries may unilaterally amend, modify, vary,
revise,
revoke, or terminate, in whole or in part, each Employee Plan and
take
contribution holidays under or withdraw surplus from each Employee
Plan,
subject only to approvals required by
Laws.
|
-26-
|
(x)
|
Subject
to obtaining any approvals under Laws, Bema and/or the Bema Subsidiaries
may merge any Employee Plan with any other arrangement, plan or fund
and
may transfer without restriction, the assets from any Employee Plan
to any
other arrangement, plan or fund.
|
| (xi) |
All
material obligations regarding the Employee Plans have been satisfied
and
there are no outstanding defaults or violations by any party thereto
and
no taxes, penalties or fees are owing or exigible under any of the
Employee Plans.
|
| (xii) |
All
contributions or premiums required to be made by Bema or any Bema
Subsidiaries under the terms of each Employee Plan, any collective
bargaining agreement or by Laws have been made in a timely fashion
in
accordance with Laws and the terms of the Employee Plans and any
applicable collective bargaining agreement, and none of Bema nor
any Bema
Subsidiaries has, nor will have as of the Effective Date, any actual
or
potential unfunded liabilities (other than liabilities accruing after
the
Effective Date) with respect to any of the Employee Plans. All liabilities
of Bema or any Bema Subsidiaries (whether accrued, absolute, contingent
or
otherwise) related to all Employee Plans have been fully and accurately
disclosed in accordance with GAAP in the consolidated financial statements
of Bema and will be fully and accurately disclosed in Bema’s consolidated
balance sheet as of the Effective
Date.
|
| (xiii) |
Except
as
disclosed in the Bema Disclosure Letter, no Employee Plan, nor any
related
trust or other funding medium thereunder, is subject to any pending,
threatened or anticipated investigation, examination or other legal
proceeding, initiated by any Governmental Entity or by any other
person
(other than routine claims for benefits), and to the knowledge of
Bema,
the Bema Subsidiaries and the Bema Significant Interest Companies,
there
exists no state of facts which after notice or lapse of time or both
could
reasonably be expected to give rise to any such investigation, examination
or other legal proceeding or to affect the registration of any Employee
Plan required to be registered. Further, should any matter arise
which
could affect the registration of any Employee Plan, Bema shall, in
a
timely fashion, take all steps required to ensure the registration
is not
affected.
|
| (xiv) |
There
have been no withdrawals, applications or transfers of assets from
any
Employee Plan or the trusts or other funding media relating thereto
except
in accordance with the terms of such Employee Plan, Laws and all
applicable agreements. None of Bema, any Bema Subsidiaries, or any
of
their agents or employees, has been in breach of any contractual
or
fiduciary obligation with respect to the administration of the Employee
Plans or the trusts or other funding media relating
thereto.
|
| (xv) |
No
insurance policy or other contract or agreement affecting any Employee
Plan requires or permits a retroactive increase in premiums or payments
due thereunder. The level of insurance reserves in respect of each
insured
Employee Plan is reasonable and sufficient to provide for all incurred
but
unreported claims.
|
| (xvi) |
Except
as disclosed in the Bema Disclosure Letter or as contemplated in
this
Agreement, the execution of this Agreement and the completion of
the
Arrangement and the transactions contemplated hereby will not (either
alone or in conjunction with any additional or subsequent events)
constitute an event under any Employee Plan that will or may result
in any
material (A) payment (whether of severance pay or otherwise), (B)
acceleration of payment or vesting of benefits, (C) forgiveness of
indebtedness, (D) distribution, (E) restriction on funds, or (F)
increase
in benefits or obligation to fund benefits with respect to any
Employee.
|
-27-
| (xvii) |
There
exists no material liability in connection with any former benefit
plan
relating to the Employees or former Employees of Bema or any Bema
Subsidiaries or their beneficiaries that has terminated, and all
procedures for termination of each such former benefit plan have
been
properly followed in material compliance with the terms of such former
benefit plans and Laws.
|
(s)
Reporting
Status.
Bema is
a reporting issuer or its equivalent in each of the provinces and territories
of
Canada. Bema is subject to the filing obligations imposed by section 13 of
the
1934 Act. The Bema Common Shares are listed on the TSX, the NYSE and on AIM.
Certain of the Bema Warrants are listed on the TSX. The Bema Convertible
Debentures are listed on the Luxembourg Stock Exchange.
(t)
Reports.
Bema
has filed (including, as applicable, on SEDAR) or furnished, as applicable,
with
the Securities Authorities, stock exchanges and all applicable self-regulatory
authorities all forms, reports, schedules, statements, certifications, material
change reports and other documents required to be filed or furnished by it
(such
forms, reports, schedules, statements, certifications and other documents,
including any financial statements or other documents, including any schedules
included therein, are referred to as the “Bema Documents”). The Bema Documents,
at the time filed or furnished, (a) did not contain any misrepresentation and
(b) complied in all material respects with the requirements of applicable
securities legislation and the rules, policies and instruments of all Securities
Authorities having jurisdiction over Bema. As of their respective dates (or,
if
amended prior to the date hereof, as of the date of such amendment) the Bema
Documents filed or furnished with the SEC did not contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. Bema has not filed any
confidential material change or other report or other document with any
Securities Authorities or stock exchange or other self-regulatory authority
which at the date hereof remains confidential.
(u)
Mineral
Reserves and Resources.
The
estimated proven and probable mineral reserves and estimated, measured,
indicated and inferred mineral resources disclosed in the Bema Documents filed
on SEDAR as of year-end December 31, 2005 have been prepared and disclosed
in
all material respects in accordance with National Instrument 43-101. There
has
been no material reduction (other than as a result of operations in the ordinary
course of business) in the aggregate amount of estimated mineral reserves,
estimated mineral resources or mineralized material of Bema and its subsidiaries
and Bema’s material joint ventures, taken as a whole, from the amounts disclosed
in the Bema Documents filed on SEDAR.
-28-
(v)
Compliance
with Laws and Exchange Requirements.
Bema
and, since the date Bema acquired each of the Bema Subsidiaries, the Bema
Subsidiaries (A) have complied with and are not in violation of any applicable
Laws other than such non-compliance or violations which would not, individually
or in the aggregate, have a Material Adverse Effect on Bema and (B) have
complied and are in compliance, in all material respects, with any applicable
listing and corporate governance rules and regulations of the TSX, NYSE, AIM
and
the Luxembourg Stock Exchange. To the knowledge of Bema, the Bema Subsidiaries
and the Bema Significant Interest Companies (X) have complied with and are
not in violation of any applicable Laws other than such non-compliance or
violations which would not, individually or in the aggregate, have a Material
Adverse Effect on Bema and (Y) have complied and are in compliance, in all
material respects, with any applicable listing and corporate governance rules
and regulations of the TSX, NYSE, AIM and the Luxembourg Stock
Exchange.
(w) No
Cease Trade.
Bema is
not subject to any cease trade or other order of any applicable stock exchange
or Securities Authority and, to the knowledge of Bema, no investigation or
other
proceedings involving Bema which may operate to prevent or restrict trading
of
any securities of Bema are currently in progress or pending before any
applicable stock exchange or Securities Authority.
(x)
No
Option on Assets.
Except
as disclosed in the Bema Disclosure Letter, and except pursuant to the B2Gold
Purchase and Sale Agreement and the Russian Properties Agreement, no person
has
any agreement or option or any right or privilege capable of becoming an
agreement or option for the purchase from Bema or the Bema Subsidiaries of
any
of the material assets of Bema or any of the Bema Subsidiaries.
(y)
Certain
Contracts.
Except
as disclosed in the Bema Disclosure Letter, neither Bema, nor to the knowledge
of Bema any of the Bema Subsidiaries is, nor since the date Bema acquired each
of the Bema Subsidiaries has any Bema Subsidiary become, a party to or bound
by
any non-competition agreement or any other agreement, obligation, judgment,
injunction, order or decree which purports to (i) limit the manner or the
localities in which all or any material portion of the business of Bema or
the
Bema Subsidiaries are conducted, (ii) limit any material business practice
of
Bema or any Bema Subsidiary in any material respect, or (iii) restrict any
acquisition or disposition of any material property by Bema or any Bema
Subsidiary in any material respect.
(z) Foreign
Private Issuer.
As of
the date hereof, Bema is a “foreign private issuer” as defined in Rule 405 under
the 1933 Act.
(aa)
Investment
Company Status.
Bema is
not an “investment company”, as such term is defined under the 1940
Act.
-29-
(bb)
Full
Disclosure.
Bema
has made available to Kinross through Bema Documents filed on SEDAR and
otherwise, all material information, including financial, operational and other
information required by National Instrument 43-101, in respect of the properties
listed in Schedule C required by National Instrument 43-101 and all such
information as made available to Kinross was true and correct at the date of
filing in all material respects and no material fact or facts were omitted
therefrom which would make such information misleading.
(cc)
No
Broker’s Commission.
Bema
has not entered into any agreement that would entitle any person (including
Endeavour) to any valid claim against Bema for a broker’s commission, finder’s
fee or any like payment in respect of the Arrangement or any other matter
contemplated by this Agreement, except for the financial advisory fees disclosed
in the Bema Disclosure Letter.
(dd)
Reorganization.
Neither
Bema nor any affiliate of Bema has taken or agreed to take any action not
specified in this Agreement or the agreements referred to herein (without
regard to any action taken or agreed to be taken by Kinross or any affiliate
of
Kinross) or knows of any circumstances that would prevent the Arrangement from
qualifying as a reorganization within the meaning of Section 368(a) of the
U.S.
Tax Code.
| 3.2 |
Survival
of Representations and
Warranties
|
The
representations and warranties of Bema contained in this Agreement shall survive
the execution and delivery of this Agreement and shall terminate on the earlier
of the termination date of this Agreement in accordance with its terms and
the
Effective Date. Any investigation by Kinross or its advisors shall not mitigate,
diminish or affect the representations and warranties of Bema made
hereunder.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF KINROSS
| 4.1 |
Representations
and Warranties
|
Kinross
hereby represents and warrants to and in favour of Bema as follows and
acknowledges that Bema is relying upon such representations and warranties
in
entering into this Agreement and the Arrangement:
(a)
Organization.
Each of
Kinross, the Kinross Subsidiaries and, to the knowledge of Kinross, the Kinross
Significant Interest Companies, has been incorporated, is validly subsisting
and
has full corporate and legal power and authority to own its property and assets
and to conduct its business as currently owned and conducted. Each of Kinross,
the Kinross Subsidiaries and, to the knowledge of Kinross, the Kinross
Significant Interest Companies, is registered, licensed or otherwise qualified
as an extra-provincial corporation or a foreign corporation in each jurisdiction
where the nature of the business or the location or character of the property
and assets owned or leased by it requires it to be so registered, licensed
or
otherwise qualified, other than those jurisdictions where the failure to be
so
registered, licensed or otherwise qualified would not have a Material Adverse
Effect on Kinross. Except as disclosed in the Kinross Disclosure Letter, all
of
the outstanding shares of Kinross and the Kinross Subsidiaries and the
outstanding securities representing Kinross’ interest in each of the Kinross
Significant Interest Companies are duly authorized, validly issued, fully paid
and non-assessable (and, where required, properly registered). Except as
disclosed in the Kinross Disclosure Letter, all of the outstanding shares of
the
Kinross Subsidiaries and all of the outstanding securities representing Kinross’
interest in each of the Kinross Significant Interest Companies are owned
directly or indirectly by Kinross or a Kinross Subsidiary. Except pursuant
to
restrictions on transfer contained in the articles or by-laws (or their
equivalent) of the applicable Kinross Group Company or as disclosed by Kinross
in the Kinross Disclosure Letter, the outstanding securities of each Kinross
Group Company which are owned by Kinross (or by another Kinross Group Company)
are owned free and clear of all Encumbrances and neither Kinross nor any of
the
Kinross Group Companies is liable to any Kinross Group Company or to any
creditor in respect thereof. Other than as disclosed by Kinross in the Kinross
Disclosure Letter, there are no outstanding options, rights, entitlements,
understandings or commitments (contingent or otherwise) regarding the right
to
acquire any issued or unissued securities of any of the Kinross Group Companies
from either Kinross or any of the Kinross Subsidiaries.
-30-
(b)
Capitalization.
Kinross
is authorized to issue an unlimited number of Kinross Common Shares. As at
December 15, 2006, there were 362,673,859 Kinross Common Shares outstanding,
an
aggregate of 3,439,156.16 Kinross Common Shares were set aside for issue under
the Kinross Options and an aggregate of 8,333,333 Kinross Common Shares were
set
aside for issue under the Kinross Warrants. The Kinross Options and the Kinross
Warrants are described in Schedule F attached hereto. Except for the Kinross
Options and the Kinross Warrants and except as contemplated herein or as
disclosed in the Kinross Disclosure Letter, there are no options, warrants,
conversion privileges or other rights, agreements, arrangements or commitments
(pre-emptive, contingent or otherwise) obligating Kinross or any of the Kinross
Subsidiaries to issue or sell any shares of Kinross or any of the Kinross
Subsidiaries or any securities or obligations of any kind convertible into
or
exchangeable for any shares of Kinross or any of the Kinross Subsidiaries.
There
are no outstanding bonds, debentures or other evidences of indebtedness of
Kinross or any of the Kinross Group Companies having the right to vote with
the
Kinross Shareholders on any matter. There are no outstanding contractual
obligations of Kinross or of any of the Kinross Group Companies to repurchase,
redeem or otherwise acquire any outstanding Kinross Common Shares or with
respect to the voting or disposition of any outstanding Kinross Common
Shares.
(c)
Authority.
Kinross
has all necessary power, authority and capacity to enter into this Agreement
and
all other agreements and instruments to be executed by Kinross as contemplated
by this Agreement, and to perform its obligations hereunder and under such
other
agreements and instruments. The execution and delivery of this Agreement by
Kinross and the completion by Kinross of the Arrangement and the transactions
contemplated by this Agreement have been authorized by the directors of Kinross,
and no other corporate proceedings (including shareholders meetings) on the
part
of Kinross are necessary to authorize this Agreement or to complete the
transactions contemplated hereby. This Agreement has been executed and delivered
by Kinross and constitutes, a legal, valid and binding obligation of each of
Kinross, enforceable against Kinross in accordance with its terms, subject
to
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium and
other applicable Laws relating to or affecting creditors’ rights generally, and
to general principles of equity. The execution and delivery by Kinross of this
Agreement and the performance by it of its obligations hereunder and the
completion of the Arrangement and the transactions contemplated hereby, do
not
and will not:
| (i) |
result
in a violation, contravention or breach of, require any consent to
be
obtained under or give rise to any termination rights under any provision
of,
|
-31-
|
(A)
|
the
articles or by-laws (or their equivalent) of Kinross or any of the
Kinross
Subsidiaries, or, to the knowledge of Kinross, any of the Kinross
Significant Interest Companies,
|
| (B) |
except
for the consents, waivers, permits, exemptions, orders or approvals
of,
and any registrations and filings with, any Governmental Entity
contemplated in subsection 6.1(h) or as disclosed in the Kinross
Disclosure Letter or as contemplated in the Joint Venture Agreement,
any
Laws, or
|
| (C) |
except
as disclosed in the Kinross Disclosure Letter or as contemplated
in the
Joint Venture Agreement, any contract, agreement, licence or permit
to
which Kinross, or any of the Kinross Subsidiaries, or to the knowledge
of
Kinross, any of the Kinross Significant Interest Companies, is bound
or is
subject to or of which Kinross or any Kinross Group Company is the
beneficiary;
|
| (ii) |
except
as disclosed in the Kinross Disclosure Letter, give rise to any right
of
termination or acceleration of indebtedness, or cause any indebtedness
owing by Kinross or any of the Kinross Subsidiaries, or to the knowledge
of Kinross, any of the Kinross Significant Interest Companies, to
come due
before its stated maturity or cause any of its available credit to
cease
to be available;
|
| (iii) |
except
as disclosed in the Kinross Disclosure Letter, result in the imposition
of
any Encumbrance upon any of the property or assets of Kinross, any
of the
Kinross Subsidiaries, or to the knowledge of Kinross, any of the
Kinross
Significant Interest Companies, or restrict, hinder, impair or limit
the
ability of Kinross, any of the Kinross Subsidiaries, or to the knowledge
of Kinross, any of the Kinross Significant Interest Companies to
conduct
the business of Kinross or any of the Kinross Subsidiaries, or to
the
knowledge of Kinross, any of the Kinross Significant Interest Companies
as
and where it is now being conducted;
or
|
| (iv) |
except
as disclosed in the Kinross Disclosure Letter or the Kinross Documents
filed on SEDAR, result in any payment (including termination, severance,
unemployment compensation, change of control, “golden parachute”, bonus or
otherwise) becoming due to any employee, director or officer of Kinross
or
any Kinross Subsidiary or increase any benefits otherwise payable
under
any employee benefit plan or result in the acceleration of the time
of
payment or vesting of any such
benefits;
|
-32-
which
would, individually or in the aggregate, have a Material Adverse Effect on
Kinross. No consent, approval, order or authorization of, or declaration or
filing with, or waiver of any right of, any Governmental Entity or other person
is required to be obtained or made by Kinross, any of the Kinross Subsidiaries,
or to the knowledge of Kinross, any of the Kinross Significant Interest
Companies in connection with the execution and delivery of this Agreement or
the
consummation by Kinross of the Arrangement and the transactions contemplated
hereby other than (i) any approvals required pursuant to the Interim Order
or the Final Order, (ii) filings with and approvals required by the Securities
Authorities and stock exchanges, (iii) any consent, approval, order,
authorization, waiver, permit or filing required under any applicable Antitrust
Law and listed in the Kinross Disclosure Letter, (iv) any other consent, waiver,
permit, order, authorization, approval or filing referred to in the Kinross
Disclosure Letter, and (v) any other consent, approval, order, authorization,
declaration, filing or waiver which, if not obtained, would not, individually
or
in the aggregate, have a Material Adverse Effect on Kinross.
(d)
Directors’
Approvals.
The
directors of Kinross have unanimously authorized the entering into of this
Agreement, and the performance by Kinross of its obligations
hereunder.
(e)
Kinross
Subsidiaries.
The
only Subsidiaries of Kinross are the Kinross Subsidiaries and the only other
corporations in which Kinross owns a direct or indirect interest of greater
than
10% are the Kinross Significant Interest Companies.
(f) No
Defaults.
Except
as disclosed in the Kinross Disclosure Letter, neither Kinross nor any of the
Kinross Subsidiaries nor, to the knowledge of Kinross, any of the Kinross
Significant Interest Companies is in default under, and there exists no event,
condition or occurrence which, after notice or lapse of time or both, would
(to
the knowledge of Kinross in the case of the Kinross Significant Interest
Companies) constitute such a default under, any contract, agreement or licence
to which any of them is a party or by which any of them is bound which would,
individually or in the aggregate, have a Material Adverse Effect on
Kinross.
(g)
Absence
of Changes.
Since
September 30, 2006, except as publicly disclosed in the Kinross Documents filed
on SEDAR prior to the date hereof, or disclosed in the Kinross Disclosure
Letter:
| (i) |
Kinross
and each of the Kinross Subsidiaries and, to the knowledge of Kinross,
each of the Kinross Significant Interest Companies has conducted
its
business only in the ordinary and regular course of business consistent
with past practice;
|
| (ii) |
neither
Kinross nor any of the Kinross Group Companies has incurred or suffered
a
Material Adverse Change;
|
| (iii) |
there
has not been any acquisition or sale by Kinross, any of the Kinross
Subsidiaries, or to the knowledge of Kinross, any of the Kinross
Significant Interest Companies of any material property or assets
thereof;
|
| (iv) |
other
than in the ordinary and regular course of business consistent with
past
practice, there has not been any material increase in or modification
of
the compensation payable to or to become payable by Kinross or any
of the
Kinross Subsidiaries to any of their employees or to any of their
respective directors or officers, or any grant to any such employee,
director or officer of any material increase in severance or termination
pay or any material increase or modification of any bonus, pension,
insurance or benefit arrangement made to, for or with any of such
employees, directors or officers;
|
-33-
|
(v)
|
Kinross
has not declared or paid any dividends or made any other distribution
on
any of the Kinross Common Shares;
|
| (vi) |
Kinross
has not effected or passed any resolution to approve a split,
consolidation or reclassification of any of the outstanding Kinross
Common
Shares;
|
| (vii) |
other
than in the ordinary and regular course of business consistent with
past
practice, there has not been any material increase in or modification
of
the compensation payable to or to become payable by Kinross or any
of the
Kinross Subsidiaries to any of their respective directors or officers
or
to any director or officer of any of the Kinross Significant Interest
Companies who is a nominee of Kinross, or any grant to any such director
or officer of any material increase in severance or termination pay
or any
material increase or modification of any bonus, pension, insurance
or
benefit arrangement made to, for or with any of such directors or
officers;
|
| (viii) |
Kinross
has not effected any material change in its accounting methods,
principles
or practices; and
|
| (ix) |
other
than as contemplated in connection with the transactions contemplated
herein, Kinross has not adopted any, or materially amended any, collective
bargaining agreement, bonus, pension, profit sharing, stock purchase,
stock option or other benefit plan or shareholder rights
plan.
|
| (h) |
Financial
Matters.
|
| (i) |
The
audited consolidated financial statements of Kinross as at and for
the
fiscal years ended December 31, 2005 and December 31, 2004 (including
the
notes thereto and related management’s discussion and analysis) and
Kinross’ unaudited financial statements as at and for the nine months
ended September 30, 2006 (including the notes thereto and related
management’s discussion and analysis) were prepared in accordance with
Canadian GAAP consistently applied, and fairly present in all material
respects the consolidated financial condition of Kinross at the respective
dates indicated and the results of operations of Kinross for the
periods
covered on a consolidated basis (subject, in the case of any unaudited
interim consolidated financial statements, to normal period-end
adjustments) and reflect adequate provision for the liabilities of
Kinross
on a consolidated basis in accordance with Canadian GAAP. Neither
Kinross
nor any of the Kinross Subsidiaries has any liability or obligation
(including, without limitation, liabilities or obligations to fund
any
operations or work or exploration program, to give any guarantees
or for
Taxes), whether accrued, absolute, contingent or otherwise, not reflected
in the consolidated financial statements of Kinross for the nine
months
ended September 30, 2006, except liabilities and obligations incurred
in
the ordinary and regular course of business since September 30,
2006.
|
-34-
|
(ii)
|
The
management of Kinross has established and maintained a system of
disclosure controls and procedures designed to provide reasonable
assurance that information required to be disclosed by Kinross in
its
annual filings, interim filings or other reports filed, furnished
or
submitted by it under provincial and territorial securities legislation
is
reported within the time periods specified in such legislation, laws
and
rules.
|
| (iii) |
Neither
Kinross nor any of the Kinross Subsidiaries nor, to the knowledge
of
Kinross, any director, officer, employee, auditor, accountant or
representative of Kinross or any of the Kinross Subsidiaries has
received
or otherwise had or obtained knowledge of any complaint, allegation,
assertion or claim, whether written or oral, regarding the accounting
or
auditing practices, procedures, methodologies or methods of Kinross
or any
of the Kinross Subsidiaries or their respective internal accounting
controls, including any complaint, allegation, assertion or claim
that
Kinross or any of the Kinross Subsidiaries has engaged in questionable
accounting or auditing practices, which has not been resolved to
the
satisfaction of the Audit Committee of the Board of Directors of
Kinross.
|
(i) No
Prohibited Payments.
Neither
Kinross, a Kinross Subsidiary nor, to the knowledge of Kinross, any Kinross
Significant Interest Company or officer, director, employee, shareholder, agent
or other person acting on behalf of Kinross or any Kinross Group Company, (i)
has made any Prohibited Payments, (ii) has made any payments or provided
services that, even though not Prohibited Payments, were not legal to make
or
provide or that were not legal for the persons receiving them to receive, (iii)
has received any payments, services or gratuities that were not legal to receive
or that were not legal for the person making them to provide, (iv) has engaged
in any transactions or made or received payments that were not properly recorded
on the accounting books and records or properly disclosed on its financial
statements, or (v) has maintained any off-book bank or cash account or “slush
funds”.
(j)
Books
and Records.
The
corporate records and minute books of Kinross and, since the date each Kinross
Subsidiary was acquired or incorporated by Kinross, the corporate records and
minute books of the Kinross Subsidiaries have been maintained in accordance
with
all applicable Laws and are complete and accurate in all material respects.
The
minute books of Kinross and the Kinross Subsidiaries provided to Bema for review
are true and complete in all material respects and, except as disclosed in
the
Kinross Disclosure Letter, the minutes and documents contained therein have
not
been amended or supplemented since the time of such review. Financial books
and
records and accounts of Kinross and the Kinross Subsidiaries in all material
respects (i) have been maintained in accordance with good business practices
on
a basis consistent with prior years, (ii) are stated in reasonable detail and
accurately and fairly reflect the transactions and acquisitions and dispositions
of assets of Kinross and the Kinross Group Companies, and (iii) in the case
of
Kinross and the Kinross Subsidiaries, accurately and fairly reflect the basis
for the consolidated financial statements of Kinross.
-35-
(k)
Litigation.
There
is no complaint, claim, action, proceeding or investigation pending or in
progress or, to the knowledge of Kinross, threatened against or relating to
Kinross or any of the Kinross Subsidiaries or affecting any of their respective
properties, permits, licences or assets before any Governmental Entity which
individually or in the aggregate has a Material Adverse Effect on Kinross.
To
the knowledge of Kinross, there is no claim, action, proceeding or investigation
pending or threatened against or relating to any of the Kinross Significant
Interest Companies or affecting any of their respective properties or assets
before any Governmental Entity which individually or in the aggregate has a
Material Adverse Effect on Kinross. There is no bankruptcy, liquidation,
winding-up or other similar proceeding pending or in progress, or, to the
knowledge of Kinross, threatened against or relating to Kinross or any of the
Kinross Subsidiaries, or to the knowledge of Kinross, any of the Kinross
Significant Interest Companies, before any Governmental Entity. Neither Kinross,
any of the Kinross Subsidiaries, or to the knowledge of Kinross, any of the
Kinross Significant Interest Companies, nor any of their respective properties
or assets is subject to any outstanding judgment, fine, penalty, order, writ,
injunction or decree that involves or may involve, or restricts or may restrict,
or requires or may require, the expenditure of an amount of money in the
aggregate in excess of $10,000,000 as a condition to or a necessity for the
right or ability of Kinross or any Kinross Group Company, respectively, to
conduct its business in all material respects as it has been carried on prior
to
the date hereof, or that would materially impede the consummation of the
Arrangement and the transactions contemplated by this Agreement.
(l) Title
to Properties and Condition of Assets.
Except
as set forth in the Kinross Disclosure Letter, each of Kinross or a Kinross
Subsidiary has sufficient title (whether in fee simple or equivalent or by
means
of an exploration, retention, reconnaissance, development or mining permit,
right or licence or similar), free and clear of any title defect or Encumbrance,
to its mineral projects with proven and probable reserves (other than property
as to which it is a lessee, in which case it has a valid leasehold interest),
such properties being described in Schedule D hereto, except for such defects
in
title or Encumbrances that, individually or in the aggregate, do not have a
Material Adverse Effect on Kinross. All real and tangible personal property
of
Kinross and each Kinross Group Company is in generally good repair and is
operational and usable in the manner in which it is currently being utilized,
subject to normal wear and tear and technical obsolescence, repair or
replacement, except for such property whose failure to be in such condition
does
not have a Material Adverse Effect on Kinross. All required permits or
registrations necessary to perfect title in and to such assets have been carried
out in compliance with applicable Law and are in full force and effect, except
for any non-compliance that, individually or in the aggregate, does not have
a
Material Adverse Effect on Kinross.
(m)
Insurance.
Kinross
and the Kinross Subsidiaries maintain policies of insurance in amounts and
in
respect of such risks as are normal and usual for companies of a similar size
operating in the mining industry and as required in accordance with their
respective licences and permits, and such policies are in full force and effect
as of the date hereof.
(n)
Environmental.
Except
as to the matters described in the Kinross Disclosure Letter, since the date
Kinross acquired each of the Kinross Group Companies there has been no
Environmental Condition, and in respect of each such Kinross Group Company,
to
the knowledge of Kinross, there exists no Environmental Condition, which,
individually or in the aggregate, has a Material Adverse Effect on Kinross.
Except as to the matters described in the Kinross Disclosure Letter, Kinross
has
received no notice, directive, advisory from any Governmental Entity of any
Environmental Condition that would have a Material Adverse Effect on
Kinross.
-36-
Each
of
the Kinross Group Companies maintains sufficient financial reserves, including,
but not limited to, financial assurance required by Governmental Entities
pursuant to Environmental Approvals, sufficient to meet the obligations of
such
Kinross Group Company in respect of reclamation, remediation, closure and
post-closure obligations relating to the assets and operations of such Kinross
Group Company.
Except
as
to matters described in the Kinross Disclosure Letter, each of the Kinross
Group
Companies has all Environmental Approvals required pursuant to Environmental
Laws in respect of the current operations of such Kinross Group Company and
is
in compliance with such Environmental Approvals except where any non-compliance
would not have a Material Adverse Effect on Kinross.
(o)
Tax
Matters.
Except
as disclosed in the Kinross Disclosure Letter, Kinross and the Kinross
Subsidiaries have filed or caused to be filed and will continue to file and
cause to be filed, in a timely manner all Tax Returns required to be filed
by
them (all of which Tax Returns were correct and complete in all material
respects and no material fact has been omitted therefrom) and have paid,
collected, withheld or remitted, or caused to be paid, collected, withheld
or
remitted, all Taxes that are due and payable, collectible and remittable. No
extension of time in which to file any Tax Returns is in effect. Kinross has
provided adequate accruals in accordance with Canadian GAAP in its published
consolidated financial statements for any Taxes for the period covered by such
financial statements which have not been paid, whether or not shown as being
due
on any Tax Returns. Since such publication date, no material liability for
Taxes
not reflected in such consolidated financial statements has been incurred or
accrued by Kinross or the Kinross Subsidiaries other than in the ordinary course
of business. No lien for Taxes has been filed or exists other than for Taxes
not
yet due and payable.
Except
as
disclosed in the Kinross Disclosure Letter, there are no reassessments of Taxes
in respect of Kinross or the Kinross Subsidiaries that have been issued and
are
outstanding and there are no outstanding issues which have been raised and
communicated to Kinross or any Kinross Subsidiary by any Governmental Entity
for
any taxation year in respect of which a Tax Return of Kinross or any Kinross
Subsidiary has been audited. Except as disclosed in the Kinross Disclosure
Letter, no Governmental Entity has challenged, disputed or questioned Kinross
or
any Kinross Subsidiary in respect of Taxes or Tax Returns. Except as disclosed
in the Kinross Disclosure Letter, none of Kinross or any Kinross Subsidiary
is
negotiating any draft assessment or reassessment with any Governmental Entity.
Except as disclosed in the Kinross Disclosure Letter, Kinross is not aware
of
any contingent liabilities for Taxes or any grounds for an assessment or
reassessment of Kinross or any Kinross Subsidiary, including, without
limitation, unreported benefits conferred on any shareholder, aggressive
treatment of income, expenses, credits or other claims for deduction under
any
return or notice other than as disclosed in the Financial Statements. Except
as
disclosed in the Kinross Disclosure Letter, neither Kinross nor any Kinross
Subsidiary has received any indication from any Governmental Entity that an
assessment or reassessment of Kinross or any Kinross Subsidiary is proposed
in
respect of any Taxes, regardless of its merits. Except as disclosed in the
Kinross Disclosure Letter, neither Kinross nor any Kinross Subsidiary has
executed or filed with any Governmental Entity any agreement or waiver extending
the period for assessment, reassessment or collection of any Taxes. All taxation
years up to and including the taxation year ended 1992 are considered closed
by
Canadian federal and provincial governmental bodies for the purposes of all
Taxes.
-37-
Kinross
and each Kinross Subsidiary has withheld from each payment made to any of its
present or former employees, officers and directors, and to all other persons
all amounts required by law to be withheld, and furthermore, has remitted such
withheld amounts within the prescribed periods to the appropriate Governmental
Entity. Kinross and each Kinross Subsidiary has remitted all Canada Pension
Plan
contributions, provincial pension plan contributions, employment insurance
premiums, employer health taxes and other Taxes payable by it in respect of
its
employees and has remitted such amounts to the proper Governmental Entity within
the time required under the applicable legislation. Kinross and each Kinross
Subsidiary has charged, collected and remitted on a timely basis all Taxes
as
required under applicable legislation on any sale, supply or delivery
whatsoever, made by them.
Kinross
and each Kinross Subsidiary will not at any time be deemed to have a capital
gain pursuant to subsection 80.03(2) of the Tax Act or any analogous provincial
legislative provision as a result of any transaction or event taking place
in
any taxation year ending on or before the Effective Date.
There
are
no circumstances existing which could result in the application of section
78 or
160 of the Tax Act or any equivalent provincial provision to Kinross or any
Kinross Subsidiary.
Neither
Kinross nor any Kinross Subsidiary has participated, directly or through a
partnership, in a transaction or series of transactions contemplated in
subsection 247(2) of the Tax Act or any analogous provincial legislative
provision.
In
respect of the Kinross Subsidiaries, no transaction has been entered into
without a valid business purpose.
(p)
Reporting
Status.
Kinross
is a reporting issuer or its equivalent in each of the provinces of Canada.
Kinross is subject to the filing obligations imposed by section 13 of the 1934
Act. The Kinross Common Shares are listed on the TSX and the NYSE.
(q)
Reports.
Kinross
has filed or furnished, as applicable, with the Securities Authorities, stock
exchanges and all applicable self-regulatory authorities all forms, reports,
schedules, statements, certifications, material change reports and other
documents required to be filed or furnished by it (such forms, reports,
schedules, statements, certifications and other documents, including any
financial statements or other documents, including any schedules included
therein, are referred to as the “Kinross Documents”). The Kinross Documents, at
the time filed or furnished, (a) did not contain any misrepresentation and
(b)
complied in all material respects with the requirements of applicable securities
legislation and the rules, policies and instruments of all Securities
Authorities having jurisdiction over Kinross. As of their respective dates
(or,
if amended prior to the date hereof, as of the date of such amendment) the
Kinross Documents filed or furnished with the SEC did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of
the
circumstances in which they were made, not misleading. Kinross has not filed
any
confidential material change or other report or other document with any
Securities Authorities or stock exchange or other self-regulatory authority
which at the date hereof remains confidential.
-38-
(r)
Mineral
Reserves and Resources.
The
estimated proven and probable mineral reserves and estimated, measured,
indicated and inferred mineral resources disclosed in the Kinross Documents
filed on SEDAR as of year-end December 31, 2005 have been prepared and
disclosed in all material respects in accordance with National Instrument
43-101. There has been no material reduction (other than as a result of
operations in the ordinary course of business) in the aggregate amount of
estimated mineral reserves, estimated mineral resources or mineralized material
of Kinross and its subsidiaries and Kinross’ material joint ventures, taken as a
whole, from the amounts disclosed in the Kinross Documents filed on
SEDAR.
(s)
Compliance
with Laws and Exchange Requirements.
Kinross
and, since the date Kinross acquired each of the Kinross Subsidiaries, the
Kinross Subsidiaries (A) have complied with and are not in violation of any
applicable Laws other than such non-compliance or violations which would not,
individually or in the aggregate, have a Material Adverse Effect on Kinross
and
(B) have complied and are in compliance, in all material respects, with any
applicable listing and corporate governance rules and regulations of the TSX
and
NYSE. To the knowledge of Kinross, the Kinross Subsidiaries and the Kinross
Significant Interest Companies (X) have complied with and are not in violation
of any applicable Laws other than such non-compliance or violations which would
not, individually or in the aggregate, have a Material Adverse Effect on Kinross
and (Y) have complied and are in compliance, in all material respects, with
any
applicable listing and corporate governance rules and regulations of the TSX
and
NYSE.
(t)
No
Cease Trade.
Kinross
is not subject to any cease trade or other order of any applicable stock
exchange or Securities Authority and, to the knowledge of Kinross, no
investigation or other proceedings involving Kinross which may operate to
prevent or restrict trading of any securities of Kinross are currently in
progress or pending before any applicable stock exchange or Securities
Authority.
(u)
No
Option on Assets.
Except
as disclosed in the Kinross Disclosure Letter, no person has any agreement
or
option or any right or privilege capable of becoming an agreement or option
for
the purchase from Kinross or the Kinross Subsidiaries of any of the material
assets of Kinross or any of the Kinross Subsidiaries.
(v)
Certain
Contracts.
Except
as disclosed in the Kinross Disclosure Letter, neither Kinross, nor to the
knowledge of Kinross any of the Kinross Subsidiaries is, nor since the date
Kinross acquired each of the Kinross Subsidiaries has any Kinross Subsidiary
become, a party to or bound by any non-competition agreement or any other
agreement, obligation, judgment, injunction, order or decree which purports
to
(i) limit the manner or the localities in which all or any material portion
of
the business of Kinross or the Kinross Subsidiaries are conducted, (ii) limit
any material business practice of Kinross or any Kinross Subsidiary in any
material respect, or (iii) restrict any acquisition or disposition of any
material property by Kinross or any Kinross Subsidiary in any material
respect.
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(w)
Foreign
Private Issuer.
As of
the date hereof, Kinross is a “foreign private issuer” as defined in Rule 405
under the 1933 Act.
(x) Investment
Company Status.
Kinross
is not an “investment company”, as such term is defined under the 0000
Xxx.
(y)
Shares.
The
Kinross Common Shares to be issued pursuant to the transactions contemplated
herein will, upon issue, be issued as fully-paid and non-assessable
shares.
(z)
Certain
Securities Law Matters.
The
Kinross Common Shares to be issued in connection with the transactions
contemplated herein, including the Kinross Common Shares to be issued upon
the
exercise of the Bema Options, the Bema Warrants and the Bema Convertible
Debentures will not be subject to any statutory hold or restricted period under
the securities legislation of any province or territory of Canada and, subject
to restrictions contained therein in respect of “control distributions”, will be
freely tradable within Canada by the holders thereof. The Kinross Common Shares
to be issued in connection with the Arrangement to Bema Shareholders will not
bear any 1933 Act restrictive legend.
(aa) Full
Disclosure.
Kinross
has made available to Bema through Kinross Documents filed on SEDAR and
otherwise, all material information, including financial, operational and other
information required by National Instrument 43-101, in respect of the properties
listed in Schedule D required by National Instrument 43-101 and all such
information as made available to Bema was true and correct at the date of filing
in all material respects and no material fact or facts were omitted therefrom
which would make such information misleading.
(bb) No
Broker’s Commission.
Kinross
has not entered into any agreement that would entitle any person to any valid
claim against Kinross for a broker’s commission, finder’s fee or any like
payment in respect of the Arrangement or any other matter contemplated by this
Agreement except for the financial advisory fees disclosed in the Kinross
Disclosure Letter.
(cc)
Investment
Canada.
Kinross
is not a “non-Canadian” within the meaning of the Investment
Canada Act
(Canada).
(dd) Reorganization.
Neither
Kinross nor any affiliate of Kinross has taken or agreed to take any action
not
specified in this Agreement or the agreements referred to herein (without regard
to any action taken or agreed to be taken by Bema or any affiliate of Bema)
or
knows of any circumstances that would prevent the Arrangement from qualifying
as
a reorganization within the meaning of Section 368(a) of the U.S. Tax
Code.
4.2 Survival
of Representations and Warranties
The
representations and warranties of Kinross contained in this Agreement shall
survive the execution and delivery of this Agreement and shall terminate on
the
earlier of the termination date of this Agreement in accordance with its terms
and the Effective Date. Any investigation by Bema or its advisors shall not
mitigate, diminish or affect the representations and warranties of Kinross
made
hereunder.
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ARTICLE
V
COVENANTS
| 5.1 |
Covenants
of Bema
|
Bema
hereby covenants and agrees with Kinross as follows:
(a) Interim
Order.
As soon
as practicable, Bema shall file, proceed with and diligently prosecute an
application to the Court for the Interim Order as provided in Section 2.2 hereof
on terms and conditions acceptable to Bema and Kinross, acting
reasonably.
(b)
Bema
Meeting.
In a
timely and expeditious manner, Bema shall:
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(i)
|
forthwith
carry out such terms of the Interim Order as are required under the
terms
thereof to be carried out by Bema;
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(ii)
|
prepare
in consultation with Kinross, and file the Bema Proxy Circular, together
with any other documents required by applicable Laws and the rules
and
policies of any applicable stock exchange in connection with the
approval
of the Arrangement and the transactions contemplated herein, in all
jurisdictions where the Bema Proxy Circular is required to be filed
and
mail the Bema Proxy Circular, as ordered by the Interim Order and
in
accordance with all applicable Laws, in and to all jurisdictions
where the
Bema Proxy Circular is required to be mailed, complying in all material
respects with all applicable Laws on the date of the mailing thereof
and
shall ensure that the Bema Proxy Circular does not contain any
misrepresentation (other than with respect to any information relating
to
and provided by Kinross). Bema shall provide Kinross with a reasonable
opportunity to review and comment on the Bema Proxy Circular and
all such
other documents and give reasonable consideration to such comments.
Without limiting the generality of the foregoing, Bema shall ensure
that
the Bema Proxy Circular complies with National Instrument 51-102
“Continuous Disclosure Requirements” and Form 51-102F5 thereunder adopted
by the Canadian Securities Administrators and provides Bema Shareholders
with information in sufficient detail to permit them to form a reasoned
judgment concerning the matters to be placed before them at the Bema
Meeting;
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(iii)
|
use
its commercially reasonable efforts to convene the Bema Meeting as
provided in the Interim Order on January 30, 2007 or such later date
as
may be mutually agreed upon with Kinross, but in any event hold the
Bema
Meeting no later than March 23,
2007;
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(iv)
|
with
the assistance of Kinross, diligently do all such acts and things
as may
be necessary to comply, in all material respects, with National Instrument
54-101 of the Canadian Securities Administrators in relation to the
Bema
Meeting;
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(v)
|
provide
notice to Kinross of the Bema Meeting and allow representatives of
Kinross
to attend the Bema Meeting;
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(vi)
|
conduct
the Bema Meeting in accordance with the Interim Order, the CBCA,
the
by-laws of Bema and as otherwise required by applicable Laws;
and
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(vii)
|
take
all such actions as may be required under the CBCA in connection
with the
transactions contemplated by this Agreement and the Plan of
Arrangement.
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(c) Adjournment.
Bema
shall not adjourn, postpone or cancel the Bema Meeting (or propose to do so),
except (i) if a quorum is not present at the Bema Meeting, (ii) if required
by
applicable Laws, (iii) if required by the Bema Shareholders, (iv) if otherwise
agreed with Kinross in writing, or (v) as contemplated by Sections 6.5 and
7.2
hereof.
(d) Dissent
Rights.
Bema
shall provide Kinross with a copy of any purported exercise of the Dissent
Rights and written communications with such Bema Shareholder purportedly
exercising such Dissent Rights, and shall not settle or compromise any action
brought by any present, former or purported holder of any of its securities
in
connection with the transactions contemplated by this Agreement, including
the
Arrangement, without the prior consent of Kinross.
(e) Amendments
to Bema Proxy Circular.
In a
timely and expeditious manner, Bema shall prepare (in consultation with Kinross)
and file amendments or supplements to the Bema Proxy Circular (which amendments
or supplements shall be in a form satisfactory to Kinross, acting reasonably)
required by applicable Laws or as otherwise agreed between Bema and Kinross
with
respect to the Bema Meeting and mail such amendments or supplements, as required
by the Interim Order and in accordance with all applicable Laws, in and to
all
jurisdictions where such amendments or supplements are required to be mailed,
complying in all material respects with all applicable Laws on the date of
the
mailing thereof.
(f) Final
Order.
Subject
to the approval of the Arrangement at the Bema Meeting in accordance with the
provisions of the Interim Order and the receipt of all other necessary approvals
of Governmental Entities and third parties, Bema shall forthwith file, proceed
with and diligently prosecute an application for the Final Order, which
application shall be in form and substance satisfactory to the Parties hereto,
acting reasonably.
(g) Filing
Final Order.
Bema
shall forthwith carry out the terms of the Interim Order and the Final Order
and, following the issue of the Final Order and the satisfaction, fulfillment
or
waiver of the conditions in favour of Bema and Kinross set forth herein, at
a
time and on a date to be agreed by Kinross and Bema which date shall occur
not
later than five Business Days after the later of: (i) receiving the Final Order,
(ii) receiving the approval of the Federal Anti-Monopoly Service of the Russian
Federation in connection with the Arrangement, and (iii) the satisfaction or
waiver of the condition in subsection 6.2(h) hereof, or such other date as
may
be agreed to by the Parties, file the Final Order and any other required
documents with the Director, as provided in Section 2.3 hereof, in order for
the
Arrangement to become effective.
(h) Solicitation
of Proxies.
Subject
to the terms of this Agreement, Bema shall (i) take all lawful action to solicit
proxies in favour of the Arrangement and the transactions contemplated herein,
including the appointment of a proxy solicitation agent; (ii) recommend to
all
Bema Shareholders that they vote in favour of the Arrangement and the
transactions contemplated herein; (iii) publicly reconfirm such recommendation
upon the reasonable request of Kinross; and (iv) not withdraw, modify or qualify
(or publicly propose to or publicly state that it intends to withdraw, modify
or
qualify) in any manner adverse to Kinross such recommendation except as
explicitly permitted in subsection 7.2(a) hereof.
-42-
(i) Proceedings.
In a
timely and expeditious manner, Bema and the Bema Subsidiaries shall take all
such actions and do all such acts and things as are contemplated herein or
as
are specified in the Interim Order, the Plan of Arrangement and the Final Order
to be taken or done by Bema and the Bema Subsidiaries, as
applicable.
(j) Copy
of Documents.
Except
for proxies and other non-substantive communications, Bema shall furnish
promptly to Kinross a copy of each notice, report, schedule or other document
or
communication delivered, filed or received by Bema in connection with this
Agreement, the transactions contemplated herein or the Bema Meeting or any
other
meeting at which all Bema Shareholders are entitled to attend (including all
communications by Bema’s proxy solicitation agent), any filings made under any
applicable Laws and any dealings or communications with any Governmental Entity,
Securities Authority or stock exchange in connection with, or in any way
affecting, the transactions contemplated by this Agreement.
(k) Usual
Business.
Other
than in connection with completing the transactions contemplated herein or
as
contemplated in the B2Gold Purchase and Sale Agreement or the Joint Venture
Agreement or as disclosed in the Bema Disclosure Letter, Bema shall, and shall
cause the Bema Subsidiaries to, and shall use its reasonable commercial efforts
to cause the Bema Significant Interest Companies to, conduct business only
in,
and not take any action except in, the usual, ordinary and regular course of
business and consistent with past practices.
(l) Certain
Actions Prohibited.
Other
than as disclosed in the Bema Disclosure Letter or in contemplation of or as
required to give effect to the transactions contemplated herein or in the B2Gold
Purchase and Sale Agreement or the Joint Venture Agreement, Bema shall not
(and
shall ensure that the Bema Subsidiaries do not), without the prior written
consent of Kinross which consent shall not be unreasonably withheld or delayed,
directly or indirectly do or permit to occur any of the following:
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(i)
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issue,
sell, pledge, lease, contribute capital, dispose of, encumber or
create
any Encumbrance on or agree to issue, sell, pledge, lease, contribute
capital, dispose of, or encumber or create any Encumbrance on, or
permit a
Bema Subsidiary to issue, sell, pledge, lease, contribute capital,
dispose
of, encumber or create any Encumbrance on or agree to issue, sell,
pledge,
lease, contribute capital, dispose of, or encumber or create any
Encumbrance on, any shares of, or any options, warrants, calls, conversion
privileges or rights of any kind to acquire any shares of, Bema or
any of
the Bema Subsidiaries or any of the shares representing Bema’s interest in
the Bema Significant Interest Companies, other than the issue of
Bema
Common Shares pursuant to the exercise of the Bema Options or the
Bema
Warrants, or upon conversion of the Bema Convertible Debentures,
issued
and outstanding on the date hereof in accordance with their terms
as of
the date hereof;
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(ii)
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other
than in the ordinary and regular course of business consistent with
past
practice, in respect of rights, properties or assets that are not,
either
individually or in the aggregate, material to Bema, or pursuant to
obligations or rights disclosed in the Bema Disclosure Letter (to
the
extent such rights have been exercised or initiated by other persons),
sell, lease or otherwise dispose of, or permit any of the Bema
Subsidiaries to sell, lease or otherwise dispose of, any material
property
or assets or enter into any agreement or commitment in respect of
any of
the foregoing;
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(iii)
|
amend
or propose to amend the articles or by-laws (or their equivalent)
of Bema
or any of the Bema Subsidiaries or any of the terms of the Bema Options,
the Bema Warrants or the Bema Convertible Debentures, in each case
as they
exist at the date of this
Agreement;
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(iv)
|
split,
combine or reclassify any of the shares of Bema or any of the Bema
Subsidiaries, or declare, set aside or pay any dividend or other
distribution payable in cash, securities, property or otherwise with
respect to the shares of Bema;
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(v)
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redeem,
purchase or offer to purchase or permit any of the Bema Subsidiaries
to
redeem, purchase or offer to purchase, any Bema Common Shares and,
other
than pursuant to the Bema Share Option Plan, any options or obligations
or
rights under existing contracts, agreements and
commitments;
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(vi)
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reorganize,
amalgamate or merge Bema or any of the Bema Subsidiaries with any
other
person other than another Bema
Subsidiary;
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(vii)
|
acquire
or agree to acquire any corporation or other entity (or material
interest
therein) or division of any corporation or other
entity;
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(viii)
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(A)
satisfy or settle any claims or disputes which are, individually
or in the
aggregate, in an amount in excess of $5,000,000 or which constitute
a
claim between Bema and a Bema Subsidiary or between Bema Subsidiaries;
(B)
relinquish any contractual rights which are, individually or in the
aggregate, in an amount in excess of $5,000,000; or (C) enter into
any
interest rate, currency or commodity swaps, xxxxxx, caps, collars,
forward
sales or other similar financial instruments other than in the ordinary
and regular course of business and not for speculative
purposes;
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(ix)
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incur,
authorize, agree or otherwise become committed to provide guarantees
for
borrowed money or incur, authorize, agree or otherwise become committed
for any indebtedness in excess of $20,000,000 in the aggregate, or
permit
any of the Bema Subsidiaries to incur, authorize, agree or otherwise
become committed to provide guarantees for borrowed money or incur,
authorize, agree or otherwise become committed for any
indebtedness;
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(x)
|
except
as required by Canadian GAAP, any other generally accepted accounting
principle to which any Bema Group Company may be subject or any applicable
Laws, make any changes to the existing accounting practices of Bema
or
make any material tax election inconsistent with past practice;
or
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-44-
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(xi)
|
agree
or commit to do any of the
foregoing.
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(m)
Employment
Arrangements.
Without
the prior written consent of Kinross, Bema shall not, and shall cause the Bema
Subsidiaries not to, other than in the ordinary and regular course of business
consistent with past practice, or pursuant to existing employment agreements,
termination, compensation or other arrangements or policies or pursuant to
any
Employee Plans or as required by applicable Laws, enter into or modify any
employment, compensation, severance, collective bargaining or similar agreement,
pension, retirement or employee benefits plan, agreement, policy or arrangement
with, or grant any bonus, salary increase, option to purchase shares, phantom
stock option, pension or supplemental pension benefit, profit sharing, tax
equalization payment, retirement allowance, deferred compensation, incentive
compensation, severance, change of control or termination pay to, or make any
loan to, any Employee, officer or director of Bema or any of the Bema
Subsidiaries or any officer or director of any of the Bema Significant Interest
Companies who is a nominee of Bema.
(n) Insurance.
Bema
shall use its reasonable commercial efforts, and shall cause the Bema
Subsidiaries to use their reasonable commercial efforts, and shall use its
reasonable commercial efforts to cause the Bema Significant Interest Companies
to use their reasonable commercial efforts, to cause their respective current
insurance (or reinsurance) policies not to be cancelled or terminated or any
of
the coverage thereunder to lapse, unless simultaneously with such termination,
cancellation or lapse, replacement policies underwritten by insurance and
re-insurance companies of internationally recognized standing providing coverage
equal to or greater than the coverage under the cancelled, terminated or lapsed
policies for substantially similar premiums are in full force and
effect.
(o) Certain
Actions.
Bema
shall:
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(i)
|
not
take any action, shall cause the Bema Subsidiaries to not take any
action,
and shall use its reasonable commercial efforts to cause the Bema
Significant Interest Companies to not take any action, that would
interfere with or be inconsistent with the completion of the Arrangement
and the transactions contemplated by this Agreement or would render,
or
that could reasonably be expected to render, any representation or
warranty made by Bema in this Agreement untrue or inaccurate at any
time
prior to the Effective Time if then made;
and
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(ii)
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promptly
notify Kinross of (A) any Material Adverse Change or Material Adverse
Effect, or any change, event, occurrence or state of facts which
could
reasonably be expected to become a Material Adverse Change or to
have a
Material Adverse Effect, in respect of Bema, (B) any material Governmental
Entity or third person complaints, investigations or hearings (or
communications indicating that the same may be contemplated), (C)
any
breach by Bema of any covenant or agreement contained in this Agreement,
(D) any event occurring subsequent to the date hereof that would
render
any representation or warranty of Bema contained in this Agreement,
if
made on or as of the date of such event or the Effective Date, to
be
untrue or inaccurate in any material respect, and (E) any
misrepresentation in the Bema Proxy Circular or any circumstance
pursuant
to which Bema would have to amend or supplement the Bema Proxy
Circular.
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(p) No
Compromise.
Bema
shall not, and shall cause the Bema Subsidiaries not to, settle or compromise
any claim brought by any present, former or purported holder of any securities
of Bema in connection with the transactions contemplated by this Agreement
prior
to the Effective Time without the prior written consent of Kinross, such consent
not to be unreasonably withheld or delayed.
(q) Contractual
Obligations.
Except
in the ordinary and regular course of business and consistent with past
practice, and other than as required by applicable Laws, Bema shall not, and
shall cause the Bema Subsidiaries not to, and shall use its reasonable
commercial efforts to cause the Bema Significant Interest Companies not to,
enter into, renew or modify in any respect any material contract, agreement,
lease, commitment or arrangement to which Bema or any of the Bema Group
Companies is a party or by which any of them is bound, except insofar as may
be
necessary to permit or provide for the completion of the Arrangement or the
transactions contemplated by the B2Gold Purchase and Sale Agreement or the
Joint
Venture Agreement. Without limiting the generality of the foregoing, Bema shall
not, and shall cause the Bema Subsidiaries not to, exercise its right of first
refusal or refrain from doing so, or enter into any agreement or provide any
consent or waiver in connection with any transaction or proposed transaction
involving the purchase and sale of shares of Chukotka Mining and Geological
Company (“CMGC”) without the prior written consent of Kinross and Bema shall
notify Kinross promptly (and in any event within 24 hours) of any such proposed
transaction, first orally and then in writing. In the event that Bema or any
Bema Subsidiary has a right or opportunity to acquire shares of CMGC, Bema
shall
notify Kinross promptly (and in any event within 24 hours) of any such event,
first orally and then in writing, and, if requested by Kinross, use all
commercially reasonable efforts to obtain financing and acquire such shares.
Notwithstanding any of the foregoing, Bema shall be entitled to refrain or
cause
any Bema Subsidiary to refrain from exercising the right of first refusal or
enter into any agreement or provide any consent or waiver in connection with
any
transaction involving the purchase and sale of shares of CMGC (and shall not
be
required to obtain any financing and acquire such shares) in respect of the
party and the transaction described in the notice of sale disclosed in the
Bema
Disclosure Letter.
(r) Satisfaction
of Conditions.
Subject
to Section 7.2 hereof, Bema shall use all commercially reasonable efforts
to satisfy, or cause to be satisfied, all of the conditions precedent to its
obligations to the extent that the same is within its control and to take,
or
cause to be taken, all other action and to do, or cause to be done, all other
things necessary, proper or advisable under all applicable Laws to complete
the
transactions contemplated by this Agreement, including using its commercially
reasonable efforts to:
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(i)
|
obtain
the Bema Required Vote;
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(ii)
|
obtain
the regulatory approvals set out in the Bema Disclosure Letter and
all
other consents, approvals and authorizations as are required to be
obtained by Bema or any of the Bema Group Companies under any applicable
Laws or from any Governmental Entity which would, if not obtained,
materially impede the completion of the Arrangement and the transactions
contemplated herein or have a Material Adverse Effect on
Bema;
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(iii)
|
effect
all necessary registrations, filings and submissions of information
requested by Governmental Entities required to be effected by Bema
or any
of the Bema Group Companies in connection with the transactions
contemplated by this Agreement and participate and appear in any
proceedings of any Party hereto before any Governmental
Entity;
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(iv)
|
oppose,
lift or rescind any injunction or restraining order or other order
or
action challenging or affecting this Agreement, the transactions
contemplated hereby or seeking to stop, or otherwise adversely affecting
the ability of the Parties hereto to consummate, the transactions
contemplated hereby;
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(v)
|
fulfill
all conditions and satisfy all provisions of this Agreement required
to be
fulfilled or satisfied by Bema; and
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(vi)
|
cooperate
with Kinross in connection with the performance by it of its obligations
hereunder, provided however that the foregoing shall not be construed
to
obligate Bema to pay or cause to be paid any monies or to cause any
liability to be incurred to cause such performance to
occur.
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(s) Refrain
from Certain Actions.
Subject
to Section 7.2 hereof, Bema shall not take any action, refrain from taking
any action (subject to commercially reasonable efforts), or permit any action
to
be taken or not taken, inconsistent with the provisions of this Agreement or
which could reasonably be expected to materially impede the completion of the
Arrangement and the transactions contemplated hereby or which could have a
Material Adverse Effect on Bema, provided that where Bema is required to take
any such action or refrain from taking such action (subject to commercially
reasonable efforts) as a result of this Agreement, it shall immediately notify
Kinross in writing of such circumstances.
(t) Keep
Fully Informed.
Bema
shall, in all material respects, conduct itself so as to keep Kinross fully
informed as to the material decisions or actions required or required to be
made
with respect to the operation of its business.
(u) Cooperation.
Bema
shall make, or cooperate as necessary in the making of, all necessary filings
and applications under all applicable Laws required in connection with the
transactions contemplated hereby and take all reasonable action necessary to
be
in compliance with such Laws.
(v) Representations.
Bema
shall use its commercially reasonable efforts to conduct its affairs and to
cause the Bema Subsidiaries to conduct their affairs so that all of the
representations and warranties of Bema contained herein shall be true and
correct on and as of the Effective Date as if made on and as of such
date.
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(w) Information.
Bema
shall continue to make available and cause to be made available to Kinross
and
the agents and advisors thereto all documents, agreements, corporate records
and
minute books as may be necessary to enable Kinross to effect a thorough
examination of Bema and the Bema Group Companies and the business, properties
and financial status thereof and shall cooperate with Kinross in securing access
for Kinross to any documents, agreements, corporate records or minute books
not
in the possession or under the control of Bema. Subject to applicable Laws,
upon
reasonable notice, Bema shall, and shall cause the Bema Subsidiaries to, and
shall use its reasonable commercial efforts to cause the Bema Significant
Interest Companies to, afford officers, employees, counsel, accountants and
other authorized representatives and advisors of Kinross reasonable access,
during normal business hours from the date hereof until the earlier of the
Effective Time or the termination of this Agreement, to the properties, books,
contracts and records as well as to the management personnel of Bema and the
Bema Group Companies, and, during such period, Bema shall, and shall cause
the
Bema Subsidiaries to, and shall use its reasonable commercial efforts to cause
the Bema Significant Interest Companies to, furnish promptly to Kinross all
information concerning the business, properties and personnel of Bema and the
Bema Group Companies as Kinross may reasonably request provided however that
the
disclosure of personal information is done in compliance with applicable Laws
relating to privacy and does not include disclosure of personnel files or
medical information.
(x) Material
for Inclusion in U.S. Securities Filings.
In the
event that Kinross files a registration statement with the SEC pursuant to
Section 5.2(s) hereof, then Bema shall use its commercially reasonable efforts
to take all necessary action to permit Kinross to file such registration
statement, including providing audited annual financial statements and unaudited
interim financial statements, company and shareholder information and any other
required material, in each case as Kinross may reasonably request, in order
to
comply with applicable Laws and the rules of the SEC. Bema shall use its
commercially reasonable efforts to cause its independent auditor to deliver
to
Kinross for inclusion in the registration statement an audit opinion covering
any audited financial statements of Bema that are required to be included in
the
registration statement by Regulation S-X or other applicable Laws or rules
of
the SEC. Bema shall further use its commercially reasonable efforts to cause
its
independent auditor and any other of its advisors providing any expert
information for inclusion in the registration statement to furnish to Kinross
a
consent permitting such inclusion and the identification in the registration
statement of such advisor. For the purposes of this paragraph, “expert
information” is such material as is described in Section 11(a)(4) of the 0000
Xxx.
(y) Bema
Warrants and Bema Convertible Debentures.
Bema
shall take all corporate action necessary and within its control, if any, and
provide any required notice to holders of the Bema Warrants and the Bema
Convertible Debentures to ensure that on the Effective Date all of the
outstanding Bema Warrants and Bema Convertible Debentures provide upon exercise
or conversion thereof only for the issuance of the Share
Consideration.
(z) Closing
Documents.
Bema
shall execute and deliver, or cause to be executed and delivered, at the closing
of the Arrangement and the transactions contemplated hereby such customary
agreements, certificates, resolutions, opinions and other closing documents
as
may be reasonably requested by Kinross.
-48-
(aa) Resignations.
Subject
to confirmation that insurance coverage is maintained as contemplated by
subsection 5.2(m), Bema shall obtain and deliver to Kinross at the
Effective Time evidence reasonably satisfactory to Kinross of the resignation,
effective as of the Effective Time, of those directors and officers of Bema
and
the Bema Subsidiaries designated by Kinross to Bema prior to the Effective
Time.
(bb) Pre-Acquisition
Reorganizations.
Bema
agrees that, upon request by Kinross, Bema shall, and shall cause each of the
Bema Subsidiaries to, at the expense of Kinross, use its commercially reasonable
efforts to (i) transfer all of the shares of EAGC Ventures Corp. to Bema
Vendorco and effect such other reorganizations of its business, operations
and
assets and the integration of other affiliated businesses prior to the Effective
Date as Purchaser may request, acting reasonably (each a “Pre-Acquisition
Reorganization”) provided that the Pre-Acquisition Reorganization is not
prejudicial to Bema, any of the Bema Subsidiaries or the Bema Shareholders
as a
whole (provided further that for purposes of this provision the fact that such
Pre-Acquisition Reorganization might adversely affect the ability of the
Arrangement to qualify as a reorganization under Section 368(a) of the U.S.
Tax
Code shall not be considered to be prejudicial to the Bema Shareholders) and
(ii) cooperate with Kinross and its advisors to determine the nature of the
Pre-Acquisition Reorganizations that might be undertaken and the manner in
which
they would most effectively be undertaken. Notwithstanding the foregoing, Bema
shall have no obligation to, or to cause any Bema Subsidiary to, effect or
cooperate in the determination of any Pre-Acquisition Reorganization
not specified
in this Agreement or the agreements referred to herein that
Bema
reasonably believes may prevent the Arrangement from qualifying as a
reorganization under Section 368(a) of the U.S. Tax Code. Kinross acknowledges
and agrees that the Pre-Acquisition Reorganizations shall not (A) delay or
prevent consummation of the Arrangement and the transactions contemplated herein
(including by giving rise to litigation by third parties), (B) be considered
in
determining whether a representation or warranty of Bema hereunder has been
breached, it being acknowledged by Kinross that these actions could require
the
consent of third parties under applicable contracts or (C) prevent the
Arrangement from qualifying as a reorganization under Section 368(a) of the
U.S.
Tax Code (for clarification, any Pre-Acquisition Reorganization contemplated
by
this Agreement shall not prevent the Arrangement from so qualifying). Kinross
shall provide written notice to Bema of any proposed Pre-Acquisition
Reorganization at least 20 days prior to the Effective Time. Upon receipt of
such notice, Kinross and Bema shall, at the expense of Kinross, work
cooperatively and use commercially reasonable efforts to prepare prior to the
Effective Time all documentation necessary and do such other acts and things
as
are necessary to give effect to such Pre-Acquisition Reorganizations, including
an amendment to this Agreement or the Plan of Arrangement. The Parties shall
seek to have any such Pre-Acquisition Reorganization made effective as of the
last moment of the day ending immediately prior to the Effective Date (but
after
Kinross shall have waived or confirmed that all conditions to Closing have
been
satisfied).
Without
limiting the generality of the foregoing, and subject to the proviso that no
Pre-Acquisition Reorganization or transaction described in clause (x) or
(y) of this paragraph, in either case not specified
in this Agreement or the agreements referred to herein, shall prevent the
Arrangement from qualifying as a reorganization under Section 368(a) of the
U.S.
Tax Code, Bema understands that (x) Kinross may enter into transactions (the
“bump transactions”) designed to step up the tax basis in certain capital
property of Bema for purposes of the Tax Act and agrees to co-operate to a
reasonable extent with Kinross in order to facilitate the bump transactions
or
other reorganizations or transactions which Kinross determines would be
advisable to enhance the tax efficiency of the combined corporate group and
any
anticipated dispositions and to provide such information on a timely basis
and
to assist in the obtaining of any such information in order to facilitate a
successful completion of the bump transactions or any such other reorganizations
or transactions as is reasonably requested by Kinross; and (y) the transactions
pursuant to the B2Gold Purchase and Sale Agreement, the Russian Properties
Agreement and the Joint Venture Agreement could affect Kinross tax planning
and
Bema agrees that it will co-operate to cause B2Gold not to have, following
the
Effective Time, any rights against Bema or against any assets of Kinross which
consist of shares of Bema or any assets held by Bema directly or indirectly,
provided, however, that B2Gold may have rights against a subsidiary of Bema
pursuant to the B2Gold Purchase and Sale Agreement, the Russian Properties
Agreement and the Joint Venture Agreement.
-49-
If
the
transactions contemplated herein are not consummated (other than as a result
of
a breach of this Agreement by Bema), Kinross will indemnify Bema and the Bema
Subsidiaries for any and all losses, costs, Taxes and expenses (including
reasonable legal fees and disbursements) incurred in respect of any proposed
or
actual Pre-Acquisition Reorganization (including in respect of any reversal,
modification or termination of a Pre-Acquisition Reorganization).
(cc) Stock
Exchange Listing and De-listing.
Bema
shall cooperate with Kinross and use reasonable commercial efforts to take,
or
cause to be taken, all actions, and do or cause to be done all things,
reasonably necessary, proper or advisable on its part under applicable Laws
and
rules and policies of the NYSE, TSX and AIM to enable the delisting by Bema
of
the Bema Common Shares from the NYSE, TSX and AIM and the deregistration of
the
Bema Common Shares under the 1934 Act as promptly as practicable after the
Effective Date.
(dd) Affiliates.
Prior
to the date of the Bema Meeting, Bema shall provide to Kinross such information
and documents as Kinross shall reasonably request for the purposes of preparing
a list of names and addresses of those “persons” (as such term is defined in
Rule 144 under the 0000 Xxx) who are, in the reasonable opinion of Kinross,
as
of the time of the Bema Meeting, “affiliates” of Bema within the meaning of Rule
145 under the 1933 Act. Kinross shall provide this list to Bema in advance
of
the Bema Meeting. There shall be added to such list the names and addresses
of
any other person subsequently identified by either Kinross or Bema as a person
who may reasonably be deemed to be such an affiliate of Bema; provided, however,
that no such person identified by Kinross shall be on the final list of
affiliates of Bema if Kinross shall receive from Bema, on or before the date
of
the Bema Meeting, an opinion of counsel reasonably satisfactory to Kinross
to
the effect that such person is not such an affiliate. Bema shall exercise its
reasonable efforts to deliver or cause to be delivered to Kinross, prior to
the
date of the Bema Meeting, from each affiliate of Bema identified in the
foregoing list (as the same may be supplemented as aforesaid), a letter dated
as
of the Effective Date in the form attached as Schedule I.
(ee) B2Gold
Transfer.
Subject
to the terms and conditions of the B2Gold Purchase and Sale Agreement, Bema
shall take, or cause to be taken, all action to do, or cause to be done, all
things necessary, proper or advisable to complete the transfer of assets by
White Ice Ventures Limited and Bema Vendorco to B2Gold in accordance with the
terms of the B2Gold Purchase and Sale Agreement (including by way of enforcement
of all of Bema’s rights, if any, and those of the Bema Subsidiaries under such
agreement) prior to the Effective Date (but after Kinross shall have waived
or
confirmed that all conditions to closing have been satisfied), and neither
Bema
nor Bema Vendorco shall amend the terms of the B2Gold Purchase and Sale
Agreement unless such amendment is consented to by Kinross which consent shall
not be unreasonably withheld or delayed in respect of non-material amendments
and where, pursuant to the B2Gold Purchase and Sale Agreement, any document,
delivery or other matter is to be satisfactory to Bema or Bema Vendorco in
their
discretion, prior to determining such document, delivery or other matter is
satisfactory, Bema or Bema Vendorco, as the case may be, shall obtain the
consent of Kinross which consent shall not be unreasonably withheld or delayed
in respect of non-material amendments.
-50-
(ff)
Completion
Date.
Bema
shall use its reasonable commercial efforts to complete the transactions
contemplated herein by the Completion Deadline.
(gg)
Kupol
Deposit.
Bema
shall use its commercially reasonable efforts to (i) take, or cause to be taken,
all action to do, or cause to be done, all things necessary, proper or advisable
in compliance with applicable Russian law to obtain a reclassification of the
land relating to the Kupol deposit with cadastral numbers 87.04.01.00.01.006
through 87.04.01.00.0012, with a size of 358.96 hectares, located in the
Bilibino municipal district of the Chukotka Autonomous District (the “Kupol
Land”), into industrial land; and (ii) cause CMGC to enter into a valid
long-term lease agreement in a form satisfactory to Kinross, acting reasonably,
covering the use of the Kupol deposit following reclassification of the Kupol
Land into industrial land.
(hh) Confirmation
of Title.
Bema
shall use its commercially reasonable efforts to provide to Kinross copies
of
recent extracts (dated no earlier than the tenth day prior to the Effective
Date): (A) from the unified state register of legal entities in respect of
each
Bema Subsidiary organized in the Russian Federation; and (B) from the register
of the shareholders of each of CMGC and Omsukchansk Mining and Geological
Company showing that Bema or its Subsidiaries are registered shareholders of
such companies in the percentages set forth in Schedule C hereto (under the
subtitle “Asia”).
(ii) Employees.
Bema
shall use its commercially reasonable efforts to ensure that the persons listed
in the Kinross Disclosure Letter remain employees of Bema prior to and after
the
Effective Time.
(jj)
Consulting.
Bema
shall use its commercially reasonable efforts to cause the persons listed in
the
Kinross Disclosure Letter to provide consulting services to Kinross prior to
and
after the Effective Time on the basis requested by Kinross.
(kk) U.S.
Tax Matters.
Neither
Bema nor any affiliate of Bema shall take any action not specified in this
Agreement or the agreements referred to herein that (without regard to any
action taken or agreed to be taken by Kinross or any affiliate of Kinross)
would
prevent the Arrangement from qualifying as a reorganization within the meaning
of Section 368(a) of the U.S. Tax Code.
| 5.2 |
Covenants
of Kinross
|
Kinross
hereby covenants and agrees with Bema as follows:
(a) Information
for Bema Proxy Circular.
Kinross
shall promptly furnish to Bema all information concerning Kinross as may be
required or reasonably requested by Bema for the preparation of the Bema Proxy
Circular (and any amendments or supplements thereto) and hereby covenants that
no information furnished by Kinross in connection therewith or otherwise in
connection with the consummation of the Arrangement and the transactions
contemplated herein will contain any misrepresentation. Notwithstanding the
generality of the foregoing, Kinross shall execute such certificates and provide
such information to counsel reasonably necessary such that counsel can provide
the tax opinions and tax disclosure in the Bema Proxy Circular customary for
an
arrangement.
-51-
(b) Bema
Proxy Circular.
In a
timely and expeditious manner, Kinross shall provide Bema with information
as
reasonably requested by Bema in order to prepare the Bema Proxy Circular and
any
amendments or supplements to the Bema Proxy Circular (which Bema Proxy Circular,
and any amendments or supplements thereto shall be in a form satisfactory to
Kinross, acting reasonably) with respect to the Bema Meeting in accordance
with
the Interim Order of the Court.
(c) Consents
for Inclusion in Bema Proxy Circular.
Kinross
shall use its commercially reasonable efforts to cause its independent auditor
and any other of its advisors providing any expert information, including pro
forma financial statements, for inclusion in the Bema Proxy Circular to furnish
to Bema with a consent permitting such inclusion and the identification in
the
Bema Proxy Circular of such advisor.
(d) Proceedings.
In a
timely and expeditious manner, Kinross and the Kinross Subsidiaries shall take
all such actions and do all such acts and things as are contemplated herein
or
as are specified in the Interim Order, the Plan of Arrangement and the Final
Order to be taken or done by Kinross and Kinross Subsidiaries, as applicable
(including depositing or causing to be deposited with the Depositary the Kinross
Common Shares and aggregate cash purchase price deliverable by Kinross under
the
Plan of Arrangement and delivering the Kinross Replacement Options to holders
of
Bema Options, all in accordance with the Plan of Arrangement).
(e) Copy
of Documents.
Kinross
shall furnish promptly to Bema a copy of each notice, report, schedule or other
document or communication delivered, filed or received by Kinross in connection
with the transactions contemplated herein, any filing under any applicable
Laws
and any dealings or communications with any Governmental Entity, Securities
Authority or stock exchange in connection with, or in any way affecting, the
transactions contemplated by this Agreement.
(f) Certain
Actions Prohibited.
Other
than as disclosed in the Kinross Disclosure Letter or in contemplation of or
as
required to give effect to the transactions contemplated herein, and, except
where doing so would not have a Material Adverse Effect on Kinross, Kinross
shall not, without the prior written consent of Bema which consent shall not
be
unreasonably withheld or delayed, directly or indirectly do or permit to occur
any of the following:
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(i)
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issue,
sell, pledge, lease, dispose of, encumber or create any Encumbrance
on or
agree to issue, sell, pledge, lease, dispose of, or encumber or create
any
Encumbrance on, or permit a Kinross Subsidiary to issue, sell, pledge,
lease, dispose of, encumber or create any Encumbrance on or agree
to
issue, sell, pledge, lease, dispose of, or encumber or create any
Encumbrance on, any shares of, or any options, warrants, calls, conversion
privileges or rights of any kind to acquire any shares of, Kinross
or any
of the Kinross Subsidiaries or any of the shares representing Kinross’
interest in the Kinross Significant Interest Companies, other than
the
issue of Kinross Common Shares pursuant to the exercise of the Kinross
Options or the Kinross Warrants issued and outstanding on the date
hereof,
in accordance with their terms as of the date
hereof;
|
-52-
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(ii)
|
amend
or propose to amend the articles or by-laws (or their equivalent)
of
Kinross or any of the Kinross Subsidiaries or any of the terms of
the
Kinross Options or the Kinross Warrants as they exist at the date
of this
Agreement;
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(iii)
|
split,
combine or reclassify any of the shares of Kinross or any of the
Kinross
Subsidiaries or declare, set aside or pay any dividend or other
distribution payable in cash, securities, property or otherwise with
respect to the shares of Kinross;
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(iv)
|
redeem,
purchase or offer to purchase, or permit any of the Kinross Subsidiaries
to redeem, purchase or offer to purchase, any Kinross Common Shares
and,
other than pursuant to the Kinross Share Option Plans, any options
or
obligations or rights under existing contracts, agreements and commitments
to purchase Kinross Common Shares;
or
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(v)
|
agree
or commit to do any of the
foregoing.
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(g) Certain
Actions.
Other
than as disclosed in the Kinross Disclosure Letter, Kinross shall:
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(i)
|
not
take any action, shall cause the Kinross Subsidiaries to not take
any
action, and shall use its reasonable commercial efforts to cause
the
Kinross Significant Interest Companies to not take any action, that
would
interfere with or be inconsistent with the completion of the Arrangement
and the transactions contemplated by this Agreement or would render,
or
that could reasonably be expected to render, any representation or
warranty made by Kinross in this Agreement untrue or inaccurate at
any
time prior to the Effective Time if then made;
and
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(ii)
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promptly
notify Bema of (A) any Material Adverse Change or Material Adverse
Effect,
or any change, event, occurrence or state of facts which could reasonably
be expected to become a Material Adverse Change or to have a Material
Adverse Effect, in respect of Kinross, (B) any material Governmental
Entity or third person complaints, investigations or hearings (or
communications indicating that the same may be contemplated), (C)
any
breach by Kinross of any covenant or agreement contained in this
Agreement, and (D) any event occurring subsequent to the date hereof
that
would render any representation or warranty of Kinross contained
in this
Agreement, if made on or as of the date of such event or the Effective
Date, to be untrue or inaccurate.
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-53-
(h) Satisfaction
of Conditions.
Kinross
shall use all commercially reasonable efforts to satisfy, or cause to be
satisfied, all of the conditions precedent to its obligations to the extent
that
the same is within its control and to take, or cause to be taken, all other
action and to do, or cause to be done, all other things necessary, proper or
advisable under all applicable Laws to complete the transactions contemplated
by
this Agreement, including using its commercially reasonable efforts
to:
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(i)
|
obtain
the regulatory approvals set out in the Kinross Disclosure Letter
and all
other consents, approvals and authorizations as are required to be
obtained by Kinross or any of the Kinross Group Companies under any
applicable Laws or from any Governmental Entity which would, if not
obtained, materially impede the completion of the Arrangement and
the
transactions contemplated hereby or have a Material Adverse Effect
on
Kinross;
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(ii)
|
effect
all necessary registrations, filings and submissions of information
requested by Governmental Entities required to be effected by Kinross
or
any of the Kinross Group Companies in connection with the transactions
contemplated by this Agreement and participate, and appear in any
proceedings of, any Party hereto before any Governmental
Entity;
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(iii)
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oppose,
lift or rescind any injunction or restraining order or other order
or
action challenging or affecting this Agreement, the transactions
contemplated hereby or seeking to stop, or otherwise adversely affecting
the ability of the Parties hereto to consummate, the transactions
contemplated hereby;
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(iv)
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fulfill
all conditions and satisfy all provisions of this Agreement required
to be
fulfilled or satisfied by it;
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(v)
|
cooperate
with Bema in connection with the performance by Bema of its obligations
hereunder, provided however that the foregoing shall not be construed
to
obligate Kinross to pay or cause to be paid any monies or to cause
any
liability to be incurred to cause such performance to occur;
and
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(vi)
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reserve
a sufficient number of Kinross Shares for issuance upon the completion
of
the Arrangement and cause the Kinross Shares to be listed and posted
for
trading on the TSX and the NYSE by the Effective
Date.
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(i) Refrain
from Certain Actions.
Other
than as disclosed in the Kinross Disclosure Letter, Kinross shall not take
any
action, refrain from taking any action (subject to commercially reasonable
efforts), or permit any action to be taken or not taken, inconsistent with
the
provisions of this Agreement or which could reasonably be expected to materially
impede the completion of the Arrangement and the transactions contemplated
hereby or which could have a Material Adverse Effect on Kinross, provided that
where Kinross is required to take any such action or refrain from taking such
action (subject to commercially reasonable efforts) as a result of this
Agreement, it shall immediately notify Bema in writing of such
circumstances.
(j) Cooperation.
Kinross
shall make, or cooperate as necessary in the making of, all necessary filings
and applications under all applicable Laws required in connection with the
transactions contemplated hereby and take all reasonable action necessary to
be
in compliance with such Laws.
-54-
(k) Representations.
Kinross
shall use its commercially reasonable efforts to conduct its affairs and to
cause the Kinross Subsidiaries to conduct their affairs so that all of the
representations and warranties of Kinross contained herein shall be true and
correct on and as of the Effective Date as if made on and as of such
date.
(l) Closing
Documents.
Kinross
shall execute and deliver, or cause to be executed and delivered at the closing
of the Arrangement and the transactions contemplated hereby such customary
agreements, certificates, opinions, resolutions and other closing documents
as
may be reasonably requested by Bema.
(m) Employment,
Indemnification and Insurance.
Kinross
hereby covenants and agrees that following the Effective Time it will honour
all
Bema employment arrangements in effect on the date of this Agreement, provided
that Kinross has been given full written disclosure regarding the terms of
such
arrangements prior to the date hereof. Kinross further covenants and agrees
that
all rights to indemnification or exculpation in favour of the current and former
directors and officers of Bema and the other Bema Subsidiaries described in
the
Bema Disclosure Letter shall be honoured by Kinross but only to the extent
so
described and Kinross will, or will cause Bema and its subsidiaries to, maintain
in effect without any reduction in scope or coverage for six years from the
Effective Time customary policies of directors’ and officers’ liability
insurance providing protection comparable to the protection provided by the
policies maintained by Bema and its subsidiaries which are in effect on the
date
hereof and providing protection in respect of claims arising from facts or
events which occurred on or prior to the Effective Time; provided, however,
that
prior to the Effective Time Bema may, in the alternative, purchase run off
directors’ and officers’ liability insurance for a period of up to six years
from the Effective Time.
(n) Bema
Options.
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(i)
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Kinross
acknowledges and agrees that the vesting period in respect of all
Bema
Options shall be accelerated so that the Bema Options vest at the
time the
Bema Shareholders provide the Bema Required Vote, and as part of
the Plan
of Arrangement and immediately following the acquisition of the shares
of
Bema by Kinross, Kinross shall issue options (the “Kinross Replacement
Options”) in exchange for the Bema Options under the Arrangement, which
replacement options shall have terms and conditions substantially
similar
to the original Bema Options (subject to the adjustments provided
for
under the Plan of Arrangement) and amended to provide that a Bema
employee
whose employment is terminated by its employer (other than for cause
or by
reason of death) or a Bema director who ceases to be a director (other
than by reason of death or disqualification from being a director
by law)
at or within 18 months following the Effective Time may exercise
his/her
Kinross Replacement Options during the period ending on the first
to occur
of (x) one year following the date on which the employee ceases to
be an
employee or the director ceases to be a director, and (y) the expiry
of
the exercise period under the original Bema Option, and such Kinross
Replacement Options shall be designed to meet the requirements under
subsection 7(1.4) of the Tax Act.
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-55-
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(ii)
|
Prior
to the Effective Time, Kinross shall take all corporate action necessary
to reserve for issuance a sufficient number of Kinross Common Shares
for
delivery upon the exercise of the Kinross Replacement Options that
will be
issued in accordance with this
section.
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(iii)
|
Prior
to the Effective Time, Kinross shall prepare and file with the Securities
Authorities, and the stock exchanges on which Kinross Common Shares
are
listed, all necessary reports, registration statements, applications
or
other documents and pay all fees required in order to permit the
issuance
of Kinross Common Shares upon the exercise of Kinross Replacement
Options
and the free, unrestricted transferability of such shares after such
issuance, subject to restrictions placed upon “affiliates” as defined in
Rule 144 under the 1933 Act, or “underwriters” or “dealers” as defined in
the 1933 Act, and to obtain the conditional listing approval of the
TSX
and the NYSE in respect of such Kinross Common
Shares.
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(o) Bema
Warrants and Bema Convertible Debentures.
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(i)
|
Kinross
covenants and agrees that on the Effective Date, it will, and will
cause
Amalco to execute supplemental indentures by which Amalco will, at
the
Effective Time, confirm that it will be bound by obligations of Bema
to
perform and observe each covenant and condition contained in each
of the
Bema Warrant and Bema Convertible Debenture indentures in accordance
with
its terms (and which supplemental indentures will confirm the fact
that
the Bema Warrants and Bema Convertible Debentures, as applicable,
shall
become exercisable for the Share Consideration post transaction and
prior
to the Effective Time, Kinross shall take or cause to be taken all
corporate action necessary to reserve for issuance a sufficient number
of
Kinross Common Shares for delivery by Amalco upon exercise of the
Bema
Warrants or conversion of Bema Convertible Debentures, as applicable,
referred to therein (subject to the adjustments required after giving
effect to the Arrangement). Further, Kinross also agrees that such
supplemental indentures will confirm that, to the extent Amalco withholds
any amount on account of Canadian non-resident withholding tax from
an
interest payment made on the Bema Convertible Notes to a non-resident
of
Canada, Amalco will pay an additional amount to the non-resident
holder so
that, after such withholding, the non-resident holder will receive
a net
sum equal to the lesser of the amount it would have received had
no such
withholding been made, and the amount it would have received had
the
applicable rate of such withholding been 10%. Kinross shall be a
party to
such supplemental indentures only to confirm that it will make its
shares
available to Amalco so that Amalco’s obligations under the indentures to
deliver Kinross Shares can be
satisfied.
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-56-
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(ii)
|
Prior
to the Effective Time, Kinross shall prepare and file with the stock
exchanges on which Kinross Common Shares are listed, all necessary
applications or other documents and pay all fees required in order
to
obtain the conditional listing approval of the TSX and the NYSE in
respect
of the Kinross Common Shares to be delivered upon exercise of the
Bema
Warrants and conversion of the Bema Convertible
Debentures.
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(p) Completion
Date.
Kinross
shall use its reasonable commercial efforts to complete the transactions
contemplated herein by the Completion Deadline.
(q) Tax
Elections.
Upon
receipt of a letter of transmittal in which an Eligible Holder has indicated
that the Eligible Holder intends to make an election under Subsection 85(1)
or
85(2) of the Tax Act, Kinross will promptly deliver a tax instruction letter
(and a tax instruction letter for the equivalent Québec election if applicable),
together with the relevant tax election forms (including the Québec tax election
forms, if applicable), to the Eligible Holder. Kinross agrees to execute joint
elections with validly electing Eligible Holders under Subsections 85(1) and
85(2) of the Tax Act (and corresponding provisions of provincial law) as
contemplated by the Plan of Arrangement.
(r) No
Action to Impair Tax Treatment.
Kinross
shall not take any action which could reasonably be expected to prevent the
exchange of Bema Common Shares for Kinross Common Shares under the Arrangement
by the validly electing Eligible Holders of Bema Common Shares who make and
file
a valid election under Subsection 85(1) or 85(2) of the Tax Act (or
corresponding provisions of provincial law) as described and on the terms set
out in the Plan of Arrangement from being treated as a tax deferred exchange
for
the purposes of the Tax Act (or other relevant provincial law) if such Eligible
Holders are otherwise eligible for such treatment.
(s) Section
3(a)(10) Exemption.
In the
event that, due to an amendment to the 1933 Act, a change in the SEC’s
interpretation of the 1933 Act or a decision of a court which provides that
orders of Canadian courts such as the Final Order do not qualify under Section
3(a)(10) of the 1933 Act, the exemption from registration under Section 3(a)(10)
of the 1933 Act is not available for any reason to exempt the issuance of the
Kinross Common Shares in accordance with the Arrangement from the registration
requirements of the 1933 Act, then (unless Kinross shall reasonably determine
that another registration exemption is available and Bema, acting reasonably
based on the advice of U.S. counsel, agrees that such other registration
exemption is available) Kinross shall take all necessary action to file a
registration statement on Form F-4 (or on such other form that may be available
to Kinross) in order to register the issuance of the Kinross Common Shares
in
accordance with the Arrangement, and shall use its reasonable commercial efforts
to cause such registration statement to become effective at or prior to the
Effective Time.
(t) Joint
Venture Agreement.
Kinross
shall use its commercially reasonable efforts to cause a Subsidiary of Kinross
to enter into the Joint Venture Agreement.
(u) Tax
Representation Letter.
Kinross
shall use its commercially reasonable efforts to provide Xxxxxx & Xxxxxxx
LLP, special U.S. tax counsel to Bema, such customary representation letters,
certificates and other documents that such firm shall reasonably request in
connection with preparing a discussion of U.S. federal income tax consequences
to U.S. shareholders of Bema to be included in the Bema Proxy Circular and
delivering a U.S. tax opinion to Bema.
-57-
(v) U.S.
Tax Matters.
Neither
Kinross nor any affiliate of Kinross shall take any action not specified in
this
Agreement or the agreements referred to herein that
(without regard to any action taken or agreed to be taken by Bema or any
affiliate of Bema) would prevent the Arrangement from qualifying as a
reorganization within the meaning of Section 368(a) of the U.S. Tax
Code.
ARTICLE
VI
CONDITIONS
| 6.1 |
Mutual
Conditions
|
The
obligations of Kinross and Bema to complete the transactions contemplated hereby
are subject to fulfilment of the following conditions on or before the Effective
Date or such other time prior thereto as is specified below:
|
(a)
|
the
Interim Order shall have been granted in form and substance satisfactory
to the Parties hereto, acting reasonably, and shall not have been
set
aside or modified in a manner unacceptable to the Parties hereto,
acting
reasonably, on appeal or otherwise;
|
|
(b)
|
the
Bema Required Vote shall have been obtained at the Bema
Meeting;
|
|
(c)
|
the
Final Order shall have been granted in form and substance satisfactory
to
the Parties hereto, acting reasonably, and shall not have been set
aside
or modified in a manner unacceptable to such Parties, acting reasonably,
on appeal or otherwise;
|
|
(d)
|
the
Articles of Arrangement shall be in form and substance satisfactory
to the
Parties hereto, acting reasonably;
|
|
(e)
|
the
Effective Time shall be on or before the Completion
Deadline;
|
|
(f)
|
there
shall not be in force any Laws, ruling, order or decree, and there
shall
not have been any action taken under any Laws or by any Governmental
Entity or other regulatory authority, that makes it illegal or otherwise
directly or indirectly restrains, enjoins or prohibits the consummation
of
the Arrangement and the transactions contemplated herein in accordance
with the terms hereof or results or could reasonably be expected
to result
in a judgment, order, decree or assessment of damages, directly or
indirectly, relating to the transactions contemplated herein which
has a
Material Adverse Effect on Bema or
Kinross;
|
|
(g)
|
the
TSX shall have conditionally approved and the NYSE shall have approved
subject to official notice of issuance, respectively, the listing
thereon
of the Kinross Common Shares to be issued pursuant to the Arrangement
(including the Kinross Common Shares that, as a result of the Arrangement
and the transactions contemplated herein, will be issuable upon the
exercise or conversion of the Bema Options, the Bema Warrants and
the Bema
Convertible Debentures) as of the Effective Date, or as soon as possible
thereafter, subject only to compliance with the usual requirements
of the
TSX and NYSE, as applicable;
|
-58-
|
(h)
|
(i)
all consents, waivers, permits, exemptions, orders and approvals
of, and
any registrations and filings with, any Governmental Entity and the
expiry, waiver or termination of any waiting periods, in connection
with,
or required to permit, the completion of the Arrangement, all of
which are
set out in the Bema Disclosure Letter and the Kinross Disclosure
Letter,
(ii) any registration statement filed by Kinross in connection with
its
obligations, if any, under subsection 5.2(s) hereof shall have been
declared effective by the SEC, and (iii) all third person and other
consents, waivers, permits, exemptions, orders, approvals, agreements
and
amendments and modifications to agreements, indentures or arrangements
shall have been obtained or received on terms that are reasonably
satisfactory to each Party hereto, except where the failure to obtain
such
consents, waivers, permits, exemptions, orders or approvals, agreements,
amendments or modifications or the non-expiry of such waiting periods
would not, either individually or in the aggregate, have a Material
Adverse Effect on Bema or Kinross or materially impede the completion
of
the Arrangement. Without limiting the generality of the foregoing,
it is
acknowledged by the Parties hereto that a failure to obtain the approval
of the Federal Anti-Monopoly Service of the Russian Federation in
connection with the Arrangement will have a Material Adverse Effect
on
Bema or Kinross or materially impede the completion of the Arrangement;
and
|
|
(i)
|
this
Agreement shall not have been terminated pursuant to the terms
hereof.
|
The
foregoing conditions are for the mutual benefit of the Parties hereto and may
be
waived in respect of a Party hereto, in whole or in part, by such Party hereto
in writing at any time. If any such conditions shall not be complied with or
waived as aforesaid on or before the Completion Deadline or, if earlier, the
date required for the satisfaction thereof, or become incapable of being
satisfied prior to then, then either Party hereto may terminate this Agreement
by written notice to the other Party in circumstances where the failure to
satisfy any such condition is not the result, directly or indirectly, of a
breach of this Agreement by such rescinding Party hereto.
| 6.2 |
Additional
Conditions Precedent to the Obligations of
Kinross
|
Subject
to Section 6.5, the obligation of Kinross to complete the transactions
contemplated herein shall be subject to the satisfaction of the following
conditions:
|
(a)
|
the
representations and warranties made by Bema in this Agreement which
are
qualified by the expression “Material Adverse Change” or “Material Adverse
Effect” or as to materiality shall be true and correct as of the Effective
Date as if made on and as of such date (except to the extent that
such
representations and warranties speak as of an earlier date, in which
event
such representations and warranties shall be true and correct as
of such
earlier date), and all other representations and warranties made
by Bema
in this Agreement which are not so qualified shall be true and correct
in
all material respects as of the Effective Date as if made on and
as of
such date (except to the extent that such representations and warranties
speak as of an earlier date, in which event such representations
and
warranties shall be true and correct as of such earlier date and
except
for subsection 3.1(k), which shall be true and correct as of the
Effective Date as if made on and as of such date), in either case,
except
where any failures or breaches of representations and warranties
would not
either individually or in the aggregate, in the reasonable judgment
of
Kinross, have a Material Adverse Effect on Bema, and Bema shall have
provided to Kinross a certificate of two officers thereof certifying
such
accuracy or lack of Material Adverse Effect on the Effective
Date;
|
-59-
|
(b)
|
from
the date of this Agreement to the Effective Date, there shall not
have
occurred, and neither Bema nor any of the Bema Subsidiaries shall
have
incurred or suffered, a Material Adverse Change or any one or more
changes, effects, events, occurrences or states of facts that, either
individually or in the aggregate, have a Material Adverse Effect
on
Bema;
|
|
(c)
|
Bema
shall have complied in all material respects with its covenants in
this
Agreement and Bema shall have provided to Kinross a certificate of
two
officers thereof certifying that, as of the Effective Date, Bema
has so
complied with its covenants in this
Agreement;
|
|
(d)
|
none
of the directors or executive officers of Bema shall have breached,
in any
material respect, any of the representations, warranties or covenants
in
the Voting Agreements;
|
|
(e)
|
the
directors of Bema and each of the Bema Group Companies shall have
adopted
all necessary resolutions and all other necessary corporate action
shall
have been taken by Bema and the Bema Group Companies to permit the
consummation of the Arrangement and the transactions contemplated
herein;
|
|
(f)
|
Bema
Shareholders holding no more than 5% of the outstanding Bema Common
Shares
shall have exercised the Dissent Rights (and not withdrawn such exercise)
and Kinross shall have received a certificate dated the day immediately
preceding the Effective Date of two officers of Bema to such
effect;
|
|
(g)
|
the
B2Gold Purchase and Sale Agreement and the Russian Properties Agreement
shall remain in force unamended from the date hereof, other than
any
amendments thereto that may be consented to by Kinross which consent
shall
not be unreasonably withheld or delayed in respect of non-material
amendments and with no breach thereunder that shall not have been
cured at
the Effective Time and the Joint Venture Agreement shall have been
entered
into in a form satisfactory to Kinross, acting reasonably, and shall
remain in force and unamended, other than any amendments thereto
that may
be consented to by Kinross which consent shall not be unreasonably
withheld or delayed in respect of non-material amendments and with
no
breach thereunder that shall not have been cured at the Effective
Time;
and
|
-60-
|
(h)
|
(A)
the Kupol Land shall have been reclassified into industrial land;
and (B)
CMGC shall have entered into a valid long-term lease agreement in
a form
satisfactory to Kinross, acting reasonably, covering the Kupol Land
and
following reclassification of the Kupol Land into industrial
land.
|
The
foregoing conditions are for the benefit of Kinross and may be waived, in whole
or in part, by Kinross in writing at any time. If any of such conditions shall
not be complied with or waived by Kinross on or before the Completion Deadline
or, if earlier, the date required for the satisfaction thereof, or become
incapable of being satisfied prior to then, then Kinross may terminate this
Agreement by written notice to Bema in circumstances where the failure to
satisfy any such condition is not the result, directly or indirectly, of a
breach of this Agreement by Kinross.
| 6.3 |
Additional
Conditions Precedent to the Obligations of
Bema
|
Subject
to Section 6.5, the obligations of Bema to complete the transactions
contemplated herein shall be subject to the satisfaction of the following
conditions:
|
(a)
|
the
representations and warranties made by Kinross in this Agreement
which are
qualified by the expression “Material Adverse Change” or “Material Adverse
Effect” or as to materiality shall be true and correct as of the Effective
Date as if made on and as of such date (except to the extent that
such
representations and warranties speak as of an earlier date, in which
event
such representations and warranties shall be true and correct as
of such
earlier date), and all other representations and warranties made
by
Kinross in this Agreement which are not so qualified shall be true
and
correct in all material respects as of the Effective Date as if made
on
and as of such date (except to the extent that such representations
and
warranties speak as of an earlier date, in which event such
representations and warranties shall be true and correct as of such
earlier date and except for subsection 4.1(i), which shall be true
and
correct as of the Effective Date as if made on and as of such date),
in
either case, except where any failures or breaches of representations
and
warranties would not either individually or in the aggregate, in
the
reasonable judgment of Bema, have a Material Adverse Effect on Kinross,
and Kinross shall have provided to Bema a certificate of two officers
thereof certifying such accuracy or lack of Material Adverse Effect
on the
Effective Date;
|
|
(b)
|
from
the date of this Agreement to the Effective Date, there shall not
have
occurred, and Kinross or any of the Kinross Subsidiaries shall not
have
incurred or suffered, a Material Adverse Change or any one or more
changes, effects, events, occurrences or states of facts that, either
individually or in the aggregate, have a Material Adverse Effect
on
Kinross;
|
-61-
|
(c)
|
Kinross
shall have complied in all material respects with its covenants in
this
Agreement and Kinross shall have provided to Bema a certificate of
two
officers thereof, certifying that, as of the Effective Date, Kinross
has
so complied with its covenants in this Agreement;
and
|
|
(d)
|
the
directors of Kinross and each of the Kinross Group Companies shall
have
adopted all necessary resolutions and all other necessary corporate
action
shall have been taken by Kinross and the Kinross Group Companies
to permit
the consummation of the Arrangement and the transactions contemplated
herein.
|
The
foregoing conditions are for the benefit of Bema and may be waived, in whole
or
in part, by Bema in writing at any time. If any of such conditions shall not
be
complied with or waived by Bema on or before the Completion Deadline or, if
earlier, the date required for the satisfaction thereof, or become incapable
of
being satisfied prior to then, then Bema may terminate this Agreement by written
notice to Kinross in circumstances where the failure to satisfy any such
condition is not the result, directly or indirectly, of a breach of this
Agreement by Bema.
| 6.4 |
Merger
of Conditions
|
The
conditions set out in Sections 6.1, 6.2 and 6.3 shall be conclusively deemed
to
have been satisfied, waived or released upon the filing of the Articles of
Arrangement as contemplated by this Agreement.
| 6.5 |
Notice
and Cure Provisions
|
Each
Party hereto shall give prompt notice to the other Party of the occurrence,
or
failure to occur, at any time from the date hereof until the Effective Time,
of
any event or state of facts which occurrence or failure would, would be likely
to or could:
|
(a)
|
cause
any of the representations or warranties of such Party hereto contained
herein to be untrue or inaccurate in any respect on the date hereof
or on
the Effective Time;
|
|
(b)
|
result
in the failure to comply with or satisfy any covenant or agreement
to be
complied with or satisfied by such Party hereto prior to the Effective
Time; or
|
|
(c)
|
result
in the failure to satisfy any of the conditions precedent in favour
of the
other Party’s favour contained in Sections 6.1, 6.2 or 6.3 hereof, as the
case may be.
|
Subject
as herein provided, a Party hereto may elect not to complete the transactions
contemplated hereby pursuant to the conditions contained in Sections 6.1, 6.2
or
6.3 hereof or exercise any termination right arising therefrom; provided,
however, that (i) promptly and in any event prior to the filing of the Articles
of Arrangement, the Party hereto intending to rely thereon has delivered a
written notice to the other Party hereto specifying in reasonable detail the
breaches of covenants or untruthfulness or inaccuracy of representations and
warranties or other matters which the Party hereto delivering such notice is
asserting as the basis for the exercise of the termination right, as the case
may be, and (ii) if any such notice is delivered, and the other Party hereto
is
proceeding diligently, at its own expense, to cure such matter, if such matter
is susceptible to being cured, the Party hereto which has delivered such notice
may not terminate this Agreement until the earlier of the Completion Deadline
and the expiration of a period of 15 days from date of delivery of such notice.
If such notice has been delivered prior to the date of the Bema Meeting, the
Bema Meeting shall be adjourned or postponed until the expiry of such
period.
-62-
ARTICLE
VII
NON-SOLICITATION
AND TERMINATION FEE
| 7.1 |
No
Solicitation
|
(a) During
the period commencing on the date hereof and continuing until the Termination
Date, Bema agrees that neither it nor its affiliates, advisors or
representatives (including any person or entity, directly or indirectly, through
one or more intermediaries, controlled by or under common control with Bema)
will, directly or indirectly, (i) solicit or otherwise facilitate (including
by
way of furnishing information), initiate, encourage, engage in or respond to
any
inquiries or proposals regarding an Acquisition Proposal, (ii) encourage or
participate in any discussions or negotiations regarding any Acquisition
Proposal, (iii) agree to, approve or recommend an Acquisition Proposal, (iv)
withdraw, modify or qualify, or propose publicly to withdraw, modify or qualify,
in any manner, the approval or recommendation of the Bema board of directors
or
any committee thereof of this Agreement; (v) approve or recommend, or remain
neutral with respect to, or propose publicly to approve or recommend, or remain
neutral with respect to, any Acquisition Proposal (it being understood that
publicly taking no position or a neutral position with respect to an Acquisition
Proposal until 15 calendar days following the formal commencement of such
Acquisition Proposal shall not be considered to be in violation of this Section
7.1), or (vi) enter into any agreement related to an Acquisition Proposal;
provided, however, that subject as hereinafter provided, nothing shall prevent
Bema from furnishing non-public information to, or entering into a
confidentiality agreement and/or participating in discussions or negotiations
with, any person in response to a bona fide unsolicited written Acquisition
Proposal that is submitted by such person after the date hereof which is not
withdrawn if (A) the directors of Bema conclude in good faith, based on
information then available and after consultation with Bema’s financial advisors
that such Acquisition Proposal constitutes a Superior Proposal or could
reasonably be expected to result in a Superior Proposal; and (B) prior to
providing any non-public information to such person in connection with such
Acquisition Proposal, the Bema board of directors receives from such person
an
executed confidentiality agreement which includes a standstill provision that
restricts such person from acquiring, or publicly announcing an intention to
acquire, any securities or assets of Bema (other than pursuant to a Superior
Proposal) for a period of not less than one year from the date of such
confidentiality agreement and Bema sends a copy of any such confidentiality
agreement to Kinross promptly upon its execution and promptly provides Kinross
a
list of, or in the case of information that was not previously made available
to
Kinross, copies of, any information provided to such person.
(b) Bema
shall promptly (and in any event within 24 hours) notify Kinross, first orally
and then in writing, of any Acquisition Proposal which any director, senior
officer or agent thereof is or becomes aware of, any amendment to any such
proposal or any request for non-public information relating to Bema or the
Bema
Subsidiaries. Such notice shall include a description of the material terms
and
conditions of any such Acquisition Proposal and the identity of the person
making such proposal, inquiry, request or contact.
-63-
| 7.2 |
Superior
Proposals
|
(a) Bema
or
the directors thereof may take any action that is prohibited by subsections
7.1(a) (iii), (iv), (v) or (vi) in respect of any Acquisition Proposal only
if:
|
(i)
|
such
Acquisition Proposal constitutes a Superior Proposal;
|
|
(ii)
|
such
Acquisition Proposal is in writing and Kinross has been provided
with a
copy of the document containing such Superior Proposal;
|
|
(iii)
|
five
Business Days have elapsed from the date on which Kinross received
written
notice of the determination of Bema or the directors thereof to accept,
approve or recommend or to enter into an agreement in respect of
such
Superior Proposal;
|
|
(iv)
|
in
the event that Kinross has proposed to amend this Agreement during
the
five Business Day period referred to above, the Bema board of directors
(after receiving advice from its financial advisors and outside legal
counsel) shall have determined in good faith that the Acquisition
Proposal
continues to constitute a Superior Proposal after taking into account
such
amendments;
|
|
(v)
|
Bema’s
board of directors, after consultation with outside legal counsel,
determines in good faith that the failure to take such action would
be
inconsistent with its fiduciary duties under all applicable Laws;
and
|
|
(vi)
|
Bema
has terminated this Agreement pursuant to subsection 8.1(a) hereof
and
Bema has made the payment contemplated by, and in accordance with,
subsection 7.3(a) hereof.
|
(b) Bema
acknowledges that each successive modification to any Acquisition Proposal
shall
constitute a new Acquisition Proposal for purposes of the requirement under
subsection 7.2(a)(iii) hereof and shall initiate a new five Business Day
period.
(c) If
the
Bema Proxy Circular has been sent to Bema Shareholders prior to the expiry
of
the five Business Day period set forth in subsection 7.2(a)(iii) and, during
such period, Kinross requests in writing that the Bema Meeting proceed, unless
otherwise ordered by the Court, Bema may continue to take all reasonable steps
necessary to hold the Bema Meeting and to cause the Arrangement to be voted
on
at the Bema Meeting, or postpone or adjourn the Bema Meeting at the Bema Meeting
(but not beforehand without Kinross’ consent) to a date acceptable to Bema,
acting reasonably, which shall not be later than twenty days after the scheduled
date of the Bema Meeting and shall, in the event that Kinross and Bema amend
the
terms of this Agreement pursuant to subsection 7.2(a)(iv), ensure that the
details of such amended Agreement are communicated to the Bema Shareholders
prior to the resumption of the adjourned Bema Meeting.
-64-
(d) Where
at
any time before the Bema Meeting, Bema has provided Kinross with a notice under
subsection 7.2(a)(ii), an Acquisition Proposal has been publicly disclosed
or
announced, and the five Business Day period under subsection 7.2(a)(iii) has
not
elapsed, then, subject to applicable Laws, at Kinross’ request, Bema will
postpone or adjourn the Bema Meeting at the Bema Meeting (but not beforehand
without Kinross’ consent) to a date acceptable to Kinross, acting reasonably,
which shall not be later than twenty days after the scheduled date of the Bema
Meeting and shall, in the event that Kinross and Bema amend the terms of this
Agreement pursuant to subsection 7.2(a)(iv), ensure that the details of such
amended Agreement are communicated to the Bema Shareholders prior to the
resumption of the adjourned Bema Meeting.
| 7.3 |
Termination
Fee
|
(a) If:
|
(i)
|
Bema
terminates this Agreement in accordance with subsection 7.2(a) hereof;
or
|
|
(ii)
|
an
Acquisition Proposal (a “Pending Bema Acquisition Proposal”) shall have
been publicly announced and such Pending Bema Acquisition Proposal
shall
not have been publicly withdrawn prior to the Bema Meeting, if any,
and,
thereafter the Bema Required Vote shall not have been obtained (including
if the Bema Meeting is not held) and Bema completes such Pending
Bema
Acquisition Proposal within 12 months following the Completion
Deadline,
|
(any
such
event being a “Triggering Event”), then Bema shall pay Kinross an amount in cash
equal to $79 million in immediately available funds to an account designated
by
Kinross. Such payment shall be made (a) in the case of a Triggering Event
described in subsection 7.3(a)(i), concurrently with such termination (and
shall
be a condition to the effectiveness of such termination by Bema), and (b) in
the
case of a Triggering Event described in subsection 7.3(a)(ii), concurrently
with
completion of the Pending Bema Acquisition Proposal. The obligation to make
any
payment required by this paragraph shall survive any termination of this
Agreement. Bema hereby acknowledges that the payment amount set out in this
subsection is a payment of liquidated damages which is a pre-estimate of the
damages which Kinross will suffer or incur as a result of the event giving
rise
to such damages and the resultant non-completion of the Arrangement and the
transactions contemplated herein and is not a penalty. Bema hereby irrevocably
waives any right it may have to raise as a defence that any such liquidated
damages are excessive or punitive. Upon receipt of payment of such amount by
Kinross, Kinross shall have no further claim against Bema in respect of the
failure to complete the transactions contemplated herein.
(b) Bema
shall pay to Kinross, or cause to be paid to Kinross, in immediately available
funds to an account designated by Kinross, the reasonable documented expenses
of
Kinross and its affiliates incurred in connection with the transactions
contemplated hereby not to exceed $7.5 million, in the event that Kinross shall
have terminated this Agreement pursuant to subsection 8.1(b) hereof. Such
payment shall be in addition to, and not in substitution of, any other rights
which Kinross may have in respect of any breach by Bema of its covenants
hereunder.
-65-
(c) Kinross
shall pay to Bema, or cause to be paid to Bema, in immediately available funds
to an account designated by Bema, the reasonable documented expenses of Bema
and
its affiliates incurred in connection with the transactions contemplated hereby
not to exceed $7.5 million, in the event that Bema shall have terminated this
Agreement pursuant to subsection 8.1(c) hereof. Such payment shall be in
addition to, and not in substitution of, any other rights which Bema may have
in
respect of any breach by Kinross of its covenants hereunder.
ARTICLE
VIII
TERMINATION
AND AMENDMENT
| 8.1 |
Termination
by the Parties
|
(a) This
Agreement may be terminated by Bema in the circumstances contemplated by
subsection 7.2(a) hereof.
(b) This
Agreement may be terminated by Kinross if Kinross is not in material breach
of
its obligations under this Agreement and Bema breaches any of its
representations, warranties, covenants or agreements contained in this
Agreement, which breach would give rise to the failure of a condition set forth
in Section 6.1 or 6.2.
(c) This
Agreement may be terminated by Bema if Bema is not in material breach of its
obligations under this Agreement and Kinross breaches any of its
representations, warranties, covenants or agreements contained in this
Agreement, which breach would give rise to the failure of a condition set forth
in Section 6.1 or 6.3.
(d) Unless
otherwise terminated in accordance with this Agreement, this Agreement shall
be
deemed to be terminated at 5:00 p.m. (Toronto time) on the Completion Deadline
if the Arrangement shall not have been completed on or prior to the Completion
Deadline.
(e) Notwithstanding
anything herein to the contrary, the obligations and rights of the Parties
(and
third party beneficiaries under Section 9.13) under Sections 5.2(m), 7.3 and
9.13 hereof shall survive the termination of this Agreement.
| 8.2 |
Amendment
|
This
Agreement may, at any time and from time to time before or after the holding
of
the Bema Meeting but not later than the Effective Time, be amended by mutual
written agreement of the Parties hereto without, subject to applicable Law,
further notice to or authorization on the part of the Bema Shareholders and
any
such amendment may, without limitation:
|
(a)
|
change
the time for the performance of any of the obligations or acts of
any of
the Parties hereto including an extension of the Completion
Deadline;
|
|
(b)
|
waive
any inaccuracies in or modify any representation or warranty contained
herein or in any document delivered pursuant
hereto;
|
-66-
|
(c)
|
waive
compliance with or modify any of the covenants herein contained and
waive
or modify the performance of any of the obligations of any of the
Parties
hereto; and
|
|
(d)
|
waive
compliance with or modify any condition herein
contained,
|
provided,
however, that, after receipt of approval of the Bema Shareholders there shall
be
no amendment that by Law requires further approval of the Bema Shareholders
without further approval of such Bema Shareholders. This Agreement and the
Plan
of Arrangement may be amended in accordance with the Final Order, but in the
event that the terms of the Final Order require any such amendment, the rights
of the Parties hereto under Section 6.1, Section 6.2, Section 6.3, Section
7.3
and Article VIII hereof shall remain unaffected.
ARTICLE
IX
GENERAL
PROVISIONS
| 9.1 |
Notices
|
Any
notice, consent, waiver, direction or other communication required or permitted
to be given under this Agreement by a Party hereto shall be in writing and
shall
be delivered by hand to the Party hereto to which the notice is to be given
at
the following address or sent by facsimile to the following numbers or to such
other address or facsimile number as shall be specified by a Party hereto by
like notice. Any notice, consent, waiver, direction or other communication
aforesaid shall, if delivered, be deemed to have been given and received on
the
date on which it was delivered to the address provided herein (if a Business
Day
or, if not, then the next succeeding Business Day) and if sent by facsimile
be
deemed to have been given and received at the time of receipt (if a Business
Day
or, if not, then the next succeeding Business Day) unless actually received
after 5:00 p.m. (Toronto time) at the point of delivery in which case it shall
be deemed to have been given and received on the next Business Day.
The
address for service of each of the Parties hereto shall be as
follows:
|
(a)
|
if
to Bema:
|
Bema
Gold
Corporation
Suite
3100, Three Bentall Centre
000
Xxxxxxx Xxxxxx
X.X.
Xxx
00000
Xxxxxxxxx,
XX X0X 0X0
Attention:
Xxxxx X. Xxxxxxx and Corporate Secretary
Facsimile:
(000) 000-0000
-67-
with
a
copy (which shall not constitute notice) to:
Stikeman
Elliott LLP
0000
Xxxxxxxx Xxxxx Xxxx
000
Xxx
Xxxxxx
Xxxxxxx,
XX X0X 0X0
Attention:
Xxxxxxx X. Xxxxxxxxxxx and Xxxx X. Xxxxxxxxx
Facsimile:
(000) 000-0000
with
a
copy (which shall not constitute notice) to:
Xxxxxxx
Xxxxx LLP
3400
One
First Canadian Place
P.O.
Box
130
Toronto
ON M5X 1A4
Attention:
Xxxx Xxxx
Facsimile:
(000) 000-0000
|
(b)
|
if
to Kinross:
|
Kinross
Gold Corporation
52nd
Floor, Scotia Plaza
00
Xxxx
Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:
Xxx Xxxx and Chief Legal Officer
Facsimile:
(000) 000-0000
with
a
copy (which shall not constitute notice) to:
Blake,
Xxxxxxx & Xxxxxxx LLP
2800
– 000 Xxx
Xxxxxx
Xxxxxxxx
Xxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Attention:
Xxxxxxx X. Xxxxx
Facsimile:
(000) 000-0000
| 9.2 |
Costs
|
Except
as
provided above under Section 7.3 and in respect of any fees associated with
any filings made pursuant to the applicable Antitrust Laws, which fees shall
be
paid by Kinross, each of Kinross and Bema shall pay its own costs and expenses
(including all legal, accounting and financial advisory fees and expenses)
in
connection with the transactions contemplated herein including expenses related
to the preparation, execution and delivery of this Agreement and the documents
required hereunder.
-68-
|
9.3
|
Law
|
This
Agreement shall be governed by and be construed in accordance with the laws
of
the Province of Ontario and Kinross and Bema irrevocably attorn to the exclusive
jurisdiction of the courts of such province.
| 9.4 |
Remedies
|
The
Parties hereto acknowledge and agree that an award of money damages may be
inadequate for any breach of this Agreement by any Party hereto or its
representatives and advisors and that such breach may cause the non-breaching
Party hereto irreparable harm. Accordingly, the Parties hereto agree that,
in
the event of any such breach or threatened breach of this Agreement by one
of
the Parties hereto, Bema (if Kinross is the breaching Party) or Kinross (if
Bema
is the breaching Party) will be entitled, without the requirement of posting
a
bond or other security, to seek equitable relief, including injunctive relief
and specific performance. Subject to any other provision hereof including,
without limitation, Section 7.3 hereof, such remedies will not be the
exclusive remedies for any breach of this Agreement but will be in addition
to
all other remedies available hereunder or at law or in equity to each of the
Parties hereto.
| 9.5 |
Amendment
|
This
Agreement may, at any time and from time to time be amended by written agreement
of the Parties hereto.
| 9.6 |
Assignment
|
Neither
Party hereto may assign its rights or obligations under this Agreement without
the prior written consent of the other Party hereto.
| 9.7 |
Time
of the Essence
|
Time
shall be of the essence in this Agreement.
| 9.8 |
Binding
Effect
|
This
Agreement shall be binding upon and shall enure to the benefit of the Parties
hereto and their respective successors and permitted assigns.
| 9.9 |
Waiver
|
Any
waiver or release of any of the provisions of this Agreement, to be effective,
must be in writing and executed by the Party hereto granting such waiver or
right.
-69-
| 9.10 |
Severability
|
If
any
provision of this Agreement is held by a court of competent jurisdiction to
be
invalid, void or unenforceable, the remainder of this Agreement shall remain
in
full force and effect and shall in no way be affected, impaired or
invalidated.
| 9.11 |
Confidentiality
Agreement
|
The
Parties acknowledge that the transactions contemplated by this Agreement are
subject to the Confidentiality Agreement, which agreement shall continue in
full
force and effect. For greater certainty, any discussions in connection with
this
Agreement shall be treated by the Parties hereto as strictly confidential and
shall not (without the prior consent of the other Party hereto or as
contemplated or provided herein) be disclosed by either Party hereto to any
person other than a director, officer, employee, agent, shareholder or
professional advisor of or to that Party hereto with a need to know for purposes
connected with the matters contemplated by this Agreement and then only on
a
confidential basis and also on the basis that the Party concerned will be liable
for any breach of confidentiality by a person to whom it makes disclosure.
In
the event of a conflict between the provisions hereof and any provision of
the
Confidentiality Agreement, the provisions hereof shall prevail.
| 9.12 |
Entire
Agreement
|
This
Agreement, together with the Confidentiality Agreement, the B2Gold Purchase
and
Sale Agreement, the Joint Venture Agreement and the Russian Properties Agreement
contains the entire agreement between the Parties hereto with respect to the
subject matter hereof and thereof and supersedes all prior agreements and
understandings with respect thereto including the Binding Letter Agreement.
There are no representations, warranties, covenants or conditions with respect
to the subject matter hereof except as contained herein.
| 9.13 |
Third
Party Rights
|
This
Agreement shall not confer any rights or remedies upon any person other than
the
parties hereto and their respective successors and permitted assigns, provided,
however, that the provisions of Section 5.2(m) concerning insurance and
indemnification and the provisions of Section 9.14 concerning personal liability
are intended for the benefit of the individuals specified therein and their
respective legal representatives.
| 9.14 |
No
Personal Liability
|
No
director or officer of Bema shall have any personal liability whatsoever to
Kinross under this Agreement or any other document delivered in connection
with
this Agreement or the Arrangement by or on behalf of Bema.
No
director or officer of Kinross shall have any personal liability whatsoever
to
Bema under this Agreement or any other document delivered in connection with
this Agreement or the Arrangement by or on behalf of Kinross.
-70-
|
9.15
|
Execution
in Counterparts
|
This
Agreement may be executed in one or more counterparts, each of which shall
conclusively be deemed to be an original and all such counterparts collectively
shall be conclusively deemed to be one and the same.
[Remainder
of page intentionally left blank.]
-71-
IN
WITNESS WHEREOF
Kinross
and Bema have caused this Agreement to be executed as of December 21, 2006
above
by their respective officers thereunto duly authorized.
|
KINROSS
GOLD CORPORATION
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| |
|
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| By: | (Signed) “Xxx X. Xxxx” | |
|
Xxx
X. Xxxx
|
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|
President
and Chief Executive Officer
|
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BEMA
GOLD CORPORATION
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| |
|
|
| By: | (Signed) “Xxxxx X. Xxxxxxx” | |
|
Xxxxx
X. Xxxxxxx
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|
President
and Chief Executive Officer
|
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| By: | (Signed) “Xxxx Xxxxx” | |
|
Xxxx
Xxxxx
|
||
|
Chief
Financial
Officer
|
||
SCHEDULE
A
ARRANGEMENT
RESOLUTION
SPECIAL
RESOLUTION OF THE SHAREHOLDERS OF
BEMA
GOLD CORPORATION
BE
IT RESOLVED THAT:
|
1.
|
The
arrangement (the “Arrangement”)
under section 192 of the Canada
Business Corporations Act (the
“CBCA”)
involving Bema Gold Corporation (the “Corporation”)
and Kinross Gold Corporation (as the Arrangement may be modified
or
amended in accordance with its terms) and the transactions described
under
“The Transaction - The B2Gold Transaction” in the management information
circular (the “Circular”)
of the Corporation accompanying the notice of this meeting, all as
more
particularly described and set forth in the Circular, are hereby
ratified,
authorized, confirmed, approved and
adopted.
|
|
2.
|
The
plan of arrangement (the “Plan
of Arrangement”)
involving the Corporation, the full text of which is set out as Schedule
B
to the arrangement agreement made as of December 21, 2006 between the
Corporation and Kinross Gold Corporation (the “Arrangement
Agreement”),
(as the Plan of Arrangement may be modified or amended in accordance
with
its terms) is hereby ratified, authorized, confirmed, approved and
adopted.
|
|
3.
|
Notwithstanding
that this resolution has been passed, and the Arrangement adopted,
by the
holders of common shares of the Corporation (“Common
Shares”)
or that the Arrangement has been approved by the Court, the directors
of
the Corporation are hereby authorized and empowered without further
notice
to or approval of the holders of Common Shares (i) to amend the
Arrangement Agreement or the Plan of Arrangement, to the extent permitted
by the Arrangement Agreement, and (ii) subject to the terms of the
Arrangement Agreement, not to proceed with the
Arrangement.
|
|
4.
|
Any
officer or director of the Corporation is hereby authorized and directed
for and on behalf of the Corporation to execute, under the seal of
the
Corporation or otherwise, and to deliver articles of arrangement
and such
other documents as are necessary or desirable to the Director under
the
CBCA in accordance with the Arrangement Agreement for filing and
to take
all such other steps or actions as may be necessary or desirable
in
connection with the Arrangement and the transactions described in
the
Circular and to execute under the seal of the Corporation or otherwise,
all such other certificates, instruments, agreements, documents and
notices, and to take such further actions in such Person’s opinion as may
be necessary or desirable to carry out the purposes and intent of
the
foregoing resolutions.
|
SCHEDULE
B
FORM
OF
PLAN
OF ARRANGEMENT UNDER SECTION 192
OF
THE CANADA
BUSINESS CORPORATIONS ACT
(ONTARIO)
ARTICLE
I
DEFINITIONS
AND INTERPRETATION
Section
1.1 Definitions.
In this
Plan of Arrangement, unless there is something in the subject matter or context
inconsistent therewith, the following words and terms shall have the meanings
hereinafter set forth:
“Amalco”
means
the corporation continuing from the Amalgamation;
“Amalco
Common Shares”
means
the common shares of Amalco;
“Amalco
Preferred Shares”
means
the preferred shares of Amalco;
“Amalgamating
Corporations”
means
Kinross Subco and Bema, collectively;
“Amalgamation”
has
the
meaning ascribed thereto in subsection 3.1(h) of this Plan of
Arrangement;
“Arrangement”
means
the arrangement under Section 192 of the CBCA on the terms and subject to the
conditions set out in this Plan of Arrangement, subject to any amendments or
variations thereto made in accordance with the Arrangement Agreement and Section
7.1 hereof or made at the discretion of the Court in the Final Order (with
the
consent of Bema and Kinross, each acting reasonably);
“Arrangement
Agreement”
means
the Arrangement Agreement providing for, among other things, this Plan of
Arrangement between Kinross and Bema dated as of December 21, 2006, as the
same
may be amended, supplemented and/or restated from time to time;
“Articles
of Arrangement”
means
the articles of arrangement of Bema in respect of the Arrangement that are
required by the CBCA to be filed with the Director after the Final Order is
made;
“B2Gold”
means
B2Gold Corp., a corporation existing under the Business
Corporations Act
(British
Columbia) and owned by certain members of Bema’s management;
“B2Gold
Purchase and Sale Agreement”
means
the agreement among Kinross, White Ice Ventures Limited, Bema Vendorco and
B2Gold dated the date hereof pursuant to which (i) Bema Vendorco has agreed
to
transfer certain assets specified therein to B2Gold prior to the Effective
Time
and (ii) White Ice Ventures Limited has agreed to transfer or cause to be
transferred a direct or indirect interest in certain exploration licences to
B2Gold;
-2-
“Bema”
means
Bema Gold Corporation, a corporation existing under the CBCA;
“Bema Common
Shares”
means
the common shares in the capital of Bema;
“Bema
Convertible Debentures”
means
the outstanding convertible notes of Bema, all as described in Part (c) of
Schedule E to the Arrangement Agreement;
“Bema Meeting”
means
the special meeting, including any adjournments or postponements thereof, of
Bema Shareholders to be held, among other things, to consider and, if deemed
advisable, to approve the Special Resolution;
“Bema
Options”
means
all options to acquire Bema Common Shares outstanding immediately prior to
the
Effective Time under the Bema Share Option Plan;
“Bema
Shareholders”
means
the holders of Bema Common Shares;
“Bema
Share Option Plan”
means
the incentive stock option plan of Bema dated April 18, 1995, as
amended;
“Bema
Vendorco”
means
6674321 Canada Inc., a corporation existing under the CBCA and which is a party
to the B2Gold Purchase and Sale Agreement;
“Bema
Warrants”
means
all warrants exchangeable into Bema Common Shares outstanding immediately prior
to the Effective Time;
“Business
Day”
means
any day, other than a Saturday, a Sunday or statutory holiday in Toronto,
Ontario or Vancouver, British Columbia;
“Canadian
Resident”
means a
beneficial owner of Bema Common Shares immediately prior to the Effective Time
who is a resident of Canada for purposes of the Tax Act (other than a Tax Exempt
Person), or a partnership any member of which is a resident of Canada for the
purposes of the Tax Act (other than a Tax Exempt Person);
“CBCA”
means
the Canada Business
Corporations Act,
including the regulations promulgated thereunder, as amended;
“Certificate
of Arrangement”
means
the certificate of arrangement giving effect to the Arrangement, issued pursuant
to subsection 192(7) of the CBCA;
“Court”
means
the Superior Court of Justice (Ontario);
“Depositary”
means
Kingsdale Shareholder Services Inc., being the depositary or any other trust
company, bank or financial institution agreed to in writing between Kinross
and
Bema for the purpose of, among other things, exchanging certificates
representing Bema Common Shares for Kinross Common Shares and cash consideration
in connection with the Arrangement;
-3-
“Director”
means
the Director appointed pursuant to section 260 of the CBCA;
“Dissent
Rights”
shall
have the meaning ascribed thereto in Section 5.1;
“Dissenting
Shareholder”
means
a
registered holder of Bema Common Shares who dissents in respect of the Special
Resolution in strict compliance with the Dissent Rights, and who is ultimately
entitled to be paid fair value for their Bema Common Shares;
“Dissenting
Shares”
means
the Bema Common Shares of any registered holder of Bema Common Shares who has
demanded and perfected Dissent Rights in respect of such Bema Common Shares
in
accordance with the Interim Order and who, as of the Effective Time, has not
effectively withdrawn or lost such Dissent Rights;
“Effective
Date”
means
the date of the Certificate of Arrangement;
“Effective
Time”
means
the first moment of time (Toronto time) on the Effective Date;
“Eligible
Holder”
means
a
beneficial holder of Bema Common Shares immediately prior to the Effective
Time
who is a Canadian Resident;
“Final
Order”
means
the final order of the Court approving the Arrangement, as such order may be
amended by the Court (with the consent of Bema and Kinross, each acting
reasonably) at any time prior to the Effective Date or, if appealed, then,
unless such appeal is withdrawn or denied, such order as affirmed or amended
on
appeal;
“Former
Bema Shareholders”
means,
at and following the Effective Time, the holders of Bema Common Shares
immediately prior to the Effective Time;
“Governmental
Entity”
means
any applicable (i) multinational, federal, provincial, territorial, state,
regional, municipal, local or other government, governmental or public
department, central bank, court, tribunal, arbitral body, commission, board,
bureau or agency, domestic or foreign, (ii) subdivision, agency, commission,
board or authority of any of the foregoing, or (iii) quasi-governmental or
private body (including any stock exchange or Securities Authority) exercising
any regulatory, expropriation or taxing authority under or for the account
of
any of the foregoing;
“Interim
Order”
means
the interim order of the Court, as the same may be amended by the Court (with
the consent of Bema and Kinross, each acting reasonably), pursuant to subsection
192(3) of the CBCA, made in connection with the Arrangement;
“Kinross”
means
Kinross Gold Corporation, a corporation existing under the Business
Corporations Act
(Ontario);
“Kinross
Common Shares”
means
the common shares of Kinross;
“Kinross
Subco”
means
6674348 Canada Inc., a wholly-owned subsidiary of Kinross incorporated under
the
CBCA;
-4-
“Person”
means
and includes any individual, partnership, association, limited or unlimited
liability company, joint venture, body corporate, trustee, executor,
administrator, legal representative, government (including any Governmental
Entity) or any other entity, whether or not having legal status;
“Section
85 Election”
shall
have the meaning ascribed thereto in section 3.2(b);
“Securities
Authorities”
means
the Ontario Securities Commission and the other securities regulatory
authorities in the provinces and territories of Canada and the United States
Securities and Exchange Commission and the applicable state securities
authorities, collectively, and “Securities Authority” means any one of
them;
“Share
Consideration”
means
0.4447 of a Kinross Common Share plus $0.01 in cash for each Bema Common
Share;
“Special
Resolution”
means
the special resolution to be considered and approved by holders of Bema Common
Shares at the Bema Meeting to be in the form of Schedule A to the Arrangement
Agreement;
“Tax
Act”
means
the Income
Tax Act (Canada)
and the regulations thereunder, as amended from time to time;
“Tax
Exempt Person”
means a
person who is exempt from tax under Part I of the Tax Act; and
“this
Plan”,
“Plan
of Arrangement”,
“hereof”,
“herein”,
“hereto”
and
like references mean and refer to this plan of arrangement.
Words
and
phrases used herein that are defined in the Arrangement Agreement and not
defined herein shall have the same meaning herein as in the Arrangement
Agreement, unless the context otherwise requires. Words and phrases used herein
that are defined in the CBCA and not defined herein or in the Arrangement
Agreement shall have the same meaning herein as in the CBCA, unless the context
otherwise requires.
Section
1.2 Interpretation
Not Affected By Headings, etc.
The
division of this Plan of Arrangement into Articles, Sections and other portions
and the insertion of headings are for convenience of reference only and shall
not affect the construction or interpretation hereof.
Section
1.3 Gender
and Number.
Unless
the context requires the contrary, words importing the singular only shall
include the plural and vice versa and words importing the use of any gender
shall include all genders.
Section
1.4 Date
for Any Action.
In the
event that the date on which any action is required to be taken hereunder by
any
of the parties is not a Business Day, such action shall be required to be taken
on the next succeeding day which is a Business Day.
-5-
Section
1.5 Statutory
References
- Unless
otherwise indicated, references in this Plan of Arrangement to any statute
includes all regulations made pursuant to such statute and the provisions of
any
statute or regulation which amends, supplements or supercedes any such statute
or regulation.
Section
1.6 Currency.
All
references to currency herein are to lawful money of Canada unless otherwise
specified.
ARTICLE
II
ARRANGEMENT
AGREEMENT
Section
2.1 Arrangement
Agreement.
This
Plan of Arrangement is made pursuant to, and is subject to the provisions of,
the Arrangement Agreement, and has been authorized by the Special Resolution,
which resolution authorizes this Arrangement and certain related transactions
which related transactions have been completed on the Business Day immediately
prior to the Effective Date.
ARTICLE
III
ARRANGEMENT
Section
3.1 Arrangement.
Commencing at the Effective Time, the following events or transactions shall
occur and shall be deemed to occur in the following sequence without any further
act or formality:
|
(a)
|
each
Bema Common Share held by a Dissenting Shareholder shall be deemed
to be
transferred by the holder thereof, without any further act or formality
on
its part, free and clear of all liens, claims and encumbrances, to
Kinross, in consideration for a debt claim against Kinross in an
amount
determined and payable in accordance with Article V hereof, and the
name
of such holder will be removed from the register of holders of Bema
Common
Shares, and Kinross will be recorded as the registered holder of
the Bema
Common Shares so transferred and will be deemed to be the legal and
beneficial owner of such Bema Common Shares free and clear of any
liens,
claims or encumbrances;
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(b)
|
each
Bema Common Share outstanding immediately prior to the Effective
Time held
by a Bema Shareholder (other than Dissenting Shareholders), shall
be
transferred by the holder thereof to Kinross in exchange for the
Share
Consideration and Kinross shall be deemed to be the legal and beneficial
owner thereof, free and clear of any liens, claims or
encumbrances;
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-6-
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(c)
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each
Bema Option outstanding immediately prior to the Effective Time,
whether
vested or not, shall be exchanged for a fully-vested option granted
by
Kinross (a “Kinross Replacement Option”) to acquire the number of Kinross
Common Shares equal to the product of: (A) the number of Bema Common
Shares subject to the Bema Option immediately before the Effective
Time,
and (B) 0.4447 of a Kinross Common Share plus the portion of a Kinross
Common Share that, immediately prior to the Effective Time, has a
fair
market value equal to Cdn.$0.01 cash for each Bema Common Share that
such
holder was entitled to receive under its Bema Option, provided that
if the
foregoing would result in the issuance of a fraction of a Kinross
Common
Share, then the number of Kinross Common Shares otherwise issued
shall be
rounded down to the nearest whole number of Kinross Common Shares
and the
exercise price per Kinross Common Share subject to any such Kinross
Replacement Option shall be an amount (rounded up to the nearest
one-hundredth of a cent) equal to the quotient of (A) the exercise
price
per Bema Common Share subject to such Bema Option immediately before
the
Effective Time divided by (B) 0.4447 plus such portion of a Kinross
Common
Share that, immediately prior to the Effective Time, has a fair market
value equal to Cdn.$0.01 cash (provided that the aggregate exercise
price
payable on any particular exercise of Kinross Replacement Options
shall be
rounded up to the nearest whole cent) . Except as set out above,
the terms
of each Kinross Replacement Option shall be the same as the terms
of the
Bema Option exchanged therefor pursuant to the Bema Share Option
Plan and
any agreement evidencing the grant thereof prior to the Effective
Time,
except that such Kinross Replacement Option shall provide that a
Bema
employee whose employment is terminated by its employer (other than
for
cause or by reason of death) or a Bema director who ceases to be
a
director (other than by reason of death or disqualification from
being a
director by law) at or within 18 months following the Effective Time
may
exercise his or her Kinross Replacement Options during the period
ending
on the first to occur of (x) one year following the date on which
the
employee ceases to be an employee or the director ceases to be a
director,
and (y) the expiry of the exercise period under the original Bema
Option,
and such Kinross Replacement Options shall meet the requirements
under
subsection 7(1.4) of the Tax Act;
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(d)
|
in
accordance with the terms of the Bema Warrants and Bema Convertible
Debentures, each holder of a Bema Warrant and Bema Convertible Debenture
outstanding immediately prior to the Effective Time shall receive
upon the
subsequent exercise or conversion of such holder’s Bema Warrant or Bema
Convertible Debenture, as the case may be, in accordance with its
terms,
and shall accept in lieu of each Bema Common Share to which such
holder
was theretofore entitled upon such exercise or conversion but for
the same
aggregate consideration payable therefor, the Share Consideration;
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(e)
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Kinross
shall transfer all of the Bema Common Shares held by Kinross to Kinross
Subco in exchange for 9,999,999 common shares of Kinross Subco;
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(f)
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Bema
shall distribute all of the outstanding shares of Bema Vendorco to Kinross
Subco as a dividend in kind;
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(g)
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the
stated capital account maintained by Bema for the Bema Common Shares
shall
be reduced to be $1.00 without any repayment of capital in respect
thereof; and
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-7-
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(h)
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Kinross
Subco and Bema shall be amalgamated to form Amalco and continue as
one
corporation under the CBCA on the terms prescribed in this Plan of
Arrangement (the “Amalgamation”)
and:
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(i)
|
the
property of each Amalgamating Corporation shall continue to be the
property of Amalco and Amalco shall continue to be liable for the
obligations of each Amalgamating Corporation, including civil, criminal
and quasi-criminal liabilities and all contracts, disabilities, options,
warrants and debts of each of the Amalgamating
Corporations;
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(ii)
|
an
existing cause of action, claim or liability to prosecution is
unaffected;
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(iii)
|
a
civil, criminal or administrative action or proceeding pending by
or
against an Amalgamating Corporation may continue to be prosecuted
by or
against Amalco;
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(iv)
|
a
conviction against, or ruling, order or judgment in favour of or
against,
an Amalgamating Corporation may be enforced by or against
Amalco;
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(v)
|
the
Articles of Arrangement shall be deemed to be the articles of
incorporation of Amalco and, except for the purposes of
subsection 104(1)
of the CBCA, the Certificate of Arrangement shall be deemed to be
the
certificate of incorporation of
Amalco;
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(vi)
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all
issued and outstanding Bema Common Shares shall be cancelled without
any repayment of capital in respect thereof;
and
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(vii)
|
all
issued and outstanding common shares of Kinross Subco shall be cancelled
and Kinross shall receive on the Amalgamation one Amalco Common Share
for
each common share of Kinross Subco previously
held.
|
Section
3.2 Post-Effective
Time Procedures
|
(a)
|
On
or immediately prior to the Effective Date, Kinross shall deliver
or
arrange to be delivered to the Depositary certificates representing
the
requisite Kinross Common Shares and cash required to be issued and
paid in
accordance with the provisions of subsection 3.1(b) hereof,
which certificates and cash shall be held by the Depositary as agent
and
nominee for Former Bema Shareholders for distribution to such Former
Bema
Shareholders in accordance with the provisions of Article VI
hereof.
|
|
(b)
|
In
accordance with the provisions of Article VI hereof, Former Bema
Shareholders shall be entitled to receive delivery of the certificates
representing Kinross Common Shares and the cash consideration to
which
they are entitled pursuant to subsection 3.1(b)
hereof.
|
-8-
|
(c)
|
An
Eligible Holder whose Bema Common Shares are exchanged for Kinross
Common
Shares and cash pursuant to the Arrangement shall be entitled to
make an
income tax election, pursuant to section 85 of the Tax Act (and any
analogous provision of provincial income tax law) (a “Section
85 Election”)
with respect to the exchange by providing two signed copies of the
necessary election forms to an appointed representative, as directed
by
Kinross, within 90 days after the Effective Date, duly completed
with the
details of the number of Bema Common Shares transferred and the applicable
agreed amounts for the purposes of such elections. Kinross shall,
within
90 days after receiving the election forms, and subject to such election
forms being correct and complete and complying with requirements
imposed
under the Tax Act (or applicable provincial income tax law), sign
and
return them to the Former Bema Shareholder for filing with the Canada
Revenue Agency (or the applicable provincial tax authority). Neither
Bema,
Kinross nor any successor corporation shall be responsible for the
proper
completion of any election form nor, except for the obligation to
sign and
return duly completed election forms which are received within 90
days of
the Effective Date, for any taxes, interest or penalties resulting
from
the failure of an Eligible Holder to properly complete or file such
election forms in the form and manner and within the time prescribed
by
the Tax Act (or any applicable provincial legislation). In its sole
discretion, Kinross or any successor corporation may choose to sign
and
return an election form received by it more than 90 days following
the
Effective Date, but will have no obligation to do
so.
|
|
(d)
|
Upon
receipt of a letter of transmittal in which an Eligible Holder has
indicated that the Eligible Holder intends to make a Section 85 Election,
Kinross will promptly deliver or caused to be delivered a tax instruction
letter (and a tax instruction letter for the equivalent Quebec election,
if applicable), together with the relevant federal tax election forms
(and
the Quebec tax election forms, if applicable) to the Eligible
Holder.
|
Section
3.3 No
Fractional Kinross Common Shares.
No
fractional Kinross Common Shares shall be issued to Former Bema Shareholders
in
connection with this Plan of Arrangement. The
number of Kinross Common Shares to be issued to Former Bema Shareholders shall
be rounded up to the nearest whole Kinross Common Share in the event that a
Former Bema Shareholder would otherwise be entitled to a fractional share
representing 0.5 or more of a Kinross Common Share and shall be rounded down
to
the nearest whole Kinross Common Share in the event that a Former Bema
Shareholder is entitled to a fractional share representing less than 0.5 of
a
Bema Common Share.
Section
3.4 Binding
Effect.
This
Plan
of Arrangement will become effective at, and be binding at and after, the
Effective Time on (i) Bema, (ii) Kinross, (iii) all Former Bema Shareholders,
and (iv) all holders of Bema Options, Bema Warrants and Bema Convertible
Debentures.
-9-
ARTICLE
IV
AMALCO
Section
4.1 Name.
The
name of Amalco shall be EastWest Gold Corporation or such other name as may
be
assigned to Amalco or determined by Kinross.
Section
4.2 Registered
Office.
The
registered office of Amalco shall be located in the City of Toronto in the
Province of Ontario and the address of the registered office of Amalco shall
be
00xx
Xxxxx,
Xxxxxx Plaza, 00 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx, X0X 0X0.
Section
4.3 Authorized
Capital.
Amalco
shall be authorized to issue an unlimited number of common shares (being the
Amalco Common Shares) and an unlimited number of preferred shares issuable
in
series (being the Amalco Preferred Shares).
Section
4.4 Share
Provisions.
The
rights, privileges, restrictions and conditions attaching to the Amalco Common
Shares shall be as follows:
|
(a)
|
Voting.
Holders of Amalco Common Shares shall be entitled to receive notice
of and
to attend any meeting of the shareholders of Amalco and shall be
entitled
to one vote in respect of each Amalco Common Share held at such meeting,
except a meeting of holders of a particular class or series of shares
other than Amalco Common Shares who are entitled to vote separately
as a
class or series at such meeting.
|
|
(b)
|
Dividends.
Subject to the rights, privileges, restrictions and conditions attaching
to any other class of shares of Amalco ranking in priority to or
rateably
with the Amalco Common Shares, holders of Amalco Common Shares shall
be
entitled to receive dividends if, as and when declared by the directors
of
Amalco out of the assets of Amalco properly applicable to the payment
of
dividends in such amounts and payable in such manner as the directors
of
Amalco may from time to time
determine.
|
|
(c)
|
Liquidation.
In the event of the liquidation, dissolution or winding up of Amalco
or
any other distribution of the property or assets of Amalco among
its
shareholders for the purpose of winding up its affairs, holders of
Amalco
Common Shares shall, subject to the rights of the holders of any
other
class of shares of Amalco entitled to receive the property or assets
of
Amalco upon such a liquidation, dissolution, winding up or other
distribution in priority to or rateably with holders of Amalco Common
Shares, be entitled to receive the remaining property and assets
of
Amalco.
|
The
Amalco Preferred Shares shall have the rights, privileges and restrictions
and
conditions set out in Appendix I hereto.
Section
4.5 Restrictions
on Transfer.
There
shall be restrictions upon the right to transfer Amalco Common Shares and
approval of either the board of directors of Amalco or the shareholders of
Amalco (by resolution passed at a meeting or by signed resolution) shall be
required in respect of each transfer.
-10-
Section
4.6 Stated
Capital.
The
stated capital account maintained by Amalco for the Amalco Common Shares shall,
immediately after the Amalgamation, be an amount equal to the aggregate of
the
stated capital account maintained by Kinross Subco in respect of the common
shares of Kinross Subco immediately prior to the step in subsection 3.1(h),
being the amalgamation of Kinross Subco and Bema.
Section
4.7 Directors
and Officers
|
(a)
|
Minimum
and Maximum.
The directors of Amalco shall, until otherwise changed in accordance
with
the CBCA, consist of a minimum number of one and a maximum number
of ten
directors.
|
|
(b)
|
Initial
Directors.
The number of directors on the board of directors shall initially
be set
at four. The initial directors of Amalco immediately following the
Amalgamation shall be the persons whose names and municipalities
of
residence appear below:
|
| Name | Municipality of Residence | |||
| Xxxx Xxxx | Oakville, Ontario | |||
| Xxxxxxx Xxxxx Xxxxx | Toronto, Ontario | |||
| Xxxxxx X. Xxxxxxxx | Toronto, Ontario | |||
| Xxxxxxxx X. Gold | Toronto, Ontario |
The
initial directors shall hold office until the next annual meeting of the
shareholders of Amalco or until their successors are elected or appointed.
The
actual number of directors within the minimum and maximum number set out in
subsection 4.7(a) may be determined from time to time by resolution of the
directors. Any vacancy on the board of directors resulting from an increase
in
the number of directors as so determined may be filled by resolution of the
directors.
|
(c)
|
Initial
Officers.
The initial officers of Amalco shall be as
follows:
|
| Name | Title | |||
| Xxx Xxxxx | President | |||
| Xxxxx Xxxx | Treasurer | |||
| Xxxxxxx Xxxxx | Secretary |
Section
4.8 Business
and Powers.
There
shall be no restriction on the business which Amalco is authorized to carry
on
or on the powers which Amalco may exercise.
-11-
Section
4.9 By-Laws.
The
by-laws of Amalco, until repealed, amended or altered, shall be the by-laws
of
Kinross Subco.
Section
4.10
Charging
Power.
Without
restricting any of the powers and capacities of Amalco, whether under the CBCA
or otherwise, Amalco may mortgage, hypothecate, pledge or otherwise create
a
security interest in all or any present or future, real or personal, movable
or
immovable, legal or equitable property of Amalco (including without limitation
its book debts, rights, powers, franchises and undertaking) for any purpose
whatsoever.
ARTICLE
V
DISSENT
PROCEDURES
Section
5.1 Rights
of Dissent.
Registered Bema Shareholders may exercise rights of dissent with respect to
their Bema Common Shares pursuant to and in the manner set forth in
section 190 of the CBCA as modified by the Interim Order and this
Article V (the “Dissent
Rights”),
provided that written notice setting forth such a registered Bema Shareholder’s
objection to the Arrangement and exercise of Dissent Rights must be received
by
Bema not later than 5:00 p.m. (Vancouver time) on January 26, 2007 or 5:00
p.m.
(Vancouver time) on the Business
Day which is two Business Days preceding the date of any adjourned or postponed
Bema Meeting. Bema Shareholders who duly exercise their Dissent Rights and
who:
|
(a)
|
are
ultimately entitled to be paid fair value for their Bema Common Shares,
which fair value, notwithstanding anything to the contrary contained
in
Part XV of the CBCA, shall be determined as of the close of business
on
the day before the Final Order becomes effective, shall be deemed
to have
transferred their Bema Common Shares to Kinross as of the Effective
Time
as set out in subsection 3.1(a) hereof and in consideration for a
debt
claim against Kinross to be paid the fair value of such Bema Common
Shares, and will not be entitled to any other payment or consideration,
including any payment that would be payable under the Arrangement
had such
holders not exercised their Dissent Rights;
or
|
|
(b)
|
are
ultimately not entitled, for any reason, to be paid fair value for
their
Bema Common Shares shall be deemed to have participated in the Arrangement
on the same basis as any non-dissenting Bema
Shareholder.
|
Section
5.2 Recognition
of Dissenting Shareholders.
From
and after the Effective Time, in no case shall Kinross, Kinross Subco, Bema,
Amalco or any other Person be required to recognize a Dissenting Shareholder
as
a holder of Bema Common Shares or as a holder of any securities of any of
Kinross, Kinross Subco, Bema or Amalco or any of their respective subsidiaries
and the names of the Dissenting Shareholders shall be deleted from the register
of holders of Bema Common Shares.
-12-
ARTICLE
VI
DELIVERY
OF KINROSS COMMON SHARES
Section
6.1 Delivery
of Kinross Common Shares
|
(a)
|
Upon
surrender to the Depositary for cancellation of a certificate which
immediately prior to the Effective Time represented one or more
outstanding Bema Common Shares which were exchanged for Kinross Common
Shares in accordance with subsection 3.1(b) hereof, together with
such
other documents and instruments as would have been required to effect
the
transfer of the Bema Common Shares formerly represented by such
certificate under the CBCA and the by-laws of Bema and such additional
documents and instruments as the Depositary may reasonably require,
the
holder of such surrendered certificate shall be entitled to receive
in
exchange therefor, and the Depositary shall deliver to such holder
following the Effective Time, a certificate representing the Kinross
Common Shares and a cheque for the cash consideration to which such
holder
is entitled to receive in accordance with subsection 3.1(b)
hereof.
|
|
(b)
|
After
the Effective Time and until surrendered for cancellation as contemplated
by subsection 6.1(a) hereof, each certificate which immediately prior
to
the Effective Time represented one or more Bema Common Shares shall
be
deemed at all times to represent only the right to receive in exchange
therefor the entitlements which the holder of such certificate is
entitled
to receive in accordance with Section 6.1(a)
hereof.
|
Section
6.2 Lost
Certificates.
In the
event that any certificate which immediately prior to the Effective Time
represented one or more outstanding Bema Common Shares which were exchanged
for
the Share Consideration in accordance with subsection 3.1(b) hereof shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact
by
the holder claiming such certificate to be lost, stolen or destroyed, the
Depositary shall deliver in exchange for such lost, stolen or destroyed
certificate, a certificate representing the Kinross Common Shares and a cheque
in the amount of the cash consideration which such holder is entitled to receive
in accordance with subsection 3.1(b) hereof. When authorizing such delivery
of a
certificate representing the Kinross Common Shares and the cash consideration
which such holder is entitled to receive in exchange for such lost, stolen
or
destroyed certificate, the holder to whom a certificate representing such
Kinross Common Shares and a cheque in the amount of the cash consideration
is to
be delivered shall, as a condition precedent to the delivery of such Kinross
Common Shares, give a bond satisfactory to Kinross and the Depositary in such
amount as Kinross and the Depositary may direct, or otherwise indemnify Kinross
and the Depositary in a manner satisfactory to Kinross and the Depositary,
against any claim that may be made against Kinross or the Depositary with
respect to the certificate alleged to have been lost, stolen or destroyed and
shall otherwise take such actions as may be required by the by-laws of
Amalco.
Section
6.3 Distributions
with Respect to Unsurrendered Certificates.
No
dividend or other distribution declared or made after the Effective Time with
respect to Kinross Common Shares with a record date after the Effective Time
shall be delivered to the holder of any unsurrendered certificate which,
immediately prior to the Effective Time, represented outstanding Bema Common
Shares unless and until the holder of such certificate shall have complied
with
the provisions of Section 6.1 or Section 6.2 hereof. Subject to applicable
law
and to Section 6.4 hereof, at the time of such compliance, there shall, in
addition to the delivery of a certificate representing the Kinross Common Shares
and a cheque for the cash consideration to which such holder is thereby
entitled, be delivered to such holder, without interest, the amount of the
dividend or other distribution with a record date after the Effective Time
theretofore paid with respect such Kinross Common Shares.
-13-
Section
6.4 Withholding
Rights.
Kinross
and the Depositary shall be entitled to deduct and withhold from all dividends
or other distributions otherwise payable to any Former Bema Shareholder such
amounts as Kinross or the Depositary is required or permitted to deduct and
withhold with respect to such payment under the Income
Tax Act (Canada),
the United States Internal Revenue Code of 1986 or any provision of any
applicable federal, provincial, state, local or foreign tax law, in each case,
as amended. To the extent that amounts are so withheld, such withheld amounts
shall be treated for all purposes hereof as having been paid to the Former
Bema
Shareholder in respect of which such deduction and withholding was made,
provided that such withheld amounts are actually remitted to the appropriate
taxing authority.
Section
6.5 Limitation
and Proscription.
To the
extent that a Former Bema Shareholder shall not have complied with the
provisions of Section 6.1 or Section 6.2 hereof on or before the date which
is
six years after the Effective Date (the “final proscription date”), then the
Kinross Common Shares which such Former Bema Shareholder was entitled to receive
shall be automatically cancelled without any repayment of capital in respect
thereof and the certificates representing such Kinross Common Shares, together
with the cash consideration to which such Former Bema Shareholder was entitled
to receive shall be delivered to Kinross by the Depositary for cancellation
and
shall be cancelled by Kinross, and the interest of the Former Bema Shareholder
in such Kinross Common Shares and the cash consideration to which it was
entitled shall be terminated as of such final proscription date.
ARTICLE
VII
AMENDMENTS
Section
7.1 Amendments
to Plan of Arrangement
|
(a)
|
Kinross
and Bema reserve the right to amend, modify or supplement this Plan
of
Arrangement at any time and from time to time, provided that each
such
amendment, modification or supplement must be (i) set out in writing,
(ii)
agreed to in writing by Kinross and Bema, (iii) filed with the Court
and,
if made following the Bema Meeting, approved by the Court, and (iv)
communicated to Former Bema Shareholders if and as required by the
Court.
|
|
(b)
|
Any
amendment, modification or supplement to this Plan of Arrangement
may be
proposed by Bema at any time prior to the Bema Meeting provided that
Kinross shall have consented thereto in writing, with or without
any other
prior notice or communication, and, if so proposed and accepted by
the
persons voting at the Bema Meeting (other than as may be required
under
the Interim Order), shall become part of this Plan of Arrangement
for all
purposes.
|
-14-
|
(c)
|
Any
amendment, modification or supplement to this Plan of Arrangement
that is
approved by the Court following the Bema Meeting shall be effective
only
if (i) it is consented to in writing by each of Kinross and Bema,
and (ii)
if required by the Court, it is consented to by holders of the Bema
Common
Shares voting in the manner directed by the
Court.
|
APPENDIX
I
RIGHTS,
PRIVILEGES, RESTRICTIONS AND CONDITIONS
OF
AMALCO PREFERRED SHARES
|
1.
|
One
or More Series
-
The preferred shares may at any time and from time to time be issued
in
one or more series.
|
|
2.
|
Terms
of Each Series
-
Subject to the Canada
Business Corporations Act,
the directors may fix, before the issue thereof, the number of preferred
shares of each series, the designation, rights, privileges, restrictions
and conditions attaching to the preferred shares of each series,
including, without limitation, any voting rights, any right to receive
dividends (which may be cumulative or non-cumulative and variable
or
fixed) or the means of determining such dividends, the dates of payment
thereof, any terms and conditions of redemption or purchase, any
conversion rights, and any rights on the liquidation, dissolution
or
winding-up of the Corporation, any sinking fund or other provisions,
the
whole to be subject to the issue of a certificate of amendment setting
forth the designation, rights, privileges, restrictions and conditions
attaching to the preferred shares of the
series.
|
|
3.
|
Ranking
of Preferred Shares
-
The preferred shares of each series shall, with respect to the
payment of dividends and the distribution of assets in the event
of the
liquidation, dissolution or winding-up of the Corporation, whether
voluntary or involuntary, rank on a parity with the preferred shares
of
every other series and be entitled to preference over the common
shares.
If any amount of cumulative dividends (whether or not declared) or
declared non-cumulative dividends or any amount payable on any such
distribution of assets constituting a return of capital in respect
of the
preferred shares of any series is not paid in full, the preferred
shares
of such series shall participate rateably with the preferred shares
of
every other series in respect of all such dividends and
amounts.
|
|
4.
|
Series
I Preferred Shares
-
The first series of preferred shares shall consist of an unlimited
number
of shares and shall be designated as Series I Preferred Shares (the
“Series I Preferred Shares”). The rights, privileges, restrictions and
conditions attaching to the Series I Preferred Shares are as
follows:
|
| (a) |
Definitions
|
In
these
share conditions, the following words and phrases shall have the following
meanings:
|
(i)
|
“redemption
price” of each preferred share means the sum of $1.00;
and
|
|
(ii)
|
“Act”
means the Canada
Business Corporations Act.
|
-2-
| (b) |
Voting
Rights
|
Subject
to the Act, the holders of the Series I Preferred Shares shall not, as such,
be
entitled to receive notice of or to attend any meeting of the shareholders
of the Corporation or to vote at any such meeting.
| (c) |
Dividends
|
Subject
to the Act, the holders of the Series I Preferred Shares shall, in each
financial year of the Corporation, but always in preference and priority to
any
payment of dividends on the common shares for such year, be entitled to receive
and the Corporation shall pay thereon, if, as and when declared by the board
of
directors of the Corporation out of moneys of the Corporation properly
applicable to the payment of dividends, preferential non-cumulative cash
dividends in such amount(s) and/or at such rate(s) as the board of director
may
in its discretion determine from time to time, payable in one or more
instalments. The holders of the Series I Preferred Shares shall not be entitled
to any dividends other than as provided for herein.
| (d) |
Redemption
at Option of Corporation
|
Subject
to the Act, the Corporation may redeem the whole or any part of the issued
Series I Preferred Shares on payment for each share to be redeemed of the
redemption price plus any dividends declared but unpaid thereon. Unless all
the
holders of the Series I Preferred Shares to be redeemed shall have waived notice
of such redemption, the Corporation shall give not less than 5 days’ notice in
writing of such redemption, specifying the date and place of redemption. If
such
notice is given or waived, and the redemption price plus any dividends
declared but unpaid thereon is paid to such holders, or is deposited with any
chartered bank or trust company in Canada, as specified in the notice, on or
before the date fixed for redemption, dividends on the shares to be redeemed
shall cease after the date fixed for redemption and the holders thereof shall
thereafter have no rights against the Corporation in respect thereof except
to
receive payment of the redemption price plus any dividends declared but unpaid
thereon.
| (e) |
Redemption
at Option of Holder
|
|
(i)
|
General
-
Subject to the Act, a holder of any Series I Preferred Shares shall
be
entitled to require the Corporation to redeem the whole or any part
of the
Series I Preferred Shares registered in the name of such holder on
the
books of the Corporation.
|
|
(ii)
|
Notice
-
A holder of such shares to be redeemed shall tender to the Corporation
at
its registered office a request in writing specifying (i) that such
holder
desires to have the whole or any part of the Series I Preferred Shares
registered in the name of such holder redeemed by the Corporation
and (ii)
the business day, which shall be not less than 5 days after the day
on
which the request in writing is given to the Corporation, on which
the
holder desires to have the Corporation redeem such shares (the “redemption
date”), together with the share certificates, if any, representing the
Series I Preferred Shares which the registered holder desires to
have the
Corporation redeem.
|
-3-
|
(iii)
|
Redemption
Procedure
-
Upon receipt of such request and share certificates, the Corporation
shall, on the redemption date, redeem such shares by paying to such
registered holder an amount equal to the redemption price plus any
dividends declared but unpaid thereon. Such payment shall be made
by
cheque payable at any branch in Canada of one of the Corporation’s
bankers for the time being. If a part only of the Series I Preferred
Shares represented by any certificates are redeemed, a new certificate
for
the balance shall be issued by the
Corporation.
|
|
(iv)
|
Cessation
of Rights
-
The Series I Preferred Shares shall be redeemed on the redemption
date and
thereafter such shares shall cease to be entitled to dividends and
the
holders thereof shall not be entitled to exercise any of the rights
of
shareholders in respect thereof, unless payment of the redemption
price
plus any dividends declared but unpaid thereon is not made on the
redemption date, in which case the rights of the holders of such
shares
shall remain unaffected.
|
| (f) |
Distribution
Rights
|
In
the
event of the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, the holders of the Series I Preferred Shares shall
be
entitled to receive, before any distribution of any part of the assets of the
Corporation among the holders of the common shares, an amount equal to the
redemption price of such shares plus any dividends declared but unpaid thereon
and no more.
| (g) |
Variation
of Rights
|
The
holders of the Series I Preferred Shares shall not be entitled to vote
separately as a class or series or to dissent upon a proposal to amend the
articles:
|
(i)
|
to
increase or decrease any maximum number of authorized shares of such
class
or series;
|
|
(ii)
|
to
increase any maximum number of authorized shares of any other class
or
series having rights or privileges equal or superior to the shares
of such
class or series;
|
-4-
|
(iii)
|
to
effect an exchange, reclassification or cancellation of the shares
of such
class or series; or
|
|
(iv)
|
to
create a new class of shares equal or superior to the shares of such
series.
|
SCHEDULE
C
Bema
Properties
|
Property
|
Location
|
Bema
Interest (%)
|
||
|
North
America
|
||||
|
Mill
Canyon
|
United
States
|
100%1
|
||
|
Africa
|
||||
|
Petrex
|
South
Africa
|
30%
|
||
|
South
America
|
||||
|
Alderbaran/Cerro
Xxxxxx
|
Chile
|
49%
|
||
|
Quebrada
|
Chile
|
100%
|
||
|
Refugio
|
Chile
|
50%
|
||
|
Asia
|
||||
|
Xxxxxxxx
|
Russia
|
90%
|
||
|
Kupol
|
Russia
|
75%
|
||
|
East
Pansky
|
Russia
|
72%2
|
| 1 |
Bema
holds 30% of Victoria Resources Limited which in turn holds 100%
of Mill
Canyon
|
| 2 |
Bema
holds 39% of Consolidated Puma Minerals Corp. which in turn holds
72% of
East Pansky
|
SCHEDULE
D
Kinross
Properties
|
Property
|
Location
|
Kinross
Interest (%)
|
||
|
North
America
|
||||
|
Fort
Xxxx
|
USA
|
100.0%
|
||
|
Round
Mtn and area
|
USA
|
50.0%
|
||
|
Porcupine
JV
|
Canada
|
49.0%
|
||
|
Xxxxxxxxxxx
|
Canada
|
31.9%
|
||
|
Kettle
River
|
USA
|
100.0%
|
||
|
South
America
|
||||
|
Paracatu
|
Brazil
|
100.0%
|
||
|
La
Coipa
|
Chile
|
50.0%
|
||
|
Refugio
|
Chile
|
50.0%
|
||
|
Crixas
|
Brazil
|
50.0%
|
||
|
Asia
|
||||
|
Kubaka
and area
|
Russia
|
98.1%
|
SCHEDULE
E
Bema
Options/Bema Warrants/Bema Convertible Debentures
|
Expiry
Date
|
|
|
|
Number
Granted
|
|
Exercise
Price
|
|
CDN$
Value
|
||||||||
|
Part
(a)
|
||||||||||||||||
|
Director
and employee stock options
|
Nov.
22, 2011
|
80,000
|
$
|
5.74
|
$
|
459,200
|
||||||||||
|
Director
and employee stock options
|
April
14, 2016
|
7,050,000
|
$
|
5.32
|
$
|
37,506,000
|
||||||||||
|
Director
and employee stock options
|
June
28, 2011
|
30,000
|
$
|
5.18
|
$
|
155,400
|
||||||||||
|
Director
and employee stock options
|
Sept
12, 2011
|
100,000
|
$
|
5.15
|
$
|
515,000
|
||||||||||
|
Director
and employee stock options
|
Oct
10, 2011
|
30,000
|
$
|
4.69
|
$
|
140,700
|
||||||||||
|
Director
and employee stock options
|
Dec.
29, 2008
|
125,000
|
$
|
4.48
|
$
|
560,000
|
||||||||||
|
Director
and employee stock options
|
Feb.
13, 2011
|
1,730,206
|
$
|
4.35
|
$
|
7,526,396
|
||||||||||
|
Director
and employee stock options
|
April
12, 2014
|
3,510,000
|
$
|
4.07
|
$
|
14,285,700
|
||||||||||
|
Director
and employee stock options
|
Oct.
17, 2008
|
200,000
|
$
|
3.83
|
$
|
766,000
|
||||||||||
|
Director
and employee stock options
|
Nov.
7, 2009
|
15,000
|
$
|
3.70
|
$
|
55,500
|
||||||||||
|
Director
and employee stock options
|
Oct.
31, 2009
|
50,000
|
$
|
3.64
|
$
|
182,000
|
||||||||||
|
Director
and employee stock options
|
Jan.
30, 2010
|
173,000
|
$
|
3.59
|
$
|
621,070
|
||||||||||
|
Director
and employee stock options
|
Feb.
1, 2010
|
21,000
|
$
|
3.52
|
$
|
73,920
|
||||||||||
|
Director
and employee stock options
|
June
9, 2014
|
55,000
|
$
|
3.46
|
$
|
190,300
|
||||||||||
|
Director
and employee stock options
|
July
19, 2014
|
65,000
|
$
|
3.43
|
$
|
222,950
|
||||||||||
|
Director
and employee stock options
|
Jan
18, 2010
|
16,668
|
$
|
3.42
|
$
|
57,005
|
||||||||||
|
Director
and employee stock options
|
April
13, 2015
|
3,653,334
|
$
|
3.03
|
$
|
11,069,602
|
||||||||||
|
Director
and employee stock options
|
Aug.
21, 2008
|
100,000
|
$
|
2.98
|
$
|
298,000
|
||||||||||
|
Director
and employee stock options
|
July
3, 2010
|
50,000
|
$
|
2.91
|
$
|
145,500
|
||||||||||
|
Director
and employee stock options
|
Aug
31, 2010
|
30,000
|
$
|
2.81
|
$
|
84,300
|
||||||||||
|
Director
and employee stock options
|
July
10, 2010
|
300,000
|
$
|
2.79
|
$
|
837,000
|
||||||||||
|
Director
and employee stock options
|
May
9, 2010
|
8,334
|
$
|
2.74
|
$
|
22,835
|
||||||||||
|
Director
and employee stock options
|
May
29, 2010
|
46,700
|
$
|
2.59
|
$
|
120,953
|
||||||||||
|
Director
and employee stock options
|
May
15, 2010
|
50,000
|
$
|
2.42
|
$
|
121,000
|
||||||||||
|
Director
and employee stock options
|
May
19, 2008
|
3,143,417
|
$
|
1.49
|
$
|
4,683,691
|
||||||||||
|
Director
and employee stock options
|
April
19, 2007
|
500,000
|
$
|
1.04
|
$
|
520,000
|
||||||||||
|
Part
(b)
|
||||||||||||||||
|
EAGC—stock
options
|
Oct.
24, 2007
|
250,000
|
$
|
1.40
|
$
|
350,000
|
||||||||||
|
EAGC—Special
warrants
|
Oct.
22, 2007
|
TSX
listed spw
|
23,739,150
|
$
|
1.90
|
$
|
45,104,385
|
|||||||||
|
EAGC—bank
warrants
|
Oct.
24, 2007
|
spw
|
1,500,000
|
$
|
1.40
|
$
|
2,100,000
|
|||||||||
|
HVB—Bridge
warrants
|
April
28, 2010
|
500,000
|
USD
2.8000
|
$
|
1,733,900
|
|||||||||||
|
HVB—warrants
|
Jan.
24, 2011
|
100,000
|
USD
3.3500
|
$
|
414,898
|
|||||||||||
|
HVB—warrants
|
May
26, 2011
|
250,000
|
USD
5.7300
|
$
|
1,774,151
|
|||||||||||
|
IFC—Warrants
re: Kupol loan US$25 million
|
8,503,401
|
USD
2.9400
|
$
|
28,999,999
|
||||||||||||
|
Warrants
attached to Sep 7, 2006 private placement
|
Sept.
7, 2011
|
10,580,000
|
$
|
10.00
|
$
|
105,800,000
|
||||||||||
|
Part
(c)
|
||||||||||||||||
|
Convertible
notes
|
Feb.
26, 2011
|
15,008,576
|
USD
4.6640
|
$
|
94,500,000
|
|||||||||||
|
Total
options, warrants and convertible notes outstanding
|
81,794,574
|
$
|
361,996,640
|
|||||||||||||
SCHEDULE
F
Kinross
Options/Kinross Warrants
|
Plan
|
Outstanding(2)
|
Vested(2)
|
||
|
Warrants
(1) issued
pursuant to and governed by warrant indenture dated December 5,
2002.
|
8,333,333(1)
|
8,333,333(1)
|
||
|
Incentive
Stock Option Plan
|
2,445,668
|
1,021,081
|
||
|
Restricted
Share Plan dated February 15, 2001, as amended as of January 31,
2003,
February 28, 2004, May 10, 2004 and December 21, 2005
|
887,278
|
NIL
|
||
|
Deferred
Share Unit Plan dated September 30, 2003, as amended March 27,
2006
|
106,210.16
|
106,210.16
|
| (1) |
25,000,000
common share purchase warrants of Kinross are outstanding. Each three
common share purchase warrants are exercisable on or before 5:00
p.m.
(eastern standard time) on December 5, 2007 for one Kinross common
share
at an exercise price of Cdn.$15.00. The warrants will expire and
become
null and void after 5:00 p.m. (eastern standard time) on December
2,
2007.
|
| (2) |
As
of December 15, 2006.
|
SCHEDULE
G
Bema
Significant Interest Companies/Bema Subsidiaries
Where
less than all of the outstanding shares of any Bema Subsidiaries or outstanding
securities representing Bema’s interest in any Bema Significant Interest Company
are owned directly or indirectly, by Bema or a Bema Subsidiary, the aggregate
percentage ownership interest of Bema and the Bema Subsidiaries is
disclosed.
List
of Bema Subsidiaries
|
Jurisdiction
|
Jurisdiction
|
|
|
Canada
|
Chile
|
|
|
Andean
Avasca Resources Inc.
|
Compania
Minera San Damian
|
|
|
EAGC
Ventures Corp.
|
Minera
Bema Gold (Chile) Limitada
|
|
|
6674321
Canada Inc.
|
||
|
Barbados
|
Russia
|
|
|
Arian
Resources Limited
|
Bema
Gold Far East
|
|
|
Kupol
Au-Ag (Barbados) Inc.
|
Chukotka
Mining & Geological Company – 75% less one share
|
|
|
Omsukchansk
Mining and Geological Company – 90%
|
||
|
Bermuda
|
||
|
Colombian
Ventures Ltd.
|
South
Africa
|
|
|
Bema
Gold (Bermuda) Ltd.
|
Pomodzi
Gold Limited
|
|
|
BGO
(Bermuda) Ltd.
|
Petrex
(Proprietary) Ltd.
|
|
|
Avasca
Ventures Ltd.
|
||
|
Cyprus
|
||
|
Cayman
Islands
|
Chukotka
Ventures Limited
|
|
|
Chimera
Mines and Minerals Corp.
|
Kupol
Ventures Limited
|
|
|
CC28523
Limited
|
Sablecare
Limited
|
|
|
AC40689
Limited
|
BCK
Ventures Limited
|
|
|
British
Virgin Islands
|
United
States
|
|
|
White
Ice Ventures Limited
|
Bema
Gold (US) Inc.
|
List
of Bema Significant Interest Companies
|
Jurisdiction
|
Jurisdiction
|
|
|
Canada
|
Chile
|
|
|
Consolidated
Puma Minerals Corp. –
39%1
|
Compania
Xxxxxx Xxxxxx – 49%
|
|
|
Consolidated
Westview Minerals Corp. – 44%2
|
Compania
Minera Maricunga – 50%
|
|
|
Victoria
Resources Limited – 30%1
|
||
|
Rolling
Rock Resources Corp – 23%1
|
||
|
Russia
|
||
|
Kolskaya
Mining and Geological Company – 29%
|
1 Traded
on the TSX-V
2 Traded
on the NEX board of the TSX-V
SCHEDULE
H
Kinross
Significant Interest Companies/Kinross Subsidiaries
Where
less than all of the outstanding shares of any Kinross Subsidiaries or
outstanding securities representing Kinross’ interest in any Kinross Significant
Interest Company are owned directly or indirectly, by Kinross or a Kinross
Subsidiary, the aggregate percentage ownership interest of Kinross and the
Kinross Subsidiaries is disclosed.
List
of Kinross Subsidiaries
| Jurisdiction | Jurisdiction | |
|
Canada
|
Brazil
|
|
|
TVX
(Canada) Inc.
|
TVX
Mineracao Ltda
|
|
|
E-Crete
Products Inc. – 92%
|
TVX
Participacoes Inc.
|
|
|
Kinam
(B.C.) Ltd.
|
Montanapar
Participacoes Ltda.
|
|
|
Kinam
Exploration Canada Ltd.
|
Kinross
Empreendimentos e Participacoes S.A.
|
|
|
Crownex
Resources (Canada) Ltd.
|
Rio
Paracatu Mineracao S.A.
|
|
|
Gold
Texas Resources Ltd.
|
CNM
Brazil
|
|
|
6674348
Canada Inc.
|
MCT
Mineracao Ltda
|
|
|
United
States
|
Newinco
Comercio e Participacoes Ltda
|
|
|
Kinross
Gold U.S.A., Inc.
|
||
|
Enviro-Crete
Products Inc. – 92%
|
Chile
|
|
|
Echo
Bay Inc.
|
TVX
Minera de Chile Limitada
|
|
|
Echo
Bay Minerals Company
|
Compania
Nacional de Minera Limitada – 50.1%
|
|
|
Round
Mountain Gold Corporation
|
Echo
Bay Chile Ltda.
|
|
|
Echo
Bay Finance Corporation
|
Kinross
Minera Chile Limitada
|
|
|
Sunnyside
Gold Corporation
|
Compania
Xxxxxx Xxxxx Guanaco – 90%
|
|
|
Echo
Bay Alaska Inc.
|
||
|
White
Pine Gold Corporation
|
Cayman
Islands
|
|
|
Echo
Bay Management Corporation
|
TVX
Cayman Inc.
|
|
|
Echo
Bay Exploration Inc.
|
Cayman
Newinco Inc.
|
|
|
Kinross
Copper Corporation
|
Normandy
Cayman Holdco Inc.
|
|
|
Kinross
Offshore Services Company
|
Kinross
Americas (Cayman) Inc.
|
|
|
Kinross
Goldbanks Mining Company
|
Kinross
Americas (Cayman) Holdings Inc.
|
|
|
Kinross
XxXxxxx Mining Company
|
TVX
Investments SA
|
|
|
TVX
Delaware, Inc.
|
Cayman
Participacoes Inc.
|
|
|
TVX
Mineral Hill, Inc.
|
International
Gold Mining
|
|
|
Kinam
Gold Inc.
|
Miicre
Mining Investments Ltd.
|
|
|
Fairbanks
Gold Mining Inc.
|
TVX
SA
|
|
|
Kinam
Exploration Inc.
|
Macaines
Mining Properties Ltd.
|
|
|
Guanaco
Holdings Inc.
|
TVX
Mining Properties Ltd.
|
|
|
Xxxxx
Xxxxxxx Inc.
|
||
|
Xxxxx
Xxxxxxx Gold Corporation
|
Other
|
|
|
Xxxxx
Mining Company Inc.
|
TVX
(Barbados) Inc. (Barbados)
|
|
|
Lassen
Gold Mining Inc.
|
TVX
Hellas A.E. (Greece)
|
-2-
| Jurisdiction | Jurisdiction | |
|
Wind
Mountain Mining Inc.
|
Macedonian
Copper Mines S.A. (Greece)
|
|
|
Kinam
Chile Credit Corp. Inc.
|
Marwood
International Ltd (Bahamas)
|
|
|
Nevada
Gold Mining Inc.
|
TVX
South America SA (Uruguay)
|
|
|
Luning
Gold Inc.
|
Inversiones
871010 C.A. (Venezuela) – 90%
|
|
|
Electrum
Resources Corp.
|
Minera
Kinross Argentina S.A. (Argentina)
|
|
|
Xxxxx
Creek Mining Inc.
|
Kinross
Gold Australia Pty. Ltd. (Australia)
|
|
|
Guanaco
Mining Company Inc.
|
Echo
Bay Barbados Ltd. (Barbados)
|
|
|
Crown
Resources Corporation
|
Treasure
Valley Holdings Holdings s.r.o. (Czech Rep.)
|
|
|
Gold
Capital Corporation
|
Echo
Bay Ecuador S.A. (Ecuador)
|
|
|
Crown
Resource Corp. of Colorado
|
Omolon
Gold Mining Company (Russia) – 98.1%
|
|
|
Gold
Texas Resources U.S., Inc.
|
Kinross
Ecaudor S.A. (Ecaudor)
|
|
|
Crown
Minerals Corporation
|
Kinross
El Salvador S.A. (El Salvador)
|
|
|
Kinross
Aginskoye Gold Company L.L.C. – 50%
|
||
|
Netherlands
|
||
|
TVX
(Netherlands) B.V.
|
||
|
Echo
Bay International B.V.
|
||
|
Echo
Bay Mexico B.V.
|
||
|
Echo
Bay Brazil B.V.
|
||
|
Echo
Bay Ecuador B.V.
|
||
|
TVX
Dutch Holdings B.V.
|
List
of Kinross Significant Interest Companies
|
Jurisdiction
|
Jurisdiction
|
|
|
Canada
|
Chile
|
|
|
1126774
Ontario Ltd. – 50%
|
Compania
Minera Puren – 32.5%
|
|
|
Compania
Xxxxxx Xxxxxx de Oro – 50%
|
||
|
United
States
|
SCM
Minera La Coipa – 50%
|
|
|
Solitario
Resources Corporation – 41.2%
|
Compania
Minera Maricunga – 50%
|
|
|
Brazil
|
||
|
Mineracao
Novo Astro Ltda – 19%
|
||
|
Volta
Grande Mineracao Ltda – 50%
|
||
|
Mineracao
Serra Grande S.A. – 50%
|
SCHEDULE
I
Form
of Letter From Bema Affiliates
Kinross
Gold Corporation
52nd
Floor, Scotia Plaza
00
Xxxx
Xxxxxx Xxxx
Xxxxxxx,
Xxxxxxx X0X 0X0
Ladies
and Gentlemen:
I
have
been advised that as of the date hereof I may be deemed to be an “affiliate” of
Bema Gold Corporation (the “Company”), as the term “affiliate” is defined for
purposes of paragraphs (c) and (d) of Rule 145 (“Rule 145”) of the Rules and
Regulations (the “Rules and Regulations”) of the United States Securities and
Exchange Commission (the “SEC”) under the United States Securities Act of 1933,
as amended (the “1933 Act”). Capitalized terms used and not defined herein have
the same meaning as in the Arrangement Agreement, dated as of December 21,
2006
(the “Arrangement Agreement”), by and between Kinross Gold Corporation
(“Kinross”) and the Company.
I
have
been further advised that pursuant to the terms of the Arrangement Agreement,
the Company will undergo a plan of arrangement with Kinross or a wholly-owned
subsidiary of Kinross (the “Arrangement”), with the result that Kinross or a
wholly-owned subsidiary of Kinross shall be the surviving corporation in the
Arrangement, and as a result, I may be eligible to receive common shares of
Kinross (“Kinross Common Shares”), or warrants, options or convertible
debentures exercisable or convertible according to their terms for Kinross
Common Shares (such warrants, options or convertible debentures together with
Kinross Common Shares, “Kinross Securities”), in exchange for common shares of
the Company (or options, warrants or convertible debentures exercisable or
convertible therefor) owned by me.
I
hereby
represent, warrant and covenant to Kinross that in the event I receive any
Kinross Securities pursuant to the Arrangement:
1. I
shall
not make any sale, transfer or other disposition of the Kinross Securities
in
violation of the 1933 Act or the Rules and Regulations.
2. I
have
carefully read this letter and the Arrangement Agreement and discussed its
requirements and other applicable limitations upon my ability to sell, transfer
or otherwise dispose of Kinross Securities to the extent I believed necessary
with my counsel or with counsel for the Company.
-2-
3. I
have
been advised that any issuance of Kinross Securities to me pursuant to the
Arrangement Agreement will be exempt from the registration requirements of
the
1933 Act and the Rules and Regulations. I have also been advised that, since
at
the time the Arrangement will be submitted to the shareholders of the Company
for approval, I may be an “affiliate” of the Company, any sale or disposition by
me of any of the Kinross Securities may only be made, under current U.S. law,
in
accordance with the provisions of paragraph (d) of Rule 145 under the 1933
Act,
pursuant to an effective registration statement under the 1933 Act or pursuant
to an exemption thereunder (including the exemption provided by Regulation
S
under the 1933 Act for offers or sales of securities made outside of the United
States). I agree that I will not sell, transfer, or otherwise dispose of Kinross
Securities issued to me in the Arrangement unless (i) such sale, transfer or
other disposition has been registered under the 1933 Act; (ii) such sale,
transfer or other disposition is made in conformity with the volume and other
limitations of Rule 144 under the 1933 Act; (iii) such sale, transfer or other
disposition is made in conformity with Regulation S under the 1933 Act or (iv)
in the written opinion of counsel, which opinion and counsel shall be reasonably
acceptable to Kinross, such sale, transfer or other disposition is otherwise
exempt from registration under the 1933 Act.
4. I
understand that Kinross is under no obligation to register the sale, transfer
or
other disposition of the Kinross Securities by me or on my behalf or to take
any
other action necessary to make compliance with an exemption from registration
available.
It
is
understood and agreed that this letter agreement shall terminate and be of
no
further force and effect if (i) any such Kinross Securities shall have been
registered under the 1933 Act for sale, transfer or other disposition by me
or
on my behalf and are sold, transferred or otherwise disposed of, or (ii) any
such Kinross Securities are sold in accordance with the provisions of paragraphs
(c), (e), (f) and (g) of Rule 144 promulgated under the 1933 Act, or (iii)
I am
not at the time an affiliate of Kinross and have been the beneficial owner
of
Kinross Securities for at least one year (or such other period as may be
prescribed by the 1933 Act and the Rules and Regulations), and Kinross has
filed
with the SEC all of the reports it is required to file under the Securities
Exchange Act of 1934, as amended, during the preceding 12 months, or (iv) I
am
not and have not been for at least three months an affiliate of Kinross and
have
been the beneficial owner of Kinross Securities for at least two years (or
such
other period as may be prescribed by the 1933 Act and the Rules and
Regulations).
| Sincerely, | |
|
Dated: |
|
| Accepted this __ day of __, 2007 | |
| KINROSS GOLD CORPORATION | |
| |
|
| By: | |
|
Name: |
|
| Title: | |
