Exhibit
99.2
CAYSTAR HOLDINGS
- and -
GOLDEN
STAR RESOURCES LTD.
- and -
Future
Global Resources Limited
-
and -
BLUE
INTERNATIONAL HOLDINGS LIMITED
SHARE PURCHASE AGREEMENT
JULY 26, 2020
Table
of Contents
|
Page |
Article 1 INTERPRETATION |
2 |
|
1.1 |
Definitions |
2 |
|
1.2 |
Rules of Construction |
15 |
|
1.3 |
Currency |
16 |
|
1.4 |
Time of Essence |
16 |
|
1.5 |
Schedules |
16 |
|
1.6 |
Nomination of alternative Buyer |
17 |
Article 2 TRANSFER OF PURCHASED SHARES AND CLOSING ARRANGEMENTS |
17 |
|
2.1 |
Transfer of Purchased Shares |
17 |
|
2.2 |
Purchase Price |
18 |
|
2.3 |
Pre-Closing Statement |
18 |
|
2.4 |
Cash, Debt and Working Capital Adjustment |
19 |
|
2.5 |
Sulphides Contingent Payment |
20 |
|
2.6 |
Transfer of Property or Mineral Rights |
20 |
|
2.7 |
Closing Date |
21 |
|
2.8 |
Place of Closing |
21 |
|
2.9 |
Delivery of Closing Documentation from Seller to the Buyer |
22 |
|
2.10 |
Delivery of Closing Documentation from Buyer to the Seller |
23 |
Article 3 COVENANTS OF THE PARTIES DURING THE PRE-CLOSING PERIOD |
23 |
|
3.1 |
Actions to Satisfy Closing Conditions |
23 |
|
3.2 |
Regulatory Approvals |
23 |
|
3.3 |
Conduct of Business of the Members of the Company Group |
25 |
|
3.4 |
Notice of Certain Events |
27 |
|
3.5 |
Access |
28 |
|
3.6 |
Public Statements |
28 |
|
3.7 |
Financing |
28 |
|
3.8 |
Buyer Shareholder Guarantee |
29 |
|
3.9 |
Golden Star Guarantee |
29 |
|
3.10 |
Non-Compete by Seller |
30 |
|
3.11 |
Non-Solicit by Seller |
30 |
|
3.12 |
Non-Solicit by Buyer or the Company Group |
31 |
|
3.13 |
Wrong Pockets |
32 |
|
3.14 |
Change of Name |
32 |
Article 4 Covenants of THE BUYER DURING THE DEFERRED PAYMENT PERIOD |
32 |
|
4.1 |
Reporting Obligations |
32 |
Article 5 REPRESENTATIONS AND WARRANTIES OF THE SELLER |
33 |
|
5.1 |
Existence of the Seller and members of Company Group |
33 |
|
5.2 |
Execution, Delivery and Enforceability |
33 |
|
5.3 |
Insolvency |
33 |
|
5.4 |
No Conflict |
33 |
|
5.5 |
Ownership of the Purchased Shares; Subsidiaries |
34 |
Table
of Contents
(continued)
|
|
|
Page |
|
5.6 |
Consents |
34 |
|
5.7 |
No Other Agreements to Purchase; No Options |
35 |
|
5.8 |
Company Group Financial Statements |
35 |
|
5.9 |
No Undisclosed Liabilities |
35 |
|
5.10 |
Absence of Changes |
35 |
|
5.11 |
Information |
35 |
|
5.12 |
Books and Records |
36 |
|
5.13 |
Insurance |
36 |
|
5.14 |
Litigation |
36 |
|
5.15 |
Taxes |
36 |
|
5.16 |
Employment Matters |
37 |
|
5.17 |
Mineral Property and Mineral Rights |
38 |
|
5.18 |
Assets |
39 |
|
5.19 |
Permits |
40 |
|
5.20 |
[Reserved] |
40 |
|
5.21 |
Affiliate Transactions |
40 |
|
5.22 |
Agreements and Commitments |
40 |
|
5.23 |
Environmental and Health and Safety Matters |
41 |
|
5.24 |
Company Group Intellectual Property |
42 |
|
5.25 |
Compliance with Laws |
42 |
|
5.26 |
Unlawful Contributions |
42 |
|
5.27 |
Community Relations |
43 |
|
5.28 |
Finders' Fee |
43 |
|
5.29 |
No Other Representations and Warranties |
43 |
Article 6 REPRESENTATIONS AND WARRANTIES OF GOLDEN STAR |
44 |
|
6.1 |
Existence of Golden Star |
44 |
|
6.2 |
Execution, Delivery and Enforceability |
44 |
|
6.3 |
No Conflict |
44 |
|
6.4 |
Ownership |
44 |
|
6.5 |
Compliance with Laws |
44 |
|
6.6 |
Unlawful Contributions |
44 |
Article 7 REPRESENTATIONS AND WARRANTIES OF THE BUYER |
45 |
|
7.1 |
Existence and Corporate Approvals |
45 |
|
7.2 |
Execution, Delivery and Enforceability |
45 |
|
7.3 |
Insolvency |
46 |
|
7.4 |
No Conflict |
46 |
|
7.5 |
Consents and Regulatory Approvals |
46 |
|
7.6 |
Compliance with Laws |
46 |
|
7.7 |
Unlawful Contributions |
46 |
|
7.8 |
Litigation |
47 |
|
7.9 |
Finders' Fee |
47 |
Article 8 Representations and warranties of the buyer Shareholder |
47 |
|
8.1 |
Existence of the Buyer Shareholder |
47 |
|
8.2 |
Compliance with Laws |
47 |
Table
of Contents
(continued)
|
|
|
|
|
|
|
Page |
|
|
The Buyer Shareholder is conducting, and has conducted, its business and operations in compliance in all material respects with applicable Laws. |
47 |
|
8.3 |
Unlawful Contributions |
47 |
|
8.4 |
Execution, Delivery and Enforceability |
48 |
|
8.5 |
No Conflict |
48 |
Article 9 CLOSING CONDITIONS |
48 |
|
9.1 |
Mutual Conditions |
48 |
|
9.2 |
Closing Conditions in Favour of the Buyer |
49 |
|
9.3 |
Closing Conditions in favour of the Seller |
51 |
Article 10 SURVIVAL AND INDEMNIFICATION |
51 |
|
10.1 |
Survival of Representations, Warranties and Covenants |
51 |
|
10.2 |
Indemnification by the Seller |
52 |
|
10.3 |
Indemnification by the Buyer |
52 |
|
10.4 |
Tax Indemnity |
52 |
|
10.5 |
Seller Specific Indemnities |
53 |
|
10.6 |
Limitation of Liability. |
53 |
|
10.7 |
Notice of Claim |
54 |
|
10.8 |
Time Limits |
55 |
|
10.9 |
Direct Claims |
56 |
|
10.10 |
Third Party Claims |
56 |
|
10.11 |
Adjustments |
57 |
|
10.12 |
Set-Off |
59 |
Article 11 TERMINATION |
59 |
|
11.1 |
Termination |
59 |
|
11.2 |
Effect of Termination |
60 |
|
11.3 |
Surviving Provisions on Termination |
60 |
|
11.4 |
Remedies |
60 |
Article 12 GENERAL PROVISIONS |
61 |
|
12.1 |
Notices |
61 |
|
12.2 |
Applicable Law |
62 |
|
12.3 |
Entire Agreement |
62 |
|
12.4 |
Remedies Cumulative |
63 |
|
12.5 |
Severability |
63 |
|
12.6 |
No Waiver |
63 |
|
12.7 |
Further Assurances |
63 |
|
12.8 |
Amendments |
63 |
|
12.9 |
Assignment |
63 |
|
12.10 |
Enurement |
63 |
|
12.11 |
Expenses |
64 |
|
12.12 |
Counterparts |
64 |
Schedule “A” |
69 |
Schedule “B” |
70 |
Table
of Contents
(continued)
|
Page |
Schedule “C” |
71 |
Schedule “D” |
78 |
Schedule “E” |
79 |
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made the 26th
day of July, 2020
A M O N G:
CAYSTAR HOLDINGS, an exempted
company existing under the laws of the Cayman Islands with company registration number 73577 and having its registered office at
190 Elgin Avenue, Xxxxxx Town, Grand Cayman, KY1 - 9005, Cayman Islands (the “Seller”);
- and -
GOLDEN
STAR RESOURCES LTD., a corporation existing under the federal laws of Canada with company registration number 282128-1
and having its registered office at 000 Xxx Xxxxxx, Xxxxxxx, Xxxxxxx X0X 0X0 (“Golden Star”);
- and -
Future
Global Resources Limited, a corporation existing under the laws of England and Wales with company registration number
12380930 and having its registered office at 0xx Xxxxx Xxxx, Xxxxxxx Xxxxxx, 00-00 Xxxxxx Xxxxxx, Xxxxxx XX0 0XX, XX (the “Buyer”);
- and -
BLUE INTERNATIONAL HOLDINGS LIMITED,
a corporation existing under the laws of England and Wales with company registration number 10638438 and having its registered
office at 0xx Xxxxx Xxxx, Xxxxxxx Xxxxxx, 00-00 Xxxxxx Xxxxxx, Xxxxxx XX0 0XX, XX (“Buyer Shareholder”);
WHEREAS the Seller wishes to
sell to the Buyer and the Buyer wishes to purchase from the Seller the Purchased Shares, on the terms hereinafter set forth;
AND WHEREAS the Buyer Shareholder
wishes to guarantee the Buyer Payment Obligations (as defined herein) in favour of the Seller, on the terms hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES
THAT in consideration of the respective covenants and agreements of the Parties hereinafter contained and other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged by each Party), the Parties agree as follows:
Article
1
INTERPRETATION
1.1 Definitions
In this Agreement (including the recitals
and the Schedules hereto), the following terms shall have the respective meanings set out below and grammatical variations of such
terms shall have the corresponding meanings:
| (a) | “Accounting Principles” means the accounting principles, practices and procedures
set out in Schedule “C”; |
| (b) | “Actual Closing Date Amount” means Actual Closing Working Capital minus Actual
Closing Net Debt; |
| (c) | “Actual Closing Net Debt” means Debt minus Cash, in each case, of the Company
Group prepared on a combined basis as of the Effective Time, determined in accordance with the Accounting Principles and as set
out in the Balancing Payment Calculation. Actual Closing Net Debt shall be expressed as a positive amount if it is a net liability
of the Company Group or a negative amount if it is a net asset of the Company Group; |
| (d) | “Actual Closing Working Capital” means the Working Capital of the Company Group
prepared on a combined basis as of the Effective Time, determined in accordance with the Accounting Principles as set out in the
Balancing Payment Calculation; |
| (e) | “Affiliate” means, with respect to any person, any person which directly or
indirectly Controls, or is Controlled by, or is under common Control with, that person; provided that Xx Xxxxxx Holding S.A.R.L.
shall not be an “Affiliate” of Golden Star, the Seller or the Company Group for the purposes of this Agreement; |
| (f) | “Agreement” means this Share Purchase Agreement (including the Schedules hereto),
as the same may be amended from time to time in accordance herewith; |
| (g) | “AML Legislation” means the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act (Canada), the United Kingdom’s Proceeds of Crime Xxx 0000 (POCA), the Anti-Money Laundering Act, 2008 (Act
749) (Ghana) and other applicable anti-money laundering and anti-terrorist financing applicable Laws, whether within Canada, the
United States, the United Kingdom, Ghana or, to the extent applicable, to the applicable Party elsewhere, including any regulations,
guidelines or orders thereunder; |
| (h) | “Anti-Corruption Laws” means the Corruption of Foreign Public Officials Act
(Canada), the United States Foreign Corrupt Practices Act, the United Kingdom Xxxxxxx Xxx 0000, the Ghanaian Anti-Corruption
Laws and all other laws, rules, and regulations of any jurisdiction applicable to the Company Group and the Buyer from time to
time concerning or relating to bribery or corruption; |
| (i) | “Area of Interest” means any real property or interest or any Mineral Rights,
any part of which lies within 5 kilometers from the external boundaries perimeter of the Company Xxxxx Xxxxxxxx Property Mineral
Rights; |
| (j) | “Asikuma Net Smelter Return Royalty Agreement” means the net smelter royalty
agreement dated July 15, 2003 between the Company Subsidiary (at the time, known as Bogoso Gold Limited), Golden Star Resources
Ltd. and Xxxxx Goldfields (Ghana) Limited; |
| (k) | “Assets” means all real property, personal property, mining rights and water
rights of the Company Group; |
| (l) | “Average Gold Price” means the average LBMA (PM) Gold Price as quoted by ICE
Benchmark Administration, or in the absence of the LBMA (PM) Gold Price, such other spot gold market benchmark agreed between Seller
and Buyer, determined over a period of 90 days immediately preceding the day the Sulphides Decision to Proceed is made or occurs; |
| (m) | “Balancing Payment” means an amount equal to the variance between the Actual
Closing Date Amount and the Reference Amount; |
| (n) | “Balancing Payment Calculation” has the meaning set forth in Section 2.4(a); |
| (o) | “B/P Refractory Mineral Resources” means the ‘Bogoso/Prestea Refractory’
mineral resources (measured, indicated and inferred) as of December 31, 2019 as disclosed on the Golden Star website in July 2020,
and as set forth in Schedule 1.1(o) of the Seller Disclosure Letter; |
| (p) | “Bogoso Sulphide Project” means any project directed at or for the purpose of
developing, mining and/or exploiting the B/P Refractory Mineral Resources; |
| (q) | “Business Day” means any day, other than a Saturday, Sunday or statutory holiday
in the Province of Ontario, Canada, Xxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx, Xxxxxx Xxxxxxx, or Accra, Ghana on which commercial banks
in Toronto, Ontario, Xxx Xxxx, Xxxxxx Xxxxxx, Xxxxxx, Xxxxxx Xxxxxxx and Accra, Ghana are open for business; |
| (r) | “Business Records” includes all original, if available, and copies of the books,
records, documents, information, accounts and data owned by the Company Group that relate to the business of the Company Group
and/or the Bogoso Sulphide Project including to the extent applicable (i) customer and supplier lists; (ii) records of the Contracts
to which a Company Group member is a party and that are in the possession of the Seller, the Company Group or their Affiliates;
(iii) invoices and other records relating to the liabilities of the Company Group; (iv) records of the Employees; (v) records of
the Assets of the Company Group; (vi) keys, codes, passwords and other combinations including those relating to the information
systems, safes and other means of secure storage (whether physical or digital); (vi) any records, documents or information relating
to the Company Xxxxx Xxxxxxxx Property Mineral Rights and any other Mineral Rights owned or which were owned by the Company Group
within five (5) years preceding the date of this Agreement including any such rights that have been relinquished and (vi) those
items listed in Schedule “E”; |
| (s) | “Buyer Fundamental Representations” means the representations and warranties
of the Buyer in Sections 7.1 and 7.2 and the representations and warranties of the Buyer Shareholder in Sections 8.1 and 8.4; |
| (t) | “Buyer Xxxxx Xxxxxxxx Adverse Change” means a change, effect, circumstance or
event that, individually or in the aggregate, is, or would reasonably be expected to be, material and adverse to the business,
properties, assets, financial condition or results of operations of the Buyer or the Buyer Shareholder or the ability of either
of them to pay the Closing Consideration or the payments due under Sections 2.2(b)i, 2.2(c) or 2.2(d), provided however that no
change, effect, circumstance or event, arising from or relating to any of the following, shall be deemed to constitute a Buyer
Xxxxx Xxxxxxxx Adverse Change or shall be taken into account in determining whether a Buyer Xxxxx Xxxxxxxx Adverse Change has occurred:
(i) the state of the securities, credit, banking, capital or commodity markets in general; (ii) any change relating to the rate
at which any currency can be exchanged for any other currency; (iii) general political, economic or financial conditions, including
in Canada or the United Kingdom; (iv) any adoption, implementation, change or proposed change in applicable Laws or IFRS (or in
any interpretation of applicable Laws or IFRS); (v) the announcement of the execution of this Agreement or the implementation of
any of the transactions contemplated herein; or (vi) any change, effect, circumstance or event impacting the Buyer or the Buyer
Shareholder as a result of epidemic or pandemic including COVID-19; except in the case of (i), (ii), (iii), (iv) and (vi) above,
where such change, effect, circumstance or event has a materially disproportionate effect on the Buyer or the Buyer Shareholder
relative to comparable companies or ventures; and provided further that the exceptions in this clause shall not prevent or otherwise
affect a determination that any change, effect, circumstance or event underlying such failure that is not otherwise excluded from
the definition of Buyer Xxxxx Xxxxxxxx Adverse Change has resulted in a Buyer Xxxxx Xxxxxxxx Adverse Change; |
| (u) | “Buyer Knowledge Person” means each of: |
| (i) | Xxxxxx Xxxxxxxx, Executive Director, Buyer Shareholder; |
| (ii) | Xxxx Xxxxx, Executive Director, Buyer Shareholder; |
| (iii) | Xxxxx Xxxxxxx, Chief Executive Officer, Buyer; and |
| (iv) | Xxxxx Xxxxxx, Chief Financial Officer, Buyer; |
| (v) | “Buyer Payment Obligations” has the meaning set out in Section 3.8(a). |
| (w) | “Cash” means all cash and cash equivalents of any kind (including bank account
balances, marketable securities, short term investments and cleared checks) of the Company Group, whether on hand or on deposit; |
| (x) | “Claim” has the meaning set out in Section 10.7(a); |
| (y) | “Closing” means completion of the acquisition of the Purchased Shares as contemplated
hereby; |
| (z) | “Closing Consideration” means US$30,000,000 plus the Reference Amount; |
| (aa) | “Closing Date” means the later to occur of (i) September 30, 2020 or (ii) the
third Business Day following the satisfaction or waiver of all the conditions to Closing set out in Article 9, or such other date
as may be agreed to in writing by the Seller, on the one hand and the Buyer, on the other hand; |
| (bb) | “Community” means the local community in proximity to the Company Xxxxx Xxxxxxxx
Property; |
| (cc) | “Company” means Bogoso Holdings, an exempted company incorporated under the
laws of the Cayman Islands with registered number 92060, and having its registered office at 000 Xxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxx
Xxxxxx, XX0 - 0000, Cayman Islands; |
| (dd) | “Company Group” means the Company and the Company Subsidiary; |
| (ee) | “Company Group Financial Statements” means the unaudited combined income statement
of the Company Group for the six month period ended on June 30, 2020 and the unaudited combined balance sheet of the Company Group
as at June 30, 2020, as set out in Schedule 1.1(ee) of the Seller Disclosure Letter; |
| (ff) | “Company Xxxxx Xxxxxxxx Adverse Change” means a change, effect, circumstance
or event that, individually or in the aggregate, is, or would reasonably be expected to be, material and adverse to the business,
properties, assets, financial condition or results of Operations of the Company Group, provided however that no change, effect,
circumstance or event, arising from or relating to any of the following, shall be deemed to constitute a Company Xxxxx Xxxxxxxx
Adverse Change or shall be taken into account in determining whether a Company Xxxxx Xxxxxxxx Adverse Change has occurred: (i)
any change or condition generally affecting the gold mining industry; (ii) the state of the securities, credit, banking, capital
or commodity markets in general; (iii) any change in the price of gold; (iv) any change relating to the rate at which any currency
can be exchanged for any other currency; (v) general political, economic or financial conditions, including in Canada, the United
Kingdom or Ghana; (vi) any adoption, implementation, change or proposed change in applicable Laws or IFRS (or in any interpretation
of applicable Laws or IFRS); (vii) any natural disaster; (viii) any terrorist attack, armed hostilities, military conflicts, local
civil disturbances or any governmental response to any of the foregoing but excluding any of the foregoing targeted at or specifically
affecting the Bogoso Sulphide Project or the business of the Company Group; (ix) the announcement of the execution of this Agreement
or the implementation of any of the transactions contemplated herein; (x) any failure by the Company Group to meet any public estimates
or expectations, including estimates or expectations in respect of revenue, earnings or other financial performance or results
of operations for any period; or (xi) any change, effect, circumstance or event impacting the Company Group as a result of epidemic
or pandemic including COVID-19; except in the case of (i), (ii), (iii), (v), (viii) and (xi) above, where such change, effect,
circumstance or event has a materially disproportionate effect on the Company Group relative to comparable companies or ventures
operating in the gold mining industry in West Africa; and provided further that the exceptions in this clause shall not prevent
or otherwise affect a determination that any change, effect, circumstance or event underlying such failure that is not otherwise
excluded from the definition of Company Xxxxx Xxxxxxxx Adverse Change has resulted in a Company Xxxxx Xxxxxxxx Adverse Change; |
| (gg) | “Company Xxxxx Xxxxxxxx Property” means the property known as Bogoso/Prestea,
located in the Wassa West District of the Western Region of the Republic of Ghana the boundaries of which are set by the Company
Xxxxx Xxxxxxxx Property Mineral Rights; |
| (hh) | “Company Xxxxx Xxxxxxxx Property Mineral Rights” means the Mineral Rights relating
to the Company Xxxxx Xxxxxxxx Property, as described and reflected in the list attached as Schedule “A”; |
| (ii) | “Company Xxxxx Xxxxxxxx Property Technical Report” means the technical report
publicly filed by the Seller with respect to the Company Xxxxx Xxxxxxxx Property titled “NI 43-101 Technical Report on Resources
and Reserves Golden Star Resources Ltd., Bogoso/Prestea Gold Mine, Ghana” effective date December 31, 2017, and filed on
March 29, 2018; |
| (jj) | “Company Subsidiary” means Golden Star (Bogoso/Prestea) Limited, a company organized
under the laws of Ghana; |
| (kk) | “Company Subsidiary Shares” has the meaning set out in Section 5.5; |
| (ll) | “Consent” means a consent, approval, order, authorization, filing, notice or
declaration; |
| (mm) | “Contract” means any agreement, indenture, contract, lease, deed of trust, royalty,
licence, option, instrument, arrangement, understanding or other commitment, whether written or oral; |
| (nn) | “Control” means possession, directly or indirectly, of the power to direct or
cause the direction of management and policies through ownership of voting shares, interests or securities, or by contract, voting
trust or otherwise; and “Controlled” and “Controlling” shall have corresponding meanings; |
| (oo) | “Debt” means the sum of, without duplication, (i) debts and liabilities of the
Company Group for borrowed money; (ii) debts and liabilities representing the deferred acquisition cost of property and services;
and (iii) Transaction Expenses provided, that Debt shall not include (i) liabilities captured within Working Capital; (ii) any
deferred tax assets and deferred tax liabilities, and (iii) the Retained Intercompany Balance and, solely for the purposes of the
Estimated Net Debt, any other debt to which the Company Group will not be subject following the Pre-Closing Restructure; |
| (pp) | [Redacted - Commercially Sensitive Information]; |
| (qq) | “Deferred Payment Period” means the period commencing on the Closing Date and
ending on the day, if any when the Sulphides Contingent Payment has been paid in full to the Seller in accordance with Section
2.5; |
| (rr) | “Direct Claim” has the meaning set out in Section 10.7(a); |
| (ss) | “Due Diligence Questionnaire” means the written question and answer tracker(s)
requested by the Buyer, its Affiliates and its advisers and responded to by or on behalf of the Seller prior to the Execution Date,
as set forth in Schedule 1.1(ss) of the Seller Disclosure Letter; |
| (tt) | “Effective Time” means 12:01 am (Ghana time) on the Closing Date; |
| (uu) | “Employees” means all individuals employed by any member of the Company Group
as at Closing and, solely for the purpose of Section 3.11, all individuals employed by any member of the Company Group within the
period commencing on Closing and ending six (6) months later, provided that written notice of the names of such individuals are
provided in writing to the Seller and Golden Star; |
| (vv) | “Encumbrance” means any lien, charge, hypothec, pledge, mortgage, title retention
agreement, pre-emption right, option, right of first refusal, power of sale, covenant, condition, lease, license, security interest
of any nature, claim, exception, reservation, easement, encroachment, right of occupation, right-of-way, right- of-entry, matter
capable of registration against title, or any other encumbrance or charge or title defect of any nature whatsoever, whether or
not consensual or arising by Law, or any Contract to create any of the foregoing; |
| (ww) | “Environmental Laws” means all applicable Laws relating to the protection of
the environment and includes those relating to pollution, protection, use or conservation of the environment or natural resources,
the protection of public health and safety, the protection of worker health and safety (solely to the extent related to exposure
to Hazardous Substances), Hazardous Substances, or the reclamation, rehabilitation, closure or other restoration of mining properties.
For greater certainty, an Environmental Law pertaining to the protection, use or conservation of the environment shall include
all such Environmental Laws relating to the manufacture, processing, generation, use, treatment, storage, disposal, transport,
Release, containment, reclamation, rehabilitation, closure or other restoration of any tailings, waste rock, tailings ponds or
Hazardous Substances; |
| (xx) | “Estimated Net Debt” means the estimate of Net Debt to be prepared by the Seller
5 Business Days prior to Closing in a manner consistent with the Closing Consideration calculation set out in Schedule “C”; |
| (yy) | “Estimated Working Capital” means the estimate of Working Capital to be prepared
by the Seller 5 Business Days prior to Closing in a manner consistent with the Closing Consideration calculation set out in Schedule
“C”; |
| (zz) | “Excluded Employees” has the meaning set out in Section 3.11(e); |
| (aaa) | “Execution Date” means the date hereof; |
| (bbb) | “Expert” has the meaning set out in Section 2.4(d); |
| (ccc) | “Ghanaian Anti-Corruption Laws” means any Ghanaian anti-bribery and good business
ethics legislation, regulations and/or codes, as amended from time to time, including, but not limited to, the Criminal Offences
Act, 1960 (Act 29), the Office of the Special Prosecutor Act, 2017 (Act 959), the Financial Xxxxxxxxxxxxxx Xxx, 0000 (Act 654),
the Xxxxxxxxxxxxx Xxx, 0000 (Act 720), the Xxxxxxxxxx Xxx, 0000 (Act 300), the Customs Act, 2015 (Act 891), and the Economic and
Organised Crime Act, 2010 (Act 804); |
| (ddd) | “Governmental Authority” means any: (a) multinational, national, federal, provincial,
state, territorial, municipal, local or other government (whether domestic or foreign); (b) governmental or quasi-governmental
authority of any nature, including any stock exchange or any governmental ministry, agency, branch, department, commission, commissioner,
board, tribunal, bureau or instrumentality (whether domestic or foreign); or (c) body exercising or entitled to exercise any administrative,
executive, judicial, legislative, regulatory or taxing authority or power under or for the account of any of the foregoing, including
any court, arbitrator or arbitration tribunal; |
| (eee) | “GSOPP” means Golden Star Oil Palm Plantations Limited, a company incorporated
under the laws of Ghana and having its registered office at Xxxx Xx. 00, Xxxxx X, Xxxxxx Xxxxxx Xxxxxx, Xxxxx Ridge, Accra. X.X.
Xxx 00000, XXX, Xxxxx, Xxxxx; |
| (fff) | “Hazardous Substances” means any substance, material or waste defined, regulated,
listed or prohibited by Environmental Laws, including pollutants, contaminants, chemicals, deleterious substances, dangerous goods,
hazardous or industrial toxic wastes or substances, tailings, radioactive materials, explosives, petroleum and petroleum products
and polychlorinated biphenyls; |
| (ggg) | “Health and Safety Laws” means all applicable Laws that relate to or apply to
the health and safety of any person; |
| (hhh) | “IFRS” means the International Financial Reporting Standards, International
Accounting Standards and interpretations of those standards issued by the International Accounting Standards Board and the International
Financial Reporting Interpretations Committee and their predecessor bodies, at the relevant time; |
| (iii) | “Indemnified Party” has the meaning set out in Section 10.7(a); |
| (jjj) | “Indemnifying Party” has the meaning set out in Section 10.7(a); |
| (kkk) | “Intellectual Property” means all trade or brand names, business names, trade-marks
(including logos), trade-xxxx registrations and applications, service marks, service xxxx registrations and applications, copyrights,
copyright registrations and applications, issued patents and pending applications and other patent rights, industrial design registrations,
pending applications and other industrial design rights, trade secrets, proprietary information and know-how owned or used by the
Company Group together with all rights under licenses, registered user agreement, technology transfer agreements and other agreements
or instruments relating to the foregoing; |
| (lll) | “Laws” means international, national, provincial, state, municipal and local
laws (including common and civil law), treaties, statutes, codes, ordinances, judgements, decrees, injunctions, writs, certificates
and orders, by-laws, rules, regulations, ordinances, or other requirements enacted, adopted, promulgated or applied by any Governmental
Authority in each case having the force of law, and the term “applicable” with respect to such Laws and in a context
that refers to one or more persons, means such Laws as are applicable to such person or its business, undertaking, property or
securities and emanate from a person having jurisdiction over the person or its or their business, undertaking, property or securities; |
| (mmm) | “LBMA” means the London Bullion Market Association; |
| (nnn) | “Loss” or “Losses” means all claims, demands, proceedings,
fines, losses, damages, liabilities, deficiencies, costs and expenses (including all reasonable legal and other professional fees
and disbursements, interest, penalties, judgments and amounts paid in settlement) arising directly or indirectly as a consequence
of the matter giving rise to such Loss or Losses; |
| (ooo) | “Macquarie Facility” means the loan facility made available by Macquarie Bank
Limited to Golden Star pursuant to that certain credit agreement, dated as of October 10, 2019, between, inter alia, Golden Star,
as borrower, and Macquarie Bank Limited, as lender, providing for a term loan in an aggregate principal amount of US$60,000,000.00,
on and subject to the terms and conditions set forth therein; |
| (ppp) | “Mansiso Net Smelter Return Royalty Agreement” means the net smelter royalty
agreement dated July 15, 2003 between the Company Subsidiary (at the time known as Bogoso Gold Limited), Golden Star Resources
Ltd. and Xxxxx Goldfields (Ghana) Limited; |
| (qqq) | “Material Contract” means a Contract to which a person is a party: (A) which,
if terminated or modified or if it ceased to be in effect, would result in a Company Xxxxx Xxxxxxxx Adverse Change; (B) that has
annual payment obligations that are in excess of US$1,500,000; (C) that relates to indebtedness for borrowed money, whether incurred,
assumed, guaranteed or secured by any asset, with an outstanding principal amount in excess of US$1,500,000; (D) that relates to
the acquisition or disposition of any material business (whether by merger, sale of stock, sale of assets or otherwise); (E) that
materially limits or restricts a person from engaging in any line of business, in any geographic area or with any other person,
or from engaging in any merger, consolidation or other business combination; (F) that provides for the assumption of any material
liability of any other person by a person; or (G) that is an interest rate, currency, equity or commodity swap, hedge, derivative,
forward sales contract or similar financial instrument that is material to a person; |
| (rrr) | “Mineral Rights” means a right and license granted by the Government of Ghana
to: |
| (i) | undertake prospecting operations in respect of minerals in a specified area in the Republic of
Ghana, including a prospecting licence granted pursuant to Sections 34 or 35 of the Minerals and Mining Act, 2006 (Act 703) or
any equivalent preceding or subsequent legislation; and/or |
| (ii) | to mine and produce minerals in a specified area in the Republic of Ghana, including a mining lease,
restricted mining lease or small scale mining lease granted pursuant to Sections 39 or 40 or the Mining Act, 2006 (Act 703) or
any equivalent preceding or subsequent legislation; |
| (sss) | “Mineral Title Opinion” means an opinion delivered by REM Law Consultancy consistent
with the form set forth in Schedule 1.1(sss) of the Seller Disclosure Letter; |
| (ttt) | “Minimum Loss Amount” means the sum of US$250,000; |
| (uuu) | “NI 43-101” means National Instrument 43-101 - Standards of Disclosure for
Mineral Projects; |
| (vvv) | “Nominee” has the meaning set out in Section 1.6(a); |
| (www) | “Notice of Claim” has the meaning set out in Section 10.7(a); |
| (xxx) | “Notification Date” has the meaning set out in Section 1.6(b); |
| (yyy) | “OFAC” means The Office of Foreign Assets Control of the US Department of the
Treasury; |
| (zzz) | “Operations” means all activities of whatever kind or nature conducted in connection
with exploration, development and operation; |
| (aaaa) | “Opon Mining Lease” means the mining lease dated August 2, 2019 which expires
on August 1, 2020 in respect of any area known as the Opon mining tenement; |
| (bbbb) | “Order” means orders, injunctions, judgments, decisions, administrative complaints,
decrees, rulings, awards, assessments, directions, instructions, penalties or sanctions issued, filed or imposed by any Governmental
Authority or arbitrator; |
| (cccc) | “Original Buyer” means Future Global Resources Limited, a corporation existing
under the laws of England and Wales with company registration number 12380930 and having its registered office at 5th Floor West,
00-00 Xxxxxx Xxxxxx, Xxxxxx XX0 0XX, XX; |
| (dddd) | “Outside Date” means January 31, 2021, or such other date that Seller and the
Buyer may agree upon in writing; |
| (eeee) | “oz” means xxxx ounces; |
| (ffff) | “Parties” means, collectively, the Seller and the Buyer and, where the context
so permits or requires, includes Golden Star and the Buyer Shareholder, and “Party” means a party to this Agreement; |
| (gggg) | “Permits” means all permits, licenses, leases, registrations, qualifications,
certifications and other approvals required from a Governmental Authority, other than the Company Xxxxx Xxxxxxxx Property Mineral
Rights; |
| (hhhh) | “Permitted Encumbrances” means: (i) any inchoate right, lien or interest of
a Governmental Authority; (ii) Encumbrances for Taxes not yet due and payable and accrued in the ordinary course of business; (iii)
statutory Encumbrances in favour of municipalities or public utilities; (iv) servitudes, easements or other similar real property
rights, as well as encroachments and other minor imperfections of title which do not impair, detract from the value of or impair
the use of the property in any material respect; (v) with respect to the Seller, the Encumbrances listed in Schedule 1.1(hhhh)
of the Seller Disclosure Letter; |
| (iiii) | “person” means and includes any individual, corporation or other body corporate,
partnership, trustee, trust or unincorporated association, joint venture, syndicate, sole proprietorship, other form of business
enterprise, executor, administrator or other legal representatives, regulatory body or agency or Governmental Authority, however
designated or constituted; |
| (jjjj) | “Pre-Closing Restructure” means the restructure of the Company Group carried
out substantially in accordance with the Restructure Plan; |
| (kkkk) | “Proceeding” means any action, claim, demand, lawsuit, assessment, hearing,
arbitration, judgment, award, decree, order, injunction, investigation and prosecution, or other similar proceeding; |
| (llll) | “Purchase Price” means the sum of US$55,000,000, subject to increase by an amount
equal to the Sulphides Contingent Payment determined in accordance with Section 2.5 (if any); |
| (mmmm) | “Purchased Shares” means all of the shares on issue in the capital of the Company; |
| (nnnn) | “Reclamation Bonds” means all reclamation bonds, surety and other security provided
by Golden Star, the Seller, the Company Group or any of its Affiliates as set forth in Schedule 1.1(nnnn) of the Seller Disclosure
Letter; |
| (oooo) | “Reference Amount” means the lesser of (i) negative US$25,000,000 and (ii) the
Estimated Working Capital minus the Estimated Net Debt; |
| (pppp) | “Regulatory Approvals” means any approval, clearance, filing or expiration or
termination of a waiting period pursuant to which the transactions contemplated hereby are approved by the applicable Governmental
Authorities in Ghana under any applicable Laws of Ghana, as listed in Schedule “B” hereto; |
| (qqqq) | “Remediation Order” means a binding final and non-appealable order, requirement
or other similar written request issued to any Party by any Governmental Authority to investigate, control, remediate, reclaim,
rehabilitate, decontaminate or restore the environment; |
| (rrrr) | “Release”, when used as a verb, includes release, spill, leak, emission, deposit,
discharge, pump, pour, inject or dispose of into the environment or any other similar act, however defined in applicable Environmental
Laws, and the term “Release” when used as a noun has a correlative meaning; |
| (ssss) | “Restructure Plan” means the Company Group restructuring plan substantially
in the form as set forth in Schedule 1.1(ssss) of the Seller Disclosure Letter; |
| (tttt) | “Retained Intercompany Balance” means the amount owed by the Company Subsidiary
to the Company following the finalization of the Pre-Closing Restructure, as detailed in the Restructure Plan and to be a minimum
of US$450 million; |
| (uuuu) | “RGLD” means RGLD XXXX XX, a company incorporated under the laws of the Switzerland; |
| (vvvv) | “RGLD Restructuring” means the restructuring of the Streaming Agreement necessary
to separate the Company Xxxxx Xxxxxxxx Property Mineral Rights from the current arrangements under the Streaming Agreement and
its ancillary agreements, including entry into definitive agreements between the Buyer (or its Affiliates), the Seller (or its
Affiliates) and RGLD, obtaining all consents, amendments, releases. additional agreements and replacement agreements for the Streaming
Agreement and its ancillary agreements necessary to implement the RGLD Restructuring; |
| (wwww) | “Sanctioned Entity” means: (i) a country or a government of a country, (ii)
an agency of the government of a country, (iii) an organization directly or indirectly controlled by a country or its government,
(iv) a person resident in or determined to be resident in a country, in each case, that is subject to a Sanctions program administered
and enforced by OFAC or by any applicable Governmental Authority; |
| (xxxx) | “Sanctioned Person” means: (i) any person listed in any Sanctions-related list
of designated persons maintained by any applicable Governmental Authority, or (ii) a person named on the list of Specially Designated
Nationals maintained by OFAC; |
| (yyyy) | “Sanctions” means any Sanctions administered or enforced by OFAC or any applicable
Governmental Authority; |
| (zzzz) | “Seller Affiliated Employees” has the meaning set out in Section 3.12(a); |
| (aaaaa) | “Seller Disclosure Letter” means the Seller’s disclosure letter dated
as of the Execution Date executed by the Seller and the Buyer in connection with the execution of this Agreement; |
| (bbbbb) | “Seller Fundamental Representations” means the Seller's representations and
warranties in Sections 5.1, 5.2. 5.5, 5.7, 5.17 and 5.26; |
| (ccccc) | “Seller Knowledge Persons” means each of: |
| (i) | Xxxxxx Xxxx, President and Chief Executive Officer, Golden Star; |
| (ii) | Xxxxxx Crew, Chief Operating Officer, Golden Star; |
| (iii) | Xxxx Xxxxxxx, Chief Financial Officer, Golden Star; |
| (iv) | Nathalie Lion Xxxxxx, Executive Vice President, Head of People, Golden Star; |
| (v) | Xxxxx Xxxxx, Executive Vice President Growth and Exploration, Golden Star; |
| (vi) | Xxxxxxx Xxxxxx, Executive Vice President and Head of Sustainability, Golden Star; |
| (vii) | S. Xxxxxxx Xxxxx, Vice President, Exploration, Golden Star; |
| (viii) | Xxxxxxx Xxxxxx, In-House Legal Counsel, Golden Star; |
| (ix) | Xxxxx-Xxxxx Xxxx, Mine General Manager; and |
| (x) | Xxxxxxx Xxxxxx, Group Corporate Affairs Manager; |
| (ddddd) | “Seller Liability Cap” [Redacted - Commercially Sensitive Information]; |
| (eeeee) | “Seller Threshold Amount” means an amount equal to [Redacted - Percentage
Amount] of the Seller Liability Cap; |
| (fffff) | “Share Appreciation Rights Plan” means the share appreciation rights plan applicable
to the Company Group (among others) and approved the board of directors of Golden Star in 2012; |
| (ggggg) | “Streaming Agreement” means the Amended and Restated Gold Purchase and Sale
Agreement dated as of June 29, 2018 between Caystar Finance Co., an Affiliate of the Seller, and RGLD as amended by an agreement
between those parties dated October 17, 2019; |
| (hhhhh) | “Sulphides Payment Threshold” means and shall be deemed to have been achieved
at the Bogoso Sulphide Project when either (i) the existing or a new concentrator for processing sulphide ores on the Company Xxxxx
Xxxxxxxx Property has operated (other than for testing purposes) for a period of 60 consecutive production days at an average rate
of not less than 75% of design capacity as referred to in the feasibility study recommending placing the Bogoso Sulphide Project
into commercial production or the Buyer or the Company Group makes a public announcement of commercial production in respect of
the same, or (ii) if a concentrator is not rehabilitated or erected on the Company Xxxxx Xxxxxxxx Property, when ores have been
produced for a period of 60 consecutive production days at the rate of not less than 75% of the mining rate specified in a feasibility
study recommending placing the Bogoso Sulphide Project into commercial production or the Buyer or the Company Group makes a public
announcement of commercial production in respect of the same; |
| (iiiii) | “Sulphides Contingent Payment” has the meaning set out in Section 2.5; |
| (jjjjj) | “Sulphides Decision to Proceed” means the first to occur of: |
| (i) | the date on which any of the Buyer, the Company, the Company Subsidiary or any Affiliate of any
of the foregoing, or the board of any such entity, makes a formal decision to commence development activities or mining at the
Bogoso Sulphide Project; or |
| (ii) | the date on which an aggregate of 5% of the B/P Refractory Mineral Resources has been extracted
by or on behalf of the Company Group and/or any transferee of any of the Company Xxxxx Xxxxxxxx Property Mineral Rights; |
| (kkkkk) | “Tax” or “Taxes” means all foreign, federal, national, provincial,
state, city or municipal taxes, levies, duties, assessments, reassessments and other charges of any nature whatsoever, including
income tax, profits tax, capital gains tax, gross receipts tax, corporation tax, mining tax, royalties, sales and use tax, wage
tax, payroll tax, workers' compensation levy, capital tax, stamp duty, real and personal property tax, land transfer tax, customs
or excise duty, excise tax, turnover or value added tax on goods sold or services rendered, goods and services tax, withholding
tax, social security, government pension plan and employment insurance charges or retirement contributions and any interest, penalties
or other additions to tax; |
| (lllll) | “Tax Claim” means a Claim in respect of the Seller’s representations and
warranties in Section 5.15 and the indemnity in Section 10.4; |
| (mmmmm) | “Tax Return” means any return (including any information return), report, statement,
schedule, notice, form, declaration, claim for refund or other document or information filed with or submitted to, or required
to be filed with or submitted to, any Governmental Authority in connection with the determination, assessment, collection or payment
of any Tax or in connection with the administration, implementation or enforcement of or compliance with any legal requirement
relating to any Tax; |
| (nnnnn) | “Third Party” has the meaning set out in Section 10.10(c); |
| (ooooo) | “Third Party Claim” has the meaning set out in Section 10.7(a); |
| (ppppp) | “Time of Closing” means 9:00 a.m. (Toronto time) on the Closing Date or such
other time on the Closing Date as may be agreed to in writing by the Seller and the Buyer; |
| (qqqqq) | “Transaction Expenses” means, the sum of, without duplication: (1) the out-of-pocket
fees and expenses of investment bankers, legal counsel, accountants, consultants, brokers, finders incurred by the Company Group
solely in connection with the negotiation, execution and delivery of this Agreement and the consummation of the transactions contemplated
hereby; and (2) any bonuses, severance, termination and retention obligations, and similar amounts payable for which the Company
Group is liable solely in connection with the transactions contemplated by this Agreement (and not as a result of any actions taken
or contemplated to be taken by the Buyer in connection with the transactions contemplated by this Agreement), including the employer
portion of any payroll Taxes payable in connection with any of the foregoing. Provided that, for the avoidance of doubt, Transaction
Expenses shall not include (i) any expenses of the Buyer in connection with the transactions contemplated by this Agreement; or
(ii) any expenses of the Seller and its Affiliates (including corporate or group allocations) or expenses that are otherwise not
actually payable by the Company Group; |
| (rrrrr) | “Transfer” means any direct or indirect sale, transfer, disposition, assignment,
conveyance, surrender, abandonment, relinquishment, disposition or any other action that has the effect of any of the foregoing
(including expropriation or other action required or imposed by applicable Laws or any Governmental Authority, whether voluntary
or involuntary), including without limitation by way of take-over bid, tender offer, exchange offer, arrangement, merger, amalgamation,
consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar
transaction, or any lease, long-term supply, hedging arrangement, joint venture, strategic alliance, partnership or other transaction
having the same economic effect as any of the foregoing; in all cases, whether in a single transaction or in a series of related
transactions; |
| (sssss) | “Transition Agreement” means an agreement (with costing included therein where
applicable) between the Seller, the Company Group and the Buyer (or one or a combination thereof) relating to those transition
related matters and general principles set forth in Schedule “D”, with a view inter alia to assisting the Buyer and
the Seller with the integration and separation (as applicable) of the operations and administration of the members of the Company
Group, including accounting, administration and information technology; |
| (ttttt) | “VDR” means the virtual data room established by the Seller and made available
to the Buyer and its Affiliates and consultants, an index of which as of the date hereof is set forth in Schedule 1.1(ttttt) of
the Seller Disclosure Letter, and a copy of which will be downloaded onto a USB and provided to each of the Buyer and the Seller
no later than 5:00 p.m. (Toronto time) on the Business Day before the Closing Date; and |
| (uuuuu) | “Working Capital” means, the sum of: (i) accounts receivable, inventories (including
consumable inventory and spare parts), prepayments, deposits (including office lease deposits), other receivables and other current
assets (other than Cash) consistent with the Accounting Principles; minus (ii) trade payables, accrued expenses, and other current
liabilities consistent with the Accounting Principles provided that the following liabilities shall be excluded from Working Capital
(a) liabilities captured within Debt; (b) rehabilitation provisions (both current and long-term portions thereof); and (c) any
non-current liabilities. Working Capital shall be expressed as a positive amount if it is a net asset of the Company Group or a
negative amount if it is a net liability of the Company Group. |
1.2 Rules
of Construction
In this Agreement:
| (a) | the terms “Agreement”, “this Agreement”, “the Agreement”, “hereto”,
“hereof”, “herein”, “hereby”, “hereunder” and similar expressions refer to this
Agreement in its entirety and not to any particular provision hereof; |
| (b) | references to an “Article”, “Section” or “Schedule” followed
by a number or letter refer to the specified Article or Section of or Schedule to this Agreement; |
| (c) | where any representation or warranty is qualified by reference to “knowledge” or to
“the knowledge of the Seller” or with a similar qualification as to the Seller’s awareness or knowledge, such
reference is referencing and shall be deemed to refer to, the actual knowledge of the Seller Knowledge Persons or would have been
within the actual knowledge of a Seller Knowledge Person if that Seller Knowledge Person had made reasonable enquiries of the employees
of the Seller and its Affiliates (including the Company Group prior to Closing) and the records that would reasonably be expected
to be relevant to the accuracy of the representation or warranty, having regard to the Seller Knowledge Person’s position
and circumstances; |
| (d) | where any representation or warranty is qualified by reference to “knowledge” or to
“the knowledge of the Buyer” or with a similar qualification as to the Buyer’s awareness or knowledge, such reference
is referencing, and shall be deemed to refer to, the actual knowledge of the Buyer Knowledge Persons or would have been within
the actual knowledge of a Buyer Knowledge Person if that Buyer Knowledge Person had made reasonable enquiries of the employees
of the Buyer and its Affiliates and records that would reasonably be expected to be relevant to the accuracy of the representation
or warranty, having regard to the Buyer Knowledge Person’s position and circumstances; |
| (e) | the division of this Agreement into Articles and Sections and the insertion of headings are for
convenience of reference only and shall not affect the construction or interpretation of this Agreement; |
| (f) | words importing the singular number only shall include the plural and vice versa and words importing
the masculine gender shall include the feminine and neutral genders and vice versa; |
| (g) | unless otherwise indicated, any reference to a statute, regulation or rule shall be construed to
be a reference thereto as the same may from time to time be amended, re-enacted or replaced, and any reference to a statute shall
include any regulations or rules made thereunder; |
| (h) | the words “include”, “includes” and “including” mean “include”,
“includes” or “including”, in each case, “without limitation”; |
| (i) | reference to any agreement or other instrument in writing means such agreement or other instrument
in writing as amended, modified, replaced or supplemented from time to time; |
| (j) | unless otherwise indicated, time periods within which a payment is to be made or any other action
is to be taken hereunder shall be calculated excluding the day on which the period commences and including the day on which the
period ends; and |
| (k) | whenever any payment to be made or action to be taken hereunder is required to be made or taken
on a day other than a Business Day, such payment shall be made or action taken on the next following Business Day. |
1.3 Currency
Unless otherwise indicated, all references
in this Agreement to dollar amounts are to United States dollars.
1.4 Time
of Essence
Time shall be of the essence of this
Agreement.
1.5 Schedules
The following Schedules are attached
to and form part of this Agreement:
Schedule “A” |
Company Xxxxx Xxxxxxxx Property Mineral Rights |
Schedule “B” |
Regulatory Approvals |
Schedule “C” |
Purchase Price |
Schedule “D” |
Transition Agreement Principles |
Schedule “E” |
Business Records |
1.6 Nomination
of alternative Buyer
| (a) | The Original Buyer may nominate an Affiliate of the Original Buyer to be the buyer of the Purchased
Shares under this Agreement (the “Nominee”) by notice in writing to the Seller prior to the Closing Date. The
notice must state the identity of the Nominee. |
| (b) | From the date of receipt by the Seller of that notice (the “Notification Date”): |
| i. | the Original Buyer and the Buyer Shareholder must ensure that Nominee complies with all terms and
conditions binding upon, and all obligations and liabilities of, the Buyer under this Agreement; |
| ii. | the Parties agree to read and construe this Agreement as if references to ‘the Buyer’
were references to the Nominee (without the need for any further agreement or amendment); and |
| iii. | the Seller agrees that the Nominee will have the benefit of the Buyer’s rights under this
Agreement (including all representations, warranties and indemnities given by the Seller or Golden Star). In addition, and notwithstanding
Section 2.6 or Section 12.9, the Original Buyer may assign the benefit of this Agreement to the Nominee. The assignment may include
any rights that are unconditional, conditional, contingent or expectant at the time of assignment. |
| (c) | Despite Section 1.6(b), the Original Buyer will continue to be bound by all of the obligations
of the Buyer under this Agreement and will not be released from any obligations or liabilities under this Agreement following the
Notification Date and the Original Buyer will guarantee the obligations, including payment obligations, of the Nominee in accordance
with the provisions of 3.8, mutatis mutandis. However the Seller agrees that the Original Buyer will not be required to
discharge an obligation or liability of the Buyer under this Agreement if the Nominee fully discharges that obligation or liability. |
| (d) | If requested by the Buyer, the Seller and Golden Star must, at the sole cost and expense of the
Original Buyer (which costs and expenses must be reasonable and shall be prefunded to the Seller), do all such commercially reasonable
acts and execute and deliver all such documents as required to novate this Agreement in its entirety to the Nominee on the terms
set out herein provided that there is no increase in the scope of the obligations or liabilities of the Seller in connection therewith. |
Article
2
TRANSFER OF PURCHASED SHARES AND CLOSING ARRANGEMENTS
2.1 Transfer
of Purchased Shares
Subject to the terms and conditions
hereof, the Parties agree that at the Time of Closing the Seller shall sell, assign and transfer to the Buyer, and the Buyer shall
purchase from the Seller, the Purchased Shares, free and clear of all Encumbrances, other than Permitted Encumbrances, for the
Purchase Price which shall be paid as set out in Section 2.2.
2.2 Purchase
Price
The Parties acknowledge that the Purchase
Price for the Purchased Shares shall be satisfied as follows:
| (a) | at the Time of Closing, the Buyer shall pay by wire transfer to an account designated by the Seller
an amount equal to the Closing Consideration paid in immediately available funds; |
| (b) | the Balancing Payment shall be paid as follows: |
| i. | if the Actual Closing Date Amount is greater than the Reference Amount, then the Buyer shall on
July 31, 2021 or such earlier day as set out below, pay by wire transfer to an account designated by Seller an amount equivalent
to the Balancing Payment in immediately available funds; |
| ii. | if the Actual Closing Date Amount is equal to the Reference Amount, then neither the Buyer nor
the Seller is required to pay any further amount; or |
| iii. | if the Actual Closing Date Amount is less than the Reference Amount then the Seller shall pay by
wire transfer to an account designated by the Buyer an amount equivalent to the amount equal to the Balancing Payment in immediately
available funds, within a period of fifteen (15) days following the date on which the Balancing Payment Calculation is accepted
or deemed to be accepted under Section 2.4; |
| (c) | on July 31, 2021 or such earlier day as set out below, the Buyer shall pay by wire transfer to
an account designated by the Seller the amount of US$10,000,000 in immediately available funds; and |
| (d) | on July 31, 2023 or such earlier day as set out below, the Buyer shall pay by wire transfer to
an account designated by the Seller the amount of US$15,000,000 in immediately available funds. |
Notwithstanding the
foregoing, the payments in Sections 2.2(b)i, 2.2(c) and 2.2(d) shall become immediately due and payable, and shall be paid by the
Buyer to the Seller in immediately available funds, within one (1) Business Day of the Buyer or any Company Group member Transferring
any of the Company Xxxxx Xxxxxxxx Property Mineral Rights related to the Company Subsidiary’s Prestea underground mine.
2.3 Pre-Closing
Statement
At least five (5)
Business Days prior to the Closing Date, the Seller must deliver to the Buyer a reasonably detailed calculation of (i) the Estimated
Net Debt; (ii) the Estimated Working Capital; (iii) the Reference Amount and (iv) the Closing Consideration, with copies of supporting
documentation and the balance sheet used by the Buyer to prepare such calculation. Such calculation will be prepared on the basis
of the unaudited combined balance sheet of the Company Group for the month ended prior to the Closing Date and in a manner consistent
with Schedule “C”.
| 2.4 | Cash, Debt and Working Capital Adjustment |
| (a) | Balancing Payment Calculation. Within 60 calendar days following the later to occur of (i)
the Closing Date and (ii) the earliest date on which access to site by the Buyer’s accounting experts based outside Ghana
first becomes practicable, subject to a maximum of no more than 120 calendar days following the Closing Date, the Buyer shall deliver
to the Seller a reasonably detailed calculation of the Balancing Payment (the “Balancing Payment Calculation”)
together with copies of supporting documentation and the balance sheet used by the Buyer to prepare such calculation. The Buyer
shall provide prompt written notice to the Seller upon the Buyer commencing preparation of the Balancing Payment Calculation. The
Balancing Payment Calculation will be prepared in accordance with the Accounting Principles. Once the Balancing Payment Calculation
is delivered to the Seller, the Buyer shall not be permitted to make any changes to the Balancing Payment Calculation. |
| (b) | Approval of Balancing Payment Calculation. The Seller shall finish its review of the Balancing
Payment Calculation within 30 days of its receipt of the same. For the purpose of such review, the Buyer agrees to permit and to
cause its auditors to permit the Seller, Golden Star and their authorized representatives to examine all records, facilities, personnel,
working papers, schedules and other documentation used or prepared by the Buyer, its auditors of the Company Group members in calculating
the Balance Payment Calculation. If no objection to the Balancing Payment Calculation is given to the Buyer by the Seller within
such 30-day period, the Balancing Payment Calculation shall be deemed to have been approved by the Seller as of the day immediately
following the last day of such 30-day period. |
| (c) | Dispute. If the Seller objects to the Balancing Payment Calculation within such 30-day period
by giving written notice to the Buyer setting out in reasonable detail the nature of such objection, the Seller and the Buyer agree
to attempt to resolve the matters in dispute within 15 calendar days from the Seller’s written notice issued in accordance
with this Section 2.4(c) is received by the Buyer. If all matters in dispute are resolved by the Buyer and the Seller within such
15-day period, the Balancing Payment Calculation shall be modified to the extent required to give effect to such resolution and
shall be deemed to have been approved as of the date of such resolution. |
| (d) | Expert Referral. If the Buyer and the Seller cannot resolve all matters in dispute within
such 15-day period set out under Section 2.4(c), all unresolved matters shall be submitted to Deloitte LLP or such other nationally
recognized accounting firm and the Buyer and the Seller may agree, acting reasonably, for resolution (the “Expert”).
The Expert shall act as an accounting expert and not as an arbitrator, and shall be given access to all materials and information
reasonably requested by it. The rules and procedures to be followed in the proceedings shall be determined by the Expert in its
reasonable discretion provided always that the Accounting Principles and Section 2.4(a) are adhered to by the Expert in reaching
its determination. The Expert shall render its determination taking into account each party’s written submissions. The Expert’s
determination of all such matters shall, absent manifest error, be final and binding on the Parties and shall not be subject to
appeal by any Party. The fees and expenses of the Expert shall be borne equally by the Buyer and the Seller, provided that if the
determination of the Expert results in the Balancing Payment Calculation being revised in favour of the Seller by 50% or more from
the Buyer’s determination of the Balancing Payment Calculation, the Buyer shall solely be responsible for and pay the fees
and expenses of the Expert. The Balancing Payment Calculation shall be modified to the extent required to give effect to the Expert’s
determination and shall be deemed to have been approved as of the date of such determination. |
2.5 Sulphides
Contingent Payment
In the event that a Sulphides Decision
to Proceed is made, the Buyer shall promptly provide written notice thereof to the Seller, and the Buyer shall pay to the Seller
an additional amount (the “Sulphides Contingent Payment”) determined as follows:
| (a) | if the Average Gold Price at the time of the Sulphides Decision to Proceed is less than or equal
to US$1,400/oz, the Purchase Price shall be increased by US$20,000,000; |
| (b) | if the Average Gold Price at the time of the Sulphides Decision to Proceed is greater than US$1,400/oz
but less than or equal to US$1,700/oz, the Purchase Price shall be increased by US$30,000,000; or |
| (c) | if the Average Gold Price at the time of the Sulphides Decision to Proceed is greater than US$1,700/oz,
the Purchase Price shall be increased by US$40,000,000. |
If the Sulphides Decision to Proceed
occurs as per clause (ii) of the definition of “Sulphides Decision to Proceed” (“Trigger 1”), the
Buyer shall within three (3) Business Days after the day on which Trigger 1 occurs, pay to the Seller in immediately available
funds by wire transfer to an account designated by the Seller an amount equal to 50% of the Sulphides Contingent Payment, and within
three (3) Business Days after the first anniversary of the day on which Trigger 1 occurs, pay to the Seller in immediately available
funds by wire transfer to an account designated by the Seller an amount equal to 50% of the Sulphides Contingent Payment.
If the Sulphides Decision to Proceed
occurs as per clause (i) of the definition of “Sulphides Decision to Proceed” (“Trigger 2”), the
Buyer shall within three (3) Business Days after the day on which Trigger 2 occurs, pay to the Seller in immediately available
funds by wire transfer to an account designated by the Seller an amount equal to 50% of the Sulphides Contingent Payment, and within
three (3) Business Days after the first anniversary of the first to occur of (x) the day on which the Sulphides Payment Threshold
occurs and (y) the date on which an aggregate of 5% of the B/P Refractory Mineral Resources has been extracted by or on behalf
of the Company Group and/or any transferee of any of the Company Xxxxx Xxxxxxxx Property Mineral Rights, pay to the Seller in immediately
available funds by wire transfer to an account designated by the Seller an amount equal to 50% of the Sulphides Contingent Payment.
2.6 Transfer
of Property or Mineral Rights
| (a) | The Buyer agrees that its obligations under Section 2.5 will, until satisfied, run with the Company
Xxxxx Xxxxxxxx Property Mineral Rights relating to the B/P Refractory Mineral Resources and that, in the event the Buyer Transfers,
directly or indirectly (which, for greater certainty may include a Transfer of the securities of the person that then holds those
Company Xxxxx Xxxxxxxx Mineral Property Rights relating to the B/P Refractory Mineral Resources) all or any part of such interests
to any transferee before the obligations under Section 2.5 are satisfied in full, the Buyer agrees to cause such transferee to
assume the obligations under Section 2.5 concurrently with the Transfer of the relevant interests. Notwithstanding the foregoing,
the Buyer agrees that it shall not effect or implement any such Transfer, unless the Transfer is not for the purpose of permitting
any person to directly or indirectly obtain any right, title or interest in any of the Company Xxxxx Xxxxxxxx Property Mineral
Rights relating to the B/P Refractory Mineral Resources without having to pay the Sulphides Contingent Payment. |
| (b) | If and only to the extent a Transfer of any Company Xxxxx Xxxxxxxx Property Mineral Rights relating
to the B/P Refractory Mineral Resources occurs within 2 years of the Closing Date, the Buyer must obtain the written consent of
the Seller or Golden Star to the Transfer (which consent shall not be unreasonably withheld if the transferee demonstrates to the
reasonable satisfaction of the Seller or Golden Star that it has the financial resources and mining technical expertise and experience
to operate the Bogoso Sulphide Project). In the case of any Transfer of any or all of the Company Xxxxx Xxxxxxxx Property Mineral
Rights relating to the B/P Refractory Mineral Resources, prior to the Buyer effecting such Transfer, (i) in the case of a Transfer
of all of the Company Xxxxx Xxxxxxxx Property Mineral Rights relating to the B/P Refractory Mineral Resources, the transferee must
provide the Seller or Golden Star with a written instrument, in form and substance acceptable to the Seller or Golden Star, acting
reasonably, whereby the transferee irrevocably and unconditionally agrees and covenants to assume the obligations (including the
Sulphides Contingent Payment obligations) of the Buyer under Section 2.5; and (ii) in the case of a Transfer of less than all of
the Company Xxxxx Xxxxxxxx Property Mineral Rights relating to the B/P Refractory Mineral Resources, the transferee and the Buyer
must irrevocably and unconditionally agree and covenant to be liable to the Seller for the obligations (including, but not limited
to, the Sulphides Contingent Payment obligations) of the Buyer under Section 2.5 pro rata to their respective interests in the
Company Group Mineral Rights relating to the B/P Refractory Mineral Resources, and the transferee and the Buyer shall provide the
Seller or Golden Star with a written instrument, in form and substance acceptable to the Seller or Golden Star agreeing that such
persons are, on a several basis, fully liable for their respective agreed portions of the Sulphides Contingent Payment (which,
in such circumstances and for greater certainty, for the purposes of clause (ii) of the definition of “Sulphides Decision
to Proceed” and clause (y) of Section 2.5 shall be based on the aggregate extraction of B/P Refractory Mineral Resources
by the Company Group and the transferee). |
| (c) | The Buyer agrees that any purported Transfer that is implemented or effected without complying
with the foregoing provisions of this Section 2.6 shall be null and void ab initio and that the Buyer shall in such circumstances
remain fully liable to the Seller for making the payments contemplated by Section 2.5. |
2.7 Closing
Date
Subject to compliance with the terms
and conditions hereof, the sale, assignment and transfer of the Purchased Shares shall be deemed to take effect as at the Time
of Closing on the Closing Date or on such other date as the Seller and the Buyer may mutually determine, provided that the Closing
Date shall occur no later than the Outside Date.
2.8 Place
of Closing
The Closing shall take place at the
offices of Fasken Xxxxxxxxx DuMoulin LLP, counsel to the Seller, at its Toronto, Ontario office.
2.9 Delivery
of Closing Documentation from Seller to the Buyer
At the Time of Closing, the Seller shall
deliver or cause to be delivered to the Buyer:
| (a) | (i) full and final releases in favour of the relevant Company Group member of all intercompany
loans and any other liabilities which are to be released or otherwise discharged pursuant to the Pre-Closing Restructure and (ii)
full and final releases in favour of the relevant Company Group member or assignment (provided that such assignment does not result
in liability for the Seller) to a Company Group member (as instructed by the Buyer) any other liabilities or obligations of the
Company Group owed to the Seller or an Affiliate of the Seller (other than the Company Group), in each case on terms acceptable
to the Buyer, acting reasonably; for greater certainty, such releases shall be mutual in respect of the Seller and its Affiliates; |
| (b) | a certificate of status or good standing (or equivalent thereof) for the Seller and Golden Star
issued by the relevant Governmental Authority dated no earlier than five days prior to the Closing Date; |
| (c) | a certificate of status or good standing (or equivalent thereof) for the Company and the Company
Subsidiary issued by the relevant Governmental Authority dated no earlier than five days prior to the Closing Date; |
| (d) | a certificate from a senior officer of the Seller and Golden Star dated as of the Closing Date
certifying: (i) the constating documents of the Seller and Golden Star; (ii) the incumbency of certain officers of the Seller and
Golden Star; and (iii) the resolutions of the board of directors of the Seller and Golden Star relating to this Agreement and the
transactions contemplated hereby; |
| (e) | a certificate from a senior officer of the Company and the Company Subsidiary dated as of the Closing
Date certifying: (i) the constating documents of each of the members of the Company Group; (ii) the incumbency of certain officers
of the members of the Company Group; and (iii) any applicable corporate authorizations of each member of the Company Group relating
to this Agreement and the transactions contemplated hereby; |
| (f) | the certificate contemplated by Sections 9.2(a), (b) and (l); |
| (g) | share certificates representing the Purchased Shares, together with transfer forms in respect of
the Purchased Shares duly endorsed for transfer, executed and delivered by the Seller; |
| (h) | a mutual release from the Seller and from each member of the Company Group, releasing and discharging
the Seller and each member of the Company Group from and against all claims, demands, damages, debts, liabilities, obligations,
costs, expenses, actions and causes of action to the extent arising prior to Closing, in a form satisfactory to the Buyer and the
Seller, acting reasonably, duly executed by the Seller and each member of the Company Group; |
| (i) | a written resignation and an executed mutual release from each director and officer of each member
of the Company Group, substantially in a form to be agreed by the Seller and the Buyer, acting reasonably, such resignations and
releases to be effective as at the Closing Date, and duly executed terminations of all powers of attorney granted to such directors
and officers; |
| (j) | a copy of the Transition Agreement executed by the Seller and the Company Group; and |
| (k) | all minute books, Business Records and share transfer books or equivalent of each member of the
Company Group. |
2.10 Delivery
of Closing Documentation from Buyer to the Seller
At the Time of Closing, the Buyer shall
deliver to the Seller:
| (a) | the aggregate of the Closing Consideration in accordance with Section 2.2(a); |
| (b) | a certificate of status or good standing (or equivalent thereof) for the Buyer and the Buyer Shareholder
issued by the relevant Governmental Authority dated no earlier than five days prior to the Closing Date; |
| (c) | a certificate from a senior officer of the Buyer and the Buyer Shareholder dated as of the Closing
Date certifying: (i) the constating documents of the Buyer and the Buyer Shareholder; (ii) the incumbency of certain officers of
the Buyer and the Buyer Shareholder; and (iii) any applicable corporate authorizations of the Buyer and the Buyer Shareholder relating
to this Agreement and the transactions contemplated hereby; |
| (d) | evidence satisfactory to the Seller, acting reasonably, that the Buyer has received all required
board and shareholder approvals and ratifications, as applicable, for the entering into of this Agreement on or prior to the Closing
Date; |
| (e) | the certificates contemplated by Sections 9.3(a), (b) and (c); and |
| (f) | a copy of the Transition Agreement executed by the Buyer (or its appropriate Affiliate). |
Article
3
COVENANTS OF THE PARTIES DURING THE PRE-CLOSING PERIOD
3.1 Actions
to Satisfy Closing Conditions
Each Party shall: (i) take all such
reasonable actions as are within its power and otherwise use all commercially reasonable efforts so as to: (A) ensure compliance
with the conditions set forth in Article 9; and (B) cause the Closing to occur as promptly as reasonably practicable following
the date hereof; and (ii) not take or agree to take any action that would reasonably be expected to delay or prevent the consummation
of the transactions contemplated by this Agreement.
3.2 Regulatory
Approvals
| (a) | The Seller and the Buyer shall make, as promptly as reasonably practicable and in any event within
15 Business Days after the date hereof, all necessary or advisable filings, notifications and other submissions, including in draft
where required, with respect to the transactions contemplated in this Agreement as are required to obtain the Regulatory Approvals.
Each of the Seller and the Buyer shall use its commercially reasonable efforts to obtain the Regulatory Approvals. |
| (b) | The Seller and the Buyer shall co-operate with one another in connection with obtaining the Regulatory
Approvals and shall: (i) give each other reasonable advance notice of all meetings with any Governmental Authority relating to
the Regulatory Approvals; (ii) not participate independently in any such meeting without first giving the other Party (or the other
Party's outside counsel) an opportunity to attend and participate in such meeting, unless otherwise required or requested by such
Governmental Authority; (iii) if any Governmental Authority initiates an oral communication regarding the Regulatory Approvals,
promptly notify the other Party of the substance of such communication; (iv) subject to applicable Laws relating to the exchange
of information, provide each other with a reasonable advance opportunity to review and comment upon and consider in good faith
the views of the other in connection with all written communications (including any filings, notifications, submissions, analyses,
presentations, memoranda, briefs, arguments, opinions and proposals made or submitted by or on behalf of any Party) with a Governmental
Authority regarding the Regulatory Approvals; and (v) promptly provide each other with copies of all written communications to
or from any Governmental Authority relating to the Regulatory Approvals. |
| (c) | The Buyer will promptly notify the Seller, and the Seller will promptly notify the Buyer, upon: |
| i. | becoming aware of any Order or any complaint requesting an Order restraining or enjoining the execution
of this Agreement or the consummation of the transactions contemplated under this Agreement; or |
| ii. | receiving any notice from any Governmental Authority of its intention: |
| (A) | to institute a suit or proceeding to restrain or enjoin the execution of this Agreement or the
consummation of the transactions contemplated by this Agreement; or |
| (B) | to nullify or render ineffective this Agreement or such transactions if consummated. |
| (d) | Any requisite filing fees and applicable Taxes in relation to: |
| i. | any filing or application made in respect of the Regulatory Approvals shall be borne by the Buyer; |
| ii. | any registration, stamping and/or perfection of any security agreement transferred to or assumed
by the Buyer or the Company Group in Ghana pursuant to the RGLD Restructuring shall be borne as to 50% thereof by the Buyer and
as to 50% thereof by the Seller. The obligation of the Seller in relation to 50% of any requisite filing fees and applicable Taxes
under this Section 3.2(d)ii shall form part of the Company Group’s Working Capital for the purposes of determining the Estimated
Working Capital and the Balancing Payment; and |
| iii. | requisite filing fees and applicable Taxes in relation to registration, stamping and/or perfection
of any security agreement not transferred to or assumed by the Buyer or the Company Group in Ghana pursuant to the RGLD Restructuring
shall be borne entirely by the Seller. |
3.3 Conduct
of Business of the Members of the Company Group
Other than: (i) as expressly required
or permitted by this Agreement; (ii) as required pursuant to applicable Laws; (iii) as set out in Schedule 3.3 of the Seller Disclosure
Letter; (iv) actions required to reasonably and prudently respond to an emergency, pandemic (including COVID-19) or disaster only
to the extent required to ensure the safety and integrity of Operations and the Employees (and if any such actions shall be taken,
the Seller shall as promptly as is practicable advise the Buyer of same); or (v) as consented to in writing by the Buyer (such
consent not to be unreasonably withheld, delayed or conditioned), during the period of time from and including the Execution Date
to and the Closing Date, the Seller shall:
| (a) | cause each member of the Company Group to conduct its business, and continue to make ordinary capital
expenditures, in the ordinary and normal course of business, all with a view to ensuring that the Company Subsidiary continues
to deplete mining reserves in accordance with past practices; |
| (b) | cause each member of the Company Group to settle its accounts payable and accounts receivable in
a manner consistent with past practice; |
| (c) | ensure that no member of the Company Group shall: (i) amend or modify its charter documents; (ii)
alter the terms and conditions of the shares of the members of the Company Group or any of their respective securities (including
any share split or conversion or exchange of securities for other securities or property); or (iii) create, authorize or agree
to issue or grant any equity securities or securities convertible into or exchangeable or exercisable for equity securities of
any member of the Company Group; |
| (d) | ensure that no member of the Company Group shall declare, set aside or pay any cash dividend or
non-cash distribution or payment (whether in securities or property) in respect of any of its securities of any class; |
| (e) | ensure that no member of the Company Group shall acquire any business, or discontinue or cease
to operate all or a party of the business of the Company Group; |
| (f) | other than the Excluded Employees, ensure that no Employee is transferred, and shall procure that
no member of the Company Group transfers any Employee, to the Seller or an Affiliate of the Seller; |
| (g) | ensure that no member of the Company Group shall enter into any collective agreement with its Employees; |
| (h) | ensure that no member of the Company Group shall grant to any Employee an increase in compensation,
or make any bonus, profit sharing, pension, retirement or insurance payment, distribution or arrangement to or with any officer,
manager, employee or agent, in each case except for payments that were already accrued prior to the date hereof or except in the
ordinary course of business and consistent with past practice or as is necessary to comply with applicable Laws or an existing
employment or services agreement; |
| (i) | ensure that no member of the Company Group shall hire any new Employee or dismiss any Employee,
except: (i) the termination of any Employee for cause; or (ii) with consent of the Buyer, the hiring of any person to fill an existing
vacancy or to replace any Employee that has resigned or has been terminated for cause; |
| (j) | ensure that no member of the Company Group shall sell, transfer, dispose of, lease, encumber, relinquish,
abandon, grant any option to purchase or right of first offer/refusal over any Assets, except for the sale of inventory in the
ordinary course of business; |
| (k) | ensure that no member of the Company Group shall make any material change in its methods of accounting,
except as required by IFRS; |
| (l) | ensure that no member of the Company Group shall make or change any material Tax election, change
any annual tax accounting period, or adopt or change any method of Tax accounting, enter into any closing agreement with respect
to a material amount of Taxes or settle any material Tax claim, audit or assessment; |
| (m) | ensure that no member of the Company Group shall: (A) incur any indebtedness for borrowed money
other than short-term indebtedness, letters of credit, sureties (including in respect of reclamation) and trade payables in the
ordinary course of business consistent with past practice; or (B) grant any additional security over any Assets to any lender; |
| (n) | ensure that no member of the Company Group shall make any loans or advances to any person or assume
or guarantee the liabilities of any person including any advance or increase to the Retained Intercompany Balance; |
| (o) | ensure that no member of the Company Group shall: (A) settle, offer or propose to settle, compromise,
assign or release any material Proceeding brought against any of the members of the Company Group; or (B) settle, offer or propose
to settle, compromise, assign or release any material Proceeding brought by any members of the Company Group; |
| (p) | ensure that no member of the Company Group shall enter into any agreement creating a joint venture
or partnership or effecting a business combination or other similar arrangement with another person; |
| (q) | (i) keep in full force and effect all of the Company Group members’ existing insurance policies
(including by way of renewing any insurance policies that are set to expire provided that if such renewal is on terms materially
less favourable to the relevant Company Group member than those in the insurance policies existing as at the date of this Agreement
the Seller shall obtain the consent of the Buyer in accordance with this Section 3.3) and (ii) give any notice or present any claim
under any such existing insurance policy consistent with past practices of the Company Group in the ordinary course of business; |
| (r) | ensure that no member of the Company Group split, combine, redeem, reclassify, purchase or otherwise
acquire directly, or indirectly, any shares of, or other equity or voting interests in, any Company Group member, or repay any
intercompany loans; |
| (s) | ensure that neither the Seller, Golden Star nor any member of the Company Group nor their respective
representatives or Affiliates, will solicit or encourage, or enter into any letter of intent, contract or other agreement with
any person (other than the Buyer) concerning any offers to purchase, directly or indirectly, any shares, securities or other interests
(including membership interests) or all or substantially all of the Assets of any member of the Company Group or the Company Xxxxx
Xxxxxxxx Property including any joint venture or royalty transaction or similar arrangement and none of the Seller, Golden Star
nor any of the Company Group members, nor any of their respective representatives or Affiliates, will initiate or participate in
any discussions or negotiations with any person (other than the Buyer) with respect to any such transactions or similar transactions,
during the period commencing on the date hereof and ending on the termination of this Agreement; and |
| (t) | ensure that none of the Company Group members shall attempt or agree to do any of the foregoing
matters listed in paragraphs (c) through (s) above. |
3.4 Notice
of Certain Events
| (a) | The Seller and the Buyer agree that, subject to applicable Laws, each shall provide the other prompt
notice in writing of: |
| i. | any notice or communication from any person alleging that the consent of such person is or may
be required in connection with the transactions contemplated by this Agreement; |
| ii. | any material notice or communication from any Governmental Authority in connection with the transactions
contemplated by this Agreement, the Operations of the Company Group or relating to the Company Xxxxx Xxxxxxxx Property or the Company
Xxxxx Xxxxxxxx Property Mineral Rights; |
| iii. | any material Proceeding commenced or threatened against it (and in the case of the Seller, any
member of the Company Group) which relates to the consummation of the transactions contemplated by this Agreement; |
| iv. | any failure by it to comply with or satisfy in any material respect any covenant, condition or
agreement to be complied with or satisfied under this Agreement; and |
| v. | any facts, matters or circumstances that render or could reasonably be expected to render any of
the representations or warranties given by that Party or its Affiliates under this Agreement to be inaccurate or otherwise untrue, |
and copies of all documents related
thereto, provided that the giving of any such notice shall not in any way change or modify the representations and warranties of
the Seller, on the one hand, or the Buyer, on the other hand, or any conditions in favour of the Seller, on the one hand or the
Buyer, on the other hand, contained in this Agreement or otherwise affect the remedies available to the Seller, on the one hand,
or the Buyer, on the other hand, under this Agreement.
| (b) | During the period between the Execution Date and the Closing Date (inclusive), the Seller must: |
| i. | deliver to the Buyer copies of monthly reports including details of unaudited management accounts
of the Company Subsidiary; |
| ii. | deliver to the Buyer copies of any material information or other material data relating to the
Operations of the Company Group as reasonably requested by the Buyer, including but not limited to, monthly production reports;
and |
| iii. | keep the Buyer promptly and reasonably informed of all material developments in respect of the
Company Group, the Company Xxxxx Xxxxxxxx Property and the Company Xxxxx Xxxxxxxx Property Mineral Rights. |
3.5 Access
Upon reasonable notice and subject to
applicable Laws and provided it would not unreasonably interfere with the business and affairs of the Company Group taken as a
whole, the Seller agrees to, and to cause the members of the Company Group to, provide the Buyer, the Buyer's lenders and their
authorized representatives with reasonable access during regular business hours to: (i) all books, records and information relating
to the members of the Company Group in the Seller's or any members of the Company Group's possession and control; and (ii) at the
sole risk and expense of the Buyer, the Company Xxxxx Xxxxxxxx Property, provided that prior to any such access, the persons accessing
the Company Xxxxx Xxxxxxxx Property shall have provided written indemnifications satisfactory to the Seller and the members of
the Company Group, acting reasonably, with respect to any losses to life, limb or property that such persons may suffer as a result
of such access. Notwithstanding the foregoing, the Buyer shall not have access to personnel records of the members of the Company
Group relating to individual performance or evaluation records, medical histories or other information which in the Seller's opinion,
acting in good faith, is sensitive or constitutes personal information or the disclosure of which could subject the Seller or any
member of the Company Group to risk of liability.
3.6 Public
Statements
Each Party shall consult with the other
Parties prior to issuing any press releases or otherwise making public statements with respect to this Agreement or the transactions
contemplated by this Agreement and shall provide the other Parties with a reasonable period of time to review and comment on all
such press releases or statements prior to the release thereof. To the extent that any such press release or public statement is
required by applicable Laws or by a Governmental Authority, the press release or public announcement shall be issued or made after
consultation with the other Party and after taking into account the other Party's comments. If such advance consultation is not
reasonably practicable or legally permitted, to the extent permitted by applicable Laws, the disclosing Party shall provide the
other Party with a copy of any written disclosure made by such disclosing Party as soon as practicable thereafter.
3.7 Financing
The Buyer and the Buyer Shareholder
covenant and agree that they shall ensure and take all necessary steps to ensure that at Closing the Buyer will have sufficient
immediately available funds on hand to pay the Closing Consideration in full.
3.8 Buyer
Shareholder Guarantee
| (a) | The Buyer Shareholder hereby absolutely, unconditionally and irrevocably guarantees, as a direct
obligation, in favour of the Seller the full and timely payment by the Buyer of the Closing Consideration as required by Section
2.2(a) and the payments due under Sections 2.2(b)i, 2.2(c) and 2.2(d) (the “Buyer Payment Obligations”). |
| (b) | The liability of the Buyer Shareholder under this Section 3.8 is absolute and unconditional and
shall be and remain in full force and effect irrespective of: (i) any failure, neglect or omission on the part of the Seller or
any other person to realize upon any obligations or liabilities of the Buyer; (ii) any amalgamation, merger or reorganization of
the Buyer in which event the guarantee of the Buyer Shareholder shall apply to the entity resulting therefrom; (iii) any change
in the name, share capital or constating documents of the Buyer; (iv) any amalgamation, merger or reorganization of the Buyer or
the Buyer Shareholder; (v) any sale, lease or transfer of the assets of the Buyer or the Buyer Shareholder; (vi) any change in
the ownership of any shares in the capital of the Buyer or the Buyer Shareholder; (vii) any amendment or modification of this Agreement;
(viii) any other occurrence or circumstances whatsoever similar to the foregoing; or (ix) to the extent permitted by applicable
Laws, any other circumstances which might otherwise constitute a defence available to, or a discharge of, the Buyer Shareholder
in respect of its guarantee. |
| (c) | The obligations and liabilities of the Buyer Shareholder hereunder shall not be impaired, diminished,
abated or otherwise affected by the commencement by or against the Buyer of any proceedings under any bankruptcy or insolvency
law or laws relating to the relief of debtors, re-adjustment of indebtedness, reorganization, arrangements, compositions or extensions
or other similar laws. |
| (d) | The Buyer Shareholder shall promptly (and, in any case, within three Business Days) after demand
in writing from the Seller, without any evidence that the Seller has demanded that the Buyer pay any of the Buyer Payment Obligations
or that the Buyer failed to pay the relevant Buyer Payment Obligation. If the Seller makes a demand upon the Buyer Shareholder,
the Buyer Shareholder shall be held and bound to the Seller as a principal debtor and not merely as surety in respect of the relevant
Buyer Payment Obligation and the Buyer Shareholder shall pay the relevant amount required by the Buyer Payment Obligation to the
Seller free and clear and without deduction or withholdings of any kind. |
| (e) | The Buyer Shareholder hereby waives promptness, diligence, demand, notice of acceptance and any
other notice with respect to any of the guaranteed obligations and this Agreement. |
| (f) | The Buyer Shareholder hereby agrees to indemnify and save the Seller harmless from and against
any loss arising as a result of the failure of the Buyer to perform the Buyer Payment Obligations, in each case limited to the
amount of the relevant payment, and all reasonable costs and expenses which they suffer or incur as a direct result of the enforcement
of the guarantee contained in this Section 3.8. |
3.9 Golden
Star Guarantee
Golden Star will cause the Seller to
perform all of its obligations under this Agreement and hereby guarantees, covenants and agrees to be jointly and severally liable
with the Seller for the due and punctual performance of the obligations of the Seller arising under and in connection with this
Agreement.
3.10 Non-Compete
by Seller
Following the Closing until the date
that is two years (2) from the date hereof, the Seller and Golden Star shall not, and shall cause their respective Affiliates not
to, directly or indirectly acquire, encourage any person to acquire or aide or assist any person in the acquisition of (i) any
Company Xxxxx Xxxxxxxx Property or (ii) any Mineral Rights, in the Area of Interest that were relinquished by a person controlling
any Company Xxxxx Xxxxxxxx Property within the five (5) year period preceding the Closing Date.
3.11 Non-Solicit
by Seller
| (a) | From the Execution Date until the date arising on the 2 year anniversary of the Closing Date, without
the prior written consent of the Buyer, the Seller will not, and will not permit any of its Affiliates or its and their respective
representatives to, knowingly solicit or cause to be solicited for employment, or hire, any Employee, provided that nothing in
this Section 3.11(a) shall prevent the Seller or any of its Affiliates from: (i) hiring any Employee whose employment has been
terminated by a Company Group member after the Closing Date; or (ii) hiring any Employee who responds to any general solicitation
not specifically targeted at an Employee or Employees. |
| (b) | The Seller acknowledges and agrees that, in the event that an Employees hired or employed by the
Seller or any of its Affiliates (other than in the circumstances permitted under Section 3.11(a) during the period specified in
Section 3.11(a), the Seller shall pay to the Buyer an amount calculated as follows: |
| i. | if such person is hired or employed by the Seller or any of its Affiliates during the period commencing
on the Execution Date and ending prior to the date arising 6 months after the Closing Date, an amount equal to 5 times the relevant
employees annual salary under its contract for employment with the Company Group; or |
| ii. | if such person is hired or employed by the Seller or any of its Affiliates during the period commencing
on the date arising 6 months after the Closing Date and ending on the 2 year anniversary of the Closing Date, an amount equal to
2 times the relevant employees annual salary under its contract for employment with the Company Group. |
The Seller shall
be required to make a payment calculated in accordance with this Section 3.11(b) for each Employee (or former Employee) who is
hired or employed by the Seller or any of its Affiliates (other than in the circumstances permitted under Section 3.11(a) during
the period specified in Section 3.11(a).
| (c) | The Seller shall pay such amount owing to the Buyer under Section 3.11(b) in immediately available
funds within 15 days of the Employee ceasing to be employed by a member of the Company Group or if such Employee ceased employment
in the period between the Execution Date and the Closing Date, within 15 days of the Closing Date. The Buyer acknowledges and agrees
that receipt of any payment owing under Section 3.11(b) will be in full and final settlement of any Claim that the Buyer may have
for the respective breach by the Seller of its obligations under 3.11(a). |
| (d) | Notwithstanding anything to the contrary, the Seller’s obligations under this Section 3.10
are not limited or otherwise reduced by any other provision of this Agreement. |
| (e) | Notwithstanding anything to the contrary, the obligations contained in this Section 3.10 shall
not apply in relation to those Employees listed in Schedule 3.3(f) of the Seller Disclosure Letter (collectively, the “Excluded
Employees”). |
3.12 Non-Solicit
by Buyer or the Company Group
| (a) | From the Execution Date until the date arising on the 2 year anniversary of the Closing Date, without
the prior written consent of the Seller, the Buyer and the Company Group will not, and will not permit any of their respective
Affiliates or its and their respective representatives to, knowingly solicit or cause to be solicited for employment, or hire,
any employee of the Seller or its Affiliates (not including the Company Group) as at the Closing Date and all individuals employed
by any member of the Seller and its Affiliates within the period commencing on Closing and ending 6 months later, provided that
written notice of the names of such individuals is provided in writing to the Buyer (collectively, “Seller Affiliated
Employees”), provided that nothing in this Section 3.12(a) shall prevent the Buyer, the Company Group or any of its Affiliates
from: (i) hiring any Seller Affiliated Employee whose employment has been terminated by the Seller or its Affiliates after the
Closing Date; or (ii) hiring any Seller Affiliated Employee who responds to any general solicitation not specifically targeted
at persons employed by the Seller or its Affiliates. |
| (b) | The Buyer acknowledges and agrees that, in the event that a Seller Affiliated Employees is hired
or employed by the Buyer, the Company Group or any of their Affiliates (other than in the circumstances permitted under Section
3.12(a) during the period specified in Section 3.12(a), the Buyer shall pay to the Seller an amount calculated as follows: |
| i. | if such person is hired or employed by the Buyer, the Company Group or any of their Affiliates
during the period commencing on the Execution Date and ending prior to the date arising 6 months after the Closing Date, an amount
equal to 5 times the relevant employees annual salary under its contract for employment with the Seller or its Affiliates; or |
| ii. | if such person is hired or employed by the Buyer, the Company Group or any of their Affiliates
during the period commencing on the date arising 6 months after the Closing Date and ending on the 2 year anniversary of the Closing
Date, an amount equal to 2 times the relevant employees annual salary under its contract for employment with the Seller or its
Affiliates. |
The Buyer shall
be required to make a payment calculated in accordance with this Section 3.12(b) for each Seller Affiliate Employee (or former
Seller Affiliated Employee) who is hired or employed by the Buyer, the Company group or any of their Affiliates (other than in
the circumstances permitted under Section 3.12(a) during the period specified in Section 3.12(a).
| (c) | The Buyer shall pay such amount owing to the Seller under Section 3.12(b) in immediately available
funds within 15 days of the Seller Affiliated Employee ceasing to be employed by a member of the Seller or its Affiliates or if
such Seller Affiliated Employee ceased employment in the period between the Execution Date and the Closing Date, within 15 days
of the Closing Date. The Seller acknowledges and agrees that receipt of any payment owing under Section 3.12(b) will be in full
and final settlement of any Claim that the Seller may have for the respective breach by the Buyer of its obligations under 3.12(a). |
| (d) | Notwithstanding anything to the contrary, the Buyer’s obligations under this Section 3.12
are not limited or otherwise reduced by any other provision of this Agreement. |
3.13 Wrong
Pockets
If within 2 years after the Closing
Date a Party becomes aware that (i) any assets that are legally owned by or Business Records relating to the Company Group are
in the possession of the Seller or its Affiliates (for greater certainty not including the Company Group), or (ii) any assets that
are legally owned by or Business Records relating to the Seller or its Affiliates (for greater certainty not including the Company
Group) are in the possession of the Buyer or the Company Group, then the person in possession of such assets or Business Records
shall as soon as reasonably practicable and, in any event within 10 Business Days following written request therefor, deliver the
assets or Business Records to the legal owner thereof. Notwithstanding the foregoing, the Buyer agrees that the Mineral Rights
set forth in Schedule 3.13 of the Seller Disclosure Letter belong to an Affiliate of the Seller and shall be transferred in accordance
with such Schedule.
3.14 Change
of Name
As soon as reasonably practicable but
no later than 90 days following the Closing Date, the Buyer shall make all filings, with copies thereof provided to the Seller,
with the relevant Governmental Authority necessary to and shall otherwise cause the Company Subsidiary to cease using the name
“Golden Star” and, following receipt of the confirmation from the relevant Governmental Authority, shall deliver evidence
reasonably satisfactory to the Seller of the change of the name of the Company Subsidiary such that it does not contain “Golden
Star” in its name.
Article
4
Covenants of THE BUYER DURING THE DEFERRED PAYMENT PERIOD
4.1 Reporting
Obligations
During the Deferred Payment Period,
the Buyer shall, provide to the Seller (i) in the event of the occurrence of any material event, written notice of such material
event promptly upon its occurrence, and (ii) prior 1 March of a given calendar year, an annual written update in reasonable detail
as to all material information (if any), including the details of any extraction of the B/P Refractory Mineral Resources, arising
during the previous calendar year relevant to the determination of the payment of the Sulphides Contingent Payment (or part thereof)
with the first such update to be delivered prior to 1 March 2021, subject to a material event resulting the requirement to inform
the Seller ahead of this date.
Article
5
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller hereby represents and warrants
to the Buyer as follows and acknowledges that the Buyer is relying on such representations and warranties in entering into this
Agreement and completing the purchase of the Purchased Shares and the transactions contemplated hereby:
5.1 Existence
of the Seller and members of Company Group
The Seller is an exempted company validly
existing and in good standing under the laws of the Cayman Islands. The Seller has the corporate power to: (i) own the shares of
the Company and to carry on its business as currently conducted; and (ii) execute, deliver and perform its obligations under this
Agreement. Each member of the Company Group is a company validly existing and in good standing under the laws of its respective
jurisdiction of incorporation. Each member of the Company Group has the corporate power to carry on its business as currently conducted.
5.2 Execution,
Delivery and Enforceability
The execution, delivery and performance
of this Agreement by the Seller has been, and each other instrument or agreement to be executed and delivered by the Seller or
any of its Affiliates (other than Golden Star) as required by this Agreement has been or will at Closing be (as applicable), duly
authorized by all necessary corporate action on the part of the Seller and such Affiliates (as applicable) and in each case constitutes
or, in respect only of each other instrument or agreement to be executed and delivered by the Seller or any of such Affiliates
as required by this Agreement will at Closing constitute (as applicable), a legal, valid and binding obligation of the Seller or
such Affiliates (as applicable) enforceable by the Buyer in accordance with its terms, except insofar as enforceability may be
limited by applicable bankruptcy, insolvency and other rights of creditors generally and except that equitable remedies may be
granted only in the discretion of a court of competent jurisdiction.
5.3 Insolvency
Neither the Seller nor any of the Company
Group member is insolvent or unable to pay its debts under the insolvency laws of the jurisdiction of its incorporation nor has
it stopped paying its debts as they fall due, except as set forth in Schedule 5.3 of the Seller Disclosure Letter. No order has
been made, petition presented or resolution passed for the winding up or dissolution of the Seller or any Company Group member.
No administrator, receiver, manager or equivalent officer has been appointed by any person in respect of the Seller, any Company
Group member or all or any of their respective assets, and to the knowledge of the Seller, no steps have been taken to initiate
any such appointment and no voluntary arrangement has been proposed relating to the Seller or any Company Group member.
5.4 No
Conflict
The entering into of this Agreement,
and the performance by the Seller of its obligations hereunder including the sale of the Purchased Shares will not, subject to
receipt of the requisite regulatory approvals listed in Schedule “B” and those consents, discharges and releases which
are required in connection with the Macquarie Facility and the Streaming Agreement: (i) violate or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under any provision
of the constating documents of the Seller or any member of the Company Group, or any Material Contract to which the Seller or any
member of the Company Group is a party or by which the Seller or any member of the Company Group is bound, or result in the creation
of any material Encumbrance other than a Permitted Encumbrance on any of the assets of the Seller or any member of the Company
Group; or (ii) result in a violation in any material respect of any of the terms and provisions of any Laws applicable to the Seller
or any member of the Company Group.
5.5 Ownership
of the Purchased Shares; Subsidiaries
Immediately prior to the Time of Closing
(i) the Seller will be the direct owner of 100% of the issued and outstanding shares of the Company and the Company will be the
direct owner of 90% of the issued and outstanding shares of the Company Subsidiary (“Company Subsidiary Shares”)
and (ii) the Seller will be the registered and beneficial owner of record of the Purchased Shares and the Company will be the registered
and beneficial owner of the Company Subsidiary Shares. Immediately prior to the Time of Closing the Purchased Shares and the Company
Subsidiary Shares will, in each case, be free and clear of all Encumbrances, other than Permitted Encumbrances. Except as set forth
in in Schedule 5.5 of the Seller Disclosure Letter, none of the Purchased Shares or the issued and outstanding shares of any member
of the Company Group is subject to any voting trust, shareholder agreement or voting agreement. The Purchased Shares constitute
the entire allotted and issued share capital of the Company and are fully paid up. None of the Company Group members carry on business
in partnership or joint venture with any other person, and none of the Company Group members has any branch or agency in any jurisdiction
outside of Ghana. Upon completion of the transactions contemplated by this Agreement, the Seller will convey to the Buyer good
and valid title to the Purchased Shares subject to Permitted Encumbrances, and all of the Purchased Shares will be owned by the
Buyer as the registered and beneficial owner of record, free and clear of all Encumbrances (except such Encumbrances as may have
been granted by the Buyer and except for the Permitted Encumbrances). Provided that the consent of RGLD is obtained under the Streaming
Agreement and of Macquarie Bank Limited is obtained under the Macquarie Facility, there are no restrictions of any kind that prevent
or restrict the payment of dividends or other distributions by the Company Group other than any restrictions under applicable Laws
or the articles of association of the Company Group. Except for the Company Subsidiary, the Company does not own beneficially or
of record, any securities or other ownership, equity or proprietary interests of any kind in any person and will not be bound by
any commitment or obligation to acquire any securities or other ownership, equity or proprietary interests of any kind in any person.
At Closing, the share registers delivered to the Seller in accordance with 9.2(h) will set out in full the authorized, issued and
outstanding capital of each member of the Company Group, including the names and ownership interest of the legal and beneficial
holders of such securities. At Closing, the Ministry of Lands and Natural Resources will, on behalf of the Government of Ghana,
hold such shares in the Company Subsidiary as constitutes the full 10% free carried interest acquired by the Government of Ghana
as contemplated in the Minerals and Mining Act, 2006 (Act 703) (Ghana) and, except as disclosed in Schedule 5.5 of the Seller Disclosure
Letter the Government of Ghana shall not be entitled to any other interest in the Company Subsidiary.
5.6 Consents
| (a) | Except as disclosed in Schedule 5.6(a) of the Seller Disclosure Letter, no Consent or waiver of
any Governmental Authority is required to be obtained or made by the Seller or any member of the Company Group in connection with
the consummation of the transactions contemplated by this Agreement which, if not obtained, would result in a Company Xxxxx Xxxxxxxx
Adverse Change. |
| (b) | Except as disclosed in Schedule 5.6(b) of the Seller Disclosure Letter, no Consent or waiver is
required to be obtained under any Material Contract of any of the members of the Company Group in connection with the consummation
of the transactions contemplated by this Agreement. |
5.7 No
Other Agreements to Purchase; No Options
Except as disclosed in Schedule 5.7
of the Seller Disclosure Letter, no person other than the Buyer has any written or oral agreement or option or any right or privilege
(whether by Law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase or acquisition from the
Seller of any of the Purchased Shares or capable of becoming an agreement or option for the purchase or acquisition of any securities
of any member of the Company Group.
5.8 Company
Group Financial Statements
The Company Group Financial Statements
were prepared in accordance with the requirements of applicable Laws and IFRS except as set out in Schedule 5.8 of the Seller Disclosure
Letter, are correct and complete in all material respects and present fairly in all material respects the assets and liabilities
(as required by IFRS to be set out on a balance sheet) of the Company Group members as at date of the balance sheet forming part
of the Company Group Financial Statements and the results of operations of the Company Group members, for the periods covered by
the Company Group Financial Statements.
5.9 No
Undisclosed Liabilities
At the Time of Closing, no member of
the Company Group will have any liabilities which would be required to be disclosed on a balance sheet prepared in accordance with
IFRS, whether direct or indirect, absolute, accrued or contingent, or that are otherwise outstanding and are due and remain unpaid,
except: (i) those liabilities reflected or reserved against on the Company Group Financial Statements; (ii) accounts payable to
trade creditors, remuneration and other compensation payable to Employees, liabilities for Taxes to Governmental Authorities, and
other accrued expenses, in each case incurred by the Company Group members since the date of the Company Group Financial Statements
in the ordinary course of business and included in the Balancing Payment Calculation; (iii) as set out in Schedule 5.9 of the Seller
Disclosure Letter, and (iv) all liabilities included in the Balancing Payment Calculation. The total amount of borrowings of each
of the Company Group members does not exceed any limitations on the borrowing powers set out in its articles of association, by-laws
or equivalent constitutive documents.
5.10 Absence
of Changes
Since June 30, 2020 and except as disclosed
in Schedule 5.10 of the Seller Disclosure Letter, the business of the Company Group taken as a whole has been conducted only in
the ordinary course of business consistent with past practice and there has not been any Company Xxxxx Xxxxxxxx Adverse Change.
5.11 Information
| (a) | The information made available in the VDR was compiled in good faith and to the knowledge of the
Seller is complete and accurate in all material respects as of the respective dates as of such information; provided however that
the foregoing shall not apply to and specifically excludes any estimates, business plans, projections, forecasts or other forward-looking
information made available in the VDR. |
| (b) | The Seller has responded to the questions raised in the Due Diligence Questionnaires in good faith
and has not included any information in the Due Diligence Questionnaires that it is aware is misleading in any material respect. |
5.12 Books
and Records
As of the Execution Date hereof, the
financial books, records and accounts of each member of the Company Group fairly reflect the material transactions and dispositions
of the assets and properties of each member of the Company Group. As of the Execution Date, the Business Records for each member
of the Company Group have been maintained in compliance in all material respects with applicable Laws.
5.13 Insurance
Schedule 5.13 of the Seller Disclosure
Letter sets out true, accurate and complete particulars of all insurance policies of the members of the Company Group that are
in force specifying in each case, the name of the insurer, the relevant risks insured against, the policy number, and any pending
claims. No member of the Company Group: (i) is in material default with respect to any of the provisions contained in any such
insurance policy; or (ii) has failed to give any notice or present any material claim under any such insurance policy in a due
and timely manner. There are no material claims by any member of the Company Group pending under any of the Company Group’s
insurance policies as to which coverage has been questioned, denied or disputed by the underwriters of such policies or in respect
of which such underwriters have reserved their rights.
5.14 Litigation
Except as disclosed
in Schedule 5.14 of the Seller Disclosure Letter:
| (a) | there are no material Proceedings pending, or, to the knowledge of the Seller, threatened against
or affecting or related to, any member of the Company Group before or by any court or any Governmental Authority; and |
| (b) | no Company Group member is the subject of any order of a court, tribunal, arbitral or administrative
body, regulator or any Governmental Authority that materially restricts the Operation or business of the Company Subsidiary. |
5.15 Taxes
| (a) | Each member of the Company Group has duly filed on a timely basis with the appropriate Governmental
Authority all Tax Returns required to be filed by each of them. All such Tax Returns were complete and accurate in all material
respects. At the Time of Closing, to the knowledge of the Seller each member of the Company Group will have paid all Taxes which
are due and payable (including all instalments and prepayments of Tax as required by applicable Laws). |
| (b) | At the Time of Closing there will be no agreements, waivers or other arrangements to which the
Company Group is a party providing for an extension of time for any member of the Company Group to file any Tax Return or pay any
Taxes or for any Governmental Authority to examine any Tax Return or levy any assessment. |
| (c) | At the Time of Closing, to the knowledge of the Seller each member of the Company Group will have
collected all material amounts required to be collected by it on account of Taxes and remitted, in all material respects, to the
appropriate Governmental Authority when required by applicable Laws to do so, all such amounts collected by it. |
| (d) | Except as set forth in Schedule 5.15(d) of the Seller Disclosure Letter, at the Time of Closing
there will be no material Proceedings pending or, to the knowledge of the Seller, threatened against any member of the Company
Group in respect of Taxes, governmental charges or assessments, nor will there be any material matters under discussion by any
member of the Company Group with any Governmental Authority relating to Taxes, governmental charges or assessments. |
| (e) | The tax losses balance of the Company Group as disclosed in the VDR reflects the Tax Returns as
filed and are subject to review by the tax authorities as disclosed in Schedule 5.15(d) of the Seller Disclosure Letter. |
| (f) | All liabilities of each Company Group member for Tax, have been accounted for in accordance with
IFRS in the balance sheet of the Company Group dated June 30, 2020. |
| (g) | Withholding tax on payments by a Company Group member have been deducted at source where required
by applicable Laws and duly paid to the relevant Governmental Authority in accordance with applicable Laws. |
| (h) | All documents in the possession or under the control of a Company Group member to which a Company
Group member is a party and which attract stamp duty have been duly stamped and all such duties have been paid. |
5.16 Employment
Matters
| (a) | The members of the Company Group are in compliance in all material respects with: (i) all applicable
Laws relating to employment and employment practices, including terms and conditions of employment, wages, overtime, vacations,
hours of work, collective bargaining, collective agreements, benefits extensions, anti-union practices, occupational safety and
health, labour accidents and diseases, severance payments, bonuses, whether under applicable Laws and/or their individual or collective
employment agreements, all social security obligations and debts arising in connection with social security contributions, pension
fund contributions, mandatory health care contributions, unemployment insurance contributions, welfare payments and insurance for
work-related accidents and illnesses; (ii) any contractual obligations in relation to the funding of pension contributions, employee
share plans, profit share plans or bonus schemes; and (iii) any other applicable labour and social security Laws. There are no
individuals employed by the Company. |
| (b) | There are no employee share plans, profit share plans, bonus schemes or other similar arrangements
with respect to the Company Group other than the Share Appreciation Rights Plan. |
| (c) | To the knowledge of the Seller, all subcontractors who provide services to the members of the Company
Group, as well as their workers, provide services in accordance with their respective service agreements executed with the applicable
member of the Company Group, and they are not subject to any subordination or dependence. |
| (d) | Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby
(either alone or together with any other event, including a termination of employment) will result in any Employee of or consultant
to any member of the Company Group becoming entitled to, or any increase in, any material payment or benefit (including severance
pay) or accelerate the timing of payment or vesting of any material compensation or benefits, in either case under any employee
benefit plan of the Company Group in respect of the Employees. |
| (e) | Within the three (3) years preceding the date hereof, no Company Group member has been engaged
or involved in any material trade dispute with any Employee, trade union, works council, special negotiating body, staff association
or any other body representing Employees and, to the knowledge of the Seller, no material event has occurred which would reasonably
be expected to give rise to any such dispute with any past or present Employee and no industrial action involving Employees, official
or unofficial, is now occurring or, to the knowledge of the Seller, threatened. |
| (f) | There are no terms or conditions under which any Employee is employed or engaged that would reasonably
be expected to give rise to any claim for discrimination on the grounds of sex, sexual orientation, marital status, gender reassignment,
race, nationality, religion or belief, disability or age or for equal pay or treatment. |
5.17 Mineral
Property and Mineral Rights
| (a) | Schedule “A” sets out an accurate and complete list of each of the Company Xxxxx Xxxxxxxx
Property Mineral Rights, and includes all of mining rights owned by each of the Company Group members. |
| (b) | Other than the Company Xxxxx Xxxxxxxx Property and the Company Xxxxx Xxxxxxxx Property Mineral
Rights, neither the Company nor the Company Subsidiary owns or has any interest in any material real property or any material mineral
interests and rights. |
| (c) | Each Company Xxxxx Xxxxxxxx Property Right Mineral Right is in full force and effect in accordance
with its terms and is validly held in accordance with applicable Law. |
| (d) | The Company Xxxxx Xxxxxxxx Property Mineral Rights are in good standing and all work required under
applicable Laws to be performed with respect thereto has been performed in all material respects, all filings and payments of fees,
royalties and charges required to maintain the Company Xxxxx Xxxxxxxx Property Mineral Rights in full force and effect and otherwise
in good standing have been properly and timely recorded or filed with, appropriate Governmental Authorities, and all terms and
conditions of the Company Xxxxx Xxxxxxxx Property Mineral Rights have been complied with by the Company Group in all material respects. |
| (e) | The members of the Company Group have all necessary surface rights, Mineral Rights, water rights,
rights of way, licenses, easements, ingress, egress and access rights, and all other required Assets, rights and interests granting
the Company Group the rights and ability to mine, extract, remove or process the minerals currently produced at the Company Xxxxx
Xxxxxxxx Property. |
| (f) | Neither the Seller nor any Company Group member has violated any provision of, or taken or failed
to take any act which, with or without notice, lapse of time, or both, would reasonably be expected to constitute a material default
under the provisions of such Company Xxxxx Xxxxxxxx Property Mineral Right and neither the Seller nor any Company Group member
has received notice of a material breach, violation or default under any Company Xxxxx Xxxxxxxx Property Mineral Right within the
12-month period immediately prior to the date of this Agreement. |
| (g) | All interests in the Company Xxxxx Xxxxxxxx Property and the Company Xxxxx Xxxxxxxx Property Mineral
Rights are owned, leased or held by the Company Subsidiary as owner, and are free and clear of any Encumbrances other than Permitted
Encumbrances. |
| (h) | There are no material restrictions on the ability of the Company Subsidiary to use, transfer or
exploit any of the Company Xxxxx Xxxxxxxx Property or the Company Xxxxx Xxxxxxxx Property Mineral Rights, except pursuant to the
applicable Laws, the Streaming Agreement, the Macquarie Facility and the Permitted Encumbrances. |
| (i) | Neither the Company nor the Company Subsidiary has received any notice, whether written or oral,
from any Governmental Authority of any revocation or intention to revoke any interest of the Company or the Company Subsidiary
in the Company Xxxxx Xxxxxxxx Property or the Company Xxxxx Xxxxxxxx Property Mineral Rights. |
| (j) | At the time of filing, the Company Xxxxx Xxxxxxxx Property Technical Report complied, in all material
respects, with the requirements of NI 43-101 and was based upon information prepared, reviewed and/or verified by or under the
supervision of a “qualified person” (as such term is defined in NI 43-101) and was true, complete and accurate in all
material respects at the time of filing. |
| (k) | Schedule 5.17(k) of the Seller Disclosure Letter contains an accurate and complete list of all
royalties or equivalent obligations payable by and to the Company Group members, and save and except for the Streaming Agreement
and the rights provided under applicable Laws, no person has any preferential right or interest in any of the Company Xxxxx Xxxxxxxx
Property Mineral Rights or the production or profits therefrom or any royalty, net smelter return, net profit interest or similar
interest in respect thereof or any right to acquire any such interest. |
| (l) | Schedule 5.17(l) of the Seller Disclosure Letter contains an accurate and complete list of back-in
rights, earn-in rights, rights of first refusal or similar third-party rights which currently affect any of the Company Xxxxx Xxxxxxxx
Property Mineral Rights. |
5.18 Assets
| (a) | Except as set forth in Schedule 5.18(a) of the Seller Disclosure Letter, each member of the Company
Group is the legal and beneficial owner of all material tangible assets used by it for or in connection with their respective operations.
All of such assets in the possession and control of the Company Group are free from all Encumbrances other than Permitted Encumbrances. |
| (b) | Save for (i) the free carried interest of the Government of Ghana, (ii) the Mansiso Net Smelter
Return Royalty Agreement, and (iii) the Asikuma Net Smelter Return Royalty Agreement, neither the Company nor the Company Subsidiary
is a party to any agreement or arrangement that requires the payment of any free carry, royalty or net smelter return agreement
or similar arrangements under which profits or revenue that are related to or generated in connection with the Company Xxxxx Xxxxxxxx
Property are to be received by a third party. |
| (c) | Other than the Streaming Agreement, neither the Company nor the Company Subsidiary is a party to
any agreement that grants (i) rights of first refusal, rights of first negotiation or similar pre-emptive rights, or (ii) puts,
calls or similar rights, to any person (other than the Company or the Company Subsidiary) with respect to any Asset that is material
to the Company Xxxxx Xxxxxxxx Property. |
| (d) | Neither the Company nor the Company Subsidiary is a party to any agreement or arrangement that
relates to the acquisition or disposition of any business or assets (other than the purchase and sale of ore, concentrate, doré,
or other unrefined gold products originating from or produced within the area of the Company Xxxxx Xxxxxxxx Property in the ordinary
course of business consistent with past practice and other than pursuant to the Streaming Agreement) pursuant to which the Company
or the Company Subsidiary has any liability in excess of US$1,500,000 in any transaction or series of related transactions. |
5.19 Permits
| (a) | The Company or the Company Subsidiary has obtained all material Permits required in connection
with the operation of the Company Xxxxx Xxxxxxxx Property in the ordinary course of business (including duly submitting applications
for the renewal of such Permits), and all such Permits are valid and in full force and effect (including where Ghanaian law allows
for continued operation under the terms of an expired Permit whilst the renewal application is being considered and determined). |
| (b) | Neither the Company nor the Company Subsidiary has received any notice, whether written or oral,
from any Governmental Authority alleging that the Company or the Company Subsidiary does not have any material Permit required
for carrying on the mineral operations to which said material Permit relates in the manner in which it is carried on at the date
of this Agreement. |
5.20 [Reserved]
5.21 Affiliate
Transactions
The Seller and its Affiliates (other
than the Company Group members) do not possess, directly or indirectly, any financial interest in any person which is a counterparty
to any of the Material Contracts.
5.22 Agreements
and Commitments
Schedule 5.22 of the Seller Disclosure
Letter contains a list of all Material Contracts entered into by the Company Group. Except as disclosed in Schedule 5.22 of the
Seller Disclosure Letter: (i) each of the Company Group members have performed in all material respects all of the obligations
required to be performed by it under such Material Contracts; (ii) none of the Company Group members is in material default or,
to the knowledge of the Seller alleged to be in material default in respect, of any such Material Contract which would reasonably
be expected to result in a Company Xxxxx Xxxxxxxx Adverse Change; (iii) all such Material Contracts are valid and binding agreements
of the applicable Company Group member and are in good standing and in full force and effect; (iv) the relevant Company Group member
has received all material consents, licences, authorisations, orders, grants, confirmations, permissions, registrations and other
approvals necessary (if any) under any applicable Laws from each appropriate Governmental Authority to allow it to perform all
of its obligations under the Material Contracts; and (v) to the knowledge of the Seller, no event, condition or occurrence has
occurred or exists which, after notice or lapse of time or both, would constitute a material default by any of the Company Group
member under any such Material Contract which would reasonably be expected to result in a Company Xxxxx Xxxxxxxx Adverse Change.
5.23 Environmental
and Health and Safety Matters
Except as disclosed in Schedule 5.23
of the Seller Disclosure Letter:
| (a) | each Company Group member is and has been in compliance in all material respects with all applicable
Environmental Laws and Health and Safety Laws; |
| (b) | each Company Group member has obtained, and currently is in material compliance with all Permits
required of the Company Group member pursuant with all applicable Environmental Laws and Health and Safety Laws; |
| (c) | no Company Group member has generated, stored, used, emitted, discharged or disposed of any Hazardous
Substances, except as permitted under applicable Environmental Laws and Health and Safety Laws; |
| (d) | no Company Group member has assumed, either contractually or by operation of law, the liability
of any other person under any Environmental Law or Health and Safety Law; |
| (e) | there have been no Proceedings, notices of or prosecutions, for an offence alleging, non-compliance
with any Environmental Laws or Health and Safety Laws by the Company or the Company Subsidiary, and, to the knowledge of the Seller,
none are threatened; |
| (f) | there have been no settlements of any allegation of non-compliance short of prosecution and there
are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures
to be made by the Company or the Company Subsidiary; |
| (g) | to the knowledge of the Seller, there are no facts, circumstances or conditions relating to the
past or present business or Operations of the Company Group or carried out on the Company Xxxxx Xxxxxxxx Property by the Company
Group, the Seller or their Affiliates (including the release or disposal of any wastes, Hazardous Substances or other materials
at any location), or to any real property or facility owned, leased, or operated by the Company Group, that would reasonably be
expected to give rise to any material Proceeding, or to any material liability, under any Environmental Law or Health and Safety
Law; |
| (h) | no Remediation Order or other notice has been received by the Company or the Company Subsidiary,
and to the knowledge of the Seller, no notice has been issued alleging or stating that the Company or the Company Subsidiary is
potentially responsible for a federal, provincial, state, municipal or local clean-up site or material corrective action under
any Environmental Laws; |
| (i) | to the knowledge of the Seller there are no material ongoing environmental audits, evaluations,
assessments, studies or tests being conducted in respect of the Company Xxxxx Xxxxxxxx Property except for ongoing audits, evaluations,
assessments, studies or tests being conducted in the ordinary course; and |
| (j) | full details of all health and safety policies and procedures and any complaints, recommendations,
investigations or claims relating to health and safety issues made or carried out in the last three (3) years and affecting any
Company Group member and its Employees are contained in the VDR. |
5.24 Company
Group Intellectual Property
Except as disclosed in Schedule 5.24
of the Seller Disclosure Letter:
| (a) | the Company Group owns or has a valid or enforceable license or other right to use all Intellectual
Property necessary and material to conduct its Operations as presently conducted; |
| (b) | the Seller has no knowledge of any claim of infringement or breach by any of the Company Group
members of any Intellectual Property rights of any other person; and |
| (c) | neither the Seller nor any Company Group member or any of their respective Affiliates has received
any notice or claim from any person, nor is any Company Group member the subject of any ongoing legal Proceedings challenging its
right to use any material Intellectual Property, or its ownership of, or license or right to, the Intellectual Property used to
conduct its Operations, or the validity of such Intellectual Property. To the knowledge of the Seller, no person is infringing
the Intellectual Property owned by any Company Group member to conduct its Operations, nor is any claim regarding any such infringement
pending. |
5.25 Compliance
with Laws
Save and except as set out in Schedule
5.25 of the Seller Disclosure Letter, (i) each member of the Company Group is in compliance in all material respects with applicable
Laws in connection with its Assets and the conduct of its Operations; (ii) neither the Seller nor any Company Group member has
received any notice that any material violation of applicable Laws in connection with its Assets and the conduct of its Operations
is being alleged; and (iii) neither the Seller nor any Company Group member has received any warning letters, notices of adverse
findings, or similar documents that assert a lack of substantial compliance with any applicable Laws, order, or regulatory requirements
that have not been fully resolved to the satisfaction of the applicable Governmental Authority. There is no pending or, to the
knowledge of the Seller, threatened regulatory action, investigation or inquiry alleging breach of applicable Laws by any Governmental
Authority (other than non-material routine or periodic inspections or reviews) against the Company Group.
5.26 Unlawful
Contributions
During the ten (10)
year period preceding the date of this Agreement:
| (a) | each of the Seller and the Company Group members are and have been in compliance with, and none
of them has been charged under, AML Legislation; and |
| (b) | each of the Seller and the Company Group members and, to the knowledge of the Seller, their respective
officers and directors and employees and agents are in compliance with and have not been charged under: |
| i. | Anti-Corruption Laws or made, paid or received any unlawful bribes, kickbacks, facilitation payments
or other similar payments to or from any person (including any customer or supplier) or Governmental Authority, or made or paid
any contributions, directly or indirectly, to a domestic or foreign political party or candidate or made or paid any other improper
payment; and |
| ii. | applicable Sanctions and are not engaged in any activity that would reasonably be expected to result
in any of the relevant persons as a Sanctioned Person or Sanctioned Entity. |
5.27 Community
Relations
To the knowledge of the Seller, as at
the date of this Agreement, no official representative of any Community has communicated to the Seller or Company Group member
a requirement for:
| (a) | the consent of such community to be obtained as a condition to the Operations of Company Group,
including the Company Xxxxx Xxxxxxxx Property Mineral Rights, and which consent would be required under applicable Laws; or |
| (b) | a material increase in the compensation payments payable by the Company Group under any applicable
Contract as a condition to or as a consequence of the Operations of the Company Group, including the Company Xxxxx Xxxxxxxx Property
Mineral Rights, and which increase would be required under applicable Laws. |
5.28 Finders'
Fee
There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act on behalf of the Seller or any member of the Company
Group who might be entitled to any fee or commission from the Company Group in connection with the transactions contemplated by
this Agreement.
5.29 No
Other Representations and Warranties
Except for the representations and warranties
contained in this Article 5, neither the Seller nor any other Person has made or makes any other express or implied representation
or warranty, either written or oral, on behalf of the Seller or any member of the Company Group, including any representation or
warranty as to the accuracy or completeness of any information regarding the Company furnished or made available to the Buyer or
its Affiliates or as to the future revenue, profitability or success of the Company Group, or any representation or warranty arising
from statute or otherwise in Law. The Seller shall not be liable to the Buyer for any Losses resulting from or relating to any
inaccuracy in a representation of a breach of warranty in this Article 5 if the Buyer had knowledge of such misrepresentations
or breach before Closing.
Article
6
REPRESENTATIONS AND WARRANTIES OF GOLDEN STAR
Golden Star hereby represents and warrants
to the Buyer as follows and acknowledges that the Buyer is relying on such representations and warranties in entering into this
Agreement and completing the purchase of the Purchased Shares and the transactions contemplated hereby:
6.1 Existence
of Golden Star
Golden Star is a company validly existing
and in good standing under the federal laws of Canada. Golden Star has the corporate power to execute, deliver and perform its
obligations under this Agreement.
6.2 Execution,
Delivery and Enforceability
The execution, delivery and performance
of this Agreement has been duly authorized by all necessary corporate action on the part of Golden Star and constitutes a legal,
valid and binding obligation of Golden Star enforceable by the Buyer in accordance with its terms, except insofar as enforceability
may be limited by applicable bankruptcy, insolvency and other rights of creditors generally and except that equitable remedies
may be granted only in the discretion of a court of competent jurisdiction.
6.3 No
Conflict
The entering into of this Agreement
and the performance by Golden Star of its obligations hereunder will not, subject to receipt of the regulatory approvals listed
in Schedule “B” and those consents which are required in connection with the Macquarie Facility and the Streaming Agreement:
(i) violate, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under any provision of the constating documents of Golden Star; or (ii) result in a violation
in any material respect of any of the terms and provisions of any Laws applicable to Golden Star or the rules and regulations of
any applicable stock exchange.
6.4 Ownership
As at the date of this Agreement and
immediately prior to the Time of Closing, Golden Star will be the direct owner of all of the issued and outstanding shares of the
Seller.
6.5 Compliance
with Laws
During the period of ten (10) years
preceding the date of this Agreement, Golden Star is conducting, and has conducted, its business and operations in compliance in
all material respects with applicable Laws.
6.6 Unlawful
Contributions
During the period
of ten (10) years preceding the date of this Agreement:
| (a) | Golden Star is and has been in compliance with, and has not been charged under, AML Legislation;
and |
| (b) | Golden Star and, to the actual knowledge of Golden Star (without any inquiry or other diligence
investigations), its officers and directors and employees and agents are in compliance with and have not been charged under: |
| i. | Anti-Corruption Laws or made, paid or received any unlawful bribes, kickbacks, facilitation payments
or other similar payments to or from any person (including any customer or supplier) or Governmental Authority, or made or paid
any contributions, directly or indirectly, to a domestic or foreign political party or candidate or made or paid any other improper
payment; and |
| ii. | applicable Sanctions and are not knowingly engaged in any activity that would reasonably be expected
to result in any of the relevant persons as a Sanctioned Person or Sanctioned Entity. |
Article
7
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants
to the Seller as follows and acknowledges that the Seller is relying on such representations and warranties in entering into this
Agreement and completing the purchase of the Purchased Shares and the transactions contemplated hereby.
7.1 Existence
and Corporate Approvals
The Buyer is a corporation validly existing
and in good standing under the laws of England and Wales. The Buyer has the corporate power or other organization powers to: (i)
own the Purchased Shares; (ii) carry on its respective business as currently conducted; and (iii) execute, deliver and perform
its obligations under this Agreement. The Buyer will at (x) Closing have sufficient cash on hand or other sources of immediately
available funds to enable it to make payment of the Closing Consideration and (y) the time of payment pursuant to Sections 2.2(b)i,
2.2(c) and 2.2(d) have sufficient cash on hand or other sources of immediately available funds to enable it to make the payments
contemplated by Sections 2.2(b)i, 2.2(c) and 2.2(d) (as applicable). During the 12 month period commencing on Closing the Buyer
will have access to working capital sufficient for the operations of the Company Subsidiary and will make it available to the Company
Subsidiary. The Buyer in good faith and acting reasonably believes that it will have funds available as and when required to make
the Sulphides Contingent Payment.
7.2 Execution,
Delivery and Enforceability
The execution, delivery and performance
of this Agreement by the Buyer has been, and each other instrument or agreement to be executed and delivered by the Buyer or any
of its Affiliates as required by this Agreement has been or will at Closing be (as applicable), duly authorized by all necessary
corporate action on the part of the Buyer and its Affiliates (as applicable) and in each case constitutes or will constitute or,
in respect only of each other instrument or agreement to be executed and delivered by the Buyer or any of its Affiliates as required
by this Agreement will at Closing constitute (as applicable), a legal, valid and binding obligation of the Buyer and its Affiliates
(as applicable), enforceable by the Seller in accordance with its terms, except insofar as enforceability may be limited by applicable
bankruptcy, insolvency and other laws affecting the rights of creditors generally and except that equitable remedies may be granted
only in the discretion of a court of competent jurisdiction.
7.3 Insolvency
The Buyer is not insolvent or unable
to pay its debts under the insolvency laws of the jurisdiction of its incorporation nor has it stopped paying its debts as they
fall due. No order has been made, petition presented or resolution passed for the winding up or dissolution of the Buyer. No administrator,
receiver, manager or equivalent officer has been appointed by any person in respect of the Buyer or all or any of their respective
assets and, to the knowledge of the Buyer, no steps have been taken to initiate any such appointment and no voluntary arrangement
has been proposed relating to the Buyer.
7.4 No
Conflict
The entering into of this Agreement
and the performance by the Buyer of its obligations hereunder, will not: (i) violate, conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under
any provision of the Buyer's constating documents or any Contract to which the Buyer is a party or by which the Buyer is bound;
or (ii) result in a violation in any material respects of any of the terms and provisions of any Laws applicable to the Buyer.
7.5 Consents
and Regulatory Approvals
No Consent of any Governmental Authority,
other than the Regulatory Approvals, or any other third party is required to be obtained by the Buyer in connection with the consummation
of the transactions contemplated by this Agreement.
7.6 Compliance
with Laws
The Buyer is conducting, and has conducted,
its business and operations in compliance in all material respects with applicable Laws.
7.7 Unlawful
Contributions
During the ten (10)
years preceding the date of this Agreement:
| (a) | the Buyer is in compliance with, and has not been charged under AML Legislation; and |
| (b) | the Buyer and, to the actual knowledge of the Buyer (without any inquiry or other diligence investigations),
their respective officers and directors and employees and agents are in compliance with, and have not been charged under: |
| i. | Anti-Corruption Laws or made, paid or received any unlawful bribes, kickbacks, facilitation payments
or other similar payments to or from any person (including any customer or supplier) or Governmental Authority, or made or paid
any contributions, directly or indirectly, to a domestic or foreign political party or candidate or made or paid any other improper
payment; and |
| ii. | applicable Sanctions and are not knowingly engaged in any activity that would reasonably be expected
to result in the relevant person being designated as a Sanctioned Person or Sanctioned Entity. |
7.8 Litigation
There are no Proceedings pending, or
to the knowledge of the Buyer, threatened against the Buyer before any court or Governmental Authority nor is the Buyer subject
to any outstanding injunction, order, decree, ruling or judgment which individually or in the aggregate, would prevent or limit,
restrict or impair or hinder in any material respect the ability of the Buyer to enter into this Agreement or perform its obligations
under this Agreement.
7.9 Finders'
Fee
There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act on behalf of the Buyer who might be entitled to
any fee or commission in connection with the transactions contemplated by this Agreement.
Article
8
Representations and warranties of the buyer Shareholder
The Buyer Shareholder hereby represents
and warrants to the Seller as follows and acknowledges that the Seller is relying on such representations and warranties in entering
into this Agreement and completing the transactions contemplated hereby:
8.1 Existence
of the Buyer Shareholder
The Buyer Shareholder is a corporation
validly existing and in good standing under the laws of England and Wales. The Buyer Shareholder has the corporate power or other
organization powers to execute, deliver and perform its obligations under this Agreement. The Buyer Shareholder will have funds
available to satisfy each Buyer Payment Obligation when it falls due. During the 12 month period commencing on Closing, the Buyer
Shareholder will support the working capital requirements of the Buyer and the Company Subsidiary for its operations. The Buyer
Shareholder is not insolvent or unable to pay its debts under the insolvency laws of the jurisdiction of its incorporation nor
has it stopped paying its debts as they fall due. No order has been made, petition presented or resolution passed for the winding
up or dissolution of the Buyer Shareholder. No administrator, receiver, manager or equivalent officer has been appointed by any
person in respect of the Buyer Shareholder or all or any of their respective assets and, to the knowledge of the Buyer and the
Buyer Shareholder, no steps have been taken to initiate any such appointment and no voluntary arrangement has been proposed relating
to the Buyer Shareholder.
8.2 Compliance
with Laws
The
Buyer Shareholder is conducting, and has conducted, its business and operations in compliance in all material respects with applicable
Laws.
8.3 Unlawful
Contributions
During the ten (10)
years preceding the date of this Agreement:
| (a) | the Buyer Shareholder is in compliance with, and has not been charged under AML Legislation; and |
| (b) | the Buyer Shareholder and, to the actual knowledge of the Buyer Shareholder (without any inquiry
or other diligence investigations), their respective officers and directors and employees and agents are in compliance with, and
have not been charged under: |
| i. | Anti-Corruption Laws or made, paid or received any unlawful bribes, kickbacks, facilitation payments
or other similar payments to or from any person (including any customer or supplier) or Governmental Authority, or made or paid
any contributions, directly or indirectly, to a domestic or foreign political party or candidate or made or paid any other improper
payment; and |
| ii. | applicable Sanctions and are not knowingly engaged in any activity that would reasonably be expected
to result in the relevant person being designated as a Sanctioned Person or Sanctioned Entity. |
8.4 Execution,
Delivery and Enforceability
The execution, delivery and performance
of this Agreement constitutes a legal, valid and binding obligation of the Buyer Shareholder enforceable by the Seller in accordance
with its terms, except insofar as enforceability may be limited by applicable bankruptcy, insolvency and other rights of creditors
generally and except that equitable remedies may be granted only in the discretion of a court of competent jurisdiction.
8.5 No
Conflict
The entering into of this Agreement
and the performance by the Buyer Shareholder of its obligations hereunder will not: (i) violate, conflict with, or result in a
breach of any provision of, or constitute a default (or an event which, with notice or lapse of time, or both, would constitute
a default) under any Contract to which the Buyer Shareholder is a party or by which the Buyer Shareholder is bound; or (ii) result
in a violation in any material respect of any of the terms and provisions of any Laws applicable to the Buyer Shareholder.
Article
9
CLOSING CONDITIONS
9.1 Mutual
Conditions
The obligations of the Seller on the
one hand, and the Buyer on the other hand, to consummate the transactions contemplated by this Agreement shall be subject to the
fulfilment on or before the Time of Closing of each of the following conditions:
| (a) | no preliminary or permanent injunction or other order, decree or ruling issued by a Governmental
Authority, and no statute, rule, regulation or executive order promulgated or enacted by a Governmental Authority, which restrains,
enjoins, prohibits or otherwise makes illegal the consummation of the transactions contemplated by this Agreement, shall be in
effect; |
| (b) | the RGLD Restructuring has been completed to the reasonable satisfaction of the Parties, including:
(i) the consent of RGLD to the transactions contemplated by the Agreement and the implementation of the RGLD Restructuring, and
(ii) the consent of the Minister responsible for mines as may be required in relation to the RGLD Restructuring; |
| (c) | any Reclamation Bonds, including for greater certainty any guarantees in respect of such Reclamation
Bonds given by Golden Star or its Affiliates (other than those provided by the Company Group) shall have been unconditionally released
and replacement bonds, sureties or securities have been granted by the Buyer or its Affiliates (as required); and |
| (d) | the Regulatory Approvals shall have been obtained and remain in full force and effect. |
The foregoing conditions are for the
exclusive benefit of the Seller, on the one hand, and the Buyer, on the other hand, and any such condition may be waived in whole
or in part by the Seller, on the one hand, or the Buyer, on the other hand, at or prior to the Time of Closing by each delivering
to the others a written waiver to that effect. Delivery of any such waiver shall be without prejudice to any rights and remedies
at law and in equity that the Seller, on the one hand, or the Buyer, on the other hand, may have, including any claims that the
Seller, on the one hand, or the Buyer, on the other hand, may have for breach of covenant, representation or warranty by the other
Party, and also without prejudice to the rights of termination of the Seller, on the one hand, and the Buyer, on the other hand,
in the event of non-performance of any other conditions in whole or in part.
9.2 Closing
Conditions in Favour of the Buyer
The obligations of the Buyer to consummate
the transactions contemplated by this Agreement shall be subject to the fulfilment on or before the Time of Closing of each of
the following conditions:
| (a) | the representations and warranties made by the Seller in this Agreement, as modified by the Seller
Disclosure Letter, shall be true and correct in all respects without giving effect to any limitation indicated by the words “Company
Xxxxx Xxxxxxxx Adverse Change”, “in all material respects”, “material” or “materially”,
except where the failure of such representations and warranties to be true and correct do not constitute in aggregate a Company
Xxxxx Xxxxxxxx Adverse Change, in each case as of the Closing Date as if made on and as of such date (except to the extent such
representations and warranties speak as of an earlier date, then as of such date, or except as affected by transactions contemplated
or permitted by this Agreement), and the Seller shall have provided to the Buyer a certificate dated the Closing Date executed
by a senior officer to the foregoing effect; |
| (b) | the Seller shall have performed and complied in all material respects with all covenants, conditions
and agreements required by this Agreement to be performed or complied with by the Seller on or prior to the Time of Closing, and
the Seller shall have provided to the Buyer a certificate dated the Closing Date executed by a senior officer to the foregoing
effect; |
| (c) | the Pre-Closing Restructure has been implemented in accordance with the Restructure Plan to the
reasonable satisfaction of the Buyer; |
| (d) | the Buyer has received (i) the results of searches conducted on or prior to the Execution Date
at the Environmental Protection Agency and Minerals Commission in a form and substance satisfactory to the Buyer and (ii) from
the Seller the Mineral Title Opinion in a form consistent with the form set forth in Schedule 1.1(sss) of the Seller Disclosure
Letter; |
| (e) | an fully executed copy of the fund management agreement to be entered into by the Company Subsidiary
and Stanlib concerning the management of the provident fund investments on behalf of the Company Subsidiary; |
| (f) | [Redacted - Closing Condition]; |
| (g) | [Redacted - Closing Condition]; |
| (h) | [Redacted - Closing Condition]; |
| (i) | Macquarie Bank Limited shall have released and discharged the Company Group and the Seller and
its Affiliates from all guarantees and related security granted by, and obligations of, them in respect of the Company Group and
the Company Xxxxx Xxxxxxxx Property; |
| (j) | [Redacted - Closing Condition]; |
| (k) | [Redacted - Closing Condition]; and |
| (l) | no Company Xxxxx Xxxxxxxx Adverse Change with respect to the Company Group shall have occurred
since the Execution Date, and the Seller shall have provided to the Buyer certificate dated the Closing Date executed by a senior
officer to such effect. |
The foregoing conditions are for the
exclusive benefit of the Buyer and any such condition may be waived in whole or in part by the Buyer at or prior to the Time of
Closing by delivering to the Seller a written waiver to that effect executed by the Buyer. Delivery of any such waiver shall be
without prejudice to any rights and remedies at law and in equity the Buyer may have, including any claims the Buyer may have for
breach of covenant, representation or warranty by the Seller, and also without prejudice to the rights of termination of the Buyer
in the event of non-performance of any other conditions in whole or in part.
9.3 Closing
Conditions in favour of the Seller
The obligations of the Seller to consummate
the transactions contemplated by this Agreement shall be subject to the fulfilment on or before the Time of Closing of each of
the following conditions:
| (a) | the representations and warranties made by the Buyer and the Buyer Shareholder in this Agreement
shall be true and correct in all respects without giving effect to any limitation indicated by the words “Buyer Xxxxx Xxxxxxxx
Adverse Change”, “in all material respects”, “material” or “materially”, except where
the failure of such representations and warranties to be true and correct does not constitute in aggregate a Buyer Xxxxx Xxxxxxxx
Adverse Change, in each case as of the Closing Date as if made on and as of such date (except to the extent such representations
and warranties speak as of an earlier date, then as of such date, or except as affected by transactions contemplated or permitted
by this Agreement), and the Buyer shall have provided to the Seller a certificate dated the Closing Date executed by a senior officer
to the foregoing effect; |
| (b) | the Buyer shall have performed and complied in all material respects with all covenants, conditions
and agreements required by this Agreement to be performed or complied with by the Buyer on or prior to the Time of Closing, and
the Buyer shall have provided to the Seller a certificate dated the Closing Date executed by a senior officer to the foregoing
effect; |
| (c) | no Buyer Xxxxx Xxxxxxxx Adverse Change with respect to the Buyer shall have occurred since the
Execution Date, and the Buyer shall have provided to the Seller a certificate dated as of the Closing Date executed by a senior
officer to such effect; and |
| (d) | the Seller, Golden Star and any of their Affiliates shall have been unconditionally released from
all guarantees, bonds, sureties or securities that they have granted in respect of equipment financed by the Company Group. |
The foregoing conditions are for the
exclusive benefit of the Seller and any such condition may be waived in whole or in part by the Seller at or prior to the Time
of Closing by delivering to the Buyer a written waiver to that effect executed by the Seller. Delivery of any such waiver shall
be without prejudice to any rights and remedies at law and in equity the Seller may have, including any claims the Seller may have
for breach of covenant, representation or warranty by the Buyer, and also without prejudice to the rights of termination of the
Seller in the event of non-performance of any other conditions in whole or in part.
Article
10
SURVIVAL AND INDEMNIFICATION
10.1 Survival
of Representations, Warranties and Covenants
Subject to Section 10.8, all representations,
warranties and covenants contained in this Agreement and in all other agreements, documents and certificates delivered pursuant
to or contemplated by this Agreement (other than the conditions of Closing set out in Article 9) shall survive the Closing, will
continue in full force and effect and shall not merge.
10.2 Indemnification
by the Seller
Subject to the limitations set out elsewhere
in this Article, the Seller shall indemnify and save harmless the Buyer from and against all Losses suffered or incurred by the
Buyer or the Company Group as a result of or arising directly or indirectly out of or in connection with:
| (a) | any inaccuracy or breach by the Seller of any of the Seller Fundamental Representations; |
| (b) | any inaccuracy or breach by the Seller of any representation or warranty of the Seller contained
in this Agreement, as modified by the Seller Disclosure Letter (other than an inaccuracy or breach of a Seller Fundamental Representation)
or in the certificates delivered under Section 9.2; and |
| (c) | any breach or non-performance by the Seller or Golden Star of any covenant of the Seller or Golden
Star contained in this Agreement. |
10.3 Indemnification
by the Buyer
Subject to the limitations set out elsewhere
in this Article, the Buyer shall indemnify and save harmless the Seller from and against all Losses suffered or incurred by the
Seller as a result of or arising directly or indirectly out of or in connection with:
| (a) | any inaccuracy or breach by the Buyer or the Buyer Shareholder of any of the Buyer Fundamental
Representations; |
| (b) | any inaccuracy or breach by the Buyer or the Buyer Shareholder of any representation or warranty
of the Buyer contained in this Agreement (other than an inaccuracy or breach of a Buyer Fundamental Representation) or the certificates
delivered under Section 9.3; and |
| (c) | any breach or non-performance by the Buyer or the Buyer Shareholder of any covenant of the Buyer
or the Buyer Shareholder contained in this Agreement. |
10.4
Tax Indemnity
If any of the Company Group members
is liable for Taxes that are attributable to the period up to and including the Closing Date that have not been paid prior to the
Closing Date, including any Taxes attributable or arising in relation to the Company Xxxxx Xxxxxxxx Property Mineral Rights, then
the Seller shall be liable therefor as of the date the same shall become due and owing by the applicable Company Group member and
the Seller shall indemnify the Buyer from all Losses suffered or incurred by the Buyer or a Company Group member as a result of
or arising directly or indirectly out of or in connection with such liability. For clarity, all Taxes of the Company Group members
that are attributable to any tax period following Closing shall not be subject to such indemnification from the Seller, and shall
be the sole responsibility of the Company Group, as owned by the Buyer. For the avoidance of doubt, “Taxes”
for the purposes of this Section 10.4 shall also include any claim, taxes or fiscal determination of a fiscal authority, contribution,
rights and tariffs on imports and exports, social security or of any nature made by a local, regional or national authority or
any other fiscal entity referring to deducible matters, which is attributable to the period up to and including the Closing Date,
notwithstanding when the final determination of such matter is determined.
10.5 Seller
Specific Indemnities
The Seller shall indemnify and save
harmless the Buyer from and against all Losses suffered or incurred by the Buyer or the Company Group as a result of or arising
directly or indirectly out of or in connection with:
| (a) | the Pre-Closing Restructure excluding the principal and interest of the Retained Intercompany Balance; |
| (b) | the termination or purported termination of the Share Appreciation Rights Plan as required under
Section 9.2(e); or |
| (c) | the Proceedings disclosed in Schedule 10.5(c) of the Seller Disclosure Letter. |
10.6 Limitation
of Liability.
| (a) | The Buyer shall not be entitled to require payment in respect of any Loss pursuant to the indemnities
contained in Sections 10.2, 10.4 and 10.5, and the Seller shall not be liable for any indemnity payment thereunder, unless either
alone or together with the amount finally agreed or adjudicated to be payable in respect of Losses for which the Buyer would otherwise
be entitled to require payment under such indemnities, such Loss or Losses collectively exceed the Minimum Loss Amount, in which
event the accumulated aggregate amount of all such Losses may be recovered. Such limitation shall have no application to any claim
to recover Losses based on any incorrectness in or breach or any representation, warranty or indemnity of or given by the Seller
in this Agreement resulting from fraud or wilful misconduct by the Seller and/or its Affiliates or their respective representatives. |
| (b) | Except in the event of fraud or wilful misconduct relating to a representation, warranty, covenant
or indemnity of or given by the Seller in this Agreement, the aggregate Losses that may be recovered from the Seller and/or Golden
Star, collectively, pursuant to: |
| i. | [Redacted - Commercially Sensitive Information]. |
| (c) | The Buyer shall not be entitled to require payment in respect of any Loss pursuant to the indemnities
contained in Section 10.4, and the Seller shall not be liable for any indemnity payment thereunder, in relation to any pre-close
Tax assessments or reassessments in excess of the Minimum Loss, unless the Buyer notifies the Seller of the tax audit and the Seller
(and its advisors) have reasonable opportunity to review and approve the submission before it is made to the tax authorities. |
| (d) | The Seller shall not be entitled to require payment in respect of any Loss pursuant to the indemnities
contained in Section 10.3 and the Buyer shall not be liable for any indemnity payment thereunder unless either alone or together
with the amount finally agreed or adjudicated to be payable in respect of Losses for which the Seller would otherwise be entitled
to require payment under such indemnities, such Loss exceeds the Minimum Loss Amount. Such limitation shall have no application
to any claim to recover Losses based on any incorrectness in or breach of any representation or warranty of the Buyer in this Agreement
resulting from fraud by the Buyer. Except in the event of fraud or wilful misconduct, relating to a representation, warranty or
covenant of the Buyer in this Agreement, the aggregate Losses that may be recovered from the Buyer and/or the Buyer Shareholder,
collectively, pursuant to Section 10.3 is [Redacted - Commercially Sensitive Information]. |
| (e) | Other than in circumstances involving fraud or wilful default and otherwise notwithstanding any
other provision in this Article, for the avoidance of doubt, in no event shall: (i) the aggregate liability of the Buyer and/or
the Buyer Shareholder (collectively) in respect of indemnities contained in Section 10.3 exceed [Redacted - Commercially Sensitive
Information]; or (ii) the aggregate liability of the Seller and Golden Star (collectively) in respect of indemnities contained
in Sections 10.2, 10.4 and 10.5 (for greater certainty, including Tax Claims) exceed [Redacted - Commercially Sensitive Information]
(any payment made under Section 3.11 shall be excluded for the purposes of this Section 10.6(e)(ii)). |
| (f) | For the purposes of Sections 10.6(a) and 10.6(c): |
| i. | Losses arising out of separate sets of facts, matters or circumstances will not be treated as an
individual Loss, even if each set of facts, matters or circumstances may be a breach of the same representation and warranty; and |
| ii. | Losses of the same or similar nature arising out of the same or similar facts, matters and circumstances
will be treated as an individual Loss. |
10.7 Notice
of Claim
| (a) | A Party that may be entitled to make a claim for indemnification (a “Claim”)
under this Agreement (the “Indemnified Party”) shall give written notification to the other Party (the “Indemnifying
Party”) of such Claim (a “Notice of Claim”) promptly upon becoming aware of the Claim, but in no event
later than the relevant date, if any, specified in Section 10.8. The Notice of Claim shall specify whether the Claim arises as
a result of a claim by a person against the Indemnified Party (a “Third Party Claim”) or whether the Claim does
not so arise (a “Direct Claim”), and shall also specify with reasonable particularity, to the extent that the
information is available, the factual basis for the Claim and the amount of the Claim. |
| (b) | If an Indemnified Party fails to provide the Indemnifying Party with a Notice of Claim promptly
as required by Section 10.7(a), the Indemnifying Party shall be relieved of the obligation to pay damages solely to the extent
it can show that it was materially prejudiced in its defence of a Third Party Claim or in proceeding against a third party who
would have been liable to it by the fact of the delay, but the failure to provide such Notice of Claim promptly shall not otherwise
release the Indemnifying Party from its obligations under this Article. |
| (c) | If the date by which a Notice of Claim must be given as set out in Section 10.8 in respect of a
breach of representation and warranty has passed without any Notice of Claim having been given to the Indemnifying Party, then
the related Claim shall be forever extinguished, notwithstanding that by the date specified in Section 10.8 the Indemnified Party
did not know, and in the exercise of reasonable care could not have known, of the existence of the Claim. |
| (d) | In respect of a Notice of Claim that relates to Taxes that is provided to the Buyer, the Buyer
shall be provided a reasonable opportunity to review and approve in advance the form and substance any submission that is made
to the relevant Governmental Authority in respect of the underlying Claim for Taxes. |
| (a) | Except in the event of fraud or wilful misconduct the Seller shall not be required to indemnify
or save harmless the Buyer pursuant to Section 10.2, Section 10.4 or Section 10.5 (for greater certainty, including Tax Claims)
unless the Buyer shall have provided to the Seller a Notice of Claim within the following time limits: |
| i. | with respect to a Tax Claim, [Redacted - Commercially Sensitive Information]; |
| ii. | with respect to a Claim for any breach of any of the representations and warranties of the Seller
contained in this Agreement involving fraud or wilful misconduct, at any time after Closing; |
| iii. | with respect to the Seller Fundamental Representations or the indemnities in Section 10.5, not
later than [Redacted - Commercially Sensitive Information]; and |
| iv. | with respect to all other representations and warranties of the Seller contained in this Agreement
(excluding the Seller Fundamental Representations and Tax Claims), not later than [Redacted - Commercially Sensitive Information]. |
| (b) | Except in the event of fraud or wilful misconduct relating to a representation, warranty, covenant
or indemnity of or given by the Seller in this Agreement or in connection with the Sulphides Contingent Payment or Section 2.2,
the Buyer shall not be required to indemnify or save harmless the Seller pursuant to Section 10.3 unless the Seller shall have
provided to the Buyer a Notice of Claim within the following time limits: |
| i. | with respect to a Claim for any breach of any of the representations and warranties of the Buyer
contained in this Agreement involving fraud or wilful misconduct or in connection with the Sulphides Contingent Payment or Section
2.2, at any time after Closing; |
| ii. | with respect to the Buyer Fundamental Representations, not later than [Redacted - Commercially
Sensitive Information]; and |
| iii. | with respect to all other representations and warranties of the Buyer contained in this Agreement
(excluding the Buyer Fundamental Representations), not later than [Redacted - Commercially Sensitive Information]. |
| (c) | Notwithstanding the provisions of the Limitations Act, 2002 (Ontario) or any other statute,
the period within which and Indemnified Party may commence a Proceeding in respect of a Claim for which a Notice of Claim is required
to be, and has been, given in accordance with this Section 10.8, shall be two years from the last date upon which the Notice of
Claim is permitted to be delivered thereunder, any application limitation period is hereby so extended to the fullest extent permitted
by the Law. |
10.9 Direct
Claims
With respect to any Direct Claim, following
receipt of notice from the Indemnified Party of the Claim, the Indemnifying Party shall have 45 days to make such investigation
of the Claim as is considered necessary or desirable. For the purpose of such investigation, the Indemnified Party shall make available
to the Indemnifying Party the information relied upon by the Indemnified Party to substantiate the Claim, together with all such
other information as the Indemnifying Party may reasonably request. If both Seller and the Buyer agree at or prior to the expiration
of such 45-day period (or any mutually agreed upon extension thereof) to the validity and amount of such Claim, the Indemnifying
Party shall immediately pay to the Indemnified Party the full agreed-upon amount of the Claim, failing which the matter shall be
determined by a court of competent jurisdiction.
10.10 Third
Party Claims
| (a) | The Indemnifying Party shall have the right, at its expense, to participate in or, by giving notice
to that effect to the Indemnified Party not later than 30 days after receipt of the Notice of Claim with respect to that Third
Party Claim and, subject to the rights of any insurer or other third party having potential liability therefor, assume control
of the negotiation, settlement or defence of any Third Party Claim and if the Indemnifying Party assumes control, it shall reimburse
the Indemnified Party for all of the Indemnified Party's out-of-pocket expenses prior to the time the Indemnifying Party assumed
control. If the Indemnifying Party elects to assume such control, the Indemnified Party shall have the right to participate in
the negotiation, settlement or defence of such Third Party Claim and to retain counsel to act on its behalf, provided that the
fees and disbursements of such counsel shall be paid by the Indemnified Party unless the named parties to any Proceeding include
both the Indemnifying Party and the Indemnified Party and representation of both the Indemnifying Party and the Indemnified Party
by the same counsel would be inappropriate due to actual or potential differing interests between them (such as the availability
of different defences). |
| (b) | If the Indemnifying Party, having elected to assume such control, thereafter fails to defend the
Third Party Claim within a reasonable time, the Indemnified Party shall be entitled to assume such control. |
| (c) | If any Third Party Claim is of a nature such that the Indemnified Party is required by applicable
Law to incur losses or make a payment to any person (a “Third Party”) with respect to the Third Party Claim
before the completion of settlement negotiations or related legal proceedings, the Indemnified Party may incur such Losses or make
such payment and the Indemnifying Party shall, forthwith after demand by the Indemnified Party, reimburse the Indemnified Party
for such payment. If the amount of any liability of the Indemnified Party under such Third Party Claim, as finally determined,
is less than the amount that was paid by the Indemnifying Party to the Indemnified Party, the Indemnified Party shall, forthwith
after the receipt of the difference from the Third Party, pay the amount of such difference, together with any interest thereon
paid by the Third Party to the Indemnified Party, to the Indemnifying Party. In addition, the Indemnifying Party shall post all
security required by any court, regulatory body or other authority having jurisdiction, including without limitation, for purposes
of enabling the Indemnifying Party to contest any Third Party Claim. |
| (d) | If the Indemnifying Party fails to assume control of the defence of any Third Party Claim or defaults
in respect of any of its obligations under this Section with respect thereto, the Indemnified Party shall have the exclusive right
to contest the amount claimed and may settle and pay the same on 14 days' prior written notice to the Indemnifying Party and the
Indemnifying Party shall thereupon be deemed to have agreed that such settlement is reasonable and may be agreed to by the Indemnified
Party and all other persons liable in respect of the Third Party Claim unless within such 14-day period the Indemnifying Party
notifies the Indemnified Party that it is assuming or reassuming control of such defence and thereafter assumes or reassumes such
control and does not default. |
| (e) | The Indemnified Party and the Indemnifying Party shall co-operate fully with each other with respect
to Third Party Claims, and shall keep each other fully advised with respect thereto (including supplying copies of all relevant
documentation promptly as it becomes available). |
10.11 Adjustments
| (a) | The amount of any Loss for which indemnification is provided in this Article will be adjusted to
take into account any Tax benefit or other benefit realized by the Indemnified Party by reason of the Loss for which indemnification
is so provided. Any such Tax benefit or other benefit will be taken into account at such time as it is received by the Indemnified
Party. |
| (b) | In determining the amount of any Losses under this Article, such Losses will be increased to take
into account any Tax actually incurred by the Indemnified Party as a result of the matter giving rise to such Losses or the payment
received by the Indemnified Party (including any Tax withheld by the Indemnifying Party in making such payment) pursuant to indemnification
under this Article, in all cases as is necessary to ensure that the net amount received pursuant to such indemnification after
the deduction (including any withholding by the Indemnifying Party) of such Tax equals the amount the Indemnified Party would have
received had such Tax not been incurred. |
| (c) | Where an Indemnified Party is, or would be likely to be, entitled to recover or be compensated
or indemnified by another person, whether by way of contract, indemnity or otherwise (including under a policy of insurance), any
amount in respect of a Claim made by the Indemnified Party, the Indemnified Party shall promptly notify the Indemnifying Party
of such right or entitlement, take all reasonable steps to seek recovery of that amount and keep the Indemnifying Party at all
times fully and promptly notified of the status of such recovery. The amount of the Claim by the Indemnified Party shall be reduced
by any amount actually recovered by the Indemnified Party (net of all reasonable out of pocket costs and expenses incurred in doing
so and any Tax paid or payable on the amount recovered). |
| (d) | If, after an Indemnifying Party has made a payment in respect of a Claim, an Indemnified Party
recovers from or is paid by another person any amount in respect of the Loss that gave rise to the Claim, the Indemnified Party
shall promptly, and in any event within 10 Business Days, pay to the Indemnifying Party, the lesser of: (i) the amount of the Loss
that was recovered or paid; and (ii) the amount paid by the Indemnifying Party to the Indemnified Party in respect of the Claim,
in either case net of all reasonable out of pocket costs and expenses incurred in obtaining the recovery or payment and any Tax
paid or payable as a result of receiving such recovery or payment. |
| (e) | Any indemnity payment made under this Article 10, including pursuant to Section 10.11(d), shall
be treated by the Seller, on the one hand, and the Buyer, on the other hand, as an adjustment to the Purchase Price. |
10.12 Set-Off
The Buyer may set off and deduct from
any amounts payable by the Buyer to the Seller under this Agreement the amount of any Losses for which the Buyer is entitled to
be indemnified by the Seller under this Article 10. The Seller may set off and deduct from any amounts payable by the Seller to
the Buyer under this Agreement the amount of any Losses for which the Seller is entitled to be indemnified by the Buyer under this
Article 10.
Notwithstanding anything to the contrary
in this Article 10, if the Indemnifying Party is the Seller or Golden Star and the amount of Losses for which it is liable exceeds
the amount of the Purchase Price then received in cash by the Seller, the Indemnifying Party shall only be required to pay to the
Indemnified Party in respect of such Losses an amount equal to the amount of cash received by the Seller on account of the Purchase
Price, with the unpaid balance of such Losses being deferred and set-off, in accordance with the prior sentence of this Section
10.12, against future payments of the Purchase Price pursuant to Sections 2.2(b)i, 2.2(c), 2.2(d) and, to the extent the Sulphides
Contingent Payment is payable at the time the Claim for the Loss or Losses is made, the Sulphides Contingent Payment, as applicable.
Article
11
TERMINATION
11.1 Termination
This Agreement may be terminated at
any time prior to the Closing Date:
| (a) | by mutual written agreement of the Buyer and the Seller; |
| (b) | by either the Buyer, on the one hand, or the Seller, on the other hand, if: |
| i. | the Closing has not occurred on or prior to the Outside Date, except that the right to terminate
this Agreement under this Section 11.1(b)i shall not be available to any Party whose failure to fulfill any of its covenants or
obligations or breach of any of its representations and warranties under this Agreement has the been the cause of, or resulted
in, the failure of the Closing to occur by the Outside Date; or |
| ii. | after the date hereof, there shall be enacted or made any applicable Laws, or a Governmental Authority
shall have issued any Order (which Order is final and non-appealable, unless such Order has been withdrawn, reversed or otherwise
made inapplicable), permanently restraining or enjoining or otherwise prohibiting the transactions contemplated herein; |
| (c) | by the Seller by written notice to the Buyer, if: |
| i. | any of the conditions in Section 9.1 or 9.3 has not been satisfied or waived by the Outside Date
or is incapable of satisfaction by the Outside Date, provided that the Seller is not then in breach of this Agreement so as to
cause any of the conditions in Sections 9.1 or 9.3 not to be satisfied; or |
| ii. | any representation or warranty of the Buyer contained herein is untrue or incorrect or shall have
become untrue or incorrect such that the condition contained in Section 9.3(a) would be incapable of satisfaction, or the Buyer
is in default in any material respect of any of its covenants or obligations herein such that the condition in Section 9.3(b) would
be incapable of satisfaction or a Buyer Xxxxx Xxxxxxxx Adverse Change with respect to the Buyer shall have occurred since the date
hereof such that the condition contained in Section 9.3(c) would be incapable of satisfaction; or |
| (d) | by the Buyer by written notice to the Seller, if: |
| i. | any of the conditions in Sections 9.1 or 9.2 has not been satisfied or waived by the Outside Date
or is incapable of satisfaction by the Outside Date, provided that the Buyer is not then in breach of this Agreement so as to cause
any of the conditions set forth in Sections 9.1 or 9.2 not to be satisfied; |
| ii. | any representation or warranty of the Seller contained herein is untrue or incorrect or shall have
become untrue or incorrect such that the condition contained in Section 9.2(a) would be incapable of satisfaction, or the Seller
is in default in any material respect of any of its covenants or obligations herein such that the condition in Section 9.2(b) would
be incapable of satisfaction, or a Company Xxxxx Xxxxxxxx Adverse Change with respect to the Company Group shall have occurred
since the date hereof such that the condition contained in Section 9.2(l) would be incapable of satisfaction. |
11.2 Effect
of Termination
| (a) | Notwithstanding the termination of this Agreement by the Seller pursuant to Section 11.1(b) or
Section 11.1(c), the Seller may bring an action against the Buyer or the Buyer Shareholder for Losses suffered by the Seller where
the event giving rise to the right of termination is a result of a breach of covenant, representation or warranty by the Buyer
or the Buyer Shareholder. |
| (b) | Notwithstanding the termination of this Agreement by the Buyer pursuant to Section 11.1(b) or Section
11.1(d), the Buyer may bring an action against the Seller for Losses suffered by the Buyer where the event giving rise to the right
of termination is a result of a breach of covenant, representation or warranty by the Seller. |
11.3 Surviving
Provisions on Termination
All provisions of this Agreement which
expressly or by their nature survive the completion of the transactions contemplated by this Agreement shall continue and remain
in full force and effect in accordance with their terms. Notwithstanding any other provisions of this Agreement, if this Agreement
is terminated (whether by a Party or automatically or otherwise), the provisions of Sections 1.1, 3.6 and Article 10, Article 11
and Article 12 shall survive such termination and remain in full force and effect, along with any other provisions of this Agreement
which expressly or by their nature survive the termination hereof.
11.4 Remedies
The Seller, on the one hand, and the
Buyer, on the other hand, acknowledge and agree that an award of money damages may not be adequate for any breach of this Agreement
by any Party or its representatives and any such breach may cause the non-breaching Party irreparable harm. Accordingly, the Seller,
on the one hand, and the Buyer, on the other hand, agree that, in the event of any breach or threatened breach of this Agreement
by either of the Seller, on the one hand, or the Buyer, on the other hand (provided this Agreement shall not have been terminated
pursuant to Section 11.1), the non-breaching Party shall also be entitled, without the requirement of posting a bond or other security,
to equitable relief, including injunctive relief and specific performance. Such remedies will not be the exclusive remedies for
any breach of this Agreement but will be in addition to all other remedies available at law or equity to the Parties.
Article
12
GENERAL PROVISIONS
12.1 Notices
| (a) | Any notice or other communication that is required or permitted to be given hereunder shall be
in writing and shall be validly given if delivered in person (including by courier service) or transmitted by email with confirmation
receipt requested as follows: |
in the case of the Buyer:
Future Global Resources Limited
0xx Xxxxx Xxxx, Xxxxxxx
Xxxxxx
00-00 Xxxxx Xxxxxx
Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx
Attention: Xxxxx Xxxxxxx, Chief
Executive Officer
Email: [Redacted - Commercially
Sensitive Information]
with copies (which shall not constitute
notice) to:
Blue International Holdings
0xx Xxxxx Xxxx, Xxxxxxx
Xxxxxx
00-00 Xxxxx Xxxxxx
Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx
Attention: Xxxxxx Xxxxxxxx, Executive
Director
Email: [Redacted - Commercially
Sensitive Information]
in the case of the Buyer Shareholder:
Blue International Holdings
0xx Xxxxx Xxxx, Xxxxxxx
Xxxxxx
00-00 Xxxxx Xxxxxx
Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx
Attention: Xxxxxx Xxxxxxxx, Executive
Director
Email: [Redacted - Commercially
Sensitive Information]
in the case of the Seller or Golden
Star:
c/o Golden Star Resources Ltd.
Bay Adelaide Centre
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX X0X 0X0
| Attention: | Xxxxx Xxxxx, Executive Vice-President, Growth & Exploration |
Email: [Redacted - Commercially
Sensitive Information]
with a copy (which shall not constitute
notice) to:
Fasken Xxxxxxxxx XxXxxxxx LLP
Bay Adelaide Centre
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX X0X 0X0
Attention: Xxxx Xxxxxxx
Email: xxxxxxxx@xxxxxx.xxx
| (b) | Any such notice or other communication shall be deemed to have been given and received on the day
on which it was delivered or transmitted by email (or, if such day is not a Business Day or such notice or other communication
was delivered or transmitted after 5:00 p.m. (recipient’s time), on the next following Business Day). |
| (c) | Any Party may at any time change its address for service from time to time by giving notice to
the other Parties in accordance with this Section 12.1. |
12.2 Applicable
Law
| (a) | This Agreement shall be construed, interpreted and enforced in accordance with, and the respective
rights and obligations of the Parties shall be governed by, the Laws of the Province of Ontario and the federal Laws of Canada
applicable in such province. |
| (b) | Each of the Parties irrevocably and unconditionally: (i) submits to the non-exclusive jurisdiction
of the courts of the Province of Ontario over any action or proceeding arising out of or relating to this Agreement; (ii) waives
any objection that it might otherwise be entitled to assert to the jurisdiction of such courts; and (iii) agrees not to assert
that such courts are not a convenient forum for the determination of any such action or proceeding. |
12.3 Entire
Agreement
This Agreement, along with the other
documents contemplated herein, constitute the entire agreement among the Parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings, negotiations and discussions, whether written or oral. There are no
conditions, covenants, agreements, representations, warranties or other provisions, express or implied, collateral, statutory or
otherwise, relating to the subject matter hereof and thereof except as provided herein or therein. Notwithstanding the foregoing,
the Parties acknowledge and agree that the confidentiality provisions set forth in section 6 of the exclusivity agreement dated
May 11, 2020 between Golden Star and the Buyer remain in full force and effect.
12.4 Remedies
Cumulative
Unless otherwise specified, the rights
and remedies of a Party under this Agreement are cumulative and in addition to and without prejudice to any other rights or remedies
available to that Party at law, in equity or otherwise, and unless otherwise specified, no single or partial exercise by a Party
of any right or remedy precludes or otherwise affects the exercise of any other right or remedy to which that Party may be entitled.
12.5 Severability
If any provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any respect, all other provisions of
this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any Party.
12.6 No
Waiver
The failure of any Party to insist upon
strict adherence to any provision of this Agreement on any occasion shall not be considered a waiver or deprive that Party of the
right thereafter to insist upon strict adherence to such provision or any other provision of this Agreement. No purported waiver
shall be effective as against any Party unless consented to in writing by such Party. The waiver by any Party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any subsequent or other breach.
12.7 Further
Assurances
Each of the Parties shall, from time
to time hereafter, do all such acts and execute and deliver all such further certificates or other documents, and will cause the
doing of all such acts and will cause the execution of all such further certificates or other documents as are within its power
as any other Party may in writing at any time and from time to time reasonably request be done and or executed in order to give
full effect to the provisions of this Agreement.
12.8 Amendments
No term or provision of this Agreement
may be amended except by an instrument in writing signed by the Parties.
12.9 Assignment
No Party shall assign any of its rights
or benefits under this Agreement, or delegate any of its duties or obligations, except with the prior written consent of the other
Parties, provided that the Buyer shall not require the consent of the other Parties to assign its obligations under this Agreement
as contemplated in Section 1.6.
12.10 Enurement
This Agreement will enure to the benefit
of and be binding upon the Parties and their respective successors and permitted assigns.
12.11 Expenses
Except as otherwise expressly provided
in this Agreement, each Party will pay for its own costs and expenses incurred in connection with the negotiation, preparation,
execution and performance of this Agreement, the agreements contemplated herein and the transactions contemplated herein and therein,
including the fees and expenses of legal counsel, financial advisors, accountants, consultants and other professional advisors.
12.12 Counterparts
This Agreement may be executed in
any number of counterparts (including by pdf) each of which when so executed will be deemed to be an original and when taken together
shall constitute the entire and same agreement.
[Remainder of page left intentionally
blank]
IN WITNESS WHEREOF this Agreement
has been executed by the Parties as of the date first written above.
CAYSTAR HOLDINGS
|
|
|
|
|
By: |
“Xxxxxx Xxxxxx” |
|
Name: Xxxxxx Xxxxxx
Title: Director |
FUTURE GLOBAL RESOURCES LIMITED |
|
|
|
|
By: |
“Xxxxx Xxxxxxx” |
|
Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer |
BLUE
INTERNATIONAL HOLDINGS LIMITED
|
|
|
|
|
By: |
“Xxxxxx Xxxxxxxx” |
|
Name: Xxxxxx Xxxxxxxx
Title: Executive
Director |
Schedule
“A”
COMPANY XXXXX XXXXXXXX PROPERTY MINERAL
RIGHTS
[Redacted - Table of Company Xxxxx
Xxxxxxxx Property Mineral Rights]
Schedule
“B”
REGULATORY APPROVALS
| 1. | Following notice of the Buyer’s intention to become a controller of Golden Star (Bogoso/Prestea)
Limited in accordance with section 52 of the Minerals and Mining Act, 2006 (Act 703) (Ghana), evidence of either: |
| (i) | a notice from the Minister responsible for mines stating that, or to the effect that, there is
no objection to the Buyer becoming a controller of Golden Star (Bogoso/Prestea) Limited; or |
| (ii) | the expiry of the two-month period, commencing from the date of service of such notice, where the
Minister has not replied to the notice or requested additional information or documents from the Buyer and is therefore deemed
to have consented to the Buyer becoming a controller. |
| 2. | Any necessary consent from the Government of Ghana in connection with the RGLD Restructuring. |
Schedule
“C”
PURCHASE PRICE
| 1. | Schedule “C” - Part 1 - Accounting Principles The Balancing Payment Calculation
which sets out the Actual Closing Date Amount, the Balancing Payment, the Actual Closing Working Capital and the Actual Closing
Net Debt shall be prepared in the following order of priority: |
| a. | the specific accounting principles set out in paragraphs (2) to (19) below; |
| b. | to the extent consistent with paragraph 1(a), the same accounting principles, procedures, categorizations,
classifications (including in respect of trial balance classifications), assets recognition bases, definitions, methods, practices
and techniques (including in respect of the exercise of management judgment) as actually applied in the preparation of the balance
sheet set out in the Financial Statements (the “Latest Balance Sheet”); and |
| c. | to the extent consistent with paragraphs 1(a) and 1(b), IFRS as applicable to the accounting period
ended on June 30, 2020. |
For the avoidance of doubt, paragraph
1(a) shall take precedence over paragraphs 1(b) and 1(c), and paragraph 1(b) shall take precedence over paragraph 1(c).
General principles
| 2. | The Balancing Payment Calculation (and each component thereof) shall be prepared as at the Effective
Time and on a combined basis by reference to the general ledgers of the Company Group. All intercompany balances between the Company
and the Company Subsidiary shall be reconciled and eliminated in the preparation of the Balancing Payment Calculation. Any intercompany
balances between the Company Group (on the one hand), and the Seller and its Affiliates (on the other hand), after taking account
of the Pre-Closing Restructure shall be included as receivables or payables (as applicable) in the Actual Closing Working Capital
and settled in accordance with Section 2.2(b) of this Agreement. |
| 3. | Unless specifically stated to the contrary, the Balancing Payment Calculation shall not take into
account: (a) the funds flow or cash flows arising on Closing; or (b) changes in assets or liabilities as a result of purchase accounting
or opening balance sheet adjustments. |
| 4. | No adjustments shall be made to the Balancing Payment Calculation for events occurring at or after
the Effective Time, and the Balancing Payment Calculation shall be prepared as if the Balancing Payment Calculation was delivered
at the Effective Time. |
| 5. | The Parties agree that it is their commercial intent to avoid any double counting in the preparation
of the Balancing Payment Calculation and, as such, no item shall be included in the Actual Closing Net Debt and the Actual Closing
Working Capital more than once. No item shall be excluded from the Balancing Payment Calculation solely on the grounds of immateriality. |
| 6. | The Balancing Payment Calculation shall be prepared on the basis that the Company Group is a going
concern and so as to include no impact (including charge, provision, reserve write off, impairment, loss, income or profit) arising
as a consequence of the change in ownership of the Company Group contemplated by this Agreement or any change in the management
strategy, direction or priority which results from such change in ownership or which is implemented at the direction of the Buyer. |
| 7. | Any items that were classified as current assets in the Latest Balance Sheet or that are otherwise
in the nature of current assets shall not be reclassified as fixed assets or non-current assets in preparation of the Balancing
Payment Calculation (or otherwise excluded from the Actual Closing Net Debt or the Actual Closing Working Capital). |
| 8. | Any items that were classified as long-term liabilities in the Latest Balance Sheet or that are otherwise
in the nature of non-current liabilities shall not be reclassified as current liabilities in preparation of the Balancing Payment
Calculation (or otherwise included in the Actual Closing Net Debt or the Actual Closing Working Capital). |
| 9. | Unless specifically stated to the contrary in this Part 1 of Schedule “C”, no increase
shall be made in respect of accruals, provisions or reserves in the preparation of the Actual Closing Working Capital or Actual
Closing Net Debt unless since the preparation of the Latest Balance Sheet new facts or circumstances have arisen which justify
such increase using the same accounting principles, procedures, categorizations, classifications (including in respect of trial
balance classifications), assets recognition bases, definitions, methods, practices and techniques (including in respect of the
exercise of management judgment) as were actually applied in the preparation of the Latest Balance Sheet. |
| 10. | The Balancing Payment Calculation shall be presented in United States dollars. Balances in currencies
other than United States dollars shall be translated into United States dollars at the noon exchange rate quoted by the Ghana Reserve
Bank on the Closing Date. |
Specific principles
| 11. | Revenue (and associated accounts receivable, as applicable) shall be recognised in the Balancing Payment
Calculation on the following basis: |
| a. | to the extent that the commercial flights between Ghana and South Africa have recommenced prior to
the Effective Time, revenue shall be recognized on the same day that gold is shipped from the mine site at the price agreed with
the agent; |
| b. | to the extent that commercial flights between Ghana and South Africa have not recommenced prior to
the Effective Time, revenue shall be recognized on a basis consistent with paragraph 1(b) of Part 1 of this Schedule “C”
and provided that the gold sales price shall be set by reference to the LBMA AM gold price fixed on the day of the arrival of the
gold at the refinery; and |
| c. | for the avoidance of doubt, the Balancing Payment Calculation shall not take into account any changes
in respect of IFRS15 ‘Revenue’. |
Amounts recognized as revenue in accordance
with paragraph (11) above but not billed shall be recognized as unbilled receivables (or accrued income) in the Actual Closing
Working Capital.
| 12. | Accounts receivable (including both billed and unbilled amounts) shall be included in the Actual Closing
Working Capital at their full nominal value without bad debt reserve, allowance, set off, write down or write off. For the avoidance
of doubt, the Actual Closing Working Capital shall include the tax refund receivable due from the Ghana Revenue Authority in respect
of the 2018 year of assessment overpayment. |
| 13. | Actual Closing Working Capital shall include all inventory as at the Effective Time including stores
inventory, gold-related inventory (Ore stockpile, finished goods, gold in circuit (GIC)), supplies, spares, reagents and components
(including any consignment inventory, any inventory which is at third party premises but is owned by the Company Group and any
goods in transit) valued at historical cost (including allocation of overheads, general and administrative costs) which shall be
calculated using the same accounting principles, procedures, categorizations, classifications (including in respect of trial balance
classifications), definitions, methods, practices and techniques (including in respect of the exercise of management judgment)
as actually applied in the preparation of the Latest Balance Sheet. Inventory quantity shall be determined based on the Company
Group’s inventory system as at the Effective Time. |
Inventory cost shall only be adjusted
for the following reserves (without duplication):
| a. | spares, reagents and components (but excluding gold-related inventory which is dealt with under paragraph
13(b) below) shall include an inventory reserve for slow moving stock calculated by reference only to any such inventory which
both (i) has not been used, moved, utilized or otherwise consumed in the two years immediately prior to the Effective Time; and
(ii) is not expected to be used or consumed at or after the Effective Time, provided that in no event that such inventory reserve
shall exceed 80% of the spares, reagents and components inventory historical cost (as per GL account code 15499991506) as at the
Effective Time (and, for the avoidance of doubt, excluding gold-related inventory); |
| b. | to the extent that the net realisable value (NRV) of gold-related inventory is lower than the average
cost of gold related inventory calculated in accordance with paragraph 13 above (the “Cost Base”), gold-related
inventory shall be written down to its NRV. The NRV shall be calculated by reference to the closing gold spot (LBMA AM fix) price
on the Closing Date and on a basis consistent with the accounting principles, procedures, categorizations, classifications (including
in respect of trial balance classifications), definitions, methods, practices and techniques (including in respect of the exercise
of management judgment) as actually applied in the preparation of the Latest Balance Sheet; |
provided always that no provision shall
be recorded against inventory which is sold at or above its Cost Base after the Effective Time. No other provisions, reserves,
write offs or valuation adjustments shall be made against inventory in Actual Closing Working Capital or the Balancing Payment
Calculation.
| 14. | Prepayments shall be included in the Actual Closing Working Capital in respect of costs paid (or payable)
prior to the Effective Time for goods and services that relate to the period after the Effective Time including the Reclamation
Bonds, prepaid rent, employee benefits, insurance, prepaid inventory and licenses. |
| 15. | Actual Closing Working Capital shall only include an accrual for goods and services that meet both
of these two criteria (a) were delivered to the Company Group prior to the Effective Time; and (b) are payable by the Company Group
after the Effective Time. The Parties agree that the Purchase Price reflects the Buyer’s obligation in respect of Company
Group’s capital and capital expenditure commitments and, as such, Actual Closing Working Capital shall exclude any future
commitments, capital commitments, capital expenditures or similar arrangements which are incurred and payable by the Company Group
after the Effective Time. |
| 16. | Actual Closing Working Capital shall include an accrual for annual contractual staff and management
bonuses for the financial year ended December 31, 2020 calculated on a straight line daily pro rata basis from January 1, 2020
up to the Effective Time and by reference to the individual and company performance metrics actually achieved as of the Effective
Time, in each case, only to the extent payable by the Company Group after the Effective Time. For the avoidance of doubt the Excluded
Employees shall be excluded from the bonus accrual as at the Effective Time. |
| 17. | Actual Closing Working Capital shall include an accrual in respect of the estimated union salary adjustment
as at the Effective Time calculated on the following basis: |
| a. | to the extent that the final union salary adjustment is agreed and finalized with the labour union
prior to the time that the Buyer delivers the Balancing Payment Calculation to the Seller in accordance with Section 2.4(a) of
this Agreement (the “Cut-Off Time”), the accrual shall be calculated by reference to such final salary adjustment; |
| b. | to the extent that the union salary adjustment is not agreed and finalised with the labour union prior
to the Cut-Off Time, then the accrual shall be calculated by reference to an estimated 5% union salary adjustment; |
in each case above, (i) calculated using
the same accounting principles, procedures, categorizations, classifications (including in respect of trial balance classifications),
definitions, methods, practices and techniques (including in respect of the exercise of management judgment) as actually applied
in the preparation of the Latest Balance Sheet; and (ii) excluding any such accrual or liability in respect of the Excluded Employees.
| 18. | Notwithstanding anything to the contrary, none of the following are to be included in the Actual Net
Debt and the Actual Closing Working Capital and, accordingly, shall not be included in the Balancing Payment Calculation: |
| a. | any contingent liabilities, off balance sheet arrangements or commitments, general provisions, general
reserves or general accruals; |
| b. | any liabilities, asset write offs, provisions, reserves or accruals in respect of matters set out
in the Seller Disclosure Letter; |
| c. | any liabilities, asset write offs, provisions, reserves, or accruals in respect of environmental matters,
rehabilitation obligations, asset retirement obligations, dilapidations or similar items (including any current and non-current
portions thereof); |
| d. | any liabilities in respect of the customs claims referred to in Schedule 5.9 of the Seller Disclosure
Letter; |
| e. | any provision or liability with respect to any matter which is the subject of an indemnity or other
remedy in favour of the Buyer under the terms of this Agreement or any other transaction documents; |
| f. | any liabilities relating to income Tax, current income taxes, deferred tax liabilities or liabilities
for uncertain tax positions and the any tax assessment; |
| g. | any shareholder loans or liabilities (net of any associated receivables) due to the Seller or its
Affiliates which are recapitalized, restructured, reorganised or are otherwise not actually payable by the Company Group under
or as a result of the Pre-Closing Restructure; |
| h. | any capital lease liabilities or similar arrangements; |
| i. | any liabilities related to IGS company funded pension scheme; |
| j. | any liabilities, accruals, reserves or credit balances in respect of non-controlling interest or minority
interests; and |
| k. | any payables, liabilities, accruals, provisions or reserves (including in respect of bonus, salary,
and leave liabilities) in respect of the Excluded Employees. |
| 19. | Part 2 of Schedule “C” sets out the balance sheet accounting mapping in respect of Net
Debt and Working Capital. To the extent that there is any conflict between this Part 1 of Schedule “C” ‘Accounting
Principles’ and the balance sheet mapping set out in Part 2 of Schedule “C”, this Part 1 of Schedule “C”
‘Accounting Principles’ shall prevail. |
Schedule “C” - Part 2
[Redacted - Illustrative Balancing Payment Calculation]
Schedule
“D”
TRANSITION AGREEMENT PRINCIPLES
The matters to be dealt with as part of the
transition agreement are the following:
• Human Resources
• Information Technology
• Exploration
• Finance
• Contract support
• Insurance
• Environmental bonds
Schedule
“E”
BUSINESS RECORDS
Business Records include the following:
| • | All Employee personnel files (including Ghana, London, Toronto) for existing and (where available)
previous Employees including: |
| o | Employee personal data (age, sex, address etc.) |
| o | Job application or resume |
| o | Position description and job classification |
| o | Recruitment and selection notes, including interview |
| o | Employment and qualification verification |
| o | Police or background checks/Security clearance |
| o | Visa or work permit and residency permit records |
| o | Orientation/Induction checklist |
| o | Acknowledgement receipts of employee handbook or code of conduct, other policies and procedures (confidentiality,
IT etc.) |
| o | New employee probation reports |
| o | Complaints/Awards and citations |
| o | Performance improvement plans or corrective action letters |
| o | Warning letters or other disciplinary actions |
| o | STIP Incentive agreements |
| o | LTI Incentive agreements - SARs or stock options |
| o | Employee benefits (e.g. car, club dues) |
| o | Accommodation or rental agreements |
| o | Next of Kin and emergency contact information |
| o | Licences and Qualifications |
| o | Training records (e.g. assessment forms, attendance records) |
| o | Training expense reimbursement records |
| o | Timesheets including requests for overtime |
| o | Any special agreements between Golden Star and an employee (e.g. continuation of insurance,) |
| o | Employee job-related medical or physical assessments |
| o | Change in employment status (reduction of hours) |
| o | Attendance and leave records |
| o | Any other form of contract, written agreement receipt or acknowledgement between the employee and
a Company Group member, the Seller or an Affiliate of the Seller (e.g. non-competes) |
| o | Indemnification agreements |
| o | Claims for workers compensation |
| o | Other employee compensation claims (e.g. discrimination) |
| o | Long-term disability claims |
| o | Termination or resignation files |
| • | Employee payroll and tax documents |
| o | Bank or privacy authorisation letters |
| o | Authorisation for any payroll actions |
| o | Social security information |
| o | Employee expense reimbursement requests or payments |
| o | Compensation history record |
| o | Compensation recommendations |
| o | Notification of wage and or salary increase/decrease |
| • | Authorised organisational documents |
| • | Workers compensation insurance plans |
| • | All training materials - technical, compliance, leadership, professional development |
| o | Theory content/presentations |
| o | Visual or physical teaching aids |
| • | Details of group life, health, accident and disability insurance plans |
| • | Details of retirement plans/benefits |
| • | Details of pension plans |
| • | Licences and software for any existing HRIS modules |