EXHIBIT 2.3
DURBAN ROODEPOORT DEEP, LIMITED
US$60,000,000
PRINCIPAL AMOUNT
6% SENIOR CONVERTIBLE NOTES DUE 2006
PURCHASE AGREEMENT
NOVEMBER 4, 2002
CIBC WORLD MARKETS CORP.
Page 2
6% SENIOR CONVERTIBLE NOTES DUE 2006
OF DURBAN ROODEPOORT DEEP, LIMITED
CIBC WORLD MARKETS CORP.
November 4, 2002
CIBC World Markets Corp.
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Madams:
Durban Roodepoort Deep, Limited, a corporation incorporated under the laws of
the Republic of South Africa (the "COMPANY"), proposes to issue and sell to CIBC
World Markets Corp. or any affiliate or affiliates of CIBC World Markets Corp.
designated by CIBC World Markets Corp. (the "INITIAL PURCHASER"), an aggregate
of US$60,000,000 (the "PRINCIPAL AMOUNT") in principal amount of its 6% Senior
Convertible Notes due November 12, 2006 (the "FIRM NOTES"), subject to the terms
and conditions set forth herein (the "OFFERING"). The Company also proposes to
issue and sell to the Initial Purchaser not more than an additional US$6,000,000
principal amount of the Company's 6% Senior Convertible Notes due November 12,
2006 (the "ADDITIONAL NOTES"), if requested by the initial Purchaser as provided
in Section 2 hereof. The Firm Notes and the Additional Notes are herein
collectively referred to as the "NOTES." The Notes are to be issued pursuant to
the provisions of an indenture (the "INDENTURE"), to be dated as of the Closing
Date (as hereinafter defined), between the Company, and The Bank of New York, as
trustee (the "TRUSTEE"), pursuant to which the Notes, as provided therein, will
be convertible at the option of the holders thereof into either (i) ordinary
shares in the capital of the Company (the "ORDINARY SHARES") or (ii) American
Depositary Receipts evidencing American Depositary Shares representing Ordinary
Shares ("ADRs"). The Notes and the Ordinary Shares or ADRs issuable upon
conversion thereof are herein collectively referred to as the "SECURITIES." The
Securities and the Indenture are more fully described in the Offering Memorandum
(as hereinafter defined) and shall be in substantially the form set out in the
Preliminary Offering Memorandum (as defined herein) except for the following:
(i) the Company shall use the proceeds from the Offering as set out in
Schedule E attached hereto; (ii) the conversion price will be reduced if the
Company distributes a cash dividend on any class of the Company's capital stock
by the amount of such dividend; (iii) the Company may redeem the Notes after the
day which is three years from Closing Date (as hereinafter defined); and (iv)
when the Notes are repaid the holder shall be entitled to the principal amount
of the Notes, the accrued interest and 2.5% of the principal amount of the Notes
if repaid at maturity or a pro rata portion of the 2.5% of the principal amount
of the Notes if it is repaid prior to maturity. Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Indenture.
Page 3
1. OFFERING MEMORANDUM.
The Notes will be offered and sold to the Initial Purchaser pursuant to one
or more exemptions from the registration requirements under the United
States Securities Act of 1933, as amended (the "SECURITIES ACT"). The
Company has prepared a preliminary offering memorandum dated October 25,
2002 (the "PRELIMINARY OFFERING MEMORANDUM") and an offering memorandum
dated November 4, 2002 (the "OFFERING MEMORANDUM"), relating to the Notes.
Unless and until a Note is sold or otherwise transferred in connection with
an effective registration statement (i) the Notes sold pursuant to Rule
144A under the Securities Act (the "Rule 144A Notes") shall bear the
following legend and (ii) until at least the 41st day after the Closing
Date or Option Closing Date, as the case may be (each as defined below),
the Notes sold pursuant to Regulation S of the Securities Act ("Regulation
S Notes") shall bear the following legend:
The securities evidenced hereby, the ordinary shares issuable upon
conversion of the securities evidenced hereby, and the ordinary shares
which will be represented by ADSs issuable upon conversion of the
securities evidenced hereby, have not been registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and accordingly
may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except as set forth in the following
sentence. By its acquisition hereof, the holder (1) represents that (a) it
is a "qualified institutional buyer" within the meaning of Rule 144A under
the Securities Act (a "QIB") or (b) it is not a U.S. person and is
acquiring this security in an offshore transaction in compliance with
Regulation S under the Securities Act, (2) agrees that it will not offer,
sell, pledge or otherwise transfer this security except (a) to Durban
Roodepoort Deep, Limited or any subsidiary thereof, (b) outside the United
States to a non-U.S. person in an offshore transaction in accordance with
Rule 903 or Rule 904 of Regulation S, (c) in accordance with Rule 144A to a
person whom the seller and any person acting on behalf of the seller
reasonably believe is a QIB purchasing for its own account or for the
account of a QIB in a transaction meeting the requirements of Rule 144A and
to whom notice is given that such offer, sale or transfer is being made in
reliance on Rule 144A, (d) pursuant to a registration statement which has
been declared effective under the Securities Act, or (e) pursuant to an
exemption from registration under the Securities Act provided by Rule 144
thereunder (if available), in each of the cases (a) through (e) in
accordance with any applicable securities laws of any state of the United
Page 4
States, and (3) agrees that it will deliver to each person to whom this
security or an interest herein is transferred a notice substantially to the
effect of this legend. As used herein, the terms "offshore transaction,"
"United States" and "U.S. person" have the meanings given to them by
Regulation S under the Securities Act. The indenture contains a provision
requiring the trustee to refuse to register (as applicable) any transfer of
this security in violation of the foregoing restrictions.
2. AGREEMENTS TO SELL AND PURCHASE AND COMMISSION.
(a) On the basis of the representations, warranties and covenants
contained in this Purchase Agreement (this "AGREEMENT"), and subject
to the terms and conditions contained herein, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, all of the Firm Notes at a
purchase price equal to 100% of the principal amount thereof (the
"PURCHASE PRICE").
(b) On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, (i) the Company
agrees to issue and sell the Additional Notes and (ii) the Initial
Purchaser shall have a right, but not the obligation, to purchase the
Additional Notes, from the Company at the Purchase Price. Additional
Notes may be purchased solely for the purpose of covering over-
allotments made in connection with the offering of the Firm Notes. The
Initial Purchaser may exercise its right to purchase Additional Notes
in whole or in part from time to time by giving written notice thereof
to the Company at any time within 30 days after the date of this
Agreement. Such notice shall specify the aggregate principal amount of
Additional Notes to be purchased pursuant to such exercise and the
date for payment and delivery thereof. The date specified in any such
notice shall be a business day (i) no earlier than the Closing Date,
(ii) no later than ten business days after such notice has been given
and (iii) no earlier than two business days after such notice has been
given.
(c) In consideration of the services rendered and to be rendered by the
Initial Purchaser to the Company in respect of the Offering, the
Company agrees to pay to the Initial Purchaser on the Closing Date or
Option Closing Date (as defined at Section 4), as the case may be, a
commission equal to 2.75% of the aggregate principal amount of Firm
Notes or Additional Notes, as the case may be (the "INITIAL
PURCHASER'S COMMISSION") payable in immediately available funds or as
a deduction from the
Page 5
funds payable by the Initial Purchaser to the Company for the Firm
Notes or Additional Notes, as the case may be.
3. TERMS OF OFFERING.
The Initial Purchaser has advised the Company that the Initial Purchaser
will make offers (the "EXEMPT RESALES") of the Notes purchased hereunder on
the terms set forth in the Offering Memorandum, as amended or supplemented,
solely to persons whom the Initial Purchaser reasonably believes to be
either (i) where such persons are resident in the U.S. "qualified
institutional buyers" as defined in Rule 144A under the Securities Act
("QIB's") or (ii) where such persons are resident outside of the U.S.,
purchasing such Notes in accordance with Regulation S under the Securities
Act and in accordance with the securities laws applicable in the
jurisdiction in which such persons are resident ("FOREIGN QUALIFIED
PURCHASERS"). The Initial Purchaser will offer the Notes to QIB's and
Foreign Qualified Purchasers initially at a price equal to 100% of the
principal amount thereof. Such price may be changed at any time without
notice. The Initial Purchaser may make the Exempt Resales through an
affiliate or agent.
Holders (including subsequent transferees) of the Securities will have the
registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date, in
substantially the form of Exhibit A hereto, for so long as such Securities
constitute "RESTRICTED SECURITIES" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the U.S. Securities and Exchange Commission (the
"COMMISSION"), under the circumstances set forth therein, a shelf
registration statement pursuant to Rule 415 under the Securities Act (the
"REGISTRATION STATEMENT") relating to the resale by certain holders of the
Securities and to use all reasonable best efforts to cause such
Registration Statement to be declared and remain effective and usable for
the periods specified in the Registration Rights Agreement. This Agreement,
the Indenture, the Notes, and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "OPERATIVE
DOCUMENTS."
4. DELIVERY AND PAYMENT.
(a) Delivery of, and payment of the Purchase Price for, the Firm Notes
shall be made at the offices of Fulbright & Xxxxxxxx LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX 00000 or such other location as may be mutually
acceptable. Such delivery and payment
Page 6
shall be made at 10:00a.m., New York time, on November 12, 2002 or at
such other time on the same date or such other date as the Initial
Purchaser and the Company shall agree in writing. The time and date of
such delivery and the payment for the Firm Notes are herein called the
"CLOSING DATE."
(b) Delivery of, and payment for, any Additional Notes to be purchased by
the Initial Purchaser shall be made at the offices of Fulbright &
Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 at 10:00 a.m., New
York time, on the date specified in the exercise notice given by CIBC
pursuant to Section 2(b) or such other time on the same or such other
date as the Initial Purchaser and the Company shall agree in writing.
The time and date of delivery, and payment for any Additional Notes
are hereinafter referred to as an "OPTION CLOSING DATE."
(c) One or more of the Notes in definitive global form, registered (i) in
the name of Cede & Co., as nominee of the Depositary Trust Company
("DTC"), or (ii) in the name of The Bank of New York Depositary
(Nominees) Limited as common depositary for Euroclear and Clearstream,
as may be directed by the Initial Purchaser prior to the Closing Date
(the "GLOBAL NOTES"), shall be delivered by the Company to the Initial
Purchaser (or as the Initial Purchaser directs) in each case with any
transfer taxes thereon duly paid by the Company against payment by the
Initial Purchaser of the Purchase Price thereof by wire transfer in
same day funds to the order of the Company. The Global Notes shall
together total the Principal Amount and shall be made available to the
Initial Purchaser for inspection not later than 9:30 a.m., New York
time, on the business day immediately preceding the Closing Date.
5. AGREEMENTS OF THE COMPANY.
The Company hereby agrees with the Initial Purchaser as follows:
(a) To advise the Initial Purchaser promptly and, if requested by the
Initial Purchaser, to confirm such advice in writing of (i) the
issuance by any securities commission or regulatory authority of any
stop order suspending the qualification or exemption from
qualification of any Securities for offering or sale in any
jurisdiction designated by the Initial Purchaser pursuant to Section
5(e) below, or the initiation of any proceeding by any securities
commission or regulatory authority or any other federal, state or
provincial regulatory authority for such purpose and (ii) the
happening of any event during the period referred to in Section 5(c)
below that
Page 7
makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue in any material
respect or that requires any additions to or changes in the
Preliminary Offering Memorandum or the Offering Memorandum in order to
make the statements therein not misleading. The Company shall use its
reasonable best efforts to prevent the issuance of any stop order or
order suspending the qualification or exemption of any Securities
under any applicable securities laws, including any U.S. state
securities or Blue Sky laws and, if at any time any securities
commission or regulatory authority or other federal or state
regulatory authority shall issue an order suspending the qualification
or exemption of any Securities under any applicable securities laws,
including any U.S. state securities or Blue Sky laws, the Company
shall use its reasonable best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchaser and those persons identified by the
Initial Purchaser to the Company as many copies of the Preliminary
Offering Memorandum and the Offering Memorandum in such place as the
Initial Purchaser shall determine, and any amendments or supplements
thereto, as the Initial Purchaser may reasonably request for the time
period specified in Section 5(c). Subject to the Initial Purchaser's
compliance with its representations and warranties and agreements set
forth in Section 7 hereof, the Company consents to the use of the
Preliminary Offering Memorandum or the Offering Memorandum, and any
amendments and supplements thereto required pursuant hereto, by the
Initial Purchaser in connection with Exempt Resales.
(c) During the period commencing on the date of this Agreement and ending
on the date the Initial Purchaser notifies the Company that the
distribution of the Notes has ceased, (i) not to make any amendment or
supplement to the Preliminary Offering Memorandum or the Offering
Memorandum of which the Initial Purchaser shall not previously have
been advised or to which the Initial Purchaser shall reasonably object
after being so advised and (ii) to prepare promptly upon the Initial
Purchaser's reasonable request any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection
with such Exempt Resales.
(d) If, during the period referred to in Section 5(c) above, any event
shall occur or condition shall exist as a result of which, in the
reasonable opinion of counsel to the Initial Purchaser, it becomes
necessary to amend or supplement the Preliminary
Page 8
Offering Memorandum or the Offering Memorandum in order that the
Preliminary Offering Memorandum or Offering Memorandum will not
include an untrue statement of a material fact necessary in order to
make the statements therein, in the light of the circumstances when
the Offering Memorandum is delivered to a QIB or a Foreign Qualified
Purchaser, not misleading, or if, in the opinion of counsel to the
Initial Purchaser, it is necessary to amend or supplement the
Preliminary Offering Memorandum or the Offering Memorandum to comply
with any applicable law, forthwith to prepare an appropriate amendment
or supplement to the Preliminary Offering Memorandum or the Offering
Memorandum so that the statements therein, as so amended or
supplemented, will not, in the light of the circumstances when it is
so delivered, be misleading, or so that the Offering Memorandum will
comply with applicable law, and to furnish to the Initial Purchaser
and such other persons as the Initial Purchaser may designate such
number of copies thereof as the Initial Purchaser may reasonably
request.
(e) Prior to the sale of all Notes pursuant to Exempt Resales as
contemplated hereby, to cooperate with the Initial Purchaser and
counsel to the Initial Purchaser in connection with the registration
or qualification of the Securities for offer and sale to the Initial
Purchaser and pursuant to Exempt Resales under the securities or Blue
Sky laws of such jurisdictions as the Initial Purchaser may request
and to continue such registration or qualification in effect so long
as required for Exempt Resales and to file such consents to service of
process or other documents as may be necessary in order to effect such
registration or qualification; provided, however, that the Company
shall not be required in connection therewith to qualify as a foreign
company in any jurisdiction in which it is not now so qualified or to
take any action that would subject it to general consent to service of
process or taxation, other than as to matters and transactions
relating to the Offering Memorandum or Exempt Resales, in any
jurisdiction in which it is not now so subject.
(f) So long as the Notes are outstanding, (i) to mail or make generally
available as soon as practicable after the end of each fiscal year to
the record holders of the Notes a financial report of the Company and
its subsidiaries on a consolidated basis it being agreed that all such
financial reports will include a consolidated balance sheet, a
consolidated statement of operations, a consolidated statement of cash
flows and a consolidated statement of shareholders' equity as of the
end of and for such fiscal year, together with comparable information
as of the end of and for the preceding year, certified by the
Company's independent public accountants and (ii)
Page 9
to mail or make generally available as soon as practicable after the
end of each quarterly period (except for the last quarterly period of
each fiscal year) to such holders, a consolidated balance sheet, a
consolidated statement of operations and a consolidated statement of
cash flows as of the end of and for such period, and for the period
from the beginning of such year to the close of such quarterly period,
together with comparable information for the preceding quarterly
periods; provided that the Company shall not be obligated to provide
the holders of the Notes any information which is not otherwise
provided to the holders of its ADRs and Ordinary Shares.
(g) So long as the Notes are outstanding, to furnish or to make available
to the Initial Purchaser as soon as available copies of all reports or
other communications furnished by the Company to its security holders
or furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is
listed or otherwise asserts jurisdiction and such other publicly
available information concerning the Company and/or its subsidiaries
as the Initial Purchaser may reasonably request.
(h) So long as any of the Notes remain outstanding and during any period
in which the Company is not subject to Section 13 or 15(d) of the
United States Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), to make available to any holder of Securities in
connection with any sale thereof and any prospective purchaser of such
Securities from such holder the information ("RULE 144A INFORMATION")
required by Rule 144A(d)(4) under the Securities Act or the
information ("RULE 144 INFORMATION") required by Rule 144(c)(2) under
the Securities Act, as applicable.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be
paid all expenses incident to the performance of the obligations of
the Company under this Agreement, including: (i) the fees,
disbursements and expenses of counsel to the Company and accountants
of the Company in connection with the sale and delivery of the Notes
to the Initial Purchaser and pursuant to Exempt Resales, and all other
fees and expenses in connection with the preparation, printing, filing
and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum, any documents incorporated by reference and all
amendments and supplements to any of the foregoing (including
financial statements), including the mailing and delivering of
Page 10
copies thereof to the Initial Purchaser and persons designated by it
in the quantities specified-herein, (ii) all costs and expenses
related to the transfer and delivery of the Notes to the Initial
Purchaser and pursuant to Exempt Resales, including any transfer or
other taxes payable thereon, (iii) all costs of printing or producing
this Agreement, the other Operative Documents and any other agreements
or documents in connection with the offering, purchase, sale or
delivery of the Securities, (iv) all expenses in connection with the
registration or qualification of the Securities for offer and sale
under the securities or Blue Sky laws of the several states and all
costs of printing or producing any preliminary and supplemental Blue
Sky memoranda in connection therewith (including the filing fees and
fees and disbursements of counsel for the Initial Purchaser in
connection with such registration or qualification and memoranda
relating thereto), (v) the cost of printing certificates representing
the Securities, (vi) all expenses and listing fees in connection with
the application for quotation of the Notes in The PORTAL Market of the
Nasdaq Stock Market Inc. ("PORTAL"), (vii) the fees and expenses of
the Trustee and the Trustee's counsel in connection with the Indenture
and the Notes together with the fees of the paying agent, (viii) the
costs and charges of any transfer agent, registrar and/or depository
(including DTC, Euroclear and Clearstream), (ix) all costs and
expenses of the Registration Statement, as set forth in the
Registration Rights Agreement, (x) all expenses and listing fees in
connection with the application for listing the Ordinary Shares and
ADRs issuable upon conversion of the Notes on the JSE Securities
Exchange South Africa (the "JSE"), the Nasdaq SmallCap Market
("NASDAQ") or any other exchange on which the Company's securities are
listed, as the case may be, to the extent applicable and (xi) and all
other costs and expenses incident to the performance of the
obligations of the Company hereunder for which a provision is not
otherwise made in this Section.
(j) To effect the inclusion of the Notes in PORTAL and to use reasonable
best efforts to maintain the quotation of the Notes on PORTAL for so
long as any of the Rule 144A Notes are outstanding.
(k) To obtain the approval of each of DTC, Euroclear and Clearstream for
"book-entry" transfer of the Notes, and to comply with all of its
agreements set forth in the representation letters of the Company to
DTC, Euroclear and Clearstream relating to the approval of the Notes
by DTC, Euroclear and Clearstream for "book-entry" transfer.
Page 11
(l) To cause the Ordinary Shares and the ADRs issuable upon conversion of
the Notes to be duly included for quotation on the JSE or NASDAQ, as
the case may be, prior to the Closing Date, subject to notice of
official issuance. The Company will ensure that such Ordinary Shares
and ADRs remain included for quotation on the JSE, NASDAQ or any other
national securities exchange upon which such securities are listed, as
the case may be, following the Closing Date for so long as any
Ordinary Shares or ADRs are listed on the JSE or remain listed on
NASDAQ, respectively, as the case may be. The Company will use its
reasonable best efforts to maintain the listing of its Ordinary Shares
on the JSE and to maintain the quotation of its ADRs on NASDAQ or any
other national securities exchange or OTC Bulletin Board.
(m) The Company will reserve and keep available at all times, or cause the
ADR depositary to so reserve and keep available, as the case may be,
free of preemptive rights, the Ordinary Shares and ADRs for the
purpose of enabling the Company to satisfy its obligations to issue
the Ordinary Shares and ADRs upon conversion of the Notes.
(n) The Company shall not offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, or otherwise
transfer or dispose of, directly or indirectly, any Ordinary Shares or
ADRs (other than the issuance of Ordinary Shares or ADRs upon
conversion of the Notes or any securities convertible into or
exercisable or exchangeable for Ordinary Shares or ADRs), for a period
of 90 days after the date hereof without the prior written consent of
the Initial Purchaser, which shall not be unreasonably withheld.
Notwithstanding the foregoing, during such period (i) the Company may
grant securities convertible into or exercisable or exchangeable for
Ordinary Shares or ADRs pursuant to the Company's existing stock
option or stock purchase plans, and (ii) the Company may issue
Ordinary Shares or ADRs upon the conversion or exchange of a
convertible or exchangeable security outstanding on the date hereof or
granted under the Company's existing stock option or stock purchase
plans. The Company shall, prior to or concurrently with the execution
of this Agreement, deliver an agreement executed by each of the
directors and officers of the Company listed on Exhibit D to the
effect that such person will not, during the period commencing on the
date such person signs such agreement and ending 90 days after the
date hereof, without the prior written consent of the Initial
Purchaser, (i) engage in any of the transactions described in the
first sentence of this paragraph
Page 12
(whether such shares or any such securities are now owned by such
individual or are hereafter acquired) or (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any
of the economic consequences associated with the ownership of any
Ordinary Shares or ADRs (whether any such transactions described in
clause (i) or (ii) is to be settled by the delivery of Ordinary Shares
or ADRs or such other securities, in cash or otherwise).
(o) The Company will not and will not cause its subsidiaries to sell,
offer for sale or solicit offers to buy or otherwise negotiate in
respect of any security (as defined in the Securities Act) that would
be integrated with the sale of the Notes to the Initial Purchaser or
pursuant to Exempt Resales in a manner that would require the
registration of any such sale of the Notes under the Securities Act.
(p) In connection with the offering, until the Initial Purchaser shall
have notified the Company of the completion of the resale of the
Notes, neither the Company nor any of its subsidiaries or affiliates
has or will, either alone or with one or more other persons, bid for
or purchase for any account in which it or any of its subsidiaries or
affiliates has a beneficial interest any Notes or attempt to induce
any person to purchase any Notes; and neither it nor any of its
subsidiaries or affiliates will make bids or purchases for the purpose
of creating actual, or apparent, active trading in, or of raising the
price of, the Notes.
(q) Neither the Company, nor any of its affiliates (as defined in Rule 405
under the Securities Act), nor any person acting on its or their
behalf will engage in any directed selling efforts (as such term is
defined in Regulation S) with respect to the Notes in connection with
the Offering in the United States;
(r) Neither the Company, nor any of its affiliates (as defined in Rule 405
under the Securities Act), nor any person acting on its or their
behalf will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with
any offer or sale of the Notes in the United States;
(s) Until the earlier of (i) the date which is one year after the date as
of which the holders of the Notes may sell all of the Ordinary Shares
or ADRs issuable upon conversion of the Notes without restriction
pursuant to Rule 144(k) promulgated under the Securities Act and (ii)
the date on which the holders of the Notes shall have sold all of the
Ordinary Shares or ADRs issuable upon conversion of the Notes
Page 13
and (iii) none of the Notes is outstanding (the "Reporting Period"),
the Company shall timely file all reports required to be filed with
the Commission pursuant to the Exchange Act and the Company shall not
terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations
thereunder would otherwise permit such termination.
(t) The Company shall maintain a depositary agreement pursuant to which
ADRs will be issued upon conversion of the Notes for so long as any
Notes remain outstanding (the "DEPOSITARY AGREEMENT").
(u) Not to voluntarily claim, and to actively resist any attempts to
claim, the benefit of any usury laws against the holders of any Notes.
(v) To use the net proceeds received by it from the sale of the Securities
in the manner specified in the Offering Memorandum under the caption
"Use of Proceeds."
(w) To perform all things required or necessary to be done and performed
under this Agreement by it prior to the Closing Date and to satisfy
all conditions precedent to the delivery of the Notes.
(x) Prior to the Closing Date the Company will not issue any press release
or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of
which the Initial Purchaser are notified), without the prior written
consent of the Initial Purchaser, unless in the judgment of the
Company and its counsel, and after notification to the Initial
Purchaser, such press release or communication is required by law.
6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company hereby represents and warrants to the Initial Purchaser as of
the date hereof and as of the Closing Date, which representations and
warranties shall survive the Closing, as follows:
Page 14
(a) ORGANIZATION AND STANDING. The Company is a corporation duly organized
and validly existing under the laws of the Republic of South Africa.
The Company has the requisite corporate power and authority to own and
operate its properties and assets and to carry on its business as
currently conducted and as proposed to be conducted. Neither the
Company nor any of its subsidiaries is (i) in violation of its charter
or by-laws (or other comparable organizational documents), (ii) in
default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement or other material agreement or instrument to which it is a
party or by which it is bound or to which any of its property or
assets is subject or (iii) in violation in any material respect of any
law, ordinance, governmental rule, regulation or court decree to which
it or its property or assets may be subject, which defaults, events or
violations in the case of clauses (ii) or (iii) would have a material
adverse effect on the Company.
(b) CAPITAL. All outstanding shares in the capital of the Company have
been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any pre-emptive or similar rights,
and, except as disclosed in the Offering Memorandum there are no
restrictions upon the voting or transfer of the Ordinary Shares or
ADRs pursuant to the Company's constitutional or other governing
documents or, except as set forth herein, any agreement or other
instrument to which the Company is a party or by which it may be
bound. The Ordinary Shares and the ADRs conform in all material
respects to the descriptions thereof set forth in the Offering
Memorandum. The authorized and outstanding capital of the Company is
as set forth in the Offering Memorandum, and there have been no
changes thereto since the date set forth under the heading
"Capitalization" in the Offering Memorandum, except to the extent that
certain outstanding options and warrants set forth in the Offering
Memorandum may have been exercised.
(c) MATERIAL SUBSIDIARIES. Except as disclosed in the Offering Memorandum,
the Company owns, directly or indirectly, free and clear of any
security interest, claim, lien, encumbrance or adverse interest of any
nature, of the purchase of the issued and outstanding equity
securities set out in Schedule B to this Agreement of each of the
companies listed at Schedule A (the "MATERIAL SUBSIDIARIES"), each of
which company is duly organized and validly existing under the laws of
its governing jurisdiction and has not been dissolved and each of
which has the corporate
Page 15
capacity and authority to carry on its business as presently carried
on in all jurisdictions where each such company carries on business.
(d) CORPORATE POWER. The Company will have at the Closing Date all
requisite corporate power and authority to execute and deliver this
Agreement and the Registration Rights Agreement, to sell and issue the
Notes and to issue, or cause the ADR depositary to issue; as the case
maybe; the Ordinary Shares and ADRs issuable upon the conversion of
such Notes, and to carry out and perform its obligations under the
terms of this Agreement and the Registration Rights Agreement.
(e) AUTHORIZATION AND VALIDITY OF INDENTURE. The Indenture conforms in all
material respects to the description of the Indenture in the Offering
Memorandum. The Company will have at the Closing Date all requisite
power and authority to execute and deliver the Indenture when duly
executed and delivered by the Company and duly authorized, executed
and delivered by the Trustee, the Indenture will be a valid and
binding agreement of the Company, enforceable against the Company in
accordance with its terms except as (i) the enforceability thereof may
be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability. On the Closing Date, the
Indenture will conform in all material respects to the requirements of
the Trust Indenture Act of 1939, as amended (the "TIA" or "TRUST
INDENTURE ACT"), and the rules and regulations of the Commission
applicable to an indenture which is qualified thereunder and upon the
effectiveness of the Registration Statement, will be qualified under
the TIA.
(f) AUTHORIZATION AND VALIDITY OF NOTES. The Notes have been duly
authorized and, when duly executed, delivered and authenticated in
accordance with the provisions of the Indenture and when delivered to
and paid for by the Initial Purchaser in accordance with the terms of
this Agreement, the holders of the Notes will be entitled to the
benefits of the Indenture and will be valid and binding obligations of
the Company, enforceable in accordance with their terms except as (i)
the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited
by equitable principles of general applicability. On the Closing Date,
the Notes will conform in all material respects as to legal matters to
the description thereof contained in the Offering Memorandum.
Page 16
(g) AUTHORIZATION AND VALIDITY OF ORDINARY SHARES AND ADRs. The Notes are
convertible into either Ordinary Shares or ADRs in accordance with the
terms of the Indenture; the Ordinary Shares or ADRs initially issuable
upon conversion of the Notes have been duly authorized and reserved
for issuance upon such conversion and, when issued upon such
conversion, will be validly issued, fully paid and non-assessable,
will conform to the description thereof contained in the Offering
Memorandum and will be duly authorized for listing on the JSE, NASDAQ
or such other national securities exchange on which such securities
are currently listed, subject to notice of official issuance. The
holders of Ordinary Shares or ADRs or other holders of the Company's
securities have no pre-emptive or similar rights with respect to the
Notes or the Ordinary Shares or ADRs issuable upon conversion of the
Notes. The certificates evidencing the Ordinary Shares or ADRs
issuable upon conversion of the Notes will be in due and proper legal
form.
(h) AUTHORIZATION AND VALIDITY OF PURCHASE AGREEMENT AND REGISTRATION
RIGHTS AGREEMENT. All corporate action on the part of the Company, its
directors, and its shareholders necessary for the authorization,
execution, delivery, and performance of this Agreement and the
Registration Rights Agreement by the Company will have been taken
prior to the Closing. This Agreement and the Registration Rights
Agreement, when executed and delivered by the Company, will constitute
valid and binding obligations of the Company enforceable in accordance
with their terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of
general applicability.
(i) NO CONFLICT. Except as disclosed in the Offering Memorandum, the
issuance and sale of the Notes by the Company and the issuance of
Ordinary Shares and ADRs issuable upon the conversion of such Notes
does not and will not conflict with and does not and will not result
in a breach of any of the terms, conditions or provisions of its
constitutional documents or any agreement or instrument to which the
Company is a party, and will not contravene any provision of
applicable South African law.
(j) DEPOSITARY AGREEMENT. All corporate action on the part of the Company,
its directors and its shareholders necessary for the authorization,
execution, delivery and
Page 17
performance of the Depositary Agreement will be taken prior to
Closing. The Depositary Agreement will constitute a valid and binding
obligation of the Company enforceable in accordance with its terms.
Upon the issuance of the ADRs the holders thereof will be entitled to
the rights specified in the Depositary Agreement and the description
thereof set forth in the Offering Memorandum.
(k) THE JSE SECURITIES EXCHANGE SOUTH AFRICA. The Ordinary Shares are
listed and posted for trading on the JSE and the Company is in
compliance, in all material respects, with the listing requirements of
the JSE. The Company has received the necessary approval for the
Offering from the JSE, and all other necessary regulatory authorities,
including without limitation the South African Reserve Bank. The
Ordinary Shares will be listed and posted for trading on the JSE or
any substitute exchange in South Africa where the Ordinary Shares then
trade following their issue upon conversion of the Notes.
(l) REGULATORY APPROVAL. The ADRs are eligible for trading on the NASDAQ
and the Company is in compliance, in all material respects, with the
listing requirements of NASDAQ. The Company has received the necessary
approval for the Offering from NASDAQ, and all other regulatory
authorities, to the extent applicable. The ADRs will be eligible for
trading on any exchange or market in the United States on which the
ADRs then trade following their issue upon conversion of the Notes. No
action has been taken and no statute, rule, regulation or order has
been enacted, adopted or issued by any governmental agency or body
which prevents the issuance of the Securities or suspends the sale of
the Securities in the United States or South Africa or, to the
Company's knowledge, in any other jurisdiction; no injunction,
restraining order or order of any nature by any federal or state court
of competent jurisdiction in the United States or South Africa, or, to
the Company's knowledge in any other jurisdiction, has been issued
with respect to the Company or any of its subsidiaries which would
prevent or suspend the issuance or sale of the Securities or the use
of the Preliminary Offering Memorandum or the Offering Memorandum in
the United States or South Africa, or, to the Company's knowledge in
any other jurisdiction; no action, suit or proceeding is pending
against or, to the best knowledge of the Company, threatened against
or affecting the Company or any of its subsidiaries before any court
or arbitrator or any governmental agency, body or official, domestic
or foreign which could reasonably be expected to interfere with or
adversely affect the issuance of the Securities; and the Company has
complied with any and all requests by any securities authority in any
jurisdiction for additional information to
Page 18
be included in the Preliminary Offering Memorandum and the Offering
Memorandum.
(m) OTHER APPROVALS. The Company has received all other approvals and
consents whether required by law, regulatory body or by contract,
necessary to allow the Company to perform its obligations hereunder
and give effect to the transactions described in this Agreement
including all necessary approvals required from the holders of
securities of the Company and all necessary approvals required by the
South African Reserve Bank, other than any approvals the absence of
which would not have a material adverse effect on the Company or
interfere with the Company's issuance of the Notes.
(n) NO MATERIAL CHANGE. Since September 30, 2002,
(i) there has not been any material change in the assets,
liabilities or obligations (absolute, accrued, contingent or
otherwise) of the Company and the Material Subsidiaries taken as
a whole that has not been publicly disclosed;
(ii) there has not been any material change in the capital stock or
long-term debt of the Company or its Material Subsidiaries
taken as a whole that has not been publicly disclosed;
(iii) there has not been any material change in the business, business
prospects, condition (financial or otherwise) or results of the
operations of the Company and its Material Subsidiaries taken as
a whole that has not been publicly disclosed;
(iv) except as has been publicly disclosed, since September 30, 2002,
the Company and each of its Material Subsidiaries has carried on
its business in the ordinary course; and
(v) the information filed by the Company in accordance with
applicable securities regulation during the last 12 months did
not, as of the day of filing, contain a material
misrepresentation or omit to state a material fact otherwise
required to be stated in such filing.
Page 19
(o) FREELY TRADEABLE ORDINARY SHARES. If the Notes were converted on the
date hereof the Ordinary Shares issued upon such conversion would be
freely tradeable through the facilities of the JSE by the Initial
Purchaser immediately following the Closing and are not subject to any
selling restrictions or "hold periods".
(p) ISSUE DUTY. Any issue duty, stamp duty or other taxes payable in
connection with the Offering shall be paid by the Company, including,
without limitation the filing fees and expenses in connection with the
filing of Forms 45-501F1 with the Ontario Securities Commission and
the equivalent of such form with each of the other securities
regulatory authorities in each Canadian province or territory in which
purchasers of Notes are resident as may be required under the
securities laws of such province or territory.
(q) CANADIAN SHAREHOLDERS. The Company is not a reporting issuer or the
equivalent thereof as defined in the securities laws of each of the
provinces and territories of Canada and as of the Closing Date after
giving effect to the issue of the Notes and the conversion thereof,
the Company has no knowledge that residents of Canada owned, directly
or indirectly, more than 10 percent of the Ordinary Shares of the
Company and represented more than 10 percent of the total number of
owners, directly or indirectly, of Ordinary Shares of the Company.
(r) TAX RETURNS. The Company has filed all tax returns which are required
to be filed through the date hereof, or has received valid extensions
thereof, and has paid all taxes shown on such returns and all
assessments and reassessments received by it to the extent that the
same are material and have become due.
(s) LICENSES. Each of the Company and its Material Subsidiaries has all
material licenses, franchises, permits, authorizations, approvals and
orders of and from all applicable regulatory agencies or bodies that
are necessary to own its properties and conduct its business as
described in the Offering Memorandum.
(t) TITLE. Each of the Company and its Material Subsidiaries has good
title to each of the items of real property which are reflected in the
most recent financial statements of the Company or are referred to in
the Offering Memorandum as being owned by the Company or any one of
its Material Subsidiaries, other than any defect in title which would
not have a material adverse effect on the Company, other than as
Page 20
described in the Offering Memorandum are free and clear of all
mortgages, liens, charges, security interests, encumbrances or
defects.
(u) LITIGATION. Except as set out in the Offering Memorandum, no
litigation, administrative proceeding, arbitration or other proceeding
before or of any court, tribunal, arbitrator or regulatory or other
governmental body is presently in process, pending, or to the
knowledge of the Company, threatened against or affecting the Company,
which could reasonably be expected to have a material adverse effect
on the Company.
(v) ENVIRONMENTAL LAWS. Each of the Company and its Material Subsidiaries
is in compliance in all material respects with all applicable laws,
statutes, ordinances, by-laws, regulations, orders, directives and
decisions rendered by ministry, department or administrative or
regulatory agency (the "ENVIRONMENTAL LAWS") relating to the
protection of the environment or pollutants, contaminated, chemicals,
or industrial, toxic or hazardous wastes and substances, except for
any instances of non-compliance which would not have a material
adverse effect on the Company. The Company and its Material
Subsidiaries have obtained all necessary licenses, permits and
approvals necessary for its operations under applicable Environmental
Laws.
(w) USE OF PROCEEDS. The Company will use the proceeds of the Offering as
set out in the Offering Memorandum.
(x) RULE 144 A(d)(4) REQUIREMENTS. THE Preliminary Offering Memorandum
does not and the Offering Memorandum on the Closing Date or the Option
Closing Date, except for any statement in the Preliminary Offering
Memorandum that was corrected in the Offering Memorandum will not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading, provided that the representation and warranty contained in
this paragraph 6(z) shall not apply to statements in or omissions from
the Offering Documents based upon written information furnished to the
Company by the Initial Purchaser specifically for use therein,
(y) RULE 144A(d)(3) REQUIREMENTS. When the Notes are issued and delivered
pursuant to this Agreement, the Notes will not be of the same class
(within the meaning of
Page 21
Rule 144A under the Securities Act) as any security of the Company
that is listed on a national securities exchange registered under
Section 6 of the Exchange Act or that is quoted in a United States
automated inter-dealer quotation system.
(z) FINANCIAL STATEMENTS. Deloitte & Touche are independent certified
public accountants with respect to the Company and its Material
Subsidiaries as required by the Securities Act and within the meaning
of the Code of Professional Conduct of the American Institute of
Certified Public Accountants. The financial statements of the Company
included in the Preliminary Offering Memorandum and the Offering
Memorandum present fairly, in all material respects, the financial
position, results of operations and cash flows of the Company as of
the dates and for the periods indicated in conformity with generally
accepted accounting principles and applied on a consistent basis
throughout the periods involved; the selected financial data, the
summary financial data and other financial and statistical information
regarding the Company included in the Preliminary Offering Memorandum
and the Offering Memorandum present fairly the information shown
therein and have, except as stated therein, been compiled on a basis
consistent with that of the financial statements of the Company
included in the Preliminary Offering Memorandum and the Offering
Memorandum and the Company has no material liabilities or obligations
(direct or indirect, contingent or absolute, matured or unmatured) of
any nature whatsoever, whether arising out of contract, tort, statute
or otherwise, which are not reflected or reserved against in such
financial statements or specifically disclosed in the Offering
Memorandum.
(aa) RELATED PARTIES. No relationship, direct or indirect, exists
between or among any of the Company or any affiliate of the
Company on the one hand, and any director, officer, stockholder,
customer or supplier of any of them, on the other hand, which,
if the Notes were being registered under the Securities Act,
would be required by the Securities Act or the rules and
regulations thereunder to be described in the applicable
registration statement which is not so described in the Offering
Memorandum.
(bb) NO ADVERTISING OR SOLICITATION. No form of general solicitation
or general advertising (as defined in Regulation D under the
Securities Act) was used by the Company, or any of its
affiliates (other than the Initial Purchaser, as to whom the
Company makes no representation) in connection with the offer
and sale of the Notes contemplated hereby, including without
limitation
Page 22
articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general
advertising. No securities of the same class as the Notes have
been issued and sold by the Company within the six month period
immediately prior to the date hereof.
(cc) NO PRIOR DISTRIBUTIONS. Except as permitted by the Securities
Act, neither the Company nor any of its subsidiaries has
distributed and, prior to the completion of the initial
distribution of the Notes (which includes the sale by the
Initial Purchaser), neither will distribute, any offering
materials in connection with the offering and sale of the Notes
other than the Offering Memorandum.
(dd) NO MARKET STABILIZATION. The Company has not taken, nor will it
take, directly or indirectly, any action designed to or that
might reasonably be expected to cause or result in, or that has
constituted or that might reasonably be expect to constitute,
the stabilization or manipulation of the price of the Ordinary
Shares, ADRs or the Notes.
(ee) NO REQUIREMENT FOR QUALIFICATION OF INDENTURE. Prior to the
effectiveness of any Registration Statement, the Indenture is
not required to be qualified under the TIA.
(ff) NO REGISTRATION REQUIREMENT. No registration under the
Securities Act of the Notes is required for the sale of the
Notes to the Initial Purchaser as contemplated hereby or for the
Exempt Resales assuming the accuracy of the Initial Purchaser's
representations and warranties and agreements set faith in
Section 7 hereof.
(gg) OFFERING RESTRICTIONS. The Company and its affiliates have
complied and will comply with the offering restrictions
requirement of Regulation S under the Securities Act in
connection with the offer and sale of the Notes under
Regulation S.
(hh) DIRECTED SELLING. Neither the Company, nor any of its affiliates
(as defined in Rule 405 under the Securities Act), nor any
person acting on its or their
Page 23
behalf, has engaged in any "directed selling efforts" (as
defined in Regulation S) in connection with the offer and sale
of the Notes under Regulation S.
(ii) INVESTMENT COMPANY. The Company is not, and as a result of the
offer and sale of the Notes will not become, an "investment
company" under, and such term is defined in, the United States
Investment Company Act of 1940, as amended.
(jj) PASSIVE FOREIGN INVESTMENT COMPANY. The Company is not, for the
year ended June 30, 2002, and does not intend to become, (i) a
passive foreign investment company within the meaning of Section
1297 of the Internal Revenue Code of 1986, as amended (the
"Code") or (ii) a foreign personal holding company within the
meaning of Section 552 of the Code.
(kk) OFFER TO PUBLIC. The offer by the Company for the issuance and
delivery of Notes is not an offer for subscription or sale to
the public as defined in Chapter VI of South African Companies
Act, 1973 (as amended) in South Africa.
(ll) ACCOUNTING CONTROLS. The Company and the Material Subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed
in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization;
and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(mm) UNLAWFUL PAYMENTS. From July 1, 2000 up to and including the
date hereof, neither the Company nor any of its Material
Subsidiaries, to the best knowledge of the Company, any
director, officer, agent, employee or other person associated
with or acting on behalf of the Company or any of its Material
Subsidiaries has used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political
Page 24
activity, made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from
corporate funds; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(nn) SOLVENCY. On and immediately after the Closing Date, the Company
(after giving effect to the issuance of the Notes and to the
other transactions related thereto as described in the Offering
Memorandum will be Solvent. As used in this paragraph, the term
"Solvent" means, with respect to a particular date, that on such
date the present fair market value (or present fair saleable
value) of the assets of the Company is not less than the total
amount required to pay the probable liabilities of the Company
on its total existing debts and liabilities (including
contingent liabilities) as they become absolute and matured, the
Company is able to realize upon its assets and pay its debts and
other liabilities, contingent obligations and commitments as
they mature and become due in the normal course of business,
assuming the sale of the Securities as contemplated by this
Agreement and the Offering Memorandum, the Company is not
incurring debts or liabilities beyond its ability to pay as such
debts and liabilities mature and the Company is not engaged in
any business or transaction, and is not about to engage in any
business or transaction, for which its property would constitute
unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which the Company is
engaged. In computing the amount of such contingent liabilities
at any time, it is intended that such liabilities will be
computed at the amount that, in the light of all the facts and
circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured
liability.
(oo) OTHER COMMISSIONS. Neither the Company nor the Material
Subsidiaries is a party to any contract, agreement or
understanding with any person that would give rise to a valid
claim against the Company or the Initial Purchasers for a
brokerage commission, finder's fee or like payment in connection
with the offering and sale of the Securities other than in
connection with the financial advisory services relating to the
Offering and the fair and reasonable opinion to be delivered in
accordance with the rules of the JSE.
Page 25
(pp) RANKING SECURITY. The Notes will rank PARI PASSU with all future
and present indebtedness of the Company.
7. INITIAL PURCHASER'S REPRESENTATIONS AND WARRANTIES.
The Initial Purchaser represents and warrants to, and agrees with, the
Company:
(a) CIBC World Markets Corp. is a QIB and an "accredited investor" (as
such term is defined under Regulation D under the Securities Act),
with such knowledge and experience in financial and business matters
as is necessary in order to evaluate the merits and risks of an
investment in the Notes.
(b) The Initial Purchaser (A) is not acquiring the Securities with a view
to any distribution thereof or with any present intention of offering
or selling any of the Securities in a transaction that would violate
the Securities Act or the securities laws of the Republic of South
Africa, any state of the United States, any province or territory of
Canada or any other applicable jurisdiction (the "SECURITIES LAWS")
and (B) the Initial Purchaser acknowledges and agrees that the
Securities have not been and will not be registered under the
Securities Act and may not be offered or sold within the United States
or to, or for the account or benefit of, U.S. persons except (i) QIB's
in reliance on the exemption from the registration requirements of the
Securities Act provided by Rule 144A, or to (ii) Foreign Qualified
Purchasers in offshore transactions in reliance on the exemption from
the registration requirements of the Securities Act provided by
Regulation S promulgated thereunder.
(c) The Initial Purchaser agrees that no form of general solicitation or
general advertising (within the meaning of Regulation D under the
Securities Act) has been or will be used by such Initial Purchaser or
any of its representatives in connection with the offer and sale of
the Securities pursuant hereto, including without limitation articles,
notices or other communications published in any newspaper, magazine
or similar medium or broadcast over television or radio, or any
seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(d) The Initial Purchaser agrees that, in connection with Exempt Resales,
such Initial Purchaser will solicit offers to buy the Securities only
from, and will offer to sell the
Page 26
Securities only to, QIB's or Foreign Qualified Purchasers, as the case
may be. The Initial Purchaser further agrees that it will offer to
sell the Securities only to, and will solicit offers to buy the
Securities only from persons whom the Initial Purchaser reasonably
believes are QIB's or Foreign Qualified Purchasers, as the case may
be, and that agree that (A) the Securities purchased by them may be
offered, resold, pledged or otherwise transferred within the time
period referred to under Rule 144(k) (taking into account the
provisions of Rule 144(d) under the Act, if applicable) under the
Securities Act, as in effect on the date of the transfer of such
Securities, only (1) to a person whom the seller reasonably believes
is a QIB acquiring for its own account or for the account of a QIB in
a transaction meeting the requirements of Rule 144A under the
Securities Act, (2) pursuant to an exemption from registration under
the Act provided by Rule 144 thereunder (if available), (3) to a
Foreign Qualified Purchaser that prior to such transfer, furnishes the
Trustee a signed letter containing certain representations and
agreements relating to the registration and transfer of such
Securities and, if requested by the Company, an opinion of counsel
acceptable to the Company that such transfer is in compliance with the
Securities Act, (4) in accordance with another exemption from the
registration requirements under the Securities Act (and based upon an
opinion of counsel acceptable to the Company) or (5) pursuant to an
effective registration statement and, in each case, in accordance with
the applicable securities laws of the United States or other
jurisdictions and (B) such QIB's will deliver to each person to whom
such Securities or an interest therein is transferred a notice
substantially to the effect of the foregoing. The Initial Purchaser
will not distribute the Securities in violation of any Securities
Laws.
(e) The Initial Purchaser acknowledges that the Company, for purposes of
the opinions to be delivered to the Initial Purchaser pursuant to
Section 9 hereof, counsel to the Company and counsel to the Initial
Purchaser will rely upon the accuracy and truth of the foregoing
representations and the Initial Purchaser hereby consents to such
reliance.
(f) The Initial Purchaser agrees that it will offer and sell the
Securities (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the
offering and the last Closing Date (the "DISTRIBUTION COMPLIANCE
PERIOD"), only in accordance with Rule 903 of Regulation S or Rule
144A under the Securities Act as set out below. Accordingly, neither
it, its affiliates nor any persons acting on its or their behalf have
engaged or will engage in any
Page 27
directed selling efforts with respect to the Securities, and it and
they have complied and will comply with the offering restrictions
requirement of Regulation S the Initial Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale
pursuant to Rule 144A), it will have sent to each distributor, dealer
or person receiving a selling concession, fee or other remuneration
that purchases Securities from it during the distribution compliance
period a confirmation or notice to substantially the following effect:
"The securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
or sold within the United States or to, or for the account or benefit
of, U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 41 days after the later of the commencement of the
offering and the last Closing Date, except in either case in
accordance with Regulation S or Rule 144A under the Securities Act.
Terms used above have the meanings given to them by Regulation S under
the Securities Act."
Terms used in this paragraph have the meanings given to them by
Regulation S.
(g) The Initial Purchaser represents that it has not entered and agrees
that it will not enter into any contractual arrangement with any
distributor (as that term is defined in Regulation S) with respect to
the distribution or delivery of the Notes, except with its affiliates
that agree to the same restrictions as those set forth in this
Section 7.
8. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless the Initial
Purchaser, its directors, its affiliates, its officers, the directors
and officers of its affiliates and each person, if any, who controls
the Initial Purchaser (within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act), (collectively
referred to for the purposes of this section 8(a) as an Initial
Purchaser) from and against any and all losses, claims, damages and
liabilities (joint or several) and judgments (including without
limitation any legal, investigation and other expenses incurred in
connection with investigating or defending any matter, including any
action that could give rise to any such losses, claims, damages,
liabilities or judgments, and any amount paid in settlement of, any
action, suit or proceeding or any claim asserted) to which they, or
any of them, may become subject under the Securities Act, the Exchange
Act or other Federal or state law or regulation, at common law or
otherwise, insofar as
Page 28
such losses, claims, damages or liabilities arise out of or are based
upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum,
Offering Memorandum (or any amendment or supplement thereto) or any
Rule 144 Information or Rule 144A Information provided by the Company
to any holder or prospective purchaser of Securities pursuant to
Section 5(h) or (ii) any omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or judgments are caused by any such
untrue statement or omission or alleged untrue statement or omission
based upon information relating to the Initial Purchaser furnished in
writing to the Company by the Initial Purchaser specifically for use
therein. The foregoing indemnity agreement with respect to any
Preliminary Offering Memorandum shall not inure to the benefit of any
indemnified person who failed to deliver an Offering Memorandum (as
then amended or supplemented, provided by the Company to the Initial
Purchaser in the requisite quantity and on a timely basis to permit
proper delivery on or prior to the Closing Date) to the person
assessing any losses, claims, damages and liabilities and judgments
caused by any untrue statement of alleged untrue statement of a
material fact contained in any Preliminary Offering Memorandum, or
caused by any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, if such material misstatement or omission or
alleged material misstatement or omission was cured, as determined by
a court of competent jurisdiction in a decision not subject to further
appeal, in such Offering Memorandum.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company and its directors and officers and each person, if any, who
controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) the Company to the same extent as the
foregoing indemnity from the Company to the Initial Purchaser but in
each case to the extent that such untrue statement or alleged untrue
statement or omission or alleged omission was made in the Preliminary
Offering Memorandum or the Offering Memorandum in reliance upon and in
conformity with information relating to the Initial Purchaser famished
in writing to the Company by the Initial Purchaser expressly for use
therein; provided, however, that the obligation of the Initial
Purchaser to indemnify the Company (including any controlling person,
director or officer thereof) shall be limited to the net proceeds
received by the Company from such Initial Purchaser.
Page 29
(c) In case any action shall be commenced involving any person in respect
of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party shall assume the defence
of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and
expenses of such counsel, as they are incurred (except that in the
case of any action in respect of which indemnity may be sought
pursuant to both Sections 8(a) and 8(b), the Initial Purchaser shall
not be required to assume the defence of such action pursuant to this
Section 8(c) but may employ separate counsel and participate in the
defense thereof, but the fees and expenses of such counsel, except as
provided below, shall be at the expense of the Initial Purchaser). Any
indemnified party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the
indemnified party unless (i) the employment of such counsel shall have
been specifically authorised in writing by the indemnifying party;
(ii) the indemnifying party shall have failed to assume the defense of
such action or employ counsel reasonably satisfactory to the
indemnified party within a reasonable time after notice of the
commencement thereof, in each of which case the fees and expenses of
counsel shall be at the expense of the indemnifying parties, or (iii)
the named parties to any such action (including any impleaded parties)
include both the indemnified party and the indemnifying party, and the
indemnified party shall have been advised by such counsel that there
may be one or more legal defenses available to it that are different
from or additional to those available to the indemnifying party (in
which case the indemnifying party shall not have the right to assume
the defense of such action on behalf of the indemnified party). In any
such case, the indemnifying party shall not, in connection with any
one action or separate but substantially similar or related actions in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all
indemnified parties, and all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in
writing by the Initial Purchaser, in the case of the parties
indemnified pursuant to Section 8(a), and by the Company, in the case
of parties indemnified pursuant to Section 8(b). The indemnifying
party shall indemnify and hold harmless the indemnified party from and
against any and all losses, claims, damages, liabilities and judgments
by reason of any settlement of
Page 30
any action (i) effected with its written consent or (ii) effected
without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have
received a request from the indemnified party for reimbursement for
the fees and expenses of counsel (in any case where such fees and
expenses are at the expense of the indemnifying party) and, prior to
the date of such settlement, the indemnifying party shall have failed
to comply with such reimbursement request. No indemnifying party
shall, without the prior written consent of the indemnified party,
effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect
of which the indemnified party is or could have been a party and
indemnity or contribution may be or could have been sought hereunder
by the indemnified party, unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the
subject matter of such action and (ii) does not include a statement as
to or an admission of fault, culpability or a failure to act by or on
behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities and judgments (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company, on the one
hand, and the Initial Purchaser, on the other hand, from the offering
of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company, on the
one hand, and the Initial Purchaser, on the other hand, in connection
with the statements or omissions that resulted in such losses, claims,
damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the
Company, on the one hand, and the Initial Purchaser, on the other
hand, shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (after Initial
Purchaser's discounts or commissions, but before deducting expenses)
received by the Company, and the total discounts and commissions
received by the Initial Purchaser bear to the total price to investors
of the Securities, in each case as set forth on the cover page of the
Offering Memorandum. The relative fault of the
Page 31
Company, on the one hand, and the Initial Purchaser, on the other
hand, shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or the Initial
Purchaser, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchaser agree that it would not be just
and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to
in the immediately preceding paragraph. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages,
liabilities or judgments referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified
party in connection with investigating or defending any matter,
including any action, that could have given rise to such losses,
claims, damages, liabilities or judgments. Notwithstanding the
provisions of this Section 8, the Initial Purchaser shall not be
required to contribute any amount in excess of the amount by which the
total discounts and commissions received by the Initial Purchaser
exceeds the amount of any damages that the Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11 (f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies that may otherwise be available
to any indemnified party at law or in equity.
9. CONDITIONS OF THE INITIAL PURCHASER'S OBLIGATIONS.
The obligations of the Initial Purchaser to purchase the Firm Notes under
this Agreement on the Closing Date and the Additional Notes, if any, on any
Option Closing Date are subject to the satisfaction of each of the
following conditions:
Page 32
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct in all material respects on
the Closing Date, or on each Option Closing Date, if any, with the
same force and effect as if made on and as of the Closing Date or on
each Option Closing Date, if any.
(b) On or after the date hereof, (i) there shall not have occurred any
downgrading, suspension or withdrawal of, nor shall any notice have
been given of any potential or intended downgrading, suspension or
withdrawal of, or of any review (or of any potential or intended
review) for a possible change that does not indicate the direction of
the possible change in, any rating of the Company or any securities of
the Company (including without limitation the placing of any of the
foregoing ratings on credit watch with negative or developing
implications or under review with an uncertain direction) by any
"nationally recognized statistical rating organization" as such term
is defined for the purpose of Rule 436(g)(2) under the Securities Act,
(ii) there shall not have occurred any change, nor shall any notice
have been given of any potential or intended change, in the outlook
for any rating of the Company or any securities of the Company by any
such rating organization and (iii) no such rating organization shall
have given notice that it has assigned (or is considering assigning) a
lower rating to the Notes than that on which the Notes were marketed.
(c) Since the respective dates as of which information is given in the
Offering Memorandum, other than as set forth in the Offering
Memorandum (exclusive of any amendments or supplements thereto after
the date of this Agreement), (i) there shall not have occurred any
change or any development involving a prospective change in the
condition, financial or otherwise, or the earnings, business,
management or operations of the Company and its subsidiaries, taken as
a whole, (ii) there shall not have been any change or any development
involving a prospective change in the capital stock or in the
long-term debt of the Company or any of its subsidiaries except in the
ordinary course of business, (iii) neither the Company nor any of its
subsidiaries shall have incurred any liability or obligation, direct
or contingent except in the ordinary course of business, and (iv)
neither the Company nor any of its subsidiaries shall have sustained
any loss or interference with their respective assets, businesses or
properties (whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental
action, order or decree, the effect of which, in case of any event
described in the foregoing clause (i), (ii), (iii) or (iv), in the
reasonable judgment of the Initial Purchaser, is material and
Page 33
adverse and makes it impracticable to market the Notes on the terms
and in the manner contemplated in the Offering Memorandum.
(d) The Initial Purchaser shall have received on the Closing Date a
certificate, dated the Closing Date, and on an Option Closing Date, if
any, dated such Option Closing Date, signed by the Chief Executive
Officer and the Chief Financial Officer of the Company, confirming the
matters set forth in Sections 6 and 9 and stating that the Company has
complied with all the agreements and satisfied all of the conditions
herein contained and required to be complied with or satisfied on or
prior to the Closing Date or Option Closing Date, as the case may be.
(e) The Initial Purchaser shall have received on the Closing Date and each
Option Closing Date, if any, an opinion (subject to customary
qualifications, limitations and exceptions and satisfactory to you and
counsel for the Initial Purchaser), dated the Closing Date or such
Option Closing Date, as the case may be, of Xxxxxx Xxxxxxxxx Inc.,
South African counsel for the Company, with respect to the matters set
out at Schedule B, and Fulbright & Xxxxxxxx LLP with respect to the
matters set out at Schedule C, U.S. counsel for the Company.
Such counsel are not called upon to opine as to factual matters, and
the character of determinations involved in the process is such that
it is not passing upon and does not need to assume any responsibility
for the accuracy, completeness or fairness of the information included
in the Offering Memorandum. Such counsel can advise, however, that in
and on the basis of its review of the Offering Memorandum and its
participation in its preparation, nothing has come to such counsel's
attention that causes it to believe that the Offering Memorandum, as
of its date or as of the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Such
counsel are not called upon to express an opinion with respect to, and
the preceding paragraph does not address, the financial statements and
related notes and schedules, and other financial, numerical and
accounting information, included in, incorporated by reference in, or
omitted from the Offering Memorandum, or any further amendment or
supplement thereto. Such counsel are also not called upon to express
any opinion with respect to any mater relating to compliance with
financial covenants or financial requirements.
Page 34
(f) The Initial Purchaser shall have received on the Closing Date and on
each Option Closing Date, an opinion, dated the Closing Date, of
Blake, Xxxxxxx & Xxxxxxx LLP, counsel for the Initial Purchaser, in
form and substance reasonably satisfactory to the Initial Purchaser.
(g) The Initial Purchaser shall have received, at the time this Agreement
is executed and at the Closing Date and each Option Closing Date, if
any, letters dated the date hereof or the Closing Date or an Option
Closing Date, as the case may be, from Deloitte & Touche LLP,
independent public accountants, in form and substance satisfactory to
the Initial Purchaser containing the information and statements of the
type ordinarily included in accountants' "comfort letters" with
respect to the financial statements and certain financial information
contained in the Offering Memorandum.
(h) The Initial Purchaser shall have received, at the Closing Date and
each Option Closing Date, the Initial Purchaser's Commission payable
by the Company in respect of the Firm Notes or Additional Notes, as
the case may be, pursuant to Section 2(c).
(i) The Notes shall have been approved by the National Association of
Securities Dealers, Inc. for trading and duly listed in PORTAL.
(j) The Initial Purchaser shall have received a counterpart, conformed as
executed, of the Indenture which shall have been entered into by the
Company and the Trustee.
(k) The Company shall have executed the Registration Rights Agreement, and
the Initial Purchaser shall have received an original copy thereof,
duly executed by the Company and the Registration Rights Agreement
shall be in full force and effect.
(l) The Company shall not have failed at or prior to the Closing Date or
each Option Closing Date, if any, as the case may be, to perform or
comply with all of the agreements contained herein and required to be
performed or complied with by the Company at or prior to the Closing
Date or Option Closing Date, as the case may be.
(m) The Initial Purchaser shall have received an opinion that each of the
Material Subsidiaries (i) has been duly incorporated and is validly
existing; and (ii) has the
Page 35
capacity to carry on its business and own its property as described in
the Offering Memorandum.
(n) The Initial Purchaser shall have received a legal opinion that the
Company and each of its Material Subsidiaries, as the case may be,
hold good title to the properties described in the Offering Circular
as the Blyvoor Section, Buffels Section, Harties Section, Crown
Section, West Wits Section and the Tolukuma Mine in the manner
described therein, free and clear of any and all mortgages, charges,
security interests, encumbrances or defects except as otherwise
disclosed in the Offering Circular.
(o) The Initial Purchaser shall have received executed Lock-Up Agreements
in the form set forth in Exhibit B by each of the individuals listed
on Schedule D.
10. EFFECTIVENESS OF AGREEMENT AND TERMINATION.
(a) If at any time during the period commencing on the date hereof and
ending at the Closing Date there shall have occurred any of the
following: (i) any moratorium on commercial banking activities shall
have been declared by federal or New York state authorities or (ii) an
outbreak or escalation of hostilities or a declaration by the United
States of a national emergency or war or (iii) a material adverse
change in general economic, political or financial conditions (or the
effect of international conditions on the financial markets in the
United States shall be such) the effect of which, in the case of this
clause (iii), is, in the reasonable judgment of the Initial Purchaser,
so material and adverse as to make it impracticable or inadvisable to
proceed with the sale or the delivery of the Securities on the terms
and in the manner contemplated by this Agreement and in the Offering
Memorandum (exclusive of any amendment or supplement thereto), the
Initial Purchaser shall be entitled to terminate its obligations under
this Agreement by written notice to that effect given to the Company
not later than the Closing Date.
(b) The rights of termination contained in Section 10(a) above may be
exercised by the Initial Purchaser and are in addition to the rights
of the Initial Purchaser to terminate its obligations if the
conditions set out in section 9 hereof are not fulfilled and any other
rights or remedies the Initial Purchaser may have in respect of any
default, misrepresentation, act or failure to act or non-compliance by
the Company in respect of any of the matters contemplated by this
Agreement.
Page 36
11. MISCELLANEOUS.
(a) Notices given pursuant to any provision of this Agreement shall be
addressed as follows: (i) if to the Company to DRD Building, 00 Xxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxxxxxx, X.X. Xxx 000 Xxxxxxxxxx 0000, Xxxxxxxxx:
Xxx Xxxxxx, with a copy to Xxxx Xxxxxx, Xxxxxx Xxxxxxxxx Inc., 0xx
Xxxxx, Xxxx Xxxxxx Xxxx, Xxxxxxx City, Johannesburg, 2146 Sandton,
Xxxxxx Xxxxxx, Fulbright & Xxxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000-0000, and (ii) if to the Initial Purchaser, c/o CIBC
World Markets Corp., 000 0xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 Attention: Xxxxx Xxxxx, and to CIBC World Markets Inc., BCE
Place, 000 Xxx Xxxxxx, X.X. Xxx 000, Xxxxxxx, Xxxxxxx, X0X 0X0,
Attention: Xxxx Xxxxx, with a copy to Xxx Xxxxxx, Blake, Xxxxxxx &
Xxxxxxx XXX, 0xx Xxxxx, 00 Xxxxx'x Xxxxxx, Xxxxxx XX0X 0XX, and to
Kaya Xxxxxxxx, White & Case, 0-00 Xxxxxxxx, Xxxxxx XX0X 0XX, and in
any case to such other address as the person to be notified may have
requested in writing.
(b) The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company and the Initial
Purchaser set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect and will survive delivery of
and payment for the Securities regardless of (i) any investigation, or
statement as to the results thereof, made by or on behalf of the
Initial Purchaser, the officers or directors of the initial Purchaser,
any person controlling the initial Purchaser, the Company, the
officers or directors of the Company, or any person controlling the
Company, (ii) acceptance of the Securities and payment for them
hereunder and (iii) termination of the Agreement.
(c) If for any reason the Notes are not delivered by or on behalf of the
Company as provided herein (other than as a result of any termination
of this Agreement pursuant to Section 10), the Company agrees to
reimburse the Initial Purchaser for all out-of-pocket expenses
(including the fees and disbursements of counsel) incurred by it.
Notwithstanding any termination of this Agreement, the Company shall
be liable for all expenses which it has agreed to pay pursuant to
Section 5(i).
(d) Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the
Initial Purchaser, the Initial Purchaser's directors and officers, any
controlling persons referred to herein, the
Page 37
directors of the Company and their respective successors and assigns,
all as and to the extent provided in this Agreement, and no other
person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a
purchaser of any of the Securities from the Initial Purchaser merely
because of such purchase.
(e) This Agreement shall be governed and construed in accordance with the
laws of the State of New York, including without limitation, Section
5-1401 of the New York General Obligations Law.
(f) This Agreement may be signed in various counterparts, which together
shall constitute one and the same instrument.
(g) No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
parties hereto.
[SIGNATURE PAGE FOLLOWS]
Page 38
Please confirm that the foregoing correctly sets forth the agreement between the
Company and the Initial Purchaser by signing in the space provided below.
Very truly yours,
DURBAN ROODEPOORT DEEP, LIMITED
By: /s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: CFO
CIBC WORLD MARKETS CORP.
By:/s/ Xxxxx Xxxxx
Name: Xxxxx Xxxxx
Title: Managing Director
[LAST SIGNED NOVEMBER 2002]
Page 39
SCHEDULE A
MATERIAL SUBSIDIARIES
Blyvooruitzicht Gold Mining Company Limited 100%
Buffelsfontein Gold Mines Limited 100%
Crown Consolidated Gold Recoveries Limited 100%
Dome Resources (Pty) Ltd. 100%
Page 40
SCHEDULE B
OPINION OF SOUTH AFRICAN COUNSEL TO THE COMPANY
(i) the Company is a company duly created for an unlimited duration and
validly existing as a company limited by shares under the laws of the
Republic of South Africa with full power and authority to operate its
properties and assets and to carry on its business as currently
conducted;
(ii) each of the South African Material Subsidiaries is a company duly
created for an unlimited duration and validly existing as a company
limited by shares under the laws of the jurisdiction under which such
Material Subsidiary is incorporated, with full power and authority to
operate its properties and assets and to carry on its business as
currently conducted;
(iii) each of the Indenture,
Purchase Agreement and Registration Rights
Agreement have been duly authorized, executed and delivered by the
Company and are valid and binding obligations of the Company enforceable
against the Company in accordance with their terms;
(iv) the Notes to be allotted and issued by the Company have been duly
authorized and executed and, when issued and delivered in accordance
with the terms of the Indenture and the
Purchase Agreement, will rank
pari passu in all respects with all other senior, unsecured indebtedness
of the Company other than indebtedness which would be preferred by
virtue of the Income Tax Act No.58 of 1962 (as amended) and the
Insolvency Act No.24 of 1936 (as amended) and will be valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganisation, moratorium, judicial management and other similar laws
affecting the enforcement of creditor's rights generally and the South
African Exchange Control Regulator 1962 (as amended) which require prior
approval from the South African Reserve Bank for any payment to be made
by a South African resident to a non-resident; the holders thereof will
not be subject to personal liability for obligations of the Company by
reason of being such holders and the Notes will not be issued subject to
any rights of pre-emption;
Page 41
(v) the Ordinary Shares and ADRs issuable upon the conversion of such Notes
to be allotted and issued by the Company have been duly authorized and,
when issued and delivered in accordance with the terms of the Indenture
and the
Purchase Agreement, will be validly issued by the Company in
accordance with South African law and its articles and will rank pari
passu in all respects with other ordinary shares in the share capital of
the Company currently in issue; the holders thereof will not be subject
to personal liability for obligations of the Company by reason of being
such holders and the Ordinary Shares and ADRs will not be issued subject
to any rights of pre-emption and the Ordinary Shares and ADRs issuable
upon the conversion of such Notes will be listed on the JSE and will be
freely tradable on such exchange;
(vi) the execution and delivery by the Company of, and the performance by the
Company of its obligations under each of the Indenture,
Purchase
Agreement and Registration Rights Agreement, and the issuance and
delivery of the Notes and the Ordinary Shares and ADRs issuable upon the
conversion of such Notes to be delivered pursuant to the
Purchase
Agreement, will not contravene any provision of applicable South African
law provided that the Company, is performing its obligations acts within
the framework of the approvals and authorisations granted to it and
referred to in this opinion;
(vii) neither the execution and delivery by the Company of, and the
performance by the Company of its obligations under the
Purchase
Agreement, Indenture, Registration Rights Agreement and the Securities
(including, without limitation, the issuance and sale by the Company of
the Notes and, upon conversion thereof, Ordinary Shares and ADRs, as the
case may be) will to such counsel's knowledge (a) give rise to a right
to terminate or accelerate the due date of any payment due under, or
result in the breach of any express term or provision of, or constitute
a default (or any event which with notice or lapse of time, or both,
would constitute a default) under, or require consent or waiver under,
or result in the execution or imposition of any lien, charge, claim,
security interest or encumbrance upon any properties or assets of the
Company pursuant to the express terms of any indenture, mortgage, deed
trust, note or other agreement or instrument to which the Company is a
party or by which the Company or any of its assets or properties or
businesses is bound, (b) to such counsel's knowledge, violate any
existing obligations of the Company under the express terms of any
judgment, decree, or order of any court or arbitrator or governmental
agency or body, which names the Company and is specifically directed to
it or its properties, or (c) violate any provision of the constitutional
documents of the Company, except for such consents, waivers, approvals
and authorizations which have been obtained prior to the Closing Date;
Page 42
(viii) save for certain statutory returns which the Registrar of Companies in
the Republic of South Africa requires for record keeping purposes in
relation to the issue of the Ordinary Shares issuable upon the
conversion of such Notes, all filings, recordings and enrolments with
any government department or other authority in the Republic of South
Africa which may be necessary to ensure the legality, validity,
enforceability or admissibility in evidence of the
Purchase Agreement,
the Indenture, the Registration Rights Agreement, the Depositary
Agreement, the Notes, and the Ordinary Shares issuable upon the
conversion of such Notes have been made. In order to ensure free
tradability the share certificates or electronic register as the case
may be, evidencing ownership of the Ordinary Shares should be endorsed
"non resident" for South African exchange control purposes;
(ix) under current laws and regulations of the Republic of South Africa the
holders of the Notes and the Ordinary Shares and ADRs issuable upon the
conversion of such Notes will not, by virtue of their ownership of the
Notes or the Ordinary Shares issuable upon the conversion of such Notes,
become subject to taxation in the Republic of South Africa;
(x) no issuance or transfer taxes or duties are payable by or on behalf of
the Initial Purchaser, QIB's or Foreign Qualified Purchasers to the
Republic of South Africa or any political subdivision or taxing
authority thereof or therein save that stamp duty or similar taxes in
the Republic of South Africa will be payable by Initial Purchaser, QIB's
or Foreign Qualified Purchasers if an instrument of transfer is executed
in respect of the sale of any Notes and such person is reflected therein
as a transferee unless the instrument of transfer is executed outside
the Republic of South Africa and the registration of transfer is
effected in any branch register kept by the Company outside the Republic
of South Africa, (i) which branch register has, for a period of at least
5 (five) years, been used for registration of transfer of shares issued
by the Company, (ii) which branch register is kept in a country in which
there is a recognised stock exchange and shares which are issued by the
Corporation are regularly bought and sold on that exchange and, (iii)
which branch register is kept solely or mainly for the convenience of
investors who are not ordinarily resident in the Republic of South
Africa;
(xi) it is not necessary that the Indenture, Purchase Agreement, Registration
Rights Agreement, Notes, ADRs or Ordinary Shares issuable upon the
conversion of such Notes or any document relating to the issue of the
Notes or Ordinary Shares issuable upon the conversion of such Notes be
stamped with any stamp, registration or similar tax in the Republic of
South Africa, other than stamp duty or similar taxes on the issue of the
Notes
Page 43
and Ordinary Shares upon conversion payable by the Company at the rate
of .25% of the issue price and stamp duty or similar tax at .25% of the
consideration or market value, whichever is the higher on the transfer
of Notes or Ordinary Shares issuable upon the conversion of such Notes;
(xii) there are no taxes or other governmental charges payable by the holder
under the laws or regulations of the Republic of South Africa or any
political subdivision or taxing authority thereof or therein in respect
of dividends or other distributions relating to the Notes or Ordinary
Shares and ADRs issuable upon the conversion of such Notes by a holder
who is not ordinarily resident in the Republic of South Africa, or in
respect of the Purchase Agreement;
(xiii) no transfer, withholding, income, capital gains, gift, estate, wealth,
transfer or similar taxes or other charges will be imposed on the holder
or beneficial owner of the Notes or Ordinary Shares and ADRs issuable
upon the conversion of such Notes by the Republic of South Africa or any
political subdivision or taxing authority thereof or therein in
connection with the ownership, transfer or distributions on the Notes or
Ordinary Shares and ADRs issuable upon the conversion of such Notes or
otherwise, where such owner has no connection with the Republic of South
Africa other than the holding or beneficial ownership of the Notes or
Ordinary Shares and ADRs issuable upon the conversion of such Notes save
that income tax may be payable on shares, if dealing activities in the
Notes or Ordinary Shares and ADRs issuable upon the conversion of such
Notes constitute trading stock (that is, the Notes or Ordinary Shares
and ADRs issuable upon the conversion of such Notes are not bought and
held for long-term investment purposes) and if the share dealing
activities of the holder or beneficial owner concerned are carried on in
the Republic of South Africa or if the recipient of any interest
payments under the Notes is not an exempt person in terms of section
10(1)(A) of the South African Income Tax Act No. 58 of 1962;
(xiv) the choice of law provision set forth in the Indenture, Purchase
Agreement and Registration Rights Agreement will be recognized by the
South African courts subject to all applicable pleading requirements;
the irrevocable submission by the Company to the jurisdiction of any
state or federal court in the United States in any action arising out of
or based upon the Indenture, Purchase Agreement or Registration Rights
Agreement or the transactions contemplated hereby, the waiving by the
Company of any objection to the venue of any such action in any such
court and the agreement of the Company that the Indenture, Purchase
Agreement and Registration Rights Agreement shall be governed and
construed
Page 44
in accordance with the laws of the State of
New York, are legal, valid
and binding in the Republic of South Africa;
(xv) subject to the provision in (xvi) below, a South African court will
enforce a judgment for an amount payable under the Purchase Agreement in
a foreign currency; and
(xvi) a judgment duly obtained in a foreign court should, subject to the
permission of the relevant Minister in terms of The Protection of
Businesses Act, No. 99 of 1978 (as amended), be enforceable in the
Republic of South Africa in accordance with the ordinary procedures
applicable under South African law for the enforcement of foreign
judgments; provided that (i) the judgment was final and conclusive; (ii)
not obtained by fraud; (iii) is not in any manner contrary to the
principles of natural justice; (iv) the enforcement thereof was not
contrary to public policy; (v) the foreign court in question had
jurisdiction and competence according to the applicable laws on conflict
of laws, (vi) a foreign judgment will probably not be recognized in
South Africa if the foreign court exercised jurisdiction over the
defendant solely by virtue of an attachment to find jurisdiction or on
the basis of domicile alone, and (vii) the South African courts will not
enforce foreign revenue and penal laws.
(xvii) the Company has an authorized capitalization as set forth in the
Offering Memorandum, and all of the outstanding Ordinary Shares of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
(xviii) the descriptions in the Offering Memorandum of statutes, legal and
governmental proceedings and contracts and other documents are accurate
in all material respects; the statements in the Offering Memorandum
under the heading "Certain Federal Income Tax Consequences", to the
extent that they constitute summaries of matters of South African law or
regulation or legal conclusions, have been reviewed by such counsel and
fairly summarize the matters described therein in all material respects;
(xix) to the knowledge of such counsel, there are no pending actions or suits
or judicial, arbitral, rule-making, administrative or other proceedings
to which the Company or any of its subsidiaries is a party or of which
any property or assets of the Company or any of its subsidiaries is the
subject which (A) singularly or in the aggregate, if determined
adversely to the Company or any of its subsidiaries could reasonably be
expected to have a material adverse effect to the best knowledge of such
counsel, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
Page 45
(xx) except as disclosed in the Offering Memorandum and the audited annual
financial statements of the Company, no assets of the Company or any of
its South African Material Subsidiaries is subject to any mortgages,
security interests, pledges, liens or encumbrances.
Page 46
SCHEDULE C
OPINION OF U.S. COUNSEL TO THE COMPANY
(i) Each of the Indenture, Purchase Agreement and Registration Rights
Agreement are valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganisation, moratorium and other similar laws
affecting the enforcement of creditor's rights generally and by general
equitable principles;
(ii) when the Notes to be issued by the Company under the Indenture are
executed by the Company and authenticated by the Trustee in accordance
with the Indenture and delivered to the Initial Purchaser against
payment therefor in accordance with the terms of this Agreement and the
Indenture, the Notes will be valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent conveyance, reorganisation, moratorium and other
similar laws affecting the enforcement of creditor's rights generally
and by general equitable principles, and will be entitled to the
benefits of the Indenture; and the Notes conform in all material
respects to the description thereof in the Offering Memorandum;
(iii) the execution and delivery by the Company of, and the performance by the
Company of its obligations under each of the Indenture, Purchase
Agreement and Registration Rights Agreement to the best of our knowledge
(it being recorded that we are not required to make any independent
investigation in order to establish such knowledge), and the issuance
and delivery of the Notes to be delivered pursuant to the Purchase
Agreement, will not contravene any provision of applicable U.S. law;
provided, that such counsel is not required to opine on the
qualification of the Indenture under applicable law or the obligations
of the Company with respect to the registration statement to be filed
under the Registration Rights Agreement;
(iv) the choice of law provision set forth in the Indenture, Purchase
Agreement and Registration Rights Agreement will be recognized by
New
York courts subject to all applicable pleading requirements; the
irrevocable submission by the Company to the jurisdiction of any state
or federal court in the United States in any action arising out of or
based upon the Indenture, Purchase Agreement or Registration Rights
Agreement or the transactions contemplated hereby, the waiving by the
Company of any objection to the venue of any such action in any
Page 47
such court and the agreement of the Company that the Indenture, Purchase
Agreement and Registration Rights Agreement shall be governed and
construed in accordance with the laws of the State of New York, are
legal, valid and binding in the State of New York;
(v) no consent, approval, authorization, license, registration, or
qualification or order of any federal or New York court or governmental
agency or regulatory body is required for the due authorization,
execution, delivery or performance by the Company of its obligations
under the Purchase Agreement, the Indenture, the Registration Rights
Agreement or the Securities except such as may be required by the
securities or Blue Sky laws of the various states in connection with the
offer and sale of the Securities (except, other than as set forth in
paragraph (viii) below, we give no opinion as to registration of the
Securities under the Securities Act and the qualification of the
Indenture under the Trust Indenture Act of 1939, as amended);
(vi) the Company is not an "investment company" or an entity controlled by an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended;
(vii) the statements in the Offering Memorandum under the caption "Certain
Income Tax Consequences" insofar as such statements constitute a summary
of the United States federal tax laws referred to therein, fairly
summarize the matters referred to therein in all material respects; and
assuming (i) the Initial Purchaser is a "qualified institutional buyer"
within the meaning of Rule 144A of the Securities Act and (ii) the
accuracy of the representations and warranties and compliance with the
agreements of the Company in Section 6(x) of the Purchase Agreement and
of the Initial Purchaser in Section 7 of the Purchase Agreement, it is
not necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchaser under the Purchase Agreement or in
connection with the initial resale of the Securities by the Initial
Purchaser in accordance with Section 7 of the Purchase Agreement and the
Offering Memorandum to register the Securities under the Act, or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended,
it being understood that no opinion is expressed as to any subsequent
resale of any of the Notes or the Ordinary Shares or ADRs issuable upon
conversion of any of the Notes.
Page 48
SCHEDULE D
M.M. Wellesley-Wood
I.L. Xxxxxx
X.X. Coetzee
X.X. Xxxxx
X.X. Xxxxxxxx
X. Xxxxxxx
X.X. Xxxx
M.P. Ncholo
B. Beer
X. Xxxxxx
X. Xxxxx
E. de Beer
X. X. Xxxxxx
M. A. Eloff
X. Xxxxxx
X. Xxxxxx
X. Xxxxxx
D. vanden Xxxxx
Page 49
SCHEDULE E
The net proceeds of approximately US$57 million from the sale of the Notes will
be used as follows: US$15 million for capital expenditure to upgrade and improve
the Company's metallurgical plants and expand the Company's mining operations,
approximately US$15 million for the acquisition of gold producing businesses or
companies, approximately US$15 million for mining exploration and resource
evaluation in South Africa including the Argonaut Project, approximately US$8
million for capital expenditures designed to reduce administrative and
protection costs and the remainder for general corporate purposes involving
working capital.
