PORCUPINE JOINT VENTURE AGREEMENT
MADE AS OF JULY 1, 0000
XXXXXXX
XXXXXX DOME (CLA) LIMITED
- AND -
KINROSS GOLD CORPORATION
PORCUPINE JOINT VENTURE AGREEMENT
THIS AGREEMENT is made as of July 1, 2002
BETWEEN:
PLACER DOME (CLA) LIMITED, a corporation amalgamated under the
laws of Canada,
("PLACER")
- AND -
KINROSS GOLD CORPORATION, a corporation amalgamated under the
laws of Ontario,
("KINROSS")
RECITALS:
A. WHEREAS pursuant to the Asset Exchange Agreement executed as a step in
implementing the joint venture described herein, Placer transferred to
Kinross an undivided 49% interest in the Placer Assets and Kinross
transferred to Placer an undivided 51% interest in the Kinross Assets in
consideration of, among other things, the assumption by Kinross and
Placer respectively of an equivalent percentage of certain of the
liabilities and obligations associated with the Placer Assets and
Kinross Assets, all in accordance with the terms of the Asset Exchange
Agreement;
B. AND WHEREAS the Parties have agreed to form a joint venture to conduct
mining and milling operations on, in, under and with the Placer Assets
and the Kinross Assets and within the Development Area (as defined
herein), including exploration, development, construction, mining,
milling, processing and other operations relating to mining and milling
in accordance with good mining practice and having regard to optimizing
production from the Placer Assets and the Kinross Assets for the mutual
benefit of each of Placer and Kinross, all on the terms and conditions
set out in this Agreement.
NOW THEREFORE, the parties agree as follows:
ARTICLE 1
DEFINITIONS AND PRINCIPLES OF INTERPRETATION
1.1 DEFINITIONS
Whenever used in this Agreement, the following words and terms have the meanings
set out below:
"ACCOUNTING PROCEDURE" means the procedures set forth in
Schedule B.
"ADDITIONAL RIGHTS" means any right, title or interest in or to
a property, including to explore or mine, or both, and including
any royalty interest, any part of which property is located
within the Development Area and which right, title or interest
has been offered to or acquired by a Party and which has been
offered by that Party and accepted by the other Party to become
subject to the terms of this Agreement.
"AFFILIATE" of any Person means, at the time such determination
is being made, any other Person controlling, controlled by or
under common control with such first Person, where "CONTROL"
means the possession, directly or indirectly, of the power to
direct the management and policies of a Person whether through
the ownership of voting securities or otherwise.
"AGREEMENT" means this agreement, including all schedules, and
all amendments or restatements as permitted, and references to
"Article" or "Section" mean the specified Article or Section of
this Agreement.
"ASSET EXCHANGE AGREEMENT" means the Asset Exchange Agreement
dated the date hereof pursuant to which Placer transferred to
Kinross and Kinross acquired and assumed an undivided 49%
interest in the Placer Assets and certain related liabilities
and obligations and Kinross transferred to Placer and Placer
acquired and assumed an undivided 51% interest in the Kinross
Assets and certain related liabilities and obligations.
"BUDGET" means a detailed estimate of all costs to be incurred
and expenditures to be made by the Parties with respect to a
Program and a schedule of cash advances to be made by the
Parties.
"BUSINESS DAY" means any day, other than a Saturday or Sunday,
or a statutory or civic holiday in Xxxxxxx, Xxxxxxx.
"CONTINUING OBLIGATION" means an obligation, liability or
responsibility that is reasonably expected to continue or arise
after Operations on a particular area of the Properties has
ceased or is suspended, or an obligation, liability or
responsibility assumed by the Joint Venture on the Effective
Date, including for example, future monitoring, stabilization,
reclamation, rehabilitation or restoration requirements under
Laws, or pursuant to the instruments of title under which the
Properties are held.
"CONTINUING PARTY" means a party that has a Participating
Interest or has acquired all or any part of the Participating
Interest of a Party pursuant to this Agreement.
"CONTROL INTEREST" means an interest which allows the holder to
direct or cause the direction of the management and policies of
a Party or Affiliate through the legal or beneficial ownership
of voting securities, or the right to appoint directors or
management, through contract, voting trust, or otherwise.
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"DEVELOPMENT" means preparation for Mining, including definition
drilling, test mining, mine feasibility studies and such other
work.
[Deleted Text]
"EFFECTIVE DATE" means the date set out on page 1 of this
Agreement.
"ENCUMBRANCE" means a security interest, mortgage, deed of
trust, pledge, lien, net profits interest, royalty, overriding
royalty interest, other payment out of production, or other
encumbrance of a similar nature.
"EXPENDITURES" for all purposes of this Agreement means all
moneys expended in connection with the Joint Venture Assets by a
Party authorized to do so by the terms of this Agreement (an
"Authorized Party") in prospecting, exploration, development,
preproduction, mining, processing, closing, reclamation and
rehabilitation work on or in connection with the Properties or
any part of them. Without limiting the generality of the
foregoing, Expenditures shall include all direct and indirect
charges as described in Sections II and III of the Accounting
Procedure and shall include moneys spent by an Authorized Party
in acquiring and maintaining Surface Rights and acquiring
Additional Rights, as necessary, in constructing, maintaining
and operating roads, trails and bridges upon or across the
Properties or other lands for the purpose of having convenient
access to the Properties; and in mining, prospecting, exploring,
developing, de-watering, sampling, examining, diamond drilling,
testing and metallurgical work of all types; for geophysical,
geological and other surveys; reasonable costs and expenses
connected with feasibility studies (whether prepared by persons
who are associated with a Party or on an arms' length basis) and
for buildings, equipment, plant and supplies for the Properties
including reasonable supervision, office and travelling
expenses, workers' compensation assessments, unemployment
insurance premiums, fire and other insurance premiums, taxes,
goods and services taxes, rents, license fees and all other
payments necessary to keep the Joint Venture Assets in good
standing; and all other expenses ordinarily expended in
exploring, developing, operating, closing and reclaiming or
rehabilitating a mining and/or exploration property, including
an indirect charge for administration and overhead in accordance
with the Accounting Procedure.
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The certificate of an officer of the Authorized Party which has
expended Expenditures in connection with the Properties shall be
accepted as PRIMA FACIE evidence of the making of Expenditures.
"EXPLORATION" means all activities directed toward ascertaining
the existence, location, quantity, characteristics, quality or
commercial value of deposits of Products.
"FEASIBILITY STUDY" means a written report commissioned by the
Management Committee which satisfies the criteria set forth in
Schedule D and a "FAVOURABLE FEASIBILITY STUDY" shall be such a
Feasibility Study that recommends all or part of the Properties
be brought into mineral production.
"GOVERNMENTAL AUTHORITY" means any government, regulatory
authority, governmental department, agency, commission, bureau,
official, minister, Crown corporation, court, board, tribunal,
dispute settlement panel or body or other law, rule or
regulation-making entity:
(a) having jurisdiction on behalf of any nation, province,
state or other geographic or political subdivision
thereof; or
(b) exercising, or entitled to exercise any administrative,
executive, judicial, legislative, policy, regulatory or
taxing authority or power.
"INITIAL CONTRIBUTION" means the contribution that each Party is
deemed to have made on the formation of the Joint Venture as
described in Section 4.1.
"JOINT ACCOUNT" means the account maintained in accordance with
the Accounting Procedure showing the charges and credits
accruing to the Parties after formation of the Joint Venture.
"JOINT VENTURE" means the operating joint venture with respect
to the Joint Venture Assets established pursuant to Section 3.1.
"JOINT VENTURE ASSETS" means all of the Placer Assets and all of
the Kinross Assets, including the Properties, the Products and
all other real and personal property, tangible and intangible,
including rights under agreements with Governmental Authorities
relating to the Properties and the Mine and Plant held for the
benefit of the Parties hereunder and all rights, title and
interest in and to any property, real or personal, within the
Development Area that become subject to the Joint Venture in
accordance with the terms of this Agreement.
"KINROSS ASSETS" means all of the assets located within the
Development Area owned by Kinross or an Affiliate of Kinross on
the Effective Date or in which Kinross or an Affiliate of
Kinross had a right, title or interest, or had possession or use
of, on the Effective Date, in which an undivided 51% interest
was acquired by Placer pursuant to the Asset Exchange Agreement,
all of which have been
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contributed to the Joint Venture by Kinross and Placer in
proportion to their Participating Interests therein.
"LAWS" means applicable laws (including common law), statutes,
by-laws, rules, regulations, orders, ordinances, protocols,
codes, guidelines, treaties, policies, notices, directions,
decrees, rulings and judicial, arbitral, administrative,
ministerial or departmental judgements, awards or requirements
of any Governmental Authority.
"MANAGEMENT COMMITTEE" means the committee established under
Section 6.1.
"MANAGER" means the Person appointed from time to time under
Article 7 to manage Operations, or any successor thereof.
"MINE AND PLANT" means the existing mining facilities comprising
the Kinross Assets and Placer Assets, including the Hoyle Pond
Mine and Xxxx Creek Mill and the Dome Mine and Mill, and any
mining facilities constructed and equipment and supplies
purchased in accordance with a mining Program and Budget and any
approved expansion or modification of mining Programs and
Budgets.
"MINING" means the mining, extracting, producing, handling,
milling or other processing of Products and the ancillary
activities associated therewith. "NON-CONSENT PROGRAM" has the
meaning given to it in Section 5.3.
"NON-MANAGER" means a Party that is not the Manager.
"NSR ROYALTY" means the vested net smelter returns royalty which
may become payable to a Party pursuant to Section 5.6(a), which
vested net smelter returns royalty shall comprise an interest
in, bind, run with and touch the Properties and be defined and
payable as provided in Schedule C attached hereto.
"OPERATIONS" means the exploration, development, mining, mine
reclamation or rehabilitation and other activities carried out
or to be carried out under this Agreement.
"PARTY" and "PARTIES" means Placer and Kinross, and their
respective successors or assigns.
"PARTICIPATING INTEREST" means the percentage interest
representing the ownership interest as a tenant in common of a
Party who is not a Royalty Holder, in and to the Joint Venture
and the Joint Venture Assets and in and to all other rights and
obligations arising under this Agreement, as such interest may
from time to time be adjusted hereunder. Participating Interests
shall be calculated to three decimal places and rounded to two
(e.g., 1.519% rounded to 1.52%). Decimals of .005 or more shall
be rounded up to .01, decimals of less than .005 shall be
rounded down. The initial Participating Interests of the Parties
upon the formation of the Joint Venture are set forth in Section
5.1.
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"PERSON" means any individual, sole proprietorship, partnership,
firm, entity, unincorporated association, unincorporated
syndicate, unincorporated organization, trust, body corporate,
Governmental Authority, and where the context requires any of
the foregoing when they are acting as trustee, executor,
administrator or other legal representative.
"PLACER ASSETS" means all of the assets located within the
Development Area owned by Placer or an Affiliate of Placer on
the Effective Date or in which Placer or an Affiliate of Placer
had a right, title or interest, or had possession or use of, on
the Effective Date, in which an undivided 49% interest was
acquired by Kinross pursuant to the Asset Exchange Agreement,
all of which have been contributed to the Joint Venture by
Placer and Kinross in proportion to their Participating
Interests therein.
"PRIME RATE" means, at any time, the rate of interest expressed
as an annual rate, established by Canadian Imperial Bank of
Commerce at its main office in Toronto, Ontario as its reference
rate of interest to determine the interest rates it will charge
for loans in Canadian dollars to Canadian customers, adjusted
automatically with each quoted or published change in such rate,
all without the necessity of any notice to its borrowers or any
other person.
"PRODUCTS" means all ores, minerals and mineral resources and
by-products thereof produced from the Properties under this
Agreement including, without limitation, refined gold.
"PROGRAM" means a description in reasonable detail of Operations
to be conducted and objectives to be accomplished by the Manager
on behalf of the Joint Venture for a calendar year or any longer
period as determined by the Management Committee.
"PROJECT FINANCING" means any financing approved by the
Management Committee and obtained by the Parties for the purpose
of placing a mineral deposit situated on the Properties into
commercial production, but shall not include any such financing
obtained individually by any Party to finance payment or
performance of its obligations under this Agreement.
"PROPERTIES" means all real property located within the
Development Area which at the Effective Date either Party or any
Affiliate of either Party owns, leases or is the registered or
recorded holder of, has possession or use of, or has a
contractual or other right, title or interest in and to or in
respect of the mineral production therefrom, together with any
Additional Rights in land or contractual or other right, title
or interest in and to real property, or the mineral production
therefrom, subsequently acquired by a Party or any Affiliate of
either Party within the Development Area, including, without
limitation, the real property listed in Schedule A-Part 1.
"ROYALTY HOLDER" has the meaning given to it in Section 5.6.
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"SURFACE RIGHTS" means any ownership of or rights to enter, use
and occupy the surface area of the lands described by the
Properties or other surface areas useful in connection with
Operations under this Agreement and held from time to time
hereunder.
"TAX ACT" means the INCOME TAX ACT (Canada), as amended.
"TRANSFER" means sell, grant, assign, arrange for substitute
performance by an Affiliate or third party, encumber, pledge,
surrender, abandon or otherwise convey, commit or dispose of and
the word used as a noun shall have a corresponding meaning.
1.2 CERTAIN RULES OF INTERPRETATION
In this Agreement:
(a) CONSENT - Whenever a provision of this Agreement requires an
approval or consent and such approval or consent is not
delivered within the applicable time limit, then, unless
otherwise specified, the Party whose consent or approval is
required shall be conclusively deemed to have withheld its
approval or consent.
(b) CURRENCY - Unless otherwise specified, all references to money
amounts are to the lawful currency of the United States of
America.
(c) GOVERNING LAW - This Agreement is a contract made under and
shall be governed by and construed in accordance with the laws
of the Province of Ontario and the federal laws of Canada
applicable in the Province of Ontario.
(d) HEADINGS - Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
(e) INCLUDING - Where the word "including" or "includes" is used in
this Agreement, it means "including (or includes) without
limitation".
(f) NO STRICT CONSTRUCTION- The language used in this Agreement is
the language chosen by the Parties to express their mutual
intent, and no rule of strict construction shall be applied
against any Party.
(g) NUMBER AND GENDER - Unless the context otherwise requires, words
importing the singular include the plural and vice versa and
words importing gender include all genders.
(h) SEVERABILITY - If, in any jurisdiction, any provision of this
Agreement or its application to any Party or circumstance is
restricted, prohibited or unenforceable, such provision shall,
as to such jurisdiction, be ineffective only to the extent of
such restriction, prohibition or unenforceability without
invalidating the
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remaining provisions of this Agreement and without affecting the
validity or enforceability of such provision in any other
jurisdiction or without affecting its application to other
Parties or circumstances.
(i) STATUTORY REFERENCES - A reference to a statute includes all
regulations made pursuant to such statute and, unless otherwise
specified, the provisions of any statute or regulation which
amends, supplements or supersedes any such statute or any such
regulation.
(j) TIME - Time is of the essence in the performance of the Parties'
respective obligations.
(k) TIME PERIODS - Unless otherwise specified, time periods within
or following which any payment is to be made or act is to be
done shall be calculated by excluding the day on which the
period commences and including the day on which the period ends
and by extending the period to the next Business Day following
if the last day of the period is not a Business Day.
1.3 KNOWLEDGE
Any reference to the knowledge of any Party shall mean to the best of the
knowledge, information and belief of such Party after reviewing all relevant
records and making due inquiries regarding the relevant matter of all relevant
directors, officers and employees of the Party.
1.4 ENTIRE AGREEMENT
This Agreement and those provisions of the Asset Exchange Agreement which
survive the completion of the transactions therein in accordance with its terms,
and the agreements and other documents required to be delivered pursuant to this
Agreement, constitute the entire agreement between the Parties and set out all
the covenants, promises, warranties, representations, conditions, understandings
and agreements between the Parties pertaining to the subject matter of this
Agreement and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written. There are no covenants, promises,
warranties, representations, conditions, understandings or other agreements,
oral or written, express, implied or collateral between the Parties in
connection with the subject matter of this Agreement except as specifically set
forth in this Agreement or any document required to be delivered pursuant to
this Agreement or in those provisions of the Asset Exchange Agreement which
survive the completion of the transactions therein in accordance with its terms.
1.5 SCHEDULES
The schedules to this Agreement, as listed below, are an integral part of this
Agreement:
[Deleted Text]
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[Deleted Text]
ARTICLE 2
REPRESENTATIONS, WARRANTIES AND COVENANTS
2.1 CAPACITY
Each of the Parties represents and warrants to the other Party the matters set
out below and acknowledges the other Party is relying upon all such
representations and warranties for the purposes of this Agreement:
(a) it is a corporation incorporated, continued or amalgamated under
the laws of the jurisdiction of its incorporation, continuation
or amalgamation, as the case may be, and it is duly organized
and existing under such laws and is in good standing and
qualified to own, lease or hold its properties and to carry on
business in the Province of Ontario;
(b) it has all necessary corporate power, authority and capacity to
enter into and perform its obligations under this Agreement, and
all corporate and other actions required to authorize it to
enter into and perform its obligations under this Agreement have
been properly taken;
(c) it is not a party to, bound or affected by or subject to any
agreement, instrument, charter or by-law provision or Law that
would be violated, contravened or breached by entering into or
performing under this Agreement;
(d) the execution and delivery of this Agreement and the carrying
out of or participation in the transactions contemplated herein
will not give to any other person, after the giving of notice or
otherwise, any right of first refusal, or any right of
termination, cancellation or acceleration in or with respect to
any agreement or other instrument to which it is a party, is
subject, or derives benefit, or by which any of the Placer
Assets or the Kinross assets, as the case may be, are bound or
affected, save and except as the Parties have been made aware
and have agreed to accept as set forth in the Asset Exchange
Agreement;
(e) this Agreement has been duly executed and delivered by it and is
valid, binding and enforceable against it in accordance with its
terms, subject, however, to limitations on enforcement imposed
by bankruptcy, insolvency, reorganization or other laws
affecting the enforcement of the rights of creditors and others
and to
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the extent that equitable remedies such as specific performance
and injunctions are only available in the discretion of the
court from which they are sought; and
(f) it is not an insolvent person within the meaning of the
BANKRUPTCY AND INSOLVENCY ACT (Canada) and will not become an
insolvent person as a result of entering into this Agreement or
the Joint Venture.
2.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties in this Agreement shall survive the execution
and delivery of this Agreement for the term of the Joint Venture.
2.3 ENCUMBRANCES AND OTHER AGREEMENTS
Without the prior consent of the other Party, except as otherwise permitted by
this Agreement, neither Party will enter into new agreements or instruments
creating an Encumbrance on or affecting the Joint Venture Assets or amend or
modify any agreements or instruments affecting the Joint Venture Assets that
exist as of the Effective Date.
2.4 INDEMNITIES
(a) Each Party shall indemnify each other Party, its officers,
directors, agents, employees and its Affiliates (collectively,
the "Indemnified Party") from and against any Material Loss. A
"Material Loss" shall mean all costs, expenses, damages or
liabilities, including lawyers' fees and other costs of
litigation (either threatened or pending) arising out of or
based on a material breach by a Party ("Indemnifying Party") of
any representation, warranty or covenant contained in this
Agreement. A Material Loss shall be deemed to have occurred if,
in the aggregate, an Indemnified Party incurs losses, costs,
damages or liabilities in excess of [Deleted Text] relating to
breaches of the warranties, representations and covenants set
out in this Agreement.
Upon the occurrence of a Material Loss the Indemnifying Party
will be liable for the aggregate amount of the Material Loss,
including the first [Deleted Text] of the Material Loss, and for
any subsequent claims for indemnity under this Section,
regardless of the amount of the claim, up to a maximum aggregate
liability equal to the amount of the Party's deemed initial
contributions set forth in Section 4.1.
(b) If any claim or demand is asserted against an Indemnified Party
in respect of which such Indemnified Party may be entitled to
indemnification under this Agreement, written notice of such
claim or demand shall promptly be given to the Indemnifying
Party. The Indemnifying Party shall have the right, but not the
obligation, by notifying the Indemnified Party within thirty
(30) days after its receipt of the notice of the claim or
demand, to assume the entire control of (subject to the right of
the Indemnified Party to participate, at the Indemnified Party's
expense and with counsel of the Indemnified Party's choice) the
defence,
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compromise or settlement of the matter. Any damages to the
assets or business of the Indemnified Party caused by a failure
by the Indemnifying Party to defend, compromise, or settle a
claim or demand in a reasonable and expeditious manner, after
the Indemnified Party has given notice of such claim, shall be
included in the damages for which the Indemnifying Party shall
be obligated to indemnify the Indemnified Party. Any settlement
or compromise of a matter by the Indemnifying Party shall
include a full release of claims against the Indemnified Party
which have arisen out of the claim or demand for which
indemnification is sought.
ARTICLE 3
NATURE OF RELATIONSHIP
3.1 FORMATION OF JOINT VENTURE AND APPOINTMENT OF MANAGER
An operating joint venture with respect to the Joint Venture Assets is hereby
formed between the Parties as of the Effective Date. The Joint Venture shall be
named the "Porcupine Joint Venture". Placer shall be the initial Manager of the
Joint Venture with the rights, duties and obligations provided under this
Agreement, and each Party shall have the Participating Interest set out opposite
its name in Section 5.1.
3.2 PURPOSES
The Joint Venture is formed for the following purposes and shall serve as the
means by which the Parties accomplish such purposes:
(a) to engage in Mining on the Joint Venture Assets;
(b) to conduct Exploration on the Properties;
(c) to evaluate the possibilities for and, if justified, to engage
in the Development or further Development and Mining of the
Joint Venture Assets;
(d) to engage in and conduct Operations on the Properties;
(e) to engage in the removal of Products from the Properties;
(f) to complete and satisfy all environmental compliance, mine
reclamation or rehabilitation and Continuing Obligations
affecting the Properties; and
(g) to perform any other activity necessary, appropriate or
incidental to any of the foregoing,
all in accordance with good mining practice and having regard to optimizing the
production from the Placer Assets and the Kinross Assets for the mutual benefit
of each of Placer and Kinross.
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3.3 LIMITATION
Unless the Parties otherwise agree in writing, the purposes of the Operations
shall be limited to those described in Section 3.2, and nothing in this
Agreement shall be construed to enlarge such purposes or to change the
relationship of the Parties as set forth in Section 18.8.
3.4 TERM
The term of this Joint Venture and this Agreement shall be from 12:01 a.m. on
the Effective Date and for so long thereafter as Products are produced from the
Joint Venture Assets or there remain statutory or other Continuing Obligations
of the Joint Venture required by law to be fulfilled to a maximum term of 99
years, unless the Agreement is earlier terminated as herein provided or extended
by the mutual written agreement of the Parties.
ARTICLE 4
CONTRIBUTIONS BY PARTIES
4.1 DEEMED INITIAL CONTRIBUTIONS
As of the Effective Date, each Party shall be deemed to have contributed and
expended the aggregate Expenditures hereunder set out opposite its name:
(a) Placer - [Deleted Text]
(b) Kinross - [Deleted Text]
4.2 DISREGARD OF OTHER EXPENSES
All other expenses incurred by a Party, paid or unpaid, prior to the Effective
Date shall be ignored for the purposes of calculating the Parties' Initial
Contributions under this Agreement and shall not qualify as Expenditures under
this Agreement.
4.3 ADDITIONAL CASH CONTRIBUTIONS
Subject to election permitted by Section 5.3, the Parties shall be obligated to
contribute funds from time to time to adopted Programs and Budgets in proportion
to their respective Participating Interests and such contributed funds shall be
used in any recalculations of Participating Interests from time to time made
under and in accordance with this Agreement.
ARTICLE 5
INTERESTS OF PARTIES
5.1 INITIAL PARTICIPATING INTERESTS
Immediately upon the Effective Date, each Party shall have the initial
Participating Interest set out below opposite its name:
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(a) Placer 51%
(b) Kinross 49%
All costs and liabilities of the Joint Venture, including the liabilities
associated with the Placer Assets and the Kinross Assets which were assumed by
the Joint Venture on the Effective Date (including any severance liabilities for
employees terminated after the Effective Date) and all liabilities incurred in
Operations, shall be borne and paid, and all Joint Venture Assets acquired and
Products mined by virtue of the Operations shall, notwithstanding the registered
or recorded titleholder or the named or noted person entitled to the benefit of
or subject to the obligations under any Joint Venture Assets, be owned and held
by or for the benefit of such Parties, as tenants in common, and such Parties
shall have the rights of an owner to share in all mineral production and all
other income and rights derived from the Joint Venture Assets, and such Parties
shall have the obligations of an owner to fulfill and perform, to accept and be
liable for all liabilities, in particular all environmental liabilities and all
royalty liabilities, joint venture or earn in obligations related to the Joint
Venture Assets existing upon the Effective Date or which arise from and after
the Effective Date, including all income, proceeds or compensation derived from
or related to the use, sale or other disposition of any of the Joint Venture
Assets, in accordance with their respective Participating Interests, as such
Participating Interests may change from time to time in accordance with the
provisions of this Agreement.
5.2 CHANGES IN PARTICIPATING INTERESTS
[Deleted Text]
(e) [Deleted Text]
5.3 VOLUNTARY REDUCTION IN PARTICIPATION
[Deleted Text]
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[Deleted Text]
5.4 ACCELERATED REDUCTION IN PARTICIPATION
[Deleted Text]
5.5 DEFAULT IN MAKING CONTRIBUTIONS
[Deleted Text]
5.6 ELIMINATION OF MINORITY INTEREST
[Deleted Text]
(b) [Deleted Text]
5.7 CONTINUING LIABILITIES UPON ADJUSTMENTS OF PARTICIPATING
INTERESTS
Any reduction of a Party's Participating Interest under this Article shall not
relieve such Party of its share of any liability, whether it accrues before or
after such reduction, arising out of Operations conducted prior to such
reduction or arising from liabilities assumed by the Joint Venture on the
Effective Date. For purposes of this Article, such Party's share of such
liability shall be equal to its Participating Interest at the time such
liability was assumed (in the case of liabilities which existed on the Effective
Date) or at the time of the action giving rise to such liability (in the case of
the liabilities which arose after the Effective Date). The increased
Participating Interest accruing to a Party as a result of the reduction of the
other Party's Participating Interest shall be free of Encumbrances arising by,
through or under such other Party, other than those existing at the time the
Properties were acquired by, or contributed to, the Joint Venture or those to
which both Parties have given their written consent. An adjustment to a
Participating Interest need not be evidenced during the term of this Agreement
by the execution and recording of appropriate instruments, but each Party's
Participating Interest shall be shown in the books of the Manager. However,
either Party, at any time upon the request of the other Party, shall execute and
acknowledge instruments necessary to evidence such adjustment in form sufficient
for recording in the jurisdiction where the Properties are located.
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5.8 RECORDING OF PARTICIPATING INTERESTS AND CHANGES
Title to the Joint Venture Assets will be recorded in the name of both Parties
or as the Parties may otherwise agree. The Participating Interest of each Party
in the Properties shall not be evidenced by the recording of appropriate
instruments. Rather, the initial Participating Interests of each Party and
changes thereto shall be shown and maintained in the records of the Manager.
However, each Party at any time may request that the other Party execute and
deliver appropriate instruments in recordable or registrable form, as the case
may be, to evidence or transfer to it, its Participating Interest.
Notwithstanding the foregoing, all Joint Venture Assets and all obligations and
liabilities arising out of or in connection with the Joint Venture Assets or any
Operations hereunder shall, notwithstanding the registered or recorded
titleholder or the named or noted person entitled to the benefit of or subject
to the obligations under any such Joint Venture Assets, including without
limitation, any Property, contract, agreement, bank account, licence, permit or
authorization, be held in trust for and to the benefit or account of the Parties
in accordance with their respective Participating Interests, as such
Participating Interests may change from time to time in accordance with the
provisions of this Agreement.
5.9 RIGHT OF SET-OFF
If after the Effective Date it is agreed by the Parties that one Party owes an
amount to the other Party as a result of the consummation of the transactions
contemplated by the Asset Exchange Agreement, the Party which is owed the money
will be entitled to set off the amount owed to it by a reduction in the amount
payable by it in response to the next following cash call by the Manager under
Section 9.2, and by a corresponding increase in the amount of the next cash call
payable by the other Party. If the Party which has agreed to pay the increased
cash call defaults in making the contribution when required to do so, it will
constitute a default in respect of the increased amount of the cash call and
will be a default to which Section 5.3 applies.
ARTICLE 6
MANAGEMENT COMMITTEE
6.1 ORGANIZATION AND COMPOSITION
The Parties hereby establish a Management Committee to determine overall
policies, objectives, procedures, methods and actions under this Agreement. The
Management Committee shall consist of two members. So long as it holds at least
a 25% Participating Interest, each Party shall appoint one member as the
representative of such Party (a "Nominee"), and may appoint an alternate to act
as Nominee in the absence of a regular Nominee. Any alternate so acting shall be
deemed to be a Nominee. Initial appointments shall be made in writing and shall
contain telephone and fax numbers of the appointed Nominees. Subsequent
appointments shall be made or changed by notice to the other Party prior to the
meeting at which the Nominee is to act. The actions of a Party's appointed
Nominee shall bind the Party who made the appointment.
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6.2 DECISIONS
(a) Each Party, acting through its appointed Nominee, shall have
votes on the Management Committee equal to that Party's
Participating Interest. Unless otherwise provided in this
Article, the vote of the Party with the Participating Interest
in excess of 50% shall determine the decisions of the Management
Committee.
(b) If a matter for decision does not receive the approval of the
Party holding a Participating Interest in excess of 50% and the
Parties are deadlocked, then, other than in respect of those
matters set out in Section 6.2(c), the deadlock shall be
resolved by decision of the Manager who shall have a second or
casting vote.
(c) The following decisions of the Management Committee require the
approval of the Nominees of both Parties to that Committee:
(i) termination of the Joint Venture;
(ii) the cessation of Operations for a period exceeding 120
consecutive days, other than as a result of an event of
force majeure;
(iii) the re-commencement of Operations after a cessation
referred to in (ii), other than as a result of an event
of force majeure;
[Deleted Text]
(v) the disposition of any assets, rights, liabilities or
obligations of the Joint Venture not in the ordinary
course of the business of the Joint Venture and having a
value in excess of $5 million;
(vi) any change in the Manager (including subcontracting the
role of manager) of the Joint Venture, other than to an
Affiliate of Placer (provided such affiliate is a direct
or indirect wholly-owned subsidiary of Placer Dome Inc.
and provided that Placer shall covenant to make
available to such Affiliate the employees, assets and
technical knowledge of Placer which are necessary to
enable such Affiliate to fully perform the duties and
obligations of Placer as Manager hereunder) and other
than a change as a result of Kinross' Participating
Interest becoming at least a 51% Participating Interest
in the Joint Venture and other than for any other reason
set out in Section 7.4; or
(vii) the approval of the occupational health and workplace
safety and environmental protection and compliance
policies and plans of the Management Committee.
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6.3 MEETINGS
The Management Committee shall hold regular meetings at least quarterly in
Toronto, or at another mutually agreed place. The Manager shall give 30 days
advance notice to the Parties of such meetings. Additionally, any Party may call
a special meeting upon 15 days notice to the Manager and the other Party. In
case of emergency, reasonable notice of a special meeting to consider the
emergency matter shall suffice. There shall be a quorum if at least one member
representing each Party holding at least a 25% Participating Interest is
present; provided, however that if a quorum is not present within 15 minutes of
the appointed time, then one member may adjourn the meeting to the same place
and time on any date not more than 30 days from the originally appointed date.
The member adjourning the meeting shall provide ten days advance notice to the
Parties of the date of any such adjourned meeting. At any such adjourned meeting
a quorum shall consist of one member without the requirement that a member or
alternate representing each Party be present. Each notice of a regular meeting
shall include an itemized agenda prepared by the Manager, in the case of a
regular meeting, or by the Party calling the meeting, in the case of a special
meeting, but any matters may be considered in any meeting with the consent of
all Parties. Either Party shall be reasonably entitled to have in addition to
its appointed Management Committee member, any other person in attendance at a
meeting, provided that only the appointed member shall be entitled to vote at
such meeting in accordance with the terms of this Agreement. The Manager shall
prepare minutes of all meetings and shall distribute copies of such minutes to
the Parties within 10 days after the meeting. Any revisions to the minutes of a
meeting must be provided to the Manager within 30 days after they are
distributed to the Parties, after which, if no revisions are requested, the
minutes will be deemed to have been approved and signed by both Parties. The
minutes, when signed or deemed signed by all Parties, shall be the official
record of the decisions made by the Management Committee and shall be binding on
the Manager and the Parties. If personnel employed in Operations are required to
attend a Management Committee meeting, reasonable costs incurred in connection
with such attendance shall be a charge to the Joint Account. All other costs
shall be paid by the respective Parties.
6.4 ACTION BY TELEPHONE MEETING
In addition to, or in lieu of, regular meetings the Management Committee may
hold conference telephone meetings (where the members representing each Party
can hear each other). Actions taken or authorized at any such meeting are as
effective as actions taken or authorized at regular meetings so long as all
decisions are immediately confirmed in writing (which includes confirmation by
facsimile) by the Party holding the requisite Participating Interests pursuant
to Section 6.2 to determine the decision of the Management Committee.
6.5 POLICIES AND PLANS
The Management Committee shall receive the policies and plans prepared by the
Manager under Section 7.2(q) and consider, adopt and cause to be implemented and
enforced appropriate policies and plans relating to occupational health and
workplace safety, sustainability, environmental protection and compliance or any
other matter as it shall deem appropriate or prudent relating to Operations and
Continuing Obligations. All such policies and plans shall be reviewed by the
Management Committee on an annual basis from and after adoption.
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6.6 MATTERS REQUIRING APPROVAL
Except as otherwise delegated to the Manager in Section 7.2, the Management
Committee shall have exclusive authority to determine all matters related to
overall policies, objectives, procedures, methods and actions under this
Agreement.
6.7 APPROVAL IN WRITING
Any matter which may be undertaken by the Management Committee may be approved
in writing if signed by all members of the Management Committee.
ARTICLE 7
MANAGER
7.1 APPOINTMENT
(a) The Parties hereby appoint Placer as the Manager with overall
management responsibility for Operations. Placer hereby agrees
to serve as the Manager until it resigns or is deemed to have
resigned as provided in Section 7.4 or is replaced as Manager
pursuant to Section 7.1(c).
(b) Placer may appoint its Affiliate to be the Manager, provided
that such Affiliate is Placer Dome Inc. or a direct or indirect
wholly-owned subsidiary of Placer Dome Inc., in which case
Placer will covenant to and in favour of the Continuing Parties
to provide and will provide such expertise and know-how to its
Affiliate in order for the Affiliate to fulfill its obligations
as Manager.
(c) Placer shall be entitled to continue to act as Manager for so
long as it and, or, its Affiliates maintain a Participating
Interest equal to or greater than that of the other Party.
Thereafter, the Party who has a Participating Interest equal to
or greater than that of the other Party at a particular time (as
determined pursuant to Article 5) shall be the Manager for so
long as it retains such Participating Interest. If, at any time,
the Participating Interest of the Manager should cease to be
equal to or greater than the Participating Interest of the other
Party, the Non-Manager, by notice in writing to the Manager
("Notice of Change of Manager"), shall be entitled to become the
Manager. If Notice of Change of Manager is given, the Party to
whom it is given shall turn over all documents and records and
assign the rights under all contracts and otherwise co-operate
and take all proper actions reasonably necessary to allow the
successor Manager to assume its duties and responsibilities
under this Agreement.
7.2 POWERS AND DUTIES OF MANAGER
Subject to the terms and provisions of this Agreement, the Manager shall have
the following powers and duties which shall be discharged in accordance with
adopted Programs and Budgets:
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(a) The Manager shall conduct, manage, direct and control
Operations, including Exploration, Development and Mining
Operations and Continuing Obligations, and shall prepare and
present to the Management Committee proposed Programs and
Budgets as provided in Article 8;
(b) The Manager shall implement the decisions, policies and plans of
the Management Committee, shall make all Expenditures necessary
to carry out adopted Programs and shall promptly advise the
Management Committee if it has not received sufficient funds to
carry out its responsibilities under this Agreement;
(c) The Manager shall use reasonable efforts to: (i) purchase or
otherwise acquire all materials, supplies, equipment, water,
utility and transportation services required for Operations,
such purchases and acquisitions to be made on the best terms
available, taking into account all of the circumstances; (ii)
obtain such customary warranties and guarantees as are available
in connection with such purchases and acquisitions; and (iii)
keep the Joint Venture Assets free and clear of all
Encumbrances, except for those existing at the time of, or
created concurrent with, the acquisition of such Joint Venture
Assets, or worker's, mechanic's or materialmen's or construction
liens which shall be released or discharged in a diligent
manner, or Encumbrances specifically approved by the Management
Committee;
(d) The Manager shall: (i) make or arrange for all payments required
by leases, licenses, permits, contracts and other agreements
related to the Joint Venture Assets; (ii) make royalty and/or
reimbursement of contributions payments to the Parties and third
parties required hereunder; (iii) pay all taxes, assessments and
like charges on Operations and Joint Venture Assets except taxes
determined or measured by a Party's sales revenue or net income;
(iv) provide information to assist the Parties with their
corporate tax filings; and (v) do all other acts reasonably
necessary to maintain the Joint Venture Assets. If authorized by
the Management Committee, the Manager shall have the right to
contest in the courts or otherwise, the validity or amount of
any taxes, assessments or charges if the Manager deems them to
be unlawful, unjust, unequal or excessive, or to undertake such
other steps or proceedings as the Manager may deem reasonably
necessary to secure a cancellation, reduction, readjustment or
equalization thereof before the Manager shall be required to pay
them, but in no event shall the Manager permit or allow title to
the Joint Venture Assets to be lost as the result of the
non-payment of any taxes, assessments or like charges;
(e) The Manager shall: (i) apply for and maintain all necessary
permits, licenses and approvals; (ii) comply with Laws; (iii)
promptly notify the Management Committee of any allegations of
substantial violation thereof; and (iv) prepare and file all
reports or notices required for or as a result of Operations.
The Manager shall not be in breach of this provision if a
violation has occurred in spite of the Manager's reasonable
efforts to comply and the Manager has timely cured or disposed
of such violation through performance or payment of fines and
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penalties; (f) The Manager shall prosecute and defend, but shall
not initiate without consent of the Management Committee, all
litigation or administrative proceedings arising out of
Operations;
(g) Until otherwise directed to be changed by resolution of the
Management Committee, the Parties shall each maintain in force
their respective insurance policies in effect on the Effective
Date until the expiry in accordance with their terms of Kinross'
property, boiler and machinery, and civil liability and motor
vehicle policies. The costs of such policies shall be to the
account of the Joint Venture from and after the Effective Date.
On the Effective Date each Party will provide to the other Party
a certificate or certificates of insurance amended to note the
other Party's interest in the Joint Venture Assets covered by
such Party's insurance policy or policies. The Manager will
arrange for the Joint Venture to obtain and maintain reasonable
insurance coverage in respect of its business, operations and
activities of a nature and to the extent customarily carried by
persons carrying on a similar undertaking, including such
coverage as affords reasonable protection to the Parties and the
Joint Venture, from all costs, losses, charges, damages or
expenses which may arise by reason of personal injury or death.
Unless a Party acquires additional insurance coverage as
described below in this subsection, the proceeds of a claim
under an insurance policy after the Effective Date will accrue
to the Joint Venture and not to the Party in whose name the
insurance is held. Either of the Parties may require that the
insurance coverage of the Joint Venture be increased, beyond
that approved by the Management Committee, provided that such
Party shall bear the cost of the increased coverage. In the
event of a claim for loss, any proceeds relating directly to
such increased coverage shall be payable to the Party bearing
the cost of same;
(h) The Manager may dispose of Joint Venture Assets, whether by
abandonment, surrender or Transfer in the ordinary course of
business, except that Properties may be abandoned or surrendered
only as provided in Article 12. Without prior authorization from
the Management Committee, the Manager shall not: (i) dispose of
Joint Venture Assets not in the ordinary course of the business
of the Joint Venture in any one transaction having a value in
excess of $ [Deleted Text] million; (ii) enter into any sales
contracts or commitments for Products; (iii) begin a liquidation
of the Joint Venture Assets; or (iv) dispose of all or a
substantial part of the Joint Venture Assets necessary to
achieve the purposes set forth in this Agreement;
(i) The Manager shall have the right to carry out its
responsibilities hereunder through agents, Affiliates or
independent contractors;
(j) The Manager shall perform or cause to be performed all
assessment and other work required by law in order to maintain
any unpatented mining claims that are or may become a part of
the Properties or Additional Rights. The Manager shall have the
right to perform the assessment work required hereunder pursuant
to a common plan of exploration and continued actual occupancy
of such claims and sites shall not be required. The Manager
shall not be liable on account of any
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determination by any court or governmental agency that the work
performed by the Manager does not constitute the required annual
assessment work or occupancy for the purposes of preserving or
maintaining ownership of the claims, provided that the work done
is in accordance with an adopted Program and Budget and is
performed in accordance with Section 8.3. The Manager shall
timely record with the appropriate Governmental Authorities
evidence in proper form attesting to the performance of
assessment work or notices of intent to hold in proper form, and
allocating therein, to or for the benefit of each claim, at
least the minimum amount required by Law to maintain such claim
or site. The Manager will provide a Party and its
representatives with access to records and information to permit
a Party to have prepared for it a technical report or other
assessment for its own purposes, but the cost of preparing any
such report or assessment will be borne by the Party having it
prepared and shall not be an Expenditure;
(k) If authorized by the Management Committee, the Manager may: (i)
locate, amend or relocate any mineral rights; (ii) locate any
fractions resulting from such amendment or relocation; (iii)
apply for further mineral rights, permits to mine and/or mining
leases or other forms of mineral tenure for any such mineral
rights; (iv) abandon any mineral rights for the purpose of
relocating such mineral rights or otherwise acquiring from a
government agency rights to the ground covered thereby; (v)
exchange with or convey to a Governmental Authority any of the
Properties for the purpose of acquiring rights to the ground
covered thereby or other adjacent ground; (vi) convert any
mineral rights into one or more leases or other forms of mineral
tenure pursuant to any Law; and (vii) contract with and pay
compensation to any person including any Governmental Authority
for surface rights, rights of access, easements, rights of way
or any other form of other tenement whether located at or near
the Properties or elsewhere useful in connection with the
activities of the Joint Venture;
(l) The Manager shall keep and maintain, separate and apart from its
other books and accounts and records, good and complete books of
account and records pertaining to Operations and the management
and operation of the Joint Venture Assets and its performance as
Manager hereunder, including but not limited to:
(i) copies of all geological, geophysical, geochemical,
drilling, metallurgical and engineering records and
reports;
(ii) maps, drawings, surveys and other records, including
title records, relating to or describing the Properties
and all Operations thereon or in respect thereof;
(iii) all licences, approvals, consents and permits given by
Governmental Authorities and all reports and
correspondence relating thereto; and
(iv) detailed books of account and records as will properly
reflect, on an accrual basis and otherwise in accordance
with Canadian generally
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accepted accounting principles, the accounting
procedures set out in Schedule "B" attached hereto and
customary cost accounting practices in the mining
industry, all transactions of the Manager in relation to
the management of Operations and the Joint Venture
Assets and the performance of its duties hereunder,
including those duties for which it will seek
reimbursement hereunder,
in a central location known to each Party, and make such books
and accounts and records available to the Parties or their duly
authorized agents and representatives at all reasonable times
for inspection, audit and/or reproduction. All such books and
accounts and records shall be the property of the Joint Venture
and, unless otherwise authorized by the Parties in writing,
shall be maintained by the Manager and not destroyed and all
such books and accounts and records and all reports of the
Manager under this Agreement shall be subject to the audit
pursuant to and in accordance with the accounting procedures set
out in Schedule "B" attached hereto;
(m) The Manager shall keep the Management Committee advised of all
Operations by submitting to the representative of each Party in
writing the following information as soon as it is available to
the Manager: (i) progress reports delivered within five Business
Days after the end of each month, which include summaries of
Operations and statements of Expenditures and comparisons of
such Expenditures to the adopted Budget; (ii) monthly summaries
of data acquired delivered within five (5) Business Days after
the end of each month; (iii) a copy of any reports concerning
Operations; (iv) a detailed final report within 45 days after
completion of each Program and Budget, which shall include
comparisons between actual and budgeted Expenditures and
comparisons between the objectives and results of Programs; and
(v) a copy of such other reports as the other Party may
reasonably request. Items (i) through (iii) of this Section
7.2(m) shall be submitted by the Manager as it prepares them in
the normal course of business. Copying of items (i) through (v)
will be charged to the Joint Account. The Manager shall
forthwith communicate to both Parties concurrently any
information that is material to the Operations. All information
so communicated by the Manager is subject to the provisions of
Article 16 hereof. At all reasonable times the Manager shall
provide the Management Committee or the representative of any
Party, upon the request of any member of the Management
Committee, access to, and the right to inspect and copy, all
maps, drill logs, core tests, reports, surveys, assays,
analyses, production reports, operations, technical, accounting
and financial records and other information acquired in
Operations that has not been provided pursuant to items (i)
through (v) of this Section 7.2(m); such information will be
provided to the Management Committee as a charge to the Joint
Account and if additional copies are required by a Party they
will be paid for by that Party. In addition, the Manager shall
allow upon written request (which request shall not be
unreasonably denied) the Non-Manager, at the latter's sole risk
and expense, and subject to reasonable safety regulations, to
inspect the Joint Venture Assets and Operations at all
reasonable times, so long as the inspecting Party does not
unreasonably interfere with Operations;
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(n) The Manager (i) shall perform all reclamation, rehabilitation
and other mine closure obligations in respect of all Properties
or any part thereof in a timely manner in accordance with all
applicable Laws, the policies and plans of the Management
Committee, and all mine closure plans, and (ii) shall cause the
Joint Venture to complete and file with all Governmental
Authorities having jurisdiction all mine closure plans and
related financial assurances relating to the Properties and any
past, present or future Operations conducted thereon. All such
financial assurances shall be posted by the Parties
proportionately to each Party's Participating Interest;
(o) The Manager shall undertake to perform Continuing Obligations
when and as appropriate or required by any Laws or any
contractual obligation. The Manager shall have the right to
delegate performance of Continuing Obligations to Persons having
demonstrated skill and experience in relevant disciplines. As
part of each Program and Budget submission, the Manager shall
prepare and distribute to the Parties a Program and Budget for
performance of Continuing Obligations and shall keep the Parties
reasonably informed about the Manager's efforts to discharge
Continuing Obligations. Each Party shall have the right from
time to time to enter the Properties to inspect work directed
toward satisfaction of Continuing Obligations and audit books,
records, and accounts related thereto;
(p) The Manager will appoint and remove the mine general manager of
the Joint Venture. [Deleted Text]
(q) The Manager shall prepare for presentation to and the approval
of the Management Committee, and implement and enforce,
appropriate occupational health and workplace safety,
sustainability and environmental protection and compliance
policies and plans and such other policies and plans as the
Management Committee shall deem appropriate or prudent. All such
policies and plans will meet a standard which is at least as
stringent as the more stringent of Placer's and Kinross' current
standards or practices for the applicable policy or plan. The
Manager shall prepare the initial policies and plans within the
first full year of Operations; and
(r) The Manager shall undertake all other activities reasonably
necessary to fulfill the foregoing.
7.3 STANDARD OF CARE
The Manager shall conduct all Operations in a good, workmanlike and efficient
manner using the skill and judgement, and exercising such degree of care and
skill as would reasonably be exercised by an experienced mining company
operating mining operations of the nature and scope of the Joint Venture and the
Joint Venture Assets, all in accordance with: (a) prevailing
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mining industry standards and practices; (b) all Laws; (c) the terms of leases,
licenses, permits, contracts and other agreements pertaining to the Joint
Venture Assets; and (d) the occupational health and work place safety,
environmental protection and compliance and all other policies and plans adopted
by the Management Committee. The Manager shall not be liable to the Non-Manager
for any act or omission resulting in damage or loss except to the extent caused
by or attributable to the Manager's wilful misconduct or gross negligence.
The Manager shall not be in default of any duty under this Section 7.3 if its
failure to perform results from the failure of a Non-Manager to perform acts or
to contribute amounts required of it by this Agreement.
7.4 RESIGNATION AND DEEMED OFFER TO RESIGN
The Manager may resign upon giving not less than 90 days prior written notice to
the other Party, in which case the other Party may elect to become the new
Manager by notice to the resigning Party given within 60 days after the notice
of resignation is delivered. If the other Party does not so elect to become, or
appoint, the new Manager, this Agreement shall terminate and the resigning
Manager shall comply with the provisions of Section 11.4.
If any of the following shall occur, the Manager shall be deemed to have offered
to resign, which offer shall be accepted by the other Party, if at all, within
90 days following such deemed offer by notice in writing to the resigning Party
and the Manager (if not the resigning Party):
(a) the Participating Interest of the Manager becomes less than 50%;
(b) the Manager fails to propose a Program or Budget in any year;
(c) upon a final and unappealable determination of a court of law,
that the Manager has failed to perform its duties and
obligations hereunder in accordance with the Manager's standards
of care set out in this Agreement;
(d) upon a final and unappealable decision of a court of law that
the Manager has breached any material obligation, covenant or
duty under this Agreement; or
(e) a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official for a substantial part of the
Manager's assets is appointed and such appointment is neither
made ineffective nor discharged within 60 days after the making
thereof, or such appointment is consented to, requested by, or
acquiesced in by the Manager.
If the other Party shall accept the Manager's deemed offer of resignation then
the Manager shall be deemed to have resigned and the other Party shall be the
successor Manager. In the case of the deemed resignation of the Manager under
any of Sections 7.4(b), (c) or (d), the other Party shall be the successor
Manager only for the remaining portion of the then current Program, after which
the Party who has a Participating Interest greater than that of the other Party
at the particular time shall be the Manager. In the case of Section 7.4(e) the
appointment of a successor Manager shall be deemed to pre-date the event giving
rise to the offer to resign.
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7.5 CHANGE IN MANAGER
(a) If the Manager resigns or otherwise ceases to be Manager such
former Manager shall forthwith turn over, transfer and deliver
to the new Manager control and possession of the Joint Venture
Assets, all documents, books, records and accounts pertaining to
the performance of its functions as Manager and all monies held
by it in its capacity as Manager. Upon such transfer and
delivery the former Manager shall be released and discharged
from, and the new Manager shall assume, all duties and
obligations of Manager except the unsatisfied duties and
obligations or any liabilities of the former Manager accrued or
existing prior to the effective date of the change of Manager
and for which the former Manager shall, notwithstanding its
release or discharge, continue to remain liable.
(b) Upon the resignation or removal of the Manager hereunder, the
new Manager may conduct an audit of the records of the former
Manager with respect to Operations conducted under this
Agreement within 60 days of such resignation or removal. The
cost of any such audit will be borne by the Party that appointed
the new Manager.
7.6 PAYMENTS TO MANAGER
The Manager shall be compensated for its services and reimbursed for its costs
hereunder in accordance with the Accounting Procedure and any agreement between
the Parties that may be entered into from time to time.
7.7 TRANSACTIONS WITH AFFILIATES
If the Manager engages any Affiliate to provide services hereunder, it shall do
so on terms no less favourable than would be the case in arm's-length
transactions.
7.8 ACTIVITIES DURING DEADLOCK
If the Management Committee for any reason fails to adopt a Program and Budget
for the maintenance of the Properties or a Mining Program and Budget for the
maintenance of the Joint Venture Assets for any calendar year or part thereof,
in the absence of contrary direction and subject to the receipt of necessary
funds, the Manager shall continue Operations at levels sufficient to maintain
the Properties and the Joint Venture Assets. In such event, for purposes of
determining required contributions of the Parties and their respective
Participating Interests, the last adopted Program and Budget or Mining Program
and Budget, as the case may be, shall be deemed extended. If the Management
Committee twice fails to adopt such a Program and Budget, then after the second
such occurrence the matter will be subject to the provisions of Article 14 as if
there had been a failure to agree on an Expenditure.
7.9 INDEMNIFICATION
The Manager's authority shall be limited to that authority which is conferred on
it by this Agreement and the Manager shall indemnify and hold the Non-Manager
and its Affiliates and their respective directors, officers and employees
harmless from and against any and all losses,
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(other than profits) claims, demands, costs (including legal costs), expenses,
actions, causes of action, damages and liabilities (collectively, a "Claim")
arising out of the gross negligence or wilful misconduct of the Manager, its
directors, officers or employees in the performance of its duties as Manager
under this Agreement.
ARTICLE 8
PROGRAMS AND BUDGETS
8.1 OPERATIONS PURSUANT TO PROGRAMS AND BUDGETS
Unless otherwise provided herein, Operations shall be conducted, expenses shall
be incurred, and Joint Venture Assets shall be acquired only pursuant to
approved Programs and Budgets.
8.2 PROGRAMS
The Manager shall propose a Program each year entailing:
(a) Exploration Operations, including geological mapping,
geochemical sampling, geophysical surveys, drilling, underground
or surface drilling, bulk sampling, and other work carried out
to ascertain the existence, location, quantity, characteristics,
and quality of deposits of Products on the Properties;
(b) Development Operations, that may entail in-depth drilling, test
mining, a Feasibility Study, and other such work expended toward
developing deposits of Products on the Properties, but does not
encompass, by itself, construction, operation, maintenance, and
attendant activities designed to bring a Mine on any of the
Properties into production in reasonable commercial quantities;
and
(c) Mining Operations that provides for ongoing operation,
maintenance, modification, expansion, shut down and reclamation
and attendant activities associated with the currently operating
Mines owned by the Joint Venture, or a Program, after a
Favourable Feasibility Study has been adopted, that is designed
to bring a Mine into production and that provides for its
subsequent operation, modification or expansion, shut down and
reclamation. Mining Operations entail Development and Mining
work, including in-depth drilling, test mining, engineering and
design work, and work expended towards development of deposits
of Products, as well as construction, operation, maintenance
modification, expansion and attendant activities.
8.3 PREPARATION, PRESENTATION AND CONTENT OF PROGRAMS AND BUDGETS
(a) CONTENT AND SUBMISSION OF PROGRAMS - Proposed Programs and
Budgets shall be prepared and submitted by the Manager to the
Management Committee for review and consideration. Each Program
shall be accompanied by and shall include a corresponding Budget
and shall designate precisely the area on which Operations are
to be performed, describe the work to be performed and state the
estimated period of time required to perform the work.
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(b) CONTENT OF BUDGETS - Each Budget shall be prepared in reasonable
detail and shall set forth Expenditures for a budgeted item
which, under generally accepted accounting principles, would be
capitalized. Budget items for Exploration Operations shall, as
near as is practicable, show the estimated expenditures for each
calendar quarter covered by the Budget period. Budget items for
any Development or Mining Operations shall, as near as is
practicable, show the estimated Expenditures for each month
covered by the Budget period.
(c) INITIAL PROGRAM AND BUDGET - The first Program and Budget shall
be agreed upon by the Management Committee within 30 days of the
Effective Date and shall commence upon such agreement being
settled and be in effect through to the end of the calendar year
in which the Effective Date falls. Until the initial Program and
Budget have been approved by the Management Committee, the
Manager will conduct Operations in accordance with the Programs
and Budgets in effect for each of the Parties on the Effective
Date.
(d) DURATION - After the period of the initial Program and Budget,
any Program and Budget shall be for a period of one calendar
year unless otherwise determined by the Management Committee but
may extend for such longer period as is reasonably necessary to
complete the Program.
(e) REVIEW - Each adopted Program and Budget, regardless of length,
shall be reviewed at least once a year at a regular meeting of
the Management Committee. During the period encompassed by any
Program and Budget and at least 90 days prior to its expiration,
a proposed Program and Budget for the succeeding period shall be
prepared by the Manager and submitted to the Parties.
8.4 SUBMISSION AND APPROVAL OF PROPOSED PROGRAMS AND BUDGETS
(a) SUBMISSION OF MANAGER'S PROGRAM AND BUDGET - Within 30 days
after the Manager submits a proposed Program and Budget to the
Management Committee, the Non-Manager shall submit to the
Management Committee:
(i) notice that the Non-Manager approves of the Program and
Budget; or
(ii) proposed modifications of the proposed Program and
Budget, which shall include detailed specific objections
regarding the proposed Program and Budget; or
(iii) notice that the Non-Manager rejects the proposed Program
and Budget.
If a Non-Manager fails to give any of the foregoing responses
within the allotted time, the failure shall be deemed an
approval by the Party of the proposed Program and Budget. If a
Non-Manager makes a timely submission to the Management
Committee pursuant to Section 8.4(a)(ii) or 8.4(a)(iii), then
the Management Committee shall within the following 30 days meet
to consider the proposed Program and Budget and proposed
modifications and seek to develop a complete Program and Budget
acceptable to the Parties. The Manager
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shall then call a Management Committee meeting for purposes of
reviewing and voting on the proposed Program and Budget, if any,
proposed by the non-Manager and incorporated by the Manager.
(b) SUBMISSION OF NON-MANAGER'S PROGRAM AND BUDGET - If Management
Committee approval of a proposed Program and Budget submitted by
the Manager under Section 8.3(e) is not obtained at the meeting
described in Section 8.4(a) by an affirmative vote of over 50%
of Participating Interests, then the Non-Manager shall be
entitled, within 30 days of that meeting, to submit a proposed
Program and Budget for consideration and approval according to
the procedure provided for the Manager's Program and Budget in
Section 8.4(a).
(c) DEEMED APPROVAL OF MANAGER'S PROGRAM AND BUDGET - If Management
Committee approval of a proposed Program and Budget submitted
under Section 8.4(a) or (b) is not obtained, then the proposed
Program and Budget submitted by the Manager, incorporating any
modifications agreed upon by the Management Committee, shall be
deemed adopted upon the Manager giving notice of its intent to
conduct such Program and Budget; provided, however, that the
Manager and the Management Committee shall use all reasonable
efforts to accommodate the Non-Manager's position in preparation
and approval of the Program and Budget.
8.5 ELECTION TO PARTICIPATE
(a) DEADLINE FOR ELECTION - Any Party whose proposed Program and
Budget is adopted as provided in Section 8.4(a) or (b) is deemed
to have elected to contribute to that Program and Budget in
proportion to its then Participating Interest. By notice to the
Management Committee within 20 days after either the final vote
adopting a Program and Budget pursuant to Section 8.4(a) or (b)
or receipt of notice pursuant to Section (c), whichever is
applicable, a Party may elect to contribute to such Program and
Budget (i) in proportion to its then respective Participating
Interest or (ii) not at all. If the other Party fails to notify
the Management Committee or the Party electing to conduct the
Program within the 20 days, the Party so failing shall be deemed
to have elected to contribute to such Program and Budget in
proportion to its then respective Participating Interest. If a
Party elects not to contribute in proportion to its
Participating Interest, the Party that elected to contribute in
proportion to its then Participating Interest may within an
additional 20 days revise or revoke its election to contribute.
(b) PARTICIPATION IN PROGRAM AND BUDGET - If the other Party elects
not to participate in a Program and Budget at all, that Party's
Participating Interest shall be reduced as provided in Section
5.3 or Section 5.4, as applicable. The Participating Interest of
the contributing Party will be increased by the amount of the
reduction in the Participating Interest of the non-contributing
Party as provided in Section 5.3 or Section 5.4, as applicable.
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8.6 BUDGETARY OVERRUNS
The Manager's monthly Budget reports will report on actual Expenditures incurred
for the previous month and for the year-to-date and will compare the forecast
Expenditures for the year to the budgeted Expenditures for the year. If the
forecasted Expenditures for the year (not including unexpected Expenditures as
defined in Section 8.8) materially exceed the budgeted Expenditures for the year
then the Manager will immediately notify the Parties for the purpose of
convening a Management Committee meeting to consider the overrun and a
re-forecast of the Expenditures. Thereafter, unless otherwise determined or
authorized by the unanimous approval of the Management Committee Nominees of
both Parties, if the Manager exceeds forecast Expenditures (or re-forecast
Expenditures, as the case may be) by more than [Deleted Text]%, then the amount
of the Budget overrun up to and including [Deleted Text]% shall be borne by the
Parties in proportion to their Participating Interest and the excess over 20%
shall be for the sole account of the Manager.
8.7 PARTICIPATION IN SUBSEQUENT PROGRAMS
A Party may participate in any subsequent Program at the level of the Party's
then Participating Interest unless the Party's Participating Interest has been
converted to an NSR Royalty interest pursuant to Section 5.6.
8.8 EMERGENCY OR UNEXPECTED EXPENDITURES
In case of emergency, the Manager may take any reasonable action it deems
necessary to protect life, limb or property, to protect the Joint Venture Assets
or to comply with Laws. The Manager may also make reasonable Expenditures on
behalf of the Parties for unexpected events which are beyond its reasonable
control, for which it has made reasonable attempts to discuss with the
Management Committee and which do not result from a breach by it of its standard
of care ("unexpected Expenditures"). The Manager shall promptly notify the
Parties of the emergency or unexpected Expenditure, and the Manager shall be
reimbursed for all resulting costs (except for such costs as result from a
breach by the Manager of its standard of care) by the Parties in proportion to
their respective Participating Interests at the time the emergency occurred
giving rise to the unexpected Expenditures. If a Party fails to reimburse the
Manager for the unexpected Expenditures, then the other Party may pay to the
Manager or the defaulting Party's share of unexpected Expenditures, whereupon
the amount so paid shall bear interest in accordance with, and the
non-defaulting Party shall have the rights pursuant to, the provisions of
Section 9.3.
ARTICLE 9
ACCOUNTS AND SETTLEMENTS
9.1 MONTHLY STATEMENTS
The Manager shall promptly submit to the Management Committee monthly statements
of account reflecting in reasonable detail the charges and credits to the Joint
Account during the preceding month. As may reasonably be requested by the
Parties, the Manager may modify the statements prepared by it to accommodate the
specific accounting requirements of a Party to allow it to properly consolidate
its own financial statements.
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9.2 CASH CALLS
Except where a Party has voluntarily elected not to participate in an adopted
Program and Budget pursuant to Sections 5.3 and 8.5, on the basis of the adopted
Program and Budget, the Manager will submit to each Party, at least five
Business Days in advance of when payment is required, a notice setting forth a
billing for estimated cash requirements for the following approximate two week
period. Each Party shall advance to the Manager its proportionate share of the
estimated amount on the first and fifteenth day of each month. The Manager shall
not maintain any material cash balance, and all material funds in excess of
immediate cash requirements shall be returned to the Parties in proportion to
their Participating Interests. In the event that a Party fails to advance to the
Manager its proportionate share of the estimated amounts in accordance with the
foregoing terms, the Manager shall immediately deliver to that Party written
notice of the failure to advance funds, whereupon such Party shall advance to
the Manager its proportionate share of the estimated amount within two Business
Days of the receipt of such notice, failing which such Party shall be in default
of such cash call. The Party that failed to pay a cash call when due under this
Section will reimburse the Manager or its Affiliate for any costs incurred or
interest paid by the Manager or its Affiliate as a result of them advancing
funds or drawing on a credit facility to cover the amount of the cash call not
made. None of the foregoing imposes on the Manager any obligation to fund any
shortfalls in cash requirements or any missed cash call or any other obligation
of the Parties under this Agreement.
9.3 FAILURE TO MEET CASH CALLS
A Party that fails to meet cash calls in the amount and at the times specified
in Section 9.2 in the circumstances where the other Party has met the
corresponding cash calls in the amount and at the times specified in Section
9.2, shall be in default and the amounts of the defaulted cash call shall bear
interest from the date due at an annual rate equal to three percentage points
over the Prime Rate, but in no event shall the rate of interest exceed the
maximum permitted by Law. Such interest shall accrue to the sole benefit of and
be payable to the non-defaulting Party, but shall not be deemed as amounts
contributed by the non-defaulting Party if dilution occurs pursuant to Section
5.5. The non-defaulting Party shall have those rights, remedies and elections
specified in Section 5.5.
ARTICLE 10
DISPOSITION OF PRODUCTION
10.1 TAKING IN KIND
Each Party owning a Participating Interest shall take delivery of its
Participating Interest share of all refined gold produced by the Joint Venture
directly from the refinery designated by the Manager, which refinery initially
will be the Xxxxxxx Xxxxxx facility in Brampton, Ontario. Each Party will take
in kind or separately dispose of its Participating Interest share of all other
Products produced by the Joint Venture. Any extra costs incurred in the taking
in kind or separate disposition by a Participant shall be borne by such
Participant. Nothing in this Agreement shall be construed as providing, directly
or indirectly, for any joint or cooperative marketing or selling of Products or
permitting the processing of Products owned by any third
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party at any processing facility owned or constructed by the Parties pursuant to
this Agreement. The Manager will give notice in advance of the anticipated
delivery date upon which Products will be available. Each Party shall assume
risk of loss and take possession of such Products at the time and place
specified by the Manager and will thereafter bear the responsibilities and costs
of transportation, security and related expenses and shall, at its own expense,
construct, operate and maintain any facilities necessary to receive, store and
dispose of its share of production.
10.2 HEDGING
No Party shall have any obligation to account to any other Party for, nor have
any interest or right of participation in any profits or proceeds, nor have any
obligation to share in any losses from, or costs of futures, contracts, forward
sales, trading in puts, calls, options or any similar hedging, currency hedging,
price protection or marketing mechanism it may employ with respect to its
Participating Interest share of any Products produced or to be produced from the
Properties or elsewhere. Neither Party may commit the other Party's share of
production to any hedging, price protection or similar program undertaken by it.
ARTICLE 11
WITHDRAWAL AND TERMINATION
11.1 TERMINATION BY EXPIRATION OR AGREEMENT
This Agreement shall terminate as expressly provided in this Agreement, unless
earlier terminated by written agreement between the Parties.
11.2 WITHDRAWAL AND OTHER EVENTS OF TERMINATION
(a) If a Party's Participating Interest in the Properties is reduced
to less than 10% and converted to a 2% NSR Royalty, then it will
be deemed to have withdrawn from the Joint Venture.
(b) Upon withdrawal of a Party so that only one Party remains, this
Agreement shall terminate, and the withdrawing Party shall be
deemed to have transferred to the remaining Party its
Participating Interest, without cost and free and clear of
Encumbrances arising by, through or under such withdrawing
Party, except the NSR Royalty described in Section 5.6 and those
other interests and exceptions to which both Parties have given
their written consent after the date of this Agreement. The
withdrawing Party shall execute and deliver all instruments as
may be necessary to effect the transfer of its Participating
Interest in the Joint Venture Assets and in this Agreement to
the remaining Party. Any withdrawal under this Section 11.2
shall not relieve the withdrawing Party of its share of
Continuing Obligations or liabilities to third persons (whether
such liabilities accrue before or after such withdrawal) arising
out of Operations conducted prior to such withdrawal. For
purposes of this Section 11.2, the withdrawing Party's share of
such liabilities shall be equal to its Participating Interest at
the time such liability was assumed (in the case of liabilities
which existed on the Effective Date) or at the time of the
action giving rise to such liability (in the case of the
liabilities which arose after the Effective Date).
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(c) In addition to withdrawal under Sections 11.2(a) and (b)
resulting in termination, this Agreement shall also terminate
under this Section 11.2(c) if any of the following occur:
(i) if at any time there are no Joint Venture Assets which
are subject to the provisions of this Agreement;
(ii) if the rights or all obligations of the Parties to
explore or mine or hold or rehabilitate the Properties
have been terminated and there are no further Continuing
Obligations; or
(iii) if one party acquires a Participating Interest such that
it holds 100% of the Participating Interests.
11.3 CONTINUING OBLIGATIONS
On termination of this Agreement under this Article 11, the Parties shall remain
liable for Continuing Obligations hereunder in proportion to their Participating
Interests at the time such liability was assumed (in the case of liabilities
which existed on the Effective Date) or at the time of the action giving rise to
such liability (in the case of the liabilities which arose after the Effective
Date) until final settlement of all accounts. Such Continuing Obligations
include liability for all amounts chargeable with respect to any Budget to which
the withdrawing Party is committed, including costs incurred pursuant to such
Budget after the effective date of withdrawal but not in excess of the most
recent cost estimates committed to, or approved by, such withdrawing Party. The
withdrawing Party shall also remain liable in proportion to its Participating
Interest for any liability, whether it accrues before or after termination, if
it arises out of Operations during the term of the Agreement. Each Party shall
be liable for its allocable share of the cost of satisfying all Continuing
Obligations, whether or not one of the Parties has previously withdrawn or
reduced its Participating Interest or had it converted to a royalty. If the
Participating Interests of the Parties change, the Manager should propose to the
Management Committee a method for fairly allocating such costs. Upon withdrawal,
the withdrawing Party will assign its interest in any mining claims, leases or
subleases to the remaining Party.
11.4 DISPOSITION OF JOINT VENTURE ASSETS ON TERMINATION
Promptly after termination of this Agreement under this Article 11, the Manager
shall take all action necessary to wind up the activities of the Parties, and
all costs and expenses incurred in connection with the termination of the
Agreement shall be expenses chargeable to the Parties. The Joint Venture Assets
shall first be paid, applied, or distributed in satisfaction of all liabilities
of the Parties to third parties and then to satisfy any debts, obligations or
liabilities owed to the Parties. Before distributing any funds or Joint Venture
Assets to Parties, the Manager shall segregate amounts which, in the Manager's
reasonable judgment, are necessary to discharge Continuing Obligations or to
purchase for the account of Parties, bonds or other security for the performance
of such obligations. Thereafter, any remaining cash and all other Joint Venture
Assets shall be distributed (in undivided interests unless otherwise agreed) to
the Parties according to their Participating Interests. No Party shall receive a
distribution of any interest in Products or proceeds from the sale thereof if
such Party's Participating Interest therein has been terminated pursuant to this
Agreement.
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11.5 RIGHT TO DATA AFTER TERMINATION
After termination of this Agreement, each Party shall be entitled to a copy of
all information acquired by the Joint Venture before the effective date of
termination not previously furnished to it, but a terminating or withdrawing
Party shall not be entitled to copies of any such information relating to the
period after its withdrawal.
11.6 CONTINUING AUTHORITY
Until there are no longer any Continuing Obligations, the Manager shall have the
power and authority, subject to control of the Management Committee, if any, to
do all things on behalf of the Parties which are reasonably necessary to: (a)
wind up Operations and satisfy all Continuing Obligations; and (b) complete any
transaction and satisfy any obligation, unfinished or unsatisfied, at the time
of such termination or withdrawal, if the transaction or obligation arises out
of Operations prior to such termination or withdrawal. The Manager shall have
the power and authority to grant or receive extensions of time or change the
method of payment of an already existing liability or obligation, prosecute and
defend actions on behalf of the Parties, and take any other reasonable action in
any matter with respect to which the former Parties continue to have, or appear
or are alleged to have, an ongoing interest or an ongoing liability.
ARTICLE 12
ABANDONMENT AND SURRENDER OF PROPERTIES
12.1 SURRENDER OR ABANDONMENT OF PROPERTY
Any Party may request the Management Committee to authorize the Manager to
surrender or abandon part or all of the Properties. If the Management Committee
authorizes any such surrender or abandonment over the objection of a Party, the
Party that desires to surrender or abandon shall assign to the objecting Party,
by quit claim deed and without cost to the objecting Party, all of the
surrendering Party's interest in the Properties sought to be abandoned or
surrendered, free and clear of all Encumbrances created by, through or under the
surrendering Party other than those to which the Parties have agreed, and the
abandoned or surrendered property shall cease to be part of the Properties. If
Properties to be abandoned or surrendered are located upon a mining lease or
sublease, abandonment shall be conducted in accordance with and only to the
extent permitted by any appurtenant mining lease or sublease and Laws. Any
assignment under this Section 12.1 shall not relieve the surrendering Party of
its Participating Interest share of liabilities arising out of Operations
conducted prior to such assignment. Any assignment of an interest pursuant to
this Section 12.1 shall not reduce or change the surrendering Party's
Participating Interest.
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12.2 REACQUISITION
If any Properties are abandoned or surrendered under the provisions of this
Article, then, unless this Agreement is earlier terminated, no Party or any
Affiliate thereof shall acquire any interest in such Properties or a right to
acquire such Properties for a period of two years following the date of such
abandonment or surrender. If a Party reacquires any Properties in violation of
this Section 12.2, such Properties shall automatically become subject to the
terms of this Agreement and the other Party may elect by notice to the
reacquiring Party within 45 days after it has actual notice of such
reacquisition, to have such Properties continue to be subject to the terms of
this Agreement. If such election is made, such reacquisitions shall be held in
the proportion that each Party owned the reacquired Properties at the time they
were abandoned and the costs of reacquisition shall be paid in those
proportions. If such an election is not made, the reacquired properties shall
thereafter cease to be treated as Properties, and the costs of reacquisition
shall be borne solely by the reacquiring Party and shall not be included for
purposes of calculating the Parties' respective Participating Interests.
ARTICLE 13
TRANSFER OF INTEREST
[Deleted Text]
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ARTICLE 16
CONFIDENTIALITY
16.1 GENERAL
The terms of this Agreement and all information obtained in connection with the
performance of this Agreement shall be the exclusive property of the Parties
and, except as provided in Section 16.2, shall not be disclosed to any third
party or the public without the prior written consent of the other Party, which
consent may be arbitrarily withheld. No Party need seek the consent of a Royalty
Holder under this Article 16; however, as set forth in Section 16.3, a Royalty
Holder shall continue to be bound by the confidentiality provisions of this
Article 16.
16.2 EXCEPTIONS
The consent required by Section 16.1 shall not apply to any disclosure:
(a) to an Affiliate, advisor, consultant, contractor or
subcontractor that has a legitimate business need to know;
(b) to any third party to whom the disclosing Party contemplates a
Transfer of all or any part of its interest in or to this
Agreement, or all or any part of its Participating Interest,
that has a legitimate business need to know;
(c) to a Governmental Authority or to the public which the
disclosing Party believes in good faith is required by Laws or
the rules of any relevant stock exchange; or
(d) to any actual or potential lender or underwriter that has a
legitimate business need to know.
In any case to which Section 16.2(b), (c) or (d) is applicable, the
disclosing Party shall give notice to the other Party concurrently with
the making of such disclosure specifying the entity receiving the
information and the reason for the disclosure. This notice shall include
a summary of the information disclosed and, if requested by the other
Party, copies of all confidential information delivered by the
disclosing Party, and, in the case of information delivered under
Sections 16.2(b) or (d), a copy of an agreement protecting the
confidential information from further disclosure. Prior to any
disclosure pursuant to Section 16.2(b), such third party shall first
agree in writing to protect the confidential information from further
disclosure to the same extent as the Parties are obligated under this
Article 16.
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16.3 DURATION OF CONFIDENTIALITY
The provisions of this Article 16 shall apply during the term of this Agreement
and for two years following termination of this Agreement pursuant to Article 11
and shall continue to apply to any Party who withdraws, who is deemed to have
withdrawn, or who Transfers its Participating Interest, for two years following
the date of such withdrawal or Transfer. Any Party whose Participating Interest
is converted to an NSR Royalty and any Person who becomes a Royalty Holder by
means of a permitted Transfer of all or part of the NSR Royalty hereunder shall
be bound by the confidentiality provisions of this Article 16 for so long as
this Agreement remains in force.
16.4 INTERNAL PROPRIETARY INFORMATION
(a) Subject to (b) below, all intellectual property rights will
remain the property of the owner or licensor of those
intellectual property rights.
(b) All intellectual property rights in any new invention,
technological developments or improvement to an existing
invention created or developed in connection with or for the
purposes of the Joint Venture will become and remain the
property of owners of the original property rights.
(c) The owner of intellectual property rights licensed or used
pursuant to this Agreement shall indemnify and save the other
Party harmless from all claims and related costs and damages
based on an allegation that any of the intellectual property
rights infringes the proprietary rights of any third party.
(d) If a Party ceases to be entitled to use the intellectual
property rights it has provided under this Agreement, it shall
immediately notify the other Party and will not be liable in
respect of any infringement claim for the unauthorized use of
such intellectual property rights from the date of notification.
16.5 PUBLIC ANNOUNCEMENTS
Except as provided in Section 16.2(c), each Party shall consult with and obtain
the consent of the other Party or Parties (which consent is not to be
unreasonably withheld) prior to making or issuing any public announcement, press
release, or similar publicity or disclosure with respect to this Agreement or
any agreement entered into contemporaneously herewith or with respect to any
activities under this Agreement or any such other agreements. As early as
practicable, and not less than 24 hours, before a Party makes any public
announcement concerning this Agreement or activities undertaken pursuant hereto
(unless the disclosing Party demonstrates that earlier disclosure is required by
Law), such Party shall first give the other Parties notice of the intended
announcement, including a copy of such proposed announcement, and the other
Party shall have the right to comment on such announcement. If a Party is
required by Law to make earlier disclosure, it will provide a copy of such
disclosure to the other Parties as soon as practicable thereafter.
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ARTICLE 17
TAX DEDUCTIONS AND CERTIFICATES
17.1 DEDUCTIONS
Each Party shall be entitled for tax purposes to take advantage of any
deductions or incentives or any elections which may be available under the
provisions of applicable federal, provincial, territorial or municipal tax laws,
regulations and incentive programs in relation to costs and expenses incurred by
it hereunder. Whenever deductions, incentives or elections are granted to the
Parties individually but a joint election is required, each Party agrees that it
will join with the other Party and execute and deliver any documentation
required in connection therewith and otherwise furnish such information and take
such action as may be reasonably requested by the other Party in connection
therewith; provided that nothing herein contained shall require any Party to
take any action which in the written opinion of counsel for that Party is likely
to be detrimental to that Party's tax position.
17.2 CERTIFICATES
Should any Party who becomes a non-resident for purposes of the Tax Act make a
disposition of a Canadian resource property or taxable Canadian Property within
the meaning of the Tax Act, then the disposing Party shall take all steps as are
necessary including the payment of money to obtain a certificate or certificates
pursuant to section 116 of the Tax Act designating one or more certificate
limits equal to the estimated amount of the proposed proceeds of disposition. If
the disposing Party does not obtain such certificate with a certificate limit
not less than the proceeds of disposition, then the Manager may withhold from
any payment due to such Party in respect of such disposition or from any
subsequent payment due or otherwise recover (until such time as the disposing
Party delivers a certificate with a certificate limit equal to the proceeds of
the disposition) an amount necessary to permit the Manager to remit to the
Receiver General of Canada the tax for which any Party is liable under section
116 of the Tax Act.
17.3 GST ELECTION
The Manager and each Party shall jointly elect in the prescribed form to
authorize the Manager to perform all necessary functions relating to the goods
and services tax payable under the provisions of section 273 of the EXCISE TAX
ACT (Canada), and any applicable provincial legislation relating to goods and
services (collectively, "GST"), as amended from time to time, which is payable
by the Manager and which arise out of the ownership and operation of the
Properties or the delivery of each Party's share of Product, if any. Should the
Manager receive any rebate of GST in respect of the Operations, such rebate
shall be credited to the Joint Account.
17.4 MINING TAX ALLOCATIONS
[Deleted Text]
(d) [Deleted Text]
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ARTICLE 18
GENERAL
18.1 NOTICES
All notices, payments and other required communications ("Notices") to the
Parties shall be in writing, and shall be delivered or sent by facsimile,
addressed respectively as follows:
(a) in the case of a Notice to Placer at:
Placer Dome (CLA) Limited
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: The Secretary
Fax: 000.000.0000
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with a copy to:
Placer Dome Inc.
X.X. Xxx 00000 Bentall Station
1600, 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X.
X0X 0X0
Attention: The Secretary
Fax: 000.000.0000
and a copy to (which delivery shall not constitute notice to
Placer):
[Deleted Text]
(b) in the case of a Notice to Kinross at:
Kinross Gold Corporation
52nd Floor, 00 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Corporate Secretary
Fax: 000.000.0000
with a copy to (which delivery shall not constitute notice to
Kinross):
[Deleted Text]
(c) And in the case of Notice to the Management Committee:
To the appointed member thereon of the other Party c/o the other
Party as specified above.
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(d) And in the case of Notice to the Manager if it is not a Party:
To the address, individual's attention, telephone and facsimile
specified in the communication appointing such Manager.
Notice sent by courier will be deemed to have been received when it is
delivered, and notice sent by facsimile will be deemed to have been received on
the day it is sent, if during regular business hours, and otherwise on the next
business day.
18.2 WAIVER
The failure of a Party to insist on the strict performance of any provision of
this Agreement or to exercise any right, power or remedy upon a breach hereof
shall not constitute a waiver of any provision of this Agreement or limit the
Party's right thereafter to enforce any provision or exercise any right.
18.3 AMENDMENT
No amendment, supplement, modification, waiver or termination of this Agreement
and, unless otherwise specified, no consent or approval by any Party, shall be
binding unless executed in writing by the Party to be bound thereby.
18.4 FORCE MAJEURE
(a) Except for any obligation to make payments when due hereunder,
and except for the obligations of the Manager to continue
Operations to the extent appropriate in the circumstances to
preserve the Joint Venture Assets, the cost of which will be
borne by the Joint Venture, the obligations of a Party shall be
suspended to the extent and for the period that performance is
prevented by any cause, whether foreseeable or unforeseeable,
that is beyond its reasonable control, including: labour
disputes (however arising and whether or not employee demands
are reasonable or within the power of the party to grant); acts
of God; laws, regulations, orders, proclamations, instructions
or requests of any Governmental Authority; judgments or orders
of any court; inability to obtain on reasonably acceptable terms
any public or private license, permit or other authorization;
curtailment or suspension of activities to remedy or avoid an
actual or alleged, present or prospective violation of federal,
provincial or territorial or local environmental standards; acts
of war or conditions arising out of or attributable to war,
whether declared or undeclared; riot, civil strife, insurrection
or rebellion; fire, explosion, earthquake, storm, flood, sink
holes, drought or other adverse weather conditions; delay or
failure by suppliers or transporters of materials, parts,
supplies, services or equipment or by contractors' or
subcontractors' shortage of, or inability to obtain, labour,
transportation, materials, machinery, equipment, supplies,
utilities or services; accidents; breakdown of equipment,
machinery or facilities; actions by native rights or
environmental pressure groups; or any other cause whether
similar or dissimilar to the foregoing. The affected Party shall
promptly give notice to the other Parties of the suspension of
performance, stating therein the nature of the suspension, the
reasons therefor, and the expected duration thereof. The
affected Party shall resume performance as soon as reasonably
possible and, in any event, upon the termination of the event of
force majeure. Commercial frustration, commercial
impracticability or the occurrence of unforeseen events
rendering performance hereunder uneconomical shall not
constitute an excuse of performance of any obligation imposed
hereunder.
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(b) In the event that any Party asserts that an event of force
majeure has occurred, it shall give notice in writing to the
other Parties specifying the following:
(i) the cause and nature of the alleged event of force
majeure;
(ii) a summary of the action it or its representatives,
agents, contractors or employees have taken to the date
of such notice to correct or terminate the alleged event
of force majeure; and
(iii) the reasonably expected duration of the period of force
majeure.
(c) Any Party asserting an event of force majeure shall provide
ongoing periodic notice in writing to the other Parties with
respect to such events of force majeure, including the matters
set out in Section (b) above, within fifteen (15) days of the
end of each calendar month during the period of force majeure
and shall provide prompt notice in writing to the other Parties
upon the termination of the event of force majeure.
18.5 FURTHER ASSURANCES
The Parties shall with reasonable diligence do all such things and provide all
such reasonable assurances as may be required to consummate the transactions
contemplated by this Agreement, and each Party shall provide such further
documents or instruments required by any other Party as may be reasonably
necessary or desirable to effect the purpose of this Agreement and carry out its
provisions.
18.6 SURVIVAL OF TERMS AND CONDITIONS
The following Sections shall survive the termination of this Agreement to the
full extent necessary for their enforcement and the protection of the Party in
whose favour they run: Sections 5.5, 5.6, 5.7, 9.3, 11.2, 11.3, 11.4, 11.5,
11.6, 16.3 and 18.11.
18.7 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and enure to the benefit of the Parties and
their respective successors (including any successor by reason of amalgamation
of any Party) and permitted assigns.
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18.8 NO PARTNERSHIP
Nothing contained in this Agreement shall be deemed to constitute any Party the
partner of any other, nor, except as otherwise herein expressly provided, to
constitute any Party the agent or legal representative of any other, nor to
create any fiduciary relationship between them. It is not the intention of the
Parties to create, nor shall this Agreement be construed to create, any mining,
commercial or other partnership. No Party shall have any authority to act for or
to assume any obligation or responsibility on behalf of any other Party, except
as otherwise expressly provided herein. The rights, duties, obligations and
liabilities of the Parties shall be several and not joint or collective. Each
Party shall be responsible only for its obligations as herein set out and shall
be liable only for its share of the costs and expenses as provided herein, it
being the express purpose and intention of the Parties that their ownership of
Joint Venture Assets and the rights acquired hereunder shall be as tenants in
common. Each Party shall indemnify, defend and hold harmless each other Party,
its directors, officers, employees, agents and attorneys from and against any
and all losses, claims, damages and liabilities arising out of any act or any
assumption of liability by the indemnifying Party, or any of its directors,
officers, employees, agents and attorneys done or undertaken, or apparently done
or undertaken, on behalf of the other Party, except pursuant to the authority
expressly granted herein or as otherwise agreed in writing between the Parties.
18.9 FURTHER GROUND WITHIN DEVELOPMENT AREA AND OTHER BUSINESS
OPPORTUNITIES
[Deleted Text]
(h) [Deleted Text]
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18.10 WAIVER OF RIGHTS OF PARTITION AND SALE
The Parties hereby waive and release all rights of partition or of sale in lieu
thereof, or other division of Joint Venture Assets, including any such rights
provided by statute and all similar rights applicable in the jurisdiction in
which the Properties are located.
18.11 EXPENSE AND COMMISSIONS
Each Party shall pay its own legal and other costs and expenses incurred in
connection with this Agreement and agrees to save harmless each other Party from
and against any and all claims whatsoever for any commissions or other
remuneration payable or alleged to be payable to anyone acting on its behalf.
18.12 EXECUTION AND DELIVERY
This Agreement may be executed by the Parties in counterparts and may be
executed and delivered by facsimile, and all such counterparts and facsimiles
shall together constitute one and the same agreement.
18.13 RULE AGAINST PERPETUITIES
Notwithstanding any provision of this Agreement, the Parties do not intend that
there shall be any violation of the rule against perpetuities, the rule against
unreasonable restraints on the alienation of property or any related rule
against interests that last too long. Accordingly, if any right, or option to
acquire any interest in the Properties, in a Participating Interest, in the
Joint Venture Assets, or in any real property exists under this Agreement, such
right or option must be exercised if at all, so as to vest such interest in the
acquiring Party within time periods permitted by applicable Laws. If, however,
any such violation should inadvertently occur, the Parties hereby agree that a
court will be asked to reform that provision in such a way as to approximate
most closely the intent of the Parties within the limits permissible under such
Laws.
18.14 PAYMENT OF ROYALTIES
All required payments of royalties to third parties shall be made by each Party
proportionately (based on each Party's Participating Interest) following the
disposition of Products in accordance with Article 10, and each Party undertakes
to make such payments in a timely manner in accordance with the terms of
applicable agreements.
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18.15 DISPUTES
The Parties contemplate that all matters in dispute under this Agreement, other
than the matters set forth in Section 6.2(c) or Section 7.4(c) or (d), shall be
settled as follows:
(a) In the event the Management Committee representatives of the
Parties are unable to resolve such dispute within twenty (20)
days of being seized of the matter in dispute, then the matter
in dispute shall be referred to the Chief Executive Officers of
the Parties specifying in detail the matter in dispute, and the
Chief Executive Officers of each Party shall meet and use
reasonable efforts to resolve the dispute.
(b) If the Chief Executive Officers of the Parties are unable to
resolve the dispute within five Business Days of the matter
being referred to them to resolve by the Management Committee
representatives of the Parties, or if any Chief Executive
Officer refuses or is unable to participate in any meeting to
resolve the matter in dispute within such five Business Days,
then the matter in dispute shall be settled by final and binding
arbitration with no appeal from the decision of the arbitrators;
provided, however, no Party may refer any matter to arbitration
without first having given 10 days advance written notice to the
other Party specifying in detail the matter to be arbitrated,
its proposed resolution of such matter and the intention to
refer the matter to arbitration (collectively, a "Notice of
Intended Arbitration"). After 10 days have elapsed from the
delivery to the other Party of a Notice of Intended Arbitration
without resolution of the matter, the Party who gave such notice
may refer the dispute to arbitration pursuant to all the
provisions of the ARBITRATION ACT, 1991 (Ontario) and
regulations thereunder (collectively, the "Arbitration
Provisions") by naming an arbitrator and notifying the other
Party of the arbitrator appointed by it accompanied by that
arbitrator's acceptance of his or her appointment.
(c) If the Parties agree in writing on a single arbitrator, any
matter covered by a Notice of Intended Arbitration under this
Agreement may be referred by the Parties to arbitration by a
single arbitrator in lieu of the arbitration panel otherwise
contemplated herein. The Parties contemplate the arbitrator(s)
appointed will be persons qualified by experience and skill in
the area(s) referred to in the Notice of Intended Arbitration.
The Parties further contemplate the arbitrator(s) will determine
the matter specified in the Notice of Intended Arbitration,
reduce their decision to writing and deliver a copy to each
party, all within 45 days of the appointment of the last
arbitrator, subject to any reasonable delay due to unforeseen
circumstances. Notwithstanding the foregoing, if the single
arbitrator fails to make a decision within 60 days after
appointment or if the arbitrators, or a majority of them, fail
to make a decision within 60 days after the appointment of the
third arbitrator, then either of the Parties may by notice to
the other elect to have a new single arbitrator or arbitrators
chosen in like manner as if none had previously been selected;
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(d) If a Party does not agree on a single arbitrator, the other
Party shall, within 10 days of the delivery of the notice of
appointment and acceptance of the first appointed arbitrator,
appoint an arbitrator and deliver to the other Party notice of
such appointment and the acceptance of the appointed arbitrator.
If two arbitrators are appointed, those arbitrators shall within
15 days of the appointment of the second of them choose a third
member of the arbitration panel. If either Party fails to choose
an arbitrator or the two arbitrators appointed by the Parties,
fail to choose a third member of the arbitration panel, a judge
of the Ontario Court (General Division) shall, upon the request
of either Party, appoint the arbitrator or arbitrators to
complete the three person arbitration panel.
(e) The Parties agree that proceedings before the arbitrator(s)
shall take place in Xxxxxxx, Xxxxxxx, or such other place as the
arbitrator(s) may determine.
(f) Each Party to this Agreement expressly agrees with each other
Party that the arbitrators appointed hereunder shall have all
the rights and obligations provided for in the Arbitration
Provisions and additionally that the arbitrators shall be
entitled to finally determine all questions of law, fact and
mixed fact and law without reference or appeal to any court.
(g) The fees and expenses of the arbitrator(s) (unless otherwise
determined by the arbitrator(s)) shall be paid by the Parties
equally.
(h) None of the Parties concerned shall be deemed to be in default
of any matter being arbitrated until 10 days after the decision
of the arbitrator(s) is delivered to all of them.
18.16 COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be deemed to
be an original and each of which taken together shall be deemed to constitute
one and the same instrument. Counterparts may be executed either in original or
faxed form and the Parties adopt any signatures received by a receiving fax
machine as original signatures of the Parties; provided, however, that any Party
providing its signature in such manner shall promptly forward to the other Party
an original of the signed copy of this Agreement which was so faxed.
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18.17 LANGUAGE
The Parties confirm that it is their wish that this Agreement, as well as any
other documents relating to this Agreement, including notices, schedules and
authorizations, have been and shall be drawn up in the English language only.
LES SIGNATAIRES CONFIRMENT LEUR VOLONTE QUE LA PRESENTE CONVENTION, DE MEME QUE
TOUS LES DOCUMENTS S'Y RATTACHANT, Y COMPRIS TOUT AVIS, ANNEXE ET AUTORISATION,
SOIENT REDIGES EN ANGLAIS seulement.
IN WITNESS OF WHICH the parties have duly executed this Agreement.
PLACER DOME (CLA) LIMITED KINROSS GOLD CORPORATION
By: /s/ Xxxxxx Xxxxx By: /s/ Xxxx X. Xxxxx
----------------------------- ----------------------------------
Name: Xxxxxx Xxxxx Name: Xxxx. X. Xxxxx
Title: Vice President and CFO Title: Executive Vice President
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ALL SCHEDULES
[INTENTIONALLY DELETED]
