NOTARIAL SALE AGREEMENT
between
RANDFONTEIN ESTATES LIMITED
and
LAK TRADING COMPANY NO. 9 (PROPRIETARY) LIMITED
Attorneys
u:\ih\harmony\doornkop\sale.doc
Page 2
21 January 2003
TABLE OF CONTENTS
| 1 INTERPRETATION | 3 |
| 2 RECITALS | 12 |
| 3 CONDITIONS PRECEDENT | 12 |
| 4 SALE OF SALE ▇▇▇▇▇ | ▇▇ |
| ▇ PURCHASE CONSIDERATION AND PAYMENT | 17 |
| 6 WARRANTIES | 20 |
| 7 APPLICATION FOR MINING AUTHORISATIONS | 21 |
| 8 DELIVERY | 21 |
| 9 CO-OPERATION | 21 |
| 10 BREACH | 21 |
| 11 DISPUTES | 22 |
| 12 NOTICES AND DOMICILIUM | 24 |
| 13 GENERAL | 25 |
| 14 APPLICABLE LAW AND JURISDICTION | 26 |
| 15 COSTS | 26 |
LIST OF ANNEXES
A
PLAN OF THE DOORNKOP MINING AREA
B
PLAN OF MINING LEASE
C
SERVICES
D
D
SCHEDULE OF PROPOSED SHAREHOLDERS OF AVR
E
SECONDARY
CONSIDERATION
Page 3
PROTOCOL NO: ............2003
BE IT HEREBY MADE KNOWN -
That on this 21
st
day of January 2003, before me, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
notary public, duly sworn and admitted, practising at ▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, in the Province of Gauteng in the Republic of South
Africa, personally came and appeared
-
- ▇▇▇▇▇ ▇▇▇▇▇▇, in his capacity as a director of Randfontein Estates Limited
("Randfontein"), he being duly authorised thereto by a resolution of the
directors of Randfontein passed on 17 January 2003; and
- ▇▇▇▇▇▇▇ ▇▇▇▇▇, in his capacity as a director of LAK Trading Company No.
9 (Proprietary) Limited ("Africa Vanguard"), he being duly authorised
thereto by a resolution of the directors of Africa Vanguard passed on 17
January 2003,
certified extracts of which resolutions have been exhibited to me, the notary,
and remain filed of record in my protocol with the minute hereof.
AND THE APPEARERS DECLARED THAT -
Randfontein and Africa Vanguard have agreed to enter into a sale agreement
on the terms and conditions set out hereunder.
1
INTERPRETATION
1.1
In this Agreement -
Page 4
1.1.1
clause headings are for convenience and are not to be used in its
interpretation;
1.1.2
unless the context indicates a contrary intention an expression
which denotes -
1.1.2.1
any gender includes the other genders;
1.1.2.2
a natural person includes a juristic person and vice versa; and
1.1.2.3
the singular includes the plural and vice versa.
1.2
In this Agreement the following expressions bear the meanings
assigned to them below and cognate expressions bear
corresponding meanings
1.2.1
"AVR" means Africa Vanguard Resources (Proprietary) Limited,
Registration No. 2000/014503/07;
1.2.2
"Africa Vanguard" means LAK Trading Company No. 9
(Proprietary) Limited, Registration No. 2000/016089/07, the
name of which is in the course of being changed to Africa
Vanguard Resources (Doornkop) (Proprietary) Limited;
1.2.3
"Agreed Rate" means 1.5% (One point five percent) below the
Prime Rate, or Randfontein's cost of borrowing in the event that it
is greater than the Prime Rate less 1.5% (One point five percent);
1.2.4
"Business Day" means a day other than a Saturday, a Sunday or
a day which is a recognised holiday in the Republic of South
Africa;
1.2.5
"Bridging Loan Agreement" means a short term loan agreement
to be entered into between Nedbank and Africa Vanguard, in
terms of which Nedbank lends and advances an amount of
R19 600 000,00 (Nineteen million six hundred thousand rands) to
Page 5
Africa Vanguard to be used by Africa Vanguard to pay the value-
added tax referred to in clause 5.1.1, which loan will be
guaranteed by Randfontein;
1.2.6
"Cession" means a deed of cession to be entered into between
Africa Vanguard and Randfontein, in terms of which Africa
Vanguard cedes its reversionary right to receive profits from the
Joint Venture to Randfontein in securitatem debiti, as security for
the payment of the Purchase Consideration and the fulfilment by
Africa Vanguard of its obligations under the Joint Venture
Agreement, it being recorded that Nedbank will take a first cession
of the profits as part of the Security Documents;
1.2.7
"Conditions Precedent" means the conditions precedent set out
in clause 3;
1.2.8
"Control" means (and "Controlled" shall have a corresponding
meaning) -
1.2.8.1
being the beneficial holder/s of the majority of the issued share
capital of the subject company; and
1.2.8.2
having the unfettered right to exercise, or cause to be
exercised, directly or indirectly, the majority of the voting rights
in the subject company; and
1.2.8.3
having
the
unfettered right to appoint or remove, or cause to be
appointed or removed, directly or indirectly, directors holding a
majority of the voting rights at meetings of the board of the
subject company;
1.2.9
"CPIX" means the average annual rate of change (expressed as a
percentage) in the Consumer Price Index, excluding interest rates
on mortgage bonds, for metropolitan areas as published in the
Government Gazette by Statistics South Africa, or such other
Page 6
index reflecting the official rate of inflation in the Republic of South
Africa as may replace it, which annual change shall be determined
by comparing the most-recently published index with the index
published in respect of the corresponding month in the previous
year;
1.2.10
"Doornkop Mining Area" means the area outlined in ▇▇▇▇▇ on
the plan annexed hereto marked "A";
1.2.11
"Effective Date" means the first Business Day after the date of
fulfilment or waiver of the Conditions Precedent;
1.2.12
"Equity Put Option Agreement" means an agreement to be
entered into between Randfontein and AVR, in terms of which
AVR is granted the right for a period of 5 (Five) years after the
Effective Date, in certain circumstances, to sell the entire issued
share capital of Africa Vanguard and all claims on loan account
against Africa Vanguard to Randfontein at an aggregate purchase
price of R30 000 000,00 (Thirty million rands), and Randfontein
will be obliged to acquire same;
1.2.13
"Harmony Group" means Harmony Gold Mining Company
Limited and/or one or more of its subsidiaries, as may be
stipulated by Randfontein and agreed by Harmony Gold Mining
Company Limited;
1.2.14
"Historically Disadvantaged Persons" means historically
disadvantaged persons as defined in the Mineral and Petroleum
Resources ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇;
1.2.15
"Joint Venture" means the joint venture to be established
between Randfontein and Africa Vanguard in terms of the Joint
Venture Agreement;
Page 7
1.2.16
"Joint Venture Agreement" means the agreement to be entered
into, simultaneously with the entering into of this Agreement,
between Randfontein and Africa Vanguard in terms of which they
establish a joint venture to exploit the Doornkop Mining Area;
1.2.17
"Loan Agreement" means a loan agreement to be entered into
between Nedbank and Africa Vanguard, in terms of which
Nedbank lends and advances an amount of R110 000 000,00
(One hundred and ten million rands) to Africa Vanguard to be used
by Africa Vanguard to pay a portion of the Purchase
Consideration, which agreement must be approved in writing by
Randfontein;
1.2.18
"Loan Put Option Agreement" means an agreement to be
entered into between the Harmony Group and Nedbank, in terms
of which Nedbank is granted the right to assign all of its rights and
obligations under the Loan Agreement to the Harmony Group,
provided that its rights and obligations under the Security
Documents are simultaneously assigned to the Harmony Group, it
being recorded that the Loan Put Option Agreement may, subject
to agreement by the Harmony Group, be replaced by a guarantee
from the Harmony Group;
1.2.19
"Mining Authorisation" means mining authorisation ML13/97
granted to Randfontein on 4 August 1997 which covers the
Doornkop Mining Area and which includes the area known as the
▇▇▇▇▇ Section and surrounding areas;
1.2.20
"Mining Lease" means mining lease 31/91, which is outlined in
green on the plan annexed hereto marked annexe "B";
1.2.21
"Nedbank" means Nedbank Limited, Registration No.
1951/000009/06;
1.2.22
"Parties" means the parties to this Agreement;
Page 8
1.2.23
"Pledge" means a deed of pledge and cession to be entered into
between AVR and Randfontein, in terms of which AVR pledges
and cedes, for a period of 6 (Six) years from the Effective Date, its
reversionary right in and to the entire issued share capital of Africa
Vanguard to Randfontein in securitatem debiti, as security for the
payment of the Purchase Consideration and the fulfilment by
Africa Vanguard of its obligations under the Joint Venture
Agreement, it being recorded that Nedbank will take a first pledge
and cession of the share capital as part of the Security
Documents;
1.2.24
"Prime Rate" means the rate (per cent, per annum) from time to
time charged by ABSA Bank Limited for similar amounts on
unsecured overdraft to its prime customers in good standing in the
private sector, as certified by any manager of that bank whose
appointment it will not be necessary to prove, calculated on a daily
basis and compounded monthly in arrear;
1.2.25
"Purchase Consideration" means the purchase consideration
payable by Africa Vanguard to Randfontein for the Sale Asset,
details of which are set out in clause 5.1;
1.2.26
"Put Option Agreements" means the Loan Put Option
Agreement and the Equity Put Option Agreement;
1.2.27
"Randfontein" means Randfontein Estates Limited,
Registration Number. 1889/000251/06;
1.2.28
"Randfontein Call Option Agreement" means an agreement to
be entered into between Randfontein and AVR, in terms of which
Randfontein is granted the right to acquire the entire issued share
capital of Africa Vanguard and all claims on loan account against
Africa Vanguard from AVR at the fair market value of such share
capital and claims in the event that
-
Page 9
1.2.28.1
Randfontein's
loan
account in the Joint
Venture (expressed as a
percentage of the total loan accounts in the Joint Venture) is in
excess of its Participation Interest (as defined in the Joint
Venture Agreement) by an amount of more than
R32 000 000,00 (Thirty two million rands), a period of 6 (Six)
years has expired since the Effective Date and such excess
amount has not been reduced by the introduction of funds by
Africa Vanguard after having received not less than 30 (Thirty)
days written notice from Randfontein to do so; and/or
1.2.28.2
▇▇▇▇▇▇▇ ▇▇▇▇▇, whilst he is alive and not permanently
incapacitated -
1.2.28.2.1
is not, at any time during a period of 5 (Five)years from the
Effective Date, the beneficial holder of 35% (Thirty five
percent) or more of the issued share capital of AVR; or
1.2.28.2.2
does not, at any time during a period of 5 (Five) years from
the Effective Date, have the unfettered right to exercise, or
cause to be exercised, directly or indirectly, 35% (Thirty five
percent) or more of the voting rights in AVR; or
1.2.28.2.3
does not, at any time during a period of 5 (Five) years from
the Effective Date, have the unfettered right to appoint or
remove, or cause to be appointed or removed, directly or
indirectly, directors holding 35% (Thirty five percent) or more
of the voting rights at meetings of the board of AVR; and/or
1.2.28.3
during a period of 5 (Five) years from the Effective Date, any
person/s or entity/ies, other than those listed in annexe "D"
hereto, becomes
1.2.28.3.1
the beneficial holder/s of 35% (Thirty five percent) or more of
the issued share capital of AVR; or
Page 10
1.2.28.3.2
obtains the right to exercise, or cause to be exercised,
directly or indirectly, 35% (Thirty five percent) or more of the
voting rights in AVR, or
1.2.28.3.3
obtains the right appoint or remove, or cause to be appointed
or removed, directly or indirectly, directors holding 35%
(Thirty five percent) or more of the voting rights at meetings
of the board of AVR,
without the prior written approval of Randfontein, which approval,
in respect of clause 1.2.28.3, will not be withheld unreasonably by
Randfontein in the event that AVR wishes to introduce institutional
funders;
1.2.29
"Sale Asset" means an undivided 26% (Twenty six percent)
share in the Mining Lease, excluding that portion to be abandoned
in accordance with the provisions of clause 3.1.16;
1.2.30
"Security Documents" means documents recording the security
to be taken by Nedbank in respect of the amount to be lent and
advanced to Africa Vanguard under the Loan Agreement, which
documents must be approved in writing by Randfontein;
1.2.31
"Services Agreement" means an agreement to be entered into
between Randfontein and the Joint Venture, in terms of which
Randfontein agrees to provide the Joint Venture with all services
required by it for the conduct of its business including, without
limitation, the services set out in annexe "C" hereto, for a service
fee equal to the cost to Randfontein of providing such services,
provided that Randfontein shall be entitled to sub-contract any of
the services or to procure that such services are rendered directly
by third parties;
1.2.32
"Signature Date" means the date of signature of this Agreement
by the Party last signing; and
Page 11
1.2.33
"Subscription Agreement" means an agreement to be entered
into between AVR, and persons approved by Randfontein in
writing (which approval shall not be unreasonably withheld), in
terms of which such persons subscribe for shares in AVR at an
aggregate subscription price of not less than R30 000 000,00
(Thirty million rands), all or a portion of which shall be advanced
by AVR to Africa Vanguard on loan account and utilised by Africa
Vanguard, together with the amount advanced in terms of the
Loan Agreement, to pay a portion of the Purchase Consideration.
1.3
Any substantive provision conferring rights or imposing obligations on
any party in the interpretation clause shall be given effect to as if it
were a substantive provision in the body of the Agreement.
1.4
Words and expressions defined in any clause shall, unless the
application of any such word or expression is specifically limited to
that clause, bear the meaning assigned to such word or expression
throughout this Agreement.
1.5
The terms "holding company" and "subsidiary" shall bear the
meanings assigned to them in the Companies Act.
1.6
No provision herein shall be construed against or interpreted to the
disadvantage of any Party by reason of such Party having or being
deemed to have structured, drafted or introduced such provision.
1.7
The
eiusdem generis rule shall not apply and whenever the term
"including" is used followed by specific examples, such examples
shall not be construed so as to limit the meaning of that term.
1.8
Unless
specifically
otherwise provided, any number of days
prescribed shall be determined by excluding the first and including
the last day or, where the last day falls on a Saturday, Sunday or
public holiday, the next succeeding Business Day.
Page 12
1.9
A reference to any statutory enactment shall be construed as a
reference to that enactment as at the Signature Date and as
amended or re-enacted from time to time.
1.10
This Agreement incorporates the annexes which annexes shall have
the same force and effect as if set out in the body of this Agreement.
In this Agreement the word "Agreement" refers to this Agreement
and the words "clause" or "clauses" and "annexe" or "annexes"
refer to clauses of and annexes to this Agreement.
2
RECITALS
2.1
Randfontein is the holder of the Mining Lease.
2.2
Africa Vanguard wishes to purchase the Sale Asset from
Randfontein, and Randfontein is prepared to sell the Sale Asset to
Africa Vanguard, on the terms and subject to the conditions herein
contained.
3
CONDITIONS PRECEDENT
3.1
Save for the provisions of clause 1, this clause 3 and clauses 9 to 15
which will become effective immediately, this Agreement is subject to
the fulfilment of the conditions precedent that
3.1.1
Randfontein confirms in writing that it has been provided with proof
to its satisfaction that AVR is, and will be at the Effective Date, the
sole shareholder of Africa Vanguard;
3.1.2
Randfontein confirms in writing that it has been provided with proof
to its satisfaction that AVR and Africa Vanguard are Controlled by
Historically Disadvantaged Persons materially in accordance with
the Group Structure listed in the Memorandum handed to
Randfontein on 4 December 2002;
Page 13
3.1.3
Ernst & Young provide the Parties with a written opinion on the tax
consequences of the entering into of this Agreement and the
Parties, acting reasonably, confirm that they are satisfied with
such tax consequences;
3.1.4
Africa Vanguard's memorandum and articles of association are
amended, to Randfontein's satisfaction, so as to provide that, until
the later of the termination of the Joint Venture and Africa
Vanguard ceasing to own the Sale Asset
3.1.4.1
no further shares in Africa Vanguard's share capital may be
created or issued;
3.1.4.2
no shares in Africa Vanguard's share capital may be disposed
of or otherwise transferred;
3.1.4.3
no rights attaching to shares in Africa Vanguard's share capital
may be varied;
3.1.4.4
no director may be appointed to the Board of Directors of Africa
Vanguard;
3.1.4.5
no resolution of the shareholders of Africa Vanguard may be
passed;
3.1.4.6
Africa Vanguard may not incur any liabilities (including
contingent liabilities), other than in terms of the Joint Venture
Agreement and necessary reasonable audit, legal and
administration fees;
3.1.4.7
Africa Vanguard may not enter into any agreement, whether
oral or in writing, save as provided for in this Agreement; and
3.1.4.8
Africa Vanguard's memorandum and articles of association may
not be amended,
Page 14
without Randfontein's prior written consent, which consent may
not be unreasonably withheld in respect of the matters referred to
in clauses 3.1.4.4 to 3.1.4.7;
3.1.5
the Bridging Loan Agreement is entered into and becomes
unconditional in accordance with its terms, save for any reference
to this Agreement;
3.1.6
the Loan Agreement is entered into and becomes unconditional in
accordance with its terms, save for any reference to this
Agreement;
3.1.7
the Security Documents are entered into and become
unconditional in accordance with their terms, save for any
reference to this Agreement;
3.1.8
the Put Option Agreements are entered into and become
unconditional in accordance with their terms, save for any
reference to this Agreement;
3.1.9
3.1.10
the Randfontein Call Option Agreement is entered into and
becomes unconditional in accordance with its terms, save for any
reference to this Agreement;
the Services Agreement is entered into and becomes
unconditional in accordance with its terms, save for any reference
to this Agreement;
3.1.11
3.1.12
the Cession is entered into and becomes unconditional in
accordance with its terms, save for any reference to this
Agreement;
the Pledge is entered into and becomes unconditional in
accordance with its terms, save for any reference to this
Agreement;
Page 15
the Subscription Agreement is entered into and becomes
unconditional in accordance with its terms, save for any reference
to this Agreement;
3.1.14
3.1.13
the Parties reach agreement with the Department of Minerals and
Energy on a mechanism to provide for the rehabilitation of the
Doornkop Mining Area, it being agreed that Randfontein will bear
the cost of such rehabilitation up to a maximum amount of
R6 000 000,00 (Six million rand), escalated annually on the
anniversary of the Effective Date by the CPIX, and that any
additional cost of rehabilitation will be for the Joint Venture's
account and will be provided for and paid by the Joint Venture on
an annual basis;
3.1.15
the Minister of Minerals & Energy consents to the cession of the
Sale Asset to Africa Vanguard;
3.1.16
3.1.17
that portion of the Mining Lease which is hatched in blue on the
plan annexed hereto marked annexe "B" is abandoned by
Randfontein with the consent of the Minister of Minerals & Energy;
Randfontein
abandons that portion of the Mining Authorisation in
respect of the Doornkop Mining Area, subject to the fulfilment of
the Condition Precedent contained in clause 3.1.18 and the Mining
Authorisation remaining in full force and effect in respect of the
area known as the ▇▇▇▇▇ Section and surrounding areas; and
3.1.18
a mining authorisation in terms of the Minerals Act, 1991 (Act No.
50 of 1991) is granted to the Joint Venture in respect of the
Doornkop Mining Area, or equivalent mining rights in terms of the
Mineral and Petroleum Resources Development Act are granted to
the Joint Venture in the event that such Act becomes effective
prior to the Effective Date and is applicable to the Joint Venture's
right to mine the Doornkop Mining Area.
Page 16
3.2
Each of the Parties will use reasonable commercial endeavours and
the Parties will co-operate in good faith to procure the fulfilment of
the Conditions Precedent as soon as reasonably possible after the
Signature Date.
3.3
The Parties will be entitled to waive fulfilment of any of the Conditions
Precedent by agreement in writing.
3.4
Unless the Conditions Precedent have been fulfilled by not later than
17:00 on 30 May 2003, (or such later date as may be agreed in
writing by the Parties) the provisions of this Agreement will fall away
and be of no further force or effect and the status quo ante will be
restored as near as may be and no Party shall have any claim
against any other party in terms hereof or arising from the failure of
the Conditions Precedent, save for any claims arising from a breach
of the provisions of clause 3.2.
3.5
Notwithstanding anything to the contrary herein contained, the
provisions of clause 1, this clause 3 and clauses 9 to 15 will survive
the failure of this Agreement to become unconditional.
4
SALE OF SALE ASSET
4.1
Randfontein hereby sells the Sale Asset to Africa Vanguard, which
hereby purchases the Sale Asset, with effect from the Effective Date.
4.2
4.3
4.4
Possession and effective control of the Sale Asset will be given to
Africa Vanguard on the Effective Date.
Notwithstanding
the
Signature Date, but subject to the fulfilment of
the Conditions Precedent, risk in and to and the benefit of the Sale
Asset will pass to Africa Vanguard on the Effective Date.
This Agreement is subject to the fundamental term that,
notwithstanding possession and effective control of the Sale Asset
having been given to Africa Vanguard, Randfontein's title in and to
Page 17
and ownership of the Sale Asset will not pass to Africa Vanguard and
ownership of the Sale Asset will remain vested in Randfontein until
that portion of the Purchase Consideration referred to in clause 5.1.1
has been paid in full in accordance with the provisions of this
Agreement. Subject to the payment of the said portion of the
Purchase Consideration, ownership of the Sale Asset will pass to
Africa Vanguard on registration of cession of the Sale Asset into the
name of Africa Vanguard.
4.5
Africa Vanguard agrees that the Sale Asset is sold voetstoots, and
that, save for the warranties set out in clause 6 and in the Joint
Venture Agreement, Randfontein is not bound by any warranties,
representations, undertakings or the like, express or implied, with
regard to the Sale Asset or any other matter affecting the Sale Asset.
5
PURCHASE CONSIDERATION AND PAYMENT
5.1
The consideration payable for the Sale Asset is an amount of
R250 000 000,00 (Two hundred and fifty million rands) plus value-
added tax thereon, which amount will be paid as follows
5.1.1
5.1.2
R140 000 000,00 (One hundred and forty million rands), plus
value-added tax thereon, in cash on the Effective Date; and
by
Africa
Vanguard
paying to Randfontein, as provided in clause
5.3, the amounts calculated by applying the formula set out below,
plus value-added tax thereon ("Secondary Consideration"),
which had a value of R110 000 000,00 (One hundred and ten
million rands) on 11 November 2002, as determined by Rand
Merchant Bank Limited.
FORMULA:
X = (A- B) x C
Page 18
Where -
X = the monthly amount payable in respect of the Secondary
Consideration excluding value-added tax, provided that, where
X is a negative amount, no amount will be payable by Africa
Vanguard;
A = the aggregate Rand proceeds received by or accrued to the
Joint Venture in respect of the sale of gold during the month
divided by the kilograms of gold sold during that month, or in the
event that no gold is sold during the month, the average London
p.m. fix quoted for gold during the month (expressed as United
States Dollars per kilogram), converted into Rands by applying
the average Dollar/Rand exchange rate for that month quoted
by ABSA Bank Limited;
B = the Rand/Kilogram amount for the month listed in the third
column of annexe "E"; and
C = the Kilograms for the month listed in the fourth column of
annexe "E".
5.2
In the event that the actual amounts paid to Randfontein in respect of
the Purchase Consideration amount to less or more than
R250 000 000,00 (Two hundred and fifty million rands), the Purchase
Consideration will be deemed to have been reduced or increased
accordingly and Randfontein shall not be entitled to claim any deficit
from, nor shall it be obliged to account for any surplus to, Africa
Vanguard.
5.3
The Secondary Consideration will be calculated by Randfontein at
the end of each month, for a period of 10 (Ten) years after the
Effective Date (commencing on 31 July 2003 and ending on
30 June 2013), and will be paid, in partial or total discharge of Africa
Vanguard's obligation to Randfontein to pay the Secondary
Page 19
Consideration, as the case may be, directly to Randfontein on behalf
of Africa Vanguard from the monthly distribution of profits due to
Africa Vanguard.
5.4
In the event that any monthly distribution referred to in clause 5.3 is
less than that portion of the Secondary Consideration due and owing
at that point in time, then the deficit will constitute a loan made by
Randfontein to Africa Vanguard and shall bear interest at the Agreed
Rate ("Loan"). The balance of the Loan outstanding from time to
time will be paid directly to Randfontein on behalf of Africa Vanguard
from the monthly distribution of profits due to Africa Vanguard and
any amount not paid to Randfontein will, after the expiry of a period
of 10 (Ten) years from the Effective Date, be repayable by Africa
Vanguard on 90 (Ninety) days written notice from Randfontein. For
the purposes of clarity, it is recorded that any such amount will be
included in the calculation of the R32 000 000,00 (Thirty two million
rands) referred to in clause 1.2.28.1
5.5
For the purposes of clarity, it is recorded that no amounts whatsoever
will be paid by the Joint Venture to Africa Vanguard until all amounts
then due to Randfontein in respect of the Secondary Consideration
have been paid in full.
5.6
In the event that Africa Vanguard is dissatisfied with Randfontein's
calculation of any portion of the Secondary Consideration it will be
entitled to have the matter referred for determination to independent
auditors agreed between the Parties, or failing agreement, appointed
by the President for the time being of the Gauteng Society of
Chartered Accountants -
5.6.1
whose decision will be made within 10 (Ten) Business Days of
their appointment;
Page 20
5.6.2
who will act as experts and not as arbitrators and will be obliged to
receive evidence;
5.6.3
whose decision will, in the absence of manifest error, be final and
binding on the Parties; and
5.6.4
who
will
determine
the liability for their costs on the basis that
Africa Vanguard shall be responsible for the costs unless
Randfontein's calculation is materially inaccurate.
5.7
If Africa Vanguard fails to make payment to Randfontein of any
amount owing in terms of this Agreement, save for the Secondary
Consideration, on the due date for payment thereof, then such
amount shall bear interest at the Agreed Rate from the due date for
payment to the date of actual payment, both days inclusive.
6
WARRANTIES
Randfontein hereby warrants to and in favour of Africa Vanguard that
6.1
it is the sole holder of the Mining Lease and will remain the sole
holder until the Sale Asset is ceded to Africa Vanguard;
6.2
it has, subject to the fulfilment of the condition precedent set out in
clause 3.1.15, the right and is able to cede the Sale Asset to Africa
Vanguard;
6.3
the Sale Asset is not subject, and will not become subject at any time
prior to the cession of the Sale Asset to Africa Vanguard, to any
lease, lien, hypothec, mortgage, notarial bond, pledge or other
encumbrance whatsoever; and
6.4
save for Africa Vanguard in terms of this Agreement, no person has
any right (including an option or right of first refusal) to acquire the
Sale Asset.
Page 21
7
APPLICATION FOR MINING AUTHORISATIONS
Randfontein hereby consents in terms of section 9(1)(b) of the Minerals
Act, 1991 (Act No. 50 of 1991) to the Joint Venture applying for the
mining authorisation referred to in clause 3.1.18.
8
DELIVERY
8.1
Randfontein shall, as soon as possible after the Effective Date,
procure the drafting, notarial execution and registration of a notarial
deed of cession of the Sale Asset. Each of the Parties undertakes to
do all such acts and sign all such documents as may be necessary or
incidental to complete, execute and register such document.
8.2
The drafting, execution and registration of the notarial deed of
cession referred to in clause 8.1 shall be attended to by
Randfontein's attorneys and will be made available to Africa
Vanguard's attorneys for approval prior to execution .
9
CO-OPERATION
The Parties undertake at all times to co-operate with each other in good
faith in order to carry out this Agreement and to implement all
transactions and steps contemplated herein. The Parties further
undertake not to take any action or to omit taking any action which will
result in delaying or impeding the implementation of this Agreement.
10
BREACH
10.1
Subject to the provisions of clause 10.3, in the event of either of the
Parties ("Defaulting Party") committing a breach of any term or
condition of this Agreement prior to the Effective Date, then the party
not in default ("Aggrieved Party") is entitled to give to the Defaulting
Party 10 (Ten) Business Days notice in writing to remedy such
breach. In the event of the Aggrieved Party giving any such notice
and the Defaulting Party failing to comply with the notice, or in the
Page 22
event of such breach not being capable of being remedied, then the
Aggrieved Party will forthwith be entitled to cancel this Agreement,
or, alternatively, to claim immediate performance and/or payment
from the Defaulting Party of all of its obligations in terms of this
Agreement, whether or not the same are then due for performance or
payment.
10.2
The aforegoing is without prejudice to such rights as the Aggrieved
Party may have at law, including the right to claim damages.
10.3
The Parties agree that the cancellation of this Agreement in the event
of a breach after the payment of the amount of R140 000 000,00
(One hundred and forty million rands) referred to in clause 5.1.1
would be an inappropriate and insufficient remedy and that
irreparable damage would occur if the provisions of this Agreement
were not complied with. It is accordingly agreed that, in the event of
a breach after the payment of the amount of R140 000 000,00 (One
hundred and forty million rands) referred to in clause 5.1.1 which is
not remedied within 10 (Ten) Business Days of written notice
requiring the breach to be remedied, the Aggrieved Party shall be
entitled (without prejudice to any other rights which it may have in law
save for the right to cancel the agreement) to an order for specific
performance and to recover any damages which it may have
suffered.
11 DISPUTES
11.1
In the event of any dispute or difference arising between the Parties
hereto relating to or arising out of this Agreement, including the
validity, implementation, execution, interpretation, rectification,
termination or cancellation of this Agreement, the Parties shall
forthwith meet to attempt to settle such dispute or difference, and
failing such settlement within a period of 14 (Fourteen) days, the said
dispute or difference shall on written demand by either Party to the
Page 23
dispute be submitted to arbitration in Johannesburg in accordance
with the rules of the Arbitration Foundation of Southern Africa
("Foundation") by an arbitrator or arbitrators appointed by the
Parties.
11.2
Should the Parties fail to agree on an arbitrator within 10 (Ten) days
after the arbitration has been demanded, the arbitrator shall be
nominated at the request of either Party to the dispute by the
Foundation.
11.3
The Parties irrevocably agree that the submission to arbitration in
terms of this clause is subject to the Parties' rights of appeal set out
hereunder.
11.4
Either Party to the arbitration may appeal the decision of the
arbitrator within a period of 21 (Twenty one) days after the arbitrator's
ruling has been handed down by giving written notice to that effect to
the other Party. The appeal shall be dealt with in accordance with
the rules of the Foundation by a panel of 3 (Three) arbitrators
appointed by the Foundation.
11.5
The decision of the arbitrator shall be final and binding on the Parties
to the arbitration after the expiry of the period of 21 (Twenty one)
days from the date of the arbitrator's ruling if no appeal has been
lodged by either Party. A decision which becomes final and binding
in terms of this clause 11.5, and a decision of the arbitrators referred
to in clause 11.4, may be made an order of court at the instance of
either Party.
11.6
Nothing herein contained shall be deemed to prevent or prohibit
either Party from applying to the appropriate Court for urgent relief.
11.7
The provisions of this clause will continue to be binding on the
Parties notwithstanding any termination or cancellation of the
agreement.
Page 24
12 NOTICES AND DOMICILIUM
12.1
The Parties choose as their respective domicilium citandi et
executandi for the purposes of legal proceedings and for the
purposes of giving or sending any notice provided for or necessary in
terms of this Agreement, the following addresses:
Name Physical
Address
Randfontein
Block
27
Randfontein Office Park
Cnr Main Reef Road & ▇▇▇▇ Avenue
Randfontein
Attention:
The Company Secretary
Name
Physical
Address
Africa ▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
provided that a Party may change its physical address by written
notice to the other Party to that effect. Such change of address will
be effective 7 (Seven) days after receipt of notice of the change.
12.2
All notices to be given in terms of this agreement will:
12.2.1
be given in writing;
12.2.2
be hand delivered; and
12.2.3
be presumed to have been received on the date of delivery.
12.3
Notwithstanding
the
above, any notice actually received (save by
email or any other similar electronic transmission) by the Party to
whom the notice is addressed will be deemed to have been properly
given and received, notwithstanding that such notice has not been
given in accordance with the provisions of this clause.
Page 25
13 GENERAL
13.1
This Agreement constitutes the whole of the agreement between the
Parties relating to the matters dealt with in this Agreement and save
to the extent otherwise provided herein no undertaking,
representation, term or condition relating to the subject matter of this
Agreement not incorporated in this Agreement shall be binding on
either of the Parties.
13.2
No variation, addition, deletion, or agreed cancellation will be of any
force or effect unless in writing and signed by or on behalf of the
Parties.
13.3
No waiver of any of the terms and conditions of this Agreement will
be binding or effectual for any purpose unless in writing and signed
by or on behalf of the Party giving the same. Any such waiver will be
effective only in the specific instance and for the purpose given. No
failure or delay on the part of either Party in exercising any right,
power or privilege hereunder will constitute or be deemed to be a
waiver thereof, nor will any single or partial exercise of any right,
power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
13.4
Save as otherwise herein provided, neither this Agreement nor any
part, share or interest therein nor any rights or obligations hereunder
may be ceded, assigned, or otherwise transferred without the prior
written consent of the other Party.
13.5
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which together shall
constitute one and the same agreement as at the date of signature of
the Party last signing one of the counterparts. The Parties undertake
to take whatever steps may be necessary to ensure that both
counterparts are duly signed by each of them without delay.
Page 26
14 APPLICABLE LAW AND JURISDICTION
14.1
This Agreement will in all respects be governed by and construed
under the laws of the Republic of South Africa.
14.2
Subject to the provisions of this Agreement, the Parties hereby
consent and submit to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the High Court of the Republic of
South Africa in any dispute arising from or in connection with this
Agreement.
15 COSTS
15.1
Randfontein
will
bear and pay 74% (Seventy four) percent of the fees
to be charged by Nedbank, as set out in the mandate letter signed by
both Parties on 16 January 2003, and the costs of registration of a
notarial deed of cession of the Sale Asset. The balance of 26%
(Twenty six) percent of such costs shall be borne by Africa Vanguard
and paid by Randfontein on its behalf, such amount being credited to
the Loan and dealt with, mutatis mutandis, in accordance with the
provisions of clauses 5.3 and 5.4. In the event that this Agreement
does not become unconditional, such amount shall become
repayable by Africa Vanguard on demand by Randfontein.
15.2
Save as provided for in clause 15.1, each Party will bear and pay its
own costs and expenses of and incidental to the negotiation, drafting,
preparation and implementation of this Agreement.
THUS DONE AND SIGNED at Sandton on the day, month and year first
aforewritten.
For and on behalf of
RANDFONTEIN ESTATES LIMITED
RANDFONTEIN ESTATES LIMITED
who warrants that he is duly authorised
Page 27
For and on behalf of
LAK TRADING COMPANY NO. 9
(PROPRIETARY) LIMITED
LAK TRADING COMPANY NO. 9
(PROPRIETARY) LIMITED
who warrants that he is duly authorised
QUOD ATTESTOR
_________________________________
NOTARY PUBLIC
Page 28
ANNEXE "A"
PLAN OF THE DOORNKOP MINING AREA
Page 29
ANNEXE "B"
PLAN OF MINING LEASE
Page 30
ANNEXE "C"
SERVICES
- Accounting
- Financing
- Costing
- Payment of Creditors
- Payroll
- Procurement
- Training
- Risk Management
- Ventilation
- Projects
- Information Technology
- Security
- Geological & Geostatistical
- Administration
- Provision of Labour
- Human Resources
- Industrial Relations
- Stores
- Distribution
- Training
- Property Services
- Survey
- Engineering
- Workshops
- Medical
- Environmental Control
- Toll Treatment
Page 31
"D"
SCHEDULE OF PROPOSED SHAREHOLDERS OF AVR
ANNEXE "E"
SECONDARY CONSIDERATION
1 2
3
4
Secondary
Consideration
Tranche
Month Ended
Rands/Kilogram
Kilograms
1
31-Jul-03
120,000
20.611
2
31-Aug-03
120,655
20.611
3
30-Sep-03
121,314
20.611
4
31-Oct-03
121,976
20.611
5
30-Nov-03
122,641
20.611
6
31-Dec-03
123,311
20.611
7
31-Jan-04
123,984
20.611
8
29-Feb-04
124,661
20.611
9
31-Mar-04
125,341
20.611
10
30-Apr-04
126,025
20.611
11
31-May-04
126,713
20.611
12
30-Jun-04
127,405
20.611
13
31-Jul-04
128,100
20.672
14
31-Aug-04
128,799
20.672
15
30-Sep-04
129,502
20.672
16
31-Oct-04
130,209
20.672
17
30-Nov-04
130,920
20.672
18
31-Dec-04
131,634
20.672
19
31-Jan-05
132,353
20.672
20
28-Feb-05
133,075
20.672
21
31-Mar-05
133,802
20.672
22
30-Apr-05
134,532
20.672
23
31-May-05
135,266
20.672
24
30-Jun-05
136,004
20.672
25
31-Jul-05
136,747
18.441
26
31-Aug-05
137,493
18.441
27
30-Sep-05
138,244
18.441
28
31-Oct-05
138,998
18.441
29
30-Nov-05
139,757
18.441
30
31-Dec-05
140,520
18.441
31
31-Jan-06
141,287
18.441
32
28-Feb-06
142,058
18.441
33
31-Mar-06
142,833
18.441
34
30-Apr-06
143,613
18.441
35
31-May-06
144,397
18.441
Attorneys
1 2
3
4
Secondary
Consideration
Tranche
Month Ended
Rands/Kilogram
Kilograms
36
30-Jun-06
145,185
18.441
37
31-Jul-06
145,977
39.973
38
31-Aug-06
146,774
39.973
39
30-Sep-06
147,575
39.973
40
31-Oct-06
148,381
39.973
41
30-Nov-06
149,190
39.973
42
31-Dec-06
150,005
39.973
43
31-Jan-07
150,823
39.973
44
28-Feb-07
151,647
39.973
45
31-Mar-07
152,474
39.973
46
30-Apr-07
153,307
39.973
47
31-May-07
154,143
39.973
48
30-Jun-07
154,985
39.973
49
31-Jul-07
155,831
100.373
50
31-Aug-07
156,681
100.373
51
30-Sep-07
157,536
100.373
52
31-Oct-07
158,396
100.373
53
30-Nov-07
159,261
100.373
54
31-Dec-07
160,130
100.373
55
31-Jan-08
161,004
100.373
56
29-Feb-08
161,883
100.373
57
31-Mar-08
162,766
100.373
58
30-Apr-08
163,655
100.373
59
31-May-08
164,548
100.373
60
30-Jun-08
165,446
100.373
61
31-Jul-08
166,349
135.120
62
31-Aug-08
167,257
135.120
63
30-Sep-08
168,170
135.120
64
31-Oct-08
169,088
135.120
65
30-Nov-08
170,011
135.120
66
31-Dec-08
170,939
135.120
67
31-Jan-09
171,872
135.120
68
28-Feb-09
172,810
135.120
69
31-Mar-09
173,753
135.120
70
30-Apr-09
174,701
135.120
71
31-May-09
175,655
135.120
72
30-Jun-09
176,614
135.120
73
31-Jul-09
177,578
135.307
74
31-Aug-09
178,547
135.307
75
30-Sep-09
179,522
135.307
76
31-Oct-09
180,501
135.307
77
30-Nov-09
181,487
135.307
78
31-Dec-09
182,477
135.307
79
31-Jan-10
183,473
135.307
80
28-Feb-10
184,475
135.307
1 2
3
4
Secondary
Consideration
Tranche
Month Ended
Rands/Kilogram
Kilograms
81
31-Mar-10
185,481
135.307
82
30-Apr-10
186,494
135.307
83
31-May-10
187,512
135.307
84
30-Jun-10
188,535
135.307
85
31-Jul-10
189,564
138.973
86
31-Aug-10
190,599
138.973
87
30-Sep-10
191,639
138.973
88
31-Oct-10
192,685
138.973
89
30-Nov-10
193,737
138.973
90
31-Dec-10
194,794
138.973
91
31-Jan-11
195,858
138.973
92
28-Feb-11
196,927
138.973
93
31-Mar-11
198,001
138.973
94
30-Apr-11
199,082
138.973
95
31-May-11
200,169
138.973
96
30-Jun-11
201,261
138.973
97
31-Jul-11
202,360
140.027
98
31-Aug-11
203,464
140.027
99
30-Sep-11
204,575
140.027
100
31-Oct-11
205,691
140.027
101
30-Nov-11
206,814
140.027
102
31-Dec-11
207,943
140.027
103
31-Jan-12
209,078
140.027
104
29-Feb-12
210,219
140.027
105
31-Mar-12
211,367
140.027
106
30-Apr-12
212,520
140.027
107
31-May-12
213,680
140.027
108
30-Jun-12
214,846
140.027
109
31-Jul-12
217,380
136.600
110
31-Aug-12
218,475
136.600
111
30-Sep-12
219,576
136.600
112
31-Oct-12
220,959
136.600
113
30-Nov-12
222,072
136.600
114
31-Dec-12
223,471
136.600
115
31-Jan-13
224,597
136.600
116
29-Feb-13
225,728
136.600
117
31-Mar-13
219,576
136.600
118
30-Apr-13
220,959
136.600
119
31-May-13
222,072
136.600
120
30-Jun-13
223,471
136.600
SECOND ADDENDUM TO
entered into on 21 January 2003
between
RANDFONTEIN ESTATES LIMITED
and
AFRICA VANGUARD RESOURCES (DOORNKOP) (PROPRIETARY)
LIMITED
(formerly LAK Trading Company No. 9 (Proprietary) Limited)
H:\IH\HARMONY\DOORNKOP\SALEADD2.DOC
Page 36
24 June 2003
TABLE OF CONTENTS
| 1 INTERPRETATION | 37 |
| 2 RECITALS | 45 |
| 3 CONDITIONS PRECEDENT | 45 |
| 4 SALE OF SALE ▇▇▇▇▇ | ▇▇ |
| ▇ PURCHASE CONSIDERATION AND PAYMENT | 51 |
| 6 WARRANTIES | 54 |
| 7 APPLICATION FOR MINING AUTHORISATIONS | 55 |
| 8 DELIVERY | 55 |
| 9 CO-OPERATION | 56 |
| 10 BREACH | 57 |
| 11 DISPUTES | 58 |
| 12 NOTICES AND DOMICILIUM | 59 |
| 13 GENERAL | 60 |
| 14 APPLICABLE LAW AND JURISDICTION | 61 |
| 15 COSTS | 62 |
| 16 FURTHER NEGOTIATIONS | 61 |
| 17 SUBSCRIPTIONS FOR SHARES IN AVR | 62 |
LIST OF ANNEXES
A
PLAN OF THE DOORNKOP MINING AREA
B
PLAN OF MINING TITLES
C
SCHEDULE OF PROPOSED SHAREHOLDERS OF AVR
D
SERVICES
E SECONDARY
E SECONDARY
CONSIDERATION
Page 37
WHEREBY THE PARTIES AGREE AS FOLLOWS
The Parties entered into a Notarial Sale Agreement on 21 January 2003
("Sale Agreement"). The Sale Agreement was amended by a First
Addendum entered into between the Parties on 28 May 2003. The Parties
wish to make further amendments to the Sale Agreement and have
accordingly agreed to replace the entire contents of the Sale Agreement with
clauses 16 to 32 below.
16 INTERPRETATION
16.1
In this Agreement -
16.1.1
clause headings are for convenience and are not to be used in its
interpretation;
16.1.2
unless the context indicates a contrary intention an expression
which denotes -
16.1.2.1
any gender includes the other genders;
16.1.2.2
a natural person includes a juristic person and vice versa; and
16.1.2.3
the singular includes the plural and vice versa.
16.2
In this Agreement the following expressions bear the meanings
assigned to them below and cognate expressions bear
corresponding meanings
16.2.1
"AVR" means Africa Vanguard Resources (Proprietary) Limited,
Registration No. 2000/014503/07;
16.2.2
"Africa Vanguard" means Africa Vanguard Resources
(Doornkop) (Proprietary) Limited, Registration No.
2000/016089/07;
Page 38
16.2.3
"Agreed Rate" means 1.5% (One point five percent) below the
Prime Rate, or Randfontein's cost of borrowing in the event that it
is greater than the Prime Rate less 1.5% (One point five percent);
16.2.4
"Business Day" means a day other than a Saturday, a Sunday or
a day which is a recognised holiday in the Republic of South
Africa;
16.2.5
"Bridging Loan Agreement" means a short term loan agreement
to be entered into between Randfontein and Africa Vanguard, in
terms of which Randfontein lends and advances an amount of
R19 600 000,00 (Nineteen million six hundred thousand rands) to
Africa Vanguard to be used by Africa Vanguard to pay the value-
added tax referred to in clause 5.1.1, which loan will be
guaranteed by AVR;
16.2.6
"Cession" means a deed of cession to be entered into between
Africa Vanguard and Randfontein, in terms of which Africa
Vanguard cedes its reversionary right to receive profits from the
Joint Venture to Randfontein in securitatem debiti, as security for
the payment of the Purchase Consideration and the fulfilment by
Africa Vanguard of its obligations under the Joint Venture
Agreement, it being recorded that Nedbank will take a first cession
of the profits as part of the Security Documents;
16.2.7
"Conditions Precedent" means the conditions precedent set out
in clause 3;
16.2.8
"Control" means (and "Controlled" shall have a corresponding
meaning) -
16.2.8.1
being the beneficial holder/s of the majority of the issued share
capital of the subject company; and
Page 39
16.2.8.2
having the unfettered right to exercise, or cause to be
exercised, directly or indirectly, the majority of the voting rights
in the subject company; and
16.2.8.3
having
the
unfettered right to appoint or remove, or cause to be
appointed or removed, directly or indirectly, directors holding a
majority of the voting rights at meetings of the board of the
subject company;
16.2.9
"CPIX" means the average annual rate of change (expressed as a
percentage) in the Consumer Price Index, excluding interest rates
on mortgage bonds, for metropolitan areas as published in the
Government Gazette by Statistics South Africa, or such other
index reflecting the official rate of inflation in the Republic of South
Africa as may replace it, which annual change shall be determined
by comparing the most-recently published index with the index
published in respect of the corresponding month in the previous
year;
16.2.10
"Doornkop Mining Area" means the area depicted as such and
outlined in broken ▇▇▇▇▇ on the plan annexed hereto marked "A";
16.2.11
"Effective Date" means the fifth Business Day after the date of
fulfilment or waiver of the Conditions Precedent;
16.2.12
"Equity Put Option Agreement" means an agreement to be
entered into between Randfontein and AVR, in terms of which
AVR is granted the right for a period of 5 (Five) years and 30
(Thirty) days after the Effective Date, in certain circumstances, to
sell the entire issued share capital of Africa Vanguard and all
claims on loan account against Africa Vanguard to Randfontein at
an aggregate purchase price of R30 000 000,00 (Thirty million
rands), or such lesser amount as may be agreed between
Page 40
Randfontein and AVR, and Randfontein will be obliged to acquire
same;
16.2.13
"Guarantee" means a guarantee provided by Harmony Gold
Mining Company Limited and its major subsidiaries for the
obligations of Africa Vanguard under the Loan Agreement;
16.2.14
"Historically Disadvantaged Persons" means historically
disadvantaged persons as defined in the Mineral and Petroleum
Resources ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇;
16.2.15
"Joint Venture" means the joint venture to be established
between Randfontein and Africa Vanguard in terms of the Joint
Venture Agreement;
16.2.16
"Joint Venture Agreement" means the agreement entered into
on 21 January 2003 between Randfontein and Africa Vanguard, in
terms of which they establish a joint venture to exploit the
Doornkop Mining Area;
16.2.17
"Loan Agreement" means a loan agreement to be entered into
between Nedbank and Africa Vanguard, in terms of which
Nedbank lends and advances an amount of R116 215 000,00
(One hundred and sixteen million two hundred and fifteen
thousand rands) to Africa Vanguard to be used by Africa Vanguard
to pay a portion of the Purchase Consideration, which agreement
must be approved in writing by Randfontein;
16.2.18
"Mining Authorisation" means mining authorisation ML13/97
granted to Randfontein on 4 August 1997 which covers the
Doornkop Mining Area and which includes the area known as the
▇▇▇▇▇ Section and surrounding areas;
16.2.19
"Mining Leases" means an undivided 26% (Twenty six percent)
share in the mining leases forming part of the Mining Titles;
Page 41
16.2.20
"Mining Titles" means all the mining leases, claim areas and
mynpachten in the Doornkop Mining Area, details of which are set
out and outlined in broken ▇▇▇▇▇ on the plan annexed hereto
marked annexe "B";
16.2.21
"Nedbank" means Nedbank Limited, Registration No.
1951/000009/06;
16.2.22
"Parties" means the parties to this Agreement;
16.2.23
"Pledge" means a deed of pledge and cession to be entered into
between AVR and Randfontein, in terms of which AVR pledges
and cedes, for a period of 6 (Six) years from the Effective Date, its
reversionary right in and to the entire issued share capital of Africa
Vanguard to Randfontein in securitatem debiti, as security for the
payment of the Purchase Consideration and the fulfilment by
Africa Vanguard of its obligations under the Joint Venture
Agreement, it being recorded that Nedbank will take a first pledge
and cession of the share capital as part of the Security
Documents;
16.2.24
"Prime Rate" means the rate (per cent, per annum) from time to
time charged by ABSA Bank Limited for similar amounts on
unsecured overdraft to its prime customers in good standing in the
private sector, as certified by any manager of that bank whose
appointment it will not be necessary to prove, calculated on a daily
basis and compounded monthly in arrear;
16.2.25
"Purchase Consideration" means the purchase consideration
payable by Africa Vanguard to Randfontein for the Sale Asset,
details of which are set out in clause 5.1;
16.2.26
"Put Option Agreements" means the Guarantee and the Equity
Put Option Agreement;
Page 42
16.2.27
"Randfontein" means Randfontein Estates Limited,
Registration Number. 1889/000251/06;
16.2.28
"Randfontein Call Option Agreement" means an agreement to
be entered into between Randfontein and AVR, in terms of which
Randfontein is granted the right to acquire the entire issued share
capital of Africa Vanguard and all claims on loan account against
Africa Vanguard from AVR at a purchase price of R30 000 000,00
(Thirty million rands), or such lesser amount as may be agreed
between Randfontein and AVR, (less any amount outstanding
under the Bridging Loan Agreement and less an amount equal to
any distributions, as defined in the Loan Agreement) for a period
of 5 (Five) years and 30 (Thirty) days after the Effective Date, and
thereafter at the fair market value of such share capital and claims
in the event that
16.2.28.1
Randfontein's
loan
account in the Joint Venture (expressed as a
percentage of the total loan accounts in the Joint Venture) is in
excess of its Participation Interest (as defined in the Joint
Venture Agreement) by an amount of more than
R32 000 000,00 (Thirty two million rands), a period of 6 (Six)
years has expired since the Effective Date and such excess
amount has not been reduced by the introduction of funds by
Africa Vanguard after having received not less than 30 (Thirty)
days written notice from Randfontein to do so; and/or
16.2.28.2
▇▇▇▇▇▇▇ ▇▇▇▇▇, whilst he is alive and not permanently
incapacitated -
16.2.28.2.1
is not, at any time during a period of 5 (Five) years from the
Effective Date, the beneficial holder of 35% (Thirty five
percent) or more of the issued share capital of AVR; or
Page 43
16.2.28.2.2
does not, at any time during a period of 5 (Five) years from
the Effective Date, have the unfettered right to exercise, or
cause to be exercised, directly or indirectly, 35% (Thirty five
percent) or more of the voting rights in AVR; or
16.2.28.2.3
does not, at any time during a period of 5 (Five) years from
the Effective Date, have the unfettered right to appoint or
remove, or cause to be appointed or removed, directly or
indirectly, directors holding 35% (Thirty five percent) or more
of the voting rights at meetings of the board of AVR; and/or
16.2.28.3
during a period of 5 (Five) years from the Effective Date, any
person/s or entity/ies, other than those listed in annexe "C"
hereto, becomes
16.2.28.3.1
the beneficial holder/s of 35% (Thirty five percent) or more of
the issued share capital of AVR; or
16.2.28.3.2
obtains the right to exercise, or cause to be exercised,
directly or indirectly, 35% (Thirty five percent) or more of the
voting rights in AVR, or
16.2.28.3.3
obtains the right appoint or remove, or cause to be appointed
or removed, directly or indirectly, directors holding 35%
(Thirty five percent) or more of the voting rights at meetings
of the board of AVR,
without the prior written approval of Randfontein, which approval,
in respect of clause 1.2.28.3, will not be withheld unreasonably by
Randfontein in the event that AVR wishes to introduce institutional
funders;
16.2.29
"Sale Asset" means an undivided 26% (Twenty six percent)
share in the Mining Titles, save for that portion of mining lease
31/91 to be separated in accordance with the provisions of clause
Page 44
3.1.16, which portion will remain 100% (One hundred percent)
held by Randfontein;
16.2.30
"Security Documents" means documents recording the security
to be taken by Nedbank in respect of the amount to be lent and
advanced to Africa Vanguard under the Loan Agreement, which
documents must be approved in writing by Randfontein;
16.2.31
"Services Agreement" means an agreement to be entered into
between Randfontein and the Joint Venture, in terms of which
Randfontein agrees to provide the Joint Venture with all services
required by it for the conduct of its business including, without
limitation, the services set out in annexe "D" hereto, for a service
fee equal to the cost to Randfontein of providing such services,
provided that Randfontein shall be entitled to sub-contract any of
the services or to procure that such services are rendered directly
by third parties; and
16.2.32
"Signature Date" means 21 January 2003.
16.3
Any substantive provision conferring rights or imposing obligations on
any party in the interpretation clause shall be given effect to as if it
were a substantive provision in the body of the Agreement.
16.4
Words and expressions defined in any clause shall, unless the
application of any such word or expression is specifically limited to
that clause, bear the meaning assigned to such word or expression
throughout this Agreement.
16.5
The terms "holding company" and "subsidiary" shall bear the
meanings assigned to them in the Companies Act.
16.6
No provision herein shall be construed against or interpreted to the
disadvantage of any Party by reason of such Party having or being
deemed to have structured, drafted or introduced such provision.
Page 45
16.7
The
eiusdem generis rule shall not apply and whenever the term
"including" is used followed by specific examples, such examples
shall not be construed so as to limit the meaning of that term.
16.8
Unless
specifically
otherwise provided, any number of days
prescribed shall be determined by excluding the first and including
the last day or, where the last day falls on a Saturday, Sunday or
public holiday, the next succeeding Business Day.
16.9
A reference to any statutory enactment shall be construed as a
reference to that enactment as at the Signature Date and as
amended or re-enacted from time to time.
16.10
This Agreement incorporates the annexes which annexes shall have
the same force and effect as if set out in the body of this Agreement.
In this Agreement the word "Agreement" refers to this Agreement
and the words "clause" or "clauses" and "annexe" or "annexes"
refer to clauses of and annexes to this Agreement.
17 RECITALS
17.1
Randfontein is the holder of the Mining Titles.
17.2
Africa Vanguard wishes to purchase the Sale Asset from
Randfontein, and Randfontein is prepared to sell the Sale Asset to
Africa Vanguard, on the terms and subject to the conditions herein
contained.
18 CONDITIONS PRECEDENT
18.1
Save for the provisions of clause 16, this clause 3 and clauses 9 to
32 which will become effective immediately, this Agreement is
subject to the fulfilment of the conditions precedent that
Page 46
18.1.1
Randfontein confirms in writing that it has been provided with proof
to its satisfaction that AVR is, and will be at the Effective Date, the
sole shareholder of Africa Vanguard;
18.1.2
Randfontein confirms in writing that it has been provided with proof
to its satisfaction that AVR and Africa Vanguard are Controlled by
Historically Disadvantaged Persons materially in accordance with
the Group Structure listed in the Memorandum handed to
Randfontein on 4 December 2002;
18.1.3
Ernst & Young provide the Parties with a written opinion on the tax
consequences of the entering into of the Sale Agreement and the
Parties, acting reasonably, confirm that they are satisfied with
such tax consequences;
18.1.4
Africa Vanguard's memorandum and articles of association are
amended, to Randfontein's satisfaction, so as to provide that, until
the later of the termination of the Joint Venture and Africa
Vanguard ceasing to own the Sale Asset
18.1.4.1
no further shares in Africa Vanguard's share capital may be
created or issued;
18.1.4.2
no shares in Africa Vanguard's share capital may be disposed
of or otherwise transferred;
18.1.4.3
no rights attaching to shares in Africa Vanguard's share capital
may be varied;
18.1.4.4
no director may be appointed to the Board of Directors of Africa
Vanguard;
18.1.4.5
no resolution of the shareholders of Africa Vanguard may be
passed;
Page 47
18.1.4.6
Africa Vanguard may not incur any liabilities (including
contingent liabilities), other than in terms of the Joint Venture
Agreement and necessary reasonable audit, legal and
administration fees;
18.1.4.7
Africa Vanguard may not enter into any agreement, whether
oral or in writing, save as provided for in this Agreement; and
18.1.4.8
Africa
Vanguard's memorandum and articles of association may
not be amended,
without Randfontein's prior written consent, which consent may
not be unreasonably withheld in respect of the matters referred to
in clauses 3.1.4.4 to 3.1.4.7;
18.1.5
the Bridging Loan Agreement is entered into and becomes
unconditional in accordance with its terms, save for any reference
to this Agreement;
18.1.6
the Loan Agreement is entered into and becomes unconditional in
accordance with its terms, save for any reference to this
Agreement;
18.1.7
the Security Documents are entered into and become
unconditional in accordance with their terms, save for any
reference to this Agreement;
18.1.8
the
Put Option Agreements are entered into and become
unconditional in accordance with their terms, save for any
reference to this Agreement;
18.1.9
the Randfontein Call Option Agreement is entered into and
becomes unconditional in accordance with its terms, save for any
reference to this Agreement;
Page 48
18.1.10
the Services Agreement is entered into and becomes
unconditional in accordance with its terms, save for any reference
to this Agreement;
18.1.11
the Cession is entered into and becomes unconditional in
accordance with its terms, save for any reference to this
Agreement;
the Pledge is entered into and becomes unconditional in
18.1.12
accordance with its terms, save for any reference to this
Agreement;
18.1.13
an agreement is entered into between AVR and persons approved
by Randfontein in writing (which approval shall not be
unreasonably withheld), in terms of which such persons subscribe
for shares and/or debentures in AVR (or advance a loan which is
compulsorily convertible into shares in AVR) at an aggregate
subscription price of not less than R35 000 000,00 (Thirty five
million rands), or such lesser amount as may be approved by
Randfontein in writing, of which R30 000 000,00 (Thirty million
rands) is advanced by AVR to Africa Vanguard on loan account to
be utilised by Africa Vanguard, together with the amount advanced
in terms of the Loan Agreement, to pay that portion of the
Purchase Consideration referred to in clause 5.1.1;
18.1.14
the Parties reach agreement with the Department of Minerals and
Energy on a mechanism to provide for the rehabilitation of the
Doornkop Mining Area, it being agreed that Randfontein will bear
the cost of such rehabilitation up to a maximum amount of
R6 000 000,00 (Six million rand), escalated annually on the
anniversary of the Effective Date by the CPIX, and that any
additional cost of rehabilitation will be for the Joint Venture's
account and will be provided for and paid by the Joint Venture on
an annual basis;
Page 49
18.1.15
the Minister of Minerals & Energy consents to the cession of the
Sale Asset to Africa Vanguard;
18.1.16
that portion of mining lease 31/91 which is hatched in blue on the
plan annexed hereto marked annexe "B" ("Remainder") is
separated from the balance of mining lease 31/91, which will result
in the
18.1.16.1
Remainder being reflected on diagram RMT 41/86, registered at
the Surveyor-General's office under number S.G. 9/86; and
18.1.16.2
balance of mining lease 31/91 being reflected on a separate
diagram approved by the Department of Minerals & Energy,
registered at the Surveyor-General's office under number S.G.
B2/2003 and registered in the office of the Registrar of Mining
Titles;
18.1.17
Randfontein
abandons that portion of the Mining Authorisation in
respect of the Doornkop Mining Area, subject to the fulfilment of
the Condition Precedent contained in clause 3.1.18 and the Mining
Authorisation remaining in full force and effect in respect of the
area known as the ▇▇▇▇▇ Section and surrounding areas;
18.1.18
a mining authorisation in terms of the Minerals Act, 1991 (Act No.
50 of 1991) is granted to the Joint Venture in respect of the
Doornkop Mining Area; and
18.1.19
Randfontein's attorneys certify in writing that notarial deeds of
cession of the Mining Leases have been executed and registered.
18.2
Each of the Parties will use reasonable commercial endeavours and
the Parties will co-operate in good faith to procure the fulfilment of
the Conditions Precedent as soon as reasonably possible after the
Signature Date, it being agreed that the Parties shall take all such
steps as are necessary to procure the fulfilment of the Conditions
Page 50
Precedent set out in clauses 3.1.16 to 18.1.19 on the same date,
which date will not be prior to the fulfilment of all of the other
Conditions Precedent.
18.3
The Parties will be entitled to waive fulfilment of any of the Conditions
Precedent by agreement in writing.
18.4
Unless the Conditions Precedent have been fulfilled by not later than
17:00 on 15 July 2003 (or such later date as may be agreed in writing
by the Parties) the provisions of this Agreement will fall away and be
of no further force or effect and the status quo ante will be restored
as near as may be and no Party shall have any claim against any
other party in terms hereof or arising from the failure of the
Conditions Precedent, save for any claims arising from a breach of
the provisions of clause 3.2.
18.5
Notwithstanding the provisions of clause 3.4, it is agreed that
Randfontein will be entitled to unilaterally extend the date for
fulfilment of the Conditions Precedent by notice in writing to the other
Parties, provided that it shall not be entitled to unilaterally extend
such date for more than an additional 30 (Thirty) day period.
18.6
Notwithstanding anything to the contrary herein contained, the
provisions of clause 18.1, this clause 3 and clauses 9 to 15 will
survive the failure of this Agreement to become unconditional.
19 SALE OF SALE ASSET
19.1
Randfontein hereby sells the Sale Asset to Africa Vanguard, which
hereby purchases the Sale Asset, with effect from the Effective Date.
19.2
Possession and effective control of the Sale Asset will be given to
Africa Vanguard on the Effective Date.
Page 51
19.3
Notwithstanding
the
Signature Date, but subject to the fulfilment of
the Conditions Precedent, risk in and to and the benefit of the Sale
Asset will pass to Africa Vanguard on the Effective Date.
19.4
This Agreement is subject to the fundamental term that,
notwithstanding possession and effective control of the Sale Asset
having been given to Africa Vanguard, Randfontein's title in and to
and ownership of the Sale Asset will not pass to Africa Vanguard and
ownership of the Sale Asset will remain vested in Randfontein until
that portion of the Purchase Consideration referred to in clause 5.1.1
has been paid in full in accordance with the provisions of this
Agreement. Subject to the payment of the said portion of the
Purchase Consideration, ownership of the Sale Asset will pass to
Africa Vanguard on registration of cession of the Sale Asset into the
name of Africa Vanguard.
19.5
Africa Vanguard agrees that the Sale Asset is sold voetstoots, and
that, save for the warranties set out in clause 6 and in the Joint
Venture Agreement, Randfontein is not bound by any warranties,
representations, undertakings or the like, express or implied, with
regard to the Sale Asset or any other matter affecting the Sale Asset.
20 PURCHASE CONSIDERATION AND PAYMENT
20.1
The consideration payable for the Sale Asset is an amount of
R250 000 000,00 (Two hundred and fifty million rands) plus value-
added tax thereon, which amount will be paid as follows
20.1.1
R140 000 000,00 (One hundred and forty million rands), plus
value-added tax thereon, in cash on the Effective Date; and
20.1.2
by Africa Vanguard paying to Randfontein the balance of the
Purchase Consideration of R110 000 000,00 (One hundred and
ten million rands) plus valued-added tax thereon, in monthly
instalments as provided for in clause 5.3, each instalment being
Page 52
equal to the amount determined by applying the formula set out
below ("Secondary Consideration"), which had a value of
R110
000
000,00 (One hundred and ten million rands) on
11 November 2002, as determined by Rand Merchant Bank.
FORMULA:
X = (A- B) x C
Where -
X = the monthly amount payable in respect of the Secondary
Consideration excluding value-added tax, provided that, where
X is a negative amount, no amount will be payable by Africa
Vanguard;
A = the aggregate Rand proceeds received by or accrued to the
Joint Venture in respect of the sale of gold during the month
divided by the kilograms of gold sold during that month, or in the
event that no gold is sold during the month, the average London
p.m. fix quoted for gold during the month (expressed as United
States Dollars per kilogram), converted into Rands by applying
the average Dollar/Rand exchange rate for that month quoted
by ABSA Bank Limited;
B = the Rand/Kilogram amount for the month listed in the third
column of annexe "E"; and
C = the Kilograms for the month listed in the fourth column of
annexe "E".
20.2
If the aggregate of the monthly instalments referred to in clause
20.1.2 after the expiry of the 10 (Ten) year period referred to in
clause 5.3 is greater or less than R110 000 000,00 (One hundred
and ten million rands), plus value-added tax thereon, the difference
shall be added to or deducted from the amount of R110 000 000,00
Page 53
(One hundred and ten million rands), plus value-added tax thereon,
as the case may be, in determining the Purchase Consideration.
20.3
The Secondary Consideration will be calculated by Randfontein at
the end of each month, for a period of 10 (Ten) years after the
Effective Date (commencing on the first day of the month following
the month during which the Effective Date falls and ending 10 (Ten)
years thereafter), and will be paid, in partial or total discharge of
Africa Vanguard's obligation to Randfontein to pay the Secondary
Consideration, as the case may be, directly by the Joint Venture to
Randfontein, on behalf of Africa Vanguard, from the monthly
distribution of profits of the Joint Venture due to Africa Vanguard.
20.4
In the event that any monthly distribution referred to in clause 5.3 is
less than that portion of the Secondary Consideration due and owing
at that point in time, then the deficit will constitute a loan made by
Randfontein to Africa Vanguard and shall bear interest at the Agreed
Rate ("Loan"). The balance of the Loan outstanding from time to
time will be paid directly by the Joint Venture to Randfontein, on
behalf of Africa Vanguard, from the monthly distribution of profits of
the Joint Venture due to Africa Vanguard and any amount not paid to
Randfontein will, after the expiry of a period of 10 (Ten) years from
the Effective Date, be repayable by Africa Vanguard on 90 (Ninety)
days written notice from Randfontein. For the purposes of clarity, it is
recorded that any such amount will be included in the calculation of
the R32 000 000,00 (Thirty two million rands) referred to in clause
1.2.28.1.
20.5
For the purposes of clarity, it is recorded that no amounts whatsoever
will be paid by the Joint Venture to Africa Vanguard until all amounts
then due to Randfontein in respect of the Secondary Consideration
have been paid in full.
Page 54
20.6
In the event that Africa Vanguard is dissatisfied with Randfontein's
calculation of any portion of the Secondary Consideration it will be
entitled to have the matter referred for determination to independent
auditors agreed between the Parties, or failing agreement, appointed
by the President for the time being of the Gauteng Society of
Chartered Accountants -
20.6.1
whose decision will be made within 10 (Ten) Business Days of
their appointment;
20.6.2
who will act as experts and not as arbitrators and will be obliged to
receive evidence;
20.6.3
whose decision will, in the absence of manifest error, be final and
binding on the Parties; and
20.6.4
who
will
determine
the liability for their costs on the basis that
Africa Vanguard shall be responsible for the costs unless
Randfontein's calculation is materially inaccurate.
20.7
If Africa Vanguard fails to make payment to Randfontein of any
amount owing in terms of this Agreement, save for the Secondary
Consideration, on the due date for payment thereof, then such
amount shall bear interest at the Agreed Rate from the due date for
payment to the date of actual payment, both days inclusive.
21
WARRANTIES
Randfontein hereby warrants to and in favour of Africa Vanguard that
21.1
it is the sole holder of the Mining Titles and will remain the sole
holder until the mining titles comprising the Sale Asset are
transferred or ceded to Africa Vanguard;
Page 55
21.2
it has, subject to the fulfilment of the condition precedent set out in
clause 3.1.15, the right and is able to cede the Sale Asset to Africa
Vanguard;
21.3
the Sale Asset is not subject, and will not become subject at any time
prior to the transfer or cession of the mining titles comprising the Sale
Asset to Africa Vanguard, to any lease, lien, hypothec, mortgage,
notarial bond, pledge or other encumbrance whatsoever; and
21.4
save for Africa Vanguard in terms of this Agreement, no person has
any right (including an option or right of first refusal) to acquire the
Sale Asset.
22 APPLICATION FOR MINING AUTHORISATIONS
Randfontein hereby consents in terms of section 9(1)(b) of the Minerals
Act, 1991 (Act No. 50 of 1991) to the Joint Venture applying for the
mining authorisation referred to in clause 3.1.18.
23 DELIVERY
23.1
Randfontein shall procure the drafting, execution and registration of
all documents necessary to fulfil the Condition Precedent set out in
clause 18.1.19. Each of the Parties undertakes to do all such acts
and sign all such documents as may be necessary or incidental to
complete, execute and register such documents.
23.2
The drafting, execution and registration of the documents referred to
in clause 8.1 shall be attended to by Randfontein's attorneys and will
be made available to Africa Vanguard's attorneys for approval prior to
execution.
23.3
Randfontein shall, as soon as possible after the Effective Date,
procure the drafting, execution and registration of all documents
necessary to give effect to the transfer or cession of the Sale Asset,
excluding the Mining Leases, cession of which will already have been
Page 56
registered in fulfilment of the Condition Precedent set out in clause
18.1.19. Each of the Parties undertakes to do all such acts and sign
all such documents as may be necessary or incidental to complete,
execute and register such documents.
23.4
The drafting, execution and registration of the documents referred to
in clause 23.3 shall be attended to by Randfontein's attorneys and
will be made available to Africa Vanguard's attorneys for approval
prior to execution.
23.5
The Parties acknowledge that, in terms of certain proposed mining-
related legislation, there is a possibility that, after this Agreement
becomes unconditional, certain of the Mining Titles will not be
capable of being transferred or ceded, as the case may be, to Africa
Vanguard. The Parties accordingly agree that in this eventuality,
unless otherwise agreed in writing
23.5.1
those Mining Titles which are not capable of being transferred or
ceded ("Specific Mining Titles") will automatically be deemed to
have been excluded from the definition of "Mining Titles" in
clause 16.2.20; and
23.5.2
the definition of "Randfontein Mining Lease" in clause 1.2.38 of
the Joint Venture Agreement will automatically be deemed to have
been amended to include the Specific Mining Titles, which will be
contributed by Randfontein to the Joint Venture in terms of clause
5.1.1 of the Joint Venture Agreement,
with effect from the date on which the Specific Mining Titles become
incapable of being transferred or ceded.
24 CO-OPERATION
The Parties undertake at all times to co-operate with each other in good
faith in order to carry out this Agreement and to implement all
Page 57
transactions and steps contemplated herein. The Parties further
undertake not to take any action or to omit taking any action which will
result in delaying or impeding the implementation of this Agreement.
25 BREACH
25.1
Subject to the provisions of clause 10.3, in the event of either of the
Parties ("Defaulting Party") committing a breach of any term or
condition of this Agreement prior to the Effective Date, then the party
not in default ("Aggrieved Party") is entitled to give to the Defaulting
Party 10 (Ten) Business Days notice in writing to remedy such
breach. In the event of the Aggrieved Party giving any such notice
and the Defaulting Party failing to comply with the notice, or in the
event of such breach not being capable of being remedied, then the
Aggrieved Party will forthwith be entitled to cancel this Agreement,
or, alternatively, to claim immediate performance and/or payment
from the Defaulting Party of all of its obligations in terms of this
Agreement, whether or not the same are then due for performance or
payment.
25.2
The aforegoing is without prejudice to such rights as the Aggrieved
Party may have at law, including the right to claim damages.
25.3
The Parties agree that the cancellation of this Agreement in the event
of a breach after the payment of the amount of R140 000 000,00
(One hundred and forty million rands) referred to in clause 5.1.1
would be an inappropriate and insufficient remedy and that
irreparable damage would occur if the provisions of this Agreement
were not complied with. It is accordingly agreed that, in the event of
a breach after the payment of the amount of R140 000 000,00 (One
hundred and forty million rands) referred to in clause 5.1.1 which is
not remedied within 10 (Ten) Business Days of written notice
requiring the breach to be remedied, the Aggrieved Party shall be
entitled (without prejudice to any other rights which it may have in law
Page 58
save for the right to cancel the agreement) to an order for specific
performance and to recover any damages which it may have
suffered.
26 DISPUTES
26.1
In the event of any dispute or difference arising between the Parties
hereto relating to or arising out of this Agreement, including the
validity, implementation, execution, interpretation, rectification,
termination or cancellation of this Agreement, the Parties shall
forthwith meet to attempt to settle such dispute or difference, and
failing such settlement within a period of 14 (Fourteen) days, the said
dispute or difference shall on written demand by either Party to the
dispute be submitted to arbitration in Johannesburg in accordance
with the rules of the Arbitration Foundation of Southern Africa
("Foundation") by an arbitrator or arbitrators appointed by the
Parties.
26.2
Should the Parties fail to agree on an arbitrator within 10 (Ten) days
after the arbitration has been demanded, the arbitrator shall be
nominated at the request of either Party to the dispute by the
Foundation.
26.3
The Parties irrevocably agree that the submission to arbitration in
terms of this clause is subject to the Parties' rights of appeal set out
hereunder.
26.4
Either Party to the arbitration may appeal the decision of the
arbitrator within a period of 21 (Twenty one) days after the arbitrator's
ruling has been handed down by giving written notice to that effect to
the other Party. The appeal shall be dealt with in accordance with
the rules of the Foundation by a panel of 3 (Three) arbitrators
appointed by the Foundation.
Page 59
26.5
The decision of the arbitrator shall be final and binding on the Parties
to the arbitration after the expiry of the period of 21 (Twenty one)
days from the date of the arbitrator's ruling if no appeal has been
lodged by either Party. A decision which becomes final and binding
in terms of this clause 11.5, and a decision of the arbitrators referred
to in clause 11.4, may be made an order of court at the instance of
either Party.
26.6
Nothing herein contained shall be deemed to prevent or prohibit
either Party from applying to the appropriate Court for urgent relief.
26.7
The provisions of this clause will continue to be binding on the
Parties notwithstanding any termination or cancellation of the
agreement.
27 NOTICES AND DOMICILIUM
27.1
The Parties choose as their respective domicilium citandi et
executandi for the purposes of legal proceedings and for the
purposes of giving or sending any notice provided for or necessary in
terms of this Agreement, the following addresses:
Name Physical
Address
Randfontein
Block
27
Randfontein Office Park
Cnr Main Reef Road & ▇▇▇▇ Avenue
Randfontein
Attention:
The Company Secretary
Page 60
Name
Physical
Address
Africa ▇▇
▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇
provided that a Party may change its physical address by written
notice to the other Party to that effect. Such change of address will
be effective 7 (Seven) days after receipt of notice of the change.
27.2
All notices to be given in terms of this agreement will:
27.2.1
be given in writing;
27.2.2
be hand delivered; and
27.2.3
be presumed to have been received on the date of delivery.
27.3
Notwithstanding
the
above, any notice actually received (save by
email or any other similar electronic transmission) by the Party to
whom the notice is addressed will be deemed to have been properly
given and received, notwithstanding that such notice has not been
given in accordance with the provisions of this clause.
28 GENERAL
28.1
This Agreement constitutes the whole of the agreement between the
Parties relating to the matters dealt with in this Agreement and save
to the extent otherwise provided herein no undertaking,
representation, term or condition relating to the subject matter of this
Agreement not incorporated in this Agreement shall be binding on
either of the Parties.
28.2
No variation, addition, deletion, or agreed cancellation will be of any
force or effect unless in writing and signed by or on behalf of the
Parties.
Page 61
28.3
No waiver of any of the terms and conditions of this Agreement will
be binding or effectual for any purpose unless in writing and signed
by or on behalf of the Party giving the same. Any such waiver will be
effective only in the specific instance and for the purpose given. No
failure or delay on the part of either Party in exercising any right,
power or privilege hereunder will constitute or be deemed to be a
waiver thereof, nor will any single or partial exercise of any right,
power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.
28.4
Save as otherwise herein provided, neither this Agreement nor any
part, share or interest therein nor any rights or obligations hereunder
may be ceded, assigned, or otherwise transferred without the prior
written consent of the other Party.
28.5
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which together shall
constitute one and the same agreement as at the date of signature of
the Party last signing one of the counterparts. The Parties undertake
to take whatever steps may be necessary to ensure that both
counterparts are duly signed by each of them without delay.
29 APPLICABLE LAW AND JURISDICTION
29.1
This Agreement will in all respects be governed by and construed
under the laws of the Republic of South Africa.
29.2
Subject to the provisions of this Agreement, the Parties hereby
consent and submit to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the High Court of the Republic of
South Africa in any dispute arising from or in connection with this
Agreement.
Page 62
30 COSTS
30.1
Randfontein
will
bear and pay 74% (Seventy four) percent of the fees
to be charged by Nedbank, as set out in the mandate letter signed by
both Parties on 16 January 2003, and the costs of registration of
transfer or cession of the mining titles comprising the Sale Asset.
The balance of 26% (Twenty six) percent of such costs shall be
borne by Africa Vanguard and paid by Randfontein on its behalf,
such amount being credited to the Loan and dealt with, mutatis
mutandis, in accordance with the provisions of clauses 5.3 and 5.4.
In the event that this Agreement does not become unconditional,
such amount shall become repayable by Africa Vanguard on demand
by Randfontein.
30.2
Save as provided for in clause 15.1, each Party will bear and pay its
own costs and expenses of and incidental to the negotiation, drafting,
preparation and implementation of this Agreement.
31 FURTHER NEGOTIATIONS
The Parties hereby agree that, in the event that the Mineral and
Petroleum Resources Development Act comes into effect prior to this
Agreement "falling away and being of no further force or effect" in terms
of clause 3.4, the Parties will negotiate in good faith with a view to
reaching agreement on an alternative structure and mechanism which
provides for the sale of 26% (Twenty six percent) of the right to mine
the minerals in the Doornkop Mining Area to Africa Vanguard, and the
establishment of the Joint Venture, on substantially the same economic
and commercial terms as contained in this Agreement and the Joint
Venture Agreement.
32 SUBSCRIPTIONS FOR SHARES IN AVR
AVR hereby undertakes that it will not allow any person to subscribe for
shares in AVR after the Signature Date, unless such subscription has
Page 63
been approved by Randfontein in writing, which approval will not be
unreasonably withheld.
SIGNED at ......................................... on .............................................. 2003
For and on behalf of
RANDFONTEIN ESTATES LIMITED
who warrants that he is duly authorised
SIGNED at ......................................... on .............................................. 2003
For and on behalf of
AFRICA VANGUARD RESOURCES
(DOORNKOP) (PROPRIETARY)
LIMITED
(DOORNKOP) (PROPRIETARY)
LIMITED
who warrants that he is duly authorised
Page 64
ANNEXE "A"
PLAN OF THE DOORNKOP MINING AREA
Page 65
ANNEXE "B"
PLAN OF MINING TITLES
Page 66
ANNEXE "C"
SCHEDULE OF PROPOSED SHAREHOLDERS OF AVR
Page 67
ANNEXE "D"
SERVICES
- Accounting
- Financing
- Costing
- Payment of Creditors
- Payroll
- Procurement
- Training
- Risk Management
- Ventilation
- Projects
- Information Technology
- Security
- Geological & Geostatistical
- Administration
- Provision of Labour
- Human Resources
- Industrial Relations
- Stores
- Distribution
- Training
- Property Services
- Survey
- Engineering
- Workshops
- Medical
- Environmental Control
- Toll Treatment
ANNEXE "E"
SECONDARY CONSIDERATION
THIRD ADDENDUM TO
entered into on 21 January 2003
between
RANDFONTEIN ESTATES LIMITED
and
AFRICA VANGUARD RESOURCES (DOORNKOP) (PROPRIETARY)
LIMITED
(formerly LAK Trading Company No. 9 (Proprietary) Limited)
Attorneys
IH\acr
Page 2
H:\IH\HARMONY\DOORNKOP\SALEADD3.DOC
30 July 2003
30 July 2003
TABLE OF CONTENTS
| 1 INTERPRETATION | 3 |
| 2 RECITALS | 3 |
| 5 EXTENSION | 3 |
| 6 AMENDMENTS | 3 |
| 7 CONDITIONS PRECEDENT | 4 |
| 8 SAVINGS CLAUSE | 5 |
Page 3
WHEREBY THE PARTIES AGREE AS FOLLOWS
33
INTERPRETATION
In this Addendum:
33.1
words and phrases defined in the Notarial Sale Agreement will bear the
same meanings herein; and
33.2
"Notarial Sale Agreement" means the Notarial Sale Agreement
entered into between the parties hereto on 21 January 2003.
34
RECITALS
The parties wish to record their agreement in regard to certain
amendments to the Notarial Sale Agreement, the extension of the date for
fulfilment of the Conditions Precedent and the fulfillment of certain of the
Conditions Precedent.
35
EXTENSION
It is agreed, in terms of clause 3.4 of the Notarial Sale Agreement, that the
date for fulfilment of the Conditions Precedent is extended to 11 August
2003.
36
AMENDMENTS
It is agreed that the Notarial Sale Agreement is hereby amended as
follows
36.1
clause 1.2.11 is deleted in its entirety and substituted with the following:
"1.2.11
"Effective Date" means the third Business Day after the date of
fulfilment or waiver of the last of the Conditions Precedent;"
36.2
the following new clause 3.1.20 is inserted after clause 3.1.19
"3.1.20
Randfontein is provided with a legal opinion approved by it from
Fluxmans Inc, incorporating ▇▇▇▇▇▇▇▇▇ & Strime, relating to the
Page 4
3.1.20.1
due execution by Africa Vanguard and AVR of the Joint Venture
Agreement and the addenda thereto and their authority to enter
into such Agreements; and
3.1.20.2
due execution by Africa Vanguard of this Agreement and all
addenda hereto and its authority to enter into such Agreements."
36.3
annexe
"C" to the Notarial Sale Agreement is substituted with annexe
"C" to this Addendum;
36.4
annexe
"E" to the Notarial Sale Agreement is substituted with annexe
"E" to this Addendum;
36.5
the words in the brackets on the third to fifth lines of clause 5.3 are
deleted and replaced with the following
"(commencing during the month in which the Effective Date falls and
ending at the end of the relevant month 10 (ten) years thereafter)"
37
CONDITIONS PRECEDENT
The Parties agree that the Conditions Precedent contained in clauses
37.1
3.1.1 to 3.1.4, 3.1.14, 3.1.15 and 3.1.16 have been fulfilled, provided
that signature of this Addendum on behalf of Randfontein shall be
deemed to constitute the written confirmation referred to in clauses
3.1.1 and 3.1.2;
37.2
3.1.5 to 3.1.8 and 3.1.13 will only be fulfilled on receipt of written advice
from Nedbank Limited (acting through its Capital Markets division) that
the documents referred to therein have been entered into and have
become unconditional, provided that signature of this Addendum on
behalf of Randfontein shall be deemed to constitute the written approval
referred to in clause 3.1.13; and
37.3
3.1.9 to 3.1.12 will be fulfilled on signature of the documents referred to
therein by all Parties.
Page 5
38
SAVINGS CLAUSE
Save to the extent specifically or by necessary implication modified in or
inconsistent with the provisions of this Addendum or unless otherwise
agreed in writing between the parties, all the terms and conditions of the
Notarial Sale Agreement shall mutatis mutandis continue to apply.
SIGNED at ......................................... on .............................................. 2003
For and on behalf of
RANDFONTEIN ESTATES LIMITED
who warrants that he is duly authorised
SIGNED at ......................................... on .............................................. 2003
For and on behalf of
AFRICA VANGUARD RESOURCES
(DOORNKOP) (PROPRIETARY)
LIMITED
(DOORNKOP) (PROPRIETARY)
LIMITED
who warrants that he is duly authorised