EXHIBIT 4.17 EXECUTION COPY
SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT
Amongst
LEXSHELL 579 INVESTMENTS (PROPRIETARY) LIMITED
(WHICH IS TO BE RENAMED "MVELAPHANDA GOLD
(PROPRIETARY) LIMITED" OR SUCH OTHER NAME SELECTED BY IT THAT IS
ACCEPTABLE TO THE REGISTRAR OF COMPANIES)
and
GFI MINING SOUTH AFRICA LIMITED
(WHICH IS TO BE CONVERTED TO A PRIVATE COMPANY)
and
GOLD FIELDS LIMITED
[DENEYS XXXXX LOGO]
TABLE OF CONTENTS
1. PARTIES...................................................................................... 1
2. DEFINITIONS AND INTERPRETATION............................................................... 1
3. INTRODUCTION................................................................................. 7
4. SUSPENSIVE CONDITION......................................................................... 7
5. SUBSCRIPTION................................................................................. 8
6. PAYMENT OF SUBSCRIPTION PRICE................................................................ 8
7. ALLOTMENT AND ISSUE OF THE GFI-SA SHARES..................................................... 9
8. WARRANTIES................................................................................... 9
9. SHARE EXCHANGE............................................................................... 12
10. PRE-EMPTIVE RIGHTS........................................................................... 12
11. CESSION...................................................................................... 13
12. BREACH....................................................................................... 13
13. DISPUTES..................................................................................... 13
14. NOTICES AND DOMICILIA........................................................................ 14
15. GOVERNING LAW................................................................................ 16
16. JURISDICTION................................................................................. 16
17. GENERAL...................................................................................... 16
18. COSTS........................................................................................ 17
19. COUNTERPARTS................................................................................. 17
SCHEDULE 1: SHARE EXCHANGE METHODOLOGY................................................................ 19
SUBSCRIPTION AND SHARE EXCHANGE AGREEMENT
1. PARTIES
1.1 The Parties to this Agreement are:
1.1.1 LEXSHELL 579 INVESTMENTS (PROPRIETARY) LIMITED (WHICH IS TO BE
RENAMED "MVELAPHANDA GOLD (PROPRIETARY) LIMITED" OR SUCH OTHER NAME
SELECTED BY IT THAT IS ACCEPTABLE TO THE REGISTRAR OF COMPANIES);
1.1.2 GFI MINING SOUTH AFRICA LIMITED (WHICH IS TO BE CONVERTED TO A
PRIVATE COMPANY); and
1.1.3 GOLD FIELDS LIMITED.
1.2 The Parties agree as set out below.
2. DEFINITIONS AND INTERPRETATION
2.1 The headings to the clauses and schedules of this Agreement are for
reference purposes only and shall in no way govern or affect the
interpretation of nor modify nor amplify the terms of this Agreement
nor any clause or schedule hereof.
2.2 In this Agreement, unless the context dictates otherwise, the words and
expressions set forth below shall bear the following meanings and
cognate expressions shall bear corresponding meanings:
"AGREEMENT" means this Subscription and Share Exchange Agreement and
its Schedules;
"BUSINESS DAY" means any day (other than a Saturday, Sunday or an
official public holiday in South Africa within the meaning of the
Public Holidays Act, No. 36 of 1994) on which banks generally are open
for business in Johannesburg;
"DETERMINATION DATE" means the date upon which the number of GFL Shares
to be issued to Mvela Gold pursuant to clause 9 is agreed, is deemed to
Page 2.
be agreed or determined, as the case may be, in accordance with the
provisions of Schedule 1;
"EFFECTIVE DATE" means the date of the fulfilment of the Suspensive
Condition;
"EQUITY SHARE" means, of any company, a share, instrument or right in
the capital of that company which:
(a) entitles the holder thereof to participate in the distribution
of profits, reserves, capital, share premium or any other
dividend or distribution which is based upon, or linked to,
the profitability of that company or which otherwise entitles
the holder thereof to any such distribution beyond a specified
amount; and
(b) carries voting rights at meetings of ordinary shareholders of
that company; or
(c) is convertible, exchangeable or exercisable, whether
contingently, conditionally, voluntarily or compulsorily or
otherwise, into a share, instrument or right which falls
within (a) and (b) above;
"EQUITY SHARE CAPITAL" means, in relation to a person, that portion of
that person's issued share capital consisting of Equity Shares;
"GFA" means Gold Fields Australia Pty Limited (Registration No. ABN: 91
098 385 285), a company incorporated according to the laws of
Australia;
"GFG" means Gold Fields Guernsey Limited (Registration No. 24457), a
company incorporated according to the laws of Guernsey;
"GFI-SA" means GFI Mining South Africa Limited (Registration No.
2002/031431/06) a public company duly incorporated according to the
company laws of South Africa, which is to be converted to a private
company;
"GFI-SA LOAN AGREEMENT" means that written agreement entitled "GFI-SA
Loan Agreement" concluded between Mvela Gold (as lender), GFI-SA (as
borrower), GFL, GFA and GFG (as guarantors) and pursuant to which inter
alia Mvela Gold is to advance the Loan Amount to GFI-SA;
"GFI-SA SHARES" means that number of shares in the issued Equity Share
Capital of GFI-SA which rank pari passu with the other issued Equity
Shares
Page 3.
in the capital of GFI-SA on the Subscription Date and which,
immediately after issue thereof, will equate to 15% (fifteen percent)
of the issued Equity Share Capital of GFI-SA and which will be allotted
and issued to Mvela Gold in accordance with the terms and conditions of
this Agreement;
"GFL" means Gold Fields Limited (Registration No. 1968/004880/06), a
public company duly incorporated according to the company laws of South
Africa;
"GFL GROUP" shall bear the meaning defined in the GFI-SA Loan
Agreement;
"GFL GROUP COMPANY" means any member of the GFL Group;
"GFL SHARES" means the ordinary shares in the issued share capital of
GFL issued by GFL in exchange for delivery by Mvela Gold of the GFI-SA
Shares to GFL pursuant to clause 9;
"GUARANTORS" means GFL, GFA and GFG and "GUARANTOR" means, as the
context requires, any one of them;
"JSE" means the JSE Securities Exchange South Africa (or its successor
in title);
"LOAN AMOUNT" means the capital sum of R4 139 000 000 (Four Billion One
Hundred and Thirty-nine Million Rand);
"MEZZANINE INVESTORS" shall bear the meaning defined in the GFI-SA Loan
Agreement;
"MEZZ SPV" means Micawber 325 (Proprietary) Limited (Registration No.
2002/016188/07), a private company duly incorporated according to the
company laws of South Africa;
"MEZZ SPV CESSION IN SECURITY" shall bear the meaning defined in the
GFI-SA Loan Agreement;
"MEZZ SPV LOAN AGREEMENT" shall bear the meaning defined in the GFI-SA
Loan Agreement;
"MVELA GOLD" means Lexshell 579 Investments (Proprietary) Limited
(Registration No. 2003/013950/07), a private company duly incorporated
Page 4.
according to the company laws of South Africa, to be renamed
"Mvelaphanda Gold (Proprietary) Limited" or such other name selected by
Mvela Gold that is acceptable to the Registrar of Companies;
"MVELA RESOURCES" means Mvelaphanda Resources Limited (Registration No.
1980/001395/06), a public company duly incorporated according to the
company laws of South Africa;
"PARTIES" means GFI-SA, GFL and Mvela Gold and "PARTY" means, as the
context requires, any one of them;
"PAYMENT OBLIGATIONS" means all of the obligations of GFI-SA to pay any
sum due and payable by it in accordance with the terms and conditions
of the GFI-SA Loan Agreement including, without limitation, the
obligations to pay fees, expenses, post default interest, the present
value of the Future Interest Payments (as defined in the GFI-SA Loan
Agreement), the Loan Amount and indemnity payments;
"PRE-EMPTIVE RIGHTS AGREEMENT" means the written agreement entitled
"Pre-emptive Rights Agreement" to be concluded between Mvela Gold,
GFI-SA and GFL governing certain pre-emptive rights to be granted by
Mvela Gold in favour of GFL in respect of the Shares;
"PRIME RATE" means the publicly quoted basic rate of interest (per
centum, per annum, compounded monthly in arrear and calculated on a 365
day year (irrespective of whether or not the year is a leap year)) from
time to time published by FirstRand Bank Limited (or its
successor-in-title) as being its prime overdraft rate as certified by
any manager of such bank, whose appointment and designation need not be
proved;
"REORGANISATION AGREEMENT" shall bear the meaning defined in the GFI-SA
Loan Agreement;
"SENIOR AGENT" shall bear the meaning defined in the GFI-SA Loan
Agreement;
"SHARE EXCHANGE" means the exchange of the GFI-SA Shares for the GFL
Shares pursuant to the provisions of clause 9;
"SHARES" means the GFI-SA Shares or the GFL Shares, as the case may be;
"SIGNATURE DATE" means the date of the signature of this Agreement by
the Party signing this Agreement last in time;
Page 5.
"SUBSCRIPTION DATE" means the date on which Mvela Gold becomes obliged
to subscribe for the GFI-SA Shares pursuant to the provisions of clause
5.1.1 or the date on which Mvela Gold actually subscribes for the
GFI-SA Shares pursuant to the provisions of 5.1.2, as the case may be;
"SUBSCRIPTION PRICE" means the sum of R4 139 000 000 (Four Billion One
Hundred and Thirty-nine Million Rand);
"SUSPENSIVE CONDITION" means the suspensive condition stipulated in
clause 4.1;
"TRANSACTION DOCUMENTS" means those agreements and documents defined as
"Transaction Documents" in the GFI-SA Loan Agreement.
2.3 Unless inconsistent with the context or save where the contrary is
expressly indicated:
2.3.1 if any provision in a definition is a substantive provision
conferring rights or imposing obligations on any Party,
notwithstanding that it appears only in this interpretation
clause, effect shall be given to it as if it were a
substantive provision of this Agreement;
2.3.2 when any number of days is prescribed in this Agreement, same
shall be reckoned exclusively of the first and inclusively of
the last day unless the last day falls on a day which is not a
Business Day, in which case the last day shall be the next
succeeding Business Day;
2.3.3 in the event that the day for payment of any amount due in
terms of this Agreement should fall on a day which is not a
Business Day, the relevant day for payment shall be the
preceding Business Day;
2.3.4 in the event that the day for performance of any obligation to
be performed in terms of this Agreement (other than a payment
obligation) should fall on a day which is not a Business Day,
the relevant day for performance shall be the subsequent
Business Day;
2.3.5 any reference in this Agreement to an enactment is to that
enactment as at the Signature Date and as amended or
re-enacted from time to time;
2.3.6 any reference in this Agreement to this Agreement or any other
agreement or document shall be construed as a reference to
this Agreement or, as the case may be, such other agreement or
document as
Page 6.
same may have been, or may from time to time be, amended,
varied, novated or supplemented;
2.3.7 no provision of this Agreement constitutes a stipulation for
the benefit of any person who is not a Party to this
Agreement;
2.3.8 references to day/s, month/s or year/s shall be construed as
Gregorian calendar day/s, month/s or year/s;
2.3.9 a reference to a Party includes that Party's
successors-in-title and permitted assigns.
2.4 Unless inconsistent with the context, an expression which denotes:
2.4.1 any one gender includes the other genders;
2.4.2 a natural person includes an artificial person and vice versa;
and
2.4.3 the singular includes the plural and vice versa.
2.5 Where any term is defined within the context of any particular clause
in this Agreement, the term so defined, unless it is clear from the
clause in question that the term so defined has limited application to
the relevant clause, shall bear the same meaning as ascribed to it for
all purposes in terms of this Agreement, notwithstanding that that term
has not been defined in this interpretation clause.
2.6 The rule of construction that, in the event of ambiguity, a contract
shall be interpreted against the Party responsible for the drafting
thereof, shall not apply in the interpretation of this Agreement.
2.7 The expiration or termination of this Agreement shall not affect such
of the provisions of this Agreement as expressly provide that they will
operate after any such expiration or termination or which of necessity
must continue to have effect after such expiration or termination,
notwithstanding that the clauses themselves do not expressly provide
for this.
2.8 This Agreement shall be binding on and enforceable by the estates,
administrators, trustees, permitted assigns or liquidators of the
Parties as fully and effectually as if they had signed this Agreement
in the first instance and reference to any Party shall be deemed to
include such Party's estate, administrators, trustees, permitted
assigns or liquidators, as the case may be.
Page 7.
2.9 The use of any expression in this Agreement covering a process
available under South African law such as winding-up (without
limitation eiusdem generis) shall, if any of the Parties to this
Agreement is subject to the law of any other jurisdiction, be construed
as including any equivalent or analogous proceedings under the law of
such other jurisdiction.
2.10 Where figures are referred to in numerals and in words, if there is any
conflict between the two, the words shall prevail.
3. INTRODUCTION
3.1 Mvela Gold wishes to subscribe for the GFI-SA Shares and GFI-SA is
willing to allot and issue the GFI-SA Shares to Mvela Gold.
3.2 The Parties wish to record the terms upon which:
3.2.1 Mvela Gold will subscribe for the GFI-SA Shares and upon which
GFI-SA will allot and issue the GFI-SA Shares to Mvela Gold;
3.2.2 Mvela Gold will be entitled to exchange the GFI-SA Shares for
the GFL Shares;
3.2.3 GFL will be entitled to require Mvela Gold to exchange the
GFI-SA Shares for the GFL Shares.
4. SUSPENSIVE CONDITION
4.1 This entire agreement, save for the provisions of this clause 4 and of
clauses 1, 2, 12, 13, 14, 15, 16, 17, 18 and 19 which shall be of
immediate force and effect, is subject to the fulfilment of the
suspensive condition that the Loan Amount is advanced to GFI-SA in
accordance with the terms and conditions of the GFI-SA Loan Agreement.
4.2 The Parties shall use their reasonable commercial endeavours to procure
the fulfilment of the Suspensive Condition as soon as reasonably
possible after the Signature Date.
4.3 The Suspensive Condition may not be waived.
4.4 In the event that the Suspensive Condition is not fulfilled then this
Agreement, save for the provisions of this clause 4 and of clauses 1,
2, 12, 13, 14, 15, 16, 17, 18 and 19 which shall remain of full force
and effect, shall
Page 8.
never become of any force or effect and no Party shall have any claim
against any other Party or anything done hereunder or arising hereout,
save as a result of a breach of any of the provisions of this clause 4
by a Party, and the Parties shall be restored as nearly as may be
possible to the status quo ante.
5. SUBSCRIPTION
5.1 Mvela Gold shall (without prejudice to, and in addition to, any other
rights or claims Mvela Gold may have against GFI-SA and/or GFL under
this Agreement; any of the other Transaction Documents or in law):
5.1.1 if GFI-SA has discharged all of the Payment Obligations in
accordance with the terms and conditions of the GFI-SA Loan
Agreement, be obliged to subscribe for the GFI-SA Shares on
the date on which the Payment Obligations have so been
discharged at the Subscription Price; or
5.1.2 if GFI-SA does not timeously discharge all of the Payment
Obligations in accordance with the terms and conditions of the
GFI-SA Loan Agreement, be entitled (but not obliged) to
subscribe, on at least 5 (five) Business Days written notice
to GFI-SA, for the GFI-SA Shares on or at any time after the
date on which the Loan Amount becomes repayable by GFI-SA in
accordance with the terms of the GFI-SA Loan Agreement at the
Subscription Price,
on the terms and conditions set out in this Agreement.
5.2 Forthwith after the subscription by Mvela Gold for the GFI-SA Shares
pursuant to clause 5.1, GFI-SA shall allot and issue the GFI-SA Shares
to Mvela Gold on the Subscription Date for the Subscription Price on
the terms and conditions set out in this Agreement.
6. PAYMENT OF SUBSCRIPTION PRICE
6.1 Upon subscription for the GFI-SA Shares by Mvela Gold under clause 5.1,
Mvela Gold shall pay the Subscription Price to GFI-SA on the
Subscription Date, subject to the provisions of clause 5.1 and against
compliance by GFI-SA with clause 7.1.
6.2 Mvela Gold shall pay the Subscription Price to GFI-SA on the
Subscription Date by electronic funds transfer into a bank account in
South Africa nominated by GFI-SA in writing delivered to Mvela Gold by
no later than 3 (three) Business Days prior to the Subscription Date.
Page 9.
7. ALLOTMENT AND ISSUE OF THE GFI-SA SHARES
7.1 GFI-SA shall, against compliance by Mvela Gold with clause 6, on the
Subscription Date:
7.1.1 allot the GFI-SA Shares to Mvela Gold;
7.1.2 issue the GFI-SA Shares to Mvela Gold credited as fully paid;
and
7.1.3 deliver the share certificates in respect of the GFI-SA Shares
to Mvela Gold.
7.2 All costs of the creation, allotment and issue of the GFI-SA Shares
(including, without limitation, stamp duty) shall be borne and paid by
GFI-SA.
8. WARRANTIES
8.1 Each Party represents and warrants to the other Parties on the
Effective Date and the Subscription Date that:
8.1.1 it is a limited liability company duly incorporated and
existing under the laws of South Africa;
8.1.2 it has full power and authority to enter into and perform its
obligations under this Agreement and has taken, or has
procured the taking of, all necessary corporate and other
action to authorise its entry into and performance of its
obligations under this Agreement;
8.1.3 this Agreement is legal and binding on, and enforceable
against, it in accordance with its terms;
8.1.4 it is entering into this Agreement as principal and not as
agent.
8.2 GFI-SA and GFL jointly and severally represent and warrant to Mvela
Gold that on the Subscription Date:
8.2.1 GFI-SA will have the power and authority to create, allot and
issue, and will create, allot and issue, the GFI-SA Shares to
Mvela Gold;
8.2.2 the directors of GFI-SA will have the necessary authority to
allot and issue, and will have taken all steps to permit the
allotment and issue of,
Page 10.
the GFI-SA Shares to Mvela Gold pursuant to the terms of this
Agreement;
8.2.3 save as otherwise provided in this Agreement or the
Transaction Documents:
8.2.3.1 the GFI-SA Shares shall be free of any pledge, lien,
hypothec or any other encumbrance whatsoever and
Mvela Gold shall upon the issue thereof become the
sole registered and beneficial owner of the GFI-SA
Shares;
8.2.3.2 no person will have any right (including inter alia
any option or right of first refusal) to subscribe
for or acquire all or any of the GFI-SA Shares;
8.2.3.3 no third party will have any right to prevent or
interdict the creation, allotment or issue of the
GFI-SA Shares to Mvela Gold;
8.2.4 there will be only one class of Equity Shares in the issued
share capital of GFI-SA, namely ordinary shares, of which the
GFI-SA Shares shall form part;
8.2.5 GFI-SA will have sufficient authorised and unissued Equity
Shares to be in a position to allot and issue the GFI-Shares
to Mvela Gold on the Subscription Date;
8.2.6 the GFI-SA Shares will rank pari passu with the other Equity
Shares in the issued share capital of GFI-SA and shall upon
issue constitute 15% (fifteen percent) of the total issued
Equity Share Capital of GFI-SA;
8.2.7 the creation, allotment and/or issue of the GFI-SA Shares will
not conflict with, nor constitute a breach of, any agreement
binding upon GFI-SA or GFL.
8.3 GFL represents and warrants to Mvela Gold that on the date of issue of
the GFL Shares to Mvela Gold pursuant to the provisions of clause 9:
8.3.1 GFL will have the power and authority to create, allot and
issue, and will create, allot and issue, the GFL Shares to
Mvela Gold;
8.3.2 the directors of GFL will have the necessary authority to
allot and issue, and will have taken all steps to permit the
allotment and issue of, the GFL Shares to Mvela Gold pursuant
to the terms of this Agreement;
Page 11.
8.3.3 save as otherwise provided in this Agreement or the
Transaction Documents:
8.3.3.1 the GFL Shares shall be free of any pledge, lien,
hypothec or any other encumbrance whatsoever and
Mvela Gold shall upon the issue thereof become the
sole registered and beneficial owner of the GFL
Shares;
8.3.3.2 no person will have any right (including inter alia
any option or right of first refusal) to subscribe
for or acquire all or any of the GFL Shares;
8.3.3.3 no third party will have any right to prevent or
interdict the creation, allotment or issue of the GFL
Shares to Mvela Gold;
8.3.4 GFL will have sufficient authorised and unissued ordinary
shares to be in a position to allot and issue the GFL Shares
to Mvela Gold in accordance with the provisions of clause 9;
8.3.5 the GFL Shares will be of the same class as the other listed
shares in the issued share capital of GFL;
8.3.6 the creation, allotment and/or issue of the GFL Shares will
not conflict with, nor constitute a breach of, any material
agreement binding upon GFI-SA or GFL.
8.4 Mvela Gold represents and warrants to GFL that on the date of delivery
of the GFI-SA Shares to GFL pursuant to the provisions of clause 9,
save as otherwise provided in this Agreement or the Transaction
Documents:
8.4.1 Mvela Gold will be entitled and able to give free and
unencumbered title to the GFI-SA Shares to GFL;
8.4.2 the GFI-SA Shares shall be free of any pledge, lien, hypothec
or any other encumbrance whatsoever and GFL shall upon the
transfer thereof to GFL become the sole registered and
beneficial owner of the GFI-SA Shares;
8.4.3 no person will have any right (including inter alia any option
or right of first refusal) to acquire all or any of the GFI-SA
Shares;
8.4.4 no third party will have any right to prevent or interdict the
transfer of the GFI-SA Shares to GFL.
Page 12.
9. SHARE EXCHANGE
9.1 Either Mvela Gold or GFL shall be entitled to require, by delivery of a
written notice to the other of them in accordance with the provisions
of Schedule 1, that all of (and not only a part of) the GFI-SA Shares
be exchanged for the issue by GFL to Mvela Gold of new Equity Shares in
the issued Equity Share Capital of GFL in accordance with the
provisions of Schedule 1.
9.2 GFL undertakes, at GFL's sole cost and expense, in favour of Mvela Gold
that it will within 5 (five) Business Days after the number of GFL
Shares to be issued to Mvela Gold are agreed, are deemed to be agreed
or are determined in accordance with the provisions of Schedule 1:
9.2.1 allot, issue and, by updating Mvela Gold's CSDP account,
deliver the GFL Shares to Mvela Gold against either:
9.2.1.1 delivery by Mvela Gold to GFL of the share
certificates in respect of the GFI-SA Shares together
with share transfer forms duly signed on behalf of
Mvela Gold and blank as to transferee; or
9.2.1.2 if the GFI-SA Shares have not at that time been
allotted and issued to Mvela Gold, cession by Mvela
Gold to GFL of its rights to the allotment, issue and
delivery of the GFI-SA Shares under clause 7;
9.2.2 procure the listing of the GFL Shares on the stock exchange on
which the ordinary shares of GFL are listed.
9.3 To the extent that the Share Exchange is subject to the obtaining of
regulatory approvals before it is capable of being implemented in
accordance with the provisions of this clause 9, then the Share
Exchange shall not be implemented until all such regulatory approvals
have been obtained; provided that if such regulatory approvals have not
been obtained within 90 (ninety) days after the Determination Date the
Share Exchange shall, without prejudice to either of Mvela Gold's or
GFL's right to subsequently exercise its rights under clause 9.1, be of
no force and effect.
10. PRE-EMPTIVE RIGHTS
The Parties acknowledge and agree that neither Mvela Gold nor its
successors-in-title or assigns will be entitled to sell or otherwise
dispose of or alienate or transfer any of the Shares save in accordance
with the terms and conditions of the Pre-emptive Rights Agreement.
Page 13.
11. CESSION
11.1 Mvela Gold shall be entitled, subject to the provision of clause 11.2,
to cede its rights, title and interest under this Agreement to Mezz SPV
in terms of the Mezz SPV Cession in Security as security for Mvela
Gold's obligations under the Mezz SPV Loan Agreement and Mezz SPV shall
in turn be entitled to cede any rights under this Agreement obtained
pursuant to the Mezz SPV Cession in Security to the Mezzanine
Investors.
11.2 Unless otherwise agreed in writing by GFL, no cession referred to in
clause 11.1 shall be valid or of any force and effect unless the
relevant cessionary agrees in favour of GFL to be bound by the
provisions of clauses 9 and 10 of this Agreement and the provisions of
the Pre-emptive Rights Agreement upon the exercise of the Mezz SPV's
rights under the Mezz SPV Cession in Security; provided that no such
cession shall be construed as binding Mezz SPV or the Mezzanine
Investors to perform any of the other obligations of Mvela Gold under
this Agreement.
11.3 To the extent that any cession referred to in clause 11.1 gives rise to
any splitting of claims against either GFL or GFI-SA, GFL and GFI-SA
hereby consent to such splitting of claims.
12. BREACH
Should either GFI-SA or GFL on the one hand or Mvela Gold on the other
hand (the "DEFAULTING PARTY") breach any provision of this Agreement and,
if capable of being remedied, fail to remedy such breach within 10 (ten)
Business Days after receiving written notice from the other (the
"AGGRIEVED PARTY") requiring that it do so, then the Aggrieved Party shall
be entitled, without prejudice to its other rights in law (including,
without limitation, any right to claim damages) or in terms of this
Agreement, to claim immediate specific performance of all of the
Defaulting Party's obligations, whether or not such obligations would then
otherwise have fallen due for performance but shall not be entitled to
cancel this Agreement for any reason whatsoever.
13. DISPUTES
13.1 Any dispute arising from or in connection with this Agreement or the
termination thereof shall be finally resolved in accordance with the
rules (the "RULES") of the Arbitration Foundation of Southern Africa
("AFSA") by an arbitrator or arbitrators appointed by AFSA. There shall
be a right of appeal as provided for in the Rules.
Page 14.
13.2 Notwithstanding the provisions of clause 13.1, any Party shall be
entitled to obtain urgent or interim relief from a court of competent
jurisdiction.
13.3 The provisions of this clause 13 shall survive any termination, or
purported termination, of this Agreement.
14. NOTICES AND DOMICILIA
14.1 NOTICES
14.1.1 Each Party chooses the addresses set out opposite its name
below as its addresses to which any written notice in
connection with this Agreement may be addressed.
14.1.1.1 MVELA GOLD:
0 Xxxxxx Xxxx
Xxxxx Xxxxx, Xxxxx Wing
Magalieszicht Avenue
DUNKELD WEST
2196
Telefax No.: (011) 325-5320
Attention : The Company Secretary
14.1.1.2 GFI-SA:
00 Xx Xxxxxxx Xxxx
Xxxxxxxx
XXXXXXXXXXXX
Telefax No.: (011) 484-5842
Attention : The Company Secretary
14.1.1.3 GFL:
00 Xx Xxxxxxx Xxxx
Xxxxxxxx
XXXXXXXXXXXX
Telefax No.: (011) 484-5842
Attention : The Company Secretary
Page 15.
14.1.2 Any notice or communication required or permitted to be given
in terms of this Agreement shall be valid and effective only
if in writing but it shall be competent to give notice by
telefax transmitted to its telefax number set out opposite its
name above.
14.1.3 Any Party may by written notice to the other Parties change
its chosen addresses and/or telefax number for the purposes of
clause 14.1.1 to any other address(es) and/or telefax number,
provided that the change shall become effective on the
fourteenth day after the receipt of the notice by the
addressee.
14.1.4 Any notice given in terms of this Agreement shall:
14.1.4.1 if sent by a courier service be deemed to have been
received by the addressee on the 7th (seventh)
Business Day following the date of such sending;
14.1.4.2 if delivered by hand be deemed to have been received
by the addressee on the date of delivery;
14.1.4.3 if transmitted by facsimile be deemed to have been
received by the addressee on the first Business Day
after the date of transmission,
unless the contrary is proved.
14.1.5 Notwithstanding anything to the contrary herein contained, a
written notice or communication actually received by a Party
shall be an adequate written notice or communication to it,
notwithstanding that it was not sent to or delivered at its
chosen address and/or telefax number.
14.2 DOMICILIA
14.2.1 Each of the Parties chooses its address referred to in clause
14.1 as its domicilium citandi et executandi at which
documents in legal proceedings in connection with this
Agreement may be served.
14.2.2 Any Party may by written notice to the other Parties change
its domicilium from time to time to another address, not being
a post office box or a poste restante, in South Africa;
provided that any such change shall only be effective on the
fourteenth day after deemed receipt of the notice by the other
Party pursuant to clause 14.1.4.
Page 16.
15. GOVERNING LAW
The entire provisions of this Agreement shall be governed by and construed
in accordance with the laws of South Africa.
16. JURISDICTION
Subject to the provisions of clause 13, the Parties hereby irrevocably and
unconditionally consent to the non-exclusive jurisdiction of the
Witwatersrand Local Division of the High Court of South Africa (or any
successor to that division) in regard to all matters arising from this
Agreement.
17. GENERAL
17.1 This document constitutes the sole record of the agreement between the
Parties in regard to the subject matter thereof.
17.2 No Party shall be bound by any express or implied term, representation,
warranty, promise or the like, not recorded herein.
17.3 No addition to, variation or consensual cancellation of this Agreement
and no extension of time, waiver or relaxation or suspension of any of
the provisions or terms of this Agreement shall be of any force or
effect unless in writing and signed by or on behalf of all the Parties.
17.4 No latitude, extension of time or other indulgence which may be given
or allowed by any Party to any other Party in respect of the
performance of any obligation hereunder or enforcement of any right
arising from this Agreement and no single or partial exercise of any
right by any Party shall under any circumstances be construed to be an
implied consent by such Party or operate as a waiver or a novation of,
or otherwise affect any of that Party's rights in terms of or arising
from this Agreement or estop such Party from enforcing, at any time and
without notice, strict and punctual compliance with each and every
provision or term hereof.
17.5 The Parties undertake at all times to do all such things, to perform
all such acts and to take all such steps and to procure the doing of
all such things, the performance of all such actions and the taking of
all such steps as may be open to them and necessary for or incidental
to the putting into effect or maintenance of the terms, conditions and
import of this Agreement.
Page 17.
17.6 Subject to the provisions of clause 11, no Party shall be entitled to
cede or delegate any of its rights or obligations under this Agreement
without the prior written consent of the other Parties.
18. COSTS
18.1 Each Party shall bear its own costs of and incidental to the
negotiation, preparation and execution of this Agreement.
18.2 All legal costs incurred by any Party in consequence of any default of
the provisions of this Agreement by any other Party shall be payable on
demand by the defaulting Party on the scale as between attorney and own
client and shall include collection charges, the costs incurred by the
non-defaulting Party in endeavouring to enforce such rights prior to
the institution of legal proceedings and the costs incurred in
connection with the satisfaction or enforcement of any judgement
awarded in favour of the non-defaulting Party in relation to its rights
in terms of or arising out of this Agreement.
19. COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original of the Party or Parties executing the
same and all of which together with be deemed to constitute one and the
same agreement.
SIGNED at ________________ on this the_____ day of _____________ 2003.
For and on behalf of
LEXSHELL 579 INVESTMENTS
PROPRIETARY) LIMITED
____________________________
Name:
Capacity:
Who warrants his authority hereto
Page 18.
SIGNED at ________________ on this the_____ day of _____________ 2003.
For and on behalf of
GFI MINING SOUTH AFRICA
LIMITED
____________________________
Name:
Capacity:
Who warrants his authority hereto
SIGNED at ________________ on this the_____ day of _____________ 2003.
For and on behalf of
GOLD FIELDS LIMITED
____________________________
Name:
Capacity:
Who warrants his authority hereto
Page 19.
SCHEDULE 1
SHARE EXCHANGE METHODOLOGY
1. PRINCIPLES
1.1 The valuation methodology governing the optional exchange of GFI-SA
Shares into GFL Shares is governed by clause 8.2.4 of the Memorandum of
Understanding entered into by GFL and Mvela Resources on 10 June 2003
("THE MOU"). The overriding principle inherent in clause 8.2.4 is one
of a "value for value swap", that is, the fair value of Mvela Gold's
holding in GFI-SA is exchanged for an equivalent value holding in GFL.
1.2 The process of determining the Exchange Ratio (as defined in paragraph
1.5 below) can commence:
1.2.1. 180 (one hundred and eighty) days before the 5th anniversary
of the advance of the Loan Amount to GFI-SA; or
1.2.2 immediately in the event of the Senior Agent delivering a
valid Acceleration Notice (as defined in the GFI-SA Loan
Agreement) in accordance with the terms of the GFI-SA Loan
Agreement; or
1.2.3 immediately in the event of notification by GFI-SA of its
intention to prepay its Payment Obligations in accordance with
the terms of the GFI-SA Loan Agreement; or
1.2.4. at the election of the Mezzanine Investors in accordance with
the terms of the Mezz SPV Loan Agreement, if the refinancing
plan presented to them in accordance with the terms of the
Mezz SPV Loan Agreement 6 (six) months before the 5th
anniversary of the advance of the Loan Amount to GFI-SA shows
that the loan by the Mezz SPV to Mvela Gold in terms of the
Mezz SPV Loan Agreement will most likely be repaid from the
sale of listed GFL Shares by Mvela Gold.
provided that, notwithstanding anything to the contrary contained in
this Agreement, the actual exchange of the GFI-SA Shares for the GFL
Shares may only occur if the issued ordinary shares of GFL are on the
date of implementation of the Share Exchange listed on a licensed stock
exchange in South Africa, the United States of America and/or the
United Kingdom and the issued ordinary shares of GFI-SA are not then
listed on the JSE.
Page 20.
1.3 Upon the occurrence of any of the events referred to in paragraph 1.2
and until the expiry of a period of 1 (one) year after the Subscription
Date:
1.3.1 Mvela Gold shall be entitled by giving written notice to GFL
and GFI-SA to such effect; and
1.3.2 GFL shall be entitled by giving written notice to Mvela Gold
to such effect,
(any such written notice being hereinafter referred to as the "EXCHANGE
NOTICE") to require that Mvela Gold's GFI-SA Shares be exchanged for
GFL Shares on or after (but not before) the Subscription Date. The date
on which the Exchange Notice is given by either Mvela Gold or GFL, as
the case may be, is hereinafter referred to as the "EXCHANGE NOTICE
DATE".
1.4 The number of GFL Shares to be issued to Mvela Gold in exchange for the
GFI-SA Shares will be determined by multiplying the Exchange Ratio by
the total number of issued ordinary shares of GFL in issue on the
Exchange Notice Date; provided that if during the period commencing on
the Exchange Notice Date and ending on the date of issue of the GFL
Shares (the "ISSUE DATE") the total number of issued ordinary shares of
GFL is increased by any splitting or sub-division of the issued
ordinary shares of GFL or decreased by any consolidation of the issued
ordinary shares of GFL, the number of GFL Shares to be issued to Mvela
Gold pursuant to the Share Exchange will be adjusted on a pro rata
basis.
1.5 The "EXCHANGE RATIO" means 15% (fifteen percent) of the Adjusted DCF of
GFI-SA (as defined in paragraph 2 below) divided by the Adjusted DCF of
GFL (as defined in paragraph 2 below) as at the Exchange Notice Date.
1.6 The Party giving the Exchange Notice under paragraph 1.3 above ( the
"NOTIFYING PARTY") shall advise the other (the "RECEIVING PARTY") in
writing in that Exchange Notice of what, in its opinion, the Exchange
Ratio is as at the Exchange Notice Date and what the resultant number
of the GFL Shares to be issued to Mvela Gold is. The Receiving Party
shall advise the Notifying Party in writing (the "RESPONSE NOTICE"),
within 14 (fourteen) days of delivery to it of such Exchange Notice,
whether it agrees with the Notifying Party's opinion as to what the
Exchange Ratio is as at the Exchange Notice Date, and if it does not
agree with what the Exchange Ratio is as at the Exchange Notice Date,
of what, in its opinion, the Exchange Ratio is as at the Exchange
Notice Date and what the resultant number of the GFL Shares to be
issued to Mvela Gold is. If the number of GFL Shares to be issued to
Mvela Gold specified in the Receiving Party's Response Notice differs
by less than 10% (ten percent) of number of GFL Shares to be issued to
Mvela Gold
Page 21.
specified in the Notifying Party's Exchange Notice, the number of GFL
Shares to be issued to Mvela Gold in exchange for the GFI-SA Shares
shall be deemed to be agreed between GFL and Mvela Gold as the average
of the two, subject to the "Independent determination of the ratio by
the Mezzanine Investors" referred to in paragraph 1.10 below. The date
on which the Receiving Party delivers its Response Notice is
hereinafter referred to as the "RESPONSE DATE".
1.7 If, after a 14 (fourteen) day negotiation period (the "NEGOTIATION
PERIOD"), starting on the Response Date, the difference in the number
of GFL Shares to be issued to Mvela Gold is still 10% (ten percent) or
greater or the Notifying Party and the Receiving Party have not agreed
on the number of GFL Shares to be issued to Mvela Gold pursuant to the
Share Exchange, then the Exchange Ratio as at the Exchange Notice Date
shall be determined, in accordance with the valuation procedure set out
in paragraph 2 below, by an independent merchant or investment bank
advised by a person regarded as an independent competent person by The
South African Code for Reporting of Mineral Resources and Mineral
Reserves ("SAMREC"). The following procedure shall be adopted to
appoint both the independent merchant or investment bank ("IMB") and
the independent competent person ("CP") (together hereinafter referred
to as the "VALUERS"):
1.7.1 either Mvela Gold and GFL will agree on the identity of the
IMB and the CP; or
1.7.2 failing such agreement, within 5 (five) Business Days after
the termination of the Negotiation Period, an IMB of
international standing will, at the request of either GFL or
Mvela Gold, be selected by the Chairperson of the Arbitration
Foundation of Southern Africa within 5 (five) Business Days of
being requested to do so. The IMB will be requested to select
a CP with expertise in valuing underground, surface and
exploration mining assets within 5 (five) Business Days of
being requested to do so.
1.8 Once the IMB and CP have been selected, they will be appointed by GFL
and Mvela Gold within 7 (seven) days of both of them being selected.
The costs of the appointment of the Valuers will be borne equally by
GFL and Mvela Gold.
1.9 In determining the Exchange Ratio as at the Exchange Notice Date the
Valuers will:
1.9.1 use a discounted cash flow methodology as outlined in
paragraph 2 below;
Page 22.
1.9.2 act as experts and not as arbitrators and their determinations
shall be final and binding on the Parties in the absence of
manifest error;
1.9.3 have a period of 60 (sixty) days from date of their
appointment to complete their determinations.
1.10 INDEPENDENT DETERMINATION OF THE RATIO BY THE MEZZANINE INVESTORS
If the Exchange Ratio as at the Exchange Notice Date is agreed, or is
deemed to be agreed, between GFL and Mvela Gold in terms of paragraph
1.6 or 1.7 above, the Mezzanine Investors will immediately be informed
in writing of such agreement and the number of GFL Shares to be issued
to Mvela Gold pursuant to the Share Exchange. If the value of the
listed GFL Shares to be issued to Mvela Gold (based on the volume
weighted average value of these GFL Shares over the 30 (thirty) days up
to the date the Mezzanine Investors are informed of the number of GFL
Shares to be issued to Mvela Gold pursuant to the Share Exchange) is
less than 115% (one hundred and fifteen percent) of the total
outstanding amount due to Mezz SPV under the Mezz SPV Loan Agreement as
at the date the Mezzanine Investors are so informed, the Mezzanine
Investors will then have 7 (seven) days to decide (in accordance with
the terms of their inter-creditor agreement) whether to themselves call
for an independent determination (at their own expense) of the Exchange
Ratio as at the Exchange Notice Date by an IMB and CP. If the Mezzanine
Investors decide to call for an independent determination by an IMB and
CP, they will appoint an independent and reputable IMB and an
independent and reputable CP of their own choice (but after consulting
with GFL as to the acceptability of their choice of IMB and CP) within
7 (seven) days, who will then apply the procedure outlined in paragraph
2 of this Schedule 1 and complete their determination within 60 (sixty)
days of their appointment. If appointed, the Exchange Ratio as at the
Exchange Notice Date determined by the IMB and CP pursuant to this
paragraph 1.10 will, in the absence of manifest error, be final and
binding on the Parties and the Mezzanine Investors and will be used in
substitution of the Exchange Ratio agreed, or deemed to be agreed,
between GFL and Mvela Gold. The provisions of this paragraph 1.10 will
not apply if determination of the Exchange Ratio made by the Valuers.
2. VALUATION
(15% * Adjusted DCF of GFI - SA)
"EXCHANGE RATIO" = -------------------------------
(Adjusted DCF of GFI)
Page 23.
2.1 "ADJUSTED DCF" (whether for GFI-SA or GFL) means the DCF's determined
above plus or minus the adjustments as set out in paragraph 2.7 below,
for each relevant operation.
2.2 "DCF" means a discounted cash flow calculation. The items making up a
DCF calculation are further defined in paragraph 2.6 below.
2.3 "DCF OF GFI-SA" means the DCF's of all the operations within GFI-SA.
2.4 "DCF OF GFL" means the aggregate of GFL's attributable portions of the
DCF's of all the operations within GFL, including the attributable
portion of the DCF of GFI-SA (i.e. 85% (eighty-five percent) of the DCF
of GFI-SA).
2.5 The calculation of the Exchange Ratio therefore requires any person
undertaking such calculation to do 2 (two) calculations, the first
being the Adjusted DCF of GFI-SA and the second being the Adjusted DCF
of all other operations in the GFL Group. GFL will provide all
information required by Mvela Gold (whether before or after the
Exchange Notice Date), the IMB or the CP, as the case may be, and all
reasonable assistance necessary to enable Mvela Gold (whether before or
after the Exchange Notice Date), the IMB or the CP, as the case may be,
to calculate the Exchange Ratio as at the Exchange Notice Date, the
total number of issued Equity Shares of GFL in issue on the Exchange
Notice Date and the number of GFL Shares to be issued to Mvela Gold as
at the Exchange Notice Date.
2.6 DCF is the discounted cashflow valuation of a mining operation. The DCF
of the individual operations shall be based on the after tax; after
capex cashflows of the operations, based on the reserves as per the
life of mine projections per the SAMREC code. The projected figures to
be used in the DCF are real figures instead of nominal figures and
shall include inter alia the following (all projections as at the
Exchange Notice Date):
2.6.1 operating income and operating expenses (including healthcare
and pension costs) adjusted as necessary for non cash
expenses;
2.6.2 working capital;
2.6.3 capital expenditure;
2.6.4 taxation (net of tax rebates, tax credits etc.);
2.6.5 any other taxes applicable to any operation at the valuation
date (such as royalties);
Page 24.
2.6.6 overhead costs incurred by any GFL Group Company (currently
GFL Mining Services Limited) on behalf of the operation in
question and charged by such GFL Group Company (currently GFL
Mining Services Limited) to such operations;
2.6.7 proportional share of group costs such as World Gold Council
subscription and Gold Fields Group Social Investment
contributions, unless where these costs are specifically
attributable in which case the actual costs will be used;
2.6.8 rehabilitation costs (including payments to rehabilitation
funds);
2.6.9 asset sales and plant clean up will be disregarded on the
basis that it has been agreed that these will net off.
2.7 To arrive at Adjusted DCF, the DCF calculated in paragraph 2.6 above is
adjusted as follows (all values as at the Exchange Notice Date):
2.7.1 the book value of any debt attributable to the relevant
operation will be deducted from the DCF value of that
operation. This will include inter-company and shareholder
debt, suitably adjusted if done at rates which are not market
related;
2.7.2 the market value of cash or investments held by each operation
will be added to the DCF value;
2.7.3 any other assets and liabilities which are not included in the
discounted cashflow valuations or in paragraph 2.7.1 or
paragraph 2.7.2 above as applicable;
2.7.4 adjustments must be made to ensure that, to the extent that
debt against the GFI-SA balance sheet is utilized to fund
operations outside of GFI-SA, that debt will be deducted from
the Adjusted DCF of GFL's valuation and added back to the
adjusted DCF of GFI-SA. The converse will also apply as
applicable. Any borrowings in excess of R50 million within the
GFL Group would have been approved by the board of directors
of GFL which would indicate the purpose thereof.
However, the Parties accept that the ability of GFL to gear its various
balance sheets and manage its cash resources cannot be fettered.
2.7.5 Subject to the provisions of paragraph 3.1 below, in
accordance with its current policy, it is accepted that GFI-SA
can distribute 100% (one
Page 25.
hundred percent) of its Free Cash Flow as dividends. Free Cash
Flow for this purpose is defined as revenue less operating
cash costs, less interest paid, less taxes paid, less
royalties paid, less ongoing capital expenditure. For this
purpose Free Cash Flow excludes proceeds realised on the
disposal of any capital asset. Ongoing capital expenditure is
the cost of sustaining existing operations in accordance with
their life of mine plans, excluding projects to access ground
below existing infrastructure as at the Signature Date ("NEW
PROJECTS"). New Projects will be financed by debt or
shareholder loans on commercial terms. For the period between
the Effective Date and the Subscription Date, any person
determining the Exchange Ratio must add all dividend payments
made in that period that are regarded as being made out of
borrowed funds (or exceeding Free Cash Flow) to the Adjusted
DCF of GFI-SA and subtract the same amount from the Adjusted
DCF of GFL.
2.7.6 It is recognised that some entities in the GFL Group (such as
GFL) will not require a DCF calculation, but only Adjusted
DCF's since they are not conducting mining operations but do
own assets.
2.8 The following items are specifically excluded from the DCF and Adjusted
DCF calculations:
2.8.1 financing costs, being interest and finance charges under
leases (since the debt component is deducted to arrive at
Adjusted DCF);
2.8.2 deferred tax;
2.8.3 healthcare and pension provisions;
2.8.4 the item classified by the auditors of GFL as the "equity
component" of the loan advanced by Mvela Gold as part of this
transaction (as per the relevant accounting statements);
2.8.5 the value of ancillary assets such as security services and
hospitals will be disregarded for both GFI-SA and GFL (if
any);
2.8.6 financial guarantees from one group company to another are
ignored since the actual debt incurred is adjusted for.
2.9 For non-wholly owned operations, the DCF and Adjusted DCF will only
incorporate the applicable percentage of the relevant cashflows or
asset/liability, whether at every line item or through a once off final
adjustment.
Page 26.
2.10 The Adjusted DCF of GFL shall be determined using the same methodology
and principles used in determining the Adjusted DCF of GFI-SA. The DCF
calculation and further adjustments for each operation will be done in
the currency of the country where the operation is located (or in US$
if that is the operation's principal currency used) and the foreign
currency DCF will be converted to a ZAR DCF at the average of closing
price (South African markets close) of that currency for the previous
30 (thirty) trading days.
2.11 The Gold price per ounce to be used in the DCF calculations shall be
the average for the last 30 (thirty) trading days of the South African
closing spot rate for 1 ounce of Gold in US$. This gold price will be
converted to a home currency gold price (per ounce or kilogram as
applicable) at the average of closing price of that currency for the
previous 30 (thirty) trading days. Other commodity prices, as
applicable, shall be set in the same way.
2.12 The discounted values for GFI-SA and GFL will include value associated
with exploration assets and resources as determined by the person
undertaking the valuation.
2.13 The valuation shall use 5% (five percent) as a real discount rate for
all cash flows from operations unless there are compelling reasons in
the opinion of the person undertaking such valuation to alter this
discount rate to compensate for subsequent changes in the relative risk
(including operational, construction and country risk) associated with
each asset.
2.14 Xxxxxx, if any, shall be valued on a xxxx-to-market basis and shall be
accounted for in the relevant operation whose production/interest
rates/currency is being hedged.
2.15 The value of assets sold between GFL Group Companies on terms which are
not arm's length terms may be adjusted appropriately by any person
undertaking the valuation of the relevant operations.
Page 27.
3. INTERGROUP LOAN ARISING FROM REORGANISATION AGREEMENT
Due to the internal re-organisation in the GFL Group to create GFI-SA,
the assets will be purchased by GFI-SA in terms of the Reorganisation
Agreement at book value which at 31 October 2003 amounted to R4,671
billion. This amount is funded on loan account from GFL. An amount of
R4,139 billion will be re-financed through the GFI-SA Loan Agreement.
The balance will carry interest at market related rates. Any portion of
this inter-company loan account plus accrued interest thereon still
outstanding at the Exchange Notice Date will be disregarded as an asset
in the Adjusted DCF of GFL and will be disregarded as a liability in
the Adjusted DCF of GFI-SA.
