Loan Agreement
13351-1
EXHIBIT 4.89
Between:
DRD (Isle of Man) Limited
Emperor Mines Limited; and
Emperor Gold Mining Company
Limited
Limited
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Table of contents
Clause
Page
1
Definitions and interpretation
4
1.1
Definitions
4
1.2
Interpretation
7
2
Conditions precedent and shareholder approval
8
2.1
Conditions precedent
8
2.2
Waiver
8
2.3
Shareholder approval
8
3
Loan Facility
9
3.1
Loan Facility
9
3.2
Pre-conditions to obligation to make an Advance
9
3.3
Amount of a draw down
9
3.4
Use of an Advance
9
4
Repayments and termination
9
4.1
Repayment of the Principal Outstanding
9
4.2
Interest
10
4.3
Outstanding amounts capitalised
10
4.4
Prepayment
10
4.5
Method of payment
10
4.6
Payments in gross
11
4.7
Appropriation of payments
11
4.8
Termination on receipt of Tuvatu Project Sale Cash Proceeds
11
5
Guarantee and Security
11
5.1
Guarantee
11
5.2
Limited Recourse
12
5.3
Execution of Security Documents
12
5.4
Form of Security
12
5.5
The Borrower’s security undertaking
13
5.6
Acknowledgement of the terms of the ASX Waiver
13
6
Conversion rights
13
6.1
Conversion of Principal Outstanding
13
6.2
Conversion calculation
13
6.3
Adjustment for Diluting Event
14
6.4
Restrictions on Conversion
14
6.5
Shares to be issued on conversion
15
7
Representations and warranties
15
7.1
Representations and warranties
15
7.2
Survival of representations and warranties
16
7.3
Reliance
16
7.4
Continuing obligation
16
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8
Undertakings by the Borrower
16
8.1
Provision of information and accounts
16
8.2
Notices to the Lender
17
8.3
Negative pledge and disposal of assets
17
8.4
Term of undertakings
17
9
Events of Default
18
9.1
Events of Default
18
9.2
Effect of Event of Default
19
10
Tax, fees, costs and expenses
20
10.1
Tax
20
10.2
Costs and expenses
20
11
Indemnity
20
11.1
General indemnity
20
11.2
Continuing indemnities and evidence of loss
20
11.3
Foreign currency indemnity
21
12
Assignment
21
13
General
21
13.1
Confidential information
21
13.2
Performance by Lender of obligations
21
13.3
Notices
22
13.4
Governing law and jurisdiction
23
13.5
Prohibition and enforceability
23
13.6
Waivers
23
13.7
Variation
24
13.8
Cumulative rights
24
13.9
Certificates of Lender
24
13.10
Further assurances
24
13.11
Entire agreement
24
13.12
Third party rights
24
13.13
Counterparts
24
13.14
Attorneys
24
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This convertible term loan agreement
is made on
2005 between the following parties:
0
XXX (Xxxx xx Xxx) Limited (Company number 94445C) of Xxxxxxxxx Xxxxx, 00/00 Xxxxx Xxxxxx,
Xxxxxxx, Xxxx of Man
(Lender)
Xxxxxxx, Xxxx of Man
(Lender)
2
Emperor Mines Limited (A.C.N. 007 508 787) of Suite 303, 3rd Floor, 00 Xxxxxxxx Xxxxxx, Xxxxxx,
XXX, Xxxxxxxxx, 0000
(Borrower)
XXX, Xxxxxxxxx, 0000
(Borrower)
3
Emperor Gold Mining Company Limited a company incorporated in Fiji of Vatukoula, Fiji
(Guarantor)
(Guarantor)
Recitals
The Borrower has requested the Lender, and the Lender has agreed, to make available a convertible
term loan facility to the Borrower and the Guarantor has agreed to guarantee the Borrower’s
obligations on the terms and conditions contained in this agreement.
term loan facility to the Borrower and the Guarantor has agreed to guarantee the Borrower’s
obligations on the terms and conditions contained in this agreement.
The parties agree
in consideration of, among other things, the mutual promises contained in this agreement:
1
Definitions and interpretation
1.1
Definitions
In this agreement:
Advance means each principal amount made available by the Lender to the Borrower under the Loan
Facility by way of loan in accordance with the terms of this agreement;
Facility by way of loan in accordance with the terms of this agreement;
ANZ Bank means Australia and New Zealand Banking Group Limited ABN 11 005 357 522 and its
subsidiaries;
subsidiaries;
ANZ Facility means the credit facility provided by ANZ Bank to the Borrower dated 18 December
2002;
2002;
ASX Waiver means the waiver from the Australian Stock Exchange to the requirements of Listing
Rule 10.1 granted on 6 July 2005.
Rule 10.1 granted on 6 July 2005.
Authorised Signatory means either the chief operating officer and general manager of the Vatakoula
Mine and any director or officer of the Borrower that is not a nominee director of the Lender each of
who are duly authorised to sign a Draw Down Request as an Authorised Signatory;
Mine and any director or officer of the Borrower that is not a nominee director of the Lender each of
who are duly authorised to sign a Draw Down Request as an Authorised Signatory;
Business Day means a day on which trading banks are open for trading generally and which is not a
Saturday or Sunday or public holiday in New South Wales;
Saturday or Sunday or public holiday in New South Wales;
Completion Date means not more than 7 Business Days from the date of satisfaction or waiver of the
last of the conditions precedent specified in clause 2.1;
last of the conditions precedent specified in clause 2.1;
Concentrating Event means any event that, in the reasonable opinion of the Lender, may have a
concentrative effect on the value of the Shares and includes off-market buy backs, reorganisation or
reconstruction of capital (including consolidation, sub-division, reduction or reclassification);
concentrative effect on the value of the Shares and includes off-market buy backs, reorganisation or
reconstruction of capital (including consolidation, sub-division, reduction or reclassification);
Conversion Notice means the notice of conversion of any or all of the Principal Outstanding which is
to be in the form set out in Schedule 2 to this agreement
to be in the form set out in Schedule 2 to this agreement
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Corporations Act means the Corporations Xxx 0000 (Cth);
Diluting Event means any event that, in the reasonable opinion of the Lender, may have a diluting
effect on the value of the Shares and includes a pro rata issue of Shares (including a bonus issue or
rights issue), issue of Shares under any dividend reinvestment plan, employee incentive scheme or a
share purchase plan, conversion of any convertible securities, return of capital, reorganisation or
reconstruction of capital;
effect on the value of the Shares and includes a pro rata issue of Shares (including a bonus issue or
rights issue), issue of Shares under any dividend reinvestment plan, employee incentive scheme or a
share purchase plan, conversion of any convertible securities, return of capital, reorganisation or
reconstruction of capital;
Draw Down Request means a draw down request in the form set out in Schedule 1 to this
agreement;
agreement;
Encumbrance includes an interest or power:
(a)
reserved in or over an interest in any asset including any retention of title; or
(b)
created or otherwise arising in or over any interest in any asset under a xxxx of sale, mortgage,
charge, lien, pledge, trust or power,
charge, lien, pledge, trust or power,
by way of, or having similar commercial effect to, Security for the payment of a debt, any other
monetary obligation or the performance of any other obligation, and includes any agreement to grant
or create any of the above but excludes liens arising in the ordinary course of business by operation of
law and title retention in respect of stock in trade;
monetary obligation or the performance of any other obligation, and includes any agreement to grant
or create any of the above but excludes liens arising in the ordinary course of business by operation of
law and title retention in respect of stock in trade;
Event of Default means the occurrence of any event specified in clause 9.1 of this agreement;
Facility A Loan Agreement means the loan agreement between Investec and the Lender;
Free Cash Flows means the total earnings before interest less capital expenditure and provision for 3
months working capital and 3 months development capital;
months working capital and 3 months development capital;
Guarantee means any guarantee, suretyship, letter of credit, letter of comfort or any other obligation
(whatever called and of whatever nature):
(whatever called and of whatever nature):
(a)
to provide funds (whether by the advance or payment of money, the purchase of or
subscription for shares or other securities, the purchase of assets or services, or otherwise) for
the payment or discharge of;
subscription for shares or other securities, the purchase of assets or services, or otherwise) for
the payment or discharge of;
(b)
to indemnify any person against the consequences of default in the payment of; or
(c)
to be responsible for,
any debt or monetary liability of another person or the assumption of any responsibility or obligation in
respect of the insolvency or the financial condition of any other person;
respect of the insolvency or the financial condition of any other person;
Immediately Available Funds means an electronic transfer of funds received into an Australian bank
account nominated by the Lender;
account nominated by the Lender;
Interest Rate means 9% per annum;
Investec means Investec Bank Limited, a company with limited liability registered in accordance with
the laws of South Africa under registration number 1969/004763/06;
the laws of South Africa under registration number 1969/004763/06;
Lender’s Secured Assets means:
(a)
all assets forming part of the Tuvatu Project;
(b)
all rights that vest in the Guarantor in the Tuvatu Project Sale Agreements or any other
documents the purpose of which relate to sale of any assets forming part of the Tuvatu Project;
and
documents the purpose of which relate to sale of any assets forming part of the Tuvatu Project;
and
(c)
the Tuvatu Project Sale Funds to be received by the Guarantor;
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Listing Rules means the Listing Rules of the Australian Stock Exchange;
Loan Facility means the amount made available to the Borrower on and from the Completion Date,
being a maximum of US$7,425,000, in accordance with the terms of this agreement;
being a maximum of US$7,425,000, in accordance with the terms of this agreement;
Mortgage Property means:
(a) the following Special Prospecting licence and licence applications:
•
SPL 1283;
•
SPL 1296;
•
SPL 1418;
•
SPL 1360;
(b) the Guarantor’s rights under the Tuvatu Project Sale Agreements; and
(c) any bank account opened by the Guarantor after the execution of the Subordination Deed at the
request of the Lender, at a bank or branch specified by Lender into which no deposit is made
other than of any Net Proceeds;
other than of any Net Proceeds;
(d) all shares held by the Guarantor at any time in Alcaston Mining NL;
(e) all shares held by the Guarantor at any time in Tuvatu Gold Mining Company;
Net Proceeds has the meaning given to it in the Subordination Deed;
Operational Support Agreement means the agreement between the Borrower, Lender and
Guarantor dated 7 July 2005;
Guarantor dated 7 July 2005;
Permitted Encumbrance means any encumbrance granted in favour of ANZ to secure monies owed
to ANZ under the ANZ Facility;
to ANZ under the ANZ Facility;
Principal Outstanding means at any time the aggregate of all Advances that has not been repaid
plus any other Unpaid Amounts (including interest accrued as at that date);
plus any other Unpaid Amounts (including interest accrued as at that date);
Related Body Corporate has the same meaning as in the Corporations Act;
Security means any present or future mortgage, security by way of deposit of money or other
property, pledge, lien, charge, security by way of assignment, hypothecation, security by way of trust
arrangement, encumbrance, title retention or any other security interest or security arrangement
whatsoever;
property, pledge, lien, charge, security by way of assignment, hypothecation, security by way of trust
arrangement, encumbrance, title retention or any other security interest or security arrangement
whatsoever;
Security Documents means the documents executed or to be executed by, inter alia, the parties to
this agreement or Related Body Corporate of the parties to this agreement the purpose of which is to
provide the Lender with first ranking Security over the Lender’s Secured Assets;
this agreement or Related Body Corporate of the parties to this agreement the purpose of which is to
provide the Lender with first ranking Security over the Lender’s Secured Assets;
Shareholder Approval means the approval required in clause 2.3 of this agreement;
Shares means the fully paid ordinary shares in the Borrower;
Subordination Deed means the deed dated on or about 7 July between ANZ, the Borrower and the
Lender;
Lender;
Tax means:
(a)
any tax, including the GST, VAT, levy, charge, impost, duty, fee, deduction, compulsory loan or
withholding; or
withholding; or
(b)
any income, stamp or transaction duty, tax or charge,
which is assessed, levied, imposed or collected by any government agency and includes any interest,
fine, penalty, charge, fee or other amount imposed on or in respect of any of the above;
fine, penalty, charge, fee or other amount imposed on or in respect of any of the above;
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Tuvatu Project means the assets of and the business run by Tuvatu Gold Mining Company Limited
and includes all mining tenements, special prospecting licences, receivables and intellectual property
owned by or registered in the name of that company;
and includes all mining tenements, special prospecting licences, receivables and intellectual property
owned by or registered in the name of that company;
Tuvatu Project Sale Agreements means the Tuvatu Share Sale Deed, royalty deed between the
Guarantor, Tuvatu Gold Mining Company Limited and Alcaston Mining NL and the deed of assignment
debt between the Guarantor, Tuvatu Gold Mining Company Limited and Alcaston Mining NL;
Guarantor, Tuvatu Gold Mining Company Limited and Alcaston Mining NL and the deed of assignment
debt between the Guarantor, Tuvatu Gold Mining Company Limited and Alcaston Mining NL;
Tuvatu Project Sale Funds means all consideration to be received by the Borrower from the sale of
any assets forming part of the Tuvatu Project and any subsequent royalties earned from those mining
tenements;
any assets forming part of the Tuvatu Project and any subsequent royalties earned from those mining
tenements;
Tuvatu Project Sale Cash Proceeds means the cash consideration to be received by the Borrower
pursuant to the Tuvatu Share Sale Deed (which shall not include any royalty under the terms of the
royalty deed between the Guarantor, Tuvatu Gold Mining Company Limited and Alcaston Mining NL);
pursuant to the Tuvatu Share Sale Deed (which shall not include any royalty under the terms of the
royalty deed between the Guarantor, Tuvatu Gold Mining Company Limited and Alcaston Mining NL);
Tuvatu Share Sale Deed means that share sale deed between the Guarantor, Koula Mining
Company Limited, Tuvatu Gold Mining Company Limited and Alcaston Mining NL dated 27 June 2005;
and
Company Limited, Tuvatu Gold Mining Company Limited and Alcaston Mining NL dated 27 June 2005;
and
Unpaid Amounts means any amount which has become due and payable in accordance with the
terms of this agreement and has not been paid by the Borrower.
terms of this agreement and has not been paid by the Borrower.
1.2
Interpretation
(a)
In this agreement, headings and bold type are for convenience only and do not affect the
interpretation of this agreement and, unless the context otherwise requires:
interpretation of this agreement and, unless the context otherwise requires:
(i)
words indicating the singular include the plural and vice versa;
(ii)
words indicating a gender include any gender;
(iii)
other parts of speech and grammatical forms of a word or phrase defined in this
agreement have a corresponding meaning;
agreement have a corresponding meaning;
(iv)
an expression importing a natural person includes any company, partnership, joint
venture, association, corporation or other body corporate and any government agency;
venture, association, corporation or other body corporate and any government agency;
(v)
a reference to any thing (including, but not limited to, any right) includes a part of that
thing;
thing;
(vi)
a reference to any legislation includes any change to, consolidation or replacement of it,
whether passed by the same or another government agency with legal power to do so,
and any delegated legislation or proclamation issued under it;
whether passed by the same or another government agency with legal power to do so,
and any delegated legislation or proclamation issued under it;
(vii)
a reference to a document includes all amendments or supplements to, or replacements
or novations of, that document;
(viii)
a reference to a party to a document includes that party’s successors and permitted
assigns;
(ix)
no provision of this agreement will be construed adversely to a party solely on the
ground that the party was responsible for the preparation of this agreement or that
provision;
ground that the party was responsible for the preparation of this agreement or that
provision;
(x)
a reference to a clause, party, annexure, exhibit or schedule is a reference to a clause
of, and a party, annexure, exhibit and schedule to, this agreement and a reference to
this agreement includes any annexure, exhibit and schedule;
of, and a party, annexure, exhibit and schedule to, this agreement and a reference to
this agreement includes any annexure, exhibit and schedule;
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(xi)
a reference to an agreement other than this agreement includes an undertaking, deed,
agreement or legally enforceable arrangement or understanding whether or not in
writing; and
agreement or legally enforceable arrangement or understanding whether or not in
writing; and
(xii)
a reference to a document includes any agreement in writing, or any certificate, notice,
instrument or other document of any kind.
(b)
In this agreement, specifying anything after the words “includes” or “for example” or similar
expressions do not limit what else is included unless there is express wording to the contrary.
expressions do not limit what else is included unless there is express wording to the contrary.
(c)
Where the day on or by which any thing is to be done is not a Business Day, that thing must be
done on or by the next Business Day.
done on or by the next Business Day.
1.3
Acknowledgement of Subordination Deed
The Lender hereby acknowledges and agrees that the rights of the Lender and any of its successors
or assignees in this agreement are subject to the terms of the Subordination Deed
or assignees in this agreement are subject to the terms of the Subordination Deed
.
2
Conditions precedent and shareholder approval
2.1
Conditions precedent
The Lender is not obliged to provide the Loan Facility to the Borrower until it has received each of the
following in form and of substance satisfactory to the Lender (or waived in accordance with clause
2.2):
following in form and of substance satisfactory to the Lender (or waived in accordance with clause
2.2):
(a)
ANZ subordination agreement: the written consent of ANZ for the execution by the parties to
this agreement and any document completed by it including but not limited to the documents
contemplated by clauses 2.1(d) below and a waiver of certain obligations in respect of the ANZ
Facility;
this agreement and any document completed by it including but not limited to the documents
contemplated by clauses 2.1(d) below and a waiver of certain obligations in respect of the ANZ
Facility;
(b)
Investec consent: Investec consenting to the Lender drawing down on its Facility A Loan
Agreement for the purposes of providing the Facility to the Borrower;
Agreement for the purposes of providing the Facility to the Borrower;
(c)
corporate authorisation: a certified copy of a resolution of the directors of the Borrower
approving the terms and conditions of the Loan Facility and resolving that shareholder approval
for the Borrower to enter into the Loan Facility is not required and authorising a director or other
authorised representative to execute this agreement on behalf of the Borrower;
approving the terms and conditions of the Loan Facility and resolving that shareholder approval
for the Borrower to enter into the Loan Facility is not required and authorising a director or other
authorised representative to execute this agreement on behalf of the Borrower;
(d)
Operational Support Agreement: executed Operational Support Agreement;
(e)
Alcaston Mining NL consent: a consent from Alcaston Mining NL to the granting of Security
over the Tuvatu project; and
over the Tuvatu project; and
(f)
Written ASX Waiver: the Borrower obtaining a written waiver from the Australian Stock
Exchange in the terms of the ASX Waiver.
Exchange in the terms of the ASX Waiver.
2.2
Waiver
The conditions in clause 2.1 are for the benefit of the Lender and may only be waived by the Lender.
2.3
Shareholder approval
The Borrower must at its own expense as soon as reasonably practicable (and in any event no later
than 15 August 2005) take all steps necessary to obtain the approval of the requisite majority of the
holders of Shares for the execution of the terms of this agreement by the Lender and the Borrower (to
than 15 August 2005) take all steps necessary to obtain the approval of the requisite majority of the
holders of Shares for the execution of the terms of this agreement by the Lender and the Borrower (to
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the extent that the entry into this agreement by the Borrower constitutes an agreement to issue a
convertible security (as defined by the Listing Rules) to a related party and requires approval for the
purposes of Listing Rule 10.11) and keep the Lender fully informed of the progress of obtaining such
approval (including obtaining the Lender’s comment on all documents produced for this purpose). The
rights in clause 6 of this agreement are subject to the Borrower obtaining the approval required by this
clause.
convertible security (as defined by the Listing Rules) to a related party and requires approval for the
purposes of Listing Rule 10.11) and keep the Lender fully informed of the progress of obtaining such
approval (including obtaining the Lender’s comment on all documents produced for this purpose). The
rights in clause 6 of this agreement are subject to the Borrower obtaining the approval required by this
clause.
3
Loan Facility
3.1
Loan Facility
The Lender agrees to make available to the Borrower the Loan Facility from the Completion Date on
the terms and conditions contained in this agreement.
the terms and conditions contained in this agreement.
3.2
Pre-conditions to obligation to make an Advance
The obligation of the Lender to make any Advance to the Borrower is conditional upon the satisfaction
of the Lender of the following specific pre-conditions:
of the Lender of the following specific pre-conditions:
(a)
the Borrower providing the Lender with a Draw Down Request signed by two Authorised
Signatories provided that at least one Authorised Signatory is either the chief operating officer
or general manager of the Vatakoula Mine;
Signatories provided that at least one Authorised Signatory is either the chief operating officer
or general manager of the Vatakoula Mine;
(b)
the Borrower providing the Lender with any other information reasonably required by the
Lender, to confirm the accuracy of the representations and warranties given by the Borrower
upon draw down;
Lender, to confirm the accuracy of the representations and warranties given by the Borrower
upon draw down;
(c)
the Lender being reasonably satisfied that the Borrower has met the specific pre-conditions
specified in the Draw Down Request; and
specified in the Draw Down Request; and
(d)
the Lender being reasonably satisfied that the funds will be used for a use permitted under
clause 3.4.
clause 3.4.
3.3
Amount of a draw down
(a)
Unless otherwise approved by the Lender, the total amount of all Draw Down Requests
received by the Lender in any one month must not exceed the maximum amount prescribed for
that month as set out in Schedule 3 to this agreement.
received by the Lender in any one month must not exceed the maximum amount prescribed for
that month as set out in Schedule 3 to this agreement.
(b)
All amounts requested in a Draw Down Request must be in the currency of the United States of
American and in tranches of US$100,000 or such lesser amounts agreed by the Lender.
American and in tranches of US$100,000 or such lesser amounts agreed by the Lender.
3.4
Use of an Advance
The Borrower may use an Advance solely for the purpose specified in the relevant Draw Down
Request which purpose must be directly related to the operation of the Borrower’s gold mine at
Vatakoula and operational employee entitlements in both cases having regard to the mine plan in use
by the Borrower at that point in time or such other purpose as is agreed in writing by the Lender.
Request which purpose must be directly related to the operation of the Borrower’s gold mine at
Vatakoula and operational employee entitlements in both cases having regard to the mine plan in use
by the Borrower at that point in time or such other purpose as is agreed in writing by the Lender.
4
Repayments and termination
4.1
Repayment of the Principal Outstanding
The Borrower must repay the Principal Outstanding to the Lender on the earlier of:
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(a)
10 Business Days following the Lender giving the Borrower written notice (which notice may
only be given after the date on which the Borrower has received the Tuvatu Project Sale Cash
Proceeds) save that the Borrowers obligation to repay the Principal Outstanding will be limited
to the amount specified in that written notice which must be no more than the Tuvatu Project
Sale Cash Proceeds;
only be given after the date on which the Borrower has received the Tuvatu Project Sale Cash
Proceeds) save that the Borrowers obligation to repay the Principal Outstanding will be limited
to the amount specified in that written notice which must be no more than the Tuvatu Project
Sale Cash Proceeds;
(b)
on 30 June 2007 save that the Borrowers obligation to repay the Principal Outstanding will not
exceed the greater of AUS$1,000,000 or 25% of Emperor’s Free Cash Flows and which
amount must first be satisfied out of the remaining Tuvatu Project Sale Cash Proceeds;
exceed the greater of AUS$1,000,000 or 25% of Emperor’s Free Cash Flows and which
amount must first be satisfied out of the remaining Tuvatu Project Sale Cash Proceeds;
(c)
31 December 2007;
(d)
on the occurrence of an Event of Default; or
(e)
the end of the notice period specified in clause 4.4 save that the Borrowers obligation to repay
the Principal Outstanding will be equal to the amount specified in the notice referred to in
clause 4.4;
the Principal Outstanding will be equal to the amount specified in the notice referred to in
clause 4.4;
4.2
Interest
(a)
The Borrower must pay to the Lender interest on the Principal Outstanding calculated at the
Interest Rate on daily balances from the date of this agreement until the Principal Outstanding
is repaid in full.
Interest Rate on daily balances from the date of this agreement until the Principal Outstanding
is repaid in full.
(b)
Interest shall be payable by the Borrower on the last day of each calendar month (Interest
Payment Date). The Lender must no later than 2 Business Days prior to that Interest Payment
Date calculate and notify the Borrower of the interest accrued and payable on the Interest
Payment Date.
Payment Date). The Lender must no later than 2 Business Days prior to that Interest Payment
Date calculate and notify the Borrower of the interest accrued and payable on the Interest
Payment Date.
4.3
Outstanding amounts capitalised
Interest will accrue on all Unpaid Amounts on daily balances until such Unpaid Amounts are paid in
accordance with clause 4.5.
accordance with clause 4.5.
4.4
Prepayment
(a)
The Borrower may prepay all or part of the balance of the Principal Outstanding by giving the
Lender at least 20 Business Days’ prior written notice of its intention to do so during which
period the Lender will have the right, subject to the Borrower having obtained Shareholder
Approval, to elect to convert some or all of the Principal Outstanding to Shares by serving the
Borrower with a Conversion Notice in accordance with the requirements of clause 5.
Lender at least 20 Business Days’ prior written notice of its intention to do so during which
period the Lender will have the right, subject to the Borrower having obtained Shareholder
Approval, to elect to convert some or all of the Principal Outstanding to Shares by serving the
Borrower with a Conversion Notice in accordance with the requirements of clause 5.
(b)
If following the Borrower giving notice in accordance with clause 4.4(a) the Borrower receives a
Conversion Notice, the notice period referred to in clause 4.4(a) is postponed until such time as
the Borrower has fully complied with its obligations under clause 6 at which time that notice
period will recommence. The Borrower’s right in clause 4.4(a) to prepay all or part of the
balance of the Principal Outstanding is subject to compliance with this clause.
Conversion Notice, the notice period referred to in clause 4.4(a) is postponed until such time as
the Borrower has fully complied with its obligations under clause 6 at which time that notice
period will recommence. The Borrower’s right in clause 4.4(a) to prepay all or part of the
balance of the Principal Outstanding is subject to compliance with this clause.
(c)
On the prepayment date specified in the notice given under clause 4.4(a), the Borrower must
pay to the Lender the amount of the Principal Outstanding in accordance with clause 4.5.
pay to the Lender the amount of the Principal Outstanding in accordance with clause 4.5.
(d)
The amount of Principal Outstanding prepaid under this clause may not be redrawn.
4.5
Method of payment
All amounts payable by the Borrower under this agreement must be paid in United States Dollars and
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made to the Lender in Immediately Available Funds or any other form of payment that the Lender and
Borrower agree.
Borrower agree.
4.6
Payments in gross
The Borrower must make all payments due under this agreement without:
(a)
any set-off, counterclaim or condition; and
(b)
any deduction or withholding for any Tax or any other reason, unless the Borrower is required
to make a deduction or withholding by applicable law and the Lender has been notified of the
deduction or withholding in which case it must pay to the Lender additional amounts necessary
to enable the Lender to receive, after the deduction or withholding, a net amount equal to the
full amount which would otherwise have been payable had no deduction or withholding been
required to be made.
to make a deduction or withholding by applicable law and the Lender has been notified of the
deduction or withholding in which case it must pay to the Lender additional amounts necessary
to enable the Lender to receive, after the deduction or withholding, a net amount equal to the
full amount which would otherwise have been payable had no deduction or withholding been
required to be made.
4.7
Appropriation of payments
(a)
All payments made by the Borrower may be appropriated as between principal, interest and
other amounts as the Lender in its absolute discretion determines, or, failing any determination,
in the following order:
other amounts as the Lender in its absolute discretion determines, or, failing any determination,
in the following order:
(i)
first, towards reimbursement of all fees, costs, expenses, charges, damages, indemnity
payments and other like amounts incurred or owing by the Borrower under this
agreement or the Operational Support Agreement;
payments and other like amounts incurred or owing by the Borrower under this
agreement or the Operational Support Agreement;
(ii)
next, towards payment of interest owing; and
(iii)
next, towards repayment or prepayment of the Loan Facility.
(b)
Any appropriation under clause 4.7(a) overrides any appropriation made by the Borrower.
4.8
Termination on receipt of Tuvatu Project Sale Cash Proceeds
(a)
Subject to clause 4.8(b), if for any reason all of the Tuvatu Project Sale Cash Proceeds have
been applied in repayment of the Principal Outstanding (including by repayment in accordance
with clause 4.1 or prepayment in clause 4.4), the Lender shall be entitled to terminate this
agreement by notice in writing to the Borrower.
been applied in repayment of the Principal Outstanding (including by repayment in accordance
with clause 4.1 or prepayment in clause 4.4), the Lender shall be entitled to terminate this
agreement by notice in writing to the Borrower.
(b)
On termination, the Borrower must immediately make any payments owing to the Lender under
this agreement and this agreement has no further effect and neither the Lender nor the
Borrower is liable to the other except:
this agreement and this agreement has no further effect and neither the Lender nor the
Borrower is liable to the other except:
(i)
under clauses 4, 9 and 10; and
(ii)
in respect of any breach of this agreement occurring before termination.
5
Guarantee and Security
5.1
Guarantee
In consideration of the entry by the Lender and Borrower into this agreement, the Guarantor
unconditionally and irrevocably guarantees, subject to clause5.2, to the Lender the due and punctual
performance and observance by the Borrower of all of its obligations, commitments and undertakings
under or pursuant to this agreement and agrees to indemnify the Lender against all losses, liabilities,
costs (including without limitation legal costs) charges, expenses, actions, proceedings, claims and
unconditionally and irrevocably guarantees, subject to clause5.2, to the Lender the due and punctual
performance and observance by the Borrower of all of its obligations, commitments and undertakings
under or pursuant to this agreement and agrees to indemnify the Lender against all losses, liabilities,
costs (including without limitation legal costs) charges, expenses, actions, proceedings, claims and
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demands which the Lender may suffer through or arising from any breach by the Borrower of its
obligations under this agreement. This guarantee is given for the benefit of the Lender and its
respective successors and assigns and shall be binding on the Lender and its respective successors
and assigns.
obligations under this agreement. This guarantee is given for the benefit of the Lender and its
respective successors and assigns and shall be binding on the Lender and its respective successors
and assigns.
5.2
Limited Recourse
(a)
The Lender aggregate liability of the Guarantor under or in connection with this agreement or
any Security granted by the Guarantor is limited to the proceeds of realisation of the Mortgaged
Property.
any Security granted by the Guarantor is limited to the proceeds of realisation of the Mortgaged
Property.
(b)
If the Lender does not recover all amounts owing to it by enforcing its powers with respect to
the Lender’s Secured Assets, it is not entitled to take any other action against the Guarantor
under this agreement in its personal corporate capacity to recover the shortfall.
the Lender’s Secured Assets, it is not entitled to take any other action against the Guarantor
under this agreement in its personal corporate capacity to recover the shortfall.
(c)
Nothing in this clause:
(i)
limits or reduces any amount owing to the Lender by the Borrower; or
(ii)
limits any of the powers of the Lender under this agreement, the Security Documents or
otherwise in respect of the Lender’s Security Documents to the extent permitted under
the Subordination Deed.
otherwise in respect of the Lender’s Security Documents to the extent permitted under
the Subordination Deed.
5.3
Execution of Security Documents
The Borrower and the Guarantor unconditionally represent, warrant, undertake and agree that as
condition for the Lender entering into the arrangement contemplated by this agreement and providing
the Facility, they will on the request of the Lender execute the Security Documents and do all things
necessary to and otherwise use their best endeavours to facilitate the grant to the Lender of first
ranking Security over the Lender’s Secured Assets. The parties to this agreement acknowledge and
agree that the first ranking Security to be granted over the Lender’s Security Assets forms part of the
consideration exchanged in respect of this agreement and is therefore part of the overall transaction
contemplated by this agreement.
condition for the Lender entering into the arrangement contemplated by this agreement and providing
the Facility, they will on the request of the Lender execute the Security Documents and do all things
necessary to and otherwise use their best endeavours to facilitate the grant to the Lender of first
ranking Security over the Lender’s Secured Assets. The parties to this agreement acknowledge and
agree that the first ranking Security to be granted over the Lender’s Security Assets forms part of the
consideration exchanged in respect of this agreement and is therefore part of the overall transaction
contemplated by this agreement.
5.4
Form of Security
The Security Documents may, at the Lender’s election, include (but shall not be limited to):
(a)
an obligations debenture between the Lender and Guarantor;
(b)
a direction and consent to security notice between the Lender, Guarantor, and Alcaston Mining
NL;
NL;
(c)
a fixed charge and mortgage of the rights granted to the Guarantor in the Tuvatu Project Sale
Agreements;
Agreements;
(d)
a fixed charge over a bank deposit to be granted by the Guarantor over the bank account into
which the Tuvatu Project Sale Cash Proceeds are to be deposited;
which the Tuvatu Project Sale Cash Proceeds are to be deposited;
(e)
a share mortgage between the Guarantor and the Borrower (in respect of the shares held in the
capital of Alcaston Mining NL); and
capital of Alcaston Mining NL); and
(f)
such other Securities reasonably required by the Lender to adequately secure the Lender’s
Secured Assets,
Secured Assets,
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each of which are to be on terms reasonably acceptable to the Lender. In the event that there is a
dispute between the Lender and the Borrower as to the terms of the Security Documents, the parties
will comply with the dispute resolution procedure set out in clause 6.3(b) to 6.3(f) below.
dispute between the Lender and the Borrower as to the terms of the Security Documents, the parties
will comply with the dispute resolution procedure set out in clause 6.3(b) to 6.3(f) below.
5.5
The Borrower’s security undertaking
As a separate undertaking in consideration for the provision of the Facility and all Advances made
under that Facility, the Borrower and the Guarantor (subject to the restrictions in clause 5.2 above)
charges their interest in the Lender’s Secured Assets and on the conditions contained herein.
under that Facility, the Borrower and the Guarantor (subject to the restrictions in clause 5.2 above)
charges their interest in the Lender’s Secured Assets and on the conditions contained herein.
5.6
Acknowledgement of the terms of the ASX Waiver
The parties each acknowledge that the rights of the Lender under the Security Documents are
restricted by the terms of the ASX Waiver such that if an Event of Default occurs and the Lender
exercises its power under the Security Documents it will not acquire the assets that comprise the
Tuvatu Project in full or part satisfaction of the amounts outstanding under this agreement or
otherwise forfeit the Tuvatu Project without first having complied with any applicable ASX Listing Rules
including Listing Rule 10.1.
restricted by the terms of the ASX Waiver such that if an Event of Default occurs and the Lender
exercises its power under the Security Documents it will not acquire the assets that comprise the
Tuvatu Project in full or part satisfaction of the amounts outstanding under this agreement or
otherwise forfeit the Tuvatu Project without first having complied with any applicable ASX Listing Rules
including Listing Rule 10.1.
6
Conversion rights
6.1
Conversion of Principal Outstanding
(a)
Subject to obtaining Shareholder Approval and obtaining the approval of the Foreign
Investment Review Board for the acquisition of Shares by the Lender under this clause, the
Lender may at any time prior to the repayment of the Principal Outstanding elect to convert
some or all of the Principal Outstanding into Shares by giving the Borrower a Conversion
Notice.
Investment Review Board for the acquisition of Shares by the Lender under this clause, the
Lender may at any time prior to the repayment of the Principal Outstanding elect to convert
some or all of the Principal Outstanding into Shares by giving the Borrower a Conversion
Notice.
(b)
Subject to clause 6.4, the Borrower must within 14 Business Days of receiving a Conversion
Notice issue to the Lender such number of Shares as is calculated in accordance with clause
6.2 and 6.3 and on receipt of title to those Shares satisfying the requirements of clause 6.5 the
Borrower’s obligation to repay that portion of the Principal Outstanding specified in the
Conversion Notice shall be extinguished.
Notice issue to the Lender such number of Shares as is calculated in accordance with clause
6.2 and 6.3 and on receipt of title to those Shares satisfying the requirements of clause 6.5 the
Borrower’s obligation to repay that portion of the Principal Outstanding specified in the
Conversion Notice shall be extinguished.
6.2
Conversion calculation
The number of Shares to be issued on conversion shall be calculated in respect of the following
formula:
formula:
Shares issued on conversion =
]
[
CP
PO
Where:
CP is the lower of AUS$0.30 or VWAP
PO is the Principal Outstanding that is being converted
VWAP is the 45 day volume weighted average sale price of the Shares sold on ASX prior to and
excluding he date of the Conversion Notice but does not include any transaction defined in the
ASX Business Rules as “special crossings”, crossings prior to the commencement of normal
trading, crossings during the after hours adjust phase or any overseas trades, the exercise of
options over Shares or any transactions made by or on behalf of the Lender or any associate of
the Lender
excluding he date of the Conversion Notice but does not include any transaction defined in the
ASX Business Rules as “special crossings”, crossings prior to the commencement of normal
trading, crossings during the after hours adjust phase or any overseas trades, the exercise of
options over Shares or any transactions made by or on behalf of the Lender or any associate of
the Lender
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6.3
Adjustment for Diluting Event
(a)
Following provision of a notice by the Lender to the Borrower that in the Lender’s reasonable
opinion there has been a Diluting Event or Concentrative Event, the Lender will determine
whether such event has had a diluting or concentrative effect on the theoretical value of the
Shares that, pursuant to this clause 6, may be issued to the Lender and, if so, notify the
Borrower in writing of what corresponding adjustment is necessary to the number of Shares to
be issued to the Lender to account for that diluting or concentrative effect and particulars of
that calculation which adjustment shall, to the extent relevant, not be inconsistent with the rules
relating to the reorganisation of convertible securities in Chapter 7 of the Listing Rules
(Adjustment Determination).
opinion there has been a Diluting Event or Concentrative Event, the Lender will determine
whether such event has had a diluting or concentrative effect on the theoretical value of the
Shares that, pursuant to this clause 6, may be issued to the Lender and, if so, notify the
Borrower in writing of what corresponding adjustment is necessary to the number of Shares to
be issued to the Lender to account for that diluting or concentrative effect and particulars of
that calculation which adjustment shall, to the extent relevant, not be inconsistent with the rules
relating to the reorganisation of convertible securities in Chapter 7 of the Listing Rules
(Adjustment Determination).
(b)
If the Borrower disputes the Adjustment Determination, it must do so within 5 Business Days of
receipt of the notice referred to in clause 6.3(a) by notifying the Provider in writing of the
particular aspects of the Adjustment Determination which are disputed and sufficient particulars
as to why the Borrower disputes those aspects. Unless the Borrower has complied with this
clause 6.3(b), it shall be bound by the Adjustment Determination.
receipt of the notice referred to in clause 6.3(a) by notifying the Provider in writing of the
particular aspects of the Adjustment Determination which are disputed and sufficient particulars
as to why the Borrower disputes those aspects. Unless the Borrower has complied with this
clause 6.3(b), it shall be bound by the Adjustment Determination.
(c)
In the event that a dispute arises, the parties will use their best endeavours to resolve the
dispute between themselves. If the parties fail to do so within 10 Business Days of receipt by
the Lender of the notice referred to in clause 6.3(b), the parties must within 5 Business Days
appoint an expert agreed by both the parties to determine the dispute. If an agreement as to
the identity of the expert cannot be agreed within that time limit, either party may request the
President of the Law Society of New South Wales from time to time to appoint an expert to
determine the dispute.
dispute between themselves. If the parties fail to do so within 10 Business Days of receipt by
the Lender of the notice referred to in clause 6.3(b), the parties must within 5 Business Days
appoint an expert agreed by both the parties to determine the dispute. If an agreement as to
the identity of the expert cannot be agreed within that time limit, either party may request the
President of the Law Society of New South Wales from time to time to appoint an expert to
determine the dispute.
(d)
The expert appointed under clause 6.3(c) must determine the dispute within 10 Business Days
of appointment. If the expert appointed is unable to carry out the determination within that time
limit, another expert must be appointed in accordance with the requirements of clause 6.3(c).
of appointment. If the expert appointed is unable to carry out the determination within that time
limit, another expert must be appointed in accordance with the requirements of clause 6.3(c).
(e)
The expert appointed under this clause acts as an expert and not an arbitrator. The dispute
resolution proceedings under this clause are not arbitration proceedings under the Commercial
Arbitration Xxx 0000.
resolution proceedings under this clause are not arbitration proceedings under the Commercial
Arbitration Xxx 0000.
(f)
All costs of the expert shall be borne by the unsuccessful party to the dispute or as otherwise
determined by the expert.
determined by the expert.
6.4
Restrictions on Conversion
(a)
The Borrower’s obligation to issue Shares on receipt of a Conversion Notice is subject to it
obtaining all authorisations required to enable it to lawfully issue the Shares to the Lender to
discharge its obligation to pay the Principal Outstanding (including, without limitation the
requirement to obtain shareholder approval) in accordance with the terms of this agreement.
obtaining all authorisations required to enable it to lawfully issue the Shares to the Lender to
discharge its obligation to pay the Principal Outstanding (including, without limitation the
requirement to obtain shareholder approval) in accordance with the terms of this agreement.
(b)
To the extent that any authorisation is required to lawfully issue the Shares, the Borrower must
at its own expense as soon as reasonably practicable (and in any event no later than 60 days
from the date of receipt of either a notice from the Lender requesting it to do so or receipt of a
Conversion Notice) take all necessary steps necessary to seek to obtain the required
authorisation and keep the Lender fully informed of the progress of obtaining such
authorisation (including obtaining the Lender’s comment on all documents produced for this
purpose).
at its own expense as soon as reasonably practicable (and in any event no later than 60 days
from the date of receipt of either a notice from the Lender requesting it to do so or receipt of a
Conversion Notice) take all necessary steps necessary to seek to obtain the required
authorisation and keep the Lender fully informed of the progress of obtaining such
authorisation (including obtaining the Lender’s comment on all documents produced for this
purpose).
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6.5
Shares to be issued on conversion
(a)
From the date of issue of the Shares, each Share issued by the Borrower to the Lender will
rank in all respects pari passu with the other then existing issued Shares and will be listed on
the Australian Stock Exchange.
rank in all respects pari passu with the other then existing issued Shares and will be listed on
the Australian Stock Exchange.
(b)
Within 5 Business Days of the issue of the Shares to the Lender, the Borrower will prepare and
issue all documents and do all things reasonably required to ensure that the Shares issued to
the Lender are freely transferable.
issue all documents and do all things reasonably required to ensure that the Shares issued to
the Lender are freely transferable.
7
Representations and warranties
7.1
Representations and warranties
The Borrower represents and warrants at the date of execution of this agreement and at the date of
issue of any Draw Down Request that:
issue of any Draw Down Request that:
(a)
authority: it has full power and authority to enter into and perform its obligations under this
agreement to which it is a party;
agreement to which it is a party;
(b)
authorisations: it has taken all necessary action to authorise the execution, delivery and
performance of this agreement to which it is a party in accordance with their terms;
performance of this agreement to which it is a party in accordance with their terms;
(c)
binding obligations: this agreement to which it is a party constitutes legal, valid and binding
obligations and, subject to any necessary stamping and registration, are enforceable in
accordance with their terms subject to laws generally affecting creditors’ rights and to principles
of equity;
obligations and, subject to any necessary stamping and registration, are enforceable in
accordance with their terms subject to laws generally affecting creditors’ rights and to principles
of equity;
(d)
transaction permitted: the execution, delivery and performance by it of this agreement to
which it is a party do not and will not violate, breach, or result in a contravention of:
which it is a party do not and will not violate, breach, or result in a contravention of:
(i)
any law, regulation or authorisation;
(ii)
its constitution or other constituent documents; or
(iii)
any Encumbrance or document which is binding upon it or on any of its assets,
and does not and will not result in:
(1)
the creation or imposition of any Encumbrance (other than the Permitted
Encumbrance) or restriction of any nature on any of its assets; or
Encumbrance) or restriction of any nature on any of its assets; or
(2)
the acceleration of the date of payment of any obligation existing under any
Encumbrance or document which is binding upon it or on any of its assets;
Encumbrance or document which is binding upon it or on any of its assets;
(e)
no default or breach:
(i)
it is not in breach (or where it is, such breach has been waived) in any material respect
under any agreement binding on it;
under any agreement binding on it;
(ii)
nothing has occurred which constitutes, or which, with the giving of notice, lapse of time,
satisfaction of some other condition, or any combination of the above, constitutes an
event which causes or enables:
satisfaction of some other condition, or any combination of the above, constitutes an
event which causes or enables:
(1)
the acceleration of any payment to be made under any agreement binding on it;
or
or
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(2)
the enforcement, termination or rescission of any agreement binding on it;
(f)
no Event of Default: no event has occurred which is or may constitute an Event of Default;
and
and
(g)
solvency: it is solvent and is able to pay its debts as and when they become due.
The Guarantor represents and warrants at the date of execution of this agreement that the matters in
clauses 7.1(a), 7.1(b), 7.1(c) and 7.1(d) are true and correct.
clauses 7.1(a), 7.1(b), 7.1(c) and 7.1(d) are true and correct.
7.2
Survival of representations and warranties
The representations and warranties in, or given under, this agreement including those outlined in
clause 7.1 of this agreement, survive this agreement.
clause 7.1 of this agreement, survive this agreement.
7.3
Reliance
The Borrower and Guarantor acknowledge that:
(a)
they have not entered into this agreement in reliance on any representation, warranty, promise
or statement of the Lender or of any person on behalf of the Lender; and
or statement of the Lender or of any person on behalf of the Lender; and
(b)
the Lender has entered into this agreement in reliance on the representations and warranties
in, or given under, this agreement including those outlined in clause 7.1 of this agreement.
in, or given under, this agreement including those outlined in clause 7.1 of this agreement.
7.4
Continuing obligation
If during the term of this agreement any event shall occur or matter shall arise which results or may
result in any of the representations and warranties being unfulfilled, untrue, misleading or incorrect in
any respect, the Borrower shall immediately notify the Lender in writing of all information relating to
such event. A notification under this clause does not affect or in any way limit the liability of the Lender
in respect of any breach of any of the representations and warranties contained in this Agreement.
result in any of the representations and warranties being unfulfilled, untrue, misleading or incorrect in
any respect, the Borrower shall immediately notify the Lender in writing of all information relating to
such event. A notification under this clause does not affect or in any way limit the liability of the Lender
in respect of any breach of any of the representations and warranties contained in this Agreement.
8
Undertakings by the Borrower
8.1
Provision of information and accounts
(a)
The Borrower must give to the Lender, by electronic means where possible:
(i)
monthly management accounts, audited annual accounts, annual budgets and business
plans, mine plans, trial balance sheets, notices of meetings of shareholders, minutes of
meetings of shareholders, board papers and minutes of meetings of directors for the
Borrower; and
plans, mine plans, trial balance sheets, notices of meetings of shareholders, minutes of
meetings of shareholders, board papers and minutes of meetings of directors for the
Borrower; and
(ii)
audited annual accounts of the Borrower,
from the date of execution of this agreement to the date until the date on which the
Principal Outstanding is repaid;
Principal Outstanding is repaid;
(b)
If the Lender so requests, the Borrower shall provide to the Lender any documents and
relevant information in respect of the Borrower’s operations, financial performance and position
from the date of execution of this agreement to the date until the date on which the Principal
Outstanding is repaid;
relevant information in respect of the Borrower’s operations, financial performance and position
from the date of execution of this agreement to the date until the date on which the Principal
Outstanding is repaid;
(c)
Upon reasonable notice by the Lender, the Lender shall have reasonable access to the
Borrower’s chief financial officer, auditors and senior management for the sole purpose of
discussing and investigating operational and financial aspects of the Borrower.
Borrower’s chief financial officer, auditors and senior management for the sole purpose of
discussing and investigating operational and financial aspects of the Borrower.
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8.2
Notices to the Lender
The Borrower must give notice to the Lender as soon as it becomes aware of any Event of Default
occurring.
occurring.
8.3
Negative pledge and disposal of assets
The Borrower must not and must ensure that its subsidiaries do not, without the prior written consent
of the Lender such consent not to be unreasonably withheld:
of the Lender such consent not to be unreasonably withheld:
(a)
deal with, sell or otherwise dispose of or part with possession of any of its assets other than in
the ordinary course of the Borrower’s business, in accordance with the Tuvatu Project Sale
Agreements or as otherwise approved by the Lender;
the ordinary course of the Borrower’s business, in accordance with the Tuvatu Project Sale
Agreements or as otherwise approved by the Lender;
(b)
create, permit, suffer to exist, or agree to, any interest or Encumbrance, other than the
Permitted Encumbrance or an Encumbrance in favour of the Lender over any of its assets;
Permitted Encumbrance or an Encumbrance in favour of the Lender over any of its assets;
(c)
issue, transfer or otherwise dispose of Shares;
(d)
borrow any funds from a third party or incur any other form of indebtedness (other than where
such indebtedness is incurred in the ordinary course of the Borrower’s business or as
otherwise approved by the Lender);
such indebtedness is incurred in the ordinary course of the Borrower’s business or as
otherwise approved by the Lender);
(e)
undertake any new activities or business opportunities such that there is a material change to
the nature and scope of the Borrowers business operations acquired from the Lender;
the nature and scope of the Borrowers business operations acquired from the Lender;
(f)
enter into any contract (including employment contract) or commitment for capital expenditure
or acquisition of assets requiring the Borrower to pay more than AUS $50,000 or an aggregate
amount of AUS $200,000 in any financial year (other than where such amounts are contained
in the mine plan in place as at the date of execution of this agreement);
or acquisition of assets requiring the Borrower to pay more than AUS $50,000 or an aggregate
amount of AUS $200,000 in any financial year (other than where such amounts are contained
in the mine plan in place as at the date of execution of this agreement);
(g)
change, modify or otherwise alter the terms of the Tuvatu Project Sale Agreements or the ANZ
Facility;
Facility;
(h)
change or otherwise deviate from the current mine plan;
(i)
undertake any corporate activities or enter into any contract or commitment which may have a
material effect on the financial position of the Borrower or impair the ability of the Borrower to
repay the Loan Facility or fulfil any of its obligations under this agreement, the Security
Documents or the Operational Support Agreement;
material effect on the financial position of the Borrower or impair the ability of the Borrower to
repay the Loan Facility or fulfil any of its obligations under this agreement, the Security
Documents or the Operational Support Agreement;
(j)
perform any act that breaches any contract to which it is a party to (including the Tuvatu Project
Sale Agreements) or any applicable law of a jurisdiction in which it carries on a business; or
Sale Agreements) or any applicable law of a jurisdiction in which it carries on a business; or
(k)
declare, appropriate or pay any dividend or make a distribution to all or any of the shareholders
of the Borrower.
of the Borrower.
8.4
Term of undertakings
The undertakings given by the Borrower in this clause 8 continue in full force and effect from the date
of execution of this agreement to the date until the date on which the Principal Outstanding is repaid in
full.
of execution of this agreement to the date until the date on which the Principal Outstanding is repaid in
full.
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9
Events of Default
9.1
Events of Default
It is an Event of Default if, whether or not it is within the control of the Borrower:
(a)
failure to obtain shareholder approval or change of the terms or withdrawal of the ASX
Waiver: the Borrower fails to obtain the approval required in clause 2.3 of this agreement to the
terms of the ASX Waiver are changed or the ASX Waiver is otherwise withdrawn;
Waiver: the Borrower fails to obtain the approval required in clause 2.3 of this agreement to the
terms of the ASX Waiver are changed or the ASX Waiver is otherwise withdrawn;
(b)
failure to execute the Security Documents: the Security Documents are not executed within
30 days of execution of this agreement or such longer period agreed to by the Lender or if, the
Lender’s opinion, the Borrower fails to perform or observe any obligation or undertaking in
clause 5;
30 days of execution of this agreement or such longer period agreed to by the Lender or if, the
Lender’s opinion, the Borrower fails to perform or observe any obligation or undertaking in
clause 5;
(c)
failure to pay: the Borrower fails to pay or repay any amount due under this agreement or the
Operational Support Agreement when due (other than in circumstances where there is
evidence that the failure is due to a technical or administrative error or failure in the banking
system wholly outside the control of the Borrower);
Operational Support Agreement when due (other than in circumstances where there is
evidence that the failure is due to a technical or administrative error or failure in the banking
system wholly outside the control of the Borrower);
(d)
breach of obligations: the Borrower fails to perform or observe any obligation or undertaking
under this agreement, the Security Documents or the Operational Support Agreement (other
than an obligation to make a payment that is due and payable or if shareholders do not
approve the proposal put to them as contemplated by clause 6.4(b)), and does not remedy the
failure within 5 Business Days, or a longer period determined by the Lender, after receipt by the
Borrower of a notice from the Lender specifying the failure;
under this agreement, the Security Documents or the Operational Support Agreement (other
than an obligation to make a payment that is due and payable or if shareholders do not
approve the proposal put to them as contemplated by clause 6.4(b)), and does not remedy the
failure within 5 Business Days, or a longer period determined by the Lender, after receipt by the
Borrower of a notice from the Lender specifying the failure;
(e)
misrepresentation: any warranty, representation or statement by the Borrower is or becomes
materially false, misleading or incorrect when made or regarded as made under this agreement
or under any document contemplated by this agreement;
materially false, misleading or incorrect when made or regarded as made under this agreement
or under any document contemplated by this agreement;
(f)
acceleration of payments: the Borrower does anything which constitutes an event, whatever
called, which causes or enables the enforcement, termination or rescission of, this agreement;
called, which causes or enables the enforcement, termination or rescission of, this agreement;
(g)
cross default: any present or future, or actual, prospective or contingent, indebtedness of the
Borrower in respect of any financial accommodation (including, without limitation, under the
ANZ Facility) including moneys payable under a Guarantee:
Borrower in respect of any financial accommodation (including, without limitation, under the
ANZ Facility) including moneys payable under a Guarantee:
(i)
is or becomes due and payable or is or becomes capable of being declared due and
payable before the due date for payment; or
payable before the due date for payment; or
(ii)
is not paid when due,
and remains due and payable for 5 Business Days after that amount first becomes due or
payable;
payable;
(h)
material adverse change: any event or series of events, whether related or not, occurs
(including a material adverse change in the business, assets or financial condition of the
Borrower or the value of its assets) which in the reasonable opinion of the Lender is likely to
have a material adverse effect on the Borrower or its assets;
(including a material adverse change in the business, assets or financial condition of the
Borrower or the value of its assets) which in the reasonable opinion of the Lender is likely to
have a material adverse effect on the Borrower or its assets;
(i)
Encumbrance: any Encumbrance is or becomes enforceable against any asset of the
Borrower;
Borrower;
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(j)
receiver: a receiver, receiver and manager, official manager, trustee, administrator, other
controller or similar official is appointed, or steps taken for such appointment, over any of the
assets or undertaking of the Borrower;
controller or similar official is appointed, or steps taken for such appointment, over any of the
assets or undertaking of the Borrower;
(k)
suspends payment: the Borrower suspends payment of its debts generally;
(l)
insolvency: the Borrower is or becomes unable to pay its debts when they are due or is or
becomes unable to pay its debts or is presumed to be insolvent or commits an act of
insolvency in terms of the Corporations Act;
becomes unable to pay its debts or is presumed to be insolvent or commits an act of
insolvency in terms of the Corporations Act;
(m)
arrangements: the Borrower enters into or resolves to enter into any arrangement,
composition or compromise with, or assignment for the benefit of, its creditors or any class of
them;
them;
(n)
administrator: an administrator is appointed or a resolution is passed or any steps are taken to
appoint, or to pass a resolution to appoint, an administrator to the Borrower;
appoint, or to pass a resolution to appoint, an administrator to the Borrower;
(o)
winding up: an application or order is made for the winding-up or dissolution of the Borrower
or a resolution is passed or any steps are taken to pass a resolution for the winding-up
otherwise than for the purpose of an amalgamation or reconstruction which has the prior written
consent of the Lender;
or a resolution is passed or any steps are taken to pass a resolution for the winding-up
otherwise than for the purpose of an amalgamation or reconstruction which has the prior written
consent of the Lender;
(p)
analogous events: anything analogous to the events described in clauses 9.1(j) to 9.1(o)
(inclusive) occurs in relation to any Related Body Corporate of the Borrower under the laws of
the jurisdiction of incorporation of that Related Body Corporate.
(inclusive) occurs in relation to any Related Body Corporate of the Borrower under the laws of
the jurisdiction of incorporation of that Related Body Corporate.
9.2
Effect of Event of Default
(a)
On or after the occurrence of an Event of Default, the Lender may by notice to the Borrower:
(i)
declare that the Principal Outstanding is immediately due and payable (save that where
the Event of Default arises due to a breach of clause 9.1(a), the notice must specify that
the amount and any amounts drawn down under the Facility prior to the service of a
Advance Suspension Notice (defined below) has and will become immediately owing
but are payable on a date no earlier than 270 days from the date of that initial Event of
Default. If such a notice is served on the Borrower, the Lender may, on no less than 60
days notice, suspend all future Advances (Advance Suspension Notice) until further
notice and, on expiration of that 60 day notice period, the Lender will not be obliged to
make any further Advances to the Borrower); and
the Event of Default arises due to a breach of clause 9.1(a), the notice must specify that
the amount and any amounts drawn down under the Facility prior to the service of a
Advance Suspension Notice (defined below) has and will become immediately owing
but are payable on a date no earlier than 270 days from the date of that initial Event of
Default. If such a notice is served on the Borrower, the Lender may, on no less than 60
days notice, suspend all future Advances (Advance Suspension Notice) until further
notice and, on expiration of that 60 day notice period, the Lender will not be obliged to
make any further Advances to the Borrower); and
(ii)
take any action or proceeding necessary or desirable in order to protect its ability to
recover the Principal Outstanding,
recover the Principal Outstanding,
or a combination of any of those things, provided that the Borrower is first afforded the period of
5 Business Days to remedy an Event of Default that relates to a failure to pay an amount owing
to the Lender or 10 Business Days to remedy any other Event of Default.
5 Business Days to remedy an Event of Default that relates to a failure to pay an amount owing
to the Lender or 10 Business Days to remedy any other Event of Default.
(b)
The Borrower must, following receipt of a notice under clause 9.2(a)(i), immediately repay in full
the Principal Outstanding to the Lender. Until such repayment is made, but strictly without
prejudice to the rights of the Lender arising on an Event of Default and/or to require immediate
repayment as aforesaid, interest shall accrue at the Interest Rate on both the Principal Sum as
well as all outstanding interest.
the Principal Outstanding to the Lender. Until such repayment is made, but strictly without
prejudice to the rights of the Lender arising on an Event of Default and/or to require immediate
repayment as aforesaid, interest shall accrue at the Interest Rate on both the Principal Sum as
well as all outstanding interest.
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10 Tax, fees, costs and expenses
10.1
Tax
The Borrower must pay any Tax payable in relation to this agreement (other than any income tax
payable by the Borrower or unless expressly stated otherwise).
payable by the Borrower or unless expressly stated otherwise).
10.2
Costs and expenses
(a)
Subject to clause 10.1, each party must pay its own costs and expenses in respect of the
negotiation, preparation, execution and delivery of this agreement.
negotiation, preparation, execution and delivery of this agreement.
(b)
Any action to be taken by the Borrower or Lender in performing its obligations under this
agreement must be taken at its own cost and expense unless otherwise provided in this
agreement.
agreement must be taken at its own cost and expense unless otherwise provided in this
agreement.
11 Indemnity
11.1
General indemnity
(a)
The Borrower indemnifies the Lender against any claim, action, damage, loss, liability, cost,
charge, expense, outgoing or payment which the Lender pays, suffers, incurs or is liable for, in
respect of any of the following:
charge, expense, outgoing or payment which the Lender pays, suffers, incurs or is liable for, in
respect of any of the following:
(i)
the occurrence of any Event of Default; or
(ii)
the Lender exercising its powers consequent upon or arising out of the occurrence of
any Event of Default.
any Event of Default.
(b)
Any amount payable to the Lender under this indemnity is payable on demand.
11.2
Continuing indemnities and evidence of loss
(a)
Each indemnity of the Borrower contained in this agreement is a continuing obligation of the
Borrower despite:
Borrower despite:
(i)
a settlement of account; or
(ii)
the occurrence of any thing,
and remains in full force and effect until:
(iii)
all monies owing, contingently or otherwise, under this agreement have been paid in full;
and
and
(iv)
the Loan Facility and interest payable is finally and fully repaid.;
(b)
Each indemnity of the Borrower contained in this agreement is an additional, separate and
independent obligation of the Borrower and no one indemnity limits the generality of another
indemnity.
independent obligation of the Borrower and no one indemnity limits the generality of another
indemnity.
(c)
Each indemnity of the Borrower contained in this agreement survives the termination of this
agreement.
agreement.
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(d)
A certificate signed by a director or authorised representative of the Lender detailing the
amount of damage, loss, liability, cost, expense or payment covered by any indemnity in this
agreement is conclusive evidence of the matter certified unless proved wrong.
amount of damage, loss, liability, cost, expense or payment covered by any indemnity in this
agreement is conclusive evidence of the matter certified unless proved wrong.
11.3
Foreign currency indemnity
If at any time:
(a)
the Lender receives or recovers any amount payable by the Borrower for any reason including,
but not limited to:
but not limited to:
(i)
any judgment or order of any governmental agency;
(ii)
any breach of this agreement;
(iii)
the liquidation or bankruptcy of the Borrower or any proof or claim in that liquidation or
bankruptcy; or
bankruptcy; or
(iv)
any other thing into which the obligations of the Borrower may have become merged;
and
and
(b)
the currency in which any payment is made is not United States Dollars,
the Borrower indemnifies the Lender against any shortfall between the amount payable in United
States Dollars and the amount actually received or recovered by the Lender.
States Dollars and the amount actually received or recovered by the Lender.
12
Assignment
The Borrower may not transfer or assign any of its rights or obligations under this agreement without the prior
written consent of the Lender.
written consent of the Lender.
13
General
13.1
Confidential information
(a)
Subject to clause 13.1(b), the parties must not make any announcement or otherwise disclose
the provisions of or any matters relating to this agreement unless the other party to this
agreement has consented in writing to the terms and circumstances of the announcement or
disclosure.
the provisions of or any matters relating to this agreement unless the other party to this
agreement has consented in writing to the terms and circumstances of the announcement or
disclosure.
(b)
Each party shall keep all information provided to the other under this agreement confidential.
(c)
A party may disclose anything in this agreement as required by:
(i)
applicable law; or
(ii)
any recognised stock exchange on which its shares are listed,
but to the extent possible, it must consult with the other party before making the disclosure and
use its best endeavours to agree on the form and content of the disclosure.
use its best endeavours to agree on the form and content of the disclosure.
13.2
Performance by Lender of obligations
If the Borrower defaults in fully and punctually performing any obligation contained or implied in this
agreement, the Lender may, without prejudice to any power that it may have under this agreement or
any other document, do all things necessary or desirable, in the opinion of the Lender, to make good
agreement, the Lender may, without prejudice to any power that it may have under this agreement or
any other document, do all things necessary or desirable, in the opinion of the Lender, to make good
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or attempt to make good that default to the satisfaction of the Lender.
13.3
Notices
(a)
Any notice or other communication including any request, demand, consent or approval, to or
by a party to this agreement:
by a party to this agreement:
(i)
must be in legible writing and in English addressed as follows:
(1)
if to the Lender:
Address: 00 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxx, Xxxxxxxx xx Xxxxx Xxxxxx
Attention: Company Secretary
Facsimile: (00) 00 000 0000
(2)
if to the Borrower:
Address: Suite 303, 3rd Floor, 00 Xxxxxxxx Xxxxxx, Xxxxxx, XXX, Xxxxxxxxx, 0000
Attention: Company Secretary
Facsimile: x00 0 0000 0000
(3)
if to the Guarantor:
Address: Vatukoula, Fiji
Attention: General Manager
Facsimile: x000 000 0000
or as otherwise specified by a party by notice in writing to the other party;
(ii)
must be signed or in the case of a facsimile, appear to have been signed, by an
authorised representative of the sender;
authorised representative of the sender;
(iii)
is regarded as given and received:
(1)
if by delivery by hand, when delivered to the addressee;
(2)
if sent by post, 10 Business Days from and including the date of postage; or
(3)
if sent by facsimile transmission, when the transmission is successfully
transmitted as reported by the sender’s machine
transmitted as reported by the sender’s machine
(4)
if sent by email, when the message is successfully sent as reported by the
sender’s machine,
sender’s machine,
but if the delivery or receipt is on a day which is not a Business Day or is after
4.00pm (addressee’s time) it is regarded as received at 9.00am (addressee’s
time) on the following Business Day; and
4.00pm (addressee’s time) it is regarded as received at 9.00am (addressee’s
time) on the following Business Day; and
(iv)
can be relied on by the addressee and the addressee is not liable to any other person
for any consequences of that reliance if the addressee believes it to be genuine, correct
and authorised by the sender.
for any consequences of that reliance if the addressee believes it to be genuine, correct
and authorised by the sender.
(b)
A facsimile transmission is not regarded as successfully transmitted if the addressee
telephones the sender within 4 hours after the transmission is received or regarded as received
under clause 13.3(a)(iii) and informs the sender that it is not legible or is incomplete.
telephones the sender within 4 hours after the transmission is received or regarded as received
under clause 13.3(a)(iii) and informs the sender that it is not legible or is incomplete.
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(c)
Unless requested by the Lender or specified otherwise in this agreement, a notice or
communication under this agreement may not be given by email.
communication under this agreement may not be given by email.
(d)
In this clause 13.3, a reference to an addressee includes a reference to an addressee’s
directors, secretary, agents or employees and any person reasonably believed by the sender to
be a director, secretary, agent or employee of the addressee.
directors, secretary, agents or employees and any person reasonably believed by the sender to
be a director, secretary, agent or employee of the addressee.
13.4
Governing law and jurisdiction
(a)
This agreement is governed by the laws of New South Wales.
(b)
The Borrower irrevocably and unconditionally:
(i)
submits to the non-exclusive jurisdiction of the courts of New South Wales; and
(ii)
waives any objection to the venue of any legal process on the basis that the process
has been brought in an inconvenient forum.
has been brought in an inconvenient forum.
13.5
Prohibition and enforceability
(a)
Any provision of, or a right or remedy arising under, this agreement which are prohibited or
unenforceable in any jurisdiction is ineffective in that jurisdiction only to the extent of that
prohibition or unenforceability.
unenforceable in any jurisdiction is ineffective in that jurisdiction only to the extent of that
prohibition or unenforceability.
(b)
If any provision of this agreement is void, illegal or unenforceable in any jurisdiction, it does not
affect the validity, legality or enforceability of that provision in any other jurisdiction or of the
remaining provisions in that or any other jurisdiction.
affect the validity, legality or enforceability of that provision in any other jurisdiction or of the
remaining provisions in that or any other jurisdiction.
(c)
This clause 13.5 is not limited by any other provision of this agreement in relation to
severability, prohibition or enforceability.
severability, prohibition or enforceability.
13.6
Waivers
(a)
Waiver of any right arising from a breach of this agreement or of any power arising upon default
under this agreement or upon the occurrence of an Event of Default must be in writing and
signed by the party granting the waiver.
under this agreement or upon the occurrence of an Event of Default must be in writing and
signed by the party granting the waiver.
(b)
A failure or delay in exercise, or partial exercise, of:
(i)
a right arising from a breach of this agreement or the occurrence of an Event of Default;
or
or
(ii)
a power created or arising upon default under this agreement or upon the occurrence of
an Event of Default,
an Event of Default,
does not result in a waiver of that right or power.
(c)
A party is not entitled to rely on a delay in the exercise or non-exercise of a right or power
arising from a breach of this agreement or on a default under this agreement or on the
occurrence of an Event of Default as constituting a waiver of that right or power.
arising from a breach of this agreement or on a default under this agreement or on the
occurrence of an Event of Default as constituting a waiver of that right or power.
(d)
A party may not rely on any conduct of another party as a defence to exercise of a right or
Power by that other party.
Power by that other party.
(e)
This clause may not itself be waived except by writing.
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13.7
Variation
A variation of any term of this agreement must be in writing and signed by both the parties.
13.8
Cumulative rights
The powers are cumulative and do not exclude any other right, power, authority, discretion or remedy
of the Lender.
of the Lender.
13.9
Certificates of Lender
(a)
A certificate signed by a director or authorised representative of the Lender detailing the
amount of the Principal Outstanding due and payable under this agreement whether currently
due and payable or not is sufficient evidence unless the contrary is proved.
amount of the Principal Outstanding due and payable under this agreement whether currently
due and payable or not is sufficient evidence unless the contrary is proved.
(b)
A certificate under the hand of a director or authorised representative of the Lender stating the
opinion of the Lender as to any thing is sufficient evidence of that opinion at the date stated on
the certificate or failing that as at the date of that certificate unless the contrary is proved.
opinion of the Lender as to any thing is sufficient evidence of that opinion at the date stated on
the certificate or failing that as at the date of that certificate unless the contrary is proved.
13.10
Further assurances
Each party must do all things reasonably necessary to give full effect to this agreement and the
transactions contemplated by this agreement.
transactions contemplated by this agreement.
13.11
Entire agreement
This agreement and any agreements referred to in it the entire agreement between the Lender and the
Borrower with respect to the subject matter of this agreement and supersedes any prior negotiation,
arrangement, understanding or agreement with respect to the subject matter of any term of this
agreement.
Borrower with respect to the subject matter of this agreement and supersedes any prior negotiation,
arrangement, understanding or agreement with respect to the subject matter of any term of this
agreement.
13.12
Third party rights
No person other than the Lender or Borrower has or is intended to have any right, power or remedy or
derives or is intended to derive any benefit under this agreement.
derives or is intended to derive any benefit under this agreement.
13.13
Counterparts
This agreement may be signed in any number of counterparts and all those counterparts taken
together make one instrument.
together make one instrument.
13.14
Attorneys
Each of the attorneys executing this agreement states that the attorney has no notice of the revocation
of the power of attorney appointing that attorney.
of the power of attorney appointing that attorney.
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Schedule 1 – Draw down request
[Date]
DRD (Isle of Man) limited
Xxxxxxxxx Xxxxx
Xxxxxxxxx Xxxxx
00/00 Xxxxx Xxxxxx,
Xxxxxxx, Xxxx xx Xxx
(Lender)
(Lender)
Attention:
[name]
Draw Down Request
In accordance with clause 3.2 of the convertible term loan facility (Loan Facility) between DRD (Isle of Man) Limited
and Emperor Mines Limited (Emperor), Emperor hereby makes the following draw down request:
and Emperor Mines Limited (Emperor), Emperor hereby makes the following draw down request:
Amount of Advance
Intended Use of Funds
Supporting Information*
AUS$ [insert amount]
[insert intended use]
[describe support information provided
e.g. quote for machinery number 3094
attached or invoice number 2340
attached]
e.g. quote for machinery number 3094
attached or invoice number 2340
attached]
AUS$ [insert amount]
[insert intended use]
Total Advance requested:
AUS$ [insert amount]
* Any request in excess of [AUS$10,000] must be supported by written evidence of the intended use of those funds.
Pre-conditions to draw down
Emperor hereby confirms that at the date of this draw down request, having made all necessary enquiries, it satisfies
the following conditions:
the following conditions:
1.
the representations and warranties set out in clause 7 of the Loan Facility remain true and accurate in all
respects and not misleading in any respect;
respects and not misleading in any respect;
2.
represents and warrants that the amounts requested in this draw down request will only be used by the
Borrower for the purposes as specified in this draw down request and the accompanying supporting
information; and
Borrower for the purposes as specified in this draw down request and the accompanying supporting
information; and
3.
confirms that it is not is breach of any provision of the Loan Facility.
Capitalised terms used in this notice have the same meaning as in the Loan Facility.
Signed by an Authorised Signatory
Signed by an Authorised Signatory
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Schedule 2 – Conversion Notice
[Date]
To: The Directors
Emperor Mines Limited
Suite 303,
3rd Floor , 00 Xxxxxxxx Xxxxxx,
Xxxxxx, XXX, Xxxxxxxxx, 0000
Attention:
[name]
By Facsimile:
[fax]
Conversion Notice
Notice is given by DRD (Isle of Man) Limited of the conversion of AUS$[insert number] of Principal Outstanding into
Shares in accordance with clause 6 of the convertible term loan facility between DRD (Isle of Man) Limited and
Emperor Mines Limited (Loan Facility).
Emperor Mines Limited (Loan Facility).
Capitalised terms used in this notice have the same meaning as in the Loan Facility.
Signed by
DRD (Isle of Man) Limited
by:
DRD (Isle of Man) Limited
by:
______________________________________
_______________________________________
Director
Director/Secretary
______________________________________
_______________________________________
Name (please print)
Name (please print)
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Schedule 3 – Maximum Monthly Draw Down Amounts
Month
Maximum Draw Down (expressed in AUS$)
July 2005
$2,800,000
August 2005
$2,000,000
September 2005
$1,000,000
October 2005
$2,000,000
November 2005
$500,000
December 2005
$1,700,000
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Executed as an agreement:
Signed by DRD (Isle of Xxxx) Limited
by or in the presence of:
by or in the presence of:
/s/ M Wellesley-Xxxx
Xxxx Wellelsley-Wood
Signature of authorised representative
Xxxx Wellelsley-Wood
Signature of authorised representative
Signature of witness
______________________________________
_______________________________________
Name of authorised representative in full
Name of witness in full
Signed by
Emperor Gold Mining Limited
by:
Emperor Gold Mining Limited
by:
/s/ TS Xxxx O’Xxxxxx
Xxxxxxxx Xxxx X’ Xxxxxx _________________
Xxxxxxxx Xxxx X’ Xxxxxx _________________
_______________________________________
Director/Secretary
______________________________________
_______________________________________
Name (please print)
Name (please print)
Emperor Mines Limited
by:
/s/ XX Xxxx
Director
Director
Director/Secretary
______________________________________
_______________________________________
Name (please print)
Name (please print)
