EXECUTION COPY
Dated 6 September, 2004
RANDGOLD RESOURCES LIMITED
as the Guarantor
and
N M ROTHSCHILD & SONS LIMITED
as the Security Trustee
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DEED OF GUARANTEE AND INDEMNITY
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[XXXXX XXXXX XXXX & MAW LOGO]
LONDON
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS AND INTERPRETATION..................................... 1
2. GUARANTEE.......................................................... 5
3. CONTINUING SECURITY................................................ 5
4. INVALIDITY......................................................... 7
5. RELEASES CONDITIONAL............................................... 7
6. UNDERTAKINGS OF THE GUARANTOR...................................... 8
7. COSTS AND EXPENSES................................................. 12
8. PAYMENTS; NO DEDUCTIONS............................................ 13
9. SEVERABILITY....................................................... 13
10. AMENDMENTS, WAIVERS AND RIGHTS..................................... 13
11. ASSIGNMENT......................................................... 14
12. LAW AND JURISDICTION............................................... 14
13. AGENT FOR SERVICE OF PROCESS....................................... 14
14. THIRD PARTY RIGHTS................................................. 15
THIS DEED OF GUARANTEE AND INDEMNITY (this "DEED"), dated 6 September, 2004
between:
(1) RANDGOLD RESOURCES LIMITED, a company incorporated under the laws of Jersey
(the "GUARANTOR"); and
(2) N M ROTHSCHILD & SONS LIMITED, a bank incorporated under the laws of
England, in its capacity as security trustee for the Lender Parties (in
such capacity, the "SECURITY TRUSTEE").
WHEREAS:
(A) Pursuant to the U.S.$60,000,000 project term loan facility agreement, dated
6 September, 2004, (as amended, modified or supplemented from time to time,
the "LOAN AGREEMENT"), among:
(1) Societe des Mines de Loulo S.A., as the Borrower;
(2) Randgold Resources Limited and Randgold Resources (Somilo) Limited, as
the Guarantors;
(3) various banks and other financial institutions, as the Lenders;
(4) N M Rothschild & Sons Limited and Societe Generale, as the Mandated
Lead Arrangers;
(5) Absa Bank Limited (acting through its Absa Corporate and Merchant Bank
Division) and Bayerische Hypo- und Vereinsbank AG, as the Lead
Arrangers; and
(6) N M Rothschild & Sons Limited, as the Facility Agent for the Lenders,
the Lenders have extended Commitments to make Loans to the Borrower on the
terms and conditions set forth therein;
(B) Pursuant to Clause 6.1.3 of the Loan Agreement, it is a condition precedent
to the making of the initial Loans under the Loan Agreement that the
Guarantor executes and delivers this Deed as security for the payment and
discharge of the Obligations; and
(C) The Guarantor has determined that the execution, delivery and performance
of this Deed is within its corporate powers and in its best interests, and
has been duly authorised.
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, and in order to induce the Lenders to make the
initial Loans to the Borrower pursuant to the Loan Agreement and to enter into
the transactions contemplated thereby, the Guarantor agrees with the Security
Trustee as follows:
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1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
The following terms (whether or not underscored) when used in this Deed,
including its preamble and recitals, shall have the following meanings:
"AGREED PROJECT STANDARDS" means the development of the Loulo Project and
the construction of the Mine in accordance with the standards, agreements,
timing and all other criteria referred to in the Operative Documents and
the Development Plan.
"CHARGED PROPERTY" means any property or asset of the Guarantor which is or
is intended to be the subject of a lien in favour of the Security Trustee
or any other Lender Party.
"CONSOLIDATED EBITDA" means, for any period, the consolidated profit on
ordinary activities of the Guarantor and its subsidiaries (together with,
and without duplication, the Guarantor's proportionate share (based on the
Guarantor's direct or indirect ownership interest in the share capital of
the relevant Group Member) of the consolidated profit on ordinary
activities of any other Group Member which is not a subsidiary of the
Guarantor), in each case for such period:
(a) before any deduction for or on account of corporation tax or other
taxes on income or gains;
(b) before any deduction for Consolidated Interest Expense;
(c) after deducting (to the extent included) Consolidated Interest
Receivable;
(d) excluding extraordinary or exceptional items;
(e) after deducting (to the extent otherwise included) any gain over book
value arising in favour of a Group Member on the disposal of any
business or asset (not being any disposals made in the ordinary course
of trading) during such period and any gain arising on any revaluation
of any business or asset during such period;
(f) after adding back (to the extent otherwise deducted) any loss against
book value incurred by a Group Member on the disposal of any business
or asset (not being any disposals made in the ordinary course of
trading) during such period;
(g) after adding back depreciation of fixed assets and amortisation of
goodwill or intangible assets during that period, to the extent
deducted; and
(h) after adding back (to the extent otherwise deducted) the amount of
Capital Expenditures and other expenditures in respect of exploration
activities.
"CONSOLIDATED INTEREST COVER RATIO" means, for any period, the ratio of:
(a) Consolidated EBITDA for such period.
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to
(b) Consolidated Interest Expense for such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the amount in
Dollars which will be necessary in order to pay in full all interest,
premium and similar amounts (howsoever characterised and including (a) the
interest element of finance leases, (b) discount and acceptance fees
payable (or deducted), (c) fees payable in connection with the issue or
maintenance of any bond or letter of credit, guarantee or other insurance
against financial indebtedness and issued by a third party on behalf of the
Guarantor or any of its subsidiaries, (d) repayment and prepayment premiums
payable or incurred in repaying or prepaying any financial indebtedness,
and (e) commitment, utilisation and non-utilisation fees payable or
incurred in respect of financial indebtedness) accruing in respect of, the
Loan Agreement and all other financial indebtedness of the Guarantor and
its subsidiaries (and on all other financial indebtedness (but without
duplication) constituting the Guarantor's proportionate share (based on the
Guarantor's direct or indirect ownership interest in the share capital of
the relevant Group Member) of such indebtedness of any other Group Member
which is not a subsidiary of the Guarantor) which, in each case, have
become due and payable during such period.
"CONSOLIDATED INTEREST RECEIVABLE" means, for any period, the amount of
interest (which for this purpose shall include all payments of the type
described in the definition of Consolidated Interest Expense) accrued due
to the Guarantor and its subsidiaries (together with (but without
duplication) the Guarantor's proportionate share (based on the Guarantor's
direct or indirect ownership interest in the share capital of the relevant
Group Member) of the amount of such interest accrued due to any other Group
Member which is not a subsidiary of the Guarantor) (in each case, other
than such interest accruing from other Group Members) during such period
whether or not paid.
"CONSOLIDATED NET WORTH" means, at any time, the aggregate of the amounts
paid up or credited as paid up on the issued share capital of the Guarantor
(other than any redeemable shares) and the aggregate amount of the reserves
of the Group including:
(a) share premiums;
(b) capital reserves and non-distributable reserves; and
(c) retained earnings.
"DEED" is defined in the preamble.
"DEMAND" is defined in Clause 2.1.
"GUARANTEED LIABILITIES" is defined in Clause 2.2.
"GUARANTOR" is defined in the preamble.
"INTEREST RATE" means the rate set forth in Clause 3.2.2 of the Loan
Agreement.
"LOAN AGREEMENT" is defined in the first recital.
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"SECURITY TRUSTEE" is defined in the preamble.
1.2 WORDS AND EXPRESSIONS NOT DEFINED
Words and expressions used in this Deed but not defined herein shall have
the meanings given to them in the Loan Agreement.
1.3 CONTENTS AND HEADINGS
The contents page and headings are included for convenience only and shall
not affect the interpretation or construction of this Deed.
1.4 ADDITIONAL DEFINITIONS AND INTERPRETATION
Clauses 1.2 (Additional Definitions) and 1.3 (Interpretation) of the Loan
Agreement are hereby incorporated by reference as if set out in their
entirety herein, with references in such Clauses to "this Agreement" being
deemed to be references to "this Deed".
1.5 CASH COVER
In this Deed, unless the context requires otherwise, any reference to the
provision of cash cover is to the provision by the Guarantor to the
Security Trustee of an amount in cash equal to the Security Trustee's
reasonable estimate (based on information supplied by the relevant Lender
Party) of the maximum possible aggregate amount which the Borrower may at
any time become liable to pay to the Lender Parties in respect of the
relevant contingent liabilities (including, in the case of any contingent
liability outstanding to any Lender Party at any time in connection with a
Production Related Risk Management Agreement, the marked to market value of
such Lender Party's contingent exposure in connection with such Production
Related Risk Management Agreement at such time). For the avoidance of
doubt, the rights of the Security Trustee to demand cash cover in respect
of any Production Related Risk Management Agreement pursuant to Clause 2.1
does not constitute a separate and independent right to make margin calls
on the Guarantor in respect of the Borrower's obligations under such
agreements but is limited to cash cover in respect of the Borrower's
obligations thereunder.
1.6 EFFECT AS DEED
The parties hereto intend that this Deed take effect as a deed.
2. GUARANTEE
2.1 IRREVOCABLE AND UNCONDITIONAL GUARANTEE
In consideration of the Security Trustee and the Lender Parties entering
into the Loan Agreement and the other Loan Documents, the Guarantor
irrevocably and unconditionally guarantees on the Security Trustee's
written demand (a "DEMAND") to pay or discharge as and when the same become
due and payable, or (in the case of contingent liabilities (including any
contingent liability in connection with Production Related Risk Management
Agreements) at any time when a Default has occurred and is continuing)
provide cash cover in an amount satisfactory to the Security Trustee
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for, the Guaranteed Liabilities or, as the case may be, such part of them
as is specified in the Demand.
2.2 GUARANTEED LIABILITIES
In this Deed, the "GUARANTEED LIABILITIES" means all moneys or liabilities
due or owing by the Borrower under the Loan Documents (including (a) all
such moneys or liabilities due, owing or incurred in any currency, alone or
jointly with others and whether as principal or surety, and (b) all such
moneys or liabilities originally owing or incurred to the Lender Parties
and those purchased or otherwise acquired by the Lender Parties), together
in each case with interest, commission and bank fees and charges applicable
thereto. Such interest shall be calculated to the date of payment (as well
after as before any Demand or judgment) at the Interest Rate and to be
compounded at such intervals as the Security Trustee shall determine,
acting reasonably.
2.3 LIQUIDATION OF THE BORROWER
In the event of the liquidation of the Borrower and notwithstanding such
liquidation, the guarantee set forth in this Clause 2 shall extend to cover
all Guaranteed Liabilities which would have been owing to the Lender
Parties by the Borrower if such liquidation had commenced when the Security
Trustee received actual notice of it.
2.4 STATEMENT OF ACCOUNT OF BORROWER
Any statement of account of the Borrower, signed as correct by the Security
Trustee, shall, absent manifest error, be prima facie evidence as against
the Guarantor of the amount of the Guaranteed Liabilities.
3. CONTINUING SECURITY
3.1 GUARANTEE AS CONTINUING SECURITY
This Deed is a continuing security and shall secure the ultimate balance of
the Guaranteed Liabilities notwithstanding any intermediate payment or
discharge of all or part of the Guaranteed Liabilities to the Security
Trustee or the Lender Parties and also notwithstanding the liquidation,
dissolution, winding-up, administration, receivership, amalgamation,
reconstruction or other incapacity of the Borrower, any change in the
constitution, name or style of the Borrower, or any other event, matter or
thing; PROVIDED, HOWEVER, that on and from the RRL Guarantee Release Date
the recourse of the Lender Parties to the Guarantor in connection with the
Guarantor's obligations pursuant to Clause 2.1 (but not, for the avoidance
of doubt, in connection with any other obligation (including any obligation
pursuant to the Management Contract)) shall be limited to the Charged
Property (including any proceeds thereof); and, provided further, however
that, in the event the Guaranteed Liabilities under the Loan Agreement are
prepaid in full and no further Commitment shall be outstanding thereunder
the Guarantor's obligations hereunder in respect of the Guaranteed
Liabilities under any Production Related Risk Management Agreement shall
continue in full force and effect until such time as the Security Trustee
shall be reasonably satisfied that the Loulo Project shall have been built
and is capable of operation, in each case in a manner which is consistent
with the tests, procedures, standards and
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projections set forth in the Mechanical Completion Certificate and the
Economic Completion Certificate.
3.2 GUARANTEE ADDITIONAL TO ANY OTHER RIGHTS
This Deed is in addition to (and shall not merge with, otherwise prejudice
or affect or be prejudiced or affected by) any other right, remedy,
guarantee, indemnity or lien which may be or have been created in favour of
the Security Trustee or any Lender Party in respect of the Guaranteed
Liabilities. Accordingly, this Deed may be enforced notwithstanding the
existence or invalidity of all or any of the same and also notwithstanding
the Security Trustee at any time exchanging, releasing, varying, abstaining
from perfecting or enforcing or otherwise dealing or omitting to deal with
all or any of the same.
3.3 ENFORCEMENT
The Security Trustee shall not be obliged to make any claim or demand on
the Borrower or to resort to any xxxx, note, right, remedy, guarantee,
indemnity or lien or other means of payment from time to time held by or
available to it before enforcing this Deed nor shall the Security Trustee
be obliged to account for any money or other property received or recovered
in consequence of any enforcement or realisation of any of the same.
3.4 LIABILITY
The liability of the Guarantor under this Deed shall not be discharged,
reduced, impaired or affected by:
(a) any present or future xxxx of exchange, note, right, remedy,
guarantee, indemnity or lien held by or available to the Security
Trustee or any Lender Party, being or becoming wholly or in part void,
voidable or unenforceable on any ground whatsoever or by the Security
Trustee or any such Lender Party from time to time exchanging,
releasing, varying, abstaining from perfecting or enforcing or
otherwise dealing or omitting to deal with all or any of the same;
(b) the Security Trustee compounding with, discharging, releasing or
varying the liability of or granting any time, indulgence or
concession to the Borrower or any other person or renewing,
determining, varying or increasing any xxxx, promissory note or other
negotiable instrument, accommodation, facility or transaction in any
manner whatsoever or concurring in, accepting or varying any
compromise, arrangement or settlement or omitting to claim or enforce
payment from the Borrower or any other person;
(c) any act or omission which would not have discharged, impaired or
affected the liability of the Guarantor had it been primary obligor
instead of guarantor or by anything done or omitted which but for this
provision might operate to discharge, reduce, impair or affect that
liability; or
(d) any termination, amendment, variation, novation of, or supplement to,
any of the Loan Documents to which any Obligor is a party.
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3.5 SUSPENSE ACCOUNT
If the Borrower or the Guarantor is wound up, goes into liquidation,
becomes bankrupt or makes any composition or arrangement with its
creditors, neither the existence of the guarantee or indemnity contained in
this Deed, the rights of any Lender Party pursuant to Clause 6 hereof, nor
any monies received or recovered by any Lender Party, shall impair the
right of such Lender Party to prove in such winding up, liquidation,
bankruptcy, composition or arrangement for the total amount due from the
Borrower or the Guarantor and, to this end or so as to preserve intact the
obligations of any person answerable for any part of such total amount, any
Lender Party may at any time and after any such event takes place and, for
so long as such Lender Party thinks fit prior to satisfaction in full of
the Guarantor's obligations under this Deed, keep any monies received or
recovered under this Deed in a separate or suspense account, in such name
as such Lender Party thinks fit, without any intermediate obligation on the
part of such Lender Party to apply the same in or towards discharge of any
part of such total amount.
4. INVALIDITY
If anything (including any irregular exercise or absence of any corporate
power or lack of authority of, or breach of duty by, any person purporting
to act on behalf of the Borrower, legal or other limitation, disability,
incapacity or change in constitution of the Borrower) causes any purported
obligation or liability of the Borrower which would have been the subject
of this Deed had such obligation or liability been valid and enforceable to
be or become invalid or unenforceable against the Borrower on any ground
whatsoever whether or not known to the Security Trustee or any Lender
Party, then the Guarantor shall nevertheless be liable to the Security
Trustee and any such Lender Party in respect of that purported obligation
or liability as if it were the primary obligation or liability of the
Guarantor. The Guarantor shall indemnify, subject to applicable law, and
keep indemnified the Security Trustee and the other Lender Parties on
demand against any losses, liabilities, costs and expenses resulting from
the failure of the Borrower to observe any such purported obligation or
liability, save and except for any such losses, liabilities, costs and
expenses arising from the gross negligence or wilful misconduct of the
Security Trustee.
5. RELEASES CONDITIONAL
5.1 RELEASES MADE BY THE SECURITY TRUSTEE
Any release, settlement, discharge, re-assignment or arrangement (in this
Clause 5 a "RELEASE") given or made by the Security Trustee on the faith of
any assurance, security or payment shall be conditional upon that
assurance, security or payment not being avoided, reduced or ordered to be
repaid under any enactment relating to liquidation, bankruptcy or
insolvency of the Borrower or any other person. If such avoidance or
reduction occurs or such order is made, the release given by the Security
Trustee shall not prejudice the right of the Security Trustee to enforce
this guarantee in respect of the Guaranteed Liabilities and as between the
Guarantor and the Security Trustee this Deed (notwithstanding the release)
shall be deemed to have remained at all times held by the Security Trustee
as a guarantee for the Guaranteed Liabilities as if such release had not
been made.
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5.2 RETENTION OF DEED
The Security Trustee may in its absolute discretion retain all or part of
this Deed as a guarantee for the Guaranteed Liabilities for a period of 12
months after the Guaranteed Liabilities shall have been paid and discharged
in full. If at any time within that period of 12 months a petition is
presented to a competent court for a winding-up or administration order to
be made in respect of the Borrower or steps are taken to wind up the
Borrower voluntarily, then the Security Trustee may continue to retain all
or part of this Deed for such further period as the Security Trustee in its
absolute discretion shall determine.
6. UNDERTAKINGS OF THE GUARANTOR
6.1 COMPLETION UNDERTAKING
(a) COMPLETION
The Guarantor hereby irrevocably and unconditionally undertakes (as
primary obligor) to the Security Trustee to procure that Mechanical
Completion and Economic Completion take place in accordance with the
Agreed Project Standards (including, without limitation of the
Guarantor's undertaking contained in clause (b), to cause the Borrower
to perform and comply with its obligations contained in Clause 10.6 of
the Loan Agreement) and that the Mechanical Completion Date occur in
any event no later than 30 June, 2006 and that the Economic Completion
Date occurs in any event no later than 31 December, 2007.
(b) SPECIFIC UNDERTAKINGS
In fulfilling its obligations hereunder, and without limiting any of
its other obligations under this Deed, the Guarantor hereby
irrevocably and unconditionally undertakes to the Security Trustee and
agrees, at all times up to and including the Group Members
Undertakings Release Date, to perform and comply with (as if it were
named as the relevant obliged party therein), and to procure that the
Borrower performs and complies with, all of the obligations of the
Borrower contained in Clauses 10.6, 10.9, 10.10, 10.11, 10.14, 10.16,
10.17 and 10.18 of the Loan Agreement . The words "PERFORM AND COMPLY
WITH", shall include:
(i) the completion of the Loulo Project within the time limits and in
the manner referred to in the Agreed Project Standards;
(ii) the payment of all costs and expenses relating thereto;
(iii) the payment, satisfaction or discharge of all liens, charges and
claims that are or may be imposed upon or asserted against the
Mine; and
(iv) the defence and indemnification of the Lender Parties against all
such liens, charges and claims, whether arising from the
furnishing of labour, materials, supplies or equipment, from
taxes, assessments, fees
8
or other charges, from injuries or damage to persons or property,
or otherwise.
(c) NATURE OF OBLIGATIONS
Without limiting the generality of the foregoing provisions of this
Clause 6, the Guarantor agrees, in relation to the performance of its
obligations under this Deed, to ensure that the costs of constructing
the Mine and completing the Loulo Project, including the costs of all
labour, materials and cost overruns in accordance with Clause 6.2 (but
excluding, for the avoidance of doubt, any such costs funded with the
proceeds of Loans), the existence of which shall be determined by the
Security Trustee in its capacity as Facility Agent (acting in
consultation with the Independent Engineer), are funded, paid and
satisfied from its own resources and to cause the installation and
completion of the Loulo Project in a timely, good, workmanlike and
lien-free manner, in accordance with the Agreed Project Standards.
(d) BORROWER FAILS TO COMPLETE
If for any reason whatsoever (but without prejudice to the other
undertakings of the Guarantor contained in this Deed (including Clause
6.1(a), Clause 6.2 and Clause 6.3):
(i) the Mechanical Completion Date does not occur by 30 June, 2006;
or
(ii) the Economic Completion Date does not occur by 31 December, 2007;
or
(iii) Economic Completion or Mechanical Completion is not achieved in
accordance with the Agreed Project Standards,
then in such event or at any time thereafter, the Security Trustee may
give written notice thereof to the Guarantor and the following
provisions shall then apply:
(A) THE GUARANTOR TO STEP-IN
Within ten days after the date on which the Security Trustee
gives any such notice to the Guarantor, the Guarantor will, at
its cost, commence to complete the construction of the Mine and
diligently prosecute such construction in accordance with the
Agreed Project Standards, free of all liens and fully paid for,
and shall defend, indemnify and hold the Lender Parties harmless
from all losses, costs, liabilities and expenses, including legal
fees, incurred in connection with such completion, but for the
avoidance of doubt, nothing in this Clause shall relieve the
Guarantor of its obligations under Clause 2.
(B) THE GUARANTOR FAILS TO COMPLETE
If the Guarantor fails to complete the construction of the Mine
or diligently to prosecute such construction in accordance with
the Development Plan, then in addition to any other rights or
remedies that
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may be available to the Lender Parties under this Deed, the other
Operative Documents, or at law or in equity (including the right
and remedy of specific performance) the Lender Parties may either
through the Security Trustee (but only with the Security
Trustee's consent, which may be withheld in its absolute
discretion) or through a nominee exercise any one or more of the
following rights and remedies:
(x) without undertaking to complete the construction of the Mine
or being obliged to foreclose on or enforce the security
described in the Loan Documents, the Lender Parties shall
have the right to recover damages from the Guarantor in an
amount equal to all costs which the Lender Parties would
have to incur in order to achieve Mechanical Completion and
Economic Completion in accordance with the Agreed Project
Standards and to reach the Group Members Undertakings
Release Date; and/or
(y) without undertaking to complete the construction of the
Loulo Project, the Lender Parties, at their option, shall
have the right, but shall have no obligation, to proceed or
to direct the Security Trustee to proceed, as appropriate,
to foreclose on or enforce any of the security described in
the Loan Documents.
(e) CUMULATIVE REMEDIES
The Lender Parties' remedy of specific performance, the recovery of
damages and all other rights and remedies under this Deed, and the
other Operative Documents, at law or in equity are non-exclusive of
each other and cumulative. The parties to this Deed recognise that the
choice of remedies made by the Lender Parties at any time will
necessarily and properly be a matter of business judgment, which the
passage of time or change of circumstances may or may not prove to
have been the best choice to maximise recovery by the Lender Parties
at the lowest cost to the Borrower or the Guarantor. Nevertheless, the
choice of remedies by the Lender Parties shall not be subject to
question or challenge by any other person, nor shall any such choice
be asserted as a defence, set-off or basis for any claim of failure to
mitigate loss on the part of the Lender Parties in any action or
proceeding arising in connection with this Deed.
6.2 COST OVERRUNS
The Guarantor agrees that, if for any reason and at any time (and from time
to time), the aggregate costs and expenses (whether or not Project Costs as
reflected in the Development Plan) which are, in the opinion of the
Security Trustee, necessary (or which are, at the beginning of each
calendar month, expected to be necessary) to be incurred on or prior to the
Group Members Undertakings Release Date to develop, construct and complete
the Mine in accordance with the Agreed Project Standards exceed the Project
Costs as reflected in the Development Plan as in effect on the date of this
Deed, the Guarantor will contribute cash to the Borrower in an amount equal
to such excess, in a sufficiently timely manner to permit the Borrower to
fund such excess costs and expenses as the same become due and payable and
otherwise in a
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form and manner acceptable to the Security Trustee in the manner set out
herein. The Guarantor will deposit any contribution made by any of them
hereunder into the Operating Account.
6.3 ECONOMIC COMPLETION
Without limiting any other provision of this Deed, the Guarantor hereby
irrevocably and unconditionally undertakes and agrees (as primary obligor)
that Economic Completion will take place by no later than 31 December,
2007. The Guarantor recognises that it is a condition to the occurrence of
Economic Completion that no Default shall then have occurred and be
continuing and that, in particular, that it is required that the financial
covenants contained in Clause 9 of the Loan Agreement shall be shown to be
complied with (at all relevant times) as at the Economic Completion Date.
As part of its general undertakings contained in this Clause and elsewhere
in this Deed, the Guarantor will ensure, on or prior to the date referred
to above (and whether by way of a cash Capital Contribution, the advance of
Approved Subordinated Indebtedness or otherwise in a manner which is
consistent with the Loan Documents) that such covenants are capable of
being complied with as aforesaid. In addition, the Guarantor undertakes
that, as at the Group Members Undertakings Release Date, the amount
standing to the credit of the Debt Service Reserve Account shall not be
less than the Required Debt Service Reserve Balance.
6.4 CONTROL
The Guarantor will exercise control over the Borrower (whether through the
voting of shares issued by the Borrower and held by the Guarantor or its
affiliates, by the appointment of directors to the board of directors of
the Borrower or otherwise), and will make available to the Borrower such
support (whether by way of the provision of personnel, expertise, know-how,
intellectual property, professional or managerial services, equipment,
plant, technology, finance or otherwise), in each case so as to enable the
Borrower to construct and develop the Mine (and to achieve Mechanical
Completion, Economic Completion and the Group Members Undertakings Release
Date) in accordance with the Agreed Project Standards.
6.5 RRL (SOMILO) CHANGE IN CONTROL
The Guarantor agrees with the Security Trustee, for the benefit of each
Lender Party that (notwithstanding the provisions of Clause 3.1), at all
times until all Commitments have been terminated and all Obligations have
been paid and performed in full, it will (without prejudice to Clause 3.1
of the RRL Security Agreement) continue to directly own (and to have sole
power to vote and dispose of), free and clear of all liens (other than
those granted in favour of the Lender Parties pursuant to the RRL Security
Agreement) not less than one hundred percent (100%) of the share capital
(however designated) of Randgold Resources (Somilo) Limited.
6.6 UNDERTAKINGS PRIOR TO THE RRL GUARANTEE RELEASE DATE
The Guarantor agrees with the Security Trustee that on and from the date of
this Deed, and at all times up to and including the RRL Guarantee Release
Date, it shall perform and comply with the following undertakings:
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(a) the Guarantor shall maintain, and shall take all necessary measures to
ensure that, at all times a minimum cash balance of not less than
U.S.$20,000,000 is available, unencumbered and free of any restriction
or lien whatsoever;
(b) the Guarantor will not, and the Guarantor will ensure that no Group
Member will, consent to (or otherwise permit to occur) any amendment,
waiver or other modification to any material term or condition of the
Morila Project Finance Agreement or any other instrument implemented
in connection therewith or any instrument relating to the refinancing
of the indebtedness outstanding thereunder of the nature referred to
in Clause 10.20(k) of the Loan Agreement;
(c) the Guarantor shall not permit Consolidated Net Worth to be, on any
date, less than U.S.$150,000,000; and
(d) the Guarantor shall not permit the Consolidated Interest Cover Ratio
to be, for any quarter, less than 3:1.
6.7 LOAN AGREEMENT UNDERTAKINGS
The undertakings of the Guarantor contained in this Clause 6 and otherwise
in this Deed shall be without prejudice to the continued effectiveness of
any other undertaking or other obligation of the Guarantor contained in the
Loan Agreement or any other Loan Document.
7. COSTS AND EXPENSES
The Guarantor covenants with the Security Trustee to indemnify the Security
Trustee fully on demand against all reasonable costs and expenses and
against all liabilities, claims, demands, actions or proceedings of any
kind properly incurred by (or made or brought against) the Security Trustee
(or any manager or agent appointed by the Security Trustee):
(a) in connection with the negotiation, preparation, execution and
registration of this Deed;
(b) as a result of any failure by the Guarantor to perform any of its
obligations under this Deed; or
(c) in the exercise or contemplation of any of the powers or rights
conferred by this Deed or by any other lien granted (whether by the
Guarantor or any third party) in respect of all or part of the
Guaranteed Liabilities;
together in each case with interest calculated on a daily basis from the
date the same is incurred or becomes payable by the Security Trustee at the
Interest Rate, such interest being compounded at such intervals as the
Security Trustee shall determine, acting reasonably.
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8. PAYMENTS; NO DEDUCTIONS
8.1 SECURITY TRUSTEE'S ACCOUNT
All payments to be made by the Guarantor under this Deed shall be paid to
the Security Trustee's account at such office or bank as it may notify the
Guarantor from time to time in immediately available funds denominated in
the relevant currency.
8.2 NO DEDUCTIONS
All payments made or to be made by the Guarantor under this Deed shall be
made in full without any deduction, withholding, set-off or counterclaim on
account of any taxes or of any claim that the Borrower, the Guarantor or
any other Obligor may have against the Security Trustee or any Lender
Party.
8.3 DEDUCTIONS WHERE COMPELLED BY LAW
If the Guarantor is compelled by law to make any deduction or withholding,
then it shall account for the same to the relevant authority as and when
required by law, shall pay to the Security Trustee all necessary additional
amounts to ensure receipt and retention (free from any liability) by the
Security Trustee of the full amount which it would have received had the
payment not been subject to the deduction or withholding and shall promptly
provide to the Security Trustee a certificate of deduction and such tax
receipts and other documents as the Security Trustee may require.
8.4 MITIGATION
Clauses 5.5 (Taxes) and 5.6 (Mitigation) of the Loan Agreement are hereby
incorporated by reference as if set out in their entirety herein, with all
necessary consequential changes.
9. SEVERABILITY
If any part of any provision of this Deed shall be or become invalid or
unenforceable, then the remainder of such provision and all other
provisions of this Deed shall remain valid and enforceable.
10. AMENDMENTS, WAIVERS AND RIGHTS
10.1 AMENDMENTS AND VARIATIONS
No amendment or variation of the terms of this Deed shall be effective
unless it is made or confirmed in a written document signed by both
parties.
10.2 NO RELEASE OR WAIVER
No delay in exercising or non-exercise by the Security Trustee of any of
its rights, powers or remedies provided by law or under or in connection
with this Deed shall impair such rights, powers or remedies or operate as a
waiver or release of that right. Any waiver or release must be specifically
granted in writing signed by an authorised signatory of the Security
Trustee and shall:
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(a) be confined to the specific circumstances in which it is given;
(b) not affect any other enforcement of the same or any other right; and
(c) except to the extent set forth therein, be revocable at any time in
writing.
10.3 CUMULATIVE RIGHTS AND REMEDIES
The rights and remedies of the Security Trustee under this Deed are
cumulative and not exclusive of any rights or remedies of the Security
Trustee under the general law. The Security Trustee may exercise each of
its rights as often as it thinks necessary.
10.4 NON-EXERCISE OF RIGHTS
The Security Trustee shall be under no duty of any kind to the Guarantor in
respect of the exercise or non-exercise of any of its rights under this
Deed. The Guarantor shall not rely on such exercise or non-exercise in any
way.
11. ASSIGNMENT
11.1 GUARANTOR'S RIGHTS OF DISPOSITION
The Guarantor shall not be entitled to assign or transfer all or any of its
respective rights, benefits and obligations under this Deed.
11.2 SECURITY TRUSTEE'S RIGHTS OF DISPOSITION
The right of the Security Trustee to assign, or otherwise dispose of, any
rights, benefits or interest in this Deed is subject to the provisions of
the Loan Agreement.
11.3 PROVISION OF INFORMATION
Clause 14.13 (Confidentiality) of the Loan Agreement is hereby incorporated
by reference as if set out in its entirety herein, with all necessary
consequential changes.
12. LAW AND JURISDICTION
This Deed shall be construed in accordance with English law, and for the
exclusive benefit of the Security Trustee the Guarantor agrees that the
courts of England are to have jurisdiction to settle any disputes which may
arise in connection with this Deed; but the Guarantor agrees that the
Security Trustee shall be entitled to bring proceedings in connection with
this Deed in any other court of competent jurisdiction.
13. AGENT FOR SERVICE OF PROCESS
(a) The Guarantor shall at all times maintain an agent for service of
process in England.
(b) The Guarantor appoints Fleetside Legal Representative Services Limited
of 0 Xxxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxxx, as its agent for that
purpose. Service of any process shall be sufficiently served on the
Guarantor if
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delivered to the Guarantor's agent at the address specified in this
Clause 13. The Guarantor may not revoke such appointment.
(c) If for any reason an agent appointed under this Clause 13 ceases to
act as such or ceases to have an address in England, the Guarantor
shall promptly appoint another such agent and notify the Security
Trustee of the appointment and the new agent's name and address. If
the Guarantor does not make such an appointment within seven days of
such cessation, then the Security Trustee may do so on its behalf and
shall notify the Guarantor if it does so.
14. THIRD PARTY RIGHTS
The terms of this Deed may be enforced only by a party to it and shall not
create any rights in favour of any third parties (other than the Lender
Parties) whether under the Contracts (Rights of Third Parties) Xxx 0000 or
otherwise. Notwithstanding any provision of this Deed, the parties do not
require the consent of any third party to rescind or vary this Deed at any
time.
EXECUTION:
The parties hereto have caused this Deed to be duly executed and delivered as a
deed on the day and year first above written.
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THE GURANTOR
EXECUTED as a deed for and on behalf ) /s/ Xxxxx X. Xxxxxxxx
of RANDGOLD RESOURCES ) -------------------------------------
LIMITED by: By
Xxxxx X. Xxxxxxxx
-------------------------------------
Name Printed
Finance Director
-------------------------------------
Title
-------------------------------------
By
-------------------------------------
Name Printed
-------------------------------------
Title
16
THE SECURITY TRUSTEE
EXECUTED as a deed for and on behalf ) /s/ X. Xxxxxxx
of N M ROTHSCHILD & SONS ) -------------------------------------
LIMITED, as the Security Trustee by: ) By
X. Xxxxxxx
-------------------------------------
Name Printed
-------------------------------------
Title
/s/ D. Street
-------------------------------------
By
D. Street
-------------------------------------
Name Printed
-------------------------------------
Title
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