SHARE SUBSCRIPTION AGREEMENT
AGREEMENT made 4 June 1993
- ---------
PARTIES
- -------
(1) ACM (NEW ZEALAND) LIMITED a company duly incorporated in New Zealand and
having its registered office at 15th Floor, National Mutual Centre, 37-41
Shortland Street, Auckland, New Zealand ("Subscriber")
(2) WAIHI FINANCING LIMITED a company duly incorporated in New Zealand and
having its registered office at 171 Featherston, Street, Wellington, New
Zealand ("Company")
(3) AMAX GOLD, INC. a company duly incorporated in Delaware, United States of
America and having its principal office at 350 Indiana Street, Golden,
Colorado, United States of America ("Amax")
INTRODUCTION
- ------------
A. The Company and Amax are parties to the Share Sale Agreement.
B. Amax is the registered holder of all but one, and beneficial owner of all
of the Shares which comprise 100 ordinary shares of $1.00 each and all of
which are fully paid up.
C. The Company requires financial accommodation to enable it to pay or
satisfy the Purchase Price and Adjustments.
D. The Subscriber has (at the request of Amax) agreed to provide the Company
financial accommodation for the purposes mentioned in paragraph C above
by subscribing for Preference Shares in accordance with this Agreement.
IT IS AGREED
- ------------
1. DEFINITIONS
- -- -----------
1.1 Unless the context requires otherwise, in this Agreement:
"Adjustment" means each adjustment (if any) to the Purchase Price
required to be made under the Share Sale Agreement which results in an
amount being payable by the Company to Amax or where the context requires
the amount so payable by the Company or if that amount is in a currency
other than New Zealand dollars that amount converted to New Zealand
-2-
dollars at the Spot Rate of Exchange on the day which is 2 Business Days
before the date for payment by the Company;
"Adjustment Subscription Date" means each date for payment of an
Adjustment;
"Agreement" means this document, including the introduction, schedules,
appendices and any annexures;
"AHNZ" means Amax Holdings New Zealand Limited, a company duly
incorporated in New Zealand and having its registered office at 18th
Floor, Price Waterhouse Centre, 66 Wyndham Street, Auckland, New Zealand;
"Conditions Precedent" means the conditions set out in clause 2.1;
"Convertible Securities" has the same meaning as is ascribed to the
expression convertible securities in Article 2.1 of the Articles of
Association of the Company;
"First Issue Date" means the date the Initial Preference Shares are
issued and allotted.
"First Subscription Date" means, subject to clauses 2.7 and 11.5, the
second Business Day after the Conditions Precedent have been satisfied or
another date agreed in writing by Amax and the Subscriber;
"Initial Preference Shares" means the number of Preference Shares which
is the nearest whole number to but does not exceed the number calculated
by dividing the Initial Subscription Amount by the aggregate of $1.00 and
the Premium Amount;
"Initial Subscription Amount" means the sum of $15 million;
"Issue Date" means each date on which Preference Shares are issued and
allotted pursuant to this Agreement.
"Negative Adjustment" means the adjustment (if any) to the Purchase Price
required to be made under the Share Sale Agreement which results in an
amount being payable by Amax to the Company or where the context requires
the amount so payable by Amax;
"New Article" means an Article in the form set out in Schedule 1 duly and
effectively incorporated in the Articles of Association of the Company;
-3-
"NZ Spot Gold Price" means on a date the price per ounce of gold fixed in
the afternoon by the London Bullion Market Association (known as the
London PM Fix) last preceding that date converted to New Zealand Dollars
at the Spot Rate of Exchange on that date;
"Parties" means the parties to this Agreement;
"Preference Shares" means redeemable preference shares in the capital of
the Company validly and effectively issued upon and subject to the terms
set out in the New Article having a par value of $1.00 each and issued at
a premium per share equal to the Premium Amount;
"Premium Amount" means $9,999.00;
"Relevant Adjustment Preference Shares" means in relation to an
Adjustment Subscription Date the number of Preference Shares which is the
nearest whole number to but does not exceed the number calculated by
dividing the Relevant Adjustment Subscription Amount by the aggregate of
$1.00 and the Premium Amount;
"Relevant Adjustment Subscription Amount" means in relation to an
Adjustment Subscription Date the Adjustment payable on that Adjustment
Subscription Date;
"Relevant Subsequent Preference Shares" means in relation to each
Subsequent Subscription Date a number of Preference Shares which is the
nearest whole number to but does not exceed the number calculated by
taking the product of the Relevant Subsequent Subscription Amount
multiplied by the NZ Spot Gold Price on the day which is two Business
Days before that Subsequent Subscription Date and dividing that product
by the aggregate of $1.00 and the Premium Amount;
"Relevant Subsequent Subscription Amount" means in relation to each
Subsequent Subscription Date 1550 ounces of Gold;
"Shares" means all of the issued voting shares in the capital of the
Company;
"Share Sale Agreement" means the agreement made on or about the date of
this Agreement between the Company and Amax for the purchase and sale of
all of the issued shares in the capital of AHNZ;
"Spot Rate of Exchange" means on a date the rate of exchange for the
purchase on a spot basis of United States Dollars
-4-
with New Zealand Dollars quoted at or about 11 am on that date by ANZ
Banking Group (New Zealand) Limited;
"Subscription Date" means each of the Initial Subscription Date, each
Adjustment Subscription Date and each Subsequent Subscription Date;
"Subsequent Subscription Date" means each date which corresponds with a
Delivery Date;
"Terms of Issue" means in relation to a Preference Share the issue
thereof in accordance with the New Article credited as fully paid up to
an amount equal to the nominal value thereof (being $1.00) plus the
Premium Amount by way of share premium.
1.2 Expressions commencing with a capital letter which are not defined above,
shall unless the context otherwise requires, have the meanings ascribed
thereto in the Share Sale Agreement.
2. CONDITIONS PRECEDENT
- -- --------------------
2.1 The Obligations of the Parties under this Agreement concerning the
subscription for and issue of Preference Shares are subject to the
conditions that:
(a) the Share Sale Agreement has become unconditional;
(b) the unconditional consent of the New Zealand Overseas Investment
Commission under the Overseas Investment Act 1973 and the 1985
Regulations thereunder is obtained to the subscription by the
Subscriber from time to time for Preference Shares in accordance
with this Agreement and to any other matter in connection with this
Agreement and the Subscriber's business in New Zealand for which
such consent is necessary or desirable.
2.2 The Subscriber will use reasonable endeavours to obtain the consent
referred to in clause 2.1 by 5 pm on the date 10 Business Days from the
date of this Agreement (the "Condition Date") (or such later date as
shall be notified by the Subscriber to Amax by 5 pm on the Condition
Date). If such consent has not been obtained by 5 pm on the Condition
Date (or such later date as is notified) or is refused then this
Agreement shall be at an end at that time on that date or at 5 pm on the
date of the refusal (as the case requires).
-5-
2.3 If the Share Sale Agreement is at an end by operation of clause 6.2 of
the Share Sale Agreement then this Agreement shall at the same time on
the same date be at an end.
2.4 If by operation of clauses 2.2 or 2.3 this Agreement is at an end then
from the time on the date specified in clauses 2.2 or 2.3 (as the case
requires) this Agreement shall cease to have any further force or effect
save that the rights of each Party, and the obligations of the other
Parties in connection with any prior breach of any provision of this
Agreement will continue indefinitely and not be affected or prejudiced by
this Agreement being at an end.
2.5 For the purposes of clause 6.2 of the Share Sale Agreement the Company
and Amax agree that notice given by the Subscriber under clause 2.2 of
this Agreement shall be deemed to have been a notice given by the Company
under clause 6.2 of the Share Sale Agreement.
2.6 If the Conditions Precedent have not been satisfied by the date which
would but for this clause be the Completion Date then the Company and
Amax agree that for all purposes of the Share Sale Agreement the
Completion Date will be the same day as the First Subscription Date.
2.7 If but for this clause the First Subscription Date would be a date
earlier than the Completion Date then the First Subscription Date will be
the same day as the Completion Date.
3. AGREEMENT TO SUBSCRIBE
- -- ----------------------
3.1 Subject to the Conditions Precedent having been satisfied and Completion
occurring simultaneously with compliance by the Subscriber with its
obligations under paragraph (a) below:
(a) with effect on the First Subscription Date the Subscriber applies
for and agrees to accept upon and subject to the Terms of Issue the
Initial Preference Shares and agrees to subscribe the Initial
Subscription Amount such subscription to be effected in accordance
with clause 3.2(a);
(b) with effect on each Adjustment Subscription Date the Subscriber
applies for and agrees to accept upon and subject to the Terms of
Issue the Relevant Adjustment Preference Shares and agrees to
subscribe the Relevant Adjustment Subscription Amount such
subscription to be effected in accordance with clause 3.2(a);
-6-
(c) with effect on each Subsequent Subscription Date the Subscriber
applies for and agrees to accept upon and subject to the Terms of
Issue the Relevant Subsequent Preference Shares and agrees to
subscribe the Relevant Subsequent Subscription Amount such
subscription to be effected in accordance with clause 3.2(b); and
(d) the Subscriber in each of the cases mentioned in paragraphs (a) (b)
and (c) above, agrees to its name being entered in the register of
members of the Company in respect of Preference Shares upon the
issue and allotment thereof in accordance with this Agreement.
3.2 Subscription for Preference Shares must be effected as follows:
(a) on the First Subscription Date and on each Adjustment Subscription
Date respectively the Subscriber must pay to Amax on behalf of the
Company the Initial Subscription Amount or the Relevant Adjustment
Subscription Amount (or if the Adjustment is an amount which has
been converted to New Zealand dollars from another currency that
amount in that other currency) as applicable (which the Company
irrevocably directs the Subscriber to do and acknowledges that such
payment will discharge in full the Subscriber's obligations
regarding subscription for the Initial Preference Shares or the
Relevant Adjustment Preference Shares, as the case requires);
(b) on each Subsequent Subscription Date the Subscriber must cause to be
credited to the Vendor's Metal Account 1550 ounces of Gold on behalf
of the Company (which the Company irrevocably directs the
Subscriber to do and acknowledges that such crediting will discharge
in full the Subscriber's obligations regarding subscription for the
Relevant Subsequent Preference Shares).
3.3 Amax acknowledges that subscription by the Subscriber in accordance with
clause 3.2 will satisfy the obligations of the Company to Amax under
clauses 3.2(a), 3.2(b), 4.4(a), 4.4(b) and 5.7(a) of the Share Sale
Agreement in connection with payment of the corresponding amount of money
or crediting to the Vendor's Metal Account of the corresponding quantity
of Gold, by the Company under the Share Sale Agreement on the date which
corresponds with the respective dates on which subscription is so
effected by the Subscriber.
-7-
3.4 Amax and the Company each agree that on each date on which subscription
is effected by the Subscriber in accordance with clause 3.2 they will
each do or cause to be done all things necessary for the effective issue
and allotment, upon and subject to the Terms of Issue, of the Initial
Preference Shares, each parcel of Relevant Adjustment Preference Shares
or each parcel of Relevant Subsequent Preference Shares (as the case
requires) including:
(a) in the case of Amax and the Company the taking of all steps
necessary:
(i) on or prior to the First Subscription Date to duly and
effectively incorporate the New Article in the Articles of
Association of the Company; and
(ii) to duly and effectively increase the share capital of the
Company in accordance with the Companies Act and the Articles
of Association of the Company to the extent necessary (and only
that extent) to accommodate the issue and allotment of
Preference Shares in accordance with this Agreement; and
(b) in the case of the Company to issue share certificates in the name
of the Subscriber for a number of Preference Shares respectively
equal to the Initial Preference Shares, each parcel of the Relevant
Adjustment Preference Shares or each parcel of the Relevant
Subsequent Preference Shares (as the case requires) and to enter the
name of the Subscriber in the register of members of the Company as
the holder of those Preference Shares.
4. ACTION ON FIRST SUBSCRIPTION DATE
- -- ---------------------------------
4.1 On the First Subscription Date and simultaneously with the doing or
procuring of all acts, matters and things to be done or procured under
the Share Sale Agreement and with compliance by the Company and the
Subscriber with their respective obligations under this Agreement to be
observed or performed on the First Subscription Date Amax must do or
procure in connection with the Company all those things which under
clauses 4.2 and 4.3 of the Share Sale Agreement Amax must do in
connection with AHNZ, ARNZ or AGMNZ (to the extent applicable to the
Company) as if references in those clauses to "AHNZ", "ARNZ" or "AGMNZ"
were to the Company and references to the "Purchaser" were to the
Subscriber (including the removal and appointment of directors and the
-8-
secretary of the Company). The persons who are appointed as directors of
the Company under this clause shall, for the purposes of the New Article,
be taken to have been appointed by the Preference Shareholders (as
defined in the New Article) .
4.2 The Company irrevocably authorises and directs Amax to deliver to the
Subscriber at Completion all those things which under the Share Sale
Agreement Amax is to deliver to the Purchaser.
4.3 The Parties agree that any act, matter or thing done or procured to be
done in connection with Completion under the Share Sale Agreement or
under clause 3 in connection with the Initial Preference Shares or under
clause 4.1 shall be deemed for the purposes of both this Agreement and
the Share Sale Agreement not to have been done until all of the acts,
matters and things required to be done or procured thereunder have been
duly done or procured or waived by the Party intended to have the benefit
thereof.
4.4 If subscription for the Initial Preference Shares does not occur by 5 pm
on the fourteenth day after the date of this Agreement and that fact is
not due to delay, failure or default of the Company then the Subscriber
must pay the Company interest on the sum of $15 million at a rate equal
to the Default Rate minus 2 percentage points computed from but not
including that fourteenth day to and including the date subscription for
the Initial Preference Shares occurs calculated with daily rests and
payable at the same time as that subscription occurs. The Company
irrevocably directs the Subscriber to pay so much of the interest which
is payable under this clause as is equal to the interest payable by the
Company to Amax under clause 4.5 of the Share Sale Agreement to Amax on
the Company's behalf and acknowledges that such payment will satisfy the
Subscriber's obligation under this clause to the extent of such payment.
Amax agrees that payment by the Subscriber to it of an amount under this
clause will satisfy the Company's obligations under clause 4.5 of the
Share Sale Agreement to the extent of that amount.
5. WARRANTIES
- -- ----------
5.1 The provisions of clause 7 of the Share Sale Agreement (and consequently
of Schedules 2 and 3 to the Share Sale Agreement) shall apply to this
Agreement as if references therein to "the Vendor" were to Amax and to
"the Purchaser" were to the Subscriber, references to "this Agreement"
were to this Agreement and references to the Completion Date were
-9-
to the First Subscription Date and to "the date Completion occurs" were
to the First Issue Date.
5.2 Amax further warrants to the Subscriber in the terms of Schedule 2 to
this Agreement, each of which is a separate warranty in no way limited by
any other warranty.
5.3 Each warranty in Schedule 2 applies at:
(a) the date of this Agreement;
(b) each Issue Date; and
(c) each date between them.
6. MATTERS AFFECTING SHARE SALE AGREEMENT
- -- --------------------------------------
6.1 Amax and the Company agree that:
(a) each approval of, expression of satisfaction with, consent to,
waiver of, agreement with or to and nomination or direction as to,
any act, matter or thing in connection with the Share Sale Agreement
by the Company, notwithstanding anything contained in the Share Sale
Agreement, shall be wholly ineffective for all purposes (including
for purposes of or connected with the Share Sale Agreement) unless
expressly concurred in by the Subscriber by notice in writing to
Amax and the Company;
(b) the Company may not settle or compromise any dispute or question
touching or concerning the Share Sale Agreement or any matter or
thing arising under or in connection with it without the prior
written consent, addressed to Amax and the Company, of the
Subscriber;
(c) the Subscriber may refuse or withhold any concurrence or consent
referred to in this clause in its absolute and unfettered
discretion.
6.2 Amax agrees that it will procure that the audit statement delivered to
the Company in accordance with Clause 5.2 of the Share Sale Agreement is
simultaneously delivered to the Subscriber.
6.3 The Company agrees that unless a direction given by the Subscriber is
unlawful it will promptly, if and as directed by the Subscriber, give all
such approvals, waivers, consents, nominations and directions under or in
connection
-10-
with the Share Sale Agreement which the Subscriber directs the Company to
give.
7. UNDERTAKINGS
- -- ------------
7.1 Amax unconditionally and irrevocably undertakes to the Subscriber that,
from the date of this Agreement until all of the Preference Shares which
may be issued under this Agreement have been issued and have been
redeemed:
(a) it will do all things within its power to ensure that none of the
Company, AHNZ, ARNZ and AGMNZ ceases to be a related company of Amax
(within the meaning of "ceases to be a related company" in the Joint
Venture Agreement) except by entering into and giving effect to the
Share Sale Agreement and this Agreement and except by the granting
of an option over the Shares or a sale of the Shares to which, in
each case, the Subscriber has given its prior written consent (which
consent the Subscriber may refuse or withhold in its absolute
discretion);
(b) it will not:
(i) do or, to the extent that it has power, permit to be done
any act, matter or thing which would cause any of the
warranties in Schedule 2 of the Share Sale Agreement or
Schedule 2 of this Agreement to be untrue, unfulfilled or
breached in a material respect;
(ii) permit the issue of any further shares in the capital of
the Company (other than Preference Shares issued to the
Subscriber in accordance with this Agreement);
(iii) requisition a meeting of shareholders of the Company or
sign any entry in the minute book of the Company which
under section 362 of the Companies Act would operate as a
resolution;
(iv) except at Completion and in accordance with the Share Sale
Agreement, remove or appoint any person from or to office
as a director or secretary of the Company (other than any
director who, having regard to the New Article, may be
appointed or removed by the holders of ordinary shares in
the Company
-11-
pursuant to the Articles of Association of the Company);
(v) exercise any vote nor sign any resolution so as to cause
or permit the Articles of Association of the Company to be
amended in any manner other than as necessary to
incorporate the New Article therein and permit the issue
to the Subscriber of Preference Shares in accordance with
this Agreement;
(vi) cause or permit the Company to:
(A) sell, transfer, lease or otherwise dispose of or
alienate any asset;
(B) acquire any asset nor incur any Liability (except in
each case under the Share Sale Agreement);
(C) grant or permit to come into existence or subsist any
Mortgage or other encumbrance over the whole or any
part of its assets or undertaking;
(vii) cause or permit the Company to issue any option to
subscribe for shares in the capital of the Company or any
other Convertible Securities;
(viii) cause or permit the Company to be wound up or to enter
into any scheme of arrangement or compromise or to reduce
its share capital or to make any distribution to its
shareholders other than dividends or by way of redemption
of Preference Shares;
(ix) terminate any trust under which any of the Shares are held
on its behalf;
(x) cause or permit the Company to appoint a Managing
Director;
without, in each case, the prior written consent of the Subscriber
(which consent the Subscriber may refuse or withhold in its absolute
discretion).
(c) without limiting or prejudicing clause 7.1(b) but subject to clause
7.4, it will do all things as a
-12-
shareholder of the Company required to be done to enable the Company
to comply with its statutory obligations.
7.2 Amax will not be in breach of its obligations under clause 7.1(b) nor in
breach of any warranty in respect of or resulting from any act, matter or
thing done by the Company with the authority of a resolution of its Board
of Directors duly passed at a time when that Board is constituted by
persons a majority of whom have been appointed by the Subscriber pursuant
to the New Article at a meeting at which at least one director appointed
by the Subscriber under that Article was present.
7.3 The Subscriber agrees that it will not give notice to the Company under
the New Article seeking redemption of any of the Preference Shares,
except:
(a) as contemplated in clause 8; or
(b) to the extent that redemption can be funded by the Company solely
out of profit,
until after the last of the Subsequent Subscription Dates.
7.4 The Subscriber agrees, subject to Amax complying with clause 7.1, that
for so long as the Subscriber and Amax are shareholders in the Company
the Subscriber will be responsible to ensure that the Company complies
with its statutory obligations and to provide to the Company any funding
it may require for this purpose on commercial terms.
7.5 Should the Subscriber transfer any Preference Shares it will do so only
to a transferee which covenants in favor of Amax to comply with clauses
7.3 and 7.4 as if that transferee were the Subscriber.
8. NEGATIVE ADJUSTMENT
- -- -------------------
If at any time a Negative Adjustment occurs the Subscriber may give
notice in writing to the Company under the New Article requiring the
Company to, and if such a notice is given the Company and Amax agree to
do or procure the doing of all things within their power respectively
which are necessary to enable the Company to, redeem in accordance with
the New Article the lesser of the number of Preference Shares specified
for redemption in the Subscribers notice under this clause and the number
of the Preference Shares then on issue to the Subscriber which is the
nearest whole number to but does not exceed the number calculated by
-13-
dividing the Negative Adjustment by the aggregate of $1.00 and the
Premium Amount.
9. INDEMNITY
- -- ---------
9.1 Amax indemnifies the Subscriber and agrees to keep the Subscriber forever
indemnified against all losses (whether through deficiency in the assets
or increase in Liabilities of the Company, AHNZ, ARNZ, or AGMNZ or for
any other reason) and liabilities and the cost of all demands, actions
and other proceedings against the Subscriber (including legal costs on a
Solicitor and own client basis) directly or indirectly arising out of or
in respect of or resulting from any breach of warranty given by Amax
(determined applying the provisions of clause 5) or any breach or non-
performance of the obligations of Amax under this Agreement or the Share
Sale Agreement.
9.2 Amax will if requested by the Subscriber (in its absolute discretion) pay
to the Company, AHNZ, ARNZ or AGMNZ an amount equal to the deficiency in
the assets or increase in the Liabilities of the Company, AHNZ, ARNZ or
AGMNZ (as the case requires) for which Amax is liable to AGMNZ under
clause 9.1 rather than pay compensation to the Subscriber for its loss
occasioned by that deficiency or increase. The Subscriber agrees that
compliance by Amax with clause 8.2 of the Share Sale Agreement shall
relieve Amax of obligations under this clause to the extent that such
obligation relates to the deficiency in assets or increases in
Liabilities in respect of which Amax has so complied with clause 8.2 of
the Share Sale Agreement.
9.3 The Subscriber agrees that the liability of Amax to the Subscriber under
clause 9.1 (as affected by clause 9.6) or otherwise for breach of
warranty or of this Agreement shall be reduced by any amount actually
paid by Amax to the Company pursuant to clause 8.1 of the Share Sale
Agreement or otherwise to compensate the Company for breach of warranty
or of the Share Sale Agreement in connection with the same circumstances
as those giving rise to Amax having such liability to the Subscriber.
9.4 If any payment made by Amax to the Subscriber (or at its direction under
clause 9.2) pursuant to or in consequence of the operation of clause 9.1
("Indemnity Payment") is derived by the Subscriber or any other person to
whom the payment is made in a manner which is assessable income pursuant
to the Income Tax Act 1976 of any kind to the Subscriber or that other
person then Amax shall pay a further amount equal to
-14-
the amount of Income Tax payable in respect of the Indemnity Payment
calculated without regard to:
(a) any other income; or
(b) any entitlement to any deduction or loss; or
(c) any losses carried forward pursuant to section 188 of the Income Tax
Act of 1976; or
(d) any transfer of any loss pursuant to section 191A of the Income Tax
Act 1976
of or available to the Subscriber or that other person PROVIDED THAT any
further amount payable shall be reduced:
(i) to the extent of the amount of losses available to the
Subscriber or that other person at that time to be carried
forward pursuant to Section 188 of the Income Tax act of
1976 which, in the reasonable belief of the Subscriber or
that other person (as the case may be), would not be
utilized within the three income years (as defined in the
Income Tax Act 1976) following the date of derivation; or
(ii) to the extent that a deduction pursuant to the Income Tax
Act 1976 for all or part of the loss, liability or costs
which gave rise to the payment being made by Amax has been
obtained or can be obtained by the Subscriber or that
other person.
9.5 The liability of Amax under this Clause 9 is limited to the extent that:
(a) it will not be liable in connection with an amount of income Tax of
up to $2.75 million in the case of AGMNZ or $1.50 million in the
case of MML which is or becomes payable by AGMNZ or MML arising out
of the deduction; prior to the Balance Date, by AGMNZ or MML of
future tunnel capital expenditure;
(b) it will not be liable in connection with any action, proceeding,
claim or demand by Auag Resources Limited, Welcome Gold Mines
Limited, Mineral Resources Limited, ACM Gold Limited, Waihi Gold
Mining Company Limited or MML under the Joint Venture Agreement or
the Principals Deed relating to the Joint Venture Agreement dated
-15-
17 July 1987 or any provision of the Joint Venture Agreement or that
Principals Deed having operation or effect, in any such case in
consequence of the making or completion of this Agreement or the
Share Sale Agreement (except if Amax is in breach of clause 7.1(a);
(c) it will not be liable in respect of any claim arising out of a
breach of warranty referred to in clause 5.1 where the circumstances
likely to give rise to the claim have not been notified to Amax in
reasonable detail prior to the expiration of 2 years from the First
Issue Date except if the breach of warranty concerns the existence
of Mortgage or other encumbrances or concerns title to any asset
being a Marketable Security, or concerns title to any interest in
any Joint Venture Asset or the Participating Interest (each as
defined in the Joint Venture Agreement) of AGMNZ or arises under
paragraph (77) of Schedule 2 of the Share Sale Agreement;
(d) the Subscriber may only claim against Amax for amounts equal to or
exceeding $50,000 on each occasion on which a claim is made
(regardless of the number or magnitude of the individual matters
making up that claim); and
(e) it will not in any circumstances be liable for consequential loss or
damage except where that loss or damage arises directly out of the
wilful act or omission or gross negligence of Amax.
9.6 Amax acknowledges and agrees that the amount of the loss suffered by the
Subscriber where breach of warranty or of the Share Sale Agreement occurs
and there is a deficiency in assets or increase in Liabilities of the
Company, AHNZ, ARNZ or AGMNZ which would not have occurred had that
breach of warranty or of the Share Sale Agreement not occurred is an
amount at least equal to that deficiency or that increase.
9.7 Amax agrees with the Subscriber to observe and comply with the provisions
of clause 9 of the Share Sale Agreement and the Subscriber agrees, while
it holds Preference Shares, to exercise all powers it may have in that
regard to procure that the Company also complies with clause 9 of the
Share Sale Agreement.
9.8 If so required by Amax the Subscriber must, to the extent it has power,
permit Amax, at its own cost and expense (including as to legal costs and
expenses and as to internal management costs and expenses (including
costs of employees
-16-
time) of the Subscriber, the Company, AHNZ, ARNZ or AGMNZ incurred in
providing assistance to Amax) and subject to
(a) Amax providing to the Subscriber a bank guarantee or other security
acceptable to the Subscriber (having regard to any bank guarantee or
other security provided to the Company under clause 8.6 of the Share
Sale Agreement) for the amount of the Subscriber's claim against
Amax under clause 9.1; and
(b) clause 9.10
in the name of the Subscriber, the Company, AHNZ, ARNZ or AGMNZ (as the
case requires) to take the action which Amax deems fit to negotiate,
settle, compromise, defend or otherwise contest any third party claim or
suit giving rise to the Subscriber's claim against Amax under clause 9.1
or make any counterclaim which the Subscriber, the Company, AHNZ, ARNZ or
AGMNZ may have against the third party and to take over the conduct of
any proceedings commenced by the Subscriber, the Company, AHNZ, ARNZ, or
AGMNZ in connection with any such claim or suit.
9.9 Upon the Subscriber, or after the First Issue Date, the Company, AHNZ,
ARNZ or AGMNZ becoming aware of circumstances likely to give rise to a
claim being made under clause 9.1 the Subscriber must promptly give
notice Amax of those circumstances and must at the time of giving notice
supply to Amax all information and material regarding the circumstances
and likely claim as may be available to the Subscriber.
9.10 In exercising the rights conferred by clauses 9.8 Amax must:
(a) consult with the Subscriber regarding the appointment of legal
advisers (including Counsel) and must not appoint any legal adviser
to whose appointment the Subscriber has objected on reasonable
grounds;
(b) keep the Subscriber reasonably and promptly informed of all material
negotiations, any proposed settlement, compromise or counterclaim
and all material steps proposed to be taken to defend or otherwise
contest a claim or suit; and
(c) give reasonable consideration to the wishes of the Subscriber
regarding any negotiations, settlement, compromise, defence or other
contest or counterclaim (but without being obliged to accede to
those wishes);
-17-
10. CONTINUING OBLIGATIONS
- --- ----------------------
10.1 Amax must upon request by the Subscriber make available to the Subscriber
all records, documents and papers necessary to enable the Subscriber to
verify the Financial Statements, the statement comprised in the documents
delivered under clause 5.2 of the Share Sale Agreement, the warranties in
Schedule 2 of the Share Sale Agreement and the warranties in Schedule 2
of this Agreement.
10.2 Amax and the Subscriber must provide the other of them all reasonable
assistance including access to any relevant documents in its possession,
power or control (including the documents referred to in clause 10.2 of
the Share Sale Agreement) in connection with:
(a) in the case of the Subscriber or the Company any dispute between the
Company, AHNZ, ARNZ or AGMNZ and any person; or
(b) in the case of Amax:
(i) investigating and exercising the rights conferred on it by
clauses 8.6 or 9.3 of the Share Sale Agreement or clause
9.8 of this Agreement; or
(ii) complying with any obligation imposed on it by the laws
(whether federal or state) of the United States of America
or New Zealand (but only as necessary for such
compliance).
10.3 Each obligation, indemnity and warranty of a Party (except an obligation
fully performed at Completion or on any Subscription Date) continues in
force despite Completion and despite subscription for and the issue of
Preference Shares under this Agreement.
10.4 No representation or warranty by Amax will be in any way affected by any
enquiries or investigations at any time made by or on behalf of the
Subscriber.
10.5 Amax undertakes to the Subscriber to comply with its undertaking in
clause 10.5 of the Share Sale Agreement.
-18-
11. DEFAULT
- --- -------
11.1 In Clause 11:
(a) "Defaulting Party" has the meaning given to it in Clause 11.2; and
(b) "Other Party" means, where the Subscriber is the Defaulting Party,
Amax and, where Amax or on or prior to the First Issue Date the
Company is the Defaulting Party, the Subscriber.
11.2 (1) Amax, the Company or the Subscriber is a "Defaulting Party" for the
purposes of Clause 11 if any of the following apply:
(a) it fails to carry out any provision of this Agreement and
does not remedy that failure within 7 days after notice to
it requiring the failure to be remedied;
(b) it convenes a meeting of its creditors or proposes or
enters into a scheme of arrangement (except for the
purpose of reconstruction or amalgamation) or a
composition with any of its creditors;
(c) an application or order is made to or by a Court or a
resolution is passed for its winding-up or notice of
intention to propose such a resolution is given;
(d) a receiver, or receiver and manager is appointed in
respect of it or the whole or any part of its
undertakings, property or assets or any steps are taken
for the appointment of such a person;
(e) a person holding a security interest in its assets enters
into possession of or takes control of any of those assets
or takes any steps to enter into possession of or take
control of any of those assets;
(f) is unable to pay its debts within the meaning of Section
218 of the Companies Act or suspends payment of its debts;
(g) any step is taken to place it under statutory management
or steps are taken for
-19-
the appointment of a statutory manager under Part III of
the Corporations (Investigation and Management) Act 1989;
(h) a resolution is passed for the reduction of its capital or
notice of intention to propose such a resolution is given,
without the prior written consent of the Other Party;
(i) a warranty given by it in this Agreement is untrue,
unfulfilled or otherwise breached in a material respect;
(j) it becomes unlawful for it to perform its obligations
under this Agreement; or
(k) anything analogous to the matters or events mentioned in
any of paragraphs (b), (c), (d), (e), (f), (g), or (h)
occurs in relation to it in any other jurisdiction.
(2) Amax is also a Defaulting Party for the purposes of clause 11 if it
or AHNZ, ARNZ or AGMNZ is a Defaulting Party for the purposes of
clause 11 of the Share Sale Agreement.
11.3 The Subscriber may at any time prior to Completion having occurred
(without prejudice to its other rights and remedies under this Agreement
or at law) if Amax or the Company becomes a Defaulting Party, terminate
this Agreement by giving notice in writing to Amax and the Company.
Termination pursuant to this clause 11.3 does not prejudice any claim
which a Party may have against another at the time of termination.
Failure to exercise a right of termination under this clause 11.3 and the
occurrence of Completion and subscription for and issue of Preference
Shares under this Agreement, notwithstanding that the Subscriber has
actual knowledge that Amax or the Company is a Defaulting party, shall
not prejudice any other rights or remedies of the Subscriber (including
its right to damages for breach of this Agreement or breach of warranty
or to be indemnified under this Agreement).
11.4 Amax may at any time prior to Completion having occurred (without
prejudice to its other rights and remedies under this Agreement or at
law) if the Subscriber becomes a Defaulting Party terminate this
Agreement by giving notice in writing to the Purchaser. Termination
pursuant to this clause 11.4 does not prejudice any claim which a Party
may
-20-
have against another at the time of termination. Failure to exercise a
right of termination under this clause 11.4 and the occurrence of
Completion and receipt by Amax of the Initial Subscription Amount, any
Relevant Adjustment Subscription Amount (or an equivalent amount in
another currency) or any Relevant Subsequent Subscription Amount
notwithstanding that Amax has actual knowledge that the Subscriber is a
Defaulting Party, shall not prejudice any other rights or remedies of
Amax (including its right to damages for breach of this Agreement).
11.5 If the Other Party gives notice under Clause 11.2(1)(a) within 7 days
prior to the First Subscription Date, then the First Subscription Date is
extended to coincide with the expiry of the notice period.
11.6 A Defaulting Party, or where prior to the First Issue Date the Company is
a Defaulting Party Amax, must on demand pay to the Other Party all of the
costs and disbursements (including legal costs on a solicitor and client
basis) incurred by the Other Party in connection with the breach or
default (including the giving of a notice under clause 11.2(1)(a) and
otherwise in connection with the termination of this Agreement.
12. INTEREST ON MONEY OR GOLD IN ARREARS
- --- ------------------------------------
If a Party fails to pay an amount of money payable under this Agreement
or to deliver a quantity of Gold deliverable under this Agreement on the
due date, the Party in default must pay to the Party entitled to payment
of that amount or receipt of that quantity interest at the Default Rate
on that amount or that quantity, calculated and payable daily, computed
from the due date until the amount is paid in full. Interest payable by
the Company to Amax under the Share Sale Agreement must, if that interest
becomes payable by reason of a failure of the Subscriber to comply with
clause 3.2, be paid by the Subscriber to Amax on behalf of the Company
payment of which will satisfy the Subscriber's obligation to pay interest
to the Company under this clause.
13. GOVERNING LAW
- --- -------------
13.1 The law of this Agreement is the law of the New Zealand.
13.2 The Parties submit themselves to the non-exclusive jurisdiction of the
Courts of New Zealand.
13.3 For the purposes of service of documents of any kind on Amax, Amax hereby
appoints Bell Gully Buddle Weir of 171
-21-
Featherston Street, Wellington, New Zealand as Amax's representative in
New Zealand and Amax agrees with the Purchaser that service on Bell Gully
Buddle Weir (marked for the attention of: Mr. David McLay) of any notices
or documents required to be served on Amax shall be valid and effective
service on Amax of the notices and documents served.
14. SEVERABILITY
- --- ------------
If a provision of this Agreement is illegal or void then that provision
is severed and the other provisions of this Agreement remain in force.
15. VARIATION
- --- ---------
15.1 The variation of a provision of this Agreement is not effective unless in
writing and executed by the Parties.
15.2 A Party's consent to a departure from a provision of this Agreement by
another Party is not effective unless in writing and executed by the
consenting Party.
16. WAIVER
- --- ------
16.1 A Party's failure or delay to exercise power or right does not operate as
a waiver of that power or right.
16.2 The exercise of a power or right does not preclude:-
(a) its future exercise; or
(b) the exercise of any other power or right.
16.3 A waiver of a power or right is ineffective unless in writing and
executed by the waiving Party.
16.4 The waiver of a power or right is effective only in respect of the
specific instance to which it relates and for the specific purpose for
which it is given.
17. FURTHER ASSURANCE
- --- -----------------
Each Party must at its own cost from time to time do all things
(including executing all documents) necessary or desirable to give full
effect to this Agreement.
18. TIME OF THE ESSENCE
- --- -------------------
18.1 Time is of the essence of this Agreement.
-22-
18.2 The Parties may agree to vary any time requirement and any time
requirement so varied will be of the essence of this Agreement.
19. STAMP DUTY
- --- ----------
All stamp duty and other government imposts and fees payable on or in
connection with this Agreement, and all other documents and matters
referred to in this Agreement, are payable by the Subscriber when due.
20. NOTICES
- --- -------
20.1 A notice or other communication in connection with this Agreement by a
Party to another must be in writing and:-
(a) delivered by hand;
(b) sent to an address in New Zealand by registered post, postage
prepaid;
(c) sent to an address outside New Zealand by prepaid airmail; or
(d) sent by facsimile,
to the address or facsimile number for service described below.
20.2 A notice or other communication is sufficiently given if:-
(a) delivered by hand, upon delivery;
(b) mailed to an address in New Zealand, on actual delivery to that
address as evidenced by confirmation of the postage authority of
such delivery;
(c) airmailed to an address outside New Zealand, seven days after
posting;
(d) sent by facsimile on the day it is sent if this is a Business Day
and it is sent no later than 4.00 p.m. (receiver's time) and
otherwise on the next Business Day after being sent, if following
transmission the sender receives a transmission confirmation report
or if the sender's facsimile machine is not equipped to issue a
transmission confirmation report then upon the sender receiving
acknowledgement of receipt in legible form from the addressee.
-23-
20.3 A Party who receives a notice or other communication by facsimile must
immediately acknowledge receipt to the sender.
20.4 Each Party's address or facsimile number for service is:-
in the case of Amax and the Company:-
Name: Amax Gold Inc.
(Attention: President and General Counsel)
Address: 350 Indiana Street
Golden, Colorado 80401-5081
Facsimile No: (1303) 273 0708
in the case of the Subscriber:-
Name: ACM (New Zealand) Limited
(Attention: Mr. Steven Dean)
Address: C/- Poseidon Gold Limited
100 Hutt Street
Adelaide, South Australia, 5000
Facsimile No: (618) 232 0198
20.5 A party may change its address or facsimile number for service by giving
notice of that change to each other Party.
20.6 A certificate signed by or on behalf of a Party giving a notice or other
communication by any officer or employee of that Party stating the date
on which that notice or other communication was delivered or sent is
prima facie evidence of the date on which that notice or other
communication was delivered or sent.
21. CONFIDENTIALITY
- --- ---------------
21.1 For the purposes of this clause 21 "Confidential Information" means:
(a) all information concerning the negotiations and dealings between the
Parties connected with this Agreement;
(b) the existence of this Agreement;
-24-
(c) the terms and provisions contained in this Agreement;
(d) so far only as concerns Amax and, until the First Issue Date, the
Company, all information now or at any time hereafter known to Amax
concerning the business or affairs of the Company, AHNZ, ARNZ,
AGMNZ, MML or the Martha Hill Joint Venture which has not entered
the public domain (otherwise than by a breach of this clause).
21.2 Each Party undertakes to keep, and to cause all of its subsidiaries and
affiliates and its and its subsidiaries and affiliates officers and
employees to keep, all Confidential Information strictly confidential,
except to the extent that disclosure is permitted under this clause 21.
21.3 Confidential Information may only be disclosed:
(a) if and to the extent that the Subscriber (in the case of disclosure
by Amax at any time or by the Company before the First Issue Date)
or Amax (in any other case) has consented to that disclosure in
writing (which consent the Subscriber or Amax (as the case requires)
may give or withhold in its absolute discretion);
(b) if and to the extent that a Court of competent jurisdiction or
applicable law (including rules and regulation of the United States
Securities and Exchange Commission or its equivalent in any other
applicable jurisdiction or of a stock exchange on which shares of a
Party or of a related corporation of a Party are listed) compels
disclosure to be made but only after written notice is given to the
Subscriber or Amax (as the case requires) reasonably in advance of
disclosure specifying the requirements compelling disclosure and the
Confidential Information which it is proposed to disclose;
(c) in proceedings taken by a Party for the enforcement of this
Agreement;
(d) in the case of the Subscriber only to the participants in the Martha
Hill Joint Venture; or
(e) to a Party's employees, and professional advisers having a need to
know for the proper discharge of their duties, provided disclosure
is made on a confidential basis.
-25-
21.4 A Party seeking to rely on clause 21.3(b) must consult with the
Subscriber or Amax (as the case requires) concerning the wording of the
proposed disclosure and the manner thereof and must take reasonable
account of the Subscriber's or Amax's (as the case may require)
requirements.
21.5 The provisions of this clause 21 will remain binding indefinitely
notwithstanding that this Agreement may be at an end for any reason.
21.6 Each Party acknowledges that damages is not an adequate remedy if it
breaches or attempts to breach this clause 21 but that each other Party
shall be entitled to an injunction or other appropriate equitable relief.
22. INTERPRETATION
- --- --------------
22.1 The singular includes the plural and the plural includes the singular.
22.2 A reference to a gender includes a reference to each other gender.
22.3 A reference to a person includes a reference to a firm, corporation or
other corporate body.
22.4 A reference to a statute, regulation, or provision of a statute or
regulation ("statutory provision") includes a reference to:-
(a) that statutory provision as amended or re-enacted from time to time;
and
(b) a replacement of a statutory provision.
22.5 A reference to writing includes a reference to printing, typing and each
other method of producing words in a permanent visible form.
22.6 Where a word or expression is given a particular meaning, other parts of
speech and grammatical forms of that word or expression have
corresponding meanings.
22.7 A reference to a deed, agreement (including this Agreement) or other
instrument or any provision thereof shall be deemed to include a
reference to that deed, agreement, instrument or provision as varied,
amended, supplemented, novated, assigned or replaced from time to time.
-26-
22.8 Unless otherwise specified references to monetary sums are in New Zealand
Dollars.
22.9 A reference to a month is a reference to a calendar month (whether or not
beginning on the first day of any month).
22.10 The words "including", "such as" and "particularly" and similar
expressions do not imply any limitation.
22.11 Headings are for ease of reference and do not form part of or affect the
construction of this Agreement.
22.12 This Agreement binds in addition to the Parties, their respective legal
personal representatives and successors.
22.13 If an act must be done on a specified day which is not a Business Day
then the act must instead be done on the next Business Day.
22.14 References to time, unless otherwise specified, are to local time in
Wellington, New Zealand.
23. ASSIGNMENT
23.1 Except in accordance with this clause none of the Parties may assign the
benefit or burden of this Agreement.
23.2 After the First Issue Date ACMNZ may assign the benefit and burden of
this Agreement to any other company incorporated in New Zealand which is
a subsidiary of Poseidon Gold Limited and to which ACMNZ has assigned all
of the Preference Shares held by it immediately prior to the time the
assignment occurs.
23.3 An assignment by ACMNZ under clause 23.2 will only become effective upon
(a) the assignee covenanting to be bound by and to observe all of the
provisions of this Agreement binding on ACMNZ; and
(b) the parties other than Amax to any Deed of Guarantee or Deed of
Indemnity given in connection with this Agreement acknowledging to
Amax that they remain bound thereby as if references to ACMNZ in the
Deed of Guarantee or Deed of Indemnity were references to ACMNZ and
that assignee for the applicable periods.
EXECUTED on the date set out at the commencement of this Agreement.
- --------
-27-
EXECUTED for and on behalf of AMAX
GOLD, INC. by RICHARD DRIVER its
attorney under power of attorney
dated 2 June 1993 (who by his
signature warrants that he has no
notice of the revocation of that /s/ RC Driver
power of attorney) in the presence --------------------------------------
of: Attorney
/s/ John McLean
- --------------------------------------
Witness John McLean
Solicitor
Wellington
EXECUTED for and on behalf of ACM
(NEW ZEALAND) LIMITED by P.W.
O'Regan and R.A. Fisher two of its
attorneys under power of attorney /s/ PW O'Regan
dated _________, 1993 (who by their --------------------------------------
respective signatures warrant that Attorney
neither of them has notice of the
revocation of that power of /s/ RA Fisher
attorney) in the presence of: --------------------------------------
Attorney
/s/ A. Miller
- --------------------------------------
Witness Adrienne Miller
Solicitor
Wellington
EXECUTED for and on behalf of WAIHI
FINANCING LIMITED by Richard Clement
Driver its attorney under power of
attorney dated 3 June 1993 (who by
his signature warrants that he has
no notice of the revocation of that /s/ RC Driver
power of attorney) in the presence --------------------------------------
of: Attorney
/s/ John McLean
- --------------------------------------
Witness John McLean
Solicitor
Wellington