DATED 4 June 1993
BETWEEN
POSEIDON GOLD LIMITED
(ACN 007 511 006)
AND
AMAX GOLD INC.
------------------------------
DEED OF GUARANTEE
------------------------------
------------------------------
BELL GULLY BUDDLE WEIR
SOLICITORS
WELLINGTON & AUCKLAND
DCS:234
THIS DEED is made on the 4th day of June 1993
BETWEEN
(1) POSEIDON GOLD LIMITED (ACN 007 511 006) a duly incorporated company having
its principal office at 100 Hutt Street, Adelaide, South Australia
("Poseidon"); and
(2) AMAX GOLD INC. a duly incorporated company having its principal office at
350 Indiana Street, Golden, Colorado, United States of America ("AMAX").
RECITALS
A. Poseidon's wholly owned subsidiary, ACM (New Zealand) Ltd ("ACMNZ") has
entered into a Share Subscription Agreement dated 4 June 1993 with Amax and
WAIHI FINANCING LIMITED ("Waihi") whereby ACMNZ has agreed from time to
time to subscribe to and pay for redeemable preference shares in the
capital of Waihi.
B. ACMNZ has also entered into a Deed of Indemnity dated 4 June 1993 ("Deed of
Indemnity") with AMAX in which it has agreed to indemnify, hold harmless
and defended AMAX from all claims and losses as described therein.
C. In consideration for AMAX entering into the Share Subscription Agreement,
the contemporaneous Share Sale Agreement and Deed of Indemnity, Poseidon
has agreed to guarantee the performance of ACMNZ's obligations under the
Share Subscription Agreement and Deed of Indemnity.
NOW THIS DEED WITNESSES AND IT IS HEREBY AGREED AND DECLARED as follows:
GUARANTEE
1. POSEIDON hereby unconditionally and irrevocably guarantees to AMAX the
timely performance of all obligations due AMAX and prompt payment of all moneys
payable to AMAX under or pursuant to the Share Subscription Agreement and Deed
of Indemnity.
LIABILITY OF POSEIDON
2. IF ACMNZ shall default in the performance of its obligations or payment of
all or any of the payments guaranteed under clause 1 then, upon demand by AMAX,
Poseidon shall forthwith unconditionally perform or pay, or procure to be
performed or
-2-
paid unconditionally, to AMAX those obligations or payments in respect of which
such default has been made.
NON-PREJUDICE OF GUARANTEE
3. THE liability of Poseidon under this Guarantee shall not be abrogated
prejudiced or affected by any of the following:
3.1 the granting of time credit or any indulgence or other concession to
ACMNZ by AMAX, or any compounding compromise release abandonment waiver
variation relinquishment or renewal of any documents of title assets or any
rights of AMAX against Poseidon or any other guarantor, or anything done or
omitted or neglected to be done by AMAX in the exercise of the authorities,
powers and discretion vested in it by this Guarantee, or any other dealing
matter or thing to which Poseidon has consented or ratified which but for
this provision might operate to abrogate prejudice or affect this
Guarantee;
3.2 any other person joining in this or giving any similar guarantee;
3.3 the liquidation, winding up, bankruptcy, receivership, creditors' or
official or statutory management, composition or arrangement with creditors
of ACMNZ or any other guarantor of ACMNZ or the death of any other
guarantor of ACMNZ;
3.4 the sale, restructuring, or transfer of share capital in ACMNZ;
3.5 the fact that the payments guaranteed or any part thereof may not be
or may cease to be recoverable or that ACMNZ or any other person purported
to be primarily liable to pay such sums of money may be discharged from all
or any of their respective obligations to make such payment for any reasons
other than that payment has been made or is not required to be made by
operation of an express provision in the Share Subscription Agreement, the
Share Sale Agreement, or the Deed of Indemnity or the expiration of the
Share Subscription Agreement or the Deed of Indemnity according to its own
terms;
3.6 any variation or assignment of the Share Subscription Agreement or
transfer of any or all of the Preference Shares issued pursuant to the
Share Subscription Agreement;
3.7 AMAX obtaining judgment against ACMNZ.
-3-
GUARANTEE A DIRECT OBLIGATION
4. THIS Guarantee shall be a direct obligation to AMAX and not merely as a
surety and shall be treated as being in addition to and not in substitution for
or collateral to any other right which AMAX has or may have under or by virtue
of the Share Subscription Agreement, the Share Sale Agreement or the Deed of
Indemnity or any other agreement and in particular shall be independent of any
other agreement to the intent that this Guarantee may be enforced against
Poseidon without first having recourse to any such other agreement or rights and
without taking steps or proceeding against ACMNZ and such liability shall not be
affected or diminished by any of the matters hereinbefore mentioned or by any
other act indulgence or omission consented to or ratified by Poseidon which but
for this present provision would have operated to release Poseidon wholly or
partly from its liability hereunder to AMAX.
CONTINUING GUARANTEE
5. THIS Guarantee shall be a continuing guarantee and accordingly shall be
irrevocable and shall remain in full force and effect until the whole of all
payments to be made by ACMNZ have been paid in full and all performance of ACMNZ
satisfied under the Share Subscription agreement and the Deed of Indemnity.
DISCRETION AS TO EXERCISE OF RIGHTS
6. AS regards Poseidon AMAX may determine from time to time whether it shall
enforce or refrain from enforcing this Guarantee and may from time to time make
any arrangement or compromise with ACMNZ in relation to the payments and
performance guaranteed or any part thereof which AMAX shall consider expedient.
PAYMENTS
7. ALL money from time to time received by AMAX from any person or any source
(including any dividends upon the liquidation of ACMNZ or from any other person
or from the realisation of any security) and capable of being applied by AMAX in
reduction of ACMNZ's indebtedness in relation to the payments guaranteed shall
be regarded as a payment in gross without any right on the part of Poseidon to
stand in the place of AMAX in respect of or to claim the benefit of any money so
received as against ACMNZ until the whole of the guaranteed payments have been
paid or satisfied in full and unconditionally, so that in the event of Poseidon
going into liquidation AMAX shall be entitled to prove against it for the total
indebtedness of ACMNZ in relation to the payments guaranteed.
-4-
8. ALL payments under this Guarantee shall be made without any set-off,
counterclaim or equity and free from, clear of and without deduction for any
taxes whatsoever, present or future. If Poseidon is compelled by the law of any
applicable jurisdiction, or by an order of any regulatory authority in such
jurisdiction, to withhold or deduct at source any sum or sums in respect of
taxes, duties, levies, imposts or charges from any amount payable to AMAX under
this Guarantee, Poseidon shall pay such additional amount or amounts as may be
necessary to ensure that the amount received by AMAX shall equal the full amount
payable under this Guarantee.
PROOF IN ACMNZ'S LIQUIDATION
9. IN the event of liquidation of ACMNZ, Poseidon shall not prove in such
liquidation in competition with AMAX and Poseidon hereby irrevocably authorises
AMAX on its behalf to prove all moneys which Poseidon has paid hereunder which
have not been repaid to Poseidon by ACMNZ and to retain and to carry to a
suspense account and appropriate at the discretion of AMAX any amount received
until AMAX shall have received one hundred cents in the dollar in respect of the
guaranteed payments. Poseidon hereby waives in favour of AMAX all rights
whatever against ACMNZ and any other party or their or its estate and assets so
far as necessary to give effect to anything contained in this guarantee.
RESTRUCTURING OF POSEIDON GROUP
10. IN the event that any restructuring by the Poseidon Gold Group (being that
group of companies of which Poseidon Gold Limited is the holding company)
results in circumstances where AMAX reasonably considers that ACMNZ may not be
able to perform and satisfy its obligations under the Deed of Indemnity,
Poseidon will procure, forthwith after receipt of notice from AMAX, that another
member of the Poseidon Group, satisfactory to AMAX acting reasonably, provides
AMAX with a guarantee, indemnity, letter of comfort or other similar arrangement
as may be agreed between such member of the Poseidon Gold Group and AMAX at the
time, to restore AMAX to the same position as it would have been in but for such
restructuring.
VOIDABLE PAYMENT
11. IF any payment in respect of the payments guaranteed made to AMAX (or to
any Receiver or other person appointed by AMAX) by or on behalf of ACMNZ shall,
on the subsequent liquidation, corporate reorganisation or other similar event
of or affecting ACMNZ be avoided or set aside by law, such payment shall not be
considered as discharging or diminishing the liability of Poseidon therefor and
this Guarantee shall continue to apply as
-5-
if such payment had at all times remained owing by Poseidon or ACMNZ as the case
may be.
SUSPENSION OF RIGHTS
12. POSEIDON shall in respect of any sums paid by it hereunder and in respect
of any other rights which may accrue howsoever to it in respect of any sum so
paid rank and be entitled to enforce the same only after the payments guaranteed
have been duly paid to AMAX and satisfied in full, and in particular (both
without limiting the generality of this clause) until such time:
12.1 Poseidon shall not unless requested in writing by AMAX make or suffer
to be made any claim in competition with the claim of AMAX in respect of
the payments guaranteed; and
12.2 AMAX shall not be under any obligation to marshall in favour of
Poseidon any of the funds or assets that AMAX may be entitled to receive or
have claim upon.
INVALIDITY OF PROVISION
13. IF at any time any one or more of the provisions hereof is or becomes
invalid, illegal or unenforceable in any respect under any law, the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby. All other provisions of any statute shall
to the maximum extent permissible by law be deemed to be negatived or varied to
the extent that they are inconsistent with the terms and conditions herein
expressed.
INDEMNITY
14. ANY of the payments guaranteed which may not be recoverable pursuant to the
foregoing provisions on the basis of a guarantee shall nevertheless be
recoverable from Poseidon by AMAX on the basis of an indemnity and as a
separate, continuing and primary obligation. Poseidon hereby indemnifies AMAX
for and against any loss expenses or damage AMAX may sustain by reason of
ACMNZ's failure to promptly pay any of the payments guaranteed or by reason of
the non-performance by ACMNZ of any of the performance guaranteed pursuant to
the Share Subscription Agreement or Deed of Indemnity or by reason of the Share
Subscription Agreement or Deed of Indemnity being or becoming void or
unenforceable by AMAX for any reason other than expiration according to its own
terms PROVIDED THAT Poseidon shall not be liable for consequential loss or
damage except where the loss or damage arises directly out of the wilful act or
omission or gross negligence of Poseidon, AND PROVIDED FURTHER THAT if any of he
matters referred to in clause 17 of the Deed of Indemnity occur other than by
reason of lack of or inadequacy of power or authority of ACMNZ, inadequacy
-6-
of execution by ACMNZ or incapacity of ACMNZ, Poseidon's liability shall be
limited to liability for ACMNZ's failure to comply with clauses 11 and 17 of the
Deed of Indemnity.
COSTS
15. POSEIDON agrees to pay AMAX all costs and expenses (including costs as
between solicitor and own client) sustained or incurred by AMAX in obtaining or
attempting to obtain payment of all or any of the moneys for which Poseidon may
from time to time be liable under the provisions of this Deed or enforcing or
attempting to enforce any remedy or power expressed or implied herein.
GOVERNING LAW
16. THIS guarantee shall be governed by and construed in accordance with New
Zealand law and the parties hereby submit to the non-exclusive jurisdiction of
the Courts of New Zealand and hereby waive any defence to the enforcement of
judgments rendered on such disputes. For the purposes of service of any
documents of any kind on Poseidon, Poseidon hereby appoints ACM (New Zealand)
Limited as Poseidon's representative in New Zealand and Poseidon agrees with
AMAX that service on ACM (New Zealand) Limited marked for the attention of Mr.
Cook of any notices or documents required to be served on Poseidon shall be
valid and effective service of such notices or documents on Poseidon.
INTERPRETATION
17. IN the interpretation of this Deed unless the context otherwise requires:
17.1 the singular number shall include the plural number and vice versa,
and words importing any gender include all other genders;
17.2 references to "person" include any company, association, society,
firm or other institution whether incorporated or unincorporated.
EFFECTIVE DATE
18. THIS Deed shall be in effect from such time as and for so long as the Deed
of Indemnity shall be in effect.
-7-
IN WITNESS WHEREOF this Deed has been executed on the date first above written.
EXECUTED for and on behalf of )
POSEIDON GOLD LIMITED by being )
SIGNED, SEALED AND DELIVERED )
by PAUL W. O'REGAN and )
ROBERT FISHER, two of its ) /s/ PW O'Regan
attorneys under power of ) /s/ R Fisher
attorney dated 31 May 1993 )
(who by their execution )
warrant that neither of them )
has notice of the revocation )
of power of attorney) in )
the presence of: )
/s/ A Miller
- ------------------------------
Witness Adrienne Miller
Occupation: Solicitor
Address: Wellington
EXECUTED for and on behalf of )
AMAX GOLD, INC. by being )
DELIVERED by RICHARD CLEMENT )
DRIVER its attorney under )
power of attorney dated 2 June ) /s/ RC Driver
1993 (who by his signature )
warrants that he has no )
notice of the revocation of )
power of attorney) in the )
presence of: )
/s/ John McLean
- -----------------------------
Witness John McLean
Occupation: Solicitor
Address: Wellington
CERTIFICATE OF NON-REVOCATION OF
POWER OF ATTORNEY
I, RICHARD CLEMENT DRIVER, of Kenthurst, New South Wales, Australia, HEREBY
CERTIFY:
1. That by deed dated 2 June 1993 Amax Gold Inc. appointed me its attorney on
the terms and conditions set out in such deed; and
2. That at the date of this certificate I have not received any notice or
information of the revocation of such appointment.
SIGNED at Wellington this 4th day of June 1993.
/s/ RC Driver
- ----------------------------------------
Signature of attorney giving certificate
CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY
--------------------------------------------------
I, PAUL W. O'REGAN of Wellington, Solicitor, hereby certify that by Power of
Attorney dated 31 May 1993 POSEIDON GOLD LIMITED appointed me as its attorney on
and subject to the conditions set out in the said Power of Attorney and that, as
at the date hereof, I have not received any notice or information of the
revocation of the said Power of Attorney by any means whatsoever.
SIGNED at Wellington this 4th day of June 1993.
/s/ PW O'Regan
- -------------------------------
Paul W. O'Regan
CERTIFICATE OF NON-REVOCATION OF POWER OF ATTORNEY
--------------------------------------------------
I, ROBERT FISHER of Auckland, Solicitor, hereby certify that by Power of
Attorney dated 31 May 1993 POSEIDON GOLD LIMITED appointed me as its attorney on
and subject to the conditions set out in the said Power of Attorney and that, as
at the date hereof, I have not received any notice or information of the
revocation of the said Power of Attorney by any means whatsoever.
SIGNED at Wellington this 4th day of June 1993.
/s/ R Fisher
- ----------------------------
Robert Fisher