SECOND LOAN AGREEMENT
Between
NEDBANK LIMITED
(ACTING THROUGH ITS NEDBANK CAPITAL DIVISION)
and
THE ARM BROAD-BASED EMPOWERMENT TRUST
AN ORAL TRUST ESTABLISHED BY ORAL AGREEMENT ON 15 APRIL 2005 AND HEREIN
REPRESENTED BY ITS TRUSTEES BEING
NEDBANK LIMITED
(REPRESENTED BY ANTON TALJAARD AND CLIVE DONALD STEWART)
HARMONY GOLD MINING COMPANY LIMITED
(REPRESENTED BY NOMFUNDO QANGULE)
FRANK ABBOTT
and
DENEYS REITZ TRUSTEES (PROPRIETARY) LIMITED
(REPRESENTED BY LIONEL CHARLES SHAWE)
DENEYS | REITZ
ATTORNEYS
NOTARIAL CERTIFICATE
I, THE UNDERSIGNED,
MARK ROBERT KYLE
OF SANDTON IN THE GAUTENG PROVINCE OF THE REPUBLIC OF SOUTH AFRICA, NOTARY
PUBLIC BY LAWFUL AUTHORITY DULY ADMITTED AND SWORN, DO HEREBY CERTIFY AND ATTEST
UNTO ALL WHOM IT MAY CONCERN THAT I HAVE THIS DAY COLLATED AND COMPARED WITH THE
ORIGINAL THEREOF, THE COPY HERETO ANNEXED MARKED "A ", BEING:
"A" SECOND LOAN AGREEMENT BETWEEN NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK
CAPITAL DIVISION) AND THE ARM BROAD-BASED EMPOWERMENT TRUST AN ORAL TRUST
ESTABLISHED BY ORAL AGREEMENT ON 15 APRIL 2005 AND HEREIN REPRESENTED BY
ITS TRUSTEES BEING NEDBANK LIMITED (REPRESENTED BY ANTON TALJAARD AND CLIVE
DONALD STEWART), HARMONY GOLD MINING COMPANY LIMITED (REPRESENTED BY
NOMFUNDO QANGULE), FRANK ABBOTT AND DENEYS REITZ TRUSTEES (PROPRIETARY)
LIMITED (REPRESENTED BY LIONEL CHARLESSHAWE), DATED 15 APRIL 2005
AND I, THE SAID NOTARY, DO FURTHER CERTIFY AND ATTEST THAT THE SAME IS A TRUE
AND FAITHFUL COPY OF THE SAID ORIGINAL AND AGREES THEREWITH IN EVERY RESPECT. AN
ACT WHEREOF BEING REQUIRED, I HAVE GRANTED THESE PRESENTS UNDER MY NOTARIAL FORM
AND SEAL, TO SERVE AND AVAIL AS OCCASION SHALL OR MAY REQUIRE.
THUS DONE AND SIGNED AT SANDTON AFORESAID ON THIS THE 26TH DAY OF APRIL IN THE
YEAR TWO THOUSAND AND FOUR.
NOTARY PUBLIC
DENEYS REITZ ATTORNEYS
SANDTON
SECOND LOAN AGREEMENT
Between
NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CAPITAL DIVISION)
and
THE ARM BROAD-BASED EMPOWERMENT TRUST
AN ORAL TRUST ESTABLISHED BY ORAL AGREEMENT ON 15 APRIL 2005 AND HEREIN
REPRESENTED BY ITS TRUSTEES BEING
NEDBANK LIMITED
(REPRESENTED BY ANTON TALJAARD AND CLIVE DONALD STEWART)
HARMONY GOLD MINING COMPANY LIMITED
(REPRESENTED BY NOMFUNDO QANGULE)
FRANK ABBOTT
and
DENEYS REITZ TRUSTEES (PROPRIETARY) LIMITED
(REPRESENTED BY LIONEL CHARLES SHAWE)
DENEYS | REITZ
ATTORNEYS
TABLE OF CONTENTS
1. PARTIES.............................................................. 1
2. DEFINITIONS AND INTERPRETATION....................................... 1
3. INTRODUCTION......................................................... 22
4. EARLY TERMINATION EVENTS............................................. 22
5. PURPOSE.............................................................. 23
6. LOAN................................................................. 23
7. INTEREST............................................................. 24
8. REPAYMENT............................................................ 25
9. COLLECTION ACCOUNT................................................... 25
10. VOLUNTARY PREPAYMENT................................................. 26
11. MANDATORY PREPAYMENT................................................. 27
12. PAYMENTS............................................................. 28
13. REPRESENTATIONS AND WARRANTIES....................................... 29
14. POSITIVE UNDERTAKINGS................................................ 31
15. NEGATIVE UNDERTAKINGS................................................ 32
16. FINANCIAL INFORMATION................................................ 34
17. ARM SHARES COVENANT.................................................. 35
18. INCREASED/DECREASED COSTS............................................ 36
19. EVENTS OF DEFAULT.................................................... 38
20. BREAKAGE COSTS / GAINS............................................... 41
21. RENUNCIATION OF BENEFITS............................................. 42
22. CERTIFICATE OF INDEBTEDNESS.......................................... 42
23. DEFAULT INTEREST..................................................... 43
24. CESSION AND ASSIGNMENT............................................... 43
25. NOTICES AND DOMICILIA................................................ 44
26. GOVERNING LAW........................................................ 46
27. JURISDICTION......................................................... 46
28. SEVERABILITY......................................................... 46
29. GENERAL.............................................................. 47
30. COSTS................................................................ 48
SECOND LOAN AGREEMENT
1. PARTIES
1.1 The Parties to this Agreement are:
1.1.1 NEDBANK LIMITED (ACTING THROUGH ITS NEDBANK CAPITAL DIVISION);
1.1.2 THE ARM BROAD-BASED EMPOWERMENT TRUST AN ORAL TRUST ESTABLISHED BY ORAL
AGREEMENT ON 15 APRIL 2005 HEREIN REPRESENTED BY ITS TRUSTEES BEING:
1.1.2.1 NEDBANK LIMITED (REPRESENTED BY ANTON TALJAARD AND CLIVE DONALD
STEWART);
1.1.2.2 HARMONY GOLD MINING COMPANY LIMITED (REPRESENTED BY NOMFUNDO QANGULE);
1.1.2.3 FRANK ABBOTT; and
1.1.2.4 DENEYS REITZ TRUSTEES (PROPRIETARY) LIMITED (REPRESENTED BY LIONEL
CHARLES SHAWE).
1.2 The Parties agree as set out below:
2. DEFINITIONS AND INTERPRETATION
2.1 The headings to the clauses of this Agreement are for reference purposes
only and shall in no way govern or affect the interpretation of nor modify
nor amplify the terms of this Agreement nor any clause hereof.
Page 2.
2.2 Unless the context dictates otherwise, the words and expressions set forth
below shall bear the following meanings and cognate expressions shall bear
corresponding meanings:
2.2.1 "ADVANCE DATE" means the "Effective Date" as defined in the Sale of Shares
Agreement;
2.2.2 "AHJIC" means ARMGold Harmony Joint Investment Company (Proprietary)
Limited (Registration No. 2002/032163/07), a private company duly
incorporated according to the company laws of South Africa;
2.2.3 "AGREEMENT" means this Second Loan Agreement;
2.2.4 "APPLICABLE MARGIN" means 2,75% (two comma seven five percent) nacm;
2.2.5 "ARM" means African Rainbow Minerals Limited (Registration No.
1933/004580/06), a public company duly incorporated according to the
company laws of South Africa;
2.2.6 "ARM DISTRIBUTION" means any payment in respect of the ARM Shares by or on
behalf of ARM to the Borrower, by way of dividend, capital reduction
(including, but not limited to, any share repurchase), interest, principal,
fee, royalty or other distributions or payments whether or not made to the
shareholders of ARM generally;
2.2.7 "ARMI" means African Rainbow Minerals & Exploration Investments
(Proprietary) Limited (Registration No. 1997/020158/07), a private company
duly incorporated according to the company laws of South Africa;
Page 3.
2.2.8 "ARM SHARE PROCEEDS" means the proceeds of any ARM Distribution and all
proceeds received by the Borrower or to which the Borrower is or becomes
entitled, by virtue of the sale or other disposal of any ARM Shares or by
virtue of the vesting of any of the ARM Shares in any beneficiary of the
Borrower;
2.2.9 "ARM SHARES" means 28 614 740 (twenty-eight million six hundred and
fourteen thousand seven hundred and forty) ordinary par value shares of
R0,05 (five cents) each in the issued share capital of ARM listed on the
JSE and constituting 14% (fourteen percent) of the issued share capital of
ARM as at the Signature Date to be purchased by the Borrower from AHJIC
pursuant to the Sale of Shares Agreement;
2.2.10 "ARM SHARES MARKET VALUE" means on each day during the Term, the market
value of the Encumbered ARM Shares, being the Volume Weighted Average Price
of an ARM share on the JSE on that day in respect of the 10 (ten) Exchange
Business Days immediately preceding that day multiplied by the aggregate
number of Encumbered ARM Shares on that day;
2.2.11 "ARM SHARES TO OUTSTANDINGS RATIO" means:
2.2.11.1 the ARM Shares Market Value; divided by
2.2.11.2 the aggregate of the Second Facility Outstandings plus the Harmony
Option Outstandings which are due and payable to the Lender;
2.2.12 "ARREAR INTEREST RATE" means the greater of:
2.2.12.1 the Prime Rate plus 2% (two percent); and
Page 4.
2.2.12.2 the Repo Rate plus 2% (two percent);
2.2.13 "ASSIGNMENT AGREEMENT" means the written agreement concluded or to be
concluded between the Harmony, ARMI, AHJIC and the Borrower on or about the
Signature Date pursuant to which inter alia the Voting Agreement is amended
in certain respects and the Borrower agrees to be bound by the provisions
of the Voting Agreement;
2.2.14 "AUDITORS" means the Borrower's statutory auditors from time to time;
2.2.15 "BORROWER" means the trustees for the time being of an oral trust
established by oral agreement between Frank Abbott (as founder) and the
Lender, Harmony, Frank Abbott and Deneys Reitz Trustees (Proprietary)
Limited (each as trustees) an 15 April 2005 and known as the
"ARM Broad-Based Empowerment Trust";
2.2.16 "BREAKAGE COSTS" means such costs referred to in clause 20.1.1;
2.2.17 "BREAKAGE GAINS" means such amounts referred to in clause 20.1.2;
2.2.18 "BUSINESS DAY" means any day other than a Saturday, Sunday or an official
public holiday in South Africa in accordance with the Public Holidays Act,
1994;
2.2.19 "COLLECTION ACCOUNT" means the bark account to be opened and maintained
by the Borrower with the Lender in accordance with clause 9 of this
Agreement and clause 9 of the First Loan Agreement and any replacement
bank account from time to time;
2.2.20 "COMPANIES ACT" means the Companies Act, 1973;
Page 5.
2.2.21 "CPI" means the consumer price index for all expenditure groups:
Metropolitan and other urban areas (B2000=100) as published from time to
time by Statistics SA in Statistical Release PI041.1 provided that if,
after the Signature Date:
2.2.21.1 such index shall cease to be published; or
2.2.21.2 either the Lender or the Borrower should notify the other on reasonable
grounds that, due to a change in circumstances, the index is no longer
representative, then,
in any such circumstances, the Lender and the Borrower will use such other
official information or index calculating the rate of inflation as may be
available and acceptable to them, or failing such acceptance, then, for the
purposes of this Agreement, an alternative index shall be determined by a
majority decision of a panel of 3 (three) independent chartered accountants
of South Africa appointed by the Chief Economist of the Lender, which
determination, and any determination by such panel as to the date from
which any alternative index shall take effect, shall be binding upon the
Parties. The costs of obtaining such determination shall be borne by the
Borrower;
2.2.22 "DEED OF ADHERENCE" means the written deed entitled "Right of Pre-
Emption and Deed of Adherence" concluded or to be concluded amongst the
Lender, Harmony, ARMI and AHJ1C on or about the Signature Date;
2.2.23 "DISTRIBUTION" means any payment by or on behalf of the Borrower by way
of income or capital or other distribution or payments by or on behalf of
the Borrower to any of its beneficiaries;
Page 6.
2.2.24 "ENCUMBERED ARM SHARES" means, at any time and from time to time, such
number of the ARM Shares as are subject to the pledge under the First
Ranking Cession and Pledge;
2.2.25 "ENCUMBRANCE" means any mortgage, pledge, lien, assignment or cession
conferring security, hypothecation, security interest, preferential right
or trust arrangement or any other agreement or arrangement, the effect of
which is the creation of security;
2.2.26 "EVENT OF DEFAULT" means an event of default as set out in clause 19;
2.2.27 "EXCHANGE BUSINESS DAY" means any day that is a trading day on the JSE
but does not include a day on which trading on the JSE is scheduled to
close prior to its regular weekday closing time;
2.2.28 "FINAL DISCHARGE DATE" means the date which is the later of:
2.2.28.1 the First Facility Discharge Date; and
2.2.28.2 the Second Facility Discharge Date;
2.2.29 "FINAL REPAYMENT DATE" means the date which is the earlier of:
2.2.29.1 the 5th (fifth) anniversary of the Advance Date; and
2.2.29.2 the date upon which the Second Facility Outstandings become repayable
by the Borrower pursuant to the provisions of this Agreement;
2.2.30 "FIRST FACILITY DISCHARGE DATE" means the date upon which the First
Facility Outstandings have been fully and finally repaid and discharged;
Page 7.
2.2.31 "FIRST FACILITY OUTSTANDINGS" means, at any time and from time to time,
the aggregate of all amounts of principal, accrued and unpaid interest and
all and any other amounts due and payable, including but not limited to,
breakage costs, to the Lender under the First Loan Agreement;
2.2.32 "FIRST LOAN AGREEMENT" means the written agreement entitled "First Loan
Agreement" concluded or to be concluded between the Lender and the Borrower
on or about the Signature Date;
2.2.33 "FIRST RANKING CESSION AND PLEDGE" means the written cession and pledge
in security entitled "First Ranking Cession and Pledge" by the Borrower in
favour of the Lender dated on or about the Signature Date as security for
its obligations under this Agreement;
2.2.34 "FLOW OF FUNDS AGREEMENT" means the written agreement entitled "Flow of
Funds Agreement" concluded or to be concluded between the Lender, the
Borrower, AHJIC and Harmony on or about the Signature Date;
2.2.35 "GAAP" means Generally Accepted Accounting Practice in South Africa, as
the same may be revised from time to time;
2.2.36 "HARMONY" means Harmony Gold Mining Company Limited (Registration No.
1950/038232/06), a public company duly incorporated according to the
company laws of South Africa;
2.2.37 "HARMONY CALL OPTION" means the "Call Option" as defined in the Harmony
Option Agreement;
Page 8.
2.2.38 "HARMONY OPTION AGREEMENT" means the written agreement entitled "Harmony
Option Agreement" concluded or to be concluded between Harmony and the
Lender on or about the Signature Date;
2.2.39 "HARMONY PUT OPTION" means the "Put Option" as defined in the Harmony
Option Agreement;
2.2.40 "HARMONY OPTION OUTSTANDINGS" means, at any time and from time to time,
the aggregate of all amounts due and payable by Harmony to the Lender under
the Harmony Option Agreement pursuant to an exercise by:
2.2.40.1 the Lender of the Harmony Put Option; or
2.2.40.2 Harmony of the Harmony Call Option,
as the case may be;
2.2.41 "HARMONY UNDERTAKING" means the written undertaking by Harmony and AHJIC
in favour of the Lender dated on or about the Signature Date pursuant to
which Harmony undertakes that it will utilise a portion of the proceeds
payable to AHJIC in respect of the sale of the ARM Shares pursuant to the
Sale of Shares Agreement to repay in full on the Advance Date the principal
amount outstanding together with all amounts of accrued and unpaid interest
and all other amounts due and payable to the Lender pursuant to a loan
agreement between the Lender and Harmony dated 24 December 2004, in
accordance with the provisions of clause 12 of that loan agreement;
2.2.42 "INDEBTEDNESS" shall be construed so as to include any obligation
(whether incurred as principal or surety) for the payment or repayment
of money, whether present or future, actual or contingent;
Page 9.
2.2.43 "INDEXED" means in relation to any sum, that sum adjusted annually to
take account of year-on-year changes in the CPI since the Signature Date;
2.2.44 "INSOLVENCY EVENT" means in relation to any person, any of the following
events or circumstances:
2.2.44.1 a meeting is convened to consider or pass a resolution, an order or a
declaration is made, a petition is presented, legal proceedings are
commenced or any other step is taken for the liquidation, winding-up,
judicial management, curatorship or dissolution of such person's assets,
business or estate or with a view to a composition, assignment or
arrangement of such person's creditors;
2.2.44.2 such person is unable (or admits inability) to pay its debts generally
as they fall due or is, or admits to being, otherwise insolvent or stops,
suspends or threatens to stop or suspend payment of all or a material part
of its debts or makes a general assignment or any arrangement or
composition with or for the benefit of its creditors or a moratorium is
agreed or declared in respect of or affecting all or a material part of its
Indebtedness;
2.2.44.3 the issue of a certificate in terms of Section 346(3) of the Companies
Act or the lodging with any Master of the High Court or other officer in
the public service designated for such purpose by any Master of the High
Court of a copy of an application for the provisional or final, winding-up
or placing into judicial management, or any analogous or similar process,
of that person;
Page 10.
2.2.44.4 such person begins negotiations or takes any proceedings or other step
with a view to the general readjustment, rescheduling or deferral of its
Indebtedness (or any part thereof which it would otherwise be unable to pay
when due) or proposes to take any such step; or
2.2.44.5 any liquidator, curator, judicial manager or the like is appointed in
respect of such person or any material part of its assets or such person
requests any such appointment;
2.2.45 "INTEREST PERIOD" means each period of 91 (ninety-one) days during the
Term commencing on the Advance Date save that the final Interest Period
will be shortened to end on the Final Repayment Date;
2.2.46 "INTEREST RATE" means, in respect of each Interest Period, an interest
rate equal to the aggregate of JIBAR, the Applicable Margin and the Lender
Regulatory Costs;
2.2.47 "JIBAR" means, in respect of each Interest Period:
2.2.47.1 the quarter-year (91-day) Johannesburg Inter-Bank Agreed Rate as quoted
by SAFEX and published on the Quotation Date for deposits in a comparable
amount to that on which interest is to accrue and which appears on the
Reuters Screen SAFEY Page at 11:00 a.m. Johannesburg time on the Quotation
Date, expressed as a percentage and converted to a nacm rate; or
2.2.47.2 if the quarter-year (91-day) Johannesburg Inter-Bank Agreed Rate is not
quoted, the arithmetic mean (rounded upward to the nearest 4 (four) decimal
places) of the mid-market deposit rates for South African currency
deposits, as quoted on the respective money markets Reuters Page by the
Reference Banks at approximately
Page 11.
11:00 a.m. Johannesburg time on the Quotation Date, expressed as a
percentage and converted to a nacm rate;
2.2.48 "JSE" means the JSE Securities Exchange, South Africa;
2.2.49 "LENDER" means Nedbank Limited (Registration No. 1951/000009/06) (acting
through its Nedbank Capital division), a registered bank and public company
duly incorporated according to the banking and company laws of South
Africa;
2.2.50 "LENDER REGULATORY COSTS" means the holding costs of all liquid assets
and other reserving costs incurred by the Lender under the Banks Act, 1990
and regulations thereunder attributable to the Loan for each Interest
Period as quoted on the first day of each Interest Period by the Lender's
Treasury Department and expressed as a nacm rate, it being recorded, for
the avoidance of doubt, that the Lender Regulatory Costs as at the
Signature Date amount to 0,31% (zero comma three one percent) expressed as
a nacm rate;
2.2.51 "LOAN" means the aggregate principal amount for the time being
outstanding hereunder;
2.2.52 "LOAN AMOUNT" means the principal amount of R356 149 124 (Three Hundred
and Fifty-six Million One Hundred and Forty-nine Thousand One Hundred and
Twenty-four Rand);
2.2.53 "MATERIAL ADVERSE EFFECT" means a material adverse effect, in the
reasonable opinion of the Lender, on:
2.2.53.1 the ability of any Obligor to perform any or all of its material
obligations under the terms of any Transaction Document to which it is a
party; and/or
Page 12.
2.2.53.2 the validity or enforceability of any Transaction Document or the
rights or remedies of the Lender under any of the Transaction Documents;
2.2.54 "OBLIGOR" means:
2.2.54.1 the Borrower; and
2.2.54.2 Harmony,
and "OBLIGORS" means, as the context requires, both of them;
2.2.55 "PARTIES" means:
2.2.55.1 the Lender; and
2.2.55.2 the Borrower,
and "PARTY" means, as the context requires, either of them;
2.2.56 "PERMITTED DISTRIBUTIONS" means:
2.2.56.1 any Distributions by the Borrower of the ARM Shares or any vested
income rights or vested capital rights attributable or related to the ARM
Shares as expressly provided for in the Trust Deed; or
2.2.56.2 any Distribution made with the prior written consent of the Lender,
which consent shall not be unreasonably withheld or delayed;
2.2.57 "PERMITTED ENCUMBRANCE" means:
Page 13.
2.2.57.1 any Encumbrance created by operation of law; provided that the same is
discharged within 90 (ninety) days of its creation or, in the reasonable
opinion of the Lender, is being contested in good faith;
2.2.57.2 any Encumbrance created pursuant to the terms and conditions of the
Security Documents; or
2.2.57.3 any Encumbrance created with the prior written consent of the Lender;
2.2.58 "PERMITTED INDEBTEDNESS" means:
2.2.58.1 any Indebtedness incurred or permitted under any Transaction Document
or incurred pursuant to or for the purposes of giving effect to any
provision of any Transaction Document;
2.2.58.2 any Indebtedness not exceeding R100 000 (One Hundred Thousand Rand)
during any calendar year of the Borrower incurred in respect of the
administrative costs and expenses of the Borrower (including, without
limitation, in respect of auditing fees);
2.2.58.3 any Indebtedness incurred with the prior written consent of the Lender
which shall not be unreasonably withheld or delayed;
2.2.59 "PRIME RATE" means the prime overdraft rate of interest from time to time
publicly quoted as such by the Lender, calculated on a 365 (three hundred
and sixty-five) day factor, irrespective of whether or not the year is a
leap year, nominal annual compounded monthly in arrear, as certified by any
manager of the Lender, whose appointment as such shall not be necessary to
prove, which certificate shall serve as prima facie proof of its content;
Page 14.
2.2.60 "QUOTATION DATE" means, in relation to the determination of JIBAR for any
Interest Period, the first day of that Interest Period;
2.2.61 "REFERENCE BANKS" means the Lender, The Standard Bank of South Africa
Limited, FirstRand Bank Limited and Absa Bank Limited;
2.2.62 "REPO RATE" means on any particular day, the repurchase tender rate on
that day quoted by the South African Reserve Bank;
2.2.63 "SALE OF SHARES AGREEMENT" means the written agreement entitled "Sale of
Shares Agreement" concluded or to be concluded between Harmony, AHJIC and
the Borrower on or about the Signature Date;
2.2.64 "SECOND FACILITY DISCHARGE DATE" means the date upon which the Second
Facility Outstandings have been fully and finally repaid and discharged;
2.2.65 "SECOND FACILITY OUTSTANDINGS" means, at any time and from time to time
the aggregate of all amounts of principal, accrued and unpaid interest and
any other amounts due and payable, including but not limited to any
Breakage Costs, to the Lender under this Agreement;
2.2.66 "SECOND RANKING CESSION AND PLEDGE" means the written reversionary
cession and pledge in security entitled "Second Ranking Cession and Pledge"
by the Borrower in favour of the Lender dated on or about the Signature
Date as security for its obligations under the First Loan Agreement;
2.2.67 "SECURITY DOCUMENTS" means:
2.2.67.1 the First Ranking Cession and Pledge;
Page 15.
2.2.67.2 the Second Ranking Cession and Pledge; and
2.2.67.3 any further agreements or documents entered into at any time by or on
behalf of the Borrower or any other person as security for the Borrower's
obligations to the Lender under the Transaction Documents to which it is a
party, and which agreements or documents shall, to the extent that Harmony
is not a party thereto, be approved by Harmony, which approval shall not be
unreasonably withheld or delayed;
2.2.68 "SIGNATURE DATE" means the date of the signature of the Party last
signing this Agreement;
2.2.69 "SOUTH AFRICA" means the Republic of South Africa as constituted from
time to time;
2.2.70 "SUBORDINATION AGREEMENT" means the written agreement entitled
"Subordination Agreement" concluded or to be concluded between the
Borrower, Harmony and the Lender on or about the Signature Date;
2.2.71 "TERM" means the period from the Advance Date to the Second Facility
Discharge Date;
2.2.72 "TRANSACTION DOCUMENTS" means, collectively:
2.2.72.1 this Agreement;
2.2.72.2 the First Loan Agreement;
2.2.72.3 the Sale of Shares Agreement;
2.2.72.4 the Harmony Option Agreement;
Page 16.
2.2.72.5 the Security Documents;
2.2.72.6 the Harmony Undertaking;
2.2.72.7 the Subordination Agreement;
2.2.72.8 the Voting Agreement;
2.2.72.9 the Deed of Adherence;
2.2.72.10 the Flow of Funds Agreement;
2.2.72.11 the Assignment Agreement;
2.2.72.12 any other agreement or document that may be designated as a
Transaction Document for the purposes of this Agreement and the other
Transaction Documents by written agreement between Harmony, the Borrower
and the Lender; and
2.2.72.13 any written amendment to the agreements and documents referred to in
clauses 2.2.72.1 to 2.2.72.12, and which amendment shall, to the extent
that Harmony is not a party thereto, be approved by Harmony, which approval
shall not be unreasonably withheld or delayed,
and "TRANSACTION DOCUMENT" means, as the context requires, any one of them;
2.2.73 "TRUST DEED" means the trust deed of the Borrower contemplated by clause
4.1.1;
Page 17.
2.2.74 "TRUST EXPENDITURE" means all costs, expenses and fees incurred by the
Trust in giving effect to the transactions contemplated in the Transaction
Documents plus value-added tax, where applicable in a total amount not
exceeding R100 000 (One Hundred Thousand Rand) per calendar year of the
Borrower or such greater amount as may be approved by the Lender in writing
(but excluding the costs, expenses and fees contemplated by clauses 24.3
and 30.1);;
2.2.75 "VOLUME WEIGHTED AVERAGE PRICE" means for any period in respect of the
ARM Shares the aggregate consideration paid for all ordinary shares in the
share capital of ARM traded on the JSE on each Exchange Business Day during
that period divided by the total number of ordinary shares in the share
capital of ARM traded on the JSE on each Exchange Business Day during that
period and for the purpose of this definition an Exchange Business Day
shall include any Exchange Business Day regardless of whether or not any
ordinary shares in the share capital of ARM were traded on that day;
2.2.76 "VOTING AGREEMENT" means the written agreement entitled "Voting
Agreement" concluded or to be concluded between ARMI, AHJIC and Harmony on
16 February 2004.
2.3 Any reference in this Agreement to:
2.3.1 an "affiliate" means, in relation to any person, a subsidiary of that
person or a holding company of that person or any other subsidiary of that
holding company;
2.3.2 "assets" includes properties, revenues and rights of every description;
2.3.3 a "holding company" shall be construed in accordance with the Companies
Act;
Page 18.
2.3.4 a "clause" shall, subject to any contrary indication, be construed as a
reference to a clause hereof;
2.3.5 "continuing", in the context of an Event of Default, means:
2.3.5.1 where the Event of Default or its consequences are incapable of remedy
that Event of Default is deemed to be continuing unless it has been
expressly waived in writing by the Lender and any conditions of such waiver
have been fulfilled to the reasonable satisfaction of the Lender;
2.3.5.2 in any other case, that Event of Default is deemed to be continuing
unless and until either:
2.3.5.2.1 it has been expressly waived in writing by the Lender and any
conditions of such waiver have been fulfilled to the reasonable
satisfaction of the Lender; or
2.3.5.2.2 it has been remedied within the applicable remedy period by any
person;
2.3.6 the "control" by one entity of another entity shall be construed so as to
mean the power of the first such entity to direct the management and the
policies of the second such entity, whether through the ownership of voting
capital, by contract or by any other means;
2.3.7 "law" shall be construed as any law (including common or customary law) or
statute, constitution, decree, judgment, treaty, regulation, directive,
bye-law, order or any other legislative measure of any government,
supranational, local government, statutory or regulatory body or court;
Page 19.
2.3.8 "nacm" means nominal annual compounded monthly in arrears;
2.3.9 a "person" shall be construed as a reference to any person, firm, company,
trust, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal
personality) of two or more of the foregoing;
2.3.10 "repay" (or any derivative form thereof) shall, subject to any contrary
indication, be construed to include "prepay" or, as the case may be, the
corresponding derivate form thereof;
2.3.11 a "subsidiary" shall be construed in accordance with the Companies Act;
and
2.3.12 "tax" shall be construed so as to include any tax, levy, impost or other
charge of a similar nature (including, without limitation, any penalty or
interest payable in connection with any failure to pay or delay in paying
any of the same).
2.4 Unless inconsistent with the context or save where the contrary is
expressly indicated:
2.4.1 if any provision in a definition is a substantive provision conferring
rights or imposing obligations on any Party, notwithstanding that it
appears only in this interpretation clause, effect shall be given to it as
if it were a substantive provision of this Agreement;
2.4.2 when any number of days is prescribed in this Agreement, same shall be
reckoned exclusively of the first and inclusively of the last day unless
the last day falls on a day which is not a Business Day, in which case the
last day shall be the next succeeding Business Day;
Page 20.
2.4.3 in the event that the day for payment of any amount due in terms of this
Agreement should fall on a day which is not a Business Day, the relevant
day for payment shall be the immediately preceding Business Day;
2.4.4 in the event that the day for performance of any obligation to be
performed in terms of this Agreement should fall on a day which is not a
Business Day, the relevant day for performance shall be the next succeeding
Business Day;
2.4.5 any reference in this Agreement to an enactment is to that enactment as at
the Signature Date and as amended or re-enacted from time to time;
2.4.6 any reference in this Agreement to this Agreement or any other agreement
or document shall be construed as a reference to this Agreement or, as the
case may be, such other agreement or document as same may have been, or may
from time to time be, amended, varied, novated or supplemented;
2.4.7 no provision of this Agreement constitutes a stipulation for the benefit
of any person who is not a Party to this Agreement;
2.4.8 references to day/s, month/s or year/s shall be construed as Gregorian
calendar day/s, month/s or year/s; and
2.4.9 a time of day shall be construed as a reference to Johannesburg time.
2.5 Unless inconsistent with the context, an expression which denotes:
2.5.1 any one gender includes the other genders;
2.5.2 a natural person includes an artificial person and vice versa; and
Page 21.
2.5.3 the singular includes the plural and vice versa.
2.6 Where any term is defined within the context of any particular clause in
this Agreement, the term so defined, unless it is clear from the clause in
question that the term so defined has limited application to the relevant
clause, shall bear the same meaning as ascribed to it for all purposes in
terms of this Agreement, notwithstanding that that term has not been
defined in this interpretation clause.
2.7 The rule of construction that, in the event of ambiguity, the contract
shall be interpreted against the Party responsible for the drafting
thereof, shall not apply in the interpretation of this Agreement.
2.8 The expiration or termination of this Agreement shall not affect such of
the provisions of this Agreement as expressly provide that they will
operate after any such expiration or termination or which of necessity must
continue to have effect after such expiration or termination,
notwithstanding that the clauses themselves do not expressly provide for
this.
2.9 This Agreement shall be binding on and enforceable by the estates, heirs,
executors, administrators, trustees, permitted assigns or liquidators of
the Parties as fully and effectually as if they had signed this Agreement
in the first instance and reference to any Party shall be deemed to include
such Party's estate, heirs, executors, administrators, trustees,
successors-in-title, permitted assigns or liquidators, as the case may be.
2.10 The use of any expression in this Agreement covering a process available
under South African law such as winding-up (without limitation eiusdem
generis) shall, if any of the Parties to this Agreement is subject to the
law of any other jurisdiction, be construed as including any equivalent or
analogous proceedings under the law of such other jurisdiction.
Page 22.
2.11 Where figures are referred to in numerals and in words, if there is any
conflict between the two, the words shall prevail.
3. INTRODUCTION
3.1 The Borrower wishes to borrow the Loan Amount.
3.2 The Lender is willing to lend the Loan Amount to the Borrower for the
purposes set out in clause 5.1 upon the terms and conditions set out in
this Agreement.
4. EARLY TERMINATION EVENTS
4.1 If:
4.1.1 a written trust deed in form and substance reasonably satisfactory to the
Lender, which reduces to writing the oral agreement reached in establishing
the Trust has not been entered into and lodged with the Master of the High
Court within 30 (thirty) days after the Signature Date; or
4.1.2 the Master of the High Court has not issued letters of authority to the
trustees of the Borrower within 30 (thirty) days after the date of
lodgement of the Trust Deed with the Master of the High Court as
contemplated by clause 4.1.1,
then:
4.1.3 the Borrower shall forthwith pay to the Lender all of the Second Facility
Outstandings; and
Page 23.
4.1.4 this Agreement shall automatically terminate upon the Lender's receipt of
the amounts payable in terms of clause 4.1.3.
4.2 The provisions of clause 4.1 are without prejudice to any rights which the
Lender may have under any of the other Transaction Documents.
5. PURPOSE
5.1 The Borrower shall use the Loan Amount for the purposes of funding:
5.1.1 a portion of the purchase price payable by the Borrower for the ARM Shares
in accordance with the terms of the Sale of Shares Agreement; and
5.1.2 the duties, costs and expenses incurred in connection with the purchase by
the Borrower of the ARM Shares and in connection with the implementation of
the transactions contemplated by the Transaction Documents.
5.2 Without prejudice to the obligations of the Borrower under clause 5.1, the
Lender shall not be obliged to concern itself with the application of any
sum borrowed by the Borrower pursuant to this Agreement.
6. LOAN
6.1 The Lender hereby agrees to lend to the Borrower, which hereby agrees to
borrow, the Loan Amount with effect from (and inclusive of) the Advance
Date upon the terms and conditions set out in this Agreement.
6.2 The Loan Amount shall be loaned and advanced to the Borrower by the Lender
on the Advance Date by the Lender making payment of the Loan
Page 24.
Amount, without deduction or set-off, as provided for in the Flow of Funds
Agreement.
6.3 The Borrower acknowledges that the advance by the Lender of the Loan Amount
in accordance with the provisions of clause 6.2 shall constitute a valid
and proper discharge by the Lender of its obligation to lend and advance
the Loan Amount to the Borrower in terms of this Agreement.
7. INTEREST
7.1 The Loan shall bear interest during each Interest Period during the Term at
the Interest Rate.
7.2 Interest on the Loan during the Term shall:
7.2.1 accrue at the Interest Rate on a day to day basis;
7.2.2 be calculated on the actual number of days elapsed in each Interest Period
(inclusive of the first day of such Interest Period but exclusive of the
last day of such Interest Period) and, for the purposes of calculation, be
based on a year of 365 (three hundred and sixty-five) days, irrespective of
whether the year in question is a leap year; and
7.2.3 subject to clause 7.3, to the extent not paid, be capitalised on the last
day of each Interest Period.
7.3 Notwithstanding anything to the contrary herein contained, the Borrower
shall be obliged to pay to the Lender, on the last Business Day of each
month, such amount of accrued interest as is necessary to ensure that the
amount of accrued interest does not exceed 80% (eighty percent) of the loan
at that date.
Page 25.
8. REPAYMENT
8.1 The Borrower shall, subject to the provisions of clauses 10, 11 and 19,
repay the Second Facility Outstandings to the Lender on the Final Repayment
Date.
8.2 The Borrower shall not repay all or any parts of the Loan except at the
times and in the manner expressly provided for in this Agreement and shall
not be entitled to re-borrow any amounts repaid.
9. COLLECTION ACCOUNT
9.1 The Borrower shall establish and shall maintain the Collection Account with
the Lender in the name of the Borrower within a period of 30 (thirty) days
after the Advance Date.
9.2 The Borrower shall procure that the mandates and operating procedures for
the Collection Account shall be in accordance with the provisions of this
Agreement and to the reasonable satisfaction of the Lender.
9.3 The Borrower shall either procure that any ARM Share Proceeds are paid
directly into the Collection Account or, where it is not possible to
procure such direct payment, immediately upon receipt of any ARM Share
Proceeds pay the same into the Collection Account.
9.4 Subject to the provisions of the Transaction Documents, no withdrawal or
transfer may be made from the Collection Account other than the ARM Share
Proceeds which the Borrower shall use only for the purpose of making the
following payments in the following order of priority:
9.4.1 first, to pay the Trust Expenditure;
9.4.2 second, to pay interest accrued under this Agreement;
Page 26.
9.4.3 third, to pay interest accrued under the First Loan Agreement;
9.4.4 fourth, to pay in full any amounts of principal (including capitalised
interest) and all other amounts due and payable under this Agreement; and
9.4.5 fifth, to pay in full any amounts of principal (including capitalised
interest) and all other amounts due and payable under the First Loan
Agreement.
9.5 The restrictions contained in any of the Transaction Documents on the
withdrawal of funds from the Collection Account shall not affect the
obligations of the Borrower to make all payments required to be made to the
Lender on the due date for payment in accordance with the Transaction
Documents.
9.6 Neither the ability of the Borrower to make any withdrawal from the
Collection Account in accordance with this Agreement nor any such
withdrawal shall be construed as a waiver by the Lender of any of its
rights or remedies under the Transaction Documents or affect (to the extent
possible) any of the Encumbrances created pursuant to the Transaction
Documents.
10. VOLUNTARY PREPAYMENT
10.1 At any time prior to the Final Repayment Date, the Borrower may, by giving
to the Lender not less than 5 (five) Business Days prior written notice to
that effect, prepay without penalty all or any part of the Second Facility
Outstandings at any time during the Term, provided that no such prepayments
shall be in an amount of less than R1 000 000 (One Million Rand) (or an
integral multiple thereof) or the Second Facility Outstandings, whichever
is the lesser provided that the preceding restrictions shall not apply to
any
Page 27.
prepayment funded by a BEE Capital Contribution in accordance with the
terms of the Transaction Documents.
10.2 Any notice of prepayment pursuant to clause 10.1 shall:
10.2.1 be irrevocable;
10.2.2 specify a date upon which such prepayment is to be made which shall be
the last day of an Interest Period;
10.2.3 specify the amount of the prepayment; and
10.2.4 oblige the Borrower to make such prepayment on such date.
11. MANDATORY PREPAYMENT
11.1 Notwithstanding the provisions of clauses 8, 9 and 10 the Borrower shall be
obliged, during the Term to utilise 100% (one hundred percent) of all ARM
Share Proceeds to pay the Trust Expenditure and thereafter the Second
Facility Outstandings to the Lender in an amount equal to any remaining
balance of the ARM Share Proceeds or, if less, in the amount of the Second
Facility Outstandings, by no later than 5 (five) Business Days after the
date of receipt by the Borrower of any such ARM Share Proceeds.
11.2 Save as may be expressly provided for in clause 9.4 and any of the
Transaction Documents, the Borrower shall not utilise any of the ARM Share
Proceeds to pay the First Facility Outstandings prior to the Second
Facility Discharge Date.
Page 28.
12. PAYMENTS
12.1 All payments to be made by the Borrower to the Lender in terms of this
Agreement shall be made in Rands at or before 12h00 on the due date for
payment in immediately available funds free from set-off, withholding
taxes, costs, charges, expenses or any other deductions to the Lender's
bank account with the following details:
12.1.1 Bank: Nedbank Limited;
12.1.2 Account Name: Nedbank Capital - Project Administration;
12.1.3 Branch: 100 Main Street;
12.1.4 Branch Code: 19-79-05;
12.1.5 Account Number: 1979 373 078.
12.2 Any payment made by the Borrower in terms of this Agreement shall be
appropriated first towards the payment of any fees, costs, charges or
expenses due and payable to the Lender and, without prejudice to the
Lender's right to claim such fees, costs, charges or expenses, as notified
by the Lender to the Borrower not less than 5 (five) days before such
amounts are due and payable, thereafter to the payment of any accrued and
unpaid interest, and thereafter to the repayment of the Loan.
12.3 The Borrower shall not have the right to defer, adjust or withhold any
payment due to the Lender in terms of or arising out of this Agreement or
to obtain deferment of judgment for such amount or any execution of such
judgment by reason of any set-off or counter claim due to any other
contractual or delictual claims or causes of whatsoever nature or howsoever
arising.
Page 29.
13. REPRESENTATIONS AND WARRANTIES
13.1 The Borrower hereby represents and warrants in favour of the Lender on the
Signature Date, on each day between the Signature Date and the Advance Date
and on the Advance Date that:
13.1.1 it is a trust duly established and existing under the laws of South
Africa with the power and authority to enter into and to exercise its
rights and perform its obligations under the Transaction Documents to which
it is a party;
13.1.2 it has procured the taking of all necessary corporate and other action to
authorise the execution of the Transaction Documents to which it is a
party;
13.1.3 each Transaction Document to which it is a party is legal and binding on,
and enforceable against, it in accordance with its terms;
13.1.4 the provisions of each Transaction Document to which it is a party are
not in material conflict with, and will not constitute a breach of the
provisions of, any other agreement or undertaking which is binding on it;
13.1.5 no limitation on the powers of the Borrower to borrow will be exceeded as
a result of the borrowings under this Agreement;
13.1.6 no limitation of the powers of the Borrower to create security will be
exceeded as a result of the creation of the security in accordance with the
terms of the Security Documents to which it is a party;
Page 30.
13.1.7 there is no dispute, litigation or proceeding pending or threatened
against the Borrower which could reasonably be expected to have a Material
Adverse Effect;
13.1.8 no Insolvency Event has occurred in respect of the Borrower;
13.1.9 its obligations under each Transaction Document to which it is a party
will rank at least pari passu with all of it's other unsecured and
unsubordinated Indebtedness;
13.1.10 no Event of Default has occurred and is continuing;
13.1.11 it will use the Loan Amount only for the purposes set out in clause 5.
13.2 Each of the representations and warranties given by the Borrower in terms
of clause 13.1 shall:
13.2.1 prima facie be deemed to be a representation of fact inducing the Lender
to enter into the Transaction Documents to which it is a party;
13.2.2 be presumed to be material unless the contrary is proved;
13.2.3 insofar as any of the warranties is promissory or relates to a future
event, be deemed to have been given as at the due date for fulfilment of
the promise or for the happening of the event, as the case may be; and
13.2.4 be a separate warranty and in no way be limited or restricted by
reference to or inference from the terms of any other warranty.
Page 31.
14. POSITIVE UNDERTAKINGS
The Borrower hereby agrees and undertakes that, until the Second Facility
Discharge Date, it shall:
14.1 obtain, comply with the terms of and do all that is necessary to maintain
in full force and effect all authorisations, approvals, licences and
consents required in or by the laws and regulations of South Africa to
enable it lawfully to enter into and perform its obligations under the
Transaction Documents to which it is a party or to ensure the legality,
validity, enforceability or admissibility in evidence in South Africa of
the Transaction Documents to which it is a party;
14.2 notify the Lender of the occurrence of any event forthwith upon becoming
aware thereof, which results in or may reasonably be expected to result in
any of the representations and warranties contained in clause 13 being
untrue;
14.3 deliver to the Lender all documents and other information reasonably
required by the Lender to enable it to comply with its obligations under
the Financial Intelligence Centre Act, 2001 within a period of 30 (thirty)
days after the Advance Date;
14.4 procure that the Collection Account is opened with the Lender within a
period of 30 (thirty) days after the Advance Date;
14.5 promptly inform the Lender in writing of the occurrence of any Event of
Default forthwith upon becoming aware thereof and from time to time, if so
requested by the Lender in writing, confirm to the Lender in writing that,
save as previously notified to the Lender or as notified in such
confirmation, no such Event of Default has occurred and/or is continuing;
14.6 do all things to maintain its existence in full force and effect;
Page 32.
14.7 duly comply with all of its obligations under each Transaction Document to
which it is a party;
14.8 subject to the provisions of clause 15.3, maintain its ownership of, and
full, good and proper title to, the ARM Shares (except to the extent the
same are subject to a Permitted Encumbrance);
14.9 take all reasonable steps to ensure that material accuracy and completeness
of all information supplied to the Lender in connection with this Agreement
during the Term; and
14.10 keep proper records and permit inspection thereof and ensure that the
Lender will, on not less than 2 (two) Business Days' prior written notice
(other than in circumstances where an Event of Default has occurred and is
continuing, in which event no notice shall be required), be allowed to have
access to the assets, books and records of the Borrower and to inspect the
same during normal business hours.
15. NEGATIVE UNDERTAKINGS
The Borrower hereby agrees and undertakes that, until the Second Facility
Discharge Date, it shall not:
15.1 save for Permitted Encumbrances, create or permit to subsist or arise any
Encumbrance over all or any of its present or future revenues or assets;
15.2 make any loans, grant any credit or give any guarantee or indemnity to or
for the benefit of any person or otherwise voluntarily assume any
liability, whether actual or contingent, in respect of any obligation of
any other person;
15.3 with the exception of a general offer to shareholders or an expropriation
in terms of section 311 and/or section 440K of the Companies Act or the
sale or
Page 33.
realisation of the ARM Shares in accordance with the terms of this
Agreement and/or any Transaction Document, sell, lease, transfer or
otherwise dispose of or grant any right of pre-emption or right of first
refusal in respect of all or any of the ARM Shares, or vest any ARM Share
in any beneficiary of the Borrower:
15.3.1 prior to the date on which the Trust Deed is executed by the parties
thereto, lodged with the Master of the High Court and the letters of
authority in respect thereof have been issued to the trustees of the
Borrower by the Master of the High Court, without the prior written consent
of the Lender and subject to such conditions as the Lender may reasonably
impose for the provision of such consent; and
15.3.2 on or after the date contemplated by clause 15.3.1, other than in the
manner permitted by the Trust Deed,
provided that should the ARM Shares be subject to any such a general offer
to shareholders or any such expropriation, the Borrower shall utilise the
proceeds of such disposal of the ARM Shares to first pay the Second
Facility Outstandings and thereafter to pay the First Facility Outstandings
to the Lender;
15.4 acquire or have any assets other than the donation by the founder of the
Borrower, the ARM Shares, the ARM Share Proceeds and such other assets as
may be contemplated by this Agreement and the Trust Deed without the
Lender's prior written consent which shall not be unreasonably withheld or
delayed;
15.5 enter into, or agree to enter into, any agreements other than the
Transaction Documents to which it is a party without the prior written
consent of the Lender which shall not be unreasonably withheld or delayed;
Page 34.
15.6 conduct any business other than in accordance with the terms of the
Transaction Documents;
15.7 amend, vary, cancel or terminate, or agree to any amendment, variation,
cancellation or termination of, any Transaction Document to which it is a
party nor waive, or agree to any waiver of, any of its rights, privileges
or benefits under the Transaction Documents to which it is a party without
the prior written consent of the Lender, which consent shall not be
unreasonably withheld or delayed;
15.8 amend, vary or alter, or allow any resolution or oral agreement of its
trustees, founder and/or beneficiaries to be passed for the amendment,
variation or alteration of the Trust without the prior written consent of
the Lender, which consent shall not be unreasonably withheld or delayed;
15.9 save as contemplated by the Transaction Documents, appoint or constitute
any income or capital beneficiaries or grant any further interests in its
trust assets without the prior written consent of the Lender, which consent
shall not be unreasonably withheld or delayed;
15.10 save for Permitted Indebtedness, incur any Indebtedness;
15.11 save for Permitted Distributions, make or pay any Distribution.
16. FINANCIAL INFORMATION
16.1 The Borrower shall:
16.1.1 as soon as the same become available, but in any event within 90 (ninety)
days after the end of each of its financial years during the Term, deliver
a copy of its audited annual financial statements to the Lender for such
financial year; and
Page 35.
16.1.2 on the written request of the Lender, furnish the Lender with such
information about its financial condition as the Lender may reasonably
require.
16.2 The Borrower shall ensure that:
16.2.1 each set of financial statements delivered by it pursuant to clause
16.1.1 is prepared in accordance with GAAP; and
16.2.2 each set of financial statements delivered by it pursuant to clause
16.1.1 has been audited by the Auditors and signed by 2 (two) trustees of
the Borrower.
17 ARM SHARES COVENANT
17.1 If, at any time during the Term, the ARM Shares to Outstandings Ratio is
less than 1,5 (one comma five) times, the Lender shall be entitled to
require the Borrower, by written notice to the Borrower, in which case the
Borrower shall be obliged, to pay such amount of the Second Facility
Outstandings to the Lender within 30 (thirty) days after the date of such
written notice so as to ensure that the ARM Shares to Outstandings Ratio
shall be not less than 1,5 (one comma five) times immediately after the
implementation of the action referred to in this clause 17.1.
17.2 Should the ARM Shares to Outstandings Ratio at any time during the
aforesaid 30 (thirty) day period be less than 1,35 (one comma three five)
times, and should the Borrower have failed to restore the ARM Shares to
Outstandings Ratio to 1,35 (one comma three five) times or higher within 5
(five) days after receipt of written notice from the Lender to do so, the
Lender shall be entitled to exercise its rights under clause 19.2.
Page 36.
18. INCREASED/DECREASED COSTS
18.1 If at any time or times during the period commencing on the Signature Date
and ending on the Second Facility Discharge Date:
18.1.1 any new law, ruling or regulation as promulgated, given or adopted by the
government of South Africa;
18.1.2 there are any changes to any present or future law, ruling or regulation
by the government of South Africa;
18.1.3 there are any changes in the interpretation or administration of any law,
ruling or regulation by any relevant monetary or fiscal authority having
jurisdiction over the Lender;
18.1.4 there are any amendments to the Banks Act, 1990;
18.1.5 there is any compliance by the Lender with any directive or request,
whether or not having the force of law, from any monetary or fiscal
authority having jurisdiction over the Lender;
18.1.6 there are any changes in commercial practice or legislation which affect
the reserving or asset requirements of the Lender,
which is of general application applicable to all banks in South Africa and
which would or does:
18.1.7 subject the Lender to any taxes, duties or other charges in respect of
this Agreement or change the basis of taxation of the Lender in respect of
the payments of capital or interest/fees payable to the Lender in respect
of the provision by the Lender of funding in respect of this Agreement
Page 37.
(except for changes in the rate of taxation on the overall net income of
the Lender); or
18.1.8 impose, or modify or deem applicable any reserve, special deposit or
similar requirements against assets of, deposits with or for the account
of, or credit extended by the Lender to the Borrower or reduce the
requirements in respect of any such reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by the Lender to the Borrower; or
18.1.9 not arise solely as a result of the Lender's gross negligence;
18.1.10 impose on the Lender any other obligation or condition affecting this
Agreement,
and the result of any of the above is to increase the costs (the "INCREASED
COSTS") to the Lender of making or maintaining any advance in terms of this
Agreement or to reduce any amount or amounts received or receivable by the
Lender under this Agreement, then the Borrower shall pay to the Lender on
demand and while such circumstances continue, such amount or amounts which
will compensate the Lender for such additional cost or reduced receipts.
18.2 If there is any decrease in any costs (the "DECREASED COST") in respect of
which the Borrower would have been obliged to pay an amount to the Lender
under clause 18.1 if such cost had constituted an Increased Cost and in
respect of which the Lender directly benefits, then the Lender acting in
good faith shall pay to the Borrower, promptly after it becomes aware of
it, the amount of such Decreased Cost provided that such Decreased Cost is
directly attributable to this Agreement (and identifiable as such) and the
Lender is
Page 38.
satisfied that such Decreased Cost will not have to be reimbursed to any
other person in any way.
18.3 If required by the Borrower, the auditors of the Lender shall certify
amounts referred to in clause 18.1. The costs of the certification shall be
borne by the Lender if the Lender's calculation of the cost of such
additional cost or reduced receipts exceeds that as certified by such
auditors and by the Borrower if the result of the Lender's calculation is
equal to or less than that as certified by such auditors.
19. EVENTS OF DEFAULT
19.1 Each of the events set out below is an Event of Default (whether or not
caused by any reason outside the control of the Borrower):
19.1.1 any Obligor fails to pay any sum due by it under any Transaction Document
to which it is a party at the time stipulated and does not remedy such
failure within 3 (three) days after receipt of notice calling upon it to do
so, and in the manner provided for in this Agreement unless such failure is
due to the banking payment and/or settlement system by which that Obligor
is obliged to make such payment and such payment is made within 3 (three)
Business Days of its due date; or
19.1.2 any Obligor commits any breach or omits to observe or cause to be
observed any of the obligations or undertakings expressed to be assumed by
it under or in relation to any of the Transaction Documents to which it is
a party (other than a failure to pay any sum when due) and such breach or
omission is not remedied (if capable of remedy) within 10 (ten) Business
Days of receipt by that Obligor of a written notice from the Lender
requiring remedy thereof; or
Page 39.
19.1.3 any representation or warranty made or deemed to be made or repeated by
any Obligor in or pursuant to any of the Transaction Documents to which it
is a party or in any notice, certificate or statement referred to or
delivered under any Transaction Document, is or proves to be incorrect and
such incorrect representation, warranty, notice, certificate or statement
has a Material Adverse Effect; or
19.1.4 any Indebtedness of any Obligor in excess of R10 000 000 (Ten Million
Rand) is not paid when due or becomes due and payable, unless such claim is
disputed and such dispute is resolved in favour of that Obligor within a
period of 14 (fourteen) days after such claim has been made, or any
creditor of any Obligor becomes entitled to declare any such Indebtedness
due and payable, prior to the date when it would otherwise have become due
and payable or any guarantee or indemnity given by any Obligor in respect
of Indebtedness is not honoured when due and called upon; or
19.1.5 a creditor for an amount in excess of R10 000 000 (Ten Million Rand)
attaches or takes possession of, or execution or other process is levied or
enforced against, any material asset of any Obligor; or
19.1.6 the security constituted by any Security Document ceases to confer the
security it created when originally granted or is not validly created as
contemplated in the relevant Security Document or any of the Security
Documents (or any material provision thereof) ceases to be legal, valid,
binding and enforceable; or
19.1.7 an Insolvency Event occurs in relation to any Obligor; or
19.1.8 any steps are taken to enforce any Encumbrance securing a debt exceeding
an amount of R10 000 000 (Ten Million Rand) over all or
Page 40.
any part of the assets and/or undertaking of any Obligor and such steps are
not successfully defended or stopped by such Obligor within a period of 30
(thirty) days after the commencement of such steps; or
19.1.9 any Obligor suspends or ceases or threatens to suspend or cease to carry
on its business; or
19.1.10 all or a material part of the undertakings, assets, rights or revenues
of, or shares or other ownership interests in, any Obligor are seized,
nationalised, expropriated or compulsorily acquired by or under the
authority of any government; or
19.1.11 it becomes unlawful at any time for any Obligor to perform all or any of
its material obligations under any Transaction Document and the Parties are
unable to agree on alternative arrangements within 10 (ten) Business Days
of the Lender notifying the Borrower of such illegality; or
19.1.12 any Obligor repudiates any Transaction Document to which it is a party
or does or causes or permits to be done any actual thing evidencing an
intention to repudiate any Transaction Document to which it is a party; or
19.1.13 any judgement for an amount exceeding Rl0 000 000 (Ten Million Rand) is
taken against any Obligor, and that Obligor fails within 15 (fifteen)
Business Days of it becoming aware thereof either to satisfy same or to
take steps and thereafter actively to pursue such steps to successfully
appeal or set aside such judgement; or
19.1.14 any event or series of events occurs or circumstance arises which has or
may in the future be likely to have a Material Adverse Effect; or
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19.1.15 the ARM Shares to Outstandings Ratio is at any time less than 1,35 (one
comma three five) times and is not increased to at least 1,35 (one comma
three five) times as contemplated by clause 17.2.
19.2 Upon, or at any time after, the occurrence of an Event of Default, the
Lender may, without prejudice to any other rights it may have in terms of
this Agreement or at law, by written notice to the Borrower:
19.2.1 declare all or any part of the Second Facility Outstandings to be
immediately due and payable whereupon the Second Facility Outstandings
shall become immediately due and payable; and/or
19.2.2 enforce any or all of its rights under the Security Documents if the
Second Facility Outstandings or any part thereof have not been paid
timeously in accordance with clause 19.2.1.
20. BREAKAGE COSTS / GAINS
20.1 If, for any reason any portion of the Second Facility Outstandings is
repaid or becomes due and payable on any date other than on the last day of
an Interest Period, there shall be:
20.1.1 payable by the Borrower to the Lender, on the occurrence of such event,
in addition to any other amounts payable in terms of this Agreement, the
amount (if any) by which:
20.1.1.1 the present value of such amount, calculated by discounting such amount
from the last day of the Interest Period during which such amount is repaid
or becomes due and payable as the case may be to the date of calculation
(excluding the last day and including the first day) (the "CALCULATION
PERIOD") at 0.1% (zero point one percent) below the Lender's Swap Curve bid
rate which appears
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on the Reuters screen NDIRS page at llh00 Johannesburg time on the date of
calculation interpolated for a corresponding payment for a period which
corresponds to the Calculation Period, expressed as a nacm yield rate,
exceeds:
20.1.1.2 the present value of such amount, calculated by discounting such amount
for the Calculation Period at the aggregate of the then-applicable JEBAR
Rate (converted to a nacm rate) and the costs referred to in clause 18; or
20.1.2 deducted from the amount owing to the Lender by the Borrower (or, if no
such amount is owing, payable by the Lender to the Borrower), the amount
(if any) by which the amount calculated in terms of clause 20.1.1.2 exceeds
that calculated in terms of clause 20.1.1.1,
such amount, in either case, to be calculated and certified by a manager of
the Lender, which certificate shall serve as prima facie proof of its
contents.
21 RENUNCIATION OF BENEFITS
The Borrower renounces all benefits of the exceptions of "no value
received", "non numeratae pecuniae ", "non causa debiti", and "errore
calculi", the meaning and effect of which it declares it understands.
22. CERTIFICATE OF INDEBTEDNESS
A certificate signed by any director or manager of the Lender (whose
appointment need not be proved) as to the existence of and the amount of
Indebtedness by the Borrower to the Lender, that such amount is due and
payable, the amount of interest accrued thereon and as to any other fact,
matter or thing relating to the Borrower's Indebtedness to the Lender in
terms of this Agreement, shall be sufficient proof of the contents and
correctness thereof for the purposes of provisional sentence,
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summary judgement or any other proceedings, shall be valid as a liquid
document for such purpose and shall in addition, be prima facie proof for
purposes of pleading or trial in any action instituted by the Lender
arising herefrom.
23. DEFAULT INTEREST
Interest calculated at the Arrear Interest Rate shall accrue on the
outstanding balance of all amounts due and payable but unpaid by the
Borrower from time to time in terms of this Agreement. Such interest shall
be calculated on a daily basis from the due date of each such overdue
amount to date of actual payment thereof (both before and after judgement
(if any)) and shall be compounded monthly in arrears and shall be paid by
the Borrower on demand.
24. CESSION AND ASSIGNMENT
24.1 The Lender shall be entitled to cede, assign or delegate all, or any part
of, its rights and/or obligations, as the case may be, under this Agreement
or under any Security Document to:
24.1.1 the Reference Banks and/or any of their affiliates without the consent of
the Borrower; and/or
24.1.2 any other person with the prior written consent of the Borrower, which
consent shall not be unreasonably withheld or delayed,
subject to a maximum aggregate number of 10 (ten) assignees.
24.2 To the extent that any such cession, assignment or delegation results in a
splitting of claims against the Borrower, the Borrower hereby consents to
such splitting of claims.
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24.3 In the event of any such cession, assignment or delegation, the Lender (the
"EXISTING LENDER") shall procure that an inter-creditor agent is appointed
to represent itself and such person(s) (the "NEW LENDER") on such terms and
conditions as may be agreed between the Existing Lender, the New Lender and
such appointed inter-creditor agent and subject to the prior written
approval of such terms by the Borrower, which shall not be entitled to
withhold such approval unnecessarily. The Borrower shall bear any fees or
expenses charged by such inter-creditor agent up to a maximum amount of
R150 000 (One Hundred and Fifty Thousand Rand) (Indexed) per annum.
25. NOTICES AND DOMICILIA
25.1 NOTICES
25.1.1 Each Party chooses the address set out opposite its name below as its
address to which any written notice in connection with this Agreement may
be addressed.
25.1.1.1 LENDER: 4th Floor, F Block
135 Rivonia Road
Sandown
SANDTON
Telefax No. : (011)294 8421
Attention: Head of Specialised Finance
25.1.1.2 BORROWER: c/o African Rainbow Minerals Limited
ARM House
29 Impala Road
Chislehurston
SANDTON
Telefax No. : (011)883 5609
Attention: The Company Secretary
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25.1.2 Any notice or communication required or permitted to be given in terms of
this Agreement shall be valid and effective only if in writing but it shall
be competent to give notice by telefax transmitted to its telefax number
set out opposite its name above.
25.1.3 Either Party may by written notice to the other Party change its chosen
address and/or telefax number for the purposes of clause 25.1.1 to any
other address(es) and/or telefax number, provided that the change shall
become effective on the 14th (fourteenth) day after the receipt of the
notice by the addressee.
25.1.4 Any notice given in terms of this Agreement shall:
25.1.4.1 if delivered by hand be deemed to have been received by the addressee
on the date of delivery;
25.1.4.2 if transmitted by facsimile be deemed to have been received by the
addressee on the 1st (first) Business Day after the date of transmission,
unless the contrary is proved.
25.1.5 Notwithstanding anything to the contrary herein contained, a written
notice or communication actually received by a Party shall be an adequate
written notice or communication to it, notwithstanding that it was not sent
to or delivered at its chosen address and/or telefax number.
25.2 DOMICILIA
25.2.1 Each of the Parties chooses its physical address referred to in clause
25.1 as its domicilium citandi et executandi at which documents in legal
proceedings in connection with this Agreement may be served.
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25.2.2 Either Party may by written notice to the other Party change its
domicilium from time to time to another address, not being a post office
box or a poste restante, in South Africa; provided that any such change
shall only be effective on the 14th (fourteenth) day after deemed receipt
of the notice by the other Party pursuant to clause 25.1.4.
26. GOVERNING LAW
The entire provisions of this Agreement shall be governed by and construed
in accordance with the laws of South Africa.
27. JURISDICTION
The Parties hereby irrevocably and unconditionally consent to the
non-exclusive jurisdiction of the Witwatersrand Local Division of the High
Court of South Africa (or any successor to that division) in regard to all
matters arising from this Agreement.
28. SEVERABILITY
Each provision in this Agreement is severable from all others,
notwithstanding the manner in which they may be linked together or grouped
grammatically, and if in terms of any judgment or order, any provision,
phrase, sentence, paragraph or clause is found to be defective or
unenforceable for any reason, the remaining provisions, phrases, sentences,
paragraphs and clauses shall nevertheless continue to be of full force. In
particular, and without limiting the generality of the aforegoing, the
Parties acknowledge their intention to continue to be bound by this
Agreement notwithstanding that any provision may be found to be
unenforceable or void or voidable, in which event the provision concerned
shall be severed from the other provisions, each of which shall continue to
be of full force.
Page 47.
29. GENERAL
29.1 This document constitutes the sole record of the agreement between the
Parties in regard to the subject matter thereof.
29.2 No Party shall be bound by any express or implied term, representation,
warranty, promise or the like, not recorded herein.
29.3 No addition to, variation or consensual cancellation of this Agreement and
no extension of time, waiver or relaxation or suspension of any of the
provisions or terms of this Agreement shall be of any force or effect
unless in writing and signed by or on behalf of all the Parties.
29.4 No latitude, extension of time or other indulgence which may be given or
allowed by any Party to any other Party in respect of the performance of
any obligation hereunder or enforcement of any right arising from this
Agreement and no single or partial exercise of any right by any Party shall
under any circumstances be construed to be an implied consent by such Party
or operate as a waiver or a novation of, or otherwise affect any of that
Party's rights in terms of or arising from this Agreement or estop such
Party from enforcing, at any time and without notice, strict and punctual
compliance with each and every provision or term hereof.
29.5 The Parties undertake at all times to do all such things, to perform all
such acts and to take all such steps and to procure the doing of all such
things, the performance of all such actions and the taking of all such
steps as may be open to them and necessary for or incidental to the putting
into effect or maintenance of the terms, conditions and import of this
Agreement.
29.6 Save as is specifically provided in this Agreement, no Party shall be
entitled to cede, assign or delegate any of its rights or obligations under
this Agreement without the prior written consent of the other Parties
affected by
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such transfer of rights or obligations, which consent may not unreasonably
be withheld or delayed.
30. COSTS
30.1 The Borrower and Harmony shall, in equal shares, bear the costs of and
incidental to the negotiation, preparation and execution of the Transaction
Documents and (save to the extent expressly indicated to the contrary in
any Transaction Document) the implementation of the transactions
contemplated therein, in accordance with the terms of the First Loan
Agreement.
30.2 All legal costs incurred by either Party in consequence of any default of
the provisions of this Agreement by the other Party shall be payable on
demand by the defaulting Party on the scale as between attorney and own
client and shall include collection charges, the costs incurred by the
non-defaulting Party in endeavouring to enforce such rights prior to the
institution of legal proceedings and the costs incurred in connection with
the satisfaction or enforcement of any judgment awarded in favour of the
non-defaulting Party in relation to its rights in terms of or arising out
of this Agreement.
SIGNED at SANDTON on this the 15th day of APRIL 2005.
For and on behalf of
NEDBANK LIMITED (ACTING THROUGH
ITS NEDBANK CAPITAL DIVISION)
/s/ Kevin Ryder
------------------------------------------
Name: Kevin Ryder
Capacity: Authorised Signatory
Who warrants his authority hereto
/s/ Mark Saunders Tyler
------------------------------------------
Name: Mark Saunders Tyler
Capacity: Authorised Signatory
Who warrants his authority hereto
Page 49.
SIGNED at SANDTON on this the 15th day of APRIL 2005.
For and on behalf of
NEDBANK LIMITED (ACTING THROUGH
ITS NEDBANK CAPITAL DIVISION) (AS
TRUSTEE OF THE BORROWER)
/s/ Bardley Maxwell
----------------------------------------
Name: Barley Maxwell for Anton Taljaard
Capacity: Authorised Signatory
Who warrants his authority hereto
/s/ Clive Stewart
----------------------------------------
Name: Clive Stewart
Capacity: Authorised Signatory
Who warrants his authority hereto
SIGNED at SANDTON on this the 15th day of APRIL 2005.
For and on behalf of
HARMONY GOLD MINING COMPANY
LIMITED (AS TRUSTEE OF THE BORROWER)
/s/ Nomfundo Qangule
----------------------------------------
Name: Nomfundo Qangule
Capacity: Director
Who warrants her authority hereto
SIGNED at SANDTON on this the 15th day of APRIL 2005.
/s/ FRANK ABBOTT
----------------------------------------
FRANK ABBOTT (AS TRUSTEE OF THE
BORROWER)
Page 50.
SIGNED at SANDTON on this the 14th day of April 2005.
For and on behalf of
DENEYS REITZ TRUSTEES
(PROPRIETARY) LIMITED (AS TRUSTEE OF
THE BORROWER)
/s/ Lionel Charles Shawe
----------------------------------------
Name: Lionel Charles Shawe
Capacity: Authorised Signatory
Who warrants his authority hereto