UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or
15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2015.
Commission File Number 001-32399
BANRO CORPORATION
(Translation of registrants name into English)
1 First Canadian Place
100 King Street West, Suite
7070
Toronto, Ontario, Canada
M5X
1E3
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will
file annual reports under cover Form 20-F or Form 40-F
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Form 20-F [
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Form 40-F [X] |
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Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]
Note: Regulation S-T Rule 101(b)(1) only permits the
submission in paper of a Form 6-K if submitted solely to provide an attached
annual report to security holders.
Indicate by check mark if the registrant is submitting the Form
6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]
Note: Regulation S-T Rule 101(b)(7) only permits the
submission in paper of a Form 6-K if submitted to furnish a report or other
document that the registrant foreign private issuer must furnish and make public
under the laws of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrants home country), or under the
rules of the home country exchange on which the registrants securities are
traded, as long as the report or other document is not a press release, is not
required to be and has not been distributed to the registrants security
holders, and, if discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on EDGAR.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
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BANRO CORPORATION |
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/s/ Kevin
Jennings
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Date: March 12, 2015 |
Kevin Jennings |
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Chief Financial Officer |
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INDEX TO EXHIBITS
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Form 51-102F3
Material Change Report
MATERIAL CHANGE REPORT UNDER SECTION 7.1(1) OF
NATIONAL
INSTRUMENT 51-102 AND SECTION 5.2 OF
MULTILATERAL INSTRUMENT 61-101
1. |
Name and Address of
Company |
Banro Corporation (the
Company)
1 First Canadian Place
100 King Street West, Suite
7070
Toronto, Ontario
M5X 1E3, Canada
2. |
Date of Material Change |
February 27, 2015.
The news release attached hereto as
Schedule A announcing the material change described herein was released
through Marketwired on February 27, 2015.
4. |
Summary of Material Change |
The material change is described in the
Company's news release attached hereto as Schedule A, which news release is
incorporated herein.
5. |
Full Description of Material Change |
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5.1 |
Full Description of Material
Change |
No information other than that provided
in Item 4 above is presently available.
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5.2 |
Disclosure for Restructuring
Transactions |
Not applicable.
6. |
Reliance on subsection 7.1(2) of National Instrument
51-102 |
Not applicable.
Not applicable.
Kevin Jennings, Senior Vice President
and Chief Financial Officer (416) 366-2221
March 9, 2015.
1
Schedule "A"
Banro Announces US$100 Million Financing and
Provides
Brief Operations & Corporate Update;
Commences Consent
Solicitation for Certain Amendments to Note Indenture
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Banro closes first tranche of financing for US$20 million
on Twangiza gold forward sale, with US$80 million balance of financing
expected to close in April. |
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Namoya agglomeration drum delivered to site, installed
and in operation. |
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Banro commences consent solicitation to implement certain
amendments to its Note Indenture. |
Toronto, Canada February 27, 2015
Banro Corporation ("Banro" or the Company) (NYSE MKT - "BAA"; TSX - "BAA")
announces that it has signed definitive agreements for two gold forward sale
transactions relating to the Twangiza mine and a gold streaming transaction
relating to the Namoya mine, providing total gross proceeds to the Company of
US$100 million. The purchasers (each, a Purchaser) under these financing
transactions are funded in part by investment funds managed by Gramercy Funds
Management LLC (Gramercy) which have committed to fund the US$40 million in
gold forward sales and US$50 million of the gold stream, for a total committed
funding of US$90 million. The Company and its financial advisor, CIBC World
Markets Inc., will seek to obtain commitments for the remainder of the gold
stream transaction prior to the expected close in April.
Each of the two forward sale transactions provide for the
prepayment by the Purchaser of US$20 million for its purchase of 22,248 ounces
of gold from the Twangiza mine, with the gold deliverable over three years, at
618 ounces per month (i.e. 1,236 ounces per month for the two Twangiza forward
sales). The first US$20 million forward sale closed today. The second US$20
million forward sale is expected to close in April, with the definitive
agreement for this transaction having been signed today. The forward sales may
be terminated at any time upon payment to the Purchaser of a one-time
termination amount that would result in the Purchaser receiving an amount equal
to an IRR of 20%. The terms of the forward sales also include a gold floor price
mechanism whereby, if the gold price falls below US$1,100 per ounce in any
month, additional ounces are deliverable to ensure a realized gold price of
US$1,100 per ounce for that month.
The streaming transaction provides for the payment by the
Purchaser of a deposit in the amount of US$60 million and the delivery to the
Purchaser over time of 10% of the life-of-mine gold production from the Namoya
mine (or any other projects located within 20 kilometres from the current Namoya
gold mine). The ongoing payments to Namoya upon delivery of the gold are US$150
per ounce. The streaming transaction is expected to close in April, with the
definitive agreement for this transaction having been signed today.
As previously reported, we have been working on several
alternatives to address Banros liquidity situation and believe we have now put
in place the best option for the Company, commented Banro Board Chairman,
Richard Brissenden. We believe the Twangiza forward sales and Namoya streaming
arrangement, along with stabilized production at Twangiza and increasing
production at Namoya to commercial levels, will put Banro in a solid position to
achieve its longer term growth objectives.
The contemplated use of proceeds from the Twangiza forward
sales and Namoya streaming arrangement include:
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payment of the upcoming interest amount due on the
Companys outstanding 10% senior secured notes (the Notes) issued
pursuant to the Companys note indenture dated March 2, 2012 (the Note
Indenture);
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repayment of the notes issued under the liquidity
backstop facility announced in August 2014;
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payment of accrued dividends on the gold-linked preferred
shares issued in April 2013;
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significant reduction in the Companys accounts payable;
and
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providing funds for ongoing capital requirements and
other general corporate purposes, including the purchase of equipment and
materials to bring the Namoya mine to commercial production rates and the
drilling of known ore-bearing structures at Namoya with high potential for
short term resource growth. Banros intent is to conduct additional
limited drilling in areas at Namoya which can begin to contribute to
production before the end of Q4 2015.
The completion of the second US$20 million Twangiza forward
sale and the Namoya streaming transaction is subject to certain amendments (the
Indenture Amendments) being made to the Companys Note Indenture and related
Collateral Trust Agreement in order to secure the gold delivery obligations
under both forward sales and the streaming transaction by way of a Priority
Lien and a Parity Lien, respectively, within the meaning of the Note
Indenture. The Indenture Amendments require the consent of the holders of a
majority of the aggregate principal amount of the Notes outstanding under the
Note Indenture. The Company will be soliciting the consent of Note holders to
the Indenture Amendments pursuant to a consent solicitation statement to be
mailed to Note holders shortly. In connection with this planned solicitation,
Gramercy and funds under management by BlackRock Investment Management (UK)
Limited, which together with Gramercy control 52.4% of the aggregate principal
amount of the Notes, have entered into support agreements with the Company
pursuant to which they have agreed to consent to the Indenture Amendments in
respect of their Notes.The Companys financial advisor, CIBC World Markets Inc.,
will be acting as solicitation agent with respect to the planned
solicitation.
Copies of the main transaction documents for the Twangiza
forward sales and Namoya streaming transactions will be filed on SEDAR at
www.sedar.com and EDGAR at www.sec.gov.
The previously announced transaction with Gold Holding Ltd. has
been terminated due to non-performance on the part of Gold Holding. Banro is
currently reviewing potential actions with respect to the termination of this
agreement.
The current financing transaction has been downsized from the
original US$121 million with Gold Holding due to the decision not to make the
estimated US$20 million investment in expanding the Namoya CIL circuit and the
agreement, in principle, by certain suppliers to settle their accounts by way of
gold forward sale arrangements. Brissenden commented: Management believes that
the US$100 million of capital is more than sufficient to meet the Companys
liquidity needs over the next two years as it completes the Namoya ramp-up, with
a sufficient cash cushion to absorb normal course volatility in gold prices and
production.
2
Operations Update
Banro is pleased to report
that delivery and installation of the agglomeration drum required for the
conversion of the Namoya processing plant to a more traditional fully
agglomerated heap leach operation was completed earlier this month. The drum is
operating well in its early commissioning mode. It will significantly enhance
the quality of the heap leach feed and will improve leach recovery rates. With
heap leach operations taking several months of continuous percolation to fully
recover the leachable gold, the full benefits of the improvements to the heap
leach circuit are expected to build up during the second quarter of 2015. Banro
anticipates reaching commercial production levels at Namoya early in the second
half of 2015.
Twangizas production trend continues as illustrated in the
monthly gold production numbers disclosed in the Companys January 5, 2015 press
release. From this point forward, the Company will revert to its previous
practice of issuing quarterly production reports as per common industry
standards.
John Clarke, Chief Executive Officer of Banro, stated: During
the second half of 2014 the Twangiza mine consistently reached its anticipated
gold production targets. Going forward into 2015, Twangiza is expected to
maintain this successful production profile. Working through the New Year break
in December/January, the Banro DRC team excelled in delivering the Namoya
agglomeration drum to site, despite significant logistical challenges, and
installing it in to the Namoya circuit. With the drum now in operation, the
Namoya team can focus on ramping up Namoya production to match the successes at
Twangiza. Finally, with the financing, Namoya will receive the much needed
financial support to expedite the ramp up that would have occurred under normal
financial circumstances. Once both mines are in full operation, we expect
average annual gold production from both Twangiza and Namoya to total 200,000 to
220,000 ounces. At this production level we expect cash costs in the range of
US$725 to US$825 per ounce and all-in sustaining costs of US$850 to US$950 per
ounce.
Corporate Update
Banro also announces the
appointment of Richard Brissenden to the role of Executive Chairman of the
Board. Richard joined the Banro board in December 2013 as an independent
director and has been working closely with management to seek out and evaluate
solutions to the Companys liquidity situation. The board and management team
welcome Richard to this expanded role and look forward to his continued
involvement as the Company brings Namoya up to expected gold production and
reaches a financial threshold where exploration can be resumed both around the
current mines and on targets through the remainder of Banros Twangiza-Namoya
gold belt.
Forward-Looking Guidance
Banro offers new
guidance for 2015 and 2016 based on full production at Twangiza and the
continued ramp up of Namoya.
For 2015:
Twangiza annual gold
production of 100,000 to 110,000 ounces averaging 9,000 ounces per month
Namoya annual gold production of 90,000 to 100,000 ounces comprised of the
following:
H1: pre-commercial production of 30,000 to 35,000
ounces
H2: 9,000 to 11,000 ounces per month
Capital expenditures, excluding Namoya Mine under Construction,
planned for 2015 amount to approximately $23 million, and exploration is planned
to be reduced to approximately $5 million in 2015, with additional opportunities
to be considered should gold market conditions improve.
3
For 2016:
Twangiza 115,000 to 125,000 ounces
Namoya
115,000 to 125,000 ounces
Qualified Person
Daniel K. Bansah, Head of Projects
and Operations for the Company and a "qualified person" (as such term is defined
in National Instrument 43-101), has reviewed and approved the technical
information in this press release.
Banro Corporation is a Canadian gold mining
company focused on production from the Twangiza mine, which began commercial
production September 1, 2012, and completion of its second gold mine at Namoya
located approximately 200 kilometres south of the Twangiza gold mine. The
Companys longer term objectives include the development of two additional
major, wholly-owned gold projects, Lugushwa and Kamituga. The four projects,
each of which has a mining license, are located along the 210 kilometre long
Twangiza-Namoya gold belt in the South Kivu and Maniema provinces of the
Democratic Republic of the Congo. Led by a management team with extensive gold
and African experience, the initial focus of the Company is on the mining of
oxide material, which has a low capital intensity to develop but also attracts a
lower technical and financial risk to the Company. All business activities are
followed in a socially and environmentally responsible manner.
Gramercy Funds Management LLC is a US$5 billion
dedicated emerging markets investment manager based in Greenwich, CT with
offices in London, Hong Kong, Singapore, Mexico City, and Buenos Aires. The
firm, founded in 1998, seeks to generate superior risk-adjusted returns through
a comprehensive approach to emerging markets supported by a transparent and
robust institutional platform. Gramercy invests through both alternative and
long-only strategies across all asset classes (sovereign USD and local currency
debt, investment grade and high yield corporate debt, distressed debt, equity,
private equity and special situations). www.gramercy.com.
4
Cautionary Note Concerning Forward-Looking Statements
This press release contains forward-looking statements. All
statements, other than statements of historical fact, that address activities,
events or developments that the Company believes, expects or anticipates will or
may occur in the future (including, without limitation, statements regarding
future gold production and costs, potential mineral resources, the closing of
the second US$20 million Twangiza forward sale and the Namoya streaming
transaction, the anticipated effect of the said transactions on the
Companys operations and financial condition, and the anticipated impact
of the agglomeration drum on gold production at Namoya) are forward-looking
statements. These forward-looking statements reflect the current expectations or
beliefs of the Company based on information currently available to the Company.
Forward-looking statements are subject to a number of risks and uncertainties
that may cause the actual results of the Company to differ materially from those
discussed in the forward-looking statements, and even if such actual results are
realized or substantially realized, there can be no assurance that they will
have the expected consequences to, or effects on the Company. Factors that could
cause actual results or events to differ materially from current expectations
include, among other things: failure to complete the second US$20 million
Twangiza forward sale and the Namoya streaming transaction; the possibility that
the benefits of the agglomeration drum at Namoya are less than expected;
uncertainty of estimates of capital and operating costs, production estimates
and estimated economic return of the Companys projects; the
possibility that actual circumstances will differ from the estimates and
assumptions used in the economic studies of the Companys
projects; uncertainties relating to the availability and costs of financing
needed in the future; failure to establish estimated mineral resources and
mineral reserves (the Companys mineral resource and mineral reserve
figures are estimates and no assurance can be given that the intended
levels of gold will be produced); fluctuations in gold prices and currency
exchange rates; inflation; gold recoveries being less than those indicated by
the metallurgical testwork carried out to date (there can be no assurance
that gold recoveries in small scale laboratory tests will be duplicated in large
tests under on-site conditions or during production); changes in equity markets;
political developments in the Democratic Republic of the Congo; lack of
infrastructure; failure to procure or maintain, or delays in procuring or
maintaining, permits and approvals; lack of availability at a reasonable cost or
at all, of plants, equipment or labour; the possibility of accidents, equipment
breakdowns or other events resulting in interruptions in production; inability
to attract and retain key management and personnel; changes to regulations
affecting the Company's activities; and the other risks disclosed under the
heading "Risk Factors" and elsewhere in the Company's annual information form
dated March 29, 2014 filed on SEDAR at www.sedar.com and EDGAR at www.sec.gov.
Any forward-looking statement speaks only as of the date on which it is made
and, except as may be required by applicable securities laws, the Company
disclaims any intent or obligation to update any forward-looking statement,
whether as a result of new information, future events or results or otherwise.
Although the Company believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking statements are not
guarantees of future performance and accordingly undue reliance should not be
put on such statements due to the inherent uncertainty therein.
For further information, please visit the Banro website at
www.banro.com, or contact:
Naomi Nemeth, Banro Investor Relations, +1
(416) 366-9189, +1-800-714-7938, Ext. 2802, IR@banro.com, and follow
Banro on Twitter @banrocorp.
5
GOLD PURCHASE AND SALE AGREEMENT
TWANGIZA GFSA HOLDINGS
and
BANRO CORPORATION
and
TWANGIZA MINING S.A.
Dated as of February 27, 2015
TABLE OF CONTENTS
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THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
TWANGIZA GFSA HOLDINGS,
an exempted company incorporated under the laws of Cayman Islands
(the Purchaser)
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BANRO CORPORATION, a
corporation existing under the laws of Canada
(Banro)
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TWANGIZA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms when used in these recitals
shall have the respective meanings set forth in Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchaser and the Purchaser has agreed to purchase from the Seller, the Payable
Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Twangiza Project;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Gold Payment
Amount has the meaning set out in Section 4.2.
Additional Gold Payment
Date means in respect of each Monthly Delivery Date, the day that
falls two Business Days after such Monthly Delivery Date.
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Affiliate means, in relation
to any person or entity, any other person or entity controlling, controlled by
or under common control with such first mentioned person or entity.
Agreement means this gold
purchase and sale agreement and all attached schedules, in each case as the same
may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
Applicable Laws means any
international, federal, state, provincial or municipal law, regulation,
ordinance, code, order or other requirement or rule of law or the rules,
policies, orders or regulations of any Governmental Authority or stock exchange,
including any judicial or administrative interpretation thereof, applicable to a
person or any of its properties, assets, business or operations.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules means the
Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 8.2(c) .
Banro Event of Default has the
meaning set out in Section 10.1.
Banro Group Entity means the
PSA Entities and their respective Affiliates from time to time.
Business Day means any day
other than a Friday, Saturday or Sunday or a day that is a statutory holiday
under the laws of the Province of Ontario, Canada or the laws of South
Africa.
Change of Control of a person
(the Subject Person) means the consummation of any transaction, including any
consolidation, arrangement, amalgamation or merger or any issue, Transfer or
acquisition of voting shares, the result of which is that any other person or
group of other persons acting jointly or in concert for purposes of such
transaction: (i) becomes the beneficial owner, directly or indirectly, of more
than 50% of the voting shares of the Subject Person; or (ii) acquires control of
the Subject Person; provided that a Change of Control shall not include any
transaction that results in the Subject Person (if a Banro Group Entity)
continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means the date
that is two Business Days following the date on which the conditions precedent
to payment of the Prepayment Amount are satisfied or waived in accordance with
Section 3.5 or such other date as the Parties may agree, such date expected to
occur on or before February 27, 2015.
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Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information has
the meaning set out in Section 6.4(a) .
Contaminant means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to:
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impair the quality of the Environment for any use that
can be made of it; |
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injure or damage property or plant or animal
life; |
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adversely affect the health of any individual; |
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impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold purchase
and sale agreements with the Purchaser or Namoya GSA Holdings, any financing
transaction pursuant to which (a) Banro or any of the Banro Group Entities
receive cash advances or deposits in respect of future revenues from the sale of
specified mineral assets to a person other than an Affiliate, (b) such advances
or deposits are recorded as liabilities, but not as debt, on the consolidated
balance sheet of Banro and (c) such liability is amortized upon the delivery of
such mineral assets.
Delivery Period means the
period beginning March 1, 2015 and ending on the date on which the last
Scheduled Monthly Quantity is delivered.
Disqualified Stock means, with
respect to any person, any shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such person, including any preferred stock and limited
liability or partnership interests (whether general or limited) (collectively,
Capital Stock) of such person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
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matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock));
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is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means, with
respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
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(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means, with
respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement;
provided that in no event shall an operating lease be deemed to constitute an
Encumbrance.
Environment means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces.
Environmental Laws means any
Applicable Laws relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal, discharge or storage thereof or
the terms of any Approval issued in connection therewith) or the environmental
conditions on, under or about any real property (including soil, groundwater and
indoor, underground and ambient air conditions).
Gold Price means, with respect
to any day, the afternoon per ounce gold fixing price in U.S. dollars quoted by
the London Bullion Market Association for Refined Gold on such day or, if such
day is not a trading day, the immediately preceding trading day; provided that
if, for any reason, the London Bullion Market Association is no longer in
operation, or if the price of Refined Gold is not confirmed, acknowledged by or
quoted by the London Bullion Market Association, the Gold Price shall be
determined by reference to the price of Refined Gold in a manner endorsed by the
World Gold Council, failing which the Gold Price shall be determined by
reference to the price of gold on a commodity futures exchange mutually
acceptable to the Parties acting reasonably.
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Governmental Authority means
any national, federal, state, provincial, regional, municipal, territorial or
local government, agency, department, ministry, authority, board, bureau,
tribunal, commission, official, court or securities commission, and any person
entitled under Applicable Law to exercise executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any of the foregoing
entities, including all tribunals, commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other person controlled by any of the
foregoing.
Group Collateral has the
meaning set out in Section 8.2(b) .
Group Security Agreements has
the meaning set out in Section 8.2(b)
Guarantors means Banro, Namoya
Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and Lugushwa Mining
S.A.
Hazardous Materials means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law.
Indebtedness of any person
means, without duplication:
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(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligation
until the amount of such obligation becomes a liability on the balance
sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
- 6 -
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(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or obligor); |
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(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
- 7 -
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
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(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
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(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of
any of the Banro Group Entities; or |
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(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Insolvency Event means, in
relation to any person, any one or more of the following events or
circumstances:
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(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
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(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such
proceeding; |
- 8 -
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(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
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(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any person that
provides any Secured Financing, excluding any Banro Group Entity.
Material Adverse Effect means
any event, occurrence, change or effect that, when taken individually or
together with all other events, occurrences, changes or effects, is or could
reasonably be expected to:
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(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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(ii) |
limit, restrict or impair the ability of the Seller to
operate the Twangiza Project in all material respects in accordance with
the Operating Plan for the Twangiza Project in effect at the time of the
event, occurrence, change or effect; |
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(iii) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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(iv) |
result in a Banro Event of
Default. |
Minimum Gold Price means
$1,100 per ounce.
Monthly Delivery Date means
the date no later than the fifth Business Day after the end of each calendar
month.
Net Proceeds means with
respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Purchaser upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators, as may be amended from time to time, or any
successor instrument, rule or policy.
Note Indenture means the
indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as
issuer, each of the guarantors named therein and Equity Financial Trust Company,
as trustee and collateral agent.
- 9 -
Operating Plan means the life
of mine operating plan for the Twangiza Project delivered to the Purchaser on
the date hereof.
Order means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Authority or other decision-making authority of competent
jurisdiction.
Parties means the parties to
this Agreement.
Payable Gold means 22,248
ounces of Refined Gold.
Permits means all licenses,
permits, approvals (including environmental approvals) authorizations, rights
(including surface and access rights and rights of way, and access to water and
power), privileges, concessions or franchises necessary for the construction,
development and operation of the Twangiza Project as is contemplated by the
Operating Plan.
Permitted Distributions means
any payment of Distributions required to satisfy any obligation under this
Agreement, Applicable Laws or the terms of any Secured Financing entered into in
accordance with this Agreement, as a result of any Affiliate of any PSA Entity
not otherwise having sufficient funds to satisfy such obligation.
Permitted Encumbrances
means:
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(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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(ii) |
following the termination of the Note
Indenture: |
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(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
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(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
- 10 -
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(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
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(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation obligations);
and |
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(H) |
liens in respect of the following: |
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[Details of individual lien holders redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clause
(ii)(1), (4), (5), (7)and (9) of such definition. |
Permitted Indebtedness
means:
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(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
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(ii) |
following the termination of the Note
Indenture: |
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(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Purchaser and Namoya GSA
Holdings; |
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(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
- 11 -
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(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
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(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 75% of the forecast gold production of the
Twangiza Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchaser or the Collateral Agent on
its behalf; and (B) the ranking of the PSA Obligations vis-à-vis such
secured Indebtedness shall correspond to the ranking of the PSA
Obligations vis-à-vis the notes issued under the Note Indenture; |
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(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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(9) |
Indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an individual,
corporation, body corporate, limited or general partnership, joint stock
company, limited liability corporation, joint venture, association, company,
trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prepayment Amount means
$20,000,000.
Prior Ranking Permitted
Encumbrances means:
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(i) |
prior to the Security Trigger Event, Encumbrances
permitted under the Note Indenture; |
- 12 -
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(ii) |
following the Security Trigger Event and prior to the
termination of the Note Indenture, those Encumbrances that constitute
Priority Liens (as defined in the Note Indenture) ranking pari passu
with the Secured Amount; |
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(iii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Plant means any
mill or other processing facility owned or operated or both by any Banro Group
Entity located on or near the Properties, to the extent that such mill or
processing facility was built with the primary intention of processing ore from
the Properties, or at which Produced Gold is processed.
Produced Gold means any and
all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore
or other products resulting from the further milling, processing or other
beneficiation of minerals mined, produced, extracted or otherwise recovered from
the Properties.
Project Assets means the
shares in the capital of the PSA Entities (other than Banro) and the Properties,
Processing Plant and all present and after-acquired real or personal property,
used or acquired for use by any Banro Group Entity in connection with the
mining, production or extraction of gold from the Properties.
Project Collateral means (A)
the Project Assets, including all present and after-acquired personal property
used in connection with, relating to or arising out of, in whole or in part, the
Project, and (B) the Produced Gold, and in each case including all proceeds
thereof except sales of Produced Gold in the ordinary course of business.
Properties means the mineral
claims, mineral leases and other mining rights, concessions and interests listed
in Schedule A, including all buildings structures improvements, appurtenances
and fixtures that form part of the Twangiza Project, whether created privately
or by the action of any Governmental Authority, and includes any term extension,
renewal, replacement, conversion or substitution of any such mineral claims,
mineral leases and other mining rights, concessions or interests, owned or in
respect of which an interest is held, directly or indirectly, by any Banro Group
Entity at any time during the Delivery Period, whether or not such ownership or
interest is held continuously. The Properties are depicted in the map included
in Schedule A.
PSA Collateral means the
Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means Banro and the
Seller, and any other Affiliate of Banro (now or hereafter incorporated) that
acquires any interest in the Twangiza Project.
PSA Obligations means all
present and future debts, liabilities and obligations of PSA Entities, or all of
them, to the Purchaser under this Agreement.
- 13 -
PSA Security means the charges
and security interests granted in favour of the Purchaser pursuant to the
Security Agreements.
Purchaser Event of Default has
the meaning set out in Section 11.1.
Receiving Party has the
meaning set out in Section 6.4(a) .
Refined Gold means marketable
metal bearing material in the form of gold bars or coins that is refined to
standards meeting or exceeding 995 parts per 1,000 fine gold.
Reimbursable Expenses has the
meaning set out in Section 13.3.
Restricted Person means any
person or entity that:
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(i) |
is named, identified, described on or included on any
of: |
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(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
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(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
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(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
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(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Scheduled Monthly Quantities
means 618 ounces of Refined Gold.
Secured Amount has the meaning
set out in Section 8.2(a) .
- 14 -
Secured Financing means any
Indebtedness for borrowed money of, or lending facility or other financing
arrangement (including any secured derivative transactions entered into in
connection with such Indebtedness, or any other hedge financing) in favour of,
any Banro Group Entity that is secured by all or any part of the Project
Assets.
Security Agreements means the
Seller Security Agreements, the Group Security Agreements and the Assignment,
Subordination and Postponement of Claims.
Security Trigger Event means
the amendment to the Note Indenture and related security agreements (including
the related collateral trust agreement) to, among other things, recognize the
Purchaser as a Priority Lien Secured Party (as defined in the Note Indenture)
and as otherwise determined necessary or appropriate by the Purchaser.
Seller Security Agreements has
the meaning set out in Section 8.2(a) .
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment
payments or other additions that may become payable in respect thereof, imposed
by any Governmental Authority, which taxes shall include all income or profits
taxes (including federal, provincial, and state income taxes) other than income
or profits taxes levied in respect of the income or profits of the Purchaser,
non-resident withholding taxes, sales and use taxes, branch profit taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
licence taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, land transfer taxes, capital taxes,
extraordinary income taxes, surface area taxes, property taxes, asset transfer
taxes, and other charges and obligations of the same or of a similar nature to
any of the foregoing.
Time of Delivery has the
meaning set out in Section 2.2(b) .
Transfer means to sell,
transfer, assign, convey, dispose or otherwise grant a right, title or interest
(including expropriation or other transfer required or imposed by law or any
Governmental Authority, whether voluntary or involuntary).
Twangiza Holdcos means
together, Banro Group (Barbados) Limited and Twangiza (Barbados) Limited.
Twangiza Project means the
Properties and the mining operations developed, constructed and operated at and
in respect of the Properties.
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
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(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
- 15 -
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(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
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(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
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(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an
obligation; |
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(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second person; |
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(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
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(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
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and controls, controlling,
controlled by and under common control have corresponding
meanings. |
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(f) |
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The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
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Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
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Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
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A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
- 16 -
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(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A -
Description of Sellers Properties (with map) |
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Schedule B
Security Agreements |
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Schedule C - Banro
and Seller Representations and Warranties |
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Schedule D -
Purchaser Representations and Warranties |
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Schedule E
Termination Amount |
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Schedule F - Dispute
Resolution |
ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable Gold |
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(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Seller, the Payable Gold,
free and clear of all Encumbrances, in exchange for the Prepayment
Amount. |
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(b) |
As further provided in Section 4.3(b) Payable Gold shall
not be reduced for, and the Purchaser shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable processor agreement. |
- 17 -
2.2 |
Delivery Obligations |
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(a) |
During the Delivery Period, the Payable Gold shall be
sold and delivered to the Purchaser on each Monthly Delivery Date in the
Scheduled Monthly Quantities in accordance with the terms of this
Agreement. |
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(b) |
The Seller shall deliver to the Purchaser all Payable
Gold to be delivered under this Agreement by way of credit or allocation
to the metal account or accounts designated by the Purchaser from time to
time, or physical delivery to such other location specified by the
Purchaser from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to be
unreasonably withheld. Delivery of the Payable Gold to the Purchaser shall
be deemed to have been made at the time on the date the Payable Gold is
credited or allocated or physically delivered, as applicable, to the
designated metal account of the Purchaser (the Time of Delivery).
Title to, and risk of loss of, the Payable Gold shall pass from the Seller
to the Purchaser at the Time of Delivery. The Seller acknowledges that the
Purchaser intends to engage a selling agent that will take delivery of the
Payable Gold on behalf of the Purchaser for purposes of monetizing the
Payable Gold. All costs and expenses pertaining to each delivery of the
Payable Gold to the Purchaser, including such selling arrangements, shall
be borne by the Seller so long as the Purchasers accounts are in
customary locations in United Kingdom, Switzerland or South
Africa. |
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(c) |
The Seller hereby represents and warrants to the
Purchaser that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of the Purchaser, (ii) the Seller will
have good, valid and marketable title to such Payable Gold, and (iii) such
Payable Gold will be free and clear of all Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchaser,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchaser, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchaser the Refined Gold physically resulting
from Produced Gold. |
ARTICLE 3
PREPAYMENT
3.1 |
Prepayment |
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(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchaser of the Payable Gold, the Purchaser hereby agrees to pay the
Prepayment Amount in cash against, and as a prepayment of the purchase
price for the Payable Gold, subject to the conditions set out in Sections
3.2 and 3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Prepayment Amount except as expressly provided in this
Agreement. The Purchaser will not be entitled to demand repayment of the
Prepayment Amount except to the extent expressly set forth in this
Agreement. |
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3.2 |
Use of Prepayment Amount
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The Seller shall use, and Banro shall cause to be used, the
Prepayment Amount only to pay interest due under the Note Indenture and certain
outstanding dividends as of the last payment date on or prior to the date of
receipt by the Seller of the Prepayment Amount on preferred shares in the
capital of Banro Group (Barbados) Limited and the Series A preferred shares in
the capital of Banro, to repay accounts payable and thereafter, for general
corporate purposes.
3.3 |
Conditions Precedent in Favour of the Purchaser
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The Purchaser shall pay the Prepayment Amount to or to the
order of the Seller on the Closing Date, by wire transfer of immediately
available funds to the bank account or accounts designated by the Seller in
writing, once each of the following conditions has been satisfied in full:
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(a) |
Banro and the Seller shall have delivered to the
Purchaser a certificate of status, good standing or compliance (or
equivalent) for each PSA Entity and the Twangiza Holdcos, issued by the
relevant Governmental Authority dated no earlier than five Business Days
prior to the Closing Date; |
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(b) |
Each PSA Entity shall have executed and delivered to the
Purchaser a certificate of a senior officer of each in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Purchaser may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the
Purchaser a favourable opinion, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from external
legal counsel to Banro, the Seller, the Twangiza Holdcos and the PSA
Entities as to (i) the legal status of each, (ii) the corporate power and
authority of each to execute, deliver and perform this Agreement and the
Security Agreements to which it is a party, (iii) the execution and
delivery of this Agreement and the Security Agreements to which it is a
party and the enforceability of this Agreement and the Security Agreements
against each, (iv) that this Agreement and the Security Agreements, and
the performance by Banro and the Seller of the obligations hereunder or
thereunder, do not conflict with, violate, result in a breach of, or
constitute a default or an event creating rights of acceleration,
termination, modification or cancellation or a loss of rights under (with
or without the giving notice or lapse of time or both), the Note Indenture
or the Collateral Trust Agreement (as defined in the Note Indenture), (v)
the outstanding share capital of the Seller and the Twangiza Holdcos, (vi)
the creation of valid mortgages and charge upon, and security interests in
(including as to ranking of such security interests), the PSA Collateral
under the Security; and (vii) the due registration or filing of
the Security Agreements and, where applicable, the perfection of the
security interest of the Purchaser (including as to ranking of such
security interests), under such Security Agreements and the results of the
usual searches that would be conducted in connection with the security
that is the subject of such Security
Agreements; |
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the
Purchaser a legal opinion addressed to the Purchaser from external
counsel, in form and substance satisfactory to the Purchaser, with respect
to title to the Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
except for those that would not
reasonably be expected to have a Material Adverse Effect;
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(g) |
each PSA Entity shall have delivered to the Purchaser a
certificate of a senior officer confirming: |
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(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse Effect; |
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(h) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchaser under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchaser, under such Security
Agreements; |
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(i) |
the Seller paid all Reimbursable Expenses of the
Purchaser payable as at the Closing Date; and |
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(j) |
Banro and the Seller shall have delivered to the
Purchaser prior to the Closing Date a certificate of insurance coverage or
other evidence of acceptable insurance coverage. |
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3.4 |
Conditions Precedent in Favour of the Seller
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On or before the Closing Date, the Purchaser will satisfy each
of the following conditions:
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(a) |
the Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for the
Purchaser, issued by the relevant Governmental Authority; |
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(b) |
the Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of the Purchaser, in form
and substance satisfactory to Banro and the Seller, acting reasonably, as
to the constating documents of the Purchaser; the resolutions of the sole
director of the Purchaser, authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
the names, positions and true signatures of the persons authorized to sign
this Agreement on behalf of the Purchaser; and such other matters
pertaining to the transactions contemplated hereby as Banro and the Seller
may reasonably require; |
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(c) |
the Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to the
Purchaser as to (i) the legal status of the Purchaser, (ii) the corporate
power and authority of the Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
the Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by the Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice or lapse of time
or both would become a Purchaser Event of Default) has occurred and is
continuing. |
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3.5 |
Satisfaction of Conditions Precedent
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(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchaser, and may be waived by the Purchaser
in its sole discretion in whole or in part in writing. Each of the
conditions set forth in Section 3.4 is for the exclusive benefit of Banro
and the Seller, and may be waived by Banro and the Seller in their sole
discretion in whole or in part in writing. |
ARTICLE 4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
4.2 |
Additional Gold Deliveries
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On each Additional Gold Delivery Date, the Seller shall sell
and deliver to the Buyer an amount of Refined Gold (an Additional Gold Delivery
Amount) equal to the greater of:
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zero; and |
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(b) |
the product of: |
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(i) |
the Scheduled Monthly Quantity delivered on the Monthly
Delivery Date corresponding to such Additional Gold Payment Date,
and |
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(ii) |
an amount equal to: |
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(A) |
the Minimum Gold Price |
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minus |
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(B) |
the Gold Price on the Business Day following the Monthly
Delivery Date, |
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divided by the Gold Price on the Business Day
following the Monthly Delivery Date. |
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Each Additional Gold Delivery Amount shall be delivered in
accordance with the provisions of this Agreement.
4.3 |
Taxes |
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(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchaser shall be made without any deduction, withholding, charge or levy
on account of any Taxes, all of which shall be for the sole account of the
Seller. All Taxes, if any, as are required to be so deducted, withheld,
charged or levied by the Seller or any of its Affiliates on any such
delivery or payment, shall be paid by the Seller delivering or paying to
the Purchaser or on their behalf, in addition to such delivery or payment,
such additional delivery or payment as is necessary to ensure that the net
amount received by the Purchaser (net of any such Taxes, including any
Taxes required to be deducted, withheld, charged or levied on any such
additional amount) equals the full amount that the Purchaser would have
received had no such deduction, withholding, charge or levy been
required. |
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(b) |
If the Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.3(a) hereof, the Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.3(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of the Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of the Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental Authority. |
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4.4 |
New Tax Laws |
In the event that any new Tax is
implemented, or there shall occur any revision in, implementation of, amendment
to or interpretation of any existing Tax, in each case that has an adverse
effect on any of the Parties or any of their Affiliates in respect of the
transactions contemplated by this Agreement, then the Purchaser, on the one
hand, and the Seller on the other hand, agree that they shall negotiate in good
faith with each other to amend this Agreement so that the other Parties and
their Affiliates are no longer adversely affected by any such enactment,
revision, implementation, amendment or interpretation, as the case may be;
provided that any amendment to this Agreement shall not have any adverse effect
on the Seller and its Affiliates on the one hand, and the Purchaser and its
Affiliates on the other hand.
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Any payment or delivery of Payable Gold
not made by a Party on or by any applicable payment referred to in this
Agreement shall incur interest from the due date until such payment or delivery
is paid or made in full at a per annum rate equal to the [Redacted] on
the due date, calculated and compounded monthly in arrears. Any dollar amount or
Refined Gold owing by a Party to any other Party under this Agreement may be set
off against any dollar amount or Refined Gold owed to such Party by the other
Party. Any amount of Refined Gold set off and withheld against any non-payment
by a Party shall be valued at the Gold Price as of the first trading day that
such amount of Refined Gold became payable to such Party.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
5.1 |
Notice of Information |
Prior to delivery to the Purchaser of any of the information
set out in this Article 5 or otherwise in this Agreement, Banro and the Seller
shall inform the Purchaser if such information would be considered material
non-public information of Banro. In such event, the Purchaser shall have the
option, in its sole discretion, to (a) refuse to accept such information, or (b)
require that such information be either (i) publicly disclosed within two
Business Days, or (ii) where such information constitutes scientific and
technical information representing a material change to the Twangiza Project,
delivered at a subsequent date within 45 days, together with an updated
technical report in accordance with NI 43-101, and notice of such refusal or
delayed delivery will constitute a valid waiver, or partial waiver, as the case
may be, of the obligation to deliver such information.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchaser:
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(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis, including: |
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(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 5.2(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
5.3 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 5.2(a),
5.2(b), 5.2(c) and 5.2(e) shall be provided by the Seller to the Purchaser. For
the purposes of this Section 5.3 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
If during the Delivery Period, Banro shall cease to be a
reporting issuer under Applicable Law, the PSA Entities shall permit the
Purchaser and its authorized representatives and agents to perform audits or
other reviews and examinations of its books and records from time to time at
reasonable times at the Purchasers sole risk and expense and upon five Business
Days notice, to confirm compliance with the terms of this Agreement, provided
that unless there is a continuing Banro Event of Default, the Purchaser and its
authorized representatives and agents will not exercise such rights more often
than one (1) time during any calendar quarter. The Purchaser shall diligently
complete any audit or other examination permitted hereunder.
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchaser and its
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Twangiza Project, in each case to monitor the mining and
processing operations on the Twangiza Project. Provided there has been no
Banro Event of Default that is continuing, the Purchaser may avail itself
of such right of access a maximum of twice per calendar year (including
the mill in respect thereof), and for this purpose, invitations from Banro
will not reduce the number of visits the Purchaser may
request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchaser shall have the
right to conduct an investors tour on the Twangiza Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Twangiza Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchaser and its invitees, and the Purchaser shall (a)
comply and request that its invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchaser or Banro and the Seller or any
of their respective invitees, employees, officers, directors, agents, or
representatives caused by the Purchasers exercise of its rights under
this Section. |
ARTICLE 6
COVENANTS
6.1 |
Conduct of Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Twangiza Project Assets on a commercial basis as
though the Seller has a full economic interest in all the gold produced
from the Properties. Banro and the Seller shall ensure that (i) all
cut-off grade, short term mine planning and production decisions
concerning the Twangiza Project shall be based on gold prices typical of
normal industry practice and consistent with the practices of Banro and
its Affiliates as at the date of this Agreement in connection with such
decisions, and (ii) all longer term planning and resource and reserve
calculations concerning the Twangiza Project shall use gold prices based
on normal industry practice and consistent with the historical practices
of Banro and its Affiliates in connection with such planning and
calculations. |
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(b) |
Subject to Section 6.1(a), all decisions regarding the
Twangiza Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Twangiza Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Twangiza Project, and (iv) except
as provided herein, the sale of gold and terms thereof, shall be made by
the Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 6.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Twangiza Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
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6.2 |
Preservation of Corporate Existence |
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(a) |
Except as permitted in Section 6.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 7.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in
favour of the Purchaser all the obligations of such Party under this
Agreement and any Security Agreement to which it is a party. |
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6.3 |
Insurance |
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(a) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(b) |
Banro and the Seller shall insure the Twangiza Project in
such amounts and with such coverage as is customary in the mining industry
for the operation of the Twangiza Project. Banro and the Seller covenant
and agree that in the event of any loss or damage that is insured prior to
the end of the Delivery Period, the Seller shall at its option either (i)
use all Net Proceeds of any insurance payment received by a Banro Group
Entity to rebuild or repair all damaged facilities forming part of the
Twangiza Project, or (ii) use the Purchasers share of the Net Proceeds of
such insurance payment received by any Banro Group Entity within 30 days
after receipt of such proceeds by such Banro Group Entity, to acquire
Refined Gold in accordance with Section 2.2(d) and shall deliver to the
Purchaser such amount of Refined Gold, the Purchasers share being
calculated as the ratio of the net present value of Payable Gold not
delivered to the Purchaser to the value of the Twangiza Project when
measured by the same criterion which establishes the value of such
Purchasers interest. A failure to agree on the foregoing proportion is
arbitrable under Section 13.1. |
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(c) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Purchaser at reasonable
intervals no more than once per year, furnish to the Purchaser a
certificate setting forth the nature and extent of all insurance
maintained by or on behalf of the PSA Entities in accordance with Section
6.3(a). Banro and the Seller shall, upon the request of the Purchaser,
provide the Purchaser with copies of all insurance policies as in effect
from time to time relating to the Project
Assets. |
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(d) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
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6.4 |
Confidentiality |
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(a) |
Each Party (a Receiving Party) agrees that it
shall maintain as confidential and shall not disclose, and shall cause its
Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 15, 2014
(Confidential Information), provided that a Receiving Party may disclose
Confidential Information in the following circumstances: |
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(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 6.4(c) and 13.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 13.1; |
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
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(v) |
with the consent of the disclosing Party;
and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
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(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 6.4(a)(i) are made aware of this Section 6.4 and
comply with the provisions of this Section 6.4. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Purchaser will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 6.4(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
6.5 |
Adverse Impact to Payable Gold
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Banro and the Seller shall promptly notify the Purchaser
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 6.5, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Twangiza Project.
- 29 -
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Twangiza
Project.
[Redacted]
As soon as practical following the Closing Date and in any
event no later than 15 Business Days following the Closing Date, Banro and the
Seller, together with the Purchaser, shall negotiate, execute and deliver an
agreement with Auramet International LLC (Auramet), creating an account in
favour of the Purchaser and setting out the terms by which Auramet will assist
the Purchaser in monetizing deliveries of Payable Gold.
Banro shall take all actions necessary (including, as
appropriate solicit and obtain the consent of the holders of notes issued
pursuant to the Note Indenture and the trustee and other parties to the
collateral trust agreement and security agreements related to the Note
Indenture) to, and shall within 60 days of the date hereof, amend the Note
Indenture and the collateral trust agreement and security agreements related
thereto to characterize the PSA Obligations as a Priority Lien in accordance
with the Note Indenture and as otherwise reasonably requested by the Purchaser.
6.10 |
Banro Covenants |
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(a) |
During the Delivery Period, Banro shall not (i) declare
or pay any dividend on the common shares in the capital of Banro, or (ii)
make any payments to directors or management of Banro not in the ordinary
course of business, and shall not, and will cause the Banro Group Entities
to not, pursue any construction of projects other than the Twangiza
Project and the projects known as the Namoya Project, the Kamituga Project
and the Lugushwa Project and will not pursue any exploration activities
other than in connection with such projects and with respect to properties
held by Banro Congo Mining S.A. |
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(b) |
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Purchaser in
accordance with the terms of this Agreement. The Parties acknowledge and
agree that any breach by Banro of its obligations under this Section would
cause the Purchaser irreparable harm for which monetary damages alone
would not be a sufficient remedy and that therefore the Purchaser may seek
and obtain orders of specific performance, injunctions and other equitable
remedies and remedies available under civil laws against Banro with
respect thereto as a court of competent jurisdiction or an arbitrator
under Section 13.1 may see fit to grant with respect to any such breach
and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies. |
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ARTICLE 7
BANRO TRANSFERS AND CONTROL
7.1 |
Owner of Project Assets
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Subject to Section 7.3 and except as provided in Section8.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 7.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 7.1 shall not restrict any leased personal property
(provided that the lessee is the Seller) or personal property that is equipment
that is obsolete or no longer in use under the Operating Plan.
7.2 |
Prohibited Transfers and Changes of Control
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Except as set out in Section 7.3, Banro and the Seller shall
not, and shall ensure that the Twangiza Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 7.3(c), holding Project Assets, does not during the Delivery Period:
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(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 7.3(c), holding Project
Assets. |
7.3 |
Permitted Transfers and Changes of Control
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Section 7.2 shall not prohibit a Transfer or Change of Control,
if:
Transfer of the Project Asset
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(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA Entity: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Purchaser all of the Sellers
and, if applicable, the other Banro Group Entities obligations under this
Agreement pursuant to an agreement in form and substance satisfactory to
the Purchaser, acting reasonably; |
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
8.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 8.2 |
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(a)(vii)); |
Change of Control
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(b) |
in the case of a Change of Control of Banro, the Seller,
the Twangiza Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
7.3(c): |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed Change of
Control; |
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(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
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(A) |
assumes in favour of the Purchaser all of the obligations
of Banro under this Agreement, such assumption to occur by an agreement in
form and substance satisfactory to the Purchaser, acting reasonably;
and |
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(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
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(iii) |
in respect of such Change of Control: |
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(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 8.2; |
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(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(v) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(b)(v)); |
Inter-corporate Transfer
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(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of Banro: |
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(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
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(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
7.3(a)(i) through 7.3(a)(vii) are complied with mutatis mutandis;
or |
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(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
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(1) |
the provisions of Sections 7.3(a)(i), 7.3(a)(iv),
7.3(a)(v) and 7.3(a)(vi) are complied with mutatis mutandis;
and |
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(2) |
the Seller provides a confirmation in favour of the
Purchaser that its obligations under this Agreement shall continue in full
force and effect despite any such Transfer; |
Joint Ventures and Minority Dispositions
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(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
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(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
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(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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(iv) |
such other person agrees in a document, or documents,
acceptable to the Purchaser, acting reasonably, with the PSA Entity, the
Purchaser and any other such person to acknowledge the obligations of the
Seller under this Agreement and the Security Agreements, including the
granting to the Purchaser of all the security interests contemplated
thereunder; provided that, if such other person acquires any legal right,
title or interest in and to any of the Project Assets (including any
registered or recorded title in and to the Properties), such person
assumes on a joint and several basis with the Seller all of the
obligations and duties under this Agreement and grants the same charges
and security interests in, to and over the Project Assets to which it
acquires any legal right, title or interest, and enters into the same
Security Agreements entered into by the Seller and its subsidiaries
pursuant to Section 8.2; |
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(v) |
all filings have been made and all other actions have
been taken that are required in order for the Purchaser to continue at all
times following such transaction to have the valid and perfected security
interest contemplated by Section 8.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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(viii) |
the Purchaser confirms in writing that it does not
reasonably expect such minority interest disposition, joint venture or
other similar commercial arrangement to have a Material Adverse Effect;
or |
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With Consent
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(e) |
the Purchaser provides its prior written
consent. |
ARTICLE 8
SECURITY
8.1 |
Financings and Encumbrances |
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(a) |
During the Delivery Period, except for Permitted
Indebtedness, no PSA Entity shall incur or enter into any
Indebtedness. |
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(b) |
Except as provided in this Article 8, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
8.2 |
Security |
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(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, guaranteeing the performance, when due, of
all PSA Obligations; and (ii) grant, as security for the payment and
performance, when due, of all PSA Obligations, to and in favour of the
Purchaser first ranking charges and security interests (subject only to
the Prior Ranking Permitted Encumbrances) in, to and over Project
Collateral (other than the Properties and Processing Plant), pursuant to
one or more agreements (the Seller Security Agreements) executed
by each to and in favour of the Purchaser, in form and substance
satisfactory to the Purchaser, acting reasonably, the charged amount (the
Secured Amount) of such charges and security interests being
initially the Prepayment Amount, such amount to reduce rateably upon
delivery of each Scheduled Monthly Quantity. |
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(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Purchaser, in form and substance satisfactory
to the Purchaser, acting reasonably, guaranteeing the payment and
performance, when due, of all PSA Obligations; and (ii) grant, as security
for its obligations under such guarantee to and in favour of the
Purchaser, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral), all
pursuant to one or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Purchaser,
acting reasonably. |
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(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and Postponement
of Claims), in favour of and in form and substance satisfactory to
the Purchaser, acting reasonably, that subordinates and postpones the
enforcement of any such debts, liabilities and obligations and the
realization of any charges or security interests to secure such claims to
the Security Agreements and, from and after a Banro Event of Default, or
any event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, and until such Banro Event of
Default is remedied, subordinates and postpones the payment of all such
debt, liabilities and obligations (other than Permitted Distributions) to
the payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
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(d) |
Following the Security Trigger Event, if so requested in
writing by the Purchaser, the Banro Group Entities shall not, for so long
as a Banro Event of Default, or any event or circumstance which, with
notice, the passage of time or both, would constitute a Banro Event of
Default, continues, make any Distribution other than a Permitted
Distribution. |
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(e) |
At the Purchasers request, Banro shall, and shall cause
the Seller (and any other Banro Group Entity from which Produced Gold is
sold) to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times following the Security Trigger Event, the Seller shall not,
and Banro shall ensure that the Seller does not, make any Distributions
other than a Permitted Distribution from such account if a Banro Event of
Default, or event which with the giving of notice or the passage of time
or both would constitute a Banro Event of Default, has occurred and is
continuing, or if a Banro Event of Default would occur or arise
immediately after, or as a result of, making a Distribution. |
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(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Purchaser may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Purchaser has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Purchaser continues to secure the PSA Obligations and with no change in
the priority thereof. The Seller shall pay all costs and expenses
associated with the foregoing including in connection with the preparation
and registration of all documentation in connection therewith that is
required by the Purchaser. |
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(i) |
Notwithstanding the foregoing, the Purchaser hereby
agrees that the obligations set out in the Section 8.2 shall be satisfied
prior the Security Trigger Event by the execution, delivery and as
applicable, registration of the documents so identified Schedule
B. |
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
8.3 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Purchaser shall have
substantially similar access rights and obligations as provided in Section 5.5.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 |
Representations and Warranties of Banro and the Seller
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Banro and the Seller, acknowledging that the Purchaser is
entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule C to the Purchaser on and
as of the date of this Agreement on a joint and several basis. The
representations and warranties set forth in Schedule C shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
9.2 |
Representations and Warranties of the Purchaser
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The Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, hereby makes the
representations and warranties set forth in Schedule D to Banro and the Seller
on and as of the date of this Agreement. The representations and warranties set
forth in Schedule D shall be deemed to be repeated by the Purchaser as of the
date of the Closing Date.
9.3 |
Survival of Representations and Warranties
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The representations and warranties set forth in Schedule C and
Schedule D shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
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ARTICLE 10
BANRO EVENTS OF DEFAULT
10.1 |
Banro Events of Default
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Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of Default):
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(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchaser on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Purchaser
notifying the Seller of such default; |
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(b) |
other than as provided in Section 10.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Purchaser to the PSA
Entities of written notice of such breach or default, except in respect of
the covenant set out in Section 6.9, which shall constitute a Banro Event
of Default immediately on notice thereof, or such longer period of time as
the Purchaser may determine in its sole discretion; |
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(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Purchaser to Banro and the Seller of written notice of
such inaccuracy, or such longer period of time as the Purchaser may
determine in its sole discretion; |
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(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
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(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Purchaser notifying the PSA Entities of such
default. |
10.2 |
Remedies |
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(a) |
If a Banro Event of Default occurs and is continuing, the
Purchaser shall have the right, upon written notice to Banro and the
Seller at its option and in addition to and not in substitution for any
other remedies available at law or equity, to take any or all of the
following actions: |
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(i) |
demand all amounts and deliveries owing by the Seller to
the Purchaser; |
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(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 10.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the Purchaser
hereunder, but for the occurrence of such Banro Event of Default. Upon
demand from the Purchaser, the Seller shall promptly pay all such amounts
to the Purchaser; and |
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(iii) |
enforce the PSA Security. |
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(b) |
The Parties hereby acknowledge and agree that: (i) the
Purchaser will be damaged by a Banro Event of Default; (ii) it would be
impracticable or extremely difficult to fix the actual damages resulting
from a Banro Event of Default; (iii) any sums payable in accordance with
Section 10.2(a) with respect to a Banro Event of Default are in the nature
of liquidated damages, not a penalty, and are fair and reasonable; and
(iv) the amount payable in accordance with Section 10.2(a) or with respect
to a Banro Event of Default represents a reasonable estimate of fair
compensation for the losses that may reasonably be anticipated from such
Banro Event of Default in full and final satisfaction of all amounts owed
in respect of such Banro Event of Default. |
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(c) |
For greater certainty, if the Purchaser does not exercise
its right under Section 10.2(a)(ii), the obligations of Banro and the
Seller or any successors shall continue in full force and
effect. |
- 39 -
ARTICLE 11
PURCHASER EVENTS OF DEFAULT
11.1 |
Purchaser Events of Default
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Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of Default):
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(a) |
the Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect, and such breach or default is not remedied within a period of 30
days following delivery by the Seller to the Purchaser of written notice
of such breach or default, or such longer period of time as the Seller may
determine in its sole discretion; or |
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(b) |
any of the representations or warranties given by the
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to the Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
If a Purchaser Event of Default under Section 11.1 has occurred
and is continuing, then Banro and the Seller shall have no right to terminate
this Agreement, but shall be entitled to all other remedies available to it at
law or in equity.
ARTICLE 12
TERMINATION ENTITLEMENT
12.1 |
Termination Entitlement
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If the Seller wishes to terminate the delivery of Payable Gold
to the Purchaser during the Delivery Period in accordance with the terms and
conditions of this Agreement (a Seller Termination Event), it shall provide
written notice thereof to the Purchaser and the purchase of Refined Gold not
delivered shall be cancelled and the Purchaser shall be entitled to receive a
one-time termination amount (the Termination Amount) [Commercially
sensitive information redacted].
ARTICLE 13
GENERAL
13.1 |
Disputes and Arbitration
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Any dispute, controversy or claim arising out of or relating
to this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officer of each of Banro and the Purchaser for prompt
resolution. Any such dispute, controversy or claim which cannot be resolved by
the chief executive officers within 15 days after it has been so referred to
them hereunder, including the determination of the scope or applicability of
this Agreement to arbitrate, shall be settled by binding arbitration in
accordance with the rules for arbitration set out in Schedule F. The
determination of such arbitrator shall be final and binding upon the Parties and
there shall be no appeals from any determination of the arbitrator. Judgment on
the award may be entered in any court having jurisdiction. This Section 13.1
shall not preclude the Parties from seeking provisional remedies in aid of
arbitration from a court of competent jurisdiction. The Parties covenant and
agree that they shall conduct all aspects of such arbitration having regard at
all times to expediting the final resolution of such arbitration.
- 40 -
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
13.3 |
Reimbursement of Expenses |
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(a) |
The Seller and Banro shall pay to the Purchaser all
reasonable costs and expenses (including all reasonable legal fees and
disbursements of counsel) incurred by the Purchaser in connection with
this Agreement and the other related transactions, including: |
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(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Purchaser and any on-site inspections by the Purchaser or its
representatives; |
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(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated thereunder; |
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(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Purchaser at law or in
equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
- 41 -
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(viii) |
the incorporation and organization of the Purchaser, as
well as the initial issuances of notes or other investment instruments
required to capitalize the Purchaser with the Prepayment Amount;
and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Purchaser, including fees and expenses related to
fiscal and collateral agents, valuation tax reporting and
audit. |
(collectively, the Reimbursable
Expenses).
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(b) |
The obligations of the Seller under this Section 13.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
13.4 |
Termination; Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 6.4, 6.10, 10.2, 11.2,
13.1, 13.7, 13.9 and Schedule F and such other provisions of this Agreement as
are required to give effect thereto.
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Purchaser and any Banro Group Entity.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Purchaser on the one hand and any Banro Group
Entity on the other hand.
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
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(a) |
If to either Banro or the Seller,
to: |
- 42 -
Banro Corporation
1 First Canadian
Place
Suite 7070, 100 King Street West
Toronto, Ontario, M5X 1E3, Canada
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Attention: |
Chief Financial Officer |
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Telecopier No.: |
416-366-7722 |
with a copy to:
Norton Rose Fulbright Canada LLP
Royal Bank Plaza, South Tower, Suite 3800
200 Bay Street
Toronto,
Ontario, M5J 2Z4, Canada
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Attention: |
Mike Moher |
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Telecopier No.: |
416- 216-3930 |
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(b) |
If to the Purchaser, to: |
[Redacted]
with a copy to:
Goodmans LLP
333 Bay Street, Suite
3400
Toronto, Ontario M5H 2S7
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Attention: |
Kari MacKay |
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Telecopier No.: |
416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
The Parties shall jointly plan and co-ordinate, and shall
cause their respective Affiliates to jointly plan and coordinate, any public
notices, press releases, and any other publicity concerning this Agreement and
the transactions contemplated by this Agreement and neither Party or its
Affiliates shall act in this regard without reasonable prior consultation with
the other Party, unless such disclosure is required to meet timely disclosure
obligations of such Party or its Affiliates under Applicable Laws in
circumstances where prior consultation with the other Party is not practicable,
and a copy of such disclosure shall be provided to the other Party at such time
as it is made publicly available.
- 43 -
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
13.13 |
Priority Debt Sharing Confirmation
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The Purchaser hereby agrees, for the benefit of all holders of
each other existing and future Series of Priority Lien Debt and each existing
and future Priority Debt Representative, that as of the Security Trigger Event,
all Priority Lien Obligations will be and are secured equally and ratably by all
Liens (as defined in the Collateral Trust Agreement) at any time granted by
Banro or any Obligor (as defined in the Collateral Trust Agreement) to secure
the obligations in respect of the Priority Notes, whether or not upon property
otherwise constituting Collateral (as defined in the Collateral Trust
Agreement), that all such Liens will be enforceable by the Collateral Agent for
the benefit of all holders of Priority Lien Obligations equally and ratably
(except that the Priority Stream Obligations (as defined in the Collateral Trust
Agreement) shall be paid in priority to the other Priority Lien Obligations in
accordance with Section 3.4(a) of the Collateral Trust Agreement), and that the
Purchaser is bound by the provisions in the Collateral Trust Agreement relating
to the order of application of proceeds from enforcement of such Liens, and
consent to and direct the Collateral Agent to perform its obligations under the
Collateral Trust Agreement.
Any waiver of, or consent to depart from, the requirements
of any provision of this Agreement shall be effective only if it is in writing
and signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
- 44 -
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
13.16 |
Assignment |
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
The Purchaser shall be entitled at any time and from time
to time to Transfer any, or all, of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 7.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Purchaser. In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
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13.17 |
Counterparts |
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
TWANGIZA GFSA HOLDINGS |
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Per: |
(signed) |
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Name: |
[Redacted]
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Title: |
[Redacted] |
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BANRO CORPORATION |
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Per: |
Richard Brissenden |
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Name: |
Richard Brissenden |
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Title: |
Chairman of the Board |
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TWANGIZA MINING S.A. |
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Per: |
Desire Sangara |
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Name: |
Desire Sangara |
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Title: |
Chairman of the Board
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SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
Dated as of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY
AGREEMENTS
This is Schedule B to the Gold Purchase and
Sale Agreement between Twangiza GFSA
Holdings, Banro Corporation and
Twangiza Mining S.A. Dated as of February 27, 2015
Prior to the Security Trigger Event:
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Pledge of production and equipment, duly
registered in Democratic Republic of the Congo |
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Guarantees contemplated by Section 8.2(b) of
Banro and the Guarantors |
Following the Security Trigger Event:
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Joinder and sharing confirmations as a Priority
Lien Debt |
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Guarantees contemplated by Section 8.2(b)
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Assignment, Subordination and Postponement of
Claims contemplated by Section 8.2(c) |
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Pledge of accounts with Auramet International
LLC, if any |
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Pledge of accounts with any Processor
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SCHEDULE C
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule C to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining
S.A. dated as of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchaser as
follows:
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(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non-assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Twangiza (Barbados) Limited; |
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(f) |
the authorized share capital of Twangiza (Barbados)
Limited consists of an unlimited number of common shares and 20,000
preferred shares, of which, as of the date hereof, (i) only 1,200,000
common shares are issued and outstanding as fully paid and non-assessable
shares in the capital of Twangiza (Barbados) Limited and are legally and
beneficially owned as to 100% by Banro Group (Barbados) Limited, and (ii)
only 20,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Twangiza (Barbados) Limited and
are legally and beneficially owned as to 100% by investment funds managed
by Gramercy Funds Management LLC; |
- 2 -
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right, title or interest
in or to, the Twangiza Project, the Properties, the Project Assets or the
gold produced from the Properties; |
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Twangiza Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities, other than those that
are not necessary on the date this representation and warranty is given
and are expected to be obtained in the ordinary course of business by the
time they are necessary, where the failure to have or obtain such
Approvals would not reasonably be expected to have a Material Adverse
Effect, and there are no facts or circumstances that might reasonably be
expected to adversely affect the issuance or obtaining of any such
material Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Twangiza Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Twangiza Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
- 4 -
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Twangiza
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Twangiza Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Twangiza Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the |
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Bribery Act (United Kingdom)). Without limiting the
generality of the foregoing, each Banro Group Entity is in material
compliance with all applicable Environmental Laws, and there are no
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending or, to the best of its knowledge, threatened against
or affecting any Banro Group Entity with respect to the ownership, use,
maintenance and operation of any of the Twangiza Project, the Properties
and the Project Assets relating to any applicable Environmental Laws,
where any adverse determination with respect thereto or liability imposed
therein could reasonably be expected to result in a Material Adverse
Effect and such adverse determination is reasonably
anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Twangiza Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Twangiza Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with the Toronto
Stock Exchange (all such documents filed prior to the date of execution of
this Agreement, the Public Disclosure Documents) since January 1,
2013. As of the effective date of such Public Disclosure Documents, to its
knowledge, none of the Public Disclosure Documents contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, it being
acknowledged that if there is any inconsistency between two or more
documents comprising the Public Disclosure Documents regard shall be had
to the last filed document. All of the Public Disclosure Documents, as of
their respective effective dates (and as of the effective dates of any
amendments thereto), complied as to both form and content in all material
respects with the requirements of applicable Securities Laws or were
amended on a timely basis to correct deficiencies identified by securities
commissions or similar securities regulatory authorities. Banro has not
filed any confidential material change report with any securities
regulatory authority that at the date of execution of this Agreement
remains confidential. There is no material adverse change concerning Banro
which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this
Agreement; |
- 5 -
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Twangiza Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements
referred to in the first sentence of paragraph (y) above or in the notes
thereto, other than (i) liabilities or obligations arising in the ordinary
course of business since September 30, 2014 or publicly announced by
Banro, or obligations to Auramet International LLC pursuant to the gold
sale arrangements with Auramet International LLC; |
- 6 -
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock-out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America (Foreign
Company Plan) that is intended to qualify for special tax treatment
meets all of the requirements for such treatment and has obtained all
necessary approvals of all relevant Governmental Authorities. No Foreign
Company Plan has any unfunded liabilities, determined in accordance with
generally accepted accounting principles, that have not been fully accrued
on Banros financial statements or that will not be fully offset by
insurance. All Foreign Company Plans are registered where required by, and
are in good standing under, all Applicable Laws. For purposes of this
paragraph, Employee Benefit Plan means any employee benefit plan,
program, policy or arrangement sponsored, maintained or contributed to by
a Banro Group Entity or any of their respective Affiliates or with respect
to which the Seller, any Banro Group Entity or any of their respective
Affiliates has any liability or obligation; |
- 7 -
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Twangiza Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
- 8 -
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not misleading. |
SCHEDULE D
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining
S.A. dated as of February 27, 2015
The Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is an exempted company duly incorporated and validly
existing under the laws of Cayman Islands and is up to date in respect of
all filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it; and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person. |
SCHEDULE E
TERMINATION AMOUNT
This is Schedule E to the Gold Purchase and
Sale Agreement between Twangiza GFSA
Holdings, Banro Corporation and
Twangiza Mining S.A. dated as of February 27, 2015
[Commercially sensitive information redacted]
SCHEDULE F
DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
dated as of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this
Agreement.
1. |
Initiation of Arbitration Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
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2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the other Party
(the Respondent) a statement of claim setting out in sufficient detail
the facts and any contentions of law on which it relies, and the relief that it
claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies
and which have not previously been submitted by any Party, and (where
practicable) by any relevant samples. |
- 2 -
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration hearing. |
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3. |
Meetings and Hearings |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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4. |
The Decision |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
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5. |
Jurisdiction and Powers of the Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction to: |
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(i) |
determine any question of law arising in the
arbitration; |
- 3 -
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(ii) |
determine any question as to the
Arbitrators jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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6. |
Confidentiality |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations or contractual
rights as to disclosure on a confidential basis to which it may be
entitled. |
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional advisors. |
GOLD PURCHASE AND SALE AGREEMENT |
(Tranche 2) |
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TWANGIZA GFSA HOLDINGS |
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and |
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BANRO CORPORATION |
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and |
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TWANGIZA MINING S.A. |
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
TWANGIZA GFSA HOLDINGS,
an exempted company incorporated under the laws of Cayman Islands
(the Purchaser)
- and -
BANRO CORPORATION, a
corporation existing under the laws of Canada
(Banro)
- and -
TWANGIZA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms when used in these recitals
shall have the respective meanings set forth in Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchaser and the Purchaser has agreed to purchase from the Seller, the Payable
Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Twangiza Project;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Gold Payment
Amount has the meaning set out in Section 4.2.
Additional Gold Payment
Date means in respect of each Monthly Delivery Date, the day that
falls two Business Days after such Monthly Delivery Date.
- 2 -
Affiliate means, in
relation to any person or entity, any other person or entity controlling,
controlled by or under common control with such first mentioned person or
entity.
Agreement means this
gold purchase and sale agreement and all attached schedules, in each case as the
same may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
Applicable Laws
means any international, federal, state, provincial or municipal law,
regulation, ordinance, code, order or other requirement or rule of law or the
rules, policies, orders or regulations of any Governmental Authority or stock
exchange, including any judicial or administrative interpretation thereof,
applicable to a person or any of its properties, assets, business or
operations.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules
means the Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 8.2(c) .
Banro Event of Default
has the meaning set out in Section 10.1.
Banro Group Entity
means the PSA Entities and their respective Affiliates from time to time.
Business Day means
any day other than a Friday, Saturday or Sunday or a day that is a statutory
holiday under the laws of the Province of Ontario, Canada or the laws of South
Africa.
Change of Control of
a person (the Subject Person) means the consummation of any
transaction, including any consolidation, arrangement, amalgamation or merger or
any issue, Transfer or acquisition of voting shares, the result of which is that
any other person or group of other persons acting jointly or in concert for
purposes of such transaction: (i) becomes the beneficial owner, directly or
indirectly, of more than 50% of the voting shares of the Subject Person; or (ii)
acquires control of the Subject Person; provided that a Change of Control shall
not include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means
the date that is two Business Days following the date on which the conditions
precedent to payment of the Prepayment Amount are satisfied or waived in
accordance with Section 3.5 or such other date as the Parties may agree, such
date expected to occur on or before April 15, 2015.
- 3 -
Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information
has the meaning set out in Section 6.4(a) .
Contaminant means
any solid, liquid, gas, odor, heat, sound, vibration, radiation, or combination
of any of them, that does or is reasonably expected to:
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(i) |
impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold
purchase and sale agreements with the Purchaser or Namoya GSA Holdings, any
financing transaction pursuant to which (a) Banro or any of the Banro Group
Entities receive cash advances or deposits in respect of future revenues from
the sale of specified mineral assets to a person other than an Affiliate, (b)
such advances or deposits are recorded as liabilities, but not as debt, on the
consolidated balance sheet of Banro and (c) such liability is amortized upon the
delivery of such mineral assets.
Delivery Period
means the period beginning April 15, 2015 and ending on the date on
which the last Scheduled Monthly Quantity is delivered.
Disqualified Stock
means, with respect to any person, any shares, interests, rights to
purchase, warrants, options, participations or other equivalents of or interests
in (however designated) equity of such person, including any preferred stock and
limited liability or partnership interests (whether general or limited)
(collectively, Capital Stock) of such person that by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable) or upon the happening of any event:
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(i) |
matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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(ii) |
is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an incurrence of such Indebtedness or Disqualified Stock)); or |
- 4 -
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(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means,
with respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
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(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or otherwise. |
Encumbrances means,
with respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement;
provided that in no event shall an operating lease be deemed to constitute an
Encumbrance.
Environment means
the ambient air, all layers of the atmosphere, surface water, underground water,
all land (surface and underground), all living organisms and the interacting
natural systems that include components of air, land, water, organic and
inorganic matter and living organisms, and includes indoor and underground
spaces.
Environmental Laws
means any Applicable Laws relating to the Environment, occupational health or
safety, industrial hygiene, product liability or any past, present or future
activity, event or circumstance in respect of any Hazardous Materials (including
the use, handling, transportation, production, disposal, discharge or storage
thereof or the terms of any Approval issued in connection therewith) or the
environmental conditions on, under or about any real property (including soil,
groundwater and indoor, underground and ambient air conditions).
Gold Price means,
with respect to any day, the afternoon per ounce gold fixing price in U.S.
dollars quoted by the London Bullion Market Association for Refined Gold on such
day or, if such day is not a trading day, the immediately preceding trading day;
provided that if, for any reason, the London Bullion Market Association is no
longer in operation, or if the price of Refined Gold is not confirmed,
acknowledged by or quoted by the London Bullion Market Association, the Gold
Price shall be determined by reference to the price of Refined Gold in a manner endorsed by the World
Gold Council, failing which the Gold Price shall be determined by reference to
the price of gold on a commodity futures exchange mutually acceptable to the
Parties acting reasonably.
- 5 -
Governmental Authority
means any national, federal, state, provincial, regional, municipal,
territorial or local government, agency, department, ministry, authority, board,
bureau, tribunal, commission, official, court or securities commission, and any
person entitled under Applicable Law to exercise executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any of the
foregoing entities, including all tribunals, commissions, boards, bureaus,
arbitrators and arbitration panels, and any authority or other person controlled
by any of the foregoing.
Group Collateral has
the meaning set out in Section 8.2(b) .
Group Security Agreements
has the meaning set out in Section 8.2(b)
Guarantors means
Banro, Namoya Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and
Lugushwa Mining S.A.
Hazardous Materials
means any pollutant or Contaminant, including any hazardous, dangerous,
registrable or toxic chemical, material or other substance within the meaning of
any Environmental Law.
Indebtedness of any
person means, without duplication:
|
(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligation
until the amount of such obligation becomes a liability on the balance
sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
- 6 -
|
(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or obligor); |
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(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
- 7 -
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
|
(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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|
(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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|
(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
|
(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of
any of the Banro Group Entities; or |
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(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Insolvency Event
means, in relation to any person, any one or more of the following
events or circumstances:
|
(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
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(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar person appointed with respect to it or
any substantial portion of its property or assets unless such assignment or
appointment is dismissed within 60 days of commencement of such proceeding; |
- 8 -
|
(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it; or |
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(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any
person that provides any Secured Financing, excluding any Banro Group
Entity.
Material Adverse
Effect means any event, occurrence, change or effect that, when taken
individually or together with all other events, occurrences, changes or effects,
is or could reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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(ii) |
limit, restrict or impair the ability of the Seller to
operate the Twangiza Project in all material respects in accordance with
the Operating Plan for the Twangiza Project in effect at the time of the
event, occurrence, change or effect; |
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(iii) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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(iv) |
result in a Banro Event of Default. |
Minimum Gold Price
means $1,100 per ounce.
Monthly Delivery
Date means the date no later than the fifth Business Day after the end
of each calendar month.
Net Proceeds means
with respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Purchaser upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means
National Instrument 43-101 Standards of Disclosure for Mineral Projects
of the Canadian Securities Administrators, as may be amended from time to
time, or any successor instrument, rule or policy.
Note Indenture means
the indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as issuer, each of the guarantors named
therein and Equity Financial Trust Company, as trustee and collateral agent.
- 9 -
Operating Plan means
the life of mine operating plan for the Twangiza Project delivered to the
Purchaser on the date hereof.
Order means any
order, directive, decree, judgment, ruling, award, injunction, direction or
request of any Governmental Authority or other decision-making authority of
competent jurisdiction.
Parties means the
parties to this Agreement.
Payable Gold means
22,248 ounces of Refined Gold.
Permits means all
licenses, permits, approvals (including environmental approvals) authorizations,
rights (including surface and access rights and rights of way, and access to
water and power), privileges, concessions or franchises necessary for the
construction, development and operation of the Twangiza Project as is
contemplated by the Operating Plan.
Permitted Distributions
means any payment of Distributions required to satisfy any obligation
under this Agreement, Applicable Laws or the terms of any Secured Financing
entered into in accordance with this Agreement, as a result of any Affiliate of
any PSA Entity not otherwise having sufficient funds to satisfy such
obligation.
Permitted Encumbrances
means:
|
(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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|
(ii) |
following the termination of the Note
Indenture: |
|
(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
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(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any
registered easements and registered restrictions or covenants that run
with the land which do not materially detract from the value of, or materially
impair the use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
- 10 -
|
(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
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(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation obligations);
and |
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(H) |
liens in respect of the following: |
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[Details of individual lien holders
redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clause
(ii)(1), (4), (5), (7) and (9) of such definition. |
Permitted Indebtedness
means:
|
(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
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(ii) |
following the termination of the Note
Indenture: |
|
(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Purchaser and Namoya GSA
Holdings; |
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(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset
or service where payment for the asset or service is deferred for
a period of not more than 90 days; |
- 11 -
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(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
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(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 75% of the forecast gold production of the
Twangiza Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchaser or the Collateral Agent on
its behalf; and (B) the ranking of the PSA Obligations vis-à-vis such
secured Indebtedness shall correspond to the ranking of the PSA
Obligations vis-à-vis the notes issued under the Note Indenture; |
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(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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(9) |
Indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an
individual, corporation, body corporate, limited or general partnership, joint
stock company, limited liability corporation, joint venture, association,
company, trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prepayment Amount
means $20,000,000.
- 12 -
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture, those
Encumbrances that constitute Priority Liens (as defined in the Note
Indenture) ranking pari passu with the Secured Amount; |
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(ii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Plant
means any mill or other processing facility owned or operated or both by any
Banro Group Entity located on or near the Properties, to the extent that such
mill or processing facility was built with the primary intention of processing
ore from the Properties, or at which Produced Gold is processed.
Produced Gold means
any and all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore
or other products resulting from the further milling, processing or other
beneficiation of minerals mined, produced, extracted or otherwise recovered from
the Properties.
Project Assets means
the shares in the capital of the PSA Entities (other than Banro) and the
Properties, Processing Plant and all present and after-acquired real or personal
property, used or acquired for use by any Banro Group Entity in connection with
the mining, production or extraction of gold from the Properties.
Project Collateral
means (A) the Project Assets, including all present and after-acquired personal
property used in connection with, relating to or arising out of, in whole or in
part, the Project, and (B) the Produced Gold, and in each case including all
proceeds thereof except sales of Produced Gold in the ordinary course of
business.
Properties means the
mineral claims, mineral leases and other mining rights, concessions and
interests listed in Schedule A, including all buildings structures improvements,
appurtenances and fixtures that form part of the Twangiza Project, whether
created privately or by the action of any Governmental Authority, and includes
any term extension, renewal, replacement, conversion or substitution of any such
mineral claims, mineral leases and other mining rights, concessions or
interests, owned or in respect of which an interest is held, directly or
indirectly, by any Banro Group Entity at any time during the Delivery Period,
whether or not such ownership or interest is held continuously. The Properties
are depicted in the map included in Schedule A.
PSA Collateral means
the Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means
Banro and the Seller, and any other Affiliate of Banro (now or hereafter
incorporated) that acquires any interest in the Twangiza Project.
PSA Obligations
means all present and future debts, liabilities and obligations of PSA Entities,
or all of them, to the Purchaser under this Agreement.
- 13 -
PSA Security means
the charges and security interests granted in favour of the Purchaser pursuant
to the Security Agreements.
Purchaser Event of
Default has the meaning set out in Section 11.1.
Receiving Party has
the meaning set out in Section 6.4(a) .
Refined Gold means
marketable metal bearing material in the form of gold bars or coins that is
refined to standards meeting or exceeding 995 parts per 1,000 fine gold.
Reimbursable
Expenses has the meaning set out in Section 13.3.
Restricted Person
means any person or entity that:
|
(i) |
is named, identified, described on or included on any
of: |
|
(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
|
(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
|
(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
|
(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Scheduled Monthly
Quantities means 618 ounces of Refined Gold.
Secured Amount has
the meaning set out in Section 8.2(a) .
- 14 -
Secured Financing
means any Indebtedness for borrowed money of, or lending facility or
other financing arrangement (including any secured derivative transactions
entered into in connection with such Indebtedness, or any other hedge financing)
in favour of, any Banro Group Entity that is secured by all or any part of the
Project Assets.
Security Agreements
means the Seller Security Agreements, the Group Security Agreements and
the Assignment, Subordination and Postponement of Claims.
Seller Security Agreements
has the meaning set out in Section 8.2(a) .
Tax or
Taxes means all taxes, surtaxes, levies, tariffs, fees,
assessments and other charges, duties, and impositions, including any interest,
penalties, tax instalment payments or other additions that may become payable in
respect thereof, imposed by any Governmental Authority, which taxes shall
include all income or profits taxes (including federal, provincial, and state
income taxes) other than income or profits taxes levied in respect of the income
or profits of the Purchaser, non-resident withholding taxes, sales and use
taxes, branch profit taxes, ad valorem taxes, excise taxes, franchise taxes,
gross receipts taxes, business licence taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer taxes, land
transfer taxes, capital taxes, extraordinary income taxes, surface area taxes,
property taxes, asset transfer taxes, and other charges and obligations of the
same or of a similar nature to any of the foregoing.
Time of Delivery has
the meaning set out in Section 2.2(b) .
Transfer means to
sell, transfer, assign, convey, dispose or otherwise grant a right, title or
interest (including expropriation or other transfer required or imposed by law
or any Governmental Authority, whether voluntary or involuntary).
Twangiza Holdcos
means together, Banro Group (Barbados) Limited and Twangiza (Barbados)
Limited.
Twangiza Project
means the Properties and the mining operations developed, constructed
and operated at and in respect of the Properties.
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
|
(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
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(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
- 15 -
|
(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
|
(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an obligation; |
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(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second person; |
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(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
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|
(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
and controls, controlling,
controlled by and under common control have corresponding meanings.
|
(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to time. |
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(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A |
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Description of Sellers Properties (with map)
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Schedule B |
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Security Agreements |
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Schedule C |
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Banro and Seller Representations and Warranties
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Schedule D |
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Purchaser Representations and Warranties |
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Schedule E |
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Termination Amount |
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Schedule F |
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Dispute Resolution |
ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable
Gold |
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(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Seller, the Payable Gold,
free and clear of all Encumbrances, in exchange for the Prepayment
Amount. |
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(b) |
As further provided in Section 4.3(b) Payable Gold shall
not be reduced for, and the Purchaser shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable processor agreement. |
2.2 |
Delivery
Obligations |
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(a) |
During the Delivery Period, the Payable Gold shall be
sold and delivered to the Purchaser on each Monthly Delivery Date in the
Scheduled Monthly Quantities in accordance with the terms of this
Agreement. |
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(b) |
The Seller shall deliver to the Purchaser all Payable
Gold to be delivered under this Agreement by way of credit or allocation
to the metal account or accounts designated by the Purchaser from time to time, or physical
delivery to such other location specified by the Purchaser from time to time on
15 Business Days prior written notice or as otherwise consented to by the
Seller, such consent not to be unreasonably withheld. Delivery of the Payable
Gold to the Purchaser shall be deemed to have been made at the time on the date
the Payable Gold is credited or allocated or physically delivered, as
applicable, to the designated metal account of the Purchaser (the Time
of Delivery). Title to, and risk of loss of, the Payable Gold shall
pass from the Seller to the Purchaser at the Time of Delivery. The Seller
acknowledges that the Purchaser intends to engage a selling agent that will take
delivery of the Payable Gold on behalf of the Purchaser for purposes of
monetizing the Payable Gold. All costs and expenses pertaining to each delivery
of the Payable Gold to the Purchaser, including such selling arrangements, shall
be borne by the Seller so long as the Purchasers accounts are in customary
locations in United Kingdom, Switzerland or South Africa. |
- 17 -
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(c) |
The Seller hereby represents and warrants to the
Purchaser that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of the Purchaser, (ii) the Seller will
have good, valid and marketable title to such Payable Gold, and (iii) such
Payable Gold will be free and clear of all Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchaser,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchaser, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchaser the Refined Gold physically resulting
from Produced Gold. |
ARTICLE 3
PREPAYMENT
3.1 |
Prepayment |
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(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchaser of the Payable Gold, the Purchaser hereby agrees to pay the
Prepayment Amount in cash against, and as a prepayment of the purchase
price for the Payable Gold, subject to the conditions set out in Sections
3.2 and 3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Prepayment Amount except as expressly provided in this
Agreement. The Purchaser will not be entitled to demand repayment of the
Prepayment Amount except to the extent expressly set forth in this
Agreement. |
- 18 -
3.2 |
Use of Prepayment
Amount |
The Seller shall use, and Banro shall cause to be used, the
Prepayment Amount only to pay certain outstanding dividends as of the last
payment date on or prior to the date of receipt by the Seller of the Prepayment
Amount on preferred shares in the capital of Banro Group (Barbados) Limited and
the Series A preferred shares in the capital of Banro, to repay accounts payable
and thereafter, for general corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchaser |
The Purchaser shall pay the Prepayment Amount to or to the
order of the Seller on the Closing Date, by wire transfer of immediately
available funds to the bank account or accounts designated by the Seller in
writing, once each of the following conditions has been satisfied in full:
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(a) |
Banro and the Seller shall have delivered to the
Purchaser a certificate of status, good standing or compliance (or
equivalent) for each PSA Entity and the Twangiza Holdcos, issued by the
relevant Governmental Authority dated no earlier than five Business Days
prior to the Closing Date; |
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(b) |
Each PSA Entity shall have executed and delivered to the
Purchaser a certificate of a senior officer of each in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Purchaser may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the
Purchaser a favourable opinion, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from external
legal counsel to Banro, the Seller, the Twangiza Holdcos and the PSA
Entities as to (i) the legal status of each, (ii) the corporate power and
authority of each to execute, deliver and perform this Agreement and the
Security Agreements to which it is a party, (iii) the execution and
delivery of this Agreement and the Security Agreements to which it is a
party and the enforceability of this Agreement and the Security Agreements
against each, (iv) that this Agreement and the Security Agreements, and
the performance by Banro and the Seller of the obligations hereunder or
thereunder, do not conflict with, violate, result in a breach of, or
constitute a default or an event creating rights of acceleration,
termination, modification or cancellation or a loss of rights under (with
or without the giving notice or lapse of time or both), the Note
Indenture, the Collateral Trust Agreement, or any of the Collateral
Documents (as defined in the Note Indenture) governed by Ontario law, (v)
the outstanding share capital of the Seller and the Twangiza Holdcos, (vi)
the creation of valid mortgages and charge upon, and security interests in
(including as to ranking of such security interests), the PSA Collateral
under the Security; and (vii) the due registration or filing of the
Security Agreements and, where applicable, the perfection of
the security interest of the Purchaser (including as to ranking of
such security interests), under such Security Agreements and the results of the
usual searches that would be conducted in connection with the security that is
the subject of such Security Agreements; |
- 19 -
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the
Purchaser a legal opinion addressed to the Purchaser from external
counsel, in form and substance satisfactory to the Purchaser, with respect
to title to the Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
except for those that would not
reasonably be expected to have a Material Adverse Effect;
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(g) |
each PSA Entity shall have delivered to the Purchaser a
certificate of a senior officer confirming: |
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(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse
Effect; |
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(h) |
Banro shall have amended the Note Indenture and the
Collateral Trust Agreement and security agreements as required by the
Purchaser to, among other things, characterize the Secured Amount as a
Priority Lien Debt (as defined in the Note Indenture), require the trustee
under such Collateral Trust Agreement and security agreements to transfer
the Project Collateral only in accordance with the terms of the gold
purchase and sale agreement among Banro, Namoya Mining S.A.
and Namoya GSA Holdings, and to preserve the collateral trust
following termination of the Note Indenture; |
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(i) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchaser under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchaser, under such Security
Agreements; |
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(j) |
Banro and the Seller shall execute and deliver an
agreement with the Purchaser and Auramet International LLC ("Auramet"),
creating an account in favour of the Purchaser and setting out the terms
by which Auramet will assist the Purchaser in monetizing deliveries of
Payable Gold; |
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(k) |
in accordance with Applicable law, Banro shall cause each
of [names of individuals redacted] and each other equity holder of any
Banro Group Entity that is an individual, but is not either an employee of
Banros counsel in Democratic Republic of Congo or an employee of Banro to
transfer for no or nominal consideration their ownership of any such
equity securities to one or more current employees of Banros counsel in
Democratic Republic of Congo or current employees of Banro; |
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(l) |
the Seller paid all Reimbursable Expenses of the
Purchaser payable as at the Closing Date; and |
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(m) |
Banro and the Seller shall have delivered to the
Purchaser prior to the Closing Date a certificate of insurance coverage or
other evidence of acceptable insurance
coverage. |
3.4 |
Conditions Precedent in Favour of the
Seller |
On or before the Closing Date, the Purchaser will satisfy each
of the following conditions:
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(a) |
the Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for the
Purchaser, issued by the relevant Governmental Authority; |
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(b) |
the Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of the Purchaser, in form
and substance satisfactory to Banro and the Seller, acting reasonably, as
to the constating documents of the Purchaser; the resolutions of the sole
director of the Purchaser, authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
the names, positions and true signatures of the persons authorized to sign
this Agreement on behalf of the Purchaser; and such other matters
pertaining to the transactions contemplated hereby as Banro and the Seller
may reasonably require; |
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(c) |
the Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to the
Purchaser as to (i) the legal status of the Purchaser, (ii) the corporate
power and authority of the Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
the Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by the Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice or lapse of time
or both would become a Purchaser Event of Default) has occurred and is
continuing. |
3.5 |
Satisfaction of Conditions
Precedent |
(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchaser, and may be waived by the Purchaser
in its sole discretion in whole or in part in writing. Each of the
conditions set forth in Section 3.4 is for the exclusive benefit of Banro
and the Seller, and may be waived by Banro and the Seller in their sole
discretion in whole or in part in writing. |
ARTICLE 4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
4.2 |
Additional Gold
Deliveries |
On each Additional Gold Delivery Date, the Seller shall sell
and deliver to the Buyer an amount of Refined Gold (an Additional Gold
Delivery Amount) equal to the greater of:
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(a) |
zero; and |
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(b) |
the product of: |
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(i) |
the Scheduled Monthly Quantity delivered on the Monthly
Delivery Date corresponding to such Additional Gold Payment Date, and |
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(A) |
the Minimum Gold Price |
minus
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(B) |
the Gold Price on the Business Day following the Monthly
Delivery Date, |
divided by the Gold Price on the
Business Day following the Monthly Delivery Date.
Each Additional Gold Delivery Amount shall be delivered in
accordance with the provisions of this Agreement.
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(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchaser shall be made without any deduction, withholding, charge or levy
on account of any Taxes, all of which shall be for the sole account of the
Seller. All Taxes, if any, as are required to be so deducted, withheld,
charged or levied by the Seller or any of its Affiliates on any such
delivery or payment, shall be paid by the Seller delivering or paying to
the Purchaser or on their behalf, in addition to such delivery or payment,
such additional delivery or payment as is necessary to ensure that the net
amount received by the Purchaser (net of any such Taxes, including any
Taxes required to be deducted, withheld, charged or levied on any such
additional amount) equals the full amount that the Purchaser would have
received had no such deduction, withholding, charge or levy been
required. |
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(b) |
If the Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.3(a) hereof, the Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.3(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of the Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of the Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental
Authority. |
In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Purchaser, on the one hand, and the Seller on the other
hand, agree that they shall negotiate in good faith with each other to amend
this Agreement so that the other Parties and their Affiliates are no longer
adversely affected by any such enactment, revision, implementation, amendment or
interpretation, as the case may be; provided that any amendment to this
Agreement shall not have any adverse effect on the Seller and its Affiliates on
the one hand, and the Purchaser and its Affiliates on the other hand.
- 23 -
Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date, calculated and
compounded monthly in arrears. Any dollar amount or Refined Gold owing by a
Party to any other Party under this Agreement may be set off against any dollar
amount or Refined Gold owed to such Party by the other Party. Any amount of
Refined Gold set off and withheld against any non-payment by a Party shall be
valued at the Gold Price as of the first trading day that such amount of Refined
Gold became payable to such Party.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
5.1 |
Notice of
Information |
Prior to delivery to the Purchaser of any of the information
set out in this Article 5 or otherwise in this Agreement, Banro and the Seller
shall inform the Purchaser if such information would be considered material
non-public information of Banro. In such event, the Purchaser shall have the
option, in its sole discretion, to (a) refuse to accept such information, or (b)
require that such information be either (i) publicly disclosed within two
Business Days, or (ii) where such information constitutes scientific and
technical information representing a material change to the Twangiza Project,
delivered at a subsequent date within 45 days, together with an updated
technical report in accordance with NI 43-101, and notice of such refusal or
delayed delivery will constitute a valid waiver, or partial waiver, as the case
may be, of the obligation to deliver such information.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchaser:
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(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis, including: |
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(i) |
types, tonnes and gold grade of ore to be mined; and |
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(ii) |
types, tonnes and gold grade of ore to be stockpiled; |
- 24 -
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 5.2(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
5.3 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 5.2(a),
5.2(b), 5.2(c) and 5.2(e) shall be provided by the Seller to the Purchaser. For
the purposes of this Section 5.3 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
If during the Delivery Period, Banro shall cease to be a
reporting issuer under Applicable Law, the PSA Entities shall permit the
Purchaser and its authorized representatives and agents to perform audits or
other reviews and examinations of its books and records from time to time at
reasonable times at the Purchasers sole risk and expense and upon five Business
Days notice, to confirm compliance with the terms of this Agreement, provided
that unless there is a continuing Banro Event of Default, the Purchaser and its
authorized representatives and agents will not exercise such rights more often
than one (1) time during any calendar quarter. The Purchaser shall diligently
complete any audit or other examination permitted hereunder.
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchaser and its
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Twangiza Project, in each case to monitor the mining and
processing operations on the Twangiza Project. Provided there has been no Banro Event of
Default that is continuing, the Purchaser may avail itself of such right of
access a maximum of twice per calendar year (including the mill in respect
thereof), and for this purpose, invitations from Banro will not reduce the
number of visits the Purchaser may request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchaser shall have the
right to conduct an investors tour on the Twangiza Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Twangiza Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchaser and its invitees, and the Purchaser shall (a)
comply and request that its invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchaser or Banro and the Seller or any
of their respective invitees, employees, officers, directors, agents, or
representatives caused by the Purchasers exercise of its rights under
this Section. |
ARTICLE 6
COVENANTS
6.1 |
Conduct of
Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Twangiza Project Assets on a commercial basis as
though the Seller has a full economic interest in all the gold produced
from the Properties. Banro and the Seller shall ensure that (i) all
cut-off grade, short term mine planning and production decisions
concerning the Twangiza Project shall be based on gold prices typical of
normal industry practice and consistent with the practices of Banro and
its Affiliates as at the date of this Agreement in connection with such
decisions, and (ii) all longer term planning and resource and reserve
calculations concerning the Twangiza Project shall use gold prices based
on normal industry practice and consistent with the historical practices
of Banro and its Affiliates in connection with such planning and
calculations. |
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(b) |
Subject to Section 6.1(a), all decisions regarding the
Twangiza Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Twangiza Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Twangiza Project, and (iv) except as provided herein, the sale of gold and terms
thereof, shall be made by the Seller, in its sole
discretion. |
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|
(c) |
Notwithstanding Section 6.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Twangiza Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
6.2 |
Preservation of Corporate
Existence |
|
(a) |
Except as permitted in Section 6.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 7.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in
favour of the Purchaser all the obligations of such Party under this
Agreement and any Security Agreement to which it is a
party. |
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(a) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(b) |
Banro and the Seller shall insure the Twangiza Project in
such amounts and with such coverage as is customary in the mining industry
for the operation of the Twangiza Project. Banro and the Seller covenant
and agree that in the event of any loss or damage that is insured prior to
the end of the Delivery Period, the Seller shall at its option either (i)
use all Net Proceeds of any insurance payment received by a Banro Group
Entity to rebuild or repair all damaged facilities forming part of the
Twangiza Project, or (ii) use the Purchasers share of the Net Proceeds of
such insurance payment received by any Banro Group Entity within 30 days
after receipt of such proceeds by such Banro Group Entity, to acquire
Refined Gold in accordance with Section 2.2(d) and shall deliver to the
Purchaser such amount of Refined Gold, the Purchasers share being
calculated as the ratio of the net present value of Payable Gold not
delivered to the Purchaser to the value of the Twangiza Project when
measured by the same criterion which establishes the value of such
Purchasers interest. A failure to agree on the foregoing proportion is
arbitrable under Section 13.1. |
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(c) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Purchaser at reasonable
intervals no more than once per year, furnish to the Purchaser a
certificate setting forth the nature and extent of
all insurance maintained by or on behalf of the PSA Entities in
accordance with Section6.3(a) . Banro and the Seller shall, upon the request of
the Purchaser, provide the Purchaser with copies of all insurance policies as in
effect from time to time relating to the Project Assets. |
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(d) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
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(a) |
Each Party (a Receiving Party) agrees
that it shall maintain as confidential and shall not disclose, and shall
cause its Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 5, 2014
(Confidential Information), provided that a Receiving
Party may disclose Confidential Information in the following
circumstances: |
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(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 6.4(c) and 13.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 13.1; |
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the disclosure of such
information would not breach any other confidentiality obligations; |
- 28 -
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(v) |
with the consent of the disclosing Party; and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
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(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 6.4(a)(i) are made aware of this Section 6.4 and
comply with the provisions of this Section 6.4. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Purchaser will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 6.4(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
6.5 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchaser
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 6.5, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
- 29 -
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Twangiza Project.
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Twangiza
Project.
[Redacted]
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(a) |
During the Delivery Period, Banro shall not (i) declare
or pay any dividend on the common shares in the capital of Banro, or (ii)
make any payments to directors or management of Banro not in the ordinary
course of business, and shall not, and will cause the Banro Group Entities
to not, pursue any construction of projects other than the Twangiza
Project and the projects known as the Namoya Project, the Kamituga Project
and the Lugushwa Project and will not pursue any exploration activities
other than in connection with such projects and with respect to properties
held by Banro Congo Mining S.A. |
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(b) |
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Purchaser in
accordance with the terms of this Agreement. The Parties acknowledge and
agree that any breach by Banro of its obligations under this Section would
cause the Purchaser irreparable harm for which monetary damages alone
would not be a sufficient remedy and that therefore the Purchaser may seek
and obtain orders of specific performance, injunctions and other equitable
remedies and remedies available under civil laws against Banro with
respect thereto as a court of competent jurisdiction or an arbitrator
under Section 13.1 may see fit to grant with respect to any such breach
and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies. |
ARTICLE 7
BANRO TRANSFERS AND CONTROL
7.1 |
Owner of Project
Assets |
Subject to Section 7.3 and except as provided in Section8.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 7.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including without limitation
taking all actions necessary, and making such expenditures and investments as
are required, to keep its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights in good standing. Without limiting
the generality of the foregoing, Banro and the Seller shall apply for and obtain
any and all available renewals and extensions of the its mineral claims, mineral
leases, mineral and exploration licenses and other mining rights and Approvals
in respect of the Properties. Notwithstanding the foregoing, this Section 7.1
shall not restrict any leased personal property (provided that the lessee is the
Seller) or personal property that is equipment that is obsolete or no longer in
use under the Operating Plan.
- 30 -
7.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 7.3, Banro and the Seller shall
not, and shall ensure that the Twangiza Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 7.3(c), holding Project Assets, does not during the Delivery Period:
|
(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 7.3(c), holding Project
Assets. |
7.3 |
Permitted Transfers and Changes of
Control |
Section 7.2 shall not prohibit a Transfer or Change of Control,
if:
Transfer of the Project Asset
|
(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA
Entity: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Purchaser all of the Sellers
and, if applicable, the other Banro Group Entities obligations under this
Agreement pursuant to an agreement in form and substance satisfactory to
the Purchaser, acting reasonably; |
- 31 -
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
8.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 8.2 |
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(a)(vii)); |
Change of Control
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(b) |
in the case of a Change of Control of Banro, the Seller,
the Twangiza Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
7.3(c): |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed Change of
Control; |
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(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
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(A) |
assumes in favour of the Purchaser all of the obligations
of Banro under this Agreement, such assumption to occur by an agreement in
form and substance satisfactory to the Purchaser, acting reasonably;
and |
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(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
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(iii) |
in respect of such Change of Control: |
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(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 8.2; |
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(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(v) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(b)(v)); |
Inter-corporate Transfer
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(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of Banro: |
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(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
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(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
7.3(a)(i) through 7.3(a)(vii) are complied with mutatis mutandis;
or |
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(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
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(1) |
the provisions of Sections 7.3(a)(i), 7.3(a)(iv),
7.3(a)(v) and 7.3(a)(vi) are complied with mutatis mutandis; and |
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(2) |
the Seller provides a confirmation in favour of the
Purchaser that its obligations under this Agreement shall continue in full
force and effect despite any such Transfer; |
Joint Ventures and Minority Dispositions
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(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
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(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
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(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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(iv) |
such other person agrees in a document, or documents,
acceptable to the Purchaser, acting reasonably, with the PSA Entity, the
Purchaser and any other such person to acknowledge the obligations of the
Seller under this Agreement and the Security Agreements, including the
granting to the Purchaser of all the security interests contemplated
thereunder; provided that, if such other person acquires any legal right,
title or interest in and to any of the Project Assets (including any
registered or recorded title in and to the Properties), such person
assumes on a joint and several basis with the Seller all of the
obligations and duties under this Agreement and grants the same charges
and security interests in, to and over the Project Assets to which it
acquires any legal right, title or interest, and enters into the same
Security Agreements entered into by the Seller and its subsidiaries
pursuant to Section 8.2; |
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(v) |
all filings have been made and all other actions have
been taken that are required in order for the Purchaser to continue at all
times following such transaction to have the valid and perfected security
interest contemplated by Section 8.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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(viii) |
the Purchaser confirms in writing that it does not
reasonably expect such minority interest disposition, joint venture or
other similar commercial arrangement to have a Material Adverse Effect;
or |
With Consent
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(e) |
the Purchaser provides its prior written
consent. |
ARTICLE 8
SECURITY
8.1 |
Financings and
Encumbrances |
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(a) |
During the Delivery Period, except for Permitted
Indebtedness, no PSA Entity shall incur or enter into any
Indebtedness. |
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(b) |
Except as provided in this Article 8, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
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(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, guaranteeing the performance, when due, of
all PSA Obligations; and (ii) grant, as security for the payment and
performance, when due, of all PSA Obligations, to and in favour of the
Purchaser first ranking charges and security interests (subject only to
the Prior Ranking Permitted Encumbrances) in, to and over Project
Collateral (other than the Properties and Processing Plant), pursuant to
one or more agreements (the Seller Security Agreements)
executed by each to and in favour of the Purchaser, in form and substance
satisfactory to the Purchaser, acting reasonably, the charged amount (the
Secured Amount) of such charges and security interests
being initially the Prepayment Amount, such amount to reduce rateably upon
delivery of each Scheduled Monthly Quantity. |
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(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Purchaser, in form and substance satisfactory
to the Purchaser, acting reasonably, guaranteeing the payment and
performance, when due, of all PSA Obligations; and (ii) grant, as security
for its obligations under such guarantee to and in favour of the
Purchaser, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral),
all pursuant to one or more agreements (collectively, the Group
Security Agreements), in form and substance satisfactory to the
Purchaser, acting reasonably. |
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(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and
Postponement of Claims), in favour of and in form and substance
satisfactory to the Purchaser, acting reasonably, that subordinates and
postpones the enforcement of any such debts, liabilities and obligations
and the realization of any charges or security interests to secure such
claims to the Security Agreements and, from and after a Banro Event of
Default, or any event or circumstance which, with notice, the passage of
time or both, would constitute a Banro Event of Default, and until such
Banro Event of Default is remedied, subordinates and postpones the payment
of all such debt, liabilities and obligations (other than Permitted
Distributions) to the payment in full of all debts, liabilities and
obligations of the Banro Group Entities to the Purchaser. |
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(d) |
If so requested in writing by the Purchaser, the Banro
Group Entities shall not, for so long as a Banro Event of Default, or any
event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, continues, make any
Distribution other than a Permitted Distribution. |
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(e) |
At the Purchasers request, Banro shall, and shall cause
the Seller (and any other Banro Group Entity from which Produced Gold is
sold) to provide in any Processing Agreement or selling agreement that the account with
any third party in respect of any Refined Gold related to the Produced Gold will
form part of the Project Collateral. For certainty, and at all times, the Seller
shall not, and Banro shall ensure that the Seller does not, make any
Distributions other than a Permitted Distribution from such account if a Banro
Event of Default, or event which with the giving of notice or the passage of
time or both would constitute a Banro Event of Default, has occurred and is
continuing, or if a Banro Event of Default would occur or arise immediately
after, or as a result of, making a Distribution. |
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(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Purchaser may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Purchaser has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Purchaser continues to secure the PSA Obligations and with no change in
the priority thereof. The Seller shall pay all costs and expenses
associated with the foregoing including in connection with the preparation
and registration of all documentation in connection therewith that is
required by the Purchaser. |
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
8.3 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Purchaser shall have
substantially similar access rights and obligations as provided in Section 5.5.
- 36 -
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Purchaser is
entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule C to the Purchaser on and
as of the date of this Agreement on a joint and several basis. The
representations and warranties set forth in Schedule C shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
9.2 |
Representations and Warranties of the
Purchaser |
The Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, hereby makes the
representations and warranties set forth in Schedule D to Banro and the Seller
on and as of the date of this Agreement. The representations and warranties set
forth in Schedule D shall be deemed to be repeated by the Purchaser as of the
date of the Closing Date.
9.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule C and
Schedule D shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
ARTICLE 10
BANRO EVENTS OF DEFAULT
10.1 |
Banro Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of
Default):
|
(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchaser on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Purchaser
notifying the Seller of such default; |
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(b) |
other than as provided in Section 10.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by
the Purchaser to the PSA Entities of written notice of such breach
or default, or such longer period of time as the Purchaser may determine in its
sole discretion; |
- 37 -
|
(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Purchaser to Banro and the Seller of written notice of
such inaccuracy, or such longer period of time as the Purchaser may
determine in its sole discretion; |
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(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
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(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Purchaser notifying the PSA Entities of such
default. |
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(a) |
If a Banro Event of Default occurs and is continuing, the
Purchaser shall have the right, upon written notice to Banro and the
Seller at its option and in addition to and not in substitution for any
other remedies available at law or equity, to take any or all of the
following actions: |
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(i) |
demand all amounts and deliveries owing by the Seller to
the Purchaser; |
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(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 10.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the Purchaser
hereunder, but for the occurrence of such Banro Event of Default. Upon demand
from the Purchaser, the Seller shall promptly pay all such amounts to the
Purchaser; and |
- 38 -
|
(iii) |
enforce the PSA Security. |
|
(b) |
The Parties hereby acknowledge and agree that: (i) the
Purchaser will be damaged by a Banro Event of Default; (ii) it would be
impracticable or extremely difficult to fix the actual damages resulting
from a Banro Event of Default; (iii) any sums payable in accordance with
Section 10.2(a) with respect to a Banro Event of Default are in the nature
of liquidated damages, not a penalty, and are fair and reasonable; and
(iv) the amount payable in accordance with Section 10.2(a) or with respect
to a Banro Event of Default represents a reasonable estimate of fair
compensation for the losses that may reasonably be anticipated from such
Banro Event of Default in full and final satisfaction of all amounts owed
in respect of such Banro Event of Default. |
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(c) |
For greater certainty, if the Purchaser does not exercise
its right under Section 10.2(a)(ii), the obligations of Banro and the
Seller or any successors shall continue in full force and
effect. |
ARTICLE 11
PURCHASER EVENTS OF DEFAULT
11.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of
Default):
|
(a) |
the Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect, and such breach or default is not remedied within a period of 30
days following delivery by the Seller to the Purchaser of written notice
of such breach or default, or such longer period of time as the Seller may
determine in its sole discretion; or |
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(b) |
any of the representations or warranties given by the
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to the Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
If all of the conditions precedents set out in Section
Error! Reference source not found.Error! Reference source not
found.Error! Reference source not found.3.3 have been satisfied and a
Purchaser Event of Default in respect of a failure to pay the Prepayment Amount
occurs and is continuing and the Purchaser fails to cure such Purchaser Event of
Default in full within 90 days of written notice from the Seller of such
default, then the Seller may elect to at any time thereafter so long as the Purchaser has not already cured the
Purchaser Event of Default, to terminate the Agreement. In the event of any
other Purchaser Event of Default under Section 11.1 having occurred that is
continuing, then Banro and the Seller shall have no right to terminate this
Agreement, but shall be entitled to all other remedies available to it at law or
in equity.
- 39 -
ARTICLE 12
TERMINATION ENTITLEMENT
12.1 |
Termination
Entitlement |
If the Seller wishes to terminate the delivery of Payable Gold
to the Purchaser during the Delivery Period in accordance with the terms and
conditions of this Agreement (a Seller Termination Event), it
shall provide written notice thereof to the Purchaser and the purchase of
Refined Gold not delivered shall be cancelled and the Purchaser shall be
entitled to receive a one-time termination amount (the Termination
Amount) [Commercially sensitive information
redacted].
ARTICLE 13
GENERAL
13.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officer of each of Banro and the Purchaser for prompt
resolution. Any such dispute, controversy or claim which cannot be resolved by
the chief executive officers within 15 days after it has been so referred to
them hereunder, including the determination of the scope or applicability of
this Agreement to arbitrate, shall be settled by binding arbitration in
accordance with the rules for arbitration set out in Schedule F. The
determination of such arbitrator shall be final and binding upon the Parties and
there shall be no appeals from any determination of the arbitrator. Judgment on
the award may be entered in any court having jurisdiction. This Section 13.1
shall not preclude the Parties from seeking provisional remedies in aid of
arbitration from a court of competent jurisdiction. The Parties covenant and
agree that they shall conduct all aspects of such arbitration having regard at
all times to expediting the final resolution of such arbitration.
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
- 40 -
13.3 |
Reimbursement of
Expenses |
|
(a) |
The Seller and Banro shall pay to the Purchaser all
reasonable costs and expenses (including all reasonable legal fees and
disbursements of counsel) incurred by the Purchaser in connection with
this Agreement and the other related transactions,
including: |
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(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Purchaser and any on-site inspections by the Purchaser or its
representatives; |
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(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated thereunder; |
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(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Purchaser at law or in
equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
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(viii) |
the incorporation and organization of the Purchaser, as
well as the initial issuances of notes or other investment instruments
required to capitalize the Purchaser with the Prepayment Amount;
and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Purchaser, including fees and expenses related to
fiscal and collateral agents, valuation tax reporting and
audit. |
(collectively, the
Reimbursable Expenses).
|
(b) |
The obligations of the Seller under this Section 13.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
- 41 -
13.4 |
Termination;
Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 6.4, 6.8, 10.2, 11.2,
13.1, 13.7, 13.9 and Schedule F and such other provisions of this Agreement as
are required to give effect thereto.
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Purchaser and any Banro Group Entity.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Purchaser on the one hand and any Banro Group
Entity on the other hand.
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
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(a) |
If to either Banro or the Seller, to: |
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Banro Corporation |
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1 First Canadian Place |
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Suite 7070, 100 King Street West |
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Toronto, Ontario, M5X 1E3, Canada |
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Attention: Chief Financial Officer |
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Telecopier No.: 416-366-7722 |
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with a copy to: |
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Norton Rose Fulbright Canada LLP |
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Royal Bank Plaza, South Tower, Suite
3800 |
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200 Bay Street |
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Toronto, Ontario, M5J 2Z4, Canada |
- 42 -
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Attention: Mike Moher |
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Telecopier No.: 416- 216-3930 |
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(b) |
If to the Purchaser, to: |
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[Redacted] |
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with a copy to: |
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Goodmans LLP |
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333 Bay Street, Suite 3400 |
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Toronto, Ontario M5H
2S7 |
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Attention: Kari MacKay |
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Telecopier No.: 416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or equitable right, benefit or
remedy of any nature or kind whatsoever under or by reason of this Agreement.
- 43 -
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
13.13 |
Priority Debt Sharing
Confirmation |
The Purchaser hereby agrees, for the benefit of all holders of
each other existing and future Series of Priority Lien Debt and each existing
and future Priority Debt Representative, that all Priority Lien Obligations will
be and are secured equally and ratably by all Liens (as defined in the
Collateral Trust Agreement) at any time granted by Banro or any Obligor (as
defined in the Collateral Trust Agreement) to secure the obligations in respect
of the Priority Notes, whether or not upon property otherwise constituting
Collateral (as defined in the Collateral Trust Agreement), that all such Liens
will be enforceable by the Collateral Agent for the benefit of all holders of
Priority Lien Obligations equally and ratably (except that the Priority Stream
Obligations (as defined in the Collateral Trust Agreement) shall be paid in
priority to the other Priority Lien Obligations in accordance with Section
3.4(a) of the Collateral Trust Agreement), and that the Purchaser is bound by
the provisions in the Collateral Trust Agreement relating to the order of
application of proceeds from enforcement of such Liens, and consent to and
direct the Collateral Agent to perform its obligations under the Collateral
Trust Agreement.
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
- 44 -
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(b) |
The Purchaser shall be entitled at any time and from time
to time to Transfer any, or all, of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 7.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Purchaser. In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
TWANGIZA GFSA HOLDINGS |
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Per: |
(signed) |
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Name: |
[Redacted] |
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Title: |
[Redacted] |
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BANRO CORPORATION |
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Per: |
Richard Brissenden |
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Name: |
Richard Brissenden |
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Title: |
Chairman of the Board |
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TWANGIZA MINING S.A. |
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Per: |
Desire Sangara |
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Name: |
Desire Sangara |
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Title: |
Chairman of the Board
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SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. Dated
as of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY AGREEMENTS
This is Schedule B to the Gold Purchase and
Sale Agreement between Twangiza GFSA Holdings, Banro Corporation and Twangiza
Mining S.A. Dated as of February 27, 2015
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Joinder and sharing confirmations as Priority
Lien Debt |
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Guarantees contemplated by Section 8.2(b)
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Assignment, Subordination and Postponement of
Claims contemplated by Section 8.2(c) |
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Pledge of accounts with Auramet International
LLC |
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Pledge of accounts with any Processor
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SCHEDULE C
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule C to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchaser as
follows:
|
(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non-assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Twangiza (Barbados) Limited; |
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(f) |
the authorized share capital of Twangiza (Barbados)
Limited consists of an unlimited number of common shares and 20,000
preferred shares, of which, as of the date hereof, (i) only 1,200,000 common shares are issued
and outstanding as fully paid and non-assessable shares in the capital of
Twangiza (Barbados) Limited and are legally and beneficially owned as to 100% by
Banro Group (Barbados) Limited, and (ii) only 20,000 preferred shares are issued
and outstanding as fully paid and non-assessable shares in the capital of
Twangiza (Barbados) Limited and are legally and beneficially owned as to 100% by
investment funds managed by Gramercy Funds Management LLC; |
- 2 -
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right,
title or interest in or to, the Twangiza Project, the Properties, the
Project Assets or the gold produced from the Properties; |
- 3 -
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Twangiza Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities, other than those that
are not necessary on the date this representation and warranty is given
and are expected to be obtained in the ordinary course of business by the
time they are necessary, where the failure to have or obtain such
Approvals would not reasonably be expected to have a Material Adverse
Effect, and there are no facts or circumstances that might reasonably be
expected to adversely affect the issuance or obtaining of any such
material Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Twangiza Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Twangiza Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
- 4 -
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Twangiza
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Twangiza Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Twangiza Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the |
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Bribery Act (United Kingdom)). Without limiting
the generality of the foregoing, each Banro Group Entity is in material
compliance with all applicable Environmental Laws, and there are no
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending or, to the best of its knowledge, threatened against
or affecting any Banro Group Entity with respect to the ownership, use,
maintenance and operation of any of the Twangiza Project, the Properties
and the Project Assets relating to any applicable Environmental Laws,
where any adverse determination with respect thereto or liability imposed
therein could reasonably be expected to result in a Material Adverse
Effect and such adverse determination is reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Twangiza Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Twangiza Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with
the Toronto Stock Exchange (all such documents filed prior to the date of
execution of this Agreement, the Public Disclosure
Documents) since January 1, 2013. As of the effective date of
such Public Disclosure Documents, to its knowledge, none of the Public
Disclosure Documents contain any untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, it being acknowledged that if there is
any inconsistency between two or more documents comprising the
Public Disclosure Documents regard shall be had to the last filed document. All
of the Public Disclosure Documents, as of their respective effective dates (and
as of the effective dates of any amendments thereto), complied as to both form
and content in all material respects with the requirements of applicable
Securities Laws or were amended on a timely basis to correct deficiencies
identified by securities commissions or similar securities regulatory
authorities. Banro has not filed any confidential material change report with
any securities regulatory authority that at the date of execution of this
Agreement remains confidential. There is no material adverse change concerning
Banro which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this Agreement; |
- 5 -
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Twangiza Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements referred to in the
first sentence of paragraph (y) above or in the notes thereto, other than (i)
liabilities or obligations arising in the ordinary course of business since
September 30, 2014 or publicly announced by Banro, or obligations to Auramet
International LLC pursuant to the gold sale arrangements with Auramet
International LLC; |
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock-out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America
(Foreign Company Plan) that is intended to qualify for special tax treatment meets all
of the requirements for such treatment and has obtained all necessary approvals
of all relevant Governmental Authorities. No Foreign Company Plan has any
unfunded liabilities, determined in accordance with generally accepted
accounting principles, that have not been fully accrued on Banros financial
statements or that will not be fully offset by insurance. All Foreign Company
Plans are registered where required by, and are in good standing under, all
Applicable Laws. For purposes of this paragraph, Employee Benefit
Plan means any employee benefit plan, program, policy or arrangement
sponsored, maintained or contributed to by a Banro Group Entity or any of their
respective Affiliates or with respect to which the Seller, any Banro Group
Entity or any of their respective Affiliates has any liability or
obligation; |
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Twangiza Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE D
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
The Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is an exempted company duly incorporated and validly
existing under the laws of Cayman Islands and is up to date in respect of
all filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE E
TERMINATION AMOUNT
This is Schedule E to the Gold Purchase and
Sale Agreement between Twangiza GFSA Holdings, Banro Corporation and Twangiza
Mining S.A. dated as of February 27, 2015
[Commercially sensitive information redacted]
SCHEDULE F
DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this
Agreement.
1. |
Initiation of Arbitration
Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the
other Party (the Respondent) a statement of claim setting out
in sufficient detail the facts and any contentions of law on which it relies,
and the relief that it claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have not previously been
submitted by any Party, and (where practicable) by any relevant samples. |
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration
hearing. |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
5. |
Jurisdiction and Powers of the
Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
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(i) |
determine any question of law arising in the
arbitration; |
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(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to
which it may be entitled. |
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
Execution Version
SUPPORT AGREEMENT
THIS AGREEMENT made the 27th day of
February, 2015.
AMONG:
BLACKROCK GOLD AND GENERAL FUND,
a United Kingdom authorized trust unit (BGGF)
- and
OLD MUTUAL BLACKROCK GOLD AND
GENERAL FUND,
a United Kingdom investment company (Old Mutual
BGGF)
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BLACKROCK WORLD MINING TRUST
PLC,
a company incorporated in England and Wales (World
Mining, and together with BGGF and Old Mutual BGGF, the
Noteholders and each, a Noteholder)
- and -
BANRO CORPORATION,
a
corporation existing under the laws of Canada (the
Company)
(each, a Party, and
collectively, the Parties)
WHEREAS the Noteholders are
the beneficial owners of certain 10% senior secured notes of the Company due
2017 (the Notes), as more particularly described herein;
AND WHEREAS in connection
with the proposed transactions with Gramercy Funds Management LLC
(Gramercy) in favour of the Company (the
Transaction) consisting of two forward sales agreements
(the Forward Sales Agreements, and the first Forward
Sales Agreement to be entered into, the First Forward Sales
Agreement) and a life of mine streaming agreement (the
Streaming Agreement, and together with the Forward Sales
Agreements, the Transaction Agreements) attached hereto
as Schedule A, the Company wishes to make certain amendments (the
Amendments) to (i) the indenture dated March 2, 2012, as
supplemented by a supplemental indenture dated as of April 23, 2013,
(theIndenture) among the Company, Guarantors (as defined
therein) and Equity Financial Trust Company, pursuant to which the Notes were
issued, as set out in the form of amending agreement attached hereto as Schedule
B; and (ii) the collateral trust agreement dated March 2, 2012 among the
Company, Initial Guarantors (as defined therein), Equity Financial Trust
Company, as Indenture Trustee and Collateral Agent (as defined therein), Ecobank
SARL and Gramercy as set out in the form of agreement attached hereto as
Schedule B, in order to permit the Transaction to proceed;
AND WHEREAS in
anticipation of the Company seeking a consent, vote or other approval in respect
of the Amendments (the Consent Solicitation), this
Agreement sets out the terms and conditions of the agreement of each Noteholder
to provide its consent, in respect of the Notes set out in Schedule C (the
Owned Notes), to the Amendments;
AND WHEREAS
contemporaneously with the execution and delivery of this Support Agreement
to the Company (i) the Company has entered into the Transaction Agreements, (ii)
has received US$20 million pursuant to the First Forward Sales Agreement; and
(iii) the Company is announcing the Transaction;
NOW THEREFORE this
Agreement witnesses that, in consideration of the premises and the covenants and
agreement herein contained, the Parties hereto agree as follows:
ARTICLE 1
CERTAIN COVENANTS OF THE NOTEHOLDER
1.1 Consent
(a) Agreement to Consent or
Vote in Favour. Subject to the satisfaction (or waiver in the sole
discretion of the Noteholders) of the conditions set forth in Section 1.1(b),
each Noteholder, on a strictly several, and not joint or joint and several,
basis, agrees that they shall, in respect of the Owned Notes beneficially owned
by such Noteholder or over which such Noteholder has control or direction over,
consent to or vote in favour of (i) the Amendments, and (ii) such other
non-material administrative amendments to the Indenture items necessary to
implement the consummation of the Amendments, provided that this Agreement shall
not extend to any non-material administrative amendments which would require
consent under Section 9.02 of the Indenture. Prior to termination of this
Agreement, the Noteholders shall not enter into any voting agreement with any
Person or entity with respect to any of the Owned Notes, grant any Person or
entity any proxy (revocable or irrevocable) or power of attorney with respect to
any of the Owned Notes, deposit any Owned Notes in a voting trust, or otherwise
enter into any agreement with any person or entity limiting the Noteholders
legal power, authority, or right to consent to or vote, in respect of the Owned
Notes, the Amendments. If the Noteholder is the beneficial owner, but not the
registered holder, of any of the Owned Notes, the Noteholder agrees to take all
actions necessary to cause the registered holder and any nominees thereof to
consent or vote, in respect of all such Owned Notes, in accordance with this
Section 1.1.
b) Conditions to
Providing Consent. The Agreement of the Noteholders to provide their
consent is subject to the satisfaction of the following conditions:
(i) the Transaction Agreements
shall not have been amended in any manner which is adverse to the Noteholders in
any material respect (including, without limitation, a change to the use of
proceeds described therein);
(ii) all regulatory and third
party consents and approvals to effect the Amendments and complete the
Transaction have been received and remain in full force and effect;
(iii) the representations and
warranties of the Company herein shall be true and correct;
(iv) there shall have occurred no
default by the Company under this Agreement;
(v) there shall have occurred no
Default (as defined in the Indenture) or Event of Default (as defined in the
Indenture) pursuant to the Indenture; and
(vi) Gramercy shall have provided
its consent or exercised its vote in favour of the Amendments and the other
amendments described in Section 1.1(a) in respect of its Notes.
1.2 Restrictions on Transfer. Prior to termination of
this Agreement, each Noteholder, on a strictly several, and not joint or joint
and several, basis, agrees to not, directly or indirectly, Transfer (as defined
below), or enter into any agreement, option or other arrangement (including any
profit-sharing arrangement), whether or not in writing, with respect to the
Transfer of any of the Owned Notes (or any rights in respect thereof, including,
but not limited to, the right to vote) held by such Noteholder as of the date
hereof to any person, other than an affiliate or subsidiary or a person over
which the Noteholder has direction or control over or to a transferee that has
provided consent to the Company on the same terms as this Agreement. For the
purposes of this Agreement, Transfer means, with respect
to any security, any direct or indirect assignment, sale, transfer, tender,
exchange, pledge, hypothecation, or the grant, creation, or suffrage of a lien in or upon, or the gift, grant,
or placement in trust or other disposition of such security or any right, title,
or interest therein (including any right or power to vote to which the holder
thereof may be entitled, whether such right or power is granted by proxy or
otherwise), except with respect to security generally applying to its
investments which does not adversely affect such Noteholders ability to perform
its obligations under this Agreement.
2
1.3 Revocation of Prior Proxies.
The Noteholders hereby revoke any operative proxies heretofore
given by it in respect of the Owned Notes.
1.4 Other Covenants. Each Noteholder agrees, on a
strictly several, and not joint or joint and several, basis:
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(a) |
that if the Noteholder acquires any additional Notes
following the date hereof over which the Noteholder has the power to vote,
the Noteholder shall vote such Notes or provide a consent to the
Amendments in the same manner as the Owned Notes; |
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(b) |
not to take any other action intended to, or reasonably
be expected to result in, the Amendments not being approved or not
becoming effective by the Noteholders as contemplated by this
Agreement; |
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(c) |
not to oppose in any manner the treatment of any Owned
Notes pursuant to the Amendments; and |
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(d) |
not to requisition or join in the requisition of any
meeting of holders of Notes for purposes of opposing the
Amendments. |
1.5 No Ownership Interest. Nothing contained in
this Agreement shall be deemed to vest in the Company any direct or indirect
economic benefit or ownership or incidence of ownership of, or relating to, any
Owned Notes. All rights, ownership and economic benefits of and relating to the
Owned Notes shall remain vested in and belong to the Noteholder, and the Company
shall have no authority to exercise any power or authority to direct the
Noteholder in the voting of any of the Owned Notes, except as otherwise provided
herein, or in the performance of the Noteholders duties or responsibilities as
a holder of Notes.
ARTICLE 2
COVENANTS OF THE COMPANY
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2.1 |
The Company hereby covenants and agrees for the benefit
of the Noteholder: |
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(a) |
it shall commence and complete the Consent Solicitation
as promptly as reasonably practicable after the date hereof; |
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(b) |
it shall do all things that are reasonably necessary and
appropriate in furtherance of, and to consummate and make effective the
Supplemental Indenture containing the Amendments after completion of the
Consent Solicitation and receipt of the requisite consents to such
Amendments in accordance with Section 9.02 of the Indenture; |
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(c) |
the proceeds of the Transaction shall be used by the
Company in accordance with the use of the proceeds as described in the
Transaction Agreements; |
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(d) |
the additional Priority Lien Debt and Priority Lien Debt
permitted to be incurred as a result of the Amendments shall not, without
the prior written consent of the Noteholders, be incurred except to
complete the Transaction in accordance with the provisions of the
Transaction Agreements; |
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(e) |
it shall not make any alterations to the Amendments or
the Transaction Agreements which are adverse to the Noteholders in any
material respect (including, without limitation, a change to the use of
proceeds described therein) without the consent of the
Noteholder; |
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(f) |
it shall provide the Noteholders with copies of all
alterations to the Amendments or the Transaction Agreements, including,
without limitation, any additional proposed amendments to the Indenture,
and the final Amendments; and |
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(g) |
to pay all reasonable fees and expenses incurred by the
Noteholders in connection with the negotiation and performance of this
Agreement, including but not limited to reviewing the Term Sheet and the
Transaction Agreements, whether or not the Transaction is completed or the
Amendments are effected. |
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE
NOTEHOLDER
3.1 Representations and
Warranties. Each of the Noteholders, on a strictly several, and not
joint or joint and several, basis, represents, warrants and, where applicable,
covenants to the Company, on a several basis (and not joint or joint and
several), as follows and acknowledges that the Company is relying upon these
representations, warranties and covenants in connection with the entering into
of this Agreement:
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(a) |
the Noteholder has been duly formed and is validly
existing under the laws of its jurisdiction of organization and has all
necessary power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; |
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(b) |
the execution and delivery of this Agreement by the
Noteholder and the performance by it of its obligations hereunder have
been duly authorized and no other proceedings on its part are necessary to
authorize this Agreement and the performance of its obligations
hereunder; |
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(c) |
this Agreement has been duly executed and delivered by
the Noteholder and, assuming the due authorization, execution and delivery
by the Company, constitutes a legal, valid and binding obligation,
enforceable by the Company against the Noteholder in accordance with its
terms, subject, however, to limitations imposed by law in connection with
bankruptcy, insolvency or similar proceedings and to the extent that the
award of equitable remedies such as specific performance and injunction is
within the discretion of the court from which they are sought; |
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(d) |
the Noteholder is the sole registered and/or beneficial
owner of the Owned Notes, and has no legal or beneficial interest in, or
control or direction over, any other Notes; |
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(e) |
the Noteholder has the sole right to vote all the Owned
Notes; |
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(f) |
no person or entity has any agreement or option, or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option, for the purchase, acquisition or Transfer
from the Noteholder of any of the Owned Notes or any interest therein or
right thereto; |
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(g) |
none of the Owned Notes are subject to any power of
attorney or attorney in fact, proxy, voting trust, vote pooling or other
agreement, or any right or privilege capable of becoming an agreement,
with respect to the right to vote, call meetings of holders of the Notes
or give consents or approvals of any kind; |
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(h) |
none of the execution and delivery by the Noteholder of
this Agreement or the completion or performance of the transactions
contemplated hereby or the compliance by the Noteholder with the
Noteholder's obligations hereunder will result in a breach of (i) the
constating documents of the Noteholder; or (ii) any agreement or
instrument to which the Noteholder is a party or by which the Noteholder
or any of its property or assets is bound excluding for greater certainty
any agreement to which the Company is a party; |
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(i) |
the Noteholder acknowledges that it has had the
opportunity to obtain independent legal advice with respect to this
Agreement; |
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(j) |
(i) the only Notes owned, directly or indirectly, or over
which control or direction is exercised, by the Noteholder are those
listed on Schedule C to this Agreement and (ii) the Noteholder has no
agreement or option, right or privilege (whether by law, pre- emptive or
contractual) capable of becoming an agreement or option, for the purchase
or acquisition by the Noteholder or transfer to the Noteholder of
additional Notes; and |
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(k) |
there are no proceedings in progress, pending or
threatened, in each case to the knowledge of the Noteholder, against the
Noteholder that would adversely affect in any manner the ability of the
Noteholder to enter into this Agreement and to perform its obligations
hereunder. |
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE
COMPANY
4.1 Representations and
Warranties. The Company represents, warrants and, where applicable,
covenants to the Noteholder as follows and acknowledges that the Noteholder is
relying upon these representations, warranties and covenants in connection with
the entering into of this Agreement:
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(a) |
the Company has been duly formed and is validly existing
under the laws of its jurisdiction of organization and has all necessary
power and authority to execute and deliver this Agreement and to perform
its obligations hereunder; |
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(b) |
the execution and delivery of this Agreement by the
Company and the performance by it of its obligations hereunder have been
duly authorized and no other proceedings on its part are necessary to
authorize this Agreement and the performance of its obligations
hereunder; |
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(c) |
this Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by
the Noteholder, constitutes a legal, valid and binding obligation,
enforceable by the Noteholder against the Company in accordance with its
terms, subject, however, to limitations imposed by law in connection with
bankruptcy, insolvency or similar proceedings and to the extent that the
award of equitable remedies such as specific performance and injunction is
within the discretion of the court from which they are sought; |
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(d) |
none of the execution and delivery by the Company of this
Agreement or the completion or performance of the transactions
contemplated hereby or the compliance by the Company with its obligations
hereunder will result in a breach of (i) the constating documents of
Company; (ii) any agreement or instrument to which the Company is a party
or by which the Company or any of its property or assets is bound; (iii)
any judgment, decree, order or award of any governmental entity; or (iv)
any applicable laws relevant in the context of the Amendments or this
Agreement; |
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(e) |
there are no proceedings in progress or pending or, to
the knowledge of the Company, threatened against the Company that would
adversely affect in any manner the ability of the Company to enter into
this Agreement and to perform its obligations hereunder; |
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(f) |
Schedule D sets out the regulatory and corporate
approvals required on behalf of the Company to: (i) effect the Amendments;
and (ii) complete the Transaction; |
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(g) |
as of the date hereof, there is an aggregate of US$175
million principal amount of Notes issued and outstanding; |
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(h) |
no shareholder approval is required in connection with
this Agreement, the Transaction Agreements, the Amendments or the
Transaction; and |
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(i) |
the Company has not entered into any other agreements in
connection with the Transaction, other than the Transaction Agreements,
this Agreement (and including for greater certainty, an agreement in
similar form executed between the Company and Gramercy) and any other
agreements contemplated herein or therein. |
ARTICLE 5
TERMINATION
5.1 Termination. This Agreement shall terminate upon the
earliest of:
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(a) |
written agreement of the Parties to terminate the
Agreement; or |
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(b) |
the effective date of the Amendments; or |
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(c) |
April 30, 2015; or |
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(d) |
notice to the Company by the Noteholder
if: |
(i) any of the representations
and warranties of the Company in this Agreement is untrue or inaccurate in any
material respect;
(ii) the Company has not complied
in all material respects with its covenants hereunder; or
(iii) an Event of Default has occurred under the Indenture.
Notwithstanding the foregoing, Section 2.1(c) shall survive
termination of this Agreement.
ARTICLE 6
GENERAL
6.1 Further Assurances. The Parties shall, from
time to time, promptly execute and deliver all such further documents and
instruments and do all such acts and things as the other Party may reasonably
require to effectively carry out the intent of this Agreement.
6.2 Noteholders. The Parties acknowledge that
references in this Agreement to the Noteholders means each Noteholder,
severally, and not jointly nor jointly and severally.
6.3 Disclosure. Each of the Noteholders and the
Company:
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(a) |
agrees except as set forth in (b) below or as required by
applicable laws or by any governmental entity, (i) no Party shall make any
public announcement or statement with respect to this Agreement without
the approval of the other (including as to form and content of such
announcement or statement), which shall not be unreasonably withheld or
delayed, and (ii) each Party agrees to consult with the other prior to
making any public announcement or statement with respect to this
Agreement, subject to the overriding obligations of applicable laws;
and |
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(b) |
consents to the disclosure of the substance of this
Agreement in (i) a consent solicitation statement prepared in connection
with the Consent Solicitation, and (ii) any press release of the Company
relating to the Amendments or a Consent
Solicitation, |
provided that all references to the Noteholders in any such
disclosure shall be in a form satisfactory to the Noteholders.
6.4 Amendment. This Agreement may only be amended by
mutual written agreement of the Parties.
6.5 Assignability. This Agreement shall not be
assignable by any Party without the prior written consent of the other Party,
other than by the Company to one of its direct or indirect subsidiaries and by
the Noteholder as set forth in Section 1.2. This Agreement shall be binding upon
and shall enure to the benefit of and be enforceable by each of the Parties and
their respective successors and permitted assigns.
6.6 Time. Time shall be of the essence of this
Agreement.
6.7 Notices. Any notice, or other communication given
regarding the matters contemplated by this Agreement must be in writing, sent by
personal delivery, courier or facsimile (but not by electronic mail) and
addressed:
1 First Canadian Place, Suite 7070
100 King St. W.
PO Box 419
Toronto, Ontario M5X 1E3
Attention: Chief Financial Officer
Facsimile: (416) 366-7722
E-mail:
kjennings@banro.com
with a copy (which shall not constitute
notice) to:
Norton Rose Fulbright Canada LLP
Suite 3800
Royal Bank Plaza, South Tower
200 Bay Street
PO Box
84
Toronto ON M5J 2Z4
Attention: Richard Lachcik
Facsimile: (416) 216-3930
Email:
Richard.Lachcik@nortonrosefulbright.com
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(a) |
to the Noteholders at: |
[Redacted]
with a copy (which shall not constitute
notice) to:
Osler, Hoskin & Harcourt LLP
100 King Street West, Suite 6100
Toronto, ON M5X 1B8
Attention: Donald Gilchrist
Facsimile: (416) 862-6666
Email:
dgilchrist@osler.com
Any notice or other communication
is deemed to be given and received (i) if sent by personal delivery or same day
courier, on the date of delivery if it is a Business Day (as defined below) and
the delivery was made prior to 4:00 p.m. (local time in place of receipt) and
otherwise on the next Business Day, (ii) if sent by overnight courier, on the
next Business Day, or (iii) if sent by facsimile, on the Business Day following
the date of confirmation of transmission by the originating facsimile. For the
purposes of this Agreement, Business Day means each day that is not a
Saturday, Sunday or other day on which banking institutions in Toronto, Canada
are authorized or required by law to close.
6.8 Governing Law.
(a) This Agreement will be
governed by and interpreted and enforced in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.
(b) Each Party irrevocably
attorns and submits to the non-exclusive jurisdiction of the Ontario courts
situated in the City of Toronto and waives objection to the venue of any
proceeding in such court or that such court provides an inconvenient forum.
6.9 Remedies. The Parties agree and acknowledge that:
(i) money damages would not be a sufficient remedy for any breach of this
Agreement; (ii) in addition to any other remedies at law or in equity that the
aggrieved Party may have, such Party shall be entitled to seek equitable relief,
including injunction and specific performance, in addition to any other remedies
available to such Party, in the event of any breach of the provisions of this
Agreement by the other Party; and (iii) any Party that is a defendant or
respondent shall waive any requirement for the securing or posting of any bond
in connection with such remedy. The prevailing Party shall be reimbursed for all
costs and expenses, including reasonable legal fees, incurred in enforcing the
other Party's obligations hereunder. Such remedies shall not be deemed to be
exclusive remedies for the breach of this Agreement but shall be in addition to
all other remedies at law or in equity.
8
6.10 Severability. If any provision of this
Agreement is determined to be illegal, invalid or unenforceable by any court of
competent jurisdiction, that provision will be severed from this Agreement and
the remaining provisions shall remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.
6.11 Waiver. No waiver of any of the provisions
of this Agreement will constitute a waiver of any other provision (whether or
not similar). No waiver will be binding unless executed in writing by the Party
to be bound by the waiver. A Partys failure or delay in exercising any right
under this Agreement will not operate as a waiver of that right. A single or
partial exercise of any right will not preclude a Party from any other or
further exercise of that right or the exercise of any other right.
6.12 Rules of Construction. The Parties waive the
application of any law or rule of construction providing that ambiguities in any
agreement or other document shall be construed against the Party drafting such
agreement or other document.
6.13 Entire Agreement. This Agreement constitutes
the entire agreement between the Parties with respect to the transactions
contemplated by this Agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
Parties. There are no representations, warranties, covenants, conditions or
other agreements, express or implied, collateral, statutory or otherwise,
between the Parties in connection with the subject matter of this Agreement,
except as specifically set forth in this Agreement. The Parties have not relied
and are not relying on any other information, discussion or understanding in
entering into and completing the transactions contemplated by this Agreement.
6.14 Counterparties. This Agreement may be
executed in any number of counterparts (including counterparts by facsimile) and
all such counterparts taken together shall be deemed to constitute one and the
same instrument. The Parties shall be entitled to rely upon delivery of an
executed facsimile or similar executed electronic copy of this Agreement, and
such facsimile or similar executed electronic copy shall be legally effective to
create a valid and binding agreement between the Parties.
[Remainder of this page intentionally left blank.]
9
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the date first written above.
BANRO CORPORATION
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By: |
R.W.
Brissenden
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Name: R.W. Brissenden |
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Title: Chairman of the Board
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For and on behalf of BLACKROCK GOLD
AND GENERAL FUND, by BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED, its
Investment Manager
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By: |
(signed)
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Name: [Redacted] |
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By: |
(signed)
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Name: [Redacted] |
For and on behalf of OLD MUTUAL
BLACKROCK GOLD AND GENERAL FUND, by BLACKROCK INVESTMENT MANAGEMENT (UK)
LIMITED, its Investment Manager
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By: |
(signed)
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Name: [Redacted] |
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By: |
(signed)
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Name: [Redacted] |
For and on behalf of BLACKROCK
WORLD MINING TRUST PLC, by BLACKROCK INVESTMENT MANAGEMENT (UK) LIMITED, its
Investment Manager
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By: |
(signed)
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Name: [Redacted] |
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By: |
(signed) |
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Name: [Redacted]
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(Signature Page to Support Agreement)
SCHEDULE A
TRANSACTION AGREEMENTS
GOLD PURCHASE AND SALE AGREEMENT
TWANGIZA GFSA HOLDINGS
and
BANRO CORPORATION
and
TWANGIZA MINING S.A.
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
TWANGIZA GFSA HOLDINGS, an
exempted company incorporated under the laws of Cayman Islands
(the Purchaser)
- and -
BANRO CORPORATION, a corporation
existing under the laws of Canada
(Banro)
- and -
TWANGIZA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms
when used in these recitals shall have the respective meanings set forth in
Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchaser and the Purchaser has agreed to purchase from the Seller, the Payable
Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Twangiza Project;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Gold Payment Amount
has the meaning set out in Section 4.2.
Additional Gold Payment Date
means in respect of each Monthly Delivery Date, the day that falls two Business
Days after such Monthly Delivery Date.
- 2 -
Affiliate means, in relation
to any person or entity, any other person or entity controlling, controlled by
or under common control with such first mentioned person or entity.
Agreement means this gold
purchase and sale agreement and all attached schedules, in each case as the same
may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
Applicable Laws means any
international, federal, state, provincial or municipal law, regulation,
ordinance, code, order or other requirement or rule of law or the rules,
policies, orders or regulations of any Governmental Authority or stock exchange,
including any judicial or administrative interpretation thereof, applicable to a
person or any of its properties, assets, business or operations.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules means the
Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 8.2(c) .
Banro Event of Default has the
meaning set out in Section 10.1.
Banro Group Entity means the
PSA Entities and their respective Affiliates from time to time.
Business Day means any day
other than a Friday, Saturday or Sunday or a day that is a statutory holiday
under the laws of the Province of Ontario, Canada or the laws of South Africa.
Change of Control of a person
(the Subject Person) means the consummation of any transaction,
including any consolidation, arrangement, amalgamation or merger or any issue,
Transfer or acquisition of voting shares, the result of which is that any other
person or group of other persons acting jointly or in concert for purposes of
such transaction: (i) becomes the beneficial owner, directly or indirectly, of
more than 50% of the voting shares of the Subject Person; or (ii) acquires
control of the Subject Person; provided that a Change of Control shall not
include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means the date
that is two Business Days following the date on which the conditions precedent
to payment of the Prepayment Amount are satisfied or waived in accordance with
Section 3.5 or such other date as the Parties may agree, such date expected to
occur on or before February 27, 2015.
- 3 -
Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information has
the meaning set out in Section 6.4(a) .
Contaminant means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to:
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(i) |
impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold purchase
and sale agreements with the Purchaser or Namoya GSA Holdings, any financing
transaction pursuant to which (a) Banro or any of the Banro Group Entities
receive cash advances or deposits in respect of future revenues from the sale of
specified mineral assets to a person other than an Affiliate, (b) such advances
or deposits are recorded as liabilities, but not as debt, on the consolidated
balance sheet of Banro and (c) such liability is amortized upon the delivery of
such mineral assets.
Delivery Period means the
period beginning March 1, 2015 and ending on the date on which the last
Scheduled Monthly Quantity is delivered.
Disqualified Stock means, with
respect to any person, any shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such person, including any preferred stock and limited
liability or partnership interests (whether general or limited) (collectively,
Capital Stock) of such person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
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(i) |
matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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(ii) |
is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock));
or |
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(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means, with
respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
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(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means, with
respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement;
provided that in no event shall an operating lease be deemed to constitute an
Encumbrance.
Environment means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces.
Environmental Laws means any
Applicable Laws relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal, discharge or storage thereof or
the terms of any Approval issued in connection therewith) or the environmental
conditions on, under or about any real property (including soil, groundwater and
indoor, underground and ambient air conditions).
Gold Price means, with respect
to any day, the afternoon per ounce gold fixing price in U.S. dollars quoted by
the London Bullion Market Association for Refined Gold on such day or, if such
day is not a trading day, the immediately preceding trading day; provided that
if, for any reason, the London Bullion Market Association is no longer in
operation, or if the price of Refined Gold is not confirmed, acknowledged by or
quoted by the London Bullion Market Association, the Gold Price shall be
determined by reference to the price of Refined Gold in a manner endorsed by the
World Gold Council, failing which the Gold Price shall be determined by
reference to the price of gold on a commodity futures exchange mutually
acceptable to the Parties acting reasonably.
- 5 -
Governmental Authority means
any national, federal, state, provincial, regional, municipal, territorial or
local government, agency, department, ministry, authority, board, bureau,
tribunal, commission, official, court or securities commission, and any person
entitled under Applicable Law to exercise executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any of the foregoing
entities, including all tribunals, commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other person controlled by any of the
foregoing.
Group Collateral has the
meaning set out in Section 8.2(b) .
Group Security Agreements has
the meaning set out in Section 8.2(b)
Guarantors means Banro, Namoya
Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and Lugushwa Mining
S.A.
Hazardous Materials means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law.
Indebtedness of any person
means, without duplication:
|
(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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|
(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn- out
obligation until the amount of such obligation becomes a liability on the
balance sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
- 6 -
|
(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
|
(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or
obligor); |
|
(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
- 7 -
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
|
(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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|
(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
|
(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of
any of the Banro Group Entities; or |
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(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Insolvency Event means, in relation to any person, any
one or more of the following events or circumstances:
|
(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
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(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such
proceeding; |
- 8 -
|
(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
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(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any person that
provides any Secured Financing, excluding any Banro Group Entity.
Material Adverse Effect means
any event, occurrence, change or effect that, when taken individually or
together with all other events, occurrences, changes or effects, is or could
reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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(ii) |
limit, restrict or impair the ability of the Seller to
operate the Twangiza Project in all material respects in accordance with
the Operating Plan for the Twangiza Project in effect at the time of the
event, occurrence, change or effect; |
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(iii) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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(iv) |
result in a Banro Event of
Default. |
Minimum Gold Price means
$1,100 per ounce.
Monthly Delivery Date means
the date no later than the fifth Business Day after the end of each calendar
month.
Net Proceeds means with
respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Purchaser upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators, as may be amended from time to time, or any
successor instrument, rule or policy.
Note Indenture means the
indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as
issuer, each of the guarantors named therein and Equity Financial Trust Company,
as trustee and collateral agent.
- 9 -
Operating Plan means the life
of mine operating plan for the Twangiza Project delivered to the Purchaser on
the date hereof.
Order means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Authority or other decision-making authority of competent
jurisdiction.
Parties means the parties to
this Agreement.
Payable Gold means 22,248
ounces of Refined Gold.
Permits means all licenses,
permits, approvals (including environmental approvals) authorizations, rights
(including surface and access rights and rights of way, and access to water and
power), privileges, concessions or franchises necessary for the construction,
development and operation of the Twangiza Project as is contemplated by the
Operating Plan.
Permitted Distributions means
any payment of Distributions required to satisfy any obligation under this
Agreement, Applicable Laws or the terms of any Secured Financing entered into in
accordance with this Agreement, as a result of any Affiliate of any PSA Entity
not otherwise having sufficient funds to satisfy such obligation.
Permitted Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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(ii) |
following the termination of the Note
Indenture: |
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(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
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(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
- 10 -
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(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
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(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation obligations);
and |
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(H) |
liens in respect of the following: |
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[Details of individual lien holders
redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clause
(ii)(1), (4), (5), (7)and (9) of such definition. |
Permitted Indebtedness means:
|
(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
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(ii) |
following the termination of the Note
Indenture: |
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(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Purchaser and Namoya GSA
Holdings; |
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(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
- 11 -
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(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
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(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 75% of the forecast gold production of the
Twangiza Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchaser or the Collateral Agent on
its behalf; and (B) the ranking of the PSA Obligations vis-à-vis such
secured Indebtedness shall correspond to the ranking of the PSA
Obligations vis-à-vis the notes issued under the Note Indenture; |
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(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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(9) |
Indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an individual,
corporation, body corporate, limited or general partnership, joint stock
company, limited liability corporation, joint venture, association, company,
trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prepayment Amount means
$20,000,000.
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the Security Trigger Event, Encumbrances
permitted under the Note Indenture; |
- 12 -
|
(ii) |
following the Security Trigger Event and prior to the
termination of the Note Indenture, those Encumbrances that constitute
Priority Liens (as defined in the Note Indenture) ranking pari passu
with the Secured Amount; |
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(iii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Plant means any
mill or other processing facility owned or operated or both by any Banro Group
Entity located on or near the Properties, to the extent that such mill or
processing facility was built with the primary intention of processing ore from
the Properties, or at which Produced Gold is processed.
Produced Gold means any and
all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore
or other products resulting from the further milling, processing or other
beneficiation of minerals mined, produced, extracted or otherwise recovered from
the Properties.
Project Assets means the
shares in the capital of the PSA Entities (other than Banro) and the Properties,
Processing Plant and all present and after-acquired real or personal property,
used or acquired for use by any Banro Group Entity in connection with the
mining, production or extraction of gold from the Properties.
Project Collateral means (A)
the Project Assets, including all present and after-acquired personal property
used in connection with, relating to or arising out of, in whole or in part, the
Project, and (B) the Produced Gold, and in each case including all proceeds
thereof except sales of Produced Gold in the ordinary course of business.
Properties means the mineral
claims, mineral leases and other mining rights, concessions and interests listed
in Schedule A, including all buildings structures improvements, appurtenances
and fixtures that form part of the Twangiza Project, whether created privately
or by the action of any Governmental Authority, and includes any term extension,
renewal, replacement, conversion or substitution of any such mineral claims,
mineral leases and other mining rights, concessions or interests, owned or in
respect of which an interest is held, directly or indirectly, by any Banro Group
Entity at any time during the Delivery Period, whether or not such ownership or
interest is held continuously. The Properties are depicted in the map included
in Schedule A.
PSA Collateral means the
Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means Banro and the
Seller, and any other Affiliate of Banro (now or hereafter incorporated) that
acquires any interest in the Twangiza Project.
PSA Obligations means all
present and future debts, liabilities and obligations of PSA Entities, or all of
them, to the Purchaser under this Agreement.
- 13 -
PSA Security means the charges
and security interests granted in favour of the Purchaser pursuant to the
Security Agreements.
Purchaser Event of Default has
the meaning set out in Section 11.1. Receiving Party has the meaning
set out in Section 6.4(a) .
Refined Gold means marketable
metal bearing material in the form of gold bars or coins that is refined to
standards meeting or exceeding 995 parts per 1,000 fine gold.
Reimbursable Expenses has the
meaning set out in Section 13.3.
Restricted Person means any person or
entity that:
|
(i) |
is named, identified, described on or included on any
of: |
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(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
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(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
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(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
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(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Scheduled Monthly Quantities
means 618 ounces of Refined Gold.
Secured Amount has the meaning
set out in Section 8.2(a) .
- 14 -
Secured Financing means any
Indebtedness for borrowed money of, or lending facility or other financing
arrangement (including any secured derivative transactions entered into in
connection with such Indebtedness, or any other hedge financing) in favour of,
any Banro Group Entity that is secured by all or any part of the Project Assets.
Security Agreements means the Seller Security Agreements, the Group
Security Agreements and the Assignment, Subordination and Postponement of
Claims.
Security Trigger Event means
the amendment to the Note Indenture and related security agreements (including
the related collateral trust agreement) to, among other things, recognize the
Purchaser as a Priority Lien Secured Party (as defined in the Note Indenture)
and as otherwise determined necessary or appropriate by the Purchaser.
Seller Security Agreements has
the meaning set out in Section 8.2(a) .
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment
payments or other additions that may become payable in respect thereof, imposed
by any Governmental Authority, which taxes shall include all income or profits
taxes (including federal, provincial, and state income taxes) other than income
or profits taxes levied in respect of the income or profits of the Purchaser,
non-resident withholding taxes, sales and use taxes, branch profit taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
licence taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, land transfer taxes, capital taxes,
extraordinary income taxes, surface area taxes, property taxes, asset transfer
taxes, and other charges and obligations of the same or of a similar nature to
any of the foregoing.
Time of Delivery has the
meaning set out in Section 2.2(b) .
Transfer means to sell,
transfer, assign, convey, dispose or otherwise grant a right, title or interest
(including expropriation or other transfer required or imposed by law or any
Governmental Authority, whether voluntary or involuntary).
Twangiza Holdcos means
together, Banro Group (Barbados) Limited and Twangiza (Barbados) Limited.
Twangiza Project means the
Properties and the mining operations developed, constructed and operated at and
in respect of the Properties.
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
|
(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
- 15 -
|
(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
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(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
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(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an
obligation; |
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(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second person; |
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(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
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(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
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and controls, controlling, controlled by and under
common control have corresponding meanings. |
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(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
- 16 -
|
(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A |
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Description of Sellers Properties (with map)
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Schedule B |
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Security Agreements |
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Schedule C |
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Banro and Seller Representations and Warranties
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Schedule D |
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Purchaser Representations and Warranties |
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Schedule E |
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Termination Amount |
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Schedule F |
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Dispute Resolution |
ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable Gold |
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(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Seller, the Payable Gold,
free and clear of all Encumbrances, in exchange for the Prepayment
Amount. |
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(b) |
As further provided in Section 4.3(b) Payable Gold shall
not be reduced for, and the Purchaser shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable processor agreement. |
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2.2 |
Delivery Obligations |
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(a) |
During the Delivery Period, the Payable Gold shall be
sold and delivered to the Purchaser on each Monthly Delivery Date in the
Scheduled Monthly Quantities in accordance with the terms of this
Agreement. |
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(b) |
The Seller shall deliver to the Purchaser all Payable
Gold to be delivered under this Agreement by way of credit or allocation
to the metal account or accounts designated by the Purchaser from time to
time, or physical delivery to such other location specified by the
Purchaser from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to be
unreasonably withheld. Delivery of the Payable Gold to the Purchaser shall
be deemed to have been made at the time on the date the Payable Gold is
credited or allocated or physically delivered, as applicable, to the
designated metal account of the Purchaser (the Time of
Delivery). Title to, and risk of loss of, the Payable Gold shall pass
from the Seller to the Purchaser at the Time of Delivery. The Seller
acknowledges that the Purchaser intends to engage a selling agent that
will take delivery of the Payable Gold on behalf of the Purchaser for
purposes of monetizing the Payable Gold. All costs and expenses pertaining
to each delivery of the Payable Gold to the Purchaser, including such
selling arrangements, shall be borne by the Seller so long as the
Purchasers accounts are in customary locations in United Kingdom,
Switzerland or South Africa. |
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(c) |
The Seller hereby represents and warrants to the
Purchaser that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of the Purchaser, |
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(ii) |
the Seller will have good, valid and marketable title to
such Payable Gold, and |
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(iii) |
such Payable Gold will be free and clear of all
Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchaser,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchaser, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchaser the Refined Gold physically resulting
from Produced Gold. |
ARTICLE 3
PREPAYMENT
3.1 |
Prepayment |
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(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchaser of the Payable Gold, the Purchaser hereby agrees to pay the
Prepayment Amount in cash against, and as a prepayment of the purchase
price for the Payable Gold, subject to the conditions set out in Sections
3.2 and 3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Prepayment Amount except as expressly provided in this
Agreement. The Purchaser will not be entitled to demand repayment of the
Prepayment Amount except to the extent expressly set forth in this
Agreement. |
3.2 |
Use of Prepayment
Amount |
The Seller shall use, and Banro shall cause to be used, the
Prepayment Amount only to pay interest due under the Note Indenture and certain
outstanding dividends as of the last payment date on or prior to the date of
receipt by the Seller of the Prepayment Amount on preferred shares in the
capital of Banro Group (Barbados) Limited and the Series A preferred shares in
the capital of Banro, to repay accounts payable and thereafter, for general
corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchaser |
The Purchaser shall pay the Prepayment Amount to or to the
order of the Seller on the Closing Date, by wire transfer of immediately
available funds to the bank account or accounts designated by the Seller in
writing, once each of the following conditions has been satisfied in full:
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(a) |
Banro and the Seller shall have delivered to the
Purchaser a certificate of status, good standing or compliance (or
equivalent) for each PSA Entity and the Twangiza Holdcos, issued by the
relevant Governmental Authority dated no earlier than five Business Days
prior to the Closing Date; |
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(b) |
Each PSA Entity shall have executed and delivered to the
Purchaser a certificate of a senior officer of each in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Purchaser may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the
Purchaser a favourable opinion, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from external
legal counsel to Banro, the Seller, the Twangiza Holdcos and the PSA
Entities as to (i) the legal status of each, (ii) the corporate power and
authority of each to execute, deliver and perform this Agreement and the
Security Agreements to which it is a party, (iii) the execution and
delivery of this Agreement and the Security Agreements to which it is a
party and the enforceability of this Agreement and the Security Agreements
against each, (iv) that this Agreement and the Security Agreements, and
the performance by Banro and the Seller of the obligations hereunder or
thereunder, do not conflict with, violate, result in a breach of, or
constitute a default or an event creating rights of acceleration,
termination, modification or cancellation or a loss of rights under (with
or without the giving notice or lapse of time or both), the Note Indenture
or the Collateral Trust Agreement (as defined in the Note Indenture), (v)
the outstanding share capital of the Seller and the Twangiza Holdcos, (vi)
the creation of valid mortgages and charge upon, and security interests in
(including as to ranking of such security interests), the PSA Collateral
under the Security; and (vii) the due registration or filing of the
Security Agreements and, where applicable, the perfection of the security
interest of the Purchaser (including as to ranking of such security
interests), under such Security Agreements and the results of the usual
searches that would be conducted in connection with the security that is
the subject of such Security Agreements; |
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the
Purchaser a legal opinion addressed to the Purchaser from external
counsel, in form and substance satisfactory to the Purchaser, with respect
to title to the Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
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except for those that would not reasonably be expected to
have a Material Adverse Effect; |
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(g) |
each PSA Entity shall have delivered to the Purchaser a
certificate of a senior officer confirming: |
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(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse Effect; |
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(h) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchaser under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchaser, under such Security
Agreements; |
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(i) |
the Seller paid all Reimbursable Expenses of the
Purchaser payable as at the Closing Date; and |
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(j) |
Banro and the Seller shall have delivered to the
Purchaser prior to the Closing Date a certificate of insurance coverage or
other evidence of acceptable insurance
coverage. |
3.4 |
Conditions Precedent in Favour of the
Seller |
On or before the Closing Date, the Purchaser will satisfy each
of the following conditions:
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(a) |
the Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for the
Purchaser, issued by the relevant Governmental Authority; |
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(b) |
the Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of the Purchaser, in form
and substance satisfactory to Banro and the Seller, acting reasonably, as
to the constating documents of the Purchaser; the resolutions of the sole
director of the Purchaser, authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
the names, positions and true signatures of the persons authorized to sign
this Agreement on behalf of the Purchaser; and such other matters
pertaining to the transactions contemplated hereby as Banro and the Seller
may reasonably require; |
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(c) |
the Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to the
Purchaser as to (i) the legal status of the Purchaser, (ii) the corporate
power and authority of the Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
the Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by the Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice or lapse of time
or both would become a Purchaser Event of Default) has occurred and is
continuing. |
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3.5 |
Satisfaction of Conditions
Precedent |
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(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchaser, and may be waived by the Purchaser
in its sole discretion in whole or in part in writing. Each of the
conditions set forth in Section 3.4 is for the exclusive benefit of Banro
and the Seller, and may be waived by Banro and the Seller in their sole
discretion in whole or in part in writing. |
ARTICLE 4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
4.2 |
Additional Gold Deliveries |
On each Additional Gold Delivery Date, the Seller shall sell
and deliver to the Buyer an amount of Refined Gold (an Additional Gold
Delivery Amount) equal to the greater of:
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zero; and |
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(b) |
the product of: |
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(i) |
the Scheduled Monthly Quantity delivered on the Monthly
Delivery Date corresponding to such Additional Gold Payment Date,
and |
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(ii) |
an amount equal to: |
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(A) |
the Minimum Gold Price |
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minus |
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(B) |
the Gold Price on the Business Day following the Monthly
Delivery Date, |
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divided by the Gold Price on the
Business Day following the Monthly Delivery Date.
Each Additional Gold Delivery Amount shall be delivered in
accordance with the provisions of this Agreement.
4.3 |
Taxes |
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(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchaser shall be made without any deduction, withholding, charge or levy
on account of any Taxes, all of which shall be for the sole account of the
Seller. All Taxes, if any, as are required to be so deducted, withheld,
charged or levied by the Seller or any of its Affiliates on any such
delivery or payment, shall be paid by the Seller delivering or paying to
the Purchaser or on their behalf, in addition to such delivery or payment,
such additional delivery or payment as is necessary to ensure that the net
amount received by the Purchaser (net of any such Taxes, including any
Taxes required to be deducted, withheld, charged or levied on any such
additional amount) equals the full amount that the Purchaser would have
received had no such deduction, withholding, charge or levy been
required. |
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(b) |
If the Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.3(a) hereof, the Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.3(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of the Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of the Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental
Authority. |
In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Purchaser, on the one hand, and the Seller on the other
hand, agree that they shall negotiate in good faith with each other to amend
this Agreement so that the other Parties and their Affiliates are no longer
adversely affected by any such enactment, revision, implementation, amendment or
interpretation, as the case may be; provided that any amendment to this
Agreement shall not have any adverse effect on the Seller and its Affiliates on
the one hand, and the Purchaser and its Affiliates on the other hand.
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Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date, calculated and
compounded monthly in arrears. Any dollar amount or Refined Gold owing by a
Party to any other Party under this Agreement may be set off against any dollar
amount or Refined Gold owed to such Party by the other Party. Any amount of
Refined Gold set off and withheld against any non-payment by a Party shall be
valued at the Gold Price as of the first trading day that such amount of Refined
Gold became payable to such Party.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
5.1 |
Notice of
Information |
Prior to delivery to the Purchaser of any of the information
set out in this Article 5 or otherwise in this Agreement, Banro and the Seller
shall inform the Purchaser if such information would be considered material
non-public information of Banro. In such event, the Purchaser shall have the
option, in its sole discretion, to (a) refuse to accept such information, or (b)
require that such information be either (i) publicly disclosed within two
Business Days, or (ii) where such information constitutes scientific and
technical information representing a material change to the Twangiza Project,
delivered at a subsequent date within 45 days, together with an updated
technical report in accordance with NI 43-101, and notice of such refusal or
delayed delivery will constitute a valid waiver, or partial waiver, as the case
may be, of the obligation to deliver such information.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchaser:
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(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis, including: |
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(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 5.2(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
5.3 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 5.2(a),
5.2(b), 5.2(c) and 5.2(e) shall be provided by the Seller to the Purchaser. For
the purposes of this Section 5.3 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
If during the Delivery Period, Banro shall cease to be a
reporting issuer under Applicable Law, the PSA Entities shall permit the
Purchaser and its authorized representatives and agents to perform audits or
other reviews and examinations of its books and records from time to time at
reasonable times at the Purchasers sole risk and expense and upon five Business
Days notice, to confirm compliance with the terms of this Agreement, provided
that unless there is a continuing Banro Event of Default, the Purchaser and its
authorized representatives and agents will not exercise such rights more often
than one (1) time during any calendar quarter. The Purchaser shall diligently
complete any audit or other examination permitted hereunder.
5.5 |
Inspections |
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchaser and its
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Twangiza Project, in each case to monitor the mining and
processing operations on the Twangiza Project. Provided there has been no
Banro Event of Default that is continuing, the Purchaser may avail itself
of such right of access a maximum of twice per calendar year (including
the mill in respect thereof), and for this purpose, invitations from Banro
will not reduce the number of visits the Purchaser may
request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchaser shall have the
right to conduct an investors tour on the Twangiza Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Twangiza Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchaser and its invitees, and the Purchaser shall (a)
comply and request that its invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchaser or Banro and the Seller or any
of their respective invitees, employees, officers, directors, agents, or
representatives caused by the Purchasers exercise of its rights under
this Section. |
ARTICLE 6
COVENANTS
6.1 |
Conduct of Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Twangiza Project Assets on a commercial basis as
though the Seller has a full economic interest in all the gold produced
from the Properties. Banro and the Seller shall ensure that (i) all
cut-off grade, short term mine planning and production decisions
concerning the Twangiza Project shall be based on gold prices typical of
normal industry practice and consistent with the practices of Banro and
its Affiliates as at the date of this Agreement in connection with such
decisions, and (ii) all longer term planning and resource and reserve
calculations concerning the Twangiza Project shall use gold prices based
on normal industry practice and consistent with the historical practices
of Banro and its Affiliates in connection with such planning and
calculations. |
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(b) |
Subject to Section 6.1(a), all decisions regarding the
Twangiza Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Twangiza Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Twangiza Project, and (iv) except
as provided herein, the sale of gold and terms thereof, shall be made by
the Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 6.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Twangiza Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
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6.2 |
Preservation of Corporate
Existence |
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(a) |
Except as permitted in Section 6.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 7.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in
favour of the Purchaser all the obligations of such Party under this
Agreement and any Security Agreement to which it is a
party. |
6.3 |
Insurance |
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(a) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(b) |
Banro and the Seller shall insure the Twangiza Project in
such amounts and with such coverage as is customary in the mining industry
for the operation of the Twangiza Project. Banro and the Seller covenant
and agree that in the event of any loss or damage that is insured prior to
the end of the Delivery Period, the Seller shall at its option either (i)
use all Net Proceeds of any insurance payment received by a Banro Group
Entity to rebuild or repair all damaged facilities forming part of the
Twangiza Project, or (ii) use the Purchasers share of the Net Proceeds of
such insurance payment received by any Banro Group Entity within 30 days
after receipt of such proceeds by such Banro Group Entity, to acquire
Refined Gold in accordance with Section 2.2(d) and shall deliver to the
Purchaser such amount of Refined Gold, the Purchasers share being
calculated as the ratio of the net present value of Payable Gold not
delivered to the Purchaser to the value of the Twangiza Project when
measured by the same criterion which establishes the value of such
Purchasers interest. A failure to agree on the foregoing proportion is
arbitrable under Section 13.1. |
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(c) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Purchaser at reasonable
intervals no more than once per year, furnish to the Purchaser a
certificate setting forth the nature and extent of all insurance
maintained by or on behalf of the PSA Entities in accordance with Section
6.3(a). Banro and the Seller shall, upon the request of the Purchaser,
provide the Purchaser with copies of all insurance policies as in effect
from time to time relating to the Project
Assets. |
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(d) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
6.4 |
Confidentiality |
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(a) |
Each Party (a Receiving Party) agrees that it
shall maintain as confidential and shall not disclose, and shall cause its
Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 15, 2014
(Confidential Information), provided that a Receiving Party may
disclose Confidential Information in the following
circumstances: |
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(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 6.4(c) and 13.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 13.1; |
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
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(v) |
with the consent of the disclosing Party;
and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
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(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 6.4(a)(i) are made aware of this Section 6.4 and
comply with the provisions of this Section 6.4. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Purchaser will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 6.4(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
6.5 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchaser
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 6.5, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Twangiza Project.
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Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Twangiza
Project.
6.7 |
Expropriation |
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[Redacted] |
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6.8 |
Auramet Agreement |
As soon as practical following the Closing Date and in any
event no later than 15 Business Days following the Closing Date, Banro and the
Seller, together with the Purchaser, shall negotiate, execute and deliver an
agreement with Auramet International LLC (Auramet), creating an account
in favour of the Purchaser and setting out the terms by which Auramet will
assist the Purchaser in monetizing deliveries of Payable Gold.
Banro shall take all actions necessary (including, as
appropriate solicit and obtain the consent of the holders of notes issued
pursuant to the Note Indenture and the trustee and other parties to the
collateral trust agreement and security agreements related to the Note
Indenture) to, and shall within 60 days of the date hereof, amend the Note
Indenture and the collateral trust agreement and security agreements related
thereto to characterize the PSA Obligations as a Priority Lien in accordance
with the Note Indenture and as otherwise reasonably requested by the Purchaser.
6.10 |
Banro Covenants |
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(a) |
During the Delivery Period, Banro shall not (i) declare
or pay any dividend on the common shares in the capital of Banro, or (ii)
make any payments to directors or management of Banro not in the ordinary
course of business, and shall not, and will cause the Banro Group Entities
to not, pursue any construction of projects other than the Twangiza
Project and the projects known as the Namoya Project, the Kamituga Project
and the Lugushwa Project and will not pursue any exploration activities
other than in connection with such projects and with respect to properties
held by Banro Congo Mining S.A. |
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(b) |
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Purchaser in
accordance with the terms of this Agreement. The Parties acknowledge and
agree that any breach by Banro of its obligations under this Section would
cause the Purchaser irreparable harm for which monetary damages alone
would not be a sufficient remedy and that therefore the Purchaser may seek
and obtain orders of specific performance, injunctions and other equitable
remedies and remedies available under civil laws against Banro with
respect thereto as a court of competent jurisdiction or an arbitrator
under Section 13.1 may see fit to grant with respect to any such breach
and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies. |
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ARTICLE 7
BANRO TRANSFERS AND CONTROL
7.1 |
Owner of Project
Assets |
Subject to Section 7.3 and except as provided in Section8.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 7.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 7.1 shall not restrict any leased personal property
(provided that the lessee is the Seller) or personal property that is equipment
that is obsolete or no longer in use under the Operating Plan.
7.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 7.3, Banro and the Seller shall
not, and shall ensure that the Twangiza Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 7.3(c), holding Project Assets, does not during the Delivery Period:
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(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 7.3(c), holding Project
Assets. |
7.3 |
Permitted Transfers and Changes of
Control |
Section 7.2 shall not prohibit a Transfer or Change of Control,
if: Transfer of the Project Asset
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(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA Entity: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Purchaser all of the Sellers
and, if applicable, the other Banro Group Entities obligations under this
Agreement pursuant to an agreement in form and substance satisfactory to
the Purchaser, acting reasonably; |
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
8.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 8.2 |
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(a)(vii)); |
Change of Control
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(b) |
in the case of a Change of Control of Banro, the Seller,
the Twangiza Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
7.3(c): |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed Change of
Control; |
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(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
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(A) |
assumes in favour of the Purchaser all of the obligations
of Banro under this Agreement, such assumption to occur by an agreement in
form and substance satisfactory to the Purchaser, acting reasonably;
and |
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(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
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(iii) |
in respect of such Change of Control: |
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(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 8.2; |
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(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(v) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(b)(v)); |
Inter-corporate Transfer
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(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of Banro: |
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(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
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(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
7.3(a)(i) through 7.3(a)(vii) are complied with mutatis mutandis;
or |
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(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
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(1) |
the provisions of Sections 7.3(a)(i), 7.3(a)(iv),
7.3(a)(v) and 7.3(a)(vi) are complied with mutatis mutandis;
and |
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(2) |
the Seller provides a confirmation in favour of the
Purchaser that its obligations under this Agreement shall continue in full
force and effect despite any such Transfer; |
Joint Ventures and Minority Dispositions
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(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
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(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
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(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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(iv) |
such other person agrees in a document, or documents,
acceptable to the Purchaser, acting reasonably, with the PSA Entity, the
Purchaser and any other such person to acknowledge the obligations of the
Seller under this Agreement and the Security Agreements, including the
granting to the Purchaser of all the security interests contemplated
thereunder; provided that, if such other person acquires any legal right,
title or interest in and to any of the Project Assets (including any
registered or recorded title in and to the Properties), such person
assumes on a joint and several basis with the Seller all of the
obligations and duties under this Agreement and grants the same charges
and security interests in, to and over the Project Assets to which it
acquires any legal right, title or interest, and enters into the same
Security Agreements entered into by the Seller and its subsidiaries
pursuant to Section 8.2; |
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(v) |
all filings have been made and all other actions have
been taken that are required in order for the Purchaser to continue at all
times following such transaction to have the valid and perfected security
interest contemplated by Section 8.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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(viii) |
the Purchaser confirms in writing that it does not
reasonably expect such minority interest disposition, joint venture or
other similar commercial arrangement to have a Material Adverse Effect;
or |
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With Consent
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(e) |
the Purchaser provides its prior written
consent. |
ARTICLE 8
SECURITY
8.1 |
Financings and Encumbrances |
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(a) |
During the Delivery Period, except for Permitted
Indebtedness, no PSA Entity shall incur or enter into any
Indebtedness. |
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(b) |
Except as provided in this Article 8, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
8.2 |
Security |
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(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, guaranteeing the performance, when due, of
all PSA Obligations; and (ii) grant, as security for the payment and
performance, when due, of all PSA Obligations, to and in favour of the
Purchaser first ranking charges and security interests (subject only to
the Prior Ranking Permitted Encumbrances) in, to and over Project
Collateral (other than the Properties and Processing Plant), pursuant to
one or more agreements (the Seller Security Agreements) executed
by each to and in favour of the Purchaser, in form and substance
satisfactory to the Purchaser, acting reasonably, the charged amount (the
Secured Amount ) of such charges and security interests being
initially the Prepayment Amount, such amount to reduce rateably upon
delivery of each Scheduled Monthly Quantity. |
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(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Purchaser, in form and substance satisfactory
to the Purchaser, acting reasonably, guaranteeing the payment and
performance, when due, of all PSA Obligations; and (ii) grant, as security
for its obligations under such guarantee to and in favour of the
Purchaser, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral), all
pursuant to one or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Purchaser,
acting reasonably. |
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(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and Postponement
of Claims), in favour of and in form and substance satisfactory to
the Purchaser, acting reasonably, that subordinates and postpones the
enforcement of any such debts, liabilities and obligations and the
realization of any charges or security interests to secure such claims to
the Security Agreements and, from and after a Banro Event of Default, or
any event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, and until such Banro Event of
Default is remedied, subordinates and postpones the payment of all such
debt, liabilities and obligations (other than Permitted Distributions) to
the payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
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(d) |
Following the Security Trigger Event, if so requested in
writing by the Purchaser, the Banro Group Entities shall not, for so long
as a Banro Event of Default, or any event or circumstance which, with
notice, the passage of time or both, would constitute a Banro Event of
Default, continues, make any Distribution other than a Permitted
Distribution. |
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(e) |
At the Purchasers request, Banro shall, and shall cause
the Seller (and any other Banro Group Entity from which Produced Gold is
sold) to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times following the Security Trigger Event, the Seller shall not,
and Banro shall ensure that the Seller does not, make any Distributions
other than a Permitted Distribution from such account if a Banro Event of
Default, or event which with the giving of notice or the passage of time
or both would constitute a Banro Event of Default, has occurred and is
continuing, or if a Banro Event of Default would occur or arise
immediately after, or as a result of, making a Distribution. |
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(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Purchaser may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Purchaser has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Purchaser continues to secure the PSA Obligations and with no change in
the priority thereof. The Seller shall pay all costs and expenses
associated with the foregoing including in connection with the preparation
and registration of all documentation in connection therewith that is
required by the Purchaser. |
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(i) |
Notwithstanding the foregoing, the Purchaser hereby
agrees that the obligations set out in the Section 8.2 shall be satisfied
prior the Security Trigger Event by the execution, delivery and as
applicable, registration of the documents so identified Schedule
B. |
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
8.3 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Purchaser shall have
substantially similar access rights and obligations as provided in Section 5.5.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Purchaser is
entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule C to the Purchaser on and
as of the date of this Agreement on a joint and several basis. The
representations and warranties set forth in Schedule C shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
9.2 |
Representations and Warranties of the
Purchaser |
The Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, hereby makes the
representations and warranties set forth in Schedule D to Banro and the Seller
on and as of the date of this Agreement. The representations and warranties set
forth in Schedule D shall be deemed to be repeated by the Purchaser as of the
date of the Closing Date.
9.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule C and
Schedule D shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
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ARTICLE 10
BANRO EVENTS OF DEFAULT
10.1 |
Banro Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of Default):
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(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchaser on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Purchaser
notifying the Seller of such default; |
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(b) |
other than as provided in Section 10.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Purchaser to the PSA
Entities of written notice of such breach or default, except in respect of
the covenant set out in Section 6.9, which shall constitute a Banro Event
of Default immediately on notice thereof, or such longer period of time as
the Purchaser may determine in its sole discretion; |
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(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Purchaser to Banro and the Seller of written notice of
such inaccuracy, or such longer period of time as the Purchaser may
determine in its sole discretion; |
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(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
- 38 -
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(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Purchaser notifying the PSA Entities of such
default. |
10.2 |
Remedies |
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(a) |
If a Banro Event of Default occurs and is continuing, the
Purchaser shall have the right, upon written notice to Banro and the
Seller at its option and in addition to and not in substitution for any
other remedies available at law or equity, to take any or all of the
following actions: |
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(i) |
demand all amounts and deliveries owing by the Seller to
the Purchaser; |
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(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 10.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the Purchaser
hereunder, but for the occurrence of such Banro Event of Default. Upon
demand from the Purchaser, the Seller shall promptly pay all such amounts
to the Purchaser; and |
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(iii) |
enforce the PSA Security. |
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(b) |
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The Parties hereby acknowledge and agree that: (i) the
Purchaser will be damaged by a Banro Event of Default; (ii) it would be
impracticable or extremely difficult to fix the actual damages resulting
from a Banro Event of Default; (iii) any sums payable in accordance with
Section 10.2(a) with respect to a Banro Event of Default are in the nature
of liquidated damages, not a penalty, and are fair and reasonable; and
(iv) the amount payable in accordance with Section 10.2(a) or with respect
to a Banro Event of Default represents a reasonable estimate of fair
compensation for the losses that may reasonably be anticipated from such
Banro Event of Default in full and final satisfaction of all amounts owed
in respect of such Banro Event of Default. |
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(c) |
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For greater certainty, if the Purchaser does not exercise
its right under Section 10.2(a)(ii), the obligations of Banro and the
Seller or any successors shall continue in full force and
effect. |
- 39 -
ARTICLE 11
PURCHASER EVENTS OF DEFAULT
11.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of Default):
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(a) |
the Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect, and such breach or default is not remedied within a period of 30
days following delivery by the Seller to the Purchaser of written notice
of such breach or default, or such longer period of time as the Seller may
determine in its sole discretion; or |
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(b) |
any of the representations or warranties given by the
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to the Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
If a Purchaser Event of Default under Section 11.1 has occurred
and is continuing, then Banro and the Seller shall have no right to terminate
this Agreement, but shall be entitled to all other remedies available to it at
law or in equity.
ARTICLE 12
TERMINATION ENTITLEMENT
12.1 |
Termination
Entitlement |
If the Seller wishes to terminate the delivery of Payable Gold
to the Purchaser during the Delivery Period in accordance with the terms and
conditions of this Agreement (a Seller Termination Event), it shall
provide written notice thereof to the Purchaser and the purchase of Refined Gold
not delivered shall be cancelled and the Purchaser shall be entitled to receive
a one-time termination amount (the Termination Amount) [Commercially
sensitive information redacted].
ARTICLE 13
GENERAL
13.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officer of each of Banro and the Purchaser for prompt
resolution. Any such dispute, controversy or claim which cannot be resolved by
the chief executive officers within 15 days after it has been so referred to them hereunder, including the determination of the scope or
applicability of this Agreement to arbitrate, shall be settled by binding arbitration in accordance
with the rules for arbitration set out in Schedule F. The determination of such arbitrator shall be
final and binding upon the Parties and there shall be no appeals from any determination of the
arbitrator. Judgment on the award may be entered in any court having jurisdiction. This
Section 13.1 shall not preclude the Parties from seeking provisional remedies in aid of arbitration
from a court of competent jurisdiction. The Parties covenant and agree that they shall conduct
all aspects of such arbitration having regard at all times to expediting the final resolution of such
arbitration.
- 40 -
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
13.3 |
Reimbursement of Expenses |
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(a) |
The Seller and Banro shall pay to the Purchaser all
reasonable costs and expenses (including all reasonable legal fees and
disbursements of counsel) incurred by the Purchaser in connection with
this Agreement and the other related transactions, including: |
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(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Purchaser and any on-site inspections by the Purchaser or its
representatives; |
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(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated thereunder; |
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(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Purchaser at law or in
equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
- 41 -
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(viii) |
the incorporation and organization of the Purchaser, as
well as the initial issuances of notes or other investment instruments
required to capitalize the Purchaser with the Prepayment Amount;
and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Purchaser, including fees and expenses related to
fiscal and collateral agents, valuation tax reporting and
audit. |
(collectively, the Reimbursable
Expenses).
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(b) |
The obligations of the Seller under this Section 13.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
13.4 |
Termination;
Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 6.4, 6.10, 10.2, 11.2,
13.1, 13.7, 13.9 and Schedule F and such other provisions of this Agreement as
are required to give effect thereto.
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Purchaser and any Banro Group Entity.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Purchaser on the one hand and any Banro Group
Entity on the other hand.
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
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(a) |
If to either Banro or the Seller,
to: |
- 42 -
Banro Corporation
1 First Canadian
Place
Suite 7070, 100 King Street West
Toronto, Ontario, M5X 1E3, Canada
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Attention: |
Chief Financial Officer |
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Telecopier No.: |
416-366-7722 |
with a copy to:
Norton Rose Fulbright Canada LLP
Royal Bank Plaza, South Tower, Suite 3800
200 Bay Street
Toronto,
Ontario, M5J 2Z4, Canada
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Attention: |
Mike Moher |
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Telecopier No.: |
416- 216-3930 |
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(b) |
If to the Purchaser, to: |
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[Redacted]
with a copy to:
Goodmans LLP
333 Bay Street, Suite
3400
Toronto, Ontario M5H 2S7
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Attention: |
Kari MacKay |
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Telecopier No.: |
416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
- 43 -
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
13.13 |
Priority Debt Sharing
Confirmation |
The Purchaser hereby agrees, for the benefit of all holders of
each other existing and future Series of Priority Lien Debt and each existing
and future Priority Debt Representative, that as of the Security Trigger Event,
all Priority Lien Obligations will be and are secured equally and ratably by all
Liens (as defined in the Collateral Trust Agreement) at any time granted by
Banro or any Obligor (as defined in the Collateral Trust Agreement) to secure
the obligations in respect of the Priority Notes, whether or not upon property
otherwise constituting Collateral (as defined in the Collateral Trust
Agreement), that all such Liens will be enforceable by the Collateral Agent for
the benefit of all holders of Priority Lien Obligations equally and ratably
(except that the Priority Stream Obligations (as defined in the Collateral Trust
Agreement) shall be paid in priority to the other Priority Lien Obligations in
accordance with Section 3.4(a) of the Collateral Trust Agreement), and that the
Purchaser is bound by the provisions in the Collateral Trust Agreement relating
to the order of application of proceeds from enforcement of such Liens, and
consent to and direct the Collateral Agent to perform its obligations under the
Collateral Trust Agreement.
- 44 -
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
13.16 |
Assignment |
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
The Purchaser shall be entitled at any time and from time
to time to Transfer any, or all, of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 7.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Purchaser. In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
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TWANGIZA GFSA HOLDINGS |
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Per: |
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Name: |
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Title: |
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BANRO CORPORATION |
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Per: |
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Name: Richard
Brissenden |
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Title:
Chairman of the Board |
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TWANGIZA MINING S.A. |
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Per: |
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Name: Desire Sangara |
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Title: Chairman
of the Board |
SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. Dated
as of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY AGREEMENTS
This is Schedule B to the Gold Purchase and Sale
Agreement between Twangiza GFSA
Holdings, Banro Corporation and Twangiza
Mining S.A. Dated as of February 27, 2015
Prior to the Security Trigger Event:
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Pledge of production and equipment, duly
registered in Democratic Republic of the Congo |
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Guarantees contemplated by Section 8.2(b) of
Banro and the Guarantors |
Following the Security Trigger Event:
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Joinder and sharing confirmations as a Priority
Lien Debt |
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Guarantees contemplated by Section 8.2(b)
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Assignment, Subordination and Postponement of
Claims contemplated by Section 8.2(c) |
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Pledge of accounts with Auramet International
LLC, if any |
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Pledge of accounts with any Processor
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SCHEDULE C
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule C to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
dated as of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchaser as
follows:
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(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non- assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Twangiza (Barbados) Limited; |
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(f) |
the authorized share capital of Twangiza (Barbados)
Limited consists of an unlimited number of common shares and 20,000
preferred shares, of which, as of the date hereof, (i) only 1,200,000
common shares are issued and outstanding as fully paid and non- assessable
shares in the capital of Twangiza (Barbados) Limited and are legally and
beneficially owned as to 100% by Banro Group (Barbados) Limited, and (ii)
only 20,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Twangiza (Barbados) Limited and
are legally and beneficially owned as to 100% by investment funds managed
by Gramercy Funds Management LLC; |
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right, title or interest
in or to, the Twangiza Project, the Properties, the Project Assets or the
gold produced from the Properties; |
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Twangiza Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities, other than those that
are not necessary on the date this representation and warranty is given
and are expected to be obtained in the ordinary course of business by the
time they are necessary, where the failure to have or obtain such
Approvals would not reasonably be expected to have a Material Adverse
Effect, and there are no facts or circumstances that might reasonably be
expected to adversely affect the issuance or obtaining of any such
material Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Twangiza Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Twangiza Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
- 4 -
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Twangiza
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Twangiza Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Twangiza Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the |
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Bribery Act (United Kingdom)). Without limiting
the generality of the foregoing, each Banro Group Entity is in material
compliance with all applicable Environmental Laws, and there are no
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending or, to the best of its knowledge, threatened against
or affecting any Banro Group Entity with respect to the ownership, use,
maintenance and operation of any of the Twangiza Project, the Properties
and the Project Assets relating to any applicable Environmental Laws,
where any adverse determination with respect thereto or liability imposed
therein could reasonably be expected to result in a Material Adverse
Effect and such adverse determination is reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Twangiza Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Twangiza Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with the Toronto
Stock Exchange (all such documents filed prior to the date of execution of
this Agreement, the Public Disclosure Documents) since January 1,
2013. As of the effective date of such Public Disclosure Documents, to its
knowledge, none of the Public Disclosure Documents contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, it being
acknowledged that if there is any inconsistency between two or more
documents comprising the Public Disclosure Documents regard shall be had
to the last filed document. All of the Public Disclosure Documents, as of
their respective effective dates (and as of the effective dates of any
amendments thereto), complied as to both form and content in all material
respects with the requirements of applicable Securities Laws or were
amended on a timely basis to correct deficiencies identified by securities
commissions or similar securities regulatory authorities. Banro has not
filed any confidential material change report with any securities
regulatory authority that at the date of execution of this Agreement
remains confidential. There is no material adverse change concerning Banro
which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this
Agreement; |
- 5 -
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Twangiza Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements
referred to in the first sentence of paragraph (y) above or in the notes
thereto, other than (i) liabilities or obligations arising in the ordinary
course of business since September 30, 2014 or publicly announced by
Banro, or obligations to Auramet International LLC pursuant to the gold
sale arrangements with Auramet International
LLC; |
- 6 -
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock- out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America (Foreign
Company Plan) that is intended to qualify for special tax treatment
meets all of the requirements for such treatment and has obtained all
necessary approvals of all relevant Governmental Authorities. No Foreign
Company Plan has any unfunded liabilities, determined in accordance with
generally accepted accounting principles, that have not been fully accrued
on Banros financial statements or that will not be fully offset by
insurance. All Foreign Company Plans are registered where required by, and
are in good standing under, all Applicable Laws. For purposes of this
paragraph, Employee Benefit Plan means any employee benefit plan,
program, policy or arrangement sponsored, maintained or contributed to by
a Banro Group Entity or any of their respective Affiliates or with respect
to which the Seller, any Banro Group Entity or any of their respective
Affiliates has any liability or obligation; |
- 7 -
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Twangiza Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
- 8 -
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE D
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
dated as of February 27, 2015
The Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is an exempted company duly incorporated and validly
existing under the laws of Cayman Islands and is up to date in respect of
all filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE E
TERMINATION AMOUNT
This is Schedule E to the Gold Purchase and Sale
Agreement between Twangiza GFSA
Holdings, Banro Corporation and Twangiza
Mining S.A. dated as of February 27, 2015
[Commercially sensitive information redacted]
SCHEDULE F
DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
dated as of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this
Agreement.
1. |
Initiation of Arbitration Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the other Party
(the Respondent) a statement of claim setting out in sufficient detail
the facts and any contentions of law on which it relies, and the relief that it
claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have
not previously been submitted by any Party, and (where practicable) by any
relevant samples. |
- 2 -
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration
hearing. |
3. |
Meetings and Hearings |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
4. |
The Decision |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
5. |
Jurisdiction and Powers of the Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
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(i) |
determine any question of law arising in the
arbitration; |
- 3 -
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(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
6. |
Confidentiality |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations or contractual
rights as to disclosure on a confidential basis to which it may be
entitled. |
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
GOLD PURCHASE AND SALE AGREEMENT
(Tranche 2)
TWANGIZA GFSA HOLDINGS
and
BANRO CORPORATION
and
TWANGIZA MINING S.A.
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
TWANGIZA GFSA HOLDINGS, an
exempted company incorporated under the laws of Cayman Islands
(the Purchaser)
- and - BANRO CORPORATION, a
corporation existing under the laws of Canada
(Banro)
- and -
TWANGIZA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms
when used in these recitals shall have the respective meanings set forth in
Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchaser and the Purchaser has agreed to purchase from the Seller, the Payable
Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Twangiza Project;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Gold Payment Amount
has the meaning set out in Section 4.2.
Additional Gold Payment Date
means in respect of each Monthly Delivery Date, the day that falls two Business
Days after such Monthly Delivery Date.
- 2 -
Affiliate means, in relation
to any person or entity, any other person or entity controlling, controlled by
or under common control with such first mentioned person or entity.
Agreement means this gold
purchase and sale agreement and all attached schedules, in each case as the same
may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
Applicable Laws means any
international, federal, state, provincial or municipal law, regulation,
ordinance, code, order or other requirement or rule of law or the rules,
policies, orders or regulations of any Governmental Authority or stock exchange,
including any judicial or administrative interpretation thereof, applicable to a
person or any of its properties, assets, business or operations.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules means the
Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 8.2(c) .
Banro Event of Default has the
meaning set out in Section 10.1.
Banro Group Entity means the
PSA Entities and their respective Affiliates from time to time.
Business Day means any day
other than a Friday, Saturday or Sunday or a day that is a statutory holiday
under the laws of the Province of Ontario, Canada or the laws of South Africa.
Change of Control of a person
(the Subject Person) means the consummation of any transaction,
including any consolidation, arrangement, amalgamation or merger or any issue,
Transfer or acquisition of voting shares, the result of which is that any other
person or group of other persons acting jointly or in concert for purposes of
such transaction: (i) becomes the beneficial owner, directly or indirectly, of
more than 50% of the voting shares of the Subject Person; or (ii) acquires
control of the Subject Person; provided that a Change of Control shall not
include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means the date
that is two Business Days following the date on which the conditions precedent
to payment of the Prepayment Amount are satisfied or waived in accordance with
Section 3.5 or such other date as the Parties may agree, such date expected to
occur on or before April 15, 2015.
- 3 -
Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information has
the meaning set out in Section 6.4(a) .
Contaminant means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to:
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(i) |
impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold purchase
and sale agreements with the Purchaser or Namoya GSA Holdings, any financing
transaction pursuant to which (a) Banro or any of the Banro Group Entities
receive cash advances or deposits in respect of future revenues from the sale of
specified mineral assets to a person other than an Affiliate, (b) such advances
or deposits are recorded as liabilities, but not as debt, on the consolidated
balance sheet of Banro and (c) such liability is amortized upon the delivery of
such mineral assets.
Delivery Period means the
period beginning April 15, 2015 and ending on the date on which the last
Scheduled Monthly Quantity is delivered.
Disqualified Stock means, with
respect to any person, any shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such person, including any preferred stock and limited
liability or partnership interests (whether general or limited) (collectively,
Capital Stock) of such person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
|
(i) |
matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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|
(ii) |
is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock));
or |
- 4 -
|
(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means, with
respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
|
(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means, with
respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement;
provided that in no event shall an operating lease be deemed to constitute an
Encumbrance.
Environment means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces.
Environmental Laws means any
Applicable Laws relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal, discharge or storage thereof or
the terms of any Approval issued in connection therewith) or the environmental
conditions on, under or about any real property (including soil, groundwater and
indoor, underground and ambient air conditions).
Gold Price means, with respect
to any day, the afternoon per ounce gold fixing price in U.S. dollars quoted by
the London Bullion Market Association for Refined Gold on such day or, if such
day is not a trading day, the immediately preceding trading day; provided that
if, for any reason, the London Bullion Market Association is no longer in
operation, or if the price of Refined Gold is not confirmed, acknowledged by or
quoted by the London Bullion Market Association, the Gold Price shall be
determined by reference to the price of Refined Gold in a manner endorsed by the
World Gold Council, failing which the Gold Price shall be determined by
reference to the price of gold on a commodity futures exchange mutually
acceptable to the Parties acting reasonably.
- 5 -
Governmental Authority means
any national, federal, state, provincial, regional, municipal, territorial or
local government, agency, department, ministry, authority, board, bureau,
tribunal, commission, official, court or securities commission, and any person
entitled under Applicable Law to exercise executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any of the foregoing
entities, including all tribunals, commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other person controlled by any of the
foregoing.
Group Collateral has the
meaning set out in Section 8.2(b) .
Group Security Agreements has
the meaning set out in Section 8.2(b)
Guarantors means Banro, Namoya
Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and Lugushwa Mining
S.A.
Hazardous Materials means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law.
Indebtedness of any person
means, without duplication:
|
(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligation
until the amount of such obligation becomes a liability on the balance
sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
- 6 -
|
(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or obligor); |
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(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
- 7 -
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
|
(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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|
(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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|
(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
|
(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of
any of the Banro Group Entities; or |
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(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Insolvency Event means, in
relation to any person, any one or more of the following events or
circumstances:
|
(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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|
(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
|
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|
(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such
proceeding; |
- 8 -
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(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
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|
(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any person that
provides any Secured Financing, excluding any Banro Group Entity.
Material Adverse Effect means
any event, occurrence, change or effect that, when taken individually or
together with all other events, occurrences, changes or effects, is or could
reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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|
(ii) |
limit, restrict or impair the ability of the Seller to
operate the Twangiza Project in all material respects in accordance with
the Operating Plan for the Twangiza Project in effect at the time of the
event, occurrence, change or effect; |
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|
(iii) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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|
(iv) |
result in a Banro Event of
Default. |
Minimum Gold Price means
$1,100 per ounce.
Monthly Delivery Date means
the date no later than the fifth Business Day after the end of each calendar
month.
Net Proceeds means with
respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Purchaser upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators, as may be amended from time to time, or any
successor instrument, rule or policy.
Note Indenture means the
indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among
Banro, as issuer, each of the guarantors named therein and Equity Financial
Trust Company, as trustee and collateral agent.
- 9 -
Operating Plan means the life
of mine operating plan for the Twangiza Project delivered to the Purchaser on
the date hereof.
Order means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Authority or other decision-making authority of competent
jurisdiction.
Parties means the parties to
this Agreement.
Payable Gold means 22,248
ounces of Refined Gold.
Permits means all licenses,
permits, approvals (including environmental approvals) authorizations, rights
(including surface and access rights and rights of way, and access to water and
power), privileges, concessions or franchises necessary for the construction,
development and operation of the Twangiza Project as is contemplated by the
Operating Plan.
Permitted Distributions means
any payment of Distributions required to satisfy any obligation under this
Agreement, Applicable Laws or the terms of any Secured Financing entered into in
accordance with this Agreement, as a result of any Affiliate of any PSA Entity
not otherwise having sufficient funds to satisfy such obligation.
Permitted Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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(ii) |
following the termination of the Note
Indenture: |
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(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
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(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
- 10 -
|
(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
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(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation obligations);
and |
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(H) |
liens in respect of the following: |
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|
[Details of individual lien holders
redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clause
(ii)(1), (4), (5), (7) and (9) of such definition. |
Permitted Indebtedness means:
|
(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
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(ii) |
following the termination of the Note
Indenture: |
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(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Purchaser and Namoya GSA
Holdings; |
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(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
- 11 -
|
(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
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(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 75% of the forecast gold production of the
Twangiza Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchaser or the Collateral Agent on
its behalf; and (B) the ranking of the PSA Obligations vis-à-vis such
secured Indebtedness shall correspond to the ranking of the PSA
Obligations vis-à-vis the notes issued under the Note Indenture; |
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(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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(9) |
Indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an individual,
corporation, body corporate, limited or general partnership, joint stock
company, limited liability corporation, joint venture, association, company,
trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prepayment Amount means
$20,000,000.
- 12 -
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture, those
Encumbrances that constitute Priority Liens (as defined in the Note
Indenture) ranking pari passu with the Secured Amount; |
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(ii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Plant means any
mill or other processing facility owned or operated or both by any Banro Group
Entity located on or near the Properties, to the extent that such mill or
processing facility was built with the primary intention of processing ore from
the Properties, or at which Produced Gold is processed.
Produced Gold means any and
all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore
or other products resulting from the further milling, processing or other
beneficiation of minerals mined, produced, extracted or otherwise recovered from
the Properties.
Project Assets means the
shares in the capital of the PSA Entities (other than Banro) and the Properties,
Processing Plant and all present and after-acquired real or personal property,
used or acquired for use by any Banro Group Entity in connection with the
mining, production or extraction of gold from the Properties.
Project Collateral means (A)
the Project Assets, including all present and after-acquired personal property
used in connection with, relating to or arising out of, in whole or in part, the
Project, and (B) the Produced Gold, and in each case including all proceeds
thereof except sales of Produced Gold in the ordinary course of business.
Properties means the mineral
claims, mineral leases and other mining rights, concessions and interests listed
in Schedule A, including all buildings structures improvements, appurtenances
and fixtures that form part of the Twangiza Project, whether created privately
or by the action of any Governmental Authority, and includes any term extension,
renewal, replacement, conversion or substitution of any such mineral claims,
mineral leases and other mining rights, concessions or interests, owned or in
respect of which an interest is held, directly or indirectly, by any Banro Group
Entity at any time during the Delivery Period, whether or not such ownership or
interest is held continuously. The Properties are depicted in the map included
in Schedule A.
PSA Collateral means the
Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means Banro and the
Seller, and any other Affiliate of Banro (now or hereafter incorporated) that
acquires any interest in the Twangiza Project.
PSA Obligations means all
present and future debts, liabilities and obligations of PSA Entities, or all of
them, to the Purchaser under this Agreement.
- 13 -
PSA Security means the charges
and security interests granted in favour of the Purchaser pursuant to the
Security Agreements.
Purchaser Event of Default has
the meaning set out in Section 11.1. Receiving Party has the meaning
set out in Section 6.4(a) .
Refined Gold means marketable
metal bearing material in the form of gold bars or coins that is refined to
standards meeting or exceeding 995 parts per 1,000 fine gold.
Reimbursable Expenses has the
meaning set out in Section 13.3. Restricted Person means any person or
entity that:
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(i) |
is named, identified, described on or included on any
of: |
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(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
|
(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
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(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
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(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Scheduled Monthly Quantities
means 618 ounces of Refined Gold. Secured Amount has the meaning set
out in Section 8.2(a) .
- 14 -
Secured Financing means any
Indebtedness for borrowed money of, or lending facility or other financing
arrangement (including any secured derivative transactions entered into in
connection with such Indebtedness, or any other hedge financing) in favour of,
any Banro Group Entity that is secured by all or any part of the Project Assets.
Security Agreements means the Seller Security Agreements, the Group
Security Agreements and the Assignment, Subordination and Postponement of
Claims.
Seller Security Agreements has
the meaning set out in Section 8.2(a) .
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment
payments or other additions that may become payable in respect thereof, imposed
by any Governmental Authority, which taxes shall include all income or profits
taxes (including federal, provincial, and state income taxes) other than income
or profits taxes levied in respect of the income or profits of the Purchaser,
non-resident withholding taxes, sales and use taxes, branch profit taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
licence taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, land transfer taxes, capital taxes,
extraordinary income taxes, surface area taxes, property taxes, asset transfer
taxes, and other charges and obligations of the same or of a similar nature to
any of the foregoing.
Time of Delivery has the meaning set out in
Section 2.2(b) .
Transfer means to sell,
transfer, assign, convey, dispose or otherwise grant a right, title or interest
(including expropriation or other transfer required or imposed by law or any
Governmental Authority, whether voluntary or involuntary).
Twangiza Holdcos means
together, Banro Group (Barbados) Limited and Twangiza (Barbados) Limited.
Twangiza Project means the
Properties and the mining operations developed, constructed and operated at and
in respect of the Properties.
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
|
(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
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(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
- 15 -
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(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
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(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an
obligation; |
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(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second person; |
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(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
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(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
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and controls, controlling, controlled by and under
common control have corresponding meanings. |
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(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
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(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
- 16 -
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A |
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Description of Sellers Properties (with map)
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Schedule B |
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Security Agreements |
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Schedule C |
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Banro and Seller Representations and Warranties
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Schedule D |
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Purchaser Representations and Warranties |
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Schedule E |
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Termination Amount |
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Schedule F |
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Dispute Resolution |
ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable Gold |
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(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Seller, the Payable Gold,
free and clear of all Encumbrances, in exchange for the Prepayment
Amount. |
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(b) |
As further provided in Section 4.3(b) Payable Gold shall
not be reduced for, and the Purchaser shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable processor agreement. |
2.2 |
Delivery Obligations |
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(a) |
During the Delivery Period, the Payable Gold shall be
sold and delivered to the Purchaser on each Monthly Delivery Date in the
Scheduled Monthly Quantities in accordance with the terms of this
Agreement. |
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(b) |
The Seller shall deliver to the Purchaser all Payable
Gold to be delivered under this Agreement by way of credit or allocation
to the metal account or accounts designated by the Purchaser from time to
time, or physical delivery to such other location specified by the
Purchaser from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to be
unreasonably withheld. Delivery of the Payable Gold to the Purchaser shall
be deemed to have been made at the time on the date the Payable Gold is
credited or allocated or physically delivered, as applicable, to the
designated metal account of the Purchaser (the Time of
Delivery). Title to, and risk of loss of, the Payable Gold shall pass
from the Seller to the Purchaser at the Time of Delivery. The Seller
acknowledges that the Purchaser intends to engage a selling agent that
will take delivery of the Payable Gold on behalf of the Purchaser for
purposes of monetizing the Payable Gold. All costs and expenses pertaining
to each delivery of the Payable Gold to the Purchaser, including such
selling arrangements, shall be borne by the Seller so long as the
Purchasers accounts are in customary locations in United Kingdom,
Switzerland or South Africa. |
- 17 -
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(c) |
The Seller hereby represents and warrants to the
Purchaser that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of the Purchaser, |
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(ii) |
the Seller will have good, valid and marketable title to
such Payable Gold, and |
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(iii) |
such Payable Gold will be free and clear of all
Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchaser,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchaser, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchaser the Refined Gold physically resulting
from Produced Gold. |
ARTICLE 3
PREPAYMENT
3.1 |
Prepayment |
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(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchaser of the Payable Gold, the Purchaser hereby agrees to pay the
Prepayment Amount in cash against, and as a prepayment of the purchase
price for the Payable Gold, subject to the conditions set out in Sections
3.2 and 3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Prepayment Amount except as expressly provided in this
Agreement. The Purchaser will not be entitled to demand repayment of the
Prepayment Amount except to the extent expressly set forth in this
Agreement. |
- 18 -
3.2 |
Use of Prepayment
Amount |
The Seller shall use, and Banro shall cause to be used, the
Prepayment Amount only to pay certain outstanding dividends as of the last
payment date on or prior to the date of receipt by the Seller of the Prepayment
Amount on preferred shares in the capital of Banro Group (Barbados) Limited and
the Series A preferred shares in the capital of Banro, to repay accounts payable
and thereafter, for general corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchaser |
The Purchaser shall pay the Prepayment Amount to or to the
order of the Seller on the Closing Date, by wire transfer of immediately
available funds to the bank account or accounts designated by the Seller in
writing, once each of the following conditions has been satisfied in full:
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(a) |
Banro and the Seller shall have delivered to the
Purchaser a certificate of status, good standing or compliance (or
equivalent) for each PSA Entity and the Twangiza Holdcos, issued by the
relevant Governmental Authority dated no earlier than five Business Days
prior to the Closing Date; |
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(b) |
Each PSA Entity shall have executed and delivered to the
Purchaser a certificate of a senior officer of each in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Purchaser may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the
Purchaser a favourable opinion, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from external
legal counsel to Banro, the Seller, the Twangiza Holdcos and the PSA
Entities as to (i) the legal status of each, (ii) the corporate power and
authority of each to execute, deliver and perform this Agreement and the
Security Agreements to which it is a party, (iii) the execution and
delivery of this Agreement and the Security Agreements to which it is a
party and the enforceability of this Agreement and the Security Agreements
against each, (iv) that this Agreement and the Security Agreements, and
the performance by Banro and the Seller of the obligations hereunder or
thereunder, do not conflict with, violate, result in a breach of, or
constitute a default or an event creating rights of acceleration,
termination, modification or cancellation or a loss of rights under (with
or without the giving notice or lapse of time or both), the Note
Indenture, the Collateral Trust Agreement, or any of the Collateral
Documents (as defined in the Note Indenture) governed by Ontario law, (v)
the outstanding share capital of the Seller and the Twangiza Holdcos, (vi)
the creation of valid mortgages and charge upon, and security interests in
(including as to ranking of such security interests), the PSA Collateral
under the Security; and (vii) the due registration or filing of the
Security Agreements and, where applicable, the perfection of the security
interest of the Purchaser (including as to ranking of such security
interests), under such Security Agreements and the results of the usual
searches that would be conducted in connection with the security that is
the subject of such Security Agreements; |
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the
Purchaser a legal opinion addressed to the Purchaser from external
counsel, in form and substance satisfactory to the Purchaser, with respect
to title to the Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
except for those that would not
reasonably be expected to have a Material Adverse Effect;
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(g) |
each PSA Entity shall have delivered to the Purchaser a
certificate of a senior officer confirming: |
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(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse
Effect; |
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(h) |
Banro shall have amended the Note Indenture and the
Collateral Trust Agreement and security agreements as required by the
Purchaser to, among other things, characterize the Secured Amount as a
Priority Lien Debt (as defined in the Note Indenture), require the trustee
under such Collateral Trust Agreement and security agreements to transfer
the Project Collateral only in accordance with the terms of the gold
purchase and sale agreement among Banro, Namoya Mining S.A. and Namoya GSA
Holdings, and to preserve the collateral trust following termination of
the Note Indenture; |
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(i) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchaser under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchaser, under such Security
Agreements; |
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(j) |
Banro and the Seller shall execute and deliver an
agreement with the Purchaser and Auramet International LLC ("Auramet"),
creating an account in favour of the Purchaser and setting out the terms
by which Auramet will assist the Purchaser in monetizing deliveries of
Payable Gold; |
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(k) |
in accordance with Applicable law, Banro shall cause each
of [names of individuals redacted] and each other equity holder of any
Banro Group Entity that is an individual, but is not either an employee of
Banros counsel in Democratic Republic of Congo or an employee of Banro to
transfer for no or nominal consideration their ownership of any such
equity securities to one or more current employees of Banros counsel in
Democratic Republic of Congo or current employees of Banro; |
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(l) |
the Seller paid all Reimbursable Expenses of the
Purchaser payable as at the Closing Date; and |
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(m) |
Banro and the Seller shall have delivered to the
Purchaser prior to the Closing Date a certificate of insurance coverage or
other evidence of acceptable insurance coverage. |
3.4 |
Conditions Precedent in Favour of the Seller |
On or before the Closing Date, the Purchaser will satisfy each
of the following conditions:
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(a) |
the Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for the
Purchaser, issued by the relevant Governmental Authority; |
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(b) |
the Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of the Purchaser, in form
and substance satisfactory to Banro and the Seller, acting reasonably, as
to the constating documents of the Purchaser; the resolutions of the sole
director of the Purchaser, authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
the names, positions and true signatures of the persons authorized to sign
this Agreement on behalf of the Purchaser; and such other matters
pertaining to the transactions contemplated hereby as Banro and the Seller
may reasonably require; |
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(c) |
the Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to the
Purchaser as to (i) the legal status of the Purchaser, (ii) the corporate
power and authority of the Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
the Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by the Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice or lapse of time
or both would become a Purchaser Event of Default) has occurred and is
continuing. |
3.5 |
Satisfaction of Conditions
Precedent |
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(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchaser, and may be waived by the Purchaser
in its sole discretion in whole or in part in writing. Each of the
conditions set forth in Section 3.4 is for the exclusive benefit of Banro
and the Seller, and may be waived by Banro and the Seller in their sole
discretion in whole or in part in writing. |
ARTICLE 4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
4.2 |
Additional Gold
Deliveries |
On each Additional Gold Delivery Date, the Seller shall sell
and deliver to the Buyer an amount of Refined Gold (an Additional Gold
Delivery Amount) equal to the greater of:
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(a) |
zero; and |
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(b) |
the product of: |
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(i) |
the Scheduled Monthly Quantity delivered on the Monthly
Delivery Date corresponding to such Additional Gold Payment Date,
and |
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(A) |
the Minimum Gold Price |
minus
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(B) |
the Gold Price on the Business Day following the Monthly
Delivery Date, |
divided by the Gold Price on the
Business Day following the Monthly Delivery Date.
Each Additional Gold Delivery Amount
shall be delivered in accordance with the provisions of this Agreement.
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(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchaser shall be made without any deduction, withholding, charge or levy
on account of any Taxes, all of which shall be for the sole account of the
Seller. All Taxes, if any, as are required to be so deducted, withheld,
charged or levied by the Seller or any of its Affiliates on any such
delivery or payment, shall be paid by the Seller delivering or paying to
the Purchaser or on their behalf, in addition to such delivery or payment,
such additional delivery or payment as is necessary to ensure that the net
amount received by the Purchaser (net of any such Taxes, including any
Taxes required to be deducted, withheld, charged or levied on any such
additional amount) equals the full amount that the Purchaser would have
received had no such deduction, withholding, charge or levy been
required. |
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(b) |
If the Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.3(a) hereof, the Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.3(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of the Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of the Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental
Authority. |
In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Purchaser, on the one hand, and the Seller on the other
hand, agree that they shall negotiate in good faith with each other to amend
this Agreement so that the other Parties and their Affiliates are no longer
adversely affected by any such enactment, revision, implementation, amendment or
interpretation, as the case may be; provided that any amendment to this
Agreement shall not have any adverse effect on the Seller and its Affiliates on
the one hand, and the Purchaser and its Affiliates on the other hand.
- 23 -
Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date, calculated and
compounded monthly in arrears. Any dollar amount or Refined Gold owing by a
Party to any other Party under this Agreement may be set off against any dollar
amount or Refined Gold owed to such Party by the other Party. Any amount of
Refined Gold set off and withheld against any non-payment by a Party shall be
valued at the Gold Price as of the first trading day that such amount of Refined
Gold became payable to such Party.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
5.1 |
Notice of
Information |
Prior to delivery to the Purchaser of any of the information
set out in this Article 5 or otherwise in this Agreement, Banro and the Seller
shall inform the Purchaser if such information would be considered material
non-public information of Banro. In such event, the Purchaser shall have the
option, in its sole discretion, to (a) refuse to accept such information, or (b)
require that such information be either (i) publicly disclosed within two
Business Days, or (ii) where such information constitutes scientific and
technical information representing a material change to the Twangiza Project,
delivered at a subsequent date within 45 days, together with an updated
technical report in accordance with NI 43-101, and notice of such refusal or
delayed delivery will constitute a valid waiver, or partial waiver, as the case
may be, of the obligation to deliver such information.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchaser:
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(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis,
including: |
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(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
- 24 -
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 5.2(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
5.3 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 5.2(a),
5.2(b), 5.2(c) and 5.2(e) shall be provided by the Seller to the Purchaser. For
the purposes of this Section 5.3 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
If during the Delivery Period, Banro shall cease to be a
reporting issuer under Applicable Law, the PSA Entities shall permit the
Purchaser and its authorized representatives and agents to perform audits or
other reviews and examinations of its books and records from time to time at
reasonable times at the Purchasers sole risk and expense and upon five Business
Days notice, to confirm compliance with the terms of this Agreement, provided
that unless there is a continuing Banro Event of Default, the Purchaser and its
authorized representatives and agents will not exercise such rights more often
than one (1) time during any calendar quarter. The Purchaser shall diligently
complete any audit or other examination permitted hereunder.
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchaser and its
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Twangiza Project, in each case to monitor the mining and
processing operations on the Twangiza Project. Provided there has been no
Banro Event of Default that is continuing, the Purchaser may avail itself
of such right of access a maximum of twice per calendar year (including
the mill in respect thereof), and for this purpose, invitations from Banro
will not reduce the number of visits the Purchaser may request.
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchaser shall have the
right to conduct an investors tour on the Twangiza Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Twangiza Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchaser and its invitees, and the Purchaser shall (a)
comply and request that its invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchaser or Banro and the Seller or any
of their respective invitees, employees, officers, directors, agents, or
representatives caused by the Purchasers exercise of its rights under
this Section. |
ARTICLE 6
COVENANTS
6.1 |
Conduct of
Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Twangiza Project Assets on a commercial basis as
though the Seller has a full economic interest in all the gold produced
from the Properties. Banro and the Seller shall ensure that (i) all
cut-off grade, short term mine planning and production decisions
concerning the Twangiza Project shall be based on gold prices typical of
normal industry practice and consistent with the practices of Banro and
its Affiliates as at the date of this Agreement in connection with such
decisions, and (ii) all longer term planning and resource and reserve
calculations concerning the Twangiza Project shall use gold prices based
on normal industry practice and consistent with the historical practices
of Banro and its Affiliates in connection with such planning and
calculations. |
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(b) |
Subject to Section 6.1(a), all decisions regarding the
Twangiza Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Twangiza Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Twangiza Project, and (iv) except
as provided herein, the sale of gold and terms thereof, shall be made by
the Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 6.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Twangiza Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
6.2 |
Preservation of Corporate
Existence |
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(a) |
Except as permitted in Section 6.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 7.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in
favour of the Purchaser all the obligations of such Party under this
Agreement and any Security Agreement to which it is a
party. |
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(a) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(b) |
Banro and the Seller shall insure the Twangiza Project in
such amounts and with such coverage as is customary in the mining industry
for the operation of the Twangiza Project. Banro and the Seller covenant
and agree that in the event of any loss or damage that is insured prior to
the end of the Delivery Period, the Seller shall at its option either (i)
use all Net Proceeds of any insurance payment received by a Banro Group
Entity to rebuild or repair all damaged facilities forming part of the
Twangiza Project, or (ii) use the Purchasers share of the Net Proceeds of
such insurance payment received by any Banro Group Entity within 30 days
after receipt of such proceeds by such Banro Group Entity, to acquire
Refined Gold in accordance with Section 2.2(d) and shall deliver to the
Purchaser such amount of Refined Gold, the Purchasers share being
calculated as the ratio of the net present value of Payable Gold not
delivered to the Purchaser to the value of the Twangiza Project when
measured by the same criterion which establishes the value of such
Purchasers interest. A failure to agree on the foregoing proportion is
arbitrable under Section 13.1. |
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(c) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Purchaser at reasonable
intervals no more than once per year, furnish to the Purchaser a
certificate setting forth the nature and extent of all insurance
maintained by or on behalf of the PSA Entities in accordance with
Section6.3(a) . Banro and the Seller shall, upon the request of the
Purchaser, provide the Purchaser with copies of all insurance policies as
in effect from time to time relating to the Project Assets.
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(d) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
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(a) |
Each Party (a Receiving Party) agrees that it
shall maintain as confidential and shall not disclose, and shall cause its
Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 5, 2014
(Confidential Information), provided that a Receiving Party may
disclose Confidential Information in the following
circumstances: |
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(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 6.4(c) and 13.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 13.1; |
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
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(v) |
with the consent of the disclosing Party; and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
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(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 6.4(a)(i) are made aware of this Section 6.4 and
comply with the provisions of this Section 6.4. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Purchaser will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 6.4(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
6.5 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchaser
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 6.5, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
- 29 -
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Twangiza Project.
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Twangiza
Project.
[Redacted]
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(a) |
During the Delivery Period, Banro shall not (i) declare
or pay any dividend on the common shares in the capital of Banro, or (ii)
make any payments to directors or management of Banro not in the ordinary
course of business, and shall not, and will cause the Banro Group Entities
to not, pursue any construction of projects other than the Twangiza
Project and the projects known as the Namoya Project, the Kamituga Project
and the Lugushwa Project and will not pursue any exploration activities
other than in connection with such projects and with respect to properties
held by Banro Congo Mining S.A. |
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(b) |
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Purchaser in
accordance with the terms of this Agreement. The Parties acknowledge and
agree that any breach by Banro of its obligations under this Section would
cause the Purchaser irreparable harm for which monetary damages alone
would not be a sufficient remedy and that therefore the Purchaser may seek
and obtain orders of specific performance, injunctions and other equitable
remedies and remedies available under civil laws against Banro with
respect thereto as a court of competent jurisdiction or an arbitrator
under Section 13.1 may see fit to grant with respect to any such breach
and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies. |
ARTICLE 7
BANRO TRANSFERS AND CONTROL
7.1 |
Owner of Project
Assets |
Subject to Section 7.3 and except as provided in Section8.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 7.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 7.1 shall not restrict any leased personal property
(provided that the lessee is the Seller) or personal property that is equipment
that is obsolete or no longer in use under the Operating Plan.
- 30 -
7.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 7.3, Banro and the Seller shall
not, and shall ensure that the Twangiza Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 7.3(c), holding Project Assets, does not during the Delivery Period:
|
(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 7.3(c), holding Project
Assets. |
7.3 |
Permitted Transfers and Changes of
Control |
Section 7.2 shall not prohibit a Transfer or Change of Control,
if: Transfer of the Project Asset
|
(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA
Entity: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Purchaser all of the Sellers
and, if applicable, the other Banro Group Entities obligations under this
Agreement pursuant to an agreement in form and substance satisfactory to
the Purchaser, acting reasonably; |
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
8.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 8.2 |
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(a)(vii)); |
Change of Control
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(b) |
in the case of a Change of Control of Banro, the Seller,
the Twangiza Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
7.3(c): |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed Change of
Control; |
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(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
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(A) |
assumes in favour of the Purchaser all of the obligations
of Banro under this Agreement, such assumption to occur by an agreement in
form and substance satisfactory to the Purchaser, acting reasonably;
and |
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(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
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(iii) |
in respect of such Change of
Control: |
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(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 8.2; |
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(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(v) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(b)(v)); |
Inter-corporate Transfer
|
(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of
Banro: |
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(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
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(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
7.3(a)(i) through 7.3(a)(vii) are complied with mutatis mutandis;
or |
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(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
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(1) |
the provisions of Sections 7.3(a)(i), 7.3(a)(iv),
7.3(a)(v) and 7.3(a)(vi) are complied with mutatis mutandis; and |
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(2) |
the Seller provides a confirmation in favour of the
Purchaser that its obligations under this Agreement shall continue in full
force and effect despite any such Transfer; |
Joint Ventures and Minority Dispositions
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(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
|
(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
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(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
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(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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(iv) |
such other person agrees in a document, or documents,
acceptable to the Purchaser, acting reasonably, with the PSA Entity, the
Purchaser and any other such person to acknowledge the obligations of the
Seller under this Agreement and the Security Agreements, including the
granting to the Purchaser of all the security interests contemplated
thereunder; provided that, if such other person acquires any legal right,
title or interest in and to any of the Project Assets (including any
registered or recorded title in and to the Properties), such person
assumes on a joint and several basis with the Seller all of the
obligations and duties under this Agreement and grants the same charges
and security interests in, to and over the Project Assets to which it
acquires any legal right, title or interest, and enters into the same
Security Agreements entered into by the Seller and its subsidiaries
pursuant to Section 8.2; |
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(v) |
all filings have been made and all other actions have
been taken that are required in order for the Purchaser to continue at all
times following such transaction to have the valid and perfected security
interest contemplated by Section 8.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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(viii) |
the Purchaser confirms in writing that it does not
reasonably expect such minority interest disposition, joint venture or
other similar commercial arrangement to have a Material Adverse Effect;
or |
With Consent
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(e) |
the Purchaser provides its prior written
consent. |
ARTICLE 8
SECURITY
8.1 |
Financings and
Encumbrances |
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(a) |
During the Delivery Period, except for Permitted
Indebtedness, no PSA Entity shall incur or enter into any
Indebtedness. |
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(b) |
Except as provided in this Article 8, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
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(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, guaranteeing the performance, when due, of
all PSA Obligations; and (ii) grant, as security for the payment and
performance, when due, of all PSA Obligations, to and in favour of the
Purchaser first ranking charges and security interests (subject only to
the Prior Ranking Permitted Encumbrances) in, to and over Project
Collateral (other than the Properties and Processing Plant), pursuant to
one or more agreements (the Seller Security Agreements) executed
by each to and in favour of the Purchaser, in form and substance
satisfactory to the Purchaser, acting reasonably, the charged amount (the
Secured Amount ) of such charges and security interests being
initially the Prepayment Amount, such amount to reduce rateably upon
delivery of each Scheduled Monthly Quantity. |
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(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Purchaser, in form and substance satisfactory
to the Purchaser, acting reasonably, guaranteeing the payment and
performance, when due, of all PSA Obligations; and (ii) grant, as security
for its obligations under such guarantee to and in favour of the
Purchaser, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral), all
pursuant to one or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Purchaser,
acting reasonably. |
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(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and Postponement
of Claims), in favour of and in form and substance satisfactory to
the Purchaser, acting reasonably, that subordinates and postpones the
enforcement of any such debts, liabilities and obligations and the
realization of any charges or security interests to secure such claims to
the Security Agreements and, from and after a Banro Event of Default, or
any event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, and until such Banro Event of
Default is remedied, subordinates and postpones the payment of all such
debt, liabilities and obligations (other than Permitted Distributions) to
the payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
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(d) |
If so requested in writing by the Purchaser, the Banro
Group Entities shall not, for so long as a Banro Event of Default, or any
event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, continues, make any
Distribution other than a Permitted Distribution. |
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(e) |
At the Purchasers request, Banro shall, and shall cause
the Seller (and any other Banro Group Entity from which Produced Gold is
sold) to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times, the Seller shall not, and Banro shall ensure that the Seller
does not, make any Distributions other than a Permitted Distribution from
such account if a Banro Event of Default, or event which with the giving
of notice or the passage of time or both would constitute a Banro Event of
Default, has occurred and is continuing, or if a Banro Event of Default
would occur or arise immediately after, or as a result of, making a
Distribution. |
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(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Purchaser may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Purchaser has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Purchaser continues to secure the PSA Obligations and with no change in
the priority thereof. The Seller shall pay all costs and expenses
associated with the foregoing including in connection with the preparation
and registration of all documentation in connection therewith that is
required by the Purchaser. |
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
8.3 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Purchaser shall have
substantially similar access rights and obligations as provided in Section 5.5.
- 36 -
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Purchaser is
entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule C to the Purchaser on and
as of the date of this Agreement on a joint and several basis. The
representations and warranties set forth in Schedule C shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
9.2 |
Representations and Warranties of the
Purchaser |
The Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, hereby makes the
representations and warranties set forth in Schedule D to Banro and the Seller
on and as of the date of this Agreement. The representations and warranties set
forth in Schedule D shall be deemed to be repeated by the Purchaser as of the
date of the Closing Date.
9.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule C and
Schedule D shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
ARTICLE 10
BANRO EVENTS OF DEFAULT
10.1 |
Banro Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of Default):
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(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchaser on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Purchaser
notifying the Seller of such default; |
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(b) |
other than as provided in Section 10.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Purchaser to the PSA
Entities of written notice of such breach or default, or such longer
period of time as the Purchaser may determine in its sole discretion;
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- 37 -
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(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Purchaser to Banro and the Seller of written notice of
such inaccuracy, or such longer period of time as the Purchaser may
determine in its sole discretion; |
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(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
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(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Purchaser notifying the PSA Entities of such
default. |
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(a) |
If a Banro Event of Default occurs and is continuing, the
Purchaser shall have the right, upon written notice to Banro and the
Seller at its option and in addition to and not in substitution for any
other remedies available at law or equity, to take any or all of the
following actions: |
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(i) |
demand all amounts and deliveries owing by the Seller to
the Purchaser; |
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(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 10.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the Purchaser
hereunder, but for the occurrence of such Banro Event of Default. Upon
demand from the Purchaser, the Seller shall promptly pay all such amounts
to the Purchaser; and |
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(iii) |
enforce the PSA Security. |
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(b) |
The Parties hereby acknowledge and agree that: (i) the
Purchaser will be damaged by a Banro Event of Default; (ii) it would be
impracticable or extremely difficult to fix the actual damages resulting
from a Banro Event of Default; (iii) any sums payable in accordance with
Section 10.2(a) with respect to a Banro Event of Default are in the nature
of liquidated damages, not a penalty, and are fair and reasonable; and
(iv) the amount payable in accordance with Section 10.2(a) or with respect
to a Banro Event of Default represents a reasonable estimate of fair
compensation for the losses that may reasonably be anticipated from such
Banro Event of Default in full and final satisfaction of all amounts owed
in respect of such Banro Event of Default. |
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(c) |
For greater certainty, if the Purchaser does not exercise
its right under Section 10.2(a)(ii), the obligations of Banro and the
Seller or any successors shall continue in full force and
effect. |
ARTICLE 11
PURCHASER EVENTS OF DEFAULT
11.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of Default):
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(a) |
the Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect, and such breach or default is not remedied within a period of 30
days following delivery by the Seller to the Purchaser of written notice
of such breach or default, or such longer period of time as the Seller may
determine in its sole discretion; or |
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(b) |
any of the representations or warranties given by the
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to the Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
If all of the conditions precedents set out in Section 3.3 have
been satisfied and a Purchaser Event of Default in respect of a failure to pay
the Prepayment Amount occurs and is continuing and the Purchaser fails to cure
such Purchaser Event of Default in full within 90 days of written notice from
the Seller of such default, then the Seller may elect to at any time thereafter
so long as the Purchaser has not already cured the Purchaser Event of Default,
to terminate the Agreement. In the event of any other Purchaser Event of Default
under Section 11.1 having occurred that is continuing, then Banro and the Seller
shall have no right to terminate this Agreement, but shall be entitled to all
other remedies available to it at law or in equity.
- 39 -
ARTICLE 12
TERMINATION ENTITLEMENT
12.1 |
Termination
Entitlement |
If the Seller wishes to terminate the delivery of Payable Gold
to the Purchaser during the Delivery Period in accordance with the terms and
conditions of this Agreement (a Seller Termination Event), it shall
provide written notice thereof to the Purchaser and the purchase of Refined Gold
not delivered shall be cancelled and the Purchaser shall be entitled to receive
a one-time termination amount (the Termination Amount) [Commercially
sensitive information redacted].
ARTICLE 13
GENERAL
13.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officer of each of Banro and the Purchaser for prompt
resolution. Any such dispute, controversy or claim which cannot be resolved by
the chief executive officers within 15 days after it has been so referred to
them hereunder, including the determination of the scope or applicability of
this Agreement to arbitrate, shall be settled by binding arbitration in
accordance with the rules for arbitration set out in Schedule F. The
determination of such arbitrator shall be final and binding upon the Parties and
there shall be no appeals from any determination of the arbitrator. Judgment on
the award may be entered in any court having jurisdiction. This Section 13.1
shall not preclude the Parties from seeking provisional remedies in aid of
arbitration from a court of competent jurisdiction. The Parties covenant and
agree that they shall conduct all aspects of such arbitration having regard at
all times to expediting the final resolution of such arbitration.
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
13.3 |
Reimbursement of
Expenses |
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(a) |
The Seller and Banro shall pay to the Purchaser all
reasonable costs and expenses (including all reasonable legal fees and
disbursements of counsel) incurred by the Purchaser in connection with
this Agreement and the other related transactions, including:
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- 40 -
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(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Purchaser and any on-site inspections by the Purchaser or its
representatives; |
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(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated thereunder; |
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(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Purchaser at law or in
equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
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(viii) |
the incorporation and organization of the Purchaser, as
well as the initial issuances of notes or other investment instruments
required to capitalize the Purchaser with the Prepayment Amount;
and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Purchaser, including fees and expenses related to
fiscal and collateral agents, valuation tax reporting and
audit. |
(collectively,
the Reimbursable Expenses).
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(b) |
The obligations of the Seller under this Section 13.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
13.4 |
Termination;
Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 6.4, 6.8, 10.2, 11.2,
13.1, 13.7, 13.9 and Schedule F and such other provisions of this Agreement as
are required to give effect thereto.
- 41 -
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Purchaser and any Banro Group Entity.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Purchaser on the one hand and any Banro Group
Entity on the other hand.
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
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(a) |
If to either Banro or the Seller,
to: |
Banro Corporation
1 First Canadian
Place
Suite 7070, 100 King Street West
Toronto, Ontario, M5X 1E3, Canada
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Attention: |
Chief Financial Officer |
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Telecopier No.: |
416-366-7722 |
with a copy to:
Norton Rose Fulbright Canada LLP
Royal Bank Plaza, South Tower, Suite 3800
200 Bay Street
Toronto,
Ontario, M5J 2Z4, Canada
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Attention: |
Mike Moher |
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Telecopier No.: |
416- 216-3930 |
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(b) |
If to the Purchaser, to: |
[Redacted]
- 42 -
with a copy to:
Goodmans LLP
333 Bay Street, Suite
3400
Toronto, Ontario M5H 2S7
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Attention: |
Kari MacKay |
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Telecopier No.: |
416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
- 43 -
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
13.13 |
Priority Debt Sharing
Confirmation |
The Purchaser hereby agrees, for the benefit of all holders of
each other existing and future Series of Priority Lien Debt and each existing
and future Priority Debt Representative, that all Priority Lien Obligations will
be and are secured equally and ratably by all Liens (as defined in the
Collateral Trust Agreement) at any time granted by Banro or any Obligor (as
defined in the Collateral Trust Agreement) to secure the obligations in respect
of the Priority Notes, whether or not upon property otherwise constituting
Collateral (as defined in the Collateral Trust Agreement), that all such Liens
will be enforceable by the Collateral Agent for the benefit of all holders of
Priority Lien Obligations equally and ratably (except that the Priority Stream
Obligations (as defined in the Collateral Trust Agreement) shall be paid in
priority to the other Priority Lien Obligations in accordance with Section
3.4(a) of the Collateral Trust Agreement), and that the Purchaser is bound by
the provisions in the Collateral Trust Agreement relating to the order of
application of proceeds from enforcement of such Liens, and consent to and
direct the Collateral Agent to perform its obligations under the Collateral
Trust Agreement.
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
The Purchaser shall be entitled at any time and from time
to time to Transfer any, or all, of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 7.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Purchaser. In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
TWANGIZA GFSA HOLDINGS |
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Per: |
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Name: |
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Title: |
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BANRO CORPORATION |
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Per: |
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Name: Richard Brissenden |
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Title: Chairman of the Board |
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TWANGIZA MINING S.A. |
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Per: |
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Name: Desire Sangara |
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Title: Chairman of the Board
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SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
Dated as of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY AGREEMENTS
This is Schedule B to the Gold Purchase and Sale
Agreement between Twangiza GFSA
Holdings, Banro Corporation and Twangiza
Mining S.A. Dated as of February 27, 2015
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Joinder and sharing confirmations as Priority
Lien Debt |
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Guarantees contemplated by Section 8.2(b)
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Assignment, Subordination and Postponement of
Claims contemplated by Section 8.2(c) |
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Pledge of accounts with Auramet International
LLC |
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Pledge of accounts with any Processor
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SCHEDULE C
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule C to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
dated as of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchaser as
follows:
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(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non- assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Twangiza (Barbados) Limited; |
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(f) |
the authorized share capital of Twangiza (Barbados)
Limited consists of an unlimited number of common shares and 20,000
preferred shares, of which, as of the date hereof, (i) only 1,200,000
common shares are issued and outstanding as fully paid and non-assessable
shares in the capital of Twangiza (Barbados) Limited and are legally and
beneficially owned as to 100% by Banro Group (Barbados) Limited, and (ii)
only 20,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Twangiza (Barbados) Limited and
are legally and beneficially owned as to 100% by investment funds managed
by Gramercy Funds Management LLC; |
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right, title or interest
in or to, the Twangiza Project, the Properties, the Project Assets or the
gold produced from the Properties; |
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Twangiza Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities, other than those that
are not necessary on the date this representation and warranty is given
and are expected to be obtained in the ordinary course of business by the
time they are necessary, where the failure to have or obtain such
Approvals would not reasonably be expected to have a Material Adverse
Effect, and there are no facts or circumstances that might reasonably be
expected to adversely affect the issuance or obtaining of any such
material Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Twangiza Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Twangiza Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
- 4 -
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Twangiza
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Twangiza Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Twangiza Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the Bribery Act
(United Kingdom)). Without limiting the generality of the foregoing,
each Banro Group Entity is in material compliance with all applicable
Environmental Laws, and there are no actions, suits, claims, notices of
violation, hearings, investigations or proceedings pending or, to the best
of its knowledge, threatened against or affecting any Banro Group Entity
with respect to the ownership, use, maintenance and operation of any of
the Twangiza Project, the Properties and the Project Assets relating to
any applicable Environmental Laws, where any adverse determination with
respect thereto or liability imposed therein could reasonably be expected
to result in a Material Adverse Effect and such adverse determination is
reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Twangiza Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Twangiza Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with the Toronto
Stock Exchange (all such documents filed prior to the date of execution of
this Agreement, the Public Disclosure Documents) since January 1,
2013. As of the effective date of such Public Disclosure Documents, to its
knowledge, none of the Public Disclosure Documents contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, it being
acknowledged that if there is any inconsistency between two or more
documents comprising the Public Disclosure Documents regard shall be had
to the last filed document. All of the Public Disclosure Documents, as of
their respective effective dates (and as of the effective dates of any
amendments thereto), complied as to both form and content in all material
respects with the requirements of applicable Securities Laws or were
amended on a timely basis to correct deficiencies identified by securities
commissions or similar securities regulatory authorities. Banro has not
filed any confidential material change report with any securities
regulatory authority that at the date of execution of this Agreement
remains confidential. There is no material adverse change concerning Banro
which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this Agreement;
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- 5 -
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Twangiza Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements
referred to in the first sentence of paragraph (y) above or in the notes
thereto, other than (i) liabilities or obligations arising in the ordinary
course of business since September 30, 2014 or publicly announced by
Banro, or obligations to Auramet International LLC pursuant to the gold
sale arrangements with Auramet International LLC;
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- 6 -
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock- out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America (Foreign
Company Plan) that is intended to qualify for special tax treatment
meets all of the requirements for such treatment and has obtained all
necessary approvals of all relevant Governmental Authorities. No Foreign
Company Plan has any unfunded liabilities, determined in accordance with
generally accepted accounting principles, that have not been fully accrued
on Banros financial statements or that will not be fully offset by
insurance. All Foreign Company Plans are registered where required by, and
are in good standing under, all Applicable Laws. For purposes of this
paragraph, Employee Benefit Plan means any employee benefit plan,
program, policy or arrangement sponsored, maintained or contributed to by
a Banro Group Entity or any of their respective Affiliates or with respect
to which the Seller, any Banro Group Entity or any of their respective
Affiliates has any liability or obligation; |
- 7 -
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Twangiza Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
- 8 -
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE D
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
dated as of February 27, 2015
The Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is an exempted company duly incorporated and validly
existing under the laws of Cayman Islands and is up to date in respect of
all filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE E
TERMINATION AMOUNT
This is Schedule E to the Gold Purchase and Sale
Agreement between Twangiza GFSA
Holdings, Banro Corporation and Twangiza
Mining S.A. dated as of February 27, 2015
[Commercially sensitive information redacted]
SCHEDULE F
DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Twangiza GFSA
Holdings, Banro Corporation and Twangiza Mining S.A.
dated as of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this
Agreement.
1. |
Initiation of Arbitration
Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the other Party
(the Respondent) a statement of claim setting out in sufficient detail
the facts and any contentions of law on which it relies, and the relief that it
claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have
not previously been submitted by any Party, and (where practicable) by any
relevant samples. |
- 2 -
|
(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration
hearing. |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
5. |
Jurisdiction and Powers of the
Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
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(i) |
determine any question of law arising in the
arbitration; |
- 3 -
|
(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations or contractual
rights as to disclosure on a confidential basis to which it may be
entitled. |
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
GOLD PURCHASE AND SALE AGREEMENT
NAMOYA GSA HOLDINGS, among other purchasers
and
BANRO CORPORATION
and
NAMOYA MINING S.A.
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
NAMOYA GSA HOLDINGS, an exempted company incorporated
under the laws of Cayman Islands
(the Agent)
- and -
Additional Purchasers joined from time to time
(together with the Agent, the Purchasers)
- and -
BANRO CORPORATION, a corporation existing under the laws
of Canada
(Banro)
- and -
NAMOYA MINING S.A., a corporation existing under
the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms when used in these recitals
shall have the respective meanings set forth in Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchasers and the Purchasers have agreed to purchase from the Seller, the
Payable Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Namoya Project;
AND WHEREAS the Parties agree that additional purchasers
may be joined with the Agent as the Purchasers on the terms and subject to the
provisions set out herein with the Agent acting as agent therefor;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
- 2 -
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Term has the
meaning set out in Section 5.1(a) .
Affiliate means, in relation
to any person or entity, any other person or entity controlling, controlled by
or under common control with such first mentioned person or entity.
Agreement means this gold
purchase and sale agreement and all attached schedules, in each case as the same
may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
AOI has the meaning set out in
the definition of Properties.
Applicable Laws means any
international, federal, state, provincial or municipal law, regulation,
ordinance, code, order or other requirement or rule of law or the rules,
policies, orders or regulations of any Governmental Authority or stock exchange,
including any judicial or administrative interpretation thereof, applicable to a
person or any of its properties, assets, business or operations.
Applicable Percentage means,
in respect of the Agent, 100%, as such percentage(s) may change from time to
time in accordance with this Agreement.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules means the
Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 9.2(c) .
Banro Event of Default has the
meaning set out in Section 11.1.
Banro Group Entity means the
PSA Entities and their respective Affiliates from time to time.
Business Day means any day
other than a Friday, Saturday or Sunday or a day that is a statutory holiday
under the laws of the Province of Ontario, Canada or the laws of South Africa.
- 3 -
Change of Control of a person
(the Subject Person) means the consummation of any transaction,
including any consolidation, arrangement, amalgamation or merger or any issue,
Transfer or acquisition of voting shares, the result of which is that any other
person or group of other persons acting jointly or in concert for purposes of
such transaction: (i) becomes the beneficial owner, directly or indirectly, of
more than 50% of the voting shares of the Subject Person; or (ii) acquires
control of the Subject Person; provided that a Change of Control shall not
include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means the date
that is two Business Days following the date on which the conditions precedent
to payment of the Deposit are satisfied or waived in accordance with Section 3.5
or such other date as the Parties may agree, such date expected to occur on or
before April 15, 2015.
Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information has
the meaning set out in Section 7.6(a) .
Contaminant means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to:
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(i) |
impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Date of Delivery has the
meaning set out in Section 2.2(b) .
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold purchase
and sale agreements with the Agent or Twangiza GFSA Holdings, any financing
transaction pursuant to which (a) Banro or any of the Banro Group Entities
receive cash advances or deposits in respect of future revenues from the sale of
specified mineral assets to a person other than an Affiliate, (b) such advances
or deposits are recorded as liabilities, but not as debt, on the consolidated
balance sheet of Banro and (c) such liability is amortized upon the delivery of
such mineral assets.
- 4 -
Delivery means the delivery of
doré to a Processor (or any Non-Doré Shipment pursuant to a Non-Doré Agreement).
Deposit means $50,000,000,
which amount may be increased in the sole discretion of the Purchasers up to an
amount not to exceed $60,000,000 with a proportionate adjustment to the
definition of Payable Gold.
Deposit Reduction Date means
the date occurring after the Closing Date on which the Deposit is reduced to nil
in accordance with the formula set forth in Section 2.4(a) .
Disqualified Stock means, with
respect to any person, any shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such person, including any preferred stock and limited
liability or partnership interests (whether general or limited) (collectively,
Capital Stock) of such person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
|
(i) |
matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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(ii) |
is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock)); or |
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(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means, with
respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
|
(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means, with
respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement;
provided that in no event shall an operating lease be deemed to constitute an
Encumbrance.
- 5 -
Environment means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces.
Environmental Laws means any
Applicable Laws relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal, discharge or storage thereof or
the terms of any Approval issued in connection therewith) or the environmental
conditions on, under or about any real property (including soil, groundwater and
indoor, underground and ambient air conditions).
Gold Payment means the receipt
by a Banro Group Entity of payment (in cash or in kind), whether provisional or
final, or other consideration from a Processor in respect of any Delivery.
Gold Price means, with respect
to any day, the afternoon per ounce gold fixing price in U.S. dollars quoted by
the London Bullion Market Association for Refined Gold on such day or, if such
day is not a trading day, the immediately preceding trading day; provided that
if, for any reason, the London Bullion Market Association is no longer in
operation, or if the price of Refined Gold is not confirmed, acknowledged by or
quoted by the London Bullion Market Association, the Gold Price shall be
determined by reference to the price of Refined Gold in a manner endorsed by the
World Gold Council, failing which the Gold Price shall be determined by
reference to the price of gold on a commodity futures exchange mutually
acceptable to the Parties acting reasonably.
Gold Purchase Price has the
meaning set out in Section 2.4.
Governmental Authority means
any national, federal, state, provincial, regional, municipal, territorial or
local government, agency, department, ministry, authority, board, bureau,
tribunal, commission, official, court or securities commission, and any person
entitled under Applicable Law to exercise executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any of the foregoing
entities, including all tribunals, commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other person controlled by any of the
foregoing.
Group Collateral has the
meaning set out in Section 9.2(b) .
Group Security Agreements has
the meaning set out in Section 9.2(b)
Guarantors means Banro,
Twangiza Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and Lugushwa
Mining S.A.
- 6 -
Hazardous Materials means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law.
Indebtedness of any person
means, without duplication:
|
(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligation
until the amount of such obligation becomes a liability on the balance
sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
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(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or
obligor); |
- 7 -
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(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
|
(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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|
(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
|
(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of
any of the Banro Group Entities; or |
- 8 -
|
(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Initial Term has the meaning
set out in Section 5.1(a) .
Insolvency Event means, in
relation to any person, any one or more of the following events or
circumstances:
|
(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
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(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such proceeding; |
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(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
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(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any person that
provides any Secured Financing, excluding any Banro Group Entity.
- 9 -
Majority Purchasers means
those Purchasers who, at the relevant time, have provided an amount equal to or
greater than 50.1% of the principal amount of the Deposit advanced to the
Seller.
Material Adverse Effect means
any event, occurrence, change or effect that, when taken individually or
together with all other events, occurrences, changes or effects, is or could
reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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(ii) |
limit, restrict or impair the ability of the Seller to
operate the Namoya Project in all material respects in accordance with the
Operating Plan for the Namoya Project in effect at the time of the event,
occurrence, change or effect; |
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(iii) |
cause any material decrease to expected gold production
from the Namoya Project based on the Operating Plan for the Namoya Project
in effect at the time of the event, occurrence, change or
effect; |
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(iv) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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(v) |
result in a Banro Event of
Default. |
Monthly Report means a written
report in relation to a calendar month with respect to the Namoya Project that
contains, for such month:
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(i) |
types, tonnes and gold grade of ore mined; |
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(ii) |
types, tonnes and gold grade of any ore
stockpiled; |
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(iii) |
the number of ounces of gold contained in ore processed
during such month, but not delivered to a processor by the end of such
month; |
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(iv) |
at the request of the Agent, a summary of Deliveries
during such month showing, among other things, provisional Refined Gold
and Payable Gold amounts and Gold Payments and any final settlement
adjustments made during such month; |
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(v) |
at the request of the Agent, copies of all Processor
statements, invoices or receipts; and |
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(vi) |
at the request of the Agent, a detailed calculation of
the uncredited balance of the Deposit as of the end of the
month. |
Namoya Holdcos means together,
Banro Group (Barbados) Limited and Namoya (Barbados) Limited.
- 10 -
Namoya Project means the
Properties and the mining operations developed, constructed and operated at and
in respect of the Properties.
Net Proceeds means with
respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Agent upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators, as may be amended from time to time, or any
successor instrument, rule or policy.
Non-Doré Agreements means all
agreements entered into by a Banro Group Entity for the sale of Non-Doré
Shipments, as the same may be amended, restated, supplemented, or superseded
from time to time.
Non-Doré Shipments has the
meaning set out in Section 2.1(c) .
Note Indenture means the
indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as
issuer, each of the guarantors named therein and Equity Financial Trust Company,
as trustee and collateral agent.
Ongoing Price means $150 per
ounce.
Operating Plan means the life
of mine operating plan for the Namoya Project delivered to the Agent on the date
hereof.
Order means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Authority or other decision-making authority of competent
jurisdiction.
Other Minerals means any and
all marketable metal bearing material in whatever form or state (including ore)
that is mined, produced, extracted or otherwise recovered from any location that
is not within the Properties.
Parties means the parties to
this Agreement.
Payable Gold means Refined
Gold in an amount equal to 8.33%, which percentage will increase proportionately
with any increase in the amount of the Deposit to a percentage not to exceed
10%, of the Produced Gold in respect of which any Banro Group Entity receives a
Gold Payment occurring during the Term, as determined in accordance with
Sections 2.1(b) and 2.1(c) .
Permits means all licenses,
permits, approvals (including environmental approvals) authorizations, rights
(including surface and access rights and rights of way, and access to water and
power), privileges, concessions or franchises necessary for the construction,
development and operation of the Namoya Project as is contemplated by the
Operating Plan.
- 11 -
Permitted Distributions means
any payment of Distributions required to satisfy any obligation under this
Agreement, Applicable Laws or the terms of any Secured Financing entered into in
accordance with this Agreement, as a result of any Affiliate of any PSA Entity
not otherwise having sufficient funds to satisfy such obligation.
Permitted Encumbrances
means:
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(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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(ii) |
following the termination of the Note
Indenture: |
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(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
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(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
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(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
- 12 -
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(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(H) |
liens in respect of the following:
[Details of individual lien holders
redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clauses
(ii)(1), (4), (5), (7) and (9) of such definition. |
Permitted Indebtedness means:
|
(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
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(ii) |
following the termination of the Note
Indenture: |
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(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Agent and Twangiza GFSA
Holdings; |
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(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
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(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
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(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 80% of the forecast gold production of the Namoya
Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchasers or the Collateral Agent on
their behalf; and (B) the ranking of the PSA Obligations vis-à-vis such
secured Indebtedness shall correspond to the ranking of the PSA
Obligations vis-à-vis the notes issued under the Note Indenture;
|
- 13 -
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(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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(9) |
indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an individual,
corporation, body corporate, limited or general partnership, joint stock
company, limited liability corporation, joint venture, association, company,
trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture, those
Encumbrances that constitute Priority Liens (as defined in the Note
Indenture) and Parity Liens (as defined in the Note Indenture) and, with
respect to Parity Liens, those ranking pari passu with respect to
the Secured Amount; |
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(ii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Agreements means
all agreements entered into by a PSA Entity with a Processor for the refining of
doré into Refined Gold for the benefit of a PSA Entity, as the same may be
amended, restated, supplemented, or superseded from time to time.
Processing Plant means any
mill or other processing facility owned or operated or both by any Banro Group
Entity located on or near the Properties, to the extent that such mill or
processing facility was built with the primary intention of processing ore from
the Properties, or at which Produced Gold is processed.
Processor means collectively,
any smelter, refiner or other processor of Produced Gold.
Produced Gold means any and
all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore
or other products resulting from the further milling, processing or other
beneficiation of minerals mined, produced, extracted or otherwise recovered from
the Properties.
- 14 -
Project Assets means the
shares in the capital of the PSA Entities (other than Banro) and the Properties,
Processing Plant and all present and after-acquired real or personal property,
used or acquired for use by any Banro Group Entity in connection with the
mining, production or extraction of gold from the Properties.
Project Collateral means (A)
the Project Assets, including all present and after-acquired personal property
used in connection with, relating to or arising out of, in whole or in part, the
Project, and (B) the Produced Gold, and in each case including all proceeds
thereof except sales of Produced Gold in the ordinary course of business.
Properties means the mineral
claims, mineral leases and other mining rights, concessions and interests listed
in Schedule A together with a 20 kilometre circumambient area surrounding the
properties listed in Schedule A (the AOI), including all buildings
structures improvements, appurtenances and fixtures that form part of the Namoya
Project, whether created privately or by the action of any Governmental
Authority, and includes any term extension, renewal, replacement, conversion or
substitution of any such mineral claims, mineral leases and other mining rights,
concessions or interests, owned or in respect of which an interest is held,
directly or indirectly, by any Banro Group Entity at any time during the
Delivery Period, whether or not such ownership or interest is held continuously.
The Properties are depicted in the map included in Schedule A.
PSA Collateral means the
Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means Banro and the
Seller, and any other Affiliate of Banro (now or hereafter incorporated) that
acquires any interest in the Namoya Project.
PSA Obligations means all
present and future debts, liabilities and obligations of PSA Entities, or all of
them, to the Purchasers under this Agreement.
PSA Security means the charges
and security interests granted in favour of the Purchasers pursuant to the
Security Agreements.
Purchased Ounces has the
meaning set out in Section 2.4.
Purchaser Event of Default has
the meaning set out in Section 12.1. Receiving Party has the meaning
set out in Section 7.6(a) .
Reduction Amount means the
Gold Price on the Business Day following the Date of Delivery less the Ongoing
Price.
Refined Gold means marketable
metal bearing material in the form of gold bars or coins that is refined to
standards meeting or exceeding 995 parts per 1,000 fine gold.
- 15 -
Reimbursable Expenses has the
meaning set out in Section 14.3. Restricted Person means any person or
entity that:
|
(i) |
is named, identified, described on or included on any
of: |
|
(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
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(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
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(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
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(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Secured Amount has the meaning
set out in Section 9.2(a) .
Secured Financing means any
Indebtedness for borrowed money of, or lending facility or other financing
arrangement (including any secured derivative transactions entered into in
connection with such Indebtedness, or any other hedge financing) in favour of,
any Banro Group Entity that is secured by all or any part of the Project Assets.
Security Agreements means the Seller Security Agreements, the Group
Security Agreements and the Assignment, Subordination and Postponement of
Claims.
Seller Security Agreements has
the meaning set out in Section 9.2(a) .
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment
payments or other additions that may become payable in respect thereof, imposed
by any Governmental Authority, which taxes shall include all income or profits
taxes (including federal, provincial, and state income taxes) other than income
or profits taxes levied in respect of the income or profits of the Purchasers,
non-resident withholding taxes, sales and use taxes, branch profit taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
licence taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, land transfer taxes, capital taxes,
extraordinary income taxes, surface area taxes, property taxes, asset transfer
taxes, and other charges and obligations of the same or of a similar nature to
any of the foregoing. Term has the meaning set out in Section 5.1.
- 16 -
Time of Delivery has the
meaning set out in Section 2.2(b) .
Transfer means to sell,
transfer, assign, convey, dispose or otherwise grant a right, title or interest
(including expropriation or other transfer required or imposed by law or any
Governmental Authority, whether voluntary or involuntary).
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
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(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
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(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
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(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
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(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an
obligation; |
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(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second
person; |
- 17 -
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(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
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(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
and controls, controlling,
controlled by and under common control have corresponding meanings.
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(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
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(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A |
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Description of Sellers Properties (with map)
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Schedule B |
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Security Agreements |
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Schedule C |
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Intercreditor Principles |
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Schedule D |
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Banro and Seller Representations and Warranties
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Schedule E |
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Purchaser Representations and Warranties |
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Schedule F |
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Dispute Resolution |
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Schedule G |
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Agent |
ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable
Gold |
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(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchasers, and the
Purchasers hereby agree, in accordance with each Purchasers Applicable
Percentage, to purchase from the Seller, the Payable Gold, free and clear
of all Encumbrances. |
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(b) |
As further provided in Section 4.2, Payable Gold shall
not be reduced for, and the Purchasers shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable Processing Agreement. |
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(c) |
In the event any Banro Group Entity intends to sell
Produced Gold in any form other than doré (Non-Doré Shipments),
such sale shall be completed in accordance with a Non-Doré Agreement on
terms and conditions (including in respect of allowable deductions to
determine payability) that are acceptable to the Agent, acting reasonably.
For this purpose, Payable Gold means the recoverable metal content
calculated in accordance with the applicable Non-Doré Agreement. The
Seller shall be deemed to receive a Gold Payment when it receives payment
(whether provisional or final) for a Non-Doré Shipment and the sale and
delivery of the Payable Gold payable on account of the Non-Doré Shipments
shall be made in accordance with Section 2.2. The Seller shall provide the
Agent with a final signed copy of the Non-Doré Agreement within five
Business Days after the execution thereof and any such agreement shall be
on commercially reasonable arms length terms and conditions with a person
who is not a Banro Group Entity. |
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(a) |
Following the Closing Date, no later than the 15 th
day of each month (or the next following Business Day), the Seller
shall sell, and in accordance with Section 2.2(b), deliver to the
Purchasers, in accordance with each Purchasers Applicable Percentage, the
aggregate Payable Gold to which all Gold Payments received in the prior
calendar month relate, it being acknowledged and agreed by the Seller that
it shall use commercially reasonable efforts to deliver Payable Gold to
the Purchasers concurrently with Gold Payments it receives by way of
directions to any Processor. In the event a Gold Payment consists of
provisional payments that may be adjusted upon final settlement of a
Delivery, then: |
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(i) |
on the 15th day of the month following receipt
of such provisional payment or payments (or the next following Business
Day), the Seller shall sell, and in accordance with Section 2.2(b) deliver
to the Purchasers, in accordance with each Purchasers Applicable
Percentage, the Payable Gold in respect of which the Seller received a
provisional Gold Payment, multiplied by the provisional payment percentage
for all Produced Gold in such Delivery, as supported by the documentation
provided pursuant to Section 2.3 and in the applicable Monthly Report;
and |
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(ii) |
on the 15th day of the month following the
date of final settlement of the Delivery with the Processor (or the next
following Business Day), the Seller shall sell, and in accordance with
Section 2.2(b), deliver to the Purchasers, in accordance with each
Purchasers Applicable Percentage, Refined Gold in an amount equal to the
amount, if any, by which the Payable Gold determined pursuant to the final
settlement exceeds the amount of Payable Gold previously delivered to the
Purchasers in respect of such Delivery pursuant to Section 2.2(a)(i), as
supported by the documentation provided pursuant to Section 2.3 and the
applicable Monthly Report, provided that, if such difference is negative,
then the Seller shall be entitled to set off and deduct, in accordance
with each Purchasers Applicable Percentage, such excess amount from the
next required deliveries by the Seller under this Agreement until it has
been fully offset against deliveries to the Purchasers of Refined Gold
pursuant to the first sentence of this Section 2.2(b), or if no such
further deliveries are to be made, the Purchasers shall within ten (10)
Business Days pay the applicable Gold Purchase Price in respect of any
excess ounces delivered to the extent not already paid and any Gold
Purchase Price paid by the Purchasers in respect of such excess ounces
shall be an amount owing to the Seller from the
Purchasers. |
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(b) |
The Seller shall deliver to the Purchasers, in accordance
with each Purchasers Applicable Percentage, all Payable Gold to be
delivered under this Agreement by way of credit or allocation to the metal
account or accounts designated by each of the Purchasers from time to
time, or physical delivery to such other location specified by each of the
Purchasers from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to be
unreasonably withheld. Delivery of the Payable Gold to the Purchasers
shall be deemed to have been made at the time on the date the Payable Gold
is credited or allocated or physically delivered, as applicable, to the
designated metal account of each Purchaser (the Time of Delivery
on such date the Date of Delivery). Title to, and risk of loss
of, the Payable Gold shall pass from the Seller to each of the Purchasers
at the Time of Delivery. The Seller acknowledges that the Purchasers
intend to engage a selling agent that will take delivery of the Payable
Gold on behalf of the Purchasers for purposes of monetizing the Payable
Gold. All costs and expenses pertaining to each delivery of the Payable
Gold to the Purchasers, including such selling arrangements, shall be
borne by the Seller so long as the Purchasers accounts are in customary
locations in United Kingdom, Switzerland or South Africa.
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(c) |
The Seller hereby represents and warrants to the
Purchasers that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of each of the Purchasers, (ii) the Seller
will have good, valid and marketable title to such Payable Gold, and (iii)
such Payable Gold will be free and clear of all Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchasers,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchasers, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchasers the Refined Gold physically resulting
from Produced Gold. No later than January 15 of each year, the Seller
shall deliver to the Purchasers a certificate of a senior officer of the
Seller confirming compliance with this Section 2.2(d) as it relates to the
prior calendar year . |
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(a) |
The Seller shall notify the Purchasers in writing, no
more than five Business Days after each Delivery, by delivery of an
estimate to the Purchasers setting out the estimated number of ounces of
Payable Gold to be credited, allocated or physically delivered to the
designated metal accounts of each of the Purchasers in respect of such
Delivery and the anticipated Date of Delivery; |
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(b) |
On the Business Day following the Date of Delivery, the
Seller shall notify the Purchasers in writing
of: |
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(i) |
the number of ounces of Payable Gold credited, allocated
or physically delivered to the designated metal account of each of the
Purchasers; and |
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(ii) |
the Gold Purchase Price for such Payable Gold
. |
The Purchasers shall pay to the Seller, in accordance with each
Purchasers Applicable Percentage, a purchase price (the Gold Purchase
Price) for each ounce of Payable Gold sold and delivered by the Seller to
the Purchasers under this Agreement (the Purchased Ounces) equal to:
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(a) |
prior to the Deposit Reduction Date, (i) the Ongoing
Price on the Date of Delivery of such Purchased Ounces, as applicable,
payable in cash or by wire transfer of immediately available funds, plus
(ii) the Reduction Amount for such Purchased Ounces, payable only by
crediting the applicable Reduction Amount against the Deposit in order to
reduce the uncredited balance of the Deposit until the uncredited balance
of the Deposit has been credited and reduced to nil; and |
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(b) |
from and after the Deposit Reduction Date, the Ongoing
Price on the Date of Delivery of such Purchased Ounces payable in cash or
by wire transfer of immediately available funds. |
ARTICLE 3
DEPOSIT PAYMENT
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(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchasers of the Payable Gold, each Purchaser hereby agrees to pay the
Deposit in cash against, and as a prepayment of the purchase price for the
Payable Gold, subject to the conditions set out in Sections 3.2 and
3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Deposit except as expressly provided in this Agreement. The
Purchasers will not be entitled to demand repayment of the Deposit except
to the extent expressly set forth in this
Agreement. |
The Seller shall use, and Banro shall cause to be used, the
Deposit only to pay accrued and unpaid dividends as of the last payment date on
or prior to the date of receipt by the Seller of the Deposit on preferred shares
in the capital of Banro Group (Barbados) Limited and the Series A preferred
shares in the capital of Banro, to repay the notes issued pursuant to the
backstop facility dated August 18, 2014, bank indebtedness and accounts payable
and thereafter, general corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchasers |
Each Purchaser shall pay the Deposit to or to the order of the
Seller on the Closing Date, by wire transfer of immediately available funds to
the bank account or accounts designated by the Seller in writing, once each of
the following conditions has been satisfied in full:
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(a) |
Banro and the Seller shall have delivered to the Agent a
certificate of status, good standing or compliance (or equivalent) for
each PSA Entity and the Namoya Holdcos, issued by the relevant
Governmental Authority dated no earlier than five Business Days prior to
the Closing Date; |
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(b) |
Each PSA Entity shall have executed and delivered to the
Agent a certificate of a senior officer of each in form and substance
satisfactory to the Agent, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Agent may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the Agent a
favourable opinion, in form and substance satisfactory to the Agent,
acting reasonably, dated as of the Closing Date, from external legal
counsel to Banro, the Seller, the Namoya Holdcos and the PSA Entities as
to (i) the legal status of each, (ii) the corporate power and authority of
each to execute, deliver and perform this Agreement and the Security
Agreements to which it is a party, (iii) the execution and delivery of
this Agreement and the Security Agreements to which it is a party and the
enforceability of this Agreement and the Security Agreements against each,
(iv) that this Agreement and the Security Agreements, and the performance
by Banro and the Seller of the obligations hereunder or thereunder, do not
conflict with, violate, result in a breach of, or constitute a default or
an event creating rights of acceleration, termination, modification or
cancellation or a loss of rights under (with or without the giving notice
or lapse of time or both), the Note Indenture, the Collateral Trust
Agreement, or any of the Collateral Documents (as defined in the Note
Indenture) governed by Ontario law, (v) the outstanding share capital of
the Seller and the Namoya Holdcos, (vi) the creation of valid mortgages
and charge upon, and security interests in (including as to ranking of
such security interests), the PSA Collateral under the Security; and (vii)
the due registration or filing of the Security Agreements and, where
applicable, the perfection of the security interest of the Purchasers
(including as to ranking of such security interests), under such Security
Agreements and the results of the usual searches that would be conducted
in connection with the security that is the subject of such Security
Agreements; |
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the Agent a
legal opinion addressed to the Purchasers from external counsel, in form
and substance satisfactory to the Agent, with respect to title to the
Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
except for those that would not
reasonably be expected to have a Material Adverse Effect;
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(g) |
each PSA Entity shall have delivered to the Agent a
certificate of a senior officer confirming: |
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(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse Effect; |
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(h) |
Banro shall have amended the Note Indenture and the
related collateral trust agreement and security agreements as required by
the Agent to, among other things, characterize the Secured Amount as a
Parity Lien (as defined in the Note Indenture), require the trustee under
such collateral trust agreement and security agreements to transfer the
Project Collateral only in accordance with the terms of this Agreement and
to preserve the collateral trust following termination of the Note
Indenture. |
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(i) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchasers under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchasers, under such Security
Agreements; |
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(j) |
Banro and the Seller shall execute and deliver an
agreement with the Purchasers and Auramet International LLC (Auramet),
creating an account in favour of the Purchasers and setting out the terms
by which Auramet will assist the Purchasers in monetizing deliveries of
Payable Gold; |
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(k) |
in accordance with Applicable law, Banro shall cause each
of [names of individuals redacted] and each other equity holder of any Banro Group Entity that is an individual, but is not either
an employee of Banros counsel in Democratic Republic of Congo or an
employee of Banro to transfer for no or nominal consideration their
ownership of any such equity securities to one or more current employees
of Banros counsel in Democratic Republic of Congo or current employees of
Banro; |
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|
(l) |
the Seller paid all Reimbursable Expenses of the
Purchasers payable as at the Closing Date; and |
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(m) |
Banro and the Seller shall have delivered to the
Purchasers prior to the Closing Date a certificate of insurance coverage
or other evidence of acceptable insurance
coverage. |
3.4 |
Conditions Precedent in Favour of the
Seller |
On or before the Closing Date, each Purchaser will satisfy each
of the following conditions:
|
(a) |
each Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for
such Purchaser, issued by the relevant Governmental Authority; |
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(b) |
each Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of such Purchaser, in
form and substance satisfactory to Banro and the Seller, acting
reasonably, as to the constating documents of such Purchaser; the
resolutions of the directors of such Purchaser, authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby; the names, positions and true signatures of the
persons authorized to sign this Agreement on behalf of such Purchaser; and
such other matters pertaining to the transactions contemplated hereby as
Banro and the Seller may reasonably require; |
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(c) |
each Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to such
Purchaser as to (i) the legal status of such Purchaser, (ii) the corporate
power and authority of such Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
each Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by such Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice or lapse of time
or both would become a Purchaser Event of Default) has occurred and is
continuing. |
3.5 |
Satisfaction of Conditions
Precedent |
|
(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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|
(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchasers, and may be waived by the Agent in
its sole discretion in whole or in part in writing. Each of the conditions
set forth in Section 3.4 is for the exclusive benefit of Banro and the
Seller, and may be waived by Banro and the Seller in their sole discretion
in whole or in part in writing. |
ARTICLE 4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
|
(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchasers shall be made without any deduction, withholding, charge or
levy on account of any Taxes, all of which shall be for the sole account
of the Seller. All Taxes, if any, as are required to be so deducted,
withheld, charged or levied by the Seller or any of its Affiliates on any
such delivery or payment, shall be paid by the Seller delivering or paying
to the Purchasers or on their behalf, in addition to such delivery or
payment, such additional delivery or payment as is necessary to ensure
that the net amount received by the Purchasers (net of any such Taxes,
including any Taxes required to be deducted, withheld, charged or levied
on any such additional amount) equals the full amount that the Purchasers
would have received had no such deduction, withholding, charge or levy
been required. |
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(b) |
If a Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.2(a) hereof, such Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.2(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of such Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of such Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental
Authority. |
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In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Agent, on behalf of the Purchasers, on the one hand, and the
Seller on the other hand, agree that they shall negotiate in good faith with
each other to amend this Agreement so that the other Parties and their
Affiliates are no longer adversely affected by any such enactment, revision,
implementation, amendment or interpretation, as the case may be; provided that
any amendment to this Agreement shall not have any adverse effect on the Seller
and its Affiliates on the one hand, and the Purchasers and their Affiliates on
the other hand.
Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date, calculated and
compounded monthly in arrears. Any dollar amount or Refined Gold owing by a
Party to any other Party under this Agreement may be set off against any dollar
amount or Refined Gold owed to such Party by the other Party. Any amount of
Refined Gold set off and withheld against any non-payment by a Party shall be
valued at the Gold Price as of the first trading day that such amount of Refined
Gold became payable to such Party.
ARTICLE 5
TERM
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(a) |
The term of this Agreement shall commence on the date
hereof and, subject to Sections 5.1(b) and 5.1(c), shall continue until
the date that is 40 years after the date of this Agreement (the
Initial Term) and thereafter shall automatically be extended for
successive 15 year periods (each an Additional Term and, together
with the Initial Term, the Term), unless there has been no active
mining operations on the Properties during the last 15 years of the
Initial Term or throughout such Additional Term, as applicable, in which
case this Agreement shall terminate at the end of the Initial Term or such
Additional Term, as applicable. |
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(b) |
Notwithstanding Section 5.1(a), the Majority Purchasers
may terminate this Agreement as of the expiry of the Initial Term or
current Additional Term, as applicable, by written notice to Banro and the
Seller within 10 Business Days prior to the date on which the then
applicable Initial Term or Additional Term is to expire. |
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(c) |
Notwithstanding Section 5.1(a) or 5.1(b), the Agent may
terminate this Agreement on 10 Business Days written notice to Banro and
the Seller if the conditions set out in Section 3.3 are not satisfied
within one year after the date of this Agreement.
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- 27 -
If by the expiry of the Initial Term the Seller has not sold
and delivered to the Purchasers an amount of Refined Gold sufficient to reduce
the uncredited balance of the Deposit to nil as calculated in accordance with
Section 2.4(a), then the Seller shall provide a detailed calculation of the
uncredited balance of the Deposit and shall pay such uncredited balance of the
Deposit to the Purchasers, in accordance with each Purchasers Applicable
Percentage, within 30 days after the expiry of the Initial Term.
The parties hereto agree to consider, in good faith,
opportunities for the Seller to repurchase the Payable Gold from the Purchasers
although there is no obligation on the Purchasers to sell.
ARTICLE 6
REPORTING; BOOKS AND RECORDS
6.1 |
Notice of
Information |
Prior to delivery to the Purchasers of any of the information
set out in this Article 6 or otherwise in this Agreement, Banro and the Seller
shall inform the Agent if such information would be considered material
non-public information of Banro. In such event, the Agent shall have the option,
in its sole discretion on behalf of the Purchasers, to (a) refuse to accept such
information, or (b) require that such information be either (i) publicly
disclosed within two Business Days, or (ii) where such information constitutes
scientific and technical information representing a material change to the
Namoya Project delivered at a subsequent date within 45 days together with an
updated technical report in accordance with NI 43-101, and notice of such
refusal or delayed delivery will constitute a valid waiver, or partial waiver,
as the case may be, of the obligation to deliver such information.
The Seller shall deliver to the Purchasers a Monthly Report on
or before the fifteenth day after the end of each calendar month. The Seller
shall also provide to the Purchasers on request together with the Monthly
Reports, all other relevant Namoya Project documentation or information that may
have a material impact on the Namoya Project, including the Operating Plan.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchasers:
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(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis,
including: |
- 28 -
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(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 6.3(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
6.4 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 6.3(a),
6.3(b), 6.3(c) and 6.3(e) shall be provided by the Seller to the Purchasers. For
the purposes of this Section 6.4 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
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(a) |
The PSA Entities shall keep true, complete and accurate
books and records of all of the PSA Entities operations and activities
with respect to the Namoya Project, including the mining and production of
gold therefrom and the mining, treatment, processing, milling,
transportation and sale or refining of gold therefrom. The PSA Entities
shall permit the Agent and its authorized representatives and agents to
perform audits or other reviews and examinations of its books and records
and other information relevant to the production, delivery and
determination of Produced Gold and compliance with Article 6 from time to
time at reasonable times at the Agents sole risk and expense and upon
five Business Days notice, to confirm compliance with the terms of this
Agreement, provided that unless there is a continuing Banro Event of
Default, the Agent and its authorized representatives and agents will not
exercise such rights more often than one (1) time during any calendar
quarter. The Agent shall diligently complete any audit or other
examination permitted hereunder. |
- 29 -
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(b) |
Banro and the Seller shall prepare, or cause to be
prepared, technical reports on the Properties in compliance with NI 43-101
as and when required by Applicable Laws. If any technical report is
prepared on the Namoya Project, Banro and the Seller shall, subject to
compliance with Applicable Laws, provide to the Purchasers an advanced
draft copy of such technical report before it is filed on SEDAR, and in
any event not less than five (5) Business Days before it is so filed.
Banro and the Seller shall use commercially reasonable efforts to provide
to the Purchasers (i) qualified persons consents, qualified persons
certificates or other technical data, records or information pertaining to
the Properties in the possession or control of Banro and the Seller, and
(ii) copies of any technical report and cause the authors of such
technical report to have such technical report addressed directly to the
Purchasers if any of the Purchasers are required to file such technical
reports under NI 43-101. |
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(c) |
In addition, if during the Term Banro should cease to be
a reporting issuer under Applicable Law, Banro shall deliver to the
Purchasers audited financial statements of Banro and its subsidiaries on a
consolidated basis, such audit to be conducted by a nationally recognized
auditing firm. |
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchasers and their
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Namoya Project, in each case to monitor the mining and
processing operations on the Namoya Project. Provided there has been no
Banro Event of Default that is continuing, the Purchasers may avail
themselves of such right of access a maximum of twice per calendar year
(including the mill in respect thereof), and for this purpose, invitations
from Banro will not reduce the number of visits the Purchasers may
request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchasers shall have the
right to conduct an investors tour on the Namoya Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Namoya Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchasers and their invitees, and the Purchasers shall (a)
comply and request that their invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchasers or Banro and the Seller or
any of their respective invitees, employees, officers, directors, agents,
or representatives caused by the Purchasers exercise of its rights under
this Section. |
- 30 -
ARTICLE 7
COVENANTS
7.1 |
Conduct of
Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Project Assets on a commercial basis as though
the Seller has a full economic interest in all the gold produced from the
Properties. Banro and the Seller shall ensure that (i) all cut-off grade,
short term mine planning and production decisions concerning the Namoya
Project shall be based on gold prices typical of normal industry practice
and consistent with the practices of Banro and its Affiliates as at the
date of this Agreement in connection with such decisions, and (ii) all
longer term planning and resource and reserve calculations concerning the
Namoya Project shall use gold prices based on normal industry practice and
consistent with the historical practices of Banro and its Affiliates in
connection with such planning and calculations. |
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(b) |
Subject to Section 7.1(a), all decisions regarding the
Namoya Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Namoya Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Namoya Project, and (iv) except as
provided herein, the sale of gold and terms thereof, shall be made by the
Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 7.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Namoya Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
7.2 |
Preservation of Corporate
Existence |
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(a) |
Except as permitted in Section 7.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 8.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in
favour of the Agent and the Purchasers all the obligations of such Party
under this Agreement and any Security Agreement to which it is a party.
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- 31 -
7.3 |
Processing/Commingling |
Banro and the Seller shall not and shall cause each of the
Banro Group Entities to not process Other Minerals through the Processing
Plant in priority to, or commingle Other Minerals with, gold mined, produced,
extracted or otherwise recovered from the Properties, unless (i) the applicable
Banro Group Entity has adopted and employs reasonable practices and procedures
for weighing, determining moisture content, sampling and assaying and
determining recovery factors (a Commingling Plan), such Commingling
Plan to ensure the division of Other Minerals and Produced Gold for the purpose
of determining the quantum of Produced Gold; (ii) the Purchasers shall not be
disadvantaged as a result of the processing of Other Minerals in priority to, or
concurrently with, Produced Gold; (iii) the Agent has approved the Commingling
Plan, such approval not to be unreasonably withheld; (iv) the Banro Group Entity
keeps all books, records, data, information and samples required by the
Commingling Plan; and (v) the Banro Group Entity enters into a commingling
agreement with the Agent, for and on behalf of the Purchasers, that provides
that there is no negative impact on the gold production attributable to the
stream as a result of the commingling. The Seller agrees to revisit the
Commingling Plan if the Agent determines that circumstances have changed, in
order to ensure that the Commingling Plan continues to provide for the accurate
measurement of gold produced from the Properties.
7.4 |
Processing
Agreements |
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(a) |
From and after the date hereof, the Seller (together with
the PSA Entities from which Produced Gold is sold) shall be a party to any
Processing Agreements and the PSA Entities party thereto shall be
responsible for delivering all gold to each Processor, in such quantity,
description and amounts and at such times and places as required under and
in accordance with each Processing Agreement. |
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(b) |
The PSA Entities shall cause all terms and conditions of
any Processing Agreements or other agreements for the sale of Produced
Gold entered into by a PSA Entity to be on commercially reasonable arms
length terms and conditions. The Seller shall provide the Agent with a
final signed copy of any such agreements within five Business Days of the
execution thereof. |
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(c) |
Banro shall take commercially reasonable steps to
enforce, and shall cause any Affiliate, to take reasonable steps to
enforce its rights and remedies under each such Processing Agreement with
respect to any breaches of the terms thereof relating to the timing and
amount of Gold Payments to be made thereunder. Banro shall notify the
Purchasers in writing when any dispute arising out of or in connection
with any such Processing Agreement is commenced in respect of Refined Gold
and shall provide the Agent with timely updates of the status of any such
dispute and the final decision and award of the court or arbitration panel
with respect to such dispute, as the case may
be. |
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(d) |
Banro shall ensure that the final sale and delivery of
doré shall only be made to a Processor pursuant to a Processing Agreement.
For greater certainty, nothing in this Section 7.4(d) shall prohibit the
processing of Produced Gold by a PSA Entity, provided that the doré is
eventually sold to a Processor. |
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(a) |
Banro and the Seller shall maintain with reputable
insurance companies insurance with respect to the Project Assets and the
operations conducted on and in respect of the Namoya Project against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar operations and, until the Deposit
Reduction Date, shall have the Agent, on behalf of the Purchasers added as
an additional insured and loss payee in the insurance policies. |
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(b) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(c) |
When a Banro Group Entity receives payment under any
insurance policy in respect of a shipment of Produced Gold that is lost or
damaged after leaving the Namoya Project and before the risk of loss or
damage is transferred to the Processor, the Seller shall use 10% of the
amount of the Net Proceeds of any insurance payment received by the Banro
Group Entity in respect thereof to acquire Refined Gold in accordance with
Section 2.2(d) and shall sell and deliver to the Purchasers, in accordance
with each Purchasers Applicable Percentage, (without duplication to the
extent previously sold and delivered to the Purchasers by the Seller) such
amount of Refined Gold at the applicable Gold Purchase Price. |
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(d) |
Banro and the Seller shall insure the Project in such
amounts and with such coverage as is customary in the mining industry for
the construction, development and operation of the Project, including the
Processing Plant. Banro and the Seller covenant and agree that in the
event of any loss or damage that is insured prior to the date on which the
uncredited balance of the Deposit has been reduced to nil, the Seller
shall either (i) use all Net Proceeds of any insurance payment received by
the Banro Group Entity to rebuild or repair all damaged facilities forming
part of the Namoya Project, or (ii) use each Purchasers share of the Net
Proceeds of such insurance payment received by any Banro Group Entity
within 30 days after receipt of such proceeds by such Banro Group Entity,
to acquire Refined Gold in accordance with Section 2.2(d) and shall
deliver to the Purchasers, in accordance with each Purchasers Applicable
Percentage, such amount of Refined Gold, each Purchasers share being
calculated as the ratio of the fair value of each Purchasers interest in
the Namoya Project (taking into account each Purchasers Applicable
Percentage) as represented by its rights under this Agreement to the value
of Banros interests in the Namoya Project when measured by the same
criterion which establishes the value of such Purchasers interest. A
failure to agree on the foregoing proportion is arbitrable under Section
14.1. |
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(e) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Agent at reasonable intervals
no more than once per year, furnish to the Agent a certificate setting
forth the nature and extent of all insurance maintained by or on behalf of
the PSA Entities in accordance with Section 7.5(a). Banro and the Seller
shall, upon the request of the Agent, provide the Purchasers with copies
of all insurance policies as in effect from time to time relating to the
Project Assets. |
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(f) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
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(a) |
Each Party (a Receiving Party) agrees that it
shall maintain as confidential and shall not disclose, and shall cause its
Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 15, 2014
(Confidential Information), provided that a Receiving Party may
disclose Confidential Information in the following
circumstances: |
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(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 7.6(c) and 14.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 14.1; |
- 34 -
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
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(v) |
with the consent of the disclosing Party; and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
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(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 7.6(a)(i) are made aware of this Section 7.6 and
comply with the provisions of this Section 7.6. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Agent will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 7.6(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
7.7 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchasers
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 7.7, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
- 35 -
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Namoya Project.
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Namoya
Project.
[Redacted]
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Agent and the
Purchasers in accordance with the terms of this Agreement. The Parties
acknowledge and agree that any breach by Banro of its obligations under this
Section would cause the Agent and the Purchasers irreparable harm for which
monetary damages alone would not be a sufficient remedy and that therefore the
Agent and the Purchasers may seek and obtain orders of specific performance,
injunctions and other equitable remedies and remedies available under civil laws
against Banro with respect thereto as a court of competent jurisdiction or an
arbitrator under Section 14.1 may see fit to grant with respect to any such
breach and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies.
ARTICLE 8
BANRO TRANSFERS AND
CONTROL
8.1 |
Owner of Project
Assets |
Subject to Section 8.3 and except as provided in Section 9.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 8.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 8.1 shall not restrict any leased personal property
(provided that the lessee is the Seller) or personal property that is equipment
that is obsolete or no longer in use under the Operating Plan.
- 36 -
8.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 8.3, Banro and the Seller shall
not, and shall ensure that the Namoya Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 8.3(c), holding Project Assets, does not during the Delivery Period:
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(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 8.3(c), holding Project
Assets. |
8.3 |
Permitted Transfers and Changes of
Control |
Section 8.2 shall not prohibit a Transfer or Change of Control,
if:
Transfer of the Project Asset
|
(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA
Entity: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Agent and the Purchasers all of
the Sellers and, if applicable, the other Banro Group Entities
obligations under this Agreement pursuant to an agreement in form and
substance satisfactory to the Agent, acting reasonably; |
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
9.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 9.2 |
- 37 -
|
(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Agent confirms in writing that it does not reasonably
expect such Transfer or Change of Control to have a Material Adverse
Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 8.3(a)(vii)); |
Change of Control
|
(b) |
in the case of a Change of Control of Banro, the Seller,
the Namoya Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
8.3(c): |
|
(i) |
the Seller or Banro shall have provided the Purchasers
with at least 30 days prior written notice of the proposed Change of
Control; |
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|
(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
|
(A) |
assumes in favour of the Agent and the Purchasers all of
the obligations of Banro under this Agreement, such assumption to occur by
an agreement in form and substance satisfactory to the Agent, acting
reasonably; and |
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(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
|
(iii) |
in respect of such Change of
Control: |
|
(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 9.2; |
|
(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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|
(v) |
the Agent confirms in writing that it does not reasonably
expect such Transfer or Change of Control to have a Material Adverse
Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 8.3(b)(v)); |
- 38 -
Inter-corporate Transfer
|
(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of
Banro: |
|
(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
|
(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
8.3(a)(i) through 8.3(a)(vii) are complied with mutatis mutandis;
or |
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|
(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
|
(1) |
the provisions of Sections 8.3(a)(i), 8.3(a)(iv),
8.3(a)(v) and 8.3(a)(vi) are complied with mutatis mutandis; and |
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|
(2) |
the Seller provides a confirmation in favour of the Agent
and the Purchasers that its obligations under this Agreement shall
continue in full force and effect despite any such
Transfer; |
Joint Ventures and Minority Dispositions
|
(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
|
(i) |
the Seller or Banro shall have provided the Purchasers
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
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|
(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
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|
(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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|
(iv) |
such other person agrees in a document, or documents,
acceptable to the Agent, acting reasonably, with the PSA Entity, the Agent
and the Purchasers and any other such person to acknowledge the
obligations of the Seller under this Agreement and the Security
Agreements, including the granting to the Purchasers of all the security
interests contemplated thereunder; provided that, if such other person
acquires any legal right, title or interest in and to any of the Project
Assets (including any registered or recorded title in and to the
Properties), such person assumes on a joint and several basis with the
Seller all of the obligations and duties under this Agreement and grants
the same charges and security interests in, to and over the Project Assets
to which it acquires any legal right, title or interest, and enters into
the same Security Agreements entered into by the Seller and its
subsidiaries pursuant to Section 9.2; |
- 39 -
|
(v) |
all filings have been made and all other actions have
been taken that are required in order for the Agent, for and on behalf of
the Purchasers to continue at all times following such transaction to have
the valid and perfected security interest contemplated by Section
9.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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|
(viii) |
the Agent confirms in writing that it does not reasonably
expect such minority interest disposition, joint venture or other similar
commercial arrangement to have a Material Adverse Effect;
or |
With Consent
|
(e) |
the Agent provides its prior written
consent; |
provided that, for greater certainty, if the Seller intends to
abandon, surrender, relinquish or let lapse any of the Properties (the
Abandonment Property), Banro shall (i) have determined, acting
commercially reasonably, that it is not economic to mine gold from the
Properties that it proposes to abandon, surrender, relinquish or let lapse, and
(ii) first give notice of such intention to the Purchasers at least 90 days in
advance of the proposed date of abandonment. If, not later than 10 days before
the proposed date of abandonment, Banro receives from the Agent written notice
that the Agent desires the Seller to convey the Abandonment Property to the
Purchasers or an assignee, Banro shall, without additional consideration, convey
the Abandonment Property in good standing, without warranty, to the Purchasers
and shall use commercially reasonable efforts to assist the Agent in acquiring
any necessary or appropriate consents or approvals to such Transfer and shall
thereafter have no further obligation to maintain the title to the Abandonment
Property and the terms of this Agreement shall cease to apply to such
Abandonment Property. If the Agent does not give such notice to Banro within the
prescribed period of time, the Seller may abandon the Abandonment Property and
shall thereafter have no further obligation to maintain the title to the
Abandonment Property; provided, however, that if the Seller or any Affiliate
of Banro reacquires a direct or indirect interest in any of the ground
covered by the Abandonment Property at any time within seven (7) years following
abandonment, the production of gold from such ground shall be subject to this
Agreement. The Seller shall give written notice to the Purchasers within ten
(10) days of any such reacquisition.
- 40 -
ARTICLE 9
SECURITY
9.1 |
Financings and
Encumbrances |
|
(a) |
During the Term, except for Permitted Indebtedness, no
PSA Entity shall incur or enter into any Indebtedness. |
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(b) |
Except as provided in this Article 9, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
|
(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Agent, for and on behalf of the Purchasers, in form and
substance satisfactory to the Agent, acting reasonably, guaranteeing the
performance, when due, of all PSA Obligations; and (ii) grant, as security
for the payment and performance, when due, of all PSA Obligations, to and
in favour of the Agent, for and on behalf of the Purchasers first ranking
charges and security interests (subject only to the Prior Ranking
Permitted Encumbrances) in, to and over (A) the Payable Gold, including
all proceedings thereof, and (B) the Project Collateral, the charged
amount (the Secured Amount) of such charges and security
interests with respect to the Project Collateral being initially, the
Deposit, such amount to reduce on each Delivery Date by an amount equal to
60% of the amount that is equal to the difference between the Gold Price
on the Business Day following the Date of Delivery and the Ongoing Price,
multiplied by the number of ounces of Payable Gold delivered on the Date
of Delivery, pursuant to one or more agreements (the Seller Security
Agreements) executed by each to and in favour of the Agent, for and
on behalf of the Purchasers, in form and substance satisfactory to the
Agent, acting reasonably. |
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(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Agent, for and on behalf of the Purchasers, in
form and substance satisfactory to the Purchaser, acting reasonably,
guaranteeing the payment and performance, when due, of all PSA
Obligations; and (ii) grant, as security for its obligations under such
guarantee to and in favour of the Agent, for and on behalf of the
Purchasers, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral), all
pursuant to one or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Agent, acting
reasonably. |
- 41 -
|
(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and
Postponement of Claims), in favour of and in form and substance
satisfactory to the Agent, acting reasonably, that subordinates and
postpones the enforcement of any debts, liabilities and obligations of any
Banro Group Entity and the realization of any charges or security
interests to secure such claims to the obligations under the Security
Agreements and, from and after a Banro Event of Default, or any event or
circumstance which, with notice, the passage of time or both, would
constitute a Banro Event of Default, and until such Banro Event of Default
is remedied, subordinates and postpones the payment of all such debt,
liabilities and obligations (other than Permitted Distributions) to the
payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
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(d) |
If so requested in writing by the Agent, the Banro Group
Entities shall not, for so long as a Banro Event of Default, or any event
or circumstance which, with notice, the passage of time or both, would
constitute a Banro Event of Default, continues, make any Distribution
other than a Permitted Distribution. |
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(e) |
At the Agents request, Banro shall, and shall cause the
Seller (and any other Banro Group Entity from which Produced Gold is sold)
to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times, the Seller shall not, and Banro shall ensure that the Seller
does not, make any Distributions other than a Permitted Distribution from
such account if a Banro Event of Default, or event which with the giving
of notice or the passage of time or both would constitute a Banro Event of
Default, has occurred and is continuing, or if a Banro Event of Default
would occur or arise immediately after, or as a result of, making a
Distribution. |
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(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Agent may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Agent has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Agent continues to secure the PSA Obligations and with no change in the
priority thereof. The Seller shall pay all costs and expenses associated
with the foregoing including in connection with the preparation and
registration of all documentation in connection therewith that is required
by the Agent. |
- 42 -
9.3 |
Intercreditor
Agreement |
If, after the Deposit Reduction Date, any PSA Entity wishes to
enter into any Secured Financing or grant an Encumbrance over any PSA Collateral
to any Lenders as security for the payment or performance of any Secured
Financing, and it is the intention of such PSA Entity that such Encumbrance
modify the security interests in favour of the Agent set out in Section 9.2,
then the Agent, for and on behalf of the Purchasers, agrees to enter into an
intercreditor agreement (in each such case, an Intercreditor Agreement)
with the Lenders and the applicable PSA Entity (such agreement to be negotiated
in good faith), on the principal terms and conditions set out in Schedule C. The
Parties agree that if an Intercreditor Agreement is not negotiated and executed
within 60 days of the Purchasers receiving notice from a PSA Entity that it
intends to enter into a Secured Financing or grant on Encumbrance, then either
Party may seek to have any dispute related thereto determined by arbitration as
set out in Section 14.1.
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
9.4 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Agent and the Purchasers
shall have substantially similar access rights and obligations as provided in
Section 6.6.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Agent and the
Purchasers are entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule D to the Agent and the
Purchasers on and as of the date of this Agreement on a joint and several basis.
The representations and warranties set forth in Schedule D shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
- 43 -
10.2 |
Representations and Warranties of the
Purchaser |
Each Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, on a several, and not joint or
joint and several basis, hereby makes the representations and warranties set
forth in Schedule E to Banro and the Seller on and as of the date of this
Agreement. The representations and warranties set forth in Schedule E shall be
deemed to be repeated by the Purchasers as of the date of the Closing Date.
10.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule D and
Schedule E shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
ARTICLE 11
BANRO EVENTS OF DEFAULT
11.1 |
Banro Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of Default):
|
(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchasers on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Agent
notifying the Seller of such default; |
|
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|
(b) |
other than as provided in Section 11.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Agent to the PSA
Entities of written notice of such breach or default, except in respect of
the covenant set out in Section 7.10, which shall constitute a Banro Event
of Default immediately on notice thereof, or such longer period of time as
the Agent may determine in its sole discretion; |
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|
(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Agent to Banro and the Seller of written notice of such
inaccuracy, or such longer period of time as the Agent may determine in
its sole discretion; |
- 44 -
|
(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
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|
(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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|
(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Agent notifying the PSA Entities of such
default. |
|
(a) |
If a Banro Event of Default occurs and is continuing, the
Agent shall have the right, upon written notice to Banro and the Seller at
its option and in addition to and not in substitution for any other
remedies available at law or equity, to take any or all of the following
actions: |
|
(i) |
demand all amounts and deliveries owing by the Seller to
the Purchasers; |
|
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|
(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 11.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including the greater of (A) the uncredited
amount of the Deposit, and (B) a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the
Purchasers hereunder, but for the occurrence of such Banro Event of
Default. The net present value calculation shall be based on an assumption
that the Project Assets are owned and operated by a person that has the
financial, operational and technical capability of a prudent owner and
operator, and shall be based on such other reasonable assumptions and
forecasts as may be necessary to make such calculation, including with
respect to the applicable discount rates to use, the applicable gold
prices to use, and the reasonably expected Payable Gold that would have
been sold and delivered to the Purchasers hereunder but for the occurrence
of such Banro Event of Default (based on, among other factors, the
reserves and resources, inferred resources and potential exploration
success, the expected throughput through the Processing Plant, and
expected gold recoveries). Upon demand from the Agent, the Seller shall
promptly pay all such amounts to the Purchasers; and
|
- 45 -
|
(iii) |
enforce the PSA Security. |
|
(b) |
The Parties hereby acknowledge and agree that: (i) the
Agent and the Purchasers will be damaged by a Banro Event of Default; (ii)
it would be impracticable or extremely difficult to fix the actual damages
resulting from a Banro Event of Default; (iii) any sums payable in
accordance with Section 11.2(a) with respect to a Banro Event of Default
are in the nature of liquidated damages, not a penalty, and are fair and
reasonable; and (iv) the amount payable in accordance with Section 11.2(a)
or with respect to a Banro Event of Default represents a reasonable
estimate of fair compensation for the losses that may reasonably be
anticipated from such Banro Event of Default in full and final
satisfaction of all amounts owed in respect of such Banro Event of
Default. |
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(c) |
For greater certainty, if the Agent, for and on behalf of
the Purchasers does not exercise its right under Section 11.2(a)(ii), the
obligations of Banro and the Seller or any successors shall continue in
full force and effect. |
ARTICLE 12
PURCHASER EVENTS OF DEFAULT
12.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of Default):
|
(a) |
a Purchaser fails to pay a portion of the Deposit in
accordance with Article 3 within (3) three Business Days of receipt of
notice from the Seller notifying such Purchaser of such default (a
Deposit Default); |
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|
(b) |
a Purchaser fails to pay for Payable Gold delivered to
the Purchaser in accordance with Section 2.4 within (3) three Business
Days of receipt of notice from the Seller notifying such Purchaser of such
default (a Purchaser Payment Default); |
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|
(c) |
a Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect (other than a breach or default of the covenants or obligations
referenced in Sections 12.1(a) or (b) above), and such breach or default
is not remedied within a period of 30 days following delivery by the
Seller to such Purchaser of written notice of such breach or default, or
such longer period of time as the Seller may determine in its sole
discretion; or |
- 46 -
|
(d) |
any of the representations or warranties given by a
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to such Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
|
(a) |
If there should occur a Deposit Default, the non-
defaulting Purchasers may deliver the Deposit amount that is the subject
of the Deposit Default, and to the extent they choose to do so, such
funding Purchasers Applicable Percentage will be adjusted accordingly. If
all of the conditions precedents set out in Section 3.3 have been
satisfied and a Deposit Default in respect of all of the Deposit occurs
and is continuing and the Purchasers fail to cure the Deposit Default in
full within 90 days of written notice from the Seller of such default,
then the Seller may elect to at any time thereafter so long as the
Purchasers have not already cured the Deposit Default, to terminate the
Agreement. |
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(b) |
In addition to the PSA Entities rights and remedies
available at law or in equity (other than any right at law or in equity to
terminate this Agreement), if a Purchaser Payment Default occurs and is
continuing, the Seller shall have the right, upon written notice to the
defaulting Purchaser, at its option, to suspend obligations under Section
2.2 solely in respect of the defaulting Purchaser. If the Deposit is
reduced to nil and following the Deposit Reduction Date, the defaulting
Purchaser fails to cure the Purchaser Payment Default in full within 30
days, then the Seller may elect at any time thereafter so long as such
defaulting Purchaser has not already cured the Purchaser Payment Default,
to terminate the Agreement solely with respect to such defaulting
Purchaser and thereupon all of the Sellers obligations hereunder with
respect to such defaulting Purchaser shall thereafter be terminated
without prejudice to any other right or remedy it may have against such
defaulting Purchaser. For greater certainty, the PSA Obligations shall
continue unaffected in respect of the non-defaulting Purchasers. |
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(c) |
If a Purchaser Event of Default under Sections12.1(c) or
12.1(d) has occurred and is continuing, then the PSA Entities shall have
no right to terminate this Agreement, but shall be entitled to all other
remedies available to it at law or in equity against the
Purchaser. |
ARTICLE 13
THE AGENT
The Parties agree that the rights and
obligations of the Agent and of the Purchasers with respect to the Agent shall
be as set out in Schedule G.
- 47 -
ARTICLE 14
GENERAL
14.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officers of each of the disputing parties for prompt resolution.
Any such dispute, controversy or claim which cannot be resolved by the chief
executive officers within 15 days after it has been so referred to them
hereunder, including the determination of the scope or applicability of this
Agreement to arbitrate, shall be settled by binding arbitration in accordance
with the rules for arbitration set out in Schedule F. The determination of such
arbitrator shall be final and binding upon the Parties and there shall be no
appeals from any determination of the arbitrator. Judgment on the award may be
entered in any court having jurisdiction. This Section 14.1 shall not preclude
the Parties from seeking provisional remedies in aid of arbitration from a court
of competent jurisdiction. The Parties covenant and agree that they shall
conduct all aspects of such arbitration having regard at all times to expediting
the final resolution of such arbitration.
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
14.3 |
Reimbursement of
Expenses |
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(a) |
The Seller and Banro shall pay to the Agent and the
Purchasers all reasonable costs and expenses (including all reasonable
legal fees and disbursements of counsel) incurred by the Agent and the
Purchasers in connection with this Agreement and the other related
transactions, including: |
|
(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Agent and the Purchasers and any on- site inspections by the Agent and
the Purchasers or its representatives; |
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(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated
thereunder; |
- 48 -
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(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Agent and the Purchasers at law
or in equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
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(viii) |
the incorporation and organization of the Agent, as well
as the initial issuances of notes or other investment instruments required
to capitalize the Agent with the Deposit; and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Agent, including fees and expenses related to fiscal
and collateral agents, valuation, tax reporting and
audit, |
(collectively, the Reimbursable
Expenses).
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(b) |
The obligations of the Seller under this Section 14.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
14.4 |
Termination;
Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 7.6, 7.10, 11.2, 12.2,
14.1, 14.7, 14.9, Schedule F and Schedule G and such other provisions of this
Agreement as are required to give effect thereto.
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Agent or any Purchaser on the one hand and any Banro Group Entity on the
other hand.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Agent or any Purchaser on the one hand and
any Banro Group Entity on the other hand.
- 49 -
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
|
(a) |
If to either Banro or the Seller,
to: |
Banro Corporation
1 First Canadian
Place
Suite 7070, 100 King Street West
Toronto, Ontario, M5X 1E3, Canada
|
Attention: |
Chief Financial Officer |
|
Telecopier No.: |
416-366-7722 |
with a copy to:
Norton Rose Fulbright Canada LLP
Royal Bank Plaza, South Tower, Suite 3800
200 Bay Street
Toronto,
Ontario, M5J 2Z4, Canada
|
Attention: |
Mike Moher |
|
Telecopier No.: |
416- 216-3930 |
|
(b) |
If to the Agent or any Purchaser,
to: |
[Redacted]
with a copy to:
Goodmans LLP
333 Bay Street, Suite
3400
Toronto, Ontario M5H 2S7
- 50 -
|
Attention: |
Kari MacKay |
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Telecopier No.: |
416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
- 51 -
14.13 |
Debt Sharing
Confirmations |
|
(a) |
The Purchasers hereby agree, for the benefit of all
holders of each other existing and future Series of Priority Lien Debt and
each existing and future Priority Debt Representative, that all Priority
Lien Obligations will be and are secured equally and ratably by all Liens
(as defined in the Collateral Trust Agreement) at any time granted by
Banro or any Obligor (as defined in the Collateral Trust Agreement) to
secure the obligations in respect of the Priority Notes, whether or not
upon property otherwise constituting Collateral (as defined in the
Collateral Trust Agreement), that all such Liens will be enforceable by
the Collateral Agent for the benefit of all holders of Priority Lien
Obligations equally and ratably (except that the Priority Stream
Obligations (as defined in the Collateral Trust Agreement) shall be paid
in priority to the other Priority Lien Obligations in accordance with
Section 3.4(a) of the Collateral Trust Agreement), and that the Purchasers
are bound by the provisions in the Collateral Trust Agreement relating to
the order of application of proceeds from enforcement of such Liens, and
consent to and direct the Collateral Agent to perform its obligations
under the Collateral Trust Agreement. |
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(b) |
The Purchasers hereby agree, for the benefit of all
holders of each other existing and future Series of Parity Lien Debt and
each existing and future Parity Debt Representative, that all Parity Lien
Obligations will be and are secured equally and ratably by all Liens at
any time granted by Banro or any Obligor to secure the obligations in
respect of the Initial Parity Notes, whether or not upon property
otherwise constituting Collateral, that all such Liens will be enforceable
by the Collateral Agent for the benefit of all holders of Parity Lien
Obligations equally and ratably, and that the Purchasers are bound by the
provisions in the Collateral Trust Agreement relating to the order of
application of proceeds from enforcement of such Liens, and consent to and
direct the Collateral Agent to perform its obligations under the
Collateral Trust Agreement. |
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it (except that the Agent may provide a waiver by and
on behalf of the Purchasers), and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
- 52 -
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
Each Purchaser shall be entitled at any time and from
time to time to Transfer any of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 8.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Agent . In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
Each of the Parties agrees that, upon execution and delivery of
a joinder agreement in a form satisfactory to the Parties, acting reasonably,
another person shall, without any further action on the part of Parties other
than such person, automatically be added as a Party to this Agreement in the
manner contemplated by such joinder agreement.
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
NAMOYA GSA HOLDINGS |
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Per: |
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Name: |
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Title: |
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BANRO CORPORATION |
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Per: |
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Name: Richard Brissenden |
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Title: Chairman of the Board |
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NAMOYA MINING S.A. |
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Per: |
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Name: Desire Sangara |
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Title: Chairman of the Board
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Any other Purchaser when joined hereto
in accordance with the terms hereof.
Signature Page to Namoya Gold Purchase and Sale Agreement
SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Namoya GSA
Holdings, Banro Corporation and Namoya Mining S.A.
Dated as of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY AGREEMENTS
This is Schedule B to the Gold Purchase and Sale Agreement
between Namoya GSA
Holdings, Banro Corporation and Namoya Mining S.A.
Dated as of February 27, 2015
-
Joinder and sharing confirmations as a Priority Lien and recognizing
priority of Payable Gold obligations
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Joinder and sharing confirmation as a Parity Lien
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Guarantees contemplated by Section 9.2(b)
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Assignment, Subordination and Postponement of Claims contemplated by
Section 9.2(c)
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Pledge of accounts with Auramet International LLC, if any
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Pledge of accounts with any Processor
SCHEDULE C
INTERCREDITOR PRINCIPLES
This is Schedule C to the Gold Purchase and Sale Agreement
between Namoya GSA
Holdings, Banro Corporation and Namoya Mining S.A.
Dated as of February 27, 2015
[Redacted]
SCHEDULE D
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Namoya GSA
Holdings, Banro Corporation and Namoya Mining S.A.
dated as of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchasers as
follows:
|
(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non- assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Namoya (Barbados) Limited; |
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(f) |
the authorized share capital of Namoya (Barbados) Limited
consists of an unlimited number of common shares and 20,000 preferred
shares, of which, as of the date hereof, (i) only 1,200,000 common shares
are issued and outstanding as fully paid and non-assessable shares in the
capital of Namoya (Barbados) Limited and are legally and beneficially
owned as to 100% by Banro Group (Barbados) Limited, and (ii) only 20,000
preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Namoya (Barbados) Limited and are
legally and beneficially owned as to 100% by investment funds managed by
Gramercy Funds Management LLC; |
- 2 -
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right, title or interest
in or to, the Namoya Project, the Properties, the Project Assets or the
gold produced from the Properties; |
- 3 -
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Namoya Project, the Properties and all
other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Namoya Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Namoya Project, the Properties and all
other properties of the Banro Group Entities, other than those that are
not necessary on the date this representation and warranty is given and
are expected to be obtained in the ordinary course of business by the time
they are necessary, where the failure to have or obtain such Approvals
would not reasonably be expected to have a Material Adverse Effect, and
there are no facts or circumstances that might reasonably be expected to
adversely affect the issuance or obtaining of any such material
Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Namoya Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Namoya Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
- 4 -
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Namoya
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Namoya Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Namoya Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the Bribery Act
(United Kingdom)). Without limiting the generality of the foregoing,
each Banro Group Entity is in material compliance with all applicable
Environmental Laws, and there are no actions, suits, claims, notices of
violation, hearings, investigations or proceedings pending or, to the best
of its knowledge, threatened against or affecting any Banro Group Entity
with respect to the ownership, use, maintenance and operation of any of
the Namoya Project, the Properties and the Project Assets relating to any
applicable Environmental Laws, where any adverse determination with
respect thereto or liability imposed therein could reasonably be expected
to result in a Material Adverse Effect and such adverse determination is
reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Namoya Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Namoya Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with the Toronto
Stock Exchange (all such documents filed prior to the date of execution of
this Agreement, the Public Disclosure Documents) since January 1,
2013. As of the effective date of such Public Disclosure Documents, to its
knowledge, none of the Public Disclosure Documents contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, it being
acknowledged that if there is any inconsistency between two or more
documents comprising the Public Disclosure Documents regard shall be had
to the last filed document. All of the Public Disclosure Documents, as of
their respective effective dates (and as of the effective dates of any
amendments thereto), complied as to both form and content in all material
respects with the requirements of applicable Securities Laws or were
amended on a timely basis to correct deficiencies identified by securities
commissions or similar securities regulatory authorities. Banro has not
filed any confidential material change report with any securities
regulatory authority that at the date of execution of this Agreement
remains confidential. There is no material adverse change concerning Banro
which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this Agreement;
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Namoya Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements
referred to in the first sentence of paragraph (y) above or in the notes
thereto, other than (i) liabilities or obligations arising in the ordinary
course of business since September 30, 2014 or publicly announced by
Banro, or obligations to Auramet International LLC pursuant to the gold
sale arrangements with Auramet International LLC;
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock- out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America (Foreign
Company Plan) that is intended to qualify for special tax treatment
meets all of the requirements for such treatment and has obtained all
necessary approvals of all relevant Governmental Authorities. No Foreign
Company Plan has any unfunded liabilities, determined in accordance with
generally accepted accounting principles, that have not been fully accrued
on Banros financial statements or that will not be fully offset by
insurance. All Foreign Company Plans are registered where required by, and
are in good standing under, all Applicable Laws. For purposes of this
paragraph, Employee Benefit Plan means any employee benefit plan,
program, policy or arrangement sponsored, maintained or contributed to by
a Banro Group Entity or any of their respective Affiliates or with respect
to which the Seller, any Banro Group Entity or any of their respective
Affiliates has any liability or obligation; |
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Namoya Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE E
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule E to the Gold Purchase and Sale Agreement
between Namoya GSA
Holdings, Banro Corporation and Namoya Mining S.A.
dated as of February 27, 2015
Each Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is a company duly incorporated and validly existing
under the laws of its jurisdiction and is up to date in respect of all
filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE F
DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Namoya GSA
Holdings, Banro Corporation and Namoya Mining S.A.
dated as of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this Agreement. A
reference to Party means the Agent on behalf of the Purchasers on the one hand
and any PSA Entity on the other hand.
1. |
Initiation of Arbitration
Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the other Party
(the Respondent) a statement of claim setting out in sufficient detail
the facts and any contentions of law on which it relies, and the relief that it
claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of
reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have
not previously been submitted by any Party, and (where practicable) by any
relevant samples. |
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration
hearing. |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
5. |
Jurisdiction and Powers of the
Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
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(i) |
determine any question of law arising in the
arbitration; |
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(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations or contractual
rights as to disclosure on a confidential basis to which it may be
entitled. |
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
SCHEDULE G
AGENT
This is Schedule G to the Gold Purchase and Sale Agreement
between Namoya GSA
Holdings, Banro Corporation and Namoya Mining
S.A., dated as of February 27, 2015
[Redacted]
SCHEDULE B
AMENDMENTS / SUPPLEMENTAL INDENTURE
THIS FIRST AMENDING AGREEMENT TO
INDENTURE made as of the day of , 2015.
BETWEEN:
BANRO CORPORATION, a
corporation continued under the laws of the Canada, having an office in Toronto,
Ontario
(the Company)
OF THE FIRST PART
- and -
BANRO CONGO MINING S.A., KAMITUGA
MINING S.A., LUGUSHWA MINING S.A., NAMOYA MINING S.A., and TWANGIZA
MINING S.A.
(collectively, the DRC
Guarantors)
OF THE SECOND PART
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BANRO GROUP (BARBADOS) LIMITED,
BANRO CONGO (BARBADOS) LIMITED, KAMITUGA (BARBADOS) LIMITED, LUGUSHWA (BARBADOS)
LIMITED, NAMOYA (BARBADOS) LIMITED and TWANGIZA (BARBADOS)
LIMITED
(collectively, the Barbados
Guarantors)
OF THE THIRD PART
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EQUITY FINANCIAL TRUST
COMPANY, a trust company continued under the laws of Canada and registered
to carry business in the Province of Ontario
(the Trustee)
OF THE FOURTH PART
WHEREAS:
A. |
Each of the Company, the DRC Guarantors and the Trustee
has heretofore executed and delivered to the Trustee an indenture dated as
of March 2, 2012 (as amended, restated and supplemented from time to time,
the "Note Indenture") providing for the issuance of an unlimited
aggregate principal amount of 10% Senior Secured Notes due 2017 (the
"Notes"); |
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B. |
By Supplemental Note Indenture dated as of April 23,
2013, each Barbados Guarantor be a Guarantor under the Note Indenture and
to be bound by the terms of the Note Indenture applicable to Guarantors,
including Article 10 thereof; |
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C. |
Section 4.09 of the Note Indenture provides for certain
negative covenants relating to limitations on
Indebtedness; |
D. |
T he Company, the Guarantors and the Trustee wish to
amend the Note Indenture to, other things, revise the scope of such
negative covenants; and |
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E. |
Section 9.02(a) of the Note Indenture provides that the
Company, the Guarantors and the Trustee may amend or supplement the
Indenture Documents with the consent of the Holders of a majority in
principal amount of the Notes then outstanding voting as a single class,
which consent has been obtained; |
NOW THEREFORE, this First Amending Agreement witnesseth
and it is hereby agreed and declared as follows:
Except as otherwise provided for
herein, all capitalized terms and expressions used in this Amending Agreement
shall have the meanings ascribed to them in the Note Indenture.
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a. |
The following are added as additional definitions in
Section 1.01 of the Note Indenture: |
'Deposit Balance Amount means the
principal amount of any Indebtedness, which amount shall not exceed $60,000,000
less the Deposit (as defined in the Namoya Streaming Agreement) and which amount
shall be outstanding for a period not to exceed three years from the date
hereof;
Forward Sale/Streaming Agreements
means the Namoya Streaming Agreement, the Twangiza Forward Agreement - 1 and the
Twangiza Forward Agreement - 2;
Forward Sale/Streaming Facilities
means the transactions described in the Forward Sale/Streaming Agreements;
Namoya Payable Gold has the meaning
ascribed to Payable Gold in the Namoya Streaming Agreement;
Namoya Purchaser has the meaning
ascribed to Purchaser in the Namoya Streaming Agreement;
"Namoya Streaming Agreement" means the
Gold Streaming Agreement dated February 27, 2015 among Namoya GSA Holdings, the
Company and Namoya Mining S.A. (as amended or restated from time to time);
"Namoya Streaming Obligations" means
the liabilities and obligations of the Company and certain of the Restricted
Subsidiaries under or in connection with the Namoya Streaming Agreement;
"Namoya Streaming Secured Obligations"
means the Deposit (as defined in the Namoya Streaming Agreement as in effect as
of the date hereof), which amount shall be reduced pursuant to the formula set
out in Section 9.2(a) of the Namoya Streaming Agreement as of the date
hereof;
Priority Stream Obligations means
the obligation to, without duplication, deliver the Namoya Payable Gold,
including any Namoya Payable Gold which, pursuant to the terms of the Namoya
Streaming Agreement, should have been delivered to or for the benefit of the
Namoya Purchaser but which was not delivered or which was used for another
purpose in contravention of the Namoya Streaming Agreement but excluding, for
greater certainty, any future obligation to deliver the Namoya Payable Gold,
which shall continue as part of the Namoya Streaming Obligations only;
- 2 -
"Twangiza Forward Agreement - 1" means
the Gold Purchase and Sale Agreement dated February 27, 2015 among Twangiza GFSA
Holdings, the Company and Twangiza Mining S.A. (as amended or restated from time
to time);
"Twangiza Forward Agreement - 2" means
the Gold Purchase and Sale Agreement dated February 27, 2015 among Twangiza GFSA
Holdings, the Company and Twangiza Mining S.A. (as amended or restated from time
to time);
"Twangiza Forward Obligations - 1"
means the liabilities and obligations of the Company and certain of the
Restricted Subsidiaries under or in connection with the Twangiza Forward
Agreement 1, referred to therein as the PSA Obligations;
"Twangiza Forward Secured Obligations
- 1" means $20,000,000 (being the Prepayment Amount in the Twangiza Forward
Agreement 1), which amount shall be reduced by $555,556 on the date of
delivery of each Scheduled Monthly Quantity (as defined in the Twangiza Forward
Agreement 1 as in effect as of the date hereof) of gold, which secured
obligations are referred to in the Twangiza Forward Agreement 1 as the
Secured Amount;
"Twangiza Forward Obligations - 2"
means the liabilities and obligations of the Company and certain of the
Restricted Subsidiaries under or in connection with the Twangiza Forward
Agreement 2, referred to therein as the PSA Obligations;
"Twangiza Forward Secured Obligations
- 2" means $20,000,000 (being the Prepayment Amount in the Twangiza Forward
Agreement 2), which amount shall be reduced by $555,556 on the date of
delivery of each Scheduled Monthly Quantity (as defined in the Twangiza Forward
Agreement 2 as in effect as of the date hereof) of gold, which secured
obligations are referred to in the Twangiza Forward Agreement 2 as the
Secured Amount;
"Twangiza Forward Obligations" means,
collectively, the Twangiza Forward Obligations - 1 and the Twangiza Forward
Obligations - 2;"
"Twangiza Forward Secured Obligations"
means, collectively, the Twangiza Forward Secured Obligations - 1 and the
Twangiza Forward Secured Obligations - 2;"
Confirmation that Namoya Streaming
Obligations and Twangiza Forward Obligations permitted under the Note
Indenture
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b. |
The following is added to the definition of
"Indebtedness" in Section 1.01 of the Note Indenture as new paragraph (11)
thereof:
"(11) the Namoya Streaming Obligations and the Twangiza
Forward Obligations." |
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c. |
The following is added to the definition of "Asset
Disposition" in Section 1.01 of the Note Indenture as new paragraph (19)
thereof:
"(19) the Forward Sale/Streaming |
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d. |
Subsection (2)(a) of the definition of "Parity Lien Debt"
in Section 1.01 of the Note Indenture is deleted in its entirety and
replaced with the following:
"such Indebtedness is designated by the Company, in an
Officers Certificate delivered to each Parity Debt Representative and the
Collateral Agent, as Parity Lien Debt for the purposes of the Secured
Debt Documents; provided that no Obligation or Indebtedness may be
designated as both Parity Lien Debt and Priority Lien Debt, except for the
Namoya Streaming Obligations;" |
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e. |
Subsection (1) of the definition of "Priority Lien Debt"
in Section 1.01 of the Note Indenture is deleted in its entirety and
replaced with the following:
"such Indebtedness is designated by the Company, in an
Officers Certificate delivered to each Priority Debt Representative and
the Collateral Agent, as Priority Lien Debt for the purposes of the
Secured Debt Documents; provided that no Obligation or Indebtedness may be
designated as both Parity Lien Debt and Priority Lien Debt, except for the
Namoya Streaming Obligations;" |
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f. |
The following is added to Section 4.09(b) of the Note
Indenture as new paragraph (20) thereof:
"(20) the Namoya Streaming Obligations and the Twangiza
Forward Obligations." |
Priority Liens to include Priority Stream Obligations and
Twangiza Forward Secured Obligations
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g. |
Section 4.09(b)(1) is deleted and the following
substituted therefor: |
"(1)
Indebtedness of the Company or any of its Restricted Subsidiaries pursuant to
Debt Facilities or Forward Sale/Streaming Facilities in an aggregate amount
of:
(A) the Priority Stream Obligations,
and
(B) an amount not to exceed the
greater of:
(i) the greater of (1) $20,000,000 and
(2) 5% of Total Assets, and
(ii) the aggregate of (1) $15,000,000
and (2) the Twangiza Forward Secured Obligations."
Parity Liens to include Namoya Streaming Secured
Obligations
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h. |
Section 4.09(b)(19) is deleted and the following
substituted therefor:
"(19) in addition to the items referred to in clauses (1)
through (18) above (20) below, Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate amount which, when taken together
with the amount of all other Indebtedness Incurred pursuant to this clause
(19) and then outstanding, shall not exceed the greater
of: |
(A) the greater of (i) $5.0 million
and (ii) 1% of Total Assets, and
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(B) the aggregate of (i) the Namoya
Streaming Secured Obligations, excluding the amount of any Priority Stream
Obligation that is included in Section 4.09(b)(1), and (ii) the Deposit Balance
Amount, at anytime outstanding.
Confirmation of Priority of Namoya Payable Gold as a
Pre-paid Purchase Obligation
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i. |
The definition of Priority Debt Sharing Confirmation is
deleted in its entirety and replaced with the
following: |
Priority Debt Sharing Confirmation
means, as to any Series of Priority Lien Debt, the written agreement of the
holders of such Series of Priority Lien Debt, as set forth in the credit
agreement, indenture or other agreement governing such Series of Priority Lien
Debt, for the benefit of all holders of each other existing and future Series of
Priority Lien Debt and each existing and future Priority Debt Representative,
that all Priority Lien Obligations will be and are secured equally and ratably
by all Liens at any time granted by the Borrower or any other Obligor to secure
any Obligations in respect of such Series of Priority Lien Debt (except that the
Priority Stream Obligations shall be paid in priority to the other Priority Lien
Obligations in accordance with Section 3.4(a) of the Collateral Trust
Agreement), whether or not upon property otherwise constituting Collateral, that
all such Liens will be enforceable by the Collateral Agent for the benefit of
all holders of Priority Lien Obligations equally and ratably (except that the
Priority Stream Obligations shall be paid in priority to the other Priority Lien
Obligations in accordance with Section 3.4(a) of the Collateral Trust
Agreement), and that the holders of Obligations in respect of such Series of
Priority Lien Debt are bound by the provisions in the Collateral Trust Agreement
relating to the order of application of proceeds from enforcement of such Liens,
and consent to and direct the Collateral Agent to perform its obligations under
the Collateral Trust Agreement.
Permitting Certain Restrictions on Intercompany
Distributions
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j. |
The following is added at the end of Section
4.08(a): |
"where the effect of such consensual
encumbrance or consensual restriction is to cause the Company or any of its
Restricted Subsidiaries to not have sufficient funds to satisfy its obligations
hereunder or under any other Secured Debt Document.
Cross Defaults to Forward Sale/Streaming Agreements
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k. |
The following is added to Section 6.01 as new paragraph
(6.1) thereof: |
"(6.1) any Banro Event of Default
under any of the Forward Sale/Streaming Agreements (as defined therein) in
respect of which the grace period has expired;
3. |
Amendments to Priority Debt Sharing
Confirmations |
The parties hereto acknowledge and
agree that each Priority Debt Sharing Confirmation in the Indenture Documents or
entered into in connection with an Indenture Document, is hereby amended to
provide that the Priority Stream Obligations shall be paid in priority to the
other Priority Lien Obligations in accordance with Section 3.4(a) of the
Collateral Trust Agreement.
4. |
Amendments to Indenture Documents and Collateral
Documents |
The parties hereto acknowledge and
agree that all Indenture Documents and Collateral Documents are deemed to be
amended to the extent required to reflect the amendments set forth in this First
Amending Agreement.
- 5 -
The Company and the Trustee are hereby
authorized and directed to take all such further steps as are necessary to give
effect to the amendments as set forth in this First Amending Agreement.
6. |
Incorporation into Note
Indenture |
This First Amending Agreement shall be
read and construed as if forming a part of the Note Indenture and the Note
Indenture shall be amended and revised to the extent required to give effect to
this First Amending Agreement.
The Note Indenture, as amended by this
First Amending Agreement, is in all respects ratified and confirmed.
This First Amending Agreement shall be
construed in accordance with the laws of the Province of Ontario and shall be
treated in all respects as an Ontario contract. The parties hereby submit and
attorn to the jurisdiction of the courts of Ontario for all matters related to
this First Amending Agreement.
This First Amending Agreement may be
executed in several counterparts, each of which when executed shall be deemed to
be an original and such counterparts together shall constitute one and the same
instrument and notwithstanding their date of execution they shall be deemed to
be dated as of the date hereof.
[signature page follows]
- 6 -
IN WITNESS WHEREOF the parties have executed this First
Amending Agreement as of the date first above written.
BANRO CORPORATION |
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Per: |
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Name: |
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Title: |
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BANRO CONGO MINING S.A. |
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Per: |
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Name: |
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Title: |
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KAMITUGA MINING S.A. |
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Per: |
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Name: |
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Title: |
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LUGUSHWA MINING S.A. |
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Per: |
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Name: |
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Title: |
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NAMOYA MINING S.A. |
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Per: |
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Name: |
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Title: |
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TWANGIZA MINING S.A. |
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Per: |
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Name: |
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Title: |
(signature page to indenture amendment)
BANRO GROUP (BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
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BANRO CONGO (BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
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KAMITUGA (BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
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LUGUSHWA (BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
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NAMOYA (BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
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TWANGIZA (BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
(signature page to indenture amendment)
EQUITY FINANCIAL TRUST COMPANY |
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
(signature page to indenture amendment)
THIS FIRST AMENDING AGREEMENT TO COLLATERAL TRUST AGREEMENT
made as of the day of , 2015.
BETWEEN:
BANRO CORPORATION, a
corporation continued under the laws of the Canada, having an office in Toronto,
Ontario
(the Company)
OF THE FIRST PART
- and -
THE INITIAL GUARANTORS, as
Initial Guarantors
(collectively, the Initial
Guarantors)
OF THE SECOND PART
- and -
EQUITY FINANCIAL TRUST
COMPANY, a trust company continued under the laws of Canada and registered
to carry business in the Province of Ontario
(the Indenture Trustee)
OF THE THIRD PART
- and -
EQUITY FINANCIAL TRUST
COMPANY, a trust company continued under the laws of Canada and registered
to carry business in the Province of Ontario
(Collateral Agent)
OF THE FOURTH PART
- and -
ECOBANK DRC SARL, a company
continued under the laws of the Democratic Republic of Congo
(Ecobank)
OF THE FIFTH PART
- and -
GRAMERCY FUNDS MANAGEMENT LLC,
a limited liability company formed under the laws of Delaware
(Gramercy)
OF THE SIXTH PART
WHEREAS:
A. |
The Company, the Initial Guarantors, the Indenture
Trustee and Collateral Agent have heretofore executed and delivered a
collateral trust agreement dated as of March 2, 2012 (as amended, restated
and supplemented from time to time, the "CTA "); |
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B. |
By Joinder dated as of January 28, 2013, Ecobank agreed
to be bound by the terms of as a Secured Debt Representative; |
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C. |
By Joinder dated as of August 18, 2014, Gramercy agreed
to be bound by the terms of as a Secured Debt Representative; |
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E. |
T he Company, the Initial Guarantors, the Indenture
Trustee and Collateral Agent wish to the CTA to revise, among other
things, the remedies available to the Collateral Agent upon an Actionable
Default and the application of proceeds pursuant to Section 3.4;
and |
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F. |
Section 9.1(a) of the CTA provides that the Collateral
Agent, acting as directed by an Act of Instructing Debtholders, and the
Obligors may amend or supplement the CTA, provided that the consent of the
requisite percentage or number of holders of each Series of Secured Debt
so affected under the applicable Secured Debt Document has been obtained,
which consent to this First Amending Agreement has been
obtained. |
NOW THEREFORE, this First Amending Agreement witnesseth
and it is hereby agreed and declared as follows:
Except as otherwise provided for herein, all capitalized terms
and expressions used in this First Amending Agreement shall have the meanings
ascribed to them in the CTA.
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a. |
The following are added as additional definitions in
Section 1.1 of the CTA: |
Disposition means with respect to
any asset of any Person, any direct or indirect sale (including, where the
context so requires, the sale of the Person itself), lease (where such Person is
the lessor of such asset), assignment, cession, transfer (including any transfer
of title or possession), exchange, conveyance, release or gift of such asset,
and includes the collection, foreclosure or other realization upon collateral
pledged by such Person; and Dispose, Disposal and
Disposed have meanings correlative thereto;
Forward Sale/Streaming Agreements
has the meaning ascribed thereto in the Indenture;"
FSA Purchasers means the Namoya
Purchaser and the Twangiza Purchaser;"
"Namoya Streaming Agreement" has the
meaning ascribed thereto in the Indenture;"
Namoya Payable Gold has the meaning
ascribed to Payable Gold in the Namoya Streaming Agreement;
- 2 -
Namoya Purchaser has the meaning
ascribed to Purchaser in the Namoya Streaming Agreement;
Priority Stream Obligations has the
meaning ascribed thereto in the Indenture;
Twangiza Purchaser has the meaning
ascribed to Purchaser in each of the Twangiza Forward Agreement 1 and
Twangiza Forward Agreement - 2;
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b. |
The definitions of Permitted Prior Liens and Priority
Debt Sharing Confirmation and are deleted in their entirety and replaced
with the following: |
Permitted Prior Liens means Liens
that arise by operation of law and are not voluntarily granted, to the extent
entitled by law to priority over the Liens created by the Priority Lien
Documents.
Priority Debt Sharing Confirmation
means, as to any Series of Priority Lien Debt, the written agreement of the
holders of such Series of Priority Lien Debt, as set forth in the credit
agreement, indenture or other agreement governing such Series of Priority Lien
Debt, for the benefit of all holders of each other existing and future Series of
Priority Lien Debt and each existing and future Priority Debt Representative,
that all Priority Lien Obligations will be and are secured equally and ratably
by all Liens at any time granted by the Borrower or any other Obligor to secure
any Obligations in respect of such Series of Priority Lien Debt (except that the
Priority Stream Obligations shall be paid in priority to the other Priority Lien
Obligations in accordance with Section 3.4(a)), whether or not upon property
otherwise constituting Collateral, that all such Liens will be enforceable by
the Collateral Agent for the benefit of all holders of Priority Lien Obligations
equally and ratably (except that the Priority Stream Obligations shall be paid
in priority to the other Priority Lien Obligations in accordance with Section
3.4(a)), and that the holders of Obligations in respect of such Series of
Priority Lien Debt are bound by the provisions in this Agreement relating to the
order of application of proceeds from enforcement of such Liens, and consent to
and direct the Collateral Agent to perform its obligations under this
Agreement.
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c. |
Subsection (b)(i) of the definition of "Parity Lien Debt"
in Section 1.1 of the CTA is deleted in its entirety and replaced with the
following: |
"such Indebtedness is designated by
the Borrower, in an Officers Certificate delivered to each Parity Debt
Representative and the Collateral Agent, as Parity Lien Debt for the purposes
of the Secured Debt Documents; provided that no Obligation or Indebtedness may
be designated as both Parity Lien Debt and Priority Lien Debt, except for Namoya
Streaming Obligations;"
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d. |
Subsection (a) of the definition of "Priority Lien Debt"
in Section 1.1 of the CTA is deleted in its entirety and replaced with the
following: |
"such Indebtedness is designated by
the Borrower, in an Officers Certificate delivered to each Priority Debt
Representative and the Collateral Agent, as Priority Lien Debt for the
purposes of the Secured Debt Documents; provided that no Obligation or
Indebtedness may be designated as both Parity Lien Debt and Priority Lien Debt,
except for Namoya Streaming Obligations;"
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e. |
The following is added to the end of the first sentence
of Section 2.5 of the CTA: |
- 3 -
(except that the Priority Stream
Obligations shall be paid in priority to the other Priority Lien Obligations in
accordance with Section 3.4(a)) .
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f. |
The following is added to Section 3.3 of the
CTA: |
"Notwithstanding any Act of
Instructing Debtholders or any provision in this Agreement or in any other
Collateral Document, the Collateral Agent shall not Dispose of nor shall it
request, approve or consent to any Disposition of the Collateral unless such
Disposition complies in all respects with the transfer restrictions in the
Forward Sale/Streaming Agreements. If the Disposition of Collateral is effected
in accordance in all respects with the transfer provisions in the Namoya
Streaming Agreement, then the Namoya Purchaser will have no entitlement to share
in the proceeds of the Disposition of such Collateral (including pursuant to
Section 3.4(a)) except to satisfy the Priority Stream Obligations due and owing
to the Namoya Purchaser prior to such Disposition and not assumed by the
transferee of such Collateral."
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g. |
Section 3.4(a) of the CTA is deleted in its entirety and
replaced with the following: |
(a) The Collateral Agent will,
subject to applicable law, apply the proceeds of any Disposition of any
Collateral and the proceeds of any insurance policy, including any title
insurance policy, in the following order of application and pursuant to wiring
instructions as specified in an Act of Instructing Debtholders:
(i) FIRST, to the payment of all
amounts payable under this Agreement on account of the Collateral Agents direct
or indirect fees and any reasonable legal fees, costs and expenses or other
liabilities or debts of any kind incurred by the Collateral Agent or any
co-trustee or agent in connection with this Agreement or any other Collateral
Document;
(ii) SECOND, to the repayment of
Indebtedness or other Obligations, other than Secured Obligations, secured by a
Permitted Prior Lien on the Collateral sold or realized upon;
(iii) THIRD, to the Namoya Purchaser
for application to the payment outstanding Priority Stream Obligations;
(iv) FOURTH, to the respective
Priority Debt Representatives for application to the payment of all outstanding
Priority Lien Obligations (other than the Priority Stream Obligations) that are
then due and payable in such order as may be provided in the Priority Lien
Documents in an amount sufficient to pay in full in cash all outstanding
Priority Lien Debt (other than the Priority Stream Obligations) and all other
Priority Lien Obligations (other than the Priority Stream Obligations) that are
then due and payable (including all interest accrued thereon after the
commencement of any bankruptcy or other Insolvency Proceeding at the rate,
including any applicable post-default rate, specified in the Priority Lien
Documents, even if such interest is not enforceable, allowable or allowed as a
claim in such proceeding, and including the discharge or cash collateralization
(at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage
of the aggregate undrawn amount required for release of Liens under the terms of
the applicable Priority Lien Document) of all outstanding letters of credit and
bankers acceptances constituting Priority Lien Debt);
- 4 -
(v) FIFTH, to the respective Parity
Debt Representatives for application to the payment of all outstanding Parity
Lien Obligations that are then due and payable in such order as may be provided
in the Parity Lien Documents in an amount sufficient to pay in full in cash all
outstanding Parity Lien Debt and all other Parity Lien Obligations that are then
due and payable (including all interest accrued thereon after the commencement
of any bankruptcy or other Insolvency Proceeding at the rate, including any
applicable post-default rate, specified in the Parity Lien Documents, even if
such interest is not enforceable, allowable or allowed as a claim in such
proceeding, and including the discharge or cash collateralization (at 102.5% of
the aggregate undrawn amount) of all outstanding letters of credit and bankers
acceptances constituting Parity Lien Debt); and
(vi) SIXTH, any surplus remaining
after the irrevocable and unconditional payment in full in cash of all of the
Secured Obligations and Obligations entitled to the benefit of such Collateral
will be paid to the Borrower or the other applicable Obligors, as the case may
be, or its successors or assigns, or as a court of competent jurisdiction may
direct.
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h. |
Section 3.4 of the CTA is hereby amended by adding the
following as subsection (c): |
If any Priority Lien Secured Party
other than the Namoya Purchaser collects or receives any proceeds in respect of
the Priority Stream Obligations prior to the payment and satisfaction in full of
the Priority Stream Obligations and a Responsible Officer of such Priority Debt
Representative shall have received written notice, or shall have actual
knowledge, of the same prior to such Priority Debt Representatives distribution
of such proceeds, whether after the commencement of an Insolvency Proceeding or
otherwise, such Priority Lien Secured Party will forthwith deliver the same to
the Collateral Agent, for the account of the Namoya Purchaser, in the form
received, duly endorsed to the Collateral Agent, for the account of the Namoya
Purchaser to be applied in accordance with clause (a) above.
Until so delivered, such proceeds will
be held by such Priority Lien Secured Party for the benefit of the Namoya
Purchaser. This Section 3.4(c) shall not apply to payments received by any
holder of Priority Lien Obligations if such payments are not proceeds of any
Disposition of any Collateral.
3. |
Acknowledgement of Security Interest in Forward
Sale/Streaming Agreements |
The parties hereto acknowledge that the
FSA Purchasers have granted a security interest in all of their right, title,
estate and interest in, to, under and in respect of the Forward Sale/Streaming
Agreements as general and continuing security for the payment and performance of
certain of their other obligations. The parties hereto agree that upon a due
enforcement of such security interest against a FSA Purchaser by the applicable
secured parties or their representative, the security parties or their
representative shall hold all of the applicable FSA Purchasers right, title,
estate and interest in, to, under and in respect of the Forward Sale/Streaming
Agreements and shall be afforded the benefit of, and be deemed to have assumed,
all of the rights and obligations of the Forward Sale/Streaming Agreements under
the Collateral Documents, provided that such secured parties or their
representative execute(s) the requisite Priority Debt Sharing Confirmation or
Parity Debt Sharing Confirmation, as applicable.
4. |
Amendments to Priority Debt Sharing
Confirmations |
The parties hereto acknowledge and agree
that each Priority Debt Sharing Confirmation in the Secured Debt Documents
(including, without limitation, the Securities Purchase Agreement dated August
18, 2014 between Banro Corporation and the Buyers (as defined therein)) or
entered into in connection with a Secured Debt Document, is hereby amended to
provide that the Priority Stream Obligations shall be paid in priority to the
other Priority Lien Obligations in accordance with Section 3.4(a) of this
Agreement.
- 5 -
5. |
Amendments to Secured Debt Documents and Collateral
Documents |
The parties hereto acknowledge and
agree that all Secured Debt Documents and Collateral Documents are deemed to be
amended to the extent required to reflect the amendments set forth in this First
Amending Agreement.
The Company and the Trustee are hereby
authorized and directed to take all such further steps as are necessary to give
effect to the amendments as set forth in this First Amending Agreement.
7. |
Incorporation into CTA |
This First Amending Agreement shall be
read and construed as if forming a part of the CTA and the CTA shall be amended
and revised to the extent required to give effect to this First Amending
Agreement.
The CTA, as amended by this First
Amending Agreement, is in all respects ratified and confirmed.
This First Amending Agreement shall be
construed in accordance with the laws of the Province of Ontario and shall be
treated in all respects as an Ontario contract. The parties hereby submit and
attorn to the jurisdiction of the courts of Ontario for all matters related to
this First Amending Agreement.
This First Amending Agreement may be
executed in several counterparts, each of which when so executed shall be deemed
to be an original and such counterparts together shall constitute one and the
same instrument and notwithstanding their date of execution they shall be deemed
to be dated as of the date hereof.
[signature page follows]
- 6 -
IN WITNESS WHEREOF the parties have executed this First
Amending Agreement as of the date first above written.
EQUITY FINANCIAL TRUST COMPANY |
as Collateral Agent |
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
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EQUITY FINANCIAL TRUST COMPANY |
as Indenture Trustee |
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
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BANRO CORPORATION |
as Borrower and Issuer |
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Per: |
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Name: |
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Title: |
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BANRO CONGO MINING S.A. |
as Initial Guarantor |
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Per: |
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Name: |
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Title: |
(signature page to Amending Agreement)
KAMITUGA MINING S.A. |
as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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LUGUSHWA MINING S.A. |
as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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NAMOYA MINING S.A. |
as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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TWANGIZA MINING S.A. |
as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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ECOBANK DRC SARL |
as Secured Debt Representative |
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
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GRAMERCY FUNDS MANAGEMENT LLC |
as Secured Debt Representative |
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Per: |
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Name: |
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Title: |
(signature page to Amending Agreement)
SCHEDULE C
OWNERSHIP OF NOTES
[Details regarding Notes beneficially owned, directly or
indirectly, or over which control or direction is exercised, by the Noteholders
redacted.]
SCHEDULE D
REGULATORY AND CORPORATE APPROVALS
1. |
Consent from a majority of the holders of the Notes, as
required under section 9.02 of the Indenture. |
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2. |
Board approvals of the board of directors of Banro and
each applicable subsidiary of Banro. |
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3. |
Ministerial approval in the Democratic Republic of the
Congo, if applicable. |
GOLD PURCHASE AND SALE AGREEMENT |
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NAMOYA GSA HOLDINGS, among other purchasers |
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and |
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BANRO CORPORATION |
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and |
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NAMOYA MINING S.A. |
|
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
NAMOYA GSA HOLDINGS, an
exempted company incorporated under the laws of Cayman Islands
(the
Agent)
- and -
Additional Purchasers joined from time
to time
(together with the Agent, the
Purchasers)
- and -
BANRO CORPORATION, a
corporation existing under the laws of Canada
(Banro)
- and -
NAMOYA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms when used in these recitals
shall have the respective meanings set forth in Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchasers and the Purchasers have agreed to purchase from the Seller, the
Payable Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Namoya Project;
AND WHEREAS the Parties agree that additional purchasers
may be joined with the Agent as the Purchasers on the terms and subject to the
provisions set out herein with the Agent acting as agent therefor;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
- 2 -
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Term has
the meaning set out in Section 5.1(a) .
Affiliate means, in
relation to any person or entity, any other person or entity controlling,
controlled by or under common control with such first mentioned person or
entity.
Agreement means this
gold purchase and sale agreement and all attached schedules, in each case as the
same may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
AOI has the meaning
set out in the definition of Properties.
Applicable Laws
means any international, federal, state, provincial or municipal law,
regulation, ordinance, code, order or other requirement or rule of law or the
rules, policies, orders or regulations of any Governmental Authority or stock
exchange, including any judicial or administrative interpretation thereof,
applicable to a person or any of its properties, assets, business or operations.
Applicable
Percentage means, in respect of the Agent, 100%, as such percentage(s)
may change from time to time in accordance with this Agreement.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules
means the Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 9.2(c) .
Banro Event of
Default has the meaning set out in Section 11.1.
Banro Group Entity
means the PSA Entities and their respective Affiliates from time to time.
Business Day means
any day other than a Friday, Saturday or Sunday or a day that is a statutory
holiday under the laws of the Province of Ontario, Canada or the laws of South
Africa.
- 3 -
Change of Control of
a person (the Subject Person) means the consummation of any
transaction, including any consolidation, arrangement, amalgamation or merger or
any issue, Transfer or acquisition of voting shares, the result of which is that
any other person or group of other persons acting jointly or in concert for
purposes of such transaction: (i) becomes the beneficial owner, directly or
indirectly, of more than 50% of the voting shares of the Subject Person; or (ii)
acquires control of the Subject Person; provided that a Change of Control shall
not include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means
the date that is two Business Days following the date on which the conditions
precedent to payment of the Deposit are satisfied or waived in accordance with
Section 3.5 or such other date as the Parties may agree, such date expected to
occur on or before April 15, 2015.
Collateral Trust
Agreement means the collateral trust agreement dated March 2, 2012 (as
amended, supplemented, amended and restated or otherwise modified and in effect
from time to time) among Banro, each of the guarantors named therein and Equity
Financial Trust Company.
Confidential
Information has the meaning set out in Section 7.6(a).
Contaminant means
any solid, liquid, gas, odor, heat, sound, vibration, radiation, or combination
of any of them, that does or is reasonably expected to:
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(i) |
impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Date of Delivery has
the meaning set out in Section 2.2(b).
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold
purchase and sale agreements with the Agent or Twangiza GFSA Holdings, any
financing transaction pursuant to which (a) Banro or any of the Banro Group
Entities receive cash advances or deposits in respect of future revenues from
the sale of specified mineral assets to a person other than an Affiliate, (b)
such advances or deposits are recorded as liabilities, but not as debt, on the
consolidated balance sheet of Banro and (c) such liability is amortized upon the
delivery of such mineral assets.
- 4 -
Delivery means the
delivery of doré to a Processor (or any Non-Doré Shipment pursuant to a Non-Doré
Agreement).
Deposit means
$50,000,000, which amount may be increased in the sole discretion of the
Purchasers up to an amount not to exceed $60,000,000 with a proportionate
adjustment to the definition of Payable Gold.
Deposit Reduction
Date means the date occurring after the Closing Date on which the
Deposit is reduced to nil in accordance with the formula set forth in Section
2.4(a).
Disqualified Stock
means, with respect to any person, any shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) equity of such person, including any preferred stock and
limited liability or partnership interests (whether general or limited)
(collectively, Capital Stock) of such person that by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable) or upon the happening of any event:
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(i) |
matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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(ii) |
is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock)); or |
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(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means,
with respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
|
(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means,
with respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement; provided that in no event shall an
operating lease be deemed to constitute an Encumbrance.
- 5 -
Environment means
the ambient air, all layers of the atmosphere, surface water, underground water,
all land (surface and underground), all living organisms and the interacting
natural systems that include components of air, land, water, organic and
inorganic matter and living organisms, and includes indoor and underground
spaces.
Environmental Laws
means any Applicable Laws relating to the Environment, occupational health or
safety, industrial hygiene, product liability or any past, present or future
activity, event or circumstance in respect of any Hazardous Materials (including
the use, handling, transportation, production, disposal, discharge or storage
thereof or the terms of any Approval issued in connection therewith) or the
environmental conditions on, under or about any real property (including soil,
groundwater and indoor, underground and ambient air conditions).
Gold Payment means
the receipt by a Banro Group Entity of payment (in cash or in kind), whether
provisional or final, or other consideration from a Processor in respect of any
Delivery.
Gold Price means,
with respect to any day, the afternoon per ounce gold fixing price in U.S.
dollars quoted by the London Bullion Market Association for Refined Gold on such
day or, if such day is not a trading day, the immediately preceding trading day;
provided that if, for any reason, the London Bullion Market Association is no
longer in operation, or if the price of Refined Gold is not confirmed,
acknowledged by or quoted by the London Bullion Market Association, the Gold
Price shall be determined by reference to the price of Refined Gold in a manner
endorsed by the World Gold Council, failing which the Gold Price shall be
determined by reference to the price of gold on a commodity futures exchange
mutually acceptable to the Parties acting reasonably.
Gold Purchase Price
has the meaning set out in Section 2.4.
Governmental
Authority means any national, federal, state, provincial, regional,
municipal, territorial or local government, agency, department, ministry,
authority, board, bureau, tribunal, commission, official, court or securities
commission, and any person entitled under Applicable Law to exercise executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to any of the foregoing entities, including all tribunals, commissions, boards,
bureaus, arbitrators and arbitration panels, and any authority or other person
controlled by any of the foregoing.
Group Collateral has
the meaning set out in Section 9.2(b).
Group Security
Agreements has the meaning set out in Section 9.2(b)
Guarantors means
Banro, Twangiza Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and
Lugushwa Mining S.A.
- 6 -
Hazardous Materials
means any pollutant or Contaminant, including any hazardous, dangerous,
registrable or toxic chemical, material or other substance within the meaning of
any Environmental Law.
Indebtedness of any
person means, without duplication:
|
(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligation
until the amount of such obligation becomes a liability on the balance
sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
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(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or
obligor); |
- 7 -
|
(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
|
(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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|
(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
|
(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of any
of the Banro Group Entities; or |
- 8 -
|
(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Initial Term has the
meaning set out in Section 5.1(a).
Insolvency Event
means, in relation to any person, any one or more of the following events or
circumstances:
|
(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
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(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such proceeding; |
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(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
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(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any
person that provides any Secured Financing, excluding any Banro Group Entity.
- 9 -
Majority Purchasers
means those Purchasers who, at the relevant time, have provided an amount equal
to or greater than 50.1% of the principal amount of the Deposit advanced to the
Seller.
Material Adverse
Effect means any event, occurrence, change or effect that, when taken
individually or together with all other events, occurrences, changes or effects,
is or could reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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(ii) |
limit, restrict or impair the ability of the Seller to
operate the Namoya Project in all material respects in accordance with the
Operating Plan for the Namoya Project in effect at the time of the event,
occurrence, change or effect; |
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(iii) |
cause any material decrease to expected gold production
from the Namoya Project based on the Operating Plan for the Namoya Project
in effect at the time of the event, occurrence, change or
effect; |
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(iv) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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(v) |
result in a Banro Event of
Default. |
Monthly Report means
a written report in relation to a calendar month with respect to the Namoya
Project that contains, for such month:
|
(i) |
types, tonnes and gold grade of ore mined; |
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(ii) |
types, tonnes and gold grade of any ore
stockpiled; |
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(iii) |
the number of ounces of gold contained in ore processed
during such month, but not delivered to a processor by the end of such
month; |
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(iv) |
at the request of the Agent, a summary of Deliveries
during such month showing, among other things, provisional Refined Gold
and Payable Gold amounts and Gold Payments and any final settlement
adjustments made during such month; |
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(v) |
at the request of the Agent, copies of all Processor
statements, invoices or receipts; and |
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(vi) |
at the request of the Agent, a detailed calculation of
the uncredited balance of the Deposit as of the end of the
month. |
Namoya Holdcos means
together, Banro Group (Barbados) Limited and Namoya (Barbados) Limited.
- 10 -
Namoya Project means
the Properties and the mining operations developed, constructed and operated at
and in respect of the Properties.
Net Proceeds means
with respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Agent upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means
National Instrument 43-101 Standards of Disclosure for Mineral Projects
of the Canadian Securities Administrators, as may be amended from time to time,
or any successor instrument, rule or policy.
Non-Doré Agreements
means all agreements entered into by a Banro Group Entity for the sale of
Non-Doré Shipments, as the same may be amended, restated, supplemented, or
superseded from time to time.
Non-Doré Shipments
has the meaning set out in Section 2.1(c) .
Note Indenture means
the indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as
issuer, each of the guarantors named therein and Equity Financial Trust Company,
as trustee and collateral agent.
Ongoing Price means
$150 per ounce.
Operating Plan means
the life of mine operating plan for the Namoya Project delivered to the Agent on
the date hereof.
Order means any
order, directive, decree, judgment, ruling, award, injunction, direction or
request of any Governmental Authority or other decision-making authority of
competent jurisdiction.
Other Minerals means
any and all marketable metal bearing material in whatever form or state
(including ore) that is mined, produced, extracted or otherwise recovered from
any location that is not within the Properties.
Parties means the
parties to this Agreement.
Payable Gold means
Refined Gold in an amount equal to 8.33%, which percentage will increase
proportionately with any increase in the amount of the Deposit to a percentage
not to exceed 10%, of the Produced Gold in respect of which any Banro Group
Entity receives a Gold Payment occurring during the Term, as determined in
accordance with Sections 2.1(b) and 2.1(c).
Permits means all
licenses, permits, approvals (including environmental approvals) authorizations,
rights (including surface and access rights and rights of way, and access to
water and power), privileges, concessions or franchises necessary for the
construction, development and operation of the Namoya Project as is
contemplated by the Operating Plan.
- 11 -
Permitted
Distributions means any payment of Distributions required to satisfy
any obligation under this Agreement, Applicable Laws or the terms of any Secured
Financing entered into in accordance with this Agreement, as a result of any
Affiliate of any PSA Entity not otherwise having sufficient funds to satisfy
such obligation.
Permitted Encumbrances
means:
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(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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(ii) |
following the termination of the Note
Indenture: |
|
(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
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(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
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(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
- 12 -
|
(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(H) |
liens in respect of the following: |
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[Details of individual lien holders
redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clauses
(1), (4), (5), (7) and (8) of such definition. |
Permitted
Indebtedness means:
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(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (5) below;
and |
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(ii) |
following the termination of the Note
Indenture: |
|
(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Agent and Twangiza GFSA
Holdings; |
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(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
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(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
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(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 80% of the forecast gold production of the Namoya
Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchasers or the
Collateral Agent on their behalf; and (B) the ranking of the PSA
Obligations vis-à-vis such secured Indebtedness shall correspond to the ranking
of the PSA Obligations vis-à-vis the notes issued under the Note Indenture; |
- 13 -
|
(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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(9) |
indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an
individual, corporation, body corporate, limited or general partnership, joint
stock company, limited liability corporation, joint venture, association,
company, trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture, those
Encumbrances that constitute Priority Liens (as defined in the Note
Indenture) and Parity Liens (as defined in the Note Indenture) and, with
respect to Parity Liens, those ranking pari passu with respect to
the Secured Amount; |
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(ii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing
Agreements means all agreements entered into by a PSA Entity with a
Processor for the refining of doré into Refined Gold for the benefit of a PSA
Entity, as the same may be amended, restated, supplemented, or superseded from
time to time.
Processing Plant
means any mill or other processing facility owned or operated or both by any
Banro Group Entity located on or near the Properties, to the extent that such
mill or processing facility was built with the primary intention of processing
ore from the Properties, or at which Produced Gold is processed.
Processor means
collectively, any smelter, refiner or other processor of Produced Gold.
Produced Gold means
any and all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore or other products resulting from the further milling,
processing or other beneficiation of minerals mined, produced, extracted or
otherwise recovered from the Properties.
- 14 -
Project Assets means
the shares in the capital of the PSA Entities (other than Banro) and the
Properties, Processing Plant and all present and after-acquired real or personal
property, used or acquired for use by any Banro Group Entity in connection with
the mining, production or extraction of gold from the Properties.
Project Collateral
means (A) the Project Assets, including all present and after-acquired personal
property used in connection with, relating to or arising out of, in whole or in
part, the Project, and (B) the Produced Gold, and in each case including all
proceeds thereof except sales of Produced Gold in the ordinary course of
business.
Properties means the
mineral claims, mineral leases and other mining rights, concessions and
interests listed in Schedule A together with a 20 kilometre circumambient area
surrounding the properties listed in Schedule A (the AOI), including all
buildings structures improvements, appurtenances and fixtures that form part of
the Namoya Project, whether created privately or by the action of any
Governmental Authority, and includes any term extension, renewal, replacement,
conversion or substitution of any such mineral claims, mineral leases and other
mining rights, concessions or interests, owned or in respect of which an
interest is held, directly or indirectly, by any Banro Group Entity at any time
during the Delivery Period, whether or not such ownership or interest is held
continuously. The Properties are depicted in the map included in Schedule A.
PSA Collateral means
the Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means
Banro and the Seller, and any other Affiliate of Banro (now or hereafter
incorporated) that acquires any interest in the Namoya Project.
PSA Obligations
means all present and future debts, liabilities and obligations of PSA Entities,
or all of them, to the Purchasers under this Agreement.
PSA Security means
the charges and security interests granted in favour of the Purchasers pursuant
to the Security Agreements.
Purchased Ounces has
the meaning set out in Section 2.4.
Purchaser Event of
Default has the meaning set out in Section 12.1.
Receiving Party has
the meaning set out in Section 7.6(a) .
Reduction Amount
means the Gold Price on the Business Day following the Date of Delivery less the
Ongoing Price.
Refined Gold means
marketable metal bearing material in the form of gold bars or coins that is
refined to standards meeting or exceeding 995 parts per 1,000 fine gold.
- 15 -
Reimbursable
Expenses has the meaning set out in Section 14.3.
Restricted Person
means any person or entity that:
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(i) |
is named, identified, described on or included on any
of: |
|
(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
|
(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
|
(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
|
(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Secured Amount has
the meaning set out in Section 9.2(a).
Secured Financing
means any Indebtedness for borrowed money of, or lending facility or other
financing arrangement (including any secured derivative transactions entered
into in connection with such Indebtedness, or any other hedge financing) in
favour of, any Banro Group Entity that is secured by all or any part of the
Project Assets.
Security Agreements
means the Seller Security Agreements, the Group Security Agreements and the
Assignment, Subordination and Postponement of Claims.
Seller Security
Agreements has the meaning set out in Section 9.2(a).
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment payments or other additions that may become payable in respect
thereof, imposed by any Governmental Authority, which taxes shall include all
income or profits taxes (including federal, provincial, and state income taxes)
other than income or profits taxes levied in respect of the income or profits of
the Purchasers, non-resident withholding taxes, sales and use taxes, branch
profit taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts
taxes, business licence taxes, occupation taxes, real and personal property
taxes, stamp taxes, environmental taxes, transfer taxes, land transfer taxes,
capital taxes, extraordinary income taxes, surface area taxes, property taxes,
asset transfer taxes, and other charges and obligations of the same or of a
similar nature to any of the foregoing.
- 16 -
Term has the meaning
set out in Section 5.1.
Time of Delivery has
the meaning set out in Section 2.2(b) .
Transfer means to
sell, transfer, assign, convey, dispose or otherwise grant a right, title or
interest (including expropriation or other transfer required or imposed by law
or any Governmental Authority, whether voluntary or involuntary).
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
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(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
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(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
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(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
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(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an
obligation; |
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(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second
person; |
- 17 -
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(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
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(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
and controls, controlling,
controlled by and under common control have corresponding meanings.
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(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
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(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A |
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Description of Sellers Properties (with map)
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Schedule B |
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Security Agreements |
- 18 -
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Schedule C |
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Intercreditor Principles |
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Schedule D |
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Banro and Seller Representations and Warranties
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Schedule E |
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Purchaser Representations and Warranties |
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Schedule F |
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Dispute Resolution |
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Schedule G |
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Agent |
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Schedule G |
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Agent |
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ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable
Gold |
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(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchasers, and the
Purchasers hereby agree, in accordance with each Purchasers Applicable
Percentage, to purchase from the Seller, the Payable Gold, free and clear
of all Encumbrances. |
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(b) |
As further provided in Section 4.2, Payable Gold shall
not be reduced for, and the Purchasers shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable Processing Agreement. |
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(c) |
In the event any Banro Group Entity intends to sell
Produced Gold in any form other than doré (Non-Doré
Shipments), such sale shall be completed in accordance with a
Non-Doré Agreement on terms and conditions (including in respect of
allowable deductions to determine payability) that are acceptable to the
Agent, acting reasonably. For this purpose, Payable Gold means the
recoverable metal content calculated in accordance with the applicable
Non-Doré Agreement. The Seller shall be deemed to receive a Gold Payment
when it receives payment (whether provisional or final) for a Non-Doré
Shipment and the sale and delivery of the Payable Gold payable on account
of the Non-Doré Shipments shall be made in accordance with Section 2.2.
The Seller shall provide the Agent with a final signed copy of the
Non-Doré Agreement within five Business Days after the execution thereof
and any such agreement shall be on commercially reasonable arms length
terms and conditions with a person who is not a Banro Group
Entity. |
- 19 -
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(a) |
Following the Closing Date, no
later than the 15th day of each month (or the next following
Business Day), the Seller shall sell, and in accordance with Section
2.2(b), deliver to the Purchasers, in accordance with each Purchasers
Applicable Percentage, the aggregate Payable Gold to which all Gold
Payments received in the prior calendar month relate, it being
acknowledged and agreed by the Seller that it shall use commercially
reasonable efforts to deliver Payable Gold to the Purchasers concurrently
with Gold Payments it receives by way of directions to any Processor. In
the event a Gold Payment consists of provisional payments that may be
adjusted upon final settlement of a Delivery,
then: |
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(i) |
on the 15th day of the month following receipt
of such provisional payment or payments (or the next following Business
Day), the Seller shall sell, and in accordance with Section 2.2(b) deliver
to the Purchasers, in accordance with each Purchasers Applicable
Percentage, the Payable Gold in respect of which the Seller received a
provisional Gold Payment, multiplied by the provisional payment percentage
for all Produced Gold in such Delivery, as supported by the documentation
provided pursuant to Section 2.3 and in the applicable Monthly Report;
and |
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(ii) |
on the 15th day of the month following the
date of final settlement of the Delivery with the Processor (or the next
following Business Day), the Seller shall sell, and in accordance with
Section 2.2(b), deliver to the Purchasers, in accordance with each
Purchasers Applicable Percentage, Refined Gold in an amount equal to the
amount, if any, by which the Payable Gold determined pursuant to the final
settlement exceeds the amount of Payable Gold previously delivered to the
Purchasers in respect of such Delivery pursuant to Section 2.2(a)(i), as
supported by the documentation provided pursuant to Section 2.3 and the
applicable Monthly Report, provided that, if such difference is negative,
then the Seller shall be entitled to set off and deduct, in accordance
with each Purchasers Applicable Percentage, such excess amount from the
next required deliveries by the Seller under this Agreement until it has
been fully offset against deliveries to the Purchasers of Refined Gold
pursuant to the first sentence of this Section 2.2(b), or if no such
further deliveries are to be made, the Purchasers shall within ten (10)
Business Days pay the applicable Gold Purchase Price in respect of any
excess ounces delivered to the extent not already paid and any Gold
Purchase Price paid by the Purchasers in respect of such excess ounces
shall be an amount owing to the Seller from the
Purchasers. |
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(b) |
The Seller shall deliver to the Purchasers, in accordance
with each Purchasers Applicable Percentage, all Payable Gold to be
delivered under this Agreement by way of credit or allocation to the metal
account or accounts designated by each of the Purchasers from time to
time, or physical delivery to such other location specified by each of the
Purchasers from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to
be unreasonably withheld. Delivery of the Payable Gold to the
Purchasers shall be deemed to have been made at the time on the date the Payable
Gold is credited or allocated or physically delivered, as applicable, to the
designated metal account of each Purchaser (the Time of Delivery
on such date the Date of Delivery). Title to, and
risk of loss of, the Payable Gold shall pass from the Seller to each of the
Purchasers at the Time of Delivery. The Seller acknowledges that the Purchasers
intend to engage a selling agent that will take delivery of the Payable Gold on
behalf of the Purchasers for purposes of monetizing the Payable Gold. All costs
and expenses pertaining to each delivery of the Payable Gold to the Purchasers,
including such selling arrangements, shall be borne by the Seller so long as the
Purchasers accounts are in customary locations in United Kingdom, Switzerland
or South Africa. |
- 20 -
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(c) |
The Seller hereby represents and warrants to the
Purchasers that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of each of the Purchasers, (ii) the Seller
will have good, valid and marketable title to such Payable Gold, and (iii)
such Payable Gold will be free and clear of all Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchasers,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchasers, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchasers the Refined Gold physically resulting
from Produced Gold. No later than January 15 of each year, the Seller
shall deliver to the Purchasers a certificate of a senior officer of the
Seller confirming compliance with this Section 2.2(d) as it relates to the
prior calendar year. |
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(a) |
The Seller shall notify the Purchasers in writing, no
more than five Business Days after each Delivery, by delivery of an
estimate to the Purchasers setting out the estimated number of ounces of
Payable Gold to be credited, allocated or physically delivered to the
designated metal accounts of each of the Purchasers in respect of such
Delivery and the anticipated Date of Delivery; |
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(b) |
On the Business Day following the Date of Delivery, the
Seller shall notify the Purchasers in writing
of: |
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(i) |
the number of ounces of Payable Gold credited, allocated
or physically delivered to the designated metal account of each of the
Purchasers; and |
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(ii) |
the Gold Purchase Price for such Payable
Gold. |
- 21 -
The Purchasers shall pay to the Seller, in accordance with each
Purchasers Applicable Percentage, a purchase price (the Gold Purchase
Price) for each ounce of Payable Gold sold and delivered by the Seller
to the Purchasers under this Agreement (the Purchased Ounces)
equal to:
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(a) |
prior to the Deposit Reduction Date, (i) the Ongoing
Price on the Date of Delivery of such Purchased Ounces, as applicable,
payable in cash or by wire transfer of immediately available funds, plus
(ii) the Reduction Amount for such Purchased Ounces, payable only by
crediting the applicable Reduction Amount against the Deposit in order to
reduce the uncredited balance of the Deposit until the uncredited balance
of the Deposit has been credited and reduced to nil; and |
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(b) |
from and after the Deposit Reduction Date, the Ongoing
Price on the Date of Delivery of such Purchased Ounces payable in cash or
by wire transfer of immediately available funds. |
ARTICLE 3
DEPOSIT PAYMENT
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(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchasers of the Payable Gold, each Purchaser hereby agrees to pay the
Deposit in cash against, and as a prepayment of the purchase price for the
Payable Gold, subject to the conditions set out in Sections 3.2 and
3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Deposit except as expressly provided in this Agreement. The
Purchasers will not be entitled to demand repayment of the Deposit except
to the extent expressly set forth in this
Agreement. |
The Seller shall use, and Banro shall cause to be used, the
Deposit only to pay accrued and unpaid dividends as of the last payment date on
or prior to the date of receipt by the Seller of the Deposit on preferred shares
in the capital of Banro Group (Barbados) Limited and the Series A preferred
shares in the capital of Banro, to repay the notes issued pursuant to the
backstop facility dated August 18, 2014, bank indebtedness and accounts payable
and thereafter, general corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchasers |
Each Purchaser shall pay the Deposit to or to the order of the
Seller on the Closing Date, by wire transfer of immediately available funds to
the bank account or accounts designated by the Seller in writing, once each of
the following conditions has been satisfied in full:
- 22 -
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(a) |
Banro and the Seller shall have delivered to the Agent a
certificate of status, good standing or compliance (or equivalent) for
each PSA Entity and the Namoya Holdcos, issued by the relevant
Governmental Authority dated no earlier than five Business Days prior to
the Closing Date; |
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(b) |
Each PSA Entity shall have executed and delivered to the
Agent a certificate of a senior officer of each in form and substance
satisfactory to the Agent, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Agent may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the Agent a
favourable opinion, in form and substance satisfactory to the Agent,
acting reasonably, dated as of the Closing Date, from external legal
counsel to Banro, the Seller, the Namoya Holdcos and the PSA Entities as
to (i) the legal status of each, (ii) the corporate power and authority of
each to execute, deliver and perform this Agreement and the Security
Agreements to which it is a party, (iii) the execution and delivery of
this Agreement and the Security Agreements to which it is a party and the
enforceability of this Agreement and the Security Agreements against each,
(iv) that this Agreement and the Security Agreements, and the performance
by Banro and the Seller of the obligations hereunder or thereunder, do not
conflict with, violate, result in a breach of, or constitute a default or
an event creating rights of acceleration, termination, modification or
cancellation or a loss of rights under (with or without the giving notice
or lapse of time or both), the Note Indenture, the Collateral Trust
Agreement, or any of the Collateral Documents (as defined in the Note
Indenture) governed by Ontario law, (v) the outstanding share capital of
the Seller and the Namoya Holdcos, (vi) the creation of valid mortgages
and charge upon, and security interests in (including as to ranking of
such security interests), the PSA Collateral under the Security; and (vii)
the due registration or filing of the Security Agreements and, where
applicable, the perfection of the security interest of the Purchasers
(including as to ranking of such security interests), under such Security
Agreements and the results of the usual searches that would be conducted
in connection with the security that is the subject of such Security
Agreements; |
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
- 23 -
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(e) |
Banro and the Seller shall have delivered to the Agent a
legal opinion addressed to the Purchasers from external counsel, in form
and substance satisfactory to the Agent, with respect to title to the
Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
except for those that would not
reasonably be expected to have a Material Adverse Effect;
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(g) |
each PSA Entity shall have delivered to the Agent a
certificate of a senior officer confirming: |
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(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse
Effect; |
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(h) |
Banro shall have amended the Note Indenture and the
related collateral trust agreement and security agreements as required by
the Agent to, among other things, characterize the Secured Amount as a
Parity Lien (as defined in the Note Indenture), require the trustee under
such collateral trust agreement and security agreements to transfer the
Project Collateral only in accordance with the terms of this Agreement and
to preserve the collateral trust following termination of the Note
Indenture. |
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(i) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchasers under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchasers, under such Security
Agreements; |
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(j) |
Banro and the Seller shall execute and deliver an
agreement with the Purchasers and Auramet International LLC
(Auramet), creating an account in favour
of the Purchasers and setting out the terms by which Auramet will
assist the Purchasers in monetizing deliveries of Payable Gold; |
- 24 -
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(k) |
in accordance with Applicable law, Banro shall cause each
of [names of individuals redacted] and each other equity
holder of any Banro Group Entity that is an individual, but is not either
an employee of Banros counsel in Democratic Republic of Congo or an
employee of Banro to transfer for no or nominal consideration their
ownership of any such equity securities to one or more current employees
of Banros counsel in Democratic Republic of Congo or current employees of
Banro; |
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(l) |
the Seller paid all Reimbursable Expenses of the
Purchasers payable as at the Closing Date; and |
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(m) |
Banro and the Seller shall have delivered to the
Purchasers prior to the Closing Date a certificate of insurance coverage
or other evidence of acceptable insurance
coverage. |
3.4 |
Conditions Precedent in Favour of the
Seller |
On or before the Closing Date, each Purchaser will satisfy each
of the following conditions:
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(a) |
each Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for
such Purchaser, issued by the relevant Governmental Authority; |
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(b) |
each Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of such Purchaser, in
form and substance satisfactory to Banro and the Seller, acting
reasonably, as to the constating documents of such Purchaser; the
resolutions of the directors of such Purchaser, authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby; the names, positions and true signatures of the
persons authorized to sign this Agreement on behalf of such Purchaser; and
such other matters pertaining to the transactions contemplated hereby as
Banro and the Seller may reasonably require; |
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(c) |
each Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to such
Purchaser as to (i) the legal status of such Purchaser, (ii) the corporate
power and authority of such Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
each Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by such Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice
or lapse of time or both would become a Purchaser Event of
Default) has occurred and is continuing. |
- 25 -
3.5 |
Satisfaction of Conditions
Precedent |
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(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchasers, and may be waived by the Agent in
its sole discretion in whole or in part in writing. Each of the conditions
set forth in Section 3.4 is for the exclusive benefit of Banro and the
Seller, and may be waived by Banro and the Seller in their sole discretion
in whole or in part in writing. |
ARTICLE 4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
|
(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchasers shall be made without any deduction, withholding, charge or
levy on account of any Taxes, all of which shall be for the sole account
of the Seller. All Taxes, if any, as are required to be so deducted,
withheld, charged or levied by the Seller or any of its Affiliates on any
such delivery or payment, shall be paid by the Seller delivering or paying
to the Purchasers or on their behalf, in addition to such delivery or
payment, such additional delivery or payment as is necessary to ensure
that the net amount received by the Purchasers (net of any such Taxes,
including any Taxes required to be deducted, withheld, charged or levied
on any such additional amount) equals the full amount that the Purchasers
would have received had no such deduction, withholding, charge or levy
been required. |
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(b) |
If a Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.2(a) hereof, such Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.2(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of such Purchaser
and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund); provided, that the Seller,
upon the request of such Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to repay
such refund to such Governmental Authority. |
- 26 -
In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Agent, on behalf of the Purchasers, on the one hand, and the
Seller on the other hand, agree that they shall negotiate in good faith with
each other to amend this Agreement so that the other Parties and their
Affiliates are no longer adversely affected by any such enactment, revision,
implementation, amendment or interpretation, as the case may be; provided that
any amendment to this Agreement shall not have any adverse effect on the Seller
and its Affiliates on the one hand, and the Purchasers and their Affiliates on
the other hand.
Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date,
calculated and compounded monthly in arrears. Any dollar amount or Refined Gold
owing by a Party to any other Party under this Agreement may be set off against
any dollar amount or Refined Gold owed to such Party by the other Party. Any
amount of Refined Gold set off and withheld against any non-payment by a Party
shall be valued at the Gold Price as of the first trading day that such amount
of Refined Gold became payable to such Party.
ARTICLE 5
TERM
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(a) |
The term of this Agreement shall commence on the date
hereof and, subject to Sections 5.1(b) and 5.1(c), shall continue until
the date that is 40 years after the date of this Agreement (the
Initial Term) and thereafter shall automatically be
extended for successive 15 year periods (each an Additional
Term and, together with the Initial Term, the
Term), unless there has been no active mining
operations on the Properties during the last 15 years of the Initial Term
or throughout such Additional Term, as applicable, in which case this
Agreement shall terminate at the end of the Initial Term or such
Additional Term, as applicable. |
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(b) |
Notwithstanding Section 5.1(a), the Majority Purchasers
may terminate this Agreement as of the expiry of the Initial Term or
current Additional Term, as applicable, by written notice to Banro and the Seller within 10
Business Days prior to the date on which the then applicable Initial Term or
Additional Term is to expire. |
- 27 -
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(c) |
Notwithstanding Section 5.1(a) or 5.1(b), the Agent may
terminate this Agreement on 10 Business Days written notice to Banro and
the Seller if the conditions set out in Section 3.3 are not satisfied
within one year after the date of this Agreement. |
If by the expiry of the Initial Term the Seller has not sold
and delivered to the Purchasers an amount of Refined Gold sufficient to reduce
the uncredited balance of the Deposit to nil as calculated in accordance with
Section 2.4(a), then the Seller shall provide a detailed calculation of the
uncredited balance of the Deposit and shall pay such uncredited balance of the
Deposit to the Purchasers, in accordance with each Purchasers Applicable
Percentage, within 30 days after the expiry of the Initial Term.
The parties hereto agree to consider, in good faith,
opportunities for the Seller to repurchase the Payable Gold from the Purchasers
although there is no obligation on the Purchasers to sell.
ARTICLE 6
REPORTING; BOOKS AND RECORDS
6.1 |
Notice of
Information |
Prior to delivery to the Purchasers of any of the information
set out in this Article 6 or otherwise in this Agreement, Banro and the Seller
shall inform the Agent if such information would be considered material
non-public information of Banro. In such event, the Agent shall have the option,
in its sole discretion on behalf of the Purchasers, to (a) refuse to accept such
information, or (b) require that such information be either (i) publicly
disclosed within two Business Days, or (ii) where such information constitutes
scientific and technical information representing a material change to the
Namoya Project delivered at a subsequent date within 45 days together with an
updated technical report in accordance with NI 43-101, and notice of such
refusal or delayed delivery will constitute a valid waiver, or partial waiver,
as the case may be, of the obligation to deliver such information.
The Seller shall deliver to the Purchasers a Monthly Report on
or before the fifteenth day after the end of each calendar month. The Seller
shall also provide to the Purchasers on request together with the Monthly
Reports, all other relevant Namoya Project documentation or information that may
have a material impact on the Namoya Project, including the Operating Plan.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchasers:
- 28 -
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(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis,
including: |
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(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 6.3(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
6.4 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 6.3(a),
6.3(b), 6.3(c) and 6.3(e) shall be provided by the Seller to the Purchasers. For
the purposes of this Section 6.4 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
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(a) |
The PSA Entities shall keep true, complete and accurate
books and records of all of the PSA Entities operations and activities
with respect to the Namoya Project, including the mining and production of
gold therefrom and the mining, treatment, processing, milling,
transportation and sale or refining of gold therefrom. The PSA Entities
shall permit the Agent and its authorized representatives and agents to
perform audits or other reviews and examinations of its books and records
and other information relevant to the production, delivery and
determination of Produced Gold and compliance with Article 6 from time to
time at reasonable times at the Agents sole risk and expense and upon
five Business Days notice, to confirm compliance with the terms of this
Agreement, provided that unless there is a continuing Banro Event of
Default, the Agent and its authorized representatives and agents will not exercise such rights more
often than one (1) time during any calendar quarter. The Agent shall diligently
complete any audit or other examination permitted hereunder. |
- 29 -
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(b) |
Banro and the Seller shall prepare, or cause to be
prepared, technical reports on the Properties in compliance with NI 43-101
as and when required by Applicable Laws. If any technical report is
prepared on the Namoya Project, Banro and the Seller shall, subject to
compliance with Applicable Laws, provide to the Purchasers an advanced
draft copy of such technical report before it is filed on SEDAR, and in
any event not less than five (5) Business Days before it is so filed.
Banro and the Seller shall use commercially reasonable efforts to provide
to the Purchasers (i) qualified persons consents, qualified persons
certificates or other technical data, records or information pertaining to
the Properties in the possession or control of Banro and the Seller, and
(ii) copies of any technical report and cause the authors of such
technical report to have such technical report addressed directly to the
Purchasers if any of the Purchasers are required to file such technical
reports under NI 43-101. |
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(c) |
In addition, if during the Term Banro should cease to be
a reporting issuer under Applicable Law, Banro shall deliver to the
Purchasers audited financial statements of Banro and its subsidiaries on a
consolidated basis, such audit to be conducted by a nationally recognized
auditing firm. |
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchasers and their
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Namoya Project, in each case to monitor the mining and
processing operations on the Namoya Project. Provided there has been no
Banro Event of Default that is continuing, the Purchasers may avail
themselves of such right of access a maximum of twice per calendar year
(including the mill in respect thereof), and for this purpose, invitations
from Banro will not reduce the number of visits the Purchasers may
request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchasers shall have the
right to conduct an investors tour on the Namoya Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Namoya Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchasers and their invitees, and the Purchasers shall (a)
comply and request that their invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental harm
that may occur during such visit; and (c) indemnify, defend and hold Banro and
the Seller harmless from any loss, liability, damage, claim or demand by reason
of injury to the Purchasers or Banro and the Seller or any of their respective
invitees, employees, officers, directors, agents, or representatives caused by
the Purchasers exercise of its rights under this Section. |
- 30 -
ARTICLE 7
COVENANTS
7.1 |
Conduct of
Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Project Assets on a commercial basis as though
the Seller has a full economic interest in all the gold produced from the
Properties. Banro and the Seller shall ensure that (i) all cut-off grade,
short term mine planning and production decisions concerning the Namoya
Project shall be based on gold prices typical of normal industry practice
and consistent with the practices of Banro and its Affiliates as at the
date of this Agreement in connection with such decisions, and (ii) all
longer term planning and resource and reserve calculations concerning the
Namoya Project shall use gold prices based on normal industry practice and
consistent with the historical practices of Banro and its Affiliates in
connection with such planning and calculations. |
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(b) |
Subject to Section 7.1(a), all decisions regarding the
Namoya Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Namoya Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Namoya Project, and (iv) except as
provided herein, the sale of gold and terms thereof, shall be made by the
Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 7.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Namoya Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
7.2 |
Preservation of Corporate
Existence |
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(a) |
Except as permitted in Section 7.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 8.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or substantially all of its
assets to, or reorganize, reincorporate or reconstitute into or as, another
entity, or continue to any other jurisdiction unless at the time of such
consolidation, amalgamation, merger, reorganization, reincorporation,
reconstitution, Transfer, or continuance, the resulting, surviving or transferee
entity assumes in favour of the Agent and the Purchasers all the obligations of
such Party under this Agreement and any Security Agreement to which it is a
party. |
- 31 -
7.3 |
Processing/Commingling |
Banro and the Seller shall not and shall cause each of the
Banro Group Entities to not process Other Minerals through the Processing Plant
in priority to, or commingle Other Minerals with, gold mined, produced,
extracted or otherwise recovered from the Properties, unless (i) the applicable
Banro Group Entity has adopted and employs reasonable practices and procedures
for weighing, determining moisture content, sampling and assaying and
determining recovery factors (a Commingling Plan), such
Commingling Plan to ensure the division of Other Minerals and Produced Gold for
the purpose of determining the quantum of Produced Gold; (ii) the Purchasers
shall not be disadvantaged as a result of the processing of Other Minerals in
priority to, or concurrently with, Produced Gold; (iii) the Agent has approved
the Commingling Plan, such approval not to be unreasonably withheld; (iv) the
Banro Group Entity keeps all books, records, data, information and samples
required by the Commingling Plan; and (v) the Banro Group Entity enters into a
commingling agreement with the Agent, for and on behalf of the Purchasers, that
provides that there is no negative impact on the gold production attributable to
the stream as a result of the commingling. The Seller agrees to revisit the
Commingling Plan if the Agent determines that circumstances have changed, in
order to ensure that the Commingling Plan continues to provide for the accurate
measurement of gold produced from the Properties.
7.4 |
Processing
Agreements |
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(a) |
From and after the date hereof, the Seller (together with
the PSA Entities from which Produced Gold is sold) shall be a party to any
Processing Agreements and the PSA Entities party thereto shall be
responsible for delivering all gold to each Processor, in such quantity,
description and amounts and at such times and places as required under and
in accordance with each Processing Agreement. |
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(b) |
The PSA Entities shall cause all terms and conditions of
any Processing Agreements or other agreements for the sale of Produced
Gold entered into by a PSA Entity to be on commercially reasonable arms
length terms and conditions. The Seller shall provide the Agent with a
final signed copy of any such agreements within five Business Days of the
execution thereof. |
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(c) |
Banro shall take commercially reasonable steps to
enforce, and shall cause any Affiliate, to take reasonable steps to
enforce its rights and remedies under each such Processing Agreement with
respect to any breaches of the terms thereof relating to the timing and
amount of Gold Payments to be made thereunder. Banro shall notify the
Purchasers in writing when any dispute arising out of or in connection
with any such Processing Agreement is commenced in respect of Refined Gold
and shall provide the Agent with timely updates of the status of
any such dispute and the final decision and award of the court or
arbitration panel with respect to such dispute, as the case may be. |
- 32 -
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(d) |
Banro shall ensure that the final sale and delivery of
doré shall only be made to a Processor pursuant to a Processing Agreement.
For greater certainty, nothing in this Section 7.4(d) shall prohibit the
processing of Produced Gold by a PSA Entity, provided that the doré is
eventually sold to a Processor. |
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(a) |
Banro and the Seller shall maintain with reputable
insurance companies insurance with respect to the Project Assets and the
operations conducted on and in respect of the Namoya Project against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar operations and, until the Deposit
Reduction Date, shall have the Agent, on behalf of the Purchasers added as
an additional insured and loss payee in the insurance policies. |
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(b) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(c) |
When a Banro Group Entity receives payment under any
insurance policy in respect of a shipment of Produced Gold that is lost or
damaged after leaving the Namoya Project and before the risk of loss or
damage is transferred to the Processor, the Seller shall use 10% of the
amount of the Net Proceeds of any insurance payment received by the Banro
Group Entity in respect thereof to acquire Refined Gold in accordance with
Section 2.2(d) and shall sell and deliver to the Purchasers, in accordance
with each Purchasers Applicable Percentage, (without duplication to the
extent previously sold and delivered to the Purchasers by the Seller) such
amount of Refined Gold at the applicable Gold Purchase Price. |
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(d) |
Banro and the Seller shall insure the Project in such
amounts and with such coverage as is customary in the mining industry for
the construction, development and operation of the Project, including the
Processing Plant. Banro and the Seller covenant and agree that in the
event of any loss or damage that is insured prior to the date on which the
uncredited balance of the Deposit has been reduced to nil, the Seller
shall either (i) use all Net Proceeds of any insurance payment received by
the Banro Group Entity to rebuild or repair all damaged facilities forming
part of the Namoya Project, or (ii) use each Purchasers share of the Net
Proceeds of such insurance payment received by any Banro Group Entity
within 30 days after receipt of such proceeds by such Banro Group Entity,
to acquire Refined Gold in accordance with Section 2.2(d) and shall
deliver to the Purchasers, in accordance with each Purchasers Applicable
Percentage, such amount of Refined Gold, each Purchasers share being
calculated as the ratio of the fair value of each Purchasers interest in
the Namoya Project (taking into account each Purchasers Applicable
Percentage) as represented by its rights under this Agreement to the value
of Banros interests in the Namoya Project when measured by the
same criterion which establishes the value of such Purchasers
interest. A failure to agree on the foregoing proportion is arbitrable under
Section 14.1. |
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(e) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Agent at reasonable intervals
no more than once per year, furnish to the Agent a certificate setting
forth the nature and extent of all insurance maintained by or on behalf of
the PSA Entities in accordance with Section 7.5(a). Banro and the Seller
shall, upon the request of the Agent, provide the Purchasers with copies
of all insurance policies as in effect from time to time relating to the
Project Assets. |
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(f) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
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(a) |
Each Party (a Receiving Party) agrees
that it shall maintain as confidential and shall not disclose, and shall
cause its Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 15, 2014
(Confidential Information), provided that a Receiving
Party may disclose Confidential Information in the following
circumstances: |
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(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 7.6(c) and 14.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
- 34 -
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 14.1; |
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
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(v) |
with the consent of the disclosing Party; and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
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(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 7.6(a)(i) are made aware of this Section 7.6 and
comply with the provisions of this Section 7.6. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Agent will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 7.6(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
7.7 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchasers
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 7.7, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
- 35 -
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Namoya Project.
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Namoya
Project.
[Redacted]
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Agent and the
Purchasers in accordance with the terms of this Agreement. The Parties
acknowledge and agree that any breach by Banro of its obligations under this
Section would cause the Agent and the Purchasers irreparable harm for which
monetary damages alone would not be a sufficient remedy and that therefore the
Agent and the Purchasers may seek and obtain orders of specific performance,
injunctions and other equitable remedies and remedies available under civil laws
against Banro with respect thereto as a court of competent jurisdiction or an
arbitrator under Section 14.1 may see fit to grant with respect to any such
breach and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies.
ARTICLE 8
BANRO TRANSFERS AND CONTROL
8.1 |
Owner of Project
Assets |
Subject to Section 8.3 and except as provided in Section 9.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 8.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 8.1 shall not restrict any leased personal property (provided that the lessee is the Seller) or personal property
that is equipment that is obsolete or no longer in use under the Operating Plan.
- 36 -
8.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 8.3, Banro and the Seller shall
not, and shall ensure that the Namoya Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 8.3(c), holding Project Assets, does not during the Delivery Period:
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(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 8.3(c), holding Project
Assets. |
8.3 |
Permitted Transfers and Changes of
Control |
Section 8.2 shall not prohibit a Transfer or Change of Control,
if:
Transfer of the Project Asset
|
(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA
Entity: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Agent and the Purchasers all of
the Sellers and, if applicable, the other Banro Group Entities
obligations under this Agreement pursuant to an agreement in form and
substance satisfactory to the Agent, acting reasonably; |
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
9.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those entered into
pursuant to Section 9.2 |
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Agent confirms in writing that it does not reasonably
expect such Transfer or Change of Control to have a Material Adverse
Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 8.3(a)(vii)); |
Change of Control
|
(b) |
in the case of a Change of Control of Banro, the Seller,
the Namoya Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
8.3(c): |
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(i) |
the Seller or Banro shall have provided the Purchasers
with at least 30 days prior written notice of the proposed Change of
Control; |
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(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
|
(A) |
assumes in favour of the Agent and the Purchasers all of
the obligations of Banro under this Agreement, such assumption to occur by
an agreement in form and substance satisfactory to the Agent, acting
reasonably; and |
|
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|
(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
|
(iii) |
in respect of such Change of
Control: |
|
(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
|
|
|
|
(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 9.2; |
|
(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing;
and |
- 38 -
|
(v) |
the Agent confirms in writing that it does not reasonably
expect such Transfer or Change of Control to have a Material Adverse
Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 8.3(b)(v)); |
Inter-corporate Transfer
|
(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of
Banro: |
|
(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
|
(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
8.3(a)(i) through 8.3(a)(vii) are complied with mutatis mutandis;
or |
|
|
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|
(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
|
(1) |
the provisions of Sections 8.3(a)(i), 8.3(a)(iv),
8.3(a)(v) and 8.3(a)(vi) are complied with mutatis mutandis; and |
|
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|
(2) |
the Seller provides a confirmation in favour of the Agent
and the Purchasers that its obligations under this Agreement shall
continue in full force and effect despite any such
Transfer; |
Joint Ventures and Minority Dispositions
|
(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
|
(i) |
the Seller or Banro shall have provided the Purchasers
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
|
|
|
|
(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
|
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|
(iii) |
a PSA Entity is at all times the operator of the
Properties; |
- 39 -
|
(iv) |
such other person agrees in a document, or documents,
acceptable to the Agent, acting reasonably, with the PSA Entity, the Agent
and the Purchasers and any other such person to acknowledge the
obligations of the Seller under this Agreement and the Security
Agreements, including the granting to the Purchasers of all the security
interests contemplated thereunder; provided that, if such other person
acquires any legal right, title or interest in and to any of the Project
Assets (including any registered or recorded title in and to the
Properties), such person assumes on a joint and several basis with the
Seller all of the obligations and duties under this Agreement and grants
the same charges and security interests in, to and over the Project Assets
to which it acquires any legal right, title or interest, and enters into
the same Security Agreements entered into by the Seller and its
subsidiaries pursuant to Section 9.2; |
|
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(v) |
all filings have been made and all other actions have
been taken that are required in order for the Agent, for and on behalf of
the Purchasers to continue at all times following such transaction to have
the valid and perfected security interest contemplated by Section
9.2; |
|
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|
(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
|
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|
(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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|
(viii) |
the Agent confirms in writing that it does not reasonably
expect such minority interest disposition, joint venture or other similar
commercial arrangement to have a Material Adverse Effect;
or |
With Consent
|
(e) |
the Agent provides its prior written
consent; |
provided that, for greater certainty, if the Seller intends to
abandon, surrender, relinquish or let lapse any of the Properties (the
Abandonment Property), Banro shall (i) have determined,
acting commercially reasonably, that it is not economic to mine gold from the
Properties that it proposes to abandon, surrender, relinquish or let lapse, and
(ii) first give notice of such intention to the Purchasers at least 90 days in
advance of the proposed date of abandonment. If, not later than 10 days before
the proposed date of abandonment, Banro receives from the Agent written notice
that the Agent desires the Seller to convey the Abandonment Property to the
Purchasers or an assignee, Banro shall, without additional consideration, convey
the Abandonment Property in good standing, without warranty, to the Purchasers
and shall use commercially reasonable efforts to assist the Agent in acquiring
any necessary or appropriate consents or approvals to such Transfer and shall
thereafter have no further obligation to maintain the title to the Abandonment
Property and the terms of this Agreement shall cease to apply to such
Abandonment Property. If the Agent does not give such notice to Banro within the
prescribed period of time, the Seller may abandon the Abandonment Property and
shall thereafter have no further obligation to maintain the title to the
Abandonment Property; provided, however, that if the Seller or any Affiliate of
Banro reacquires a direct or indirect interest in any of the ground covered by
the Abandonment Property at any time within seven (7) years following
abandonment, the production of gold from such ground shall be subject to this
Agreement. The Seller shall give written notice to the Purchasers within ten
(10) days of any such reacquisition.
- 40 -
ARTICLE 9
SECURITY
9.1 |
Financings and
Encumbrances |
|
(a) |
During the Term, except for Permitted Indebtedness, no
PSA Entity shall incur or enter into any Indebtedness. |
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|
(b) |
Except as provided in this Article 9, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
|
(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Agent, for and on behalf of the Purchasers, in form and
substance satisfactory to the Agent, acting reasonably, guaranteeing the
performance, when due, of all PSA Obligations; and (ii) grant, as security
for the payment and performance, when due, of all PSA Obligations, to and
in favour of the Agent, for and on behalf of the Purchasers first ranking
charges and security interests (subject only to the Prior Ranking
Permitted Encumbrances) in, to and over (A) the Payable Gold, including
all proceedings thereof, and (B) the Project Collateral, the charged
amount (the Secured Amount) of such charges and
security interests with respect to the Project Collateral being initially,
the Deposit, such amount to reduce on each Delivery Date by an amount
equal to 60% of the amount that is equal to the difference between the
Gold Price on the Business Day following the Date of Delivery and the
Ongoing Price, multiplied by the number of ounces of Payable Gold
delivered on the Date of Delivery, pursuant to one or more agreements (the
Seller Security Agreements) executed by each to and in
favour of the Agent, for and on behalf of the Purchasers, in form and
substance satisfactory to the Agent, acting reasonably. |
|
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|
(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Agent, for and on behalf of the Purchasers, in
form and substance satisfactory to the Purchaser, acting reasonably,
guaranteeing the payment and performance, when due, of all PSA
Obligations; and (ii) grant, as security for its obligations under such
guarantee to and in favour of the Agent, for and on behalf of the
Purchasers, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to and
over all present and after acquired property, and in each case including all
proceeds thereof (the Group Collateral), all pursuant to one
or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Agent, acting
reasonably. |
- 41 -
|
(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and
Postponement of Claims), in favour of and in form and substance
satisfactory to the Agent, acting reasonably, that subordinates and
postpones the enforcement of any debts, liabilities and obligations of any
Banro Group Entity and the realization of any charges or security
interests to secure such claims to the obligations under the Security
Agreements and, from and after a Banro Event of Default, or any event or
circumstance which, with notice, the passage of time or both, would
constitute a Banro Event of Default, and until such Banro Event of Default
is remedied, subordinates and postpones the payment of all such debt,
liabilities and obligations (other than Permitted Distributions) to the
payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
|
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|
(d) |
If so requested in writing by the Agent, the Banro Group
Entities shall not, for so long as a Banro Event of Default, or any event
or circumstance which, with notice, the passage of time or both, would
constitute a Banro Event of Default, continues, make any Distribution
other than a Permitted Distribution. |
|
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|
(e) |
At the Agents request, Banro shall, and shall cause the
Seller (and any other Banro Group Entity from which Produced Gold is sold)
to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times, the Seller shall not, and Banro shall ensure that the Seller
does not, make any Distributions other than a Permitted Distribution from
such account if a Banro Event of Default, or event which with the giving
of notice or the passage of time or both would constitute a Banro Event of
Default, has occurred and is continuing, or if a Banro Event of Default
would occur or arise immediately after, or as a result of, making a
Distribution. |
|
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|
(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Agent may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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|
(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
- 42 -
|
(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Agent has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Agent continues to secure the PSA Obligations and with no change in the
priority thereof. The Seller shall pay all costs and expenses associated
with the foregoing including in connection with the preparation and
registration of all documentation in connection therewith that is required
by the Agent. |
9.3 |
Intercreditor
Agreement |
If, after the Deposit Reduction Date, any PSA Entity wishes to
enter into any Secured Financing or grant an Encumbrance over any PSA Collateral
to any Lenders as security for the payment or performance of any Secured
Financing, and it is the intention of such PSA Entity that such Encumbrance
modify the security interests in favour of the Agent set out in Section 9.2,
then the Agent, for and on behalf of the Purchasers, agrees to enter into an
intercreditor agreement (in each such case, an Intercreditor
Agreement) with the Lenders and the applicable PSA Entity (such
agreement to be negotiated in good faith), on the principal terms and conditions
set out in Schedule C. The Parties agree that if an Intercreditor Agreement is
not negotiated and executed within 60 days of the Purchasers receiving notice
from a PSA Entity that it intends to enter into a Secured Financing or grant on
Encumbrance, then either Party may seek to have any dispute related thereto
determined by arbitration as set out in Section 14.1.
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
9.4 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Agent and the Purchasers
shall have substantially similar access rights and obligations as provided in
Section 6.6.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
10.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Agent and the
Purchasers are entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule D to the Agent and the
Purchasers on and as of the date of this Agreement on a joint and several basis. The representations and warranties set forth
in Schedule D shall be deemed to be repeated by Banro and the Seller as of the
date of the Closing Date.
- 43 -
10.2 |
Representations and Warranties of the
Purchaser |
Each Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, on a several, and not joint or
joint and several basis, hereby makes the representations and warranties set
forth in Schedule E to Banro and the Seller on and as of the date of this
Agreement. The representations and warranties set forth in Schedule E shall be
deemed to be repeated by the Purchasers as of the date of the Closing Date.
10.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule D and
Schedule E shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
ARTICLE 11
BANRO EVENTS OF DEFAULT
11.1 |
Banro Events of Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of
Default):
|
(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchasers on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Agent
notifying the Seller of such default; |
|
|
|
|
(b) |
other than as provided in Section 11.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Agent to the PSA
Entities of written notice of such breach or default, except in respect of
the covenant set out in Section 7.10, which shall constitute a Banro Event
of Default immediately on notice thereof, or such longer period of time as
the Agent may determine in its sole discretion; |
|
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|
(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Agent to Banro and the Seller of written notice of such inaccuracy, or such longer
period of time as the Agent may determine in its sole discretion; |
- 44 -
|
(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
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|
(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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|
(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Agent notifying the PSA Entities of such
default. |
|
(a) |
If a Banro Event of Default occurs and is continuing, the
Agent shall have the right, upon written notice to Banro and the Seller at
its option and in addition to and not in substitution for any other
remedies available at law or equity, to take any or all of the following
actions: |
|
(i) |
demand all amounts and deliveries owing by the Seller to
the Purchasers; |
|
|
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|
(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 11.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including the greater of (A) the uncredited
amount of the Deposit, and (B) a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the
Purchasers hereunder, but for the occurrence of such Banro Event of
Default. The net present value calculation shall be based on an assumption
that the Project Assets are owned and operated by a person that has the
financial, operational and technical capability of a prudent owner and
operator, and shall be based on such other reasonable assumptions and forecasts as may be
necessary to make such calculation, including with respect to the applicable
discount rates to use, the applicable gold prices to use, and the reasonably
expected Payable Gold that would have been sold and delivered to the Purchasers
hereunder but for the occurrence of such Banro Event of Default (based on, among
other factors, the reserves and resources, inferred resources and potential
exploration success, the expected throughput through the Processing Plant, and
expected gold recoveries). Upon demand from the Agent, the Seller shall promptly
pay all such amounts to the Purchasers; and |
- 45 -
|
(iii) |
enforce the PSA Security. |
|
(b) |
The Parties hereby acknowledge and agree that: (i) the
Agent and the Purchasers will be damaged by a Banro Event of Default; (ii)
it would be impracticable or extremely difficult to fix the actual damages
resulting from a Banro Event of Default; (iii) any sums payable in
accordance with Section 11.2(a) with respect to a Banro Event of Default
are in the nature of liquidated damages, not a penalty, and are fair and
reasonable; and (iv) the amount payable in accordance with Section 11.2(a)
or with respect to a Banro Event of Default represents a reasonable
estimate of fair compensation for the losses that may reasonably be
anticipated from such Banro Event of Default in full and final
satisfaction of all amounts owed in respect of such Banro Event of
Default. |
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(c) |
For greater certainty, if the Agent, for and on behalf of
the Purchasers does not exercise its right under Section 11.2(a)(ii), the
obligations of Banro and the Seller or any successors shall continue in
full force and effect. |
ARTICLE 12
PURCHASER EVENTS OF DEFAULT
12.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of
Default):
|
(a) |
a Purchaser fails to pay a portion of the Deposit in
accordance with Article 3 within (3) three Business Days of receipt of
notice from the Seller notifying such Purchaser of such default (a
Deposit Default); |
|
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|
(b) |
a Purchaser fails to pay for Payable Gold delivered to
the Purchaser in accordance with Section 2.4 within (3) three Business
Days of receipt of notice from the Seller notifying such Purchaser of such
default (a Purchaser Payment Default); |
|
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|
(c) |
a Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect (other than a breach or default of the covenants or obligations
referenced in Sections 12.1(a) or (b) above), and
such breach or default is not remedied within a period of 30 days
following delivery by the Seller to such Purchaser of written notice of such
breach or default, or such longer period of time as the Seller may determine in
its sole discretion; or |
- 46 -
|
(d) |
any of the representations or warranties given by a
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to such Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
|
(a) |
If there should occur a Deposit Default, the
non-defaulting Purchasers may deliver the Deposit amount that is the
subject of the Deposit Default, and to the extent they choose to do so,
such funding Purchasers Applicable Percentage will be adjusted
accordingly. If all of the conditions precedents set out in Section 3.3
have been satisfied and a Deposit Default in respect of all of the Deposit
occurs and is continuing and the Purchasers fail to cure the Deposit
Default in full within 90 days of written notice from the Seller of such
default, then the Seller may elect to at any time thereafter so long as
the Purchasers have not already cured the Deposit Default, to terminate
the Agreement. |
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(b) |
In addition to the PSA Entities rights and remedies
available at law or in equity (other than any right at law or in equity to
terminate this Agreement), if a Purchaser Payment Default occurs and is
continuing, the Seller shall have the right, upon written notice to the
defaulting Purchaser, at its option, to suspend obligations under Section
2.2 solely in respect of the defaulting Purchaser. If the Deposit is
reduced to nil and following the Deposit Reduction Date, the defaulting
Purchaser fails to cure the Purchaser Payment Default in full within 30
days, then the Seller may elect at any time thereafter so long as such
defaulting Purchaser has not already cured the Purchaser Payment Default,
to terminate the Agreement solely with respect to such defaulting
Purchaser and thereupon all of the Sellers obligations hereunder with
respect to such defaulting Purchaser shall thereafter be terminated
without prejudice to any other right or remedy it may have against such
defaulting Purchaser. For greater certainty, the PSA Obligations shall
continue unaffected in respect of the non-defaulting Purchasers. |
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|
(c) |
If a Purchaser Event of Default under Sections12.1(c) or
12.1(d) has occurred and is continuing, then the PSA Entities shall have
no right to terminate this Agreement, but shall be entitled to all other
remedies available to it at law or in equity against the
Purchaser. |
- 47 -
ARTICLE 13
THE AGENT
The Parties agree that the rights and obligations of the Agent
and of the Purchasers with respect to the Agent shall be as set out in Schedule
G.
ARTICLE 14
GENERAL
14.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officers of each of the disputing parties for prompt resolution.
Any such dispute, controversy or claim which cannot be resolved by the chief
executive officers within 15 days after it has been so referred to them
hereunder, including the determination of the scope or applicability of this
Agreement to arbitrate, shall be settled by binding arbitration in accordance
with the rules for arbitration set out in Schedule F. The determination of such
arbitrator shall be final and binding upon the Parties and there shall be no
appeals from any determination of the arbitrator. Judgment on the award may be
entered in any court having jurisdiction. This Section 14.1 shall not preclude
the Parties from seeking provisional remedies in aid of arbitration from a court
of competent jurisdiction. The Parties covenant and agree that they shall
conduct all aspects of such arbitration having regard at all times to expediting
the final resolution of such arbitration.
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
14.3 |
Reimbursement of
Expenses |
|
(a) |
The Seller and Banro shall pay to the Agent and the
Purchasers all reasonable costs and expenses (including all reasonable
legal fees and disbursements of counsel) incurred by the Agent and the
Purchasers in connection with this Agreement and the other related
transactions, including: |
|
(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
|
|
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|
(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Agent and the Purchasers and any on-site inspections by the Agent and the
Purchasers or its representatives; |
- 48 -
|
(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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|
(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated thereunder; |
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|
(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Agent and the Purchasers at law
or in equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
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(viii) |
the incorporation and organization of the Agent, as well
as the initial issuances of notes or other investment instruments required
to capitalize the Agent with the Deposit; and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Agent, including fees and expenses related to fiscal
and collateral agents, valuation, tax reporting and
audit, |
(collectively, the
Reimbursable Expenses).
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(b) |
The obligations of the Seller under this Section 14.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
14.4 |
Termination; Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 7.6, 7.10, 11.2, 12.2,
14.1, 14.7, 14.9, Schedule F and Schedule G and such other provisions of this
Agreement as are required to give effect thereto.
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Agent or any Purchaser on the one hand and any Banro Group Entity on the
other hand.
- 49 -
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Agent or any Purchaser on the one hand and
any Banro Group Entity on the other hand.
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
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(a) |
If to either Banro or the Seller, to: |
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Banro Corporation |
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1 First Canadian Place |
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Suite 7070, 100 King Street West |
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Toronto, Ontario, M5X 1E3,
Canada |
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Attention: Chief Financial Officer |
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Telecopier No.: 416-366-7722 |
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with a copy to: |
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Norton Rose Fulbright Canada LLP |
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Royal Bank Plaza, South Tower, Suite
3800 |
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200 Bay Street |
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Toronto, Ontario, M5J 2Z4, Canada |
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Attention: Mike Moher |
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Telecopier No.: 416- 216-3930 |
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(b) |
If to the Agent or any Purchaser, to: |
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[Redacted] |
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with a copy to: |
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Goodmans LLP |
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333 Bay Street, Suite 3400 |
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Toronto, Ontario M5H 2S7 |
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Attention: Kari MacKay |
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Telecopier No.: 416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
- 51 -
14.13 |
Debt Sharing
Confirmations |
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(a) |
The Purchasers hereby agree, for the benefit of all
holders of each other existing and future Series of Priority Lien Debt and
each existing and future Priority Debt Representative, that all Priority
Lien Obligations will be and are secured equally and ratably by all Liens
(as defined in the Collateral Trust Agreement) at any time granted by
Banro or any Obligor (as defined in the Collateral Trust Agreement) to
secure the obligations in respect of the Priority Notes, whether or not
upon property otherwise constituting Collateral (as defined in the
Collateral Trust Agreement), that all such Liens will be enforceable by
the Collateral Agent for the benefit of all holders of Priority Lien
Obligations equally and ratably (except that the Priority Stream
Obligations (as defined in the Collateral Trust Agreement) shall be paid
in priority to the other Priority Lien Obligations in accordance with
Section 3.4(a) of the Collateral Trust Agreement), and that the Purchasers
are bound by the provisions in the Collateral Trust Agreement relating to
the order of application of proceeds from enforcement of such Liens, and
consent to and direct the Collateral Agent to perform its obligations
under the Collateral Trust Agreement. |
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(b) |
The Purchasers hereby agree, for the benefit of all
holders of each other existing and future Series of Parity Lien Debt and
each existing and future Parity Debt Representative, that all Parity Lien
Obligations will be and are secured equally and ratably by all Liens at
any time granted by Banro or any Obligor to secure the obligations in
respect of the Initial Parity Notes, whether or not upon property
otherwise constituting Collateral, that all such Liens will be enforceable
by the Collateral Agent for the benefit of all holders of Parity Lien
Obligations equally and ratably, and that the Purchasers are bound by the
provisions in the Collateral Trust Agreement relating to the order of
application of proceeds from enforcement of such Liens, and consent to and
direct the Collateral Agent to perform its obligations under the
Collateral Trust Agreement. |
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it (except that the Agent may provide a waiver by and
on behalf of the Purchasers), and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
- 52 -
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
Each Purchaser shall be entitled at any time and from
time to time to Transfer any of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 8.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Agent. In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
Each of the Parties agrees that, upon execution and delivery of
a joinder agreement in a form satisfactory to the Parties, acting reasonably,
another person shall, without any further action on the part of Parties other
than such person, automatically be added as a Party to this Agreement in the
manner contemplated by such joinder agreement.
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
NAMOYA GSA HOLDINGS |
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Per: |
(signed) |
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Name: |
[Redacted] |
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Title: |
[Redacted] |
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BANRO CORPORATION |
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Per: |
Richard Brissenden |
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Name: |
Richard Brissenden |
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Title: |
Chairman of the Board |
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NAMOYA MINING S.A. |
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Per: |
Desire Sangara |
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Name: |
Desire Sangara |
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Title: |
Chairman of the Board |
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Any other Purchaser when joined hereto in accordance
with the terms
hereof. |
Signature Page to Namoya Gold Purchase and Sale
Agreement
SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. Dated as
of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY AGREEMENTS
This is Schedule B to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. Dated as
of February 27, 2015
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Joinder and sharing confirmations as a Priority
Lien and recognizing priority of Payable Gold obligations |
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Joinder and sharing confirmation as a Parity
Lien |
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Guarantees contemplated by Section 9.2(b)
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Assignment, Subordination and Postponement of
Claims contemplated by Section 9.2(c) |
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Pledge of accounts with Auramet International
LLC, if any |
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Pledge of accounts with any Processor
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SCHEDULE C
INTERCREDITOR PRINCIPLES
This is Schedule C to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. Dated as
of February 27, 2015
[Redacted]
SCHEDULE D
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. dated as
of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchasers as
follows:
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(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non-assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Namoya (Barbados) Limited; |
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(f) |
the authorized share capital of Namoya (Barbados) Limited
consists of an unlimited number of common shares and 20,000 preferred
shares, of which, as of the date hereof, (i) only 1,200,000 common shares are issued
and outstanding as fully paid and non-assessable shares in the capital of Namoya
(Barbados) Limited and are legally and beneficially owned as to 100% by Banro
Group (Barbados) Limited, and (ii) only 20,000 preferred shares are issued and
outstanding as fully paid and non-assessable shares in the capital of Namoya
(Barbados) Limited and are legally and beneficially owned as to 100% by
investment funds managed by Gramercy Funds Management LLC; |
- 2 -
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right,
title or interest in or to, the Namoya Project, the Properties, the
Project Assets or the gold produced from the Properties; |
- 3 -
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Namoya Project, the Properties and all
other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Namoya Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Namoya Project, the Properties and all
other properties of the Banro Group Entities, other than those that are
not necessary on the date this representation and warranty is given and
are expected to be obtained in the ordinary course of business by the time
they are necessary, where the failure to have or obtain such Approvals
would not reasonably be expected to have a Material Adverse Effect, and
there are no facts or circumstances that might reasonably be expected to
adversely affect the issuance or obtaining of any such material
Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Namoya Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Namoya Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
- 4 -
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Namoya
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Namoya Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Namoya Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the |
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Bribery Act (United Kingdom)). Without limiting
the generality of the foregoing, each Banro Group Entity is in material
compliance with all applicable Environmental Laws, and there are no
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending or, to the best of its knowledge, threatened against
or affecting any Banro Group Entity with respect to the ownership, use,
maintenance and operation of any of the Namoya Project, the Properties and
the Project Assets relating to any applicable Environmental Laws, where
any adverse determination with respect thereto or liability imposed
therein could reasonably be expected to result in a Material Adverse
Effect and such adverse determination is reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Namoya Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Namoya Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with
the Toronto Stock Exchange (all such documents filed prior to the date of
execution of this Agreement, the Public Disclosure
Documents) since January 1, 2013. As of the effective date of
such Public Disclosure Documents, to its knowledge, none of the Public
Disclosure Documents contain any untrue statement of material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading, it being acknowledged that if there is
any inconsistency between two or more documents comprising the
Public Disclosure Documents regard shall be had to the last filed document. All
of the Public Disclosure Documents, as of their respective effective dates (and
as of the effective dates of any amendments thereto), complied as to both form
and content in all material respects with the requirements of applicable
Securities Laws or were amended on a timely basis to correct deficiencies
identified by securities commissions or similar securities regulatory
authorities. Banro has not filed any confidential material change report with
any securities regulatory authority that at the date of execution of this
Agreement remains confidential. There is no material adverse change concerning
Banro which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this Agreement; |
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Namoya Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements referred to in the
first sentence of paragraph (y) above or in the notes thereto, other than (i)
liabilities or obligations arising in the ordinary course of business since
September 30, 2014 or publicly announced by Banro, or obligations to Auramet
International LLC pursuant to the gold sale arrangements with Auramet
International LLC; |
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock-out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America
(Foreign Company Plan) that is intended to qualify for special tax treatment meets all
of the requirements for such treatment and has obtained all necessary approvals
of all relevant Governmental Authorities. No Foreign Company Plan has any
unfunded liabilities, determined in accordance with generally accepted
accounting principles, that have not been fully accrued on Banros financial
statements or that will not be fully offset by insurance. All Foreign Company
Plans are registered where required by, and are in good standing under, all
Applicable Laws. For purposes of this paragraph, Employee Benefit
Plan means any employee benefit plan, program, policy or arrangement
sponsored, maintained or contributed to by a Banro Group Entity or any of their
respective Affiliates or with respect to which the Seller, any Banro Group
Entity or any of their respective Affiliates has any liability or obligation; |
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Namoya Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE E
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule E to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. dated as
of February 27, 2015
Each Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is a company duly incorporated and validly existing
under the laws of its jurisdiction and is up to date in respect of all
filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE F
DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. dated as
of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this Agreement. A
reference to Party means the Agent on behalf of the Purchasers on the one hand
and any PSA Entity on the other hand.
1. |
Initiation of Arbitration
Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the
other Party (the Respondent) a statement of claim setting out
in sufficient detail the facts and any contentions of law on which it relies,
and the relief that it claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of
reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have
not previously been submitted by any Party, and (where practicable) by any
relevant samples. |
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration
hearing. |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
5. |
Jurisdiction and Powers of the
Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
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(i) |
determine any question of law arising in the
arbitration; |
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(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to only that information so
required to be disclosed and shall have availed itself of the full benefits of
any laws, rules, regulations or contractual rights as to disclosure on a
confidential basis to which it may be entitled. |
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
SCHEDULE G
AGENT
This is Schedule G to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A., dated as
of February 27, 2015
[Redacted]
Execution Version
SUPPORT AGREEMENT
THIS AGREEMENT made the 27th
day of February, 2015.
AMONG:
GRAMERCY FUNDS MANAGEMENT LLC, a
company existing under the laws of Delaware (Gramercy), in its capacity
as investment manager to certain investment funds and accounts (the
Noteholder)
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BANRO CORPORATION,
a
corporation existing under the laws of Canada (the Company)
(each, a Party, and
collectively, the Parties)
WHEREAS the Noteholder is the
beneficial owner of, or has control or direction over, certain 10% senior
secured notes of the Company due 2017 (the Notes), as more particularly
described herein;
AND WHEREAS in connection
with the proposed transactions with Gramercy in favour of the Company (the
Transaction) consisting of two forward sales agreements (the
Forward Sales Agreements, and the first Forward Sales Agreement to be
entered into, the First Forward Sales Agreement) and a life of mine
streaming agreement (the Streaming Agreement, and together with the
Forward Sales Agreements, the Transaction Agreements) attached hereto
as Schedule A, the Company wishes to make certain amendments (the Amendments)
to (i) the indenture dated March 2, 2012, as supplemented by a supplemental
indenture dated as of April 23, 2013, (the Indenture) among the
Company, Guarantors (as defined therein) and Equity Financial Trust Company,
pursuant to which the Notes were issued, as set out in the form of amending
agreement attached hereto as Schedule B, and (ii) the collateral trust agreement
dated March 2, 2012 among the Company, Initial Guarantors (as defined therein),
Equity Financial Trust Company, as Indenture Trustee and Collateral Agent (as
defined therein), Ecobank SARL and Gramercy, as set out in the form of agreement
attached hereto as Schedule B, in order to permit the Transaction to
proceed;
AND WHEREAS in
anticipation of the Company seeking a consent, vote or other approval in respect
of the Amendments (the Consent Solicitation), this Agreement sets out
the terms and conditions of the agreement of the Noteholder to provide its
consent, in respect of the Notes set out in Schedule C (the Owned
Notes), to the Amendments;
AND WHEREAS
contemporaneously with the execution and delivery of this Support Agreement
to the Company (i) the Company has entered into the Transaction Agreements, (ii)
has received US$20 million pursuant to the First Forward Sales Agreement; and
(iii) the Company is announcing the Transaction;
NOW THEREFORE this
Agreement witnesses that, in consideration of the premises and the covenants and
agreement herein contained, the Parties hereto agree as follows:
ARTICLE 1
CERTAIN
COVENANTS OF THE NOTEHOLDER
(a) Agreement to
Consent or Vote in Favour. Subject to the satisfaction (or waiver in
the sole discretion of the Noteholder) of the conditions set forth in Section
1.1(b), the Noteholder agrees that it shall, in respect of the Owned Notes
beneficially owned by such Noteholder or over which it has control or direction
over, consent to or vote in favour of (i) the Amendments, and (ii) such other
non-material administrative amendments to the Indenture items necessary to
implement the consummation of the Amendments, provided that this Agreement shall
not extend to any non-material administrative amendments which would require
consent under Section 9.02 of the Indenture. Prior to termination of this
Agreement, the Noteholder shall not enter into any voting agreement with any
Person or entity with respect to any of the Owned Notes, grant any Person or
entity any proxy (revocable or irrevocable) or power of attorney with respect to
any of the Owned Notes, deposit any Owned Notes in a voting trust, or otherwise
enter into any agreement with any person or entity limiting the Noteholders
legal power, authority, or right to consent to or vote, in respect of the Owned
Notes, the Amendments. If the Noteholder is the beneficial owner, but not the
registered holder, of any of the Owned Notes, the Noteholder agrees to take all
actions necessary to cause the registered holder and any nominees thereof to
consent or vote, in respect of all such Owned Notes, in accordance with this
Section 1.1.
(b) Conditions to
Providing Consent. The Agreement of the Noteholder to provide its
consent is subject to the satisfaction of the following conditions:
(i) the Transaction Agreements
shall not have been amended in any manner which is adverse to the Noteholder in
any material respect (including, without limitation, a change to the use of
proceeds described therein);
(ii) all regulatory and third
party consents and approvals to effect the Amendments and complete the
Transaction have been received and remain in full force and effect;
(iii) the representations and
warranties of the Company herein shall be true and correct;
(iv) there shall have occurred no default by the Company under
this Agreement;
(v) there shall have occurred no
Default (as defined in the Indenture) or Event of Default (as defined in the
Indenture) pursuant to the Indenture; and
(vi) BlackRock Gold and General
Fund, Old Mutual BlackRock Gold and General Fund, and BlackRock World Mining
Trust PLC shall have provided its consent or exercised its vote in favour of the
Amendments and the other amendments described in Section 1.1(a) in respect of
its Notes.
1.2 Restrictions on Transfer. Prior to
termination of this Agreement, the Noteholder agrees to not, directly or
indirectly, Transfer (as defined below), or enter into any agreement, option or
other arrangement (including any profit-sharing arrangement), whether or not in
writing, with respect to the Transfer of any of the Owned Notes (or any rights
in respect thereof, including, but not limited to, the right to vote) held by
such Noteholder as of the date hereof to any person, other than an affiliate or
subsidiary or a person over which the Noteholder has direction or control over
or to a transferee that has provided consent to the Company on the same terms as
this Agreement. For the purposes of this Agreement, Transfer means,
with respect to any security, any direct or indirect assignment, sale, transfer,
tender, exchange, pledge, hypothecation, or the grant, creation, or suffrage of
a lien in or upon, or the gift, grant, or placement in trust or other
disposition of such security or any right, title, or interest therein (including
any right or power to vote to which the holder thereof may be entitled, whether
such right or power is granted by proxy or otherwise), except with respect to
security generally applying to its investments which does not adversely affect
such Noteholders ability to perform its obligations under this Agreement.
1.3 Revocation of Prior Proxies.
2
The Noteholder hereby revokes any operative proxies heretofore
given by it in respect of the Owned Notes.
1.4 |
Other Covenants. The Noteholder
agrees: |
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(a) |
that if the Noteholder acquires any additional Notes
following the date hereof over which the Noteholder has the power to vote,
the Noteholder shall vote such Notes or provide a consent to the
Amendments in the same manner as the Owned Notes; |
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(b) |
not to take any other action intended to, or reasonably
be expected to result in, the Amendments not being approved or not
becoming effective by the Noteholder as contemplated by this
Agreement; |
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(c) |
not to oppose in any manner the treatment of any Owned
Notes pursuant to the Amendments; and |
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(d) |
not to requisition or join in the requisition of any
meeting of holders of Notes for purposes of opposing the
Amendments. |
1.5 No Ownership Interest. Nothing contained in
this Agreement shall be deemed to vest in the Company any direct or indirect
economic benefit or ownership or incidence of ownership of, or relating to, any
Owned Notes. All rights, ownership and economic benefits of and relating to the
Owned Notes shall remain vested in and belong to the Noteholder, and the Company
shall have no authority to exercise any power or authority to direct the
Noteholder in the voting of any of the Owned Notes, except as otherwise provided
herein, or in the performance of the Noteholders duties or responsibilities as
a holder of Notes.
ARTICLE
2
COVENANTS OF THE COMPANY
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2.1 |
The Company hereby covenants and agrees for the
benefit of the Noteholder: |
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(a) |
it shall commence and complete the Consent
Solicitation as promptly as reasonably practicable after the date hereof;
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(b) |
it shall do all things that are reasonably
necessary and appropriate in furtherance of, and to consummate and make
effective the Supplemental Indenture containing the Amendments after
completion of the Consent Solicitation and receipt of the requisite
consents to such Amendments in accordance with Section 9.02 of the
Indenture; |
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(c) |
the proceeds of the Transaction shall be used
by the Company in accordance with the use of the proceeds as described in
the Transaction Agreements; |
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(d) |
the additional Priority Lien Debt and Priority
Lien Debt permitted to be incurred as a result of the Amendments shall
not, without the prior written consent of the Noteholder, be incurred
except to complete the Transaction in accordance with the provisions of
the Transaction Agreements; |
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(e) |
it shall not make any alterations to the
Amendments or the Transaction Agreements which are adverse to the
Noteholder in any material respect (including, without limitation, a
change to the use of proceeds described therein) without the consent of
the Noteholder; |
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(f) |
it shall provide the Noteholder with copies of all
alterations to the Amendments or the Transaction Agreements, including,
without limitation, any additional proposed amendments to the Indenture,
and the final Amendments; and |
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(g) |
to pay all reasonable fees and expenses incurred by the
Noteholder in connection with the negotiation and performance of this
Agreement, including but not limited to reviewing the Term Sheet and the
Transaction Agreements, whether or not the Transaction is completed or the
Amendments are effected. |
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE NOTEHOLDER
3.1 Representations and
Warranties. The Noteholder represents, warrants and, where
applicable, covenants to the Company, as follows and acknowledges that the
Company is relying upon these representations, warranties and covenants in
connection with the entering into of this Agreement:
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(a) |
the Noteholder has been duly formed and is validly
existing under the laws of its jurisdiction of organization and has all
necessary power and authority to execute and deliver this Agreement and to
perform its obligations hereunder; |
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(b) |
the execution and delivery of this Agreement by the
Noteholder and the performance by it of its obligations hereunder have
been duly authorized and no other proceedings on its part are necessary to
authorize this Agreement and the performance of its obligations
hereunder; |
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(c) |
this Agreement has been duly executed and delivered by
the Noteholder and, assuming the due authorization, execution and delivery
by the Company, constitutes a legal, valid and binding obligation,
enforceable by the Company against the Noteholder in accordance with its
terms, subject, however, to limitations imposed by law in connection with
bankruptcy, insolvency or similar proceedings and to the extent that the
award of equitable remedies such as specific performance and injunction is
within the discretion of the court from which they are sought; |
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(d) |
the Noteholder is the sole registered and/or beneficial
owner of, or exercises control or direction over, the Owned Notes, and has
no legal or beneficial interest in, or control or direction over, any
other Notes; |
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(e) |
the Noteholder has the sole right to vote all the Owned
Notes; |
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(f) |
no person or entity has any agreement or option, or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option, for the purchase, acquisition or Transfer
from the Noteholder of any of the Owned Notes or any interest therein or
right thereto; |
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(g) |
none of the Owned Notes are subject to any power of
attorney or attorney in fact, proxy, voting trust, vote pooling or other
agreement, or any right or privilege capable of becoming an agreement,
with respect to the right to vote, call meetings of holders of the Notes
or give consents or approvals of any kind; |
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(h) |
none of the execution and delivery by the Noteholder of
this Agreement or the completion or performance of the transactions
contemplated hereby or the compliance by the Noteholder with the
Noteholder's obligations hereunder will result in a breach of (i) the
constating documents of the Noteholder; or (ii) any agreement or
instrument to which the Noteholder is a party or by which the Noteholder
or any of its property or assets is bound excluding for greater certainty
any agreement to which the Company is a party; |
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(i) |
the Noteholder acknowledges that it has had the
opportunity to obtain independent legal advice with respect to this
Agreement; |
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(j) |
(i) the only Notes owned, directly or indirectly, or over
which control or direction is exercised, by the Noteholder are those
listed on Schedule C to this Agreement and (ii) the Noteholder has no
agreement or option, right or privilege (whether by law, pre- emptive or
contractual) capable of becoming an agreement or option, for the purchase
or acquisition by the Noteholder or transfer to the Noteholder of
additional Notes; and |
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(k) |
there are no proceedings in progress, pending or
threatened, in each case to the knowledge of the Noteholder, against the
Noteholder that would adversely affect in any manner the ability of the
Noteholder to enter into this Agreement and to perform its obligations
hereunder. |
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Representations and
Warranties. The Company represents, warrants and, where applicable,
covenants to the Noteholder as follows and acknowledges that the Noteholder is
relying upon these representations, warranties and covenants in connection with
the entering into of this Agreement:
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(a) |
the Company has been duly formed and is validly existing
under the laws of its jurisdiction of organization and has all necessary
power and authority to execute and deliver this Agreement and to perform
its obligations hereunder; |
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(b) |
the execution and delivery of this Agreement by the
Company and the performance by it of its obligations hereunder have been
duly authorized and no other proceedings on its part are necessary to
authorize this Agreement and the performance of its obligations
hereunder; |
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(c) |
this Agreement has been duly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by
the Noteholder, constitutes a legal, valid and binding obligation,
enforceable by the Noteholder against the Company in accordance with its
terms, subject, however, to limitations imposed by law in connection with
bankruptcy, insolvency or similar proceedings and to the extent that the
award of equitable remedies such as specific performance and injunction is
within the discretion of the court from which they are sought; |
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(d) |
none of the execution and delivery by the Company of this
Agreement or the completion or performance of the transactions
contemplated hereby or the compliance by the Company with its obligations
hereunder will result in a breach of (i) the constating documents of
Company; (ii) any agreement or instrument to which the Company is a party
or by which the Company or any of its property or assets is bound; (iii)
any judgment, decree, order or award of any governmental entity; or (iv)
any applicable laws relevant in the context of the Amendments or this
Agreement; |
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(e) |
there are no proceedings in progress or pending or, to
the knowledge of the Company, threatened against the Company that would
adversely affect in any manner the ability of the Company to enter into
this Agreement and to perform its obligations hereunder; |
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(f) |
Schedule D sets out the regulatory and corporate
approvals required on behalf of the Company to: (i) effect the Amendments;
and (ii) complete the Transaction; |
5
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(g) |
as of the date hereof, there is an aggregate of US$175
million principal amount of Notes issued and outstanding; |
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(h) |
no shareholder approval is required in connection with
this Agreement, the Transaction Agreements, the Amendments or the
Transaction; and |
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(i) |
the Company has not entered into any other agreements in
connection with the Transaction, other than the Transaction Agreements,
this Agreement (and including for greater certainty, an agreement in
similar form executed between the Company and Gramercy) and any other
agreements contemplated herein or therein. |
ARTICLE 5
TERMINATION
5.1 |
Termination. This Agreement shall terminate upon
the earliest of: |
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(a) |
written agreement of the Parties to terminate the
Agreement; or |
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(b) |
the effective date of the Amendments; or |
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(c) |
April 30, 2015; or |
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(d) |
notice to the Company by the Noteholder
if: |
(i) any of the representations
and warranties of the Company in this Agreement is untrue or inaccurate in any
material respect;
(ii) the Company has not complied
in all material respects with its covenants hereunder; or
(iii) an Event of Default has occurred under the Indenture.
Notwithstanding the foregoing, Section
2.1(c) shall survive termination of this Agreement.
ARTICLE 6
GENERAL
6.1 Further Assurances. The Parties shall, from
time to time, promptly execute and deliver all such further documents and
instruments and do all such acts and things as the other Party may reasonably
require to effectively carry out the intent of this Agreement.
6.2 Disclosure. The Noteholder and the
Company:
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(a) |
agrees except as set forth in (b) below or as required by
applicable laws or by any governmental entity, (i) no Party shall make any
public announcement or statement with respect to this Agreement without
the approval of the other (including as to form and content of such
announcement or statement), which shall not be unreasonably withheld or
delayed, and (ii) each Party agrees to consult with the other prior to
making any public announcement or statement with respect to this
Agreement, subject to the overriding obligations of applicable laws;
and |
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(b) |
consents to the disclosure of the substance of this
Agreement in (i) a consent solicitation statement prepared in connection
with the Consent Solicitation, and (ii) any press release of the Company
relating to the Amendments or a Consent Solicitation, provided that all references to the Noteholder in any such
disclosure shall be in a form satisfactory to the
Noteholder. |
6
6.3 Amendment. This Agreement may only be amended by
mutual written agreement of the Parties.
6.4 Assignability. This Agreement shall not be
assignable by any Party without the prior written consent of the other Party,
other than by the Company to one of its direct or indirect subsidiaries and by
the Noteholder as set forth in Section 1.2. This Agreement shall be binding upon
and shall enure to the benefit of and be enforceable by each of the Parties and
their respective successors and permitted assigns.
6.5 Time. Time shall be of the essence of this
Agreement.
6.6 Notices. Any notice, or other communication given
regarding the matters contemplated by this Agreement must be in writing, sent by
personal delivery, courier or facsimile (but not by electronic mail) and
addressed:
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to the Company at: |
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1 First Canadian Place, Suite 7070 |
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100 King St. W. |
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PO Box 419 |
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Toronto, Ontario M5X 1E3 |
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Attention: Chief Financial Officer |
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Facsimile: (416) 366-7722 |
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E-mail: kjennings@banro.com |
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with a copy (which shall not constitute notice) to:
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Norton Rose Fulbright Canada LLP |
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Suite 3800 |
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Royal Bank Plaza, South Tower |
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200 Bay Street |
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PO Box 84 |
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Toronto ON M5J 2Z4 |
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Attention: Richard Lachcik |
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Facsimile: (416) 216-3930 |
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Email: Richard.Lachcik@nortonrosefulbright.com
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(a) |
to the Noteholder at: |
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[Redacted] |
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with a copy (which shall not constitute notice)
to: |
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Goodmans LLP |
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Bay Adelaide Centre |
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333 Bay Street, Suite 3400 |
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Toronto, Ontario M5H 2S7 |
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Attention: Brenda J. Gosselin |
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Facsimile: (416) 979-1234 |
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Email:
bgosselin@goodmans.ca |
Any notice or other communication
is deemed to be given and received (i) if sent by personal delivery or same day
courier, on the date of delivery if it is a Business Day (as defined below) and
the delivery was made prior to 4:00 p.m. (local time in place of receipt) and
otherwise on the next Business Day, (ii) if sent by overnight courier, on the
next Business Day, or (iii) if sent by facsimile, on the Business Day following
the date of confirmation of transmission by the originating facsimile. For the
purposes of this Agreement, Business Day means each day that is not a
Saturday, Sunday or other day on which banking institutions in Toronto, Canada
are authorized or required by law to close.
6.7 Governing Law.
(a) This Agreement will be
governed by and interpreted and enforced in accordance with the laws of the
Province of Ontario and the federal laws of Canada applicable therein.
(b) Each Party irrevocably
attorns and submits to the non-exclusive jurisdiction of the Ontario courts
situated in the City of Toronto and waives objection to the venue of any
proceeding in such court or that such court provides an inconvenient forum.
6.8 Remedies. The Parties agree and acknowledge that:
(i) money damages would not be a sufficient remedy for any breach of this
Agreement; (ii) in addition to any other remedies at law or in equity that the
aggrieved Party may have, such Party shall be entitled to seek equitable relief,
including injunction and specific performance, in addition to any other remedies
available to such Party, in the event of any breach of the provisions of this
Agreement by the other Party; and (iii) any Party that is a defendant or
respondent shall waive any requirement for the securing or posting of any bond
in connection with such remedy. The prevailing Party shall be reimbursed for all
costs and expenses, including reasonable legal fees, incurred in enforcing the
other Party's obligations hereunder. Such remedies shall not be deemed to be
exclusive remedies for the breach of this Agreement but shall be in addition to
all other remedies at law or in equity.
6.9 Severability. If any provision of this Agreement is
determined to be illegal, invalid or unenforceable by any court of competent
jurisdiction, that provision will be severed from this Agreement
and the remaining provisions shall remain in full force
and effect. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the Parties shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
Parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
8
6.10 Waiver. No waiver of any of the provisions of this
Agreement will constitute a waiver of any other provision (whether or not
similar). No waiver will be binding unless executed in writing by the Party to
be bound by the waiver. A Partys failure or delay in exercising any right under
this Agreement will not operate as a waiver of that right. A single or partial
exercise of any right will not preclude a Party from any other or further
exercise of that right or the exercise of any other right.
6.11 Rules of Construction. The Parties waive the application
of any law or rule of construction providing that ambiguities in any agreement
or other document shall be construed against the Party drafting such agreement
or other document.
6.12 Entire Agreement. This Agreement constitutes the entire
agreement between the Parties with respect to the transactions contemplated by
this Agreement and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of the Parties. There are no
representations, warranties, covenants, conditions or other agreements, express
or implied, collateral, statutory or otherwise, between the Parties in
connection with the subject matter of this Agreement, except as specifically set
forth in this Agreement. The Parties have not relied and are not relying on any
other information, discussion or understanding in entering into and completing
the transactions contemplated by this Agreement.
6.13 Counterparties. This Agreement may be executed in any
number of counterparts (including counterparts by facsimile) and all such
counterparts taken together shall be deemed to constitute one and the same
instrument. The Parties shall be entitled to rely upon delivery of an executed
facsimile or similar executed electronic copy of this Agreement, and such
facsimile or similar executed electronic copy shall be legally effective to
create a valid and binding agreement between the Parties.
[Remainder of this page intentionally left
blank.]
9
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the date first written above.
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BANRO CORPORATION |
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By: |
R.W.
Brissenden |
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Name: R.W. Brissenden |
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Title: Chairman of the
Board |
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GRAMERCY FUNDS MANAGEMENT LLC
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By: |
(signed)
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Name: [Redacted] |
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Title: |
(Signature Page to Support Agreement)
SCHEDULE A
TRANSACTION AGREEMENTS
GOLD PURCHASE AND SALE AGREEMENT
TWANGIZA GFSA HOLDINGS
and
BANRO CORPORATION
and
TWANGIZA MINING S.A.
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
TWANGIZA GFSA HOLDINGS, an
exempted company incorporated under the laws of Cayman Islands
(the Purchaser)
- and -
BANRO CORPORATION, a corporation
existing under the laws of Canada
(Banro)
- and -
TWANGIZA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms
when used in these recitals shall have the respective meanings set forth in
Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchaser and the Purchaser has agreed to purchase from the Seller, the Payable
Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Twangiza Project;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
ARTICLE
1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Gold Payment Amount
has the meaning set out in Section 4.2.
Additional Gold Payment Date
means in respect of each Monthly Delivery Date, the day that falls two Business
Days after such Monthly Delivery Date.
- 2 -
Affiliate means, in relation
to any person or entity, any other person or entity controlling, controlled by
or under common control with such first mentioned person or entity.
Agreement means this gold
purchase and sale agreement and all attached schedules, in each case as the same
may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
Applicable Laws means any
international, federal, state, provincial or municipal law, regulation,
ordinance, code, order or other requirement or rule of law or the rules,
policies, orders or regulations of any Governmental Authority or stock exchange,
including any judicial or administrative interpretation thereof, applicable to a
person or any of its properties, assets, business or operations.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules means the
Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 8.2(c) .
Banro Event of Default has the
meaning set out in Section 10.1.
Banro Group Entity means the
PSA Entities and their respective Affiliates from time to time.
Business Day means any day
other than a Friday, Saturday or Sunday or a day that is a statutory holiday
under the laws of the Province of Ontario, Canada or the laws of South Africa.
Change of Control of a person
(the Subject Person) means the consummation of any transaction,
including any consolidation, arrangement, amalgamation or merger or any issue,
Transfer or acquisition of voting shares, the result of which is that any other
person or group of other persons acting jointly or in concert for purposes of
such transaction: (i) becomes the beneficial owner, directly or indirectly, of
more than 50% of the voting shares of the Subject Person; or (ii) acquires
control of the Subject Person; provided that a Change of Control shall not
include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means the date
that is two Business Days following the date on which the conditions precedent
to payment of the Prepayment Amount are satisfied or waived in accordance with
Section 3.5 or such other date as the Parties may agree, such date expected to
occur on or before February 27, 2015.
- 3 -
Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information has
the meaning set out in Section 6.4(a) .
Contaminant means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to:
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impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold purchase
and sale agreements with the Purchaser or Namoya GSA Holdings, any financing
transaction pursuant to which (a) Banro or any of the Banro Group Entities
receive cash advances or deposits in respect of future revenues from the sale of
specified mineral assets to a person other than an Affiliate, (b) such advances
or deposits are recorded as liabilities, but not as debt, on the consolidated
balance sheet of Banro and (c) such liability is amortized upon the delivery of
such mineral assets.
Delivery Period means the
period beginning March 1, 2015 and ending on the date on which the last
Scheduled Monthly Quantity is delivered.
Disqualified Stock means, with
respect to any person, any shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such person, including any preferred stock and limited
liability or partnership interests (whether general or limited) (collectively,
Capital Stock) of such person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
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matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock));
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- 4 -
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(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means, with
respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
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dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means, with
respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement;
provided that in no event shall an operating lease be deemed to constitute an
Encumbrance.
Environment means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces.
Environmental Laws means any
Applicable Laws relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal, discharge or storage thereof or
the terms of any Approval issued in connection therewith) or the environmental
conditions on, under or about any real property (including soil, groundwater and
indoor, underground and ambient air conditions).
Gold Price means, with respect
to any day, the afternoon per ounce gold fixing price in U.S. dollars quoted by
the London Bullion Market Association for Refined Gold on such day or, if such
day is not a trading day, the immediately preceding trading day; provided that
if, for any reason, the London Bullion Market Association is no longer in
operation, or if the price of Refined Gold is not confirmed, acknowledged by or
quoted by the London Bullion Market Association, the Gold Price shall be
determined by reference to the price of Refined Gold in a manner endorsed by the
World Gold Council, failing which the Gold Price shall be determined by
reference to the price of gold on a commodity futures exchange mutually
acceptable to the Parties acting reasonably.
- 5 -
Governmental Authority means
any national, federal, state, provincial, regional, municipal, territorial or
local government, agency, department, ministry, authority, board, bureau,
tribunal, commission, official, court or securities commission, and any person
entitled under Applicable Law to exercise executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any of the foregoing
entities, including all tribunals, commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other person controlled by any of the
foregoing.
Group Collateral has the
meaning set out in Section 8.2(b) .
Group Security Agreements has
the meaning set out in Section 8.2(b)
Guarantors means Banro, Namoya
Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and Lugushwa Mining
S.A.
Hazardous Materials means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law.
Indebtedness of any person
means, without duplication:
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the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn- out
obligation until the amount of such obligation becomes a liability on the
balance sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
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Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or obligor); |
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(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
- 7 -
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
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such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
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(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of
any of the Banro Group Entities; or |
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(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Insolvency Event means, in
relation to any person, any one or more of the following events or
circumstances:
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(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
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(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such
proceeding; |
- 8 -
|
(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
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(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any person that
provides any Secured Financing, excluding any Banro Group Entity.
Material Adverse Effect means
any event, occurrence, change or effect that, when taken individually or
together with all other events, occurrences, changes or effects, is or could
reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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(ii) |
limit, restrict or impair the ability of the Seller to
operate the Twangiza Project in all material respects in accordance with
the Operating Plan for the Twangiza Project in effect at the time of the
event, occurrence, change or effect; |
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(iii) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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(iv) |
result in a Banro Event of
Default. |
Minimum Gold Price means
$1,100 per ounce.
Monthly Delivery Date means
the date no later than the fifth Business Day after the end of each calendar
month.
Net Proceeds means with
respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Purchaser upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators, as may be amended from time to time, or any
successor instrument, rule or policy.
Note Indenture means the
indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as
issuer, each of the guarantors named therein and Equity Financial Trust Company,
as trustee and collateral agent.
- 9 -
Operating Plan means the life
of mine operating plan for the Twangiza Project delivered to the Purchaser on
the date hereof.
Order means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Authority or other decision-making authority of competent
jurisdiction.
Parties means the parties to
this Agreement.
Payable Gold means 22,248
ounces of Refined Gold.
Permits means all licenses,
permits, approvals (including environmental approvals) authorizations, rights
(including surface and access rights and rights of way, and access to water and
power), privileges, concessions or franchises necessary for the construction,
development and operation of the Twangiza Project as is contemplated by the
Operating Plan.
Permitted Distributions means
any payment of Distributions required to satisfy any obligation under this
Agreement, Applicable Laws or the terms of any Secured Financing entered into in
accordance with this Agreement, as a result of any Affiliate of any PSA Entity
not otherwise having sufficient funds to satisfy such obligation.
Permitted Encumbrances means:
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(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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(ii) |
following the termination of the Note
Indenture: |
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(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
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(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
- 10 -
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(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
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(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation obligations);
and |
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(H) |
liens in respect of the following: |
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[Details of individual lien holders
redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clause
(ii)(1), (4), (5), (7)and (9) of such definition. |
Permitted Indebtedness means:
|
(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
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(ii) |
following the termination of the Note
Indenture: |
|
(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Purchaser and Namoya GSA
Holdings; |
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(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
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(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
- 11 -
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(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
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(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 75% of the forecast gold production of the
Twangiza Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchaser or the Collateral Agent on
its behalf; and (B) the ranking of the PSA Obligations vis-à-vis such
secured Indebtedness shall correspond to the ranking of the PSA
Obligations vis-à-vis the notes issued under the Note Indenture; |
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(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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(9) |
Indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an individual,
corporation, body corporate, limited or general partnership, joint stock
company, limited liability corporation, joint venture, association, company,
trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prepayment Amount means
$20,000,000.
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the Security Trigger Event, Encumbrances
permitted under the Note Indenture; |
- 12 -
|
(ii) |
following the Security Trigger Event and prior to the
termination of the Note Indenture, those Encumbrances that constitute
Priority Liens (as defined in the Note Indenture) ranking pari passu
with the Secured Amount; |
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(iii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Plant means any
mill or other processing facility owned or operated or both by any Banro Group
Entity located on or near the Properties, to the extent that such mill or
processing facility was built with the primary intention of processing ore from
the Properties, or at which Produced Gold is processed.
Produced Gold means any and
all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore
or other products resulting from the further milling, processing or other
beneficiation of minerals mined, produced, extracted or otherwise recovered from
the Properties.
Project Assets means the
shares in the capital of the PSA Entities (other than Banro) and the Properties,
Processing Plant and all present and after-acquired real or personal property,
used or acquired for use by any Banro Group Entity in connection with the
mining, production or extraction of gold from the Properties.
Project Collateral means (A)
the Project Assets, including all present and after-acquired personal property
used in connection with, relating to or arising out of, in whole or in part, the
Project, and (B) the Produced Gold, and in each case including all proceeds
thereof except sales of Produced Gold in the ordinary course of business.
Properties means the mineral
claims, mineral leases and other mining rights, concessions and interests listed
in Schedule A, including all buildings structures improvements, appurtenances
and fixtures that form part of the Twangiza Project, whether created privately
or by the action of any Governmental Authority, and includes any term extension,
renewal, replacement, conversion or substitution of any such mineral claims,
mineral leases and other mining rights, concessions or interests, owned or in
respect of which an interest is held, directly or indirectly, by any Banro Group
Entity at any time during the Delivery Period, whether or not such ownership or
interest is held continuously. The Properties are depicted in the map included
in Schedule A.
PSA Collateral means the
Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means Banro and the
Seller, and any other Affiliate of Banro (now or hereafter incorporated) that
acquires any interest in the Twangiza Project.
PSA Obligations means all
present and future debts, liabilities and obligations of PSA Entities, or all of
them, to the Purchaser under this Agreement.
- 13 -
PSA Security means the charges
and security interests granted in favour of the Purchaser pursuant to the
Security Agreements.
Purchaser Event of Default has
the meaning set out in Section 11.1. Receiving Party has the meaning
set out in Section 6.4(a) .
Refined Gold means marketable
metal bearing material in the form of gold bars or coins that is refined to
standards meeting or exceeding 995 parts per 1,000 fine gold.
Reimbursable Expenses has the
meaning set out in Section 13.3. Restricted Person means any person or
entity that:
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(i) |
is named, identified, described on or included on any
of: |
|
(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
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(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
|
(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
|
(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Scheduled Monthly Quantities
means 618 ounces of Refined Gold. Secured Amount has the meaning set
out in Section 8.2(a) .
- 14 -
Secured Financing means any
Indebtedness for borrowed money of, or lending facility or other financing
arrangement (including any secured derivative transactions entered into in
connection with such Indebtedness, or any other hedge financing) in favour of,
any Banro Group Entity that is secured by all or any part of the Project Assets.
Security Agreements means the Seller Security Agreements, the Group
Security Agreements and the Assignment, Subordination and Postponement of
Claims.
Security Trigger Event means
the amendment to the Note Indenture and related security agreements (including
the related collateral trust agreement) to, among other things, recognize the
Purchaser as a Priority Lien Secured Party (as defined in the Note Indenture)
and as otherwise determined necessary or appropriate by the Purchaser.
Seller Security Agreements has
the meaning set out in Section 8.2(a) .
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment
payments or other additions that may become payable in respect thereof, imposed
by any Governmental Authority, which taxes shall include all income or profits
taxes (including federal, provincial, and state income taxes) other than income
or profits taxes levied in respect of the income or profits of the Purchaser,
non-resident withholding taxes, sales and use taxes, branch profit taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
licence taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, land transfer taxes, capital taxes,
extraordinary income taxes, surface area taxes, property taxes, asset transfer
taxes, and other charges and obligations of the same or of a similar nature to
any of the foregoing. Time of Delivery has the meaning set out in
Section 2.2(b) .
Transfer means to sell,
transfer, assign, convey, dispose or otherwise grant a right, title or interest
(including expropriation or other transfer required or imposed by law or any
Governmental Authority, whether voluntary or involuntary).
Twangiza Holdcos means
together, Banro Group (Barbados) Limited and Twangiza (Barbados) Limited.
Twangiza Project means the
Properties and the mining operations developed, constructed and operated at and
in respect of the Properties.
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
|
(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
- 15 -
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(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
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(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
|
(i) |
the first person beneficially owns or directly
or indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an obligation;
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(ii) |
the first person directly or indirectly
exercises control or direction over the majority of the directors or has
the ability to control the management and policies of the second person;
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(iii) |
the second person is a partnership, other than
a limited partnership, and the first person holds more than 50% of the
interests of the partnership; or |
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(iv) |
the second person is a limited partnership and
the general partner of the limited partnership is the first person or the
control person or the general partner, |
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and controls,
controlling, controlled by and under common control have
corresponding meanings. |
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(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
- 16 -
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(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A |
- |
Description of Sellers Properties (with map)
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Schedule B |
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Security Agreements |
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Schedule C |
- |
Banro and Seller Representations and Warranties
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Schedule D |
- |
Purchaser Representations and Warranties |
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Schedule E |
- |
Termination Amount |
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Schedule F |
- |
Dispute Resolution |
ARTICLE
2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable
Gold |
|
(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Seller, the Payable Gold,
free and clear of all Encumbrances, in exchange for the Prepayment
Amount. |
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(b) |
As further provided in Section 4.3(b) Payable Gold shall
not be reduced for, and the Purchaser shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable processor agreement. |
- 17 -
|
(a) |
During the Delivery Period, the Payable Gold shall be
sold and delivered to the Purchaser on each Monthly Delivery Date in the
Scheduled Monthly Quantities in accordance with the terms of this
Agreement. |
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(b) |
The Seller shall deliver to the Purchaser all Payable
Gold to be delivered under this Agreement by way of credit or allocation
to the metal account or accounts designated by the Purchaser from time to
time, or physical delivery to such other location specified by the
Purchaser from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to be
unreasonably withheld. Delivery of the Payable Gold to the Purchaser shall
be deemed to have been made at the time on the date the Payable Gold is
credited or allocated or physically delivered, as applicable, to the
designated metal account of the Purchaser (the Time of
Delivery). Title to, and risk of loss of, the Payable Gold shall pass
from the Seller to the Purchaser at the Time of Delivery. The Seller
acknowledges that the Purchaser intends to engage a selling agent that
will take delivery of the Payable Gold on behalf of the Purchaser for
purposes of monetizing the Payable Gold. All costs and expenses pertaining
to each delivery of the Payable Gold to the Purchaser, including such
selling arrangements, shall be borne by the Seller so long as the
Purchasers accounts are in customary locations in United Kingdom,
Switzerland or South Africa. |
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(c) |
The Seller hereby represents and warrants to the
Purchaser that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of the Purchaser, (ii) the Seller will
have good, valid and marketable title to such Payable Gold, and (iii) such
Payable Gold will be free and clear of all Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchaser,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchaser, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchaser the Refined Gold physically resulting
from Produced Gold. |
ARTICLE 3
PREPAYMENT
|
(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchaser of the Payable Gold, the Purchaser hereby agrees to pay the
Prepayment Amount in cash against, and as a prepayment of the purchase
price for the Payable Gold, subject to the conditions set out in Sections
3.2 and 3.3. |
- 18 -
|
(b) |
No interest will be payable by the Seller on or in
respect of the Prepayment Amount except as expressly provided in this
Agreement. The Purchaser will not be entitled to demand repayment of the
Prepayment Amount except to the extent expressly set forth in this
Agreement. |
3.2 |
Use of Prepayment
Amount |
The Seller shall use, and Banro shall cause to be used, the
Prepayment Amount only to pay interest due under the Note Indenture and certain
outstanding dividends as of the last payment date on or prior to the date of
receipt by the Seller of the Prepayment Amount on preferred shares in the
capital of Banro Group (Barbados) Limited and the Series A preferred shares in
the capital of Banro, to repay accounts payable and thereafter, for general
corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchaser |
The Purchaser shall pay the Prepayment Amount to or to the
order of the Seller on the Closing Date, by wire transfer of immediately
available funds to the bank account or accounts designated by the Seller in
writing, once each of the following conditions has been satisfied in full:
|
(a) |
Banro and the Seller shall have delivered to the
Purchaser a certificate of status, good standing or compliance (or
equivalent) for each PSA Entity and the Twangiza Holdcos, issued by the
relevant Governmental Authority dated no earlier than five Business Days
prior to the Closing Date; |
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(b) |
Each PSA Entity shall have executed and delivered to the
Purchaser a certificate of a senior officer of each in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Purchaser may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the
Purchaser a favourable opinion, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from external
legal counsel to Banro, the Seller, the Twangiza Holdcos and the PSA
Entities as to (i) the legal status of each, (ii) the corporate power and
authority of each to execute, deliver and perform this Agreement and the
Security Agreements to which it is a party, (iii) the execution and
delivery of this Agreement and the Security Agreements to which it is a
party and the enforceability of this Agreement and the Security Agreements
against each, (iv) that this Agreement and the Security Agreements, and
the performance by Banro and the Seller of the obligations hereunder or
thereunder, do not conflict with, violate, result in a breach of, or
constitute a default or an event creating rights of acceleration,
termination, modification or cancellation or a loss of rights under (with
or without the giving notice or lapse of time or both), the Note Indenture
or the Collateral Trust Agreement (as defined in the Note Indenture), (v)
the outstanding share capital of the Seller and the Twangiza Holdcos, (vi)
the creation of valid mortgages and charge upon, and security interests in
(including as to ranking of such security interests), the PSA Collateral
under the Security; and (vii) the due registration or filing of the
Security Agreements and, where applicable, the perfection of the security
interest of the Purchaser (including as to ranking of such security
interests), under such Security Agreements and the results of the usual
searches that would be conducted in connection with the security that is
the subject of such Security Agreements; |
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the
Purchaser a legal opinion addressed to the Purchaser from external
counsel, in form and substance satisfactory to the Purchaser, with respect
to title to the Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by
the Seller and continue to be in place without challenge or appeal, to the
extent reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by
the time they are necessary, |
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except for those that would not
reasonably be expected to have a Material Adverse Effect; |
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(g) |
each PSA Entity shall have delivered to the Purchaser a
certificate of a senior officer confirming: |
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(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse
Effect; |
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(h) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchaser under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchaser, under such Security
Agreements; |
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(i) |
the Seller paid all Reimbursable Expenses of the
Purchaser payable as at the Closing Date; and |
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(j) |
Banro and the Seller shall have delivered to the
Purchaser prior to the Closing Date a certificate of insurance coverage or
other evidence of acceptable insurance
coverage. |
3.4 |
Conditions Precedent in Favour of the
Seller |
On or before the Closing Date, the Purchaser will satisfy each
of the following conditions:
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(a) |
the Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for the
Purchaser, issued by the relevant Governmental Authority; |
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(b) |
the Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of the Purchaser, in form
and substance satisfactory to Banro and the Seller, acting reasonably, as
to the constating documents of the Purchaser; the resolutions of the sole
director of the Purchaser, authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
the names, positions and true signatures of the persons authorized to sign
this Agreement on behalf of the Purchaser; and such other matters
pertaining to the transactions contemplated hereby as Banro and the Seller
may reasonably require; |
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(c) |
the Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to the
Purchaser as to (i) the legal status of the Purchaser, (ii) the corporate
power and authority of the Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
the Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by the Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice
or |
- 21 -
3.5 |
Satisfaction of Conditions
Precedent |
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(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchaser, and may be waived by the Purchaser
in its sole discretion in whole or in part in writing. Each of the
conditions set forth in Section 3.4 is for the exclusive benefit of Banro
and the Seller, and may be waived by Banro and the Seller in their sole
discretion in whole or in part in writing. |
ARTICLE
4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
4.2 |
Additional Gold
Deliveries |
On each Additional Gold Delivery Date, the Seller shall sell
and deliver to the Buyer an amount of Refined Gold (an Additional Gold
Delivery Amount) equal to the greater of:
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(a) |
zero; and |
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(b) |
the product of: |
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(i) |
the Scheduled Monthly Quantity delivered on the Monthly
Delivery Date corresponding to such Additional Gold Payment Date,
and |
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(ii) |
an amount equal to: |
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(A) |
the Minimum Gold Price |
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minus |
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(B) |
the Gold Price on the Business Day following
the Monthly Delivery Date, divided by the Gold Price on the Business Day
following the Monthly Delivery Date. |
- 22 -
Each Additional Gold Delivery Amount shall be delivered in
accordance with the provisions of this Agreement.
(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchaser shall be made without any deduction, withholding, charge or levy
on account of any Taxes, all of which shall be for the sole account of the
Seller. All Taxes, if any, as are required to be so deducted, withheld,
charged or levied by the Seller or any of its Affiliates on any such
delivery or payment, shall be paid by the Seller delivering or paying to
the Purchaser or on their behalf, in addition to such delivery or payment,
such additional delivery or payment as is necessary to ensure that the net
amount received by the Purchaser (net of any such Taxes, including any
Taxes required to be deducted, withheld, charged or levied on any such
additional amount) equals the full amount that the Purchaser would have
received had no such deduction, withholding, charge or levy been
required. |
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(b) |
If the Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.3(a) hereof, the Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.3(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of the Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of the Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental
Authority. |
In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Purchaser, on the one hand, and the Seller on the other
hand, agree that they shall negotiate in good faith with each other to amend
this Agreement so that the other Parties and their Affiliates are no longer
adversely affected by any such enactment, revision, implementation, amendment or
interpretation, as the case may be; provided that any amendment to this
Agreement shall not have any adverse effect on the Seller and its Affiliates on
the one hand, and the Purchaser and its Affiliates on the other hand.
- 23 -
Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date, calculated and
compounded monthly in arrears. Any dollar amount or Refined Gold owing by a
Party to any other Party under this Agreement may be set off against any dollar
amount or Refined Gold owed to such Party by the other Party. Any amount of
Refined Gold set off and withheld against any non-payment by a Party shall be
valued at the Gold Price as of the first trading day that such amount of Refined
Gold became payable to such Party.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
5.1 |
Notice of
Information |
Prior to delivery to the Purchaser of any of the information
set out in this Article 5 or otherwise in this Agreement, Banro and the Seller
shall inform the Purchaser if such information would be considered material
non-public information of Banro. In such event, the Purchaser shall have the
option, in its sole discretion, to (a) refuse to accept such information, or (b)
require that such information be either (i) publicly disclosed within two
Business Days, or (ii) where such information constitutes scientific and
technical information representing a material change to the Twangiza Project,
delivered at a subsequent date within 45 days, together with an updated
technical report in accordance with NI 43-101, and notice of such refusal or
delayed delivery will constitute a valid waiver, or partial waiver, as the case
may be, of the obligation to deliver such information.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchaser:
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(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis,
including: |
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(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 5.2(a); |
- 24 -
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
5.3 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 5.2(a),
5.2(b), 5.2(c) and 5.2(e) shall be provided by the Seller to the Purchaser. For
the purposes of this Section 5.3 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
If during the Delivery Period, Banro shall cease to be a
reporting issuer under Applicable Law, the PSA Entities shall permit the
Purchaser and its authorized representatives and agents to perform audits or
other reviews and examinations of its books and records from time to time at
reasonable times at the Purchasers sole risk and expense and upon five Business
Days notice, to confirm compliance with the terms of this Agreement, provided
that unless there is a continuing Banro Event of Default, the Purchaser and its
authorized representatives and agents will not exercise such rights more often
than one (1) time during any calendar quarter. The Purchaser shall diligently
complete any audit or other examination permitted hereunder.
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchaser and its
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Twangiza Project, in each case to monitor the mining and
processing operations on the Twangiza Project. Provided there has been no
Banro Event of Default that is continuing, the Purchaser may avail itself
of such right of access a maximum of twice per calendar year (including
the mill in respect thereof), and for this purpose, invitations from Banro
will not reduce the number of visits the Purchaser may
request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchaser shall have the
right to conduct an investors tour on the Twangiza Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Twangiza Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchaser and its invitees, and the Purchaser shall (a)
comply and request that its invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchaser or Banro and the Seller or any
of their respective invitees, employees, officers, directors, agents, or
representatives caused by the Purchasers exercise of its rights under
this Section. |
ARTICLE 6
COVENANTS
6.1 |
Conduct of
Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Twangiza Project Assets on a commercial basis as
though the Seller has a full economic interest in all the gold produced
from the Properties. Banro and the Seller shall ensure that (i) all
cut-off grade, short term mine planning and production decisions
concerning the Twangiza Project shall be based on gold prices typical of
normal industry practice and consistent with the practices of Banro and
its Affiliates as at the date of this Agreement in connection with such
decisions, and (ii) all longer term planning and resource and reserve
calculations concerning the Twangiza Project shall use gold prices based
on normal industry practice and consistent with the historical practices
of Banro and its Affiliates in connection with such planning and
calculations. |
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(b) |
Subject to Section 6.1(a), all decisions regarding the
Twangiza Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Twangiza Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Twangiza Project, and (iv) except
as provided herein, the sale of gold and terms thereof, shall be
made |
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by the Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 6.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Twangiza Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
- 26 -
6.2 |
Preservation of Corporate
Existence |
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(a) |
Except as permitted in Section 6.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 7.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in
favour of the Purchaser all the obligations of such Party under this
Agreement and any Security Agreement to which it is a
party. |
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(a) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(b) |
Banro and the Seller shall insure the Twangiza Project in
such amounts and with such coverage as is customary in the mining industry
for the operation of the Twangiza Project. Banro and the Seller covenant
and agree that in the event of any loss or damage that is insured prior to
the end of the Delivery Period, the Seller shall at its option either (i)
use all Net Proceeds of any insurance payment received by a Banro Group
Entity to rebuild or repair all damaged facilities forming part of the
Twangiza Project, or (ii) use the Purchasers share of the Net Proceeds of
such insurance payment received by any Banro Group Entity within 30 days
after receipt of such proceeds by such Banro Group Entity, to acquire
Refined Gold in accordance with Section 2.2(d) and shall deliver to the
Purchaser such amount of Refined Gold, the Purchasers share being
calculated as the ratio of the net present value of Payable Gold not
delivered to the Purchaser to the value of the Twangiza Project when
measured by the same criterion which establishes the value of such
Purchasers interest. A failure to agree on the foregoing proportion is
arbitrable under Section 13.1. |
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(c) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Purchaser at reasonable
intervals no more than once per year, furnish to the Purchaser a
certificate setting forth the nature and extent of all insurance
maintained by or on behalf of the PSA Entities in accordance with Section
6.3(a). Banro and the Seller shall, upon the request of the Purchaser,
provide the Purchaser with copies of all insurance policies as in effect
from time to time relating to the Project
Assets. |
- 27 -
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(d) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
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(a) |
Each Party (a Receiving Party) agrees that it
shall maintain as confidential and shall not disclose, and shall cause its
Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 15, 2014
(Confidential Information), provided that a Receiving Party may
disclose Confidential Information in the following
circumstances: |
|
(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 6.4(c) and 13.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 13.1; |
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
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(v) |
with the consent of the disclosing Party;
and |
- 28 -
|
(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
|
(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 6.4(a)(i) are made aware of this Section 6.4 and
comply with the provisions of this Section 6.4. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Purchaser will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 6.4(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
6.5 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchaser
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 6.5, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Twangiza Project.
- 29 -
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Twangiza
Project.
[Redacted]
As soon as practical following the Closing Date and in any
event no later than 15 Business Days following the Closing Date, Banro and the
Seller, together with the Purchaser, shall negotiate, execute and deliver an
agreement with Auramet International LLC (Auramet), creating an account
in favour of the Purchaser and setting out the terms by which Auramet will
assist the Purchaser in monetizing deliveries of Payable Gold.
Banro shall take all actions necessary (including, as
appropriate solicit and obtain the consent of the holders of notes issued
pursuant to the Note Indenture and the trustee and other parties to the
collateral trust agreement and security agreements related to the Note
Indenture) to, and shall within 60 days of the date hereof, amend the Note
Indenture and the collateral trust agreement and security agreements related
thereto to characterize the PSA Obligations as a Priority Lien in accordance
with the Note Indenture and as otherwise reasonably requested by the Purchaser.
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(a) |
During the Delivery Period, Banro shall not (i) declare
or pay any dividend on the common shares in the capital of Banro, or (ii)
make any payments to directors or management of Banro not in the ordinary
course of business, and shall not, and will cause the Banro Group Entities
to not, pursue any construction of projects other than the Twangiza
Project and the projects known as the Namoya Project, the Kamituga Project
and the Lugushwa Project and will not pursue any exploration activities
other than in connection with such projects and with respect to properties
held by Banro Congo Mining S.A. |
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(b) |
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Purchaser in
accordance with the terms of this Agreement. The Parties acknowledge and
agree that any breach by Banro of its obligations under this Section would
cause the Purchaser irreparable harm for which monetary damages alone
would not be a sufficient remedy and that therefore the Purchaser may seek
and obtain orders of specific performance, injunctions and other equitable
remedies and remedies available under civil laws against Banro with
respect thereto as a court of competent jurisdiction or an arbitrator
under Section 13.1 may see fit to grant with respect to any such breach
and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies. |
- 30 -
ARTICLE 7
BANRO
TRANSFERS AND CONTROL
7.1 |
Owner of Project
Assets |
Subject to Section 7.3 and except as provided in Section8.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 7.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 7.1 shall not restrict any leased personal property
(provided that the lessee is the Seller) or personal property that is equipment
that is obsolete or no longer in use under the Operating Plan.
7.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 7.3, Banro and the Seller shall
not, and shall ensure that the Twangiza Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 7.3(c), holding Project Assets, does not during the Delivery Period:
|
(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
|
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|
(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 7.3(c), holding Project
Assets. |
7.3 |
Permitted Transfers and Changes of
Control |
Section 7.2 shall not prohibit a Transfer or Change of Control,
if:
Transfer of the Project Asset
|
(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA
Entity: |
|
(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
- 31 -
|
(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
|
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|
(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Purchaser all of the Sellers
and, if applicable, the other Banro Group Entities obligations under this
Agreement pursuant to an agreement in form and substance satisfactory to
the Purchaser, acting reasonably; |
|
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
8.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 8.2 |
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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|
(vii) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(a)(vii)); |
Change of Control
|
(b) |
in the case of a Change of Control of Banro, the Seller,
the Twangiza Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
7.3(c): |
|
(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed Change of
Control; |
|
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|
(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
|
(A) |
assumes in favour of the Purchaser all of the obligations
of Banro under this Agreement, such assumption to occur by an agreement in
form and substance satisfactory to the Purchaser, acting reasonably;
and |
- 32 -
|
(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
|
(iii) |
in respect of such Change of
Control: |
|
(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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|
(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 8.2; |
|
(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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|
(v) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(b)(v)); |
Inter-corporate Transfer
|
(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of
Banro: |
|
(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
|
(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
7.3(a)(i) through 7.3(a)(vii) are complied with mutatis mutandis;
or |
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|
(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
|
(1) |
the provisions of Sections 7.3(a)(i), 7.3(a)(iv),
7.3(a)(v) and 7.3(a)(vi) are complied with mutatis mutandis;
and |
- 33 -
|
(2) |
the Seller provides a confirmation in favour of the
Purchaser that its obligations under this Agreement shall continue in full
force and effect despite any such Transfer; |
Joint Ventures and Minority Dispositions
|
(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
|
(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
|
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|
(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
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|
(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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|
(iv) |
such other person agrees in a document, or documents,
acceptable to the Purchaser, acting reasonably, with the PSA Entity, the
Purchaser and any other such person to acknowledge the obligations of the
Seller under this Agreement and the Security Agreements, including the
granting to the Purchaser of all the security interests contemplated
thereunder; provided that, if such other person acquires any legal right,
title or interest in and to any of the Project Assets (including any
registered or recorded title in and to the Properties), such person
assumes on a joint and several basis with the Seller all of the
obligations and duties under this Agreement and grants the same charges
and security interests in, to and over the Project Assets to which it
acquires any legal right, title or interest, and enters into the same
Security Agreements entered into by the Seller and its subsidiaries
pursuant to Section 8.2; |
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|
(v) |
all filings have been made and all other actions have
been taken that are required in order for the Purchaser to continue at all
times following such transaction to have the valid and perfected security
interest contemplated by Section 8.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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|
(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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|
(viii) |
the Purchaser confirms in writing that it does not
reasonably expect such minority interest disposition, joint venture or
other similar commercial arrangement to have a Material Adverse Effect;
or |
- 34 -
With Consent
|
(e) |
the Purchaser provides its prior written
consent. |
ARTICLE 8
SECURITY
8.1 |
Financings and
Encumbrances |
|
(a) |
During the Delivery Period, except for Permitted
Indebtedness, no PSA Entity shall incur or enter into any
Indebtedness. |
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|
(b) |
Except as provided in this Article 8, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
|
(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, guaranteeing the performance, when due, of
all PSA Obligations; and (ii) grant, as security for the payment and
performance, when due, of all PSA Obligations, to and in favour of the
Purchaser first ranking charges and security interests (subject only to
the Prior Ranking Permitted Encumbrances) in, to and over Project
Collateral (other than the Properties and Processing Plant), pursuant to
one or more agreements (the Seller Security Agreements) executed
by each to and in favour of the Purchaser, in form and substance
satisfactory to the Purchaser, acting reasonably, the charged amount (the
Secured Amount ) of such charges and security interests being
initially the Prepayment Amount, such amount to reduce rateably upon
delivery of each Scheduled Monthly Quantity. |
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|
(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Purchaser, in form and substance satisfactory
to the Purchaser, acting reasonably, guaranteeing the payment and
performance, when due, of all PSA Obligations; and (ii) grant, as security
for its obligations under such guarantee to and in favour of the
Purchaser, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral), all
pursuant to one or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Purchaser,
acting reasonably. |
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|
(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and Postponement
of Claims), in favour of and in form and substance satisfactory to
the Purchaser, acting reasonably, that subordinates and postpones the
enforcement of any such debts, liabilities and obligations and the
realization of any charges or security interests to secure such claims to
the Security Agreements and, from and after a Banro Event of Default, or
any event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, and until such Banro Event of
Default is remedied, subordinates and postpones the payment of all such
debt, liabilities and obligations (other than Permitted Distributions) to
the payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
- 35 -
|
(d) |
Following the Security Trigger Event, if so requested in
writing by the Purchaser, the Banro Group Entities shall not, for so long
as a Banro Event of Default, or any event or circumstance which, with
notice, the passage of time or both, would constitute a Banro Event of
Default, continues, make any Distribution other than a Permitted
Distribution. |
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|
(e) |
At the Purchasers request, Banro shall, and shall cause
the Seller (and any other Banro Group Entity from which Produced Gold is
sold) to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times following the Security Trigger Event, the Seller shall not,
and Banro shall ensure that the Seller does not, make any Distributions
other than a Permitted Distribution from such account if a Banro Event of
Default, or event which with the giving of notice or the passage of time
or both would constitute a Banro Event of Default, has occurred and is
continuing, or if a Banro Event of Default would occur or arise
immediately after, or as a result of, making a Distribution. |
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|
(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Purchaser may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Purchaser has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Purchaser continues to secure the PSA Obligations and with no change in
the priority thereof. The Seller shall pay all costs and expenses
associated with the foregoing including in connection with the preparation
and registration of all documentation in connection therewith that is
required by the Purchaser. |
- 36 -
|
(i) |
Notwithstanding the foregoing, the Purchaser hereby
agrees that the obligations set out in the Section 8.2 shall be satisfied
prior the Security Trigger Event by the execution, delivery and as
applicable, registration of the documents so identified Schedule
B. |
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
8.3 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Purchaser shall have
substantially similar access rights and obligations as provided in Section 5.5.
ARTICLE 9
REPRESENTATIONS AND WARRANTIES
9.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Purchaser is
entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule C to the Purchaser on and
as of the date of this Agreement on a joint and several basis. The
representations and warranties set forth in Schedule C shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
9.2 |
Representations and Warranties of the
Purchaser |
The Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, hereby makes the
representations and warranties set forth in Schedule D to Banro and the Seller
on and as of the date of this Agreement. The representations and warranties set
forth in Schedule D shall be deemed to be repeated by the Purchaser as of the
date of the Closing Date.
9.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule C and
Schedule D shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
- 37 -
ARTICLE 10
BANRO
EVENTS OF DEFAULT
10.1 |
Banro Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of Default):
|
(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchaser on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Purchaser
notifying the Seller of such default; |
|
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|
(b) |
other than as provided in Section 10.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Purchaser to the PSA
Entities of written notice of such breach or default, except in respect of
the covenant set out in Section 6.9, which shall constitute a Banro Event
of Default immediately on notice thereof, or such longer period of time as
the Purchaser may determine in its sole discretion; |
|
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|
(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Purchaser to Banro and the Seller of written notice of
such inaccuracy, or such longer period of time as the Purchaser may
determine in its sole discretion; |
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|
(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
- 38 -
|
(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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|
(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Purchaser notifying the PSA Entities of such
default. |
|
(a) |
If a Banro Event of Default occurs and is continuing, the
Purchaser shall have the right, upon written notice to Banro and the
Seller at its option and in addition to and not in substitution for any
other remedies available at law or equity, to take any or all of the
following actions: |
|
(i) |
demand all amounts and deliveries owing by the Seller to
the Purchaser; |
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|
(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 10.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the Purchaser
hereunder, but for the occurrence of such Banro Event of Default. Upon
demand from the Purchaser, the Seller shall promptly pay all such amounts
to the Purchaser; and |
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|
(iii) |
enforce the PSA Security. |
|
(b) |
The Parties hereby acknowledge and agree that: (i) the
Purchaser will be damaged by a Banro Event of Default; (ii) it would be
impracticable or extremely difficult to fix the actual damages resulting
from a Banro Event of Default; (iii) any sums payable in accordance with
Section 10.2(a) with respect to a Banro Event of Default are in the nature
of liquidated damages, not a penalty, and are fair and reasonable; and
(iv) the amount payable in accordance with Section 10.2(a) or with respect
to a Banro Event of Default represents a reasonable estimate of fair
compensation for the losses that may reasonably be anticipated from such
Banro Event of Default in full and final satisfaction of all amounts owed
in respect of such Banro Event of Default. |
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(c) |
For greater certainty, if the Purchaser does not exercise
its right under Section 10.2(a)(ii), the obligations of Banro and the
Seller or any successors shall continue in full force and
effect. |
- 39 -
ARTICLE
11
PURCHASER EVENTS OF DEFAULT
11.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of Default):
|
(a) |
the Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect, and such breach or default is not remedied within a period of 30
days following delivery by the Seller to the Purchaser of written notice
of such breach or default, or such longer period of time as the Seller may
determine in its sole discretion; or |
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|
(b) |
any of the representations or warranties given by the
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to the Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
If a Purchaser Event of Default under Section 11.1 has occurred
and is continuing, then Banro and the Seller shall have no right to terminate
this Agreement, but shall be entitled to all other remedies available to it at
law or in equity.
ARTICLE 12
TERMINATION ENTITLEMENT
12.1 |
Termination
Entitlement |
If the Seller wishes to terminate the delivery of Payable Gold
to the Purchaser during the Delivery Period in accordance with the terms and
conditions of this Agreement (a Seller Termination Event), it shall
provide written notice thereof to the Purchaser and the purchase of Refined Gold
not delivered shall be cancelled and the Purchaser shall be entitled to receive
a one-time termination amount (the Termination Amount) [Commercially
sensitive information redacted].
ARTICLE 13
GENERAL
13.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officer of each of Banro and the Purchaser for prompt
resolution. Any such dispute, controversy or claim which cannot be resolved by
the chief executive officers within 15 days after it has been so referred to
them hereunder, including the determination of the scope or applicability of
this Agreement to arbitrate, shall be settled by binding arbitration in
accordance with the rules for arbitration set out in Schedule F. The
determination of such arbitrator shall be final and binding upon the Parties and
there shall be no appeals from any determination of the arbitrator. Judgment on
the award may be entered in any court having jurisdiction. This Section 13.1
shall not preclude the Parties from seeking provisional remedies in aid of
arbitration from a court of competent jurisdiction. The Parties covenant and
agree that they shall conduct all aspects of such arbitration having regard at
all times to expediting the final resolution of such arbitration.
- 40 -
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
13.3 |
Reimbursement of
Expenses |
|
(a) |
The Seller and Banro shall pay to the Purchaser all
reasonable costs and expenses (including all reasonable legal fees and
disbursements of counsel) incurred by the Purchaser in connection with
this Agreement and the other related transactions,
including: |
|
(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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|
(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Purchaser and any on-site inspections by the Purchaser or its
representatives; |
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|
(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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|
(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated thereunder; |
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|
(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Purchaser at law or in
equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
- 41 -
|
(viii) |
the incorporation and organization of the Purchaser, as
well as the initial issuances of notes or other investment instruments
required to capitalize the Purchaser with the Prepayment Amount;
and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Purchaser, including fees and expenses related to
fiscal and collateral agents, valuation tax reporting and
audit. |
(collectively, the Reimbursable
Expenses).
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(b) |
The obligations of the Seller under this Section 13.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
13.4 |
Termination;
Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 6.4, 6.10, 10.2, 11.2,
13.1, 13.7, 13.9 and Schedule F and such other provisions of this Agreement as
are required to give effect thereto.
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Purchaser and any Banro Group Entity.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Purchaser on the one hand and any Banro Group
Entity on the other hand.
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
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(a) |
If to either Banro or the Seller,
to: |
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Banro Corporation |
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1 First Canadian Place |
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Suite 7070, 100 King Street West
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Toronto, Ontario, M5X 1E3, Canada |
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Attention: |
Chief Financial Officer |
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Telecopier No.: |
416-366-7722 |
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with a copy to: |
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Norton Rose Fulbright Canada LLP
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Royal Bank Plaza, South Tower, Suite
3800 |
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200 Bay Street |
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Toronto, Ontario, M5J 2Z4, Canada
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Attention: |
Mike Moher |
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Telecopier No.: |
416- 216-3930 |
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(b) |
If to the Purchaser, to: |
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[Redacted] |
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with a copy to: |
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Goodmans LLP |
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333 Bay Street, Suite 3400 |
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Toronto, Ontario M5H 2S7
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Attention: |
Kari MacKay |
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Telecopier No.: |
416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
- 43 -
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
13.13 |
Priority Debt Sharing
Confirmation |
The Purchaser hereby agrees, for the benefit of all holders of
each other existing and future Series of Priority Lien Debt and each existing
and future Priority Debt Representative, that as of the Security Trigger Event,
all Priority Lien Obligations will be and are secured equally and ratably by all
Liens (as defined in the Collateral Trust Agreement) at any time granted by
Banro or any Obligor (as defined in the Collateral Trust Agreement) to secure
the obligations in respect of the Priority Notes, whether or not upon property
otherwise constituting Collateral (as defined in the Collateral Trust
Agreement), that all such Liens will be enforceable by the Collateral Agent for
the benefit of all holders of Priority Lien Obligations equally and ratably
(except that the Priority Stream Obligations (as defined in the Collateral Trust
Agreement) shall be paid in priority to the other Priority Lien Obligations in
accordance with Section 3.4(a) of the Collateral Trust Agreement), and that the
Purchaser is bound by the provisions in the Collateral Trust Agreement relating
to the order of application of proceeds from enforcement of such Liens, and
consent to and direct the Collateral Agent to perform its obligations under the
Collateral Trust Agreement.
- 44 -
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
The Purchaser shall be entitled at any time and from time
to time to Transfer any, or all, of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 7.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Purchaser. In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
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TWANGIZA GFSA
HOLDINGS |
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Per: |
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Name: |
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Title: |
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BANRO CORPORATION
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Per: |
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Name: |
Richard Brissenden |
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Title: |
Chairman of the Board |
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TWANGIZA MINING
S.A. |
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Per: |
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Name: |
Desire Sangara |
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Title: |
Chairman of the Board
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SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. Dated
as of February 27, 2015
[Redacted]
SCHEDULE
B
SECURITY AGREEMENTS
This is Schedule B to
the Gold Purchase and Sale Agreement between Twangiza GFSA Holdings, Banro
Corporation and Twangiza Mining S.A. Dated as of February 27, 2015 Prior
to the Security Trigger Event:
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Pledge of production and equipment, duly registered in Democratic Republic
of the Congo
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Guarantees contemplated by Section 8.2(b) of Banro and the Guarantors
Following the Security Trigger Event:
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Joinder and sharing confirmations as a Priority Lien Debt
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Guarantees contemplated by Section 8.2(b)
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Assignment, Subordination and Postponement of Claims contemplated by
Section 8.2(c)
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Pledge of accounts with Auramet International LLC, if any
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Pledge of accounts with any Processor
SCHEDULE C
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule C to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchaser as
follows:
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(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non- assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Twangiza (Barbados) Limited; |
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(f) |
the authorized share capital of Twangiza (Barbados)
Limited consists of an unlimited number of common shares and 20,000
preferred shares, of which, as of the date hereof, (i) only 1,200,000
common shares are issued and outstanding as fully paid and non- assessable
shares in the capital of Twangiza (Barbados) Limited and are legally and
beneficially owned as to 100% by Banro Group (Barbados) Limited, and (ii)
only 20,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Twangiza (Barbados) Limited and
are legally and beneficially owned as to 100% by investment funds managed
by Gramercy Funds Management LLC; |
- 2 -
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right, title or interest
in or to, the Twangiza Project, the Properties, the Project Assets or the
gold produced from the Properties; |
- 3 -
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Twangiza Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities, other than those that
are not necessary on the date this representation and warranty is given
and are expected to be obtained in the ordinary course of business by the
time they are necessary, where the failure to have or obtain such
Approvals would not reasonably be expected to have a Material Adverse
Effect, and there are no facts or circumstances that might reasonably be
expected to adversely affect the issuance or obtaining of any such
material Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Twangiza Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Twangiza Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
- 4 -
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Twangiza
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Twangiza Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Twangiza Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the |
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Bribery Act (United Kingdom)). Without limiting
the generality of the foregoing, each Banro Group Entity is in material
compliance with all applicable Environmental Laws, and there are no
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending or, to the best of its knowledge, threatened against
or affecting any Banro Group Entity with respect to the ownership, use,
maintenance and operation of any of the Twangiza Project, the Properties
and the Project Assets relating to any applicable Environmental Laws,
where any adverse determination with respect thereto or liability imposed
therein could reasonably be expected to result in a Material Adverse
Effect and such adverse determination is reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Twangiza Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Twangiza Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with the Toronto
Stock Exchange (all such documents filed prior to the date of execution of
this Agreement, the Public Disclosure Documents) since January 1,
2013. As of the effective date of such Public Disclosure Documents, to its
knowledge, none of the Public Disclosure Documents contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, it being
acknowledged that if there is any inconsistency between two or more
documents comprising the Public Disclosure Documents regard shall be had
to the last filed document. All of the Public Disclosure Documents, as of
their respective effective dates (and as of the effective dates of any
amendments thereto), complied as to both form and content in all material
respects with the requirements of applicable Securities Laws or were
amended on a timely basis to correct deficiencies identified by securities
commissions or similar securities regulatory authorities. Banro has not
filed any confidential material change report with any securities
regulatory authority that at the date of execution of this Agreement
remains confidential. There is no material adverse change concerning Banro
which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this
Agreement; |
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Twangiza Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements
referred to in the first sentence of paragraph (y) above or in the notes
thereto, other than (i) liabilities or obligations arising in the ordinary
course of business since September 30, 2014 or publicly announced by
Banro, or obligations to Auramet International LLC pursuant to the gold
sale arrangements with Auramet International
LLC; |
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock- out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America (Foreign
Company Plan) that is intended to qualify for special tax treatment
meets all of the requirements for such treatment and has obtained all
necessary approvals of all relevant Governmental Authorities. No Foreign
Company Plan has any unfunded liabilities, determined in accordance with
generally accepted accounting principles, that have not been fully accrued
on Banros financial statements or that will not be fully offset by
insurance. All Foreign Company Plans are registered where required by, and
are in good standing under, all Applicable Laws. For purposes of this
paragraph, Employee Benefit Plan means any employee benefit plan,
program, policy or arrangement sponsored, maintained or contributed to by
a Banro Group Entity or any of their respective Affiliates or with respect
to which the Seller, any Banro Group Entity or any of their respective
Affiliates has any liability or obligation; |
- 7 -
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Twangiza Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
- 8 -
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE D
PURCHASER REPRESENTATIONS AND WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
The Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is an exempted company duly incorporated and validly
existing under the laws of Cayman Islands and is up to date in respect of
all filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE
E
TERMINATION AMOUNT
This is Schedule E to
the Gold Purchase and Sale Agreement between Twangiza GFSA Holdings, Banro
Corporation and Twangiza Mining S.A. dated as of February 27, 2015
[Commercially sensitive information redacted]
SCHEDULE F
DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this
Agreement.
1. |
Initiation of Arbitration
Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the other Party
(the Respondent) a statement of claim setting out in sufficient detail
the facts and any contentions of law on which it relies, and the relief that it
claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have
not previously been submitted by any Party, and (where practicable) by any
relevant samples. |
- 2 -
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration
hearing. |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
5. |
Jurisdiction and Powers of the
Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
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(i) |
determine any question of law arising in the
arbitration; |
- 3 -
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(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations or contractual
rights as to disclosure on a confidential basis to which it may be
entitled. |
- 4 -
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
GOLD PURCHASE AND SALE AGREEMENT
(Tranche 2)
TWANGIZA GFSA HOLDINGS
and
BANRO CORPORATION
and
TWANGIZA MINING S.A.
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
TWANGIZA GFSA HOLDINGS, an
exempted company incorporated under the laws of Cayman Islands
(the Purchaser)
- and -
BANRO CORPORATION, a corporation
existing under the laws of Canada
(Banro)
- and -
TWANGIZA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms
when used in these recitals shall have the respective meanings set forth in
Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchaser and the Purchaser has agreed to purchase from the Seller, the Payable
Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Twangiza Project;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Gold Payment Amount
has the meaning set out in Section 4.2.
Additional Gold Payment Date
means in respect of each Monthly Delivery Date, the day that falls two Business
Days after such Monthly Delivery Date.
- 2 -
Affiliate means, in relation
to any person or entity, any other person or entity controlling, controlled by
or under common control with such first mentioned person or entity.
Agreement means this gold
purchase and sale agreement and all attached schedules, in each case as the same
may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
Applicable Laws means any
international, federal, state, provincial or municipal law, regulation,
ordinance, code, order or other requirement or rule of law or the rules,
policies, orders or regulations of any Governmental Authority or stock exchange,
including any judicial or administrative interpretation thereof, applicable to a
person or any of its properties, assets, business or operations.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules means the
Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 8.2(c) .
Banro Event of Default has the
meaning set out in Section 10.1.
Banro Group Entity means the
PSA Entities and their respective Affiliates from time to time.
Business Day means any day
other than a Friday, Saturday or Sunday or a day that is a statutory holiday
under the laws of the Province of Ontario, Canada or the laws of South Africa.
Change of Control of a person
(the Subject Person) means the consummation of any transaction,
including any consolidation, arrangement, amalgamation or merger or any issue,
Transfer or acquisition of voting shares, the result of which is that any other
person or group of other persons acting jointly or in concert for purposes of
such transaction: (i) becomes the beneficial owner, directly or indirectly, of
more than 50% of the voting shares of the Subject Person; or (ii) acquires
control of the Subject Person; provided that a Change of Control shall not
include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means the date
that is two Business Days following the date on which the conditions precedent
to payment of the Prepayment Amount are satisfied or waived in accordance with
Section 3.5 or such other date as the Parties may agree, such date expected to
occur on or before April 15, 2015.
- 3 -
Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information has
the meaning set out in Section 6.4(a) .
Contaminant means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to:
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(i) |
impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold purchase
and sale agreements with the Purchaser or Namoya GSA Holdings, any financing
transaction pursuant to which (a) Banro or any of the Banro Group Entities
receive cash advances or deposits in respect of future revenues from the sale of
specified mineral assets to a person other than an Affiliate, (b) such advances
or deposits are recorded as liabilities, but not as debt, on the consolidated
balance sheet of Banro and (c) such liability is amortized upon the delivery of
such mineral assets.
Delivery Period means the
period beginning April 15, 2015 and ending on the date on which the last
Scheduled Monthly Quantity is delivered.
Disqualified Stock means, with
respect to any person, any shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such person, including any preferred stock and limited
liability or partnership interests (whether general or limited) (collectively,
Capital Stock) of such person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
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(i) |
matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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(ii) |
is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock));
or |
- 4 -
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(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means, with
respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
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(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means, with
respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement;
provided that in no event shall an operating lease be deemed to constitute an
Encumbrance.
Environment means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces.
Environmental Laws means any
Applicable Laws relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal, discharge or storage thereof or
the terms of any Approval issued in connection therewith) or the environmental
conditions on, under or about any real property (including soil, groundwater and
indoor, underground and ambient air conditions).
Gold Price means, with respect
to any day, the afternoon per ounce gold fixing price in U.S. dollars quoted by
the London Bullion Market Association for Refined Gold on such day or, if such
day is not a trading day, the immediately preceding trading day; provided that
if, for any reason, the London Bullion Market Association is no longer in
operation, or if the price of Refined Gold is not confirmed, acknowledged by or
quoted by the London Bullion Market Association, the Gold Price shall be
determined by reference to the price of Refined Gold in a manner endorsed by the
World Gold Council, failing which the Gold Price shall be determined by
reference to the price of gold on a commodity futures exchange mutually
acceptable to the Parties acting reasonably.
- 5 -
Governmental Authority means
any national, federal, state, provincial, regional, municipal, territorial or
local government, agency, department, ministry, authority, board, bureau,
tribunal, commission, official, court or securities commission, and any person
entitled under Applicable Law to exercise executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any of the foregoing
entities, including all tribunals, commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other person controlled by any of the
foregoing.
Group Collateral has the
meaning set out in Section 8.2(b) .
Group Security Agreements has
the meaning set out in Section 8.2(b)
Guarantors means Banro, Namoya
Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and Lugushwa Mining
S.A.
Hazardous Materials means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law.
Indebtedness of any person
means, without duplication:
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(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligation
until the amount of such obligation becomes a liability on the balance
sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
- 6 -
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(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or obligor); |
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(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
- 7 -
In addition, Indebtedness of the Banro Group Entities shall
include (without duplication) Indebtedness described in the preceding paragraph
that would not appear as a liability on the balance sheet of Banro if:
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(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
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(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
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(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
|
(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of
any of the Banro Group Entities; or |
|
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|
(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Insolvency Event means, in
relation to any person, any one or more of the following events or
circumstances:
|
(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
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(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
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|
(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such
proceeding; |
- 8 -
|
(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
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(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any person that
provides any Secured Financing, excluding any Banro Group Entity.
Material Adverse Effect means
any event, occurrence, change or effect that, when taken individually or
together with all other events, occurrences, changes or effects, is or could
reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
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|
(ii) |
limit, restrict or impair the ability of the Seller to
operate the Twangiza Project in all material respects in accordance with
the Operating Plan for the Twangiza Project in effect at the time of the
event, occurrence, change or effect; |
|
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|
(iii) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
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(iv) |
result in a Banro Event of
Default. |
Minimum Gold Price means
$1,100 per ounce.
Monthly Delivery Date means
the date no later than the fifth Business Day after the end of each calendar
month.
Net Proceeds means with
respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Purchaser upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators, as may be amended from time to time, or any
successor instrument, rule or policy.
Note Indenture means the
indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as
issuer, each of the guarantors named therein and Equity Financial Trust Company,
as trustee and collateral agent.
- 9 -
Operating Plan means the life
of mine operating plan for the Twangiza Project delivered to the Purchaser on
the date hereof.
Order means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Authority or other decision-making authority of competent
jurisdiction.
Parties means the parties to
this Agreement.
Payable Gold means 22,248
ounces of Refined Gold.
Permits means all licenses,
permits, approvals (including environmental approvals) authorizations, rights
(including surface and access rights and rights of way, and access to water and
power), privileges, concessions or franchises necessary for the construction,
development and operation of the Twangiza Project as is contemplated by the
Operating Plan.
Permitted Distributions means
any payment of Distributions required to satisfy any obligation under this
Agreement, Applicable Laws or the terms of any Secured Financing entered into in
accordance with this Agreement, as a result of any Affiliate of any PSA Entity
not otherwise having sufficient funds to satisfy such obligation.
Permitted Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
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|
(ii) |
following the termination of the Note
Indenture: |
|
(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
|
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|
(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
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|
(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
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|
(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
- 10 -
|
(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
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(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
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|
(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation obligations);
and |
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(H) |
liens in respect of the following: |
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[Details of individual lien holders
redacted] |
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(I) |
liens securing Permitted Indebtedness listed in clause
(ii)(1), (4), (5), (7) and (9) of such definition. |
Permitted Indebtedness means:
|
(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
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|
(ii) |
following the termination of the Note
Indenture: |
|
(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Purchaser and Namoya GSA
Holdings; |
|
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|
(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
|
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|
(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
- 11 -
|
(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
|
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|
(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 75% of the forecast gold production of the
Twangiza Project for the current month is the subject thereof; |
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(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
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(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchaser or the Collateral Agent on
its behalf; and (B) the ranking of the PSA Obligations vis-à-vis such
secured Indebtedness shall correspond to the ranking of the PSA
Obligations vis-à-vis the notes issued under the Note Indenture; |
|
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|
(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
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|
(9) |
Indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an individual,
corporation, body corporate, limited or general partnership, joint stock
company, limited liability corporation, joint venture, association, company,
trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prepayment Amount means
$20,000,000.
- 12 -
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture, those
Encumbrances that constitute Priority Liens (as defined in the Note
Indenture) ranking pari passu with the Secured Amount; |
|
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|
(ii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Plant means any
mill or other processing facility owned or operated or both by any Banro Group
Entity located on or near the Properties, to the extent that such mill or
processing facility was built with the primary intention of processing ore from
the Properties, or at which Produced Gold is processed.
Produced Gold means any and
all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore
or other products resulting from the further milling, processing or other
beneficiation of minerals mined, produced, extracted or otherwise recovered from
the Properties.
Project Assets means the
shares in the capital of the PSA Entities (other than Banro) and the Properties,
Processing Plant and all present and after-acquired real or personal property,
used or acquired for use by any Banro Group Entity in connection with the
mining, production or extraction of gold from the Properties.
Project Collateral means (A)
the Project Assets, including all present and after-acquired personal property
used in connection with, relating to or arising out of, in whole or in part, the
Project, and (B) the Produced Gold, and in each case including all proceeds
thereof except sales of Produced Gold in the ordinary course of business.
Properties means the mineral
claims, mineral leases and other mining rights, concessions and interests listed
in Schedule A, including all buildings structures improvements, appurtenances
and fixtures that form part of the Twangiza Project, whether created privately
or by the action of any Governmental Authority, and includes any term extension,
renewal, replacement, conversion or substitution of any such mineral claims,
mineral leases and other mining rights, concessions or interests, owned or in
respect of which an interest is held, directly or indirectly, by any Banro Group
Entity at any time during the Delivery Period, whether or not such ownership or
interest is held continuously. The Properties are depicted in the map included
in Schedule A.
PSA Collateral means the
Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means Banro and the
Seller, and any other Affiliate of Banro (now or hereafter incorporated) that
acquires any interest in the Twangiza Project.
PSA Obligations means all
present and future debts, liabilities and obligations of PSA Entities, or all of
them, to the Purchaser under this Agreement.
- 13 -
PSA Security means the charges
and security interests granted in favour of the Purchaser pursuant to the
Security Agreements.
Purchaser Event of Default has
the meaning set out in Section 11.1.
Receiving Party has the
meaning set out in Section 6.4(a) .
Refined Gold means marketable
metal bearing material in the form of gold bars or coins that is refined to
standards meeting or exceeding 995 parts per 1,000 fine gold.
Reimbursable Expenses has the
meaning set out in Section 13.3.
Restricted Person means any
person or entity that:
|
(i) |
is named, identified, described on or included on any
of: |
|
(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
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(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
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(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
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(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
|
(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
|
(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
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|
(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
|
(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Scheduled Monthly Quantities
means 618 ounces of Refined Gold.
Secured Amount has the meaning set
out in Section 8.2(a) .
- 14 -
Secured Financing means any
Indebtedness for borrowed money of, or lending facility or other financing
arrangement (including any secured derivative transactions entered into in
connection with such Indebtedness, or any other hedge financing) in favour of,
any Banro Group Entity that is secured by all or any part of the Project Assets.
Security Agreements means the Seller Security Agreements, the Group
Security Agreements and the Assignment, Subordination and Postponement of
Claims.
Seller Security Agreements has
the meaning set out in Section 8.2(a) .
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment
payments or other additions that may become payable in respect thereof, imposed
by any Governmental Authority, which taxes shall include all income or profits
taxes (including federal, provincial, and state income taxes) other than income
or profits taxes levied in respect of the income or profits of the Purchaser,
non-resident withholding taxes, sales and use taxes, branch profit taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
licence taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, land transfer taxes, capital taxes,
extraordinary income taxes, surface area taxes, property taxes, asset transfer
taxes, and other charges and obligations of the same or of a similar nature to
any of the foregoing.
Time of Delivery has the meaning set out in
Section 2.2(b) .
Transfer means to sell,
transfer, assign, convey, dispose or otherwise grant a right, title or interest
(including expropriation or other transfer required or imposed by law or any
Governmental Authority, whether voluntary or involuntary).
Twangiza Holdcos means
together, Banro Group (Barbados) Limited and Twangiza (Barbados) Limited.
Twangiza Project means the
Properties and the mining operations developed, constructed and operated at and
in respect of the Properties.
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
|
(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
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|
(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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|
(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
- 15 -
|
(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
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(e) |
A person (first person) is considered to control another
person (second person) if: |
|
(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an
obligation; |
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(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second person; |
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(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
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|
(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
and controls, controlling,
controlled by and under common control have corresponding meanings.
|
(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
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(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
- 16 -
|
(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
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Schedule A |
- |
Description of Sellers Properties (with map)
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Schedule B |
- |
Security Agreements |
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Schedule C |
- |
Banro and Seller Representations and Warranties
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Schedule D |
- |
Purchaser Representations and Warranties |
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Schedule E |
- |
Termination Amount |
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Schedule F |
- |
Dispute Resolution |
ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable
Gold |
|
(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchaser, and the
Purchaser hereby agrees to purchase from the Seller, the Payable Gold,
free and clear of all Encumbrances, in exchange for the Prepayment
Amount. |
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(b) |
As further provided in Section 4.3(b) Payable Gold shall
not be reduced for, and the Purchaser shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable processor agreement. |
|
(a) |
During the Delivery Period, the Payable Gold shall be
sold and delivered to the Purchaser on each Monthly Delivery Date in the
Scheduled Monthly Quantities in accordance with the terms of this
Agreement. |
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|
(b) |
The Seller shall deliver to the Purchaser all Payable
Gold to be delivered under this Agreement by way of credit or allocation
to the metal account or accounts designated by the Purchaser from time to
time, or physical delivery to such other location specified by the
Purchaser from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to be
unreasonably withheld. Delivery of the Payable Gold to the Purchaser shall
be deemed to have been made at the time on the date the Payable Gold is
credited or allocated or physically delivered, as applicable, to the
designated metal account of the Purchaser (the Time of
Delivery). Title to, and risk of loss of, the Payable Gold shall pass
from the Seller to the Purchaser at the Time of Delivery. The Seller
acknowledges that the Purchaser intends to engage a selling agent that
will take delivery of the Payable Gold on behalf of the Purchaser for
purposes of monetizing the Payable Gold. All costs and expenses pertaining
to each delivery of the Payable Gold to the Purchaser, including such
selling arrangements, shall be borne by the Seller so long as the
Purchasers accounts are in customary locations in United Kingdom,
Switzerland or South Africa. |
- 17 -
|
(c)
|
The Seller hereby represents and warrants to the
Purchaser that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of the Purchaser, (ii) the Seller
will have good, valid and marketable title to such Payable Gold, and (iii)
such Payable Gold will be free and clear of all Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchaser,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchaser, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchaser the Refined Gold physically resulting
from Produced Gold. |
ARTICLE
3
PREPAYMENT
|
(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchaser of the Payable Gold, the Purchaser hereby agrees to pay the
Prepayment Amount in cash against, and as a prepayment of the purchase
price for the Payable Gold, subject to the conditions set out in Sections
3.2 and 3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Prepayment Amount except as expressly provided in this
Agreement. The Purchaser will not be entitled to demand repayment of the
Prepayment Amount except to the extent expressly set forth in this
Agreement. |
- 18 -
3.2 |
Use of Prepayment
Amount |
The Seller shall use, and Banro shall cause to be used, the
Prepayment Amount only to pay certain outstanding dividends as of the last
payment date on or prior to the date of receipt by the Seller of the Prepayment
Amount on preferred shares in the capital of Banro Group (Barbados) Limited and
the Series A preferred shares in the capital of Banro, to repay accounts payable
and thereafter, for general corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchaser |
The Purchaser shall pay the Prepayment Amount to or to the
order of the Seller on the Closing Date, by wire transfer of immediately
available funds to the bank account or accounts designated by the Seller in
writing, once each of the following conditions has been satisfied in full:
|
(a) |
Banro and the Seller shall have delivered to the
Purchaser a certificate of status, good standing or compliance (or
equivalent) for each PSA Entity and the Twangiza Holdcos, issued by the
relevant Governmental Authority dated no earlier than five Business Days
prior to the Closing Date; |
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|
(b) |
Each PSA Entity shall have executed and delivered to the
Purchaser a certificate of a senior officer of each in form and substance
satisfactory to the Purchaser, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Purchaser may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the
Purchaser a favourable opinion, in form and substance satisfactory to the
Purchaser, acting reasonably, dated as of the Closing Date, from external
legal counsel to Banro, the Seller, the Twangiza Holdcos and the PSA
Entities as to (i) the legal status of each, (ii) the corporate power and
authority of each to execute, deliver and perform this Agreement and the
Security Agreements to which it is a party, (iii) the execution and
delivery of this Agreement and the Security Agreements to which it is a
party and the enforceability of this Agreement and the Security Agreements
against each, (iv) that this Agreement and the Security Agreements, and
the performance by Banro and the Seller of the obligations hereunder or
thereunder, do not conflict with, violate, result in a breach of, or
constitute a default or an event creating rights of acceleration,
termination, modification or cancellation or a loss of rights under (with
or without the giving notice or lapse of time or both), the Note
Indenture, the Collateral Trust Agreement, or any of the Collateral
Documents (as defined in the Note Indenture) governed by Ontario law, (v)
the outstanding share capital of the Seller and the Twangiza Holdcos, (vi)
the creation of valid mortgages and charge upon, and security interests in
(including as to ranking of such security interests), the PSA Collateral
under the Security; and (vii) the due registration or filing of the
Security Agreements and, where applicable, the perfection of the security
interest of the Purchaser (including as to ranking of such security
interests), under such Security Agreements and the results of the usual
searches that would be conducted in connection with the security that is
the subject of such Security Agreements; |
- 19 -
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the
Purchaser a legal opinion addressed to the Purchaser from external
counsel, in form and substance satisfactory to the Purchaser, with respect
to title to the Properties dated as of the Closing Date; |
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
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(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
except for those that would not
reasonably be expected to have a Material Adverse Effect;
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(g) |
each PSA Entity shall have delivered to the Purchaser a
certificate of a senior officer confirming: |
|
(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse
Effect; |
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(h) |
Banro shall have amended the Note Indenture and the
Collateral Trust Agreement and security agreements as required by the
Purchaser to, among other things, characterize the Secured Amount as a
Priority Lien Debt (as defined in the Note Indenture), require the trustee
under such Collateral Trust Agreement and security agreements to transfer
the Project Collateral only in accordance with the terms of the gold
purchase and sale agreement among Banro, Namoya Mining S.A. and Namoya GSA
Holdings, and to preserve the collateral trust following termination of
the Note Indenture; |
- 20 -
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(i) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchaser under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchaser, under such Security
Agreements; |
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(j) |
Banro and the Seller shall execute and deliver an
agreement with the Purchaser and Auramet International LLC
("Auramet"), creating an account in favour of the Purchaser and
setting out the terms by which Auramet will assist the Purchaser in
monetizing deliveries of Payable Gold; |
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(k) |
in accordance with Applicable law, Banro shall cause each
of [names of individuals redacted] and each other equity holder of
any Banro Group Entity that is an individual, but is not either an
employee of Banros counsel in Democratic Republic of Congo or an employee
of Banro to transfer for no or nominal consideration their ownership of
any such equity securities to one or more current employees of Banros
counsel in Democratic Republic of Congo or current employees of
Banro; |
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(l) |
the Seller paid all Reimbursable Expenses of the
Purchaser payable as at the Closing Date; and |
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(m) |
Banro and the Seller shall have delivered to the
Purchaser prior to the Closing Date a certificate of insurance coverage or
other evidence of acceptable insurance
coverage. |
3.4 |
Conditions Precedent in Favour of the
Seller |
On or before the Closing Date, the Purchaser will satisfy each
of the following conditions:
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(a) |
the Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for the
Purchaser, issued by the relevant Governmental Authority; |
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(b) |
the Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of the Purchaser, in form
and substance satisfactory to Banro and the Seller, acting reasonably, as
to the constating documents of the Purchaser; the resolutions of the sole
director of the Purchaser, authorizing the execution, delivery and
performance of this Agreement and the transactions contemplated hereby;
the names, positions and true signatures of the persons authorized to sign
this Agreement on behalf of the Purchaser; and such other matters
pertaining to the transactions contemplated hereby as Banro and the Seller
may reasonably require; |
- 21 -
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(c) |
the Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to the
Purchaser as to (i) the legal status of the Purchaser, (ii) the corporate
power and authority of the Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
the Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by the Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice or lapse of time
or both would become a Purchaser Event of Default) has occurred and is
continuing. |
3.5 |
Satisfaction of Conditions
Precedent |
|
(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the
date provided or, if no date is provided, as promptly as reasonably
practicable. The Parties shall co-operate in exchanging such information
and providing such assistance as may be reasonably required in connection
with the foregoing. |
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(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchaser, and may be waived by the Purchaser
in its sole discretion in whole or in part in writing. Each of the
conditions set forth in Section 3.4 is for the exclusive benefit of Banro
and the Seller, and may be waived by Banro and the Seller in their sole
discretion in whole or in part in writing. |
ARTICLE
4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
4.2 |
Additional Gold
Deliveries |
On each Additional Gold Delivery Date, the Seller shall sell
and deliver to the Buyer an amount of Refined Gold (an Additional Gold
Delivery Amount) equal to the greater of:
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(a) |
zero; and |
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(b) |
the product of: |
|
(i) |
the Scheduled Monthly Quantity delivered on the Monthly
Delivery Date corresponding to such Additional Gold Payment Date,
and |
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(A) |
the Minimum Gold Price |
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minus |
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(B) |
the Gold Price on the Business Day following
the Monthly Delivery Date, |
divided by the Gold Price on the
Business Day following the Monthly Delivery Date.
Each Additional Gold Delivery Amount shall be delivered in
accordance with the provisions of this Agreement.
|
(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchaser shall be made without any deduction, withholding, charge or levy
on account of any Taxes, all of which shall be for the sole account of the
Seller. All Taxes, if any, as are required to be so deducted, withheld,
charged or levied by the Seller or any of its Affiliates on any such
delivery or payment, shall be paid by the Seller delivering or paying to
the Purchaser or on their behalf, in addition to such delivery or payment,
such additional delivery or payment as is necessary to ensure that the net
amount received by the Purchaser (net of any such Taxes, including any
Taxes required to be deducted, withheld, charged or levied on any such
additional amount) equals the full amount that the Purchaser would have
received had no such deduction, withholding, charge or levy been
required. |
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(b) |
If the Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.3(a) hereof, the Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.3(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of the Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of the Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental
Authority. |
In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Purchaser, on the one hand, and the Seller on the other
hand, agree that they shall negotiate in good faith with each other to amend
this Agreement so that the other Parties and their Affiliates are no longer
adversely affected by any such enactment, revision, implementation, amendment or
interpretation, as the case may be; provided that any amendment to this
Agreement shall not have any adverse effect on the Seller and its Affiliates on
the one hand, and the Purchaser and its Affiliates on the other hand.
- 23 -
Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date, calculated and
compounded monthly in arrears. Any dollar amount or Refined Gold owing by a
Party to any other Party under this Agreement may be set off against any dollar
amount or Refined Gold owed to such Party by the other Party. Any amount of
Refined Gold set off and withheld against any non-payment by a Party shall be
valued at the Gold Price as of the first trading day that such amount of Refined
Gold became payable to such Party.
ARTICLE 5
REPORTING; BOOKS AND RECORDS
5.1 |
Notice of
Information |
Prior to delivery to the Purchaser of any of the information
set out in this Article 5 or otherwise in this Agreement, Banro and the Seller
shall inform the Purchaser if such information would be considered material
non-public information of Banro. In such event, the Purchaser shall have the
option, in its sole discretion, to (a) refuse to accept such information, or (b)
require that such information be either (i) publicly disclosed within two
Business Days, or (ii) where such information constitutes scientific and
technical information representing a material change to the Twangiza Project,
delivered at a subsequent date within 45 days, together with an updated
technical report in accordance with NI 43-101, and notice of such refusal or
delayed delivery will constitute a valid waiver, or partial waiver, as the case
may be, of the obligation to deliver such information.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchaser:
|
(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis,
including: |
|
(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
- 24 -
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(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 5.2(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
5.3 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 5.2(a),
5.2(b), 5.2(c) and 5.2(e) shall be provided by the Seller to the Purchaser. For
the purposes of this Section 5.3 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
If during the Delivery Period, Banro shall cease to be a
reporting issuer under Applicable Law, the PSA Entities shall permit the
Purchaser and its authorized representatives and agents to perform audits or
other reviews and examinations of its books and records from time to time at
reasonable times at the Purchasers sole risk and expense and upon five Business
Days notice, to confirm compliance with the terms of this Agreement, provided
that unless there is a continuing Banro Event of Default, the Purchaser and its
authorized representatives and agents will not exercise such rights more often
than one (1) time during any calendar quarter. The Purchaser shall diligently
complete any audit or other examination permitted hereunder.
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchaser and its
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Twangiza Project, in each case to monitor the mining and
processing operations on the Twangiza Project. Provided there has been no
Banro Event of Default that is continuing, the Purchaser may avail itself
of such right of access a maximum of twice per calendar year (including
the mill in respect thereof), and for this purpose, invitations from Banro
will not reduce the number of visits the Purchaser may
request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchaser shall have the
right to conduct an investors tour on the Twangiza Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Twangiza Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchaser and its invitees, and the Purchaser shall (a)
comply and request that its invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchaser or Banro and the Seller or any
of their respective invitees, employees, officers, directors, agents, or
representatives caused by the Purchasers exercise of its rights under
this Section. |
ARTICLE 6
COVENANTS
6.1 |
Conduct of
Operations |
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(a)
|
Banro and the Seller will, and will cause all PSA
Entities to, operate the Twangiza Project Assets on a commercial basis as
though the Seller has a full economic interest in all the gold produced
from the Properties. Banro and the Seller shall ensure that (i) all
cut-off grade, short term mine planning and production decisions
concerning the Twangiza Project shall be based on gold prices typical of
normal industry practice and consistent with the practices of Banro and
its Affiliates as at the date of this Agreement in connection with such
decisions, and (ii) all longer term planning and resource and reserve
calculations concerning the Twangiza Project shall use gold prices based
on normal industry practice and consistent with the historical practices
of Banro and its Affiliates in connection with such planning and
calculations. |
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(b) |
Subject to Section 6.1(a), all decisions regarding the
Twangiza Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Twangiza Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Twangiza Project, and (iv) except
as provided herein, the sale of gold and terms thereof, shall be made by
the Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 6.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Twangiza Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
6.2 |
Preservation of Corporate
Existence |
|
(a) |
Except as permitted in Section 6.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 7.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in
favour of the Purchaser all the obligations of such Party under this
Agreement and any Security Agreement to which it is a
party. |
|
(a) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(b) |
Banro and the Seller shall insure the Twangiza Project in
such amounts and with such coverage as is customary in the mining industry
for the operation of the Twangiza Project. Banro and the Seller covenant
and agree that in the event of any loss or damage that is insured prior to
the end of the Delivery Period, the Seller shall at its option either (i)
use all Net Proceeds of any insurance payment received by a Banro Group
Entity to rebuild or repair all damaged facilities forming part of the
Twangiza Project, or (ii) use the Purchasers share of the Net Proceeds of
such insurance payment received by any Banro Group Entity within 30 days
after receipt of such proceeds by such Banro Group Entity, to acquire
Refined Gold in accordance with Section 2.2(d) and shall deliver to the
Purchaser such amount of Refined Gold, the Purchasers share being
calculated as the ratio of the net present value of Payable Gold not
delivered to the Purchaser to the value of the Twangiza Project when
measured by the same criterion which establishes the value of such
Purchasers interest. A failure to agree on the foregoing proportion is
arbitrable under Section 13.1. |
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(c) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Purchaser at reasonable
intervals no more than once per year, furnish to the Purchaser a
certificate setting forth the nature and extent of all insurance
maintained by or on behalf of the PSA Entities in accordance with
Section6.3(a). Banro and the Seller shall, upon the request of the
Purchaser, provide the Purchaser with copies of all insurance policies as
in effect from time to time relating to the Project
Assets. |
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(d) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
|
(a) |
Each Party (a Receiving Party) agrees that it
shall maintain as confidential and shall not disclose, and shall cause its
Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 5, 2014
(Confidential Information), provided that a Receiving Party may
disclose Confidential Information in the following
circumstances: |
|
(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 6.4(c) and 13.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 13.1; |
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
- 28 -
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(v) |
with the consent of the disclosing Party; and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
|
(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 6.4(a)(i) are made aware of this Section 6.4 and
comply with the provisions of this Section 6.4. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Purchaser will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 6.4(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
6.5 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchaser
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 6.5, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
- 29 -
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Twangiza Project.
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Twangiza
Project.
[Redacted]
|
(a) |
During the Delivery Period, Banro shall not (i) declare
or pay any dividend on the common shares in the capital of Banro, or (ii)
make any payments to directors or management of Banro not in the ordinary
course of business, and shall not, and will cause the Banro Group Entities
to not, pursue any construction of projects other than the Twangiza
Project and the projects known as the Namoya Project, the Kamituga Project
and the Lugushwa Project and will not pursue any exploration activities
other than in connection with such projects and with respect to properties
held by Banro Congo Mining S.A. |
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(b) |
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Purchaser in
accordance with the terms of this Agreement. The Parties acknowledge and
agree that any breach by Banro of its obligations under this Section would
cause the Purchaser irreparable harm for which monetary damages alone
would not be a sufficient remedy and that therefore the Purchaser may seek
and obtain orders of specific performance, injunctions and other equitable
remedies and remedies available under civil laws against Banro with
respect thereto as a court of competent jurisdiction or an arbitrator
under Section 13.1 may see fit to grant with respect to any such breach
and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies. |
ARTICLE 7
BANRO
TRANSFERS AND CONTROL
7.1 |
Owner of Project
Assets |
Subject to Section 7.3 and except as provided in Section8.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 7.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 7.1 shall not restrict any leased personal property
(provided that the lessee is the Seller) or personal property that is equipment
that is obsolete or no longer in use under the Operating Plan.
- 30 -
7.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 7.3, Banro and the Seller shall
not, and shall ensure that the Twangiza Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 7.3(c), holding Project Assets, does not during the Delivery Period:
|
(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 7.3(c), holding Project
Assets. |
7.3 |
Permitted Transfers and Changes of
Control |
Section 7.2 shall not prohibit a Transfer or Change of Control,
if: Transfer of the Project Asset
|
(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA
Entity: |
|
(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Purchaser all of the Sellers
and, if applicable, the other Banro Group Entities obligations under this
Agreement pursuant to an agreement in form and substance satisfactory to
the Purchaser, acting reasonably; |
- 31 -
|
(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
8.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 8.2 |
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(a)(vii)); |
Change of Control
|
(b) |
in the case of a Change of Control of Banro, the Seller,
the Twangiza Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
7.3(c): |
|
(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed Change of
Control; |
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(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
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(A) |
assumes in favour of the Purchaser all of the obligations
of Banro under this Agreement, such assumption to occur by an agreement in
form and substance satisfactory to the Purchaser, acting reasonably;
and |
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(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
|
(iii) |
in respect of such Change of
Control: |
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(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 8.2; |
- 32 -
|
(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(v) |
the Purchaser confirms in writing that it does not
reasonably expect such Transfer or Change of Control to have a Material
Adverse Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 7.3(b)(v)); |
Inter-corporate Transfer
|
(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of
Banro: |
|
(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
|
(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
7.3(a)(i) through 7.3(a)(vii) are complied with mutatis mutandis;
or |
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(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
|
(1) |
the provisions of Sections 7.3(a)(i), 7.3(a)(iv),
7.3(a)(v) and 7.3(a)(vi) are complied with mutatis mutandis; and |
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(2) |
the Seller provides a confirmation in favour of the
Purchaser that its obligations under this Agreement shall continue in full
force and effect despite any such Transfer; |
Joint Ventures and Minority Dispositions
|
(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
|
(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
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(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
- 33 -
|
(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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(iv) |
such other person agrees in a document, or documents,
acceptable to the Purchaser, acting reasonably, with the PSA Entity, the
Purchaser and any other such person to acknowledge the obligations of the
Seller under this Agreement and the Security Agreements, including the
granting to the Purchaser of all the security interests contemplated
thereunder; provided that, if such other person acquires any legal right,
title or interest in and to any of the Project Assets (including any
registered or recorded title in and to the Properties), such person
assumes on a joint and several basis with the Seller all of the
obligations and duties under this Agreement and grants the same charges
and security interests in, to and over the Project Assets to which it
acquires any legal right, title or interest, and enters into the same
Security Agreements entered into by the Seller and its subsidiaries
pursuant to Section 8.2; |
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(v) |
all filings have been made and all other actions have
been taken that are required in order for the Purchaser to continue at all
times following such transaction to have the valid and perfected security
interest contemplated by Section 8.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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(viii) |
the Purchaser confirms in writing that it does not
reasonably expect such minority interest disposition, joint venture or
other similar commercial arrangement to have a Material Adverse Effect;
or |
With Consent
|
(e) |
the Purchaser provides its prior written
consent. |
ARTICLE 8
SECURITY
8.1 |
Financings and
Encumbrances |
|
(a) |
During the Delivery Period, except for Permitted
Indebtedness, no PSA Entity shall incur or enter into any
Indebtedness. |
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(b) |
Except as provided in this Article 8, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
- 34 -
|
(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Purchaser, in form and substance satisfactory to the
Purchaser, acting reasonably, guaranteeing the performance, when due, of
all PSA Obligations; and (ii) grant, as security for the payment and
performance, when due, of all PSA Obligations, to and in favour of the
Purchaser first ranking charges and security interests (subject only to
the Prior Ranking Permitted Encumbrances) in, to and over Project
Collateral (other than the Properties and Processing Plant), pursuant to
one or more agreements (the Seller Security Agreements) executed
by each to and in favour of the Purchaser, in form and substance
satisfactory to the Purchaser, acting reasonably, the charged amount (the
Secured Amount ) of such charges and security interests being
initially the Prepayment Amount, such amount to reduce rateably upon
delivery of each Scheduled Monthly Quantity. |
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(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Purchaser, in form and substance satisfactory
to the Purchaser, acting reasonably, guaranteeing the payment and
performance, when due, of all PSA Obligations; and (ii) grant, as security
for its obligations under such guarantee to and in favour of the
Purchaser, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral), all
pursuant to one or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Purchaser,
acting reasonably. |
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(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and Postponement
of Claims), in favour of and in form and substance satisfactory to
the Purchaser, acting reasonably, that subordinates and postpones the
enforcement of any such debts, liabilities and obligations and the
realization of any charges or security interests to secure such claims to
the Security Agreements and, from and after a Banro Event of Default, or
any event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, and until such Banro Event of
Default is remedied, subordinates and postpones the payment of all such
debt, liabilities and obligations (other than Permitted Distributions) to
the payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
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(d) |
If so requested in writing by the Purchaser, the Banro
Group Entities shall not, for so long as a Banro Event of Default, or any
event or circumstance which, with notice, the passage of time or both,
would constitute a Banro Event of Default, continues, make any
Distribution other than a Permitted Distribution. |
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(e) |
At the Purchasers request, Banro shall, and shall cause
the Seller (and any other Banro Group Entity from which Produced Gold is
sold) to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times, the Seller shall not, and Banro shall ensure that the Seller
does not, make any Distributions other than a Permitted Distribution from
such account if a Banro Event of Default, or event which with the giving
of notice or the passage of time or both would constitute a Banro Event of
Default, has occurred and is continuing, or if a Banro Event of Default
would occur or arise immediately after, or as a result of, making a
Distribution. |
- 35 -
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(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Purchaser may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Purchaser has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Purchaser continues to secure the PSA Obligations and with no change in
the priority thereof. The Seller shall pay all costs and expenses
associated with the foregoing including in connection with the preparation
and registration of all documentation in connection therewith that is
required by the Purchaser. |
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
8.3 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Purchaser shall have
substantially similar access rights and obligations as provided in Section 5.5.
- 36 -
ARTICLE
9
REPRESENTATIONS AND WARRANTIES
9.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Purchaser is
entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule C to the Purchaser on and
as of the date of this Agreement on a joint and several basis. The
representations and warranties set forth in Schedule C shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
9.2 |
Representations and Warranties of the
Purchaser |
The Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, hereby makes the
representations and warranties set forth in Schedule D to Banro and the Seller
on and as of the date of this Agreement. The representations and warranties set
forth in Schedule D shall be deemed to be repeated by the Purchaser as of the
date of the Closing Date.
9.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule C and
Schedule D shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
ARTICLE 10
BANRO
EVENTS OF DEFAULT
10.1 |
Banro Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of Default):
|
(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchaser on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Purchaser
notifying the Seller of such default; |
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(b) |
other than as provided in Section 10.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Purchaser to the PSA
Entities of written notice of such breach or default, or such longer
period of time as the Purchaser may determine in its sole
discretion; |
- 37 -
|
(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Purchaser to Banro and the Seller of written notice of
such inaccuracy, or such longer period of time as the Purchaser may
determine in its sole discretion; |
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(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
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(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Purchaser notifying the PSA Entities of such
default. |
|
(a) |
If a Banro Event of Default occurs and is continuing, the
Purchaser shall have the right, upon written notice to Banro and the
Seller at its option and in addition to and not in substitution for any
other remedies available at law or equity, to take any or all of the
following actions: |
|
(i) |
demand all amounts and deliveries owing by the Seller to
the Purchaser; |
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(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 10.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the Purchaser
hereunder, but for the occurrence of such Banro Event of Default. Upon
demand from the Purchaser, the Seller shall promptly pay all such amounts
to the Purchaser; and (iii) enforce the PSA Security.
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- 38 -
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(b) |
The Parties hereby acknowledge and agree that: (i) the
Purchaser will be damaged by a Banro Event of Default; (ii) it would be
impracticable or extremely difficult to fix the actual damages resulting
from a Banro Event of Default; (iii) any sums payable in accordance with
Section 10.2(a) with respect to a Banro Event of Default are in the nature
of liquidated damages, not a penalty, and are fair and reasonable; and
(iv) the amount payable in accordance with Section 10.2(a) or with respect
to a Banro Event of Default represents a reasonable estimate of fair
compensation for the losses that may reasonably be anticipated from such
Banro Event of Default in full and final satisfaction of all amounts owed
in respect of such Banro Event of Default. |
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(c) |
For greater certainty, if the Purchaser does not exercise
its right under Section 10.2(a)(ii), the obligations of Banro and the
Seller or any successors shall continue in full force and
effect. |
ARTICLE 11
PURCHASER EVENTS OF DEFAULT
11.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of Default):
|
(a) |
the Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect, and such breach or default is not remedied within a period of 30
days following delivery by the Seller to the Purchaser of written notice
of such breach or default, or such longer period of time as the Seller may
determine in its sole discretion; or |
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(b) |
any of the representations or warranties given by the
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to the Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
If all of the conditions precedents set out in Section 3.3 have
been satisfied and a Purchaser Event of Default in respect of a failure to pay
the Prepayment Amount occurs and is continuing and the Purchaser fails to cure
such Purchaser Event of Default in full within 90 days of written notice from
the Seller of such default, then the Seller may elect to at any time thereafter
so long as the Purchaser has not already cured the Purchaser Event of Default,
to terminate the Agreement. In the event of any other Purchaser Event of Default
under Section 11.1 having occurred that is continuing, then Banro and the Seller
shall have no right to terminate this Agreement, but shall be entitled to all
other remedies available to it at law or in equity.
- 39 -
ARTICLE 12
TERMINATION ENTITLEMENT
12.1 |
Termination
Entitlement |
If the Seller wishes to terminate the delivery of Payable Gold
to the Purchaser during the Delivery Period in accordance with the terms and
conditions of this Agreement (a Seller Termination Event), it shall
provide written notice thereof to the Purchaser and the purchase of Refined Gold
not delivered shall be cancelled and the Purchaser shall be entitled to receive
a one-time termination amount (the Termination Amount) [Commercially
sensitive information redacted].
ARTICLE 13
GENERAL
13.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officer of each of Banro and the Purchaser for prompt
resolution. Any such dispute, controversy or claim which cannot be resolved by
the chief executive officers within 15 days after it has been so referred to
them hereunder, including the determination of the scope or applicability of
this Agreement to arbitrate, shall be settled by binding arbitration in
accordance with the rules for arbitration set out in Schedule F. The
determination of such arbitrator shall be final and binding upon the Parties and
there shall be no appeals from any determination of the arbitrator. Judgment on
the award may be entered in any court having jurisdiction. This Section 13.1
shall not preclude the Parties from seeking provisional remedies in aid of
arbitration from a court of competent jurisdiction. The Parties covenant and
agree that they shall conduct all aspects of such arbitration having regard at
all times to expediting the final resolution of such arbitration.
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
13.3 |
Reimbursement of
Expenses |
|
(a) |
The Seller and Banro shall pay to the Purchaser all
reasonable costs and expenses (including all reasonable legal fees and
disbursements of counsel) incurred by the Purchaser in connection with
this Agreement and the other related transactions, including:
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- 40 -
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(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Purchaser and any on-site inspections by the Purchaser or its
representatives; |
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(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated thereunder; |
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(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Purchaser at law or in
equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
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(viii) |
the incorporation and organization of the Purchaser, as
well as the initial issuances of notes or other investment instruments
required to capitalize the Purchaser with the Prepayment Amount;
and |
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(ix) |
the ongoing fees and expenses in connection with the
administration of the Purchaser, including fees and expenses related to
fiscal and collateral agents, valuation tax reporting and
audit. |
(collectively, the Reimbursable
Expenses).
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(b) |
The obligations of the Seller under this Section 13.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
13.4 |
Termination;
Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 6.4, 6.8, 10.2, 11.2,
13.1, 13.7, 13.9 and Schedule F and such other provisions of this Agreement as
are required to give effect thereto.
- 41 -
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Purchaser and any Banro Group Entity.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Purchaser on the one hand and any Banro Group
Entity on the other hand.
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
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(a) |
If to either Banro or the
Seller, to: |
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Banro Corporation |
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1 First Canadian Place |
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Suite 7070, 100 King Street
West |
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Toronto, Ontario, M5X 1E3,
Canada |
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Attention: |
Chief Financial Officer |
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Telecopier No.: |
416-366-7722 |
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with a copy to: |
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Norton Rose Fulbright Canada
LLP |
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Royal Bank Plaza, South Tower,
Suite 3800 |
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200 Bay Street |
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Toronto, Ontario, M5J 2Z4,
Canada |
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Attention: |
Mike Moher |
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Telecopier No.: |
416- 216-3930 |
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(b) |
If to the Purchaser, to: |
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[Redacted] |
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- 42 -
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with a copy to: |
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Goodmans LLP |
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333 Bay Street, Suite 3400
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Toronto, Ontario M5H 2S7
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Attention: |
Kari MacKay |
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Telecopier No.: |
416-979-1234 |
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
- 43 -
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
13.13 |
Priority Debt Sharing
Confirmation |
The Purchaser hereby agrees, for the benefit of all holders of
each other existing and future Series of Priority Lien Debt and each existing
and future Priority Debt Representative, that all Priority Lien Obligations will
be and are secured equally and ratably by all Liens (as defined in the
Collateral Trust Agreement) at any time granted by Banro or any Obligor (as
defined in the Collateral Trust Agreement) to secure the obligations in respect
of the Priority Notes, whether or not upon property otherwise constituting
Collateral (as defined in the Collateral Trust Agreement), that all such Liens
will be enforceable by the Collateral Agent for the benefit of all holders of
Priority Lien Obligations equally and ratably (except that the Priority Stream
Obligations (as defined in the Collateral Trust Agreement) shall be paid in
priority to the other Priority Lien Obligations in accordance with Section
3.4(a) of the Collateral Trust Agreement), and that the Purchaser is bound by
the provisions in the Collateral Trust Agreement relating to the order of
application of proceeds from enforcement of such Liens, and consent to and
direct the Collateral Agent to perform its obligations under the Collateral
Trust Agreement.
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
The Purchaser shall be entitled at any time and from time
to time to Transfer any, or all, of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection therewith may transfer a
participating or other interest in this Agreement. |
- 44 -
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(c) |
Except as provided in Section 7.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Purchaser. In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
TWANGIZA GFSA HOLDINGS
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Per: |
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Name: |
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Title: |
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BANRO CORPORATION |
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Per: |
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Name: |
Richard Brissenden |
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Title: |
Chairman of the Board |
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TWANGIZA MINING S.A. |
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Per: |
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Name: |
Desire Sangara |
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Title: |
Chairman of the Board
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SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. Dated
as of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY AGREEMENTS
This is Schedule B to the Gold Purchase and Sale
Agreement between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining
S.A. Dated as of February 27, 2015
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Joinder and sharing confirmations as Priority
Lien Debt |
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Guarantees contemplated by Section 8.2(b)
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Assignment, Subordination and Postponement of
Claims contemplated by Section 8.2(c) |
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Pledge of accounts with Auramet International
LLC |
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Pledge of accounts with any Processor
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SCHEDULE C
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule C to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchaser as
follows:
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(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non- assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Twangiza (Barbados) Limited; |
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(f) |
the authorized share capital of Twangiza (Barbados)
Limited consists of an unlimited number of common shares and 20,000
preferred shares, of which, as of the date hereof, (i) only 1,200,000 common shares are issued
and outstanding as fully paid and non-assessable shares in the capital of
Twangiza (Barbados) Limited and are legally and beneficially owned as to 100% by
Banro Group (Barbados) Limited, and (ii) only 20,000 preferred shares are issued
and outstanding as fully paid and non-assessable shares in the capital of
Twangiza (Barbados) Limited and are legally and beneficially owned as to 100% by
investment funds managed by Gramercy Funds Management LLC; |
- 2 -
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right,
title or interest in or to, the Twangiza Project, the Properties, the
Project Assets or the gold produced from the Properties; |
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Twangiza Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Twangiza Project, the Properties and
all other properties of the Banro Group Entities, other than those that
are not necessary on the date this representation and warranty is given
and are expected to be obtained in the ordinary course of business by the
time they are necessary, where the failure to have or obtain such
Approvals would not reasonably be expected to have a Material Adverse
Effect, and there are no facts or circumstances that might reasonably be
expected to adversely affect the issuance or obtaining of any such
material Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Twangiza Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Twangiza Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Twangiza
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Twangiza Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Twangiza Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the |
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Bribery Act (United Kingdom)). Without limiting
the generality of the foregoing, each Banro Group Entity is in material
compliance with all applicable Environmental Laws, and there are no
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending or, to the best of its knowledge, threatened against
or affecting any Banro Group Entity with respect to the ownership, use,
maintenance and operation of any of the Twangiza Project, the Properties
and the Project Assets relating to any applicable Environmental Laws,
where any adverse determination with respect thereto or liability imposed
therein could reasonably be expected to result in a Material Adverse
Effect and such adverse determination is reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Twangiza Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Twangiza Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with the Toronto
Stock Exchange (all such documents filed prior to the date of execution of
this Agreement, the Public Disclosure Documents) since January 1,
2013. As of the effective date of such Public Disclosure Documents, to its
knowledge, none of the Public Disclosure Documents contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, it being
acknowledged that if there is any inconsistency between two or more documents comprising the
Public Disclosure Documents regard shall be had to the last filed document. All
of the Public Disclosure Documents, as of their respective effective dates (and
as of the effective dates of any amendments thereto), complied as to both form
and content in all material respects with the requirements of applicable
Securities Laws or were amended on a timely basis to correct deficiencies
identified by securities commissions or similar securities regulatory
authorities. Banro has not filed any confidential material change report with
any securities regulatory authority that at the date of execution of this
Agreement remains confidential. There is no material adverse change concerning
Banro which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this Agreement; |
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Twangiza Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements referred to in the
first sentence of paragraph (y) above or in the notes thereto, other than (i)
liabilities or obligations arising in the ordinary course of business since
September 30, 2014 or publicly announced by Banro, or obligations to Auramet
International LLC pursuant to the gold sale arrangements with Auramet
International LLC; |
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock- out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America (Foreign
Company Plan) that is intended to qualify for special tax treatment meets all
of the requirements for such treatment and has obtained all necessary approvals
of all relevant Governmental Authorities. No Foreign Company Plan has any
unfunded liabilities, determined in accordance with generally accepted
accounting principles, that have not been fully accrued on Banros financial
statements or that will not be fully offset by insurance. All Foreign Company
Plans are registered where required by, and are in good standing under, all
Applicable Laws. For purposes of this paragraph, Employee Benefit Plan
means any employee benefit plan, program, policy or arrangement sponsored,
maintained or contributed to by a Banro Group Entity or any of their respective
Affiliates or with respect to which the Seller, any Banro Group Entity or any of
their respective Affiliates has any liability or obligation; |
- 7 -
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Twangiza Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
- 8 -
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE D
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
The Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is an exempted company duly incorporated and validly
existing under the laws of Cayman Islands and is up to date in respect of
all filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE E
TERMINATION AMOUNT
This is Schedule E to the Gold Purchase and Sale
Agreement between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining
S.A. dated as of February 27, 2015
[Commercially sensitive information redacted]
SCHEDULE F DISPUTE RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Twangiza GFSA Holdings, Banro Corporation and Twangiza Mining S.A. dated
as of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this
Agreement.
1. |
Initiation of Arbitration
Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the other Party
(the Respondent) a statement of claim setting out in sufficient detail
the facts and any contentions of law on which it relies, and the relief that it
claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of reply. |
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have not previously been
submitted by any Party, and (where practicable) by any relevant samples. |
- 2 -
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration hearing. |
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3. |
Meetings and Hearings |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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4. |
The Decision |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
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5. |
Jurisdiction and Powers of the Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
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(i) |
determine any question of law arising in the
arbitration; |
- 3 -
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(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to
which it may be entitled. |
- 4 -
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
GOLD PURCHASE AND SALE AGREEMENT |
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NAMOYA GSA HOLDINGS, among other purchasers |
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and |
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BANRO CORPORATION |
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and |
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NAMOYA MINING S.A. |
Dated as of February 27, 2015
TABLE OF CONTENTS
- ii -
THIS GOLD PURCHASE AND SALE AGREEMENT dated as of
February 27, 2015.
BETWEEN:
NAMOYA GSA HOLDINGS, an
exempted company incorporated under the laws of Cayman Islands
(the Agent)
- and -
Additional Purchasers joined from time
to time
(together with the Agent, the
Purchasers)
- and -
BANRO CORPORATION, a
corporation existing under the laws of Canada
(Banro)
- and -
NAMOYA MINING S.A., a
corporation existing under the laws of the Democratic Republic of the Congo
(the Seller)
WITNESSES THAT:
WHEREAS capitalized terms when used in these recitals
shall have the respective meanings set forth in Article 1 of this Agreement;
AND WHEREAS the Seller has agreed to sell to the
Purchasers and the Purchasers have agreed to purchase from the Seller, the
Payable Gold, subject to and in accordance with the terms and conditions of this
Agreement;
AND WHEREAS the Seller is an indirect subsidiary of
Banro and is the owner of a 100% interest in the Namoya Project;
AND WHEREAS the Parties agree that additional purchasers
may be joined with the Agent as the Purchasers on the terms and subject to the
provisions set out herein with the Agent acting as agent therefor;
NOW THEREFORE in consideration of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the Parties
hereto, the Parties mutually agree as follows:
- 2 -
ARTICLE 1
INTERPRETATION
In this Agreement, including in the recitals and schedules
hereto:
Additional Term has the
meaning set out in Section 5.1(a) .
Affiliate means, in relation
to any person or entity, any other person or entity controlling, controlled by
or under common control with such first mentioned person or entity.
Agreement means this gold
purchase and sale agreement and all attached schedules, in each case as the same
may be amended, restated, amended and restated, supplemented, modified or
superseded from time to time in accordance with the terms hereof.
AOI has the meaning set out in
the definition of Properties.
Applicable Laws means any
international, federal, state, provincial or municipal law, regulation,
ordinance, code, order or other requirement or rule of law or the rules,
policies, orders or regulations of any Governmental Authority or stock exchange,
including any judicial or administrative interpretation thereof, applicable to a
person or any of its properties, assets, business or operations.
Applicable Percentage means,
in respect of the Agent, 100%, as such percentage(s) may change from time to
time in accordance with this Agreement.
Approvals means all
authorizations, licenses, permits, concessions, clearances, consents, orders and
other approvals required to be obtained from any person, including any
Governmental Authority or stock exchange, in connection with the completion of
the transactions contemplated by this Agreement.
Arbitration Rules means the
Rules of Arbitration of the International Chamber of Commerce.
Assignment, Subordination and
Postponement of Claims has the meaning set out in Section 9.2(c) .
Banro Event of Default has the
meaning set out in Section 11.1.
Banro Group Entity means the
PSA Entities and their respective Affiliates from time to time.
Business Day means any day
other than a Friday, Saturday or Sunday or a day that is a statutory holiday
under the laws of the Province of Ontario, Canada or the laws of South Africa.
- 3 -
Change of Control of a person
(the Subject Person) means the consummation of any transaction,
including any consolidation, arrangement, amalgamation or merger or any issue,
Transfer or acquisition of voting shares, the result of which is that any other
person or group of other persons acting jointly or in concert for purposes of
such transaction: (i) becomes the beneficial owner, directly or indirectly, of
more than 50% of the voting shares of the Subject Person; or (ii) acquires
control of the Subject Person; provided that a Change of Control shall not
include any transaction that results in the Subject Person (if a Banro Group
Entity) continuing to be, directly or indirectly, wholly-owned by Banro.
Closing Date means the date
that is two Business Days following the date on which the conditions precedent
to payment of the Deposit are satisfied or waived in accordance with Section 3.5
or such other date as the Parties may agree, such date expected to occur on or
before April 15, 2015.
Collateral Trust Agreement
means the collateral trust agreement dated March 2, 2012 (as amended,
supplemented, amended and restated or otherwise modified and in effect from time
to time) among Banro, each of the guarantors named therein and Equity Financial
Trust Company.
Confidential Information has
the meaning set out in Section 7.6(a) .
Contaminant means any solid,
liquid, gas, odor, heat, sound, vibration, radiation, or combination of any of
them, that does or is reasonably expected to:
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(i) |
impair the quality of the Environment for any use that
can be made of it; |
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(ii) |
injure or damage property or plant or animal
life; |
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(iii) |
adversely affect the health of any individual; |
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(iv) |
impair the safety of any individual; |
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(v) |
render any plant or animal life unfit for use by man;
or |
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(vi) |
create a liability under any Environmental
Law; |
and includes any contaminant within
the meaning ascribed to such term in any Environmental Law.
Date of Delivery has the
meaning set out in Section 2.2(b) .
Deferred Revenue Financing
Arrangements means, except for this Agreement and any other gold purchase
and sale agreements with the Agent or Twangiza GFSA Holdings, any financing
transaction pursuant to which (a) Banro or any of the Banro Group Entities
receive cash advances or deposits in respect of future revenues from the sale of
specified mineral assets to a person other than an Affiliate, (b) such advances
or deposits are recorded as liabilities, but not as debt, on the consolidated
balance sheet of Banro and (c) such liability is amortized upon the delivery of
such mineral assets.
- 4 -
Delivery means the delivery of
doré to a Processor (or any Non-Doré Shipment pursuant to a Non-Doré Agreement).
Deposit means $50,000,000,
which amount may be increased in the sole discretion of the Purchasers up to an
amount not to exceed $60,000,000 with a proportionate adjustment to the
definition of Payable Gold.
Deposit Reduction Date means
the date occurring after the Closing Date on which the Deposit is reduced to nil
in accordance with the formula set forth in Section 2.4(a) .
Disqualified Stock means, with
respect to any person, any shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however
designated) equity of such person, including any preferred stock and limited
liability or partnership interests (whether general or limited) (collectively,
Capital Stock) of such person that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable) or upon
the happening of any event:
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(i) |
matures or is mandatorily redeemable pursuant to a
sinking fund obligation or otherwise; |
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(ii) |
is convertible into or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or
exchangeable solely at the option of Banro or the Banro Group Entities (it
being understood that upon such conversion or exchange it shall be an
incurrence of such Indebtedness or Disqualified Stock)); or |
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(iii) |
is redeemable at the option of the holder of the Capital
Stock in whole or in part. |
Distribution means, with
respect to any PSA Entity, any payment, directly or indirectly, by such PSA
Entity of any:
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(i) |
dividend in cash or other property or assets or return of
any capital to any of its Affiliates; |
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(ii) |
management fee paid or comparable payment to any
Affiliate of such PSA Entity or to any director or officer of such PSA
Entity or Affiliate of such PSA Entity, or to any person not dealing at
arms length with such PSA Entity or Affiliate, director or officer;
or |
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(iii) |
indebtedness owing by such PSA Entity to a creditor that
is an Affiliate by way of intercompany debt or
otherwise. |
Encumbrances means, with
respect to any asset, any mortgage, lien (statutory or otherwise), pledge,
hypothecation, deed of trust, deemed trust, charge, security interest,
preference, priority or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under Applicable Law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement; provided that in no event shall an
operating lease be deemed to constitute an Encumbrance.
- 5 -
Environment means the ambient
air, all layers of the atmosphere, surface water, underground water, all land
(surface and underground), all living organisms and the interacting natural
systems that include components of air, land, water, organic and inorganic
matter and living organisms, and includes indoor and underground spaces.
Environmental Laws means any
Applicable Laws relating to the Environment, occupational health or safety,
industrial hygiene, product liability or any past, present or future activity,
event or circumstance in respect of any Hazardous Materials (including the use,
handling, transportation, production, disposal, discharge or storage thereof or
the terms of any Approval issued in connection therewith) or the environmental
conditions on, under or about any real property (including soil, groundwater and
indoor, underground and ambient air conditions).
Gold Payment means the receipt
by a Banro Group Entity of payment (in cash or in kind), whether provisional or
final, or other consideration from a Processor in respect of any Delivery.
Gold Price means, with respect
to any day, the afternoon per ounce gold fixing price in U.S. dollars quoted by
the London Bullion Market Association for Refined Gold on such day or, if such
day is not a trading day, the immediately preceding trading day; provided that
if, for any reason, the London Bullion Market Association is no longer in
operation, or if the price of Refined Gold is not confirmed, acknowledged by or
quoted by the London Bullion Market Association, the Gold Price shall be
determined by reference to the price of Refined Gold in a manner endorsed by the
World Gold Council, failing which the Gold Price shall be determined by
reference to the price of gold on a commodity futures exchange mutually
acceptable to the Parties acting reasonably.
Gold Purchase Price has the
meaning set out in Section 2.4.
Governmental Authority means
any national, federal, state, provincial, regional, municipal, territorial or
local government, agency, department, ministry, authority, board, bureau,
tribunal, commission, official, court or securities commission, and any person
entitled under Applicable Law to exercise executive, legislative, judicial,
regulatory or administrative functions of or pertaining to any of the foregoing
entities, including all tribunals, commissions, boards, bureaus, arbitrators and
arbitration panels, and any authority or other person controlled by any of the
foregoing.
Group Collateral has the
meaning set out in Section 9.2(b) .
Group Security Agreements has
the meaning set out in Section 9.2(b)
Guarantors means Banro,
Twangiza Mining S.A., Banro Congo Mining S.A., Kamituga Mining S.A. and Lugushwa
Mining S.A.
- 6 -
Hazardous Materials means any
pollutant or Contaminant, including any hazardous, dangerous, registrable or
toxic chemical, material or other substance within the meaning of any
Environmental Law.
Indebtedness of any person
means, without duplication:
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(i) |
the principal of and premium (if any) in respect of
indebtedness of such person for borrowed money; |
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(ii) |
the principal of and premium (if any) in respect of
obligations of such person evidenced by bonds, debentures, notes or other
similar instruments; |
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(iii) |
the principal component of all obligations of such person
in respect of letters of credit, bankers acceptances or other similar
instruments (including reimbursement obligations with respect thereto
except to the extent such reimbursement obligation relates to a trade
payable and such obligation is satisfied within 30 days of
incurrence); |
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(iv) |
the principal component of all obligations of such person
to pay the deferred and unpaid purchase price of property (including
earn-out obligations) that are recorded as liabilities and which purchase
price is due after the date of placing such property in service or taking
delivery and title thereto, except (A) any such balance that constitutes a
trade payable or similar obligation to a trade creditor, in each case
accrued in the ordinary course of business and (B) any earn-out obligation
until the amount of such obligation becomes a liability on the balance
sheet of such Person; |
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(v) |
an obligation that would have been required to be
classified and accounted for as a capitalized lease for financial
reporting purposes; |
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(vi) |
Deferred Revenue Financing Arrangements; |
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(vii) |
the principal component or liquidation preference of all
obligations of such person with respect to the redemption, repayment or
other repurchase of any Disqualified Stock or any preferred shares in the
capital of such person (but excluding, in each case, any accrued
dividends); |
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(viii) |
the principal component of all Indebtedness of other
persons secured by an Encumbrance on any asset of such person, whether or
not such Indebtedness is assumed by such Person; provided, however, that
the amount of such Indebtedness will be the lesser of (a) the fair market
value of such asset at such date of determination and (b) the amount of
such Indebtedness of such other persons; |
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(ix) |
the principal component of Indebtedness of other persons
to the extent guaranteed by such person (whether or not such items would
appear on the balance sheet of the guarantor or
obligor); |
- 7 -
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(x) |
to the extent not otherwise included in this definition,
net obligations of such person under hedging obligations (the amount of
any such obligations to be equal at any time to the termination value of
such agreement or arrangement giving rise to such hedging obligation that
would be payable by such person at such time); and |
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(xi) |
to the extent not otherwise included in this definition,
the amount of obligations outstanding under the legal documents entered
into as part of a securitization transaction or series of securitization
transactions that would be characterized as principal if such transaction
were structured as a secured lending transaction rather than as a purchase
relating to a securitization transaction or series of securitization
transactions. |
Notwithstanding the foregoing: (i)
money borrowed and set aside at the time of the incurrence of any Indebtedness
in order to pre-fund the payment of interest on such Indebtedness shall not be
deemed to be Indebtedness; provided that such money is held to secure the
payment of such interest; (ii) in connection with the purchase by Banro or any
of the Banro Group Entities of any business, the term Indebtedness will
exclude post-closing payment adjustments or earn-out or similar obligations to
which the seller may become entitled to the extent such payment is determined by
a final closing balance sheet or such payment depends on the performance of such
business after the closing; provided, however, that at the time of closing, the
amount of any such payment is not determinable and, to the extent such payment
thereafter becomes fixed and determined, the amount is paid within 30 days
thereafter; and (iii) Indebtedness shall be calculated without giving effect
to any increase or decrease in Indebtedness for any purpose under this Indenture
as a result of accounting for any embedded derivatives created by the terms of
such Indebtedness. For the avoidance of doubt, reclamation obligations are not
and will not be deemed to be Indebtedness.
In addition, Indebtedness of the
Banro Group Entities shall include (without duplication) Indebtedness described
in the preceding paragraph that would not appear as a liability on the balance
sheet of Banro if:
|
(i) |
such Indebtedness is the obligation of a partnership or
joint venture that is not a subsidiary of Banro (a Joint
Venture); |
|
|
|
|
(ii) |
Banro or a Banro Group Entity is a general partner of the
Joint Venture (a General Partner); and |
|
|
|
|
(iii) |
there is recourse, by contract or operation of law, with
respect to the payment of such Indebtedness to property or assets of the
Banro Group Entities; |
and then such Indebtedness shall be
included in an amount not to exceed:
|
(A) |
the lesser of (i) the net assets of the General Partner
and (ii) the amount of such obligations to the extent that there is
recourse, by contract or operation of law, to the property or assets of any
of the Banro Group Entities; or |
- 8 -
|
(B) |
if less than the amount determined pursuant to clause (A)
immediately above, the actual amount of such Indebtedness that is recourse
to the Banro Group Entities, if the Indebtedness is evidenced by a writing
and is for a determinable amount. |
Initial Term has the meaning
set out in Section 5.1(a) .
Insolvency Event means, in
relation to any person, any one or more of the following events or
circumstances:
|
(i) |
proceedings are commenced for the winding-up, liquidation
or dissolution of it, unless it in good faith actively and diligently
contests such proceedings resulting in a dismissal or stay thereof within
60 days of the commencement of such proceedings; |
|
|
|
|
(ii) |
a decree or order of a court of competent jurisdiction is
entered adjudging it to be bankrupt or insolvent (unless vacated within 60
days), or a petition seeking reorganization, arrangement or adjustment of
or in respect of it is approved under Applicable Laws relating to
bankruptcy, insolvency or relief of debtors unless such petition is
dismissed within 60 days of first being sought; |
|
|
|
|
(iii) |
it makes an assignment for the benefit of its creditors,
or petitions or applies to any court or tribunal for the appointment of a
receiver or trustee for itself or any substantial part of its assets or
property, or commences for itself or acquiesces in or approves or has
filed or commenced against it any proceeding under any bankruptcy,
insolvency, reorganization, arrangement or readjustment of debt law or
statute or any proceeding for the appointment of a receiver or trustee for
itself or any substantial part of its assets or property, or has a
liquidator, administrator, receiver, trustee, conservator or similar
person appointed with respect to it or any substantial portion of its
property or assets unless such assignment or appointment is dismissed
within 60 days of commencement of such proceeding; |
|
|
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|
(iv) |
a resolution of its board of directors is passed for the
receivership or similar insolvent winding-up or liquidation of it;
or |
|
|
|
|
(v) |
anything analogous or having a similar effect to an event
listed in paragraphs (i) to (iv) above occurs in respect of that
person. |
Lenders means any person that
provides any Secured Financing, excluding any Banro Group Entity.
- 9 -
Majority Purchasers means
those Purchasers who, at the relevant time, have provided an amount equal to or
greater than 50.1% of the principal amount of the Deposit advanced to the
Seller.
Material Adverse Effect means
any event, occurrence, change or effect that, when taken individually or
together with all other events, occurrences, changes or effects, is or could
reasonably be expected to:
|
(i) |
materially limit, restrict or impair the ability of any
PSA Entity to perform its obligations under this Agreement; |
|
|
|
|
(ii) |
limit, restrict or impair the ability of the Seller to
operate the Namoya Project in all material respects in accordance with the
Operating Plan for the Namoya Project in effect at the time of the event,
occurrence, change or effect; |
|
|
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|
(iii) |
cause any material decrease to expected gold production
from the Namoya Project based on the Operating Plan for the Namoya Project
in effect at the time of the event, occurrence, change or
effect; |
|
|
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|
(iv) |
affect the validity, perfection or priority of the
security under the Security Agreements; or |
|
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|
(v) |
result in a Banro Event of
Default. |
Monthly Report means a written
report in relation to a calendar month with respect to the Namoya Project that
contains, for such month:
|
(i) |
types, tonnes and gold grade of ore mined; |
|
|
|
|
(ii) |
types, tonnes and gold grade of any ore
stockpiled; |
|
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|
(iii) |
the number of ounces of gold contained in ore processed
during such month, but not delivered to a processor by the end of such
month; |
|
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|
(iv) |
at the request of the Agent, a summary of Deliveries
during such month showing, among other things, provisional Refined Gold
and Payable Gold amounts and Gold Payments and any final settlement
adjustments made during such month; |
|
|
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|
(v) |
at the request of the Agent, copies of all Processor
statements, invoices or receipts; and |
|
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|
(vi) |
at the request of the Agent, a detailed calculation of
the uncredited balance of the Deposit as of the end of the
month. |
Namoya Holdcos means together,
Banro Group (Barbados) Limited and Namoya (Barbados) Limited.
- 10 -
Namoya Project means the
Properties and the mining operations developed, constructed and operated at and
in respect of the Properties.
Net Proceeds means with
respect to the proceeds under any insurance policy, the aggregate amount
received by any Banro Group Entity in connection with such receipt of insurance
proceeds less the reasonable fees, costs and other out-of-pocket expenses (as
evidenced by supporting documentation provided to the Agent upon request)
incurred or paid to a third party (other than such insurer) by any Banro Group
Entity in connection with the claim under the insurance policy giving rise to
such proceeds.
NI-43-101 means National
Instrument 43-101 Standards of Disclosure for Mineral Projects of the
Canadian Securities Administrators, as may be amended from time to time, or any
successor instrument, rule or policy.
Non-Doré Agreements means all
agreements entered into by a Banro Group Entity for the sale of Non-Doré
Shipments, as the same may be amended, restated, supplemented, or superseded
from time to time.
Non-Doré Shipments has the
meaning set out in Section 2.1(c) .
Note Indenture means the
indenture dated as of March 2, 2012 (as amended, supplemented, amended and
restated or otherwise modified and in effect from time to time) among Banro, as
issuer, each of the guarantors named therein and Equity Financial Trust Company,
as trustee and collateral agent.
Ongoing Price means $150 per
ounce.
Operating Plan means the life
of mine operating plan for the Namoya Project delivered to the Agent on the date
hereof.
Order means any order,
directive, decree, judgment, ruling, award, injunction, direction or request of
any Governmental Authority or other decision-making authority of competent
jurisdiction.
Other Minerals means any and
all marketable metal bearing material in whatever form or state (including ore)
that is mined, produced, extracted or otherwise recovered from any location that
is not within the Properties.
Parties means the parties to
this Agreement.
Payable Gold means Refined
Gold in an amount equal to 8.33%, which percentage will increase proportionately
with any increase in the amount of the Deposit to a percentage not to exceed
10%, of the Produced Gold in respect of which any Banro Group Entity receives a
Gold Payment occurring during the Term, as determined in accordance with
Sections 2.1(b) and 2.1(c) .
Permits means all licenses,
permits, approvals (including environmental approvals) authorizations, rights
(including surface and access rights and rights of way, and access to water and
power), privileges, concessions or franchises necessary for the construction, development and operation of the Namoya Project as is
contemplated by the Operating Plan.
- 11 -
Permitted Distributions means
any payment of Distributions required to satisfy any obligation under this
Agreement, Applicable Laws or the terms of any Secured Financing entered into in
accordance with this Agreement, as a result of any Affiliate of any PSA Entity
not otherwise having sufficient funds to satisfy such obligation.
Permitted Encumbrances
means:
|
(i) |
prior to the termination of the Note Indenture,
Encumbrances permitted under the Note Indenture; |
|
|
|
|
(ii) |
following the termination of the Note
Indenture: |
|
(A) |
inchoate or statutory liens for taxes, assessments,
royalties payable to a Governmental Authority, rents or charges not at the
time due or payable, or being contested in good faith through appropriate
proceedings; |
|
|
|
|
(B) |
statutory liens incurred, or pledges or deposits made,
under workers compensation, employment insurance and other social
security legislation other than in the context of a breach of laws or
Permits; |
|
|
|
|
(C) |
any reservations, or exceptions contained in the original
grants of land or by applicable statute or the terms of any lease in
respect of any Properties or comprising the Properties; |
|
|
|
|
(D) |
minor discrepancies in the legal description or acreage
of or associated with the Properties or any adjoining properties which
would be disclosed in an up to date survey, and any registered easements
and registered restrictions or covenants that run with the land which do
not materially detract from the value of, or materially impair the use of
the Properties for the purpose of conducting and carrying out mining
operations thereon; |
|
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|
|
(E) |
rights of way for or reservations or rights of others
for, sewers, water lines, gas lines, electric lines, telegraph and
telephone lines, and other similar utilities, or zoning by-laws,
ordinances, surface access rights or other restrictions as to the use of
the Properties, which do not in the aggregate materially detract from the
use of the Properties for the purpose of conducting and carrying out
mining operations thereon; |
|
|
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|
(F) |
liens or other rights granted by a PSA Entity to secure
performance of statutory obligations or regulatory requirements (including
reclamation obligations) other than in the context of a breach of laws or
Permits; |
- 12 -
|
(G) |
security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
|
|
|
|
(H) |
liens in respect of the following: |
|
|
|
|
|
[Details of individual lien holders
redacted] |
|
|
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|
(I) |
liens securing Permitted Indebtedness listed in clauses
(ii)(1), (4), (5), (7) and (9) of such definition. |
Permitted Indebtedness means:
|
(i) |
prior to the termination of the Note Indenture,
Indebtedness permitted in accordance with the terms thereof and Deferred
Revenue Financing Arrangements as set out in clause (ii)(5) below;
and |
|
|
|
|
(ii) |
following the termination of the Note
Indenture: |
|
(1) |
indebtedness incurred under this Agreement and the
Security Agreements, together with the gold purchase and sale agreements
of the Banro Group Entities with the Agent and Twangiza GFSA
Holdings; |
|
|
|
|
(2) |
any security deposits with any Governmental Authority and
utilities in the ordinary course of business of a Banro Group Entity
(including, to the extent applicable, any reclamation
obligations); |
|
|
|
|
(3) |
any unsecured liability under any agreement entered into
in the ordinary course of business for the acquisition of any asset or
service where payment for the asset or service is deferred for a period of
not more than 90 days; |
|
|
|
|
(4) |
indebtedness incurred in connection with any mobile
equipment financing facility or other accounts receivable financing
facility secured solely by such mobile equipment or accounts
receivable; |
|
|
|
|
(5) |
Deferred Revenue Financing Arrangements, provided that at
any time, in respect of all Deferred Revenue Financing Arrangements in the
aggregate, no more than 80% of the forecast gold production of the Namoya
Project for the current month is the subject thereof; |
|
|
|
|
(6) |
indebtedness incurred by a Banro Group Entity in favour
of another Banro Group Entity that is subject to an Assignment,
Subordination and Postponement of Claims; |
|
|
|
|
(7) |
Indebtedness in an aggregate principal amount not to
exceed $175,000,000 provided that (A) any security granted therefor shall
have been granted in favour of the Purchasers or the
Collateral Agent on their behalf; and (B) the ranking of the PSA
Obligations vis-à-vis such secured Indebtedness shall correspond to the ranking
of the PSA Obligations vis-à-vis the notes issued under the Note Indenture; |
- 13 -
|
(8) |
Preferred shares in the capital of Banro, Banro Group
(Barbados) Limited, Twangiza (Barbados) Limited and Namoya (Barbados)
Limited; and |
|
|
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|
(9) |
indebtedness (including in respect of any discretionary
derivative or hedging arrangements) of one or more Banro Group Entities
not permitted by the preceding paragraphs, the outstanding principal
amount (which shall include capitalized interest characterized as
principal) (or net liability of the PSA Entities with respect to any
discretionary derivative or hedging arrangements) of which does not exceed
in the aggregate at any time 7% of the total consolidated assets of Banro
and the Banro Group Entities. |
person includes an individual,
corporation, body corporate, limited or general partnership, joint stock
company, limited liability corporation, joint venture, association, company,
trust, bank, trust company, Governmental Authority or any other type of
organization, whether or not a legal entity.
Prior Ranking Permitted
Encumbrances means:
|
(i) |
prior to the termination of the Note Indenture, those
Encumbrances that constitute Priority Liens (as defined in the Note
Indenture) and Parity Liens (as defined in the Note Indenture) and, with
respect to Parity Liens, those ranking pari passu with respect to
the Secured Amount; |
|
|
|
|
(ii) |
following the termination of the Note Indenture, those
Encumbrances listed in (ii) (A) to (H) of the definition of Permitted
Encumbrances. |
Processing Agreements means
all agreements entered into by a PSA Entity with a Processor for the refining of
doré into Refined Gold for the benefit of a PSA Entity, as the same may be
amended, restated, supplemented, or superseded from time to time.
Processing Plant means any
mill or other processing facility owned or operated or both by any Banro Group
Entity located on or near the Properties, to the extent that such mill or
processing facility was built with the primary intention of processing ore from
the Properties, or at which Produced Gold is processed.
Processor means collectively,
any smelter, refiner or other processor of Produced Gold.
Produced Gold means any and
all gold in whatever form or state that is mined, produced, extracted or
otherwise recovered from the Properties, including any gold derived from any
processing or reprocessing of any tailings, waste rock or other waste products
originally derived from the Properties, and including gold contained in any ore or other products resulting from the further milling,
processing or other beneficiation of minerals mined, produced, extracted or
otherwise recovered from the Properties.
- 14 -
Project Assets means the
shares in the capital of the PSA Entities (other than Banro) and the Properties,
Processing Plant and all present and after-acquired real or personal property,
used or acquired for use by any Banro Group Entity in connection with the
mining, production or extraction of gold from the Properties.
Project Collateral means (A)
the Project Assets, including all present and after-acquired personal property
used in connection with, relating to or arising out of, in whole or in part, the
Project, and (B) the Produced Gold, and in each case including all proceeds
thereof except sales of Produced Gold in the ordinary course of business.
Properties means the mineral
claims, mineral leases and other mining rights, concessions and interests listed
in Schedule A together with a 20 kilometre circumambient area surrounding the
properties listed in Schedule A (the AOI), including all buildings
structures improvements, appurtenances and fixtures that form part of the Namoya
Project, whether created privately or by the action of any Governmental
Authority, and includes any term extension, renewal, replacement, conversion or
substitution of any such mineral claims, mineral leases and other mining rights,
concessions or interests, owned or in respect of which an interest is held,
directly or indirectly, by any Banro Group Entity at any time during the
Delivery Period, whether or not such ownership or interest is held continuously.
The Properties are depicted in the map included in Schedule A.
PSA Collateral means the
Project Collateral, the Group Collateral and the assets charged under the
Assignment, Subordination and Postponement of Claims.
PSA Entity means Banro and the
Seller, and any other Affiliate of Banro (now or hereafter incorporated) that
acquires any interest in the Namoya Project.
PSA Obligations means all
present and future debts, liabilities and obligations of PSA Entities, or all of
them, to the Purchasers under this Agreement.
PSA Security means the charges
and security interests granted in favour of the Purchasers pursuant to the
Security Agreements.
Purchased Ounces has the
meaning set out in Section 2.4.
Purchaser Event of Default has
the meaning set out in Section 12.1.
Receiving Party has the
meaning set out in Section 7.6(a) .
Reduction Amount means the
Gold Price on the Business Day following the Date of Delivery less the Ongoing
Price.
Refined Gold means marketable
metal bearing material in the form of gold bars or coins that is refined to
standards meeting or exceeding 995 parts per 1,000 fine gold.
- 15 -
Reimbursable Expenses has the
meaning set out in Section 14.3.
Restricted Person means any
person or entity that:
|
(i) |
is named, identified, described on or included on any
of: |
|
(1) |
the lists maintained by the Office of the Superintendent
of Financial Institutions Canada with respect to terrorism
financing; |
|
|
|
|
(2) |
the Denied Persons List, the Entity List or the
Unverified List, compiled by the Bureau of Industry and Security, U.S.
Department of Commerce; |
|
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|
(3) |
the List of Statutorily Debarred Parties compiled by the
U.S. Department of State; |
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|
(4) |
the Specially Designated Nationals Blocked Persons List
compiled by the U.S. Office of Foreign Assets Control; or |
|
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|
(5) |
the annex to, or is otherwise subject to the provisions
of, U.S. Executive Order No. 13324; |
|
(ii) |
is subject to trade restrictions under United States law,
including, but not limited to: |
|
(1) |
the International Emergency Economic Powers Act,
50 U.S.C.; or |
|
|
|
|
(2) |
the Trading with the Enemy Act, 50 U.S.C. App. 1
et seq.; or any other enabling legislation or executive order relating
thereto, including the Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001, Title III of Pub. L. 107 56; or |
|
(iii) |
is a person or entity who is an Affiliate of a person or
entity listed above. |
Secured Amount has the meaning
set out in Section 9.2(a) .
Secured Financing means any
Indebtedness for borrowed money of, or lending facility or other financing
arrangement (including any secured derivative transactions entered into in
connection with such Indebtedness, or any other hedge financing) in favour of,
any Banro Group Entity that is secured by all or any part of the Project Assets.
Security Agreements means the
Seller Security Agreements, the Group Security Agreements and the Assignment,
Subordination and Postponement of Claims.
Seller Security Agreements has
the meaning set out in Section 9.2(a) .
Tax or Taxes means
all taxes, surtaxes, levies, tariffs, fees, assessments and other charges,
duties, and impositions, including any interest, penalties, tax instalment payments or other additions that may become payable in respect
thereof, imposed by any Governmental Authority, which taxes shall include all
income or profits taxes (including federal, provincial, and state income taxes)
other than income or profits taxes levied in respect of the income or profits of
the Purchasers, non-resident withholding taxes, sales and use taxes, branch
profit taxes, ad valorem taxes, excise taxes, franchise taxes, gross receipts
taxes, business licence taxes, occupation taxes, real and personal property
taxes, stamp taxes, environmental taxes, transfer taxes, land transfer taxes,
capital taxes, extraordinary income taxes, surface area taxes, property taxes,
asset transfer taxes, and other charges and obligations of the same or of a
similar nature to any of the foregoing.
- 16 -
Term has the meaning set out
in Section 5.1.
Time of Delivery has the
meaning set out in Section 2.2(b) .
Transfer means to sell,
transfer, assign, convey, dispose or otherwise grant a right, title or interest
(including expropriation or other transfer required or imposed by law or any
Governmental Authority, whether voluntary or involuntary).
1.2 |
Certain Rules of
Interpretation |
Except as may be otherwise specifically provided in this
Agreement and unless the context otherwise requires:
|
(a) |
The terms Agreement, this Agreement, the Agreement,
hereto, hereof, herein, hereby, hereunder and similar
expressions refer to this Agreement in its entirety and not to any
particular provision hereof. |
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|
(b) |
References to an Article, Section or Schedule
followed by a number or letter refer to the specified Article or Section
of or Schedule to this Agreement. |
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|
(c) |
Headings of Articles and Sections are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. |
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|
(d) |
Where the word including or includes is used in this
Agreement, it means including without limitation or includes without
limitation. |
|
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|
(e) |
A person (first person) is considered to control another
person (second person) if: |
|
(i) |
the first person beneficially owns or directly or
indirectly exercises control or direction over securities of the second
person carrying votes which, if exercised, would entitle the first person
to elect a majority of the directors of the second person, unless that
first person holds the voting securities only to secure an
obligation; |
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|
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|
(ii) |
the first person directly or indirectly exercises control
or direction over the majority of the directors or has the ability to
control the management and policies of the second
person; |
- 17 -
|
(iii) |
the second person is a partnership, other than a limited
partnership, and the first person holds more than 50% of the interests of
the partnership; or |
|
|
|
|
(iv) |
the second person is a limited partnership and the
general partner of the limited partnership is the first person or the
control person or the general partner, |
and controls, controlling,
controlled by and under common control have corresponding meanings.
|
(f) |
The language used in this Agreement is the language
chosen by the Parties to express their mutual intent, and no rule of
strict construction shall be applied against any Party. |
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|
(g) |
Unless the context otherwise requires, words importing
the singular include the plural and vice versa and words importing gender
include all genders. |
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(h) |
Unless otherwise stated, all accounting terms used in
this Agreement shall have the meanings attributable thereto under
generally accepted accounting principles applicable to such entity at the
relevant time, in effect from time to time (which may be International
Financial Reporting Standards), consistently applied, and all
determinations of an accounting nature required to be made shall be made
in a manner consistent with such applicable generally accepted accounting
principles. |
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|
(i) |
A reference to a statute includes all regulations made
pursuant to and rules promulgated under such statute and, unless otherwise
specified, any reference to a statute or regulation includes the
provisions of any statute or regulation which amends, supplements or
supersedes any such statute or any such regulation from time to
time. |
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|
(j) |
Time is of the essence in the performance of the Parties
respective obligations under this Agreement. |
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(k) |
In this Agreement a period of days shall be deemed to
begin on the first day after the event which began the period and to end
at 5:00 p.m. (Toronto time) on the last day of the period. If, however,
the last day of the period does not fall on a Business Day, the period
shall terminate at 5:00 p.m. (Toronto time) on the next Business
Day. |
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(l) |
Unless specified otherwise in this Agreement, all
statements or references to dollar amounts in this Agreement are to United
States of America dollars. |
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(m) |
The following schedules are attached to and form part of
this Agreement: |
|
Schedule A |
- |
Description of Sellers Properties (with map)
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Schedule B |
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Security Agreements |
- 18 -
|
Schedule C |
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Intercreditor Principles |
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Schedule D |
- |
Banro and Seller Representations and Warranties
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Schedule E |
- |
Purchaser Representations and Warranties |
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Schedule F |
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Dispute Resolution |
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Schedule G |
|
Agent |
ARTICLE 2
PURCHASE AND SALE
2.1 |
Purchase and Sale of Payable
Gold |
|
(a) |
Subject to and in accordance with the terms of this
Agreement, the Seller hereby agrees to sell to the Purchasers, and the
Purchasers hereby agree, in accordance with each Purchasers Applicable
Percentage, to purchase from the Seller, the Payable Gold, free and clear
of all Encumbrances. |
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(b) |
As further provided in Section 4.2, Payable Gold shall
not be reduced for, and the Purchasers shall not be responsible for, any
refining charges, treatment charges, penalties, insurance charges,
transportation charges, settlement charges, financing charges or price
participation charges, or other similar charges or deductions, regardless
of whether such charges or deductions are expressed as a specific metal
deduction, separate and apart from the recovery rate pursuant to the terms
of any applicable Processing Agreement. |
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(c) |
In the event any Banro Group Entity intends to sell
Produced Gold in any form other than doré (Non-Doré Shipments),
such sale shall be completed in accordance with a Non-Doré Agreement on
terms and conditions (including in respect of allowable deductions to
determine payability) that are acceptable to the Agent, acting reasonably.
For this purpose, Payable Gold means the recoverable metal content
calculated in accordance with the applicable Non-Doré Agreement. The
Seller shall be deemed to receive a Gold Payment when it receives payment
(whether provisional or final) for a Non-Doré Shipment and the sale and
delivery of the Payable Gold payable on account of the Non-Doré Shipments
shall be made in accordance with Section 2.2. The Seller shall provide the
Agent with a final signed copy of the Non-Doré Agreement within five
Business Days after the execution thereof and any such agreement shall be
on commercially reasonable arms length terms and conditions with a person
who is not a Banro Group Entity. |
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(a) |
Following the Closing Date, no later than the 15 th
day of each month (or the next following Business Day), the Seller
shall sell, and in accordance with Section 2.2(b), deliver to the
Purchasers, in accordance with each Purchasers Applicable Percentage, the
aggregate Payable Gold to which all Gold Payments received
in the prior calendar month relate, it being acknowledged and
agreed by the Seller that it shall use commercially reasonable efforts to
deliver Payable Gold to the Purchasers concurrently with Gold Payments it
receives by way of directions to any Processor. In the event a Gold Payment
consists of provisional payments that may be adjusted upon final settlement of a
Delivery, then: |
- 19 -
|
(i) |
on the 15th day of the month following receipt
of such provisional payment or payments (or the next following Business
Day), the Seller shall sell, and in accordance with Section 2.2(b) deliver
to the Purchasers, in accordance with each Purchasers Applicable
Percentage, the Payable Gold in respect of which the Seller received a
provisional Gold Payment, multiplied by the provisional payment percentage
for all Produced Gold in such Delivery, as supported by the documentation
provided pursuant to Section 2.3 and in the applicable Monthly Report;
and |
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(ii) |
on the 15th day of the month following the
date of final settlement of the Delivery with the Processor (or the next
following Business Day), the Seller shall sell, and in accordance with
Section 2.2(b), deliver to the Purchasers, in accordance with each
Purchasers Applicable Percentage, Refined Gold in an amount equal to the
amount, if any, by which the Payable Gold determined pursuant to the final
settlement exceeds the amount of Payable Gold previously delivered to the
Purchasers in respect of such Delivery pursuant to Section 2.2(a)(i), as
supported by the documentation provided pursuant to Section 2.3 and the
applicable Monthly Report, provided that, if such difference is negative,
then the Seller shall be entitled to set off and deduct, in accordance
with each Purchasers Applicable Percentage, such excess amount from the
next required deliveries by the Seller under this Agreement until it has
been fully offset against deliveries to the Purchasers of Refined Gold
pursuant to the first sentence of this Section 2.2(b), or if no such
further deliveries are to be made, the Purchasers shall within ten (10)
Business Days pay the applicable Gold Purchase Price in respect of any
excess ounces delivered to the extent not already paid and any Gold
Purchase Price paid by the Purchasers in respect of such excess ounces
shall be an amount owing to the Seller from the
Purchasers. |
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(b) |
The Seller shall deliver to the Purchasers, in accordance
with each Purchasers Applicable Percentage, all Payable Gold to be
delivered under this Agreement by way of credit or allocation to the metal
account or accounts designated by each of the Purchasers from time to
time, or physical delivery to such other location specified by each of the
Purchasers from time to time on 15 Business Days prior written notice or
as otherwise consented to by the Seller, such consent not to be
unreasonably withheld. Delivery of the Payable Gold to the Purchasers
shall be deemed to have been made at the time on the date the Payable Gold
is credited or allocated or physically delivered, as applicable, to the
designated metal account of each Purchaser (the Time of Delivery
on such date the Date of Delivery). Title to, and risk of loss
of, the Payable Gold shall pass from the Seller to each of the Purchasers
at the Time of Delivery. The Seller acknowledges that
the Purchasers intend to engage a selling agent that will take
delivery of the Payable Gold on behalf of the Purchasers for purposes of
monetizing the Payable Gold. All costs and expenses pertaining to each delivery
of the Payable Gold to the Purchasers, including such selling arrangements,
shall be borne by the Seller so long as the Purchasers accounts are in
customary locations in United Kingdom, Switzerland or South Africa. |
- 20 -
|
(c) |
The Seller hereby represents and warrants to the
Purchasers that, at each Time of Delivery (i) the Seller will be the legal
and beneficial owner of the Payable Gold credited or physically allocated
to the designated metal account of each of the Purchasers, (ii) the Seller
will have good, valid and marketable title to such Payable Gold, and (iii)
such Payable Gold will be free and clear of all Encumbrances. |
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(d) |
The Seller shall not sell or deliver to the Purchasers,
(for purposes of this Agreement and at any time during the term of this
Agreement) any Refined Gold that has been directly or indirectly purchased
on a commodity exchange, a commodity futures exchange or from another
similar source. The Seller shall have the option to fulfill a gold
delivery obligation hereunder by obtaining gold from other sources from
time to time including from mining operations of Affiliates or physical
gold purchases from a refiner for delivery to the Purchasers, at its sole
discretion. The Parties acknowledge that the Seller shall not be obliged
to sell or deliver to the Purchasers the Refined Gold physically resulting
from Produced Gold. No later than January 15 of each year, the Seller
shall deliver to the Purchasers a certificate of a senior officer of the
Seller confirming compliance with this Section 2.2(d) as it relates to the
prior calendar year . |
|
(a) |
The Seller shall notify the Purchasers in writing, no
more than five Business Days after each Delivery, by delivery of an
estimate to the Purchasers setting out the estimated number of ounces of
Payable Gold to be credited, allocated or physically delivered to the
designated metal accounts of each of the Purchasers in respect of such
Delivery and the anticipated Date of Delivery; |
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(b) |
On the Business Day following the Date of Delivery, the
Seller shall notify the Purchasers in writing
of: |
|
(i) |
the number of ounces of Payable Gold credited, allocated
or physically delivered to the designated metal account of each of the
Purchasers; and |
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(ii) |
the Gold Purchase Price for such Payable Gold
. |
The Purchasers shall pay to the Seller, in accordance with each
Purchasers Applicable Percentage, a purchase price (the Gold Purchase
Price) for each ounce of Payable Gold sold and delivered by the Seller to the Purchasers under this
Agreement (the Purchased Ounces) equal to:
- 21 -
|
(a) |
prior to the Deposit Reduction Date, (i) the Ongoing
Price on the Date of Delivery of such Purchased Ounces, as applicable,
payable in cash or by wire transfer of immediately available funds, plus
(ii) the Reduction Amount for such Purchased Ounces, payable only by
crediting the applicable Reduction Amount against the Deposit in order to
reduce the uncredited balance of the Deposit until the uncredited balance
of the Deposit has been credited and reduced to nil; and |
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(b) |
from and after the Deposit Reduction Date, the Ongoing
Price on the Date of Delivery of such Purchased Ounces payable in cash or
by wire transfer of immediately available funds. |
ARTICLE 3
DEPOSIT PAYMENT
|
(a) |
In connection with the respective promises and covenants
contained herein, including the sale and delivery by the Seller to the
Purchasers of the Payable Gold, each Purchaser hereby agrees to pay the
Deposit in cash against, and as a prepayment of the purchase price for the
Payable Gold, subject to the conditions set out in Sections 3.2 and
3.3. |
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(b) |
No interest will be payable by the Seller on or in
respect of the Deposit except as expressly provided in this Agreement. The
Purchasers will not be entitled to demand repayment of the Deposit except
to the extent expressly set forth in this
Agreement. |
The Seller shall use, and Banro shall cause to be used, the
Deposit only to pay accrued and unpaid dividends as of the last payment date on
or prior to the date of receipt by the Seller of the Deposit on preferred shares
in the capital of Banro Group (Barbados) Limited and the Series A preferred
shares in the capital of Banro, to repay the notes issued pursuant to the
backstop facility dated August 18, 2014, bank indebtedness and accounts payable
and thereafter, general corporate purposes.
3.3 |
Conditions Precedent in Favour of the
Purchasers |
Each Purchaser shall pay the Deposit to or to the order of the
Seller on the Closing Date, by wire transfer of immediately available funds to
the bank account or accounts designated by the Seller in writing, once each of
the following conditions has been satisfied in full:
|
(a) |
Banro and the Seller shall have delivered to the Agent a
certificate of status, good standing or compliance (or equivalent) for
each PSA Entity and the Namoya Holdcos, issued by the relevant
Governmental Authority dated no earlier than five Business Days prior to
the Closing Date; |
- 22 -
|
(b) |
Each PSA Entity shall have executed and delivered to the
Agent a certificate of a senior officer of each in form and substance
satisfactory to the Agent, acting reasonably, dated as of the Closing
Date, as to the constating documents of each; the resolutions of the board
of directors of each authorizing the execution, delivery and performance
of this Agreement and the Security Agreements to which it is a party and
the transactions contemplated hereby; the names, positions and true
signatures of the persons authorized to sign this Agreement and the
Security Agreements to which it is a party; and such other matters
pertaining to the transactions contemplated hereby as the Agent may
reasonably require; |
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(c) |
Banro and the Seller shall have delivered to the Agent a
favourable opinion, in form and substance satisfactory to the Agent,
acting reasonably, dated as of the Closing Date, from external legal
counsel to Banro, the Seller, the Namoya Holdcos and the PSA Entities as
to (i) the legal status of each, (ii) the corporate power and authority of
each to execute, deliver and perform this Agreement and the Security
Agreements to which it is a party, (iii) the execution and delivery of
this Agreement and the Security Agreements to which it is a party and the
enforceability of this Agreement and the Security Agreements against each,
(iv) that this Agreement and the Security Agreements, and the performance
by Banro and the Seller of the obligations hereunder or thereunder, do not
conflict with, violate, result in a breach of, or constitute a default or
an event creating rights of acceleration, termination, modification or
cancellation or a loss of rights under (with or without the giving notice
or lapse of time or both), the Note Indenture, the Collateral Trust
Agreement, or any of the Collateral Documents (as defined in the Note
Indenture) governed by Ontario law, (v) the outstanding share capital of
the Seller and the Namoya Holdcos, (vi) the creation of valid mortgages
and charge upon, and security interests in (including as to ranking of
such security interests), the PSA Collateral under the Security; and (vii)
the due registration or filing of the Security Agreements and, where
applicable, the perfection of the security interest of the Purchasers
(including as to ranking of such security interests), under such Security
Agreements and the results of the usual searches that would be conducted
in connection with the security that is the subject of such Security
Agreements; |
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(d) |
each PSA Entity shall have certified that, as of the
Closing Date (i) all of the representations and warranties made by each
pursuant to this Agreement are true and correct on and as of such date,
and (ii) no Banro Event of Default (or an event which with notice or lapse
of time or both would become a Banro Event of Default) has occurred and is
continuing under this Agreement or any Security Agreement to which it is a
party; |
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(e) |
Banro and the Seller shall have delivered to the Agent a
legal opinion addressed to the Purchasers from external counsel, in form
and substance satisfactory to the Agent, with respect to title to the
Properties dated as of the Closing Date; |
- 23 -
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(f) |
Banro and the Seller shall have certified that, as of the
Closing Date, no Approvals of any Governmental Authority are required to
operate the Project Assets substantially in accordance with the Operation
Plan, except |
|
(i) |
as have already been obtained and received by the Seller
and continue to be in place without challenge or appeal, to the extent
reasonably considered necessary or appropriate, or |
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(ii) |
as are reasonably expected to be obtained by the time
they are necessary, |
except for those that would not
reasonably be expected to have a Material Adverse Effect;
|
(g) |
each PSA Entity shall have delivered to the Agent a
certificate of a senior officer confirming: |
|
(i) |
compliance with Applicable Laws in respect of the Project
Assets (including that each PSA Entity is in compliance with all terms of,
and has made all necessary expenditures and investments required to
maintain in good standing, its mineral claims, mineral leases, mineral and
exploration licenses and other mining rights) dated no earlier than five
Business Days prior to the Closing Date; and |
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(ii) |
that no event, occurrence, change or effect shall have
occurred that has or may have Material Adverse
Effect; |
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(h) |
Banro shall have amended the Note Indenture and the
related collateral trust agreement and security agreements as required by
the Agent to, among other things, characterize the Secured Amount as a
Parity Lien (as defined in the Note Indenture), require the trustee under
such collateral trust agreement and security agreements to transfer the
Project Collateral only in accordance with the terms of this Agreement and
to preserve the collateral trust following termination of the Note
Indenture. |
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(i) |
each Banro Group Entity shall have executed and
delivered, as security for the performance of their obligations to the
Purchasers under this Agreement, the Security Agreements set out in
Schedule B and such executed Security Agreements shall have been
registered, filed or recorded in all offices, and all actions shall have
been taken, that may be prudent or necessary to preserve, protect or
perfect the security interest of the Purchasers, under such Security
Agreements; |
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(j) |
Banro and the Seller shall execute and deliver an
agreement with the Purchasers and Auramet International LLC
(Auramet), creating an account in favour of the
Purchasers and setting out the terms by which Auramet will assist the
Purchasers in monetizing deliveries of Payable Gold; |
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(k) |
in accordance with Applicable law, Banro shall cause each
of [names of individuals redacted] and each other equity
holder of any Banro Group Entity that is an individual, but is not either an employee of Banros
counsel in Democratic Republic of Congo or an employee of Banro to transfer for
no or nominal consideration their ownership of any such equity securities to one
or more current employees of Banros counsel in Democratic Republic of Congo or
current employees of Banro; |
- 24 -
|
(l) |
the Seller paid all Reimbursable Expenses of the
Purchasers payable as at the Closing Date; and |
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(m) |
Banro and the Seller shall have delivered to the
Purchasers prior to the Closing Date a certificate of insurance coverage
or other evidence of acceptable insurance
coverage. |
3.4 |
Conditions Precedent in Favour of the
Seller |
On or before the Closing Date, each Purchaser will satisfy each
of the following conditions:
|
(a) |
each Purchaser shall have delivered to the Seller a
certificate of status, good standing or compliance (or equivalent) for
such Purchaser, issued by the relevant Governmental Authority; |
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(b) |
each Purchaser shall have executed and delivered to Banro
and the Seller a certificate of a senior officer of such Purchaser, in
form and substance satisfactory to Banro and the Seller, acting
reasonably, as to the constating documents of such Purchaser; the
resolutions of the directors of such Purchaser, authorizing the execution,
delivery and performance of this Agreement and the transactions
contemplated hereby; the names, positions and true signatures of the
persons authorized to sign this Agreement on behalf of such Purchaser; and
such other matters pertaining to the transactions contemplated hereby as
Banro and the Seller may reasonably require; |
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(c) |
each Purchaser shall have delivered to Banro and the
Seller a favourable opinion, in form and substance satisfactory to Banro
and the Seller, acting reasonably, from external legal counsel to such
Purchaser as to (i) the legal status of such Purchaser, (ii) the corporate
power and authority of such Purchaser to execute, deliver and perform this
Agreement, and (iii) the execution and delivery of this Agreement;
and |
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(d) |
each Purchaser shall have certified to Banro and the
Seller that, as of the Closing Date (i) all of the representations and
warranties made by such Purchaser pursuant to this Agreement are true and
correct in all material respects on and as of such date, and (ii) no
Purchaser Event of Default (or an event which with notice or lapse of time
or both would become a Purchaser Event of Default) has occurred and is
continuing. |
3.5 |
Satisfaction of Conditions
Precedent |
|
(a) |
Each Party shall use all reasonable commercial efforts
and take all reasonable action as may be necessary or advisable, to
satisfy and fulfil all the conditions set forth in this Article 3 by the date provided or, if no date is
provided, as promptly as reasonably practicable. The Parties shall co-operate in
exchanging such information and providing such assistance as may be reasonably
required in connection with the foregoing. |
- 25 -
|
(b) |
Each of the conditions set forth in Section 3.3 is for
the exclusive benefit of the Purchasers, and may be waived by the Agent in
its sole discretion in whole or in part in writing. Each of the conditions
set forth in Section 3.4 is for the exclusive benefit of Banro and the
Seller, and may be waived by Banro and the Seller in their sole discretion
in whole or in part in writing. |
ARTICLE 4
ADDITIONAL PAYMENT TERMS
All payments of funds due by one Party to another under this
Agreement shall be made in United States Dollars and shall be made by wire
transfer in immediately available funds to the bank account or accounts
designated by the receiving Party in writing from time to time.
|
(a) |
All deliveries of Refined Gold and all payments and
transfers of property of any kind made under this Agreement and related
Security Agreements by the Seller or any of its Affiliates to the
Purchasers shall be made without any deduction, withholding, charge or
levy on account of any Taxes, all of which shall be for the sole account
of the Seller. All Taxes, if any, as are required to be so deducted,
withheld, charged or levied by the Seller or any of its Affiliates on any
such delivery or payment, shall be paid by the Seller delivering or paying
to the Purchasers or on their behalf, in addition to such delivery or
payment, such additional delivery or payment as is necessary to ensure
that the net amount received by the Purchasers (net of any such Taxes,
including any Taxes required to be deducted, withheld, charged or levied
on any such additional amount) equals the full amount that the Purchasers
would have received had no such deduction, withholding, charge or levy
been required. |
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(b) |
If a Purchaser receives a refund of any Taxes with
respect to which the Seller has paid additional amounts pursuant to
Section 4.2(a) hereof, such Purchaser shall pay such amount to the Seller
(but only to the extent of additional amounts paid by the Seller under
Section 4.2(a) with respect to the Taxes giving rise to such refund), net
of all reasonable out-of-pocket expenses of such Purchaser and without
interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Seller, upon
the request of such Purchaser, shall repay the amount paid to the Seller
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Purchaser if the Purchaser is required to
repay such refund to such Governmental
Authority. |
- 26 -
In the event that any new Tax is implemented, or there shall
occur any revision in, implementation of, amendment to or interpretation of any
existing Tax, in each case that has an adverse effect on any of the Parties or
any of their Affiliates in respect of the transactions contemplated by this
Agreement, then the Agent, on behalf of the Purchasers, on the one hand, and the
Seller on the other hand, agree that they shall negotiate in good faith with
each other to amend this Agreement so that the other Parties and their
Affiliates are no longer adversely affected by any such enactment, revision,
implementation, amendment or interpretation, as the case may be; provided that
any amendment to this Agreement shall not have any adverse effect on the Seller
and its Affiliates on the one hand, and the Purchasers and their Affiliates on
the other hand.
Any payment or delivery of Payable Gold not made by a Party on
or by any applicable payment referred to in this Agreement shall incur interest
from the due date until such payment or delivery is paid or made in full at a
per annum rate equal to the [Redacted] on the due date, calculated and
compounded monthly in arrears. Any dollar amount or Refined Gold owing by a
Party to any other Party under this Agreement may be set off against any dollar
amount or Refined Gold owed to such Party by the other Party. Any amount of
Refined Gold set off and withheld against any non-payment by a Party shall be
valued at the Gold Price as of the first trading day that such amount of Refined
Gold became payable to such Party.
ARTICLE 5
TERM
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(a) |
The term of this Agreement shall commence on the date
hereof and, subject to Sections 5.1(b) and 5.1(c), shall continue until
the date that is 40 years after the date of this Agreement (the
Initial Term) and thereafter shall automatically be extended for
successive 15 year periods (each an Additional Term and, together
with the Initial Term, the Term), unless there has been no active
mining operations on the Properties during the last 15 years of the
Initial Term or throughout such Additional Term, as applicable, in which
case this Agreement shall terminate at the end of the Initial Term or such
Additional Term, as applicable. |
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(b) |
Notwithstanding Section 5.1(a), the Majority Purchasers
may terminate this Agreement as of the expiry of the Initial Term or
current Additional Term, as applicable, by written notice to Banro and the
Seller within 10 Business Days prior to the date on which the then
applicable Initial Term or Additional Term is to expire. |
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(c) |
Notwithstanding Section 5.1(a) or 5.1(b), the Agent may
terminate this Agreement on 10 Business Days written notice to Banro and
the Seller if the conditions set out in Section 3.3 are not satisfied within one
year after the date of this Agreement. |
- 27 -
If by the expiry of the Initial Term the Seller has not sold
and delivered to the Purchasers an amount of Refined Gold sufficient to reduce
the uncredited balance of the Deposit to nil as calculated in accordance with
Section 2.4(a), then the Seller shall provide a detailed calculation of the
uncredited balance of the Deposit and shall pay such uncredited balance of the
Deposit to the Purchasers, in accordance with each Purchasers Applicable
Percentage, within 30 days after the expiry of the Initial Term.
The parties hereto agree to consider, in good faith,
opportunities for the Seller to repurchase the Payable Gold from the Purchasers
although there is no obligation on the Purchasers to sell.
ARTICLE 6
REPORTING; BOOKS AND RECORDS
6.1 |
Notice of
Information |
Prior to delivery to the Purchasers of any of the information
set out in this Article 6 or otherwise in this Agreement, Banro and the Seller
shall inform the Agent if such information would be considered material
non-public information of Banro. In such event, the Agent shall have the option,
in its sole discretion on behalf of the Purchasers, to (a) refuse to accept such
information, or (b) require that such information be either (i) publicly
disclosed within two Business Days, or (ii) where such information constitutes
scientific and technical information representing a material change to the
Namoya Project delivered at a subsequent date within 45 days together with an
updated technical report in accordance with NI 43-101, and notice of such
refusal or delayed delivery will constitute a valid waiver, or partial waiver,
as the case may be, of the obligation to deliver such information.
The Seller shall deliver to the Purchasers a Monthly Report on
or before the fifteenth day after the end of each calendar month. The Seller
shall also provide to the Purchasers on request together with the Monthly
Reports, all other relevant Namoya Project documentation or information that may
have a material impact on the Namoya Project, including the Operating Plan.
At least once every 12 months and no later than February 26 of
each calendar year, and within 15 days whenever an update to the Operating Plan
is adopted by management of Banro or any of the Banro Group Entities which
update includes a material change in the annual production forecast included in
the Operating Plan, the Seller shall provide to the Purchasers:
|
(a) |
a forecast, substantially in the form of the Operating
Plan, of the number of payable ounces of gold expected to be produced over
the next calendar year on a month by month basis and over the remaining
life of the mine on a year by year basis,
including: |
- 28 -
|
(i) |
types, tonnes and gold grade of ore to be mined;
and |
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(ii) |
types, tonnes and gold grade of ore to be
stockpiled; |
|
(b) |
listing of the Operating Plan assumptions, including
operating and capital expenditure assumptions, exchange rates and metal
prices used for short term and long term planning purposes in developing
the forecast referred to in Section 6.3(a); |
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(c) |
a schedule of all indebtedness and Encumbrances of the
Banro Group Entities at the preceding year end; |
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(d) |
a statement setting out the actual tonnes and gold grade
of ore stockpiled as of the start of the period covered by the Operating
Plan; and |
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(e) |
a statement setting out the gold reserves and resources
(by category) for the Properties, all calculated in accordance with the
standards of the Canadian Institute of Mining and Metallurgy and NI
43-101, and the assumptions used, including cut-off grade, metal prices
and metal recoveries. |
6.4 |
Notice of Amendments to Plans, Schedules, Project
Costs and Other Matters |
If, at any time, the Operating Plan is subject to a material
amendment, then, within 15 days after such amendment or amendments is or are
made, the amended plan, together with the information in Sections 6.3(a),
6.3(b), 6.3(c) and 6.3(e) shall be provided by the Seller to the Purchasers. For
the purposes of this Section 6.4 only, materiality shall mean (a) with respect
to gold production, a 5% change in total gold production under the Operating
Plan; or (b) with respect to proven and probable reserves, a reduction of more
than 10% (not taking into account any reductions resulting from depletion in
accordance with ordinary course operations); or (c) with respect to guidance for
the next twelve (12) month period, a 10% change in production guidance.
|
(a) |
The PSA Entities shall keep true, complete and accurate
books and records of all of the PSA Entities operations and activities
with respect to the Namoya Project, including the mining and production of
gold therefrom and the mining, treatment, processing, milling,
transportation and sale or refining of gold therefrom. The PSA Entities
shall permit the Agent and its authorized representatives and agents to
perform audits or other reviews and examinations of its books and records
and other information relevant to the production, delivery and
determination of Produced Gold and compliance with Article 6 from time to
time at reasonable times at the Agents sole risk and expense and upon
five Business Days notice, to confirm compliance with the terms of this
Agreement, provided that unless there is a continuing Banro Event of
Default, the Agent and its authorized representatives and agents will not
exercise such rights more often than one (1) time during any calendar
quarter. The Agent shall diligently complete any audit or other
examination permitted hereunder. |
- 29 -
|
(b) |
Banro and the Seller shall prepare, or cause to be
prepared, technical reports on the Properties in compliance with NI 43-101
as and when required by Applicable Laws. If any technical report is
prepared on the Namoya Project, Banro and the Seller shall, subject to
compliance with Applicable Laws, provide to the Purchasers an advanced
draft copy of such technical report before it is filed on SEDAR, and in
any event not less than five (5) Business Days before it is so filed.
Banro and the Seller shall use commercially reasonable efforts to provide
to the Purchasers (i) qualified persons consents, qualified persons
certificates or other technical data, records or information pertaining to
the Properties in the possession or control of Banro and the Seller, and
(ii) copies of any technical report and cause the authors of such
technical report to have such technical report addressed directly to the
Purchasers if any of the Purchasers are required to file such technical
reports under NI 43-101. |
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(c) |
In addition, if during the Term Banro should cease to be
a reporting issuer under Applicable Law, Banro shall deliver to the
Purchasers audited financial statements of Banro and its subsidiaries on a
consolidated basis, such audit to be conducted by a nationally recognized
auditing firm. |
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(a) |
Upon no less than ten (10) Business Days notice to Banro
and the Seller and not more frequently than semi-annually and subject at
all times to the workplace rules and supervision of the Seller, and
provided any rights of access do not interfere with any exploration,
development, mining or processing work conducted on the Properties, the
Seller shall grant, or cause to be granted, to the Purchasers and their
representatives and agents, at reasonable times and at the Purchasers
sole risk and expense, the right to access the Properties and the
facilities of the Namoya Project, in each case to monitor the mining and
processing operations on the Namoya Project. Provided there has been no
Banro Event of Default that is continuing, the Purchasers may avail
themselves of such right of access a maximum of twice per calendar year
(including the mill in respect thereof), and for this purpose, invitations
from Banro will not reduce the number of visits the Purchasers may
request. |
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(b) |
Upon no less than 15 Business Days notice to Banro and
the Seller and not more frequently than annually (which limit will not
include tours at the invitation of Banro), the Purchasers shall have the
right to conduct an investors tour on the Namoya Project; provided that
such tours shall not unreasonably interfere with the Sellers activities
and operations at the Namoya Project and provided that such tours shall
not include any gold producer reasonably considered to be a competitor of
Banro and the Seller. Such investor tours shall be at the sole risk and
expense of the Purchasers and their invitees, and the Purchasers shall (a)
comply and request that their invitees comply with the policies and
procedures that the Seller applies to its own invitees; (b) give Banro and
the Seller prompt notice of any injuries, property damage or environmental
harm that may occur during such visit; and (c) indemnify, defend and hold
Banro and the Seller harmless from any loss, liability, damage, claim or
demand by reason of injury to the Purchasers or Banro and the Seller or any of their
respective invitees, employees, officers, directors, agents, or representatives
caused by the Purchasers exercise of its rights under this Section. |
- 30 -
ARTICLE 7
COVENANTS
7.1 |
Conduct of
Operations |
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(a) |
Banro and the Seller will, and will cause all PSA
Entities to, operate the Project Assets on a commercial basis as though
the Seller has a full economic interest in all the gold produced from the
Properties. Banro and the Seller shall ensure that (i) all cut-off grade,
short term mine planning and production decisions concerning the Namoya
Project shall be based on gold prices typical of normal industry practice
and consistent with the practices of Banro and its Affiliates as at the
date of this Agreement in connection with such decisions, and (ii) all
longer term planning and resource and reserve calculations concerning the
Namoya Project shall use gold prices based on normal industry practice and
consistent with the historical practices of Banro and its Affiliates in
connection with such planning and calculations. |
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(b) |
Subject to Section 7.1(a), all decisions regarding the
Namoya Project, including all decisions concerning the methods, extent,
times, procedures and techniques of any (i) exploration, development and
mining related to the Namoya Project, including spending on capital
expenditures, (ii) leaching, milling, processing or extraction, (iii)
materials to be introduced on or to the Namoya Project, and (iv) except as
provided herein, the sale of gold and terms thereof, shall be made by the
Seller, in its sole discretion. |
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(c) |
Notwithstanding Section 7.1(b), Banro and the Seller
agree that all mining operations and activities pertaining to or in
respect of the Namoya Project shall be performed in accordance with
Applicable Laws, all applicable licences, permits and other authorizations
and accepted mining, processing, engineering and environmental practices
prevailing in the mining industry. |
7.2 |
Preservation of Corporate
Existence |
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(a) |
Except as permitted in Section 7.2(b), each of Banro and
the Seller shall, and Banro shall cause each of the PSA Entities to, at
all times from and after the date hereof do and cause to be done all
things necessary or advisable to maintain its corporate
existence. |
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(b) |
Subject to Section 8.3, each of Banro and the Seller
shall not, and Banro shall cause each of the PSA Entities not to
consolidate, amalgamate with, or merge with or into, or Transfer all or
substantially all of its assets to, or reorganize, reincorporate or
reconstitute into or as, another entity, or continue to any other
jurisdiction unless at the time of such consolidation, amalgamation,
merger, reorganization, reincorporation, reconstitution, Transfer, or
continuance, the resulting, surviving or transferee entity assumes in favour of
the Agent and the Purchasers all the obligations of such Party under this
Agreement and any Security Agreement to which it is a party. |
- 31 -
7.3 |
Processing/Commingling |
Banro and the Seller shall not and shall cause each of the
Banro Group Entities to not process Other Minerals through the Processing
Plant in priority to, or commingle Other Minerals with, gold mined, produced,
extracted or otherwise recovered from the Properties, unless (i) the applicable
Banro Group Entity has adopted and employs reasonable practices and procedures
for weighing, determining moisture content, sampling and assaying and
determining recovery factors (a Commingling Plan), such Commingling
Plan to ensure the division of Other Minerals and Produced Gold for the purpose
of determining the quantum of Produced Gold; (ii) the Purchasers shall not be
disadvantaged as a result of the processing of Other Minerals in priority to, or
concurrently with, Produced Gold; (iii) the Agent has approved the Commingling
Plan, such approval not to be unreasonably withheld; (iv) the Banro Group Entity
keeps all books, records, data, information and samples required by the
Commingling Plan; and (v) the Banro Group Entity enters into a commingling
agreement with the Agent, for and on behalf of the Purchasers, that provides
that there is no negative impact on the gold production attributable to the
stream as a result of the commingling. The Seller agrees to revisit the
Commingling Plan if the Agent determines that circumstances have changed, in
order to ensure that the Commingling Plan continues to provide for the accurate
measurement of gold produced from the Properties.
7.4 |
Processing Agreements |
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(a) |
From and after the date hereof, the Seller (together with
the PSA Entities from which Produced Gold is sold) shall be a party to any
Processing Agreements and the PSA Entities party thereto shall be
responsible for delivering all gold to each Processor, in such quantity,
description and amounts and at such times and places as required under and
in accordance with each Processing Agreement. |
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(b) |
The PSA Entities shall cause all terms and conditions of
any Processing Agreements or other agreements for the sale of Produced
Gold entered into by a PSA Entity to be on commercially reasonable arms
length terms and conditions. The Seller shall provide the Agent with a
final signed copy of any such agreements within five Business Days of the
execution thereof. |
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(c) |
Banro shall take commercially reasonable steps to
enforce, and shall cause any Affiliate, to take reasonable steps to
enforce its rights and remedies under each such Processing Agreement with
respect to any breaches of the terms thereof relating to the timing and
amount of Gold Payments to be made thereunder. Banro shall notify the
Purchasers in writing when any dispute arising out of or in connection
with any such Processing Agreement is commenced in respect of Refined Gold
and shall provide the Agent with timely updates of the status of any such
dispute and the final decision and award of the court or arbitration panel
with respect to such dispute, as the case may
be. |
- 32 -
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(d) |
Banro shall ensure that the final sale and delivery of
doré shall only be made to a Processor pursuant to a Processing Agreement.
For greater certainty, nothing in this Section 7.4(d) shall prohibit the
processing of Produced Gold by a PSA Entity, provided that the doré is
eventually sold to a Processor. |
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7.5 |
Insurance |
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(a) |
Banro and the Seller shall maintain with reputable
insurance companies insurance with respect to the Project Assets and the
operations conducted on and in respect of the Namoya Project against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar operations and, until the Deposit
Reduction Date, shall have the Agent, on behalf of the Purchasers added as
an additional insured and loss payee in the insurance policies. |
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(b) |
The Seller shall ensure that each shipment of gold is
adequately insured in such amounts and with such coverage as is customary
in the mining industry, until the time that risk of loss and damage for
such gold is transferred to the processor. |
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(c) |
When a Banro Group Entity receives payment under any
insurance policy in respect of a shipment of Produced Gold that is lost or
damaged after leaving the Namoya Project and before the risk of loss or
damage is transferred to the Processor, the Seller shall use 10% of the
amount of the Net Proceeds of any insurance payment received by the Banro
Group Entity in respect thereof to acquire Refined Gold in accordance with
Section 2.2(d) and shall sell and deliver to the Purchasers, in accordance
with each Purchasers Applicable Percentage, (without duplication to the
extent previously sold and delivered to the Purchasers by the Seller) such
amount of Refined Gold at the applicable Gold Purchase Price. |
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(d) |
Banro and the Seller shall insure the Project in such
amounts and with such coverage as is customary in the mining industry for
the construction, development and operation of the Project, including the
Processing Plant. Banro and the Seller covenant and agree that in the
event of any loss or damage that is insured prior to the date on which the
uncredited balance of the Deposit has been reduced to nil, the Seller
shall either (i) use all Net Proceeds of any insurance payment received by
the Banro Group Entity to rebuild or repair all damaged facilities forming
part of the Namoya Project, or (ii) use each Purchasers share of the Net
Proceeds of such insurance payment received by any Banro Group Entity
within 30 days after receipt of such proceeds by such Banro Group Entity,
to acquire Refined Gold in accordance with Section 2.2(d) and shall
deliver to the Purchasers, in accordance with each Purchasers Applicable
Percentage, such amount of Refined Gold, each Purchasers share being
calculated as the ratio of the fair value of each Purchasers interest in
the Namoya Project (taking into account each Purchasers Applicable
Percentage) as represented by its rights under this Agreement to the value
of Banros interests in the Namoya Project when measured by the same
criterion which establishes the value of such Purchasers interest. A
failure to agree on the foregoing proportion is arbitrable under Section
14.1. |
- 33 -
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(e) |
Banro and the Seller shall, on or prior to the Closing
Date and upon the reasonable request of the Agent at reasonable intervals
no more than once per year, furnish to the Agent a certificate setting
forth the nature and extent of all insurance maintained by or on behalf of
the PSA Entities in accordance with Section 7.5(a). Banro and the Seller
shall, upon the request of the Agent, provide the Purchasers with copies
of all insurance policies as in effect from time to time relating to the
Project Assets. |
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(f) |
Banro and the Seller, acting reasonably, shall not at any
time do or omit to do anything, or cause anything to be done or omitted to
be done, whereby any insurance required to be effected hereunder would, or
would be likely to, be rendered void or voidable or suspended, impaired or
defeated in whole or in part. |
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7.6 |
Confidentiality |
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(a) |
Each Party (a Receiving Party) agrees that it
shall maintain as confidential and shall not disclose, and shall cause its
Affiliates, employees, officers, directors, advisors, agents and
representatives to maintain as confidential and not to disclose, the terms
contained in this Agreement and all information (whether written, oral or
in electronic format) received or reviewed by it as a result of or in
connection with this Agreement, including any draft or final technical
reports provided under Article 4 and the information received by it
pursuant to the confidentiality agreement dated January 15, 2014
(Confidential Information), provided that a Receiving Party may
disclose Confidential Information in the following
circumstances: |
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(i) |
to its auditor, legal counsel, lenders, brokers,
underwriters and investment bankers and to persons with which it is
considering or intends to enter into a transaction for which such
Confidential Information would be relevant (and to the legal counsel and
advisors of any such entity), provided that such persons are advised of
the confidential nature of the Confidential Information, undertake to
maintain the confidentiality of it and are strictly limited in their use
of the Confidential Information to those purposes necessary for such
persons to perform the services for which they were, or are proposed to
be, retained by the Receiving Party or to consider or effect the
applicable transaction, as applicable; |
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(ii) |
subject to Sections 7.6(c) and 14.9, where that
disclosure is necessary to comply with Applicable Laws or court order,
provided that such disclosure is limited to only that Confidential
Information so required to be disclosed and that the Receiving Party will
have availed itself of the full benefits of any laws, rules, regulations
or contractual rights as to disclosure on a confidential basis to which it
may be entitled; |
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(iii) |
for the purposes of the preparation of any arbitration
proceeding commenced under Section 14.1; |
- 34 -
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(iv) |
where such information is already widely known by the
public other than by a breach of the confidentiality terms of this
Agreement or is known by the Receiving Party prior to the entry into of
this Agreement or obtained independently of this Agreement and the
disclosure of such information would not breach any other confidentiality
obligations; |
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(v) |
with the consent of the disclosing Party; and |
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(vi) |
to those of its and its Affiliates directors, officers,
employees, representatives and agents who need to have knowledge of the
Confidential Information for purposes of the rights and obligations
contemplated by this Agreement. |
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(b) |
Each Party shall ensure that its and its Affiliates
employees, directors, officers, representatives and agents and those
persons listed in Section 7.6(a)(i) are made aware of this Section 7.6 and
comply with the provisions of this Section 7.6. Each Party shall be liable
to the other Party for any improper use or disclosure of such terms or
information by such persons. |
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(c) |
If in compliance with Applicable Laws, either Party is
required to file this Agreement on SEDAR or EDGAR, such Party shall notify
the other Party of such requirement within two Business Days of the date
of this Agreement, and the Parties shall consult with each other with
respect to any proposed redactions to the Agreement in compliance with
Applicable Laws before it is filed on SEDAR or EDGAR. Neither Party shall
file this Agreement on SEDAR or EDGAR without reasonable prior
consultation with the other Party, provided that such reasonable prior
consultation shall not prohibit either Party from filing this Agreement on
SEDAR or EDGAR redacted only to the extent such Party considers it
permitted pursuant to Applicable Laws. |
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(d) |
The PSA Entities and the Agent will consult with each
other before issuing any press release or otherwise making any public
disclosure in respect of this Agreement and the transactions contemplated
hereunder and shall not issue any such press release or make any such
public disclosure before receiving the consent of the other Party. Nothing
in this Section 7.6(d) prohibits any party from making a press release or
other disclosure required by Applicable Laws or by the policies or rules
of any stock exchange. |
7.7 |
Adverse Impact to Payable
Gold |
Banro and the Seller shall promptly notify the Purchasers
regarding any matter that has or is reasonably likely to have a Material Adverse
Effect or any occurrence of or circumstances that may result in a Banro Event of
Default, including, for greater certainty, receipt of a notice of acceleration
in respect of any indebtedness or obligations or an intention to enforce
security against any of the Project Assets. Banro and the Seller shall seek to
comply with this Section 7.7, to the extent commercially reasonable and subject
to compliance with Applicable Laws and stock exchange policy, prior to any
public announcement regarding the matter.
- 35 -
Each of the Parties agrees that it will comply in all material
respects with the Corruption of Foreign Public Officials Act (Canada),
the Bribery Act (United Kingdom) and any other applicable anti-corruption
legislation in connection with its dealings relating to this Agreement and the
Namoya Project.
Banro and the Seller shall comply with all Applicable Laws in
all material respects, including without limitation, the World Gold Council
Conflict-Free Gold Standard, with respect to all operations at the Namoya
Project.
7.9 |
Expropriation |
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[Redacted] |
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7.10 |
Banro Covenants |
Banro shall guarantee that the Seller and all Banro Group
Entities shall observe, satisfy, perform and pay all actions, covenants,
indebtedness, liabilities and obligations of each to the Agent and the
Purchasers in accordance with the terms of this Agreement. The Parties
acknowledge and agree that any breach by Banro of its obligations under this
Section would cause the Agent and the Purchasers irreparable harm for which
monetary damages alone would not be a sufficient remedy and that therefore the
Agent and the Purchasers may seek and obtain orders of specific performance,
injunctions and other equitable remedies and remedies available under civil laws
against Banro with respect thereto as a court of competent jurisdiction or an
arbitrator under Section 14.1 may see fit to grant with respect to any such
breach and neither Banro, the Seller or any Banro Group Entity shall oppose or
seek to deny any such remedies.
ARTICLE 8
BANRO TRANSFERS AND CONTROL
8.1 |
Owner of Project
Assets |
Subject to Section 8.3 and except as provided in Section 9.2,
the PSA Entities shall be the only legal and beneficial owners of the Project
Assets, and Banro and the Seller shall ensure that no person other than the PSA
Entities hold or acquire any ownership right, as applicable, or title in or to
the Project Assets. Subject to the last paragraph of Section 8.3, Banro and the
Seller shall maintain, or cause to be maintained, the Properties in good
standing and, in all material respects, all Approvals related thereto, including
without limitation taking all actions necessary, and making such expenditures
and investments as are required, to keep its mineral claims, mineral leases,
mineral and exploration licenses and other mining rights in good standing.
Without limiting the generality of the foregoing, Banro and the Seller shall
apply for and obtain any and all available renewals and extensions of the its
mineral claims, mineral leases, mineral and exploration licenses and other
mining rights and Approvals in respect of the Properties. Notwithstanding the
foregoing, this Section 8.1 shall not restrict any leased personal property
(provided that the lessee is the Seller) or personal property that is equipment
that is obsolete or no longer in use under the Operating Plan.
- 36 -
8.2 |
Prohibited Transfers and Changes of
Control |
Except as set out in Section 8.3, Banro and the Seller shall
not, and shall ensure that the Namoya Holdcos and any subsidiary of the Seller
or Banro to which the Project Assets have been Transferred in accordance with
Section 8.3(c), holding Project Assets, does not during the Delivery Period:
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(a) |
Transfer, in whole or in part, directly or indirectly,
the Project Assets or any right, title or interest therein; or |
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(b) |
agree to, or enter into any agreement, arrangement or
other transaction with any person that would cause, or otherwise allow or
permit to exist, a Change of Control of any Banro Group Entity, including
any subsidiary of the Seller or Banro to which the Project Assets have
been Transferred in accordance with Section 8.3(c), holding Project
Assets. |
8.3 |
Permitted Transfers and Changes of
Control |
Section 8.2 shall not prohibit a Transfer or Change of Control,
if:
Transfer of the Project Asset
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(a) |
in the case of a direct or indirect Transfer of the
Project Assets to a person that is not a PSA
Entity: |
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(i) |
the Seller or Banro shall have provided the Purchaser
with at least 30 days prior written notice of the proposed
Transfer; |
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(ii) |
all, but not less than all, of the Project Assets (other
than leased personal property that is not material to the Project Assets
that, by the terms of the lease, may not be transferred) are transferred
to the same transferee; |
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(iii) |
the Seller and any other applicable Banro Group Entity
transfers and assigns all of its rights and obligations under this
Agreement to the same transferee concurrently with any such Transfer, and
such transferee assumes in favour of the Agent and the Purchasers all of
the Sellers and, if applicable, the other Banro Group Entities
obligations under this Agreement pursuant to an agreement in form and
substance satisfactory to the Agent, acting reasonably; |
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(iv) |
the transferee complies with the conditions set forth in
Sections 3.3(a), (c), (e), (g) and (h) as such sections pertain to such
transferee, including an opinion as to the title to the
Properties; |
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(v) |
the transferee, and its Affiliates in the case of Section
9.2(c), grant the same charges and security interests in, to and over the
PSA Collateral, and enter into the same Security Agreements as those
entered into pursuant to Section 9.2 |
- 37 -
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(vi) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(vii) |
the Agent confirms in writing that it does not reasonably
expect such Transfer or Change of Control to have a Material Adverse
Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for
the purposes of this Section 8.3(a)(vii)); |
Change of Control
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(b) |
in the case of a Change of Control of Banro, the Seller,
the Namoya Holdcos or any subsidiary of the Seller or Banro to which the
Project Assets have been transferred in accordance with Section
8.3(c): |
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(i) |
the Seller or Banro shall have provided the Purchasers
with at least 30 days prior written notice of the proposed Change of
Control; |
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(ii) |
(1) the transferee, if not itself controlled by another
person; or (2) the Affiliate of the transferee that is not itself
controlled by any other person: |
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(A) |
assumes in favour of the Agent and the Purchasers all of
the obligations of Banro under this Agreement, such assumption to occur by
an agreement in form and substance satisfactory to the Agent, acting
reasonably; and |
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(B) |
complies with the conditions set forth in Sections
3.3(a), (c), (e), (g) and (h) as such sections pertain to such Affiliate
or transferee; |
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(iii) |
in respect of such Change of
Control: |
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(A) |
there is a similar Change of Control of all of the
subsidiaries of the Seller and such subsidiaries of Banro and the Seller
to the same person; and |
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(B) |
the person acquiring control of the Seller, its
subsidiaries and such subsidiaries of Banro, and the Affiliates of such
person, grants the same charges and security interests in and to the PSA
Collateral contemplated by Section 9.2; |
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(iv) |
there is no Banro Event of Default (or an event which
with notice or lapse of time or both would become a Banro Event of
Default) that has occurred and is continuing; and |
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(v) |
the Agent confirms in writing that it does not reasonably
expect such Transfer or Change of Control to have a Material Adverse
Effect (where, in the definition of Material Adverse Effect, the
reference to PSA Entity shall instead refer to transferee entity for the
purposes of this Section 8.3(b)(v)); |
- 38 -
Inter-corporate Transfer
|
(c) |
in the case of a direct or indirect Transfer of the
Project Assets to Banro or a subsidiary of
Banro: |
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(i) |
Banro provides a confirmation in favour of the Purchaser
that its obligations under this Agreement shall continue in full force and
effect despite any such Transfer; and |
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(A) |
if all, but not less than all, of the Project Assets
(other than leased personal property that is not material to the Project
Assets that, by the terms of the lease, may not be transferred) are
Transferred to the same transferee, then the provisions of Sections
8.3(a)(i) through 8.3(a)(vii) are complied with mutatis mutandis;
or |
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(B) |
if less than all of the Project Assets are Transferred to
one or more Banro Group Entities and/or one or more other directly or
indirectly wholly-owned subsidiaries of Banro (provided that the maximum
number of entities to which such Transfers will occur shall not exceed
five (5)), then: |
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(1) |
the provisions of Sections 8.3(a)(i), 8.3(a)(iv),
8.3(a)(v) and 8.3(a)(vi) are complied with mutatis mutandis; and |
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(2) |
the Seller provides a confirmation in favour of the Agent
and the Purchasers that its obligations under this Agreement shall
continue in full force and effect despite any such
Transfer; |
Joint Ventures and Minority Dispositions
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(d) |
in the case of a PSA Entity entering into a minority
interest disposition, joint venture or other similar commercial
arrangement with another person that is not a Banro Group Entity with
respect to the Properties: |
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(i) |
the Seller or Banro shall have provided the Purchasers
with at least 30 days prior written notice of the proposed disposition,
joint venture or other similar commercial arrangement; |
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(ii) |
Banro retains at least an indirect 50% undivided interest
in the Properties; |
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(iii) |
a PSA Entity is at all times the operator of the
Properties; |
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(iv) |
such other person agrees in a document, or documents,
acceptable to the Agent, acting reasonably, with the PSA Entity, the Agent
and the Purchasers and any other such person to acknowledge the
obligations of the Seller under this Agreement and the Security Agreements, including
the granting to the Purchasers of all the security interests contemplated
thereunder; provided that, if such other person acquires any legal right,
title or interest in and to any of the Project Assets (including any
registered or recorded title in and to the Properties), such person assumes
on a joint and several basis with the Seller all of the obligations and duties
under this Agreement and grants the same charges and security interests
in, to and over the Project Assets to which it acquires any legal right, title
or interest, and enters into the same Security Agreements entered into by
the Seller and its subsidiaries pursuant to Section 9.2; |
- 39 -
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(v) |
all filings have been made and all other actions have
been taken that are required in order for the Agent, for and on behalf of
the Purchasers to continue at all times following such transaction to have
the valid and perfected security interest contemplated by Section
9.2; |
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(vi) |
such other person complies with the conditions set forth
in Sections 3.3(a), (c), (e), (g) and (h) as it pertains to such other
person, including an opinion as to the title to the Properties if such
other person acquires any registered or recorded and legal right, title or
interest in and to any of the Properties; |
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(vii) |
there is no Banro Event of Default that has occurred and
is continuing (or an event which with notice or lapse of time or both
would become a Banro Event of Default); and |
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(viii) |
the Agent confirms in writing that it does not reasonably
expect such minority interest disposition, joint venture or other similar
commercial arrangement to have a Material Adverse Effect;
or |
With Consent
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(e) |
the Agent provides its prior written
consent; |
provided that, for greater certainty, if the Seller intends to
abandon, surrender, relinquish or let lapse any of the Properties (the
Abandonment Property), Banro shall (i) have determined, acting
commercially reasonably, that it is not economic to mine gold from the
Properties that it proposes to abandon, surrender, relinquish or let lapse, and
(ii) first give notice of such intention to the Purchasers at least 90 days in
advance of the proposed date of abandonment. If, not later than 10 days before
the proposed date of abandonment, Banro receives from the Agent written notice
that the Agent desires the Seller to convey the Abandonment Property to the
Purchasers or an assignee, Banro shall, without additional consideration, convey
the Abandonment Property in good standing, without warranty, to the Purchasers
and shall use commercially reasonable efforts to assist the Agent in acquiring
any necessary or appropriate consents or approvals to such Transfer and shall
thereafter have no further obligation to maintain the title to the Abandonment
Property and the terms of this Agreement shall cease to apply to such
Abandonment Property. If the Agent does not give such notice to Banro within the
prescribed period of time, the Seller may abandon the Abandonment Property and
shall thereafter have no further obligation to maintain the title to the
Abandonment Property; provided, however, that if the Seller or any Affiliate of
Banro reacquires a direct or indirect interest in any of the ground covered by
the Abandonment Property at any time within seven (7) years following
abandonment, the production of gold from such ground shall be subject to this
Agreement. The Seller shall give written notice to the Purchasers within ten
(10) days of any such reacquisition.
- 40 -
ARTICLE 9
SECURITY
9.1 |
Financings and
Encumbrances |
|
(a) |
During the Term, except for Permitted Indebtedness, no
PSA Entity shall incur or enter into any Indebtedness. |
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(b) |
Except as provided in this Article 9, no PSA Entity shall
grant or allow to exist an Encumbrance, other than the Permitted
Encumbrances, in respect of, all or any of the PSA Collateral, in favour
of any other person. |
|
(a) |
The Seller shall: (i) execute and deliver a guarantee in
favour of the Agent, for and on behalf of the Purchasers, in form and
substance satisfactory to the Agent, acting reasonably, guaranteeing the
performance, when due, of all PSA Obligations; and (ii) grant, as security
for the payment and performance, when due, of all PSA Obligations, to and
in favour of the Agent, for and on behalf of the Purchasers first ranking
charges and security interests (subject only to the Prior Ranking
Permitted Encumbrances) in, to and over (A) the Payable Gold, including
all proceedings thereof, and (B) the Project Collateral, the charged
amount (the Secured Amount) of such charges and security
interests with respect to the Project Collateral being initially, the
Deposit, such amount to reduce on each Delivery Date by an amount equal to
60% of the amount that is equal to the difference between the Gold Price
on the Business Day following the Date of Delivery and the Ongoing Price,
multiplied by the number of ounces of Payable Gold delivered on the Date
of Delivery, pursuant to one or more agreements (the Seller Security
Agreements) executed by each to and in favour of the Agent, for and
on behalf of the Purchasers, in form and substance satisfactory to the
Agent, acting reasonably. |
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(b) |
Banro shall cause the Guarantors and each Banro Group
Entity (other than the Seller) having a direct or indirect interest in and
to, now or in the future, the Project Assets: (i) to execute and deliver a
guarantee in favour of the Agent, for and on behalf of the Purchasers, in
form and substance satisfactory to the Purchaser, acting reasonably,
guaranteeing the payment and performance, when due, of all PSA
Obligations; and (ii) grant, as security for its obligations under such
guarantee to and in favour of the Agent, for and on behalf of the
Purchasers, first ranking charges and security interests up to the Secured
Amount (subject only to the Prior Ranking Permitted Encumbrances) in, to
and over all present and after acquired property, and in each case
including all proceeds thereof (the Group Collateral), all
pursuant to one or more agreements (collectively, the Group Security
Agreements), in form and substance satisfactory to the Agent, acting
reasonably. |
- 41 -
|
(c) |
Banro and the Seller shall cause the Banro Group Entities
to execute and deliver a written assignment, subordination and
postponement of claims (the Assignment, Subordination and
Postponement of Claims), in favour of and in form and substance
satisfactory to the Agent, acting reasonably, that subordinates and
postpones the enforcement of any debts, liabilities and obligations of any
Banro Group Entity and the realization of any charges or security
interests to secure such claims to the obligations under the Security
Agreements and, from and after a Banro Event of Default, or any event or
circumstance which, with notice, the passage of time or both, would
constitute a Banro Event of Default, and until such Banro Event of Default
is remedied, subordinates and postpones the payment of all such debt,
liabilities and obligations (other than Permitted Distributions) to the
payment in full of all debts, liabilities and obligations of the Banro
Group Entities to the Purchaser. |
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|
(d) |
If so requested in writing by the Agent, the Banro Group
Entities shall not, for so long as a Banro Event of Default, or any event
or circumstance which, with notice, the passage of time or both, would
constitute a Banro Event of Default, continues, make any Distribution
other than a Permitted Distribution. |
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(e) |
At the Agents request, Banro shall, and shall cause the
Seller (and any other Banro Group Entity from which Produced Gold is sold)
to provide in any Processing Agreement or selling agreement that the
account with any third party in respect of any Refined Gold related to the
Produced Gold will form part of the Project Collateral. For certainty, and
at all times, the Seller shall not, and Banro shall ensure that the Seller
does not, make any Distributions other than a Permitted Distribution from
such account if a Banro Event of Default, or event which with the giving
of notice or the passage of time or both would constitute a Banro Event of
Default, has occurred and is continuing, or if a Banro Event of Default
would occur or arise immediately after, or as a result of, making a
Distribution. |
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(f) |
The PSA Entities shall cause all such further agreements,
instruments and documents to be executed and delivered and all such
further acts and things to be done as the Agent may from time to time
reasonably require to obtain, perfect and maintain first ranking prior
perfected charges and security interests in, to and over all of the PSA
Collateral, subject only to Prior Ranking Permitted
Encumbrances. |
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(g) |
Banro and the Seller shall not, and shall cause each
Banro Group Entity to not, contest in any manner the effectiveness,
validity, binding nature or enforceability of this Agreement or any of the
PSA Security. |
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(h) |
In addition to the foregoing, Banro, the Seller and each
applicable Banro Group Entity that has provided security to one or more
Lenders where such security also secures the PSA Obligations shall not
seek any discharge of any such security except where the Agent has
provided its prior written consent, in its sole discretion, with a view to
ensuring that such security or any replacement security in favour of the
Agent continues to secure the PSA Obligations and with no change in the
priority thereof. The Seller shall pay all costs and expenses associated
with the foregoing including in connection with the preparation and
registration of all documentation in connection therewith that is required
by the Agent. |
- 42 -
9.3 |
Intercreditor
Agreement |
If, after the Deposit Reduction Date, any PSA Entity wishes to
enter into any Secured Financing or grant an Encumbrance over any PSA Collateral
to any Lenders as security for the payment or performance of any Secured
Financing, and it is the intention of such PSA Entity that such Encumbrance
modify the security interests in favour of the Agent set out in Section 9.2,
then the Agent, for and on behalf of the Purchasers, agrees to enter into an
intercreditor agreement (in each such case, an Intercreditor Agreement)
with the Lenders and the applicable PSA Entity (such agreement to be negotiated
in good faith), on the principal terms and conditions set out in Schedule C. The
Parties agree that if an Intercreditor Agreement is not negotiated and executed
within 60 days of the Purchasers receiving notice from a PSA Entity that it
intends to enter into a Secured Financing or grant on Encumbrance, then either
Party may seek to have any dispute related thereto determined by arbitration as
set out in Section 14.1.
The Seller shall not stockpile, store or place Produced Gold
off of the Properties unless the Seller has first secured from the property
owner where such stockpiling, storage or placement is to occur a written
agreement in recordable form which provides that the Purchasers rights to the
Produced Gold shall be preserved. Such agreement shall provide, inter alia, that
(a) the Purchasers rights pursuant to this Agreement, insofar as they are
applicable, shall continue in full force and effect; (b) the Purchasers rights
in and to the Produced Gold shall be the same as if the Produced Gold were
situate on the Properties; (c) the Purchasers rights set forth in this Section
9.4 shall have precedence over the rights to the Produced Gold of the property
owner where the Produced Gold is stockpiled, stored or placed; (d) the agreement
shall be irrevocable as long as the Produced Gold, or any part thereof, remains
on the property not part of the Properties and (e) the Agent and the Purchasers
shall have substantially similar access rights and obligations as provided in
Section 6.6.
ARTICLE
10
REPRESENTATIONS AND WARRANTIES
10.1 |
Representations and Warranties of Banro and the
Seller |
Banro and the Seller, acknowledging that the Agent and the
Purchasers are entering into this Agreement in reliance thereon, hereby make the
representations and warranties set forth in Schedule D to the Agent and the
Purchasers on and as of the date of this Agreement on a joint and several basis.
The representations and warranties set forth in Schedule D shall be deemed to be
repeated by Banro and the Seller as of the date of the Closing Date.
- 43 -
10.2 |
Representations and Warranties of the
Purchaser |
Each Purchaser, acknowledging that Banro and the Seller are
entering into this Agreement in reliance thereon, on a several, and not joint or
joint and several basis, hereby makes the representations and warranties set
forth in Schedule E to Banro and the Seller on and as of the date of this
Agreement. The representations and warranties set forth in Schedule E shall be
deemed to be repeated by the Purchasers as of the date of the Closing Date.
10.3 |
Survival of Representations and
Warranties |
The representations and warranties set forth in Schedule D and
Schedule E shall survive the execution and delivery of this Agreement.
Where any representation or warranty contained in this
Agreement is expressly qualified by reference to the knowledge of Banro and
the Seller, it shall be deemed to refer to the actual knowledge of any of
Banros and the Sellers Chief Executive, Chief Financial, Vice-President
Technical Services, Vice-President, General Counsel and Secretary and Head of
Projects and Operations and all knowledge which such persons would have if such
persons made due enquiry into the relevant subject matter having regard to the
role and responsibilities of such person.
ARTICLE 11
BANRO
EVENTS OF DEFAULT
11.1 |
Banro Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the PSA Entities (each, a Banro Event of Default):
|
(a) |
the Seller fails to sell and deliver the Payable Gold to
the Purchasers on the terms and conditions set forth in this Agreement
within three (3) Business Days after receipt of notice from the Agent
notifying the Seller of such default; |
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|
(b) |
other than as provided in Section 11.1(a), any PSA Entity
is in breach or default of any terms or conditions, or any of its
covenants or obligations, set forth in this Agreement or any Security
Agreement in any material respect, which breach or default is not remedied
within a period of 30 days following delivery by the Agent to the PSA
Entities of written notice of such breach or default, except in respect of
the covenant set out in Section 7.10, which shall constitute a Banro Event
of Default immediately on notice thereof, or such longer period of time as
the Agent may determine in its sole discretion; |
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|
(c) |
any of the representations or warranties given by Banro
and the Seller is inaccurate in any material respect as of the date given,
and such inaccuracy is not remedied within a period of 30 days following
delivery by the Agent to Banro and the Seller of written notice of such
inaccuracy, or such longer period of time as the Agent may determine in
its sole discretion; |
- 44 -
|
(d) |
in respect of Indebtedness, any (i) failure by any Banro
Group Entity to pay such Indebtedness at the stated maturity thereof or as
a result of which, the holder of such Indebtedness has declared the
principal thereof to be due and payable prior to the stated maturity
thereof, or any event shall occur and shall continue after the applicable
grace period (if any) specified in any agreement or instrument relating to
any such Indebtedness of any Banro Group Entity, the effect of which is to
permit the holder of such Indebtedness to declare the principal amount
thereof to be due and payable prior to its stated maturity and in respect
of which such holder has so declared the principal amount to be payable;
or (ii) failure by any Banro Group Entity to perform or observe any
covenant or agreement to be performed or observed by it contained in any
other agreement or in any instrument evidencing any of such Indebtedness,
the effect of which is to permit the holder of such Indebtedness to
declare the principal amount thereof to be due and payable prior to its
stated maturity and in respect of which the holder has so declared the
principal amount to be payable or has sought to enforce a guarantee in
respect thereof; |
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|
(e) |
upon the occurrence of an Insolvency Event affecting
either Banro or the Seller; or |
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|
(f) |
except as otherwise contemplated herein, the PSA Security
does not constitute a first ranking Encumbrance over the PSA Collateral,
subject only to the Prior Ranking Permitted Encumbrances, and does not
become a first ranking charge within 20 days of receipt of notice from the
Agent notifying the PSA Entities of such
default. |
|
(a) |
If a Banro Event of Default occurs and is continuing, the
Agent shall have the right, upon written notice to Banro and the Seller at
its option and in addition to and not in substitution for any other
remedies available at law or equity, to take any or all of the following
actions: |
|
(i) |
demand all amounts and deliveries owing by the Seller to
the Purchasers; |
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|
(ii) |
terminate this Agreement by written notice to Banro and
the Seller and, without limiting Section 11.2(a)(i), demand all losses
suffered or incurred as a result of the occurrence of such Banro Event of
Default and termination, including the greater of (A) the uncredited
amount of the Deposit, and (B) a net present value calculation of the
Payable Gold that would have been delivered by the Seller to the
Purchasers hereunder, but for the occurrence of such Banro Event of
Default. The net present value calculation shall be based on an assumption
that the Project Assets are owned and operated by a person that has the
financial, operational and technical capability of a prudent owner and
operator, and shall be based on such other reasonable assumptions and
forecasts as may be necessary to make such calculation, including with
respect to the applicable discount rates to use, the applicable gold
prices to use, and the reasonably expected Payable Gold that would have
been sold and delivered to the Purchasers hereunder but for the occurrence
of such Banro Event of Default (based on, among other factors, the
reserves and resources, inferred resources and potential exploration
success, the expected throughput through the Processing Plant, and
expected gold recoveries). Upon demand from the Agent, the Seller shall
promptly pay all such amounts to the Purchasers;
and |
- 45 -
|
(iii) |
enforce the PSA Security. |
|
(b) |
The Parties hereby acknowledge and agree that: (i) the
Agent and the Purchasers will be damaged by a Banro Event of Default; (ii)
it would be impracticable or extremely difficult to fix the actual damages
resulting from a Banro Event of Default; (iii) any sums payable in
accordance with Section 11.2(a) with respect to a Banro Event of Default
are in the nature of liquidated damages, not a penalty, and are fair and
reasonable; and (iv) the amount payable in accordance with Section 11.2(a)
or with respect to a Banro Event of Default represents a reasonable
estimate of fair compensation for the losses that may reasonably be
anticipated from such Banro Event of Default in full and final
satisfaction of all amounts owed in respect of such Banro Event of
Default. |
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(c) |
For greater certainty, if the Agent, for and on behalf of
the Purchasers does not exercise its right under Section 11.2(a)(ii), the
obligations of Banro and the Seller or any successors shall continue in
full force and effect. |
ARTICLE 12
PURCHASER EVENTS OF DEFAULT
12.1 |
Purchaser Events of
Default |
Each of the following events or circumstances constitutes an
event of default by the Purchaser (each, a Purchaser Event of Default):
|
(a) |
a Purchaser fails to pay a portion of the Deposit in
accordance with Article 3 within (3) three Business Days of receipt of
notice from the Seller notifying such Purchaser of such default (a
Deposit Default); |
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|
(b) |
a Purchaser fails to pay for Payable Gold delivered to
the Purchaser in accordance with Section 2.4 within (3) three Business
Days of receipt of notice from the Seller notifying such Purchaser of such
default (a Purchaser Payment Default); |
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|
(c) |
a Purchaser is in breach or default of any of its
covenants or obligations set forth in this Agreement in any material
respect (other than a breach or default of the covenants or obligations
referenced in Sections 12.1(a) or (b) above), and such breach or default
is not remedied within a period of 30 days following delivery by the
Seller to such Purchaser of written notice of such breach or default, or
such longer period of time as the Seller may determine in its sole
discretion; or |
- 46 -
|
(d) |
any of the representations or warranties given by a
Purchaser is inaccurate in any material respect as of the date given, and
such inaccuracy is not remedied within a period of 30 days following
delivery by the Seller to such Purchaser of written notice of such
inaccuracy, or such longer period of time as the Seller may determine in
its sole discretion. |
|
(a) |
If there should occur a Deposit Default, the non-
defaulting Purchasers may deliver the Deposit amount that is the subject
of the Deposit Default, and to the extent they choose to do so, such
funding Purchasers Applicable Percentage will be adjusted accordingly. If
all of the conditions precedents set out in Section 3.3 have been
satisfied and a Deposit Default in respect of all of the Deposit occurs
and is continuing and the Purchasers fail to cure the Deposit Default in
full within 90 days of written notice from the Seller of such default,
then the Seller may elect to at any time thereafter so long as the
Purchasers have not already cured the Deposit Default, to terminate the
Agreement. |
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(b) |
In addition to the PSA Entities rights and remedies
available at law or in equity (other than any right at law or in equity to
terminate this Agreement), if a Purchaser Payment Default occurs and is
continuing, the Seller shall have the right, upon written notice to the
defaulting Purchaser, at its option, to suspend obligations under Section
2.2 solely in respect of the defaulting Purchaser. If the Deposit is
reduced to nil and following the Deposit Reduction Date, the defaulting
Purchaser fails to cure the Purchaser Payment Default in full within 30
days, then the Seller may elect at any time thereafter so long as such
defaulting Purchaser has not already cured the Purchaser Payment Default,
to terminate the Agreement solely with respect to such defaulting
Purchaser and thereupon all of the Sellers obligations hereunder with
respect to such defaulting Purchaser shall thereafter be terminated
without prejudice to any other right or remedy it may have against such
defaulting Purchaser. For greater certainty, the PSA Obligations shall
continue unaffected in respect of the non-defaulting Purchasers. |
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(c) |
If a Purchaser Event of Default under Sections12.1(c) or
12.1(d) has occurred and is continuing, then the PSA Entities shall have
no right to terminate this Agreement, but shall be entitled to all other
remedies available to it at law or in equity against the
Purchaser. |
ARTICLE 13
THE AGENT
The Parties agree that the rights and obligations of the Agent
and of the Purchasers with respect to the Agent shall be as set out in Schedule
G.
- 47 -
ARTICLE 14
GENERAL
14.1 |
Disputes and
Arbitration |
Any dispute, controversy or claim arising out of or relating to
this Agreement or the breach, termination or invalidity thereof which has not
been resolved by the Parties within the time frames specified herein (or where
no time frames are specified, within 15 days of the delivery of written notice
by either Party of such dispute, controversy or claim) shall be referred to the
chief executive officers of each of the disputing parties for prompt resolution.
Any such dispute, controversy or claim which cannot be resolved by the chief
executive officers within 15 days after it has been so referred to them
hereunder, including the determination of the scope or applicability of this
Agreement to arbitrate, shall be settled by binding arbitration in accordance
with the rules for arbitration set out in Schedule F. The determination of such
arbitrator shall be final and binding upon the Parties and there shall be no
appeals from any determination of the arbitrator. Judgment on the award may be
entered in any court having jurisdiction. This Section 14.1 shall not preclude
the Parties from seeking provisional remedies in aid of arbitration from a court
of competent jurisdiction. The Parties covenant and agree that they shall
conduct all aspects of such arbitration having regard at all times to expediting
the final resolution of such arbitration.
Each Party shall execute all such further instruments and
documents and do all such further actions as may be necessary to effectuate the
documents and transactions contemplated in this Agreement, in each case at the
cost and expense of the Party requesting such further instrument, document or
action, unless expressly indicated otherwise.
14.3 |
Reimbursement of
Expenses |
|
(a) |
The Seller and Banro shall pay to the Agent and the
Purchasers all reasonable costs and expenses (including all reasonable
legal fees and disbursements of counsel) incurred by the Agent and the
Purchasers in connection with this Agreement and the other related
transactions, including: |
|
(i) |
the negotiation, preparation, printing, execution and
delivery, both prior and subsequent to the Closing Date, of this Agreement
and the Security Agreements; |
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|
(ii) |
the fees and expenses of engineering, environmental,
insurance consulting and other expert or professional services retained by
the Agent and the Purchasers and any on- site inspections by the Agent and
the Purchasers or its representatives; |
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|
(iii) |
the commissions, fees and expenses of any selling agent
engaged to monetize the Payable Gold; |
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(iv) |
advice of counsel with respect to the this Agreement, the
Security Agreements or any transaction contemplated
thereunder; |
- 48 -
|
(v) |
the enforcement of this Agreement or any Security
Agreement or the enforcement or preservation of rights thereunder or the
bringing of any action, suit or proceeding with respect to the enforcement
of this Agreement or any Security Agreement or any such right or seeking
any remedy which may be available to the Agent and the Purchasers at law
or in equity; |
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(vi) |
the maintenance of the registration, filing and the
perfection of the Security Agreements and the Encumbrances
thereof; |
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(vii) |
any amendments, waivers or consents requested by the
Seller pursuant to the provisions hereof or any other Security
Agreement; |
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(viii) |
the incorporation and organization of the Agent, as well
as the initial issuances of notes or other investment instruments required
to capitalize the Agent with the Deposit; and |
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|
(ix) |
the ongoing fees and expenses in connection with the
administration of the Agent, including fees and expenses related to fiscal
and collateral agents, valuation, tax reporting and
audit, |
(collectively, the Reimbursable
Expenses).
|
(b) |
The obligations of the Seller under this Section 14.3
shall survive the payment and performance of the Sellers obligations
hereunder and the termination of this
Agreement. |
14.4 |
Termination;
Survival |
This Agreement shall terminate immediately upon the delivery of
all the Payable Gold. Notwithstanding the foregoing, the following provisions
shall survive termination of this Agreement: Article 4, 7.6, 7.10, 11.2, 12.2,
14.1, 14.7, 14.9, Schedule F and Schedule G and such other provisions of this
Agreement as are required to give effect thereto.
Nothing herein shall be construed to create, expressly or by
implication, a joint venture, mining partnership, commercial partnership, agency
relationship, fiduciary relationship, or other partnership relationship between
the Agent or any Purchaser on the one hand and any Banro Group Entity on the
other hand.
Nothing herein shall be construed to create, expressly or by
implication, a royalty between the Agent or any Purchaser on the one hand and
any Banro Group Entity on the other hand.
- 49 -
This Agreement shall be governed by and construed under the
laws of the Province of Ontario and the federal laws of Canada applicable
therein (without regard to its laws relating to any conflicts of laws). The
United Nations Vienna Convention on Contracts for the International Sale of
Goods shall not apply to this Agreement.
Unless otherwise specifically provided in this Agreement, any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be delivered by hand to an officer or other responsible
employee of the addressee or transmitted by facsimile transmission or sent by
electronic mail in PDF format, addressed to:
|
(a) |
If to either Banro or the
Seller, to: |
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Banro Corporation |
|
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1 First Canadian Place |
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Suite 7070, 100 King Street
West |
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Toronto, Ontario, M5X 1E3, Canada |
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Attention: |
Chief Financial Officer |
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Telecopier No.: |
416-366-7722 |
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with a copy to: |
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Norton Rose Fulbright Canada
LLP |
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Royal Bank Plaza, South Tower,
Suite 3800 |
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200 Bay Street |
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Toronto, Ontario, M5J 2Z4,
Canada |
|
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Attention: |
Mike Moher |
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Telecopier No.: |
416- 216-3930 |
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(b) |
If to the Agent or any
Purchaser, to: |
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[Redacted] |
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with a copy to: |
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Goodmans LLP |
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333 Bay Street, Suite 3400
|
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Toronto, Ontario |
M5H 2S7 |
|
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Attention: |
Kari Mackay |
|
|
Telecopier No.: |
416-979-1234 |
- 50 -
Any notice or other communication given in accordance with this
section, if delivered by hand as aforesaid shall be deemed to have been validly
and effectively given on the date of such delivery if such date is a Business
Day and such delivery is received before 4:00 pm at of the place of delivery;
otherwise, it shall be deemed to be validly and effectively given on the
Business Day next following the date of delivery. Any notice of communication
which is transmitted by facsimile transmission or electronic mail as aforesaid,
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was received
before 4:00 pm at the place of receipt; otherwise it shall be deemed to have
been validly and effectively given on the Business Day next following such date
of transmission.
The Parties shall jointly plan and co-ordinate, and shall cause
their respective Affiliates to jointly plan and coordinate, any public notices,
press releases, and any other publicity concerning this Agreement and the
transactions contemplated by this Agreement and neither Party or its Affiliates
shall act in this regard without reasonable prior consultation with the other
Party, unless such disclosure is required to meet timely disclosure obligations
of such Party or its Affiliates under Applicable Laws in circumstances where
prior consultation with the other Party is not practicable, and a copy of such
disclosure shall be provided to the other Party at such time as it is made
publicly available.
This Agreement may not be changed, amended or modified in any
manner, except pursuant to an instrument in writing signed on behalf of each of
the Parties.
This Agreement is for the sole benefit of the Parties and their
successors and permitted assigns and, except as expressly contemplated herein,
nothing herein is intended to or shall confer upon any other person any legal or
equitable right, benefit or remedy of any nature or kind whatsoever under or by
reason of this Agreement.
This Agreement and the Security Agreements together constitute
the entire agreement between the Parties with respect to the subject matter
hereof and cancel and supersede any prior understandings and agreements between
the Parties with respect thereto. There are no representations, warranties,
terms, conditions, opinions, advice, assertions of fact, matters, undertakings
or collateral agreements, express, implied or statutory, by or between the
Parties (or by any of their respective employees, directors, officers,
representatives or agents) other than as expressly set forth in this Agreement
or the Security Agreements.
- 51 -
14.13 |
Debt Sharing
Confirmations |
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(a) |
The Purchasers hereby agree, for the benefit of all
holders of each other existing and future Series of Priority Lien Debt and
each existing and future Priority Debt Representative, that all Priority
Lien Obligations will be and are secured equally and ratably by all Liens
(as defined in the Collateral Trust Agreement) at any time granted by
Banro or any Obligor (as defined in the Collateral Trust Agreement) to
secure the obligations in respect of the Priority Notes, whether or not
upon property otherwise constituting Collateral (as defined in the
Collateral Trust Agreement), that all such Liens will be enforceable by
the Collateral Agent for the benefit of all holders of Priority Lien
Obligations equally and ratably (except that the Priority Stream
Obligations (as defined in the Collateral Trust Agreement) shall be paid
in priority to the other Priority Lien Obligations in accordance with
Section 3.4(a) of the Collateral Trust Agreement), and that the Purchasers
are bound by the provisions in the Collateral Trust Agreement relating to
the order of application of proceeds from enforcement of such Liens, and
consent to and direct the Collateral Agent to perform its obligations
under the Collateral Trust Agreement. |
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(b) |
The Purchasers hereby agree, for the benefit of all
holders of each other existing and future Series of Parity Lien Debt and
each existing and future Parity Debt Representative, that all Parity Lien
Obligations will be and are secured equally and ratably by all Liens at
any time granted by Banro or any Obligor to secure the obligations in
respect of the Initial Parity Notes, whether or not upon property
otherwise constituting Collateral, that all such Liens will be enforceable
by the Collateral Agent for the benefit of all holders of Parity Lien
Obligations equally and ratably, and that the Purchasers are bound by the
provisions in the Collateral Trust Agreement relating to the order of
application of proceeds from enforcement of such Liens, and consent to and
direct the Collateral Agent to perform its obligations under the
Collateral Trust Agreement. |
Any waiver of, or consent to depart from, the requirements of
any provision of this Agreement shall be effective only if it is in writing and
signed by the Party giving it (except that the Agent may provide a waiver by and
on behalf of the Purchasers), and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
Party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No single or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
If any provision of this Agreement is determined by a court of
competent jurisdiction to be invalid, illegal or unenforceable in any respect,
all other provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
Party.
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(a) |
This Agreement shall enure for the benefit of and shall
be binding on and enforceable by the Parties and their respective
successors and permitted assigns. |
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(b) |
Each Purchaser shall be entitled at any time and from
time to time to Transfer any of its rights and obligations under this
Agreement without the consent of the Seller or Banro and, in connection
therewith may transfer a participating or other interest in this
Agreement. |
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(c) |
Except as provided in Section 8.3, none of the PSA
Entities shall assign, in whole or in part, any of its rights and
obligations under this Agreement or the Security Agreements without the
prior written consent of the Agent . In no event shall any rights or
obligations under this Agreement or the Security Agreements be assigned by
the PSA Entities other than together with a transfer of the Project to the
same assignee. |
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(d) |
This Agreement may not be assigned in whole or in part to
any Restricted Person. |
Each of the Parties agrees that, upon execution and delivery of
a joinder agreement in a form satisfactory to the Parties, acting reasonably,
another person shall, without any further action on the part of Parties other
than such person, automatically be added as a Party to this Agreement in the
manner contemplated by such joinder agreement.
This Agreement may be executed in one or more counterparts, and
by the Parties in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Agreement by telecopy or electronic scan shall be effective as delivery
of a manually executed counterpart of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY
LEFT BLANK]
IN WITNESS WHEREOF the Parties have executed this
Agreement as of the day and year first written above.
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NAMOYA GSA HOLDINGS |
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Per: |
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Name: |
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Title: |
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BANRO CORPORATION |
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Per: |
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Name: Richard Brissenden |
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Title: Chairman of the Board |
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NAMOYA MINING S.A. |
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Per: |
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Name: Desire Sangara |
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Title: Chairman of the Board |
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Any other Purchaser when joined
hereto in |
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accordance with the terms hereof.
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Signature Page to Namoya Gold Purchase and Sale Agreement
SCHEDULE A
DESCRIPTION OF SELLERS PROPERTIES
(WITH MAP)
This is Schedule A to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. Dated as
of February 27, 2015
[Redacted]
SCHEDULE B
SECURITY
AGREEMENTS
This is Schedule B to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. Dated as
of February 27, 2015
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Joinder and sharing confirmations as a Priority Lien and recognizing
priority of Payable Gold obligations |
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Joinder and sharing confirmation as a Parity Lien
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Guarantees contemplated by Section 9.2(b) |
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Assignment, Subordination and Postponement of Claims contemplated by
Section 9.2(c) |
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Pledge of accounts with Auramet International LLC, if any |
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Pledge of accounts with any Processor
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SCHEDULE C
INTERCREDITOR
PRINCIPLES
This is Schedule C to the Gold
Purchase and Sale Agreement between Namoya GSA Holdings, Banro Corporation and
Namoya Mining S.A. Dated as of February 27, 2015
[Redacted]
SCHEDULE D
BANRO AND SELLER REPRESENTATIONS AND
WARRANTIES
This is Schedule D to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. dated as
of February 27, 2015
Each of Banro, on behalf of and in respect of itself and each
PSA Entity, and the Seller hereby represents and warrants to the Purchasers as
follows:
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(a) |
it is a company validly existing and in good standing
under the laws of its jurisdiction of incorporation and is up to date in
respect of all filings required by law to maintain its existence, and it
is qualified or licensed to do business in each jurisdiction in which the
nature of its business or the nature and location of its assets requires
such qualification or licensing except where such failure to be qualified
or licensed would not reasonably be expected to have a Material Adverse
Effect; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and the
Security Agreements to which it is a party and performing its obligations
hereunder and thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to own and lease its assets and carry on its business and to
enter into this Agreement and the Security Agreements to which it is a
party and to perform its obligations hereunder and thereunder; |
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(d) |
this Agreement and the Security Agreements to which it is
a party and the exercise of its rights and performance of its obligations
hereunder and thereunder do not and will not, (i) conflict with, violate,
result in a breach of, or constitute a default or an event creating rights
of acceleration, termination, modification or cancellation or a loss of
rights under (with or without the giving notice or lapse of time or both),
any written or oral contract, agreement, license, concession, indenture,
mortgage, debenture, bond, note or other instrument to which it is a
party, subject or otherwise bound (including with respect to its assets),
in each case other than such a conflict, violation, breach, default or
event that would not reasonably be expected to have a Material Adverse
Effect, (ii) conflict with or violate its constating or constitutive
documents, (iii) conflict with or violate any Applicable Laws, or (iv)
except as contemplated by this Agreement or the Security Agreements,
result in, or require, the creation or imposition of any Encumbrance upon
or with respect to any of its assets or properties; |
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(e) |
the issued capital of the Seller consists of 1,000,000
shares, all of which are outstanding as fully paid and non- assessable
shares in the capital of the Seller and are beneficially owned as to 100%
by Namoya (Barbados) Limited; |
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(f) |
the authorized share capital of Namoya (Barbados) Limited
consists of an unlimited number of common shares and 20,000 preferred
shares, of which, as of the date hereof, (i) only 1,200,000 common shares
are issued and outstanding as fully paid and non- assessable shares in the
capital of Namoya (Barbados) Limited and are legally and beneficially
owned as to 100% by Banro Group (Barbados) Limited, and (ii) only 20,000
preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Namoya (Barbados) Limited and are
legally and beneficially owned as to 100% by investment funds managed by
Gramercy Funds Management LLC; |
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(g) |
the authorized share capital of Banro Group (Barbados)
Limited consists of an unlimited number of common shares and an unlimited
number of preferred shares, of which, as of the date hereof, (i) only
5,000,100 common shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by Banro, and (ii) only
1,200,000 preferred shares are issued and outstanding as fully paid and
non-assessable shares in the capital of Banro Group (Barbados) Limited and
are legally and beneficially owned as to 100% by BlackRock World Mining
Trust plc; |
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(h) |
other than the consents listed in Section 3.3 and the
subordination provisions of the Security Agreements being satisfactory to
the Purchaser, no notices, filings or Approvals are required to be made or
obtained by it in connection with the execution and delivery or the
performance by it of this Agreement or the Security Agreements to which it
is a party or the transactions contemplated hereby and thereby other than
those Approvals that are not necessary on the date this representation and
warranty is given and are expected to be obtained in the ordinary course
of business by the time they are necessary and such Approvals the failure
of which to have or obtain, will not have a Material Adverse
Effect; |
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(i) |
each of this Agreement and the Security Agreements to
which it is a party has been duly and validly executed and delivered by it
and constitutes a legal, valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforcement
may be affected by Applicable Laws relating to bankruptcy, reorganization,
insolvency and creditors rights and by the availability of injunctive
relief, specific performance and other equitable remedies; |
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(j) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it, and it
will not suffer any Insolvency Event in connection with the execution and
delivery or the performance by it of this Agreement or the Security
Agreements to which it is a party or the transactions contemplated hereby
and thereby; |
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(k) |
except for Auramet International LLC (and its Affiliates)
and the security interests permitted under the Note Indenture, no person
has any agreement, option or right of first refusal to acquire, or right,
title or interest in or to, or right capable of becoming an agreement,
option or right of first refusal to acquire, or right, title or interest
in or to, the Namoya Project, the Properties, the Project Assets or the
gold produced from the Properties; |
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(l) |
it has paid when due and payable all mining patents,
fees, Taxes or other amounts required to maintain in good standing and
renew, as applicable, all mining claims, rights, concessions and interests
necessary for the operation of the Namoya Project, the Properties and all
other properties of the Banro Group Entities (and will deliver to the
Purchaser on or prior to the Closing Date a schedule of renewal dates
related thereto), and all other actions and all other obligations as are
required to maintain the Namoya Project, the Properties and all other
properties of the Banro Group Entities have been taken and complied with
in all material respects; |
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(m) |
it has obtained or been issued all material Approvals
(including environmental approvals and surface and access rights)
necessary for the operation of the Namoya Project, the Properties and all
other properties of the Banro Group Entities, other than those that are
not necessary on the date this representation and warranty is given and
are expected to be obtained in the ordinary course of business by the time
they are necessary, where the failure to have or obtain such Approvals
would not reasonably be expected to have a Material Adverse Effect, and
there are no facts or circumstances that might reasonably be expected to
adversely affect the issuance or obtaining of any such material
Approvals; |
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(n) |
the mineral claims referred to in Schedule A and the
mining convention with the government of the Democratic Republic of the
Congo constitute all of the rights that comprise its interest in the
Properties as of the date of this Agreement and it is the registered,
recorded and/or beneficial owner, as applicable, of the interest in and to
the Properties set forth in Schedule A, free and clear of all
Encumbrances, except Prior Ranking Permitted Encumbrances or as would not
have a Material Adverse Effect or materially affect the security interest
of the Purchaser under any Security Agreement or other security document,
and the Properties constitute all of the real property, mining rights,
tenement, concessions and other interests, whether created privately or
through the actions of any Governmental Authority having jurisdiction that
comprise the interest of Banro and the Seller in the Namoya Project, the
Properties and the Project Assets; |
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(o) |
to its knowledge, its right, title and interest in and to
the Properties is not subject to any adverse claim, except as would not
reasonably be expected to have a Material Adverse Effect or materially
affect the security interest of the Purchaser under any Security Agreement
or other security document; |
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(p) |
the map included in Schedule A depicts the location of
the Namoya Project with reasonable accuracy; |
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(q) |
subject only to the rights of any Governmental Authority
having jurisdiction, no person is entitled to or has been granted any
royalty or other payment in the nature of rent or royalty on any Produced
Gold; |
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(r) |
it has not received any notice of any expropriation
proceeding or decision to expropriate all or any part of the Namoya
Project, and to its knowledge there is no expropriation proceeding pending
or threatened against or affecting all or any part of the Namoya Project
or of any discussions or negotiations which could reasonably be expected
to lead to any such expropriation proceeding; |
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(s) |
it and each other Banro Group Entity and the conditions
on and relating to the Namoya Project, the Properties and the Project
Assets and all other properties of the Banro Group Entities respecting all
past and current operations conducted thereon by it are and have been in
material compliance with Applicable Laws (including, the Corruption of
Foreign Public Officials Act (Canada) and the |
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Bribery Act (United Kingdom)). Without limiting
the generality of the foregoing, each Banro Group Entity is in material
compliance with all applicable Environmental Laws, and there are no
actions, suits, claims, notices of violation, hearings, investigations or
proceedings pending or, to the best of its knowledge, threatened against
or affecting any Banro Group Entity with respect to the ownership, use,
maintenance and operation of any of the Namoya Project, the Properties and
the Project Assets relating to any applicable Environmental Laws, where
any adverse determination with respect thereto or liability imposed
therein could reasonably be expected to result in a Material Adverse
Effect and such adverse determination is reasonably anticipated; |
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(t) |
there is no action, suit, proceeding, investigation or
claim affecting or pertaining to the Namoya Project or any part thereof
and, to its knowledge, no such action, suit, proceeding, investigation or
claim is threatened or outstanding; |
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(u) |
neither it nor the Namoya Project is subject to any
outstanding judgment, order, writ, injunction or decree that has or would
reasonably be expected to have a Material Adverse Effect; |
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(v) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other person; |
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(w) |
except for Prior Ranking Permitted Encumbrances, it has
not granted, nor agreed to grant, an Encumbrance (secured or unsecured)
affecting the PSA Collateral, or any part thereof, to any person other
than to the Purchaser; |
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(x) |
as of the date of execution of this Agreement, Banro has
duly filed all material documents and information required to be filed by
it under applicable securities legislation of the provinces and
territories of Canada, or any rules, regulations or published policies
promulgated thereunder (the Securities Laws) or with the Toronto
Stock Exchange (all such documents filed prior to the date of execution of
this Agreement, the Public Disclosure Documents) since January 1,
2013. As of the effective date of such Public Disclosure Documents, to its
knowledge, none of the Public Disclosure Documents contain any untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, it being
acknowledged that if there is any inconsistency between two or more
documents comprising the Public Disclosure Documents regard shall be had
to the last filed document. All of the Public Disclosure Documents, as of
their respective effective dates (and as of the effective dates of any
amendments thereto), complied as to both form and content in all material
respects with the requirements of applicable Securities Laws or were
amended on a timely basis to correct deficiencies identified by securities
commissions or similar securities regulatory authorities. Banro has not
filed any confidential material change report with any securities
regulatory authority that at the date of execution of this Agreement
remains confidential. There is no material adverse change concerning Banro
which has not been disclosed in the Public Disclosure Documents filed on
or before the date of execution of this
Agreement; |
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(y) |
all annual and interim consolidated financial statements
of Banro filed on SEDAR since January 1, 2013 are complete and correct and
fairly present, in all material respects, the financial condition and
results of operations of the Banro Group Entities as at the times and for
the periods covered by such statements, in each case in accordance with
generally accepted accounting principles, subject, in the case of any
unaudited financial statements, to normal year-end adjustments and any
absence of notes. All financial projections and forecasts delivered to the
Purchaser represent Banros reasonable estimates and assumptions as to
future performance, which Banro believes to be fair and reasonable as of
the time made in the light of current and reasonably foreseeable business
conditions; |
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(z) |
no event has occurred or circumstance exists that (with
or without the giving of notice or lapse of time or both) has contravened,
conflicted with or resulted in, or may contravene, conflict with or result
in, a violation or breach of, or give any it or any other person the right
to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any
contract, lease, license, concession, Approval, agreement, indenture,
mortgage, debenture, note, instrument, or Order to which it is a party or
by which it or its properties and assets may be bound, and, to its
knowledge, each other person that is party thereto is in compliance in all
material respects with the terms and requirements thereof, in each case,
except as would not reasonably be expected to have a Material Adverse
Effect; |
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(aa) |
the corporate structure of Banro included in Banros
annual information form dated March 29, 2014 sets forth the relationship
between Banro and its material subsidiaries and the percentage of voting
securities of such subsidiaries beneficially owned, or controlled or
directed, directly or indirectly, by Banro. The Seller has no subsidiaries
or any other equity interest in any person. No Banro Group Entity is
engaged in any joint purchasing arrangement, joint venture, partnership or
other joint enterprise with any other person with respect to the
Properties or the Namoya Project; |
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(bb) |
no Banro Group Entity has any material liabilities or
obligations of any nature whatsoever, whether direct or indirect, matured
or unmatured, known or unknown, fixed, absolute, accrued, contingent or
otherwise, that are not reflected in the consolidated financial statements
referred to in the first sentence of paragraph (y) above or in the notes
thereto, other than (i) liabilities or obligations arising in the ordinary
course of business since September 30, 2014 or publicly announced by
Banro, or obligations to Auramet International LLC pursuant to the gold
sale arrangements with Auramet International
LLC; |
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(cc) |
(i) each Banro Group Entity has filed or caused to be
filed on a timely basis all national, federal, state, provincial, other
applicable jurisdictional and material local tax returns that were
required to be filed by or with respect to it pursuant to Applicable Laws,
(ii) all tax returns filed by such Banro Group Entity are complete and
correct and comply with Applicable Laws in all material respects, (iii)
each Banro Group Entity has paid, or made provisions for the payment of,
all material Taxes that have been or could have become due for all periods
covered by any tax return or otherwise, (iv) each Banro Group Entity has
withheld or collected and paid to the proper Governmental Authority or
other person all material Taxes required to be withheld, collected or paid
by it, (v) no claim has been made by any Governmental Authority in a
jurisdiction where any Banro Group Entity does not file tax returns that
such Banro Group Entity is or could be subject to taxation by that
jurisdiction, (vi) to its knowledge, no tax return of any Banro Group
Entity is under audit by any Governmental Body, and (vii) no proceedings
are pending or, to its knowledge and the knowledge of each Banro Group
Entity, threatened by or before any Governmental Body with respect to
material Taxes of any Banro Group Entity; |
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(dd) |
its properties, assets and operations are insured with
reputable insurance companies (not Affiliates of any Banro Group Entity),
in such amounts, with such deductibles and covering such risks as is
customarily carried by companies engaged in similar businesses and owning
similar properties in the localities where the applicable Banro Group
Entity operates; |
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(ee) |
the chief executive office and principal place of
business of it is as disclosed in writing by Banro to the Purchaser, and
the material books and records of it are located at its chief executive
office, and the only other offices and/or locations where it keeps the
collateral as may be set forth in the Security Agreements (except for
inventory which is in transit) or conducts any of its business is as
disclosed in writing by Banro to the Purchaser; |
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(ff) |
there is no strike, lock- out or other work stoppage or
labour dispute occurring or, to its knowledge, threatened that would have
a Material Adverse Effect; |
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(gg) |
except as disclosed in writing by Banro to the Purchaser,
no Banro Group Entity or any of its Affiliates sponsors, maintains or
contributes to, or at any time during the last six years has sponsored,
maintained or contributed to (or been obligated to sponsor, maintain or
contribute to) any Employee Benefit Plan (as defined below) that is (or
was) subject to the laws of the United States of America. Each Employee
Benefit Plan mandated by a Governmental Authority (other than the United
States of America or a constituent state thereof) or subject to the laws
of a jurisdiction outside of the United States of America (Foreign
Company Plan) that is intended to qualify for special tax treatment
meets all of the requirements for such treatment and has obtained all
necessary approvals of all relevant Governmental Authorities. No Foreign
Company Plan has any unfunded liabilities, determined in accordance with
generally accepted accounting principles, that have not been fully accrued
on Banros financial statements or that will not be fully offset by
insurance. All Foreign Company Plans are registered where required by, and
are in good standing under, all Applicable Laws. For purposes of this
paragraph, Employee Benefit Plan means any employee benefit plan,
program, policy or arrangement sponsored, maintained or contributed to by
a Banro Group Entity or any of their respective Affiliates or with respect
to which the Seller, any Banro Group Entity or any of their respective
Affiliates has any liability or obligation; |
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(hh) |
it and each other Banro Group Entity owns, licenses or
otherwise has the right to use all material licenses, Approvals, patents,
patent applications, trademarks, trademark applications, service marks,
trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary
for the operation of its business, without infringement upon or conflict
with the rights of any other person with respect thereto. No slogan or
other advertising device, product, process, method, substance, part or
other material now employed, or now contemplated to be employed, by any
Banro Group Entity infringes upon or conflicts with any rights owned by
any other person. No claim or litigation regarding any of the foregoing is
pending or, to its knowledge, threatened; |
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(ii) |
the most recent estimated measured, indicated and
inferred mineral resources and proven and probable mineral reserves, if
any, and technical reports disclosed in the Public Disclosure Documents
pertaining to the Namoya Project, the Properties, the Project Assets and
all other properties of the Banro Group Entities have been prepared and
disclosed in accordance with accepted mining industry practices and in
accordance with the requirements prescribed by NI 43-101 and the companion
policy thereto (as in effect on the date of publication of the relevant
report or information); it has no knowledge that the mineral resources or
mineral reserves (or any other material aspect of any technical reports)
as disclosed in the Public Disclosure Documents are inaccurate in any
material respect; there are no outstanding unresolved comments of any
securities commission or other securities regulatory authority in each
province and territory of Canada in which Banro is a reporting issuer in
respect of the NI 43-101 technical disclosure made in Public Disclosure
Documents; and, to its knowledge, there has been no material reduction in
the aggregate amount of estimated mineral resources and reserves, if any,
of the Banro Group Entities, from the amounts last disclosed in the Public
Disclosure Documents; |
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(jj) |
neither it nor any other Banro Group Entity has employed
any broker or finder or incurred any liability for any brokerage fee,
commission, finders fee or any other similar payment in connection with
the transactions contemplated by this Agreement that could give rise to
any claim against the Purchaser for brokerage fees, commissions, finders
fees or any other similar payments; and |
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(kk) |
all materials and information made available to the
Purchaser prior to the date of this Agreement have been prepared in good
faith and are true and correct in all material respects as at the date of
such material and such materials do not omit any material information
reasonably necessary to make all such material not
misleading. |
SCHEDULE E
PURCHASER REPRESENTATIONS AND
WARRANTIES
This is Schedule E to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. dated as
of February 27, 2015
Each Purchaser hereby represents and warrants to Banro and the
Seller as follows:
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(a) |
it is a company duly incorporated and validly existing
under the laws of its jurisdiction and is up to date in respect of all
filings required by law; |
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(b) |
all requisite corporate acts and proceedings have been
done and taken by it, including obtaining all requisite board of
directors approvals, with respect to entering into this Agreement and
performing its obligations hereunder thereunder; |
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(c) |
it has the requisite corporate power, capacity and
authority to enter into this Agreement and to perform its obligations
hereunder; |
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(d) |
this Agreement and the exercise of its rights and
performance of its obligations hereunder do not and will not (i) conflict
with or result in a default under any agreement, mortgage, bond or other
instrument to which it is a party or which is binding on its assets, (ii)
conflict with its constating or constitutive documents, or (iii) conflict
with or violate any Applicable Laws, in each case other than a conflict,
default or violation that would not reasonably be expected to have a
material adverse effect on the Purchaser or the performance of its
obligations under this Agreement; |
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(e) |
no Approvals are required to be obtained by it in
connection with the execution and delivery or the performance by it of
this Agreement or the transactions contemplated hereby; |
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(f) |
this Agreement has been duly and validly executed and
delivered by it and constitutes a legal, valid and binding obligation of
it, enforceable against it in accordance with its terms; |
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(g) |
it has not suffered an Insolvency Event and it is not now
aware of any circumstance which, with notice or the passage of time, or
both, would give rise to an Insolvency Event with respect to it;
and |
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(h) |
it enters into and performs this Agreement on its own
account and not as trustee or a nominee of any other
person. |
SCHEDULE F
DISPUTE
RESOLUTION
This is Schedule F to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A. dated as
of February 27, 2015
The following rules and procedures shall apply with respect to
any matter to be arbitrated by the Parties under the terms of this Agreement. A
reference to Party means the Agent on behalf of the Purchasers on the one hand
and any PSA Entity on the other hand.
1. |
Initiation of Arbitration
Proceedings |
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(a) |
If either Party wishes to have any matter under this
Agreement arbitrated in accordance with the provisions of this Agreement,
it shall give notice to the other Party specifying particulars of the
matter or matters in dispute and proposing the name of the person it
wishes to be the single arbitrator. Within five days after receipt of such
notice, the other Party shall give notice to the first Party advising
whether such Party accepts the arbitrator proposed by the first Party. If
such notice is not given within such five day period, the other Party
shall be deemed to have accepted the arbitrator proposed by the first
Party. If the Parties do not agree upon a single arbitrator within such
five day period such arbitrator shall be chosen by ADR Chambers Inc.,
Toronto, Ontario at the written request of either Party. |
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(b) |
The individual selected as Arbitrator shall be qualified
by education and experience to decide the matter in dispute. The
Arbitrator shall be at arms length from both Parties and shall not be a
member of the audit or legal firm or firms who advise either Party or a
person who is otherwise regularly retained by either of the
Parties. |
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(c) |
The costs charged by the Arbitrator selected shall be
shared equally by the parties to the Arbitration on an interim basis
subject to a final allocation of the costs of the Arbitration by the
Arbitrator. |
2. |
Submission of Written Statements |
Within 20 days of the appointment of the Arbitrator, the Party
initiating the arbitration (the Claimant) shall send the other Party
(the Respondent) a statement of claim setting out in sufficient detail
the facts and any contentions of law on which it relies, and the relief that it
claims.
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(a) |
Within 15 days of the receipt of the statement of claim,
the Respondent shall send the Claimant a statement of defence stating in
sufficient detail which of the facts and contentions of law in the
statement of claim it admits or denies, on what grounds, and on what other
facts and contentions of law it relies. |
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(b) |
Within ten days of receipt of the statement of defence,
the Claimant may send the Respondent a statement of
reply. |
- 2 -
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(c) |
All statements of claim, defence and reply shall be
accompanied by copies (or, if they are especially voluminous, lists) of
all essential documents on which the Party concerned relies and which have
not previously been submitted by any Party, and (where practicable) by any
relevant samples. |
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(d) |
After submission of all the statements, the Arbitrator
will give directions for the further conduct of the arbitration including,
but not limited to, the scope of production of documents, the number of
fact and expert witnesses to participate in the arbitration, the manner in
which written or oral evidence and argument will be presented at the
hearing and the length of the arbitration
hearing. |
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(a) |
The arbitration shall take place in Toronto, Ontario or
in such other place as the Claimant and the Respondent shall agree upon in
writing. The arbitration shall be conducted in English unless otherwise
agreed by such Parties and the Arbitrator. Subject to any adjournments
which the Arbitrator allows, the final hearing will be continued on
successive working days until it is concluded. |
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(b) |
All meetings and hearings will be in private unless the
Parties otherwise agree. |
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(c) |
Any Party may be represented at any meetings or hearings
by legal counsel. |
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(a) |
The Arbitrator will make a decision in writing and,
unless the Parties otherwise agree, will set out reasons for decision in
the decision. |
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(b) |
The Arbitrator will send the decision to the Parties as
soon as practicable after the conclusion of the final hearing, but in any
event no later than 60 days thereafter, unless that time period is
extended for a fixed period by the Arbitrator on written notice to each
Party because of illness or other cause beyond the Arbitrators
control. |
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(c) |
The Arbitrator shall determine liability for costs and
may apportion costs between the Parties. Costs include the fees of the
Arbitrator, legal costs and other expenses reasonably incurred in relation
to the Arbitration. |
5. |
Jurisdiction and Powers of the
Arbitrator |
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(a) |
By submitting to arbitration under these Rules, the
Parties shall be taken to have conferred on the Arbitrator the following
jurisdiction and powers, to be exercised at the Arbitrators discretion
subject only to these Rules and the relevant law with the object of
ensuring the just, expeditious, economical and final determination of the
dispute referred to arbitration. |
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(b) |
Without limiting the jurisdiction of the Arbitrator at
law, the Parties agree that the Arbitrator shall have jurisdiction
to: |
- 3 -
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(i) |
determine any question of law arising in the
arbitration; |
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(ii) |
determine any question as to the Arbitrators
jurisdiction; |
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(iii) |
determine any question of good faith, dishonesty or fraud
arising in the dispute; |
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(iv) |
order any Party to furnish further details of that
Partys case, in fact or in law; |
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(v) |
proceed in the arbitration notwithstanding the failure or
refusal of any Party to comply with these Rules or with the Arbitrators
orders or directions, or to attend any meeting or hearing, but only after
giving that Party written notice that the Arbitrator intends to do
so; |
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(vi) |
receive and take into account such written or oral
evidence tendered by the Parties as the Arbitrator determines is relevant,
whether or not strictly admissible in law; |
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(vii) |
make one or more interim awards including any directions
as to procedure to be followed on the arbitration; |
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(viii) |
hold meetings and hearings, and make a decision
(including a final decision) in Toronto, Ontario or elsewhere with the
concurrence of the Parties thereto; |
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(ix) |
order the Parties to produce to the Arbitrator, and to
each other for inspection, and to supply copies of, any documents or other
evidence or classes of documents in their possession or power which the
Arbitrator determines to be relevant; and |
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(x) |
make interim orders to secure all or part of any amount
in dispute in the arbitration. |
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(a) |
The arbitration, including any settlement discussions
between the parties related to the subject matter of the arbitration shall
be conducted on a private and confidential basis and any and all
information exchanged and disclosed during the course of the arbitration
shall be used only for the purposes of the arbitration and any appeal
therefrom pursuant to 4(d) above. Neither party shall communicate any
information obtained or disclosed during the course of the arbitration to
any third party except to those experts or consultants employed or
retained by, or consulted about retention on behalf of, such party in
connection with the arbitration and solely to the extent necessary for
assisting in the arbitration, and only after such persons have agreed to
be bound by these confidentiality conditions. In the event that disclosure
of any information related to the arbitration is required to comply with
Applicable Law or court order, the disclosing party shall promptly notify
the other party of such disclosure, shall limit such disclosure limited to
only that information so required to be disclosed and shall have availed
itself of the full benefits of any laws, rules, regulations or contractual
rights as to disclosure on a confidential basis to which it may be
entitled. |
- 4 -
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(b) |
The award of the Arbitrator and any reasons for the
decision of the Arbitrator shall also be kept confidential except (i) as
may reasonably be necessary to obtain enforcement thereof; (ii) for either
party to comply with its disclosure obligations under Applicable Law;
(iii) to permit the parties to exercise properly their rights under the
Arbitration Rules; and (iv) to the extent that disclosure is required to
allow the parties to consult with their professional
advisors. |
SCHEDULE G
AGENT
This is Schedule G to the Gold Purchase and Sale Agreement
between Namoya GSA Holdings, Banro Corporation and Namoya Mining S.A., dated as
of February 27, 2015
[Redacted]
SCHEDULE B
AMENDMENTS / SUPPLEMENTAL INDENTURE
THIS FIRST AMENDING AGREEMENT TO INDENTURE made as of the day of ,
2015. |
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BETWEEN: |
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BANRO CORPORATION, a corporation continued under the
laws of the |
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Canada, having an office in Toronto, Ontario |
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(the Company) |
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OF THE FIRST PART |
- and - |
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BANRO CONGO MINING S.A., KAMITUGA MINING S.A.,
LUGUSHWA |
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MINING S.A., NAMOYA MINING S.A., and TWANGIZA
MINING S.A. |
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(collectively, the DRC Guarantors) |
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OF THE SECOND PART |
- and - |
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BANRO GROUP (BARBADOS) LIMITED, BANRO CONGO |
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(BARBADOS) LIMITED, KAMITUGA (BARBADOS) LIMITED, |
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LUGUSHWA (BARBADOS) LIMITED, NAMOYA (BARBADOS) |
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LIMITED and TWANGIZA (BARBADOS) LIMITED |
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(collectively, the Barbados Guarantors) |
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OF THE THIRD PART |
- and - |
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EQUITY FINANCIAL TRUST COMPANY, a trust company
continued |
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under the laws of Canada and registered to carry business in
the |
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Province of Ontario |
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(the Trustee) |
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OF THE FOURTH PART
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WHEREAS:
A. |
Each of the Company, the DRC Guarantors and the Trustee
has heretofore executed and delivered to the Trustee an indenture dated as
of March 2, 2012 (as amended, restated and supplemented from time to time,
the "Note Indenture") providing for the issuance of an unlimited
aggregate principal amount of 10% Senior Secured Notes due 2017 (the
"Notes"); |
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B. |
By Supplemental Note Indenture dated as of April 23,
2013, each Barbados Guarantor agreed be a Guarantor under the Note
Indenture and to be bound by the terms of the Note Indenture applicable to
Guarantors, including Article 10 thereof; |
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C. |
Section 4.09 of the Note Indenture provides for certain
negative covenants relating to limitations on
Indebtedness; |
D. |
T he Company, the Guarantors and the Trustee wish to
amend the Note Indenture to, among other things, revise the scope of such
negative covenants; and |
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E. |
Section 9.02(a) of the Note Indenture provides that the
Company, the Guarantors and the Trustee may amend or supplement the
Indenture Documents with the consent of the Holders of a majority in
principal amount of the Notes then outstanding voting as a single class,
which consent has been obtained; |
NOW THEREFORE, this First Amending Agreement witnesseth
and it is hereby agreed and declared as follows:
Except as otherwise provided for herein, all capitalized terms
and expressions used in this Amending Agreement shall have the meanings ascribed
to them in the Note Indenture.
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a. |
The following are added as additional definitions in
Section 1.01 of the Note Indenture: |
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'Deposit Balance Amount means the principal amount of
any Indebtedness, which amount shall not exceed $60,000,000 less the
Deposit (as defined in the Namoya Streaming Agreement) and which amount
shall be outstanding for a period not to exceed three years from the date
hereof; |
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Forward Sale/Streaming Agreements means the Namoya
Streaming Agreement, the Twangiza Forward Agreement - 1 and the Twangiza
Forward Agreement - 2; |
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Forward Sale/Streaming Facilities means the
transactions described in the Forward Sale/Streaming
Agreements; |
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Namoya Payable Gold has the meaning ascribed to
Payable Gold in the Namoya Streaming Agreement; |
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Namoya Purchaser has the meaning ascribed to
Purchaser in the Namoya Streaming Agreement; |
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"Namoya Streaming Agreement" means the Gold Streaming
Agreement dated February 27, 2015 among Namoya GSA Holdings, the Company
and Namoya Mining S.A. (as amended or restated from time to
time); |
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"Namoya Streaming Obligations" means the liabilities and
obligations of the Company and certain of the Restricted Subsidiaries
under or in connection with the Namoya Streaming Agreement; |
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"Namoya Streaming Secured Obligations" means the Deposit
(as defined in the Namoya Streaming Agreement as in effect as of the date
hereof), which amount shall be reduced pursuant to the formula set out in
Section 9.2(a) of the Namoya Streaming Agreement as of the date
hereof; |
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Priority Stream Obligations means the obligation to,
without duplication, deliver the Namoya Payable Gold, including any Namoya
Payable Gold which, pursuant to the terms of the Namoya Streaming
Agreement, should have been delivered to or for the benefit of the Namoya
Purchaser but which was not delivered or which was used for another
purpose in contravention of the Namoya Streaming Agreement but excluding,
for greater certainty, any future obligation to deliver the Namoya Payable
Gold, which shall continue as part of the Namoya Streaming Obligations
only; |
- 2 -
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"Twangiza Forward Agreement - 1" means the Gold
Purchase and Sale Agreement dated February 27, 2015 among Twangiza GFSA
Holdings, the Company and Twangiza Mining S.A. (as amended or restated
from time to time); |
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"Twangiza Forward Agreement - 2" means the Gold
Purchase and Sale Agreement dated February 27, 2015 among Twangiza GFSA
Holdings, the Company and Twangiza Mining S.A. (as amended or restated
from time to time); |
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"Twangiza Forward Obligations - 1" means the
liabilities and obligations of the Company and certain of the Restricted
Subsidiaries under or in connection with the Twangiza Forward Agreement
1, referred to therein as the PSA Obligations; |
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"Twangiza Forward Secured Obligations - 1"
means $20,000,000 (being the Prepayment Amount in the Twangiza Forward
Agreement 1), which amount shall be reduced by $555,556 on the date of
delivery of each Scheduled Monthly Quantity (as defined in the Twangiza
Forward Agreement 1 as in effect as of the date hereof) of gold, which
secured obligations are referred to in the Twangiza Forward Agreement 1
as the Secured Amount; |
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"Twangiza Forward Obligations - 2" means the
liabilities and obligations of the Company and certain of the Restricted
Subsidiaries under or in connection with the Twangiza Forward Agreement
2, referred to therein as the PSA Obligations; |
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"Twangiza Forward Secured Obligations - 2"
means $20,000,000 (being the Prepayment Amount in the Twangiza Forward
Agreement 2), which amount shall be reduced by $555,556 on the date of
delivery of each Scheduled Monthly Quantity (as defined in the Twangiza
Forward Agreement 2 as in effect as of the date hereof) of gold, which
secured obligations are referred to in the Twangiza Forward Agreement 2
as the Secured Amount; |
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"Twangiza Forward Obligations" means,
collectively, the Twangiza Forward Obligations - 1 and the Twangiza
Forward Obligations - 2;" |
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"Twangiza Forward Secured Obligations" means,
collectively, the Twangiza Forward Secured Obligations - 1 and the
Twangiza Forward Secured Obligations - 2;" |
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Confirmation that Namoya Streaming Obligations and
Twangiza Forward Obligations permitted under the Note Indenture
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b. |
The following is added to the definition of
"Indebtedness" in Section 1.01 of the Note Indenture as new paragraph (11)
thereof: |
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"(11) the Namoya Streaming Obligations and the Twangiza
Forward Obligations." |
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c. |
The following is added to the definition of "Asset
Disposition" in Section 1.01 of the Note Indenture as new paragraph (19)
thereof: "(19) the Forward Sale/Streaming
Facilities." |
- 3 -
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d. |
Subsection (2)(a) of the definition of "Parity Lien Debt"
in Section 1.01 of the Note Indenture is deleted in its entirety and
replaced with the following: |
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"such Indebtedness is designated by the Company, in an
Officers Certificate delivered to each Parity Debt Representative and the
Collateral Agent, as Parity Lien Debt for the purposes of the Secured
Debt Documents; provided that no Obligation or Indebtedness may be
designated as both Parity Lien Debt and Priority Lien Debt, except for the
Namoya Streaming Obligations;" |
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e. |
Subsection (1) of the definition of "Priority Lien Debt"
in Section 1.01 of the Note Indenture is deleted in its entirety and
replaced with the following: |
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"such Indebtedness is designated by the Company, in an
Officers Certificate delivered to each Priority Debt Representative and
the Collateral Agent, as Priority Lien Debt for the purposes of the
Secured Debt Documents; provided that no Obligation or Indebtedness may be
designated as both Parity Lien Debt and Priority Lien Debt, except for the
Namoya Streaming Obligations;" |
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f. |
The following is added to Section 4.09(b) of the Note
Indenture as new paragraph (20) thereof: |
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"(20) the Namoya Streaming Obligations and the Twangiza
Forward Obligations." |
Priority Liens to include Priority Stream Obligations and
Twangiza Forward Secured Obligations
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g. |
Section 4.09(b)(1) is deleted and the following
substituted therefor: |
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"(1) |
Indebtedness of the Company or any of its Restricted
Subsidiaries pursuant to Debt Facilities or Forward Sale/Streaming
Facilities in an aggregate amount of: |
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(A) |
the Priority Stream Obligations, and |
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(B) |
an amount not to exceed the greater
of: |
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(i) |
the greater of (1) $20,000,000 and (2) 5% of Total
Assets, and |
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(ii) |
the aggregate of (1) $15,000,000 and (2) the Twangiza
Forward Secured Obligations." |
Parity Liens to include Namoya Streaming Secured
Obligations
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h. |
Section 4.09(b)(19) is deleted and the following
substituted therefor: |
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"(19) in |
addition to the items referred to in clauses
(1) through (18) above and (20) below, Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate amount which, when taken together
with the amount of all other Indebtedness Incurred pursuant to this clause
(19) and then outstanding, shall not exceed the greater of:
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(A) |
the greater of (i) $5.0 million and (ii) 1% of Total
Assets, and |
- 4 -
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(B) |
the aggregate of (i) the Namoya Streaming
Secured Obligations, excluding the amount of any Priority Stream
Obligation that is included in Section 4.09(b)(1), and (ii) the Deposit
Balance Amount, at anytime outstanding. |
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Confirmation of Priority of Namoya Payable Gold as a
Pre-paid Purchase Obligation |
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i. |
The definition of Priority Debt Sharing Confirmation is
deleted in its entirety and replaced with the following: |
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Priority Debt Sharing Confirmation means, as to any
Series of Priority Lien Debt, the written agreement of the holders of such
Series of Priority Lien Debt, as set forth in the credit agreement,
indenture or other agreement governing such Series of Priority Lien Debt,
for the benefit of all holders of each other existing and future Series of
Priority Lien Debt and each existing and future Priority Debt
Representative, that all Priority Lien Obligations will be and are secured
equally and ratably by all Liens at any time granted by the Borrower or
any other Obligor to secure any Obligations in respect of such Series of
Priority Lien Debt (except that the Priority Stream Obligations shall be
paid in priority to the other Priority Lien Obligations in accordance with
Section 3.4(a) of the Collateral Trust Agreement), whether or not upon
property otherwise constituting Collateral, that all such Liens will be
enforceable by the Collateral Agent for the benefit of all holders of
Priority Lien Obligations equally and ratably (except that the Priority
Stream Obligations shall be paid in priority to the other Priority Lien
Obligations in accordance with Section 3.4(a) of the Collateral Trust
Agreement), and that the holders of Obligations in respect of such Series
of Priority Lien Debt are bound by the provisions in the Collateral Trust
Agreement relating to the order of application of proceeds from
enforcement of such Liens, and consent to and direct the Collateral Agent
to perform its obligations under the Collateral Trust
Agreement. |
Permitting Certain Restrictions on Intercompany
Distributions
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j. |
The following is added at the end of Section
4.08(a): |
"where the effect of such consensual
encumbrance or consensual restriction is to cause the Company or any of its
Restricted Subsidiaries to not have sufficient funds to satisfy its obligations
hereunder or under any other Secured Debt Document.
Cross Defaults to Forward Sale/Streaming Agreements
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k. |
The following is added to Section 6.01 as new paragraph
(6.1) thereof: |
"(6.1) any Banro Event of Default
under any of the Forward Sale/Streaming Agreements (as defined therein) in
respect of which the grace period has expired;
3. |
Amendments to Priority Debt Sharing
Confirmations |
The parties hereto acknowledge and
agree that each Priority Debt Sharing Confirmation in the Indenture Documents or
entered into in connection with an Indenture Document, is hereby amended to
provide that the Priority Stream Obligations shall be paid in priority to the
other Priority Lien Obligations in accordance with Section 3.4(a) of the
Collateral Trust Agreement.
4. |
Amendments to Indenture Documents and Collateral
Documents |
The parties hereto acknowledge and
agree that all Indenture Documents and Collateral Documents are deemed to be
amended to the extent required to reflect the amendments set forth in this First
Amending Agreement.
- 5 -
The Company and the Trustee are hereby authorized and directed
to take all such further steps as are necessary to give effect to the amendments
as set forth in this First Amending Agreement.
6. |
Incorporation into Note
Indenture |
This First Amending Agreement shall be read and construed as if
forming a part of the Note Indenture and the Note Indenture shall be amended and
revised to the extent required to give effect to this First Amending
Agreement.
The Note Indenture, as amended by this First Amending
Agreement, is in all respects ratified and confirmed.
This First Amending Agreement shall be construed in accordance
with the laws of the Province of Ontario and shall be treated in all respects as
an Ontario contract. The parties hereby submit and attorn to the jurisdiction of
the courts of Ontario for all matters related to this First Amending
Agreement.
This First Amending Agreement may be executed in several
counterparts, each of which when so executed shall be deemed to be an original
and such counterparts together shall constitute one and the same instrument and
notwithstanding their date of execution they shall be deemed to be dated as of
the date hereof.
[signature page follows]
- 6 -
IN WITNESS WHEREOF the parties have executed this First
Amending Agreement as of the date first above written.
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BANRO CORPORATION |
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Per: |
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Name: |
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Title: |
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BANRO CONGO MINING S.A. |
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Per: |
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Name: |
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Title: |
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KAMITUGA MINING S.A. |
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Per: |
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Name: |
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Title: |
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LUGUSHWA MINING S.A. |
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Per: |
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ame: |
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Title: |
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NAMOYA MINING S.A. |
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Per: |
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Name: |
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Title: |
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TWANGIZA MINING S.A. |
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Per: |
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Name: |
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Title: |
(signature page to indenture amendment)
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BANRO GROUP
(BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
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BANRO CONGO
(BARBADOS) LIMITED |
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Per: |
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Name: |
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Title: |
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KAMITUGA (BARBADOS)
LIMITED |
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Per: |
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Name: |
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Title: |
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LUGUSHWA (BARBADOS)
LIMITED |
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Per: |
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Name: |
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Title: |
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NAMOYA (BARBADOS)
LIMITED |
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Per: |
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Name: |
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Title: |
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TWANGIZA (BARBADOS)
LIMITED |
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Per: |
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Name: |
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Title: |
(signature page to indenture amendment)
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EQUITY FINANCIAL
TRUST COMPANY |
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
(signature page to indenture amendment)
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THIS FIRST AMENDING AGREEMENT TO
COLLATERAL TRUST AGREEMENT |
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made as of the day of , 2015. |
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BETWEEN: |
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BANRO CORPORATION, a corporation continued under
the laws of the |
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Canada, having an office in Toronto, Ontario
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(the Company) |
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OF THE FIRST PART
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- and - |
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THE INITIAL GUARANTORS, as Initial
Guarantors |
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(collectively, the Initial Guarantors)
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OF THE SECOND PART
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- and - |
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EQUITY FINANCIAL TRUST COMPANY, a trust
company continued |
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under the laws of Canada and registered to carry business
in the |
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rovince of Ontario |
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(the Indenture Trustee) |
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OF THE THIRD
PART |
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- and - |
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EQUITY FINANCIAL TRUST COMPANY, a trust company
continued |
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under the laws of Canada and registered to carry business
in the |
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Province of Ontario |
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(Collateral Agent") |
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OF THE FOURTH
PART |
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- and - |
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ECOBANK DRC SARL, a company continued under the
laws of the |
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Democratic Republic of Congo |
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(Ecobank) |
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- and - |
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GRAMERCY FUNDS MANAGEMENT LLC, a limited
liability company formed under the |
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aws of Delaware |
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(Gramercy) |
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OF THE SIXTH
PART |
WHEREAS:
A. |
The Company, the Initial Guarantors, the Indenture
Trustee and Collateral Agent have heretofore executed and delivered a
collateral trust agreement dated as of March 2, 2012 (as amended, restated
and supplemented from time to time, the "CTA "); |
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B. |
By Joinder dated as of January 28, 2013, Ecobank agreed
to be bound by the terms of the as a Secured Debt
Representative; |
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C. |
By Joinder dated as of August 18, 2014, Gramercy agreed
to be bound by the terms of the as a Secured Debt
Representative; |
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E. |
T he Company, the Initial Guarantors, the Indenture
Trustee and Collateral Agent wish to amend the CTA to revise, among other
things, the remedies available to the Collateral Agent upon an Actionable
Default and the application of proceeds pursuant to Section 3.4;
and |
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F. |
Section 9.1(a) of the CTA provides that the Collateral
Agent, acting as directed by an Act of Instructing Debtholders, and the
Obligors may amend or supplement the CTA, provided that the consent of the
requisite percentage or number of holders of each Series of Secured Debt
so affected under the applicable Secured Debt Document has been obtained,
which consent to this First Amending Agreement has been
obtained. |
NOW THEREFORE, this First Amending Agreement witnesseth
and it is hereby agreed and declared as follows:
1. |
Capitalized Terms |
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Except as otherwise provided for herein, all capitalized
terms and expressions used in this Amending Agreement shall have the
meanings ascribed to them in the CTA. |
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2. |
Amendments to CTA |
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a. |
The following are added as additional definitions in
Section 1.1 of the CTA: |
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Disposition means with respect to any asset of any
Person, any direct or indirect sale (including, where the context so
requires, the sale of the Person itself), lease (where such Person is the
lessor of such asset), assignment, cession, transfer (including any
transfer of title or possession), exchange, conveyance, release or gift of
such asset, and includes the collection, foreclosure or other realization
upon collateral pledged by such Person; and Dispose, Disposal
and Disposed have meanings correlative thereto; |
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Forward Sale/Streaming Agreements has the meaning
ascribed thereto in the Indenture;" |
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FSA Purchasers means the Namoya Purchaser and the
Twangiza Purchaser;" |
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"Namoya Streaming Agreement" has the meaning ascribed
thereto in the Indenture;" |
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Namoya Payable Gold has the meaning ascribed to
Payable Gold in the Namoya Streaming Agreement; |
- 2 -
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Namoya Purchaser has the meaning ascribed to
Purchaser in the Namoya Streaming Agreement; |
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Priority Stream Obligations has the meaning ascribed
thereto in the Indenture; |
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Twangiza Purchaser has the meaning ascribed to
Purchaser in each of the Twangiza Forward Agreement 1 and Twangiza
Forward Agreement - 2; |
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b. |
The definitions of Permitted Prior Liens and Priority
Debt Sharing Confirmation and are deleted in their entirety and replaced
with the following: |
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Permitted Prior Liens means Liens that arise by
operation of law and are not voluntarily granted, to the extent entitled
by law to priority over the Liens created by the Priority Lien Documents.
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Priority Debt Sharing Confirmation means, as to any
Series of Priority Lien Debt, the written agreement of the holders of such
Series of Priority Lien Debt, as set forth in the credit agreement,
indenture or other agreement governing such Series of Priority Lien Debt,
for the benefit of all holders of each other existing and future Series of
Priority Lien Debt and each existing and future Priority Debt
Representative, that all Priority Lien Obligations will be and are secured
equally and ratably by all Liens at any time granted by the Borrower or
any other Obligor to secure any Obligations in respect of such Series of
Priority Lien Debt (except that the Priority Stream Obligations shall be
paid in priority to the other Priority Lien Obligations in accordance with
Section 3.4(a)), whether or not upon property otherwise constituting
Collateral, that all such Liens will be enforceable by the Collateral
Agent for the benefit of all holders of Priority Lien Obligations equally
and ratably (except that the Priority Stream Obligations shall be paid in
priority to the other Priority Lien Obligations in accordance with Section
3.4(a)), and that the holders of Obligations in respect of such Series of
Priority Lien Debt are bound by the provisions in this Agreement relating
to the order of application of proceeds from enforcement of such Liens,
and consent to and direct the Collateral Agent to perform its obligations
under this Agreement. |
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c. |
Subsection (b)(i) of the definition of "Parity Lien Debt"
in Section 1.1 of the CTA is deleted in its entirety and replaced with the
following: |
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"such Indebtedness is designated by the Borrower, in an
Officers Certificate delivered to each Parity Debt Representative and the
Collateral Agent, as Parity Lien Debt for the purposes of the Secured
Debt Documents; provided that no Obligation or Indebtedness may be
designated as both Parity Lien Debt and Priority Lien Debt, except for the
Namoya Streaming Obligations;" |
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d. |
Subsection (a) of the definition of "Priority Lien Debt"
in Section 1.1 of the CTA is deleted in its entirety and replaced with the
following: |
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"such Indebtedness is designated by the Borrower, in an
Officers Certificate delivered to each Priority Debt Representative and
the Collateral Agent, as Priority Lien Debt for the purposes of the
Secured Debt Documents; provided that no Obligation or Indebtedness may be
designated as both Parity Lien Debt and Priority Lien Debt, except for the
Namoya Streaming Obligations;" |
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e. |
The following is added to the end of the first sentence
of Section 2.5 of the CTA: (except that the Priority Stream Obligations
shall be paid in priority to the other Priority Lien Obligations in
accordance with Section 3.4(a)). |
- 3 -
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f. |
The following is added to Section 3.3 of the
CTA: |
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"Notwithstanding any Act of Instructing Debtholders or
any provision in this Agreement or in any other Collateral Document, the
Collateral Agent shall not Dispose of nor shall it request, approve or
consent to any Disposition of the Collateral unless such Disposition
complies in all respects with the transfer restrictions in the Forward
Sale/Streaming Agreements. If the Disposition of Collateral is effected in
accordance in all respects with the transfer provisions in the Namoya
Streaming Agreement, then the Namoya Purchaser will have no entitlement to
share in the proceeds of the Disposition of such Collateral (including
pursuant to Section 3.4(a)) except to satisfy the Priority Stream
Obligations due and owing to the Namoya Purchaser prior to such
Disposition and not assumed by the transferee of such
Collateral." |
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g. |
Section 3.4(a) of the CTA is deleted in its entirety and
replaced with the following: |
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(a) |
The Collateral Agent will, subject to applicable law,
apply the proceeds of any Disposition of any Collateral and the proceeds
of any insurance policy, including any title insurance policy, in the
following order of application and pursuant to wiring instructions as
specified in an Act of Instructing
Debtholders: |
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(i) |
FIRST, to the payment of all amounts payable under this
Agreement on account of the Collateral Agents direct or indirect fees and
any reasonable legal fees, costs and expenses or other liabilities or
debts of any kind incurred by the Collateral Agent or any co-trustee or
agent in connection with this Agreement or any other Collateral Document;
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(ii) |
SECOND, to the repayment of Indebtedness or other
Obligations, other than Secured Obligations, secured by a Permitted Prior
Lien on the Collateral sold or realized upon; |
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(iii) |
THIRD, to the Namoya Purchaser for application to the
payment of all outstanding Priority Stream Obligations; |
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(iv) |
FOURTH, to the respective Priority Debt Representatives
for application to the payment of all outstanding Priority Lien
Obligations (other than the Priority Stream Obligations) that are then due
and payable in such order as may be provided in the Priority Lien
Documents in an amount sufficient to pay in full in cash all outstanding
Priority Lien Debt (other than the Priority Stream Obligations) and all
other Priority Lien Obligations (other than the Priority Stream
Obligations) that are then due and payable (including all interest accrued
thereon after the commencement of any bankruptcy or other Insolvency
Proceeding at the rate, including any applicable post-default rate,
specified in the Priority Lien Documents, even if such interest is not
enforceable, allowable or allowed as a claim in such proceeding, and
including the discharge or cash collateralization (at the lower of (1)
105% of the aggregate undrawn amount and (2) the percentage of the
aggregate undrawn amount required for release of Liens under the terms of
the applicable Priority Lien Document) of all outstanding letters of
credit and bankers acceptances constituting Priority Lien Debt);
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(v) |
FIFTH, to the respective Parity Debt
Representatives for application to the payment of all outstanding Parity
Lien Obligations that are then due and payable in such order as may be
provided in the Parity Lien Documents in an amount sufficient to pay in
full in cash all outstanding Parity Lien Debt and all other Parity Lien
Obligations that are then due and payable (including all interest accrued
thereon after the commencement of any bankruptcy or other Insolvency
Proceeding at the rate, including any applicable post-default rate,
specified in the Parity Lien Documents, even if such interest is not
enforceable, allowable or allowed as a claim in such proceeding, and
including the discharge or cash collateralization (at 102.5% of the
aggregate undrawn amount) of all outstanding letters of credit and
bankers acceptances constituting Parity Lien Debt); and |
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(vi) |
SIXTH, any surplus remaining after
the irrevocable and unconditional payment in full in cash of all of the
Secured Obligations and Obligations entitled to the benefit of such
Collateral will be paid to the Borrower or the other applicable Obligors,
as the case may be, or its successors or assigns, or as a court of
competent jurisdiction may direct. |
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h. |
Section 3.4 of the CTA is hereby amended by adding the
following as subsection (c): |
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If any Priority Lien Secured Party other than the
Namoya Purchaser collects or receives any proceeds in respect of the
Priority Stream Obligations prior to the payment and satisfaction in full
of the Priority Stream Obligations and a Responsible Officer of such
Priority Debt Representative shall have received written notice, or shall
have actual knowledge, of the same prior to such Priority Debt
Representatives distribution of such proceeds, whether after the
commencement of an Insolvency Proceeding or otherwise, such Priority Lien
Secured Party will forthwith deliver the same to the Collateral Agent, for
the account of the Namoya Purchaser, in the form received, duly endorsed
to the Collateral Agent, for the account of the Namoya Purchaser to be
applied in accordance with clause (a) above. |
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Until so delivered, such proceeds will be held by
such Priority Lien Secured Party for the benefit of the Namoya Purchaser.
This Section 3.4(c) shall not apply to payments received by any holder of
Priority Lien Obligations if such payments are not proceeds of any
Disposition of any Collateral. |
3. |
Acknowledgement of Security Interest in Forward
Sale/Streaming Agreements |
The parties hereto acknowledge that the FSA Purchasers have
granted a security interest in all of their right, title, estate and interest
in, to, under and in respect of the Forward Sale/Streaming Agreements as general
and continuing security for the payment and performance of certain of their
other obligations. The parties hereto agree that upon a due enforcement of such
security interest against a FSA Purchaser by the applicable secured parties or
their representative, the security parties or their representative shall hold
all of the applicable FSA Purchasers right, title, estate and interest in, to,
under and in respect of the Forward Sale/Streaming Agreements and shall be
afforded the benefit of, and be deemed to have assumed, all of the rights and
obligations of the Forward Sale/Streaming Agreements under the Collateral
Documents, provided that such secured parties or their representative execute(s)
the requisite Priority Debt Sharing Confirmation or Parity Debt Sharing
Confirmation, as applicable.
- 5 -
4. |
Amendments to Priority Debt Sharing
Confirmations |
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The parties hereto acknowledge and agree that each
Priority Debt Sharing Confirmation in the Secured Debt Documents
(including, without limitation, the Securities Purchase Agreement dated
August 18, 2014 between Banro Corporation and the Buyers (as defined
therein)) or entered into in connection with a Secured Debt Document, is
hereby amended to provide that the Priority Stream Obligations shall be
paid in priority to the other Priority Lien Obligations in accordance with
Section 3.4(a) of this Agreement. |
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5. |
Amendments to Secured Debt Documents and Collateral
Documents |
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The parties hereto acknowledge and agree that all Secured
Debt Documents and Collateral Documents are deemed to be amended to the
extent required to reflect the amendments set forth in this First Amending
Agreement. |
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6. |
Further Steps |
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The Company and the Trustee are hereby authorized and
directed to take all such further steps as are necessary to give effect to
the amendments as set forth in this First Amending Agreement. |
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7. |
Incorporation into CTA |
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This First Amending Agreement shall be read and construed
as if forming a part of the CTA and the CTA shall be amended and revised
to the extent required to give effect to this First Amending
Agreement. |
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8. |
Ratification |
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The CTA, as amended by this First Amending Agreement, is
in all respects ratified and confirmed. |
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9. |
Governing Law |
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This First Amending Agreement shall be construed in
accordance with the laws of the Province of Ontario and shall be treated
in all respects as an Ontario contract. The parties hereby submit and
attorn to the jurisdiction of the courts of Ontario for all matters
related to this First Amending Agreement. |
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10. |
Counterparts |
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This First Amending Agreement may be executed in several
counterparts, each of which when so executed shall be deemed to be an
original and such counterparts together shall constitute one and the same
instrument and notwithstanding their date of execution they shall be
deemed to be dated as of the date hereof. |
[signature page follows]
- 6 -
IN WITNESS WHEREOF the parties have executed this First
Amending Agreement as of the date first above written.
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EQUITY FINANCIAL
TRUST COMPANY |
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as Collateral Agent
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
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EQUITY FINANCIAL
TRUST COMPANY |
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as Indenture Trustee
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
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BANRO
CORPORATION |
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as Borrower and Issuer
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Per: |
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Name: |
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Title: |
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BANRO CONGO MINING
S.A. |
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as Initial Guarantor
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Per: |
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Name: |
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Title: |
(signature page to Amending Agreement)
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KAMITUGA MINING S.A. |
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as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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LUGUSHWA MINING S.A. |
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as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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NAMOYA MINING S.A. |
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as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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TWANGIZA MINING S.A. |
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as Initial Guarantor |
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Per: |
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Name: |
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Title: |
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ECOBANK DRC SARL |
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as Secured Debt Representative |
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Per: |
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Name: |
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Title: |
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Per: |
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Name: |
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Title: |
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GRAMERCY FUNDS MANAGEMENT LLC
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as Secured Debt Representative |
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Per: |
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Name: |
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Title: |
(signature page to Amending Agreement)
SCHEDULE C
OWNERSHIP OF NOTES
[Details regarding Notes beneficially owned, directly or
indirectly, or over which control or direction is exercised, by the Noteholder
redacted.]
SCHEDULE D
REGULATORY AND CORPORATE APPROVALS
1. |
Consent from a majority of the holders of the Notes,
as required under section 9.02 of the Indenture. |
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2. |
Board approvals of the board of directors of Banro and
each applicable subsidiary of Banro. |
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3. |
Ministerial approval in the Democratic Republic of the
Congo, if applicable. |
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