Document:

EX-4.32

 Exhibit 4.32 

EXECUTION VERSION 
  

 
 CESSION IN SECURITY 

 
  

by 
 SOUTHGOLD EXPLORATION
PROPRIETARY LIMITED 
 (as Cedent) 

in favour of 
 PURPLE RAIN
SECURITY SPV (RF) PROPRIETARY LIMITED 
 (as Debt Guarantor) 

 
  
 

 

 CONTENTS 
  

							
	1.		DEFINITIONS AND INTERPRETATION		 	1	  
	2.		INTRODUCTION		 	6	  
	3.		CESSION IN SECURITY		 	6	  
	4.		WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS BY THE CEDENT		 	7	  
	5.		DELIVERY OF DOCUMENTS EVIDENCING THE CEDED RIGHTS AND OTHER OBLIGATIONS OF THE CEDENT		 	8	  
	6.		RIGHTS, POWERS AND PRIVILEGES ATTACHING TO THE CEDED RIGHTS		 	8	  
	7.		REALISATION		 	9	  
	8.		APPROPRIATION OF PROCEEDS		 	10	  
	9.		AUTHORITY		 	11	  
	10.		DURATION		 	11	  
	11.		FURTHER ASSURANCES		 	11	  
	12.		ADDITIONAL RIGHTS		 	12	  
	13.		CEDENT BOUND NOTWITHSTANDING CERTAIN CIRCUMSTANCES		 	12	  
	14.		KEEPING, INSPECTION AND DELIVERY OF RECORDS		 	12	  
	15.		EXEMPTION FROM LIABILITY		 	13	  
	16.		FURTHER CESSIONS		 	13	  
	17.		CERTIFICATE OF INDEBTEDNESS		 	13	  
	18.		RENUNCIATION OF BENEFITS		 	13	  
	19.		STIPULATION		 	14	  
	20.		FREEDOM OF CHOICE		 	14	  
	21.		REMEDIES CUMULATIVE		 	14	  
	22.		STIPULATION FOR THE BENEFIT OF DEBT GUARANTOR		 	15	  
	23.		WHOLE AGREEMENT		 	15	  
	24.		DOMICILIUM AND NOTICES		 	16	  
	25.		APPLICABLE LAW AND JURISDICTION		 	17	  
	26.		FEES AND COSTS		 	17	  
	27.		SEVERABILITY		 	17	  
	28.		INDEPENDENT ADVICE		 	17	  
	29.		SIGNATURE		 	18	  
	 SCHEDULE 1 : NOTICE TO INSURER
		 	20	  
	 SCHEDULE 2 : FORM OF NOTICE TO BANK
		 	23	  

  
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 PARTIES: 

This Agreement is made between: 
  

	(1)	SOUTHGOLD EXPLORATION PROPRIETARY LIMITED; and 

  

	(2)	PURPLE RAIN SECURITY SPV (RF) PROPRIETARY LIMITED.  

 IT IS AGREED AS FOLLOWS: 

 

	1.	DEFINITIONS AND INTERPRETATION 

  

	1.1.	Definitions 

 Unless the context dictates otherwise, the words and expressions set forth
below shall bear the following meanings and cognate expressions shall bear corresponding meanings: 
  

	1.1.1.	Agreement means this Cession in Security and its Schedules; 

  

	1.1.2.	Approved Offtaker means Red Kite and any other Offtakers approved from time to time by the Security Agent, acting reasonably; 

 

	1.1.3.	Borrower means Southgold; 

  

	1.1.4.	Borrower Indemnity means the counter indemnity agreement entered into or to be entered into between the Cedent and the Debt Guarantor on or about the Signature Date, in terms of which, inter alia, the
Cedent indemnifies the Debt Guarantor against all and any claims made against it and/or costs, damages and/or losses it may suffer pursuant to issuing the Debt Guarantee, all on the terms and subject to the conditions contained therein;

  

	1.1.5.	Business Rescue Plan means a plan as contemplated by section 150 of the South African Companies Act, 2008 prepared by the business rescue practitioner appointed in respect of the Borrower, after consulting the
creditors, other affected persons and the management of the Borrower, and approved by the creditors of the Borrower on 11 July 2013; 

  

	1.1.6.	Ceded Rights means all of the Cedent’s rights of any nature whatsoever in and interests of any nature whatsoever to: 

  

	1.1.6.1.	the Claims; 

  

	1.1.6.2.	the Insurance Policies; 

  

	1.1.6.3.	the Insurance Proceeds; 

  

	1.1.6.4.	any Offtake Contract; and 

  

	1.1.6.5.	the Proceeds Account (including all amounts, and interest accrued on such amounts, held from time to time in the Proceeds Account), 

  
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whether actual, prospective or contingent, direct or indirect, whether a claim to the payment of money or to the performance of any other obligation, and whether or not the said rights and
interests were within the contemplation of the Parties at the Signature Date; 

  

	1.1.7.	Cedent means the Borrower; 

  

	1.1.8.	Claims means all current and future claims which Southgold may have against any debtor, provider of services, advisor or other person, claims against any of its shareholders and all claims in respect of the
leases, licences, operating agreements, supply agreements, or any other contracts to which Southgold is a party, or guarantees and securities held by Southgold in terms of any project document and any incorporeal property of Southgold, and proceeds
from any such claims; 

  

	1.1.9.	CS means Credit Suisse AG, a banking institution incorporated under the laws of Switzerland, acting through its office at Paradeplatz 8, 8001 Zurich, Switzerland; 

 

	1.1.10.	Debt Guarantee means the guarantee given or to be given by the Debt Guarantor to the Lenders in terms of which, inter alia, the Debt Guarantor guarantees to the Lenders the due, proper and punctual payment
and performance by the Obligors (as defined therein) of their obligations owing to the Lenders in terms of the Finance Documents to which they are a party, all on the terms and subject to the conditions contained therein; 

 

	1.1.11.	Debt Guarantor means Purple Rain Security SPV (RF) Proprietary Limited, a private company duly incorporated according to the company laws of South Africa, with registration number 2010/007093/07;

  

	1.1.12.	Effective Date means the date on which all of the conditions precedent to the Transaction Implementation Agreement are fulfilled in accordance with the terms thereof; 

 

	1.1.13.	Event of Default has the meaning given in the Facility Agreement; 

  

	1.1.14.	Security Agent means CS or any replacement Security Agent which has become a party to the Facility Agreement; 

  

	1.1.15.	Facility Agreement means the facility agreement entered into or to be entered into between the Debt Guarantor, Southgold and the Lenders on or about the Signature Date, pursuant to which the repayment obligations
owing by Southgold to the Lenders (as assignees of amounts under the Intra-Group Loan Agreement and Acknowledgement of Debt pursuant to the provisions of the Deed of Assignment of Loan Agreement and the Deed of Assignment of Debt) are substituted by
the terms set out therein; 

  

	1.1.16.	Final Maturity Date has the meaning given in the Facility Agreement; 

  

	1.1.17.	Finance Documents shall have the meaning given thereto in the Facility Agreement, save that for purposes of this Agreement, the term Finance Documents shall not include the Revenue Sharing Agreement (as
defined in the Facility Agreement) or any other such revenue sharing agreements or documents pursuant or ancillary thereto; 

  
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	1.1.18.	Finance Parties means: 

  

	1.1.18.1.	the Lenders; and 

  

	1.1.18.2.	the Security Agent, 

 and Finance Party means, as the context requires, either one of
them; 
  

	1.1.19.	Gold means London unallocated gold bullion measured in Ounces and (unless otherwise agreed by the Borrower and the Security Agent) which complies with the rules of the LBMA relating to good delivery and fineness
as from time to time in effect; 

  

	1.1.20.	Insurance Policies means all contracts and policies of insurance of any kind which are effected and maintained by or on behalf of the Cedent from time to time; 

 

	1.1.21.	Insurance Proceeds means the proceeds payable under the Insurance Policies from time to time; 

  

	1.1.22.	Lenders means: 

  

	1.1.22.1.	CS; and 

  

	1.1.22.2.	SCB, 

 and Lender means, as the context requires, either one of them; 

 

	1.1.23.	Offtake Contract means each agreement for the sale or other disposal of Products, including delivery of Products for the purpose of refining and smelting Gold, entered into between Southgold and an Approved
Offtaker (including, but not limited to Red Kite) as buyer; 

  

	1.1.24.	Offtaker means in respect of any Offtake Contract, the counterparty to such Offtake Contract; 

  

	1.1.25.	Parties means: 

  

	1.1.25.1.	the Cedent; 

  

	1.1.25.2.	the Debt Guarantor; and 

  

	1.1.25.3.	the Security Agent 

 and Party means, as the context requires, either one of them; 

 

	1.1.26.	Proceeds Account has the meaning given in the Facility Agreement; 

  

	1.1.27.	Products means Gold, unrefined gold-bearing ore, doré bars and any other minerals produced by Southgold at the Site; 

  

	1.1.28.	Product Proceeds means all monies payable to or received by Southgold arising from the sale of Product; 

  
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	1.1.29.	Red Kite means Red Kite Explorer Trust of William House, 20 Reid Street, Hamilton, HM11, Bermuda; 

  

	1.1.30.	Secured Obligations means any and all of the Cedent’s obligations or indebtedness (whether actual or contingent) from whatsoever cause and howsoever arising, owing to the Debt Guarantor under the Borrower
Indemnity; 

  

	1.1.31.	SCB means Standard Chartered Bank, a bank incorporated in England and Wales with limited liability by Royal Charter 1853, under reference ZC18, the principal office of which is situated in England at 1 Basinghall
Avenue, London, EC2V 5DD, United Kingdom; 

  

	1.1.32.	Security Cession means the cession in securitatem debiti contemplated by this Agreement; 

  

	1.1.33.	Signature Date means the date of the signature of the Party last signing this Agreement in time; 

  

	1.1.34.	Southgold means Southgold Exploration Proprietary Limited, a private company duly incorporated according to the company laws of South Africa, with registration number 2000/016129/07; and 

 

	1.1.35.	Transaction Implementation Agreement means the agreement entered into amongst, inter alios, Southgold, the Lenders and Wits Gold in terms of which, inter alia, the Business Rescue Plan is
implemented, all on the terms and subject to the conditions contained therein. 

  

	1.2.	Interpretation 

  

	1.2.1.	Terms used (but not otherwise defined) in this Agreement have the meaning given to them in the Facility Agreement. 

  

	1.2.2.	This Agreement and the rights and obligations of the Parties shall in all respects be subject to the terms and conditions of the Facility Agreement and in the event of any conflict between the provisions of this
Agreement (including, without limitation, the terms defined herein) and the provisions of the Facility Agreement, the provisions of this Agreement shall prevail. 

  

	1.2.3.	If any provision in a definition is a substantive provision conferring rights or imposing obligations on any Party, notwithstanding that it is only the definition clause, effect shall be given to it as if it were a
substantive provision in the body of the Agreement. 

  

	1.2.4.	Where any term is defined within the context of any particular clause in the Agreement, the term so defined, unless it is clear from the clause in question that the term so defined has limited application to the
relevant clause, shall bear the meaning ascribed to it for all purposes in terms of this Agreement, notwithstanding that that term has not been defined in this definitions clause. 

 

	1.2.5.	References to the assets of any person shall be construed as a reference to the whole or any part of its business, undertaking, property, shareholdings, assets and revenues (including any rights to receive
revenues). 

  
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	1.2.6.	Any reference to law shall be construed as any law (including common or customary law) or statute, constitution, decree, judgment, treaty, regulation, directive, bye-law, order or any other legislative measure of
any government, supranational, local government, statutory or regulatory body or court. 

  

	1.2.7.	Any reference to a person shall be construed as a reference to any person, firm, company, trust, scheme, corporation, government, state or agency of a state or any association or partnership (whether or not
having separate legal personality) of two or more of the foregoing. 

  

	1.2.8.	Where any matter requires the approval, agreement, acceptance or consent of the Debt Guarantor such approval, agreement, acceptance or consent shall be deemed not to have been given unless given in writing. Unless
otherwise specified in any relevant clause of this Agreement, the Debt Guarantor may give or withhold its approval, agreement, acceptance or consent in its sole discretion. 

 

	1.2.9.	Any reference to an enactment is to that enactment as at the Signature Date and as amended or re-enacted from time to time. 

  

	1.2.10.	Unless inconsistent with the context, an expression which denotes: 

  

	1.2.10.1.	any one gender includes the other genders; 

  

	1.2.10.2.	a natural person includes an artificial person and vice versa; and 

  

	1.2.10.3.	the singular includes the plural and vice versa. 

  

	1.2.11.	When any number of days is prescribed in the Agreement, those days shall be reckoned inclusively of the first and exclusively of the last day unless the last day of the number so calculated falls on a day which is not a
Business Day, in which case the number of days shall be reckoned to the next succeeding Business Day. 

  

	1.2.12.	Expressions defined in this Agreement shall bear the same meaning in Schedules to this Agreement which do not themselves contain their own conflicting definitions. 

 

	1.2.13.	The expiration or termination of this Agreement shall not affect such of the provisions of the Agreement as expressly provided that they will operate after any such expiration or termination or which of necessity must
continue to have effect after such expiration or termination, notwithstanding that the clauses themselves do not expressly provide for this. 

  

	1.2.14.	References to including and in particular shall not be construed restrictively but shall mean “including, without limitation of the generality of the foregoing” and “in particular, but without
limitation to the generality of the foregoing” respectively; 

  

	1.2.15.	The rule of construction that a contract shall be interpreted against the party responsible for the drafting or preparation of the contract, shall not apply. 

 

	1.2.16.	Where figures are referred to in numerals and in words, if there is any conflict between the two, the words shall prevail. 

  
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	1.2.17.	Any reference herein to an agreement shall be to such agreement as amended, supplemented, varied, novated or restated from time to time hereafter. 

 

	2.	INTRODUCTION 

 As security for the due performance of the Secured Obligations owing by
the Cedent, the Cedent has agreed to cede in securitatem debiti all of the Ceded Rights to the Debt Guarantor on the terms and subject to the conditions set out in this Agreement. 

 

	3.	CESSION IN SECURITY 

  

	3.1.	With effect from the Effective Date until the Final Maturity Date, in accordance with Clause 10 (Duration) below, the Cedent hereby cedes in securitatem debiti to the Debt Guarantor all of the Ceded Rights
as a continuing general covering collateral security for the due, proper and timeous payment and performance in full of all of the Secured Obligations owing by the Cedent, on the terms and conditions set out in this Agreement, which cession the Debt
Guarantor hereby accepts. 

  

	3.2.	Without prejudice to the representations and warranties given by the Cedent to the Debt Guarantor pursuant to Clause 4.1 and without prejudice to the rights of the Debt Guarantor or any other Finance Party consequent
upon any breach of the representations and warranties given by the Cedent to the Debt Guarantor pursuant to Clause 4.1, if the Ceded Rights are subject to any right in breach of the representations and warranties in Clause 4.1.2 or if the Ceded
Rights are not released pursuant to the Finance Documents on or before the Effective Date or if any other Security has been granted by the Cedent over any Ceded Right to any other person prior to the Effective Date, this Agreement shall (without
prejudice to any other rights the Debt Guarantor and/or the Finance Parties may have pursuant to the Facility Agreement or any other Finance Document(s) and without affecting the operation of this Agreement in respect of those of the Ceded Rights
which have not been so ceded to another person) constitute a cession in securitatem debiti to the Debt Guarantor of the Cedent’s reversionary rights or other interests (including all of the Cedent’s rights of action against such
other person and any rights which now or may in the future vest in the Cedent pursuant to such reversionary rights) in respect of those Ceded Rights, which are hereby ceded in securitatem debiti to the Debt Guarantor with effect from the
Effective Date, which cession the Debt Guarantor hereby accepts. The Debt Guarantor shall be entitled to notify any such other person of this Agreement, and if any such other person is entitled to possession of any of the documents referred to in
Clause 5, then the Cedent shall deliver photocopies of the relevant documents to the Debt Guarantor, and as soon as such person ceases to be entitled to possession or gives up possession of such documents, the Cedent shall deliver the relevant
documents to the Debt Guarantor. 

  

	3.3.	The cession contemplated by this Agreement is intended to operate as a cession of each part and all of the Ceded Rights, individually and collectively. 

 

	3.4.	If, for any reason, any security interests intended to be created under this Agreement are or become illegal, invalid or unenforceable in respect of some of the Ceded Rights, then the cession of those Ceded Rights, as
the case may be, shall be severed from this Agreement, and this Agreement and all the security interests created over the remainder of the Ceded Rights shall continue in full force and effect. 

  
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	3.5.	The cession contemplated by this Agreement operates as a security cession and not as an out and out or outright cession and the Cedent retains bare ownership of the Ceded Rights, subject to the rights of the Debt
Guarantor as secured creditor in terms of the Finance Documents to which it is a party. 

  

	4.	WARRANTIES, REPRESENTATIONS AND UNDERTAKINGS BY THE CEDENT 

  

	4.1.	The Cedent until the Final Maturity Date: 

  

	4.1.1.	warrants and represents on the Signature Date and on each day that this Agreement is in force (save as otherwise provided in the Finance Documents), that it is and will remain the sole and beneficial owner of the Ceded
Rights to the exclusion of all others and no person has an option or right of refusal over the Ceded Rights; 

  

	4.1.2.	warrants and represents on the Effective Date and on each day that this Agreement is in force that the Ceded Rights ceded to the Debt Guarantor under this Agreement have not been ceded (either outright or as security),
discounted, factored, mortgaged under notarial bond or otherwise, or otherwise disposed of or hypothecated, nor are they subject to any other rights in favour of any person; 

 

	4.1.3.	warrants and represents on the Signature Date and on each day that this Agreement is in force that all obligations undertaken by it under this Agreement have been authorised by all necessary corporate action and the
constitutive documents of the Cedent do not place any limitations or restrictions on the Cedent to cede the Ceded Rights as provided for in this Agreement; 

  

	4.1.4.	warrants and represents on the Effective Date and on each day that this Agreement is in force that after due investigation, the issue of the Security Cession and the fulfilment of its obligations in accordance with the
terms hereof do not contravene any law, regulation or any contractual obligation binding on it; 

  

	4.1.5.	subject to the provisions of the other Finance Documents, waives any and all rights in respect of the Ceded Rights which it may have in conflict with the rights of the Debt Guarantor under this Agreement;

  

	4.1.6.	acknowledges that it may not pledge, cede, assign or transfer or, subject to the provisions of the other Finance Documents, in any other manner encumber or deal with the Ceded Rights without the prior written consent of
the Debt Guarantor; 

  

	4.1.7.	agrees that on the occurrence of an Event of Default which is continuing and not remedied pursuant to any Finance Document, it will forthwith pay over to the Debt Guarantor any interest or other benefits of any nature
accrued and/or received in respect of the Ceded Rights by depositing the same into a nominated account as the Debt Guarantor may from time to time direct in writing; and 

 

	4.1.8.	undertakes and agrees, to the extent that it is reasonably able to do so, to prevent any variation of the value of, or rights relating to, the Ceded Rights without the prior written consent of the Debt Guarantor.

  
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	4.2.	It is recorded that the Debt Guarantor has entered into this Agreement on the strength of and relying on the warranties and representations in this Clause 4, each of which shall be deemed to be separate warranties and
representations, given without prejudice to any other warranty or representation, and deemed to be material representations inducing the Debt Guarantor to enter into this Agreement. 

 

	5.	DELIVERY OF DOCUMENTS EVIDENCING THE CEDED RIGHTS AND OTHER OBLIGATIONS OF THE CEDENT 

  

	5.1.	The Cedent shall deliver to the Debt Guarantor any documents relating to the Ceded Rights for which it may at any time reasonably call, which documents shall be delivered to the Debt Guarantor, in so far as the Debt
Guarantor is not already in possession thereof, within a reasonable period, as agreed between the Debt Guarantor and the Cedent, and, failing such agreement, within 10 (ten) Business Days of receipt by the Cedent of a written request for such
documents from the Debt Guarantor. 

  

	5.2.	The Cedent shall deliver a written notice and acknowledgement within 5 (five) Business Days from the Effective Date substantially in the form of Schedule 2 (Form of Notice to Standard Bank) notifying the Standard
Bank with which the Cedent holds the Proceeds Account of the Security Cession and signed by such bank. 

  

	5.3.	With respect to the Insurance Policies, the Cedent shall within 5 (five) Business Days from the Effective Date: 

  

	5.3.1.	notify the relevant insurer(s) of the cession in security of the Insurance Policies in the form set out in Schedule 1 (Form of Notice to Insurer) hereto and ensure that the interests of the Debt Guarantor are
noted on the insurance policy(ies) and documents in respect of the Insurance Policies; 

  

	5.3.2.	until termination of this Agreement pursuant to Clause 10 (Duration), pay all premiums in respect of the Insurance Policies in full and on due date and provide proof of such payments on written request by the
Security Agent; and 

  

	5.3.3.	procure that prior to any enforcement of the Debt Guarantor’s rights pursuant to Clause 7 (Realisation), until termination of this Agreement pursuant to Clause 10 (Duration), all proceeds from the
Insurance Policies are applied in accordance with clause 17 (Insurance) of the Facility Agreement. 

  

	5.4.	The Cedent shall generally do everything that may be required by the Debt Guarantor, including but not limited to complying with the obligations of the Cedent under Clause 5.1, for the purposes of and to give effect to
this Agreement, failing which the Debt Guarantor may, if possible, attend thereto and recover from the Cedent any properly evidenced expenses reasonably incurred in doing so within 3 (three) Business Days after written demand. 

 

	6.	RIGHTS, POWERS AND PRIVILEGES ATTACHING TO THE CEDED RIGHTS 

  

	6.1.	This Agreement operates in respect of all rights, powers and privileges attaching to the Ceded Rights, including but not limited to those set out in Clause 6.2 below and such rights, powers and privileges shall
accordingly vest in the Debt Guarantor with the power to 

  
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	 	exercise them either in its own name or in the name of the Cedent, upon the occurrence of an Event of Default which is continuing, alternatively, the Cedent shall, upon the occurrence of an Event of Default which is
continuing, and if the Debt Guarantor so directs, exercise its rights, powers and privileges in its own name and in accordance with the Debt Guarantor’s directions to the greatest extent permitted by applicable law. 

 

	6.2.	Subject to Clause 6.1, such rights, powers and privileges attaching to the Ceded Rights include (but are not limited to) the right to receive in its own name and for its own account payment of the benefits which become
due in respect of the Ceded Rights from time to time. 

  

	6.3.	For the avoidance of doubt, prior to the occurrence of an Event of Default which is continuing, the Cedent shall be entitled to exercise the rights in terms of Clause 6.2 above, in respect of the Ceded Rights, without
the consent of the Debt Guarantor. 

  

	7.	REALISATION 

  

	7.1.	Upon the occurrence of an Event of Default which is continuing and provided that the Debt Guarantor and/or the Facility Agent has demanded payment from the Cedent in terms of Clause 4.1 of the Borrower Indemnity, the
Cedent hereby irrevocably and unconditionally authorises and empowers the Debt Guarantor or its nominee, without any further authority or consent of any nature whatsoever required from the Cedent, and in the name of the Debt Guarantor or in the name
of the Cedent to: 

  

	7.1.1.	exercise all or any of the rights, powers and privileges and enforce all or any obligations attaching to the Ceded Rights in such manner and on such terms as the Debt Guarantor in its sole discretion deems fit; and/or

  

	7.1.2.	receive payment for, delivery of and/or performance in respect of, the Ceded Rights in its own name; and/or 

  

	7.1.3.	at the Debt Guarantor’s election: 

  

	7.1.3.1.	sell or otherwise realise the Ceded Rights or any one of them by public auction; or 

  

	7.1.3.2.	sell or otherwise realise the Ceded Rights by private treaty, on reasonable notice to the Cedent of no more than 10 (ten) Business Days; or 

 

	7.1.3.3.	take over the Ceded Rights at a fair value which, in the absence of agreement within 10 (ten) Business Days after delivery by the Debt Guarantor to the Cedent of a written notice stating that the Debt Guarantor intends
to exercise its rights pursuant to this Clause 7.1.3.3, shall be determined by an independent accountant from either of KPMG, Deloitte, Ernst & Young or Pricewaterhouse Coopers or a merchant bank agreed to by the Parties or, failing
agreement within 5 (five) Business Days, appointed, at the request of either the Debt Guarantor or the Cedent, by the President for the time being of the Southern African Institute of Chartered Accountants (or the successor body thereto) (which
independent accountant or merchant bank shall act as an expert and not as an arbitrator, shall be instructed to make his determination within 10 (ten) Business Days after being requested to do so and shall determine the liability for his charges
which will be paid accordingly); and/or 

  
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	7.1.4.	institute any legal proceedings which the Debt Guarantor may deem necessary in connection with any sale or other realisation or the transfer of any of the Ceded Rights by the Debt Guarantor or its nominee; and/or

  

	7.1.5.	convey valid title in the Ceded Rights to any purchaser thereof (including the Debt Guarantor, on the basis envisaged in Clause 7.1.3.3 above) and/or to take all such further or other steps as the Debt Guarantor may
consider necessary to deal with the Ceded Rights; and/or 

  

	7.1.6.	take all such further or other steps as the Debt Guarantor may reasonably consider necessary to deal with the Ceded Rights in order to give effect to this Security Cession. 

 

	7.2.	On the Debt Guarantor taking any actions in terms of Clause 7.1, or otherwise as required by the Debt Guarantor, the Cedent shall on demand by the Debt Guarantor: 

 

	7.2.1.	notify any relevant person required by the Security Agent in writing that payment for, delivery of or performance in respect of the Ceded Rights must be made to the Debt Guarantor, and that payment, delivery or
performance to the Cedent or to anyone else will not constitute valid payment, delivery or performance, and the Debt Guarantor shall be entitled to do likewise. The Cedent shall on demand by the Debt Guarantor provide proof that such notification
has been duly given; 

  

	7.2.2.	refuse to accept any payment, delivery or performance tendered in respect of any of the Ceded Rights in order that such payment, delivery or performance be tendered to the Debt Guarantor, which will apply any payment so
received in accordance with the provisions of Clause 8 (Appropriation of Proceeds); and 

  

	7.2.3.	at its own cost carry out any lawful necessary directions the Debt Guarantor may give in regard to the realisation of the Ceded Rights and sign any document or do any other lawful act necessary to vest the Ceded Rights
in the Debt Guarantor, to enable the sale or disposition of the Ceded Rights, which may otherwise be necessary or required to perfect the Security Cession created in this Agreement. 

 

	7.3.	Notwithstanding anything to the contrary contained in this Agreement, the Debt Guarantor shall not be obliged to take any particular steps to collect or otherwise enforce its rights in respect of the Ceded Rights.

  

	8.	APPROPRIATION OF PROCEEDS 

  

	8.1.	The Debt Guarantor shall apply the net proceeds of all amounts received pursuant to the sale or other realisation of the Ceded Rights in accordance with the provisions of this Agreement (after deducting all properly
evidenced costs and expenses incurred by the Debt Guarantor in relation to such realisation, including the cost of any legal proceedings, any stamp duty, uncertificated securities tax, transfer duty or any other tax that may be imposed in respect
thereof) in reduction or discharge, as the case may be, of the Cedent’s obligations under the Secured Obligations. 

  

	8.2.	After full and final payment of the Cedent’s indebtedness to the Debt Guarantor as set out in Clause 8.1 above, including without limitation the full and final discharge of the Secured Obligations, the balance, if
any, of such proceeds will be paid to the Cedent within 5 (five) Business Days after such settlement of the Cedent’s indebtedness to the Debt Guarantor. 

  
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	9.	AUTHORITY 

 If at any time during this Agreement the Debt Guarantor becomes entitled to
exercise its rights under Clause 7.1, the Cedent hereby authorises and appoints the Debt Guarantor (or its nominee) irrevocably and in rem suam as the Cedent’s attorney and agent in the Cedent’s name, place and stead to sign and
execute: 
  

	9.1.	such documents as may be necessary: 

  

	9.1.1.	in order to render the Ceded Rights or any of them negotiable including, without limitation, the signature of transfer declarations; 

 

	9.1.2.	to enable the Debt Guarantor to receive payment of the purchase price for the Ceded Rights subject to the provisions of Clause 8; and 

 

	9.1.3.	to enable the Debt Guarantor to exercise any of its rights granted to it herein. 

  

	10.	DURATION 

 This Agreement is a continuing covering security and will ipso facto
terminate only upon the Final Maturity Date. In particular, this Agreement shall not terminate by reason solely of the fact that there may at any time be reduced obligations or debts owing by the Cedent under the Finance Documents. The Security
Agent shall, within 5 (five) Business Days of receipt of a written request from the Cedent, certify in writing that the Final Maturity Date has occurred (provided that the Final Maturity Date has in fact occurred). 

 

	11.	FURTHER ASSURANCES 

  

	11.1.	The Cedent shall generally promptly do everything that may be required in order to comply with its obligations under this Agreement and as may otherwise be required by the Debt Guarantor for the purposes of and to give
effect to this Agreement, failing which the Debt Guarantor may, to the extent possible, attend thereto on behalf of the Cedent and recover on demand from the Cedent any expenses incurred in relation thereto. In particular the Cedent shall execute
and do all such acts and things as the Debt Guarantor, in its reasonable discretion, may require: 

  

	11.1.1.	to perfect or protect the security interests created (or intended to be created) by this Agreement; 

  

	11.1.2.	to preserve or protect any of the rights of the Debt Guarantor under this Agreement; 

  

	11.1.3.	to enforce any security interests created under this Agreement on or at any time after it becomes enforceable; 

  

	11.1.4.	for the exercise of any power, authority or discretion vested in the Debt Guarantor under this Agreement; and 

  

	11.1.5.	to carry out the effect, intent and purpose of this Agreement, in any such case, forthwith upon demand by the Debt Guarantor to the maximum extent permitted by law and at the expense of the Cedent. 

  
 - 11 - 

	12.	ADDITIONAL RIGHTS 

  

	12.1.	The rights conferred on the Debt Guarantor by this Agreement are additional to and not in substitution for: 

  

	12.1.1.	any other rights the Debt Guarantor has, or may at any time in the future have, against the Cedent or any other person; and/or 

  

	12.1.2.	any other security held or hereafter to be held by the Debt Guarantor from the Cedent, or any other person, in connection with the Secured Obligations. The Debt Guarantor may release any security held by it without
prejudice to its rights under this Agreement. 

  

	13.	CEDENT BOUND NOTWITHSTANDING CERTAIN CIRCUMSTANCES 

  

	13.1.	The Cedent agrees that on signature hereof, it will be bound under this Agreement to the full extent hereof, despite the fact that: 

  

	13.1.1.	any intended additional security from the Cedent or any other person for the Secured Obligations may not be obtained or may be released or may cease to be held for any other reason; 

 

	13.1.2.	any Finance Party may agree any variation or novation of any Finance Document to which it is a party (including any amendment providing for the increase in the amount of a Facility or an additional facility);

  

	13.1.3.	any Finance Party may receive a dividend or benefit in any insolvency, liquidation or any compromise or composition, whether in terms of any statutory enforcement or the common law; 

 

	13.1.4.	the Debt Guarantor, the Security Agent or any other Finance Party may grant any indulgences to any Obligor or fail to exercise any one or more of its rights under the Finance Documents, either timeously or at all; or

  

	13.1.5.	any other fact or circumstance may arise on which the Cedent might otherwise be able to rely on a defence based on prejudice, waiver or estoppel. 

 

	13.2.	If the Cedent suffers any loss arising from any of the facts, circumstances, acts or omissions referred to above, it will have no claim against the Debt Guarantor or any Finance Party in respect thereof.

  

	14.	KEEPING, INSPECTION AND DELIVERY OF RECORDS 

  

	14.1.	The Cedent shall at all times keep up-to-date records of the Ceded Rights and shall comply with any reasonable directions the Debt Guarantor may give in regard to the keeping of such records. 

 

	14.2.	The Debt Guarantor or anyone authorised by the Debt Guarantor may at any time and on reasonable notice inspect any of the Cedent’s books of account and other records including the Cedent’s books of account
and/or other records which may be in the possession of a third party. 

  
 - 12 - 

	14.3.	If the Debt Guarantor at any time so requests, the Cedent shall at its own cost deliver to the Debt Guarantor certified copies of any of the books and/or records referred to in Clauses 14.1 or 14.2. 

 

	15.	EXEMPTION FROM LIABILITY 

  

	15.1.	Neither the Debt Guarantor nor any Finance Party officers, trustees, agents, beneficiaries, employees and advisors shall be liable for any loss or damage, whether direct, indirect, consequential or otherwise, suffered
by the Cedent howsoever arising in connection with this Agreement, whether that loss or damage arises as a result of a breach of contract (whether total, fundamental or otherwise), delict, negligence or any other cause and whether this Agreement has
been terminated or not, other than as a result of the gross negligence or wilful misconduct of the Debt Guarantor or such Finance Party. 

  

	15.2.	The Cedent agrees to indemnify (and keep indemnified) and hold harmless the Debt Guarantor and each Finance Party and their respective officers, trustees, agents, beneficiaries, employees and advisors against any and
all losses, claims, damages or liabilities, to which they may become subject under or in connection with this Agreement, and agrees to reimburse the Debt Guarantor or Finance Party for any legal or other expenses reasonably incurred by it in
connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Cedent will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of the gross
negligence or wilful misconduct of the Debt Guarantor or any Finance Party. 

  

	16.	FURTHER CESSIONS 

 The Cedent shall not grant any further cessions of the Ceded Rights
or otherwise encumber them without the prior written consent of the Debt Guarantor. 
  

	17.	CERTIFICATE OF INDEBTEDNESS 

 A certificate signed by a manager of the Debt Guarantor
(whose appointment need not be proved) as to the existence of and the amount of indebtedness by the Cedent to the Debt Guarantor, that such amount is due and payable, the amount of interest accrued thereon and as to any other fact, matter or thing
related to the Cedent’s indebtedness under the Finance Documents shall be prima facie proof of the contents and correctness thereof for the purposes of provisional sentence, summary judgment or any other proceedings, shall be valid as a
liquid document for such purpose and shall, in addition, be prima facie proof for purposes of pleading or trial in any action instituted against the Cedent arising herefrom. 

 

	18.	RENUNCIATION OF BENEFITS 

 The Cedent hereby renounces the legal benefits and exceptions
of excussion, division, non numeratae pecuniae, non causa debiti, revision of accounts and errore calculi, the Cedent declaring itself to be fully acquainted with the full meaning and effect of this renunciation. 

  
 - 13 - 

	19.	STIPULATION 

 The provisions of this Agreement which are stipulated for the benefit of
the Finance Parties (or any of them) or any of the other persons referred to in Clause 15 (Exemption from Liability) shall be capable of acceptance at any time without notice to any person. 

 

	20.	FREEDOM OF CHOICE 

  

	20.1.	The Cedent confirms, in respect of all Insurance Policies required to be maintained by it under the Finance Documents, that it is aware and fully appraised of the following choices it has under section 43 of the
Short-term Insurance Act, 1998 (the Short-term Insurance Act): 

  

	20.1.1.	a choice of entering into a new policy contract, making available an existing policy contract or using a combination of those options; and 

 

	20.1.2.	if a new policy is to be entered into: 

  

	20.1.2.1.	as to the insurer and the person (if any) who is to render services as intermediary in connection with the transaction; and 

  

	20.1.3.	as to whether or not the value of the policy together with the value of any other policy which is also to be made available, shall exceed the value of the interest of the Debt Guarantor; and 

 

	20.1.4.	if an existing policy or policies are to be made available: 

  

	20.1.4.1.	as to the person (if any) who is to render services as intermediary in connection with the transaction; and 

  

	20.1.4.2.	as to whether or not a variation of the policy required for that purpose shall be such as to cause the value of the policy benefits to be provided thereunder, when taken in the aggregate with the value of the policy
benefits provided under any other policy which is also to be made available and used for that purpose, to exceed the value of the interests of the Debt Guarantor; 

 

	20.2.	This Clause 20 constitutes written notification to the Cedent of its rights under section 43 of the Short-term Insurance Act. Regardless of the sequence in which the Finance Documents are executed, no benefits under any
policy contract made available to the Finance Parties under a Finance Document shall accrue to the Finance Parties before the Effective Date. 

  

	20.3.	The Cedent confirms that it exercised its freedom of choice under section 43 of the Short-term Insurance Act and that it was not subject to any coercion or inducement as to the manner in which that freedom of choice was
exercised. 

  

	21.	REMEDIES CUMULATIVE 

  

	21.1.	The rights of the Debt Guarantor under this Guarantee: 

  

	21.1.1.	may be exercised as often as necessary; 

  

	21.1.2.	are cumulative and not exclusive of their rights under general law; and 

  
 - 14 - 

	21.1.3.	may be waived only in writing and specifically. 

  

	21.2.	Delay in exercising or non-exercise of any such rights is not a waiver of those rights. 

  

	22.	STIPULATION FOR THE BENEFIT OF DEBT GUARANTOR 

 The provisions of this Guarantee which
confer benefits upon the Debt Guarantor shall constitute stipulations for the benefit of the Debt Guarantor and of any person (escrow) becoming a Debt Guarantor in accordance with the provisions of the Facility Agreement, capable of acceptance at
any time. To the extent that a splitting of claims arises as a result of the provisions of this clause 22, each of the Guarantors hereby consents to such splitting of claims. 
  

	23.	WHOLE AGREEMENT 

  

	23.1.	This Agreement constitutes the whole agreement between the Parties relating to the subject matter hereof. 

  

	23.2.	No: 

  

	23.2.1.	amendment or consensual cancellation of this Agreement, or any provision or term thereof or of any agreement, bill of exchange or other document issued or executed pursuant to or in terms of this Agreement; or

  

	23.2.2.	settlement of any disputes arising under this Agreement; or 

  

	23.2.3.	extension of time, waiver or relaxation or suspension of any of the provisions or terms of this Agreement or of any agreement, bill of exchange or other document issued pursuant to or in terms of this Agreement,

 shall be binding unless recorded in a written document signed by the relevant Parties. Any such extension, waiver or
relaxation or suspension which is given or made shall be strictly construed as relating strictly to the matter in respect of which it was made or given. 
  

	23.3.	No extension of time or waiver or relaxation of any of the provisions or terms of this Agreement or any agreement, bill of exchange or other document issued or executed pursuant to or in terms of this Agreement, shall
operate as an estoppel against any Party in respect of its rights under such agreement or document, nor shall it operate so as to preclude such Party thereafter from exercising its rights strictly in accordance with this Agreement.

  

	23.4.	No Party shall be bound by any express or implied term, representation, warranty, promise or the like not recorded herein, whether it induced the contract and/or whether it was negligent or not. 

  
 - 15 - 

	24.	DOMICILIUM AND NOTICES 

  

	24.1.	Each Party chooses as their domicilium for all purposes under this Agreement, whether in respect of court process, notices or other documents or communications of whatsoever nature, the following addresses:

  

	24.1.1.	the Debt Guarantor: 

  

					
	Physical address		:  		GMG Trust Company
			
					3rd Floor
			
					200 on Main
			
					Cnr Main and Bowwood Roads
			
					Claremont
			
					7708
			
	Telefax		:		+27 (0)86 673 3490
			
	Attention		:		Managing Director

  

	24.1.2.	the Cedent: 

  

					
	Physical address		:  		Ground Floor
			
					138 West Street
			
					Sandton
			
					2146
			
					South Africa
			
	Telefax		:		+27(0)11 301 1840;
			
	Attention		:		Petrus van den Steen;

 or at such other address, not being a post office box, of which the Party concerned may notify the other in
writing. 
  

	24.2.	Any Party may at any time, by notice in writing to the other Parties, change its domicilium to any other address in South Africa which is not a post office box, which change shall become effective 7 (seven)
Business Days after receipt of the relevant notice by the relevant Party. 

  

	24.3.	Any notice given in connection with this Agreement shall, save where a particular form of notice is stipulated, be: 

  

	24.3.1.	delivered by hand; or 

  

	24.3.2.	sent by courier; or 

  

	24.3.3.	sent by telefax (if the domicilium includes a telefax number), 

 to the
domicilium chosen by the Party concerned. 

  
 - 16 - 

	24.4.	A notice given as set out above shall be deemed to have been duly given (unless the contrary is proved): 

  

	24.4.1.	if delivered by hand before 16h30, on the date of delivery, or otherwise the immediately following Business Day; or 

  

	24.4.2.	if sent by courier and delivered before 16h30, on the date of delivery by the courier service concerned, or otherwise the immediately following Business Day; or 

 

	24.4.3.	if sent by telefax, on the expiration of 24 (twenty four) hours after the time of transmission, unless actually received on the date of transmission. 

 

	24.5.	Instructions given to the Cedent must be given in writing but may be given by telefax and/or email, and the Cedent shall not be required to enquire as to the validity of any instruction and shall be entitled to act upon
such instruction accordingly. 

  

	25.	APPLICABLE LAW AND JURISDICTION 

  

	25.1.	This Agreement shall be construed and interpreted in accordance with the laws of South Africa. 

  

	25.2.	The Borrower agrees that any legal action or proceedings arising out of or in connection with this Agreement may be brought against it in the South Gauteng High Court of South Africa, Johannesburg (or any successor to
that court) and irrevocably submit to the non-exclusive jurisdiction of such court. The Borrower irrevocably waives any objection it may now or hereafter have that such action or proceeding has been brought in an inconvenient forum. Nothing herein
shall affect the Debt Guarantor’s right to serve process in any manner permitted by law. 

  

	26.	FEES AND COSTS 

 The Borrower shall, within 3 (three) Business Days of written demand,
pay all legal costs incurred in good faith by the Debt Guarantor in preserving (to the extent that such preservation costs are reasonably, actually and directly incurred) or enforcing any rights against the Borrower in terms of this Agreement. 

 

	27.	SEVERABILITY 

 If at any time any term or provision of this Agreement or the application
thereof to any person or circumstance shall to any extent be or become illegal, invalid or unenforceable under applicable law, the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those
as to which it is already illegal, invalid or unenforceable, shall not be affected or impaired thereby. The Parties agree in such event, and insofar as may be available under applicable law, to substitute valid, legal and enforceable provisions for
the invalid, illegal or unenforceable provisions so as to implement the intention of the Parties hereto to the extent legally possible. 
  

	28.	INDEPENDENT ADVICE 

 The Borrower acknowledges that it has been free to secure
independent legal and other advice as to the nature and effect of all the provisions of this Agreement and that it has either taken such independent legal and other advice or dispensed with the necessity of doing so. Further, the Borrower
acknowledges that all of the provisions of this Agreement and the restrictions herein contained have been negotiated as between it and the Debt Guarantor and are part of the overall intention of the Parties in connection with this Agreement. 

  
 - 17 - 

	29.	SIGNATURE 

  

	29.1.	This Agreement is signed by the Parties on the dates and at the places indicated below. 

  

	29.2.	This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same Agreement as at the date of signature of the Party last signing one
of the counterparts. 

  

	29.3.	The persons signing this Agreement in a representative capacity warrant their authority to do so. 

  

	29.4.	The Parties record that it is not required for this Agreement to be valid and enforceable that a Party shall initial each page of this Agreement and/or have its signature of this Agreement verified by a witness.

 - SIGNATURE PAGES TO FOLLOW - 

  
 - 18 - 

 SIGNED at Sandton on this the 31st day of March 2014. 

 

	
	For and on behalf of
	SOUTHGOLD EXPLORATION
	PROPRIETARY LIMITED
	
	 /s/ P.F. Van Den Steen

	Signatory: P.F. Van Den Steen
	Capacity: BRP
	Who warrants his authority hereto
	
	  

	Signatory:
	Capacity:
	Who warrants his authority hereto

 SIGNED at Cape Town on this the 2nd day of April 2014. 

 

	
	For and on behalf of
	PURPLE RAIN SECURITY SPV (RF)
	PROPRIETARY LIMITED
	
	 /s/ T. Ross-Gillespie

	Signatory: T. Ross-Gillespie
	Capacity: Director
	Who warrants his authority hereto

  
 - 19 - 

 SCHEDULE 1 

NOTICE TO INSURER 
 [To
appear on the letterhead of Cedent] 
  

			
	To:		[Insurance Company]
		
			[insert Address]
		
	And To:		Purple Rain Security SPV (RF) Proprietary Limited
		
			[insert Address]
	
	Date:  [insert]
		
	Dear Sirs		

 CESSION IN SECURITY 
 We
refer to the [description of insurance policy] held by Southgold Exploration Proprietary Limited with yourselves in respect of [insert details] to the value of R[insert] ([insert amount in words] Rand) with policy
number [insert] (the Policy). 
 We confirm that certain financing arrangements have been concluded between ourselves and Credit Suisse AG and
Standard Chartered Bank (collectively, the Lenders). Purple Rain Security SPV (RF) Proprietary Limited (the Debt Guarantor) has provided a debt guarantee to the Lenders in respect of any and all of our indebtedness owing to the Lenders
(the Debt Guarantee). We have subsequently provided the Debt Guarantor with a written counter indemnity in terms of which, inter alia, we have agreed to indemnify the Debt Guarantor from any and all loss which it may suffer or claims
arising against it pursuant to the Debt Guarantee (the Indemnity). As security for the performance of our obligations in terms of the Indemnity, we have concluded a written cession in security agreement with, inter alios, the Debt
Guarantor, pursuant to which we have, subject to the terms and conditions of the financing arrangements between ourselves and the Lenders, ceded in security all of our rights, title and interest in and to, inter alia, the Policy, including
all proceeds accruing in respect of and/or standing to the credit of the Policy (the Security Cession). 
 We confirm that upon receiving a written
request from the Debt Guarantor notifying you of the enforcement of its rights under the Security Cession, you are to pay any and all amounts which would otherwise have been payable to ourselves under the Policy, to the Debt Guarantor, or its
nominee (as specified in such notice). 
 Please acknowledge receipt of this notification by signing the Annexure attached to this letter and returning your
acknowledgement of receipt to ourselves, the Debt Guarantor and the Security Agent at the addresses specified therein. 

  
 - 20 - 

	
	Yours faithfully
	
	  

	For and on behalf of
	Southgold Exploration Proprietary Limited
	Who warrants his/her authority hereto.

  
 - 21 - 

 ANNEXURE TO SCHEDULE 1 

 

					
	From:		[Insurer]		
			
			[insert Address]		
			
	To		Southgold Exploration Proprietary Limited		
			
			[insert Address]		
			
			Attention: [insert]		
			
	And To:		Purple Rain Security SPV (RF) Proprietary Limited		
			
			[insert Address]		
			
	And To:		Credit Suisse AG (as Security Agent)		
			
			[insert Address]		

 Date: [insert] 
 Dear
Sirs 
 ACKNOWLEDGEMENT OF CESSION IN SECURITY 
 We
refer to your letter dated [insert] entitled “Cession in Security”. Terms and expressions used therein shall have the same meaning where used in this letter. 

We confirm receipt of your letter and hereby undertake that upon receipt of written notification from the Debt Guarantor of the enforcement of its rights
under the Security Cession, we shall henceforth pay any and all amounts which would otherwise have been payable to you under the Policy, to the Debt Guarantor. 

We agree that payment to any other party in such circumstances shall not constitute a valid discharge of our payment obligations under the Policy. 

 

	
	Yours faithfully
	
	  

	For and on behalf of
	[Insurer]
	Who warrants his/her authority hereto.

  
 - 22 - 

 SCHEDULE 2 

FORM OF NOTICE TO BANK 
  

			
			[To appear on the letterhead of the Cedent]
		
	To:		[insert relevant bank]
		
			[insert Address]
		
	And To:		Purple Rain Security SPV (RF) Proprietary Limited
		
			[insert address]
		
			Attention: [insert]

 Date: [insert] 
 Dear
Sirs 
 CESSION IN SECURITY 
 We refer to the bank
accounts held by ourselves with you with the following account numbers: 
  

	 	i)	[insert details]; and 

  

	 	ii)	[insert details], 

 (collectively, the Bank Accounts). 

We confirm that certain financing arrangements concluded between ourselves and Credit Suisse AG and Standard Chartered Bank (collectively, the
Lenders). Purple Rain Security SPV (RF) Proprietary Limited (the Debt Guarantor) has provided a debt guarantee to the Lenders in respect of any and all of our indebtedness owing to the Lenders (the Debt Guarantee). We subsequently
provided the Debt Guarantor with a written counter indemnity in terms of which, inter alia, we have agreed to indemnify the Debt Guarantor from any and all loss which it may suffer or claims arising against it pursuant to the Debt Guarantee
(the Indemnity). As security for the performance of our obligations in terms of the Indemnity, we have concluded a written cession in security agreement with, inter alios, the Debt Guarantor, pursuant to which we have ceded in security
all of our rights, title and interest in and to, inter alia, the Bank Accounts, including all proceeds standing to the credit of the Bank Accounts from time to time (the Security Cession). 

We confirm that upon receiving a written request from the Debt Guarantor notifying you of the enforcement of its rights under the Security Cession, you are to
pay any and all amounts which would otherwise have been payable to ourselves under the Bank Accounts, to the Debt Guarantor, or its nominee (as specified in such notice). 

Please acknowledge receipt of this notification by signing the Annexure attached to this letter and returning your acknowledgement of receipt to ourselves,
the Debt Guarantor and the Security Agent at the addresses specified therein. 

  
 - 23 - 

	
	Yours faithfully
	
	  

	For and on behalf of
	Southgold Exploration Proprietary Limited
	Who warrants his/her authority hereto.

  
 - 24 - 

 Annexure to Schedule 2 

[To appear on the letterhead of the relevant bank] 
  

			
		
	From:		[insert relevant bank] 
		
			[insert address]
		
	To:		Southgold Exploration Proprietary Limited
		
			[insert address]
		
	And to:		Purple Rain Security SPV (RF) Proprietary Limited
		
			[insert address]
		
			Attention: [insert]
		
	And to:		Credit Suisse AG (in its capacity as Security Agent) 
		
			[insert address]
		
			Attention: [insert]

 Date: [insert] 
 Dear
Sirs 
 ACKNOWLEDGEMENT OF CESSION IN SECURITY 
 We
refer to your letter dated [insert] entitled “Cession in Security”. Terms and expressions used therein shall have the same meaning where used in this letter. 

We confirm receipt of your letter and hereby undertake that upon receipt of written notification from the Debt Guarantor of the enforcement of its rights
under the Security Cession, we shall act in accordance with the terms of the Security Cession. 
 We agree that payment to any other party in such
circumstances shall not constitute a valid discharge of our payment obligations under the Bank Accounts. 
  

	
	Yours faithfully
	
	  

	 For and on behalf of
 [relevant bank]

Who warrants his/her authority hereto.

  
 - 25 -Exhibit 10.1

 

LIMITED GUARANTEE

 

LIMITED GUARANTEE, dated as of March 22, 2015 (this “Limited Guarantee”), by Welsh, Carson, Anderson & Stowe XII, L.P. and Select Medical Corporation (each, a “Guarantor” and collectively, the “Guarantors”), in favor of Humana Inc., a Delaware corporation (the “Guaranteed Party”).

 

1.                                      GUARANTEE. To induce the Guaranteed Party to enter into that certain Stock Purchase Agreement dated as of the date hereof (the “Purchase Agreement”) by and among MJ Acquisition Corporation, a Delaware corporation (“Buyer”), Concentra Inc., a Delaware corporation (the “Company”) and the Guaranteed Party, pursuant to which, upon the terms and subject to the conditions set forth in the Purchase Agreement, Buyer will purchase from the Guaranteed Party, 100% of the equity interests of the Company (the “Transaction”) (capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement), each Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally guarantees to the Guaranteed Party the due and punctual performance and discharge of its pro rata portion as set forth across from such Guarantor’s name on Exhibit A (“Pro Rata Portion”) of the payment obligations of Buyer to the Guaranteed Party (i) under Section 11.3(a) of the Purchase Agreement to pay the Buyer Termination Fee and (ii) under Section 6.15(c) of the Purchase Agreement to pay the Financing Cooperation Obligations, in each case, if, as and when those obligations become payable under the Purchase Agreement (collectively, the “Guaranteed Obligations”); provided, that in no event shall the aggregate liability of a Guarantor hereunder exceed such Guarantor’s Pro Rata Portion of the Guaranteed Obligations (such amount with respect to such Guarantor, the “Cap”), and this Limited Guarantee may not be enforced against a Guarantor without giving effect to the Cap (and to the provisions of Sections 7 and 8 hereof). This Limited Guarantee may be enforced only for the payment of money by each Guarantor up to the Cap.  All payments hereunder shall be made in lawful money of the United States, in immediately available funds. If Buyer fails to discharge any portion of the Guaranteed Obligations when due, upon the Guaranteed Party’s demand each Guarantor’s liability to the Guaranteed Party hereunder in respect of such portion of the Guaranteed Obligations (up to the Cap) shall become immediately due and payable, and the Guaranteed Party may at any time and from time to time, at the Guaranteed Party’s option, and so long as Buyer has failed to discharge the Guaranteed Obligations, take any and all actions available hereunder to collect such Guarantor’s liabilities hereunder in respect of such Guaranteed Obligations, subject to the Cap. In furtherance of the foregoing, each Guarantor acknowledges that the Guaranteed Party may, in its sole discretion, bring and prosecute a separate action or actions against each Guarantor for such Guarantor’s Pro Rata Portion of the unsatisfied Guaranteed Obligations (subject to the Cap), regardless of whether any such action is brought against Buyer or whether Buyer is joined in any such action or actions.

 

For the avoidance of doubt, any Guarantor may satisfy any or all of its Pro Rata Portion of the Guaranteed Obligations (subject to the Cap) with a direct payment to the Guaranteed Party and in no event will such Guarantor have any obligation to contribute such amount to the capital of Buyer, and such direct payment will be considered as satisfaction (to the extent of such payment) of Buyer’s obligations under Section 11.3 of

 

 

the Purchase Agreement and of such Guarantor’s obligations under this Limited Guarantee.

 

2.                                      NATURE OF GUARANTEE. Each Guarantor’s liability hereunder is absolute, unconditional, irrevocable and continuing irrespective of any modification, amendment or waiver of or any consent to departure from the Purchase Agreement that may be agreed to by the parties to the Purchase Agreement in accordance with the terms of the Purchase Agreement. Without limiting the foregoing, the Guaranteed Party shall not be obligated to file any claim relating to the Guaranteed Obligations in the event that Buyer becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Guaranteed Party to so file shall not affect each Guarantor’s obligations hereunder. This Limited Guarantee is a guarantee of payment and not of collection. In the event that any payment to the Guaranteed Party in respect of any Guaranteed Obligations is rescinded or must otherwise be returned to Buyer or a Guarantor for any reason whatsoever, a Guarantor shall remain liable hereunder with respect to its Pro Rata Portion of the unpaid Guaranteed Obligations (subject to the terms and conditions hereof, including the Cap) as if such payment had not been made (it being agreed that if such payment is returned to a Guarantor, the other Guarantor shall have no liability with respect to such payment).

 

3.                                      CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. Each Guarantor agrees that the Guaranteed Party may, in its sole discretion, at any time and from time to time, without notice to or further consent of such Guarantor, extend the time of payment of any of the Guaranteed Obligations, and may also enter into any agreement with Buyer for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, without in any way impairing or affecting such Guarantor’s obligations under this Limited Guarantee or affecting the validity or enforceability of this Limited Guarantee. Subject to termination of this Limited Guarantee as provided herein, each Guarantor agrees that the obligations of such Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by: (a) the failure or delay on the part of the Guaranteed Party to assert any claim or demand or to enforce any right or remedy against Buyer or such Guarantor; (b) any change in the time, place or manner of payment of any of the Guaranteed Obligations, or any waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Purchase Agreement made in accordance with the terms thereof; (c) any change in the legal existence, structure or ownership of Buyer or any other Person now or hereafter liable with respect to the Guaranteed Obligations or otherwise interested in the transactions contemplated by the Purchase Agreement; (d) any insolvency, bankruptcy, reorganization or other similar proceeding instituted by or against Buyer or any other Person now or hereafter liable with respect to the Guaranteed Obligations; (e) the existence of any claim, set-off or other right which any Guarantor may have at any time against Buyer, the other Guarantor or Seller or any of their respective Affiliates, whether in connection with the Obligations or otherwise; (f) the adequacy or potential adequacy of any alternative means the Guaranteed Party may have of obtaining payment related to the Guaranteed Obligations, and all suretyship defenses generally (other than fraud or willful misconduct by Seller, defenses to the payment of the Guaranteed Obligations that are available to Buyer under the Purchase Agreement or breach by Seller of this Agreement, each of the

 

 

foregoing defenses being retained by the Guarantors) or (g) any lack of validity or enforceability of the Purchase Agreement or any agreement or instrument relating thereto. Each Guarantor waives promptness, diligence, notice of the acceptance of this Limited Guarantee and of the Guaranteed Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Guaranteed Obligations incurred and all other notices of any kind (other than notices to Buyer pursuant to the Purchase Agreement), all defenses which may be available by virtue of any stay, moratorium or other similar Law now or hereafter in effect or any right to require the marshaling of assets of Buyer or any other Person now or hereafter liable with respect to the Guaranteed Obligations. Each Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Purchase Agreement and that the waivers set forth in this Limited Guarantee are knowingly made in contemplation of such benefits.

 

Each Guarantor hereby unconditionally waives any rights that it may now have or hereafter acquire against Buyer that arise from the existence, payment, performance, or enforcement of such Guarantor’s obligations under or in respect of this Limited Guarantee, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Guaranteed Party against Buyer, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Buyer, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, and such Guarantor shall not exercise any such rights in each case unless and until the Guaranteed Obligations (which shall be subject to the Cap) shall have been indefeasibly paid in full. If any amount shall be paid to such Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full of the Guaranteed Obligations (which shall be subject to the Cap), such amount shall be received and held in trust for the benefit of the Guaranteed Party, shall be segregated from other property and funds of such Guarantor and shall forthwith be promptly paid or delivered to the Guaranteed Party in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to payment of the Guaranteed Obligations until they are paid in full (subject to the Cap).

 

Notwithstanding anything to the contrary contained in this Limited Guarantee or otherwise, the Guaranteed Party hereby agrees that, in addition to any defenses of each Guarantor on the basis of a breach of this Limited Guarantee, each Guarantor shall have all defenses to the payment of its obligations under this Limited Guarantee (which in any event shall be subject to the Cap) that would be available to Buyer or any assignee in respect of the Purchase Agreement with respect to the Guaranteed Obligations (other than bankruptcy or other inability to pay the Guaranteed Obligations of Buyer).

 

4.                                      REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby represents and warrants that:

 

(a)                                 it has all requisite power and authority to execute, deliver and perform this Limited Guarantee and the execution, delivery and performance of this Limited Guarantee have been duly authorized by all necessary action and do not contravene any

 

 

provision of such Guarantor’s organizational documents or any Law, decree, order, judgment or contractual restriction binding on such Guarantor or its assets;

 

(b)                                 all consents, approvals or authorizations of, and all filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by such Guarantor have been obtained or made and all conditions thereof have been duly complied with in all material respects by such Guarantor, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee by such Guarantor;

 

(c)                                  assuming due execution and delivery of the Purchase Agreement by all parties thereto (other than Buyer) and of this Limited Guarantee by the Guaranteed Party, this Limited Guarantee constitutes a legal, valid and binding obligation of such Guarantor enforceable against such Guarantor in accordance with its terms, subject to bankruptcy, insolvency, reorganization and other Laws of general applicability relating to or affecting creditors’ rights and to general equity principles; and

 

(d)                                 such Guarantor has the financial capacity to pay and perform its obligations under this Limited Guarantee, and all funds necessary for such Guarantor to fulfill its obligations under this Limited Guarantee shall be available to such Guarantor for so long as this Limited Guarantee shall remain in effect in accordance with Section 7  hereof.

 

The Guaranteed Party hereby represents and warrants that:

 

(a)                                                                                 it has all requisite corporate or other power and authority to execute, deliver and perform this Limited Guarantee, and the execution, delivery and performance of this Limited Guarantee have been duly authorized by all necessary action and do not contravene any provision of the Guaranteed Party’s organizational documents or any Law, decree, order, judgment or contractual restriction applicable to or binding on the Guaranteed Party or its assets;

 

(b)                                                                                 all consents, approvals or authorizations of, and all filings with and notifications, to any governmental authority necessary for the due execution, delivery and performance of this Limited Guarantee by the Guaranteed Party have been obtained or made and all conditions thereof have been duly complied with in all material respects by the Guaranteed Party, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Limited Guarantee by the Guaranteed Party; and

 

(c)                                                                                  assuming due execution and delivery of the Purchase Agreement by all parties thereto (other than the Guaranteed Party and any of its Affiliates party thereto) and of this Guarantee by the Guarantor, this Limited Guarantee constitutes a legal, valid and binding obligation of the Guaranteed Party enforceable against the Guaranteed Party in accordance with its terms, subject to bankruptcy, insolvency, reorganization and other Laws of general applicability relating to or affecting creditors’ rights and to general equity principles.

 

 

5.                                      NO ASSIGNMENT. Neither the Guarantors nor the Guaranteed Party may assign, transfer or delegate its rights, interests or obligations under or in connection with this Limited Guarantee, in whole or in part, to any other Person without the prior written consent of the Guaranteed Party (in the case of an assignment, transfer or delegation by any Guarantor)  or each Guarantor (in the case of an assignment, transfer or delegation by the Guaranteed Party) and any purported assignment, transfer or delegation without such consent shall be null and void; provided, however, that each Guarantor may assign, transfer or delegate on a secondary basis all or part of its rights, interests and obligations hereunder, without the prior written consent of the Guaranteed Party, to any Affiliate (other than Buyer) to which it has allocated all or a portion of its investment commitment to Buyer; provided, further, that no such assignment, transfer or delegation shall relieve such Guarantor of its obligations hereunder as a primary obligor.

 

6.                                      NOTICES. Any notice, request, instruction or other communication to be given hereunder by any party hereto to the other shall be in writing and delivered personally or sent by overnight courier, delivery fees prepaid, by pdf delivered via email or by facsimile:

 

if to :

Select Medical Corporation

4717 Gettysburg Road

Mechanicsburg, PA 17088

Attention: Michael E. Tarvin

Facsimile: (717) 412-9142

Email: mtarvin@selectmedical.com

 

with a copy (which shall not constitute notice) to

 

Dechert LLP

Cira Centre

2929 Arch Street

Philadelphia, PA 19104

Attn.: Stephen M. Leitzell, Esq.

Facsimile: (215) 994-2222

Email: stephen.leitzell@dechert.com

 

if to Welsh, Carson, Anderson & Stowe XII, L.P.:

 

Welsh Carson Anderson & Stowe

320 Park Avenue

New York, NY 10022

Attn: Jonathan M. Rather

Facsimile: (212) 893-9575

Email: jrather@welshcarson.com

 

and if to the Guaranteed Party, as provided in the Purchase Agreement (or, in each case, to such other Persons or addresses as may be designated in writing by the party hereto to receive such notice as provided above). Any notice, request, instruction or other communication delivered or required to be delivered or permitted to be provided

 

 

hereunder shall be deemed given to the receiving party (a) upon actual receipt, if delivered personally, (b) on the next Business Day after deposit with an overnight courier, if sent by an overnight courier, delivery fees prepaid, (c) upon confirmation of successful transmission if sent by facsimile, or (d) when sent by email (provided, that, if given by facsimile or email, such notice, request, instruction or other document shall be followed up within one (1) Business Day by dispatch pursuant to one of the other methods described herein).

 

7.                                      CONTINUING GUARANTEE. Unless terminated pursuant to this Section 7, this Limited Guarantee may not be revoked or terminated and shall remain in full force and effect until the Guaranteed Obligations have been indefeasibly paid in full (subject to the Cap). Notwithstanding the foregoing, or anything express or implied in this Limited Guarantee or otherwise, this Limited Guarantee shall terminate and each Guarantor shall have no further obligations under or in connection with this Limited Guarantee as of the earliest of: (a) the Closing, if the Closing occurs; (b) valid termination of the Purchase Agreement in accordance with its terms in circumstances where the Buyer Termination Fee or any other Guaranteed Obligations are not payable (it being agreed that if the Buyer Termination Fee is not payable in accordance with the Purchase Agreement, the Guaranteed Obligations shall not exceed the Financing Cooperation Obligations pursuant to Section 1 hereof) and (c) the twelve (12) month anniversary after the date hereof (unless, in the case of clauses (b) and (c) above the Guaranteed Party shall have commenced litigation against any Guarantor under and pursuant to this Limited Guarantee prior to the twelve (12) month anniversary after the date hereof, in which case this Limited Guarantee shall terminate only upon the final, non-appealable resolution of such action and satisfaction by such Guarantor(s) of any obligations finally determined or agreed to be owed by such Guarantor(s), consistent with the terms hereof).

 

Notwithstanding the foregoing, or anything express or implied in this Limited Guarantee or otherwise, in the event that the Guaranteed Party or any of its Subsidiaries, or any Person claiming by, through or on behalf of any of them, asserts in any litigation or other proceeding any of the following: (i) that the provisions of Section 1 hereof limiting each Guarantor’s liability to the Cap or the provisions of this Section 7 or Section 8 hereof are illegal, invalid or unenforceable in whole or in part, (ii) that the Guarantors are liable in respect of the Guaranteed Obligations in excess of or to a greater extent than the Cap, or (iii) any theory of liability (whether at law or in equity whether sounding in contract, tort, statute or otherwise) against any Buyer Related Party (as defined in Section 8 hereof) with respect to this Limited Guarantee, the equity commitment letter by and between the Guarantors and Buyer, dated as of the date hereof (the “Equity Commitment Letter”), the Purchase Agreement, or any other agreement or instrument delivered in connection with this Limited Guarantee, the Equity Commitment Letter, the Purchase Agreement or any of the transactions contemplated hereby or thereby, in each case, other than Retained Claims (as defined in Section 8) asserted by the Guaranteed Party against the Buyer Related Party(ies) against which such Retained Claims may be asserted pursuant to Section 8, then: (x) the obligations of each Guarantor under or in connection with this Limited Guarantee shall terminate ab initio and be null and void; (y) if any Guarantor has previously made any payments under or in connection with this Limited Guarantee, such Guarantor shall be entitled to recover and retain such payments; and (z) neither the Guarantors nor any other Buyer Related Parties shall have any liability

 

 

whatsoever (whether at law or in equity, whether sounding in contract, tort, statute or otherwise) to the Guaranteed Party or any other Person in any way under or in connection with this Limited Guarantee, the Equity Commitment Letter, the Purchase Agreement, or any other agreement or instrument delivered in connection with this Limited Guarantee, the Purchase Agreement or the transactions contemplated hereby or thereby.

 

8.                                      NO RECOURSE. The Guaranteed Party acknowledges the separate corporate existence of Buyer. The Guaranteed Party acknowledges and agrees that the sole asset of Buyer is cash in a de minimis amount and its rights under the Purchase Agreement and that no additional funds are expected to be contributed to Buyer unless and until the Closing occurs pursuant to the Purchase Agreement. Notwithstanding anything that may be expressed or implied in this Limited Guarantee, the Purchase Agreement, the Equity Commitment Letter or the Confidentiality Agreement (collectively, the “Transaction Agreements”), or any other agreement or instrument delivered in connection herewith or therewith, or any statement made, information provided or action taken in connection with the transactions contemplated by any of the Transaction Agreements or breach of any Transaction Agreement (this Limited Guarantee, the other Transaction Agreements and such agreements, instruments, statements, information, actions, transactions, negotiations, breaches and other matters collectively, “Transaction-Related Matters”), and notwithstanding any equitable, common law or statutory right or claim that may be available to the Guaranteed Party or any of its Affiliates, and notwithstanding the fact that each Guarantor may be a partnership, by its acceptance of the benefits of this Limited Guarantee, the Guaranteed Party covenants, acknowledges and agrees, on behalf of itself and its Affiliates and stockholders, and any Person claiming by, through or on behalf of any of them, that:

 

(a)                                 no Buyer Related Party has or shall have any obligations (whether of an equitable, contractual, tort, statutory or other nature) arising under or relating to any Transaction Related Matter, other than (i) Buyer’s obligation to make a payment of the Buyer Termination Fee to the Guaranteed Party under and pursuant to Section 11.3(a) of the Purchase Agreement and Buyer’s obligation to pay the Financing Cooperation Obligations pursuant to Section 6.15(c) of the Purchase Agreement, and, without duplication, each Guarantor’s obligation to guarantee such payment of the Guaranteed Obligations pursuant to the terms of this Limited Guarantee (subject to the Cap) and to otherwise comply with the terms of this Limited Guarantee, (ii) without duplication of the obligations referenced in clause (i) above, the other obligations of Buyer to perform its obligations under the Transaction Agreements to which it is a party, on the terms and subject to the conditions thereof including any limitations of remedies under the Transaction Agreements, (iii) each Guarantor’s obligation to Buyer to specifically perform its agreement to make an equity contribution to Buyer pursuant to the Equity Commitment Letter on the terms and subject to the conditions thereof and (iv) certain Buyer Related Parties’ obligations under, and pursuant to the terms of, the Confidentiality Agreement (the specific claims described in clauses (i) through (iv) in each case against the Person or Persons specified in such clause being referred to herein, collectively, as the “Retained Claims”);

 

(b)                                 no recourse (whether under an equitable, contractual, tort, statutory or other claim or theory) under any Transaction-Related Matter shall be sought or

 

 

had against (and, without limiting the generality of the foregoing, no liability shall attach to) any Buyer Related Party, whether through Buyer or any other Person interested in the transactions contemplated by any Transaction Agreement or otherwise, whether by or through theories of equity, agency, control, instrumentality, alter ego, domination, sham, single business enterprise, piercing the veil, unfairness, undercapitalization, or any other attempt to avoid or disregard the entity form of any Buyer Related Party, by or through a claim by or on behalf of the Guaranteed Party or any of its Subsidiaries (nor does the Guaranteed Party intend that any other securityholder of the Guaranteed Party will have any such rights), by the enforcement of any assessment, by any legal or equitable proceeding, by virtue of any applicable Law, or otherwise against any Buyer Related Party, except, in each case, for Retained Claims in accordance with their respective terms; provided, however, that in the event any Guarantor (i) consolidates with or merges with any other Person and is not the continuing or surviving entity of such consolidation or merger or (ii) transfers or conveys all or a substantial portion of its properties and other assets to any Person such that the sum of such Guarantor’s remaining net assets plus uncalled capital is less than the Cap, then Seller may seek recourse, whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding or by virtue of any statute, regulation or other applicable Law, against such continuing or surviving entity or such transferee Person, as the case may be, but only to the extent of the obligations of such Guarantor hereunder and subject to the limitations herein (including the Cap); and

 

(c)                                  neither the Guaranteed Party nor any of its Affiliates or stockholders has relied on any statement, representation or warranty or assurance made by, or any action taken by, any Person in connection with a Transaction-Related Matter, other than those made by (i) each Guarantor in this Limited Guarantee and/or the Equity Commitment Letter and (ii) Buyer in the Transaction Agreements to which it is a Party.

 

The Retained Claims, in each case in accordance with their respective terms, shall be the sole and exclusive remedy (whether at law or in equity, whether sounding in contract, tort, statute or otherwise) of the Guaranteed Party and its Subsidiaries against any or all of the Buyer Related Parties, in respect of any claims, liabilities or obligations arising in any way under or relating in any way to any Transaction-Related Matter, and shall in all events be subject to Section 11.3 of the Purchase Agreement.

 

As used herein, the terms “Buyer Related Party” or “Buyer Related Parties” means each Guarantor and any and all former, current or future direct or indirect holders of any equity, general or limited partnership or limited liability company interests, controlling persons, incorporators, directors, officers, employees, agents, attorneys, members, managers, management companies, portfolio companies, general or limited partners, stockholders, representatives, assignees or Affiliates of such Guarantor (including but not limited to Buyer) and any and all former, current or future direct or indirect holders of any equity, general or limited partnership or limited liability company interests, controlling persons, incorporators, directors, officers, employees, agents, attorneys, members, managers, management companies, portfolio companies, general or limited partners, stockholders, representatives, assignees or Affiliates of any of the

 

 

foregoing, and any and all former, current or future direct or indirect heirs, executors, administrators, trustees, representatives, successors, assigns or agents of any of the foregoing, and the Financing Sources and the Financing Parties.

 

For the avoidance of doubt, nothing herein is intended or shall be construed to affect the rights of Buyer or each Guarantor against any Financing Source.

 

9.                                      GOVERNING LAW; JURISDICTION. THIS LIMITED GUARANTEE, THE RIGHTS OF THE PARTIES UNDER OR IN CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATED TO ANY OF THE FOREGOING, SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THAT OTHERWISE MIGHT CAUSE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION. Each party hereto agrees that it shall bring, maintain and defend any such action or proceeding exclusively in the State of New York, New York County, or if but only if such Court does not have subject matter jurisdiction, the state or federal courts of the State of New York (as just described, the “Chosen Courts”), and solely in connection with such actions or proceedings: (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts; (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts; (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party hereto; and (iv) agrees that service of process upon such party in any such action or proceeding shall be effective if effected pursuant to the Laws of the State of New York or in accordance with Section 6 of this Limited Guarantee (other than by facsimile or email transmission). Notwithstanding the immediately preceding sentence, a party may commence any action in a court other than the Chosen Courts solely for the purpose of enforcing an order or judgment issued by any Chosen Court.

 

10.                               WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY ACTION OR PROCEEDING CONTEMPLATED BY SECTION 9  HEREOF IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF SUCH ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER; (ii) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (iii) IT MAKES THIS WAIVER VOLUNTARILY; AND (iv) IT HAS BEEN INDUCED TO ENTER INTO THIS LIMITED GUARANTEE BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10. A COPY OF THIS PROVISION MAY BE FILED WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT IRREVOCABLY TO WAIVE THE RIGHT TO TRIAL BY JURY IN ANY SUCH ACTION AND THAT ANY SUCH ACTION WILL INSTEAD BE

 

 

TRIED BY A JUDGE SITTING WITHOUT A JURY.

 

11.                               COUNTERPARTS. This Limited Guarantee shall not be effective until it has been executed and delivered by all parties hereto. This Limited Guarantee may be executed by facsimile or electronic transmission in pdf format, and in one or more counterparts, and by the different parties hereto 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.

 

12.                               THIRD PARTY BENEFICIARIES. This Limited Guarantee shall be binding upon, inure solely to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns, and nothing express or implied in this Limited Guarantee is intended to, or shall, confer upon any other Person any benefits, rights or remedies under or by reason of, or any rights to enforce or cause the Guaranteed Party to enforce, the obligations set forth herein; except that as a material aspect of this Limited Guarantee the parties intend that all Buyer Related Parties other than each Guarantor shall be, and such Buyer Related Parties are, intended third party beneficiaries of this Limited Guarantee who may rely on and enforce the provisions of this Limited Guarantee that bar the liability, or otherwise protect the interests, of such Buyer Related Parties.

 

13.                               CONFIDENTIALITY. This Limited Guarantee shall be treated as confidential and is being provided to the Guaranteed Party solely in connection with the transactions contemplated by the Transaction Agreements. This Limited Guarantee may not be used, circulated, quoted or otherwise referred to in any document, except with the written consent of each Guarantor and the Guaranteed Party; provided that no such written consent is required for any disclosure of the existence or content of this Limited Guarantee by the Guaranteed Party or a Guarantor: (a) to its Affiliates and its representatives; or (b) to the extent required by Law or required in connection with the enforcement of rights under this Guarantee and the Purchase Agreement.

 

14.                               MISCELLANEOUS.

 

(a)                                 This Limited Guarantee (together with the Equity Commitment Letter and the Purchase Agreement) constitutes the entire agreement with respect to the subject matter hereof and supersedes any and all prior discussions, negotiations, proposals, undertakings, understandings and agreements, whether written or oral, among each Guarantor or any of their respective Affiliates, on the one hand, and the Guaranteed Party or any of its Affiliates or stockholders, on the other hand. No amendment, supplementation, modification or waiver of this Limited Guarantee or any provision hereof shall be enforceable unless approved by the Guaranteed Party and each Guarantor in writing.

 

(b)                                 Any term or provision of this Limited Guarantee that is invalid or unenforceable in any jurisdiction shall be, as to such jurisdiction, ineffective solely to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction; provided, however, that this Limited Guarantee may not be enforced without giving effect to the

 

 

limitation of the amount payable by the Guarantors hereunder to the Cap provided in Section 1 hereof and to the provisions of Sections 7 and 8 hereof. Each party hereto covenants and agrees that it shall not assert, and shall cause its respective Affiliates and representatives not to assert, that this Limited Guarantee or any part hereof is invalid, illegal or unenforceable in accordance with its terms.

 

(c)                                  The descriptive headings herein are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Limited Guarantee.

 

(d)                                 All parties acknowledge that each party and its counsel have reviewed this Limited Guarantee and that any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Limited Guarantee.

 

[Remainder of page intentionally left blank]

 

 

IN WITNESS WHEREOF, each of the Guarantors and the Guaranteed Party has caused this Limited Guarantee to be executed and delivered as of the date first written above by its officer or representative thereunto duly authorized.

 

	
 
    	
SELECT   MEDICAL CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Martin F. Jackson
    
	
 
    	
Name:
    	
Martin   F. Jackson
    
	
 
    	
Title:
    	
Executive   Vice President and Chief Financial Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
WELSH,   CARSON, ANDERSON & STOWE XII, L.P.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   D. Scott Mackesy
    
	
 
    	
Name:
    	
D.   Scott Mackesy
    
	
 
    	
Title:
    	
Managing   Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
HUMANA   INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian A. Kane
    
	
 
    	
Name:
    	
Brian   A. Kane
    
	
 
    	
Title:
    	
Senior   Vice President & Chief Financial Officer
    

 

[LIMITED GUARANTEE SIGNATURE PAGE]

 

 

Exhibit A

 

	
Guarantors
    	
 
    	
 
    	
 
    
	
SELECT MEDICAL CORPORATION
    	
 
    	
50.1
    	
%
    
	
WELSH, CARSON, ANDERSON & STOWE XII, L.P.
    	
 
    	
49.9
    	
%
    
	
TOTAL
    	
 
    	
100
    	
%

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