Document:

PATENT AND KNOW-HOW LICENSE AGREEMENT

 

Exhibit 4(l)

PATENT AND KNOW-HOW LICENSE AGREEMENT

     THIS AGREEMENT, effective the 5 day of August, 1995, is made by and
between:

	 	 	SHERRITT INC., an Ontario Corporation, having a business office
at Fort Saskatchewan, Alberta, Canada (hereinafter called
“Sherritt”);

and

	 	 	LIHIR MANAGEMENT COMPANY PTY LTD, a company
incorporated in Papua New Guinea (hereinafter called “LMC”),
for and on behalf of LIHIR GOLD LIMITED, a company
incorporated in Papua New Guinea (hereinafter call “LGL”).

     WITNESSETH:

     WHEREAS Sherritt possesses designs, inventions (both patented and
unpatented), technical experience, data and other valuable information and
Know-how (as hereinafter defined) relating to processes, methods and apparatus
for the pressure oxidation treatment of ores, concentrates and other metal
bearing material, including gold bearing ores and concentrates, for recovery of
metal and non-metal values; and

     WHEREAS LMC as manager for LGL desires to obtain a right and license to
use confidential and proprietary Pressure Oxidation Technology (as hereinafter
defined) to recover gold and silver values from ore and/or concentrate from the
property on Lihir Island in Papua New Guinea shortly to be acquired by LGL from
the Lihir Joint Venture (the “Site”), and may wish to install a plant based on
all or part of this Technology at the site (the “Project”), and Sherritt is
willing to grant such right and license to LMC; and

     WHEREAS LMC or a predecessor company for and on behalf of the Lihir
Joint Venture has made an initial payment to Sherritt of US$ 332,342.00, and
Sherritt has disclosed certain information regarding the Know-how to LMC.

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     NOW, THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the
mutual covenants herein contained and for other valuable consideration,
including payment made by LMC or by a predecessor company for and on behalf of
the Lihir Joint Venture, and disclosure made by Sherritt prior the execution of
this Agreement, the parties hereto agree as follows:

ARTICLE 1

Definitions

1.01 The “Plant” means a facility at the Site utilizing the Pressure Oxidation
Technology.

1.02 “Plant Process” means the process for recovering gold (and obtaining silver
and other by-products) from Gold Bearing Materials by application of the
Pressure Oxidation Technology alone or in combination with other process steps.
The block flow diagram shown in Figure 1 of Appendix 1 attached hereto
illustrates one embodiment of the Plant Process licensed under this agreement.

1.03 “Gold Bearing Material” means gold ore, concentrate, or other gold bearing
material which is of economic value primarily on account of its gold and silver
contents.

1.04 “Pressure Oxidation Technology” means the treatment of Gold Bearing
Material by use of proprietary Sherritt methods which include the following
operations:

	a)   making up of aqueous slurry of Gold Bearing Material and feeding
said slurry into a pressure vessel with or without pretreatment to
improve the amenability of the material to pressure oxidation;

	 
	b)   pressure oxidizing said slurry of Gold Bearing Material in an
aqueous sulphuric acid solution in one or more stages to oxidize the
sulphidic minerals at least in part to liberate gold and silver;

	 
	c)   discharging the pressure oxidized slurry from the pressure vessel;
and

	 
	d)   washing and conditioning said discharged pressure oxidized slurry
for subsequent treatment for recovery of gold and silver therefrom,
preferably by cyanidation.

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1.05 “Sherritt Patent Rights” means those patents and patent applications, both
Canadian and foreign, listed in Appendix 2 and/or all other patents and patent
applications now or subsequently owned or controlled by Sherritt or under which
Sherritt has licensing rights and which would necessarily be infringed by the
design, construction, operation or maintenance of the Plant or the sale of
products therefrom.

1.06 “Invention” shall mean any original development, design, improvement,
discovery, concept or idea, which is not generally available to the public
through publications or other sources, and includes but is not limited to
processes, methods, apparatus, compositions of matter, formulae, and techniques
which are, or could be useful in the practice of the Pressure Oxidation
Technology.

1.07 “Know-how” means Sherritt technical information, whether or not reduced to
writing, whether patented, patentable or unpatentable, concerning the Pressure
Oxidation Technology and its commercial application, including any information
which is or could be useful in the design, engineering, construction, operation
and maintenance of the Plant.

1.08 “Tonne” shall mean a metric ton of 2,204.62 pounds avoirdupois.

1.09 “Date of Commencement of Operations” shall mean the date upon which Gold
Bearing Material has first been introduced into an Autoclave in the Plant.

1.10 “Pressure Oxidation Circuit” means that portion of the Plant wherein the
Pressure Oxidation Technology is employed.

1.11 “Basic License Fee” has the meaning specified in Articles 4.01, 4.02 and
4.03 of this Agreement.

1.12 “Capacity Fee” has the meaning specified in Articles 4.03 and 4.04 of this
Agreement.

1.13 The term “Supplemental Capacity Fee” shall have the meaning specified in
Article 4.05 of this Agreement.

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1.14 The term “Dollar” and the symbol “$” means United States dollars unless the
contrary is specifically stated.

1.15 “Process Engineering Document” means the Sherritt report which will include
the process description, process design criteria, process flowsheets, mass and
heat balances and preliminary process control philosophy diagrams concerning the
Pressure Oxidation Circuit.

1.16 “Decision to Proceed with the Project” means the point when LGL issues its
securities to the public at the completion of its initial public offering.

1.17 “Autoclave” means a pressurized vessel in which step (b) as defined in
Article 1.04 of the Pressure Oxidation Technology is performed.

ARTICLE 2

Disclosure of Know-How

2.01 Sherritt shall, from time to time, and to such extent that is reasonably
necessary for the performance of this Agreement, furnish to LMC, Know-how
existing at date of this Agreement or acquired by Sherritt up to the Date of
Commencement of Operations which is or could be useful in the design,
engineering, procurement, construction, start-up and operation of the Plant, and
which Sherritt has the right to furnish.

2.02 For a period of five (5) years following the Date of Commencement of
Operations, Sherritt shall furnish to LMC, if requested by LMC and at LMC’s
expense, such further Know-how as either party reasonably considers useful in
the operation or maintenance of the Plant and which Sherritt has in its
possession and has the right to furnish to LMC at the time of such request.
Prior to commencement of furnishing such Know-how, Sherritt shall provide LMC
with an estimate of the cost of furnishing such additional Know-how. Such cost
shall include only the actual and reasonable expenses of transferring such
Know-how to LMC.

2.03 For a period of five (5) years following the Date of Commencement of

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Operations, LMC shall furnish to Sherritt at the latter’s request and expense,
information developed solely by LMC and exclusively through the operations at
the Site which would reasonably be considered useful for designing, engineering,
procuring, construction and operating the Pressure Oxidation Technology other
than that information relating to equipment not specific to Pressure Oxidation
Technology and process control. Prior to commencement of furnishing such
information, LMC shall provide Sherritt with an estimate of the cost of
furnishing such additional information. Such cost shall include only the actual
and reasonable expenses of transferring such Know-how to Sherritt.

2.04 Sherritt agrees that during the period ending five (5) years from the Date
of Commencement of Operations, it shall permit LMC to inspect, upon reasonable
notice to Sherritt, at reasonable times and at LMC’s own risk and expense, any
portions of the Sherritt plant at Fort Saskatchewan and any other operation or
plant which Sherritt has the right to allow LMC to inspect which pertains to the
Pressure Oxidation Technology. Access to the Sherritt plant and other operation
or plant shall be subject to the reasonable convenience of Sherritt and subject
to the terms and conditions then in effect and determined at the sole discretion
of Sherritt, which may include the signing by visitors of a secrecy agreement
and a waiver of personal liability, restriction of movement within the plant,
observation of all safety rules and regulations promulgated by Sherritt or the
operator of the plant, and continual accompaniment by a Sherritt representative
while at the plant(s). Sherritt reserves the right to limit the total number of
visits and the duration of such visits to any other operation or plant, except
the Fort Saskatchewan plant, by LMC in a given year but in no case shall the
number of allowed visits in a given year be less than two (2) unless mutually
agreed by LMC and Sherritt.

2.05 LMC agrees that, during the period ending five (5) years from the Date of
Commencement of Operations, it shall permit Sherritt, upon reasonable notice to
LMC, to inspect, at reasonable times and at Sherritt’s own risk and expense, any
portions of the Plant and expansions thereof or additions thereto which utilize
the Pressure Oxidation Technology. Access to the Plant shall be subject to the
reasonable convenience of LMC and subject to the terms and conditions then in
effect and determined at the sole discretion

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of LMC, which may include the signing by visitors of a secrecy agreement and a
waiver of personal liability, restriction of movement within the Plant,
observation of all safety rules and regulations promulgated by LMC or the
operator of the Plant, and continual accompaniment by a LMC representative while
at the Plant. LMC reserves the right to limit the total number of visits and the
duration of such visits to the Plant by Sherritt in a given year but in no case
shall the number of allowed visits in a give year be less than two (2) unless
mutually agreed by Sherritt and LMC.

2.06 During the visits referred to in Articles 2.04 and 2.05, the parties shall,
if it is reasonably convenient to do so and subject to the provisions of Article
7, hold discussions and exchange technical information concerning the Pressure
Oxidation Technology and its application in the visitee’s plant(s).

ARTICLE 3

License

     Sherritt hereby grants to LMC in accordance with the terms of this
Agreement a non-exclusive right and license to practice the Inventions covered
by the Sherritt Patent Rights and to utilize Know-how furnished by Sherritt
under this Agreement to design and erect, or have designed and erected for it,
and operate and maintain, or have operated and maintained for it, the Plant and
to use in the Plant the Plant Process, including the right to use, further
process and/or sell anywhere in the world, all products and by-products produced
in the Plant, but not including the right to grant sub-licenses.

ARTICLE 4

Payments for Patent and Know-How License

4.01 In consideration for the right and licenses granted under this Agreement
LMC shall pay to Sherritt a Basic License Fee of One Million Fifty Two Thousand
and Six Hundred Dollars ($1,052,600).

4.02 Subject to the provisions of Article 11.04, the Basic License Fee specified
in Article 4.01 shall be paid as follows:

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	 	 	Basic
	 	Cumulative

	November 5, 1990
	 	$	332,342	 	 	$	332,342	 
	Upon Decision to Proceed
with the Project
	 	 	299,258	 	 	 	631,600	 
	Upon Date of Commencement
of Operations
	 	 	210,500	 	 	 	842,100	 
	One Year From the Date
of Commencement of Operations
	 	 	210,500	 	 	 	1,052,600	 

On November 5, 1990, Kennecott Explorations (Australia) Ltd. (hereinafter
“Kennecott”), predecessor to LMC as Manager of the Lihir Joint Venture paid
$332,342.00 to Sherritt as the first payment of the Basic License Fee.

4.03 The Basic License Fee specified in Articles 4.01 and 4.02 is based on a
Pressure Oxidation Circuit with a design capacity of up to 100,000 tonnes of
sulphide sulphur per annum oxidized in the Autoclave(s) of the Plant (the
“Design Capacity”). When the Design Capacity of the Pressure Oxidation Circuit
is established before the Decision to Proceed with the Project, (the
“Established Design Capacity”), then a Capacity Fee shall be calculated in
accordance with the following formula:

Capacity
Fee ($) = (C - 100,000) x $5.58 (but is never less than zero)

     Where “C” is the Established Design Capacity in tonnes of sulphide
sulphur oxidized in the Autoclave(s) of the Plant.

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4.04 Subject to the provisions of Article 11.04, the Capacity Fee specified in
Article 4.03 shall be paid as follows:

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Cumulative
	 	 	Percentage of	 	Percentage of
	 	 	Capacity Fee
	 	Capacity Fee

	Upon Decision to Proceed
with the Project
	 	 	20	 	 	 	20	 
	Upon Date of Commencement
of Operations
	 	 	40	 	 	 	60	 
	One Year from the Date
of Commencement of Operations
	 	 	40	 	 	 	100	 

4.05 If during the ten year period following the Date of Commencement of
Operations of the Plant, the actual annual tonnage of sulphide sulphur oxidized
in the Autoclave(s) of the Plant exceeds 110% of the Established Design Capacity
“C” used to calculate the Capacity Fee in Articles 4.03 and 4.04, then LMC shall
pay Sherritt a Supplemental Capacity Fee of $5.58 for each tonne of sulphide
sulphur oxidized in the Autoclave(s) of the Plant in any calendar year in excess
of the annual tonnage of sulphide sulphur used to calculate the Established
Design Capacity in Article 4.03. The Supplemental Capacity Fee shall be paid by
LMC within sixty (60) days of the end of the calendar year in which such fee was
earned by Sherritt. Once a Supplemental Capacity Fee has been paid, then the
corresponding annual tonnage of sulphide sulphur shall become the Established
Design Capacity of the Plant and shall form the basis of any subsequent
Supplemental Capacity Fee calculation.

4.06 The payments referred to in Articles 4.01, 4.02, 4.04 and 4.05 shall, once
made, secure a fully paid-up, irrevocable perpetual license for the Plant for a
capacity of up to that capacity in respect of which such payment is made.

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4.07 The provisions of Article 4.05 shall be applicable to any increase in
capacity obtained by installation of any pressure vessels in addition to those
included in the Plant in respect of which the Established Design Capacity is
calculated in Article 4.03.

4.08 Subject to the provisions of Article 11.04, an Escalation Fee will be paid
by LMC to Sherritt one year from the Date of Commencement of Operations. The
Escalation Fee shall be the lessor of the Gold Price Escalation Fee defined in
Article 4.09 or the Chemical Engineering Plant Cost Index Escalation Fee defined
in Article 4.10, but shall not be less than zero ($0).

4.09 The Gold Price Escalation Fee shall be determined according to the
following formula:

Gold
Price Escalation Fee ($) = (BLF + CF) x (GP1 - GP2)/GP2

Where “BLF” is the Basic License Fee defined in Article 4.01, “CF” is the
Capacity Fee established according to Article 4.03, “GP1,” is the Comex first
position settlement average gold price for the month previous to that in which
the payment is made, and “GP2” is the Comex first position settlement average
gold price for May, 1988 ($452.1 per fine troy ounce). In the event this index
is discontinued, then “GP1” shall be the Monthly Average London PM Fix gold
price, as published in Metals Week, or another mutually agreed upon gold price
index for the month previous to that in which the payment is made.

4.10 The Chemical Engineering Plant Cost Index Escalation Fee shall be
determined according to the following formula:

Chemical Engineering Plant

Cost Index Escalation Fee ($) = (BLF + CF) x (CE1 - CE2)/CE2

Where “BLF” is the Basic License Fee defined in Article 4.01, “CF” is the
Capacity Fee established according to Article 4.03, “CE1,” is the preliminary
Chemical Engineering Plant Cost Index for the month previous to that in which
the payment is made, and “CE2” is the Chemical Engineering Plant Cost Index for
the month of May, 1988 (339.8). In the event this index is discontinued, then
the last published preliminary Chemical Engineering Plant Cost Index shall be
escalated five percent (5%) per twelve (12) month period to establish CE1.

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4.11 All payments under Articles 4.02, 4.04, 4.05 and 4.08 hereof shall be made
within thirty (30) days of due date in United States Dollars to Sherritt at the
address provided for in Article 10 hereof; or at any other location in the U.S.
and Canada that Sherritt shall have designated to LMC in writing.

4.12 Any and all taxes, dues, fees, charges and duties, including withholding
tax on licenses and Know-how levied by the Government of Papua New Guinea, or
any other Government based on their laws and regulations, relating to the
performance of the obligations under this contract shall be borne by the party
so taxable by such government.

ARTICLE 5

Responsibilities of Sherritt

5.01 Sherritt warrants that it is the owner of and has the right to license to
LMC the Sherritt Patent Rights and Know-how, and that the practice of the
Sherritt Patent Rights and Know-how will not infringe the claims of any third
party patent, or any other third party proprietary rights. Sherritt warrants
that the Know-how constitutes the most accurate, complete and current
information available to it as of the date that Sherritt discloses same to LMC.
Sherritt does not warrant any validity of the Sherritt Patent Rights. Sherritt
warrants that it has no knowledge adverse to the validity or enforceability of
the Sherritt Patent Rights.

5.02 It is understood that Sherritt does not guarantee the operating performance
of the Plant or the Plant Process or any part thereof.

5.03 To the best of Sherritt’s knowledge and belief, the practice of the
Pressure Oxidation Technology in the Plant will not infringe any third party
patents, or any other third party proprietary rights. However, in the event
charges of patent infringement are made against LMC as a result of the use of
the Pressure Oxidation Technology in the Plant, such charges shall immediately
be made known to Sherritt and the parties shall cooperate and confer with
respect to disposition of the same. Should such charges result in any action

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against LMC alleging that the use of the Pressure Oxidation Technology in the
Plant infringes a patent or other proprietary right held by a third party,
Sherritt, at its own expense shall defend such action and shall indemnify LMC
against all damages and expenses in connection therewith; PROVIDED:

a) LMC shall assist Sherritt in every proper way in defense of such
action, including furnishing evidence and information in its possession
relating to the defense of such action;

b) LMC shall have the right, at its own expense, to have its own
counsel attend any proceedings in connection with any such action if it
so desires;

c) LMC shall have the right to make or negotiate any settlement with
any claimant or plaintiff in such action with prior written consent of
Sherritt;

d) LMC is not in default of any of its material obligations hereunder;
and

e) That the charge of patent infringement has not arisen because of the
employment or practice of Pressure Oxidation Technology in the Plant by
LMC in a manner which is not in accordance with Sherritt’s
recommendations.

5.04 Should the use of the Pressure Oxidation Technology in the Plant be held to
constitute an infringement of any patent issued while this Agreement is in
effect, then Sherritt shall at its own expense, either:

a) obtain a license under said patent at no cost to LMC and/or

b) make sure changes in the design and/or operation of the Plant as are
necessary to avoid infringement of the patent without reduction in the
productive capacity of the Plant and/or in the quality of the product
and/or increase in the cost of production, and/or

c) assume the cost of defending LMC if a Court action is entered
against LMC based on the alleged infringement of such patent and pay
any award by the Court against LMC as a result of the infringement of
the patent and assume the cost either of obtaining a license under the
patent or revising the Plant and/or the Pressure Oxidation Technology
used therein to avoid further infringement of the patent after such
award without reduction in the production capacity of the Plant and/or
in the quality of the product and/or increase in the cost of
production.

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5.05 It is understood and agreed, however, that the aggregate amount of
Sherritt’s liability in respect of any such claims related to third party
patents utilized in the Plant shall not exceed the sum of Two Hundred and Fifty
Thousands Dollars ($250,000). It is further understood and agreed that Sherritt
shall be under no obligation or liability hereunder, if such claim of
infringement is the result of the use of the pressure Oxidation Technology in
combination with the apparatus, material, or process, or in the Plant embodying
the same, made by other than Sherritt without Sherritt’s specific written
approval. Sherritt approval. Sherritt shall have no liability in respect of
claims based on material, processes and apparatus not designed by Sherritt. The
foregoing states Sherritt’s entire obligation and liability to LMC with respect
to any actual or alleged patent infringement.

5.06 Except as provided in Article 3.07 of the Technical Services Agreement
(covering work to be performed by Sherritt in Papua New Guinea) between LMC and
Sherritt dated the same date as this Agreement, Sherritt’s cumulative financial
liability under this contract and any other contracts between the parties
relating to the Project for all obligations, warranties, representations and
indemnifications whether expressed or implied, whether arising by reason of
contract, tort, negligence or otherwise, arising by reason of Sherritt entering
into this contract is limited to $250,000.

5.07 Under no circumstances shall Sherritt be liable for any indirect or
consequential damages arising out of, or relating to, the subject matter of this
Agreement, including but not limited to, loss of use, loss of products, loss of
raw materials or loss of profit.

ARTICLE 6

Future Know-How and Inventions

6.01 LMC agrees that if, for a period beginning with the date of the Agreement
and terminating five (5) years following the Date of Commencement of Operations,
LMC shall make any Inventions based on information developed and used solely by
LMC and exclusively at the Plant and which it has the right to license, LMC
shall disclose the same to Sherritt and, in the event any patents are obtained
for such Inventions, LMC shall, at

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Sherritt’s request grant, and this Agreement shall be effective to grant to
Sherritt an irrevocable, non-exclusive, royalty-free license and right to
practice and sub-license others to practice the Inventions covered by such
patents and to sell the products of such practice anywhere in the world.

6.02 Sherritt agrees that if, for a period beginning with the date of the
Agreement and terminating five (5) years following the Date of Commencement of
Operations, should Sherritt make or acquire the rights to license any invention
which is or could be useful in LMC’s practice of the Pressure Oxidation
Technology in the Plant, Sherritt shall disclose the same to LMC and, in the
event any patents are obtained for such inventions, Sherritt shall, at LMC’s
request, grant, and this Agreement shall be effective to grant, to LMC an
irrevocable, non-exclusive, royalty- free license and right to practice in the
Plant the Inventions covered by such patents and to sell the products of such
practice anywhere in the world.

ARTICLE 7

Confidential Information

7.01 For a period ending ten (10) years following the Date of Commencement of
Operations, LMC shall maintain all Know-how furnished directly or indirectly by
Sherritt to LMC under this Agreement in confidence for use only by LMC in
accordance with the terms of this Agreement and shall not, without the written
consent of Sherritt, disclose or impart such Know-how to others, except to
persons or companies, and only to the extent required, to use the same in the
design, construction or operation of the plant, (any only then provided such
persons or companies are under obligation of secrecy and non-use co-extensive
with that of LMC hereunder); PROVIDED, however, that such obligation of secrecy
and non-use shall not apply to that part of the Know-how received from Sherritt
which: (a) is or becomes known or available to the public through no fault of
LMC or (b) which is shown to be known to LMC prior to disclosure by Sherritt
under this Agreement or under a prior agreement with Sherritt which requires
such information to be kept confidential or (c) which is shown to have been
received from a third party which is not under binder of secrecy to Sherritt
with respect to same or (d) which is independently developed by LMC employees or
consultants who did not have access to Know- how.

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7.02 LMC further agrees to make necessary arrangements to bind its employees,
agents, representatives, bidders, and prospective suppliers and visitors to the
site who, of necessity, shall be given access to or receive disclosures of any
of said information and Know-how to observe the same obligations of
confidentiality and non-use as those of LMC hereunder.

7.03 Notwithstanding any provision in this Agreement to the contrary, LMC may
disclose Know-how to any agency or personnel of any governments as they may
require for the ordinary design, construction, operation and maintenance of the
Plant. In making any such disclosure under this provision, LMC shall treat
Know-how as if it were its own, and LMC shall provide Sherritt with as much
advance notice as is reasonable under the circumstances.

7.04 To the same extent as LMC has agreed to receive and how Know-how in
confidence under the provisions of this Article 7, Sherritt shall receive and
hold in confidence, and shall use only for purposes that advance the transfer of
and use in the Plant of Know-how, all information, including information
regarding the nature and composition of the Lihir ore body, that it may learn
from LMC during the discharge of its obligations or exercise of its right under
this Agreement.

ARTICLE 8

Force Majeure

     The obligations of each of the parties to this Agreement (other than an
obligation to make payments already due) shall be suspended while and so long as
such party is prevented or hindered from complying therewith in whole or in
party by fire, storm, flood, lightning, explosion, vandalism, strikes, lockouts,
disputes or other labor disturbances, mob action, insurrections, revolution,
acts of God or unavoidable accidents; laws, restraints, rules, regulations, or
orders of any national, provincial, municipal or other governmental agency; acts
of war (whether declared or undeclared), or conditions arising out of or
attributable to war, blockade or act of the public enemy; or other matters
reasonably beyond the control of such party, whether or not similar to the
matters herein

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specifically enumerated. Whenever performance of either party’s obligations is
prevented by any such cause, such party shall give reasonable prompt written
notice thereof to the other party.

     Notwithstanding anything in this Article to the contrary, if Sherritt
is unable to complete any work required of Sherritt under this Agreement at its
facilities for whatever reason other than as a result of an act or omission by
LMC, then Sherritt will promptly make arrangements to finish such work on or as
nearly on schedule as is reasonably possible at an alternative facility(ies).

ARTICLE 9

Miscellaneous

9.01 This Agreement shall be binding upon and inure to the benefit of the
parties and their successors and assigns. This Agreement may not be assigned by
either party without the express prior written consent of the other party, which
consent shall not be unreasonably withheld. Any purported assignment by either
party contrary hereto shall be void.

     Notwithstanding the provisions of this Article 9.01, LMC may assign its
interest in this Agreement to any corporation or other form of enterprise which
replaces it as the manager of LGL and the Lihir Project, without the prior
written consent of Sherritt.

     No assignment of this Agreement, including an assignment pursuant to
the foregoing paragraph, shall be valid until and unless the obligations under
this Agreement shall have been assumed by the assignee.

9.02 The waiver of any breach of this Agreement by either party hereto shall in
no way constitute a waiver as to any future breach whether similar or dissimilar
in nature.

9.03 This Agreement, together with all Appendices and Schedules attached hereto,
constitutes the entire Agreement between the parties and supersedes all previous
verbal or written agreements, assurances and undertakings of the parties hereto
relating to the subject matter hereof. Any amendments to this Agreement must be
in writing and signed by duly authorized representatives of each Party.

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9.04 In the event any provision of this Agreement is declared by a court of
competent jurisdiction to be void or unenforceable or becomes unlawful in its
operation, such provision shall not affect the rights and duties of the parties
with regard to the remaining provisions of this Agreement which shall continue
as binding.

9.05 This Agreement shall be construed and interpreted in accordance with the
laws of the province of Ontario, Canada. By entering into this Agreement, the
parties agree to submit to the jurisdiction of the Courts of Ontario for the
purpose of resolving disputes related to the performance of responsibilities
under this Agreement.

ARTICLE 10

Notice

     All notices required or permitted under this Agreement shall
be in writing, and if to Sherritt shall be deemed given if delivered by hand or
sent by telex or fax confirmed by registered mail addressed to:

Sherritt Inc.

Fort Saskatchewan, Alberta

Canada T8L 2P2

Fax: 403-992-5110

Attention: Garry L.
Bolton
                  Manager,
SI Consultants

and if to LMC shall be deemed given if delivered or sent by telex or fax and
confirmed by registered mail addressed to:

Lihir Management Company Pty Ltd

7th Floor, Pacific Place

Cnr. Champion Pde., Musgrave St.

P.O. Box 789

Port Moresby

Papua New Guinea

Facsimile No 675 21 4705

Telephone No 675 21 7711

Attention: John F. O’Reilly

Managing Director of Lihir Management Company

Either party shall have the right to change its address by notice in writing
delivered or sent

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by registered mail to the other party at the address in force hereunder. If a
notice to either party is given by fax, it shall be deemed to be given on the
day such fax is received

ARTICLE 11

Term and Termination

11.01 Unless otherwise terminated as herein provided, this Agreement shall
continue in force and effect for a period ending fifteen (15) years after the
Date of Commencement of Operations or twenty (20) years from the effective date
of contract, whichever is longer. Upon expiry of said term, LMC shall retain the
paid-up rights and licenses provided under this Agreement.

11.02 Each of Sherritt and LMC shall have the right to terminate this Agreement
by written notice to the other if LMC makes a decision not to proceed with
Sherritt Gordon Pressure Oxidation Technology in the construction of the Plant,
and so informs Sherritt in writing. If LMC makes such a decision, it shall not
have any obligation to make any further payment under this Agreement other than
a payment or payments which are due and payable but unpaid at the date of the
notice of decision not to proceed.

11.03 If LMC has not started and continued good faith efforts to begin
construction of the Plant within thirty-six (36) months of the Decision to
Proceed, then Sherritt is released from its obligations under this Agreement to
provide any further Know-how, including the Know-how necessary to render the
Pressure Oxidation Technology operational within the plant, until such time as
LMC commences good faith efforts to begin construction of the Plant.

11.04 If the application of Pressure Oxidation Technology within the Plant is
discontinued prior to one year from the Date of Commencement of Operations,
those payments due Sherritt one year from the Date of Commencement of
Operations, in accordance with Articles 4.02, 4.03, 4.04 and 4.08, shall be
postponed until such time as Pressure Oxidation Technology is again applied in
the Plant.

32

 

11.05 Each of Sherritt and LMC shall have the additional right to terminate this
Agreement by written notice to the other party if the other party shall, at
anytime, fail to make payments or otherwise fail to discharge any of its
obligations hereunder and shall fail to correct such default within sixty days
after the party claiming a default shall have given written notice of its
existence, provided that in the case of a default that cannot be remedied the
right to terminate this Agreement may only be invoked if the default is
material.

11.05 It is agreed that, in the event of termination of the Agreement, the
rights and obligations of the parties described in Article 7 shall survive; and
termination shall not prejudice Sherritt’s right to collect any amounts accrued
or due and owing to Sherritt under the terms of this Agreement.

33

 

ARTICLE 12

Prior Payments and Disclosure of Know-how

     The payment made to Sherritt by Kennecott pursuant to Section
4.02 and disclosure of Know-how by Sherritt to Kennecott prior to the date the
parties executed this Agreement, is subject to the terms and conditions of this
Agreement.

     IN WITNESS WHEREOF the parties have executed this Agreement.

	 	 	 
	

	 	SHERRITT INC.
	 
	 	 
	

	 	By:  /s/
	

	 	
 

	

	 	Vice
President and General Counsel

	

	 	Title:
             and Corporate Secretary
	

	 	 
	

	 	Date: August 18, 1995
	

	 	 
	 
	 	 
	

	 	LIHIR MANAGEMENT COMPANY PTY LTD
	 
	 	 
	

	 	By:  /s/ John O’Reilly
	

	 	
 

	

	 	Title: Managing Director
	

	 	 
	

	 	Date: 5 August 1995
	

	 	 
	 
	

	 	For and on behalf of
	 
	 	 
	

	 	LIHIR GOLD LIMITED

34

 

APPENDIX 1

PLANT PROCESS

     For the purposes of this Agreement, the Plant Process
described in Article 1.02 shall consist of unit operations shown in Figure 1 and
further defined below.

	 	 	 
	

	 	acid pretreatment of the ore;
	 
	 	 
	

	 	pressure oxidation;
	 
	 	 
	

	 	wash circuit;
	 
	 	 
	

	 	flocculant and lignosol feeding systems; and
	

	 	autoclave seal water system.

35

 

APPENDIX 2

SHERRITT PATENT RIGHTS

	1.	 	Recovery of Gold from Refractory Auriferous Iron-Containing Sulphidic
Concentrate (Concentrate Circuit) U.S. Patent 457 1263
	 
	 	 	Patents pending in other countries.
	 
	2.	 	Recovery of Gold from Auriferous Refractory Iron-Containing Sulphidic
Ore (Ore Circuit)
U.S. Patent 457 1264, Canadian Patent 1234991
	 
	 	 	Patents pending in other countries.
	 
	3.	 	Recovery of Gold from Refractory Auriferous Iron-Containing Sulphidic
Material (Agglomeration Control During Pressure Oxidation) U.S. Patent,
4605439, Canadian Patent
	 
	 	 	Patents pending in other countries.
	 
	4.	 	Process for the Pressure Oxidation Acid Leaching of Nonferrous Metal
and Iron-Containing Sulphidic Material (Autoclave Configuration)
U.S. Patent, 4606763, Canadian Patent 1228483
	 
	 	 	Patents pending in other countries.

36

 

	5.	 	Process for Separately Recovering Gold and Silver from Solution by
Carbon Adsorption (Enhanced Silver Recovery in CIP or CIL Circuit)
U.S. Patent 4606766, Canadian Patent 1232139
	 
	 	 	Patents pending in other countries.
	 
	6.	 	Recovery of Gold from Refractory Auriferous Iron-Containing Sulphidic
Material (Column Adsorption of Thickener Overflow and CIL Processing of
Thickener Underflow)
U.S. Patent 4610724, Canadian Patent 1234291
	 
	 	 	Patents pending in other countries.
	 
	7.	 	Process for Recovery of Silver from a Residue Essentially Free of
Elemental Sulphur (Enhanced Silver Recovery by Hot Liming)
U.S. Patent 4632701, Canadian Patent 1229487
	 
	 	 	Patents pending in other countries.

37

 

Lihir Management Company Pty Ltd

	 	 	 
	Sherritt Inc

Saskatchewan

Alberta

CANADA

	 	August 18, 1995

We refer to the following agreements, effective 5 August 1995, between Lihir
Management Company Pty Ltd for and on behalf of Lihir Gold Limited and Sherrit
Inc (collectively, the “Sherrit/LGL Agreements”):

1. Technical Services Agreement;

2. Patent and Know-How License Agreement; and

3. Technical Services Agreement (North America).

We confirm our agreement that these agreements shall be read and construed as
follows:

	1.	 	All references to “this agreement” in clause 7.04 of each of the
Technical Services Agreement (North America) and the Technical Services
Agreement, and clause 9.03 of the Patent and Know-How License
Agreement, shall be deemed to refer to all three of the Sherrit/LGL
Agreements.
	 
	2.	 	The limitation of US$250,000 in clause 3.06 of each of the Technical
Services Agreement (North America) and the Technical Services
Agreement, and clause 5.06 of the Patent and Know-How License
Agreement, will be deemed to be a limitation of liability on the
aggregate liability under all three of the Sherrit/LGL Agreements
(except as otherwise provided in clause 3.07 of the Technical Services
Agreement).
	 
	3.	 	Annexure A hereto shall replace page 16 of 21 of the Technical Services
Agreement.
	 
	4.	 	Annexure B hereto shall replace page 22 of 25 of the Patent and
Know-How License Agreement.
	 
	 	 	Signed for and on behalf of LIHIR MANAGEMENT COMPANY PTY LTD for and
on behalf of LIHIR GOLD LIMITED by:

	 	 	 
	 

	 	/s/ A. Vickerman
	

	 	
 
	

	 	Name (Printed): A. Vickerman
	

	 	Title: Director
	 
	 	 
	

	 	/s/ Samuel W. Ingram
	

	 	
 
	

	 	Signed for and on behalf of SHERRITT INC by:
	 
	 	 
	

	 	SAMUEL W. INGRAM
	

	 	
 
	

	 	Name (Printed):
	

	 	Title: VICE PRESIDENT
	

	 	         AND GENERAL COUNSEL

38

 

A.

[GRAPHIC OMITTED]

Figure 1. Block Flow Diagram of the Process Plant

39

 

B.

[GRAPHIC OMITTED]

Figure 1. Block Flow Diagram of the Process Plant

40<PAGE>

                                                                    EXHIBIT 4.01

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO CITIGROUP GLOBAL MARKETS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. R-1                                              INITIAL PRINCIPAL AMOUNT
CUSIP 173076 60 5                                    REPRESENTED $50,000,000
                                                     representing 5,000,000 ELKS
                                                     ($10 per ELKS)

                     CITIGROUP GLOBAL MARKETS HOLDINGS INC.

      10% Equity Linked Securities (ELKS(R)) based upon the common stock of
                          Yahoo! Inc. due June 30, 2005

      Citigroup Global Markets Holdings Inc., a New York corporation
(hereinafter referred to as the "Company", which term includes any successor
corporation under the Indenture herein referred to), for value received and on
condition that this Note is not redeemed by the Company prior to June 30, 2005
(the "Stated Maturity Date"), hereby promises to pay to CEDE & CO., or its
registered assigns, the Maturity Payment (as defined below), on the Stated
Maturity Date. This Note will pay semi-annual coupon payments, is not subject to
any sinking fund, is not subject to redemption at the option of the Holder
thereof prior to the Stated Maturity Date, and is not subject to the defeasance
provisions of the Indenture.

      Payment of the Maturity Payment with respect to this Note shall be made
upon presentation and surrender of this Note at the corporate trust office of
the Trustee in the Borough of Manhattan, The City and State of New York, in such
coin or currency of the United States as at the time of payment is legal tender
for payment of public and private debts or, if applicable, in the common stock
of Yahoo! Inc. ("Yahoo!").

      This Note is one of the series of 10% Equity Linked Securities based upon
the common stock of Yahoo! due June 30, 2005 (the "ELKS").

<PAGE>

COUPON

      A coupon of $0.5028 per ELKS will be paid in cash on December 30, 2004 and
a coupon of $0.5000 per ELKS will be paid in cash on June 30, 2005. The December
30, 2004 coupon will be composed of $0.1129 of interest and a partial payment of
an option premium in the amount of $0.3899. The June 30, 2005 coupon will be
composed of $0.1123 of interest and a partial payment of an option premium in
the amount of $0.3877. Coupon payments will be payable to the persons in whose
names the ELKS are registered at the close of business on the fifth Business Day
preceding each Coupon Payment Date. If a Coupon Payment Date falls on a day that
is not a Business Day, the coupon payment to be made on such Coupon Payment Date
will be made on the next succeeding Business Day with the same force and effect
as if made on such Coupon Payment Date, and no additional interest will accrue
as a result of such delayed payment.

      "Business Day" means any day that is not a Saturday, a Sunday or a day on
which securities exchanges or banking institutions or trust companies in the
City of New York are authorized or obligated by law or executive order to close.

      The interest portion of the coupon will represent interest accruing at a
rate of 2.2460% per annum from June 29, 2004 or from the most recent Coupon
Payment Date to which the interest portion of the coupon has been paid or
provided for until maturity. The interest portion of the coupon will be computed
on the basis of a 360-day year of twelve 30-day months.

PAYMENT AT MATURITY

      On the Stated Maturity Date, Holders of the ELKS will receive for each
ELKS the Maturity Payment described below.

DETERMINATION OF THE MATURITY PAYMENT

      The Maturity Payment for each ELKS will equal either:

      -     a number of shares of Yahoo! common stock equal to the Exchange
            Ratio, if the Trading Price of Yahoo! common stock on any Trading
            Day after June 24, 2004 up to and including the third Trading Day
            before the Stated Maturity Date (whether intra-day or at the close
            of trading on any day) is less than or equal to $23.02
            (approximately 67.5% of the Initial Share Price), or

      -     $10 in cash.

      In lieu of any fractional share of Yahoo! common stock otherwise payable
in respect of any ELKS, at the Stated Maturity Date, the Holder of this Note
will receive an amount in cash equal to the value of such fractional share. The
number of full shares of Yahoo! common stock, and any cash in lieu of a
fractional share, to be delivered at the Stated Maturity Date to the Holder of
this Note will be calculated based on the aggregate number of ELKS held by such
Holder.

                                       2

<PAGE>

      The "Initial Share Price" equals $34.11, the price per share of Yahoo!
common stock at the market close on June 24, 2004.

      The "Exchange Ratio" equals 0.29317.

      A "Market Disruption Event" means the occurrence or existence of any
suspension of or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by any exchange or market or otherwise) of, or the
unavailability, through a recognized system of public dissemination of
transaction information, of accurate price, volume or related information in
respect of, (1) the shares of Yahoo! common stock (or any other security for
which a Trading Price or Closing Price must be determined) on any exchange or
market, or (2) any options contracts or futures contracts relating to the shares
of Yahoo! common stock (or other security), or any options on such futures
contracts, on any exchange or market if, in each case, in the determination of
the calculation agent, any such suspension, limitation or unavailability is
material.

      A "Trading Day" means a day, as determined by the calculation agent, on
which trading is generally conducted (or was scheduled to have been generally
conducted, but for the occurrence of a Market Disruption Event) on the New York
Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the
Chicago Mercantile Exchange and the Chicago Board Options Exchange, and in the
over-the-counter market for equity securities in the United States.

      The "Trading Price" of Yahoo! common stock on any date of determination
will be (1) if the common stock is listed on a national securities exchange on
that date of determination, any reported sale price, regular way, of the
principal trading session on that date on the principal U.S. exchange on which
the common stock is listed or admitted to trading, (2) if the common stock is
not listed on a national securities exchange on that date of determination, or
if the reported sale price on such exchange is not obtainable (even if the
common stock is listed or admitted to trading on such exchange), and the common
stock is quoted on the Nasdaq National Market, any reported sale price of the
principal trading session on that date as reported on the Nasdaq, and (3) if the
common stock is not quoted on the Nasdaq on that date of determination, or if
the reported sale price on the Nasdaq is not obtainable (even if the common
stock is quoted on the Nasdaq), any reported sale price of the principal trading
session on the over-the-counter market on that date as reported on the OTC
Bulletin Board, the National Quotation Bureau or a similar organization. The
determination of the Trading Price by the calculation agent in the event of a
Market Disruption Event may be deferred by the calculation agent for up to five
consecutive Trading Days on which a Market Disruption Event is occurring, but
not past the Trading Day prior to the Stated Maturity Date. If no reported sale
price of the principal trading session is available pursuant to clauses (1), (2)
or (3) above or if there is a Market Disruption Event, the Trading Price on any
date of determination, unless deferred by the calculation agent as described in
the preceding sentence, will be the arithmetic mean, as determined by the
calculation agent, of the bid prices of the common stock obtained from as many
dealers in such stock (which may include Citigroup Global Markets Inc. or any of
our other subsidiaries or affiliates), but not exceeding three such dealers, as
will make such bid prices available to the calculation agent. A security "quoted
on the Nasdaq National Market" will include a security included for listing or

                                       3

<PAGE>

quotation in any successor to such system and the term "OTC Bulletin Board" will
include any successor to such service.

      DILUTION ADJUSTMENTS

      If Yahoo!, after the closing date of the offering of the ELKS,

      (1) pays a stock dividend or makes a distribution with respect to its
common stock in shares of the stock,

      (2) subdivides or splits the outstanding shares of its common stock into a
greater number of shares,

      (3) combines the outstanding shares of the common stock into a smaller
number of shares, or

      (4) issues by reclassification of shares of its common stock any shares of
other common stock of Yahoo!,

then, in each of these cases, the Exchange Ratio will be multiplied by a
dilution adjustment equal to a fraction, the numerator of which will be the
number of shares of common stock outstanding immediately after the event, plus,
in the case of a reclassification referred to in (4) above, the number of shares
of other common stock of Yahoo!, and the denominator of which will be the number
of shares of common stock outstanding immediately before the event. The Initial
Share Price will also be adjusted in that case in the manner described below.

      If Yahoo!, after the closing date, issues, or declares a record date in
respect of an issuance of, rights or warrants to all holders of its common stock
entitling them to subscribe for or purchase shares of its common stock at a
price per share less than the Then-Current Market Price of the common stock,
other than rights to purchase common stock pursuant to a plan for the
reinvestment of dividends or interest, then, in each case, the Exchange Ratio
will be multiplied by a dilution adjustment equal to a fraction, the numerator
of which will be the number of shares of common stock outstanding immediately
before the adjustment is effected, plus the number of additional shares of
common stock offered for subscription or purchase pursuant to the rights or
warrants, and the denominator of which will be the number of shares of common
stock outstanding immediately before the adjustment is effected by reason of the
issuance of the rights or warrants, plus the number of additional shares of
common stock which the aggregate offering price of the total number of shares of
common stock offered for subscription or purchase pursuant to the rights or
warrants would purchase at the Then-Current Market Price of the common stock,
which will be determined by multiplying the total number of shares so offered
for subscription or purchase by the exercise price of the rights or warrants and
dividing the product obtained by the Then-Current Market Price. To the extent
that, after the expiration of the rights or warrants, the shares of common stock
offered thereby have not been delivered, the Exchange Ratio will be further
adjusted to equal the Exchange Ratio which would have been in effect had the
adjustment for the issuance of the rights or warrants been made upon the basis
of

                                       4

<PAGE>

delivery of only the number of shares of common stock actually delivered. The
Initial Share Price will also be adjusted in that case in the manner described
below.

      If Yahoo!, after the closing date, declares or pays a dividend or makes a
distribution to all holders of the common stock of any class of its capital
stock, the capital stock of one or more of its subsidiaries, evidences of its
indebtedness or other non-cash assets, excluding any dividends or distributions
referred to in the above paragraph, or issues to all holders of its common stock
rights or warrants to subscribe for or purchase any of its or one or more of its
subsidiaries' securities, other than rights or warrants referred to in the above
paragraph, then, in each of these cases, the Exchange Ratio will be multiplied
by a dilution adjustment equal to a fraction, the numerator of which will be the
Then-Current Market Price of one share of the common stock, and the denominator
of which will be the Then-Current Market Price of one share of the common stock,
less the fair market value (as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company, whose
determination will be final) as of the time the adjustment is effected of the
portion of the capital stock, assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of common stock. The
Initial Share Price will also be adjusted in that case in the manner described
below.

      Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which the above paragraph would otherwise apply, the
denominator in the fraction referred to in the above formula is less than $1.00
or is a negative number, then the Company may, at its option, elect to have the
adjustment provided by the above paragraph not be made and in lieu of this
adjustment, the Trading Price of Yahoo! common stock on any Trading Day
thereafter up to and including the third Trading Day before the Stated Maturity
Date will be deemed to be equal to the fair market value of the capital stock,
evidences of indebtedness, assets, rights or warrants (determined, as of the
date this dividend or distribution is made, by a nationally recognized
independent investment banking firm retained for this purpose by the Company,
whose determination will be final) so distributed or issued applicable to one
share of Yahoo! common stock and, if the Trading Price of Yahoo! common stock on
any Trading Day thereafter, up to and including the third Trading Day before the
Stated Maturity Date, is less than or equal to approximately 67.5% of the
Initial Share Price, each holder of the ELKS will have the right to receive at
maturity cash in an amount per ELKS equal to the Exchange Ratio multiplied by
such fair market value.

      If Yahoo!, after the closing date, declares a record date in respect of a
distribution of cash, other than any Permitted Dividends described below, any
cash distributed in consideration of fractional shares of common stock and any
cash distributed in a Reorganization Event referred to below, by dividend or
otherwise, to all holders of its common stock, or makes an Excess Purchase
Payment, then the Exchange Ratio will be multiplied by a dilution adjustment
equal to a fraction, the numerator of which will be the Then-Current Market
Price of the common stock, and the denominator of which will be the Then-Current
Market Price of the common stock on the record date less the amount of the
distribution applicable to one share of common stock which would not be a
Permitted Dividend, or, in the case of an Excess Purchase Payment, less the
aggregate amount of the Excess Purchase Payment for which adjustment is being
made at the

                                       5

<PAGE>

time divided by the number of shares of common stock outstanding on the record
date. The Initial Share Price will also be adjusted in that case in the manner
described below.

      For the purposes of these adjustments:

      A "Permitted Dividend" is any quarterly cash dividend in respect of Yahoo!
common stock, other than a quarterly cash dividend that exceeds the immediately
preceding quarterly cash dividend, and then only to the extent that the per
share amount of this dividend results in an annualized dividend yield on the
common stock in excess of 10%.

      An "Excess Purchase Payment" is the excess, if any, of (x) the cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final) of all other consideration paid by Yahoo! with respect to one share of
common stock acquired in a tender offer or exchange offer by Yahoo!, over (y)
the Then-Current Market Price of the common stock.

      Notwithstanding the foregoing, in the event that, with respect to any
dividend, distribution or Excess Purchase Payment to which the sixth paragraph
in this section would otherwise apply, the denominator in the fraction referred
to in the formula in that paragraph is less than $1.00 or is a negative number,
then the Company may, at its option, elect to have the adjustment provided by
the sixth paragraph in this section not be made and in lieu of this adjustment,
the Trading Price of Yahoo! common stock on any Trading Day thereafter up to and
including the third Trading Day before the Stated Maturity Date will be deemed
to be equal to the sum of the amount of cash and the fair market value of other
consideration (determined, as of the date this dividend or distribution is made,
by a nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination will be final) so distributed or
applied to the acquisition of the common stock in the tender offer or exchange
offer applicable to one share of Yahoo! common stock and, if the Trading Price
of Yahoo! common stock on any Trading Day thereafter, up to and including the
third Trading Day before the Stated Maturity Date, is less than or equal to
approximately 67.5% of the Initial Share Price, each holder of the ELKS will
have the right to receive at maturity cash in an amount per ELKS equal to the
Exchange Ratio multiplied by such sum.

      If any adjustment is made to the Exchange Ratio as set forth above, an
adjustment will also be made to the Initial Share Price. The required adjustment
will be made by dividing the Initial Share Price by the relevant dilution
adjustment.

      Each dilution adjustment will be effected as follows:

      -     in the case of any dividend, distribution or issuance, at the
            opening of business on the Business Day next following the record
            date for determination of holders of Yahoo! common stock entitled to
            receive this dividend, distribution or issuance or, if the
            announcement of this dividend, distribution, or issuance is after
            this record date, at the time this dividend, distribution or
            issuance was announced by Yahoo!,

                                       6

<PAGE>

      -     in the case of any subdivision, split, combination or
            reclassification, on the effective date of the transaction,

      -     in the case of any Excess Purchase Payment for which Yahoo!
            announces, at or prior to the time it commences the relevant share
            repurchase, the repurchase price per share for shares proposed to be
            repurchased, on the date of the announcement, and

      -     in the case of any other Excess Purchase Payment, on the date that
            the holders of the repurchased shares become entitled to payment in
            respect thereof.

      All dilution adjustments will be rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th. No adjustment in the Exchange Ratio will be required unless the
adjustment would require an increase or decrease of at least one percent
therein, provided, however, that any adjustments which by reason of this
sentence are not required to be made will be carried forward (on a percentage
basis) and taken into account in any subsequent adjustment. If any announcement
or declaration of a record date in respect of a dividend, distribution, issuance
or repurchase requiring an adjustment as described herein is subsequently
canceled by Yahoo!, or this dividend, distribution, issuance or repurchase fails
to receive requisite approvals or fails to occur for any other reason, then,
upon the cancellation, failure of approval or failure to occur, the Exchange
Ratio and the Initial Share Price will be further adjusted to the Exchange Ratio
and the Initial Share Price which would then have been in effect had adjustment
for the event not been made. If a Reorganization Event described below occurs
after the occurrence of one or more events requiring an adjustment as described
herein, the dilution adjustments previously applied to the Exchange Ratio will
not be rescinded but will be applied to the Reorganization Event as provided for
below.

      The "Then-Current Market Price" of the common stock, for the purpose of
applying any dilution adjustment, means the average Closing Price per share of
common stock for the ten Trading Days immediately before this adjustment is
effected or, in the case of an adjustment effected at the opening of business on
the Business Day next following a record date, immediately before the earlier of
the date the adjustment is effected and the related Ex-Date. For purposes of
determining the Then-Current Market Price, the determination of the Closing
Price by the calculation agent in the event of a Market Disruption Event, as
described in the definition of Closing Price, may be deferred by the calculation
agent for up to five consecutive Trading Days on which a Market Disruption Event
is occurring, but not past the Trading Day prior to the Stated Maturity Date.

      The "Closing Price" of Yahoo! common stock (or any other security for
which a Closing Price must be determined) on any date of determination will be
(1) if the common stock is listed on a national securities exchange on that date
of determination, the closing sale price or, if no closing sale price is
reported, the last reported sale price on that date on the principal U.S.
exchange on which the common stock is listed or admitted to trading, (2) if the
common stock is not listed on a national securities exchange on that date of
determination, or if the closing sale price or last reported sale price is not
obtainable (even if the common stock is listed or admitted to trading on such
exchange), and the common stock is quoted on the Nasdaq National Market,

                                       7

<PAGE>

the closing sale price or, if no closing sale price is reported, the last
reported sale price on that date as reported on the Nasdaq, and (3) if the
common stock is not quoted on the Nasdaq on that date of determination or, if
the closing sale price or last reported sale price is not obtainable (even if
the common stock is quoted on the Nasdaq), the last quoted bid price for the
common stock in the over-the-counter market on that date as reported by the OTC
Bulletin Board, the National Quotation Bureau or a similar organization. The
determination of the Closing Price by the calculation agent in the event of a
Market Disruption Event may be deferred by the calculation agent for up to five
consecutive Trading Days on which a Market Disruption Event is occurring, but
not past the Trading Day prior to the Stated Maturity Date. If no closing sale
price or last reported sale price is available pursuant to clauses (1), (2) or
(3) above or if there is a Market Disruption Event, the Closing Price on any
date of determination, unless deferred by the calculation agent as described in
the preceding sentence, will be the arithmetic mean, as determined by the
calculation agent, of the bid prices of the common stock obtained from as many
dealers in such stock (which may include Citigroup Global Markets Inc. or any of
our other subsidiaries or affiliates), but not exceeding three such dealers, as
will make such bid prices available to the calculation agent. A security "quoted
on the Nasdaq National Market" will include a security included for listing or
quotation in any successor to such system and the term "OTC Bulletin Board" will
include any successor to such service. If, during any period of ten Trading Days
used to calculate the Then-Current Market Price, there occurs any event
requiring an adjustment to be effected as described herein, then the Closing
Price for each Trading Day in such period of ten Trading Days occurring prior to
the day on which such adjustment is effected will be adjusted by being divided
by the relevant dilution adjustment.

      The "Ex-Date" relating to any dividend, distribution or issuance is the
first date on which the shares of the common stock trade in the regular way on
their principal market without the right to receive this dividend, distribution
or issuance.

      In the event of any of the following "Reorganization Events":

      -     any consolidation or merger of Yahoo!, or any surviving entity or
            subsequent surviving entity of Yahoo!, with or into another entity,
            other than a merger or consolidation in which Yahoo! is the
            continuing corporation and in which the common stock outstanding
            immediately before the merger or consolidation is not exchanged for
            cash, securities or other property of Yahoo! or another issuer,

      -     any sale, transfer, lease or conveyance to another corporation of
            the property of Yahoo! or any successor as an entirety or
            substantially as an entirety,

      -     any statutory exchange of securities of Yahoo! or any successor of
            Yahoo! with another issuer, other than in connection with a merger
            or acquisition, or

      -     any liquidation, dissolution or winding up of Yahoo! or any
            successor of Yahoo!,

the Trading Price of Yahoo! common stock on any Trading Day thereafter up to and
including the third Trading Day before the Stated Maturity Date will be deemed
to be equal to the Transaction Value.

                                       8

<PAGE>

      The "Transaction Value" will be the sum of:

      (1) for any cash received in a Reorganization Event, the amount of cash
received per share of common stock,

      (2) for any property other than cash or Marketable Securities received in
a Reorganization Event, an amount equal to the market value on the date the
Reorganization Event is consummated of that property received per share of
common stock, as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final, and

      (3) for any Marketable Securities received in a Reorganization Event, an
amount equal to the Closing Price per share of these Marketable Securities on
the applicable Trading Day multiplied by the number of these Marketable
Securities received for each share of common stock.

      "Marketable Securities" are any perpetual equity securities or debt
securities with a stated maturity after the maturity date, in each case that are
listed on a U.S. national securities exchange or reported by the Nasdaq National
Market. The number of shares of any equity securities constituting Marketable
Securities included in the calculation of Transaction Value pursuant to clause
(3) above will be adjusted if any event occurs with respect to the Marketable
Securities or the issuer of the Marketable Securities between the time of the
Reorganization Event and maturity that would have required an adjustment as
described above, had it occurred with respect to Yahoo! common stock or Yahoo!.
Adjustment for these subsequent events will be as nearly equivalent as
practicable to the adjustments described above.

      If Yahoo! common stock has been subject to a Reorganization Event and the
Trading Price of Yahoo! common stock on any Trading Day thereafter, up to and
including the third Trading Day before the Stated Maturity Date, is less than or
equal to approximately 67.5% of the Initial Share Price, then each holder of the
ELKS will have the right to receive per $10 principal amount of ELKS (i) cash in
an amount equal to the Exchange Ratio multiplied by the sum of clauses (1) and
(2) in the definition of "Transaction Value" above and (ii) the number of
Marketable Securities received for each share of stock in the Reorganization
Event multiplied by the Exchange Ratio.

GENERAL

      This Note is one of a duly authorized issue of Debt Securities of the
Company, issued and to be issued in one or more series under a Senior Debt
Indenture, dated as of October 27, 1993, as supplemented by a First Supplemental
Indenture, dated as of November 28, 1997, a Second Supplemental Indenture, dated
as of July 1, 1999, and as further supplemented from time to time (the
"Indenture"), between the Company and The Bank of New York, as trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the ELKS, and the terms upon which the ELKS are,
and are to be, authenticated and delivered.

                                       9

<PAGE>

      In case an Event of Default with respect to the ELKS shall have occurred
and be continuing, the principal of the ELKS may be declared due and payable in
the manner and with the effect provided in the Indenture. In such case, the
amount declared due and payable upon any acceleration permitted by the Indenture
will be determined by the calculation agent and will be equal to, with respect
to this Note, the Maturity Payment calculated as though the Stated Maturity Date
of this Note were the date of early repayment. In case of default at Maturity of
this Note, this Note shall bear interest, payable upon demand of the beneficial
owners of this Note in accordance with the terms of the ELKS, from and after
Maturity through the date when payment of such amount has been made or duly
provided for, at the rate of 3.00% per annum on the unpaid amount (or the cash
equivalent of such unpaid amount) due.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debt Securities of each series to
be affected under the Indenture at any time by the Company and a majority in
aggregate principal amount of the Debt Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the Holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the Holders of
all Debt Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Note shall be conclusive and binding upon such Holder and upon all future
Holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

      The Holder of this Note may not enforce such Holder's rights pursuant to
the Indenture or the Notes except as provided in the Indenture. No reference
herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company to pay the Maturity Payment with
respect to this Note, and to pay any interest on any overdue amount thereof at
the time, place and rate, and in the coin or currency, herein prescribed.

      All terms used in this Note which are defined in the Indenture but not in
this Note shall have the meanings assigned to them in the Indenture.

      Unless the certificate of authentication hereon has been executed by the
Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purposes.

                                       10

<PAGE>

      IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

                                       CITIGROUP GLOBAL MARKETS HOLDINGS INC.

                                       By: /s/ Geoffrey S. Richards
                                           -------------------------------------
                                           Name: Geoffrey S. Richards
                                           Title: Vice President

Corporate Seal
Attest:

By: /s/ Douglas C. Turnbull
    --------------------------------
    Name: Douglas C. Turnbull
    Title: Assistant Secretary

Dated June 29, 2004

CERTIFICATE OF AUTHENTICATION
   This is one of the Notes referred to in
   the within-mentioned Indenture.

The Bank of New York,
as Trustee

By: /s/ Geovanni Barris
    ---------------------------------
    Authorized Signatory

                                       11

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