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EXHIBIT 2.1
ARRANGEMENT AGREEMENT
BETWEEN
FRANCO-NEVADA MINING CORPORATION LIMITED
AND
NEWMONT MINING CORPORATION
NOVEMBER 14, 2001
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TABLE OF CONTENTS
PAGE
NO.
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1. THE ARRANGEMENT AND ITS ANNOUNCEMENT..................... 1
A. Process Regarding Franco-Nevada...................... 1
B. Process Regarding Newmont............................ 2
C. Circulars............................................ 2
D. Public Announcement.................................. 3
2. CONDITIONS TO THE ARRANGEMENT............................ 3
A. Mutual Conditions.................................... 3
B. Conditions in Favour of Franco-Nevada................ 3
C. Conditions in Favour of Newmont...................... 3
D. Satisfaction, Waiver and Release of Conditions....... 3
3. REPRESENTATIONS AND WARRANTIES........................... 3
A. Representations and Warranties of Franco-Nevada...... 3
B. Representations and Warranties of Newmont............ 4
C. Survival of Representations, Warranties and Covenants 4
D. Exchangeable Shares Held by New Newmont.............. 4
4. IMPLEMENTATION........................................... 4
A. General.............................................. 4
B. Options.............................................. 5
C. Defence of Proceedings............................... 5
D. Waiver of Shareholder Rights Plan.................... 6
E. Securities Law Compliance and Related Covenants...... 6
F. Registrar and Transfer Agent......................... 6
G. Access to Information; Confidentiality............... 7
H. Duty to Inform....................................... 7
I. Governance........................................... 7
J. Board Recommendations................................ 7
K. Affiliate Letters.................................... 8
5. CONDUCT OF BUSINESS...................................... 8
A. Conduct of Business by Franco-Nevada................. 8
B. Conduct of Business by Newmont....................... 10
6. ALTERNATIVE TRANSACTIONS................................. 12
A. Non-Solicitation; Adverse Acts....................... 12
B. Permitted Actions.................................... 12
C. Notification of Acquisition Proposal................. 12
D. Access to Information................................ 13
E. Implementation of Superior Proposal.................. 13
F. Response by Newmont.................................. 13
G. General.............................................. 14
7. TERMINATION AND AMENDMENT OF AGREEMENT................... 14
A. Termination.......................................... 14
B. Amendment............................................ 15
C. Mutual Understanding Regarding Amendments............ 16
D. Approval of Amendments............................... 16
8. TERMINATION PAYMENTS..................................... 16
A. Payment to Newmont................................... 16
B. Payment to Franco-Nevada............................. 16
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PAGE
NO.
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9. CONFIDENTIALITY AND PUBLIC DISCLOSURE 16
10. GENERAL.............................. 17
A. Definitions................... 17
B. Assignment.................... 17
C. Binding Effect................ 17
D. Representatives............... 17
E. Responsibility for Expenses... 17
F. Time.......................... 17
G. Notices....................... 17
H. Governing Law................. 18
I. Injunctive Relief............. 19
J. Currency...................... 19
K. Accounting Matters............ 19
L. Knowledge..................... 19
M. Entire Agreement.............. 19
N. Further Assurances............ 19
O. Waivers and Modifications..... 19
P. Schedules..................... 19
Q. Counterparts.................. 20
R. Date For Any Action........... 20
S. Interpretation................ 20
T. Severability.................. 20
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ARRANGEMENT AGREEMENT
THIS AGREEMENT made this 14th day of November, 2001.
BETWEEN:
FRANCO-NEVADA MINING CORPORATION LIMITED, a corporation incorporated
under the laws of Canada, ("FRANCO-NEVADA"),
--AND--
NEWMONT MINING CORPORATION, a corporation incorporated under the laws
of Delaware, ("NEWMONT")
WHEREAS:
A. The authorized capital of Franco-Nevada consists of an unlimited number
of common shares and an unlimited number of First Preference Shares issuable in
series, of which 158,920,430 common shares and no First Preference Shares are
issued and outstanding as fully paid and non-assessable;
B. There are no options, warrants or other securities outstanding that
require the issue or sale of any securities of Franco-Nevada, other than the
Franco-Nevada Stock Options to acquire an aggregate of 5,040,356 common shares,
Franco-Nevada Class A Warrants to acquire an aggregate of 8,985,344 common
shares and Franco-Nevada Class B Warrants to acquire an aggregate of 6,571,953
common shares;
C. Newmont proposes to acquire, through related entities (to be formed by
Newmont), all of the Franco-Nevada Shares pursuant to the Arrangement as
provided for in this agreement;
D. Newmont proposes to acquire, through a related entity (to be formed by
Newmont), all of the issued and outstanding shares in the capital of Normandy;
E. The board of directors of Franco-Nevada, after receiving the Fairness
Opinion and legal advice and after considering other factors, has determined
that it would be advisable and in the best interests of Franco-Nevada and the
Franco-Nevada Shareholders for it to enter into this agreement, to support and
implement the Transactions and to recommend that Franco-Nevada Shareholders
vote in favour of the Arrangement; and
F. The parties intend that the Transactions shall qualify as reorganizations
within the meaning of Section 368(a) of the Code and/or as exchanges that,
taken together with the contemplated acquisition of Normandy, are described in
Section 351 of the Code.
NOW THEREFORE in consideration of the mutual covenants set out in this
agreement and other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Franco-Nevada and Newmont agree that:
1. THE ARRANGEMENT AND ITS ANNOUNCEMENT
A. PROCESS REGARDING FRANCO-NEVADA.
Subject to the terms and conditions of this agreement:
(a) as soon as practicable after the execution of this agreement, and in
any event before January 15, 2002, Franco-Nevada shall, in a manner
acceptable to Newmont, apply to the Court pursuant to (S)192 of the Act for
the Interim Order;
(b) provided the Interim Order has been obtained, Franco-Nevada shall, in
a manner acceptable to Newmont, call and hold the Franco-Nevada Special
Meeting as soon as reasonably practicable after the Interim Order has been
obtained, and in any event before February 28, 2002, and, in connection with
the Franco-Nevada Special Meeting, ensure that the Franco-Nevada Circular
contains all information necessary to permit Franco-Nevada Shareholders to
make an informed judgement about the Arrangement;
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(c) after having called the Franco-Nevada Special Meeting, Franco-Nevada
shall not, without the prior written consent of Newmont, adjourn, postpone
or cancel the Franco-Nevada Special Meeting;
(d) Franco-Nevada shall, subject to the prior review and written approval
of Newmont, prepare, file and distribute the Franco-Nevada Circular and such
other documents (including documents required by the TSE and the OSC or
applicable Law) as may be necessary or desirable to permit Franco-Nevada
Shareholders to vote on the Arrangement;
(e) provided the Arrangement is approved at the Franco-Nevada Special
Meeting as set out in the Interim Order, as soon as reasonably practicable
thereafter at a time determined with Newmont, Franco-Nevada shall forthwith,
in a manner acceptable to Newmont, take the necessary steps to submit the
Arrangement to the Court and apply for the Final Order in such manner as the
Court may direct;
(f) provided the Final Order is obtained and the conditions set out in
(S)2 have been satisfied or waived, Franco-Nevada shall send to the
Director, for endorsement and filing by the Director, articles of
arrangement and such other documents as may be required under the CBCA to
give effect to the Arrangement; and
(g) provided the Final Order is obtained and the conditions set out in
(S)2 have been satisfied or waived, the Support Agreement and the Voting and
Exchange Trust Agreement shall be executed.
B. PROCESS REGARDING NEWMONT.
Newmont shall take all action necessary to cause a meeting of its
shareholders to be duly called and held for the purposes of voting on all
matters required by the Delaware General Corporation Law and the rules of the
NYSE in order to consummate the transactions contemplated by this agreement.
Such shareholders meeting shall be held at the earliest practicable time
following the Franco-Nevada Special Meeting, subject to compliance with all
applicable Law. In connection with its shareholders meeting, Newmont shall (i)
mail all necessary documents to its shareholders as promptly as practicable,
including the Newmont Circular, (ii) use all reasonable efforts to obtain the
necessary approvals to consummate the transactions contemplated by this
agreement and (iii) otherwise comply with all applicable legal requirements to
hold the Newmont shareholder meeting and consummate the transactions
contemplated by this agreement.
C. CIRCULARS.
Franco-Nevada shall, subject to the prior review and written approval of
Newmont, prepare the Franco-Nevada Circular (including supplements or
amendments thereto) and cause the Franco-Nevada Circular (including supplements
or amendments thereto) to be distributed in accordance with applicable Law.
Newmont shall furnish to Franco-Nevada all information regarding itself, its
Subsidiaries and its directors, officers and shareholders as may reasonably be
required to be included in the Franco-Nevada Circular pursuant to applicable
Laws. Each of Franco-Nevada and Newmont shall:
(a) ensure that all information provided by it or on its behalf that is
contained in the Franco-Nevada Circular does not contain any
misrepresentation or any untrue statement of a material fact or omit to
state a material fact required to be stated in the Franco-Nevada Circular
that is necessary to make any statement that it contains not misleading in
light of the circumstances in which it is made; and
(b) promptly notify the other if, at any time before the Effective Time,
it becomes aware that the Franco-Nevada Circular, any document delivered to
the Court in connection with the application for the Interim Order or Final
Order or delivered to Franco-Nevada Shareholders in connection with the
Franco-Nevada Special Meeting or any other document contemplated by (S)1.A
contains a misrepresentation, an untrue statement of material fact, omits to
state a material fact required to be stated in those documents that is
necessary to make any statement it contains not misleading in light of the
circumstances in which it is made or that otherwise requires an amendment or
a supplement to those documents.
Franco-Nevada shall furnish to Newmont all information regarding itself, its
Subsidiaries and its directors, officers and shareholders as may reasonably be
required to be included in the Newmont Circular pursuant to applicable Laws.
Newmont shall provide Franco-Nevada with the opportunity to review the Newmont
Circular prior to its submission to the SEC and its dissemination. Each of
Newmont and Franco-Nevada shall:
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(a) ensure that the information provided by it or on its behalf that is
contained in the Newmont Circular does not contain any untrue statements of
a material fact or omit to state a material fact required to be stated in
the Newmont Circular or necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not
misleading; and
(b) promptly notify the other if, at any time before the Effective Time,
it becomes aware that the Newmont Circular, any document delivered to
Newmont Shareholders in connection with the Newmont Special Meeting or any
other document contemplated by (S)1.B contains any untrue statements of a
material fact or omits to state a material fact required to be stated in
those documents or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading, or
otherwise requires an amendment or supplement.
D. PUBLIC ANNOUNCEMENT.
Immediately after the execution of this agreement, Franco-Nevada and Newmont
shall issue a joint public announcement, announcing the entering into of this
agreement and the Transactions, which announcement shall be in form and
substance acceptable to each of them.
2. CONDITIONS TO THE ARRANGEMENT
A. MUTUAL CONDITIONS.
The respective obligations of Franco-Nevada and Newmont to complete the
Arrangement shall be subject to the fulfilment, or the waiver by each of
Franco-Nevada and Newmont, on or before the Outside Date, of the conditions set
forth in Schedule C, each of which may be waived by mutual consent of
Franco-Nevada and Newmont, in whole or in part. For greater certainty, the
conditions set forth in Schedule C are inserted for the benefit of each of the
parties to this agreement and may be waived by mutual consent of Franco-Nevada
and Newmont, in whole or in part, in their sole discretion.
B. CONDITIONS IN FAVOUR OF FRANCO-NEVADA.
The obligations of Franco-Nevada to complete the Arrangement shall be
subject to the fulfilment, or the waiver by Franco-Nevada, on or before the
Outside Date, of the conditions set forth in Schedule D, each of which is for
the exclusive benefit of Franco-Nevada and may be waived by Franco-Nevada
alone, at any time, in whole or in part, in its sole discretion.
C. CONDITIONS IN FAVOUR OF NEWMONT.
The obligations of Newmont to complete the Arrangement shall be subject to
the fulfilment, or the waiver by Newmont, on or before the Outside Date, of the
conditions set out in Schedule E, each of which is for the exclusive benefit of
Newmont and may be waived by Newmont alone, at any time, in whole or in part,
in its sole discretion.
D. SATISFACTION, WAIVER AND RELEASE OF CONDITIONS.
Upon the issuance of a certificate of arrangement in respect of the
Arrangement by the Director in accordance with the Final Order and the CBCA,
the conditions provided for in this section shall be deemed conclusively to
have been satisfied, waived or released.
3. REPRESENTATIONS AND WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF FRANCO-NEVADA.
Franco-Nevada represents and warrants to Newmont as to those matters set
forth in Schedule F (and acknowledges that Newmont is relying on such
representations and warranties in entering into this agreement and completing
the Transactions).
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B. REPRESENTATIONS AND WARRANTIES OF NEWMONT.
Newmont represents and warrants to Franco-Nevada as to those matters set
forth in Schedule G (and acknowledges that Franco-Nevada is relying on such
representations and warranties in entering into this agreement and completing
the Transactions).
C. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
The representations, warranties and covenants of Franco-Nevada and Newmont
contained in this agreement or in any instrument delivered pursuant to this
agreement shall merge upon, and shall not survive, the Effective Date; provided
that this (S)3.C shall not limit any covenant or agreement of the parties,
which by its terms contemplates performance after the Effective Time.
D. EXCHANGEABLE SHARES HELD BY NEW NEWMONT.
If New Newmont (or a successor thereto) is a "specified financial
institution" for purposes of the ITA, any Exchangeable Shares held by New
Newmont, or a corporation related to New Newmont, will not be redeemed or
cancelled if such redemption or cancellation would result in any holder of an
Exchangeable Share (other than a Newmont corporation) holding more than 10% of
the issued and outstanding Exchangeable Shares.
4. IMPLEMENTATION
A. GENERAL.
The Transactions are intended, subject to the terms and conditions hereof
and thereof, to result in:
. in respect of any Franco-Nevada Shareholder who elects pursuant to the
terms of Section 2.3 of the Plan of Arrangement, the acquisition by NSULC
and Acquisitionco of all of the issued shares of a Holdco in consideration
of, at the option of the holder of such Holdco Shares, either:
(i) if the Holdco Shares are sold to Acquisitionco, 0.80 Exchangeable
Shares per Franco-Nevada Share owned by the Holdco, or
(ii) if the Holdco Shares are sold to NSULC, 0.80 Newmont Shares per
Franco-Nevada Share owned by the Holdco;
. in any other case, the acquisition by NSULC and Acquisitionco of all of
the issued and outstanding Franco-Nevada Shares from the holders of those
shares (other than Franco-Nevada Shares owned by Holdcos) in consideration
of, at the option of the holder, either:
(i) 0.80 Exchangeable Shares per Franco-Nevada Share acquired by
Acquisitionco, or
(ii) 0.80 Newmont Shares per Franco-Nevada Share acquired by NSULC,
and cash in lieu of fractional shares; and
. condition (f) of Schedule C being satisfied as soon as reasonably
practicable.
Subject to the provisions of the Plan of Arrangement, Acquisitionco agrees to
execute joint elections under subsection 85(1) or 85(2) of the ITA or any
equivalent provincial legislation in respect of the acquisition of
Franco-Nevada Shares or Holdco Shares by Acquisitionco. In addition, each of
Franco-Nevada and Newmont shall (and shall cause its Subsidiaries to) use all
efforts to satisfy each of the conditions precedent to be satisfied by it, as
soon as practical and in any event before the Effective Date, and to take, or
cause to be taken, all other action and to do, or cause to be done, all other
things necessary, proper or advisable to permit the completion of the
Transactions in accordance with the Arrangement, this agreement, the agreements
that it contemplates and applicable Law, and to cooperate with each other in
connection therewith (provided, however, that, with respect to Canadian
provincial or territorial qualifications, neither Newmont nor New Newmont shall
be required to register or qualify as a foreign corporation or to take any
action that would subject it to service of process in any
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jurisdiction where it is not now so subject, except as to matters and
transactions arising solely from the issuance of the Exchangeable Shares and
the Newmont Shares), including using all efforts to:
(a) provide notice to, and obtain all waivers, consents, permits,
licenses, authorizations, orders, approvals and releases necessary or
desirable to complete the Transactions from, Agencies and other persons,
including parties to agreements, understandings or other documents to which
each of Franco-Nevada and Newmont (and its respective Subsidiaries) is a
party or by which it or its properties is bound or affected (including loan
agreements, shareholder agreements, leases, pledges, guarantees and
security), the failure of which to provide or obtain would prevent the
completion of the Arrangement or which, individually or in the aggregate,
could reasonably be expected to be Materially Adverse to either
Franco-Nevada or Newmont and their respective Subsidiaries, in each case
taken as a whole;
(b) obtain the Interim Order and the approval of Franco-Nevada
Shareholders at the Franco-Nevada Special Meeting at the earliest
practicable date, as specified in the Interim Order and the Final Order;
(c) effect or cause to be effected all registrations and filings and
submissions of information necessary or desirable to complete the
Transactions or requested of it by Agencies, the failure of which to obtain
could reasonably be expected to prevent the completion of the Transactions
or could reasonably be expected to be Materially Adverse to either
Franco-Nevada or Newmont and their respective Subsidiaries, in each case
taken as a whole; and
(d) keep the other reasonably informed as to the status of the
proceedings related to obtaining the Regulatory Approvals, including
providing the other with copies of all related applications and
notifications.
B. OPTIONS.
(a) Franco-Nevada shall take all necessary actions and do all things
necessary to ensure that, in accordance with the terms of the Franco-Nevada
Options, each holder of a Franco-Nevada Option shall be entitled to receive
after the Effective Time upon the subsequent exercise of such holder's
Franco-Nevada Option, in accordance with its terms, and shall accept in lieu of
the number of Franco-Nevada Shares to which such holder was theretofore
entitled upon such exercise but for the same aggregate consideration payable
therefor, the aggregate number of Newmont Shares that such holder would have
been entitled to receive as a result of the Transactions if, on the Effective
Date, such holder had been the registered holder of the number of Franco-Nevada
Shares to which such holder was theretofore entitled upon such exercise. For
example, a holder of ten Franco-Nevada Class A Warrants would be entitled to
receive new warrants bearing the same terms and conditions, except that such
warrants would be exercisable for 32 (i.e., 10 x 4 x 0.80) Newmont Shares for a
total exercise price of $200.
(b) As soon as practicable following the Effective Date, but it no event
later than 20 days after the Effective Date, Newmont shall, to the extent
required, file with the SEC a registration statement on Form S-8 (or other
appropriate form) under the Securities Act with respect to the Newmont Shares
issued pursuant to Section 4.B(a) with respect to Franco-Nevada Options.
Newmont shall take all necessary action to ensure that a sufficient number of
Newmont Shares are reserved for issuance upon the exercise of Franco-Nevada
Options as contemplated by Section 4.B(a). In addition, Newmont shall take all
necessary action to cause Newmont equity securities issued in connection with
the Arrangement to the holders of Franco-Nevada Options who become executive
officers or directors of Newmont to be exempt from Section 16(b) of the
Securities Exchange Act pursuant to Rule 16b-3 promulgated thereunder.
C. DEFENCE OF PROCEEDINGS.
Each of Franco-Nevada and Newmont shall vigorously defend, or shall cause to
be vigorously defended, any lawsuits or other legal proceeding brought against
it or any of its Subsidiaries or their respective directors, officers or
shareholders challenging this agreement or the completion of the Transactions.
Neither Franco-Nevada nor Newmont shall settle or compromise (or permit any of
their respective Subsidiaries to compromise or settle) any claim brought in
connection with the Transactions, without the prior written consent of the
other.
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D. WAIVER OF SHAREHOLDER RIGHTS PLAN.
Franco-Nevada hereby confirms, acknowledges and agrees that the board of
directors of Franco-Nevada has approved the Transactions and has, acting in
good faith, determined it to be necessary and desirable to extend the
Separation Time (as defined therein) under the Franco-Nevada Rights Agreement
until after the vote by the Franco-Nevada Shareholders on the Arrangement at
the Franco-Nevada Special Meeting and to obtain the consent of Franco-Nevada
Shareholders to waive the Franco-Nevada Rights Agreement so that neither the
entering into nor delivery of this agreement, the Arrangement or the other
agreements contemplated hereby nor the consummation of all or any part of the
Transactions shall constitute a Flip-in Event (as defined in the Franco-Nevada
Rights Agreement), and Franco-Nevada has done all such acts and executed and
delivered all such documents and instruments that are required in order to
extend the Separation Time, including providing the Rights Agent (as defined in
the Franco-Nevada Rights Agreement) with notice in writing of such extension.
E. SECURITIES LAW COMPLIANCE AND RELATED COVENANTS.
Newmont shall use its best efforts (which, for greater certainty, shall not
require Newmont to consent to a term or condition of an approval or consent
which Newmont reasonably determines could have a Materially Adverse effect on
Newmont or its Subsidiaries):
(a) to obtain all orders required from the applicable Canadian securities
regulatory Agencies to permit the first resale of:
(i) the Exchangeable Shares issued pursuant to the Arrangement; and
(ii) the Newmont Shares issued from time to time upon exchange of the
Exchangeable Shares,
in each case without qualification with or approval of or the filing of any
prospectus, or the taking of any proceeding with, or the obtaining of any
further order, ruling or consent from, any securities regulatory Agency in
any of the provinces of Canada (other than, with respect to such first
resales, any restrictions on transfer by reason of, among other things, a
holder being a "control person" of Newmont or Acquisitionco or Callco (as
defined in the provisions attaching to the Exchangeable Shares) for purposes
of Canadian federal, provincial or territorial securities Laws or equivalent
Laws of the United States or any of its states);
(b) to cause the Exchangeable Shares to be listed and posted for trading
on the TSE by the Effective Time and to take reasonable steps to maintain
such listings for so long as there are Exchangeable Shares outstanding
(other than those securities held by Newmont or any of its affiliates);
(c) take reasonable steps to ensure that Acquisitionco has, at the
Effective Time and for so long as there are Exchangeable Shares outstanding
(other than those Exchangeable Shares held by Newmont or any of its
affiliates), a "substantial Canadian presence" within the meaning of
subsection 206(1.1) of the ITA;
(d) take reasonable steps to cause the listing and admission to trading
on NYSE of the Newmont Shares to be issued at the Effective Time and from
time to time (i) upon exchange of the Exchangeable Shares, and (ii) upon the
exercise of the Franco-Nevada Options; and
(e) take reasonable steps to ensure that Acquisitionco is, at the
Effective Time and for so long as there are Exchangeable Shares outstanding
(other than those Exchangeable Shares held by Newmont or any of its
affiliates), a "taxable Canadian corporation" and not a "mutual fund
corporation," each within the meaning of the ITA.
F. REGISTRAR AND TRANSFER AGENT.
Franco-Nevada shall permit the registrar and transfer agent for
Franco-Nevada Shares and Franco-Nevada Warrants to act as depositary in
connection with the Arrangement and instruct that transfer agent to furnish to
Newmont (and such persons as it may designate) at such times as it may request
such information and provide to Newmont (and such persons as it may designate)
such other assistance as it may request in connection with the implementation
and completion of the Transactions.
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G. ACCESS TO INFORMATION; CONFIDENTIALITY.
(a) Franco-Nevada shall, and shall cause its Subsidiaries to, afford to
Newmont and to its Representatives, reasonable access during normal business
hours during the period prior to the Effective Time to all of the
properties, books, contracts, commitments, personnel and records of
Franco-Nevada and its Subsidiaries and, during such period, Franco-Nevada
shall, and shall cause each of its Subsidiaries to, furnish promptly to
Newmont (i) a copy of each report, schedule, registration statement and
other document filed by it during such period pursuant to the requirements
of federal, provincial or state securities Laws and (ii) all other
information concerning its business, properties and personnel as Newmont may
reasonably request, including any information with respect to shareholder
approval at the Franco-Nevada Special Meeting and the status of the efforts
to obtain such approval. Such information shall be held in confidence to the
extent required by, and in accordance with, the provisions of the
Confidentiality Agreement.
(b) During the period prior to the Effective Time of the Arrangement,
Newmont shall, and shall cause its Subsidiaries to, furnish promptly to
Franco-Nevada information concerning its business and properties as
Franco-Nevada may reasonably request. Such information shall be held in
confidence to the extent required by, and in accordance with, the provisions
of the Confidentiality Agreement.
H. DUTY TO INFORM.
Each of Franco-Nevada and Newmont shall keep the other apprised of the
status of matters relating to the completion of the Transactions and work
cooperatively in connection with obtaining the requisite approvals and consents
or governmental orders, including:
(a) promptly notifying the other of, and if in writing promptly
furnishing the other with copies of, any communications from or with any
Agency with respect to the Transactions;
(b) permitting the other party to review in advance, and considering in
good faith the view of one another in connection with, any proposed
communication with any Agency in connection with proceedings under or
relating to any applicable Law; and
(c) not agreeing to participate in any meeting or discussion with any
Agency in connection with proceedings under or relating to any applicable
Law unless it consults with the other party in advance, and, to the extent
permitted by such Agency, give the other party the opportunity to attend and
participate.
I. GOVERNANCE.
At the time of completion of the Transactions:
(a) the board of directors of Newmont (or its direct or indirect parent
corporation that issues the shares into which all or substantially all of
the Original Newmont Share are converted or for which they are exchanged on
or before the Effective Date in connection with the transactions
contemplated by the Plan of Arrangement ("NEW NEWMONT")) shall be
constituted with a maximum of 17 directors, including Mr. Seymour Schulich,
Mr. Pierre Lassonde, and one member of the current Franco-Nevada board of
directors who shall be recommended by Franco-Nevada and subject to Newmont's
approval; and
(b) the Chief Executive Officer of Newmont immediately prior to the
Effective Time shall be the Chief Executive Officer of Newmont or New
Newmont, as applicable, the President and Co-Chief Executive Officer of
Franco-Nevada immediately prior to the Effective Time shall be the President
of Newmont or New Newmont, as applicable, and the Chairman of the Board of
Directors and Co-Chief Executive Officer of Franco-Nevada shall be the
Chairman of Newmont's or New Newmont's, as applicable, new merchant banking
Subsidiary.
J. BOARD RECOMMENDATIONS.
The board of directors of Franco-Nevada shall, subject to (S)6.E, recommend
that Franco-Nevada Shareholders approve the Arrangement. The board of directors
of Newmont shall recommend that Newmont Shareholders approve all matters
necessary to consummate the Transactions, subject to applicable Law.
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K. AFFILIATE LETTERS.
Franco-Nevada shall cause each such person who may be at the Effective Time
or was on the date hereof an "affiliate" of Franco-Nevada for purposes of Rule
145 under the Securities Act, to execute and deliver to Newmont no less than 30
days prior to the date of the Franco-Nevada Special Meeting, the written
undertakings in the form attached hereto as Schedule I. No later than 45 days
prior to such date, Franco-Nevada, after consultation with its outside counsel,
shall provide Newmont with a letter (reasonably satisfactory to outside counsel
to Newmont) specifying all of the persons or entities who, in Franco-Nevada's
opinion, may be deemed to be "affiliates" of Franco-Nevada under the preceding
sentence. The foregoing notwithstanding, Newmont shall be entitled to place
legends as specified in Schedule I on the certificates evidencing any of the
Newmont Shares and, to the extent applicable, Exchangeable Shares to be
received by (i) any such "affiliate" of Franco-Nevada specified in such letter
or (ii) any person Newmont reasonably identifies (by written notice to
Franco-Nevada) as being a person who may be deemed an "affiliate" for purposes
of Rule 145 under the Securities Act, pursuant to the terms of this agreement,
and to issue appropriate stop transfer instructions to the transfer agent for
the Newmont Shares and, to the extent applicable, Exchangeable Shares,
consistent with the terms of the affiliate letter in the form of Schedule I,
regardless of whether such person has executed such letter and regardless of
whether such person's name appears on the letter to be delivered pursuant to
the preceding sentence. The limitations on the amount of securities that may be
sold by an "affiliate" pursuant to Rule 144(e) under the Securities Act, as of
the date of this agreement, are set forth on Schedule J.
5. CONDUCT OF BUSINESS
A. CONDUCT OF BUSINESS BY FRANCO-NEVADA.
Prior to the Effective Time, unless Newmont otherwise agrees in writing or
as otherwise expressly contemplated or permitted by this agreement,
Franco-Nevada shall, and shall cause each of its Subsidiaries to, (i) conduct
its business only in, not take any action except in, and maintain its
facilities in, the ordinary course of business consistent with past practice,
(ii) maintain and preserve its business organization and its material rights
and franchises, (iii) retain the services of its officers and key employees,
(iv) maintain relationships with customers, suppliers, lessees, joint venture
partners, licensees, lessors, licensors and other third parties, and (v)
maintain all of its operational assets in their current condition (normal wear
and tear excepted) to the end that the goodwill and ongoing business of
Franco-Nevada and its Subsidiaries shall not be impaired in any material
respect. Without limiting the generality of the foregoing, Franco-Nevada shall
(unless Newmont otherwise agrees in writing or as otherwise expressly
contemplated or permitted by this agreement):
(a) not do, permit any of its Subsidiaries to do or permit to occur any
of the following (directly or indirectly),
(i) issue, grant, sell, transfer, pledge, lease, dispose of, encumber
or agree to issue, grant, sell, pledge, lease, dispose of or encumber,
(A) any Franco-Nevada Shares or other securities entitling the
holder to rights in respect of the securities or assets of
Franco-Nevada or its Subsidiaries, other than pursuant to rights to
acquire such securities existing at the date of this agreement as
disclosed in the Disclosure statement, or
(B) any property or assets of Franco-Nevada or any of its
Subsidiaries, except in the ordinary course of business consistent
with past practice,
(ii) amend or propose to amend the constitutional documents
(including articles or other organizational documents or by-laws) of it
or any of its Subsidiaries,
(iii) declare or make any dividend or other distribution (in cash,
securities or other property) in respect of any securities of it or any
of its Subsidiaries,
8
(iv) redeem, purchase or offer to purchase any securities of its
capital stock, or enter into any agreement, understanding or arrangement
with respect to the voting, registration or repurchase of its capital
stock,
(v) adjust, split, combine or reclassify its capital stock or merge,
consolidate or enter into a joint venture with any person,
(vi) except in accordance with executed agreements of purchase and
sale provided to Newmont before the date of this agreement or as
contemplated in (S)5.A(a)(vii), acquire or agree to acquire (by
purchase, amalgamation, merger or otherwise) any person or assets that
individually exceeds $5 million or, in the aggregate, exceed $10 million,
(vii) make, or commit to make, any capital expenditures that
individually exceeds $10 million or, in the aggregate, exceed $25
million,
(viii) amend or modify, or propose to amend or modify, the
Franco-Nevada Rights Plan, as amended as of the date hereof,
(ix) incur, create, assume, commit to incur, guarantee or otherwise
become liable or responsible for indebtedness for borrowed money, other
than:
(A) advances from Subsidiaries of Franco-Nevada made in the
ordinary course of business consistent with past practice,
(B) advances from Subsidiaries of Franco-Nevada made to fund
expenditures permitted by this agreement, and
(C) pursuant to existing operating lines of credit with third
party lenders as disclosed in the Disclosure Statement,
(x) settle or compromise any suit, claim, action, proceeding,
hearing, notice of violation, demand letter or investigation involving
the possible payment or receipt of amounts that exceed, in the
aggregate, $250,000,
(xi) enter into, adopt or amend any Employee Benefit Plan or
Employment Agreement, except as may be required by applicable Law,
(xii) modify, amend or terminate, or waive, release or assign any
material rights or claims with respect to any confidentiality agreement
to which Franco-Nevada is a party,
(xiii) other than as a result of the Transactions, take any action
that could give rise to a right to severance benefits pursuant to any
employment, severance, termination, change in control or similar
agreements or arrangements,
(xiv) adopt or amend, or increase or accelerate the timing, payment
or vesting of benefits under or funding of, any bonus, profit sharing
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, fund or
arrangement for the benefit or welfare of any current or former
employee, director or consultant,
(xv) enter into any confidentiality agreements or arrangements other
than in the ordinary course of business consistent with past practice,
(xvi) except as otherwise required by Law, make any material Tax
election, settle or compromise any material Tax claim, file any Tax
Return (other than in a manner consistent with past practice) or change
any method of Tax accounting,
(xvii) take any action to exempt or make not subject to the
provisions of any take-over Law or other Law, which purports to limit or
restrict business combinations or the ability to acquire or vote shares,
any person (other than Newmont or its Subsidiaries) or any action taken
thereby, which person or action would have otherwise been subject to the
restrictive provisions thereof and not exempt therefrom,
9
(xviii) make any changes to existing accounting practices, except as
the regular, independent auditors of Franco-Nevada advise in writing are
required by applicable Law or generally accepted accounting principles,
or write up, write down or write off the book value of any assets in
amount that, in aggregate, exceed $500,000, except for depreciation and
amortization in accordance with generally accepted accounting
principles, or
(xix) enter into or modify any employment, severance, collective
bargaining or similar agreements or arrangements with, or take any
action with respect to or grant any salary increases, bonuses, benefits,
severance or termination pay to, any current or former officers,
directors or other employees or consultants;
(b) use its best efforts to cause the current insurance (or re-insurance)
policies of it and its Subsidiaries not to be cancelled or terminated or any
other coverage under those policies to lapse, unless simultaneously with
such termination, cancellation or lapse, replacement policies underwritten
by insurance and re-insurance companies of nationally recognized standing
providing coverage equal to or greater than the coverage under the
cancelled, terminated or lapsed policies for substantially similar premiums
are in full force and effect;
(c) not do or permit any action that would, or could reasonably be
expected to, render any representation or warranty made by it in this
agreement untrue or inaccurate in a manner that would, or could reasonably
be expected to, be Materially Adverse to Franco-Nevada and its Subsidiaries,
taken as a whole;
(d) promptly notify Newmont orally and in writing of any change in the
ordinary course of the business, operations or properties of Franco-Nevada
or its Subsidiaries and of any material complaints, investigations or
hearings (or communications indicating that the same may be contemplated)
that, individually is or in the aggregate are, or could reasonably be
expected to be, Materially Adverse to Franco-Nevada and its Subsidiaries,
taken as a whole;
(e) not implement any other change in the business, affairs,
capitalization or dividend policy of Franco-Nevada or its Subsidiaries that
is, or in the aggregate are, or could reasonably be expected to be,
Materially Adverse to Franco-Nevada and its Subsidiaries, taken as a whole;
and
(f) not enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in this (S)5.A.
B. CONDUCT OF BUSINESS BY NEWMONT.
(a) Prior to the Effective Time, unless Franco-Nevada otherwise agrees in
writing or as otherwise expressly contemplated or permitted by this agreement,
Newmont shall, and shall cause each of its Subsidiaries to, (i) conduct its
business and maintain its facilities in the ordinary course of business
consistent with past practice, (ii) maintain and preserve its business
organization and its material rights and franchises, (iii) retain the services
of its officers and key employees, (iv) maintain relationships with customers,
suppliers, lessees, joint venture partners, licensees, lessors, licensors and
other third parties, and (v) maintain all of its operational assets in their
current condition (normal wear and tear excepted) to the end that the goodwill
and ongoing business of Newmont and its Subsidiaries shall not be impaired in
any material respect. Without limiting the generality of the foregoing, Newmont
shall (unless Franco-Nevada otherwise agrees in writing or as otherwise
expressly contemplated or permitted by this agreement):
(i) not, nor permit any of its Subsidiaries to, redeem, purchase or offer
to purchase any securities of its capital stock, or enter into any
agreement, understanding or arrangement with respect to the repurchase of
its capital stock (except for transactions among Newmont and its presently
existing or future direct or indirect wholly-owned Subsidiaries);
(ii) not make any amendment to its Articles of Incorporation that changes
the fundamental attributes of Newmont Shares;
10
(iii) not make, declare or pay any dividend (other than quarterly
dividends not in excess of $0.03 per share of common stock and $0.8125 per
share of preferred stock, with record and payment dates consistent with past
practice);
(iv) not adjust, split, combine or reclassify its capital stock or,
except in connection with the Transactions, merge or consolidate with any
person (except for transactions among Newmont, New Newmont and their direct
or indirect wholly-owned Subsidiaries);
(v) not incur, create, assume, commit to incur, guarantee or otherwise
become liable or responsible for indebtedness for borrowed money that, in
the aggregate, exceed $200 million, except in the ordinary course of
business consistent with past practice and other than:
(A) advances from Subsidiaries of Newmont made to fund expenditures
permitted by this agreement, and
(B) pursuant to existing operating or replacement lines of credit
with third party lenders;
(vi) not do or permit any action that would, or could reasonably be
expected to, render any representation or warranty made by it in this
agreement untrue or inaccurate in a manner that would, or could reasonably
be expected to be, Materially Adverse to Newmont and its Subsidiaries, taken
as a whole;
(vii) promptly notify Franco-Nevada orally and in writing of any change
in the ordinary course of the business, operations or properties of Newmont
or its Subsidiaries and of any material complaints, investigations or
hearings (or communications indicating that the same may be contemplated)
that, individually is or in the aggregate are, or could reasonably be
expected to be, Materially Adverse to Newmont and its Subsidiaries, taken as
a whole;
(viii) not enter into or modify any contract, agreement, commitment or
arrangement with respect to any of the matters set forth in this (S)5.B; and
(ix) not implement any other change in the business, affairs,
capitalization or dividend policy of Newmont or its Subsidiaries that is, or
in the aggregate are, or could reasonably be expected to be, Materially
Adverse to Newmont and its Subsidiaries, taken as a whole.
(b) In addition, Newmont shall not (unless Newmont first consults with
Franco-Nevada or as otherwise expressly contemplated or permitted by this
agreement) do, permit any of its Subsidiaries to do or permit to occur any of
the following (directly or indirectly), except for transactions among Newmont,
New Newmont and their direct or indirect wholly-owned Subsidiaries:
(i) issue, grant, sell, transfer, pledge, lease, dispose of, encumber or
agree to issue, grant, sell, pledge, lease, dispose of or encumber;
(A) any Newmont Shares or other securities entitling the holder to
rights in respect of the securities or assets of Newmont or its
Subsidiaries, other than pursuant to rights to acquire such securities
existing at the date of this agreement, or
(B) any property or assets of Newmont or any of its Subsidiaries,
except in the ordinary course of business consistent with past practice;
(ii) except in accordance with executed agreements of purchase and sale
provided to Franco-Nevada before the date of this agreement or as
contemplated in (S)5.B(iii) below, acquire or agree to acquire (by purchase,
amalgamation, merger or otherwise) any person or assets that individually
exceeds $50 million or, in the aggregate, exceed $100 million; or
(iii) except as provided in Newmont's regular budget, make, or commit to
make, any capital expenditures that individually exceeds $50 million.
11
6. ALTERNATIVE TRANSACTIONS
A. NON-SOLICITATION; ADVERSE ACTS.
Franco-Nevada shall not (and shall not permit any of its Subsidiaries to),
directly or indirectly, through any of its or its Subsidiaries' Representatives
or otherwise, take any action that may in any way adversely affect or reduce
the likelihood of the successful completion of the Transactions. Without
limiting the foregoing, Franco-Nevada shall not (and shall not permit any of
its Subsidiaries to), directly or indirectly, through any of its or its
Subsidiaries' Representatives or otherwise:
(a) solicit, initiate, encourage, or facilitate (including by way of
furnishing non-public information) any inquiries or proposals regarding an
Alternative Transaction;
(b) participate in any discussions or negotiations regarding any
Alternative Transaction;
(c) approve or recommend any Alternative Transaction; or
(d) accept or enter any agreement, arrangement or understanding related
to any Alternative Transaction.
Additionally, Franco-Nevada shall:
(a) immediately cease and cause to be terminated any existing discussions
or negotiations, directly or indirectly, with any person with respect to any
Alternative Transaction; and
(b) not, directly or indirectly, waive or vary any terms or conditions of
any confidentiality or standstill agreement that it has, as of the date
hereof, entered into with any person considering any Alternative Transaction
and shall immediately request the return (or the deletion from retrieval
systems and data bases or the destruction) of all information.
B. PERMITTED ACTIONS.
Notwithstanding anything in this agreement, nothing shall prevent the board
of directors of Franco-Nevada from:
(a) complying with its obligations under applicable securities Law to
prepare and deliver a directors' circular in response to a take-over bid; and
(b) considering, participating in discussions or negotiations and
entering into confidentiality agreements and providing information, in each
case pursuant to (S)6, regarding an unsolicited BONA FIDE written
Acquisition Proposal that (i) did not result from a breach of (S)6, and (ii)
the board of directors of Franco-Nevada has determined by formal resolution,
in good faith and after consultation with its financial advisors and outside
legal counsel, is a Superior Proposal, but only to the extent that the board
of directors of Franco-Nevada also has determined by formal resolution, in
good faith after consultation with its outside counsel, that the failure to
take such action would reasonably be expected to constitute a breach of its
fiduciary duties.
The board of directors of Franco-Nevada shall not, except in compliance with
(S)6.E and F, approve, recommend, accept, support or enter into any other
agreement, arrangement or understanding in respect of any such Acquisition
Proposal.
C. NOTIFICATION OF ACQUISITION PROPOSAL.
Franco-Nevada shall immediately notify Newmont, at first orally and then
promptly in writing, of any Acquisition Proposal and any inquiry that could
lead to any Alternative Transaction, or any amendments to the foregoing, or any
request for information relating to Franco-Nevada or any of its Subsidiaries in
connection with
12
any Alternative Transaction or for access to the properties, books, or records
of Franco-Nevada or any of its Subsidiaries by any person that may be proposing
to make, or has made, any Alternative Transaction. Such notice shall include a
description of the material terms and conditions of any proposal, the identity
of the person making such proposal, inquiry or contact and such other details
of the proposal, inquiry, contact, discussions or negotiations as Newmont may,
in its sole discretion request, and shall attach copies of all letters,
agreements and other documentation (whether executed or in draft) in respect of
such Alternative Transaction. Franco-Nevada shall keep Newmont informed by way
of further such notices of the status including any change to the material
terms of any such Alternative Transaction or inquiry.
D. ACCESS TO INFORMATION.
If Franco-Nevada receives a request for information from a person that has
made an unsolicited BONA FIDE written Acquisition Proposal that complies with
(S)6.B(b)(i) and (ii), then, and only in such case, the board of directors of
Franco-Nevada may, subject to the execution by such person of a confidentiality
agreement containing terms at least as favourable to Franco-Nevada as those
contained in this agreement and the Confidentiality Agreement, provide such
person with access to information regarding Franco-Nevada and its Subsidiaries
that then has been provided to Newmont; provided that Franco-Nevada sends a
copy of any such confidentiality agreement to Newmont promptly upon its
execution and Franco-Nevada provides Newmont with copies of the information
provided to such person and immediately provides Newmont with access to all
information to which such person was provided access.
E. IMPLEMENTATION OF SUPERIOR PROPOSAL.
Subject to Newmont's rights under (S)6.F, Franco-Nevada may accept, approve
or recommend or enter into an agreement, understanding or arrangement to
implement a Superior Proposal in respect of which there has been no breach of
(S)6 only if:
(a) Franco-Nevada has complied with its obligations under this (S)6 and
has provided Newmont with a copy of all documentation (including unexecuted
draft documentation) relating to the Superior Proposal;
(b) a period (the "RESPONSE PERIOD") of five business days shall have
elapsed from the later of the date on which Newmont received written notice
from the board of directors of Franco-Nevada it has resolved, subject only
to compliance with this (S)6.E, to accept, approve, recommend or enter into
a binding agreement to implement the Superior Proposal and the date Newmont
received all of the documentation described in (S)6.E(a); and
(c) the board of directors of Franco-Nevada has considered any amendment
to the terms of this agreement proposed by Newmont (or on its behalf) before
the end of the Response Period and determined in good faith, after
consultation with its financial advisors and outside legal counsel, that the
Superior Proposal is more favourable to Franco-Nevada Shareholders from a
financial point of view than the Arrangement and the other Transactions
(with the amendments, if any, proposed by Newmont) and that it would be a
breach of its fiduciary duties not to enter into a binding agreement in
respect of the Superior Proposal.
Franco-Nevada shall provide to Newmont the basis for the above determination of
the board of directors of Franco-Nevada in reasonable detail (including copies
of evidence, if any, of financing of any Superior Proposal) promptly upon the
board of directors of Franco-Nevada determining that any Superior Proposal is
more favourable to Franco-Nevada Shareholders from a financial point of view
than the Arrangement and the other Transactions. If the Response Period would
not terminate before the Franco-Nevada Special Meeting, at the request of
Newmont, Franco-Nevada shall adjourn the Franco-Nevada Special Meeting to a
date that is no less than two and no more than five business days after the
Response Period.
F. RESPONSE BY NEWMONT.
During the Response Period, Newmont shall have the right, but not the
obligation, to offer to amend the terms of this agreement. The board of
directors of Franco-Nevada shall review any such offer by Newmont to
13
amend this agreement in good faith, in consultation with its financial advisors
and outside legal counsel, to determine whether the Acquisition Proposal to
which Newmont is responding would be a Superior Proposal when assessed against
Newmont's proposal. If the board of directors of Franco-Nevada does not so
determine by formal resolution, it shall enter into an amended agreement with
Newmont reflecting Newmont's amended proposal. If the board of directors of
Franco-Nevada does so determine and Franco-Nevada has paid (or has caused to be
paid) to Newmont $100 million in immediately available funds to an account
designated by Newmont, Franco-Nevada may approve, recommend, accept or enter
into an agreement, understanding or arrangement to implement the Superior
Proposal; provided that in no event shall the board of directors of
Franco-Nevada take any action that may obligate Franco-Nevada or any other
person to seek to interfere with the completion of the Transactions, or impose
any "break-up," "hello" or other fees or options or rights to acquire assets or
securities, or any other obligations that would survive completion of the
Transactions, on Franco-Nevada or any of its Subsidiaries, property or assets.
Franco-Nevada shall provide to Newmont the basis for the above determinations
of the board of directors of Franco-Nevada in reasonable detail (including
copies of evidence, if any, of financing of any Acquisition Proposal) promptly
upon the board of directors of Franco-Nevada determining that the Acquisition
Proposal remains a Superior Proposal.
G. GENERAL.
Nothing in this (S)6 shall limit the obligation of Franco-Nevada to convene
and hold the Franco-Nevada Special Meeting to consider the Arrangement as
contemplated in (S)1.A. Each successive amendment to any Acquisition Proposal
shall constitute a new Acquisition Proposal for the purposes of (S)6.E and F
and Newmont shall be afforded a new Response Period in respect of each such
Acquisition Proposal.
7. TERMINATION AND AMENDMENT OF AGREEMENT
A. TERMINATION.
The rights and obligations of the parties pursuant to this agreement, other
than pursuant to (S)(S)4.G (as it relates to the confidentiality of
information), 7, 8, 9 and 10, may be terminated at any time before the
Effective Time:
(a) by mutual agreement in writing executed by Franco-Nevada and Newmont
(for greater certainty, without further action on the part of Franco-Nevada
Shareholders if termination occurs after the holding of the Franco-Nevada
Special Meeting);
(b) by Franco-Nevada,
(i) after the Outside Date, if the conditions provided in (S)2.A and
B have not been satisfied or waived by Franco-Nevada on or before the
Outside Date and provided that Franco-Nevada has not failed to perform
any covenant required to be performed by it pursuant to this agreement
(or such failure is not Materially Adverse to Newmont and its
Subsidiaries, taken as a whole) and no representation or warranty made
by Franco-Nevada is untrue in any material respect; or
(ii) at any time, if Newmont Shareholders do not cast (or do not
cause to be cast) sufficient votes at the Newmont Special Meeting to
approve all matters necessary to consummate the transactions
contemplated by this agreement; or
(iii) at any time, if a person other than Newmont or a related entity
of Newmont unconditionally acquires not less than 50.1% of the Normandy
shares, calculated on a fully diluted basis; and
(c) by Newmont,
(i) after the Outside Date, if the conditions provided in (S)2.A and
C have not been satisfied or waived by Newmont on or before the Outside
Date, provided that Newmont has not failed to perform any covenant
required to be performed by it pursuant to this agreement (or such
failure is not
14
Materially Adverse to Franco-Nevada and its Subsidiaries, taken as a
whole) and no representation or warranty made by Newmont is untrue in
any material respect; or
(ii) at any time if the board of directors of Franco-Nevada
(A) does not recommend, or withdraws or modifies in a manner
adverse to Newmont or refuses to affirm (within 5 days of a written
request) its recommendation, that Franco-Nevada Shareholders vote in
favour of the Transactions, or
(B) approves, recommends, accepts or enters into any agreement,
undertaking or arrangement in respect of an Alternative Transaction;
or
(iii) at any time if the Franco-Nevada Special Meeting is cancelled,
adjourned or delayed except as expressly contemplated by this agreement
or agreed to by Newmont in writing;
(iv) at any time, if Franco-Nevada Shareholders do not cast (or do
not cause to be cast) sufficient votes at the Franco-Nevada Special
Meeting to permit completion of the Arrangement; or
(v) at any time, if a person other than Newmont or an affiliate of
Newmont unconditionally acquires not less than 50.1% of the Normandy
shares, calculated on a fully diluted basis.
Neither Franco-Nevada nor Newmont may seek to rely upon any conditions
precedent in (S)2.A, B or C or exercise any termination right arising
therefrom, unless forthwith and in any event prior to the filing of the
articles of arrangement for acceptance by the Director, Franco-Nevada or
Newmont, as the case may be, has delivered a written notice to the other
specifying in reasonable detail all breaches of covenants, representations and
warranties or other matters which Franco-Nevada or Newmont, as the case may be,
are asserting as the basis for the non-fulfilment of the applicable condition
precedent or the exercise of the termination right, as the case may be. If any
such notice is delivered, provided that Franco-Nevada or Newmont, as the case
may be, is proceeding diligently to cure such matter, if such matter is
susceptible of being cured (for greater certainty, except by way of disclosure
in the case of representations and warranties), the other may not terminate
this agreement as a result thereof until the later of the Outside Date and the
expiration of a period of 15 days from such notice (the "TERMINATION PERIOD").
If such notice has been delivered prior to the date of the Franco-Nevada
Special Meeting, such meeting shall, unless the parties agree otherwise, be
postponed or adjourned until the expiry of such period. If such notice has been
delivered prior to the making of the application for the Final Order or the
filing of the articles of arrangement with the Director, such application and
such filing shall be postponed until the expiry of such period. For greater
certainty, if such matter is cured within the Termination Period without being
Materially Adverse to the curing party and its Subsidiaries, taken as a whole,
this agreement may not be terminated as a result of the cured breach.
B. AMENDMENT
This agreement, including the Plan of Arrangement, may be amended by written
agreement of the parties at any time before and after the Franco-Nevada Special
Meeting, but not later than the Effective Date and any such amendment may,
subject to applicable Law or the Interim Order, without limitation:
(a) change the time for performance of any of the obligations or acts of
the parties;
(b) waive any inaccuracies in or modify any representation contained in
this agreement or any document to be delivered pursuant to this agreement;
(c) waive compliance with or modify any of the covenants contained in
this agreement or waive or modify performance of any of the obligations of
the parties; and/or
(d) waive compliance with or modify any condition precedent contained in
this agreement.
15
C. MUTUAL UNDERSTANDING REGARDING AMENDMENTS
If Franco-Nevada or Newmont, as the case may be, shall propose any amendment
or amendments to this agreement or the Plan of Arrangement, the other shall
consider such amendment and if it and its security holders are not prejudiced
by reason of any such amendment, it will cooperate so that such amendment can
be effected subject to applicable Law and the rights of the security holders.
D. APPROVAL OF AMENDMENTS.
Franco-Nevada and Newmont will use all efforts to obtain the approvals of
the Court and Franco-Nevada Shareholders in respect of any amendments to this
agreement, including the Plan of Arrangement, to the extent required by
applicable Law.
8. TERMINATION PAYMENTS
A. PAYMENT TO NEWMONT.
Provided that Newmont has not failed to perform any covenant required to be
performed by it pursuant to this agreement (or such failure is not Materially
Adverse to Franco-Nevada and its Subsidiaries, taken as a whole) and no
representation or warranty made by Newmont in Schedule G is untrue in any
material respect, if Newmont exercises its right of termination pursuant to:
(a) (S)7.A(c)(ii), (iii) or (iv) (where, in the case of (S)7.A(c)(iv), at
the time of the Franco-Nevada Special Meeting, a BONA FIDE Acquisition
Proposal that has been made has not been withdrawn) Franco-Nevada shall
immediately pay (or cause to be paid) to Newmont $100 million in immediately
available funds to an account designated by Newmont; or
(b) pursuant to (S)7.A(c)(iv) (where, at the time of the Franco-Nevada
Special Meeting, any BONA FIDE Acquisition Proposal that has been made has
been withdrawn or no such proposal has been made), Franco-Nevada shall
immediately pay (or cause to be paid) to Newmont $20 million in immediately
available funds to an account designated by Newmont. If, at any time within
twelve months after the date of such payment, Franco-Nevada approves,
recommends, accepts, enters into or consummates an Acquisition Proposal,
Franco-Nevada shall pay (or cause to be paid) to Newmont $80 million in
immediately available funds to an account designated by Newmont upon
consummation of that Acquisition Proposal.
The fees payable pursuant to this (S)8.A shall in no event exceed $100
million.
B. PAYMENT TO FRANCO-NEVADA.
If, after the Franco-Nevada Shareholder Approval is obtained, Newmont's
shareholders do not approve the Transactions (or that part of the Transactions
for which their approval is sought), provided that Franco-Nevada has not failed
to perform any covenant required to be performed by it pursuant to this
agreement (or such failure is not Materially Adverse to Franco-Nevada and its
Subsidiaries or Newmont and its Subsidiaries, in each case taken as a whole)
and no representation or warranty made by Franco-Nevada is untrue in any
material respect, if Franco-Nevada exercises its right of termination pursuant
to (S)7.A(b)(ii), Newmont shall pay to Franco-Nevada $10 million in immediately
available funds to an account designated by Franco-Nevada, for Franco-Nevada's
out-of-pocket expenses.
9. CONFIDENTIALITY AND PUBLIC DISCLOSURE
Franco-Nevada and Newmont shall consult with each other as to the general
nature of any news releases or public statements with respect to this agreement
or the Transactions, and shall use their respective efforts not to issue any
news releases or public statements inconsistent with the results of such
consultations. Subject to applicable law, each party shall use its efforts to
enable the other party to review and comment on all such news
16
releases and public statements prior to the release thereof. The parties agree
to issue jointly the news release in the agreed form with respect to this
agreement and the Transactions following the execution of this agreement in
accordance with (S)1.D. Franco-Nevada and Newmont shall consult with each other
in preparing and making any filings and communications in connection with any
Regulatory Approvals and in seeking any third-party consents contemplated in
(S)4.A.
10. GENERAL
A. DEFINITIONS.
For the purposes of this agreement, those terms defined in Schedule A and
Schedule B shall have the meanings attributed to them in those Schedules.
B. ASSIGNMENT.
This agreement, including (for greater certainty) the Plan of Arrangement,
shall not be assignable by any party except that Newmont may assign any or all
of its rights or obligations (without reducing its own obligations under this
agreement) to one or more of its Subsidiaries or to New Newmont.
C. BINDING EFFECT.
This agreement, including (for greater certainty) the Plan of Arrangement,
shall be binding upon and shall inure to the benefit of and be enforceable by
the parties hereto and their respective successors and permitted assigns. No
third party shall have any rights under this agreement.
D. REPRESENTATIVES.
Each of Franco-Nevada and Newmont shall ensure that its and its
Subsidiaries' Representatives (other than persons who are insiders only as a
result of their shareholdings) are aware of the provisions of this agreement,
and each of Franco-Nevada and Newmont shall be responsible for any breach of
those provisions by any of those persons, respectively.
E. RESPONSIBILITY FOR EXPENSES.
Each party to this agreement shall pay its own expenses incurred in
connection with this agreement and the completion of the transactions that it
contemplates, except as expressly provided in this agreement.
F. TIME.
Time shall be of the essence of this agreement in each and every matter or
thing herein provided.
G. NOTICES.
(a) Each party shall give prompt notice to the other of:
(i) the occurrence or failure to occur of any event that causes, or could
reasonably be expected to cause, any representation or warranty on its part
contained in this agreement to be untrue or inaccurate or, in the case of
Franco-Nevada, that is Materially Adverse to any of Franco-Nevada and its
Subsidiaries; and
(ii) any material breach of its obligations under this agreement,
provided that no such notification shall affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this agreement.
17
(b) Each of Franco-Nevada and Newmont shall give prompt notice to the other
of any previously undisclosed fact of which it becomes aware after the date of
this agreement that is, in the case of Franco-Nevada Materially Adverse to
Franco-Nevada or its Subsidiaries, taken as a whole or, in the case of Newmont,
is Materially Adverse to the ability of Newmont to perform its obligations
under this agreement.
(c) Any notice or other communications required or permitted to be given
under this agreement shall be sufficiently given if delivered in person, by
overnight courier, or if sent by facsimile transmission (provided such
transmission is recorded as being transmitted successfully):
(i) in the case of Franco-Nevada, to the following address:
Franco-Nevada Mining Corporation Limited
Attn: Sharon E. Dowdall
20 Eglinton Avenue West
Suite 1900, P.O. Box 2005
Toronto, Ontario M4R 1K8
Canada
Tel: (416) 480-6491
Fax: (416) 488-6598
(ii) in the case of Newmont, to the following address:
Newmont Mining Corporation
Attn: Britt D. Banks
1700 Lincoln Street
Denver, Colorado 80203
United States of America
Tel: (303) 837-5998
Fax: (303) 837-5810
with a copy to:
Wachtell, Lipton, Rosen & Katz
Attn: David A. Katz
51 West 52nd Street
New York, New York 10019
United States of America
Tel: (212) 403-1000
Fax: (212) 403-2000
and:
Goodmans, LLP
Attn: Jonathan Lampe
250 Yonge Street
Suite 2400
Toronto, Ontario
Canada
Tel: (416) 979-2211
Fax: (416) 979-1234
or at such other address as the party to which such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this section, and if so given the same shall be deemed to
have been received on the date of such delivery or sending.
H. GOVERNING LAW.
This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the laws of Canada applicable herein. Each
party hereto irrevocably submits to the non-exclusive jurisdiction of the
courts of the Province of Ontario with respect to any matter arising hereunder
or related hereto.
18
I. INJUNCTIVE RELIEF.
The parties agree that the remedy at law for any breach of the provisions of
this agreement will be inadequate and that the party that is not in breach, on
any application to a court, shall be entitled to temporary and permanent
injunctive relief, specific performance and any other equitable relief against
the party or parties in breach of the provisions of this agreement.
J. CURRENCY.
Except as expressly indicated otherwise, all sums of money referred to in
this agreement are expressed and shall be payable in United States dollars.
K. ACCOUNTING MATTERS.
All accounting terms used in this agreement shall have the meanings
attributable thereto under GAAP and all determinations of an accounting nature
required to be made in respect of Franco-Nevada shall be made in a manner
consistent with GAAP.
L. KNOWLEDGE.
Where a statement is made "TO THE KNOWLEDGE OF" a party or refers to
information "KNOWN TO" a party it is based on information available to any of
the directors or senior officers of that party after due enquiry.
M. ENTIRE AGREEMENT.
This agreement, including the Plan of Arrangement, constitutes the entire
agreement of the parties with respect to the Transactions, as of the date of
this agreement, and shall supersede all agreements, understanding, negotiations
and discussions whether oral or written, between the parties with respect to
the Transactions on or prior to the date of this agreement, other than the
Confidentiality Agreement.
N. FURTHER ASSURANCES.
Each party shall, from time to time, and at all times hereafter, at the
request of the other party hereto, but without further consideration, do all
such further acts and execute and deliver all such further documents and
instruments as shall be reasonably required in order to fully perform and carry
out the terms and intent hereof. The parties shall act in a commercially
reasonable manner in exercising their rights and performing their duties under
this agreement.
O. WAIVERS AND MODIFICATIONS.
Franco-Nevada and Newmont may waive or consent to the modification of, in
whole or in part, any inaccuracy of any representation or warranty made to it
under this agreement or in any document to be delivered pursuant to this
agreement and may waive or consent to the modification of any or the
obligations contained in this agreement for its benefit or waive or consent to
the modification of any of the obligations of the other party. Any waiver or
consent to the modification of any of the provisions of this agreement, to be
effective, must be in writing executed by the party granting such waiver or
consent.
P. SCHEDULES.
The following are the Schedules to this agreement, which form an integral
part hereof:
Schedule A -- Definitions
Schedule B -- Plan of Arrangement, including Provisions Attaching to the Exchangeable Shares
Schedule C -- Mutual Conditions
Schedule D -- Conditions in Favour of Franco-Nevada
Schedule E -- Conditions in Favour of Newmont
Schedule F -- Representations and Warranties of Franco-Nevada
Schedule G -- Representations and Warranties of Newmont
Schedule H -- Regulatory Approvals
Schedule I -- Form of Franco-Nevada Affiliate Letter
Schedule J -- Securities Act Rule 144(e)
Schedule K -- Support Agreement
Schedule L -- Voting and Exchange Trust Agreement
19
Q. COUNTERPARTS.
This agreement may be signed in any number of counterparts (by facsimile or
otherwise), each of which shall be deemed to be original and all of which, when
taken together, shall be deemed to constitute one and the same instrument. It
shall not be necessary in making proof of this agreement to produce more than
one counterpart.
R. DATE FOR ANY ACTION.
In the event that any date on which any action is required to be taken under
this agreement by either of the parties hereto is not a business day, such
actions shall be required to be taken on by succeeding day which is a business
day at the place where the action is to be taken.
S. INTERPRETATION.
When a reference is made in this agreement to a Section, (S), Exhibit or
Schedule, such reference shall be to a Section or (S) of, or an Exhibit or
Schedule to, this agreement unless otherwise indicated. The table of contents
and headings contained in this agreement are for reference purposes only and
shall not affect in any way the meaning, construction or interpretation of this
agreement.
T. SEVERABILITY.
If any term or other provision of this agreement is invalid, illegal or
incapable of being enforced by any rule or Law, or public policy, all other
conditions and provisions of this agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the Transactions
is not affected in any manner Materially Adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the Transactions are fulfilled
to the maximum extent possible.
IN WITNESS WHEREOF, each of the parties hereto has executed this agreement
as of the date first written above.
FRANCO-NEVADA MINING CORPORATION LIMITED
/S/ SEYMOUR SCHULICH
By: ___________________________________
Name: Seymour Schulich
Title: Chairman and Co-Chief
Executive Officer
NEWMONT MINING CORPORATION
/S/ WAYNE W. MURDY
By: ___________________________________
Name: Wayne W. Murdy
Title: President and Chief
Executive Officer
20
SCHEDULE A
DEFINITIONS
"ACQUISITION PROPOSAL" means any proposal or offer with respect to any
transaction (by purchase, merger, amalgamation, arrangement, business
combination, liquidation, dissolution, recapitalization, take-over bid or
otherwise) that would result in any person (or group of persons) other than
Newmont and its Subsidiaries acquiring (a) assets of Franco-Nevada and/or its
Subsidiaries that are, individually or in the aggregate, material to
Franco-Nevada or any of its Subsidiaries or (b) 20% or more the equity (or
rights thereto) of Franco-Nevada or any of its Subsidiaries.
"ACQUISITIONCO" means the corporation incorporated under the laws of Canada
that issues the Exchangeable Shares pursuant to the Arrangement and, following
the amalgamation of Acquisitionco, Franco-Nevada and others as contemplated in
the Plan of Arrangement, the corporation continuing as a result of that
amalgamation.
"ACT" or the "CBCA" means the CANADA BUSINESS CORPORATIONS ACT, as amended.
"AFFILIATE" has the meaning corresponding to "affiliated companies" in the
SECURITIES ACT (Ontario), as amended.
"AGENCY" means any domestic or foreign court, tribunal, federal, state,
provincial or local government or governmental agency or authority or other
regulatory authority (including the TSE and NYSE) or administrative agency or
commission (including the Ontario Securities Commission and the SEC) or any
elected or appointed public official.
"ALTERNATIVE TRANSACTION" means any Acquisition Proposal or other
transaction that may adversely affect or reduce the likelihood of the
successful completion of any of the Transactions.
"ARRANGEMENT" means an arrangement under (S)192 of the CBCA on the terms and
subject to the conditions set out in the Plan of Arrangement, subject to any
amendments or variations thereto made in accordance with this agreement
(including the Plan of Arrangement) or made at the direction of the Court.
"AUTHORIZED CAPITAL" has the meaning set out in (S)(c) of Schedule F.
"BUSINESS DAY" means any day other than a Saturday, Sunday, a public holiday
or a day on which commercial banks are not open for business in Toronto,
Ontario or New York, New York under applicable Law.
"BUSINESS PERSONNEL" has the meaning set out in (S)(o) of Schedule F.
"CALLCO" means Newmont or a subsidiary of Newmont to be incorporated under
the laws of Nova Scotia or such other jurisdiction as Newmont may determine
prior to the Effective Date, and may, in Newmont's sole discretion, be NSULC.
"CCRA" means the Canada Customs and Revenue Agency.
"CODE" means the United States INTERNAL REVENUE CODE OF 1986, as amended.
"COMPANY PROPERTIES" has the meaning set out in (S)(m) of Schedule F.
"CONFIDENTIALITY AGREEMENT" means the confidentiality agreement dated
September 25, 2001 between Franco-Nevada and Newmont.
21
"CONTRACT" has the meaning set out in (S)(d) of Schedule F.
"COURT" means the Superior Court of Justice of the Province of Ontario.
"DIRECTOR" means the Director appointed pursuant to (S)260 of the CBCA.
"DISCLOSURE STATEMENT" means the statement delivered by Franco-Nevada to
Newmont concurrently with the execution of this agreement.
"EFFECTIVE DATE" means the date on or before the Outside Date on which the
Arrangement becomes effective in accordance with the CBCA and the Final Order.
"EFFECTIVE TIME" means the time on the Effective Date that the Arrangement
becomes effective in accordance with its terms.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan, program, policy,
practices or other arrangement providing benefits to any current or former
employee, officer, consultant or director of Franco-Nevada or any of its
Subsidiaries or any beneficiary or dependent thereof that is sponsored or
maintained by Franco-Nevada or any of its Subsidiaries or to which
Franco-Nevada or any of its Subsidiaries contributes or is obligated to
contribute or with respect to which Franco-Nevada or any of its Subsidiaries
may have liabilities, whether or not written, including any employee welfare
benefit plan within the meaning of (S)3(1) of ERISA, any employee pension
benefit plan within the meaning of (S)3(2) of ERISA (whether or not such plan
is subject to ERISA) and any bonus, incentive, deferred compensation, vacation,
stock purchase, stock option, severance, employment, change of control or
fringe benefit plan, program or agreement.
"EMPLOYMENT AGREEMENT" means a contract, offer, letter or agreement of
Franco-Nevada or of any of its Subsidiaries with or addressed to any individual
who is rendering or has rendered services thereto as an employee or consultant
pursuant to which Franco-Nevada or any of its Subsidiaries has any actual or
contingent liability or obligation to provide compensation and/or benefits in
consideration for past, present or future services.
"ENVIRONMENTAL LAWS" has the meaning set out in (S)(m) of Schedule F.
"ERISA" means the UNITED STATES EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, as amended, and the rules promulgated thereunder.
"EXCHANGE ACT" means the U.S. SECURITIES EXCHANGE ACT OF 1934, as amended.
"EXCHANGEABLE SHARES" means the exchangeable shares in the capital of
Acquisitionco as more particularly described in Appendix 1 to Schedule B.
"EXCHANGE RATIO" means 0.80 Exchangeable Shares or Newmont Shares, as the
case may be, to be paid in consideration of each Franco-Nevada Share pursuant
to the terms of this agreement.
"EXISTING DATA" has the meaning set out in (S)(m) of Schedule F.
"FAIRNESS OPINION" means the opinion of the Financial Advisor to the board
of directors of Franco-Nevada to the effect that, as of the date of the
opinion, the consideration to be received by Franco-Nevada Shareholders
pursuant to the Arrangement is fair to Franco-Nevada Shareholders from a
financial point of view.
"FILED FRANCO-NEVADA PUBLIC DISCLOSURE DOCUMENTS" has the meaning set out in
(S)(g) of Schedule F.
22
"FILED NEWMONT PUBLIC DISCLOSURE DOCUMENTS" has the meaning set out in
(S)(g) of Schedule G.
"FINAL ORDER" means the final order of the Court approving the Arrangement,
as such order may be amended by the Court at any time before the Effective
Time, or if appealed, unless that appeal is withdrawn or denied, as affirmed or
as amended on appeal.
"FINANCIAL ADVISOR" means National Bank Financial Inc.
"FIRPTA" means the FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT, as amended.
"FRANCO-NEVADA" means Franco-Nevada Mining Corporation Limited, a
corporation incorporated under the laws of Canada.
"FRANCO-NEVADA CIRCULAR" means the notice of special meeting and
accompanying management information circular of Franco-Nevada, including all
appendices thereto, to be sent to Franco-Nevada Shareholders in connection with
the Franco-Nevada Special Meeting.
"FRANCO-NEVADA CLASS A WARRANTS" means the Class A Warrants issued by
Franco-Nevada expiring September 15, 2003, of which warrants entitling holders
to purchase 8,985,344 Franco-Nevada Shares (each warrant being exercisable for
4 Franco-Nevada Shares at a price of $50 per share) are issued and outstanding.
"FRANCO-NEVADA CLASS B WARRANTS" means the Class B Warrants issued by
Franco-Nevada expiring November 12, 2003, of which warrants entitling holders
to purchase 6,571,953 Franco-Nevada Shares (each warrant being exercisable for
3.08 Franco-Nevada Shares at a price of $32.47 per share) are issued and
outstanding.
"FRANCO-NEVADA DISCLOSURE DOCUMENTS" means the annual report of
Franco-Nevada for the year ended March 31, 2001, the renewal annual information
form of Franco-Nevada dated March 31, 2001, the notice of annual meeting and
information circular of Franco-Nevada dated May 7, 2001 and all interim
financial statements and reports to shareholders, news releases and other
reports or materials filed by Franco-Nevada with the Ontario Securities
Commission through SEDAR on a non-confidential basis since March 31, 2000
pursuant to applicable Law.
"FRANCO-NEVADA OPTIONS" means collectively, Franco-Nevada Stock Options,
Franco-Nevada Class A Warrants and Franco-Nevada Class B Warrants.
"FRANCO-NEVADA OWNED PROPERTIES" has the meaning set out in (S)(m) of
Schedule F.
"FRANCO-NEVADA PLANS" has the meaning set out in (S)(p) of Schedule F.
"FRANCO-NEVADA PROPERTY" has the meaning set out in (S)(z) of Schedule F.
"FRANCO-NEVADA RIGHTS" means the rights provided for under the Franco-Nevada
Rights Plan.
"FRANCO-NEVADA RIGHTS AGREEMENT" means the shareholder rights agreement
entered into between Franco-Nevada and Montreal Trust Company of Canada and
approved by the Franco-Nevada Shareholders on September 21, 2000.
"FRANCO-NEVADA RIGHTS PLAN" means the shareholder rights plan provided for
in the Franco-Nevada Rights Agreement.
"FRANCO-NEVADA SHAREHOLDER APPROVAL" means approval of the Arrangement by
the affirmative vote of 66 2/3% of the votes cast at a special meeting of the
Franco-Nevada Shareholders called for such purpose.
23
"FRANCO-NEVADA SHAREHOLDERS" means the holders at the relevant time of
Franco-Nevada Shares.
"FRANCO-NEVADA SHARES" means the common shares in the capital of
Franco-Nevada.
"FRANCO-NEVADA SPECIAL MEETING" means the special meeting of Franco-Nevada
Shareholders, including any adjournment thereof, to be called and held in
accordance with the Interim Order to consider the Arrangement.
"FRANCO-NEVADA STOCK OPTIONS" means all options to purchase Franco-Nevada
Shares issued pursuant to the Franco-Nevada employee stock option plan, of
which options entitling holders to purchase a total of 5,040,356 Franco-Nevada
Shares are issued and outstanding.
"FRANCO-NEVADA WARRANTS" means, collectively, the Franco-Nevada Class A
Warrants and the Franco-Nevada Class B Warrants.
"GAAP" or "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means (a) with respect
to Franco-Nevada and its Subsidiaries, Canadian generally accepted accounting
principles as set forth in the Handbook of the Canadian Institute of Chartered
Accountants, as amended from time to time; and (b) with respect to Newmont and
its Subsidiaries, United States generally accepted accounting principles.
"HOLDCO" has the meaning ascribed in (S)2.4 of the Plan of Arrangement;
"HOLDCO SHARES" means all issued and outstanding shares of any particular
Holdco;
"INCLUDING" means "including without limitation" and "INCLUDES" means
"includes without limitation."
"INTERIM ORDER" means an interim order of the Court, as may be amended,
providing for, among other things, the calling and holding of the Franco-Nevada
Special Meeting.
"ITA" means the INCOME TAX ACT (Canada), as now in effect and as it may be
amended before the Effective Time.
"LAW" means all laws, statutes, by-laws, rules, regulations, orders,
decrees, ordinances, protocols, codes, guidelines, policies, notices,
directions and judgements or other requirements of any Agency.
"LIENS" has the meaning set out in (S)(b) of Schedule F.
"MATERIAL EMPLOYMENT AGREEMENT" means an Employment Agreement pursuant to
which Franco-Nevada or any of its Subsidiaries has or could have an obligation
to provide compensation and/or benefits (including, without limitation,
severance pay or benefits) in an amount or having a value in excess of $100,000
per year or $250,000 in the aggregate.
"MATERIALLY ADVERSE" means, with respect to a person, a fact, circumstance,
change, effect, occurrence, event or term that is or could reasonably be
expected to (i) materially and adversely affect the financial condition,
operations, results of operations, business, assets, capital or prospects of
that person, or (ii) prevent such person from performing its obligations under
this agreement, the Transactions or any other agreement contemplated hereby or
thereby.
"MULTIEMPLOYER PLAN" means any "MULTIEMPLOYER PLAN" within the meaning of
((S)4001(a)(3) of ERISA.
"MULTIPLE EMPLOYER PLAN" has the meaning set out in (S)(p) of Schedule F.
24
"NEWMONT CIRCULAR" means the Schedule 14A proxy statement of Newmont,
including all appendices thereto, to be sent to Newmont Shareholders in
connection with the Newmont Special Meeting.
"NEWMONT CONVERTIBLE PREFERRED STOCK" means Newmont Preferred Stock
designated as "$3.25 Convertible Preferred Stock," par value $5.00 per share.
"NEWMONT FILINGS" has the meaning set out in (S)(f) of Schedule F.
"NEWMONT PREFERRED STOCK" means the preferred stock, par value $5.00 per
share, in the capital of Newmont.
"NEWMONT PUBLIC DISCLOSURE DOCUMENTS" has the meaning set out in (S)(e) of
Schedule G.
"NEWMONT RIGHTS" means the rights to purchase shares of Newmont Series A
Preferred Stock.
"NEWMONT RIGHTS AGREEMENT" means the Rights Agreement, dated as of August
31, 2000, by and between Newmont and Mellon Investor Services LLC, as amended
from time to time.
"NEWMONT SERIES A PREFERRED STOCK" means Newmont Preferred Stock designated
as the "Series A Junior Participating Preferred Stock," par value $5.00 per
share.
"NEWMONT SHAREHOLDERS" means the holders at the relevant time of Newmont
Shares.
"NEWMONT SHARES" means the Original Newmont Shares or the common stock of
the corporation into which all or substantially all of the Original Newmont
Shares are converted or for which they are exchanged on or before the Effective
Date in connection with the transactions contemplated by the Plan of
Arrangement, and any other securities into which such shares may be changed.
"NEWMONT SPECIAL MEETING" means the meeting of Newmont Shareholders,
including any adjournment thereof, to be called and held to consider all
actions necessary to consummate the transactions contemplated by this agreement.
"NEW NEWMONT" has the meaning set out in (S)4.I.
"NORMANDY" means Normandy Mining Limited, a corporation incorporated under
the laws of Australia.
"NYSE" means The New York Stock Exchange or its successor.
"NSULC" means a Nova Scotia Unlimited Liability Company and direct
wholly-owned Subsidiary of New Newmont (or direct or indirect wholly-owned
Subsidiary of Newmont) to be formed under the laws of the Province of Nova
Scotia.
"ORIGINAL NEWMONT SHARES" means the common stock, par value $1.60 per share,
in the capital of Newmont.
"OSC" means the Ontario Securities Commission.
"OUTSIDE DATE" means October 31, 2002 or such later date to which each of
Franco-Nevada and Newmont may agree in writing.
"PBGC" has the meaning set out in (S)(p) of Schedule F.
25
"PERMITS" has the meaning set out in (S)(d) of Schedule F.
"PERSON" includes any individual, firm, partnership, limited partnership,
joint venture, venture capital fund, limited liability company, unlimited
liability company, association, trust, trustee, executor, administrator, legal
personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, Agency, syndicate or other entity,
whether or not having legal status.
"PLAN" means any Employee Benefit Plan other than a Multiemployer Plan.
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in the
form and content of Schedule B annexed to the Arrangement Agreement, and any
amendments or variations thereto made in accordance with (S)7.B of the
Arrangement Agreement or (S)6 of the Plan of Arrangement or made at the
direction of the Court.
"PROXY STATEMENT" has the meaning set out in (S)(d) of Schedule F.
"PUBLIC DISCLOSURE DOCUMENTS" has the meaning set out in (S)(e) of Schedule
F.
"REGULATORY APPROVALS" means those sanctions, rulings, consents, orders,
exemptions, permits and other approvals (including the lapse, without
objection, of a prescribed time under a statute or regulation that states that
a transaction may be implemented if a time lapses following the giving of
notice of an objection being made by an Agency), including those set out on
Schedule H.
"REPRESENTATIVES" of a person means, collectively, the directors, officers,
employees, insiders, professional advisors, agents or other authorized
representatives of such person.
"SAFETY ACTS" has the meaning set out in (S)(x) of Schedule F.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means the U.S. SECURITIES ACT OF 1933, as amended.
"SECURITIES EXCHANGE ACT" means the U.S. SECURITIES EXCHANGE ACT OF 1934, as
amended.
"SUBSIDIARIES" means in respect of a person, each of the corporate entities,
partnerships and other entities over which it exercises direction or control.
"SUPERIOR PROPOSAL" means a written, unsolicited BONA FIDE Alternative
Transaction for the acquisition of all or substantially all of the assets of
Franco-Nevada and its Subsidiaries or more than 50% of the Franco-Nevada Shares
(calculated on a fully-diluted basis) and in respect of which the board of
directors of Franco-Nevada has:
(i) received evidence satisfactory to it, and in good faith and after
consultation with its financial advisors, that the proposal is fully
financed, and
(ii) determined by formal resolution, in good faith and after
consultation with its financial advisors and outside legal counsel,
(A) is reasonably capable of being completed (taking into account all
legal, financial, regulatory and other aspects of such proposal and the
party making such proposal), and
(B) would, if consummated in accordance with its terms, result in a
transaction more favourable to Franco-Nevada Shareholders from a
financial point of view than the Arrangement and the other Transactions.
26
"TAX" and "TAXES" has the meaning set out in (S)(1) of Schedule F.
"TAX RETURN" has the meaning set out in (S)(1) of Schedule F.
"TRANSACTIONS" means the Arrangement and the other transactions related to
the acquisition of Franco-Nevada by Newmont contemplated by this agreement and
the other agreements contemplated hereby.
"TSE" means The Toronto Stock Exchange or its successor.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as those
terms are defined in Part I of Subtitle E of Title IV of ERISA.
27
SCHEDULE B
PLAN OF ARRANGEMENT
SECTION 1--INTERPRETATION
1.1 DEFINITIONS. In this Plan of Arrangement:
"ACQUISITIONCO" means the corporation incorporated under the laws of
Canada that issues the Exchangeable Shares pursuant to the Arrangement and,
following the amalgamation of Acquisitionco, Franco-Nevada and others as
contemplated herein, the corporation continuing as a result of that
amalgamation.
"AFFILIATE" has the meaning corresponding to "affiliated companies" in
the SECURITIES ACT (Ontario), as amended.
"AGENCY" means any domestic or foreign court, tribunal, federal, state,
provincial or local government or governmental agency or authority or other
regulatory authority (including The Toronto Stock Exchange and the New York
Stock Exchange) or administrative agency or commission (including the
Ontario Securities Commission and the U.S. Securities and Exchange
Commission) or any elected or appointed public official.
"ANCILLARY RIGHTS" means the voting rights and any other rights of the
holders of Exchangeable Shares under the Voting and Exchange Trust Agreement
and the Support Agreement.
"ARRANGEMENT" means an arrangement under (S)192 of the CBCA on the terms
and subject to the conditions set out in this Plan of Arrangement, subject
to any amendments or variations thereto made in accordance with this Plan of
Arrangement or made at the direction of the Court.
"ARRANGEMENT AGREEMENT" means the arrangement agreement made as of the
14/th/ day of November, 2001 between Franco-Nevada and Newmont to which this
Schedule B is attached and forms a part.
"BUSINESS DAY" means any day other than a Saturday, Sunday, a public
holiday or a day on which commercial banks are not open for business in
Toronto, Ontario or New York, New York under applicable Law.
"CALLCO" means Newmont or a subsidiary of Newmont to be incorporated
under the laws of Nova Scotia or such other jurisdiction as Newmont may
determine prior to the Effective Date, and may, in Newmont's sole
discretion, be NSULC.
"CBCA" means the CANADA BUSINESS CORPORATIONS ACT, as amended.
"CCRA" means the Canada Customs and Revenue Agency.
"COURT" means the Superior Court of Justice of the Province of Ontario.
"CURRENT MARKET PRICE" has the meaning set out in the Exchangeable Share
Provisions.
"DISSENTING SHAREHOLDER" means holders of Franco-Nevada Shares that have
exercised Dissent Rights.
"DISSENT RIGHTS" has the meaning set out in (S)3.1.
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"DIVIDEND AMOUNT" means an amount equal to, and in full satisfaction of,
all declared and unpaid dividends on an Exchangeable Share held by a holder
on any dividend record date which occurred prior to the date of purchase,
redemption or other acquisition of such share by Callco or Newmont from such
holder.
"EFFECTIVE DATE" means the date on or before the Outside Date on which
the Arrangement becomes effective in accordance with the CBCA and the Final
Order.
"EFFECTIVE TIME" means the time on the Effective Date that the
Arrangement becomes effective in accordance with its terms.
"ELECTION DEADLINE" means 5:00 p.m. (Toronto time) at the place of
deposit on the date which is two business days prior to the date of the
Franco-Nevada Special Meeting.
"ELIGIBLE HOLDER" means a Franco-Nevada Shareholder or Holdco Shareholder
who is (i) a resident of Canada for the purposes of the ITA, (ii) a
non-resident of Canada and for whom the Franco-Nevada Shares or Holdco
Shares, as the case may be, constitute "taxable Canadian property," all for
the purposes of the ITA, or (iii) a partnership if one or more of the
partners would otherwise be an Eligible Holder. In addition, in order to be
an Eligible Holder, a Franco-Nevada Shareholder or Holdco Shareholder, as
the case may be, must forward a Tax Election Package to the Transfer Agent
on or before the date which is 90 days following the Effective Date.
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges,
restrictions and conditions attaching to the Exchangeable Shares, which
rights, privileges, restrictions and conditions shall be as set out in
Appendix 1.
"EXCHANGEABLE SHARES" means the exchangeable shares in the capital of
Acquisitionco as more particularly described in Appendix 1 to Schedule B.
"FINAL ORDER" means the final order of the Court approving the
Arrangement, as such order may be amended by the Court at any time before
the Effective Time, or if appealed, unless that appeal is withdrawn or
denied, as affirmed or as amended on appeal.
"FRANCO-NEVADA" means Franco-Nevada Mining Corporation Limited, a
corporation incorporated under the laws of Canada.
"FRANCO-NEVADA CIRCULAR" means the notice of special meeting and
accompanying management information circular of Franco-Nevada, including all
appendices thereto, to be sent to Franco-Nevada Shareholders in connection
with the Franco-Nevada Special Meeting.
"FRANCO-NEVADA CLASS A WARRANTS" means the Class A Warrants issued by
Franco-Nevada expiring September 15, 2003, of which warrants entitling
holders to purchase 8,985,344 Franco-Nevada Shares (each warrant being
exercisable for 4 Franco-Nevada Shares at a price of $50 per share) are
issued and outstanding.
"FRANCO-NEVADA CLASS B WARRANTS" means the Class B Warrants issued by
Franco-Nevada expiring November 12, 2003, of which warrants entitling
holders to purchase 6,571,953 Franco-Nevada Shares (each warrant being
exercisable for 3.08 Franco-Nevada Shares at a price of $32.47 per share)
are issued and outstanding.
"FRANCO-NEVADA OPTIONS" means collectively, the Franco-Nevada Stock
Options, the Franco-Nevada Class A Warrants and the Franco-Nevada Class B
Warrants.
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"FRANCO-NEVADA SHAREHOLDERS" means the holders at the relevant time of
Franco-Nevada Shares.
"FRANCO-NEVADA SHARES" means common shares in the capital of
Franco-Nevada.
"FRANCO-NEVADA SPECIAL MEETING" means the special meeting of
Franco-Nevada Shareholders, including any adjournment thereof, to be called
and held in accordance with the Interim Order to consider the Arrangement.
"FRANCO-NEVADA STOCK OPTIONS" means all options to purchase Franco-Nevada
Shares issued pursuant to the Franco-Nevada employee stock option plan, of
which options entitling holders to purchase a total of 5,040,356
Franco-Nevada Shares are issued and outstanding.
"HOLDCO" has the meaning ascribed in (S)2.4.
"HOLDCO LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of
transmittal and election form for use by holders of Holdco Shares, in the
form accompanying the Franco-Nevada Circular.
"HOLDCO SHAREHOLDERS" means the holders at the relevant time of Holdco
Shares.
"HOLDCO SHARES" means all issued and outstanding shares of any particular
Holdco.
"INCLUDING" means "including without limitation" and "INCLUDES" means
"includes without limitation".
"INTERIM ORDER" means an interim order of the Court, as may be amended,
providing for, among other things, the calling and holding of the
Franco-Nevada Special Meeting.
"ITA" means the INCOME TAX ACT (Canada), as now in effect and as it may
be amended before the Effective Time.
"LAW" means all laws, statutes, by-laws, rules, regulations, orders,
decrees, ordinances, protocols, codes, guidelines, policies, notices,
directions and judgements or other requirements of any Agency.
"LETTER OF TRANSMITTAL AND ELECTION FORM" means the letter of transmittal
and election form for use by holders of Franco-Nevada Shares (other than
Holdcos), in the form accompanying the Franco-Nevada Circular.
"LIQUIDATION AMOUNT" has the meaning set out in the Exchangeable Share
Provisions.
"LIQUIDATION DATE" has the meaning set out in the Exchangeable Share
Provisions.
"NEWMONT" means Newmont Mining Company, a corporation existing under the
laws of Delaware, or its new, direct or indirect, parent corporation that
issues the shares into which the Original Newmont Shares are converted or
for which they are exchanged on or before the Effective Date in connection
with the transactions contemplated by the Plan of Arrangement, or such other
corporation that at the time is the issuer of the Newmont Shares.
"NEWMONT CIRCULAR" means the proxy statement of Newmont, including all
appendices thereto, to be sent to Newmont Shareholders in connection with
the Newmont Special Meeting.
"NEWMONT SHAREHOLDERS" means the holders at the relevant time of Newmont
Shares.
"NEWMONT SHARES" means the Original Newmont Shares or the common stock of
the corporation into which all or substantially all of the Original Newmont
Shares are converted or for which they are exchanged
30
on or before the Effective Date in connection with the transactions
contemplated herein, and any other securities into which such shares may be
changed.
"NEWMONT SPECIAL MEETING" means the meeting of Newmont Shareholders,
including any adjournment thereof, to be called and held to consider all
actions necessary to consummate the transactions contemplated by the
Arrangement Agreement.
"NSULC" means a Nova Scotia Unlimited Liability Company and a direct or
indirect subsidiary of Newmont to be formed under the laws of the Province
of Nova Scotia.
"ORIGINAL NEWMONT SHARES" means the common stock, par value U.S.$1.60 per
share, in the capital of Newmont.
"OUTSIDE DATE" means October 31, 2002 or such later date to which each of
Franco-Nevada and Newmont may agree in writing.
"PERSON" includes any individual, firm, partnership, limited partnership,
joint venture, venture capital fund, limited liability company, unlimited
liability company, association, trust, trustee, executor, administrator,
legal personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, Agency, syndicate or other
entity, whether or not having legal status.
"PLAN OF ARRANGEMENT" means this plan of arrangement.
"REDEMPTION DATE" has the meaning set out in the Exchangeable Share
Provisions.
"SPECIAL SHARES" means the special shares in the capital of Acquisitionco.
"SPECIAL VOTING SHARE" means the special voting share in the capital of
Newmont having substantially the rights, privileges, restrictions and
conditions described in the Voting and Exchange Trust Agreement.
"SUPPORT AGREEMENT" means an agreement to be made among Newmont, Callco
and Acquisitionco in connection with this Plan of Arrangement substantially
in the form and substance of Schedule K to the Arrangement Agreement.
"TAX ELECTION PACKAGE" means two copies of CCRA form T-2057, or, if the
Franco-Nevada Shareholder or Holdco Shareholder (as the case may be) is a
partnership, two copies of CCRA form T-2058 and two copies of any applicable
equivalent provincial or territorial election form, which forms have been
duly and properly completed and executed by the Franco-Nevada Shareholder or
Holdco Shareholder, as the case may be, in accordance with the rules
contained in the ITA or the relevant provincial legislation. At the option
of the Franco-Nevada Shareholder or Holdco Shareholder, as the case may be,
the Tax Election Package may also contain two copies of an election pursuant
to section 57.9 of the CORPORATIONS TAX ACT (Ontario) or analagous
provincial or territorial legislation.
"TRANSFER AGENT" means Computershare Trust Company of Canada or such
other person as may from time to time be appointed by Acquisitionco as the
registrar and transfer agent for the Exchangeable Shares.
"VOTING AND EXCHANGE TRUST AGREEMENT" means an agreement to be made among
Newmont, Acquisitionco and the Trustee (as defined in the Exchangeable Share
Provisions) in connection with this Plan of Arrangement substantially in the
form of Schedule L to the Arrangement Agreement.
1.2 HEADINGS AND REFERENCES. The division of this Plan of Arrangement into
Sections and the insertion of headings are for convenience of reference only
and do not affect the construction or interpretation of this Plan of
Arrangement. Unless otherwise specified, references to Sections are to Sections
of this Plan of Arrangement.
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1.3 CURRENCY. Except as expressly indicated otherwise, all sums of money
referred to in this Plan of Arrangement are expressed and shall be payable in
Canadian dollars.
1.4 TIME. Time shall be of the essence in each and every matter or thing
herein provided. Unless otherwise indicated, all times expressed herein are
local time at, Toronto, Ontario.
SECTION 2--THE ARRANGEMENT
2.1 BINDING EFFECT. Subject to the terms of the Arrangement Agreement, the
Arrangement will become effective at, and be binding at and after, the
Effective Time, on Franco-Nevada and Newmont and all holders and beneficial
holders of Franco-Nevada Shares.
2.2 PRE-ARRANGEMENT TRANSACTIONS. Subject to such amendments, deletions,
modifications or additions as Newmont deems necessary or advisable, the
following transactions (among others) shall occur prior to the Effective Time
but in connection with the Arrangement:
(a) a corporation ("NEW NEWMONT") shall be incorporated as a subsidiary
of Newmont. An additional new U.S. corporation ("NEWMONT ACQUISITIONCO")
shall be incorporated as a subsidiary of New Newmont; and
(b) Newmont shall merge with Newmont Acquisitionco, with Newmont being
the surviving corporation, upon which merger, all common shares in the
capital of Newmont shall be exchanged for common shares in the capital of
New Newmont (subject to the rights of dissenting shareholders, if any).
2.3 THE ARRANGEMENT. Commencing at the Effective Time on the Effective Date,
subject to the terms and conditions of the Arrangement Agreement, the following
shall occur as part of the Arrangement and shall be deemed to occur in the
following order without any further act or formality:
(a) each Holdco Share shall be acquired, at the option of the holder
thereof (provided that the Holdco Shares of a particular Holdco must be all
acquired by Acquisitionco or all acquired by NSULC, and shall not be
acquired by a combination of Acquisitionco and NSULC), by either
Acquisitionco or NSULC (and failing such choice by NSULC) and the holder
(or, in the case of (i) below, holders) of such Holdco Shares shall be
entitled to receive in consideration therefor, (in the case of (i) below,
pro rata to the number of Holdco Shares held by the holder if more than one
holder),
(i) if the Holdco Shares are sold to Acquisitionco, 0.80 Exchangeable
Shares (plus the Ancillary Rights granted in connection therewith) per
Franco-Nevada Share owned by the Holdco, or
(ii) if the Holdco Shares are sold to NSULC, 0.80 Newmont Shares per
Franco-Nevada Share owned by the Holdco;
(b) each issued and outstanding Franco-Nevada Share (other than
Franco-Nevada Shares owned by Holdcos in respect of which (S)2.3(a) applies)
shall be acquired, at the option of the holder thereof, by (except as
provided below) either Acquisitionco or NSULC (and failing such choice by
NSULC) and each Franco-Nevada Shareholder shall be entitled to receive in
consideration therefor,
(i) in the case of a Dissenting Shareholder, the fair value of each
Franco-Nevada Share in respect of which he or she dissents in accordance
and upon compliance with (S)3, and
(ii) in the case of every other Franco-Nevada Shareholder, either
(A) 0.80 Exchangeable Shares (plus the Ancillary Rights granted in
connection therewith) per Franco-Nevada Share acquired by
Acquisitionco, or
(B) 0.80 Newmont Shares per Franco-Nevada Share acquired by NSULC;
(c) Newmont shall issue to and deposit with the Transfer Agent the
Special Voting Share, in consideration of the payment to Newmont by
Franco-Nevada on behalf of the Franco-Nevada Shareholders
32
of one dollar ($1.00), to be thereafter held of record by the Transfer Agent
as trustee for and on behalf of, and for the use and benefit of, the holders
of the Exchangeable Shares in accordance with the Voting and Exchange Trust
Agreement;
(d) in accordance with the terms of the Franco-Nevada Options, each
holder of a Franco-Nevada Option shall be entitled to receive upon the
subsequent exercise of such holder's Franco-Nevada Option, in accordance
with its terms, and shall accept in lieu of the number of Franco-Nevada
Shares to which such holder was theretofore entitled upon such exercise but
for the same aggregate consideration payable therefor, the aggregate number
of Newmont Shares, that such holder would have been entitled to receive as a
result of the transactions contemplated by this Plan of Arrangement, if, on
the Effective Date, such holder had been the registered holder of the number
of Franco-Nevada Shares to which such holder was theretofore entitled upon
such exercise. For example, a holder of ten Franco-Nevada Class A Warrants
would be entitled to receive new warrants bearing the same terms and
conditions except that such warrants would be exercisable for 32 (i.e., 10 x
4 x 0.80) Newmont Shares for a total exercise price of $200. If the
foregoing results in the issuance of a fraction of a Newmont Share, then the
number of Newmont Shares otherwise issued shall be rounded down to the next
whole Newmont Share and the total exercise price for the Newmont Shares will
be reduced by the exercise price of such fractional Newmont Share (rounded
up to the nearest cent);
(e) each issued and outstanding Franco-Nevada Share and Holdco Share
acquired by NSULC will be transferred by NSULC to Acquisitionco in
consideration for the issuance of 1000 Special Shares; and
(f) following the transactions set out in (S)2.3(a) to (S)2.3(e),
Acquisitionco, each Holdco and Franco-Nevada shall amalgamate pursuant to
the provisions of the CBCA, as more fully described below.
2.4 HOLDCO ALTERNATIVE. Each Franco-Nevada Shareholder shall be entitled to
transfer its Franco-Nevada Shares to a newly-incorporated corporation (a
"HOLDCO") and sell the Holdco Shares to either NSULC or Acquisitionco as
provided in (S)2.3(a) provided that each of the following conditions are
satisfied on or prior to and as of the Effective Date:
(a) the Franco-Nevada Shareholder is a resident of Canada for the
purposes of the ITA;
(b) Holdco is incorporated no earlier than 60 days prior to the Effective
Date, under the CBCA;
(c) the Franco-Nevada Shareholder transfers its Franco-Nevada Shares to
Holdco solely in consideration for the Holdco Shares;
(d) Holdco has no indebtedness or liabilities and owns no assets other
than the Franco-Nevada Shares;
(e) the Franco-Nevada Shareholder indemnifies Newmont, Franco-Nevada,
NSULC and Acquisitionco for any and all liabilities of Holdco (other than
tax liabilities of Holdco that arise solely as a result of the tax status of
Newmont, NSULC or Acquisitionco as a "financial institution" for purposes of
the ITA) in a form satisfactory to Newmont in its sole discretion, and such
Franco-Nevada Shareholder either has net assets as reflected on its audited
financial statements for its most recently ended fiscal year which are
satisfactory to Newmont or provides Newmont with security satisfactory to
Newmont in respect of such shareholder's indemnification obligations as set
out above;
(f) prior to the Effective Date, Holdco (i) declares one or more stock
dividends which (if the Holdco Shares are to be acquired by Acquisitionco)
may be in the form of preferred shares of Holdco that are converted into
common shares of Holdco prior to the Effective Date, (ii) increases the
stated capital of the Holdco Shares or (iii) (if the Holdco Shares are to be
acquired by Acquisitionco) declares one or more cash dividends, provided
that such cash is used to subscribe, directly or indirectly, for shares of
Holdco;
(g) on the Effective Date, Holdco has no issued shares outstanding other
than the shares described above and such shares will be owned by the
Franco-Nevada Shareholder (and, if the Holdco Shares are to be acquired by
Acquisitionco, one or more of its wholly-owned subsidiaries);
33
(h) on or prior to the Effective Date, Holdco has never entered into any
transaction (or conducted any business or operations or engaged in any
activity) other than those described herein;
(i) other than as provided (f) above, Holdco will not declare or pay any
dividends or other distributions;
(j) the Franco-Nevada Shareholder shall prepare and file all income tax
returns of its Holdco in respect of the taxation year-end of such Holdco
ending immediately prior to the acquisition of such Holdco Shares by
Acquisitionco or NSULC, as the case may be, subject to Newmont's right to
approve all such returns as to form and substance;
(k) the Franco-Nevada Shareholder provides Franco-Nevada and Newmont with
copies of all documents necessary to effect the transactions contemplated in
this (S)2.4 at least ten days prior to the Effective Date, which documents
must be approved by both Franco-Nevada and Newmont in their sole discretion;
and
(l) the Franco-Nevada Shareholder and its Holdco execute a share purchase
agreement, in the form required by Newmont, acting reasonably, providing
for, among other things the sale of the Holdco Shares to either NSULC or
Acquisitionco, and containing the terms and conditions, among others, set
out in (S)2.4(a) - (k).
2.5 AMALGAMATION OF HOLDCOS, ACQUISITIONCO AND FRANCO-NEVADA. Franco-Nevada,
Acquisitionco and all of the Holdcos shall amalgamate and continue as one
corporation (Franco-Nevada) under the CBCA, with the effect described below
unless and until otherwise determined in the manner required by Law or by
Acquisitionco, its directors or shareholders, and the following shall apply:
(a) NAME. The name of the amalgamated corporation shall be Franco-Nevada
Mining Corporation Limited.
(b) REGISTERED OFFICE. The registered office of the amalgamated
corporation shall be located in the City of Toronto in the Province of
Ontario. The address of the registered office of the amalgamated corporation
shall be . .
(c) BUSINESS AND POWERS. There shall be no restrictions on the business
that the amalgamated corporation may carry on or on the powers it may
exercise.
(d) AUTHORIZED SHARE CAPITAL. The amalgamated corporation shall be
authorized to issue an unlimited number of common shares, an unlimited
number of Special Shares and an unlimited number of Exchangeable Shares.
(e) SHARES. Each common share in the capital of Acquisitionco shall
become one common share in the capital of the amalgamated corporation. Each
Special Share in the capital of Acquisitionco shall become one Special Share
in the capital of the amalgamated corporation. Each Exchangeable Share in
the capital of Acquisitionco shall become one Exchangeable Share in the
capital of the amalgamated corporation. Each share in the capital of
Franco-Nevada, and each share in the capital of each Holdco, shall be
cancelled.
(f) NUMBER OF DIRECTORS. The number of directors of the amalgamated
corporation shall be not less than one (1) and not more than ten (10) as the
shareholders of the amalgamated corporation may from time to time determine
by special resolution or, if empowered to do so by special resolution, as
the directors of the amalgamated corporation may from time to time determine.
(g) INITIAL DIRECTORS. The initial directors of the amalgamated
corporation shall be . , . , and . .
(h) BY-LAWS. The by-laws of the amalgamated corporation shall be the same
as the by-laws of Acquisitionco.
(i) STATED CAPITAL. For the purposes of the CBCA, there shall be added to
the stated capital of the amalgamated corporation in respect of the common
shares of the amalgamated corporation, the aggregate
34
amount of the stated capital of the common shares of Acquisitionco. There
shall be added to the stated capital of the amalgamated corporation in
respect of the Special Shares the aggregate amount of the stated capital of
the Special Shares of Acquisitionco. There shall be added to the stated
capital of the amalgamated corporation in respect of the Exchangeable Shares
of the amalgamated corporation, the aggregate amount of the stated capital
of the Exchangeable Shares of Acquisitionco. The amalgamated corporation
shall elect in its return of income for its first taxation year to have the
provisions of subsection 87(3.1) of the ITA apply.
2.6 ELECTIONS.
(a) Each person who, at or prior to the Election Deadline, is a holder of
record of Franco-Nevada Shares or Holdco Shares will be entitled, with
respect to their shares, to make an election to receive either (i)
Exchangeable Shares, or (ii) Newmont Shares, in exchange for such person's
Franco-Nevada Shares or Holdco Shares, as the case may be, all on the basis
set forth herein (including the provisions of (S)2.3) and in the Letter of
Transmittal and Election Form or the Holdco Letter of Transmittal and
Election Form, as the case may be.
(b) Franco-Nevada Shareholders and Holdco Shareholders who are Eligible
Holders, other than any such person who is exempt under the provisions of
the ITA from tax under the ITA, who are entitled to receive Exchangeable
Shares under the Arrangement shall be entitled to make an income tax
election pursuant to subsection 85(1) of the ITA or, if the person is a
partnership, subsection 85(2) of the ITA (and in each case, where
applicable, the analogous provisions of provincial income tax Law) with
respect to the transfer of their Franco-Nevada Shares or their Holdco
Shares, as the case may be, to Acquisitionco, by providing the Tax Election
Package to the Transfer Agent within 90 days following the Effective Date,
duly completed with the details of the number of Franco-Nevada Shares or
Holdco Shares transferred and the applicable agreed amounts. Thereafter,
subject to the Tax Election Package being correct and complete and complying
with the provisions of the ITA (or applicable provincial income or corporate
tax Law), the relevant forms will be signed by Acquisitionco and returned to
such persons within 30 days after the receipt thereof by the Transfer Agent
for filing with the CCRA (or the applicable provincial taxing Agency).
Acquisitionco will not be responsible for the proper completion of the Tax
Election Package and, except for Acquisitionco's obligation to return duly
completed Tax Election Packages which are received by the Transfer Agent
within 90 days of the Effective Date, within 30 days after the receipt
thereof by the Transfer Agent, Acquisitionco will not be responsible for any
taxes, interest or penalties resulting from the failure by a Franco-Nevada
Shareholder or by a Holdco Shareholder to properly complete or file the
necessary election forms in the form and manner and within the time
prescribed by the ITA (or any applicable provincial legislation). In its
sole discretion, Acquisitionco may choose to sign and return Tax Election
Packages received more than 90 days following the Effective Date, but
Acquisitionco will have no obligation to do so.
2.7 SHARE REGISTERS. Every person from whom a Franco-Nevada Share is
acquired pursuant to the Arrangement shall be removed from the register of
holders of Franco-Nevada Shares at the time of that acquisition pursuant to the
Arrangement and shall cease to have any rights in respect of such Franco-Nevada
Shares, and the person that acquires those shares pursuant to the Arrangement
will be added to that register at that time and shall be entitled as of the
Effective Time to all of the rights and privileges attached to the
Franco-Nevada Shares. Every person who acquires Exchangeable Shares or Newmont
Shares pursuant to the Arrangement shall be added to the register of holders of
Exchangeable Shares and Newmont Shares, respectively, and shall be entitled as
of the Effective Time to all of the rights and privileges attached to the
Exchangeable Shares or Newmont Shares, as the case may be.
2.8 ADJUSTMENTS TO CONSIDERATION. The consideration to be paid pursuant to
(S)2.3 shall be adjusted to reflect fully the effect of any stock split,
reverse split, stock dividend (including any dividend or distribution of
securities convertible into Newmont Shares or Franco-Nevada Shares, other than
stock dividends paid in lieu of ordinary course dividends), reorganization,
recapitalization or other like change with respect to Newmont Shares or
Franco-Nevada Shares occurring after the date of the Arrangement Agreement and
prior to the Effective Time.
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2.9 AFFILIATE LETTERS. Notwithstanding (S)2.3, no Franco-Nevada Shareholder
that is an "affiliate" of Franco-Nevada for the purposes of Rule 145(c) under
the U.S. SECURITIES ACT OF 1933, as amended, shall receive the consideration
provided in (S)2.3 until Newmont has received written undertakings from that
Franco-Nevada Shareholder in the form attached as Schedule J to the Arrangement
Agreement.
SECTION 3--DISSENT RIGHTS
3.1 Holders of Franco-Nevada Shares may exercise rights of dissent with
respect to those Franco-Nevada Shares pursuant to, and, except as expressly
indicated to the contrary in this (S)3.1, in the manner set forth in, (S)190 of
the CBCA and this (S)3.1 (the "DISSENT RIGHTS") in connection with the
Arrangement; provided that, notwithstanding (S)190(5) of the CBCA, the written
objection to the resolution approving the Arrangement referred to in (S)190(5)
of the CBCA must be received by Franco-Nevada not later than 5:00 p.m. (Toronto
time) on the business day before the Special Meeting; and provided further
that, notwithstanding the provisions of (S)190 of the CBCA, Franco-Nevada
Shareholders who duly exercise Dissent Rights and who:
(a) ultimately are determined to be entitled to be paid fair value for
their Franco-Nevada Shares, which fair value, notwithstanding anything to
the contrary contained in (S)190, shall be determined as of the Effective
Time, shall be deemed to have transferred those Franco-Nevada Shares as of
the Effective Time at the fair value of the Franco-Nevada Shares determined
as of the Effective Time, without any further act or formality and free and
clear of all liens and claims, to Acquisitionco; or
(b) ultimately are determined not to be entitled, for any reason, to be
paid fair value for their Franco-Nevada Shares, shall be deemed to have
participated in the Arrangement on the same basis as a non-dissenting holder
of Franco-Nevada Shares and shall be deemed to have elected to receive, and
shall receive, the consideration provided in (S)2.3(b)(ii)(B),
but in no case shall Franco-Nevada, Newmont, the Transfer Agent or any other
person be required to recognize such Dissenting Shareholders as holders of
Franco-Nevada Shares after the Effective Time, and the names of those
Dissenting Shareholders shall be deleted from the register of holders of
Franco-Nevada Shares at the Effective Time.
SECTION 4--CERTIFICATES AND FRACTIONAL SHARES
4.1 ISSUANCE OF CERTIFICATES REPRESENTING EXCHANGEABLE SHARES. At or
promptly after the Effective Time, Acquisitionco shall deposit with the
Transfer Agent, for the benefit of the holders of Franco-Nevada Shares and of
the Holdco Shareholders, certificates representing that number of whole
Exchangeable Shares issuable under the Arrangement. Upon surrender to the
Transfer Agent for cancellation of a certificate which immediately prior to the
Effective Time represented Franco-Nevada Shares or Holdco Shares that were
transferred for Exchangeable Shares under the Arrangement, together with a duly
completed Letter of Transmittal and Election Form or a Holdco Letter of
Transmittal and Election Form, as the case may be, and such other documents and
instruments as the Transfer Agent may reasonably require, the holder of such
surrendered certificate shall be entitled to receive, and after the Effective
Time the Transfer Agent shall deliver to such person, certificates registered
in the name of such person representing that number of Exchangeable Shares
which such person is entitled to receive (together with any cash in lieu of
Exchangeable Shares pursuant to (S)4.4, less any amounts withheld pursuant to
(S)4.7), and any certificate so surrendered shall forthwith be cancelled. In
the event of a transfer of ownership of such Franco-Nevada Shares which was not
registered in the transfer records of Franco-Nevada, certificates representing
the number of Exchangeable Shares issuable in exchange for such Franco-Nevada
Shares may be registered in the name of and issued to the transferee if the
certificate representing such Franco-Nevada Shares is presented to the Transfer
Agent, accompanied by a duly completed Letter of Transmittal and Election Form
or Holdco Letter of Transmittal and Election Form, as the case may be, and all
documents required to evidence and effect such transfer. Without limiting the
provisions of (S)2.7 and 4.6, until surrendered as contemplated by this (S)4.1,
each certificate, which immediately prior to the Effective Time represented one
or more outstanding Franco-Nevada Shares that, under the Arrangement, were
exchanged for
36
Exchangeable Shares pursuant to (S)2.3, shall be deemed at all times after the
Effective Time to represent only the right to receive upon such surrender (i) a
certificate representing the Exchangeable Shares as contemplated by this
(S)4.1, (ii) a cash payment in lieu of any fractional Exchangeable Shares as
contemplated under (S)4.4 and (iii) any dividends or distributions with a
record date after the Effective Time theretofore paid or payable with respect
to the Exchangeable Shares as contemplated by (S)4.3, in each case less any
amounts withheld pursuant to (S)4.7.
4.2 EXCHANGE OF CERTIFICATES FOR NEWMONT SHARES. At or promptly after the
Effective Time, NSULC shall deposit or cause to be deposited with the Transfer
Agent, for the benefit of the holders of Franco-Nevada Shares and of the Holdco
Shareholders, certificates representing that whole number of Newmont Shares
issuable under the Arrangement. Upon surrender (on or prior to the Election
Deadline) to the Transfer Agent for cancellation of a certificate which
immediately prior to the Effective Time represented outstanding Franco-Nevada
Shares or Holdco Shares that were transferred for Newmont Shares under the
Arrangement, together with a duly completed Letter of Transmittal and Election
Form or a Holdco Letter of Transmittal and Election Form, as the case may be,
and such other documents and instruments as the Transfer Agent may reasonably
require, the holder of such surrendered certificate shall be entitled to
receive, and after the Effective Time the Transfer Agent shall deliver to such
person, a certificate representing that number of Newmont Shares which such
person is entitled to receive (together with any dividends or distributions
with respect thereto pursuant to (S)4.3 and any cash in lieu of fractional
Newmont Shares pursuant to (S)4.4, less any amounts withheld pursuant to
(S)4.7), and any certificate so surrendered shall forthwith be cancelled. In
the event of a transfer of ownership of such Franco-Nevada Shares which was not
registered in the transfer records of Franco-Nevada, the certificates
representing the number of Newmont Shares issuable in exchange for such
Franco-Nevada Shares may be registered in the name of and issued to the
transferee if the certificate representing such Franco-Nevada Shares is
presented to the Transfer Agent on or prior to the Election Deadline,
accompanied by a duly completed Letter of Transmittal and Election Form or
Holdco Letter of Transmittal and Election Form, as the case may be, and all
documents required to evidence and effect such transfer. Without limiting the
provisions of (S)2.7 and 4.6, until surrendered as contemplated by this (S)4.1,
each certificate, which immediately prior to the Effective Time represented one
or more outstanding Franco-Nevada Shares that, under the Arrangement, were
exchanged for Newmont Shares pursuant to (S)2.3, shall be deemed at all times
after the Effective Time to represent only the right to receive upon such
surrender (i) a certificate representing the Newmont Shares as contemplated by
this (S)4.1, (ii) a cash payment in lieu of any fractional Newmont Shares as
contemplated under (S)4.4 and (iii) any dividends or distributions with a
record date after the Effective Time theretofore paid or payable with respect
to the Newmont Shares as contemplated by (S)4.3, in each case less any amounts
withheld pursuant to (S)4.7.
4.3 DISTRIBUTIONS WITH RESPECT TO UNSURRENDERED CERTIFICATES. No dividends
or other distributions paid, declared or made with respect to (i) Exchangeable
Shares or (ii) Newmont Shares, in each case with a record date after the
Effective Time, shall be paid to the holder of any unsurrendered certificate
which immediately prior to the Effective Time represented outstanding
Franco-Nevada Shares or outstanding Holdco Shares or in lieu of fractional
Exchangeable Shares or Newmont Shares shall be paid to any such person pursuant
to (S)4.4, unless and until such person shall have complied with the provisions
of (S)4.1 or 4.2, as applicable. Subject to applicable Law, and to the
provisions of (S)4.6, at the time such person shall have complied with the
provisions of such sections (or, in the case of clause (z) below, at the
appropriate payment date), there shall be paid to such person, without interest
(x) the amount of any cash payable in lieu of a fractional Exchangeable Share
or Newmont Share to which such person is entitled pursuant to (S)4.4, (y) the
amount of dividends or other distributions with a record date after the
Effective Time theretofore paid with respect to the Exchangeable Share or the
Newmont Share, as the case may be, to which such person is entitled pursuant
hereto, and (z) on the appropriate payment date, the amount of dividends or
other distributions with a record date after the Effective Time but prior to
the date of compliance by such person with the provisions of (S)4.1 or 4.2 and
a payment date subsequent to the date of such compliance and payable with
respect to such Exchangeable Shares or Newmont Shares, as the case may be.
4.4 NO FRACTIONAL SHARES. No certificates representing fractional
Exchangeable Shares or fractional Newmont Shares shall be issued upon
compliance with the provisions of (S)4.1 or 4.2 and no dividend, stock split
37
or other change in the capital structure of Acquisitionco or Newmont shall
relate to any such fractional security and such fractional interests shall not
entitle the owner thereof to exercise any rights as a security holder of
Acquisitionco or Newmont. Acquisitionco will make arrangements with the
Transfer Agent for the issuance to the Transfer Agent of Newmont Shares in
respect of any such fractional security and shall instruct the Transfer Agent
to aggregate and, as soon as is reasonably practicable following the Effective
Date, sell such Newmont Shares. The proceeds (net of any commissions in respect
of the sale but excluding any deduction for the fees of the Transfer Agent,
which fees shall be paid by Acquisitionco) (the "Net Proceeds") received by the
Transfer Agent from such sale shall, as soon as is reasonably practicable be
distributed to each person otherwise entitled to a fractional interest in an
Exchangeable Share or Newmont Share on a PRO RATA basis. The Transfer Agent
shall be entitled to retain such brokers and advisors as may be necessary in
connection with the sale of the Newmont Shares and shall not be liable for any
action taken or omitted to be taken in connection with the sale of the Newmont
Shares or the distribution of the Net Proceeds referred to in this (S)4.4.
Under no circumstances shall interest accrue or be paid by Acquisitionco,
Newmont or the Transfer Agent to persons depositing Franco-Nevada Shares
pursuant to (S)2.3, regardless of any delay in selling the Newmont Shares or
making any delivery or payment in respect of such shares.
4.5 LOST CERTIFICATES. In the event any certificate which immediately prior
to the Effective Time represented one or more outstanding Franco-Nevada Shares
that were exchanged pursuant to (S)2.3 shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
such certificate to be lost, stolen or destroyed, the Transfer Agent will issue
in exchange for such lost, stolen or destroyed certificate, any cash and/or
certificates representing Exchangeable Shares or Newmont Shares (and any
dividends or distributions with respect thereto) deliverable in accordance with
(S)2.3 and such holder's Letter of Transmittal and Election Form or Holdco
Letter of Transmittal and Election Form, as the case may be. When authorizing
such payment in exchange for any lost, stolen or destroyed certificate, the
person to whom cash (if any) and/or certificates representing Exchangeable
Shares or Newmont Shares are to be issued shall, as a condition precedent to
the issuance thereof, give a bond satisfactory to Franco-Nevada, Acquisitionco,
Newmont and their respective transfer agents in such amount as Franco-Nevada,
Acquisitionco or Newmont may direct or otherwise indemnify Franco-Nevada,
Acquisitionco and Newmont in a manner satisfactory to Franco-Nevada,
Acquisitionco and Newmont against any claim that may be made against
Franco-Nevada, Acquisitionco or Newmont with respect to the certificate alleged
to have been lost, stolen or destroyed.
4.6 EXTINCTION OF RIGHTS. Any certificate which immediately prior to the
Effective Time represented outstanding Franco-Nevada Shares that were exchanged
pursuant to (S)2.3 that is not deposited with all other instruments required by
(S)4.1 or 4.2 on or prior to the date of the notice referred to in (S)7(2) of
the Exchangeable Share Provisions shall cease to represent a claim or interest
of any kind or nature as a securityholder of Acquisitionco or Newmont. On such
date, the cash and/or Exchangeable Shares and/or Newmont Shares to which the
former holder of the certificate referred to in the preceding sentence was
ultimately entitled shall be deemed to have been surrendered for no
consideration to Acquisitionco. None of Newmont, Franco-Nevada, Acquisitionco,
Callco or the Transfer Agent shall be liable to any person in respect of any
cash delivered to a public official pursuant to any applicable abandoned
property, escheat or similar Law.
4.7 WITHHOLDING RIGHTS. Franco-Nevada, Acquisitionco, Callco, Newmont and
the Transfer Agent shall be entitled to deduct and withhold from any dividend
or consideration otherwise payable to any holder of Franco-Nevada Shares,
Holdco Shares, Newmont Shares or Exchangeable Shares such amounts as
Franco-Nevada, Acquisitionco, Callco, Newmont or the Transfer Agent is required
to deduct and withhold with respect to such payment under the ITA, United
States tax laws or any other applicable Law. To the extent that amounts are so
withheld, such withheld amounts shall be treated for all purposes hereof as
having been paid to the holder of the securities in respect of which such
deduction and withholding was made, provided that such withheld amounts are
actually remitted to the appropriate taxing Agency.
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SECTION 5--RIGHTS OF CALLCO TO ACQUIRE EXCHANGEABLE SHARES
5.1 CALLCO LIQUIDATION CALL RIGHT
(a) Callco shall have the overriding right (the "LIQUIDATION CALL
RIGHT"), in the event of and notwithstanding the proposed liquidation,
dissolution or winding-up of Acquisitionco or any other distribution of the
assets of Acquisitionco among its shareholders for the purpose of winding up
its affairs, pursuant to (S)5 of the Exchangeable Share Provisions, to
purchase from all but not less than all of the holders of Exchangeable
Shares (other than any holder of Exchangeable Shares which is Newmont or an
affiliate of Newmont) on the Liquidation Date all but not less than all of
the Exchangeable Shares held by each such holder on payment by Callco of an
amount per share (the "LIQUIDATION CALL PURCHASE PRICE") equal to the
Current Market Price of Newmont Shares on the last business day prior to the
Liquidation Date, which shall be satisfied in full by Callco delivering or
causing to be delivered to such holder one Newmont Share, which on issue
will be admitted to listing and traded on the NYSE (subject to official
notice of issuance), plus any Dividend Amount. In the event of the exercise
of the Liquidation Call Right by Callco, each holder shall be obligated to
sell all the Exchangeable Shares held by the holder to Callco on the
Liquidation Date on payment by Callco to the holder of the Liquidation Call
Purchase Price for each such share, and Acquisitionco shall have no
obligation to pay any Liquidation Amount or Dividend Amount to the holders
of such shares so purchased by Callco.
(b) To exercise the Liquidation Call Right, Callco must notify the
Transfer Agent, as agent for the holders of Exchangeable Shares and
Acquisitionco of Callco's intention to exercise such right at least 45 days
before the Liquidation Date in the case of a voluntary liquidation,
dissolution or winding-up of Acquisitionco or any other voluntary
distribution of the assets of Acquisitionco among its shareholders for the
purpose of winding up its affairs, and at least five business days before
the Liquidation Date in the case of an involuntary liquidation, dissolution
or winding-up of Acquisitionco or any other involuntary distribution of the
assets of Acquisitionco among its shareholders for the purpose of winding up
its affairs. The Transfer Agent will notify the holders of Exchangeable
Shares as to whether or not Callco has exercised the Liquidation Call Right
forthwith after the expiry of the period during which the same may be
exercised by Callco. If Callco exercises the Liquidation Call Right, then on
the Liquidation Date, Callco will purchase and the holders will sell all of
the Exchangeable Shares then outstanding for a price per share equal to the
Liquidation Call Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Liquidation Call Right, Callco shall deposit or cause
to be deposited with the Transfer Agent, on or before the Liquidation Date,
certificates representing the aggregate number of Newmont Shares which
Callco shall deliver or cause to be delivered pursuant to (S)5.1(a) and a
cheque or cheques of Callco payable at par at any branch of the bankers of
Callco representing the aggregate Dividend Amount, if any, in payment of the
total Liquidation Call Purchase Price, in each case less any amounts
withheld pursuant to (S)4.7. Provided that Callco has complied with the
immediately preceding sentence, on and after the Liquidation Date the
holders of the Exchangeable Shares shall cease to be holders of the
Exchangeable Shares and shall not be entitled to exercise any of the rights
of holders in respect thereof (including any rights under the Voting and
Exchange Trust Agreement), other than the right to receive their
proportionate part of the aggregate Liquidation Call Purchase Price, unless
payment of the aggregate Liquidation Call Purchase Price for the
Exchangeable Shares shall not be made upon presentation and surrender of
share certificates in accordance with the following provisions of this
(S)5.1(c), in which case the rights of the holders shall remain unaffected
until the aggregate Liquidation Call Purchase Price has been paid in the
manner herein provided. Upon surrender to the Transfer Agent of a
certificate or certificates representing Exchangeable Shares, together with
such other documents and instruments as may be required to effect a transfer
of Exchangeable Shares under the CBCA and articles of Acquisitionco and such
additional documents, instruments and payments as the Transfer Agent may
reasonably require, the holder of such surrendered certificate or
certificates shall be entitled to receive in exchange therefor, and the
Transfer Agent on behalf of Callco shall transfer to such holder, the
Newmont Shares to which such holder is entitled and as soon as reasonably
practicable thereafter the Transfer Agent shall deliver to such holder
certificates representing the Newmont Shares to which the
39
holder is entitled and a cheque or cheques of Callco payable at par at any
branch of the bankers of Callco representing the Dividend Amount, if any,
and when received by the Transfer Agent, all dividends and other
distributions with respect to such Newmont Shares with a record date after
the Liquidation Date and before the date of the transfer of such Newmont
Shares to such holder, less any amounts withheld pursuant to (S)4.7. If
Callco does not exercise the Liquidation Call Right in the manner described
above, on the Liquidation Date, the holders of the Exchangeable Shares will
be entitled to receive in exchange therefor the Liquidation Amount otherwise
payable by Acquisitionco in connection with the liquidation, dissolution or
winding-up of Acquisitionco or any distribution of the assets of
Acquisitionco among its shareholders for the purpose of winding up its
affairs pursuant to Article (S)5 of the Exchangeable Share Provisions.
5.2 CALLCO REDEMPTION CALL RIGHT
In addition to Callco's rights contained in the Exchangeable Share
Provisions, including the Retraction Call Right (as defined in the Exchangeable
Share Provisions), Callco shall have the following rights in respect of the
Exchangeable Shares:
(a) Callco shall have the overriding right (the "REDEMPTION CALL RIGHT"),
notwithstanding the proposed redemption of the Exchangeable Shares by
Acquisitionco pursuant to Article (S)7 of the Exchangeable Share Provisions,
to purchase from all but not less than all of the holders of Exchangeable
Shares (other than any holder of Exchangeable Shares which is Newmont or an
affiliate of Newmont) on the Redemption Date all but not less than all of
the Exchangeable Shares held by each such holder on payment by Callco to
each holder of an amount per Exchangeable Share (the "REDEMPTION CALL
PURCHASE PRICE") equal to the Current Market Price of a Newmont Share on the
last business day prior to the Redemption Date, which shall be satisfied in
full by Callco delivering or causing to be delivered to such holder one
Newmont Share, which on issue will be admitted to listing and traded on the
NYSE (subject to official notice of issuance), plus any Dividend Amount. In
the event of the exercise of the Redemption Call Right by Callco, each
holder shall be obligated to sell all the Exchangeable Shares held by the
holder to Callco on the Redemption Date on payment by Callco to the holder
of the Redemption Call Purchase Price for each such share, and Acquisitionco
shall have no obligation to redeem, or to pay any Dividend Amount in respect
of, such shares so purchased by Callco.
(b) To exercise the Redemption Call Right, Callco must notify the
Transfer Agent, as agent for the holders of Exchangeable Shares and
Acquisitionco of Callco's intention to exercise such right at least 60 days
before the Redemption Date, except in the case of a redemption occurring as
a result of a Newmont Control Transaction (as defined in the Exchangeable
Share Provisions) or an Exchangeable Share Voting Event, in which case
Callco shall so notify the Transfer Agent and Acquisitionco on or before the
Redemption Date. The Transfer Agent will notify the holders of the
Exchangeable Shares as to whether or not Callco has exercised the Redemption
Call Right forthwith after the expiry of the period during which the same
may be exercised by Callco. If Callco exercises the Redemption Call Right,
on the Redemption Date Callco will purchase and the holders will sell all of
the Exchangeable Shares then outstanding for a price per share equal to the
Redemption Call Purchase Price.
(c) For the purposes of completing the purchase of the Exchangeable
Shares pursuant to the Redemption Call Right, Callco shall deposit or cause
to be deposited with the Transfer Agent, on or before the Redemption Date,
certificates representing the aggregate number of Newmont Shares which
Callco shall deliver or cause to be delivered pursuant to (S)5.2(a) and a
cheque or cheques of Callco payable at par at any branch of the bankers of
Callco representing the aggregate Dividend Amount, if any, in payment of the
aggregate Redemption Call Purchase Price, in each case less any amounts
withheld pursuant to (S)4.7. Provided that Callco has complied with the
immediately preceding sentence, on and after the Redemption Date the holders
of the Exchangeable Shares shall cease to be holders of the Exchangeable
Shares and shall not be entitled to exercise any of the rights of holders in
respect thereof (including any rights under the Voting and Exchange Trust
Agreement), other than the right to receive their proportionate part of the
aggregate Redemption Call Purchase Price, unless payment of the aggregate
Redemption Call Purchase Price for the Exchangeable Shares shall not be made
upon presentation and surrender of share certificates in
40
accordance with the following provisions of this (S)5.2(c), in which case
the rights of the holders shall remain unaffected until the aggregate
Redemption Call Purchase Price has been paid in the manner herein provided.
Upon surrender to the Transfer Agent of a certificate or certificates
representing Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares
under the CBCA and articles of Acquisitionco and such additional documents,
instruments and payments as the Transfer Agent may reasonably require, the
holder of such surrendered certificate or certificates shall be entitled to
receive in exchange therefor, and the Transfer Agent on behalf of Callco
shall transfer to such holder, the Newmont Shares to which such holder is
entitled and as soon as reasonably practicable thereafter the Transfer Agent
shall deliver to such holder certificates representing the Newmont Shares to
which the holder is entitled and a cheque or cheques of Callco payable at
par at any branch of the bankers of Callco representing the Dividend Amount,
if any, and when received by the Transfer Agent, all dividends and other
distributions with respect to such Newmont Shares with a record date after
the Redemption Date and before the date of the transfer of such Newmont
Shares to such holder, less any amounts withheld pursuant to (S)4.7. If
Callco does not exercise the Redemption Call Right in the manner described
above, on the Redemption Date the holders of the Exchangeable Shares will be
entitled to receive in exchange therefor the redemption price otherwise
payable by Acquisitionco in connection with the redemption of the
Exchangeable Shares pursuant to Article (S)7 of the Exchangeable Share
Provisions.
5.3 CONTINUATION OF RIGHTS. For greater certainty, the amalgamation of
Acquisitionco pursuant to (S)2.3(f) shall not impair the Liquidation Call Right
or the Redemption Call Right, which thereafter may continue to be exercised by
Callco.
5.4 DESIGNATION. Notwithstanding anything to the contrary contained in this
(S)5, the Voting and Exchange Trust Agreement, the Support Agreement or in the
provisions attaching to the Exchangeable Shares, the Liquidation Call Right
and/or the Redemption Call Right may be exercised by, and the related
obligations thereunder performed by, Newmont, Newmont Subco or an affiliate of
Newmont, either alone or together with Callco.
5.5 SHAREHOLDER RIGHTS PLAN. The rights ("NEWMONT RIGHTS") issued under
Newmont's shareholder rights plan, dated as of August 31, 2000, shall attach to
all Newmont Shares issued in exchange for Franco-Nevada Shares and Holdco
Shares, as the case may be, pursuant to the Arrangement and upon the exercise
of Franco-Nevada Options. The Newmont Rights shall not attach to any
Exchangeable Shares issued under the Plan of Arrangement.
SECTION 6--AMENDMENT
6.1 PLAN OF ARRANGEMENT AMENDMENT.
(a) Franco-Nevada reserves the right to amend, modify and/or supplement
this Plan of Arrangement at any time and from time to time (with the prior
written consent of Newmont), provided that any such amendment, modification
and/or supplement must be contained in a written document that is filed with
the Court and, if made after the Special Meeting, approved by the Court and
communicated to shareholders in the manner required by the Court (if so
required).
(b) Any amendment, modification or supplement to this Plan of Arrangement
may be proposed by Franco-Nevada (with the prior written consent of Newmont)
at any time before or at the Special Meeting with or without any other prior
notice or communication and, if so proposed and accepted by the persons
voting at the Special Meeting, shall become part of this Plan of Arrangement
for all purposes.
(c) Any amendment, modification or supplement to this Plan of Arrangement
that is approved or directed by the Court following the Special Meeting
shall be effective only if it is consented to in writing by Franco-Nevada
and Newmont and, if required by the Court, is consented to by Franco-Nevada
Shareholders voting in the manner directed by the Court.
41
(d) Any amendment, modification or supplement to this Plan of Arrangement
may be made prior to the Effective Date unilaterally by Newmont, provided
that it concerns a matter which, in the reasonable opinion of Newmont, is of
an administrative nature required to better give effect to the
implementation of this Plan of Arrangement and is not adverse to the
financial or economic interests of any Franco-Nevada Shareholder.
SECTION 7--FURTHER ASSURANCES
Franco-Nevada and Newmont shall make, do and execute, or cause to be made,
done and executed, all such further acts, deeds, agreements, transfers,
assurances, instruments or documents as may reasonably be required by either of
them to document or evidence any of the transactions or events set out in this
Plan of Arrangement.
SECTION 8--NOTICE
Any notice to be given by Newmont pursuant to the Arrangement will be deemed
to have been properly given if it is mailed by first class mail, postage
prepaid, to registered Franco-Nevada Shareholders at their addresses as shown
on the register of Shareholders maintained by Franco-Nevada and will be deemed
to have been received on the first day following the date of mailing which is a
business day.
The provisions of this Plan of Arrangement, the Arrangement Agreement, the
Letter of Transmittal and Election Form and the Holdco Letter of Transmittal
and Election Form apply notwithstanding any accidental omission to give notice
to any one or more Shareholders and notwithstanding any interruption of mail
services in Canada or, the United States or elsewhere following mailing. In the
event of any interruption of mail service following mailing, Newmont intends to
make reasonable efforts to disseminate any notice by other means, such as
publication. Except as otherwise required or permitted by law, if post offices
in Canada are not open for the deposit of mail, any notice which Newmont or the
Transfer Agent may give or cause to be given under the Arrangement will be
deemed to have been properly given and to have been received by Franco-Nevada
Shareholders if (i) it is given to the TSE for dissemination or (ii) it is
published once in the National Edition of The Globe and Mail and in the daily
newspapers of general circulation in each of the French and English languages
in the City of Montreal, provided that if the National Edition of The Globe and
Mail is not being generally circulated, publication thereof will be made in The
Financial Post or any other daily newspaper of general circulation published in
the City of Toronto.
Notwithstanding the provisions of the Arrangement Agreement, this Plan of
Arrangement, the Letter of Transmittal and Election Form and the Holdco Letter
of Transmittal and Election Form, certificates for Newmont Shares and cheques
in payment for Newmont Shares exchanged pursuant to the Arrangement need not be
mailed if Newmont determines that delivery thereof by mail may be delayed.
Persons entitled to cheques and certificates which are not mailed for the
foregoing reason may take delivery thereof at the office of the Transfer Agent
to which the deposited certificates for Newmont Shares in respect of which the
cheque and certificates being issued were deposited, upon application to the
Transfer Agent, until such time as Newmont has determined that delivery by mail
will not longer be delayed. Newmont will provide notice of any such
determination not to mail made hereunder as soon as reasonably practicable
after the making of such determination and in accordance with this (S)8.
Notwithstanding the provisions of the Arrangement Agreement, this Plan of
Arrangement, the Letter of Transmittal and Election Form and the Holdco Letter
of Transmittal and Election Form, the deposit of cheques and certificates with
the Transfer Agent in such circumstances will constitute delivery to the
persons entitled thereto and the Newmont Shares will be deemed to have been
paid for immediately upon such deposit.
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APPENDIX 1
TO THE PLAN OF ARRANGEMENT
PROVISIONS ATTACHING TO THE EXCHANGEABLE SHARES
The Exchangeable Shares shall have the following rights, privileges,
restrictions and conditions:
1. INTERPRETATION
(1) For the purposes of these share provisions:
"ACQUISITIONCO" means the corporation incorporated under the laws of
Canada that issues the Exchangeable Shares pursuant to the Arrangement and,
following the amalgamation of Acquisitionco, Franco-Nevada and others as
contemplated in the Plan of Arrangement, the corporation continuing as a
result of that amalgamation.
"AFFILIATE" has the meaning corresponding to "affiliated companies" in
the SECURITIES ACT (Ontario), as amended.
"AGENCY" means any domestic or foreign court, tribunal, federal, state,
provincial or local government or governmental agency or authority or other
regulatory authority (including the TSE and the NYSE) or administrative
agency or commission (including the Ontario Securities Commission and the
SEC) or any elected or appointed public official.
"AGENT" means any chartered bank or trust company in Canada selected by
Acquisitionco for the purposes of holding some or all of the Liquidation
Amount or Redemption Price in accordance with (S)5 or (S)7, respectively.
"ARRANGEMENT" means an arrangement under (S)192 of the CBCA on the terms
and subject to the conditions set out in the Plan of Arrangement, to which
plan these share provisions are attached as Appendix 1.
"ARRANGEMENT AGREEMENT" means the arrangement agreement made as of the
14/th/ day of November, 2001 between Franco-Nevada and Newmont, as further
amended, supplemented and/or restated in accordance with its terms,
providing for, among other things, the Arrangement.
"BOARD OF DIRECTORS" means the board of directors of Acquisitionco.
"BUSINESS DAY" means any day other than a Saturday, Sunday, a public
holiday or a day on which commercial banks are not open for business in
Toronto, Ontario or New York, New York under applicable law.
"CALLCO" means a (i) subsidiary of Newmont existing under the laws of
Nova Scotia or such other jurisdiction as Newmont may determine prior to the
Effective Date, or (ii) in Newmont's sole discretion, such other company
which exercises the Liquidation Call Right or Redemption Call Right,
including Newmont or NSULC.
"CALLCO CALL NOTICE" has the meaning ascribed thereto in (S)6(3) of these
share provisions.
"CANADIAN DOLLAR EQUIVALENT" means in respect of an amount expressed in a
currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT") at any
date the product obtained by multiplying:
(a) the Foreign Currency Amount; by
(b) the noon spot exchange rate on such date for such foreign
currency expressed in Canadian dollars as reported by the Bank of Canada
or, in the event such spot exchange rate is not available, such spot
exchange rate on such date for such foreign currency expressed in
Canadian dollars as may be deemed by the Board of Directors to be
appropriate for such purpose, which determination shall be conclusive
and binding.
43
"CBCA" means the CANADA BUSINESS CORPORATIONS ACT, as amended.
"COMMON SHARES" means the common shares in the capital of Acquisitionco.
"CURRENT MARKET PRICE" means, in respect of a Newmont Share on any date,
the quotient obtained by dividing (a) the aggregate of the Daily Value of
Trades for each day during the period of 20 consecutive trading days ending
not more than three trading days before such date; by (b) the aggregate
volume of Newmont Shares used to calculate such Daily Value of Trades.
"DAILY VALUE OF TRADES" means, in respect of the Newmont Shares on any
trading day, the Canadian Dollar Equivalent of the product of (a) the volume
weighted average price of Newmont Shares on the NYSE (or, if the Newmont
Shares are not listed on the NYSE, on such other stock exchange or automated
quotation system on which the Newmont Shares are listed or quoted, as the
case may be, as may be selected by the board of directors of Newmont for
such purpose) on such date, as determined by Bloomberg L.P. or other
reputable, third party information source selected by the board of directors
of Newmont; and (b) the aggregate volume of Newmont Shares traded on such
day on the NYSE or such other stock exchange or automated quotation system
and used to calculate such volume weighted average price; provided that any
such selections by the board of directors of Newmont shall be conclusive and
binding.
"DIRECTOR" means the Director appointed pursuant to (S)260 of the CBCA.
"DIVIDEND AMOUNT" means an amount equal to, and in full satisfaction of,
all declared and unpaid dividends on an Exchangeable Share held by a holder
on any dividend record date which occurred prior to the date of purchase,
redemption or other acquisition of such share by Callco or Newmont from such
holder pursuant to (S)5.1, (S)6.1 or (S)7.1.
"EFFECTIVE DATE" means the date on or before the Outside Date on which
the Arrangement becomes effective in accordance with the CBCA and the Final
Order.
"EXCHANGEABLE SHARES" means the non-voting, exchangeable shares in the
capital of Acquisitionco, having the rights, privileges, restrictions and
conditions set forth herein.
"EXCHANGEABLE SHARE VOTING EVENT" means any matter in respect of which
holders of Exchangeable Shares are entitled to vote as shareholders of
Acquisitionco and in respect of which the Board of Directors determines in
good faith that after giving effect to such matter the economic equivalence
of the Exchangeable Shares and the Newmont Shares is maintained for the
holders of Exchangeable Shares (other than Newmont and its affiliates).
"EXEMPT EXCHANGEABLE SHARE VOTING EVENT" means an Exchangeable Share
Voting Event in order to approve or disapprove, as applicable, any change
to, or in the rights of the holders of, the Exchangeable Shares, where the
approval or disapproval, as applicable, of such change would be required to
maintain the economic equivalence of the Exchangeable Shares and the Newmont
Shares.
"FRANCO-NEVADA" means Franco-Nevada Mining Corporation Limited, a
corporation incorporated under the laws of Canada.
"HOLDER" means, when used with reference to the Exchangeable Shares, a
holder of Exchangeable Shares shown from time to time in the register
maintained by or on behalf of Acquisitionco in respect of the Exchangeable
Shares.
"INCLUDING" means "including without limitation" and "INCLUDES" means
"includes without limitation".
"LIQUIDATION AMOUNT" has the meaning ascribed thereto in (S)5(1) of these
share provisions.
"LIQUIDATION CALL RIGHT" has the meaning ascribed thereto in the Voting
and Exchange Trust Agreement.
44
"LIQUIDATION DATE" has the meaning ascribed thereto in (S)5(1) of these
share provisions.
"NEWMONT" means Newmont Mining Company, a corporation existing under the
laws of Delaware, or its new, direct or indirect, parent corporation that
issues the shares into which the Original Newmont Shares are converted or
for which they are exchanged on or before the Effective Date in connection
with the transactions contemplated by the Plan of Arrangement, or such other
corporation that at the time is the issuer of the Newmont Shares.
"NEWMONT CONTROL TRANSACTION" means any merger, amalgamation,
arrangement, take-over bid or tender offer, material sale of shares or
rights or interests therein or thereto or similar transactions involving
Newmont, or any proposal to do so.
"NEWMONT DIVIDEND DECLARATION DATE" means the date on which the board of
directors of Newmont declares any dividend or other distribution on the
Newmont Shares that would require a corresponding payment to be made in
respect of the Exchangeable Shares.
"NEWMONT SHARES" means the Original Newmont Shares or the common stock of
the corporation into which all or substantially all of the Original Newmont
Shares are converted or for which they are exchanged on or before the
Effective Date in connection with the transactions contemplated by the Plan
of Arrangement, and any other securities into which such shares may be
changed.
"NYSE" means the New York Stock Exchange or its successor.
"ORIGINAL NEWMONT SHARES" means the common stock, par value U.S.$1.60 per
share, in the capital of Newmont.
"PERSON" includes any individual, firm, partnership, limited partnership,
joint venture, venture capital fund, limited liability company, unlimited
liability company, association, trust, trustee, executor, administrator,
legal personal representative, estate, group, body corporate, corporation,
unincorporated association or organization, Agency, syndicate or other
entity, whether or not having legal status.
"PLAN OF ARRANGEMENT" means the plan of arrangement substantially in the
form and content of Schedule B annexed to the Arrangement Agreement, and any
amendments or variations thereto made in accordance with (S)7.B of the
Arrangement Agreement or (S)6 of the Plan of Arrangement or made at the
direction of the Court.
"PURCHASE PRICE" has the meaning ascribed thereto in (S)6(3) of these
share provisions.
"REDEMPTION CALL PURCHASE PRICE" has the meaning ascribed thereto in the
Plan of Arrangement.
"REDEMPTION CALL RIGHT" has the meaning ascribed thereto in the Plan of
Arrangement.
"REDEMPTION DATE" means the date, if any, established by the Board of
Directors for the redemption by Acquisitionco of all but not less than all
of the outstanding Exchangeable Shares pursuant to (S)7 of these share
provisions, which date shall be no earlier than the seventh anniversary of
the date on which Exchangeable Shares first are issued, unless:
(a) there are fewer than 1,000,000 Exchangeable Shares outstanding
(other than Exchangeable Shares held by Newmont and its affiliates, and
as such number of shares may be adjusted as deemed appropriate by the
Board of Directors to give effect to any subdivision or consolidation of
or stock dividend on the Exchangeable Shares, any issue or distribution
of rights to acquire Exchangeable Shares or securities exchangeable for
or convertible into Exchangeable Shares, any issue or distribution of
other securities or rights or evidences of indebtedness or assets, or
any other capital reorganization or other transaction affecting the
Exchangeable Shares), in which case the Board of Directors may
accelerate such redemption date to such date prior to the seventh
anniversary of the date on which Exchangeable Shares first are issued as
they may determine, upon at least 60 days' prior written notice to the
holders of the Exchangeable Shares and the Trustee;
45
(b) a Newmont Control Transaction occurs, in which case, provided
that the Board of Directors determines, in good faith and in its sole
discretion, that it is not reasonably practicable to substantially
replicate the terms and conditions of the Exchangeable Shares in
connection with such Newmont Control Transaction and that the redemption
of all but not less than all of the outstanding Exchangeable Shares is
necessary to enable the completion of such Newmont Control Transaction
in accordance with its terms, the Board of Directors may accelerate such
redemption date to such date prior to the seventh anniversary of the
date on which Exchangeable Shares first are issued as it may determine,
upon such number of days' prior written notice to the holders of the
Exchangeable Shares and the Trustee as the Board of Directors may
determine to be reasonably practicable in such circumstances;
(c) an Exchangeable Share Voting Event that is not an Exempt
Exchangeable Share Voting Event is proposed and (i) the holders of the
Exchangeable Shares fail to take the necessary action, at a meeting or
other vote of holders of Exchangeable Shares, to approve or disapprove,
as applicable, the Exchangeable Share Voting Event or the holders of the
Exchangeable Shares do take the necessary action but, in connection
therewith, the holders of more than 2% of the outstanding Exchangeable
Shares (other than those held by Newmont and its affiliates) exercise
rights of dissent under the CBCA, and (ii) the Board of Directors
determines in good faith that it is not reasonably practicable to
accomplish the business purpose (which business purpose must be bona
fide and not for the primary purpose of causing the occurrence of the
Redemption Date) intended by the Exchangeable Share Voting Event in a
commercially reasonable manner that does not result in an Exchangeable
Share Voting Event, in which case the Redemption Date shall be the
business day following the day on which the later of the events
described in (i) and (ii) above occur;
(d) an Exempt Exchangeable Share Voting Event is proposed and holders
of the Exchangeable Shares fail to take the necessary action at a
meeting or other vote of holders of Exchangeable Shares to approve or
disapprove, as applicable, the Exempt Exchangeable Share Voting Event in
which case the Redemption Date shall be the business day following the
day on which the holders of the Exchangeable Shares failed to take such
action; or
(e) the Canadian tax legislation is amended and becomes effective
such that substantially all Canadian resident holders of Exchangeable
Shares may exchange their Exchangeable Shares for Newmont Shares on a
tax deferred basis for Canadian income tax purposes, in which case the
Board of Directors may accelerate such Redemption Date to such date
prior to the seventh anniversary of the date on which Exchangeable
Shares are issued as they may determine, upon at least 60 days' prior
written notice to the holders of the Exchangeable Shares and the Trustee,
provided, however, that the accidental failure or omission to give any
notice of redemption under clauses (a), (b), (c), (d) or (e) above to any of
the holders of Exchangeable Shares shall not affect the validity of any such
redemption.
"REDEMPTION PRICE" has the meaning ascribed thereto in (S)7(1) of these
share provisions.
"RETRACTED SHARES" has the meaning ascribed thereto in (S)6(1)(a) of
these share provisions.
"RETRACTION CALL RIGHT" has the meaning ascribed thereto in (S)6(1)(c) of
these share provisions.
"RETRACTION DATE" has the meaning ascribed thereto in (S)6(1)(b) of these
share provisions.
"RETRACTION PRICE" has the meaning ascribed thereto in (S)6(1) of these
share provisions.
"RETRACTION REQUEST" has the meaning ascribed thereto in (S)6(1) of these
share provisions.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means the SECURITIES ACT (Ontario) and the rules,
regulations and policies made thereunder, as amended.
"SPECIAL SHARES" means the special shares in the capital of Acquisitionco.
46
"SUPPORT AGREEMENT" means the agreement made between Newmont, Callco and
Acquisitionco substantially in the form and content of Schedule K to the
Arrangement Agreement.
"TRANSFER AGENT" means Computershare Trust Company of Canada or such
other person as may from time to time be appointed by Acquisitionco as the
registrar and transfer agent for the Exchangeable Shares.
"TRUSTEE" means the trustee chosen by Newmont to act as trustee under the
Voting and Exchange Trust Agreement, being a corporation organized and
existing under the laws of Canada or any Province thereof and authorized to
carry on the business of a trust company in all the provinces of Canada, and
any successor trustee appointed under the Voting and Exchange Trust
Agreement.
"TSE" means The Toronto Stock Exchange or its successor.
"VOTING AND EXCHANGE TRUST AGREEMENT" means an agreement to be made among
Newmont, Acquisitionco and the Trustee in connection with the Plan of
Arrangement substantially in the form of Schedule L to the Arrangement
Agreement.
2. RANKING OF EXCHANGEABLE SHARES
The Exchangeable Shares shall be entitled to a preference over the Common
Shares, the Special Shares and any other shares ranking junior to the
Exchangeable Shares with respect to the payment of dividends and the
distribution of assets in the event of the liquidation, dissolution or
winding-up of Acquisitionco, whether voluntary or involuntary, or any other
distribution of the assets of Acquisitionco among its shareholders for the
purpose of winding up its affairs.
3. DIVIDENDS
(1) A holder of an Exchangeable Share shall be entitled to receive and the
Board of Directors shall, subject to applicable law, on each Newmont Dividend
Declaration Date, declare a dividend on each Exchangeable Share:
(a) in the case of a cash dividend declared on the Newmont Shares, in an
amount in cash for each Exchangeable Share equal to the Canadian Dollar
Equivalent of the cash dividend declared on each Newmont Share on the
Newmont Dividend Declaration Date;
(b) in the case of a stock dividend declared on the Newmont Shares to be
paid in Newmont Shares, by the issue or transfer by Acquisitionco of such
number of Exchangeable Shares for each Exchangeable Share as is equal to the
number of Newmont Shares to be paid on each Newmont Share unless in lieu of
such stock dividend Acquisitionco elects to effect a corresponding and
contemporaneous and economically equivalent (as determined by the Board of
Directors in accordance with (S)3.5 hereof) subdivision of the outstanding
Exchangeable Shares; or
(c) in the case of a dividend declared on the Newmont Shares in property
other than cash or Newmont Shares, in such type and amount of property for
each Exchangeable Share as is the same as or economically equivalent (to be
determined by the Board of Directors as contemplated by (S)3(5) hereof) to
the type and amount of property declared as a dividend on each Newmont Share.
Such dividends shall be paid out of money, assets or property of
Acquisitionco properly applicable to the payment of dividends, or out of
authorized but unissued shares of Acquisitionco, as applicable. The holders of
Exchangeable Shares shall not be entitled to any dividends other than or in
excess of the dividends referred to in this (S)3(1).
(2) Cheques of Acquisitionco payable at par at any branch of the bankers of
Acquisitionco shall be issued in respect of any cash dividends contemplated by
(S)3(1)(a) hereof and the sending of such cheque to each holder of an
Exchangeable Share shall satisfy the cash dividend represented thereby unless
the cheque is not paid on presentation. Certificates registered in the name of
the registered holder of Exchangeable Shares shall be issued
47
or transferred in respect of any stock dividends contemplated by (S)3(1)(b)
hereof and the sending of such a certificate to each holder of an Exchangeable
Share shall satisfy the stock dividend represented thereby. Such other type and
amount of property in respect of any dividends contemplated by (S)3(1)(c)
hereof shall be issued, distributed or transferred by Acquisitionco in such
manner as it shall determine and the issuance, distribution or transfer thereof
by Acquisitionco to each holder of an Exchangeable Share shall satisfy the
dividend represented thereby. No holder of an Exchangeable Share shall be
entitled to recover by action or other legal process against Acquisitionco any
dividend that is represented by a cheque that has not been duly presented to
Acquisitionco's bankers for payment or that otherwise remains unclaimed for a
period of six years from the date on which such dividend was payable.
(3) The record date for the determination of the holders of Exchangeable
Shares entitled to receive payment of, and the payment date for, any dividend
declared on the Exchangeable Shares under (S)3(1) hereof shall be the same
dates as the record date and payment date, respectively, for the corresponding
dividend declared on the Newmont Shares. The record date for the determination
of the holders of Exchangeable Shares entitled to receive Exchangeable Shares
in connection with any subdivision, redivision or change of the Exchangeable
Shares under (S)3(1)(b) hereof and the effective date of such subdivision shall
be the same dates as the record and payment date, respectively, for the
corresponding stock dividend declared on the Newmont Shares.
(4) If on any payment date for any dividends declared on the Exchangeable
Shares under (S)3(1) hereof the dividends are not paid in full on all of the
Exchangeable Shares then outstanding, any such dividends that remain unpaid
shall be paid on a subsequent date or dates determined by the Board of
Directors on which Acquisitionco shall have sufficient moneys, assets or
property properly applicable to the payment of such dividends.
(5) The Board of Directors shall determine, in good faith and in its sole
discretion, economic equivalence for the purposes of these share provisions,
including (S)3(1) hereof, and each such determination shall be conclusive and
binding on Acquisitionco and its shareholders. In making each such
determination, the following factors shall, without excluding other factors
determined by the Board of Directors to be relevant, be considered by the Board
of Directors:
(a) in the case of any stock dividend or other distribution payable in
Newmont Shares, the number of such shares issued in proportion to the number
of Newmont Shares previously outstanding;
(b) in the case of the issuance or distribution of any rights, options or
warrants to subscribe for or purchase Newmont Shares (or securities
exchangeable for or convertible into or carrying rights to acquire Newmont
Shares), the relationship between the exercise price of each such right,
option or warrant and the Current Market Price;
(c) in the case of the issuance or distribution of any other form of
property (including any shares or securities of Newmont of any class other
than Newmont Shares, any rights, options or warrants other than those
referred to in (S)3(5)(b) hereof, any evidences of indebtedness of Newmont
or any assets of Newmont), the relationship between the fair market value
(as determined by the Board of Directors in the manner above contemplated)
of such property to be issued or distributed with respect to each
outstanding Newmont Share and the Current Market Price of a Newmont Share;
and
(d) in all such cases, the general taxation consequences of the relevant
event to holders of Exchangeable Shares to the extent that such consequences
may differ from the taxation consequences to holders of Newmont Shares as a
result of differences between taxation laws of Canada and the United States
(except for any differing consequences arising as a result of differing
marginal taxation rates and without regard to the individual circumstances
of holders of Exchangeable Shares).
4. CERTAIN RESTRICTIONS
So long as any of the Exchangeable Shares are outstanding, Acquisitionco
shall not at any time without, but may at any time with, the approval of the
holders of the Exchangeable Shares given as specified in (S)10(2) of these
share provisions:
(a) pay any dividends on the Common Shares, Special Shares or any other
shares ranking junior to the Exchangeable Shares, other than stock dividends
payable in Common Shares, Special Shares or any such other shares ranking
junior to the Exchangeable Shares, as the case may be;
48
(b) redeem or purchase or make any capital distribution in respect of
Common Shares, Special Shares or any other shares ranking junior to the
Exchangeable Shares;
(c) redeem or purchase any other shares of Acquisitionco ranking equally
with the Exchangeable Shares with respect to the payment of dividends or the
distribution of assets in the event of the liquidation, dissolution or
winding-up of Acquisitionco, whether voluntary or involuntary, or any other
distribution of the assets of Acquisitionco among its shareholders for the
purpose of winding up its affairs; or
(d) issue any Exchangeable Shares or any other shares of Acquisitionco
ranking equally with the Exchangeable Shares other than by way of stock
dividends to the holders of such Exchangeable Shares; and
(e) issue any shares of Acquisitionco ranking superior to the
Exchangeable Shares.
The restrictions in (S)4(a), (b), (c) and (d) hereof shall not apply if: (i)
all dividends on the outstanding Exchangeable Shares corresponding to dividends
declared and paid to date on the Newmont Shares shall have been declared and
paid on the Exchangeable Shares; and (ii) in the case of an issuance of any
Exchangeable Shares as contemplated in (S)4(d), the members of the board of
directors of Newmont that vote on the matter shall have unanimously approved
the issuance of the additional Exchangeable Shares.
5. DISTRIBUTION ON LIQUIDATION
(1) In the event of the liquidation, dissolution or winding-up of
Acquisitionco or any other distribution of the assets of Acquisitionco among
its shareholders for the purpose of winding up its affairs, subject to the
exercise by Callco of the Liquidation Call Right, a holder of Exchangeable
Shares shall be entitled, subject to applicable law, to receive from the assets
of Acquisitionco in respect of each Exchangeable Share held by such holder on
the effective date (the "LIQUIDATION DATE") of such liquidation, dissolution,
winding-up or other distribution, before any distribution of any part of the
assets of Acquisitionco among the holders of the Common Shares, Special Shares
or any other shares ranking junior to the Exchangeable Shares, an amount per
share (the "LIQUIDATION AMOUNT") equal to the Current Market Price of a Newmont
Share on the last business day prior to the Liquidation Date, which shall be
satisfied in full by Acquisitionco delivering or causing to be delivered to
such holder one Newmont Share, plus an amount equal the Dividend Amount.
(2) On or promptly after the Liquidation Date, and provided the Liquidation
Call Right has not been exercised by Callco, Acquisitionco shall pay or cause
to be paid to the holders of the Exchangeable Shares the Liquidation Amount for
each such Exchangeable Share upon presentation and surrender of the
certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under the CBCA and the Articles of Acquisitionco and such
additional documents, instruments and payments as the Transfer Agent and
Acquisitionco may reasonably require, at the registered office of Acquisitionco
or at any office of the Transfer Agent as may be specified by Acquisitionco by
notice to the holders of the Exchangeable Shares. Payment of the Liquidation
Amount for such Exchangeable Shares shall be made by transferring or causing to
be transferred to each holder the Newmont Shares to which such holder is
entitled and by delivering to such holder, at the address of such holder
recorded in the register of shareholders of Acquisitionco for the Exchangeable
Shares or by holding for pick-up by such holder at the registered office of
Acquisitionco or at any office of the Transfer Agent as may be specified by
Acquisitionco by notice to the holders of Exchangeable Shares, on behalf of
Acquisitionco certificates representing Newmont Shares (which shares shall be
fully paid and shall be free and clear of any lien, claim or encumbrance) and a
cheque of Acquisitionco payable at par at any branch of the bankers of
Acquisitionco in respect of the Dividend Amount, in each case less any amounts
withheld on account of tax required to be deducted and withheld therefrom. On
and after the Liquidation Date, the holders of the Exchangeable Shares shall
cease to be holders of such Exchangeable Shares and shall not be entitled to
exercise any of the rights of holders in respect thereof (including any rights
under the Voting and Exchange Trust Agreement), other than the right to receive
the Liquidation Amount, unless payment of the total Liquidation Amount for such
Exchangeable Shares shall not be made upon presentation and surrender of share
certificates in accordance with the foregoing
49
provisions, in which case the rights of the holders shall remain unaffected
until the Liquidation Amount has been paid in the manner hereinbefore provided.
Acquisitionco shall have the right at any time after the Liquidation Date to
transfer or cause to be issued or transferred to, and deposited with, the Agent
the Liquidation Amount in respect of the Exchangeable Shares represented by
certificates that have not at the Liquidation Date been surrendered by the
holders thereof, such Liquidation Amount to be held by the Agent as trustee for
and on behalf of, and for the use and benefit of, such holders. Upon such
deposit being made, the rights of a holder of Exchangeable Shares after such
deposit shall be limited to receiving its proportionate part of the Liquidation
Amount for such Exchangeable Shares so deposited, without interest, and when
received by the Agent, all dividends and other distributions with respect to
the Newmont Shares to which such holder is entitled with a record date after
the date of such deposit and before the date of transfer of such Newmont Shares
to such holder (in each case less any amounts withheld on account of tax
required to be deducted and withheld therefrom) against presentation and
surrender of the certificates for the Exchangeable Shares held by them in
accordance with the foregoing provisions.
(3) After Acquisitionco has satisfied its obligations to pay the holders of
the Exchangeable Shares the Liquidation Amount per Exchangeable Share pursuant
to (S)5(1) of these share provisions, such holders shall not be entitled to
share in any further distribution of the assets of Acquisitionco.
6. RETRACTION OF EXCHANGEABLE SHARES BY HOLDER
(1) A holder of Exchangeable Shares shall be entitled at any time, subject
to the exercise by Callco of the Retraction Call Right and otherwise upon
compliance with, and subject to, the provisions of this (S)6, to require
Acquisitionco to redeem any or all of the Exchangeable Shares registered in the
name of such holder for an amount per share equal to the Current Market Price
of a Newmont Share on the last business day prior to the Retraction Date (the
"RETRACTION PRICE"), which shall be satisfied in full by Acquisitionco
delivering or causing to be delivered to such holder one Newmont Share (which
on issue will be admitted to listing and trading by the NYSE (subject to
official notice of issuance)) for each Exchangeable Share presented and
surrendered by the holder together with, on the designated payment date
therefor, the Dividend Amount. To effect such redemption, the holder shall
present and surrender at the registered office of Acquisitionco or at any
office of the Transfer Agent as may be specified by Acquisitionco by notice to
the holders of Exchangeable Shares the certificate or certificates representing
the Exchangeable Shares which the holder desires to have Acquisitionco redeem,
together with such other documents and instruments as may be required to effect
a transfer of Exchangeable Shares under the CBCA and the Articles of
Acquisitionco and such additional documents, instruments and payments as the
Transfer Agent and Acquisitionco may reasonably require, and together with a
duly executed statement (the "RETRACTION REQUEST") in the form of Schedule A
hereto or in such other form as may be acceptable to Acquisitionco:
(a) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by such certificate
or certificates (the "RETRACTED SHARES") redeemed by Acquisitionco;
(b) stating the business day on which the holder desires to have
Acquisitionco redeem the Retracted Shares (the "RETRACTION DATE"), provided
that the Retraction Date shall be not less than 10 business days nor more
than 15 business days after the date on which the Retraction Request is
received by Acquisitionco and further provided that, in the event that no
such business day is specified by the holder in the Retraction Request, the
Retraction Date shall be deemed to be the 15th business day after the date
on which the Retraction Request is received by Acquisitionco and subject
also to (S)6(8); and
(c) acknowledging the overriding right (the "RETRACTION CALL RIGHT") of
Callco to purchase all but not less than all the Retracted Shares directly
from the holder and that the Retraction Request shall be deemed to be a
revocable offer by the holder to sell the Retracted Shares to Callco in
accordance with the Retraction Call Right on the terms and conditions set
out in (S)6(3) hereof.
50
(2) Provided that Callco has not exercised the Retraction Call Right, upon
receipt by Acquisitionco or the Transfer Agent in the manner specified in
(S)6(1) of a certificate or certificates representing the number of Retracted
Shares, together with a Retraction Request, and provided that the Retraction
Request is not revoked by the holder in the manner specified in (S)6(7),
Acquisitionco shall redeem the Retracted Shares effective at the close of
business on the Retraction Date and shall transfer or cause to be issued or
transferred to such holder the Newmont Shares to which such holder is entitled
and shall comply with (S)6(4) hereof. If only a part of the Exchangeable Shares
represented by any certificate is redeemed (or purchased by Callco pursuant to
the Retraction Call Right), a new certificate for the balance of such
Exchangeable Shares shall be issued to the holder at the expense of
Acquisitionco.
(3) Subject to the provisions of this (S)6, upon receipt by Acquisitionco of
a Retraction Request, Acquisitionco shall immediately notify Callco thereof and
shall provide to Callco a copy of the Retraction Request. In order to exercise
the Retraction Call Right, Callco must notify Acquisitionco of its
determination to do so (the "CALLCO CALL NOTICE") within five business days of
notification to Callco by Acquisitionco of the receipt by Acquisitionco of the
Retraction Request. If Callco does not so notify Acquisitionco within such five
business day period, Acquisitionco will notify the holder as soon as possible
thereafter that Callco will not exercise the Retraction Call Right. If Callco
delivers the Callco Call Notice within such five business day period, and
provided that the Retraction Request is not revoked by the holder in the manner
specified in (S)6(7), the Retraction Request shall thereupon be considered only
to be an offer by the holder to sell the Retracted Shares to Callco in
accordance with the Retraction Call Right. In such event, Acquisitionco shall
not redeem the Retracted Shares and Callco shall purchase from such holder and
such holder shall sell to Callco on the Retraction Date the Retracted Shares
for a purchase price (the "PURCHASE PRICE") per share equal to the Retraction
Price per share, plus, on the designated payment date therefor, to the extent
not paid by Acquisitionco on the designated payment date therefor, any Dividend
Amount. To the extent that Callco pays the Dividend Amount in respect of the
Retracted Shares, Acquisitionco shall no longer be obligated to pay any
declared and unpaid dividends on such Retracted Shares. For the purpose of
completing a purchase pursuant to the Retraction Call Right, on the Retraction
Date, Callco shall transfer or cause to be issued or transferred to the holder
of the Retracted Shares the Newmont Shares to which such holder is entitled.
Provided that Callco has complied with the immediately preceding sentence and
(S)6(4) hereof, the closing of the purchase and sale of the Retracted Shares
pursuant to the Retraction Call Right shall be deemed to have occurred as at
the close of business on the Retraction Date and, for greater certainty, no
redemption by Acquisitionco of such Retracted Shares shall take place on the
Retraction Date. In the event that Callco does not deliver a Callco Call Notice
within such five business day period, and provided that the Retraction Request
is not revoked by the holder in the manner specified in (S)6(7), Acquisitionco
shall redeem the Retracted Shares on the Retraction Date and in the manner
otherwise contemplated in this (S)6.
(4) Acquisitionco or Callco, as the case may be, shall deliver or cause the
Transfer Agent to deliver to the relevant holder, at the address of the holder
recorded in the register of shareholders of Acquisitionco for the Exchangeable
Shares or at the address specified in the holder's Retraction Request or by
holding for pick-up by the holder at the registered office of Acquisitionco or
at any office of the Transfer Agent as may be specified by Acquisitionco by
notice to the holders of Exchangeable Shares, certificates representing the
Newmont Shares (which shares shall be fully paid and shall be free and clear of
any lien, claim or encumbrance and which on issue will be admitted to listing
and trading by the NYSE (subject to official notice of issuance)) registered in
the name of the holder or in such other name as the holder may request, and, if
applicable and on or before the payment date therefor, a cheque payable at par
at any branch of the bankers of Acquisitionco or Callco, as applicable,
representing the aggregate Dividend Amount, in payment of the Retraction Price
or the Purchase Price, as the case may be, in each case less any amounts
withheld on account of tax required to be deducted and withheld therefrom, and
such delivery of such certificates and cheques on behalf of Acquisitionco or by
Callco, as the case may be, or by the Transfer Agent shall be deemed to be
payment of and shall satisfy and discharge all liability for the Retraction
Price or Purchase Price, as the case may be, to the extent that the same is
represented by such share certificates and cheques (plus any tax deducted and
withheld therefrom and remitted to the proper tax authority).
51
(5) On and after the close of business on the Retraction Date, the holder of
the Retracted Shares shall cease to be a holder of such Retracted Shares and
shall not be entitled to exercise any of the rights of a holder in respect
thereof (including any rights under the Voting and Exchange Trust Agreement),
other than the right to receive the Retraction Price or Purchase Price, as the
case may be, unless upon presentation and surrender of certificates in
accordance with the foregoing provisions, payment of the Retraction Price or
the Purchase Price, as the case may be, shall not be made as provided in
(S)6(4) hereof, in which case the rights of such holder shall remain unaffected
until the Retraction Price or the Purchase Price, as the case may be, has been
paid in the manner hereinbefore provided. On and after the close of business on
the Retraction Date, provided that presentation and surrender of certificates
and payment of the Retraction Price or the Purchase Price, as the case may be,
has been made in accordance with the foregoing provisions, the holder of the
Retracted Shares so redeemed by Acquisitionco or purchased by Callco shall
thereafter be a holder of the Newmont Shares delivered to it.
(6) Notwithstanding any other provision of this (S)6, Acquisitionco shall
not be obligated to redeem Retracted Shares specified by a holder in a
Retraction Request to the extent that such redemption of Retracted Shares would
be contrary to solvency requirements or other provisions of applicable law. If
Acquisitionco believes that on any Retraction Date it would not be permitted by
any of such provisions to redeem the Retracted Shares tendered for redemption
on such date, and provided that Callco shall not have exercised the Retraction
Call Right with respect to the Retracted Shares, Acquisitionco shall only be
obligated to redeem Retracted Shares specified by a holder in a Retraction
Request to the extent of the maximum number that may be so redeemed (rounded
down to a whole number of shares) as would not be contrary to such provisions
and shall notify the holder and the Trustee at least two business days prior to
the Retraction Date as to the number of Retracted Shares which will not be
redeemed by Acquisitionco. In any case in which the redemption by Acquisitionco
of Retracted Shares would be contrary to solvency requirements or other
provisions of applicable law, Acquisitionco shall redeem Retracted Shares in
accordance with (S)6(2) of these share provisions on a pro rata basis and shall
issue to each holder of Retracted Shares a new certificate, at the expense of
Acquisitionco, representing the Retracted Shares not redeemed by Acquisitionco
pursuant to (S)6(2) hereof. If Acquisitionco would otherwise be obligated to
redeem the Retracted Shares pursuant to (S)6(2) of these share provisions but
is not obligated to do so as a result of solvency requirements or other
provisions of applicable law, Newmont shall, subject to applicable law,
purchase such Retracted Shares from such holder on the Retraction Date or as
soon as practicable thereafter on payment by Newmont to such holder of the
Purchase Price for each such Retracted Share, all as more specifically provided
for in the Voting and Exchange Trust Agreement.
(7) A holder of Retracted Shares may, by notice in writing given by the
holder to Acquisitionco before the close of business on the business day
immediately preceding the Retraction Date, withdraw its Retraction Request, in
which event such Retraction Request shall be null and void and, for greater
certainty, the revocable offer constituted by the Retraction Request to sell
the Retracted Shares to Callco shall be deemed to have been revoked.
(8) Notwithstanding any other provision of this (S)6, if:
(a) exercise of the rights of the holders of the Exchangeable Shares, or
any of them, to require Acquisitionco to redeem any Exchangeable Shares
pursuant to this (S)6 on any Retraction Date would require listing
particulars or any similar document to be issued in order to obtain the
approval of NYSE to the listing and trading (subject to official notice of
issuance) of, the Newmont Shares that would be required to be delivered to
such holders of Exchangeable Shares in connection with the exercise of such
rights; and
(b) as a result of (a) above, it would not be practicable
(notwithstanding the reasonable endeavours of Newmont) to obtain such
approvals in time to enable all or any of such Newmont Shares to be admitted
to listing and trading by NYSE (subject to official notice of issuance) when
so delivered,
that Retraction Date shall, notwithstanding any other date specified or
otherwise deemed to be specified in any relevant Retraction Request, be deemed
for all purposes to be the earlier of (i) the second business day immediately
following the date the approvals referred to in (S)6(8)(a) are obtained, and
(ii) the date which is 30 business days after the date on which the relevant
Retraction Request is received by Acquisitionco, and references in these share
provisions to such Retraction Date shall be construed accordingly.
52
7. REDEMPTION OF EXCHANGEABLE SHARES BY ACQUISITIONCO
(1) Subject to applicable law, and provided Callco has not exercised the
Redemption Call Right, Acquisitionco shall on the Redemption Date redeem all
but not less than all of the then outstanding Exchangeable Shares for an amount
per share (the "REDEMPTION PRICE") equal to the Current Market Price of a
Newmont Share on the last business day prior to the Redemption Date, which
shall be satisfied in full by Acquisitionco causing to be delivered to each
holder of Exchangeable Shares one Newmont Share for each Exchangeable Share
held by such holder, together with an amount equal to the Dividend Amount.
(2) In any case of a redemption of Exchangeable Shares under this (S)7,
Acquisitionco shall, at least 60 days before the Redemption Date (other than a
Redemption Date established in connection with a Newmont Control Transaction or
an Exchangeable Share Voting Event), send or cause to be sent to each holder of
Exchangeable Shares a notice in writing of the redemption by Acquisitionco or
the purchase by Callco under the Redemption Call Right, as the case may be, of
the Exchangeable Shares held by such holder. In the case of a Redemption Date
established in connection with a Newmont Control Transaction or an Exchangeable
Share Voting Event, the written notice of the redemption by Acquisitionco or
the purchase by Callco under the Redemption Call Right will be sent on or
before the Redemption Date, on as many days prior written notice as may be
determined by the Board of Directors to be reasonably practicable in the
circumstances. In any such case, such notice shall set out the formula for
determining the Redemption Price or the Redemption Call Purchase Price, as the
case may be, the Redemption Date and, if applicable, particulars of the
Redemption Call Right.
(3) On or after the Redemption Date and provided that the Redemption Call
Right has not been exercised by Callco, Acquisitionco shall pay or cause to be
paid to the holders of the Exchangeable Shares to be redeemed the Redemption
Price for each such Exchangeable Share, upon presentation and surrender at the
registered office of Acquisitionco or at any office of the Transfer Agent as
may be specified by Acquisitionco in such notice of the certificates
representing such Exchangeable Shares, together with such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares
under the CBCA and the Articles of Acquisitionco and such additional documents,
instruments and payments as the Transfer Agent and Acquisitionco may reasonably
require. Payment of the Redemption Price for such Exchangeable Shares shall be
made by transferring or causing to be issued or transferred to each holder the
Newmont Shares to which such holder is entitled and by delivering to such
holder, at the address of such holder recorded in the register of shareholders
of Acquisitionco for the Exchangeable Shares or by holding for pick-up by such
holder at the registered office of Acquisitionco or at any office of the
Transfer Agent as may be specified by Acquisitionco in such notice, on behalf
of Acquisitionco certificates representing Newmont Shares (which shares shall
be fully paid and shall be free and clear of any lien, claim or encumbrance),
and, if applicable, a cheque of Acquisitionco payable at par at any branch of
the bankers of Acquisitionco in payment of the Dividend Amount, in each case
less any amounts withheld on account of tax required to be deducted and
withheld therefrom. On and after the Redemption Date, the holders of the
Exchangeable Shares called for redemption shall cease to be holders of such
Exchangeable Shares and shall not be entitled to exercise any of the rights of
holders in respect thereof (including any rights under the Voting and Exchange
Trust Agreement), other than the right to receive the Redemption Price, unless
payment of the Redemption Price for such Exchangeable Shares shall not be made
upon presentation and surrender of certificates in accordance with the
foregoing provisions, in which case the rights of the holders shall remain
unaffected until the Redemption Price has been paid in the manner hereinbefore
provided. Acquisitionco shall have the right at any time after the sending of
notice of its intention to redeem the Exchangeable Shares as aforesaid to
transfer or cause to be issued or transferred to, and deposited with, the Agent
named in such notice the Redemption Price for the Exchangeable Shares (except
as otherwise provided in this (S)7(3) so called for redemption, or of such of
the said Exchangeable Shares represented by certificates that have not at the
date of such deposit been surrendered by the holders thereof in connection with
such redemption, less any amounts withheld on account of tax required to be
deducted and withheld therefrom, such aggregate Redemption Price to be held by
the Agent as trustee for and on behalf of, and for the use and benefit of, such
holders. Upon the later of such deposit being made and the Redemption Date, the
Exchangeable Shares in respect whereof such deposit shall have been made shall
be redeemed and the rights of the holders thereof after such deposit or
Redemption
53
Date, as the case may be, shall be limited to receiving their proportionate
part of the aggregate Redemption Price for such Exchangeable Shares, without
interest, and when received by the Agent, all dividends and other distributions
with respect to the Newmont Shares to which such holder is entitled with a
record date after the later of the date of such deposit and the Redemption Date
and before the date of transfer of such Newmont Shares to such holder (in each
case less any amounts withheld on account of tax required to be deducted and
withheld therefrom), against presentation and surrender of the certificates for
the Exchangeable Shares held by them in accordance with the foregoing
provisions.
8. PURCHASE FOR CANCELLATION
Subject to applicable law, Acquisitionco may at any time and from time to
time purchase for cancellation all or any part of the Exchangeable Shares.
9. VOTING RIGHTS
Except as required by applicable law and by (S)10 hereof, the holders of the
Exchangeable Shares shall not be entitled as such to receive notice of or to
attend any meeting of the shareholders of Acquisitionco or to vote at any such
meeting. Without limiting the generality of the foregoing, the holders of the
Exchangeable Shares shall not have class votes except as required by applicable
law.
10. AMENDMENT AND APPROVAL
(1) The rights, privileges, restrictions and conditions attaching to the
Exchangeable Shares may be added to, changed or removed only with the approval
of the holders of the Exchangeable Shares given as hereinafter specified.
(2) Any approval given by the holders of the Exchangeable Shares to add to,
change or remove any right, privilege, restriction or condition attaching to
the Exchangeable Shares or any other matter requiring the approval or consent
of the holders of the Exchangeable Shares in accordance with applicable law
shall be deemed to have been sufficiently given if it shall have been given in
accordance with applicable law, subject to a minimum requirement that such
approval be evidenced by resolution passed by not less than two-thirds of the
votes cast on such resolution at a meeting of holders of Exchangeable Shares
duly called and held at which the holders of at least 10% of the outstanding
Exchangeable Shares at that time are present or represented by proxy; provided
that if at any such meeting the holders of at least 10% of the outstanding
Exchangeable Shares at that time are not present or represented by proxy within
one-half hour after the time appointed for such meeting, then the meeting shall
be adjourned to such date not less than five days thereafter and to such time
and place as may be designated by the Chairman of such meeting. At such
adjourned meeting the holders of Exchangeable Shares present or represented by
proxy thereat may transact the business for which the meeting was originally
called and a resolution passed thereat by the affirmative vote of not less than
two-thirds of the votes cast on such resolution at such meeting shall
constitute the approval or consent of the holders of the Exchangeable Shares.
11. RECIPROCAL CHANGES, ETC. IN RESPECT OF NEWMONT SHARES
(1) Each holder of an Exchangeable Share acknowledges that the Support
Agreement provides, in part, that so long as any Exchangeable Shares not owned
by Newmont or its affiliates are outstanding, Newmont will not without the
prior approval of Acquisitionco and the prior approval of the holders of the
Exchangeable Shares given in accordance with (S)10(2) of these share provisions:
(a) issue or distribute Newmont Shares (or securities exchangeable for or
convertible into Newmont Shares) to the holders of all or substantially all
of the then outstanding Newmont Shares by way of stock dividend or other
distribution, other than an issue of Newmont Shares (or securities
exchangeable for or convertible into Newmont Shares) to holders of Newmont
Shares (i) who exercise an option to receive dividends in Newmont Shares (or
securities exchangeable for or convertible into Newmont Shares) in lieu of
receiving cash dividends, or (ii) pursuant to any dividend reinvestment plan
or similar arrangement;
54
(b) issue or distribute rights, options or warrants to the holders of all
or substantially all of the then outstanding Newmont Shares entitling them
to subscribe for or to purchase Newmont Shares (or securities exchangeable
for or convertible into Newmont Shares); or
(c) issue or distribute to the holders of all or substantially all of the
then outstanding Newmont Shares:
(i) shares or securities of Newmont of any class other than Newmont
Shares (other than shares convertible into or exchangeable for Newmont
Shares);
(ii) rights, options or warrants other than those referred to in
(S)11(1)(b) above;
(iii) evidence of indebtedness of Newmont; or
(iv) assets of Newmont,
unless the economic equivalent on a per share basis of such rights, options,
securities, shares, evidences of indebtedness or other assets is issued or
distributed simultaneously to holders of the Exchangeable Shares and at
least 7 days prior written notice thereof is given to the holders of
Exchangeable Shares; provided that, for greater certainty, the above
restrictions shall not apply to any securities issued or distributed by
Newmont in order to give effect to and consummate the transactions
contemplated by, and in accordance with, the Plan of Arrangement.
(2) Each holder of an Exchangeable Share acknowledges that the Support
Agreement further provides, in part, that so long as any Exchangeable Shares
not owned by Newmont or its affiliates are outstanding, Newmont will not
without the prior approval of Acquisitionco and the prior approval of the
holders of the Exchangeable Shares given in accordance with (S)10(2) of these
share provisions:
(a) subdivide, redivide or change the then outstanding Newmont Shares
into a greater number of Newmont Shares;
(b) reduce, combine, consolidate or change the then outstanding Newmont
Shares into a lesser number of Newmont Shares; or
(c) reclassify or otherwise change the Newmont Shares or effect an
amalgamation, merger, reorganization or other transaction affecting the
Newmont Shares,
unless the same or an economically equivalent change shall simultaneously be
made to, or in, the rights of the holders of the Exchangeable Shares and at
least 7 days prior written notice is given to the holders of Exchangeable
Shares. The Support Agreement further provides, in part, that the aforesaid
provisions of the Support Agreement shall not be changed without the
approval of the holders of the Exchangeable Shares given in accordance with
(S)10(2) of these share provisions.
12. ACTIONS BY ACQUISITIONCO UNDER SUPPORT AGREEMENT
(1) Acquisitionco will take all such actions and do all such things as shall
be necessary to perform and comply with and to ensure performance and
compliance by Newmont, Callco and Acquisitionco with all provisions of the
Support Agreement applicable to Newmont, Callco and Acquisitionco,
respectively, in accordance with the terms thereof including taking all such
actions and doing all such things as shall be necessary to enforce for the
direct benefit of Acquisitionco all rights and benefits in favour of
Acquisitionco under or pursuant to such agreement.
(2) Acquisitionco shall not propose, agree to or otherwise give effect to
any amendment to, or waiver or forgiveness of its rights or obligations under,
the Support Agreement without the approval of the holders of the Exchangeable
Shares given in accordance with (S)10(2) of these share provisions other than
such amendments, waivers and/or forgiveness as may be necessary or advisable
for the purposes of:
(a) adding to the covenants of the other parties to such agreement for
the protection of Acquisitionco or the holders of the Exchangeable Shares
thereunder;
55
(b) making such provisions or modifications not inconsistent with such
agreement as may be necessary or desirable with respect to matters or
questions arising thereunder which, in the good faith opinion of the Board
of Directors, it may be expedient to make, provided that the Board of
Directors shall be of the good faith opinion, after consultation with
counsel, that such provisions and modifications will not be prejudicial to
the interests of the holders of the Exchangeable Shares; or
(c) making such changes in or corrections to such agreement which, on the
advice of counsel to Acquisitionco, are required for the purpose of curing
or correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error contained therein.
13. LEGEND; CALL RIGHTS; WITHHOLDING RIGHTS
(1) The certificates evidencing the Exchangeable Shares shall contain or
have affixed thereto a legend in form and on terms approved by the Board of
Directors, with respect to the Support Agreement, the provisions of the Plan of
Arrangement relating to the Liquidation Call Right and the Redemption Call
Right, the Voting and Exchange Trust Agreement (including the provisions with
respect to the voting rights and automatic exchange thereunder) and the
Retraction Call Right.
(2) Each holder of an Exchangeable Share, whether of record or beneficial,
by virtue of becoming and being such a holder shall be deemed to acknowledge
each of the Liquidation Call Right, the Retraction Call Right and the
Redemption Call Right, in each case, in favour of Callco, and the overriding
nature thereof in connection with the liquidation, dissolution or winding-up of
Acquisitionco or any other distribution of the assets of Acquisitionco among
its shareholders for the purpose of winding up its affairs, or the retraction
or redemption of Exchangeable Shares, as the case may be, and to be bound
thereby in favour of Callco as therein provided.
(3) Acquisitionco, Callco, Newmont and the Transfer Agent shall be entitled
to deduct and withhold from any dividend or consideration otherwise payable to
any holder of Exchangeable Shares such amounts as Acquisitionco, Callco,
Newmont or the Transfer Agent is required to deduct and withhold with respect
to such payment under the INCOME TAX ACT (Canada) or United States tax laws or
any provision of provincial, territorial, state, local or foreign tax law, in
each case, as amended. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes hereof as having been paid
to the holder of the Exchangeable Shares in respect of which such deduction and
withholding was made, provided that such withheld amounts are actually remitted
to the appropriate taxing Agency. To the extent that the amount so required to
be deducted or withheld from any payment to a holder exceeds the cash portion
of the consideration otherwise payable to the holder, Acquisitionco, Callco,
Newmont and the Transfer Agent are hereby authorized to sell or otherwise
dispose of such portion of the consideration as is necessary to provide
sufficient funds to Acquisitionco, Callco, Newmont or the Transfer Agent, as
the case may be, to enable it to comply with such deduction or withholding
requirement and Acquisitionco, Callco, Newmont or the Transfer Agent shall
notify the holder thereof and remit any unapplied balance of the net proceeds
of such sale.
14. NOTICES
(1) Any notice, request or other communication to be given to Acquisitionco
by a holder of Exchangeable Shares shall be in writing and shall be valid and
effective if given by first class mail (postage prepaid) or by telecopy or by
delivery to the registered office of Acquisitionco and addressed to the
attention of the Secretary of Acquisitionco. Any such notice, request or other
communication, if given by mail, telecopy or delivery, shall only be deemed to
have been given and received upon actual receipt thereof by Acquisitionco.
(2) Any presentation and surrender by a holder of Exchangeable Shares to
Acquisitionco or the Transfer Agent of certificates representing Exchangeable
Shares in connection with the liquidation, dissolution or winding-up of
Acquisitionco or the retraction or redemption of Exchangeable Shares shall be
made by first class mail (postage prepaid) or by delivery to the registered
office of Acquisitionco or to such office of the Transfer
56
Agent as may be specified by Acquisitionco, in each case, addressed to the
attention of the Secretary of Acquisitionco. Any such presentation and
surrender of certificates shall only be deemed to have been made and to be
effective upon actual receipt thereof by Acquisitionco or the Transfer Agent,
as the case may be. Any such presentation and surrender of certificates made by
first class mail (postage prepaid) shall be at the sole risk of the holder
mailing the same.
(3) Any notice, request or other communication to be given to a holder of
Exchangeable Shares by or on behalf of Acquisitionco shall be in writing and
shall be valid and effective if given by first class mail (postage prepaid) or
by delivery to the address of the holder recorded in the register of
shareholders of Acquisitionco or, in the event of the address of any such
holder not being so recorded, then at the last known address of such holder.
Any such notice, request or other communication, if given by mail, shall be
deemed to have been given and received on the third business day following the
date of mailing and, if given by delivery, shall be deemed to have been given
and received on the date of delivery. Accidental failure or omission to give
any notice, request or other communication to one or more holders of
Exchangeable Shares shall not invalidate or otherwise alter or affect any
action or proceeding to be taken by Acquisitionco pursuant thereto.
(4) In the event of any interruption of mail service immediately prior to a
scheduled mailing or in the period following a mailing during which delivery
normally would be expected to occur, Newmont intends to make reasonable efforts
to disseminate any notice by other means, such as publication. Except as
otherwise required or permitted by law, if post offices in Canada or the United
States are not open for the deposit of mail, any notice which Newmont or the
Transfer Agent may give or cause to be given under the Arrangement will be
deemed to have been properly given and to have been received by holders of
Exchangeable Shares if (i) it is given to the TSE for dissemination or (ii) it
is published once in the National Edition of The Globe and Mail and in the
daily newspapers of general circulation in each of the French and English
languages in the City of Montreal, provided that if the National Edition of The
Globe and Mail is not being generally circulated, publication thereof will be
made in any other daily newspaper of general circulation published in the City
of Toronto.
Notwithstanding any other provisions of these share provisions, notices,
other communications and deliveries need not be mailed if Newmont determines
that delivery thereof by mail may be delayed. Persons entitled to any
deliveries (including certificates and cheques) which are not mailed for the
foregoing reason may take delivery thereof at the office of the Transfer Agent
to which the deliveries were made, upon application to the Transfer Agent,
until such time as Newmont has determined that delivery by mail will not longer
be delayed. Newmont will provide notice of any such determination not to mail
made hereunder as soon as reasonably practicable after the making of such
determination and in accordance with this (S)14(4). Such deliveries in such
circumstances will constitute delivery to the persons entitled thereto.
15. DISCLOSURE OF INTERESTS IN EXCHANGEABLE SHARES
Acquisitionco shall be entitled to require any holder of an Exchangeable
Share or any person who Acquisitionco knows or has reasonable cause to believe
holds any interest whatsoever in an Exchangeable Share to confirm that fact or
to give such details as to whom has an interest in such Exchangeable Share as
would be required (if the Exchangeable Shares were a class of "equity shares"
of Acquisitionco) under (S)101 of the Securities Act or as would be required
under the Articles of Newmont or any laws or regulations, or pursuant to the
rules or regulations of any regulatory Agency if the Exchangeable Shares were
Newmont Shares.
57
SCHEDULE A
RETRACTION REQUEST
[TO BE PRINTED ON EXCHANGEABLE SHARE CERTIFICATES]
To: . ("ACQUISITIONCO") and . ("CALLCO") and Newmont Mining Corporation
("NEWMONT")
This notice is given pursuant to (S)6 of the provisions (the "SHARE
PROVISIONS") attaching to the Exchangeable Shares of Acquisitionco represented
by this certificate and all capitalized words and expressions used in this
notice that are defined in the Share Provisions have the meanings ascribed to
such words and expressions in such Share Provisions.
The undersigned hereby notifies Acquisitionco that, provided that the
Retraction Call Right referred to below has not been exercised, the undersigned
desires to have Acquisitionco redeem in accordance with (S)6 of the Share
Provisions:
[_] all share(s) represented by this certificate; or
[_] share(s) only represented by this certificate.
-----
The undersigned hereby notifies Acquisitionco that the Retraction Date shall be
.
NOTE: The Retraction Date must be a business day and must not be less than 10
business days nor more than 15 business days after the date upon
which this notice is received by Acquisitionco. If no such business
day is specified above, the Retraction Date shall be deemed to be the
15th business day after the date on which this notice is received by
Acquisitionco.
The undersigned acknowledges the overriding Retraction Call Right of Callco
or Newmont to purchase all but not less than all the Retracted Shares from the
undersigned and that this notice is and shall be deemed to be a revocable offer
by the undersigned to sell the Retracted Shares to Callco or Newmont in
accordance with the Retraction Call Right on the Retraction Date for the
Purchase Price and on the other terms and conditions set out in (S)6(3) of the
Share Provisions. This Retraction Request, and this offer to sell the Retracted
Shares to Callco, may be revoked and withdrawn by the undersigned only by
notice in writing given to Acquisitionco at any time before the close of
business on the business day immediately preceding the Retraction Date.
The undersigned acknowledges that if, as a result of solvency provisions of
applicable law, Acquisitionco is unable to redeem all Retracted Shares, the
Retracted Shares will be automatically exchanged pursuant to the Voting and
Exchange Trust Agreement so as to require Newmont to purchase the unredeemed
Retracted Shares.
The undersigned hereby represents and warrants to Callco, Newmont and
Acquisitionco that the undersigned:
[_] is
(select one)
[_] is not
a non-resident of Canada for purposes of the INCOME TAX ACT (Canada). THE
UNDERSIGNED ACKNOWLEDGES THAT IN THE ABSENCE OF AN INDICATION THAT THE
UNDERSIGNED IS NOT A NON-RESIDENT OF CANADA, WITHHOLDING ON ACCOUNT OF CANADIAN
TAX MAY BE MADE FROM AMOUNTS PAYABLE TO THE UNDERSIGNED ON THE REDEMPTION OR
PURCHASE OF THE RETRACTED SHARES.
[_] The undersigned hereby represents and warrants to Callco, Newmont and
Acquisitionco that the undersigned is not a person within the United States of
America, its territories or possessions or any state thereof, or the
58
District of Columbia (collectively, the "United States") or a U.S. person
(within the meaning of Regulation S under the United States SECURITIES ACT OF
1933, as amended) and is not making this Retraction Request for the account or
benefit of a person within the United States or such a U.S. person.
The undersigned hereby represents and warrants to Callco, Newmont and
Acquisitionco that the undersigned has good title to, and owns, the share(s)
represented by this certificate to be acquired by Callco, Newmont or
Acquisitionco, as the case may be, free and clear of all liens, claims and
encumbrances.
- ------------------------ -------------------------- ------------------------
(Date) (Signature of Shareholder) (Guarantee of Signature)
[_] Please check box if the certificates for Newmont Shares and any cheque(s)
resulting from the retraction or purchase of the Retracted Shares are to be
held for pick-up by the shareholder from the Transfer Agent, failing which such
certificates and cheque(s) will be mailed to the last address of the
shareholder as it appears on the register.
NOTE: This panel must be completed and this certificate, together with such
additional documents and payments (including, without limitation, any
applicable Stamp Taxes) as the Transfer Agent may require, must be
deposited with the Transfer Agent. The securities and any cheque(s)
resulting from the retraction or purchase of the Retracted Shares will be
issued and registered in, and made payable to, respectively, the name of
the shareholder as it appears on the register of Acquisitionco and the
certificates for Newmont Shares and any cheque(s) resulting from such
retraction or purchase will be delivered to such shareholder as indicated
above, unless the form appearing immediately below is duly completed.
Date: _________________________________________________________________________
Name of Person in Whose Name Securities or Cheque(s)
Are to be Registered, Issued or Delivered (please print):
Street Address or P.O. Box:
Signature of Shareholder:
City, Province and Postal Code:
Signature Guaranteed by:
NOTE: If this Retraction Request is for less than all of the shares represented
by this certificate, a certificate representing the remaining share(s) of
Acquisitionco represented by this certificate will be issued and
registered in the name of the shareholder as it appears on the register
of Acquisitionco, unless the Share Transfer Power on the share
certificate is duly completed in respect of such share(s).
59
SCHEDULE C
MUTUAL CONDITIONS
The respective obligations of Franco-Nevada and Newmont to complete the
Arrangement shall be subject to the satisfaction, on or before the Outside
Date, of the following conditions, each of which may be waived only by the
written mutual consent of Franco-Nevada and Newmont:
(a) the Arrangement, with or without amendment, shall have been approved
at the Franco-Nevada Special Meeting in accordance with the Interim Order;
(b) the shareholders of Newmont shall have approved, in accordance with
applicable Law, the issuance of Newmont Shares pursuant to the Arrangement,
the acquisition of Normandy and the exchange of the Exchangeable Shares and
the consummation of the Arrangement and the acquisition of Normandy;
(c) the Final Order shall have been obtained in form and substance
satisfactory to each of Franco-Nevada and Newmont;
(d) the Newmont Shares and Exchangeable Shares, issuable to the
Franco-Nevada Shareholders pursuant to the Arrangement, shall have been
approved for listing on the NYSE, subject to official notice of issuance,
and conditionally approved for listing on the TSE, respectively;
(e) there shall not be in force any injunction, order, judgement or
decree restraining or enjoining the consummation of the Transactions and
there shall be no:
(i) proceeding, of a judicial or administrative nature or otherwise,
brought by or before an Agency in progress, that, if successful, or
(ii) Law proposed, enacted, promulgated or applied, that would result
in an order or ruling that,
in either case, would reasonably be expected to preclude completion of, or
materially impair the benefits to be realized from, the Transactions in
accordance with the terms hereof or be Materially Adverse to either
Franco-Nevada and its Subsidiaries or Newmont and its Subsidiaries, in each
case taken as a whole;
(f) Newmont and its associates shall have a "relevant interest" in at
least 50.1% of the shares in the capital of Normandy, calculated on a fully
diluted basis; and
(g) all necessary regulatory approvals, including, without limitation,
the approval of all securities regulatory authorities having jurisdiction
over the exchange of Franco-Nevada Shares for the Newmont Shares and
Exchangeable Shares as provided in the Arrangement, and all other approvals
necessary to permit the first trade of the Newmont Share and Exchangeable
Shares, shall have been obtained, in each case without any condition
unacceptable to Newmont and Franco-Nevada.
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SCHEDULE D
CONDITIONS IN FAVOUR OF FRANCO-NEVADA
The obligations of Franco-Nevada to complete the Transactions shall also be
subject to the satisfaction, on or before the Outside Date, of the following
conditions, each of which is for the exclusive benefit of Franco-Nevada and may
be waived, in whole or in part, by Franco-Nevada in its sole discretion:
(a) all necessary corporate action shall have been taken by Newmont to
authorize the execution and delivery of this agreement and the consummation
of the Arrangement and the performance of its other obligations under this
agreement;
(b) Newmont shall not have failed to perform any of the obligations to be
performed by it under this agreement on or prior to the Effective Date or
such failure is not Materially Adverse to Newmont and its Subsidiaries,
taken as a whole;
(c) all waivers, consents, permits, orders and approvals of any Agency
(including the Regulatory Approvals), and the expiry of any waiting periods
(whether regulatory or contractual), in connection with, or required to
permit, the consummation of the Arrangement, shall have been obtained or
received or, in the case of such waiting periods, shall have expired, on
terms that are not Materially Adverse to Newmont and its Subsidiaries, in
each case taken as a whole;
(d) the representations and warranties of Newmont under this agreement
shall be true and correct in all material respects (except where already
qualified as to materiality or the absence of a Materially Adverse effect),
on and as of the Effective Date as if made on and as of such date (except to
the extent such representations and warranties refer solely as of an earlier
date, in which event such representations and warranties shall be true and
correct to such extent as of such earlier date, or except as affected by the
Transactions), and Franco-Nevada shall have received a certificate of
Newmont addressed to Franco-Nevada and dated the Effective Date, signed on
behalf of Newmont by a senior officer of Newmont (on Newmont's behalf and
without personal liability) confirming the same as at the Effective Date; and
(e) there shall not have occurred, since the date of this agreement, any
event, change, effect or development that individually or in the aggregate,
has had or is reasonably likely to have, a Materially Adverse effect on
Newmont and its Subsidiaries, taken as a whole.
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SCHEDULE E
CONDITIONS IN FAVOUR OF NEWMONT
The obligations of Newmont to complete the Transactions shall also be
subject to the satisfaction, on or before the Outside Date, of the following
conditions, each of which is for the exclusive benefit of Newmont and may be
waived, in whole or in part, by Newmont in its sole discretion:
(a) the board of directors of Franco-Nevada shall have adopted all
necessary resolutions, and all other necessary corporate action shall have
been taken by Franco-Nevada to authorize the execution and delivery of this
agreement and the consummation of the Arrangement and the performance of its
provisions;
(b) Franco-Nevada shall not have failed to perform any of the obligations
to be performed by it under this agreement on or prior to the Effective Date
or such failure is not Materially Adverse to Franco-Nevada and its
Subsidiaries, taken as a whole;
(c) the representations and warranties of Franco-Nevada under this
agreement shall be true and correct in all material respects (except where
already qualified as to materiality or the absence of a Materially Adverse
effect), on and as of the Effective Date as if made on and as of such date
(except to the extent such representations and warranties refer solely as of
an earlier date, in which event such representations and warranties shall be
true and correct to such extent as of such earlier date, or except as
affected by the Transactions), and Newmont shall have received a certificate
of Franco-Nevada addressed to Newmont and dated the Effective Date, signed
on behalf of Franco-Nevada by a senior officer of Franco-Nevada (on
Franco-Nevada's behalf and without personal liability) confirming the same
as at the Effective Date;
(d) there shall not have been delivered and not withdrawn notices of
dissent with respect to the Arrangement in respect of more than 4 million
Franco-Nevada Shares;
(e) there shall not have occurred, since the date of this agreement, any
event, change, effect or development that individually or in the aggregate,
has had or is reasonably likely to have, a Materially Adverse effect on
Franco-Nevada and its Subsidiaries, taken as a whole;
(f) Newmont shall have received a FIRPTA certificate in form and content
reasonably acceptable to Newmont and its counsel signed on behalf of
Franco-Nevada by a duly authorized officer of Franco-Nevada;
(g) there shall not be pending or threatened any suit, action or
proceeding by or before any Agency
(i) seeking to prohibit or restrict the acquisition by Newmont or any
of its direct or indirect Subsidiaries of any Franco-Nevada Shares, or
(ii) seeking to restrain or prohibit the consummation of the
Transactions, or
(iii) seeking to impose limitations on the ability of Newmont or any
of its direct or indirect Subsidiaries to acquire or hold, or exercise
full rights of ownership of any Franco-Nevada Shares; and
(h) all waivers, consents, permits, orders and approvals of any Agency or
other third party (including the Regulatory Approvals), and the expiry of
any waiting periods (whether regulatory or contractual), in connection with,
or required to permit, the consummation of the Arrangement, shall have been
obtained or received or, in the case of such waiting periods, shall have
expired, on terms that are not Materially Adverse to either Franco-Nevada or
Newmont and their respective Subsidiaries, in each case taken as a whole.
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SCHEDULE F
REPRESENTATIONS AND WARRANTIES OF FRANCO-NEVADA
Franco-Nevada represents and warrants to Newmont as follows (and
acknowledges that Newmont is relying on such representations and warranties in
entering into this agreement and completing the Transactions):
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Franco-Nevada and
each of its Subsidiaries is a corporation, partnership or other legal entity
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite power and
authority to own its assets and conduct its business as currently owned and
conducted. Each of Franco-Nevada and each of its Subsidiaries is duly
qualified or licensed to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing
of its properties makes such qualification or licensing necessary.
Franco-Nevada has made available for review by Newmont complete and correct
copies of its Articles of Incorporation and By-Laws and the certificates of
incorporation and by-laws or comparable organization documents of the
Subsidiaries of Franco-Nevada, in each case as amended to the date of this
agreement. Franco-Nevada is not in violation of any provision of its
Articles of Incorporation or By-Laws, and no Subsidiary of Franco-Nevada is
in violation of any provisions of its certificate of incorporation, by-laws
or comparable organizational documents.
(b) FRANCO-NEVADA SUBSIDIARIES. (S)(b) of the Disclosure Statement lists
each Subsidiary of Franco-Nevada and the ownership or interest therein of
Franco-Nevada. All the outstanding shares of capital stock of each such
Subsidiary have been validly issued and are fully paid and non-assessable
and, except as set forth in (S)(b) of the Disclosure Statement, are owned by
Franco-Nevada, by another Subsidiary of Franco-Nevada or by Franco-Nevada
and another Subsidiary of Franco-Nevada, free and clear of all pledges,
claims, liens, charges, mortgages, deeds of trust, net profit interests, net
smelter returns, royalties, overriding royalty interests, other payments out
of production, other burdens, security interests and other encumbrances of
any kind or nature whatsoever held by third parties (collectively, "LIENS").
Except for the capital stock of the Subsidiaries of Franco-Nevada and except
for the ownership interests set forth in (S)(b) of the Disclosure Statement,
Franco-Nevada does not own, directly or indirectly, any capital stock or
other ownership interest, with a fair market value as of the date of this
agreement greater than $100,000 in any person.
(c) CAPITALIZATION. The authorized capital (the "AUTHORIZED CAPITAL") and
issued capital of Franco-Nevada is as set out in the recitals to this
agreement. Except as set forth above, there are no shares of capital stock
or other voting securities of Franco-Nevada issued, reserved for issuance or
outstanding. Except as set forth in (S)(c) of the Disclosure Statement,
there are not any bonds, debentures, notes or other indebtedness of
Franco-Nevada having the right to vote (or convertible into, or exchangeable
for, securities having the right to vote) on any matters on which
shareholders of Franco-Nevada must vote. Except as set forth above and
except as set forth in (S)(c) of the Disclosure Statement, as of the date of
this agreement, there are not any options, warrants, puts, calls, rights,
commitments, agreements, arrangements or undertakings of any kind
(collectively, "OPTIONS") to which Franco-Nevada or any of its Subsidiaries
is a party or by which any of them is bound relating to the issued or
unissued capital stock of Franco-Nevada or any of its Subsidiaries, or
obligating Franco-Nevada or any of its Subsidiaries to issue, transfer,
grant, sell or pay for or repurchase any shares of capital stock or other
equity interests in, or securities convertible or exchangeable for any
capital stock or other equity interests in, Franco-Nevada or any of its
Subsidiaries or obligating Franco-Nevada or any of its Subsidiaries to
issue, grant, extend or enter into any such Options. All shares of
Franco-Nevada's capital stock that are subject to issuance as aforesaid,
upon issuance on the terms and conditions specified in the instrument
pursuant to which they are issuable, will be duly authorized, validly
issued, fully paid and non-assessable. The issuance and sale of all of the
shares of capital stock described in this (S)(c) of Schedule F have been in
compliance with all Laws. Franco-Nevada has previously provided Newmont with
a schedule setting forth the names of, and the number of shares of each
class (including the number of shares issuable upon exercise of
Franco-Nevada Stock Options and the exercise price and vesting schedule with
respect thereto) and the number of options held by, all holders of
Franco-Nevada Stock Options. (S)(c) of the
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Disclosure Statement sets forth the average exercise price for outstanding
Franco-Nevada Stock Options. Except as set forth in (S)(c) of the Disclosure
Statement, Franco-Nevada has not agreed to register any securities under any
securities Laws or granted registration rights to any person or entity;
copies of all such agreements have previously been made available to
Newmont. Except as set forth above and in (S)(c) of the Disclosure
Statement, as of the date of this agreement, there are not any outstanding
contractual obligations or other requirements of Franco-Nevada or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any shares of
capital stock of Franco-Nevada or any of its Subsidiaries, or provide funds
to or make any investment (in the form of a loan, capital contribution or
otherwise) in, any Subsidiary of Franco-Nevada or any other person. Without
limiting the generality of the foregoing, there are no stock appreciation
rights, phantom equity or similar rights, agreements, arrangements or
commitments based upon the book value, income or any other attribute of
Franco-Nevada or any of its Subsidiaries.
(d) AUTHORITY; NON-CONTRAVENTION. Franco-Nevada has all requisite
corporate power and corporate authority to enter into this agreement and,
subject to the Franco-Nevada Shareholder Approval, to consummate the
Transactions and to perform its obligations under this agreement. The Board
of Directors of Franco-Nevada, by the unanimous vote of its outside
directors, has approved this agreement and the Transactions and has resolved
to recommend to Franco-Nevada Shareholders that Franco-Nevada Shareholders
give the Franco-Nevada Shareholder Approval. The execution and delivery of
this agreement by Franco-Nevada and the consummation by Franco-Nevada of the
Transactions have been duly authorized by all necessary corporate action on
the part of Franco-Nevada, subject to the Franco-Nevada Shareholder
Approval. No other corporate proceedings on the part of Franco-Nevada or any
of its Subsidiaries are necessary to authorize this agreement and, subject
to the Franco-Nevada Shareholder Approval, the Transactions. This agreement
has been duly executed and delivered by Franco-Nevada and constitutes a
valid and binding obligation of Franco-Nevada, enforceable by Newmont
against Franco-Nevada and each of its Subsidiaries in accordance with its
terms, subject to the availability of equitable remedies and the enforcement
of creditors' rights generally. The execution and delivery of this agreement
does not, and the consummation of the Transactions and compliance with the
provisions of this agreement will not, conflict with, or result in any
violation of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of consent, termination, purchase,
cancellation or acceleration of any obligation or to loss of any property,
rights or benefits under, or result in the imposition of any additional
obligation under, or result in the creation of any Lien upon any of the
properties or assets of Franco-Nevada or any of its Subsidiaries under, (i)
the Articles of Arrangement or By-laws of Franco-Nevada or the comparable
organization documents of any of its Subsidiaries; (ii) any contract,
instrument, permit, concession, franchise, license, loan or credit
agreement, note, bond, mortgage, indenture, lease or other property
agreement, partnership or joint venture agreement or other legally binding
agreement, arrangement or understanding whether oral or written (a
"CONTRACT"), to which Franco-Nevada or any of its Subsidiaries is a party or
by which any of them or their respective properties or assets is bound or
affected, or (iii) subject to the governmental filings and other matters
referred to in the following sentence, any Law applicable to Franco-Nevada
or any of its Subsidiaries or their respective properties or assets. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any Agency, is required by or with respect to Franco-Nevada
or any of its Subsidiaries in connection with the execution and delivery of
this agreement by Franco-Nevada or the consummation by Franco-Nevada of the
Transactions, except for (i) the filing with the applicable securities
regulatory Agencies of a proxy statement relating to the Franco-Nevada
Special Meeting (as amended or supplemented from time to time, the "PROXY
STATEMENT"), (ii) any approvals required by the Interim Order and the Final
Order, (iii) filings with the Director under the CBCA, and filings under the
INVESTMENT CANADA ACT (Canada), as amended, the COMPETITION ACT (Canada), as
amended, and the HART-SCOTT-RODINO ANTI-TRUST IMPROVEMENTS ACT OF 1976, as
amended, and (iv) such other consents, approvals, orders, authorizations,
registrations, declarations and filings as are set forth in (S)(d) of the
Disclosure Statement. Each of Franco-Nevada and its Subsidiaries possesses
all certificates, franchises, licenses, permits, grants, easements,
covenants, certificates, orders, authorizations and approvals issued to or
granted by Agencies or other third parties (collectively, "PERMITS"),
including pursuant to any Environmental Law, necessary to own, lease and/or
operate its properties and to conduct its business as such business is
currently conducted or is
64
expected to be conducted following completion of the Transaction. Except as
set forth in (S)(d) of the Disclosure Statement, (i) all such Permits are
validly held by Franco-Nevada or its Subsidiaries, and Franco-Nevada and its
Subsidiaries have complied in all respects with all terms and conditions
thereof, (ii) none of such Permits will be subject to suspension,
modification, revocation or non-renewal as a result of the execution and
delivery of this agreement or the consummation of the Transactions, and
(iii) since March 31, 2001, neither Franco-Nevada nor any of its
Subsidiaries has received any written notice, notice of violation or
probable violation, notice of revocation, or other written communication
from or on behalf of any Agency, alleging (A) any violation of such Permit,
or (B) that Franco-Nevada or any of its Subsidiaries requires any Permit
required for its business as such business is currently conducted, that is
not currently held by it.
(e) PUBLICLY FILED DOCUMENTS; UNDISCLOSED LIABILITIES. Franco-Nevada has
filed all required reports, schedules, forms, statements and other documents
(including documents incorporated by reference) with the applicable security
regulatory Agencies since March 31, 1998 (the "PUBLIC DISCLOSURE
DOCUMENTS"). As of its date, each Public Disclosure Document complied in all
material respects with the requirements of all applicable securities Laws.
None of the Public Disclosure Documents, as of their respective dates,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading, except to the extent that such statements have been
modified or superseded by a later-filed Public Disclosure Document. The
consolidated financial statements of Franco-Nevada included in the Public
Disclosure Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations
of the applicable securities regulatory Agencies with respect thereto, have
been prepared in accordance with GAAP applied on a consistent basis during
the periods involved (except as may be indicated in the notes thereto) and
fairly present the consolidated financial position of Franco-Nevada as of
the dates thereof and the consolidated results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments). Except (i) as and to the
extent disclosed, reflected or reserved against on the balance sheet or the
notes thereto of Franco-Nevada as of March 31, 2001 included in the Filed
Franco-Nevada Public Disclosure Documents, (ii) as incurred after the date
thereof in the ordinary course of business consistent with past practice and
not prohibited by this agreement, or (iii) as set forth in (S)(e) of the
Disclosure Statement, Franco-Nevada does not have any liabilities or
obligations of any nature, whether known or unknown, absolute, accrued,
contingent or otherwise and whether due or to become due, that, individually
or in the aggregate, have had or would reasonably be expected to have a
Materially Adverse effect on Franco-Nevada and its Subsidiaries, taken as a
whole. Except as set forth in (S)(e) of the Disclosure Statement, none of
Franco-Nevada or its Subsidiaries is subject to the informational reporting
requirements of, or required to file any form or other document with, any
securities regulatory Agency (including any stock exchange).
(f) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Franco-Nevada or its Subsidiaries for inclusion or incorporation
by reference in the Proxy Statement or any other filings relating to the
Transactions made by Newmont pursuant to the Securities Act, the Securities
Exchange Act or Australian Law (collectively, the "NEWMONT FILINGS") will,
at the date the Proxy Statement is first mailed to Franco-Nevada
Shareholders or the Newmont Filing is filed, as the case may be, or at the
time of the Franco-Nevada Special Meeting, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
circumstances under which they are made, not misleading. The Proxy Statement
and Newmont Filings will comply as to form in all material respects with the
requirements of applicable securities Laws, except that no representation or
warranty is made by Franco-Nevada with respect to statements made or
incorporated by reference therein based on information supplied by Newmont
for inclusion or incorporation by reference in the Proxy Statement or the
Newmont Filings.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Public Disclosure Documents filed and publicly available prior to the date
of this agreement (the "FILED FRANCO-NEVADA
65
PUBLIC DISCLOSURE DOCUMENTS"), since March 31, 2001, Franco-Nevada has
conducted, and caused each of its Subsidiaries to conduct, its business only
in the ordinary course and:
(i) there has not been any event, change, effect or development
(including any decision to implement such a change made by the board of
directors of Franco-Nevada or any of its Subsidiaries in respect of
which senior management believes that confirmation of the board of
directors is probable), which, individually or in the aggregate, has
had, or would reasonably be expected to have, a Materially Adverse
effect on Franco-Nevada and its Subsidiaries, taken as a whole;
(ii) there has not been, except for regular annual dividends not in
excess of Cdn$0.45 per Franco-Nevada Share, with customary record and
payment dates, any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect
to any Franco-Nevada Shares;
(iii) there has not been, except as provided for in this agreement,
any split, combination or reclassification of any Authorized Capital of
Franco-Nevada or any issuance or the authorization of any issuance of
any other securities in exchange or in substitution for shares of
Authorized Capital of Franco-Nevada;
(iv) there has not been, except as disclosed in (S)(g) of the
Disclosure Statement, (A) any granting by Franco-Nevada or any of its
Subsidiaries to any officer of Franco-Nevada or any of its Subsidiaries
of any increase in or acceleration of compensation, except as was
required under employment agreements in effect as of the date of the
most recent audited financial statements included in the Filed
Franco-Nevada Public Disclosure Documents, (B) any granting by
Franco-Nevada or any of its Subsidiaries to any such officer of any
increase in severance or termination pay, except as was required under
any employment, severance or termination agreements in effect as of the
date of the most recent audited financial statements included in the
Filed Franco-Nevada Public Disclosure Documents, or (C) any entry by
Franco-Nevada or any of its Subsidiaries into any employment, severance
of termination agreement with any such officer;
(v) there has not been any change in accounting methods, principles
or practices by Franco-Nevada or any of its Subsidiaries materially
affecting its assets, liabilities or business, except insofar as may
have been required by a change in GAAP or as set forth in (S)(g) of the
Disclosure Statement;
(vi) neither Franco-Nevada nor any of its Subsidiaries has engaged in
any action which, if done after the date of this agreement, would
violate (S)(g) of this agreement, except as set forth in (S)(g) of the
Disclosure Statement; and
(vii) no liability or obligation of any nature (whether absolute,
accrued, contingent or otherwise) that is Materially Adverse to
Franco-Nevada and its Subsidiaries, taken as a whole, has been incurred
other than in the ordinary course of business consistent with past
practice, except as set forth in (S)(g) of the Disclosure Statement.
(h) DISCLOSURE. Franco-Nevada has not failed to disclose to Newmont in
writing any information known to Franco-Nevada regarding any event,
circumstance or action taken or failed to be taken that is Materially
Adverse to Franco-Nevada and its Subsidiaries, taken as a whole. Without
limiting the generality of the foregoing:
(i) there are no severance and employment agreements with respect to
current or former employees of Franco-Nevada or any of its Subsidiaries
or any bonus or incentive arrangements with respect to such employees
that may require payments as a result of the Transactions;
(ii) except as disclosed in the financial statements contained in the
Filed Franco-Nevada Public Disclosure Documents, Franco-Nevada and its
Subsidiaries do not have liabilities or obligations in excess of the
liabilities or obligations reflected or reserved against in those
financial statements that, either individually or in the aggregate, are
Materially Adverse to Franco-Nevada and its Subsidiaries, taken as a
whole;
66
(iii) none of Franco-Nevada or any of its Subsidiaries or any of
their properties is the subject to a judgement, order or decree that is
Materially Adverse to Franco-Nevada and its Subsidiaries, taken as a
whole; and
(iv) the data or information made available to Newmont in respect of
Franco-Nevada and its Subsidiaries, was complete and, to the knowledge
of Franco-Nevada, correct in all material respects and, did not, at the
time it was made available and for the period of and matter to which it
relates, and to the knowledge of Franco-Nevada, contain any untrue
statement of material fact or omit to state a material fact necessary in
order to make the statements contained therein not misleading in the
circumstances.
(i) COMPLIANCE. Except for any conflicts, defaults or violations that
could not, individually or in the aggregate (taking into account the impact
of any cross-defaults), reasonably be expected to result in a Materially
Adverse effect on Franco-Nevada and its Subsidiaries, taken as a whole, each
of Franco-Nevada and its Subsidiaries has complied with, and is not in
conflict with, or in default (including cross defaults) under or in
violation of:
(i) its articles or other organizational documents or by-laws;
(ii) any Law or Permit applicable to it, its business or operations
or by which any of its properties or assets is bound or affected; or
(iii) any agreement, arrangement or understanding to which it, its
business or operations or by which any of its properties or assets is
bound or affected.
As of the Effective Date, each of Franco-Nevada and its Subsidiaries has or
will have complied with each of its covenants and obligations under this
agreement.
(j) RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement,
judgement, injunction, order or decree binding upon Franco-Nevada or any of
its Subsidiaries that has, or could reasonably be expected to have, the
effect of prohibiting, restricting or impairing any business practice of
Franco-Nevada or any of its Subsidiaries, any acquisition of property by
Franco-Nevada or any of its Subsidiaries or the conduct of business by any
of them as currently conducted (including following the Arrangement) other
than such agreements, judgements, injunctions, orders or decrees which are
not, individually or in the aggregate, Materially Adverse to Franco-Nevada
and its Subsidiaries, taken as a whole.
(k) CONTRACTS. (S)(k) of the Disclosure Statement lists all Contracts to
which Franco-Nevada or any of its Subsidiaries is a party and which fall
within any of the following categories: (a) Contracts not entered into in
the ordinary course of Franco-Nevada's business; (b) joint venture,
partnership and similar agreements; (c) Contracts containing covenants
purporting to limit the freedom of Franco-Nevada or any of its Subsidiaries
to compete in any line of business in any geographic area, to hire any
individual or group of individuals or to acquire any business, entity or the
assets thereof; (d) Contracts which after the Effective Time of the
Transactions would have the effect of limiting the freedom of Newmont or its
Subsidiaries (other than Franco-Nevada and its Subsidiaries) to compete in
any line of business in any geographic area, to hire any individual or group
of individuals or to acquire any business, entity or the assets thereof; (e)
Contracts which contain minimum purchase conditions or requirements or other
terms that restrict or limit the purchasing relationships of Franco-Nevada
of any of its Subsidiaries other than in the ordinary course of business;
(f) Contracts relating to any outstanding commitment for capital
expenditures in excess of $5 million in the aggregate; (g) Contracts
involving annual revenues or expenditures to the business of Franco-Nevada
or any of its Subsidiaries in excess of 7.5% of Franco-Nevada's annual
revenues; and (h) Contracts containing any rights on the part of any party,
including joint venture partners or entities, to acquire mining or other
property rights from Franco-Nevada or any of the Subsidiaries. All Contracts
are valid and binding obligations of Franco-Nevada or any of its
Subsidiaries and, to the knowledge of Franco-Nevada, the valid and binding
obligation of each other party thereto except for such Contracts which if
not so valid and binding would not, individually or in the aggregate, have a
Materially Adverse effect on Franco-Nevada and
67
its Subsidiaries, taken as a whole. Neither Franco-Nevada nor, to the
knowledge of Franco-Nevada, any other party thereto is in violation of or in
default in respect of, nor has there occurred an event or condition which
with the passage of time or giving of notice (or both) would constitute a
default under or entitle any party to terminate, accelerate, modify or call
a default under, or trigger any pre-emptive rights or rights of first
refusal under, any such Contract except such violations or defaults under
such Contracts, which, individually or in the aggregate, would not have a
Materially Adverse effect on Franco-Nevada and its Subsidiaries, taken as a
whole. No approval or consent of any person is needed in order that such
Contracts continue in full force and effect following the consummation of
the Transactions.
(l) TAX MATTERS.
(i) Franco-Nevada and each of its subsidiaries have timely filed, or
caused to be timely filed, all Tax Returns required to be filed by them,
and have timely paid, or caused to be timely paid, all material amounts
of Taxes due and payable by them, except for any such failure to file or
failure to pay which would not individually or in the aggregate, have a
Materially Adverse effect on Franco-Nevada. All such Tax Returns are
true, correct and complete in all material respects. To the best of
Franco-Nevada's knowledge, no such Tax Return contains any misstatement
or omits any statement that should have been included therein. No Tax
Return has been amended.
(ii) Reserves and provisions for Taxes accrued but not yet due on or
before the Effective Date as reflected in Franco-Nevada's Financial
Statements are adequate as of the date of Franco-Nevada's Financial
Statements, in accordance with GAAP. No deficiencies for Taxes have been
proposed, asserted or assessed against Franco-Nevada that are not
adequately reserved against.
(iii) Neither Franco-Nevada nor any of its subsidiaries has received
any written notification that any issues involving a material amount of
Taxes have been raised (and are currently pending) by the CCRA, the
United States Internal Revenue Service or any other taxing authority,
including, without limitation, any sales tax authority, in connection
with any of the Tax Returns filed or required to be filed, which would,
individually or in the aggregate, have a Materially Adverse effect on
Franco-Nevada. Neither Franco-Nevada nor any of its subsidiaries has
taken any action, or failed to take any action, or has knowledge of any
fact, agreement, plan or other circumstance that is reasonably likely to
prevent the Arrangement and the Transactions from constituting a
transaction described in Section 351 of the Code.
(iv) No unresolved assessments, reassessments, audits, claims,
actions, suits, proceedings, or investigations exist or have been
initiated with regard to any Taxes or Tax Returns of Franco-Nevada or
its subsidiaries. To the knowledge of Franco-Nevada, no assessment,
reassessment, audit or investigation by any Agency is underway,
threatened or imminent with respect to Taxes for which Franco-Nevada or
any of its subsidiaries may be liable, in whole or in part.
(v) Other than an application to the Internal Revenue Service for an
extension to file corporate income tax returns otherwise due December
15, 2001 (in respect of taxation years ended March 30, 2001), no
election, consent for extension, nor any waiver that extends any
applicable statute of limitations relating to the determination of a Tax
liability of Franco-Nevada or any of its subsidiaries has been filed or
entered into and is still effective.
(vi) Franco-Nevada and each of its subsidiaries have properly
withheld and remitted all amounts required to be withheld and/or
remitted (including income tax, non-resident withholding tax, Canada
Pension Plan contributions, Employment Insurance and Worker's
Compensation premiums) and have paid such amounts due to the appropriate
authority on a timely basis and in the form required under the
appropriate legislation.
(vii) The Franco-Nevada Shares do not constitute "foreign property"
for the purposes of the ITA.
(viii) The paid-up capital of the Franco-Nevada Shares is at least
Cdn$1 billion.
68
(ix) "TAX" and "TAXES" means, with respect to any entity, all income
taxes (including any tax on or based upon net income, gross income,
income as specially defined, earnings profits or selected items of
income, earnings or profits) and all capital taxes, gross receipts
taxes, environmental taxes, sales taxes, use taxes, ad valorem taxes,
value added taxes, transfer taxes, franchise taxes, license taxes,
withholding taxes or other withholding obligations, payroll taxes,
employment taxes, Canada or Quebec Pension Plan premiums, excise,
severance, social security premiums, workers' compensation premiums,
unemployment insurance or compensation premiums, stamp taxes, occupation
taxes, premium taxes, property taxes, windfall profits taxes,
alternative or add-on minimum taxes, goods and services tax, customs
duties or other taxes of any kind whatsoever, together with any interest
and any penalties or additional amounts imposed by any taxing authority
(domestic or foreign) on such entity or for which such entity is
responsible, and any interest, penalties, additional taxes, additions to
tax or other amounts imposed with respect to the foregoing. "TAX
RETURNS" means returns, reports and forms (including schedules thereto)
required to be filed with any Agency of Canada or the United States or
any provincial, state or local Agency therein or any other jurisdiction
responsible for the imposition or collection of Taxes.
(x) For purposes of this Section (l), the term "MATERIAL AMOUNT OF
TAXES" shall mean an amount of Taxes that is material to Franco-Nevada
and its subsidiaries taken as a whole.
(m) TITLE AND ENVIRONMENTAL MATTERS.
(i) With respect to all Company Properties that are owned by
Franco-Nevada or any of its Subsidiaries in fee simple (collectively,
the "FRANCO-NEVADA OWNED PROPERTIES"), Franco-Nevada and its
Subsidiaries are in exclusive possession thereof and have good,
sufficient and marketable title to the real property interests,
including fee simple estate of and in real property, leases, easements,
rights of way, permits or licences from land owners or authorities
permitting the use of land by it necessary to permit the operation of
its business as presently owned and conducted, except for failures of
title that would individually or in the aggregate not be Materially
Adverse to Franco-Nevada and its Subsidiaries, taken as a whole. The
term "COMPANY PROPERTIES" means all real property owned, leased or
controlled by Franco-Nevada or any of its Subsidiaries.
(ii) With respect to any Company Properties: (i) Franco-Nevada,
together with its Subsidiaries, is in exclusive possession of such
properties, subject to the paramount title of the United States with
respect to unpatented mining claims in the U.S.; (ii) Franco-Nevada,
together with its Subsidiaries, has not received any notice of default
of any of the terms or provisions of such leases or other contracts;
(iii) the execution, delivery and performance of this agreement by
Franco-Nevada, and the consummation of the Transactions will not cause a
default or termination, or give rise to the right of termination, or
rights of first refusal or other pre-emptive rights under any such
leases or contracts; (iv) such leases and other contracts are valid and
are in good standing; (v) Franco-Nevada has no knowledge of any act or
omission or any condition on such properties which could be considered
or construed as a default under any such lease or other contract; (vi)
none of Franco-Nevada and its Subsidiaries is a party to, or under any
agreement to become a party to, any lease with respect to real property,
which, if terminated, could reasonably be expected to be Materially
Adverse to Franco-Nevada and its Subsidiaries, taken as a whole; and
(vii) such property covered thereby is free and clear of all Liens or
material defects in title except the paramount title of the United
States with respect to unpatented mining claims in the U.S.
(iii) Franco-Nevada has delivered to or made available for inspection
by Newmont all Existing Data in its possession or control, and true and
correct copies of all material leases or other contracts relating to any
real property owned, leased or used by Franco-Nevada or any of its
Subsidiaries or in which Franco-Nevada or any of its Subsidiaries
otherwise has an interest.
(iv) With respect to unpatented mining claims and millsites, and any
other exploration or mining concessions or like interest granted by any
Agency, located by Franco-Nevada or any of its Subsidiaries that are
included within any real property owned, leased or used by Franco-Nevada
or any
69
of its Subsidiaries or in which Franco-Nevada or any of its Subsidiaries
otherwise has an interest subject to the paramount title of Canada, the
United States or any other applicable Agency, and subject to the
paramount title of the United States with respect to unpatented mining
claims in the U.S.:
i. Franco-Nevada has valid title, and has maintained valid title,
to such unpatented mining claims and millsites and any other
exploration or mining concessions or like interest granted by any
Agency;
ii. the claims are free and clear of Liens or defects in title; and
iii. Franco-Nevada has no knowledge of conflicting mining claims
that would constitute a material defect in Franco-Nevada's title to
any of its mining claims that contains known valuable minerals.
(v) With respect to any real property owned, leased or used by
Franco-Nevada or any of its Subsidiaries or in which Franco-Nevada or
any of its Subsidiaries otherwise has an interest there are no pending
or, to Franco-Nevada's knowledge, threatened suits, claims, actions,
proceedings or investigations.
(vi) Except as to matters otherwise specifically disclosed in (S)(m)
of the Disclosure Statement, Franco-Nevada has not received inquiry from
or notice of a pending investigation from any Agency or of any
administrative or judicial proceeding concerning the violation of any
applicable Laws or any Environmental Liabilities.
(vii) Franco-Nevada has furnished or made available to Newmont,
copies of all third party and internal environmental or other reports
prepared by or for Franco-Nevada or any of its Subsidiaries with respect
to any real property owned, leased or used by Franco-Nevada or any of
its Subsidiaries or in which Franco-Nevada or any of its Subsidiaries
otherwise has an interest.
(viii) As used in this agreement, the following terms shall have the
meanings specified:
"ENVIRONMENTAL LAWS" means applicable Laws aimed at reclamation or
restoration of the real properties owned, leased or used by
Franco-Nevada or any of its Subsidiaries in which Franco-Nevada or
any of its Subsidiaries otherwise has an interest, abatement of
pollution; protection of the environment; protection of wildlife,
including endangered species; ensuring public safety from
environmental hazards; protection of cultural or historic resources;
management, storage or control of hazardous materials and substances;
releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances as wastes into
the environment, including ambient air, surface water and
groundwater; and all other applicable Laws relating to the
manufacturing, processing, distribution, use, treatment, storage,
disposal, handling or transport of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes.
"ENVIRONMENTAL LIABILITIES" means any and all claims, actions,
causes of action, damages, losses, liabilities, obligations,
penalties, judgements, amounts paid in settlement, assessments,
costs, disbursements, or expenses (including attorney's fees and
costs, experts' fees and costs, and consultants' fees and costs) of
any kind or of any nature whatsoever that are asserted by any person
or entity (including any Agency) other than Franco-Nevada, alleging
liability (including liability for studies, testing or investigatory
costs, cleanup costs, response costs, removal costs, remediation
costs, containment costs, restoration costs, corrective action costs,
closure costs, reclamation costs, natural resource damages, property
damages, business losses, personal injuries, penalties or fines)
arising out of, based on or resulting from (i) the presence, release,
threatened release, discharge or emission into the environment of any
hazardous materials or substances existing or arising on, beneath or
above the real properties owned, leased or used by Franco-Nevada or
any of its Subsidiaries or in which Franco-Nevada or any of its
Subsidiaries otherwise has an interest and/or emanating or migrating
and/or threatening to emanate or migrate from such
70
properties to off-site properties, (ii) physical disturbance of the
environment, or (iii) the violation or alleged violation or any
Environmental Laws.
"EXISTING DATA" means maps, drill logs and other drilling data,
core tests, pulps, reports, surveys, assays, analyses, production
reports, operations, technical, accounting and financial records, and
other material information developed in operations on the real
properties owned, leased or used by Franco-Nevada or any of its
Subsidiaries or in which Franco-Nevada or any of its Subsidiaries
otherwise has or had an interest prior to the date of this agreement.
(n) INTELLECTUAL PROPERTY. Franco-Nevada and its Subsidiaries own all
right, title and interest in, or possesses the lawful right to use or has a
currently pending application for all patents, patent applications,
registered and common law trademarks (including applications therefor),
service marks, trade names, copyright applications, copyrights, trade
secrets, know-how, computer software, production technology, proprietary
technology and other intellectual property and proprietary rights used in or
necessary to conduct the business. Additionally:
(i) Franco-Nevada is not aware of any infringement of any such
intellectual property by any third party; and
(ii) the conduct of the business of Franco-Nevada and its
Subsidiaries has not, and will not, cause Franco-Nevada or any of its
Subsidiaries to infringe or violate any of the patents, trademarks,
service marks, trade names, copyrights, trade secrets, proprietary
rights, computer software rights or licences or other intellectual
property of any other person and neither Franco-Nevada nor any of its
Subsidiaries has received any written or oral claim or notice of
infringement or potential infringement of the intellectual property of
any other person arising out of the conduct of Franco-Nevada and its
Subsidiaries and, in particular Franco-Nevada or the applicable
Subsidiary has complied with any licence respecting intellectual
property held by Franco-Nevada and its Subsidiaries.
(o) EMPLOYMENT MATTERS.
(i) Except as to matters otherwise specifically disclosed in (S)(o)
of the Disclosure Statement, none of Franco-Nevada or its Subsidiaries
is a party to any agreement, obligation or understanding providing for
severance or termination payments to, or any employment agreement with,
any director, consultant, employee or officer, other than any common law
obligations of reasonable notice of termination or pay in lieu thereof
and any statutory obligations.
(ii) None of Franco-Nevada or any of its Subsidiaries had or has any
labour contracts, collective bargaining agreements or employment or
consulting agreements with any persons employed by Franco-Nevada or any
persons otherwise performing services primarily for Franco-Nevada or any
of its Subsidiaries (the "BUSINESS PERSONNEL"). Neither Franco-Nevada
nor any of its Subsidiaries has engaged in any unfair labour practice
with respect to the Business Personnel since March 31, 1999 and there is
no unfair labour practice complaint pending or, to the knowledge of
Franco-Nevada, threatened, against Franco-Nevada or any of its
Subsidiaries with respect to the Business Personnel. There is no labour
strike, dispute, slowdown or stoppage pending or, to the knowledge of
Franco-Nevada, threatened against Franco-Nevada or any of its
Subsidiaries, and neither Franco-Nevada nor any of its Subsidiaries has
experienced any labour strike, dispute, slowdown or stoppage or other
labour difficulty involving the Business Personnel since March 31, 1999.
(iii) None of Franco-Nevada or its Subsidiaries is subject to any
litigation, actual or, to the knowledge of Franco-Nevada, threatened,
relating to employment or termination of employment of employees or
independent contractors, other than those claims or litigation as would,
individually or in the aggregate, not be Materially Adverse to
Franco-Nevada and its Subsidiaries, taken as a whole.
(iv) Franco-Nevada and each of its Subsidiaries has operated in
accordance with all applicable Laws with respect to employment and
labour, including employment and labour standards, occupational health
and safety, employment equity, pay equity, workers' compensation, human
rights
71
and labour relations and there are no current, pending or, to the
knowledge of Franco-Nevada, threatened proceedings before any Agency
with respect to any of the above.
(p) PENSION AND EMPLOYEE BENEFITS.
(i) (S)(p) of the Disclosure Statement includes a complete list of
all employee benefit, health, welfare, supplemental unemployment
benefit, bonus, pension, profit sharing, deferred compensation, stock
option, stock compensation, stock purchase, retirement, hospitalization
insurance, medical, dental, legal, disability and similar plans or
arrangements or practices, whether written or oral, which are maintained
by Franco-Nevada or any of its Subsidiaries, including all Employee
Benefit Plans and Material Employment Agreements (collectively, the
"FRANCO-NEVADA PLANS").
(ii) To Franco-Nevada's knowledge, no step has been taken, no event
has occurred and no condition or circumstance exists that has resulted,
or could reasonably be expected to result, in any Franco-Nevada Plan
being ordered or required to be terminated or wound up in whole or in
part or having its registration under applicable Laws refused or
revoked, or being placed under the administration of any trustee or
receiver or Agency or being required to pay any material Taxes,
penalties or levies under applicable Laws. To Franco-Nevada's knowledge,
there are no actions, suits, claims (other than routine claims for
payment of benefits in the ordinary course), trials, demands,
investigations, arbitrations or other proceedings which are pending or
threatened in respect of any of the Franco-Nevada Plans or their assets
which, individually or in the aggregate, are Materially Adverse to
Franco-Nevada and its Subsidiaries, taken as a whole.
(iii) All of the Franco-Nevada Plans are in compliance in all
material respects with all applicable Laws and their terms, and all of
the Franco-Nevada Plans are fully insured or fully funded on a projected
benefit obligation basis.
(iv) None of the Franco-Nevada Plans is a Multiemployer Plan nor has
Franco-Nevada or any of its Subsidiaries been obligated to contribute to
any Multiemployer Plan at any time within the past five years.
(v) Without limiting the generality of the foregoing with respect to
each Franco-Nevada Plan:
(A) Franco-Nevada has delivered or made available to Newmont a
true, correct and complete copy of: (i) each writing constituting a
part of such Plan, including all plan documents, employee
communications, benefit schedules, trust agreements, and insurance
contracts and other funding vehicles; (ii) the most recent Annual
Report (Form 5500 Series) and accompanying schedule, if any, (iii)
the current summary plan description and any material modifications
thereto, if any (in each case, whether or not required to be
furnished under ERISA); (iv) the most recent annual financial report,
if any; (v) the most recent actuarial report, if applicable; and (vi)
the most recent determination letter from the Internal Revenue
Service, if any. Franco-Nevada has delivered or made available to
Newmont a true, complete and correct copy of each Material Employment
Agreement. Except as specifically provided in the foregoing documents
delivered or made available to Newmont, there are no amendments to
any Plan or Material Employment Agreement that have been adopted or
approved nor has Franco-Nevada or any of its Subsidiaries undertaken
to make any such amendments or to adopt or approve any new Plan or
Material Employment Agreement.
(B) (S)(p) of the Disclosure Statement identifies each Plan that
is intended to be a "qualified plan" within the meaning of (S)401(a)
of the Code ("QUALIFIED PLANS"). The Internal Revenue Service has
issued a favorable determination letter with respect to each
Qualified Plan and the related trust that has not been revoked, and
there are no circumstances and no events have occurred that could
adversely affect the qualified status of any Qualified Plan or the
related trust. (S)(p) of the Disclosure Statement identifies each
Plan which is intended to meet the requirements of (S)501(c)(9) of
the Code, and each such plan meets such requirements and provides no
disqualified benefits (as such term is defined in Code (S)4976(b)).
72
(C) (S)(p) of the Disclosure Statement sets forth a list of all
Employee Benefit Plans or Employment Agreements under which the
execution and delivery of this agreement, shareholders approval of
the Transactions or the consummation of the Transactions could
(either alone or in conjunction with any other event) (i) result in,
cause the accelerated vesting, funding or delivery of, or increase
the amount of value of, any payment or benefit to any employee,
consultant, officer or director of Franco-Nevada or any of its
Subsidiaries, or could limit the right of Franco-Nevada or any of its
Subsidiaries to amend, merge, terminate or receive a reversion of
assets from any Employee Benefit Plan or related trust or any
Material Employment Agreement or related trust, or (ii) result in an
"excess parachute payments" within the meaning of (S)280G of the Code.
(D) There are no pending or threatened claims (other than claims
for benefits in the ordinary course), lawsuits or arbitrations which
have been asserted or instituted, and to Franco-Nevada's knowledge,
no set of circumstances exists which may reasonably give rise to a
claim or lawsuit, against the Plans, any fiduciaries thereof with
respect to their duties to the Plans or the assets of any of the
trusts under any of the Plans which could reasonably be expected to
result in any material liability of Franco-Nevada or any of its
Subsidiaries to the PBGC, the Department of Treasury, the Department
of Labor, any Multiemployer Plan, any Plan or any participant in a
Plan.
(E) Franco-Nevada, its Subsidiaries and each member of their
respective business enterprises has complied with the WORKER
ADJUSTMENT AND RETRAINING NOTIFICATION ACT and all similar state,
local and foreign Laws, so as not to incur any liabilities thereunder.
(F) All Employee Benefit Plans subject to the Laws of any
jurisdiction outside of the United States (i) have been maintained in
accordance with all applicable requirements, (ii) if they are
intended to qualify for special Tax treatment, meet all requirements
for such treatment, and (iii) if they are intended to be funded
and/or book-reserved, are fully funded and/or book-reserved on a
projected obligation basis, as appropriate, based upon reasonable
actuarial assumptions.
(G) Each individual who renders services to Franco-Nevada or any
of its Subsidiaries who is classified by Franco-Nevada or such
Subsidiary, as applicable, as having the status of an independent
contractor or other non-employee status for any purpose (including
for purposes of taxation and Tax reporting and under Employee Benefit
Plans) is properly so characterized.
(H) On or before the date hereof, Franco-Nevada has caused each
grantor trust providing for funding of amounts payable pursuant to
any Plans and/or Employment Agreements to be amended to ensure that
no amounts are required to be contributed thereto as a result of the
execution and delivery of this agreement, the announcement hereof,
and/or the announcement or consummation of the Transactions, and to
ensure that such trusts are at all times revocable, in whole or in
part, without the consent of the trustees or beneficiaries thereof or
any third party.
(q) BOOKS AND RECORDS. The financial books, records and accounts of
Franco-Nevada and its Subsidiaries in all material respects, (i) have been
maintained in accordance with Canadian generally accepted accounting
principles on a basis consistent with prior years, (ii) are stated in
reasonable detail and accurately and fairly reflect the transactions and
dispositions of the assets of Franco-Nevada and its Subsidiaries and (iii)
accurately and fairly reflect the basis for Franco-Nevada consolidated
financial statements. The corporate minute books of Franco-Nevada and its
Subsidiaries contain minutes of all meetings and resolutions of the
directors and shareholders held, and full access thereto has been provided
to Newmont.
(r) INSURANCE. Franco-Nevada has made available to Newmont true, correct
and complete copies of all material policies of insurance to which each of
Franco-Nevada and its Subsidiaries are a party or are a beneficiary or named
insured. Franco-Nevada and its Subsidiaries maintain insurance coverage with
reputable insurers in such amounts and covering such risks as are in
accordance with normal industry practice for companies engaged in businesses
similar to that of Franco-Nevada and its Subsidiaries.
73
(s) NEWMONT REPRESENTATIONS. Franco-Nevada has no knowledge that any
representation and warranty of Newmont set forth in this agreement is not
true and correct in all material respects, or is untrue in a manner that is
Materially Adverse to Newmont and its Subsidiaries, taken as a whole, on and
as of the date of this agreement.
(t) LITIGATION. Except as specifically disclosed in (S)(t) of the
Disclosure Statement, there is no suit, action or proceeding pending or, to
the knowledge of Franco-Nevada, threatened against Franco-Nevada or any of
its Subsidiaries that, individually or in the aggregate, if adversely
determined, would reasonably be expected to have a Materially Adverse effect
on Franco-Nevada and its Subsidiaries, taken as a whole, and there is not
any judgement, decree, injunction, rule or order of any Agency or arbitrator
outstanding against Franco-Nevada or any of its Subsidiaries having, or
which would reasonably be expected to have, any Materially Adverse effect on
Franco-Nevada and its Subsidiaries, taken as a whole. As of the date of this
agreement, except as specifically disclosed in (S)(t) of the Disclosure
Statement, there is no suit, action, proceeding pending or, to the knowledge
of Franco-Nevada, threatened, against Franco-Nevada or any of its
Subsidiaries that, individually or in the aggregate, if adversely
determined, would reasonably be expected to prevent or delay in any material
respect the consummation of the Transactions.
(u) DETERMINATION BY THE BOARD AND VOTING REQUIREMENTS. The board of
directors of Franco-Nevada (after receiving financial advice including the
Fairness Opinion, legal advice and after considering other factors), by the
unanimous vote of its outside directors, has determined and resolved at its
meeting held on November 12, 2001:
(i) that the entering into of this agreement, the performance by
Franco-Nevada of its obligations hereunder and the Transactions are in
the best interests of Franco-Nevada and its shareholders;
(ii) the Arrangement is fair to Franco-Nevada Shareholders;
(iii) to approve the Transactions and this agreement;
(iv) to extend the Separation Time (as defined therein), including
providing the Rights Agent (as defined in the Franco-Nevada Rights
Agreement) with notice in writing of such extension, under the
Franco-Nevada Rights Agreement until after the vote by the Franco-Nevada
Shareholders on the Arrangement at the Franco-Nevada Special Meeting;
(v) to recommend that Franco-Nevada Shareholders approve the
Arrangement; and
(vi) to recommend that Franco-Nevada Shareholders waive the
Franco-Nevada Rights Agreement so that neither the entering into nor
delivery of this agreement, the Arrangement or the other agreements
contemplated hereby nor the consummation of all or any part of the
Transactions shall constitute a Flip-in Event (as defined in the
Franco-Nevada Rights Agreement).
To the knowledge of Franco-Nevada, after consultation with outside legal
counsel, no provincial or state take-over statute or similar statute or
regulation (including Rule 61-501 of the Ontario Securities Commission)
applies or purports to apply to this agreement or any of the Transactions.
The approval and adoption of this agreement by the affirmative vote of 66
2/3% of the votes, attaching to the Franco-Nevada Shares, cast at the
Franco-Nevada Special Meeting (the "SHAREHOLDER APPROVAL") is the only vote
of the holders of any class or series of Authorized Capital of Franco-Nevada
necessary to approve this agreement and the Transactions. For purposes of
the Shareholder Approval, each outstanding Franco-Nevada Share is entitled
to one vote.
(v) BROKERS; SCHEDULE OF FEES AND EXPENSES. Except as set forth in (S)(v)
of the Disclosure Statement, no broker, investment banker, financial advisor
or other person is entitled to any broker's, finder's, financial advisor's
or other similar fee or commission in connection with the Transactions based
upon arrangements made by or on behalf of Franco-Nevada. Franco-Nevada has
made available to Newmont true and complete copies of all agreements that
are referred to in (S)(v) of the Disclosure Statement and all
indemnification and other agreements related to the engagement of the
persons so listed.
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(w) OPINION OF FINANCIAL ADVISOR. Franco-Nevada has received the opinion
of the Financial Advisor dated the date of this agreement, to the effect
that, as of such date, the consideration to be received pursuant to the
Transactions by Franco-Nevada Shareholders is fair to the Franco-Nevada
Shareholders from a financial point of view, a copy of which opinion will be
promptly delivered to Newmont.
(x) MSHA, OSHA MATTERS. Franco-Nevada and each of its Subsidiaries is in
compliance with the requirements of each of the FEDERAL MINE SAFETY AND
HEALTH ACT OF 1977, as amended, and the regulations promulgated thereunder,
the OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970, as amended, and the
regulations promulgated thereunder and any similar Laws of any foreign,
state, provincial or local jurisdiction (collectively, the "SAFETY ACTS"),
except for any non-compliance which could not reasonably be expected to
have, individually or in the aggregate, a Materially Adverse effect on
Franco-Nevada and its Subsidiaries, taken as a whole. Neither Franco-Nevada
nor any of its Subsidiaries has received any citation from the Mine Safety
and Health Administration, the Occupational Safety and Health Administration
or any other Agency or any inspector setting forth any respect in which the
facilities or operations of Franco-Nevada and any of its Subsidiaries are
not in compliance with the Safety Acts, or the regulations under such acts
which non-compliance has not been corrected or remedied to the satisfaction
of such Agency or inspector, except in all such cases for any non-compliance
that could not reasonably be expected to have, individually or in the
aggregate, a Materially Adverse effect on Franco-Nevada and its
Subsidiaries, taken as a whole. Since March 31, 2000, Franco-Nevada has had
no citations issued to it under the Safety Acts.
(y) RIGHTS AGREEMENT. Franco-Nevada has taken all necessary action and
executed and delivered all such documents and instruments that are required
to extend the Separation Time (as defined therein), including providing the
Rights Agent (as defined in the Franco-Nevada Rights Agreement) with notice
in writing of such extension, under the Franco-Nevada Rights Agreement until
after the vote by the Franco-Nevada Shareholders on the Arrangement at the
Franco-Nevada Special Meeting.
(z) DISPOSITIONS OF COMPANY PROPERTY. Except as described in the Filed
Franco-Nevada Public Disclosure Documents or in (S)(z) of the Disclosure
Statement, since March 31, 2001 neither Franco-Nevada nor any of its
Subsidiaries has sold or disposed of or ceased to hold or own any personal
property, real property, any interest or rights with respect to real
property (including exploration or production rights), any interest in a
joint venture or other assets of properties of Franco-Nevada or any of its
Subsidiaries ("FRANCO-NEVADA PROPERTY"), other than sales and dispositions
of raw materials, obsolete equipment, mine output and other inventories, and
any interest or rights with respect to real property having an individual
fair market value of less than $5 million in the aggregate, in each case in
the ordinary course of business, consistent with past practice. Except as
set forth in (S)(z) of the Disclosure Statement, no Franco-Nevada Property,
the fair market value of which on the date of this agreement is greater than
$5 million in the aggregate, is subject to any pending sale or disposition
transaction.
(aa) ABSENCE OF REDUCTION IN RESERVES AND MINERALIZED MATERIAL. There has
been no material reduction in the aggregate amount of reserves or in the
aggregate amount of mineralized material of Franco-Nevada and its
Subsidiaries from the amounts set forth in Franco-Nevada's Annual Report for
the fiscal year ended March 31, 2001, except for (i) such reductions in
reserves that have resulted from production in the ordinary course of
business and (ii) such reductions in mineralized material that have resulted
from reclassifications of mineralized material as reserves.
75
SCHEDULE G
REPRESENTATIONS AND WARRANTIES OF NEWMONT
Newmont represents and warrants to Franco-Nevada as follows (and
acknowledges that Franco-Nevada is relying on such representations and
warranties in entering this agreement and completing the Transactions):
(a) ORGANIZATION, STANDING AND CORPORATE POWER. Each of Newmont and each
of its Subsidiaries is a corporation, partnership or other legal entity duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has the requisite power and
authority to own its assets and conduct its business as currently owned and
conducted. Each of Newmont and each of its Subsidiaries is duly qualified or
licensed to do business and is in good standing in each jurisdiction in
which the nature of its business or the ownership or leasing of its
properties makes such qualification or licensing necessary. Newmont has made
available for review to Franco-Nevada complete and correct copies of its
Certificate of Incorporation and the certificates of incorporation or
comparable organization documents of the Subsidiaries of Newmont, in each
case as amended to the date of this agreement. Newmont is not in violation
of any provision of its Certificate of Incorporation or By-Laws, and no
Subsidiary of Newmont is in violation of any provisions of its certificate
of incorporation, by-laws or comparable organizational documents.
(b) NEWMONT SUBSIDIARIES. All the outstanding shares of capital stock of
each Subsidiary of Newmont have been validly issued and are fully paid and
non-assessable.
(c) CAPITALIZATION. The authorized and issued capital of Newmont consists
of 250,000,000 shares of Original Newmont Shares and 5,000,000 shares of
Newmont Preferred Stock. Pursuant to a Certificate of Designations of $3.25
Convertible Preferred Stock, the Board of Directors of Newmont created a
series of 2,300,000 shares of Newmont Convertible Preferred Stock. Pursuant
to a Certificate of Designations of Series A Junior Participating Preferred
Stock, the Board of Directors of Newmont created a series of 500,000 shares
of Newmont Series A Preferred Stock. The shares of Newmont Series A
Preferred Stock are issuable in connection with the Newmont Rights that were
issued pursuant to the Newmont Rights Agreement. At the close of business on
November 9, 2001: (i) 196,087,962 shares of Original Newmont Shares were
outstanding and 2,299,980 shares of Newmont Convertible Preferred Stock were
outstanding, all of which were validly issued, fully paid and nonassessable,
and no shares of Newmont Series A Preferred Stock, or of any other series of
Newmont Preferred Stock, were outstanding; (ii) 176,950 Original Newmont
Shares were held by Newmont in its treasury; (iii) 16,967,453 Original
Newmont Shares were reserved for issuance upon the exercise of outstanding
employee or non-employee director stock options that were granted, in each
case, pursuant to the Newmont's employee stock plans set forth in (S)(c) of
Newmont's disclosure statement; (iv) 398,704 Original Newmont Shares were
reserved for issuance under Newmont's Non-Employee Directors Stock Plan; (v)
874,751 Original Newmont Shares were reserved for issuance under Newmont's
Retirement Savings Plan (401K); (v) 1,150,000 Original Newmont Shares were
issuable upon conversion of the outstanding shares of Newmont Convertible
Preferred Stock; (vi) 508,988 Original Newmont Shares were reserved for
issuance under the 6% Convertible Subordinated Debentures of Newmont; and
(vii) 500,000 shares of Newmont Series A Preferred Stock were reserved for
issuance in connection with the Newmont Rights and none was outstanding.
Except as set forth above, there are no shares of capital stock or other
voting securities of Newmont issued, reserved for issuance or outstanding.
Except as set forth in (S)(c) of Newmont's disclosure statement, there are
not any bonds, debentures, notes or other indebtedness of Newmont having the
right to vote (or convertible into, or exchangeable for, securities having
the right to vote) on any matters on which shareholders of Newmont must
vote. Except as set forth above and except as set forth in (S)(c) of
Newmont's disclosure statement, as of the date of this agreement, there are
not any Options to which Newmont or any of its Subsidiaries is a party or by
which any of them is bound relating to the issued or unissued capital stock
of Newmont or any of its Subsidiaries, or obligating
76
Newmont or any of its Subsidiaries to issue, transfer, grant, sell or pay
for or repurchase any shares of capital stock or other equity interests in,
or securities convertible or exchangeable for any capital stock or other
equity interests in, Newmont or any of its Subsidiaries or obligating
Newmont or any of its Subsidiaries to issue, grant, extend or enter into any
such Options. All shares of Newmont's capital stock that are subject to
issuance as aforesaid, upon issuance on the terms and conditions specified
in the instrument pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and non-assessable. The issuance and
sale of all of the shares of capital stock described in this (S)(c) of
Schedule G have been in compliance with all Laws. Newmont has previously
provided Franco-Nevada with a schedule setting forth the names of, and the
number of shares of each class (including the number of shares issuable upon
exercise of Newmont stock options and the exercise price and vesting
schedule with respect thereto) and the number of options held by, all
holders of Newmont stock options. (S)(c) of Newmont's disclosure statement
sets forth the average exercise price for outstanding Newmont stock options,
other than options into which options of Battle Mountain Gold Company were
converted, for which (S)(c) of Newmont's disclosure statement sets forth the
approximate options outstanding and the option price ranges. Except as set
forth in (S)(c) of its disclosure statement, Newmont has not agreed to
register any securities under any securities Laws or granted registration
rights to any person or entity; copies of all such agreements have
previously been made available to Franco-Nevada. Except as set forth above
and in (S)(c) of Newmont's disclosure statement, as of the date of this
agreement, there are not any outstanding contractual obligations or other
requirements of Newmont or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Newmont or any of its
Subsidiaries, or provide funds to or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Subsidiary of Newmont or
any other person. Without limiting the generality of the foregoing, there
are no stock appreciation rights, phantom equity or similar rights,
agreements, arrangements or commitments based upon the book value, income or
any other attribute of Newmont or any of its Subsidiaries.
(d) AUTHORITY; NON-CONTRAVENTION. Newmont has all requisite corporate
power and corporate authority to enter into this agreement and to consummate
the Transactions and to perform its obligations under this agreement. The
Board of Directors of Newmont has unanimously approved this agreement and
the Transactions. The execution and delivery of this agreement by Newmont
and the consummation by Newmont of the Transactions have been duly
authorized by all necessary corporate action on the part of Newmont. No
other corporate proceedings on the part of Newmont or any of its
Subsidiaries are necessary to authorize this agreement and the Transactions.
This agreement has been duly executed and delivered by Newmont and
constitutes a valid and binding obligation of Newmont, enforceable by
Franco-Nevada against Newmont in accordance with its terms, subject to the
availability of equitable remedies and the enforcement of creditors' rights
generally. The execution and delivery of this agreement does not, and the
consummation of the Transactions and compliance with the provisions of this
agreement will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or give rise to a
right of consent, termination, purchase, cancellation or acceleration of any
obligation or to loss of any property, rights or benefits under, or result
in the imposition of any additional obligation under, or result in the
creation of any Lien upon any of the properties or assets of Newmont or any
of its Subsidiaries under, (i) the Certificate of Incorporation or By-laws
of Newmont or the comparable organization documents of any of its
Subsidiaries; (ii) any Contract to which Newmont or any of its Subsidiaries
is a party or by which any of them or their respective properties or assets
is bound or affected, or (iii) subject to the governmental filings and other
matters referred to in the following sentence, any Law applicable to Newmont
or any of its Subsidiaries or their respective properties or assets. No
consent, approval, order or authorization of, or registration, declaration
or filing with, any Agency, is required by or with respect to Newmont or any
of its Subsidiaries in connection with the execution and delivery of this
agreement by Newmont or the consummation by Newmont of the Transactions,
except for (i) any approvals required by the Interim Order or the Final
Order, and (ii) the approvals listed on Schedule H.
(e) PUBLICLY FILED DOCUMENTS; UNDISCLOSED LIABILITIES. Newmont has filed
all required reports, schedules, forms, statements and other documents
(including documents incorporated by reference) with the applicable security
regulatory Agencies since December 31, 1998 (the "NEWMONT PUBLIC DISCLOSURE
77
DOCUMENTS"). As of its date, each Newmont Public Disclosure Document
complied in all material respects with the requirements of the Securities
Act or the Securities Exchange Act, as applicable, and the rules and
regulations thereunder applicable to such Newmont Public Disclosure
Document. None of the Newmont Public Disclosure Documents, as of their
respective dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading, except to the extent that such
statements have been modified or superseded by a later-filed Newmont Public
Disclosure Document. The consolidated financial statements of Newmont
included in the Newmont Public Disclosure Documents comply as to form in all
material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly
present the consolidated financial position of Newmont as of the dates
thereof and the consolidated results of its operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except (i) as and to the extent
disclosed, reflected or reserved against on the balance sheet or the notes
thereto of Newmont as of December 31, 2000 included in the Filed Newmont
Public Disclosure Documents, (ii) as incurred after the date thereof in the
ordinary course of business consistent with past practice and not prohibited
by this agreement, or (iii) as set forth in (S)(e) of its disclosure
statement, Newmont does not have any liabilities or obligations of any
nature, whether known or unknown, absolute, accrued, contingent or otherwise
and whether due or to become due, that, individually or in the aggregate,
have had or would reasonably be expected to have a Materially Adverse effect
on Newmont and its Subsidiaries, taken as a whole.
(f) INFORMATION SUPPLIED. None of the information supplied or to be
supplied by Newmont or its Subsidiaries for inclusion or incorporation by
reference in the Proxy Statement or any Newmont Filings will, at the date
the Proxy Statement is first mailed to Franco-Nevada Shareholders or the
Newmont Filing is filed, as the case may be, or at the time of the
Franco-Nevada Special Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of circumstances
under which they are made, not misleading. The Newmont Filings will comply
as to form in all material respects with the requirements of applicable
securities Laws, except that no representation or warranty is made by
Newmont with respect to statements made or incorporated by reference therein
based on information supplied by Franco-Nevada or Normandy for inclusion or
incorporation by reference in the Proxy Statement or the Newmont Filings.
(g) ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
Newmont Public Disclosure Documents filed and publicly available prior to
the date of this agreement (the "FILED NEWMONT PUBLIC DISCLOSURE
DOCUMENTS"), since December 31, 2000, Newmont has conducted, and caused each
of its Subsidiaries to conduct, its business only in the ordinary course,
and:
(i) there has not been any event, change, effect or development
(including any decision to implement such a change made by the board of
directors of Newmont or any of its Subsidiaries in respect of which
senior management believes that confirmation of the board of directors
is probable), which, individually or in the aggregate, has had or would
reasonably be expected to have a Materially Adverse effect on Newmont
and its Subsidiaries, taken as a whole;
(ii) there has not been, except for regular annual dividends not in
excess of $0.12 per Newmont Share, with customary record and payment
dates, any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with respect to
any Newmont Shares;
(iii) there has not been, except as provided for in this agreement,
any split, combination or reclassification of any Newmont Shares or any
issuance or the authorization of any issuance of any other securities in
exchange or in substitution for Newmont Shares;
(iv) there has not been any change in accounting methods, principles
or practices by Newmont or any of its Subsidiaries materially affecting
its assets, liabilities or business, except insofar as may have been
required by a change in GAAP;
78
(v) neither Newmont nor any of its Subsidiaries has engaged in any
action which, if done after the date of this agreement, would violate
(S)5.B(a) of this agreement, except as set forth in (S)(g) of Newmont's
disclosure statement.
(h) RESTRICTIONS ON BUSINESS ACTIVITIES. There is no agreement,
judgement, injunction, order or decree binding upon Newmont or any of its
Subsidiaries that has, or could reasonably be expected to have, the effect
of prohibiting, restricting or impairing any business practice of Newmont or
any of its Subsidiaries, any acquisition of property by Newmont or any of
its Subsidiaries or the conduct of business by any of them as currently
conducted (including following the Arrangement) other than such agreements,
judgements, injunctions, orders or decrees which are not, individually or in
the aggregate, Materially Adverse to Newmont and its Subsidiaries, taken as
a whole.
(i) TITLE. To the knowledge of Newmont, Newmont has good, sufficient and
marketable title to its real property interests, except for failures of
title that would individually or in the aggregate not be Materially Adverse
to Newmont and its Subsidiaries, taken as a whole.
(j) INSURANCE. Except as set forth in (S)(j) of its disclosure statement,
Newmont and its Subsidiaries maintain insurance coverage with reputable
insurers in such amounts and covering such risks as are in accordance with
normal industry practice for companies engaged in businesses similar to that
of Newmont and its Subsidiaries.
(k) LITIGATION. Except as disclosed in the Filed Newmont Public
Disclosure Documents and except as set forth in (S)(k) of its disclosure
statement, there is no suit, action or proceeding pending or, to the
knowledge of Newmont, threatened against Newmont or any of its Subsidiaries
that, individually or in the aggregate, would reasonably be expected to have
a Materially Adverse effect on Newmont and its Subsidiaries, taken as a
whole, and there is not any judgement, decree, injunction, rule or order of
any Agency or arbitrator outstanding against Newmont or any of its
Subsidiaries having, or which would reasonably be expected to have, a
Materially Adverse effect on Newmont and its Subsidiaries, taken as a whole.
As of the date of this agreement, except as disclosed in the Filed Newmont
Public Disclosure Documents and except as set forth in (S)(k) of its
disclosure statement, there is no suit, action or proceeding pending, or, to
the knowledge of Newmont, threatened, against Newmont or any of its
Subsidiaries that, individually or in the aggregate, would reasonably be
expected to prevent or delay in any material respect the consummation of the
Transactions.
(l) DETERMINATION BY THE BOARD. The board of directors of Newmont has
unanimously determined and resolved at its meeting held on November 13, 2001:
(i) that the entering into of this agreement and the performance by
Newmont of its obligations hereunder and the Transactions are in the
best interests of Newmont and its shareholders;
(ii) to approve the Transactions and this agreement; and
(iii) to recommend that Newmont Shareholders take all actions
necessary to consummate the transactions contemplated by this agreement.
(m) BROKERS. Except as set forth in (S)(m) of its disclosure statement,
no broker, investment banker, financial advisor or other person is entitled
to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the Transactions based upon arrangements made
by or on behalf of Newmont.
(n) COMPLIANCE. Except for any conflicts, defaults or violations that
could not, individually or in the aggregate (taking into account the impact
of any cross-defaults), reasonably be expected to result in a Materially
Adverse effect on Newmont and its Subsidiaries, taken as a whole, Newmont
has complied with, and is not in conflict with, or in default (including
cross defaults) under or in violation of any Law applicable to its business
or operations. As of the Effective Date, each of Newmont and its
Subsidiaries has or will have complied with each of its covenants and
obligations under this agreement.
79
SCHEDULE H
REGULATORY APPROVALS
CANADA
. expiration or earlier termination of the waiting period under Part IX of
the COMPETITION ACT (Canada) and receipt of an advance ruling certificate
("ARC") pursuant to the COMPETITION ACT (Canada) or, in the alternative to
an ARC, a no-action letter from the Commissioner of Competition
. if applicable, a determination by the Minister responsible for Investment
Canada under the INVESTMENT CANADA ACT (Canada) that the Arrangement is of
"net benefit to Canada" for purposes of such Act on terms and conditions
satisfactory to Newmont
. exemption orders from the Canadian securities Agencies from the
registration and prospectus requirements with respect to the first trade
in Exchangeable Shares
. relief from the Canadian Securities Administrators from certain U.S. GAAP
reporting requirements
. approval of the TSE regarding the conditional listing of the Exchangeable
Shares
UNITED STATES
. expiration or earlier termination of the waiting period under the
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976
. other filings required under the Securities Act and Securities Exchange
Act, and other actions required by the SEC pursuant thereto
80
SCHEDULE I
FORM OF FRANCO-NEVADA AFFILIATE LETTER
November , 2001
Newmont
[ ]
[ ]
Ladies and Gentlemen:
The undersigned, a holder of common shares (the "FRANCO-NEVADA SHARES") of
Franco-Nevada, a corporation incorporated under the laws of Canada
("FRANCO-NEVADA"), has been advised that as of the date hereof, the undersigned
may be deemed to be an "affiliate" of Franco-Nevada, as the term "affiliate" is
defined for purposes of paragraphs (c) and (d) of Rule 145 of the Rules and
Regulations of the Securities and Exchange Commission.
The undersigned has been further advised that, pursuant to the terms of the
Arrangement Agreement, dated as of November 14, 2001 (the "ARRANGEMENT
AGREEMENT"), by and between Newmont, a Delaware corporation ("NEWMONT"), and
Franco-Nevada, Newmont would acquire indirectly all of the Franco-Nevada Common
Shares and as a result of the Arrangement (as that term is defined in the
Arrangement Agreement), the undersigned would receive Newmont Shares (as
defined in the Arrangement Agreement) or Exchangeable Shares (as defined in the
Arrangement Agreement and, collectively with the Newmont Shares, the "NEWMONT
SECURITIES") in exchange for Franco-Nevada Shares owned by the undersigned.
1. The undersigned represents, warrants and covenants that the undersigned:
A. Has read carefully this letter and discussed applicable limitations
upon the ability of the undersigned to sell, transfer or otherwise dispose
of Newmont Securities to the extent the undersigned believes necessary with
counsel of the undersigned or counsel for Franco-Nevada.
B. However, the undersigned has also been advised that, because the
undersigned may be deemed to have been an affiliate of Franco-Nevada at the
time the Arrangement was submitted for a vote of the stockholders of
Franco-Nevada and because the distribution by the undersigned of Newmont
Securities has not been registered under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), the undersigned may not sell, transfer or
otherwise dispose of Newmont Shares and, to the extent applicable,
Exchangeable Shares issued to the undersigned under the Arrangement unless
(i) such sale, transfer or other disposition has been registered under the
Securities Act, (ii) such sale, transfer or other disposition is made in
conformity with the volume and other limitations of Rule 145 promulgated by
the Commission under the Securities Act, or (iii) the undersigned delivers
an opinion of counsel reasonably acceptable to Newmont, or a "no-action" or
interpretive letter of the Commission is furnished to Newmont, stating that,
such sale, transfer or other disposition is otherwise exempt from
registration under the Securities Act.
C. Understands that Newmont is under no obligation to register the sale,
transfer or other disposition of Newmont Securities by the undersigned or on
behalf of the undersigned under the Securities Act or to take any other
action necessary in order to make compliance with an exemption from such
registration available.
D. Also understands that Newmont may give stop-transfer instructions to
its transfer agent with respect to Newmont Securities to enforce the
restrictions on the undersigned set forth herein and that it reserves the
right to place on the certificates for Newmont Securities issued to the
undersigned, or any substitutions therefor, a legend stating in substance:
The securities represented by this certificate have been issued in a
transaction to which Rule 145 promulgated under the Securities Act of
1933 applies and may be sold or otherwise transferred only in compliance
with the requirements of Rule 145 or pursuant to a registration
statement under said Act or an exemption from such registration.
81
E. Also understands that unless the transfer by the undersigned of
Newmont Securities of the undersigned has been registered under the Act or
is a sale made in conformity with the provisions of Rule 145, Newmont
reserves the right to put the following legend on the certificates issued to
transferees of the undersigned:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 and were acquired from a
person who received such shares in a transaction to which Rule 145
promulgated under the Securities Act of 1933 applies. The securities
have been acquired by the holder not with a view to, or for resale in
connection with, any distribution thereof within the meaning of the
Securities Act of 1933 and may not be sold, pledged or otherwise
transferred except in accordance with an exemption from the registration
requirements of the Securities Act of 1933.
F. Neither the execution of this letter nor any provisions set forth
herein shall be construed as an admission on the part of the undersigned
that the undersigned is an affiliate of Franco-Nevada as described in the
first paragraph of this letter, or as a waiver of any rights the undersigned
may have to object to any claim that the undersigned is such an affiliate on
or after the date of this letter.
2. By Newmont's acceptance of this letter, Newmont hereby agrees with the
undersigned to the extent applicable as follows:
A. For so long as and to the extent necessary to permit the undersigned
to sell Newmont Shares and, to the extent applicable, Exchangeable Shares
pursuant to Rule 145 and, to the extent applicable, Rule 144 under the Act,
Newmont shall (a) use its reasonable efforts to (i) file, on a timely basis,
all reports and data required to be filed with the Commission by it pursuant
to Section 13 of the Securities Exchange Act, and (ii) furnish to the
undersigned upon request a written statement as to whether Newmont has
complied with such reporting requirements during the 12 months preceding any
proposed sale of Newmont Shares and, to the extent applicable, Exchangeable
Shares by the undersigned under Rule 145, and (b) otherwise use its
reasonable efforts to permit such sales pursuant to Rule 145 and Rule 144.
Newmont and Franco-Nevada have filed all reports required to be filed with
the Commission under Section 13 of the Securities Exchange Act during the
preceding 12 months.
B. It is understood and agreed that certificates with the legend set
forth in paragraphs 1.D and 1.E above will be substituted by delivery of
certificates without such legend if (i) one year shall have elapsed from the
date the undersigned received Newmont Securities under the Arrangement and
the provisions of Rule 145(d)(2) are then available to the undersigned, (ii)
two years shall have elapsed from the date the undersigned received Newmont
Securities under the Arrangement and the provisions of Rule 145(d)(3) are
then applicable to the undersigned, or (iii) Newmont has received either an
opinion of counsel, which opinion and counsel shall be reasonably
satisfactory to it, or a "no-action" or interpretive letter obtained by the
undersigned from the staff of the Commission, to the effect that the
restrictions imposed by Rule 144 and Rule 145 under the Securities Act no
longer apply to the undersigned.
Very truly yours,
_____________________________________
Signature
_____________________________________
Print Name
ACCEPTED:
Dated:
NEWMONT
By: ___________________________________________________________________________
Name:
Title:
Dated:
82
SCHEDULE J
SECURITIES ACT RULE 144(E)
(e) LIMITATION ON AMOUNT OF SECURITIES SOLD. Except as hereinafter provided,
the amount of securities which may be sold in reliance upon this rule shall be
determined as follows:
(1) SALES BY AFFILIATES. If restricted or other securities are sold for the
account of an affiliate of the issuer, the amount of securities sold, together
with all sales of restricted and other securities of the same class for the
account of such person within the preceding three months, shall not exceed the
greater of: (i) one percent of the shares or other units of the class
outstanding as shown by the most recent report or statement published by the
issuer; or (ii) the average weekly reported volume of trading in such
securities on all national securities exchanges and/or reported through the
automated quotation system of a registered securities association during the
four calendar weeks preceding the filing of notice required by paragraph (h),
or if no such notice is required the date of receipt of the order to execute
the transaction by the broker or the date of execution of the transaction
directly with a market maker; or (iii) the average weekly volume of trading in
such securities reported through the consolidated transaction reporting system
contemplated by Rule 11Aa3-1 under the Securities Exchange Act of 1934 during
the four-week period specified in subdivision (ii) of this paragraph.
(2) SALES BY PERSONS OTHER THAN AFFILIATES. The amount of restricted
securities sold for the account of any person other than an affiliate of the
issuer, together with all other sales of restricted securities of the same
class for the account of such person within the preceding three months, shall
not exceed the amount specified in paragraph (e)(1)(i), (1)(ii) or (1)(iii) of
this section, whichever is applicable, unless the conditions in paragraph (k)
of this rule are satisfied.
(3) DETERMINATION OF AMOUNT. For the purpose of determining the amount of
securities specified in paragraphs (e)(1) and (2) of this rule, the following
provisions shall apply:
(i) Where both convertible securities and securities of the class into
which they are convertible are sold, the amount of convertible securities
sold shall be deemed to be the amount of securities of the class into which
they are convertible for the purpose of determining the aggregate amount of
securities of both classes sold;
(ii) The amount of securities sold for the account of a pledgee thereof,
or for the account of a purchaser of the pledged securities, during any
period of three months within one year after a default in the obligation
secured by the pledge, and the amount of securities sold during the same
three-month period for the account of the pledgor shall not exceed, in the
aggregate, the amount specified in paragraph (e)(1) or (2) of this section,
whichever is applicable;
(iii) The amount of securities sold for the account of a donee thereof
during any period of three months within one year after the donation, and
the amount of securities sold during the same three-month period for the
account of the donor, shall not exceed, in the aggregate, the amount
specified in paragraph (e)(1) or (2) of this section, whichever is
applicable;
(iv) Where securities were acquired by a trust from the settlor of the
trust, the amount of such securities sold for the account of the trust
during any period of three months within one year after the acquisition of
the securities by the trust, and the amount of securities sold during the
same three-month period for the account of the settlor, shall not exceed, in
the aggregate, the amount specified in paragraph (e)(1) or (2) of this
section, whichever is applicable;
(v) The amount of securities sold for the account of the estate of a
deceased person, or for the account of a beneficiary of such estate, during
any period of three months and the amount of securities sold during the same
period for the account of the deceased person prior to his death shall not
exceed, in the aggregate, the amount specified in subparagraph (1) or (2) of
this paragraph, whichever is applicable; PROVIDED, that in no limitation on
amount shall apply if the estate or beneficiary thereof is not an affiliate
of the issuer;
83
(vi) When two or more affiliates or other persons agree to act in concert
for the purpose of selling securities of an issuer, all securities of the
same class sold for the account of all such persons during any period of
three months shall be aggregated for the purpose of determining the
limitation on the amount of securities sold;
(vii) The following sales of securities need not be included in
determining the amount of securities sold in reliance upon this section:
securities sold pursuant to an effective registration statement under the
Act; securities sold pursuant to an exemption provided by Regulation A under
the Act; securities sold in a transaction exempt pursuant to Section 4 of
the Act and not involving any public offering; and securities sold offshore
pursuant to Regulation S under the Act.
84
SCHEDULE K
SUPPORT AGREEMENT
MEMORANDUM OF AGREEMENT made as of the . day of . , 2002, between Newmont
Mining Company, a corporation existing under the laws of Delaware, [CALLCO], a
company existing under the laws of . (hereinafter referred to as "CALLCO")
and Acquisitionco, a corporation existing under the laws of Canada (hereinafter
referred to, together with the continuing corporation from the amalgamation of
Acquisitionco, Franco-Nevada ("FRANCO-NEVADA") and others ("ACQUISITIONCO").
RECITALS:
(a) in connection with an arrangement agreement (the "ARRANGEMENT
AGREEMENT") made as of November 14, 2001 between Newmont and Franco-Nevada,
the Exchangeable Shares are to be issued to certain holders of securities of
Franco-Nevada pursuant to the Plan of Arrangement contemplated by the
Arrangement Agreement; and
(b) pursuant to the Arrangement Agreement, Newmont, Acquisitionco and
Callco are required to execute a support agreement substantially in the form
of this agreement.
In consideration of the foregoing and the mutual agreements contained herein
(the receipt and sufficiency of which are acknowledged), the parties agree as
follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINED TERMS
Each initially capitalized term used and not otherwise defined herein shall
have the meaning ascribed thereto in the rights, privileges, restrictions and
conditions (collectively, the "SHARE PROVISIONS") attaching to the Exchangeable
Shares as set out in the articles of Acquisitionco. In this agreement,
"INCLUDING" means "including without limitation" and "INCLUDES" means "includes
without limitation".
SECTION 1.2 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this agreement into Articles, section, (S) and other
portions and the insertion of headings are for convenience of reference only
and do not affect the construction or interpretation of this agreement. Unless
otherwise specified, references to an "Article" or "(S)" refer to the specified
Article or (S) of this agreement.
SECTION 1.3 NUMBER, GENDER
Words importing the singular number only shall include the plural and vice
versa. Words importing any gender shall include all genders.
SECTION 1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under this agreement
is not a business day, such action shall be required to be taken on the next
succeeding business day. For the purposes of this agreement, a "BUSINESS DAY"
means any day other than a Saturday, Sunday, a public holiday or a day on which
commercial banks are not open for business in Toronto, Ontario or New York, New
York under applicable law.
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ARTICLE 2
COVENANTS OF NEWMONT AND ACQUISITIONCO
SECTION 2.1 COVENANTS REGARDING EXCHANGEABLE SHARES
So long as any Exchangeable Shares not owned by Newmont or its affiliates
are outstanding, Newmont will:
(a) not declare or pay any dividend on the Newmont Shares unless (i)
Acquisitionco shall (A) on the same day declare or pay, as the case may be,
an equivalent dividend (as provided for in the Share Provisions) on the
Exchangeable Shares (an "EQUIVALENT DIVIDEND"), and (B) have sufficient
money or other assets or authorized but unissued securities available to
enable the due declaration and the due and punctual payment, in accordance
with applicable law, of any such Equivalent Dividend, or (ii) Acquisitionco
shall (A) subdivide the Exchangeable Shares in lieu of a stock dividend
thereon (as provided for in the Share Provisions) (an "EQUIVALENT STOCK
SUBDIVISION"), and (B) have sufficient authorized but unissued securities
available to enable the Equivalent Stock Subdivision;
(b) advise Acquisitionco sufficiently in advance of the declaration by
Newmont of any dividend on the Newmont Shares and take all such other
actions as are reasonably necessary, in co-operation with Acquisitionco, to
ensure that (i) the respective declaration date, record date and payment
date for an Equivalent Dividend on the Exchangeable Shares shall be the same
as the declaration date, record date and payment date for the corresponding
dividend on the Newmont Shares, or (ii) the record date and effective date
for an Equivalent Stock Subdivision shall be the same as the record date and
payment date for the corresponding stock dividend on the Newmont Shares;
(c) ensure that the record date for any dividend declared on the Newmont
Shares is not less than 7 days after the declaration date of such dividend;
(d) take all such actions and do all such things as are reasonably
necessary to enable and permit Acquisitionco, in accordance with applicable
law, to pay and otherwise perform its obligations with respect to the
satisfaction of the Liquidation Amount, the Retraction Price or the
Redemption Price in respect of each issued and outstanding Exchangeable
Share (other than Exchangeable Shares owned by Newmont or its affiliates)
upon the liquidation, dissolution or winding-up of Acquisitionco or any
other distribution of the assets of Acquisitionco among its shareholders for
the purpose of winding up its affairs, the delivery of a Retraction Request
by a holder of Exchangeable Shares or a redemption of Exchangeable Shares by
Acquisitionco, as the case may be, including all such actions and all such
things as are necessary or desirable to enable and permit Acquisitionco to
cause to be delivered Newmont Shares to the holders of Exchangeable Shares
in accordance with the provisions of (S)5, 6 or 7, as the case may be, of
the Share Provisions;
(e) take all such actions and do all such things as are reasonably
necessary or desirable to enable and permit Callco or Newmont, in accordance
with applicable law, to perform its obligations arising upon the exercise by
it of the Liquidation Call Right, the Retraction Call Right or the
Redemption Call Right, including all such actions and all such things as are
necessary or desirable to enable and permit Callco or Newmont to cause to be
delivered Newmont Shares to the holders of Exchangeable Shares in accordance
with the provisions of the Liquidation Call Right, the Retraction Call Right
or the Redemption Call Right, as the case may be; and
(f) except in connection with any event, circumstance or action which
causes or could cause the occurrence of a Redemption Date, not exercise its
vote as a shareholder to initiate the voluntary liquidation, dissolution or
winding-up of Acquisitionco or any other distribution of the assets of
Acquisitionco among its shareholders for the purpose of winding up its
affairs, nor take any action or omit to take any action that is designed to
result in the liquidation, dissolution or winding-up of Acquisitionco or any
other distribution of the assets of Acquisitionco among its shareholders for
the purpose of winding up its affairs.
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SECTION 2.2 SEGREGATION OF FUNDS
Newmont will cause Acquisitionco to deposit a sufficient amount of funds in
a separate account of Acquisitionco and segregate a sufficient amount of such
other assets and property as is necessary to enable Acquisitionco to pay
dividends when due and to pay or otherwise satisfy its respective obligations
under (S)5, 6 and 7 of the Share Provisions, as applicable.
SECTION 2.3 RESERVATION OF NEWMONT SHARES
Newmont hereby represents, warrants and covenants in favour of Acquisitionco
and Callco that Newmont has reserved for issuance and will, at all times while
any Exchangeable Shares (other than Exchangeable Shares held by Newmont or its
affiliates) are outstanding, keep available, free from pre-emptive and other
rights, out of its authorized and unissued capital stock such number of Newmont
Shares (or other shares or securities into which Newmont Shares may be
reclassified or changed as contemplated by Section 2.7): (a) as is equal to the
sum of (i) the number of Exchangeable Shares issued and outstanding from time
to time and (ii) the number of Exchangeable Shares issuable upon the exercise
of all rights to acquire Exchangeable Shares outstanding from time to time; and
(b) as are now and may hereafter be required to enable and permit Newmont to
meet its obligations under the Voting and Exchange Trust Agreement and under
any other security or commitment pursuant to which Newmont may now or hereafter
be required to issue Newmont Ordinary Shares, to enable and permit Callco or
Newmont to meet its obligations under each of the Liquidation Call Right, the
Retraction Call Right and the Redemption Call Right and to enable and permit
Acquisitionco to meet its obligations hereunder and under the Share Provisions.
SECTION 2.4 NOTIFICATION OF CERTAIN EVENTS
In order to assist Newmont to comply with its obligations hereunder and to
permit Callco or Newmont to exercise the Liquidation Call Right, the Retraction
Call Right and the Redemption Call Right, Acquisitionco will notify Newmont and
Callco of each of the following events at the time set forth below:
(a) in the event of any determination by the Board of Directors of
Acquisitionco to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to Acquisitionco or to effect any other
distribution of the assets of Acquisitionco among its shareholders for the
purpose of winding up its affairs, at least 60 days prior to the proposed
effective date of such liquidation, dissolution, winding-up or other
distribution;
(b) promptly, upon the earlier of receipt by Acquisitionco of notice of
and Acquisitionco otherwise becoming aware of any threatened or instituted
claim, suit, petition or other proceedings with respect to the involuntary
liquidation, dissolution or winding-up of Acquisitionco or to effect any
other distribution of the assets of Acquisitionco among its shareholders for
the purpose of winding up its affairs;
(c) immediately, upon receipt by Acquisitionco of a Retraction Request;
(d) on the same date on which notice of redemption is given to holders of
Exchangeable Shares, upon the determination of a Redemption Date in
accordance with the Share Provisions; and
(e) as soon as practicable upon the issuance by Acquisitionco of any
Exchangeable Shares or rights to acquire Exchangeable Shares (other than the
issuance of Exchangeable Shares and rights to acquire Exchangeable Shares
pursuant to the Arrangement).
SECTION 2.5 DELIVERY OF NEWMONT SHARES TO ACQUISITIONCO AND CALLCO
In furtherance of its obligations under Section 2.1(d) and Section 2.1(e),
upon notice from Acquisitionco or Callco of any event that requires
Acquisitionco or Callco to cause to be delivered Newmont Shares to any holder
of Exchangeable Shares, Newmont shall forthwith allot, issue and deliver or
cause to be delivered to the relevant holder of Exchangeable Shares as directed
by Acquisitionco or Callco the requisite number of Newmont Shares
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to be allotted to, received by, and issued to or to the order of, the former
holder of the surrendered Exchangeable Shares (but, for the avoidance of doubt,
not to Acquisitionco or Callco). All such Newmont Shares shall be duly
authorized and validly issued as fully paid and shall be free and clear of any
lien, claim or encumbrance. In consideration of the issuance and delivery of
each such Newmont Share, Acquisitionco or Callco, as the case may be, shall
subscribe a cash amount or pay a purchase price equal to the fair market value
of such Newmont Shares.
SECTION 2.6 QUALIFICATION OF NEWMONT SHARES
If any Newmont Shares (or other shares or securities into which Newmont
Shares may be reclassified or changed as contemplated by Section 2.7) to be
issued and delivered hereunder require registration or qualification with or
approval of or the filing of any document, including any prospectus or similar
document or the taking of any proceeding with or the obtaining of any order,
ruling or consent from any governmental or regulatory authority under any
United States or Canadian federal, state, provincial or territorial securities
or other law or regulation or pursuant to the rules and regulations of any
securities or other regulatory authority in the United States or Canada or the
fulfillment of any other United States or Canadian legal requirement before
such shares (or such other shares or securities) may be issued by Newmont and
delivered by Newmont at the direction of Callco or Acquisitionco, if
applicable, to the holder of surrendered Exchangeable Shares or in order that
such shares (or such other shares or securities) may be freely traded
thereafter (other than any restrictions of general application on transfer by
reason of a holder being a "CONTROL PERSON" for purposes of Canadian federal,
provincial or territorial securities Law or the equivalent thereof under any
United States Laws), Newmont will in good faith expeditiously take all such
actions and do all such things as are reasonably necessary or desirable to
cause such Newmont Shares (or such other shares or securities) to be and remain
duly registered, qualified or approved under United States and/or Canadian law.
Newmont will in good faith expeditiously take all such actions and do all such
things as are reasonably necessary or desirable to cause all Newmont Shares (or
such other shares or securities) to be delivered hereunder to be listed, quoted
or posted for trading on all stock exchanges and quotation systems on which
outstanding Newmont Shares (or such other shares or securities) have been
listed by Newmont and remain listed and are quoted or posted for trading at
such time.
SECTION 2.7 ECONOMIC EQUIVALENCE
So long as any Exchangeable Shares not owned by Newmont or its affiliates
are outstanding:
(a) Newmont will not without prior approval of Acquisitionco and the
prior approval of the holders of the Exchangeable Shares given in accordance
with (S)10(2) of the Share Provisions:
(i) issue or distribute Newmont Shares (or securities exchangeable
for or convertible into or carrying rights to acquire Newmont Shares) to
the holders of all or substantially all of the then outstanding Newmont
Shares by way of stock dividend or other distribution, other than an
issue of Newmont Shares (or securities exchangeable for or convertible
into or carrying rights to acquire Newmont Shares) to holders of Newmont
Shares (i) who exercise an option to receive dividends in Newmont Shares
(or securities exchangeable for or convertible into or carrying rights
to acquire Newmont Shares) in lieu of receiving cash dividends, or (ii)
pursuant to any dividend reinvestment plan or similar arrangement; or
(ii) issue or distribute rights, options or warrants to the holders
of all or substantially all of the then outstanding Newmont Shares
entitling them to subscribe for or to purchase Newmont Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Newmont Shares); or
(iii) issue or distribute to the holders of all or substantially all
of the then outstanding Newmont Shares (A) shares or securities
(including evidence of indebtedness) of Newmont of any class (other than
Newmont Shares or securities convertible into or exchangeable for or
carrying rights to acquire Newmont Shares), or (B) rights, options,
warrants or other assets other than those referred to in Section
2.7(a)(ii),
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unless in each case the economic equivalent on a per share basis of such
rights, options, securities, shares, evidences of indebtedness or other
assets is issued or distributed simultaneously to holders of the
Exchangeable Shares and at least 7 days prior written notice thereof is
given to the holders of Exchangeable Shares; provided that, for greater
certainty, the above restrictions shall not apply to any securities issued
or distributed by Newmont in order to give effect to and to consummate, is
in furtherance of or is otherwise in connection with the transactions
contemplated by, and in accordance with, the Plan of Arrangement.
(b) Newmont will not without the prior approval of Acquisitionco and the
prior approval of the holders of the Exchangeable Shares given in accordance
with (S)10(2) of the Share Provisions:
(i) subdivide, redivide or change the then outstanding Newmont Shares
into a greater number of Newmont Shares; or
(ii) reduce, combine, consolidate or change the then outstanding
Newmont Shares into a lesser number of Newmont Shares; or
(iii) reclassify or otherwise change Newmont Shares or effect an
amalgamation, merger, reorganization or other transaction affecting
Newmont Shares;
unless the same or an economically equivalent change shall simultaneously be
made to, or in the rights of the holders of, the Exchangeable Shares and at
least seven days prior written notice is given to the holders of
Exchangeable Shares.
(c) Newmont will ensure that the record date for any event referred to in
Section 2.7(a) or Section 2.7(b), or (if no record date is applicable for
such event) the effective date for any such event, is not less than five
business days after the date on which such event is declared or announced by
Newmont (with contemporaneous notification thereof by Newmont to
Acquisitionco).
(d) The Board of Directors of Acquisitionco shall determine, acting in
good faith and in its sole discretion, economic equivalence for the purposes
of any event referred to in Section 2.7(a) or Section 2.7(b) and each such
determination shall be conclusive and binding on Newmont. In making each
such determination, the following factors shall, without excluding other
factors determined by the Board of Directors of Acquisitionco to be
relevant, be considered by the Board of Directors of Acquisitionco:
(i) in the case of any stock dividend or other distribution payable
in Newmont Shares, the number of such shares issued in proportion to the
number of Newmont Shares previously outstanding;
(ii) in the case of the issuance or distribution of any rights,
options or warrants to subscribe for or purchase Newmont Shares (or
securities exchangeable for or convertible into or carrying rights to
acquire Newmont Shares), the relationship between the exercise price of
each such right, option or warrant and the Current Market Price of a
Newmont Share;
(iii) in the case of the issuance or distribution of any other form
of property (including any shares or securities of Newmont of any class
other than Newmont Shares, any rights, options or warrants other than
those referred to in Section 2.7(d)(ii), any evidences of indebtedness
of Newmont or any assets of Newmont), the relationship between the fair
market value (as determined by the Board of Directors of Acquisitionco
in the manner above contemplated) of such property to be issued or
distributed with respect to each outstanding Newmont Share and the
Current Market Price of a Newmont Share;
(iv) in the case of any subdivision, redivision or change of the then
outstanding Newmont Shares into a greater number of Newmont Shares or
the reduction, combination, consolidation or change of the then
outstanding Newmont Shares into a lesser number of Newmont Shares or any
amalgamation, merger, reorganization or other transaction affecting
Newmont Shares, the effect thereof upon the then outstanding Newmont
Shares; and
(v) in all such cases, the general taxation consequences of the
relevant event to holders of Exchangeable Shares to the extent that such
consequences may differ from the taxation consequences to holders of
Newmont Shares as a result of differences between taxation laws of
Canada and the
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United States (except for any differing consequences arising as a result
of differing marginal taxation rates and without regard to the
individual circumstances of holders of Exchangeable Shares).
(e) Acquisitionco agrees that, to the extent required, upon due notice
from Newmont, Acquisitionco will use its best efforts to take or cause to be
taken such steps as may be necessary for the purposes of ensuring that
appropriate dividends are paid or other distributions are made by
Acquisitionco, or subdivisions, redivisions or changes are made to the
Exchangeable Shares, in order to implement the required economic equivalence
with respect to the Newmont Shares and Exchangeable Shares as provided for
in this Section 2.7.
SECTION 2.8 TENDER OFFERS
In the event that a tender offer, share exchange offer, issuer bid,
take-over bid or similar transaction with respect to Newmont Shares (an
"OFFER") is proposed by Newmont or is proposed to Newmont or its shareholders
and is recommended by the Board of Directors of Newmont, or is otherwise
effected or to be effected with the consent or approval of the Board of
Directors of Newmont, and the Exchangeable Shares are not redeemed by
Acquisitionco or purchased by Callco or Newmont pursuant to the Redemption Call
Right, Newmont will expeditiously and in good faith take all such actions and
do all such things as are reasonably necessary or desirable to enable and
permit holders of Exchangeable Shares (other than Newmont and its affiliates)
to participate in such Offer to the same extent and on an economically
equivalent basis as the holders of Newmont Shares, without discrimination.
Without limiting the generality of the foregoing, Newmont will expeditiously
and in good faith take all such actions and do all such things as are
reasonably necessary or desirable to ensure that holders of Exchangeable Shares
may participate in each such Offer without being required to retract
Exchangeable Shares as against Acquisitionco (or, if so required, to ensure
that any such retraction, shall be effective only upon, and shall be
conditional upon, the closing of such Offer and only to the extent necessary to
tender or deposit to the Offer). Nothing herein shall affect the rights of
Acquisitionco to redeem (or Callco or Newmont to purchase pursuant to the
Redemption Call Right) Exchangeable Shares, as applicable, in the event of a
Newmont Control Transaction.
SECTION 2.9 OWNERSHIP OF OUTSTANDING SHARES
Without the prior approval of Acquisitionco and the prior approval of the
holders of the Exchangeable Shares given in accordance with (S)10(2) of the
Share Provisions, Newmont covenants and agrees in favour of Acquisitionco that,
as long as any outstanding Exchangeable Shares are owned by any person other
than Newmont or any of its affiliates, Newmont will be and remain the direct or
indirect beneficial owner of all issued and outstanding voting shares in the
capital of Acquisitionco and Callco.
SECTION 2.10 NEWMONT AND AFFILIATES NOT TO VOTE EXCHANGEABLE SHARES
Newmont covenants and agrees that it will appoint and cause to be appointed
proxyholders with respect to all Exchangeable Shares held by it and its
affiliates for the sole purpose of attending each meeting of holders of
Exchangeable Shares in order to be counted as part of the quorum for each such
meeting. Newmont further covenants and agrees that it will not, and will cause
its affiliates not to, exercise any voting rights which may be exercisable by
holders of Exchangeable Shares from time to time pursuant to the Share
Provisions or pursuant to the provisions of the CBCA (or any successor or other
corporate statute by which Acquisitionco may in the future be governed) with
respect to any Exchangeable Shares held by it or by its affiliates in respect
of any matter considered at any meeting of holders of Exchangeable Shares.
SECTION 2.11 ORDINARY MARKET PURCHASES
For certainty, nothing contained in this agreement, including the
obligations of Newmont contained in Section 2.8, shall limit the ability of
Newmont (or any of its subsidiaries including, without limitation, Callco or
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Acquisitionco) to make ordinary market purchases of Newmont Shares in
accordance with applicable laws and regulatory or stock exchange requirements.
SECTION 2.12 STOCK EXCHANGE LISTING
Newmont covenants and agrees in favour of Acquisitionco that, as long as any
outstanding Exchangeable Shares are owned by any person other than Newmont or
any of its affiliates, Newmont will use its best efforts to maintain a listing
for such Exchangeable Shares on The Toronto Stock Exchange.
ARTICLE 3
NEWMONT SUCCESSORS
SECTION 3.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
As long as any outstanding Exchangeable Shares are owned by any person other
than Newmont or any of its affiliates, Newmont shall not consummate any
transaction (whether by way of reconstruction, reorganization, consolidation,
arrangement, merger, transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets would become the
property of any other person or, in the case of a merger, of the continuing
corporation resulting therefrom unless, but may do so if:
(a) such other person or continuing corporation (the "NEWMONT SUCCESSOR")
by operation of law, becomes, without more, bound by the terms and
provisions of this agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction, an agreement
supplemental hereto and such other instruments (if any) as are reasonably
necessary or advisable to evidence the assumption by the Newmont Successor
of liability for all moneys payable and property deliverable hereunder and
the covenant of such Newmont Successor to pay and deliver or cause to be
delivered the same and its agreement to observe and perform all the
covenants and obligations of Newmont under this agreement; and
(b) such transaction shall be upon such terms and conditions as
substantially to preserve and not to impair in any material respect any of
the rights, duties, powers and authorities of the other parties hereunder or
the holders of the Exchangeable Shares.
SECTION 3.2 VESTING OF POWERS IN SUCCESSOR
Whenever the conditions of Section 3.1 have been duly observed and
performed, the parties, if required by Section 3.1, shall execute and deliver
the supplemental agreement provided for in Section 3.1(a) and thereupon the
Newmont Successor and such other person that may then be the issuer of the
Newmont Shares shall possess and from time to time may exercise each and every
right and power of Newmont under this agreement in the name of Newmont or
otherwise and any act or proceeding by any provision of this agreement required
to be done or performed by the Board of Directors of Newmont or any officers of
Newmont may be done and performed with like force and effect by the directors
or officers of such Newmont Successor.
SECTION 3.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing (i) the amalgamation or
merger of any wholly-owned direct or indirect subsidiary of Newmont with or
into Newmont, (ii) the winding-up, liquidation or dissolution of any
wholly-owned direct or indirect subsidiary of Newmont, provided that all of the
assets of such subsidiary are transferred to Newmont or another wholly-owned
direct or indirect subsidiary of Newmont, or (iii) any other distribution of
the assets of any wholly-owned direct or indirect subsidiary of Newmont among
the shareholders of such subsidiary for the purpose of winding up its affairs,
and any such transactions are expressly permitted by this Article 3.
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ARTICLE 4
GENERAL
SECTION 4.1 TERM
This agreement shall come into force and be effective as of the date hereof
and shall terminate and be of no further force and effect at such time as no
Exchangeable Shares (or securities or rights convertible into or exchangeable
for or carrying rights to acquire Exchangeable Shares) are held by any person
other than Newmont and any of its affiliates.
SECTION 4.2 CHANGES IN CAPITAL OF NEWMONT AND ACQUISITIONCO
At all times after the occurrence of any event contemplated pursuant to
Section 2.7 and Section 2.8 or otherwise, as a result of which either Newmont
Shares or the Exchangeable Shares or both are in any way changed, this
agreement shall forthwith be amended and modified as necessary in order that it
shall apply with full force and effect, MUTATIS MUTANDIS, to all new securities
into which Newmont Shares or the Exchangeable Shares or both are so changed and
the parties hereto shall execute and deliver an agreement in writing giving
effect to and evidencing such necessary amendments and modifications.
SECTION 4.3 SEVERABILITY
If any term or other provision of this agreement is invalid, illegal or
incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
SECTION 4.4 AMENDMENTS, MODIFICATIONS
(a) Subject to Section 4.2, Section 4.3 and Section 4.5 this agreement
may not be amended or modified except by an agreement in writing executed by
Acquisitionco, Callco and Newmont and approved by the holders of the
Exchangeable Shares in accordance with (S)10(2) of the Share Provisions.
(b) No amendment or modification or waiver of any of the provisions of
this agreement otherwise permitted hereunder shall be effective unless made
in writing and signed by all of the parties hereto.
SECTION 4.5 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of Section 4.4, the parties to this agreement
may in writing at any time and from time to time, without the approval of the
holders of the Exchangeable Shares, amend or modify this agreement for the
purposes of:
(a) adding to the covenants of any or all parties provided that the Board
of Directors of each of Acquisitionco, Callco and Newmont shall be of the
good faith opinion that such additions will not be prejudicial to the rights
or interests of the holders of the Exchangeable Shares;
(b) making such amendments or modifications not inconsistent with this
agreement as may be necessary or desirable with respect to matters or
questions which, in the good faith opinion of the Board of Directors of each
of Acquisitionco, Callco and Newmont, it may be expedient to make, provided
that each such Board of Directors shall be of the good faith opinion that
such amendments or modifications will not be prejudicial to the rights or
interests of the holders of the Exchangeable Shares; or
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(c) making such changes or corrections which, on the advice of counsel to
Acquisitionco, Callco and Newmont, are required for the purpose of curing or
correcting any ambiguity or defect or inconsistent provision or clerical
omission or mistake or manifest error, provided that the Boards of Directors
of each of Acquisitionco, Callco and Newmont shall be of the good faith
opinion that such changes or corrections will not be prejudicial to the
rights or interests of the holders of the Exchangeable Shares.
SECTION 4.6 MEETING TO CONSIDER AMENDMENTS
Acquisitionco, at the request of Newmont, shall call a meeting or meetings
of the holders of the Exchangeable Shares for the purpose of considering any
proposed amendment or modification requiring approval pursuant to Section 4.4.
Any such meeting or meetings shall be called and held in accordance with the
bylaws of Acquisitionco, the Share Provisions and all applicable laws.
SECTION 4.7 ENUREMENT
This agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective successors and assigns.
SECTION 4.8 NOTICES TO PARTIES
Any notice and other communications required or permitted to be given
pursuant to this agreement shall be sufficiently given if delivered in person
or if sent by facsimile transmission (provided such transmission is recorded as
being transmitted successfully) to the parties at the following addresses:
.
or at such other address as the party to which such notice or other
communication is to be given has last notified the party given the same in the
manner provided in this section, and if not given the same shall be deemed to
have been received on the date of such delivery or sending.
SECTION 4.9 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and
the same instrument.
SECTION 4.10 JURISDICTION
This agreement shall be construed and enforced in accordance with the laws
of the Province of Ontario and the laws of Canada applicable therein. Each
party hereto irrevocably submits to the non-exclusive jurisdiction of the
courts of the Province of Ontario with respect to any matter arising hereunder
or related hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this agreement to be duly
executed as of the date first above written.
NEWMONT
By:
-----------------------------------
Name:
Title:
[CALLCO]
By:
-----------------------------------
Name:
Title:
ACQUISITIONCO
By:
-----------------------------------
Name:
Title:
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SCHEDULE L
VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT made as of the . day of . , 2002, between New
Newmont, a corporation existing under the laws of [DELAWARE] ("NEWMONT"),
Acquisitionco, a corporation existing under the laws of Canada (together with
the continuing corporation from the amalgamation of Acquisitionco,
Franco-Nevada and others, hereinafter referred to as "ACQUISITIONCO") and . , a
trust company incorporated under the laws of Canada (hereinafter referred to as
"TRUSTEE").
RECITALS:
A In connection with an arrangement agreement (as further amended,
supplemented and/or restated, the "ARRANGEMENT AGREEMENT") made as of
November 14, 2001 between Newmont and Franco-Nevada ("FRANCO-NEVADA"), the
Exchangeable Shares are to be issued to certain holders of securities of
Franco-Nevada pursuant to the Plan of Arrangement contemplated in the
Arrangement Agreement;
B Pursuant to the Arrangement Agreement, Newmont and Acquisitionco are
required to execute a voting and exchange trust agreement substantially in
the form of this agreement.
In consideration of the foregoing and the mutual agreements contained herein
(the receipt and sufficiency of which are acknowledged), the parties agree as
follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement, each initially capitalized term used and not otherwise
defined herein shall have the meaning ascribed thereto in the rights,
privileges, restrictions and conditions (collectively, the "SHARE PROVISIONS")
attaching to the Exchangeable Shares as set out in the articles of
Acquisitionco and the following terms shall have the following meanings:
"AUTHORIZED INVESTMENTS" means short term interest bearing or discount
debt obligations issued or guaranteed by the Government of Canada or any
province thereof or a Canadian chartered bank (which may include an
affiliate or related party of the Trustee), maturing not more than one year
from the date of investment, provided that each such obligation is rated at
least R1 (middle) by DBRS Inc. or any equivalent rating by Canadian Bond
Rating Service.
"AUTOMATIC EXCHANGE RIGHT" means the benefit of the obligation of Newmont
under (S)5.1 pursuant to which Newmont is required to purchase all or any
part of the Exchangeable Shares from the holders thereof in exchange for
Newmont Shares upon the occurrence and during the continuance of an
Insolvency Event.
"AUTOMATIC EXCHANGE RIGHTS ON LIQUIDATION" means the benefit of the
obligation of Newmont to effect the automatic exchange of Exchangeable
Shares for Newmont Shares pursuant to (S)5.8.
"BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than Newmont's affiliates.
"BENEFICIARY VOTES" has the meaning ascribed thereto in (S)4.2.
"BOARD OF DIRECTORS" means the Board of Directors of Acquisitionco.
"EXCHANGEABLE SHARES" means the exchangeable shares in the capital of
Acquisitionco as more particularly described in Appendix 1 to Schedule B.
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"INCLUDING" means "including without limitation" and "INCLUDES" means
"includes without limitation".
"INDEMNIFIED PARTIES" has the meaning ascribed thereto in (S)9.1.
"INSOLVENCY EVENT" means (i) the institution by Acquisitionco of any
proceeding to be adjudicated a bankrupt or insolvent or to be wound up, or
the consent of Acquisitionco to the institution of bankruptcy, insolvency or
winding-up proceedings against it, or (ii) the filing of a petition, answer
or consent seeking dissolution or winding-up under any bankruptcy,
insolvency or analogous laws, including the COMPANIES CREDITORS' ARRANGEMENT
ACT (Canada) and the BANKRUPTCY AND INSOLVENCY ACT (Canada), and the failure
by Acquisitionco to contest in good faith any such proceedings commenced in
respect of Acquisitionco within 30 days of becoming aware thereof, or the
consent by Acquisitionco to the filing of any such petition or to the
appointment of a receiver, or (iii) the making by Acquisitionco of a general
assignment for the benefit of creditors, or the admission in writing by
Acquisitionco of its inability to pay its debts generally as they become
due, or (iv) Acquisitionco not being permitted, pursuant to solvency
requirements of applicable law, to redeem any Retracted Shares pursuant to
(S)6(6) of the Share Provisions.
"LIQUIDATION EVENT" has the meaning ascribed thereto in (S)5.8(2).
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed thereto in
(S)5.8(3).
"LIST" has the meaning ascribed thereto in (S)4.6.
"NEWMONT MEETING" has the meaning ascribed thereto in (S)4.2.
"NEWMONT SPECIAL VOTING SHARE" means the special voting share in the
capital of Newmont which entitles the holder of record to a number of votes
at meetings of holders of Newmont Shares equal to the number of Exchangeable
Shares outstanding from time to time (other than Exchangeable Shares held by
Newmont and affiliates of Newmont), subject to a maximum aggregate number of
votes equal to 10% of the aggregate number of votes attached to the Newmont
Shares that are issued and outstanding at the relevant time, which share is
to be issued to and voted by, the Trustee as described herein.
"NEWMONT SUCCESSOR" has the meaning ascribed thereto in (S)11.1(a).
"OFFICER'S CERTIFICATE" means, with respect to Newmont or Acquisitionco,
as the case may be, a certificate signed by any officer or director of
Newmont or Acquisitionco, as the case may be.
"SUPPORT AGREEMENT" means that certain support agreement of even date
between Acquisitionco, Callco and Newmont in the form of Schedule D to the
Arrangement Agreement, as amended in accordance with the terms of the
Support Agreement.
"TRUST" means the trust created by this agreement.
"TRUST ESTATE" means the Newmont Special Voting Share, any other
securities, the Automatic Exchange Right, the Automatic Exchange Rights on
Liquidation and any money or other property which may be held by the Trustee
from time to time pursuant to this agreement.
"TRUSTEE" means [COMPUTERSHARE TRUST COMPANY OF CANADA] and, subject to
the provisions of Article 10, includes any successor trustee.
"VOTING RIGHTS" means the voting rights attached to the Newmont Special
Voting Share.
1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this agreement into Articles, sections and other portions
and the insertion of headings are for convenience of reference only and do not
affect the construction or interpretation of this agreement. Unless otherwise
specified, references to an "Article" or "section" refer to the specified
Article or section of this agreement.
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1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural and VICE
VERSA. Words importing any gender shall include all genders.
1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under this agreement
is not a business day, such action shall be required to be taken on the next
succeeding business day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST
The purpose of this agreement is to create the Trust for the benefit of the
Beneficiaries, as herein provided. The Trustee will hold the Newmont Special
Voting Share in order to enable the Trustee to exercise the Voting Rights and
will hold the Automatic Exchange Right and the Automatic Exchange Rights on
Liquidation in order to enable the Trustee to exercise such rights, in each
case as trustee for and on behalf of the Beneficiaries as provided in this
agreement.
ARTICLE 3
NEWMONT SPECIAL VOTING SHARE
3.1 ISSUE AND OWNERSHIP OF THE NEWMONT SPECIAL VOTING SHARE
Immediately following execution of this agreement, Newmont shall issue to
the Trustee the Newmont Special Voting Share (and shall deliver the certificate
representing such share to the Trustee) to be hereafter held of record by the
Trustee as trustee for and on behalf of, and for the use and benefit of, the
Beneficiaries and in accordance with the provisions of this agreement. Newmont
hereby acknowledges receipt from the Trustee as trustee for and on behalf of
the Beneficiaries of good and valuable consideration (and the adequacy thereof)
for the issuance of the Newmont Special Voting Share by Newmont to the Trustee.
During the term of the Trust and subject to the terms and conditions of this
agreement, the Trustee shall possess and be vested with full legal ownership of
the Newmont Special Voting Share and shall be entitled to exercise all of the
rights and powers of an owner with respect to the Newmont Special Voting Share
provided that the Trustee shall:
(a) hold the Newmont Special Voting Share and the legal title thereto as
trustee solely for the use and benefit of the Beneficiaries in accordance
with the provisions of this agreement; and
(b) except as specifically authorized by this agreement, have no power or
authority to sell, transfer, vote or otherwise deal in or with the Newmont
Special Voting Share and the Newmont Special Voting Share shall not be used
or disposed of by the Trustee for any purpose other than the purposes for
which this Trust is created pursuant to this agreement.
3.2 LEGENDED SHARE CERTIFICATES
Acquisitionco will cause each certificate representing Exchangeable Shares
to bear an appropriate legend notifying the Beneficiaries of their right to
instruct the Trustee with respect to the exercise of the Voting Rights in
respect of the Exchangeable Shares of the Beneficiaries.
3.3 SAFE KEEPING OF CERTIFICATE
The certificate representing the Newmont Special Voting Share shall at all
times be held in safe keeping by the Trustee or its duly authorized agent.
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ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 VOTING RIGHTS
The Trustee, as the holder of record of the Newmont Special Voting Share,
shall be entitled to all of the Voting Rights, including the right to vote in
person or by proxy attaching to the Newmont Special Voting Share on any
matters, questions, proposals or propositions whatsoever that may properly come
before the shareholders of Newmont at a Newmont Meeting. The Voting Rights
shall be and remain vested in and exercised by the Trustee subject to the terms
of this agreement. Subject to (S)7.15:
(a) the Trustee shall exercise the Voting Rights only on the basis of
instructions received pursuant to this Article 4 from Beneficiaries on the
record date established by Newmont or by applicable law for such Newmont
Meeting who are entitled to instruct the Trustee as to the voting thereof;
and
(b) to the extent that no instructions are received from a Beneficiary
with respect to the Voting Rights to which such Beneficiary is entitled, the
Trustee shall not exercise or permit the exercise of such Voting Rights.
4.2 NUMBER OF VOTES
(1) With respect to all meetings of shareholders of Newmont at which holders
of Newmont Shares are entitled to vote (each, a "NEWMONT MEETING"), each
Beneficiary shall be entitled to instruct the Trustee to cast and exercise for
each Exchangeable Share owned of record by a Beneficiary on the record date
established by Newmont or by applicable law for such Newmont Meeting (the
"BENEFICIARY VOTES"), in respect of each matter, question, proposal or
proposition to be voted on at such Newmont Meeting, a pro rata number of Voting
Rights determined by reference to the total number of outstanding Exchangeable
Shares not owned by Newmont and its affiliates.
(2) The aggregate Voting Rights on a poll at a Newmont Meeting shall consist
of a number of votes equal to the lesser of:
(a) one vote per outstanding Exchangeable Share from time to time not
owned by Newmont and its affiliates, and
(b) one vote for every 10 votes attaching to outstanding Newmont Shares,
and for which the Trustee has received voting instructions from the
Beneficiary. Pursuant to the terms of the Special Voting Share, the Trustee or
its proxy is entitled on a vote on a show of hands to one vote in addition to
any votes which may be cast by a Beneficiary (or its nominee) on a show of
hands as proxy for the Trustee. Any Beneficiary who chooses to attend a Newmont
Meeting in person, and who is entitled to vote in accordance with (S)4.8(2)
shall be entitled to one vote on a show of hands.
4.3 MAILINGS TO SHAREHOLDERS
(1) With respect to each Newmont Meeting, the Trustee will use its
reasonable efforts promptly to mail or cause to be mailed (or otherwise
communicate in the same manner as Newmont utilizes in communications to holders
of Newmont Shares subject to applicable regulatory requirements and provided
that such manner of communications is reasonably available to the Trustee) to
each of the Beneficiaries named in the List, such mailing or communication to
commence wherever practicable on the same day as the mailing or notice (or
other communication) with respect thereto is commenced by Newmont to its
shareholders:
(a) a copy of such notice, together with any related materials, including
any circular or information statement or listing particulars, to be provided
to shareholders of Newmont;
(b) a statement that such Beneficiary is entitled to instruct the Trustee
as to the exercise of the Beneficiary Votes with respect to such Newmont
Meeting or, pursuant to (S)4.7, to attend such Newmont Meeting and to
exercise personally the Beneficiary Votes thereat;
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(c) a statement as to the manner in which such instructions may be given
to the Trustee, including an express indication that instructions may be
given to the Trustee to give:
(i) a proxy to such Beneficiary or his, her or its designee to
exercise personally the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of Newmont
to exercise such Beneficiary Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is entitled
will not be exercised;
(e) a form of direction whereby the Beneficiary may so direct and
instruct the Trustee as contemplated herein; and
(f) a statement of the time and date by which such instructions must be
received by the Trustee in order to be binding upon it, which in the case of
a Newmont Meeting shall not be earlier than the close of business on the
fourth business day prior to such meeting, and of the method for revoking or
amending such instructions.
(2) The materials referred to in this (S)4.3 are to be provided to the
Trustee by Newmont, and the materials referred to in (S)4.3(1)(c), (S)4.3(1)(e)
and (S)4.3(1)(f) shall (if reasonably practicable to do so) be subject to
reasonable comment by the Trustee in a timely manner. Subject to the foregoing,
Newmont shall ensure that the materials to be provided to the Trustee are
provided in sufficient time to permit the Trustee to comment as aforesaid and
to send all materials to each Beneficiary at the same time as such materials
are first sent to holders of Newmont Shares. Newmont agrees not to communicate
with holders of Newmont Shares with respect to the materials referred to in
this (S)4.3 otherwise than by mail unless such method of communication is also
reasonably available to the Trustee for communication with the Beneficiaries.
(3) For the purpose of determining Beneficiary Votes to which a Beneficiary
is entitled in respect of any Newmont Meeting, the number of Exchangeable
Shares owned of record by the Beneficiary shall be determined at the close of
business on the record date established by Newmont or by applicable law for
purposes of determining shareholders entitled to vote at such Newmont Meeting.
Newmont will notify the Trustee of any decision of the board of directors of
Newmont with respect to the calling of any Newmont Meeting and shall provide
all necessary information and materials to the Trustee in each case promptly
and in any event in sufficient time to enable the Trustee to perform its
obligations contemplated by this (S)4.3.
4.4 COPIES OF SHAREHOLDER INFORMATION
Newmont will deliver to the Trustee copies of all proxy materials (including
notices of Newmont Meetings but excluding proxies to vote Newmont Shares),
information statements, reports (including all interim and annual financial
statements) and other written communications that, in each case, are to be
distributed by Newmont from time to time to holders of Newmont Shares in
sufficient quantities and in sufficient time so as to enable the Trustee to
send those materials to each Beneficiary at the same time as such materials are
first sent to holders of Newmont Shares. The Trustee will mail or otherwise
send to each Beneficiary, at the expense of Newmont, copies of all such
materials (and all materials specifically directed to the Beneficiaries or to
the Trustee for the benefit of the Beneficiaries by Newmont) received by the
Trustee from Newmont contemporaneously with the sending of such materials to
holders of Newmont Shares. The Trustee will also make available for inspection
by any Beneficiary at the Trustee's principal office in Toronto all proxy
materials, information statements, reports and other written communications
that are:
(a) received by the Trustee as the registered holder of the Newmont
Special Voting Share and made available by Newmont generally to the holders
of Newmont Shares; or
(b) specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by Newmont.
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4.5 OTHER MATERIALS
As soon as reasonably practicable after receipt by Newmont or shareholders
of Newmont (if such receipt is known by Newmont) of any material sent or given
by or on behalf of a third party to holders of Newmont Shares generally,
including dissident proxy and information circulars (and related information
and material) and take-over bid and securities exchange take-over bid circulars
(and related information and material), provided such material has not been
sent to the Beneficiaries by or on behalf of such third party, Newmont shall
use its reasonable efforts to obtain and deliver to the Trustee copies thereof
in sufficient quantities so as to enable the Trustee to forward such material
(unless the same has been provided directly to Beneficiaries by such third
party) to each Beneficiary as soon as possible thereafter. As soon as
reasonably practicable after receipt thereof, the Trustee will mail or
otherwise send to each Beneficiary, at the expense of Newmont, copies of all
such materials received by the Trustee from Newmont. The Trustee will also make
available for inspection by any Beneficiary at the Trustee's principal office
in Toronto copies of all such materials.
4.6 LIST OF PERSONS ENTITLED TO VOTE
Acquisitionco shall, (a) prior to each annual, general and extraordinary
Newmont Meeting and (b) forthwith upon each request made at any time by the
Trustee in writing, prepare or cause to be prepared a list (a "LIST") of the
names and addresses of the Beneficiaries arranged in alphabetical order and
showing the number of Exchangeable Shares held of record by each such
Beneficiary, in each case at the close of business on the date specified by the
Trustee in such request or, in the case of a List prepared in connection with a
Newmont Meeting, at the close of business on the record date established by
Newmont or pursuant to applicable law for determining the holders of Newmont
Shares entitled to receive notice of and/or to vote at such Newmont Meeting.
Each such List shall be delivered to the Trustee promptly after receipt by
Acquisitionco of such request or the record date for such meeting and in any
event within sufficient time as to permit the Trustee to perform its
obligations under this agreement. Newmont agrees to give Acquisitionco notice
(with a copy to the Trustee) of the calling of any Newmont Meeting, together
with the record date therefor, sufficiently prior to the date of the calling of
such meeting so as to enable Acquisitionco to perform its obligations under
this (S)4.6.
4.7 ENTITLEMENT TO DIRECT VOTES
Subject to (S)4.8 and (S)4.11, any Beneficiary named in a List prepared in
connection with any Newmont Meeting will be entitled (a) to instruct the
Trustee in the manner described in (S)4.3 with respect to the exercise of the
Beneficiary Votes to which such Beneficiary is entitled or (b) to attend such
meeting and personally exercise thereat, as the proxy of the Trustee, the
Beneficiary Votes to which such Beneficiary is entitled.
4.8 VOTING BY TRUSTEE AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT MEETING
(1) In connection with each Newmont Meeting, the Trustee shall exercise,
either in person or by proxy, in accordance with the instructions received from
a Beneficiary pursuant to (S)4.3, the Beneficiary Votes as to which such
Beneficiary is entitled to direct the vote (or any lesser number thereof as may
be set forth in the instructions) other than any Beneficiary Votes that are the
subject of (S)4.8(2); provided, however, that such written instructions are
received by the Trustee from the Beneficiary prior to the time and date fixed
by the Trustee for receipt of such instruction in the notice given by the
Trustee to the Beneficiary pursuant to (S)4.3.
(2) The Trustee shall cause a representative who is empowered by it to sign
and deliver, on behalf of the Trustee, proxies for Voting Rights to attend each
Newmont Meeting. Upon submission by a Beneficiary (or its designee) named in
the List prepared in connection with the relevant meeting of identification
satisfactory to the Trustee's representative, and at the Beneficiary's request,
such representative shall sign and deliver to such Beneficiary (or its
designee) a proxy to exercise personally the Beneficiary Votes as to which such
Beneficiary is otherwise entitled hereunder to direct the vote, if such
Beneficiary either (i) has not previously given the Trustee instructions
pursuant to (S)4.3 in respect of such meeting or (ii) submits to such
representative written revocation of any such previous instructions. At such
meeting, the Beneficiary (or its designee) exercising such Beneficiary Votes in
accordance with such proxy shall have the same rights in respect of such
Beneficiary Votes as the Trustee to speak at the meeting in favour of any
matter, question, proposal or proposition, to vote by way of ballot at the
meeting in respect of any matter, question, proposal or proposition, and to
vote at such meeting by way of a show of hands in respect of any matter,
question or proposition.
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4.9 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials distributed by the Trustee pursuant to this agreement
shall be sent by mail (or otherwise communicated in the same manner as Newmont
utilizes in communications to holders of Newmont Shares subject to applicable
regulatory requirements and provided such manner of communications is
reasonably available to the Trustee) to each Beneficiary at its address as
shown on the books of Acquisitionco. Newmont agrees not to communicate with
holders of Newmont Shares with respect to such written materials otherwise than
by mail unless such method of communication is also reasonably available to the
Trustee for communication with the Beneficiaries. Acquisitionco shall provide
or cause to be provided to the Trustee for purposes of communication, on a
timely basis and without charge or other expense:
(a) a current List; and
(b) upon the request of the Trustee, mailing labels to enable the Trustee
to carry out its duties under this agreement.
4.10 TERMINATION OF VOTING RIGHTS
All of the rights of a Beneficiary with respect to the Beneficiary Votes
exercisable in respect of the Exchangeable Shares held by such Beneficiary,
including the right to instruct the Trustee as to the voting of or to vote
personally such Beneficiary Votes, shall be deemed to be surrendered by the
Beneficiary to Newmont or Callco, as the case may be, and such Beneficiary
Votes and the Voting Rights represented thereby shall cease immediately upon
(i) the delivery by such holder to the Trustee of the certificates representing
such Exchangeable Shares in connection with the occurrence of the automatic
exchange of Exchangeable Shares for Newmont Shares, as specified in Article 5
(unless Newmont shall not have delivered the requisite Newmont Shares issuable
in exchange therefor to the Trustee pending delivery to the Beneficiaries), or
(ii) the retraction or redemption of Exchangeable Shares pursuant to (S)6 or 7
of the Share Provisions, or (iii) the effective date of the liquidation,
dissolution or winding-up of Acquisitionco pursuant to (S)5 of the Share
Provisions, or (iv) the purchase of Exchangeable Shares from the holder thereof
by Callco or Newmont pursuant to the exercise by Callco or Newmont of the
Retraction Call Right, the Redemption Call Right or the Liquidation Call Right.
4.11 DISCLOSURE OF INTEREST IN EXCHANGEABLE SHARES
The Trustee and/or Acquisitionco shall be entitled to require any
Beneficiary or any person who the Trustee and/or Acquisitionco know or have
reasonable cause to believe to hold any interest whatsoever in an Exchangeable
Share to confirm that fact or to give such details as to whom has an interest
in such Exchangeable Share as would be required (if the Exchangeable Shares
were a class of "equity shares" of Acquisitionco) under (S)101 of the
SECURITIES ACT (Ontario), as amended from time to time, or as would be required
under the articles of Newmont or any laws or regulations, or pursuant to the
rules or regulations of any Agency, if the Exchangeable Shares were Newmont
Shares. If a Beneficiary does not provide the information required to be
provided by such Beneficiary pursuant to this (S)4.11, the board of directors
of Newmont may take any action permitted under the articles of Newmont or any
laws or regulations, or pursuant to the rules or regulations of any Agency,
with respect to the Voting Rights relating to the Exchangeable Shares held by
such Beneficiary.
ARTICLE 5
AUTOMATIC EXCHANGE
5.1 AUTOMATIC EXCHANGE
(1) Newmont hereby agrees with the Trustee as trustee for and on behalf of,
and for the use and benefit of, the Beneficiaries that the Trustee shall have
(i) the Automatic Exchange Right, and (ii) the Automatic Exchange Rights on
Liquidation, all in accordance with the provisions of this agreement. The
Automatic Exchange Right shall represent an agreement on the terms set out
herein between Newmont and the Trustee (acting on behalf of
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the Beneficiaries) that upon the occurrence of an Insolvency Event, Newmont
will purchase from each and every Beneficiary all of the Exchangeable Shares
held by such Beneficiary. The Automatic Exchange Rights on Liquidation shall
represent an agreement on the terms set out herein between Newmont and the
Trustee (acting on behalf of the Beneficiaries) that Newmont will purchase from
each and every Beneficiary all of the outstanding Exchangeable Shares held by
such Beneficiary on the fifth business day prior to the Liquidation Event
Effective Date. Newmont hereby acknowledges receipt from the Trustee as trustee
for and on behalf of the Beneficiaries of good and valuable consideration (and
the adequacy thereof) for agreeing with the Trustee (acting on behalf of the
Beneficiaries) to be bound by the Automatic Exchange Right and the Automatic
Exchange Rights on Liquidation.
(2) During the term of the Trust and subject to the terms and conditions of
this agreement, the Trustee shall possess and be vested with full legal
ownership of the Automatic Exchange Right and the Automatic Exchange Rights on
Liquidation and shall be entitled to exercise all of the rights and powers of
an owner with respect to the Automatic Exchange Right and the Automatic
Exchange Rights on Liquidation, provided that the Trustee shall:
(a) hold the Automatic Exchange Right and the Automatic Exchange Rights
on Liquidation and the legal title thereto as trustee solely for the use and
benefit of the Beneficiaries in accordance with the provisions of this
agreement; and
(b) except as specifically authorized by this agreement, have no power or
authority to exercise or otherwise deal in or with the Automatic Exchange
Right or the Automatic Exchange Rights on Liquidation, and the Trustee shall
not exercise any such rights for any purpose other than the purposes for
which the Trust is created pursuant to this agreement.
(3) The obligations of Newmont to issue Newmont Shares pursuant to the
Automatic Exchange Right or the Automatic Exchange Rights on Liquidation are
subject to all applicable laws and regulatory or stock exchange requirements.
5.2 LEGENDED SHARE CERTIFICATES
Acquisitionco will cause each certificate representing Exchangeable Shares
to bear an appropriate legend notifying the Beneficiaries of the Automatic
Exchange Right and the Automatic Exchange Rights on Liquidation.
5.3 AUTOMATIC EXCHANGE RIGHT
(1) The purchase price payable by Newmont for each Exchangeable Share to be
purchased by Newmont under the Automatic Exchange Right shall be an amount per
share equal to (i) the Current Market Price of a Newmont Share on the last
business day prior to the day of closing of the purchase and sale of such
Exchangeable Share under the Automatic Exchange Right, which shall be satisfied
in full by Newmont causing to be delivered to such holder one Newmont Share,
plus (ii) to the extent not paid by Acquisitionco on the designated payment
date therefor, an additional amount equal to and in full satisfaction of the
full amount of all declared and unpaid dividends on each such Exchangeable
Share held by such holder on any dividend record date which occurred prior to
the closing of the purchase and sale. In connection with each exercise of the
Automatic Exchange Right, Newmont shall provide to the Trustee an Officer's
Certificate setting forth the calculation of the purchase price for each
Exchangeable Share. The purchase price for each such Exchangeable Share so
purchased may be satisfied only by Newmont issuing and delivering or causing to
be delivered to the Trustee, on behalf of the relevant Beneficiary, one Newmont
Share and on the applicable payment date a cheque for the balance, if any, of
the purchase price, in each case less any amounts withheld pursuant to (S)5.9.
Upon payment by Newmont of such purchase price the relevant Beneficiary shall
cease to have any right to be paid by Acquisitionco any amount in respect of
declared and unpaid dividends on each such Exchangeable Share.
(2) Immediately upon the occurrence of an Insolvency Event, the closing of
the transaction of purchase and sale contemplated by the Automatic Exchange
Right shall be deemed to have occurred, and each Beneficiary shall be deemed to
have transferred to Newmont all of the Beneficiary's right, title and interest
in and to such
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Beneficiary's Exchangeable Shares free and clear of any lien, claim or
encumbrance and the related interest in the Trust Estate, any right of each
such Beneficiary to receive declared and unpaid dividends from Acquisitionco
shall be deemed to be satisfied and discharged and each such Beneficiary shall
cease to be a holder of such Exchangeable Shares and Newmont shall issue to the
Beneficiary the Newmont Shares issuable upon the automatic exchange of
Exchangeable Shares for Newmont Shares and on the applicable payment date shall
deliver to the Trustee for delivery to the Beneficiary a cheque for the
balance, if any, of the purchase price for such Exchangeable Shares, without
interest, in each case less any amounts withheld pursuant to (S)5.9.
Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
Shares, the Beneficiary shall become the holder of the Newmont Shares issued
pursuant to the automatic exchange of such Beneficiary's Exchangeable Shares
for Newmont Shares and the certificates held by the Beneficiary previously
representing the Exchangeable Shares exchanged by the Beneficiary with Newmont
pursuant to such automatic exchange shall thereafter be deemed to represent
Newmont Shares issued to the Beneficiary by Newmont pursuant to such automatic
exchange. Upon the request of a Beneficiary and the surrender by the
Beneficiary of Exchangeable Share certificates deemed to represent Newmont
Shares, duly endorsed in blank and accompanied by such instruments of transfer
as Newmont may reasonably require, Newmont shall deliver or cause to be
delivered to the Beneficiary certificates representing the Newmont Shares of
which the Beneficiary is the holder.
5.4 FAILURE TO RETRACT
Upon the occurrence of an event referred to in paragraph (iv) of the
definition of Insolvency Event, Acquisitionco hereby agrees with the Trustee
and in favour of the Beneficiary promptly to forward or cause to be forwarded
to the Trustee all relevant materials delivered by the Beneficiary to
Acquisitionco or to the transfer agent of the Exchangeable Shares (including a
copy of the retraction request delivered pursuant to (S)6(1) of the Share
Provisions) in connection with such proposed redemption of the Retracted Shares.
5.5 NOTICE OF INSOLVENCY EVENT
As soon as practicable following the occurrence of an Insolvency Event or
any event that with the giving of notice or the passage of time or both would
be an Insolvency Event, Acquisitionco and Newmont shall give written notice
thereof to the Trustee. As soon as practicable following the receipt of notice
from Acquisitionco and Newmont of the occurrence of an Insolvency Event, or
upon the Trustee becoming aware of an Insolvency Event, the Trustee will mail
to each Beneficiary, at the expense of Newmont (such funds to be received in
advance), a notice of such Insolvency Event in the form provided by Newmont,
which notice shall contain a brief statement of the rights of the Beneficiaries
with respect to the Automatic Exchange Right.
5.6 LISTING OF NEWMONT SHARES
Newmont covenants that if any Newmont Shares to be issued and delivered
pursuant to the Automatic Exchange Right or the Automatic Exchange Rights on
Liquidation require registration or qualification with or approval of or the
filing of any document, including any prospectus or similar document, or the
taking of any proceeding with or the obtaining of any order, ruling or consent
from any Agency under any United States or Canadian federal, provincial or
territorial law or regulation or pursuant to the rules and regulations of any
Agency or the fulfillment of any other United States or Canadian legal
requirement before such shares may be issued and delivered by Newmont to the
initial holder thereof or in order that such shares may be freely traded
thereafter (other than any restrictions of general application on transfer by
reason of a holder being a "control person" or the equivalent of Newmont for
purposes of Canadian securities Law or any United States equivalent), Newmont
will expeditiously and in good faith take all such actions and do all such
things as are reasonably necessary or desirable to cause such Newmont Shares to
be and remain duly registered, qualified or approved. Newmont will
expeditiously and in good faith take all such actions and do all such things as
are reasonably necessary or desirable to cause all Newmont Shares to be
delivered pursuant to the Automatic Exchange Right or the Automatic Exchange
Rights on Liquidation to be listed, quoted or posted for trading on all stock
exchanges and quotation systems on which issued Newmont Shares have been listed
by Newmont and remain listed and are quoted or posted for trading at such time.
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5.7 NEWMONT SHARES
Newmont hereby represents, warrants and covenants that the Newmont Shares
issuable as described herein will be duly authorized and validly issued as
fully paid and shall be free and clear of any lien, claim or encumbrance.
5.8 AUTOMATIC EXCHANGE ON LIQUIDATION OF NEWMONT
(1) Newmont will give the Trustee written notice of each of the following
events at the time set forth below:
(a) in the event of any determination by the board of directors of
Newmont to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to Newmont or to effect any other distribution of
assets of Newmont among its shareholders for the purpose of winding up its
affairs, at least 60 days prior to the proposed effective date of such
liquidation, dissolution, winding-up or other distribution; and
(b) as soon as practicable following the earlier of (A) receipt by
Newmont of notice of, and (B) Newmont otherwise becoming aware of any
instituted claim, suit, petition or other proceedings with respect to the
involuntary liquidation, dissolution or winding-up of Newmont or to effect
any other distribution of assets of Newmont among its shareholders for the
purpose of winding up its affairs, in each case where Newmont has failed to
contest in good faith any such proceeding commenced in respect of Newmont
within 30 days of becoming aware thereof.
(2) As soon as practicable following receipt by the Trustee from Newmont of
notice of any event (a "LIQUIDATION EVENT") contemplated by (S)5.8(1)(a) or
(S)5.8(1)(b), the Trustee will give notice thereof to the Beneficiaries. Such
notice shall be provided to the Trustee by Newmont and shall include a brief
description of the automatic exchange of Exchangeable Shares for Newmont Shares
provided for in (S)5.8(3).
(3) In order that the Beneficiaries will be able to participate on a pro
rata basis with the holders of Newmont Shares in the distribution of assets of
Newmont in connection with a Liquidation Event, on the fifth business day prior
to the effective date (the "LIQUIDATION EVENT EFFECTIVE DATE") of a Liquidation
Event, all of the then outstanding Exchangeable Shares shall be automatically
exchanged for Newmont Shares. To effect such automatic exchange, Newmont shall
purchase on the fifth business day prior to the Liquidation Event Effective
Date each Exchangeable Share then outstanding and held by Beneficiaries, and
each Beneficiary shall sell the Exchangeable Shares held by it at such time,
free and clear of any lien, claim or encumbrance, for a purchase price per
share equal to (i) the Current Market Price of a Newmont Share on the fifth
business day prior to the Liquidation Event Effective Date, which shall be
satisfied in full by Newmont issuing to the Beneficiary one Newmont Share, plus
(ii) to the extent not paid by Acquisitionco on the designated payment date
therefor, an additional amount equal to and in full satisfaction of the full
amount of all declared and unpaid dividends on each such Exchangeable Share
held by such holder on any dividend record date which occurred prior to the
date of the exchange. Newmont shall provide the Trustee with an Officer's
Certificate in connection with each automatic exchange setting forth the
calculation of the purchase price for each Exchangeable Share.
(4) On the fifth business day prior to the Liquidation Event Effective Date,
the closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for Newmont Shares shall be deemed to
have occurred, and each Beneficiary shall be deemed to have transferred to
Newmont all of the Beneficiary's right, title and interest in and to such
Beneficiary's Exchangeable Shares free and clear of any lien, claim or
encumbrance and the related interest in the Trust Estate, any right of each
such Beneficiary to receive declared and unpaid dividends from Acquisitionco
shall be deemed to be satisfied and discharged, and each such Beneficiary shall
cease to be a holder of such Exchangeable Shares and Newmont shall issue to the
Beneficiary the Newmont Shares issuable upon the automatic exchange of
Exchangeable Shares for Newmont Shares and on the applicable payment date shall
deliver to the Trustee for delivery to the Beneficiary a cheque for the balance,
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if any, of the purchase price for such Exchangeable Shares, without interest,
in each case less any amounts withheld pursuant to (S)5.9. Concurrently with
such Beneficiary ceasing to be a holder of Exchangeable Shares, the Beneficiary
shall become the holder of the Newmont Shares issued pursuant to the automatic
exchange of such Beneficiary's Exchangeable Shares for Newmont Shares and the
certificates held by the Beneficiary previously representing the Exchangeable
Shares exchanged by the Beneficiary with Newmont pursuant to such automatic
exchange shall thereafter be deemed to represent Newmont Shares issued to the
Beneficiary by Newmont pursuant to such automatic exchange. Upon the request of
a Beneficiary and the surrender by the Beneficiary of Exchangeable Share
certificates deemed to represent Newmont Shares, duly endorsed in blank and
accompanied by such instruments of transfer as Newmont may reasonably require,
Newmont shall deliver or cause to be delivered to the Beneficiary certificates
representing the Newmont Shares of which the Beneficiary is the holder.
5.9 WITHHOLDING RIGHTS
Newmont, Acquisitionco and the Trustee shall be entitled to deduct and
withhold from any consideration otherwise payable under this agreement to any
holder of Exchangeable Shares or Newmont Shares such amounts as Newmont,
Acquisitionco or the Trustee is required to deduct and withhold with respect to
such payment under the INCOME TAX ACT (Canada) or United States tax Laws or any
provision of provincial, state, local or foreign tax Law, in each case as
amended or succeeded. The Trustee may act and rely on the advice of counsel
with respect to such matters. To the extent that amounts are so withheld, such
withheld amounts shall be treated for all purposes as having been paid to the
holder of the shares in respect of which such deduction and withholding was
made, provided that such withheld amounts are actually remitted to the
appropriate taxing Agency. To the extent that the amount so required to be
deducted or withheld from any payment to a holder exceeds the cash portion of
the consideration otherwise payable to the holder, Newmont, Acquisitionco and
the Trustee are hereby authorized to sell or otherwise dispose of such portion
of the consideration as is necessary to provide sufficient funds to Newmont,
Acquisitionco or the Trustee, as the case may be, to enable it to comply with
such deduction or withholding requirement and Newmont, Acquisitionco or the
Trustee shall notify the holder thereof and remit to such holder any unapplied
balance of the net proceeds of such sale. Newmont represents and warrants that,
based upon facts currently known to it, it has no current intention, as at the
date of this agreement, to deduct or withhold from any dividend paid to holders
of Exchangeable Shares any amounts under the United States tax laws.
ARTICLE 6
RESTRICTIONS ON ISSUE OF NEWMONT SPECIAL VOTING SHARES
6.1 ISSUE OF ADDITIONAL SHARES
During the term of this agreement, Newmont will not, without the consent of
the holders at the relevant time of Exchangeable Shares, given in accordance
with (S)10(2) of the Share Provisions, issue any additional Newmont Special
Voting Shares.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 POWERS AND DUTIES OF THE TRUSTEE
(1) The rights, powers, duties and authorities of the Trustee under this
agreement, in its capacity as Trustee of the Trust, shall include:
(a) receipt and deposit of the Newmont Special Voting Share from Newmont
as Trustee for and on behalf of the Beneficiaries in accordance with the
provisions of this agreement;
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(b) granting proxies and distributing materials to Beneficiaries as
provided in this agreement;
(c) voting the Beneficiary Votes in accordance with the provisions of
this agreement;
(d) receiving the grant of the Automatic Exchange Right and the Automatic
Exchange Rights on Liquidation from Newmont as Trustee for and on behalf of
the Beneficiaries in accordance with the provisions of this agreement;
(e) enforcing the benefit of the Automatic Exchange Right and the
Automatic Exchange Rights on Liquidation, in each case in accordance with
the provisions of this agreement, and in connection therewith receiving from
Beneficiaries Exchangeable Shares and other requisite documents and
distributing to such Beneficiaries Newmont Shares and cheques, if any, to
which such Beneficiaries are entitled pursuant to the Automatic Exchange
Right or the Automatic Exchange Rights on Liquidation, as the case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the Trust
Estate as provided in this agreement;
(h) taking action at the direction of a Beneficiary or Beneficiaries to
enforce the obligations of Newmont and Acquisitionco under this agreement;
and
(i) taking such other actions and doing such other things as are
specifically provided in this agreement to be carried out by the Trustee
whether alone, jointly or in the alternative.
(2) In the exercise of such rights, powers, duties and authorities the
Trustee shall have (and is granted) such incidental and additional rights,
powers, duties and authority not in conflict with any of the provisions of this
agreement as the Trustee, acting in good faith and in the reasonable exercise
of its discretion, may deem necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of such discretionary rights, powers, duties
and authorities by the Trustee shall be final, conclusive and binding upon all
persons.
(3) The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith and with a view to the best
interests of the Beneficiaries and shall exercise the care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.
(4) The Trustee shall not be bound to give notice or do or take any act,
action or proceeding by virtue of the powers conferred on it hereby unless and
until it shall be specifically required to do so under the terms hereof; nor
shall the Trustee be required to take any notice of, or to do, or to take any
act, action or proceeding as a result of any default or breach of any provision
hereunder, unless and until notified in writing of such default or breach,
which notices shall distinctly specify the default or breach desired to be
brought to the attention of the Trustee, and in the absence of such notice the
Trustee may for all purposes of this agreement conclusively assume that no
default or breach has been made in the observance or performance of any of the
representations, warranties, covenants, agreements or conditions contained
herein.
7.2 NO CONFLICT OF INTEREST
The Trustee represents to Newmont and Acquisitionco that at the date of
execution and delivery of this agreement there exists no material conflict of
interest in the role of the Trustee as a fiduciary hereunder and the role of
the Trustee in any other capacity. The Trustee shall, within 90 days after it
becomes aware that such material conflict of interest exists, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in Article 10. If, notwithstanding the foregoing provisions of this
(S)7.2, the Trustee has such a material conflict of interest, the validity and
enforceability of this agreement shall not be affected in any manner whatsoever
by reason only of the existence of such material conflict of interest. If the
Trustee contravenes the foregoing provisions of this (S)7.2, any interested
party may apply to the Superior Court of Justice (Ontario) for an order that
the Trustee be replaced as Trustee hereunder.
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7.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
(1) Each of Newmont and Acquisitionco irrevocably authorizes the Trustee,
from time to time, to:
(a) consult, communicate and otherwise deal with the respective
registrars and transfer agents, and with any such subsequent registrar or
transfer agent, of the Exchangeable Shares and Newmont Shares; and
(b) requisition, from time to time, (i) from any such registrar or
transfer agent any information readily available from the records maintained
by it which the Trustee may reasonably require for the discharge of its
duties and responsibilities under this agreement and (ii) from the transfer
agent of Newmont Shares, and any subsequent transfer agent of such shares,
the share certificates issuable upon the exercise from time to time of the
Automatic Exchange Right and pursuant to the Automatic Exchange Rights on
Liquidation.
(2) Newmont and Acquisitionco shall irrevocably authorize their respective
registrars and transfer agents to comply with all such requests. Newmont
covenants that it will supply its transfer agent with duly executed share
certificates for the purpose of completing the exercise from time to time of
the Automatic Exchange Right and the Automatic Exchange Rights on Liquidation,
in each case pursuant to Article 5.
7.4 BOOKS AND RECORDS
The Trustee shall keep available for inspection by Newmont and Acquisitionco
at the Trustee's principal office in Toronto correct and complete books and
records of account relating to the Trust created by this agreement, including
all relevant data relating to mailings and instructions to and from
Beneficiaries and all transactions pursuant to the Automatic Exchange Right and
the Automatic Exchange Rights on Liquidation. On or before [JANUARY 15], 2003,
and on or before January 15th in every year thereafter, so long as the Newmont
Special Voting Share is registered in the name of the Trustee, the Trustee
shall transmit to Newmont and Acquisitionco a brief report, dated as of the
preceding December 31st, with respect to:
(a) the property and funds comprising the Trust Estate as of that date;
(b) the number of exercises of the Automatic Exchange Right, if any, and
the aggregate number of Exchangeable Shares received by the Trustee on
behalf of Beneficiaries in consideration of the issuance by Newmont of
Newmont Shares in connection with the Automatic Exchange Right, during the
calendar year ended on such December 31st; and
(c) any action taken by the Trustee in the performance of its duties
under this agreement which it had not previously reported.
7.5 INCOME TAX RETURNS AND REPORTS
The Trustee shall, to the extent necessary, prepare and file, or cause to be
prepared and filed, on behalf of the Trust appropriate United States and
Canadian income tax returns and any other returns or reports as may be required
by applicable law or pursuant to the rules and regulations of any other Agency,
including any securities exchange or other trading system through which the
Exchangeable Shares are traded. In connection therewith, the Trustee may obtain
the advice and assistance of such experts or advisors as the Trustee considers
necessary or advisable (who may be experts or advisors to Newmont or
Acquisitionco). If requested by the Trustee, Newmont or Acquisitionco shall
retain qualified experts or advisors for the purpose of providing such tax
advice or assistance.
7.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE
(1) The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this agreement at the request, order or direction
of any Beneficiary upon such Beneficiary furnishing to the Trustee
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reasonable funding, security or indemnity against the costs, expenses and
liabilities which may be incurred by the Trustee therein or thereby, provided
that no Beneficiary shall be obligated to furnish to the Trustee any such
funding, security or indemnity in connection with the exercise by the Trustee
of any of its rights, duties, powers and authorities with respect to the
Newmont Special Voting Share pursuant to Article 4, subject to (S)7.15, and
with respect to the Automatic Exchange Right and the Automatic Exchange Rights
on Liquidation pursuant to Article 5.
(2) None of the provisions contained in this agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties, or authorities unless
funded, given security and indemnified as aforesaid.
7.7 ACTION OF BENEFICIARIES
No Beneficiary shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this agreement for the
purpose of enforcing any of its rights or for the execution of any trust or
power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
funding, security or indemnity referred to in (S)7.6 and the Trustee shall have
failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in any court
of competent jurisdiction such as the Trustee might have taken; it being
understood and intended that no one or more Beneficiaries shall have any right
in any manner whatsoever to affect, disturb or prejudice the rights hereby
created by any such action, or to enforce any right hereunder or the Voting
Rights, the Automatic Exchange Right or the Automatic Exchange Rights on
Liquidation except subject to the conditions and in the manner herein provided,
and that all powers and trusts hereunder shall be exercised and all proceedings
at law shall be instituted, had and maintained by the Trustee, except only as
herein provided, and in any event for the equal benefit of all Beneficiaries.
7.8 RELIANCE UPON DECLARATIONS
The Trustee shall not be considered to be in contravention of any of its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon statutory declarations, certificates, opinions or
reports furnished pursuant to the provisions hereof or required by the Trustee
to be furnished to it in the exercise of its rights, powers, duties and
authorities hereunder if such statutory declarations, certificates, opinions or
reports comply with the provisions of (S)7.9, if applicable, and with any other
applicable provisions of this agreement.
7.9 EVIDENCE AND AUTHORITY TO TRUSTEE
(1) Newmont and/or Acquisitionco shall furnish to the Trustee evidence of
compliance with the conditions provided for in this agreement relating to any
action or step required or permitted to be taken by Newmont and/or
Acquisitionco or the Trustee under this agreement or as a result of any
obligation imposed under this agreement, including in respect of the Voting
Rights or the Automatic Exchange Right or the Automatic Exchange Rights on
Liquidation and the taking of any other action to be taken by the Trustee at
the request of or on the application of Newmont and/or Acquisitionco promptly
if and when:
(a) such evidence is required by any other section of this agreement to
be furnished to the Trustee in accordance with the terms of this (S)7.9; or
(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this agreement, gives Newmont and/or Acquisitionco written
notice requiring it to furnish such evidence in relation to any particular
action or obligation specified in such notice.
(2) Such evidence shall consist of an Officer's Certificate of Newmont
and/or Acquisitionco or a statutory declaration or a certificate made by
persons entitled to sign an Officer's Certificate stating that any such
condition has been complied with in accordance with the terms of this agreement.
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(3) Whenever such evidence relates to a matter other than the Voting Rights
or the Automatic Exchange Right or the Automatic Exchange Rights on Liquidation
or the taking of any other action to be taken by the Trustee at the request or
on the application of Newmont and/or Acquisitionco, and except as otherwise
specifically provided herein, such evidence may consist of a report or opinion
of any solicitor, attorney, auditor, accountant, appraiser, valuer or other
expert or any other person whose qualifications give authority to a statement
made by him, provided that if such report or opinion is furnished by a
director, officer or employee of Newmont and/or Acquisitionco it shall be in
the form of an Officer's Certificate or a statutory declaration.
(4) Each statutory declaration, Officer's Certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition provided
for in this agreement shall include a statement by the person giving the
evidence:
(a) declaring that he has read and understands the provisions of this
agreement relating to the condition in question;
(b) describing the nature and scope of the examination or investigation
upon which he based the statutory declaration, certificate, statement or
opinion; and
(c) declaring that he has made such examination or investigation as he
believes is necessary to enable him to make the statements or give the
opinions contained or expressed therein.
7.10 EXPERTS, ADVISERS AND AGENTS
The Trustee may:
(a) in relation to these presents act and rely on the opinion or advice
of or information obtained from any solicitor, attorney, auditor,
accountant, appraiser, valuer or other expert, whether retained by the
Trustee or by Newmont and/or Acquisitionco or otherwise, and may retain or
employ such assistants as may be necessary to the proper discharge of its
powers and duties and determination of its rights hereunder and may pay
proper and reasonable compensation for all such legal and other advice or
assistance as aforesaid;
(b) employ such agents and other assistants as it may reasonably require
for the proper determination and discharge of its powers and duties
hereunder; and
(c) pay reasonable remuneration for all services performed for it (and
shall be entitled to receive reasonable remuneration for all services
performed by it) in the discharge of the trusts hereof and compensation for
all reasonable disbursements, costs and expenses made or incurred by it in
the discharge of its duties hereunder and in the management of the Trust.
7.11 INVESTMENT OF MONEYS HELD BY TRUSTEE
Unless otherwise provided in this agreement, any moneys held by or on behalf
of the Trustee which under the terms of this agreement may or ought to be
invested or which may be on deposit with the Trustee or which may be in the
hands of the Trustee shall, upon the receipt by the Trustee of the written
direction of Acquisitionco, be invested or reinvested in the name or under the
control of the Trustee in securities in which, under the laws of the Province
of Ontario, trustees are authorized to invest trust moneys, provided that such
securities are stated to mature within two years after their purchase by the
Trustee, or in Authorized Investments. Any direction of Acquisitionco to the
Trustee as to investment or reinvestment of funds shall be in writing and shall
be provided to the Trustee no later than 9:00 a.m. (local time) or if received
on a non-business day, shall be deemed to have been given prior to 9:00 a.m.
(local time) on the immediately following business day. If no such direction is
received, the Trustee shall not have any obligation to invest the monies and
pending receipt of such a direction all interest or other income and such
moneys may be deposited in the name of the Trustee in any chartered bank in
Canada or, with the consent of Acquisitionco, in the deposit department of the
Trustee or any other specified loan or trust company authorized to accept
deposits under the laws of Canada or any province thereof at the rate of
interest then current on similar deposits. The Trustee shall not be held liable
for any losses incurred in the investment of any funds as herein provided.
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7.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security in respect of
the execution of the trusts, rights, duties, powers and authorities of this
agreement or otherwise in respect of the premises.
7.13 TRUSTEE NOT BOUND TO ACT ON REQUEST
Except as in this agreement otherwise specifically provided, the Trustee
shall not be bound to act in accordance with any direction or request of
Newmont and/or Acquisitionco or of the directors thereof until a duly
authenticated copy of the instrument or resolution containing such direction or
request shall have been delivered to the Trustee, and the Trustee shall be
empowered to act upon any such copy purporting to be authenticated and believed
by the Trustee to be genuine.
7.14 AUTHORITY TO CARRY ON BUSINESS
The Trustee represents to Newmont and Acquisitionco that at the date of
execution and delivery by it of this agreement it is authorized to carry on the
business of a trust company in each of the provinces of Canada but if,
notwithstanding the provisions of this (S)7.14, it ceases to be so authorized
to carry on business, the validity and enforceability of this agreement and the
Voting Rights, the Automatic Exchange Right and the Automatic Exchange Rights
on Liquidation shall not be affected in any manner whatsoever by reason only of
such event but the Trustee shall, within 90 days after ceasing to be authorized
to carry on the business of a trust company in any province of Canada, either
become so authorized or resign in the manner and with the effect specified in
Article 10.
7.15 CONFLICTING CLAIMS
(1) If conflicting claims or demands are made or asserted with respect to
any interest of any Beneficiary in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, in its sole
discretion, to refuse to recognize or to comply with any such claims or
demands. In so refusing, the Trustee may elect not to exercise any Voting
Rights, Automatic Exchange Right or Automatic Exchange Rights on Liquidation
subject to such conflicting claims or demands and, in so doing, the Trustee
shall not be or become liable to any person on account of such election or its
failure or refusal to comply with any such conflicting claims or demands. The
Trustee shall be entitled to continue to refrain from acting and to refuse to
act until:
(a) the rights of all adverse claimants with respect to the Voting
Rights, Automatic Exchange Right or Automatic Exchange Rights on Liquidation
subject to such conflicting claims or demands have been adjudicated by a
final judgement of a court of competent jurisdiction; or
(b) all differences with respect to the Voting Rights, Automatic Exchange
Right or Automatic Exchange Rights on Liquidation subject to such
conflicting claims or demands have been conclusively settled by a valid
written agreement binding on all such adverse claimants, and the Trustee
shall have been furnished with an executed copy of such agreement certified
to be in full force and effect.
(2) If the Trustee elects to recognize any claim or comply with any demand
made by any such adverse claimant, it may in its discretion require such
claimant to furnish such surety bond or other security satisfactory to the
Trustee as it shall deem appropriate to fully indemnify it as between all
conflicting claims or demands.
7.16 ACCEPTANCE OF TRUST
The Trustee hereby accepts the Trust created and provided for, by and in
this agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various persons who shall from time to time
be Beneficiaries, subject to all the terms and conditions herein set forth.
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ARTICLE 8
COMPENSATION
8.1 FEES AND EXPENSES OF THE TRUSTEE
Newmont and Acquisitionco jointly and severally agree to pay the Trustee
reasonable compensation for all of the services rendered by it under this
agreement and will reimburse the Trustee for all reasonable expenses
(including, but not limited to, taxes other than taxes based on the net income
or capital of the Trustee, fees paid to legal counsel and other experts and
advisors and travel expenses) and disbursements, including the cost and expense
of any suit or litigation of any character and any proceedings before any
governmental Agency, reasonably incurred by the Trustee in connection with its
duties under this agreement; provided that Newmont and Acquisitionco shall have
no obligation to reimburse the Trustee for any expenses or disbursements paid,
incurred or suffered by the Trustee in any suit or litigation or any such
proceedings in which the Trustee is determined to have acted in bad faith or
with fraud, negligence, recklessness or wilful misconduct.
ARTICLE 9
INDEMNIFICATION AND LIMITATION OF LIABILITY
9.1 INDEMNIFICATION OF THE TRUSTEE
(1) Newmont and Acquisitionco jointly and severally agree to indemnify and
hold harmless the Trustee and each of its directors, officers, employees and
agents appointed and acting in accordance with this agreement (collectively,
the "INDEMNIFIED PARTIES") against all claims, losses, damages, reasonable
costs, penalties, fines and reasonable expenses (including reasonable expenses
of the Trustee's legal counsel) which, without fraud, negligence, recklessness,
wilful misconduct or bad faith on the part of such Indemnified Party, may be
paid, incurred or suffered by the Indemnified Party by reason or as a result of
the Trustee's acceptance or administration of the Trust, its compliance with
its duties set forth in this agreement, or any written or oral instruction
delivered to the Trustee by Newmont or Acquisitionco pursuant hereto.
(2) In no case shall Newmont or Acquisitionco be liable under this indemnity
for any claim against any of the Indemnified Parties unless Newmont and
Acquisitionco shall be notified by the Trustee of the written assertion of a
claim or of any action commenced against the Indemnified Parties, promptly
after any of the Indemnified Parties shall have received any such written
assertion of a claim or shall have been served with a summons or other first
legal process giving information as to the nature and basis of the claim.
Subject to (ii) below, Newmont and Acquisitionco shall be entitled to
participate at their own expense in the defence and, if Newmont and
Acquisitionco so elect at any time after receipt of such notice, either of them
may assume the defence of any suit brought to enforce any such claim. The
Trustee shall have the right to employ separate counsel in any such suit and
participate in the defence thereof, but the fees and expenses of such counsel
shall be at the expense of the Trustee unless: (i) the employment of such
counsel has been authorized by Newmont or Acquisitionco; or (ii) the named
parties to any such suit include both the Trustee and Newmont or Acquisitionco
and the Trustee shall have been advised by counsel acceptable to Newmont or
Acquisitionco that there may be one or more legal defences available to the
Trustee that are different from or in addition to those available to Newmont or
Acquisitionco and that, in the judgement of such counsel, would present a
conflict of interest were a joint representation to be undertaken (in which
case Newmont and Acquisitionco shall not have the right to assume the defence
of such suit on behalf of the Trustee but shall be liable to pay the reasonable
fees and expenses of counsel for the Trustee). This indemnity shall survive the
termination of the Trust and the resignation or removal of the Trustee.
9.2 LIMITATION OF LIABILITY
The Trustee shall not be held liable for any loss which may occur by reason
of depreciation of the value of any part of the Trust Estate or any loss
incurred on any investment of funds pursuant to this agreement, except to the
extent that such loss is attributable to the fraud, negligence, recklessness,
wilful misconduct or bad faith on the part of the Trustee.
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ARTICLE 10
CHANGE OF TRUSTEE
10.1 RESIGNATION
The Trustee, or any trustee hereafter appointed, may at any time resign by
giving written notice of such resignation to Newmont and Acquisitionco
specifying the date on which it desires to resign, provided that such notice
shall not be given less than thirty (30) days before such desired resignation
date unless Newmont and Acquisitionco otherwise agree and provided further that
such resignation shall not take effect until the date of the appointment of a
successor trustee and the acceptance of such appointment by the successor
trustee. Upon receiving such notice of resignation, Newmont and Acquisitionco
shall promptly appoint a successor trustee, which shall be a corporation
organized and existing under the laws of Canada and authorized to carry on the
business of a trust company in all provinces of Canada, by written instrument
in duplicate, one copy of which shall be delivered to the resigning trustee and
one copy to the successor trustee. Failing the appointment and acceptance of a
successor trustee, a successor trustee may be appointed by order of a court of
competent jurisdiction upon application of one or more of the parties to this
agreement. If the retiring trustee is the party initiating an application for
the appointment of a successor trustee by order of a court of competent
jurisdiction, Newmont and Acquisitionco shall be jointly and severally liable
to reimburse the retiring trustee for its legal costs and expenses in
connection with same.
10.2 REMOVAL
The Trustee, or any trustee hereafter appointed, may (provided a successor
trustee is appointed) be removed at any time on not less than 30 days' prior
notice by written instrument executed by Newmont and Acquisitionco, in
duplicate, one copy of which shall be delivered to the trustee so removed and
one copy to the successor trustee.
10.3 SUCCESSOR TRUSTEE
Any successor trustee appointed as provided under this agreement shall
execute, acknowledge and deliver to Newmont and Acquisitionco and to its
predecessor trustee an instrument accepting such appointment. Thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, duties and obligations of its
predecessor under this agreement, with the like effect as if originally named
as trustee in this agreement. However, on the written request of Newmont and
Acquisitionco or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due to it pursuant to the provisions of this
agreement, execute and deliver an instrument transferring to such successor
trustee all the rights and powers of the trustee so ceasing to act. Upon the
request of any such successor trustee, Newmont, Acquisitionco and such
predecessor trustee shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor trustee all
such rights and powers.
10.4 NOTICE OF SUCCESSOR TRUSTEE
Upon acceptance of appointment by a successor trustee as provided herein,
Newmont and Acquisitionco shall cause to be mailed notice of the succession of
such trustee hereunder to each Beneficiary specified in a List. If Newmont or
Acquisitionco shall fail to cause such notice to be mailed within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of Newmont and Acquisitionco.
ARTICLE 11
NEWMONT SUCCESSORS
11.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
As long as any outstanding Exchangeable Shares are owned by any person other
than Newmont or any of its affiliates, Newmont shall not consummate any
transaction (whether by way of reconstruction, reorganization, consolidation,
arrangement, merger, transfer, sale, lease or otherwise) whereby all or
substantially all of its undertaking, property and assets would become the
property of any other person or, in the case of a merger, of the continuing
corporation resulting therefrom unless, but may do so if:
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(a) such other person or continuing corporation (the "Newmont
Successor"), by operation of law, becomes, without more, bound by the terms
and provisions of this agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction, a trust
agreement supplemental hereto and such other instruments (if any) as are
satisfactory to the Trustee, acting reasonably, and in the opinion of legal
counsel to the Trustee are reasonably necessary or advisable to evidence the
assumption by the Newmont Successor of liability for all moneys payable and
property deliverable hereunder and the covenant of such Newmont Successor to
pay and deliver or cause to be delivered the same and its agreement to
observe and perform all the covenants and obligations of Newmont under this
agreement; and
(b) such transaction shall, to the satisfaction of the Trustee, acting
reasonably, and in the opinion of legal counsel to the Trustee, be upon such
terms and conditions as substantially to preserve and not to impair in any
material respect any of the rights, duties, powers and authorities of the
Trustee or of the Beneficiaries hereunder.
11.2 VESTING OF POWERS IN SUCCESSOR
Whenever the conditions of (S)11.1 have been duly observed and performed,
the Trustee, Newmont Successor and Acquisitionco shall, if required by (S)11.1,
execute and deliver the supplemental trust agreement provided for in Article 12
and thereupon Newmont Successor and such other person that may then be the
issuer of the Newmont Shares shall possess and from time to time may exercise
each and every right and power of Newmont under this agreement in the name of
Newmont or otherwise and any act or proceeding by any provision of this
agreement required to be done or performed by the board of directors of Newmont
or any officers of Newmont may be done and performed with like force and effect
by the directors or officers of such Newmont Successor.
11.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing (i) the amalgamation or
merger of any wholly-owned direct or indirect subsidiary of Newmont with or
into Newmont, (ii) the winding-up, liquidation or dissolution of any
wholly-owned direct or indirect subsidiary of Newmont (other than Acquisitionco
or Callco), provided that all of the assets of such subsidiary are transferred
to Newmont or another wholly-owned direct or indirect subsidiary of Newmont, or
(iii) any other distribution of the assets of any wholly-owned direct or
indirect subsidiary of Newmont (other than Acquisitionco or Callco) among the
shareholders of such subsidiary for the purpose of winding up its affairs, and
any such transactions are expressly permitted by this Article 11.
ARTICLE 12
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
12.1 AMENDMENTS, MODIFICATIONS, ETC.
Subject to (S)12.2, (S)12.4 and (S)14.1, this agreement may not be amended
or modified except by an agreement in writing executed by Newmont,
Acquisitionco and the Trustee and approved by the Beneficiaries in accordance
with (S)10(2) of the Share Provisions.
12.2 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of (S)12.1, the parties to this agreement may
in writing, at any time and from time to time, without the approval of the
Beneficiaries, amend or modify this agreement for the purposes of:
(a) adding to the covenants of any or all parties hereto for the
protection of the Beneficiaries hereunder provided that the board of
directors of each of Acquisitionco and Newmont shall be of the good faith
opinion that such additions will not be prejudicial to the rights or
interests of the Beneficiaries;
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(b) making such amendments or modifications not inconsistent with this
agreement as may be necessary or desirable with respect to matters or
questions which, in the good faith opinion of the board of directors of each
of Newmont and Acquisitionco and in the opinion of the Trustee, having in
mind the best interests of the Beneficiaries, it may be expedient to make,
provided that such boards of directors and the Trustee, acting on the advice
of counsel, shall be of the opinion that such amendments and modifications
will not be prejudicial to the interests of the Beneficiaries; or
(c) making such changes or corrections which, on the advice of counsel to
Newmont, Acquisitionco and the Trustee, are required for the purpose of
curing or correcting any ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error.
12.3 MEETING TO CONSIDER AMENDMENTS
Acquisitionco, at the request of Newmont, shall call a meeting or meetings
of the Beneficiaries for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the by-laws of Acquisitionco, the
Share Provisions and all applicable laws.
12.4 CHANGES IN CAPITAL OF NEWMONT AND ACQUISITIONCO
At all times after the occurrence of any event contemplated pursuant to
(S)2.7 or 2.8 of the Support Agreement or otherwise, as a result of which
either Newmont Shares or the Exchangeable Shares or both are in any way
changed, this agreement shall forthwith be amended and modified as necessary in
order that it shall apply with full force and effect, mutatis mutandis, to all
new securities into which Newmont Shares or the Exchangeable Shares or both are
so changed and the parties hereto shall execute and deliver a supplemental
trust agreement giving effect to and evidencing such necessary amendments and
modifications.
For greater certainty, this agreement, which is entered into in connection
with the issuance of the Exchangeable Shares to shareholders of Franco-Nevada
as part of the acquisition of the shares of Franco-Nevada by Acquisitionco,
shall continue to apply with full force and effect following the amalgamation
of Acquisitionco, Franco-Nevada and others pursuant to the Plan of Agreement.
12.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS
From time to time Acquisitionco (when authorized by a resolution of its
Board of Directors), Newmont (when authorized by a resolution of its board of
directors) and the Trustee may, subject to the provisions of these presents,
and they shall, when so directed by these presents, execute and deliver by
their proper officers, trust agreements or other instruments supplemental
hereto, which thereafter shall form part hereof, for any one or more of the
following purposes:
(a) evidencing the succession of Newmont Successors and the covenants of
and obligations assumed by each such Newmont Successor in accordance with
the provisions of Article 10 and the successors of the Trustee or any
successor trustee in accordance with the provisions of Article 10;
(b) making any additions to, deletions from or alterations of the
provisions of this agreement or the Voting Rights, the Automatic Exchange
Right or the Automatic Exchange Rights on Liquidation which, in the opinion
of the Trustee, will not be prejudicial to the interests of the
Beneficiaries or are, in the opinion of counsel to the Trustee, necessary or
advisable in order to incorporate, reflect or comply with any legislation
the provisions of which apply to Newmont, Acquisitionco, the Trustee or this
agreement; and
(c) for any other purposes not inconsistent with the provisions of this
agreement, including to make or evidence any amendment or modification to
this agreement as contemplated hereby; provided that, in the opinion of the
Trustee, the rights of the Trustee and Beneficiaries will not be prejudiced
thereby.
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ARTICLE 13
TERMINATION
13.1 TERM
The Trust created by this agreement shall continue until the earliest to
occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary;
(b) each of Newmont and Acquisitionco elects in writing to terminate the
Trust and such termination is approved by the Beneficiaries in accordance
with (S)10(2) of the Share Provisions; and
(c) 21 years after the death of the last survivor of the descendants of
His Majesty King George VI of Canada and the United Kingdom of Great Britain
and Northern Ireland living on the date of the creation of the Trust.
13.2 SURVIVAL OF AGREEMENT
This agreement shall survive any termination of the Trust and shall continue
until there are no Exchangeable Shares outstanding held by a Beneficiary;
provided, however, that the provisions of Article 8 and Article 9 shall survive
any such termination of this agreement.
ARTICLE 14
GENERAL
14.1 SEVERABILITY
If any term or other provision of this agreement is invalid, illegal or
incapable of being enforced by any rule or law, or public policy, all other
conditions and provisions of this agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
14.2 ENUREMENT
This agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective successors and assigns and, subject to the terms
hereof, to the benefit of the Beneficiaries.
14.3 NOTICES TO PARTIES
Any notice and other communications required or permitted to be given
pursuant to this agreement shall be sufficiently given if delivered in person
or if sent by facsimile transmission (provided such transmission is recorded as
being transmitted successfully) to the parties at the following addresses:
.
or at such other address as the party to which such notice or other
communication is to be given has last notified the party given the same in the
manner provided in this section, and if not given the same shall be deemed to
have been received on the date of such delivery or sending.
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14.4 NOTICE TO BENEFICIARIES
Any and all notices to be given and any documents to be sent to any
Beneficiaries may be given or sent to the address of such Beneficiary shown on
the register of holders of Exchangeable Shares in any manner permitted by the
by-laws of Acquisitionco from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent in such
manner) at the time specified in such by-laws, the provisions of which by-laws
shall apply mutatis mutandis to notices or documents as aforesaid sent to such
Beneficiaries.
14.5 COUNTERPARTS
This agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and
the same instrument.
14.6 JURISDICTION
This agreement shall be construed and enforced in accordance with the laws
of the Province of Ontario and the laws of Canada applicable therein.
14.7 ATTORNMENT
Each of the Trustee, Newmont and Acquisitionco agrees that any action or
proceeding arising out of or relating to this agreement may be instituted in
the courts of Ontario, waives any objection which it may have now or hereafter
to the venue of any such action or proceeding, irrevocably submits to the
non-exclusive jurisdiction of the said courts in any such action or proceeding,
agrees to be bound by any judgement of the said courts and not to seek, and
hereby waives, any review of the merits of any such judgement by the courts of
any other jurisdiction, and Newmont hereby appoints Acquisitionco at its
registered office in the Province of Ontario as attorney for service of process.
IN WITNESS WHEREOF the parties hereto have caused this agreement to be duly
executed as of the date first above written.
ACQUISITIONCO
By: _________________________________
Name: .
Title: .
[TRUST COMPANY]
By: _________________________________
Name: .
Title: .
NEW NEWMONT
By: _________________________________
Name: .
Title: .
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