<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-B
REGISTRATION OF SECURITIES OF CERTAIN SUCCESSOR ISSUERS
FILED PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Meridian Gold Inc.
(Exact name of registrant as specified in its charter)
Canada 88-0226676
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
5011 Meadowood Way
Reno, Nevada 89502
(Address, including zip code, of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
COMMON SHARES WITHOUT PAR VALUE
(title of each class to be so registered)
Name of each exchange on which each class is to be registered:
THE TORONTO STOCK EXCHANGE
THE NEW YORK STOCK EXCHANGE
(name of exchanges)
Securities to be registered pursuant to Section 12(g) of the Act:
None
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. GENERAL INFORMATION.
Meridian Gold Inc. (the "Company") was incorporated in February 1996
under the Canada Business Corporations Act. The Company's fiscal year ends on
December 31.
ITEM 2. TRANSACTION OF SUCCESSION.
On July 31, 1996, pursuant to the terms of an Agreement and Plan of
Merger dated as of June 14, 1996 by and among the Company, Meridian Gold Canada
Inc., Meridian Gold Company, FMC Gold Company (the "Predecessor") and FMC
Corporation, the Predecessor, a Delaware corporation, will become a wholly-owned
indirect subsidiary of the Company, a Canadian corporation (the
"Reincorporation"). Prior to the Reincorporation, the common stock of the
Predecessor, par value $0.01 per share, was registered pursuant to Section 12(b)
of the Securities Exchange Act of 1934, as amended, and listed for trading on
the New York Stock Exchange. For a description of the Reincorporation, see
"Reincorporation Merger Proposal" and "Merger Agreement" in the Company's
Registration Statement on Form S-4 (File No. 333-06225) filed with the
Securities and Exchange Commission on June 18, 1996 and declared effective on
June 21, 1996 (the "S-4 Registration Statement"), including Annex A thereto,
which are incorporated herein by reference pursuant to General Instruction E to
this Form 8-B.
ITEM 3. SECURITIES TO BE REGISTERED.
The authorized share capital of the Company currently consists of an
unlimited number of preferred shares without par value and an unlimited number
of common shares without par value. As of July 31, 1996, the effective date of
the succession, the Company will have 73,597,495 common shares issued and
outstanding and 10,000 preferred shares issued and outstanding.
ITEM 4. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
For a description of the Company's common shares, see "Description of
Share Capital" in the S-4 Registration Statement. Such information is
incorporated herein by reference pursuant to the Instruction to Item 4 to this
Form 8-B.
ITEM 5. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements.
None.
(b) Exhibits.
2
<PAGE>
Exhibit No. Description
----------- -----------
2 Proxy Statement/Prospectus included in Meridian Gold Inc.'s
Registration Statement on Form S-4 (File No. 333-06225) filed
with the Securities and Exchange Commission on June 18, 1996 and
declared effective on June 21, 1996, incorporated herein by
reference thereto.
3.2 Agreement and Plan of Merger dated as of June 14, 1996 among the
Company, Meridian Gold Canada Inc., Meridian Gold Company, FMC
Gold Company and FMC Corporation, included as Annex A to the S-4
Registration Statement (included in Exhibit 2 above).
3.3(i) Certificate of Incorporation of the Company, included as Exhibit
3.1 to the S-4 Registration Statement (included in Exhibit 2
above).
3.3(ii) Bylaws of the Company, included as Exhibit 3.2 to the S-4
Registration Statement (included in Exhibit 2 above).
3.4(i)(a) Form of certificate representing Common Shares of the Company.
3.4(i)(b) Form of certificate representing Instalment Receipts of the
Company.
3.4(i)(c) Instalment Receipt and Pledge Agreement dated as of July 31, 1996
among the Company, FMC Corporation, CIBC Wood Gundy Securities
Inc., Nesbitt Burns Inc., First Marathon Securities Limited, RBC
Dominion Securities Inc., Bunting Warburg Inc., Midland Walwyn
Capital Inc., The Trust Company of Bank of Montreal and The R-M
Trust Company.
3.4(i)(d) Shareholder Rights Plan Agreement dated as of July 31, 1996
between the Company and The Trust Company of Bank of Montreal.
3.10(i) Transition Services Agreement dated as of July 31, 1996 among the
Company, FMC Corporation and FMC Gold Company, the form of which
is included as Exhibit 10.1 to the S-4 Registration Statement
(included in Exhibit 2 above).
3.10(ii) Tax Sharing and Separation Agreement dated as of August 1, 1996
among the Company and its subsidiaries and FMC Corporation.
3.10(iii) Executive Incentive and Severance Plan for Brian J. Kennedy,
included as Exhibit 10.2 to the S-4 Registration Statement
(included in Exhibit 2 above).
3.10(iv) Executive Incentive and Severance Plan for Donald L. Beckwith,
included as Exhibit 10.3 to the S-4 Registration Statement
(included in Exhibit 2 above).
3.10(v) 1996 Stock Option Plan, the form of which is included as Exhibit
10.4 to the S-4 Registration Statement (included in Exhibit 2
above).
3
<PAGE>
3.21 Subsidiaries list.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this application for registration
(or registration statement) to be signed on its behalf by the undersigned,
thereto duly authorized.
MERIDIAN GOLD INC.
By: /s/ Alan L. Lowe
----------------------------------------------
Alan L. Lowe
Vice President and Chief Financial Officer
Date: July 30, 1996
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE NUMBER
- ----------- ----------- -----------
<S> <C> <C>
3.4(i)(a) Form of certificate representing Common Shares of
the Company.
3.4(i)(b) Form of certificate representing Instalment
Receipts of the Company
3.4(i)(c) Instalment Receipt and Pledge Agreement dated as
of July 31, 1996 among the Company, FMC
Corporation, CIBC Wood Gundy Securities Inc.,
Nesbitt Burns Inc., First Marathon Securities
Limited, RBC Dominion Securities Inc., Bunting
Warburg Inc., Midland Walwyn Capital Inc., The
Trust Company of Bank of Montreal and The R-M
Trust Company
3.4(i)(d) Shareholder Rights Plan Agreement dated as of
July 31, 1996 between the Company and The Trust
Company of Bank of Montreal
3.10(ii) Tax Sharing and Separation Agreement dated as of
August 1, 1996 among the Company and its
subsidiaries and FMC Corporation
3.21 Subsidiaries list
</TABLE>
___________
Exhibits 2, 3.2, 3.3(i), 3.3(ii), 3.10(i), 3.10(iii), 3.10(iv) and 3.10(v) are
incorporated by reference.
<PAGE>
EXHIBIT 3.4(i)(a)
COMMON COMMON
SHARES SHARES
ACTIONS ACTIONS
ORDINAIRES ORDINARIES
NUMBER NUMERO SHARES ACTIONS
SEE REVERSE FOR LEGEND AND CERTAIN DEFINITIONS
VOIRE LA LEGENDE ET CERTAINES DEFINITIONS AU VERSO
CUSIP 589975 10 1
INCORPORATED UNDER THE CANADA BUSINESS CORPORATIONS ACT
CONSTITUEE SOUS L'AUTORITE DE LA LOI CANADIENNE SUR LES SOCIETES PAR ACTIONS
MERIDIAN GOLD INC.
THIS CERTIFIES THAT
LES PRESENTES ATTESTENT QUE
is the registered holder of
est le porteur inscrit de
Countersigned and Registered
Contresigne et enregistre
HARRIS TRUST COMPANY OF NEW YORK, New York
Transfer Agent and Registrar
Agent des transferts et agent
comptable des registres
By:
Par:
---------------------------------------
Authorized Officer - Dirigeant autorise
Transferable, in Canada, at the principal offices of The Trust Company of Bank
of Montreal in Toronto, Montreal, Calgary and Vancouver, in the United States at
the office of Harris Trust Company of New York in the City of New York.
Transferables, au Canada, aux bureaux principaux de la Societe de fiducie Banque
de Montreal a Toronto, Montreal, Calgary et Vancouver, aux Etats-Unis au bureau
de Harris Trust Company of New York dans la ville de New York.
FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF
THE CAPITAL STOCK OF
ACTIONS ORDINAIRES ENTIEREMENT LIBEREES ET NON SUSCEPTIBLES D'APPELS DE
VERSEMENT DU CAPITAL-ACTIONS DE
Countersigned and Registered
Contresigne et enregistre
THE TRUST COMPANY OF BANK OF MONTREAL, Toronto
SOCIETE DE FIDUCIE BANQUE DE MONTREAL, Montreal
Transfer Agent and Registrar Calgary
Agent des transferts et agent Vancouver
comptable des registres
By:
Par:
---------------------------------------
Authorized Officer - Dirigeant autorise
MERIDIAN GOLD INC.
transferable on the books of the Corporation by the registered holder hereof in
person or by attorney duly authorized upon surrender of this certificate
properly endorsed. This certificate is not valid until countersigned by a
Transfer Agent and registered by a Registrar of the Corporation.
In Witness Whereof the Corporation has caused this certificate to be signed by
its duly authorized officers.
Dated: - Date:
transferables dans les livres de la Societe par le porteur inscrit
personnellement ou par son fonde de pouvoir dument autorise sur remise du
present certificat dument endosse. Le present certificat ne sera valide que
lorsque contresigne par un agent des transferts et enregistre par un agent
comptable des registres de la Societe.
En foi de quoi, la Societe a signe le present certificat par ses dirigeants
dument autorises.
Brian J. Kennedy Donald L. Beckwith
President Secretary
President Secretaire
<PAGE>
The following abbreviations shall be construed as though the words set forth
below opposite each abbreviation were written out in full where such
abbreviation appears:
TEN COM --as tenants in common
TEN ENT --as tenants by the entireties
JT TEN --as joint tenants with right of survivorship and
not as tenants in common
(Name) CUST (Name) UNIF --(Name) as Custodian for (Name) under the
GIFT MIN ACT (State) --(State) Uniform Gifts to Minors Act
Additional abbreviations may also be used though not in the above list.
Les abreviations ci-dessous sont considerees, aux fins des presentes, comme
l'equivalent des mots et expressions auxquels elles sont jumelees, et comme si
ces mots et expressions etaient ecrits en toutes lettres:
TEN COM --proprietaires communs
TEN ENT --proprietaires de la communaute conjugale
JT TEN --proprietaires conjoints avec gain de survie et non
a titre
--de proprietaires communs
(Nom) CUST (Nom) UNIF --(Nom) en qualite de gardien pour (Nom) en vertu de
GIFT MIN ACT (Etat) la loi intitulee "Uniform Gifts to Minors Act"
(Etat)
D'autres abreviations, ne figurant pas dans la liste ci-dessus, peuvent aussi
etre utilisees.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE RIGHTS, PRIVILEGES, RESTRICTIONS
AND CONDITIONS ATTACHED THERETO AND THE CORPORATION WILL FURNISH TO A
SHAREHOLDER, ON DEMAND AND WITHOUT CHARGE, A FULL COPY OF THE TEXT OF SUCH
RIGHTS, PRIVILEGES, RESTRICTIONS AND CONDITIONS ATTACHED THERETO AND TO EACH
CLASS AND SERIES OF SHARES AUTHORIZED TO BE ISSUED BY THE CORPORATION AND THE
AUTHORITY OF THE DIRECTORS TO FIX THE RIGHTS, PRIVILEGES, RESTRICTIONS AND
CONDITIONS OF SUBSEQUENT SERIES OF SHARES.
DES DROITS, PRIVILEGES, RESTRICTIONS ET CONDITIONS SE RATTACHENT AUX ACTIONS
REPRESENTEES PAR LE PRESENT CERTIFICAT ET LA SOCIETE FOURNIRA GRATUITEMENT A UN
ACTIONNAIRE, SUR DEMANDE, UN EXEMPLAIRE DU TEXTE DESDITS DROITS, PRIVILEGES,
RESTRICTIONS ET CONDITIONS ET POUR TOUTES LES CATEGORIES ET SERIES D'ACTIONS
DONT L'EMISSION A ETE AUTORISEE PAR LA SOCIETE, ET LE TEXTE AUTORISANT LES
ADMINISTRATEURS A LES FIXER POUR LES SERIES D'ACTIONS SUIVANTES.
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER AND MUST BE GUARANTEED BY A BANK, TRUST
COMPANY OR MEMBER OF A RECOGNIZED STOCK EXCHANGE.
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
CONETRE VALEUR RECUE, le soussigne vend, cede et transfere par les presentes
a
Please insert social insurance number, social security number or other tax
identifying number of assignee
_________________________________________
| |
|________________________________________|
Indiquer le numero dassurance sociale, le numero de securite sociale ou autre
numero d'identifications aux fins de l'impot du cessionnaire
- --------------------------------------------------------------------------------
(Please print the name and address including the postal code of the
transferee)
- --------------------------------------------------------------------------------
(Veuillez imprimer le nom et l'adresse ainsi que le code postal du cessionnaire)
- --------------------------------------------------------------------------------
shares
- -------------------------------------------------------------------------actions
registered in the name of the undersigned on the books of the Corporation and
represented hereby, and irrevocably constitutes and appoints
- --------------------------------------------------------------------------------
representees par le present certificat et immatriculees au nom du soussigne dans
les livres de la societe, et nomme irrevocablement
- --------------------------------------------------------------------------------
the attorney of the undersigned to transfer the said shares on the register of
transfers and books of the Corporation with full power of substitution
hereunder.
- --------------------------------------------------------------------------------
son mandataire pour transferer lesdites actions au registre des transferts et
aux livres de la societe, avec tous les pouvoirs de se substituer un autre
mandataire.
Date:
Guaranteed by:
Garantie par:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature of Shareholder)
(Signature de l'actionnaire)
AVIS: LA SIGNATURE DE CE TRANSFERT DOIT CORRESPONDRE EN TOUS POINTS AU NOM PORTE
AU RECTO DE CE CERTIFICAT SANS Y RIEN CHANGER, AJDOUTER OU RETRANCHER ET DOIT
ETRE GARANTIE PAR UNE BANQUE, UNE SOCIETE DE FIDUCIE OU UN MEMBRE D'UNE BOURSE
RECONNUE.
Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences rights of the holder described in a
Shareholder Rights Plan Agreement dated as of July 31, 1996 (the "Rights
Agreement") between Meridian Gold Inc. (the "Corporation") and The Trust Company
of Bank of Montreal, the terms of which are incorporated herein by reference and
a copy of which is on file at the registered office of the Corporation. Under
certain circumstances set out in the Rights Agreement, the rights may expire,
may become null and void or may be evidenced by separate certificates and no
longer evidenced by this certificate. The Corporation will mail or arrange for
the mailing of a copy of the Rights Agreement to the holder of this certificate
without charge as soon as practicable after receipt of a written request
therefor.
Jusque l'heure de separation (telle que definie dans la convention de droits
mentionnee ci-dessous), le present certificat atteste egalement les droits du
porteur decrits dans une convention de regime de droits des actionnaires datee
du 31 juillet 1996 (la convention de droits) entre Meridian Gold Inc. (la
Societe) et la Societe de Fiducie Banque de Montreal, dont les modalites sont
integrees aux presentes par renvoi et un exemple est disponible au siege social
de la Societe. Selon certaines circonstances enoncees dans la convention de
droits, les droits peuvent expirer, devenir nuls ou Etre attestes par des
certificats distincts et ne plus Etre attestes par le present certificat. La
Societe postera ou s'occupera de voir a la mise a la poste d'un exemplaire de la
convention de droits au porteur du present certificat sans frais des que
possible apres reception d'une demande ecrite a cet effet.
<PAGE>
EXHIBIT 3.4(i)(b)
THE SECURITIES REPRESENTED HEREBY WERE INITIALLY ISSUED ON JULY 31, 1996 AND
HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER, IF APPLICABLE, OR (D) IN COMPLIANCE WITH
CERTAIN OTHER PROCEDURES SATISFACTORY TO THE COMPANY. DELIVERY OF THIS
CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA. A NEW CERTIFICATE, BEARING NO LEGEND, DELIVERY OF
WHICH WILL CONSTITUTE "GOOD DELIVERY" MAY BE OBTAINED FROM THE COMPANY'S
TRANSFER AGENT (CURRENTLY, THE TRUST COMPANY OF BANK OF MONTREAL) UPON DELIVERY
OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO
THE TRANSFER AGENT AND THE COMPANY, TO THE EFFECT THAT THE SALE OF THE
SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT.
INSTALMENT RECEIPT REPRESENTING COMMON SHARES OF / RECU DE VERSEMENT
REPRESENTANT DES ACTIONS ORDINAIRES DE
No. SHARES
ACTIONS
MERIDIAN GOLD INC.
THIS IS TO CERTIFY THAT
LES PRESENTES ATTESTENT QUE
Number of Common Shares Represented by this Instalment Receipt:
Nombre d'actions ordinaires representees par le present recu de versement :
CUSIP 589975 20 0
the registered holder hereof, or a predecessor in title has paid a first
instalment of $2.50 per common share in the capital of Meridian Gold Inc.
("Common Share") (U.S.$1.8228 if a U.S. purchaser elected to pay such instalment
in U.S. dollars) and is entitled, subject to payment of the final instalment of
$2.50 per Common Share, or such reduced amount resulting from the application of
certain payments, if any, made in reduction of the final instalment pursuant to
the provisions of the Instalment Receipt Agreement referred to in Condition 1
endorsed hereon and compliance with the applicable provisions thereof, to have
registered in the name of the registered holder hereof as soon as reasonably
practicable after such payment has been made, and such provisions have been
complied with, at or before 5:00 p.m. (Toronto time) on July 31, 1997 the number
of fully paid Common Shares set out above. This Instalment Receipt is issued
subject to and with the benefit of the Conditions endorsed hereon and the
provisions of the Instalment Receipt Agreement described in Condition 1. BY
REGISTRATION ON THE INSTALMENT RECEIPT REGISTER AS THE HOLDER HEREOF, THE HOLDER
IS DEEMED TO HAVE ACKNOWLEDGED AND AGREED TO BE BOUND BY THE CONDITIONS HEREON
AND THE INSTALMENT RECEIPT AGREEMENT. UNDER THE INSTALMENT RECEIPT AGREEMENT AND
THE CONDITIONS, (i) FROM AND AFTER THE TIME REFERRED TO ABOVE THIS INSTALMENT
RECEIPT WILL, UNLESS SUCH PAYMENT HAS THERETOFORE BEEN MADE AND SUCH PROVISIONS
HAVE THERETOFORE BEEN COMPLIED WITH, CEASE TO ENTITLE THE HOLDER TO BECOME THE
REGISTERED HOLDER OF ANY COMMON SHARES, REPRESENTED BY THIS INSTALMENT RECEIPT
AND (ii) FAILURE TO PAY THE FINAL INSTALMENT SPECIFIED HEREIN WHEN DUE AND
COMPLY WITH THE APPLICABLE PROVISIONS REFERRED TO ABOVE MAY RESULT IN THE COMMON
SHARES REPRESENTED BY THIS INSTALMENT RECEIPT BEING ACCEPTED BY THE SELLING
SHAREHOLDER (AS DEFINED IN CONDITION 1) IN FULL SATISFACTION OF THE OBLIGATION
SECURED BY THE PLEDGE PROVIDED FOR IN THE INSTALMENT RECEIPT AGREEMENT OR SOLD.
IN THE EVENT OF SUCH A SALE, THE REGISTERED HOLDER HEREOF WILL BE LIABLE TO PAY
TO THE SELLING SHAREHOLDER THE HOLDER'S PORTION OF ANY DEFICIENCY, IF A
DEFICIENCY RESULTS, AS DESCRIBED IN CONDITION 3(ii).
Final Instalment: $2.50 per Common Share payable at or before 5:00 p.m.
(Toronto time) on July 31, 1997.
This Instalment Receipt is not valid unless signed by the Custodian.
IN WITNESS WHEREOF The Trust Company of Bank of Montreal, as Custodian, has
caused this Instalment Receipt to be signed by its duly authorized officer and
countersigned by its duly authorized officer or agent.
TRANSFERS OF THIS INSTALMENT RECEIPT AND THE RIGHTS EVIDENCED HEREBY WILL BE
REGISTERED ONLY BY THE TRUST COMPANY OF BANK OF MONTREAL AT ITS PRINCIPAL OFFICE
IN TORONTO. The rights and obligations evidenced by this Instalment Receipt may
not be transferred after 5:00 p.m. (Toronto time) on July 31, 1997.
son porteur inscrit ou un predecesseur en titre, a fait un premier versement de
2,50 $ l'action ordinaire au capital de Meridian Gold Inc. (l'action
ordinaire) (soit 1,8228 $ US, si l'acquereur choisissait de le regler en
monnaie des Etats-Unis) et est habilite, sous reserve d'un dernier versement de
2,50 $ l'action ordinaire, ou tel montant reduit par suite de l'affectation de
certains paiements, le cas echeant, faits en reduction du dernier versement aux
termes de la convention de recus de versement mentionnee a la condition 1 au
verso et du respect de ses dispositions applicables, a faire immatriculer au nom
de ce porteur inscrit, des que possible apres que ce paiement a ete fait et que
ces dispositions ont ete respectees, a ou avant 17h00 (heure de Toronto) le 31
juillet 1997, le nombre d'actions ordinaires entierement liberees indique ci-
dessus. Le present recu de versement est emis sous reserve et benefice des
conditions enoncees au verso et des dispositions de la convention de recus de
versement decrites a la condition 1. PAR SON INSCRIPTION AU REGISTRE DES RECUS
DE VERSEMENT, LE PORTEUR EST REPUTE RECONNAITRE QU'IL EST LIE PAR LES CONDITIONS
PRECITEES ET LA CONVENTION DE RECUS DE VERSEMENT. EN VERTU DE CETTE CONVENTION
ET DES CONDITIONS, (i) A COMPTER DU MOMENTPRECITE, LE PRESENT RECU DE VERSEMENT
CESSERA, A MOINS QUE CE PAIEMENT N'AIT ETE EFFECTUE ET QUE CES DISPOSITIONS
N'AIENT ETE RESPECTEES AVANT LE MOMENT PRECITE, D'HABILITER LE PORTEUR A DEVENIR
PORTEUR INSCRIT DES ACTIONS ORDINAIRES QU'IL REPRESENTE ET (ii) LE DEFAUT
D'EFFECTUER LE DERNIER VERSEMENT SUSMENTIONNE A ECHEANCE ET DE SE CONFORMER AUX
DISPOSITIONS APPLICABLES SUSMENTIONNEES POURRAIT ENTRAINER QUE LES ACTIONS
ORDINAIRES QU'IL REPRESENTE SOIENT ACCEPTEES PAR L'ACTIONNAIRE-VENDEUR (DEFINI
DANS LA CONDITION 1) EN PARFAITE EXECUTION DE L'OBLIGATION GARANTIE PAR LE
TRANSPORT EN GAGE PREVU DANS LA CONVENTION DE RECUS DE VERSEMENT OU QU'ELLES
SOIENT VENDUES. ADVENANT UNE TELLE VENTE, LE PORTEUR INSCRIT SERA REDEVABLE
ENVERS L'ACTIONNAIRE-VENDEUR DE SA PARTIE DE TOUTE INSUFFISANCE, LE CAS ECHEANT,
SUIVANT CE QUI EST DECRIT A LA CONDITION 3(ii).
Dernier versement : 2,50 $ l'action ordinaire, payable a ou avant 17h00
(heure de Toronto) le 31 juillet 1997.
Le present recu de versement n'est pas valide sauf s'il est signe par le
gardien.
EN FOI DE QUOI Societe de Fiducie Banque de Montreal, a titre de gardien, a
fait en sorte que le present recu de versement soit signe par son dirigeant
dument autorise et contresigne par son dirigeant ou representant dument
autorise.
SOCIETe DE FIDUCIE BANQUE DE MONTREAL NE CONSIGNERA LES TRANSFERTS DU PRESENT
RECU DE VERSEMENT ET LES DROITS QU'IL ATTESTE QU'A SON PRINCIPAL BUREAU A
TORONTO. Les droits et obligations qu'attestent les presentes ne pourront etre
cedes apres 17h00 (heure de Toronto) le 31 juillet 1997.
Dated
Date du .
COUNTERSIGNED AND REGISTERED BY:
CONTRESIGNE ET INSCRIT PAR :
Authorized Officer - Dirigeant autorise
THE TRUST COMPANY OF BANK OF MONTREAL
SOCIETE DE FIDUCIE BANQUE DE MONTREAL
Authorized Officer - Dirigeant autorise
<PAGE>
CONDITIONS
1. In these Conditions, the following terms have the following respective
meanings. "Instalment Receipt" means this Instalment Receipt and all other
Instalment Receipts issued under the Instalment Receipt Agreement and evidencing
rights in respect of the Instalment Shares. "Instalment Shares" means all or any
of the common shares of Meridian Gold Inc. in respect of which Instalment
Receipts are issued pursuant to the Instalment Receipt Agreement and, where
applicable, other property registered in the name of or held by the Custodian
or the Security Agent from time to time pursuant to the Instalment Receipt
Agreement. "Related Shares" means the Instalment Shares represented by a
particular Instalment Receipt. "Instalment Receipt Agreement" means the
instalment receipt and pledge agreement made as of July 31, 1996 among FMC
Corporation (the "Selling Shareholder"), Meridian Gold Inc. (the "Company"),
CIBCWood Gundy Securities Inc., Nesbitt Burns Inc., First Marathon Securities
Limited, RBC Dominion Securities Inc., Bunting Warburg Inc., Midland Walwyn
Capital Inc., The Trust Company of Bank of Montreal (the "Custodian") and The
R-M Trust Company (the "Security Agent") providing, inter alia for the issuance
of Instalment Receipts. Except as provided in this Condition, terms defined in
the Instalment Receipt Agreement have the meanings ascribed to them therein when
used in these Conditions.
2. The Registered Holder of this Instalment Receipt holds this Instalment
Receipt and all rights and obligations in respect of the Related Shares
beneficial ownership of which is represented by this Instalment Receipt subject
to and with the benefit of the provisions of the Instalment Receipt Agreement
and of these Conditions. If there is any inconsistency between these Conditions
and the Instalment Receipt Agreement, the Instalment Receipt Agreement shall
prevail.
3. (i) TO PREVENT THE ACCEPTANCE BY THE SELLING SHAREHOLDER OF THE RELATED
SHARES REPRESENTED BY THIS INSTALMENT RECEIPT IN SATISFACTION OF THE
OBLIGATIONS SECURED BY THE PLEDGE THEREOF OR THE SALE OF SUCH RELATED
SHARES AND THE REMITTANCE OF CERTAIN PROCEEDS OF SUCH SALE TO THE
SELLING SHAREHOLDER AS PROVIDED IN CONDITION 3(ii) BELOW, payment of
the Final Instalment in respect of each of the Related Shares
represented by this Instalment Receipt must be made free of all
deductions by 5:00 p.m. (Toronto time) on July 31, 1997 (the
"Completion Time") to the Custodian at its Toronto Securities Services
Centre. This Instalment Receipt must accompany such payment. On
satisfaction by the Registered Holder of the foregoing requirements,
the Custodian and the Company shall, except as otherwise required by
the Instalment Receipt Agreement, cause The Trust Company of Bank of
Montreal as transfer agent to register in the name of the Registered
Holder, as provided in Condition 4, a share certificate representing
the Related Shares represented by this Instalment Receipt .
(ii) If any part of the Final Instalment in respect of the Related Shares
represented by this Instalment Receipt remains unpaid after, and/or
the other requirements set out in Condition 3(i) above are not
satisfied at or before the Completion Time, then the Related Shares,
and/or any other property held by the Custodian or the Security Agent
in respect of such Related Shares remaining subject to the Pledge of
the Instalment Receipt Agreement may, subject to the provisions of the
Instalment Receipt Agreement and applicable laws, (A) be accepted by
the Selling Shareholder in satisfaction of the Payment Obligation
secured by the Pledge or (B) sold by the Custodian and in the event of
such sale its pro rata portion of the Final Instalment and the costs
of sale will be paid to the Selling Shareholder out of and to the
extent of the proceeds and any interest earned on or with respect to
such proceeds, provided that, should the aggregate of the proceeds
from the sale of all Related Shares represented by outstanding
Instalment Receipts which are so sold and any interest earned on or
with respect to such proceeds exceed the aggregate amount of such
payments to the Selling Shareholder in respect of such Related Shares,
the Custodian shall then (subject to applicable laws and net of
applicable withholding taxes) distribute the sum of such excess
amounts among the Registered Holders of Instalment Receipts
representing those Related Shares pro rata to their respective
entitlements to such Related Shares and provided further that, should
the Final Instalments in respect of an aggregate of less than 5% of
the Instalment Shares represented by Instalment Receipts remain unpaid
after the Completion Time as described in this Condition 3(ii) then,
the Instalment Shares remaining subject to the Pledge must be sold
pursuant to (B) above. If the aggregate of the amount of the proceeds
of sale of Related Shares represented by outstanding Instalment
Receipts which are so sold and any interest earned on or with respect
to such proceeds is less than the aggregate of the Final Instalments
and the costs of sale, the Registered Holder of this Instalment
Receipt shall be and remain liable to pay to the Selling Shareholder,
on demand, an amount equal to the Registered Holder's portion of the
deficiency, calculated on the basis of the ratio which the Related
Shares so sold which are represented by his Instalment Receipts is of
all Related Shares so sold.
4. Upon satisfaction by the Registered Holder of the requirements set out in
Condition 3(i) at or before the Completion Time, the Registered Holder shall,
except as provided in Condition 8 or in the Instalment Receipt Agreement, be
entitled to receive a share certificate representing the Related Shares
represented by this Instalment Receipt.
5. (i) The Company and the Custodian will recognize the Registered Holder of
an Instalment Receipt as the absolute owner thereof and shall not be
bound to take notice of or to see to the execution of any trust
whether express, implied or constructive to which it may be subject.
(ii) This Instalment Receipt may, as between the transferor and the
transferee, be transferred by delivery thereof properly endorsed or
accompanied by a proper instrument of transfer in suitable form for
transfer by delivery.
(iii) Subject to (ii) above, every instrument of transfer must be sent to
the Securities Services Centre of the Custodian in Toronto accompanied
by this Instalment Receipt together with such other evidence as the
Custodian may require to prove title or right to transfer. Tender of
this Instalment Receipt together with a duly executed transfer in
accordance with this Condition shall be sufficient authority for the
Custodian to enter in the Register the person or persons named in the
transfer as Registered Holder(s), and on such entry being made the
person or persons so registered shall be subject to the obligations
imposed, and entitled to the rights conferred by, the Instalment
Receipt Agreement to the exclusion of the original purchaser and any
intermediate purchaser in respect of the Instalment Shares which are
represented by this Instalment Receipt. The person tendering the said
documents shall be deemed to warrant his authority to do so as or on
behalf of the transferee therein named.
(iv) The Registered Holder will be recognized by the Custodian as entitled
to the rights evidenced by this Instalment Receipt free from any
equity, set-off or counter-claim on the part of the Custodian against:
(a) the original purchaser or any intermediate purchaser of
Instalment Shares which are represented by this Instalment
Receipt howsoever arising; or
(b) the Registered Holder unless the claim in question arises in
connection with the Instalment Receipt Agreement; but subject to
the rights of the Selling Shareholder under the Instalment
Receipt Agreement.
6. The Registered Holder is entitled to certain rights in respect of dividends
paid and distributions made by the Company including, subject to the Instalment
Receipt Agreement, the right to receive from the Custodian any dividends paid in
cash in respect of the Related Shares and the right to exercise the votes
attached to the Related Shares.
7. The Instalment Receipt Agreement contains certain limitations on the
liabilities and duties of the parties to such agreement to the Registered
Holder.
8. The Custodian may require the Registered Holder from time to time to
execute or furnish such documents and to furnish such information as, in the
reasonable opinion of the Custodian, may be necessary or appropriate to comply
with any fiscal or other laws or regulations relating to this Instalment Receipt
or the Related Shares represented by this Instalment Receipt. As between the
parties to the Instalment Receipt Agreement and the Registered Holder, the
Custodian shall not be liable for any taxes, duties or governmental charges or
expenses which may become payable in respect of this Instalment Receipt or
rights represented thereby or any such Related Shares whether under any present
or future fiscal or other laws or regulations and, except as specified in the
Instalment Receipt Agreement, the same shall be payable by the Registered Holder
to the Custodian. Failure by any Registered Holder to make such payment may
result in the Custodian withholding the amount of such payment from any
dividends or other distributions contemplated by the Instalment Receipt
Agreement or withholding delivery of the share certificate representing the
Related Shares.
9. Copies of the Instalment Receipt Agreement may be inspected at the office
of the Custodian for the time being appointed for this purpose. A copy of such
agreement may be obtained on application to the Custodian at a reasonable fee.
10. BY REGISTRATION ON THE REGISTER, THE REGISTERED HOLDER ACKNOWLEDGES AND
AGREES AND SHALL BE CONCLUSIVELY DEEMED TO ACKNOWLEDGE AND AGREE TO BE BOUND BY
THE INSTALMENT RECEIPT AGREEMENT, THAT HE HAS ASSUMED AND IS BOUND TO PAY THE
OBLIGATIONS IN RESPECT OF THE RELATED SHARES REPRESENTED BY THIS INSTALMENT
RECEIPT, INCLUDING WITHOUT LIMITATION, THE OBLIGATION TO PAY THE FINAL
INSTALMENT IN RESPECT OF EACH RELATED SHARE, THAT SUCH RELATED SHARES ARE AND
WILL CONTINUE TO BE PLEDGED TO THE SELLING SHAREHOLDER PURSUANT TO THE
INSTALMENT RECEIPT AGREEMENT TO SECURE THE OBLIGATIONS OF THE REGISTERED HOLDER
IN RESPECT OF SUCH RELATED SHARES, THAT HIS RIGHTS IN RESPECT OF SUCH RELATED
SHARES ARE AND WILL CONTINUE TO BE SUBJECT TO THE PROVISIONS OF THE INSTALMENT
RECEIPT AGREEMENT, THAT THE PLEDGE CONTAINED IN THE INSTALMENT RECEIPT AGREEMENT
IS AND WILL REMAIN IN EFFECT NOTWITHSTANDING ANY PRIOR, CONCURRENT OR SUBSEQUENT
TRANSFER OF OR OTHER DEALINGS WITH THE INSTALMENT RECEIPTS FROM TIME TO TIME
REPRESENTING SUCH RELATED SHARES AND THE RIGHTS EVIDENCED OR ARISING THEREBY AND
THAT THE REGISTERED HOLDER WILL BE LIABLE FOR ANY DEFICIENCY IN THE PROCEEDS
FROM ANY DISPOSITION OF SUCH RELATED SHARES AND ANY OTHER PLEDGED COLLATERAL
PURSUANT TO SUCH PLEDGE.
11. The parties hereto acknowledge that they have agreed that English be the
governing language as to the Instalment Receipt, Instalment Receipt Agreement
and any document relating or delivered pursuant thereto.
12. The signature to any endorsement hereof must correspond with the name as
written upon the face of this Instalment Receipt in every particular without
alteration or enlargement or any change whatsoever. If the endorsement is
executed by an attorney, executor, administrator, trustee or guardian, the
person executing the endorsement must give his full title in such capacity and
provide proper evidence of authority to act in such capacity. If not on file
with the Custodian, such evidence must be forwarded with this Instalment
Receipt. All endorsements or assignments of this Instalment Receipt must be
guaranteed by a Canadian chartered bank or Canadian trust company or by a member
of a recognized stock exchange whose signature is known to the Custodian.
1. Dans les presentes conditions, les termes et expressions qui suivent auront
le sens qu'il leur est donne ci-apres. Par recu de versement, on entend le
present recu de versement et tous autres recus de versement emis aux termes de
la convention de recus de versement et attestant des droits au titre des actions
a versements. Par action a versements, on entend l'une ou l'autre des actions
ordinaires de Meridian Gold Inc. au titre desquelles des recus de versement sont
emis aux termes de la convention de recus de versement et, le cas echeant,
d'autres biens immatricules au nom du gardien ou du depositaire, ou detenus par
eux, de temps a autre aux termes de la convention precitee. Par actions
afferentes, on entend les actions a versements representees par un recu de
versement donne. Par convention de recus de versement, on entend la convention
de recus de versement et de transport en gage intervenue le 31 juillet 1996
entre FMC Corporation (l'actionnaire-vendeur), Meridian Gold Inc. (la
Societe), CIBC Wood Gundy valeurs mobilieres Inc., Nesbitt Burns Inc., Societe
de valeurs First Marathon Limitee, RBC Dominion valeurs mobilieres Inc., Bunting
Warburg Inc., Capital Midland Walwyn Inc., Societe de Fiducie Banque de Montreal
(le gardien) et Compagnie Trust R-M (le depositaire) qui porte, entre
autres, sur l'emission des recus de versement. Sauf ainsi qu'il est prevu par la
presente condition, les termes et expressions definis dans la convention de
recus de versement ont le sens qui leur est donne dans celle-ci lorsqu'ils sont
utilises dans les presentes conditions.
2. Le porteur inscrit detient le present recu de versement et tous les droits
et obligations au titre des actions afferentes, dont la propriete veritable est
attestee par le present recu de versement, sous reserve et benefice des
dispositions de la convention de recus de versement et des presentes conditions.
En cas de non-conformite entre les presentes conditions et la convention de
recus de versement, cette derniere a preseance.
3. (i) AFIN D'EMPECHER QUE L'ACTIONNAIRE-VENDEUR N'ACCEPTE LES ACTIONS
AFFERENTES ATTESTEES PAR LE PRESENT RECU DE VERSEMENT EN EXECUTION DES
OBLIGATIONS GARANTIES PAR LEUR TRANSPORT EN GAGE OU LEUR VENTE ET QUE NE LUI
SOIT REMISE TOUTE PARTIE DU PRODUIT DE CETTE VENTE AINSI QU'IL EST PREVU DANS
LA CONDITION 3(ii) CI-DESSOUS, le reglement du dernier versement au titre de
chacune des actions afferentes attestees par le present recu de versement
doit s'effectuer sans deduction aucune d'ici 17h00 (heure de Toronto) le 31
juillet 1997 (la date de reglement) aupres du gardien a son Centre de
gestion mobiliere de Toronto. Le present recu de versement doit accompagner
ce reglement. Des execution des exigences precitees par le porteur inscrit,
le gardien et la Societe, sauf ainsi qu'autrement requis par la convention de
recus de versement, feront en sorte que Societe de Fiducie Banque de
Montreal, l'agent des transferts, immatricule au nom du porteur inscrit,
ainsi qu'il est prevu par la condition 4, un certificat pour les actions
afferentes attestees par le present recu de versement.
(ii) Si une partie du dernier versement a l'egard des actions afferentes
qu'atteste le present recu de versement demeure impayee apres la date de
reglement ou si les autres exigences enoncees a la condition 3(i) ci-dessus
ne sont pas remplies au plus tard a cette date, les actions afferentes et
tout autre bien detenu par le gardien ou le depositaire a l'egard des actions
afferentes demeurant assujetties au transport en gage de la convention de
recus de versement peuvent, sous reserve des dispositions de cette convention
et des lois applicables, (A) etre acceptes par l'actionnaire-vendeur en
reglement de l'obligation de paiement garantie par le transport en gage ou
(B) etre vendus par le gardien et, dans l'eventualite d'une telle vente, sa
part proportionnelle du dernier versement et des couts de la vente sera payee
a l'actionnaire-vendeur a meme le produit et tout interet gagne sur celui-ci,
ou a son egard, et jusqu'a concurrence de ce montant; toutefois, si le total
du produit provenant de la vente de l'ensemble des actions afferentes
representees par les recus de versement en circulation qui sont vendus et
tout interet gagne sur ceux-ci ou a l'egard de leur produit est superieur au
montant total de ces versements a l'actionnaire-vendeur a l'egard des actions
afferentes, le gardien distribuera alors (sous reserve des lois applicables
et deduction faite de toutes retenues d'impot pertinentes) le montant qui
correspond a cette somme excedentaire parmi les porteurs inscrits de recus de
versement representant les actions afferentes, au prorata de leurs droits
respectifs a ces actions afferentes, et, de plus, si les derniers versements
relatifs a un nombre inferieur a 5% des actions a versements representees par
les recus de versement n'ont pas ete dument recus apres la date de reglement
selon ce qui a ete decrit a la presente condition 3(ii), les actions a
versements qui demeurent assujetties au transport en gage doivent etre
vendues aux termes de l'alinea (B) ci-dessus. Si le total du produit de la
vente des actions afferentes qu'attestent les recus de versement en
circulation qui sont ainsi vendues et tout interet gagne sur ceux-ci ou a
l'egard de leur produit est inferieur au total des derniers versements et des
couts de la vente, le porteur inscrit du present recu de versement demeurera
redevable envers l'actionnaire-vendeur, sur demande, d'un montant egal a la
partie de l'insuffisance qui revient au porteur inscrit, calculee selon le
ratio entre les actions afferentes ainsi vendues qu'attestent ses recus de
versement et l'ensemble des actions afferentes qui sont ainsi vendues.
4. Des execution, par lui, des exigences enoncees a la condition 3(i) a ou
avant la date de reglement, le porteur inscrit est habilite, sauf ainsi que
prevu a la condition 8 ou dans la convention de recus de versement, a recevoir
un certificat pour les actions afferentes qu'atteste le present recu de
versement.
5. (i) La Societe et le gardien reconnaitront le porteur inscrit d'un recu de
versement comme son proprietaire absolu et ne sauraient etre tenus de tenir
compte de tout avis aux termes de toute fiducie expresse, implicite ou
determinee par la loi a laquelle il pourrait etre assujetti ni de voir a
l'execution d'une telle fiducie.
(ii) Le present recu de versement peut, entre le cedant et le cessionnaire,
etre cede par simple tradition une fois dument endosse ou accompagne d'un acte
de cession en une forme appropriee a cette fin.
(iii)Sous reserve de l'alinea (ii) ci-dessus, chaque acte de cession doit
etre envoye au Centre de gestion mobiliere du gardien a Toronto et etre
accompagne du present recu de versement et toute autre preuve que le gardien
peut exiger afin de prouver le titre de propriete ou le droit a la cession. La
remise du present recu de versement et d'un acte de cession signe conformement
a la presente condition constitue une autorisation suffisante pour que le
gardien consigne au registre la ou les personnes nommees dans l'acte comme en
etant le ou les porteurs inscrits et, des cette ecriture faite, la ou les
personnes ainsi inscrites sont assujetties aux obligations imposees par la
convention de recus de versement et habilitees a se prevaloir des droits
qu'elle confere, a l'exclusion de l'acquereur initial et de tout acquereur
intermediaire au titre des actions a versements qu'atteste le present recu de
versement. La personne remettant lesdits documents est reputee garantir son
autorisation a le faire en tant que cessionnaire qui y est nomme ou en son
nom.
(iv) Le gardien reconnaitra le porteur inscrit comme etant admissible aux
droits attestes par le present recu de versement, libres de toute creance,
compensation ou demande reconventionnelle de la part du gardien contre :
a) l'acquereur initial ou tout acquereur intermediaire des actions a
versements que le present recu de versement atteste, quelle que soit la
facon dont cela survient; ou
b) le porteur inscrit, a moins que la demande en question ne decoule de la
convention de recus de versement;
le tout etant assujetti aux droits de l'actionnaire-vendeur aux termes de
la convention precitee.
6. Le porteur inscrit possede certains droits aux dividendes verses et
distributions faites par la Societe, y compris, sous reserve de la convention de
recus de versement, le droit de recevoir du gardien tous dividendes verses au
comptant sur des actions afferentes et le droit d'exercer les voix s'y
rattachant.
7. La convention de recus de versement contient certaines restrictions quant
aux obligations et devoirs des parties a cette convention vis-a-vis du porteur
inscrit.
8. Le gardien peut exiger, de temps a autre, que le porteur inscrit signe ou
fournisse les documents et fournisse les renseignements qui, a son avis
raisonnable, pourraient etre necessaires ou appropries afin de se conformer a
toute loi ou tout reglement fiscal ou autre ayant trait au present recu de
versement ou aux actions afferentes qu'il atteste. Les parties a la convention
de recus de versement et le porteur inscrit reconnaissent que le gardien ne
saurait etre redevable de tous impots, droits ou frais gouvernementaux qui
pourraient devenir payables a l'egard du present recu de versement ou des droits
qu'il represente ou de toutes actions afferentes que ce soit aux termes de toute
loi ou de tout reglement fiscal actuel ou futur ou de tout autre loi ou
reglement et, sauf ainsi que precise dans la convention precitee, ceux-ci sont
payables par le porteur inscrit au gardien. Le defaut d'un porteur inscrit
d'effectuer un tel paiement pourrait entrainer la retenue, par le gardien, d'un
montant correspondant a ce paiement a meme tous dividendes ou toutes autres
distributions envisages par la convention precitee ou le refus de livrer le
certificat representant les actions afferentes.
9. Copie de la convention de recus de versement peut etre examinee au bureau
du gardien alors designe a cette fin et etre obtenue sur demande au gardien,
moyennant des frais raisonnables.
10. PAR SON INSCRIPTION AU REGISTRE, LE PORTEUR INSCRIT RECONNAIT ET EST
PRESUME DE FACON CONCLUANTE RECONNAITRE QU'IL EST LIE PAR LA CONVENTION DE RECUS
DE VERSEMENT, QU'IL ACCEPTE D'ETRE TENU AU PAIEMENT DES OBLIGATIONS A L'EGARD
DES ACTIONS AFFERENTES QU'ATTESTE LE PRESENT RECU DE VERSEMENT, Y COMPRIS,
NOTAMMENT, L'OBLIGATION DE REALISER LE DERNIER VERSEMENT QUANT A CHAQUE ACTION
AFFERENTE, QUE CES ACTIONS AFFERENTES SONT ET CONTINUERONT D'ETRE TRANSPORTEES
EN GAGE EN FAVEUR DE L'ACTIONNAIRE-VENDEUR AUX TERMES DE LA CONVENTION PRECITEE
COMME SURETE DE SES OBLIGATIONS A LEUR EGARD, QUE SES DROITS AU TITRE DE CES
ACTIONS AFFERENTES SONT ET CONTINUERONT D'ETRE ASSUJETTIS AUX DISPOSITIONS DE LA
CONVENTION PRECITEE, QUE LE TRANSPORT EN GAGE CONTENU DANS LA CONVENTION
PRECITEE EST ET DEMEURERA VALIDE NONOBSTANT TOUTE CESSION ANTERIEURE, SIMULTANEE
OU SUBSEQUENTE OU TOUTE AUTRE OPERATION VIS-A-VIS DES RECUS DE VERSEMENT QUI
REPRESENTENT DE TEMPS A AUTRE CES ACTIONS AFFERENTES ET LES DROITS QU'ELLES
ATTESTENT OU QUI EN DECOULENT ET QU'IL SERA REDEVABLE DE TOUTE INSUFFISANCE DU
PRODUIT ISSU DE L'ALIENATION DE CES ACTIONS AFFERENTES ET DE TOUTE AUTRE SURETE
AUX TERMES DE CE TRANSPORT EN GAGE.
11. Les parties aux presentes reconnaissent que la langue anglaise regira le
recu de versement et la convention de recus de versement ainsi que tout document
s'y rapportant ou livre aux termes de ceux-ci.
12. La signature de tout endos des presentes doit correspondre au nom tel qu'il
apparait au recto du present recu de versement et y correspondre en tous points,
sans modification aucune. Si l'endos est signe par un mandataire, executeur
testamentaire, administrateur successoral, fiduciaire ou tuteur, le signataire
doit donner sa pleine qualite pour agir a ce titre et fournir une preuve
appropriee de cette autorite a agir. Si le gardien ne l'a pas en dossier, une
telle preuve doit etre expediee avec le present recu de versement. Tous les
endos ou cessions concernant le present recu de versement doivent etre attestes
par une banque ou societe de fiducie canadienne ou un membre reconnu d'une
bourse dont la signature est connue du gardien.
TRANSFER FORM - FORMULE DE CESSION
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
the within Instalment Receipt and the rights and obligations of the undersigned
thereunder.
CONTRE VALEUR RECUE, le soussigne vend, cede et transfere a
le present recu de versement et ses droits et obligations aux termes de celui-
ci.
(Please print or typewrite name, address and social insurance number of
transferee) -(Inscrire le nom, adresse et numero d'assurance sociale du
cessionnaire en lettres moulees ou a la machine)
Dated
Le 199
(Transferor) - (Cedant)
Signature guaranteed / Signature attestee par:
<PAGE>
EXHIBIT 3.4(i)(c)
DRAFT: JULY 26, 1996
-----
FMC CORPORATION
- AND -
MERIDIAN GOLD INC.
- AND -
CIBC WOOD GUNDY SECURITIES INC.
NESBITT BURNS INC.
FIRST MARATHON SECURITIES LIMITED
RBC DOMINION SECURITIES INC.
BUNTING WARBURG INC.
MIDLAND WALWYN CAPITAL INC.
- AND -
THE TRUST COMPANY OF BANK OF MONTREAL
- AND -
THE R-M TRUST COMPANY
INSTALMENT RECEIPT AND PLEDGE AGREEMENT
JULY 31, 1996
<PAGE>
TABLE OF CONTENTS
PAGE NO.
ARTICLE 1
DEFINITIONS
1.1 Definitions.................................................... 2
ARTICLE 2
SALE AND PLEDGE OF SHARES
AND CREATION AND ISSUE OF INSTALMENT RECEIPTS
2.1 Sale and Pledge of Shares...................................... 7
2.2 Delivery of Share Certificate to Security Agent................ 7
2.3 Issuance of Instalment Receipt................................. 8
2.4 Beneficial Ownership........................................... 9
2.5 Legend......................................................... 9
2.6 Application for and Maintenance of Listing..................... 10
ARTICLE 3
PLEDGE OF SHARES
3.1 Pledge......................................................... 10
3.2 Delivery of Pledged Collateral................................. 11
3.3 Release of Pledged Collateral.................................. 12
3.4 Realization on Pledged Collateral.............................. 12
3.5 Liability of Security Agent and Custodian...................... 15
3.6 Risk of Loss................................................... 15
3.7 Continuing Pledge and Termination.............................. 16
3.8 Covenant of the Security Agent................................. 16
3.9 Securities Qualification....................................... 16
ARTICLE 4
TRANSFERS OF INSTALMENT RECEIPTS
4.1 Title to Instalment Receipts................................... 17
4.2 Transfers of Instalment Receipts............................... 17
4.3 Assumption by Transferee and Release of Transferor............. 18
4.4 Deemed Warranty................................................ 19
ARTICLE 5
PAYMENT OF FINAL INSTALMENT
5.1 Sending of Final Instalment Notices............................ 19
5.2 Payment of Final Instalment.................................... 20
5.3 Default in Payment of Final Instalment......................... 21
5.4 Legended Share Certificates.................................... 21
5.5 Securities Qualification Requirements.......................... 22
ARTICLE 6
RIGHTS AND OBLIGATIONS OF REGISTERED HOLDERS
2
<PAGE>
6.1 Payment of Final Instalment and Receipt of Related Shares...... 22
6.2 Cash Dividends................................................. 23
6.3 Distributed Property, Excess Dividends and Stock Dividends..... 23
6.4 Treatment of Withholding Taxes............................... . 25
6.5 Meetings of the Company and Voting........................... . 29
6.6 Generally.................................................... . 30
6.7 Meetings..................................................... . 31
6.8 Transfers of Instalment Receipts............................. . 31
6.9 Shares Represented by Instalment Receipts.................... . 31
6.10 Additional Instalment Receipts............................... . 32
6.11 Notices, Reports, etc........................................ . 32
6.12 Examination of Records....................................... . 32
6.13 Record Dates................................................. . 32
6.14 Rights on Wind-up............................................ . 32
6.15 Cash Distributions........................................... . 33
6.16 Records of Custodian Binding on Registered Holders............. 34
6.17 Transfer of Selling Shareholder's Right to Receive Payments.... 34
ARTICLE 7
THE CUSTODIAN AND THE SECURITY AGENT
7.1 Appointment and Qualifications............................. .. 34
7.2 Termination of Appointment.................................... 34
7.3 Notice of Change of Custodian................................. 35
7.4 Consequences of Change of Custodian........................... 35
7.5 Remuneration of Custodian and Security Agent.................. 36
7.6 The Register.................................................. 36
7.7 Transfer Facilities........................................... 37
7.8 Documents Forwarded to the Selling Shareholder................ 37
7.9 No Indemnity.................................................. 37
7.10 Custody of Funds.............................................. 37
ARTICLE 8
EXTENT OF DUTIES
8.1 Respective Obligations and Duties.............................. 38
8.2 Action on Behalf of Registered Holders......................... 39
8.3 Indemnification................................................ 39
8.4 Reliance on Minutes............................................ 41
8.5 No Entitlement to Indemnity.................................... 41
8.6 Conflict of Interest........................................... 42
ARTICLE 9
MEETINGS OF REGISTERED HOLDERS
9.1 Convening of Meetings.......................................... 42
9.2 Notice of Meetings............................................. 42
9.3 Quorum......................................................... 43
9.4 Chairman....................................................... 43
9.5 Attendance by Selling Shareholder, Custodian and the Company... 43
3
<PAGE>
9.6 Voting......................................................... 43
9.7 Chairman's Declarations........................................ 44
9.8 Polls.......................................................... 44
9.9 Objections and Errors.......................................... 44
9.10 Adjournments................................................... 44
9.11 Time and Place of Polls........................................ 45
9.12 Entitlement to Vote............................................ 45
9.13 Form of Proxy.................................................. 45
9.14 Identity of Proxy.............................................. 45
9.15 Lodging of Proxies............................................. 46
9.16 Special Resolution............................................. 46
9.17 Special Resolution Binds All................................... 47
9.18 Meaning of Special Resolution.................................. 47
9.19 Resolutions in Writing......................................... 47
9.20 Minutes........................................................ 47
9.21 Other Procedural Matters....................................... 47
ARTICLE 10
MISCELLANEOUS
10.1 Notices........................................................ 48
10.2 Power to Amend................................................. 48
10.3 Compliance with Laws and Regulations........................... 49
10.4 Articles and By-laws of the Company and General Rights......... 49
10.5 Waiver......................................................... 49
10.6 Further Assurances............................................. 49
10.7 Termination.................................................... 50
10.8 Liability of Joint Holders..................................... 50
10.9 Assignment, Successors and Assigns............................. 50
10.10 Governing Law.................................................. 50
10.11 Counterparts................................................... 51
10.12 Document in English............................................ 51
SCHEDULE 1.1
Form of Instalment Receipt
SCHEDULE 5.1(a)
Form of Notice of Payment of Final Instalment
SCHEDULE 10.1(a)
Addresses for Notice
4
<PAGE>
-5-
INSTALMENT RECEIPT AND PLEDGE AGREEMENT
THIS AGREEMENT is made as of the 31st day of July, 1996
AMONG:
FMC CORPORATION, a corporation incorporated under the laws of Delaware
(the "Selling Shareholder")
- AND -
MERIDIAN GOLD INC., a corporation incorporated under the laws of
Canada (the "Company")
- AND -
CIBC WOOD GUNDY SECURITIES INC., NESBITT BURNS INC., FIRST MARATHON
SECURITIES LIMITED, RBC DOMINION SECURITIES INC., BUNTING WARBURG INC.
AND MIDLAND WALWYN CAPITAL INC. (collectively, the "Underwriters")
- AND -
THE TRUST COMPANY OF BANK OF MONTREAL, a trust company incorporated
under the laws of Canada (the "Custodian")
- AND -
THE R-M TRUST COMPANY, a trust company incorporated under the laws of
Canada (the "Security Agent").
WHEREAS:
The Selling Shareholder has agreed to sell to the Underwriters 53,506,363
common shares (the "Shares") in the capital of the Company on the terms set
forth in an agreement dated July 23, 1996 (the "Underwriting Agreement") among
the Selling Shareholder, the Company and the Underwriters, at $5.00 per share
and which Shares have been offered for sale under the prospectus of the Company
dated July 23, 1996 (the "Prospectus").
The purchase price of the Shares is payable in two instalments in the
amounts and on the
<PAGE>
-6-
dates set out in the Underwriting Agreement and this Agreement; the Underwriters
will, on payment of the First Instalment (defined below), be issued Instalment
Receipts (defined below) in accordance with this Agreement; the Registered
Holders (defined below) will be entitled, on payment of the Final Instalment
(defined below) in the amount, within the time period and on the other terms set
forth in this Agreement, to become the registered holders of and to be delivered
the Shares.
Each Share is offered on the basis that, until the Final Instalment shall
be paid in respect thereof, such Share is pledged to the Selling Shareholder to
secure the payment of the Final Instalment, all in accordance with this
Agreement, and shall be registered in the name of and shall be held by the
Security Agent for and on behalf of the Selling Shareholder in connection with
the Pledge.
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained in this Agreement and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties agree as
follows:
ARTICLE
DEFINITIONS
-----------
DEFINITIONS
-----------
In this Agreement and the Schedules, unless the context otherwise requires, the
following terms shall have the following meanings:
"ACT" means the Canada Business Corporations Act, R.S.C. 1985, c.C-44, as
amended;
"AGENTS" shall have the meaning in subsection 8.3(a);
"AGREEMENT" means this agreement as the same may be amended;
"ARTICLES" means the articles of amalgamation of the Company and the word
"articles" in this definition has the meaning provided under subsection 2(1) of
the Act;
"BUSINESS DAY" means a day which is not a Saturday or Sunday or a day on which
banks in Toronto are authorized or obligated by law to close;
"CLOSING" means the closing of the purchase from the Selling Shareholder of the
Shares by the Underwriters pursuant to the Underwriting Agreement;
"COMPANY" means Meridian Gold Inc.;
<PAGE>
-7-
"COMPLETION DATE" means July 31, 1997;
"COMPLETION TIME" means 5:00 p.m. (Toronto time) on the Completion Date, being
the time at which the Final Instalment is due and payable;
"CONDITIONS" means the terms and conditions endorsed on the Instalment Receipts;
"CUSTODIAN" means The Trust Company of Bank of Montreal, or such other trust
company as may be appointed by the Selling Shareholder to act as Custodian
pursuant to Article 7, and any reference to presentation, surrender or delivery
to the Custodian means presentation, surrender or delivery, to the Custodian at
its Toronto Securities Services Centre;
"DEFAULTED INSTALMENT RECEIPT" means an Instalment Receipt in respect of which
payment in full of the Final Instalment for the Related Shares was not made when
due;
"DEFAULTING PURCHASER" means a Registered Holder as of the Completion Time of a
Defaulted Instalment Receipt;
"DISTRIBUTED PROPERTY" means any (i) securities, (ii) options, rights or
warrants to purchase any securities, (iii) securities convertible into or
exchangeable for securities, property or other assets, (iv) evidences of
indebtedness, or (v) other property or assets, in each case whether of the
Company or of any other person, distributed or issued by the Company or any of
its subsidiaries or affiliates to all, or substantially all, of the holders of
Common Shares, including, without limitation, (a) any of the foregoing
distributed or issued upon a liquidation, dissolution or winding-up of the
Company, and (b) any right, option, warrant or other security issued under a
shareholder protection rights plan after the same has been separated from a
related Common Share; but not including cash dividends and Stock Dividends;
"DISTRIBUTION" shall have the meaning in subsection 6.4(b);
"EXCESS DIVIDEND(S)" means at any date in any particular calendar year prior to
the Completion Date, the amounts (calculated without duplication) which are the
aggregate of (i) the amount, if any, by which in such calendar year the
aggregate of all cash dividends and distributions declared and paid in respect
of the Shares during such calendar exceeds $0.50 per common share, (ii) all cash
paid in respect of the Shares on a Reorganization, and (iii) all cash paid in
respect of the Shares on a liquidation, dissolution or winding up of the
Company, but not including amounts previously paid as Excess Dividends;
"FINAL INSTALMENT" means the instalment of the purchase price for the Shares in
the amount of $2.50 per Share which is due and payable to the Selling
Shareholder by the Registered Holders after the Closing and on or before the
Completion Time, as more fully set forth in this Agreement, as such amount may
be reduced to the extent of any remittance to the Selling Shareholder pursuant
to section
<PAGE>
-8-
6.3;
"FIRST INSTALMENT" means the instalment of the purchase price for the Shares in
the amount of $2.50 per Share (or U.S. $1.8228 per share in the case of U.S.
purchasers which elect to pay the first instalment in U.S. dollars) which,
pursuant to the Underwriting Agreement, is due and payable to the Selling
Shareholder by the Underwriters on the Closing;
"FIRST NAMED" means, in relation to joint Registered Holders, in respect of a
particular holding of Instalment Receipts the person named first in respect
thereof in the Register;
"INSTALMENTS" means the First Instalment and the Final Instalment;
"INSTALMENT RECEIPT" means an instalment receipt in the form of Schedule 1.1 to
this Agreement evidencing the rights of, together with the obligations assumed
by, a Registered Holder of an instalment receipt in respect of the Related
Shares which includes, among other things (i) an acknowledgement of the Selling
Shareholder that the First Instalment has been paid; (ii) the obligation to pay
the Final Instalment; and (iii) the right to receive a Share Certificate for the
aggregate number of Shares set forth in the Instalment Receipt Certificate upon
due payment of the Final Instalment and compliance with all other terms and
conditions hereof;
"INTERMEDIARY" shall have the meaning in subsection 4.2(c);
"MEETING" shall have the meaning in section 9.1;
"PAYMENT DATE" shall have the meaning in subsection 6.4(b);
"PAYMENT OBLIGATION" means the obligation of a Registered Holder to pay to the
Selling Shareholder the Final Instalment and any Costs of Sale as set out in
subsection 3.4(b) which may become payable in respect of the Related Shares
represented by an Instalment Receipt, pursuant to this Agreement;
"PLEDGE" means the pledge by the Underwriters of the Shares to secure the
Payment Obligation pursuant to Article 3;
"PLEDGED COLLATERAL" shall have the meaning in section 3.1;
"PROCEEDS" means the net cash proceeds realized by the Custodian or the Security
Agent (after deducting all costs incurred in connection with such sale and any
Taxes, charges or governmental impositions) upon any sale or other disposition
of any Distributed Property that is distributed by the Company and required to
be sold in accordance with Article 6;
"PROSPECTUS" has the meaning in Recital 1;
<PAGE>
-9-
"REGISTER" means the registers, books or other records which are kept by the
Custodian or which the Custodian causes to be kept under section 7.6;
"REGISTERED HOLDER" means at any time, the person shown in the Register at that
time as the holder of an Instalment Receipt and, where the context so admits,
includes each joint holder of any such Instalment Receipt;
"REGISTRAR" means The Trust Company of Bank of Montreal or such other or further
person as may be appointed by the Company to act as the transfer agent and
registrar in respect of its common shares;
"REORGANIZATION" has the meaning in section 6.9;
"REGULATION S" means Regulation S as adopted by the United States Securities and
Exchange Commission under the U.S. Securities Act;
"RELATED SHARE" in relation to any Instalment Receipt means (i) the Share for
which such Instalment Receipt represents beneficial ownership, and (ii) in the
event any Stock Dividend is declared and paid, the Stock Dividend paid in
respect of such Share, and (iii) in the event any Distributed Property is
distributed, prior to any sale thereof in accordance with subsection 6.3(a), the
Distributed Property distributed in respect of such Share;
"SHARE CERTIFICATE" has the meaning in section 2.1;
"SCHEDULES" means collectively Schedules 1.1, 5.1(a) and 10.1(a) to this
Agreement;
"SECURITY AGENT" means The R-M Trust Company or such other corporation as may
from time to time be appointed by the Selling Shareholder, as provided in
Article 7, to act as Security Agent;
"SHARES" means the 53,506,363 common shares of the Company referred to in
Recital 1 which are purchased on the terms of the Underwriting Agreement and
such other securities as are, before the termination of this Agreement, added
thereto, or substituted therefor as a result of the exercise of the
Underwriters' over-allotment option in accordance with the Underwriting
Agreement, the amendment of the Articles, a Reorganization or otherwise;
"SPECIAL RESOLUTION" shall have the meaning in section 9.18;
"STOCK DIVIDEND" means a dividend declared on all or substantially all of the
common shares of the Company and payable by the issuance or distribution of
common shares of the Company;
"TAXES" means any taxes, duties or governmental charges or levies, including
without limitation, Withholding Tax, which may become payable in respect of any
Instalment Receipts or Related
<PAGE>
-10-
Shares or rights represented thereby or distributions in respect thereof, and
interest and penalties in respect thereof, liability for payment, collection or
remittance of which may be lawfully asserted against any of the Selling
Shareholder, the Company, the Custodian or the Security Agent as the result of
any transaction herein contemplated, whether under any present or future fiscal
or other law or regulation.
"UNDERWRITING AGREEMENT" shall have the meaning in Recital 1;
"UNITED STATES"and"U.S. PERSON" have the respective meanings given by Regulation
S;
"WITHHOLDING TAX" means withholding tax levied under Part XIII of the Income
Tax Act (Canada) or taxing statute of any other jurisdiction and includes any
similar tax hereafter levied in addition to or in substitution therefor, and any
penalties or interest in respect thereof; and
"U.S. SECURITIES ACT" means the United States Securities Act of 1933, as amended
and the rules and regulations of the United States Securities and Exchange
Commission thereunder.
Words importing the singular number include the plural and vice versa and
words importing gender include the masculine, feminine and neuter genders.
In the event any one or more of the provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect, the validity,
legality or enforceability of the remaining provisions shall not in any way be
affected or impaired.
The headings are for convenience of reference only and shall not affect the
interpretation of the provisions to which they relate or of any other
provisions.
In the event of any inconsistency between the provisions in any of the
sections of this Agreement and any one or more of or any part of the Schedules
which form a part of this Agreement, the provisions in such sections shall
prevail.
ARTICLE
SALE AND PLEDGE OF SHARES
AND CREATION AND ISSUE OF INSTALMENT RECEIPTS
---------------------------------------------
SALE AND PLEDGE OF SHARES
-------------------------
Upon the payment to the Selling Shareholder by the Underwriters, at the Closing,
of the First Instalment with respect to the Shares purchased by the Underwriters
and the delivery by the Selling Shareholder to the Underwriters of one share
certificate (the "Share Certificate") in the name of CIBC Wood Gundy Securities
Inc. evidencing the Shares purchased by the Underwriters, as
<PAGE>
-11-
contemplated by the Underwriting Agreement and pursuant thereto:
each Underwriter
agrees and covenants to pay the Payment Obligation in respect of such
Shares purchased by such Underwriter;
acknowledges that the Shares purchased by it are evidenced by the
Share Certificate;
shall pledge such Shares purchased by such Underwriter pursuant to the
Pledge set out in Article 3 to secure its obligations to satisfy in
full the Payment Obligation in respect of such Shares; and
irrevocably authorizes and directs CIBC Wood Gundy Securities Inc. on
its behalf to deliver the Share Certificate to the Selling
Shareholder, pursuant to the Pledge, endorsed in blank for transfer or
accompanied by a stock transfer power; and
CIBC Wood Gundy Securities Inc. shall deliver, for and on behalf of each
Underwriter in respect of the Shares purchased by such Underwriter, the
Share Certificate to the Selling Shareholder, pursuant to the Pledge,
endorsed in blank for transfer or accompanied by a stock transfer power.
DELIVERY OF SHARE CERTIFICATE TO SECURITY AGENT
-----------------------------------------------
Forthwith after taking possession of the Share Certificate as described in
section 2.1, the Selling Shareholder shall deliver the Share Certificate to the
Security Agent, as agent solely of the Selling Shareholder, to hold such
certificate for and on behalf of the Selling Shareholder in order to continue
the Selling Shareholder's possession of such certificate in connection with the
Pledge. The Security Agent shall promptly deliver such certificate to the
Registrar, instruct the Registrar to register the Shares in the name of the
Custodian, take possession of a share certificate in respect of such Shares and
such Shares shall be held by the Security Agent in accordance with this
Agreement.
ISSUANCE OF INSTALMENT RECEIPT
------------------------------
Concurrently with the registration of the Shares as described in section
2.2, the Selling Shareholder shall cause the Custodian to execute and issue
an Instalment Receipt representing the Shares, registered in the name of
CIBC Wood Gundy Securities Inc. (as nominee for each of the Underwriters)
and shall deliver the Instalment Receipt to CIBC Wood Gundy Securities Inc.
or as it may direct. Upon issuance and delivery of the Instalment Receipt,
CIBC Wood Gundy Securities Inc. shall thereby assume and be deemed to have
assumed the Payment Obligations of the other Underwriters in respect of the
Shares and shall thereby acknowledge and be deemed to have acknowledged the
continuation of the
<PAGE>
-12-
Pledge, and each of the Underwriters (other than CIBC Wood Gundy Securities
Inc.) shall cease to have any further rights with respect to the Shares
(except any rights they have so long as CIBC Wood Gundy Securities Inc. or
any other person is a nominee Registered Holder of Instalment Receipts
representing Shares beneficially owned by them) and shall cease to have any
further obligations (including the Payment Obligations) with respect to the
Shares (except any obligations they owe to CIBC Wood Gundy Securities Inc.
or any other person so long as such person is a nominee Registered Holder
of Instalment Receipts representing Shares beneficially owned by them),
except in each case as provided in section 4.3 in respect of any
Underwriter who subsequently becomes a Registered Holder of an Instalment
Receipt.
FORM OF INSTALMENT RECEIPTS
---------------------------
Instalment Receipts:
shall be substantially in the form set out in Schedule 1.1 (with such
amendments as may from time to time be made in accordance with the
provisions hereof);
shall be signed and countersigned by or on behalf of the Custodian by
any officer or agent of the Custodian appointed by it for the purpose;
and
may be endorsed with or have incorporated in the text such legends or
recitals or changes not inconsistent with this Agreement as may be
required to comply with any applicable laws or regulations or with the
by-laws and regulations of any securities exchange on which Instalment
Receipts may be listed to conform with any usage, or to indicate any
special limitations or restrictions to which any Instalment Receipts
are subject.
BENEFICIAL OWNERSHIP
--------------------
Subject to the terms and conditions of this Agreement and the Pledge,
immediately after the steps set forth in sections 2.1, 2.2 and 2.3, beneficial
ownership of the Shares will be represented by the Instalment Receipts.
LEGEND
------
Each Instalment Receipt initially issued to a U.S. person (and all Instalment
Receipts issued in exchange therefor or in substitution or transfer thereof)
shall bear the following legend:
"THE SECURITIES REPRESENTED HEREBY WERE INITIALLY ISSUED ON JULY 31, 1996
AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH
<PAGE>
-13-
SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE
COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF
APPLICABLE, OR (D) IN COMPLIANCE WITH CERTAIN OTHER PROCEDURES SATISFACTORY
TO THE COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. A NEW
CERTIFICATE, BEARING NO LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD
DELIVERY", MAY BE OBTAINED FROM THE COMPANY'S TRANSFER AGENT (CURRENTLY THE
TRUST COMPANY OF BANK OF MONTREAL) UPON DELIVERY OF THIS CERTIFICATE AND A
DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE TRANSFER AGENT AND
THE COMPANY, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED
HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT.";
provided, that if such Instalment Receipts are being sold or transferred under
clause (B) above, the legend may be removed by providing a declaration to the
Custodian to the following effect (or as the Company may prescribe):
"The undersigned (A) acknowledges that the sale of the securities of
Meridian Gold Inc. (the "Company") to which this declaration relates is
being made in reliance on Rule 904 of Regulation S under the United States
Securities Act of 1933, as amended (the "1933 Act"), and (B) certifies that
(1) the seller is not an affiliate of the Company as defined in Rule 405
under the 1933 Act, (2) the offer of such securities was not made to a U.S.
person and either (a) at the time the buy order was originated, the buyer
was not a U.S. person, or the seller and any person acting on its behalf
reasonably believed that the buyer was not a U.S. person, or (b) the
transaction was executed in, on or through the facilities of The Toronto
Stock Exchange or any other designated offshore securities market as
defined in Regulation S under the 1933 Act and neither the seller nor any
person acting on its behalf knows that the transaction has been prearranged
with a buyer which is a U.S person and (3) neither the seller, nor any
affiliate of the seller nor any person acting on their behalf has engaged
or will engage in any directed selling efforts in the United States in
connection with the offer and sale of such securities, (4) the sale is bona
fide and not for the purpose of "washing off" the resale restrictions
imposed because the securities are "restricted securities" (as such term is
defined fin Rule 144(a)(3) under the 1933 Act), (5) the seller does not
intend to replace the securities sold in reliance on Rule 904 under the
1933 Act with fungible unrestricted securities and (6) the contemplated
sale is not a transaction, or part of a series of transactions which,
although in technical compliance with Regulation S, is part of a plan or
scheme to evade the registration provisions of the 1933 Act. Terms used
herein have the meanings given to them by Regulation S under the 1933 Act."
Prior to the issuance of the Instalment Receipts, the Underwriters shall notify
the Custodian concerning which Instalment Receipts are to bear the legend
described in this section 2.5 and the Custodian will thereafter maintain a list
of all Registered Holders of legended Instalment Receipts. The Custodian and the
Company will cause the Registrar to issue legended common share certificates in
accordance with section 5.4.
APPLICATION FOR AND MAINTENANCE OF LISTING
------------------------------------------
<PAGE>
-14-
The Company confirms that application has been made for the Instalment Receipts
to be listed for trading on The Toronto Stock Exchange and the Shares to be
listed for trading on The Toronto Stock Exchange and the New York Stock Exchange
and the conditional approval of The Toronto Stock Exchange has been obtained, on
the basis that the Instalment Receipts and the Shares will be listed and posted
for trading as soon as possible. The Company and the Selling Shareholder
undertake to use all reasonable efforts to satisfy all of the conditions of such
conditional approval as may be required for the purpose of securing such
listing. The Company and the Selling Shareholder agree to use all reasonable
efforts to maintain the stock exchange listing in respect of the Instalment
Receipts and the Shares, at the expense of the Selling Shareholder, until the
Completion Date or such earlier date as the Final Instalment shall have been
paid with respect to all outstanding Instalment Receipts.
ARTICLE
PLEDGE OF SHARES
----------------
PLEDGE
------
As continuing security for the due and punctual payment by the Registered
Holders to the Selling Shareholder of the Payment Obligations in respect of
the Shares purchased by it and any obligations of any Registered Holder in
respect of Withholding Tax and any other Taxes payable pursuant to section
6.4, each of the Underwriters pledges and grants a first fixed and specific
purchase money security interest to the Selling Shareholder in each of the
Shares purchased by it pursuant to the Underwriting Agreement, all
accretions thereto and substitutions therefor and all property received,
receivable or otherwise issued or distributed in respect of the Related
Shares other than any property that is properly distributed to the
Registered Holders pursuant to this Agreement (collectively, the "Pledged
Collateral"). The Underwriters and the Selling Shareholder have not agreed
to postpone the time of attachment of such security interests. Such
security interests shall attach to the pledged Shares at the time of the
Closing and shall be conclusively deemed for all purposes to continue until
full performance of the Payment Obligations with respect to such Shares,
despite any sale or transfer of, or any other dealing whatsoever in or
with, any Instalment Receipt relating thereto and the rights evidenced or
arising thereby.
In addition, as continuing security for the obligation of each Registered
Holder of an Instalment Receipt for the Payment Obligation in respect of
the Related Shares represented thereby, each Registered Holder of an
Instalment Receipt shall, by the act of so becoming and without further
instrument or formality be conclusively deemed for all purposes to have
acknowledged and confirmed the Pledge as a continuing security for the
Payment Obligation assumed by such Registered Holder referable to such
Related Shares and any obligations of such Registered Holder in respect of
Withholding Tax and any other unpaid Taxes payable pursuant to section 6.4.
<PAGE>
-15-
The Security Agent hereby agrees to hold the Pledged Collateral in Toronto,
or in such other place as the Selling Shareholder may direct, and to deal
with same only in accordance with the instructions of the Selling
Shareholder which are contained in or authorized by this Agreement.
Each Underwriter represents and warrants to the Selling Shareholder that
the Shares pledged by it pursuant to the Pledge are not subject to any
"adverse claim" as defined in Part VII of the Act created by, through or
under such Underwriter.
DELIVERY OF PLEDGED COLLATERAL
------------------------------
Notwithstanding any other provision of this Agreement, as long as any Shares are
registered in the name of the Custodian, the Company shall deliver all other
instruments representing or evidencing the Pledged Collateral in respect of such
Shares to the Security Agent to be held by the Security Agent on behalf of the
Selling Shareholder for the purposes set forth in section 3.1. All such
instruments shall be registered in the name of the Custodian, or if not, shall
be in suitable form for transfer by delivery, or shall be accompanied by
executed instruments of transfer or assignment in favour of the Security Agent,
all in form and substance satisfactory to the Security Agent and the Selling
Shareholder.
RELEASE OF PLEDGED COLLATERAL
-----------------------------
Upon payment of the Final Instalment in respect of an Instalment Receipt on or
before the Completion Time in accordance with this Agreement, including section
5.2, and any Withholding Tax and any other Taxes payable pursuant to section
6.4, the Security Agent, on behalf of the Selling Shareholder, shall discharge
and release the Pledged Collateral held in respect of such Instalment Receipt
and deliver without charge a share certificate or certificates representing the
Related Shares which are the subject of such Instalment Receipt and Distributed
Property, if any, to the Custodian for delivery to the Registered Holder and
shall direct the Registrar to register the Related Shares in the name of the
Registered Holder.
REALIZATION ON PLEDGED COLLATERAL
---------------------------------
If the Final Instalment in respect of an Instalment Receipt is not paid in
full by the Completion Time, the Selling Shareholder may, in its sole
discretion, elect to realize on the Pledged Collateral relating to such
Defaulted Instalment Receipt then remaining in the possession of the
Security Agent in either of the following ways:
Immediately following the Completion Time, the Selling Shareholder may
advise the Security Agent that the Selling Shareholder proposes to
reacquire such Pledged Collateral then remaining in the possession of
the Security Agent relating to any
<PAGE>
-16-
Defaulted Instalment Receipt in full satisfaction of the obligation of
the Registered Holder thereof to pay the Final Instalment secured
thereby and any obligation of such Registered Holder in respect of
Withholding Tax and any other unpaid Taxes payable pursuant to section
6.4, and in such event the Security Agent shall instruct the Custodian
to give such notices to the Defaulting Purchasers of the Selling
Shareholder's election to accept the Pledged Collateral, and do all
such other things, as counsel for the Selling Shareholder shall advise
are required by applicable law in order to enable such reacquisition
of the Pledged Collateral. The Security Agent shall not release the
Pledged Collateral to the Selling Shareholder until it has received an
opinion of counsel that all provisions of applicable law have been
complied with to entitle the Selling Shareholder to reacquire the
Pledged Collateral.
Immediately following the Completion Time, the Selling Shareholder may
direct the Custodian to dispose of (by one or more dispositions), on
behalf of the Selling Shareholder, all such Pledged Collateral then
remaining in the possession of the Security Agent relating to any
Defaulted Instalment Receipt, other than Defaulted Instalment Receipts
of Defaulting Purchasers against which the Selling Shareholder is
unable to enforce such a remedy (or any other remedy). The Security
Agent and Custodian hereby agree to comply with all instructions
received by each of the Security Agent and the Custodian from the
Selling Shareholder with respect to such disposition and to conduct
such disposition as soon as practicable thereafter and in a manner
consistent with good commercial practice. Such disposition by the
Custodian,
of securities which are listed and posted for trading on a stock
exchange, shall be made in accordance with the rules of that
stock exchange by private or public sale in such commercially
reasonable manner as the Custodian, in consultation with the
Selling Shareholder, shall determine, and
of any property which does not consist of listed securities shall
be made by private or public sale in such commercially reasonable
manner as the Custodian, in consultation with the Selling
Shareholder, shall determine,
provided that each disposition of property by the Custodian under this paragraph
shall be of a pro rata fraction of the Pledged Collateral in respect of each
Defaulting Purchaser (other than Defaulting Purchasers against which the Selling
Shareholder is unable to enforce such a remedy) and further provided that in the
event that payment of the Final Instalment in respect of an aggregate of less
than 5% of the Shares has not been received by the Custodian on or before the
Completion Time, the Custodian must sell such Shares pursuant to paragraph
3.4(a)(ii)).
As soon as reasonably practicable after the sale of any Pledged Collateral
pursuant to paragraph 3.4(a)(ii) above, the Custodian shall pay all of the
proceeds thereof to the Selling
<PAGE>
-17-
Shareholder until all outstanding Payment Obligations applicable to the
Defaulted Instalment Receipts (other than Defaulted Instalment Receipts of
Defaulting Purchasers against which the Selling Shareholder is unable, due
to the application of applicable law or otherwise, to enforce the remedy
under paragraph 3.4(a)(ii) above) and any obligation of such Defaulting
Purchaser in respect of Withholding Tax or other unpaid Taxes payable
pursuant to section 6.4 have been paid in full. Any such further proceeds
received by the Custodian shall as soon as practicable be paid, without
interest, to each Defaulting Purchaser as its interest may appear, less the
amounts, if any, which may be withheld from payments to such Defaulting
Purchaser pursuant to section 6.4 hereof. The "Costs of Sale", means all
reasonable expenses of every type of the Selling Shareholder incurred or
paid by or on behalf of it, whether by the Custodian or otherwise, in
connection with the realization or sale of the Pledged Collateral as
provided for in subsection 3.4(a) including, without limitation, legal and
accounting charges, financial advisor fees, brokerage fees, interest
expense equal to an amount determined by reference to the then prevailing
prime rate of the Bank of Montreal plus one per cent per annum applied to
the deficiency owing on the Final Instalments of Defaulting Purchasers
calculated daily and compounded monthly, for a period beginning on the
Final Instalment Date and ending on the date that payment under this
subsection 3.4(b) is made to the Selling Shareholder net of applicable
Withholding Tax, the cost of obtaining any orders or rulings required to be
obtained from securities regulatory authorities, underwriting fees and
charges and the costs incurred in connection with the preparation and
filing of any prospectus or other required documents; provided that,
whatever the actual amount of such expenses, for the purposes of this
Agreement the Costs of Sale payable by a Defaulting Purchaser shall not
exceed $0.50 per Share sold and any expenses of the type referred to above
in excess of $0.50 per Share sold will be the sole responsibility of the
Selling Shareholder. If the amount of the proceeds of sale or other
disposition of the Pledged Collateral attributable to Defaulting
Purchaser's Defaulted Instalment Receipts is less than the aggregate of the
outstanding Payment Obligations (together with any obligation of such
Defaulting Purchaser in respect of Withholding Tax and any other unpaid
Taxes payable pursuant to section 6.4) applicable to such Defaulting
Purchaser's Defaulted Instalment Receipts, the Defaulting Purchaser shall
be and remain liable to pay to the Selling Shareholder, on demand, an
amount equal to the deficiency.
Any payments to be made to a Defaulting Purchaser under subsection 3.4(b)
shall be made by sending a cheque to the Defaulting Purchaser to the
address of the Defaulting Purchaser, or in the case of joint Registered
Holders, to the First Named, as it appears on the Register. Every such
cheque sent through the mail shall be at the risk of the Registered Holder
and shall be made payable to the person to whom it is sent and the sending
of such cheque shall satisfy and discharge all liability for the amount
thereof as between the Registered Holder on the one hand, and the
Custodian, the Security Agent, the Company and the Selling Shareholder on
the other hand, unless such cheque is not paid on presentation. Neither the
Security Agent nor the Custodian shall be responsible for any loss or delay
in transmission of such cheque. To the extent permitted by law, any such
payment which is represented by
<PAGE>
-18-
such cheque which has not been presented for payment within one year after
the date on which it was issued or which otherwise remains unclaimed for a
period of one year after such date of issue shall be paid to the Selling
Shareholder, and thereafter any Defaulting Purchaser may look only to the
Selling Shareholder for payment of the amounts due under subsection 3.4(b).
The Selling Shareholder will be entitled to receive, upon demand made to
the Custodian, any interest or other earnings on amounts held by the
Custodian. The procedures, rights and remedies set out in this section 3.4
(other than under paragraph 3.4(a)(i), which if exercised shall be in full
satisfaction of the Payment Obligation with respect to any Defaulted
Instalment Receipts and any obligation of the Defaulting Purchaser in
respect of Withholding Tax and any other unpaid Taxes payable pursuant to
section 6.4) shall be in addition to, and not in derogation of, any right
or remedy which is available to the Selling Shareholder at law against a
Defaulting Purchaser, including those of an unpaid vendor, and the exercise
of or failure to exercise any right or remedy (under applicable law or
pursuant to this section 3.4) either in whole or in part shall not bar the
exercise of any right or remedy in relation to any default to pay the
Payment Obligation (or the obligation of such Defaulting Purchaser in
respect of Withholding Tax and any other unpaid Taxes payable pursuant to
section 6.4) with respect to any Defaulted Instalment Receipts, including
the right to claim from any Defaulting Purchaser any deficiency between the
proceeds of any realization of the Pledged Collateral received by the
Selling Shareholder under this section 3.4 and the aggregate of the Payment
Obligation (together with any obligations of such Defaulting Purchaser in
respect of Withholding Tax and any other unpaid Taxes payable pursuant to
section 6.4) with respect to such Defaulting Purchaser's Defaulted
Instalment Receipts. The Selling Shareholder's inability to enforce a
remedy against any person shall not affect the Selling Shareholder's right
to enforce such remedy (or any other remedy) against any other person.
LIABILITY OF SECURITY AGENT AND CUSTODIAN
-----------------------------------------
Each of the Security Agent and the Custodian, for all purposes of the
reacquisition or realization of the Pledged Collateral pursuant to section 3.4,
shall not be liable or responsible to the Selling Shareholder or to any
Registered Holder for any delay or failure to effect realization or to give
notice of or to do any other thing required in connection with reacquisition,
for any inability to obtain the best or most favourable price for any of the
Pledged Collateral or for any accounting on realization, other than, in each
case, in respect of its own fraudulent or reckless conduct, negligence or
failure to act in a commercially reasonable manner. Each of the Custodian and
the Security Agent shall provide the Selling Shareholder and, upon request, any
Registered Holder with reasonable detail of the discharge of its respective
duties which, absent manifest error, shall as regards the Selling Shareholder be
conclusive of the settlement of accounts unless objected to by the Selling
Shareholder within 30 days after receipt of such details.
RISK OF LOSS
------------
<PAGE>
-19-
On any realization of Pledged Collateral, any decrease of the amount payable to
the Registered Holders attributable to any delay in realization or the manner of
realization, shall be solely for the account of the Registered Holders and none
of the Company, the Selling Shareholder, the Custodian or the Security Agent
shall have any liability in respect thereof.
CONTINUING PLEDGE AND TERMINATION
---------------------------------
The Pledge shall remain in full force and effect with respect to each Related
Share until such time as payment in full of the Payment Obligation and any
obligation of the Registered Holder in respect of Withholding Tax and any other
Taxes payable pursuant to section 6.4 in respect of such Related Share has been
made or if the Payment Obligation is not satisfied by the Completion Time in
respect of such Related Share, then until such time as all of the Pledged
Collateral securing the Payment Obligation relating to the Defaulted Instalment
Receipts in respect of such Related Shares shall have become the property of the
Selling Shareholder free from all rights and interests of any person whose
interest in the Pledged Collateral is subordinate to that of the Selling
Shareholder, or shall have been sold and the proceeds shall have been delivered
to the Selling Shareholder pursuant to section 3.4.
COVENANT OF THE SECURITY AGENT
------------------------------
The Security Agent hereby covenants that it will physically hold in the Province
of Ontario, all documents constituting or evidencing the Pledged Collateral,
including, without limiting the generality of the foregoing, share certificates,
cash, cheques, financial instruments or any other forms of property.
SECURITIES QUALIFICATION
------------------------
In the event that the Custodian, pursuant to this Agreement, is required to sell
Distributed Property or to dispose of, on behalf of the Selling Shareholder, any
Pledged Collateral, and in the reasonable opinion of the Selling Shareholder the
cooperation of the Company is required to facilitate the offering and sale to
the public or otherwise of such Distributed Property or Pledged Collateral, the
Selling Shareholder may request that the Company cooperate in the preparation
and filing of all documentation or the taking of all actions necessary or
desirable to effect such sale or disposition, and the Company shall, subject to
agreement among the Selling Shareholder and the Company with respect to terms
and conditions as to timing, notice, costs, indemnities and other matters, use
all reasonable efforts to cooperate in the preparation and filing of all such
documentation and cooperate in the taking of all such actions.
ARTICLE
TRANSFERS OF INSTALMENT RECEIPTS
--------------------------------
TITLE TO INSTALMENT RECEIPTS
----------------------------
<PAGE>
-20-
Subject to applicable law, the Selling Shareholder, the Company, the Custodian
and the Security Agent, notwithstanding any notice to the contrary, shall treat
the Registered Holder of an Instalment Receipt as the absolute owner for all
purposes, and shall not be bound to take notice of or to see to the execution of
any trust whether express, implied or constructive to which any Registered
Holder may be subject.
TRANSFERS OF INSTALMENT RECEIPTS
--------------------------------
A Registered Holder, other than a Defaulting Purchaser, may transfer its
Instalment Receipts in the manner and subject to the terms set out in this
Article 4, section 7.7 and in the Conditions, and the Custodian will
register all transfers received by it which comply with such provisions.
Title to Instalment Receipts shall be transferable by delivery of the
Instalment Receipt relating thereto when endorsed or accompanied by
instruments of transfer in suitable form satisfactory to the Custodian for
transfer by delivery with the same effect as in the case of a negotiable
instrument; provided that registration of transfer shall be necessary to
become a Registered Holder and that pursuant to section 4.1 the Company,
the Custodian and the Selling Shareholder shall, subject to applicable law,
treat the Registered Holder of an Instalment Receipt as the absolute owner
thereof. Notwithstanding the foregoing, title to Instalment Receipts shall
not be transferable after the Completion Time.
In the event that:
an Intermediary (as such term is defined in National Policy 41 of the
Canadian Securities Administrators) is the Registered Holder of an
Instalment Receipt at the Completion Time;
such Intermediary holds the Instalment Receipt on behalf of a person
who is not a Registered Holder in respect of such Instalment Receipt
(a "Non-registered Holder"); and
such Non-registered Holder has failed to pay in full, or cause to be
paid in full when due, to the Custodian the Final Instalment, as
applicable, in respect of the Instalment Receipts held on its behalf
by such Intermediary (any such Non-registered Holder being referred to
as a "Non-registered Defaulting Purchaser");
then, forthwith after the Completion Time but prior to the Selling
Shareholder having realized upon the Pledged Collateral relating to the
Defaulted Instalment Receipts in accordance with subsection 3.4(a) such
Intermediary may, notwithstanding the second last sentence of subsection
4.2(b), cause to be transferred into the name of such Non-registered
Defaulting Purchaser the Instalment Receipts held by such Intermediary on
behalf of such
<PAGE>
-21-
Non-registered Defaulting Purchaser, and the Custodian shall register such
transfer into the name of such Non-registered Defaulting Purchaser.
If any Instalment Receipt shall become defaced, lost or destroyed, then it
may be replaced on such terms as to evidence and indemnity as the Custodian
and Selling Shareholder may think fit, including in the case of defacement,
surrender of the defaced Instalment Receipt. In the case of loss or
destruction, the Registered Holder shall also pay to the Custodian (if
demanded) all expenses incidental to the investigation of evidence of loss
or destruction and the preparation of the form of indemnity.
To the extent not inconsistent with this Agreement, the provisions of the
Act respecting the transfer of securities shall apply, mutatis mutandis, to
the transfer of Instalment Receipts.
ASSUMPTION BY TRANSFEREE AND RELEASE OF TRANSFEROR
--------------------------------------------------
Upon becoming a Registered Holder in accordance with this Agreement, the
transferee shall be deemed to have acknowledged and agreed to be bound by the
Conditions and by this Agreement. Each transferee, by becoming a Registered
Holder, shall be deemed to have assumed the Payment Obligation of the transferor
in respect of such Instalment Receipt and to have acquired its beneficial
ownership of the Related Shares subject to the Pledge. Each transferee, by
becoming a Registered Holder, shall be deemed to confirm its assumption of such
Payment Obligation and the continuation of the Pledge, and to have agreed that
its rights and obligations in respect of the Instalment Receipts and the Related
Shares shall be governed by this Agreement. Upon the registration of each
transferee as a Registered Holder, the transferor shall cease to have any
further rights or obligations (including the Payment Obligation) under this
Agreement with respect to such Instalment Receipt or the Related Share(s),
except for amounts in respect of any unpaid Withholding Taxes and any other
unpaid Taxes payable by the transferor pursuant to section 6.4. For greater
certainty, a transferee shall include the first registered transferee of the
Instalment Receipt issued to CIBC Wood Gundy Securities Inc. pursuant to section
2.3 and a transferor shall include CIBC Wood Gundy Securities Inc. when it
transfers to a new Registered Holder the Instalment Receipt issued pursuant to
section 2.3.
DEEMED WARRANTY
---------------
A person, including a transferor, who, directly or indirectly or through
intermediaries, requests registration of the transfer of an Instalment Receipt,
is deemed to warrant its authority to do so as or on behalf of the transferee.
ARTICLE
PAYMENT OF FINAL INSTALMENT
---------------------------
<PAGE>
-22-
SENDING OF FINAL INSTALMENT NOTICES
-----------------------------------
On or after June 1, 1997, but no later than June 30, 1997, the Custodian
shall cause to be sent to each Registered Holder (or in the case of an
Instalment Receipt registered jointly in two or more names, to the First
Named) as determined on a date being not more than 14 days before the date
on which such notice is sent, a notice substantially in the form of
Schedule 5.1(a). The Custodian shall also send such notice as soon as
practicable to all persons who become Registered Holders after the record
date referred to above. Any failure to give such notice or any failure of a
Registered Holder to receive such notice shall not affect the obligations
of any Registered Holder under this Agreement;
No later than April 30, 1997, at the Selling Shareholder's expense, the
Custodian shall cause to be published (i) once in the Report on Business
section of a weekday national edition of The Globe and Mail, and (ii) once
in a French language newspaper of wide circulation in the Province of
Quebec, such as La Presse or Le Devoir, a notice stating the Completion
Time and the amount of the Final Instalment which will be due in respect of
each Share. Such notice shall also contain a statement substantially to the
following effect:
"Failure by a Registered Holder to pay to the Custodian the total
amount of the Final Instalment for the Shares that are the subject of
the Instalment Receipts and to send or deliver to the Custodian his or
her Instalment Receipt as provided in the Instalment Receipt Agreement
and at or before the Completion Time, may result in such Shares being
acquired by the Selling Shareholder in satisfaction of the obligations
of the Registered Holder in respect of such Shares, or being sold by
the Custodian, on the terms and conditions set out in the Instalment
Receipt Agreement. In the event of a sale, the Registered Holder will
be responsible for his or her portion of the Costs of Sale (to a
maximum of $0.50 per Share) and will be liable for any deficiency as
and to the extent provided for in the Instalment Receipt Agreement.
In particular, the Instalment Receipt Agreement provides that the
foregoing sale by the Custodian shall not limit any other remedies
available to the Selling Shareholder against such Registered Holder in
the event that the proceeds of such sale are insufficient to cover the
amount of the final instalment and the Costs of Sale and, accordingly,
such holder shall remain liable to the Selling Shareholder for any
such deficiency."
PAYMENT OF FINAL INSTALMENT
---------------------------
Upon presentation and surrender by a Registered Holder of an Instalment
Receipt and payment by certified cheque, bank draft or money order payable
in Canadian dollars to the Custodian at any time after the Closing and at
or prior to the Completion Time of all but not less than all of the Final
Instalment in respect of the Related Shares represented by the
<PAGE>
-23-
Instalment Receipt(s) evidenced by such Instalment Receipt and an amount
equal to any outstanding obligation of such Registered Holder in respect of
Withholding Tax or other unpaid Taxes payable pursuant to section 6.4:
the Custodian shall as soon as practicable deliver such payment to the
Selling Shareholder;
the Instalment Receipt shall be cancelled;
the Security Agent shall discharge and release the Pledged Collateral
held in respect of such Instalment Receipt pursuant to section 3.3 and
deliver such Pledged Collateral to the Custodian; and
the Custodian and the Selling Shareholder shall ensure that a share
certificate evidencing the Related Shares previously represented by
the Instalment Receipt shall be presented to the Registrar for
registration and transfer into the name of the Registered Holder on
whose behalf such payments have been made or in accordance with such
Registered Holder's instructions; subject to Part VII of the Act, the
Company shall ensure that a share certificate is registered in the
name of the Registered Holder or in accordance with the Registered
Holder's instructions; and the Custodian, in its capacity as Registrar
and transfer agent for the Shares, and the Selling Shareholder shall
ensure that such share certificate together with any Distributed
Property constituting part of the Related Shares prior to any sale
thereof in accordance with subsection 6.3(a) shall be delivered to the
Registered Holder as soon as practicable in accordance with subsection
10.1(c) or in such other manner as the Custodian shall deem
acceptable; provided that to the extent that the Related Shares
comprise Distributed Property prior to any sale thereof in accordance
with subsection 6.3(a) and a Registered Holder would not be entitled
to receive such Distributed Property in kind if such Registered Holder
were a registered holder of the common shares of the Company, the
Custodian shall, as promptly as commercially reasonable, sell or cause
to be sold the Distributed Property in respect of each Registered
Holder for cash in the market or by tender or by private contract on
such date or dates and at such price or prices as the Custodian (after
consultation with the Selling Shareholder) in its discretion shall
determine and shall remit the net proceeds thereof (net of any
Withholding Tax required to be remitted by the Custodian to the
Receiver General of Canada in respect of the Distributed Property) to
each such Registered Holder.
For greater certainty, the payment by the Registered Holder to the Custodian
shall be made free and clear, without deduction for any Withholding Taxes or
other Taxes for which the Registered Holder may be liable on payment of the
Final Instalment.
<PAGE>
-24-
DEFAULT IN PAYMENT OF FINAL INSTALMENT
--------------------------------------
The Custodian shall as soon as practicable notify the Selling Shareholder of all
Registered Holders who have failed to effect payment of the Final Instalment in
respect of any Related Shares by the Completion Time. If the Custodian has not
received payment of the Final Instalment from a Registered Holder at the
Completion Time, subject to applicable law, such Defaulting Purchaser shall have
no further right to pay such Final Instalment and to become the registered
holder of such Related Shares and the rights and obligations of such Defaulting
Purchaser shall be those set forth in section 3.4, unless the Selling
Shareholder instructs the Custodian that it wishes to waive its right to assert
the termination of such Defaulting Purchaser's rights as aforesaid in respect of
any or all of such Defaulting Purchasers pursuant to section 10.5 (but any such
waiver by the Selling Shareholder in respect of any Defaulting Purchaser (i)
shall be in the sole discretion of the Selling Shareholder and (ii) shall in no
way impair the Selling Shareholder's right to assert such right against any
other Defaulting Purchaser or the subsequent reassertion of such right, subject
to the waiver, against such Defaulting Purchaser). Notwithstanding Article 6,
the voting rights of a Defaulting Purchaser with respect to any Related Shares
represented by such Defaulting Purchaser's Defaulted Instalment Receipts shall,
upon the Completion Time, immediately cease and become vested in the Selling
Shareholder. All cash dividends with a Payment Date following the Completion
Date on Related Shares that are the subject of Defaulted Instalment Receipts
shall be dealt with as provided in section 6.2(b).
LEGENDED SHARE CERTIFICATES
---------------------------
In the event any Instalment Receipt(s) which have been delivered to the
Custodian pursuant to section 5.2 bear the legend referred to in section 2.5,
then the Company and the Custodian shall send a direction to the Registrar to
affix the share certificate or certificates in respect of the Related Shares
with the following legend:
"THE SECURITIES REPRESENTED HEREBY WERE INITIALLY ISSUED ON JULY 31, 1996
AND HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING
SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES
MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)
OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER
THE SECURITIES ACT, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF APPLICABLE, OR (D)
IN COMPLIANCE WITH CERTAIN OTHER PROCEDURES SATISFACTORY TO THE COMPANY.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN
SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. A NEW
CERTIFICATE, BEARING NO LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD
DELIVERY", MAY BE OBTAINED FROM THE COMPANY'S TRANSFER AGENT (CURRENTLY THE
TRUST COMPANY OF BANK OF MONTREAL) UPON DELIVERY OF THIS CERTIFICATE AND A
DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE TRANSFER AGENT AND
THE COMPANY, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED
<PAGE>
-25-
HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT.";
SECURITIES QUALIFICATION REQUIREMENTS
-------------------------------------
In the event that, in the reasonable opinion of the Selling Shareholder or the
Company, any prospectus or registration statement is required to be filed with,
or any permission is required to be obtained from, any governmental authority in
Canada or any other step is required under any law of Canada before any Shares
which a Registered Holder is entitled to receive under this Agreement may be
delivered and thereafter traded, the Selling Shareholder and the Company
covenant that they will take such required action, subject to agreement between
the Selling Shareholder and the Company with respect to terms and conditions as
to timing, notice, costs, indemnities and other matters relating to such action.
ARTICLE
RIGHTS AND OBLIGATIONS OF REGISTERED HOLDERS
--------------------------------------------
PAYMENT OF FINAL INSTALMENT AND RECEIPT OF RELATED SHARES
---------------------------------------------------------
The Registered Holder of an Instalment Receipt shall have the right to be
registered in the register of common shareholders of the Company and to receive
common share certificates upon payment of the Final Instalment at any time after
the Closing and at or prior to the Completion Time.
CASH DIVIDENDS
--------------
Subject to subsection 6.2(b), if the Company shall declare a dividend
payable in cash in respect of any Shares payable to holders of Shares of
record on a date after the date of this Agreement and on or before the
Completion Date, then the Selling Shareholder and the Custodian hereby
irrevocably direct the Company to pay such dividend (other than any portion
of such cash dividend that constitutes an Excess Dividend, dealt with in
subsection 6.3(b), and in the case of non-resident Registered Holders, net
of any Withholding Tax required to be remitted to the Receiver General of
Canada in respect of such cash dividend or portion thereof paid to the non-
resident Registered Holders) in respect of all Shares registered in the
name of the Custodian, to the Registered Holders as at the record date for
such dividend as determined under section 6.13 in respect of the Related
Shares to which their Instalment Receipts relate. For greater certainty,
the security interest constituted by section 3.1(a) shall be deemed to be
released in respect of any particular cash dividend, not being an Excess
Dividend paid under this section 6.2(a) from and after the date on which
the Custodian shall pay such dividend in accordance with the provisions
hereof.
Cash dividends (other than any portion which constitutes an Excess
Dividend) paid as of a record date after the Completion Date on Related
Shares previously represented by Defaulted
<PAGE>
-26-
Instalment Receipts which have not, at the time of payment, been realized
upon in accordance with section 3.4, shall be paid by the Custodian (such
funds having been made available to the Custodian by the Security Agent) to
the Selling Shareholder as a reduction of the Payment Obligations in
respect of the Defaulted Instalment Receipts of the Defaulting Purchasers.
For greater certainty, the amount paid to the Selling Shareholder shall not
be reduced by any applicable Withholding Tax and funds to satisfy such Tax
will be paid to the Receiver General of Canada by the Selling Shareholder
and may be recovered by the Selling Shareholder against the relevant
Defaulting Purchasers.
DISTRIBUTED PROPERTY, EXCESS DIVIDENDS AND STOCK DIVIDENDS
----------------------------------------------------------
Whenever after the date of this Agreement and on or before the Completion
Date, the holders of Shares are entitled to receive Distributed Property,
the Custodian, following receipt of such Distributed Property from the
Security Agent, shall, as promptly as commercially reasonable, and in a
commercially reasonable manner sell or cause to be sold the Distributed
Property including a sale for cash in the market or by tender or by private
contract on such date or dates and at such price or prices as the Custodian
(after consultation with the Selling Shareholder) in its discretion shall
determine. The Security Agent shall deliver such Distributed Property to
the purchaser or purchasers thereof at the direction of the Custodian in
order to effect such sales, and the Custodian shall unconditionally and
irrevocably direct the purchaser or purchasers of such Distributed Property
to pay the purchase price therefor (i) in an amount equal to the
Custodian's costs of disposition, to the Custodian, (ii) in an amount equal
to the purchase price less the amount referred to in (i), to the extent
such Proceeds do not exceed the amount remaining to be paid in respect of
the Final Instalment for the Shares, to the Selling Shareholder, and (iii)
in the amount of the balance, if any, to the Custodian for remittance to
the Registered Holders of Instalment Receipts, in accordance with the
following. Nothing in the foregoing sentence shall be construed as
requiring the Security Agent to deliver any Distributed Property to a
purchaser thereof prior to the concurrent receipt by the Selling
Shareholder of the Proceeds referred to in such sentence. To the extent
any portion of such Proceeds is remitted to the Selling Shareholder, such
amount shall be applied pro rata on account of the Final Instalment to be
paid in respect of each Share for which the Final Instalment has not yet
been received. To the extent any portion of such Proceeds is remitted to
the Custodian, the Custodian shall determine the pro rata portion of such
Proceeds applicable to each Share and shall, as soon as practicable, remit
to the Registered Holders of record determined on the record date for such
distribution for Distributed Property pursuant to section 6.13 hereof,
other than Defaulting Purchasers, their portion of the Proceeds from such
sale. In the case of non-resident Registered Holders, any payment made to
the Registered Holder shall be net of any Withholding Tax to be remitted by
the Custodian to the Receiver General of Canada in respect of the
distribution of Distributed Property and any other amounts which may be
withheld from payments to the Registered Holder pursuant to section 6.4.
Pending the sale of the Distributed Property, all Distributed Property will
be registered in the name of the Custodian and held by the Security
<PAGE>
-27-
Agent as Pledged Collateral.
Whenever at any time after the date of this Agreement and prior to and
including the Completion Date, any portion of a cash dividend paid by the
Company in respect of the Shares constitutes an Excess Dividend, the
Custodian, following receipt of such cash dividend by the Security Agent,
shall remit such Excess Dividend in respect of each Share, other than
Shares represented by Defaulted Instalment Receipts, for which the Final
Instalment has not yet been paid at the date of remittance, to the Selling
Shareholder in reduction pro rata of the Final Instalment to be paid in
respect of each Share for which the Final Instalment has not yet been
received. The balance of such Excess Dividend, if any, shall be remitted
to the Registered Holders of record on the record date for such cash
dividends, without interest. In the case of non-resident Registered
Holders, any payment made to the Registered Holder shall be net of any
Withholding Tax required to be remitted by the Custodian to the Receiver
General of Canada in respect of such Excess Dividend together with all
other amounts which may be withheld from payments to such Registered Holder
pursuant to section 6.4 hereof. Whenever at any time after the date of
this Agreement and prior to and including the Completion Date, an Excess
Dividend is declared, the Company shall provide the Company Listings and
Regulation Division of The Toronto Stock Exchange with at least five
trading days notice in writing prior to the record date for the payment of
such Excess Dividend and the amount of the reduction to the payment
obligation in respect of the Final Instalment that results from the payment
of such Excess Dividend. Whenever such an Excess Dividend is paid, the
Company will direct the Trust Company of Bank of Montreal (as transfer
agent for the common shares) to hand-stamp all remaining Instalment
Receipts held by it to reflect the adjustment to the payment obligation in
respect of the Final Instalment as a result of such Excess Dividend.
Following the declaration of an Excess Dividend, the Company will disclose
the adjusted amount of the Final Instalment in all relevant press releases
and receipt holder mailings, including the notice referred to in subsection
5.1(a).
Whenever after the date of this Agreement and on or before the Completion
Date, the Company shall pay and distribute to the holders of the common
shares of the Company a Stock Dividend, the Selling Shareholder and the
Security Agent hereby irrevocably direct the Company, subject to and in
accordance with section 6.4, to pay and deliver such Stock Dividends in
respect of all Shares registered in the name of the Custodian, to the
Security Agent. The Security Agent shall hold such Stock Dividends as
Pledged Collateral.
If pursuant to this section 6.3 the amount of the Final Instalment is
reduced as a result of a remittance to the Selling Shareholder, the
Custodian shall, as soon as practicable following such remittance, give a
written notice to the Registered Holders, in the manner provided in section
10.1, informing them of the reduced amount of the Final Instalment.
The Security Agent shall deliver to the Custodian, as soon as practicable,
any Distributed
<PAGE>
-28-
Property or cash to be distributed by the Custodian pursuant to subsections
6.3(a) and (b), respectively.
TREATMENT OF WITHHOLDING TAXES
------------------------------
As between each Registered Holder and the other parties hereto, no party
other than such Registered Holder shall be liable for any Taxes, including,
without limitation, Withholding Taxes, which may become payable by, on
behalf of or for the account of such Registered Holder in respect of the
Instalment Receipts, any Shares or any distributions related thereto
whether under any present or future fiscal or other laws or regulations.
In the event that the Company wishes to pay or distribute to holders of its
common shares any Excess Dividend, Stock Dividend or Distributed Property
(hereinafter, collectively, a "Distribution"), it will (i) fix a record
date (the "Record Date") for the Distribution for the purpose of
determining which of its shareholders will participate in the Distribution,
(ii) notify the Custodian and the Selling Shareholder of the Record Date
and the date on which the Distribution will be paid or made (the "Payment
Date") forthwith following the determination by the directors of the
Company of such Record Date and Payment Date, but in any event not less
than 10 Business Days prior to the Record Date, (iii) ensure that the
Record Date will precede the Payment Date by not less than 14 Business
Days, and (iv) in the event that the Company wishes to declare and pay a
Stock Dividend, ensure that (A) an amount equal to the amount of any Taxes
payable in respect of such Stock Dividend by any Registered Holder that is
not resident in Canada for the purposes of section 215 of the Income Tax
Act (Canada) (a "non-resident Registered Holder") is withheld and may be
liquidated, the proceeds of which will be remitted to the Receiver General
for Canada on behalf of each such non-resident Registered Holder and
provide evidence that such amount has been withheld and remitted; (B) 75%
of such Stock Dividend shall be delivered by the Company to the Security
Agent to hold such Stock Dividend as Pledged Collateral under the Pledge;
and (C) the remainder of such Stock Dividend (net of the amount of any
Taxes withheld in accordance with (A) above) shall be paid to the
Registered Holders and each of the Security Agent, the Selling Shareholder
and the Custodian hereby irrevocably directs the Company to pay such
remainder to the Registered Holders. The Custodian shall provide the
Company with all information necessary for the Company to determine the
amount of Taxes to be remitted on behalf of each non-resident Registered
Holder and to perform its other obligations under (A), (B) and (C).
Registered Holders shall receive cash in lieu of any fractional interests
in shares which they would otherwise be entitled to on the payment of a
Stock Dividend unless the board of directors of the Company shall otherwise
determine.
Whenever the Company proposes to make a Distribution in respect of which
the Custodian will become obligated to withhold an amount in respect of
Taxes payable by a non-resident Registered Holder, the Custodian shall
promptly upon receipt of the notice thereof in accordance with paragraph
(b) above, give to each non-resident Registered Holder a notice
<PAGE>
-29-
containing a statement of such requirement, a request that the non-resident
Registered Holder remit to the Custodian the amount of such Taxes, or the
Custodian's estimate thereof, and a statement that upon failure to remit
such payment the non-resident Registered Holder will become liable to pay
such amount to the Selling Shareholder. The request for payment shall set
out the manner in which payment is to be made, the date before which
payment must be made (which date shall precede the Payment Date in respect
of such Distribution by no less than 3 Business Days) and the consequences
of failure to make such payment.
In the event that a non-resident Registered Holder fails to remit the
payment referred to in subsection 6.4(c), and if the Custodian or the
Security Agent (in which case the Security Agent shall notify the
Custodian) shall receive a demand for or be obliged (on behalf of the
Company or otherwise) to withhold and remit any Taxes from or in respect of
a Distribution to be made or credited to, on behalf of or for the account
of such non-resident Registered Holder, the Custodian shall, and is hereby
authorized to, withhold the amount of the Taxes from the relevant
Distribution or any subsequent Distribution.
To the extent that the withholding and remittance provided for under
subsection 6.4(d) would reduce the amount of the Distribution to be
actually paid to the Security Agent and applied pursuant to section 6.3 to
an amount which is less than the amount to be so paid and applied with
respect to the Related Shares of any other Registered Holder, the Custodian
shall remit such withheld amount as provided in subsection 6.4(f) and,
notwithstanding such remittance, the withheld amount shall be deemed to
have been paid to the Selling Shareholder and applied, in accordance with
section 6.3, on account of the Final Instalment with respect to such non-
resident Registered Holder's Related Shares. The Selling Shareholder shall
be deemed to have paid on account of such Taxes on behalf of such non-
resident Registered Holder such amount as is equal to the amount withheld
by the Custodian pursuant to subsection 6.4(d) and such non-resident
Registered Holder shall be liable to pay the Selling Shareholder an amount
equal to any such amount so deemed to be paid. The Custodian shall
maintain a register evidencing the identity of and amount owing by each
such non-resident Registered Holder to the Selling Shareholder. The
Custodian may withhold any such amount owing by a non-resident Registered
Holder from any subsequent distribution or payment that would, were it not
for such withholding, have been actually made to such non-resident
Registered Holder.
Any amount withheld by the Custodian on account of Taxes, including all
such amounts deemed to be paid on behalf of the non-resident Registered
Holder by the Selling Shareholder pursuant to subsection 6.4(e), shall be
remitted by the Custodian to the appropriate government authorities within
the time required by law and evidence thereof shall be delivered to the
Company and the Selling Shareholder.
The obligation of a non-resident Registered Holder to pay to the Selling
Shareholder under this Agreement all amounts owing pursuant to subsection
6.4(e) shall survive (i) the sale or
<PAGE>
-30-
transfer of any or all of the non-resident Registered Holder's Instalment
Receipts to any other party, (ii) payment in whole or in part of the Final
Instalment in respect of the non-resident Registered Holder's Instalment
Receipts, and (iii) termination of this Agreement. The Custodian and the
Selling Shareholder shall be entitled to withhold delivery of share
certificates in respect of the Related Shares to which such non-resident
Registered Holder may be entitled until such payment has been received and
if the non-resident Registered Holder is also a Defaulting Purchaser, such
obligation may be recovered in accordance with subsection 3.4(b).
Notwithstanding the foregoing, the obligation of a non-resident Registered
Holder to pay the Selling Shareholder all amounts owing under section
6.4(e) is a personal obligation of the non-resident Registered Holder and
shall not be assumed by or deemed to be assumed by any subsequent
transferee of the Instalment Receipt or the Related Shares held by such
non-resident Registered Holder.
The Custodian from time to time at the request of the Company, acting
reasonably, shall provide to the Company such information as the Company
may reasonably request as to the Registered Holders which the Company
believes are Intermediaries. In connection with any proposed payment or
distribution to holders of its common shares of any Distribution the
Company may give to any such Intermediary notice of a Record Date and a
Payment Date in respect of such proposed Distribution and requesting the
Intermediary, if applicable, to give written notice to the Company and the
Custodian, no later than the second Business Day immediately following the
Record Date, (which notice shall only be effective if received by the
Company by such date):
that the Intermediary holds Instalment Receipts on behalf of non-
registered holders of Instalment Receipts in respect of whom Taxes
will be payable in connection with the Distribution;
providing details of the names, addresses, holdings of Instalment
Receipts, Taxes payable (if reasonably calculable by the Intermediary)
and such other details concerning such non-registered holders as the
Company or the Custodian may reasonably require; and
authorizing and directing the Company, and the Custodian to pay,
credit, withhold and remit such Taxes on account of such non-
registered holders in respect of the Distribution or to the
appropriate governmental authorities within the required time.
Upon receipt by the Custodian from an Intermediary of a proper notice in
accordance with subsection 6.4(h), the provisions of subsections 6.4(a) to
(g) shall apply, mutatis mutandis, in respect of each non-registered holder
of Instalment Receipts listed in such notice, as if each reference in the
said subsections to a Registered Holder were a reference to such non-
registered holder; provided, however, that the rights of the Custodian and
the Selling Shareholder under this section 6.4 in respect of a failure by a
non-registered holder to make
<PAGE>
-31-
payment in respect of Taxes in accordance with subsections 6.4(c) and (e),
shall continue as against the Registered Holder of the relevant Instalment
Receipts and the liability of such Registered Holder in respect thereof
shall be joint and several with any liability of such non-registered holder
in respect thereof.
Each of the Company and the Selling Shareholder shall be entitled to rely
upon the Register as being accurate, and shall not incur nor assume any
liability to any person, including any Registered Holder, for such reliance
upon the Register. In the event an Intermediary delivers a notice in
accordance with subsection 6.4(h), each of the Corporation, the Selling
Shareholder and the Custodian shall be entitled to rely upon such notice as
being accurate, and shall not incur nor assume any liability to any person,
including any Intermediary, any Registered Holder, or any non-registered
holder, for such reliance upon such notice.
The Custodian may require Registered Holders from time to time to execute
or furnish such documents as may be necessary or appropriate to comply with
any fiscal or other laws or regulations relating to the Shares.
The provisions of this section 6.4 shall apply notwithstanding any other
provisions of this Agreement.
MEETINGS OF THE COMPANY AND VOTING
----------------------------------
Whenever the Company proposes to convene a meeting of its common
shareholders, it shall give sufficient notice of such intention to the
Custodian to enable the Custodian to make appropriate preparations for
compliance with the following requirements of this section 6.5 with respect
to all Registered Holders. The Custodian or its agent shall provide the
Company with a list of the Registered Holders, together with their
addresses as set forth in the Register and the number of Related Shares
represented by the Instalment Receipt(s) held by each such Registered
Holder, to enable the Company to send to each Registered Holder, in the
manner provided in this Agreement and within all time periods required by
applicable law (including National Policy 41 of the Canadian Securities
Administrators), a copy of the notice of the meeting and all other
materials sent to the holders of common shares of the Company, at the same
date (or as soon thereafter as practicable) as such is sent to the holders
of such common shares. The Company shall, subject to receiving the
necessary co-operation from the Custodian, provide and enclose with such
copy of the notice a form of appointment whereby the Registered Holder may
appoint a person (who may be such Registered Holder) as proxy in relation
to the Related Shares to act and vote at the meeting substantially to the
same extent as if the holder of the Instalment Receipt was the registered
holder of the Related Shares. Such forms shall otherwise be drawn in such
manner and with such content as the Custodian and the Company may approve
and in any event shall be subject to compliance with the Articles and by-
laws of the Company and all applicable laws. A Registered Holder appointed
as proxy in a form of appointment may attend the meeting.
<PAGE>
-32-
If any Registered Holder following the sending of the forms referred to in
subsection 6.4(a) shall transfer its Instalment Receipt or any part thereof
or have any Related Shares sold under section 3.4, subsections 138(2) or
(3) of the Act shall apply to such Registered Holder as if such holder had
been the registered holder of the Related Shares and had transferred the
ownership thereof after the applicable record date.
If in respect of any meeting of the Company any Registered Holder fails to
exercise or is lawfully prevented from exercising its right under this
Agreement to be represented at such meeting, neither the Custodian nor the
Security Agent shall exercise at such meeting the voting rights attached to
the Related Shares and the Registered Holder shall not be entitled to
object.
Neither the Custodian nor the Security Agent shall agree to short notice or
to waive notice of any meeting of shareholders of the Company or sign a
resolution in writing pursuant to the Act without first obtaining the
authorization of Registered Holders in accordance with Article 9.
GENERALLY
---------
Where a Registered Holder, if it was registered as holder of its Related
Shares, would have some right under statute or by virtue of the Articles or
by-laws of the Company not otherwise expressly dealt with in this Article 6
(other than the right to be registered as the owner of or the right to
transfer the share certificates representing the Related Shares) then it
may give written notice to the Custodian and the Security Agent requiring
them to exercise those rights on its behalf and at its expense.
Where the Custodian receives a notice under subsection 6.6(a), then the
Custodian and the Security Agent may as a condition of compliance require
from the Registered Holder that it lodge its Instalment Receipts with the
Custodian and provide such security and/or indemnity as to costs, expenses
or other liabilities as the Custodian and the Security Agent may reasonably
require and shall, subject to the foregoing, exercise on its behalf the
rights in question.
Notwithstanding subsection 6.6(a) hereof, in the event that the registered
holders of Shares are entitled to a right of dissent under section 190 of
the Act prior to the Completion Time in connection with any proposed action
of the Corporation, then the Corporation shall offer a right of dissent to
Registered Holders to the same extent that registered holders of common
shares of the Corporation have a right to dissent under section 190 of the
Act, subject to the provisions of this subsection 6.6(c). The Custodian
shall, if so directed by a Registered Holder, but subject to the
Custodian's rights under subsection 6.6(b) hereof, deliver or cause to be
delivered a written objection pursuant to subsection 190(5) of the Act in
respect of all
<PAGE>
-33-
but not less than all of the Related Shares evidenced by such Registered
Holder's Instalment Receipts and shall thereafter remit to such Registered
Holder the notice received under subsection 190(6) of the Act. The
Registered Holder shall, if it desires to proceed to deliver a demand for
payment under subsection 190(7) of the Act, pay the Final Instalment in
accordance with this Agreement and become the registered holder of the
relevant Related Shares, in which case the Company shall not object to the
continued exercise of rights of dissent in respect of such Shares solely on
the grounds that the Shares have been transferred from the Security Agent
to the Registered Holder pursuant to this Agreement following the delivery
of the written objection by the Custodian referred to above. By becoming a
Registered Holder, each Registered Holder acknowledges that the foregoing
procedure is necessary in order to protect the value of the Pledged
Collateral held pursuant to this Agreement by the Security Agent on behalf
of the Selling Shareholder.
MEETINGS
--------
In order to consider the exercise of any rights accorded by section 6.6 or to
deal with any other business which the Registered Holders or any of the other
parties may consider appropriate, meetings of the Registered Holders may be
convened and held in accordance with Article 9.
TRANSFERS OF INSTALMENT RECEIPTS
--------------------------------
A Registered Holder may transfer its Instalment Receipts pursuant to Article 4.
SHARES REPRESENTED BY INSTALMENT RECEIPTS
-----------------------------------------
Upon the subdivision, consolidation, reclassification or other change of the
Shares (including, without limitation, the issuance of Rights as defined in a
shareholder rights plan agreement of even date herewith between the Company and
the Custodian) or upon any reorganization, amalgamation, merger, transfer of all
or substantially all of the assets or other similar transaction affecting the
Company or to which it is a party (a "Reorganization"), wherein any securities
or property or cash shall be received by the Security Agent in exchange for or
in conversion of or in respect of the Shares, the Instalment Receipts shall
thereafter represent such Shares as so modified or added to or the securities,
property or cash so substituted for such Shares, less any Withholding Taxes
required to be remitted by the Security Agent to the Receiver General of Canada
in respect of such Reorganization together with all other amounts which may be
withheld from payments to such Registered Holders, in the same manner and
subject to the same conditions as such Instalment Receipts represented the right
to receive such Shares before such modification, exchange or conversion.
ADDITIONAL INSTALMENT RECEIPTS
------------------------------
Every Registered Holder who at any time before the Completion Date requires more
than one
<PAGE>
-34-
Instalment Receipt evidencing its Instalment Receipts shall be entitled
to such additional Instalment Receipt(s) (provided that no Registered Holder
shall be entitled to more than one Instalment Receipt in respect of any single
Related Share), free of charge to the Registered Holder and where only part of
the Instalment Receipts evidenced by an Instalment Receipt is transferred, the
Custodian shall issue separate Instalment Receipts in respect of the Instalment
Receipts respectively transferred and retained, free of charge to the Registered
Holder.
NOTICES, REPORTS, ETC.
----------------------
Whenever the Company shall send to the Custodian in its capacity as registered
holder of Shares any report, accounts, financial statement, circular or other
document relating in any way to the affairs of the Company, then the Company
shall also send to each Registered Holder a copy thereof, provided that no
Registered Holder shall by virtue of this section 6.11 become entitled thereto
unless it would be so entitled if it were registered as a holder of common
shares of the Company.
EXAMINATION OF RECORDS
----------------------
Registered Holders shall have the same rights to examine the records of the
Company as are provided to the Company's common shareholders.
RECORD DATES
------------
The record date in respect of any of the rights conferred by the holding of
Instalment Receipts shall be the same record date as that fixed by the Company
in respect of the Related Shares.
RIGHTS ON WIND-UP
-----------------
In the event of the liquidation, dissolution or winding-up of the Company or any
other distribution of the assets of the Company among its shareholders for the
purpose of winding-up its affairs, any property received by the Security Agent
(as registered holder of the Shares) shall be sold by the Security Agent by
public or private sale at such price as it is able to obtain on commercially
reasonable terms and subject to paragraph 3.4(a)(ii). As soon as reasonably
practicable after the sale of such property the Security Agent shall remit the
proceeds (net of the costs of disposition) to the Custodian who shall pay the
proceeds first, to the Selling Shareholder pro rata in reduction of the Final
Instalment to be paid in respect of each Share for which the Final Instalment
has not yet been received and the balance of such proceeds, if any, shall be
remitted to the Registered Holders on the date of such payment, without
interest. In the case of non-resident Registered Holders, any payment made to
the Registered Holder shall be net of any Withholding Tax required to be
remitted by the Custodian to the Receiver General of Canada in respect of such
proceeds together with all other amounts which may be withheld from payments to
such Registered Holders pursuant to section 6.4 hereof. To the extent that such
withholding and remittance of Taxes would reduce the amount applied in reduction
of the Final Instalment on behalf of a particular Registered Holder to an amount
<PAGE>
-35-
which is less than the amount to be so paid and applied with respect to the
Related Shares of any other Registered Holder, the provisions of subsection
6.4(f) shall apply with such modifications as the circumstances require.
CASH DISTRIBUTIONS
------------------
Any moneys to be distributed by the Company or the Custodian to a Registered
Holder, pursuant to sections 6.3, 6.14 or subsection 6.2(a), may be paid by
cheque or money order sent through the mail, postage prepaid, to the Registered
Holder (or in the case of joint Registered Holders to the First Named) at its
address as shown on the Register. Every such cheque or money order sent through
the mail shall be at the risk of the Registered Holder and shall be made payable
to the person to whom it is sent and the sending of such cheque shall satisfy
and discharge all liability for the amount thereof as between the Registered
Holder, on the one hand, and the Custodian, the Security Agent, the Company and
the Selling Shareholder, on the other hand, unless such cheque or money order is
not paid on presentation. Notwithstanding any other provision of this Agreement
and subject to applicable law, any amount represented by such cheque which has
not been presented for payment within six years after the date on which it was
issued or which otherwise remains unclaimed for a period of six years after the
date of such distribution and any interest paid thereon shall be forfeited to
and paid over by the Custodian to the Company, if applicable. If any cheque
forwarded by the Company or the Custodian to a Registered Holder is defaced,
lost or destroyed then, provided a claim is made by such Registered Holder
within the aforesaid six years after the date on which such cheque was issued,
it may be replaced on such terms, if any, as to evidence and indemnity with or
without security as the Custodian, or if such monies are then in the possession
of the Company, as the Company may think fit; provided that in the case of
defacement, the defaced cheque shall be surrendered before the new cheque is
issued. In the case of loss or destruction, the Registered Holder shall also
pay to the Custodian or the Company as the case may be (if demanded) all
expenses incidental to investigation of evidence of loss or destruction and the
preparation of the requisite form of indemnity as aforesaid.
RECORDS OF CUSTODIAN BINDING ON REGISTERED HOLDERS
--------------------------------------------------
The Register and all other books and records maintained by the Custodian
pursuant to this Agreement shall, absent manifest error, be binding on the
Registered Holders.
TRANSFER OF SELLING SHAREHOLDER'S RIGHT TO RECEIVE PAYMENTS
-----------------------------------------------------------
The Custodian shall maintain at its office a registration book for recording the
names and addresses of the Selling Shareholder or, in the event the Selling
Shareholder sells or otherwise transfers its right to receive Instalments the
name and the address of each transferee. The entries in the registration book
shall be conclusive, and each person whose name is recorded in the registration
book as the owner of the right to receive Instalments shall be treated as the
absolute owner of the
<PAGE>
-36-
right to receive Instalments for all purposes.
ARTICLE
THE CUSTODIAN AND THE SECURITY AGENT
------------------------------------
APPOINTMENT AND QUALIFICATIONS
------------------------------
The Selling Shareholder hereby appoints The Trust Company of Bank of Montreal as
Custodian, which hereby accepts such appointment. The Selling Shareholder
hereby appoints The R-M Trust Company as the Security Agent, which hereby
accepts such appointment. Any successor Custodian or Security Agent shall be a
body corporate registered to carry on business as a trust corporation under the
laws of the Province of Ontario or, in the case of the Security Agent, a
corporation having its registered and principal office in the Province of
Ontario and an affiliate of or otherwise under the de facto control and
management of such a registered trust corporation.
TERMINATION OF APPOINTMENT
--------------------------
The Selling Shareholder may at any time terminate the appointment of the
Custodian or the Security Agent, provided always that:
no such termination shall take effect until a new Custodian or a new
Security Agent, as the case may be, has been appointed by the Selling
Shareholder provided the new Custodian or the new Security Agent, as the
case may be, agrees to the covenants contained in this Agreement; and
the Custodian or the Security Agent may resign and be discharged from its
duties under this Agreement upon 60 days' notice (or such lesser notice as
is acceptable to the parties hereto in writing mailed to the Selling
Shareholder by registered or certified mail). If the Custodian or the
Security Agent should resign or be removed or otherwise become incapable of
acting, the Selling Shareholder will appoint a successor to the Custodian
or the Security Agent, as the case may be. If the Selling Shareholder
fails to make such appointment by the date on which the 60-day notice
period expires for the resignation of the Custodian or the Security Agent
or within a period of 60 days after such removal or after it has been
notified in writing of such incapacity by the incapacitated Custodian or
the incapacitated Security Agent, as the case may be, then the Selling
Shareholder, the Company, the incapacitated Custodian or the incapacitated
Security Agent, as the case may be, may apply to any court of competent
jurisdiction for the appointment of a successor Custodian or a successor
Security Agent, as the case may be. After appointment, the successor
Custodian or the successor Security Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Custodian or Security Agent, as the case may be, without further
act or deed; but the predecessor Custodian or the predecessor Security
Agent shall deliver and
<PAGE>
-37-
transfer to the successor Custodian or the Security Agent, as the case may
be, any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the Selling
Shareholder will file notice thereof in writing with the predecessor
Custodian or the predecessor Security Agent, as the case may be.
NOTICE OF CHANGE OF CUSTODIAN
-----------------------------
Notice of such change of the Custodian or the Security Agent shall be given by
the successor Custodian or the successor Security Agent, as the case may be, to
the Registered Holders within 30 days of the appointment of the successor
Custodian or the successor Security Agent, as the case may be. Failure to give
any notice provided for in this section 7.3, however, or any defect in such
notice, shall not affect the legality or validity of the resignation or removal
of the Custodian or Security Agent or the appointment of any successor Custodian
or successor Security Agent, as the case may be.
CONSEQUENCES OF CHANGE OF CUSTODIAN
-----------------------------------
If the appointment of the Custodian terminates for whatever reason, the
Custodian shall, on the date on which such termination takes effect, deliver to
the successor Custodian the Register and all other books and records maintained
by it pursuant to this Agreement, together with all other property held by it
under this Agreement. Without limiting the generality of the foregoing, the
Custodian shall, at the time of such termination, deliver to the Registrar duly
executed instruments of transfer and assignment of the Related Shares in favour
of the successor Custodian, and the Company shall cause the registration of the
Related Shares in the name of the successor Custodian and the delivery to the
Security Agent of the share certificate(s) or other evidence of title
representing the Related Shares, registered in the name of the successor
Custodian. The Security Agent shall cooperate so as to facilitate the issuance
of certificates registered in the name of the successor Custodian. As and from
that time the successor Custodian shall be substituted for its predecessor for
all purposes of this Agreement. If the appointment of the Security Agent
terminates for whatever reason, the Security Agent shall, on the date on which
such termination takes effect, deliver to the transfer agent for the Instalment
Receipts of the Company the share certificate(s) representing the Shares and
vest or cause to be vested in the successor Security Agent any cash, securities
or other property held by it hereunder. Upon such delivery and vesting being
carried out, the successor Security Agent shall be substituted for its
predecessor for all purposes hereof. Upon the delivery to the transfer agent
for the Instalment Receipts of the Company of the share certificate(s)
representing the Shares, the Company shall cause the delivery to the successor
Security Agent of the share certificate(s) representing the Shares. Any expense
payable as a result of the termination of such appointment shall be paid by the
Selling Shareholder if such termination is at the instance of the Selling
Shareholder; provided that if the termination of the Custodian is at its request
and without any prior request or fault of the Selling Shareholder, such expense
shall be paid by the Custodian.
<PAGE>
-38-
REMUNERATION OF CUSTODIAN AND SECURITY AGENT
--------------------------------------------
The Custodian and Security Agent shall each be remunerated for the performance
of its respective duties under this Agreement and reimbursed in respect of its
costs and expenses at such rate and in such manner as may from time to time be
agreed among the parties concerned.
THE REGISTER
------------
The Custodian shall also act as transfer agent and Registrar for the
Instalment Receipts and shall maintain at its Toronto Securities Service
Centre a securities register in which shall be recorded the names and
addresses of the Registered Holders and the details of the Instalment
Receipts held by them respectively and such other information required by
section 50(1) of the Act.
The Custodian shall retain until the sixth anniversary of the termination
of this Agreement all instruments of transfer of Instalment Receipts which
are lodged for registration, including the details shown thereon of the
persons by or through whom they were lodged, all cancelled Instalment
Receipts and all other related documents, such reasonable costs of storage
to be paid by the Company.
The Custodian shall ensure that the Register and any other books or records
caused to be maintained by it are made available, and that copies thereof
are supplied, to the Company as and when reasonably requested so to do for
any purpose whatsoever, subject to the Company having given at least one
Business Day's written notice and paying the reasonable fees and expenses
of the Custodian in connection therewith.
TRANSFER FACILITIES
-------------------
The Custodian shall cause facilities to be maintained for the surrender and
delivery of Instalment Receipts and for registration of transfers of Instalment
Receipts in accordance with this Agreement at its Securities Service Centre in
Toronto and at any other place or places which may be mutually agreed upon by
the Selling Shareholder, the Company and the Custodian and of which the
Custodian notifies the Registered Holders. Execution of Instalment Receipts and
transfer of Instalment Receipts shall occur and be provided for at the
Custodian's Toronto Securities Services Centre. Except as expressly permitted
by the Selling Shareholder, no Instalment Receipt may be accepted for
registration of transfer after the Completion Time.
DOCUMENTS FORWARDED TO THE SELLING SHAREHOLDER
----------------------------------------------
As soon as practicable after the sixth anniversary of the termination of this
Agreement, the Custodian shall deliver to the Selling Shareholder a certificate
of destruction of all of those documents referred to in section 7.6.
Immediately prior to the termination of this Agreement, the Custodian and the
<PAGE>
-39-
Security Agent shall deliver to the Selling Shareholder all other property in
its possession as a result of this Agreement and not at such time otherwise
disposed of in accordance with this Agreement.
NO INDEMNITY
------------
Neither the Custodian nor the Security Agent shall have any claims against the
Company or the Underwriters for any indemnification under this Agreement;
provided that the Custodian shall not be obliged to comply with any request or
direction of the Company until the Custodian and/or the Security Agent shall
have received from the Company such indemnity as it may reasonably request.
CUSTODY OF FUNDS
----------------
The Custodian shall, as custodian for the Selling Shareholder, deposit and hold
all cash payments received by it under this Agreement from a Registered Holder
or the Security Agent in an interest-bearing account established at Bank of
Montreal. Such funds shall be released only in accordance with this Agreement.
ARTICLE
EXTENT OF DUTIES
----------------
RESPECTIVE OBLIGATIONS AND DUTIES
---------------------------------
The respective obligations and duties of the Custodian, the Security Agent,
the Selling Shareholder, the Company and the Underwriters to each other and
to the Registered Holders shall be limited to those obligations and duties
which are expressly set forth in this Agreement or arise by necessary
implication and their respective liabilities in respect thereof shall be
limited to those which arise directly from their respective negligence,
wilful misconduct or bad faith, subject to subsection 8.1(b), in performing
such obligations or duties and accordingly, none of them shall be under any
greater obligation, duty or liability whatsoever (whether in contract,
negligence, breach of trust or otherwise) to any party to this Agreement or
to any Registered Holder.
Where under or in connection with this Agreement the Custodian, the
Security Agent, the Selling Shareholder, the Company or the Underwriters
undertake or otherwise become subject to any obligation or duty to the
Registered Holders or any other person not a party to this Agreement they
shall, notwithstanding any contrary manner in which such obligation or duty
may be expressed, only be obliged under this Agreement to use reasonable
efforts exercised in good faith in the performance of such obligation or
duty and in no case shall be liable to any other party to this Agreement or
to any other person to the extent that, by reason of any circumstance which
can reasonably be regarded as beyond their control, including but not
limited to any provision of any present or future law or regulation of any
country or of
<PAGE>
-40-
any governmental authority or any act of government or other competent
authority, they shall be prevented from, or delayed in, performing any
obligation or duty which would otherwise arise out of or in connection with this
Agreement.
Except as specifically provided in this Agreement none of the Custodian, the
Security Agent, the Selling Shareholder, the Underwriters or the Company shall
have any obligation or duty to any other party or to any other person to see
whether the other or others have performed any obligation or duty which that
other or those others are obliged to perform under this Agreement or to take any
steps to enforce or cause the performance of the same.
The Custodian and the Security Agent may act on the opinion or advice of, or
information obtained from, any lawyer, appraiser, banker, broker, accountant or
other expert appointed or employed by the Custodian or the Security Agent, as
the case may be, with the approval of the Company and the Selling Shareholder
(such approval not to be unreasonably withheld) and shall not be responsible for
any loss occasioned by so acting unless such action was taken in bad faith or
such action constitutes negligence or wilful misconduct.
The Custodian and the Security Agent (or, as the case may be, the Company) shall
not be liable for acting (or omitting to act) in reliance on any opinion, advice
or information purporting to be conveyed from any such expert although the same
shall contain some error or shall not be authentic unless such action was taken
in bad faith or such action constitutes negligence or wilful misconduct.
The Custodian and the Security Agent may in appropriate circumstances request
and may accept as sufficient evidence of any fact or matter, a certificate
signed by any authorized signatory of the Company or the Selling Shareholder,
whichever is appropriate, as to the fact or matter upon which it may, in the
exercise of any of its duties, powers, authorities and discretions under this
Agreement, be required to be satisfied or to have information, and it shall not
be bound to call for further evidence and shall not be responsible for any loss
that may be occasioned by acting on any such certificate unless such action was
taken in bad faith or such action constitutes negligence or wilful misconduct.
ACTION ON BEHALF OF REGISTERED HOLDERS
--------------------------------------
All or any of the rights conferred upon any Registered Holder by this Agreement
may be enforced by the Registered Holder by appropriate legal proceedings but
subject to the rights which are hereby conferred upon the Custodian to proceed
in its own name to enforce each and all of the provisions herein contained for
the benefit of the Registered Holders. The Custodian shall not be bound to take
any action or proceedings against the Company or the Selling Shareholder and
shall have no liability to any of the Registered Holders in respect of failing
or omitting to take any such action or proceedings for its benefit unless the
Custodian:
<PAGE>
-41-
shall have been required to take such action before the date of
registration of its Related Shares in the name of the Registered
Holder pursuant to section 5.2; and
shall have received such indemnity and security for its costs as it
shall in its absolute discretion require in respect of such action or
proceedings.
INDEMNIFICATION
---------------
Subject to subsection 8.3(c) and section 8.5, the Custodian, the Security
Agent and every attorney, manager, agent, delegate or other person
appointed by either of them under this Agreement (together its "Agents")
are each hereby indemnified by the Selling Shareholder from and against all
losses, liabilities, claims, proceedings, actions, demands and damages and
all costs and expenses in connection therewith which each may incur or
which may be made or brought against it as a result of the execution of,
purported execution of or failure to execute its duties or obligations
under or pursuant to this Agreement or under any agreements made or to be
made between the Custodian and the Company and/or the Selling Shareholder
relating to any function of the Custodian as transfer agent and registrar
for the Instalment Receipts. This indemnity, as it applies to the
Custodian, shall survive the termination of this Agreement and the
resignation or removal of the Custodian.
If any action or claim shall be brought against the Custodian or the
Security Agent or any of the Agents of the Custodian or the Security Agent
in respect of which it appears to the Custodian, the Security Agent or the
Agent in question as the case may be that indemnity may be sought pursuant
to subsection 8.3(a), the Custodian or the Security Agent or any Agent
concerned shall as soon as practicable notify the Selling Shareholder in
writing of such action or claim and the Selling Shareholder shall be
entitled at its expense to assume the defence thereof, and in such
circumstances the Custodian, the Security Agent and any Agent concerned
shall provide the Selling Shareholder, subject to the indemnity contained
in subsection 8.3(a), with such information and assistance as the Selling
Shareholder shall reasonably request. The failure of any such person to so
notify the Selling Shareholder, within a reasonable period of time, of the
commencement of any such action or claim shall release the Selling
Shareholder from any obligations it might have to indemnify such persons
under this Agreement to the extent that such failure prejudices the ability
of the Selling Shareholder to defend such action or claim.
The indemnities contained in subsection 8.3(a) shall not extend to any
losses, liabilities, claims, proceedings, actions, demands or damages which
may result from the settlement or compromise of any action or claim brought
against the Custodian, the Security Agent or the Agent concerned made or
effected without the prior written consent of the Selling Shareholder (such
consent not to be unreasonably withheld) or to any legal expenses being
costs, charges and expenses which may result from the employment by the
Custodian, the Security Agent or the Agent concerned of its own legal
advisers in connection with any
<PAGE>
-42-
action or claim against it after the defence of such action or claim has
been assumed by the Selling Shareholder. Notwithstanding the foregoing, the
Custodian, the Security Agent or the Agent concerned shall have the right
to employ its own legal advisers in connection with any action or claim
against it but the fees and expenses of such advisers shall be at the
expense of the Custodian, the Security Agent or the Agent concerned unless
the Selling Shareholder fails to assume the defence of such action or claim
within a reasonable period of time; or the employment of such counsel has
been authorized in writing by the Selling Shareholder; or the named parties
to such action or claim include both the person seeking indemnity and the
Selling Shareholder and/or the Company and the person seeking indemnity
shall have been advised by counsel that there may be one or more legal
defences available to the person seeking indemnity which are different from
or in addition to those available to the Selling Shareholder and/or the
Company, as the case may be, in which case, if the person seeking indemnity
notifies the Selling Shareholder in writing that it elects to employ its
own legal advisers at the expense of the Selling Shareholder, the Selling
Shareholder shall not have the right to assume such defence on behalf of
the person seeking indemnity but shall be liable to pay the reasonable fees
and expenses of such counsel, it being understood that the Selling
Shareholder shall not in connection with any one action or claim or
separate but substantially similar or related actions or claims in the same
jurisdiction arising out of the same general allegations or circumstances
be liable for the reasonable fees and expenses of more than one separate
law firm (in addition to local counsel) for all persons seeking indemnity.
RELIANCE ON MINUTES
-------------------
Neither the Custodian nor the Security Agent shall be responsible for having
acted upon any resolution purporting to have been passed at any meeting of the
Registered Holders held pursuant to Article 9 in respect of which minutes have
been made and signed even though it may subsequently be found that there was
some defect in the constitution of the meeting or the passing of the resolution
or that for any reason the resolution was not valid or binding upon the
Registered Holders.
NO ENTITLEMENT TO INDEMNITY
---------------------------
Notwithstanding any other provision of this Article 8, each of the Custodian,
the Security Agent and any Agent shall be entitled to indemnity under this
Agreement only to the extent that the losses, liabilities, claims, proceedings,
actions, demands, damages or costs for which indemnity is sought did not arise
out of or result from bad faith, wilful misconduct or negligence on the part of
the Custodian in the case of indemnity sought by the Custodian, the Security
Agent in the case of indemnity sought by the Security Agent, or any Agent in the
case of indemnity sought by such Agent.
CONFLICT OF INTEREST
--------------------
The Custodian shall not acquire, hold or deal with in its personal capacity as
beneficial holder, either
<PAGE>
-43-
in its own name or in the name of a nominee, any Instalment Receipts or any
Shares but may so acquire, hold or deal with any other shares or securities or
interest therein for the time being issued by the Company or enter into any
contract or have financial dealings with the Company or the Selling Shareholder
without being liable to account therefor under this Agreement. In addition, the
Custodian shall be entitled to acquire, hold and deal in Instalment Receipts
and, after due payment therefor in accordance with this Agreement, Related
Shares, on behalf of any estate or trust in respect of which it is an executor
and/or trustee and on behalf of any customer of the Custodian, in each case
without being liable to account therefor under this Agreement. The Security
Agent shall not acquire, hold or deal with in its personal capacity, on behalf
of any estate or trust, on behalf of or for the account of any other person or
in any other capacity whatsoever, and either in its own name or in the name of
any estate, trust or person or the name of a nominee, Instalment Receipts or
Shares, and will not in any manner act as the agent of any Registered Holder.
ARTICLE
MEETINGS OF REGISTERED HOLDERS
------------------------------
CONVENING OF MEETINGS
---------------------
The Custodian, the Selling Shareholder or the Company may at any time convene a
meeting of the Registered Holders (a "Meeting") and the Custodian shall do so
upon a requisition in writing by the Registered Holders representing at least 5%
of the Shares underlying all outstanding Instalment Receipts and upon receiving
from the Selling Shareholder or the Company sufficient funds to commence a
Meeting and indemnity reasonably satisfactory to the Custodian to protect and
hold harmless the Custodian against the costs, charges, expenses and liabilities
to be incurred thereby and any loss and damage it may suffer by reason thereof.
Every Meeting shall be held in Toronto, Ontario or such other place in Canada as
the Selling Shareholder and the Custodian may decide.
NOTICE OF MEETINGS
------------------
Notice of all Meetings shall be sent to all Registered Holders entitled thereto
within all time periods and in accordance with all legal requirements applicable
to meetings of the Company's common shareholders (including the requirements of
National Policy 41 of the Canadian Securities Administrators). A copy of the
notice shall be sent to the Selling Shareholder, the Custodian, the Company and
the Security Agent. Such notice shall state the nature of the business in
sufficient detail to permit a Registered Holder to form a reasoned judgment and
shall state the text of any Special Resolution to be submitted to the Meeting.
The accidental omission to give notice of a Meeting or any irregularity in the
notice of a Meeting or the non-receipt of any notice by any Registered Holder,
the Selling Shareholder, the Custodian or the Company shall not invalidate any
resolution passed or any proceedings taken at a Meeting. Any Registered Holder
present, either in person or by proxy, at any Meeting shall for all purposes be
deemed to have received notice of a Meeting and, where requisite, of the
purposes for which a Meeting was convened.
<PAGE>
-44-
QUORUM
------
Subject to the Act, a quorum for the transaction of business at a Meeting shall
be two persons present in person, each being a Registered Holder entitled to
vote thereat or an appointed proxyholder or representative for a Registered
Holder so entitled, and together holding or representing by proxy Instalment
Receipts representing not less than 25% of the Shares represented by all
outstanding Instalment Receipts entitled to vote at the Meeting. If a quorum is
present at the opening of any Meeting, the Registered Holders present or
represented may proceed with the business of the Meeting notwithstanding that a
quorum is not present throughout the Meeting. If a quorum is not present at the
opening of any Meeting, the Registered Holders present or represented may
adjourn the Meeting to a fixed time and place but may not transact any other
business. At any such adjourned meeting, the Registered Holders present in
person or represented by proxy shall form a quorum and shall have the power to
pass a Special Resolution or other resolution and to decide all matters which
could properly have been disposed of at the Meeting from which the adjournment
took place.
CHAIRMAN
--------
Some person (who may but need not be the proxy or representative of a Registered
Holder) nominated in writing by the Company or the Selling Shareholder shall be
entitled to take the chair at every Meeting and if no person is so nominated or
if at any Meeting a person so nominated shall not be present within five minutes
after the time appointed for holding the Meeting the Registered Holders present
in person or by proxy shall choose any one of their number to be Chairman.
ATTENDANCE BY SELLING SHAREHOLDER, CUSTODIAN AND THE COMPANY
------------------------------------------------------------
The Selling Shareholder, the Custodian and the Company and their authorized
representatives may attend and speak at any Meeting.
VOTING
------
Every question submitted to a Meeting shall be decided in the first instance by
a show of hands and in case of an equality of votes the Chairman shall both on a
show of hands and at a poll have a casting vote in addition to the vote or votes
(if any) to which it may be entitled as a Registered Holder. On a show of hands
every Registered Holder who (being an individual) is present in person or (being
a corporation) is present by its authorized representative, shall have one vote.
Every question, other than a Special Resolution, shall be decided by a majority
of the persons voting thereon by a show of hands or on a poll.
CHAIRMAN'S DECLARATIONS
-----------------------
At any Meeting, unless a poll is demanded by the Chairman or by any Registered
Holder present in
<PAGE>
-45-
person or by proxy, a declaration by the Chairman that a resolution has been
carried or lost or carried by a particular majority shall be conclusive evidence
of the fact.
POLLS
-----
If at any Meeting a poll is demanded as aforesaid, it shall be taken in such
manner and either at once or after an adjournment as the Chairman directs and
the result of such poll shall be deemed to be the resolution of the Meeting at
which the poll was demanded. The demand for a poll may be withdrawn. On a poll
every Registered Holder who is present in person or by proxy shall have one vote
for each of the Shares represented by its Instalment Receipts, except that if
the Chairman is a Registered Holder then the Chairman shall have a casting vote.
OBJECTIONS AND ERRORS
---------------------
If (i) any objection shall be raised to the qualification of any voter (whether
on a show of hands or on a poll) or (ii) any votes have been counted which ought
not to have been counted or which might have been rejected or (iii) any votes
have not been counted which ought to have been counted, then the objection or
error shall not vitiate the decision of the Meeting or adjourned Meeting on any
resolution unless the same is raised or pointed out at the Meeting or, as the
case may be, the adjourned Meeting at which the vote objected to is given or
tendered or at which the error occurs. Any objection or error shall be referred
to the Chairman of the Meeting and shall only vitiate the decision of the
Meeting on any resolution if the Chairman decides that the same may have
affected the decision of the Meeting. The decision of the Chairman on such
matters shall be final and conclusive.
ADJOURNMENTS
------------
The Chairman may with the consent of any Meeting at which a quorum is present
adjourn any such Meeting. If a Meeting is adjourned for less than 30 days, it
shall not be necessary to give notice of the adjourned Meeting, other than by
announcement at the earliest Meeting that it is adjourned. If a Meeting is
adjourned by one or more adjournments for an aggregate of 30 days or more,
notice of the adjourned Meeting shall be given as for an original Meeting. Any
business may be brought before or dealt with at any adjourned Meeting for which
no notice is required which might have been brought before or dealt with at the
original Meeting in accordance with the notice calling the original Meeting.
TIME AND PLACE OF POLLS
-----------------------
Any poll demanded at any Meeting on the election of a Chairman or on any
question of adjournment shall be taken at the Meeting without adjournment. A
poll demanded on any other question shall be taken at such time and place as the
Chairman directs.
<PAGE>
-46-
ENTITLEMENT TO VOTE
-------------------
The Registered Holder or in the case of joint Registered Holders any one of them
shall be entitled to vote in respect of any Instalment Receipts either in person
or by proxy and in the latter case as if such joint Registered Holder were
solely entitled thereto and if more than one of joint Registered Holders be
present at any Meeting either personally or by proxy that one of the joint
Registered Holders so present who is First Named shall alone be entitled to
vote.
FORM OF PROXY
-------------
Every Registered Holder entitled to vote at a Meeting may appoint a proxyholder,
or one or more alternate proxyholders, to attend and act as its representative
at the Meeting in the manner and to the extent authorized and with the authority
conferred by the proxy. A proxy shall be in writing executed by the Registered
Holder or its attorney and shall conform with the requirements of the Act.
Alternatively, every such Registered Holder which is a body corporate or
association may authorize by resolution of its directors or governing body an
individual to represent it at a Meeting and such individual may exercise on the
Registered Holder's behalf all the powers it could exercise if it were an
individual Registered Holder. The authority of such an individual shall be
established by depositing with the Custodian a certified copy of such
resolution, or in such other manner as may be satisfactory to the Custodian or
the chairman of the Meeting.
If the Registered Holder of record is deceased, its personal representative,
upon filing with the secretary of the Meeting sufficient proof of appointment,
shall be entitled to exercise the same voting rights at any Meeting as the
Registered Holder of record would have been entitled to exercise if it were
living.
IDENTITY OF PROXY
-----------------
A proxy need not be a Registered Holder.
LODGING OF PROXIES
------------------
The instrument appointing a proxy and the power of attorney or the other
authority (if any) under which it is signed or a notarially certified copy of
such power or authority must be deposited at the office of the Custodian at
which notices may be served on it under section 10.1 or such other place as
shall be appointed for that purpose in the notice convening the Meeting or in
any document accompanying such notice not less than 48 hours before the time
appointed for holding the Meeting or adjourned Meeting at which the person named
in such instrument proposes to vote. A vote given in accordance with an
instrument of proxy shall be valid notwithstanding the previous death or
insanity of the Registered Holder or revocation of the proxy or of the power or
authority under which the instrument of proxy was signed or the transfer of the
Instalment Receipts in respect of which the
<PAGE>
-47-
vote is given provided no intimation in writing of the death, insanity,
revocation or transfer shall have been received at the office of the Custodian
at which notices may be served on it under section 10.1 before the commencement
of the Meeting or adjourned Meeting or the taking of the poll at which the
instrument of proxy is to be used. No instrument appointing a proxy or power or
authority shall be valid after the expiration of twelve months from the date
named in it as the date of its execution. The instrument appointing a proxy
shall be deemed to confer authority to demand or join in demanding a poll.
SPECIAL RESOLUTION
------------------
A Meeting shall have the following powers exercisable by Special Resolution:
power to sanction any modification or compromise of or arrangement in
respect of the rights of the Registered Holders against the Company, the
Custodian, the Security Agent or the Selling Shareholder;
power to assent to any modifications of the provisions contained in this
Agreement proposed or agreed to by the Company and the Selling Shareholder
and to authorize the Custodian and the Security Agent, each on its own
behalf and on behalf of the Registered Holders, to concur in and execute
any supplemental agreement embodying any such modifications; and
power to agree to the release or exoneration of the Custodian or the
Security Agent from any liability in respect of anything done or omitted to
be done by the Custodian or the Security Agent before the giving of such
release;
provided that, without the consent of each Registered Holder, no Meeting shall
have power to vary the rights of any Registered Holder, on compliance with this
Agreement, to pay for, and take a transfer of, its Related Shares and, pending
such transfer, to enjoy all the rights of ownership hereby conferred upon him in
respect of its Related Shares or to modify or abrogate any right any Registered
Holder would otherwise have to receive the dividends and exercise any other
right arising from and attaching to its Related Shares.
SPECIAL RESOLUTION BINDS ALL
----------------------------
A resolution (including, without limitation, a Special Resolution) passed at a
Meeting convened and held in accordance with this Agreement shall be binding
upon all the Registered Holders whether present or not present at such Meeting,
and each of the Registered Holders, the Custodian and the Security Agent
(subject in the case of the Custodian and the Security Agent to the provisions
for its indemnity contained in this Agreement) shall be bound to give effect
thereto accordingly.
MEANING OF SPECIAL RESOLUTION
-----------------------------
<PAGE>
-48-
The expression "Special Resolution" means (a) a resolution passed at a Meeting
by a majority consisting of not less than two-thirds of the persons voting
thereat upon a show of hands or if a poll is demanded then by a majority
consisting of not less than two-thirds of the votes given on such poll, and (b)
a resolution in writing in accordance with section 9.19.
RESOLUTIONS IN WRITING
----------------------
A resolution in writing signed by or on behalf of all the Registered Holders who
for the time being are entitled to receive notice of a Meeting shall for all
purposes be as valid and effectual as a Special Resolution passed at a Meeting.
Any such resolution may be signed in counterparts.
MINUTES
-------
Minutes of all resolutions and proceedings at every Meeting shall be made and
entered in books to be provided for that purpose by the Company and any such
minutes if purporting to be signed by the Chairman at which such resolutions
were passed or proceedings had or by the Chairman of the next succeeding Meeting
of the Registered Holders shall be conclusive evidence of the matters and until
the contrary is proved every Meeting in respect of the proceedings of which
minutes have been made shall be deemed to have been convened and held and all
resolutions passed and proceedings had thereat to have been passed and had.
OTHER PROCEDURAL MATTERS
------------------------
If any matter shall arise in connection with the procedure for Meetings and such
matter is not addressed in this Agreement, the by-laws of the Company shall
apply to such matter, mutatis mutandis.
ARTICLE
MISCELLANEOUS
-------------
NOTICES
-------
Any notice to be given by any of the Company, the Selling Shareholder, the
Custodian, the Security Agent or the Underwriters to any of the others
shall be in writing and signed by an authorized signatory of the party
giving the notice. Any such notice shall be addressed to the relevant
party at its address as given in Schedule 10.1(a) or at such other address
as may be notified in accordance with this section 10.1.
Any such notice shall be deemed to have been received at the time of
delivery or time of sending if by telecopy, provided that any delivery made
or telecopy sent on other than a Business Day, or after 4:00 p.m. (Toronto
time) on a Business Day shall be deemed to have
<PAGE>
-49-
been received at 10:00 a.m. (Toronto time) on the next following Business
Day.
Any and all notices to be given and any documents (other than Instalment
Receipts or certificates representing Related Shares) to be sent to any
Registered Holder may be given or sent to its address shown on the Register
in any manner permitted by the by-laws or any resolution of the Company in
force in respect of notices to shareholders and shall be deemed to be
received (if given or sent in such a manner) at the time specified in such
by-laws or resolution, which shall apply mutatis mutandis to notices or
documents as aforesaid sent to Registered Holders. Any Instalment Receipt
or certificates representing Related Shares shall be sent by registered
and/or insured mail.
Whenever payments are to be made or documents are to be sent to any
Registered Holder by the Custodian, by the Security Agent, by the Selling
Shareholder or by the Company, or by a Registered Holder to the Custodian,
to the Security Agent, to the Selling Shareholder or to the Company, then
if such payment is made or such document is sent by mail, such payment or
document shall be so sent at the risk of the Registered Holder.
POWER TO AMEND
--------------
All and any provisions of this Agreement and the Instalment Receipts may be
amended by agreement between the Company, the Custodian on its own behalf and on
behalf of the Registered Holders, the Security Agent and the Selling Shareholder
in any respect which they deem necessary or desirable, without the need for any
additional consent by or on behalf of the Registered Holders for the purpose of
curing any ambiguity, or of curing, correcting or supplementing any defective
provisions contained in this Agreement or in any manner which the Company, the
Custodian, the Security Agent and the Selling Shareholder may deem necessary or
expedient and which does not in their opinion materially prejudice the
Registered Holders as a group. Any other amendments may only be approved by
Special Resolution of the Registered Holders within the meaning of and in
accordance with the procedures in Article 9 and any such amendments shall be
binding on all Registered Holders from and after the date of such Special
Resolution. If this Agreement is so amended, unless the context otherwise
requires, references herein shall be construed as, from the date from which such
amendment is expected to be made, as references to this Agreement so amended.
COMPLIANCE WITH LAWS AND REGULATIONS
------------------------------------
In performing their respective obligations under this Agreement, the
Company, the Custodian, the Security Agent and the Selling Shareholder
shall comply with all applicable laws and regulations binding on them.
The Custodian may require Registered Holders to execute or furnish such
documents as may be necessary or appropriate to comply with any laws or
regulations relating to the Related
<PAGE>
-50-
Shares.
ARTICLES AND BY-LAWS OF THE COMPANY AND GENERAL RIGHTS
------------------------------------------------------
Nothing in this Agreement shall override any provision of the Articles or
by-laws of the Company.
So far as concerns the Registered Holders, nothing in this Agreement shall
prejudice any of the Custodian's, the Security Agent's, the Company's or
the Selling Shareholder's rights, remedies and powers under applicable law.
WAIVER
------
Each of the parties shall have the right to waive any of its rights, including
the right of the Selling Shareholder to enforce section 5.3 in respect of any
Defaulting Purchaser in whole or in part, in its absolute discretion, and any
such right once waived may thereafter, subject to the waiver, be reasserted by
such party at any time and enforced pursuant to this Agreement.
FURTHER ASSURANCES
------------------
The parties agree that, upon the written request of and at the expense of the
Selling Shareholder, each of them will promptly execute and deliver all further
instruments and documents, and take all further action, that may reasonably be
necessary or desirable, or that the Selling Shareholder may reasonably request,
in order to perfect and protect any security interest granted by this Agreement
or to enable the Selling Shareholder to exercise and enforce on behalf of the
Selling Shareholder the rights and remedies under this Agreement and under the
Instalment Receipts with respect to any Pledged Collateral.
TERMINATION
-----------
This Agreement and the rights and obligations of the parties, except for the
rights and obligations under Article 8 and sections 6.4 and 6.15 which shall
continue in full force and effect, shall terminate on the date following the day
after no further Instalments in respect of the Shares remain unpaid and no
Shares and proceeds from Shares or other property remain deposited with the
Custodian or the Security Agent, or in the possession of the Selling
Shareholder, in each case to which a Registered Holder is entitled, without
prejudice to the right of a Registered Holder who has paid the Final Instalment
on or prior to the Completion Time to receive a share certificate for the
Related Shares. Subject to applicable law and this Agreement, Defaulted
Instalment Receipts shall cease to entitle the Registered Holders thereof to
receive any Related Shares.
LIABILITY OF JOINT HOLDERS
--------------------------
<PAGE>
-51-
Joint Registered Holders of an Instalment Receipt are jointly and severally
liable with respect to the Payment Obligation in respect of such Instalment
Receipt.
ASSIGNMENT, SUCCESSORS AND ASSIGNS
----------------------------------
None of the parties hereto may assign its rights under this Agreement, without
the prior written consent of the parties hereto other than such proposed
assignor, except:
(i) the Selling Shareholder may assign its rights and obligations under
this Agreement upon notice to the other parties; and
(ii) as provided in Article 7 in the case of the Custodian or the Security
Agent;
provided that nothing herein shall restrict the right of a Registered Holder to
transfer an Instalment Receipt in accordance with Section 4.2. Subject thereto,
this Agreement shall enure to the benefit of and be binding upon the parties
hereto and their respective successors and permitted assigns.
GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with the laws of
Ontario and the federal laws of Canada applicable therein. Each of the parties
irrevocably attorns to the non-exclusive jurisdiction of the courts of Ontario
with respect to all matters arising out of this Agreement.
COUNTERPARTS
------------
This Agreement may be executed in counterparts, each of which when so executed
shall be deemed to be an original, and such counterparts together shall
constitute one and the same instrument.
DOCUMENT IN ENGLISH
-------------------
The parties hereto acknowledge that they have requested and are satisfied that
the foregoing be drafted in the English language. Les parties aux presentes
reconnaissent qu'elles ont exige que la presente convention et tous les
documents qui s'y rattachent soient rediges et executes en anglais et s'en
declarent satisfaites.
<PAGE>
-52-
IN WITNESS OF WHICH this Instalment Receipt and Pledge Agreement has been
executed and delivered as of the date written above.
FMC CORPORATION
By:
MERIDIAN GOLD INC.
By:
CIBC WOOD GUNDY SECURITIES INC.
By:
NESBITT BURNS INC.
By:
FIRST MARATHON SECURITIES LIMITED
By:
RBC DOMINION SECURITIES INC.
By:
BUNTING WARBURG INC.
By:
MIDLAND WALWYN CAPITAL INC.
By:
THE TRUST COMPANY OF BANK OF MONTREAL
By:
By:
THE R-M TRUST COMPANY
By:
<PAGE>
-53-
By:
<PAGE>
-54-
SCHEDULE 1.1
------------
FORM OF INSTALMENT RECEIPT
---------------------------
<PAGE>
-55-
SCHEDULE 5.1(A)
---------------
FORM OF NOTICE OF PAYMENT OF FINAL INSTALMENT
---------------------------------------------
MERIDIAN GOLD INC.
(INCORPORATED UNDER THE LAWS OF CANADA)
NOTICE OF PAYMENT OF FINAL INSTALMENT ON THE COMMON SHARES OF MERIDIAN GOLD INC.
REPRESENTED BY INSTALMENT RECEIPTS
NAME(S) OF REGISTERED HOLDER(S)
Time and Date for payment of
Final Instalment:
By 5:00 p.m. (Toronto time) on
July 31, 1997
<TABLE>
<CAPTION>
<S> <C> <C>
(1) (2) Cdn$2.50 (3)
No. of Shares for which Amount due Amount of Final
payment is due for each Share Instalment
</TABLE>
In accordance with the terms of the Instalment Receipt and Pledge
Agreement (the "Instalment Receipt Agreement") dated as of July 31, 1996
between, among others, Meridian Gold Inc., FMC Corporation (the "Selling
Shareholder"), and the Trust Company of Bank of Montreal (the "Custodian"),
relating to the Instalment Receipts (the "Instalment Receipts") evidencing
common shares of Meridian Gold Inc. (the "Shares"), the final instalment on the
number of Shares shown in space (1) above is due for payment by 5:00 p.m.
(Toronto time), in the city of Toronto on July 31, 1997. THE FINAL INSTALMENT
SHOWN IN SPACE (3) ABOVE MUST BE RECEIVED BY THE CUSTODIAN TOGETHER WITH YOUR
INSTALMENT RECEIPT (AN "INSTALMENT RECEIPT") AT THE ADDRESS SHOWN BELOW NOT
LATER THAN 5:00 P.M. (TORONTO TIME), ON JULY 31, 1997. UNLESS OTHERWISE DEFINED
HEREIN, CAPITALIZED TERMS IN THIS NOTICE SHALL HAVE THE MEANING ASCRIBED TO THEM
IN THE INSTALMENT
<PAGE>
-56-
RECEIPT AGREEMENT. FAILURE TO PAY THE FINAL INSTALMENT, AS AFORESAID, MAY RESULT
IN THE SHARES BEING ACCEPTED BY THE SELLING SHAREHOLDER IN FULL SATISFACTION OF
THE OBLIGATIONS OF A REGISTERED HOLDER OR THE SHARES MAY BE SOLD AND SUCH HOLDER
SHALL REMAIN LIABLE FOR ANY DEFICIENCY IN THE PROCEEDS OF SUCH SALE.
Following actual receipt of funds in the amount shown in space (3)
above and the Instalment Receipt for the number of Shares shown in space (1)
above, the Custodian will cause a share certificate for the number of Shares
shown in space (1) above to be sent to the last address of the person(s) named
above shown in the Register kept under the Instalment Receipt Agreement.
Payment may be made by certified cheque, bank draft or money order
payable in Canadian dollars to The Trust Company of Bank of Montreal.
All payments are sent at the risk of the sender and are only effective
when funds are actually received. The Custodian is not obliged to re-present a
cheque which is returned unpaid on first presentation or to inform you that it
has been so returned.
Pursuant to the Instalment Receipt Agreement, the Underwriters (as
defined therein) pledged the Shares purchased on an instalment basis to secure
payment of the final instalment. If payment of the final instalment is not duly
received by the Custodian from a Registered Holder of an Instalment Receipt on
or before 5:00 p.m. (Toronto time) on July 31, 1997, the Instalment Receipt
Agreement provides that (except as set out below) any Shares (and any securities
or property substituted therefor or in addition thereto) then remaining pledged
under the Instalment Receipt Agreement in respect of such Instalment Receipts
may, at the option of the Selling Shareholder, subject to complying with
applicable law, be reacquired by the Selling Shareholder in full satisfaction of
the obligations of such Registered Holder secured thereby. The Instalment
Receipt Agreement further provides that the Selling Shareholder may direct the
Custodian (in whose name the Shares are registered) to sell the Shares (and any
securities or property substituted therefor or in addition thereto) in respect
of which payment of the final instalment was not duly received, in accordance
with the requirements of applicable law and of the Instalment Receipt Agreement,
and remit to the Registered Holder of the relevant Instalment Receipt the
Registered Holder's pro rata portion of the proceeds of such sale after
deducting therefrom the amount of the remaining unpaid final instalment together
with the Registered Holder's pro rata portion of the costs of such sale, which
shall, in any event, not exceed Cdn$0.50 per Share and any unpaid Withholding
Tax, duties and any other unpaid Taxes payable by the Registered Holder.
Notwithstanding the foregoing, in the event that payment of the final instalment
in respect of an aggregate of less than 5% of the Shares represented by
Instalment Receipts has not been duly received by the Custodian when due, the
Custodian must sell the Shares (and any securities or property substituted
therefor or in addition thereto) in respect of which payment of the final
instalment was not duly received and apply the proceeds of such sale in the
manner described above. In such circumstances, Registered Holders may wish to
consult their own legal advisors with respect to their rights under applicable
law. The Instalment Receipt Agreement provides that unless the Selling
Shareholder shall have retained the
<PAGE>
-57-
Shares in full satisfaction of the obligation of a Registered Holder, the
foregoing shall not limit any other remedies available to the Selling
Shareholder against such Registered Holder of an Instalment Receipt in the event
the proceeds of such sale are insufficient to cover the amount of the final
instalment, the costs of sale (such costs of sale not to exceed Cdn$0.50 per
Share) and any obligation of the Registered Holder in respect of Withholding Tax
and any other unpaid Taxes payable pursuant to the Instalment Receipt Agreement,
and accordingly, such Registered Holder shall in such circumstances remain
liable to the Selling Shareholder for any such deficiency.
Registered Holders who are non-residents of Canada will be liable for
all Withholding Taxes payable in respect of any cash dividends. Excess
Dividends, Stock Dividends, Distributed Property or Reorganization. Any such
Withholding Tax will be payable on such distributions even if the payment
thereof is directed to the Selling Shareholder on account of the non-resident's
unpaid final instalment and even if there is not sufficient cash in the
distribution to pay such Withholding Tax. Provision for the payment of this tax
by non-residents is set out in the Instalment Receipt Agreement.
The address of The Trust Company of Bank of Montreal to which payment
may be sent or delivered:
By Mail By Hand
------- -------
Toronto Securities Service Centre Toronto Securities Service Centre
B-1 Level B-1 Level
1 First Canadian Place 1 First Canadian Place
100 King Street West 100 King Street West
Toronto, Ontario Toronto, Ontario
M5X 1A1 M5X 1A1
<PAGE>
-58-
SCHEDULE 10.1(a)
----------------
ADDRESSES FOR NOTICE
The addresses of the Company, the Selling Shareholder, and the
Underwriters at which notice may be given are the addresses for
notice contained in the Underwriting Agreement.
Addresses for the Custodian and the Security Agent at which
notice may be given:
To the Custodian:
-----------------
The Trust Company of Bank of Montreal
105 St. Jacobs Street West
3rd Floor
Montreal, Quebec
H2Y 1L6
Attention: Account Manager and Supervisor, Shareholder Services
Telecopier No: (514) 877-9676
To the Security Agent:
----------------------
The R-M Trust Company
.
<PAGE>
EXHIBIT 3.4(i)(d)
DRAFT: JULY ., 1996
-----
SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF
JULY 31, 1996
BETWEEN
MERIDIAN GOLD INC.
AND
THE TRUST COMPANY OF BANK OF MONTREAL
AS RIGHTS AGENT
<PAGE>
TABLE OF CONTENTS
PAGE NO.
<TABLE>
<CAPTION>
ARTICLE 1--INTERPRETATION
<S> <C>
1.1 Certain Definitions 2
1.2 Currency 13
1.3 Headings 13
1.4 Calculation of Number and Percentage of Beneficial Ownership
of Outstanding Voting Shares 14
1.5 Acting Jointly or in Concert 14
1.6 Generally Accepted Accounting Principles 15
ARTICLE 2 - THE RIGHTS
2.1 Legend on Common Share Certificates 15
2.2 Initial Exercise Price; Exercise of Rights; Detachment of
Rights 15
2.3 Adjustments to Exercise Price; Number of Rights 19
2.4 Date on Which Exercise Is Effective 23
2.5 Execution, Authentication, Delivery and Dating of
Rights Certificates 24
2.6 Registration, Transfer and Exchange 24
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates 25
2.8 Persons Deemed Owners of Rights 26
2.9 Delivery and Cancellation of Certificates 26
2.10 Agreement of Rights Holders 26
2.11 Rights Certificate Holder Not Deemed a Shareholder 27
ARTICLE 3 - ADJUSTMENTS TO THE RIGHTS IN THE
EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in Event 28
ARTICLE 4 - THE RIGHTS AGENT
4.1 General 29
4.2 Merger, Amalgamation or Consolidation or Change of Name of
Rights Agent 30
4.3 Duties of Rights Agent 31
4.4 Change of Rights Agent 33
ARTICLE 5 - MISCELLANEOUS
5.1 Redemption, Waiver and Extension 33
5.2 Expiration 35
5.3 Issuance of New Rights Certificates 35
5.4 Supplements and Amendments 35
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
5.5 Fractional Rights and Fractional Shares 37
5.6 Rights of Action 38
5.7 Regulatory Approvals 38
5.8 Declaration as to Non-Canadian Holders 38
5.9 Notices 38
5.10 Costs of Enforcement 40
5.11 Successors 40
5.12 Benefits of this Agreement 40
5.13 Governing Law 40
5.14 Severability 40
5.15 Effective Date 40
5.16 Determinations and Actions by the Board of Directors 41
5.17 Time of the Essence 41
5.18 Execution in Counterparts 41
- ----
</TABLE>
2
<PAGE>
-4-
SHAREHOLDER RIGHTS PLAN AGREEMENT
MEMORANDUM OF AGREEMENT, dated as of July 31, 1996 between Meridian Gold
Inc. ("Meridian") a corporation incorporated under the laws of Canada and The
Trust Company of Bank of Montreal, a trust company incorporated under the laws
of Canada (the "Rights Agent");
RECITALS:
The Board (as defined below) has determined that it is in the best
interests of Meridian to adopt a shareholder rights plan to ensure, to the
extent possible, that all shareholders of Meridian are treated fairly in
connection with any take-over bid for Meridian;
In order to implement the adoption of a shareholder rights plan as
established by this Agreement, the Board has:
(a) authorized the issuance, effective at 12:01 a.m. on the Effective Date (as
defined below), of one Right (as defined below) in respect of each Common
Share (as defined below) at 12:01 a.m. on the Effective Date (the "Record
Time"); and
(b) authorized the issuance of one Right in respect of each Common Share of
Meridian issued after the Record Time and prior to the earlier of the
Separation Time (as defined below) and the Expiration Time (as defined
below);
Each Right entitles the holder, after the Separation Time, to purchase
securities of Meridian pursuant to the terms and subject to the conditions set
forth in this Agreement;
Meridian desires to appoint the Rights Agent to act on behalf of Meridian
and the holders of Rights, and the Rights Agent is willing to so act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as defined below), the exercise of Rights and other matters
referred to in this Agreement;
The Board proposes that this Agreement be in place for a period of three
years;
NOW THEREFORE, in consideration of the premises and the respective
covenants and agreements set forth in this Agreement, and subject to such
covenants and agreements, the parties hereby agree as follows:
ARTICLE--INTERPRETATION
CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms have the meanings indicated:
<PAGE>
-5-
"ACQUIRING PERSON" means any Person who is the Beneficial owner of 20% or
more of the outstanding Voting Shares of any class; provided, however, that
the term "Acquiring Person" shall not include:
Meridian or any Subsidiary of Meridian;
any Person who becomes the Beneficial owner of 20% or more of the
outstanding Voting Shares of any class as a result of one or any
combination of (A) an acquisition or redemption by Meridian of Voting
Shares of any class which, by reducing the number of Voting Shares of
that particular class outstanding, increases the proportionate number
of Voting Shares of that particular class Beneficially owned by such
Person to 20% or more of the Voting Shares of that particular class
then outstanding, (B) Permitted Bid Acquisitions, or (C) Pro Rata
Acquisitions; provided, however, that if a Person becomes the
Beneficial owner of 20% or more of the outstanding Voting Shares of
any class by reason of one or any combination of the operation of
Paragraphs (A), (B) or (C) above and such Person thereafter becomes
the Beneficial owner of any additional Voting Shares of that
particular class other than pursuant to Permitted Bid Acquisitions or
Pro Rata Acquisitions, then as of the date such Person becomes the
Beneficial owner of such additional Voting Shares of that particular
class, such Person shall become an "Acquiring Person";
for a period of ten days after the Disqualification Date (as defined
below), any Person who becomes the Beneficial owner of 20% or more of
the outstanding Voting Shares as a result of such Person becoming
disqualified from relying on Clause 1.1(f)(E) solely because such
Person or the Beneficial owner of such Voting Shares has participated
in, proposes or intends to make or is participating in a Take-over Bid
or any plan or proposal relating thereto or resulting therefrom,
either alone or by acting jointly or in concert with any other Person.
For the purposes of this definition, "Disqualification Date" means the
first date of a public announcement of facts indicating that any
Person has participated in, has made, proposes or intends to make or
is participating in a Take-over Bid;
an underwriter or member of a banking or selling group that becomes
the Beneficial owner of 20% or more of the Voting Shares in connection
with a bona fide distribution to the public of securities of Meridian;
or
a Person (a "Grandfathered Person") who is the Beneficial owner of
more than 20% of the outstanding Voting Shares determined as at the
Record Time, provided, however, that this exception shall not be, and
shall cease to be, applicable to a Grandfathered Person in the event
that such Grandfathered Person shall, after the Record Time, become
the Beneficial owner of any additional Voting Shares that increases
its Beneficial ownership of Voting Shares by more than 1% of the
number
<PAGE>
-6-
of Voting Shares outstanding as at the Record Time, other than through
a Permitted Bid Acquisition or a Pro Rata Acquisition.
"AFFILIATE", when used to indicate a relationship with a specified Person,
shall mean a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, such a specified Person.
"AGREEMENT" means this shareholder rights plan agreement, as amended or
supplemented from time to time;
"ANNUAL CASH DIVIDEND" means cash dividends paid in any fiscal year of
Meridian, to the extent that such cash dividends do not exceed in the
aggregate, the greatest of:
200% of the aggregate amount of cash dividends declared payable by
Meridian on its Common Shares in its immediately preceding fiscal
year;
300% of the arithmetic mean of the aggregate amounts of the annual
cash dividends declared payable by Meridian on its Common Shares in
its three immediately preceding fiscal years;
100% of the aggregate consolidated net income of Meridian, before
extraordinary items, for its immediately preceding fiscal year;
"ASSOCIATE" means, when used to indicate a relationship with a specified
Person, a spouse of that Person, any Person of the same or opposite sex
with whom that Person is living in a conjugal relationship outside
marriage, a child of that Person, or a relative of that Person who has the
same residence as that Person;
a Person shall be deemed the "BENEFICIAL OWNER" of, and to have "BENEFICIAL
OWNERSHIP" of, and to "BENEFICIALLY OWN",
any securities as to which such Person or any of such Person's
Affiliates or Associates is the owner at law or in equity;
any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become the owner at law or
in equity to acquire (whether such right is exercisable immediately or
within a period of 60 days thereafter and whether or not on condition
or the happening of any contingency or otherwise) pursuant to any
agreement, arrangement, pledge or understanding, whether or not in
writing (other than customary agreements with and between underwriters
and/or banking group members and/or selling group members with respect
to a public offering of securities and other than pledges of
securities in the ordinary course of
<PAGE>
-7-
business), or upon the exercise of any conversion right, exchange
right, share purchase right (other than the Rights), warrant or
option, or otherwise; and
any securities which are Beneficially owned within the meaning of
Clauses 1.1(f)(i) or (ii) by any other Person with whom such Person is
acting jointly or in concert;
provided, however, that a Person shall not be deemed the "Beneficial owner"
of, or to have "Beneficial ownership" of, or to "Beneficially own", any
security:
solely because such security has been deposited or tendered
pursuant to any Take-over Bid made by such Person, made by any of
such Person's Affiliates or Associates or made by any other
Person referred to in Clause 1.1(f)(iii), until the earliest of
such deposited or tendered security has been taken up or paid
for;
solely because such Person, any of such Person's Affiliates or
Associates or any other Person referred to in Clause 1.1(f)(iii),
has or shares the power to vote or direct the voting of such
security pursuant to a revocable proxy given in response to a
public proxy solicitation;
solely because such Person, any of such Person's Affiliates or
Associates or any other Person referred to in Clause 1.1(f)(iii),
has or shares the power to vote or direct the voting of such
security in connection with or in order to participate in a
public proxy solicitation made or to be made;
solely because such Person, any of such Person's Affiliates or
Associates or any other Person referred to in Clause 1.1(f)(iii),
has an agreement, arrangement or understanding with respect to a
particular shareholder proposal or a particular matter to come
before a meeting of shareholders, including the election of
directors ;
solely because such Person, any of such Person's Affiliates or
Associates or any other Person referred to in Clause 1.1(f)(iii),
holds or exercises voting or dispositive power over such security
provided that, (1) the ordinary business of any such Person (the
"Investment Manager") includes the management of investment funds
for others (which others, for greater certainty, may include or
be limited to one or more employee benefit plans or pension
plans) and such voting or dispositive power over such security is
held by the Investment Manager in the ordinary course of such
business in the performance of such Investment Manager's duties
for the account of any other Person (a "Client"); or (2) such
Person (the "Trust Company") is licensed to carry on the business
of a trust company under applicable laws and, as such, acts as
trustee or administrator or in a similar capacity in relation to
the estates of deceased or
<PAGE>
-8-
incompetent Persons and holds such voting or dispositive power
over such security in the ordinary course of such duties for the
estate of any such deceased or incompetent Person (each an
"Estate Account") or for such other accounts (each an "Other
Account"); or (3) such Person is established by statute for
purposes that include, and the ordinary business or activity of
such Person (the "Statutory Body") includes, the management of
investment funds for employee benefit plans, pension plans,
insurance plans or various public bodies; or (4) such Person (the
"Administrator") is the administrator or trustee of one or more
pension funds on plans (a "Plan") registered under the laws of
Canada or any province thereof or the laws of the United States
of America or any state thereof; or (5) such Person is a Crown
agent or agency;
provided, in any of the above cases, that the Investment Manager, the
Trust Company, the Statutory Body, the Administrator, the Plan, or the
Crown agent or agency as the case may be, is not then making a Take-
over Bid or has not then announced an intention to make a Take-over
Bid, other than an Offer to Acquire Voting Shares or other securities
by means of a distribution by Meridian or by means of ordinary market
transactions (including pre-arranged trades) executed through the
facilities of a stock exchange or organized over-the-counter market,
alone or by acting jointly or in concert with any other Person;
solely because such Person is, (1) a Client of the same
Investment Manager as another Person on whose account the
Investment Manager holds or exercises voting or dispositive power
over such security, or (2) an Estate Account or an Other Account
of the same Trust Company as another Person on whose account the
Trust Company holds or exercises voting or dispositive power over
such security, or (3) a Plan with the same Administrator as
another Plan; or
where such Person is, (1) a Client of an Investment Manager and
such security is owned at law or in equity by the Investment
Manager, or (2) an Estate Account or an Other Account of a Trust
Company and such security is owned at law or in equity by the
Trust Company, or (3) a Plan and such security is owned at law or
in equity by the Administrator of the Plan;
"BOARD" means the board of directors of Meridian or any duly constituted
and empowered committee thereof;
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banks in Toronto are authorized or obligated by law to close;
"CBCA" means the Canada Business Corporations Act, R.S.C. 1985, C. 44, as
amended, and the regulations made thereunder, and any comparable or
successor laws or regulations
<PAGE>
-9-
thereto;
"CANADIAN DOLLAR EQUIVALENT" of any amount which is expressed in United
States Dollars means, on any date, the Canadian dollar equivalent of any
such amount determined by multiplying such amount by the U.S. - Canadian
Exchange Rate in effect on such date;
"CANADIAN - U.S. EXCHANGE RATE" means, on any date, the inverse of the U.S.
- Canadian Exchange Rate in effect on such date;
"CLOSE OF BUSINESS" on any given date means the time on such date (or, if
such date is not a Business Day, the time on the next Business Day) at
which the principal transfer office in Toronto of the transfer agent for
the Common Shares (or, after the Separation Time, the principal transfer
office in Toronto of the Rights Agent) is closed to the public;
"COMMON SHARES" means the common shares in the capital of Meridian;
"COMPETING PERMITTED BID" means a Take-over Bid that:
(i) is made after another Permitted Bid has been made and prior to the
expiry of that other Permitted Bid;
(ii) satisfies all components of the definition of a Permitted Bid other
than the requirements set out in clause (ii) of the definition of a
Permitted Bid; and
(iii) contains, and the take-up and payment for securities tendered or
deposited is subject to, an irrevocable and unqualified provision
that no Voting Shares will be taken up or paid for pursuant to the
Take-over Bid prior to the close of business on a date that is no
earlier than the date on which Voting Shares may be taken up under
any other Permitted Bid that preceded the Competing Permitted Bid;
"CONTROLLED" a corporation shall be deemed to be "controlled" by another
Person or two or more Persons if:
securities entitled to vote in the election of directors carrying more
than 50% of the votes for the election of directors are held, directly
or indirectly, by or on behalf of the other Person or Persons ; and
the votes carried by such securities are entitled, if exercised, to
elect a majority of the board of directors of such corporation;
and "CONTROLS" shall be interpreted accordingly;
<PAGE>
-10-
"CO-RIGHTS AGENTS" has the meaning given in Subsection 4.1(a);
"DISPOSITION DATE" has the meaning given in Subsection 5.1(a);
"DIVIDEND REINVESTMENT ACQUISITION" means an acquisition of Voting Shares
of any class pursuant to a Dividend Reinvestment Plan;
"DIVIDEND REINVESTMENT PLAN" means a regular dividend reinvestment or other
plan of Meridian made available by Meridian to holders of its securities
and to holders of securities of a Subsidiary of Meridian, where such plan
permits the holder to direct that some or all of:
dividends paid in respect of shares of any class of Meridian or a
Subsidiary;
proceeds of redemption of shares of Meridian or a Subsidiary;
interest paid on evidences of indebtedness of Meridian or a
Subsidiary; or optional cash payments;
be applied to the purchase from Meridian of Common Shares;
"ELECTION TO EXERCISE" has the meaning given in Subsection 2.2(d);
"EFFECTIVE DATE" means July 31, 1996;
"EXERCISE PRICE" means, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right which,
until adjustment thereof in accordance with the terms of this Agreement,
shall be $25.00;
"EXPANSION FACTOR" has the meaning given in Subsection 2.3(a);
"EXPIRATION TIME" means the close of business on July 30, 1999;
"FLIP-IN EVENT" means a transaction in or pursuant to which any Person
becomes an Acquiring Person;
"HOLDER" has the meaning given in Section 2.8;
"INDEPENDENT SHAREHOLDERS" means holders of Voting Shares, other than (a)
any Acquiring Person, (b) any Offeror, (c) any Affiliates or Associates of
any Acquiring Person or Offeror, (d) any Person acting jointly or in
concert with any Acquiring Person or Offeror, and (e) any employee benefit
plan, stock purchase plan, deferred profit sharing plan and any similar
plan or trust for the benefit of employees of Meridian or a Subsidiary of
Meridian, unless the
<PAGE>
-11-
beneficiaries of the plan or trust direct the manner in which the Voting
Shares are to be voted or direct whether the Voting Shares are to be
tendered to a Take-over Bid;
"MARKET PRICE" per share of any securities on any date of determination
means the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any of the
events described in Section 2.3 shall have caused the closing prices used
to determine the Market Price on any Trading Days not to be fully
comparable with the closing price on such date of determination or, if the
date of determination is not a Trading Day, on the immediately preceding
Trading Day, each such closing price so used shall be appropriately
adjusted in a manner analogous to the applicable adjustment provided for in
Section 2.3 in order to make it fully comparable with the closing price on
such date of determination or, if the date of determination is not a
Trading Day, on the immediately preceding Trading Day. The closing price
per share of any securities on any date shall be:
the closing board lot sale price or, if such price is not available,
the average of the closing bid and asked prices, for each of such
securities as reported by the principal Canadian securities exchange
(as determined by Board) on which such securities are listed or
admitted to trading, or if for any reason neither of such prices is
available on such day or the securities are not listed or admitted to
trading on a Canadian securities exchange, the closing board lot sale
price or, if such price is not available, the average of the closing
bid and asked prices, for each share as reported by the principal
national securities exchange (as determined by the Board) on which
such securities are listed or admitted for trading;
if for any reason none of such prices is available on such date or the
securities are not listed or admitted to trading on a Canadian stock
exchange or a national United States securities exchange, the last
sale price, or in case no sale takes place on such date, the average
of the high bid and low asked prices for each of such securities in
the over-the-counter market, as quoted by any reporting system then in
use (as determined by the Board); or
if for any reason none of such prices is available on such day or the
securities are not listed or admitted to trading on a Canadian stock
exchange or a national United States securities exchange or quoted by
any such reporting system, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the securities selected by the Board;
provided, however, that if on any such date none of such prices is
available, the closing price per share of such securities on such date
shall mean the fair value per share of the securities on such date as
determined in good faith by the Board, after consultation with a nationally
<PAGE>
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or internationally recognized investment dealer or investment banker. The
Market Price shall be expressed in Canadian dollars and, if initially
determined in respect of any day forming part of the 20 consecutive Trading
Day period in question in United States dollars, such amount shall be
translated into Canadian dollars on such date at the Canadian Dollar
Equivalent thereof.
"MERIDIAN" means Meridian Gold Inc., together, where the context requires,
with its subsidiaries;
"NOMINEE" has the meaning given in Subsection 2.2(c);
"OFFER TO ACQUIRE" includes:
(i) an offer to purchase or a solicitation of an offer to sell Voting
Shares of any class or classes, and
(ii) an acceptance of an offer to sell Voting Shares of any class or
classes, whether or not such offer to sell has been solicited,
or any combination thereof, and the Person accepting an offer to sell shall
be deemed to be making an Offer to Acquire to the Person that made the
offer to sell;
"OFFEROR" means a Person who has announced an intention to make or who has
made a Take-over Bid;
"OFFEROR'S SECURITIES" means Voting Shares Beneficially owned by an Offeror
and by any Person acting jointly or in concert with such Person on the date
of the Offer to Acquire;
"PERMITTED BID" means a Take-over Bid made by an Offeror that is made by
means of a Take-over Bid circular and which also complies with the
following additional provisions:
the Take-over Bid is made to all holders of Voting Shares as
registered on the books of Meridian, other than the Offeror;
the Take-over Bid contains, and the take-up and payment for securities
tendered or deposited is subject to, an irrevocable and unqualified
provision that Voting Shares will be taken up and paid for pursuant to
the Take-over Bid prior to the close of business on a date which is
not less than 60 days following the date of the Take-over Bid and only
if at such date more than 50% of the Voting Shares held by Independent
Shareholders shall have been deposited or tendered pursuant to the
Take-over Bid and not withdrawn;
<PAGE>
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unless the Take-over Bid is withdrawn, the Take-over Bid contains an
irrevocable and unqualified provision that Voting Shares may be
deposited pursuant to such Take-over Bid at any time during the period
described in Clause 1.1(hh)(ii) and that any Voting Shares deposited
pursuant to the Take-over Bid may be withdrawn until taken up and paid
for; and
unless the Take-over Bid is withdrawn, the Take-over Bid contains an
irrevocable and unqualified provision that in the event that the
deposit condition set forth in Clause 1.1(hh)(ii) is satisfied the
Offeror will make a public announcement of that fact and the Take-over
Bid will remain open for deposits and tenders of Voting Shares for not
less than ten Business Days from the date of such public announcement;
"PERMITTED BID ACQUISITION" means an acquisition of Voting Shares made
pursuant to a Permitted Bid or a Competing Permitted Bid;
"PERSON" includes an individual, firm, body corporate, trust, partnership,
syndicate or other form of unincorporated association, a government and its
agencies or instrumentalities, any entity or group whether or not having
legal personality and any of the foregoing acting in any derivative,
representative or fiduciary capacity;
"PRO RATA ACQUISITION" means an acquisition of Voting Shares: (i) as a
result of a stock dividend, stock split or other event pursuant to which a
Person receives or acquires Voting Shares on the same pro rata basis as all
other holders of Voting Shares; or (ii) pursuant to a Dividend Reinvestment
Plan; or (iii) pursuant to the receipt and/or exercise of rights issued by
Meridian to all the holders of Voting Shares of Meridian to subscribe for
or purchase Voting Shares of Meridian, provided that such rights are
acquired directly from Meridian as part of a bona fide rights offering and
not from any other Person; or (iv) pursuant to a distribution by Meridian
to the public of Voting Shares, or securities convertible into or
exchangeable for Voting Shares (and the conversion or exchange of such
convertible or exchangeable securities) made pursuant to a prospectus or by
way of private placement by Meridian, provided that the Person does not
thereby acquire a greater percentage of such Voting Shares, or securities
convertible or exchangeable for Voting Shares, than the Person's percentage
of Voting Shares Beneficially owned immediately prior to such acquisition;
"RECORD TIME" has the meaning set forth in the recitals to this Agreement;
"REDEMPTION PRICE" has the meaning given in Subsection 5.1(c);
"RIGHT" means a right to purchase a Common Share of Meridian, upon the
terms and subject to the conditions set forth in this Agreement;
<PAGE>
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"RIGHTS CERTIFICATE" means the certificates representing the Rights after
the Separation Time, which shall be substantially in the form of Attachment
1;
"RIGHTS HOLDERS' SPECIAL MEETING" means a meeting of the holders of Rights
called by the Board for the purpose of approving a supplement or amendment
to this Agreement pursuant to Subsection 5.4(c);
"RIGHTS REGISTER" has the meaning given in Subsection 2.6(a);
"SECURITIES ACT (ONTARIO)" means the Securities Act, R.S.O 1990, c.S.5, as
amended, and the regulations thereunder, and any comparable or successor
laws or regulations thereto;
"SEPARATION TIME" means the close of business on the eighth Trading Day
after the earlier of:
the Stock Acquisition Date; and
the date of the commencement of or first public announcement of the
intent of any Person (other than Meridian or any Subsidiary of
Meridian) to commence a Take-over Bid (other than a Permitted Bid or a
Competing Permitted Bid, as the case may be), or such earlier or later
time as may be determined by the Board, provided that, if any Take-
over Bid referred to in this Clause (ii) expires, is cancelled,
terminated or otherwise withdrawn prior to the Separation Time, such
Take-over Bid shall be deemed, for the purposes of this definition,
never to have been made;
"SPECIAL MEETING" means a special meeting of the holders of Voting Shares,
called by the Board for the purpose of approving a supplement or amendment
to this Agreement pursuant to Subsections 5.4(b) or 5.4(c);
"STOCK ACQUISITION DATE" shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation,
a report filed pursuant to section 101 of the Securities Act (Ontario) or
section 13(d) of the U.S. Exchange Act) by Meridian or an Acquiring Person
that an Acquiring Person has become such;
"SUBSIDIARY": a corporation shall be deemed to be a Subsidiary of another
corporation if:
it is controlled by: that other, that other and one or more
corporations each of which is controlled by that other, or two or more
corporations each of which is controlled by that other, or
it is a Subsidiary of a corporation that is that other's Subsidiary;
"TAKE-OVER BID" means an Offer to Acquire Voting Shares or securities
convertible into
<PAGE>
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Voting Shares if, assuming that the Voting Shares or convertible securities
subject to the Offer to Acquire are acquired and are Beneficially owned at
the date of such Offer to Acquire by the Person making such Offer to
Acquire, such Voting Shares (including Voting Shares that may be acquired
upon conversion of securities convertible into Voting Shares) together with
the Offeror's Securities, constitute in the aggregate 20% or more of the
outstanding Voting Shares at the date of the offer to Acquire;
"TRADING DAY", when used with respect to any securities, means a day on
which the principal Canadian securities exchange on which such securities
are listed or admitted to trading is open for the transaction of business
or, if the securities are not listed or admitted to trading on any Canadian
securities exchange, a Business Day;
"U.S. - CANADIAN EXCHANGE RATE" means, on any date:
if on such date the Bank of Canada sets an average noon spot rate of
exchange for the conversion of one United States dollar into Canadian
dollars, such rate; and
in any other case, the rate for such date for the conversion of one
United States dollar into Canadian dollars calculated in such manner
as may be determined by the Board from time to time acting in good
faith;
"U.S. DOLLAR EQUIVALENT" of any amount which is expressed in Canadian
dollars means, on any date, the United States dollar equivalent of such
amount determined by multiplying such amount by the Canadian - U.S.
Exchange Rate in effect on such date;
"U.S. EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder as now in effect
or as the same may from time to time be amended, re-enacted or replaced;
and
"VOTING SHARES" means the Common Shares and any other shares in the capital
of Meridian entitled to vote generally in the election of all elected
directors.
CURRENCY
All sums of money which are referred to in this Agreement are expressed in
lawful money of Canada, unless otherwise specified.
HEADINGS
The division of this Agreement into Articles, Sections, Subsections, Clauses,
Paragraphs, Subparagraphs or other portions of this Agreement and the insertion
of headings, subheadings and a table of contents are for convenience of
reference only and shall not affect the construction or
<PAGE>
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interpretation of this Agreement.
CALCULATION OF NUMBER AND PERCENTAGE OF BENEFICIAL OWNERSHIP OF OUTSTANDING
VOTING SHARES
For purposes of this Agreement, the percentage of Voting Shares of any class
Beneficially owned by any Person, shall be and be deemed to be the product
determined by the formula 100 x A/B, where:
A = the number of votes for the election of all directors generally
attaching to the Voting Shares Beneficially owned by such Person; and
B = the number of votes for the election of all directors generally
attaching to all outstanding Voting Shares.
Where any Person is deemed to Beneficially own unissued Voting Shares, such
Voting Shares shall be deemed to be outstanding for the purpose of calculating
the percentage of Voting Shares owned by such Person.
ACTING JOINTLY OR IN CONCERT
For purposes of this Agreement, whether Persons are acting jointly or in concert
is a question of fact in each circumstance, however, a Person shall be deemed to
be acting jointly or in concert with another Person if such Person would be
deemed to be acting jointly or in concert with such other Person for purposes of
section 91 of the Securities Act (Ontario) as it exists on the date of this
Agreement. Notwithstanding the foregoing and for greater certainty, the phrase
"acting jointly or in concert", wherever used in this Agreement, shall not
include conduct:
unrelated to Meridian; or
consisting solely of:
voting or directing the vote of securities of Meridian pursuant to a
revocable proxy given in response to a public proxy solicitation;
voting or directing the vote of securities of Meridian in connection
with or in order to participate in a public proxy solicitation made or
to be made; or
having an agreement, arrangement or understanding with respect to a
particular shareholder proposal or a particular matter to come before
a meeting of shareholders, including the election of directors.
<PAGE>
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GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Wherever in this Agreement reference is made to generally accepted accounting
principles, such reference shall be deemed to be the recommendations at the
relevant time of the Canadian Institute of Chartered Accountants, or any
successor institute, applicable on a consolidated basis (unless otherwise
specifically provided in this Agreement to be applicable on an unconsolidated
basis) as at the date on which a calculation is made or required to be made in
accordance with generally accepted accounting principles. Where the character or
amount of any asset or liability or item of revenue or expense is required to be
determined, or any consolidation or other accounting computation is required to
be made for the purpose of this Agreement or any document, such determination or
calculation shall, to the extent applicable and except as otherwise specified in
this Agreement or as otherwise agreed in writing by the parties, be made in
accordance with generally accepted accounting principles applied on a consistent
basis.
ARTICLE - THE RIGHTS
LEGEND ON COMMON SHARE CERTIFICATES
Certificates for the Common Shares that are issued after the Record Time but
prior to the earlier of the Separation Time and the Expiration Time, shall also
evidence one Right for each Common Share represented thereby and shall bear the
following legend:
"Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences rights of the holder described in a
Shareholder Rights Plan Agreement dated as of July 31, 1996 (the "Rights
Agreement") between Meridian Gold Inc. (the "Corporation") and The Trust
Company of Bank of Montreal, the terms of which are incorporated herein by
reference and a copy of which is on file at the registered office of the
Corporation. Under certain circumstances set out in the Rights Agreement,
the rights may expire, may become null and void or may be evidenced by
separate certificates and no longer evidenced by this certificate. The
Corporation will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge as soon as
practicable after receipt of a written request therefor."
INITIAL EXERCISE PRICE; EXERCISE OF RIGHTS; DETACHMENT OF RIGHTS
Subject to adjustment as set forth below, each Right will entitle the
holder thereof, from and after the Separation Time and prior to the
Expiration Time, to purchase one Common Share for the Exercise Price (and
the Exercise Price and number of Common Shares are subject to adjustment as
set forth below). Notwithstanding any other term of this Agreement, any
Rights held by Meridian or any of its Subsidiaries shall be void.
Until the Separation Time,
the Rights shall not be exercisable and no Right may be exercised; and
each Right will be evidenced by the certificate for the associated
Common Share of
<PAGE>
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Meridian registered in the name of the holder thereof (which
certificate shall also be deemed to represent a Rights Certificate)
and will be transferable only together with, and will be transferred
by a transfer of, such associated Common Share of Meridian.
From and after the Separation Time and prior to the Expiration Time:
the Rights shall be exercisable; and
the registration and transfer of Rights shall be separate from and
independent of Common Shares.
Promptly following the Separation Time, Meridian will prepare and the
Rights Agent will mail to each holder of record of Common Shares as of the
Separation Time (other than an Acquiring Person and, in respect of any
Rights Beneficially owned by such Acquiring Person which are not held of
record by such Acquiring Person, the holder of record of such Rights (a
"Nominee")), at such holder's address as shown by the records of Meridian
(Meridian hereby agreeing to furnish copies of such records to the Rights
Agent for this purpose): (x) a Rights Certificate appropriately completed,
representing the number of Rights held by such holder at the Separation
Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as Meridian may deem
appropriate and as are not inconsistent with the terms of this Agreement,
or as may be required to comply with any law, rule or regulation or with
any rule or regulation of any self-regulatory organization, stock exchange
or quotation system on which the Rights may from time to time be listed or
traded, or to conform to usage; and (y) a disclosure statement describing
the Rights, provided that a Nominee shall be sent the materials provided
for in (x) and (y) in respect of all Common Shares held of record by it
which are not Beneficially owned by an Acquiring Person.
Rights may be exercised, in whole or in part, on any Business Day after the
Separation Time and prior to the Expiration Time by submitting to the
Rights Agent:
the Rights Certificate evidencing such Rights;
an election to exercise such Rights (an "Election to Exercise")
substantially in the form attached to the Rights Certificate
appropriately completed and executed by the holder or his executors or
administrators or other personal representatives or his or their legal
attorney duly appointed by an instrument in writing in form and
executed in a manner satisfactory to the Rights Agent; and
payment by certified cheque, banker's draft or money order payable to
the order of Meridian, of a sum equal to the Exercise Price multiplied
by the number of Rights being exercised and a sum sufficient to cover
any withholding taxes payable by a
<PAGE>
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holder who is a non-resident of Canada for purposes of the Income Tax
Act (Canada) in respect of the exercise of the Rights or the fact that
the Rights have been exercised and any transfer tax or similar charge
which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for Common Shares in a name other than that
of the holder of the Rights being exercised.
Upon receipt of a Rights Certificate, together with a completed Election to
Exercise executed in accordance with Clause 2.2(d)(ii), which does not
indicate that such Right is null and void as provided by Subsection 3.1(b),
and payment as set forth in Clause 2.2(d)(iii), the Rights Agent (unless
otherwise instructed by Meridian in the event that Meridian is of the
opinion that the Rights cannot be exercised in accordance with this
Agreement) will thereupon promptly:
requisition from the transfer agent certificates representing the
number of such Common Shares to be purchased (Meridian hereby
irrevocably authorizing its transfer agents to comply with all such
requisitions);
when appropriate, requisition from Meridian the amount of cash to be
paid in lieu of issuing fractional Common Shares;
after receipt of the certificates referred to in Clause 2.2(e)(i),
deliver the same to or upon the order of the registered holder of such
Rights Certificates, registered in such name or names as may be
designated by such holder; and
when appropriate, after receipt, deliver the cash referred to in
Clause 2.2(e)(ii) to or to the order of the registered holder of such
Rights Certificate.
In case the holder of any Rights shall exercise less than all the Rights
evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised (subject to Subsection 5.5(a))
will be issued by the Rights Agent to such holder or to such holder's duly
authorized assigns.
Meridian covenants and agrees that it will:
take all such action as may be necessary and within its power to
ensure that all Common Shares delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such Common Shares
(subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and non-
assessable;
take all such action as may be necessary and within its power to
comply with the requirements of the CBCA, the Securities Act
(Ontario), and the securities laws or
<PAGE>
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comparable legislation of each of the provinces of Canada and any
other applicable law, rule or regulation, in connection with the
issuance and delivery of the Rights Certificates and the issuance of
any Common Shares upon exercise of Rights;
use reasonable efforts to cause all Common Shares issued upon exercise
of Rights to be listed on the principal stock exchanges on which such
Common Shares were traded immediately prior to the Stock Acquisition
Date;
cause to be reserved and kept available out of the authorized and
unissued Common Shares, the number of Common Shares that, as provided
in this Agreement, will from time to time be sufficient to permit the
exercise in full of all outstanding Rights;
pay when due and payable, if applicable, any and all federal,
provincial and municipal transfer taxes and similar charges (not
including any income or capital taxes of the holder or exercising
holder or any liability of Meridian to withhold tax) which may be
payable in respect of the original issuance or delivery of the Rights
Certificates, or certificates for Common Shares, provided that
Meridian shall not be required to pay any transfer tax or similar
charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for Common Shares in a name other than that
of the holder of the Rights being transferred or exercised; and
after the Separation Time, except as permitted by Section 5.1, not
take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS
The Exercise Price, the number and kind of securities subject to purchase upon
exercise of each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 2.3. Meridian shall
provide the Rights Agent with notice of any such adjustment.
In the event Meridian shall at any time after the date of this Agreement:
declare or pay a dividend on Common Shares payable in Common Shares
(or other securities exchangeable for or convertible into or giving a
right to acquire Common Shares or other capital stock) other than
pursuant to any optional stock dividend program;
subdivide or change the then outstanding Common Shares into a greater
number of Common Shares;
<PAGE>
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consolidate or change the then outstanding Common Shares into a
smaller number of Common Shares; or
issue any Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or other
capital stock) in respect of, in lieu of or in exchange for existing
Common Shares except as otherwise provided in this Section 2.3,
the Exercise Price and the number of Rights outstanding, or, if the payment
or effective date therefor shall occur after the Separation Time, the
securities purchasable upon exercise of Rights shall be adjusted as of the
payment or effective date in the manner set forth below.
If the Exercise Price and number of Rights outstanding are to be adjusted:
(x) the Exercise Price in effect after such adjustment will be equal to the
Exercise Price in effect immediately prior to such adjustment divided by
the number of Common Shares (or other capital stock) (the "Expansion
Factor") that a holder of one Common Share immediately prior to such
dividend, subdivision, change, consolidation or issuance would hold
thereafter as a result thereof; and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor,
and the adjusted number of Rights will be deemed to be distributed among
the Common Shares with respect to which the original Rights were associated
(if they remain outstanding) and the shares issued in respect of such
dividend, subdivision, change, consolidation or issuance, so that each such
Common Share (or other capital stock) will have exactly one Right
associated with it.
For greater certainty, if the securities purchasable upon exercise of
Rights are to be adjusted, the securities purchasable upon exercise of each
Right after such adjustment will be the securities that a holder of the
securities purchasable upon exercise of one Right immediately prior to such
dividend, subdivision, change, consolidation or issuance would hold
thereafter as a result of such dividend, subdivision, change, consolidation
or issuance.
If, after the Record Time and prior to the Expiration Time, Meridian shall
issue any shares of capital stock other than Common Shares in a transaction
of a type described in Clause 2.3(a)(i) or (iv), shares of such capital
stock shall be treated in this Agreement as nearly equivalent to Common
Shares as may be practicable and appropriate under the circumstances and
Meridian and the Rights Agent agree to amend this Agreement in order to
effect such treatment.
In the event Meridian shall at any time after the Record Time and prior to
the Separation Time issue any Common Shares otherwise than in a transaction
referred to in this Subsection 2.3(a), each such Common Share so issued
shall automatically have one new Right associated with it, which Right
shall be evidenced by the certificate representing such associated Common
Share.
<PAGE>
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In the event Meridian shall at any time after the Record Time and prior to
the Separation Time fix a record date for the issuance of rights, options
or warrants to all holders of Common Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for
or purchase Common Shares (or securities convertible into or exchangeable
for or carrying a right to purchase Common Shares) at a price per Common
Share (or, if a security convertible into or exchangeable for or carrying a
right to purchase or subscribe for Common Shares, having a conversion,
exchange or exercise price, including the price required to be paid to
purchase such convertible or exchangeable security or right per share) less
than the Market Price per Common Share on such record date, the Exercise
Price to be in effect after such record date shall be determined by
multiplying the Exercise Price in effect immediately prior to such record
date by a fraction:
the numerator of which shall be the number of Common Shares
outstanding on such record date, plus the number of Common Shares that
the aggregate offering price of the total number of Common Shares so
to be offered (and/or the aggregate initial conversion, exchange or
exercise price of the convertible or exchangeable securities or rights
so to be offered, including the price required to be paid to purchase
such convertible or exchangeable securities or rights) would purchase
at such Market Price per Common Share; and
the denominator of which shall be the number of Common Shares
outstanding on such record date, plus the number of additional Common
Shares to be offered for subscription or purchase (or into which the
convertible or exchangeable securities or rights so to be offered are
initially convertible, exchangeable or exercisable).
In case such subscription price may be paid by delivery of consideration,
part or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of Rights. Such
adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights, options or warrants are not so issued,
or if issued, are not exercised prior to the expiration thereof, the
Exercise Price shall be readjusted to the Exercise Price which would then
be in effect if such record date had not been fixed, or to the Exercise
Price which would be in effect based upon the number of Common Shares (or
securities convertible into, or exchangeable or exercisable for Common
Shares) actually issued upon the exercise of such rights, options or
warrants, as the case may be.
For purposes of this Agreement, the granting of the right to purchase
Common Shares (whether from treasury or otherwise) pursuant to the Dividend
Reinvestment Plan or any employee benefit, stock option or similar plans
shall be deemed not to constitute an issue of rights, options or warrants
by Meridian; provided, however, that, in all such cases, the right
<PAGE>
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to purchase Common Shares is at a price per share of not less than 95% of
the current market price per share (determined as provided in such plans)
of the Common Shares.
In the event Meridian shall at any time after the Record Time and prior to
the Separation Time fix a record date for the making of a distribution to
all holders of Common Shares (including any such distribution made in
connection with a merger or amalgamation) of evidences of indebtedness,
cash (other than an annual cash dividend or a dividend referred to in
Section 2.3(a)(i), but including any dividend payable in securities other
than Common Shares), assets or rights, options or warrants (excluding those
referred to in Subsection 2.3(b)), the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction:
the numerator of which shall be the Market Price per Common Share on
such record date, less the fair market value (as determined in good
faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of Rights), on a per share basis, of the
portion of the cash, assets, evidences of indebtedness, rights,
options or warrants so to be distributed; and
the denominator of which shall be such Market Price per Common Share.
Such adjustments shall be made successively whenever such a record date is
fixed, and in the event that such a distribution is not so made, the
Exercise Price shall be adjusted to be the Exercise Price which would have
been in effect if such record date had not been fixed.
Notwithstanding anything in this Agreement to the contrary, no adjustment
in the Exercise Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Exercise Price;
provided, however, that any adjustments which by reason of this Subsection
2.3(d) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under Section 2.3
shall be made to the nearest cent or to the nearest ten-thousandth of a
share. Notwithstanding the first sentence of this Subsection 2.3(d), any
adjustment required by Section 2.3 shall be made no later than the earlier
of:
three years from the date of the transaction which gives rise to such
adjustment; or
the Expiration Time.
In the event Meridian shall at any time after the Record Time and prior to
the Separation Time issue any shares of capital stock (other than Common
Shares), or rights, options or warrants to subscribe for or purchase any
such capital stock, or securities convertible into or exchangeable for any
such capital stock in a transaction referred to in Clauses 2.3(a)(i) or
(iv)
<PAGE>
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above, if the Board acting in good faith determines that the adjustments
contemplated by Subsections 2.3(a), (b) and (c) above in connection with
such transaction will not appropriately protect the interests of the
holders of Rights, the Board may determine what other adjustments to the
Exercise Price, number of Rights and/or securities purchasable upon
exercise of Rights would be appropriate and, notwithstanding Subsections
2.3(a), (b) and (c) above, such adjustments, rather than the adjustments
contemplated by Subsections 2.3(a), (b) and (c) above, shall be made.
Subject to the prior consent of the holders of the Voting Shares or the
Rights as set forth in subsection 5.4(b) or (c), Meridian and the Rights
Agent shall have authority to amend this Agreement as appropriate to
provide for such adjustments.
Each Right originally issued by Meridian subsequent to any adjustment made
to the Exercise Price hereunder shall evidence the right to purchase, at
the adjusted Exercise Price, the number of Common Shares purchasable from
time to time hereunder upon exercise of a Right immediately prior to such
issue, all subject to further adjustment as provided in this Agreement.
Irrespective of any adjustment or change in the Exercise Price or the
number of Common Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to
express the Exercise Price per Common Share and the number of Common Shares
which were expressed in the initial Rights Certificates issued hereunder.
In any case in which this Section 2.3 shall require that an adjustment in
the Exercise Price be made effective as of a record date for a specified
event, Meridian may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
number of Common Shares and other securities of Meridian, if any, issuable
upon such exercise over and above the number of Common Shares and other
securities of Meridian, if any, issuable upon such exercise on the basis of
the Exercise Price in effect prior to such adjustment; provided, however,
that Meridian shall deliver to such holder an appropriate instrument
evidencing such holder's right to receive such additional shares
(fractional or otherwise) or other securities upon the occurrence of the
event requiring such adjustment.
Notwithstanding anything contained in this Section 2.3, Meridian shall be
entitled to make such reductions in the Exercise Price, in addition to
those adjustments expressly required by this Section 2.3, as and to the
extent that in their good faith judgment the Board shall determine to be
advisable, in order that any:
consolidation or subdivision of Common Shares;
issuance (wholly or in part for cash) of Common Shares or securities
that by their terms are convertible into or exchangeable for Common
Shares;
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stock dividends; or
issuance of rights, options or warrants referred to in this Section
2.3,
hereafter made by Meridian to holders of its Common Shares, shall not be
taxable to such shareholders.
DATE ON WHICH EXERCISE IS EFFECTIVE
Each Person in whose name any certificate for Common Shares or other securities,
if applicable, is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Common Shares or other
securities, if applicable, represented thereon, and such certificate shall be
dated the date upon which the Rights Certificate evidencing such Rights was duly
surrendered in accordance with Subsection 2.2(d) (together with a duly completed
Election to Exercise) and payment of the Exercise Price for such Rights (and any
applicable transfer taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the Common Share transfer books
of Meridian are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Share transfer books of Meridian are
open.
EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS CERTIFICATES
The Rights Certificates shall be executed on behalf of Meridian by its
Chairman of the Board, President or any of its Vice Presidents and by its
Secretary or one of its Assistant Secretaries under the corporate seal of
Meridian reproduced thereon. The signature of any of these officers on the
Rights Certificates may be manual or facsimile. Rights Certificates bearing
the manual or facsimile signatures of individuals who were at any time the
proper officers of Meridian shall bind Meridian, notwithstanding that such
individuals or any of them have ceased to hold such offices either before
or after the countersignature and delivery of such Rights Certificates.
Promptly after Meridian learns of the Separation Time, Meridian will notify
the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by Meridian to the Rights Agent for countersignature,
and the Rights Agent shall countersign (in a manner satisfactory to
Meridian) and send such Rights Certificates to the holders of the Rights
pursuant to Subsection 2.2(c). No Rights Certificate shall be valid for
any purpose until countersigned by the Rights Agent.
Each Rights Certificate shall be dated the date of its countersignature.
REGISTRATION, TRANSFER AND EXCHANGE
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Meridian will cause to be kept a register (the "Rights Register") in which,
subject to such reasonable regulations as it may prescribe, Meridian will
provide for the registration and transfer of Rights. The Rights Agent is
hereby appointed registrar for the Rights (the "Rights Registrar") for the
purpose of maintaining the Rights Register for Meridian and registering
Rights and transfers of Rights and the Rights Agent hereby accepts such
appointment. In the event that the Rights Agent shall cease to be the
Rights Registrar, the Rights Agent will have the right to examine the
Rights Register at all reasonable times. After the Separation Time and
prior to the Expiration Time, upon surrender for registration of transfer
or exchange of any Rights Certificate, and subject to Subsection 2.6(c),
Meridian will execute, and the Rights Agent will manually countersign and
deliver, in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or more
new Rights Certificates evidencing the same aggregate number of Rights as
did the Rights Certificates so surrendered.
All Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of Meridian, and such Rights
shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to Meridian or the Rights Agent, as the
case may be, duly executed by the holder thereof or such holder's attorney
duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.6, Meridian may require the payment
of a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including the
reasonable fees and expenses of the Rights Agent).
MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES
If any mutilated Rights Certificate is surrendered to the Rights Agent
prior to the Expiration Time, Meridian shall execute and the Rights Agent
shall countersign and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as the surrendered Rights Certificate.
If there shall be delivered to Meridian and the Rights Agent prior to the
Expiration Time:
evidence to their reasonable satisfaction of the destruction, loss or
theft of any Rights Certificate; and
such security or indemnity as may be reasonably required by them to
save each of
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them and any of their agents harmless, then, in the absence of notice
to Meridian or the Rights Agent that such Rights Certificate has been
acquired by a bona fide purchaser, Meridian shall execute and upon
Meridian's request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so destroyed, lost or stolen.
As a condition to the issuance of any new Rights Certificate, Meridian may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the reasonable fees and expenses of the Rights Agent)
connected therewith.
Every new Rights Certificate issued in lieu of any destroyed, lost or
stolen Rights Certificate shall evidence the contractual obligation of
Meridian, whether or not the destroyed, lost or stolen Rights Certificate
shall be at any time enforceable by anyone, and shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights.
PERSONS DEEMED OWNERS OF RIGHTS
Meridian, the Rights Agent and any agent of Meridian or the Rights Agent may
deem and treat the Person in whose name a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby for all purposes
whatsoever. As used in this Agreement, unless the context otherwise requires,
the term "holder" of any Rights shall mean the registered holder of such Rights
(or, prior to the Separation Time, of the associated Common Share).
DELIVERY AND CANCELLATION OF CERTIFICATES
All Rights Certificates surrendered upon exercise or for redemption,
registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall
be promptly cancelled by the Rights Agent. Meridian may at any time deliver to
the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which Meridian may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly
cancelled by the Rights Agent. No Rights Certificate shall be countersigned in
lieu of or in exchange for any Rights Certificates cancelled as provided in this
Section 2.9, except as expressly permitted by this Agreement. The Rights Agent
shall, subject to applicable laws, destroy all cancelled Rights Certificates and
deliver a certificate of destruction to Meridian.
AGREEMENT OF RIGHTS HOLDERS
Every holder of Rights, by accepting the same, consents and agrees with Meridian
and the Rights
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Agent and with every other holder of Rights:
to be bound by and subject to the terms of this Agreement, as amended from
time to time in accordance with the terms of this Agreement, in respect of
all Rights held;
that prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated
Common Share certificate representing such Right;
that after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided in this Agreement;
that prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) for registration
of transfer, Meridian, the Rights Agent and any agent of Meridian or the
Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Separation Time, the associated Common Share
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
such Rights Certificate or the associated Common Share certificate made by
anyone other than Meridian or the Rights Agent) for all purposes
whatsoever, and neither Meridian nor the Rights Agent shall be affected by
any notice;
that such holder of Rights has waived his right to receive any fractional
Rights or any fractional shares or other securities upon exercise of a
Right (except as provided in this Agreement);
that, subject to Section 5.4, without the approval of any holder of Rights
or Voting Shares and upon the sole authority of the Board, acting in good
faith, this Agreement may be supplemented or amended from time to time to
cure any ambiguity or to correct or supplement any term contained in this
Agreement which may be inconsistent with the intent of this Agreement or is
otherwise defective, as provided in this Agreement; and
that as between such holder and all other parties to this Agreement, no
party other than such holder shall be liable for any withholding taxes that
may become payable by or on behalf of a holder in respect of the Rights
should they become exercisable or be exercised.
RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER
No holder, as such, of any Rights or Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose whatsoever the holder of
any Common Share or any other share or security of Meridian which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained in this Agreement or in any Rights Certificate be construed
or
<PAGE>
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deemed or confer upon the holder of any Right or Rights Certificate, as such,
any right, title, benefit or privilege of a holder of Common Shares or any other
shares or securities of Meridian or any right to vote at any meeting of
shareholders of Meridian whether for the election of directors or otherwise or
upon any matter submitted to holders of Common Shares or any other shares of
Meridian at any meeting thereof, or to give or withhold consent to any action of
Meridian, or to receive notice of any meeting or other action affecting any
holder of Common Shares or any other shares of Meridian except as expressly
provided in this Agreement, or to receive dividends, distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by Rights
Certificates shall have been duly exercised in accordance with the terms of this
Agreement.
ARTICLE - ADJUSTMENTS TO THE RIGHTS IN THE
EVENT OF CERTAIN TRANSACTIONS
FLIP-IN EVENT
Subject to Subsection 3.1(b) and Section 5.1, in the event that prior to
the Expiration Time a Flip-in Event shall occur, each Right shall
constitute, effective at the close of business on the eighth Trading Day
after the Stock Acquisition Date, the right to purchase from Meridian, upon
exercise thereof in accordance with the terms of this Agreement, that
number of Common Shares having an aggregate Market Price on the date of
consummation or occurrence of such Flip-in Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise Price (such
right to be appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 in the event that after the
consummation or occurrence or event, an event of a type analogous to any of
the events described in Section 2.3 shall have occurred.
Notwithstanding anything in this Agreement, upon the occurrence of any
Flip-in Event, any Rights that are or were Beneficially owned on or after
the earlier of the Separation Time or the Stock Acquisition Date by:
an Acquiring Person (or any Affiliate or Associate of an Acquiring
Person or any Person acting jointly or in concert with an Acquiring
Person or any Affiliate or Associate of an Acquiring Person); or
a transferee of Rights, directly or indirectly, from an Acquiring
Person (or any Affiliate or Associate of an Acquiring Person or any
Person acting jointly or in concert with an Acquiring Person or any
Affiliate or Associate of an Acquiring Person), where such transferee
becomes a transferee concurrently with or subsequent to the Acquiring
Person becoming such in a transfer that the Board has determined is
part of a plan, arrangement or scheme of an Acquiring Person (or any
Affiliate or Associate of an Acquiring Person or any Person acting
jointly or in concert with an Acquiring Person or any Associate or
Affiliate of an Acquiring Person), that has the
<PAGE>
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purpose or effect of avoiding Clause 3.1(b)(i),
shall become null and void without any further action, and any holder of
such Rights (including transferees) shall thereafter have no right to
exercise such Rights under any term of this Agreement and further shall
thereafter not have any other rights whatsoever with respect to such
Rights, whether under any term of this Agreement or otherwise.
From and after the Separation Time, Meridian shall do all such acts and
things as shall be necessary and within its power to ensure compliance with
Section 3.1, including without limitation, all such acts and things as may
be required to satisfy the requirements of the CBCA, the Securities Act
(Ontario) and the securities laws or comparable legislation in each of the
provinces of Canada and of the United States and each of the States thereof
in respect of the issue of Common Shares upon the exercise of Rights in
accordance with this Agreement.
Any Rights Certificate that represents Rights Beneficially owned by a
Person described in either Clause 3.1(b)(i) or (ii) or transferred to any
nominee of any such Person, and any Rights Certificate issued upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the following
legend:
"The Rights represented by this Rights Certificate were issued to
a Person who was an Acquiring Person or an Affiliate or an Associate
of an Acquiring Person (as such terms are defined in the Shareholder
Rights Plan Agreement) or a Person who was acting jointly or in
concert with an Acquiring Person or an Affiliate or Associate of an
Acquiring Person. This Rights Certificate and the Rights represented
hereby are void or shall become void in the circumstances specified in
Subsection 3.1(b) of the Shareholder Rights Plan Agreement."
Provided, however, that the Rights Agent shall not be under any
responsibility to ascertain the existence of facts that would require the
imposition of such legend but shall impose such legend only if instructed
to do so by Meridian in writing or if a holder fails to certify upon
transfer or exchange in the space provided on the Rights Certificate that
such holder is not a Person described in such legend.
ARTICLE - THE RIGHTS AGENT
GENERAL
Meridian hereby appoints the Rights Agent to act as agent for Meridian and
the holders of the Rights in accordance with the terms of this Agreement,
and the Rights Agent hereby accepts such appointment. Meridian may from
time to time appoint such co-Rights Agents ("Co-Rights Agents") as it may
deem necessary or desirable. In the event Meridian appoints one or more Co-
Rights Agents, the respective duties of the Rights Agent and Co-Rights
Agents shall be as Meridian may determine, subject to the consent (which
shall not be unreasonably withheld) of the Rights Agent. Meridian also
agrees to indemnify the Rights
<PAGE>
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Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or wilful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with this Agreement, including the costs and expenses of
defending against any claim of liability, which right to indemnification
will survive the termination of this Agreement.
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken or omitted by it in connection with this
Agreement in reliance upon any certificate for Common Shares, Rights
Certificate, certificate for other securities of Meridian or other document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
MERGER, AMALGAMATION OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
Any corporation into which the Rights Agent may be merged or amalgamated or
with which it may be consolidated, or any corporation resulting from any
merger, amalgamation, statutory arrangement or consolidation to which the
Rights Agent is a party, or any corporation succeeding to the shareholder
or stockholder services business of the Rights Agent, will be the successor
to the Rights Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a
successor Rights Agent under Section 4.4. In case at the time such
successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights have not been countersigned, any
successor Rights Agent may countersign such Rights Certificates in the name
of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates will have the full
force provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent is changed and at such
time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, all of which Meridian and the holders
of certificates for Common
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Shares and Rights Certificates, by their acceptance
thereof, shall be bound:
the Rights Agent may consult with legal counsel (who may be legal counsel
for Meridian) and the opinion of such counsel will be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion;
whenever in the performance of its duties under this Agreement, the Rights
Agent deems it necessary or desirable that any fact or matter be proved or
established by Meridian prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be
specifically prescribed in this Agreement) may be deemed to be conclusively
proved and established by a certificate signed by a Person believed by the
Rights Agent to be the Chairman of the Board, President, any Vice
President, Treasurer, Secretary, or any Assistant Secretary of Meridian and
delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the terms of this Agreement in reliance upon such
certificate;
the Rights Agent will be liable for its own negligence, bad faith or wilful
misconduct;
the Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for Common Shares or the Rights Certificates (except its
countersignature thereof) or be required to verify the same, but all such
statements and recitals are and will be deemed to have been made by
Meridian only;
the Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery of this Agreement
(except the due authorization, execution and delivery of this Agreement by
the Rights Agent) or in respect of the validity or execution of any
certificate for a Common Share or Rights Certificate (except
countersignature of the Rights Certificate); nor will it be responsible for
any breach by Meridian of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible for any
change in the exerciseability of the Rights (including the Rights becoming
void pursuant to Subsection 3.1(b)) or any adjustment required under
Section 2.3 or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 2.3 describing any such
adjustment); nor will it by any act under this Agreement be deemed to make
any representation or warranty as to the authorization of any Common Shares
to be issued pursuant to this Agreement or any Rights or as to whether any
Common Shares will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and non-assessable;
Meridian agrees that it will perform, execute, acknowledge and deliver or
cause to be
<PAGE>
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performed, executed, acknowledged and delivered all such further and other
acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of this
Agreement;
the Rights Agent is hereby authorized and directed to accept instructions
in writing with respect to the performance of its duties under this
Agreement from the Chairman of the Board, President, any Vice President,
Treasurer, Secretary or any Assistant Secretary of Meridian, and to apply
to such individuals for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered by it
in good faith in accordance with instructions of any such individual;
the Rights Agent and any affiliate, shareholder or stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in Common
Shares, Rights or other securities of Meridian or become pecuniarily
interested in any transaction in which Meridian may be interested, or
contract with or lend money to Meridian or otherwise act as fully and
freely as though it were not the Rights Agent under this Agreement. Nothing
in this Agreement shall preclude the Rights Agent or its affiliates from
acting in any other capacity for Meridian or for any other legal entity;
and
the Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to Meridian resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
CHANGE OF RIGHTS AGENT
The Rights Agent may resign and be discharged from its duties under this
Agreement upon 60 days' notice (or such lesser notice as is acceptable to
Meridian) in writing mailed to Meridian and to each transfer agent of Common
Shares by registered or certified mail. Meridian may remove the Rights Agent
upon 60 days' notice in writing, mailed to the Rights Agent and to each transfer
agent of the Common Shares by registered or certified mail. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, Meridian
will appoint a successor to the Rights Agent. If Meridian fails to make such
appointment by the date on which the 60-day notice period expires for the
resignation of the Rights Agent or within a period of 60 days after such removal
or after it has been notified in writing of such incapacity by the incapacitated
Rights Agent, then by prior written notice to Meridian the resigning Rights
Agent or the holder of any Rights (which holder shall, with such notice, submit
such holder's Rights Certificate, if any, for inspection by Meridian), may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by Meridian or by such a
court, shall be a corporation incorporated under the laws of Canada or a
province thereof authorized to carry on the business of a trust company
<PAGE>
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in the Province of Ontario. After appointment, the successor Rights Agent will
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, Meridian will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares, and mail a notice thereof in writing to the holders of the
Rights in accordance with Section 5.9. Failure to give any notice provided for
in this Section 4.4, however, or any defect in such notice, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of any successor Rights Agent, as the case may be.
ARTICLE - MISCELLANEOUS
REDEMPTION, WAIVER AND EXTENSION
The Board acting in good faith may waive the application of Section 3.1 in
respect of the occurrence of any Flip-in Event if the Board has determined
within eight Trading Days following a Stock Acquisition Date that a Person
became an Acquiring Person by inadvertence and without any intention to
become, or knowledge that it would become, an Acquiring Person under this
Agreement and, in the event that such a waiver is granted by the Board,
such Stock Acquisition Date shall be deemed not to have occurred. Any such
waiver pursuant to this Subsection 5.1 (a) must be on the condition that
such Person, within 14 days after the foregoing determination by the Board
or such earlier or later date as the Board may determine (the "Disposition
Date"), has reduced its Beneficial ownership of Voting Shares such that the
Person is no longer an Acquiring Person. If the Person remains an Acquiring
Person at the close of business on the Disposition Date, the Disposition
Date shall be deemed to be the date of occurrence of a further Stock
Acquisition Date and Section 3.1 shall apply.
The Board acting in good faith may, prior to a Flip-in Event having
occurred, upon prior written notice delivered to the Rights Agent,
determine to waive the application of Section 3.1 to such particular Flip-
in Event (which for greater certainty shall not include the circumstances
described in Subsection 5.1 (a)), provided that if the Board waives the
application of Section 3.1 to a particular Flip-in Event, the Board shall
be deemed to have waived the application of Section 3.1 to any other Flip-
in Event occurring by reason of any Take-Over Bid which is made by means of
a Take-Over Bid circular to all holders of Voting Shares prior to the
expiry of any Take-Over Bid (as the same may be extended from time to time)
in respect of which a waiver is, or is deemed to have been granted under
this Subsection 5.1(b).
In the event that prior to the occurrence of a Flip-in Event a person
acquires, pursuant to a Permitted Bid or a Competing Permitted Bid,
outstanding Voting Shares, then the Board
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shall, immediately upon the consummation of and acquisition without further
formality be deemed to have elected to redeem the Rights at a redemption
price of $0.001 per Right appropriately adjusted in a manner analogous to
the applicable adjustment provided for in Section 2.3 if an event of the
type analogous to any of the events described in Section 2.3 shall have
occurred (the "Redemption Price").
The Board of Meridian acting in good faith may, at its option, at any time
prior to the occurrence of a Flip-in Event elect to redeem all but not less
than all of the then outstanding Rights at the Redemption Price
appropriately adjusted in a manner analogous to the applicable adjustments
provided for in Section 2.3, which adjustments shall only be made in the
event that an event of the type analogous to any of the events described in
Section 2.3 shall have occurred.
Where a Take-over Bid that is not a Permitted Bid Acquisition is withdrawn
or otherwise terminated after the Separation Time has occurred and prior to
the occurrence of a Flip-in Event, the Board may elect to redeem all the
outstanding Rights at the Redemption Price.
If the Board is deemed under Subsection 5.1(c) to have elected or elects
under Subsections 5.1(d) or (e) to redeem the Rights, the right to exercise
the Rights will, without further action and without notice, terminate and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price.
Within ten days after the Board is deemed under Subsection 5.1(c) to have
elected or elects under Subsection 5.1(d) or (e) to redeem the Rights,
Meridian shall give notice of redemption to the holders of the then
outstanding Rights by mailing such notice to each such holder at his last
address as it appears upon the registry books of the Rights Agent or, prior
to the Separation Time, on the registry books of the transfer agent for the
Voting Shares. Any notice which is mailed shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.
Upon the Rights being redeemed pursuant to Subsection 5.1(e), all the terms
of this Agreement shall continue to apply as if the Separation Time had not
occurred and Rights Certificates representing the number of Rights held by
each holder of record of Common Shares as of the Separation Time had not
been mailed to each such holder and for all purposes of this Agreement the
Separation Time shall be deemed not to have occurred.
EXPIRATION
No Person shall have any rights under this Agreement or in respect of any Right
after the Expiration Time, except the Rights Agent as specified in Subsection
4.1(a).
<PAGE>
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ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any term of this Agreement or of the Rights, Meridian may, at
its option, issue new Rights Certificates evidencing Rights in such form as may
be approved by the Board to reflect any adjustment or change in the number or
kind or class of securities issuable upon exercise of the Rights.
SUPPLEMENTS AND AMENDMENTS
Meridian may make any amendments to this Agreement to correct any clerical
or typographical error or which are required to maintain the validity of
the Agreement as a result of any change in any applicable legislation or
regulations thereunder. Meridian may, prior to the date of the
shareholders' meeting referred to below, supplement or amend this Agreement
without the approval of the Rights Agent or any holders of Rights or Voting
Shares in order to make any changes which the Board acting in good faith
may deem necessary or desirable. Notwithstanding anything in this Section
5.4, no amendment shall be made to Article 4 except with the written
concurrence of the Rights Agent to such supplement or amendment.
Subject to Subsection 5.4(a), Meridian may, with the prior consent of the
holders of Voting Shares obtained as set forth below, at any time before
the Separation Time, amend, vary or rescind any of the terms of this
Agreement and the Rights (whether or not such action would materially
adversely affect the interests of the holders of Rights generally). Such
consent shall be deemed to have been given if provided by the holders of
Voting Shares at a Special Meeting, which Special Meeting shall be called
and held in compliance with applicable laws and regulatory requirements and
the requirements in the articles and by-laws of Meridian. Subject to
compliance with any requirements imposed by the foregoing, consent shall be
given if the proposed amendment, variation or rescission is approved by the
affirmative vote of a majority of the votes cast by all holders of Voting
Shares (other than any holder of Voting Shares who is an offeror pursuant
to a Take-over Bid that is not a Permitted Bid or a Competing Permitted
Bid, with respect to all Voting Shares Beneficially owned by such Person),
represented in person or by proxy at the Special Meeting.
Meridian may, with the prior consent of the holders of Rights obtained as
set forth below, at any time after the Separation Time and before the
Expiration Time, amend, vary or rescind any of the terms of this Agreement
and the Rights (whether or not such action would materially adversely
affect the interests of the holders of Rights generally). Such consent
shall be deemed to have been given if provided by the holders of Rights at
a Rights Holders' Special Meeting, which Rights Holders' Special Meeting
shall be called and held in compliance with applicable laws and regulatory
requirements and, to the extent possible, with the requirements in the
articles and by-laws of Meridian applicable to meetings of holders of
Voting Shares, applied mutatis mutandis. Subject to compliance with any
<PAGE>
-37-
requirements imposed by the foregoing, consent shall be given if the
proposed amendment, variation or rescission is approved by the affirmative
vote of a majority of the votes cast by holders of Rights (other than
holders of Rights whose Rights have become null and void pursuant to
Subsection 3.1(b)), represented in person or by proxy at the Rights
Holders' Special Meeting.
Any approval of the holders of Rights shall be deemed to have been given
if the action requiring such approval is authorized by the affirmative
votes of the holders of Rights present or represented at and entitled to be
voted at a meeting of the holders of Rights and representing a majority of
the votes cast in respect thereof. For the purposes of this Agreement, each
outstanding Right (other than Rights which are void pursuant to the terms
of this Agreement) shall be entitled to one vote, and the procedures for
the calling, holding and conduct of the meeting shall be those, as nearly
as may be, which are provided in Meridian's by-laws and the CBCA with
respect to the meetings of shareholders of Meridian.
(e) Any amendments made by Meridian to this Agreement pursuant to Subsection
5.4(a) which are required to maintain the validity of this Agreement as a
result of any change in any applicable legislation or regulation thereunder
shall:
(i) if made before the Separation Time, be submitted to the shareholders
of Meridian at the next meeting of shareholders and the shareholders
may, by the majority referred to in Subsection 5.4(b) confirm or
reject such amendment;
(ii) if made after the Separation Time, be submitted to the holders of
Rights at a meeting to be called for on a date not later than
immediately following the next meeting of shareholders of Meridian
and the holders of Rights may, by resolution passed by the majority
referred to in Subsection 5.4(d) confirm or reject such amendment.
Any such amendment shall be effective from the date of the resolution of
the Board adopting it, until it is confirmed or rejected or until it ceases
to be effective (as described below) and, where such amendment is
confirmed, it continues in effect in the form so confirmed. If such
amendment is rejected by the shareholders or the holders of Rights or is
not submitted to the shareholders or holders of Rights as required, then
such amendment shall cease to be effective from and after the termination
of the meeting at which it was rejected or to which it should have been but
was not submitted or from and after the date of the meeting of holders of
Rights that should have been but was not held, and no subsequent resolution
of the Board to amend this Agreement to substantially the same effect shall
be effective until confirmed by the shareholders or holders of Rights as
the case may be.
FRACTIONAL RIGHTS AND FRACTIONAL SHARES
Meridian shall not be required to issue fractions of Rights or to
distribute Rights Certificates
<PAGE>
-38-
which evidence fractional Rights and Meridian shall not be required to pay
any amount to a holder of record of Rights Certificates in lieu of such
fractional Rights.
Meridian shall not be required to issue fractions of Common Shares upon
exercise of Rights or to distribute certificates which evidence fractional
Common Shares. In lieu of issuing fractional Common Shares, Meridian shall
pay to the registered holders of Rights Certificates, at the time such
Rights are exercised, an amount in cash equal to the fraction of the Market
Price of one Common Share that the fraction of a Common Share that would
otherwise be issuable upon the exercise of such Right is of one whole
Common Share at the date of such exercise.
RIGHTS OF ACTION
Subject to the terms of this Agreement, all rights of action in respect of this
Agreement, other than rights of action vested solely in the Rights Agent, are
vested in the respective holders of the Rights. Any holder of Rights, without
the consent of the Rights Agent or of the holder of any other Rights, may, on
such holder's own behalf and for such holder's own benefit and the benefit of
other holders of Rights, enforce, and may institute and maintain any suit,
action or proceeding against Meridian to enforce such holder's right to exercise
such holder's Rights in the manner provided in such holder's Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holder of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
REGULATORY APPROVALS
Any obligation of Meridian or action or event contemplated by this Agreement, as
well as any amendment to this Agreement, shall be subject to the receipt of any
requisite approval or consent from any governmental or regulatory authority
(including The Toronto Stock Exchange).
DECLARATION AS TO NON-CANADIAN HOLDERS
If in the opinion of the Board (who may rely upon the advice of counsel) any
action or event contemplated by this Agreement would require compliance by
Meridian with the securities laws or comparable legislation of a jurisdiction
outside Canada, the Board acting in good faith shall take such actions as it may
deem appropriate to ensure such compliance. In no event shall Meridian or the
Rights Agent be required to issue or deliver Rights or securities issuable on
exercise of Rights to persons who are citizens, residents or nationals of any
jurisdiction other than Canada or the United States, in which such issue or
delivery would be unlawful without registration of the relevant Persons or
securities for such purposes.
<PAGE>
-39-
NOTICES
Notices or demands authorized or required by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights to or on Meridian
shall be sufficiently given or made if delivered, sent by registered or
certified mail, postage prepaid (until another address is filed in writing
with the Rights Agent), or sent by fax or other form of recorded electronic
communication, charges prepaid, and confirmed in writing, as follows:
Meridian Gold Inc.
5011 Meadowood Way
Reno, NV 89502
Attention: Chief Financial Officer
Fax No.: 702-827-7133
Notices or demands authorized or required by this Agreement to be given or
made by Meridian or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered, sent by registered or
certified mail, postage prepaid (until another address is filed in writing
with Meridian), or sent by fax or other form of recorded electronic
communication, charges prepaid, and confirmed in writing, as follows:
The Trust Company of Bank of Montreal
105 St. Jacques Street West, 3rd Floor
Montreal, Quebec H2Y 1L6
Attention: Account Manager and Supervisor, Shareholder Services
Fax No.: 514-877-9676
Notices or demands authorized or required by this Agreement to be given or
made by Meridian or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by registered or
certified mail, postage prepaid, addressed to such holder at the address of
such holder as it appears upon the register of the Rights Agent or, prior
to the Separation Time, on the register of Meridian for its Common Shares.
Any notice which is mailed or sent in the manner provided above shall be
deemed given, whether or not the holder receives the notice.
Any notice given or made in accordance with Section 5.9 shall be deemed to
have been given and to have been received on the day of delivery, if so
delivered on a Business Day (otherwise on the first Business Day
thereafter), on the third Business Day (excluding each day during which
there exists any general interruption of postal service due to strike,
lockout or other cause) following mailing, if so mailed, and on the day of
faxing or sending by other means of recorded electronic communication
(provided such sending is during the normal
<PAGE>
-40-
business hours of the addressee on a Business Day and if not, on the first
Business Day thereafter). Each of Meridian and the Rights Agent may from
time to time change its address for notice by notice to the other given in
the manner provided above.
COSTS OF ENFORCEMENT
Meridian agrees that if Meridian fails to fulfil any of its obligations pursuant
to this Agreement, then Meridian will reimburse the holder of any Rights for the
costs and expenses (including legal fees) incurred by such holder to enforce his
rights pursuant to any Rights or this Agreement.
SUCCESSORS
All the covenants and terms of this Agreement by or for the benefit of Meridian
or the Rights Agent shall bind and enure to the benefit of their respective
successors and assigns.
BENEFITS OF THIS AGREEMENT
Nothing in this Agreement shall be construed to give to any Person (other than
Meridian, the Rights Agent and the holders of the Rights) any legal or equitable
right, remedy or claim under this Agreement. This Agreement shall be for the
sole and exclusive benefit of Meridian, the Rights Agent and the holders of the
Rights.
GOVERNING LAW
This Agreement and each Right issued shall be deemed to be a contract made under
the laws of Ontario and for all purposes shall be governed by and construed in
accordance with the laws of Ontario applicable to contracts to be made and
performed entirely within Ontario.
SEVERABILITY
If any term of this Agreement or the application thereof to any circumstance
shall, in any jurisdiction and to any extent, be invalid or unenforceable, such
term shall be ineffective only as to such jurisdiction and to the extent of such
invalidity or unenforceability in such jurisdiction without invalidating or
rendering ineffective or unenforceable the remaining terms of this Agreement in
such jurisdiction or the application of such term in any other jurisdiction or
to circumstances other than those as to which it is specifically held invalid or
unenforceable.
EFFECTIVE DATE
This Agreement is effective and in full force and effect in accordance with its
terms from and after the Effective Date.
<PAGE>
-41-
DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS
Upon the advice of outside legal counsel, the Board shall have the exclusive
power and authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Board as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to, make all determinations deemed necessary or advisable for the
administration of this Agreement. All such actions, calculations and
determinations (including all omissions with respect to the foregoing) which are
done or made by the Board, in good faith, shall not subject the Board or any
director of Meridian to any liability to the holders of the Rights.
TIME OF THE ESSENCE
Time shall be of the essence in this Agreement.
EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
MERIDIAN GOLD INC.
By:
THE TRUST COMPANY OF
BANK OF MONTREAL
By:
c/s
By:
<PAGE>
ATTACHMENT 1
FORM OF RIGHTS CERTIFICATE
Certificate No. . . Rights
THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER
RIGHTS PLAN AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION
3.1(B) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, OR TRANSFEREES OF AN ACQUIRING
PERSON OR CERTAIN RELATED PARTIES, MAY BECOME VOID.
RIGHTS CERTIFICATE
This certifies that ., or registered assigns, is the registered holder of the
number of Rights set forth above, each of which entitles the registered holder
thereof, subject to the terms, provisions and conditions of the Shareholder
Rights Plan Agreement, dated as of July 31, 1996 (the "Shareholder Rights Plan
Agreement"), between Meridian Gold Inc., a corporation incorporated under the
laws of Canada and The Trust Company of Bank of Montreal, a trust company
incorporated under the laws of Canada (the "Rights Agent") (which term shall
include any successor Rights Agent under the Shareholder Rights Plan Agreement),
to purchase from Meridian Gold Inc. at any time after the Separation Time (as
defined in the Shareholder Rights Plan Agreement) and prior to the Expiration
Time (as defined in the Shareholder Rights Plan Agreement), one fully paid
common share of Meridian Gold Inc. (a "Common Share") at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise (in the form provided hereinafter) duly
executed and submitted to the Rights Agent at its principal office in the city
of Toronto. The Exercise Price shall initially be $25.00 (Cdn.) per Right and
shall be subject to adjustment in certain events as provided in the Shareholder
Rights Plan Agreement.
This Rights Certificate is subject to all of the terms of the Shareholder Rights
Plan Agreement, which terms are incorporated herein by reference and made a part
hereof and to which Shareholder Rights Plan Agreement reference is hereby made
for a full description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Rights Agent, Meridian Gold Inc. and the
holders of the Rights Certificates. Copies of the Shareholder Rights Plan
Agreement are on file at the registered office of Meridian Gold Inc.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at any of the offices of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be
<PAGE>
deemed for any purpose the holder of Common Shares or of any other securities
which may at any time be issuable upon the exercise hereof, nor shall anything
contained in the Shareholder Rights Plan Agreement or herein be construed to
confer upon the holder hereof, as such, any of the Rights of a shareholder of
Meridian Gold Inc. or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Shareholder
Rights Plan Agreement), or to receive dividends or subscription rights, or
otherwise, until the Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Shareholder Rights Plan Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of Meridian Gold Inc. and
its corporate seal.
Date: .
MERIDIAN GOLD INC.
By: By: ....
President Secretary
Countersigned:
THE TRUST COMPANY OF BANK OF MONTREAL
By:
Authorized Signature
<PAGE>
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED . hereby sells, assigns and transfers unto . (Please print
name and address of transferee) the Rights represented by this Rights
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ., as attorney, to transfer the within
Rights on the books of Meridian Gold Inc., with full power of substitution.
Dated:
Signature
Signature Guaranteed: (Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock exchange in
Canada, or a commercial bank or trust company having an office or correspondent
in Canada.
CERTIFICATE
The undersigned party transferring Rights hereunder, hereby represents, for the
benefit of all holders of Rights and Common Shares, that the Rights evidenced by
this Rights Certificate are not, and, to the knowledge of the undersigned, have
never been, Beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof or a Person acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate thereof. Capitalized terms shall have the
meaning ascribed thereto in the Shareholder Rights Plan Agreement.
....
Signature
FORM OF ELECTION TO EXERCISE
(To be exercised by the registered holder if such holder desires to exercise the
Rights Certificate.)
TO: Meridian Gold Inc. and The Trust Company of Bank of Montreal
The undersigned hereby irrevocably elects to exercise . whole Rights represented
by the attached Rights Certificate to purchase the Common Shares or other
securities, if applicable, issuable upon the exercise of such Rights and
requests that certificates for such securities be issued in the name of: .
(Name) . (Address) . (Social Insurance Number or other taxpayer identification
number)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to: . (Name) . (Address) . (Social
Insurance Number or other taxpayer identification number)
<PAGE>
Dated:
Signature
Signature Guaranteed: (Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.)
Signature must be guaranteed by a member firm of a recognized stock exchange in
Canada, or a commercial bank or trust company having an office or correspondent
in Canada.
CERTIFICATE
The undersigned party transferring Rights hereunder, hereby represents, for the
benefit of all holders of Rights and Common Shares, that the Rights evidenced by
this Rights Certificate are not, and, to the knowledge of the undersigned, have
never been, Beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof or a Person acting jointly or in concert with an Acquiring
Person or an Affiliate or Associate thereof. Capitalized terms shall have the
meaning ascribed thereto in the Shareholder Rights Plan Agreement.
Signature ....
NOTICE
In the event the certification set forth above in the Forms of Assignment and
Election is not completed, Meridian Gold Inc. will deem the Beneficial owner of
the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof. No Rights Certificates shall be issued in
exchange for a Rights Certificate owned or deemed to have been owned by an
Acquiring Person or an Affiliate or Associate thereof, or by a Person acting
jointly or in concert with an Acquiring Person or an Affiliate or Associate
thereof.
<PAGE>
EHXIBIT 3.10 (ii)
TAX SHARING AND SEPARATION AGREEMENT
------------------------------------
This TAX SHARING AND SEPARATION AGREEMENT (the "Agreement"), dated as of
August 1, 1996, by and among FMC Corporation,, a Delaware corporation ("FMC"),
Meridian Gold Inc., a Canadian corporation ("MGI"), Meridian Gold Canada Inc., a
Canadian corporation and a subsidiary of Meridian Gold Inc. ("MGCI"), and
Meridian Gold Company (the "Company"), a Delaware corporation.
WITNESSETH:
WHEREAS, Company has been a member of an affiliated group of corporations
filing consolidated federal income tax returns of which FMC is the common parent
(the "FMC Group") and filing certain state and local income tax returns on a
consolidated or combined basis;
WHEREAS, MGCI is acquiring all of the outstanding stock of Company pursuant
to an Agreement and Plan of Merger dated the date hereof (the "Merger");
WHEREAS, upon consummation of the Closing as defined in the Merger, the
Company will become a direct subsidiary of MGCI and will cease to be a member of
the FMC Group; and
WHEREAS, FMC and the Company have entered into certain tax sharing
agreements--the latest is effective for April 1, 1994 and covers that time that
the Company remains as a member of the FMC Group (the "1994 Agreement");
WHEREAS, the parties wish to amend certain aspects of the 1994 Agreement
to amplify upon and/or expand on the responsibilities of the parties after the
Merger; and to provide for certain tax elections;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereby agree as follows:
1. TAX RETURNS. FMC agrees to prepare and file or cause to be
prepared and filed timely all appropriate federal and state income
returns (hereinafter "Returns") in respect to the Company that (I) are
required to be filed on or before Closing; or (II) are required to be
filed after Closing that (a) are required to include, on a
consolidated or combined basis, the
1
<PAGE>
operations of Company for any tax period ending on or before Closing;
or (b) are required to be filed by Company on a separate return basis
for any period ending on or before Closing. To the extent requested by
FMC, Company shall participate in the filing of and shall file any
required Returns with respect to any period that ends on or before
Closing. MGCI shall prepare or cause to be prepared the schedules in
respect of the Company containing the information necessary for FMC to
prepare the Returns. MGCI shall also prepare or cause to be prepared
and shall file or cause to be filed all other returns required of the
Company, or in respect of its activities, for any taxable period
ending after closing that includes the operations of the Company prior
to Closing.
2. OBLIGATION FOR PAYMENT OF TAXES. FMC agrees to pay timely all
income taxes in respect of Company that are due with respect to
Returns that FMC is required to prepare and timely file pursuant to
Section 1 hereof. With respect to such Returns, MGCI shall pay or
cause to have paid to FMC that amount of tax as if the Company had
filed a separate return which includes the Closing date, as computed
in the manner provided under the 1994 Agreement. All other taxes
imposed on the Company shall be paid by the Company except as provided
in Section 3 hereof.
3. ELECTION UNDER SECTION 338(H)(10). MGCI and FMC shall timely
make or cause to be made a valid joint election under Section
338(h)(10) of the Code with respect to the Company (including such
elections with respect to subsidiaries of the Company for which FMC,
in its sole discretion, requests such section 338(h)(10) elections to
be made) and under any comparable provisions of state law in respect
of the Merger so as to have the deemed asset sale gain recognized in
FMC's consolidated federal income tax return and any relevant state
income or franchise tax returns that include the Company's short
taxable year immediately prior to the Closing date (collectively, the
"Election"). FMC will pay and be responsible for any taxes
attributable to the making of the Election and the Company will not
share in any such tax.
4. MINIMUM TAX CREDITS. By operation of law on the making of a
section 338(h)(10) election, the minimum tax credits allocable to the
Company as a member of the FMC Group
2
<PAGE>
are not available to the Company once it leaves the FMC Group.
Accordingly, Paragraph 1(c)(v) of the 1994 Agreement is rendered
inoperative and without effect.
5. VALUATION AND ALLOCATION OF CONSIDERATION. The parties agree
that the "aggregate deemed sale price" and "adjusted grossed-up basis"
(as such terms are defined in the regulations under section 338 of the
Code) with respect to the Merger and Election shall be determined
jointly by FMC and the Company, such determination to be made, in
part, based on the sales price per share of the common stock of MGI in
the initial public offering of such stock. The value of the
consideration shall be allocated among the assets of Company pursuant
to an appraisal to be ordered immediately after Closing. The appraiser
shall be selected jointly by FMC and the Company. The parties (i)
shall be bound by such allocation for purposes of determining any
Taxes and (ii) shall prepare and file all returns in a manner
consistent with such allocation. In the event that such allocation is
disputed by any Tax Authority, the party receiving notice of such
dispute shall promptly notify and consult with the other party hereto
concerning resolution of such dispute.
6. TAX REPORTING. MGCI shall file or cause to be filed the
Company's federal income tax returns treating the Merger as a purchase
of the assets of Company pursuant to Sections 338(a) and 338(h)(10) of
the Code. MGCI shall file or cause to be filed on a similar basis all
state and local tax returns to the extent that such treatment is
consistent with such state and local tax law.
7. REDETERMINATION OF TAX LIABILITY. If any recomputation under any
paragraph of this Agreement or the 1994 Agreement is made, any
additional sums payable as between the parties shall be made in
accordance with Paragraph 4 of the 1994 Agreement with respect to the
portion of such period up to and including the Closing date. After
consultation with the Company, FMC shall have sole and exclusive
discretion to contest or not to contest, negotiate and settle proposed
adjustments relating to the inclusion in any Return of the income,
deductions, credits, allowances or other tax items of Company for any
period ending prior to or including the Closing date.
8. TAX ISSUES ARISING AFTER THE CLOSING DATE.
3
<PAGE>
8.1 MUTUAL COOPERATION. The parties agree to consult in
good faith and to provide each other with such assistance as
reasonably may be requested in writing by any of them in
connection with (I) the preparation and execution of any Return,
(ii) the negotiation and settlement of any audit or other
examination of any Return by any Tax Authority, or (iii) the
handling of any judicial or administrative proceeding relating to
any tax liability or taxable periods of Company prior to the
Closing date. The parties' general obligation to cooperate shall
require, but not be limited to requiring, each party (i) to
notify the other of any Tax Authority's initiating an audit,
requesting information or proposing adjustment, or any extension
of statutes of limitation and of final determinations of
adjustment, (ii) to preserve records, documents and other
information relevant to liabilities for Taxes until the
expiration of the applicable statute of limitations or extensions
thereof and to provide, upon written request, copies of such
records and/or reasonable access thereto, (iii) to make available
without charge at a location determined by MGCI or Company during
normal working hours, upon written request, personnel responsible
for preparing, maintaining, or explaining information, records
and documents in connection with matters relating to Taxes, and
(iv) to execute and deliver such powers of attorney, consents,
and other documents as are necessary to carry out the intent of
this Agreement.
8.2 MGCI AND COMPANY'S DISCRETION TO CONTEST, NEGOTIATE AND
SETTLE. MGCI or Company shall have sole and exclusive discretion
to contest or not to contest, negotiate and settle proposed
adjustments relating to the inclusion in any Return of the
income, deductions, credits, allowances or other tax items of
Company for any period after the Closing date.
9. NOTICES. Any required under any provision of this Agreement shall
be made in the manner provided Paragraph in (6)(d) of the 1994
Agreement. Delivery of notice to the Company shall be deemed to be
delivery of notice to MGCI.
10. BINDING EFFECT; SUCCESSORS. This Agreement shall be binding upon
and inure to the benefit of any successor, by merger, acquisition of
assets or otherwise, to any of the parties hereto, to the same extent
as if such successor had been an original party to the Agreement.
4
<PAGE>
11. SEVERABILITY. In the event that any term or provision of this
Agreement shall for any reason be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not effect any other term or provision and
this Agreement shall be interpreted and construed as if such term or
provision, to the extent the same shall have been held to be invalid,
illegal or unenforceable, had never been contained herein.
12. INCORPORATION OF 1994 AGREEMENT. To the extent not amended nor
inconsistent with any of the above paragraphs, all other provisions of
the 1994 Agreement apply and are incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
FMC CORPORATION
By:
Title:
MERIDIAN GOLD COMPANY
By:
Title:
MERIDIAN GOLD, INC.
By:
Title:
MERIDIAN GOLD CANADA INC.
By:
Title:
5
<PAGE>
Exhibit 3.21
Subsidiaries List
Meridian Gold Inc., a Canadian corporation, has a 100% ownership
interest in Meridian Gold Canada Inc., a Canadian corporation. Meridian Gold
Canada Inc. has a 100% ownership interest in Meridian Gold Company, a Delaware
corporation ("MGC"). MGC has a 100% ownership interest in Meridian Gold
(Delaware) Inc., Meridian Jerritt Canyon Corp., a Delaware corporation, Meridian
Beartrack Co., a Montana corporation and Meridian Rossi Corp., a Delaware
corporation. MGC has a 90% ownership interest in and Meridian Rossi Corp. has a
10% ownership interest in Minera Meridian Ltda., a Chilean corporation.
