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Exhibit 2
MERGER AGREEMENT
THIS MERGER AGREEMENT dated as of May 7, 2001.
B E T W E E N:
XXXXXXXX RESOURCES INC., a corporation incorporated pursuant to
the provisions of the Canada Business Corporations Act
(hereinafter referred to as "Xxxxxxxx")
- and -
GEONOVA EXPLORATIONS INC., a corporation incorporated pursuant
to the provisions of the Canada Business Corporations Act
(hereinafter referred to as "GeoNova")
- and -
MSV RESOURCES INC., a corporation incorporated pursuant to the
provisions of the Companies Act (Quebec)
(hereinafter referred to as "MSV")
WITNESSES THAT:
WHEREAS each of Xxxxxxxx, GeoNova and MSV proposes to convene a
meeting of its shareholders to approve the Merger;
AND WHEREAS, upon the Merger becoming effective, the shares of
each of GeoNova and MSV will be exchanged for Xxxxxxxx Shares, Xxxxxxxx will
reserve a number of Xxxxxxxx Shares for issue to the holders of certain
contractual rights to acquire shares of MSV or GeoNova, Xxxxxxxx will issue
Xxxxxxxx Shares in exchange for the reduction of certain royalty commitments,
Xxxxxxxx will increase the number of Xxxxxxxx Shares reserved for issuance
pursuant to the Employee Incentive Plan and the Directors' Stock Option Plan and
the location of Campbell's registered office will be changed, all in accordance
with the provisions of this Agreement;
NOW THEREFORE, in consideration of the premises and the
respective covenants and agreements herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto, the parties hereto hereby covenant
and agree as follows:
DEFINITIONS AND INTERPRETATION
SECTION 1.01 DEFINITIONS
In this Agreement, unless there is something in the subject
matter or context inconsistent therewith, the following capitalized words and
terms shall have the following meanings:
(a) "Agreement" means this merger agreement including the exhibits
hereto as the same may be supplemented or amended from time to time;
(b) "Articles of Amendment" mean the articles of amendment to be
filed under the Companies Act to effect the Quebec Arrangement on the Effective
Date;
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(c) "Business Day" means a day which is not a Saturday, Sunday or
statutory holiday;
(d) "Xxxxxxxx" means Xxxxxxxx Resources Inc., a corporation
incorporated pursuant to the provisions of the CBCA;
(e) "Xxxxxxxx Shares" means the common shares which Xxxxxxxx is
authorized to issue, as the same are constituted on the date hereof;
(f) "CBCA Arrangement" means the plan of arrangement attached as
Exhibit I hereto, as amended from time to time;
(g) "CBCA" means the Canada Business Corporations Act, R.S.C.
1985, c. C-44, as amended;
(h) "Charter Documents" means articles and by-laws;
(i) "Court" means the Superior Court of Quebec, District of
Montreal;
(j) "Effective Date" means the concurrent date set forth in the
certificates of arrangement to be issued by the Director under the CBCA to each
of Xxxxxxxx and GeoNova giving effect to the CBCA Arrangement and on the
certificate of amendment to be issued by the Inspector General of Financial
Institutions under the Quebec Act giving effect to the Quebec Arrangement;
(k) "Final Order" means the final order of the Court approving the
Merger;
(l) "GeoNova" means GeoNova Explorations Inc., a corporation
incorporated under the provisions of the CBCA;
(m) "GeoNova Shares" means the common shares which GeoNova is
authorized to issue, as the same are constituted on the date hereof;
(n) "GeoNova Transaction Options" has the meaning given to that term
in the Proxy Circular;
(o) "Interim Order" means the interim order of the Court concerning
the Merger;
(p) "Meetings" means the special meeting or annual and special
meeting, of the shareholders of the Participating Corporations to be held, among
other things, to consider and, if deemed advisable, to approve the Merger;
(q) "Merger" means the transactions contemplated herein to effect
the merger of the Participating Corporations by means of the CBCA Arrangement
and the Quebec Arrangement, collectively;
(r) "MSV" means MSV Resources Inc., a corporation incorporated
pursuant to the provisions of the Quebec Act;
(s) "MSV Shares" means the common shares which MSV is authorized to
issue, as the same are constituted on the date hereof;
(t) "MSV Transaction Options" has the meaning given to that term in
the Proxy Circular;
(u) "Participating Corporations" means Xxxxxxxx, GeoNova and MSV
collectively;
(v) "Person" means and includes an individual, sole proprietorship,
partnership, unincorporated association, unincorporated syndicate,
unincorporated organization, trust, body corporate, a trustee, executor,
administrator or other legal representative and the Crown or any agency or
instrumentality thereof;
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(w) "Proxy Circular" means the joint management proxy circular of
the Participating Corporations to be sent to the shareholders of each of the
Participating Corporations in connection with the Meetings;
(x) "Quebec Act" means the Companies Act (Quebec);
(y) "Quebec Arrangement" means the plan of arrangement attached to
this Agreement as exhibit II, as amended from time to time;
(z) "Repadre" means Repadre Capital Corporation; and
(aa) "Subsidiary" means, with respect to a specified body corporate,
a body corporate of which more than 50% of the outstanding shares ordinarily
entitled to elect a majority of the directors thereof, whether or not shares of
any other class or classes shall or might be entitled to vote upon the happening
of any event or contingency, are at the time owned, directly or indirectly, by
such specified body corporate, and includes a body corporate in like relation to
a Subsidiary.
SECTION 1.02 INTERPRETATION NOT AFFECTED HEADING
The division of this Agreement into articles, sections,
subsections, paragraphs and subparagraphs and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of the provisions of this Agreement. The terms "this Agreement",
"hereof', "herein", "hereunder" and similar expressions refer to this Agreement
and the exhibit hereto as a whole and not to any particular article, section,
subsection, paragraph or subparagraph hereof and include any agreement or
instrument supplementary or ancillary hereto.
SECTION 1.03 NUMBER AND GENDER
Unless the context otherwise requires, words importing the
singular number only shall include the plural and vice versa and words importing
the use of either gender shall include both genders and neuter.
SECTION 1.04 DATE FOR ANY ACTION
In the event that any date on which any action is required to be
taken hereunder is not a Business Day in the place where the action is required
to be taken, such action shall be required to be taken on the next succeeding
day which is a Business Day in such place.
SECTION 1.05 MATERIAL AND MATERIAL ADVERSE EFFECT
In this Agreement, any reference to any event, change or effect
being "material" with respect to any entity or group of entities means any
material event, change or effect related to the condition (financial or
otherwise), properties, assets, liabilities, business, operations, or results of
operations of such entity or group of entities, taken as a whole. In this
Agreement, the term "Material Adverse Effect" used with respect to any party
means any event, change or effect that is, or is reasonably likely to be,
adverse, in a material way, to the condition (financial or otherwise),
properties, assets, liabilities, businesses, operations or results of operations
or prospects of such party and its Subsidiaries, taken as a whole, but shall not
include or be deemed to result from any change in the market value of Xxxxxxxx
Shares, GeoNova Shares or MSV Shares or any adverse effect resulting from
changes in general economic conditions or conditions generally affecting gold
prices.
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MERGER
SECTION 2.01 MERGER
The Participating Corporations agree to carry out the Merger
pursuant to the terms and subject to the conditions contained in this Agreement.
SECTION 2.02 EFFECTIVE TIME OF MERGER
The Merger shall become effective at 12:01 a.m. on the Effective
Date.
SECTION 2.03 FILING OF ARTICLES OF ARRANGEMENT AND ARTICLES OF AMENDMENT
Subject to the rights of termination contained in Article Six
hereof, the shareholders of each of the Participating Corporations approving the
Merger by special resolution and the Participating Corporations obtaining the
Final Order, Xxxxxxxx and GeoNova shall jointly file with the Director under the
CBCA articles of arrangement, in duplicate, together with such other documents
as may be required in order to effect the CBCA Arrangement and MSV shall file
the articles of amendment under the Quebec Act, together with such other
documents as may be required in order to effect the Quebec Arrangement.
SECTION 2.04 QUEBEC ARRANGEMENT
Upon the Effective Date, pursuant to the Quebec Arrangement,
each of the following shall occur:
(a) the Articles of Incorporation of MSV will be amended to permit
the exchange of MSV Shares for Xxxxxxxx Share on the basis of one Xxxxxxxx share
for every 4.1 MSV Shares;
(b) all MSV Shareholders will exchange their MSV Shares for Xxxxxxxx
Shares on the foregoing basis; and
(c) the holders of MSV Transaction Options will become entitled to
receive Xxxxxxxx Shares in lieu of MSV Shares on the foregoing basis.
SECTION 2.06 CBCA ARRANGEMENT
Upon the Effective Date, pursuant to the CBCA Arrangement, each
of the following shall occur:
(a) the shareholders of GeoNova will exchange their GeoNova Shares
for Xxxxxxxx Shares on the basis of one Xxxxxxxx Share for every 10 GeoNova
Shares;
(b) Xxxxxxxx will reserve up to a maximum of 1,466,667 Xxxxxxxx
Shares for issue to the holders of certain contractual rights to acquire GeoNova
Transaction Options who become entitled to receive Xxxxxxxx Shares in lieu of
GeoNova Shares on the basis of one Xxxxxxxx Share for every 10 GeoNova Shares;
(c) Xxxxxxxx will issue 800,000 Xxxxxxxx Shares to Repadre in
exchange for a reduction of the royalty owing to Repadre on the production from
the Xxx Xxxx Mine;
(d) the location of Campbell's registered office will be changed to
Montreal, Quebec.
(e) Xxxxxxxx will increase the maximum number of Xxxxxxxx Shares
reserved for issuance pursuant to the Employee Incentive Plan and the Directors'
Stock Option Plan by 1,024,000 and 500,000, respectively.
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REPRESENTATIONS AND WARRANTIES
SECTION 3.01 REPRESENTATIONS AND WARRANTIES OF XXXXXXXX
Xxxxxxxx hereby represents and warrants to and in favour of
GeoNova and MSV that:
(a) Xxxxxxxx has been duly incorporated and is a valid and
subsisting corporation under the provisions of the CBCA, has all requisite
corporate power and authority to carry on its business as now being carried on
by it and to own or lease and operate its properties and assets and is duly
licensed or otherwise qualified to carry on business in each jurisdiction in
which a material amount of its business is conducted or wherein the character of
the properties and assets now owned or leased by it or the nature of its
activities makes such qualification necessary, except where the failure to be so
qualified will not have a Material Adverse Effect on Xxxxxxxx;
(b) as of the date hereof the issued and outstanding share capital
of Xxxxxxxx consists of 15,788,628 Xxxxxxxx Shares, all of which are outstanding
as fully paid and non-assessable shares;
(c) the execution, delivery and performance of this Agreement and
the agreements, documents and transactions contemplated herein are within the
corporate power and authority of Xxxxxxxx and have been duly authorized by all
necessary corporate action and this Agreement constitutes a valid and binding
obligation of Xxxxxxxx, enforceable against Xxxxxxxx in accordance with its
terms;
(d) Xxxxxxxx is a reporting issuer not in default under the
Securities Act (Ontario) and the equivalent provisions of the securities acts of
the other provinces of Canada;
(e) the Xxxxxxxx Shares are listed and posted for trading on The
Toronto Stock Exchange and The New York Stock Exchange and Xxxxxxxx is not in
default of any requirements, rules or regulations of The Toronto Stock Exchange
or The New York Stock Exchange or Campbell's listing agreement with The Toronto
Stock Exchange;
(f) Xxxxxxxx does not have any outstanding agreements,
subscriptions, warrants, options or commitments, nor has it granted any rights
or privileges capable of becoming an agreement, subscription, warrant, option or
commitment, obligating Xxxxxxxx to issue any additional shares, or other
securities, except as disclosed in the Proxy Circular;
(g) the audited consolidated financial statements of Xxxxxxxx for
the financial year ended December 31, 2000 present fairly the consolidated
financial condition and results of operations of Xxxxxxxx as at such date and
for the financial year then ended and have been prepared in accordance with
Canadian generally accepted accounting principles applied on a consistent basis;
(h) since December 31, 2000, there has been no material adverse
change in the business, operations, properties, assets or condition, financial
or otherwise, of Xxxxxxxx on a consolidated basis from that shown in the audited
consolidated financial statements of Xxxxxxxx as at December 31, 2000, except as
disclosed in the Proxy Circular;
(i) each of Xxxxxxxx and its Subsidiaries is the beneficial owner of
the properties and assets described as being owned by it in the Proxy Circular
with good and marketable title thereto free and clear of material encumbrances,
except as disclosed in the Proxy Circular and, in particular, Xxxxxxxx is the
beneficial owner of the shares of its Subsidiaries as described in the Proxy
Circular with good and marketable title thereto free and clear of any material
covenant, condition or restriction on sale or other disposition, lien, charge,
security interest or encumbrance, except as disclosed in the Proxy Circular;
(j) none of Xxxxxxxx or any of its Subsidiaries has any liability or
obligation including, without limitation, tax liabilities, whether accrued,
absolute, contingent or otherwise, not reflected in its audited consolidated
financial statements for the financial year ended December 31, 2000, except
liabilities and obligations incurred in
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the ordinary course of its business since December 31, 2000, which liabilities
and obligations in the aggregate will not have a Material Adverse Effect on
Xxxxxxxx, and there are reasonable grounds for believing that (i) Xxxxxxxx is
able to pay its liabilities as they become due, (ii) after giving effect to the
reduction of its stated capital contemplated in the Proxy Circular, the
realizable value of Campbell's assets will not be less than the aggregate of its
liabilities and stated capital of all classes and (iii) no creditor will be
prejudiced by the Merger;
(k) each of the Subsidiaries of Xxxxxxxx is a validly incorporated
and subsisting corporation under the laws of its jurisdiction of incorporation
with full power and authority to carry on its business as now carried on by it
and to own or lease and to operate its properties and assets and is duly
licensed or otherwise qualified in each jurisdiction in which its business is
conducted or wherein the character of the properties and assets now owned by it
makes such qualification necessary, except where the failure to be so qualified
will not have a Material Adverse Effect on Xxxxxxxx;
(l) there are no actions, suits, proceedings, investigations or
outstanding claims or demands, whether or not purportedly on behalf of Xxxxxxxx,
or any of its Subsidiaries, instituted, pending or, to the knowledge of
Xxxxxxxx, or any of its Subsidiaries, threatened against or affecting Xxxxxxxx,
or any of its Subsidiaries, at law or in equity or before or by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or before any arbitrator, nor is there any judgement, order, decree or
award of any court or other governmental authority having jurisdiction,
obtained, pending or, to the knowledge of Xxxxxxxx or any of its Subsidiaries,
threatened, against Xxxxxxxx, or any of its Subsidiaries, which would prevent or
materially hinder the consummation of the Merger or the other transactions
contemplated by this Agreement or which would involve the reasonable possibility
of any judgement or liability, whether or not covered by insurance, or which in
the aggregate would have a Material Adverse Effect on Xxxxxxxx;
(m) Xxxxxxxx has not declared or paid any dividends or made any
distribution of its properties or assets to its shareholders and none of
Xxxxxxxx or any of its Subsidiaries has disposed of any of its properties or
assets or incurred any material indebtedness except for dividends paid in the
ordinary course of business as described in the Proxy Circular;
(n) since December 31, 2000, (i) the business of Xxxxxxxx and its
Subsidiaries has been conducted in the usual, ordinary and regular course and in
compliance with all applicable laws, regulations and ordinances of all
authorities having jurisdiction; (ii) no liability or obligation of any nature
(whether absolute, accrued, contingent or otherwise) which has had or is
reasonably likely to have a Material Adverse Effect on Xxxxxxxx, has been
received; and (iii) there has not been any event which has had or is reasonably
likely to have a Material Adverse Effect on Xxxxxxxx;
(o) each contract or agreement between Xxxxxxxx or any of its
Subsidiaries and any other Person which relates to the ownership, use or
operation of a material portion of the business, properties or assets of
Xxxxxxxx and its Subsidiaries on a consolidated basis, is in full force and
effect and, to the best of the knowledge and belief of Xxxxxxxx, is valid,
binding and enforceable against each of the other parties thereto in accordance
with its terms and no breach or default exists in respect thereof on the part of
any party thereto and no event has occurred which, with the giving of notice or
the lapse of time or both, would constitute such a breach or default, except for
breaches or defaults which could not reasonably be expected to have a Material
Adverse Effect on Xxxxxxxx;
(p) none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or the fulfilment of or
compliance with the terms and provisions hereof do or will, nor will they with
the giving of notice or the lapse of time or both
(i) violate any provision of any law or administrative
regulation or any judicial or administrative order, award,
judgement or decree applicable to Xxxxxxxx or any of its
Subsidiaries,
(ii) conflict with any of the terms, conditions or provisions
of the Charter Documents of Xxxxxxxx or any of its Subsidiaries,
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(iii) conflict with, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of the
performance required by, any material agreement, contract,
indenture, deed of trust, mortgage, bond, licence, permit,
covenant, undertaking, commitment, instrument, judgment, order,
decree or award to which Xxxxxxxx or any of its Subsidiaries is
a party or by which any of them is bound or to which the
property of any of them is subject, or
(iv) result in the cancellation, suspension or alteration in
the terms of any material licence, permit or authority held by
Xxxxxxxx or any of its Subsidiaries, or in the creation of any
lien, charge, security interest or encumbrance upon any of the
material assets of Xxxxxxxx or any of its Subsidiaries under any
such material agreement, covenant, undertaking, commitment,
instrument, judgement, order, decree or award or give to any
other Person any interest or rights, including rights of
purchase, rights of first refusal, termination, cancellation or
acceleration, under any such material agreement, covenant,
undertaking, commitment, instrument, judgement, order, decree or
award or give rise to any acceleration of indebtedness or cause
any indebtedness to come due before its stated maturity;
(q) Xxxxxxxx has not incurred any liability for brokerage fees,
finder's fees, agent's commissions or other similar forms of compensation in
connection with this Agreement or the transactions contemplated hereby, other
than as described in the Proxy Circular;
(r) the Proxy Circular does not contain an untrue statement of a
material fact concerning Xxxxxxxx and does not omit to state a material fact
concerning Xxxxxxxx that was required to be stated or that is necessary to make
a statement contained therein not misleading in the light of the circumstances
in which it was made;
(s) each of Xxxxxxxx and its Subsidiaries has complied with and is
in compliance with all laws and regulations applicable to the operation of its
business (including, without limitation, any law, rule, regulation, by-law or
ordinance relating to health and safety, reclamation, the environment, or the
use of disposition of any hazardous, toxic or radioactive substance or any other
substance designated by a similar term under any law, rule, regulation, by-law
or ordinance) except where failure to so comply will not have a Material Adverse
Effect on Xxxxxxxx, and each of Xxxxxxxx and its Subsidiaries has all licences,
permits, order or approvals of, and has made all required registrations, with,
any governmental or regulatory body that is required in connection with the
ownership of its assets or the conduct of its operations, except where the
failure to so obtain such licences, permits, orders or approvals, or make such
registrations, will not have a Material Adverse Effect on Xxxxxxxx, and each of
Xxxxxxxx and its Subsidiaries has fully complied with and is in compliance with
all such licences, permits, orders, approvals and registrations, except where
the failure to so comply will not have a Material Adverse Effect on Xxxxxxxx;
(t) no shareholders rights plan exists in relation to the Xxxxxxxx
Shares;
(u) there is no material fact or material change in relation to or
affecting the general affairs (including the business, operations, assets,
capital or ownership), management, financial position, shareholders' equity or
results of operation of Xxxxxxxx which has not been disclosed as required by
applicable securities law and there has been no development involving such a
material fact or material change since December 31, 2000 which has not been
disclosed by Xxxxxxxx publicly by means of a press release;
(v) there is no material environmental liability, nor factors likely
to give rise to any material environmental liability, affecting any of the
properties or assets of Xxxxxxxx or any of its Subsidiaries apart from those
disclosed in the Proxy Circular that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on Xxxxxxxx; and
(w) neither Xxxxxxxx nor any of its Subsidiaries have materially
violated or materially infringed any environmental law now or previously in
effect, other than as disclosed in the Proxy Circular or other than such
violations or infringements that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Material Adverse Effect on
Xxxxxxxx.
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SECTION 3.02 REPRESENTATIONS AND WARRANTIES OF GEONOVA
GeoNova hereby represents and warrants to and in favour of
Xxxxxxxx and MSV that:
(a) GeoNova has been duly incorporated and is a valid and subsisting
corporation under the provisions of the CBCA, has all requisite corporate power
and authority to carry on its business as now being carried on by it and to own
or lease and operate its properties and assets and is duly licensed or otherwise
qualified to carry on business in each jurisdiction in which a material amount
of its business is conducted or wherein the character of the properties and
assets now owned or leased by it or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified will not
have a Material Adverse Effect on GeoNova;
(b) as of the date hereof, the issued and outstanding shares of
GeoNova consist of 39,190,456 GeoNova Shares, all of which are outstanding as
fully paid and non-assessable shares;
(c) the execution, delivery and performance of this Agreement and
the agreements, documents and transactions contemplated herein are within the
corporate power and authority of GeoNova and have been duly authorized by all
necessary corporate action and this Agreement constitutes a valid and binding
obligation of GeoNova, enforceable against GeoNova in accordance with its terms;
(d) GeoNova is a reporting issuer not in default under the
Securities Act (Ontario) and the equivalent provisions of the securities acts of
the other provinces of Canada;
(e) the GeoNova Shares are listed and posted for trading on the
Montreal Exchange and GeoNova is not in default of any requirements, rules or
regulations of the Montreal Exchange;
(f) GeoNova does not have any outstanding agreements, subscriptions,
warrants, options or commitments, nor has it granted any rights or privileges
capable of becoming an agreement, subscription, warrant, option or commitment,
obligating GeoNova to issue any additional shares or other securities, except as
disclosed in the Proxy Circular;
(g) the audited consolidated financial statements of GeoNova for the
financial year ended April 30, 2000 present fairly the consolidated financial
condition and results of operations of GeoNova as at such date and for the
financial year then ended and have been prepared in accordance with Canadian
generally accepted accounting principles applied on a consistent basis;
(h) since April 30, 2000, there has been no material adverse change
in the business, operations, properties, assets or condition, financial or
otherwise, of GeoNova on a consolidated basis from that shown in the audited
consolidated financial statements of GeoNova as at April 30, 2000, except as
disclosed in the Proxy Circular;
(i) each of GeoNova and its Subsidiaries is the beneficial owner of
the properties and assets described as being owned by it in the Proxy Circular
with good and marketable title thereto free and clear of material encumbrances,
except as disclosed in the Proxy Circular, and, in particular, GeoNova is the
beneficial owner of the shares of its Subsidiaries as described in the Proxy
Circular with good and marketable title thereto free and clear of any material
covenant, condition or restriction on sale or other disposition, lien, charge,
security interest or encumbrance, except as disclosed in the Proxy Circular;
(j) none of GeoNova or any of its Subsidiaries has any liability or
obligation including, without limitation, tax liabilities, whether accrued,
absolute, contingent or otherwise, not reflected in its audited consolidated
financial statements for the financial year ended April 30, 2000, except
liabilities and obligations incurred in the ordinary course of business since
April 30, 2000, which liabilities and obligations in the aggregate will not have
a Material Adverse Effect on GeoNova, and there are reasonable grounds for
believing that (i) GeoNova is able to pay its liabilities as they become due,
(ii) after giving effect to the reduction of its stated capital contemplated in
the Proxy Circular, the realizable value of GeoNova's assets will not be less
than the aggregate of its liabilities and stated capital of all classes and
(iii) no creditor will be prejudiced by the Merger;
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(k) each of the Subsidiaries of GeoNova is a validly incorporated
and subsisting corporation under the laws of its jurisdiction of incorporation
with full power and authority to carry on its business as now carried on by it
and to own or lease and to operate its properties and assets and is duly
licensed or otherwise qualified in each jurisdiction in which its business is
conducted or wherein the character of the properties and assets now owned by it
makes such qualification necessary, except where the failure to be so qualified
will not have a Material Adverse Effect on GeoNova;
(l) there are no actions, suits, proceedings, investigations or
outstanding claims or demands, whether or not purportedly on behalf of GeoNova
or any of its Subsidiaries, instituted, pending, or, to the knowledge of
GeoNova, threatened against or affecting GeoNova or any of its Subsidiaries at
law or in equity or before or by any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or before any
arbitrator, nor is there any judgment, order, decree or award of any court or
other governmental authority having jurisdiction, obtained, pending or, to the
knowledge of GeoNova, threatened against GeoNova or any of its Subsidiaries,
which would prevent or materially hinder the consummation of the Merger or the
other transactions contemplated by this Agreement or which would involve the
reasonable possibility of any judgment or liability, whether or not covered by
insurance, or which in the aggregate would have a Material Adverse Effect on
GeoNova;
(m) GeoNova has not declared or paid any dividends or made any
distribution of its properties or assets to its shareholders and none of GeoNova
or any of its Subsidiaries has disposed of any of its properties or assets or
incurred any material indebtedness except for dividends paid in the ordinary
course of business as described in the Proxy Circular;
(n) since April 30, 2000, (i) the business of GeoNova and its
Subsidiaries has been conducted in the usual, ordinary and regular course and in
compliance with all applicable laws, regulations and ordinances of all
authorities having jurisdiction; (ii) no liability or obligation of any nature
(whether absolute, accrued, contingent or otherwise, which has had or is
reasonably likely to have a Material Adverse Effect on GeoNova, has been
received; and (iii) there has not been any event which has had or is reasonably
likely to have a Material Adverse Effect on GeoNova;
(o) each contract or agreement between GeoNova or any of its
Subsidiaries and any other Person which relates to the ownership, use or
operation of a material portion of the business, properties or assets of GeoNova
and its Subsidiaries on a consolidated basis is in full force and effect and, to
the best of the knowledge and belief of GeoNova is valid, binding and
enforceable against each of the other parties thereto in accordance with its
terms and no breach or default exists in respect thereof on the part of any
party thereto and no event has occurred which, with the giving of notice or the
lapse of time or both, would constitute such a breach or default, except for
breaches or defaults which could not reasonably be expected to have a Material
Adverse Effect on GeoNova;
(p) none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or the fulfilment of or
compliance with the terms and provisions hereof do or will, nor will they with
the giving of notice or the lapse of time or both
(i) violate any provision of any law or administrative
regulation or any judicial or administrative order, award,
judgment or decree applicable to GeoNova or any of its
Subsidiaries,
(ii) conflict with any of the terms, conditions or provisions
of the Charter Documents of GeoNova or any of its Subsidiaries,
(iii) conflict with, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of the
performance required by, any material agreement, contract,
indenture, deed of trust, mortgage, bond, licence, permit,
covenant, undertaking, commitment, instrument, judgment, order,
decree or award to which GeoNova or any of its Subsidiaries is a
party or by which any of them is bound or to which the property
of any of them is subject, or
(iv) result in the cancellation, suspension or alteration in
the terms of any material licence, permit or authority held by
GeoNova or any of its Subsidiaries, or in the creation of any
lien,
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charge, security interest or encumbrance upon any material
assets of GeoNova or any of its Subsidiaries under any such
material agreement, covenant, undertaking, commitment,
instrument, judgement, order, decree or award or give to any
other Person any interest or rights, including rights of
purchase, rights of first refusal, termination, cancellation or
acceleration, under any such material agreement, covenant,
undertaking, commitment, instrument, judgement, order, decree or
award or give rise to any acceleration of indebtedness or cause
any indebtedness to come due before its stated maturity;
(q) GeoNova has not incurred any liability for brokerage fees,
finder's fees, agent's commissions or other similar forms of compensation in
connection with this Agreement or the transactions contemplated hereby, other
than as described in the Proxy Circular;
(r) the Proxy Circular does not contain an untrue statement of a
material fact concerning GeoNova and does not omit to state a material fact
concerning GeoNova that was required to be stated or that is necessary to make a
statement contained therein not misleading in the light of the circumstances in
which it was made;
(s) each of GeoNova and its Subsidiaries has complied with and is in
compliance with all laws and regulations applicable to the operation of its
business (including, without limitation, any law, rule, regulation, by-law or
ordinance relating to health and safety, reclamation, the environment, or the
use of disposition of any hazardous, toxic or radioactive substance or any other
substance designated by a similar term under any law, rule, regulation, by-law
or ordinance) except where failure to so comply will not have a Material Adverse
Effect on GeoNova, and each of GeoNova and its Subsidiaries has all licences,
permits, order or approvals of, and has made all required registrations, with,
any governmental or regulatory body that is required in connection with the
ownership of its assets or the conduct of its operations, except where the
failure to so obtain such licences, permits, orders or approvals, or make such
registrations, will not have a Material Adverse Effect on GeoNova, and each of
GeoNova and its Subsidiaries has fully complied with and is in compliance with
all such licences, permits, orders, approvals and registrations, except where
the failure to so comply will not have a Material Adverse Effect on GeoNova;
(t) no shareholders rights plan exists in relation to the GeoNova
Shares;
(u) there is no material fact or material change in relation to or
affecting the general affairs (including the business, operations, assets,
capital or ownership), management, financial position, shareholders' equity or
results of operation of GeoNova which has not been disclosed as required by
applicable securities law and there has been no development involving such a
material fact or material change since April 30, 2000 which has not been
disclosed by GeoNova publicly by means of a press release;
(v) there is no material environmental liability, nor factors likely
to give rise to any material environmental liability, affecting any of the
properties or assets of GeoNova or any of its Subsidiaries apart from those
disclosed in the Proxy Circular that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on GeoNova; and
(w) neither GeoNova nor any of its Subsidiaries have materially
violated or materially infringed any environmental law now or previously in
effect, other than as disclosed in the Proxy Circular or other than such
violations or infringements that, individually or in the aggregate, have not had
and could not reasonably be expected to have a Material Adverse Effect on
GeoNova.
SECTION 3.03 REPRESENTATIONS AND WARRANTIES OF MSV
MSV hereby represents and warrants to and in favour of GeoNova
and Xxxxxxxx that:
(a) MSV has been duly incorporated and is a valid and subsisting
corporation under the provisions of the Quebec Act has all requisite corporate
power and authority to carry on its business as now being carried on by it and
to own or lease and operate its properties and assets and is duly licensed or
otherwise qualified to carry on business in each jurisdiction in which a
material amount of its business is conducted or wherein the character of the
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properties and assets now owned or leased by it or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
will not have a Material Adverse Effect on MSV;
(b) as of the date hereof; the issued and outstanding share capital
of MSV consists of 44,657,533 MSV Shares, all of which are outstanding as fully
paid and non-assessable shares;
(c) the execution, delivery and performance of this Agreement and
the agreements, documents and transactions contemplated herein are within the
corporate power and authority of MSV and have been duly authorized by all
necessary corporate action and this Agreement constitutes a valid and binding
obligation of Xxxxxxxx, enforceable against MSV in accordance with its terms;
(d) MSV is a reporting issuer not in default under the Securities
Act (Quebec) and the equivalent provisions of the securities acts of the other
provinces of Canada;
(e) the MSV Shares are listed and posted for trading on The Toronto
Stock Exchange and MSV is not in default of any requirements, rules or
regulations of The Toronto Stock Exchange or MSV's listing agreement with The
Toronto Stock Exchange;
(f) MSV does not have any outstanding agreements, subscriptions,
warrants, options or commitments, nor has it granted any rights or privileges
capable of becoming an agreement, subscription, warrant, option or commitment,
obligating MSV to issue any additional shares, or other securities, except as
disclosed in the Proxy Circular;
(g) the audited consolidated financial statements of MSV for the
financial year ended December 31, 2000 present fairly the consolidated financial
condition and results of operations of Xxxxxxxx as at such date and for the
financial year then ended and have been prepared in accordance with Canadian
generally accepted accounting principles applied on a consistent basis;
(h) since December 31, 2000, there has been no material adverse
change in the business, operations, properties, assets or condition, financial
or otherwise, of MSV on a consolidated basis from that shown in the audited
consolidated financial statements of MSV as at December 31, 2000, except as
disclosed in the Proxy Circular;
(i) each of MSV and its Subsidiaries is the beneficial owner of the
properties and assets described as being owned by it in the Proxy Circular with
good and marketable title thereto free and clear of material encumbrances,
except as disclosed in the Proxy Circular and, in particular, MSV is the
beneficial owner of the shares of its Subsidiaries as described in the Proxy
Circular with good and marketable title thereto free and clear of any material
covenant, condition or restriction on sale or other disposition, lien, charge,
security interest or encumbrance, except as disclosed in the Proxy Circular;
(j) none of MSV or any of its Subsidiaries has any liability or
obligation including, without limitation, tax liabilities, whether accrued,
absolute, contingent or otherwise, not reflected in its audited consolidated
financial statements for the financial year ended December 31, 2000, except
liabilities and obligations incurred in the ordinary course of its business
since December 31, 2000, which liabilities and obligations in the aggregate will
not have a Material Adverse Effect on MSV, and there are reasonable grounds for
believing that (i) MSV is able to pay its liabilities as they become due and
(ii) no creditor will be prejudiced by the Merger;
(k) each of the Subsidiaries of MSV is a validly incorporated and
subsisting corporation under the laws of its jurisdiction of incorporation with
full power and authority to carry on its business as now carried on by it and to
own or lease and to operate its properties and assets and is duly licensed or
otherwise qualified in each jurisdiction in which its business is conducted or
wherein the character of the properties and assets now owned by it makes such
qualification necessary, except where the failure to be so qualified will not
have a Material Adverse Effect on MSV;
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(l) there are no actions, suits, proceedings, investigations or
outstanding claims or demands, whether or not purportedly on behalf of MSV, or
any of its Subsidiaries, instituted, pending or, to the knowledge of MSV, or any
of its Subsidiaries, threatened against or affecting MSV, or any of its
Subsidiaries, at law or in equity or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator, nor is there any judgment, order, decree or award of any
court or other governmental authority having jurisdiction, obtained, pending or,
to the knowledge of MSV or any of its Subsidiaries, threatened, against MSV, or
any of its Subsidiaries, which would prevent or materially hinder the
consummation of the Merger or the other transactions contemplated by this
Agreement or which would involve the reasonable possibility of any judgment or
liability, whether or not covered by insurance, or which in the aggregate would
have a Material Adverse Effect on MSV;
(m) MSV has not declared or paid any dividends or made any
distribution of its properties or assets to its shareholders and none of MSV or
any of its Subsidiaries has disposed of any of its properties or assets or
incurred any material indebtedness except for dividends paid in the ordinary
course of business as described in the Proxy Circular;
(n) since December 31, 2000, (i) the business of MSV and its
Subsidiaries has been conducted in the usual, ordinary and regular course and in
compliance with all applicable laws, regulations and ordinances of all
authorities having jurisdiction; (ii) no liability or obligation of any nature
(whether absolute, accrued, contingent or otherwise) which has had or is
reasonably likely to have a Material Adverse Effect on MSV, has been received;
and (iii) there has not been any event which has had or is reasonably likely to
have a Material Adverse Effect on MSV;
(o) each contract or agreement between MSV or any of its
Subsidiaries and any other Person which relates to the ownership, use or
operation of a material portion of the business, properties or assets of MSV and
its Subsidiaries on a consolidated basis, is in full force and effect and, to
the best of the knowledge and belief of MSV, is valid, binding and enforceable
against each of the other parties thereto in accordance with its terms and no
breach or default exists in respect thereof on the part of any party thereto and
no event has occurred which, with the giving of notice or the lapse of time or
both, would constitute such a breach or default, except for breaches or defaults
which could not reasonably be expected to have a Material Adverse Effect on MSV;
(p) none of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or the fulfilment of or
compliance with the terms and provisions hereof do or will, nor will they with
the giving of notice or the lapse of time or both
(i) violate any provision of any law or administrative
regulation or any judicial or administrative order, award,
judgement or decree applicable to MSV or any of its
Subsidiaries,
(ii) conflict with any of the terms, conditions or provisions
of the Charter Documents of MSV or any of its Subsidiaries,
(iii) conflict with, result in a breach of, constitute a
default under, or accelerate or permit the acceleration of the
performance required by, any material agreement, contract,
indenture, deed of trust, mortgage, bond, licence, permit,
covenant, undertaking, commitment, instrument, judgement, order,
decree or award to which MSV or any of its Subsidiaries is a
party or by which any of them is bound or to which the property
of any of them is subject, or
(iv) result in the cancellation, suspension or alteration in
the terms of any material licence, permit or authority held by
MSV or any of its Subsidiaries, or in the creation of any lien,
charge, security interest or encumbrance upon any of the
material assets of MSV or any of its Subsidiaries under any such
material agreement, covenant, undertaking, commitment,
instrument, judgment, order, decree or award or give to any
other Person any interest or rights, including rights of
purchase, rights of first refusal, termination, cancellation or
acceleration, under any such material agreement, covenant,
undertaking, commitment, instrument, judgment, order, decree or
award or give rise to any acceleration of indebtedness or cause
any indebtedness to come due before its stated maturity;
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(q) MSV has not incurred any liability for brokerage fees, finder's
fees, agent's commissions or other similar forms of compensation in connection
with this Agreement or the transactions contemplated hereby, other than as
described in the Proxy Circular;
(r) the Proxy Circular does not contain an untrue statement of a
material fact concerning MSV and does not omit to state a material fact
concerning MSV that was required to be stated or that is necessary to make a
statement contained therein not misleading in the light of the circumstances in
which it was made;
(s) each of MSV and its Subsidiaries has complied with and is in
compliance with all laws and regulations applicable to the operation of its
business (including, without limitation, any law, rule, regulation, by-law or
ordinance relating to health and safety, reclamation, the environment, or the
use of disposition of any hazardous, toxic or radioactive substance or any other
substance designated by a similar term under any law, rule, regulation, by-law
or ordinance) except where failure to so comply will not have a Material Adverse
Effect on MSV, and each of MSV and its Subsidiaries has all licences, permits,
order or approvals of, and has made all required registrations, with, any
governmental or regulatory body that is required in connection with the
ownership of its assets or the conduct of its operations, except where the
failure to so obtain such licences, permits, orders or approvals, or make such
registrations, will not have a Material Adverse Effect on Xxxxxxxx, and each of
Xxxxxxxx and its Subsidiaries has fully complied with and is in compliance with
all such licences, permits, orders, approvals and registrations, except where
the failure to so comply will not have a Material Adverse Effect on MSV;
(t) no shareholders rights plan exists in relation to the MSV
Shares;
(u) there is no material fact or material change in relation to or
affecting the general affairs (including the business, operations, assets,
capital or ownership), management, financial position, shareholders' equity or
results of operation of MSV which has not been disclosed as required by
applicable securities law and there has been no development involving such a
material fact or material change since December 31, 2000 which has not been
disclosed by MSV publicly by means of a press release;
(v) there is no material environmental liability, nor factors likely
to give rise to any material environmental liability, affecting any of the
properties or assets of MSV or any of its Subsidiaries apart from those
disclosed in the Proxy Circular that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on MSV; and
(w) neither MSV nor any of its Subsidiaries have materially violated
or materially infringed any environmental law now or previously in effect other
than as disclosed in the Proxy Circular or other than such violations or
infringements that, individually or in the aggregate, have not had and could not
reasonably be expected to have a Material Adverse Effect on MSV.
COVENANTS
SECTION 4.01 COVENANTS OF XXXXXXXX
Xxxxxxxx hereby covenants and agrees with GeoNova and MSV as
follows:
(a) Xxxxxxxx and its Subsidiaries will carry on business in the
ordinary course and will not enter into any transaction or incur any obligation
or liability out of the ordinary course of business, except as contemplated in
this Agreement or in the Proxy Circular;
(b) Xxxxxxxx will not, and will not permit any of its Subsidiaries
to, merge into or with, or amalgamate or consolidate with, or enter into any
other corporate reorganization with, any other Person or perform any act or
enter into any transaction or negotiation which interferes or is inconsistent
with the completion of the transactions contemplated hereby or would render
inaccurate in any material way any of the representations and warranties set
forth in Section 3.01 hereof if such representations and warranties were made at
a date subsequent to
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such act, negotiation or transaction and all references to the date of this
Agreement were deemed to be such later date, except as contemplated in this
Agreement or in the Proxy Circular, and, without limiting the generality of the
foregoing, Xxxxxxxx will not, and will not permit any of its subsidiaries to,
(i) make any distribution by way of dividend, return of
capital or otherwise to or for the benefit of its shareholders,
(ii) issue any shares or other securities convertible into or
exchangeable for shares or enter into any commitment or
agreement therefor, or
(iii) increase or decrease its paid-up capital, except as
contemplated in the Proxy Circular;
(c) Xxxxxxxx will not, and will not permit any of its Subsidiaries
to, alter or amend its Charter Documents as the same exist at the date of this
Agreement, except as contemplated in the Proxy Circular;
(d) Xxxxxxxx will not, and will not permit any of its Subsidiaries
to, engage in any business, enterprise or activity materially different from
that carried on by it at the date of this Agreement or enter into any
transaction or incur any obligation if the same would have a material adverse
effect on Xxxxxxxx or the Merger, other than in the ordinary course of business,
except for transactions with or between and obligations to wholly-owned
Subsidiaries of Xxxxxxxx;
(e) Xxxxxxxx will convene the appropriate special shareholders'
meeting on a date mutually convenient to each of the Participating Corporations
and will solicit proxies to be voted at such meeting in favour of the approval
of this Agreement, the Merger and the other matters incidental to the Merger;
(f) Xxxxxxxx will, in a timely and expeditious manner, file the
Proxy Circular in all jurisdictions where it is required to be filed and mail
the same to its shareholders in accordance with applicable law and in accordance
with the Interim Order;
(g) Xxxxxxxx will do all such other acts and things as may be
necessary or required in order to give effect to the Merger and, without
limiting the generality of the foregoing, Xxxxxxxx will use its best efforts to
obtain
(i) the approvals of the shareholders of Xxxxxxxx required
for the implementation of the Merger,
(ii) the Final Order as provided in Section 4.04 hereof, and
(iii) such other consents, orders and approvals as counsel may
advise are necessary or desirable for the implementation of the
Merger, including those referred to in Section 5.01 hereof;
(h) Xxxxxxxx will use all reasonable efforts to cause each of the
conditions precedent set forth in Article Five hereof to be complied with on or
before the Effective Date;
(i) Xxxxxxxx will not, nor will it authorize or permit any officer,
director, employee, investment banker, attorney or other advisor or
representative of Xxxxxxxx or any of its Subsidiaries to, enter into any
agreement with any Person relating to the acquisition of any outstanding or
unissued Xxxxxxxx Shares or any form of business combination or solicit or
initiate any proposals or offers from any Person, entertain or enter into
discussions or negotiations with or provide information relating to Xxxxxxxx or
any of its Subsidiaries in connection with the acquisition or disposition of any
securities of Xxxxxxxx or any of its Subsidiaries or any business combination,
restructuring, refinancing, sale of any material assets or part thereof of
Xxxxxxxx or any of its Subsidiaries or any take-over bid, reorganization,
recapitalization, liquidation or winding-up of or other similar transaction
involving Xxxxxxxx or any of its Subsidiaries provided that the foregoing shall
not prevent the directors of Xxxxxxxx, to the extent required to satisfy their
fiduciary obligations, as determined in good faith by them based on the opinion
of outside counsel, from responding as required by law to an unsolicited
proposal received from other Persons; and
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(j) take and cause its Subsidiaries to take all such action as may
be required to maintain its interests in the property and assets owned or held
by it or them and to comply with all applicable laws, rules, regulations and
governmental orders and decrees relating to such property and assets.
SECTION 4.02 COVENANTS OF GEONOVA
GeoNova hereby covenants and agrees with Xxxxxxxx and MSV as
follows:
(a) GeoNova and its Subsidiaries will carry on business in the
ordinary course and will not enter into any transaction or incur any obligation
or liability out of the ordinary course of business, except as contemplated in
this Agreement or in the Proxy Circular;
(b) GeoNova will not, and will not permit any of its Subsidiaries
to, merge into or with, or amalgamate or consolidate with, or enter into any
other corporate reorganization with, any other corporation or person or perform
any act or enter into any transaction or negotiation which interferes or is
inconsistent with the completion of the transactions contemplated hereby or
would render inaccurate in any material respect any of the representations and
warranties set forth in Section 3.02 hereof if such representations and
warranties were made at a date subsequent to such act, negotiation or
transaction and all references to the date of this Agreement were deemed to be
such later date, as contemplated in this Agreement or in the Proxy Circular,
and, without limiting the generality of the foregoing, GeoNova will not, and
will not permit any of its Subsidiaries to,
(i) make any distribution by way of dividend, return of
capital or otherwise to or for the benefit of its shareholders,
(ii) issue any shares or other securities convertible into or
exchangeable for shares or enter into any commitment or
agreement therefor, or
(iii) increase or decrease its paid-up capital, except as
contemplated in the Proxy Circular;
(c) GeoNova will not, and will not permit any of its Subsidiaries
to, alter or amend its Charter Documents as the same exist at the date of this
Agreement, except as contemplated in the Proxy Circular;
(d) GeoNova will not, and will not permit any Subsidiary to, engage
in any business, enterprise or activity materially different from that carried
on by it at the date of this Agreement or enter into any transaction or incur
any obligation if the same would have a material adverse effect on GeoNova or
the Merger, other than in the ordinary course of business, except for
transactions with or between and obligations to wholly-owned Subsidiaries of
GeoNova;
(e) GeoNova will convene the appropriate special shareholders'
meeting on a date mutually convenient to each of the Participating Corporations
and will solicit proxies to be voted at such meeting in favour of the approval
of this Agreement, the Merger and the other matters incidental to the Merger;
(f) GeoNova will, in a timely and expeditious manner, file the Proxy
Circular in all jurisdictions where it is required to be filed and mail the same
to its shareholders in accordance with applicable law and in accordance with the
Interim Order;
(g) GeoNova will do all such other acts and things as may be
necessary or required in order to give effect to the Merger and, without
limiting the generality of the foregoing, GeoNova will use its best efforts to
obtain
(i) the approvals of the shareholders of GeoNova required
for the implementation of the Merger,
(ii) the Final Order as provided in Section 4.04 hereof, and
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(iii) such other consents, orders and approvals as counsel may
advise are necessary or desirable for the implementation of the
Merger, including those referred to in Section 5.01 hereof;
(h) GeoNova will use all reasonable efforts to cause each of the
conditions precedent set forth in Article Five hereof to be complied with on or
before the Effective Date;
(i) GeoNova will not, nor will it authorize or permit any officer,
director, employee, investment banker, attorney or other advisor or
representative of GeoNova or any of its Subsidiaries to, enter into any
agreement with any Person relating to the acquisition of any outstanding or
unissued GeoNova Shares or any form of business combination or solicit or
initiate any proposals or offers from any Person, entertain or enter into
discussions or negotiations with or provide information relating to GeoNova or
any of its Subsidiaries in connection with the acquisition or disposition of any
securities of GeoNova or any of its Subsidiaries or any business combination,
restructuring, refinancing, sale of any material assets or part thereof of
GeoNova or any of its Subsidiaries or any take-over bid, reorganization,
recapitalization, liquidation or winding-up of or other similar transaction
involving GeoNova or any of its Subsidiaries provided that the foregoing shall
not prevent the directors of GeoNova, to the extent required to satisfy their
fiduciary obligations, as determined in good faith by them based on the opinion
of outside counsel, from responding as required by law to an unsolicited
proposal received from other Persons; and
(j) take, and cause each of its Subsidiaries to take, all such
action as may be required to maintain its interests in the property and assets
owned or held by it or them and to comply with all applicable laws, rules,
regulations and governmental orders and decrees relating to such property and
assets.
SECTION 4.03 COVENANTS OF MSV
MSV hereby covenants and agrees with GeoNova and Xxxxxxxx as
follows:
(a) MSV and its Subsidiaries will carry on business in the ordinary
course and will not enter into any transaction or incur any obligation or
liability out of the ordinary course of business, except as contemplated in this
Agreement or in the Proxy Circular;
(b) MSV will not, and will not permit any of its Subsidiaries to,
merge into or with, or amalgamate or consolidate with, or enter into any other
corporate reorganization with, any other Person or perform any act or enter into
any transaction or negotiation which interferes or is inconsistent with the
completion of the transactions contemplated hereby or would render inaccurate in
any material way any of the representations and warranties set forth in Section
3.03 hereof if such representations and warranties were made at a date
subsequent to such act, negotiation or transaction and all references to the
date of this Agreement were deemed to be such later date, except as contemplated
in this Agreement or in the Proxy Circular, and, without limiting the generality
of the foregoing, MSV will not, and will not permit any of its subsidiaries to,
(i) make any distribution by way of dividend, return of
capital or otherwise to or for the benefit of its shareholders,
(ii) issue any shares or other securities convertible into or
exchangeable for shares or enter into any commitment or
agreement therefor, or
(iii) increase or decrease its paid-up capital, except as
contemplated in the Proxy Circular;
(c) MSV will not, and will not permit any of its Subsidiaries to,
alter or amend its Charter Documents as the same exist at the date of this
Agreement, except as contemplated in the Proxy Circular;
(d) MSV will not, and will not permit any of its Subsidiaries to,
engage in any business, enterprise or activity materially different from that
carried on by it at the date of this Agreement or enter into any transaction or
incur any obligation if the same would have a material adverse effect on MSV or
the Merger, other than in the
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ordinary course of business, except for transactions with or between and
obligations to wholly-owned Subsidiaries of MSV;
(e) MSV will convene the appropriate special shareholders' meeting
on a date mutually convenient to each of the Participating Corporations and will
solicit proxies to be voted at such meeting in favour of the approval of this
Agreement, the Merger and the other matters incidental to the Merger and shall
provide to its shareholders rights of dissent in accordance with the provisions
of the CBCA to the same extent as if MSV were a corporation incorporated
pursuant to the CBCA;
(f) MSV will, in a timely and expeditious manner, file the Proxy
Circular in all jurisdictions where it is required to be filed and mail the same
to its shareholders in accordance with applicable law and in accordance with the
Interim Order;
(g) MSV will do all such other acts and things as may be necessary
or required in order to give effect to the Merger and, without limiting the
generality of the foregoing, MSV will use its best efforts to apply for and
obtain
(i) the approvals of the shareholders of MSV required for
the implementation of the Merger,
(ii) the Final Order as provided in Section 4.04 hereof, and
(iii) such other consents, orders and approvals as counsel may
advise are necessary or desirable for the implementation of the
Merger, including those referred to in Section 5.01 hereof;
(h) MSV will use all reasonable efforts to cause each of the
conditions precedent set forth in Article Five hereof to be complied with on or
before the Effective Date;
(i) MSV will not, nor will it authorize or permit any officer,
director, employee, investment banker, attorney or other advisor or
representative of MSV or any of its Subsidiaries to, enter into any agreement
with any Person relating to the acquisition of any outstanding or unissued MSV
Shares or any form of business combination or solicit or initiate any proposals
or offers from any Person, entertain or enter into discussions or negotiations
with or provide information relating to MSV or any of its Subsidiaries in
connection with the acquisition or disposition of any securities of MSV or any
of its Subsidiaries or any business combination, restructuring, refinancing,
sale of any material assets or part thereof of MSV or any of its Subsidiaries or
any take-over bid, reorganization, recapitalization, liquidation or winding-up
of or other similar transaction involving MSV or any of its Subsidiaries
provided that the foregoing shall not prevent the directors of MSV, to the
extent required to satisfy their fiduciary obligations, as determined in good
faith by them based on the opinion of outside counsel, from responding as
required by law to an unsolicited proposal received from other Persons;
(j) take and cause its Subsidiaries to take all such action as may
be required to maintain its interests in the property and assets owned or held
by it or them and to comply with all applicable laws, rules, regulations and
governmental orders and decrees relating to such property and assets.
SECTION 4.04 INTERIM ORDER AND FINAL ORDER
The Participating Corporations covenant and agree to apply to
and to use their best efforts to obtain from the Court pursuant to the CBCA and
the Quebec Act the Interim Order providing for, among other things, the calling
and holding of the Meetings for the purpose of considering and, if deemed
advisable, approving the Merger. If the approval as set forth in the Interim
Order is obtained, the Participating Corporations will thereafter jointly take
the necessary steps to apply for the Final Order in such fashion as the Court
may direct. As soon as practicable after receipt of the Final Order, and subject
to compliance with any of the other conditions provided for in Article Five
hereof and to the rights of termination in Article Six hereof, Xxxxxxxx and
GeoNova shall file articles of arrangement pursuant to the CBCA and MSV shall
file articles of amendment pursuant to the Quebec Act to give effect to the CBCA
Arrangement and the Quebec Arrangement, respectively, concurrently on the
Effective Date.
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SECTION 4.05 CONSENTS AND NOTICES
Promptly after the date hereof, each of Xxxxxxxx, GeoNova and
MSV will execute and file, or join in the execution and filing of, any
application or other document that may be necessary in order to obtain the
authorization, approval or consent of any governmental entity which may be
reasonably required, or which the other party may reasonably request in
connection with the consummation of the transactions contemplated by this
Agreement. Each of Xxxxxxxx, GeoNova and MSV will use reasonable efforts to
obtain promptly all such authorizations, approvals and consents.
SECTION 4.06 DISSENT RIGHTS
Each of the Participating Corporations shall grant its
respective shareholders dissent rights with respect to the approval of the
Merger in accordance with s.190 of the CBCA, or in the case of holders of MSV
Shares, dissent rights as if s.190 of the CBCA applied to MSV.
CONDITIONS
SECTION 5.01 MUTUAL CONDITIONS PRECEDENT
The respective obligations of the Participating Corporations to
complete the transactions contemplated by this Agreement to give effect to the
Merger shall be subject to the satisfaction of the following conditions,
paragraph (i) of which may be waived by either of the Participating Corporations
in whole or in part without prejudice to the right of such Participating
Corporation to rely on any other of them:
(a) the Merger, with or without amendment, shall have been approved
at the Meetings in accordance with the Interim Order and the Merger shall have
otherwise been approved by the requisite majorities of the shares entitled or
required to vote thereon as determined by the Court;
(b) the reduction of the stated capital of the shares of Xxxxxxxx
and GeoNova as contemplated in the Proxy Circular shall have been approved at
their respective Meetings;
(c) the opinion of Xxxxxxxxx XxXxxxxx & Partners as to the fairness
of the Merger, from a financial point of view, to the shareholders of each of
Xxxxxxxx, GeoNova and MSV, respectively, shall have been delivered prior to the
date of mailing of the Proxy Circular and such opinion shall not have been
withdrawn as of the Effective Date;
(d) the Final Order shall have been obtained in form and substance
satisfactory to each of the Participating Corporations, acting reasonably;
(e) all other consents, orders, regulations and approvals, including
regulatory and judicial approvals and orders, required or desirable for the
completion of the Merger shall have been obtained or received from the persons,
authorities or bodies having jurisdiction in the circumstances;
(f) there shall not be in force any order or decree restraining or
enjoining the consummation of the transactions contemplated by this Agreement
and the Merger;
(g) the Participating Corporations shall have received satisfactory
opinions from Canadian and U.S. counsel in respect of such legal matters, if
any, as they may reasonably request;
(h) none of the consents, orders, regulations or approvals
contemplated herein shall contain terms or conditions or require undertakings or
security deemed unsatisfactory or unacceptable by any of the Participating
Corporations;
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(i) holders of Xxxxxxxx Shares, holders of GeoNova Shares and
holders of MSV Shares holding, in the aggregate in each case, no greater than 5%
of the outstanding Xxxxxxxx Shares, the GeoNova Shares and the MSV Shares,
respectively, shall have exercised the right to dissent to the Merger;
(j) this Agreement shall not have been terminated under Article Six;
and
(k) the CBCA Arrangement and the Quebec Arrangement are both to
occur on the Effective Date.
SECTION 5.02 CONDITIONS TO OBLIGATIONS OF EACH PARTY
The obligation of each of the Participating Corporations to
complete the transactions contemplated by this Agreement is further subject to
the condition, which may be waived by each such Participating Corporation
without prejudice to its right to rely on any other condition in favour of such
Participating Corporation, that the covenants of the other Participating
Corporations hereto to be performed on or before the Effective Date pursuant to
the provisions of this Agreement shall have been duly performed and that, except
as affected by the transactions contemplated by this Agreement, the
representations and warranties of the other Participating Corporations shall be
true and correct in all material respects as at the Effective Date, with the
same effect as if such representations and warranties had been made at, and as
of, such time and each Participating Corporation shall have received a
certificate, dated the Effective Date, of a senior officer of the other
Participating Corporation confirming the same.
SECTION 5.03 MERGER OF CONDITIONS
The conditions set out in Section 5.01 and Section 5.02 shall be
conclusively deemed to have been satisfied, waived or released on the filing by
Xxxxxxxx and GeoNova of articles of arrangement under the CBCA with respect to
the CBCA Arrangement and the filing of the articles of amendment by MSV under
the Quebec Act with respect to the Quebec Arrangement.
AMENDMENT AND TERMINATION
SECTION 6.01 AMENDMENT
This Agreement may, at any time and from time to time before and
after the holding of the Meetings, but not later than the Effective Date, be
amended by written agreement of the Participating Corporations without, subject
to applicable law, further notice to or authorization on the part of the
shareholders of the Participating Corporations. Without limiting the generality
of the foregoing, any such amendment may:
(a) change the time for the performance of any of the obligations or
acts of the Participating Corporations;
(b) waive any inaccuracies or modify any representation or warranty
contained herein or in any document to be delivered pursuant hereto; or
(c) waive compliance with or modify any of the covenants contained
herein or waive or modify the performance of any of the obligations of the
Participating Corporations;
provided that, notwithstanding the foregoing, the terms of Article Two of the
CBCA Arrangement, Article Two of the Quebec Arrangement and Section 5.01 of this
Agreement shall not be materially amended without the approval of the
shareholders of the Participating Corporations given in the same manner as
required for the approval of the Merger or as may be ordered by the Court. This
Agreement, the CBCA Arrangement and the Quebec Arrangement may be amended in
accordance with the Final Order, but in the event that the terms of the Final
Order require any such amendment, the rights of the Participating Corporations
under Section 5.01, Section 5.02, Section 6.02 and Article Seven hereof shall
remain unaffected.
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SECTION 6.02 RIGHTS OF TERMINATION
If any of the conditions contained in Section 5.01 or Section
5.02 shall not be fulfilled or performed or, where applicable, waived on or
before the Effective Date, any of the Participating Corporations may terminate
this Agreement by notice to the other Participating Corporations. In the event
this Agreement is terminated as aforesaid, the party terminating this Agreement
shall be released from all obligations under this Agreement, all rights of
specific performance by any of the parties shall terminate and, unless such
party can show that the condition or conditions the non-performance of which has
caused such party to terminate this Agreement were reasonably capable of being
performed by the other party, then the other party shall also be released from
all obligations hereunder; provided that if such party can show that the other
party could reasonably have performed such condition or conditions then the
other party shall not be released from its obligations hereunder.
SECTION 6.03 NOTICE OF UNFULFILLED CONDITIONS
If any of the Participating Corporations shall determine at any
time prior to the Effective Date that it intends to refuse to consummate the
Merger or any of the transactions contemplated hereby because of any unfulfilled
or unperformed condition precedent contained in this Agreement on the part of
any other Participating Corporation to be fulfilled or performed, such
Participating Corporation shall so notify the other Participating Corporation
forthwith upon making such determination in order that the Participating
Corporation shall have the right and opportunity to take such steps, at its own
expense, as may be necessary for the purpose of fulfilling or performing such
condition precedent within a reasonable period of time, but in no event later
than June 30, 2001.
SECTION 6.04 MUTUAL TERMINATION
This Agreement may, at any time before or after the holding of
the Meetings, but no later than the Effective Date, be terminated by unanimous
agreement of the boards of directors of the Participating Corporations without
further action on the part of their respective shareholders and if the Effective
Date does not occur on or before June 30, 2001 each of the Participating
Corporations may unilaterally terminate this Agreement without further action on
the part of its shareholders, which termination will be effective upon a
resolution to that effect being passed by the applicable board of directors and
notice thereof being given to the other Participating Corporations.
INDEMNIFICATION
SECTION 7.01 INDEMNIFICATION
Each Participating Corporation (the "Indemnifying Party")
undertakes with each other Participating Corporation (an "Indemnified Party") to
indemnify and hold harmless the Indemnified Party from and against all losses,
claims, damages, liabilities, actions or demands including, without limiting the
generality of the foregoing, amounts paid in any settlement approved by the
Indemnifying Party of any action, suit, proceeding or claim but excluding lost
profits and consequential damages, to which each such Indemnified Party may
become subject insofar as such losses, claims, damages, liabilities, actions or
demands arise out of or are based upon any breach of a representation, warranty,
covenant or obligation of the Indemnifying Party contained in this Agreement or
any certificate or notice delivered by it in connection herewith, and will
reimburse such Indemnified Party for any legal or other expenses reasonably
incurred by each such Indemnified Party in connection with investigating or
defending any such loss, claim, damage, liability, action or demand.
SECTION 7.02 DEFENCE
Promptly after receipt by an Indemnified Party of notice of a
possible action, suit, proceeding or claim referred to in Section 7.01 hereof,
such Indemnified Party, if a claim in respect thereof is to be made against the
Indemnifying Party under such section, shall provide the Indemnifying Party with
written particulars thereof; provided that failure to so provide the
Indemnifying Party with such particulars shall not relieve such Indemnifying
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Party from any liability which it might have on account of the indemnity
provided for in this Article Seven except insofar as such failure shall
prejudice such Indemnifying Party. The Indemnified Party shall also provide to
the Indemnifying Party copies of all relevant documentation and, unless the
Indemnifying Party assumes the defence thereof, shall keep such Indemnifying
Party advised of the progress thereof and will discuss with the Indemnifying
Party all significant actions proposed. An Indemnifying Party shall be entitled,
at its own expense, to participate in and, to the extent that it may wish, to
assume the defence of any such action, suit, proceeding or claim but such
defence shall be conducted by counsel of good standing approved by the
Indemnified Party, such approval not to be unreasonably withheld. Upon the
Indemnifying Party notifying the Indemnified Party of its election so to assume
the defence and retaining such counsel, the Indemnifying Party shall not be
liable to the Indemnified Party for any legal or other expenses subsequently
incurred by it in connection with such defence other than for reasonable costs
of investigation. If such defence is assumed by the Indemnifying Party, it
shall, throughout the course thereof, provide copies of all relevant
documentation to the Indemnified Party, keep such Indemnified Party advised of
the progress thereof and shall discuss with the Indemnified Party all
significant actions proposed. No Indemnifying Party shall enter into any
settlement without the consent of the Indemnified Party, but such consent shall
not be unreasonably withheld. If such defence is not assumed by the Indemnifying
Party, the Indemnifying Party shall not be liable for any settlement made
without its consent, but such consent shall not be unreasonably withheld.
Notwithstanding the foregoing, an Indemnified Party shall have the right, at the
Indemnifying Party's expense, to employ counsel of its own choice in respect of
the defence of any such action, suit, proceeding or claim if: (a) the employment
of such counsel has been authorized by the Indemnifying Party in connection with
such defence; or (b) counsel retained by the Indemnifying Party or the
Indemnified Party shall have advised the Indemnified Party that there may be
legal defences available to it which are different from or in addition to those
available to the Indemnifying Party (in which event and to that extent, the
Indemnifying Party shall not have the right to assume or direct the defence on
behalf of the Indemnified Party) or that there may be a conflict of interest
between the Indemnifying Party and the Indemnified Party; or (c) the
Indemnifying Party shall not have assumed such defence and employed counsel
therefor within a reasonable time after receiving notice of such action, suit,
proceeding or claim.
SECTION 7.03 TERM
The obligations of each of the Participating Corporations under
this Article Seven shall terminate when the Merger is consummated, failing which
they shall survive and continue with respect to all losses, claims, damages,
liabilities, actions or demands, notice of which is given to the Indemnifying
Party by the Indemnified Party on or before one year from the date hereof in
compliance with Section 7.02 hereof.
SECTION 7.04 INVESTIGATION
Any investigation by a party hereto and its advisors shall not
mitigate, diminish or affect the representations and warranties of the other
party contained in this Agreement or any document or certificate given pursuant
hereto.
GENERAL
SECTION 8.01 NOTICES
All notices which may or are required to be given pursuant to
any provision of this Agreement shall be given or made in writing and shall be
served personally in each case addressed:
(a) in the case of Xxxxxxxx:
BCE Place
000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
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Attention: Xxxxx X. XxxXxxxxxxxx
(b) in the case of GeoNova:
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxx
(c) in the case of MSV:
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxx
SECTION 8.02 ASSIGNMENT
No Participating Corporation may assign its rights or
obligations under this Agreement or the Merger without the prior written consent
of each other Participating Corporation.
SECTION 8.03 BINDING EFFECT
This Agreement and the Merger shall be binding upon and shall
enure to the benefit of the Participating Corporations and their respective
successors and permitted assigns.
SECTION 8.04 WAIVER
Any waiver or release of any of the provisions of this
Agreement, to be effective, must be in writing and executed by the Participating
Corporation granting such waiver or release. Waivers may only be granted upon
compliance with the terms governing amendments set forth in Section 6.01 hereof.
SECTION 8.05 GOVERNING LAW
This Agreement shall be governed by and be construed in
accordance with the laws of the Province of Quebec and the laws of Canada
applicable therein and shall be treated in all respects as a Quebec contract.
SECTION 8.06 COUNTERPARTS
This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
SECTION 8.07 ENTIRE AGREEMENT
This Agreement, together with the agreements and other documents
herein or therein referred to, constitutes the entire agreement between the
Participating Corporations pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, between the Participating Corporations with respect to
the subject matter hereof.
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SECTION 8.08 EXPENSES
All expenses incurred in connection with this Agreement, the
Merger and the transactions contemplated hereby and thereby shall be paid by the
Participating Corporation incurring such expenses, except that expenses incurred
in connection with the preparation of the Proxy Circular shall be paid by the
Participating Corporations on an equal basis. The provisions of this Section
shall survive the termination of this Agreement.
SECTION 8.09 TIME OF ESSENCE
Time is of the essence of this Agreement.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the date hereinbefore written.
XXXXXXXX RESOURCES INC.
Per: /s/ Xxxxx X. XxXxxxxxx
-------------------------------------
c/s
GEONOVA EXPLORATIONS INC.
Per: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
c/s
MSV RESOURCES INC.
Per: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
c/s
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EXHIBIT 1
TO THE MERGER AGREEMENT
DATED AS OF MAY 7, 2001
BETWEEN XXXXXXXX RESOURCES INC.,
GEONOVA EXPLORATIONS INC. AND MSV RESOURCES INC.
PLAN OF ARRANGEMENT UNDER SECTION 192
OF THE CANADA BUSINESS CORPORATIONS ACT
ARTICLE ONE
DEFINITIONS AND INTERPRETATION
SECTION 1.01 DEFINITIONS
In this Plan of Arrangement, unless there is something in the
subject matter or context inconsistent therewith, the following capitalized
words and terms shall have the following meanings:
(a) "Xxxxxxxx" means Xxxxxxxx Resources Inc.;
(b) "Xxxxxxxx Shares" means the common shares which Xxxxxxxx is
authorized to issue, as the same are constituted on the date hereof;
(c) "CBCA" means the Canada Business Corporations Act, R.S.C.
1985, c. C-44, or its successor, as amended from time to time.
(d) "Depositary" means Computershare Trust Company of Canada;
(e) "Effective Date" means the concurrent date set forth in the
certificate of arrangement issued by the Director under the CBCA to each of the
Participating Corporations giving effect to this Plan of Arrangement and on the
certificate of amendment issued by the Inspector General of Financial
Institutions under the Quebec Act giving effect to the Quebec Arrangement;
(f) "Effective Time" means 12:01 a.m. on the Effective Date;
(g) "GeoNova" means GeoNova Explorations Inc.;
(h) "GeoNova Shares" means the common shares which GeoNova is
authorized to issue, as the same are constituted on the date hereof;
(i) "GeoNova Transaction Options" means the obligations of GeoNova
to issue up to 14,666,667 GeoNova Shares in connection with the Bachelor Lake
transaction described under the heading "Bachelor Lake Property" and in
connection with the flow-through financing described under the heading "Material
Contracts" in the section entitled "Information Concerning GeoNova" in the Proxy
Circular;
(j) "Merger" means the transactions contemplated by the Merger
Agreement to effect the merger of Xxxxxxxx, GeoNova and MSV by means of this
Plan of Arrangement and the Quebec Arrangement;
(k) "Merger Agreement" means the Merger agreement dated as of May 7,
2001 between the Participating Corporations and MSV to which this Plan of
Arrangement is attached as Exhibit 1;
(l) "MSV" means MSV Resources Inc.;
(m) "Participating Corporations" means Xxxxxxxx and GeoNova
collectively;
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(n) "Proxy Circular" means the joint management proxy circular of
Xxxxxxxx, GeoNova and MSV relating to the Merger dated as of May 10, 2001;
(o) "Quebec Arrangement" means the plan of arrangement between MSV
and its shareholders attached as Exhibit II to the Merger Agreement;
(p) "Repadre" means Repadre Capital Corporation; and
(q) "Repadre Royalty" means the net smelter royalty payable to
Repadre by Xxxxxxxx in connection with production from the Xxx Xxxx Mine as
described under "Business of Xxxxxxxx - Net Smelter Royalty" in the Proxy
Circular.
SECTION 1.02 INTERPRETATION NOT AFFECTED BY HEADINGS
The division of this Plan of Arrangement into articles,
sections, subsections, paragraphs and subparagraphs and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Plan of Arrangement. Unless otherwise
specifically indicated, the terms "this Plan of Arrangement", "hereof',
"herein", "hereunder" and similar expressions refer to this Plan of Arrangement
as a whole and not to any particular article, section, subsection, paragraph or
subparagraph and include any agreement or instrument supplementary or ancillary
hereto.
SECTION 1.03 NUMBER AND GENDER
Unless the context otherwise requires, words importing the
singular number only shall include the plural and vice versa, words importing
the use of either gender shall include both genders and neuter and words
importing persons shall include firms and corporations.
SECTION 1.04 MEANING
Words and phrases used herein and defined in the CBCA shall have
the same meaning herein as in the CBCA unless the context otherwise requires.
ARTICLE TWO
PLAN OF ARRANGEMENT
SECTION 2.01 ARRANGEMENT
This Plan of Arrangement for Xxxxxxxx and GeoNova is made in
accordance with Section 192 of the CBCA and pursuant to the provisions of the
Merger Agreement.
SECTION 2.02 EFFECTIVE TIME
This Plan of Arrangement shall be effective, and all of the
transactions contemplated in this Article Two shall occur simultaneously, at the
Effective Time.
SECTION 2.03 SHARE EXCHANGES AND RESERVATIONS
(a) Subject to Section 3.02 hereof, the holders of GeoNova Shares
exchange their shares for Xxxxxxxx Shares on the basis of one Xxxxxxxx Share for
every 10 GeoNova Shares.
(b) Subject to Section 3.02 hereof, up to 1,466,667 Xxxxxxxx Shares
are reserved for issue to the holders of GeoNova Transaction Options in exchange
for the GeoNova Shares that would otherwise be issued pursuant to the GeoNova
Transaction Options on the basis of one Xxxxxxxx Share for every 10 such GeoNova
Shares;
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(c) 800,000 Xxxxxxxx Shares are issued to Repadre in exchange for
the reduction of the Repadre Royalty; and
(d) the number of Xxxxxxxx Shares reserved for issue under its
Employee Incentive Plan and Directors' Stock Option Plan is increased by
1,024,000 and 500,000 respectively.
SECTION 2.04 CHANGE OF HEAD OFFICE
The location of the registered office of Xxxxxxxx is changed to
Montreal, Quebec.
ARTICLE THREE
SHARE CERTIFICATES AND FRACTIONAL SHARES
SECTION 3.01 SHARE CERTIFICATES
Certificates for the appropriate number of Xxxxxxxx Shares will
be issued to former holders of GeoNova Shares and MSV Shares in accordance with
the provisions of Section 2.03 hereof against deposit of the certificates
representing the GeoNova Shares and MSV Shares, respectively, with the
Depositary.
SECTION 3.02 FRACTIONAL SHARES
No fractions of Xxxxxxxx Shares will be issued in connection
with any of the share exchanges contemplated in this Plan of Arrangement.
Accordingly, the number of Xxxxxxxx Shares to be issued to any holder on such
exchange will be rounded down to the next lower whole number of Xxxxxxxx Shares
and such holder will not be entitled to any payment or other compensation in
respect of any such fraction.
ARTICLE FOUR
RIGHTS OF DISSENT
SECTION 4.01 RIGHTS OF DISSENT
Holders of Xxxxxxxx Shares and GeoNova Shares may exercise
rights of dissent in respect of the Merger pursuant to and in the manner set
forth in Section 190 of the CBCA.
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EXHIBIT II
TO THE MERGER AGREEMENT DATED AS OF MAY 7, 2001
BETWEEN XXXXXXXX RESOURCES INC., GEONOVA EXPLORATIONS INC.
AND MSV RESOURCES INC.
THE QUEBEC ARRANGEMENT
ARRANGEMENT BY-LAW
By-Law No. 2001-2 relating to the Arrangement proposed by MSV Resources Inc.
("Company") pursuant to section 49 and 123.107 of the Companies Act (Quebec).
ARTICLE ONE
INTERPRETATION
SECTION 1.01 INTERPRETATION
(a) "Articles of Amendment" means the Articles of Amendment of the
Company in respect of the Arrangement annexed hereto as Schedule "A".
(b) "Xxxxxxxx" means Xxxxxxxx Resources Inc.
(c) "GeoNova" means GeoNova Explorations Inc.
(d) "MSV" means MSV Resources Inc."
(e) "Effective Date" means the date shown on the Certificate of
Amendment to be issued by the Inspector General of Financial Institutions
pursuant to section 123.107 of the Companies Act (Quebec) in respect of the
Articles of Amendment and the Arrangement as set forth in By-Law No. 2001-2.
(f) "Effective Time" means 12:01 a.m. on the Effective Date;
(g) "Information Circular" means the joint management proxy circular
dated May 10, 2001 in respect of the annual and special general meeting of the
Shareholders and shareholder meetings of Xxxxxxxx and GeoNova to be held on
Wednesday, June 13, 2001 convened to approve this Arrangement.
(h) "Merger Agreement" means that the agreement made as of May 7,
2001 between Xxxxxxxx, GeoNova and the Company.
(i) "MSV Transaction Options" means those contractual rights to
acquire MSV Shares described under the headings "Background of MSV", "Copper
Rand 5000 Project Financing" and "Secondary Financing" in the section entitled
"Information Concerning MSV" in the Proxy Circular.
(j) "MSV Shares" means common shares in the share capital of the
Company.
(k) "Shareholder" means a registered holder of MSV Shares.
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ARTICLE TWO
THE ARRANGEMENT
SECTION 2.01 THE ARRANGEMENT
(a) The Articles of Incorporation of the Company shall be amended as
set forth in Schedule A hereto to permit the exchange of MSV Shares for Xxxxxxxx
Shares as described in section 2.01(b) below.
(b) All MSV Shareholders will exchange with Xxxxxxxx all of their
MSV Shares for Xxxxxxxx Shares on the basis of one Xxxxxxxx Share for every 4.1
MSV Shares.
(c) The holders of MSV Transaction Options will be entitled to
receive Xxxxxxxx Shares in lieu of MSV Shares on the basis of one Xxxxxxxx Share
for every 4.1 MSV Shares.
ARTICLE THREE
EFFECTIVE DATE
SECTION 3.01 EFFECTIVE DATE
(a) This Arrangement will come into force and effect on the
Effective Date.
(b) The provisions of Article Two of this Arrangement will be deemed
to take effect on the Effective Date in the consecutive order of the sections
set out in Article Two and each section will be deemed to be completed prior to
the commencement of the provisions of the next section.
ARTICLE FOUR
CERTIFICATES
SECTION 4.01 CERTIFICATES
(a) As soon as practicable following the Effective Date, upon
surrender to the Depositary for cancellation of a certificate which immediately
prior to the Effective Date represented one or more MSV Shares, the holder of
such surrendered certificate will be entitled to receive a certificate
representing that number of Xxxxxxxx Shares which such holder has the right to
receive pursuant to the Arrangement.
(b) No fractional Xxxxxxxx Shares will be issued in exchange for MSV
Shares. The number of Xxxxxxxx Shares to be issued will be rounded down to the
next lower whole number of Xxxxxxxx Shares and no holder of MSV Shares shall be
entitled to any payment or other compensation in respect of such fractions.
ARTICLE FIVE
OTHER PROVISIONS BETWEEN
XXXXXXXX AND THE COMPANY
SECTION 5.01 OTHER PROVISIONS BETWEEN XXXXXXXX AND THE COMPANY
(a) Notwithstanding that this By-Law has been confirmed by
Shareholders of the Company or that this Arrangement has been sanctioned by the
Superior Court of Quebec, the directors of the Company are hereby authorized and
empowered to not proceed with this Arrangement at any time prior to the issue of
a certificate of amendment giving effect to this Arrangement, without the
further approval of the Shareholders, but only if the Merger Agreement is
terminated in accordance with its terms.
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(b) Each director of the Company is hereby authorized, acting for,
in the name of and on behalf of the Company, to execute and to deliver articles
of amendment, and such other documents as are necessary or desirable, to the
Inspector General of Financial Institutions under the Companies Act (Quebec) for
filing, to give effect to this By-Law.
(c) Each officer and director of the Company is hereby authorized,
acting for, in the name of and on behalf of the Company, to execute or cause to
be executed, and to deliver or to cause to be delivered, all such documents,
agreements and instruments, and to do or to cause to be done all such other acts
and things, as such officer or director determines to be necessary or desirable
in order to carry out the intent of the foregoing sections of this By-Law and
the matters authorized thereby, such determination to be conclusively evidenced
by the execution and delivery of such document, agreement or instrument or the
doing of any such act or thing.
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SCHEDULE A TO THE ARRANGEMENT BY-LAW
The Articles of the Company are amended as follows by adding the following
provisions:
SPECIAL PROVISIONS
1. To confirm the arrangement set out in By-Law No. 2001-2 which is
attached hereto.
2. (a) for purposes of paragraphs (b), (c) and (d) below:
(i) "Arrangement" means the Arrangement described in By-Law
No. 2001-2 of the Company.
(ii) "Effective Date" means the date shown on the Certificate
of Amendment to be issued by the Inspector General of
Financial Institutions pursuant to section 123.109 of
the Companies Act (Quebec) in respect of the Arrangement
and these Articles of Amendment;
(iii) "Information Circular" means the joint management proxy
circular dated May 10, 2001 in respect of the special
and general meeting of the Shareholders to be held on
Wednesday, June 13, 2001 to approve the Arrangement;
(iv) "Merger Agreement" means that certain merger agreement
dated May 7, 2001 between Xxxxxxxx, GeoNova Explorations
Inc. and the Company;
(v) "Xxxxxxxx Shares" means the common shares in the share
capital of Xxxxxxxx;
(vi) "Xxxxxxxx" means Xxxxxxxx Resources Inc;
(vii) "MSV Shares" means the common shares in the capital of
the Company;
(b) The MSV Shares shall be exchangeable for Xxxxxxxx Shares on the
basis of 4.1 MSV Shares for each Xxxxxxxx Share provided that no
fractional Xxxxxxxx Shares will be issued on such exchange but
rather the number of Xxxxxxxx Shares to be issued will be
rounded down to the next lower whole number of Xxxxxxxx Shares
and no holder of MSV Shares shall be entitled to any payment or
other compensation in respect of such fractions.
(b) All Shareholders shall exchange all of their MSV Shares for
Xxxxxxxx Shares on the basis of 4.1 MSV Shares for each Xxxxxxxx
Share as contemplated in section 2.01(b) of By-Law No. 2001-2,
the whole as contemplated in By-Law 2001-2.
(c) The provisions hereof shall be deemed to take effect on the
Effective Date in the consecutive order of the paragraphs set
forth above and each paragraph shall be deemed to be completed
prior to the provisions of the next paragraph taking effect.
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