CDE 8-K
Coeur Mining, Inc. (CDE)
8-K
2025-11-03
For: 2025-11-02
View Original
Added on
April 11, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 3, 2025 (November 2, 2025 )
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction
of incorporation or organization)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices)
(312 ) 489-5800
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions
A.2 below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01
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Entry into a Material Definitive Agreement.
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On November 2, 2025, Coeur Mining, Inc., a Delaware corporation (“Coeur”), New Gold Inc., a corporation existing under the laws of the Province of British Columbia, Canada (“New Gold”), and
1561611 B.C. LTD., a corporation organized and existing under the laws of the Province of British Columbia, Canada and a wholly owned subsidiary of Coeur (“Canadian Sub”), entered into an Arrangement Agreement (the “Arrangement Agreement”),
pursuant to which, on the terms and subject to the conditions set forth therein, Coeur has agreed to acquire New Gold in a stock-for-stock transaction, subject to satisfaction of certain closing conditions. The transaction will be effected by
way of a plan of arrangement under the Business Corporations Act (British Columbia) (the “Plan of Arrangement”).
Consideration
On the terms and subject to the conditions set forth in the Arrangement Agreement, at the times contemplated in the Plan of Arrangement:
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Canadian Sub will acquire all of the issued and outstanding common shares of New Gold (the “New Gold Common Shares”),
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each New Gold shareholder (other than in respect to New Gold Common Shares held by Coeur or Canadian Sub, and New Gold shareholders who validly exercise dissent rights in connection with the
Arrangement (as defined below)) will receive 0.4959 shares of common stock (the “Exchange Ratio”), par value $0.01 per share, of Coeur (the “Coeur Common Stock”), in exchange for each New Gold Common Share they hold (such transaction,
the “Arrangement”),
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each option to purchase New Gold Common Shares (a “New Gold Option”) outstanding immediately prior to the effective time of the Arrangement (the “Effective Time”) shall be fully vested and cancelled in
exchange for an amount equal to (a) the product of (i) the number of New Gold common shares for which such New Gold Options may be exercised and (ii) the volume weighted average share price of the New Gold Common Shares on the Toronto
Stock Exchange (during continuous trading hours) for the five trading days ending on the third business day prior to the Closing date less (b) its exercise price,
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all deferred share units of New Gold (“New Gold DSUs”) shall be fully vested in exchange for a cash payment from New Gold, to be calculated in accordance with the terms of the deferred share unit plan
of New Gold effective May 6, 2010 (except that the calculation of the amounts payable shall be determined as at the third business day prior to the Closing date),
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all performance share units of New Gold (“New Gold PSUs”) shall be fully vested in exchange for a cash payment from New Gold, to be calculated in accordance with the terms of the long term incentive
plan of New Gold effective February 19, 2025 (the “LTIP”) (except that the calculation of the amounts payable shall be determined as at the third business day prior to the Closing date) immediately prior to the Effective Time provided
that (A) the vesting multiplier applicable to all calculation periods ending on or prior to the third business day prior to the Closing date for each New Gold PSU shall be determined based on the terms of the New Gold LTIP and (B) the
vesting multiplier applicable to all calculation periods ending after the third business day prior to the Closing date for each New Gold PSU shall be (i) 100%, in the case of New Gold employees who are employed by Coeur, New Gold or any
of their respective subsidiaries following the Effective Time (“Continuing Employees”); or (ii) 150% in the case of New Gold employees whose employment with New Gold or any of its subsidiaries is terminated at or immediately prior to
the Effective Time (“Non-Continuing Employees”), and
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all restricted share units of New Gold (“New Gold RSUs”) shall be treated as follows:
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New Gold RSUs held by Non-Continuing Employees (“Accelerated RSUs”) will be fully vested pursuant to, and redeemed for cash in accordance with, the terms of the Company LTIP (except that the
calculation of the amounts payable shall be determined as at the third business day prior to the Closing date); and
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New Gold RSUs held by Continuing Employees shall be (1) amended by multiplying each such New Gold RSU by the Exchange Ratio, and thereafter, the holder thereof shall be entitled to the number of New
Gold RSUs as is equal to the product of such amendment (the “Revised New Gold RSUs”); (2) upon the vesting of such Revised New Gold RSUs following the Effective Time, each such Revised New Gold RSU shall entitle the holder thereof to
receive a payment in cash, in accordance with the terms of the New Gold LTIP, with reference to the trading price of the Coeur Shares rather than the New Gold Shares and (3) such Revised New Gold RSUs shall remain outstanding and
governed by the terms of the New Gold LTIP and any document evidencing the New Gold RSUs (subject to amendments as contemplated in the Arrangement Agreement).
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Governance
The Arrangement Agreement provides that, on the terms and subject to the conditions set forth therein, at the Effective Time, two members of the New Gold Board of Directors will join the
Coeur Board of Directors (the “New Gold Director Nominees”), and at the next annual general meeting of Coeur held to consider the election of directors that occurs following the Effective Time, the New Gold Director Nominees shall be nominated
by Coeur for election as a director of Coeur.
Conditions to the Arrangement
The closing of the Arrangement (the “Closing”) is subject to certain conditions, including, among others, (i) the approval of the Arrangement by at least 66⅔% of the votes cast by New Gold shareholders, approval by at least 66⅔% of the votes cast by the shareholders of New Gold, and, to the extent required by
Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the Canadian Securities
Administrators, a simple majority of the votes cast by New Gold shareholders, excluding New Gold Common Shares held by persons required to be excluded under applicable Canadian securities laws (collectively, the “New Gold Shareholder
Approval”), at a meeting of New Gold shareholders (the “New Gold Shareholder Meeting”), (ii) the approval of (A) the issuance of shares of Coeur Common Stock in connection with the Arrangement (the “Stock Issuance”) and (B) the amendment of
the Coeur certificate of incorporation (the “Coeur Charter”) to increase the number of authorized shares of Coeur Common Stock (the “Charter Amendment”) (collectively, the “Coeur Stockholder Approval”), in each case by the affirmative vote
Coeur stockholders required by the Coeur Charter and the Delaware General Corporation Law at a meeting of Coeur stockholders (the “Coeur Stockholder Meeting”), (iii) the approval of the Arrangement by the Supreme Court of British Columbia on
terms consistent with the Arrangement Agreement and otherwise reasonably satisfactory to the parties, (iv) the authorization for listing of the Coeur Common Stock issuable pursuant to the Arrangement Agreement on the New York Stock Exchange
and Toronto Stock Exchange, (v) the absence of any law or order prohibiting the consummation of the Arrangement and (vi) the receipt of regulatory approvals from the National Antirust Commission of Mexico (Comisión Nacional Antimonopolio) and under the Competition Act (Canada) and Investment Canada Act (Canada)
(collectively, the “Regulatory Approvals”).
The obligation of each party to consummate the Arrangement is also conditioned upon (i) the other party’s representations and warranties being true and correct (generally subject to certain
materiality thresholds), (ii) the other party having performed in all material respects its obligations under the Arrangement Agreement, and (iii) the absence of material adverse effect in respect of the other party.
Termination Rights
The Arrangement Agreement contains certain termination rights for both Coeur and New Gold, including, among others, (i) mutual consent by Coeur and New Gold, (ii) by either Coeur or New Gold
if (A) the Arrangement shall not have been consummated on or prior to May 15, 2026 (which date, if the Regulatory Approvals have not been obtained and all other conditions to the Closing have been satisfied or waived on such date, will be
automatically extended to August 15, 2026), or (B) a final non-appealable law has been enacted, made or enforced prohibiting the Arrangement, (iii) by either Coeur or New Gold if either the New Gold Shareholder Approval or Coeur Stockholder
Approval shall not have been obtained, (iv) by a party if the other party breaches any of its representations, warranties or covenants in the Arrangement Agreement in a manner that would cause the corresponding condition to not be satisfied,
subject to certain conditions, (v) by a party if the other party’s board of directors changes its recommendation with respect to the Arrangement, (vi) by a party if the other party materially breaches its non-solicitation covenants under the
Arrangement Agreement or (vii) by a party in order for such party to enter into a definitive agreement with respect to a superior competing business combination transaction (provided that such party has not materially breached the applicable
non-solicitation restrictions).
If the Arrangement Agreement is terminated in certain specified circumstances, Coeur or New Gold would be required to pay the other party a termination fee of $413,705,000 and $254,725,000,
respectively. In addition, in certain circumstances, the terminating party shall reimburse the other party in respect of the reasonable and documented expenses of the such party’s third party representatives incurred in respect of the
Arrangement and the Arrangement Agreement up to a maximum amount of $33,965,000.
Other Terms of the Arrangement Agreement
Coeur and New Gold each have made customary representations, warranties and covenants in the Arrangement Agreement for a transaction of this nature, in each case generally subject to
customary materiality qualifiers. Among other things, each party has agreed, subject to certain exceptions, (i) to conduct its business in the ordinary course, from the date of the Arrangement Agreement until the earlier of the Effective Time
and the termination of the Arrangement Agreement, and not to take certain actions prior to the Effective Time without the prior written consent of the other party, (ii) not to solicit alternative business combination transactions and (iii) to
convene meetings of its respective shareholders for the purpose of obtaining the Coeur Stockholder Approval or New Gold Shareholder Approval, as applicable, and recommend to its respective shareholders to approve the Stock Issuance and Charter
Amendment or the Arrangement, as applicable.
The foregoing summary of the Arrangement Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the Arrangement Agreement, which
is attached hereto as Exhibit 2.1 and incorporated herein by reference.
The Arrangement Agreement and the above description of the Arrangement Agreement have been included to provide investors and security holders with information regarding the terms of the
Arrangement Agreement. They are not intended to provide any other factual information about Coeur, New Gold or their respective subsidiaries. The representations, warranties and covenants contained in the Arrangement Agreement were made only
for purposes of the Arrangement Agreement and as of specific dates, were solely for the benefit of the parties to the Arrangement Agreement, and may be subject to limitations agreed upon by the parties, including being qualified by confidential
disclosures made by each contracting party to the other for the purposes of allocating contractual risk between them that differ from those applicable to investors. Investors should not rely on the representations, warranties and covenants or
any description thereof as characterizations of the actual state of facts or condition of Coeur, New Gold or any of their respective subsidiaries. Moreover, information concerning the subject matter of the representations, warranties and
covenants may change after the date of the Arrangement Agreement, which subsequent information may or may not be fully reflected in public disclosures by Coeur or New Gold.
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Item 3.02
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Unregistered Sales of Equity Securities.
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The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K with respect to the Stock Issuance is incorporated by reference herein. The securities to be issued pursuant to
the Arrangement Agreement will be issued in reliance upon Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”), which exempts from the registration requirements under the Securities Act any securities that are
issued in exchange for one or more bona fide outstanding securities where the terms and conditions of such issuance and exchange are approved, after a hearing upon the fairness of such terms and condition at which all persons to whom it is
proposed to issue securities in such exchange shall have the right to appear, by any court expressly authorized by law to grant such approval.
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Item 8.01
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Other Events.
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Voting Agreements
In connection with the execution of the Arrangement Agreement, Coeur has entered into a voting and support agreement (each, a “Coeur Voting Agreement”) with each of the directors and certain senior officers of New
Gold, who collectively hold approximately 0.1% of the outstanding New Gold Shares, and New Gold has entered into a voting and support agreement (each, a “New Gold Voting Agreement” and together with the Coeur Voting Agreements, the “Voting
Agreements”) with each of the directors and certain senior officers of Coeur, who collectively hold approximately 1.5% of the outstanding shares of Coeur Common Stock. Each Voting Agreement provides that the signatories thereto will, subject to
limited exceptions, vote their shares in favor of adopting the Arrangement Agreement or approving the Stock Issuance and Charter Amendment, as applicable, and against any alternative business combination
transaction. Each Voting Agreement terminates upon the earliest to occur of (a) the Effective Time, (b) the date the Arrangement Agreement is terminated in accordance with its terms and (c) the completion of the Coeur Stockholders
Meeting or New Gold Shareholders Meeting, as applicable.
The foregoing summary of the Voting Agreements does not purport to be complete and is subject to, and is qualified in its entirety by, the full text of the form of Voting Agreement, which is
attached hereto as Exhibit 99.1 and incorporated herein by reference.
Press Release
On November 3, 2025, Coeur and New Gold jointly issued a press release in connection with the Arrangement. A copy of the press release is attached hereto as Exhibit 99.2
and is incorporated by reference herein.
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Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibits.
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Exhibit
No.
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Description
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Arrangement Agreement, dated as of November 2, 2025 by and among Coeur Mining, Inc., New Gold Inc. and 1561611 B.C. LTD
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Form of Coeur Voting Agreement
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Press Release, dated November 3, 2025 jointly issued by Coeur Mining, Inc. and New Gold Inc.
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document).
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*
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Schedules and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. Coeur agrees to furnish a supplemental copy of any omitted schedule or attachment to the SEC upon request; provided, that Coeur may
request confidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act for any schedules and similar attachments so furnished.
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No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to the
Arrangement or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any
such jurisdiction.
Important Additional Information
In connection with the Arrangement, Coeur and New Gold intend to file materials with the SEC and on SEDAR+, as applicable. Coeur intends to file a definitive proxy statement on Schedule 14A
(the “Proxy Statement”) with the Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies to obtain Coeur Stockholder Approval, and New Gold intends to file a notice of the New Gold Shareholder Meeting and
accompanying management information circular and proxy statement (the “Circular”) with the TSX and on SEDAR+ and with the SEC in connection with the solicitation of proxies to obtain New Gold shareholder approval of the Arrangement. After the
Proxy Statement is cleared by the SEC, Coeur intends to mail a definitive Proxy Statement to the stockholders of Coeur. This communication is not a substitute for the Proxy Statement, the Circular or for any other document that Coeur or New
Gold may file with the SEC or on SEDAR+ and/or send to Coeur stockholders and/or New Gold’s shareholders in connection with the Arrangement. INVESTORS AND SECURITY HOLDERS OF COEUR AND NEW GOLD ARE URGED TO CAREFULLY AND THOROUGHLY READ THE
PROXY STATEMENT AND THE CIRCULAR, RESPECTIVELY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY COEUR AND/OR NEW GOLD WITH THE SEC OR ON SEDAR+, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT COEUR, NEW GOLD, THE ARRANGEMENT, THE RISKS RELATED THERETO AND RELATED MATTERS.
Stockholders of Coeur and shareholders of New Gold will be able to obtain free copies of the Proxy Statement and the Circular, as each may be amended from time to time, and other relevant
documents filed by Coeur and/or New Gold with the SEC or on SEDAR+ (when they become available) through the website maintained by the SEC at www.sec.gov or on SEDAR+ at www.sedarplus.ca, as applicable. Copies of documents filed with the SEC by
Coeur will be available free of charge from Coeur’s website at www.coeur.com under the “Investors” tab or by contacting Coeur’s Investor Relations Department at (312) 489-5800 or [email protected]. Copies of documents filed with the SEC or on
SEDAR+ by New Gold will be available free of charge from New Gold’s website at www.newgold.com under the “Investors” tab or by contacting New Gold’s Investor Relations Department at 416 324-6015.
Cautionary Note to U.S. Investors
Coeur’s public disclosures are governed by the U.S. Securities Exchange Act of 1934, as amended, including Regulation S-K 1300 thereunder, whereas New Gold discloses estimates of “measured,”
“indicated,” and “inferred” mineral resources as such terms are used in Canada’s National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). Although S-K 1300 and NI 43-101
have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported, they at times embody different approaches or definitions. Consequently, investors are cautioned that public disclosures by New Gold
prepared in accordance with NI 43-101 may not be comparable to similar information made public by companies, including Coeur, subject to S-K 1300 and the other reporting and disclosure requirements under the U.S. federal securities laws and the
rules and regulations thereunder. The scientific and technical information concerning Coeur’s mineral projects in this communication have been reviewed and approved by a “qualified person” under Item 1300 of SEC Regulation S-K, namely Coeur’s
Vice President, Technical Services, Christopher Pascoe. The New Gold “qualified person” under NI 43-101 for this communication is Travis Murphy, Vice President, Operations for New Gold, who has reviewed and approved its contents.
Participants in the Solicitation
Coeur, New Gold and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be
participants in the solicitation of proxies from Coeur’s stockholders and New Gold’s shareholders in connection with the Arrangement. Information regarding the executive officers and directors of Coeur is included in its definitive proxy
statement for its 2025 annual meeting under the headings “Proposal No. 1 – Election of Directors”, “Information about our Executive Officers”, “Compensation Discussion and Analysis”, and “Director Compensation”, which was filed with the SEC
on April 2, 2025 and is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0000215466/000114036125011870/ny20041389x1_def14a.htm. Information regarding the directors and certain executive officers of New Gold is included in its
information circular and proxy statement for its 2025 annual meeting under the headings “Statement of Executive Compensation” and “Compensation Discussion and Analysis”, which was filed on SEDAR+ on March 31, 2025 and is available at https://www.sedarplus.ca/csa-party/records/document.html?id=830b181741852e3fbae8f0bbde1c5d1322916fbc490192f57cd368fe27d666af. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by security holdings or otherwise, will be set forth in the Proxy Statement, the Circular
and other materials when they are filed with the SEC or on SEDAR+ in connection with the Arrangement. Free copies of these documents may be obtained as described in the paragraphs above.
Forward-Looking Statements and Cautionary Statements
Certain statements in this document concerning the proposed Arrangement, including any statements regarding the expected timetable for completing the Arrangement, the results, effects,
benefits and synergies of the Arrangement, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Coeur’s or New Gold’s future expectations, beliefs, plans,
objectives, financial conditions, assumptions or future events or performance that are not historical facts are “forward-looking” statements based on assumptions currently believed to be valid. Forward-looking statements are all statements
other than statements of historical facts. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,”
“may,” “might,” “anticipate,” “likely” “plan,” “positioned,” “strategy,” and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking
statements include, but are not limited to, statements regarding Coeur’s or New Gold’s plans and expectations with respect to the proposed Arrangement and the anticipated impact of the proposed Arrangement on the combined company’s results of
operations, financial position, growth opportunities and competitive position, including maintaining current Coeur and New Gold management, strategies and plans and integration. The forward-looking statements are intended to be subject to the
safe harbor provided by Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws.
These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, the
possibility that shareholders of New Gold may not approve the Arrangement or stockholders of Coeur may not approve the Stock Issuance or the Charter Amendment; the risk that any other condition to Closing may not be satisfied; the risk that the
Closing might be delayed or not occur at all; the anticipated timing of mailing proxy statements and circulars regarding the Arrangement; the risk that the either Coeur or New Gold may terminate the Arrangement Agreement and either Coeur or New
Gold is required to pay a termination fee to the other party; potential adverse reactions or changes to business or employee relationships of Coeur or New Gold, including those resulting from the announcement or completion of the Arrangement;
the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Coeur and New Gold; the effects of the business combination of Coeur and New Gold, including the combined
company’s future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital markets and the ability of the
combined company to finance operations in the manner expected; the risk that Coeur or New Gold may not receive the required stock exchange and regulatory approvals of the Arrangement; the expected listing of shares on the New York Stock
Exchange and Toronto Stock Exchange; the risk of any litigation relating to the proposed Arrangement; the risk of changes in governmental regulations or enforcement practices; the effects of commodity prices, life of mine estimates; the timing
and amount of estimated future production; the risks of mining activities; and the fact that operating costs and business disruption may be greater than expected following the public announcement or consummation of the Arrangement. Expectations
regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for the combined company’s operations, gold and silver market conditions, legal, economic and regulatory conditions, and
environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Coeur’s Annual Report on Form 10-K for the year ended December 31, 2024, and
subsequent Quarterly Reports on Form 10-Q, which are on file with the SEC and available from Coeur’s website at www. coeur.com under the “Investors” tab, and in other documents Coeur files with the SEC and in New Gold’s annual information form
for the year ended December 31, 2024, which is on file with the SEC and on SEDAR+ and available from New Gold’s website at https://newgold.com under the “Investors” tab, and in other documents New Gold files with the SEC or on SEDAR+.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Coeur nor New Gold assumes any obligation to update
forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by applicable securities laws. As
forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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COEUR MINING, INC.
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Date: November 3, 2025
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By: /s/ Casey M. Nault
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Name: Casey M. Nault
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Title: Senior Vice President, General Counsel and Secretary
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Exhibit 2.1
Execution Copy
AMONG
COEUR MINING, INC.
AND
NEW GOLD INC.
AND
1561611 B.C. LTD.
November 2, 2025
TABLE OF CONTENTS
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Page
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ARTICLE 1 INTERPRETATION
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2
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1.1
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Definitions
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2
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1.2
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Interpretation Not Affected by Headings
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25
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1.3
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Number and Gender
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26
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1.4
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Calculation of Time
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26
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1.5
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Date for Any Action
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26
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1.6
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Currency
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26
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1.7
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Accounting Matters
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26
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1.8
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Statutory References
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26
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1.9
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Knowledge
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27
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1.10
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Company Disclosure Letter
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27
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1.11
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Parent Disclosure Letter
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27
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1.12
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Schedules
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27
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ARTICLE 2 THE ARRANGEMENT
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27
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2.1
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Arrangement
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27
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2.2
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Approvals
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28
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2.3
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Interim Order
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29
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2.4
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Company Meeting
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30
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2.5
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Parent Meeting
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32
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2.6
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Preparation of Company Circular and the Parent Proxy Statement
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34
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2.7
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Final Order
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37
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2.8
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Court Proceedings
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37
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2.9
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U.S. Securities Law Matters
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38
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2.10
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Treatment of Company Incentive Awards
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39
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2.11
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Effective Date
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40
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2.12
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Payment of Consideration
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41
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2.13
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Announcement and Shareholder Communications
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41
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2.14
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Withholding Taxes
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42
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2.15
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U.S. Tax Matters
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42
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2.16
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List of Shareholders
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43
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2.17
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Governance
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43
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ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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43
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3.1
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Representations and Warranties
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43
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3.2
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Survival of Representations and Warranties
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71
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ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER
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72
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4.1
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Representations and Warranties
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72
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4.2
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Survival of Representations and Warranties
|
96
|
|
- 2 -
|
ARTICLE 5 COVENANTS
|
97
|
||
|
5.1
|
Covenants of the Company Regarding the Conduct of Business
|
97
|
|
|
5.2
|
Covenants of the Company Relating to the Arrangement
|
102
|
|
|
5.3
|
Covenants of the Company Regarding the TSX and NYSE American Delisting
|
104
|
|
|
5.4
|
Covenants of the Parent Regarding the Conduct of Business
|
104
|
|
|
5.5
|
Covenants Relating to the Consideration Shares
|
107
|
|
|
5.6
|
Covenants Relating to TSX Listing
|
107
|
|
|
5.7
|
Covenants of the Parent Regarding Blue-Sky Laws
|
107
|
|
|
5.8
|
Covenants of the Parent Relating to the Arrangement
|
107
|
|
|
5.9
|
Indebtedness
|
108
|
|
|
5.10
|
Regulatory Approvals
|
109
|
|
|
5.11
|
Resignations
|
112
|
|
|
5.12
|
Employee Matters
|
113
|
|
|
5.13
|
Pre-Acquisition Reorganization
|
114
|
|
|
5.14
|
Filings
|
115
|
|
|
5.15
|
Access to Information; Confidentiality
|
116
|
|
|
5.16
|
Insurance and Indemnification
|
116
|
|
|
5.17
|
Parent Charter Amendment
|
117
|
|
|
ARTICLE 6 CONDITIONS
|
117
|
||
|
6.1
|
Mutual Conditions Precedent
|
117
|
|
|
6.2
|
Additional Conditions Precedent to the Obligations of the Parent and Purchaser
|
118
|
|
|
6.3
|
Additional Conditions Precedent to the Obligations of the Company
|
119
|
|
|
6.4
|
Satisfaction of Conditions
|
120
|
|
|
ARTICLE 7 ADDITIONAL AGREEMENTS OF THE COMPANY REGARDING ACQUISITION PROPOSALS
|
120
|
||
|
7.1
|
Non-Solicitation by the Company
|
120
|
|
|
7.2
|
Notification of Acquisition Proposals
|
122
|
|
|
7.3
|
Responding to Acquisition Proposals
|
123
|
|
|
7.4
|
Superior Proposals and Right to Match
|
123
|
|
|
ARTICLE 8 ADDITIONAL AGREEMENTS OF THE PARENT REGARDING ACQUISITION PROPOSALS
|
125
|
||
|
8.1
|
Non-Solicitation by the Parent
|
125
|
|
|
8.2
|
Notification of Acquisition Proposals
|
127
|
|
|
8.3
|
Responding to Acquisition Proposals
|
127
|
|
|
8.4
|
Superior Proposals and Right to Match
|
128
|
|
|
ARTICLE 9 TERM, TERMINATION, AMENDMENT AND WAIVER
|
130
|
||
|
9.1
|
Term
|
130
|
|
|
9.2
|
Termination
|
130
|
|
|
9.3
|
Notice and Cure
|
133
|
|
|
9.4
|
Termination Payments
|
133
|
|
|
9.5
|
Amendment
|
137
|
|
|
9.6
|
Waiver
|
138
|
|
- 3 -
|
ARTICLE 10 GENERAL PROVISIONS
|
138
|
||
|
10.1
|
Privacy
|
138
|
|
|
10.2
|
Notices
|
138
|
|
|
10.3
|
Governing Law; Waiver of Jury Trial
|
140
|
|
|
10.4
|
Injunctive Relief
|
140
|
|
|
10.5
|
Entire Agreement, Binding Effect
|
140
|
|
|
10.6
|
No Liability
|
140
|
|
|
10.7
|
Further Assurances
|
141
|
|
|
10.8
|
Assignment and Enurement
|
141
|
|
|
10.9
|
Severability
|
141
|
|
|
10.10
|
No Third Party Beneficiaries
|
141
|
|
|
10.11
|
Counterparts, Execution
|
142
|
|
|
Schedules:
|
||
|
Schedule A
|
-
|
Plan of Arrangement
|
|
Schedule B
|
-
|
Arrangement Resolution
|
|
Schedule C
|
-
|
Form of Parent Charter Amendment
|
|
Schedule D
|
-
|
Form of Resignation and Mutual Release
|
|
Schedule E
|
-
|
Form of Company Voting Agreement
|
|
Schedule F
|
-
|
Form of Parent Voting Agreement
|
ARRANGEMENT AGREEMENT
THIS ARRANGEMENT AGREEMENT
dated November 2, 2025,
BY AND AMONG:
- and -
1561611 B.C. LTD., a
corporation existing under the laws of the Province of British Columbia (“Purchaser”),
- and -
NEW GOLD INC., a corporation existing under the laws of the Province of British Columbia (the “Company”).
RECITALS:
| A. |
The Parent and the Purchaser desire to acquire all of the outstanding Company Shares pursuant to the Arrangement as provided in this Agreement.
|
| B. |
The Parties intend to carry out the transactions contemplated herein by way of a plan of arrangement under the provisions of the Business Corporations Act (British Columbia).
|
| C. |
The Special Committee, after receiving financial and legal advice and the Company Fairness Opinions, has unanimously determined that the Arrangement is fair to the Company
Shareholders and in the best interests of the Company and recommended to the Company Board that the Company Board (a) approve this Agreement and the Arrangement, and (b) recommend that the Company Shareholders vote in favour of the
Arrangement Resolution.
|
| D. |
The Company Board, after receiving financial and legal advice and the Company Fairness Opinions and upon the recommendation of the Special Committee, has unanimously (a)
determined that the Arrangement is fair to the Company Shareholders and in the best interests of the Company, and (b) resolved to recommend that the Company Shareholders vote in favour of the Arrangement Resolution.
|
| E. |
The Parent Board, after evaluating the Arrangement, in consultation with Parent’s management and legal and financial advisors, has unanimously (a) determined that the
Arrangement is advisable and fair to, and in the best interests of the Parent and the Parent Stockholders, (b) determined it advisable for the Parent Stockholders to approve an amendment to the certificate of incorporation of Parent,
substantially in the form of Schedule C (the “Parent Charter Amendment”) to effect an increase to the number of authorized shares of common stock, par value $0.01 per
share, of Parent (the “Parent Shares”), and (c) resolved to recommend that the Parent Stockholders vote in favor of the Parent Charter Amendment and the issuance of the
Parent Shares, pursuant to this Agreement as contemplated by, and subject to the terms and conditions set forth in, this Agreement (the “Parent Stock Issuance”).
|
- 2 -
| F. |
The Purchaser Board has unanimously determined that the Arrangement is fair and reasonable to the sole
shareholder of the Purchaser.
|
| G. |
The Parties intend that the issuance of the Consideration Shares be exempt from the registration requirements of the U.S. Securities Act pursuant to section 3(a)(10) thereof.
|
| H. |
The Parent has received duly executed Company Voting Agreements from certain of the Company Shareholders, substantially in the form of Schedule E.
|
| I. |
The Company has received duly executed Parent Voting Agreements from certain of the Parent Stockholders, substantially in the form of Schedule F.
|
THIS AGREEMENT WITNESSES THAT in consideration
of the covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties hereto covenant and agree as follows:
ARTICLE 1
| 1.1 |
Definitions
|
In this Agreement, unless the context otherwise requires:
“Accelerated RSUs” has the meaning ascribed thereto in Section 2.10(e);
“Acquisition Proposal”
means, in respect of a Party, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry from any Person or group of Persons (other than the other Party or any affiliate of the other Party), whether written or oral,
made after the date hereof, relating to: (a) any direct or indirect sale or disposition (or any joint venture, lease, license, long-term supply agreement, royalty agreement or other arrangement having the same economic
effect as a sale or disposition), in a single transaction or series of related transactions, of (i) assets of such Party and or one or more of its Subsidiaries (including shares of Subsidiaries of such Party) that,
individually or in the aggregate, (A) represent 20% or more of the consolidated assets of such Party and its Subsidiaries, taken as a whole and measured by the fair market value thereof, or (B) contribute 20% or more of the consolidated revenue of
such Party and its Subsidiaries, taken as a whole, or (ii) 20% or more of any class of voting or equity securities (including securities convertible into, or exchangeable or exercisable for such voting or equity
securities) of such Party or 20% or more of any class of voting or equity securities (including securities convertible into, or exchangeable or exercisable for such voting or equity securities) of one or more Subsidiaries of such Party whose
assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of such Party and its Subsidiaries, taken as a whole (in each case, determined based upon the most recent publicly available consolidated financial
statements of such Party); (b) any direct or indirect take-over bid, tender offer, exchange offer, treasury issuance or other transaction that, if consummated, would result in such Person or group of Persons beneficially owning 20% or more of any
class of voting or equity securities (including securities convertible into, or exchangeable or exercisable for such voting or equity securities) of such Party or 20% or more of any class of voting or equity securities (including securities
convertible into, or exchangeable or exercisable for such voting or equity securities) of one or more Subsidiaries of such Party whose assets, individually or in the aggregate, constitute 20% or more of the consolidated assets of such Party and its
Subsidiaries, taken as a whole (determined based upon the most recent publicly available consolidated financial statements of such Party); or (c) a plan of arrangement, merger, amalgamation, consolidation, share exchange, share reclassification,
business combination, reorganization, recapitalization, liquidation, dissolution, winding up or other similar transaction involving such Party and/or any of its Subsidiaries that, if consummated, would result in such Person or group of Persons
beneficially owning 20% or more of any class of voting or equity securities (including securities convertible into, or exchangeable or exercisable for such voting or equity securities) of such Party or 20% or more of any class of voting or equity
securities (including securities convertible into, or exchangeable or exercisable for such voting or equity securities) of one or more Subsidiaries of such Party whose assets, individually or in the aggregate, constitute 20% or more of the
consolidated assets of such Party and its Subsidiaries, taken as a whole (determined based upon the most recent publicly available consolidated financial statements of such Party);
- 3 -
“Acts of Adoption of Full Ownership” has the meaning ascribed thereto in
Section 3.1(w);
“affiliate” except where otherwise indicated, has the meaning ascribed
thereto in NI 45-106, in force as of the date of this Agreement;
“Agreement” means this arrangement agreement, including all Schedules
annexed hereto, together with the Company Disclosure Letter and Parent Disclosure Letter, in each case as may be amended, supplemented or otherwise modified from time to time in accordance with the terms hereof;
“Arrangement” means the arrangement
of the Company under the provisions of Part 9, Division 5 of the BCBCA on the terms and subject to the conditions set out in the Plan of Arrangement,
subject to any amendments or variations thereto made in accordance with the terms of this Agreement or the Plan of Arrangement or made at the direction of the Court in the Final Order (with the prior written consent of both the Company and the Parent, each acting reasonably);
“Arrangement Resolution” means the special resolution of the Company
Shareholders approving the Plan of Arrangement, which is to be considered and, if thought fit, passed at the Company Meeting, substantially in the form and content of Schedule B hereto;
“Authorization” means, with respect to any Person, any authorization, order,
permit, approval, grant, agreement, licence, classification, restriction, registration, consent, order, right, notification, condition, franchise, privilege, certificate, judgment, writ, injunction, award, determination, direction, decision having
the force of Law, of, from or required by any Governmental Entity having jurisdiction over such Person;
- 4 -
“business day” means any day, other than a Saturday, a Sunday or a statutory
or civic holiday in Mexico City, Mexico, New York, New York, Toronto, Ontario or Vancouver, British Columbia;
“Canadian Securities Authorities” means the Ontario Securities Commission
and any other applicable securities commissions and securities regulatory authority of a province or territory of Canada;
“Canadian Securities Laws” means the Securities Act and any other applicable
Canadian provincial or territorial securities Laws (including published policies thereunder);
“CNA” means the National Antirust Commission (Comisión Nacional
Antimonopolio) or any other governmental body that may assume its powers and responsibilities;
“CNA Approval” means the unconditional approval of the concentration
consisting in the transactions contemplated in this Agreement issued by the CNA, pursuant to the provisions set forth in the Mexican Antitrust Law;
“Commissioner” means the Commissioner of Competition appointed under
subsection 7(1) of the Competition Act and includes any Person duly authorized by the Commissioner to act on his behalf;
“Company” has the meaning ascribed thereto on the first page of this
Agreement;
“Company Applicable
Anti-Corruption Law” has the meaning ascribed thereto in Section 3.1(kk)(ii);
“Company Benefit Plans” means all employee benefit plans, including all
welfare, health, dental, vision, prescription drug, accidental death and dismemberment, critical illness, emergency travel, life, short term disability, long term disability or other medical insurance, mortgage insurance, employee loan, employee
assistance, supplemental unemployment benefit, post-employment benefit, post-retirement benefit, bonus, profit sharing, option, incentive, performance, equity, equity-based, phantom, deferred compensation, severance, retention, stay bonus, paid
time off, change of control, termination, pension, retirement, saving and supplemental retirement agreements, policies, programs, arrangements, schemes, practices or undertakings, whether funded or unfunded, insured or uninsured, registered or
unregistered, oral or written, which are maintained by or binding upon the Company or any of its Subsidiaries or for which the Company or its Subsidiaries has any liability or contingent liability for the benefit of any current or former Company
Employees or independent contractors (or, to the extent applicable, any spouses, dependents, survivors or beneficiaries of such persons) excluding any Multiemployer Plans or Statutory Plans;
“Company Board” means the board of directors of the Company as the same is
constituted from time to time;
“Company Board Recommendation” has the meaning ascribed thereto in Section
2.2(a)(iii);
- 5 -
“Company Budget” means the latest quarterly
forecast for 2025 and draft 2026 budget of the Company and its Subsidiaries, as attached as Schedule 1.1(a) to the Company Disclosure Letter (the “Draft 2026 Budget”); and once
adopted, the Company’s annual budget for 2026 (the “Final 2026 Budget”), provided that the Final 2026 Budget shall solely comprise (i) substantially similar expenditures to
those contained in the Draft 2026 Budget (provided that the budget will be updated for customary year-end cutoff adjustments); and (ii) any additional commercially reasonable expenditures related to head office general and administrative costs that
do not deviate by more than 10% from the same expenditures contained in the annual 2025 budget for the Company and its Subsidiaries;
“Company Change in Recommendation” has the meaning ascribed thereto in
Section 7.1(a)(iii);
“Company Circular” means the notice of the Company Meeting to be sent to the
Company Shareholders, and accompanying management information circular, including all schedules, appendices and exhibits thereto and enclosures therewith, and information incorporated by reference therein, in connection with the Company Meeting, as
amended, supplemented or otherwise modified from time to time in accordance with this Agreement;
“Company Credit Agreement” means the fifth amended and restated credit
agreement dated March 24, 2025 between, among others, the Company as borrower, The Bank of Nova Scotia and RBC Capital Markets (as co-lead arrangers and joint bookrunners), The Bank of Nova Scotia (as administrative agent), Royal Bank of Canada (as
syndication agent), The Toronto-Dominion Bank and Canadian Imperial Bank of Commerce (as co-documentation agents), and The Bank of Nova Scotia, Royal Bank of Canada, The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, Bank of Montreal,
Bank of America, N.A., Canada Branch, and National Bank of Canada (as lenders) and the lenders thereto from time to time;
“Company Director Nominees” has the meaning ascribed thereto in Section
2.17;
“Company Disclosure Letter” means the disclosure letter dated the date of
this Agreement (including all schedules, exhibits and appendices thereto) and executed by the Company and delivered to the Parent prior to or concurrently with the execution of this Agreement;
“Company DSU Plan” means the deferred share unit plan of the Company
effective May 6, 2010, as amended;
“Company DSUs” means the outstanding deferred share units granted under the
Company DSU Plan;
“Company Employees” means all individuals who are employed as officers or
employees by the Company and its Subsidiaries, including unionized, non-unionized, part-time, full-time, active and inactive employees, and any officers who provide services to the Company as consultants;
“Company Equity Incentive Plans” means, collectively, the Company LTIP, the
Company Option Plan and the Company DSU Plan;
- 6 -
“Company Fairness
Opinions” has the meaning ascribed thereto in Section 2.2(a)(i);
“Company Financial
Advisors” means, collectively, National Bank Financial Inc. as financial advisor to the Company and CIBC World Markets Inc. as independent financial advisor to the Special Committee;
“Company Incentive Awards” means, collectively, the Company DSUs, Company
RSUs, Company Options and Company PSUs;
“Company Leased Real Property” has the meaning ascribed thereto in Section
3.1(o);
“Company LTIP” means the long term incentive plan of the Company effective
February 19, 2025;
“Company Material Adverse Effect” means any one or more changes, effects,
events, occurrences or states of fact or circumstance, either individually or in the aggregate, that is, or would reasonably be expected to be, material and adverse to the business, results of operations or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole, except for any such change, effect, event, occurrence or state of facts or circumstance resulting or arising from or relating to: (a) the announcement or execution of this Agreement or the
implementation of the transactions contemplated hereby (including the impact of any of the foregoing on the relationships, contractual or otherwise, of the Company with customers, suppliers, service providers and employees); (b) any change in the
market price or trading volume of any securities of the Company (it being understood that the changes, effects, events, occurrences or states of fact or circumstance underlying such change in market price or trading volume that are not otherwise
excluded from the definition of a Company Material Adverse Effect may be taken into account in determining whether a Company Material Adverse Effect has occurred); (c) any change affecting the gold, silver or copper mining industry as a whole; (d)
any change (on a current or forward basis) in the price of gold, silver or copper or any changes in commodity prices or general market prices affecting the mining industry; (e) general political, economic, financial, currency exchange, inflation,
interest rates, securities or commodity market conditions in the United States, Canada or Mexico; (f) any generally applicable change or prospective change after the date hereof in IFRS or regulatory accounting requirements; (g) the commencement,
continuation or escalation of any war, armed hostilities or acts of terrorism, or the occurrence of any cyber-attacks or data breaches; (h) any general outbreak of illness, pandemic, epidemic, national health emergency, forced quarantine, lockdown
or similar event, or the worsening thereof; (i) the failure of the Company to meet any internal or published projections, forecasts, guidance, budgets, or estimates of revenues, earnings, cash flow or other financial performance or results of
operations for any period (provided, however, that the changes, effects, events, occurrences or states of fact or circumstance underlying such failure that are not otherwise excluded from the definition of a Company Material Adverse Effect may be
considered to determine whether such failure constitutes a Company Material Adverse Effect); (j) any natural disaster (including any hurricane, flood, tornado, earthquake, forest fire, weather-related event or man-made natural disaster); (k) any
adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of and by any Governmental Entity occurring after the date hereof (including with respect to Taxes); or (l) any
action taken (or omitted to be taken) by the Company or a Subsidiary thereof which is required to be taken (or omitted to be taken) pursuant to this Agreement or that is consented to by the Parent in writing; provided, however, (1) that with
respect to clauses (c), (d), (e), (f), (g), (h) and (j), to the extent any such change, effect, event, occurrence or state of facts or circumstance has a disproportionate effect on the Company and its Subsidiaries, taken as a whole, compared to
other entities with a similar type, size and scale, and operating in the same industries, as the Company and its Subsidiaries, taken as a whole, operate, the incremental disproportionate effect may be taken into account in determining whether there
has been a Company Material Adverse Effect, and only to the extent otherwise permitted by this definition and (2) in this Agreement, references to dollar amounts are not intended to be and shall not be illustrative or interpretive for purposes of
determining if a Company Material Adverse Effect has occurred;
- 7 -
“Company Material Contract” means any Contract: (a)
that, if terminated or modified or if it ceased to be in effect, would reasonably be expected to have a Company Material Adverse Effect; (b) under which the Company or any of its Subsidiaries has directly or indirectly
guaranteed any liabilities or obligations of a third party (other than endorsements for collection in the ordinary course) in excess of $10 million in the aggregate; (c) relating to indebtedness for borrowed money of
the Company or any of its Subsidiaries or any guarantee by the Company or any of its Subsidiaries of any other Person’s indebtedness for borrowed money, with an outstanding principal amount in excess of $15 million; (d) that is a material partnership, limited liability company agreement, shareholder agreement, joint venture, alliance agreement or other similar agreement
or arrangement in respect of any Person that is not a wholly-owned Subsidiary of the Company (other than any such agreement or arrangement relating to the operation or business of a Company Property in the ordinary course and which is not material
with respect to such Company Property); (e) under which the Company or any of its Subsidiaries is obligated to make payments to, or expects to receive payments from, a third party on an annual basis in excess of $10 million in the aggregate; (f) that limits or restricts the Company or any of its Subsidiaries from engaging in any line of business or any geographic area in any
material respect; (g) that contains any right on the part of any third party to acquire Mineral Rights or other property rights from the Company or any of its Subsidiaries that are material to the Company and its
Subsidiaries, taken as a whole, or that form any part of the Company Mineral Interests which are material to the Company and its Subsidiaries, taken as a whole; (h) that
contains any rights on the part of the Company or any of its Subsidiaries to acquire Mineral Rights or other property rights from any third party that, if acquired, would be material to the Company and its Subsidiaries, taken as a whole; (i) that is a contractual royalty, production payment, net profits, earn-out, streaming agreement, metal pre-payment or similar agreement that has a value in excess of $15
million; (j) that is an agreement with a Governmental Entity, or an agreement with any Indigenous group, or other organizations with authority to represent such groups, in each case, that is material to the Company and
its Subsidiaries, taken as a whole; (k) that is a registration rights agreement; (l) an earn-in, back-in, right of first refusal or right first offer in respect of the Company Mineral Interests; and (m) that is material to the Company and its
Subsidiaries, taken as a whole, and related to the operation of, or the exploitation, extraction or production of metals from, the Company Mineral Interests; and, for greater certainty, includes the Company Material Contracts listed on Schedule
3.1(ff) of the Company Disclosure Letter;
- 8 -
“Company Meeting” means the special meeting of Company Shareholders,
including any adjournment or postponement thereof, to be called and held in accordance with the Interim Order to consider the Arrangement Resolution and for any other purpose as may be set out in the Company Circular and agreed to in writing by the
Parent;
“Company Mineral Interests” has the meaning ascribed thereto in Section
3.1(o)(i);
“Company Notes” means the $400.0 million of unsecured senior notes issued by
the Company on March 18, 2025, which bear interest at a rate of 6.875% per annum and mature in 2032;
“Company Option Plan” means the option plan of the Company effective May 4,
2011, as amended;
“Company Options” means the outstanding options to purchase Company Shares
granted under the Company Option Plan;
“Company Owned Real Property” has the meaning ascribed thereto in Section
3.1(o)(i);
“Company Permitted Liens” means, in respect of
the Company or any of its Subsidiaries, any one or more of the following:
| (a) |
Liens for Taxes not at the time overdue or statutory Liens for overdue Taxes the validity of which the Company or a Subsidiary thereof is contesting in good faith by appropriate proceedings and for
which adequate reserves have been set aside in accordance with IFRS;
|
| (b) |
statutory Liens incurred or deposits made in the ordinary course in connection with workers’ compensation, unemployment insurance and similar legislation, but only to the extent that each such
statutory Lien or deposit relates to amounts not yet due;
|
| (c) |
Liens given by the Company or a Subsidiary thereof to a public utility;
|
| (d) |
undetermined or inchoate construction or repair or storage Liens arising in the ordinary course, a claim for which has not been filed or registered pursuant to Law or which notice in writing has
not been given to the Company or a Subsidiary thereof;
|
| (e) |
any reservations or exceptions contained in the original Crown grants or patents relating to any Company Properties (including the reservation of any mines and minerals in the Crown or any other
Person);
|
| (f) |
easements, including rights of way for, or reservations or rights of others relating to, sewers, water lines, gas lines, pipelines, electric lines, telegraph and telephone lines and other similar
products or services, provided that there has been material compliance with the provisions thereof and that such easements, rights of way, reservations, or rights do not, individually or in the aggregate, materially adversely affect or
impair the quiet enjoyment, use, or operation of the Company Properties, as the case may be, as currently enjoyed, used or operated or as contemplated in the Company Public Documents;
|
- 9 -
| (g) |
zoning by-laws, ordinances, or other similar restrictions of any Governmental Entity as to the use of real property, which are not violated in any material respect by the current use of the Company
Properties;
|
| (h) |
all rights of expropriation of any federal, state, provincial or municipal authority or agency;
|
| (i) |
mechanic’s, carrier’s, workmen’s, repairmen’s or other similar Liens (inchoate or otherwise) if, individually or in the aggregate, (A) they are not material, (B) they arose or were incurred in the
ordinary course in respect of obligations which are not overdue or which are being contested in good faith and for which appropriate reserves have been established in accordance with IFRS, and (C) they have not been filed, recorded, or
registered in accordance with Law;
|
| (j) |
minor title defects or irregularities consisting of minor surveyor exceptions, provided that such defects, irregularities, or exceptions do not, individually or in the aggregate, materially
adversely affect or impair the quiet enjoyment, use, or operation of the Company Properties as currently enjoyed, used or operated or as contemplated in the Company Public Documents;
|
| (k) |
Liens securing indebtedness under the Company Credit Agreement and other credit facilities of the Company, including as described in the Company Public Documents;
|
| (l) |
any Liens arising pursuant to the terms and conditions of any Contract that provides for a royalty, production payment, net profits, earn-out, streaming agreement, metal pre-payment or similar
agreement providing for the payment of consideration measured, quantified or calculated based on, in whole or in part, any minerals produced, mined, recovered and extracted from any of the Company Mineral Interests;
|
| (m) |
any other Liens, that are, as of the date of this Agreement, (i) registered against title to real property in any applicable land registry office, (ii) registered or recorded against mineral titles
in any applicable mineral titles registry office, or (iii) registered against the Company, any of its Subsidiaries or any of their respective assets in a public personal property registry or similar registry system, in each case, to the
extent such Liens do not, individually or in the aggregate, materially adversely affect or impair the quiet enjoyment, use or operation of the Company Properties as currently enjoyed, used or operated; and
|
| (n) |
as disclosed in Schedule 3.1(o) of the Company Disclosure Letter;
|
“Company Property”
has the meaning ascribed thereto in Section 3.1(o)(i);
“Company Proposed Agreement” has the meaning ascribed thereto in Section
7.4(a);
“Company PSUs” means the outstanding performance share units granted under
the Company LTIP;
- 10 -
“Company Public Documents” means all forms, reports, schedules, statements
and other documents filed by the Company on SEDAR+ or EDGAR, in each case since January 1, 2025;
“Company RSUs” means the outstanding restricted share units granted under
the Company LTIP;
“Company Shareholder Approval” has the meaning ascribed thereto in Section
2.3(e);
“Company Shareholders” means the registered and/or beneficial holders of
Company Shares, as the context requires;
“Company Shares” means the common shares in the capital of the Company;
“Company Standstill Agreement” means a Contract, other than a
confidentiality and standstill agreement permitted by Section 7.3, entered by the Company and/or any of its Subsidiaries that currently, or after the Effective Time, restricts the ability of a third party to offer to purchase the assets or equity
securities of the Company or any of its Subsidiaries;
“Company Superior
Proposal” means a bona fide unsolicited written Acquisition Proposal (with references to 20%
being deemed to be replaced with references to 50%) in respect of the Company and its Subsidiaries that did not result from a breach of Section 7.1: (a) that is reasonably capable of being completed without undue delay,
taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal and the Person or group of Persons making such Acquisition Proposal; (b) that is not subject to any financing condition and in respect of which
adequate arrangements have been made to complete any required financing to consummate such Acquisition Proposal to the satisfaction of the Company Board, acting in good faith (after consultation with the Company’s legal and financial advisors); (c)
that is not, as of the date that the Company provides a Superior Proposal Notice, subject to a due diligence and/or access condition (but, for greater certainty, may include a customary access covenant); (d) complies with applicable Canadian
Securities Laws in all material respects; and (e) in respect of which the Company Board (after consultation with the Company’s legal and financial advisors) determines in good faith, and after taking into account all the terms and conditions of
such Acquisition Proposal, including all legal, financial, regulatory and other aspects of such Acquisition Proposal would, if consummated in accordance with its terms, result in a transaction that is more favourable, from a financial point of
view, to the Company Shareholders, than the Arrangement (including any amendments to the terms and conditions of this Agreement and the Plan of Arrangement proposed by the Parent pursuant to Section 7.4(b));
“Company Technical Reports” has the meaning ascribed thereto in Section
3.1(q)(i);
“Company Termination Payment” means $254,725,000;
“Company Termination
Payment Event” has the meaning ascribed thereto in Section 9.4(b);
“Company Voting Agreements” means the voting agreements between the Parent and the Company Shareholders party thereto setting forth the terms and conditions upon which they have agreed, among other things, to vote their Company Shares and/or
Company Options in favour of the Arrangement Resolution;
- 11 -
“Competition Act” means the Competition Act (Canada);
“Competition Act Approval” means that, in connection with the transactions
contemplated by this Agreement, either:
| (a) |
both:
|
| (ii) |
| (b) |
the Commissioner shall have issued an Advance Ruling Certificate;
|
“Confidentiality Agreement” means the amended and restated confidentiality
agreement between the Parent and the Company dated April 17, 2025, as further amended on September 25, 2025;
“Consideration” means the consideration to be received by Company
Shareholders pursuant to the Plan of Arrangement;
“Consideration Shares” means the Parent Shares to be issued to Company
Shareholders pursuant to the Plan of Arrangement;
“Continuing Employees” means Company Employees that are employed by the
Parent, the Company or any of their respective Subsidiaries immediately following the Effective Time;
“Contract” means any legally binding contract, agreement, license,
franchise, lease, arrangement, commitment, understanding, joint venture, partnership or other right or obligation (written or oral) and any amendment thereto to which a Party or any of its Subsidiaries is a party or by which it or any of its
Subsidiaries is bound or to which any of their respective properties or assets is subject;
“Corporate Records” means, in respect of the Company and each of its
Subsidiaries, the original or electronic corporate books, duly signed by such Persons as required under applicable Law and under its constating documents, including (as applicable) the shareholders’ meeting minutes, share register, the capital
variations book, and the directors’ meeting minutes;
- 12 -
“Depositary” means Computershare
Investor Services Inc., or such other Person as the Company and the Parent may appoint (each acting reasonably) to act as depositary in respect of the Arrangement;
“DGCL” means the Delaware General Corporation Law;
“Dissent Rights” means the rights of dissent exercisable by the Company
Shareholders in respect of the Arrangement described in the Plan of Arrangement;
“EDGAR” means
the Electronic Data Gathering, Analysis, and Retrieval system of the U.S. SEC;
“Effective Date” means the date on which the Arrangement becomes effective
in accordance with Section 2.11(a);
“Effective Time” means the time on the Effective Date that the Arrangement
becomes effective, as set out in the Plan of Arrangement;
“Environmental Laws” means all Laws imposing obligations, responsibilities,
liabilities or standards of conduct for or relating to: (a) the regulation or control of pollution, contamination, activities, materials, substances or wastes in connection with or for the protection of human health or
safety, the environment or natural resources (including climate, air, surface water, groundwater, wetlands, land surface, subsurface strata, wildlife, aquatic species and vegetation, ecological planning, archeological vestiges); (b) the use, generation, disposal, treatment, processing, recycling, handling, transport, distribution, Release, destruction, transfer, import, export or sale, rehabilitation, reclamation, or remediation of Hazardous
Substances; or (c) the operation, rehabilitation, reclamation, restoration and remediation of mines and mining sites;
“Environmental Liabilities” means, with respect to any Person, all
liabilities, obligations, responsibilities, responses, losses, damages, punitive damages, property damages, consequential damages, environmental damages, treble damages, costs (including control, rehabilitation, reclamation, closure, remedial and
removal costs, investigation costs, capital costs, environmental compensation costs, operation and maintenance costs), expenses, fines, penalties and sanctions incurred as a result of or related to any claim, suit, action, administrative or court
order, investigation, proceeding or demand by any Person, arising under or related to any Environmental Laws, Environmental Permits, or in connection with any: (a) Release or threatened Release or presence of a
Hazardous Substance; (b) tailings impoundment areas; (c) tank, drum, pipe or other container that contains or contained a Hazardous Substance; or (d) use, generation, disposal, treatment,
processing, recycling, handling, transport, Release, transfer, import, export or sale of Hazardous Substance;
“Environmental Permits” means all Authorizations or program participation
requirements with or from any Governmental Entity under any Environmental Laws;
“ERISA” means the United States Employee Retirement Income Security Act of 1974;
“Exchange Ratio” has the meaning ascribed thereto in the Plan of
Arrangement;
- 13 -
“Final Order” means the final order of the Court contemplated by Section
2.7, in a form and substance acceptable to the Company and the Parent, each acting reasonably, approving the Arrangement, as such order may be amended, supplemented, modified or varied by the
Court (with the consent of both the Company and the Parent, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as
affirmed or as amended (provided that any such amendment is acceptable to both the Company and the Parent, each acting reasonably) on appeal;
“GAAP” means the generally accepted accounting principles in the United
States;
“Governmental Entity” means: (a) any
international, federal, provincial, territorial, tribal, state, regional, county, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, international arbitration institution,
commission, board, ministry bureau, agency or entity, domestic or foreign; (b) any stock exchange, including the TSX, the NYSE and the NYSE American; (c) any subdivision, agent, commission,
board or authority of any of the foregoing; or (d) any quasi-governmental or private body or self-regulatory organization exercising any regulatory, expropriation or taxing authority under or for the account of any of
the foregoing;
“Hazardous Substance” means any pollutant, contaminant, waste or chemical or
any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous or deleterious substance, waste or material, including hydrogen sulphide, cyanide, arsenic, cadmium, copper, lead, mercury, petroleum, polychlorinated biphenyls,
tailings, waste rock, asbestos or asbestos-containing materials, per- and polyfluoroalkyl substances and urea-formaldehyde insulation, and any other material, substance, pollutant or contaminant regulated or defined pursuant to, or that could
result in liability under, any Environmental Law, including those that are (a) defined as “pollutants”, “contaminants”, “hazardous” or “deleterious” under the Canadian Environmental
Protection Act, 1999, S.C. 1999, c.33, the Canadian Fisheries Act R.S.C., 1985, C.F-14, Ontario
Environmental Protection Act, R.S.O. 1990, c. E.19, the Ontario Water Resources Act, R.S.O. 1990, c. O.40, the British Columbia Environmental Management Act, S.B.C. 2003, c. 53, the British Columbia Water Sustainability Act, S.B.C 2014, c. 14 and/or
regulations thereunder; (b) “hazardous material” and/or “hazardous waste”, pursuant to Mexico’s Ley General del Equilibrio Ecológico y la Protección al Ambiente; (c) listed,
characterized (or subject to characterization) as “hazardous” under Mexican Official Norms NOM-052-SEMARNAT-2005 and NOM-053-SEMARNAT-1993; (d) labeled as “hazardous wastes” under Mexico’s Ley General para la Prevención y Gestión Integral de los Residuos and/or its regulations; (e) classified as hazardous or toxic under Mexico’s Ley General de Salud
or any of its regulations; (f) defined as a “hazardous waste,” “hazardous substance,” “extremely hazardous substance,” “pollutant,” or “contaminant” under any Environmental Law, including the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. § 9601, et seq., the Toxic Substances Control Act, 15 U.S.C. § 2601, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., the Hazardous Materials Transportation Act, 49 U.S.C. § 6901 et seq., the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99‑499, 100 Stat. 1613, each as amended or reauthorized, and any applicable state law counterparts; (g)
capable of causing harm to the Environment or to human health from exposure thereto if and to the extent such capability or exposure (or prevention thereof) is regulated under Environmental Laws; and/or (h) any used recipients or containers that
may have contained or stored Hazardous Substances, including above-ground or underground storage tanks or underground pipes or aboveground pipelines, if and to the extent controlled, regulated or prohibited under Environmental Laws;
- 14 -
“ICA” means the Investment Canada Act (Canada);
“ICA Approval” means, in respect of the transactions contemplated by this
Agreement, that: (a) either (i) the Parent shall have received written evidence from the responsible Minister under the ICA that the Minister is satisfied that the transactions contemplated by this Agreement are likely to be of net benefit to
Canada pursuant to the ICA, or (ii) the responsible Minister shall have been deemed to be satisfied (within the meaning of the ICA) that the transactions contemplated by this Agreement are likely to be of net benefit to Canada pursuant to the ICA;
and (b) there shall be no order prohibiting the consummation of the Arrangement under Part IV.1 of the ICA;
“IFRS” means International Financial Reporting Standards;
“including” means including without limitation, and “include” and “includes” have a corresponding meaning;
“Indigenous” means any and all aboriginal person, people, or group, native
person, people, or group, tribe, and/or indigenous person, people, or group, or any person or group asserting to be indigenous or part of an originary community or otherwise claiming any right recognized and/or affirmed under applicable Laws,
treaties or any other interest held by virtue of that person or group’s status as one of the aforementioned groups, and any person or group representing or purporting to represent any of the foregoing;
“Initial Outside Date” has the meaning ascribed thereto in Section
9.2(a)(ii)(A);
“Intellectual Property” means anything that is or may be protected by any
intellectual property rights in any jurisdiction such as, but not limited to works (including software), performances, trade secrets, inventions (whether patentable or not), improvements to such inventions, industrial designs, mask work and
integrated circuit topographies, trade-marks, trade names, business names, corporate names, domain names, website names and world wide web addresses, whether or not they may also be protected, at any given time, as a trade secret or confidential
information, including proprietary and non-public business information, know-how, methods, processes, designs, technology, technical data, schematics, models, simulations and documentation relating to any of the foregoing;
“Intended U.S. Tax Treatment” has the meaning ascribed thereto in Section
2.15;
“Interim Order” means the interim order of the Court to be issued following
the application therefor submitted to the Court after being informed of the intention to rely upon the exemption from registration under section 3(a)(10) of the U.S. Securities Act with respect to the Consideration Shares issued pursuant to the
Arrangement as contemplated by Section 2.3, in a form and substance acceptable to the Company and the Parent, each acting reasonably, providing for, among other things, the calling and holding of
the Company Meeting, as the same may be amended, supplemented, modified or varied by the Court with the consent of the Company and the Parent, each acting reasonably;
- 15 -
“Law” or “Laws”
means all laws (including common law), by-laws, statutes, rules, regulations, principles of law and equity, orders, rulings, ordinances, judgements, injunctions, determinations, awards, decrees or other requirements, whether domestic or foreign,
that are binding upon or applicable to such Person or its business and have the force of law, and the terms and conditions of any Authorization of or from any Governmental Entity, and, for greater certainty, includes Securities Laws and applicable
common law, and the term “applicable” with respect to such Laws and in a context that refers to a Party, means such Laws as are applicable
to such Party and/or its Subsidiaries or their business, undertaking, property or securities and emanate from a Person having jurisdiction over the Party and/or its Subsidiaries or its or their business, undertaking, property or securities;
“Liens” means any hypothecs, mortgages, pledges, assignments, liens,
charges, security interests, encumbrances and adverse rights or claims or other third party interests or encumbrances of any kind, whether contingent or absolute, and any agreement, option, lease, sublease, restriction, easement, right-of-way,
right or privilege (whether by Law, contract or otherwise) capable of becoming any of the foregoing;
“Matching Period” has the meaning ascribed thereto in Section 7.4(a)(iii);
“material fact” means a material fact relating to the Company or the Parent,
as applicable, for purposes of applicable Securities Laws;
“Mexican Antitrust Law” means the Federal Economic Competition Law (Ley Federal de Competencia Económica) of Mexico;
“Mexico” means the United Mexican States;
“MI 61-101” means Multilateral
Instrument 61-101 – Protection of Minority Security Holders in Special Transactions of the
Canadian Securities Administrators;
“Mineral Rights” means all rights, whether contractual or otherwise, for the
exploration for or exploitation of mineral resources and reserves together with surface rights, Water Rights, royalty interests, fee interests, joint venture interests, and other leases, rights of way and enurements related to any such rights;
“Misrepresentation” means an untrue statement of a material fact or an
omission to state a material fact required to be stated or necessary to make a statement not misleading in light of the circumstances in which it was made;
“Modern Slavery Laws” means all Laws regarding the provision of slavery,
servitude and forced or child labour and about human trafficking including the Fighting Against Forced Labour and Child Labour in Supply Chains Act (Canada);
“Multiemployer Plan” means any “multiemployer plan” within the meaning of
Section 4001(a)(3) of ERISA;
“NI 43-101” means National
Instrument 43-101 – Standards of Disclosure for Mineral Projects of the Canadian
Securities Administrators;
- 16 -
“NI 45-106” means National
Instrument 45-106 – Prospectus Exemptions of the Canadian Securities Administrators;
“NI 51-102” means National
Instrument 51-102 – Continuous Disclosure Obligations of the Canadian Securities Administrators;
“NI 52-109” means National
Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings of the Canadian Securities
Administrators;
“NI 54-101” means National
Instrument 54-101 – Communication with
Beneficial Owners of Securities of a Reporting Issuer of the Canadian Securities Administrators;
“No-Action Letter” means a written confirmation from the Commissioner
indicating that he does not, at that time, intend to make an application under section 92 of the Competition Act in respect of the transactions contemplated by this Agreement, such letter or other written notification having not been withdrawn
prior to the Effective Time;
“Non-Continuing Employees” means Company
Employees whose employment with the Company or any of its Subsidiaries is terminated by the Company or its Subsidiaries, as applicable, without cause, at or immediately prior to the Effective Time;
“NYSE” means the New York Stock Exchange;
“NYSE American” means the NYSE American Stock Exchange;
“ordinary course” means, with respect to an action taken by a Person, that
such action is consistent with the past practice of such Person and is taken in the ordinary course of the normal day-to-day business and operations of such Person;
“Outside Date” has the meaning ascribed thereto in Section 9.2(a)(ii)(A);
“Parent” has the meaning ascribed thereto on the first page of this
Agreement;
“Parent Applicable
Anti-Corruption Law” has the meaning ascribed thereto in Section 4.1(ii)(ii);
“Parent Benefit Plans” means all employee benefit plans, including all
welfare, health, dental, vision, prescription drug, accidental death and dismemberment, critical illness, emergency travel, life, short term disability, long term disability or other medical insurance, mortgage insurance, employee loan, employee
assistance, supplemental unemployment benefit, post-employment benefit, post-retirement benefit, bonus, profit sharing, option, incentive, performance, equity, equity-based, phantom, deferred compensation, severance, retention, stay bonus, paid
time off, change of control, termination, pension, retirement, saving and supplemental retirement agreements, policies, programs, arrangements, schemes, practices or undertakings, whether funded or unfunded, insured or uninsured, registered or
unregistered, oral or written, which are maintained by or binding upon the Parent or any of its Subsidiaries or for which the Parent or its Subsidiaries has any liability or contingent liability for the benefit of any current or former Parent
Employees or independent contractors (or, to the extent applicable, any spouses, dependents, survivors or beneficiaries of such persons) excluding any Multiemployer Plans or Statutory Plans;
- 17 -
“Parent Board” means the board of
directors of the Parent, as the same is constituted from time to time;
“Parent Board Recommendation” has the meaning ascribed thereto in Section
2.2(b)(ii);
“Parent Change in Recommendation” has the meaning ascribed thereto in
Section 8.1(a)(iii);
“Parent Charter Amendment” has the meaning ascribed thereto in the recitals
to this Agreement;
“Parent Credit Agreement” means that certain credit agreement, dated as of
September 29, 2017 (as subsequently amended), by and among, inter alia, the Parent, as borrower, Bank of America, N.A., as administrative agent, and Bank of America, N.A.,
Royal Bank of Canada, Bank of Montreal, Chicago Branch, National Bank of Canada, Fédération Des Caisses Desjardins Du Québec, ING Capital LLC and Goldman Sachs Bank USA, as lenders;
“Parent Disclosure Letter” means the disclosure letter dated the date of
this Agreement (including all schedules, exhibits and appendices thereto) and executed by the Parent and delivered to the Company prior to or concurrently with the execution of this Agreement;
“Parent Employees” means all individuals who are employed as officers or
employees by the Parent and its Subsidiaries, including unionized, non-unionized, part-time, full-time, active and inactive employees, and any officers who provide services to the Company as consultants;
“Parent Incentive Awards” means all outstanding restricted share units,
performance share units, options and any other awards made in accordance with the Parent Incentive Plans;
“Parent Incentive Plans” means, collectively, the Amended & Restated
Coeur Mining, Inc. 2018 Long-Term Incentive Plan effective as of May 11, 2021, the Coeur Mining, Inc. Stock Option Plan (Legacy Plan), effective August 24, 2015, as amended, and the Coeur Mining, Inc. Stock Option Plan, effective June 15, 2022, as
amended, and the applicable form of award agreements thereunder;
“Parent Leased Real Property” has the meaning ascribed thereto in Section
4.1(n)(i);
“Parent Matching
Period” has the meaning ascribed thereto in Section 8.4(a)(iii);
- 18 -
“Parent Material Adverse Effect” means any one or more changes, effects,
events, occurrences or states of fact or circumstance, either individually or in the aggregate, that is, or would reasonably be expected to be, material and adverse to the business, results of operations or condition (financial or otherwise) of the
Parent and its Subsidiaries, taken as a whole, except for any such change, effect, event, occurrence or state of facts or circumstance resulting or arising from or relating to: (a) the announcement or execution of this Agreement or the
implementation of the transactions contemplated hereby (including the impact of any of the foregoing on the relationships, contractual or otherwise, of the Parent with customers, suppliers, service providers and employees); (b) any change in the
market price or trading volume of any securities of the Parent (it being understood that the changes, effects, events, occurrences or states of fact or circumstance underlying such change in market price or trading volume that are not otherwise
excluded from the definition of a Parent Material Adverse Effect may be taken into account in determining whether a Parent Material Adverse Effect has occurred); (c) any change affecting the gold and silver mining industry as a whole; (d) any
change (on a current or forward basis) in the price of gold or silver or any changes in commodity prices or general market prices affecting the mining industry; (e) general political, economic, financial, currency exchange, inflation, interest
rates, securities or commodity market conditions in the United States, Canada or Mexico; (f) any generally applicable change or prospective change after the date hereof in GAAP or regulatory accounting requirements; (g) the commencement,
continuation or escalation of any war, armed hostilities or acts of terrorism, or the occurrence of any cyber-attacks or data breaches; (h) any general outbreak of illness, pandemic, epidemic, national health emergency, forced quarantine, lockdown
or similar event, or the worsening thereof; (i) the failure of the Parent to meet any internal or published projections, forecasts, guidance, budgets, or estimates of revenues, earnings, cash flow or other financial performance or results of
operations for any period (provided, however, that the changes, effects, events, occurrences or states of fact or circumstance underlying such failure that are not otherwise excluded from the definition of a Parent Material Adverse Effect may be
considered to determine whether such failure constitutes a Parent Material Adverse Effect); (j) any natural disaster (including any hurricane, flood, tornado, earthquake, forest fire, weather-related event or man-made natural disaster); (k) any
adoption, implementation, promulgation, repeal, modification, amendment, reinterpretation, change or proposal of any applicable Law of and by any Governmental Entity occurring after the date hereof (including with respect to Taxes); or (l) any
action taken (or omitted to be taken) by the Parent or a Subsidiary thereof which is required to be taken (or omitted to be taken) pursuant to this Agreement or that is consented to by the Company in writing; provided, however, (1) that with
respect to clauses (c), (d), (e), (f), (g), (h) and (j), to the extent any such change, effect, event, occurrence or state of facts or circumstance has a disproportionate effect on the Parent and its Subsidiaries, taken as a whole, compared to
other entities with a similar type, size and scale, and operating in the same industries, as the Parent and its Subsidiaries, taken as a whole, operate, the incremental disproportionate effect may be taken into account in determining whether there
has been a Parent Material Adverse Effect, and only to the extent otherwise permitted by this definition and (2) in this Agreement, references to dollar amounts are not intended to be and shall not be illustrative or interpretive for purposes of
determining if a Parent Material Adverse Effect has occurred;
- 19 -
“Parent Material Contract” means any Contract:
(a) that, if terminated or modified or if it ceased to be in effect, would reasonably be expected to have a Parent Material Adverse Effect; (b) under which the Parent or any of its Subsidiaries has directly or indirectly guaranteed any liabilities
or obligations of a third party (other than endorsements for collection in the ordinary course) in excess of $20 million in the aggregate; (c) relating to indebtedness for borrowed money of the Parent or any of its Subsidiaries or any guarantee by
the Parent or any of its Subsidiaries of any other Person’s indebtedness for borrowed money, with an outstanding principal amount in excess of $30 million; (d) that is a material partnership, limited liability company agreement, shareholder
agreement, joint venture, alliance agreement or other similar agreement or arrangement in respect of any Person that is not a wholly-owned Subsidiary of the Parent (other than any such agreement or arrangement relating to the operation or business
of a Parent Property in the ordinary course and which is not material with respect to such Parent Property); (e) under which the Parent or any of its Subsidiaries is obligated to make or expects to receive payments on an annual basis in excess of
$20 million in the aggregate; (f) that limits or restricts the Parent or any of the Parent Material Subsidiaries from engaging in any line of business or any geographic area in any material respect; (g) that contains any right on the part of any
third party to acquire Mineral Rights or other property rights from the Parent or any of its Subsidiaries that are material to the Parent and its Subsidiaries, taken as a whole, or that form any part of the Parent Mineral Interests which are
material to the Parent and its Subsidiaries, taken as a whole; (h) that contains any rights on the part of the Parent or any of its Subsidiaries to acquire Mineral Rights or other property rights from any third party that, if acquired, would be
material to the Parent and its Subsidiaries, taken as a whole; (i) that is a contractual royalty, production payment, net profits, earn-out, streaming agreement, metal pre-payment or similar agreement that has a value in excess of $30 million; (j)
that is an agreement with a Governmental Entity, or an agreement with any Indigenous group, or other organizations with authority to represent such groups, in each case, that is material to the Parent and its Subsidiaries, taken as a whole; (k)
that is a registration rights agreement; (l) an earn-in, back-in, right of first refusal or right first offer in respect of the Parent Mineral Interests; and (m) that is material to the Parent and its Subsidiaries, taken as a whole, and related to
the operation of, or the exploitation, extraction or production of metals from, the Parent Mineral Interests; and, for greater certainty, includes the Parent Material Contracts listed on Schedule 4.1(cc) of the Parent Disclosure Letter;
“Parent Material Subsidiaries” means the Subsidiaries set out in Schedule
1.1(a) of the Parent Disclosure Letter;
“Parent Meeting” means the meeting of the Parent Stockholders, including any
adjournment or postponement thereof, to be called and held in accordance with applicable Law to consider the Parent Charter Amendment, Parent Stock Issuance and for any other purpose as may be set out in the Parent Proxy Statement and agreed to in
writing by the Company;
“Parent Mineral Interests” has the meaning ascribed thereto in Section
4.1(n)(i);
“Parent Owned Real Property” has the meaning ascribed thereto in Section
4.1(n)(i);
“Parent Permitted Liens” means, in respect of the Parent or any of its
Subsidiaries, any one or more of the following:
| (a) |
Liens for Taxes not at the time overdue or statutory Liens for overdue Taxes the validity of which the Parent or a Subsidiary thereof is contesting in good faith by appropriate proceedings and for
which adequate reserves have been set aside in accordance with GAAP;
|
- 20 -
| (b) |
statutory Liens incurred or deposits made in the ordinary course in connection with workers’ compensation, unemployment insurance and similar legislation, but only to the extent that each such
statutory Lien or deposit relates to amounts not yet due;
|
| (c) |
Liens given by the Parent or a Subsidiary thereof to a public utility;
|
| (d) |
undetermined or inchoate construction or repair or storage Liens arising in the ordinary course, a claim for which has not been filed or registered pursuant to Law or which notice in writing has
not been given to the Parent or a Subsidiary thereof;
|
| (e) |
| (f) |
easements, including rights of way for, or reservations or rights of others relating to, sewers, water lines, gas lines, pipelines, electric lines, telegraph and telephone lines and other similar
products or services, provided that there has been material compliance with the provisions thereof and that such easements, rights of way, reservations, or rights do not, individually or in the aggregate, materially adversely affect or
impair the quiet enjoyment, use, or operation of the Parent Properties, as the case may be, as currently enjoyed, used or operated or as contemplated in the Parent Public Documents;
|
| (g) |
zoning by-laws, ordinances, or other similar restrictions of any Governmental Entity as to the use of real property, which are not violated in any material respect by the current use of the Parent
Properties;
|
| (h) |
all rights of expropriation of any federal, state, provincial or municipal authority or agency;
|
| (i) |
mechanic’s, carrier’s, workmen’s, repairmen’s or other similar Liens (inchoate or otherwise) if, individually or in the aggregate, (A) they are not material, (B) they arose or were incurred in the
ordinary course in respect of obligations which are not overdue or which are being contested in good faith and for which appropriate reserves have been established in accordance with GAAP, and (C) they have not been filed, recorded, or
registered in accordance with Law;
|
| (j) |
minor title defects or irregularities consisting of minor surveyor exceptions, provided that such defects, irregularities, or exceptions do not, individually or in the aggregate, materially
adversely affect or impair the quiet enjoyment, use, or operation of the Parent Properties as currently enjoyed, used or operated or as contemplated in the Parent Public Documents;
|
| (k) |
Liens securing indebtedness under the Parent Credit Agreement and other credit facilities of the Parent as described in the Parent Public Documents;
|
| (l) |
any Liens arising pursuant to the terms and conditions of any Contract that provides for a royalty, production payment, net profits, earn-out, streaming agreement, metal pre-payment or similar
agreement providing for the payment of consideration measured, quantified or calculated based on, in whole or in part, any minerals produced, mined, recovered and extracted from any of the Company Mineral Interests; and
|
- 21 -
| (m) |
any other Liens, that are, as of the date of this Agreement, (i) registered against title to real property in any applicable land registry office, (ii) registered or recorded against mineral titles
in any applicable mineral titles registry office, or (iii) registered against the Parent, any of its Subsidiaries or any of their respective assets in a public personal property registry or similar registry system, in each case, to the
extent such Liens do not, individually or in the aggregate, materially adversely affect or impair the quiet enjoyment, use or operation of the Parent Properties as currently enjoyed, used or operated;
|
“Parent Property” has the meaning ascribed thereto in Section 4.1(n)(i);
“Parent Proposed
Agreement” has the meaning ascribed thereto in Section 8.4(a);
“Parent Proxy Statement” means the proxy statement on Schedule 14A to be
distributed to the Parent Stockholders, including all schedules, appendices and exhibits thereto and enclosures therewith, and information incorporated by reference therein, in connection with the Parent Meeting, as amended, supplemented or
otherwise modified from time to time in accordance with this Agreement;
“Parent Public Documents” means all forms, reports, schedules, statements
and other documents filed by the Parent on SEDAR+ or EDGAR, in each case since January 1, 2025;
“Parent Shares” has the meaning ascribed thereto in the recitals to this
Agreement;
“Parent Standstill Agreement” means a Contract entered by the Parent and/or
any of its Subsidiaries that currently, or after the Effective Time, other than a confidentiality and standstill agreement permitted by Section 7.3, restricts the ability of a third party to offer to purchase the assets or equity securities of the
Parent or any of its Subsidiaries;
“Parent Stock Issuance” has the meaning ascribed thereto in the recitals to
this Agreement;
“Parent Stockholder Approvals” means the approval (a) of the Parent Stock
Issuance by the affirmative vote of at least a majority of the votes cast in person or represented by proxy at the Parent Meeting in accordance with Section 312.03(c) and Section 312.07 of the NYSE Listed Company Manual, and (b) of the Parent
Charter Amendment by the affirmative vote of Parent Stockholders required by the certificate of incorporation of Parent and the DGCL at the Parent Meeting;
“Parent Stockholders” means the registered and/or beneficial holders of the
Parent Shares, as the context requires;
- 22 -
“Parent Superior
Proposal” means a bona fide unsolicited written Acquisition Proposal (with references to 20%
being deemed to be replaced with references to 50%) in respect of the Parent and its Subsidiaries that did not result from a breach of Section 8.1: (a) that is reasonably capable of being completed without undue delay, taking into account all
legal, financial, regulatory and other aspects of such Acquisition Proposal and the Person or group of Persons making such Acquisition Proposal; (b) that is not subject to any financing condition and in respect of which adequate arrangements have
been made to complete any required financing to consummate such Acquisition Proposal to the satisfaction of the Parent Board, acting in good faith (after consultation with the Parent’s legal and financial advisors); (c) that is not, as of the date
that the Parent provides a Parent Superior Proposal Notice, subject to a due diligence and/or access condition (but, for greater certainty, may include a customary access covenant); (d) complies with applicable U.S. Securities Laws in all material
respects; and (e) in respect of which the Parent Board (after consultation with the Parent’s legal and financial advisors) determines in good faith, and after taking into account all the terms and conditions of such Acquisition Proposal, including
all legal, financial, regulatory and other aspects of such Acquisition Proposal, would, if consummated in accordance with its terms, result in a transaction that is more favourable, from a financial point of view, to the Parent Stockholders, than
the Arrangement (including any amendments to the terms and conditions of this Agreement and the Plan of Arrangement proposed by the Company pursuant to Section 8.4(b));
“Parent Superior
Proposal Notice” has the meaning ascribed thereto in Section 8.4(a)(ii);
“Parent Technical Reports” has the meaning ascribed thereto in Section
4.1(p);
“Parent Termination Payment” means $413,705,000;
“Parent Termination Payment Event” has the meaning ascribed thereto in
Section 9.4(d);
“Parent Voting Agreements” means the voting agreements between the Company
and the Parent Stockholders party thereto setting forth the terms and conditions upon which they have agreed, among other things, to vote their Parent Shares in favour of the Parent Charter Amendment and Parent Stock Issuance;
“Parties” means, together, the Parent, the Purchaser and the Company, and “Party” means any one of them, as the context requires;
“Person” includes an individual,
partnership, association, body corporate, trustee, executor, administrator, legal representative, government (including any Governmental Entity) or any other entity, whether or not having legal status;
“Personal Information” means all information or data in any form, including
paper, electronic and other forms, concerning any identified or identifiable individual, as provided under the applicable Privacy Laws;
“Plan of Arrangement” means
the plan of arrangement of the Company, substantially in the form of Schedule A hereto, and any amendments or variations thereto made in accordance with this Agreement and the Plan of Arrangement or upon the direction of the Court in the Final
Order with the consent of the Company and the Parent, each acting reasonably;
“Pre-Acquisition Reorganization” has the meaning ascribed thereto in Section
5.13(a);
- 23 -
“Privacy Laws” include applicable Laws that govern the collection, use, disclosure, retention, disposition and other processing of Personal Information, including the Personal
Information Protection and Electronic Documents Act and applicable provincial Privacy Laws;
“Purchaser” has the meaning ascribed thereto on the first page of this
Agreement;
“Purchaser Board” means the board of directors of the Purchaser, as the same
is constituted from time to time;
“Regulation S-K 1300” means 17 C.F.R. § 229.1300 et seq. on Disclosure by Registrants Engaged in Mining Operations;
“Regulatory Approvals” means those sanctions, rulings, consents, orders,
exemptions, Authorizations and other approvals (including the lapse, without objections, of a prescribed period of time under a statute or regulation that states that a transaction may be implemented if a prescribed period of time lapses following
the giving of notice without an objection being made) of any Governmental Entity required in relation to the transactions contemplated hereby, including the CNA Approval, Competition Act Approval and ICA Approval;
“Release” means any release, spill, emission, leaking, pumping, pouring,
emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal, dumping, or leaching of any Hazardous Substance in the environment;
“Representatives” means, with respect to a Party, such Party’s directors,
officers, employees, counsel, financial advisors, accountants, agents, consultants and other authorized representatives and advisors;
“Required Regulatory Approvals” means each of the CNA Approval, Competition
Act Approval and ICA Approval;
“Restricted Party” means a person that is: (a)
listed on, owned, held or controlled, directly or indirectly, by a person listed on, or acting on behalf of a person listed on, any Sanctions List, (b) located in, incorporated under the laws of, or owned or (directly
or indirectly) controlled by, or acting on behalf of, a person located in or organized under the laws of a country or territory that is the target of Sanctions, or (c) otherwise a target of Sanctions;
“Revised Company RSUs” has the meaning ascribed thereto in Section
2.10(e)(ii);
“Sanctions” means the economic sanctions laws, regulations, embargoes or
restrictive measures administered, enacted or enforced by: (a) the United States government; (b) the United Nations; (c) the European Union; (d) the Canadian government; (e) the United Kingdom; or (f) the respective governmental institutions and agencies of any of the foregoing, including, without
limitation, the Office of Foreign Assets Control of the U.S. Department of Treasury (“OFAC”), the United States Department of State, His Majesty’s Treasury (“HMT”), Global Affairs Canada and the Royal Canadian Mounted Police or any other relevant sanctions authority (together the “Sanctions Authorities”);
- 24 -
“Sanctions List” means the “Specially Designated Nationals and Blocked Persons” list maintained by OFAC, the Consolidated List of Financial Sanctions Targets, the Consolidated Canadian Autonomous Sanctions List and the Investment Ban List maintained by HMT, or any similar list maintained by, or public
announcement of Sanctions designation made by, any of the Sanctions Authorities;
“SEC Clearance” has the meaning ascribed thereto in Section 2.4;
“Securities Act” means the Securities Act (Ontario) and the rules, regulations and published policies made thereunder;
“Securities Laws” means, collectively, Canadian Securities Laws and U.S.
Securities Laws;
“Special Committee” means the special committee of the Company Board;
“Statutory Plans” means statutory benefit plans which the Company or its
Subsidiaries are required to participate in or comply with, including as applicable the Canada Pension Plan and plans administered pursuant to applicable health tax, workplace safety insurance and employment insurance legislation;
“Subsidiary” has the meaning ascribed thereto in NI 45-106;
“Superior Proposal Notice” has the meaning ascribed thereto in Section
7.4(a)(ii);
“Tax Act” means the Income Tax Act (Canada);
“Tax Returns” includes all returns, reports, declarations, elections,
notices, filings, forms, statements and other documents (whether in tangible, electronic or other form) and including any amendments, schedules, attachments, supplements, appendices and exhibits thereto and any claims for refund, declarations of
estimated Tax and information returns, made, prepared, filed or required by a Governmental Entity to be made, prepared or filed by Law in respect of Taxes;
“Tax Sharing Agreement” means any agreement or arrangement binding the
Company or the Parent, as applicable, or any of their respective Subsidiaries that provides for the allocation, apportionment, sharing, indemnification or assignment of any Tax liability or benefit, or the transfer or assignment of income,
revenues, receipts, or gains for the purpose of determining any Person’s Tax liability (other than customary Tax sharing or indemnification provisions contained in a commercial agreement entered into in the ordinary course the primary subject
matter of which does not relate to Taxes);
- 25 -
“Taxes” includes any taxes, duties, fees, premiums, assessments, imposts,
levies, expansion fees and other charges of any kind whatsoever imposed by any Governmental Entity, including all interest, penalties, fines, additions to tax or other additional amounts imposed by any Governmental Entity in respect thereof, and
including, but not limited to, those levied on, or measured by, or referred to as, income, gross receipts, earnings, profits, mining, mineral, carbon, fuel, windfall, environmental, royalty, capital, capital stock, transfer, land transfer,
disability, ad valorem, sales, net worth, goods and services, harmonized sales, use, value-added, excise, stamp, recording, withholding, global minimum or “Pillar 2”, business, franchising, property, premium, development, occupation, occupancy,
employer health, alternative or add-on minimum, payroll, employment, health, social services, education and social security taxes, all surtaxes, all customs duties and import and export taxes, countervail and anti-dumping, all license, franchise
and registration fees and all employment insurance, health insurance and Canada Pension Plan and other pension plan premiums or contributions imposed by any Governmental Entity, any transferee or predecessor liability in respect of any of the
foregoing, and any liability for any such amounts imposed with respect to any other person, including under any agreements or arrangements;
“Third Party Beneficiaries” has the meaning ascribed thereto in Section
10.10;
“Transaction Personal Information” has the meaning ascribed thereto in
Section 10.1;
“TSX” means the Toronto Stock Exchange;
“U.S. Exchange Act” means the United States Securities Exchange Act of 1934;
“U.S. Investment Company Act” means the United States Investment Company Act of 1940;
“U.S. SEC” has the meaning ascribed thereto in Section 2.3;
“U.S. Securities Act” means the United States Securities Act of 1933;
“U.S. Securities Laws” means the U.S. Exchange Act, the U.S. Securities Act
and all other applicable U.S. federal securities Laws;
“U.S. Tax Code” means the United States Internal Revenue Code of 1986;
“U.S. Treasury Regulations” means the regulations promulgated under the U.S.
Tax Code, including any temporary, proposed or final regulations issued thereunder by the United States Department of the Treasury;
“United States” or “U.S.” means the United States of America, its territories and possessions, any State of the United States and the District of Columbia;
“Value Determination Date” means the date that is three business days prior
to the Effective Date; and
“Water Rights” means water rights, water concessions, water licences, water
leases and water supply agreements, ditch rights or other interests in water or water conveyance rights owned, leased or held by the relevant Person.
| 1.2 |
Interpretation Not Affected by Headings
|
The division of this Agreement into Articles and Sections, and the insertion of headings are for convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement. Unless the contrary intention appears, references in this Agreement to an Article, Section or Schedule by number or letter or both refer to the Article, Section or Schedule, respectively, bearing that
designation in this Agreement.
- 26 -
| 1.3 |
Number and Gender
|
In this Agreement, unless the contrary intention appears, words importing the singular include the plural and vice versa, and words importing gender include all
genders.
| 1.4 |
Calculation of Time
|
Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the
period commences and including the day on which the period ends. Where the last day of any such time period is not a business day, such time period shall be extended to the next business day following the day on which it would otherwise end.
| 1.5 |
Date for Any Action
|
If the date on which any action is required to be taken hereunder by a Party is not a business day, such action shall be required to be taken on the next succeeding
day which is a business day.
| 1.6 |
Currency
|
Unless otherwise stated, all references in this Agreement to sums of money are expressed in lawful money of the United States and “$” refers to U.S. dollars.
| 1.7 |
Accounting Matters
|
Unless otherwise stated, all accounting terms used in this Agreement (i) with respect to the Company shall have the meanings attributable thereto under IFRS and all
determinations of an accounting nature required to be made shall be made in a manner consistent with IFRS consistently applied, and (ii) with respect to the Parent shall have the meanings attributable thereto under GAAP and all determinations of an
accounting nature required to be made shall be made in a manner consistent with GAAP consistently applied.
| 1.8 |
Statutory References
|
In this Agreement, any reference to a statute, rule, regulation or other statutory instrument or subordinate legislation (including any particular provision thereof)
shall be construed to refer to such statute, rule, regulation or other instrument or legislation (or provision thereof) and to all rules, regulations, instruments or legislation made thereunder, if any, in each case as the same may from time to
time be amended, modified, supplemented, re-enacted or replaced, in whole or in part.
- 27 -
| 1.9 |
Knowledge
|
In this Agreement, references to: (a) “the knowledge of the Company” means the actual knowledge of the Company’s (i) President and Chief
Executive Officer, (ii) Executive Vice President and Chief Financial Officer, (iii) Executive Vice President and Chief Strategy Officer, (iv) Vice President, Technical Services, (v) Vice President, General Counsel and Corporate Secretary, (vi) Vice
President, Operations, (vii) Vice President, Geology, and (viii) Chief Human Resources Officer, in each case, after making due enquiries regarding the relevant matter, and (b) “the knowledge of the Parent” means the
actual knowledge of the Parent’s (i) Chairman, President and Chief Executive Officer, (ii) Senior Vice President and Chief Financial Officer, (iii) Senior Vice President, General Counsel and Secretary,
(iv) Senior Vice President, Exploration, (v) Senior Vice President and Chief Human Resources Officer, and (vi) Senior Vice President and Chief Operating Officer, in each case, after making due enquiries regarding the relevant matter.
| 1.10 |
Company Disclosure Letter
|
The Company Disclosure Letter itself and all information contained in it is confidential information and may not be disclosed unless (a) it is required to be disclosed
pursuant to Law unless such Law permits the Parties to refrain from disclosing the information for confidentiality or other purposes, or (b) a Party, acting reasonably and in good faith, needs to disclose it in order to enforce or exercise its
rights under this Agreement.
| 1.11 |
Parent Disclosure Letter
|
The Parent Disclosure Letter itself and all information contained in it is confidential information and may not be disclosed unless (a) it is required to be disclosed
pursuant to Law unless such Law permits the Parties to refrain from disclosing the information for confidentiality or other purposes, or (b) a Party, acting reasonably and in good faith, needs to disclose it in order to enforce or exercise its
rights under this Agreement.
| 1.12 |
Schedules
|
The following Schedules are annexed to this Agreement and are incorporated by reference into this Agreement and form a part hereof:
|
Schedule A
|
-
|
Plan of Arrangement
|
|
Schedule B
|
-
|
Arrangement Resolution
|
|
Schedule C
|
-
|
Form of Parent Charter Amendment
|
|
Schedule D
|
-
|
Form of Resignation and Mutual Release
|
|
Schedule E
|
-
|
Form of Company Voting Agreement
|
|
Schedule F
|
-
|
Form of Parent Voting Agreement
|
ARTICLE 2
| 2.1 |
Arrangement
|
The Parties agree that the Arrangement will be implemented in accordance with and subject to the terms and conditions contained in this Agreement and the Plan of
Arrangement.
- 28 -
| 2.2 |
Approvals
|
| (a) |
The Company represents and warrants to the Parent that:
|
| (ii) |
the Special Committee, after receiving financial and legal advice and the Company Fairness Opinions, has unanimously (A) determined that the Arrangement is fair to the Company Shareholders and in
the best interests of the Company, and (B) recommended to the Company Board that the Company Board (1) approve this Agreement and the Arrangement, and (2) recommend that the Company Shareholders vote in favour of the Arrangement Resolution;
and
|
| (b) |
The Parent represents and warrants to the Company that:
|
- 29 -
| 2.3 |
Interim Order
|
As promptly as reasonably practicable following the execution of this Agreement, the Company shall apply to the Court in a manner acceptable to the Parent, acting
reasonably, pursuant to Part 9, Division 5 of the BCBCA, to schedule the Interim Order hearing with the Court for a date on or about the fifteenth
(15th) calendar day immediately following the date of filing of the Parent Proxy Statement with the U.S. Securities and Exchange Commission (“U.S. SEC”); provided that the
Company shall reschedule such hearing if the SEC Clearance is not obtained (or not obtainable) by the third (3rd) business day prior to the date of the hearing; provided further that in the event such hearing is rescheduled, the Company shall use
commercially reasonable efforts to reschedule such hearing to occur as soon as reasonably practicable following the receipt of SEC Clearance, in each case subject to the availability of the Court and subject to and in accordance with the
requirements of NI 54-101 with respect to the Company Meeting. Notwithstanding the foregoing, the Company shall not be required to schedule the Interim Order hearing for a date prior to the thirtieth (30th) day following the date of this Agreement.
The Company shall prepare, file and diligently pursue an application for the Interim Order, which shall provide, among other things:
| (a) |
for the class(es) of Persons to whom notice is to be provided in respect of the Arrangement and the Company Meeting and for the manner in which such notice is to be provided;
|
| (b) |
for confirmation of the record date for the purposes of determining the Company Shareholders entitled to notice of and to vote at the Company Meeting in accordance with the Interim Order;
|
| (c) |
that the record date for Company Shareholders entitled to notice of and to vote at the Company Meeting will not change as a result of any adjournment(s) or postponement(s) of the Company Meeting
unless required by the Court or by Law;
|
| (e) |
that the requisite approval (collectively, the “Company Shareholder Approval”) for the Arrangement Resolution shall be the affirmative vote of at least:
|
| (i) |
66⅔% of the votes cast on the Arrangement Resolution by the Company Shareholders present in person or by proxy and entitled to vote at the Company Meeting and voting as a single class; and
|
- 30 -
| (g) |
for the grant of Dissent Rights to the Company Shareholders who are registered Company Shareholders as of the record date for the Company Meeting, as contemplated in the Plan of Arrangement;
|
| (h) |
for the notice requirements with respect to the presentation of the application to the Court for the Final Order;
|
| (j) |
that the Parties intend to rely on the exemption from registration requirements provided by section 3(a)(10) of the U.S. Securities Act for the issuance of Consideration Shares pursuant to the Plan
of Arrangement, subject to and conditioned upon the Court’s approval of the Arrangement and determination following a hearing that the Arrangement is substantively and procedurally fair and reasonable to each Person to whom Consideration
Shares will be issued; and
|
| 2.4 |
Company Meeting
|
Subject to the terms of this Agreement, the Company shall, as soon as reasonably practicable after the earliest to occur of (x) the U.S. SEC informing the Parent that
it has no remaining comments to, or will not review, the Parent Proxy Statement (and the Parent agrees to advise the Company of such matters promptly after the U.S. SEC informs the Parent of such) or (y) the passage of at least ten (10) calendar
days (as calculated pursuant to Rule 14a-6 of the U.S. Exchange Act) since the filing of a preliminary Parent Proxy Statement with the U.S. SEC not informing the Parent that it intends to review the Parent Proxy Statement (in either case, “SEC Clearance”):
- 31 -
| (b) |
in consultation with the Parent, fix and publish a record date for the purposes of determining the Company Shareholders entitled to receive notice of and to vote at the Company Meeting;
|
| (f) |
unless the Company Board has made a Company Change in Recommendation in accordance with Section 7.4(a), solicit proxies in favour of the Arrangement Resolution and against any resolution submitted
by any Company Shareholder (unless otherwise consented to by the Parent) and, in connection therewith, in consultation with the Parent, use the services of one or more proxy solicitation services (at the expense of the Company);
|
- 32 -
| (g) |
provide the Parent with copies of or access to information regarding the Company Meeting generated by any proxy solicitation services engaged by the Company, as requested from time to time by the
Parent;
|
| (h) |
not change the record date for the Company Shareholders entitled to vote at the Company Meeting in connection with any adjournment or postponement of the Company Meeting unless required by the
Court or by Law;
|
| (j) |
give notice to the Parent of the Company Meeting and allow its Representatives and legal counsel to attend the Company Meeting (including by virtual means).
|
| 2.5 |
Parent Meeting
|
Subject to the terms of this Agreement, as soon as reasonably practicable after SEC Clearance, the Parent shall:
| (b) |
in consultation with the Company, fix and publish a record date for the purposes of determining the Parent Stockholders entitled to receive notice of and to vote at the Parent Meeting;
|
| (c) |
not adjourn, postpone or cancel (or propose or permit the adjournment, postponement or cancellation of) the Parent Meeting except (i) as required by applicable Laws or a Governmental Entity, (ii)
as required for quorum purposes (in which case the meeting shall be adjourned and not cancelled), (iii) if, after consultation with the Company and following the dissemination of the Parent Proxy Statement, Parent reasonably determines in
good faith that the Parent Stockholder Approvals are unlikely to be obtained at the Parent Meeting (in which case the meeting shall be adjourned and not cancelled); (iv) the Parent Board shall have determined in good faith (after
consultation with outside legal counsel) that it is necessary or appropriate to postpone or adjourn the Parent Meeting in order to give Parent Stockholders sufficient time to evaluate any information or disclosure that the Parent has sent
or otherwise made available to such holders by issuing a press release, filing materials with the SEC or otherwise; (v) as permitted by Section 9.3(b), (vi) with the Company’s prior written consent, or (vii) if the Company adjourns or
postpones the Company Meeting (in which case the Parent shall adjourn or postpone the Parent Meeting to the same date and time as the Company Meeting); provided, that Parent shall be permitted to postpone or adjourn the Parent Meeting
pursuant to clause (ii), (iii) and (iv) on no more than two occasions in the aggregate, and no such adjournment shall delay the Parent Meeting by more than ten (10) days from the prior-scheduled date or to a date that is on or after the
fifth (5th) business day preceding the Outside Date;
|
- 33 -
| (d) |
promptly advise the Company as the Company may reasonably request, and at least on a daily basis on each of the last ten (10) business days prior to the date of the Parent Meeting, as to the
aggregate tally of the proxies received by the Parent in respect of the Parent Charter Amendment and Parent Stock Issuance;
|
| (e) |
promptly (and in no event later than two (2) business days after receipt of notice) advise the Company of any written communication from any Parent Stockholder in opposition to the Arrangement, the
Parent Charter Amendment or Parent Stock Issuance (except for non-substantive communications from any Parent Stockholder that purports to hold less than 0.1% of Parent Shares (provided that communications from such Parent Stockholder are
not substantive in the aggregate));
|
| (f) |
unless the Parent Board has made a Parent Change in Recommendation in accordance with Section 8.4(a), solicit proxies in favour of the Parent Charter Amendment and Parent Stock Issuance and against
any resolution submitted by any Parent Stockholder (unless otherwise consented to by the Company) and, in connection therewith, in consultation with the Company, use the services of one or more proxy solicitation services (at the expense of
the Parent);
|
| (g) |
provide the Company with copies of or access to information regarding the Parent Meeting generated by any proxy solicitation services engaged by the Parent, as requested from time to time by the
Company;
|
| (h) |
not change the record date for the Parent Stockholders entitled to vote at the Parent Meeting in connection with any adjournment or postponement of the Parent Meeting unless required by Law;
|
| (i) |
give notice to the Company of the Parent Meeting and allow its Representatives and legal counsel to attend the Parent Meeting (including by virtual means); and
|
| (j) |
propose that the only matters to be acted on by Parent Stockholders at the Parent Meeting are (i) the approval of the Parent Charter Amendment, (ii) the approval of the Parent Stock Issuance and
(iii) if the Parent has not received proxies representing a sufficient number of Parent Shares to obtain the Parent Stockholder Approvals, the adjournment of the Parent Meeting to solicit additional proxies.
|
- 34 -
| 2.6 |
Preparation of Company Circular and the Parent Proxy Statement
|
| (a) |
Promptly following the entry into this Agreement, the Company shall prepare, together with any other documents required by the BCBCA, the Company’s constating documents, Canadian Securities Laws
and all other applicable Laws, and shall use its reasonable best efforts to cause to be filed with the TSX and the Canadian Securities Authorities as promptly as practicable after obtaining the Interim Order (with the making of such filing
subject to the Parent furnishing the information required under Section 2.6(e)), the Company Circular relating to matters to be submitted to the Company Shareholders at the Company Meeting. The Company shall use reasonable best efforts to
cause the Company Circular to comply as to form and substance in all material respects with the rules and regulations promulgated by Canadian Securities Laws and the requirements of applicable Law, and to respond as promptly as practicable
to any comments of the TSX, Canadian Securities Authorities or their respective staff. The Company will advise the Parent promptly after it receives any request by the TSX or Canadian Securities Authorities for amendment of the Company
Circular or receives any comments thereon and responses thereto or any request by the TSX or Canadian Securities Authorities for additional information, and shall provide the Parent with copies of all substantive correspondence that is
provided by or on behalf of it, on one hand, and by the TSX or Canadian Securities Authorities, on the other hand. The Company shall use its reasonable best efforts to resolve any comments from the TSX and Canadian Securities Authorities
with respect to the Company Circular as promptly as reasonably practicable after receipt thereof. The Company agrees to permit the Parent (to the extent practicable) and its counsel, to participate in all substantive meetings and
conferences with the TSX or Canadian Securities Authorities with respect to the foregoing matters. Notwithstanding the foregoing, prior to filing or mailing the Company Circular (or any amendment or supplement thereto) or responding to any
substantive comments of the TSX or Canadian Securities Authorities with respect thereto, the Company will (A) provide the Parent with a reasonable opportunity to review and comment on such document or response (including the proposed final
version of such document or response), (B) consider in good faith for inclusion in such document or response all comments reasonably and promptly proposed by the Parent and (C) not file or mail such document or respond to the TSX or
Canadian Securities Authorities prior to receiving the approval of the Parent, which approval shall not be unreasonably withheld, conditioned or delayed.
|
| (b) |
Promptly following the entry into this Agreement, the Parent shall prepare, together with any other documents required by U.S. Securities Laws and all other applicable Laws, and shall use its
reasonable best efforts to cause to be filed with the U.S. SEC as promptly as practicable following the execution of this Agreement (with the making of such filing subject to the Company furnishing the information required under Section
2.6(f)), the Parent Proxy Statement relating to matters to be submitted to the Parent Stockholders at the Parent Meeting. The Parent shall use reasonable best efforts to cause the Parent Proxy Statement to comply as to form and substance in
all material respects with the rules and regulations promulgated by the U.S. SEC and the requirements of applicable Law, and to respond as promptly as practicable to any comments of the U.S. SEC or its staff. The Parent will advise the
Company promptly after it receives any request by the U.S. SEC for amendment of the Parent Proxy Statement or receives any comments thereon and responses thereto or any request by the U.S. SEC for additional information, and the Parent
shall provide the Company with copies of all substantive correspondence that is provided by or on behalf of it, on one hand, and by the U.S. SEC on the other hand. The Parent shall use its reasonable best efforts to resolve any comments
from the U.S. SEC with respect to the Parent Proxy Statement as promptly as reasonably practicable after receipt thereof. The Parent agrees to permit the Company (to the extent practicable) and its counsel, to participate in all substantive
meeting and conferences with the U.S. SEC with respect to the foregoing matters. Notwithstanding the foregoing, prior to filing or mailing the Parent Proxy Statement (or any amendment or supplement thereto) or responding in writing to any
substantive comments of the U.S. SEC with respect thereto, the Parent will (A) provide the Company with a reasonable opportunity to review and comment on such document or response (including the proposed final version of such document or
response), (B) consider in good faith for inclusion in such document or response all comments reasonably and promptly proposed by the Company, and (C) not file or mail such document or respond to the U.S. SEC prior to receiving the approval
of the Company, which approval shall not be unreasonably withheld, conditioned or delayed.
|
- 35 -
| (c) |
The Company Circular shall: (i) include a copy of the Company Fairness Opinions; (ii) state that the Company Board has received the Company Fairness Opinions and the recommendation of the Special
Committee, and, subject to the terms of this Agreement, has unanimously determined, after receiving legal and financial advice, that the Arrangement is fair to the Company Shareholders and that the Arrangement and entry into this Agreement
are in the best interests of the Company; (iii) subject to the terms of this Agreement, contain the unanimous recommendation of the Company Board (subject to any abstentions due to entitlement to “collateral benefits” under MI 61-101) to
Company Shareholders that they vote in favour of the Arrangement Resolution; and (iv) include statements that each of the directors and senior officers of the Company has signed a Company Voting Agreement, pursuant to which, and subject to
the terms thereof, they have agreed to, among other things, vote their Company Shares and/or Company Options in favour of the Arrangement Resolution.
|
| (d) |
The Parent Proxy Statement shall: (i) state that the Parent Board has evaluated the Arrangement in consultation with Parent’s management and legal and financial advisors, and has unanimously
determined that the Arrangement and entry into this Agreement are in the best interests of the Parent; (ii) subject to the terms of this Agreement, contain the unanimous recommendation of the Parent Board to Parent Stockholders that they
vote in favour of the Parent Charter Amendment and Parent Stock Issuance; (iii) include a copy of the separate opinions of BMO Capital Markets Corp. and RBC Capital Markets, LLC to the Parent Board; (iv) include statements that each of the
directors and senior officers of the Parent has signed a Parent Voting Agreement, pursuant to which, and subject to the terms thereof, they have agreed to, among other things, vote their Parent Shares in favour of the Parent Charter
Amendment and Parent Stock Issuance; and (v) state the Company Director Nominees who shall become members of the Parent Board as of the Effective Time.
|
- 36 -
| (i) |
If at any time prior to the Effective Time, any information relating to the Parent or the Company, or any of their respective affiliates, officers or directors, should be discovered by the Company
or the Parent that should be set forth in an amendment or supplement to either of the Company Circular or the Parent Proxy Statement, so that such documents would not include any misstatement of a material fact or omit to state any material
fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the Party which discovers such information shall promptly notify the other Party and an appropriate amendment or
supplement describing such information shall be promptly filed with the U.S. SEC, the Canadian Securities Authorities or any other Governmental Entity as required, as applicable, and, to the extent required by applicable Law, disseminated
to the Company Shareholders or the Parent Stockholders, as applicable.
|
- 37 -
| 2.7 |
Final Order
|
If (A) the Interim Order is obtained, (B) the Company Shareholder Approval is obtained at the Company Meeting as provided for in the Interim Order and (C) the Parent
Stockholder Approvals are obtained at the Parent Meeting, the Company shall (a) diligently pursue and take all steps necessary to submit the Arrangement before the Court as promptly as reasonably practicable but, in any event, within four (4)
business days after the Company Shareholder Approval is obtained and (b) diligently pursue an application for the Final Order pursuant to section 291 of the BCBCA.
| 2.8 |
Court Proceedings
|
Subject to the terms of this Agreement, the Company will diligently pursue all Court proceedings relating to obtaining the Interim Order and Final Order, and the
Parent will cooperate with, assist and consent to the Company in seeking the Interim Order and the Final Order, including by providing the Company on a timely basis any information reasonably requested or required to be supplied by the Parent in
connection therewith. The Company will provide the Parent and its legal counsel with a reasonable opportunity to review and comment upon drafts of all material to be filed with the Court in connection with the Arrangement, including by providing on
a timely basis a description of any information to be supplied by the Parent for inclusion in such material, prior to the service and filing of such material, and will give reasonable consideration to all such comments. Subject to applicable Law,
the Company will not file any material with the Court in connection with the Arrangement or serve any such material, and will not agree to modify or amend materials so filed or served, except as contemplated by this Section 2.8 or with the Parent’s
prior written consent, such consent not to be unreasonably withheld, conditioned or delayed; provided that nothing herein shall require the Parent to agree or consent to any increase in Consideration or other modification or amendment to such filed
or served materials that expands or increases the Parent’s obligations set forth in any such filed or served materials or under this Agreement or the Arrangement. The Company shall also provide to the Parent’s outside counsel on a timely basis
copies of any notice of appearance or other Court documents served on the Company in respect of the application for the Interim Order or the Final Order or any appeal therefrom and of any notice, whether written or oral, received by the Company
indicating any intention to oppose the granting of the Interim Order or the Final Order or to appeal the Interim Order or the Final Order. The Company will ensure that all materials filed with the Court in connection with the Arrangement are
consistent in all material respects with the terms of this Agreement and the Plan of Arrangement. In addition, the Company will not object to the Parent’s legal counsel making such submissions on the hearing of the motion for the Interim Order and
the application for the Final Order as such counsel considers appropriate, provided that the Company is advised of the nature of any submissions at least 24 hours prior to the hearing and such submissions are consistent with this Agreement and the
Plan of Arrangement. The Company will also oppose any proposal from any Person that the Final Order contain any provision inconsistent with this Agreement or the Plan of Arrangement, and, if at any time after the issuance of the Final Order and
prior to the Effective Date, the Company is required by the terms of the Final Order or by Law to return to Court with respect to the Final Order, it shall do so after notice to, and in consultation and cooperation with, the Parent.
- 38 -
| 2.9 |
U.S. Securities Law Matters
|
The Parties agree that the Arrangement will be carried out with the intention that, and will use their commercially reasonable best efforts to ensure that, all
Consideration Shares issued pursuant to the Arrangement will be issued by the Parent in reliance on the exemption from the registration requirements of the U.S. Securities Act provided by section 3(a)(10) thereof and pursuant to exemptions from
applicable state securities laws. In order to ensure the availability of the exemption provided by section 3(a)(10) of the U.S. Securities Act and to facilitate the Parent’s compliance with other U.S. Securities Laws, the Parties agree that the
Arrangement will be carried out on the following basis:
| (a) |
the Court will be asked to approve the procedural and substantive fairness of the Arrangement;
|
| (g) |
the Court will hold a hearing approving the procedural and substantive fairness of the Arrangement before issuing the Final Order; and
|
| (h) |
the Final Order will expressly state that the Arrangement serves as the basis for a claim to the exemption provided by section 3(a)(10) of the U.S. Securities Act from the registration requirements
otherwise imposed by the U.S. Securities Act regarding the distribution of securities pursuant to the Plan of Arrangement and is approved by the Court as being substantively and procedurally fair to the Company Shareholders and the holders
of Company Options.
|
- 39 -
| 2.10 |
Treatment of Company Incentive Awards
|
| (a) |
The outstanding Company Incentive Awards shall be treated in accordance with this Section 2.10 and the Plan of Arrangement.
|
- 40 -
| (e) |
Company RSUs. Prior to the Effective Date and conditional upon the
Effective Time having occurred, Company RSUs shall be treated as follows:
|
| (i) |
Company RSUs held by Non-Continuing Employees (“Accelerated RSUs”) will be fully vested pursuant to, and redeemed for cash in
accordance with, the terms of the Company LTIP (except that the calculation of the amounts payable shall be determined as at the Value Determination Date). The Company will pay to the holders of such Accelerated RSUs, through the payroll
systems of the Company, all amounts required to be paid to them for their Accelerated RSUs in accordance with this Plan of Arrangement, less any Tax Withholding required under applicable Law or in accordance with Section 2.14, in respect of
such Company RSUs.
|
| 2.11 |
Effective Date
|
- 41 -
| 2.12 |
Payment of Consideration
|
The Parent will, following receipt by the Company of the Final Order, and no later than the business day prior to the Effective Date determined in accordance with
Section 2.11, deposit in escrow, or cause to be deposited in escrow, with the Depositary (the terms and conditions of such escrow to be satisfactory to the Parties, acting reasonably) sufficient Consideration Shares to satisfy the Consideration
payable pursuant to the Arrangement. All payments of any kind in settlement or satisfaction of the rights of any registered Company Shareholder exercising Dissent Rights and all payments contemplated in Sections 2.10 and 5.12 including any payments
made to holders of Company Incentive Awards and any payments to holders of Company RSUs will be made by, and from the funds set aside prior to the Effective Time by, the Company.
| 2.13 |
Announcement and Shareholder Communications
|
The Parent and the Company shall jointly publicly announce the transactions contemplated hereby promptly following the execution of this Agreement by the Parties, the
text and timing of the announcement to be approved by each Party in advance, acting reasonably. The Parent and the Company agree to co-operate in the preparation of presentations, if any, to the Company Shareholders or the Parent Stockholders
regarding the transactions contemplated by this Agreement, and neither the Parent nor the Company (except as permitted by Article 7) shall (a) issue any press release or otherwise make public announcements with respect
to this Agreement or the Plan of Arrangement without the consent of the other applicable Party (which consent shall not be unreasonably withheld, conditioned or delayed) or (b) make any filing with any Governmental
Entity with respect thereto without prior consultation with the other applicable Party; provided, however, that each Party shall be permitted to make any disclosure or filing required under applicable Laws and the applicable Party making such
disclosure shall use its commercially reasonable efforts to give prior oral or written notice to the other applicable Party and reasonable opportunity to review or comment on the disclosure or filing, and if such prior notice is not reasonably
practicable, to give such notice immediately following the making of such disclosure or filing. To the extent reasonably practicable and permitted by Law, the Parent and the Company, as applicable, shall provide prior notice to the other applicable
Party of any material public disclosure that it proposes to make regarding its business or operations, together with a draft copy of such disclosure. The receiving Party and its legal counsel shall be given a reasonable opportunity to review and
comment on such information prior to such information being disseminated publicly or filed with any Governmental Entity and, if such prior notice is not possible, shall be given such notice immediately following the making of such disclosure or
filing. Reasonable consideration shall be given to any comments made by the receiving Party and its counsel pursuant to this Section 2.13. Notwithstanding the foregoing, the provisions of this Section 2.13 related to the approval or contents of
filings with Governmental Entities will not apply with respect to filings in connection with the Regulatory Approvals, the Company Circular, the Parent Proxy Statement, the
Interim Order or the Final Order which are governed by other sections of this Agreement. The restrictions set forth in this Section 2.13 shall not apply to any release or public statement in connection with any dispute regarding this Agreement or
the transactions contemplated hereby.
- 42 -
| 2.14 |
Withholding Taxes
|
The Parent, the Company, the Depositary, their respective Subsidiaries and any other Person on their behalf, shall be entitled to deduct and withhold from any amounts
payable to any Person pursuant to the Arrangement and under this Agreement including amounts distributed to any former Company Shareholder or former holders of Company Incentive Awards, such amounts as the Parent, the Company, the Depositary and
their respective Subsidiaries, or any Person on behalf of any of the foregoing, is or may be required or permitted to deduct or withhold with respect to such payment under the Tax Act, the U.S. Tax Code, or any provision of local, state, federal,
provincial or foreign Law, in each case, as amended, or under the administrative practice of the relevant Governmental Entity administering such Law, and to request from any recipient of any payment hereunder any necessary tax forms or any other
proof of exemption from withholding or any similar information. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes hereof as having been paid to the Person to whom such
amounts would otherwise have been paid. Any Person that deducts or withholds any amount pursuant to this Section 2.14 shall remit such deducted or withheld amounts to the applicable Governmental Entity. In any case where the amount so required or
permitted to be deducted or withheld from any payment to a holder exceeds the cash portion of the consideration otherwise payable, the Parent, the Company, the Depositary, their respective Subsidiaries, and any Person on behalf of the foregoing, as
the case may be, is authorized to sell or otherwise dispose of such portion of the consideration as is necessary in order to fully fund such liability, and such Person shall remit any unapplied balance of the net proceeds of such sale to the
holder.
| 2.15 |
U.S. Tax Matters
|
The Arrangement is intended to qualify as a reorganization within the meaning of Section 368(a) of the U.S. Tax Code and this Agreement and the Plan of Arrangement are
intended to be a “plan of reorganization” within the meaning of the U.S. Treasury Regulations promulgated under Section 368 of the U.S. Tax Code (the “Intended U.S. Tax Treatment”).
In particular, for United States federal income tax purposes, the acquisition of Company Shares pursuant to the Arrangement shall be treated as an acquisition of such shares by a direct, wholly-owned subsidiary of Parent. Each Party shall file all
Tax Returns consistent with the Intended U.S. Tax Treatment, unless otherwise required by applicable Law. Following the Effective Date, the Parent will prepare and file in accordance with U.S. Treasury Regulations (including by posting a copy on
the investor relations section of its website) an Internal Revenue Service Form 8937 with respect to the Arrangement. Each Party shall act in a manner that is consistent with the Intended U.S. Tax Treatment, and, except as required by applicable
Law, shall not take any action, or knowingly fail to take any action, if such action or failure to act would reasonably be expected to prevent the Arrangement from qualifying as a reorganization.
- 43 -
| 2.16 |
List of Shareholders
|
| (b) |
At the reasonable request of the Company from time to time, the Parent shall provide the Company with a list (in both written and electronic form) of the registered Parent Stockholders, together
with their addresses and respective holdings of Parent Shares, and a list of the names and addresses and holdings of all Persons having rights issued by the Parent to acquire Parent Shares. The Parent shall from time to time furnish, and
shall require that its registrar and transfer agent furnish, the Company with such additional information, including updated or additional lists of the Parent Stockholders, the holdings of such Parent Stockholders and other assistance as
the Company may reasonably request.
|
| 2.17 |
Governance
|
The Parent covenants with the Company that it will take all actions necessary to ensure that, promptly following the Effective Time, two
of the members of the Company Board shall be members of the Parent Board (the “Company Director Nominees”) and at the next annual general meeting of the Parent held to consider
the election of directors that occurs following the Effective Date, the Company Director Nominees shall be nominated by the Parent for election as a director of the Parent, provided that (i) the Company Director Nominees meet any applicable
qualification requirements to serve as directors under applicable Laws, and (ii) the Company Director Nominees have delivered to the Parent a consent to act as a director of the Parent.
ARTICLE 3
| 3.1 |
Representations and Warranties
|
Except as disclosed in (x) the forms, documents and reports filed or furnished by the Company on SEDAR+ or EDGAR (including all exhibits,
supplements and schedules thereto and information incorporated by reference) and publicly available since January 1, 2023 and prior to the date hereof (but excluding any disclosures set forth in any “risk factors” section, any disclosures in any
“forward looking statements” section and any other disclosures included therein in each case to the extent they are predictive or forward-looking in nature), or (y) the Company Disclosure Letter (which disclosures shall apply against any
representations and warranties to which it is reasonably apparent it should relate), the Company hereby represents and warrants to the Parent and the Purchaser as follows, and acknowledges that the Parent and the Purchaser are relying upon such
representations and warranties in connection with the entering into of this Agreement:
- 44 -
| (c) |
No Conflict; Required Filings and Consent.
|
| (A) |
violate, conflict with or result in a breach of:
|
| (1) |
the constating documents of the Company or those of any of its Subsidiaries;
|
- 45 -
| (d) |
Subsidiaries.
|
- 46 -
| (e) |
| (ii) |
As of the date hereof, none of the Company or its Subsidiaries is in conflict with, or in default (including cross defaults) under or in violation of its articles or by-laws or equivalent
organizational documents, except as would not, individually or in the aggregate, have a Company Material Adverse Effect.
|
| (f) |
Company Authorizations.
|
- 47 -
| (ii) |
The Company and its Subsidiaries have fully complied with and are in compliance with all such Authorizations, except, in each case, for such non-compliance which, individually or in the aggregate,
would not have a Company Material Adverse Effect.
|
| (g) |
Capitalization and Listing.
|
- 48 -
| (iii) |
There are no outstanding contractual obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Shares or any shares of any of its Subsidiaries, or
qualify securities for public distribution in Canada or elsewhere, or with respect to the voting or disposition of any securities of the Company or any of its Subsidiaries. No Subsidiary of the Company owns any Company Shares.
|
| (iv) |
All outstanding securities of the Company have been issued in material compliance with all applicable Laws and any pre-emptive or similar rights applicable to them.
|
| (v) |
There are no outstanding bonds, debentures or other evidences of indebtedness of the Company or any of its Subsidiaries, or any other agreements, arrangements, instruments or commitments of any
kind giving any Person, directly or indirectly, the right to vote (or that are convertible or exercisable for securities having the right to vote) with the holders of the Company Shares on any matters, except Company Options, Company RSUs
and Company PSUs.
|
| (i) |
Reporting Issuer Status.
|
- 49 -
| (k) |
Stock Exchange Matters.
|
| (i) |
The Company Shares are listed on the TSX and the NYSE American and are not listed or quoted on any market other than the TSX and the NYSE American.
|
| (l) |
Financial Statements.
|
- 50 -
| (iii) |
The Company has established “disclosure controls and procedures” and “internal control over financial reporting” (each as defined in NI 52-109) to the extent required by NI 52-109 and Securities
Laws, and, as of the date hereof, the Company does not have knowledge, and has not been advised by its auditors, of any “material weakness” (as defined in NI 52-109), in each case, except as disclosed in the Company Public Documents.
|
| (m) |
Auditors. There is not now, and there has not been within the past ten
(10) years, any reportable event (as defined in NI 51-102) with respect to the present or any former auditor of the Company, and, to the Company’s knowledge, there has never been any such reportable event.
|
- 51 -
| (o) |
Interest in Properties and Mineral Rights.
|
| (iii) |
All of the mineral claims held by the Company in the Mineral Titles Online Registry maintained by the Province of British Columbia, the unpatented lode mining claims held by the Company in the
Mining Lands Administration System maintained by the Province of Ontario and mineral concessions held by the Company or any of its Subsidiaries comprising Company Mineral Interests, in each case, have been properly staked, located or
registered and are recorded or in the process of being recorded in compliance with applicable Law in all material respects and are comprised of valid and subsisting mineral claims.
|
- 52 -
| (A) |
with respect to the unpatented mining claims held by the Company in the Mining Lands Administration System maintained by the Province of Ontario and comprising portions of the Company Mineral
Interests (collectively, the “Company Unpatented Claims”), (1) all such Company Unpatented Claims are recorded in accordance with the requirements of the Mining Act (Ontario), (2) with regard to all Company Unpatented Claims, the Company has filed all
required assessment work reports or filings in a timely manner and they were properly filed and recorded with the Province of Ontario and all Company Unpatented Claims are in good standing as of the date hereof, (3) any required fees
regarding the Company Unpatented Claims have been paid to date and (4) the Company Unpatented Claims are not subject to any competing claims that would materially adversely affect the conduct of the business of the Company or its
Subsidiaries as currently conducted, subject to any statutory or Crown reservations for such Company Unpatented Claims; and
|
| (B) |
with respect to any mineral claims held by the Company in the Mineral Titles Online Registry maintained by the Province of British Columbia comprising portions of the Company Mineral Interests
(collectively, the “Company Mineral Claims”), (1) all such Company Mineral Claims are recorded in accordance with the requirements of the Mineral Tenure Act (British Columbia), (2) with regard to all Company Mineral Claims, the Company has filed all required reports of exploration and development work (or has made payment in
lieu of conducting required exploration and development work) in a timely manner and they were properly filed and recorded with the Province of British Columbia and all Company Mineral Claims are in good standing as of the date hereof, (3)
any required fees regarding the Company Mineral Claims have been paid to date, and (4) the Company Mineral Claims are not subject to any competing claims that would materially adversely affect the conduct of the business of the Company or
its Subsidiaries as currently conducted, subject to any statutory or Crown reservations for such Company Mineral Claims.
|
| (v) |
Except as set out in the Company Public Documents and in Schedule 3.1(o) of the Company Disclosure Letter, no Person other than the Company and its Subsidiaries has any material interest in the
Company Mineral Interests or the production or profits therefrom or any royalty or streaming or similar interest in respect thereof or any right to acquire any such interest from the Company or any of its Subsidiaries.
|
- 53 -
| (xi) |
With respect to the Company Mineral Interests, true and correct copies of all material title documents and any amendments thereto in the possession or control of the Company or its Subsidiaries
have been made available to the Parent as of the date of this Agreement.
|
| (xiv) |
All activities conducted on the (A) Company Mineral Interests and (B) the Cerro San Pedro mining project located in San Luis Potosí, Mexico by the Company or its Subsidiaries or, to the knowledge
of the Company, by any other Person appointed by the Company, have been carried out in all material respects in accordance with customary mining industry practice and standards and applicable Laws, and neither the Company nor any of its
Subsidiaries, nor, to the knowledge of the Company, any other Person, has received any notice of any material breach of any such applicable Laws.
|
- 54 -
| (q) |
Scientific and Technical Information.
|
- 55 -
| (ii) |
The Company holds, through one of its Subsidiaries, the Cerro San Pedro mining project located in San Luis Potosí, Mexico, the operations of which are currently in a post-closure and remediation
phase. All material scientific and technical reports and related information with respect to such project were duly filed with the competent mining and administrative authorities during the period in which the project was operational in
Mexico, as well as those required in connection with the closure and remediation of the project. Copies of such reports and information have been made available, and none of such materials contained any Misrepresentation as of the date they
were provided. The Company has complied in all material respects with all applicable technical reporting, post-closure and remediation requirements in respect of such project and further represents and warrants that the Cerro San Pedro
project was duly completed in accordance with applicable mining obligations. There are no pending or outstanding administrative, environmental, or regulatory proceedings relating to the Cerro San Pedro project that would reasonably be
expected to result in a material liability of the Company or any of its Subsidiaries.
|
| (s) |
- 56 -
| (v) |
All amounts due or accrued for all salary, wages, bonuses, commissions, vacation pay, sick days and benefits under the Company Benefit Plans have either been paid or are accurately reflected in the
books and records of the Company and its Subsidiaries in all material respects in accordance with IFRS or, in the case of bonuses or other incentive payments not yet determined, the Company has made reasonable accruals or estimates therefor
in the books and records of the Company. All liabilities in respect of the Company Employees have or shall have been paid or accrued to the Effective Date, including premium contributions, remittances and assessments for employment
insurance, employer health tax, Canada Pension Plan, income tax, workers’ compensation and any other employment-related legislation.
|
- 57 -
| (vi) |
The Company and its Subsidiaries are in material compliance with all material terms and conditions of employment (including the terms of any applicable collective bargaining agreement) and
applicable Laws relating to employment or termination of employment, including pay equity, employees’ profit sharing (participación de los trabajadores en las utilidades de
las empresas) obligations, subcontracting regime (régimen de subcontratación) in terms of the Mexican Federal Labor Law (Ley Federal del Trabajo), assignment of employees and personnel provision services, wages, hours of work, overtime, vacation, human rights, employer health tax and social security contributions payment,
workers’ compensation and occupational health and safety.
|
| (viii) |
To the knowledge of the Company, each of the Company and its Subsidiaries has properly characterized retained individuals as either employees or independent contractors for the purposes of Taxes
and other applicable Laws, and none of them has received any notice from any Governmental Entity disputing such classification.
|
| (ix) |
Each and every Company Employee has all the necessary permits under applicable Laws to lawfully work in the country of their employment, including without limitation any working visa that may be
required. Each of the Company and its Subsidiaries has the necessary permits to employ each and every Company Employee in terms of applicable Laws, including without limitation any migratory permit to hire foreign employees, as applicable.
|
| (xi) |
As of the date hereof, no Company Employee who is at the manager level and above for the corporate office of the Company or who is on a site management team of the Company has given written notice
to the Company and/or its Subsidiaries of an intention to terminate employment and, to the knowledge of the Company, no such Company Employee intends to terminate employment. To the knowledge of the Company, no Company Employee has been
wrongfully terminated for cause as provided by the Ley Federal del Trabajo.
|
- 58 -
| (t) |
Absence of Certain Changes or Events. Except as disclosed in the Company
Public Documents, since December 31, 2024:
|
| (i) |
the Company and its Subsidiaries have conducted their respective businesses in the ordinary course in all material respects and have not taken any steps to take any actions which, if taken after
the date hereof, would require the Parent’s consent pursuant to Section 5.1 of this Agreement;
|
| (iv) |
- 59 -
- 60 -
| (y) |
No Expropriation. No property or asset of the Company or its
Subsidiaries (including any Company Mineral Interests) has been taken or expropriated or suffered a similar proceeding by any Governmental Entity nor has any notice or proceeding in respect thereof been given or commenced nor, to the
knowledge of the Company, is there any threat, intent or proposal to give any such notice or to commence any such proceeding.
|
| (z) |
Taxes.
|
- 61 -
| (vi) |
There are no Liens with respect to Taxes upon any of the assets of the Company or any of its Subsidiaries (other than Company Permitted Liens).
|
- 62 -
| (xiv) |
Neither the Company nor any Subsidiary of the Company (i) is, or has been, a member of any affiliated, consolidated, combined or unitary Tax group, other than a group the common parent of which is
the Company or any Subsidiary of the Company, or (ii) has any liability for any material amount of Taxes of any Person (other than the Company or current or former Subsidiary of the Company) arising from the application of U.S. Treasury
Regulations section 1.1502-6 (or any analogous provision of U.S. state or local or non-U.S. Tax law) or as a transferee or successor.
|
| (xv) |
Neither the Company nor any of its Subsidiaries is a party to, or is bound by or has any obligation under any material Tax Sharing Agreement.
|
| (xvi) |
The Company and each of its Subsidiaries retains all material tax, accounting and Corporate Records required by applicable Law to support any tax or accounting position, filing or claim made by
them with respect to Taxes.
|
| (xvii) |
Since December 31, 2024, the Company and each of its Subsidiaries has not incurred any material liability for Taxes arising from transactions outside the ordinary course of business consistent with
past practices.
|
| (xviii) |
The Company and each of its Subsidiaries will not be required, as a result of (i) a change in accounting method for a Tax period ending on or before the closing of the Arrangement, (ii) any closing
agreement with a Governmental Entity with respect to Taxes or (iii) any amounts received prior to the closing of the Arrangement, to include any material amount of additional taxable income for any Tax period beginning on or after the
closing of the Arrangement. The Company and each of its Subsidiaries does not have an application pending with any Governmental Entity requesting permission for any change in accounting method that relates to its business.
|
| (xix) |
The total fair market value of all the shares that are held directly or indirectly by the Company and that are shares of “foreign affiliates” of the Company (for purposes of the Tax Act) does not
exceed 75% of the total fair market value (determined without reference to debt obligations of any corporation resident in Canada in which the Company has a direct or indirect interest) of all the properties owned by the Company.
|
| (xx) |
Neither the Company, each of its Subsidiaries or any third party provider who has issued CFDIs in favor of the Company or any of its Subsidiaries are mentioned in the list provided under Article 69
B of the Código Fiscal de la Federación.
|
- 63 -
| (xxi) |
Neither the Company nor any of its Subsidiaries has entered into, or participated in, any “listed transaction” within the meaning of U.S. Treasury Regulations section 1.6011-4(b)(2).
|
| (xxii) |
Neither the Company nor any of its Subsidiaries has been a “distributing” corporation or a “controlled corporation” (each within the meaning of section 355(a)(1)(A) of the U.S. Tax Code) in any
distribution of stock during the two (2) year period ending on the date of this Agreement that was purported or intended to be governed by section 355 of the U.S. Tax Code (or so much of section 356 of the U.S. Tax Code as relates to
section 355 of the U.S. Tax Code).
|
| (xxiii) |
Neither the Company nor any of its Subsidiaries currently is, or has been within the past five (5) years, a “controlled foreign corporation” within the meaning of section 957 of the U.S. Tax Code
or a “passive foreign investment company” within the meaning of section 1297 of the U.S. Tax Code.
|
| (xxiv) |
(i) Neither the Company nor its Subsidiaries has taken or agreed to take any action that would prevent the Arrangement from qualifying as a “reorganization” within the meaning of section 368(a) of
the U.S. Tax Code and (ii) the Company is not aware of any agreement, plan or other circumstance that would prevent the Arrangement from qualifying as a “reorganization” within the meaning of section 368(a) of the U.S. Tax Code.
|
| (aa) |
Books and Records.
|
| (i) |
The Corporate Records have been maintained in all material respects in accordance with all applicable Laws, and the minute books of the Company and each of its Subsidiaries as made available to the
Parent are complete and accurate in all material respects, except for minutes relating to the Arrangement or this Agreement.
|
| (ii) |
The financial books and records and accounts of the Company and each of its Subsidiaries: (A) have been maintained, in all material respects, in accordance with IFRS; (B) are stated in reasonable
detail and accurately and fairly reflect, in all material respects, the transactions and dispositions of assets of the Company and its Subsidiaries; and (C) accurately and fairly reflect, in all material respects, the basis for the
Company’s consolidated financial statements.
|
- 64 -
| (dd) |
Benefit Plans.
|
| (ii) |
No Company Benefit Plan:
|
| (A) |
is a “registered pension plan”, a “retirement compensation arrangement”, a “deferred profit sharing plan”, or a “salary deferral arrangement”, as each such term is defined in the Tax Act;
|
| (B) |
is a “multi-employer plan” as such term is defined in subsection 8500(i) of the Regulations of Tax Act;
|
| (C) |
| (D) |
except as disclosed in Schedule 3.1(dd) of the Company Disclosure Letter, provides for health and welfare benefits which are not fully-insured;
|
| (E) |
provides for retiree or post-termination benefits to Company Employees or former Company Employees or beneficiaries or dependents thereof (other than as required by applicable Laws); or
|
| (F) |
provides benefits to independent contractors.
|
- 65 -
| (vii) |
There is no entity other than the Company or its Subsidiaries participating in any Company Benefit Plan.
|
- 66 -
| (ee) |
Environmental. Except for any matters that, individually or in the
aggregate, would not have or would not reasonably be expected to have a Company Material Adverse Effect:
|
| (i) |
since January 1, 2022, all facilities and operations of the Company and its Subsidiaries have been conducted, and are now, in compliance with all Environmental Laws;
|
| (v) |
the Company has posted with the relevant regulatory authorities all financial assurance required to be posted pursuant to Environmental Laws or Environmental Permits, including any financial
assurance required in connection with reclamation, remediation or closure plans for (A) the Company Mineral Interests, and (B) the Cerro San Pedro mining project located in San Luis Potosí, Mexico;
|
| (vi) |
to the knowledge of the Company, there are no changes in the status, terms or conditions of any Environmental Permits held by the Company or its Subsidiaries or any renewal, modification,
revocation, reassurance, alteration, transfer or amendment of any such Environmental Permits, or any review by, or approval of, any Governmental Entity of such Environmental Permits or in connection with the execution or delivery of this
Agreement, the consummation of the transactions contemplated herein or the continuation of the business of the Company or its Subsidiaries following the Effective Date; and
|
- 67 -
- 68 -
| (ii) |
Restrictions on Business Activities. There is no agreement, judgement,
injunction, order or decree binding upon the Company or any of its Subsidiaries that has or would reasonably be expected to have the effect of prohibiting or restricting any acquisition of property by the Company or any such Subsidiary or
the conduct of business by the Company or any such Subsidiary as currently conducted (including following the transaction contemplated by this Agreement), other than the Company Credit Agreement and such agreements, judgements,
injunctions, orders or decrees which would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.
|
| (kk) |
Corrupt Practices Legislation.
|
| (i) |
None of the Company, its Subsidiaries and affiliates, nor, to the Company’s knowledge, any of their Representatives or other Persons acting on behalf of the Company or any its Subsidiaries or
affiliates has, directly or indirectly, offered, promised, agreed, paid, authorized, given or taken any act in furtherance of any such offer, promise, agreement, payment or authorization on behalf of the Company or its Subsidiaries,
anything of value, directly or indirectly, to any official of a Governmental Entity, any political party or official thereof or any candidate for political office, for the purpose of any of the following:
|
| (A) |
influencing any action or decision of such person in such person’s official capacity, including a decision to fail to perform such person’s official function in order to obtain or retain an
advantage in the course of business;
|
| (B) |
inducing such person to use such person’s influence with any Governmental Entity to affect or influence any act or decision of such Governmental Entity to assist the Company or one of its
Subsidiaries in obtaining or retaining business for, with, or directing business to, any Person or otherwise to obtain or retain an advantage in the course of business; or
|
| (C) |
to assist the Company or one of its Subsidiaries in obtaining or retaining business for, with, or directing business to, any Person.
|
- 69 -
| (iii) |
All contracts and arrangements between the Company or one of its Subsidiaries and any other Person are in compliance with Company Applicable Anti-Corruption Law. Since January 1, 2023, the Company
and its Subsidiaries have maintained policies and procedures applicable to it and their respective directors, officers, employees, agents and representatives in place in respect thereof as are appropriate to prevent and detect violations of
Company Applicable Anti-Corruption Law.
|
| (iv) |
None of the Company or its Subsidiaries nor any of its directors, officers, employees, agents or representatives has (A) conducted or initiated any review, audit or internal investigation that
concluded that the Company or one of its Subsidiaries or any of their respective directors, officers, employees, agents or representatives has materially violated any Company Applicable Anti-Corruption Law, or (B) made a voluntary, directed
or involuntary disclosure to any Governmental Entity responsible for enforcing Company Applicable Anti-Corruption Law, in each case with respect to any alleged act or omission arising under or relating to material non-compliance with any
such Laws, or received any notice, request or citation from any person alleging material non-compliance with any such Laws.
|
| (v) |
The Company and its Subsidiaries have maintained systems of internal controls intended to ensure compliance by the Company, its Subsidiaries and their respective Representatives, with Company
Applicable Anti-Corruption Law.
|
- 70 -
| (ll) |
Sanctions.
|
| (i) |
Neither the Company, nor any of its Subsidiaries, nor any of their respective directors, officers or employees nor, to the knowledge of the Company, any agents or persons acting on any of their
behalf: (A) is a Restricted Party; or (B) has received written notice of, or has knowledge of, any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.
|
| (ii) |
None of the Company, any of its Subsidiaries any director, officer, employee or, to the knowledge of the Company, agent of the Company or any of its Subsidiaries is a Person that is, or is owned or
controlled by Persons that are: (A) the subject/target of any Sanctions, or (B) located, organized or resident in a country or territory that is the subject of Sanctions, including Russia, Crimea, Donetsk People’s Republic and the Luhansk
People’s Republic of Ukraine, the Kherson and the Zaporizhzhia oblasts of Ukraine, Cuba, Iran, North Korea, and Syria.
|
| (iii) |
The Company, its Subsidiaries, their respective directors, officers, employees and, to the knowledge of the Company, agents are in compliance with all applicable Sanctions. The Company and its
Subsidiaries have instituted and maintain policies and procedures reasonably designed to ensure compliance with applicable Sanctions.
|
| (iv) |
Neither the Company nor any of its Subsidiaries has knowingly engaged in, or is now knowingly engaged in, any dealings or transactions with any Person or in property that is owned, held or
controlled by or on behalf of any Person, or in any country or territory, that at the time of the dealing or transaction is or was a Restricted Party or the subject of Sanctions, in violation of Sanctions.
|
| (mm) |
Modern Slavery
|
| (i) |
The Company and its Subsidiaries have acted in compliance with the fundamental principles defined and protected by the Universal Declaration of Human Rights, the fundamental principles of the
International Labor Organization and rules relating to the prohibition of forced labour, child labour and human trafficking in their operations and supply chains.
|
| (ii) |
The Company and its Subsidiaries are in compliance with the requirements of applicable Modern Slavery Laws.
|
| (iii) |
The Company and its Subsidiaries have customary policies and procedures in place reasonably designed to ensure compliance with applicable Modern Slavery Laws.
|
| (nn) |
Bankruptcy. Neither the Company nor any of its Subsidiaries has
commenced or contemplated any proceeding, or filed or contemplated the filing of any petition, in any court relating to the bankruptcy, concurso mercantil,
reorganization, insolvency, dissolution, liquidation or relief from debtors of the Company or any of its Subsidiaries (including pursuant to any corporate law relating to arrangements, reorganizations or restructurings). There is no legal
basis for the bankruptcy, insolvency, dissolution or liquidation of the Company or any of its Subsidiaries.
|
- 71 -
| (oo) |
Privacy and Security.
|
| (iii) |
Neither the Company nor its Subsidiaries have received any notice of any claims, investigations or alleged violations of applicable Privacy Laws including with respect to Personal Information
collected or possessed by or otherwise subject to the control of the Company and its Subsidiaries.
|
| 3.2 |
Survival of Representations and Warranties
|
The representations and warranties of the Company contained in this Agreement shall not survive the completion of the Arrangement and shall expire and be terminated on
the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms.
- 72 -
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PARENT AND THE PURCHASER
| 4.1 |
Representations and Warranties
|
Except as disclosed in (x) the forms, documents and reports filed or furnished by Parent on EDGAR and SEDAR+ (including all exhibits, supplements and schedules
thereto and information incorporated by reference) and publicly available since January 1, 2023 and prior to the date hereof (but excluding any disclosures set forth in any “risk factors” section, any disclosures in any “forward looking
statements” section and any other disclosures included therein in each case to the extent they are predictive or forward-looking in nature) or (y) the Parent Disclosure Letter (which disclosures shall apply against any representations and
warranties to which it is reasonably apparent it should relate), the Parent and the Purchaser jointly and severally hereby represent and warrant to the Company as follows, and acknowledge that the Company is relying upon such representations and
warranties in connection with the entering into of this Agreement:
| (a) |
Organization and Qualification. Except as disclosed in Schedule 4.1(a)
of the Parent Disclosure Letter, the Parent, the Purchaser and each of the Parent Material Subsidiaries is duly incorporated or an entity duly created and validly existing under all applicable Laws of its jurisdiction of incorporation,
continuance or creation and has the requisite power and authority to own its assets and conduct its business as now owned and conducted. The Parent and each of the Parent Material Subsidiaries is duly qualified to carry on business and
is in good standing in each jurisdiction in which the character of its properties or the nature of its activities makes such qualification necessary, except where the failure to be so qualified would not, individually or in the
aggregate, have a Parent Material Adverse Effect. True and complete copies of the constating documents of the Parent and each of the Parent Material Subsidiaries have been delivered or made available to the Company, and no action has
been taken to amend or supersede such documents.
|
| (b) |
Authority Relative to this Agreement. Each of the Parent and the
Purchaser has the requisite corporate power and authority to enter into this Agreement and to perform its obligations hereunder. The execution and delivery of this Agreement by the Parent and the Purchaser and the performance by the
Parent and the Purchaser of their obligations under this Agreement have been duly authorized by the Parent Board and the Purchaser Board and no other corporate proceedings on the part of the Parent or the Purchaser or vote of any
holders of any class of securities of the Parent are necessary to authorize this Agreement or consummate the Arrangement or other transactions contemplated hereby, other than the Parent Stockholder Approvals. This Agreement has been
duly executed and delivered by the Parent and the Purchaser and constitutes a valid and binding obligation of the Parent and the Purchaser, enforceable by the Company against the Parent and the Purchaser in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency, reorganization or other Laws of general application relating to or affecting creditors’ rights generally, and subject to the qualification that equitable
remedies, including specific performance, may be granted only in the discretion of a court of competent jurisdiction.
|
- 73 -
| (c) |
No Conflict; Required Filings and Consent.
|
| (i) |
The execution and delivery by each of the Parent and the Purchaser of this Agreement and the performance by it of its obligations hereunder and the completion of the Arrangement and the other
transactions contemplated hereby do not and will not (or would not with the giving of notice, the lapse of time or both, or the happening of any other event or condition):
|
|
(A)
|
violate, conflict with or result in a breach of:
|
| (1) |
the constating documents of the Parent or those of any of its Subsidiaries;
|
| (2) |
any Parent Material Contract or Authorization to which the Parent or any of its Subsidiaries is a party or by which the Parent or any of its Subsidiaries is bound, except as would not,
individually or in the aggregate, have a Parent Material Adverse Effect; or
|
| (3) |
any Law to which the Parent or its Subsidiaries is subject or by which the Parent or its Subsidiaries is bound, subject to receipt of the Regulatory Approvals, and except as would not,
individually or in the aggregate, have a Parent Material Adverse Effect;
|
| (B) |
give rise to any right of termination, allow any Person to exercise any rights, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the
loss of any benefit to which the Parent or any of its Subsidiaries is entitled, under any Contract or Authorization to which the Parent or any of its Subsidiaries is a party, except as would not, individually or in the aggregate, have a
Parent Material Adverse Effect; or
|
| (C) |
give rise to any pre-emptive rights including rights of first refusal or rights of first offer, or trigger any change in control provisions or any restriction or limitation under any Contract or
Authorization, or result in the imposition of any Lien (other than a Parent Permitted Lien) upon any of the Parent’s assets or the assets of any of its Subsidiaries, except as would not, individually or in the aggregate, have a Parent
Material Adverse Effect.
|
| (ii) |
Other than obtaining the Regulatory Approvals, compliance with the rules and policies of the TSX and the NYSE, and obtaining the Interim Order and the Final Order, no Authorization of, or other
action by or in respect of, or filing, recording, registering or publication with, or notification to, any Governmental Entity is necessary on the part of the Parent or any of its Subsidiaries in order for the Parent to proceed with the
execution and delivery of this Agreement and the consummation of the Arrangement and the other transactions contemplated by this Agreement, except as would not, individually or in the aggregate, have a Parent Material Adverse Effect.
|
- 74 -
| (d) |
Subsidiaries.
|
| (i) |
As of the date of this Agreement, the Parent owns, directly or indirectly, all of the outstanding equity interests in the Purchaser.
|
| (ii) |
No Parent Material Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Parent, from making any other distribution on such Subsidiary’s shares to the
Parent, or from repaying to the Parent any loans or advances made thereto.
|
| (iii) |
The following information with respect to each Parent Material Subsidiary (other than the Purchaser) is accurately set out in the Parent’s annual report (Form 10-K) for the year ended December
31, 2024 forming part of the Parent Public Documents: (A) its name; (B) the Parent’s percentage equity ownership of it; and (C) its jurisdiction of incorporation, organization or formation.
|
| (iv) |
The Parent beneficially owns, directly or indirectly, all of the issued and outstanding securities of each Parent Material Subsidiary and there are no outstanding options, rights, entitlements,
understandings or commitments (contingent or otherwise) to acquire any issued or unissued securities or other ownership interests in any Parent Material Subsidiary.
|
| (v) |
All of the outstanding stock or other equity securities in the capital of each Parent Material Subsidiary are: (A) validly issued, fully-paid and, where the concept exists, non-assessable (and no
such stock or other equity interests have been issued in violation of any pre-emptive or similar rights) and all such stock or other equity interests are owned free and clear of all Liens (other than Parent Permitted Liens); and (B) free
of any other restrictions including any restriction on the right to vote, sell or otherwise dispose of shares or other equity interests.
|
| (e) |
Compliance with Laws and Constating Documents.
|
| (i) |
The Parent and each of its Subsidiaries is and, since January 1, 2023, has been, in compliance, in all material respects, with all applicable Laws in each jurisdiction in which it conducts
business and, except as disclosed in Schedule 4.1(e)(i) of the Parent Disclosure Letter and to the knowledge of the Parent, neither the Parent nor any of its Subsidiaries is under investigation with respect to any material violation of
applicable Laws from any Governmental Entity, or has received any notice that any material violation of any Law is being or may be alleged from any Governmental Entity.
|
- 75 -
| (ii) |
Pursuant to the DGCL, no appraisal rights are available to Parent Stockholders with respect to the transactions contemplated by the Agreement.
|
| (iii) |
As of the date hereof, none of the Parent or its Subsidiaries is in conflict with, or in default (including cross defaults) under or in violation of its articles or by-laws or equivalent
organizational documents, except as would not, individually or in the aggregate, have a Parent Material Adverse Effect.
|
| (f) |
Parent Authorizations.
|
| (i) |
Except as disclosed in Schedule 4.1(f) of the Parent Disclosure Letter, the Parent and its Subsidiaries have obtained, and are in compliance in all material respects with, all Authorizations
required by Law (including Environmental Law) that are necessary to conduct their business as now being conducted, and such Authorizations are in full force and effect in accordance with their terms. True copies of all such material
Authorizations have been made available to the Company.
|
| (ii) |
The Parent and its Subsidiaries have fully complied with and are in compliance with all such Authorizations, except, in each case, for such non-compliance which, individually or in the aggregate,
would not have a Parent Material Adverse Effect.
|
| (iii) |
Except as disclosed in Schedule 4.1(f) of the Parent Disclosure Letter, no action, investigation or proceeding is pending or, to the knowledge of the Parent, threatened against the Parent or any
of its Subsidiaries in respect of or regarding any such Authorization that would reasonably be expected to result in a suspension, loss or revocation of any such Authorization, except in each case, for revocations, non-renewals or
amendments which would not, individually or in the aggregate, have a Parent Material Adverse Effect.
|
| (g) |
Capitalization and Listing.
|
| (i) |
The authorized capital stock of the Parent consists of 900,000,000 Parent Shares. As at the close of business on October 31, 2025, there were: (A) 642,204,955 Parent Shares validly issued and
outstanding as fully-paid and non-assessable shares of the Parent; (B) 113,587 restricted share units providing for the issuance of up to 113,587 Parent Shares upon the settlement thereof; (C) 4,762,440 outstanding performance share units
providing for the issuance of up to 11,349,323 Parent Shares upon the settlement thereof; and (D) 191,425 outstanding options to acquire Parent Shares providing for the issuance of up to 191,425 Parent Shares upon the exercise thereof.
(1) There are no other options, warrants, conversion privileges, calls or other rights, shareholder rights plans, agreements, arrangements, commitments, or obligations of the Parent or any of its Subsidiaries requiring any of them to
issue or sell any shares or other securities of the Parent or of any of its Subsidiaries, or any securities or obligations convertible into, exchangeable or exercisable for, or otherwise carrying or evidencing the right or obligation to
acquire any securities of the Parent (including Parent Shares) or any Subsidiary of the Parent, and (2) except as disclosed in the Parent Public Documents, no Person is entitled to any pre-emptive or other similar right granted by the
Parent or any of its Subsidiaries.
|
- 76 -
| (ii) |
Except as disclosed in Schedule 4.1(g)(ii) of the Parent Disclosure Letter, there are no outstanding contractual obligations of the Parent or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any Parent Shares or any shares of any of its Subsidiaries, or qualify securities for public distribution in Canada or elsewhere, or with respect to the, voting or disposition of any securities of the Parent or any of
its Subsidiaries. No Subsidiary of the Parent owns any Parent Shares.
|
| (iii) |
All outstanding securities of the Parent have been issued in material compliance with all applicable Laws and any pre-emptive or similar rights applicable to them.
|
| (iv) |
There are no outstanding bonds, debentures or other evidences of indebtedness of the Parent or any of its Subsidiaries, or any other agreements, arrangements, instruments or commitments of any
kind giving any Person, directly or indirectly, the right to vote (or that are convertible or exercisable for securities having the right to vote) with the holders of the Parent Shares on any matters.
|
| (v) |
All Consideration Shares will be issued in compliance with all applicable Securities Laws and, when issued in accordance with the terms of the Arrangement, be duly authorized, validly issued,
fully-paid and non-assessable Parent Shares, free and clear of all Liens (other than Liens created by the holders thereof on issuance).
|
| (h) |
Shareholder and Similar Agreements. Neither the Parent nor any of its
Subsidiaries is party to any shareholder, pooling, voting trust or other similar agreement relating to the ownership or voting of any issued and outstanding Parent Shares or the shares of any Subsidiaries of the Parent.
|
| (i) |
Reporting Issuer Status.
|
| (i) |
As of the date hereof, the Parent is a reporting issuer in each of the provinces and territories of Canada, is not on the list of reporting issuers in default (or the equivalent) under applicable
Securities Laws in any such province or territory and is in material compliance with all Securities Laws applicable therein.
|
| (ii) |
The Parent has not taken any action to cease to be a reporting issuer in any province or territory of Canada nor has the Parent received notification from the Ontario Securities Commission, as
principal regulator, or any other applicable securities commissions or securities regulatory authority of a province or territory of Canada seeking to revoke the Parent’s reporting issuer status. No delisting of, suspension of trading in,
or cease trade order with respect to, any securities of the Parent and, to the knowledge of the Parent, no inquiry or investigation (formal or informal) of any Canadian Securities Authority has occurred, is in effect or ongoing or, to the
knowledge of the Parent, has been threatened in writing with respect to the foregoing.
|
- 77 -
| (iii) |
The Parent is not an investment company and is not required to be registered as an investment company under the U.S. Investment Company Act.
|
| (j) |
Reports. Since January 1, 2023, the Parent has filed with all
applicable Governmental Entities the Parent Public Documents that the Parent is required to file in accordance with applicable Securities Laws. The Parent Public Documents as of their respective dates (and the dates of any amendments
thereto): (i) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading, and (ii) complied in all material respects with the requirements of applicable Securities Laws. Any amendments to the Parent Public Documents required to be made have been filed on a timely basis with the
applicable Governmental Entity. The Parent has not filed any confidential material change report with any Governmental Entity which at the date hereof remains confidential and, except as disclosed in Schedule 4.1(j) of the Parent
Disclosure Letter, does not have any unresolved comments from the staff of the U.S. SEC.
|
| (k) |
Stock Exchange Matters.
|
| (i) |
The Parent Shares are listed on the NYSE and are not listed or quoted on any market other than the NYSE.
|
| (ii) |
The Parent is in compliance in all material respects with the applicable listing and corporate governance rules and regulations of the NYSE. The Parent has not taken any action which would be
reasonably expected to result in the delisting or suspension of the Parent Shares on or from the NYSE.
|
| (l) |
Financial Statements.
|
| (i) |
The audited consolidated financial statements for the Parent and its Subsidiaries as at and for the fiscal years ended December 31, 2024 and 2023, including the notes thereto, the reports by the
Parent’s auditors thereon and related management’s discussion and analysis, have been, and all financial statements of the Parent which are publicly disseminated by the Parent in respect of any subsequent periods prior to the Effective
Date will be, (A) prepared in accordance with GAAP applied on a basis consistent with prior periods and all applicable Laws, and (B) present fairly, in all material respects, the assets, liabilities (whether accrued, absolute, contingent
or otherwise), consolidated financial position and results of operations of the Parent and its Subsidiaries as of the respective dates thereof and for the periods indicated therein, and its results of operations and cash flows for the
respective periods covered thereby (except as may be indicated expressly in the notes thereto). There have been no material changes to the Parent’s accounting policies applied in the preparation of the aforementioned financial statements,
except as described in the Parent Public Documents, since December 31, 2024.
|
- 78 -
| (ii) |
The Parent has established and maintains a system of internal control over financial reporting and disclosure controls and procedures (as such terms are defined in applicable U.S. Securities
Laws); such disclosure controls and procedures are designed to ensure that material information relating to the Parent, including its consolidated Subsidiaries, required to be disclosed by the Parent in the reports that it files or
submits under applicable U.S. Securities Laws is accumulated and communicated to the Parent’s principal executive officer and its principal financial officer to allow timely decisions regarding required disclosure; and such disclosure
controls and procedures are effective to ensure that information required to be disclosed by the Parent in the reports that it files or submits under applicable U.S. Securities Laws is recorded, processed, summarized and reported within
the time periods specified in applicable U.S. Securities Laws, and further designed and maintained to provide reasonable assurance regarding the reliability of the Parent’s financial reporting and the preparation of the Parent financial
statements for external purposes in accordance with GAAP. There is no significant deficiency or material weakness in the design or operation of internal controls of financial reporting (as defined in applicable U.S. Securities Laws)
utilized by the Parent or its Subsidiaries, and, since January 1, 2024, there has not been, any illegal act or fraud, whether or not material, that involves management or other employees who have a significant role in the Parent’s
internal controls. The principal executive officer and the principal financial officer of the Parent have made all certifications required by the Sarbanes-Oxley Act, the U.S. Exchange Act and any related rules and regulations promulgated
by the U.S. SEC with respect to the Parent Public Documents, and the statements contained in such certifications were complete and correct in all material respects as of the dates they were made.
|
| (iii) |
Since January 1, 2024, neither the Parent nor any of its Subsidiaries nor, to the Parent’s knowledge, any Representative of the Parent or any of its Subsidiaries has received any complaint,
allegation or claim, whether written or oral, alleging that the accounting or auditing practices or internal auditing controls of the Parent or any of its Subsidiaries are not compliant with applicable Laws or GAAP, which has not been
resolved to the satisfaction of the audit committee of the Parent Board.
|
| (m) |
No Undisclosed Liabilities. The Parent and its Subsidiaries, on a
consolidated basis, have no material outstanding liabilities or obligations of any nature, whether or not accrued, contingent, unasserted or absolute, except for: (A) liabilities and obligations that are specifically presented on the
audited balance sheet of the Parent as of December 31, 2024 or disclosed in the notes thereto; (B) liabilities and obligations incurred in the ordinary course; or (C) liabilities and obligations incurred in connection with the
Arrangement and this Agreement (including transaction related expenses).
|
- 79 -
| (n) |
Interest in Properties and Mineral Rights.
|
| (i) |
Schedule 4.1(n) of the Parent Disclosure Letter discloses, as of the date of this Agreement: (A) all material real property owned by the Parent and its Subsidiaries (“Parent Owned Real Property”); (B) all material real property leased, subleased, licensed and/or otherwise used or occupied (whether as tenant, subtenant, licensee or pursuant to any
other occupancy arrangement) by the Parent or its Subsidiaries, in each case, in connection with the operation of the business of the Parent and its Subsidiaries as it is now being conducted (“Parent Leased Real Property” and together with the Parent Owned Real Property, the “Parent Property”); and (C) all Mineral
Rights, concessions, leases, option agreements, exploration agreements, and mining claims and millsites of the Parent and its Subsidiaries that are material to the operation of their business as currently conducted (collectively, with the
Parent Property, the “Parent Mineral Interests”).
|
| (ii) |
The Parent or one of its Subsidiaries is the sole legal holder of record of, and is the sole legal registered and beneficial owner of, and has good and valid title to, or a valid leasehold or
other contractual interest in, the Parent Mineral Interests, and owns good and marketable title to all fee surface and minerals, patented mining claims and government lots comprising portions of the Parent Owned Real Property, free and
clear of all Liens (except the Parent Permitted Liens) and claims. All leasehold contracts of the Parent and its Subsidiaries are in good standing and are valid, binding and enforceable in accordance with their respective terms and there
does not exist under any such lease any material default or any event which (with or without due notice or lapse of time or both) would constitute a material default, and the Parent and its Subsidiaries are in compliance with any material
condition or restriction under any leasehold contracts.
|
| (iii) |
All of the mineral claims held by the Parent and its Subsidiaries in the Mineral Titles Online Registry maintained by the Province of British Columbia, the unpatented lode mining claims and
mineral concessions comprising Parent Mineral Interests, in each case, have been properly located and are recorded or in the process of being recorded in compliance with applicable Law in all material respects and are comprised of valid
and subsisting mineral claims.
|
| (iv) |
The Parent Mineral Interests are in good standing under applicable Law and, to the knowledge of the Parent, all work required to be performed and filed in respect thereof has been performed and
filed in all material respects, all Taxes, rentals, fees, expenditures and other payments in respect thereof have been paid or incurred in all material respects, and all material filings in respect thereof, including applications for
renewals or extensions of the Mineral Rights comprising the Parent Mineral Interests, have been made. To the knowledge of the Parent, the Parent or a Subsidiary of the Parent has a public or private right of access to all the Parent
Mineral Interests. Without limiting the foregoing:
|
- 80 -
| (A) |
with respect to any unpatented mining claims and millsites comprising portions of the Parent Mineral Interests (collectively, the “Parent Unpatented Claims”), (1) all such Parent Unpatented Claims were properly located by qualified locators on federal public domain land open to appropriation by mineral location, (2) location certificates
prepared in compliance with applicable Law for all such Parent Unpatented Claims were timely and properly recorded and filed with the appropriate Governmental Entities, (3) when required with respect to any such Parent Unpatented Claims,
a sufficient amount of annual assessment work was timely and properly performed with respect to each of those Parent Unpatented Claims, and annual affidavits evidencing the performance of such work were timely and properly filed and
recorded with the appropriate Governmental Entities, (4) when required with respect to any such Parent Unpatented Claims, annual claim maintenance fees (including the claim maintenance fees required to maintain the Parent Unpatented
Claims through the assessment year ending on September 1, 2026), have been paid, and annual affidavits evidencing the payment of such fees have been timely and properly filed and recorded with the appropriate Governmental Entities, and
(E) there are no unpatented mining claims or millsites owned by third parties which conflict with any of the Parent Unpatented Claims in a manner that would materially adversely affect the conduct of the business of the Parent or any
Subsidiary as currently conducted; and
|
| (B) |
with respect to any mineral claims held by the Parent and its Subsidiaries in the Mineral Titles Online Registry maintained by the Province of British Columbia comprising portions of the Parent
Mineral Interests (collectively, the “Parent Mineral Claims”), (1) all such Parent Mineral Claims are recorded in accordance with the requirements of the Mineral
Tenure Act (British Columbia), (2) with regard to all Parent Mineral Claims, the Parent has filed all required reports of exploration and development work (or has made payment in lieu of conducting required exploration and
development work) or filings in a timely manner and they were properly filed and recorded with the Province of British Columbia and all Parent Mineral Claims are in good standing as of the date hereof, (3) any required fees regarding the
Parent Mineral Claims have been paid to date, and (4) the Parent Mineral Claims are not subject to any competing claims that would materially adversely affect the conduct of the business of the Parent or its Subsidiaries as currently
conducted, subject to any statutory or Crown reservations for such Parent Mineral Claims.
|
- 81 -
| (v) |
Except as set out in the Parent Public Documents and as set out in Schedule 4.1(n) of the Parent Disclosure Letter, no Person other than the Parent and its Subsidiaries has any material interest
in the Parent Mineral Interests or the production or profits therefrom or any royalty or streaming or similar interest in respect thereof or any right to acquire any such interest from the Parent or any of its Subsidiaries.
|
| (vi) |
Except as set out in Schedule 4.1(n) of the Parent Disclosure Letter, there are no back-in rights, earn-in rights, rights of first refusal or similar provisions or rights which would materially
affect the Parent’s or a Subsidiary’s interest in the Parent Mineral Interests.
|
| (vii) |
There are no material restrictions on the ability of the Parent and its Subsidiaries to (A) use or exploit the Parent Mineral Interests in the manner currently used or exploited, or (B) transfer
the Parent Mineral Interests, except, in each case, any restrictions imposed by Law or the terms of the Parent Mineral Interests.
|
| (viii) |
Except as disclosed in Schedule 4.1(n) of the Parent Disclosure Letter, neither the Parent nor any of its Subsidiaries has received any notice, whether written or oral, from any Governmental
Entity or any Person of any revocation, annulment, suspension, expropriation, or challenge to ownership, adverse claim or intention to revoke, expropriate or challenge the interest of the Parent or its Subsidiaries in any of the Parent
Mineral Interests and, to the knowledge of the Parent, there is no intention or proposal to give such notice. There are no material disputes regarding boundaries, easements, rights of way, covenants or other matters relating to any of the
Parent Mineral Interests.
|
| (ix) |
Except as disclosed in the Parent Public Documents, the Parent and its Subsidiaries have all surface rights,
including fee simple estates, leases, easements, rights of way and permits or licences from landowners or Governmental Entities permitting the use of land by the Parent and its Subsidiaries, and Parent Mineral Rights that are required as at the date of this Agreement to conduct its current operations.
|
| (x) |
Except as disclosed in Schedule 4.1(n) of the Parent Disclosure Letter, all mines and mineral properties formerly owned by the Parent or any of its Subsidiaries which were abandoned by the Parent
or any of its Subsidiaries were abandoned in all material respects in accordance with customary mining industry practice and standards and applicable Laws. The Parent Public Documents accurately disclose, in all material respects, all
material remediation and reclamation obligations known to the Parent as of the applicable dates set forth in such Parent Public Documents.
|
| (xi) |
With respect to the Parent Mineral Interests, true and correct copies of all material title documents and any amendments thereto in the possession or control of the Parent or its Subsidiaries
have been made available to the Company as of the date of this Agreement.
|
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| (xii) |
The Parent has provided the Company with access to full and complete copies of all material exploration information and data within its possession or control including all material geological,
geophysical and geochemical information and data (including all drill, sample and assay results and all maps) and all of its technical reports, feasibility studies and other similar reports and studies concerning the Parent Mineral
Interests and the Parent or one of its Subsidiaries has the sole right, title and ownership of all such information, data, reports and studies.
|
| (xiii) |
The execution, delivery and performance of this Agreement by the Parent will not violate, conflict with or result in a violation or breach of any provision of, or require a consent, approval or
notice under or constitute a default under or result in a right of termination under or with respect to any of the Parent Mineral Interests.
|
| (xiv) |
All activities conducted on the Parent Property by the Parent or its Subsidiaries or, to the knowledge of the Parent, by any other Person appointed by the Parent, have been carried out in all
material respects in accordance with customary mining industry practice and standards and applicable Laws, and neither the Parent nor any of its Subsidiaries, nor, to the knowledge of the Parent, any other Person, has received any notice
of any material breach of any such applicable Laws.
|
| (xv) |
There have been no incidents of material non-compliance with safety legislation in connection with operations or activities at the Parent’s or any of its Subsidiaries’ mine sites in the 18 months
preceding the date of this Agreement.
|
| (xvi) |
Neither the Parent, nor any of its Subsidiaries, nor to the knowledge of the Parent, any Person which owns or controls the Parent or any of its Subsidiaries, has been notified by any Governmental
Entity, that the Parent or any of its Subsidiaries is: (A) ineligible to receive any mining permit (including any surface mining permit); or (B) under investigation to determine whether their eligibility to receive such permits should be
revoked.
|
| (o) |
Mineral Reserves and Resources. The estimates of mineral resources and
mineral reserves for mineral properties for the Parent or its Subsidiaries, as set forth in the Parent Public Documents, were prepared, in all material respects, in accordance with customary mining, engineering, geoscience and other
applicable industry standards and practices and disclosed, in all material respects, in accordance with applicable Laws, including the requirements of Regulation S-K 1300. There has been no material reduction in the aggregate amount of
estimated mineral reserves, estimated mineral resources or mineralized material with respect to such properties, from the amounts most recently set forth in the Parent Public Documents, with the exception of depletion in the ordinary
course. The information provided by the Parent and its Subsidiaries to the “qualified persons” (as defined in Regulation S-K 1300) in connection with the preparation of such estimates was accurate and complete in all material respects
at the time such information was provided.
|
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| (p) |
Scientific and Technical Information. The Palmarejo, Rochester,
Kensington, Las Chispas and Wharf properties are the only properties material to the Parent for the purpose of Regulation S-K 1300. The technical reports prepared for the Parent in respect of the Palmarejo, Rochester, Kensington, Las
Chispas and Wharf properties (the “Parent Technical Reports”) complied in all material respects with the requirements of Regulation S-K 1300 at the time of filing
thereof. The Parent made available to the authors of the Parent Technical Reports, prior to issuance thereof, for the purpose of preparing such reports, all information requested by them and none of such information contained any
Misrepresentation as of the time such information was provided. The Company is in compliance in all material respects with the provisions of Regulation S-K 1300, has filed all technical reports required thereby, and there has been no
material change of which the Parent is aware that would materially disaffirm or materially change any aspect of the Parent Technical Reports or that would require the filing of new technical reports under Regulation S-K 1300.
|
| (q) |
Personal Property. The Parent and its Subsidiaries have good and valid
title to, or a valid and enforceable leasehold interest in, all personal property that is, individually or in the aggregate, material to the operation of the business of the Parent and its Subsidiaries as currently conducted, free and
clear of any Liens (other than Parent Permitted Liens).
|
| (r) |
Employment Matters.
|
| (i) |
Other than as provided for or permitted by this Agreement or the Plan of Arrangement, neither the Parent nor its Subsidiaries has entered into any written or oral agreement or understanding
providing for employment, severance, retention, bonus, golden parachute, change of control, or termination payments or entitlements to any current or former Parent Employee in connection with the termination of their position or their
employment with the Parent or its Subsidiaries or in connection with the consummation of the Arrangement.
|
| (ii) |
As at the date hereof, neither the Parent nor any of its Subsidiaries (A) is a party to any collective bargaining agreement, or (B) is subject to any union certification or application for
certification or, to the knowledge of the Company, threatened or apparent union-organizing campaigns for employees not covered under a collective bargaining agreement. To the knowledge of the Parent, no labour strike, lock-out, slowdown
or work stoppage is pending or threatened against or directly affecting the Parent or any of its Subsidiaries. As at the date hereof, there are no employee associations, voluntary recognized or certified unions authorized to represent any
of the employees of the Company or any of its Subsidiaries.
|
- 84 -
| (iii) |
Except as set out in Schedule 4.1(r)(iii) of the Parent Disclosure Letter, all amounts due or accrued for all salary, wages, bonuses, commissions, vacation pay, sick days and benefits under the
Parent Benefit Plans have either been paid or are accurately reflected in the books and records of the Parent and its Subsidiaries in all material respects in accordance with GAAP or, in the case of bonuses or other incentive payments not
yet determined, the Parent has made reasonable accruals or estimates therefor in the books and records of the Parent. All liabilities in respect of the Parent Employees have or shall have been paid or accrued to the Effective Date,
including premium contributions, remittances and assessments for employment insurance, employer health tax, Canada Pension Plan, income tax, workers’ compensation and any other employment-related legislation.
|
| (iv) |
The Parent and its Subsidiaries are in material compliance with all material terms and conditions of employment (including the terms of any applicable collective bargaining agreement) and
applicable Laws relating to employment or termination of employment, including pay equity, employees’ profit sharing (participación de los trabajadores en las utilidades de las empresas)
obligations, subcontracting regime (régimen de subcontratación) in terms of the Mexican Federal Labor Law (Ley Federal
del Trabajo), assignment of employees and personnel provision services, wages, hours of work, overtime, vacation, human rights, employer health tax and social security contributions payment, workers’ compensation and occupational
health and safety.
|
| (v) |
There are no material employment-related claims, complaints, investigations or orders under applicable Laws respecting employment now pending or, to the knowledge of the Parent, threatened
against the Parent or any of its Subsidiaries by or before any Governmental Entity as of the date of this Agreement.
|
| (vi) |
To the knowledge of the Parent, each of the Parent and its Subsidiaries has properly characterized retained individuals as either employees or independent contractors for the purposes of Taxes
and other applicable Laws, and none of them has received any notice from any Governmental Entity disputing such classification.
|
| (vii) |
Each and every Parent Employee has all the necessary permits under applicable Laws to lawfully work in the country of their employment, including without limitation any working visa that may be
required. Each of the Parent and its Subsidiaries has the necessary permits to employ each and every Parent Employee in terms of applicable Laws, including without limitation any migratory permit to hire foreign employees, as applicable.
|
| (viii) |
Other than in the ordinary course (including annual cost-of-living salary increases or statutory collective bargaining agreements annual reviews), since December 31, 2024, the Parent and its
Subsidiaries have not granted or promised any Parent Employee any extraordinary or special increases in compensation or benefits, or any payment of any bonus, or deferred compensation or similar arrangement.
|
- 85 -
| (ix) |
As of the date hereof, no Parent Employee who is at the director level and above for the corporate office of the Parent, or who is at the general manager level and above at the site level of the
Parent, has given written notice to the Parent and/or its Subsidiaries of an intention to terminate employment and, to the knowledge of the Parent, no such Parent Employee intends to terminate employment.
|
| (x) |
To the knowledge of the Parent, no Parent Employee has been terminated for cause as provided by the Federal Labor Law (Ley Federal del Trabajo).
|
| (s) |
Absence of Certain Changes or Events. Except as disclosed in the
Parent Public Documents, since December 31, 2024:
|
| (i) |
the Parent and its Subsidiaries have conducted their respective businesses in the ordinary course in all material respects and have not taken any steps to take any actions which, if taken after
the date hereof, would require the Company’s consent pursuant to Section 5.4 of this Agreement;
|
| (ii) |
there has not been any damage, destruction or other casualty loss with respect to any asset owned, leased or otherwise used by the Parent or any of its Subsidiaries that is material to the Parent
and its Subsidiaries, taken as a whole, whether or not covered by insurance (other than in the ordinary course or regular wear and tear);
|
| (iii) |
other than as expressly permitted by this Agreement, there has not been any acquisition or disposition (including any reconveyance) by the Parent or any of its Subsidiaries of any property or
asset that would be material to the Parent and its Subsidiaries, taken as a whole;
|
| (iv) |
there has not been any write down by the Parent of the value of any of the material assets of the Parent and its Subsidiaries, taken as a whole; and
|
| (v) |
through to the date of this Agreement, there has not been any change, effect, event, occurrence, state of facts or circumstance that has had, or would reasonably be expected to have, individually
or in the aggregate, a Parent Material Adverse Effect.
|
| (t) |
Litigation. Except as disclosed in Schedule 4.1(t) of the Parent
Disclosure Letter, there are no claims, actions, suits, demands, arbitrations, charges, indictments, orders, hearings or other civil, criminal, administrative or investigative proceedings, or other investigations or examinations pending
or, to the knowledge of the Parent, threatened against the Parent or any of its Subsidiaries, the business of the Parent or any of its Subsidiaries, or affecting any of their properties or assets, before or by any Governmental Entity
which, if commenced and adversely determined, would have, or would reasonably be expected to have, a Parent Material Adverse Effect or would significantly impede the ability of the Parent to consummate the Arrangement. Except as
disclosed in Schedule 4.1(t) of the Parent Disclosure Letter and to the knowledge of the Parent, there are no events or circumstances which would reasonably be expected to give rise to or serve as a basis for the commencement of any
such claim, action, suit, demand, arbitration, charge, indictment, order, hearing or other civil, criminal, administrative or investigative proceeding, or other investigation or examination. There are no outstanding orders, judgments,
injunctions, or decrees against the Parent or its Subsidiaries that materially and adversely impact the business, property or assets of the Parent and its Subsidiaries. At the date hereof, neither the Parent nor any of its Subsidiaries
currently intends to initiate any suit, action, claim or arbitration that would be material to the Parent and its Subsidiaries, taken as a whole.
|
- 86 -
| (u) |
Indigenous Claims. There are no material claims or actions with
respect to Indigenous rights currently outstanding or, to the knowledge of the Parent, threatened or pending, with respect to the Parent Property. There are no material land entitlement claims having been asserted or any legal actions
relating to Indigenous rights having been instituted with respect to the Parent Property, and no dispute in respect of the Parent Property with any Indigenous group exists or, to the knowledge of the Parent, is threatened or imminent
which, if adversely determined, would have, or would reasonably be expected to have, a Parent Material Adverse Effect. The Parent Properties that were ejidos or
communal property, as applicable, were disincorporated from the ejido regime and passed to the private property regime through the Acts of Adoption of Full
Ownership. The relevant Acts of Adoption of Full Ownership including the notices and formalities related to the right of first refusal and preference and were duly notarized before a notary public and registered before the National
Agrarian Registry (Registro Agrario Nacional) and the corresponding Public Registry of Property (Registro
Público de Propiedad). No Parent Property is a national, ejidal or communal land and adjoins ejidal or communal land and no Parent Property is encroaching on any private, ejidal or communal property in respect of which any third party, ejido or community may be the owner under any title of ownership or resolution of endowment and/or restitution of land whatsoever. The Parent has made available copies
of all material agreements with Indigenous groups.
|
| (v) |
Community Relations. To the knowledge of the Parent, no authorized
representative of any community in the vicinity (including any ejido) of any of the Parent Properties has communicated in writing to the Parent or any of its
Subsidiaries: (A) a requirement that the consent of such community be obtained as a condition to continued operation of any such Parent Property, (B) any violation related to agrarian, ejido or communal restrictions, including proceedings related to ejido donations or endowments or extensions or requests for ejido or agrarian appropriations or pre-emptive rights or similar rights in agrarian matters on any of the Parent Properties, or (C) a material increase in the
compensation payments payable by the Parent or any of its Subsidiaries under any community development or social framework or similar agreements as a condition to the continued operation of such Parent Properties, other than such
communications in the ordinary course.
|
| (w) |
No Expropriation. No property or asset of the Parent or its
Subsidiaries (including any Parent Mineral Interests) has been taken or expropriated or suffered a similar proceeding by any Governmental Entity nor has any notice or proceeding in respect thereof been given or commenced nor, to the
knowledge of the Parent, is there any threat, intent or proposal to give any such notice or to commence any such proceeding.
|
- 87 -
| (x) |
Taxes.
|
| (i) |
Each of the Parent and its Subsidiaries has duly and timely filed all material Tax Returns required to be filed by it (taking into account any applicable extensions) prior to the date hereof and
all such Tax Returns are true, complete and correct in all material respects.
|
| (ii) |
Except as disclosed in Schedule 4.1(x) of the Parent Disclosure Letter, no Tax Return of the Parent or any of its Subsidiaries is under audit by any Governmental Entity, and no written or oral
notice of such an audit has been received by the Parent. The Parent is not a party to, or otherwise subject to, a proceeding in which Taxes are being contested.
|
| (iii) |
Each of the Parent and its Subsidiaries has paid on a timely basis all material Taxes which are due and payable by it on or before the date hereof (including installments) and has provided
accruals in accordance with GAAP in the most recently published consolidated financial statements of the Parent for any Taxes of the Parent and its Subsidiaries for the period covered by such financial statements that have not been paid
whether or not shown as being due on any Tax Returns. Since such publication date, no material liability in respect of Taxes not reflected in such statements or otherwise provided for has been assessed, proposed to be assessed, incurred
or accrued, other than in the ordinary course.
|
| (iv) |
Except as disclosed in Schedule 4.1(x) of the Parent Disclosure Letter, no material deficiencies, litigation, audits, claims, proposed adjustments or matters in controversy exist or have been
asserted with respect to Taxes of the Parent or any of its Subsidiaries, and neither the Parent, nor any of its Subsidiaries, is a party to any action or proceeding for assessment or collection of Taxes and no such event has been asserted
or, to the knowledge of the Parent, threatened against the Parent or any of its Subsidiaries or any of their respective assets.
|
| (v) |
No claim has been made by any Governmental Entity in a jurisdiction where the Parent or any of its Subsidiaries does not file Tax Returns that the Parent, or any of its Subsidiaries, is or may be
subject to Tax by that jurisdiction or is or may be required to file a tax return in that jurisdiction.
|
| (vi) |
There are no Liens with respect to Taxes upon any of the assets of the Parent or any of its Subsidiaries (other than Parent Permitted Liens).
|
| (vii) |
Each of the Parent and its Subsidiaries has withheld, deducted or collected all material amounts required to be withheld, deducted or collected by it on account of Taxes and has remitted all such
amounts to the appropriate Governmental Entity as required by Law. Each of the Parent and its Subsidiaries has complied in all material respects with all related information reporting, withholding and record retention requirements.
|
- 88 -
| (viii) |
Neither the Parent, each of its Subsidiaries or any third party provider who has issued CFDIs in favor of the Parent or any of its Subsidiaries are mentioned in the list provided under Article 69
B of the Código Fiscal de la Federación.
|
| (ix) |
Neither the Parent nor any of its Subsidiaries has entered into, or participated in, any “listed transaction” within the meaning of U.S. Treasury Regulations section 1.6011-4(b)(2).
|
| (x) |
Neither the Parent nor any of its Subsidiaries has been a “distributing” corporation or a “controlled corporation” (each within the meaning of section 355(a)(1)(A) of the U.S. Tax Code) in any
distribution of stock during the two (2) year period ending on the date of this Agreement that was purported or intended to be governed by section 355 of the U.S. Tax Code (or so much of section 356 of the U.S. Tax Code as relates to
section 355 of the U.S. Tax Code).
|
| (xi) |
(A) Neither the Parent nor its Subsidiaries has taken or agreed to take any action that would prevent the Arrangement from qualifying as a “reorganization” within the meaning of section 368(a) of
the U.S. Tax Code and (B) the Parent is not aware of any agreement, plan or other circumstance that would prevent the Arrangement from qualifying as a “reorganization” within the meaning of section 368(a) of the U.S. Tax Code.
|
| (xii) |
The Parent and each of its Subsidiaries has made available to the Company true, correct and complete copies of all material Tax Returns, examination reports and statements of deficiencies for
taxable periods, or transactions consummated, for which the applicable statutory periods of limitations have not expired.
|
| (xiii) |
The Parent and its Subsidiaries have complied in all material respects with the transfer pricing (including any contemporaneous documentation) provisions of each applicable Law, including for
greater certainty, under section 247 of the Tax Act (and the corresponding provisions of any applicable provincial Law).
|
| (xiv) |
The Parent and each of its Subsidiaries retains all material tax, accounting and Corporate Records required by applicable Law to support any tax or accounting position, filing or claim made by
them with respect to Taxes.
|
| (y) |
Insurance. All insurance maintained by the Parent or any of its
Subsidiaries is in full force and effect and in good standing, and neither the Parent nor any of its Subsidiaries is in default, whether as to payment of premium or otherwise, and such insurance is reasonable and prudent in light of the
size of the Parent and its Subsidiaries and the nature of its business and operations. The Parent and its Subsidiaries maintain the insurance policies required by applicable Laws and any Contract to which the Parent and its Subsidiaries
are a party or by which they are otherwise bound, including all required insurance policies to operate in the ordinary course of business, as currently conducted.
|
- 89 -
| (z) |
Non-Arm’s Length Transactions. Other than (A) as disclosed in the
Parent Public Documents and (B) employment or compensation agreements entered into in the ordinary course, there are no current contracts, commitments, agreements, arrangements or other transactions (including relating to indebtedness
by or to the Parent or its Subsidiaries) between the Parent or its Subsidiaries, on the one hand, and any (i) officer or director of the Parent or any of its Subsidiaries, (ii) any holder of record or, to the knowledge of the Parent,
beneficial owner of 10% or more of the voting securities of the Parent, or (iii) any affiliate or associate of any officer, director or beneficial owner, on the other hand.
|
| (aa) |
Parent Benefit Plans.
|
| (i) |
Schedule 4.1(aa)(i) of the Parent Disclosure Letter contains a true and complete list of all material Parent Benefit Plans. Current and complete copies of all the Parent Benefit Plans as amended
as of the date hereof have been delivered or made available to the Company together with copies of all material documents relating to the Parent Benefit Plans.
|
| (ii) |
No Parent Benefit Plan:
|
|
(A)
|
is a “registered pension plan”, a “retirement compensation arrangement”, a “deferred profit sharing plan”, or a “salary deferral arrangement”, as each such term is defined in
the Tax Act;
|
| (B) |
is a “multi-employer plan” as such term is defined in subsection 8500(i) of the Regulations of Tax Act or a Multiemployer Plan;
|
| (C) |
contains a “defined benefit provision” as defined in subsection 147.1(1) of the Tax Act, or is a “defined benefit plan” (as defined in Section 3(35) of
ERISA) whether or not subject to ERISA, or any plan subject to Section 412 of the U.S. Tax Code or Section 302 of ERISA;
|
| (D) |
provides for health and welfare benefits which are not fully-insured;
|
| (E) |
provides for retiree or post-termination benefits to Parent Employees or former Parent Employees or beneficiaries or dependents thereof (other than as required by applicable Laws); or
|
| (F) |
provides benefits to independent contractors.
|
| (iii) |
Each Parent Benefit Plan is, and has been, established, registered (if required), amended, funded, operated, communicated, administered and invested in compliance with its terms and all Laws,
except as would not reasonably be expected to result in material liability to the Parent and its Subsidiaries. All employer and employee payments, contributions and premiums required to be remitted, paid to or in respect of each Parent
Benefit Plan, as of the date hereof, have been paid or remitted in all material respects in a timely fashion in accordance with its terms and all Laws; and all obligations in respect of each Parent Benefit Plan have been properly accrued
and reflected in the Parent’s financial statements.
|
- 90 -
| (iv) |
To the knowledge of the Parent, there are no investigations by a Governmental Entity or material claims (other than routine claims for payment of benefits) pending involving any Parent Benefit
Plan, and to the knowledge of the Parent and its Subsidiaries no event has occurred which would reasonably be expected to give rise to such investigations or material claims (other than routine claims for payment of benefits).
|
| (v) |
There has been no amendment to, or announcement by the Parent or any of its Subsidiaries relating to, or change in employee participation or coverage under, any Parent Benefit Plan and no Parent
Benefit Plan contains provisions permitting retroactive increase or payments on termination which, in each case, would materially increase the expense of maintaining such plan above the level of the expense incurred therefor for the most
recent fiscal year.
|
| (vi) |
Neither the execution of this Agreement by the Parent nor the consummation of the Arrangement pursuant to the Plan of Arrangement (whether alone or in conjunction with any subsequent events)
would result in (A) any Parent Employees receiving termination or severance pay or any increase in termination or severance pay upon any termination of employment after the date hereof, or (B) acceleration of the time of payment or
vesting or result in any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or result in any other material obligation pursuant to any of the Parent Benefit Plans.
|
| (vii) |
There is no entity other than the Parent or its Subsidiaries participating in any Parent Benefit Plan.
|
| (viii) |
All data necessary to administer each Parent Benefit Plan is in the possession of the Parent or its Subsidiaries or its agents and is in a form which is sufficient for the proper administration
of the Parent Benefit Plan in accordance with its terms and, to the knowledge of the Parent, such data is complete and correct in all material respects.
|
| (bb) |
Environmental. Except for any matters that, individually or in the
aggregate, would not have or would not reasonably be expected to have a Parent Material Adverse Effect:
|
| (i) |
since January 1, 2022, all facilities and operations of the Parent and its Subsidiaries have been conducted, and are now, in compliance with all Environmental Laws;
|
| (ii) |
the Parent and its Subsidiaries are in possession of, and in compliance with, all Environmental Permits that are required to own, lease and operate the Parent Mineral Interests and to conduct
their respective business as they are now being conducted which are legal, valid, binding and in full force and effect, all of which appear in the name of the Parent and/or its Subsidiaries;
|
- 91 -
| (iii) |
to the knowledge of the Parent, no Environmental Liabilities presently exist with respect to any portion of any currently or formerly owned, leased, used or otherwise controlled property,
interests and rights or relating to the operations and business of the Parent and its Subsidiaries and, to the knowledge of the Parent, there is no basis for any such Environmental Liabilities to arise in the future as a result of the
Parent’s activities in respect of such property, interests, rights, operations and business;
|
| (iv) |
except as disclosed in Schedule 4.1(bb)(iv) of the Parent Disclosure Letter, neither the Parent nor any of its Subsidiaries is subject to or has received notice of any proceeding, application,
order or directive from any Governmental Entity which relates to environmental matters and which may require any material work, repairs, construction or expenditures, or create any additional Environmental Liabilities, and to the
knowledge of the Parent, there are no pending environmental claims;
|
| (v) |
the Parent or its Subsidiaries have posted with the relevant regulatory authorities all financial assurance required to be posted pursuant to Environmental Laws or Environmental Permits,
including any financial assurance required in connection with reclamation, remediation or closure plans for the Parent Mineral Interests;
|
| (vi) |
to the knowledge of the Parent, there are no changes in the status, terms or conditions of any Environmental Permits held by the Parent or any or its Subsidiaries or any renewal, modification,
revocation, reassurance, alteration, transfer or amendment of any such Environmental Permits, or any review by, or approval of, any Governmental Entity of such Environmental Permits or in connection with the execution or delivery of this
Agreement, the consummation of the transactions contemplated herein or the continuation of the business of the Parent or its Subsidiaries following the Effective Date; and
|
| (vii) |
the Parent and its Subsidiaries have made available to the Company true, correct and complete copies of all material audits, studies, plans, assessments, investigation reports (including Phase I
and Phase II environmental site assessments) and regulatory correspondence with respect to environmental matters in their possession or control.
|
- 92 -
| (cc) |
Parent Material Contracts. Schedule 4.1(cc) of the Parent Disclosure
Letter lists all of the Parent Material Contracts to which the Parent and its Subsidiaries are parties all of which are in full force and effect and are enforceable in accordance with
their terms with respect to each of the Parent and its Subsidiaries. The Parent and each of its Subsidiaries has complied in all material respects with all the terms of all Parent Material Contracts. Neither the Parent nor any of its
Subsidiaries is in breach of, or default under, any Parent Material Contract to which it is a party or bound, nor does the Parent have knowledge of any condition that with the passage of time or the giving of notice or both would result
in such a breach or default, except in each case where any such breaches or defaults would not, individually or in the aggregate, reasonably be expected to be, or result in, a Parent Material Adverse Effect. As of the date hereof,
neither the Parent nor any of its Subsidiaries knows of, or has received written notice of, any breach or default under (nor, to the knowledge of the Parent, does there exist any condition which with the passage of time or the giving of
notice or both would result in such a breach or default under) any Parent Material Contract by any other party thereto except where any such violation or default would not, individually or in the aggregate, reasonably be expected to be,
or result in, a Parent Material Adverse Effect. The Parent has made available to the Company true and complete copies of all of the Parent Material Contracts. All the Parent Material Contracts are legal, valid, binding and in full force
and effect and are enforceable by the Parent (or a Subsidiary of the Parent, as the case may be) in accordance with their respective terms (subject to bankruptcy, insolvency and other applicable Laws affecting the enforcement of
creditors’ rights generally and subject to the qualification that equitable remedies may be granted only in the discretion of a court of competent jurisdiction). Neither the Parent nor any of its Subsidiaries has received notice that
any party to a Parent Material Contract intends to cancel, terminate, materially modify or not renew such Parent Material Contract.
|
| (dd) |
No Impediment under Existing Indebtedness. There are no covenants or
other terms (including approval, consent or other discretionary rights of any lender or noteholder) under any of the Parent’s or any of its Subsidiaries’ credit agreements (including the Parent Credit Agreement), indentures or other
documents governing or relating to the indebtedness of the Parent and its Subsidiaries which would reasonably be expected to prevent, materially delay or otherwise materially impede the consummation of the Arrangement or the
transactions contemplated by this Agreement. Provided that the Company Credit Agreement is terminated in connection with the consummation of the Arrangement, the consummation of the Arrangement and the completion of any aspect of the
transactions contemplated by this Agreement will not result or give rise to a default or event of default under the Parent Credit Agreement, indentures or other documents governing or relating to the indebtedness of the Parent and its
Subsidiaries.
|
| (ee) |
Standstill Agreements. Neither the Parent nor any of its Subsidiaries
has waived any Parent Standstill Agreement to which the Parent or any of its Subsidiaries is a Party, except to permit submissions of expressions of interest prior to the date of this Agreement.
|
| (ff) |
Whistleblower Reporting. No employee of the Parent or any of its
Subsidiaries, nor any legal counsel representing the Parent or any of its Subsidiaries, has reported evidence of a material violation of any Securities Laws, breach of fiduciary duty or similar material violation by the Parent or any of
its Subsidiaries or their respective officers, directors, employees, agents or independent contractors to the Parent’s management, or audit committee (or other committee designated for such purpose) of the Parent Board.
|
- 93 -
| (gg) |
Restrictions on Business Activities. There is no agreement, judgement,
injunction, order or decree binding upon the Parent or any of its Subsidiaries that has or would reasonably be expected to have the effect of prohibiting or restricting any acquisition of property by the Parent or any such Subsidiary or
the conduct of business by the Parent or any such Subsidiary as currently conducted (including following the transaction contemplated by this Agreement) other than such agreements, judgements, injunctions, orders or decrees which would
not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect.
|
| (hh) |
Brokers. Except for the fees to be paid to BMO Nesbitt Burns Inc. and
RBC Capital Markets, LLC pursuant to engagement letters with the Parent, none of the Parent, any of its Subsidiaries, or any of their respective officers, directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finder’s fees on behalf of the Parent or any of its Subsidiaries in connection with the transactions contemplated by this Agreement.
|
| (ii) |
Corrupt Practices Legislation.
|
| (i) |
None of the Parent, its Subsidiaries and affiliates, nor, to the Parent’s knowledge, any of their Representatives or other Persons acting on behalf of the Parent or any of its Subsidiaries or
affiliates has directly or indirectly, offered, promised, agreed, paid, authorized, given or taken any act in furtherance of any such offer, promise, agreement, payment or authorization on behalf of the Parent or its Subsidiaries,
anything of value, directly or indirectly, to any official of a Governmental Entity, any political party or official thereof or any candidate for political office, for the purpose of any of the following:
|
| (A) |
influencing any action or decision of such person in such person’s official capacity, including a decision to fail to perform such person’s official function in order to obtain or retain an
advantage in the course of business;
|
| (B) |
inducing such person to use such person’s influence with any Governmental Entity to affect or influence any act or decision of such Governmental Entity to assist the Parent or one of its
Subsidiaries in obtaining or retaining business for, with, or directing business to, any Person or otherwise to obtain or retain an advantage in the course of business; or
|
| (C) |
to assist the Parent or one of its Subsidiaries in obtaining or retaining business for, with, or directing business to, any Person.
|
- 94 -
| (ii) |
None of the Parent and its Subsidiaries, nor, to the knowledge of the Parent, any of their respective Representatives has, directly or indirectly, taken any action that is prohibited by or would
cause the Parent or one of its Subsidiaries to be in violation of the requirements of the Corruption of Foreign Public Officials Act (Canada), the Proceeds of
Crime (Money Laundering) and Terrorist Financing Act (Canada), the Foreign Corrupt Practices Act of 1977 (United States), the Mexican Anticorruption System Law (Ley General del Sistema Nacional Anticorrupción), the Mexican General Administrative Liabilities Law (Ley General de Responsabilidades
Administrativas), the Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin (Ley Federal para la Prevención e Identificación de Operaciones con Recursos
de Procedencia Ilícita), and the Federal Penal Code (Código Penal Federal) as amended or any law of similar effect prohibiting corruption, bribery and money laundering in any jurisdiction
in which it conducts its business and to which it is subject (collectively, the “Parent Applicable Anti-Corruption Law”). Neither the Parent, nor its Subsidiaries, nor, to the knowledge of the
Parent, their respective Representatives, has violated any Parent Applicable Anti-Corruption Law and, to the knowledge of the Parent, no condition or circumstances exist that would form the basis of any such allegations.
|
| (iii) |
All contracts and arrangements between the Parent or one of its Subsidiaries and any other Person are in compliance with Parent Applicable Anti-Corruption Law. Since January 1, 2023, the Parent
and its Subsidiaries have maintained policies and procedures applicable to it and their respective directors, officers, employees, agents and representatives in place in respect thereof as are appropriate to prevent and detect violations
of Parent Applicable Anti-Corruption Laws.
|
| (iv) |
None of the Parent or its Subsidiaries nor any of its directors, officers, employees, agents or representatives has (A) conducted or initiated any review, audit or internal investigation that
concluded that the Parent or one of its Subsidiaries or any of their respective directors, officers, employees, agents or representatives has materially violated any Parent Applicable Anti-Corruption Law, or (B) made a voluntary, directed
or involuntary disclosure to any Governmental Entity responsible for enforcing Parent Applicable Anti-Corruption Law, in each case with respect to any alleged act or omission arising under or relating to material non-compliance with any
such Laws, or received any notice, request or citation from any person alleging material non-compliance with any such Laws.
|
| (v) |
The Parent and its Subsidiaries have maintained systems of internal controls intended to ensure compliance by the Parent, its Subsidiaries and their respective Representatives with Parent
Applicable Anti-Corruption Law.
|
| (jj) |
Sanctions.
|
| (i) |
Neither the Parent, nor any of its Subsidiaries, nor any of their respective directors, officers or employees nor, to the knowledge of the Parent, any agents or persons acting on any of their
behalf: (A) is a Restricted Party; or (B) has received written notice of or is aware of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.
|
- 95 -
| (ii) |
None of the Parent, any of its Subsidiaries or any director, officer, employee or to the knowledge of the Parent, agent of the Parent or any of its Subsidiaries is a Person that is, or is owned
or controlled by Persons that are: (A) the subject/target of any Sanctions, or (B) located, organized or resident in a country or territory that is the subject of Sanctions, including Russia, Crimea, Donetsk People’s Republic and the
Luhansk People’s Republic of Ukraine, the Kherson and the Zaporizhzhia oblasts of Ukraine, Cuba, Iran, North Korea, and Syria.
|
| (iii) |
The Parent, its Subsidiaries and their respective directors, officers and employees and, to the knowledge of the Parent, the agents of the Parent and its Subsidiaries are in compliance with all
applicable Sanctions. The Parent and its Subsidiaries have instituted and maintain policies and procedures reasonably designed to ensure compliance with applicable Sanctions.
|
| (iv) |
Neither the Parent nor any of its Subsidiaries has knowingly engaged in, or is now knowingly engaged in, any dealings or transactions with any Person, or in property that is owned, held or
controlled by or on behalf of any Person or in any country or territory in violation of Sanctions.
|
| (kk) |
Modern Slavery.
|
| (i) |
The Parent and its Subsidiaries have acted in compliance with the fundamental principles defined and protected by the Universal Declaration of Human Rights, the fundamental principles of the
International Labor Organization and rules relating to the prohibition of forced labour, child labour and human trafficking in their operations and supply chains.
|
| (ii) |
The Parent and its Subsidiaries are in compliance with the requirements of applicable Modern Slavery Laws.
|
| (iii) |
The Parent and its Subsidiaries have customary policies and procedures in place reasonably designed to ensure compliance with applicable Modern Slavery Laws.
|
| (ll) |
Investment Canada Act. The Parent and the Purchaser are trade
agreement investors and are not state-owned enterprises, in each case within the meaning of the ICA.
|
| (mm) |
Antitakeover Statutes. The Parent Board has taken all actions
necessary to reasonably ensure that the restrictions applicable to business combinations contained in Section 203 of the DGCL are not, and will not be, applicable to the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby, including the Arrangement. Except for Section 203 of the DGCL, no “fair price,” “moratorium,” “control share acquisition,” “business combination” or other similar anti-takeover
statutes or regulations enacted under the DGCL or other Law applies or purports to apply to this Agreement or any of the transactions contemplated by this Agreement.
|
- 96 -
| (nn) |
Bankruptcy. Neither the Parent nor any of its Subsidiaries has
commenced or contemplated any proceeding, or filed or contemplated the filing of any petition, in any court relating to the bankruptcy, concurso mercantil,
reorganization, insolvency, dissolution, liquidation or relief from debtors of the Parent or any of its Subsidiaries. There is no legal basis for the bankruptcy, insolvency, dissolution or liquidation of the Parent or any of its
Subsidiaries.
|
| (oo) |
Privacy and Security.
|
| (i) |
The Parent and its Subsidiaries (A) are in material compliance with applicable Privacy Laws, and (B) have implemented and maintained measures designed to provide reasonable assurance that each of
the Parent and its Subsidiaries: (i) comply with applicable Privacy Laws; and (ii) will not collect, acquire, fail to secure, share, disclose, use or otherwise process Personal Information in a manner inconsistent with applicable Privacy
Laws, any notice to or consent from the provider of Personal Information, any Contract to which each of the Parent and its Subsidiaries is a party that is applicable to such Personal Information, or any privacy policy or privacy statement
from time to time published or otherwise made available by the Parent and its Subsidiaries to the Persons to whom the Personal Information relates.
|
| (ii) |
With respect to all Personal Information collected by the Parent and its Subsidiaries, each of the Parent and its Subsidiaries has taken steps required and reasonably necessary to protect such
Personal Information against loss and against unauthorized access, use, modification, disclosure or other misuse, including implementing and monitoring compliance with reasonable measures with respect to technological, organizational and
physical security of such Personal Information. Each of the Parent and its Subsidiaries has commercially reasonable safeguards in place designed to protect Personal Information in its possession or control from loss, unauthorized access,
use or disclosure, including by its officers, employees, independent contractors and consultants. To the knowledge of the Parent, there has been no unauthorized access to, disclosure of, or other misuse of any Personal Information in the
custody or control of the Parent or its Subsidiaries.
|
| (iii) |
Neither the Parent nor its Subsidiaries have received any notice of any claims, investigations or alleged violations of applicable Privacy Laws including with respect to Personal Information
collected or possessed by or otherwise subject to the control of the Parent and its Subsidiaries.
|
| 4.2 |
Survival of Representations and Warranties
|
The representations and warranties of the Parent and the Purchaser contained in this Agreement shall not survive the completion of the Arrangement and shall expire
and be terminated on the earlier of the Effective Time and the date on which this Agreement is terminated in accordance with its terms.
- 97 -
ARTICLE 5
COVENANTS
| 5.1 |
Covenants of the Company Regarding the Conduct of Business
|
The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the termination of this
Agreement in accordance with its terms, except (i) as required by Law or any Governmental Entity; (ii) with the prior written consent of the Parent (not to be unreasonably withheld, conditioned or delayed); (iii) as set out in the Company
Disclosure Letter; or (iv) as otherwise expressly contemplated or permitted by this Agreement or the Plan of Arrangement:
| (a) |
the Company shall, and shall cause each of its Subsidiaries to, conduct its and their respective businesses in, not take any action except in, and maintain their respective facilities in, the
ordinary course and to use commercially reasonable efforts to maintain and preserve in all material respects its and their present business organization, operations, assets, properties (including the Company Mineral Interests) and
goodwill, to keep available the services of its officers and employees as a group and to maintain satisfactory relationships consistent with past practice with joint venture partners, suppliers, distributors, employees and Governmental
Entities having business relationships with them;
|
| (b) |
without limiting the generality of Section 5.1(a), the Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:
|
| (i) |
other than as disclosed in Schedule 5.1(b) of the Company Disclosure Letter or as required by the terms of any Company Equity Incentive Plan, issue, sell, grant, award, pledge, hypothecate,
dispose of, or permit a Lien (other than a Company Permitted Lien) to be created, or agree to issue, sell, grant, award, pledge, hypothecate, dispose of, or permit a Lien (other than a Company Permitted Lien) to be created on, any Company
Shares, or other equity or voting interests or any options, stock appreciation rights, warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or otherwise) any
Company Shares or other equity or voting interests or other securities or any shares of its Subsidiaries (including, for greater certainty, Company Incentive Awards), other than pursuant to the exercise or settlement of any Company
Incentive Awards that are outstanding as of the date hereof in accordance with their terms;
|
| (ii) |
amend or propose to amend the articles, by-laws or other constating documents of the Company and its Subsidiaries or the terms of any securities of the Company or any of its Subsidiaries;
|
| (iii) |
prior to the Effective Time, declare, accrue, set aside or pay any dividend or make any other distribution to Company Shareholders (whether in cash, securities or property or any combination
thereof) in respect of any Company Shares or the securities of any of its Subsidiaries, other than for certainty, the payment of any interest pursuant to the Company Credit Agreement and the Company Notes in accordance with their terms;
|
- 98 -
| (iv) |
split, combine or reclassify any outstanding Company Shares or the securities of any of its Subsidiaries;
|
| (v) |
redeem, purchase or offer to purchase any Company Shares or other securities of the Company or any shares or other securities of its Subsidiaries, other than pursuant to the settlement of any
Company Incentive Awards in accordance with their terms and except in connection with a Pre-Acquisition Reorganization;
|
| (vi) |
except in connection with a Pre-Acquisition Reorganization, reorganize, amalgamate or merge the Company or any of its Subsidiaries with any other Person;
|
| (vii) |
except in connection with a Pre-Acquisition Reorganization, reduce the stated capital of the shares of the Company or of any of its Subsidiaries or otherwise change the capital structure of the
Company and its Subsidiaries;
|
| (viii) |
other than as disclosed in Schedule 5.1(b) of the Company Disclosure Letter, sell, pledge, hypothecate, lease, dispose of, mortgage, licence, or permit a Lien (other than a Company Permitted
Lien) to be created on or agree to sell, pledge, hypothecate, dispose of, mortgage, licence, or permit a Lien (other than a Company Permitted Lien) to be created on or otherwise transfer any assets of the Company or any of its
Subsidiaries or any interest in any assets of the Company and its Subsidiaries having a value greater than $5 million in the aggregate, other than sales of inventory, equipment or obsolete assets in the ordinary course and Liens that are
incurred in the ordinary course;
|
| (ix) |
acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction or in a series of related transactions, any Person,
or make any investment or agree to make any investment (by purchase of shares or securities, contributions of capital (other than to wholly-owned Subsidiaries), property transfer, purchase of any property or assets or otherwise), directly
or indirectly, in one transaction or in a series of related transactions, in any Person, other than acquisitions of assets, equipment and supplies in the ordinary course that do not exceed 115% of the amounts budgeted for acquisitions in
the Company Budget and, for certainty, excluding capital expenditures permitted by Section 5.1(b)(xxii);
|
| (x) |
incur, create, assume or otherwise become liable for any indebtedness for borrowed money or any other material liability or obligation or issue any debt securities, or guarantee or otherwise
become responsible for, the obligations of any other Person or make any loans or advances to any Person that is not a Subsidiary of the Company, except (A) in connection with ordinary course working capital needs (including, without
limitation, the indebtedness incurred or to be incurred under the Company Credit Agreement), or (B) letters of credit, reclamation bonds, financial assurances or other guarantees in respect of environmental or other obligations in the
ordinary course;
|
- 99 -
| (xi) |
adopt a plan of liquidation or resolutions providing for the winding-up, liquidation or dissolution of the Company or any of its Subsidiaries;
|
| (xii) |
pay, discharge, settle, satisfy, compromise, waive, assign or release any material claims, liabilities or obligations prior to the same becoming due, other than (A) the payment, discharge or
satisfaction of liabilities reflected or reserved against in the Company’s financial statements or incurred in the ordinary course, (B) for an aggregate amount of no greater than $5 million, or (C) payment of any fees related to the
Arrangement;
|
| (xiii) |
waive, release, grant, transfer, exercise, modify or amend in any material respect, other than in the ordinary course, (A) any existing material contractual rights in respect of any Company
Mineral Interests, or (B) any material Authorization, lease, concession, contract or other document;
|
| (xiv) |
take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably
be expected to cause any Governmental Entities to institute proceedings for the suspension, revocation or limitation of rights under, any material Authorizations necessary to conduct its businesses as now conducted or planned to be
conducted;
|
| (xv) |
other than as disclosed in Schedule 5.1(b) of the Company Disclosure Letter, in the ordinary course, in accordance with this Agreement or the Plan of Arrangement, or as is necessary to comply
with applicable Laws or the current terms of any Contracts or Company Benefit Plans: (A) grant to any Company Employee an increase in compensation in any form, or grant any general salary increase (other than base salary increases for
Company Employees in the ordinary course); (B) make any loan to any Company Employee (other than expense reimbursements in the ordinary course); (C) take any action with respect to the grant of any severance, retention, change of control
or bonus to, or enter into any employment agreement, deferred compensation or other similar agreement (or amend any such existing agreement) with any Company Employee; (D) increase any benefits payable under any existing severance or
termination pay policies or employment agreements, or adopt or materially amend or make any contribution to any Company Benefit Plan or other bonus, profit sharing, option, pension, retirement, deferred compensation, insurance, incentive
compensation, compensation or other similar plan, agreement, trust, fund or arrangement for the benefit of directors or Company Employees or former directors or former Company Employees; (E) increase bonus levels or other benefits payable
to any director or executive officer; (F) provide for accelerated vesting, removal of restrictions or an exercise of any stock-based or stock-related awards (including stock options), except, for greater certainty, where such accelerated
vesting, removal of restrictions or exercise occur automatically pursuant to the terms of a Company Equity Incentive Plan without any further action by the Company; (G) establish, adopt or amend (except as required by applicable Law) any
collective bargaining agreement or similar agreement; or (H) hire or engage, or amend the terms of employment or engagement of, any Company Employee or independent contractor with total annual compensation exceeding $250,000 (other than
to replace any existing Company Employee or independent contractor performing a similar function on substantially similar annual salaries or to fill a position that is open as of the date of this Agreement on substantially similar
compensation as was historically paid for that position by the Company or its Subsidiaries);
|
- 100 -
| (xvi) |
enter into or terminate any interest rate, currency, equity or commodity swaps, hedges, derivatives, forward sales contracts or other financial instruments or like transaction other than in the
ordinary course or pursuant to the Company’s ordinary course cash management practices and hedging activities consistent with past practice;
|
| (xvii) |
materially change the business carried on by the Company and its Subsidiaries, as a whole;
|
| (xviii) |
amend its accounting policies or adopt new accounting policies, except as required by concurrent changes in IFRS;
|
| (xix) |
enter into any Contract or series of Contracts, other than in the ordinary course, resulting in a new Contract or series of related new Contracts having a term in excess of twelve (12) months and
that would not be terminable by the Company or its Subsidiaries upon notice of ninety (90) days or less from the date of the relevant Contract, or that would impose financial obligations on the Company or any of its Subsidiaries in excess
of $5 million in the aggregate over the term of the Contract;
|
| (xx) |
(A) except in the ordinary course, alter, amend, or otherwise modify or supplement, or waive any material provision or condition of, any Company Material Contract; (B) default under any material
provision of any Company Material Contract; or (C) enter into any Contract that restricts the ability of the Company or any of its Subsidiaries to offer to purchase the assets or equity securities of another Person;
|
| (xxi) |
enter into or renew any agreement, contract, lease, licence or other binding obligation of the Company or its Subsidiaries (A) containing (1) any limitation or restriction on the ability of the
Company or its Subsidiaries or, following completion of the transactions contemplated hereby, the ability of the Parent or its Subsidiaries, to engage in any type of activity or business in any material respect, (2) any limitation or
restriction on the manner in which, or the localities in which, all or any portion of the business of the Company or its Subsidiaries or, following consummation of the transactions contemplated hereby, all or any portion of the business
of the Parent or its Subsidiaries, is or would be conducted in any material respect, or (3) any limit or restriction on the ability of the Company or its Subsidiaries or, following completion of the transactions contemplated hereby, the
ability of the Parent or its Subsidiaries, to solicit customers or employees in any material respect or (B) that would reasonably be expected to materially delay or prevent the consummation of the transactions contemplated by this
Agreement;
|
- 101 -
|
(xxii)
|
incur any capital expenditures or enter into any agreement obligating the Company or its Subsidiaries to provide for future capital expenditures involving payments in excess
of 115% of the amounts budgeted for capital expenditures in the Company Budget in the aggregate; or
|
| (xxiii) |
commence, as plaintiff, any legal proceedings against a Governmental Entity.
|
| (c) |
The Company shall not terminate, let lapse or amend or modify in any material respect any insurance policy maintained by the Company and its Subsidiaries; and except as contemplated by Section
5.16, the Company shall use its commercially reasonable efforts to cause its and its Subsidiaries’ current insurance (or re-insurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless
simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of nationally recognized standing providing coverage equal to or greater than the coverage under the
cancelled, terminated or lapsed policies for commercially reasonable premiums are in full force and effect, provided that, subject to Section 5.16, neither the Company nor any of its Subsidiaries shall obtain or renew any insurance (or
re-insurance) policy for a term exceeding 12 months;
|
| (d) |
the Company shall and shall cause each of its Subsidiaries to maintain and preserve all of its and its Subsidiaries rights under each of its Mineral Rights and Company Properties under each of
its and its Subsidiaries’ Authorizations;
|
| (e) |
the Company and each of its Subsidiaries shall:
|
| (i) |
diligently pursue the finalization of the audited annual consolidated financial statements of the Company and its Subsidiaries for the year ended December 31, 2025 such that they can be filed on
SEDAR+ in the ordinary course, and maintain all material books and records related thereto;
|
| (ii) |
consult with, and take under consideration advice from, the Parent in connection with any material ongoing legal proceedings to which the Company or its Subsidiaries are party;
|
| (iii) |
duly and timely file all Tax Returns required to be filed by it (taking into account any applicable extensions) on or after the date hereof and all such Tax Returns will be true, complete and
correct in all respects;
|
- 102 -
| (iv) |
timely withhold, collect, remit and pay all Taxes which are required to be withheld, collected, remitted or paid by it to the extent due and payable;
|
| (v) |
not make, change or rescind any election, information, return or designation relating to Taxes;
|
| (vi) |
not make a request for a Tax ruling, voluntarily disclose any potential or actual Tax issue to any taxing authority, or enter into or amend any agreement with any taxing authorities, or consent
to any extension or waiver of any limitation period with respect to Taxes;
|
| (vii) |
not settle or compromise any claim, action, suit, litigation, proceeding, arbitration, investigation, audit or controversy relating to Taxes affecting the Company or any of its Subsidiaries
(other than the payment, discharge or satisfaction of liabilities reflected in or reserved against in the interim consolidated financial statements of the Company for the three months ended September 30, 2025);
|
| (viii) |
not enter into any Tax Sharing Agreement;
|
| (ix) |
terminate all Tax Sharing Agreements without further liability to Parent, the Company, or its Subsidiaries following the Effective Time;
|
| (x) |
not amend any Tax Return or change any of its methods of reporting income, deductions or accounting for income Tax purposes from those employed in the preparation of its income Tax Return for the
tax year ended December 31, 2024;
|
| (xi) |
keep the Parent reasonably informed of any material events, discussions or correspondence with any Governmental Entity or other related action with respect to any Tax audit, investigation or
assessment; and
|
| (f) |
the Company shall not authorize, agree or otherwise commit to do any of the matters otherwise prohibited by this Section 5.1.
|
| 5.2 |
Covenants of the Company Relating to the Arrangement
|
The Company covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the termination of this
Agreement in accordance with its terms, it shall, and shall cause its Subsidiaries to perform all obligations required to be performed by the Company or any of its Subsidiaries under this Agreement, co-operate with the Parent in connection
therewith, and do all such other acts and things as may be reasonably necessary or desirable in order to consummate and make effective the transactions contemplated in this Agreement and the Company shall, and shall cause its Subsidiaries to:
| (a) |
other than in respect of the Regulatory Approvals, which shall be governed by Section 5.10, use its commercially reasonable efforts to effect all necessary registrations, filings and submissions
of information required by Governmental Entities from it or its Subsidiaries relating to the Arrangement;
|
- 103 -
| (b) |
use its commercially reasonable efforts to obtain all third party consents, approvals and notices required under any of the Company Material Contracts (other than the Company Credit Agreement);
|
| (c) |
use commercially reasonable efforts to defend all lawsuits or other legal, regulatory or other proceedings against the Company challenging or affecting this Agreement or the consummation of the
transactions contemplated hereby;
|
| (d) |
other than in respect of the Regulatory Approvals, which shall be governed by Section 5.10, use commercially reasonable efforts to satisfy all conditions precedent in this Agreement and take all
steps set forth in the Interim Order and the Final Order applicable to it and comply promptly with all requirements imposed by Law on it or its Subsidiaries with respect to this Agreement or the Arrangement;
|
| (e) |
use its commercially reasonable efforts to carry out all actions necessary to ensure the availability of the exemption from the registration requirements of the U.S. Securities Act provided by
section 3(a)(10) of the U.S. Securities Act and applicable U.S. state securities laws;
|
| (f) |
cooperate with, and provide commercially reasonable assistance to, Parent and Purchaser in the preparation and filing, on the Effective Date, of an election pursuant to subparagraph (c)(i) of the
definition of “public corporation” contained in subsection 89(1) of the Tax Act such that the Company ceases to be a “public corporation” for the purposes of the Tax Act;
|
| (g) |
not take any action, or refrain from taking any commercially reasonable action, or permit any action to be taken or not taken, which is inconsistent with this Agreement or which would reasonably
be expected to prevent, materially delay or otherwise impede the consummation of the Arrangement or the transactions contemplated by this Agreement;
|
| (h) |
promptly (and, in any event, within twenty-four (24) hours) notify the Parent of:
|
| (i) |
any Company Material Adverse Effect or change, effect, event, occurrence or state of facts or circumstance that would reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect;
|
| (ii) |
any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person (or another
Person) is required in connection with this Agreement or the Arrangement; or
|
| (iii) |
any material proceedings commenced or, to the knowledge of the Company, threatened against, relating to or involving or otherwise affecting the Company or any of its Subsidiaries in connection
with this Agreement or the Arrangement. The Company shall give Parent a reasonable opportunity to participate in the defense or settlement of any substantive shareholder litigation against the Company or its directors or officers relating
to the Arrangement, and no such settlement (to the extent a material monetary amount is involved) shall be agreed to without the prior written consent of Parent, which consent shall not be unreasonably withheld, conditioned or delayed.
|
- 104 -
| 5.3 |
Covenants of the Company Regarding the TSX and NYSE American Delisting
|
Prior to the Effective Date, the Company shall use commercially reasonable efforts to take, or cause to be taken, all actions, and do or cause to be done all things
reasonably necessary, proper or advisable on its part under applicable Laws and rules and policies of the TSX and NYSE American to cause the delisting of the Company Shares from the TSX and NYSE American, as applicable, as promptly as practicable
after the Effective Time.
| 5.4 |
Covenants of the Parent Regarding the Conduct of Business
|
The Parent covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement
in accordance with its terms, except (i) as required by Law or any Governmental Entity; (ii) with the prior written consent of the Company (not to be unreasonably withheld, conditioned or delayed); (iii) as set out in the Parent Disclosure
Letter; or (iv) as otherwise expressly contemplated or permitted by this Agreement or the Plan of Arrangement:
| (a) |
the Parent shall, and shall cause each of its Subsidiaries to, conduct its and their respective businesses in, not take any action except in, and maintain their respective facilities in, the
ordinary course and to use commercially reasonable efforts to maintain and preserve in all material respects its and their present business organization, operations, assets, properties (including the Parent Mineral Interests) and
goodwill, to keep available the services of its officers and employees as a group and to maintain satisfactory relationships consistent with past practice with joint venture partners, suppliers, distributors, employees and Governmental
Entities having business relationships with them;
|
| (b) |
without limiting the generality of Section 5.4(a), the Parent shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:
|
| (i) |
issue, sell, grant, award, pledge, hypothecate or dispose of or agree to issue, sell, grant, award, pledge, hypothecate or dispose of, any Parent Shares, or other equity or voting interests
(including, for greater certainty, Parent Incentive Awards) or any options, stock appreciation rights, warrants, calls, conversion or exchange privileges or rights of any kind to acquire (whether on exchange, exercise, conversion or
otherwise) any Parent Shares, other than (A) in the ordinary course, (B) as contemplated in Section 5.4(b)(viii) and/or (C) other than pursuant to the exercise or settlement of any Parent Incentive Awards that are outstanding as of the
date hereof in accordance with their terms or as required by the terms of any Parent Incentive Plans;
|
| (ii) |
amend or propose to amend the articles, by-laws or other constating documents of the Parent or the terms of any securities of the Parent, other than the Parent Charter Amendment;
|
- 105 -
| (iii) |
split, consolidate or reclassify any Parent Shares or undertake any other capital reorganization, or declare, set aside or pay any dividend or other distribution to the Parent Stockholders
(whether in cash, securities or property or any combination thereof) in respect of any Parent Shares;
|
| (iv) |
redeem, purchase or offer to purchase any Parent Shares;
|
| (v) |
reorganize, amalgamate or merge the Parent or any of the Parent Material Subsidiaries with any other Person (other than an affiliate of the Parent);
|
| (vi) |
other than as set out in Section 5.4(b)(vi) of the Parent Disclosure Letter, reduce the stated capital of the Parent Shares or any of its Subsidiaries or otherwise change the capital structure of
the Parent and its Subsidiaries (other than an affiliate of the Parent);
|
| (vii) |
sell, pledge, hypothecate, lease, dispose of, mortgage, licence, permit a Lien to be created on or agree to sell, pledge, hypothecate, dispose of, mortgage, licence, permit a Lien to be created
on or otherwise transfer any assets of the Parent or any of the Parent Material Subsidiaries that could reasonably be expected to prevent or delay the consummation the transactions contemplated hereby;
|
| (viii) |
acquire (by merger, consolidation, acquisition of stock or assets or otherwise) or agree to acquire, directly or indirectly, in one transaction or in a series of related transactions, any Person,
or make any investment or agree to make any investment (by purchase of shares or securities, contributions of capital (other than to wholly-owned Subsidiaries), property transfer, purchase of any property or assets or otherwise), directly
or indirectly, in one transaction or in a series of related transactions, in any Person, provided that the Parent may complete one or more acquisitions and/or investments so long as the fair market value of all such acquisitions and/or
investments, as at the closing of such acquisitions and/or investments, when aggregated together, do not exceed $100 million;
|
| (ix) |
incur, create, assume or otherwise become liable for any indebtedness for borrowed money or any other material liability or obligation or issue any debt securities, or guarantee or otherwise
become responsible for, the obligations of any other Person or make any loans or advances to any Person that is not a Subsidiary of the Parent, except (A) in connection with ordinary course working capital needs (including, without
limitation, the indebtedness incurred or to be incurred under the Parent Credit Agreement), or (B) letters of credit, reclamation bonds, financial assurances or other guarantees in respect of environmental or other obligations in the
ordinary course;
|
| (x) |
adopt a plan of liquidation or resolutions providing for the winding-up, liquidation or dissolution of the Parent or any of the Parent Material Subsidiaries;
|
- 106 -
| (xi) |
materially change the business carried on by the Parent and its Subsidiaries, as a whole;
|
| (xii) |
pay, discharge, settle, satisfy, compromise, waive, assign or release any material claims, liabilities or obligations prior to the same becoming due other than (A) in the ordinary course; (B) for
an aggregate amount of no greater than $30 million or (C) payment of any fees related to the Arrangement;
|
| (xiii) |
waive, release, grant, transfer, exercise, modify or amend in any material respect, other than in the ordinary course, (A) any existing material contractual rights in respect of any Parent
Mineral Interests, or (B) any material Authorization;
|
| (xiv) |
commence, as plaintiff, any legal proceeding before a Governmental Entity that could reasonably be expected to prevent or delay the consummation of the transactions contemplated hereby or
adversely affect the market price or value of the Parent Shares;
|
| (xv) |
take any action or fail to take any action which action or failure to act would result in the material loss, expiration or surrender of, or the loss of any material benefit under, or reasonably
be expected to cause any Governmental Entities to institute proceedings for the suspension, revocation or limitation of rights under, any material Authorizations necessary to conduct its businesses as now conducted or planned to be
conducted; or
|
| (xvi) |
amend its accounting policies or adopt new accounting policies except as required by concurrent changes in GAAP;
|
| (c) |
the Parent shall and shall cause each of its Subsidiaries to maintain and preserve all of its and its Subsidiaries rights under each of its Mineral Rights and Parent Properties under each of its
and its Subsidiaries’ Authorizations, including but not limited to obtaining the required extensions and renewals of the Parent’s and its Subsidiaries’ Authorizations;
|
| (d) |
the Parent shall not authorize, agree or otherwise commit to do any of the matters otherwise prohibited by this Section 5.4; and
|
| (e) |
the Parent and each of its Subsidiaries shall:
|
| (i) |
duly and timely file all Tax Returns required to be filed by it on or after the date hereof and all such Tax Returns will be true, complete and correct in all respects;
|
| (ii) |
timely withhold, collect, remit and pay all Taxes which are required to be withheld, collected, remitted or paid by it to the extent due and payable; and
|
- 107 -
| (iii) |
keep the Company reasonably informed of any material events, discussions, correspondence or other action with respect to any Tax audit, investigation or assessment.
|
| 5.5 |
Covenants Relating to the Consideration Shares
|
The Parent shall apply for and use commercially reasonable efforts to obtain approval of the listing for trading on the NYSE by the Effective Time of the Parent
Shares issuable pursuant to the Arrangement, subject to official notice of issuance. The Company shall use commercially reasonable efforts to cooperate with the Parent in connection with the foregoing, including by providing information
reasonably requested by the Parent in connection therewith.
| 5.6 |
Covenants Relating to TSX Listing
|
The Parent shall apply for and use commercially reasonable efforts to obtain approval of the listing for trading on the TSX by the Effective Time of the Parent
Shares issuable pursuant to the Arrangement. The Company shall use commercially reasonable efforts to cooperate with the Parent in connection with the foregoing, including by providing information reasonably requested by the Parent in connection
therewith.
| 5.7 |
Covenants of the Parent Regarding Blue-Sky Laws
|
The Parent shall use its commercially reasonable efforts to ensure that the Consideration Shares shall, at the Effective Time, either be registered or qualified
under all applicable U.S. state securities laws, or exempt from such registration and qualification requirements.
| 5.8 |
Covenants of the Parent Relating to the Arrangement
|
The Parent covenants and agrees that, during the period from the date of this Agreement until the earlier of the Effective Time and the termination of this Agreement
in accordance with its terms, it shall and shall cause its Subsidiaries to perform all obligations required to be performed by the Parent or any of its Subsidiaries under this Agreement, co-operate with the Company in connection therewith, and do
all such other acts and things as may be reasonably necessary or desirable in order to consummate and make effective the transactions contemplated in this Agreement and the Parent shall, and shall cause its Subsidiaries to:
| (a) |
other than in respect of the Regulatory Approvals, which shall be governed by Section 5.10, use its commercially reasonable efforts to effect all necessary registrations, filings and submissions
of information required by Governmental Entities from it or its Subsidiaries relating to the Arrangement;
|
| (b) |
other than in respect of the Regulatory Approvals, which shall be governed by Section 5.10, use commercially reasonable efforts to defend all lawsuits or other legal, regulatory or other
proceedings against the Parent challenging or affecting this Agreement or the consummation of the transactions contemplated hereby;
|
| (c) |
other than in respect of the Regulatory Approvals, which shall be governed by Section 5.10, use commercially reasonable efforts to satisfy all conditions precedent in this Agreement and take all
steps set forth in the Interim Order and the Final Order applicable to it and comply promptly with all requirements imposed by Law on it or its Subsidiaries with respect to this Agreement or the Arrangement;
|
- 108 -
| (d) |
use its commercially reasonable efforts to carry out all actions necessary to ensure the availability of the exemption from registration under section 3(a)(10) of the U.S. Securities Act and
applicable U.S. state securities laws;
|
| (e) |
other than in respect of the Regulatory Approvals, which shall be governed by Section 5.10, not take any action, or refrain from taking any commercially reasonable action, or permit any action to
be taken or not taken, which is inconsistent with this Agreement or which would reasonably be expected to prevent, materially delay or otherwise impede the consummation of the Arrangement or the transactions contemplated by this
Agreement; and
|
| (f) |
promptly (and, in any event, within twenty-four (24) hours) notify the Company of:
|
| (i) |
any Parent Material Adverse Effect or change, effect, event, occurrence or state of facts or circumstance that would reasonably be expected to have, individually or in the aggregate, a Parent
Material Adverse Effect;
|
| (ii) |
any notice or other communication from any Person alleging that the consent (or waiver, permit, exemption, order, approval, agreement, amendment or confirmation) of such Person (or another
Person) is required in connection with this Agreement or the Arrangement; or
|
| (iii) |
any material proceedings commenced or, to the knowledge of the Parent, threatened against, relating to or involving or otherwise affecting the Parent or any of its Subsidiaries in connection with
this Agreement or the Arrangement.
|
| 5.9 |
Indebtedness
|
During the period from the entry into this Agreement to the Effective Time, the Parties shall cooperate in good faith to mutually determine and use commercially
reasonable efforts to implement any necessary, appropriate or desirable arrangements in anticipation of the consummation of the Arrangement, regarding each Party’s and its Subsidiaries’ credit agreements (including the Company Credit Agreement),
indentures, hedging arrangements or other documents governing or relating to the indebtedness of the Parties and their Subsidiaries, including arrangements by way of amendments, consents, offers to exchange, offers to purchase, redemption,
payoff, new financing or otherwise, with respect to refinancing or retaining a Party’s or its Subsidiaries’ credit agreements or senior unsecured notes (including the Company Notes), and any security documents executed by the Company and its
Subsidiaries in connection with such credit agreements and/or senior unsecured notes, or other documents governing or relating to the indebtedness of the Parties and their Subsidiaries, provided that the Company is not required to implement any
such arrangements in respect of any indebtedness of the Company prior to the Effective Time. The Parent shall reimburse the Company for all reasonable out-of-pocket costs or expenses incurred by the Company and its Subsidiaries in connection with
cooperation provided for in this Section 5.9 to the extent the information requested was not otherwise prepared or available in the ordinary course. The Parent acknowledges and agrees that the consummation of the transactions contemplated by this
Agreement is not conditioned upon the consummation of, or the receipt by the Parent of the proceeds of, any such arrangements.
- 109 -
| 5.10 |
Regulatory Approvals
|
The Parent and the Company covenant and agree with respect to obtaining the Regulatory Approvals required for the completion of the transactions contemplated by this
Agreement that, subject to the term and conditions of this Agreement, until the earlier of the Effective Time and the time that this Agreement is terminated in accordance with its terms:
| (a) |
In respect of the CNA Approval, as promptly as reasonably practicable but in any event within twenty (20) business days of this Agreement or such other date as the Parties may reasonably agree,
the Parent and the Company shall submit a notification to CNA to obtain the CNA Approval.
|
| (b) |
In respect of the ICA Approval:
|
| (i) |
as promptly as reasonably practicable but in any event within twenty (20) business days of this Agreement or such other date as the Parties may reasonably agree, the Parent shall submit to the
Minister an application for review pursuant to Part IV of the ICA; and
|
| (ii) |
as promptly as reasonably practicable but in any event within twenty (20) business days of the filing of the application for review pursuant to Part IV of the ICA referenced in Section
5.10(b)(i), above, or such other date as the Parties may reasonably agree, the Parent shall submit to the Minister initial proposed undertakings.
|
| (c) |
In respect of the Competition Act Approval, as promptly as reasonably practicable but in any event within twenty (20) business days of this Agreement or such other date as the Parties may
reasonably agree, the Parties shall submit to the Commissioner a request for an advance ruling certificate under section 102 of the Competition Act or, in the alternative, a No Action Letter. Unless the Parties agree otherwise, within
twenty (20) business days of this Agreement, the Parent and the Company shall each submit to the Commissioner a pre-merger notification pursuant to Part IX of the Competition Act.
|
| (d) |
The Parent and the Company shall (and shall cause their respective Subsidiaries, as applicable), to file, as promptly as practicable but in any event within thirty (30) business days after the
date of this Agreement or such other date as the Parent and the Company may reasonably agree, any other filings or notifications under any other applicable federal, provincial, state or foreign Law required to obtain any other Regulatory
Approvals.
|
- 110 -
| (e) |
Other than in respect of the ICA Approval, the Parent and the Company shall use (and shall cause their respective Subsidiaries to use) their respective commercially reasonable efforts to obtain
the Regulatory Approvals as promptly as practicable after the date of this Agreement and, in any event, in order to allow the Effective Time to occur before the Outside Date; provided, however, that nothing in this Agreement (other than
in respect of the ICA Approval which shall be governed by Section 5.10(f)) shall require either Party or their respective Subsidiaries to propose, negotiate, effect or agree to, by consent decree, hold separate order or otherwise, the
sale, transfer, divestiture, license or other disposition of any assets or businesses of the Parent or the Company or their respective Subsidiaries or otherwise take any action that prohibits or limits either Parties’ or their respective
Subsidiaries’ freedom of action with respect to, or either Parties’ or their respective Subsidiaries’ ability to own, retain, control, operate or exercise full rights of ownership with respect to any of the businesses or assets of the
Parent, the Company or any of their respective Subsidiaries.
|
| (f) |
The Parent and the Company shall use (and shall cause their respective Subsidiaries to use) their respective reasonable best efforts to obtain the ICA Approval as promptly as practicable after
the date of this Agreement and, in any event, in order to allow the Effective Time to occur before the Outside Date. In fulfilling its obligations to use reasonable best efforts to obtain the ICA Approval, Parent shall, in good faith, (A)
propose, offer, negotiate, commit to, agree to and/or effect such written undertakings in a form and with the content that is customary for transactions of the nature of the transactions that are the subject of this Agreement, taking into
account the nature of the Company’s business and the Parent’s business (the “Initial Undertakings”), and (B) propose, offer, negotiate, commit to, agree to and/or effect revisions and/or additions
to the Initial Undertakings, if necessary in order to obtain the ICA Approval, provided that (i) any such undertakings shall be conditioned upon the consummation of the transactions that are the subject of this Agreement, (ii) any
reasonable effort by Parent to resist, reduce or negotiate the scope of any undertakings (other than the Initial Undertakings) proposed by a Governmental Entity shall be deemed consistent with its obligations to use reasonable best
efforts, so long as such effort does not delay the Effective Date or delay the obtaining of the ICA Approval in a manner that could cause the Effective Time not to occur before the Outside Date, and (iii) such undertakings, individually
or in aggregate, would not reasonably be expected to have a material and adverse impact on the business, results of operations or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole.
|
| (g) |
All filing fees (including any Taxes thereon) in respect of any filing made to any Governmental Entity in respect of any Regulatory Approvals shall be paid by the Parent.
|
| (h) |
With respect to obtaining the Regulatory Approvals, each of the Parent and the Company shall (and shall cause their respective Subsidiaries to) cooperate and coordinate with one another and shall
provide such assistance as the other Party may reasonably request in connection with obtaining the Regulatory Approvals. In particular:
|
| (i) |
neither the Parent nor the Company (nor their respective Subsidiaries) shall extend or consent to any extension of any applicable waiting or review period or enter into any agreement with a
Governmental Entity to not consummate the transactions contemplated by this Agreement, except upon the prior written consent of the other Party, such consent not to be unreasonably withheld, conditioned or delayed;
|
- 111 -
| (ii) |
the Parent and the Company shall (and shall cause their respective Subsidiaries to) exchange drafts of all submissions, substantive correspondence, filings, presentations, applications, plans,
consent agreements and other material documents made or submitted to or filed with any Governmental Entity in respect of the transactions contemplated by this Agreement, will consider in good faith any suggestions made by the other Party
and its counsel and will provide the other Party and its counsel with final copies of all such material submissions, correspondence, filings, presentations, applications, plans and other material documents, and all pre-existing business
records or other documents, submitted to or filed with any Governmental Entity in respect of the transactions contemplated by this Agreement; provided, however, that, subject to Section 5.10(i), information indicated by a Party to be
competitively sensitive shall be provided to the other Party’s external legal counsel only on an external counsel only basis;
|
| (iii) |
the Parent and the Company shall (and shall cause their respective Subsidiaries to) cooperate on a timely basis in the preparation of any response by the other Party to any request for additional
information received by such other Party from a Governmental Entity in connection with obtaining the Regulatory Approvals, and shall promptly provide or submit all documentation and information that is required by Law or a Governmental
Entity, requested by any Governmental Entity, or necessary or advisable in the opinion of the Parent, acting reasonably, in connection with obtaining the Regulatory Approvals;
|
| (iv) |
the Parent and the Company will (and shall cause their respective Subsidiaries to) keep the other Party and its respective counsel fully apprised of all
written (including email) and oral communications and all meetings with any Governmental Entity and their staff in relation to the Regulatory Approvals, and will not participate in such communications or meetings without giving the other
Party and its counsel the opportunity to participate therein; provided, however, that, subject to Section 5.10(i), where competitively sensitive information may be discussed or communicated, the external legal counsel of the other Party
shall be provided with any such communications or information on an external counsel only basis and shall have the right to participate in any such meetings on an external counsel only basis; and
|
| (v) |
the Parent and the Company shall (and shall cause their respective Subsidiaries to) make available its Representatives, on the reasonable request of the other Party and its counsel, to assist in
obtaining the Regulatory Approvals, including by (A) providing strategic input, including on any materials prepared for obtaining Regulatory Approvals, and (B) responding promptly to requests for support, documents, information, comments
or input where reasonably requested by the other Party in connection with the Regulatory Approvals.
|
- 112 -
| (i) |
With respect to Sections 5.10(h)(i) and 5.10(h)(iv) above, where a Party (in this Section 5.10 only, the “Disclosing Party”) provides any submissions,
communications, information, correspondence, filings, presentations, applications, plans, consent agreements or other documents to the Party (the “Receiving Party”) on an external counsel only
basis, the Disclosing Party shall also provide the Receiving Party with a redacted version of any such submissions, communications, information, correspondence, filings, presentations, applications, plans, consent agreements or other
documents.
|
| (j) |
The Parent and the Company shall not (and shall cause their respective Subsidiaries not to) enter into any transaction, investment, agreement, arrangement or joint venture or take any other
action, the effect of which would reasonably be expected to make obtaining the Regulatory Approvals materially more difficult or challenging, or reasonably be expected to materially delay the obtaining of the Regulatory Approvals.
|
| (k) |
The Parent and the Company shall use (and shall cause their respective Subsidiaries to use) their respective commercially reasonable efforts to defend any judicial or administrative action or
similar proceeding instituted (or threatened to be instituted) or pending by or before any Governmental Entity under any Law and to have any such action or proceeding withdrawn or discontinued and any stay, restraining order, injunction
or similar order entered by any Governmental Entity vacated, lifted, reversed, or overturned.
|
| 5.11 |
Resignations
|
Subject to Section 2.17, the Company shall use commercially reasonable efforts to obtain and deliver to the Parent at the Effective Time (a) the resignations and
mutual releases, effective as of the Effective Time, of all of the directors of the Company and its Subsidiaries requested by the Parent, in each case, substantially in the form and content of Schedule D hereto, and (b) separation agreements,
effective as of the Effective Time, with each member of senior management who will be terminated by the Company as of the Effective Time as requested by the Parent on terms and conditions acceptable to the Company, the Parent, each acting
reasonably, and the applicable member of management, provided that each such separation agreement shall (i) be conditional upon consummation of the Arrangement; (ii) be effective as at the Effective Time; (iii) provide for the severance payments
payable to such member of management pursuant to such member of management’s employment or consulting arrangements with the Company and applicable Law; (iv) provide for the entitlements payable to such member of management pursuant to the Company
Equity Incentive Plans; and (v) contain a mutual release substantially with the content of the mutual release contained in Schedule D hereto.
- 113 -
| 5.12 |
Employee Matters
|
| (a) |
The Parties acknowledge that the Arrangement will result in a “change of control” (or a term of similar import) for purposes of the Company Equity Incentive Plans and any employment agreements of
the Company Employees. From and after the Effective Time, the Parent covenants and agrees to cause the Company and any successor to the Company, to honour, satisfy, pay and fully comply in all material respects with the terms of all
existing employment, consulting, indemnification, incentive and bonus (long term and short term), change in control, severance, notice, termination or other compensation arrangements and agreements, and employment and severance
obligations of the Company and any of its Subsidiaries that were entered into prior to the date of this Agreement in the ordinary course including any such arrangements, agreements or obligations arising under or in connection with a
Company Benefit Plan (or, if not in the ordinary course, have been disclosed to the Parent in Schedule 3.1(s) of the Company Disclosure Letter). Subject to Section 2.17, nothing in this Agreement shall confer upon any person any right to
continue in the employ or service of the Parent, the Company or any of their respective Subsidiaries, or affect in any way the right of the Parent, the Company or any of their respective Subsidiaries to terminate his, her or its
employment or service, as applicable, at any time. For the avoidance of doubt, the Parties acknowledge and agree, and Parent represents, that the Arrangement will not result in a “change in control”
(or a term of similar import) for purposes of the Parent Incentive Plans, Parent Benefit Plans and employment, severance or other compensation arrangements or agreements of the Parent Employees. The Company will make any payments pursuant
to this section 5.12 through the payroll systems of the Company. All such amounts required to be paid pursuant to this section 5.12 shall be paid net of any Tax withholding required under applicable Law or in accordance with Section 2.14.
|
| (b) |
As soon as practicable following the date hereof and subject to Schedule 5.12 of the Parent Disclosure Letter, the Parent shall provide the Company with a list identifying all expected
Non-Continuing Employees. The Parent and the Company shall consult in good faith in determining which Company Employees will be Non-Continuing Employees and the related employee communication plans between the date hereof and the
Effective Time.
|
| (c) |
Within 30 days of the Effective Time, the Parent shall:
|
| (i) |
grant Parent Incentive Awards and target cash-based short-term incentive opportunities to each Continuing Employee that was not granted Company Incentive Awards and cash-based short-term
incentive opportunities in the ordinary course in the period between the date hereof and the Effective Time, which Parent Incentive Awards and cash-based short-term incentive opportunities shall have substantially the same value and
terms, in the aggregate, as those Company Incentive Awards and cash-based short-term incentive opportunities that such Continuing Employee would have received in the ordinary course during such period; and
|
| (ii) |
based on consultations with the Company prior to the Effective Time, grant Parent RSUs, as retention awards, to each holder of Company PSUs who is a Continuing Employee, which Parent RSUs: (A)
shall have substantially the same value as the difference in value between: (i) the cash payment the holder would have received for such holder’s Company PSUs held as at the Effective Time if the holder was a Non-Continuing Employee; and
(ii) cash payment the holder of such Company PSUs actually received for the Company PSUs held at the Effective Time; and (B) shall vest as to 50% on the first anniversary of the grant date and as to the remaining 50% on the second
anniversary of the grant date.
|
- 114 -
| 5.13 |
Pre-Acquisition Reorganization
|
| (a) |
The Company agrees that, upon request by the Parent, the Company shall, and shall cause each of its Subsidiaries to use commercially reasonable efforts to, (i) effect such reorganizations of the
Company’s or its Subsidiaries’ business, operations and assets or such other transactions as the Parent may request, acting reasonably (each a “Pre-Acquisition Reorganization”), (ii) co‑operate with
the Parent and its advisors in order to determine the nature of the Pre-Acquisition Reorganizations that might be undertaken and the manner in which they might most effectively be undertaken; and (iii) reasonably cooperate with the Parent
and its advisors to seek to obtain any consents, approvals, waivers or authorizations reasonably required in connection with the Pre-Acquisition Reorganization; provided, however, that the Pre-Acquisition Reorganizations (A) are not
prejudicial to the Company or its securityholders and do not result in Taxes being imposed on, or any adverse Tax or other consequences to, Company Shareholders or holders of Company Incentive Awards incrementally greater than the Taxes
or other consequences to such Party in connection with the consummation of the Arrangement in the absence of any Pre-Acquisition Reorganization; (B) do not require the Company to obtain the approval of the Company Shareholders or any
consent of any third party (including any Regulatory Approval); (C) do not impede, delay or prevent the satisfaction of any other conditions set forth in Article 6; (D) do not impair, impede or delay the consummation of the Arrangement,
and would not reasonably be expected to prevent any Person from making a Company Superior Proposal; (E) do not unreasonably interfere with the Company’s operations prior to the Effective Time; (F) do not result in any breach by the
Company or any of its Subsidiaries of any Contract or Authorization or any breach by the Company of the Company’s constating documents or by any of its Subsidiaries of their respective organization documents or Law; (G) are to be
completed as close as reasonably practicable prior to the Effective Time, and can be unwound in the event the Arrangement is not consummated without adversely affecting the Company or any of its Subsidiaries in any manner; (H) are not
required to be completed unless and until the Parent has irrevocably confirmed in writing that all of the conditions in favour of the Parent in Section 6.2 have been either satisfied or waived and that the Parent is prepared to promptly
and without condition proceed with the completion of the Arrangement; and (I) do not require any director, Company Employee or agent of the Company to take any action in any capacity other than as a director, Company Employee or agent of
the Company.
|
| (b) |
The Parent shall provide written notice to the Company of any proposed Pre-Acquisition Reorganization at least thirty (30) days prior to the anticipated Effective Time. Upon receipt of such
notice, the Parent and the Company shall work co-operatively and use commercially reasonable efforts to prepare prior to the Effective Time all documentation necessary and do all such other acts and things as are necessary (including all
corporate documentation required to implement the Pre-Acquisition Reorganization) to give effect to such Pre-Acquisition Reorganization.
|
- 115 -
| (c) |
The Parent agrees that any action (and the result of any action) taken by or on behalf of the Company or its Subsidiaries in furtherance of or respect of a Pre-Acquisition Reorganization shall be
deemed not to result in any breach of any representation, warranty, covenant or closing condition herein (including where any such Pre-Acquisition Reorganization requires the consent of any third party).
|
| (d) |
If the Arrangement is not completed, the Parent shall promptly:
|
| (i) |
reimburse the Company and its Subsidiaries for all Taxes, costs and expenses, including reasonable legal fees and disbursements incurred by the Company or its Subsidiaries in respect of a
Pre-Acquisition Reorganization, and including all amounts relating to the considering, effecting, voiding, reversing or unwinding of a Pre-Acquisition Reorganization; and
|
| (ii) |
indemnify and save harmless the Company, its Subsidiaries and their respective officers, directors, employees, agents, advisors and Representatives from and against any and all liabilities,
losses, damages, Taxes, claims, costs, expenses, interest awards, judgments and penalties suffered or incurred by any of them in respect of or as a result of a Pre-Acquisition Reorganization, or to reverse, terminate, modify or unwind any
Pre-Acquisition Reorganization.
|
| 5.14 |
Filings
|
The Parties will cooperate reasonably and in good faith to determine whether the transactions set out in this Agreement and any related transactions are required to
be reported to any applicable taxing authority pursuant to section 237.3 or 237.4 of the Tax Act (or any provisions of similar effect) and, if so, the Parties shall cooperate to make such reporting in a comprehensive and timely manner, in the
form required by such Law. The Parties may request reasonable representations and warranties from each other to the extent necessary to establish any factual matters relevant to the determination of whether reporting is required and the content
of such reporting.
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| 5.15 |
Access to Information; Confidentiality
|
| (a) |
From the date hereof until the earlier of the Effective Time and the termination of this Agreement pursuant to its terms, subject to compliance with applicable Law and the terms of any existing
Contracts, the Company shall, and shall cause its Subsidiaries and its and their respective Representatives to, afford to the Parent and to its Representatives such access as the Parent may reasonably require at all reasonable times, to
the Company’s officers, employees, agents, properties, books, records and Contracts (including Tax Returns and Tax work papers), and shall furnish the Parent with all data and information as the Parent may reasonably request, provided
that the Company shall not be required to afford such access or furnish such information to the extent that the Company believes, in its reasonable good faith judgment, that doing so would (i) result in the loss of attorney-client, work
product or other privilege, (ii) result in the disclosure of any trade secrets of third parties or violate any obligations of the Company or any of the Company’s Subsidiaries with respect to confidentiality to any third party, or
otherwise breach, contravene or violate any such effective Contract to which the Company or any Subsidiary of the Company is a party, or (iii) breach, contravene or violate any applicable Law. Without limiting the foregoing, during such
period, the Company shall, and shall cause its Subsidiaries and its and their respective Representatives to, afford the Parent and its Representatives such access to the Company Employees, the Company Property, the assets of the Company
and its Subsidiaries and the data, information and records (including data, information and records relating to Company Employees and such monthly reports with respect to the operations of the Company and its Subsidiaries as the Parent
may reasonably request) as is reasonably necessary in order for the Parent to observe the Company’s operations, to facilitate the closing of the Arrangement and the transition of the business of the Company and its Subsidiaries to the
Parent, including the right to have Representatives of the Parent on-site at the Company’s mines and processing facilities on the Company Property from time to time at the Parent’s request; and instruct the Representatives of the Company
and its Subsidiaries to cooperate with the Parent and its Representatives in its exercise of such rights; provided that any such access shall be during normal business hours upon reasonable advance notice to the Company, under the
supervision of the Company’s personnel and in such a manner as not to interfere with the conduct of the Company’s business or any other businesses of the Company; provided further that in no event shall Parent or any of its
Representatives be permitted to conduct any invasive or subsurface environmental testing, sampling or investigation of any environmental media or building materials, including the mines or processing facilities on the Company Property.
All such access shall be at the sole risk of the Parent and its Representatives, and the Parent shall comply with and cause its Representatives to comply with all of the Company’s policies with regard to health and safety while visiting
any mines or processing facilities on the Company Property.
|
| (b) |
The Parent and the Company acknowledge and agree that information furnished pursuant to this Section 5.15 shall be subject to the terms and conditions of the Confidentiality Agreement.
|
| 5.16 |
Insurance and Indemnification
|
| (a) |
Prior to the Effective Date, the Company shall purchase customary “tail” policies of directors’ and officers’ liability insurance providing protection no less favourable in the aggregate to the
protection provided by the policies maintained by the Company and its Subsidiaries which are in effect immediately prior to the Effective Date and providing protection in respect of claims arising from facts or events which occurred on or
prior to the Effective Date and the Parent will, or will cause the Company and its Subsidiaries to, maintain such tail policies in effect without any reduction in scope or coverage for six years from the Effective Date; provided that (i)
the Parent shall not be required to pay any amounts in respect of such coverage prior to the Effective Time, and (ii) the cost of such policy shall not exceed 400% of the Company’s current annual aggregate premium for policies currently
maintained by the Company or its Subsidiaries; provided that if such insurance can only be obtained at a premium in excess of the aforementioned amount, the Company may purchase such insurance at such excess premium only on commercially
reasonable terms and market-based pricing following consultation in good faith with Parent and Parent’s consent (not to be unreasonably withheld, conditioned or delayed).
|
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| (b) |
The Parent agrees that it shall honour all rights to indemnification or exculpation now existing in favour of present and former officers and directors of the Company and its Subsidiaries, and
acknowledges that such rights shall survive the completion of the Plan of Arrangement and shall continue in full force and effect for a period of not less than six (6) years from the Effective Date.
|
| (c) |
If the Company or the Parent or any of their respective successors or assigns shall (i) amalgamate, consolidate with or merge or wind-up into any other person and shall not be the continuing or
surviving corporation or entity; or (ii) transfer all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns and transferees of the
Company or the Parent, as the case may be, shall assume all of the obligations of the Company or the Parent, as applicable, set forth in this Section 5.16.
|
| (d) |
The provisions of this Section 5.16 are intended for the benefit of, and shall be enforceable by, each insured or indemnified Person, his or her heirs and his or her legal representatives and,
for such purpose, the Company hereby confirms that it is acting as agent on their behalf. Furthermore, this Section 5.16 shall survive the termination of this Agreement as a result of the occurrence of the Effective Date for a period of
six years.
|
| 5.17 |
Parent Charter Amendment
|
Prior to the Effective Time, and subject to obtaining the Parent Stockholder Approvals, Parent shall file with the Secretary of State of the State of Delaware the
Parent Charter Amendment.
ARTICLE 6
CONDITIONS
| 6.1 |
Mutual Conditions Precedent
|
The obligations of the Parties to complete the Arrangement are subject to the fulfillment of each of the following conditions precedent on or before the Effective
Time, each of which may only be waived, in whole or in part, with the mutual consent of the Parties:
| (a) |
the Arrangement Resolution shall have been approved and adopted by the Company Shareholders at the Company Meeting in accordance with the Interim Order;
|
| (b) |
the Interim Order and the Final Order shall each have been obtained on terms consistent with this Agreement, and shall not have been set aside or modified in a manner unacceptable to either the
Company or the Parent, each acting reasonably, on appeal or otherwise;
|
| (c) |
the Parent Stockholder Approvals shall have been obtained in accordance with the rules of the NYSE (with respect to the Parent Stock Issuance) and the DGCL (with respect to the Parent Charter
Amendment) at the Parent Meeting;
|
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| (d) |
the Parent Charter Amendment shall have been duly filed with the Secretary of State of the State of Delaware and be in full force and effect;
|
| (e) |
no Law is in effect that makes the consummation of the Arrangement illegal or otherwise prohibits or enjoins the Company or the Parent from consummating the Arrangement;
|
| (f) |
the Consideration Shares to be issued pursuant to this Agreement shall be exempt from the registration requirements of the U.S. Securities Act pursuant to Section 3(a)(10) thereof;
|
| (g) |
the distribution of the Consideration Shares shall be exempt from the prospectus and registration requirements of applicable Canadian securities laws either by virtue of exemptive relief from the
securities regulatory authorities of each of the provinces and territories of Canada or by virtue of applicable exemptions under Canadian Securities Laws and shall not be subject to resale restrictions under applicable Canadian Securities
Laws;
|
| (h) |
the Consideration Shares to be issued pursuant to the Arrangement shall have been approved for listing on the NYSE (subject only to official notice of issuance) and TSX (subject only to customary
conditions);
|
| (i) |
the Required Regulatory Approvals shall have been obtained and shall not have been modified or rescinded; and
|
| (j) |
this Agreement shall not have been terminated in accordance with its terms.
|
| 6.2 |
Additional Conditions Precedent to the Obligations of the Parent and Purchaser
|
The obligation of the Parent and Purchaser to complete the Arrangement is subject to the fulfillment of each of the following conditions precedent on or before the
Effective Time (each of which is for the exclusive benefit of the Parent and Purchaser and may be waived by the Parent, in whole or in part, at any time):
| (a) |
all covenants of the Company under this Agreement to be performed on or before the Effective Time shall have been duly performed by the Company in all material respects and the Parent shall have
received a certificate of the Company addressed to the Parent and dated the Effective Date, signed on behalf of the Company by a senior executive officer of the Company (on the Company’s behalf and without personal liability), confirming
the same as of the Effective Date;
|
- 119 -
| (b) |
(i) the representations and warranties of the Company set forth in this Agreement (other than as contemplated in clauses (ii) and (iii)) shall be true and correct in all respects, without regard
to any materiality or Company Material Adverse Effect qualifications contained in them, as of the date of this Agreement and as of the Effective Time as though made on and as of such date or time (except for representations and warranties
made as of a specified date, the accuracy of which shall be determined as of that specified date), except where the failure or failures of all such representations and warranties to be so true and correct in all respects would not
reasonably be expected to have a Company Material Adverse Effect; (ii) the representations and warranties of the Company set forth in Sections 3.1(a) [Organization and Qualification], 3.1(b) [Authority Relative to this Agreement], 3.1(c)(i)(A)(1) [No Conflict – No Violation of Constating Documents] and 3.1(t)(v) [Absence
of Certain Changes or Events – No Company Material Adverse Effect] shall be true and correct in all respects as of the date of this Agreement and as of the Effective Time as though made on
and as of such date or time, and (iii) the representations and warranties of the Company set forth in Sections 3.1(d) [Subsidiaries], 3.1(g) [Capitalization and
Listing] and 3.1(jj) [Brokers] shall be true and correct in all respects (except for de minimis inaccuracies
and as a result of transactions, changes, conditions, events or circumstances permitted hereunder) as of the date of this Agreement and as of the Effective Time as though made on and as of such date or time (except for representations and
warranties made as of a specified date, the accuracy of which shall be determined as of that specified date), and the Parent shall have received a certificate of the Company addressed to the Parent and dated the Effective Date, signed on
behalf of the Company by a senior executive officer of the Company (on the Company’s behalf and without personal liability), confirming the same;
|
| (c) |
between the date hereof and the Effective Time, there shall not have occurred a Company Material Adverse Effect that is continuing as of the Effective Time; and
|
| (d) |
Dissent Rights shall not have been exercised (or, if exercised, not withdrawn) with respect to more than 5% of the issued and outstanding Company Shares.
|
| 6.3 |
Additional Conditions Precedent to the Obligations of the Company
|
The obligation of the Company to complete the Arrangement is subject to the fulfillment of each of the following conditions precedent on or before the Effective Time
(each of which is for the exclusive benefit of the Company and may be waived by the Company, in whole or in part, at any time):
| (a) |
all covenants of the Parent under this Agreement to be performed on or before the Effective Time shall have been duly performed by the Parent in all material respects and the Company shall have
received a certificate of the Parent, addressed to the Company and dated the Effective Date, signed on behalf of the Parent by a senior executive officer (on the Parent’s behalf and without personal liability), confirming the same as of
the Effective Date;
|
- 120 -
| (b) |
(i) the representations and warranties of the Parent set forth in this Agreement (other than as contemplated in clauses (ii) and (iii)) shall be true and correct in all respects, without regard
to any materiality or Parent Material Adverse Effect qualifications contained in them, as of the date of this Agreement and as of the Effective Time as though made on and as of such date or time (except for representations and warranties
made as of a specified date, the accuracy of which shall be determined as of that specified date), except where the failure or failures of all such representations and warranties to be so true and correct in all respects would not
reasonably be expected to have a Parent Material Adverse Effect; (ii) the representations and warranties of the Parent set forth in Sections 4.1(a) [Organization and Qualification], 4.1(b) [Authority Relative to this Agreement], 4.1(c)(i)(A)(1) [No Conflict – No Violation of Constating Documents], and 4.1(s)(v) [Absence
of Certain Changes or Events – No Parent Material Adverse Effect] shall be true and correct in all respects as of the date of this Agreement and as of the Effective Time as though made on
and as of such date or time, and (iii) the representations and warranties of the Parent set forth in Sections 4.1(d) [Subsidiaries], 4.1(g) [Capitalization and
Listing] and 4.1(hh) [Brokers] shall be true and correct in all respects (except for de minimis inaccuracies and as a result of transactions,
changes, conditions, events or circumstances permitted hereunder) as of the date of this Agreement and as of the Effective Time as though made on and as of such date or time (except for representations and warranties made as of a
specified date, the accuracy of which shall be determined as of that specified date), and the Company shall have received a certificate of the Parent addressed to the Company and dated the Effective Date, signed on behalf of the Parent by
a senior executive officer of the Parent (on the Parent’s behalf and without personal liability), confirming the same;
|
| (c) |
the Parent shall have deposited, or caused to be deposited, with the Depositary sufficient Parent Shares to satisfy its obligations under Section 2.12, and the Depositary shall have confirmed to
the Company its receipt of such Parent Shares;
|
| (d) |
between the date hereof and the Effective Time, there shall not have occurred a Parent Material Adverse Effect that is continuing as of the Effective Time; and
|
| (e) |
the Company Director Nominees (to the extent they consented to their appointment) shall have been appointed to the Parent Board effective as of the Effective Time.
|
| 6.4 |
Satisfaction of Conditions
|
The conditions precedent set out in Section 6.1, Section 6.2 and Section 6.3 will be conclusively deemed to have been satisfied at the Effective Time. For greater
certainty, and notwithstanding the terms of any escrow arrangement entered into between the Parent and the Depositary, all Parent Shares held in escrow by the Depositary pursuant to Section 2.12 shall be released from escrow at the Effective Time
without any further act or formality required on the part of any Person.
ARTICLE 7
ADDITIONAL AGREEMENTS OF THE COMPANY REGARDING
ACQUISITION PROPOSALS
| 7.1 |
Non-Solicitation by the Company
|
| (a) |
Except as expressly provided in this Article 7, until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 9.2, the Company shall not,
and shall cause its Subsidiaries not to, and shall not authorize any of their respective Representatives to:
|
| (i) |
solicit, initiate, knowingly encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information,
properties, facilities, books or records of the Company or any of its Subsidiaries) any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to an Acquisition Proposal;
|
- 121 -
| (ii) |
engage or participate in any discussions or negotiations with any Person (other than the Parent or its affiliates) in respect of any inquiry, proposal or offer that constitutes or may reasonably
be expected to constitute or lead to an Acquisition Proposal, provided that the Company may (A) advise any Person of the restrictions of this Agreement, (B) clarify the terms of any proposal in order to determine if it is or may
reasonably be expected to result in a Company Superior Proposal, and (C) advise any Person making an Acquisition Proposal that the Company Board has determined that such Acquisition Proposal does not constitute, or is not reasonably
expected to result in, a Company Superior Proposal; or
|
| (iii) |
(A) adopt, approve, publicly endorse or publicly recommend or publicly propose to adopt, approve, endorse or recommend, any Acquisition Proposal, (B) withdraw, change, amend, modify or qualify,
or otherwise publicly propose to withdraw, change, amend, modify or qualify, in a manner adverse to Parent, the Company Board Recommendation, (C) if an Acquisition Proposal has been publicly disclosed, fail to publicly recommend against
any such Acquisition Proposal within ten (10) business days after Parent’s written request that the Company or the Company Board of Directors do so (or subsequently withdraw, change, amend, modify or qualify (or publicly propose to do
so), in a manner adverse to Parent, such rejection of such Acquisition Proposal) and reaffirm the Company Board Recommendation within such ten (10) business day period (or, with respect to any Acquisition Proposals or material amendments,
revisions or changes to the terms of any such previously publicly disclosed Acquisition Proposal that are publicly disclosed within the last ten (10) days prior to the then-scheduled Company Meeting, fail to take the actions referred to
in this clause (iii), with references to the applicable ten (10) business day period being replaced with three (3) business days), (D) fail to include the Company Board Recommendation in the Company Circular, (E) approve or authorize, or
cause or permit the Company or any Company Subsidiary to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle, option agreement, joint
venture agreement, partnership agreement or similar agreement or document relating to, or any other agreement or commitment providing for, any Acquisition Proposal (other than an acceptable confidentiality agreement entered into in
accordance with Section 7.3(d)) or (F) commit or agree to do any of the foregoing (any act described in clauses (A), (B), (C), (D), (E) or (F) (to the extent related to the foregoing clauses (A), (B), (C), (D) or (E)) a “Company Change in Recommendation”).
|
- 122 -
| (b) |
The Company shall, and shall cause its Subsidiaries and direct their respective Representatives to, immediately cease and cause to be terminated any existing solicitation, encouragement,
discussion or negotiation with any Person (other than the Parent or its affiliates) with respect to any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to an Acquisition Proposal and, in
connection therewith, the Company will discontinue access to any of its and its Subsidiaries’ confidential information (and not establish or allow access to any of its confidential information, or any data room, virtual or otherwise, in
each case, except as permitted by this Agreement) and shall as promptly as reasonably practicable request, and use commercially reasonable efforts to exercise all rights it has (or cause its Subsidiaries to exercise rights that they have)
to require the return or destruction of all confidential information regarding the Company and its Subsidiaries provided in the preceding 12-month period in connection therewith (to the extent such information has not already been
returned or destroyed and shall use its commercially reasonable efforts to confirm that such requests are complied with in accordance with the terms of such rights). The Company shall not, and shall not authorize or permit any of its
Subsidiaries to, directly or indirectly, amend, modify or release any third party from any confidentiality, non-solicitation or standstill agreement (or standstill provisions contained in any such agreement) to which such third party is a
party (it being understood that the automatic termination or release of any standstill provisions contained in any such agreements as a result of the entering into or announcement of this Agreement shall not be a violation of this Section
7.1(b), or terminate, modify, amend or waive the terms thereof).
|
| (c) |
For the avoidance of doubt, any violation of the restrictions set forth in this Section 7.1 by the Company Board (including any committee thereof), by any of the Company’s officers, by any of the
Company’s other affiliates or by any of their respective Representatives shall be a breach of this Section 7.1 by the Company.
|
| 7.2 |
Notification of Acquisition Proposals
|
If the Company or any of its Subsidiaries or any of their respective Representatives receives (x) any inquiry, proposal or offer that constitutes or could reasonably
be expected to constitute or lead to an Acquisition Proposal or (y) any request for non-public information relating to the Company or any of its Subsidiaries or access to the properties, books or records of the Company or any Subsidiary in
connection with any inquiry, proposal or offer that constitutes or could reasonably be expected to constitute or lead to an Acquisition Proposal, then the Company shall promptly notify the Parent orally and then as soon as reasonably practicable
thereafter (and, in any event, within twenty-four (24) hours) in writing of such Acquisition Proposal, inquiry, proposal, offer or request and shall indicate the identity of the Person or group of Persons making such proposal, inquiry or contact
and all material terms and conditions thereof and shall provide a copy of any such Acquisition Proposal, inquiry, proposal, offer or request and unredacted copies of all material written communications (and a summary of all substantive
discussions) related thereto. The Company shall keep the Parent promptly (and in any event within 24 hours) informed of the status and any change to the material terms, of any such Acquisition Proposal, inquiry, proposal, offer or request. The
Company agrees that it will not, directly or indirectly, enter into any agreement with any Person which directly or indirectly prohibits the Company from providing any information to the Parent in accordance with, or otherwise complying with,
this Article 7.
- 123 -
| 7.3 |
Responding to Acquisition Proposals
|
Notwithstanding Section 7.1, if, prior to the approval of the Arrangement Resolution by the Company Shareholders, the Company receives a bona fide written Acquisition Proposal, the Company may (x) engage in or participate in discussions and negotiations with the Person or group of Persons making such Acquisition Proposal, and (y) provide such Person or group of
Persons non-public information relating to the Company or any of its Subsidiaries or access to the properties, books or records of the Company or any Subsidiary, if and only if:
| (a) |
the Company Board first determines, in good faith after consultation with the Company’s legal and financial advisors, that such Acquisition Proposal constitutes or would reasonably be expected to
constitute or lead to a Company Superior Proposal and has provided the Parent with written notice of such determination;
|
| (b) |
the Company Board first determines, in good faith after consultation with the Company’s legal and financial advisors, that the failure to participate in such discussions or negotiations or to
disclose such non-public information to such third party would be inconsistent with its fiduciary duties under applicable Law;
|
| (c) |
such Acquisition Proposal did not result from a breach of Section 7.1 by the Company in any material respect; and
|
| (d) |
prior to providing any such copies, access or disclosures, (i) the Company enters into a confidentiality agreement with such Person, or confirms it has previously entered into such an agreement
which remains in effect, in either case on terms not materially less stringent than the Confidentiality Agreement, (ii) the Company provides the Parent with a true, complete and final executed copy of such confidentiality agreement, and
(iii) any such copies, access or disclosure provided to such Person shall have already been or shall concurrently be provided to the Parent.
|
| 7.4 |
Superior Proposals and Right to Match
|
| (a) |
Notwithstanding any other provision of this Agreement, if, prior to the approval of the Arrangement Resolution by the Company Shareholders, the Company receives a bona fide written Acquisition Proposal that the Company Board (after consultation with the Company’s legal and financial advisors) determines in good faith constitutes a Company Superior Proposal, the Company Board may
make a Company Change in Recommendation and/or enter into a definitive agreement (a “Company Proposed Agreement”) with respect to such Company Superior Proposal if and only if:
|
| (i) |
such Acquisition Proposal did not result from a breach of Section 7.1 by the Company in any material respect;
|
| (ii) |
prior to making a Company Change in Recommendation and/or entering into a Company Proposed Agreement, the Company has provided the Parent with a notice in writing (a “Superior Proposal Notice”), which notice shall contain (A) a statement that the Company Board has determined such Acquisition Proposal constitutes a Company Superior Proposal, (B)
the value in financial terms that the Company Board has determined should be ascribed to any non-cash consideration offered under such Company Superior Proposal, (C) a copy of any Company Proposed Agreement relating to such Company
Superior Proposal, and (D) copies of any material financing documents provided to the Company in connection therewith (with customary redactions);
|
- 124 -
| (iii) |
at least five business days (the “Matching Period”) shall have elapsed from the date that the Parent received the Superior Proposal Notice from the
Company;
|
| (iv) |
during the Matching Period, the Parent shall have had the opportunity (but not the obligation) to amend the terms of the Arrangement in accordance with Section 7.4(b);
|
| (v) |
after the Matching Period, the Company Board (after consultation with the Company’s legal and financial advisors) has determined in good faith that such Acquisition Proposal continues to
constitute a Company Superior Proposal compared to any proposed amendments to the terms of the Arrangement by the Parent; and
|
| (vi) |
prior to or concurrently with entering into such Company Proposed Agreement, the Company shall have terminated this Agreement pursuant to Section 9.2(a)(iv)(C) and shall have paid to the Parent
the Company Termination Payment pursuant to Section 9.4(c)(ii).
|
| (b) |
The Company acknowledges and agrees that, during the Matching Period, (i) the Parent shall have the opportunity, but not the obligation, to propose to amend the terms of the Arrangement, (ii) the
Company shall negotiate in good faith with the Parent regarding any amendments that the Parent may propose to the terms of the Arrangement as would enable the Parent to proceed with the Arrangement and any related transactions on such
amended terms, and (iii) the Company Board shall review any proposal by the Parent to amend the terms of the Arrangement in order to determine in good faith whether such proposal, if implemented in accordance with its terms, would result
in the Acquisition Proposal previously constituting a Company Superior Proposal ceasing to constitute a Company Superior Proposal compared to the proposed amendments to the terms of the Arrangement. If the Company Board determines that
such Acquisition Proposal would cease to constitute a Company Superior Proposal as compared to the proposed amendments to the terms of the Arrangement, the Company and the Parent will promptly amend this Agreement and the Plan of
Arrangement to reflect such proposed amendments.
|
| (c) |
The Company Board shall promptly reaffirm the Company Board Recommendation by press release after: (i) any Acquisition Proposal which the Company Board determines not to constitute a Company
Superior Proposal is publicly announced; or (ii) the Company Board determines that a proposed amendment to the terms of the Arrangement pursuant to Section 7.4(b) would result in any Acquisition Proposal which has been publicly announced
no longer constituting a Company Superior Proposal. The Parent and its counsel shall be given a reasonable opportunity to review and comment on the form and content of any such press release, recognizing that whether or not such comments
are appropriate will be determined by the Company, acting reasonably.
|
- 125 -
| (d) |
Nothing contained in this Agreement shall prohibit the Company Board from responding through a directors’ circular or otherwise as required by applicable Securities Laws to an Acquisition
Proposal that it determines is not a Company Superior Proposal if: (i) in the good faith judgment of the Company Board, after consultation with outside legal counsel, failure to make such disclosure would be inconsistent with its
fiduciary duties or such disclosure is otherwise required by applicable Law, (ii) the Company provides each of the Parent and its legal counsel with a reasonable opportunity to review and comment on the form and content of any such
disclosure, including but not limited to the directors’ circular or otherwise, and (iii) the Company considers all reasonable amendments to such disclosure as requested by the Parent and its legal counsel, acting reasonably. Nothing in
this Agreement shall prevent the Company Board from (i) calling and holding a meeting of Company Shareholders requisitioned by Company Shareholders in accordance with the BCBCA, or (ii) calling and holding a meeting of Company
Shareholders ordered to be held by a court in accordance with Law.
|
| (e) |
Each successive amendment or modification of any Acquisition Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the
Company Shareholders or other material terms or conditions thereof, shall constitute a new Acquisition Proposal for the purposes of this Section 7.4 (except that the Matching Period in respect of any such successive amendment or
modification shall be two business days).
|
ARTICLE 8
ADDITIONAL AGREEMENTS OF THE PARENT REGARDING ACQUISITION PROPOSALS
| 8.1 |
Non-Solicitation by the Parent
|
| (a) |
Except as expressly provided in this Article 8, until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 9.2, the Parent shall not,
and shall cause its Subsidiaries not to, and shall not authorize any of their respective Representatives to:
|
| (i) |
solicit, initiate, knowingly encourage or otherwise knowingly facilitate (including by way of furnishing or providing copies of, access to, or disclosure of, any confidential information,
properties, facilities, books or records of the Parent or any of its Subsidiaries) any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to an Acquisition Proposal;
|
| (ii) |
engage or participate in any discussions or negotiations with any Person (other than the Company or its affiliates) in respect of any inquiry, proposal or offer that constitutes or may reasonably
be expected to constitute or lead to an Acquisition Proposal, provided that the Parent may (A) advise any Person of the restrictions of this Agreement, (B) clarify the terms of any proposal in order to determine if it is or may reasonably
be expected to result in a Parent Superior Proposal, and (C) advise any Person making an Acquisition Proposal that the Parent Board has determined that such Acquisition Proposal does not constitute, or is not reasonably expected to result
in, a Parent Superior Proposal; or
|
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| (iii) |
(A) adopt, approve, publicly endorse or publicly recommend or publicly propose to adopt, approve, endorse or recommend, any Acquisition Proposal, (B) withdraw, change, amend, modify or qualify,
or otherwise publicly propose to withdraw, change, amend, modify or qualify, in a manner adverse to the Company, the Parent Board Recommendation, (C) if an Acquisition Proposal has been publicly disclosed, fail to publicly recommend
against any such Acquisition Proposal within ten (10) business days after the Company’s written request that the Parent or the Parent Board of Directors do so (or subsequently withdraw, change, amend, modify or qualify (or publicly
propose to do so), in a manner adverse to Company, such rejection of such Acquisition Proposal) and reaffirm the Parent Board Recommendation within such ten (10) business day period (or, with respect to any Acquisition Proposals or
material amendments, revisions or changes to the terms of any such previously publicly disclosed Acquisition Proposal that are publicly disclosed within the last ten (10) days prior to the then-scheduled Parent Meeting, fail to take the
actions referred to in this clause (iii), with references to the applicable ten (10) business day period being replaced with three (3) business days), (D) fail to include the Parent Board Recommendation in the Parent Proxy Statement, (E)
approve or authorize, or cause or permit the Parent or any Parent Subsidiary to enter into, any merger agreement, acquisition agreement, reorganization agreement, letter of intent, memorandum of understanding, agreement in principle,
option agreement, joint venture agreement, partnership agreement or similar agreement or document relating to, or any other agreement or commitment providing for, any Acquisition Proposal (other than an acceptable confidentiality
agreement entered into in accordance with Section 8.3(d)) or (F) commit or agree to do any of the foregoing (any act described in clauses (A), (B), (C), (D), (E) or (F) (to the extent related to the foregoing clauses (A), (B), (C), (D) or
(E)) a “Parent Change in Recommendation”).
|
| (b) |
The Parent shall, and shall cause its Subsidiaries and direct their respective Representatives to, immediately cease and cause to be terminated any existing solicitation, encouragement,
discussion or negotiation with any Person (other than the Company or its affiliates) with respect to any inquiry, proposal or offer that constitutes or may reasonably be expected to constitute or lead to an Acquisition Proposal and, in
connection therewith, the Parent will discontinue access to any of its and its Subsidiaries’ confidential information (and not establish or allow access to any of its confidential information, or any data room, virtual or otherwise, in
each case, except as permitted by this Agreement) and shall as promptly as reasonably practicable request, and use commercially reasonable efforts to exercise all rights it has (or cause its Subsidiaries to exercise rights that they have)
to require the return or destruction of all confidential information regarding the Parent and its Subsidiaries provided in the preceding 12-month period in connection therewith (to the extent such information has not already been returned
or destroyed and shall use its commercially reasonable efforts to confirm that such requests are complied with in accordance with the terms of such rights). The Parent shall not, and shall not authorize or permit any of its Subsidiaries
to, directly or indirectly, amend, modify or release any third party from any confidentiality, non-solicitation or standstill agreement (or standstill provisions contained in any such agreement) to which such third party is a party (it
being understood that the automatic termination or release of any standstill provisions contained in any such agreements as a result of the entering into or announcement of this Agreement shall not be a violation of this Section 8.1(b)),
or terminate, modify, amend or waive the terms thereof.
|
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| (c) |
For the avoidance of doubt, any violation of the restrictions set forth in this Section 8.1 by the Parent Board (including any committee thereof), by any of the Parent’s officers, by any of the
Parent’s other affiliates or by any of their respective Representatives shall be a breach of this Section 8.1 by the Parent.
|
| 8.2 |
Notification of Acquisition Proposals
|
If the Parent or any of its Subsidiaries or any of their respective Representatives receives (x) any inquiry, proposal or offer that constitutes or could reasonably
be expected to constitute or lead to an Acquisition Proposal or (y) any request for non-public information relating to the Parent or any of its Subsidiaries or access to the properties, books or records of the Parent or any Subsidiary in
connection with any inquiry, proposal or offer that constitutes or could reasonably be expected to constitute or lead to an Acquisition Proposal, then the Parent shall promptly notify the Company orally and then as soon as reasonably practicable
thereafter (and, in any event, within twenty-four (24) hours) in writing of such Acquisition Proposal, inquiry, proposal, offer or request and shall indicate the identity of the Person or group of Persons making such proposal, inquiry or contact
and all material terms and conditions thereof and shall provide a copy of any such Acquisition Proposal, inquiry, proposal, offer or request and unredacted copies of all material written communications (and a summary of all substantive
discussions) related thereto. The Parent shall keep the Company promptly (and in any event within 24 hours) informed of the status and any change to the material terms, of any such Acquisition Proposal, inquiry, proposal, offer or request. The
Parent agrees that it will not, directly or indirectly, enter into any agreement with any Person which directly or indirectly prohibits the Parent from providing any information to Company in accordance with, or otherwise complying with, this
Article 8.
| 8.3 |
Responding to Acquisition Proposals
|
Notwithstanding Section 8.1, if, prior to the Parent Stockholder Approvals, the Parent receives a bona fide written
Acquisition Proposal, the Parent may (x) engage in or participate in discussions and negotiations with the Person or group of Persons making such Acquisition Proposal, and (y) provide such Person or group of Persons non-public information
relating to the Parent or any of its Subsidiaries or access to the properties, books or records of the Parent or any Subsidiary, if and only if:
| (a) |
the Parent Board first determines, in good faith after consultation with the Parent’s legal and financial advisors, that such Acquisition Proposal constitutes or would reasonably be expected to
constitute or lead to a Parent Superior Proposal and has provided the Company with written notice of such determination;
|
| (b) |
the Parent Board first determines, in good faith after consultation with the Parent’s legal and financial advisors, that the failure to participate in such discussions or negotiations or to
disclose such non-public information to such third party would be inconsistent with its fiduciary duties or such disclosure is otherwise required by applicable Law;
|
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| (c) |
such Acquisition Proposal did not result from a breach of Section 8.1 by the Parent in any material respect; and
|
| (d) |
prior to providing any such copies, access or disclosures, (i) the Parent enters into a confidentiality agreement with such Person, or confirms it has previously entered into such an agreement
which remains in effect, in either case on terms not materially less stringent than the Confidentiality Agreement, (ii) the Parent provides the Company with a true, complete and final executed copy of such confidentiality agreement, and
(iii) any such copies, access or disclosure provided to such Person shall have already been or shall concurrently be provided to the Company.
|
| 8.4 |
Superior Proposals and Right to Match
|
| (a) |
Notwithstanding any other provision of this Agreement, if, prior to the Parent Stockholder Approvals, the Parent receives a bona fide written Acquisition
Proposal that the Parent Board (after consultation with the Parent’s legal and financial advisors) determines in good faith constitutes a Parent Superior Proposal, the Parent Board may make a Parent Change in Recommendation and/or enter
into a definitive agreement (a “Parent Proposed Agreement”) with respect to such Parent Superior Proposal if and only if:
|
| (i) |
such Acquisition Proposal did not result from a breach of Section 8.1 by the Parent in any material respect;
|
| (ii) |
prior to making a Parent Change in Recommendation and/or entering into a Parent Proposed Agreement, the Parent has provided the Company with a notice in writing (a “Parent Superior Proposal Notice”), which notice shall contain (A) a statement that the Parent Board has determined such Acquisition Proposal
constitutes a Parent Superior Proposal, (B) the value in financial terms that the Parent Board has determined should be ascribed to any non-cash consideration offered under such Parent Superior Proposal, (C) a copy of any Parent Proposed
Agreement relating to such Parent Superior Proposal, and (D) copies of any material financing documents provided to the Parent in connection therewith (with customary redactions);
|
| (iii) |
at least five business days (the “Parent Matching Period”) shall have elapsed from the date that the Company
received the Parent Superior Proposal Notice from the Parent;
|
| (iv) |
during the Parent Matching Period, the Company shall have had the opportunity (but not the obligation) to amend the terms of the Arrangement in accordance with Section 8.4(b);
|
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| (v) |
after the Parent Matching Period, the Parent Board (after consultation with the Parent’s legal and financial advisors) has determined in good faith that such Acquisition Proposal continues to
constitute a Parent Superior Proposal compared to any proposed amendments to the terms of the Arrangement by the Company; and
|
| (vi) |
prior to or concurrently with entering into such Parent Proposed Agreement, the Parent shall have terminated this Agreement pursuant to Section 9.2(a)(iii)(C) and shall have paid to the Company
the Parent Termination Payment pursuant to Section 9.4(e)(ii).
|
| (b) |
The Parent acknowledges and agrees that, during the Parent Matching Period, (i) the Company shall have the opportunity, but not the obligation, to propose to amend the terms of the Arrangement,
(ii) the Parent shall negotiate in good faith with the Company regarding any amendments that the Company may propose to the terms of the Arrangement as would enable the Company to proceed with the Arrangement and any related transactions
on such amended terms, and (iii) the Parent Board shall review any proposal by the Parent to amend the terms of the Arrangement in order to determine in good faith whether such proposal, if implemented in accordance with its terms, would
result in the Acquisition Proposal previously constituting a Parent Superior Proposal ceasing to constitute a Parent Superior Proposal compared to the proposed amendments to the terms of the Arrangement. If the Parent Board determines
that such Acquisition Proposal would cease to constitute a Parent Superior Proposal as compared to the proposed amendments to the terms of the Arrangement, the Parent and the Company will promptly amend this Agreement and the Plan of
Arrangement to reflect such proposed amendments.
|
| (c) |
The Parent Board shall promptly reaffirm the Parent Board Recommendation by press release after: (i) any Acquisition Proposal which the Parent Board determines not to constitute a Parent Superior
Proposal is publicly announced; or (ii) the Parent Board determines that a proposed amendment to the terms of the Arrangement pursuant to Section 8.4(b) would result in any Acquisition Proposal which has been publicly announced no longer
constituting a Parent Superior Proposal. The Company and its counsel shall be given a reasonable opportunity to review and comment on the form and content of any such press release, recognizing that whether or not such comments are
appropriate will be determined by the Parent, acting reasonably.
|
| (d) |
Nothing in this Agreement shall prevent the Parent Board from (i) calling and holding a meeting of the Parent Stockholders requisitioned by the Parent Stockholders in accordance the Parent’s
constating documents, (ii) calling and holding a meeting of the Parent Stockholders ordered to be held by a court in accordance with Law, (iii) disclosing to the Parent Stockholders a position contemplated by Rules 14d-9 and 14e-2(a)
promulgated under the Exchange Act or other disclosure required to be made in the Parent Proxy Statement by applicable laws, and (iv) making any “stop, look and listen” communication to the Parent Stockholders pursuant to Rule 14d-9(f)
promulgated under the Exchange Act, or any similar statement in response to any publicly disclosed Acquisition Proposal; provided that any “stop, look and listen” statement, or any such similar statement also includes an express
reaffirmation of the Parent Board Recommendation.
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| (e) |
Each successive amendment or modification of any Acquisition Proposal that results in an increase in, or modification of, the consideration (or value of such consideration) to be received by the
Parent Stockholders or other material terms or conditions thereof, shall constitute a new Acquisition Proposal for the purposes of this Section 8.4 (except that the Matching Period in respect of any such successive amendment or
modification shall be two business days).
|
ARTICLE 9
TERM, TERMINATION, AMENDMENT AND WAIVER
| 9.1 |
Term
|
This Agreement shall be effective from the date hereof until the earlier of the Effective Time and the termination of this Agreement in accordance with its terms.
| 9.2 |
Termination
|
| (a) |
This Agreement may be terminated at any time prior to the Effective Time:
|
| (i) |
by mutual written agreement of the Company and the Parent;
|
| (ii) |
by either the Company or the Parent, if:
|
| (A) |
the Effective Time shall not have occurred on or before May 15, 2026 (the “Initial Outside Date” and as may be extended pursuant to this Section
9.2(a)(ii)(A), the “Outside Date”); provided, however, that if (x) the Effective Time has not occurred by such date by reason of nonsatisfaction of the condition set forth in Section 6.1(i) and (y)
all other conditions in Article 6 have theretofore been satisfied (other than those conditions that by their terms are to be satisfied at the Effective Time, each of which is capable of being satisfied at the Effective Time) or (to the
extent permitted by Law) waived, the Outside Date will be August 15, 2026; provided, further that the right to terminate this Agreement under this Section 9.2(a)(ii)(A) shall not be available to any Party whose failure to perform any of
its covenants or agreements or breach of any of its representations and warranties under this Agreement has been the cause of, or resulted in, the failure of the Effective Time to occur by the Outside Date;
|
| (B) |
after the date hereof, there shall have been enacted, made or enforced any applicable Law (or any applicable Law shall have been amended) that makes consummation of the Arrangement illegal or
otherwise prohibited or enjoins the Company or the Parent from consummating the Arrangement and such applicable Law, prohibition or enjoinment shall have become final and non-appealable; provided that the Party seeking to terminate this
Agreement pursuant to this Section 9.2(a)(ii)(B) has used its commercially reasonable efforts, as applicable and to the extent required by Section 5.10, to appeal or overturn such law or otherwise have it lifted or rendered non-applicable
in respect of the Arrangement, and provided further that the enactment, making, enforcement or amendment of such Law was not primarily due to the failure of such Party to perform any of its covenants or agreements hereunder;
|
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| (C) |
the Company Shareholder Approval shall not have been obtained at the Company Meeting (or any adjournment(s) or postponement(s) thereof) in accordance with the Interim Order, except that the right
to terminate this Agreement under this Section 9.2(a)(ii)(C) shall not be available to any Party whose failure to perform any of its covenants or agreements or breach of any of its representations and warranties in any material respect
under this Agreement has been the cause of, or resulted in, the failure to receive the Company Shareholder Approval; or
|
| (D) |
the Parent Stockholder Approvals shall not have been obtained at the Parent Meeting (or any adjournment(s) or postponement(s) thereof) in accordance with applicable Law, except that the right to
terminate this Agreement under this Section 9.2(a)(ii)(D) shall not be available to any Party whose failure to perform any of its covenants or agreements or breach of any of its representations and warranties in any material respect under
this Agreement has been the cause of, or resulted in, the failure to receive the Parent Stockholder Approvals; or
|
| (iii) |
by the Parent, if:
|
| (A) |
(1) there is a Company Change in Recommendation or (2) the Company shall have breached Section 7.1 in any material respect;
|
| (B) |
subject to compliance with Section 9.3, (x) a breach of any representation or warranty, or (y) failure to perform any covenant or agreement on the part of the Company set forth in this Agreement
(other than Section 7.1), in each case, shall have occurred that would cause the conditions set forth in Sections 6.1 or 6.2 not to be satisfied, and (i) such breach or failure is incapable of being cured prior to the Outside Date or,
(ii) if such breach is capable of being cured, is not cured by the time provided in Section 9.3(b); provided that the Parent is not then in breach of this Agreement so as to cause any condition in Sections 6.1 or 6.3 not to be satisfied;
or
|
| (C) |
prior to the Parent Stockholder Approvals, the Parent wishes to enter into a Parent Proposed Agreement with respect to a Parent Superior Proposal (other than a confidentiality and standstill
agreement permitted by Section 8.3); provided that the Parent is then in compliance with Article 8 in all material respects and that, prior to or concurrently with such termination, the Parent pays the Parent Termination Payment pursuant
to Section 9.4(e); or
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| (iv) |
by the Company, if:
|
| (A) |
(1) there is a Parent Change in Recommendation or (2) the Parent shall have breached Section 8.1 in any material respect;
|
| (B) |
subject to compliance with Section 9.3, (x) a breach of any representation or warranty, or (y) failure to perform any covenant or agreement on the part of the Parent set forth in this Agreement
(other than in Section 8.1), in each case, shall have occurred that would cause the conditions set forth in Sections 6.1 or 6.3 not to be satisfied, and (i) such breach or failure is incapable of being cured prior to the Outside Date or,
(ii) if such breach is capable of being cured, is not cured by the time provided in Section 9.3(b); provided that the Company is not then in breach of this Agreement so as to cause any condition in Sections 6.1 or 6.2 not to be satisfied;
or
|
| (C) |
prior to the approval of the Arrangement Resolution, the Company wishes to enter into a Company Proposed Agreement with respect to a Company Superior Proposal (other than a confidentiality and
standstill agreement permitted by Section 7.3); provided that the Company is then in compliance with Article 7 in all material respects and that, prior to or concurrently with such termination, the Company pays the Company Termination
Payment pursuant to Section 9.4(c).
|
| (b) |
The Party desiring to terminate this Agreement pursuant to this Section 9.2 (other than pursuant to Section 9.2(a)(i)) shall give notice of such termination to the other Parties, specifying in
reasonable detail the basis for such Party’s exercise of its termination right.
|
| (c) |
If this Agreement is terminated pursuant to Section 9.1 or Section 9.2, this Agreement shall become void and be of no further force or effect without liability of any Party (or any shareholder,
director, officer, employee, agent, consultant or representative of such Party) to any other Party hereto, except that: (i) in the event of termination under Section 9.1 as a result of the Effective Time occurring, the provisions of this
Section 9.2(c) and Sections 2.15, 5.12, 5.13, 5.16, 10.1,10.2, 10.3, 10.5, 10.6 and 10.10 and all related definitions set forth in Section 1.1 shall survive for a period of six (6) years thereafter; and (ii) in the event of termination
under Section 9.2, the provisions of this Section 9.2(c) and Sections 5.13, 9.4, 10.2, 10.3, 10.4, 10.5 and 10.6 and all related definitions set forth in Section 1.1 and the provisions of the Confidentiality Agreement shall survive
indefinitely; provided that, subject to Section 9.4(h), neither Party shall be relieved or released from any liabilities or damages arising out of fraud or wilful breach by it of any provision of this Agreement.
|
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| 9.3 |
Notice and Cure
|
| (a) |
Each Party shall give prompt notice to the other of the occurrence, or failure to occur, at any time from the date hereof until the earlier to occur of the termination of this Agreement in
accordance with its terms and the Effective Time, of any event or state of facts which occurrence or failure would, or would be likely to:
|
| (i) |
cause any of the representations or warranties of such Party contained herein to be untrue or inaccurate in any material respect from the date hereof to the Effective Time; or
|
| (ii) |
result in the failure to comply with or satisfy any agreement, covenant or condition to be complied with or satisfied by such Party hereunder prior to the Effective Time,
|
provided, however, that
the delivery of any notice pursuant to this Section 9.3 shall not limit or otherwise affect the representations, warranties, covenants and agreements of the Parties (or remedies available hereunder to the Party receiving that notice) or the
conditions to the obligations of the Parties under this Agreement.
| (b) |
No Party may elect to terminate this Agreement pursuant to the conditions set forth herein or any termination right arising therefrom under Section 9.2(a)(iii)(B) or Section 9.2(a)(iv)(B), as
applicable, and no payments are payable as a result of such termination pursuant to Section 9.4 unless, prior to the Effective Date, the Party seeking to terminate this Agreement has delivered a written notice to the other Party
indicating its intention to terminate this Agreement specifying in reasonable detail all breaches of covenants, representations and warranties or other matters which the Party delivering such notice is asserting as the basis for
termination. After delivering such notice, provided that a Party is proceeding diligently to cure such matter and such matter is capable of being cured, no Party may terminate this Agreement for the reasons set out in such written notice
until the earlier of the Outside Date and the expiration of a period of fifteen (15) business days from the date of such notice. If such notice is delivered prior to the date of the Company Meeting, the Company may postpone or adjourn the
Company Meeting to the earlier of a date that is five business days prior to the Outside Date and the date that is fifteen (15) business days following the delivery of such notice.
|
| 9.4 |
Termination Payments
|
| (a) |
Except as otherwise provided herein, all fees, costs and expenses incurred in connection with this Agreement and the Plan of Arrangement shall be paid by the Party incurring such fees, costs or
expenses, whether or not the Arrangement is consummated.
|
| (b) |
For the purposes of this Agreement, “Company Termination Payment Event” means the termination of this Agreement:
|
| (i) |
by the Parent pursuant to Section 9.2(a)(iii)(A) [Company Change in Recommendation or Material Breach of
Non-Solicitation];
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| (ii) |
by the Company pursuant to Section 9.2(a)(iv)(C) [Company Superior Proposal]; or
|
| (iii) |
by either Party pursuant to Section 9.2(a)(ii)(A) [Outside Date] or by either Party pursuant to Section 9.2(a)(ii)(C) [Company
Shareholder Approval] or by the Parent pursuant to Section 9.2(a)(iii)(B) [Company Breach of Representations and Warranties or Covenants], but, in each case, only if (A) prior to such
termination, a bona fide Acquisition Proposal in respect of the Company shall have been made to the Company and publicly announced by any Person making the Acquisition Proposal (other than the
Parent or its affiliates), (B) such Acquisition Proposal has not expired or been withdrawn at least five business days prior to the Company Meeting, and (C) within 12 months following the date of such termination, either (1) the Company
or one or more of its Subsidiaries enters into a definitive agreement in respect of an Acquisition Proposal other than a confidentiality agreement permitted by Section 7.3 (whether or not such Acquisition Proposal is the same Acquisition
Proposal referred to in clauses (A) and (B) above) and such Acquisition Proposal is subsequently consummated (whether or not within such 12-month period), or (2) an Acquisition Proposal (whether or not such Acquisition Proposal is the
same Acquisition Proposal referred to in clauses (A) and (B) above) is consummated (and, for purposes of this Section 9.4(b)(iii), the term “Acquisition Proposal” shall have the meaning ascribed to such term in Section 1.1, except that
any reference to “20%” therein shall be deemed to be a reference to “50%”).
|
| (c) |
If a Company Termination Payment Event occurs, the Company shall pay the Company Termination Payment to the Parent, or as the Parent may direct, as liquidated damages in consideration for the
loss of the Parent’s rights under this Agreement, by wire transfer of immediately available funds, as follows:
|
| (i) |
if the Company Termination Payment is payable pursuant to Section 9.4(b)(i), the Company Termination Payment shall be payable within two (2) business days following such termination;
|
| (ii) |
if the Company Termination Payment is payable pursuant to Section 9.4(b)(ii), the Company Termination Payment shall be payable prior to or concurrently with such termination; or
|
| (iii) |
if the Company Termination Payment is payable pursuant to Section 9.4(b)(iii), the Company Termination Payment shall be payable concurrently with the consummation of the Acquisition Proposal
referred to therein.
|
| (d) |
For purposes of this Agreement, “Parent Termination Payment Event” means the termination of this Agreement:
|
| (i) |
by the Company pursuant to Section 9.2(a)(iv)(A) [Parent Change in Recommendation or Material Breach of Non-Solicitation];
|
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| (ii) |
by the Parent pursuant to Section 9.2(a)(iii)(C) [Parent Superior Proposal]; or
|
| (iii) |
by either Party pursuant to Section 9.2(a)(ii)(A) [Outside Date] or by either Party pursuant to Section 9.2(a)(ii)(D) [Parent
Stockholder Approvals] or by the Company pursuant to Section 9.2(a)(iv)(B) [Parent Breach of Representations and Warranties or Covenants], but, in each case, only if (A) prior to such
termination, a bona fide Acquisition Proposal in respect of the Parent shall have been made to the Parent and publicly announced by any Person making the Acquisition Proposal (other than the
Company or its affiliates), (B) such Acquisition Proposal has not expired or been withdrawn at least five business days prior to the Parent Meeting, and (C) within 12 months following the date of such termination, either (1) the Parent or
one or more of its Subsidiaries enters into a definitive agreement in respect of an Acquisition Proposal other than a confidentiality agreement permitted by Section 8.3 (whether or not such Acquisition Proposal is the same Acquisition
Proposal referred to in clauses (A) and (B) above) and such Acquisition Proposal is subsequently consummated (whether or not within such 12-month period), or (2) an Acquisition Proposal (whether or not such Acquisition Proposal is the
same Acquisition Proposal referred to in clauses (A) and (B) above) is consummated (and, for purposes of this Section 9.4(d)(iii), the term “Acquisition Proposal” shall have the meaning ascribed to such term in Section 1.1, except that
any reference to “20%” therein shall be deemed to be a reference to “50%”).
|
| (e) |
If a Parent Termination Payment Event occurs, the Parent shall pay the Parent Termination Payment to the Company, or as the Company may direct, as liquidated damages in consideration for the loss
of the Company’s rights under this Agreement, by wire transfer of immediately available funds, as follows:
|
| (i) |
if the Parent Termination Payment is payable pursuant to Section 9.4(d)(i), the Parent Termination Payment shall be payable within two (2) business days following such termination;
|
| (ii) |
if the Parent Termination Payment is payable pursuant to Section 9.4(d)(ii), the Parent Termination Payment shall be payable prior to or concurrently with such termination; or
|
| (iii) |
if the Parent Termination Payment is payable pursuant to Section 9.4(d)(iii), the Parent Termination Payment shall be payable concurrently with the consummation of the Acquisition Proposal
referred to therein.
|
| (f) |
In the event that either Party terminates this Agreement pursuant to Section 9.2(a)(ii)(C) [Company Shareholder Approval], and no Company Change in
Recommendation has occurred, the Company shall reimburse the Parent in respect of the reasonable and documented expenses of the Parent’s third party Representatives incurred in respect of the Arrangement and this Agreement up to a maximum
amount of $33,965,000. Such reimbursement shall be made by wire transfer in immediately available funds within three business days following the later of (a) such termination and (b) the date on which reasonable documentation evidencing
the expenses incurred has been delivered to the Company by the Company to an account specified by the Parent. Each of the Parties hereby acknowledges that in the event the Company Termination Payment is paid by the Company in accordance
with Section 9.4(b), this Section 9.4(f) shall not apply and no reimbursement under this Section 9.4(f) shall be payable by the Company.
|
- 136 -
| (g) |
In the event that either Party terminates this Agreement pursuant to Section 9.2(a)(ii)(D) [Parent Stockholder Approvals], and no Parent Change in
Recommendation has occurred, the Parent shall reimburse to the Company in respect of the reasonable and documented expenses of the Company’s third party Representatives incurred in respected of the Arrangement and this Agreement up to a
maximum amount of $33,965,000. Such reimbursement shall be made by wire transfer in immediately available funds within three business days following the later of (a) such termination and (b) the date on which reasonable documentation
evidencing the expenses incurred has been delivered to the Parent by the Company to an account specified by the Company. Each of the Parties hereby acknowledges that in the event the Parent Termination Payment is paid by the Parent in
accordance with Section 9.4(d), this Section 9.4(g) shall not apply and no reimbursement under this Section 9.4(g) shall be payable by the Parent.
|
| (h) |
Each of the Parties acknowledges that the agreements contained in this Section 9.4 are an integral part of the transactions contemplated in this Agreement and that, without those agreements, the
Parties would not enter into this Agreement. Each Party acknowledges that all of the payment amounts set out in this Section 9.4 are payments in consideration for the disposition of rights of the Party entitled to receive such payments,
and that the amounts set out in this Section 9.4 are payments of liquidated damages which are a genuine pre-estimate of the damages, which the Party entitled to such damages will suffer or incur as a result of the event giving rise to
such payment and the resultant termination of this Agreement and are not penalties. Each Party irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. For greater
certainty, each Party agrees that, (a) upon any termination of this Agreement under circumstances where the Parent is entitled to the Company Termination Payment and the Company Termination Payment
is paid in full, such payment shall be the sole and exclusive remedy of the Parent in respect of the event giving rise to such payment and the Parent shall be precluded from any other remedy against the Company at Law or in equity or
otherwise (including damages, injunctive relief or specific performance) and shall not seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, against the Company or any of
its Subsidiaries or any of their respective directors, officers, employees, partners, managers, members, shareholders or affiliates or their respective Representatives in connection with this Agreement or the transactions contemplated
hereby, and (b) upon any termination of this Agreement under circumstances where the Company is entitled to the Parent Termination Payment and the Parent Termination Payment is paid in full, such
payment shall be the sole and exclusive remedy of the Company in respect of the event giving rise to such payment and the Company shall be precluded from any other remedy against the Parent at Law or in equity or otherwise (including
damages, injunctive relief or specific performance) and shall not seek to obtain any recovery, judgment, or damages of any kind, including consequential, indirect, or punitive damages, against the Parent or any of its Subsidiaries or any
of their respective directors, officers, employees, partners, managers, members, shareholders or affiliates or their respective Representatives in connection with this Agreement or the transactions contemplated hereby; provided, however,
that the foregoing limitations shall not apply in the event of fraud or a wilful breach by the Company or the Parent of their respective obligations under this Agreement, as applicable. For clarity, nothing contained in this Section
9.4(h) shall preclude the Company or the Parent from seeking injunctive relief against the other party in accordance with Section 10.4 to restrain the breach or threatened breach of the covenants or agreements set forth in this Agreement
or the Confidentiality Agreement or otherwise to obtain specific performance of any of such acts, covenants or agreements, without the necessity of posting a bond or security in connection therewith.
|
- 137 -
| (i) |
For the avoidance of doubt: (a) in no event shall the Company be obligated to pay the Company Termination Payment on more than one occasion; (b) in no event shall the Parent be obligated to pay
the Parent Termination Payment on more than one occasion; and (c) if a Company Termination Payment or a Parent Termination Payment becomes payable after a payment has been made pursuant to Section 9.4(f) or 9.4(g), the amount paid
pursuant to Section 9.4(f) or 9.4(g), as applicable, shall be credited against the Company Termination Payment or Parent Termination Payment, as applicable, when paid.
|
| 9.5 |
Amendment
|
Subject to the provisions of the Interim Order and Final Order and applicable Laws, the Plan of Arrangement and applicable Laws, this Agreement and the Plan of
Arrangement may, at any time and from time to time before or after the holding of the Company Meeting but not later than the Effective Time, be amended by mutual written agreement of the Parties, without further notice to or authorization on the
part of the Company Shareholders, and any such amendment may without limitation:
| (a) |
change the time for performance of any of the obligations or acts of the Parties;
|
| (b) |
waive any inaccuracies or modify any representation or warranty contained herein or in any document delivered pursuant hereto;
|
| (c) |
waive compliance with or modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties; and
|
| (d) |
waive compliance with or modify any mutual conditions precedent herein contained.
|
- 138 -
| 9.6 |
Waiver
|
No waiver of any of the provisions of this Agreement will constitute a waiver of any other provision (whether or not similar). No waiver will be binding unless
executed in writing by the Party or Parties to be bound by the waiver. A Party’s failure or delay in exercising any right or remedy under this Agreement will not operate as a waiver of such right or remedy. A single or partial exercise of any
right or remedy will not preclude a Party from any other or further exercise of that right or the exercise of any other right or remedy.
ARTICLE 10
GENERAL PROVISIONS
| 10.1 |
Privacy
|
Each Party shall comply with applicable Privacy Laws in the course of collecting, using and disclosing Personal Information in connection with the transactions
contemplated by this Agreement (the “Transaction Personal Information”). Prior to the Effective Date, the Parent shall not use or disclose Transaction Personal Information for any purposes other than those
related to determining if it shall proceed with the transactions contemplated by this Agreement, the performance of this Agreement, or the consummation of the transactions contemplated by this Agreement. If the Parent completes the transactions
contemplated by this Agreement, the Parent shall not, following the Effective Date, without the consent of the individuals to whom such Transaction Personal Information relates or as permitted or required by applicable Law, use or disclose
Transaction Personal Information for purposes other than those for which such Transaction Personal Information was collected by the Company or for which subsequent consent was obtained by the Company prior to the Effective Date. The Parent shall
protect and safeguard the Transaction Personal Information against unauthorized collection, use or disclosure. The Parent shall cause its advisors to observe the terms of this Section 10.1 and to protect and safeguard Transaction Personal
Information in their possession. If this Agreement shall be terminated, the Parent shall promptly deliver to the Company all Transaction Personal Information in its possession or in the possession of any of its advisors, including all copies,
reproductions, summaries or extracts thereof, except, unless prohibited by applicable Law, for electronic backup copies made automatically in accordance with the usual backup procedures of the Parent. Following the completion of the transactions
contemplated by this Agreement, the Parent shall provide written notice to all individuals who are the subject of any Personal Information that their information has been disclosed in connection with the Arrangement.
| 10.2 |
Notices
|
All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed to have been duly given and received on the day
it is delivered, provided that it is delivered on a business day prior to 5:00 p.m. local time in the place of delivery or receipt. However, if notice is delivered after 5:00 p.m. local time or if such day is not a business day then the notice
shall be deemed to have been given and received on the next business day. Notice shall be sufficiently given if delivered (either in Person, by courier service or other personal method of delivery), or if transmitted by email to the Parties at
the following addresses (or at such other addresses as shall be specified by any Party by notice to the other given in accordance with these provisions):
- 139 -
| (a) |
if to the Parent or Purchaser:
|
Coeur Mining, Inc.
200 South Wacker Drive, Suite 2100
Chicago, IL 60606
United States
| Attention: |
Casey M. Nault
|
| Email: |
[***]
|
with a copy (which shall not constitute notice) to:
Goodmans LLP
Bay Adelaide Centre
333 Bay Street, Suite 3400
Toronto, Ontario M5H 2S7
| Attention: |
Kari MacKay / Hari Marcovici
|
| Email: |
[***] / [***]
|
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, NY 10166-0193
| Attention: |
Andrew Kaplan
|
| Email: |
[***]
|
| (b) |
if to the Company:
|
New Gold Inc.
Brookfield Place
181 Bay Street, Suite 3320
Toronto, Ontario M5J 2T3
| Attention: |
Sean Keating
|
| Email: |
[***]
|
with a copy (which shall not constitute notice) to:
Davies Ward Phillips & Vineberg LLP
155 Wellington Street West, Suite 3700
Toronto, Ontario M5V 3J7
| Attention: |
Richard Fridman and Aaron Atkinson
|
| Email: |
[***] / [***]
|
Paul, Weiss, Rifkind, Wharton & Garrison LLP
1285 Avenue of the Americas
New York, New York 10019
|
Attention:
|
Christopher J. Cummings
|
|
Email:
|
[***]
|
- 140 -
| 10.3 |
Governing Law; Waiver of Jury Trial
|
This Agreement shall be governed, including as to validity, interpretation and effect, by the laws of the Province of British Columbia and the federal laws of Canada
applicable therein. Each of the Parties hereby irrevocably attorns to the exclusive jurisdiction of the courts of the Province of British Columbia in respect of all matters arising under and in relation to this Agreement and the Arrangement. EACH
PARTY TO THIS AGREEMENT HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE
ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT.
| 10.4 |
Injunctive Relief
|
Prior to the termination of this Agreement in accordance with Section 9.2 and subject to Section 9.4(h), the Parties agree that irreparable harm would occur for
which money damages would not be an adequate remedy at Law in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, the Parties acknowledge and
agree that, in order to prevent breaches or threatened breaches of this Agreement and to enforce specifically the terms and provisions hereof (including the obligations of the Parent pursuant to Section 2.12), the non-breaching Party will be
entitled, without the requirement of posting a bond or other security, to equitable relief, including injunctive relief and specific performance, and the Parties shall not object to the granting of injunctive or other equitable relief on the
basis that there exists an adequate remedy at Law. Prior to the termination of this Agreement in accordance with Section 9.2 and subject to Section 9.4(h), such remedies will not be the exclusive remedies for any breach of this Agreement but will
be in addition to all other remedies available at Law or equity to each of the Parties. The Parties acknowledge and agree that the right of specific enforcement is an integral part of the transactions contemplated by this Agreement and without
that right, neither the Company nor the Parent would have entered into this Agreement.
| 10.5 |
Entire Agreement, Binding Effect
|
This Agreement (including the exhibits and schedules hereto, the Parent Disclosure Letter and the Company Disclosure Letter) and the Confidentiality Agreement
constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the Parties, or any of them, with respect to the subject matter hereof and thereof and, except as expressly provided
herein, this Agreement is not intended to and shall not confer upon any Person other than the Parties any rights or remedies hereunder.
| 10.6 |
No Liability
|
No director or officer of the Parent shall have any personal liability whatsoever to the Company under this Agreement, or any other document delivered in connection
with the transactions contemplated hereby on behalf of the Parent. No director or officer of the Company shall have any personal liability whatsoever to the Parent under this Agreement, or any other document delivered in connection with the
transactions contemplated hereby on behalf of the Company.
- 141 -
| 10.7 |
Further Assurances
|
Each Party shall use commercially reasonable efforts do all such things and provide reasonable assurances as may be required to consummate the Arrangement, and each
Party shall provide such further documents or instruments as reasonably required by any other Party as necessary or desirable to effect the purpose of this Agreement and carry out its provisions, whether before or after the Effective Time.
| 10.8 |
Assignment and Enurement
|
The Parent may assign all or any part of its rights under this Agreement to, and its obligations under this Agreement may be assumed by, its wholly-owned Subsidiary,
provided that if such assignment and/or assumption takes place, the Parent shall continue to be liable jointly and severally with such Subsidiary for all of its obligations hereunder and such Subsidiary shall remain at all times up to and
including the Effective Date a wholly-owned Subsidiary of the Parent. This Agreement shall not be otherwise assignable by any Party without the prior written consent of the other Party hereto. This Agreement shall be binding on and shall enure to
the benefit of the Parties and their respective successors and permitted assigns. For greater certainty, no assignment made pursuant to this Section 10.8 shall modify the obligation to deliver Consideration Shares as Consideration pursuant to
this Agreement.
| 10.9 |
Severability
|
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule or Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon such
determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are fulfilled to the fullest extent possible.
| 10.10 |
No Third Party Beneficiaries
|
The provisions of Section 5.12, 5.16 and 10.1 are: (i) intended for the benefit of the individuals referred to therein, as and to the extent applicable in accordance
with their terms, and shall be enforceable by each of such Persons and his or her heirs, executors, administrators and other legal representations (collectively, the “Third Party Beneficiaries”) and the
Company shall hold the rights and benefits of Section 5.12, 5.16 and 10.1 in trust for and on behalf of the Third Party Beneficiaries and the Company hereby accepts such trust and agrees to hold the benefit of and enforce performance of such
covenants on behalf of the Third Party Beneficiaries; and (ii) in addition to, and not in substitution for, any other rights that the Third Party Beneficiaries may have by contract or otherwise. Except for the rights of the Company Shareholders
to receive the consideration for their Company Shares following the Effective Time pursuant to the Arrangement, and the rights of Third Party Beneficiaries under Section 5.12 and 5.16, which rights are hereby acknowledged and agreed by the
Parties, this Agreement is not intended to confer any rights or remedies upon any Person other than the Parties.
- 142 -
| 10.11 |
Counterparts, Execution
|
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. The Parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this Agreement, and such facsimile or similar executed electronic copy shall be legally effective to create a
valid and binding agreement between the Parties.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF the Parties have executed
this Agreement as of the date first written above.
|
COEUR MINING, INC.
|
|
|
By:
|
/s/ Mitchell J. Krebs |
|
|
|
Name:
|
Mitchell J. Krebs |
|
|
|
Title:
|
Chairman, President and Chief Executive Officer |
|
1561611 B.C. LTD.
|
|
|
By:
|
/s/ Mitchell J. Krebs |
|
|
|
Name:
|
Mitchell J. Krebs |
|
|
|
Title:
|
President |
|
NEW GOLD INC.
|
|
|
By:
|
/s/ Patrick Godin |
|
|
|
Name:
|
Patrick Godin |
|
|
|
Title:
|
President and Chief Executive Officer |
Signature Page – Arrangement Agreement
SCHEDULE A
PLAN OF ARRANGEMENT
PLAN OF ARRANGEMENT
(Please see attached.)
PLAN OF ARRANGEMENT
UNDER SECTION 288 OF THE
BUSINESS CORPORATIONS ACT (BRITISH COLUMBIA)
ARTICLE 1
| 1.1 |
Definitions
|
In this Plan of Arrangement, unless the context otherwise requires:
“5-Day VWAP” means, in respect of the Company Shares, the volume weighted average share price of the Company Shares on the TSX (during continuous
trading hours) for the five trading days ending on the trading date immediately preceding the Value Determination Date, calculated by dividing the total Canadian dollar value of the Company Shares traded in such five trading day period on
the TSX (during continuous trading hours) by the total number of such shares traded on the TSX (during continuous trading hours) for such five-day trading period;
“Accelerated RSUs” has the meaning ascribed thereto in Section 2.3(c)(i);
“Arrangement” means the arrangement of Company under Part 9, Division 5 of the BCBCA on the terms and
subject to the conditions set out in this Plan of Arrangement, subject to any amendments or variations thereto made in accordance with the terms of the Arrangement Agreement, this Plan of Arrangement, or made at the direction of the Court
in the Final Order (with the prior written consent of both Company and Parent, each acting reasonably);
“Arrangement Agreement” means the arrangement agreement dated November 2, 2025
among Parent, Purchaser and Company to which this Plan of Arrangement is attached as Schedule A, including all schedules annexed thereto, together with
the Company Disclosure Letter and the Parent Disclosure Letter, as the same may be amended, supplemented or otherwise modified from time
to time in accordance with the terms thereof;
“Arrangement Resolution” means the special resolution of the Company Shareholders approving the Plan of
Arrangement, which is to be considered and, if thought fit, passed at the Company Meeting, substantially in the form and content of Schedule B to the Arrangement Agreement;
“Authorization” means, with respect to any Person, any authorization, order, permit, approval, grant, agreement, licence,
classification, restriction, registration, consent, order, right, notification, condition, franchise, privilege, certificate, judgment, writ, injunction, award, determination, direction or decision having the force of Law, of, from or
required by any Governmental Entity having jurisdiction over such Person;
“BCBCA” means the Business Corporations Act (British Columbia);
“business day” means any day, other than a Saturday, a Sunday or a statutory or civic holiday in Mexico
City, Mexico, New York, New York, Toronto, Ontario or Vancouver, British Columbia;
E-1
“Cash Out Value” for a Company Option means an amount, which amount cannot be less than zero, equal to (a) the product of (i) the number of
Company Shares for which such Company Option may be exercised and (ii) the 5-Day VWAP of the Company Shares, minus (b) the exercise price of such Company Option.
“Company” means New Gold Inc., a corporation existing under the laws of the Province of
British Columbia;
“Company DSU Plan” means the deferred share unit plan of Company effective May 6, 2010, as amended;
“Company DSUs” means the outstanding deferred share units granted under the Company DSU Plan;
“Company Equity Incentive Plans” means, collectively, the Company Option Plan, the Company LTIP and the Company DSU Plan;
“Company Incentive Awards” means, collectively, the Company DSUs, Company RSUs, Company Options and Company PSUs;
“Company LTIP” means the long term incentive plan of Company effective February 19, 2025, as amended;
“Company Meeting” means the special meeting of Company Shareholders, including any adjournment or postponement thereof, to be called and held in
accordance with the Interim Order to consider the Arrangement Resolution and for any other purpose as may be set out in the Company Circular and agreed to in writing by Parent;
“Company Optionholder” means a holder of Company Options;
“Company Option Plan” means the stock option plan of Company effective May 4, 2011, as amended;
“Company Options” means the outstanding options to purchase Company Shares granted under the Company Option Plan;
“Company PSUs” means the outstanding performance share units granted under the Company LTIP;
“Company RSUs” means the outstanding restricted share units granted under the Company LTIP;
“Company Shareholders” means the registered and/or beneficial holders of Company Shares, as the context requires;
“Company Shares” means the common shares in the capital of the Company;
E-2
“Consideration” means the consideration to be received by the Company Shareholders (other than Dissenting Shareholders) pursuant to this Plan of Arrangement for their Company Shares, consisting of the Exchange
Ratio of a Parent Share for each Company Share;
“Consideration Shares” means the Parent Shares to be issued to the Company Shareholders pursuant to this Plan of Arrangement;
“Continuing Employees” means Company Employees that are employed by the Parent, the Company or any of their respective Subsidiaries immediately
following the Effective Time;
“Depositary” means Computershare Investor Services Inc., or such other Person as Parent and Company may appoint (acting reasonably) to act as
depositary in respect of the Arrangement;
“Dissent Rights” has the meaning ascribed thereto in Section 4.1(a);
“Dissent Shares” means the Company Shares held by a Dissenting Shareholder in respect of which the Dissenting Shareholder has properly and
validly exercised Dissent Rights;
“Dissenting Shareholder” means a registered Company Shareholder as of the record date of the Company Meeting who has properly and validly
dissented in respect of the Arrangement Resolution in strict compliance with the Dissent Rights, who has not withdrawn or been deemed to have withdrawn such exercise of Dissent Rights and who is ultimately determined to be entitled to be
paid the fair value of its Company Shares, but only in respect of the Dissent Shares;
“DRS Advice” has the meaning specified in Section 3.1;
“Effective Date” means the date upon which the Arrangement becomes effective in accordance with Section 2.11(a) of
the Arrangement Agreement;
“Effective Time” means 12:01 a.m. on the Effective Date or such other time as Parent and Company agree to in writing before the Effective Date;
“Exchange Ratio” means 0.4959;
“Final Order” means the final order of the Court contemplated by Section 2.7 of the Arrangement Agreement made pursuant to Section 291 of the
BCBCA, in a form and substance acceptable to Company and Parent, each acting reasonably, approving the Arrangement, including as such order may be amended, supplemented, modified or varied by the Court (with the consent of both Company
and Parent, each acting reasonably) at any time prior to the Effective Date or, if appealed, then, unless such appeal is withdrawn or denied, as affirmed or as amended (provided that any such amendment is acceptable to both Company and
Parent, each acting reasonably) on appeal;
E-3
“Governmental Entity” means: (a) any international, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank,
court, tribunal, arbitral body, international arbitration institution, commission, board, ministry bureau, agency or entity, domestic or foreign; (b) any stock exchange, including the TSX, the NYSE and the NYSE American; (c) any
subdivision, agent, commission, board or authority of any of the foregoing; or (d) any quasi‑governmental or private body or self-regulatory organization exercising any regulatory, expropriation or taxing authority under or for the
account of any of the foregoing;
“including” means including without limitation, and “include” and “includes” have a corresponding meaning;
“Interim Order” means the interim order of the Court made pursuant to Section 291 of the BCBCA following the application therefor submitted to
the Court after being informed of the intention to rely upon the exemption from registration under Section 3(a)(10) of the U.S. Securities Act with respect to the Consideration Shares issued pursuant to the Arrangement as contemplated by
Section 2.3 of the Arrangement Agreement, in a form and in substance acceptable to Company and Parent, each acting reasonably, providing for, among other things, the calling and holding of the Company Meeting, including as such order may
be amended, supplemented, modified or varied by the Court (with the consent of Company and Parent, each acting reasonably);
“Law” or “Laws” means all laws (including common law), by-laws, statutes, rules, regulations,
principles of law and equity, orders, rulings, ordinances, judgements, injunctions, determinations, awards, decrees or other requirements, whether domestic or foreign, that are binding upon or applicable to such Person or its business,
and the terms and conditions of any Authorization of or from any Governmental Entity, and, for greater certainty, includes Securities Laws and applicable common law, and the term “applicable” with
respect to such Laws and in a context that refers to a Party, means such Laws as are applicable to such Party and/or its Subsidiaries or their business, undertaking, property or securities and emanate from a Person having jurisdiction
over the Party and/or its Subsidiaries or its or their business, undertaking, property or securities;
“Letter of Transmittal” means the letter of transmittal to be delivered to registered Company Shareholders for use in connection with the
Arrangement;
“Liens” means any hypothecs, mortgages, pledges, assignments, liens, charges, security interests,
encumbrances and adverse rights or claims or other third party interests or encumbrances of any kind, whether contingent or absolute, and any agreement, option, lease, sublease, restriction, easement, right-of-way, right or privilege
(whether by Law, contract or otherwise) capable of becoming any of the foregoing;
“Non-Continuing Employees” means Company Employees whose employment with the Company or any of its Subsidiaries is terminated by the Company or
its Subsidiaries, as applicable, without cause, at or immediately prior to the Effective Time;
“Notice of Dissent” means a written notice provided by a Company Shareholder that is a registered holder of Company Shares to the Company setting
forth such Company Shareholder’s objection to the Arrangement Resolution and exercise of Dissent Rights;
“NYSE” means the New York Stock Exchange;
E-4
“NYSE American” means the NYSE American Stock Exchange;
“Parent Shares” means the common stock in the capital of Parent;
“Parties” means, together, Parent, Purchaser and Company, and “Party” means any one of them as the context requires;
“Person” includes an individual, partnership, association, body corporate, trustee, executor, administrator, legal representative, government
(including any Governmental Entity) or any other entity, whether or not having legal status;
“Plan of Arrangement” means this plan of arrangement and any amendments or variations hereto made in accordance with the Arrangement Agreement
and this plan of arrangement or upon the direction of the Court in the Final Order with the prior written consent of Company and Parent, each acting reasonably, and references to “Article” or “Section” mean the specified Article or
Section of this Plan of Arrangement;
“Purchaser” means 1561611 B.C. Ltd., a company existing under the laws of the Province of British Columbia,
Canada;
“Subsidiary” has the meaning ascribed thereto in section 1.1 of NI 45-106;
“Tax Act” means the Income Tax Act (Canada);
“TSX” means the Toronto Stock Exchange;
“U.S. Securities Act” means the United States Securities Act of 1933;
“U.S. Tax Code” means the United States Internal Revenue Code of 1986; and
| 1.2 |
Interpretation Not Affected by Headings
|
The division of this Plan of Arrangement into Articles and Sections and the insertion of headings are for convenience of reference only and shall not affect in any way the meaning or
interpretation of this Plan of Arrangement. Unless the contrary intention appears, references in this Plan of Arrangement to an Article, Section or Step by number or letter or both refer to the Article, Section or Step, respectively,
bearing that designation in this Plan of Arrangement.
| 1.3 |
Number and Gender
|
In this Plan of Arrangement, unless the contrary intention appears, words importing the singular include the plural and vice versa, and words importing gender include all genders.
E-5
| 1.4 |
Calculation of Time
|
Unless otherwise specified, time periods within or following which any payment is to be made or act is to be done shall be calculated by excluding the day on which the period commences
and including the day on which the period ends. Where the last day of any such time period is not a business day, such time period shall be extended to the next business day following the day on which it would otherwise end.
| 1.5 |
Date for Any Action
|
If the date on which any action is required to be taken hereunder by a Party is not a business day, such action shall be required to be taken on the next succeeding day which is a
business day.
| 1.6 |
Currency
|
Unless otherwise stated, all references in this Plan of Arrangement to sums of money are expressed in lawful money of the United States and “$” refers to U.S. dollars.
| 1.7 |
No Strict Construction
|
The language used in this Plan of Arrangement is the language chosen by the Parties to express their mutual intent, and no rule of strict construction shall be applied against any
Party.
| 1.8 |
Statutory References
|
A reference to a statute, rule, regulation or other statutory instrument or subordinate legislation (including any particular provision thereof) shall be construed to refer to such
statute, rule, regulation or other instrument or legislation (or provision thereof) and to all rules, regulations, instruments or legislation made thereunder, if any, in each case as the same may from time to time be amended, modified,
supplemented, re-enacted or replaced, in whole or in part.
| 1.9 |
Governing Law
|
This Plan of Arrangement shall be governed, including as to validity, interpretation and effect, by the laws of the Province of British Columbia and the laws of Canada applicable
therein.
| 1.10 |
Time
|
Time is of the essence in the performance of the Parties’ respective obligations hereunder.
| 1.11 |
Time References
|
In this Plan of Arrangement, unless otherwise specified, any references to time are to local time, Vancouver, British Columbia.
E-6
| 1.12 |
Other Definitions
|
Capitalized terms that are used herein but not defined shall have the meanings ascribed thereto in the Arrangement Agreement.
ARTICLE 2
| 2.1 |
Arrangement Agreement
|
This Plan of Arrangement is made pursuant to, and is subject to the provisions of, the Arrangement Agreement, except in respect of the sequence of the steps comprising the Arrangement,
which shall occur in the order set out in this Plan of Arrangement.
| 2.2 |
Effectiveness
|
This Plan of Arrangement will become effective at the Effective Time (except as otherwise provided herein) and will be binding from and after the Effective Time on Parent, Purchaser,
Company, the Depositary, the Company Shareholders, including the Dissenting Shareholders, and the holders of Company Incentive Awards, in each case, without any further authorization, act or
formality on the part of any Person, except as expressly provided herein.
| 2.3 |
The Arrangement
|
The following steps shall occur and shall be deemed to occur, commencing at the Effective Time, sequentially in the following order, with each such step after the first
occurring five minutes after the preceding step (except where otherwise indicated), and without any further authorization, act or formality on the part of any Person:
E-7
E-8
| (d) |
Company Options. Notwithstanding any vesting or exercise or other provisions to which a Company Option might otherwise be subject (whether by contract, the
conditions of grant, applicable Law or the terms of the applicable Company Option Plan governing such Company Option), each Company Option shall, without any further action by or on behalf of a holder, be deemed to be fully
vested and shall be transferred and assigned by the holder thereof, free and clear of any Liens, to the Company, and the holder thereof shall be entitled to receive in exchange therefor an amount equal to the Cash Out Value for
such Company Option (less any applicable withholding in accordance with Section 3.7) determined as at the Value Determination Date, whereupon the name of the holder of such Company Option shall be removed from the register of
Company Options maintained by the Company, and the Company Option Plan and each Company Option shall immediately be cancelled and all agreements relating to the Company Options shall be terminated and shall be of no further
force and effect. The Company will pay to the holders of Company Options, through the payroll systems of the Company, all amounts required to be paid to the holders of Company Options in accordance with this Plan of Arrangement,
less any Tax withholding required under applicable Law or in accordance with Section 3.7, in respect of such Company Options.
|
Dissenting Shareholders
| (e) |
| (i) |
such Dissenting Shareholder shall cease to be, and shall be deemed to cease to be, the registered holder of each such Dissent Share and the name of such registered holder shall be, and shall be deemed to be, removed from the
central securities register of Company in respect of each such Dissent Share, and at such time each Dissenting Shareholder will have only the rights set out in Section 4.1;
|
| (ii) |
such Dissenting Shareholder shall be deemed to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required to transfer and assign each such Dissent Share; and
|
| (iii) |
Company shall be the holder of all of the outstanding Dissent Shares, free and clear of all Liens, and the central securities register of Company shall be revised accordingly.
|
Transfer of Company Shares to Purchaser
| (f) |
| (i) |
the registered holder thereof shall cease to be, and shall be deemed to cease to be, the registered holder of each such Company Share and the name of such registered holder shall be removed from the central securities register
of Company;
|
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| (ii) |
the registered holder thereof shall be deemed to have executed and delivered all consents, releases, assignments and waivers, statutory or otherwise, required to transfer and assign each such Company Share; and
|
| (iii) |
Purchaser shall be the holder of all of the outstanding Company Shares, free and clear of all Liens, and the central securities register of Company shall be revised accordingly.
|
ARTICLE 3
| 3.1 |
Deposit and Payment of Consideration
|
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| (d) |
After the Effective Time and until surrendered for cancellation as contemplated by Section 3.1(b), each certificate or DRS Advice that immediately prior to the Effective Time
represented one or more Company Shares, other than the Dissent Shares, shall be deemed at all times to represent only the right to receive in exchange therefor the Consideration that the
holder of such certificate or DRS Advice is entitled to receive in accordance with Section 2.3, less any amounts withheld pursuant to Section 3.7 (if any).
|
| 3.2 |
Distributions with Respect to Unsurrendered Certificates
|
No dividends or other distributions declared or made after the Effective Time with respect to Consideration Shares with a record date
after the Effective Time shall be paid to the holder of any unsurrendered certificate or DRS Advice which immediately prior to the Effective Time represented outstanding Company Shares that were exchanged for Consideration Shares
pursuant to Section 2.3(f) unless and until the holder of such certificate or DRS Advice shall surrender such certificate or DRS Advice in accordance with Section
3.1. Subject to applicable law and Section 3.7 hereof, at the time of such surrender of any such certificate or DRS advice (or, in the case of clause (ii) below, at the appropriate payment date), there shall be paid to the holder of
the certificates or DRS Advices representing Company Shares that were exchanged for Consideration Shares pursuant to Section 2.3(f), without
interest, (i) the amount of dividends or other distributions with a record date after the Effective Time theretofore paid with respect to the Consideration Shares to which such holder is entitled pursuant hereto, and (ii) to the
extent not paid under clause (i), on the appropriate payment date, the amount of dividends or other distributions with a record date after the Effective Time but prior to surrender and the payment date subsequent to surrender payable
with respect to such Consideration Shares.
| 3.3 |
Deemed Fully Paid and Non-Assessable Shares
|
All Consideration Shares issued pursuant to this Plan of Arrangement shall be deemed to be validly issued and outstanding as fully paid and non-assessable shares.
| 3.4 |
No Fractional Shares
|
No fractional Consideration Shares shall be issued upon the exchange of Company Shares pursuant to Sections 2.3(f) and 3.1. Where the
aggregate number of Parent Shares to be issued to a Company Shareholder pursuant to Sections 2.3(f) and 3.1 as consideration under the Arrangement would result
in a fractional Consideration Share being issuable, such fractional Consideration Share shall be rounded up to the nearest whole Parent Share in the event that a Company Shareholder is entitled to a fractional share
representing 0.5 or more of a Parent Share and shall be rounded down to the nearest whole Parent Share in the event that a Company Shareholder is entitled to a fractional share representing less than 0.5 of a Parent Share.
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| 3.5 |
Lost Certificates
|
In the event that any certificate which, immediately prior to the Effective Time, represented one or more outstanding Company Shares,
which were exchanged in accordance with Section 2.3(f) shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the holder claiming such certificate to be lost, stolen or destroyed, the Depositary shall deliver in exchange for such lost, stolen or destroyed certificate, the aggregate Consideration which such holder is
entitled to receive in accordance with this Plan of Arrangement. When authorizing such delivery of the aggregate Consideration which such holder is entitled to receive in exchange for such
lost, stolen or destroyed certificate, the holder to whom the Consideration is to be delivered shall, as a condition precedent to the delivery of
such Consideration, give a bond satisfactory to Parent and the Depositary in such amount as Parent and the Depositary may direct (each acting
reasonably), or otherwise indemnify Parent and the Depositary and/or any of their respective representatives or agents in a manner satisfactory to Parent and the Depositary (each acting reasonably), against any claim that may be made
against Parent, the Company or the Depositary and/or any of their respective representatives or agents with respect to the certificate alleged to have been lost, stolen or destroyed.
| 3.6 |
Extinction of Rights
|
Any certificate or DRS Advice which immediately prior to the Effective Time represented outstanding Company Shares that were exchanged
pursuant to Section 2.3(f) that is not deposited with all other instruments required by Section 3.1 on or prior to the sixth anniversary of the Effective Date
shall cease to represent a claim or interest of any kind or nature as a securityholder of Company or Purchaser, as applicable. On such date, the Consideration Shares, as applicable, to which the former registered holder of the
certificate or DRS Advice referred to in the preceding sentence was ultimately entitled shall be deemed to have been surrendered for no consideration
to Purchaser (or its successor(s)). None of Parent, Purchaser, Company or the Depositary shall be liable to any Person in respect of any Consideration Shares (or dividends, distributions and interest in respect thereof) delivered to a
public official pursuant to any applicable abandoned property, escheat or similar law.
| 3.7 |
Withholding Rights; Tax Consequences
|
The Parent, the Company, the Depositary, their respective Subsidiaries and any other Person on their behalf, shall be entitled to deduct and withhold from
any amounts payable to any Person pursuant to the Arrangement and under this Plan of Arrangement, including amounts distributed to any former Company Shareholder or former holders of Company Incentive Awards, such amounts as the Parent,
the Company, the Depositary and their respective Subsidiaries, or any Person on behalf of any of the foregoing, is or may be required or permitted to deduct or withhold with respect to such payment under the Tax Act, the U.S. Tax Code, or
any provision of local, state, federal, provincial or foreign Law, in each case, as amended, or under the administrative practice of the relevant Governmental Entity administering such Law, and to request from any recipient of any payment
hereunder any necessary tax forms or any other proof of exemption from withholding or any similar information. To the extent that amounts are so deducted or withheld, such deducted or withheld amounts shall be treated for all purposes
hereof as having been paid to the Person to whom such amounts would otherwise have been paid. Any Person that deducts or withholds any amount pursuant to this Section 3.7 shall remit such deducted or withheld amounts to the applicable
Governmental Entity. In any case where the amount so required or permitted to be deducted or withheld from any payment to a holder exceeds the cash portion of the consideration otherwise payable, the Parent, the Company, the Depositary,
their respective Subsidiaries, and any Person on behalf of the foregoing, as the case may be, is authorized to sell or otherwise dispose of such portion of the Consideration as is necessary in order to fully fund such liability, and such
Person shall remit any unapplied balance of the net proceeds of such sale to the holder.
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| 3.8 |
Transfer Free and Clear
|
For greater certainty, any transfer or exchange of securities pursuant to this Plan of Arrangement shall be free and clear of any Liens or other claims of third parties of any kind.
| 3.9 |
Interest
|
Under no circumstances shall interest accrue or be paid by the Company, Parent, Purchaser, the Depositary or any other Person to any Company Shareholder or other Persons depositing certificates or DRS
Advices pursuant to this Plan of Arrangement in respect of the Company Shares immediately existing prior to the Effective Time.
ARTICLE 4
| 4.1 |
Dissent Rights
|
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| (b) |
In no circumstances shall Parent, Purchaser, the Company or any other Person be required to recognize a Person exercising Dissent Rights unless such Person is the registered holder of those Company
Shares in respect of which such rights are sought to be exercised as of the record date of the Company Meeting.
|
| (c) |
In no case shall Parent, Purchaser, Company or any other Person be required to recognize Dissenting Shareholders as holders of Company Shares after
the time that is immediately prior to the Effective Time, and the names of the Dissenting Shareholders shall be deleted from the central securities register as holders of the Company at the time at which the step in Section 2.3(f) occurs.
|
| (d) |
For greater certainty, in addition to any other restrictions set forth in the Interim Order and under Section 238 of the BCBCA, none of the following shall be entitled to exercise Dissent Rights:
(i) a holder of any Company Incentive Awards in respect of such holder’s Company Incentive Awards; (ii) Company Shareholders who vote or have instructed a proxyholder to vote such Company Shares in favour of the Arrangement
Resolution; and (iii) any other Person who is not a registered Company Shareholder as of the record date for the Company Meeting.
|
ARTICLE 5
GENERAL
| 5.1 |
Paramountcy
|
From and after the Effective Time (a) this Plan of Arrangement shall take precedence and priority over any and all rights related to the
Company Shares and the Company Incentive Awards issued prior to the Effective Time, (b) the rights and obligations of the holders of Company Shares, the holders of
Company Incentive Awards, the Parties, the Depositary and any trustee or transfer agent therefor in relation thereto, and any other Person having any right, title or interest in or to Company
Shares and Company Incentive Awards, shall be solely as provided for in this Plan of Arrangement, and (c) all actions, causes of action, claims or proceedings (actual or contingent and whether
or not previously asserted) based on or in any way relating to any securities of the Company subject to this Plan of Arrangement shall be deemed to have been settled, compromised, released and determined without liability except as
set forth herein.
| 5.2 |
Amendment
|
| (a) |
Parent and the Company reserve the right to amend, modify or supplement this Plan of Arrangement at any time and from time to time prior to the Effective Time, provided that each such amendment,
modification or supplement must be (i) agreed to in writing by the Company and Parent, (ii) filed with the Court and, if made following the Company Meeting, approved by the Court, and (iii) communicated to Company Shareholders
and the holders of Company Incentive Awards if and as required by the Court.
|
E-14
| (b) |
Subject to the provisions of the Interim Order, any amendment, modification or supplement to this Plan of Arrangement may be proposed by Parent and the Company at any time prior to the Company
Meeting (provided, however, that the Company and Parent shall have consented thereto in writing), with or without any other prior notice or communication, and, if so proposed and accepted by the Persons voting at the Company
Meeting (other than as may be required under the Interim Order), shall become part of this Plan of Arrangement for all purposes.
|
| (c) |
Any amendment, modification or supplement to this Plan of Arrangement that is approved or directed by the Court following the Company Meeting shall be effective only if: (i) it is consented to in
writing by each of Parent and the Company (each acting reasonably); and (ii) if required by the Court, it is consented to by the Company Shareholders voting in the manner directed by the Court.
|
| (e) |
This Plan of Arrangement may be withdrawn prior to the Effective Time in accordance with the terms of the
Arrangement Agreement.
|
| 5.3 |
Further Assurances
|
Notwithstanding that the transactions and events set out in this Plan of Arrangement shall occur and be deemed to have occurred in the order set out herein, without any further act or
formality, each of the Parties shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by any of them in
order to implement this Plan of Arrangement and to further document or evidence any of the transactions or events set out herein.
ARTICLE 6
U.S. SECURITIES LAW EXEMPTION
| 6.1 |
U.S. Securities Law Exemption
|
Notwithstanding any provision herein to the contrary, the Company and Parent each agree that this Plan of Arrangement will be carried out with the intention that, and they will use their commercially reasonable best efforts to ensure
that all Consideration Shares issued under the Arrangement by Parent pursuant to this Plan of Arrangement, whether in the United States, Canada or any other country, be issued or granted, as the case may be, in reliance on the exemption
from the registration requirements of the U.S. Securities Act, as provided by Section 3(a)(10) thereof and pursuant to exemptions from registration under any applicable state securities Laws, and
pursuant to the terms, conditions and procedures set forth in the Arrangement Agreement.
E-15
SCHEDULE B
ARRANGEMENT RESOLUTION
BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT:
| (a) |
The arrangement (the “Arrangement”) under Section 288 of the Business Corporations Act (British Columbia) (the
“BCBCA”), involving Coeur Mining, Inc. (the “Parent”), New Gold Inc. (the “Company”), 1561611 B.C. Ltd. (the “Purchaser”), and Company Shareholders (as defined in the Arrangement Agreement), all as more particularly described and set forth in the notice of meeting and management information circular (the “Circular”) of the Company dated [●], 2025 accompanying the notice of the meeting (as the Arrangement may be modified, supplemented or amended in accordance with its terms), is hereby authorized,
approved and adopted;
|
| (b) |
The plan of arrangement, as it may be or has been amended (the “Plan of Arrangement”), involving the Parent, the Purchaser, the Company and the Company
Shareholders and implementing the Arrangement, the full text of which is set out in Appendix [●] to the Circular (as the Plan of Arrangement may be, or may have been, modified, supplemented or amended in accordance with its terms), is
hereby authorized, approved and adopted;
|
| (c) |
The arrangement agreement among the Parent, the Company and the Purchaser dated as of November 2, 2025, as the same may be amended, supplemented or otherwise modified from time to time in
accordance with its terms (the “Arrangement Agreement”) and all the transactions contemplated therein, the actions of the directors of the Company in approving the Arrangement and the actions of
the directors and officers of the Company in executing and delivering the Arrangement Agreement and any modifications, supplements or amendments thereto in accordance with its terms are hereby confirmed, ratified and approved in all
respects;
|
| (d) |
The Company is hereby authorized to apply for a final order from the Supreme Court of British Columbia (the “Court”) to approve the Arrangement in
accordance with and subject to the terms set forth in the Arrangement Agreement and the Plan of Arrangement (as they may be, or may have been, modified, supplemented or amended from time to time in accordance with their terms);
|
| (e) |
Notwithstanding that this resolution has been passed (and the Plan of Arrangement adopted) by the Company Shareholders or that the Arrangement has been approved by the Court, the directors of
the Company are hereby authorized and empowered, at their discretion, without further notice to, or approval of, the of the Company Shareholders:
|
| (i) |
to modify, supplement or amend the Arrangement Agreement or the Plan of Arrangement to the extent permitted by the Arrangement Agreement or the Plan of Arrangement; or
|
- 2 -
| (ii) |
subject to the terms of the Arrangement Agreement, not to proceed with the Arrangement;
|
| (f) |
Any one or more directors or officers of the Company is hereby authorized, for and on behalf and in the name of the Company, to execute and deliver, whether under corporate seal of the Company
or not, all such agreements, forms waivers, notices, certificate, confirmations and other documents and instruments and to do or cause to be done all such other acts and things as in the opinion of such director or officer may be
necessary, desirable or useful for the purpose of giving effect to these resolutions, the Arrangement Agreement and the completion of the Plan of Arrangement in accordance with the terms of the Arrangement Agreement, including:
|
| (i) |
all actions required to be taken by or on behalf of the Company, and all necessary filings and obtaining the necessary approvals, consents and acceptances of appropriate regulatory authorities;
and
|
| (ii) |
the signing of the certificates, consents and other documents or declarations required under the Arrangement Agreement or otherwise to be entered into by the Company;
|
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.
SCHEDULE C
FORM OF PARENT CHARTER AMENDMENT
CERTIFICATE OF AMENDMENT TO
THE CERTIFICATE OF INCORPORATION
OF
COEUR MINING, INC.
The undersigned, desiring to amend the certificate of incorporation of a Delaware corporation pursuant to Section 242 of the Delaware General Corporation Law (the
“Act”), hereby certifies as follows:
FIRST. The name of the corporation
(hereinafter called the “Corporation”) is Coeur Mining, Inc.
SECOND. This Certificate of
Amendment (the “Certificate of Amendment”) amends provisions of the Corporation’s Certificate of Incorporation that was filed with the Secretary of State of the State of
Delaware on May 15, 2013 and was amended by the Amendment to the Certificate of Incorporation on May 12, 2015, the Amendment to the Certificate of Incorporation on May 10, 2022 and the Amendment to the Certificate of Incorporation on February
13, 2025 (the “Certificate of Incorporation”).
THIRD. Section 4.1 of Article IV of
the Certificate of Incorporation, which Section sets forth the Authorized Stock of the Corporation, is hereby amended and restated in its entirety as follows:
“Section 4.1 Authorized Stock. The aggregate number of shares which the Corporation shall have authority to issue is 1,310,000,000 shares, of which
1,300,000,000 shares shall be designated as Common Stock, par value $0.01 per share (the “Common Stock”), and 10,000,000 shares shall be designated as Preferred Stock, par value $1.00 per share (the “Preferred Stock”).”
FOURTH. The amendment herein
certified has been duly adopted in accordance with Section 242 of the Act.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its
duly authorized officer as of [●].
|
|
COEUR MINING, INC. |
|
|
|
|
|
Date: [●]
|
|
|
By: |
|
|
Name:
|
|
|
Title:
|
Exhibit 99.1
November 2, 2025
|
TO:
|
COEUR MINING, INC. (THE “PARENT”)
|
Dear Sirs/Madams:
|
Re:
|
Support and Voting Agreement
|
BACKGROUND
The undersigned understands that NEW GOLD INC. (the “Company”), 1561611 B.C. LTD. (the
“Purchaser”) and the Parent wish to enter into an arrangement agreement on the date hereof (the “Arrangement Agreement”) contemplating the acquisition by the Purchaser
of all of the issued and outstanding common shares in the capital of the Company pursuant to a plan of arrangement under the provisions of the Business Corporations Act (British Columbia).
Capitalized terms used in this letter agreement and not otherwise defined herein shall have the respective meanings given to them in the Arrangement Agreement.
The undersigned is the beneficial owner of, or exercises control or direction over, [●] Company Shares, [●] Company RSUs, [●] Company PSUs, [●] Company DSUs
and [●] Company Options. The Company Shares, the Company RSUs, the Company PSUs, the Company DSUs and the Company Options, together with any other securities of the Company directly or indirectly acquired by or issued to the undersigned during the
term of this letter agreement, are collectively referred to herein as the “Subject Securities”.
This letter agreement sets out the terms and conditions of the agreement of the undersigned, among other things, to (a) vote or cause to be voted in favour of the Arrangement and any other matter
that would reasonably be expected to facilitate the Arrangement any Subject Securities held by the undersigned which are entitled to be voted , and (b) abide by the restrictions and covenants set forth herein.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
From the date hereof until the earliest of (a) the Effective Time, (b) the date the Arrangement Agreement is terminated in accordance with its terms, and (c) the completion of the Company Meeting
(the earliest such date, the “Termination Date”), the undersigned agrees, in his or her capacity as securityholder and not in his or her capacity as an officer or director of the Company:
| 1. |
at any meeting of shareholders of the Company to be held to consider the Arrangement (including the Company Meeting) or any of the other transactions contemplated by the Arrangement Agreement, or any adjournment or postponement thereof
or in any other circumstances upon which a vote, consent or other approval (including by written consent in lieu of a meeting) with respect to the Arrangement or any of the transactions contemplated by the Arrangement Agreement is sought,
to attend (in person or by proxy) and be counted as present for purposes of establishing quorum and to vote or to cause to be voted (and not withdraw any proxies or change his or her vote in respect thereof) the Subject Securities entitled
to be voted and that are legally or beneficially owned by the undersigned as of the record date for any such meeting (a) in favour of the approval, consent, ratification and adoption of the Arrangement Resolution and any other matter
necessary for the consummation of the Arrangement, and (b) against any resolution, action, proposal, transaction or agreement proposed by any other Person, that would reasonably be expected to adversely affect or reduce the likelihood of
the successful completion of the Arrangement, or delay, frustrate or interfere with the completion of the Arrangement;
|
- 2 -
| 2. |
no later than ten days prior to a meeting where the undersigned is required to vote or cause to be voted the Subject Securities entitled to be voted in accordance with paragraph 1 hereof, to deliver or to cause to be delivered to the
Company or its transfer agent in accordance with the instructions to be set out in the Company Circular in connection with such meeting, duly executed proxies or voting instruction forms, as applicable, in respect of all of the Subject
Securities required to be voted or caused to be voted at such meeting (a) instructing the holder thereof to vote (i) in favour of the Arrangement Resolution and any other matter necessary for the
consummation of the Arrangement, and (ii) against any matter that would reasonably be expected to adversely affect or reduce the likelihood of the successful completion of the Arrangement, or delay, frustrate or interfere with the
completion of the Arrangement, and (b) naming those individuals as may be designated by the Company in the Company Circular in connection with the meeting of shareholders of the Company at which the Arrangement Resolution will be voted on;
|
| 3. |
not to (a) grant or agree to grant any proxy, power of attorney or other right to vote the Subject Securities, except for proxies or voting instructions to vote, or cause to be voted, securities in accordance with this letter agreement
or with respect to any annual business to be considered at the Company Meeting, or (b) enter into any agreement or undertaking (including any voting agreement or voting trust with respect to the Subject Securities) that is otherwise
inconsistent with, or would interfere with, or prohibit or prevent the undersigned from satisfying, its obligations pursuant to this letter agreement;
|
| 4. |
not to exercise any rights to dissent or rights of appraisal provided under applicable Law or otherwise in connection with the Arrangement and not to exercise any shareholder rights or remedies available at common law or pursuant to
securities or corporate Laws to delay or prevent the Arrangement;
|
| 5. |
not to make any statements or take any action against the Arrangement or any aspect thereof and to not bring, or threaten to bring, any suits or proceeding for the purpose of, or which has the effect of, directly or indirectly,
frustrating, stopping, preventing, impeding, delaying or varying the Arrangement; and
|
| 6. |
except as contemplated by the Arrangement Agreement or upon the settlement of awards or other securities of the Company or the exercise of other rights to purchase Company Shares, including any purchases of Company Shares under any of
the Company Incentive Awards, not to, directly or indirectly (a) sell, transfer, gift, assign, grant a participation interest in, option, pledge, hypothecate, grant a security or voting interest in or otherwise convey or encumber (each, a “Transfer”), or enter into any agreement, option or other arrangement (including any profit sharing arrangement, forward sale or other monetization arrangement) with respect to the Transfer of any of its
Subject Securities to any Person without Parent’s prior written consent, other than pursuant to the Arrangement Agreement; or (b) agree to take any actions described in the foregoing clause (a).
|
- 3 -
Notwithstanding any provision of this letter agreement to the contrary, the Parent acknowledges and agrees that the undersigned is executing this letter agreement and is bound hereunder solely in the
undersigned’s capacity as a securityholder of the Company. Without limiting the provisions of the Arrangement Agreement: (a) nothing contained in this letter agreement shall in any way limit or restrict any actions the undersigned may take in the
undersigned’s capacity as director or officer of the Company (including exercising rights of the Company or the Company Board under the Arrangement Agreement), or limit in any way whatsoever the exercise of
the undersigned’s fiduciary duties as director or officer of the Company; and (b) the undersigned will be entitled to (i) Transfer any Subject Securities (1) to any member of such stockholder’s immediate family, or to a trust for the benefit of the
undersigned or any member of undersigned’s immediate family, in each case for the purposes of estate planning, (2) upon the death of the undersigned, to any member of undersigned’s immediate family, or to a trust for the benefit of any member of
the undersigned’s immediate family, (3) to any entity or Person controlled by the undersigned, or (4) pursuant to an automatic share disposition plan that exists as of the date of this letter agreement, (ii) exercise his or her rights under the
Company Incentive Awards beneficially owned by him or her and (iii) sell or otherwise dispose of Subject Securities to the extent the proceeds of such sale or disposition are paid towards (or otherwise set-off from) the exercise price and/or tax
liability incurred as a result of the exercise and/or settlement of a Company Incentive Award.
The undersigned hereby represents and warrants that (a) it is the sole registered and/or beneficial owner of, or exercises control or direction over, the Subject Securities, and the undersigned has
the sole right to vote (in the case of the Subject Securities entitled to be voted) all of the Subject Securities, (b) except for the Arrangement Agreement and this letter agreement, no person has any agreement or option, or any right or privilege
(whether by law, pre-emptive or contractual) capable of becoming an agreement or option for the purchase, acquisition or transfer from the undersigned or the applicable holder any of the Subject Securities or any interest therein or right thereto,
and (c) the only securities of the Company beneficially owned or controlled, directly or indirectly, by the undersigned, or over which the undersigned exercises control or direction, on the date hereof are the Subject Securities.
The undersigned acknowledges that the Purchaser and the Parent are relying on the representations and warranties of the undersigned set forth in this letter agreement in connection with the Parent’s
execution and delivery of the Arrangement Agreement.
The undersigned agrees that the details of this letter agreement may be described in any press release, proxy statement or information circular or other communication prepared by the Company or the
Parent in connection with the Arrangement and in any material change report prepared by the Company or the Parent in connection with the execution and delivery of this letter agreement, and the undersigned further agrees to this letter agreement
being made publicly available, including by filing on EDGAR and SEDAR+ and by any filings required under Securities Laws (including disclosure of my identity and the nature of my commitments, arrangements and understandings under this letter
agreement and any other information required by Law), in accordance with Securities Laws.
- 4 -
This letter agreement shall automatically terminate and be of no further force or effect upon the Termination Date.
This letter agreement shall be governed, including as to validity, interpretation and effect, by the Laws of the Province of British Columbia and the Laws of Canada applicable therein and each of
the parties hereto hereby irrevocably attorn to the non-exclusive jurisdiction of the courts of the Province of British Columbia in respect of all matters arising under and in relation to this letter agreement.
This letter agreement shall be binding upon the undersigned and the Parent and upon their respective heirs, legal representatives, successors and permitted assigns (as applicable), provided that
neither the undersigned nor the Parent may assign, delegate or otherwise transfer any of its respective rights, interests or obligations under this letter agreement without the prior written consent of the other.
The undersigned acknowledges and agrees that the Parent would be damaged irreparably in the event any of the provisions of this letter agreement are not performed in accordance with their specific
terms or otherwise are breached or violated. Accordingly, the undersigned agrees that, without posting bond or other undertaking, the Parent will be entitled to seek an injunction or injunctions to prevent breaches or violations of the provisions
of this letter agreement and to seek to enforce by specific performance this letter agreement and the terms and provisions hereof.
The undersigned hereby represents and warrants that (a) this letter agreement has been duly executed and delivered and is a valid and binding agreement, enforceable against the undersigned in
accordance with its terms, and the performance by the undersigned of its obligations hereunder will not constitute a violation or breach of, or default under, or conflict with, any contract, commitment, agreement, understanding or arrangement of
any kind to which the undersigned will be a party and by which the undersigned will be bound at the time of such performance, (b) he or she has read this letter agreement in its entirety, understands it and agrees to be bound by its terms and
conditions; (c) he or she has been advised to seek independent legal advice with respect to the execution and delivery of this letter agreement and has received such advice or has , without undue influence, elected to waive the benefit of any such
advice; and (d) he or she is entering into this letter agreement voluntarily.
This letter agreement may be executed in any number of counterparts (including counterparts by facsimile or electronic mail) and all such counterparts taken together shall be deemed to constitute one
and the same instrument. The parties shall be entitled to rely upon delivery of an executed facsimile or similar executed electronic copy of this letter agreement, and such facsimile or similar executed electronic copy shall be legally effective to
create a valid and binding agreement between the parties.
If the foregoing is in accordance with the Parent’s understanding and is agreed by the Parent, please signify the Parent’s acceptance by executing the enclosed copies of this letter agreement where
indicated below by an authorized signatory of the Parent and return the same to the undersigned, upon which the letter agreement as so accepted shall constitute an agreement among the Parent and the undersigned.
[The remainder of this page is intentionally left blank; signature page follows.]
Yours truly,
| by: | ||
| (Signature) |
| (Print Name) |
| (Place of Residency) |
| (Title) |
Address:
Accepted and agreed on November 2, 2025.
|
COEUR MINING, INC.
|
||
|
Per:
|
||
|
Name:
|
||
|
Title:
|
||
Exhibit 99.2
 |
 |
Coeur Announces Acquisition of New Gold to Create a New, All North American
Senior Precious Metals Producer
The addition of New Gold’s two Canadian mines results in a combined company with seven North American operations generating $3 billion of expected EBITDA and $2 billion of
expected free cash flow in 2026 from production of approximately 20 million ounces of silver, 900,000 ounces of gold and 100 million pounds of copper
Chicago, Illinois – November 3, 2025 – Coeur Mining, Inc. (“Coeur”) (NYSE: CDE) and New Gold Inc. (“New Gold”)
(TSX: NGD; NYSE American: NGD) today announced that they have entered into a definitive agreement (the “Arrangement Agreement”) whereby a wholly-owned subsidiary of Coeur will acquire all of the issued and outstanding shares of New Gold, pursuant
to a court-approved plan of arrangement (the “Transaction”).
Under the terms of the Arrangement Agreement, New Gold shareholders will receive 0.4959 shares of Coeur common stock for each New Gold common share (the “Exchange Ratio”). The Exchange Ratio implies
consideration of $8.51 per New Gold common share, based on the closing price of Coeur shares of common stock on the New York Stock Exchange (“NYSE”) on October 31, 2025. This represents a 16% premium to the October 31, 2025 closing price of New
Gold on the NYSE American. In the aggregate, this implies a total equity value of approximately $7 billion based on New Gold’s common shares outstanding and a pro forma combined equity market capitalization of approximately $20 billion. Upon
completion of the Transaction, existing Coeur stockholders and New Gold shareholders will own approximately 62% and 38% of the outstanding common stock of the combined company, respectively.
Transaction Highlights and Strategic Rationale
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Creates a Leading, All North American-Based Precious Metals Producer – The combined company creates a new, 100% North
American senior mining company with an approximately $20 billion market capitalization; seven high-quality operations producing approximately 1.25 million gold equivalent ounces in 2026, including 20 million ounces of silver and 900,000
ounces of gold; over 80% of its revenue generated from the U.S. and Canada, and sector-leading free cash flow.
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Significant and Immediate Addition to Coeur’s EBITDA and Free Cash Flow – The combined company is expected to generate
approximately $3.0 billion of EBITDA and approximately $2.0 billion of free cash flow in 2026 at significantly lower overall costs and higher margins, representing a material increase to Coeur’s expected 2025 full-year EBITDA and free
cash flow of approximately $1 billion and $550 million, respectively.
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Best in Class Financial Position – This strong free cash flow profile is expected to lead to a net cash position at closing
and a rapidly growing cash balance, creating a clear path to a potential investment-grade credit rating and to higher levels of stockholder returns.
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Robust, Fully-Funded Growth Pipeline – This strong financial position is expected to accelerate investment in multiple
high-return organic growth opportunities including New Afton’s K-Zone, brownfield exploration at Rainy River and across all of Coeur’s portfolio in the U.S., Mexico, and Canada.
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Highly Accretive Transaction – The transaction is accretive on all of Coeur’s key per share metrics, including net asset
value, operating cash flow, and free cash flow, positioning the combined company for a potential share price re-rating.
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Enhanced Sector and Capital Market Profile – The combined company will be among the top 10 largest precious metals companies
and top 5 largest silver producers globally, with silver representing 30% of total metals reserves. This enhanced scale is expected to provide investors with significantly enhanced daily trading liquidity of over $380 million with the
potential for inclusion in key major U.S. indexes.
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Bolstered Combined Management Team Along with Key Board Additions – Upon closing, several members of the New Gold management
team are expected to join Coeur to create a stronger and more resilient organization. Additionally, current New Gold President, Chief Executive Officer and Director, Patrick Godin, and one other current New Gold Director will join Coeur’s
board of directors upon closing of the Transaction.
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“This transaction provides clear and compelling benefits for New Gold and Coeur shareholders by bringing together two companies with similar cultures to create a stronger, more resilient, and larger
scale precious metals mining company,” said Mitchell J. Krebs, Coeur’s Chairman, President and Chief Executive Officer. “Both companies are in the early stages of generating significant cash flow after several years of heavy investment. We believe
this is an extraordinary opportunity to create an unrivaled North American-only, mining powerhouse at just the right time.
“With the addition of New Gold’s two Canadian operations to our five current operating mines we expect to generate approximately $3 billion of EBITDA and approximately $2 billion of free cash flow in
2026 at significantly lower overall costs and higher margins. Just two years ago, Coeur’s full-year EBITDA totaled $142 million and its free cash flow was ($297) million. Even comparing to our expected approximate $1 billion of EBITDA and $550
million of free cash flow in 2025 highlights the extent to which this transaction helps accelerate Coeur’s ongoing repositioning as a larger, more resilient, lower cost, and lower risk company.
“We also look forward to creating a deep and talented combined team that can deliver the benefits of this combination to our stockholders with the addition of several members of the New Gold
management team and by having Pat join our Board of Directors along with one other existing New Gold director.”
Patrick Godin, President, Chief Executive Officer and Director of New Gold said “Today is a monumental day for New Gold and the culmination of diligent focus by the team on operational and
development work that has transformed New Gold into the financially strong and significant free cash flow generating company it is today. A combination with Coeur unlocks the next level of potential for our shareholders, uniting with a company of
similar financial strength and cash flow generation while also gaining exposure to a larger scale, diversified portfolio with new long-life assets and immense exploration potential. Together, we will be a cash flow powerhouse, leaping above larger
peers, with significant exploration upside and the potential to significantly extend mine life and grow net asset value per share.
“The combination will provide New Gold shareholders with value from combined operational synergies including rapidly unlocking the potential of K-Zone at New Afton and the exploration potential of
Rainy River while also diversifying our asset base by adding five high quality precious metals operations with significant upside. I strongly believe in the potential of the pro forma company, which is why I am keen to join the Board, as we embark
on the next stage in the evolution of both companies as a new, all North American senior precious metals company, one that is unique in our industry.”
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Benefits to Coeur Stockholders
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Ownership in a liquid, new senior precious metals producer with a well-balanced platform of seven North American operations and sector-leading free cash flow yield
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Enhances asset portfolio quality by adding two large, lower cost, higher margin Canadian operations which is expected to meaningfully reduce overall costs
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Provides exposure to a compelling and unique metals mix consisting of gold, silver and copper
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Accretive to Coeur’s per share net asset value, and significantly accretive to operating cash flow and free cash flow metrics
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Further strengthens Coeur’s balance sheet by adding significant free cash flow to build a robust cash balance and provide enhanced operational and strategic flexibility
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Offers significant upside potential from numerous high return, organic growth opportunities across the combined portfolio
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Strengthens Coeur’s ability to return meaningful capital to stockholders
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Bolsters the combined management team and Board to deliver the benefits of this Transaction to the combined stockholders
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Benefits to New Gold Shareholders
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Immediate and significant premium of approximately 16% to the October 31, 2025 closing price
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Substantial equity participation in Coeur’s well-balanced portfolio of mines in North America, while retaining meaningful exposure to future upside at New Afton and Rainy River with New Gold shareholders owning approximately 38% of the
combined company.
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Allows New Gold shareholders to gain exposure to a combined entity with greater scale and operating diversification thereby significantly reducing risk
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Uniquely positions the combined company’s robust financial strength and flexibility, along with its extensive underground mining expertise, to unlock the full potential of New Afton and Rainy River
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Offers significantly enhanced trading liquidity and capital markets exposure with a U.S. listing combined with a new Toronto Stock Exchange (“TSX”) listing being sought by Coeur in connection with this Transaction
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Potential for significant additional ETF ownership and eligibility for larger generalist investors
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A combination with a company sharing similar culture values and alignment on safety and caring for its workforce and local communities
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Significant re-rate opportunity for the combined entity, providing additional potential value for New Gold shareholders
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Benefits to Canada
Coeur and New Gold believe that the combined entity will provide multiple tangible benefits to Canada, British Columbia and Ontario – the communities where New Gold operates – and the Canadian mining
industry more generally. As part of this Transaction, the combined company plans to:
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Accelerate levels of investment in exploration and expansion at New Gold’s existing operations as well as the continued evaluation of Coeur’s Silvertip critical minerals project in northern British Columbia
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Sustain significant employment levels in Canada and increase Canadian representation on Coeur’s Board of Directors and senior management team
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Combined company would have over 1,700 employees across Canada, with approximately 450 more employed as contractors
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Maintain New Gold’s existing corporate office in Toronto, in addition to the office in Vancouver that Coeur has maintained since 2017
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Maintain offtake agreement for processing of minerals in Canada
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Maintain New Gold’s strong partnerships, relationships and contributions with Indigenous and local communities in British Columbia and Ontario
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Apply to list Coeur common stock for trading on the TSX
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Transaction Summary
The proposed Transaction will be effected pursuant to a plan of arrangement under the Business Corporations Act (British Columbia), which is required to be
approved by a British Columbia court. The Transaction will require approval by 66⅔ percent of the votes cast by the shareholders of New Gold at a special meeting of New Gold shareholders expected to be held in the first quarter of 2026. The
Transaction will also require approval of a simple majority of votes cast by the shareholders of New Gold, excluding those votes attached to New Gold common shares held by persons required to be excluded pursuant to Multilateral Instrument 61-101 –
Protection of Minority Security Holder in Special Transaction. Registered shareholders of New Gold at the record date for New Gold’s shareholders’ meeting will have customary dissent rights. The issuance of
shares by Coeur pursuant to the Transaction and an amendment to the Coeur certificate of incorporation to increase the number of authorized shares of Coeur stock is subject to approval by the Coeur stockholders at a special meeting also expected to
be held in the first quarter of 2026. The directors and senior officers of New Gold and Coeur have entered into customary voting support agreements, pursuant to which they have committed to vote their common shares held in favor of the Transaction.
Upon completion of the Transaction, existing Coeur stockholders and New Gold shareholders will own approximately 62% and 38% of the issued and outstanding shares of common stock of the combined company, respectively. Additionally, upon closing of
the Transaction, Patrick Godin and one other current New Gold director are expected to join Coeur’s board of directors.
In addition to respective Coeur and New Gold court and shareholder approvals, the Transaction is subject to applicable regulatory approvals, approval of the listing of Coeur shares of common stock to
be issued under the Transaction on the NYSE and TSX, and the satisfaction of certain other closing conditions customary for a transaction of this nature. Subject to the satisfaction of such conditions, the Transaction is expected to close in H1
2026. The Arrangement Agreement includes customary deal protections, including reciprocal fiduciary-out provisions, non-solicitation covenants, and the right to match any superior proposals. Additionally, break fees in the amount of approximately
$414 million and approximately $255 million are payable by Coeur and New Gold, respectively, and a reciprocal expense reimbursement fee is payable by one party to the other party in certain circumstances if the Transaction is not completed.
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Following completion of the Transaction, New Gold common shares are expected to be de-listed from the TSX and the NYSE American.
Full details of the Transaction will be included in Coeur’s proxy statement and New Gold information circular.
Board of Directors’ Recommendations
After consultation with its outside financial and legal advisors, the Board of Directors of Coeur has unanimously approved the Transaction. The Board of Directors of Coeur recommends that Coeur
stockholders vote in favor of the Transaction.
The Board of Directors of New Gold appointed a special committee of independent directors (the “Special Committee”) to consider and make a recommendation with
respect to the Transaction. Based on the unanimous recommendation of the New Gold Special Committee, and after consultation with its outside financial and legal advisors, the Board of Directors of New Gold has unanimously approved the Transaction.
The Board of Directors of New Gold recommends that New Gold shareholders vote in favor of the Transaction.
National Bank Capital Markets has provided a fairness opinion to the New Gold Board of Directors, and CIBC Capital Markets has provided a fairness opinion to the New Gold Special Committee, to the
effect that, as of the date thereof, and based upon and subject to the assumptions, limitations and qualifications stated in each such opinion, the consideration to be received by New Gold shareholders is fair, from a financial point of view, to
the shareholders of New Gold.
Advisors and Counsel
BMO Capital Markets is acting as financial advisor to Coeur. RBC Capital Markets is also acting as a financial advisor to Coeur. Goodmans LLP and Gibson, Dunn & Crutcher LLP are acting as Coeur’s
legal advisors.
National Bank Capital Markets is acting as financial advisor to New Gold and CIBC Capital Markets is acting as financial advisor to the Special Committee. Davies Ward Phillips & Vineberg LLP and
Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as New Gold’s legal advisors, and Blake, Cassels & Graydon LLP is acting as counsel to the Special Committee.
Conference Call
Coeur and New Gold will conduct a joint conference call to discuss the Transaction on November 3rd, 2025 at 8:00 a.m.
Eastern Time. An accompanying presentation will be made available on the company’s website at www.coeur.com.
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| Dial-In Numbers: |
(855) 560-2581 (U.S., Canada)
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(412) 542-4166 (International) |
| Conference ID: | Coeur Mining |
Hosting this call will be Mitchell J. Krebs, Chairman, President and Chief Executive Officer of Coeur, who will be joined by Patrick Godin, President, Chief Executive Officer and Director of New
Gold. A replay of the call will be available through November 10, 2025.
| Replay numbers: | (855) 669-9658 (U.S., Canada) |
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(412) 317-0088 (International) |
| Conference ID: | 869 91 14 |
About Coeur
Coeur is a U.S.-based, well-diversified, growing precious metals producer with five wholly-owned operations: the Las Chispas silver-gold mine in Sonora, Mexico, the Palmarejo gold-silver complex in
Chihuahua, Mexico, the Rochester silver-gold mine in Nevada, the Kensington gold mine in Alaska and the Wharf gold mine in South Dakota. In addition, the Company wholly-owns the Silvertip polymetallic critical minerals exploration project in
British Columbia.
About New Gold
New Gold is a Canadian-focused intermediate mining Company with a portfolio of two core producing assets in Canada, the New Afton copper-gold mine and Rainy River gold mine. New Gold’s vision is to
be the most valued intermediate gold and copper producer through profitable and responsible mining for our shareholders and stakeholders.
Notes
All figures are in U.S. dollars unless denoted otherwise.
No Offer or Solicitation
Communications in the news release do not constitute an offer to sell or the solicitation of an offer to subscribe for or buy any securities or a solicitation of any vote or approval with respect to
the proposed Transaction or otherwise, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws
of any such jurisdiction.
Important Additional Information
In connection with the Transaction, Coeur and New Gold intend to file materials with the Securities and Exchange Commission (the “SEC”) and on SEDAR+, as applicable. Coeur intends to file a
definitive proxy statement on Schedule 14A (the “Proxy Statement”) with the SEC in connection with the solicitation of proxies to obtain Coeur stockholder approval of (A) the issuance of shares of common stock of Coeur in connection with the
Transaction (the “Stock Issuance”) and (B) the amendment of the Coeur certificate of incorporation to increase the number of authorized shares of Coeur common stock (the “Charter Amendment”), and New Gold intends to file a notice of the New Gold
shareholder meeting and accompanying management information circular (the “Circular”) with the Toronto Stock Exchange and on SEDAR+ and with the SEC in connection with the solicitation of proxies to obtain New Gold shareholder approval of the
Transaction. After the Proxy Statement is cleared by the SEC, Coeur intends to mail a definitive Proxy Statement to the stockholders of Coeur. This communication is not a substitute for the Proxy Statement, the Circular or for any other document
that Coeur or New Gold may file with the SEC or on SEDAR+ and/or send to Coeur stockholders and/or New Gold shareholders in connection with the Transaction. INVESTORS AND SECURITY HOLDERS OF COEUR AND NEW GOLD ARE URGED TO CAREFULLY AND THOROUGHLY
READ THE PROXY STATEMENT AND THE CIRCULAR, RESPECTIVELY, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND OTHER RELEVANT DOCUMENTS FILED BY COEUR AND/OR NEW GOLD WITH THE SEC OR ON SEDAR+, AS APPLICABLE, WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT COEUR, NEW GOLD, THE TRANSACTION, THE RISKS RELATED THERETO AND RELATED MATTERS.
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Stockholders of Coeur and shareholders of New Gold will be able to obtain free copies of the Proxy Statement and the Circular, as each may be amended from time to time, and other relevant documents
filed by Coeur and/or New Gold with the SEC or on SEDAR+ (when they become available) through the website maintained by the SEC at www.sec.gov or on SEDAR+ at www.sedarplus.ca, as applicable. Copies of documents filed with the SEC by Coeur will be
available free of charge from Coeur website at www.coeur.com under the “Investors” tab or by contacting Coeur’s Investor Relations Department at (312) 489-5800 or [email protected]. Copies of documents filed with the SEC or on SEDAR+ by New Gold
will be available free of charge from New Gold’s website at www.newgold.com under the “Investors” tab or by contacting New Gold’s Investor Relations Department at [email protected].
Participants in the Solicitation
Coeur, New Gold and their respective directors and certain of their executive officers and other members of management and employees may be deemed, under SEC rules, to be participants in the
solicitation of proxies from Coeur stockholders and New Gold shareholders in connection with the Transaction. Information regarding the executive officers and directors of Coeur is included in its definitive proxy statement for its 2025 annual
meeting under the headings “Proposal No. 1 – Election of Directors”, “Information about our Executive Officers”, “Compensation Discussion and Analysis”, and “Director Compensation”, which was filed with the SEC on April 2, 2025 and is available at
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000215466/000114036125011870/ny20041389x1_def14a.htm. Information regarding the directors and certain executive officers of New Gold’s is included in its information circular and proxy statement for
its 2025 annual meeting under the headings “Compensation of Executive Officers and Directors” and “Compensation Discussion and Analysis”, which was filed on SEDAR+ on March 21, 2025 and is available at
https://www.sedarplus.ca/csaparty/records/document.html?id=830b181741852e3fbae8f0bbde1c5d1322916fbc490192f57cd368fe27d666af. Additional information regarding the persons who may be deemed participants and their direct and indirect interests, by
security holdings or otherwise, will be set forth in the Proxy Statement, the Circular and other materials when they are filed with the SEC or on SEDAR+ in connection with the Arrangement. Free copies of these documents may be obtained as described
in the paragraphs above.
Cautionary Note to U.S. Investors
Coeur’s public disclosures are governed by the U.S. Securities Exchange Act of 1934, as amended, including Regulation S-K 1300 thereunder, whereas New Gold discloses estimates of “measured,”
“indicated,” and “inferred” mineral resources as such terms are used in Canada’s National Instrument 43-101. Although S-K 1300 and NI 43-101 have similar goals in terms of conveying an appropriate level of confidence in the disclosures being
reported, they at times embody different approaches or definitions. Consequently, investors are cautioned that public disclosures by New Gold prepared in accordance with NI 43-101 may not be comparable to similar information made public by
companies, including Coeur, subject to S-K 1300 and the other reporting and disclosure requirements under the U.S. federal securities laws and the rules and regulations thereunder. The scientific and technical information concerning Coeur’s mineral
projects in this communication have been reviewed and approved by a “qualified person” under Item 1300 of SEC Regulation S-K, namely Coeur’s Vice President, Technical Services, Christopher Pascoe. New Gold’s “qualified person” under NI 43-101 for
this communication is Travis Murphy, Vice President, Operations who has reviewed and approved its contents.
Forward-Looking Statements and Cautionary Statements
Certain statements in this press release concerning the proposed Transaction, including any statements regarding the expected timetable, the results, effects, benefits and synergies of the
Transaction, future opportunities for the combined company, future financial performance and condition, guidance and any other statements regarding Coeur’s or New Gold’s future expectations, beliefs, plans, objectives, financial conditions,
assumptions or future events or performance that are not historical facts are “forward-looking” statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts.
The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,” “anticipate,” “likely” “plan,”
“positioned,” “strategy,” and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include, but are not limited to, statements
regarding Coeur’s or New Gold’s plans and expectations with respect to the proposed Transaction and the anticipated impact of the proposed Transaction on the combined company’s results of operations, financial position, growth opportunities and
competitive position, including maintaining current Coeur and New Gold management, strategies and plans and integration. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act,
Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws.
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These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those anticipated, including, but not limited to, the
possibility that shareholders of New Gold may not approve the Transaction or stockholders of Coeur may not approve the Stock Issuance or the Charter Amendment; the risk that any other condition to closing of the Transaction may not be satisfied;
the risk that the closing of the Transaction might be delayed or not occur at all; the anticipated timing of mailing proxy statements and information circulars regarding the Transaction; the risk that the either Coeur or New Gold may terminate the
Arrangement Agreement and either Coeur or New Gold is required to pay a termination fee to the other party; potential adverse reactions or changes to business or employee relationships of Coeur or New Gold, including those resulting from the
announcement or completion of the Transaction; the diversion of management time on transaction-related issues; the ultimate timing, outcome and results of integrating the operations of Coeur and New Gold; the effects of the business combination of
Coeur and New Gold, including the combined company’s future financial condition, results of operations, strategy and plans; the ability of the combined company to realize anticipated synergies in the timeframe expected or at all; changes in capital
markets and the ability of the combined company to finance operations in the manner expected; the risk that Coeur or New Gold may not receive the required stock exchange and regulatory approvals of the Transaction; the expected listing of shares on
the NYSE; the listing of Coeur common stock on the TSX; the risk of any litigation relating to the proposed Transaction; the risk of changes in governmental regulations or enforcement practices; the effects of commodity prices, life of mine
estimates; the timing and amount of estimated future production; the risks of mining activities; and the fact that operating costs and business disruption may be greater than expected following the public announcement or consummation of the
Transaction. Expectations regarding business outlook, including changes in revenue, pricing, capital expenditures, cash flow generation, strategies for the combined company’s operations, gold and silver market conditions, legal, economic and
regulatory conditions, and environmental matters are only forecasts regarding these matters.
Additional factors that could cause results to differ materially from those described above can be found in Coeur’s Annual Report on Form 10-K for the year ended December 31, 2024, and subsequent
Quarterly Reports on Form 10-Q, which are on file with the SEC and available from Coeur’s website at www.coeur.com under the “Investors” tab, and in other documents Coeur’s files with the SEC and in New Gold’s annual information form for the year
ended December 31, 2024, which is on file with the SEC and on SEDAR+ and available from New Gold’s website at www.newgold.com under the “Investors” tab, and in other documents New Gold files with the SEC or on SEDAR+.
All forward-looking statements speak only as of the date they are made and are based on information available at that time. Neither Coeur’s nor New Gold assumes any obligation to update
forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements were made or to reflect the occurrence of unanticipated events except as required by applicable securities laws. As
forward-looking statements involve significant risks and uncertainties, caution should be exercised against placing undue reliance on such statements.
Non-GAAP and Non-IFRS Financial Measures
This press release contains certain non-GAAP and non-IFRS financial measures, which management believes may enable investors to better evaluate the Coeur and New Gold performance, liquidity and
ability to generate cash flow. These measures do not have any standardized definition under U.S. GAAP or IFRS and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with U.S. GAAP or IFRS, as
applicable. Other companies may calculate these measures differently.
Free Cash Flow
Free cash flow subtracts sustaining capital expenditures from net cash provided by operating activities, serving as an indicator of the capacity to generate cash from operations post-sustaining
capital investments.
For Additional Information
Coeur Mining, Inc.
200 S. Wacker Drive, Suite 2100
Chicago, Illinois 60606
Attention: Jeff Wilhoit, Senior Director, Investor Relations
Phone: (312) 489-5800
www.coeur.com
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New Gold, Inc.
Brookfield Place 181 Bay Street, Suite 3320
Toronto, Ontario V6C 3P1
Attention: Brandon Throop, Director, Investor Relations
Phone: +1 (416) 324-6000
www.newgold.com
Source: Coeur Mining
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