HeadnoteMutualReliance Review System for Exemptive Relief Applications - reliefgranted, subject to certain conditions, from the prospectus andregistration requirements in respect of trades in connection witha statutory arrangement.
Reportingissuer exempted from certain continuous disclosure and insiderreporting requirements subject to certain conditions. Disclosurerequired to be provided by these provisions would not be meaningfulto shareholders.
ApplicableOntario Statutory ProvisionsSecuritiesAct, R.S.O. 1990, c.S.5, as am., ss. 25, 35(1)15.i, 53, 72(1)(i),74(1), 75, 77, 78, 79, 80(b)(iii), 81(2), 107, 108, 109, 121(2)(a)(ii).
ApplicableOntario RulesRule45-501 Exempt Distributions.
Rule45-501 Resale of Securities.
INTHE MATTER OF
OFBRITISH COLUMBIA, ALBERTA, SASKATCHEWAN,
MANITOBA,ONTARIO, NOVA SCOTIA,
NEWBRUNSWICK, NEWFOUNDLAND AND LABRADOR,
PRINCEEDWARD ISLAND, QUEBEC, NORTHWEST TERRITORIES,
NUNAVUTAND YUKON TERRITORY
INTHE MATTER OF
THEMUTUAL RELIANCE REVIEW SYSTEM FOR
INTHE MATTER OF
NEWMONTMINING CORPORATION AND
FRANCO-NEVADAMINING CORPORATION LIMITED
WHEREASthe local securities regulatory authority or regulator (the "DecisionMaker"), in each of British Columbia, Alberta,Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Newfoundlandand Labrador, Prince Edward Island, Quebec, the Yukon Territory,the Northwest Territories and Nunavut (collectively, the "Jurisdictions")has received an application from Newmont Mining Corporation (togetherwith its successor corporations, "Newmont"),and two of its affiliates, Newmont Callco ("Callco"), and NewmontCanada ("Exchangeco") (collectively, the "Applicant"),for a decision under the securities legislation, regulations,rules and/or policies of the Jurisdictions (the "Legislation")that:
(i)certain trades in securities made in connection with or resultingfrom the proposed acquisition (the "Acquisition") pursuant toan arrangement agreement dated November 14, 2001 (the "ArrangementAgreement") by Newmont of all of the common sharesin the capital of Franco-Nevada Mining Corporation Limited ("Franco-Nevada"),to be effected by way of a plan of arrangement (the "Arrangement")under section 192 of the Canada Business Corporations Act, asamended (the "CBCA") shall be exempt from therequirements contained in the Legislation to be registered totrade in a security (the "Registration Requirements")and to file a preliminary prospectus and a prospectus and receivereceipts therefor (the "Prospectus Requirements");
(ii)Exchangeco be exempt from any requirements of the Legislation,where applicable, to (a) issue press releases and file reportsregarding material changes, to deliver to its security holdersand file with the applicable Decision Makers annual reports,interim and annual financial statements (including interim andannual management discussion and analysis), to file and deliverinformation circulars, (the "Continuous Disclosure Requirements"),and (b) file with the Decision Makers in Ontario, Quebec andSaskatchewan an annual information form and management discussionand analysis thereon (the "Local AIF and MD&A Requirements");and
(iii)insiders of Exchangeco be exempt from the requirement containedin the Legislation to file reports disclosing the insider'sdirect or indirect beneficial ownership of, or control or directionover, securities of Exchangeco (the "Insider ReportingRequirement");
ANDWHEREAS pursuant to the Mutual Reliance Review Systemfor Exemptive Relief Applications (the "System") the OntarioSecurities Commission is the principal regulator for this Application;
ANDWHEREAS the Applicant has represented to the DecisionMakers that:
1.Newmont is incorporated under the laws of the State of Delaware.Newmont is engaged in the production of gold, the explorationfor gold and the acquisition and development of gold propertiesworldwide. Newmont has operations in Canada, United States,Mexico, Peru, Bolivia, Australia, Mexico and Uzbekistan.
2.Newmont's corporate headquarters are in Denver, Colorado.
3.As at November 30, 2001, Newmont's share capital consisted of(i) 250,000,000 shares of Newmont common stock (the "NewmontCommon Shares"), par value US$1.60 per share, of which 196,129,592were outstanding; and (ii) 5,000,000 shares of US$3.25 convertiblepreferred stock, par value US$5.00 per share, of which 2,299,980were outstanding. As part of the Arrangement, Newmont will issuethe Newmont Special Voting Share (as defined below) to the Trusteepursuant to the Voting and Exchange Trust Agreement (as definedbelow).
4.The Newmont Common Shares are listed and trade principally onthe New York Stock Exchange (the "NYSE") under the symbol "NEM"and are also listed on the Brussels Stock Exchange and the SwissStock Exchange. Application has been made by Newmont to theNYSE to list the Newmont Common Shares issued pursuant to theArrangement, or issuable from time to time in exchange for exchangeableshares in the capital of Exchangeco (the "Exchangeable Shares")and upon exercise of Franco-Nevada Options (as defined below).
5.Newmont is subject to the reporting requirements of securitieslegislation in the United States. Newmont is currently a "reportingissuer" or the equivalent under the Legislation of each of BritishColumbia, Alberta, Saskatchewan, Manitoba and Quebec.
6.Callco will be incorporated as a direct or indirect wholly-ownedsubsidiary of Newmont. Callco will hold the various call rightsrelated to the Exchangeable Shares.
7.The authorized capital of Callco will consist of 1,000,000,000common shares. Upon completion of the Arrangement, all of theissued and outstanding common shares of Callco will be helddirectly or indirectly by Newmont.
8.Exchangeco will be incorporated as a direct or indirect subsidiaryof Newmont for the purpose of implementing the Arrangement andwill be the continuing corporation following the amalgamationof Exchangeco, Franco-Nevada and others as contemplated by theArrangement. Exchangeco's only material assets prior to suchamalgamation will be the issued and outstanding Franco-NevadaCommon Shares and shares of holding companies, the only assetsof which will be Franco-Nevada Common Shares.
9.The authorized share capital of Exchangeco will consist of anunlimited number of common shares, an unlimited number of preferenceshares, an unlimited number of Special Shares (as hereinafterdefined) and an unlimited number of Exchangeable Shares. Uponcompletion of the Arrangement, all of the outstanding commonshares and Special Shares of Exchangeco will be held directlyor indirectly by Newmont and all of the outstanding ExchangeableShares will be held by the former Franco-Nevada Shareholderswho elect to receive Exchangeable Shares in exchange for theirFranco-Nevada Common Shares under the Arrangement.
10.Exchangeco will initially be a "closely-held issuer" withinthe meaning of that term under Ontario Securities CommissionRule 45-101: Exempt Distributions. Upon the completion of theArrangement and if Exchangeable Shares are issued pursuant tothe Arrangement, the Exchangeable Shares will be listed on theTSE and Exchangeco will become a reporting issuer under theprovisions of applicable Canadian provincial and territorialsecurities legislation. It is a condition precedent of the Arrangementthat the Exchangeable Shares be conditionally approved for listingon The Toronto Stock Exchange (the "TSE"). On December 28, 2001,the TSE conditionally approved the Exchangeable Shares for listing.
11.Franco-Nevada was originally incorporated under the CBCA byarticles of incorporation dated October 5, 1982. It amalgamatedwith Euro-Nevada Mining Corporation Limited effective September20, 1999 pursuant to articles of arrangement dated September20, 1999 to form the current Franco-Nevada.
12.The primary business of Franco-Nevada is the acquisition of:(i) direct interests in mineral properties and, when appropriate,developing those properties; (ii) royalty interests in producingprecious metals mines and precious metals properties in thedevelopment or advanced exploration stage; (iii) direct interestsin mineral properties for the purpose of exploration, when appropriate,and selling, leasing or joint venturing those properties toestablished mine operators and retaining royalty interests;and (iv) indirect interests in mineral deposits through strategicinterests in companies that own interests in mineral deposits.Franco-Nevada's principal executive offices are located at Suite1900, 20 Eglinton Avenue West, Toronto, Ontario M4R 1K8.
13.In the year ended March 31, 2001, Franco-Nevada generated revenueof approximately CDN$284.3 million, earnings before tax of approximatelyCDN$164.6 million and earnings of approximately CDN$113.4 million.Total shareholders' equity at March 31, 2001 was approximatelyCDN$1.55 billion.
14.Franco-Nevada's authorized capital consists of an unlimitednumber of Franco-Nevada Common Shares and an unlimited numberof first preferred shares issuable in series. As at November14, 2001, 158,420,430 Franco-Nevada Common Shares were issuedand outstanding, Stock Options to acquire 5,040,356 Franco-NevadaCommon Shares were granted and outstanding, Class A Warrantsto acquire 8,895,344 Franco-Nevada Common Shares were issuedand outstanding and Class B Warrants to acquire an aggregateof 6,571,953 Franco-Nevada Common shares were issued and outstanding.
15.Franco-Nevada Common Shares are listed on the TSE under thesymbol "FN". The Class A Warrants are listed on the TSE underthe symbol "FN.WT". The Class B Warrants are quoted on the CanadianVenture Exchange under the symbol "YFN WT.B". Franco-Nevadais reporting issuer in all provinces of Canada.
16.On September 21, 2000, Franco-Nevada and Montreal Trust Companyof Canada entered into a shareholder rights agreement providingfor a shareholder rights plan which was approved by shareholdersof Franco-Nevada on the same date. In the Arrangement Agreement,Franco-Nevada confirmed that its board of directors acting ingood faith considered it necessary and desirable to extend theSeparation Time (as such term is defined in the shareholderrights agreement) until after the vote by Franco-Nevada Shareholdersat the Franco-Nevada Meeting and has agreed to obtain the consentof the Franco-Nevada Shareholders to waive the application ofthe shareholder rights agreement to the Arrangement and thetransactions contemplated thereby.
17.The Acquisition will be effected by way of Arrangement, whichwill require: (i) the approval of holders of the Franco-NevadaCommon Shares (the "Franco-Nevada Shareholders") holding notless than 66 and 2/3% of the votes cast at the meeting of suchFranco-Nevada Shareholders (the "Franco-Nevada Meeting") (currentlyscheduled to be held on or about January 30, 2002) by Franco-NevadaShareholders present in person or represented by proxy; and(ii) the final approval of the Court (as defined below). Eachholder of Franco-Nevada Common Shares will be entitled to onevote for each Franco-Nevada Common Share held.
18.In connection with the Arrangement, Franco-Nevada has mailedto the Franco-Nevada Shareholders a management information circular(the "Circular"). The Circular contains, among other things,prospectus-level disclosure of the business and affairs of eachof Newmont and Exchangeco and the particulars of the Arrangement,the Exchangeable Shares and Newmont Common Shares. The Circularalso discloses that Newmont and Exchangeco will apply for exemptiverelief from prospectus and registration requirements for certaintrades to be made in connection with Acquisition, and that Exchangecobe exempt from certain continuous disclosure requirements andthat insiders of Exchangeco be exempt from certain insider reportingrequirements of the Legislation.
19.On December 27, 2001, the Superior Court of Justice (Ontario)(the "Court") granted an interim order in respect of the Arrangementproviding for the calling and holding of the Franco-Nevada Meetingand certain other procedural matters including providing forapproval of the Arrangement to be made by the affirmative voteof not less than 66 and 2/3% of the votes cast at the Franco-NevadaMeeting by Franco-Nevada Shareholders present in person or representedby proxy.
20.Upon the Arrangement becoming effective, in accordance withelections made by holders of Franco-Nevada Common Shares, theoutstanding Franco-Nevada Common Shares (except those held byshareholders who exercise their rights of dissent and are ultimatelyentitled to be paid the fair value thereof) will be acquired,at the option of the holder thereof, by either Exchangeco orCallco and each holder of Franco-Nevada Common Shares shallbe entitled to receive in consideration therefor either: (i)0.80 Exchangeable Shares per Franco-Nevada Common Share acquiredby Exchangeco; or (ii) 0.80 Newmont Common Shares per Franco-NevadaCommon Share acquired by Callco.
21.Alternatively, holders of Franco-Nevada Common Shares shallbe entitled to transfer their Franco-Nevada Common Shares toa newly incorporated corporation ("Holdco") and sell all issuedand outstanding shares in the capital of Holdco ("Holdco Shares")to either Callco or Exchangeco, provided certain conditionsare satisfied, including, among other things that the holderis a resident of Canada for the purposes of the ITA, Holdcohas no indebtedness or liabilities and owns no assets otherthan the Franco-Nevada Common Shares and the holder transfersits Franco-Nevada Common Shares to Holdco solely in considerationfor the Holdco Shares. If the Holdco Shares are sold to Exchangeco,the holder of such Holdco Shares shall be entitled to receivein consideration therefor, 0.80 Exchangeable Shares per Franco-NevadaCommon Share owned by Holdco. If the Holdco Shares are soldto Callco, the holder of such Holdco Shares shall be entitledto receive in consideration therefor, 0.80 Newmont Common Sharesper Franco-Nevada Common Share owned by Holdco.
22.Each issued and outstanding Franco-Nevada Common Share and HoldcoShare acquired by Callco will be transferred by Callco to Exchangecoin consideration for the issuance of 1,000 special shares (the"Special Shares") in the capital of Exchangeco.
23.Pursuant to the Arrangement, each holder: of (i) options toacquire Franco-Nevada Common Shares ("Stock Options") issuedpursuant to the Franco-Nevada employee stock option plan; (ii)Class A Warrants to acquire Franco-Nevada Common Shares issuedby Franco-Nevada ("Class A Warrants"); or (iii) Class B Warrantsto acquire Franco-Nevada Common Shares issued by Franco-Nevada("Class B Warrants") (the Stock Options, the Class A Warrantsand the Class B Warrants collectively referred to herein asthe "Franco-Nevada Options") shall be entitled to receive uponthe subsequent exercise of such holder's Franco-Nevada Options,in accordance with its terms, and shall accept in lieu of thenumber of Franco-Nevada Common Shares to which such holder wastheretofore entitled upon such exercise but for the same aggregateconsideration payable therefor, the aggregate number of NewmontCommon Shares, that such holder would have been entitled toreceive as a result of the transactions contemplated by theArrangement if, on the effective date of the Arrangement, suchholder had been the registered holder of the number of Franco-NevadaCommon Shares to which such holder was theretofore entitledupon such exercise, subject to adjustment to account for fractionalshares.
24.Subject to adjustments, each Exchangeable Share will be exchangeableby the holder at any time for one Newmont Common Share. EachExchangeable Share shall be redeemed for one Newmont CommonShare on the seventh anniversary of the date on which ExchangeableShares are first issued or earlier in certain circumstances,including when fewer than 1,000,000 Exchangeable Shares areheld by non-Newmont entities. Provided the Exchangeable Sharesare listed on a prescribed stock exchange in Canada (which currentlyincludes the TSE), the Exchangeable Shares will be "qualifiedinvestments" under the Income Tax Act (Canada), as amended (the"ITA") for certain investors. In addition, provided that theExchangeable Shares are so listed and certain other criteriais satisfied (which criteria Newmont has agreed to use its bestefforts to satisfy), the Exchangeable Shares will not be "foreignproperty" under the ITA.
25.In connection with the Arrangement, Newmont, Exchangeco anda trustee (the "Trustee") will enter into a voting and exchangetrust agreement (the "Voting and Exchange Trust Agreement")and Newmont, Callco and Exchangeco will enter into a supportagreement (the "Support Agreement"). These agreements, togetherwith the rights, privileges, restrictions and conditions attachingto the Exchangeable Shares (the "Exchangeable Share Provisions")and the rights attaching to the special voting share in thecapital of Newmont ("Newmont Special Voting Share") issued tothe Trustee pursuant to the Voting and Exchange Trust Agreement,which allows the Trustee, as trustee for and on behalf of allregistered holders of the Exchangeable Shares (other than affiliatesof Newmont) to receive for no additional consideration, theVoting Rights, the Automatic Exchange Right, the Automatic ExchangeRights on Liquidation (each of which are hereinafter defined)and any other similar rights that may be available from timeto time to holders of the Exchangeable Shares, result in theeconomic attributes of the Exchangeable Shares being substantiallyequivalent in all material respects to the economic attributesof the Newmont Common Shares.
26.Franco-Nevada, Exchangeco and all of the Holdcos will amalgamateand continue as one corporation under the CBCA to continue underthe name "Franco-Nevada Mining Corporation". Each common sharein the capital of Exchangeco shall become one common share inthe capital of the amalgamated corporation. Each Special Sharein the capital of Exchangeco shall become one Special Sharein the capital of the amalgamated corporation. Each ExchangeableShare in the capital of Exchangeco shall become one ExchangeableShare in the capital of the amalgamated corporation. Each sharein the capital of Franco-Nevada and each share in the capitalof each Holdco shall be cancelled. For the purposes of thisDecision, Exchangeco means the corporation that issues the ExchangeableShares pursuant to the Arrangement and following the amalgamationdescribed in the first sentence of this clause, the corporationcontinuing as a result of that amalgamation.
27.The Exchangeable Shares will be entitled to a preference overthe common shares of Exchangeco, the Special Shares and anyother shares ranking junior to the Exchangeable Shares withrespect to the payment of dividends and the distribution ofassets in the event of a liquidation, dissolution or winding-upof Exchangeco, whether voluntary or involuntary, or any otherdistribution of the assets of Exchangeco among its shareholdersfor the purpose of winding-up its affairs. The ExchangeableShare Provisions will provide that each Exchangeable Share willentitle the holder to dividends from Exchangeco payable at thesame time as, and equivalent to, each dividend paid by Newmonton a Newmont Common Share. Subject to the overriding LiquidationCall Right of Callco or Newmont, as the case may be, definedbelow, on the liquidation, dissolution or winding-up of Exchangeco,a holder of Exchangeable Shares will be entitled, subject toapplicable law, to receive from the assets of Exchangeco foreach Exchangeable Share held, an amount equal to the currentmarket price of a Newmont Common Share on the last businessday prior to the liquidation date, to be satisfied by the deliveryof one Newmont Common Share, plus an amount equal to all declaredand unpaid dividends on each such Exchangeable Share held bysuch holder on any dividend record date which occurred priorto the liquidation date (such aggregate amount, the "LiquidationAmount"). Upon a proposed liquidation, dissolution or winding-upof Exchangeco, Callco or Newmont, as the case may be, will havean overriding call right (the "Liquidation Call Right") to purchaseall of the outstanding Exchangeable Shares from the holdersthereof for a price per share equal to the Liquidation Amount.
28.The Exchangeable Shares will be non-voting (except as requiredby applicable law) and will be retractable at the option ofthe holder at any time. Subject to the overriding RetractionCall Right of Callco or Newmont, as the case may be, definedbelow, upon retraction, the holder will be entitled to receivefrom Exchangeco, for each Exchangeable Share retracted, an amountequal to the current market price for a Newmont Common Share,to be satisfied by the delivery of one Newmont Common Share,plus an amount equal to all declared and unpaid dividends oneach such Exchangeable Share held by such holder on any dividendrecord date which occurred prior to the retraction date (suchaggregate amount, the "Retraction Price"). Upon being notifiedby Exchangeco of a proposed retraction of Exchangeable Shares,Callco or Newmont, as the case may be, will have an overridingcall right (the "Retraction Call Right") to purchase from theholder all of the Exchangeable Shares that are the subject ofthe retraction notice for a price per share equal to the RetractionPrice.
29.Subject to applicable law and to the overriding Redemption CallRight of Callco or Newmont, as the case may be, referred tobelow in this paragraph, Exchangeco shall redeem all the ExchangeableShares then outstanding on the date (the "Redemption Date"),if any, fixed by the board of directors of Exchangeco for theredemption of the Exchangeable Shares, such Redemption Datenot being earlier than the seventh anniversary of the date onwhich the Exchangeable Shares are first issued. The RedemptionDate may be earlier than the seventh anniversary of the dateon which the Exchangeable Shares are first issued in certaincircumstances, as described in the Circular, including if thereare fewer than 1,000,000 Exchangeable Shares outstanding (otherthan Exchangeable Shares held by Newmont and its affiliatesand subject to necessary adjustments to such number of sharesto reflect permitted changes to Exchangeable Shares). Upon suchredemption, a holder will be entitled to receive from Exchangeco,for each Exchangeable Share redeemed, an amount equal to thecurrent market price of a Newmont Common Share, to be satisfiedby the delivery of one Newmont Common Share, plus an amountequal to all declared and unpaid dividends on each such ExchangeableShare held by such holder on any dividend record date whichoccurred prior to the redemption date (such aggregate amount,the "Redemption Price"). Upon being notified by Exchangeco ofa proposed redemption of Exchangeable Shares, Callco and Newmont,as the case may be, will have an overriding call right (the"Redemption Call Right") to purchase from the holders all ofthe outstanding Exchangeable Shares for a price per share equalto the Redemption Price.
30.Any approval required to be given by the holders of the ExchangeableShares to add to, change or remove any right, privilege, restrictionor condition attaching to the Exchangeable Shares or any othermatter requiring the approval or consent of the holders of theExchangeable Shares in accordance with applicable law will bedeemed to have been sufficiently given if it has been givenin accordance with applicable law, subject to a minimum requirementthat such approval be evidenced by a resolution passed by notless than two-thirds of the votes cast on such resolution ata meeting of holders of Exchangeable Shares duly called andheld at which the holders of at least 10% of the outstandingExchangeable Shares are present or represented by proxy.
31.The Exchangeable Shares, together with the Voting and ExchangeTrust Agreement will provide holders thereof with a securityof a Canadian issuer having economic rights which are, as nearlyas practicable, equivalent to those of Newmont Common Shares.Exchangeable Shares may be received by certain holders of Franco-NevadaCommon Shares on a Canadian tax-deferred rollover basis and,provided such shares are listed on a prescribed stock exchange(which currently includes the TSE), will be "qualified investments"for certain investors. In addition, provided that the ExchangeableShares are so listed and certain other criteria are satisfied(which criteria Newmont has agreed to use its best efforts tosatisfy), the Exchangeable Shares will not constitute "foreignproperty" under the ITA.
32.Pursuant to the Voting and Exchange Trust Agreement, Newmontwill issue to the Trustee one Newmont Special Voting Share tobe held of record by the Trustee as trustee for and on behalfof, and for the use and benefit of, the registered holders fromtime to time of Exchangeable Shares (other than affiliates ofNewmont) and in accordance with the provisions of the Votingand Exchange Trust Agreement. During the term of the Votingand Exchange Trust Agreement, Newmont is not permitted to issueany additional Newmont Special Voting Shares without the consentof the holders of Exchangeable Shares.
33.Under the Voting and Exchange Trust Agreement, the Trustee willbe entitled to all of the voting rights, including the rightto vote in person or by proxy, attaching to the Newmont SpecialVoting Share on all matters that may properly come before theshareholders of Newmont at a meeting of shareholders. The NewmontSpecial Voting Share has a number of votes, which may be castby the Trustee at any meeting at which Newmont shareholdersare entitled to vote, equal to the lesser of the number of outstandingExchangeable Shares (other than shares held by Newmont or itsaffiliates) and 10% of the total number of votes attached tothe Newmont Common Shares then outstanding.
34.Each holder of an Exchangeable Share (other than Newmont orits affiliates) on the record date for any meeting at whichNewmont shareholders are entitled to vote will be entitled toinstruct the Trustee to exercise the lesser of one of the votesattached to the Newmont Special Voting Share for (i) such ExchangeableShare, or (ii) every 10 votes attaching to the outstanding NewmontCommon Shares. The Trustee will exercise each vote attachedto the Newmont Special Voting Share only as directed by therelevant holder and, in the absence of instructions from a holderas to voting, the Trustee will not have voting rights with respectto such Exchangeable Shares. A holder may, upon instructingthe Trustee, obtain a proxy from the Trustee entitling the holderto vote directly at the relevant meeting the votes attachedto the Newmont Special Voting Share to which the holder is entitled.
35.The Trustee will send to the holders of the Exchangeable Sharesthe notice of each meeting at which the Newmont shareholdersare entitled to vote, together with the related meeting materialsand a statement as to the manner in which the holder may instructthe Trustee to exercise the votes attaching to the Newmont SpecialVoting Share, at the same time as Newmont sends such noticeand materials to the Newmont shareholders. The Trustee willalso send to the holders of Exchangeable Shares copies of allinformation statements, interim and annual financial statements,reports and other materials sent by Newmont to the Newmont shareholdersat the same time as such materials are sent to the Newmont shareholders.To the extent such materials are provided to the Trustee byNewmont, the Trustee will also send to the holders all materialssent by third parties to Newmont shareholders generally, includingunder U.S. securities laws, including dissident proxy circularsand tender and exchange offer circulars, as soon as possibleafter such materials are first sent to Newmont shareholders.
36.All rights of a holder of Exchangeable Shares to exercise votesattached to the Newmont Special Voting Share will cease uponthe exchange of such holder's Exchangeable Shares for NewmontCommon Shares.
37.Under the Voting and Exchange Trust Agreement, upon the liquidation,dissolution or winding-up of Exchangeco, Newmont will be requiredto purchase each outstanding Exchangeable Share and each holderwill be required to sell all of its Exchangeable Shares (suchpurchase and sale obligations are hereafter referred to as the"Automatic Exchange Right"). The purchase price for each ExchangeableShare purchased by Newmont will be satisfied by the deliveryto the Trustee, on behalf of the holder, of one Newmont CommonShare, together with, on the designated payment date thereforand to the extent not already paid by Exchangeco, all declaredand unpaid dividends on each such Exchangeable Share.
38.Under the Voting and Exchange Trust Agreement, upon the liquidation,dissolution or winding-up of Newmont, Newmont will be requiredto purchase on the fifth business day prior to the effectivedate of such liquidation, dissolution or winding-up each outstandingExchangeable Share and each holder will be required to sellall of its Exchangeable Shares (such purchase and sale obligationsare hereafter referred to as the "Automatic Exchange Rightson Liquidation"). The purchase price will be satisfied by thedelivery to the Trustee, on behalf of the holder, of one NewmontCommon Share, together with, on the designated payment datetherefor and to the extent not already paid by Exchangeco, alldeclared and unpaid dividends on each such Exchangeable Share.
39.Contemporaneously with the closing of the Arrangement, Newmont,Exchangeco and Callco will enter into a Support Agreement. Pursuantto the Support Agreement, Newmont has covenanted that, so longas Exchangeable Shares not owned by Newmont or its affiliatesare outstanding, Newmont will, among other things: (a) not declareor pay any dividend on the Newmont Common Shares unless (i)on the same day Exchangeco declares or pays, as the case maybe, an equivalent dividend on the Exchangeable Shares and (ii)Exchangeco has sufficient money or other assets or authorizedbut unissued securities available to enable the due declarationand the due and punctual payment, in accordance with applicablelaw, of an equivalent dividend on the Exchangeable Shares; (b)advise Exchangeco in advance of the declaration of any dividendon the Newmont Common Shares and take other actions reasonablynecessary to ensure that the declaration date, record date andpayment date for dividends on the Exchangeable Shares are thesame as those for any corresponding dividends on the NewmontCommon Shares; (c) ensure that the record date for any divideddeclared on the Newmont Common Shares is not less than sevendays after the declaration date of such dividend; and (d) takeall actions and do all things reasonably necessary or desirableto enable and permit Exchangeco, in accordance with applicablelaw, to pay the Liquidation Amount, the Retraction Price orthe Redemption Price to the holders of the Exchangeable Sharesin the event of a liquidation, dissolution or winding-up ofExchangeco, a retraction request by a holder of ExchangeableShares or a redemption of Exchangeable Shares by Exchangeco,as the case may be.
40.The Support Agreement will also provide that, without the priorapproval of Exchangeco and the holders of the Exchangeable Shares,actions such as distributions of stock dividends, options, rightsand warrants for the purchase of securities or other assets,subdivisions, reclassifications, reorganizations and other changescannot be taken in respect of the Newmont Common Shares withoutthe same or an economically equivalent action being taken inrespect of the Exchangeable Shares.
41.The steps under the Arrangement and the attributes of the NewmontCommon Shares and Exchangeable Shares involve a number of tradesand/or distributions of securities, including trades and/ordistributions related to the issuance of Newmont Common Sharesand Exchangeable Shares pursuant to or in connection with theArrangement or upon the issuance of Newmont Common Shares inexchange for Exchangeable Shares or the exercise of Franco-NevadaOptions. The trades and/or distributions and possible tradesand/or distributions in securities to which the Arrangementgives rise (the "Trades") include the following:
(a)the issuance by Newmont of Newmont Common Shares to enable Callcoto deliver Newmont Common Shares in connection with the Arrangement;
(b)the delivery of Newmont Common Shares by Callco to certain holdersof Franco-Nevada Common Shares and Holdco Shares and the transferof Franco-Nevada Common Shares or Holdco Shares by such holdersto Callco;
(c)the issuance by Exchangeco of Exchangeable Shares in connectionwith the Arrangement and the delivery thereof to certain holdersof Franco-Nevada Common Shares or Holdco Shares and the transferof Franco-Nevada Common Shares or Holdco Shares by such holdersto Exchangeco;
(d)the transfer by Callco of the Franco-Nevada Common Shares andHoldco Shares to Exchangeco and the issuance of Special Sharesto Callco;
(e)the issuance and delivery of Newmont Common Shares by Newmontto a holder of a Franco-Nevada Option upon the exercise thereof;
(f)the grant to the Trustee for the benefit of holders of ExchangeableShares pursuant to the Voting and Exchange Trust Agreement,the Automatic Exchange Right, the Automatic Exchange Rightson Liquidation and the voting rights pursuant to the NewmontSpecial Voting Share;
(g)the grant of the Liquidation Call Right, the Retraction CallRight and the Redemption Call Right;
(h)the issuance by Newmont, pursuant to the Voting and ExchangeTrust Agreement, of the Newmont Special Voting Share to theTrustee for the benefit of the holders of the Exchangeable Shares;
(i)the issuance by Newmont of Newmont Common Shares to enable Exchangecoto deliver Newmont Common Shares to a holder of ExchangeableShares upon its retraction of Exchangeable Shares, and the subsequentdelivery thereof by Newmont (at the direction of Exchangeco)upon such retraction;
(j)the transfer of Exchangeable Shares by the holder to Exchangecoupon the holder's retraction of Exchangeable Shares;
(k)the issuance by Newmont of Newmont Common Shares to enable Callcoto deliver Newmont Common Shares to a holder of ExchangeableShares in connection with Callco's exercise of the RetractionCall Right, and the subsequent delivery thereof by Newmont (atthe direction of Callco) upon such exercise of the RetractionCall Right;
(l)the transfer of Exchangeable Shares by the holder to Callcoor Newmont, as the case may be, upon Callco or Newmont, as thecase may be, exercising the Retraction Call Right;
(m)the issuance by Newmont of Newmont Common Shares to enable Exchangecoto deliver Newmont Common Shares to holders of ExchangeableShares upon the redemption of the Exchangeable Shares, and thesubsequent delivery thereof by Newmont (at the direction ofExchangeco) upon such redemption;
(n)the transfer of Exchangeable Shares by the holder to Exchangecoupon the redemption of Exchangeable Shares;
(o)the issuance by Newmont of Newmont Common Shares to enable Callcoto deliver Newmont Common Shares to holders of ExchangeableShares in connection with Callco's exercise of the RedemptionCall Right, and the subsequent delivery thereof by Newmont (atthe direction of Callco) upon such exercise of the RedemptionCall Right;
(p)the transfer of Exchangeable Shares by the holder to Callcoor Newmont, as the case may be, upon Callco or Newmont, as thecase may be, exercising the Redemption Call Right;
(q)the issuance by Newmont of Newmont Common Shares to enable Exchangecoto deliver Newmont Common Shares to holders of ExchangeableShares on the liquidation, dissolution or winding-up of Exchangecoand the subsequent delivery thereof by Exchangeco upon suchliquidation, dissolution or winding-up;
(r)the transfer of Exchangeable Shares by the holder to Exchangecoon the liquidation, dissolution or winding-up of Exchangeco;
(s)the issuance by Newmont of Newmont Common Shares to enable Callcoto transfer Newmont Common Shares to holders of ExchangeableShares in connection with Callco's exercise of the LiquidationCall Right, and the subsequent delivery thereof by Newmont (atthe direction of Callco) upon such exercise of the LiquidationCall Right;
(t)the transfer of Exchangeable Shares by the holder to Callcoor Newmont, as the case may be, upon Callco or Newmont, as thecase may be, exercising the Liquidation Call Right;
(u)the issuance of Newmont Common Shares by Newmont to a holderof Exchangeable Shares upon its exercise of the Automatic ExchangeRights on Liquidation; and
(v)the transfer of Exchangeable Shares by a holder to Newmont uponits exercise of the Automatic Exchange Rights on Liquidation.
42.The fundamental investment decision to be made by a holder ofFranco-Nevada Common Shares, Franco-Nevada Options and HoldcoShares is made at the time of the Franco-Nevada Meeting whensuch holder votes in respect of the Arrangement and on February15, 2002 (or such later date prior to the closing of the Arrangement)which is the deadline for holders to elect between receivingExchangeable Shares or Newmont Common Shares. As a result ofthis decision, any holder of Franco-Nevada Common Shares orHoldco Shares (other than a holder who exercises its right ofdissent) receives Exchangeable Shares or Newmont Common Sharesin exchange for such Franco-Nevada Common Shares or Holdco Shares.Moreover, holders of Franco-Nevada Options will be entitledto Newmont Common Shares upon exercise thereof. As the ExchangeableShares will provide certain Canadian tax benefits to certainCanadian holders but will otherwise have economic rights thatare, as nearly as practicable, equivalent to that of the NewmontCommon Shares, all subsequent exchanges of Exchangeable Sharesare in furtherance of the holder's initial investment decisionto acquire Newmont Common Shares on the Arrangement. Moreover,it is the information relating to Newmont not Exchangeco thatwill be relevant to holders of Newmont Common Shares and theExchangeable Shares. As mentioned above, that investment decisionwill be made on the basis of the Circular, which contains prospectus-leveldisclosure of the business and affairs of each of Newmont, Exchangeco,the particulars of the Arrangement and the securities to beissued in connection therewith. The Circular also contains consolidatedfinancial statements of Newmont and Franco-Nevada, as well aspro forma combined condensed financial statements of Newmont.
43.Newmont will send to all holders of Newmont Common Shares residentin Canada contemporaneously all disclosure material sent toholders of Newmont Common Shares resident in the United States.
ANDWHEREAS pursuant to the System, this MRRS DecisionDocument evidences the decision of each Decision Maker (collectively,the "Decision");
ANDWHEREAS each of the Decision Makers is satisfied thatthe test contained in the Legislation that provides the DecisionMaker with the jurisdiction to make the Decision has been met,
THEDECISION of the Decision Makers pursuant to the Legislationis that:
1.the Trades are not subject to the Registration and ProspectusRequirements, provided that:
(a)except in Quebec, the first trade in Exchangeable Shares acquiredas contemplated by this Decision will be a distribution or primarydistribution to the public unless the conditions in subsections(3) or (4) of section 2.6 of Multilateral Instrument 45-102:Resale of Securities ("MI 45-102") are satisfied, and for thepurpose of determining the period of time that Exchangeco hasbeen a reporting issuer under section 2.6, the period of timethat Franco-Nevada was a reporting issuer may be included; and
(b)except in Quebec, the first trade in Newmont Common Shares acquiredas contemplated by this Decision (including, for greater certainty,upon the exchange of an Exchangeable Share or upon the exerciseof a Franco-Nevada Option) will be a distribution or primarydistribution to the public unless, at the time of the trade:
(i)if Newmont is a reporting issuer in any Jurisdiction listedin Appendix B to MI 45-102 other than Quebec, the conditionsin subsections (3) or (4) of section 2.6 of MI 45-102 are satisfied;and
(ii)if Newmont is not a reporting issuer in any Jurisdiction otherthan Quebec, such first trade is made through an exchange, ora market, outside of Canada.
2.in Quebec, to the extent that there is no exemption availablefrom the Registration and Prospectus Requirements in respectof any of the Trades, the Trades are not subject to the Registrationand Prospectus Requirements, provided that the issuer or oneof the parties to the Arrangement (including, for greater certainty,Franco-Nevada) is and has been a reporting issuer in Quebecand has complied with the applicable requirements for the twelvemonths immediately preceding the Trades (and for the purposeof determining the period of time that the issuer or one ofthe parties to the Arrangement has been a reporting issuer inQuebec, the period of time that Franco-Nevada was a reportingissuer may be included).
3.the Continuous Disclosure Requirements and the Insider ReportingRequirements shall not apply to Exchangeco or any insider ofExchangeco, so long as:
(a)Newmont sends to all holders of Exchangeable Shares residentin Canada contemporaneously, all disclosure material furnishedto holders of Newmont Common Shares in the United States including,without limitation, copies of its annual and interim financialstatements and sends to holders of Exchangeable Shares residentin Canada all proxy solicitation materials;
(b)Newmont files with each Decision Maker copies of all documentsrequired to be filed by it with the United States Securitiesand Exchange Commission under the United States Securities andExchange Act of 1934 including, without limitation, copies ofany Form 20-F, Form 6-K and proxy solicitation material, andall such filings are made under Exchangeco's SEDAR profile andthe filing fees which would otherwise be payable by Exchangecoin connection with such filings are paid;
(c)Newmont complies with the requirements of the United StatesSecurities and Exchange Commission and the NYSE in respect ofmaking public disclosure of material information on a timelybasis and forthwith issues and files any press release thatdiscloses a material change in Newmont's affairs;
(d)Exchangeco complies with the requirements in the Legislationto issue press releases and file reports regarding materialchanges in respect of material changes in the affairs of Exchangecothat would be material to holders of Exchangeable Shares butwould not be material to holders of Newmont Common Shares;
(e)Newmont includes in all future mailings of proxy solicitationmaterials (if any) to holders of Exchangeable Shares a clearand concise statement explaining the reason for the mailed materialbeing solely in relation to Newmont and not in relation to Exchangeco,such statement to include a reference to the economic equivalencybetween the Exchangeable Shares and the Newmont, Common Sharesand the right to direct voting at Newmont's shareholders meetingspursuant to the Voting and Exchange Trust Agreement (withouttaking into account tax effects);
(f)Newmont remains the direct or indirect beneficial owner of allthe issued and outstanding common shares of Exchangeco;
(g)Exchangeco has not issued any securities to the public otherthan the Exchangeable Shares and the Franco-Nevada Options;and
withrespect to relief from complying with the Insider ReportingRequirements, further provided that:
(h)such insider of Exchangeco does not receive or have access toinformation as to material facts or material changes concerningNewmont before the material facts or material changes are disclosed;or
(i)such insider of Exchangeco is not also an insider of a "majorsubsidiary" of Newmont (as such term is defined in NationalInstrument 55-101: Exemptions from Certain Insider ReportingRequirements as if Newmont were a reporting issuer).
"RStephen Paddon" "H. Lorne Morphy"
ANDTHE FURTHER DECISION of the Decision Makers is thatthe Local AIF and MD&A Requirements shall not apply to Exchangecoprovided that the conditions set out in paragraphs 3(a) to (g)of the operative portion of the Decision are complied with.January30, 2002.