EXHIBIT 2
EXECUTION COPY
LOCK-UP AGREEMENT
THIS LOCK-UP AGREEMENT dated as of the ____ day of December, 2009 (the
"Agreement")
BETWEEN:
ROYAL GOLD, INC.,
a corporation existing under the laws of the State of Delaware,
(the "Purchaser")
- and -
ALTIUS MINERALS CORPORATION,
a corporation existing under the laws of the Province of Alberta,
(the "Shareholder").
RECITALS:
A. This Agreement sets out the terms and conditions upon which the
Shareholder will support the Purchaser's acquisition of the issued and
outstanding common shares (the "Shares") of International Royalty
Corporation, a corporation existing under the laws of Canada (the
"Company"), by means of a Plan of Arrangement (the "Transaction") to be
effected under the provisions of the Canada Business Corporations Act
(the "CBCA").
B. This Agreement also sets out the terms and conditions of the agreement
of the Shareholder to vote in favour of the Transaction: (i) 8,924,972
Shares, representing all of the Shares currently owned legally or
beneficially by the Shareholder, or over which the Shareholder
exercises control or direction, and (ii) all Shares subsequently
acquired by the Shareholder (all of such Shares of the Shareholder are
hereinafter collectively referred to as the "Shareholder's Shares"),
and sets out the obligations and commitments of the Shareholder in
connection therewith.
C. The Shareholder acknowledges that the Purchaser would not proceed with
the Transaction but for the execution and delivery of this Agreement by
the Shareholder.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the mutual
promises and covenants set forth herein, and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties agree as follows:
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ARTICLE 1
EFFECTIVENESS
This Agreement shall become effective upon the execution and delivery
by the Purchaser and the Company (which shall occur concurrently with the
execution and delivery by the parties hereto of this Agreement) of a definitive
arrangement agreement with respect to the Transaction substantially in
accordance with the terms set out in Schedule "A" (the "Arrangement Agreement").
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of the Shareholder
The Shareholder hereby represents and warrants to and in favour of the
Purchaser as follows and acknowledges that the Purchaser is relying upon such
representations and warranties in connection with the matters contemplated by
this Agreement:
(a) Organization. The Shareholder is a corporation existing under the
laws of the Province of Alberta.
(b) Authorization, etc. The Shareholder has all necessary power,
authority, capacity, consents and right to enter into this
Agreement and to carry out each of its obligations under this
Agreement. This Agreement has been duly executed and delivered by
the Shareholder and constitutes a legal, valid and binding
obligation of the Shareholder enforceable against it in accordance
with its terms; subject, however, to limitations with respect to
enforcement imposed by law in connection with bankruptcy or
similar proceedings, the equitable power of the courts to stay
proceedings before them and the execution of judgments and to the
extent that equitable remedies such as specific performance and
injunction are in the discretion of the court from which they are
sought.
(c) Ownership, etc. The Shareholder, through its direct wholly-owned
subsidiary, Altius Resources Inc. ("Altius Resources"), is the
sole beneficial owner of, and exercises control and direction
over, the Shareholder's Shares. The Shareholder's Shares
constitute all of the Shares owned or controlled, directly or
indirectly, by the Shareholder. As of the date hereof, the total
number of Shares beneficially owned or over which the Shareholder
exercises control or direction is 8,924,972. The Shareholder,
through Altius Resources, has the sole and exclusive right to
dispose of such Shareholder's Shares as provided in this Agreement
and to vote all such Shares and the Shareholder is not a party to,
bound or affected by or subject to, any law of which a breach
would occur as a result of the execution and delivery of this
Agreement or the consummation of any of the transactions provided
for in this Agreement.
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(d) Good Title. The Shareholder's Shares to be acquired by the
Purchaser from the Shareholder pursuant to the Transaction will be
acquired with good and marketable title, free and clear of any and
all mortgages, liens, charges, restrictions, security interests,
adverse claims, pledges, encumbrances and demands or rights of
others of any nature or kind whatsoever, and such Shareholder's
Shares are not subject to any shareholders' agreement, voting
trust or similar agreement or any right or privilege (whether by
law, pre-emptive or contractual) capable of becoming a
shareholders' agreement, voting trust or other agreement affecting
the Shareholder's Shares or the ability of such holder thereof to
exercise ownership rights thereto, including the voting of any
such Shares. No security holder approvals are or will be required
in order to sell the Shareholder's Shares to the Purchaser.
(e) No Agreements. No person, firm, corporation or other entity
whatsoever 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, requisition or transfer
from the Shareholder, or any registered holder of Shareholder's
Shares, of any of the Shareholder's Shares, or any interest
therein or right thereto, except pursuant to this Agreement.
Except for the Shareholder Rights Plan Agreement dated as of
November 21, 2008 between the Company and CIBC Mellon Trust
Company, as Rights Agent (the "SRP Agreement"), there does not
exist any agreement, understanding or commitment giving rise to
any obligations, financial or otherwise, on the part of the
Company or any of its subsidiaries or affiliates to the
Shareholder, or any subsidiaries or affiliates of the Shareholder
as applicable (or any associates or insiders of any of the
foregoing).
(f) No Proceeding Pending. There is no claim, action, lawsuit,
arbitration, mediation or other proceeding pending or threatened
against the Shareholder, which relates to this Agreement or
otherwise materially impairs or could materially impair the
ability of the Shareholder to consummate the transactions
contemplated hereby.
(g) Consents. To the knowledge of the Shareholder, there is no
requirement of the Shareholder to make any filing with, give any
notice to, or obtain any permit, licence, sanction, ruling, order,
exemption or consent, approval or waiver of, any governmental
authority or other person (including the lapse, without objection,
of a prescribed time under applicable law that states that a
transaction may be implemented if a prescribed time lapses
following the giving of notice) as a condition to the lawful
completion of the transactions contemplated by this Agreement or
the Transaction, or the execution and delivery by the Shareholder
and enforcement against the Shareholder of this Agreement, except
for the filing by the Shareholder of an amendment or amendments to
its Schedule 13D pursuant to the United States Securities Exchange
Act of 1934, as amended (the "1934 Act").
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(h) Non-Contravention. This Agreement does not (or would not with the
giving of notice, the lapse of time or the happening of any other
event or condition) result in a breach or a violation of, or
conflict with in any material manner, or allow any other person to
exercise any rights under any of the terms or provisions of the
constating documents and/or by-laws of the Shareholder or any
agreement, contract or indenture to which the Shareholder is a
party or by which the Shareholder's property is bound (as
applicable), and will not result in the violation of any law,
provided that the Purchaser acknowledges the terms and conditions
of the SRP Agreement and agrees that it is fully familiar with
such terms and conditions and will be responsible for compliance
with such agreement.
Section 2.2 Representations and Warranties of the Purchaser
The Purchaser hereby represents and warrants to and in favour of the
Shareholder as follows and acknowledges that the Shareholder is relying upon
such representations and warranties in connection with the matters contemplated
by this Agreement:
(a) Organization. It is a corporation existing under the laws of the
State of Delaware.
(b) Authorization, etc. It has all necessary power, authority,
capacity, consent and right to enter into this Agreement and to
carry out each of its obligations under this Agreement. This
Agreement has been duly executed and delivered by the Purchaser
and constitutes a legal, valid and binding obligation of the
Purchaser enforceable against it in accordance with its terms;
subject, however, to limitations with respect to enforcement
imposed by law in connection with bankruptcy or similar
proceedings, the equitable power of the courts to stay proceedings
before them and the execution of judgments and to the extent that
equitable remedies such as specific performance and injunction are
in the discretion of the court from which they are sought.
(c) Non-Contravention. This Agreement does not (or would not with the
giving of notice, the lapse of time or the happening of any other
event or condition) result in a breach or a violation of, or
conflict with in any material manner, or allow any other person to
exercise any rights under any of the terms or provisions of the
constating documents and/or by-laws of the Purchaser or any
agreement, contract or indenture to which the Purchaser is a party
or by which the Purchaser's property is bound (as applicable), and
will not result in the violation of any law.
(d) No Proceeding Pending. There is no claim, action, lawsuit,
arbitration, mediation or other proceeding pending or threatened
against the Purchaser, which relates to this Agreement or
otherwise materially impairs or could materially impair the
ability of the Purchaser to consummate the transactions
contemplated hereby.
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(e) Tax Election. The issuer of the exchangeable shares in the
Transaction will make an election under subsection 191.2(1) of the
Income Tax Act (Canada) in respect of the exchangeable shares in
the manner and within the time required by such subsection.
ARTICLE 3
COVENANTS OF THE SHAREHOLDER
Section 3.1 Covenants of the Shareholder
(1) The Shareholder hereby agrees that it shall not, from the date hereof
until the termination of this Agreement pursuant to Section 4, except
in accordance with the terms of this Agreement:
(a) grant or agree to grant any proxy or other right to the
Shareholder's Shares, or enter into any voting trust or pooling
agreement or arrangement or enter into or subject any of such
Shares to any other agreement, arrangement, understanding or
commitment, formal or informal, with respect to or relating to the
voting thereof;
(b) directly or indirectly, through any officer, director, employee,
advisor, representative, agent or otherwise (as applicable), make,
solicit, assist, initiate, knowingly encourage, or otherwise
facilitate any inquiries, the submission of proposals or offers
from any other person, corporation, partnership or other business
organization whatsoever regarding a potential competing proposal
for the acquisition of the Shares whether by means of take-over
bid, merger, amalgamation, plan of arrangement, business
combination or otherwise (a "Competing Bid"), participate in any
material discussions or negotiations regarding any Competing Bid,
or otherwise cooperate in any way with, or assist or participate
in, knowingly facilitate or encourage, any effort or attempt by
any other person to do or seek to do any of the foregoing;
(c) option, sell, transfer, dispose of, pledge, encumber, grant a
security interest in or otherwise convey any Shareholder's Shares
or any right or interest therein, or agree to do any of the
foregoing except pursuant to the Transaction;
(d) except as required by applicable law and except for the filing by
the Shareholder of an amendment or amendments to its Schedule 13D
pursuant to the 1934 Act, prior to the public announcement of the
Transaction, directly or indirectly, disclose to any person, firm
or corporation the existence of the terms and conditions of this
Agreement, or any terms or conditions or other information
concerning the Transaction;
(e) exercise any rights of dissent, whether provided under the CBCA or
by judicial, regulatory or other order or decision or otherwise,
in connection with the Transaction; and
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(f) take any action to encourage or assist any other person to do any
of the prohibited acts referred to in foregoing provisions of this
Section 3.1(1).
(2) The Shareholder hereby agrees that it shall, from the date hereof until
the termination of this Agreement pursuant to Section 4, except in
accordance with the terms of this Agreement:
(a) immediately cease any existing discussions or negotiations it is
engaged in with any parties other than the Purchaser with respect
to any Competing Bid;
(b) take all steps as are necessary or advisable to ensure that at the
time of the consummation of the Transaction, the Shareholder's
Shares will be held by the Shareholder or Altius Resources with
good and marketable title thereto, free and clear of any and all
mortgages, liens, charges, restrictions, security interests,
adverse claims, pledges, encumbrances and demands or rights of
others of any nature or kind whatsoever, any shareholders'
agreement, voting trust or similar agreement or any right or
privilege (whether by law, pre-emptive or contractual) capable of
becoming a shareholders' agreement, voting trust or other
agreement affecting the Shareholder's Shares or the ability of
such holder thereof to exercise ownership rights thereto,
including the voting of any such Shares; and
(c) exercise the voting rights attaching to the Shareholder's Shares
and otherwise use the Shareholder's commercially reasonable
efforts in the Shareholder's capacity as a shareholder to oppose
any proposed action by the Company, its shareholders, any of its
subsidiaries or any other person: (i) in respect of any
amalgamation, merger, sale of the Company's or its affiliates' or
associates' assets, take-over bid, plan of arrangement,
reorganization, recapitalization, or other business combination or
similar transaction involving the Company or any of its
subsidiaries other than the Transaction; (ii) which would
reasonably be regarded as being directed towards or likely to
prevent or delay the successful completion of the Transaction,
including without limitation any amendment to the constating
documents of the Company, its subsidiaries or its organizational
structure; or (iii) which would reasonably be expected to result
in a material adverse effect in respect of the Company.
(3) The Shareholder covenants to co-operate with the Purchaser using
reasonable commercial efforts in making all requisite regulatory
filings in respect of the Transaction, other than the filing by the
Shareholder of an amendment or amendments to its Schedule 13D pursuant
to 1934 Act.
(4) Subject to Section 4.1(d), the Shareholder hereby agrees to elect (the
"Election") to receive exchangeable shares (having terms as described
in Schedule "A" attached hereto), to the extent available, of the
Canadian subsidiary of the Purchaser in respect of 100% of the
Shareholder's Shares to be exchanged as part of the Transaction;
provided that, in the event that the value of such all share election
would be equal to or less than 95% of the value of an all cash election
on the final
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date on which an election can be made under the Transaction, the
Shareholder shall not be required to make the Election.
ARTICLE 4
TERMINATION
Section 4.1 Termination
This Agreement may be terminated by notice in writing as follows:
(a) at any time by mutual consent of the Shareholder and the
Purchaser;
(b) by the Shareholder, if the Purchaser has not consummated the
Transaction within 150 days after the date of this Agreement;
provided, however, that if such consummation is delayed by (i) an
injunction or order made by a court or regulatory authority of
competent jurisdiction, or (ii) the Purchaser not having obtained
any regulatory waiver, consent or approval which is necessary to
permit the Purchaser to consummate the Transaction, then, provided
that such injunction or order is being contested or appealed, such
regulatory waiver, consent or approval is being actively sought,
as applicable, this Agreement shall not be terminated by the
Shareholder pursuant to this Section 4.1(b) until the earlier of
(i) 180 days after the date of this Agreement, and (ii) the 20th
business day following the date on which such injunction or order
ceases to be in effect or such waiver, consent or approval is
obtained, as applicable;
(c) by the Shareholder at any time if the Transaction is modified in a
manner that diminishes the value of the consideration that would
be received by the Shareholder under the Transaction as described
on Schedule "A";
(d) by the Shareholder, if a Competing Bid is or has been announced or
made for 100% of the outstanding Shares that provides for
consideration per Share that exceeds the value of the
consideration offered by the Purchaser under the Transaction to
the Shareholder for its Shares, as determined by the Shareholder,
in good faith and acting reasonably, and the Purchaser has not,
within five (5) business days of the provision by the Shareholder
of notice to the Purchaser that the consideration per share
offered by the Competing Bid exceeds the value of the
consideration offered by the Purchaser under the Transaction,
either (i) publicly announced its intention to amend the
Transaction in order to match or exceed the consideration provided
under a Competing Bid or (ii) waived the requirement under section
3.1(4) for the Shareholder to make the Election if and to the
extent that such waiver will permit the Purchaser to make an
election of consideration under the Transaction such that the
consideration provided for its Shares under the Transaction either
matches or exceeds that provided under the Competing Bid (provided
that, if the Competing Bid is in the form of a take-over bid,
tender offer or exchange offer, the exercise of such "matching
right" by the Purchaser must occur not later than such time and
date as the Shareholder
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may reasonably determine would be sufficient to permit it to
deposit its Shares into the Competing Bid prior to the expiry
thereof);
(e) by the Purchaser if the Shareholder has not materially complied
with its covenants to the Purchaser contained herein;
(f) by the Purchaser if any of the representations and warranties of
the Shareholder contained herein is untrue or inaccurate in any
material respect; or
(g) by the Purchaser or the Shareholder if the Arrangement Agreement
is terminated or expires.
ARTICLE 5
GENERAL
Section 5.1 Alternative Transaction
If the Purchaser determines it is necessary or desirable to proceed
with another form of transaction (an "Alternative Transaction") whereby the
Purchaser would acquire following completion of such Alternative Transaction at
least a majority of the Shares outstanding of the Company on economic terms
which, in relation to the Shareholder, are at least equivalent to or better than
those contemplated by the Transaction, the Shareholder shall support the
completion of such Alternative Transaction. If any Alternative Transaction
involves a meeting or meetings of the shareholders of the Company, the
Shareholder shall vote in favour of any matters necessary or ancillary to the
completion of the Alternative Transaction. In the event of any proposed
Alternative Transaction, the references in this Agreement to the Transaction
shall be deemed to be changed to "Alternative Transaction" and all provisions of
this Agreement shall be and shall be deemed to have been made in the context of
the Alternative Transaction.
Section 5.2 Effect of Termination
If this Agreement is terminated as provided for in Article 4, there
shall be no liability or further obligation, on the part of any party hereto;
provided that nothing in this Article 5 shall release the parties to this
Agreement from liability for breach of any representation, warranty or covenant
of this Agreement occurring prior to the termination hereof.
Section 5.3 Disclosure
Except as required by law (including the filing by the Shareholder of
an amendment or amendments to its Schedule 13D pursuant to the 0000 Xxx) or
applicable stock exchange requirements, the Shareholder shall not make any
public announcement or statement with respect to the Transaction or this
Agreement without the prior approval of the Purchaser, such approval not to be
unreasonably withheld or delayed. Moreover, in any event, the Shareholder
agrees, to the extent reasonably practicable (and other than in respect of the
filing of such amendment or amendments), to provide prior notice to the
Purchaser of any
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public announcement relating to the Transaction or this Agreement and agrees, to
the extent reasonably practicable, to consult with the Purchaser prior to
issuing such public announcement. The Shareholder hereby expressly consents to
the Purchaser's disclosure in any public announcement or disclosure that is
required by applicable law or the rules of any stock exchange of the
Shareholder's identity and ownership of the Shareholder's Shares and the nature
of the Shareholder's obligations under this Agreement; provided that the
Purchaser's first public announcement regarding the foregoing matters shall be
subject to the prior consent of the Shareholder acting reasonably and without
unreasonable delay and any subsequent public announcements or disclosure
regarding the same shall substantially conform to the contents of the first
public announcement.
Section 5.4 Further Assurances
Each of the parties hereto shall, from time to time, execute and
deliver all such further documents and instruments and do all acts and things as
the other party may, either before or after the completion of the transaction,
reasonably require to effectively carry out or better evidence or perfect the
full intent and meaning of this Agreement.
Section 5.5 Assignment
The Purchaser may assign all or any part of its rights under this
Agreement to a subsidiary or affiliate of the Purchaser provided that such
assignee shall be party to the Transaction and the Purchaser shall remain liable
for its obligations hereunder. This Agreement shall not otherwise be assignable
by any party without the express prior written consent of the other party.
Section 5.6 Time
Time shall be of the essence of this Agreement.
Section 5.7 Currency
All sums of money referred to in this Agreement shall mean Canadian
funds.
Section 5.8 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the laws of Canada applicable therein.
The parties hereto irrevocably submit to the non-exclusive jurisdiction of the
courts of the Province of Ontario in respect of the interpretation and
enforcement of this Agreement.
Section 5.9 Entire Agreement
This Agreement constitutes and comprises the entire agreement and
understanding between the parties hereto with regard to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, between the parties with respect to the subject matter hereof.
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Section 5.10 Amendment
This Agreement may not be modified, amended, altered or supplemented
except upon the execution and delivery of a written agreement executed by each
of the parties hereto.
Section 5.11 Specific Performance and Injunctions
The Shareholder recognizes and acknowledges that this Agreement is an
integral part of the transactions contemplated in the Transaction and that the
Purchaser would not contemplate undertaking the Transaction unless this
Agreement was executed, and that a breach by the Shareholder of any covenants or
other commitments or obligations contained in the Agreement will cause the
Purchaser to sustain injury for which it would not have an adequate remedy at
Law for money damages. Therefore, each of the parties hereto agrees that, in the
event of such breach, the Purchaser shall be entitled to the remedy of specific
performance of such obligation and preliminary and permanent injunctive and
other equitable relief in addition to any other remedy to which it may be
entitled, at law or in equity, and the Shareholder further agrees to waive any
requirement for the security or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief. Such remedies will
not be exclusive remedies for any breach of this Agreement but will be in
addition to any other remedy to which the Purchaser may be entitled, at law or
in equity.
Section 5.12 Shares
References to "Shares" (including the "Shareholder's Shares") include
any shares or securities into which the Shares of the Company may be
reclassified, subdivided, consolidated or converted and any rights and benefits
arising therefrom, including any distributions of securities which may be
declared in respect of the Shares (other than permitted distributions). For the
avoidance of doubt, the Shareholder's Shares shall include all Shares
subsequently acquired by the Shareholder or Altius Resources.
Section 5.13 Headings, etc.
The division of this Agreement into Articles and sections and the
insertion of headings are for convenient reference only and do not affect its
interpretation.
Section 5.14 Notices
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person or transmitted by
telecopy or similar means of recorded electronic communication addressed as
follows:
(i) if to the Shareholder:
Altius Minerals Corporation
00 Xxxxxxxx Xxxx
Xxxxx 000, Xxxxxxxx Xxxxxxxx Xxxxxx
Xx. Xxxx'x, Xxxxxxxxxxxx X0X 0X0
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Fax No: (000) 000-0000
Attention: Xxxxx Xxxxxx, Chief Executive Officer
with a copy to (which shall not constitute notice to the Shareholder):
Stikeman Elliott LLP
0000 Xxxxxxxx Xxxxx Xxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Fax No: (000) 000-0000
Attention: Mihkel Xxxxx and Xxxx Xxxxxxx
(ii) if to the Purchaser:
Royal Gold, Inc.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Fax No: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx, Vice President and General Counsel
with a copy to (which shall not constitute notice to the Purchaser):
Xxxxx & Xxxxxxx L.L.P.
0000 Xxxxxxxxxxx Xx., Xxx. 0000
Xxxxxx, Xxxxxxxx 00000
Fax No: (000) 000-0000
Attention: Xxxx Xxxxxx, Esq.
XxXxxxxx Xxxxxxxx XXX
Xxxxx 0000, Xxxxxxx Xxxxxxxx Xxxx Xxxxx
Xxxxxxx-Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Fax No: (000) 000-0000
Attention: Xxxxxx Xxx
Any such notice or other communication shall be deemed to have been given and
received on the day on which it was delivered or transmitted (or, if such day is
not a business day, on the next following business day) provided that it is
delivered or transmitted during normal business hours, failing which it shall be
deemed to have been given and received on the next business day. Any party may
at any time change its address for service from time to time by giving notice to
the other parties in accordance with this Section 5.14.
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Section 5.15 Severability
If any term or other provision of this Agreement is determined to be
invalid, illegal or incapable of being enforced by any rule of law, 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 hereto. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.
Section 5.16 Benefit of the Agreement
This Agreement shall enure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties hereto.
Section 5.17 Expenses
Each of the parties shall bear their own legal, financial advisory and
accounting costs and expenses incurred in connection with the preparation,
execution and delivery of this Agreement.
Section 5.18 Counterparts
This Agreement may be delivered by facsimile and executed in
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute one and the same instrument, and it
shall not be necessary in making proof of this Agreement to produce more than
one counterpart.
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EXECUTION COPY
IN WITNESS WHEREOF the parties have executed this Agreement as of the
date first written above.
ROYAL GOLD, INC.
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
ALTIUS MINERALS CORPORATION
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
SCHEDULE "A"
TERMS OF THE
ARRANGEMENT AGREEMENT
Transaction Structure: Plan of Arrangement
Price Per Share: C$7.45 in cash or 0.1385 of a
Purchaser share, assuming 100,890,856 fully
diluted shares. Shareholders could elect
either cash or Purchaser shares as
consideration, or a combination of both,
subject to a maximum aggregate cap of US$350
million in cash and a maximum number of
7,750,000 Purchaser shares. However, in a
scenario where, in the aggregate, Company
shareholders elect to receive more than
US$316 million in cash, the number of
Purchaser shares will be reduced on a
pro-rata basis. Assuming the maximum share
election, this offer consists of C$3.32 in
cash and 0.0768 shares of Purchaser for each
fully diluted in-the-money share of the
Company. Assuming the maximum cash election,
this offer consists of C$3.67 in cash and
0.0702 shares of Purchaser for each fully
diluted in-the-money share of the Company.
The consideration figures assume an exchange
rate and Purchaser stock price as of December
14, 2009.
Canadian resident shareholders will be
entitled to elect to receive, in place of
Purchaser shares but in the same ratios,
exchangeable shares to be issued by a
Canadian incorporated subsidiary of the
Purchaser having terms and conditions
customary for such shares and consistent in
all material respects with the drafts of the
exchangeable share documentation reviewed by
the Shareholder prior to its execution of the
Agreement to which this term sheet is
attached as a schedule.
Any shareholder who receives exchangeable
shares will be entitled to enter into a joint
election under section 85 of the Income Tax
Act (Canada) (and the comparable provision of
any applicable provincial income tax
legislation) with the issuer of the
exchangeable shares so that the disposition
of the Shares pursuant to the plan of
arrangement can occur on a tax-deferred basis
to the maximum extent possible for Canadian
federal (and applicable provincial) income
tax purposes.
Listing of Purchaser Shares: NASDAQ; TSX
Listing of Exchangeable Shares: TSX
Outside Date: 120 days
Closing Conditions: IRC stockholder vote; customary conditions
for transaction of this type, including no
injunctions; accuracy of representations and
warranties; covenants performed; no material
Adverse Change; IRC Debenture not in default.
Financing: No Financing condition. Commitment Letter for
additional $100 million term loan from HSBC.
Diligence: Complete; no condition
Regulatory Approvals: None anticipated
No Shop/Fiduciary Out: Customary non-solicitation; Fiduciary out for
superior proposal; 5 day right to match.
Break Fee: $32 million; expense reimbursement for "naked
no vote" up to $5 million
Stockholder Vote: IRC: 2/3 of those present at the meeting. No
Royal stockholder vote required.
Lock-ups: All officers and directors
