Andean Resources Limited, in the matter of Andean Resources Limited (No 2)
[2010] FCA 1397
•8 December 2010
FEDERAL COURT OF AUSTRALIA
Andean Resources Limited, in the matter of Andean Resources Limited (No 2) [2010] FCA 1397
Citation: Andean Resources Limited, in the matter of Andean Resources Limited (No 2) [2010] FCA 1397 Parties: ANDEAN RESOURCES LIMITED (ACN 064 494 319) File number(s): NSD 1359 of 2010 Judge: JAGOT J Date of judgment: 8 December 2010 Catchwords: CORPORATIONS – scheme of arrangement – second court hearing Legislation: Corporations Act 2001 (Cth)
Corporations Regulations 2001 (Cth)Date of hearing: 8 December 2010 Place: Sydney Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 18 Counsel for the Plaintiff: Mr T Bathurst QC Solicitor for the Plaintiff: Corrs Chambers Westgarth Lawyers Solicitor for Goldcorp Inc: Mr R Forbes of Mallesons Stephen Jaques
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1359 of 2010
IN THE MATTER OF ANDEAN RESOURCES LIMITED (ACN 064 494 319)
BETWEEN: ANDEAN RESOURCES LIMITED (ACN 064 494 319)
Plaintiff
JUDGE:
JAGOT J
DATE OF ORDER:
8 DECEMBER 2010
WHERE MADE:
SYDNEY
THE COURT ORDERS THAT:
1Pursuant to subsection 411(4)(b) of the Corporations Act 2001 (Cth) (Corporations Act), the scheme of arrangement between Andean Resources Limited ACN 064 494 319 (Andean) and the holders of ordinary shares in Andean in the form annexed hereto and marked “A” be approved.
2Pursuant to subsection 411(12) of the Corporations Act, Andean be exempted from compliance with subsection 411(11) of the Corporations Act in relation to Order 1.
3These Orders be entered forthwith.
THE COURT NOTES THAT:
4Order 1 above will be relied upon for the purposes of section 3(a)(10) of the United States Securities Act of 1933.
Annexure A
Scheme of arrangement
pursuant to section 411 of the Corporations Act
between
Andean Resources Limited ABN 66 064 494 319 (“Target”)and
Each person registered as a holder of fully paid ordinary shares in the Target as at the Record Date
1Definitions and interpretation
1.1Definitions
In this Scheme:
Aggregate Cash Consideration means the aggregate Cash Consideration payable to Scheme Participants in accordance with this Scheme.
ASIC means Australian Securities and Investments Commission.
ASX means ASX Limited or the Australian Securities Exchange, as appropriate.
Business Day means a business day as defined in the Listing Rules.
Cash Consideration means C$6.50 for each Scheme Share.
Corporations Act means the Corporations Act 2001 (Cwlth).
Court means a court of competent jurisdiction under the Corporations Act.
Deed Poll means the deed poll dated 6 October 2010 executed by Goldcorp in favour of the Scheme Participants.
Effective means the coming into effect, pursuant to section 411(10) of the Corporations Act, of the order of the Court made under section 411(4)(b) in relation to the Scheme but in any event at no time before an office copy of the order of the Court is lodged with ASIC.
Effective Date means the date on which the Scheme becomes Effective.
Election means in respect of a Scheme Participant, an election (or deemed election) to receive the Scheme Consideration as Cash Consideration, Share Consideration, or a combination of both in accordance with clause 4.2.Election Form means an election form for the purposes of the Target Shareholders making an election under clause 4.2.
Election Time means the Record Date, or such other time as Goldcorp and Target agree in writing.
Eligible Holder means a beneficial owner of Scheme Shares immediately prior to the Effective Date who is:(a)a resident of Canada for purposes of the Tax Act (other than a Tax Exempt person); or
(b)a partnership any member of which is a resident of Canada for the purposes of the Tax Act (other than a Tax Exempt person).
Encumbrance includes mortgage, lien, charge, pledge, assignment by way of security, security interest and interests of third parties of any kind whether legal or otherwise.
End Date means 15 March 2011 or such other date as is agreed by Goldcorp and the Target.
Goldcorp means Goldcorp Inc of Park Place, Suite 3400 - 666 Burrard Street, Vancouver, British Columbia, V6C 2X8 Canada.
Goldcorp Constitution means the articles or by-laws or other constituent documents of Goldcorp.
Implementation Date means the fifth Business Day following the Record Date or such other date as the Target and Goldcorp agree with consent of ASX if necessary.
Ineligible Foreign Shareholder means a Target Shareholder:(a)who is (or is acting on behalf of) a citizen or resident of a jurisdiction other than residents of:
(i)Australia and its external territories;
(ii)the United States of America;
(iii)Canada; or
(iv)New Zealand; or
(b)whose address shown in the Register is a place outside:
(i)Australia and its external territories;
(ii)the United States of America;
(iii)Canada; or
(iv)New Zealand,
or who is acting on behalf of such a person,
unless Goldcorp determines that:
(c)it is lawful and not unduly onerous or unduly impracticable to issue that Target Shareholder with New Goldcorp Shares pursuant to the Scheme; and
(d)it is lawful for that Target Shareholder to participate in the Scheme by the law of the relevant place.
Listing Rules means the Listing Rules of ASX.
Maximum Cash Consideration means C$1,000,000,000.
Merger Implementation Agreement means the merger implementation agreement dated 3 September 2010 between the Target and Goldcorp.
New Goldcorp Share means a common share in the capital of Goldcorp to be issued under the Scheme.
NYSE means the New York Stock Exchange.
Nominee means a nominee appointed by Goldcorp in accordance with clause 4.6 of the Merger Implementation Agreement.
Option means an option to acquire a Target Share.
Record Date means 7.00pm the fifth Business Day following the Effective Date or such other date as the Target and Goldcorp agree with consent of ASX if necessary.
Register means the register of shareholders maintained by the Target in accordance with the Corporations Act.
Registered Address means, in relation to a Scheme Participant, the address shown in the Register.Regulatory Authority includes:
(a)ASX;
(b)ASIC;
(c)the TSX;
(d)the Ontario Securities Commission;
(e)a government or governmental, semi-governmental or judicial entity or authority;
(f)a minister, department, office, commission, delegate, instrumentality, agency, board, authority or organisation of any government;
(g)the Commissioner of Competition under the Competition Act (Canada);
(h)the National Commission for the Defence of Competition (CNDC) of Argentina;
(i)any regulatory organisation established under statute, including the Argentine Competition Act; and
(j)the United States Securities and Exchange Commission.
Scheme means this scheme of arrangement together with any amendment or modification made pursuant to section 411(6) of the Corporations Act.
Scheme Consideration means, in respect of each Scheme Share, Cash Consideration or Share Consideration.
Scheme Meeting means the meeting to be convened by the Court at which the Target Shareholders will vote on the Scheme.
Scheme Order means the order of the Court under section 411(4)(b) of the Corporations Act approving the Scheme.
Scheme Participant means each person who is a Target Shareholder as at the Record Date.
Scheme Share means a Target Share held by a Scheme Participant.
Second Court Date means the day on which the Court makes an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme.
Second Court Hearing means the hearing of the application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving this Scheme.
Share Consideration means 0.14 of a New Goldcorp Share for each Scheme Share.Tax Act means the Income Tax Act (Canada) and the regulations thereunder, as amended from time to time.
Tax Exempt person means a person who is exempt from tax under Part I of the Tax Act.Target Share means an ordinary fully paid share in the capital of the Target.
Target Shareholder means each person registered in the Register as a holder of the Target Shares.
TSX means the Toronto Stock Exchange.1.2Reference to certain general terms
Unless the contrary intention appears, a reference in this Scheme to:
(a)(variations or replacement) a document (including this agreement) includes any variation or replacement of it;
(b)(clauses, annexures and schedules) a clause, annexure or schedule is a reference to a clause in or annexure or schedule to this agreement;
(c)(reference to statutes) a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them;
(d)(law) law means common law, principles of equity, and laws made by parliament (and laws made by parliament include State, Territory and Commonwealth laws and regulations and other instruments under them, and consolidations, amendments, re-enactments or replacements of any of them);
(e)(singular includes plural) the singular includes the plural and vice versa;
(f)(person) the word “person” includes an individual, a firm, a body corporate, a partnership, a joint venture, an unincorporated body or association, or any Regulatory Authority;
(g)(executors, administrators, successors) a particular person includes a reference to the person’s executors, administrators, successors, substitutes (including persons taking by novation) and assigns;
(h)(Australian dollars) Australian dollars or A$ is a reference to the lawful currency of Australia;
(i)(Canadian dollars) Canadian dollars or C$ is a reference to the lawful currency of Canada;
(j)(calculation of time) a period of time dating from a given day or the day of an act or event, is to be calculated exclusive of that day;
(k)(reference to a day) a day is to be interpreted as the period of time commencing at midnight and ending 24 hours later;
(l)(meaning not limited) the words “include”, “including”, “for example” or “such as” when introducing an example, do not limit the meaning of the words to which the example relates to that example or examples of a similar kind; and
(m)(time of day) time is a reference to Sydney, New South Wales time.
1.3Headings
Headings (including those in brackets at the beginning of paragraphs) are for convenience only and do not affect the interpretation of this Scheme.
2Preliminary
2.1Target
(a)The Target is a public company incorporated in Australia and registered in Western Australia and is a company limited by shares.
(b)The Target is admitted to the official list of the ASX and the TSX and the Target Shares are officially quoted on the respective stock markets conducted by ASX and TSX.
(c)As at 1 November 2010 the Target’s only issued securities are:
(i)548,450,367 Target Shares; and
(ii)3,223,440 Options, which are not quoted on any stock exchange.
As at 1 November 2010, other than as set out below, the Target is under no obligation to issue further Target Shares before the Implementation Date:
(d)2,550,000 Target Shares to be issued to three Target employees and consultants if the Options are exercised; and
(e)approximately 422,221 Target Shares which are intended to be issued in relation to vested but unissued Target Shares which have been granted to 17 Target employees and consultants.
2.2Goldcorp
Goldcorp is a public company incorporated in the Province of Ontario, Canada and is a corporation. Its shares are officially quoted on the TSX and the New York Stock Exchange.
2.3Merger Implementation Agreement
The Target and Goldcorp have entered into the Merger Implementation Agreement under which, among other things:
(a)the Target agreed to propose the Scheme to Target Shareholders; and
(b)the Target and Goldcorp agreed to implement the Scheme on the terms of the Merger Implementation Agreement.
2.4Deed Poll
Goldcorp has executed the Deed Poll by which it has covenanted to the Scheme Participants to undertake the acts attributed to it in this Scheme, including to provide the Scheme Consideration.
3Conditions to this Scheme
3.1Conditions precedent
The conditions precedent to this Scheme are:
(a)neither the Merger Implementation Agreement or Deed Poll is terminated before the Court makes the Scheme Order;
(b)all the conditions precedent in schedule 3 of the Merger Implementation Agreement having been satisfied or waived (other than the condition precedent in item 1(b) which cannot be waived) in accordance with the terms of the Merger Implementation Agreement by the time set out in the Merger Implementation Agreement; and
(c)the Scheme Order is lodged with ASIC.
3.2Conditions precedent and operation of clause 4
The satisfaction or waiver in accordance with the Merger Implementation Agreement of each condition in clause 3.1 (other than the condition in clause 3.1(c)) at the same time as, or before, the Court making the Scheme Order is a condition precedent to this Scheme taking effect.
3.3Certificate
The Target and Goldcorp must provide to the Court on the Second Court Date a certificate, or such other evidence as the Court requests, confirming (in respect of matters within their knowledge) whether or not the conditions precedent to this Scheme in clause 3.1 (other than the condition precedent in item 4 of schedule 3 to the Merger Implementation Agreement and clause 3.1(c)) are satisfied or waived. In the absence of manifest error, the certificate provides conclusive evidence that those conditions precedent have been satisfied.
3.4Effective Date
Subject to clause 3.5, this Scheme takes effect for all purposes on the Effective Date.
3.5End Date
The Scheme will lapse and be of no further force or effect if the Effective Date does not occur on or before the End Date.
4Implementation of the Scheme
4.1Transfer and registration of the Scheme Shares
On the Implementation Date, subject to the provision of the Scheme Consideration in accordance with clause 4.3, the Scheme Shares, together with all rights and entitlements attaching to the Scheme Shares as at the Implementation Date, must be transferred to Goldcorp without the need for any further act by any Scheme Participant (other than acts performed by the Target as attorney and agent for Scheme Participants under clause 6.3) by:
(a)the Target delivering to Goldcorp duly completed and executed share transfer forms (or a master share transfer form) to transfer all of the Scheme Shares to Goldcorp;
(b)Goldcorp duly executing the share transfer forms (or a master share transfer form) to transfer all of the Scheme Shares to Goldcorp and delivering it to the Target for registration; and
(c)immediately after receipt of the duly executed share transfer forms (or a master share transfer form) in respect of the Scheme Shares, the Target entering the name of Goldcorp in the Register in respect of all Scheme Shares.
4.2Election
(a)Subject to adjustments under clause 4.6, each Target Shareholder is entitled to elect the proportion of the Scheme Shares holding in respect of which that Target Shareholder wishes to receive Cash Consideration or Share Consideration by completing the Election Form and returning it to the address specified in the Election Form so that it is received by the Election Time.
(b)An election under clause 4.2(a) must be made in accordance with the terms and conditions on the Election Form.
(c)If a valid election is not made by a Target Shareholder prior to the Election Time, then that Target Shareholder will be deemed to have elected to receive the Share Consideration in respect of all of its Target Shares.
(d)An election which is not made or deemed to have been made in accordance with this clause 4.2 will not be a valid election for the purpose of this Scheme and will not be recognised by the Target and Goldcorp for any purpose.
(e)The Target may, with the agreement of Goldcorp, settle as it thinks fit any difficulty, matter of interpretation or dispute which may arise in connection with determining the validity of any election, and any such decision will be conclusive and binding on the Target, Goldcorp and the relevant Target Shareholder.
4.3Consideration under this Scheme
On the Implementation Date, in consideration for the transfer of the Scheme Shares to Goldcorp, subject to clauses 4.7, 4.8 and 4.11, Goldcorp must provide Cash Consideration or Share Consideration (at the election of the Scheme Participant in accordance with clause 4.2 and subject to adjustments under clause 4.6) to each Scheme Participant in respect of their Scheme Shares.
4.4Satisfaction of obligation to pay Cash Consideration
The obligation of Goldcorp to provide Cash Consideration pursuant to clause 4.3 will be satisfied by:
(a)before 11.00am on the Implementation Date, Goldcorp depositing an amount equal to the Aggregate Cash Consideration, in cleared funds in one or more trust accounts opened and operated by the Target (or on its behalf) for that purpose, to be held on trust for the Scheme Participants, except that any interest on the amount deposited (less bank fees) shall be to Goldcorp’s account; and
(b)on the Implementation Date, (subject to Goldcorp having complied with clause 4.4(a)) the Target sending to each Scheme Participant by pre-paid airmail post at their Registered Address a cheque drawn on a bank considered appropriate by the Target for Cash Consideration payable to that Scheme Participant in accordance with this Scheme. The cheques sent by the Target under this clause may be drawn, at the discretion of the Target, in Canadian dollars, in Australian dollars or in the local currency of the country in which the relevant Scheme Participant’s Registered Address appeared on the Register. The Target is authorised to effect any conversion of the Cash Consideration in such manner as it deems appropriate (acting reasonably) and to deduct any costs, charges or expenses associated with such conversion from the amount paid to the relevant Scheme Participant. The Target and Goldcorp must deduct and withhold from consideration, dividend or other distributions otherwise payable to any holder of Scheme Shares or Goldcorp Shares or any other amount payable to any person as a consequence of this Scheme, such amounts as Goldcorp or the Target determines, acting reasonably, are required be deducted and withheld with respect to such payment under any applicable law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes under this agreement as having been paid to the person in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing agency.
4.5Satisfaction of obligation to provide Share Consideration
Subject to clause 4.7, the obligation of Goldcorp to provide the Share Consideration pursuant to clause 4.3 will be satisfied by Goldcorp:
(a)on the Implementation Date, entering the name of each Scheme Participant who is entitled to receive Share Consideration under this Scheme on the register of members of Goldcorp in respect of those New Goldcorp Shares comprised in the Scheme Consideration to be provided to Scheme Participants in accordance with this Scheme; and
(b)as soon as practicable after the Implementation Date, sending to each Scheme Participant who has been registered as a holder of the New Goldcorp Shares in accordance with this Scheme by pre-paid airmail post to each to their Registered Address a share certificate or holding statement (or equivalent document) for those New Goldcorp Shares.
4.6Adjustment of Scheme Consideration
(a)Nothing in this Scheme requires Goldcorp to pay to the Scheme Participants, in aggregate, more than the Maximum Cash Consideration.
(b)If the aggregate number of the Scheme Shares in respect of which all of the Scheme Participants validly elected to receive Cash Consideration when multiplied by the Cash Consideration exceeds the Maximum Cash Consideration, each Scheme Participant:
(i)will only be entitled to receive Cash Consideration in respect of that number of Scheme Shares (“SS”) as calculated in accordance with the following formula (rounded down to the nearest whole number):
where:“A” means the number of the Scheme Shares in respect of which a Scheme Participant validly elected to receive Cash Consideration; and
“B” means the aggregate number of the Scheme Shares in respect of which all of the Scheme Participants validly elected to receive Cash Consideration multiplied by the Cash Consideration; and
(ii)will be entitled to receive Share Consideration for the balance of their Scheme Shares.
4.7Ineligible Foreign Shareholders
(a)Goldcorp is under no obligation to issue and allot New Goldcorp Shares comprising the Scheme Consideration to any Ineligible Foreign Shareholder.
(b)In the case of each Ineligible Foreign Shareholder, Goldcorp must issue and allot the New Goldcorp Shares to which the Scheme Participant would have been entitled (were they not an Ineligible Foreign Shareholder) to the Nominee, and procure that the Nominee:
(i)as soon as practicable (and in any event within 20 Business Days after the Implementation Date) in the ordinary course of trading on the TSX, sells those New Goldcorp Shares; and
(ii)pay, subject to clause 4.10, to each of the Ineligible Foreign Shareholders an amount equal to the average net proceeds of sale rounded down to the nearest cent (after deduction of any applicable brokerage, taxes and charges) of all New Goldcorp Shares sold under this clause multiplied by the number of New Goldcorp Shares to which that Ineligible Foreign Shareholder would have been entitled but for clause 4.7(a).
(c)Payment under clause 4.7(b) is to be made by the Nominee by sending to each Ineligible Foreign Shareholders by pre-paid airmail post at their Registered Address a cheque drawn on a bank considered appropriate by the Nominee, at the discretion of the Target, in Canadian dollars, in Australian dollars or in the local currency of the country in which the relevant Ineligible Foreign Shareholder’s Registered Address appeared on the Register. The Nominee is authorised to effect any conversion of the proceeds of sale in such manner as it deems appropriate (acting reasonably) and to deduct any costs, charges or expenses associated with such conversion from the amount paid to the relevant Ineligible Foreign Shareholders.
(d)Payments to Ineligible Foreign Shareholders under this clause 4.7 will be in full satisfaction of the Ineligible Foreign Shareholder’s right to receive New Goldcorp Shares under clause 4.3.
4.8Fractional entitlements
(a)If the number of the Scheme Shares held by a Scheme Participant is such that the aggregate entitlement of that Scheme Participant to New Goldcorp Shares is not a whole number, then the entitlement in each case must be rounded up or down to the nearest whole number, with fractions of 0.5 being rounded up.
(b)If the Target considers that a Target shareholding may have been split up to result in an increased number of fractional entitlements and therefore an increased number of New Goldcorp Shares or an aggregate amount of Cash Consideration, the Target must provide the relevant details of the relevant shareholdings to Goldcorp and Goldcorp may aggregate the relevant shareholdings for the purpose of determining the entitlement and pay the additional Cash Consideration or issue the additional New Goldcorp Share to whichever Scheme Participant it considers appropriate.
4.9New Goldcorp Shares to rank equally
New Goldcorp Shares will:
(a)rank equally in all respect with all then issued and outstanding common shares in Goldcorp;
(b)be duly and validly issued; and
(c)be fully paid.
4.10Joint holders
In the case of Scheme Shares held in joint names:
(a)any cheque required to be paid to the Scheme Participants by Goldcorp, the Target or the Nominee must be payable to the joint holders and be forwarded to the holder whose name appears first in the Register as at the Record Date; and
(b)share certificates or holding statements (or equivalent documents) for New Goldcorp Shares must be issued in the names of the joint holders and sent to the holder whose name appears first in the Register as at the Record Date.
4.11Payment of Scheme Consideration to related bodies corporate
Nothing in this Scheme requires Goldcorp to provide Scheme Consideration to a Scheme Participant that is Goldcorp, a related body corporate of Goldcorp, or a person who holds Scheme Shares on behalf of or for the benefit of Goldcorp or related body corporate of Goldcorp.
5Dealings in Scheme Shares
5.1Entitlement to participate
Every Target Shareholder entered on the Register as a holder of a Target Share is entitled to participate in this Scheme.
5.2Recognised dealings
To establish the identity of the Scheme Participants, dealings in Scheme Shares will only be recognised if:
(a)in the case of dealings of the type to be effected using CHESS, the transferee is registered in the Register as the holder of the relevant Scheme Shares on or before the Record Date; and
(b)in all other cases, registrable transmission applications or transfers in registrable form in respect of those dealings are received on or before the Record Date at the place where the Register is kept.
5.3Register
(a)The Target must register any registrable transmission applications or transfers of the Scheme Shares received in accordance with clause 5.2(b) on or before the Record Date.
(b)If the Scheme becomes Effective, a holder of Scheme Shares (and any person claiming through that holder) must not dispose of or purport or agree to dispose of any Scheme Shares or any interest in them after the Effective Date.
(c)The Target must not accept for registration or recognise for any purpose any transmission, application or transfer in respect of Scheme Shares received after the Record Date (except a transfer to Goldcorp pursuant to this Scheme and any subsequent transfer by Goldcorp or its successors in title).
(d)For the purpose of determining entitlements to the Scheme Consideration, the Target must maintain the Register in accordance with the provisions of this clause 5 until the Scheme Consideration has been provided to the Scheme Participants. The Register in this form will solely determine entitlements to the Scheme Consideration.
(e)Any statements of holding (or any share certificate or other document of title) in respect of Scheme Shares will cease to have effect after the Record Date as documents of title in respect of those shares (other than statements of holding, certificates or documents of title in favour of Goldcorp and its successors in title). After the Record Date, each entry current on the Register as the Record Date (other than entries in respect of Goldcorp or its successors in title) will cease to have effect except as evidence of entitlement to the Scheme Consideration.
(f)Within three Business Days after the Record Date the Target must procure that details of:
(i)the names, Registered Addresses and holdings of Scheme Shares for each Scheme Participant, as shown in the Register at the Record Date,
(ii)the Election (if any) of each Scheme Participant; and
(iii)the names and Registered Addresses of every Ineligible Foreign Shareholder at the Record Date,
are available to Goldcorp in such form as Goldcorp reasonably requires.
5.4Quotation of the Target Shares
(a)It is expected that trading in Target Shares on ASX will be suspended no later than the Business Day following the day on which Goldcorp notifies ASX of granting of the Scheme Order. It is expected that trading in the Target Shares on the TSX will be suspended on the third day following the day on which Goldcorp notifies the TSX of the making of the Scheme Order.
(b)On the first Business Day after the Implementation Date, the Target will apply for termination of the official quotation of the Target Shares on ASX.
(c)Immediately following the Scheme becoming Effective, Goldcorp will notify the TSX of this event and request the delisting of the Target Shares from the TSX.
5.5Quotation of New Goldcorp Shares
Goldcorp will apply for the equivalent of the official quotation of the New Goldcorp Shares on the TSX and the NYSE and will ensure that such shares are listed for trading on the NYSE and TSX as soon as practicable following the Effective Date in accordance with the policies of such exchanges.
6General provisions
6.1Lodgement of Scheme Order with ASIC
The Target must lodge with ASIC an office copy of the Scheme Order by 5.00pm on the first Business Day after the day on which the Court approves the Scheme at the Second Court Hearing.
6.2Variations, alterations and conditions
The Target may, with the prior consent of Goldcorp, by its counsel or solicitor consent on behalf of all persons concerned to any variations, alterations or conditions to the Scheme which the Court thinks fit to impose.
6.3Power of attorney
Upon the Scheme becoming Effective, each Scheme Participant, without the need for any further act by any Scheme Participant, irrevocably appoints the Target and each of its directors and secretaries (each of them severally and any two or more of them jointly) as its attorney and agent for the purpose of executing any document necessary or expedient to give effect to this Scheme, including \ a proper instrument of transfer of their Scheme Shares which may be a master transfer of all of the Scheme Shares.
6.4Title and rights in the Target Shares
On and from the Implementation Date, Goldcorp will be beneficially entitled to the Scheme Shares transferred to it under the Scheme, pending registration by the Target of Goldcorp in the Register as the holder of those Scheme Shares.
6.5Scheme Participants’ agreements
(a)The Scheme Participants agree to the transfer of their Scheme Shares to Goldcorp in accordance with this Scheme.
(b)The Scheme Participants must accept the New Goldcorp Shares issued by way of Scheme Consideration and agree to be members of Goldcorp and be bound by Goldcorp Constitution. This clause does not apply to Ineligible Foreign Shareholders.
6.6Status of Scheme Shares
(a)To the extent permitted by law, the Scheme Shares transferred to Goldcorp under this Scheme must be transferred free from all Encumbrances.
(b)Each Scheme Participant is deemed to have warranted to Goldcorp that:
(i)all their Scheme Shares (including any rights and entitlements attaching to those shares) that are transferred to Goldcorp under this Scheme are, at the date of transfer, fully paid and free from all Encumbrances and restrictions on transfers of any kind; and
(ii)they have full power and capacity to sell and to transfer their Scheme Shares (including any rights and entitlements attaching to those shares) to Goldcorp under this Scheme.
6.7Further action by the Target
The Target will execute all documents and do all things necessary or expedient to implement, and perform its obligations under, this Scheme.
6.8Authority and acknowledgement
Each of the Scheme Participants:
(a)consents to the Target doing all things necessary or expedient for or incidental to the implementation of this Scheme;
(b)acknowledges that this Scheme binds the Target and all Scheme Participants (including those who do not attend the Scheme Meeting or do not vote at that meeting or vote against the Scheme at that Meeting); and
(c)acknowledges that, to the extent of inconsistency between this Scheme and Target’s constitution, this Scheme overrides Target’s constitution.
6.9Notices
Where a notice, transfer, transmission application or other communication referred to in this Scheme is sent by post to the Target, it is not deemed to be received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at the Target’s registered office or at the Target’s share registry.
6.10Governing law
This Scheme is governed by the law in force in Western Australia.
6.11Fees and charges
All filing, application or similar fees due in relation to this Scheme must be paid in accordance with the Merger Implementation Agreement.
6.12No liability when acting in good faith
None of the Target or Goldcorp nor any officer of any of those companies is liable for anything done or omitted to be done in the performance of this Scheme in good faith.
6.13Instructions to Target
Except for a Scheme Shareholder’s tax file number, any binding instruction or notification between the Scheme Shareholder and the Target relating to the Scheme Shares or a Scheme Shareholder’s status as a Target Shareholder (including, any instructions relating to payment of dividends, or to communications from the Target) will, from the Implementation Date, be deemed, by reason of the Scheme, to be a similarly binding instruction or notification to, and accepted by, Goldcorp in respect of the New Goldcorp Shares transferred to Scheme Shareholders until that instruction or notification is revoked or amended in writing addressed to Goldcorp at its share registry.
6.14Characterisation of Merger for US Tax Purposes
(a)The parties intend to adopt this Scheme as a plan of reorganisation for purposes of the United States Internal Revenue Code of 1986, as amended (the "Code") and applicable regulations thereunder and to treat the transactions contemplated by this Scheme as a reorganisation in accordance with the provisions of Section 368(a) of the Code for United States federal income tax purposes.
(b)Notwithstanding the foregoing, the Target makes no representation or warranty to any other party, including any Scheme Participant or other holder of securities of the Target or Goldcorp (including, without limitation, stock options, warrants or other similar rights) regarding the United States tax treatment of such transactions, including but not limited to whether such transactions will qualify as a tax deferred plan of reorganisation for purposes of United States federal, state or local income tax.
(c)The Scheme Participants confirm they are relying solely on their own tax advisors in connection with this Scheme.
6.15Canadian tax election
(a)An Eligible Holder whose Scheme Shares are exchanged for New Goldcorp Shares pursuant to this Scheme is entitled to make a joint income tax election, pursuant to section 85 of the Tax Act (and any analogous provision of provincial income tax law) (a “Section 85 Election”) with respect to the exchange by providing two signed copies of the necessary joint election forms to an appointed representative, as directed by Goldcorp, within 90 days after the Effective Date, duly completed with the details of the number of Scheme Shares transferred and the applicable agreed amounts for the purposes of such joint elections.
(b)Goldcorp shall, within 90 days after receiving the completed joint election forms from an Eligible Holder, and subject to such joint election forms being correct and complete and in compliance with requirements imposed under the Tax Act (or applicable provincial income tax law), sign and return them to the Eligible Holder for filing with the Canada Revenue Authority (or the applicable provincial tax authority).
(c)Neither Goldcorp, the Target nor any successor corporation shall be responsible for the proper completion of any joint election form nor, except for the obligation to sign and return duly completed joint election forms which are received within 90 days of the Effective Date, for any taxes, interest or penalties resulting from the failure of an Eligible Holder to properly complete or file such joint election forms in the form and manner and within the time prescribed by the Tax Act (or any applicable provincial legislation). In its sole discretion, Goldcorp or any successor corporation may choose to sign and return a joint election form received by it more than 90 days following the Effective Date, but will have no obligation to do so.
6.16Further transactions
(a)The Target , Goldcorp and the Scheme Participants acknowledge that after the Effective Date Goldcorp intends to transfer all of the Target shares to a wholly-owned Australian subsidiary (“Goldcorp Sub”) and that the Target will merge with and into Goldcorp Sub pursuant to a further scheme under section 413 of Corporations Act, pursuant to which all of the assets and liabilities of the Target (except to the extent such liabilities have otherwise been satisfied or discharged) become the assets and liabilities of Goldcorp Sub, and the Target will cease its separate legal existence.
(b)Goldcorp acknowledges that the transaction under this Scheme and the amalgamation contemplated in clause 6.16(a) are interdependent steps in an integrated transaction intended to constitute a statutory merger for the purposes of Section 368(a) of the Code.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using Federal Law Search on the Court’s website.
IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION
NSD 1359 of 2010
IN THE MATTER OF ANDEAN RESOURCES LIMITED (ACN 064 494 319)
BETWEEN: ANDEAN RESOURCES LIMITED (ACN 064 494 319)
Plaintiff
JUDGE:
JAGOT J
DATE:
8 DECEMBER 2010
PLACE:
SYDNEY
REASONS FOR JUDGMENT
This is the second court hearing in relation to an originating process filed on 15 October 2010. The plaintiff, Andean Resources Limited, makes an application pursuant to s 411(4)(b) of the Corporation Act 2001 (Cth) for an order approving a scheme of arrangement between it and its ordinary shareholders. On 29 October 2010 I made orders under s 411(1) of the Corporations Act in relation to the convening of a meeting for the purpose of Andean shareholders considering and, if thought fit, agreeing to the scheme of arrangement.
Several affidavits have been filed in support of the application before me today.
Affidavit of Louis Gignac affirmed 3 December 2010
Mr Gignac is a director and the Chairman of Andean Resources. His affidavit deposes to the holding of the scheme meeting on 3 December 2010 and the results of that scheme meeting. In short, the meeting approved the scheme of arrangement both by a majority in number and by more than 75 per cent of the votes cast. Approximately 99.88% of shares by value, and approximately 93.72% of shareholders by number, voted in favour of the scheme. This is set out in the Computershare Investor Services Pty Ltd (Computershare) poll report of 3 December 2010, which is annexed to Mr Gignac’s affidavit.
Affidavit of Jason van Rooy affirmed 6 December 2010
Mr van Rooy is employed by Computershare, the company retained by Andean Resources to maintain the Australian register of Andean’s members. Mr van Rooy’s affidavit explains the tasks that Computershare undertook pursuant to instructions from Andean Resources in relation to the receipt of the scheme booklet, production of proxy forms for the scheme meeting, the printing and dispatch of the scheme meeting documents, the receipt of proxy forms, the proxy report and the shareholder eligibility report.
Affidavit of Daniel Lees sworn 3 December 2010
Mr Lees is another employee of Computershare. Mr Lees’ affidavit deposes to his attendance at the meeting on 3 December 2010 and the steps taken at the meeting in relation to the registration of shareholders as well as the voting procedure. Mr Lee expresses his conclusion that, based on his observations of the procedures at the meeting, he is satisfied that the “receipt and recording of proxies, registration, meeting and voting processes were properly completed in relation to the scheme meeting”.
Affidavit of Lara Donaldson affirmed 6 December 2010
Ms Donaldson is the general manager of client services at Computershare in Canada. Computershare Canada carries out equivalent functions to Computershare in Australia. Ms Donaldson’s affidavit deposes to the tasks performed by Computershare Canada on behalf of Andean Resources, including the procedures undertaken to ensure compliance with Canadian legal requirements.
Paragraph 29 of Ms Donaldson’s affidavit refers to the fact that National Instrument 51-102 Continuous Disclosure Obligations (Canadian Securities Administrators) governs the obligations of Andean Resources in relation to the dispatch of the meeting material for the scheme meeting to Andean registered shareholders. A voting instruction form was not sent by Computershare Canada to each Andean registered shareholder in Canada as this is not a requirement under National Instrument 51-102. This is relevant because order 1(j)(iii) of the orders made on 29 October 2010 required that there be despatched to each Canadian shareholder a voting instruction form for the scheme meeting. In respect of this non-compliance, Andean Resources relies on s 1322(2) and (3) of the Corporations Act, relating to procedural irregularities, which provides that:
(2)A proceeding under this Act is not invalidated because of any procedural irregularity unless the Court is of the opinion that the irregularity has caused or may cause substantial injustice that cannot be remedied by any order of the Court and by order declares the proceeding to be invalid.
(3)A meeting held for the purposes of this Act, or a meeting notice of which is required to be given in accordance with the provisions of this Act, or any proceeding at such a meeting, is not invalidated only because of the accidental omission to give notice of the meeting or the non-receipt by any person of notice of the meeting, unless the Court, on the application of the person concerned, a person entitled to attend the meeting or ASIC, declares proceedings at the meeting to be void.
Ms Donaldson’s affidavit records that Andean Resources instructed Computershare Canada to despatch the material for the scheme meeting in accordance with the requirements of Canadian law, specifically National Instrument 54-101 Communication with Beneficial Owners of Securities of a Reporting Issuer and National Instrument 51-102. Ms Donaldson confirmed that Computershare Canada complied with these instructions and carried out the review and tabulation of the voting instructions received for the scheme meeting (such voting instructions completed by the registered shareholders, the beneficial holders who had not objected to their name and address being provided to Andean Resources by their participant broker, and the participant brokers) in accordance with the Securities Transfer Association of Canada’s Proxy Protocol.
Affidavit of James Rozsa affirmed 7 December 2010
Mr Rozsa is a partner of Corrs Chambers Wesgarth, the solicitors for Andean Resources. Mr Rozsa’s affidavit deals with the registration of the orders made on 29 October 2010 and the scheme booklet with the Australian Securities and Investments Commission (ASIC), the announcement on the Australian Stock Exchange of the scheme meeting and the confirmation by the independent expert after Andean’s release of its quarterly report for 30 September 2010 and financial statements for the quarter ending 30 September 2010. The independent expert, Grant Samuel & Associates Pty Limited (Grant Samuel), confirmed that neither the quarterly report nor the financial statements affected the conclusions previously expressed that the scheme is fair and reasonable and therefore in the best interests of Andean shareholders.
The affidavit also confirms compliance with procedural requirements, including the advertisement of this application for approval under s 411(4)(b) of the Corporations Act, the absence of any notice that any person would appear at this second court hearing and the receipt of a letter of 7 December 2010 from ASIC under s 411(17)(b) of the Corporations Act that ASIC has no objection to the scheme of arrangement between Andean Resources and its shareholders. Under s 411(17) of the Corporations Act:
The Court must not approve a compromise or arrangement under this section unless:
(a)it is satisfied that the compromise or arrangement has not been proposed for the purpose of enabling any person to avoid the operation of any of the provisions of Chapter 6; or
(b)there is produced to the Court a statement in writing by ASIC stating that ASIC has no objection to the compromise or arrangement…
Affidavit of John Thomas affirmed 3 December 2010
Mr Thomas is the company secretary of Andean Resources. His affidavit deposes to the steps taken in relation to the provision of the scheme booklet to the auditor of Andean Resources, BDO Kendalls Audit & Assurance (WA) Pty Ltd (as required by s 249K of the Corporations Act), the dispatch of the scheme meeting documents to Australian and Canadian shareholders, proof of notice in accordance with reg 5.6.13 of the Corporations Regulations 2001 (Cth), receipt of proxies and the conduct of the scheme meeting.
Affidavit of Reginald Stephen Cooper sworn 3 December 2010
Mr Cooper is a director of Grant Samuel. He previously swore an affidavit on 26 October 2010 annexing an independent expert’s report. Mr Cooper refers to the release of the quarterly report for 30 September 2010 and the financial statements for the quarter ending 30 September 2010. According to Mr Cooper, he reviewed that material and:
… there is nothing in this material which has caused me to alter the conclusion previously expressed in the Independent Expert’s Report that the proposed scheme of arrangement is fair and reasonable and therefore in the best interests of Andean shareholders.
Affidavit of David L Deisley sworn 3 December 2010
Mr Deisley’s affidavit deals with the position of Goldcorp Inc (Goldcorp), including arrangements for the payment of the cash consideration, the issue of new Goldcorp shares for the share consideration, the listing of those new Goldcorp shares on the Toronto and New York stock exchanges, the appointment of a sale agent for the ineligible foreign shareholders and the process for notification of the Scheme to the National Commission for the Defence of Competition in Argentina (as referred to in the scheme booklet).
There has also been tendered a certificate in relation to the conditions precedent of the scheme of arrangement, in accordance with clause 3.3 of the merger implementation agreement between Andean and Goldcorp dated 3 September 2010, stating that all of the relevant conditions precedent have been either satisfied or waived.
Discussion
The relevant principles are identified in the outline of written submissions filed on behalf of Andean Resources, including that:
·In deciding whether to approve a scheme, the Court must consider whether there has been compliance with the Act, whether the majority of shareholders are acting in good faith in voting in favour of the scheme and whether the scheme is one that is capable of being accepted by shareholders looking to their own commercial advantage.
·… where there is no opposition to the order for approval, and there are no public policy grounds for withholding approval, considerable weight should be given to the commercial judgment of those who have voted to approve the scheme.
In this case there is no opposition to the order for approval. I am satisfied that there are no public policy grounds for withholding approval given that there is no suggestion in any of the material that the scheme is intended to avoid the provisions of Chapter 6 of the Corporations Act. The scheme was overwhelmingly supported by the shareholders at the scheme meeting. The procedural requirements have all been satisfied, subject only to the procedural irregularity relating to order 1(j)(iii) of the orders made on 29 October 2010. But, as has been explained in Ms Donaldson’s affidavit, that was necessary and appropriate due to the requirements of Canadian law. Having regard to the affidavits to which I have referred, there is evidence in support of the compliance with all other substantive and procedural requirements, including the statement from ASIC under s 411(17)(b) of the Corporations Act.
The only other matter which needs to be noted is that Andean Resources seeks an order pursuant to s 411(12) of the Corporations Act, namely, an exemption from compliance with subs (11) which requires a copy of every order of the Court to be annexed to the constitution of the body issued after the order has been made. That is unnecessary in circumstances where there is no utility in having the Court orders annexed to the company’s constitution because the orders do not make any change to the constitution.
Having regard to the matters set out in the written submissions and to which I have otherwise referred, including the views of the independent expert and the result of the scheme meeting, I am satisfied that orders should be made in accordance with the short minutes of order dated 8 December 2010.
I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot. Associate:
Dated: 13 December 2010
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