Document:

AGREEMENT OF PURCHASE AND SALE

            
            AND JOINT ESCROW INSTRUCTIONS

             

            
            This Purchase and Sale Agreement and Joint Escrow Instructions
            (“Agreement”), is made and entered into this 14 day of June 2007, by and
            between Woodflame, Inc., a California corporation
            (“Seller”), and Mark Zimmerman, as
            Qualified Exchange Accommodator for Montgomery Realty Group, Inc., a Nevada
            corporation (“Buyer”).

             

            
            It is the intent of Buyer and Seller that First American Title Insurance
            Company (“Escrow Agent”), whose offices are located at 1850 Mt. Diablo
            Blvd., Suite 300, Walnut Creek, California 94596, shall open an escrow in connection
            with, and act as escrow agent for, the transaction described in this Agreement. It is
            further the intent of Buyer and Seller that Escrow Agent accept this Agreement as the
            joint escrow instructions of Buyer and Seller in connection with this transaction,
            except to the extent that Buyer and Seller shall hereafter execute further joint escrow
            instructions as they shall believe are necessary or desirable.

             

            
            RECITALS

             

            
            A.         Seller is the
            owner of the real property and improvements thereon, which is located at, and commonly
            known as, 447 Battery Street, San Francisco, California (the “Property”).
            The legal description of the Property is attached hereto and marked Exhibit
            A.

             

            
            B.         Buyer desires to
            purchase, and Seller desires to sell, the Property upon the terms and conditions
            hereinafter set forth.

             

            
            NOW, THEREFORE, in consideration of the mutual covenants contained
            herein, as well as other valuable consideration, it is hereby agreed as
            follows:

             

            
            1.          
            Property.
            Seller agrees to sell, and Buyer agrees to purchase, the Property. The
            Property shall consist of:

             

            
                	
                            
                             

                        	
                            
                            (i)

                        	
                            
                            the real property which is situated under the
                            improvements,

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (ii)

                        	
                            
                            all improvements on the Property,

                        

            

            
             

            
                	
                            
                             

                        	
                            
                            (iii)

                        	
                            
                            all rights, privileges, and easements of the
                            Property,

                        

            

            
             

            
            (iv)         an assignment of
            the leases described in Exhibit B, as well as any other leases of the Property, if any,
            that may exist at the time of the Close of Escrow (subject to Section 20),
            and

            
             

            
            (v)          all fixtures
            and personal property which are situated on the Property at the time when this
            Agreement is executed, related to the operation of the Property, and owned by
            Seller.

            
             

            
            2.          
            Purchase Price.
            The purchase price for the Property shall be Seven Million Six Hundred
            and Fifty Thousand Dollars ($7,650,000.00) [“Purchase Price”], which shall
            be payable as follows:

             

            
            (i)          as provided
            hereafter, Buyer shall deposit One Hundred Thousand Dollars ($100,000.00) with Escrow
            Agent upon its execution of this Agreement;

            
             

            
            (ii)          as provided
            hereafter, Buyer shall deposit an additional One Hundred Thousand Dollars ($100,000.00)
            in escrow on or before the Contingency Removal Date;

            
             

            
            

            

            

            
                         
            (iii)           Buyer shall deposit
            the remainder of the Purchase Price, in the amount of Seven Million Four Hundred Fifty
            Thousand Dollars and no cents ($7,450,000.00), less any interest earned on the Deposit,
            (“Final Payment”) in escrow at least one (1) business day prior to the
            Close of Escrow.

             

            
            3.          
            Escrow Agent. Buyer and Seller have
            mutually chosen First American Title Insurance Company, whose offices are at the
            above-stated address, (“Escrow Agent”) to act as escrow agent for this
            transaction and to perform the duties specified herein. If Escrow Agent is hereafter
            unwilling or unable to perform the duties specified herein or if the parties hereto
            mutually become dissatisfied with Escrow Agent’s performance, Buyer and Seller
            shall mutually choose another title insurance company in the City and County of San
            Francisco to act as escrow agent for this transaction.

             

            
                	
                            
                             

                        	
                            
                            4.

                        	
                            
                            Buyer’s
                            Deposits.

                        

            

             

            
            (a)         
            First Deposit. Simultaneously with his
            execution of this Agreement, Buyer shall deposit with Escrow Agent the sum of One
            Hundred Thousand Dollars ($100,000.00) [the “First Deposit”]. Escrow Agent
            shall place the First Deposit in an interest bearing account in a reputable financial
            institution chosen by Escrow Agent. All interest on the First Deposit shall accrue to
            Buyer.

            
             

            
            (b)        
            Second Deposit. If Buyer serves Seller and
            Escrow Agent with a written Notice of Approval as provided in Section 9, Buyer must
            simultaneously deposit with Escrow Agent an additional One Hundred Thousand Dollars
            ($100,000.00) [the “Second Deposit”]. If Buyer fails to deliver the Second
            Deposit to Escrow Agent simultaneously with his service of a Notice of Approval, Seller
            shall have the right to terminate this Agreement at any time by written notice to Buyer
            and Escrow Agent until Buyer delivers the Second Deposit to Escrow Agent. Escrow Agent
            shall place the Second Deposit in the same interest bearing account as the First
            Deposit, and all interest on the Second Deposit shall also accrue to Buyer. The First
            Deposit and the Second Deposit shall collectively be referred to herein as the
            “Deposit.”

            
             

            
            (c)         
            Status of the Deposit on the Contingency Removal
            Date. If Buyer serves Seller and Escrow Agent with a Notice
            of Approval in accordance with the requirements of Section 9, the Deposit shall be
            non-refundable for all purposes. Thereafter, the Deposit, together with interest
            thereon, shall be credited to ‘the Purchase Price at the Close of Escrow. If
            Buyer does not serve Seller and Escrow Agent with a Notice of Approval by the
            Contingency Removal Date as required by Section 9 or if Seller terminates this
            Agreement as provided in subsection (b) hereof, Escrow Agent shall return the First
            Deposit and interest earned thereon to Buyer, less all escrow fees and
            costs.

            
             

            
            5.          
            Seller’s Disclosure
            Obligations. Within three
            (3) business days after Buyer delivers the fully executed original of this Agreement to
            Seller, Seller shall provide Buyer with: (i) copies the existing leases of the
            Property, a list of which is attached hereto and marked Exhibit B, (ii) a list of
            all existing contracts concerning the Property, together with copies of those
            contracts, (iii) any plans of the Property in Seller’s possession or under
            its control, (iv) any governmental notices regarding the Property, if any,
            (v) real estate tax bills for the Property for the period 2005 — 2007, (vi)
            a copy of a preliminary report prepared by Escrow Agent, and (vii) copies of all
            other current and historical information about the Property, if any. However,
            Seller’s disclosure requirements concerning the Property shall be limited to the
            documents which Seller has in its possession or under its control, and Seller shall not
            be required to prepare any documents that are not already in Seller’s files or to
            prepare spreadsheets or organize information regarding the Property. Buyer acknowledges
            that Seller makes no representation regarding the findings or conclusions in any report
            concerning the Property.

             

            
            2

             

            
            

            

            

            
                            
            6.           
            Buyer’s Right to Investigate the
            Property.

             

            
            (a)         
            Buyer’s Right of Access. During the
            thirty (30) day period after Buyer delivers the fully executed original of this
            Agreement to Seller (“Contingency Removal Period”), Buyer and any of his
            authorized agents may have access to all portions of the Property on regular business
            days and during normal business hours, so long as Buyer gives Seller at least
            twenty-four (24) hours prior written notice. Buyer shall have the right to conduct
            those engineering and other studies regarding the condition of the Property that Buyer
            deems prudent. However, Buyer shall not conduct any physical sampling or testing of the
            Property unless (i) Buyer delivers a written notice to Seller at least forty-eight (48)
            hours in advance which describes the sampling or testing that Buyer proposes to perform
            and (ii) Seller delivers a written consent thereto to Buyer, which consent shall not be
            unreasonably withheld. Buyer shall not cause any damage or destruction to the Property
            or loss to Seller as a result of Buyer’s sampling or testing of the Property. In
            addition, Buyer shall not interfere with any of the tenants in the Property or with the
            operation of their businesses.

            
             

            
            (b)        
            Environmental Audit. During the Contingency
            Removal Period, Buyer, at his sole cost and expense, shall have the right to conduct an
            environmental audit of the Property and such environmental studies regarding the
            Property as Buyer deems prudent. However, any physical sampling and testing shall
            comply with the requirements of subsection (a) hereof.

            
             

            
            (c)         
            ALTA Survey. Buyer, at his sole cost and
            expense, shall have the right to have a licensed California land surveyor or civil
            engineer prepare an ALTA survey of the Property which may be used by Escrow Agent in
            issuing an ALTA policy.

            
             

            
            7.          
            Scope of Buyer’s Investigation of the
            Property. During the
            Contingency Removal Period, Buyer shall conduct as thorough and complete a review of
            the condition of the Property and all matters affecting the profitability, operation,
            title, and ownership of the Property as Buyer shall deem to be reasonable or necessary
            in order to inform himself fully regarding Buyer’s purchase of the Property.
            Buyer’s investigation may include, but shall not be limited to, (i) all matters
            concerning title to the Property (including easements and access rights), (ii) all
            governmental and legal requirements, i.e., zoning, land use, compliance with disabled
            access requirements of the Americans with Disabilities Act and Title 24 of the
            California Code of Regulations, property taxes, assessments, use permit requirements,
            building codes, and compliance of the Property with all other governmental regulations,
            laws, permits, and approvals, (iii) the physical condition of the improvements on the
            Property, including all utility connections and systems and all building operating
            systems, and warranties, and (iv) the soil and water conditions of the Property, the
            stability and load bearing capacity of the soil, and the presence of hazardous
            materials on the Property.

             

            
            8.          
            “As-Is”
            Purchase. Buyer acknowledges
            and agrees that he is purchasing the Property solely in reliance on his own
            investigations of the Property and not in reliance on any representations or warranties
            of Seller, except those set forth in Section 18 and that he is purchasing the Property
            in its “as-is” condition.

             

            
            3

             

            
            

            

            

            
                        
            9.          
            Notice of Approval.
            Buyer shall have until 5:00 p.m. on the date that is thirty (30) days
            after Buyer delivers the fully executed original of this Agreement to Seller (the
            “Contingency Removal Date”) to approve all conditions or matters affecting
            the operation, title, and ownership of the Property, including but not limited to those
            matters described in Section 7. 1f on or before 5:00 p.m. on the Contingency Removal
            Date, Buyer serves Seller and Escrow Agent with a written notice approving the
            condition of the Property (“Notice of Approval”), Buyer shall be deemed to
            have approved all conditions and matters affecting the operation, title, and ownership
            of the Property and to have waived his right to terminate this Agreement for any such
            reason. If Buyer does not serve Seller and Escrow Agent with a Notice of Approval by
            5:00 p.m. on the Contingency Removal Date, this Agreement shall immediately terminate;
            and, except as otherwise expressly provided herein, Buyer and Seller shall owe no
            further obligations to each other under this Agreement. Unless there is an express
            written waiver of this Section 9, which is signed by Buyer and Seller (and not by their
            agents), if Buyer does not serve Seller and Escrow Agent with a Notice of Approval by
            5:00 p.m. on the Contingency Removal Date, any further communications between Buyer and
            Seller and any acts performed by Buyer or Seller shall not be deemed to be in
            contemplation of this Agreement and shall not be construed as a waiver of this Section
            9.

             

            
            10.        
            Buyer’s Obligation to Deliver to Seller Documents Concerning
            the Property. If Buyer does
            not serve Seller and Escrow Agent with a Notice of Approval by 5:00 p.m. on the
            Contingency Removal Date, Buyer within five (5) business days after the Contingency
            Removal Date shall deliver to Seller: (1) all copies of the documents which Seller
            provided to Buyer pursuant to Section 5 and (ii) all documents concerning or reflecting
            Seller’s investigation of the Property, including all communications with third
            parties.

             

            
            11.        
            Assignment of Contracts Affecting the
            Property. At least thirty (30) days prior to the Closing
            Date, Buyer shall deliver to Seller and deposit into escrow (i) a written list
            (“Buyer’s Assignment List”) that identifies the contracts affecting
            the Property that Buyer desires to assume on the Closing Date and (ii) the form of
            assignment (“Assignment Form”) that Buyer desires Seller to use for the
            contracts that will be assumed. Seller shall not be required to assign any contract
            concerning the Property to Buyer that Buyer has not identified on Buyer’s
            Assignment List and shall not be required to assign any contracts if Seller does not
            receive Buyer’s Assignment List at least thirty (30) days prior to the Closing
            Date. Seller shall execute the Assignment Form for the contracts on Buyer’s
            Assignment List and shall deposit that the executed Assignment Forms for those
            contracts into escrow; provided, however, Seller shall not be liable to Buyer lithe
            other contracting party refuses to accept the assignment of the contract.

             

            
                	
                            
                             

                        	
                            
                            12.

                        	
                            
                            Close of Escrow and Closing
                            Date.

                        

            

             

            
            (a)         
            Closing Date. The purchase and sale of the
            Property shall close (the “Close of Escrow”) on the date (the
            “Closing Date”) that is thirty (30) days after the Contingency Removal
            Dale.

            
             

            
            (b)        
            Seller’s Deposit into Escrow. At
            least one (1) business day prior to the Closing Date, Seller shall deposit all of the
            following into escrow;

            
             

            
            (i)         fully executed
            originals of all of the conveyancing documents described in Section 13,

            
             

            
            (ii)        Seller’s
            affidavit of non-foreign status as contemplated by Section 1445 of the Internal Revenue
            Code of 1986, as amended (26 USCA § 1445),

            
             

            
            (iii)       Seller’s affidavit
            as contemplated by the Revenue and Taxation Code Section 18662;

            
             

            
            4

             

            
            

            

            

            
                          
            (iv)       the Assignment Forms, executed by Seller,
            for those contracts that appear on Buyer’s Assignment List (unless the other
            contracting party refuses to consent to the assignment),

            
             

            
            (v)        a copy of
            Seller’s notices of termination for all contracts affecting the Property, other
            than those contracts on Buyer’s Assignment List, which termination shall be
            effective on or before the Close of Escrow, and

            
             

            
            (vi)       any other documents that
            may be described in escrow instructions that Buyer and Seller may execute hereafter or
            that may be requested by Escrow Agent in accordance with its normal customs and
            practices.

            
             

            
                	
                            
                             

                        	
                            
                            (c)

                        	
                            
                            Buyer’s Deposit into
                            Escrow.

                        

            

            
             

            
            (i)         If Buyer
            desires to obtain an ALTA title insurance policy covering the Property, Buyer shall
            deliver to Escrow Agent an ALTA survey of the Property that is satisfactory to Escrow
            Agent within the time period requested by Escrow Agent. The Close of Escrow shall not
            be delayed as a consequence of Buyer’s delay in delivering an ALTA survey to
            Escrow Agent.

            
             

            
            (ii)        At least thirty (30)
            days prior to the Closing Date, Buyer shall deliver to Seller, and deposit into escrow,
            Buyer’s Assignment List.

            
             

            
            (iii)       In addition, at least one
            (1) business day prior to the Closing Date, Buyer shall deposit all of the following
            into escrow:

            
             

            
            (1)        the Final Payment (as
            defined in Section 2), less any tenant security deposits retained by Seller, as set
            forth in Escrow Agent’s Estimate Statement,

            
             

            
            (2)        the title insurance
            premiums, closing costs and escrow fees and charges as described in Section 15,
            and

            
             

            
            (3)        any other documents
            as may be described in escrow instructions that Buyer and Seller may execute hereafter
            or as may be requested by Escrow Agent in accordance with its normal customs and
            practices.

            
             

            
            (d)        
            Escrow Agent’s Estimated Statement.
            At least five (5) days prior to the Closing Date, Escrow Agent shall deliver to Buyer
            and Seller Escrow Agent’s estimated statement (“Estimate Statement”)
            showing Escrow Agent’s estimate of (i) funds to be deposited into escrow,
            (ii) disbursements from the escrow, (iii) the amount of tenant security deposits,
            if any, that will be retained by Seller and deducted from the Purchase Price, (iv) the
            prorations between Buyer and Seller, (v) documentary transfer taxes to be paid by
            Seller, (vi) title insurance premiums to be paid by Buyer, and (vii) all other escrow
            fees and costs to be charged to Seller in accordance with this Agreement.

            
             

            
            5

             

            
            

            

            

            
                           
            (e)         
            Pre-conditions to the Close of Escrow.
            Escrow Agent shall not close escrow until and unless (i) Buyer and Seller have
            deposited into escrow those documents and funds described in subsections (b) and (c)
            hereof, (ii) Escrow Agent is ready, willing, and able to issue its CLTA title insurance
            policy (or its ALTA title insurance policy if Buyer has requested same and has
            delivered an ALTA survey of the Property to Escrow Agent) covering the Property in the
            amount of the Purchase Price, and (iii) there is not a dispute regarding the Estimate
            Statement which is in excess of Twenty-Five Thousand Dollars ($25,000).

            
             

            
            (f)         
            Close of Escrow. On the Closing Date,
            Escrow Agent shall close escrow as follows:

            
             

            
            (i)         Escrow Agent
            shall pay the amounts owed to any lender with a deed of trust or mortgage on the
            Property and record the reconveyance of the deed of trust or mortgage;

            
             

            
            (ii)        record the grant
            deed described in item (i) of Section 13 in the official records of the City and County
            of San Francisco;

            
             

            
            (iii)       deliver to Buyer the
            documents described items (ii) through (iv) of Section 13;

            
             

            
            (iv)       issue to Buyer a policy of
            title insurance as described in part (ii) of subsection (e) hereof;

            
             

            
            (v)        pay the Purchase
            Price to Seller, less (1) any tenant security deposits retained by Seller, (2)
            prorations described in Section 14 which are Seller’s responsibility but which
            are unpaid as of the Close of Escrow, and (3) the documentary transfer taxes payable by
            Seller on this transaction as described in Section 15; and

            
             

            
            (vi)       prepare and deliver to
            Buyer and Seller one signed copy of the Escrow Agent’s closing statement showing
            all receipts and disbursements of the escrow.

            
             

            
            Close of Escrow on this transaction shall occur at the offices of Escrow
            Agent Legal possession and physical occupancy of the Property shall be given to Buyer
            at 12:01 pm. on the date of the Close of Escrow.

             

            
            13.        
            Conveyance.
            At the Close of Escrow, upon receipt of the Purchase Price [less the
            deductions described in sub-part (v) of Section 12(f)], Seller shall grant, assign, and
            transfer the Property to Buyer by executing and delivering the following to Escrow
            Agent:

             

            
            (i)         a grant deed,
            which deed, when filed for record, shall convey to Buyer the Property in fee simple
            absolute, free and clear of all liens and encumbrances except zoning ordinances and
            regulations, real property taxes and assessments not yet due and payable and such other
            exceptions to title as shall appear in the preliminary report prepared by Escrow Agent
            which Seller shall provide to Buyer pursuant to Section 5,

            
             

            
            (ii)        an assignment of the
            leases described in Exhibit B as well as any other leases of the Property that may
            exist as of the Close of Escrow (subject to Section 20),

            
             

            
            (iii)       an assignment of the
            warranties, if any, which now cover any portion of the Property or any equipment
            therein,

            
             

            
            6

             

            
            

            

            

            
                           
            (iv)        a bill of sale for the fixtures and
            personal property, which are situated on the Property at the time when this Agreement
            is executed, related to the operation of the Property, and owned by Seller.

            
             

            
            14.        
            Prorations.
            The following prorations shall be calculated as of 11:59 p.m. on the day
            before the date of the Close of Escrow:

             

            
            (i)          Real estate
            taxes, personal property taxes, and general and special assessments shall be prorated
            using the last available tax bill.

            
             

            
            (ii)         Water, sewer, gas
            and electric charges shall be based upon meter readings taken not more than twenty-four
            hours prior to the Close of Escrow; and all other items of income and expense of the
            Property shall be prorated and adjusted as of the date of the Close of
            Escrow.

            
             

            
            (iii)        All costs and expenses
            relating to the operation, maintenance, and repair of the Property which were incurred
            prior to the date of the Close of Escrow shall be the responsibility of
            Seller.

            
             

            
                	
                            
                             

                        	
                            
                            (iv)

                        	
                            
                            All utility security deposits shall be retained by
                            Seller.

                        

            

            
             

            
            (v)         All costs and
            expenses relating to the operation, maintenance, and repair of the Property which were
            contracted for prior to the Close of Escrow but were only partially performed as of the
            date for the Close of Escrow shall be prorated as of the Close of Escrow.

            
             

            
            (vi)        Any items that cannot be
            adjusted at the Close of Escrow shall be equitably adjusted outside of escrow by the
            parties as soon as possible after Close of Escrow.

            
             

            
            15.        
            Closing Costs and Escrow Fees and
            Charges. Seller shall be
            responsible, and shall be debited at the Close of Escrow, for any documentary transfer
            taxes imposed by the City and County of San Francisco on this transaction. Buyer shall
            be responsible for the payment of: all escrow fees and charges, all recording fees, all
            costs incurred by Buyer in inspecting the Property, and all premiums for any ALTA or
            CLTA title insurance policy for the Property. Each party shall be responsible for
            his/its own legal fees.

             

            
            16.        
            Disputes Regarding Escrow Agent’s
            Estimate. If Buyer or Seller
            objects to the Estimate Statement [which is described in Section 12(d)], that party
            shall deliver his/its written objection to the other party and to Escrow Agent before
            the Closing Date. So long as the amount in dispute does not exceed Twenty-Five Thousand
            Dollars ($25,000), the dispute shall not delay the Close of Escrow. However, the party
            disputing the Estimate Statement shall have the right to assert a claim in accordance
            with the mediation and arbitration provisions of this Agreement. If the amount in
            dispute does exceed Twenty-Five Thousand Dollars ($25,000), the Close of Escrow shall
            be delayed until the dispute is resolved, and the prevailing party in the dispute shall
            be entitled to recover any damages suffered by that party as a result of the delay in
            the Close of Escrow.

             

            
            7

             

            
            

            

            

            
                        
            17.        
            Cooperation in
            Exchange. Buyer and Seller
            agree to cooperate with each other in allowing the other party to consummate this
            transaction as a tax-deferred exchange and to execute such documents as may be
            requested in connection with such an exchange, provided that: (i) the consummation of a
            tax-deferred exchange is not a condition precedent to performance of either
            party’s obligations hereunder, (ii) the party who is not seeking the tax-deferred
            exchange shall have no personal liability or obligation under any note, deed of trust,
            or other document in connection with the exchange, and (iii) the party who is not
            seeking the tax-deferred exchange shall indemnify the other party against any and all
            costs, damages, claims, or causes of action, including attorney’s fees and costs,
            arising out of his participation in the exchange transaction for his/its
            benefit.

             

            
                	
                            
                             

                        	
                            
                            18.

                        	
                            
                            Seller’s
                            Representations.

                        

            

             

            
            (a)         
            Representations. Seller represents and
            warrants that to the best of Seller’s knowledge, as of the date hereof and
            continuing until the Closing Date, except as otherwise disclosed to Buyer in writing,
            the following representations and warranties are true and correct:

            
             

            
            (i)         All documents
            that Seller shall provide to Buyer pursuant to this Agreement shall be true and correct
            copies of what they purport to be.

            
             

            
            (ii)        Seller is not in
            default with respect to any contract which may adversely affect the Property; and no
            litigation affecting the Property is pending or currently threatened.

            
             

            
            (iii)       Seller has good and
            marketable title to the Property and has the unrestricted power and authority to convey
            the Property to Buyer in the manner described herein.

            
             

            
            (iv)       Seller knows of no pending
            or threatened special assessments or condemnation actions by any governmental body
            which would have an effect on the Property.

            
             

            
            (v)        With the exception of
            the leases described in Exhibit B, there are no leases currently in effect that would
            give any person or entity a right to possession of any portion of the
            Property.

            
             

            
            (vi)       Seller has paid in full
            for all work, labor and material furnished to the Property to the extent that payment
            for such work is now due and payable; and Seller has received no notice that any
            mechanic’s liens have been recorded against the Property.

            
             

            
            (vii)      Seller’s execution of
            this Agreement and the documents, instruments and agreements referred to herein and the
            consummation of the transaction contemplated hereby will not result in the breach of
            any other agreement to which Seller is a party or by which the Property is
            bound.

            
             

            
            (viii)     Seller has not made a general
            assignment for the benefit of creditors; filed a voluntary petition in bankruptcy or
            suffered an involuntary petition by its creditors; suffered the appointment of a
            receiver to take possession of all or substantially all of its assets; or suffered the
            attachment or other judicial seizure of all or substantially all of its
            assets.

            
             

            
            All warranties and representations made in this Agreement shall survive
            the Close of Escrow.

            
             

            
            8

             

            
            

            

            

            
                         
            (b)        
            Seller’s Corrections. In the event
            that Seller shall discover prior to the Close of Escrow that any representation set
            forth in subsection (a) hereof is materially incorrect, Seller shall promptly notify
            Buyer in writing of the representation that is not materially correct and, to the best
            of Seller’s knowledge, the facts, conditions, or circumstances that are correct
            (“Seller’s Corrections”). Within ten (10) days after receipt of a
            written notice listing Seller’s Corrections, Buyer shall have the right to
            terminate this Agreement, by a written notice to Seller and Escrow Agent, and in that
            event, Escrow Agent shall return the Deposit to Buyer. If Buyer does not terminate this
            Agreement, as provided herein, Seller shall have no liability to Buyer for any
            misrepresentation or breach of warranty, so long as same was disclosed to Buyer in
            writing before the Close of Escrow.

            
             

            
            (c)         
            Seller’s Knowledge. For the purpose
            of subsection (a) hereof, the phrase “the best of Seller’s Knowledge”
            shall mean the current actual knowledge of Seller at the times indicated.
            “Seller’s knowledge” shall not include any imputed or constructive
            knowledge and shall not imply any duty to investigate.

            
             

            
            19.        
            Buyer’s
            Representations. Buyer
            represents and warrants that this Agreement has been duly executed and delivered by
            Buyer, is a legal, valid, and binding obligation of Buyer, and is enforceable in
            accordance with its terms.

             

            
            20.        
            Limitation on Seller’s
            Rights. After the date when
            Buyer delivers this fully executed Agreement to Seller, Seller shall not enter into any
            further leases of the Property, shall not approve an assignment of an existing lease to
            a new tenant, and shall not amend any existing leases of the Property without
            Buyer’s written consent, which shall not be unreasonably withheld. The limitation
            in the first sentence hereof shall not include any limitation on Seller’s right
            to approve subleases under existing leases. If a current tenant requests Seller to
            approve an assignment of a lease and if Buyer refuses to consent to that assignment,
            Buyer shall indemnify, defend, protect, and hold Seller harmless from any lawsuit or
            arbitration claim that the tenant or potential assignee might bring against Seller due
            to Buyer’s refusal to consent to the assignment.

             

            
                	
                            
                             

                        	
                            
                            21.

                        	
                            
                            Loss or Damage to the
                            Property.

                        

            

             

            
            (a)         
            Major Damage. If the Property shall be
            damaged or destroyed by fire or other casualty prior to the Close of Escrow in an
            amount, which Seller’s architect, engineer, construction cost estimator, or
            insurance adjuster shall estimate is in excess of Seven Hundred Fifty Thousand Dollar
            ($750,000.00), and such damage shall not have been repaired prior to Close of Escrow,
            Buyer may elect (i) to receive the proceeds of any insurance payable in connection
            therewith, under any insurance policy or policies covering the Property and thereupon
            remain obligated to perform this Agreement or (ii) to terminate this Agreement and
            receive back his Deposit Buyer shall make his election by serving Seller and Escrow
            Agent with a written notice within ten (10) days after receipt of the estimate
            described in the first sentence hereof. If Buyer fails to serve Seller and Escrow Agent
            with a written notice making the election described in this subsection (a), Buyer shall
            be deemed to have elected to proceed with the purchase of the Property. If Buyer
            terminates this Agreement pursuant to this subsection (a), neither party shall
            thereafter be under any thither liability to the other.

            
             

            
            9

             

            
            

            

            

            
                         
            (b)         Minor
            Damage. If the Property shall be damaged by fire or other
            casualty prior to the Close of Escrow in an amount equal to or less than Seven Hundred
            Fifty Thousand Dollars ($750,000.00) [as estimated in accordance with subsection (a)
            hereof], and such damage shall not have been repaired prior to the Close of Escrow,
            Seller shall assign to Buyer the proceeds of any insurance policy or policies covering
            the Property; and this Agreement shall remain in full force and effect and shall not
            otherwise be affected by such loss or damage. However, if insurance proceeds
            (disregarding any insurance deductible) not available to repair the damage to the
            Property, Buyer shall have the right to terminate this Agreement within ten (10) days
            after he is advised that insurance proceeds are unavailable.

            
             

            
            22.        
            Indemnity.
            Buyer shall indemnify, defend, protect, and hold harmless Seller and
            each of its officers, directors, and shareholders from and against any and all claims,
            damages, causes of action, lawsuits, losses and expenses, including attorney’s
            fees and costs, expert fees arising from or in any way connected with (i) Buyer’s
            investigation or testing of the Property prior to the Close of Escrow, (ii) any claim
            or cause of action that may accrue after the Close of Escrow, or (iii) Buyer’s
            breach of any of his obligations under this Agreement, except as expressly limited by
            Section 23. In any such action, Seller and its officers, directors, and shareholders
            shall have the right to retain counsel of their choice to defend Seller and its
            officers, directors, and shareholders.

             

            
            23.        
            Liquidated Damages.
            If Buyer fails to purchase of the Property by the Closing Date, Seller
            shall be released from any obligation to sell the Property to Buyer. Buyer and Seller
            agree, by initialing this Section 23 in the space below, that (i) it would be
            impracticable and/or extremely difficult to fix or establish the actual damages
            sustained by Seller as a result of a Buyer’s failure to purchase the Property by
            the Closing Date and (ii) the Deposit is a reasonable approximation of such damages
            considering all of the circumstances existing on the date of this Agreement.
            Accordingly, in the event of Buyer’s default as aforesaid, the Deposit shall
            constitute and be deemed to be the remedy for Buyer’s failure to purchase the
            Property by the Closing Date. Escrow Agent is instructed to pay the Deposit to Seller
            in accordance herewith.

             

            
            Buyer’s Initials
            /s/        
            Seller’s initials /s/

             

            
            24.        
            Notices.
            Any notice or election which may be or is required to be given pursuant
            to the provisions of this Agreement shall be sufficiently served if (i) personally
            served, (ii) sent by certified or registered U.S. Mall, postage prepaid, return receipt
            requested, (iii) sent by private courier (e.g. Federal Express), (iv) sent by e-mail,
            or (v) sent by facsimile transmission and addressed or sent as follows, until changed
            by written notice similarly served:

             

            
                	
                            
                            SELLER:

                        	
                            
                            with copies to:

                        
	
                            
                            Woodflame, Inc.

                        	
                            
                            Gregory J. Ryken, Esq.

                        
	
                            
                            Attn.: Helen Y. W. Liu

                        	
                            
                            Tobin & Tobin

                        
	
                            
                            447 Battery Street, Suite 313

                        	
                            
                            500 Sansome Street, 8th Floor

                        
	
                            
                            San Francisco, California 94111

                        	
                            
                            San Francisco, California 94111

                        
	
                            
                            Fax No.: (510) 669-9898

                        	
                            
                            Fax No.: (415) 296-7211

                        
	
                            
                             

                        	
                            
                            e-mail:
                            gryken@value.net

                        
	
                            
                             

                        	
                            
                             

                        
	
                            
                            and

                        	
                            
                            Brian Topley

                        
	
                            
                             

                        	
                            
                            Sperry Van Ness

                        
	
                            
                             

                        	
                            
                            250 Montgomery St., Suite 1200

                        
	
                            
                             

                        	
                            
                            San Francisco, California 94104

                        
	
                            
                             

                        	
                            
                            Fax No.: (415) 358-8563

                        
	
                            
                             

                        	
                            
                            e-mail: Brian.Topley@svn.com

                        
	
                            
                             

                        	
                            
                             

                        

            

             

             

            
            10

             

            
            

            

            

             

            
                	
                            
                            BUYER:

                        	
                            
                            with copies to:

                        
	
                            
                            Dinesh Maniar

                        	
                            
                            Brian Topley

                        
	
                            
                            Montgomery Realty Group, Inc.

                        	
                            
                            Sperry Van Ness

                        
	
                            
                            400 Oyster Point Blvd., Suite 415

                        	
                            
                            250 Montgomery St., Suite 1200

                        
	
                            
                            South San Francisco, California 94080

                        	
                            
                            San Francisco, California 94104

                        
	
                            
                            Fax No.: (650) 266-8089

                        	
                            
                            Fax No.: (415) 358-8563

                        
	
                            
                            e-mail: faye@dimc.com

                        	
                            
                            e-mail: Brian.Topley@svn.com

                        
	
                            
                             

                        	
                            
                             

                        
	
                            
                            ESCROW AGENT:

                        	
                            
                             

                        
	
                            
                            First American Title Insurance Company

                        	
                            
                             

                        
	
                            
                            Attn.:

                        	
                            
                             

                        
	
                            
                            1850 Mt. Diablo Blvd., Suite 300

                        	
                            
                             

                        
	
                            
                            Walnut Creek, CA 94596

                        	
                            
                             

                        
	
                            
                            Fax No.:

                        	
                            
                             

                        
	
                            
                            e-mail:

                        	
                            
                             

                        

            

             

            
            25.        
            Binding Agreement.
            This Agreement shall be binding upon and shall inure to the benefit of
            the parties hereto and their respective heirs, personal representatives, successors and
            assigns (subject to Section 26) and shall constitute the entire agreement among the
            parties. This Agreement supersedes any other oral or written agreement between the
            parties concerning the Property, including but not limited to the letter of intent,
            dated May 28, 2007. This Agreement shall not be modified or amended except by a written
            instrument duly executed by the parties hereto.

             

            
            26.        
            No Assignment.
            Buyer shall not have the right to assign this Agreement or any of
            Buyer’s rights thereunder to any person or entity, without Seller’s prior
            written consent which may be withheld in Seller’s sole discretion.

             

            
                	
                            
                             

                        	
                            
                            27.

                        	
                            
                            Mediation and
                            Arbitration.

                        

            

             

            
            (a)         
            Agreement for Mediation and Arbitration. IT
            IS HEREBY AGREED THAT ANY DISPUTE THAT SHALL ARISE OUT OF THIS AGREEMENT OR SHALL
            RELATE IN ANY MANNER TO ANY CONDITION OF THE PROPERTY OR THE PURCHASE AND SALE OF THE
            PROPERTY SHALL BE DECIDED BY ARBITRATION PURSUANT TO SUBSECTIONS (D), (E), AND (F)
            HEREOF. IT IS FURTHER AGREED THAT THE PARTIES HERETO SHALL GIVE UP THEIR RIGHT TO HAVE
            THE DISPUTES SUBJECT TO THIS SECTION LITIGATED IN A COURT AS WELL AS EACH PARTY’S
            RIGHTS TO DISCOVERY AND APPEAL EXCEPT TO THE EXTENT THAT SUCH RIGHTS ARE SPECIFICALLY
            ENUMERATED IN THIS SECTION 27, IT IS ALSO AGREED THAT UNLESS THERE IS A WAIVER PURSUANT
            TO THE LAST SENTENCE OF SUBSECTION (B) HEREOF, ANY DISPUTE WHICH THE PARTIES HAVE
            AGREED SHALL BE DECIDED BY ARBITRATION, SHALL BE SUBMITTED TO MEDIATION BEFORE, AND AS
            A CONDITION PRECEDENT TO, THE INITIATION OF ARBITRATION. IF ANY PARTY REFUSES TO
            MEDIATE OR ARBITRATE THE DISPUTES SUBJECT TO THIS SECTION 27, ANY OTHER PARTY MAY
            COMPEL THE MEDIATION OR ARBITRATION OF THAT DISPUTE UNDER THE AUTHORITY OF THE
            CALIFORNIA CODE OF CIVIL PROCEDURE.

            
             

            
            Buyer’s Initials
            /s/        
            Seller’s initials /s/

            
             

            
            11

             

            
            

            

            

            
                        (b)        
            Mediation. Any party may refer a dispute
            described in subsection (a) hereof to mediation before the Judicial Arbitration &
            Mediation Service, Two Embarcadero Center, San Francisco, California 94111
            (“JAMS”). The parties shall have five (5) business days after the matter is
            submitted to mediation to agree upon a mediator from the available panel. If the
            parties are unable to agree within that five (5) day period, any party may request that
            JAMS appoint the mediator in accordance with its normal rules for the selection of a
            mediator, or if JAMS no longer exists, by its successor organization or, if there is no
            successor organization, by a mediator or mediation organization chosen by the San
            Francisco Superior Court upon petition by Buyer or Seller. If the dispute is referred
            to JAMS or another mediation organization, the mediator shall be chosen in accordance
            with the normal rules and procedures of that organization. The mediator shall be an
            attorney at law licensed to practice in the State of California with at least twenty
            (20) years experience in the practice of commercial real estate law who shall have at
            least two (2) years experience as a mediator or a retired judge with at least ten (10)
            years experience on the bench. If the parties to the dispute do not believe that
            mediation will be helpful, the parties shall have the right to proceed directly to
            arbitration, without first mediating the dispute, so long as all parties to the dispute
            sign a written waiver of the mediation process described in this subsection
            (b).

            
             

            
            (c)         
            Costs of Mediation. Each party to the
            mediation shall advance in equal shares the fees charged by the mediator and the costs
            of the mediation until it is determined whether the dispute is resolved without further
            proceedings. If the mediation succeeds in resolving the dispute, each party to the
            mediation will equally share the fees of the mediator and the costs of the mediation,
            and each shall bear his/its own attorney’s fees and costs in connection with the
            mediation.

            
             

            
            (d)        
            Arbitration. After the parties have
            complied with subsection (b) hereof, any claim, controversy or dispute that shall arise
            out of this Agreement or shall relate in any manner to any condition of the Property or
            the purchase and sale of the Property (including but not limited to any claim based
            upon contract or tort or for declaratory relief; and whether at law or in equity) shall
            be submitted to arbitration.

            
             

            
            (e)         
            Arbitration Procedures. Any dispute to be
            arbitrated shall be submitted to JAMS or, if JAMS no longer exists, to any successor
            organization or, if there is no successor organization, to a similar organization
            mutually acceptable to Buyer and Seller or, if there is no organization mutually
            acceptable to Buyer and Seller, to any arbitrator or arbitration organization chosen by
            the San Francisco Superior Court upon petition by Buyer or Seller. Except as otherwise
            set forth herein to the contrary, the arbitrator shall be selected, and the arbitration
            shall be conducted, pursuant to the then current JAMS Streamlined or Comprehensive
            Arbitration Rules and Procedures, as applicable, or if the arbitration is conducted by
            another organization, by the arbitration rules and procedures of that organization or,
            if that organization does not have arbitration rules and procedures, in accordance with
            the Sections 1280 et seq. of the California Code of Civil Procedure. The arbitration
            shall be decided by one neutral arbitrator. Any of the time deadlines set forth in the
            JAMS Streamlined or Comprehensive Arbitration Rules and Procedures or other arbitration
            rules and procedures or set by the arbitrator may be changed or modified at any time by
            the written stipulation of all of the parties to the arbitration. The decision of the
            arbitrator shall be final and binding upon the parties; and any court of competent
            jurisdiction may thereafter enter judgment in accordance with the arbitrator’s
            award.

            
             

            
            (f)         
            Qualifications of the Arbitrator. The
            arbitrator chosen by the parties or appointed by JAMS or any other arbitration
            organization shall be a retired Federal District Court, California Superior Court, or
            federal or state appellate or supreme court judge with at least ten (10) years
            experience on the bench.

             

            
            12

             

            
            

            

            

            
            

            
            28.        
            Attorney’s Fees and Mediation and Arbitration
            Costs. If there is a
            lawsuit, action, arbitration, or proceeding involving a dispute that shall arise out of
            this Agreement or shall relate in any manner to any condition of the Property or the
            purchase and sale of the Property, whether that lawsuit, action, arbitration, or
            proceeding involves causes of action in contract or in tort, at law or in equity, the
            prevailing party shall be entitled to recover from the losing party all costs and
            expenses, including his/its attorney’s fees and expert and consultant’s
            fees and costs, in such lawsuit, action or proceeding and all costs and expenses of the
            mediation and arbitration, including but not limited to the fees of the mediator and
            arbitrator. The prevailing party shall be determined by the court or an arbitrator
            based upon an assessment of which party’s major arguments made or positions taken
            in the proceeding could fairly be said to have prevailed over the other party’s
            major arguments or positions.

             

            
            29.        
            Controlling Law and
            Venue. This Agreement shall
            be interpreted in accordance with the laws of the State of California. In the event of
            any dispute arising under this Agreement or concerning any condition of the Property or
            the purchase or sale of the Property, venue shall be set in San Francisco,
            California.

             

            
            30.        
            Real Estate Broker
            Fees. Seller shall be solely
            responsible for paying such real estate brokerage fees as may be due to Sperry Van Ness
            pursuant to a separate brokerage or commission agreement that Seller has entered into
            with Sperry Van Ness. Buyer and Seller shall each indemnify, defend and hold the other
            harmless from and against any and all claims and damages and for any and all costs and
            expenses, including reasonable attorneys’ fees and costs, resulting from claims
            that may be asserted against the other party by any broker, agent or finder with whom
            that party shall have contacted. Buyer and Seller acknowledge that Sperry Van Ness
            represent both parties to this transaction.

             

            
            31.        
            Each Party’s
            Cooperation. Each party
            hereto shall from time to time execute, acknowledge and deliver such further
            instruments and monies and perform such additional acts as the other party or Escrow
            Agent may reasonably request in order to e the intent of this Agreement.

             

            
            32.        
            Severability.
            If any provision of this Agreement, which does not materially affect the
            consideration for this Agreement, is held invalid, the validity of the remainder of
            this Agreement shall not be affected thereby.

             

            
            33.        
            Headings.
            The headings appearing in this Agreement are inserted only as a matter
            of convenience for reference purposes and do not define, limit or describe the scope
            and intent of this Agreement or any section hereof.

             

            
            34.        
             Waiver.
            The waiver by a party hereto of any term, covenant, agreement or
            condition of this Agreement shall not be deemed to be a waiver of any subsequent breach
            or failure of condition as to the same or any other term, covenant, agreement or
            condition herein contained, nor shall any custom or practice which may arise between
            the parties in the administration of the terms hereof be construed as a waiver of or in
            such a manner as to lessen the rights of any party to insist upon the performance by
            the other party in strict accordance with the terms of this Agreement. No waiver of any
            of the provisions of this Agreement shall be effective unless it is in writing and
            executed by the party whose rights are waived.

             

            
                	
                            
                             

                        	
                            
                            35.

                        	
                            
                            Time of the
                            Essence.
                            Time is of the essence in this Agreement.

                        

            

             

             

            
            13

             

            
            

            

            

            
                        IN
            WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on their
            behalf by their duly authorized representatives on the date first above
            written.

             

            
                	
                            
                             

                        	
                            
                            BUYER

                        
	
                            
                            SELLER

                        	
                            
                            By: /s/ Mark Zimmerman

                        
	
                            
                            WOODFLAME, INC.

                        	
                            
                            MR. MARK ZIMMERMAN, as Qualified

                        
	
                            
                            a California corporation

                        	
                            
                            Exchange Accommodator for Montgomery Realty

                        
	
                            
                            By: /s/ Helen Y. W. Liu

                        	
                            
                            Group, a Nevada corporation

                        
	
                            
                            HELEN Y. W. LIU,

                        	
                            
                             

                        
	
                            
                            President

                        	
                            
                            Equitable Beneficiary

                        
	
                            
                             

                        	
                            
                            By: /s/ Dinesh Maniar

                        
	
                            
                            Dated: June 13, 2007

                        	
                            
                            DINESH MANIAR, President of Montgomery

                        
	
                            
                             

                        	
                            
                            Realty Group, Inc., a Nevada corporation

                        

            

             

             

            
            First American Title Insurance Company hereby accepts this Agreement as
            the joint escrow instructions of Buyer and Setter in connection with the purchase and
            sale of the Property and agrees to be bound by these instructions unless and until it
            receives joint escrow instructions hereafter, signed by Buyer and Seller, which shall
            supplement or amend this Agreement.

             

            
            ESCROW AGENT

            
            First American Title Insurance Company

             

            
            ______________________________

             

            
            Dated: June __, 2007

             

            
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Exhibit 4.55  

This document is important and requires your immediate attention. If you are in any doubt as to how to deal with it, you should consult
your investment dealer, stock broker, bank manager trust company manager, accountant, lawyer or other professional advisor. No securities regulatory authority has expressed an opinion about the
securities that are subject to this Offer and it is an offence to claim otherwise. This Offer has not been approved or disapproved by any securities regulatory authority nor has any securities
regulatory authority passed upon the fairness or merits of the Offer or upon the adequacy of the information contained in this document. Any representation to the contrary is
an offence.

October 15, 2007 

NOTICE OF EXTENSION AND SUBSEQUENT OFFERING PERIOD  

by

  

YAMANA GOLD INC.  

of its
  OFFER TO PURCHASE
  all of the outstanding common shares of
  MERIDIAN GOLD INC.
  on the basis of 2.235 Yamana common shares

and Cdn$7.00 in cash (the "Offer Consideration")

for each common share of Meridian Gold Inc.  

Yamana Gold Inc. (the "Offeror" or "Yamana") hereby gives notice that
it is extending its offer, originally dated July 19, 2007, as varied and extended by the Notice of Variation and Extension dated August 14, 2007 (the "First
Variation and Extension"), the Notice of Extension dated September 12, 2007 (the "First Notice of Extension"),
the Notice of Variation and Extension dated September 20, 2007 (the "Second Variation and Extension") and the Notice of Variation and Extension
dated September 27, 2007 (the "Third Variation and Extension") (collectively referred to herein as the
"Offer") to purchase all of the outstanding common shares of Meridian Gold Inc. ("Meridian"), which
includes common shares that may become outstanding after the date of the Offer but before the expiry time of the Offer upon exercise of stock options
("Options") or other securities of Meridian that are convertible into or exchangeable or exercisable for common shares, together with the associated
rights (the "SRP Rights") issued under the Shareholder Rights Plan of Meridian (collectively, the
"Shares"), in order to extend the expiry of the Offer to midnight (Toronto time) on November 2, 2007. 

THE OFFER HAS BEEN EXTENDED AND IS OPEN FOR ACCEPTANCE UNTIL

MIDNIGHT (TORONTO TIME) ON NOVEMBER 2, 2007.  

 INTERMEDIARIES LIKELY HAVE ESTABLISHED TENDERING CUT-OFF TIMES THAT ARE UP TO

48 HOURS PRIOR TO THE EXPIRY TIME. SHAREHOLDERS MUST INSTRUCT THEIR BROKERS

OR OTHER INTERMEDIARIES PROMPTLY IF THEY WISH TO TENDER.  

This extension constitutes a Subsequent Offering Period under the US Exchange Act. This Notice of Extension and Subsequent Offering Period should be read in conjunction
with the Offer and Circular dated July 19, 2007, as amended by the First Variation and Extension, the First Notice of Extension, the Second Variation and Extension and the Third Variation and
Extension (collectively referred to herein as the "Offer and Circular"). Except as otherwise set forth herein, the terms and conditions previously set
forth in the Offer and Circular and the related Letter of Transmittal and Notice of Guaranteed Delivery continue to be applicable in all respects. All references to the "Offer" in the Offer and
Circular, the Letter of Transmittal, the Notice of Guaranteed Delivery and this Notice of Extension and Subsequent Offering Period mean the original offer, as amended by the
First Variation and Extension, the First Notice of Extension, the Second Variation and Extension, the Third Variation and Extension and this Notice of Extension and Subsequent Offering Period, and all
references in such documents to the "Circular" mean the original circular, as amended by the First Variation and Extension, the First Notice of Extension, the Second Variation and Extension, the Third
Variation and Extension and this Notice of Extension and Subsequent Offering Period. Unless the context requires otherwise, capitalized terms used herein but not defined herein have the respective
meanings given to them in the Offer and Circular. 

The Dealer Managers for the Offer are:  

	In Canada	 	In the United States
	
 	
 	

 
	Genuity Capital Markets

Canaccord Capital Corporation	 	Genuity Capital Markets USA Corp.

Canaccord Adams Inc.

  

 
 

NOTICE TO SHAREHOLDERS IN THE UNITED STATES    
    

        The Offer is being made for the securities of a Canadian issuer and by a Canadian issuer that is permitted, under a multijurisdictional
disclosure system adopted by the United States, to prepare the Offer and Circular, and this Notice of Extension and Subsequent Offering Period, in accordance with the disclosure requirements of
Canada. Shareholders should be aware that such requirements are different from those of the United States. The financial statements included or incorporated by reference in the Offer and
Circular have been prepared in accordance with Canadian generally accepted accounting principles, and may be subject to Canadian auditing and auditor independence standards, and thus may not be
comparable to financial statements of United States companies.

        Shareholders in the United States should be aware that the disposition of Shares and the acquisition of Yamana Common Shares by them as described in the
Offer and Circular may have tax consequences both in the United States and in Canada. Such consequences may not be fully described herein and such Shareholders are encouraged to consult their
tax advisors. See "Canadian Federal Income Tax Considerations" in Section 23 of the Circular and "United States Federal Income Tax Considerations" in Section 24 of
the Circular.

        The enforcement by Shareholders of civil liabilities under the United States federal securities laws may be affected adversely by the fact that the Offeror
is incorporated under the laws of Canada, that some or all of its officers and directors may be residents of jurisdictions outside the United States, that the Canadian Dealer Managers for the
Offer and some or all of the experts named in the Offer and Circular may be residents of jurisdictions outside the United States and that all or a substantial portion of the assets of the
Offeror and said persons may be located outside the United States.

        The Offeror has filed with the SEC (i) a Registration Statement on Form F-10 dated July 19, 2007, as amended by Amendment
No. 1 dated August 14, 2007, Amendment No. 2 dated August 21, 2007, Amendment No. 3 dated August 30, 2007, Amendment No. 4 dated September 12,
2007 and Amendment No. 5 dated September 20, 2007; (ii) a Registration Statement on Form F-10 dated September 27, 2007, as amended by Amendment No. 1 dated
October 15, 2007 (collectively, the "Registration Statement") and expects to mail this Notice of Extension and Subsequent Offering Period to Shareholders concerning the proposed business
combination with Meridian. SHAREHOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND OFFER AND CIRCULAR AND ANY OTHER RELEVANT DOCUMENTS TO BE FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders will be able to obtain the documents free of charge at the SEC's website, www.sec.gov. In addition,
documents filed with the SEC by the Offeror will be available free of charge from the Offeror. You
should direct requests for documents to the Vice President, Legal, General Counsel and Assistant Corporate Secretary of Yamana, 150 York Street, Suite 1102, Toronto, Ontario
M5H 3S5, telephone 416-815-0220. To obtain timely delivery, such documents should be requested not later than October 26, 2007, five business days before the
Expiry Date.

        THE SECURITIES OFFERED PURSUANT TO THE OFFER AND CIRCULAR HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY UNITED STATES STATE SECURITIES COMMISSION NOR
HAS THE SEC OR ANY UNITED STATES SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THE OFFER AND CIRCULAR. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE.

 
 

NOTICE TO SHAREHOLDERS IN THE UNITED KINGDOM    
    

        The Offer and Circular does not constitute a prospectus for the purposes of the Prospectus Rules published by the Financial Services Authority of the
United Kingdom (the "FSA"). Accordingly, the Offer and Circular, as supplemented and amended by this Notice of Extension and Subsequent
Offering Period, has not been, and will not be, approved by the FSA or by London Stock Exchange plc. No action has been or is intended to be taken by Yamana or by Genuity Capital Markets or
Canaccord Capital Corporation, or any of their affiliated entities, that would permit a public offer of Yamana Common Shares to be made in the United Kingdom, which would require an approved
prospectus to be made available to the public in the United Kingdom (in accordance with the United Kingdom Financial Services and Markets Act 2000
("FSMA") and the Prospectus Rules (as hereinafter defined)) before such an offer was made. Accordingly, as regards Shareholders resident in, or
receiving the Offer or the Offer and Circular in the United Kingdom ("UK Shareholders"), the Offer is only 

i

 

being
made to or directed at, and deposits of Shares will only be accepted from, a UK Shareholder who is, and is able to establish to the satisfaction of the Offeror that it is: (i) a Qualified
Investor acting as principal; (ii) a Qualified Investor which operates in the financial markets acting on behalf of a person, not being a Qualified Investor, on a discretionary basis concerning
the acceptance of offers on that person's behalf; or (iii) acting on behalf, and on the instructions, of a Qualified Investor (in which case the Offer is made to or directed at that
Qualified Investor). In addition, in the United Kingdom, the Offer and Circular are being distributed only to, and are directed only at, Qualified Investors (i) who have professional
experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended
(the "Order") and Qualified Investors falling within Article 49(2)(a) to (d) of the Order. A "Qualified Investor" is (i) a
legal entity which is authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities; (ii) a legal
entity which has two or more of: (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000; and
(3) an annual net turnover of more than €50,000,000, in each case as shown in its last annual or consolidated accounts; (iii) a person entered on the register of
Qualified Investors maintained by the FSA for this purpose pursuant to section 87R of FSMA; or (iv) an investor authorized by a European Economic Area
("EEA") State other than the United Kingdom to be considered as a qualified investor for the purposes of the Prospectus Directive
(as defined herein), in each case within the meaning and as more particularly described in section 86(7) of FMSA. Accordingly, any UK Shareholder purporting to accept the Offer must
provide supporting evidence satisfactory to the Offeror that it is entitled to do so, and the Offeror shall in its sole discretion be entitled to reject any such purported acceptance of the Offer, as
further described in the Offer and Circular and in the Letter of Transmittal. Shareholders receiving the Offer in the United Kingdom should consult with their legal advisers to determine
whether they (or any person on whose behalf they act) are able to receive and accept the Offer. Further details in connection with the Offer and its acceptance by UK Shareholders are set out in
the Offer and Circular. 

        The
Offer is not being made to or directed at, and deposits of Shares will not be accepted from, any UK Shareholder that is not an Eligible UK Shareholder. 

        Shareholders who have validly deposited and not withdrawn their Shares need take no further action to accept the Offer. Shareholders who
wish to accept the Offer must properly complete and execute the Letter of Transmittal (printed on yellow paper in the case of all Shareholders other than Eligible UK Shareholders and on green paper in
the case of Eligible UK Shareholders) (the "Letter of Transmittal") that accompanied the Offer and Circular (or a manually signed
facsimile thereof) and deposit it, together with the certificates representing their Shares and all other required documents, with Kingsdale Shareholder Services Inc.
(the "Depositary" and the "Information Agent"), at the office set out in the Letter of
Transmittal in accordance with the instructions in the Letter of Transmittal. Alternatively, Shareholders may (1) accept the Offer in the United States by following the procedures for
book-entry transfer of Shares described under "Manner of Acceptance — Acceptance by Book-Entry Transfer in the United States" in
Section 3 of the Offer; or (2) accept the Offer where the certificates representing the Shares are not immediately available, or if the certificates and all of the required documents
cannot be provided to the Depositary before the Expiry Time, by following the procedures for guaranteed delivery described under "Manner of Acceptance — Procedure
for Guaranteed Delivery" in Section 3 of the Offer using the accompanying notice of guaranteed delivery (the "Notice of Guaranteed
Delivery") (printed on pink paper) (or a manually signed facsimile thereof) that accompanied the Offer and Circular. Shareholders will not be required to pay any fee or
commission if they accept the Offer by depositing their Shares directly with the Depositary or if they make use of the services of a member of the Soliciting Dealer Group to accept the Offer. 

        Questions
and requests for assistance may be directed to the Dealer Managers and/or Kingsdale Shareholder Services Inc. or Innisfree M&A Incorporated, who are each acting
as Information Agent. Additional copies of this document, the Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained without charge on request from
the Dealer Managers, the Depositary and Information Agents at their respective addresses shown on the last page of this document. 

ii

 

 
 

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION    
    

        The Offer and Circular, this Notice of Extension and Subsequent Offering Period and some of the information included or incorporated by reference in the Offer and
Circular, contain "forward-looking statements" and "forward-looking information" under applicable United States and Canadian securities laws concerning the proposed transaction and the
business, operations and financial performance and condition of the Offeror, Northern Orion Resources Inc. ("Northern Orion") and Meridian and
estimated production and mine life of the various mineral projects of the Offeror, Northern Orion or Meridian. Statements concerning mineral reserve and resource estimates may also be deemed to
constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered if the property is developed. Except for statements of historical fact
relating to the companies, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect,"
"project," "intend," "believe," "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could
cause actual events or results to differ materially from those projected in the forward-looking statements. Assumptions upon which such forward-looking statements are based include that the Offeror
will be successful in acquiring 100% of the issued and outstanding Meridian shares and all conditions to completion of the
transactions will be satisfied or waived. Many of these assumptions are based on factors and events that are not within the control of the Offeror and there is no assurance they will prove to be
correct. Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include changes in market conditions, variations in ore grade or
recovery rates, risks relating to international operations, fluctuating metal prices and currency exchange rates, changes in project parameters, the possibility of project cost overruns or
unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated, the Yamana Common Shares issued in
connection with the Offer having a market value lower than expected, the businesses of the Offeror, Meridian and Northern Orion not being integrated successfully or such integration may be more
difficult, time-consuming and costly than expected and the expected combined benefit from the Northern Orion Transaction and/or the Offer not being fully realized or realized within the
expected time frame. See "Strategic Rationale" in Section 5 of the Circular, "Purpose of the Offer" in Section 6 of the Circular, "Plans for Meridian" in Section 6 of the Circular
and "Business Combination Risks" in Section 8 of the Circular as well as those risk factors discussed or referred to in the annual Management's Discussion and Analysis and Annual Information
Form for each of the Offeror, Northern Orion and Meridian filed with the securities regulatory authorities in all provinces of Canada and available under each of the company's respective profiles at
www.sedar.com, and the Annual Report on Form 40-F of each of the Offeror, Northern Orion and Meridian filed with the United States Securities and
Exchange Commission (the "SEC") under each of the company's respective profile at www.sec.gov. These factors are not
intended to represent a complete list of the factors that could affect the Offeror and the combination of the Offeror, Meridian and Northern Orion. Additional factors are noted elsewhere in the Offer
and Circular and in the documents incorporated by reference. 

        Although
the Offeror has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking
statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ materially from those anticipated in such statements. The Offeror undertakes no obligation to update forward-looking statements if
circumstances or management's estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements.
Any forward-looking statements of facts related to Meridian are derived from Meridian's publicly filed reports. 

iii

 

 
 

INFORMATION CONCERNING MERIDIAN    
    

        Except as otherwise indicated, the information concerning Meridian contained in the Offer and Circular has been taken from or is based upon publicly available
documents and records on file with the SEC, the Canadian securities regulatory authorities and other public sources. Meridian has not reviewed the Offer and Circular and has not confirmed the accuracy
and completeness of the information in respect of Meridian contained in the Offer and Circular. Although the Offeror has no knowledge that would indicate that any statements contained herein
concerning Meridian taken from or based upon such documents and records are untrue or incomplete, neither the Offeror nor any of its directors or officers assumes any responsibility for the accuracy
or completeness of such information, including any of Meridian's financial statements, or for any failure by Meridian to disclose events or facts which may have occurred or which may affect the
significance or accuracy of any such information but which are unknown to Meridian. 

 
 

INFORMATION CONCERNING NORTHERN ORION    
    

        Except as otherwise indicated, the information concerning Northern Orion contained in the Offer and Circular including information incorporated by reference, has
been taken from or is based upon publicly available documents and records on file with the SEC, the Canadian securities regulatory authorities and other public sources. Northern Orion has reviewed the
Offer and Circular and confirmed the accuracy and completeness of the information in respect of Northern Orion herein. Although the Offeror has no knowledge that would indicate that any statements
contained herein concerning Northern Orion taken from or based upon such documents and records are untrue or incomplete, neither the Offeror nor any of its directors or officers assumes any
responsibility for the accuracy or completeness of such information, including any of Northern Orion's financial statements, or for any failure by Northern Orion to disclose events or facts which may
have occurred or which may affect the significance or accuracy of any such information but which are unknown to Northern Orion. 

 
 

NOTICE TO HOLDERS OF MERIDIAN EQUITY ENTITLEMENTS    
    

        The Offer is made only for Shares and is not made for any stock options, share appreciation rights, restricted shares, restricted units, performance shares,
performance share units or any other equity-based or equity related awards to acquire Shares, pursuant to and in accordance with the Meridian Share Incentive Plans (collectively referred to as
"Meridian Equity Entitlements"). Any holders of Meridian Equity Entitlements who wish to accept the Offer should, to the extent permitted by applicable
Law, exercise their Meridian Equity Entitlements: (i) on an accelerated vesting basis, conditional on the Offeror taking up and paying for Shares under the Offer; and/or (ii) effect a
cashless exercise of their Meridian Equity Entitlements for the purposes of tendering to the Offer all Shares issued in connection with such cashless exercise, conditional upon the Offeror taking up
and paying for Shares under the Offer. Any such exercise must be completed sufficiently in advance of the Expiry Time to assure the holder of such Meridian Equity Entitlements will have certificates
representing the Shares received on such exercise available for deposit before the Expiry Time, or in sufficient time to comply with the procedures referred to under "Manner of
Acceptance — Procedure for Guaranteed Delivery" in Section 3 of the Offer. 

        With
respect to Meridian Equity Entitlements that are stock options, if holders of stock options do not exercise such options at or before the Expiry Time, such options will become an
option or right to acquire Yamana Common Shares (on a tax-deferred basis for the purposes of the Income Tax Act (Canada) if
reasonably practicable) whereby, effective as of the Expiry Time, subject to applicable Laws, each stock option shall automatically be converted into an option to acquire a number of Yamana Common
Shares based on the formula set out in Section 15 of the Circular, "Arrangements, Agreements or Understandings — Support
Agreement — Outstanding Meridian Equity Entitlements". The tax consequences to holders of Meridian Equity Entitlements are not described in "Canadian Federal
Income Tax Considerations" in Section 23 of the Circular or "United States Federal Income Tax Considerations" in Section 24 of the Circular. Holders of Meridian Equity
Entitlements should consult their tax advisors for advice with respect to potential income tax consequences to them in connection with the decision to exercise or not exercise their Meridian Equity
Entitlements. 

iv

 

        See
Section 15 of the Circular, "Arrangements, Agreements or Understandings — Support
Agreement — Outstanding Meridian Equity Entitlements" for further details. 

 
 

REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES    
    

        Unless otherwise indicated, all references to "Cdn$", "$" or "dollars" in this Notice of Extension and Subsequent Offering Period refer to Canadian dollars and
all references to "US$" refer to United States dollars. Yamana's financial statements that are included and incorporated by reference in the Offer and Circular are reported in
United States dollars and are prepared in accordance with Canadian GAAP. Financial statements of Northern Orion that are incorporated by reference in the Offer and Circular are reported in
United States dollars and are prepared in accordance with Canadian GAAP. Certain of the financial information in the financial statements is reconciled to US GAAP. For a discussion of the
material measurement differences between US GAAP and Canadian GAAP: (i) in the context of Yamana, see Note 30 to Yamana's audited consolidated financial statements as at and for
the year ended December 31, 2006; (ii) in the context of Viceroy, see Note 11 to Viceroy's audited consolidated financial statements as at and for the year ended
December 31, 2005; and (iii) in the context of Northern Orion, see Note 16 to Northern Orion's audited consolidated financial statements as at and for the year ended
December 31, 2006. 

 
 

NOTE CONCERNING MINERAL RESOURCE CALCULATIONS    
    

        Information contained in the Offer and Circular, by incorporation by reference or otherwise, and disclosure documents of Yamana, Northern Orion and Meridian that
are filed with securities regulatory authorities concerning mineral properties have been prepared in accordance with the requirements of securities laws in effect in Canada, which differ from the
requirements of United States securities laws. 

        Without
limiting the foregoing, these documents use the terms "measured resources", "indicated resources" and "inferred resources". United States investors are advised that, while
such terms are recognized and required by Canadian securities laws, the SEC does not recognize them. Under United States standards, mineralization may not be classified as a "reserve" unless
the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. United States investors are
cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their
existence and as to whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore,
United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. Disclosure of contained ounces
is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report resources as in place by tonnage and grade without reference to unit measures. Accordingly,
information concerning descriptions of mineralization and resources contained in these documents may not be comparable to information made public by United States companies subject to the
reporting and disclosure requirements of the SEC. 

        National
Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") is a
rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.
Unless otherwise indicated, all resource estimates contained in the Offer and Circular, by incorporation by reference or otherwise, have been prepared in accordance with NI 43-101
and the Canadian Institute of Mining, Metallurgy and Petroleum Classification System. 

v

 

 
 

EXCHANGE RATES    
    

        On June 27, 2007, the date of the announcement of the Offeror's intention to make the Offer, the exchange rate for one US dollar expressed in Canadian
dollars based upon the noon buying rates provided by the Bank of Canada was $1.0716. 

        The
closing, high, low and average exchange rates for the US dollar in terms of Canadian dollars for the six months ended June 30, 2007, and the calendar years ended
December 31, 2006, December 31, 2005 and December 31, 2004, as reported by the Bank of Canada, were as follows: 

	 
	 	Six Months Ended June 30, 2007
	 	Year Ended December 31, 2006
	 	Year Ended December 31, 2005
	 	Year Ended December 31, 2004

	Closing	 	$	1.06	 	$	1.17	 	$	1.16	 	$	1.20
	High	 	 	1.18	 	 	1.17	 	 	1.27	 	 	1.40
	Low	 	 	1.06	 	 	1.10	 	 	1.15	 	 	1.18
	Average(1)	 	 	1.14	 	 	1.13	 	 	1.21	 	 	1.30

	(1)
	Calculated
as an average of the daily noon rates for each period. 

        On October 12, 2007, the noon rate of exchange as reported by the Bank of Canada for one US dollar expressed in Canadian dollars
was $1.03. 

vi

  

 
 

NOTICE OF EXTENSION AND SUBSEQUENT OFFERING PERIOD  
  

        October 15, 2007 

TO: THE SHAREHOLDERS OF MERIDIAN  

        This Notice of Extension and Subsequent Offering Period (the "Notice of Extension") amends and supplements the
Offer pursuant to which the Offeror is offering to purchase, on the terms and subject to the conditions contained in the Offer and Circular, the Letter of Transmittal and Notice of Guaranteed
Delivery, all of the outstanding Shares, which includes Shares that may become outstanding after the date of the Offer but before the Expiry Time of the Offer upon exercise of Meridian Equity
Entitlements or other securities of Meridian that are convertible into or exchangeable or exercisable for Shares. 

        Except
as otherwise set forth in this Notice of Extension, the terms and conditions previously set forth in the Offer and Circular, Letter of Transmittal and Notice of Guaranteed
Delivery continue to be applicable in all respects. This Notice of Extension should be read in conjunction with the Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery. 

        All
references to the "Offer" in the Offer and Circular, the Letter of Transmittal, the Notice of Guaranteed Delivery and this Notice of Extension mean the original offer dated
July 19, 2007 as amended by the First Variation and Extension, the First Notice of Extension, the Second Variation and Extension, the Third Variation and Extension and this Notice of
Extension and all references in such documents to the "Circular" mean the original circular dated July 19, 2007 as amended by the First Variation and Extension, the First Notice of
Extension, the Second Variation and Extension, the Third Variation and Extension and this Notice of Extension. Capitalized terms used in this Notice of Extension and not defined herein that are
defined in the Offer and Circular have the respective meanings ascribed thereto in the Offer and Circular. 

1.     Recent Developments  

        As of midnight (Toronto time) on October 12, 2007, 79,873,250 Shares (representing approximately 79% of the issued and outstanding Shares and 78% of
the Shares on a fully diluted basis) had been validly deposited to the Offer and not withdrawn. By notice to the Depositary the Offeror has taken up and accepted for payment all of such Shares. The
Offeror has agreed in the Support Agreement to pay for such Shares no later than October 16, 2007. 

        In
consideration for the acquisition of the Shares taken up on October 12, 2007, the Offeror will pay an aggregate of approximately C$559 million in cash and issue
approximately 179 million Yamana Common Shares in the aggregate. The Offeror was advised by Meridian that the number of Shares outstanding at the close of business on October 12, 2007
was 101,305,120. 

2.     Extension of the Offer/Subsequent Offering Period  

        By notice to the Depositary given on October 12, 2007 and a press release issued by the Offeror, the Offeror has extended the expiry of the Offer from
midnight (Toronto time) on October 12, 2007 to midnight (Toronto time) on November 2, 2007. Accordingly, the definition of "Expiry Date" in the "Definitions" section of the Offer and
Circular is deleted and replaced by the following: 

"Expiry Date" means November 2, 2007 or such later date or dates as may be fixed by the Offeror from time to time as provided under "Extension,
Variation or Change in the Offer" in Section 5 of the Offer; 

        In
addition, all references to October 12, 2007 in the Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery are amended to refer to
November 2, 2007. 

        This
extension constitutes a "Subsequent Offering Period" under the US Exchange Act. The amount of cash and Yamana Common Shares available to be paid to Shareholders depositing their
Shares during this extension will be the same on a per Share basis as the amount that was available to Shareholders whose Shares have been taken up. 

        The
Offeror has agreed, to the extent possible, to effect a Compulsory Acquisition, if the Offer has been accepted by holders of not less than 90% of the outstanding Shares as at the
Expiry Time, or to pursue a Subsequent Acquisition Transaction, provided that doing so would not violate applicable Laws or would not be 

1

 

otherwise
commercially unreasonable. See Section 6 — "Arrangements, Agreements or Understandings of the Third Variation and
Extension — Support Agreement — Subsequent Acquisition Transaction," and
Section 22 — "Acquisition of Shares Not Deposited Pursuant to the Offer," of the Offer and Circular. 

        In
light of the acquisition by the Offeror of approximately 79% of the issued and outstanding Shares (on a non-diluted basis), the Offeror anticipates substantially reduced
trading levels will now occur in the Shares relative to historical norms. The Offer has been extended to allow Shareholders who tender by the Expiry Time to receive prompt payment for their Shares.
The Offeror intends to acquire all Shares not tendered to the Offer pursuant to a Compulsory Acquisition or Subsequent Acquisition Transaction during approximately the next 60 to
90 days. 

3.     Time for Acceptance  

        The Offer is now open for acceptance until midnight (Toronto time) on November 2, 2007. 

4.     Manner of Acceptance  

        Shares may be deposited to the Offer in accordance with the provisions of Section 3 of the Offer, "Manner of Acceptance". 

5.     Take up of and Payment for Deposited Shares  

        Any Shares deposited to the Offer after midnight (Toronto time) on October 12, 2007 but before the Expiry Time will be taken up and paid for promptly. See
Section 6 of the Offer, "Take up and payment for deposited Shares", for additional detail. 

6.     Right to Withdraw Deposited Shares  

        Shares may be withdrawn by or on behalf of a depositing Shareholder (unless otherwise required or permitted by applicable law) (i) at any time when the
Shares have not been taken up; (ii) if the Shares have not been paid for within three business days after having taken them up; (iii) at any time before the expiration of ten days from
the date upon which either a notice of change or a notice of variation is mailed or otherwise communicated to Shareholders; (iv) during a Subsequent Offering Period with respect to the Offer;
or (v) as required by the US Exchange Act at any time after 60 days from the commencement of the Offer. Shareholders will maintain their right to withdraw their Shares at any time during
this Subsequent Offering Period until the Shares so deposited are taken up by the Offeror. Withdrawing holders of Shares who have deposited such Shares during the Subsequent Offering Period and have
received payment for such Shares must return such payment to the Offeror prior to any withdrawal by including the payment received for such Shares with the notice of withdrawal submitted to the
Depositary in compliance with the procedures described in Section 7 of the Offer. See Section 7 of the Offer, "Right to Withdraw Deposited Shares", for additional detail regarding
withdrawal of deposited Shares. 

7.     Consequential Amendments to the Offer and Circular and Other Documents  

        The Offer and Circular, the Letter of Transmittal and the Notice of Guaranteed Delivery are amended to the extent necessary to reflect the amendments contemplated
by, and the information contained in this Notice of Extension. 

8.     Offerees' Statutory Rights  

        In the event that there is a misrepresentation contained in a take-over bid circular or a notice of change or variation that is required to be
delivered to securityholders in connection with a take-over bid, subject to certain defences, the securities legislation in the provinces of Ontario, Alberta, British Columbia, Manitoba,
New Brunswick, Newfoundland, Nova Scotia and Saskatchewan provides securityholders with, in addition to any other rights they may have at law, rights of rescission against an offeror and/or a
right of action for damages against each of: (i) an offeror, (ii) every person who was a director of the offeror at the time the circular or notice was signed, (iii) every person
whose consent has been filed, as prescribed, regarding a report, opinion or statement made by such person in connection with the circular or notice; and (iv) each person who signed the 

2

 

certificate
in the circular or notice, excluding persons included in (ii) above. The securities legislation in Quebec provides that a person who has transferred securities in response to a
take-over bid effected with a circular or exemption, as proscribed by such legislation, containing a misrepresentation may apply to have the transfer rescinded or the price revised, and
such person may also claim damages from the offeror, its officers and its directors, and from those experts whose opinions, containing a misrepresentation, appeared in the circular with such person's
consent. 

        The foregoing is a summary only of the rights of rescission and rights of action that may be available to a Shareholder and is qualified by the specific
provisions of the securities legislation in each of the provinces of Canada. Shareholders should refer to the applicable provision of the securities legislation in their province and consult their own
legal advisors with respect to their rights based on their particular circumstances.

9.     Directors' Approval  

        The contents of this Notice of Extension has been approved, and the sending thereof to the securityholders of Meridian has been authorized, by the Board of
Directors of the Offeror. 

3

  

 
 

APPROVAL AND CERTIFICATE OF YAMANA GOLD INC.    
    

        The contents of this Notice of Extension has been approved, and the sending thereof to the securityholders of Meridian Gold Inc. has been authorized, by
the Board of Directors of Yamana Gold Inc. 

        The
foregoing, together with the Offer and Circular, contains no untrue statement of a material fact and does not omit to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in the light of the circumstances in which it was made. In addition, the foregoing, together with the Offer and Circular, does not contain any
misrepresentation likely to affect the value or the market price of the securities subject to the Offer or the securities to be distributed. 

DATED:
October 15, 2007 

	(Signed) PETER MARRONE	(Signed) CHARLES MAIN
	Chairman and Chief Executive Officer	Vice President, Finance and

Chief Financial Officer
	
 	

 
	On behalf of the Board of Directors
	
 	

 
	(Signed) DINO TITARO	(Signed) JOHN BEGEMAN
	Director	Director

4

Any questions and requests for assistance may be directed to

Kingsdale Shareholder Services Inc., Innisfree M&A Incorporated and the Dealer Managers for the Offer

at the telephone numbers and locations set out below: 

	

 

 

The Exchange Tower

130 King Street West, Suite 2950, P.O. Box 361

Toronto, Ontario

M5X 1E2	

 INNISFREE M&A
 INCORPORATED

501 Madison Avenue, 20th Floor

New York, New York 10022

	

 North American Toll Free Phone:

 1-866-879-7644
  Email: contactus@kingsdaleshareholder.com

Facsimile: 416-867-2271

Toll Free Facsimile: 1-866-545-5580

Outside North America, Banks and Brokers

Call Collect: 416-867-2272	

 Noth American Toll Free Phone:
  1-888-750-5834

Outside North America, Banks and Brokers

Call Collect: 212-750-5833

The Dealer Managers for the Offer May be Contacted at

the Following Telephone Numbers and Location:  

	In Canada:	In the United States:
	
 	

 
	Genuity Capital Markets

Scotia Plaza, Suite 4900

40 King Street West, PO Box 1007

Toronto, ON M5H 3Y2	Genuity Capital Markets USA Corp.

717 Fifth Avenue, Suite 1403

New York, New York 10022
	
 Telephone: 416-603-6000

Toll Free: 877-603-6001

Fax: 416-603-3099	

Telephone: 212-644-0001

Fax: 212-644-1341
	
 	

 
	
Canaccord Capital Corporation

BCE PLACE

161 Bay Street, Suite 2900

P.O. Box 516

Toronto, ON

Canada M5J 2S1

Telephone: 416-869-7368

Toll Free (Canada): 1-800-382-9280

Toll Free (US): 1-800-896-1058	
Canaccord Adams Inc.

99 High Street, Suite 1200

Boston, MA 02110

United States

Telephone: 617-371-3900

Toll Free: 1-800-225-6201

Fax: 617-371-3798

QuickLinks

NOTICE TO SHAREHOLDERS IN THE UNITED STATES

NOTICE TO SHAREHOLDERS IN THE UNITED KINGDOM

STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

INFORMATION CONCERNING MERIDIAN

INFORMATION CONCERNING NORTHERN ORION

NOTICE TO HOLDERS OF MERIDIAN EQUITY ENTITLEMENTS

REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES

NOTE CONCERNING MINERAL RESOURCE CALCULATIONS

EXCHANGE RATES

NOTICE OF EXTENSION AND SUBSEQUENT OFFERING PERIOD

APPROVAL AND CERTIFICATE OF YAMANA GOLD INC.

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