Document:

Certificate
No. 1

            Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or
its agent for registration of transfer, exchange or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch the registered owner hereof,
Cede & Co., has an interest herein.

                CONTINENTAL AIRLINES PASS THROUGH TRUST 2003-ERJ1

     7.875% Continental Airlines Pass Through Certificate, Series 2003-ERJ1
                        Issuance Date: December 10, 2003

                      Final Maturity Date: January 2, 2020

      Evidencing A Fractional Undivided Interest In The Continental Airlines
      Pass Through Trust 2003-ERJ1, The Property Of Which Shall Include Certain
      Equipment Notes Each Secured By An Aircraft Leased To Continental
      Airlines, Inc.

                   $414,564,763 Fractional Undivided Interest
         representing 0.0002412168% of the Trust per $1,000 face amount

            THIS CERTIFIES THAT CEDE & CO., for value received, is the
registered owner of a $414,564,763 (FOUR HUNDRED AND FOURTEEN MILLION, FIVE
HUNDRED AND SIXTY-FOUR THOUSAND SEVEN HUNDRED AND SIXTY-THREE DOLLAR) Fractional
Undivided Interest in the Continental Airlines Pass Through Trust 2003-ERJ1 (the
"TRUST") created by Wilmington Trust Company, as trustee (the "TRUSTEE"),
pursuant to a Pass Through Trust Agreement, dated as of September 25, 1997 (the
"BASIC AGREEMENT"), between the Trustee and Continental Airlines, Inc., a
Delaware corporation (the "COMPANY"), as supplemented by Trust Supplement No.
2003-ERJ1 thereto, dated as of December 10, 2003 (the "TRUST SUPPLEMENT" and,
together with the Basic Agreement, the "AGREEMENT"), between the Trustee and the
Company, a summary of certain of the pertinent provisions of which is set forth
below. To the extent not otherwise defined herein, the capitalized terms used
herein have the meanings assigned to them in the Agreement. This Certificate is
one of the duly authorized Certificates designated as "7.875% Continental
Airlines Pass Through Certificates, Series 2003-ERJ1"(herein called the
"CERTIFICATES"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement. By virtue of its acceptance hereof,
the holder of this Certificate (the "CERTIFICATEHOLDER" and, together with all
other holders of Certificates issued by the Trust, the "CERTIFICATEHOLDERS")

<PAGE>

assents to and agrees to be bound by the provisions of the Agreement and the
Intercreditor Agreement. The property of the Trust includes certain Equipment
Notes and all rights of the Trust to receive payments under the Intercreditor
Agreement and the Liquidity Facility (the "TRUST PROPERTY"). Each issue of the
Equipment Notes is secured by, among other things, a security interest in an
Aircraft leased to the Company.

            The Certificates represent Fractional Undivided Interests in the
Trust and the Trust Property and have no rights, benefits or interest in respect
of any other separate trust established pursuant to the terms of the Basic
Agreement for any other series of certificates issued pursuant thereto.

            Subject to and in accordance with the terms of the Agreement and the
Intercreditor Agreement, from funds then available to the Trustee, there will be
distributed on each January 2 and July 2 (a "REGULAR DISTRIBUTION DATE")
commencing July 2, 2004, to the Person in whose name this Certificate is
registered at the close of business on the 15th day preceding the Regular
Distribution Date, an amount in respect of the Scheduled Payments on the
Equipment Notes due on such Regular Distribution Date, the receipt of which has
been confirmed by the Trustee, equal to the product of the percentage interest
in the Trust evidenced by this Certificate and an amount equal to the sum of
such Scheduled Payments. Subject to and in accordance with the terms of the
Agreement and the Intercreditor Agreement, in the event that Special Payments on
the Equipment Notes are received by the Trustee, from funds then available to
the Trustee, there shall be distributed on the applicable Special Distribution
Date, to the Person in whose name this Certificate is registered at the close of
business on the 15th day preceding the Special Distribution Date, an amount in
respect of such Special Payments on the Equipment Notes, the receipt of which
has been confirmed by the Trustee, equal to the product of the percentage
interest in the Trust evidenced by this Certificate and an amount equal to the
sum of such Special Payments so received. If a Regular Distribution Date or
Special Distribution Date is not a Business Day, distribution shall be made on
the immediately following Business Day with the same force and effect as if made
on such Regular Distribution Date or Special Distribution Date and no interest
shall accrue during the intervening period. The Trustee shall mail notice of
each Special Payment and the Special Distribution Date therefor to the
Certificateholder of this Certificate.

            Distributions on this Certificate will be made by the Trustee by
check mailed to the Person entitled thereto, without presentation or surrender
of this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of a Clearing
Agency (or its nominee), such distribution shall be made by wire transfer.
Except as otherwise provided in the Agreement and notwithstanding the above, the
final distribution on this Certificate will be made after notice mailed by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Certificate at the office or agency of the Trustee specified
in such notice.

            The Certificates do not represent a direct obligation of, or an
obligation guaranteed by, or an interest in, the Company or the Trustee or any
affiliate thereof. The Certificates are limited in right of payment, all as more
specifically set forth on the face hereof and in the Agreement. All payments or
distributions made to Certificateholders under the Agreement shall be made only

<PAGE>

from the Trust Property and only to the extent that the Trustee shall have
sufficient income or proceeds from the Trust Property to make such payments in
accordance with the terms of the Agreement. Each Certificateholder of this
Certificate, by its acceptance hereof, agrees that it will look solely to the
income and proceeds from the Trust Property to the extent available for
distribution to such Certificateholder as provided in the Agreement. This
Certificate does not purport to summarize the Agreement and reference is made to
the Agreement for information with respect to the interests, rights, benefits,
obligations, privileges, and duties evidenced hereby. A copy of the Agreement
may be examined during normal business hours at the principal office of the
Trustee, and at such other places, if any, designated by the Trustee, by any
Certificateholder upon request.

            The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Certificateholders under the Agreement at any time
by the Company and the Trustee with the consent of the Certificateholders
holding Certificates evidencing Fractional Undivided Interests aggregating not
less than a majority in interest in the Trust. Any such consent by the
Certificateholder of this Certificate shall be conclusive and binding on such
Certificateholder and upon all future Certificateholders of this Certificate and
of any Certificate issued upon the transfer hereof or in exchange hereof or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Certificateholders of any of
the Certificates.

            As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the Register
upon surrender of this Certificate for registration of transfer at the offices
or agencies maintained by the Trustee in its capacity as Registrar, or by any
successor Registrar, duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Trustee and the Registrar, duly executed by
the Certificateholder hereof or such Certificateholder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate Fractional Undivided Interest in the
Trust will be issued to the designated transferee or transferees.

            The Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 Fractional Undivided Interest
and integral multiples thereof except that one Certificate may be issued in a
different denomination. As provided in the Agreement and subject to certain
limitations therein set forth, the Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
Fractional Undivided Interest in the Trust, as requested by the
Certificateholder surrendering the same.

            No service charge will be made for any such registration of transfer
or exchange, but the Trustee shall require payment of a sum sufficient to cover
any tax or governmental charge payable in connection therewith.

            Each Certificateholder and Investor, by its acceptance of this
Certificate or a beneficial interest herein, agrees to treat the Trust as a
grantor trust for all U.S. federal, state and local income tax purposes.

<PAGE>

            The Trustee, the Registrar, and any agent of the Trustee or the
Registrar may treat the person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Trustee, the Registrar, nor
any such agent shall be affected by any notice to the contrary.

            The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon the distribution to
Certificateholders of all amounts required to be distributed to them pursuant to
the Agreement and the disposition of all property held as part of the Trust
Property.

            Any Person acquiring or accepting this Certificate or an interest
herein will, by such acquisition or acceptance, be deemed to have represented
and warranted to and for the benefit of each Owner Participant and the Company
that either: (i) the assets of an employee benefit plan subject to Title I of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or of
a plan subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "CODE"), have not been used to purchase this Certificate or an interest
herein or (ii) the purchase and holding of this Certificate or an interest
herein are exempt from the prohibited transaction restrictions of ERISA and the
Code pursuant to one or more prohibited transaction statutory or administrative
exemptions.

            THE AGREEMENT AND THIS CERTIFICATE HAVE BEEN DELIVERED IN THE STATE
OF NEW YORK AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

            Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.

<PAGE>

            IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed.

                                    CONTINENTAL AIRLINES PASS THROUGH
                                    TRUST 2003-ERJ1

                                    By:   WILMINGTON TRUST COMPANY,
                                          as Trustee

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title:

<PAGE>

                   THE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

            This is one of the Certificates referred to in the within-mentioned
Agreement.

                                    WILMINGTON TRUST COMPANY,
                                        as Trustee

                                    By:
                                       -----------------------------------------
                                       Name:
                                       Title:Exhibit 10.1

ARRANGEMENT AGREEMENT

 

between

ALLIED GOLD LIMITED

- and -

NORD PACIFIC LIMITED

 

 

 

December 20, 2003

Execution Copy

 

TABLE OF CONTENTS

	
    
	
    
	
   Page

	
    
	
    
	
    

	
   ARTICLE 1
	
             INTERPRETATION
	
     1

	
         1.1
	
   Definitions
	
     1

	
         1.2
	
   Knowledge
	
     9

	
         1.3
	
   Interpretation Not Affected by Headings, Etc
	
   10

	
         1.4
	
   Article References
	
   10

	
         1.5
	
   Number, Etc
	
   10

	
         1.6
	
   Date For Any Action
	
   10

	
         1.7
	
   Currency
	
   10

	
         1.8
	
   Entire Agreement
	
   10

	
   ARTICLE 2
	
             THE ARRANGEMENT
	
   11

	
         2.1
	
   Arrangement
	
   11

	
         2.2
	
   Interim Order
	
   11

	
         2.3
	
   Alternative Structure
	
   11

	
   ARTICLE 3
	
             REPRESENTATIONS AND WARRANTIES
	
   12

	
         3.1
	
   Representations and Warranties of Nord
	
   12

	
         3.2
	
   Representations and Warranties of Allied
	
   22

	
   ARTICLE 4
	
             COVENANTS OF NORD
	
   24

	
         4.1
	
   Conduct of Business
	
   24

	
         4.2
	
   Non-Solicitation
	
   30

	
         4.3
	
   Superior Proposal
	
   31

	
         4.4
	
   Access to Information
	
   34

	
   ARTICLE 5
	
             COVENANTS OF ALLIED
	
   34

	
         5.1
	
   Covenants of Allied
	
   34

	
   ARTICLE 6
	
             MUTUAL COVENANTS
	
   36

	
         6.1
	
   Mutual Covenants of Nord and Allied
	
   36

	
   ARTICLE 7
	
             CONDITIONS PRECEDENT
	
   37

	
         7.1
	
   Mutual Conditions Precedent
	
   37

	
         7.2
	
   Conditions to Obligation of Nord
	
   39

	
         7.3
	
   Conditions to Obligation of Allied
	
   40

	
         7.4
	
   Notice of Non-Compliance
	
   43

	
         7.5
	
   Satisfaction of Conditions
	
   43

	
         7.6
	
   Adjustments in Event of Change in Allied Shares
	
   44

	
   ARTICLE 8
	
             AMENDMENT
	
   44

	
         8.1
	
   Amendment
	
   44

	
   ARTICLE 9
	
             TERMINATION AND REMEDIES
	
   44

	
         9.1
	
   Termination
	
   44

	
         9.2
	
   Effect of Termination
	
   45

	
         9.3
	
   Limitation
	
   45

	
         9.4
	
   Allied Termination Event
	
   45

	
         9.5
	
   Nord Termination Event
	
   46

	
         9.6
	
   Liquidated Damages
	
   46

	
         9.7
	
   Judgment Currency
	
   46

-i-

TABLE OF CONTENTS

(continued)

	
    
	
    
	
    
	
    

	
    	
    	
    	
    
	
    	
    	
    	
    
	
    
	
    
	
    
	
   Page

	
   ARTICLE 10
	
             GENERAL
	
    
	
   47

	
      10.1
	
   Notices
	
    
	
   47

	
      10.2
	
   Survival
	
    
	
   48

	
      10.3
	
   Binding Effect and Assignment
	
   48

	
      10.4
	
   Public Disclosure
	
    
	
   49

	
      10.5
	
   Expenses
	
    
	
   49

	
      10.6
	
   Time of Essence
	
    
	
   49

	
      10.7
	
   Governing Law
	
    
	
   49

	
      10.8
	
   Counterparts
	
    
	
   49

	
      10.9
	
   Further Assurances
	
    
	
   50

	
    
	
    
	
    
	
    

	
   SCHEDULE 1
	
    
	
   51

	
   ARTICLE 1
	
             INTERPRETATION
	
   51

	
      1.1
	
   Definitions
	
    
	
   51

	
      1.2
	
   Interpretation Not Affected by Headings, Etc
	
   53

	
      1.3
	
   Article References
	
    
	
   53

	
      1.4
	
   Number, Etc
	
    
	
   53

	
   ARTICLE 2
	
             THE ARRANGEMENT
	
   53

	
      2.1
	
   Arrangement
	
    
	
   53

	
      2.2
	
   Fractional Shares
	
    
	
   54

	
   ARTICLE 3
	
             RIGHTS OF DISSENT
	
   55

	
      3.1
	
   Rights of Dissent
	
    
	
   55

	
   ARTICLE 4
	
             SHARE CERTIFICATES AND CASH PAYMENTS
	
   55

	
      4.1
	
   Rights of Holders
	
    
	
   55

	
      4.2
	
   Transmittal
	
    
	
   56

	
      4.3
	
   No Entitlement
	
    
	
   56

	
      4.4
	
   Termination of Rights
	
    
	
   56

	
      4.5
	
   Distributions
	
    
	
   56

-ii-

ARRANGEMENT AGREEMENT

THIS
AGREEMENT made as of the 20th day of December, 2003

BETWEEN:

ALLIED GOLD
LIMITED, a corporation continued 

under the laws of
Western Australia ("Allied")

- and -

NORD PACIFIC
LIMITED, a corporation continued 

under the laws of
New Brunswick ("Nord")

WHEREAS Nord
intends to propose to its securityholders an arrangement under Section 128
of the Business Corporations Act (New Brunswick) on the terms and
conditions of the Plan of Arrangement annexed hereto as Schedule 1;

AND WHEREAS the
parties hereto have entered into this Agreement to provide for the matter
referred to in the foregoing recital and for other matters relating to such
arrangement;

NOW THEREFORE
THIS AGREEMENT WITNESSES THAT in consideration of the premises and the
respective covenants and agreements herein contained, the parties hereto
covenant and agree as follows:

ARTICLE 1

INTERPRETATION

1.1       Definitions

In this
Agreement, unless there is something in the subject matter or context
inconsistent therewith, the following terms shall have the following meanings:

"Acquisition Proposal"
has the meaning ascribed thereto in subsection 4.2;

"Acquisition Transaction"
has the meaning given thereto in Section 4.2;

"Act" means the Business
Corporations Act, S.N.B. 1981, c. B‐9.1, as amended;

"affiliate" has
the meaning ascribed thereto in the Act;

"Allied"
means Allied Gold Limited, a corporation continued under the laws of Western
Australia;

 

2

 

"Allied Financial
Statements" means the audited consolidated financial statements of Allied
for the year ended December 31, 2003, including the notes thereto;

"Allied Meeting"
means the special meeting of the holders of Allied Shares (including any
adjournment thereof) to be held to consider and, if thought fit, to approve the
Arrangement or any other matter required for the implementation of the
Arrangement;

"Allied Shares"
means common shares of Allied;

"Allied Termination Event"
has the meaning given thereto in Section 9.4;

"Amended Transaction"
has the meaning given thereto in Section 4.3;

"Arrangement"
means an arrangement under the provisions of Section 128 of the Act on the
terms and conditions set forth in the Plan of Arrangement;

            "ASX" means
the Australian Stock Exchange;

"Australex" means
Nord Australex Nominees (PNG) Limited, a corporation organized under the laws
of Papua New Guinea, and which is a wholly-owned subsidiary of Nord;

"Australian GAAP"
means generally accepted accounting principles as in effect in Australia from
time to time, applied on a basis consistent with that of prior periods;

"Australian
Securities Laws" means all applicable securities laws in Australia and
the respective regulations or rules made thereunder, together with applicable
published policy statements, orders, rulings, notices and interpretation notes
of the Australian Securities and Investments Commission ("ASIC");

"Board Approval
Modification" means the Board of Directors of Nord approving,
recommending or voting in favor of an Acquisition Proposal other than that of
Allied or withdrawing or modifying in a manner adverse to Allied its approval,
recommendation or support of the Arrangement;

"business day"
means a day other than a Saturday, Sunday or a day when banks in Albuquerque,
New Mexico generally are not open for business;

"Canadian GAAP"
means generally accepted accounting principles as in effect in Canada from time
to time, applied on a basis consistent with that of prior periods;

"Canadian
Securities Laws" means all applicable securities laws in each of the
provinces of British Columbia, Alberta, Ontario and New Brunswick and the
respective regulations or rules made thereunder, together with applicable
published policy statements, orders, rulings, notices and interpretation notes
of the securities regulatory authorities in such province, including national
instruments, multi-jurisdictional instruments and policy statements of the
Canadian Securities Administrators;

 

3

 

"Cease
Trade Orders" means the cease trade orders issued by the Alberta
Securities Commission on August 17, 2001; by the British Columbia
Securities Commission on February 19, 2002; and by a temporary order
issued by the Ontario Securities Commission on July 23, 2001, as extended
by a further order dated August 3, 2001;

"CMNP"
means Compania Minera Nord Pacific De Mexico, S.A. de C.V., a corporation
organized under the laws of Mexico;

"Competition Act"
means the Competition Act, R.S.C. 1985, c. C‐34, as amended;

"Confidentiality Agreement"
means the confidentiality agreement dated as of November 24, 2003 between
Allied and Nord;

"Court" means the
Court of Queen's Bench of New Brunswick;

"Credit
Agreement" means the Credit Facility Agreement dated December 20,
2003 between Nord and Allied, under which Allied has agreed to provide certain
financing to Nord in exchange for convertible notes issued to it by Nord;

"Dissenting Securityholders"
means Nord Securityholders who exercise, and do not prior to the Effective Date
withdraw or otherwise relinquish, the right of dissent available to such
holders in respect of the special resolution to be placed before the Nord
Securityholders at the Nord Meeting to approve the Arrangement;

"Effective Date"
means the date on which the Arrangement becomes effective under the Act;

"EL 609" means
Exploration License 609 which covers substantially all of the Tabar
Islands other than Simberi Island as well as that portion of Simberi Island not
covered by ML 136, as more particularly described in the Nord Disclosure Letter;

"Employment Agreements"
mean all employment, severance, collective bargaining or similar agreements,
policies or arrangements between Nord and the Nord Subsidiaries and their
respective officers, directors, employees and consultants;

"Encumbrance"
includes, without limitation, any mortgage, pledge, assignment, charge (fixed
or floating), lien, security interest, claim or trust, or any royalty, carried,
working, participation, net profits or other third party interest and any
agreement, option, right or privilege capable of becoming any of the foregoing;

 

4

"Environmental Law"
includes any principles of equity or common law and any federal, provincial,
state, municipal or local laws, statutes, ordinances, regulations, rules,
permits, approvals, certificates, registrations, by-laws, guidelines, orders,
directives, judgments, decisions or other instruments having the force of law
which are rendered or issued by any Governmental Authority having jurisdiction,
including but not limited to any judicial or administrative order, consent,
decree, judgment or directive, that relates in any way to the protection of the
environment or to the health and safety of persons or property or product
liability, handling or transportation, and whether applying to or governing any
actual or threatened presence, release, discharge, escape, manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
recycling or handling of any Hazardous Material or any material or substance
capable of becoming a Hazardous Material when in combination with any other
substance; 

"Facility
Documents" means:

(a)    the Credit Agreement,

(b)    the Notes evidencing advances thereunder, and

(c)   such other documents and certificates which in
the opinion of Allied, acting reasonably, are required to fully document or
satisfy the terms and conditions contained in the Credit
Agreement;

"Final Order"
means the final order of the Court approving the Arrangement, as such order may
be amended or modified by the highest court to which an appeal may be applied
for;

"Financing" means
the financing contemplated by the Credit Agreement;

"Government" means
the Government of Papua New Guinea;

"Governmental Authority"
includes any federal, provincial, state, municipal, or other political
subdivision, government department, commission, board, court, bureau, agency,
arbitrator or instrumentality, domestic or foreign;

"Hazardous Material"
means pollutants, contaminants, dangerous goods or substances, toxic or
hazardous chemicals, substances, materials or waste, petroleum products or any
derivatives or by-products thereof, other hydrocarbons or other substances, and
any other substance or material released into or present in the environment,
where such release or presence is prohibited, controlled, managed or regulated
in any manner under Environmental Law or by any Governmental Authority
thereunder or pursuant thereto, and whether or not any release of such
substance or material was permitted by Environmental Law applicable at the
relevant time;

"Hicor" means
Hicor Corporation, a corporation organized under the laws of Delaware;

 

5

"HSR Act" means
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 of the United
States, as amended;

"Interim Order"
means the order of the Court providing for, among other things, the calling and
holding of the Nord Meeting;

"Investment Canada Act"
means the Investment Canada Act, R.S.C. 1985, c. 28 (1st Supp.);

"Joint Information Circular"
means the information circular to be sent by Nord to Nord Securityholders in
connection with the Nord Meeting and by Allied to the holders of Allied Shares
in connection with the Allied Meeting;

"Joint
Venture" means the Simberi Mining Joint Venture and the Tabar
Exploration Joint Venture;

"Joint Venture Agreements"
means the agreement dated November 29, 2002, as amended by an agreement
among such parties dated January 27, 2003, the Deed of Agreement among
such parties (dated 28.01.2003 in the footer of the text thereof) with respect
to the Simberi Mining Joint Venture and the Deed of Agreement among such
parties (dated 28.01.2003 in the footer of the text thereof) with respect to
the Tabar Exploration Joint Venture;

"Joint Venture Partner"
means each of Nord, SGC, Australex and PGM;

"Lien" means any mortgage, pledge, priority, security interest,
encumbrance, statutory deemed trust, contractual deposit or escrow arrangement,
collateral account, lien (statutory or otherwise) or charge of any kind
(including any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any lease in the nature thereof including a
sale-leaseback and a capitalized lease) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation, but
excluding any right of set-off given in the ordinary course of the mining
business;

"Material Adverse Effect"
and "Material Adverse Change" mean, with respect to any party,
an effect or change, respectively, in each case which is materially adverse to
the business, financial condition, operations, property, condition (financial
or otherwise) or prospects of such party and its subsidiaries, taken as a
whole, or on the ability of a party to perform its obligations under this
Agreement, the Credit Agreement or to complete this Arrangement;

"ML 136" means the
mining lease granted by the Government covering 2,560 hectares on Simberi
Island in the Province of New Ireland, as more particularly described in the Nord Disclosure Letter;

"NANPL" means Nord
Australex Nominees Pty. Ltd., a corporation organized under the laws of
Australia;

 

6

 

"Nord" means Nord Pacific
Limited, a corporation organized under the Act, and includes any successor
corporation;

"Nord 2003 Financial
Statements" means the audited consolidated financial statements of
Nord for the year ended December 31, 2003, including the notes thereto;

"Nord
Disclosure Letter" means the written disclosure letter dated the date
of this Agreement provided by Nord to Allied concurrently with the execution of
this Agreement;

"Nord Meeting"
means the special meeting of Nord Securityholders (including any adjournment
thereof) to be held to consider and, if thought fit, to approve the
Arrangement;

"Nord Optionholders"
means the holders of Nord Options;

"Nord Options"
means the options to purchase Nord Shares issued and outstanding or any
agreement to issue shares on the occurrence of one or more conditions in
existence under the Nord Stock Option Plans or otherwise;

"Nord Prior Period
Financial Statements" means the audited consolidated financial
statements of Nord for the years ended December 31, 2002, December 31,
2001 and December 31, 2000 including the notes thereto;

"Nord Securityholders"
means the Nord Shareholders and the Nord Optionholders;

"Nord Shareholders"
means the registered holders of Nord Shares;

"Nord Shares"
means common shares of Nord;

"Nord Stock Option Plans"
means the stock option plans of Nord as set forth in the Disclosure Letter;

"Nord Subsidiaries"
means, collectively, SGC, Australex, NANPL, NRPPL, CMNP and Hicor;

"NRC" means Nord
Resources Corporation, a corporation incorporated under the laws of Delaware
and a holder of 3,697,561 Nord Shares as of December 15, 2003;

"NRPPL" means Nord
Resources (Pacific) Pty. Ltd., a corporation organized under the laws of
Australia;

 

7

 

"Permitted
Encumbrances" means: 

(a)   Liens in any judicial proceedings filed against Nord or any of the Nord Subsidiaries in respect of which final judgment has not
been rendered and which Nord or any of the Nord Subsidiaries shall be
contesting in good faith if and for so long as (i) a stay of enforcement
of such Lien (if enforceable by seizure, sale or other remedy against any
property), as the case may be, shall be in effect and (ii) in respect of
all such Liens which are in excess of $50,000 in the aggregate, an amount in
cash (or cash equivalent security) sufficient to obtain a discharge thereof
shall have been deposited with a court of competent jurisdiction;

(b)   Liens incurred or created in the ordinary course
of business of Nord or any of the Nord Subsidiaries and in accordance with
sound industry practice and incidental to construction or operations which have
not at such time been filed pursuant to law or which relate to obligations not
due or delinquent;

(c)   Liens incurred or created in the ordinary course
of business and in accordance with sound industry practice in respect of any of
the assets of Nord or any of the Nord Subsidiaries as security in favour of any
other person who is conducting the exploration, development or operation of the
property to which such Liens relate for Nord's or any of the Nord Subsidiaries'
portion of the costs and expenses of such exploration, development or operation
which have not at such time been filed pursuant to law or which relate to
obligations not due or delinquent;

(d)   Liens given to a public utility or any
municipality or governmental or other authority when required by such public
utility or municipality or other authority in connection with the operations of Nord or any of the Nord Subsidiaries, and which relate to obligations not due
or delinquent;

(e)  Liens securing assessments under workers' compensation
laws, unemployment insurance or similar social security legislation which are
not due or delinquent;

(f)    Liens for penalties arising under ordinary
course non-participation provisions of operating agreements in respect of Nord
or any of  the Nord Subsidiaries mining properties (and related tangibles)
which do not, individually or in the aggregate, materially detract from the use
or value of the property subject thereto;

(g)   undetermined or inchoate Liens incidental to
operations in the ordinary course of business which have not been filed
pursuant to law against title to such properties or assets and which relate to
obligations not due or delinquent; and

 

8

 

(h)   any security granted under the terms of the
Joint Venture Agreements by Nord, SGC or Australex to PGM or to lenders to the
Joint Venture;

"person" includes
any individual, partnership, firm, trust, body corporate, government,
governmental body, agency or instrumentality, unincorporated body or
association; 

"PGM" means PGM
Ventures Corporation, a corporation organized under the Act;

"Plan of Arrangement"
means the plan of arrangement set out as Schedule 1 hereto and any
amendment thereto made in accordance with Section 8.1;

"Proposed Agreement"
has the meaning given thereto in Section 4.3;

"Registrar" means the
Director of Corporations or a Deputy Director of Corporations for the Province
of New Brunswick, duly appointed under the Act;

"Representative"
means, with respect to a person, that person's directors, officers, employees,
financial or professional advisors, accountants and all other authorized
representatives of such person or a subsidiary of such person, and legal
counsel and advisors to any of the foregoing;

"SEC" means the
United States Securities and Exchange Commission;

"Security Interest"
means a mortgage, pledge, deposit by way of security, charge, hypothec,
assignment by way of security, security interest, lien (whether statutory,
equitable or at common law), title retention agreement, possessory lien, lease
with option or requirement to purchase, a right of off‐set (if created
for the purpose of directly or indirectly securing the repayment of debt), the
rights of a lender or purchaser under a prepaid obligation, the agreement to
give any of the foregoing, and any other interest in property or assets,
howsoever created or arising, that secures payment or performance of an
obligation (including a lease without option to purchase if the economic effect
thereof is to secure an obligation other than reasonable rent for the current
use of the leased property, and a trust, a statutory deemed trust and statutory
lien or charge);

"SGC" means
Simberi Gold Company Limited, a corporation organized under the laws of Papua
New Guinea and which is a wholly-owned subsidiary of Nord;

"Simberi Mining Joint
Venture" means the Simberi Mining Joint Venture among Nord, SGC,
Australex and PGM pursuant to the Joint Venture Agreements;

"subsidiary" has
the meaning ascribed thereto in the Act and, with respect to Nord, includes the
Nord Subsidiaries;

"Superior Transaction"
has the meaning given thereto in Section 4.3;

 

9

 

"Tabar
Exploration Joint Venture" means the exploration joint venture among
Nord, SGC, Australex and PGM pursuant to the Joint Venture Agreements;

"Termination
Amount" means an amount equal to the sum of:

(a)   Allied's actual out of pocket expenses
(including fees and disbursements of legal counsel) incurred in connection with
this Agreement, the Arrangement, and the transactions contemplated thereby;

(b)   if requested by Allied, all amounts (including
principal and accrued but unpaid interest) due and owing under the Credit
Agreement; and

(c)   $240,000.00;

"U.S. Exchange Act"
means the United States Securities Exchange Act of 1934, as amended;

"U.S. GAAP" means
generally accepted accounting principles as in effect in the United States from
time to time applied on a basis consistent with that of prior periods;

"U.S. Securities Act"
means the United States Securities Act of 1933, as amended;

"U.S. Securities Filings"
means all forms, reports, schedules, statements and other documents required to
be filed by it with the SEC, collectively, as supplemented and amended since
the time of filing; and

"U.S. Securities Laws"
means the U.S. Securities Act, the U.S. Exchange Act, the United States Investment
Company Act of 1940, as amended, the United States Trust Indenture Act
of 1939, as amended and applicable state securities and "blue
sky" laws, and the rules, regulations, forms, policies and orders adopted
by the SEC and other Governmental Authorities pursuant thereto.

1.2       Knowledge

The use in this
Agreement of the phrases "Nord's knowledge", "knowledge of
Nord" and "known to Nord" with respect to any matter or thing
shall be interpreted to mean the actual knowledge of the senior officers of
Nord after enquiry by such officers of the management, employees and
consultants of Nord and the Nord Subsidiaries who have significant
responsibilities with respect to the area of business of Nord and the Nord
Subsidiaries to which the matter relates or who would reasonably be expected to
have knowledge with respect to such matter, and the phrases "Allied's
knowledge", "knowledge of Allied" and "known to
Allied" have a corresponding meaning.

10

 

1.3       Interpretation Not Affected by Headings, Etc.

The division of
this Agreement into articles, sections and other portions and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement. The terms "this
Agreement", "hereof", "herein" and
"hereunder" and similar expressions refer to this Agreement and the
Schedule hereto and not to any particular article, section or other portion
hereof and include any agreement or instrument supplementary or ancillary
hereto.

1.4       Article References

Unless the
contrary intention appears, references in this Agreement (excluding the Plan of
Arrangement) to an Article, Section, subsection, paragraph or subparagraph by
number or letter or both refer to the Article, Section, subsection, paragraph
or subparagraph, respectively, bearing that designation in this Agreement (excluding
the Plan of Arrangement).

1.5       Number, Etc.

Unless the
context requires the contrary, words importing the singular number only shall
include the plural and vice versa and words importing the use of any gender
shall include all genders.

1.6       Date For Any Action

If any date on
which any action is required to be taken hereunder by any of the parties hereto
is not a business day, such action shall be required to be taken on the next
succeeding day which is a business day.

1.7       Currency

Unless otherwise
stated, all references in this Agreement to "$" and sums of money are
expressed in lawful money of the United States.

1.8       Entire Agreement

This Agreement,
together with the Credit Agreement, constitutes the entire agreement among the
parties pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, among the parties with respect to the subject matter hereof.  If there
is any conflict between any provision of the Confidentiality Agreement and this
Agreement, the provisions of this Agreement shall prevail.

 

11

 

 

ARTICLE 2

THE ARRANGEMENT

2.1       Arrangement

As soon as
reasonably practicable, and subject to compliance with the terms and conditions
contained herein, Nord shall:

(a)   apply to the Court pursuant to Section 128 of the Act for an order approving the
Arrangement and in connection with such application shall:

(i)    forthwith file, proceed with and diligently
prosecute an application for an Interim Order under Section 128(4) of the Act providing for, among other
things, the calling and holding of the Nord Meeting for the purpose of
considering and, if deemed advisable, approving the Arrangement; and

(ii)   subject to obtaining securityholder approval as
contemplated in the Interim Order, forthwith file, proceed with and diligently
prosecute an application to the Court for a Final Order; and

(b)   deliver to the Registrar articles of arrangement
and such other documents as may be required to give effect to the Arrangement.

2.2       Interim Order

The Interim
Order sought by Nord shall provide that for the purpose of the Nord Meeting:

(a)   the securities of Nord for which the holders
shall be entitled to vote on the Arrangement shall be the Nord Shares and the
Nord Options;

(b)   the Nord Shareholders and the Nord Optionholders
shall be entitled to vote on the Arrangement together, and not as separate
classes, with the Nord Shareholders being entitled to one vote for each Nord
Share held and the Nord Optionholders being entitled to one vote for each Nord
Share issuable pursuant to the Nord Options; and

(c)   the requisite majority for the approval of the
Arrangement by the Nord Securityholders shall be two-thirds of the votes cast
by the Nord Securityholders present in person or by proxy at the Nord Meeting,
voting together.

2.3       Alternative Structure

If it proves desirable
to Allied to do so, Allied may carry out the Arrangement through a wholly-owned
subsidiary as long as the obligations of Allied hereunder shall be joint and
several with such subsidiary and the effect thereof shall be the same as under
the structure contemplated herein.

12

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

3.1       Representations and Warranties of Nord

Except as is
fully and fairly disclosed and set forth in the corresponding paragraph of the
Nord Disclosure Letter (and subject to the representation and warranties and
covenants made in the Nord Disclosure Letter), Nord represents and warrants to
and in favour of Allied as follows and acknowledges that Allied is relying upon
such representations and warranties in connection with the matters contemplated
by this Agreement:

(a)               
as of the date hereof, the board of directors of
Nord has determined unanimously that:

(i)  the Arrangement is fair to the Nord
Securityholders and is in the best interests of Nord; and

(ii) 
the board of directors of Nord will recommend
that the Nord Securityholders vote in favour of the Arrangement;

(b)   each of Nord and the Nord Subsidiaries is duly
incorporated and validly existing under the laws of its jurisdiction of
incorporation and has the corporate power to own or lease its property and
assets and to carry on business as now conducted;

(c)   Nord has the corporate power and authority to
enter into this Agreement and, subject to obtaining the requisite approvals
contemplated hereby, to perform its obligations hereunder;

(d)   this Agreement has been duly executed and delivered
by Nord and constitutes a valid and binding obligation of Nord enforceable
against it in accordance with its terms;

(e)  the execution and delivery of this Agreement by Nord and the completion of the transactions contemplated hereby and by the Plan
of Arrangement have been duly authorized by the board of directors of Nord and
do not and will not:

(i)    result in the breach of, or violate any term or
provision of, the articles or by-laws of Nord or any of the Nord Subsidiaries;

(ii)   conflict with, result in the breach of,
constitute a default under, or accelerate or permit the acceleration of the
performance required by, any agreement, instrument, license, permit or
authority to which Nord or any of the Nord Subsidiaries is a party or by which
Nord or any of the Nord Subsidiaries or any of their assets is bound, or result
in the creation of any Encumbrance upon any assets of Nord or any of the Nord
Subsidiaries under any such agreement, instrument, license, permit or
authority, or give to others any interest or right, including rights of
purchase, termination, cancellation or acceleration, under any such agreement,
instrument, license, permit or authority, where such conflict, breach, default,
acceleration, creation or giving would have a Material Adverse Effect on Nord
or could reasonably be expected to prevent or materially hinder the completion
of the Arrangement or the Financing; or

 

13

(iii)  violate or contravene any provision of any law
or regulation or any judicial or administrative award, judgment or decree
applicable to Nord or any of the Nord Subsidiaries or any of their assets,
where such violation or contravention would have a Material Adverse Effect on
Nord or could reasonably be expected to prevent or materially hinder the
completion of the Arrangement or the Financing;

(f)   the subsidiaries of Nord consist of (and only
of) the Nord Subsidiaries and Nord does not have any equity securities or have
the right to acquire equity securities of any other entity;

(g)   CMNP, Hicor, NRPPL, SGC and Australex are the
only subsidiaries of Nord which actively carry on business or have any assets
(other than tax pools) or liabilities or potential liabilities greater than
$100,000 other than inter-company indebtedness;

(h)   Nord owns all of the issued and outstanding
shares of the Nord Subsidiaries, and such shares have been validly issued to
Nord as fully paid and non-assessable and all such shares owned directly or
indirectly by Nord are owned free and clear of all Encumbrances and there are
no outstanding options, rights, entitlements, understandings or commitments
(contingent or otherwise) regarding the right to acquire any shares or other
ownership interests in any subsidiary of Nord save and except under the Deed of
Agreement among such parties (dated 28.01.2003 in the footer of the text thereof)
with respect to the Simberi Mining Joint Venture, PGM may pledge the shares of
SGC;

(i)    each of Nord, SGC and Australex and the other
Nord Subsidiaries has all licences, permits, orders or approvals of, and has
made all required registrations with any government or regulatory body that are
material to its assets or the conduct of its business as presently conducted;

 

14

 

(j)    the authorized capital of Nord consists of an
unlimited number of common shares, of which 20,838,670 (and no more) are issued
and outstanding as of the date hereof and all of the
outstanding shares of Nord are validly issued, fully paid and non-assessable;

(k)  no person has any agreement, option, right or
privilege (including, without limitation, whether by law, pre-emptive right,
contract or otherwise) to purchase, subscribe for, convert into, exchange for
or otherwise require the issuance of, nor any agreement, option, right or
privilege capable of becoming any such agreement, option, right or privilege,
any of the unissued shares of Nord or any of the Nord Subsidiaries, except for
Nord Options currently granted and outstanding to purchase an aggregate of
1,651,482 Nord Shares;

(l)    the Nord Prior Period
Financial Statements are complete and accurate in all
material respects, comply with all applicable requirements of Canadian
Securities Laws and U.S. Securities Laws, and present fairly the consolidated
financial position of Nord and the Nord Subsidiaries and the results of its
operations as of the dates and throughout the periods indicated in accordance with
U.S. GAAP (reconciled to Canadian GAAP), Nord and the Nord Subsidiaries had no
material liabilities (contingent or otherwise), on a consolidated basis, which
were not fully reflected in such statements in accordance with U.S. GAAP, and
all legal proceedings against Nord or any of the Nord Subsidiaries which are
required in accordance with U.S. GAAP to be reflected in Nord's financial
statements had been properly reflected in the Nord Prior Period Financial
Statements in accordance with such principles;

(m)  
neither Nord nor any of the Nord Subsidiaries
is:

(i)    in breach or violation of any of the provisions
of its articles or by‐laws, where such breach or violation would have a
Material Adverse Effect on Nord, or

(ii)   in breach or violation of any of the terms or
provisions of, or in default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement (written or oral) or instrument to which Nord
or any of the Nord Subsidiaries is a party or by which Nord or any of the Nord
Subsidiaries is bound or to which any of the assets of Nord or any of the Nord
Subsidiaries is subject or any statute or any order, rule or regulation of any
court or government or governmental agency or authority having jurisdiction
over Nord or any of the Nord Subsidiaries or any of their assets, where such
breach, violation or default has or may have a Material Adverse Effect on Nord,
or

 

15

 

(iii)   a party to or is bound by any agreement of
guarantee, indemnification, assumption or endorsement or any other like
commitment of the obligations, liabilities (contingent or otherwise) or
indebtedness of any other person;

except pursuant
to the Credit Agreement;

(n)   the corporate records and minute books of Nord
and the Nord Subsidiaries are complete and accurate in all material respects;

(o)  the books of account and other records of Nord
and the Nord Subsidiaries, whether of a financial or accounting nature or
otherwise:

(i)    have been maintained in accordance with prudent
business practices in all material respects, and

(ii)   are stated in reasonable detail and accurately
and fairly reflect in all material respects the transactions and acquisitions
and dispositions of assets by Nord and the Nord Subsidiaries;

(p)   neither Nord nor, to the knowledge of Nord, any
of its Representatives nor anyone acting on their behalf has made any payment
or given anything of value in violation of section 30A(a) of the U.S.
Exchange Act, commonly known as the "Foreign Corrupt Practices Act",
and Nord and the Nord Subsidiaries have devised and currently maintain a system
of internal accounting controls sufficient to provide reasonable assurances
that transactions are executed in accordance with management's general or
specific authorization, and transactions are recorded as necessary to permit
preparation of financial statements in conformity with U.S. GAAP and any other
criteria applicable to such financial statements and preparation of
non-consolidated financial statements for tax purposes, and to maintain
accountability for assets;

(q)   each of Nord and the Nord Subsidiaries owns its
properties and assets free and clear of all Security Interests other than
Permitted Encumbrances;

(r)   there are:

(i)   no claims, actions, suits, proceedings or
investigations commenced or, to the knowledge of Nord, contemplated or
threatened against or affecting Nord or any of the Nord Subsidiaries or any of
their assets before or by any Governmental Authority;

(ii)   to the knowledge of Nord, no existing facts or
conditions which may reasonably be expected to be a proper basis for any
claims, actions, suits, proceedings or investigations; and

 

16

 

(iii)  no outstanding judgments, awards, decrees,
injunctions or orders against Nord or any of the Nord Subsidiaries;

which in any
case could prevent or materially hinder the completion of the Arrangement or
the Financing or which could have a Material Adverse Effect on Nord;

(s)   other than in connection with or in compliance
with the provisions of the Act, Canadian Securities Laws and U.S. Securities
Laws:

(i)    there is no legal impediment to Nord's
consummation of the transactions contemplated by this agreement; and

(ii)    no filing or registration with, or
authorization, consent or approval of, any domestic or foreign public body or
authority is necessary by Nord or any of the Nord Subsidiaries in connection
with the consummation of the Arrangement, except for such filings or
registrations which, if not made, or for such authorizations, consents or
approvals, which, if not received, would not have a Material Adverse Effect on
the ability of Nord to consummate the transactions contemplated hereby;

(t)    the public filings made by Nord under applicable
United States and Canadian disclosure laws up to December 15, 2000 when taken
together, constituted full, true and plain disclosure of all material facts
relating to the business, operations and capital of Nord and the Nord Subsidiaries
on a consolidated basis and the other matters therein and did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements made therein
not misleading in light of the circumstances under which they were made and, in
particular, no material fact existed on December 15, 2000 which had not been
disclosed in such public filings and which if publicly disclosed would reflect
that a Material Adverse Change (or an event, condition or state of facts which
might reasonably have been expected to give rise to any such change) had
occurred in the assets, liabilities, business, operations or capital of Nord
and the Nord Subsidiaries on a consolidated basis;

(u)   since April 12, 2000, except as has been
publicly disclosed by Nord, none of Nord or any of the Nord Subsidiaries has:

(i)    amended its articles or by-laws;

(ii)  conducted its business other than in the
ordinary course of business consistent with normal industry practice;

(iii)  made any material loans or advances (other than
loans or advances from Nord to SGC and Australex) or incurred any indebtedness;

 

17

(iv)  suffered a Material Adverse Change;

(v)  made any change in its accounting principles and
practices as theretofore applied including, without limitation, the basis upon
which its assets and liabilities are recorded on its books and its earnings and
profits and losses are ascertained;

(vi)  made any changes to its salary and other
compensation levels, benefits, retention terms or severance arrangements;

(vii)  declared, paid or set aside for payment any
dividend or distribution of any kind in respect of any of its outstanding
shares nor made any repayments of share capital;

(viii)  acquired or sold any assets which are material; 

(ix)  made any payment to or entered into any
agreement with any person not dealing at arms length with Nord; or 

(x)  entered into any agreement or commitment to do
any of the foregoing;

(v)  Nord has fully disclosed the terms and
conditions of all Employment Agreements to Allied, and such Employment
Agreements, as disclosed, are unamended as at the date hereof;

(w)    neither Nord nor any of the Nord Subsidiaries:

(i)    has any Employment Agreements, whether written
or oral, which cannot be terminated without cause by Nord or such subsidiary,
as the case may be, upon giving such notice as may be required by law and
without the payment of any bonus, damages or penalty, and

(ii)   is a party to any written or oral policy,
agreement, obligation or understanding providing for severance or termination
payments to, or any employment agreements with, any person;

(x)    neither Nord nor any of the Nord Subsidiaries
has made, nor will any of them make any payment to any officer, director,
consultant, employee or agent in respect of any increase in compensation in any
form, nor make any loan to any such person, nor make any payment to any such
person in respect of any severance or termination pay arising from the
Arrangement or a change of control of Nord other than pursuant to pre-existing
agreements, and the amounts of such payments and the terms of such agreements
shall have been disclosed in the Nord Disclosure Letter;

 

18

 

(y)   all operations of Nord and the Nord Subsidiaries
have been and are now in compliance with all Environmental Laws, except where
the failure to be in compliance would not individually or in the aggregate have
a Material Adverse Effect on Nord;

(z)   neither Nord nor any of the Nord Subsidiaries is
aware of, or is subject to:

(i)   any proceeding, application, order, or directive
which relates to environmental, health or safety matters, and which may require
any material work, repairs, construction or expenditures; or 

(ii)   any demand or notice with respect to the breach
of any Environmental Laws applicable to Nord, any of the Nord Subsidiaries or
any other party to the Joint Venture, including, without limitation, any
regulations respecting the use, storage, treatment, transportation or
disposition of Hazardous Material,

which
individually or in the aggregate would have a Material Adverse Effect on Nord;

(aa)  each of Nord and the Nord Subsidiaries has filed
all tax returns and information returns required to be filed by it in all
applicable jurisdictions and has paid all taxes, levies, assessments,
reassessments, penalties, interest and fines due and payable by it on the basis
of such tax returns or demands from taxation authorities;

(bb) provision has been made, in accordance with U.S. GAAP, in the Nord Prior Period Financial Statements for all taxes, governmental
charges and assessments, whether relating to income, sales, real or personal
property, or other types of taxes, governmental charges or assessments,
including interest and penalties thereon, payable in respect of the business or
assets of Nord and the Nord Subsidiaries or otherwise;

(cc) there are no material actions, suits or other
proceedings or claims in progress or, to Nord's knowledge, pending or
threatened against Nord or any of the Nord Subsidiaries in respect of any
taxes, governmental charges or assessments and, in particular, there are no
currently outstanding material reassessments or written enquiries which have
been issued or raised by any Governmental Authority relating to any such taxes,
governmental charges and assessments;

(dd) to the knowledge of Nord, each of Nord and the
Nord Subsidiaries has withheld or collected and remitted all amounts required
to be withheld or collected and remitted by it in respect of any taxes,
governmental charges or assessments, and has received no indication or notice
of any sort from any Governmental Authority to the contrary;

 

19

(ee)  in respect of each taxation year ending on or
after December 31, 1998 of Nord, each of its affiliates and subsidiaries,
and the predecessors of such corporations, Nord has provided to Allied:

(i)    full and complete disclosure with respect to the
status of any audits carried out by taxation authorities in Canada, the United
States, Papua New Guinea or elsewhere;

(ii)   copies of all objections or waivers with respect
to such years pursuant to the Income Tax Act (Canada) or other similar
legislation, tax rulings and opinions from applicable taxing authorities
pursuant to which Nord, its affiliates and any predecessors of such
corporations operated or now operate; and

(iii)  copies of all tax returns;

which comprise
all of the information necessary to form a reasonably accurate understanding of
the current tax position of Nord and the Nord Subsidiaries;

(ff)   the tax pools of each of Nord, SGC, Australex
and the other Nord Subsidiaries as of December 31, 2002 was as set forth
in the Nord Disclosure Letter;

(gg) Nord and the Nord Subsidiaries maintain business
and property insurance in connection with their assets and business and
liability insurance with respect to claims for personal injury, death or
property damage in relation to the operation of their businesses, all with
responsible and reputable insurance companies in such amounts and with such
deductibles as are customary in the case of businesses of established
reputation engaged in the mining industry;

(hh)  none of Nord or the Nord Subsidiaries have any
outstanding indebtedness, including letters of credit, nor have Nord or the
Nord Subsidiaries guaranteed the obligations of any other person or each other,
as of the date hereof;

(ii)  Nord, SGC and Australex are the legal,
beneficial and registered owner of a current undivided 50% participating
interest in and to the Simberi Mining Joint Venture and a current 99%
participating interest in the Tabar Exploration Joint Venture (in the future
the Borrower's interest is subject to, and may be modified by, the terms of the
Joint Venture Agreements), free and clear of any Security Interests other than
Permitted Encumbrances; 

(jj)   none of Nord, SGC or Australex is in default of
any of their respective obligations under the Joint Venture Agreements or any
right, licence, permit, authorization or consent, governmental or otherwise
related to the Joint Venture;

 

20

(kk)  each of the Joint Venture Agreements is in full
force and effect and, to the best of Nord's knowledge, PGM is not in default of
any of its obligations thereunder; PGM currently does not have any right to
terminate any of the Joint Venture Agreements; PGM has not given any notice of
any assignment of its interest in the Joint Venture or any Joint Venture
Agreement; PGM has not threatened to terminate any Joint Venture Agreement or
to fail to perform any obligations thereunder; no person has threatened to
terminate any right, licence, permit, authorization or consent, governmental or
otherwise related to the Joint Venture;

(ll)   Nord has provided to Allied a true and complete
copy of each Joint Venture Agreement and each licence, permit, authorization or
consent, governmental or otherwise, issued in connection therewith and there
are no other material contracts or agreements that pertain to the Joint Venture
that are not one of the Joint Venture Agreements;

(mm) there are no material services, materials or
rights required for the current and foreseeable stages of development of the
Joint Venture that are not available to the Joint Venture Partners;

(nn)  all conditions precedent to the obligations of
the respective parties under the Joint Venture Agreements have been satisfied
or waived except for such conditions precedent which need not and cannot be
satisfied until a later stage of development of the Joint Venture, and Nord has
no reason to believe that any such condition precedent cannot be satisfied on
or prior to the commencement of the appropriate stage of development of the
Joint Venture;

(oo)  to the knowledge of Nord, all permits, licenses,
trademarks, patents or agreements with respect to the usage of technology or
other similar property that are necessary for the current stage of the
development of the Joint Venture have been obtained, are final and are in full
force and effect;

(pp) Nord is not aware of any event or circumstance
currently existing or threatened that could reasonably be expected to hinder
the development of the Joint Venture on its current schedule;

(qq)  the completion of the Arrangement and the
Financing (including all transactions contemplated by the Credit Agreement) will not result in any
person having any right or entitlement to assert any claims adverse to the
interest of Nord, SGC and Australex in the Joint Venture or the Joint Venture
Agreements;

(rr)    no person has any right or option to acquire any
of Nord's, SGC's or Australex's interest in the Joint Venture or the Joint
Venture Agreements other than under the express written terms of the Joint
Venture Agreements;

 

21

(ss)   no person has taken any steps or asserted or
threatened any action against Nord, SGC or Australex or the Joint Venture which
would, if carried out, hinder the development of the Joint Venture on its
current schedule;

(tt)   Nord, SGC and Australex have not failed to
disclose to Allied any information relating to the Joint Venture within the
possession or control of Nord, SGC or Australex that could reasonably be
considered to be material to Allied for purposes of its technical evaluation of
the Joint Venture;

(uu)   Nord, SGC and Australex have not failed to
disclose to Allied any material fact or circumstance relating to the
development of the Joint Venture on its current schedule that could reasonably
be expected to hinder or delay such development;

(vv)  to the knowledge of Nord, the data and
information in respect of Nord, the Nord Subsidiaries and their respective
assets, liabilities, business and operations, including without limitation the
engineering, geological, geophysical and technical information relating to the
Joint Venture, provided by Nord to Allied prior to the date of this Agreement
was accurate and correct in all material respects at the time it was provided
and did not omit any data or information necessary to make any data or
information provided not misleading at the time it was provided, and there has
been no Material Adverse Change with respect to any such data or information
since the time it was provided;

(ww) Nord has not incurred any obligation or
liability contingent or otherwise for brokerage fees, finders fees, agent's
commission, financial advisory fees or other similar forms of compensation with
respect to the transactions contemplated herein;

(xx)  Nord is a "reporting issuer" or its
equivalent in the provinces of British Columbia, Alberta, Ontario and New
Brunswick and the Nord Shares are registered with the SEC under section 12(g)
of the U.S. Exchange Act and are not listed on any stock exchange, and except
as disclosed in the Nord Disclosure Letter, Nord has not been notified of any default or possible or alleged
default by Nord or any of its current or former directors or officers of any
requirement of securities or corporate laws, regulations, rules, orders,
notices or policies; 

(yy)  none of the U.S. Securities Filings at the date
of its filing contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein not misleading in light of the circumstances in which
they were made and to the knowledge of Nord, all of Nord's officers, directors
and beneficial owners of Nord's common shares have complied to the extent
required, with sections 16(a) and 13(d) of the U.S. Exchange Act;

 

22

(zz)   neither Nord nor the Nord Subsidiaries nor, to
Nord's knowledge, any employee or agent of Nord or any of the Nord
Subsidiaries, has made any payment of funds of Nord or any of the Nord
Subsidiaries or received or retained any funds in violation of any law, rule or
regulation;

(aaa) since July 30, 2002, Nord has not, directly or
indirectly, including through any of the Nord Subsidiaries:  

(i)    extended credit, arranged to extend credit or
renewed any extension of credit, in the form of a personal loan, to or for any
director or executive officer of Nord, or to or for any family member or
affiliate of any director or executive officer of Nord; or 

(ii)   made any material modification, including any
renewal  thereof, to any term of any personal loan to any director or executive
officer of Nord, or any family member or affiliate of any director or executive
officer, which loan was outstanding on July 30, 2002; and

(bbb) neither Nord nor any of the Nord Subsidiaries
has any outstanding loans to or extensions of credit to, or any guarantee or
any indebtedness of, any employee, officer or director of Nord or any of the
Nord Subsidiaries.

3.2       Representations and Warranties of Allied

Allied
represents and warrants to and in favour of Nord as follows, and acknowledges
that Nord is relying upon such representations and warranties in connection
with the matters contemplated by this Agreement:

(a)   Allied is duly incorporated and validly existing
under the laws of its jurisdiction of incorporation and has the corporate power
to own or lease its property and assets and to carry on business as now
conducted;

(b)   Allied has the corporate power and authority to
enter into this Agreement and, subject to obtaining the requisite approvals
contemplated hereby, to perform its obligations hereunder;

(c)   subject to the approval of the holders of the
Allied Shares at the Allied Meeting, all necessary corporate action on the part
of Allied has been taken to authorize the execution and delivery of this
Agreement by Allied and the completion of the transactions contemplated hereby
and by the Plan of Arrangement, and this Agreement has been duly executed and
delivered by Allied and constitutes a valid and binding obligation of Allied
enforceable against it in accordance with its terms;

 

23

 

(d)  the execution and delivery of this Agreement by
Allied and the completion of the transactions contemplated hereby and by the
Plan of Arrangement do not and will not:

(i)    
result in the breach of, or violate any term or
provision of, the articles or by-laws of Allied;

(ii)   conflict with, result in the breach of,
constitute a default under, or accelerate or permit the acceleration of the
performance required by, any agreement, instrument, license, permit or
authority to which Allied is a party or is bound, or result in the creation of
any Encumbrance upon any assets of Allied under any such agreement, instrument, licence, permit or authority, or give to others any interest or right,
including rights of purchase, termination, cancellation or acceleration, under
any such agreement, instrument, license, permit or authority, where such conflict,
breach, default, acceleration, creation or giving would have a Material Adverse
Effect on Allied or could reasonably be expected to prevent or materially
hinder the completion of the Arrangement; or

(iii)  violate or contravene any provision of any
Australian law or regulation or any judicial or administrative award, judgment
or decree known to Allied, where such violation or contravention would have a
Material Adverse Effect on Allied or could reasonably be expected to prevent or
materially hinder the completion of the Arrangement;

(e)   the authorized capital of Allied consists of an
unlimited number of Allied Shares, of which 28,500,000 (and no more) are issued
and outstanding as of the date hereof;

(f)   as of the date of this Agreement, no person has
any agreement, right or option, or any privilege capable of becoming an
agreement, right or option, for the purchase or issuance of any unissued shares
of Allied or any material subsidiary of Allied, except for options to purchase
18,500,000 Allied Shares;

(g)   neither Allied nor any of its subsidiaries is:

(i)    in breach or violation of any of the provisions
of its articles or by‐laws,  where such breach or violation would have a
Material Adverse Effect on Allied; or

(ii)   in breach or violation of any of the terms or
provisions of, or in default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement (written or oral) or instrument to which
Allied is a party or by which Allied is bound or to which any of the properties
or assets of Allied is subject or any statute or any order, rule or regulation
of any court or government or governmental agency or authority having
jurisdiction over Allied or any of its properties or assets, where such breach,
violation or default has or may have a Material Adverse Effect on Allied;

24

(h)           there are:

(i)    no claims, actions, suits, proceedings or
investigations commenced or, to the knowledge of Allied, contemplated or
threatened against or affecting Allied or any of its subsidiaries, before or by
any Governmental Authority;

(ii)   to the knowledge of Allied, no existing facts or
conditions which may reasonably be expected to be a proper basis for any
claims, actions, suits, proceedings or investigations; and

(iii)  no outstanding judgments, awards, decrees,
injunctions or orders against Allied or any of its subsidiaries;

which in any
case could prevent or materially hinder the completion of the Arrangement or
the Financing or which could have a Material Adverse Effect on Allied;

(i)    the Prospectus of Allied dated 20 October 2003
and the disclosure provided in this Agreement, when taken together, constitute
full, true and plain disclosure of all material facts relating to the business,
operations and capital of Allied and its subsidiaries on a consolidated basis
and the other matters therein and do not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein not misleading in
light of the circumstances under which they were made and, in particular, no material
fact exists on the date hereof which has not been disclosed in the public
filings made by Allied and which if publicly disclosed would reflect that a
Material Adverse Change (or an event, condition or state of facts which might
reasonably have been expected to give rise to any such change) had occurred in
the assets, liabilities, business, operations or capital of Allied and its
subsidiaries on a consolidated basis; and

ARTICLE 4

COVENANTS OF NORD

4.1       Conduct of Business

Nord covenants
in favour of Allied that prior to the Effective Date it shall, and it shall
cause each of the Nord Subsidiaries to, do, take or perform or refrain from
doing, taking and performing such actions and steps as may be necessary or
advisable to ensure compliance with the following:

25

(a)   subject to Section 4.3, neither Nord nor
any of the Nord Subsidiaries will take any action which might, directly or
indirectly, interfere or be inconsistent with or otherwise adversely affect the
completion of the Arrangement or the Financing and, without limiting the
generality of the foregoing, subject to Section 4.3, each of Nord, SGC and
Australex: 

(i)    will carry on its business in, and only in, the
ordinary course in substantially the same manner as heretofore conducted and,
to the extent consistent with such business, use all reasonable efforts to
preserve intact its present business organization, licences and permits to the
end that its goodwill and business shall be maintained;

(ii)   will not declare any dividends on or make any
other distributions in respect of its outstanding securities and Nord will not
amend its articles or by‐laws;

(iii)  will not, without prior written consent of
Allied, issue, authorize or propose the issuance of, or purchase or redeem or
propose the purchase or redemption of, any of its shares of any class or
securities convertible into or rights, warrants or options to acquire any such
shares or other exchangeable or convertible securities, other than the issue of
shares pursuant to the exercise of presently outstanding Nord Options or the
issue of securities to Allied;

(iv)  will not reorganize, amalgamate or merge with
any other person, corporation, partnership or other business organization
whatsoever;

(v)   will not adopt a plan of liquidation or
resolutions providing for its liquidation, dissolution, merger, amalgamation,
consolidation or reorganization;

(vi)  will not relinquish any material contractual
rights or enter into any interest rate, currency or commodity swaps, hedges or
other similar financial instruments;

(vii) will not, without the prior written consent of
Allied, which shall not be unreasonably withheld, settle any material actions,
claims or liabilities;

(viii) will not, without the prior written consent of
Allied, sell, transfer, assign, convey or otherwise dispose of assets having an
aggregate market value in excess of $10,000, and Nord will not in any way
dispose of its shares of, nor allow the issuance to any person (other than to
Nord) of shares of, any subsidiary of Nord;

(ix)   will not dispose of, in any way, its interests
in the Joint Venture;

 

26

(x)   will not acquire or agree to acquire any assets
or acquire or agree to acquire by amalgamating, merging or consolidating with,
purchasing substantially all of the assets of or otherwise, any business or any
corporation, partnership, association or other business organization or
division thereof, other than with the prior written consent of Allied;

(xi)   will not, and shall cause each of the Nord
Subsidiaries not to:

(A)  enter into or modify any Employment Agreement
with, or grant any bonuses, salary increases, severance or termination pay to
or make any loan to, any officers or directors of Nord or any of the Nord
Subsidiaries except as approved in writing by Allied; or

(B)  in the case of employees who are not officers or
directors, take any action with respect to the entering into or modifying of
any employment, severance, collective bargaining or similar agreements,
policies or arrangements or with respect to the grant of any bonuses, salary
increases, stock options, pension benefits, profit sharing, retirement
allowances, deferred compensation, incentive compensation, severance or
termination pay or any other form of compensation or profit sharing or with
respect to any increase of benefits payable except as approved in writing by
Allied;

(xii)  other than under the Facility Documents or with
the prior written consent of Allied, will not guarantee the payment of
indebtedness or incur indebtedness for additional borrowed money or issue any
debt securities;

(xiii) will not, without the prior written consent of
Allied, which shall not be unreasonably withheld, make any tax filings,
including any returns or elections, with any Governmental Authority, and Allied
will be considered to be acting reasonably in any case where Allied requires
that any tax filings not be made until the final due date;

(xiv) will promptly make and file such corporate
filings as are required and past due under the Act;

(b)  Nord, SGC and Australex shall confer on a
regular basis with Allied with respect to operational matters related to the
Joint Venture, including matters related to human resources, safety,
environmental, security, marketing and off-take arrangements as well as all
Joint Venture activities and shall make their best efforts to allow Allied
representatives to attend operation committee meetings of the Joint Venture;

 

27

(c)  Nord, SGC and Australex shall confer with Allied
with respect to SGC's and Australex's participation in any meetings of Joint
Venture Partners or the Government regarding the Joint Venture;

(d)  Nord, SGC and Australex shall obtain prior
written approval or authorisation from Allied, which shall not be unreasonably
withheld, for any material decisions relating to the Joint Venture and the
Joint Venture Agreements, including, without limitation:

(i)    any development proposal contemplated under the
Joint Venture Agreements;

(ii)    the amendment of any of the Joint Venture
Agreements or the programs or budgets thereunder;

(iii)   material changes to the development plan with
respect to the Simberi Mining Joint Venture;

(iv)  material changes in the technical design basis
of the Simberi Mining Joint Venture that would lead to amendments to any of the
Joint Venture Agreements;

(v)   material communications with the Government or
other Joint Venture Partners or any communications regarding legal issues;

(vi)  payment of any cash calls relating to the Joint
Venture;

(vii)  membership in the committees under the Joint
Venture Agreements or staffing of the work to be done under the Joint Venture
Agreements;

(viii) material changes to the terms and conditions of
employment for any employee or consultant of Nord, the Nord Subsidiaries or the
Joint Venture; and

(ix)   security arrangements for personnel and
equipment;

(e)   Nord, SGC and Australex shall comply with their
obligations under the Joint Venture Agreements and Nord shall take, and shall
cause the Nord Subsidiaries to take, all action necessary in order to keep the
Joint Venture Agreements in good standing and will make its best efforts to pay
all cash calls thereunder to prevent the interest of Nord, SGC and Australex
from being reduced;

(f)   Nord shall ensure that SGC and Australex do not,
without the prior written consent of Allied, which shall not be unreasonably
withheld:

 

28

 

(i)   amend or modify any Joint Venture Agreement, or
terminate or give any notice of termination thereunder, or fail to comply with
any of its obligations thereunder, or fail to enforce compliance by the other
parties to each Joint Venture Agreement, or fail to defend and protect its
interests therein or in the Joint Venture from all adverse claims whatsoever;
and

(ii)   allow any right, licence, approval, consent or
authorization related to the Joint Venture to terminate, lapse or be suspended,
or do or omit to do any act or thing that would entitle any person to
terminate, lapse or suspend the same;

(g)   Nord shall not, and shall not permit the Nord
Subsidiaries to create, incur, assume or suffer to exist any Security Interest
on its properties and assets other than under Permitted Encumbrances;

(h)   Nord shall comply with its obligations under the
Facility Documents;

(i)   Nord shall promptly and expeditiously do all
acts and things as may be necessary or desirable to ensure the successful
implementation of the Arrangement and, without limiting the generality of the
foregoing:

(i)    prepare or cause to be prepared the Nord 2003
Financial Statements, and the Nord Prior Period Financial Statements (the
latter as notified to Nord by Allied) which shall be complete and accurate in
all material respects, comply with all applicable requirements of Canadian
Securities Laws and U.S. Securities Laws, and present fairly the consolidated
financial position of Nord and the Nord Subsidiaries and the results of its
operations and cash flows as of the dates and throughout the periods indicated
in accordance with U.S. GAAP (reconciled to Canadian GAAP), Nord and the Nord
Subsidiaries shall have no material liabilities (contingent or otherwise), on a
consolidated basis, which are not fully reflected in such statements in
accordance with U.S. GAAP, and all legal proceedings against Nord or any of the
Nord Subsidiaries which are required in accordance with U.S. GAAP to be reflected
in Nord's financial statements shall be properly reflected in the Nord 2003
Financial Statements and the Nord Prior Period Financial Statements (the latter
as notified to Nord by Allied) in accordance with such principles;

(ii)  prepare and file, and correct any defect in any
previously prepared and filed, tax returns and information returns, and pay all
taxes, levies, assessments, reassessments, penalties, interest and fines due
and payable by it on the basis of such tax returns or demands from taxing
authorities, not previously prepared, filed, corrected and paid, as set out in
the Nord Disclosure Letter;

 

29

 

(iii)  subject to the granting of the Interim Order, Nord will use all reasonable efforts, as soon as practicable and in any event
on or before April 30, 2004, to complete the preparation of the Joint
Information Circular and disseminate to the Nord Securityholders and file in
all jurisdictions where required the Joint Information Circular and other
documentation required in connection with the Nord Meeting, all in accordance
with National Instrument 54-101 of the Canadian Securities Administrators,
the requirements of the U.S. Securities Laws, the Interim Order and applicable
law, and Nord will use all reasonable efforts to, as soon as practicable and in
any event on or before June 25, 2004, convene the Nord Meeting for the
purpose of approving the Arrangement in accordance with the Interim Order;

(iv)  Nord will cause a list of Nord Securityholders
as of the record date for the Nord Meeting, in a form suitable for soliciting
of Nord Securityholders and prepared by the transfer agent of Nord, to be
delivered to Allied no later than the second business day after such record
date; and

(v)   Nord will use all reasonable efforts to promptly
and expeditiously perform its obligations under this Agreement and cause each
of the conditions precedent set forth in Sections 7.1, 7.2 and 7.3, to the
extent it is within its control, to be complied with;

provided that
nothing contained herein shall obligate Nord to waive any condition for its benefit
contained herein;

(j)    Nord will provide Allied in a timely and
expeditious manner with all information relating to Nord and the Nord
Subsidiaries required to be included in the Joint Information Circular,
including the Nord 2003 Financial Statements, in order for the Joint
Information Circular to comply with all applicable disclosure laws and the
Interim Order;

(k)  Nord shall cause the resignation, effective as
of the Effective Date, of such of the directors of Nord and the Nord
Subsidiaries as is requested by Allied not less than three business days prior
to the Nord Meeting;

(l)   Nord shall cause its current insurance policies,
whether held by it or another entity, not to be cancelled or terminated or any
of the coverage thereunder to lapse, unless simultaneously with such
termination, cancellation or lapse, replacement policies underwritten by
insurance companies of nationally recognized standing providing coverage equal
to or greater than the coverage under the cancelled, terminated or lapsed
policies for substantially similar premiums are in full force and effect; and

 

30

(m)    Nord shall:

(i)    use its best efforts, and cause each of the Nord
Subsidiaries to use its best efforts, to preserve intact their respective
business organizations and goodwill, to keep available the services of its
officers and employees as a group and to maintain satisfactory relationships
with all persons having business relationships with it or the Nord
Subsidiaries;

(ii)   not take any action, or permit any of the Nord
Subsidiaries to take any action, that would render, or that reasonably may be
expected to render, any representation or warranty made by it in this Agreement
untrue in any material respect at any time prior to the time that the
Arrangement is effected if then made; and

(iii)   promptly notify Allied orally and in writing of
any Material Adverse Change in its or any of the Nord Subsidiaries' businesses
or affairs or in the operation of its or any of the Nord Subsidiaries'
businesses or in the operation of its or any of the Nord Subsidiaries'
properties, and of any material governmental or third party complaints,
investigations or hearings (or communications indicating that the same may be
contemplated).

(n)   If required at the time of holding the Nord
Meeting by order of the Court of Queen's Bench of New Brunswick in order to
participate in the Arrangement, Nord shall propose to Nord shareholders at the
Nord Meeting the following resolutions to be approved by disinterested vote:

(i)    the issuance to Alex Chisholm as trustee, in
trust for Mark R. Welch and Sharon Welch of 4,000,000 Nord Shares approved by
the board of directors of Nord on or about March 31, 2003; and

(ii)   the issuance to Mark Welch, Lucile Lansing and
John Roberts of 1,200,000 Nord Shares approved by the Board of Directors of
Nord on or about dated February 25, 2002 and December 16, 2002.

In the event
one or the other of such resolutions are not approved, the shares so issued
shall be cancelled and shall not participate in either the vote on the
Arrangement nor in the Arrangement and the persons to whom such shares had been
issued shall be entitled to no compensation therefor and the Plan of
Arrangement shall be amended to so state.

 

 

31

4.2         Non-Solicitation

(a)   Nord will not (subject to the exceptions
described herein), directly or indirectly, and will not authorize or permit any
Representative of Nord or any Nord Subsidiary to, directly or indirectly,
(i) solicit, initiate, invite, assist, facilitate, promote, consent to or
encourage proposals or offers from, or entertain or enter into discussions or
negotiations with any other person relating to the acquisition of Nord Shares
or any other securities of Nord or any Nord Subsidiary, any amalgamation,
merger or other form of business combination involving Nord or any Nord
Subsidiary, any sale, lease, exchange or transfer of all or a substantial
portion of the assets of Nord (on a consolidated basis), or any takeover bid,
reorganization, recapitalization, liquidation or winding-up of or other
business combination or transaction involving Nord or any Nord Subsidiary with
any person other than Allied or any of its affiliates (each an "Acquisition
Transaction" and any offer or proposal relating to any transaction or
series of related transactions involving an Acquisition Transaction, an "Acquisition
Proposal") or (ii) enter into any letter of intent or similar
document or any contractual agreement or commitment contemplating or otherwise
relating to any Acquisition Proposal. Nord shall, and shall direct its
Representatives to, immediately cease and cause to be terminated any existing
discussions or negotiations with any parties (other than Allied) with respect
to any potential Acquisition Proposal.  Nord shall immediately close any data
room which may be open.  Nord agrees not to release any third party from any
confidentiality or standstill agreement to which Nord and such third party are
a party and agrees not to amend any such agreement or to waive any rights Nord
may have thereunder.  Nord shall immediately request the return or destruction
of all non-public information provided to any third parties relating to a
potential Acquisition Proposal and shall use all reasonable efforts to ensure
that such requests are honoured.  Nord shall not make available, after the date
hereof, any material non-public information to any party in connection with any
potential or actual Acquisition Proposal.

(b)  Nord will ensure that its Representatives,
including those of the Nord Subsidiaries, and any financial or other advisors
or representatives retained by it or any of them are aware of the provisions of
this Section 4.2 and Nord will be responsible for any breach of this
Section 4.2 by any of the foregoing and any such breach shall be
considered a breach by Nord.  Nord shall immediately advise Allied of receipt
of any written or oral Acquisition Proposal or any request for non-public
information relating to Nord or any Nord Subsidiary related to an Acquisition
Proposal or consideration whether or not to make an Acquisition Proposal, and
provide Allied with the identity of the party making the Acquisition Proposal
and the material terms thereof, and copies of any correspondence or draft
agreement received by Nord with respect thereto.

4.3       Superior Proposal

Notwithstanding
Sections 4.1 and 4.2, provided that there has been no breach thereof, the
Board of Directors of Nord and Nord are not prohibited by Section 4.1 or
4.2 from:

 

32

(a)  considering, negotiating and providing
information and disclosure in respect of Nord if Nord's Board of Directors
determines in good faith (after consultation with its financial advisors, after
appropriately considering all relevant factors and after receiving the advice
of outside counsel to the effect that the board of directors of Nord must do so
in order to discharge properly its fiduciary duties) that an Acquisition
Proposal is, or is reasonably likely to result in, a transaction (a "Superior
Transaction"):

(i)    pursuant to which (A) more than 50% of the
then outstanding Nord Shares would be transferred, (B) an amount of Nord
Shares greater than 100% of the then outstanding Nord Shares would be issued,
(C) the holders of more than 50% of the Nord Shares outstanding
immediately prior to such transaction would following such transaction receive
in exchange for Nord Shares an amount of securities (if any) of the surviving
or resulting entity (or its direct or indirect parent, as applicable)
constituting less than 50% of the voting power of the surviving or resulting
entity (or its direct or indirect parent, as applicable) or (D) in which
all or substantially all of the assets of Nord (on a consolidated basis) would
be transferred;

(ii)   on terms which are more favourable from a
financial point of view to the holders of Nord Shares than the Arrangement
(taking into account all of the terms, conditions and aspects of such
Acquisition Proposal and the Arrangement);

(iii)   for which any necessary financing is committed;
and

(iv)   that does not contain a due diligence condition;

provided that:

(v)  Nord promptly (and in any event at least one
business day prior to taking any such action) notifies Allied orally and in
writing of the identity of a party to whom it is providing information or with
whom it is discussing or negotiating and the material terms and conditions of
any Acquisition Proposal together with copies of all correspondence and draft
agreements or documents related to such Acquisition Proposal;

 

33

(vi) Nord receives from such person or group an
executed confidentiality agreement containing commercially reasonable
limitations on the use and disclosure of all non-public written and oral
information furnished to such person or group by or on behalf of Nord, and a
standstill agreement which provides to the effect that, for a period of one
year from the date of this Agreement, without the prior written consent of Nord
and in compliance with this Section 4.3, such person or group (or any
member of such group) will not in any manner, directly or indirectly, or in
conjunction with any other person or entity: (A) effect or seek, offer or
propose (whether publicly or otherwise) to effect or participate in,
(1) any acquisition of any securities (or beneficial ownership thereof) or
assets of Nord or a Nord Subsidiary, (2) any tender or exchange offer,
merger or other business combination involving Nord or a Nord Subsidiary,
(3) any recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction with respect to Nord or a Nord Subsidiary, or
(4) any "solicitation" of "proxies" (as such terms are
defined in Rule 14a-1 under the U.S. Exchange Act) or consents to vote any
securities of Nord or a Nord Subsidiary; (B) form, join or in any way
participate in a "group" (as such term is used in
Section 13(d)(3) of the U.S. Exchange Act) or otherwise act, alone or with
others, to seek to acquire or affect control or influence the management, Board
of Directors or policies of Nord or a Nord Subsidiary; (C) enter into any
discussions or arrangements with any third party regarding any of the
foregoing; or (D) take any action which might force Nord to make a public
announcement regarding any of the foregoing; in each case in form and substance
satisfactory of Allied, acting reasonably; and

(vii) contemporaneously with furnishing any such
non-public information to such person or group, Nord furnishes such non-public
information to Allied (to the extent such non-public information has not been
previously furnished by Nord to Allied); or

(b)   accepting, approving, recommending to its
shareholders or entering into an unsolicited bona fide agreement or arrangement
regarding an Acquisition Proposal if the board of directors of Nord determines
in good faith (after consultation with its financial advisors, after
appropriately considering all relevant factors and after receiving the advice
of outside counsel to the effect that the board of directors of Nord must do so
in order to discharge properly its fiduciary duties) that such Acquisition
Proposal would, if consummated in accordance with its terms (but taking into
account the risk of non-completion), result in a Superior Transaction; provided
that immediately prior to any entry into an agreement or arrangement pursuant
to this Subsection 4.3(b), Nord terminates this agreement pursuant to
Section 9.5 and at or prior to such termination pays the Termination
Amount as provided in such Section 9.5.

 

34

 

Nord will not terminate this Agreement
pursuant to Subsection 4.3(b) or enter into any agreement, arrangement or
understanding regarding a Superior Transaction (a "Proposed Agreement")
and will not effect a Board Approval Modification relating to a Superior
Transaction without first providing Allied with an opportunity to amend the
Arrangement contemplated by this agreement as described below.  Nord will in
any event (i) provide Allied with a copy of any Proposed Agreement in the
final form proposed by the person making the proposal, as soon as possible and
in any event not less than five business days prior to its proposed execution
by Nord, and (ii) provide Allied not less than five business days prior
written notice of any such Board Approval Modification together with a
description of the material terms of the Superior Transaction related thereto. 
If Allied agrees to amend the Arrangement contemplated by this agreement (an
"Amended Transaction") within such five business day period
such that in the good faith determination of the Board of Directors of Nord in
the exercise of its fiduciary duties (after having received the advice of its
financial advisors in this regard), the Amended Transaction, if consummated, is
reasonably likely to result in a transaction which is as favourable or more
favourable from a financial point of view to the holders of Nord Shares as the
Superior Transaction (taking into account all of the terms, conditions and
aspects of such Amended Transaction and Superior Transaction), Nord will not
enter into the Proposed Agreement or, as applicable, effect the Board Approval
Modification, and will agree to the Amended Transaction.  Any amendment to an
Acquisition Proposal will be deemed for purposes hereof to be a new Acquisition
Proposal which will be subject to the provisions of this Section 4.3.

4.4       Access to Information

Nord shall (and
shall cause each of the Nord Subsidiaries to) afford Allied's Representatives
access, at all reasonable times from the date hereof and until the expiration
of this Agreement, to its properties, books, contracts and records as well as
to its management personnel, employees and agents or advisors, and, during such
period, Nord shall (and shall cause each of the Nord Subsidiaries to) furnish
promptly to Allied all information concerning its business, properties and
personnel as Allied may reasonably request, including, as soon as they are
available, the Nord Financial Statements.

ARTICLE 5

COVENANTS OF ALLIED

5.1       Covenants of Allied

Allied covenants
in favour of Nord that it shall, do, take or perform or refrain from doing, taking
and performing such actions and steps as may be necessary or advisable to
ensure compliance with the following:

(a)  prior to the Effective Date, Allied will not
take any action which might, directly or indirectly, interfere or be
inconsistent with or otherwise adversely affect the completion of the
Arrangement or the Financing;

(b)   prior to the Effective Date, Allied will use all
reasonable efforts to do all acts and things as may be necessary or desirable
to ensure the successful implementation of the Arrangement and, without
limiting the generality of the foregoing:

 

35

 

(i)    prepare or cause to be prepared the Allied
Financial Statements, which shall be complete and accurate in all material
respects and present fairly the consolidated financial position of Allied and
the results of its operations and cash flows as of the dates and throughout the
periods indicated in accordance with Australian GAAP and reconciled to U.S.
GAAP in accordance with item 18 of SEC Form 20F (and to Canadian GAAP if
required by Canadian Securities Laws), Allied shall have no material
liabilities (contingent or otherwise), on a consolidated basis, which are not
fully reflected in such statements in accordance with Australian GAAP, and all
legal proceedings against Allied or any of its subsidiaries which are required
in accordance with Australian GAAP to be reflected in Allied's financial
statements shall be properly reflected in the Allied Financial Statements in
accordance with such principles;

(ii)    Allied will co-operate in obtaining the Interim
Order and the Final Order; and

(iii)  Allied will use all reasonable efforts to cause
each of the conditions precedent set forth in Sections 7.1, 7.2 and 7.3,
to the extent it is within its control, to be complied with;

provided that
nothing contained herein shall obligate Allied to waive any condition for its
benefit contained herein or in the Credit Agreement;

(c)   subject to compliance by Nord with
paragraph 4.1(j), Allied will ensure that all information concerning
Allied set forth in the Joint Information Circular complies with all applicable
disclosure laws and the Interim Order; 

(d)  Allied will issue fully paid and non-assessable
Allied Shares, in accordance with the terms of the Plan of Arrangement, to
those Nord Securityholders who are entitled to receive Allied Shares pursuant
to the Arrangement;

(e)   Allied will assume, in accordance with the terms
of the Plan of Arrangement, the obligations of Nord under the Nord Options as
converted in accordance with the terms of the Plan of Arrangement;

(f)    Allied will comply with its obligations under
the Credit Agreement; and

(g)   after the Effective Date, Allied will cause Nord
to satisfy any obligations which Nord may have to Dissenting Securityholders.

 

36

 

ARTICLE 6

MUTUAL COVENANTS

6.1       Mutual Covenants of Nord and Allied

Each of Nord and
Allied covenant in favour of the other that prior to the Effective Date, it
shall and it shall cause each of its subsidiaries, to do, take or perform or
refrain from doing, taking and performing such actions and steps as may be
necessary or advisable to ensure compliance with the following:

(a)   each of Nord and Allied will use all reasonable
efforts to satisfy (or cause the satisfaction of) the conditions precedent to
its obligations hereunder and to take, or cause to be taken, all other action
and to do, or cause to be done, all other things necessary, proper or advisable
under applicable laws and regulations to complete the Arrangement, including
using all reasonable efforts to:

(i)    obtain all necessary waivers, consents and
approvals required to be obtained by it from other parties to contracts;

(ii)   obtain all necessary consents, approvals and
authorizations as are required to be obtained by it under any Canadian or
foreign law or regulation; and

(iii)   effect all necessary registrations and filings
and submissions of information requested by governmental authorities required
to be effected by it in connection with the Arrangement;

and each of
Nord and Allied will use all reasonable efforts to cooperate with the other in
connection with the performance by the other of its obligations under this
subsection including, without limitation, continuing to provide reasonable
access to information and to maintain ongoing communications as between
officers of Nord and Allied; and

(b)  each of Nord and Allied will as soon as
reasonably practicable notify the other of any actual, imminent or incipient
Material Adverse Change.

(c)   As promptly as practicable after execution of
this Agreement, Nord and Allied shall prepare and Nord shall file with the SEC
the Joint Information Circular, together with any other documents required by
the U.S. Securities or U.S. Exchange Act in connection with the Arrangement and
the other transactions contemplated hereby.  The Joint Information Circular
shall constitute (i) the management information circular of Allied with
respect to the Allied meeting and (ii) the management information circular
of Nord with respect to the Nord meeting.  As promptly as practicable after the
Joint Information Circular is cleared by the SEC, Allied and Nord shall cause
the Joint Information Circular to be mailed to each company's respective
securityholders entitled to vote, as the case may be.

 

37

 

(d)   Each of Allied and Nord shall promptly furnish
to the other party all information concerning such party and its
securityholders as may be reasonably required in connection with any action
contemplated by this Agreement.  The Joint Information Circular shall comply in
all material respects with all applicable requirements of law.  Each of Allied
and Nord will notify the other promptly of the receipt of any comments from the
SEC or other securities regulatory authorities or stock exchanges and of any
request by the SEC or other securities regulatory authorities or stock
exchanges for amendments or supplements to the Joint Information Circular, or
for additional information, and will supply the other with copies of all
correspondence with the SEC or other securities regulatory authorities or stock
exchanges with respect to the Joint Information Circular or concerning other
documents to be filed with securities regulatory authorities.  Whenever any
event occurs which should be described in an amendment or supplement to the
Joint Information Circular, Allied or Nord, as the case may be, shall promptly
inform the other of such occurrence and cooperate in filing with the SEC and
other securities regulatory authorities or stock exchanges and/or mailing to
securityholders of Allied and Nord entitled to vote on the Arrangement, as may
be required, such amendment or supplement.

ARTICLE 7

CONDITIONS PRECEDENT

7.1       Mutual Conditions Precedent

The respective
obligations of Nord and Allied to complete the transactions contemplated by
this Agreement and the obligation of Nord to file articles of arrangement to
give effect to the Arrangement shall be subject to the satisfaction, on or
before the Effective Date, of the following conditions, any of which may be
waived in whole or in part by the mutual consent of such parties without
prejudice to their right to rely on any other of such conditions:

(a)   the Cease Trade Orders shall have been revoked
and Nord shall become current in its reports to the SEC as required by U.S.
Securities Laws;

(b)  the Arrangement shall have been approved without
material amendment at the Nord Meeting by the requisite majority of persons
entitled to vote thereon as may be determined by the Court;

(c)   the Interim Order and the Final Order shall have
been obtained in form and substance satisfactory to Nord and Allied, acting
reasonably;

(d)   the Allied Shares to be issued pursuant to the
Plan of Arrangement are approved for official quotation by the ASX (conditional
only on the issue of those shares and on Allied providing the ASX with an
Appendix 3B as required by the Listing Rules) and shall be tradeable on the ASX
(other than as limited by Rule 145 under the U.S. Securities Act or other restrictions
on sales by affiliates (as defined in Rule 144 under the U.S. Securities Act)
or control persons which may be applicable) under applicable Canadian
Securities Laws and U.S. Securities Laws;

 

38

 

(e)   all notification and any review requirements of
the Investment Canada Act shall have been satisfied;

(f)   all other consents, orders and approvals
necessary or that Nord and Allied agree are appropriate for the completion of
the Arrangement shall have been obtained;

(g)   there shall be no action taken under any
existing applicable law or regulation, nor any statute, rule, regulation or
order which is enacted, enforced, promulgated or issued by any court,
department, commission, board, regulatory body, government or governmental
authority or similar agency, domestic or foreign, that:

(i)    makes it illegal or otherwise directly or
indirectly restrains, enjoins or prohibits the Arrangement or any other
transactions contemplated herein or in the Credit
Agreement, where the failure to complete such
transactions would have a Material Adverse Effect on the completion of the
Arrangement;

(ii)  results in a judgment or assessment of material
damages, directly or indirectly, relating to the transactions contemplated
herein or in the Credit Agreement; or

(iii)  imposes or confirms material limitations on the
ability of Allied to effectively exercise full rights of ownership of the Nord
Shares to be acquired by Allied pursuant to the Arrangement or on the ability
of those Nord Securityholders to whom Allied Shares are issued pursuant to the
Arrangement to effectively exercise full rights of ownership of such Allied
Shares subject to securities law restrictions in applicable jurisdictions but,
including the right to vote or trade any such shares on the ASX;

(h)   there shall not be in force any law, order or
decree making illegal, restraining or enjoining the completion of the
Arrangement or any other transactions contemplated herein or in the Credit Agreement or which enables any court,
department, commission, board, regulatory body, government or governmental
authority or similar agency, domestic or foreign, as a result of the
transactions contemplated herein, to:

 

39

(i)    prohibit Allied or any of its subsidiaries or Nord or any of the Nord Subsidiaries from owning or operating all or any
portion of their respective businesses or assets; or

(ii)   compel Allied or any of its subsidiaries or Nord
or any of the Nord Subsidiaries to dispose of or hold separately all or any
portion of their respective businesses or assets or the shares of Nord to be
indirectly acquired by Allied pursuant to the Arrangement;

if such
prohibition or compulsion could have a Material Adverse Effect on Allied and
its subsidiaries (including Nord), on a consolidated basis, after completion of
the Arrangement; and

(i)    none of the consents, orders or approvals contemplated
herein shall contain terms or conditions or require undertakings or security
deemed unacceptable by Nord or Allied, acting reasonably.

7.2       Conditions to Obligation of Nord

In addition to
the conditions set forth in Section 7.1, the obligation of Nord to
complete the transactions contemplated by this Agreement is subject to the
satisfaction, on or before the Effective Date, of the following conditions, any
of which may be waived by Nord in whole or in part without prejudice to Nord's
right to rely on any other condition in favour of Nord:

(a)   the covenants of Allied to be performed on or
before the Effective Date pursuant to the terms of this Agreement shall have
been duly performed in all material respects by Allied, and Nord shall have
received a certificate to that effect dated the Effective Date, signed by two
senior officers of Allied on behalf of Allied, and Nord shall not have
reasonably established that it has knowledge to the contrary;

(b)   Allied shall have furnished Nord with certified
copies of the resolutions duly passed by the board of directors of Allied
approving this Agreement and the completion of the transactions contemplated
hereby, including the issuance of Allied Shares in accordance with the Plan of
Arrangement;

(c)   the representations and warranties of Allied set
out in Section 3.2 shall have been true and correct in all material
respects on the date of this Agreement and such representations and warranties
shall be true and correct in all material respects on the Effective Date
(before giving effect to the Arrangement) as if made on and as of such date,
except as affected by transactions contemplated or permitted by this Agreement,
and Nord shall have received a certificate from Allied to that effect, dated
the Effective Date and signed by two senior officers of Allied, and Nord shall
not have reasonably established that it has knowledge to the contrary; and

 

40

 

(d)   no Material Adverse Change (or any event,
condition or state of facts which may reasonably be expected to give rise to
any such change) shall have occurred with respect to Allied from and after the
date hereof.

7.3       Conditions to Obligation of Allied

In addition to
the conditions set forth in Section 7.1, the obligation of Allied to
complete the transactions contemplated by this Agreement is subject to the
satisfaction, on or before the Effective Date, of the following conditions, any
of which may be waived by Allied in whole or in part without prejudice to
Allied's right to rely on any other condition in favour of Allied:

(a)   all lawsuits and actions involving Nord or any
Nord Subsidiary shall have been settled to the satisfaction of Allied,
including the litigation relating to the composition of the Board of Directors
of Nord and the issued and outstanding Nord Shares;

(b)   Allied shall be satisfied with the results of
its due diligence review of Nord and the Nord Subsidiaries and their respective
assets and operations, including their interests in the Joint Venture and the
Joint Venture Agreements;

(c)   the covenants of Nord to be performed on or
before the Effective Date pursuant to the terms of this Agreement shall have
been duly performed in all material respects by Nord, and Allied shall have
received a certificate from Nord to that effect, dated the Effective Date and
signed by two senior officers of Nord, and Allied shall not have reasonably
established that it has knowledge to the contrary;

(d)   on or before the Effective Date, Nord shall have
furnished Allied with:

(i)    certified copies of the resolutions duly passed
by the board of directors of Nord approving this Agreement and the completion
of the transactions contemplated hereby and directing the submission of the
Arrangement for approval at the Nord Meeting; and

(ii)    certified copies of the resolutions duly passed
at the Nord Meeting approving the Arrangement;

(e)   the representations and warranties of Nord set
out in Section 3.1 shall have been true and correct in all material
respects on the date of this Agreement and such representations and warranties
shall be true and correct in all material respects on the Effective Date
(before giving effect to the Arrangement) as if made on and as of such date,
except as affected by transactions contemplated or permitted by this Agreement,
and Allied shall have received a certificate from Nord to that effect, dated
the Effective Date and signed by two senior officers of Nord, and Allied shall
not have reasonably established that it has knowledge to the contrary;

41

(f)  Nord Securityholders representing less than 5%
of the then outstanding Nord Shares shall be Dissenting Securityholders;

(g)   on the Effective Date, Nord shall have furnished
Allied with a certificate of Nord, signed by the President of Nord, certifying
as to the number of shares in respect of which holders of the Nord Shares have
exercised rights of dissent granted under the Plan of Arrangement;

(h)   no adverse change (or any event, condition or
state of facts which may reasonably be expected to give rise to any such
change) shall have occurred in the business, operations, assets,
capitalization, financial condition, licenses, permits, rights, liabilities,
prospects or privileges, whether contractual or otherwise, of Nord and any Nord
Subsidiaries on a consolidated basis, including without limitation in SGC's and
Australex's interest in the Joint Venture or any of the Joint Venture Agreements,
that, in the sole judgment of Allied, acting reasonably, would make it
inadvisable for Allied to proceed with the Arrangement;

(i)    Allied shall have received from the Government
and the Joint Venture Partners, in a form satisfactory to Allied, such consents,
orders, approvals and confirmations as Allied, acting reasonably, considers are
necessary or advisable under the Joint Venture Agreements or applicable law for
the Arrangement, the Financing and the post-Arrangement transactions
contemplated by Allied (which have been disclosed in writing to Nord), and none
of such consents, orders, approvals or confirmations shall contain terms or
conditions or require undertakings, security, payments or actions deemed
unacceptable by Allied, acting reasonably;

(j)    there shall not have occurred any change in the
political or governmental structure of Papua New Guinea that, in the sole
judgment of Allied, acting reasonably, would make it inadvisable for Allied to
proceed with the Arrangement;

(k)  there shall not have occurred any general
hostilities in Papua New Guinea that result in a threat to the construction or
operation of the Simberi Mining Joint Venture or any actual direct threat to
the Joint Venture or to Nord or any of the Nord Subsidiaries, such threats may
be evidenced by an increase in the security measures regarding the Joint
Venture or personnel working on the Joint Venture, the evacuation of personnel
working on the Joint Venture, a stoppage in the construction or operation of
the Simberi Mining Joint Venture or actual physical damage to the Joint
Venture, that, in the sole judgment of Allied, acting reasonably, would make it
inadvisable to proceed with the Arrangement;

(l)    no law, regulation or policy shall have been
proposed, enacted, promulgated or applied, whether or not having the force of
law, in any jurisdiction (including, without limitation, the imposition of
sanctions involving Papua New Guinea in Canada or the United States) which, in
the sole judgment of Allied, acting reasonably, would make it inadvisable for
Allied to proceed with the Arrangement;

 

42

 

(m)  there shall not have occurred any actual or
threatened change (including any proposal by the Minister of Finance (Canada)
to amend the Income Tax Act (Canada), similar proposals in any other
jurisdiction or any announcement, governmental or regulatory initiative,
condition, event or development involving a change or a prospective change)
that, in the sole judgment of Allied, acting reasonably, has or may have
material adverse significance with respect to the current or anticipated
business or operations of Nord and the Nord Subsidiaries, or with respect to
the regulatory regime applicable to their businesses and operations, or with
respect to any potential integration of Nord or any of the Nord Subsidiaries
with Allied or any reorganization of Nord, Allied or any of their respective
subsidiaries in connection with any such potential integration;

(n)   no change shall have occurred with respect to
any existing action, suit or proceeding against Nord or any of the Nord Subsidiaries,
and no act, action, suit or proceeding shall have been threatened or taken
before or by any domestic or foreign court or tribunal or governmental agents
or other regulatory authority or administrative agency or commission in any
jurisdiction, whether or not having the force of law, which, in the sole
judgment of Allied, acting reasonably, would make it inadvisable for Allied to
proceed with the Arrangement;

(o)   no adverse change (or any event, condition or
state of facts which may reasonably be expected to give rise to any such
change) shall have occurred in the Joint Venture or the Joint Venture
Agreements, or any development proposal, program or budget thereunder, which,
in the sole judgment of Allied, acting reasonably, would make it inadvisable
for Allied to proceed with the Arrangement;

(p)  Allied shall have received an opinion of New
Brunswick counsel to Nord (and such other counsel in other jurisdictions as
Allied may reasonably request) as to the enforceability of this Agreement and
such other matters as it may reasonably request, in a form acceptable to
counsel to Allied, acting reasonably, which opinion may reasonably rely on
certificates of an officer or officers of Nord as to matters of fact;

(q)   such members of the board of directors and
officers of Nord and the Nord Subsidiaries as Allied shall have designated in
writing to Nord not less than three days prior to the Effective Date, shall
have provided their written resignations as directors and officers of Nord
effective as of the Effective Date together with releases (satisfactory to
Allied acting reasonably) in favour of Nord;

 

43

 

(r)   Allied shall be satisfied that the securities to
be issued by Allied pursuant to the Plan of Arrangement shall be exempt from
registration under the U.S. Securities Act pursuant to section 3(a)(10)
thereof and under applicable State securities laws and all
"affiliates" of Nord (within the meaning of Rule 145 under the
U.S. Securities Act) shall have executed and delivered to Allied agreements in
form and substance satisfactory to Allied restricting offers, sales, pledges
and other disposition of Allied Shares received pursuant to the Arrangement
except in compliance with Rule 145(d) or another exemption or exclusion
from registration under the U.S. Securities Act; and

(s)   Allied shall receive support agreements ("Support
Agreements") from the directors of Nord and Nord Resources Corporation
and others with respect to an aggregate of 50% of the currently outstanding
Nord Shares being voted in favor of the Arrangement substantially in the form
of Schedule 7.3(s) hereto.

Nord shall file articles of arrangement
to give effect to the Arrangement only upon the written certificate of Allied
as to the satisfaction or waiver by Allied of all the conditions for Allied's
benefit set forth in Section 7.1 and this Section 7.3.

7.4       Notice of Non‐Compliance

Each of Nord and
Allied shall give prompt notice to the other of the occurrence, or failure to
occur, at any time from the date hereof to the Effective Date of any event or
state of facts which occurrence or failure would, or would be likely to:

(a)   cause any of the representations or warranties
of any party contained herein to be untrue or inaccurate in any material
respect, or

(b)  result in the failure to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied
hereunder,

provided that no such notification shall
affect the representations or warranties of the parties or the conditions to
the obligations of the parties hereunder.  Neither Nord nor Allied may elect
not to complete the transactions contemplated herein pursuant to the conditions
precedent contained in Sections 7.1, 7.2 or 7.3 unless, prior to the
filing on the Effective Date of articles of arrangement for the purpose of
giving effect to the Arrangement, the party intending to rely thereon has
delivered a written notice to the other party, specifying in reasonable detail
all matters which the party delivering such notice is asserting as the basis
for the non-fulfilment of the applicable condition precedent.  More than one
such notice may be delivered by a party.

7.5       Satisfaction of Conditions

The conditions
set out in Sections 7.1, 7.2 and 7.3 shall be conclusively deemed to have
been satisfied, waived or released when, with the agreement of Allied and Nord,
articles of arrangement are filed under the Act to carry the Arrangement into
effect.

44

 

 

7.6       Adjustments in Event of Change in Allied Shares

In the event, at
any time or from time to time, of a subdivision, consolidation or
reclassification of the share capital of Allied, the payment of stock dividends
by Allied or other similar changes in the capital of Allied (other than the
issuance of Allied Shares for value, contemplated in this Agreement or pursuant
to options or agreements referred to in the Agreement) prior to completion of
the Plan of Arrangement, the number of Allied Shares issuable to Nord
Securityholders shall be proportionately adjusted so that Nord Securityholders
shall, upon completion of the Plan of Arrangement, be entitled to receive such
proportion of Allied Shares as they would have received upon completion of the
Plan of Arrangement if such change in the share capital of Allied had not
occurred.

ARTICLE 8

AMENDMENT

8.1       Amendment

This Agreement
and the Plan of Arrangement may at any time and from time to time, before or after
the holding of the Nord Meeting but not later than the Effective Date, be
amended by written agreement of the parties hereto without, subject to
applicable law, further notice to or authorization on the part of their
respective securityholders and any such amendment may, without limitation:

(a)   change the time for performance of any of the
obligations or acts of the parties hereto;

(b)   waive any inaccuracies or modify any
representation or warranty contained herein or in any document delivered
pursuant hereto; or

(c)    waive compliance with or modify any of the
conditions precedent contained herein;

provided that no such amendment shall
decrease the consideration to be received by the Nord Securityholders in
exchange for their Nord securities pursuant to the Arrangement without the
approval of such securityholders in the same manner as required for the
approval of the Arrangement or in such other manner as may be ordered by the
Court.  This Agreement including the Plan of Arrangement may be amended in
accordance with the Final Order but if the terms of the Final Order require any
such amendment, the rights of the parties hereto under Sections 7.1, 7.2,
7.3 and Article 9 shall remain unaffected.

ARTICLE 9

TERMINATION AND REMEDIES

9.1       Termination

This Agreement
may be terminated prior to the completion of the Arrangement, without prejudice
to any rights or causes of action which may exist at the date of termination: 

 

45

 

(a)   by mutual written consent of Nord and Allied;

(b)  subject to Section 9.5, by either Nord or Allied
giving notice in writing to the other if any of the conditions contained in
this Agreement for the benefit of the terminating party are not met or waived
on or before the date required for their performance provided that no party may
terminate this Agreement pursuant to this Section 9.1(b) if the failure to meet
the conditions involved is principally the result of such parties actions or
failure to act and such actions or failure to act constitutes a breach of this
Agreement;

(c)   by Allied upon the occurrence of an Allied
Termination Event; and

(d)   by Nord, in compliance with Section 9.5.

This Agreement shall also terminate
without further notice or agreement if the Arrangement has not become effective
by June 30, 2004, unless extended by Allied in its sole discretion by up
to three calendar months in the aggregate or such other date as may be agreed
to by the parties hereto in writing.

9.2       Effect of Termination

In the event of
such termination of this Agreement, this Agreement shall forthwith become void
and neither party shall have any liability or further obligation to the other
party hereunder except with respect to the obligations set forth in
Sections 9.4, 9.5 and 9.6, which shall survive such termination.

9.3       Limitation

Nothing
contained in this Article 9, including the payment of any amount under Section
9.4, shall, however, relieve or have the effect of resulting in relieving any
party in any way from liability for damages incurred or suffered by a party as
a result of a breach of this Agreement by a party acting in bad faith intended
or designed to result in the conditions precedent to this Agreement not being
satisfied.

9.4       Allied Termination Event

If at any time
after the execution of this Agreement Allied exercises its right to terminate
this agreement pursuant to Section 9.1(c) as the result of the occurrence
of any of the following:

(a)   the board of directors of Nord has failed to
make or has withdrawn or changed the recommendation referred to in
Section 3.1(a) in a manner adverse to Allied or shall have made any
recommendation in favour of any other Acquisition Proposal or shall have
resolved to do so prior to the Arrangement becoming effective or has failed to
promptly and publicly reconfirm its recommendation referred to in
Section 3.1(a) if requested to do so by Allied;

 

46

 

(b)  Nord enters into an agreement (other than a
confidentiality agreement) with any person with respect to an Acquisition
Proposal;

(c)   Nord Securityholders do not approve the
Arrangement or the Arrangement is not submitted for their approval on or before
June 25, 2004; or

(d)  Nord is in material breach of or breaches any of
its representations, warranties or covenants made in this Agreement which
breach or breaches individually or in the aggregate would have a Material
Adverse Effect on Nord or materially impede the completion of the Arrangement;

(each of the above being a "Allied
Termination Event"), then Nord shall pay to Allied the Allied
Termination Amount in immediately available funds to an account designated by
Allied within one Business Day after Allied gives notice of termination.

9.5       Nord Termination Event

If Nord shall
wish to terminate this Agreement pursuant to Section 4.3 or as a result of
a failure of the conditions set forth in Subsection 7.1(b), Nord shall,
immediately prior to such termination, pay to Allied the Termination Amount in
immediately available funds to an account designated by Allied.

9.6       Liquidated Damages

Nord
acknowledges that the Termination Amount is liquidated damages and a genuine
pre-estimate of damages which Allied will suffer or incur as a result of the
event giving rise to such damages and resultant termination of this Agreement
and is not a penalty.  Nord irrevocably waives any right it may have to raise
as a defence that any such liquidated damages are excessive or punitive.
Nothing set forth in this Section 9.6 or elsewhere in this Agreement will
relieve Nord in any way for liability for damages suffered or incurred by
Allied as a result of intentional misrepresentations or fraud in connection
with, or an intentional or wilful breach of, this Agreement.

9.7       Judgment Currency

(a)   If, for the purposes of obtaining judgment in
any court it becomes necessary to convert any amount due under this Agreement
in one currency (the "Proper Currency") into anther currency
(the "Other Currency"), then the conversion shall be made at
the rate at which Allied is able, in accordance with normal banking procedures,
to purchase the Proper Currency with such Other Currency on the business day
immediately prior to the day on which the judgment is given.

(b)   Notwithstanding any judgment expressed in a
currency other than the Proper Currency, the obligation of Nord under this
Agreement in respect of any amount originally due from it in the Proper
Currency shall be discharged only to the extent that, on the business day
following receipt by Allied of any amount in any Other Currency, Allied is able
in accordance with normal banking procedures to purchase the Proper Currency
with such Other Currency.  If the Proper Currency so purchased is less than the
amount originally due to Allied in the Proper Currency, Nord shall pay to
Allied the difference; if the Proper Currency so purchased exceeds the amount
originally due to Allied in the Proper Currency, Allied agrees to credit such
excess to Nord.

 

47

 

(c)   Nord shall indemnify Allied for any premiums and
costs of exchange incurred by Allied in connection with the conversion into, or
purchase of, the Proper Currency.

(d)  The obligations in this Section shall constitute
separate and independent obligations of Nord from its other obligations under
this Agreement and shall not merge in any judgment granted in respect of this
Agreement.

ARTICLE 10

GENERAL

10.1     Notices

All notices
which may or are required to be given pursuant to any provision of this
Agreement shall be given or made in writing and shall be served personally or
sent by telecopy and in the case of:

(a)               
Nord, addressed to:

	 	

Nord Pacific Limited

Suite 116, 2727 San Pedro Dr. N.E.

Albuquerque, New Mexico  87110

United States

    
	 	 
	 	

Attention:          President and Chief Executive Officer

    
	 	

Facsimile:         +1-505-830-9332

    

(b)              
Allied, addressed to:

	 	

Allied Gold Limited

Unit 15, Level 1

51-53 Kewdale Road

Welshpool, WA  6106

    
	 	Australia
	 	 
	 	Attention:          Managing Director
	 	Facsimile:         +62-8-9353-4894

 

 

48

 

With a copy to: 

Macleod Dixon LLP

Barristers and Solicitors

3700 Canterra Tower

400 - 3rd Avenue S.W.

Calgary, AB  T2P 4H2

Canada

Attention:  Tad
Gruchalla-Wesierski

Facsimile No.:  +1-403-264-5973

or such other address or facsimile number
as the parties may, from time to time, advise the other parties hereto by
notice in writing.  The date of receipt of any such notice shall be deemed to
be the date of delivery thereof or, in the case of notice sent by facsimile,
the date of successful transmission thereof (unless transmission is received on
a day that is not a business day or after 5:00 p.m. local time on a business
day, in which case the date of receipt shall be deemed to be the next business
day).

10.2     Survival

The
representations and warranties contained herein shall, notwithstanding any
investigation by any party, survive the execution of this Agreement until the
Effective Date, whereupon such representations and warranties shall expire and
be of no further force or effect.

10.3     Binding Effect and Assignment

This Agreement
and the Arrangement shall be binding upon and shall enure to the benefit of the
parties hereto and their respective successors and permitted assigns.  Neither
this Agreement nor any rights hereunder or under the Arrangement may be
assigned by either party without the prior written consent of the other.

10.4     Public Disclosure

With the
exception of the initial news release pertaining to this Agreement, the
contents of which must be acceptable to both parties hereto, none of Nord, the
Nord Subsidiaries or their respective Representatives shall disclose or
communicate, by press release or other public announcement, any aspect of the
transactions contemplated hereby, without the prior written consent of Allied;
provided that, if Nord is required by law or administrative regulation to make
any disclosure relating to the transactions contemplated herein, such
disclosure may be made, but Nord will inform and consult with Allied, to the
extent and as early as possible, as to the wording of such disclosure prior to
its being made.  To the extent possible, Nord and Allied will use best efforts
to issue joint press releases if so requested by Allied.

 

49

 

10.5     Expenses

Each party shall
pay its own costs incurred in connection with the Arrangement and shall not be
responsible for any costs, expenses or fees incurred or paid by the other
party.

10.6     Time of Essence

Time shall be of
the essence of this Agreement.

10.7     Governing Law

This Agreement
shall be governed by and construed in accordance with the laws of the Province
of New Brunswick and the parties hereto irrevocably attorn to the non‐exclusive
jurisdiction of the courts of the Province of New Brunswick.

10.8     Counterparts

This Agreement
may be executed in counterparts, each of which shall be deemed an original, and
all of which together shall constitute one and the same instrument.  Each party
that signs a counterpart shall provide an original of that counterpart to the
other parties hereto.

10.9     Further Assurances

Each of the parties shall make, do and execute, or cause to be made,
done and executed all such further acts, deeds, agreements, transfers,
assurances, instruments or documents as may reasonably be required in order to
implement this Agreement and the Plan of Arrangement.

IN WITNESS WHEREOF the parties have
executed this Agreement as of the date first above written.

Allied Gold Limited                                              Nord
Pacific Limited

By:                                                                                                                                                       

By:                                                                                                                                                       

 

50

 

 

SCHEDULE 1

to the Arrangement Agreement made as of December ., 2003

between ALLIED GOLD LIMITED and

NORD PACIFIC LIMITED

PLAN OF ARRANGEMENT OF NORD PACIFIC LIMITED

 UNDER SECTION 128 OF THE

BUSINESS CORPORATIONS ACT (NEW BRUNSWICK)

ARTICLE 1

INTERPRETATION

1.1       Definitions

In this Plan of
Arrangement, unless there is something in the subject matter or context
inconsistent therewith, the following terms shall have the following respective
meanings, and grammatical variations of such terms shall have corresponding
meanings:

"Act" means the Business
Corporations Act, S.N.B. 1981, c. B-9.1, as amended;

            "Aggregate Option Exercise Price" means
the aggregate value of the cash that would have been payable upon exercise of
the Nord Option in full, expressed in Australian Dollars after conversion at
the Exchange Rate;

            "Aggregate Option Worth" means the
product obtained by multiplying the aggregate number of Nord Shares issuable
upon exercise of the Nord Option in full by AUS $0.20;

"Allied" means Allied Gold Limited, a corporation incorporated under the
laws of Western Australia;

"Allied Shares"
means common shares of Allied;

"Arrangement"
means an arrangement under the provisions of Section 128 of the Act, on
the terms and conditions set forth in this Plan of Arrangement;

"Arrangement Agreement"
means the Arrangement Agreement made as of December 20, 2003 between
Allied and Nord, as the same may be amended or amended and restated;

"AUS$" means
Australian dollars, the lawful currency of Australia;

"business day"
means a day other than a Saturday, Sunday or a day when banks in the City of
Albuquerque generally are not open for business;

"Court" means the
Court of Queen's Bench of New Brunswick;

 

51

 

"Depository" means
.
and such other depository, if any, specified in the Letter of Transmittal;

"Effective Date" means
the date on which the Arrangement becomes effective under the Act;

"Effective Time"
means 12:01 a.m. (Fredericton time) on the Effective Date;

"Exchange Rate"
means the exchange rate used to calculate the conversion of U.S. Dollars into
Australian Dollars based upon the noon rate quoted by the Federal Reserve Bank
of New York on the 2nd business day prior to the Effective Date;

"Letter of Transmittal"
means the letter of transmittal to be forwarded by Nord to the Nord
Securityholders, for use by the Nord Shareholders in order to receive share
certificates representing Allied Shares in exchange for their share
certificates formerly representing Nord Shares and for use by the Nord
Optionholders in order to receive share certificates representing Allied Shares
in exchange for the cancellation of their Nord Options;

"Nord" means Nord Pacific Limited, a corporation continued under the laws
of New Brunswick;

"Nord Options"
means options to purchase Nord Shares issued and outstanding, or any agreement
to issue shares on the occurrence of one or more conditions in existence,
immediately prior to the Effective Time under the Nord Stock Option Plans or
otherwise;

"Nord Meeting"
means the special meeting of Nord Securityholders (including any adjournment
thereof) to be held to consider and, if thought fit, approve the Arrangement;

"Nord Securityholders"
means the registered holders of Nord Shares and the holders of Nord Options;

"Nord Shares"
means common shares of Nord;

"Nord Stock Option Plans"
means the Nord Stock Option Plans as defined in the Arrangement Agreement;

"Registrar" means
the Director of Corporations or a Deputy Director of Corporations for the
Province of New Brunswick, duly appointed under the Act;

"U.S." means the
United States of America including the states thereof, the District of
Columbia, and its territories and possessions.

 

52

 

1.2       Interpretation Not Affected by Headings, Etc.

The division of
this Plan of Arrangement into articles, sections and other portions and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Plan of Arrangement.  The
terms "this Plan of Arrangement", "hereof",
"herein" and "hereunder" and similar expressions refer to
this Plan of Arrangement and the Appendix hereto and not to any particular
article, section or other portion hereof and include any agreement or
instrument supplementary or ancillary hereto.

1.3       Article References

Unless the
contrary intention appears, references in this Plan of Arrangement to a Section,
subsection, paragraph or subparagraph by number or letter or both refer to the
Section, subsection, paragraph or subparagraph, respectively, bearing that
designation in this Plan of Arrangement.

1.4       Number, Etc.

Unless the
context requires the contrary, words importing the singular number only shall
include the plural and vice versa; words importing the use of any gender shall
include all genders; and words importing persons shall include natural persons,
firms, trusts, partnerships, corporations, associations, unincorporated
organizations, governmental bodies and other legal or business entities of any
kind.

ARTICLE 2

THE ARRANGEMENT

2.1       Arrangement

At the Effective
Time on the Effective Date, each of the following transactions shall occur and
shall be deemed to occur in the following order without any further act or
formality:

(a)   all the issued and outstanding Nord Shares
(other than Nord Shares held by Allied or by registered holders who have
exercised dissent rights in accordance with Section 3.1 and who are
ultimately entitled to be paid fair value for such shares) and all of the Nord
Options (other than Nord Options held by Allied or holders who have exercised
dissent rights in accordance with Section 3.1 and who are ultimately
entitled to be paid fair value for such options) shall be, and shall be deemed
to be, exchanged with Allied as follows:

(i)    in respect of each Nord Shareholder whose Nord
Shares are so exchanged, each Nord Share shall be exchanged for AUS$0.20
payable in Allied Shares at the rate of one Allied Share for AUS$0.20; and

 

53

 

(ii)   in respect of each Nord Optionholder whose Nord
Options are so exchanged, an amount in Australian dollars equal to the
difference, if positive, between the Aggregate Option Exercise Price and the
Aggregate Option Worth, and such amount shall be payable in Allied Shares at
the rate of one Allied Share for AUS$0.20;

(b)    with respect to each Nord Share or Nord Option
to which Subsection 2.1(a) applies:

(i)    the holder thereof shall cease to be a holder of
such securities and such holder's name shall be removed from the register of Nord Shares with respect to such shares or shall cease to have any rights under
the Nord Options, as the case may be;

(ii)   the holder thereof shall cease to have any
rights of action related to the holder's ownership of such Nord Shares or Nord
Options other than to be paid the consideration therefor contemplated herein
(where applicable, net of withholding tax paid by Allied in respect thereof);
and

(iii)  Allied shall be, and shall be deemed to be, the
transferee of such Nord Shares (free of any claims) and shall be entered in the
register of such Nord Shares as the legal and beneficial owner of all Nord
Shares so exchanged and transferred and the Nord Options shall be cancelled; 

(c)   to the extent Allied pays withholding tax in
respect of the consideration payable to any Nord Shareholder or Nord
Optionholder, Allied shall have thereby satisfied its obligations in respect of
that Nord Shareholder or Nord Optionholder to the extent of such withholding
tax paid; and

(d)   the subordinated indebtedness of Nord to Nord
Resources Corporation in the amount of AUS$280,000 on the books of Nord shall
be converted into shares of Allied at the rate of AUS$0.20 of such indebtedness
for one Allied Share (or 1,400,000 Allied Shares in the aggregate).

2.2       Fractional Shares

Notwithstanding
anything herein contained, no fractional Allied Shares will be issued.  Where
the aggregate number of Allied Shares to be issued to a former Nord Shareholder
would result in a fraction of a Allied Share being issued, the number of Allied
Shares shall be rounded down to the nearest number of whole shares.

 

54

 

ARTICLE 3

RIGHTS OF DISSENT

3.1       Rights of Dissent

Registered
holders of Nord Shares and Nord Options may exercise rights of dissent in the
manner set forth in Section 131 of the Act in connection with the
Arrangement, subject to the following provisions:

(a)   securityholders who exercise their rights of
dissent and who are ultimately entitled to be paid fair value shall be deemed
to have transferred their Nord Shares or Nord Options to Nord for cancellation
as of the Effective Time and such shares shall be deemed to have no longer been
issued and outstanding or valid as of the Effective Time; and

(b)   securityholders who exercise such rights of
dissent and who are ultimately not entitled for any reason to be paid fair
value for their Nord Shares or Nord Options or securityholders who withdraw
their dissent in accordance with Section 131 of the Act shall be deemed to have participated in the Arrangement
as of and from the Effective Time on the same basis as the non‐dissenting
securityholders, and in particular:

(i)   the Nord Shares and Nord Options held by such
securityholders shall be deemed to have been transferred to Allied as of the
Effective Time in accordance with Section 2.1; and

(ii)   such securityholders shall be entitled to
receive Allied Shares in accordance with Section 2.1 and the other
relevant provisions of this Plan of Arrangement.

In no case shall Nord or Allied be
required to recognize securityholders who exercise their rights of dissent as
holders of Nord Shares or Nord Options at and after the Effective Time, and the
names of such securityholders shall be deleted from Nord's registers of holders
of such shares or options on the Effective Date.

ARTICLE 4

SHARE CERTIFICATES AND CASH PAYMENTS

4.1       Rights of Holders

After the
Effective Time, certificates formerly representing Nord Shares and agreements
relating to Nord Options to which Section 2.1 applies shall represent only
the right to receive certificates representing the Allied Shares, if any, which
the former holder of such Nord Shares or Nord Options is entitled to receive
pursuant to Article 2 subject to compliance with the requirements set
forth in this Article 4.  

 

55

4.2       Transmittal

Before, or as
soon as practicable after, the Effective Date, Nord shall forward to each former
registered holder of Nord Shares and Nord Options to which Section 2.1
applies at the address of such holder as it appeared in the relevant share
register of Nord a Letter of Transmittal containing, among other things,
instructions for obtaining delivery of certificates representing the Allied
Shares pursuant to this Plan of Arrangement.  Such former holder of Nord Shares
or Nord Options shall be entitled to receive certificates representing the
Allied Shares which such holder is entitled to receive pursuant to
Section 2.1, upon delivering the certificate formerly representing such
holder's Nord Shares or agreement relating to such holder's Nord Options to the
Depository, or as the Depository may otherwise direct, in accordance with the
instructions contained in the Letter of Transmittal.  Such certificate formerly
representing such holder's Nord Shares or agreement relating to such holder's
Nord Options shall be accompanied by the Letter of Transmittal, duly completed,
and such other documents as the Depository may reasonably require.  The
Depository shall register the Allied Shares in such name, and shall deliver by
first class mail, postage prepaid, or, in the case of postal disruption, by
such other means as the Depository deems prudent, such shares, to such address
as such holder may direct in such Letter of Transmittal, as soon as practicable
after receipt by the Depository of such documents.

4.3       No Entitlement

The holders of
Nord Shares or Nord Options shall not be entitled to any interest, dividend, premium
or other payment on or with respect to the Nord Shares other than the Allied
Shares which they are entitled to receive for the Nord Shares or Nord Options
pursuant to this Plan of Arrangement.

4.4       Termination of Rights

Any certificate
formerly representing Nord Shares or agreement relating to such holder's Nord
Options that is not deposited with all other documents as provided in
Section 4.2 on or before the sixth anniversary of the Effective Date shall
cease to represent a right or claim of any kind or nature whatsoever and the
rights of the holder of such certificate in respect of the Allied Shares
represented thereby or any payment pursuant to Section 2.2 shall be deemed
to be surrendered to Allied together with all dividends or distributions thereon
held for such holder.

4.5       Distributions

All dividends
paid or distributions made in respect of the Allied Shares issued to a former
Nord Securityholder for which a certificate representing Allied Shares has not
been delivered to such holder in accordance with Section 4.2 shall be paid
or delivered to the Depository to be held in trust for such holder, subject to
Section 4.4, for delivery to the holder, net of all withholding and other
taxes, upon delivery of the certificate in accordance with Section 4.2.

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