PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
Private Placement Agreement
IVANHOE MINES LTD. | ||||
Date:October 25, 2006 | By: | /s Beverly A. Bartlett | ||
BEVERLY A. BARTLETT | ||||
Vice President and Corporate Secretary | ||||
1. | REPORTING ISSUER | |
Ivanhoe Mines Ltd. (the “Company”) | ||
654 – 999 Canada Place | ||
Vancouver, British Columbia | ||
V6C 3E1 | ||
2. | DATE OF MATERIAL CHANGE | |
October 18, 2006 | ||
3. | PRESS RELEASE | |
The press release was issued on October 18, 2006 and was disseminated through the facilities of recognized newswire services. | ||
4. | SUMMARY OF MATERIAL CHANGE | |
On October 18, 2006, the Company entered into a private placement agreement (the “Private Placement Agreement”) with Rio Tinto International Holdings Limited (“Rio Tinto”), a wholly-owned subsidiary of Rio Tinto plc. | ||
Under the terms of the Private Placement Agreement: |
(a) | Rio Tinto agreed to acquire, |
(i) | 37,089,883 common shares of the Company (representing, upon completion, 9.95% of the Company’s outstanding common shares) at a price of US$8.18 per share (the “First Tranche Private Placement”) at a closing scheduled to occur on October 27, 2006, and | ||
(ii) | 46,304,473 common shares of the Company (representing, upon completion, an additional 9.95% of the Company’s outstanding common shares) at a price of US$8.38 per share (the “Second Tranche Private Placement”) at a closing to occur after the Company enters into an investment agreement with the Government of Mongolia in respect of the Company’s Oyu Tolgoi copper and gold mining project (the “OT Project”) in Mongolia’s South Gobi region that is mutually acceptable to the Company and Rio Tinto (an “Approved OT Investment Contract”) (provided the agreement is entered into within three years) or such earlier date as Rio Tinto may elect; |
(b) | the Company agreed to issue to Rio Tinto, as part of the First Tranche Private Placement, 46,026,522 non-transferable common share purchase warrants (the “Series A Warrants”) and 46,026,522 non-transferable common share purchase warrants (the “Series B Warrants”). Each Series A Warrant will entitle the holder to purchase one common share of the Company at a price between US$8.38 and US$8.54 for a period (not exceeding four years) ending one year after the Company enters into an Approved |
- 2 -
OT Investment Contract. Each Series B Warrant will entitle the holder to purchase one common share of the Company at a price between US$8.38 and US$9.02 for a period (not exceeding five years) ending two years after the Company enters into an Approved OT Investment Contract. The exercise of the Series A Warrants and the Series B Warrants will be subject to the prior approval of the Company’s shareholders; |
(c) | Rio Tinto has the right to acquire additional securities and participate in future financings by the Company, so as to maintain its proportional equity interest in the Company; | ||
(d) | during the first five years, Rio Tinto and its affiliates (collectively, the “Rio Tinto Group”) may not, except with the approval of the Company’s board of directors: |
(i) | directly or indirectly, acquire or hold more than 40% of the Company’s outstanding common shares; | ||
(ii) | make a take-over bid for the Company’s outstanding common shares; or | ||
(iii) | make any solicitation of proxies to vote any of the Company’s outstanding common shares. |
Notwithstanding the foregoing, if a take-over bid is made for the Company’s outstanding common shares or the Company publicly announces that its board of directors has approved an agreement which contemplates a change of control of the Company, the Rio Tinto Group will be released from this restriction for the purpose of giving the Rio Tinto Group an opportunity to make a competing take-over bid or to propose to the Company an alternative change of control transaction. Rio Tinto will be similarly released from the 40% aggregate shareholding restriction where it acquires common shares from Robert M. Friedland (“Friedland”) pursuant to the right of first refusal granted to it under a shareholders’ agreement dated October 18, 2006 (the “Shareholders’ Agreement”) between Rio Tinto and Friedland if such common shares would otherwise have been sold to any party other than an institutional investor who meets certain prescribed criteria under the Private Placement Agreement; | |||
(e) | during the first year, Rio Tinto may not sell any common shares of the Company except to an affiliate or with the approval of the Company’s board of directors. Notwithstanding the foregoing, Rio Tinto may sell its common shares of the Company pursuant to a take-over bid or a transaction involving a change of control of the Company; | ||
(f) | after the first year but before the fifth year, if Rio Tinto proposes to sell more than 5% of the Company’s outstanding common shares to any person other than an affiliate or an institutional investor who meets certain prescribed criteria under the Private Placement Agreement and not pursuant to a take-over bid or a transaction involving a change of control of the Company, the Company will have the right, for a period of 60 days, to place such common shares with a third party. Rio Tinto and the Company have agreed to enter into a registration rights agreement pursuant to which the Company will agree |
- 3 -
to provide Rio Tinto with registration rights in respect of the common shares of the Company held by Rio Tinto from time to time; |
(g) | Rio Tinto has the right to nominate directors to the Company’s board of directors in proportion to its shareholdings of the Company. If Rio Tinto is entitled to nominate more than one director, half of such nominees must be independent directors as defined under applicable securities laws. Rio Tinto also has the right to nominate one financially literate, independent director to the audit committee of the Company; | ||
(h) | the Company has agreed to use at least 90% of the proceeds received from the private placement to finance the development of the OT Project; | ||
(i) | subject to the Rio Tinto Group maintaining a minimum shareholding in the Company, the Company has granted to Rio Tinto a right of first refusal in respect of any proposed disposition of an interest in the OT Project; | ||
(j) | Rio Tinto has the right to participate in the negotiations with the Government of Mongolia for an Approved OT Investment Contract; | ||
(k) | subject to the Rio Tinto Group maintaining a minimum shareholding in the Company, a technical committee will jointly development, operate and manage the OT Project. The technical committee will consist of two members from the Company, two members from Rio Tinto and a fifth member who will act as committee chairman and senior manager of the OT Project. A Company nominee will serve as technical committee chairman and senior manager for the first five years. During this period, unanimous consent of all technical committee members will be required for certain material decisions, including acquisitions and commitments exceeding US$100 million and material amendments to the long-term OT Project mine plan. After five years, subject to the Rio Tinto Group maintaining a minimum shareholding in the Company, Rio Tinto will have the right to appoint the subsequent chairman and senior manager; | ||
(l) | Rio Tinto and the Company have agreed to negotiate in good faith to agree upon one or more technical services agreements pursuant to which Rio Tinto will make available, at cost during the first five years, its engineering, mining and metallurgical staff to assist the Company in the mine planning, engineering, design and construction of the OT Project; and | ||
(m) | the Company has agreed to divest its joint venture interest in the Monywa Copper project in Myanmar (the “Myanmar Assets”) by February 1, 2007, failing which, Rio Tinto has the right to cause the Company to put the Myanmar Assets to an unrelated trust whose sole purpose will be to sell the Myanmar Assets. Rio Tinto and the Company have acknowledged that the divestiture by the Company of its other non-core assets is also a key objective that the parties intend the Company to pursue. |
- 4 -
of the Company’s shareholders) to acquire an additional 92,053,044 common shares of the Company. If the Series A Warrants and Series B Warrants were to be fully exercised, Rio Tinto would beneficially own approximately 34.33% of the Company’s outstanding common shares (or 33.35% on a fully diluted basis). | ||
On October 18, 2006, Rio Tinto and Friedland, the largest shareholder of the Company, entered into the Shareholders’ Agreement pursuant to which Friedland has agreed to vote in favour of all shareholder resolutions envisaged by the Private Placement Agreement, including a resolution authorizing the exercise of the Series A Warrants and Series B Warrants, and has granted to Rio Tinto, for a period of five years, a right of first refusal over, and/or rights of placement with third parties in relation to, the sale by him or any of his affiliates of any common shares of the Company to any person, subject to certain exceptions including sales to permitted transferees or pursuant to a take-over bid or a transaction involving a change of control of the Company. | ||
5. | FULL DESCRIPTION OF MATERIAL CHANGE | |
On October 18, 2006, the Company and Rio Tinto entered into the Private Placement Agreement and Friedland and Rio Tinto entered into the Shareholders’ Agreement. | ||
Private Placement Agreement | ||
The material terms and conditions of the Private Placement Agreement are described below. |
(a) | Series A Warrants exercisable, subject to the prior approval of the Company’s shareholders, to purchase an additional 46,026,522 common shares of the Company; and | ||
(b) | Series B Warrants exercisable, subject to the prior approval of the Company’s shareholders, to purchase an additional 46,026,522 common shares of the Company; |
- 5 -
(a) | includes terms granting legal, administrative and tax stability to the stakeholders of the OT Project for a certain period of time and guaranteeing that the legal, administrative and/or tax framework in force in Mongolia when the investment contract is entered into will remain unmodified for the term of the investment contract notwithstanding any modification, either introduced by law or regulations, enacted after the execution of the investment contract; | ||
(b) | has, to the extent required by applicable Mongolian law, been approved, ratified, consented to or otherwise authorised by all relevant Mongolian governmental authorities; | ||
(c) | has been approved by the Company’s board of directors; and | ||
(d) | is mutually acceptable to Company and Rio Tinto, acting reasonably. |
- 6 -
(a) | the twentieth business day following the date on which the Company, or a subsidiary of the Company, enters into an Approved OT Investment Contract; and | ||
(b) | the tenth business day after Rio Tinto notifies the Company of its election to complete the Second Tranche Private Placement in the absence of an Approved OT Investment Contract. |
(a) | the date upon which the Company, or a subsidiary of the Company, enters into an Approved OT Investment Contract; and | ||
(b) | the third anniversary of the closing of the First Tranche Private Placement; |
(a) | U.S.$8.38 until the 180th day following the Warrant Determination Date; and | ||
(b) | U.S.$8.54 after the 180th day until 365th day following the Warrant Determination Date. |
- 7 -
(a) | U.S.$8.38 until the 180th day following the Warrant Determination Date; | ||
(b) | U.S.$8.54 after the 180th day until 365th day following the Warrant Determination Date; | ||
(c) | U.S.$8.88 after the 365th day until the 545th day following the Warrant Determination Date; and | ||
(d) | U.S.$9.02 after the 545th day until the 725th day following the Warrant Determination Date. |
(a) | the aggregate sales price of any common shares of the Company to be registered pursuant to a Demand Registration must be equal to or greater than U.S.$35 million; | ||
(b) | no more than two Demand Registrations may be requested in any twelve month period; and | ||
(c) | no request for a Demand Registration may be made within 90 days of the date of effectiveness of any other registration statement filed by the Company pursuant to the Registration Rights Agreement. |
- 8 -
- 9 -
(a) | equity incentive securities or equity compensation securities in favour of directors, officers or service providers of the Company pursuant to an equity incentive plan adopted by the Company and approved by its shareholders; | ||
(b) | the exercise of any convertible securities of the Company outstanding as of the date of the Private Placement Agreement; or | ||
(c) | any issuance of securities made to all holders of common shares of the Company on a pro rata basis. |
- 10 -
(a) | except as specifically contemplated or permitted by the terms of the Private Placement Agreement, engage in any Specified Activity (as defined below); | ||
(b) | acquire more than 6.65% of the issued and outstanding common shares of the Company before fully exercising the Series A Warrants and the Series B Warrants (other than as provided in the Private Placement Agreement); or | ||
(c) | after having fully exercised all of the Series A Warrants and the Series B Warrants, acquire additional common shares that would result in Rio Tinto and its affiliates holding in excess of 40% of the Company’s then issued and outstanding common shares. |
- 11 -
- 12 -
- 13 -
- 14 -
6. | RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102 | |
Not applicable | ||
7. | OMITTED INFORMATION | |
No information has been intentionally omitted from this form. | ||
8. | EXECUTIVE OFFICER | |
The name and business number of the executive officer of the Company who is knowledgeable of the material change and this report is: | ||
Beverly Bartlett 654 – 999 Canada Place Vancouver, British Columbia V6C 3E1 | ||
Telephone: (604) 688-5755 | ||
9. | DATE OF REPORT | |
DATED at Vancouver, British Columbia this 25th day of October, 2006. |
A. | capitalized terms used in these recitals without definition have the meanings assigned to them in Section 1.1 hereof; | |
B. | Rio Tinto wishes to make the Equity Investment in Ivanhoe; and | |
C. | the parties are entering into this Agreement to formally document their agreement in respect of the matters referred to in the foregoing recitals and certain ancillary matters. |
DEFINITIONS AND INTERPRETATION
- 2 -
- 3 -
(i) | is publicly available at the time of its disclosure under this Agreement; or | ||
(ii) | becomes publicly available following disclosure under this Agreement (other than as a result of disclosure by the receiving party contrary to the terms of this Agreement); or | ||
(iii) | was previously disclosed to or otherwise already lawfully in the possession of the receiving party or any of its Affiliates prior to disclosure under this Agreement (as can be demonstrated by written records or other reasonable evidence) from a third party who is not, to the knowledge of the receiving party after due enquiry, under an obligation of confidentiality to the other party to this Agreement in relation to such information, data, knowledge or know-how; or | ||
(iv) | following disclosure under this Agreement, becomes available to the receiving party or any of its Affiliates (as can be demonstrated by written records or other reasonable evidence) from a third party who is not, to the knowledge of the receiving party after due enquiry, under an obligation of confidentiality to the other party to this Agreement in relation to such information, data, knowledge or know-how; or | ||
(v) | is independently developed by or on behalf of the receiving party or any of its Affiliates without reference to information, data, knowledge and know-how previously disclosed under this Agreement; |
- 4 -
(i) | a bank, loan corporation, trust company, insurance company, credit union or other entity that is predominantly engaged in financial services activities, that is supervised and regulated under Applicable Laws in respect of such activities in its jurisdiction of domicile and that is not Controlled by any person who is not an Eligible Institutional Investor; | ||
(ii) | a pension fund that is supervised and regulated as such under Applicable Laws in its jurisdiction of domicile and that is not Controlled by any person who is not an Eligible Institutional Investor; | ||
(iii) | a mutual fund (as that term is defined under Canadian Securities Laws) or an entity, wheresoever domiciled, that is substantially similar to a mutual fund, that is supervised and regulated as such under Applicable Laws in its jurisdiction of domicile and that is not Controlled by any person who is not an Eligible Institutional Investor; or | ||
(iv) | an investment manager who is registered or licensed to provide investment counselling, portfolio management or similar advisory services in respect of securities or exempt from the requirement to be so registered or licensed, under the Applicable Laws of its jurisdiction of domicile and who, in relation to the securities it manages, exercises discretion to vote, acquire or dispose of such securities without |
- 5 -
the express consent of the beneficial owner, subject to applicable legal requirements, general investment policies, guidelines, objectives or restrictions; |
- 6 -
(i) | Ivanhoe’s then most recently filed annual information form; | ||
(ii) | Ivanhoe’s then most recently filed audited annual consolidated comparative financial statements, together with the notes thereto and the auditors’ report thereon and including management’s discussion and analysis of financial condition and results of operations for the periods reported upon; | ||
(iii) | Ivanhoe’s unaudited interim comparative consolidated financial statements, including management’s discussion and analysis of financial condition and results of operations for periods to which such financial statements relate, filed |
- 7 -
since the end of the financial year of Ivanhoe to which Ivanhoe’s then most recently filed audited annual consolidated comparative financial statements relate; |
(iv) | all management proxy circulars filed by Ivanhoe during the twelve (12) months preceding such time; | ||
(v) | all material change reports filed by Ivanhoe during the twelve (12) months preceding such time; and | ||
(vi) | Ivanhoe’s then most recently filed annual report on Form 40-F; |
- 8 -
(i) | any securities that are listed or quoted on any stock exchange or securities market or traded on any over-the-counter market; or | ||
(ii) | any securities owned, directly or indirectly, by an issuer whose securities are listed or quoted on any stock exchange or securities market or traded on any over-the-counter market; |
(i) | includes terms granting legal, administrative and tax stability to the stakeholders of the OT Project for a certain period of time and guaranteeing that the legal, administrative and/or tax framework in force in Mongolia when the investment contract is entered into will remain unmodified for the term of the investment |
- 9 -
contract notwithstanding any modification, either introduced by law or regulations, enacted after the execution of the investment contract; and |
(ii) | has, to the extent required by Applicable Law, been approved, ratified, consented to or otherwise authorised by all relevant Governmental Authorities in Mongolia; |
(i) | those geographical areas in the Omnigov Aimag of Mongolia that are the subject of the Existing Licenses, a map and schedule of co-ordinates of which is attached as Schedule “E”; and | ||
(ii) | all geographical areas situated within a fifty (50) kilometre radius of the outer perimeter of the geographical areas that are the subject of the Existing Licenses in which Ivanhoe or any of its Subsidiaries now holds, or hereafter acquires, an interest of any nature whatsoever; |
- 10 -
- 11 -
(i) | make a takeover bid or a tender offer or participate as a bidder in any takeover bid or tender offer for any or all issued and outstanding Ivanhoe Shares or Ivanhoe Convertible Securities; | ||
(ii) | otherwise acquire, directly or indirectly, any Ivanhoe Shares or Ivanhoe Convertible Securities or any rights or options to acquire any Ivanhoe Shares or Ivanhoe Convertible Securities; | ||
(iii) | propose any merger, statutory arrangement or business combination between Ivanhoe and any member of the Rio Tinto Group; |
- 12 -
(iv) | make any solicitation of proxies to vote any Ivanhoe Shares; or | ||
(v) | form, join or in any way participate in a “group” within the meaning of Section 13(d)(3) of the U.S. Exchange Act with respect to any of the foregoing; |
(i) | the Approved OT Investment Contract Date; or | ||
(ii) | the third (3rd) anniversary of the First Closing Date; and |
- 13 -
1.2 | For the purposes of this Agreement, except as otherwise expressly provided: |
(a) | “this Agreement” means this agreement, including the schedules hereto, and not any particular part, section or other portion hereof, and includes any agreement, document or instrument entered into, made or delivered pursuant to the terms hereof, as the same may, from time to time, be supplemented or amended and in effect; | ||
(b) | all references in this Agreement to a designated “Part”, “Section”, “Subsection” or other subdivision or to a schedule are references to the designated part, section, subsection or other subdivision of, or schedule to, this Agreement; | ||
(c) | the words “hereof”, “herein”, “hereto” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular part, section, subsection or other subdivision or schedule unless the context or subject matter otherwise requires; | ||
(d) | the division of this Agreement into parts, sections and other portions and the insertion of headings are for convenience of reference only and are not intended to interpret, define or limit the scope, extent or intent of this Agreement or any provision hereof; | ||
(e) | unless otherwise provided herein, all references to currency in this Agreement are to lawful money of the United States of America and, for greater certainty, “$” means United States dollars; | ||
(f) | a reference in this Agreement to a statute includes all regulations made thereunder, all amendments to the statute or regulations in force from time to time, and any statute or regulation that supplements or supersedes such statute or regulations; | ||
(g) | the singular of any term includes the plural, and vice versa, and words importing any gender include all genders, and the word “including” is not limiting whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto; | ||
(h) | words importing persons include individuals, corporations, limited and unlimited liability companies, general and limited partnerships, associations, trusts, unincorporated organizations, joint ventures, Governmental Authorities and other entities; | ||
(i) | in the event that 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 will be required to be taken on the next succeeding day which is a Business Day; and | ||
(j) | all references to “approval”, “authorization” or “consent” in this Agreement mean written approval, authorization or consent. |
- 14 -
1.3 | Attached to and forming part of this Agreement are the following Schedules: |
Schedule “B” — Form of Series B Warrant Certificate
Schedule “C” — Form of Registration Rights Agreement
Schedule “D” — Agreed Terms for Disposition of Myanmar Assets
Schedule “E” — Existing Licenses, OT Project Map and Co-ordinates
EQUITY INVESTMENT
2.1 | Subject to the terms and conditions of this Agreement, on the First Closing Date, |
(a) | Rio Tinto will subscribe for and purchase from Ivanhoe, and Ivanhoe will issue and sell to Rio Tinto, thirty seven million, eighty nine thousand, eight hundred and eighty three (37,089,883) Ivanhoe Shares (the “First Tranche Private Placement Shares”) at an issue price per First Tranche Private Placement Share of eight dollars and eighteen cents ($8.18) for an aggregate subscription price (the “First Tranche Subscription Price”) of three hundred and three million, three hundred and ninety five thousand, two hundred and forty two dollars and ninety four cents ($303,395,242.94) in cash ; and | ||
(b) | immediately after the issue of the First Tranche Private Placement Shares, Rio Tinto will subscribe for and purchase from Ivanhoe, and Ivanhoe will issue and sell to Rio Tinto: |
(iii) | share purchase warrants (the “Series A Warrants”) exercisable, subject to Section 3.5, to purchase an additional forty six million, twenty six thousand, five hundred and twenty two (46,026,522) Ivanhoe Shares in accordance with the terms described in Section 3.1; and | ||
(iv) | share purchase warrants (the “Series B Warrants”) exercisable, subject to Section 3.5, to purchase an additional forty six million, twenty six thousand, five hundred and twenty two (46,026,522) Ivanhoe Shares in accordance with the terms described in Section 3.2, |
- 15 -
(a) | within fifteen (15) Business Days of the Approved OT Investment Contract Date; or | ||
(b) | if Rio Tinto gives Notice to Ivanhoe that Rio Tinto is making the election contemplated by Section 2.9, as of the date of the Notice given pursuant to Section 2.9; |
2.5 | The issue price per Top Up Private Placement Share (the “Top Up Share Price”) will be: |
(a) | if, during the period commencing on the First Closing Date and ending on the date that Rio Tinto gives Notice pursuant to Section 2.4, Rio Tinto fully exercises its rights under Part 5 in respect of each issuance of Dilutive Ivanhoe Shares, an amount equal to the lesser of, |
(i) | eight dollars and thirty eight cents ($8.38), or |
- 16 -
(ii) | the closing market price of Ivanhoe Shares on the TSX on the date of the Notice given by Rio Tinto to Ivanhoe pursuant to Section 2.4; or |
(b) | in all other circumstances, eight dollars and thirty eight cents ($8.38); |
2.6 | If an Adjustment Event occurs: |
(a) | in the case of the First Tranche Private Placement, during the period commencing on the date hereof and ending on the First Closing Date, |
(i) | the number of First Tranche Private Placement Shares to be issued to Rio Tinto on the First Closing Date and the issue price per First Tranche Private Placement Share; and | ||
(ii) | the number of Series A Warrants and Series B Warrants to be issued to Rio Tinto on the First Closing Date and the exercise price of the Series A Warrants and the Series B Warrants; |
(b) | in the case of the Second Tranche Private Placement, during the period commencing on the date hereof and ending on the Second Closing Date, the number of Basic Second Tranche Private Placement Shares to be issued to Rio Tinto on the Second Closing Date and the issue price per Second Tranche Private Placement Share; | ||
(c) | at any time when Rio Tinto is entitled to exercise its pre-emptive rights pursuant to Part 5, during the period commencing on the date that Rio Tinto becomes entitled to exercise its rights under Section 5.2 or Section 5.3, as the case may be, and ending upon the date that Rio Tinto exercises such rights or allows them to lapse, whichever is earlier, the number of Anti-Dilution Ivanhoe Shares and Anti-Dilution Warrants, if any (provided that the Anti-Dilution Notice given to Rio Tinto does not reflect an appropriate adjustment in respect of the Adjustment Event) and the issue price per Anti-Dilution Ivanhoe Share; | ||
(d) | at any time after the First Tranche Private Placement, the number of First Tranche Private Placement Shares referred to in Sections 7.2 and 8.2; or | ||
(e) | at any time after the Second Tranche Private Placement, the number of Basic Second Tranche Private Placement Shares referred to in Sections 7.2 and 8.2, |
- 17 -
2.7 | Any adjustment required in any of the circumstances described in Section 2.6 with respect to: |
(a) | unissued Ivanhoe Shares will be effected by adjusting the number of Ivanhoe Shares, and the price per share at which, Rio Tinto would have been entitled to purchase such Ivanhoe Shares prior to the Adjustment Event (the “Original Issuance Terms”) to the number of Ivanhoe Shares, and the price per share at which, Rio Tinto would have been entitled to purchase such Ivanhoe Shares if Rio Tinto: |
(i) | had been the holder of a share purchase warrant having the Original Issuance Terms but otherwise having the terms set out in the Series A Warrant Certificate; and | ||
(ii) | was entitled to fully exercise such share purchase warrant after the Adjustment Event; |
(b) | unissued Series A Warrants, Series B Warrants or Anti-Dilution Warrants will be effected by adjusting the number of Series A Warrants, Series B Warrants or Anti-Dilution Warrants, as the case may be, that Rio Tinto would have been entitled to acquire, and the exercise price of such Series A Warrants, Series B Warrants or Anti-Dilution Warrants, as the case may be, prior to the Adjustment Event, to: |
(i) | that number of Series A Warrants, Series B Warrants or Anti-Dilution Warrants, as the case may be, equal to the maximum number of Ivanhoe Shares that such Series A Warrants, Series B Warrants or Anti-Dilution Warrants would be exercisable to acquire after the Adjustment Event; and | ||
(ii) | the exercise price per Ivanhoe Share at which such Series A Warrants, Series B Warrants or Anti-Dilution Warrants would be exercisable after the Adjustment Event; |
had such Series A Warrants, Series B Warrants or Anti-Dilution Warrants, as the case may be, been issued and outstanding prior to the Adjustment Event; and | |||
(c) | issued First Tranche Private Placement Shares or Basic Second Tranche Private Placement Shares referred to in Sections 7.2 and 8.2 will be effected by adjusting the number of First Tranche Private Placement Shares or Basic Second Tranche Private Placement Shares, as the case may be, referred to in Sections 7.2 and 8.2 prior to the Adjustment Event to a number of First Tranche Private Placement Shares or Basic Second Tranche Private Placement Shares, as the case may be, that gives effect to the Adjustment Event. |
- 18 -
(a) | the twentieth (20th) Business Day following the Approved OT Investment Contract Date; or | ||
(b) | the tenth (10th) Business Day following the date upon which Rio Tinto gives Notice to Ivanhoe that Rio Tinto is making the election contemplated by Section 2.9, |
(a) | the Approved OT Investment Contract Date; or | ||
(b) | the third (3rd) anniversary of the First Closing Date; |
- 19 -
(a) | a covenant by Robert M. Friedland to vote all of the Ivanhoe Shares he beneficially owns, directly or indirectly, at the Ivanhoe Meeting in favour of the Ivanhoe Shareholder Approval Matter; | ||
(b) | a covenant by Robert M. Friedland to refrain from disposing of any Ivanhoe Shares that Robert M. Friedland beneficially owns, directly or indirectly, on or before the First Closing Date; and | ||
(c) | the grant by Robert M. Friedland to Rio Tinto of a right of first refusal to purchase any Ivanhoe Shares that Robert M. Friedland beneficially owns, directly or indirectly, that he or any of his Affiliates intends to sell or otherwise dispose of during the period commencing on the First Closing Date and ending on the fifth (5th) anniversary of the First Closing Date. |
- 20 -
THE WARRANTS
(a) | eight dollars and thirty eight cents ($8.38) during the period commencing on the Ivanhoe Shareholder Approval Date and ending on the one hundred and eightieth (180th) day after the Warrant Determination Date; and | ||
(b) | eight dollars and fifty four cents ($8.54) during the period commencing on the one hundred and eighty first (181st) day after the Warrant Determination Date and ending on the three hundred and sixty-fifth (365th) day after the Warrant Determination Date. |
(a) | eight dollars and thirty eight cents ($8.38) during the period commencing on the Ivanhoe Shareholder Approval Date and ending on the one hundred and eightieth (180th) day after the Warrant Determination Date; | ||
(b) | eight dollars and fifty four cents ($8.54) during the period commencing on the one hundred and eighty first (181st) day after the Warrant Determination Date and ending on the three hundred and sixty-fifth (365th) day after the Warrant Determination Date; |
- 21 -
(c) | eight dollars and eighty eight cents ($8.88) during the period commencing on the three hundred and sixty-sixth (366th) day after the Warrant Determination Date and ending on the five hundred and forty-fifth (545th) day after the Warrant Determination Date; and | ||
(d) | nine dollars and two cents ($9.02) during the period commencing on the five hundred and forty-sixth (546th) day after the Warrant Determination Date and ending on the seven hundred and twenty-fifth (725th) day after the Warrant Determination Date. |
(a) | Rio Tinto’s right to exercise the Series A Warrants and the Series B Warrants has received Ivanhoe Shareholder Approval; and | ||
(b) | Rio Tinto’s right to exercise the Series A Warrants and the Series B Warrants has been approved, to the extent required in the reasonable opinion of Rio Tinto, under theInvestment Canada Act(Canada). |
- 22 -
BOARD OF DIRECTORS
- 23 -
4.3 | Each Rio Tinto Representative will be an individual who: |
(a) | consents in writing to act as a director of Ivanhoe; and | ||
(b) | is not disqualified from acting as a director of Ivanhoe under Applicable Law (except if such disqualification is based on the residency of such individual). |
(a) | an Independent Ivanhoe Director; and | ||
(b) | financially literate. |
PRE-EMPTIVE RIGHTS
(a) | the last day of the calendar quarter in which the Ordinary Dilutive Issuance occurred; or |
- 24 -
(b) | the fifth (5th) Business Day following the date upon which an Ivanhoe Control Transaction is publicly announced during such calendar quarter. |
(a) | cash, the price at which the Anti-Dilution Ivanhoe Shares will be issued to Rio Tinto will be an amount in cash equal to the price for which each such Dilutive Ivanhoe Share was issued; or | ||
(b) | other than cash, the price at which the Anti-Dilution Ivanhoe Shares will be issued to Rio Tinto will be an amount in cash equal to the volume-weighted average price of an Ivanhoe Share on the TSX or such other stock exchange or securities market on which the majority of the trading volume of Ivanhoe Shares occurs during the ten (10) trading days immediately preceding the date of the public announcement of the Ordinary Dilutive Share Issuance or the Special Dilutive Issuance, as the case may be, or the date upon which the Dilutive Ivanhoe Shares are issued, whichever is earlier. |
- 25 -
(a) | the award or exercise of any bona fide equity incentive securities or equity compensation securities in favour of directors, officers, employees or service providers of Ivanhoe or any of its Affiliates pursuant to any bona fide equity |
- 26 -
incentive plan adopted by Ivanhoe and approved by the holders of Ivanhoe Shares from time to time; |
(b) | the exercise of any Ivanhoe Convertible Securities outstanding as of the date hereof; or | ||
(c) | any issuance of Ivanhoe Shares or Ivanhoe Convertible Securities made to all holders of Ivanhoe Shares on a pro rata basis. |
IVANHOE SHARE ACQUISITIONS
AND DISPOSITIONS
(a) | engage in any Specified Activity; | ||
(b) | prior to having fully exercised all of the Series A Warrants and the Series B Warrants, directly or indirectly acquire, alone or jointly or in concert with any other person, any Ivanhoe Shares or Ivanhoe Convertible Securities (other than the Equity Investment Securities, Anti-Dilution Securities, Ivanhoe Shares acquired pursuant to the exercise of the Series A Warrants and the Series B Warrants, the Top Up Option, the Top Up Private Placement Shares or Ivanhoe Shares or Ivanhoe Convertible |
- 27 -
Securities acquired through an issuance made to all holders of Ivanhoe Shares on a pro rata basis) representing, in the aggregate, more than six and sixty five-hundredths per cent (6.65%) of the then issued and outstanding Ivanhoe Shares from time to time; or | |||
(c) | after having fully exercised all of the Series A Warrants and the Series B Warrants, directly or indirectly acquire, alone or jointly or in concert with any other person, any Ivanhoe Shares or Ivanhoe Convertible Securities if, following such acquisition, the Rio Tinto Group and all persons with whom the Rio Tinto Group is acting jointly or in concert, would beneficially own or exercise control or direction, or be deemed, under Applicable Law, to beneficially own, or exercise control or direction over, more than forty per cent (40%) of the then issued and outstanding Ivanhoe Shares. |
(a) | Rio Tinto or any of its Affiliates will be deemed to be actively pursuing an alternative Ivanhoe Control Transaction at a particular time if, at that time, Rio Tinto or any such Affiliate has made a “formal bid” (as defined under Canadian Securities Laws) that has not expired (and, for greater certainty, which may be extended), for a |
- 28 -
sufficient number of Ivanhoe Shares to effect an Ivanhoe Change of Control or Rio Tinto or any such Affiliate is engaged in active negotiations with Ivanhoe with respect to such alternative Ivanhoe Control Transaction; and |
(b) | nothing in the Shareholders’ Agreement will be construed as creating a non-arm’s length relationship between the parties to the Shareholders’ Agreement or their respective Affiliates. |
(a) | pursuant to an Ivanhoe Control Transaction; or | ||
(b) | with the prior written consent of Ivanhoe, evidenced by a resolution passed by the Ivanhoe board of directors acting by simple majority; or | ||
(c) | to any person who is a member of the Rio Tinto Group who covenants and agrees in writing with Ivanhoe to assume all of Rio Tinto’s obligations under this Agreement in respect of any Ivanhoe Shares or Ivanhoe Convertible Securities transferred to it; |
(a) | a member of the Rio Tinto Group who covenants and agrees in writing with Ivanhoe to assume all of Rio Tinto’s obligations under this Agreement in respect of the Placement Shares; or | ||
(b) | an Eligible Institutional Investor; |
- 29 -
OT PROJECT PARTICIPATION
- 30 -
- 31 -
(a) | such legally binding commitment is conditional upon the exercise or waiver by Rio Tinto of the OT Right of First Refusal; and | ||
(b) | upon entering into such legally binding commitment, Ivanhoe promptly delivers to Rio Tinto an OT Disposal Notice. |
(a) | any disposition of an OT Disposal Interest by a wholly-owned Subsidiary of Ivanhoe to another wholly-owned Subsidiary of Ivanhoe; | ||
(b) | any disposition or series of dispositions of an OT Disposal Interest to the Government of Mongolia or any entity beneficially owned or Controlled by the Government of Mongolia; | ||
(c) | any disposition or series of dispositions of an OT Disposal Interest to one or more third parties mandated by the Government of Mongolia; or | ||
(d) | an Ivanhoe Control Transaction. |
(a) | on the date hereof, no member of the Rio Tinto Group is a “related party” of Ivanhoe for the purposes of Canadian Securities Laws; | ||
(b) | as a result of the Equity Investment, the members of the Rio Tinto Group may become “related parties” of Ivanhoe for the purposes of Canadian Securities Laws; and | ||
(c) | unless exempt, material transactions entered into between Ivanhoe and its related parties (other than any transaction entered into between Ivanhoe and Rio Tinto or an Affiliate of Rio Tinto pursuant to Section 7.1) are subject to special rules under Canadian Securities Laws, including requirements for independent valuations and prior approval by disinterested shareholders. The parties further acknowledge that the OT Right of First Refusal has been negotiated by the parties at arm’s length and |
- 32 -
that any exercise by Rio Tinto or any of its Affiliates of the OT Right of First Refusal at a time when Rio Tinto and such Affiliate is a related party of Ivanhoe would not be subject to special rules under Canadian Securities Laws, including requirements for independent valuations and/or prior approval by disinterested shareholders by reason of the application of Section 5.1(h)(iii) of Ontario Securities Commission Rule 61-501Insider Bids, Issuer Bids, Business Combination and Related Party Transactions. |
TECHNICAL COMMITTEE
(a) | define the roles and responsibilities of the Manager; | ||
(b) | review the conduct of the OT Project by the Manager; | ||
(c) | receive and discuss reports of the Manager; | ||
(d) | give general directions as to the manner in which the Manager is to carry out the OT Project; |
- 33 -
(e) | consult with the Manager regarding staffing matters in respect of the OT Project; | ||
(f) | assist the Manager in promoting best practices in matters of health, safety, environment and community relations; | ||
(g) | determine the policies, nature and content of Programs and Budgets for the OT Project; | ||
(h) | consider and approve or reject Programs and Budgets in accordance with the provisions of this Agreement and review and modify any approved Programs and Budgets during their currency; | ||
(i) | review and discuss potential mine optimisation opportunities in respect of the OT Project; and | ||
(j) | have any other functions as are provided in this Agreement. |
(a) | at any time during the period commencing on the First Closing Date and ending on the earlier of, |
(i) | the Second Closing Date, or | ||
(ii) | the third (3rd) anniversary of the First Closing Date, |
Rio Tinto and its Affiliates beneficially own (disregarding any unissued Ivanhoe Shares underlying any unexercised Series A Warrants or Series B Warrants), in the aggregate, a number of Ivanhoe Shares that is less than the First Tranche Private Placement Shares; or | |||
(b) | at any time after the earlier of, |
(i) | the Second Closing Date, or | ||
(ii) | the third (3rd) anniversary of the First Closing Date, |
- 34 -
- 35 -
(a) | the acquisition, or the adoption of any Program and Budget that contemplates the acquisition, of any assets or property or group of related assets and/or properties (or of a financial lease or other similar commitment) at a total cost (or value if leased) of more than one hundred million dollars ($100,000,000); | ||
(b) | the entry into or the amendment of any contract or legally binding commitment or series of related contracts or commitments (whether at one time or over a period of time) under which Ivanhoe is required to or otherwise may incur expenditures of more than one hundred million dollars ($100,000,000) over the term of the contract(s) or commitment(s); | ||
(c) | any material amendment to the long term mine plan in respect of the OT Project adopted by Ivanhoe prior to the date of this Agreement or the adoption of any new long term mine plan; or | ||
(d) | the entry into any contract or legally binding commitment or series of related contracts or commitments (whether at one time or over a period of time) involving the direct or indirect acquisition of any interest of any nature whatsoever in any land or mineralization within the geographical area comprising the OT Project for aggregate cash consideration exceeding ten million dollars ($10,000,000); |
- 36 -
- 37 -
(a) | Pre-Feasibility Study Operations; | ||
(b) | Feasibility Study Operations; | ||
(c) | Development Operations; | ||
(d) | Mining Operations; | ||
(e) | Expansion or Modification Operations; | ||
(f) | Project Financing Operations; | ||
(g) | any suspension or termination of Operations unless, in the reasonable opinion of the Manager, such suspension or termination is required, in case of emergency, to protect life or property, to protect Ivanhoe’s interest in the OT Project or to comply with Applicable Law; and |
- 38 -
(h) | Operations involving any Special Approval Matters. |
(a) | notice that such party approves any or all of the components of the proposed Program and Budget; | ||
(b) | modifications proposed by such party to the components of the proposed Program and Budget; or | ||
(c) | notice that such party rejects any or all of the components of the proposed Program and Budget. |
- 39 -
(a) | monthly progress reports that include statements of expenditures and comparisons of such expenditures to the adopted Budget; | ||
(b) | quarterly summaries of geological and other technical data acquired; | ||
(c) | copies of reports concerning Operations; | ||
(d) | a detailed final report within ninety (90) days after completion of each Program and Budget, which shall include comparisons between actual and budgeted expenditures and comparisons between the objectives and results of Programs; | ||
(e) | quarterly technical, exploration, community relations and health, safety and environmental reports in respect of the OT Project; | ||
(f) | copies of any reports submitted to any Governmental Authority and quarterly summaries of all communications with Governmental Authorities (other than reports submitted to, or communications, with Governmental Authorities pursuant to Securities Laws); and | ||
(g) | such other reports as any member of the Technical Committee may reasonably request. |
(a) | a delegation by the Ivanhoe board of directors to the Technical Committee of any of the powers of the Ivanhoe board of directors that is contrary to Applicable Law; or |
- 40 -
(b) | other than with respect to Operations, a limitation on the authority of the Ivanhoe board of directors under Applicable Law to manage the business and affairs of Ivanhoe, |
TECHNICAL ASSISTANCE
(a) | reasonable access to the Rio Tinto Group’s engineering, mine planning and design, metallurgical and process design and environmental staff; | ||
(b) | reasonable access to the Rio Tinto Group’s technology, research and technical facilities relating to engineering, mine planning and design, metallurgical and process design and environmental issues; | ||
(c) | based on any recommendations of the Technical Committee, the secondment to the OT Project of one or more Rio Tinto Group employees to assist in the development and operation of the OT Project; and | ||
(d) | such other reasonable access to the experience, ability and expertise of the Rio Tinto Group in the development and operation of major mining projects as the parties may agree from time to time. |
- 41 -
OT INVESTMENT CONTRACT
- 42 -
DIVESTITURE OF NON-CORE ASSETS
- 43 -
REPRESENTATIONS, WARRANTIES,
COVENANTS AND ACKNOWLEDGEMENTS
(a) | it is a corporation duly incorporated, organized and validly existing and current with respect to all filings required under the laws of its jurisdiction of incorporation, it has the corporate power and authority, and is duly licensed or qualified, to carry on its business and is in good standing in its jurisdiction of incorporation and those jurisdictions where necessary in order to carry out the purposes of this Agreement and no proceedings have been taken or authorized by it or, to the best of its knowledge, by any other person, with respect to the bankruptcy, insolvency, liquidation, dissolution or winding-up of such party; | ||
(b) | its execution and delivery of this Agreement, including all matters contemplated hereby, has been authorized by all necessary corporate action and the party has the corporate power and authority to enter into and perform its obligations under this Agreement; | ||
(c) | none of the execution and delivery of this Agreement, the implementation of the transactions contemplated by this Agreement or the fulfillment of, or compliance with, the terms and provisions hereof by the party do or will, with the giving of notice or the lapse of time or otherwise, |
(i) | result in the breach of, or violate any term or provision of, the party’s or any of its Affiliates’ Constating Documents, | ||
(ii) | conflict with, result in the breach of, constitute a default under, or accelerate or permit the acceleration of the performance required by, any material agreement to which the party or any of its Affiliates is a party or by which it or any of its Affiliates is bound or to which any of its or any of its Affiliates’ material assets are subject or any Applicable Law to which the party or any of its Affiliates is subject, or | ||
(iii) | result in the creation or crystallisation of any Encumbrance upon the party’s interest in this Agreement; |
(d) | except as otherwise specifically contemplated by this Agreement, no exemption, consent, approval, order or authorization of, or registration or filing with any court, Governmental Authority or any third party is required by, or with respect to, the party or any of its Affiliates in connection with the execution, delivery and performance of this Agreement by the party or the consummation by the party of the transactions contemplated by this Agreement; |
- 44 -
(e) | there is not, to the best of the party’s knowledge, any order or decree of a court of competent jurisdiction or any Governmental Authority restraining, interfering with or enjoining such party’s ability to perform its obligations under, or to complete any of the transactions contemplated by, this Agreement; and | ||
(f) | this Agreement has been duly executed and delivered by it and is a valid and binding obligation of the party enforceable against it in accordance with its terms subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity. |
(a) | Ivanhoe and each of the Material Subsidiaries is a corporation duly incorporated, organized and validly existing and current with respect to all filings required under the laws of its jurisdiction of incorporation, is duly qualified to carry on its business and is in good standing in its jurisdiction of incorporation and in each jurisdiction in which the conduct of its business or the ownership, leasing or operation of its property and assets requires such qualification and no proceedings have been taken or authorized by Ivanhoe or any of the Material Subsidiaries or, to the best of Ivanhoe’s knowledge, by any other person, with respect to the bankruptcy, insolvency, liquidation, dissolution or winding-up of any Material Subsidiary of Ivanhoe; | ||
(b) | Ivanhoe and each of the Material Subsidiaries has all requisite corporate power and authority to carry on its business as now conducted and as currently proposed to be conducted, to own, lease and operate its property and assets; | ||
(c) | Ivanhoe and each of its Subsidiaries has conducted and is conducting its business in compliance in all material respects with all Applicable Laws of each jurisdiction in which its business is carried on, including with respect to the Material Subsidiaries, the Applicable Laws of Mongolia, and Ivanhoe and each Material Subsidiary holds all necessary licences, permits, approvals, consents, certificates, registrations and authorizations, whether governmental, regulatory or otherwise, to enable its business to be carried on as now conducted and its property and assets to be owned, leased and operated, and the same are validly existing and in good standing and none of the same contain or is subject to any term, provision, condition or limitation which has or may have a material adverse effect on the operation of Ivanhoe or any of the Material Subsidiaries’ businesses or which may adversely change or terminate such licence, permit, approval, consent, certification, registration or authorization by virtue of the completion of the transactions contemplated hereby; | ||
(d) | except as disclosed in the Ivanhoe Disclosure Letter, (i) Ivanhoe’s direct or indirect ownership interest in each of the Material Subsidiaries is held free and clear of all mortgages, liens, charges, pledges, security interests, Encumbrances, claims or demands whatsoever, (ii) no person, firm, or company has any agreement, or option |
- 45 -
or right or privilege (whether pre-emptive or contractual) capable of becoming an agreement for the purchase of all or any part of the securities representing such ownership interest, (iii) all such securities have been validly issued and are outstanding as fully paid and non-assessable, (iv) each Material Subsidiary is directly or indirectly beneficially wholly-owned by Ivanhoe, and (v) except for the securities of the Subsidiaries of Ivanhoe, neither Ivanhoe nor its Subsidiaries own any securities or ownership interest in any other person; |
(e) | the authorized capital of Ivanhoe consists of an unlimited number of Ivanhoe Shares and an unlimited number of preferred shares without par value, of which that number of Ivanhoe Shares and preferred shares disclosed in the Ivanhoe Disclosure Letter are issued and outstanding as fully paid and non-assessable shares; | ||
(f) | based solely on publicly available filings under Securities Laws, Robert M. Friedland is the beneficial owner, directly or indirectly, of the number issued and outstanding Ivanhoe Shares disclosed in the Ivanhoe Disclosure Letter; | ||
(g) | except as disclosed in the Ivanhoe Disclosure Letter, no person, firm or corporation has any agreement, option, right or privilege, whether pre-emptive, contractual or otherwise, capable of becoming an agreement for the purchase, acquisition, subscription for or issuance of any of the unissued shares of Ivanhoe or any of its Material Subsidiaries, or other securities convertible, exchangeable or exercisable for shares of Ivanhoe or any of the Material Subsidiaries; | ||
(h) | the Ivanhoe Continuous Disclosure Documents provide, full, true and plain disclosure of all material facts relating to Ivanhoe and do not contain, any misrepresentation or any untrue, false or misleading statement of a material fact or omit to state any material fact required to be stated therein or necessary to make any statement therein, in the light of the circumstances in which it is made, not false or misleading; | ||
(i) | Ivanhoe is, and will on the First Closing Date and the Second Closing Date be, a “reporting issuer”, not in default of its obligations under Canadian Securities Laws, and no material change relating to Ivanhoe (except in respect of the transactions contemplated by this Agreement) has occurred with respect to which the requisite material change report has not been filed under Canadian Securities Laws and no such disclosure has been made on a confidential basis; | ||
(j) | there has not been any “reportable event” (within the meaning of National Instrument 51-102Continuous Disclosure Obligationsof the Canadian securities regulatory authorities, as amended) with the present or former auditors of Ivanhoe; | ||
(k) | the auditors of Ivanhoe who audited the financial statements for the year ended December 31, 2005 and who provided their audit report thereon are independent public accountants in accordance with the Rules of Professional Conduct of the Institute of Chartered Accountants of British Columbia; |
- 46 -
(l) | the currently issued and outstanding Ivanhoe Shares are listed and posted for trading on the TSX, the NYSE and NASDAQ, and Ivanhoe is in compliance with all rules and policies of such exchanges; | ||
(m) | as of the Second Closing Date, the then issued and outstanding Ivanhoe Shares will be listed and posted for trading on at least one of the TSX, the NYSE and NASDAQ, and Ivanhoe will be in compliance with all rules and policies of each such exchange upon which the issued and outstanding Ivanhoe Shares are then listed; | ||
(n) | other than as disclosed in the Ivanhoe Continuous Disclosure Documents, since December 31, 2005, |
(iv) | there has been no material change (actual, anticipated, proposed or prospective, whether financial or otherwise) in the business, affairs, operations, assets, liabilities (contingent or otherwise) prospects, financial position, capital or control of Ivanhoe or its Subsidiaries, taken as a whole; | ||
(v) | Ivanhoe and its Subsidiaries have carried on their respective businesses in the ordinary course and there has been no transaction entered into by Ivanhoe or its Subsidiaries which is material to Ivanhoe and its Subsidiaries, taken as a whole, other than those in the ordinary course of business; and | ||
(vi) | there has been no material change in the capital or long term debt of Ivanhoe or its Subsidiaries, taken as a whole; |
(o) | other than as disclosed in the Ivanhoe Disclosure Letter: |
(i) | Ivanhoe and its Subsidiaries are not liable for the debts, liabilities or other obligations of any third party whether by way of guarantee or indemnity or other contingent or indirect obligation; | ||
(ii) | all indebtedness of Ivanhoe and its Subsidiaries is being paid in the ordinary course of business; and | ||
(iii) | neither Ivanhoe nor any of its Subsidiaries is a party to any agreement restricting Ivanhoe or any such Subsidiary from engaging in any line of business which Ivanhoe or any of its Subsidiaries currently engages or proposes to engage in or competing with any other person in any business in which Ivanhoe or any of its Subsidiaries currently engages or proposes to engage in; |
(p) | Ivanhoe has not, since December 31, 2005, directly or indirectly declared or paid any dividend or declared or made any other distribution on any of its securities of any class, or directly or indirectly, redeemed, purchased or otherwise acquired any of its securities, or agreed to do any of the foregoing; | ||
(q) | other than as disclosed in the Ivanhoe Continuous Disclosure Documents, Ivanhoe has not entered into nor has any present intention to enter into any agreement to |
- 47 -
acquire any securities in any other corporation or entity or to acquire or lease any other business operations which are material to the business and operations of Ivanhoe and its Subsidiaries, taken as a whole; |
(r) | there is no action, suit, proceeding or investigation in respect of Ivanhoe and the Subsidiaries, taken as a whole, pending or, to the knowledge of Ivanhoe or its directors and officers, threatened against or affecting Ivanhoe and its Subsidiaries, taken as a whole, at law or in equity or before or by any Governmental Authority which could in any way materially and adversely affect Ivanhoe or its Subsidiaries, taken as a whole, or the condition (financial or otherwise) of Ivanhoe or its Subsidiaries, taken as a whole; | ||
(s) | no order, ruling or determination by any Governmental Authority or stock exchange having the effect of suspending the sale or ceasing the trading of any securities of Ivanhoe has been issued or made and is continuing in effect and no proceedings for that purpose have been instituted or are pending or, to Ivanhoe’s knowledge after due inquiry, contemplated or threatened by any such authority or under any Securities Laws; | ||
(t) | other than as disclosed in the Ivanhoe Continuous Disclosure Documents, neither Ivanhoe nor any of its Subsidiaries is in violation of its Constating Documents or resolutions of its securityholders, directors, or any committee of its directors, or in default in the performance or observance of any material terms, obligation, agreement, covenant or condition contained in any contract, indenture, trust, deed, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it or its property may be bound and there exists no state of facts which, after notice or lapse of time or both, or otherwise, would constitute a default under or breach of a material obligation, agreement, covenant or condition of any of such documents and all such contracts, indentures, trusts, deeds, mortgages, loan agreements, notes, leases and other agreements are in good standing; | ||
(u) | all financial statements forming part of the Ivanhoe Continuous Disclosure Documents are complete and comply with Securities Laws in all material respects, and fairly present the consolidated financial position of Ivanhoe as of the dates and for the periods indicated, and have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis throughout such periods; | ||
(v) | Ivanhoe is subject to the reporting requirements under Section 12 of the U.S. Exchange Act, has filed all reports required to be filed pursuant to Section 13 of the U.S. Exchange Act (as hereinafter defined), and is not in default of its obligations under the U.S. Exchange Act; | ||
(w) | the First Tranche Private Placement Shares to be issued to Rio Tinto on the First Closing Date have been duly reserved and approved by all requisite corporate action for future issuance and will, when issued, be duly and validly issued, fully paid and non-assessable and free of all Encumbrances; |
- 48 -
(x) | the Series A Warrants and Series B Warrants to be issued to Rio Tinto on the First Closing Date have been approved by all requisite corporate action and will, upon issuance, have been duly created and will, when issued, be duly and validly issued Ivanhoe Convertible Securities free of all Encumbrances; | ||
(y) | the Basic Second Tranche Private Placement Shares to be issued to Rio Tinto on the Second Closing Date have been duly reserved and approved by all requisite corporate action for future issuance and will, when issued, be duly and validly issued, fully paid and non-assessable and free of all Encumbrances; | ||
(z) | the Top Up Option has been approved by all requisite corporate action and is a duly and validly issued Ivanhoe Convertible Security free of all Encumbrances; | ||
(aa) | the Top Up Private Placement Shares to be issued upon the due exercise of the Top Up Option have been duly reserved and approved by all requisite corporate action for future issuance and will, when issued following the due exercise by Rio Tinto of the Top Up Option, be duly and validly issued, fully paid and non-assessable and free of all Encumbrances; | ||
(bb) | the Ivanhoe Shares to be issued upon the due exercise of any Series A Warrants and the Series B Warrants have been duly reserved and approved by all requisite corporate action for future issuance and will, when issued following the due exercise by Rio Tinto of the Series A Warrants and the Series B Warrants, be duly and validly issued, fully paid and non-assessable and free of all Encumbrances; | ||
(cc) | the Anti-Dilution Ivanhoe Shares to be issued upon the due exercise by Rio Tinto of its rights under Part 5 of this Agreement have been duly reserved and approved by all requisite corporate action for future issuance and will, when issued following the due exercise, from time to time, by Rio Tinto of its rights under Part 5 of this Agreement, be duly and validly issued, fully paid and non-assessable and will be free of all Encumbrances; | ||
(dd) | the Anti-Dilution Warrants to be issued upon the due exercise by Rio Tinto of its rights under Part 5 of this Agreement have been approved by all requisite corporate action, will, upon issuance, have been duly created and will, when issued, be duly and validly issued Ivanhoe Convertible Securities free of all Encumbrances; | ||
(ee) | the Ivanhoe Shares to be issued upon the due exercise of any Anti-Dilution Warrants have been duly reserved and approved by all requisite corporate action for future issuance and will, when issued following the due exercise by Rio Tinto of any such Anti-Dilution Warrants, be duly and validly issued, fully paid and non-assessable and will be free of all Encumbrances; | ||
(ff) | the First Tranche Private Placement Shares, the Second Tranche Private Placement Shares and any additional Ivanhoe Shares issued or to be issued to Rio Tinto upon the due exercise by Rio Tinto of the Series A Warrants and the Series B Warrants or of its rights under Part 5 will have been approved for listing or quotation on the TSX, the NYSE and NASDAQ; |
- 49 -
(gg) | to the best of its knowledge and belief, neither Ivanhoe nor any of its Subsidiaries or any person acting on behalf of Ivanhoe or any of its Subsidiaries, has made any Prohibited Payment with respect to the conduct of business of Ivanhoe or any of its Subsidiaries or any transaction contemplated by this Agreement or with respect to the OT Project, including in connection with obtaining licenses, permits, concessions or other authorizations for the OT Project; | ||
(hh) | with respect to the OT Project, except as disclosed in the Ivanhoe Disclosure Letter or as otherwise permitted by this Agreement (i) no person, other than the OT Subsidiary, owns, or, other than the Government of Mongolia in accordance with the Applicable Laws of Mongolia, has the right to acquire, any interest in the OT Project; (ii) the OT Subsidiary is a wholly owned subsidiary of Ivanhoe and no person, other than the Government of Mongolia under the Applicable Laws of Mongolia, has the right to acquire any interest in any securities of the OT Subsidiary; (iii) the OT Subsidiary has all necessary licenses, permits, approvals, consents, certificates, registrations and authorizations necessary to carry on the Operations as currently conducted including all land use certificates necessary to access all of those areas to which the Existing Licenses pertain; (iv) neither Ivanhoe nor any of the Material Subsidiaries has received any notice of default of any of its obligations under any licence, permit, approval, consent, certificate, registration or authorization related the OT Project the termination of which would have a material adverse effect on Ivanhoe or any of the Material Subsidiaries; and (v) nothing in this Agreement conflicts with or could reasonably be expected to cause Ivanhoe or any of the Material Subsidiaries to breach any of its obligations under any licence, permit, approval, consent, certificate, registration or authorization related to the OT Project; | ||
(ii) | to the best of Ivanhoe’s knowledge: (i) the Existing Licenses are validly held by the OT Subsidiary, (ii) there is no reason why any part of the Existing Licenses will be surrendered, released or reduced in any way, (iii) the Existing Licenses have been properly granted and issued by the appropriate Governmental Authority; (iv) all terms of, and all requirements for holding, the Existing Licenses have been met including the timely payment of all annual license fees and compliance with all environmental bonding obligations; (v) all filings required to be made with the appropriate Governmental Authority in respect of the Existing Licenses have been made; (vi) all work required in order for the OT Subsidiary to hold the Existing Licenses has been performed and all fees payable to the appropriate Governmental Authority in respect thereof have been paid to date; (vii) the Existing Licenses are clear of defects in title and are not the subject of any unsatisfied penalties or unresolved disputes; (viii) the Existing Licenses are free and clear of all Encumbrances and are not subject to the claims of any third party other than the Government of Mongolia in accordance with the Applicable Laws of Mongolia; (ix) there are no mineral licenses or tenures conflicting with the Existing Licenses; and (x) there is no proposal to list the Existing Licenses as part of a Special Purpose Territory; | ||
(jj) | there are no pending or threatened actions, suits, claims or proceedings, and there have been no previous transactions involving Ivanhoe or any of its Subsidiaries |
- 50 -
affecting the geographical areas that are the subject of the Existing Licenses which have not been for fair consideration; | |||
(kk) | except as disclosed in the Ivanhoe Disclosure Letter, |
(i) | to the best of Ivanhoe’s knowledge, the conditions existing on or with respect to the geographical area that is subject to the Existing Licenses and the activities of Ivanhoe and the Material Subsidiaries thereon are not in violation of any laws (including without limitation any environmental laws), nor causing or permitting any damage or impairment to the health, safety, or enjoyment of any person at or on such property or in the general vicinity of such property; | ||
(ii) | to the best of Ivanhoe’s knowledge, there have been no past violations by it of any environmental laws or other laws affecting or pertaining to the geographical area that is subject to the Existing Licenses, nor any past creation of damage or threatened damage to the air, soil, surface waters, groundwater, flora, fauna, or other natural resources on, about or in the general vicinity of such property; and | ||
(iii) | none of Ivanhoe or any of the Material Subsidiaries has received inquiry from or notice of a pending investigation from any Governmental Authority or of any administrative or judicial proceeding concerning the violation of any laws; |
(ll) | Ivanhoe acknowledges that Rio Tinto will rely on the representations and warranties made herein by Ivanhoe in completing the transactions contemplated by this Agreement; | ||
(mm) | save and except as otherwise provided in this Section 12.2, to the best of Ivanhoe’s knowledge, having made due inquiry internally and of its Subsidiaries, all written historic or current factual information in relation to Ivanhoe, its Subsidiaries or the OT Project given by Ivanhoe or any of its Representatives to Rio Tinto or any of its Representatives in the course of or in connection with the due diligence conducted by Rio Tinto and its Representatives on and before the date hereof, is complete and accurate in all material respects and not misleading in any material respect; | ||
(nn) | Ivanhoe Mines Aruba Holdings LLC was formed under the Aruba “exempt company” regime and has made an irrevocable election to be treated as a flow through entity for Aruban taxation purposes; and | ||
(oo) | Ivanhoe Mines Delaware LLC has not elected to be treated as a corporation for US taxation. |
- 51 -
(a) | Rio Tinto is making the Equity Investment as principal for its own account, not for the benefit of any other person outside the Rio Tinto Group, for investment only and not with a view to the resale or distribution of all or any of the Equity Investment Securities or any underlying Ivanhoe Shares nor for the purposes of acquiring Control of Ivanhoe either by itself or in concert with any other person; | ||
(b) | Rio Tinto is resident in, or otherwise subject to, the Applicable Laws of England and Wales and is an “accredited investor”, as defined under National Instrument 45-106Prospectus and Registration Exemptionsof the Canadian securities regulatory authorities; | ||
(c) | Rio Tinto is not (and is not purchasing the Equity Investment Securities for the account or benefit of) a U.S. Person and did not execute or deliver this Agreement in the United States; | ||
(d) | Rio Tinto has not received or been provided with a prospectus, offering memorandum or similar document and the decision to enter into this Agreement and make the Equity Investment has not been based on representations as to fact or otherwise made by or on behalf of Ivanhoe except as expressly set forth herein or by any officer, director, employee or agent of Ivanhoe; | ||
(e) | no person has made to Rio Tinto any written or oral representation: |
(i) | that any person will resell or repurchase any of the Equity Investment Securities or any underlying Ivanhoe Shares to be acquired by Rio Tinto pursuant to the Equity Investment; | ||
(ii) | that any person will refund the purchase price of the Equity Investment; or | ||
(iii) | as to the future price or value of any of the Equity Investment Securities or any underlying Ivanhoe Shares; |
(f) | Rio Tinto is knowledgeable of, or has been independently advised as to, the Applicable Laws of Rio Tinto’s jurisdiction of residence which would apply to the transactions contemplated by this Agreement, if there are any, and the issuance of the Equity Investment Securities to Rio Tinto contemplated hereunder complies with all such Applicable Laws and save as provided in this Agreement will not cause Ivanhoe to become subject to or comply with any disclosure, prospectus or reporting requirements under any such Applicable Laws nor to make any filings or disclosures or seek any approvals of any kind whatsoever from any regulatory authority of any kind whatsoever in Rio Tinto’s jurisdiction of residence; and | ||
(g) | Rio Tinto acknowledges that Ivanhoe will rely on the representations and warranties made herein by Rio Tinto in completing the transactions contemplated by this Agreement. |
- 52 -
(a) | the indicated conclusion in respect of the relevant matter; or | ||
(b) | facts that would reasonably lead to the indicated conclusion in respect of the relevant matter; |
(a) | the Equity Investment Securities will be issued pursuant to registration and prospectus exemptions under Canadian Securities Laws and will be subject to a hold period of four (4) months (the “Canadian Hold Period”) during which such securities may not be resold in Canada except pursuant to a prospectus or an exemption from the applicable prospectus requirement; | ||
(b) | the Equity Investment Securities have not been and will not, except pursuant to the Registration Rights Agreement, be registered under the U.S. Securities Act or any applicable state securities laws and the sale contemplated hereby is being made in reliance on an exemption from such registration requirements; and | ||
(c) | under Canadian Securities Laws, a person or combination of persons holding more than 20% of the outstanding Ivanhoe Shares is deemed, in the absence of evidence to the contrary, to hold a sufficient number of Ivanhoe Shares to affect materially the control of Ivanhoe and is subject, under Canadian Securities Laws, to special resale restrictions and disclosure requirements. |
(a) | certificates representing the First Tranche Private Placement Shares, the Second Tranche Private Placement Shares, any Anti-Dilution Ivanhoe Shares, the Series A Warrant Certificate, the Series B Warrant Certificate, any warrant certificate representing Anti-Dilution Warrants and, if issued pursuant to the exercise of, prior to the expiration of the Canadian Hold Period with respect to, the Series A Warrants, the Series B Warrants or any Anti-Dilution Warrants, as the case may be, any underlying Ivanhoe Shares: |
- 53 -
(b) | certificates representing all Ivanhoe Shares: |
(c) | the Series A Warrant Certificate and the Series B Warrant Certificate and any certificate representing Anti-Dilution Warrants: |
- 54 -
CONDITIONS PRECEDENT
(a) | the representations and warranties of Ivanhoe contained in Sections 12.1 and 12.2 will be true in all material respects immediately prior to the First Closing Date with the same effect as though made at and as of such time; | ||
(b) | the statements made by Ivanhoe or any of its Subsidiaries in any certificate delivered in support of an opinion required to be delivered hereunder will be true in all material respects immediately prior to the First Closing Date with the same effect as though made at and as of such time; | ||
(c) | each of the acts and undertakings of Ivanhoe to be performed on or before the First Closing Date pursuant to the terms of this Agreement will have been duly performed by it; | ||
(d) | there will have been no material adverse change in the business, assets or financial condition of Ivanhoe (provided that any decline in the market price of any precious or base metal will not be considered a material adverse change); | ||
(e) | the Shareholders’ Agreement will remain in full force and effect; | ||
(f) | Ivanhoe and Rio Tinto will have entered into the Registration Rights Agreement; and | ||
(g) | Ivanhoe will have obtained Exchange Approval for the issuance to Rio Tinto of the Equity Investment Securities, any Ivanhoe Shares to be issued pursuant to the exercise of the Series A Warrants and the Series B Warrants, the Top Up Option and the Top Up Private Placement Shares subject only to (i) the approval of the holders |
- 55 -
of the Ivanhoe Shares of Rio Tinto’s right to exercise the Series A Warrants and the Series B Warrants and (ii) the filing, after the First Closing Date, of documents customary for similar transactions and the payment of applicable listing fees. |
(a) | the representations and warranties of Rio Tinto contained in Sections 12.1 and 12.3 will be true in all material respects immediately prior to the First Closing Date with the same effect as though made at and as of such time; | ||
(b) | each of the acts and undertakings of Rio Tinto to be performed on or before the First Closing Date pursuant to the terms of this Agreement will have been duly performed by it; | ||
(c) | there will have been no material adverse change in the business, assets or financial condition of Rio Tinto (provided that any decline in the market price of any precious or base metal will not be considered a material adverse change); and | ||
(d) | Ivanhoe will have obtained Exchange Approval for the issuance to Rio Tinto of the Equity Investment Securities, any Ivanhoe Shares to be issued pursuant to the exercise of the Series A Warrants and the Series B Warrants, the Top Up Option and the Top Up Private Placement Shares subject only to (i) the approval of the holders of the Ivanhoe Shares of Rio Tinto’s right to exercise the Series A Warrants and the Series B Warrants and (ii)the filing, after the First Closing Date, of documents customary for similar transactions and the payment of applicable listing fees. |
(a) | Ivanhoe, or a Subsidiary of Ivanhoe, will have entered into an Approved OT Investment Contract or Rio Tinto will have given Notice to Ivanhoe pursuant to Section 2.9 of Rio Tinto’s election to complete the Second Tranche Private Placement in the absence of an Approved OT Investment Contract. | ||
(b) | the representations and warranties of Ivanhoe contained in Sections 12.1 and 12.2 will be true in all material respects immediately prior to the First Closing Date with the same effect as though made at and as of such time; | ||
(c) | the statements made by Ivanhoe or any of its Subsidiaries in any certificate delivered in support of an opinion required to be delivered hereunder will be true in all material |
- 56 -
respects immediately prior to the First Closing Date with the same effect as though made at and as of such time; |
(d) | the representations and warranties of Ivanhoe contained in Sections 12.1 and Section 12.2(a),(b),(c),(h),(i),(m),(r),(s),(u),(v),(y),(bb),(cc),(dd),(ee),(gg), (hh), (ii) and (ll) will be true in all material respects immediately prior to the Second Closing Date with the same effect as though made at and as of such time; | ||
(e) | each of the acts and undertakings of Ivanhoe to be performed on or before the Second Closing Date pursuant to the terms of this Agreement will have been duly performed by it; and | ||
(f) | unless previously terminated by mutual written agreement between Ivanhoe and Rio Tinto, the Registration Rights Agreement will remain in full force and effect. |
(a) | the representations and warranties of Rio Tinto contained in Sections 12.1 and 12.3 will be true in all material respects immediately prior to the First Closing Date with the same effect as though made at and as of such time; | ||
(b) | the representations and warranties of Rio Tinto contained in Section 12.1 and Section 12.3 will be true in all material respects immediately prior to the Second Closing Date with the same effect as though made at and as of such time; and | ||
(c) | each of the acts and undertakings of Rio Tinto to be performed on or before the Second Closing Date pursuant to the terms of this Agreement will have been duly performed by it. |
(a) | until the First Closing Date, of any event or state of facts which occurrence or failure would or would be likely to: |
(i) | cause any of the representations or warranties of such party contained herein to be untrue or inaccurate in any material respect on the date hereof or at the First Closing Date; or | ||
(ii) | result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any party hereunder prior to the First Closing Date; and |
- 57 -
(b) | until earlier of the Second Closing Date or the third (3rd) anniversary of the First Closing Date, of any event or state of facts which occurrence or failure would or would be likely to: |
(i) | cause any of the representations or warranties of such party referred to in Section 13.3 or Section 13.4, as the case may be, to be untrue or inaccurate in any material respect on the date hereof or at the Second Closing Date; or | ||
(ii) | result in the failure to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any party hereunder prior to the Second Closing Date. |
AMENDMENT AND TERMINATION
(a) | change the time for, or mode of performance of, any of the obligations of the parties hereto; | ||
(b) | waive any inaccuracies or modify any representation contained herein or any document to be delivered pursuant hereto; or | ||
(c) | waive compliance with or modify any of the covenants herein contained or waive or modify performance of any of the obligations of the parties hereto. |
(a) | a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official for the non-terminating party or for a substantial part of the assets of the non-terminating party is appointed and such appointment is neither made ineffective nor |
- 58 -
discharged within twenty one (21) days after the making thereof, or such appointment is consented to, requested by, or acquiesced in by the affected party; or |
(b) | the non-terminating party commences a voluntary proceeding under any applicable bankruptcy, insolvency or similar law of any jurisdiction (including, without limitation, any laws relating to a reorganization, arrangement or compromise of its debts) now or hereafter in effect, or consents to the entry of an order for relief in an involuntary proceeding under any such law or to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or other similar official of any substantial part of its assets; or makes a general assignment for the benefit of its creditors; or takes corporate or other action in furtherance of any of the foregoing; or | ||
(c) | entry is made against the non-terminating party of a judgment, decree or order for relief affecting a substantial part of its assets by a court of competent jurisdiction in an involuntary proceeding commenced under any applicable bankruptcy, insolvency or other similar law of any jurisdiction now or hereafter in effect. |
(a) | Section 13.1 shall not be fulfilled or performed on or before the First Closing Deadline, Rio Tinto may terminate this Agreement by notice to Ivanhoe whereupon Rio Tinto shall be released from all obligations hereunder, all rights of specific performance by any of the parties hereto shall terminate and, unless Rio Tinto can show that the non-fulfillment or non-performance of the condition or conditions by reason of which Rio Tinto has rescinded this Agreement were reasonably capable of being performed by Ivanhoe, Ivanhoe shall also be released from all obligations hereunder provided that any of the aforesaid conditions, having been inserted herein for the exclusive benefit of Rio Tinto, may be waived in whole or in part by Rio Tinto without prejudice to its rights of rescission in the event of the non-fulfilment or non-performance of any other condition; or | ||
(b) | Section 13.2 shall not be fulfilled or performed on or before the First Closing Deadline, Ivanhoe may terminate this Agreement by notice to Rio Tinto and in such event Ivanhoe shall be released from all obligations hereunder, all rights of specific performance by any of the parties hereto shall terminate and, unless Ivanhoe can show that the non-fulfillment or non-performance of the condition or conditions by reason of which Ivanhoe has rescinded this Agreement were reasonably capable of being performed by Rio Tinto, Rio Tinto shall also be released from all obligations hereunder, provided that any of the aforesaid conditions, having been inserted herein for the exclusive benefit of Ivanhoe, may be waived in whole or in part by Ivanhoe without prejudice to its rights of rescission in the event of the non-fulfilment or non-performance of any other condition. |
- 59 -
IMPLEMENTATION
(a) | a duly issued certificate representing the First Tranche Private Placement Shares, registered in the name of Rio Tinto; | ||
(b) | a duly issued Series A Warrant Certificate representing the Series A Warrants to be issued pursuant to the First Tranche Private Placement, registered in the name of Rio Tinto; | ||
(c) | a duly issued Series B Warrant Certificate representing the Series B Warrants to be issued pursuant to the First Tranche Private Placement, registered in the name of Rio Tinto; | ||
(d) | a duly executed counterpart copy of the Registration Rights Agreement; |
- 60 -
(e) | certified copies of the resolutions of the board of directors of Ivanhoe approving this Agreement and the consummation of the transactions contemplated by this Agreement; | ||
(f) | a certificate of a senior officer of Ivanhoe that all of the representations and warranties of Ivanhoe contained in Section 12.1 and 12.2 hereof are true and correct as of the First Closing Date; | ||
(g) | favourable corporate, enforceability, securities, title and other legal opinions, dated the First Closing Date and addressed to Rio Tinto and its counsel, in form and substance satisfactory to Rio Tinto and its counsel, acting reasonably, with respect to such matters contemplated by this Agreement as Rio Tinto and its counsel may reasonably request; and | ||
(h) | written evidence of any and all Exchange Approvals obtained. |
(a) | a wire transfer confirmation in form and substance satisfactory to Ivanhoe, acting reasonably, evidencing the initiation of a wire transfer to Ivanhoe, in accordance with the instructions given by Ivanhoe, of the First Tranche Subscription Price and the Warrant Subscription Price; | ||
(b) | a duly executed counterpart copy of the Registration Rights Agreement; | ||
(c) | certified copies of the resolutions of the board of directors of Rio Tinto approving this Agreement and the consummation of the transactions contemplated by this Agreement; | ||
(d) | a certificate of a senior officer of Rio Tinto that all of the representations and warranties of Rio Tinto contained in Section 12.1 and 12.3 hereof are true and correct as of the First Closing Date; and | ||
(e) | favourable corporate, enforceability and other legal opinions, dated the First Closing Date and addressed to Ivanhoe and its counsel, in form and substance satisfactory to Ivanhoe and its counsel, acting reasonably, with respect to such matters contemplated by this Agreement as Ivanhoe and its counsel may reasonably request. |
(a) | a duly issued certificate representing the Second Tranche Private Placement Shares, registered in the name of Rio Tinto; |
- 61 -
(b) | a certificate of a senior officer of Ivanhoe that those representations and warranties of Ivanhoe referred to in Section 13.3(b) hereof are true and correct as of the First Closing Date and that those representations and warranties of Ivanhoe referred to in Section 13.3(d) hereof are true and correct as of the Second Closing Date; and | ||
(c) | favourable corporate and securities legal opinions, dated the Second Closing Date and addressed to Rio Tinto and its counsel, in form and substance satisfactory to Rio Tinto and its counsel, acting reasonably, with respect to such matters pertaining to the creation and issuance of the Second Tranche Private Placement Shares as Rio Tinto and its counsel may reasonably request. |
(a) | a wire transfer confirmation in form and substance satisfactory to Ivanhoe, acting reasonably, evidencing the initiation of a wire transfer to Ivanhoe, in accordance with the instructions given by Ivanhoe, of the Second Tranche Subscription Price; and | ||
(b) | a certificate of a senior officer of Rio Tinto that those representations and warranties of Rio Tinto referred to in Section 13.4(a) hereof are true and correct as of the First Closing Date and that those representations and warranties of Rio Tinto referred to in Section 13.4(b) hereof are true and correct as of the Second Closing Date. |
ARBITRATION
- 62 -
CONFIDENTIALITY, USE
AND DISCLOSURE OF INFORMATION
- 63 -
(a) | such disclosure is legally required to be made in a judicial, administrative or governmental proceeding pursuant to a valid subpoena or other applicable order in respect of a party or any of its Affiliates; or | ||
(b) | such disclosure is legally required to be made (in the ordinary course of events and not, for example, solely as a consequence of any public offering of debt, shares or other securities) pursuant to Securities Laws, rules and regulations or, the rules or regulations of a stock exchange or similar trading market applicable to the disclosing party or any of its Affiliates. |
- 64 -
GENERAL PROVISIONS
If to Rio Tinto: | Rio Tinto International Holdings Limited | |||
6 St. James’s Square | ||||
London | ||||
SW1Y 4LD | ||||
United Kingdom | ||||
Attention: | Company Secretary | |||
Fax: | 44 20 7930 3249 | |||
With a copy to: | Chief Executive Copper Group | |||
Rio Tinto plc | ||||
6 St. James Square | ||||
London SW1Y 4LD | ||||
Fax: | 44 20 7930 3249 | |||
If to Ivanhoe: | Ivanhoe Mines Ltd. | |||
654 – 999 Canada Place | ||||
Vancouver, B.C. V6C 3E1 | ||||
Attention: | Corporate Secretary | |||
Fax: | 604 682 2060 |
(a) | if delivered by hand, immediately; |
- 65 -
(b) | in the case of delivery by mail or courier, two Business Days after the date of posting (if posted or couriered to an address in the same country) or five Business Days after the date of posting (if sent by courier to an address in another country); and | ||
(c) | in the case of fax, on receipt by the sender of a transmission control report from the dispatching machine showing the relevant number of pages and the correct destination fax machine number and indicating that the transmission has been made without error. |
- 66 -
RIO TINTO INTERNATIONAL HOLDINGS LIMITED | ||||||
By | ||||||
Title: | ||||||
IVANHOE MINES LTD. | ||||||
By | ||||||
Title: |
(Incorporated under the laws of the Yukon Territory)
CERTIFICATE | 46,026,522 | |||||
NUMBER A -1 | SERIES A | |||||
WARRANTS | ||||||
- 2 -
(a) | “Applicable Law” has the meaning assigned to it in the Private Placement Agreement; | ||
(b) | “Business Day” has the meaning assigned to it in the Private Placement Agreement; | ||
(c) | “Common Shares” means the common shares without par value in the capital of the Company as such shares are constituted on the date of the Private Placement Agreement, as the same may be reorganized, reclassified or redesignated pursuant to any of the events set out in Part 10 hereof; | ||
(d) | “Company” means Ivanhoe Mines Ltd., a corporation continued under the laws of the Yukon Territory, and its successors; | ||
(e) | “Company Shareholder Approval” means approval of the Holder’s right to exercise the Series A Warrants to acquire the maximum number of Common Shares that may be acquired by the Holder from time to time pursuant to this Series A Warrant certificate given by a majority of the votes cast by holders of Common Shares present in person or by proxy at a special meeting of holders of Common Shares convened pursuant to the terms of the Private Placement Agreement; | ||
(f) | “Company Shareholder Approval Date” means the date upon which Company Shareholder Approval is obtained by the Company; | ||
(g) | “Current Market Price” of the Common Shares at any date, means the weighted average of the sale prices per Common Share at which the Common Shares have traded on the Exchange, or, if the Common Shares in respect of which a determination of current market price is being made are not listed thereon, on such stock exchange or securities market on which such shares are listed or quoted as may be selected for such purpose by the Company’s board of directors, or, if the Common Shares are not listed on any stock exchange, then on the over-the-counter market, for any twenty (20) consecutive trading days selected by the Company commencing not more than forty five (45) trading days and ending not fewer than five (5) trading days before such date; provided, however, if such Common Shares are not traded during |
- 3 -
such forty (40) trading day period for at least twenty (20) consecutive trading days, the simple average of the following prices established for each of twenty (20) consecutive trading days selected by the Company commencing not more than forty five (45) trading days before such date: |
(i) | the average of the bid and ask prices for each day on which there was no trading, and | ||
(ii) | the closing price of the Common Shares for each day on which there was trading, |
(h) | “Exchange” means the Toronto Stock Exchange; | ||
(i) | “Exercise Clearance Date” means the later of: |
(i) | the Company Shareholder Approval Date; and | ||
(ii) | the Regulatory Approval Date; |
(j) | “Exercise Period” means the period of time commencing on the Exercise Clearance Date and ending on the the three hundred and sixty-fifth (365th) day after the Warrant Determination Date; | ||
(k) | “Exercise Price” means an amount per Common Share in lawful money of the United States of America equal to, |
(i) | eight dollars and thirty eight cents ($8.38) during the period of time commencing on the Company Shareholder Approval Date and ending on the one hundred and eightieth (180th) day after the Warrant Determination Date; and | ||
(ii) | eight dollars and fifty four cents ($8.54) during the period commencing on the one hundred and eighty first (181st) day after the Warrant Determination Date and ending on the three hundred and sixty-fifth (365th) day after the Warrant Determination Date; |
- 4 -
(l) | “Expiry Time” means (i) immediately upon termination of the Ivanhoe Meeting, if the Company Shareholder Approval is not obtained at the Ivanhoe Meeting, or (ii) 5:00 o’clock in the afternoon, Vancouver time, on the last day of the Exercise Period, if the Company Shareholder Approval is obtained at the Ivanhoe Meeting; | ||
(m) | “Holder” means Rio Tinto International Holdings Limited, a corporation incorporated under the laws of England and Wales and its successors; | ||
(n) | “Ivanhoe Meeting” has the meaning assigned to it in the Private Placement Agreement; | ||
(o) | “Notice” has the meaning assigned to it in the Private Placement Agreement; | ||
(p) | “person” means an individual, corporation, partnership, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator, or other legal representative, or any group or combination thereof; | ||
(q) | “Private Placement Agreement” means the agreement made as of the 18th day of October 2006 between the Company and the Holder providing for, among other things, the issuance of the Series A Warrants; | ||
(r) | “Regulatory Approval” means approval under theInvestment Canada Act(Canada) of the Holder’s right to exercise the Series A Warrants, to the extent such approval is required in the reasonable opinion of the Holder; | ||
(s) | “Regulatory Approval Date” means the date upon which the Holder delivers to the Company written evidence of Regulatory Approval; | ||
(t) | “Rio Tinto Group” has the meaning assigned to it in the Private Placement Agreement; | ||
(u) | “Series A Warrants” means the share purchase warrants of the Company evidenced by, and governed by the terms of, this Series A Warrant certificate; | ||
(v) | “Subscription Form” means the form of subscription annexed hereto as Appendix “1”; and | ||
(w) | “Subsidiary” has the meaning assigned to it in the Private Placement Agreement; | ||
(x) | “Warrant Determination Date” has the meaning assigned to it in the Private Placement Agreement; |
- 5 -
(y) | “this Series A Warrant certificate”, “Series A Warrant”, “herein”, “hereby”, “hereof”, “hereto”, “hereunder” and similar expressions mean or refer to this Series A Warrant certificate and any deed or instrument supplemental or ancillary thereto and any appendices or schedules hereto or thereto and not to any particular article, section, subsection, clause, subclause or other portion hereof. |
(a) | this Series A Warrant certificate, with the Subscription Form duly completed and executed by the Holder or its legal representative or attorney, duly appointed by an instrument in writing in form and manner satisfactory to the Company; and | ||
(b) | a bank draft or certified cheque payable, or wire transfer confirmation in writing evidencing payment, to the order of the Company, in lawful money of the United States of America an amount equal to the product of the then prevailing Exercise Price multiplied by the number of Common Shares stipulated in the Subscription Form as being subscribed for pursuant to the exercise of the Series A Warrants evidenced by this Series A Warrant certificate. |
- 6 -
(a) | so long as any Series A Warrants evidenced hereby remain outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Common Shares to satisfy the maximum right of purchase provided for herein; | ||
(b) | all Common Shares which shall be issued upon the exercise of any Series A Warrants hereunder shall, upon payment therefor of the then prevailing Exercise Price, be issued as fully paid and non-assessable Common Shares; and | ||
(c) | it will at its expense expediously use its best efforts to obtain the listing of such Common Shares (subject to issue and notice of issue) on each stock exchange, securities market or over-the-counter market on which the Common Shares may be listed from time to time. |
- 7 -
(a) | issues Common Shares or securities exchangeable for or convertible into Common Shares to all or substantially all the holders of the Common Shares as a stock dividend; or | ||
(b) | makes a distribution on its outstanding Common Shares payable in Common Shares or securities exchangeable for or convertible into Common Shares; or | ||
(c) | subdivides its outstanding Common Shares into a greater number of shares; or | ||
(d) | consolidates its outstanding Common Shares into a lesser number of shares; |
- 8 -
(a) | the right to subscribe for or purchase Common Shares, or the right to exchange securities for or convert securities into Common Shares, expires not more than forty five (45) days after the date of such issue (the period from the record date to the date of expiry being referred to as the “Rights Period”); and | ||
(b) | the cost per Common Share during the Rights Period (inclusive of any cost or acquisition of securities exchangeable for or convertible into Common Shares in addition to any direct cost of Common Shares) (such cost being referred to as the “Per Share Cost”) is less than 95% of the Current Market Price of the Common Shares on the record date; |
(a) | the numerator of which is the aggregate of: |
(i) | the number of Common Shares outstanding as of the record date for the Rights Offering; and |
(ii) | a number determined by dividing the product of the Per Share Cost and: |
A. | where the event giving rise to the application of this Section 10.5 was the issue of rights, options or warrants to the holders of Common Shares under which such holders are entitled to subscribe for or purchase additional Common Shares, the number of Common Shares so subscribed for or purchased during the Rights Period, or | ||
B. | where the event giving rise to the application of this Section 10.5 was the issue of rights, options or warrants to the holders of Common Shares under which such holders are entitled to subscribe for or purchase securities exchangeable for or convertible into Common Shares, the number of Common Shares for which those securities so subscribed for or purchased during the Rights Period could have been exchanged or into which they could have been converted, |
by the Current Market Price of the Common Shares as of the record date for the Rights Offering; and |
(b) | the denominator of which is |
- 9 -
(i) | in the case described in subsection 10.5(a)(ii)A., the number of Common Shares outstanding, or |
(ii) | in the case described in subsection 10.5(a)(ii)B., the number of Common Shares that would be outstanding if all the Common Shares described in subsection 10.5(a)(ii)B. had been issued, |
(a) | the Exercise Price in effect immediately prior to the end of such Rights Offering; and | ||
(b) | the Exercise Price as adjusted hereunder for such Rights Offering; |
- 10 -
(a) | shares of the Company of any class other than Common Shares, | ||
(b) | rights, options or warrants to acquire: |
(i) | Common Shares or securities exchangeable for or convertible into Common Shares (other than rights, options or warrants of the nature described in Section 10.4), or | ||
(ii) | shares other than Common Shares or securities exchangeable for or convertible into shares other than Common Shares or property or other assets of the Company, |
(c) | evidences of indebtedness, or | ||
(d) | any property or other assets |
(a) | the numerator of which is: |
(i) | the product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date; less | ||
(ii) | the aggregate fair market value (as determined by the board of directors of the Company, acting reasonably and in good faith) to the holders of the Common Shares of such securities or property or other assets so issued or distributed in the Special Distribution; and |
(b) | the denominator of which is the number of Common Shares outstanding on such record date multiplied by the Current Market Price of the Common Shares on such record date. |
- 11 -
- 12 -
- 13 -
(a) | the successor corporation will have assumed all the covenants and obligations of the Company under this Series A Warrant certificate; and | ||
(b) | this Series A Warrant certificate will be a valid and binding obligation of the successor corporation entitling the Holder, as against the successor corporation, to all the rights of the Holder under this Series A Warrant certificate. |
- 14 -
- 15 -
(a) | the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed; and | ||
(b) | the invalidity, illegality or unenforceability of any provision or part thereof contained in this Series A Warrant certificate in any jurisdiction shall not affect or impair such provision or part thereof or any other provisions of this Series A Warrant certificate in any other jurisdiction. |
- 16 -
(a) | prior to the date which is four months and one day after the date hereof will bear the following legend: | ||
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL NOT TRADE THE SECURITIES BEFOREl, 200l.” | |||
provided that at any time subsequent to the date which is four months and one day after the date hereof any certificate representing such Common Shares may be exchanged for a certificate bearing no such legends; and | |||
(b) | at any time during the Exercise Period will bear the the following legends: |
- 17 -
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) NOR THE SECURITIES ACT OF ANY STATE OF THE UNITED STATES. THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS THEYHAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE SECURITIES LAWS OF ALL APPLICABLE STATES OF THE UNITED STATES OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.”; | |||
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE BUT CANNOT BE TRADED THROUGH THE FACILITIES OF THE EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.”; | |||
provided that, at any time and from time to time, the Holder may exchange a certificate bearing the foregoing restrictive legends for a certificate bearing no such legend upon having furnished evidence satisfactory to the Company, acting reasonably, which may include an opinion of counsel, that the removal of such restrictive legends would not be contrary to Applicable Law. |
IVANHOE MINES LTD. | ||||||
Per: | ||||||
NAME: | ||||||
ADDRESS: | ||||||
(Incorporated under the laws of the Yukon Territory)
CERTIFICATE | 46,026,522 | |||||
NUMBER B -1 | SERIES B | |||||
WARRANTS | ||||||
- 2 -
(a) | “Applicable Law” has the meaning assigned to it in the Private Placement Agreement; | ||
(b) | “Business Day” has the meaning assigned to it in the Private Placement Agreement; | ||
(c) | “Common Shares” means the common shares without par value in the capital of the Company as such shares are constituted on the date of the Private Placement Agreement, as the same may be reorganized, reclassified or redesignated pursuant to any of the events set out in Part 10 hereof; | ||
(d) | “Company” means Ivanhoe Mines Ltd., a corporation continued under the laws of the Yukon Territory, and its successors; | ||
(e) | “Company Shareholder Approval” means approval of the Holder’s right to exercise the Series B Warrants to acquire the maximum number of Common Shares that may be acquired by the Holder from time to time pursuant to this Series B Warrant certificate given by a majority of the votes cast by holders of Common Shares present in person or by proxy at a special meeting of holders of Common Shares convened pursuant to the terms of the Private Placement Agreement; | ||
(f) | “Company Shareholder Approval Date” means the date upon which Company Shareholder Approval is obtained by the Company; | ||
(g) | “Current Market Price” of the Common Shares at any date, means the weighted average of the sale prices per Common Share at which the Common Shares have traded on the Exchange, or, if the Common Shares in respect of which a determination of current market price is being made are not listed thereon, on such stock exchange or securities market on which such shares are listed or quoted as may be selected for such purpose by the Company’s board of directors, or, if the Common Shares are not listed on any stock exchange, then on the over-the-counter market, for any twenty (20) consecutive trading days selected by the Company commencing not more than forty five (45) trading days and ending not fewer than five (5) trading days before such date; provided, however, if such Common Shares are not traded during |
- 3 -
such forty (40) trading day period for at least twenty (20) consecutive trading days, the simple average of the following prices established for each of twenty (20) consecutive trading days selected by the Company commencing not more than forty five (45) trading days before such date: |
(i) | the average of the bid and ask prices for each day on which there was no trading, and |
(ii) | the closing price of the Common Shares for each day on which there was trading, |
(h) | “Exchange” means the Toronto Stock Exchange; | ||
(i) | “Exercise Clearance Date” means the later of: |
(i) | the Company Shareholder Approval Date; and | ||
(ii) | the Regulatory Approval Date; |
(j) | “Exercise Period” means the period of time commencing on the Exercise Clearance Date and ending on the the seven hundred and twenty-fifth (725th) day after the Warrant Determination Date; | ||
(k) | “Exercise Price” means an amount per Common Share in lawful money of the United States of America equal to, |
(i) | eight dollars and thirty eight cents ($8.38) during the period of time commencing on the Company Shareholder Approval Date and ending on the one hundred and eightieth (180th) day after the Warrant Determination Date; and | ||
(ii) | eight dollars and fifty four cents ($8.54) during the period commencing on the one hundred and eighty first (181st) day after the Warrant Determination Date and ending on the three hundred and sixty-fifth (365th) day after the Warrant Determination Date; |
- 4 -
(iii) | eight dollars and eighty eight cents ($8.88) during the period commencing on the three hundred and sixty-sixth (366th) day after the Warrant Determination Date and ending on the five hundred and forty-fifth (545th) day after the Warrant Determination Date; and | ||
(iv) | nine dollars and two cents ($9.02) during the period commencing on the five hundred and forty-sixth (546th) day after the Warrant Determination Date and ending on the seven hundred and twenty-fifth (725th) day after the Warrant Determination Date. |
(l) | “Expiry Time” means (i) immediately upon termination of the Ivanhoe Meeting, if the Company Shareholder Approval is not obtained at the Ivanhoe Meeting, or (ii) 5:00 o’clock in the afternoon, Vancouver time, on the last day of the Exercise Period, if the Company Shareholder Approval is obtained at the Ivanhoe Meeting; | ||
(m) | “Holder” means Rio Tinto International Holdings Limited, a corporation incorporated under the laws of England and Wales and its successors; | ||
(n) | “Ivanhoe Meeting” has the meaning assigned to it in the Private Placement Agreement; | ||
(o) | “Notice” has the meaning assigned to it in the Private Placement Agreement; | ||
(p) | “person” means an individual, corporation, partnership, unincorporated syndicate, unincorporated organization, trust, trustee, executor, administrator, or other legal representative, or any group or combination thereof; | ||
(q) | “Private Placement Agreement” means the agreement made as of the 18th day of October 2006 between the Company and the Holder providing for, among other things, the issuance of the Series B Warrants; | ||
(r) | “Regulatory Approval” means approval under theInvestment Canada Act(Canada) of the Holder’s right to exercise the Series B Warrants, to the extent such approval is required in the reasonable opinion of the Holder; | ||
(s) | “Regulatory Approval Date” means the date upon which the Holder delivers to the Company written evidence of Regulatory Approval; | ||
(t) | “Rio Tinto Group” has the meaning assigned to it in the Private Placement Agreement; | ||
(u) | “Series B Warrants” means the share purchase warrants of the Company evidenced |
- 5 -
by, and governed by the terms of, this Series B Warrant certificate; | |||
(v) | “Subscription Form” means the form of subscription annexed hereto as Appendix “1”; and | ||
(w) | “Subsidiary” has the meaning assigned to it in the Private Placement Agreement; | ||
(x) | “Warrant Determination Date” has the meaning assigned to it in the Private Placement Agreement; | ||
(y) | “this Series B Warrant certificate”, “Series B Warrant”, “herein”, “hereby”, “hereof”, “hereto”, “hereunder” and similar expressions mean or refer to this Series B Warrant certificate and any deed or instrument supplemental or ancillary thereto and any appendices or schedules hereto or thereto and not to any particular article, section, subsection, clause, subclause or other portion hereof. |
(a) | this Series B Warrant certificate, with the Subscription Form duly completed and executed by the Holder or its legal representative or attorney, duly appointed by an instrument in writing in form and manner satisfactory to the Company; and | ||
(b) | a bank draft or certified cheque payable, or wire transfer confirmation in writing evidencing payment, to the order of the Company, in lawful money of the United States of America an amount equal to the product of the then prevailing Exercise Price multiplied by the number of Common Shares stipulated in the Subscription Form as being subscribed for pursuant to the exercise of the Series B Warrants evidenced by this Series B Warrant certificate. |
- 6 -
(a) | so long as any Series B Warrants evidenced hereby remain outstanding, it shall reserve and there shall remain unissued out of its authorized capital a sufficient number of Common Shares to satisfy the maximum right of purchase provided for herein; | ||
(b) | all Common Shares which shall be issued upon the exercise of any Series B Warrants hereunder shall, upon payment therefor of the then prevailing Exercise Price, be issued as fully paid and non-assessable Common Shares; and |
- 7 -
(c) | it will at its expense expediously use its best efforts to obtain the listing of such Common Shares (subject to issue and notice of issue) on each stock exchange, securities market or over-the-counter market on which the Common Shares may be listed from time to time. |
(a) | issues Common Shares or securities exchangeable for or convertible into Common Shares to all or substantially all the holders of the Common Shares as a stock dividend; or | ||
(b) | makes a distribution on its outstanding Common Shares payable in Common Shares or securities exchangeable for or convertible into Common Shares; or | ||
(c) | subdivides its outstanding Common Shares into a greater number of shares; or | ||
(d) | consolidates its outstanding Common Shares into a lesser number of shares; |
- 8 -
(a) | the right to subscribe for or purchase Common Shares, or the right to exchange securities for or convert securities into Common Shares, expires not more than forty five (45) days after the date of such issue (the period from the record date to the date of expiry being referred to as the “Rights Period”); and | ||
(b) | the cost per Common Share during the Rights Period (inclusive of any cost or acquisition of securities exchangeable for or convertible into Common Shares in addition to any direct cost of Common Shares) (such cost being referred to as the “Per Share Cost”) is less than 95% of the Current Market Price of the Common Shares on the record date; |
(a) | the numerator of which is the aggregate of: |
(i) | the number of Common Shares outstanding as of the record date for the Rights Offering; and | ||
(ii) | a number determined by dividing the product of the Per Share Cost and: |
A. | where the event giving rise to the application of this Section 10.5 was the issue of rights, options or warrants to the holders of Common Shares under which such holders are entitled to subscribe for or purchase additional Common Shares, the number of Common Shares so subscribed for or purchased during the Rights Period, or | ||
B. | where the event giving rise to the application of this Section 10.5 was the issue of rights, options or warrants to the holders of Common |
- 9 -
Shares under which such holders are entitled to subscribe for or purchase securities exchangeable for or convertible into Common Shares, the number of Common Shares for which those securities so subscribed for or purchased during the Rights Period could have been exchanged or into which they could have been converted, |
(b) | the denominator of which is |
(i) | in the case described in subsection 10.5(a)(ii)A., the number of Common Shares outstanding, or | ||
(ii) | in the case described in subsection 10.5(a)(ii)B., the number of Common Shares that would be outstanding if all the Common Shares described in subsection 10.5(a)(ii)B. had been issued, |
(a) | the Exercise Price in effect immediately prior to the end of such Rights Offering; and |
- 10 -
(b) | the Exercise Price as adjusted hereunder for such Rights Offering; |
(a) | shares of the Company of any class other than Common Shares, | ||
(b) | rights, options or warrants to acquire: |
(i) | Common Shares or securities exchangeable for or convertible into Common Shares (other than rights, options or warrants of the nature described in Section 10.4), or | ||
(ii) | shares other than Common Shares or securities exchangeable for or convertible into shares other than Common Shares or property or other assets of the Company, |
(c) | evidences of indebtedness, or | ||
(d) | any property or other assets |
(a) | the numerator of which is: |
(i) | the product of the number of Common Shares outstanding on such record date and the Current Market Price of the Common Shares on such record date; less |
- 11 -
(ii) | the aggregate fair market value (as determined by the board of directors of the Company, acting reasonably and in good faith) to the holders of the Common Shares of such securities or property or other assets so issued or distributed in the Special Distribution; and |
(b) | the denominator of which is the number of Common Shares outstanding on such record date multiplied by the Current Market Price of the Common Shares on such record date. |
- 12 -
- 13 -
(a) | the successor corporation will have assumed all the covenants and obligations of the Company under this Series B Warrant certificate; and | ||
(b) | this Series B Warrant certificate will be a valid and binding obligation of the successor corporation entitling the Holder, as against the successor corporation, to all |
- 14 -
the rights of the Holder under this Series B Warrant certificate. |
- 15 -
(a) | the validity, legality or enforceability of such remaining provisions or parts thereof shall not in any way be affected or impaired by the severance of the provisions or parts thereof severed; and | ||
(b) | the invalidity, illegality or unenforceability of any provision or part thereof contained in this Series B Warrant certificate in any jurisdiction shall not affect or impair such provision or part thereof or any other provisions of this Series B Warrant certificate in any other jurisdiction. |
- 16 -
(a) | prior to the date which is four months and one day after the date hereof will bear the following legend: | ||
“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE |
- 17 -
SECURITIES REPRESENTED BY THIS CERTIFICATE SHALL NOT TRADE THE SECURITIES BEFOREl, 200l.” |
(b) | at any time during the Exercise Period will bear the the following legends: | ||
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) NOR THE SECURITIES ACT OF ANY STATE OF THE UNITED STATES. THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS THEYHAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT AND THE SECURITIES LAWS OF ALL APPLICABLE STATES OF THE UNITED STATES OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.”; | |||
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE BUT CANNOT BE TRADED THROUGH THE FACILITIES OF THE EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.”; | |||
provided that, at any time and from time to time, the Holder may exchange a certificate bearing the foregoing restrictive legends for a certificate bearing no such legend upon having furnished evidence satisfactory to the Company, acting reasonably, which may include an opinion of counsel, that the removal of such restrictive legends would not be contrary to Applicable Law. |
IVANHOE MINES LTD. | ||||||
Per: | ||||||
NAME: | ||||||
ADDRESS: | ||||||
2
Term | Section | |
Blackout Period | 4 | |
Demand Registration | 2(a) | |
Demand Registration Statement | 2(a) | |
Indemnified Party | 8(c) | |
Indemnifying Party | 8(c) | |
Ivanhoe | Preamble | |
Ivanhoe Shares | Recitals | |
Maximum Number of Securities | 3(c) | |
Piggy-Back Registration | 3(a) | |
Piggy-Back Registration Statement | 3(a) | |
Private Placement Agreement | Recitals | |
Rio Tinto | Preamble |
3
Term | Section | |
Selling Shareholder | Preamble | |
Shelf Registration | 2(c) | |
Shelf Registration Statement | 2(c) | |
Warrants | Recitals |
4
5
6
7
8
9
10
11
12
13
14
Suite 654
Vancouver, BC V6C 3E1
Canada
Facsimile: 604-682-2060
Attention: Corporate Secretary
with a copy to (which shall not constitute notice):
355 Burrard Street, Suite 1900
Vancouver, BC V6C 2G8
Canada
Facsimile: 604-682-7131
Attention: Paul L. Goldman
1285 Avenue of the Americas
New York, NY 10019-6064
Facsimile: 212-757-3990
Attention: Edwin S. Maynard
6 St. James’s Square
London
SW1Y 4LD
United Kingdom
Facsimile: +44 (0)20 7930 3249
Attention: Company Secretary
Broadgate West
9 Appold Street
15
Facsimile: +44 (0)20 7655 5265
Attention: George Karafotias
16
17
IVANHOE MINES LTD. | ||||
By: | ||||
Name: | ||||
Title: | ||||
RIO TINTO INTERNATIONAL HOLDINGS LIMITED | ||||
By: | ||||
Name: | ||||
Title: | ||||
18
DISPOSITION OF MYANMAR ASSETS
OT PROJECT MAP AND CO-ORDINATES
1 | Oyu Tolgoi: | 106°47’30” | — | 42°58’30” | 8496 | |||||
6709A | 106°47’30” | — | 43°03’00” | hectares | ||||||
106°55’00” | — | 43°03’00” | ||||||||
106°55’00” | — | 42°58’30” | ||||||||
2 | Huh Had: | 106°51’30” | — | 42°55’30” | 1764 | |||||
6710A | 106°51’30” | — | 42°57’30” | hectares | ||||||
106°55’00” | — | 42°57’30” | ||||||||
106°55’00” | — | 42°55’30” | ||||||||
3 | Manaht: | 106°38’00” | — | 42°54’00” | 4537 | |||||
6708A | 106°38’00” | — | 42°57’00” | hectares | ||||||
106°44’00” | — | 42°57’00” | ||||||||
106°44’00” | — | 42°54’00” | ||||||||
4 | Oyu Tolgoi | 106°30’00” | — | 42°54’00” | 9070 | |||||
106°30’00” | — | 43°00’00” | hectares | |||||||
6711A | 106°36’00” | — | 43°00’00” | |||||||
106°36’00” | — | 42°54’30” |