EXHIBIT 10.1

 

 
EXECUTION COPY
 
 
INMET MINING CORPORATION
 
- AND -
 
 
LEUCADIA NATIONAL CORPORATION
 
- AND -
 
 
MK RESOURCES LLC
 

 

 

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SHARE PURCHASE AGREEMENT
 

 

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November 29, 2010
 

 
 

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TABLE OF CONTENTS

 
ARTICLE 1 - INTERPRETATION
1
1.1
Definitions
1
1.2
Headings
7
1.3
Extended Meanings
7
1.4
Currency
7
     
ARTICLE 2 - PURCHASE AND SALE
8
2.1
Purchase and Sale
8
2.2
Closing
9
     
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
9
3.1
Representations and Warranties of the Seller Parties Pertaining to Leucadia and
MK Resources.
9
3.2
Representations and Warranties of Inmet
12
3.3
Survival of the Representations, Warranties and Covenants
15
     
ARTICLE 4 - CONDITIONS
15
4.1
Conditions for the Benefit of Inmet
15
4.2
Conditions for the Benefit of the Seller Parties
17
4.3
Procedure for Satisfaction of the Conditions
19
4.4
Termination; Effect of Termination
19
4.5
Specific Performance
19
     
ARTICLE 5 - COVENANTS
20
5.1
Continued Securities Compliance
20
5.2
Tax Status
20
     
ARTICLE 6 - INDEMNIFICATION
20
6.1
Seller Parties’ Indemnities
20
6.2
Indemnity of Inmet
20
6.3
Commissions
20
6.4
Exclusive Remedies
21
6.5
Limitation of Liability of the Seller Parties
21
6.6
Limitation of Liability of Inmet
21
6.7
Notice of and Defence of Third Party Claims
21
6.8
Calculation of Damages
23
6.9
Mitigation
24
6.10
No Duplication
24
6.11
Tax Treatment of Indemnity Payments
24
     
ARTICLE 7 - GENERAL
24
7.1
Public Announcements and Confidential Information
24

 

 
 

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- ii -
 

 
7.2
Information for Reporting Requirements
25
7.3
Further Assurances
25
7.4
Time of the Essence
25
7.5
Dispute Resolution
26
7.6
Fees and Expenses
26
7.7
Benefit of the Agreement
26
7.8
Invalidity of Provisions
26
7.9
Entire Agreement
26
7.10
Amendments and Waiver
26
7.11
Assignment
27
7.12
Notices
27
7.13
Governing Law
28
7.14
Attornment
28
7.15
Counterparts and Faxed Signatures
28

 

 

 

 
 

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THIS AGREEMENT made the 29th day of November, 2010;
 
B E T W E E N:
 
INMET MINING CORPORATION, a corporation incorporated under the laws of Canada
(“Inmet”),
 
- and -
 
LEUCADIA NATIONAL CORPORATION, a corporation incorporated under the laws of the
State of New York, United States of America (“Leucadia”),
 
- and -
 
MK RESOURCES LLC (formerly MK Resources Company), a limited liability company
incorporated under the laws of the State of Delaware, United States of America
 
(“MK Resources”),
 
WHEREAS MK Resources is the holder of 16,349,535 shares in BV I (as defined
below);
 
AND WHEREAS MK Resources is a wholly-owned subsidiary of Leucadia;
 
AND WHEREAS MK Resources desires to sell and Inmet desires to purchase the
Purchased Shares (as defined below), upon and subject to the terms and
conditions hereinafter set forth;
 
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the premises and
the covenants and agreements herein contained the Parties agree as follows:
 
ARTICLE 1 - INTERPRETATION
 
1.1                      Definitions
 
In this Agreement, unless something in the subject matter or context is
inconsistent therewith:
 
“Affiliate” means as to any Person, any other Person which, directly or
indirectly, Controls, is Controlled by, or is under common Control with, such
Person;
 

 
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“Agreement” means this agreement and all schedules attached to this agreement
and all amendments, restatements or replacements made hereto by written
agreement between the Parties;
 
“Applicable Law” in respect of any Person, property, transaction or event, means
all laws, statutes, regulations, common law, judgments, notices, approvals,
orders and decrees applicable to that Person, property, transaction or event
and, whether or not having the force of law, all applicable official directives,
rules, consents, approvals, authorizations, guidelines, orders and policies of
any Governmental Body having or purporting to have authority over that Person,
property, transaction or event (and (i) where used in respect of a
representation or warranty, as in effect as of the date of the representation or
warranty and (ii) where used in respect of a covenant, as in effect from time to
time, in each case unless otherwise noted);
 
“Assets” means all assets (including Confidential Information), property
interests, or rights of, held by or owned by any of the Las Cruces Companies
(including all personal property, whether tangible or intangible, and real
property, including chattels and fixtures);
 
“Books and Records” means all technical, financial, business, tax and employee
books, records, files, papers, regulatory filings and returns and other books,
records, files, papers and regulatory filings of the Las Cruces Companies in any
form whatsoever (including written, printed, electronic or computer printout
form), including lists of present customers, suppliers, consultants and
employees, financial books and records of account, actuarial, tax and accounting
information, recordings of geological and metallurgical data, reports, files,
lists, drawings, plans, logs, briefs, customer and agency records, computer
program documentation, medical records, data bases, employee data and records,
deeds, certificates, contracts, surveys, title and legal opinions, records of
payment, loan histories, investment asset documentation, evidences of mortgage
insurance, written employment manuals and employment policies;
 
“Business Day” means a day other than a Saturday, Sunday or statutory holiday in
Toronto, Canada; New York, New York; Amsterdam, the Netherlands, or Salt Lake
City, Utah;
 
“BV I” means CLC Copper I B.V., a besloten vennootschap met beperkte
aansprakelijkheid under the laws of the Netherlands;
 
“Canadian GAAP” means the accounting principles generally accepted in Canada,
including, for all principles stated in the Handbook of the Canadian Institute
of Chartered Accountants, such principles so stated;
 
“Canadian Securities Laws” means the applicable securities laws of each of the
provinces and territories of Canada, the respective regulations and rules made
under those securities laws and the published policy statements of the Canadian
securities regulatory authorities;
 

 
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“CFC” means a controlled foreign corporation within the meaning of Section 957
of the Code;
 
“Claim” means any claim for money damages or equitable relief arising out of a
legal proceeding, and includes any cause of action, suit, proceeding, judgment,
award, assessment, reassessment or notice of determination of loss;
 
“CLC” means Cobre Las Cruces, S.A., a company incorporated under the laws of
Spain;
 
“Closing” means the completion of the Transaction in accordance with this
Agreement at the Time of Closing;
 
“Closing Date” means the fifth Business Day immediately following the date on
which a Condition Satisfaction Period commences, provided that if that Condition
Satisfaction Period terminates prior to such fifth Business Day, then the
Closing Date shall be determined with reference to the Condition Satisfaction
Period next occurring, or such earlier or later date as may be agreed upon in
writing by the Parties;
 
“Code” means the Internal Revenue Code of 1986;
 
“Condition Satisfaction Period” means any period of time commencing on the date
on which each of the conditions set out in Sections 4.1 or 4.2 of this Agreement
has been and continues to remain satisfied or, if not satisfied, has been waived
by the Party or Parties for whose benefit such unsatisfied condition exists, and
terminating on the date on which any of such conditions not so waived ceases to
be satisfied (unless prior to the time such condition ceases to be satisfied, it
has been waived by the Party benefiting therefrom);
 
“Confidential Information” means all information, regardless of its form,
relating to the Project, the Las Cruces Companies or the Assets, including
reports, results, maps, charts, strategic plans and other data, whether in oral,
written or electronic form and whether or not stated or noted to be
confidential, other than information which is or becomes available to the public
without breach of the provisions of this Agreement;
 
“Contract” means any written or oral contract, agreement, lease, arrangement or
commitment, including any benefit plan, to which any of the Las Cruces Companies
is a party or by which any of them is or their respective assets are bound;
 
“Control” means:
 
 
(a)
when applied to the relationship between a Person and a Corporation, the
beneficial ownership by such Person at the relevant time of shares of such
Corporation carrying either at least 50% of the voting rights ordinarily
exercisable at meetings of shareholders of such Corporation or the percentage of
voting rights ordinarily exercisable at meetings of shareholders of such
Corporation that are sufficient to elect a majority of the directors of such
Corporation; and

 

 
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(b)
when applied to the relationship between a Person and a partnership or joint
venture, the beneficial ownership by such Person at the relevant time of more
than 50% of the ownership interests of the partnership or joint venture in
circumstances where it can reasonably be expected that such Person directs the
affairs of the partnership or joint venture;

 
and the words “Controlled by”, “Controlling” and similar words have
corresponding meanings; provided that a Person (the “first-mentioned Person”)
who Controls a Corporation, partnership or joint venture (the “second-mentioned
Person”) shall be deemed to Control:  (i) a Corporation, partnership or a joint
venture (the “third-mentioned Person”) which is Controlled by the
second-mentioned Person, (ii) a Corporation, partnership or joint venture which
is controlled by the third-mentioned Person and (iii) so on;
 
“Corporation” means a corporation, an incorporated company, a limited liability
company, a besloten vennootschap met beperkte aansprakelijkheid or naamloze
vennootschap under Dutch law, or a Sociedad Anónima,  Sociedad Limitada or
asociación under Spanish law;
 
“Governmental Body” means the European Union or any agency thereof, or any
national, state, regional, municipal or local governmental department,
commission, board, bureau, agency, authority or instrumentality of Spain, the
Netherlands, Canada, the United States or any political subdivision thereof, and
any Person exercising or purporting to exercise executive, legislative,
judicial, regulatory or administrative functions of or pertaining to any of the
foregoing entities, including all tribunals, commissions, boards, bureaus,
arbitrators and arbitration panels, and any authority or other Person controlled
by any of the foregoing;
 
“IFC” means Inmet Finance Company Sàrl, a limited liability company existing
under the laws of Luxembourg, formerly IMUS LLC, a Delaware limited liability
company;
 
“Inmet Common Share Reorganization” has the meaning attributed to such term in
Section 2.1(3);
 
“Inmet Consideration Shares” has the meaning attributed to such term in Section
2.1(2);
 
“Inmet Public Record” on any date, means all documents filed by Inmet with the
Ontario Securities Commission or any other Canadian securities regulatory
authorities which would be required to be incorporated by reference in a
short-form prospectus of Inmet filed on that date pursuant to National
Instrument 44-101 of the Canadian securities regulatory authorities;
 
“Knowledge of Inmet” means the knowledge, after due inquiry, of the officers and
senior management of Inmet;
 
“Knowledge of the Seller Parties” means the knowledge, after due inquiry, of any
of: (i) the officers and directors (other than independent directors) of MK
Resources, and (ii)
 

 
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“Las Cruces Companies” means BV I, CLC Copper II B.V. and CLC;
 
“Leucadia Guarantee” means the guarantee dated as of July 30, 2009 by Leucadia
as guarantor in favour of IFC as lender;
 
“Leucadia Note” means the CLC Copper I B.V. Second Amended and Restated
Promissory Note dated June 1, 2010 in favour of Leucadia in an outstanding
principal amount of €130,790,718.18 (US$ 172,970,724.79) as at the date hereof;
 
“Leucadia Note Purchase Agreement” means the agreement to be entered into on the
date hereof between Inmet, Leucadia and IFC providing for the purchase by IFC of
the Leucadia Note;
 
“Lien” means (i) any security interest, mortgage, pledge, prohibition,
injunction, lien, charge or other encumbrance of any kind, or any prior
assignment, option, claim, promise to contract, or interest of any kind, upon
any property or assets, or upon the income or profits therefrom; (ii) any
acquisition of or option to acquire any property or assets upon conditional sale
or other title retention agreement, device or arrangement (including any capital
lease); or (iii) any sale, assignment, pledge or other transfer for security of
any accounts, general intangibles or chattel paper, with or without recourse;
 
“Loss” means any loss, liability, damage, cost or expense suffered or incurred,
including the costs and expenses of any assessment, judgment, settlement or
compromise relating thereto and, fees and expenses of lawyers and other
professionals acting on behalf of the Party recovering its Loss, net of
recoveries and associated tax benefits, and excluding any incidental, indirect,
special or punitive damages;
 
“Loss Payment” means the amount of any Loss required to be paid by an
Indemnifying Party under this Agreement;
 
“Material Adverse Change” means a material adverse change in, or a material
adverse effect upon, the business, operations, prospects, assets, liabilities or
financial condition of Inmet on a consolidated basis, as the case may be,
excluding any change or effect caused by or resulting from or attributable to
(i) conditions in the global economy or securities markets in general;
(ii) developments affecting the worldwide base metal mining industry in general
which do not have a materially disproportionate effect on Inmet on a
consolidated basis, as the case may be; (iii) changes in the price of copper; or
(iv) changes in currency exchange rates;
 
“Members of the Inmet Group” means Inmet and its Affiliates from time to time;
 
“Members of the Leucadia Group” means Leucadia and its Affiliates from time to
time;
 
“Parties” means the parties to this Agreement and “Party” means any one of them;
 
“Party Group” means, respectively, Inmet and the Seller Parties;
 

 
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“Person” means an individual, a partnership, a limited partnership, a joint
venture, a syndicate, a Corporation, a Governmental Body, a trustee, any
unincorporated organization and the heirs, executors, administrators or other
legal representatives of an individual and words importing “Person” have similar
meaning;
 
“PFIC” means a passive foreign investment company within the meaning of Section
1297 of the Code;
 
 “Project” means the Las Cruces high-grade copper deposit identified by “Las
Cruces” mining concession No. 7532-A and located in the autonomous region of
Andalusia, Spain;
 
“Purchased Shares” means 16,349,535 shares of €1 in the share capital of BV I;
 
“Registration Rights Agreement” means the registration rights agreement dated
August 22, 2005 by and among Inmet, Leucadia and MK Resources;
 
“SEC” means the U.S. Securities and Exchange Commission;
 
“Seller Parties” means Leucadia and MK Resources;
 
“Shareholders Agreement” means the third amended and restated Las Cruces Project
Shareholders Agreement dated July 22, 2009 between Inmet, Inmet Finland OY,
Inmet Cobre España, S.A., IFC, Leucadia, MK Resources, BV I and CLC Copper II
B.V.;
 
“Subscription Agreement” means the subscription agreement dated March 31, 2010
providing for the subscription for and issue of subscription receipts between
Inmet, Ellington Investments Pte Ltd. as subscriber and CIBC Mellon Trust
Company as subscription receipt agent;
 
“Taxes” means (i) all taxes, levies, duties, imposts, mining licenses, fees,
deductions, charges or withholdings of any kind whatsoever including national
and municipal patents, sales, gross or net income, receipts, value added, use,
ad valorem, transfer, franchise, payroll, capital, excise, goods and services,
property or windfall profit taxes, stamp or similar documentary charges, customs
duties, health and social security contributions, employment insurance premiums
and any other withholdings or deductions relating to employees and all
liabilities with respect thereto, including any interest, fines, penalties,
surtaxes, charges, additions to tax or additional amounts and loss of relief in
respect of any of the foregoing, imposed by any taxing or social security
authority, body or instrumentality (whether Spanish, Dutch or foreign) upon the
Las Cruces Companies or Inmet, as the case may be, and/or (ii) any liability of
the Las Cruces Companies or Inmet, as the case may be, for the payment of any
amounts of the type described in the immediately preceding clause (i) as a
result of being a member of an affiliated or combined tax group;
 
“Termination Date” means January 31, 2011, subject to the right of either Party
to postpone the Termination Date on no more than two occasions by a period of 30
days if (A) the Toronto Stock Exchange has not approved the listing of the Inmet
Consideration
 

 
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Shares or (B) the transfer of the Purchased Shares is delayed, provided that the
Party seeking to postpone the Termination Date is not the cause of such delay;
 
“Third Party” means any Person other than a Party and its Affiliates;
 
“Third Party Claim” means any Claim asserted by a Third Party against Inmet or
the Seller Parties, as the case may be;
 
“Time of Closing” means 10:00 a.m. (Eastern Standard Time) on the Closing Date
or such other time as shall be mutually agreed to among the Parties;
 
“Transaction” means the sale of the Purchased Shares by MK Resources to Inmet in
exchange for the Inmet Consideration Shares pursuant to the terms of this
Agreement;
 
“Transaction Documents” means: (i) this Agreement, (ii) the Leucadia Note
Purchase Agreement, (iii) all agreements and instruments entered into or to be
entered into pursuant to this Agreement and the Leucadia Note Purchase
Agreement, and (iv) all agreements and instruments entered into or to be entered
into by one or more of the Parties with any Member of the Inmet Group or any
Member of the Leucadia Group relating to the transactions contemplated by this
Agreement;
 
“U.S. Dollars” and the symbol “$” means lawful money of the United States of
America;
 
“U.S. Securities Act” means the United States Securities Act of 1933, as
amended;
 
“U.S. Securities Laws” means United States federal securities laws;
 
1.2                      Headings
 
The division of this Agreement into Articles and Sections and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.  The terms “this Agreement”,
“hereof”, “hereunder” and similar expressions refer to this Agreement and not to
any particular Article, Section or other portion hereof and include any
agreement supplemental hereto.  Unless something in the subject matter or
context is inconsistent therewith, references herein to Articles and Sections
are to Articles and Sections of this Agreement.
 
1.3                      Extended Meanings
 
In this Agreement words importing the singular number only shall include the
plural and vice versa, words importing the masculine gender shall include the
feminine and neuter genders and vice versa.  The term “including” as used herein
means “including without limiting the generality of the foregoing”.
 
1.4                      Currency
 
Unless otherwise indicated, all references to currency herein are to U.S.
Dollars.
 

 
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ARTICLE 2 - PURCHASE AND SALE
 
2.1                      Purchase and Sale
 
(1)           MK Resources agrees to sell and Inmet agrees to purchase the
Purchased Shares at the Time of Closing, free and clear of all Liens.
 
(2)           In consideration for the Purchased Shares, Inmet shall issue from
treasury to MK Resources 5,063,576 previously unissued Inmet common shares (as
such amount may be adjusted pursuant to Section 2.1(4)), the “Inmet
Consideration Shares”).
 
(3)           If at any time prior to the Time of Closing, Inmet shall:
 
 
(a)
subdivide the Inmet common shares into a greater number of shares;

 
 
(b)
consolidate the Inmet common shares into a lesser number of shares;

 
 
(c)
make a distribution to the holders of all or substantially all of the Inmet
common shares of additional Inmet common shares or securities exchangeable for
or convertible into Inmet common shares (excluding shares issued in the ordinary
course pursuant to employment compensation plans);

 
 
(d)
otherwise change the number of Inmet common shares outstanding by reason of a
reclassification, recapitalization, exchange of shares or similar event;

 
 
(any such event being herein called an “Inmet Common Share Reorganization”), the
number of Inmet Consideration Shares shall be adjusted in accordance with
Section 2.1(4).

 
(4)           If an Inmet Common Share Reorganization occurs, and each time an
Inmet Common Share Reorganization occurs, the number of Inmet Consideration
Shares provided for by this Agreement immediately prior to giving effect to the
Inmet Common Share Reorganization shall be multiplied by a fraction of which:
 
 
(a)
the numerator shall be the number of Inmet common shares that are (or will be)
outstanding immediately after giving effect to the Inmet Common Share
Reorganization (ignoring for this purpose the Inmet Consideration Shares),
including in the case of a distribution of securities exchangeable for or
convertible into Inmet common shares, the number of Inmet common shares that
would be outstanding if such securities had been exchanged or converted into
Inmet common shares; and

 
 
(b)
the denominator shall be the number of Inmet common shares outstanding
immediately prior to giving effect to the Inmet Common Share Reorganization.

 

 
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2.2                      Closing
 
(1)           Except as provided in Section 2.2(2)(i) below, the sale and
purchase of the Purchased Shares shall be completed at the Time of Closing at
the offices of Torys LLP in Toronto, Ontario.
 
(2)           At Closing, MK Resources shall transfer the Purchased Shares to
Inmet by means of a notarial deed executed in the Netherlands before a Dutch
civil law notary, and Inmet shall deliver to MK Resources share certificates
representing the Inmet Consideration Shares registered in the name of MK
Resources or as MK Resources may direct.
 
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
 
3.1
Representations and Warranties of the Seller Parties Pertaining to Leucadia and
MK Resources.

 
In order to induce Inmet to enter into this Agreement, each of the Seller
Parties jointly and severally represents and warrants to Inmet (and acknowledges
that Inmet is relying on these representations and warranties in connection with
the execution of this Agreement and the transactions contemplated hereby) that:
 
(1)           Due Incorporation.  Each of the Seller Parties has been duly
incorporated and organized under the laws of the respective jurisdictions in
which it is incorporated, validly exists thereunder and is in good standing, if
applicable, under the Applicable Law governing its existence.
 
(2)           Due Authorization.  Each of the Seller Parties has the necessary
corporate power and authority to execute and deliver the Transaction Documents
to which it is or will be a party and to perform its obligations
thereunder.  The execution and delivery of the Transaction Documents to which it
is a party by each of the Seller Parties and the performance of its obligations
thereunder have been duly authorized by all necessary corporate actions on its
part.  Such execution, delivery and performance by each of the Seller Parties do
not require any consent of, or notification to, any Person, or any action,
consent or notification under any Applicable Law which has not already been, or
will not by the Time of Closing have been, obtained or made.
 
(3)           Enforceability.  The Transaction Documents have been, or will be
on or prior to the Time of Closing, duly executed and delivered by each of the
Seller Parties and, assuming due authorization, execution and delivery thereof
by the other parties thereto other than any Seller Party, constitute, or will
constitute, valid and binding obligations of each of the Seller Parties
enforceable against each of the Seller Parties (to the extent that they are,
respectively, parties thereto) in accordance with their respective terms, except
as such enforceability (i) may be limited by bankruptcy, insolvency,
reorganization or other Applicable Law, now or later in effect, affecting the
enforcement of creditors’ rights generally and (ii) is
 

 
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subject to general principles of equity, whether considered in a proceeding at
law or in equity.
 
(4)          No Bankruptcy.  There has not been any petition or application
filed by a Seller Party or, to the Knowledge of the Seller Parties, a Third
Party, or any proceeding commenced which has not been discharged, by or, to the
Knowledge of the Seller Parties, against the Seller Parties or with respect to
or affecting any assets of MK Resources under any Applicable Law, relating to
bankruptcy, insolvency, readjustment of debt or creditors’ rights; none of the
Seller Parties is unable to meet its obligations as they generally become due,
and no assignment has been made by any of such companies for the benefit of
creditors.
 
(5)          No Dissolution.  No meeting has been convened or resolution or
petition proposed or order made for any of the Seller Parties to be wound up or
dissolved.
 
(6)          Right to Transfer Purchased Shares.  MK Resources is the sole
holder of all of the Purchased Shares and has good and marketable title
thereto.  The Purchased Shares are not subject to any Lien, and at the Time of
Closing will not be subject to any Lien.  There are no agreements or
restrictions which in any way limit the transfer to Inmet of the Purchased
Shares (other than the Shareholders Agreement).  At the Time of Closing, MK
Resources will have full legal right, power and authority to transfer the
Purchased Shares to Inmet free of Liens.
 
(7)          No Options.  Other than the Shareholders Agreement, there is no:
 
 
(a)
outstanding subscription, right, option, warrant, call, commitment or agreement
(other than this Agreement) which obliges Leucadia or MK Resources to sell,
transfer, assign, pledge, charge, mortgage or in any other way dispose of or
encumber any of the Purchased Shares or any interest therein;

 
 
(b)
right of pre-emption, right or obligation to acquire, redeem or convert, over or
affecting the Purchased Shares; or

 
 
(c)
shareholders’ agreement, voting trust, voting agreement, pooling agreement,
proxy or other arrangement relating to the voting or other rights attached to
any of the Purchased Shares,

 
and the Seller Parties have not agreed to give, create or enter into any of the
foregoing.
 
(8)          Non-Violation.  The execution and delivery by each of the Seller
Parties of the Transaction Documents to which they are a party and the
consummation of the transactions contemplated by the Transaction Documents do
not or will not, as applicable, (i) conflict with, violate, result in a breach
of, or constitute a default under any provision of the certificate of
incorporation or articles, by-laws or other organizational documents of the
Seller Parties, (ii) violate, conflict with or result in the breach, termination
or modification of, or otherwise give any other Person
 

 
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the right to terminate, or constitute a default under, with or without notice,
the lapse of time or both, or cause the acceleration of any obligation under,
the terms of any agreement or instrument to which any of the Seller Parties is a
party or by which any of them or any of their respective properties or other
assets may be bound, (iii) result in the creation of any Lien upon the Purchased
Shares, (iv) violate any Applicable Law applicable to the Seller Parties or the
Purchased Shares.
 
(9)          Litigation.  To the Knowledge of the Seller Parties, there are
(i) no outstanding judgments, orders, decrees, writs, injunctions, decisions,
rulings or awards against, with respect to, or in any manner affecting the
Purchased Shares.
 
(10)        Acquisition of Inmet Consideration Shares.  Each of the Seller
Parties understands and acknowledges that the issuance and sale of the Inmet
Consideration Shares has not been registered under the U.S. Securities Act and,
unless an exemption from registration is available, none of the Inmet
Consideration Shares may be offered or sold within the United States.  MK
Resources is an Accredited Investor (as that term is defined in Rule 501(a)(3)
of Regulation D of the U.S. Securities Act) and is acquiring the Inmet
Consideration Shares as principal for its own account, not for the benefit of
any other person, for investment purposes only and not with any current view to
any resale, distribution, or other disposition thereof in violation of any U.S.
Securities Laws or Canadian Securities Laws.  Each of the Seller Parties agrees
that it will not offer, sell or otherwise transfer or pledge any of the Inmet
Consideration Shares (other than pursuant to an effective registration statement
under the U.S. Securities Act) unless (i) the sale is to Inmet, (ii) the sale is
made outside the United States in accordance with the requirements of Rule 904
of Regulation S under the U.S. Securities Act and in compliance with applicable
local laws and regulations, or (iii) the sale is made pursuant to the exemption
from registration under the U.S. Securities Act provided by Rule 144 thereunder
or is otherwise exempt from U.S. registration (and in such case the applicable
Seller Parties shall provide Inmet with an opinion of counsel reasonably
acceptable to Inmet). Each of the Seller Parties understands and acknowledges
that the Inmet Consideration Shares are “restricted securities” as defined in
Rule 144 of the U.S. Securities Act.  Each of the Seller Parties acknowledges
that (a) it has reviewed the Inmet Public Record and has been afforded the
opportunity (i) to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of Inmet concerning the terms and
conditions of the offering of the Inmet Consideration Shares and (ii) to obtain
such additional information which Inmet possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy and
completeness of the information contained in the Inmet Public Record and that it
has considered necessary in connection with its decision to acquire the Inmet
Consideration Shares (and for that purpose has requested and received the
representations and warranties of Inmet provided in this Agreement) and (b) it
is not acquiring the Inmet Consideration Shares as a result of any general
solicitation or general advertising, as those terms are used in Regulation D
under the U.S. Securities Act including, without limitation, advertisements,
 

 
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articles, notices and other communications published in any newspaper, magazine
or similar media or broadcast over television or radio or any seminar or meeting
whose attendees have been invited by general solicitation or general
advertising.
 
3.2                      Representations and Warranties of Inmet
 
In order to induce the Seller Parties to enter into this Agreement Inmet
represents and warrants to the Seller Parties (and acknowledges that each of the
Seller Parties is relying on these representations and warranties in connection
with the execution of this Agreement and the transactions contemplated hereby)
that:
 
(1)          Due Incorporation.  Inmet is duly incorporated and organized under
the laws of Canada and validly exists thereunder.  Inmet is duly qualified to
carry on its business and is in good standing, if applicable, in each
jurisdiction in which the conduct of its business or the ownership, leasing or
operation of its property and assets requires such qualification, except where
the failure to be so qualified individually or in the aggregate, has not
resulted in, and would not reasonably be expected to result in, a Material
Adverse Change, and has all requisite power and authority to carry on its
business and to own, lease and operate its property and assets.
 
(2)          Due Authorization.  Inmet has the necessary corporate power and
authority to execute and deliver the Transaction Documents to which it is or
will be a party and to perform its obligations thereunder.  The execution and
delivery of the Transaction Documents to which it is a party by Inmet and the
performance of its obligations thereunder has been duly authorized by all
necessary corporate actions on its part.  Such execution, delivery and
performance by Inmet do not require any consent of, or notification to, any
Person, or any action, consent or notification under any Applicable Law which
has not already been, or will not by the Time of Closing have been, obtained or
made.
 
(3)          Enforceability.  The Transaction Documents to which Inmet is a
party have been or will be, as applicable, duly executed and delivered by Inmet
and constitute, or will constitute when executed and delivered by Inmet and by
the other parties thereto, valid and binding obligations of Inmet enforceable
against Inmet in accordance with their respective terms, except as
enforceability (i) may be limited by bankruptcy, insolvency, reorganization or
other Applicable Law, now or later in effect, affecting the enforcement of
creditors’ rights generally and (ii) is subject to general principles of equity,
whether considered in a proceeding at law or in equity.
 
(4)          No Bankruptcy.  There has not been any petition or application
filed by Inmet or any proceeding commenced which has not been discharged, by
Inmet  or, to the Knowledge of Inmet, against Inmet, or with respect to or
affecting any assets of Inmet under any Applicable Law relating to bankruptcy,
insolvency, reorganization, fraudulent transfer, compromise, arrangements,
insolvency,
 

 
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readjustment of debt or creditors’ rights, and no assignment has been made by
Inmet for the benefit of creditors.
 
(5)          No Dissolution.  No meeting has been convened or resolution
proposed or petition proposed or order made for Inmet to be wound up or
dissolved.
 
(6)          Non-Violation.  The execution and delivery by Inmet of the
Transaction Documents to which it is a party and the consummation of the
transactions contemplated thereby do not or will not, as applicable,
(i) conflict with, violate, result in a breach of, or constitute a default under
any provision of the articles or by-laws of Inmet, (ii) violate, conflict with
or result in the breach or termination of or modification, or otherwise give any
other Person the right to terminate, or constitute a default, with or without
notice, the lapse of time or both, or cause the acceleration of any obligation,
under the terms of any agreement or instrument to which Inmet is a party or by
which its properties or other assets may be bound, or give any Person the right
to increase the obligations of Inmet or (iii) violate any Applicable Law, other
than, in the cases of clauses (ii) or (iii), any such violations, conflicts,
breaches, terminations, modifications, defaults, accelerations or obligations
that individually or in the aggregate have not, and would not reasonably be
expected to, result in a Material Adverse Change.
 
(7)          Capital.  The authorized capital of Inmet consists of an unlimited
number of common shares, an unlimited number of preference shares and an
unlimited number of subordinate voting participating shares, of which 56,106,642
common shares (and no preference shares or subordinate voting participating
shares) were issued and outstanding as fully paid and non-assessable on November
26, 2010.
 
(8)          No Obligations to Issue Securities.  No Person 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 or other securities of Inmet, other
than conditionally pursuant to the Subscription Agreement and other than stock
options, deferred share units, or other rights granted pursuant to employment
compensation plans.
 
(9)          No Material Adverse Change.  Except as disclosed in the Inmet
Public Record as of the date of this Agreement, there has been no Material
Adverse Change since December 31, 2009.
 
(10)        Inmet Consideration Shares.
 
 
(a)
All necessary corporate action and other necessary steps and proceedings have
been taken or will have been taken at or prior to the Time of Closing by Inmet
so as to validly issue the Inmet Consideration Shares to MK Resources at the
Time of Closing.

 
 
(b)
Upon issue, the Inmet Consideration Shares will be validly issued and
outstanding as fully paid and non-assessable shares registered in the name

 

 
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of MK Resources, free and clear of all trading restrictions in Canada (except
for the four-month hold period imposed by the operation of Canadian Securities
Laws).  MK Resources will have good and registrable title to the Inmet
Consideration Shares, free of Liens.
 
 
(c)
Assuming the truth of the representations set forth in Section 3.1(10), the
offer and sale of the Inmet Consideration Shares under this Agreement are exempt
from registration under U.S. Securities Laws and exempt from the prospectus and
registration requirements under Canadian Securities Laws.

 
(11)        Inmet Public Disclosure and Regulatory Compliance.
 
 
(a)
Inmet is, and for more than four months preceding the date hereof, it has been,
a reporting issuer in good standing within the meaning of the Securities Act
(Ontario) and the other applicable Canadian Securities Laws and, and Inmet is
not, and for more than four months preceding the date hereof, it has not been,
in default of any requirement of the Securities Act (Ontario) or the regulations
thereunder and the other applicable Canadian Securities Laws.  Without limiting
the foregoing, Inmet has filed with the Canadian securities regulatory
authorities on a timely basis all forms, reports and documents required to be
filed by it under Canadian Securities Laws.

 
 
(b)
The Inmet Public Record documents filed by Inmet with the Ontario Securities
Commission and the other Canadian securities regulatory authorities complied, at
the time of their filing, with the requirements of the Securities Act (Ontario)
and all other Canadian Securities Laws and all the information and statements
contained therein were at the respective times of filing thereof true and
correct and contained no misrepresentation (as defined in the Securities Act
(Ontario).  There is no disclosure required by Canadian Securities Laws with
respect to Inmet which has not been made, and no confidential disclosure has
been made by or on behalf of Inmet under any Canadian Securities Laws.

 
 
(c)
Inmet is in full compliance with all material requirements of the Toronto Stock
Exchange applicable to listed companies.

 
 
(d)
The consolidated audited financial statements of Inmet contained in its 2009
Annual Report including the notes thereto, were prepared in accordance with
Canadian GAAP consistently applied throughout the periods covered thereby and,
subject to annual year end adjustments in the case of the unaudited interim
financial statements, present fairly in all material respects the financial
position of Inmet as at the date thereof and the results of its operations and
cash flow for the periods covered thereby.

 
 
(e)
No order suspending trading of Inmet securities has been issued or is pending
or, to the Knowledge of Inmet, threatened.

 

 
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(12)        Absence of Undisclosed Liabilities.  Inmet has no liabilities or
obligations of any nature or kind (whether accrued, absolute, contingent or
otherwise), other than (i) those reflected in the Inmet Public Record, and (ii)
those incurred since December 31, 2009 in the ordinary course of business.
 
(13)        Tax Status.  Inmet has not been advised and is not aware that it is
either a PFIC or a CFC.
 
3.3                      Survival of the Representations, Warranties and
Covenants
 
(1)           The representations and warranties set forth in Sections 3.1 and
3.2 shall each, from the Closing Date, survive the transactions herein provided
for as follows:
 
 
(a)
the representations and warranties set out in Sections 3.1(1) to 3.1(7), 3.2(1)
to 3.2(5), 3.2(7), 3.2(8) and 3.2(10) shall survive indefinitely and shall be of
unlimited duration;

 
 
(b)
any representations or warranties that prove to be false as a result of any
fraudulent misrepresentation made by the Person giving such representation or
warranty shall survive indefinitely and shall be of unlimited duration; and

 
 
(c)
the remaining representations and warranties set forth in Sections 3.1 and 3.2
shall continue in full force and effect for a period of eighteen months from the
Closing Date.

 
(2)          The covenants of the Seller Parties and Inmet set out in this
Agreement shall survive the transactions herein provided for and notwithstanding
such completion shall continue in full force and effect in accordance with the
terms thereof to the extent necessary to give commercial effect thereto.
 
ARTICLE 4 - CONDITIONS
 
4.1                      Conditions for the Benefit of Inmet
 
(1)          The sale by the Seller Parties and the purchase by Inmet of the
Purchased Shares is subject to the following conditions which are for the
exclusive benefit of Inmet to be performed or complied with at or prior to the
Time of Closing:
 
 
(a)
no temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal restraint or
prohibition shall be in effect preventing the consummation of the transactions
contemplated by this Agreement;

 
 
(b)
each of the representations and warranties of the Seller Parties in this
Agreement shall be true and correct in all material respects (except those
representations and warranties set out in Sections 3.1(1), 3.1(4), 3.1(5),

 

 
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3.1(6) and 3.1(7), which shall be true and correct without qualification) as of
the Time of Closing as though made at and as of the Time of Closing (except to
the extent such representations and warranties speak as of an earlier date);
 
 
(c)
The Seller Parties shall have performed or complied with, in all material
respects, all of the terms, covenants and conditions of this Agreement to be
performed or complied with by them at or prior to the Time of Closing;

 
 
(d)
Inmet shall be furnished with such certificates or other instruments of the
Seller Parties or of officers of any of such as Inmet or its counsel may
reasonably think necessary in order to establish that the conditions in Sections
4.1(b) and 4.1(c) have been satisfied;

 
 
(e)
each of the Seller Parties and other applicable Members of the Leucadia Group
shall have provided full releases releasing each of the applicable Las Cruces
Companies from all claims arising from any cause, matter or thing arising in
respect of any of the Las Cruces Companies at or prior to the Time of Closing
and terminating all Contracts between any of the Las Cruces Companies and any
Member of the Leucadia Group;

 
 
(f)
the purchase of the Leucadia Note shall be completed at the Closing Time in
accordance with the terms of the Leucadia Note Purchase Agreement;

 
 
(g)
the Shareholders Agreement shall be terminated by all parties thereto effective
as of the Closing Time and the Members of the Inmet Group shall be relieved of
all liability thereunder;

 
 
(h)
all necessary steps and proceedings shall have been taken to permit the
Purchased Shares to be duly and regularly transferred to and registered in the
name of Inmet;

 
 
(i)
Members of the Leucadia Group shall, at their option, either (i) have delivered
to the office of Inmet or as directed by it, all copies of Books and Records and
all data, in each case, of the Las Cruces Companies (or of the Seller Parties
relating to the Project to the extent the Seller Parties have records or data
not also in the possession of the Las Cruces Companies) relating to the Project,
in written or electronic form, in their possession or control consisting of, or
based on, Confidential Information (other than information generated by the
Seller Parties or received by the Seller Parties with respect to evaluations of
offers relating to the Project or the Las Cruces Companies) and a senior officer
of Leucadia shall have provided to Inmet a certificate to this effect, or
(ii) have undertaken in writing and made arrangements satisfactory to Inmet,
acting in a commercially reasonable manner, to complete such deliveries no later
than thirty (30) days after the Closing Date; provided that the Seller Parties
may retain copies of any such information provided to the members of the

 

 
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Board of Directors of Inmet or reasonably necessary to support Leucadia’s
accounting for its investment in the Project.
 
(2)          If any term, covenant or condition to be performed, satisfied or
complied with by the Seller Parties for the benefit of Inmet shall not have been
performed, satisfied or complied with in all material respects by the
Termination Date, and such failure to perform, satisfy or comply would give rise
to the failure of any of the conditions set forth in Section 4.1(1). Inmet may,
without limiting any other right that it may have, at its sole option:
 
 
(a)
terminate this Agreement by notice to the Seller Parties and, in such event,
Inmet shall be released from all obligations hereunder; or

 
 
(b)
waive compliance with any such term, covenant or condition in whole or in part
on such terms as may be agreed upon without prejudice to any of its rights of
termination in the event of non-performance of any other term, covenant or
condition in whole or in part.

 
4.2                      Conditions for the Benefit of the Seller Parties
 
(1)          The sale by MK Resources and the purchase by Inmet of the Purchased
Shares is subject to the following conditions which are for the exclusive
benefit of the Seller Parties to be performed or complied with at or prior to
the Time of Closing:
 
 
(a)
no temporary restraining order, preliminary or permanent injunction or other
order issued by any court of competent jurisdiction or other legal restraint or
prohibition shall be in effect preventing the consummation of the transactions
contemplated by this Agreement;

 
 
(b)
the Toronto Stock Exchange shall have approved the listing of the Inmet
Consideration Shares, and at the Time of Closing, the Inmet Consideration Shares
shall be listed and posted for trading on the Toronto Stock Exchange;

 
 
(c)
no Material Adverse Change shall have occurred since December 31, 2009;

 
 
(d)
each of the representations and warranties of Inmet forth in this Agreement
shall be true and correct in all material respects (except those representations
and warranties set out in Sections 3.2(1), 3.2(4), 3.2(5) and 3.2(10), which
shall be true and correct without qualification) as of the Time of Closing as
though made at and as of the Time of Closing (except to the extent such
representations and warranties speak as of an earlier date);

 

 
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(e)
Inmet shall have performed or complied with, in all material respects, all of
the terms, covenants and conditions of this Agreement to be performed or
complied with by it at or prior to the Time of Closing;

 
 
(f)
Inmet shall have provided to the Seller Parties such certificates, affidavits or
statutory declarations of Inmet or of officers of Inmet as the Seller Parties or
their counsel may reasonably think necessary in order to establish that the
conditions in Sections 4.2(1)(d) and 4.2(1)(e) have been satisfied;

 
 
(g)
the applicable Las Cruces Companies and Inmet in respect of the Las Cruces
Companies shall have provided full releases releasing each applicable Member of
the Leucadia Group from all claims arising from any cause, matter or thing
arising in respect of any of the Las Cruces Companies at or prior to the Time of
Closing and terminating all Contracts between any of the Las Cruces Companies
and any Member of the Leucadia Group;

 
 
(h)
the purchase of the Leucadia Note shall be completed at the Closing Time in
accordance with the terms of the Leucadia Note Purchase Agreement;

 
 
(i)
the Registration Rights Agreement shall be amended effective as of the Closing
Time to provide that the Inmet Consideration Shares shall be Eligible Securities
as defined therein;

 
 
(j)
the Leucadia Guarantee shall be terminated effective as of the Closing Time and
Leucadia shall be relieved of all liability thereunder;

 
 
(k)
the Shareholders Agreement shall be terminated by all parties thereto effective
as of the Closing Time and the Members of the Leucadia Group shall be relieved
of all liability thereunder;

 
 
(l)
all necessary steps and proceedings shall have been taken to permit the Inmet
Consideration Shares to be duly issued to and registered in the name of MK
Resources; and

 
 
(m)
Inmet shall have delivered to the Seller Parties a favourable opinion of counsel
to Inmet as to matters governed by the laws of Canada (including, without
limitation, as to the free tradability of the Inmet Consideration Shares after
the four-month hold period) and in form and substance acceptable to the Seller
Parties, acting reasonably and in good faith;

 
(2)          If any term, covenant or condition to be performed, satisfied or
complied with by Inmet for the benefit of the Seller Parties shall not have been
performed or complied with in all material respects by the Termination Date, and
such failure to perform, satisfy or comply would give rise to the failure of any
of the conditions set forth in Section 4.1(1), the Seller Parties may, without
limiting any other right that they may have, at their sole option, either:
 

 
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(a)
terminate this Agreement by notice to Inmet and, in such event, each of the
Seller Parties shall be released from all obligations hereunder; or

 
 
(b)
waive compliance with any such term, covenant or condition in whole or in part
on such terms as may be agreed upon without prejudice to any of their rights of
termination in the event of non-performance of any other term, covenant or
condition in whole or in part.

 
4.3                      Procedure for Satisfaction of the Conditions
 
                           Each of the Parties undertakes to use all
commercially reasonable endeavours to ensure the satisfaction of the conditions
set out in Sections 4.1 and 4.2 over which it has control as promptly as
possible.
 
4.4                      Termination; Effect of Termination
 
(1)           If the Closing Date does not occur on or before the Termination
Date this Agreement shall automatically terminate at 11:59 p.m. (Eastern
Standard Time) on the Termination Date.
 
(2)           If Inmet enters into, or agrees to enter into any amalgamation,
merger, plan of arrangement, or other business combination or similar
transaction which would reasonably be expected to result in a Material Adverse
Change, the Seller Parties may, without limiting any other right that they may
have, at their sole option, terminate this Agreement by notice to Inmet and, in
such event, each of the Seller Parties shall be released from all obligations
hereunder.
 
(3)           In the event of the termination of this Agreement as provided
under this Section 4.4, Sections 4.1(2)(a) or 4.2(2)(a), this Agreement shall
forthwith become null and void, except for Sections 7.1 (other than 7.1(1)) and
7.6 of this Agreement, which shall survive after the termination.
 
4.5                      Specific Performance
 
   In the event of any actual or threatened breach by any of the Parties of any
of the covenants or agreements in this Agreement, the Party who is or is to be
thereby aggrieved shall have the right to seek specific performance and
injunctive relief giving effect to its rights under this Agreement, in addition
to any other rights and remedies at law or in equity, subject to Section 6.4.
The Parties agree that any such breach or threatened breach would cause
irreparable injury, that the remedies at law for any such breach or threatened
breach, including monetary damages, are inadequate compensation for any loss and
that any defense in any action for specific performance that a remedy at law
would be adequate is waived.
 

 
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ARTICLE 5 - COVENANTS
 
5.1                      Continued Securities Compliance
 
   Inmet will use its commercially reasonable efforts to maintain its status as
a reporting issuer in good standing and not in default within the meaning of the
Securities Act (Ontario) and other applicable Canadian Securities Laws, and to
maintain the listing of the Inmet common shares on the Toronto Stock Exchange,
until Leucadia ceases to own, directly or indirectly, at least 5% of the Inmet
common shares.  (Nothing in this Section shall prohibit Inmet from entering into
a merger, reorganization, or other transaction which has been approved by the
Inmet Board in the exercise of its fiduciary duties.)
 
5.2                      Tax Status
 
   For as long as Leucadia or an Affiliate is a shareholder of Inmet, if Inmet
becomes aware that it is a PFIC or a CFC, Inmet shall promptly notify
Leucadia.  Inmet shall provide all information reasonably requested by Leucadia
from time to time in order to determine whether Inmet is a PFIC or a CFC.
 
ARTICLE 6 - INDEMNIFICATION
 
6.1                      Seller Parties’ Indemnities
 
Subject to the limitations set out in Sections 6.4 and 6.5, each of the Seller
Parties shall jointly and severally indemnify and save harmless Inmet from and
against all Losses directly or indirectly suffered by it resulting from any
breach of any covenant of the Seller Parties contained in this Agreement or from
any inaccuracy or misrepresentation in any representation or warranty set forth
in Sections 3.1 at any time that such covenant, representation or warranty, as
the case may be, is in effect hereunder provided that the claim for
indemnification is asserted by written notice during such period.
 
6.2                      Indemnity of Inmet
 
   Subject to the limitations set out in Sections 6.4 and 6.6, Inmet shall
indemnify and save harmless the Seller Parties from and against all Losses
directly or indirectly suffered by either of them resulting from any breach of
any covenant of Inmet contained in this Agreement or from any inaccuracy or
misrepresentation in any representation or warranty set forth in Section 3.2 at
any time that such covenant, representation or warranty, as the case may be, is
in effect hereunder, provided that the claim for indemnification is asserted by
written notice during such period.
 
6.3                      Commissions
 
   The Seller Parties shall indemnify and save harmless Inmet from and against
any Claims whatsoever for any commission or other remuneration payable or
alleged to be payable to any Person in respect of the sale and purchase of the
Purchased
 

 
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Shares where such Person purports to act or has acted for either of the Seller
Parties in connection with the sale of the Purchased Shares.  Inmet shall
indemnify and save harmless the Seller Parties from and against any Claims
whatsoever for any commission or other remuneration payable or alleged to be
payable to any Person in respect of the sale and purchase of the Purchased
Shares, where such Person purports to act or has acted for Inmet in connection
with the sale of the Purchased Shares.
 
6.4                      Exclusive Remedies
 
   Following the Closing, the rights of indemnification set out in this Article
6  and Section 4.5 shall be the sole and exclusive remedies of the Parties under
or in connection with this Agreement and shall be exclusive of all other
remedies to which such parties would otherwise be entitled at law or in
equity.  (For greater certainty, only the remedies set out in Article 4 and
Article 7  will be available, to the extent they apply, if the Closing does not
occur.)
 
6.5                      Limitation of Liability of the Seller Parties
 
(1)           Neither of the Seller Parties shall have any liability in respect
of any Claim made by Inmet arising out of any breach of any covenant of the
Seller Parties contained in this Agreement or from any inaccuracy or
misrepresentation in any representation or warranty set forth in Sections 3.1 or
any Claim for indemnification hereunder unless and until the liability of the
Seller Parties in respect of that Claim, when aggregated with the liability of
the Seller Parties in respect of all other such Claims exceeds $2,000,000, in
which event the Seller Parties shall be liable for the full amount of such
Claims.
 
(2)           The aggregate liability of the Seller Parties in respect of all
Claims under this Agreement shall not in any circumstances exceed $120,000,000.
 
6.6                      Limitation of Liability of Inmet
 
(1)           Inmet shall not have any liability in respect of any Claim made by
the Seller Parties arising out of any breach of any covenant of Inmet contained
in this Agreement or from any inaccuracy or misrepresentation in any
representation or warranty set forth in Section 3.2 or any Claim for
indemnification hereunder unless and until the liability of Inmet in respect of
that Claim, when aggregated with the liability of Inmet in respect of all other
such Claims, exceeds $2,000,000, in which event Inmet shall be liable for the
full amount of such Claims.
 
(2)           The aggregate liability of Inmet in respect of all Claims under
this Agreement shall not in any circumstances exceed $120,000,000.
 
6.7                      Notice of and Defence of Third Party Claims
 
(1)           If an Indemnified Party receives written notice of the
commencement or assertion of any Third Party Claim in respect of which the
Indemnified Party believes the Indemnifying Party has liability under this
Agreement, the
 

 
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Indemnified Party shall give the Indemnifying Party reasonably prompt written
notice thereof, but in any event no later than thirty (30) days after receipt of
the initial notice of such Third Party Claim, unless a shorter procedural period
applies in respect of such Third Party Claim, in which case notice shall be
given before the expiry of one half of such period.  To the extent reasonable
and practical given the information readily available to the Indemnified Party,
such notice to the Indemnifying Party shall describe the Third Party Claim in
reasonable detail and shall indicate (without prejudice to the Indemnified
Party’s rights) the estimated amount of the Loss that has been or may be
sustained by the Indemnified Party in respect thereof, provided that the failure
to give such notice within such time period shall not reduce the Indemnified
Party’s rights hereunder, except to the extent of any actual prejudice suffered
as a result of such failure.
 
(2)           The Indemnifying Party shall have the right, by giving notice to
that effect to the Indemnified Party not later than thirty (30) days after
receipt of such notice of such Third Party Claim and subject to the rights of
any insurer or other Third Party having potential liability therefor, to elect
to assume the defence of any Third Party Claim at the Indemnifying Party’s own
expense and by the Indemnifying Party’s own counsel, provided that the
Indemnifying Party shall not be entitled to assume the defence of any Third
Party Claim: (i) alleging any criminal or quasi-criminal wrongdoing (including
fraud), (ii) which impugns the reputation of the Indemnified Party or
(iii) where the Third Party making the Third Party Claim is a Governmental Body.
 
(3)           Prior to settling or compromising any Third Party Claim in respect
of which the Indemnifying Party has the right to assume the defence, the
Indemnifying Party shall obtain the consent of the Indemnified Party regarding
such settlement or compromise, which consent shall not be unreasonably withheld
or delayed by the Indemnified Party.  In addition, the Indemnified Party shall
be entitled to participate in (but not control) the defence of any Third Party
Claim (and in so doing may retain its own counsel) at the cost and expense of
the Indemnified Party.  If the Indemnified Party does not consent to a
settlement or compromise in respect of a Third Party Claim proposed by the
Indemnifying Party, and the Losses in respect of such Third Party Claim, as
determined by a final, non-appealable order or judgment, exceed the amount of
Losses under the proposed settlement or compromise (the “Settlement Amount”),
then the indemnification to which the Indemnified Party is entitled under this
Article 6 in respect of such Third Party Claim shall equal the Settlement
Amount.
 
(4)           With respect to any Third Party Claim in respect of which the
Indemnified Party has given notice to the Indemnifying Party pursuant to this
Section 6.7 and in respect of which the Indemnifying Party is not entitled to
assume the defence or has not elected to do so, the Indemnifying Party may
participate in (but not control) such defence assisted by counsel of its own
choosing at the Indemnifying Party’s sole cost and expense and, prior to
settling or compromising any such Third Party Claim, the Indemnified Party shall
obtain the consent of the
 

 
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Indemnifying Party regarding such settlement or compromise, which consent shall
not be unreasonably withheld or delayed by the Indemnifying Party.
 
(5)           At their own cost and expense, the Indemnifying Party and
Indemnified Parties shall use all reasonable efforts to make available to the
Party which is undertaking and controlling the defence of any Third Party Claim:
 
 
(a)
those employees whose assistance, testimony or presence is necessary to assist
such Party in evaluating and in defending any Third Party Claim; and

 
 
(b)
all documents, records and other materials in the possession of such Party
reasonably required by such Party for its use in defending any Third Party
Claim,

 
and shall otherwise co-operate with the Party defending such Third Party Claim.
 
(6)           If the Indemnifying Party elects to assume the defence of any
Third Party Claim as provided in Section 6.7(2) and fails to take reasonable
steps necessary to defend diligently such Third Party Claim within 30 days after
receiving notice from the Indemnified Party that the Indemnified Party bona fide
believes on reasonable grounds that the Indemnifying Party has failed to take
such steps, the Indemnified Party may, at its option, elect to assume the
defence of and to compromise or settle the Third Party Claim assisted by counsel
of its own choosing and the Indemnifying Party shall be liable for all
reasonable costs and expenses paid or incurred in connection therewith;
provided, that prior to settling or compromising any such Third Party Claim, the
Indemnified Party shall have obtained the consent of the Indemnifying Party
regarding such settlement or compromise, which consent shall not be unreasonably
withheld  or delayed by the Indemnifying Party.
 
(7)           Upon making a full Loss Payment, the Indemnifying Party shall,
subject to the rights of any insurers and to the extent of such Loss Payment, be
subrogated to all rights of the Indemnified Party against any third party in
respect of the Loss to which the Loss Payment relates.
 
(8)           Any Person providing indemnification pursuant to the provisions of
this Article 6 is referred to herein as an “Indemnifying Party”, and any Person
entitled to be indemnified pursuant to the provisions of this Article 6 is
referred to herein as an “Indemnified Party”.
 
6.8                      Calculation of Damages
 
   The Losses suffered by any Party hereto shall be calculated after giving
effect to the receipt by the Indemnified Party of any recoveries from third
parties, including insurance recoveries (it being understood and agreed that the
Indemnified Parties shall not be required to seek insurance recoveries in
respect of Losses to be indemnified hereunder), and shall take into account any
Tax effects.  In the event any
 

 
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insurance proceeds are actually realized by an Indemnified Party subsequent to
the receipt by such Indemnified Party of a Loss Payment hereunder in respect of
the Claims to which such insurance proceeds relate, appropriate refunds shall be
made promptly to the Indemnifying Party regarding the amount of such Loss
Payment.
 
6.9                      Mitigation
 
   The Seller Parties and Inmet shall cooperate with each other with respect to
resolving any Claim or Loss with respect to which one Party is obligated to
indemnify the other Party hereunder, including by making commercially reasonable
efforts to mitigate or resolve any such Claim or Loss.
 
6.10                      No Duplication
 
   Notwithstanding anything in this Agreement, any amounts payable pursuant to
the indemnification obligations under this Article 6 shall be paid without
duplication, and in no event shall any Party be indemnified under different
provisions of this Agreement for the same Losses.
 
6.11                      Tax Treatment of Indemnity Payments
 
   The Seller Parties and Inmet agree to treat any indemnity payment made
pursuant to this Article 6 as an adjustment to the purchase price for all income
tax purposes.
 
ARTICLE 7 - GENERAL
 
7.1                      Public Announcements and Confidential Information
 
(1)           No public announcement or press release concerning the sale and
purchase of the Purchased Shares shall be made by any of the Seller Parties or
Inmet except as may be required by Applicable Law or the rules of any stock
exchange on which their respective shares are listed.  Each Party Group will
advise and consult with the other prior to any such required announcement or
disclosure.
 
(2)           The Seller Parties shall, and shall procure that each Member of
the Leucadia Group shall, keep all Confidential Information confidential and
will not, without the prior written consent of Inmet (subject to Section
7.1(3)), disclose in any manner, in whole or in part, or use, directly or
indirectly, any Confidential Information for any purpose except in connection
with the transactions contemplated by this Agreement. The Seller Parties shall
advise the shareholders, directors, officer, employees, agents, advisors and
other representatives of the Members of the Leucadia Group who possess
Confidential Information of the obligation to keep such Confidential Information
confidential.
 
(3)           The Seller Parties may disclose Confidential Information if
required by Applicable Law or requested by legal process or regulatory authority
to do so. If any of the Seller Parties is required by Applicable Law or
requested by legal
 

 
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process or regulatory authority to disclose any Confidential Information, such
Party will give prompt notice to Inmet of that fact so that Inmet may seek a
protective order or other remedy or waive compliance with this Agreement and,
further, such Party will co-operate in any efforts to obtain a protective order
or other remedy at the expense of the Party or Parties such protective order or
remedy.  If a protective order or other remedy is not obtained or compliance
with this Agreement is waived, such Party will disclose only that portion of the
Confidential Information which is required or requested.
 
(4)           Each of the Seller Parties and Inmet acknowledges that the other
Party Group may not have an adequate remedy at law for damages and would be
irreparably harmed if the covenants contained in this Section 7.1 are not
performed.  Accordingly, the Parties agree that, in addition to any other
remedies they may have in law or equity, the other Party Group is entitled to
injunctive relief to prevent breaches of, and to specifically enforce, this
Section 7.1.
 
7.2                      Information for Reporting Requirements
 
   Following the Closing Inmet shall use reasonable commercial effects to
provide any information with respect to Inmet that may be reasonably required by
Leucadia to enable it to comply with the accounting and disclosure requirements
of the SEC as in effect from time to time, which information shall be provided
to Leucadia promptly upon request therefor (such information shall be provided
without charge if it is information prepared by Inmet in the ordinary course,
and at Leucadia’s cost, if such information is not normally prepared by Inmet,
including reasonable compensation for management time).  Inmet will advise
Leucadia prior to taking any changes to its capitalization which reasonably
could be expected to raise Leucadia’s interest in Inmet to 20% or more (or such
lower percentage such that Leucadia would be required to provide information as
to Inmet in order for Leucadia to be in compliance with the SEC requirements
under Applicable Law at the relevant time), and, prior to effecting or agreeing
to effect any such changes to Inmet’s capitalization, Inmet will permit Leucadia
to reduce its interest in Inmet below the relevant threshold or, to the extent
such reduction is not possible at the relevant time, delay the proposed change
in Inmet’s capitalization until such time as the reduction of Leucadia’s
interest can be completed.
 
7.3                      Further Assurances
 
   Each of the Parties shall from time to time execute and deliver all such
further documents and instruments and do all acts and things as any other Party
may, either before or after the Closing Date, reasonably require to effectively
carry out or better evidence or perfect the full intent and meaning of this
Agreement.
 
7.4                      Time of the Essence
 
   Time shall be of the essence of this Agreement.
 

 
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7.5                      Dispute Resolution
 
   When any dispute arises, management of each of the Parties shall meet and
confer in a good faith effort to resolve the same.  If the dispute cannot be
resolved within two weeks,  the Chief Executive Officer of each of the Parties
shall meet and confer in a good faith effort to resolve the dispute.  If the
dispute cannot be resolved within two weeks from the time it is referred to the
Chief Executive Officers, the Parties agree to try in good faith to settle the
dispute by mediation administered by the American Arbitration Association under
its Commercial Mediation Procedures before resorting to arbitration, litigation
or some other dispute resolution procedure.
 
7.6                      Fees and Expenses
 
   Each of the Parties shall pay their respective legal, accounting and other
costs and expenses incurred in connection with the preparation, execution and
delivery of this Agreement and all documents and instruments executed pursuant
hereto and any other costs and expenses whatsoever and howsoever incurred.
 
7.7                      Benefit of the Agreement
 
   This Agreement shall enure to the benefit of and be binding upon the
respective successors and permitted assigns of the Parties.
 
7.8                      Invalidity of Provisions
 
   Each of the provisions contained in this Agreement is distinct and severable
and a declaration of invalidity or unenforceability of any such provision or
part thereof by a court of competent jurisdiction shall not affect the validity
or enforceability of any other provision hereof.  To the extent permitted by
Applicable Law, the Parties waive any provision of law which renders any
provision of this Agreement invalid or unenforceable in any respect.
 
7.9                      Entire Agreement
 
   This Agreement, together with the Transaction Documents and the Registration
Rights Agreement, constitute the entire agreement between the Parties with
respect to the subject matter hereof and cancel and supersede any prior
understandings and agreements between the Parties with respect thereto.  There
are no representations, warranties, terms, conditions, undertakings or
collateral agreements, express, implied or statutory, between the Parties other
than as expressly set forth in this Agreement.
 
7.10                    Amendments and Waiver
 
   No modification of or amendment to this Agreement shall be valid or binding
unless set forth in writing and duly executed by the Parties and no waiver of
any breach of any term or provision of this Agreement shall be effective or
binding unless made in writing and signed by the Party purporting to give the
same and, unless otherwise provided, shall be limited to the specific breach
waived.
 

 
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7.11                    Assignment
 
   This Agreement may not be assigned by a Party without the written consent of
the other Parties, except to an Affiliate of the assigning Party, provided that
such Affiliate enters into a written agreement with the other Parties to be
bound by the provisions of this Agreement in all respects and to the same extent
as the assigning Party is bound and provided that the assigning Party shall
continue to be bound by all the obligations hereunder as if such assignment had
not occurred and perform such obligations to the extent that such Affiliate
fails to do so.  Notwithstanding the foregoing, Inmet shall not be relieved of
its obligation to issue the Inmet Consideration Shares following any permitted
assignment by Inmet hereunder.
 
7.12                    Notices
 
   Any demand, notice or other communication to be given in connection with this
Agreement shall be given in writing and shall be given by personal delivery or
by facsimile addressed to the recipient as follows:
 
To Leucadia or MK Resources:
 
Leucadia National Corporation
315 Park Avenue South
New York, New York, 10010
Attention:      President
Facsimile:      (212) 598-3245
 
with a copy to:
 
Weil, Gotshal & Manges LLP
767 5th Avenue
New York, New York  10153
Attention:      Andrea A. Bernstein
Facsimile:      (212) 310-8007
 
To Inmet:
 
Inmet Mining Corporation
330 Bay Street, Suite 1000
Toronto, Ontario
M5H 2S8
Attention:      Steve Astritis
         Vice-President, General Counsel
Facsimile:      (416) 368-4692
 

 
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with a copy to:
 
Torys LLP
Suite 3000
79 Wellington Street West
Toronto, Ontario
M5K 1N2
Attention:      Chris Fowles
Facsimile:      (416) 865-7380
 
or to such other address, individual or facsimile number as may be designated by
notice given by one Party to another.  Any demand, notice or other communication
given by personal delivery shall be conclusively deemed to have been given on
the day of actual delivery thereof and, if given by electronic communication, on
the day of transmittal thereof if given during the normal business hours of the
recipient and on the Business Day during which such normal business hours next
occur if not given during such hours.
 
7.13                   Governing Law
 
  This Agreement shall be governed by and construed in accordance with the laws
of the State of New York.
 
7.14                   Attornment
 
  The federal courts sitting in New York County shall have jurisdiction to
entertain any action arising under this Agreement and each of the Parties to
this Agreement hereby attorns to the jurisdiction of the federal courts sitting
in New York County.
 
7.15                    Counterparts and Faxed Signatures
 
  This Agreement may be executed in two or more counterparts, all of which,
taken together, shall be regarded as one and the same Agreement.  Counterparts
may be executed in faxed form and the Parties adopt any signatures received by a
receiving fax machine as original signatures of the Parties, provided, however,
that any Party providing its signature in such a manner shall promptly forward
to the other Parties an original of the signed signature page of this Agreement
which was so faxed.
 

 
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IN WITNESS WHEREOF the parties have executed this Agreement.
 

 
INMET MINING CORPORATION
   
Per:
“Steve Astritis”
 
Steve Astritis, Vice-President, General Counsel and Secretary
         
LEUCADIA NATIONAL CORPORATION
   
Per:
“Thomas E. Mara”
 
Thomas E. Mara, Executive Vice-President
       
MK RESOURCES LLC
   
Per:
“Thomas E. Mara”
 
Thomas E. Mara, President
       

 
INMET FINANCE COMPANY SARL
   
Per:
“Emmanuel Reviellaud”
 
Emmanuel Reviellaud, Manager
       

 

 
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