Document:

mm11-3010_ex102.htm

 

EXHIBIT 10.2

 

EXECUTION COPY

 

 

INMET MINING CORPORATION

 

- AND -

 

 

LEUCADIA NATIONAL CORPORATION

 

- AND -

 

 

INMET FINANCE COMPANY SARL

 

 

 

NOTE PURCHASE AGREEMENT

 

 

 

 

November 29, 2010

 

 

  

  

  

 

 

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 Leucadia.

	
9

	
3.2

	
Representations and Warranties of the Purchaser Parties

	
12

	
3.3

	
Survival of the Representations, Warranties and Covenants

	
15

	  	  
	
Article 4 - CONDITIONS

	
15

	
4.1

	
Conditions for the Benefit of the Purchaser Parties

	
15

	
4.2

	
Conditions for the Benefit of Leucadia

	
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

	
Indemnity of Leucadia

	
20

	
6.2

	
Purchaser Parties’ Indemnities

	
20

	
6.3

	
Commissions

	
21

	
6.4

	
Exclusive Remedies

	
21

	
6.5

	
Limitation of Liability of Leucadia

	
21

	
6.6

	
Limitation of Liability of the Purchaser Parties

	
21

	
6.7

	
Notice of and Defence of Third Party Claims

	
22

	
6.8

	
Calculation of Damages

	
24

	
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

	
7.2

	
Information for Reporting Requirements

	
25

 

  

  

  

- ii -

 

 

	
7.3

	
Further Assurances

	
25

	
7.4

	
Time of the Essence

	
26

	
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

	
27

	
7.11

	
Assignment

	
27

	
7.12

	
Notices

	
27

	
7.13

	
Guarantee by Inmet

	
28

	
7.14

	
Governing Law

	
28

	
7.15

	
Attornment

	
28

	
7.16

	
Counterparts and Faxed Signatures

	
29

 

 

  

  

  

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 -

 

INMET FINANCE COMPANY SARL (formerly IMUS LLC), a limited liability company existing under the laws of the Luxembourg

 

(“IFC”),

 

WHEREAS Leucadia is the holder of the Leucadia Note (as defined below);

 

AND WHEREAS IFC is a wholly-owned subsidiary of Inmet;

 

AND WHEREAS Leucadia desires to sell and IFC desires to purchase the Leucadia Note, 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;

 

 

 

  

  

  

 

 

 

“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;

 

“BV I Share Purchase Agreement” means the agreement to be entered into on the date hereof between Inmet, Leucadia and MK Resources providing for the purchase by Inmet of 16,349,535 shares in the capital of BV I;

 

“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 

 

 

  

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securities laws and the published policy statements of the Canadian securities regulatory authorities;

 

“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 

 

 

 

  

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shareholders of such Corporation that are sufficient to elect a majority of the directors of such Corporation; and

 

	
  

	
(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 Cash Consideration” means $150,000,000 to be paid to Leucadia as partial consideration for the Leucadia Note;

 

“Inmet Common Share Reorganization” has the meaning attributed to such term in Section 2.1(3);

 

“IFC Consideration” means the Inmet Consideration Shares and the IFC Cash Consideration;

 

“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;

 

 

 

  

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“Knowledge of Leucadia” means the knowledge, after due inquiry, of Thomas E. Mara;

 

“Knowledge of the Purchaser Parties” means the knowledge, after due inquiry, of the officers and senior management of Inmet and IFC;

 

“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;

 

“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, Leucadia and the Purchaser 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;

 

“Purchaser Parties” means Inmet and IFC;

 

“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;

 

“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 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;

 

 

 

  

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“Third Party” means any Person other than a Party and its Affiliates;

 

“Third Party Claim” means any Claim asserted by a Third Party against the Purchaser Parties or Leucadia, 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 Leucadia Note by Leucadia to IFC in exchange for the IFC Consideration pursuant to the terms of this Agreement;

 

“Transaction Documents” means: (i) this Agreement, (ii) the BV I Share Purchase Agreement, (iii) all agreements and instruments entered into or to be entered into pursuant to this Agreement and the BV I Share 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)      Leucadia agrees to sell and IFC agrees to purchase the Leucadia Note at the Time of Closing, free and clear of all Liens.

 

(2)      In consideration for the Leucadia Note, Inmet shall issue from treasury to Leucadia 378,837 previously unissued Inmet common shares (as such amount may be adjusted pursuant to Section 2.1(4)), the “Inmet Consideration Shares”) and IFC shall pay to Leucadia the IFC Cash Consideration.

 

(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.

 

 

 

  

8

  

 

2.2                  Closing

 

(1)      Except as provided in Section 2.2(2)(i) below, the sale and purchase of the Leucadia Note shall be completed at the Time of Closing at the offices of Torys LLP in Toronto, Ontario.

 

(2)      At Closing, Leucadia shall assign the Leucadia Note to IFC, and (i) Inmet shall deliver to Leucadia share certificates representing the Inmet Consideration Shares registered in the name of Leucadia or as Leucadia may direct, and (ii) IFC shall deliver to Leucadia the IFC Cash Consideration by electronic transfer of immediately available funds to an account to be notified by Leucadia to IFC.

 

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

 

3.1                  Representations and Warranties of Leucadia.

 

In order to induce Inmet to enter into this Agreement, Leucadia represents and warrants to the Purchaser Parties (and acknowledges that the Purchaser Parties are relying on these representations and warranties in connection with the execution of this Agreement and the transactions contemplated hereby) that:

 

(1)      Due Incorporation.  Leucadia has been duly incorporated and organized under the laws of the jurisdiction 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.  Leucadia 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 Leucadia 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 Leucadia 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 Leucadia and, assuming due authorization, execution and delivery thereof by the other parties thereto other than Leucadia, constitute, or will constitute, valid and binding obligations of Leucadia enforceable against it (to the extent that it is a party 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 subject to general principles of equity, whether considered in a proceeding at law or in equity.

 

  

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(4)      No Bankruptcy.  There has not been any petition or application filed by Leucadia or, to the Knowledge of Leucadia, a Third Party, or any proceeding commenced which has not been discharged, by or, to the Knowledge of Leucadia, against Leucadia or with respect to or affecting any assets of Leucadia under any Applicable Law, relating to bankruptcy, insolvency, readjustment of debt or creditors’ rights; Leucadia is able to meet its obligations as they generally become due, and no assignment has been made by Leucadia for the benefit of creditors.

 

(5)      No Dissolution.  No meeting has been convened or resolution or petition proposed or order made for Leucadia to be wound up or dissolved.

 

(6)      Right to Transfer Leucadia Note.  Leucadia is the sole holder of the Leucadia Note and has good and marketable title thereto.  The Leucadia Note is 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 IFC of the Leucadia Note.  At the Time of Closing, Leucadia will have full legal right, power and authority to transfer the Leucadia Note to IFC free of Liens.

 

(7)      No Options.  There is no:

 

	
  

	
(a)

	
outstanding subscription, right, option, warrant, call, commitment or agreement (other than this Agreement) which obliges Leucadia to sell, transfer, assign, pledge, charge, mortgage or in any other way dispose of or encumber the Leucadia Note or any interest therein; or

 

	
  

	
(b)

	
right of pre-emption, right or obligation to acquire, redeem or convert, over or affecting the Leucadia Note,

 

and the Leucadia has not agreed to give, create or enter into any of the foregoing.

 

(8)      Leucadia Note.  No Person has any agreement or option or any right or privilege (whether by law or contract) capable of becoming an agreement or option for the acquisition of any interest in the Leucadia Note (other than Inmet pursuant to this Agreement).

 

(9)      Non-Violation.  The execution and delivery by Leucadia of the Transaction Documents to which it is 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 Leucadia, (ii) violate, conflict with or result in the breach, termination or modification of, or otherwise give any other Person 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 Leucadia is a party or by which it or its properties or other assets may be bound, (iii) result in the creation of any Lien

 

 

 

  

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upon the Leucadia Note, or (iv) violate any Applicable Law applicable to Leucadia or the Leucadia Note.

 

(10)    Litigation.  To the Knowledge of Leucadia, there are (i) no outstanding judgments, orders, decrees, writs, injunctions, decisions, rulings or awards against, with respect to, or in any manner affecting the Leucadia Note.

 

(11)    Acquisition of Inmet Consideration Shares.  Leucadia 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.  Leucadia 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.  Leucadia 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 Leucadia shall provide Inmet with an opinion of counsel reasonably acceptable to Inmet).  Leucadia understands and acknowledges that the Inmet Consideration Shares are “restricted securities” as defined in Rule 144 of the U.S. Securities Act.  Leucadia 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, 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.

 

  

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3.2                  Representations and Warranties of the Purchaser Parties

 

In order to induce Leucadia to enter into this Agreement each of the Purchaser Parties jointly and severally represents and warrants to Leucadia (and acknowledges that Leucadia 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 Purchaser Parties is organized under the laws of its jurisdiction of existence and validly exists thereunder.  Each of the Purchaser Parties 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.  Each of the Purchaser 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 Purchaser Parties and the performance of its obligations thereunder have been duly authorized by all necessary corporate actions on its part, provided the execution and delivery of this Agreement by IFC is subject to confirmation and ratification by the board of directors of IFC.  Such execution, delivery and performance by each of the Purchaser 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 to which each of the Purchaser Parties is a party have been or will be, as applicable, duly executed and delivered by each of the Purchaser Parties and constitute, or will constitute when executed and delivered by each of the Purchaser Parties and by the other parties thereto, valid and binding obligations of each of the Purchaser Parties enforceable against each of the Purchaser Parties that are parties thereto 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 a Purchaser Party or any proceeding commenced which has not been discharged, by a Purchaser Party or, to the Knowledge of the Purchaser Parties, against a Purchaser Party, or with respect to or affecting any assets of a Purchaser Party

 

  

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under any Applicable Law relating to bankruptcy, insolvency, reorganization, fraudulent transfer, compromise, arrangements, insolvency, readjustment of debt or creditors’ rights, and no assignment has been made by a Purchaser Party for the benefit of creditors.

 

(5)      No Dissolution.  No meeting has been convened or resolution proposed or petition proposed or order made for a Purchaser Party to be wound up or dissolved.

 

(6)      Non-Violation.  The execution and delivery by each of the Purchaser Parties 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 the Purchaser Parties, (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 any of the Purchaser Parties 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 the Purchaser Parties or (iii) violate any Applicable Law applicable to the Purchaser Parties, 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.

 

  

13

  

(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 Leucadia 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 of Leucadia, free and clear of all trading restrictions in Canada (except for the four-month hold period imposed by the operation of Canadian Securities Laws).  Leucadia 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(11), 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

 

  

14

  

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.

 

(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 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 Leucadia and the Purchaser Parties 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 the Purchaser Parties

 

(1)        The sale by Leucadia and the purchase by IFC of the Leucadia Note is subject to the following conditions which are for the exclusive benefit of the

 

  

15

  

Purchaser 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)

	
each of the representations and warranties of the Leucadia 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), 3.1(6), 3.1(7) and 3.1(8), 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)

	
Leucadia 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)

	
the Purchaser Parties shall be furnished with such certificates or other instruments of Leucadia or of officers thereof as the Purchaser Parties or their 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)

	
Leucadia 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 by Inmet of the BV I shares shall be completed at the Closing Time in accordance with the terms of the BV I Share 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 Leucadia Note to be duly assigned to IFC;

 

	
  

	
(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 Leucadia relating to the Project to the extent Leucadia has 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

 

  

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consisting of, or based on, Confidential Information (other than information generated by Leucadia or received by Leucadia 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 Leucadia may retain copies of any such information provided to the members of the 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 Leucadia for the benefit of the Purchaser Parties 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). The Purchaser Parties may, without limiting any other right that it may have, at their sole option:

 

	
  

	
(a)

	
terminate this Agreement by notice to Leucadia and, in such event, each of the Purchaser 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 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 Leucadia

 

(1)        The sale by Leucadia and the purchase by IFC of the Leucadia Note is subject to the following conditions which are for the exclusive benefit of Leucadia 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 the Purchaser Parties forth in this Agreement shall be true and correct in all material respects (except 

 

 

 

  

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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);

 

	
  

	
(e)

	
the Purchaser 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 it at or prior to the Time of Closing;

 

	
  

	
(f)

	
the Purchaser Parties shall have provided to Leucadia such certificates, affidavits or statutory declarations of the Purchaser Parties or of officers of the Purchaser Parties as Leucadia or its 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 by Inmet of the BV I shares shall be completed at the Closing Time in accordance with the terms of the BV I Share 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 Leucadia; and

 

	
  

	
(m)

	
Inmet shall have delivered to Leucadia 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 Leucadia, acting reasonably and in good faith;

 

  

18

  

(2)        If any term, covenant or condition to be performed, satisfied or complied with by the Purchaser Parties for the benefit of Leucadia 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), Leucadia may, without limiting any other right that they may have, at their sole option, either:

 

	
  

	
(a)

	
terminate this Agreement by notice to the Purchaser Parties and, in such event, Leucadia 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, Leucadia 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, Leucadia 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 

 

 

  

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for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.

 

 

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                    Indemnity of Leucadia

 

Subject to the limitations set out in Sections 6.4 and 6.5, Leucadia shall indemnify and save harmless the Purchaser Parties from and against all Losses directly or indirectly suffered by either of them resulting from any breach of any covenant of Leucadia 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                    Purchaser Parties’ Indemnities

 

Subject to the limitations set out in Sections 6.4 and 6.6, each of the Purchaser Parties shall jointly and severally indemnify and save harmless Leucadia from and against all Losses directly or indirectly suffered by it resulting from any breach of any covenant of the Purchaser Parties 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.

 

  

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6.3                    Commissions

 

Leucadia shall indemnify and save harmless the Purchaser 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 Leucadia Note where such Person purports to act or has acted for Leucadia in connection with the sale of the Leucadia Note.  The Purchaser Parties shall indemnify and save harmless Leucadia 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 Leucadia Note, where such Person purports to act or has acted for either of the Purchaser Parties in connection with the sale of the Leucadia Note.

 

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 Leucadia

 

(1)        Leucadia shall not have any liability in respect of any Claim made by the Purchaser Parties arising out of any breach of any covenant of Leucadia 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 Leucadia in respect of that Claim, when aggregated with the liability of Leucadia in respect of all other such Claims exceeds $2,000,000, in which event Leucadia shall be liable for the full amount of such Claims.

 

(2)        The aggregate liability of Leucadia in respect of all Claims under this Agreement shall not in any circumstances exceed $20,000,000.

 

6.6                    Limitation of Liability of the Purchaser Parties

 

(1)        Neither of the Purchaser Parties shall have any liability in respect of any Claim made by Leucadia arising out of any breach of any covenant of the Purchaser Parties 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 the Purchaser Parties in respect of that Claim, when aggregated with the liability of the Purchaser Parties in respect of all other such Claims, exceeds $2,000,000, in which event the Purchaser Parties shall be liable for the full amount of such Claims.

 

  

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(2)        The aggregate liability of the Purchaser Parties in respect of all Claims under this Agreement shall not in any circumstances exceed $20,000,000.

 

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 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.

 

  

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(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 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”.

 

  

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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 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

 

Leucadia and the Purchaser Parties 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

 

Leucadia and the Purchaser Parties 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 Leucadia Note shall be made by any of Leucadia or the Purchaser Parties 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)        Leucadia 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. Leucadia shall advise the shareholders, directors, officer, employees, 

 

 

  

24

  

 

 

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)        Leucadia may disclose Confidential Information if required by Applicable Law or requested by legal process or regulatory authority to do so.  If Leucadia is required by Applicable Law or requested by legal process or regulatory authority to disclose any Confidential Information, it 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 Leucadia and the Purchaser Parties 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,

 

  

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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.

 

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.

 

  

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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.

 

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:

 

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

  

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To Inmet or to IFC:

 

(c/o) Inmet Mining Corporation

330 Bay Street, Suite 1000

Toronto, Ontario

M5H 2S8

 

Attention:        Steve Astritis

       Vice-President, General Counsel

Facsimile:        (416) 368-4692

 

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                  Guarantee by Inmet

 

Inmet unconditionally and irrevocably guarantees the purchase of the Leucadia Note contemplated by Section 2.1.

 

7.14                  Governing Law

 

This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

7.15                  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.

 

  

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7.16                  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

	  	  
	  	  
	
INMET FINANCE COMPANY SARL

	  	  
	
Per:

	
“Sunny Lowe”

	  	
Sunny Lowe, Director

	  	  
	  	  

 

 

  

30mv11-3010_ex103.htm

Exhibit 10.3

 

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

BY AND AMONG

 

INMET MINING CORPORATION

 

AND

 

THE INVESTORS NAMED HEREIN

 

_____________________________________

 

Dated as of August 22, 2005

 

_____________________________________

 

 

  

  

  

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT dated as of August 22, 2005 (this “Agreement”) by and among INMET MINING CORPORATION, a corporation incorporated under the federal laws of Canada (the “Corporation”), and the shareholders of the Corporation listed on the signature page hereto or who become parties hereto in accordance with the provisions hereof (each an “Investor” and, collectively, the “Investors”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to a Share Purchase Agreement (the “Purchase Agreement”), dated as of May 2, 2005, by and between the Corporation, MK Resources Company (“MK Resources”) and Leucadia National Corporation (“Leucadia”), MK Resources shall receive 5,600,000 common shares of the Corporation in exchange for 70% of the issued shares of MK Gold Exploration B.V. or 70% of the equity interests of such other entity mutually acceptable to MK Resources, Leucadia and Inmet, owning, directly or indirectly, 100% of the Las Cruces Companies (as defined in the Purchase Agreement); and

 

WHEREAS, the Corporation has agreed to grant the Investors certain registration rights; and

 

WHEREAS, the Corporation and the Investors desire to define the registration rights of the Investors on the terms and subject to the conditions herein set forth.

 

NOW, THEREFORE, as an inducement to the Investors to consummate the transactions contemplated by the Purchase Agreement and in consideration of the foregoing premises and for other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereby agree as follows:

 

ARTICLE I

 

CERTAIN DEFINITIONS

 

1.1 Defined Terms.  As used in this Agreement, the following terms have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined):

 

“Affiliate” shall mean, as to any Person, any other Person which, directly or indirectly, controls, or is controlled by, or is under common control with, such Person.  For this purpose, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

 

  

  

  

“Board” shall mean the Board of Directors of the Corporation.

 

“Business Day” means any day (other than a Saturday or Sunday) on which commercial banks are open in both New York City and Toronto, Canada.

 

“Canadian Prospectus” shall mean a prospectus (including a short form prospectus) prepared in accordance with applicable Canadian Securities Laws for the purposes of qualifying securities for distribution or distribution to the public, as the case may be, in any province or territory of Canada.

 

“Canadian Securities Commissions” means the securities commissions or other securities regulatory authorities in each of the provinces and territories of Canada.

 

“Canadian Securities Laws” means the securities legislation of the applicable provinces or territories of Canada, and the rules, regulations, instruments, blanket rulings and orders, and written policies of the applicable Canadian Securities Commissions, all as shall be in effect from time to time.

 

“Common Shares” means the common shares in the capital of the Corporation.

 

“Convertible Securities” means, at any time, any options, warrants, convertible debt securities or other securities or rights exchangeable or exercisable, with or without the payment of additional consideration, into or for Common Shares, directly or indirectly.

 

“Eligible Securities” means all or any portion of the Common Shares, including Common Shares issued, or issuable upon the exercise, exchange or conversion of any Convertible Securities, and any shares or other securities into which or for which Common Shares may be changed, converted or exchanged, and any other shares or securities issued to the Holders after the date hereof in respect of such shares (or such shares or other securities into which or for which such shares are so changed, converted or exchanged) upon any reclassification, share consolidation, share split, share dividend, share exchange, merger, amalgamation, consolidation or similar transaction; provided, however, that Eligible Securities shall not include any shares (i) when a registration statement with respect to the sale of such shares shall have become effective under the applicable Securities Laws and such shares shall have been disposed of in accordance with such registration statement, or (ii) which have been sold to the public pursuant to Rule 144 of the Securities Act or prospectus exemptions under Canadian Securities Laws.

 

 

 

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“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, all as the same shall be in effect at the relevant time.

 

“Holder” means (a) any Investor and (b) any subsequent holder of Eligible Securities who acquires such securities from the Investors or from another Holder; provided that such subsequent holder of Eligible Securities has agreed to be bound by this Agreement and has executed a counterpart hereof.

 

“Minimum Shareholding” means, at any time, 5% of the outstanding Common Shares; provided that if Leucadia or its Affiliates shall have sold or otherwise transferred to a third party any of the Eligible Securities held by Leucadia and its Affiliates on the date hereof (other than pursuant to Section 7.1(a) or pursuant solely to an Inmet Common Share Reorganization, as defined in the Purchase Agreement), “Minimum Shareholding” shall be 10% of the outstanding Common Shares.

 

“Person” means any individual, corporation, partnership, firm, joint venture, association, joint stock company, limited liability company, trust, unincorporated organization or governmental authority or other entity of any kind.

 

“register”, “registered” and “registration” refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and the effectiveness of such registration statement.  In addition, unless inconsistent with the context:  (i) the term “registration” and any references to the act of registering include the qualification under Canadian Securities Laws of a Canadian Prospectus in respect of a distribution or distribution to the public, as the case may be, of securities; (ii) the term “registered” as applied to any securities includes a distribution or distribution to the public, as the case may be, of securities so qualified; (iii) the term “registration statement” means a registration statement, a preliminary or final prospectus or other qualification or enabling document complying with the Securities Laws that permits Eligible Securities to be sold by the Holders, and includes a Canadian Prospectus; (iv) any references to a registration statement having become effective, or similar references, shall include a Canadian Prospectus for which a final receipt has been obtained from one or more relevant Canadian Securities Commission(s); and (v) the provisions of this Agreement shall be applied, mutatis mutandis, to any proposed distribution of securities hereunder in any province or territory of Canada or to which the prospectus requirements under any of the Canadian Securities Laws shall otherwise apply.

 

“Registration Expenses” means all expenses incident to the Corporation’s performance of or compliance with the registration requirements set forth in this Agreement including, without limitation, the following:  (a) the fees, disbursements and expenses of the Corporation’s counsel and accountants in connection with the registration of Eligible Securities and Canadian and/or American counsel selected by Leucadia to represent the Holders participating in a registration hereunder; (b) all expenses in connection with the

 

 

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 preparation, printing and filing of a registration statement, any other offering document and amendments and supplements thereto and the mailing and delivering of copies thereof to the underwriters and dealers; (c) the cost of printing or producing any agreement(s) among underwriters, underwriting agreement(s) and “blue sky” or legal investment memoranda, any selling agreements and any other documents in connection with the offering, sale or delivery of Eligible Securities to be disposed of and other expenses of the underwriters (but only to the extent that such expenses are not to be borne by the underwriters or agents as provided in the relevant underwriting or agency agreement); (d) all expenses in connection with the qualification of Eligible Securities to be disposed of for offering and sale under federal, state or Canadian Securities Laws, including the fees and disbursements of counsel for the underwriters in connection with such qualification (but only to the extent that such expenses are not to be borne by the underwriters or agents as provided in the relevant underwriting or agency agreement) and in connection with any “blue sky” and legal investment surveys; (e) all applicable transfer taxes; (f) the filing fees incident to securing, if applicable, any required review, by the National Association of Securities Dealers, Inc. and/or the equivalent body governing securities dealers in Canada, of the terms of the sale of Eligible Securities to be disposed of; and (g) all fees and expenses incurred in connection with the listing of Eligible Securities on each securities exchange on which securities of the same class are then listed, or (if relevant, as determined by the Corporation in its sole discretion) proposed to be listed; provided, however, that Registration Expenses shall not include underwriting discounts or commissions attributable to Eligible Securities which shall be the responsibility of the Selling Shareholder.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Securities Act” means the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder, all as the same shall be in effect at the relevant time.

 

“Securities Laws” means, as applicable, the federal and state securities laws of the United States, and the Canadian Securities Laws.

 

“Selling Shareholder” means each Holder whose Eligible Securities are included or proposed to be included in any registration subject to Section 3.1 hereof.

 

ARTICLE II

 

REGISTRATION REQUEST

 

2.1  Demand registration.

 

(a) At any time after the earlier to occur of the fourth anniversary of the Closing Date (as defined in the Purchase Agreement) and the release of the Corporation and Leucadia from the guarantees to be given under the Syndicated Loan (as defined in the Purchase Agreement), one or more Holders (when making a request under this Section 2.1, the 

 

 

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“Initiating Holders”) may, in their sole discretion, demand that the Corporation effect the registration of all or any part of the Eligible Securities held by the Holders for sale in Canada and/or the United States (provided, in the case of a registration in the United States, that the Corporation is, at the time such demand is made, eligible to use the U.S. Multijurisdictional Disclosure System and is then subject to Section 13(a) or 15(d) of the Exchange Act), by delivering to the Corporation written notice requesting the Corporation to effect such registration and specifying the intended method or methods of disposition of such Eligible Securities (a “Demand”).

 

(b)  Upon receipt of a Demand made pursuant to Section 2.1(a), the Corporation will use commercially reasonable efforts to effect promptly the registration of such Eligible Securities for disposition in accordance with the intended method or methods of disposition stated in such Demand; provided, however, that:

 

(1) the Corporation shall not be required to register, pursuant to this Section 2.1, less than 1,000,000 Common Shares (or the equivalent number of Eligible Securities);

 

(2) the Corporation shall not be required to register Eligible Securities pursuant to this Article II if the Corporation delivers notice to the Holders as soon as practicable after any Demand hereunder that the Corporation in good faith believes that it will file a registration statement for a public offering of Common Shares within forty-five (45) days of such request; provided, however, that the Corporation shall have the right to refuse a registration on such grounds only one time during any period of twelve (12) consecutive months;

 

(3) the Corporation shall not be required to effect a registration pursuant to this Article II within a period of ninety (90) days after the effective date of the most recent previous registration with respect to any equity securities pursuant to this Article II or Article III hereof; and

 

(4) if the Corporation in good faith believes that any registration or continued registration of Eligible Securities would require the disclosure of information in such registration statement that would be materially detrimental to the Corporation and its shareholders (and such information would not be required to be disclosed if such registration statement were not filed) or the disclosure of which would materially adversely affect the Corporation’s ability to consummate a material acquisition, corporate reorganization or merger or other transaction involving the Corporation (a “Valid Business Reason”):

 

(i) the Corporation may postpone filing a registration statement relating to a Demand until such Valid Business Reason no longer exists, but in no event for more than ninety (90) days, and

 

(ii) in case a registration statement has been filed relating to a Demand, if the Valid Business Reason has not resulted from actions taken by the

 

 

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Corporation, the Corporation may cause such registration statement to be withdrawn or may postpone amending or supplementing such registration statement until such Valid Business Reason no longer exists, but in no event for more than sixty (60) days (such period of postponement or withdrawal under Sections 2.1(b)(4)(i) and 2.1(b)(4)(ii), the “Postponement Period”);

 

and the Corporation shall give written notice of its determination to postpone or withdraw a registration statement and of the fact that the Valid Business Reason for such postponement or withdrawal no longer exists, in each case, promptly after the occurrence thereof.  If the Corporation gives any notice of postponement or withdrawal of any registration statement, the Corporation shall not, during the period of postponement or withdrawal, register or continue the registration of any Common Shares.  Each Holder of Eligible Securities agrees that, upon receipt of any notice from the Corporation that the Corporation has determined to withdraw any registration statement pursuant to Section 2.1(b)(4)(ii) above, such party will discontinue its disposition of Eligible Securities pursuant to such registration statement and, if so directed by the Corporation, will deliver to the Corporation (at the Corporation’s expense) all copies, other than permanent file copies, then in such party’s possession, of the prospectus covering such Eligible Securities that was in effect at the time of receipt of such notice.  If the Corporation shall have withdrawn a registration statement filed under this Article II, the Corporation shall pay all expenses incurred by the Holders in connection with such registration statement and shall not be considered to have effected an effective registration for the purposes of this Agreement until the Corporation shall have filed a new registration statement covering the Eligible Securities covered by the withdrawn registration statement and such registration statement shall have been declared effective and shall not have been withdrawn.  If the Corporation shall give any notice of withdrawal or postponement of a registration statement, the Corporation shall, at such time as the Valid Business Reason that caused such withdrawal or postponement no longer exists (but in no event later than sixty (60) days after the date of the withdrawal or postponement), confirm that the Initiating Holder still wishes to effect a registration of Eligible Securities under this Article II and, if the Initiating Holder so confirms, use commercially reasonable efforts to effect the registration of the Eligible Securities covered by the withdrawn or postponed registration statement in accordance with this Article II; provided that if the Initiating Holder advises the Corporation that it does not wish to proceed with such registration, the Corporation shall not be considered to have effected an effective registration for purposes of this Agreement.  The Corporation agrees that it shall have the right to postpone or withdraw a registration statement pursuant to this Section 2.1(b)(4) only one time during any period of twelve (12) consecutive months.

 

2.2 Number of Registrations.  The Holders collectively (including their transferees) shall have the right to request no more than three (3) registrations pursuant to this Article II; provided, however, that (i) a registration will not count as a Demand until it has become effective (unless the requesting Holders withdraw all their Eligible Securities and the Corporation has performed its obligations hereunder in all material respects, in which case such request will count as a Demand unless the requesting Holders pay all Registration

 

 

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Expenses in connection with such withdrawn registration); provided, further, that if, after a registration has become effective, an offering of Eligible Securities pursuant to such registration is (A) withdrawn or postponed in accordance with Section 2.1(b)(4) or (B) interfered with by any stop order, injunction or other order or requirement of the SEC or other governmental agency or court, such registration will be deemed not to have been effected and will not count as a Demand; and (ii) a concurrent registration in the United States and Canada shall be deemed to be one occasion of registration only.

 

2.3 Registration Expenses.  If the Corporation has obtained an opinion of its outside counsel that the Eligible Securities in respect of which a Demand has been made may be sold without registration under Canadian Securities Laws (under reasonable assumptions made by such counsel), the Corporation shall be responsible for the payment of 50% of all Registration Expenses, and the Holders shall be responsible for the balance of such Registration Expenses, in connection with a registration pursuant to this Article II, except as may be required by law. For greater certainty, counsel to the Corporation shall be entitled to assume, for the purposes of such opinion that the Selling Shareholder does not have any agreement or understanding to act in combination with any other Person who is at arm’s length with the Selling Shareholder in respect of the control of the Corporation. If the Corporation has not obtained such an opinion, it shall be responsible for the payment of all Registration Expenses in connection with such registration.

 

2.4 Third Person Common Shares.  The Corporation shall, subject to the provisions of Section 3.1, permit the registration of Eligible Securities for sale for the account of any Holder who delivers a request for a registration in any registration of Eligible Securities requested by another Holder pursuant to this Article II. The Initiating Holder and all other Holders participating in the particular registration pursuant to this Article II shall be jointly and severally liable to the Corporation for all expenses of the registration which are to be borne by Holders as provided in Section 2.3.

 

ARTICLE III

 

INCIDENTAL REGISTRATION

 

3.1 Notice and Registration.  At any time after the earlier to occur of the fourth anniversary of the Closing Date and the release of the Corporation and Leucadia from the guarantees to be given under the Syndicated Loan, whenever the Corporation proposes to register Eligible Securities in a registration statement that would permit the public sale of such securities under the Securities Laws (whether proposed to be offered for sale by the Corporation or any other Person, whether pursuant to Article II or in any other registration pursuant to this Article III), the Corporation shall give written notice to all Holders at least ten (10) Business Days before the filing of such registration statement of its intention to effect such registration, including the identities of any Holders exercising registration rights pursuant to Article II hereof; provided, however, that the Investors and any Holders who are Affiliates of the Investors will be deemed to have received notice of any proposed registration considered by the Board for so long as Leucadia has a representative on the

 

 

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Board.  Such notice shall specify, at a minimum, the number of Eligible Securities proposed to be registered, the proposed date of filing of the registration statement, any proposed means of distribution of such Eligible Securities (in the case of a distribution pursuant to Article II, only to the extent specified by the Initiating Holder in its Demand), any proposed managing underwriter or underwriters of such Eligible Securities (in the case of a distribution pursuant to Article II, only to the extent specified by the Initiating Holder in its Demand) and a good faith estimate by the Corporation of the proposed maximum offering price thereof (in the case of a distribution pursuant to Article II, only to the extent such good faith estimate has been provided by the Initiating Holder in its Demand), as such price is proposed to appear on the facing page of such registration statement (provided that no such price need be provided in respect of an issue being done solely by Canadian Prospectus and not by a registration statement to be filed in the United States).  Upon the written request of any Holder delivered to the Corporation within ten (10) Business Days after the giving of any such notice (which request shall specify the number of Eligible Securities intended to be disposed of by such Holder and the intended method of disposition thereof), the Corporation will use commercially reasonable efforts to effect the registration of all Eligible Securities which the Corporation has been so requested to register by such Holder to the extent required to permit the disposition (in accordance with the intended method or methods thereof as aforesaid) of the Eligible Securities so to be registered; provided, however, that:

 

(a) if, at any time after giving such written notice of its intention to register any Eligible Securities and prior to the effective date of the registration statement filed in connection with such registration, the Corporation shall be unable to or shall determine for any reason not to register any of the Eligible Securities, then except in the case of a Demand pursuant to Article II hereof, the Corporation may, at its election, give written notice of such determination to such Holder(s), and thereupon the Corporation shall be relieved of its obligation to register such Eligible Securities (but not from its obligation to pay Registration Expenses incurred in connection therewith as provided in Section 3.2), without prejudice, however, to the right of the Holders immediately to request that such registration be effected as a registration in accordance with Article II, in which event the following provisions of this Section 3.1 shall apply;

 

(b) in the event that the Corporation proposes to register Eligible Securities for purposes of a primary offering for the account of the Corporation prior to a Demand pursuant to Article II hereof, and any managing underwriter shall advise the Corporation and the Selling Shareholders in writing that, in its opinion, the inclusion in the registration statement of some or all of the Eligible Securities sought to be registered by such Selling Shareholders creates a substantial risk that the price per unit the Corporation will derive from such registration will be materially and adversely affected, then the Corporation will include in such registration statement such number of Eligible Securities as the Corporation and such Selling Shareholders are so advised can be sold in such offering without such an effect (the “Primary Maximum Number”), as follows and in the following order of

 

 

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priority:  (i) first, such number of Eligible Securities in the primary offering as the Corporation, in its reasonable judgment and acting in good faith and in accordance with sound financial practice, shall have determined; and (ii) second and subject of Section 8.3, if and to the extent that the number of Eligible Securities to be registered under clause (i) is less than the Primary Maximum Number, Eligible Securities requested to be included by each Selling Shareholder, pro rata in proportion to the number sought to be registered by all the Selling Shareholders;

 

(c) in the event that the Corporation proposes to register Eligible Securities for purposes of a secondary offering upon the request or for the account of the Holders either pursuant to a Demand under Article II or in any other registration pursuant to this Article III, and any managing underwriter shall advise the Selling Shareholders in writing that, in its opinion, the inclusion in the registration statement of some or all of the Eligible Securities sought to be registered by the Selling Shareholders creates a substantial risk that the price per unit that such Selling Shareholders will derive from such registration will be materially and adversely affected, the Corporation will include in such registration statement such number of Eligible Securities as the Selling Shareholders are so advised can reasonably be sold in such offering, or can be sold without such an effect (the “Secondary Maximum Number”), pro rata, and subject of Section 8.3, in proportion to the number of Eligible Securities sought to be registered by all the Selling Shareholders;

 

(d) the Corporation shall not be required to effect any registration of Eligible Securities under this Article III incidental to the registration of any of its securities in connection with mergers, amalgamations, acquisitions, exchange offers, subscription offers, dividend reinvestment plans or options or other employee benefit plans.

 

Notwithstanding the foregoing, no registration of Eligible Securities effected under this Article III shall relieve the Corporation of its obligation to effect any registration of Eligible Securities pursuant to Article II.

 

3.2 Registration Expenses.  The Corporation (as between the Corporation and any Holder) shall be responsible for the payment of all Registration Expenses in connection with any registration pursuant to this Article III, except as may be required by law.

 

 

 

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ARTICLE IV

 

REGISTRATION PROCEDURES

 

4.1 Registration and Qualification.  If and whenever the Corporation is required to use commercially reasonable efforts to effect the registration of any Eligible Securities as provided in Articles II and III, the Corporation will promptly:

 

(a) prepare, file and use commercially reasonable efforts to cause to become effective a registration statement and any amendments and supplements thereto, to keep such registration statement effective and to comply with the provisions of all applicable Securities Laws with respect to the disposition of all Eligible Securities until the earlier of such time as all of such Eligible Securities have been disposed of in accordance with the intended methods of disposition by the Holders set forth in such registration statement or the expiration of ninety (90) days after such registration statement becomes effective;

 

(b) furnish to all selling Holders and to any underwriter of such Eligible Securities, one executed copy each and such number of conformed copies of such registration statement and of each such amendment and supplement thereto, such documents incorporated by reference in such registration statement and such other documents as any such Holder or such underwriter may reasonably request;

 

(c) use commercially reasonable efforts to register or qualify all Eligible Securities covered by such registration statement under such Securities Laws as any Holder or any underwriter of such Eligible Securities shall request, and do any and all other acts and things which may be necessary or advisable to enable any Holder or any underwriter to consummate the disposition in such jurisdictions of the Eligible Securities covered by such registration statement, except the Corporation shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it is not so qualified or to subject itself to taxation in any such jurisdiction;

 

(d) promptly advise the selling Holders of Eligible Securities and the managing underwriter or underwriters, if any, thereof and confirm such advice in writing, (i) when such registration statement or any amendment or supplement or post-effective amendment thereto has been filed, and, with respect to such registration statement or any post-effective amendment thereto, when the same has become effective, (ii) of any comments by the SEC or the Canadian Securities Commissions and by the “blue sky” or securities commissioner or regulator of any state or other province with respect thereto or any request by the SEC or the Canadian Securities Commissions for amendments or supplements to such registration statement or for additional information, (iii) of the issuance by the SEC or Canadian Securities Commissions of any stop or cease trade order suspending the effectiveness of such registration statement or the initiation or threatening of any proceedings for that purpose, (iv) of the receipt by the Corporation of any notification with respect to the suspension of the qualification of the Eligible Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (v) at any time when a prospectus is required to

 

 

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be delivered under the Securities Act or the Canadian Securities Laws, that such registration statement, amendment or supplement or post-effective amendment, or any document incorporated by reference in any of the foregoing, contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances in which they were made or in light of any other circumstances then existing;

 

(e) use commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date;

 

(f) if requested by any managing underwriter or underwriters or by a placement or sales agent or by any selling Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the SEC or the Canadian Securities Commissions and as such managing underwriter or underwriters, such agent or such Holder specifies should be included therein relating to the terms of the sale of such Eligible Securities including, without limitation, information with respect to the number of Eligible Securities being sold by the selling Holders or agent or to any underwriters, the name and description of such Holders, agent or underwriter, the offering price of such Eligible Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Eligible Securities to be sold by the selling Holders or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment;

 

(g) use commercially reasonable efforts to obtain the consent or approval of each U.S. or Canadian governmental agency or authority, whether federal, provincial, state or local, which may be required to effect such registration or the offering or sale in connection therewith or to enable the selling Holders to offer, or to consummate the disposition of, the Eligible Securities;

 

(h) cooperate with the selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Eligible Securities to be sold, which certificates shall be printed, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders and which shall not bear any restrictive legends (other than any such legends that are reasonably deemed by the Corporation to be necessary under the Securities Laws of the United States); and, in the case of an underwritten offering, enable such Eligible Securities to be in such denominations and registered in such names as the managing underwriters may reasonably request at least two (2) Business Days prior to any sale of the Eligible Securities;

 

 

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(i) provide a CUSIP number for all Eligible Securities not later than the effective date of such registration statement;

 

(j) take such other actions in connection therewith as the selling Holders shall reasonably request in order to expedite or facilitate the disposition of the Eligible Securities registered;

 

(k) whether or not an agreement of the type referred to in Section 4.2 hereof is entered into and whether or not any portion of the offering contemplated by such registration statement is an underwritten offering or is made through a placement or sales agent or any other entity, (i) make such representations and warranties to the Holders and the underwriters, if any, thereof in form, substance and scope as are customarily made in connection with an offering of common stock or other equity securities pursuant to any appropriate agreement and/or to a registration statement filed on the form applicable to such registration; (ii) obtain an opinion of counsel to the Corporation in customary form and covering such matters, of the type customarily covered by such an opinion (including, if a Canadian Prospectus is filed in the Province of Quebec, opinions of Quebec Counsel and of the auditors relating to translation into the French language of the applicable registration statements), as the managing underwriters, if any, and as the selling Holders may reasonably request, addressed to such Holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof, and dated the effective date of such registration statement (and if such registration statement contemplates an underwritten offering of a part or all of the Eligible Securities dated the date of the closing under the underwriting agreement relating thereto); (iii) obtain a “cold comfort” letter or letters from the independent certified public accountants of the Corporation addressed to the selling Holders and the placement or sales agent, if any, therefor and the underwriters, if any, dated (I) the effective date of such registration statement, (II) the effective date of any prospectus supplement, if any, to the prospectus included in such registration statement or post-effective amendment to such registration statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus and (III) if such registration statement contemplates an underwritten offering pursuant to any prospectus supplement to the prospectus included in such registration statement or post-effective amendment to such registration statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus, the date of the closing under the underwriting agreement relating thereto, such letter or letters to be in customary form and covering such matters of the type customarily covered by letters of such type; (iv) deliver such documents and certificates, including officers’ certificates, as may be reasonably requested by the selling Holders and the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof to evidence the accuracy of the representations and warranties made pursuant to clause (i) above and the compliance with or satisfaction of any agreements or conditions

 

 

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contained in the underwriting agreement or other agreement entered into by the Corporation; and (v) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Article VI hereof;

 

(l) use commercially reasonable efforts to list at or prior to the effective date of such registration statement (to the extent not already listed), subject to notice of issuance, the Eligible Securities covered by such registration statement on The Toronto Stock Exchange and/or any U.S. securities exchange, or accepted for quotation on the NASDAQ National Market System (or comparable inter-dealer quotation system then in effect), in any such case to the extent the Common Shares, as a class, are then listed or quoted thereon);

 

(m)  participate with the Holders of Eligible Securities and make available at reasonable times its senior executives, including its chief executive officer and chief financial officer, to participate in a reasonable number of road shows in connection with an underwritten offering; and

 

(n) during such time as any Holders of Eligible Securities may be engaged in a distribution of Eligible Securities under the Securities Act, comply with Regulation M promulgated under the Exchange Act or any equivalent provision under Canadian Securities Laws, in each case to the extent applicable;

 

(o) otherwise comply with all Securities Laws and, if applicable, make generally available to its shareholders, as soon as practicable, an earnings statement of the Corporation and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Corporation, Rule 158 thereunder) or the equivalent provisions of the Canadian Securities Laws.

 

The Corporation may require any Holder to furnish the Corporation such information regarding such Holder and the distribution of such securities as the Corporation may from time to time reasonably request in writing and as shall be required by law or by the SEC or any Canadian Securities Commission in connection with any registration.  The Corporation shall hold in confidence and not make any disclosure of Information concerning any of the Investors unless it is required by law or by the SEC or any of the Canadian Securities Commissions in connection with any registration.

 

4.2 Underwriting.

 

(a) If requested by the underwriters for any underwritten offering of Eligible Securities pursuant to a registration requested hereunder, the Corporation will enter into an underwriting agreement with such underwriters for such offering, such agreement to contain such representations and warranties by the Corporation and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnities and contribution to the effect and to the extent provided in Article VI hereof and the provision of opinions of counsel and accountants’ letters to the effect and to the extent provided in Section 4.1(k).  The Holders on

 

 

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whose behalf Eligible Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, the Corporation to and for the benefit of such underwriters shall also be made to and for the benefit of such Holders of Eligible Securities.  Such agreement shall contain such representations and warranties by the Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions by selling shareholders similarly situated to such Holders, including, without limitation, indemnities and contribution to the effect and to the extent provided in Article VI.

 

(b) In the event that any registration pursuant to Article III hereof shall involve, in whole or in part, an underwritten offering, the Corporation may require Eligible Securities requested to be registered pursuant to Article III to be included in such underwriting on the same terms and conditions as shall be applicable to the Eligible Securities being sold through underwriters under such registration.  In such case, the Holders of Eligible Securities on whose behalf Eligible Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement.  Such agreement shall contain such representations and warranties by the Holders and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions by selling shareholders similarly situated to such Holders, including, without limitation, indemnities and contribution to the effect and to the extent provided in Article VI.  The representations and warranties in such underwriting agreement by, and the other agreements on the part of, the Corporation to and for the benefit of such underwriters shall also be made to and for the benefit of such Holders of Eligible Securities.

 

4.3 Withdrawals.  Any Holder having notified or directed the Corporation to include any or all of its Eligible Securities in a registration statement pursuant to Article II or III may withdraw such notice or direction with respect to any or all of the Eligible Securities designated for registration thereby by giving written notice to such effect to the Corporation at any time prior to the effective date of such registration statement.  In the event of any such withdrawal the Corporation promptly shall amend such registration statement and take such other actions as may be necessary so that such Eligible Securities are not included in the applicable registration and not sold pursuant thereto, and such Eligible Securities shall continue to be Eligible Securities in accordance herewith.

 

4.4 Restrictions in Connection with Registrations.  Each Holder agrees not to effect any public sale or distribution of Eligible Securities (or any other disposition of such securities, if requested by the underwriter of such offering), including any sale pursuant to Rule 144, during the fifteen (15) days prior to the effective date of a registration statement relating to a sale of Eligible Securities and during such period of time beginning on such effective date and ending not later than ninety (90) days thereafter, or for such longer period as may be required by the underwriters of such offering and agreed to by the Corporation (in each case except as part of such registration).  Each Holder hereby acknowledges that such

 

 

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Holder shall have no right to include its Eligible Securities, if applicable, in any registration of Eligible Securities except as expressly provided in this Agreement.

 

ARTICLE V

 

PREPARATION; REASONABLE INVESTIGATION

 

5.1 Preparation; Reasonable Investigation.  In connection with the preparation and filing of each registration statement registering Eligible Securities hereunder, the Corporation will give all selling Holders and the underwriters, if any, and their respective counsel and accountants, such access to its books and records and such opportunities to discuss the business of the Corporation with its directors, officers, employees, counsel and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of any such Holder and such underwriters or their respective counsel, to conduct a reasonable due diligence investigation.

 

5.2 Prospectus Review.  The Corporation shall (A) permit legal counsel to the Holders whose Eligible Securities are to be included in a registration statement to review and comment upon (i) the registration statement within a reasonable number of days prior to its filing with the relevant Canadian Securities Commission or the SEC, as the case may be, and (ii) all amendments and supplements to all registration statements within a reasonable number of days prior to their filing with the relevant Canadian Securities Commission or the SEC, as applicable, and (B) not file any registration statement or amendment or supplement thereto in a form to which legal counsel to such Holders reasonably objects.

 

ARTICLE VI

 

INDEMNIFICATION AND CONTRIBUTION

 

6.1 Indemnification and Contribution. 

 

(a) In the event of any registration of Eligible Securities hereunder, the Corporation will enter into customary indemnification arrangements to indemnify and hold harmless all selling Holders, their directors and officers (if any), each Person who participates as an underwriter in the offering or sale of such securities, each officer and director of each underwriter, and each Person, if any, who controls such selling Holder or any such underwriter within the meaning of the Securities Laws against any losses, claims, damages, liabilities and expenses, joint or several, to which such Person may be subject under the Securities Laws, as applicable, or otherwise insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such securities were registered or any amendment or supplement thereto, or any document incorporated by reference therein, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Corporation will promptly, as such expenses are

 

 

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due and payable, reimburse each such Person for any legal or any other expense reasonably incurred by such Person in connection with investigating or defending any such loss, claim, liability, action or proceeding, or (iii) any violation by the Corporation of the Securities Act, the Exchange Act and Canadian Securities Laws or any rule or regulation promulgated under such laws applicable to the Corporation and relating to action or inaction required of the Corporation; provided that the Corporation shall not be liable to a selling Holder in any such case to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, amendment or supplement in reliance upon and in conformity with written information about any selling Holder furnished to the Corporation by such selling Holder or such underwriter for use in the preparation thereof.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of any selling Holder or any such Person and shall survive the transfer of such securities by such selling Holder.  The Corporation also shall agree to provide provision for contribution as shall be reasonably requested by such selling Holder or any underwriters in circumstances where such indemnity is held unenforceable.

 

(b) Each selling Holder, by virtue of exercising its registration rights hereunder, agrees and undertake to enter into customary indemnification arrangements to severally and not jointly indemnify and hold harmless (in the same manner and to the same extent as set forth in clause (a) of this Article VI) the Corporation, each director of the Corporation, each officer of the Corporation who shall sign such registration statement, each Person who participates as an underwriter in the offering or sale of Eligible Securities, each officer and director of each underwriter, each Person, if any, who controls the Corporation or any such underwriter within the meaning of the Securities Laws, with respect to any statement in or omission from such registration statement, or any amendment or supplement thereto, to the extent and only to the extent that such statement or omission was made in reliance upon and in conformity with written information about a selling Holder concerning such Holder furnished by it to the Corporation.  Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Corporation or any such director, officer or controlling Person and shall survive the transfer of such Eligible Securities by any such Holder.  Such Holders also shall agree to provide provision for contribution as shall be reasonably requested by the Corporation or any underwriters in circumstance where such indemnity is held unenforceable.  The indemnification and contribution obligations of any Holder shall in every case be limited to the aggregate proceeds received (net of any underwriting fees and expenses and other transaction costs) by such Holder in such registration.

 

(c) Indemnification and contribution similar to that specified in the preceding subdivisions of this Article VI (with appropriate modifications) shall be given by the Corporation and all selling Holders with respect to any required registration or other qualification of such Eligible Securities under any other United States or Canadian federal, state or provincial law or regulation.

 

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ARTICLE VII

 

TRANSFER OF REGISTRATION RIGHTS

 

7.1 Transfer of Registration Rights.  A Holder may transfer the registration rights granted hereunder (a) in whole or in part to any Affiliate of such Holder and (b) any other Person in connection with any transfer of Eligible Securities; provided, however, that such Person agrees to be bound by this Agreement by executing a counterpart hereof. Notwithstanding any provision of this Agreement to the contrary, Leucadia’s rights under Article X shall not be transferable to any Person.

 

ARTICLE VIII

 

UNDERWRITTEN OFFERINGS

 

8.1 Selection of Underwriters.  If any of the Eligible Securities covered by any registration statement filed pursuant to Article II hereof are to be sold pursuant to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by Leucadia, provided that such designated managing underwriter or underwriters is or are acceptable to the Corporation, acting reasonably.  If neither Leucadia nor its Affiliates are then Holders of Eligible Securities and there are other Holders who are then parties to this Agreement, the designation of any managing underwriter or underwriters will be made by the Holder then holding the largest number of Eligible Securities.

 

8.2 Participation by Holders.  Each Holder hereby agrees that it may not participate in any underwritten offering hereunder unless it (a) agrees to sell its Eligible Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, certificates, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements or under Securities Laws in connection with the filing of the registration statement.

 

8.3 Allocation of Over-Allotment Options.  In the event any Eligible Securities registered pursuant to Article II hereof are to be sold pursuant to an underwritten offering, including, without limitation, any primary offering by the Corporation of Eligible Securities, any over-allotment option to be granted to the managing underwriter or underwriters shall be allocated to and granted by the Holders at the election of, and in such proportions as shall be designated by, Leucadia.  If neither Leucadia nor its Affiliates are then Holders of Eligible Securities and there are other Holders who are then parties to this Agreement, the allocation and grant will be determined by the Holder then holding the largest number of Eligible Securities.

 

 

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ARTICLE IX

 

OTHER AGREEMENTS

 

9.1 General Limitation on Registrations.  A Holder may only require registrations under Article II or III in Canada, unless the Corporation has become and is then subject to Section 13(a) or 15(d) of the Exchange Act, or, in the case of registrations under Article III, the Corporation proposes to register its Common Shares under the Securities Act in the United States.

 

9.2 Rule 144.  The Corporation shall (i) make and keep public information available, as those terms are understood and defined in Rule 144(c) under the Securities Act, (ii) file with the SEC and Canadian Securities Commissions in a timely manner all reports and other documents to be filed by the Corporation under the Securities Act, the Exchange Act and Canadian Securities Laws (but, in the case of filings with the SEC under the Securities Act and the Exchange Act, only to the extent that the Corporation is then obliged to make such filings) and (iii) at the request of any Holder who proposes to sell securities in compliance with Rule 144 under the Securities Act or an equivalent prospectus exemption under Canadian Securities Laws, forthwith furnish to such Holder a written statement of compliance with the public information requirements of the SEC as set forth in Rule 144 under the Securities Act (to the extent then possible) and compliance with equivalent provisions of Canadian Securities Laws and make available to such Holders such information as will enable the Holders to make sales pursuant to Rule 144 under the Securities Act (to the extent then possible) or an equivalent prospectus exemption under Canadian Securities Laws.

 

9.3 No Inconsistent Agreements.  The Corporation shall not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders under this Agreement.  Without limiting the generality of the foregoing, the Corporation shall not provide any registration rights to any other party unless those rights are pari passu to the rights of the Holders.

 

9.4 Retention of Shares.  The Investors and their respective Affiliates who become Holders hereunder agree not to sell, assign, convey or otherwise dispose of any of the Common Shares of the Corporation held by them until the earlier to occur of the fourth anniversary of the Closing Date and the release of the Corporation and Leucadia from the guarantees to be given under the Syndicated Loan, except in order to:

 

(a) sell, assign, convey or otherwise dispose of the Common Shares of the Corporation to their respective Affiliates;

 

(b) tender such Common Shares to a take-over bid for the Corporation by a party at arm’s length to the Holders which is (i) made to all holders of shares of the Corporation and (ii) made by take-over bid circular in accordance with Canadian Securities Law;

 

 

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(c) tender such Common Shares to an issuer bid made by the Corporation; or

 

(d) participate in a capital reorganization of the Corporation;

 

provided, in each case, that any remaining Common Shares held by the Investors and their respective Affiliates who become Holders hereunder (or any securities of the Corporation resulting from any transaction of the type described in clause (d) above) shall also be subject to the restrictions in this Article.

 

9.5 Insider Trading Policy.  The Holders hereby acknowledge the Corporation’s Insider Trading Policy in the form attached hereto as Exhibit A, and agree that any trading of Common Shares by the Holders shall be in compliance with such policy.

 

ARTICLE X

 

LEUCADIA NOMINEE

 

10.1 Leucadia Nominee.

 

(a) Leucadia shall be entitled to nominate an individual for election to the Inmet Board at each meeting of shareholders of Inmet at which the election of the board of directors is being considered, provided that at such time that Leucadia ceases to own, directly or indirectly, at least the Minimum Shareholding, Leucadia shall have no further entitlement as of right to nominate a member of the Board, but provided always that nothing in this Agreement shall in any case preclude Leucadia’s nominees from thereafter presenting themselves as candidates to be elected to the Board and to sit and hold office as a member of the Board if so elected.  Any individual nominated by Leucadia in accordance with this Article X shall be referred to herein as a “Leucadia Nominee.”

 

(b) For so long as Leucadia is entitled to nominate a Leucadia Nominee, the Corporation shall use its best efforts to enable a Leucadia Nominee who is not resident in Canada (for purposes of the Canada Business Corporations Act) to sit and hold office as a member of the Board if elected.

 

10.2 Notice of Election of Directors.  At any time and from time to time, if the Corporation determines that it is necessary or advisable to hold a meeting of its shareholders at which the election or removal of directors to or from the Board is to be considered (unless such meeting does not involve the removal or replacement of any Leucadia Nominee then serving on the Board in which case the provisions of this Section 10.2 do not apply), the Corporation shall forthwith upon such determination provide written notice of its intention to take such action to Leucadia, which notice must be provided sufficiently in advance of the date on which proxy solicitation materials are mailed by the Corporation in connection with

 

 

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such election or removal of directors in order to enable Leucadia to comply with the provisions of Section 10.3 and such that the Corporation shall be able to fulfill its obligations under Section 10.4.

 

10.3 Approving Nominees.  Subsequent to Leucadia’s receipt of notice from the Corporation pursuant to Section 10.2, if Leucadia wishes to nominate a Leucadia Nominee pursuant to its rights as set out in this Article X, Leucadia shall submit a written notice of the identity and the name of a Leucadia Nominee (a “Notice of Nomination”) to the Corporation within ten (10) Business Days after the date of the notice Leucadia receives from the Corporation pursuant to Section 10.2. Leucadia agrees that each Leucadia Nominee will meet the eligibility requirements for directors under applicable law, provided that such nominee need not be a Canadian resident (an “Eligible Candidate”).

 

10.4 Corporation to Put Forth Nomination.  Subject to Sections 10.1(a) and 10.3, the Corporation agrees that it shall present and recommend the Leucadia Nominee for election to the Board on all proxies solicited, and in all proxy solicitation materials, in respect of every meeting of the shareholders of the Corporation at which the election of directors to the Board is considered and at every adjournment or postponement thereof.  In the event that the Corporation determines in good faith, after consulting with and taking advice from counsel (such determination to be completed within three (3) Business Days of receipt a Notice of Nomination), that a Leucadia Nominee would not be an Eligible Candidate, the Corporation shall promptly notify Leucadia of such determination with an explanation of the basis therefor, and provided that Leucadia, with the timely good faith cooperation of the Corporation, puts forth an alternative Person who would be an Eligible Candidate sufficiently in advance of the date on which proxy solicitation materials are to be printed for mailing to the Corporation’s shareholders, the Corporation shall present and recommend such Eligible Candidate for election to the Board in such proxy materials.

 

10.5 Management to Endorse and Vote.  The management of the Corporation agree that they shall in respect of every meeting of the shareholders of the Corporation at which the election of directors to the Board is considered and at every reconvened meeting following an adjournment thereof or postponement thereof endorse and recommend the Leucadia Nominee who is an Eligible Candidate identified in the proxy materials for election to the Board, and shall vote their Common Shares in favor of the election of such Leucadia Nominee to the Board at every such meeting.

 

10.6 Term of Office.  A Leucadia Nominee elected to serve on the Board at any meeting of shareholders of the Corporation shall hold office until such Leucadia Nominee’s successor is elected and qualified, or until such Leucadia Nominee’s earlier death, resignation, disqualification or removal for cause, without regard to any decrease in Leucadia’s direct and indirect ownership of Common Shares below the Minimum Shareholding.  If any vacancy on the Board occurs by reason of a Leucadia Nominee ceasing to serve as a director (whether by death, resignation, disqualification or removal for cause) at any time between meetings of the shareholders of the Corporation, the Corporation shall use its best efforts to

 

 

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cause such vacancy to be filled and only a Leucadia Nominee shall be qualified to fill such vacancy, provided that Leucadia, at the time of such vacancy, is still entitled to nominate a Leucadia Nominee and puts forward an Eligible Candidate.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.1 Captions.  The captions or headings in this Agreement are for convenience and reference only, and in no way define, describe, extend or limit the scope or intent of this Agreement.

 

11.2 Severability.  If any clause, provision or section of this Agreement shall be invalid, illegal or unenforceable, the invalidity, illegally or unenforceability of such clause, provision or section shall not affect the enforceability or validity of any of the remaining clauses, provisions or sections hereof to the extent permitted by applicable law.

 

11.3 Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario, provided that the provisions hereof specifically applicable to the registration or qualification of securities under the Securities Laws of any applicable jurisdiction shall be governed by and construed in accordance with such Securities Laws of such jurisdiction.

 

11.4 Specific Performance.  The Corporation acknowledges that it would be impossible to determine the amount of damages that would result from any breach by it of any of the provisions of this Agreement and that the remedy at law for any breach, or threatened breach, of any of such provisions would likely be inadequate and, accordingly, agrees that each Holder shall, in addition to any other rights or remedies which it may have, be entitled to seek such equitable and injunctive relief as may be available from any court of competent jurisdiction to compel specific performance of, or restrain the Corporation from violating any of, such provisions.  In connection with any action or proceeding for injunctive relief, the Corporation hereby waives the claim or defense that a remedy at law alone is adequate and agrees, to the maximum extent permitted by law, to have each provision of this Agreement specifically enforced against it, without the necessity of posting bond or other security against it, and consents to the entry of injunctive relief against it enjoining or restraining any breach or threatened breach of this Agreement.

 

11.5 Amendments.  This Agreement may be amended, modified or supplemented only with the written consent of Leucadia, and by a written instrument executed by the Corporation and the holders of Eligible Securities having a majority of the voting power of the Eligible Securities held by the Holders.

 

 

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11.6 Counterparts.  This Agreement may be executed in counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument.

 

11.7 Entire Agreement.  This Agreement and the Shareholders’ Agreement constitutes the entire agreement and understanding among the parties and supersedes any prior understandings and/or written or oral agreements among them respecting the subject matter herein.

 

11.8 Notices.  All notices, requests, demands, consents and other communications required or permitted hereunder shall be sufficiently given if given in writing and delivered personally, transmitted by telecopier or sent by certified mail (return receipt requested) or recognized overnight delivery service, postage prepaid, addressed as follows, or to such other address as such party may notify to the other parties in writing:

 

(a) if to the Corporation,

 

Inmet Mining Corporation

330 Bay Street, Suite 1000

Toronto, Ontario

Attention:  Steve Astritis

Facsimile:  (416) 368-4692

 

with copies to:

 

Torys LLP

Suite 3000

79 Wellington Street West

Toronto, Ontario

M5K 1N2

Attention:  Brian Davis

Facsimile:  (416) 865-7380

 

(b) if to any subsequent Holder of Eligible Securities, to it at such address as may have been furnished to the Corporation in writing by such Holder;

 

(c) if to the Investors,

 

c/o Leucadia National Corporation

315 Park Avenue South

New York, New York  10010

Attention:  Joseph S. Steinberg, President

Facsimile:  (212) 598-3245

 

 

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with a copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention:  Andrea A. Bernstein

Facsimile:  (212) 310-8007

 

(d) in any case, at such other address or addresses as shall have been furnished in writing to the Corporation (in the case of a Holder of Eligible Securities) or to the Holders of Eligible Securities (in the case of the Corporation) in accordance with the provisions of this Section 11.8.

 

A notice or communication will be effective (i) if delivered in Person or by overnight courier, on the Business Day it is delivered, (ii) if transmitted by telecopier, on the Business Day of actual confirmed receipt by the addressee thereof, and (iii) if sent by registered or certified mail, five (5) Business Days after dispatch.

 

11.9 Action by Certain Holders.  Each determination, decision, action, election or exercise of any right that Leucadia shall be permitted or required to make or take pursuant to this Agreement may be made or taken (as the case may be) by the Holders of at least 80% of the Eligible Securities then held by the Holders, and each such determination, decision, action, election or exercise shall be binding upon each such other Holder hereunder.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

23

 

  

  

  

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement or caused this Agreement to be executed as of the day and year first above written.

 

	  	  	
The Company:

	  	  	
INMET MINING CORPORATION

 

	
By:

	  
	  	
Name:

	  	
Title:

	  	  
	  	  	  	  
	  	  	
The Investors:

	  	  	
LEUCADIA NATIONAL CORPORATION

 

	
By:

	  
	  	
Name:

	  	
Title:

	  	  
	  	  	  	  
	  	  	
MK RESOURCES COMPANY

 

	
By:

	  
	  	
Name:

	  	
Title:

	  	  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT

  

  

  

SCHEDULE A

 

to the

 

registration Rights Agreement

 

COUNTERPART SIGNATURE PAGE

 

THE UNDERSIGNED, having acquired [number to be inserted] [type of Eligible Securities], hereby (i) undertakes and agrees to become a party (as a Holder, as defined therein) to and to be bound by the terms and conditions of the registration Rights Agreement and to perform the applicable obligations thereunder, among the Corporation and the other signatories thereto dated as of [__________ __], 2005 a copy of which agreement the undersigned acknowledges having received.

 

IN WITNESS WHEREOF this             day of                               ,         .

 

	  	  	  
	
Witness

	  	
Stockholder

	  	  	
By:

	  
	
Name:

	  
	
Title:

	  
	  	
 

	
Address:

	  
	  	  
	  	  
	  	  	  	  
	  	  	
Number and type of securities held:  ________

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00181-of-00352.parquet"}]]