SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
From: April 6, 2010
IVANHOE MINES LTD.
(Translation of Registrants Name into English)
Suite 654 999 CANADA PLACE, VANCOUVER, BRITISH COLUMBIA V6C 3E1
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.)
Form 20-F-
o
Form 40-F-
þ
(Indicate by check mark whether the registrant by furnishing the information contained in this form
is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934.)
Yes:
o
No:
þ
(If Yes is marked, indicate below the file number assigned to the registrant in connection with
Rule 12g3-2(b):
82-
.)
Enclosed:
News Release
SHAREHOLDER RIGHTS PLAN AGREEMENT
DATED AS OF APRIL 5, 2010
BETWEEN
IVANHOE MINES LTD.
AND
CIBC MELLON TRUST COMPANY
AS RIGHTS AGENT
SHAREHOLDER RIGHTS PLAN AGREEMENT
SHAREHOLDER RIGHTS PLAN AGREEMENT
dated as of April 5, 2010, between Ivanhoe Mines Ltd. (the
Corporation
), a corporation existing under the laws of the Yukon Territory, and CIBC Mellon Trust
Company, a company existing under the laws of Canada (the
Rights Agent
);
WHEREAS:
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(a)
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the Board of Directors of the Corporation, in the exercise of its fiduciary
duties, determined that it was advisable and in the best interests of the Corporation
to adopt a shareholder rights plan (the
Rights Plan
) to ensure, to the extent
possible, that all shareholders of the Corporation are treated fairly in connection
with any take-over bid for the Corporation;
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(b)
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effective April 5, 2010 the Board of Directors authorized:
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(i)
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and declared the issuance of one Right effective the Record
Time in respect of each Common Share outstanding at the Record Time; and
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(ii)
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the issuance of one Right in respect of each Common Share
issued after the Record Time and prior to the earlier of the Separation Time
and the Expiration Time;
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(c)
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each Right entitles the holder thereof, after the Separation Time, to purchase
securities of the Corporation pursuant to the terms and subject to the conditions set
forth in this Agreement;
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(d)
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the Corporation has appointed the Rights Agent to act on behalf of the
Corporation and the holders of Rights, and the Rights Agent has agreed to act on behalf
of the Corporation in connection with the issuance, transfer, exchange and replacement
of Rights Certificates, the exercise of Rights and other matters referred to in this
Agreement; and
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(e)
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capitalized terms used above without definition have the meanings given to such
terms in Article 1 of this Agreement;
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NOW THEREFORE
, in consideration of the premises and the respective agreements set forth herein, the
Corporation and the Rights Agent agree as follows:
ARTICLE 1 INTERPRETATION
For purposes of this Agreement, the following terms have the meanings indicated;
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(a)
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Acquiring Person
means any Person who is the Beneficial Owner of 20% or more
of the outstanding Voting Shares; provided, however, that the term Acquiring Person
shall not include:
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(i)
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the Corporation or any Subsidiary of the Corporation;
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(ii)
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any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares as a result of one or any combination
of:
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(A)
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a Voting Share Reduction,
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(B)
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a Permitted Bid Acquisition,
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(C)
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an Exempt Acquisition,
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(D)
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a Convertible Security Acquisition, or
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(E)
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a Pro Rata Acquisition;
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provided, however, that if a Person becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares by reason of one or any combination of
(A), (B), (C), (D) or (E) above and thereafter becomes the Beneficial Owner
of any additional Voting Shares (other than pursuant to one or any
combination of (A), (B), (C), (D) or (E) above), then as of the date such
Person becomes the Beneficial Owner of such additional Voting Shares, such
Person shall become an Acquiring Person;
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(iii)
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for a period of 10 days after the Disqualification Date
(as defined below), any Person who becomes the Beneficial Owner of 20% or
more of the outstanding Voting Shares as a result of such Person becoming
disqualified from relying on Clause B of the definition of Beneficial
Owner solely because such Person makes or proposes to make a Take-over Bid,
either alone or by acting jointly or in concert with any other Person (for
the purposes of this definition,
Disqualification Date
means the first
date of public announcement that any Person is making or has announced an
intention to make a Take-over Bid, either alone, through such Persons
Affiliates or Associates or by acting jointly or in concert with any other
Person, and includes, without limitation, a report filed pursuant to Section
101 of the Securities Act);
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(iv)
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an underwriter or member of a banking or selling group
that becomes the Beneficial Owner of Voting Shares in connection with a
distribution to the public of securities of the Corporation, which includes,
without limitation, a distribution of securities pursuant to a prospectus or
by way of private placement; or
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(v)
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a Person (a
Grandfathered Person
) who is the Beneficial
Owner of 20% or more of the outstanding Voting Shares determined as at the
Record Time, provided, however, that this exception shall not be, and shall
cease to be, applicable to a Grandfathered Person in
the event that such Grandfathered Person shall, after the Record Time,
become the Beneficial Owner of any additional Voting Shares, other than
through one or any combination of a Permitted Bid Acquisition, an Exempt
Acquisition, a Voting Share Reduction, a Pro Rata Acquisition or a
Convertible Security Acquisition.
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(b)
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Affiliate
, when used to indicate a relationship with a Person, means a Person
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such specified Person.
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(c)
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Agreement
means this shareholder rights plan agreement, as the same may be
amended or supplemented from time to time; hereof, herein, hereto and similar
expressions mean and refer to this Agreement as a whole and not to any particular part
of this Agreement.
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(d)
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Associate
, when used to indicate a relationship with a specified Person,
means (i) a spouse of that Person, (ii) any Person of the same or opposite sex with
whom that Person is living in a conjugal relationship outside marriage, (iii) a child
of that Person or (iv) a relative of that Person or of a Person mentioned in items (i),
(ii) or (iii) of this definition if that relative has the same residence as that
Person.
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(e)
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A Person shall be deemed the
Beneficial Owner
of, to have
Beneficial
Ownership
of, and to
Beneficially Own
:
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(i)
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any securities as to which such Person or any of such
Persons Affiliates or Associates is the owner at law or in equity;
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(ii)
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any securities as to which such Person or any of such
Persons Affiliates or Associates has the right to become the owner at law
or in equity (whether such right is exercisable immediately or within a
period of 60 days thereafter and whether or not on condition or the
happening of any contingency) pursuant to any agreement, arrangement, pledge
or understanding, whether or not in writing (other than (A) customary
agreements with and between underwriters and/or banking group members and/or
selling group members with respect to a public offering of securities and
(B) pledges of securities in the ordinary course of business), or upon the
exercise of any conversion right, exchange right, share purchase right
(other than the Rights), warrant or option;
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(iii)
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any securities which are beneficially owned, directly or
indirectly, by a Counterparty (or any of such Counterpartys Affiliates or
Associates) under any Derivatives Contract (without regard to any short or
similar position under the same or any other Derivatives Contract) to which
such Person or any of such Persons Affiliates or Associates is a Receiving
Party; provided, however that the number of Common Shares that a Person is
deemed to Beneficially Own pursuant to this Clause (iii) in connection with
a particular Derivatives Contract shall not exceed the number of Notional
Securities with respect to such Derivatives Contract; provided, further,
that the number of securities beneficially owned by each Counterparty
(including their respective Affiliates and Associates) under a Derivatives
Contract shall for purposes of this Clause (iii) be deemed to include all
securities that are beneficially owned, directly or indirectly, by any other
Counterparty (or any of such other Counterpartys Affiliates or Associates)
under any Derivatives Contract to which such first Counterparty (or any of
such first Counterpartys Affiliates or Associates) is a Receiving Party and
this proviso shall be applied to successive Counterparties as appropriate;
and
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(iv)
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securities which are Beneficially Owned within the
meaning of Clauses 1.1(e)(i) or (ii) by any other Person with whom such
Person is acting jointly or in concert;
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provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to have Beneficial Ownership of, or to Beneficially Own, any security because:
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(A)
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the holder of such security has agreed pursuant
to a Permitted Lock-up Agreement to deposit or tender such security to
a Take-over Bid made by such Person, made by any of such Persons
Affiliates or Associates or made by any other Person acting jointly or
in concert with such Person, or such security has been deposited or
tendered pursuant to any Take-over Bid made by such Person, made by any
of such Persons Affiliates or Associates or made by any other Person
acting jointly or in concert with such Person, until such deposited or
tendered security has been taken up or paid for, whichever shall first
occur;
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(B)
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such Person, any of such Persons Affiliates or
Associates or any other Person acting jointly or in concert with such
Person holds such security provided that:
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(1)
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the ordinary business of any such
Person (the
Investment Manager
) includes the management of
mutual funds or other investment funds for others (which others,
for greater certainty, may include or be limited to one or more
employee benefit plans or pension plans) and the Investment
Manager holds such security in the ordinary course of such
business in the performance of such Investment Managers duties
for the account of any other Person (a
Client
), including
non-discretionary accounts held on behalf of a Client by a
broker or dealer registered under applicable law,
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(2)
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such Person (the
Trust Company
)
is licensed to carry on the business of a trust company under
applicable laws and, as such, acts as trustee or administrator
or in a similar capacity in relation to the estates of deceased
or incompetent Persons (each an
Estate Account
) or in relation
to other accounts (each an
Other Account
) and holds such
security in the ordinary course of such duties for the estate of
any such deceased or incompetent Person or for such other
accounts,
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(3)
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such Person is established by
statute for purposes that include, and the ordinary business or
activity of such Person (the
Statutory Body
) includes, the
management of investment funds for employee benefit plans,
pension plans, insurance plans or various public bodies,
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(4)
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such Person is a Crown agent or
agency (a
Crown Agent
), or
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(5)
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such Person (the
Administrator
)
is the administrator or trustee of one or more pension funds or
plans (a
Plan
) or is a Plan registered under the laws of
Canada or any province thereof or the laws of the United States
of America or any State thereof;
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provided, in any of the above cases, that the Investment
Manager, the Trust Company, the Statutory Body, the Crown
Agent, the Administrator or the Plan, as the case may be, is
not then making a Take-over Bid or has not then announced an
intention to make a Take-over Bid, other than an Offer to
Acquire Voting Shares or other securities by means of a
distribution by the Corporation or by means of ordinary
market transactions (including prearranged trades) executed
through the facilities of a stock exchange or organized
over-the-counter market, in each case, alone or by acting
jointly or in concert with any other Person;
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(C)
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such Person is (1) a Client of the same
Investment Manager as another Person on whose account the Investment
Manager holds such security, (2) an Estate Account or an Other Account
of the same Trust Company as another Person on whose account the Trust
Company holds such security or (3) a Plan with the same Administrator
as another Plan on whose account the Administrator holds such security;
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(D)
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such Person is the registered holder of
securities solely as the result of carrying on the business of or
acting as a nominee of a securities depositary;
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(E)
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such Person is (1) a Client of an Investment
Manager and such security is owned at law or in equity by the
Investment Manager, (2) an Estate Account or an Other Account of a
Trust Company and such security is owned at law or in equity by the
Trust Company or (3) a Plan and such security is owned at law or in
equity by the Administrator of the Plan; or
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(F)
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such security having been deposited or tendered
pursuant to a Take-over Bid made by such Person or any of such Persons
Affiliates or Associates or any other Person referred to in Clause (iv)
of this definition until the earlier of such deposited or tendered
security being accepted unconditionally for payment or exchange or
being taken up and paid for.
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(f)
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Board of Directors
means the board of directors of the Corporation.
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(g)
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Business Day
means any day other than a Saturday, Sunday or a day on which
banking institutions in City of Vancouver, British Columbia, are authorized or
obligated by law to close.
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(h)
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Canadian Dollar Equivalent
of any amount, which is expressed in United States
dollars means, on any date, the Canadian dollar equivalent of such amount determined by
multiplying such amount by the U.S. Canadian Exchange Rate in effect on such date.
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(i)
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Canadian U.S. Exchange Rate
means, on any date, the inverse of the U.S.
Canadian Exchange Rate in effect on such date.
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(j)
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Close of Business
on any given date means the time on such date (or, if such
date is not a Business Day, the time on the next succeeding Business Day) at which the
principal transfer office in the City of Vancouver, British Columbia of the transfer
agent for the Common Shares (or, after the Separation Time, the principal transfer
office in Vancouver, British Columbia of the Rights Agent) is closed to the public.
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(k)
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Common Shares
means the common shares in the capital of the Corporation.
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(l)
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Competing Permitted Bid
means a Take-over Bid that:
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(i)
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is made after a Permitted Bid or another Competing
Permitted Bid has been made and prior to the expiry of that Permitted Bid or
Competing Permitted Bid (in this definition, the
Prior Bid
);
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(ii)
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satisfies all the provisions of the definition of a
Permitted Bid, other than the requirement set out in Clause (ii) and (iv)of
the definition of Permitted Bid; and
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(iii)
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contains, and the take-up and payment for securities
tendered or deposited thereunder are subject to, irrevocable and unqualified
conditions that:
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(A)
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no Voting Shares shall be taken up or paid for
pursuant to such Take-over Bid (x) prior to the Close of Business on a
date that is not earlier than the later of the last day on which the
Take-over Bid must be open for acceptance after the date of such
Take-over Bid under applicable Canadian provincial securities
legislation and the earliest date on which Voting Shares may be taken
up or paid for under any Prior Bid, and (y) then only if, at the time
that such Voting Shares are first taken up or paid for, more than 50%
of the then outstanding Voting Shares held by Independent Shareholders
have been deposited or tendered pursuant to such Take-over Bid and not
withdrawn provided that if the Take-over Bid is for less than all of
the outstanding Voting Shares, no Voting Shares will be taken up or
paid for pursuant to the Take-over Bid prior to the end of the 10
Business Day period referenced in 1.1(l)(iii)(B); and
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(B)
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in the event that the requirement set forth in
Subclause (iii)(A)(y) of this definition is satisfied, the Offeror will
make a public announcement of that fact and the Take-over Bid will
remain open for deposits and tenders of Common Shares for not less than
ten Business Days from the date of such public announcement;
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provided always that a Competing Permitted Bid will cease to be a Competing
Permitted Bid at any time when such bid ceases to meet any of the provisions
of this definition and provided that, at such time, any acquisition of
Voting Shares made pursuant to such Competing Permitted Bid, including any
acquisitions of Voting Shares theretofore made, will cease to be a Permitted
Bid Acquisition.
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(m)
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A Person is
controlled
by another Person if:
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(i)
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in the case of a body corporate:
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(A)
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securities entitled to vote in the election of
directors carrying more than 50 per cent of the votes for the election
of directors are held, directly or indirectly, by or for the benefit of
the other Person;
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(B)
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the votes carried by such securities are
entitled, if exercised, to elect a majority of the board of directors
of such corporation;
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(ii)
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in the case of a Person that is not a body corporate,
more than 50% of the voting or equity interests of such entity are held,
directly or indirectly, by or on behalf of the Person or Persons;
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and
controls
,
controlling
and
under common control with
shall be interpreted
accordingly.
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(n)
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Convertible Securities
means, at any time, any securities issued by the
Corporation from time to time (other than the Rights) carrying any purchase, exercise,
conversion or exchange right pursuant to which the holder thereof may acquire Voting
Shares or other securities which are convertible into, exercisable into or exchangeable
for Voting Shares (in each case, whether such right is exercisable immediately or after
a specified period and whether or not on condition or the happening of any
contingency).
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(o)
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Convertible Security Acquisition
means the acquisition by a Person of Voting
Shares upon the exercise of Convertible Securities received by such Person pursuant to
a Permitted Bid Acquisition, Exempt Acquisition or a Pro Rata Acquisition.
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(p)
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Co-Rights Agents
has the meaning ascribed thereto in Subsection 4.1(a).
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(q)
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Corporations Act
means the
Business Corporations Act
(Yukon Territory), as
amended, and the regulations made thereunder, and any comparable or successor laws or
regulations thereto.
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(r)
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Derivatives Contract
shall mean a contract between two parties (the
Receiving Party
and the
Counterparty
) that is designed to expose the Receiving
Party to economic benefits and risks that correspond substantially to the ownership by
the Receiving Party of a number of Voting Shares or Convertible Securities specified or
referenced in such contract (the number corresponding to such economic benefits and
risks, the
Notional Securities
), regardless of whether obligations under such
contract are required or permitted to be settled through the delivery of cash, Voting
Shares, Convertible Securities or other property, without regard to any short position
under the same or any other Derivatives Contract. For the avoidance of doubt,
interests in broad-based index options, broad-based index futures and broad-based
publicly traded market baskets of stocks approved for trading by the appropriate
federal governmental authority shall not be deemed to be Derivatives Contracts.
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(s)
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Disposition Date
has the meaning ascribed thereto in Subsection 5.2(c).
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(t)
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Election to Exercise
has the meaning ascribed thereto in Clause 2.2(d)(ii).
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(u)
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Exempt Acquisition
means a Voting Share acquisition or a Convertible
Securities Acquisition (i) in respect of which the Board of Directors has waived the
application of Section 3.1 pursuant to
the provisions of Section 5.2, (ii) pursuant to a distribution of Voting Shares or
Convertible Securities (and the conversion or exchange of such Convertible
Securities) made by the Corporation pursuant to a prospectus or private placement
provided that the Person does not acquire a greater percentage of the securities
offered in the distribution than the percentage of Voting Shares owned by that
Person immediately prior to the distribution, (iii) pursuant to an amalgamation,
arrangement or other statutory procedure requiring Shareholder Approval, (iv)
pursuant to a distribution of Voting Shares or Convertible Securities (and the
exercise of such Convertible Securities) pursuant to any equity incentive stock
option plan of the Corporation where the eligible participants include directors,
employees (including officers) and consultants of the Corporation, including the
existing Employees and Directors Equity Incentive Plan, (v) pursuant to any of the
RT Arrangements, (vi) pursuant to such other written agreements in respect of a
Voting Share acquisition from treasury entered into by the Corporation with one or
more Grandfathered Persons after the date hereof, or (vii) pursuant to the exercise
of Rights.
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(v)
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Exercise Price
means, as of any date from and after the Separation Time, the
price at which a holder may purchase the securities issuable upon exercise of one whole
Right which, subject to adjustment in accordance with the terms hereof, shall be an
amount equal to five times the Market Price per Common Share determined as at the
Separation Time.
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(w)
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Expansion Factor
has the meaning ascribed thereto in Clause 2.3(a)(x).
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(x)
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Expiration Time
means the close of business on that date which is the
earliest of (i) the Termination Time, and (ii) the date of termination of this
Agreement pursuant to Section 5.16 or, if this Agreement is confirmed pursuant to
Section 5.16, the date of termination of this Agreement pursuant to Section 5.17 or, if
this Agreement is reconfirmed pursuant to Section 5.17, the close of business on the
tenth anniversary of the date hereof.
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(y)
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Flip-in Event
means a transaction in or pursuant to which any Person becomes
an Acquiring Person.
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(z)
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holder
has the meaning ascribed thereto in Section 2.8.
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(aa)
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Independent Shareholders
shall mean holders of Voting Shares, other than:
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(i)
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any Acquiring Person;
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(ii)
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any Offeror, other than any Person who by virtue of
Clause B of the definition of Beneficial Owner is not deemed to
Beneficially Own the Voting Shares held by such Person;
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(iii)
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any Affiliate or Associate of any Acquiring Person or
Offeror;
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(iv)
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any Person acting jointly or in concert with any
Acquiring Person or Offeror; and
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(v)
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any employee benefit plan, deferred profit sharing plan,
stock participation plan and any other similar plan or trust for the benefit
of employees of the Corporation unless the beneficiaries of the plan or
trust direct the manner in which the Voting Shares are to be voted or direct
whether the Voting Shares are to be tendered to a Take-over Bid.
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(bb)
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Market Price
per security of any securities on any date of determination
shall mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however, that if
an event of a type analogous to any of the events described in Section 2.3 shall have
caused the closing prices used to determine the Market Price on any Trading Days not to
be fully comparable with the closing price on such date of determination or, if the
date of determination is not a Trading Day, on the immediately preceding Trading Day,
each such closing price so used shall be appropriately adjusted in a manner analogous
to the adjustment provided for in Section 2.3 or as the Board of Directors shall
otherwise determine in order to make it fully comparable with the closing price on such
date of determination or, if the date of determination is not a Trading Day, on the
immediately preceding Trading Day. The closing price per security of any securities on
any date shall be:
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(i)
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the closing board lot sale price or, in case no such sale
takes place on such date, the average of the closing bid and asked prices
for each of such securities as reported by the principal Canadian stock
exchange (as determined by the Board of Directors) on which such securities
are listed or admitted to trading;
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(ii)
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if for any reason none of such prices is available on
such day or the securities are not listed or posted for trading on a
Canadian stock exchange, the last sale price or, in case no such sale takes
place on such date, the average of the closing bid and asked prices for each
of such securities as reported by the principal national United States
securities exchange (as determined by the Board of Directors) on which such
securities are listed or admitted to trading;
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(iii)
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if for any reason none of such prices is available on
such day or the securities are not listed or admitted to trading on a
Canadian stock exchange or a national United States securities exchange, the
last sale price or, in case no sale takes place on such date, the average of
the high bid and low asked prices for each of such securities in the
over-the-counter market, as quoted by any reporting system then in use (as
determined by the Board of Directors); or
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(iv)
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if for any reason none of such prices is available on
such day or the securities are not listed or admitted to trading on a
Canadian stock exchange or a national United States securities exchange or
quoted by any such reporting system, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
the securities selected by the Board of Directors;
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provided, however, that if for any reason none of such prices is available on such
day, the closing price per share of such securities on such date means the fair
value per share of such securities on such date as determined a nationally or
internationally recognized firm of investment dealers or investment bankers selected
by the Board of Directors and provided further that if an event of a type analogous
to any of the events described in Section 2.3 hereof shall have caused any price
used to determine the Market Price on any Trading Day not to be fully comparable
with the price as so determined on the Trading Day immediately preceding such date
of determination, each such price so used shall be appropriately adjusted in a
manner analogous to the applicable adjustment provided for in Section 2.3 hereof in
order to make it fully comparable with the price on the Trading Day immediately
preceding such date of determination. The Market Price shall be expressed in
Canadian dollars and, if initially determined in respect of any day forming part of
the 20 consecutive Trading Day period in question in United States dollars, such
amount shall be translated into Canadian dollars on such date at the Canadian Dollar
Equivalent thereof.
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(cc)
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Nominee
has the meaning ascribed thereto in Subsection 2.2(c).
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(dd)
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Offer to Acquire
includes:
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(i)
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an offer to purchase or a solicitation of an offer to
sell Voting Shares or Convertible Securities; and
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(ii)
|
|
an acceptance of an offer to sell Voting Shares or
Convertible Securities, whether or not such offer to sell has been
solicited;
|
or any combination thereof, and the Person accepting an offer to sell shall be
deemed to be making an Offer to Acquire to the Person that made the offer to sell.
|
(ee)
|
|
Offeror
means a Person who has announced a current intention to make or who
is making a Take-over Bid;
|
|
(ff)
|
|
Offerors Securities
means Voting Shares Beneficially Owned by an Offeror on
the date of the Offer to Acquire.
|
- 11 -
|
(gg)
|
|
Permitted Bid
means Take-over Bid made by an Offeror by way of take-over bid
circular which also complies with the following provisions:
|
|
(i)
|
|
the Take-over Bid is made to all holders of Voting
Shares, other than the Offeror;
|
|
(ii)
|
|
the Take-over Bid contains, and the take-up and payment
for securities tendered or deposited is subject to, an irrevocable and
unqualified provision that no Voting Shares will be taken up or paid for
pursuant to the Take-over Bid prior to the close of business on the date
which is not less than 60 days following the date of the Take-over Bid and
only if at such date more than 50% of the Voting Shares held by Independent
Shareholders shall have been deposited or tendered pursuant to the Take-over
Bid and not withdrawn provided that if the Take-over Bid is for less than
all of the outstanding Voting Shares, no Voting Shares will be taken up or
paid for pursuant to the Take-over Bid prior to the end of the 10 Business
Day period referenced in 1.1(gg)(iv);
|
|
(iii)
|
|
unless the Take-over Bid is withdrawn, the Take-over Bid
contains an irrevocable and unqualified provision that Voting Shares may be
deposited pursuant to such Take-over Bid at any time during the period of
time described in Clause 1.1(gg)(ii) and that any Voting Shares deposited
pursuant to the Take-over Bid may be withdrawn until taken up and paid for;
and
|
|
(iv)
|
|
the Take-over Bid contains an irrevocable and unqualified
provision that in the event the deposit condition set forth in Clause
1.1(gg)(ii) is satisfied, the Offeror will make a public announcement of
that fact and the Take-over Bid will remain open for deposits and tenders of
Voting Shares for not less than 10 Business Days from the date of such
public announcement;
|
provided always that a Permitted Bid will cease to be a Permitted Bid at any time
when such bid ceases to meet any of the provisions of this definition and provided
that, at such time, any acquisition of Voting Shares made pursuant to such Permitted
Bid, including any acquisition of Voting Shares theretofore made, will cease to be a
Permitted Bid Acquisition.
|
(hh)
|
|
Permitted Bid Acquisition
means an acquisition of Voting Shares made pursuant
to a Permitted Bid or a Competing Permitted Bid.
|
- 12 -
|
(ii)
|
|
Permitted Lock-up Agreement
means an agreement between a Person and one or
more holders of Voting Shares or Convertible Securities (each a
Locked-up Person
)
(the terms of which are publicly disclosed and a copy of which is made available to the
public (including the Corporation) not later than the date the Lock-up Bid (as defined
below) is publicly announced or, if the Lock-up Bid has been made prior to the date on
which such agreement is entered into, forthwith, and in any event not later than the
date of such agreement), pursuant to which each such Locked-up Person agrees to deposit
or tender Voting Shares or Convertible Securities (or both) to a Take-over Bid (the
Lock-up Bid
) made or to be made by the Person or any of such Persons
Affiliates or Associates or any other Person referred to in Clause (iii) of the
definition of Beneficial Owner; provided that:
|
|
(A)
|
|
permits the Locked-up Person to terminate its
obligation to deposit or tender, and permits the Locked-up Person to
withdraw if already deposited or tendered, the Voting Shares or
Convertible Securities (or both) from the Lock-up Bid in order to
tender or deposit such securities to another Take-over Bid or to
support another transaction that represents a price or value of
consideration for each Voting Share or Convertible Security that
exceeds the price or value of consideration represented or proposed to
be represented by the Lock-up Bid; or
|
|
(B)
|
(1)
|
permits the Locked-up Person to terminate
its obligation to deposit or tender, and permits the Locked-up Person
to withdraw if already deposited or tendered, the Voting Shares or
Convertible Securities from the agreement in order to tender or deposit
the Voting Shares or Convertible Securities to another Take-over Bid,
or to support another transaction that provides for a price or value of
consideration for each Voting Share or Convertible Security that
exceeds by as much as or more than a specified amount (the
Specified
Amount
) the price or value of consideration for each Voting Share or
Convertible Security contained in or proposed to be contained in, and
is made for at least the same number of Voting Shares or Convertible
Securities as, the Lock-up Bid; and
|
|
(2)
|
|
does not by its terms provide for
a Specified Amount that is greater than 7% over the price or
value of consideration for each Voting Share or Convertible
Security contained in or proposed to be contained in the Lockup
Bid;
|
and, for greater clarity, the agreement may contain a right of first refusal
or permit a period of delay to give such Person an opportunity to at least
match a higher price or value of consideration in another Take-over Bid and
may provide for any other similar limitation on a Locked-up Persons right
to withdraw Voting Shares or Convertible Securities (or both) from the
agreement, as long as the Locked-Up Person can accept another bid or tender
to another transaction; and
- 13 -
|
(ii)
|
|
no break-up fees, top-up fees, penalties, expenses or
other amounts that exceed in the aggregate the greater of:
|
|
(A)
|
|
the cash equivalent of 2
1
/
2
% of the price or
value payable under the Lockup Bid to a Locked-up Person; and
|
|
(B)
|
|
50% of the amount by which the price or value
payable under another Take-over Bid or transaction to a Locked-up
Person exceeds the price or value of the consideration that such
Locked-up Person would have received under the Lock-up Bid,
|
is payable by a Locked-up Person pursuant to the agreement in the event a
Locked-up Person fails to deposit or tender Voting Shares or Convertible
Securities (or both) to the Lock-up Bid, withdraws Voting Shares or
Convertible Securities (or both) previously tendered thereto or supports
another transaction.
|
(jj)
|
|
Person
includes any individual, firm, partnership, association, trust, body
corporate, corporation, unincorporated organization, syndicate, governmental entity or
other entity.
|
|
(kk)
|
|
Pro Rata Acquisition
means an acquisition by a Person of Voting Shares or
Convertible Securities pursuant to:
|
|
(i)
|
|
a stock dividend, stock split or other event in respect
of securities of the Corporation of one or more particular classes or series
pursuant to which such Person becomes the Beneficial Owner of Voting Shares
or Convertible Securities on the same pro rata basis as all other holders of
securities of the particular class, classes or series;
|
|
(ii)
|
|
the acquisition or the exercise by the Person of only
those rights to purchase Voting Shares distributed to that Person in the
course of a distribution to all holders of securities of the Corporation of
one or more particular classes or series pursuant to a rights offering
(other than the Rights) or pursuant to a prospectus provided that the Person
does not thereby acquire a greater percentage of such Voting Shares, or
securities convertible into or exchangeable for Voting Shares, so offered
than the Persons percentage of Voting Shares owned immediately prior to
such acquisition; or
|
|
(iii)
|
|
a distribution of Voting Shares, or securities
convertible into or exchangeable for Voting Shares (and the conversion or
exchange of such convertible or exchangeable securities), made pursuant to a
prospectus or by way of a private placement, provided that the Person does
not thereby acquire a greater percentage of such Voting Shares, or
securities convertible into or exchangeable for Voting Shares, so offered
than the Persons percentage of Voting Shares Beneficially Owned immediately
prior to such acquisition.
|
|
(ll)
|
|
Record Time
means the close of business on April 5, 2010.
|
- 14 -
|
(mm)
|
|
Redemption Price
has the meaning ascribed thereto in Subsection 5.1(a).
|
|
(nn)
|
|
Right
means a right to purchase a Common Share upon the terms and subject to
the conditions set forth in this Agreement.
|
|
(oo)
|
|
Rights Certificate
means the certificates representing the Rights after the
Separation Time, which shall be substantially in the form attached hereto as Attachment
I.
|
|
(pp)
|
|
Rights Register
has the meaning ascribed thereto in Subsection 2.6(a).
|
|
(qq)
|
|
RT Agreements
means (i) the Private Placement Agreement between the
Corporation and Rio Tinto International Holdings Limited (
Rio Tinto
) dated October
18, 2006, as amended prior to the date hereof and as may be further amended after the
date hereof (the
Private Placement Agreement
), (ii) the Credit Agreement dated
October 24, 2007 between the Corporation and Rio Tinto, as amended prior to the date
hereof and as may be further amended after the date hereof, and (iii) the Shareholders
Agreement between Rio Tinto and Robert M. Friedland dated October 18, 2006, as amended
prior to the date hereof and as may be further amended after the date hereof.
|
|
(rr)
|
|
RT Arrangements
means (i) the Series A Warrants, (ii) the Series B Warrants,
(iii) the Series C Warrants, (iv) the Anti-Dilution Ivanhoe Warrants Beneficially Owned
by Rio Tinto as at the Record Time, (v) any additional Anti-Dilution Ivanhoe Shares or
Anti-Dilution Ivanhoe Warrants that Rio Tinto becomes entitled to acquire after the
Record Time, (vi) the Conversion Rights, (vii) the Right of First Offer, (viii) Rio
Tintos right to acquire Voting Shares or Convertible Securities under Section 6.1 of
the Private Placement Agreement, and (ix) any other rights of Rio Tinto under the RT
Agreements to acquire Voting Shares or Convertible Securities and, for the purposes of
this definition,
Anti-Dilution Ivanhoe Shares
,
Anti-Dilution Ivanhoe Warrants
,
Conversion Rights
,
Right of First Offer
,
Series A Warrants
,
Series B Warrants
and
Series C Warrants
have the meanings assigned to them in the Private Placement
Agreement.
|
|
(ss)
|
|
Securities Act
means the
Securities Act
(Ontario), as amended from time to
time, and the regulations thereunder, and any comparable or successor laws or
regulations thereto.
|
|
(tt)
|
|
Separation Time
shall mean the close of business on the tenth Trading Day
after the earlier of:
|
|
(i)
|
|
the Stock Acquisition Date;
|
|
(ii)
|
|
the date of the commencement of or first public
announcement of the intent of any Person (other than the Corporation or any
Subsidiary of the Corporation) to commence a Take-over Bid (other than a
Permitted Bid or a Competing Permitted Bid); and
|
|
(iii)
|
|
the date upon which a Permitted Bid or Competing
Permitted Bid ceases to be such;
|
- 15 -
or, in the case of clauses (ii) and (iii) of this definition, such later date as may
be determined by the Board of Directors; provided that if any such Take-over Bid
expires, is cancelled, terminated or otherwise withdrawn prior to the Separation
Time, such Take-over Bid shall be deemed, for the purposes of this provision, never
to have been made.
|
(uu)
|
|
Shareholder Approval
means approval by a majority of the votes cast by the
holders of Voting Shares at a meeting called and held in accordance with applicable
laws and the articles and by-laws of the Corporation or a written resolution approved
by holders of a majority of the outstanding Voting Shares excluding, in all cases,
Voting Shares held by Persons who are not Independent Shareholders.
|
|
(vv)
|
|
Stock Acquisition Date
shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a report
filed pursuant to Section 102.1 of the Securities Act) by the Corporation or an
Acquiring Person that an Acquiring Person has become such.
|
|
(ww)
|
|
A corporation shall be deemed to be a
Subsidiary
of another corporation if:
|
|
(B)
|
|
that other and one or more corporations each of
which is controlled by that other; or
|
|
(C)
|
|
two or more corporations each of which is
controlled by that other; or
|
|
(ii)
|
|
it is a Subsidiary of a corporation that is that others
Subsidiary.
|
|
(xx)
|
|
Take-over Bid
means an Offer to Acquire, where the Voting Shares subject to
the Offer to Acquire, together with (i) the Voting Shares into which securities subject
to the Offer to Acquire are convertible and (ii) the Offerors Securities, constitute
in the aggregate 20% or more of the outstanding Voting Shares at the date of the Offer
to Acquire.
|
|
(yy)
|
|
Termination Time
shall mean the time at which the right to exercise Rights
shall terminate pursuant to Section 5.1(d) hereof.
|
|
(zz)
|
|
Trading Day
, when used with respect to any securities, means a day on which
the principal Canadian stock exchange on which such securities are listed or admitted
to trading is open for the transaction of business or, if the securities are not listed
or admitted to trading on any Canadian stock exchange, a Business Day.
|
- 16 -
|
(aaa)
|
|
U.S. Canadian Exchange Rate
means, on any date:
|
|
(i)
|
|
if on such date the Bank of Canada sets an average noon
spot rate of exchange for the conversion of one United States dollar into
Canadian dollars, such rate; and
|
|
(ii)
|
|
in any other case, the rate for such date for the
conversion of one United States dollar into Canadian dollars calculated in
such manner as may be determined by the Board of Directors from time to time
acting in good faith.
|
|
(bbb)
|
|
U.S. Dollar Equivalent
of any amount, which is expressed in Canadian dollars
means, on any date, the United States dollar equivalent of such amount determined by
multiplying such amount by the Canadian U.S. Exchange Rate in effect on such date.
|
|
(ccc)
|
|
Voting Share Reduction
means an acquisition or redemption by the Corporation
of Voting Shares or any other transaction which, by reducing the number of Voting
Shares outstanding, increases the proportionate number of Voting Shares Beneficially
Owned by any person to 20% or more of the Voting Shares then outstanding.
|
|
(ddd)
|
|
Voting Shares
shall mean the Common Shares of the Corporation and any other
shares in the capital of the Corporation entitled to vote generally in the election of
all directors.
|
All sums of money, which are referred to in this Agreement are expressed in lawful money of Canada,
unless otherwise specified.
The division of this Agreement into Articles, Sections, Subsections, Clauses, Paragraphs,
Subparagraphs or other portions hereof and the insertion of headings, subheadings and a table of
contents are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
- 17 -
1.4
|
|
Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares
|
For purposes of this Agreement, the percentage of Voting Shares Beneficially Owned by any Person,
shall be and be deemed to be the product (expressed as a percentage) determined by the formula:
100 x A/B
where:
|
A
|
=
|
the number of votes for the election of all directors generally attaching to
the Voting Shares Beneficially Owned by such Person; and
|
|
B
|
=
|
the number of votes for the election of all directors generally attaching to
all outstanding Voting Shares.
|
For the purposes of the foregoing formula, where any Person is deemed to Beneficially Own unissued
Voting Shares which may be acquired pursuant to Convertible Securities, such Voting Shares shall be
deemed to be outstanding for the purpose of calculating the percentage of Voting Shares
Beneficially Owned by such Person in both the numerator and the denominator, but no other unissued
Voting Shares which may be acquired pursuant to any other outstanding Convertible Securities shall,
for the purposes of that calculation, be deemed to be outstanding.
1.5
|
|
Acting Jointly or in Concert
|
For the purposes of this Agreement, a Person is acting jointly or in concert with every other
Person who, as a result of any agreement, arrangement, or understanding, whether formal or
informal, with the first Person or any Associate or Affiliate thereof, acquires or offers to
acquire Voting Shares (other than (A) customary agreements with and between underwriters and/or
banking group members and/or selling group members with respect to a distribution of securities by
way of prospectus or private placement; or (B) pledges of securities in the ordinary course of
business).
ARTICLE 2 THE RIGHTS
2.1
|
|
Issuance and Evidence of Holdings of Rights
|
One Right in respect of each Common Share outstanding at the Record Time and each Common Share
which may be issued after the Record Time and prior to the earlier of the Separation Time and the
Expiration Time shall be issued in accordance with the terms hereof. Notwithstanding the foregoing,
one Right in respect of each Common Share issued after the Record Time upon the exercise of rights
pursuant to Convertible Securities outstanding at the Record Time may be issued after the
Separation Time but prior to the Expiration Time.
- 18 -
Certificates representing Common Shares which are issued after the Record Time but prior to the
earlier of the Separation Time and the Expiration Time shall also evidence one Right for each
Common Share represented thereby and shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
Until the Separation Time (as defined in the Shareholder Rights Agreement referred
to below), this certificate also evidences and entitles to holder hereof to certain
Rights described in a Shareholder Rights Plan Agreement dated as of April 5, 2010
(the
Shareholder Rights Agreement
) between Ivanhoe Mines Ltd. (the
Corporation
)
and CIBC Mellon Trust Company (the
Rights Agent
), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
executive offices of the Corporation. Under certain circumstances set out in the
Shareholder Rights Agreement, the rights may expire, may be amended or redeemed, may
become null and void or may be evidenced by separate certificates and no longer
evidenced by this certificate. The Corporation will mail or arrange for the mailing
of a copy of the Shareholder Rights Agreement to the holder of this certificate
without charge as soon as practicable, after the receipt of a written request
therefor.
Certificates representing Common Shares that are issued and outstanding at the Record Time shall
evidence one Right for each Common Share represented thereby, notwithstanding the absence of the
foregoing legend, until the close of business on the earlier of the Separation Time and the
Expiration Time.
Registered holders of Common Shares who have not received a share certificate and are entitled to
do so on the earlier of the Separation Time and the Expiration Time shall be entitled to Rights as
if such certificates had been issued and such Rights shall for all purposes hereof be evidenced by
the corresponding entries on the Corporations securities register for common shares.
2.2
|
|
Exercise of Rights; Detachment of Rights
|
|
(a)
|
|
Subject to adjustment as herein set forth, each Right will entitle the holder
thereof, from and after the Separation Time and prior to the Expiration Time, to
purchase one Common Share for the Exercise Price (which Exercise Price and number of
Common Shares are subject to adjustment as set forth below). Notwithstanding any other
provision of this Agreement, any Rights held by the Corporation or any of its
Subsidiaries shall be void.
|
|
(b)
|
|
Until the Separation Time:
|
|
(i)
|
|
the Rights shall not be exercisable and no Right may be
exercised; and
|
|
(ii)
|
|
each Right will be evidenced by the certificate for the
associated Common Share registered in the name of the holder thereof (which
certificate shall also be deemed to represent a Rights Certificate) and will
be transferable only together with, and will be transferred by a transfer
of, such associated Common Share.
|
|
(c)
|
|
From and after the Separation Time and prior to the Expiration Time:
|
|
(i)
|
|
the Rights shall be exercisable; and
|
- 19 -
|
(ii)
|
|
the registration and transfer of Rights shall be separate
from and independent of the Common Shares.
|
Promptly following the Separation Time, the Corporation will prepare and the Rights
Agent will mail to each holder of record of Common Shares as of the Separation Time
(other than an Acquiring Person and, in respect of any Rights Beneficially Owned by
such Acquiring Person which are not held of record by such Acquiring Person, the
holder of record of such Rights (a
Nominee
)) at such holders address as shown by
the records of the Corporation (the Corporation hereby agreeing to furnish copies of
such records to the Rights Agent for this purpose):
|
(x)
|
|
a Rights Certificate appropriately completed, representing the
number of Rights held by such holder at the Separation Time and having such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Corporation may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any law, rule or regulation or with any rule or regulation of
any self-regulatory organization, stock exchange or quotation system on which
the Rights may from time to time be listed or traded, or to conform to usage;
and
|
|
(y)
|
|
a disclosure statement describing the Rights,
|
provided that a Nominee shall be sent the materials provided for in (x) and (y) in
respect of all Common Shares held of record by it which are not Beneficially Owned
by an Acquiring Person.
|
(d)
|
|
Rights may be exercised, in whole or in part, on any Business Day after the
Separation Time and prior to the Expiration Time by submitting to the Rights Agent:
|
|
(i)
|
|
the Rights Certificate evidencing such Rights;
|
|
(ii)
|
|
an election to exercise such Rights (an
Election to
Exercise
) substantially in the form attached to the Rights Certificate
appropriately completed and executed by the holder or his executors or
administrators or other personal representatives or his or their legal
attorney duly appointed by an instrument in writing in form and executed in
a manner satisfactory to the Rights Agent; and
|
|
(iii)
|
|
payment by certified cheque, bankers draft or money
order payable to the order of the Rights Agent, of a sum equal to the
Exercise Price multiplied by the number of Rights being exercised and a sum
sufficient to cover any transfer tax or charge which may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for Common Shares
in a name other than that of the holder of the Rights being exercised.
|
- 20 -
|
(e)
|
|
Upon receipt of a Rights Certificate, together with a duly completed Election
to Exercise executed in accordance with Clause 2.2(d)(ii), which does not indicate that
such Right is null and void as provided by Subsection 3.1(b), and payment as set forth
in Clause 2.2(d)(iii), the Rights Agent (unless otherwise instructed by the Corporation
in the event that the Corporation is of the opinion that the Rights cannot be exercised
in accordance with this Agreement) will thereupon promptly:
|
|
(i)
|
|
requisition from the transfer agent for the Common Shares
certificates representing the number of such Common Shares to be purchased
(the Corporation hereby irrevocably agreeing to authorize its transfer agent
to comply with all such requisitions);
|
|
(ii)
|
|
when appropriate, requisition from the Corporation the
amount of cash to be paid in lieu of issuing fractional Common Shares;
|
|
(iii)
|
|
after receipt of the certificates referred to in Clause
2.2(e)(i), deliver the same to or upon the order of the registered holder of
such Rights Certificates, registered in such name or names as may be
designated by such holder;
|
|
(iv)
|
|
after receipt of the certificates referred to in Clause
2.2(e)(i), deliver any cash referred to in Clause 2.2(e)(ii) to or to the
order of the registered holder of such Rights Certificate; and
|
|
(v)
|
|
tender to the Corporation all payments received on
exercise of the Rights.
|
|
(f)
|
|
In case the holder of any Rights exercises less than all the Rights evidenced
by such holders Rights Certificate, a new Rights Certificate evidencing the Rights
remaining unexercised (subject to the provisions of Subsection 5.6(a)) will be issued
by the Rights Agent to such holder or to such holders duly authorized assigns.
|
|
(g)
|
|
The Corporation covenants and agrees that it will:
|
|
(i)
|
|
take all such action as may be necessary and within its
power to ensure that all Common Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Common Shares
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully paid and non-assessable.
|
|
(ii)
|
|
take all such actions as may be necessary and within its
power to comply with the requirements of the Corporations Act, the
Securities Act and the securities laws or comparable legislation of each of
the provinces of Canada and any other applicable law, rule or regulation, in
connection with the issuance and delivery of the Rights Certificates and the
issuance of any Common Shares upon exercise of Rights;
|
- 21 -
|
(iii)
|
|
use reasonable efforts to cause all Common Shares issued
upon exercise of Rights to be listed on the stock exchanges on which such
Common Shares were traded immediately prior to the Stock Acquisition Date;
|
|
(iv)
|
|
cause to be reserved and kept available out of the
authorized and unissued Common Shares, the number of Common Shares that, as
provided in this Agreement, will from time to time be sufficient to permit
the exercise in full of all outstanding Rights;
|
|
(v)
|
|
pay when due and payable, if applicable, any and all
federal, provincial and municipal transfer taxes and charges (not including
any income or capital taxes of the holder or exercising holder or any
liability of the Corporation to withhold tax) which may be payable in
respect of the original issuance or delivery of the Rights Certificates, or
certificates for Common Shares to be issued upon exercise of any Rights,
provided that the Corporation shall not be required to pay any transfer tax
or charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for Common Shares in a name other than that of the holder of
the Rights being transferred or exercised; and
|
|
(vi)
|
|
after the Separation Time, except as permitted by Section
5.1, not take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
|
2.3
|
|
Adjustments to Exercise Price; Number of Rights
|
The Exercise Price, the number and kind of securities subject to purchase upon exercise of each
Right and the number of Rights outstanding are subject to adjustment from time to time as provided
in this Section 2.3.
|
(a)
|
|
In the event the Corporation at any time after the Separation Time and prior to
the Expiration Time:
|
|
(i)
|
|
declares or pays a dividend on Common Shares payable in
Common Shares (or capital stock or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares or other capital
stock) other than pursuant to any optional stock dividend program, dividend
reinvestment plan or a dividend payable in Voting Shares in lieu of a
regular periodic cash dividend;
|
|
(ii)
|
|
subdivides or changes the then outstanding Common Shares
into a greater number of Common Shares;
|
- 22 -
|
(iii)
|
|
consolidates or changes the then outstanding Common
Shares into a smaller number of Common Shares; or
|
|
(iv)
|
|
otherwise issues any Common Shares (or other securities
exchangeable for or convertible into or giving a right to acquire Common
Shares) in respect of, in lieu of or in exchange for existing Common Shares
in a reclassification, amalgamation, merger, statutory arrangement, or
consolidation,
|
the Exercise Price, the number of Rights outstanding and the securities purchasable
upon exercise of the Rights shall be adjusted as of the record or effective date as
follows:
|
(x)
|
|
the Exercise Price in effect after such adjustment will be
equal to the Exercise Price in effect immediately prior to such adjustment
divided by the number of Common Shares (the
Expansion Factor
) that a holder
of one Common Share immediately prior to such dividend, subdivision, change,
consolidation or issuance would hold thereafter as a result thereof (assuming
the exercise of any such exchange, conversion or acquisition rights); and
|
|
(y)
|
|
each Right held prior to such adjustment shall become that
number of Rights equal to the Expansion Factor;
|
and the adjusted number of Rights will be deemed to be allocated among the Common
Shares with respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision, change,
consolidation or issuance, so that each such Common Share will have exactly one
Right associated with it.
To the extent that any such exchange, conversion or acquisition rights are not
exercised prior to the expiration thereof, the Exercise Price shall be readjusted to
the Exercise Price which would be in effect, based on the number of Common Shares
actually issued on the exercise of such rights.
In the event the Corporation at any time after the Record Time and prior to the
Separation Time issues any Common Shares (or other securities exchangeable for or
convertible into or giving a right to acquire Common Shares), each such Common Share
shall automatically have one new Right associated with it, which Right shall be
evidenced by the certificate representing such associated Common Share.
- 23 -
|
(b)
|
|
If, after the Separation Time and prior to the Expiration Time, the Corporation
shall issue any shares of capital stock other than Common Shares (or other securities
exchangeable for or convertible into or giving a right to acquire shares of any such
capital stock) in a transaction of a type described in Clause 2.3(a)(i) or (iv), the
shares of such capital stock shall be treated herein as nearly equivalent to Common
Shares to the extent practicable and appropriate under the
circumstances, as determined by the Board of Directors, and the shares purchasable
upon exercise of Rights shall be adjusted as necessary such that the shares
purchasable upon exercise of each Right after such adjustment will be the shares
that a holder of the shares purchasable upon exercise of one Right immediately prior
to such issuance would hold thereafter as a result of such issuance. Notwithstanding
Section 5.5, the Corporation and the Rights Agent are authorized and agree to amend
this Agreement in order to give effect to the foregoing.
|
|
(c)
|
|
In the event that at any time after the Record Time and prior to the Expiration
Time there shall occur:
|
|
(i)
|
|
a reclassification or redesignation of the Common Shares
or any change of the Common Shares into other shares (other than as the
result of an event described in Subsection 2.3(a));
|
|
(ii)
|
|
a consolidation, merger or amalgamation of the
Corporation with or into another body corporate (other than a consolidation,
merger or amalgamation which does not result in a reclassification of the
Common Shares or a change of the Common Shares into other shares); or
|
|
(iii)
|
|
the transfer of all or substantially all of the assets
of the Corporation to another body corporate;
|
a holder of a Right shall thereafter be entitled to receive and shall accept upon
exercise of such Right, in lieu of the number of Common Shares to which such holder
was theretofor entitled to acquire upon such exercise, the kind and amount of shares
and/or other securities or property which such holder would have been entitled to
receive as a result of such occurrence if, on the effective date thereof, such
holder had been the holder of the number of Common Shares to which such holder was
then entitled upon exercise of such Right. The Corporation shall take all necessary
steps so that holders of Rights shall thereafter be entitled to acquire such shares
and/or other securities or property, subject to adjustment thereafter in accordance
with provisions the same, as nearly as may be possible, as those contained in this
Section 2.3.
- 24 -
|
(d)
|
|
Notwithstanding anything herein to the contrary, no adjustment in the Exercise
Price shall be required unless such adjustment would require an increase or decrease of
at least one percent in the Exercise Price; provided, however, that any adjustments
which by reason of this Subsection 2.3(d) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations under
this Section 2.3 shall be made to the nearest cent or to the nearest ten-thousandth of
a share. Notwithstanding the first sentence of this Subsection 2.3(d), any adjustment
required by this Section 2.3 shall be made no later than the earlier of:
|
|
(i)
|
|
three years from the date of the transaction which gives
rise to such adjustment; and
|
|
(ii)
|
|
the Expiration Time.
|
|
(e)
|
|
Irrespective of any adjustment or change in the Exercise Price or the number of
Common Shares issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Exercise Price per Common
Share and the number of Common Shares which were expressed in the initial Rights
Certificates issued hereunder.
|
|
(f)
|
|
In any case in which this Section 2.3 shall require that an adjustment in the
Exercise Price be made effective as of a record date for a specified event, the
Corporation may elect to defer until the occurrence of such event the issuance to the
holder of any Right exercised after such record date the number of Common Shares and
other securities of the Corporation, if any, issuable upon such exercise over and above
the number of Common Shares and other securities of the Corporation, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Corporation shall deliver to such holder an
appropriate instrument evidencing such holders right to receive such additional shares
(fractional or otherwise) or other securities upon the occurrence of the event
requiring such adjustment.
|
|
(g)
|
|
Notwithstanding anything contained in this Section 2.3 to the contrary, the
Corporation shall be entitled to make such reductions in the Exercise Price, in
addition to those adjustments expressly required by this Section 2.3, as and to the
extent that in their good faith judgment the Board of Directors shall determine to be
advisable, in order that any:
|
|
(i)
|
|
consolidation or subdivision of Common Shares;
|
|
(ii)
|
|
issuance (wholly or in part for cash) of Common Shares or
securities that by their terms are convertible into or exchangeable for
Common Shares;
|
|
(iii)
|
|
stock dividends; or
|
|
(iv)
|
|
issuance of rights, options or warrants, hereafter made
by the Corporation to holders of its Common Shares, shall not be taxable to
such shareholders.
|
|
(h)
|
|
Whenever an adjustment to the Exercise Price or a change in the securities
purchasable upon exercise of the Rights is made pursuant to this Section 2.3, the
Corporation shall promptly and in any event, where such change or adjustment occurs
prior to the Separation Time, not later than the Separation Time:
|
|
(i)
|
|
file with the Rights Agent and with each transfer agent
for the Common Shares a certificate specifying the particulars of such
adjustment or change; and
|
- 25 -
|
(ii)
|
|
cause notice of the particulars of such adjustment or
change to be given to the holders of the Rights.
|
Failure to file such certificate or to cause such notice to be given as aforesaid,
or any defect therein, shall not affect the validity of such adjustment or change.
|
(i)
|
|
The Corporation covenants and agrees that, after the Separation Time, it will
not, except as permitted by the provisions hereof, take (or permit any Subsidiary of
the Corporation to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
|
2.4
|
|
Date on Which Exercise Is Effective
|
Each Person in whose name any certificate for Common Shares or other securities, if applicable, is
issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares or other securities, if applicable, represented thereon, and such
certificate shall be dated the date upon which the Rights Certificate evidencing such Rights was
duly surrendered in accordance with Subsection 2.2(d) (together with a duly completed Election to
Exercise) and payment of the Exercise Price for such Rights (and any applicable transfer taxes and
other governmental charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Common Share transfer books
of the Corporation are closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day on which the
Common Share transfer books of the Corporation are open.
2.5
|
|
Execution, Authentication, Delivery and Dating of Rights Certificates
|
|
(a)
|
|
The Rights Certificates shall be executed on behalf of the Corporation by its
Chief Executive Officer, Chief Financial Officer or any director under the corporate
seal of the Corporation reproduced thereon. The signature of any of these individuals
on the Rights Certificates may be manual or facsimile. Rights Certificates bearing the
manual or facsimile signatures of individuals who were at any time the proper officers
of the Corporation shall bind the Corporation, notwithstanding that such individuals or
any of them have ceased to hold such offices either before or after the
countersignature and delivery of such Rights Certificates.
|
|
(b)
|
|
Promptly after the Corporation learns of the Separation Time, the Corporation
will notify the Rights Agent of such Separation Time and will deliver Rights
Certificates executed by the Corporation to the Rights Agent for countersignature and
disclosure statements describing the Rights, and the Rights Agent shall manually
countersign (in a manner satisfactory to the Corporation) and send such Rights
Certificates to the holders of the Rights pursuant to Subsection
2.2(c) hereof. No Rights Certificate shall be valid for any purpose until
countersigned by the Rights Agent as aforesaid.
|
|
(c)
|
|
Each Rights Certificate shall be dated the date of countersignature thereof.
|
- 26 -
2.6
|
|
Registration, Transfer and Exchange
|
|
(a)
|
|
After the Separation Time, the Corporation will cause to be kept a register
(the
Rights Register
) in which, subject to such reasonable regulations as it may
prescribe, the Corporation will provide for the registration and transfer of Rights.
The Rights Agent is hereby appointed registrar for the Rights (the
Rights Registrar
)
for the purpose of maintaining the Rights Register for the Corporation and registering
Rights and transfers of Rights as herein provided and the Rights Agent hereby accepts
such appointment. In the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the Rights Register at all
reasonable times.
|
After the Separation Time and prior to the Expiration Time, upon surrender for
registration of transfer or exchange of any Rights Certificate, and subject to the
provisions of Subsection 2.6(c), the Corporation shall execute, and the Rights Agent
shall manually countersign and deliver, in the name of the holder or the designated
transferee or transferees, as required pursuant to the holders instructions, one or
more new Rights Certificates evidencing the same aggregate number of Rights as did
the Rights Certificates so surrendered.
|
(b)
|
|
All Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Corporation, and such Rights shall
be entitled to the same benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
|
|
(c)
|
|
Every Rights Certificate surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed
by the holder thereof or such holders attorney duly authorized in writing. As a
condition to the issuance of any new Rights Certificate under this Section 2.6, the
Corporation or the Rights Agent may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the reasonable fees and expenses of the Rights Agent)
connected therewith.
|
2.7
|
|
Mutilated, Destroyed, Lost and Stolen Rights Certificates
|
|
(a)
|
|
If any mutilated Rights Certificate is surrendered to the Rights Agent prior to
the Expiration Time, the Corporation shall execute and the Rights Agent shall
countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so surrendered.
|
- 27 -
|
(b)
|
|
If there shall be delivered to the Corporation and the Rights Agent prior to
the Expiration Time:
|
|
(i)
|
|
evidence to their reasonable satisfaction of the
destruction, loss or theft of any Rights Certificate; and
|
|
(ii)
|
|
such security or indemnity as may be reasonably required
by each of them in their sole discretion to save each of them and any of
their agents harmless;
|
then, in the absence of notice to the Corporation or the Rights Agent that such
Rights Certificate has been acquired by a bona fide purchaser, the Corporation shall
execute and upon the Corporations request the Rights Agent shall countersign and
deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new
Rights Certificate evidencing the same number of Rights as did the Rights
Certificate so destroyed, lost or stolen.
|
(c)
|
|
As a condition to the issuance of any new Rights Certificate under this Section
2.7, the Corporation or the Rights Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the reasonable fees and expenses of the Rights Agent)
connected therewith.
|
|
(d)
|
|
Every new Rights Certificate issued pursuant to this Section 2.7 in lieu of any
destroyed, lost or stolen Rights Certificate shall evidence an original additional
contractual obligation of the Corporation, whether or not the destroyed, lost or stolen
Rights Certificate shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Agreement equally and proportionately with any and all other
Rights, duly issued hereunder.
|
2.8
|
|
Persons Deemed Owners of Rights
|
The Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and
treat the Person, in whose name a Rights Certificate (or, prior to the Separation Time, the
associated Common Share certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever. In this Agreement, unless the context otherwise
requires, the term holder of any Right means the registered holder of such Right (or, prior to
the Separation Time, the associated Common Share).
2.9
|
|
Delivery and Cancellation of Certificates
|
All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or
exchange shall, if surrendered to any Person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly cancelled by the Rights Agent. The Corporation may
at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered hereunder which the
Corporation may have acquired in any manner whatsoever, and all Rights Certificates so delivered
shall be promptly cancelled by the Rights Agent. No Rights Certificate shall be countersigned in
lieu of or in exchange for any Rights Certificates cancelled as provided in this Section 2.9,
except as expressly permitted by this Agreement. The Rights Agent shall, subject to applicable
laws, destroy all cancelled Rights Certificates and deliver a certificate of destruction to the
Corporation on request.
- 28 -
2.10
|
|
Agreement of Rights Holders
|
Every holder of Rights, by accepting the same, consents and agrees with the Corporation and the
Rights Agent and with every other holder of Rights that:
|
(a)
|
|
such holder of Rights shall be bound by and subject to the provisions of this
Agreement, as amended from time to time in accordance with the terms hereof, in respect
of all Rights held;
|
|
(b)
|
|
prior to the Separation Time, each Right will be transferable only together
with, and will be transferred by a transfer of, the associated Common Share certificate
representing such Right;
|
|
(c)
|
|
after the Separation Time, the Rights Certificates will be transferable only on
the Rights Register as provided herein;
|
|
(d)
|
|
prior to due presentment of a Rights Certificate (or, prior to the Separation
Time, the associated Common Share certificate) for registration of transfer, the
Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may
deem and treat the Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Share certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on such Rights Certificate or the associated Common Share
certificate made by anyone other than the Corporation or the Rights Agent) for all
purposes whatsoever, and neither the Corporation nor the Rights Agent shall be affected
by any notice to the contrary;
|
|
(e)
|
|
such holder of Rights has waived his right to receive any fractional Rights or
any fractional shares or other securities upon exercise of a Right (except as provided
herein);
|
|
(f)
|
|
that, subject to the provisions of Section 5.5, without the approval of any
holder of Rights or Voting Shares and upon the sole authority of the Board of
Directors, this Agreement may be supplemented or amended from time to time to cure any
ambiguity or to correct or supplement any provision contained herein which may be
inconsistent with the intent of this Agreement or is otherwise defective, as provided
here; and
|
- 29 -
|
(g)
|
|
notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Rights Agent shall have any liability to any holder of a Right or
any other Person as a result of its inability to perform any of its obligations under
this Agreement by reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation.
|
2.11
|
|
Rights Certificate Holder Not Deemed a Shareholder
|
No holder, as such, of any Rights or Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose whatsoever the holder of any Common Share or any other share
or security of the Corporation which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights Certificate be construed
or deemed or confer upon the holder of any Right or Rights Certificate, as such, any right, title,
benefit or privilege of a holder of Common Shares or any other shares or securities of the
Corporation or any right to vote at any meeting of shareholders of the Corporation whether for the
election of directors or otherwise or upon any matter submitted to holders of Common Shares or any
other shares of the Corporation at any meeting thereof, or to give or withhold consent to any
action of the Corporation, or to receive notice of any meeting or other action affecting any holder
of Common Shares or any other shares of the Corporation except as expressly provided herein, or to
receive dividends, distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by Rights Certificates shall have been duly exercised in accordance with the terms and
provisions hereof.
ARTICLE 3 ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
|
(a)
|
|
Subject to Subsection 3.1(b) and Sections 5.1 and 5.2, in the event that prior
to the Expiration Time a Flip-in Event shall occur, the Corporation shall take such
action as shall be necessary to ensure and provide, within 10 Business Days thereafter
or such longer period as may be required to satisfy the requirements of applicable
securities laws or comparable legislation so that, except as provided below, each Right
shall thereafter constitute the right to purchase from the Corporation, upon exercise
thereof in accordance with the terms hereof, that number of Common Shares having an
aggregate Market Price on the date of consummation or occurrence of such Flip-in Event
equal to twice the Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in a manner analogous to the applicable
adjustment provided for in Section 2.3 in the event that after such occurrence, an
event of a type analogous to any of the events described in Section 2.3 shall have
occurred).
|
- 30 -
|
(b)
|
|
Notwithstanding anything in this Agreement to the contrary, upon the occurrence
of any Flip-in Event, any Rights that are or were Beneficially Owned on or after the
earlier of the Separation Time or the Stock Acquisition Date by:
|
|
(i)
|
|
an Acquiring Person (or any Affiliate or Associate of an
Acquiring Person or any Person acting jointly or in concert with an
Acquiring Person or any Affiliate or Associate of an Acquiring Person); or
|
|
(ii)
|
|
a transferee of Rights, directly or indirectly, from an
Acquiring Person (or any Affiliate or Associate of an Acquiring Person or
any Person acting jointly or in concert with an Acquiring Person or any
Affiliate or Associate of an Acquiring Person), where such transferee
becomes a transferee concurrently with or subsequent to the Acquiring Person
becoming such in a transfer that the Board of Directors has determined is
part of a plan, understanding or scheme of an Acquiring Person (or any
Affiliate or Associate of an Acquiring Person or any Person acting jointly
or in concert with an Acquiring Person or any Affiliate or Associate of an
Acquiring Person), that has the purpose or effect of avoiding this Clause
3.1(b),
|
shall become null and void without any further action, and any holder of such Rights
(including transferees) shall thereafter have no right to exercise such Rights under
any provision of this Agreement and further shall thereafter not have any other
rights whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise.
|
(c)
|
|
Any Rights Certificate that represents Rights Beneficially Owned by a Person
described in either Clause 3.1(b)(i) or (ii) or transferred to any nominee of any such
Person, and any Rights Certificate issued upon the transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall contain
the following legend:
|
The Rights represented by this Rights Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate
of an Acquiring Person or a Person who was acting jointly or in
concert with an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Shareholder
Rights Plan Agreement). This Rights Certificate and the Rights
represented hereby are void or shall become void in the
circumstances specified in Subsection 3.1(b) of the Shareholder
Rights Plan Agreement.
provided, however, that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such legend
but shall impose such legend only if instructed to do so by the Corporation in
writing or if a holder fails to certify upon transfer
or exchange in the space provided on the Rights Certificate that such holder is not
a Person described in such legend.
- 31 -
ARTICLE 4 THE RIGHTS AGENT
|
(a)
|
|
The Corporation hereby appoints the Rights Agent to act as agent for the
Corporation and the holders of the Rights in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Corporation may from
time to time appoint such co-Rights Agents (the
Co-Rights Agents
) as it may deem
necessary or desirable subject to the approval of the Rights Agent. In the event the
Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights
Agent and Co-Rights Agents shall be as the Corporation may determine subject to the
approval of the Rights Agent. The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and other disbursements
reasonably incurred in the execution and administration of this Agreement and the
exercise and performance of its duties hereunder, with the prior approval of the
Corporation. The Corporation will fully indemnify and hold the Rights Agent, its
officers, directors and employees and agents harmless from and against any and all
losses, damages, costs, charges, counsel fees, payments, expenses and liabilities
arising directly or indirectly out of its agency relationship to the Corporation as set
forth in this Agreement (which right to indemnification will survive the termination of
this Agreement or the resignation or removal of the Rights Agent) except for any
liability arising out of the negligence or intentional misconduct by the Rights Agent.
In the absence of negligence or intentional misconduct on its part, the Rights Agent
shall not be liable for any action taken, suffered, omitted by it or for any error of
judgement made by it in the performance of its duties under this Agreement. In no event
will the Rights Agent be liable for special, indirect, consequential or punitive loss
or damages of any kind whatsoever (including but not limited to lost profits), even if
the Rights Agent has been advised of the possibility of such damages.
|
|
(b)
|
|
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any certificate for Common Shares,
Rights Certificate, certificate for other securities of the Corporation, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
|
|
(c)
|
|
The Corporation shall inform the Rights Agent in a reasonably timely manner of
events which may materially affect the administration of this Agreement by the Rights
Agent and, at any time
upon request shall provide to the Rights Agent an incumbency certificate certifying
the then current officers of the Corporation.
|
- 32 -
|
(d)
|
|
In the event any questions or dispute arises with respect to the Rights Agents
duties hereunder, the Rights Agent shall not be required to act or be held liable or
responsible for its failure or refusal to act until the question or dispute has been
(i) judicially settled (and, if appropriate the Rights Agent may file a suit in
interpleader or for a declaratory judgement for such purpose) by final judgement by a
court of competent jurisdiction that is binding on all parties in the matter and is no
longer subject to review or appeal, or (ii) settled by written document in form and
substance satisfactory to the Rights Agent and executed by the Corporation. In
addition, the Rights Agent may require for such purpose, but shall not be obligated to
require, the execution of such written settlement by parties that may have an interest
in the settlement.
|
4.2
|
|
Merger, Amalgamation or Consolidation or Change of Name of Rights Agent
|
|
(a)
|
|
Any corporation into which the Rights Agent may be merged or amalgamated or
with which it may be consolidated, or any corporation resulting from any merger,
amalgamation, statutory arrangement or consolidation to which the Rights Agent or any
successor Rights Agent is a party, or any corporation succeeding to the shareholder or
stockholder services business of the Rights Agent or any successor Rights Agent, will
be the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 4.4 hereof. In case, at the time such successor
Rights Agent succeeds to the agency created by this Agreement, any of the Rights
Certificates have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights have not been
countersigned, any successor Rights Agent may countersign such Rights Certificates in
the name of the predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
|
|
(b)
|
|
In case at any time the name of the Rights Agent is changed and at such time
any of the Rights Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt the countersignature under its prior name and deliver Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
|
- 33 -
4.3
|
|
Duties of Rights Agent
|
The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following
terms and conditions, all of which the Corporation and the holders of certificates for Common
Shares and the holders of Rights Certificates, by their acceptance thereof, shall be bound:
|
(a)
|
|
the Rights Agent may retain and consult with legal counsel (who may be legal
counsel for the Corporation) and the opinion of such counsel will be full and complete
authorization and protection to the Rights Agent as to any action taken or omitted by
it in good faith and in accordance with such opinion; the Rights Agent may also, with
the prior approval of the Corporation, consult with such other experts as the Rights
Agent shall consider necessary or appropriate to properly carry out the duties and
obligations imposed under this Agreement;
|
|
(b)
|
|
whenever in the performance of its duties under this Agreement, the Rights
Agent deems it necessary or desirable that any fact or matter be proved or established
by the Corporation prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to he conclusively proved and established by a certificate signed by a Person
believed by the Rights Agent to be the Chief Executive Officer, Chief Financial Officer
or any director of the Corporation and delivered to the Rights Agent, and such
certificate will be full authorization to the Rights Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in reliance upon
such certificate;
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(c)
|
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the Rights Agent will be liable hereunder for its own negligence, bad faith or
wilful misconduct;
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(d)
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the Rights Agent will not be liable for or by reason of any of the statements
of fact or recitals contained in this Agreement or in the certificates for Common
Shares or the Rights Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and will be deemed to have
been made by the Corporation only;
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- 34 -
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(e)
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the Rights Agent will not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
authorization, execution and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any certificate for a Common Share or Rights Certificate
(except its countersignature thereof); nor will it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in any Rights
Certificate; nor will it be responsible for any change in the exercisability of the
Rights (including the Rights becoming void pursuant to Subsection 3.1(b) hereof) or any
adjustment required under the provisions of Section 2.3 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the exercise of
Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment); nor will it by any act
hereunder be deemed to make any representation or warranty as to the authorization
of any Common Shares to be issued pursuant to this Agreement or any Rights or as to
whether any Common Shares will, when issued, be duly and validly authorized,
executed, issued and delivered and fully paid and non-assessable;
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(f)
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the Corporation agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions of this
Agreement;
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(g)
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the Rights Agent is hereby authorized and directed to accept instructions in
writing with respect to the performance of its duties hereunder from any individual
believed by the Rights Agent to be the Chief Executive Officer, Chief Financial Officer
or any director of the Corporation, and to apply to such individuals for advice or
instructions in connection with its duties, and it shall not be liable for any action
taken or suffered by it in good faith in accordance with instructions of any such
individual;
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(h)
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the Rights Agent and any shareholder, director, officer or employee of the
Rights Agent may buy, sell or deal in Common Shares, Rights or other securities of the
Corporation or become pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money to the Corporation or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement;
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(i)
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nothing herein shall preclude the Rights Agent from acting in any other
capacity for the Corporation or for any other legal entity; and
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(j)
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the Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent will not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for any loss to the
Corporation resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment thereof.
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- 35 -
4.4
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Change of Rights Agent
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The Rights Agent may resign and be discharged from its duties under this Agreement upon 60 days
notice (or such lesser notice as is acceptable to the Corporation) in writing mailed to the
Corporation and to each transfer agent of Common Shares by registered or certified mail. The
Corporation may remove the Rights Agent upon 30 days notice in writing, mailed to the Rights Agent
and to each transfer agent of the Common Shares by registered or certified
mail. If the Rights Agent should resign or be removed or otherwise become incapable of acting, the
Corporation will appoint a successor to the Rights Agent. If the Corporation fails to make such
appointment within a period of 30 days after such removal or after it has been notified in writing
of such resignation or incapacity by the resigning or incapacitated Rights Agent, then by prior
written notice to the Corporation the resigning Rights Agent at the Corporations expense or the
holder of any Rights (which holder shall, with such notice, submit such holders Rights
Certificate, if any, for inspection by the Corporation), may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Corporation or by such a court, shall be a corporation incorporated under the laws
of Canada or a province thereof authorized to carry on the business of a trust company in the
province of British Colombia. After appointment, the successor Rights Agent will be vested with the
same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall, following payment of all
outstanding fees and expenses owed to it under this agreement, deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Corporation will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and mail a notice thereof in
writing to the holders of the Rights in accordance with Section 5.10. Failure to give any notice
provided for in this Section 4.4, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of any successor
Rights Agent, as the case may be.
ARTICLE 5 MISCELLANEOUS
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(a)
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Until the occurrence of a Flip-in Event, as to which the application of Section
3.1 has not been waived pursuant to Section 5.2, the Board of Directors,
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(i)
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may, at any time prior to the Separation Time, subject to
receipt of Shareholder Approval,
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(ii)
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may, at any time after the Separation Time, subject to
receipt of the consent of holders of Rights given in accordance with 5.5,
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elect to redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.00001 per Right, appropriately adjusted in a manner
analogous to the applicable adjustment provided for in Section 2.3, if an event
of the type analogous to any of the events described in Section 2.3 shall have
occurred (such redemption price being herein referred to as the
Redemption
Price
).
- 36 -
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(b)
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If a Person acquires, pursuant to a Permitted Bid or a Competing Permitted Bid
or pursuant to an Exempt Acquisition occurring under Subsection 5.2(b) hereof,
outstanding Voting Shares, the
Board of Directors of the Corporation shall, immediately upon such acquisition and
without further formality, be deemed to have elected to redeem the Rights at the
Redemption Price.
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(c)
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Where a Take-over Bid that is not a Permitted Bid or Competing Permitted Bid
expires, is withdrawn or otherwise terminated after the Separation Time has occurred
and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to
redeem all of the outstanding Rights at the Redemption Price.
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(d)
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If the Board of Directors elects to or is deemed to have elected to redeem the
Rights (i) the right to exercise the Rights will thereupon, without further action and
without notice, terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price, and (ii) subject to Subsection 5.1(f), no further
Rights shall thereafter be issued.
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(e)
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Within 10 Business Days of the Board of Directors electing or having been
deemed to have elected to redeem the Rights, the Corporation shall give notice of
redemption to the holders of the then outstanding Rights by mailing such notice to each
such holder at his last address as it appears upon the Rights Register of the Rights
Agent, or, prior to the Separation Time, on the share register maintained by the
Corporations transfer agent or transfer agents. Each such notice of redemption shall
state the method by which the payment of the Redemption Price shall be made.
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(f)
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Upon the Rights being redeemed pursuant to Subsection 5.1(c), all the
provisions of this Agreement shall continue to apply as if the Separation Time had not
occurred and Rights Certificates representing the number of Rights held by each holder
of record of Common Shares as of the Separation Time had not been mailed to each such
holder and for all purposes of this Agreement, the Separation Time shall be deemed not
to have occurred.
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5.2
|
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Waiver of Flip-In Events
|
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(a)
|
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With the prior consent of holders of Voting Shares, the Board of Directors may,
at any time prior to the occurrence of a Flip-in Event that would occur by reason of an
acquisition of Voting Shares of Convertible Securities otherwise than pursuant to a
Take-over Bid made by means of a take-over bid circular to all holders of Voting Shares
or otherwise than in the circumstances set forth in Subsection 5.2(c) and subject to
receipt of Shareholder Approval, waive the application of Section 3.1 to such Flip-in
Event by written notice delivered to the Rights Agent.
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(b)
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The Board of Directors may, at any time prior to the occurrence of a Flip-in
Event that would occur as a result of a Take-over Bid made by way of a take-over bid
circular sent to all holders of Voting Shares, waive the application of Section 3.1 to
such Flip-in Event by written notice delivered to the Rights Agent; provided, however,
that if the Board of Directors waives the application of Section 3.1 to such a Flip-in
Event, the Board of Directors shall be deemed to have
waived the application of Section 3.1 to any other Flip-in Event occurring by reason
of any Take-over Bid which is made by means of a take-over bid circular to all
holders of Voting Shares prior to the expiry of any Take-over Bid in respect of
which a waiver is, or is deemed to have been, granted under this Subsection 5.2(b).
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- 37 -
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(c)
|
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The Board of Directors may waive the application of Section 3.1 in respect of
the occurrence of any Flip-in Event if the Board of Directors has determined that a
Person became an Acquiring Person by inadvertence and without any intention to become,
or knowledge that it would become, an Acquiring Person under this Agreement and, in the
event that such a waiver is granted by the Board of Directors, such Stock Acquisition
Date shall be deemed not to have occurred. Any such waiver pursuant to this Subsection
5.2(c) must be on the condition that such Person, within 14 days after the foregoing
determination by the Board of Directors or such earlier or later date as the Board of
Directors may determine (the
Disposition Date
), has reduced its Beneficial Ownership
of Voting Shares such that the Person is no longer an Acquiring Person. If the Person
remains an Acquiring Person at the close of business on the Disposition Date, the
Disposition Date shall be deemed to be the date of occurrence of a further Stock
Acquisition Date and Section 3.1 shall apply thereto.
|
No Person shall have any rights whatsoever pursuant to this Agreement or in respect of any Right
after the Expiration Time, except the Rights Agent as specified in Subsection 4.1(a) of this
Agreement.
5.4
|
|
Issuance of New Rights Certificates
|
Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Rights Certificates evidencing Rights in such form as may
be approved by the Board of Directors to reflect any adjustment or change in the number or kind or
class of securities purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement.
5.5
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Supplements and Amendments
|
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(a)
|
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The Corporation may, at any time without the approval of any holders of Rights
or Shareholder Approval, make amendments to this Agreement to correct any clerical or
typographical error or which are required to maintain the validity of this Agreement as
a result of any change in any applicable legislation or regulations or rules
thereunder. The Corporation may, prior to the date of the shareholders meeting
referred to in Section 5.16, supplement, amend, vary, rescind or delete any of the
provisions of this Agreement without the approval of any holders of Rights or Voting
Shares where the Board of Directors acting in good faith deems such action necessary or
desirable. Notwithstanding anything in this Section 5.5 to the contrary, no such
supplement or amendment
shall be made to the provisions of Article 4 except with the written concurrence of
the Rights Agent to such supplement or amendment.
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- 38 -
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(b)
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Subject to Subsection 5.5(a), the Corporation may, with the prior consent of
the holders of Voting Shares obtained as set forth below, at any time prior to the
Separation Time, supplement, amend, vary, rescind or delete any of the provisions of
this Agreement and the Rights (whether or not such action would materially adversely
affect the interests of the holders of Rights generally). Such consent shall be deemed
to have been given if the action requiring such approval is authorized by the
affirmative vote of a majority of the votes cast by Independent Shareholders present or
represented at and entitled to be voted at a meeting of the holders of Voting Shares
duly called and held in compliance with applicable laws and the articles of the
Corporation.
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(c)
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The Corporation may, with the prior consent of the holders of Rights, at any
time on or after the Separation Time, amend supplement, amend, vary, rescind or delete
any of the provisions of this Agreement and the Rights (whether or not such action
would materially adversely affect the interests of the holders of Rights generally),
provided that no such amendment, variation or deletion shall be made to the provisions
of Article 4 except with the written concurrence of the Rights Agent thereto. Such
consent shall be deemed to have been given if such amendment, variation or deletion is
authorized by the affirmative votes of the holders of Rights present or represented at
and entitled to be voted at a meeting of the holders and representing 50% plus one of
the votes cast in respect thereof.
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(d)
|
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Any approval of the holders of Rights shall be deemed to have been given if the
action requiring such approval is authorized by the affirmative votes of the holders of
Rights present or represented at and entitled to be voted at a meeting of the holders
of Rights and representing a majority of the votes cast in respect thereof. For the
purposes hereof, each outstanding Right (other than Rights which are void pursuant to
the provisions hereof) shall be entitled to one vote, and the procedures for the
calling, holding and conduct of the meeting shall be those, as nearly as may be, which
are provided in the Corporations articles and the Corporations Act with respect to
meetings of shareholders of the Corporation.
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(e)
|
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Any amendments made by the Corporation to this Agreement pursuant to Subsection
5.5(a) which are required to maintain the validity of this Agreement as a result of any
change in any applicable legislation or regulation thereunder shall:
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(i)
|
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if made before the Separation Time, be submitted to the
shareholders of the Corporation at the next meeting of shareholders and the
shareholders may, by the majority referred to in Subsection 5.5(b), confirm
or reject such amendment; or
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- 39 -
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(ii)
|
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if made after the Separation Time, be submitted to the
holders of Rights at a meeting to be called for on a date not later than
immediately following the next meeting of shareholders of the Corporation
and the holders of Rights may, by resolution passed by the majority referred
to in Subsection 5.5(d), confirm or reject such amendment.
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(f)
|
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The Corporation shall give notice in writing to the Rights Agent of any
supplement, amendment, deletion, variation or rescission to this Agreement pursuant to
Section 5.10 within five Business Days of the date of any such supplement, amendment,
deletion, variation or rescission, provided that failure to give such notice, or any
defect therein, shall not affect the validity of any such supplement, amendment,
deletion, variation or rescission.
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Any such amendment shall, unless the Board of Directors otherwise stipulates, be effective from the
date of the resolution of the Board of Directors adopting such amendment, until it is confirmed or
rejected or until it ceases to be effective (as described in the next sentence) and, where such
amendment is confirmed, it continues in effect in the form so confirmed. If such amendment is
rejected by the shareholders or the holders of Rights or is not submitted to the shareholders or
holders of Rights as required, then such amendment shall cease to be effective from and after the
termination of the meeting at which it was rejected or to which it should have been but was not
submitted or from and after the date of the meeting of holders of Rights that should have been but
was not held, and no subsequent resolution of the Board of Directors to amend this Agreement to
substantially the same effect shall be effective until confirmed by the shareholders or holders of
Rights, as the case may be.
5.6
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Fractional Rights and Fractional Shares
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(a)
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The Corporation shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. After the Separation
Time, in lieu of issuing fractional Rights, the Corporation shall pay to the holders of
record of the Rights Certificates (provided the Rights represented by such Rights
Certificates are not void pursuant to the provisions of Subsection 3.1(b), at the time
such fractional Rights would otherwise be issuable), an amount in cash equal to the
fraction of the Market Price of one whole Right that the fraction of a Right that would
otherwise be issuable is of one whole Right.
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(b)
|
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The Corporation shall not be required to issue fractions of Common Shares upon
exercise of Rights or to distribute certificates which evidence fractional Common
Shares. In lieu of issuing fractional Common Shares, the Corporation shall pay to the
registered holders of Rights Certificates, at the time such Rights are exercised as
herein provided, an amount in cash equal to the fraction of the Market Price of one
Common Share that the fraction of a Common Share that would otherwise be issuable upon
the exercise of such Right is of one whole Common Share at the date of such exercise.
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- 40 -
|
(c)
|
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The Rights Agent shall have no obligation to make any payments in lieu of
issuing fractions of Rights or Common Shares pursuant to paragraphs (a) or (b),
respectively, unless and until the Corporation shall have provided to the Rights Agent
the amount of cash to be paid in lieu of issuing such fractional Rights or Common
Shares, as the case may be.
|
Subject to the terms of this Agreement, all rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the respective holders of
the Rights. Any holder of Rights, without the consent of the Rights Agent or of the holder of any
other Rights, may, on such holders own behalf and for such holders own benefit and the benefit of
other holders of Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce such holders right to exercise such holders Rights, or Rights
to which such holder is entitled, in the manner provided in such holders Rights and in this
Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and will be entitled to specific performance of the obligations under,
and injunctive relief against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
Any obligation of the Corporation or action or event contemplated by this Agreement shall be
subject to the receipt of any requisite approval or consent from any governmental or regulatory
authority. Without limiting the generality of the foregoing, any issuance of or delivery of debt or
equity securities (other than non-convertible debt securities) of the Corporation upon the exercise
of Rights and any amendment or supplement to this Agreement shall be subject to the prior written
consent of the Toronto Stock Exchange and any other exchange upon which the Common Shares may be
listed.
5.9
|
|
Declaration as to Non-Canadian Holders
|
If in the opinion of the Board of Directors (who may rely upon the advice of counsel) any action or
event contemplated by this Agreement would require compliance by the Corporation with the
securities laws or comparable legislation of a jurisdiction outside Canada, the Board of Directors
acting in good faith shall take such actions as it may deem appropriate to ensure such compliance.
In no event shall the Corporation or the Rights Agent be required to issue or deliver Rights or
securities issuable on exercise of Rights to Persons who are citizens, residents or nationals of
any jurisdiction other than Canada, in which such issue or delivery would be unlawful without
registration of the relevant Persons or securities for such purposes. If it would be necessary in
any jurisdiction other than Canada to register any of the Rights or securities issuable on exercise
of Rights prior to such issue or delivery, the Corporation will use its best efforts to establish
procedures whereby shareholders entitled to such Rights, or holders of Rights entitled to
securities upon the exercise of Rights, will have the ability to trade or exercise such Rights, or
and be issued such securities, without the need to register those securities in the jurisdiction
in which they reside, through the establishment of a trustee to hold and sell such securities in
Canada, or such other mechanism as the Board of Directors believes is appropriate.
- 41 -
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(a)
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Notices or demands authorized or required by this Agreement to be given or made
by the Rights Agent or by the holder of any Rights to or on the Corporation shall be
sufficiently given or made if delivered, sent by first class mail, postage prepaid, or
sent by facsimile or other form of recorded electronic communication, charges prepaid
and confirmed in writing, as follows:
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Ivanhoe Mines Ltd.
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654-999 Canada Place
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Vancouver, British Columbia
|
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V6C 3E1
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Attention:
|
|
Corporate Secretary
|
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Telecopy No.:
|
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604.682.2060
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with a copy to:
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Goodmans LLP
|
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355 Burrard Street, Suite 1900
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Vancouver, British Columbia
|
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V6C 2G8
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Attention:
|
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Paul Goldman
|
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Telecopy No.:
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604.682.7131
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Notices or demands authorized or required by this Agreement to be given or
made by the Corporation or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered, sent by first class
mail, postage prepaid, or sent by facsimile or other form of recorded
electronic communication, charges prepaid and confirmed in writing, as
follows:
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CIBC Mellon Trust Company
|
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|
1600 - 1066 West Hastings Street
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Vancouver, British Columbia
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V6E 3X
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Attention:
|
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Vice President, Client Services
|
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Telecopy No.:
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604.688.4301
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- 42 -
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(b)
|
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Notices or demands authorized or required by this Agreement to be given or made
by the Corporation or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first class mail, postage prepaid,
addressed to such holder at the address of such holder as it appears upon the register
of the Rights Agent or, prior to the Separation Time, on the register of the
Corporation for the Common Shares. Any notice which is mailed or sent in the manner
herein provided shall be deemed given, whether or not the holder receives the notice.
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(c)
|
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Any notice given or made in accordance with this Section 5.10 shall be deemed
to have been given and to have been received on the day of delivery, if so delivered,
on the third Business Day (excluding each day during which there exists any general
interruption of postal service due to strike, lockout or other cause) following the
mailing thereof, if so mailed, and on the day of telegraphing, telecopying or sending
of the same by other means of recorded electronic communication (provided such sending
is during the normal business hours of the addressee on a Business Day and if not, on
the first Business Day thereafter).
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(d)
|
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Each of the Corporation and the Rights Agent may from time to time change its
address for notice under Subsection 5.10(a) by notice to the other given in the manner
aforesaid.
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5.11
|
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Costs of Enforcement
|
The Corporation agrees that if the Corporation fails to fulfil any of its obligations pursuant to
this Agreement, then the Corporation will reimburse the holder of any Rights for the costs and
expenses (including legal fees) reasonably incurred by such holder to enforce his rights pursuant
to any Rights or this Agreement.
All the covenants and provisions of this Agreement by or for the benefit of the Corporation or the
Rights Agent shall bind and enure to the benefit of their respective successors and assigns
hereunder.
5.13
|
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Benefits of this Agreement
|
Nothing in this Agreement shall be construed to give to any Person other than the Corporation, the
Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this
Agreement; further, this Agreement shall be for the sole and exclusive benefit of the Corporation,
the Rights Agent and the holders of the Rights.
This Agreement and each Right issued hereunder shall be deemed to be a contract made under the laws
of the province of British Colombia and for all purposes shall be governed by and construed in
accordance with the laws of such province applicable to contracts to be made and performed entirely
within such province.
- 43 -
If any term or provision hereof or the application thereof to any circumstance shall, in any
jurisdiction and to any extent, be invalid or unenforceable, such term or provision shall be
ineffective only as to such jurisdiction and to the extent of such invalidity or unenforceability
in such jurisdiction without invalidating or rendering unenforceable or ineffective the remaining
terms and provisions hereof in such jurisdiction or the application of such term or provision in
any other jurisdiction or to circumstances other than those as to which it is specifically held
invalid or unenforceable.
This Agreement is effective and in full force and effect in accordance with its terms from and
after April 5, 2010. If this Agreement is not confirmed by resolution passed by a majority of
greater than 50% of the votes cast by (i) the Independent Shareholders and (ii) holders of Voting
Shares, only to the extent such a separate vote is required by a stock exchange on which Voting
Shares are listed, in each case present in person or voting by proxy at a meeting of those
shareholders of the Corporation who vote in respect of such confirmation at a meeting to be held
not later than six months from April 5, 2010, then this Agreement and all outstanding Rights shall
terminate and be void and of no further force and effect on and from date which is the earlier of
(a) the date of termination of the meeting called to consider the confirmation of the Agreement and
(b) the close of business on the date of termination of such meeting.
Notwithstanding the confirmation of this Agreement pursuant to Section 5.16, this Agreement must be
reconfirmed by a resolution passed by a majority of greater than 50% of the votes cast by the
Independent Shareholders in each case present in person or voting by proxy at a meeting of those
shareholders of the Corporation who vote in respect of such reconfirmation at every third annual
meeting following the meeting at which this Agreement is confirmed pursuant to Section 5.16. If the
Agreement is not so reconfirmed or is not presented for reconfirmation at such annual meeting, the
Agreement and all outstanding Rights shall terminate and be void and of no further force and effect
on and from the date of termination of the annual meeting; provided that termination shall not
occur if a Flip-in Event has occurred (other than a Flip-in Event which has been waived pursuant to
Subsection 5.2), prior to the date upon which this Agreement would otherwise terminate pursuant to
this Section 5.17.
5.18
|
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Determinations and Actions by the Board of Directors
|
All actions, calculations and determinations (including all omissions with respect to the
foregoing) which are done or made by the Board of Directors, in good faith, shall not subject the
Board of Directors or any director of the Corporation to any liability whatsoever to the holders of
the Rights.
- 44 -
5.19
|
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Regulatory Approvals
|
Any obligation of the Corporation or action or event contemplated by this Agreement, or any
amendment or supplement to this Agreement, shall be subject to receipt of any requisite approval or
consent from any governmental or regulatory authority having jurisdiction including, while any
securities of the Corporation are listed and admitted to trading thereon, the Toronto Stock
Exchange.
Time shall be of the essence in this Agreement.
5.21
|
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Execution in Counterparts
|
This Agreement may be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall together constitute
one and the same instrument.
- 45 -
IN WITNESS WHEREOF
, the parties hereto have caused this Agreement to be duly executed as of the
date first above written.
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IVANHOE MINES LTD.
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By:
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Beverly A. Bartlett
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Name:
|
Beverly A. Bartlett
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Title:
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Vice President & Corporate Secretary
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CIBC MELLON TRUST COMPANY
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By:
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Van Bot
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Name:
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Van Bot
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Title:
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Authorized
Signatory
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By:
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Kathy Straw
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Name:
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Kathy Straw
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Title:
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Authorized
Signatory
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- 46 -
ATTACHMENT I
IVANHOE MINES LTD.
SHAREHOLDER RIGHTS PLAN AGREEMENT
FORM OF RIGHTS CERTIFICATE
THE RIGHTS ARE SUBJECT TO TERMINATION ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS PLAN
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES (SPECIFIED IN SUBSECTION 3.
1(b)
OF THE SHAREHOLDER RIGHTS
PLAN AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES OR
TRANSFEREES OF AN ACQUIRING PERSON OR CERTAIN RELATED PARTIES, MAY BECOME VOID.
Rights Certificate
This certifies that, or registered assigns, is the registered holder of the number of Rights set
forth above, each of which entitles the registered holder thereof, subject to the terms, provisions
and conditions of the Shareholder Rights Plan Agreement, dated as of April 5, 2010, as the same may
be amended or supplemented from time to time (the
Shareholder Rights Agreement
), between Ivanhoe
Mines Ltd., a corporation continued under the laws of the Yukon Territory (the
Corporation
) and
CIBC Mellon Trust Company, a company existing under the laws of Canada (the
Rights Agent
) (which
term shall include any successor Rights Agent under the Shareholder Rights Agreement), to purchase
from the Corporation at any time after the Separation Time (as such term is defined in the
Shareholder Rights Agreement) and prior to the Expiration Time (as such term is defined in the
Shareholder Rights Agreement), one fully paid common share of the Corporation (a
Common Share
) at
the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate
with the Form of Election to Exercise (in the form provided hereinafter) duly executed and
submitted to the Rights Agent at its principal office in the City of Vancouver. The Exercise Price
shall be an amount expressed in Canadian dollars equal to five times the Market Price (as such term
is defined in the Shareholder Rights Agreement) per Common Share at the Separation Time, subject to
adjustment in certain events as provided in the Shareholder Rights Agreement.
This Rights Certificate is subject to all of the terms and provisions of the Shareholder Rights
Agreement, which terms and provisions are incorporated herein by reference and made a part hereof
and to which Shareholder Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent,
the Corporation and the holders of the Rights Certificates. Copies of the Shareholder Rights
Agreement are on file at the registered office of the Corporation.
This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the
offices of the Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights
equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Shareholder Rights Agreement, the Rights evidenced by this Rights
Certificate may be, and under certain circumstances are required to be, redeemed by the Corporation
at a redemption price set out in the Shareholder Rights Agreement.
No fractional Common Shares will be issued upon the exercise of any Rights evidenced hereby, but in
lieu thereof a cash payment will be made, as provided in the Shareholder Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or receive dividends or be
deemed for any purpose the holder of Common Shares or of any other securities which may at any time
be issuable upon the exercise hereof; nor shall anything contained in the Shareholder Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting shareholders (except
as provided in the Shareholder Rights Agreement), or to receive dividends or subscription rights,
or otherwise, until the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Shareholder Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
- 2 -
WITNESS
the facsimile signature of the proper officers of the Corporation and its corporate seal.
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Date:
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IVANHOE MINES LTD.
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By:
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Authorized Signature
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Countersigned:
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CIBC MELLON TRUST COMPANY
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By:
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Authorized Signature
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- 3 -
FORM OF ELECTION TO EXERCISE
(To be exercised by the registered holder if such holder desires to exercise the Rights represented
by this Certificate.)
TO:
The undersigned hereby irrevocably elects to exercise
whole Rights represented by the attached
Rights Certificate to purchase the Common Shares or other securities, if applicable, issuable upon
the exercise of such Rights and requests that certificates for such securities be issued in the
name of:
(Name)
(Address)
(City and Province)
(Social Insurance Number or other taxpayer identification number)
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new
Rights Certificate for the balance of such Rights shall be registered in the name of and delivered
to:
(Name)
(Address)
(City and Province)
(Social Insurance Number or other taxpayer identification number)
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Dated:
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Signature:
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Signature Guaranteed:
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(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever.)
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Signature must be guaranteed by a member firm of a recognized stock exchange in Canada, a Canadian
Schedule I chartered bank or a member a recognized Medallion (STAMP, MSP or SEMP) Program.
CERTIFICATE
(To be completed if true.)
The undersigned party exercising Rights hereunder hereby represents, for the benefit of all holders
of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to
the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof or a Person acting jointly or in concert with an Acquiring Person or
an Affiliate or Associate thereof. Capitalized terms shall have the meaning ascribed thereto in the
Shareholder Rights Agreement.
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Signature
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(please print name of signatory)
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- 2 -
NOTICE
In the event the certification set forth above in the Form of Election to Exercise is not completed
upon exercise of the Right(s) evidenced hereby, the Corporation will deem the Beneficial Owner of
the Right(s) evidenced by this Rights Certificate to be an Acquiring Person (as defined in the
Rights Agreement) and, accordingly, such Rights shall be null and void and not transferable or
exercisable.
(To be attached to each Rights Certificate.)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the Rights represented
by this Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee.)
the Rights represented by this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
, as attorney, to transfer the within
Rights on the books of the Corporation, with full power of substitution.
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Dated:
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Signature:
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Signature Guaranteed:
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(Signature must correspond to name as written upon
the face of this Rights Certificate in every
particular, without alteration or enlargement or any
change whatsoever.)
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Signature must be guaranteed by a member firm of a recognized stock exchange in Canada, a Canadian
Schedule I chartered bank or a member of a recognized Medallion (STAMP, MSP or SEMP) Program.
CERTIFICATE
(To be completed if true.)
The undersigned party transferring Rights hereunder hereby represents, for the benefit of all
holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not,
and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring
Person or an Affiliate or Associate thereof or by any Person acting jointly or in concert with an
Acquiring Person or an Affiliate or Associate thereof. Capitalized terms shall have the meaning
ascribed thereto in the Shareholder Rights Agreement.
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Signature
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(please print name of signatory)
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(To be attached to each Rights Certificate.)
NOTICE
In the event the certification set forth above in the Form of Assignment is not completed, the
Corporation will deem the Beneficial Owner of the Rights evidenced by this Rights Certificate to be
an Acquiring Person (as defined in the Rights Agreement) and, accordingly, such Rights shall be
null and void and not transferable or exercisable.
FORM 51-102F3
MATERIAL CHANGE REPORT
1.
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NAME AND ADDRESS OF COMPANY
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Ivanhoe Mines Ltd. (
Ivanhoe
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654 999 Canada Place
Vancouver, BC V6C 3E1
2.
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DATE OF MATERIAL CHANGE
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April 5, 2010
The press release was issued on April 5, 2010 and was disseminated through the facilities of
recognized newswire services.
4.
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SUMMARY OF MATERIAL CHANGE
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On April 5, 2010, Ivanhoe announced that its board of directors (the Board of Directors) has
implemented a Shareholder Rights Plan Agreement (the Shareholder Rights Plan).
5.
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FULL DESCRIPTION OF MATERIAL CHANGE
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Ivanhoe adopted and entered into the Shareholder Rights Plan with CIBC Mellon Trust Company
summarized herein on April 5, 2010. The purpose of the Shareholder Rights Plan is to provide the
Board of Directors and holders (Shareholders) of the common shares (the Common Shares) of
Ivanhoe with sufficient time to properly consider any take-over bid made for Ivanhoe and to allow
enough time for competing bids and alternative proposals to emerge. The Shareholder Rights Plan
also seeks to ensure that all Shareholders are treated fairly in any transaction involving a change
of control of Ivanhoe and that all Shareholders have an equal opportunity to participate in the
benefits of a take-over bid. The Shareholder Rights Plan encourages potential acquirers to
negotiate the terms of any offer for Common Shares with the Board of Directors or, alternatively,
to make a Permitted Bid (as defined in the Shareholder Rights Plan) without the approval of the
Board of Directors.
The summary of the Shareholder Rights Plan set out herein only includes the material terms and
conditions of the Shareholder Rights Plan. The summary is qualified by and is subject to the full
terms and conditions of the Shareholder Rights Plan. The Shareholder Rights Plan is subject to
confirmation by Shareholders at Ivanhoes 2010 annual and special meeting of Shareholders.
Issuance of Rights
The Shareholder Rights Plan provides that one right (a Right) be issued in respect of each of the
outstanding Common Shares to Shareholders as of the effective date of the Agreement, as well as in
respect of each Common Share issued after the effective date of the Agreement and prior to the
Separation Time (as defined below).
Trading of Rights
Notwithstanding the effectiveness of the Shareholder Rights Plan, the Rights are not exercisable
until the Separation Time and certificates representing the Rights will not be sent to
Shareholders. Certificates for
the Common Shares issued after the effective date of the Shareholder Rights Plan will contain a
notation incorporating the Shareholder Rights Plan by reference. Until the Separation Time, or
earlier termination or expiry of the Rights, the Rights are evidenced by and transferred with the
associated Common Shares and the surrender for transfer of any certificate representing Common
Shares will also constitute the surrender for transfer of the Rights associated with those Common
Shares. After the Separation Time, the Rights will become exercisable and begin to trade separately
from the associated Common Shares. The initial Exercise Price under each Right in order to
acquire a Common Share is five times the Market Price at the Separation Time. Market Price is
generally defined as the average of the daily closing prices per share of such securities on each
of the 20 consecutive trading days through and including the trading day immediately preceding the
Separation Time.
Separation of Rights
The Rights will become exercisable and begin to trade separately from the associated Common Shares
at the Separation Time which, unless waived or deferred by the Board of Directors in the
instances permitted by the Shareholder Rights Plan, is generally the close of business on the tenth
trading day after the earliest to occur of:
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(a)
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a public announcement that a person or a group of affiliated or associated persons has
acquired beneficial ownership of 20% or more of the outstanding Voting Shares (as defined
in the Shareholder Rights Plan) (i.e. become an Acquiring Person) other than as a result
of, among other things, (i) a reduction in the number of Common Shares outstanding, (ii) a
Permitted Bid or a Competing Permitted Bid (each as defined below), (iii) certain
specified Exempt Acquisitions (as defined below), (iv) an acquisition by a person of
Voting Shares pursuant to a stock dividend or other Pro Rata Acquisition (as defined in
the Shareholder Rights Plan); and (v) an acquisition by a person of Voting Shares upon the
exercise, conversion or exchange of a security convertible, exercisable or exchangeable
into a Voting Share received by a person pursuant to (ii), (iii) or (iv), above;
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(b)
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the date of commencement of, or the first public announcement of an intention of any
person (other than Ivanhoe or any of its subsidiaries) to commence, a take-over bid (other
than a Permitted Bid or a Competing Permitted Bid) where the Voting Shares subject to the
bid, together with the Voting Shares beneficially owned by that person (including
affiliates, associates and others acting jointly or in concert therewith), would constitute
20% or more of the outstanding Voting Shares; and
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(c)
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the date upon which a Permitted Bid or Competing Permitted Bid ceases to be such.
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An Exempt Acquisition would include the acquisition of Voting Shares or securities convertible
into Voting Shares (i) in respect of which the Board of Directors has waived the application of the
Shareholder Rights Plan, (ii) pursuant to a distribution made under a prospectus or private
placement provided that the person does not increase his, her or its ownership percentage (e.g.
pursuant to a rights offering), (iii) pursuant to an amalgamation, arrangement or other statutory
procedure requiring Shareholder approval, (iv) pursuant to certain equity incentive stock options
plans of Ivanhoe, (v) pursuant to contractual arrangements currently in place between Rio Tinto
International Holdings Limited and each of (a) Ivanhoe, and (b) Robert M. Friedland, (vi) pursuant
to other contractual arrangements in respect of a Voting Share acquisition from treasury entered
into by Ivanhoe with one or more Grandfathered Persons after the date of the Shareholder Rights
Plan, and (vii) pursuant to the exercise of Rights.
- 2 -
An Acquiring Person does not include a holder of 20% or more of the outstanding Voting Shares on
the date the Shareholder Rights Plan was implemented (a Grandfathered Person), provided that such
Grandfathered Person acquires no more Voting Shares, other than through one of the exemptions set
out
in the Shareholder Rights Plan. When the Shareholder Rights Plan was initially adopted, the only
Grandfathered Persons were Rio Tinto International Holdings Limited, Robert M. Friedland and their
respective affiliates.
As soon as practicable following the Separation Time, separate certificates evidencing rights
(Rights Certificates) will be mailed to the holders of record of the Common Shares as of the
Separation Time and the Rights Certificates alone will evidence the Rights.
When Rights Become Exercisable
After the Separation Time, each Right entitles the holder thereof to purchase one Common Share at
the Exercise Price. Following a transaction which results in a person becoming an Acquiring Person
(a Flip-in-Event), the Rights entitle the holder thereof to receive, upon exercise, such number
of Common Shares that have an aggregate market value (as of the date of the Flip-in Event) equal to
twice the then Exercise Price of the Rights for an amount in cash equal to the Exercise Price. In
such event, however, any Rights beneficially owned by an Acquiring Person (including affiliates,
associates and others acting jointly or in concert therewith), or certain transferees or any such
person, will be void.
Permitted Bids
The Shareholder Rights Plan includes a Permitted Bid concept whereby a take-over bid will not
trigger a separation of the Rights (and will not cause the Rights to become exercisable) if the bid
meets certain conditions. A Permitted Bid is defined as an offer to acquire Voting Shares (which
means Common Shares and any other shares in the capital of Ivanhoe entitled to vote generally in
the election of all directors, or securities that are eligible to be converted into Voting Shares
for cash or securities) made by means of a take-over bid circular where the Voting Shares
(including Voting Shares that may be acquired upon conversion of securities convertible into Voting
Shares) subject to the offer, together with Voting Shares beneficially owned by the offeror at the
date of the offer (including its affiliates, associates and others acting jointly or in concert
therewith), constitute 20% or more of the outstanding Voting Shares and that also complies with the
following additional provisions:
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(a)
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the bid must be made to all the holders of Voting Shares as registered on the books of
Ivanhoe, other than the offeror; and
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(b)
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the bid must also contain the following irrevocable and unqualified conditions: (i) no
Voting Shares will be taken up or paid for prior to the close of business on the
60
th
day following the date of the bid and then only if more than 50% of the
Voting Shares held by Independent Shareholders (as defined below) have been deposited or
tendered to the bid and not withdrawn; (ii) Voting Shares may be deposited pursuant to the
bid, unless it is withdrawn, at any time prior to the date shares are first taken up or
paid for under the bid: (iii) Voting Shares deposited pursuant to the bid may be withdrawn
until taken up or paid for; and (iv) if the deposit condition referred to in (b)(i) above
is satisfied, the offeror will extend the bid for deposit of Voting Shares for at least 10
business days from the date such extension is publicly announced and, if such bid is a
partial bid, not take up any Voting Shares under the bid until the expiry of such 10
business day period.
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Independent Shareholders is defined generally as holders of Voting Shares other than (i) an
Acquiring Person, (ii) any offeror making a take-over bid, (iii) any affiliate or associate of an
Acquiring Person or offeror, (iv) persons acting jointly or in concert with an Acquiring Person or
offeror, and (v) employee benefit, stock purchase or certain other plans or trusts for employees of
Ivanhoe or its wholly-owned subsidiaries unless the beneficiaries of such plans or trusts direct
the voting or tendering to a take-over bid of the Voting Shares.
- 3 -
Competing Permitted Bids
A Competing Permitted Bid is a take-over bid made after a Permitted Bid has been made and prior
to expiry of such Permitted Bid that satisfies all of the provisions of a Permitted Bid, except
that it must remain open for acceptance until at least the later of (i) 35 days after the date of
the bid and (ii) 60 days after the earliest date on which another Permitted Bid then in existence
was made, and only if at that date more than 50% of the Voting Shares owned by Independent
Shareholders have been deposited to the Competing Permitted Bid and not withdrawn.
Redemption and Waiver
Under the Shareholder Rights Plan, the Board of Directors can (i) waive the application of the
Shareholder Rights Plan to enable a particular take-over bid to proceed, in which case the
Shareholder Rights Plan will be deemed to have been waived with respect to any other take-over bid
made prior to the expiry of any bid subject to such waiver, or (ii) with the prior approval of the
holders of Voting Shares or Rights, as the case may be, redeem the Rights at a redemption price of
$0.00001 per Right at any time prior to a Flip-in-Event. Rights are deemed to have been redeemed if
a bidder successfully completes a Permitted Bid or a Competing Permitted Bid.
Protection Against Dilution
The Exercise Price, the number and nature of securities which may be purchased upon the exercise of
Rights and the number of Rights outstanding are subject to adjustment from time to time to prevent
dilution in the event of stock dividends, subdivisions, consolidations, reclassifications or other
changes in the outstanding Common Shares, pro rata distributions to holders of Common Shares and
other circumstances where adjustments are required to appropriately protect the interests of the
holders of Rights.
Form of Resolution and Vote Required
In order to be effective, the Shareholder Rights Plan must be approved by not less than a majority
of the votes cast by both (a) all Shareholders present or represented by proxy at Ivanhoes 2010
annual and special of Shareholders to be held on May 7, 2010 (the
Meeting
), and (b) all
Shareholders present or represented by proxy at the Meeting that are not Grandfathered Persons
(i.e. Shareholders who already beneficially own 20% or more of the outstanding Voting Shares on the
effective date) under the Shareholder Rights Plan. As of the date hereof, the only Grandfathered
Persons under the Shareholder Rights Plan are Rio Tinto International Holdings Limited, Robert M.
Friedland and their respective affiliates.
Under the Shareholder Rights Plan, the Grandfathered Persons will be permitted, without triggering
a Flip-in Event, to acquire additional Common Shares pursuant to rights to acquire such Common
Shares held by them on the effective date of the Shareholder Rights Plan. Otherwise, a Flip-in
Event would be triggered upon the Grandfathered Person acquiring any additional Voting Shares
(unless such acquisition is completed pursuant to one of the exemptions set out in the Shareholder
Rights Plan).
6.
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RELIANCE ON SUBSECTION 7.1(2) OR (3) OF NATIONAL INSTRUMENT 51-102
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Not applicable.
Not applicable.
- 4 -
The name and business number of the executive officer of Ivanhoe who is knowledgeable of the
material change and this report is:
Beverly A. Bartlett
Vice President & Corporate Secretary
Telephone: (604) 331-9803
April 6, 2010
- 5 -
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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IVANHOE MINES LTD.
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Date:
April 6, 2010
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By:
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/s/ Beverly A. Bartlett
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BEVERLY A. BARTLETT
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Vice President & Corporate Secretary
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