Exhibit 17
Conformed Execution Copy
INVESTOR AGREEMENT dated as of February 9, 1998,
among KINROSS GOLD CORPORATION, a corporation organized
under the laws of Ontario (the "Company"), and CYPRUS
AMAX MINERALS COMPANY, a Delaware corporation (the
"Significant Shareholder").
This Agreement is entered into pursuant to the Agreement and Plan of
Merger, dated as of February 9, 1998 (the "Merger Agreement"), among the
Company, Kinross Merger Corporation, a Delaware corporation ("Merger Sub") and a
direct wholly owned subsidiary of the Company, and Amax Gold Inc., a Delaware
corporation ("Amax"). In connection with the Merger (as defined in the Merger
Agreement), subject to certain exceptions, each share of Common Stock, par value
$0.01 per share ("Amax Common Stock"), of Amax will be converted into the right
to receive Common Shares, without nominal or par value, of the Company ("Common
Shares") in the amount set forth in the Merger Agreement. This Agreement shall
become effective at the Effective Time.
The Significant Shareholder is executing this Agreement as an
inducement to the Company and Merger Sub to execute and deliver the Merger
Agreement.
Accordingly, in consideration of the execution and delivery by the
Company and Merger Sub of the Merger Agreement and the mutual covenants,
conditions and agreements contained therein and herein, the parties hereto agree
as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Capitalized terms used but not
defined herein shall have the meanings assigned to such terms in the
Merger Agreement. For purposes of this Agreement, the following terms
shall have the following meanings:
"Advice" has the meaning set forth in Section 6.04 hereof.
"Affiliate" and "Associate", when used with reference to any person,
shall have the respective meanings
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ascribed to such terms in the Securities Act (Ontario), as in effect on the date
of this Agreement.
A person shall be deemed the "beneficial owner" of, and shall be
deemed to "beneficially own", and shall be deemed to have "beneficial ownership"
of:
(i) any securities that such person or any of such person's
Affiliates or Associates is deemed to "beneficially own" within the
meaning of Rule 13d-3 under the Exchange Act, as in effect on the date of
this Agreement; and
(ii) any securities (the "underlying securities") that such person
or any of such person's Affiliates or Associates has the right to acquire
(whether such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding (written
or oral), or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise (it being understood that such
person shall also be deemed to be the beneficial owner of the securities
convertible into or exchangeable for the underlying securities).
"Board" shall mean the board of directors of the Company.
"Business Day" means any day that is not a Saturday, a Sunday or a
legal holiday on which banking institutions in the State of New York or the
Province of Ontario are not required to be open.
"Canadian Securities Laws" means the Securities Act (Ontario) and
the securities laws of any other province or territory of Canada.
"Commissions" means the SEC, the OSC and the securities regulatory
authorities of each of the provinces and territories of Canada.
"Controlled Subsidiary" of an Investor means any corporation or
other entity (i) of which securities or other interests having the power to
elect a majority of that corporation's or other entity's board of directors or
similar governing body, or otherwise having the power to direct the business and
policies of that corporation or other entity (other than securities or other
interests having such power only upon the happening of a contingency that has
not occurred) are held by such Investor or a wholly
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owned subsidiary of such Investor and (ii) the majority of the board of
directors or similar governing body of which is comprised of employees or
designees of such Investor.
"Delay Period" has the meaning set forth in Section 6.01(d)
hereof.
"Demand Notice" has the meaning set forth in
Section 6.01(a) hereof.
"Demand Registration" has the meaning set forth in
Section 6.01(b) hereof.
"Effective Time" has the meaning given such term in the
Merger Agreement.
"Effectiveness Period" has the meaning set forth in
Section 6.01(d) hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the SEC promulgated thereunder.
"Hold Back Period" has the meaning set forth in
Section 6.03 hereof.
"Interruption Period" has the meaning set forth in
Section 6.04 hereof.
"Investor" shall means the Significant Shareholder and any
Controlled Subsidiary of the Significant Shareholder that agrees to be bound by
this Agreement, any other person that pursuant to the terms hereof is required
to or otherwise becomes a party hereto as an Investor or that becomes entitled
to the benefits of Article VI hereof and each successor or permitted assign of
an Investor. For purposes of Article VI hereof, any reference to the Investors
shall mean the Investors collectively and not individually.
"Investor Directors" means Investor Nominees who are elected or
appointed to serve as members of the Board in accordance with this Agreement.
"Investor Nominees" means such individuals as are so designated by
the Investors to serve as members of the Board pursuant to Section 3.02 hereof.
"OSC" means the Ontario Securities Commission.
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"person" has the meaning given such term in the Merger
Agreement.
"Piggyback Registration" has the meaning set forth in
Section 6.02 hereof.
"Prospectus" means the prospectus included in any Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Shares covered by such Registration Statement and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus, and all preliminary or final
prospectuses filed under Canadian Securities Laws.
"Registrable Shares" means Common Shares (or any securities of the
Company or any other person issued or issuable with respect to any such
securities (including on exercise of Warrants) by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
amalgamation, consolidation or other reorganization, reclassification or
otherwise) unless (i) they have been effectively registered under Section 5 of
the Securities Act and disposed of pursuant to an effective Registration
Statement or Prospectus or (ii) such securities may be freely transferred
without restriction under the Securities Laws. For purposes of Demand
Registrations only, "Registrable Shares" shall include any securities of an
Investor, the value of which relates to or is based upon the Registrable Shares
or securities which are exchangeable for or convertible into the Registrable
Shares (collectively, "Linked Shares"), to the extent such securities require
registration by the Company in addition to registration by the issuer thereof.
"Registration" means registration or qualification, as applicable,
under the Securities Act and Canadian Securities Laws of an offering of
Registrable Shares pursuant to a Demand Registration or a Piggyback
Registration.
"Registration Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Shares pursuant
to the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such
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registration statement and prospectus, including pre- and post-effective
amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement and
prospectus.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Securities Laws" means, collectively, the Securities Act
and the Canadian Securities Laws.
"Shelf Registration" has the meaning set forth in
Section 6.01(b) hereof.
"Standstill Period" means the five-year period commencing
at the Effective Time.
"underwritten registration or underwritten offering" means a
registration under the Securities Laws in which securities of the Company are
sold to an underwriter for reoffering to the public.
"Voting Power" means the total number of votes that may be cast in
the election of directors of the Company (excluding any votes of a series of
preferred stock that is entitled to elect directors of the Company due to
default in the payment of dividends unless the Investors or any of their
Affiliates beneficially own any shares of such series and is so entitled to
vote) if all Voting Securities outstanding were present and voted in accordance
with their terms at a meeting held for such purpose. For purposes of determining
the percentage of Voting Power beneficially owned by any person, any securities
not outstanding which are subject to conversion rights, exchange rights, rights,
warrants (including the Warrants), options or similar securities held by such
person shall be deemed to be outstanding for the purpose of computing the
percentage of Voting Power beneficially owned by such person, but shall not be
deemed to be outstanding for the purpose of computing the percentage of Voting
Power beneficially owned by any other person.
"Voting Securities" means Common Shares and any other securities of
the Company entitled to vote generally in the election of directors of the
Company or any
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securities convertible into or exchangeable for any such securities.
"Warrants" means the warrants to purchase Common Shares issued
pursuant to the Stockholder Agreement dated the date hereof, between the Company
and the Significant Shareholder.
ARTICLE II
Representations and Warranties
SECTION 2.01. Representations and Warranties of the
Significant Shareholder. The Significant Shareholder represents and
warrants to the Company as follows:
(a) The Significant Shareholder is a corporation duly
organized, validly existing and in good standing under the laws of
Delaware and is in good standing as a foreign corporation in each
jurisdiction where it is required to qualify in order to conduct its
business as presently conducted, except where the failure to be in
good standing or so qualified would not have a Material Adverse
Effect on the Significant Shareholder or its subsidiaries (other
than Amax and its subsidiaries) taken as whole;
(b) The Significant Shareholder has the corporate power and
authority to execute, deliver and perform this Agreement without the
necessity of obtaining any consent, approval, authorization, or
waiver, or giving of any notice or otherwise, except for such
consents as have been obtained, are unconditional and are in full
force and effect;
(c) The execution, delivery and performance of this Agreement
has been duly authorized by the board of directors of the
Significant Shareholder. This Agreement has been duly executed and
delivered by the Significant Shareholder and, assuming due execution
and delivery thereof by the Company, constitutes the legal, valid,
and binding obligation of the Significant Shareholder enforceable
against the Significant Shareholder in accordance with its terms
except (i) as may be limited by bankruptcy, reorganization,
insolvency, and similar laws of general application relating to or
affecting the enforcement of creditors'
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rights or the relief of debtors and (ii) that the remedy of specific
performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought (the matters set
forth in clause (i) and (ii) being called the "Exceptions"); and
(d) The execution, delivery, and performance of this Agreement
by the Significant Shareholder will not (i) constitute a violation
of its Certificate of Incorporation or By-laws, each as amended,
(ii) result in the breach of or constitute a default under any
Contract which would have a Material Adverse Effect, on the
Significant Shareholder or its subsidiaries (other than Amax and its
subsidiaries) taken as whole, (iii) constitute a material violation
of any Law applicable or relating to it or its businesses or (iv)
result in the creation of any Lien.
SECTION 2.02. Representations and Warranties of the Company. The
Company represents and warrants to the Significant Shareholder as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of Ontario and is in
good standing as a foreign corporation in each jurisdiction where it
is required to qualify in order to conduct its business as presently
conducted, except where the failure to be in good standing or so
qualified would not have a Material Adverse Effect on the Company
and its subsidiaries taken as a whole;
(b) The Company has the corporate power and authority to
execute, deliver and perform this Agreement without the necessity of
obtaining any consent, approval, authorization, or waiver, or giving
of any notice or otherwise (including from the shareholders of the
Company), except for such consents as have been obtained, are
unconditional and are in full force and effect and which, with
respect to notices, have been given;
(c) The execution, delivery and performance of this Agreement
has been duly authorized by the board of directors of the Company.
This Agreement has been duly executed and delivered by the
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Company and, assuming due execution and delivery thereof by the
Significant Shareholder, constitutes the legal, valid, and binding
obligation of the Company enforceable against the Company in
accordance with its terms, subject to the Exceptions; and
(d) The execution, delivery, and performance of this Agreement
by the Company will not (i) constitute a violation of its
certificate of incorporation or by-laws, each as amended, (ii)
result in the breach of or constitute a default under any Contract
which would have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole, (iii) constitute a material violation
of any Law applicable or relating to it or its businesses or (iv)
result in the creation of any Lien.
ARTICLE III
Corporate Governance
SECTION 3.01. Board of Directors. As of the Effective Time, the
Board shall consist of ten members and be constituted as set forth in Section
1.14 of the Merger Agreement.
SECTION 3.02. Investor Board Representation. (a) If the Investors
beneficially own at least 76,112,455 Common Shares (as adjusted for any stock
dividend, stock split, reclassification or similar event) (the "Base Share
Number"), the parties hereto shall exercise all authority under applicable law
to cause any slate of directors presented to shareholders for election to the
Board to consist of such nominees that, if elected, would result in the Board
consisting of three Investor Directors and seven additional directors.
(b) If the Investors beneficially own less than the Base Share
Number but at least two-thirds of the Base Share Number, the parties hereto
shall exercise all authority under applicable law to cause any slate of
directors presented to shareholders for election to the Board to consist of such
nominees that, if elected, would result in the Board consisting of two Investor
Directors and eight additional directors.
(c) If the Investors beneficially own less than two-thirds of the
Base Share Number but at least one-third
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of the Base Share Number, the parties hereto shall exercise all authority under
applicable law to cause any slate of directors presented to shareholders for
election to the Board to consist of such nominees that, if elected, would result
in the Board consisting of one Investor Director and nine additional directors.
(d) The Company shall not amend its articles of incorporation or
By-laws in a manner inconsistent with this Section 3.02.
(e) As long as the Investors beneficially own at least the Base
Share Number, one of the Investor Directors shall be entitled to be a member of
each committee of the Board of Directors of the Company, subject to applicable
stock exchange requirements. As long as the Investors beneficially own at least
two-thirds of the Base Share Number, Xxxxxx X. Xxxx shall be Vice Chairman of
the Board of Directors of the Company.
SECTION 3.03. Designation of Slate. Any Investor Nominees that are
included in a slate of directors pursuant to Section 3.02 shall be designated by
the Investors, subject to the approval of the Nominating Committee of the Board.
No Investor Nominee shall be an officer of any gold mining company (other than
the Significant Stockholder or any of its Affiliates) or be required to report
any matter pursuant to Item 401(f) (other than subsection (1) thereof) of
Regulation S-K promulgated under the Securities Act (as in effect on the date
hereof). The Company's nominating committee shall nominate each person so
designated. The initial Investor Nominees shall be Xxxxxx X. Xxxx, and two
additional individuals specified by the Investors. Upon consummation of the
Merger, the number of directors constituting the entire Board will be fixed at
ten and a sufficient number of the then serving members of the Board will resign
in order to permit the appointment to the Board of the initial Investor Nominees
to fill the vacancies thereby created. The Board will take all reasonable
actions necessary to so appoint the initial Investor Nominees to the Board,
effective immediately following the Effective Time and the Board will take all
reasonable actions necessary to appoint any replacement Investor Director to the
Board as contemplated by Section 3.04.
SECTION 3.04. Resignations and Replacements. (a) If at any time a
member of the Board resigns (pursuant to this Section 3.04 or otherwise) or is
removed, a new member shall be designated to replace such member until the next
election of directors. If consistent with Section 3.02
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the replacement director is to be an Investor Director, the Investors shall
designate the replacement Investor Director.
(b) If at any time the percentage of the Voting Power beneficially
owned by the Investors decreases to a point at which the number of Investor
Nominees entitled to be nominated to the Board in accordance with this Agreement
in an election of directors presented to shareholders would decrease, within 10
days thereafter the Investors shall use all reasonable efforts to cause a
sufficient number of Investor Directors to resign from the Board so that the
number of Investor Directors on the Board after such resignation(s) equals the
number of Investor Nominees that the Investors would have been entitled to
designate had an election of directors taken place at such time.
SECTION 3.05. Solicitation and Voting of Shares. The Company shall
use reasonable efforts to solicit from the shareholders of the Company eligible
to vote for the election of directors proxies in favor of the Board nominees
selected in accordance with Section 3.02.
ARTICLE IV
Standstill
SECTION 4.01. Standstill. During the Standstill Period, none of the
Investors shall (and each Investor shall cause its Affiliates and Associates
that it controls, and use reasonable efforts to cause its other Affiliates and
Associates, not to) (i) acquire, offer to acquire, or agree to acquire, by
purchase or otherwise, directly or indirectly, beneficial ownership of any
additional Voting Securities, except pursuant to the exercise of any Warrants, a
stock split, stock dividend, rights offering, recapitalization, amalgamation,
reclassification or similar transaction or as necessary following any dilution
of the Voting Power beneficially owned by the Investors caused by a primary
issuance of securities by the Company to restore (but not increase) such Voting
Power to the level existing immediately prior to such primary issuance or (ii)
take any other action that would result in an increase of the Voting Power
beneficially owned by the Investors.
SECTION 4.02. Additional Restrictions. (a) During the Standstill
Period, none of the Investors shall (and each Investor shall cause its
Affiliates and Associates that it controls, and use reasonable efforts to cause
its other Affiliates and Associates, not to), without
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the prior written consent of a majority of the members of the Board other than
the Investor Directors:
(i) publicly propose that any Investor or any Affiliate or Associate
of any Investor enter into, directly or indirectly, any merger,
amalgamation or other business combination involving the Company or
propose to purchase, directly or indirectly, a material portion of the
assets of the Company or any material subsidiary of the Company, or make
any such proposal privately if it would reasonably be expected to require
the Company to make a public announcement regarding such proposal;
(ii) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are used in Regulation 14A
promulgated under the Exchange Act or the Business Corporations Act
(Ontario)) to vote or consent with respect to any Voting Securities or
become a "participant" in any "election contest" (as such terms are
defined or used in Rule 14a-11 under the Exchange Act) with respect to the
Company;
(iii) form, join or participate in or encourage the formation of a
"group" (within the meaning of Section 13(d)(3) of the Exchange Act) or
act "jointly or in concert" (within the meaning of the Securities Act
(Ontario) with the holders of any other Voting Securities with respect to
any Voting Securities, other than a group consisting solely of Investors;
(iv) deposit any Voting Securities into a voting trust or subject
any such Voting Securities to any arrangement or agreement with respect to
the voting thereof other than this Agreement;
(v) initiate, propose or otherwise solicit shareholders of the
Company for the approval of one or more shareholder proposals with respect
to the Company as described in Rule 14a-8 under the Exchange Act or
Section 99 of the Business Corporations Act (Ontario), or induce or
attempt to induce any other person to initiate any shareholder proposal
with respect to the Company;
(vi) except in accordance with Article III hereof, seek election to
or seek to place a representative on the Board or seek the removal of any
member of the Board, except, with respect to removal, for voting as a
holder of Voting Securities in accordance with the
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terms of such Voting Securities, and except that if any party that is not
an Affiliate or Associate of, or acting in concert with or at the
instigation of, an Investor proposes a slate of directors none of whom are
Affiliates or Associates of an Investor, the Investors may vote for such
slate (including by delivering a revocable proxy for such vote) so long as
the Investors do not have any other understanding or arrangement with such
party or any of such party's nominees relating to the Company and the
Investors have complied and continue to comply with their other
obligations under this Section 4.02;
(vii) call or seek to have called any meeting of the
shareholders of the Company;
(viii)(A) solicit, seek to effect, negotiate with or provide
nonpublic information to any other person with respect to, (B) make any
proposal, whether written or oral, to the Board or any director or officer
of the Company with respect to, or (C) otherwise make any public
announcement or proposal whatsoever with respect to any form of business
combination transaction (with any person) involving a change of control of
the Company or the acquisition of a substantial portion of the equity
securities or assets of the Company or any material subsidiary of the
Company, including a merger, amalgamation, consolidation, tender offer,
exchange offer or liquidation of the Company's assets, or any
restructuring, recapitalization or similar transaction with respect to the
Company or any material subsidiary of the Company (a "Covered
Transaction"); provided, however, that the foregoing shall not (x) apply
to any discussion between or among the Investors or any of their
respective officers, employees, agents or representatives, (y) except with
respect to providing non-public information (which the Investor shall not
provide without the consent of the Company, such consent not to be
unreasonably withheld or delayed), apply to transfers or potential
transfers made in accordance with this Agreement of Voting Securities
beneficially owned by an Investor or (z) in the case of clause (B) above,
be interpreted to limit the ability of the Investors or any designee of
the Investors on the Board to make any such proposal or to discuss any
such proposal with any officer or director of or advisor to the Company or
advisor to the Board unless, in either case, such proposal or discussion
in and of itself would reasonably be expected to require the Company to
make a public announcement regarding such discussion, statement or
proposal;
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(ix) otherwise act, alone or in concert with others, to seek to
control or influence the management or policies of the Company (except for
(A) voting as a holder of Voting Securities in accordance with the terms
of such Voting Securities and (B) nominating and replacing directors
pursuant to Section 3.02 and 3.04 hereof);
(x) publicly disclose any request for amendment or waiver of this
Agreement or intention, plan or arrangement inconsistent with the
foregoing, or make any such request or disclosure privately if it would
reasonably be expected to require the Company to make a public
announcement regarding such intention, plan or arrangement; or
(xi) advise, assist (including by knowingly providing or arranging
financing for that purpose) or knowingly encourage any other person in
connection with any of the foregoing.
(b) Notwithstanding Section 4.02(a) hereof, in the event the Board
formally considers a transaction that would result in a person other than the
Investors beneficially owning more than 30% of the Voting Power or that
otherwise is a Covered Transaction, the Investors may propose and pursue an
alternative transaction of the same type so long as proceeding with and
consummating such transaction is expressly conditioned upon approval of a
majority of the Board (excluding the Investor Directors).
SECTION 4.03. Additional Covenants. (a) An Investor may transfer
Voting Securities to a Controlled Subsidiary of such Investor so long as such
transferee becomes a party to this Agreement as an Investor to the same extent
as its parent.
(b) None of the Investors shall permit any other Investor that is a
Controlled Subsidiary of such Investor to cease to be a Controlled Subsidiary of
such Investor for so long as such other Investor owns any Voting Securities.
(c) None of the Investors shall permit any of its subsidiaries,
other than any such subsidiaries that are (i) Controlled Subsidiaries and (ii)
Investors, to hold, directly or indirectly, any shares of Voting Securities.
(d) Each Investor shall use reasonable efforts to cause each of its
officers, employees, agents and representatives not to take any action that
would be
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prohibited under Section 4.02 hereof if taken by such Investor.
ARTICLE V
Transfer Restrictions
SECTION 5.01. Transfer Restrictions. (a) During the six-month period
commencing at the Effective Time, none of the Investors may, without the prior
written consent of the Company, sell, transfer, pledge, encumber or otherwise
dispose of, or agree to sell, transfer, pledge, encumber or otherwise dispose
of, any Voting Securities except in connection with a Covered Transaction and,
subject to Section 4.03 hereof, to a Controlled Subsidiary.
(b) Following the six-month anniversary of the Effective Time, the
Investors may, without the prior written consent of the Company, sell, transfer,
pledge, issue, encumber or otherwise dispose of, or agree to sell, transfer,
pledge, issue, encumber or otherwise dispose of ("Transfer"), any Voting
Securities, or any rights or options to acquire Voting Securities, except during
the Standstill Period no Investor shall Transfer any Voting Securities or any
rights or options to acquire Voting Securities to any person other than a
Controlled Subsidiary of such Investor in accordance with Section 4.03 hereof
(including any pledgee of shares of Voting Securities), that such Investor, or
any of its Affiliates or Associates, knows or, after commercially reasonable
inquiry should have known (it being agreed that in the absence of contrary
actual knowledge such Investor may rely upon a written certificate of such
person) beneficially owns or, after giving effect to such Transfer, will
beneficially own 15% or more of the Voting Power, unless the transferee not
later than the effectiveness of such Transfer becomes a party to this Agreement
as an Investor (other than for purposes of Sections 3.01 through 3.05) or the
transferee is a broker/dealer or other financial intermediary acquiring such
Voting Securities as part of an underwriting or other broad distribution; or
unless such Transfer is made pursuant to the terms of any takeover bid, tender
or exchange offer for Voting Securities made pursuant to the applicable
provisions of the Exchange Act or Canadian Securities Laws or pursuant to any
amalgamation of the Company or any arrangement involving the Company (but in the
case of any takeover bid or tender or exchange offer, only so long as (A) such
Investor and its Affiliates and Associates are at the time in substantial
compliance with the provisions of Article IV and (B) such takeover bid, tender
or exchange offer,
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amalgamation or arrangement is not materially related to any past noncompliance
with such provisions by such Investor or any of its Affiliates or Associates).
(c) Each Investor covenants to give at least five Business Days'
prior notice of its intention to Transfer any Voting Securities or any rights or
options to acquire Voting Securities to any person other than a Controlled
Subsidiary of such Investor in accordance with Section 4.03 hereof (including
any pledgee of shares of Voting Securities), that beneficially own 15% or more
of the Voting Power, including Transfers permitted by Section 5.01(b).
(d) Neither Section 5.01(a) nor 5.01(b) shall be deemed to prevent
any pledge of Voting Securities so long as such pledge (i) is made for financing
purposes with an institutional lender, (ii) the Investors retain sole voting
power with respect to all pledged securities and (iii) any pledgee that would
beneficially own greater than 15% of the Voting Power agree in writing prior to
foreclosure to be bound effective after such foreclosure by the terms of this
Agreement as an Investor if such foreclosure would cause it to obtain beneficial
ownership of greater than 15% of the Voting Power except that no pledgee of less
than one-half of the Base Share Number shall be required to be so bound.
SECTION 5.02. Legends. (a) Except as set forth in paragraph (b)
below, during the term of this Agreement all certificates representing Voting
Securities beneficially owned by the Investors shall bear an appropriate
restrictive legend indicating that such Voting Securities are subject to
restrictions pursuant to this Agreement.
(b) Upon any transfer or proposed transfer of beneficial ownership
by the Investors of any Voting Securities to any person that is permitted
pursuant to this Agreement, the Company shall, upon receipt of timely notice and
such certificates, opinions and other documentation as shall be reasonably
requested by the Company, cause certificates representing such transferred
Voting Securities to be issued not later than the time needed to effect such
transfer.
SECTION 5.03. Effect. Any purported transfer of Voting
Securities that is inconsistent with the provisions of this Article IV
shall be null and void and of no force or effect.
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ARTICLE VI
Registration Rights
SECTION 6.01. Demand Registration. (a) The Investors shall have the
right, subject to compliance with the other terms of this Agreement (including,
without limitation, Article IV hereof), by written notice (the "Demand Notice")
given to the Company, to request the Company to qualify and register under and
in accordance with the provisions of the Securities Laws all or any portion of
the Registrable Shares designated by the Investors; provided, however, that the
bona fide estimated aggregate market value of Registrable Shares, requested to
be registered or qualified pursuant to any Demand Notice shall be at least
Canadian $50,000,000 or if less, the aggregate market value of the remaining
Registrable Shares and the Investors shall, in the form of written notice,
specify the intended method or methods of disposition. Upon receipt of any such
Demand Notice, the Company shall promptly notify all other Investors of the
receipt of such Demand Notice and allow them the opportunity to include
Registrable Shares held by them in the proposed registration or qualification by
submitting their own Demand Notice. Unless the Investors otherwise agree, in
connection with any Demand Registration in which more than one Investor
participates, in the event that such Demand Registration involves an
underwritten offering and the managing underwriter or underwriters participating
in such offering advise in writing the Investors holding Registrable Shares to
be included in such offering that the total number of Registrable Shares to be
included in such offering exceeds the amount that can be sold in (or during the
time of) such offering without delaying or jeopardizing the success of such
offering (including the price per share of the Registrable Shares to be sold),
then the amount of Registrable Shares to be offered for the account of such
Investors shall be reduced pro rata on the basis of the number of Registrable
Shares to be registered by each such Investor. The Investors as a group shall be
entitled to a total of five Demand Registrations (provided that no more than one
Demand Registration shall be made during each consecutive 12-month period
following the Effective Time) pursuant to this Article VI unless any Demand
Registration does not become effective or is not maintained for a continuous
period of at least 30 days (or such shorter period as shall terminate when all
the Registrable Shares covered by such Demand Registration have been sold
pursuant thereto), in which case the Investors will be entitled to an additional
Demand Registration pursuant hereto during such 12-month period and
17
such Demand Registration shall not be counted as one of the five Demand
Registrations.
(b) As promptly as practicable, but in any event within 30 days of
the date on which the Company receives a Demand Notice given by Investors in
accordance with Section 6.01(a) hereof, the Company shall file with the SEC, and
the Company shall thereafter use its best efforts to effect the qualification
and registration under the Securities Laws of the Registrable Securities the
Company has been requested to so qualify and register for disposition, in
accordance with the intended method or methods of distribution (which may
include a shelf registration), of the total number of Registrable Shares
specified by the Investors in such Demand Notice (a "Demand Registration").
(c) The Company shall use commercially reasonable efforts to keep
any Registration Statement filed pursuant to this Section 6.01 continuously
effective and usable for the resale of the Registrable Shares covered thereby
until the later of (i) 30 days from the later of the date on which the SEC
declares such Registration Statement effective and the date the OSC issues a
receipt for the Prospectus (such 30-day period, the "Exclusivity Period") and
(ii) the date on which all the Registrable Shares covered by such Registration
Statement have been sold pursuant to such Registration Statement (such period,
the "Effectiveness Period"). The Company shall not make a primary issuance of,
or effect, or announce an intention to effect, any public sale or distribution
of any Common Shares or similar securities or securities convertible into, or
exchangeable or exercisable for, such securities during the 10 days prior to the
effective date of such Registration Statement and until the earlier of (a) the
abandonment of such offering and (b) 90 days from the commencement of the
Exclusivity Period.
(d) The Company shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed by the
Company pursuant to this Section 6.01, or, after the Exclusivity Period, suspend
the use of any effective Registration Statement (other than in respect of
previously issued Linked Shares) under this Section 6.01, for a reasonable
period of time, but not in excess of 90 days after the date of any Demand Notice
(a "Delay Period"), if the Board of Directors of the Company determines that in
its reasonable judgment and good faith the registration and distribution of the
Registrable Shares covered or to be covered by such Registration Statement would
materially interfere with any pending material
18
financing, acquisition or corporate reorganization or other material corporate
development involving the Company or any of its subsidiaries or would require
premature disclosure thereof which would jeopardize such transaction (it being
agreed that the Company shall not effect a Delay Period hereunder in order to
proceed with a primary issuance or effect, or announce an intention to effect
any public sale or distribution of any Common Shares or similar securities or
securities convertible into, or exchangeable or exercisable for, such
securities, unless the Company shall have previously given the Investors the
notice and opportunity required by Section 6.02 hereof and is currently pursuing
such issuance, sale or distribution) and promptly gives the Investors written
notice of such determination, containing a general statement of the reasons for
such postponement and an approximation of the period of the anticipated delay;
provided, however, that (i) the aggregate number of days included in all Delay
Periods during any consecutive 12 months shall not exceed the aggregate of (x)
120 days minus (y) the number of days occurring during all Hold Back Periods and
Interruption Periods during such consecutive 12 months and (ii) a period of at
least 90 days shall elapse between the termination of any Delay Period and the
commencement of the immediately succeeding Delay Period. If the Company shall so
postpone the filing of a Registration Statement, the Investors holding
Registrable Shares to be registered shall have the right to withdraw the request
for registration by giving written notice from the Investors within 45 days
after receipt of the notice of postponement or, if earlier, the termination of
such Delay Period (and, in the event of such withdrawal, such request shall not
be counted for purposes of determining the number or timing of requests for
registration to which the Investors are entitled pursuant to this Section 6.01).
The Company shall not be entitled to initiate a Delay Period unless it shall (A)
concurrently prohibit sales by such other security holders under registration
statements or prospectus covering securities held by such other security holders
and (B) in accordance with the Company's policies from time to time in effect,
forbid purchases and sales in the open market by senior executives of the
Company.
(e) The Company shall not qualify or register any securities that
are not Registrable Shares held by an Investor pursuant to this Section 6.01
without the prior written consent of the Investors.
(f) The Investors may, at any time prior to the effective date of
any Registration Statement or the filing of a final prospectus relating to such
Registration, revoke such request by providing a written notice to the Company
19
revoking such request and, if the Investors comply with the next succeeding
sentence of this Section 6.01(e), such request shall not be deemed a Demand
Registration or to prevent the Investors from making requests under Section
6.01(g). The Investors shall reimburse the Company for all its out-of-pocket
expenses incurred in the preparation, filing and processing of the Registration
Statement and any preliminary and final prospectus; provided, however, that, if
such revocation was based on the Company's failure to comply in any material
respect with its obligations hereunder, such reimbursement shall not be
required.
(g) The Investors shall also be entitled to request one additional
Registration in each twelve-month period following the Effective Time at the
Investors' expense, which shall not be counted as a Demand Registration. If so
requested, the Company shall not be required to so comply but shall cooperate in
good faith with the Investors to effect at the time of such request or upon
subsequent request such additional Registration on mutually acceptable terms.
SECTION 6.02. Piggyback Registration. (a) Right To Piggyback. If the
Company proposes to qualify and register any Common Shares or similar securities
or securities convertible into, or exchangeable or exercisable for, such
securities under the Securities Laws with respect to a public offering of
securities of the same type as the Registrable Shares pursuant to an
underwritten offering solely for cash for its own account (other than a
registration statement (i) on Form S-8 or any successor (or foreign private
issuer equivalent) forms thereto, or (ii) filed solely in connection with a
dividend reinvestment plan or employee benefit plan covering officers or
directors of the Company or its Affiliates) or for the account of any holder of
securities of the same type as the Registrable Shares (to the extent that the
Company has the right to include Registrable Shares in any registration
statement to be filed by the Company on behalf of such holder), then the Company
shall give written notice of its intention to do so to the Investors at least 15
days before the anticipated filing date. Such notice shall offer the Investors
the opportunity to qualify and register such amount of Registrable Shares as
they may request (a "Piggyback Registration"). Upon the written request of the
Investors delivered to the Company within 15 days of the date of the notice
aforesaid (which request shall set forth the number of Registrable Shares to be
disposed of and the intended method or methods of distribution thereof), the
Company will use its best efforts to register and qualify such
20
disposition. Subject to Section 6.02(b) hereof, the Company shall include in
each such Piggyback Registration all such Registrable Shares. The Investors
shall be permitted to withdraw all or any portion of the Registrable Shares from
a Piggyback Registration at any time prior to the effective date of such
Piggyback Registration or the filing of a final prospectus; provided, however,
that if such withdrawal occurs after the filing of the Registration Statement
and/or preliminary prospectus with respect to such Piggyback Registration, the
Investors shall reimburse the Company for the portion of the registration
expenses payable with respect to the Registrable Shares so withdrawn.
(b) Priority on Piggyback Registrations. The Company shall permit
the Investors to include all such Registrable Shares on the same terms and
conditions as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the managing underwriter or underwriters
participating in such offering advise the Investors in writing that the total
amount of securities requested to be included in such Piggyback Registration
exceeds the amount which can be sold in (or during the time of) such offering
without delaying or jeopardizing the success of the offering (including the
price per share of the securities to be sold), then the amount of securities to
be offered for the account of the Investors shall be reduced (to zero if
necessary); provided, however, that prior to any reduction in the amount of
Registrable Shares of the Investors to be included in the Piggyback
Registration, the amount of securities to be offered for the account of other
holders of securities (other than senior executives who shall be cut back on a
pro rata basis) shall be reduced to zero.
(c) Right To Abandon. Nothing in this Section 6.02 shall create any
liability on the part of the Company to the Investors if the Company in its sole
discretion should decide not to file a registration statement and/or prospectus
proposed to be filed pursuant to Section 6.02(a) hereof or to withdraw such
registration statement and/or prospectus subsequent to its filing, regardless of
any action whatsoever that the Investors may have taken, whether as a result of
the issuance by the Company of any notice hereunder or otherwise.
21
SECTION 6.03. Holdback Agreement. If during the Effectiveness Period
of a Demand Registration but following the Exclusivity Period of such
Registration (other than in respect of any previously issued Linked Shares), (i)
the Company shall file a registration statement (other than in connection with
the registration of securities issuable pursuant to an employee stock option,
stock purchase or similar plan or pursuant to a merger, exchange offer or a
transaction of the type specified in Rule 145(a) under the Securities Act) with
respect to the Common Shares or similar securities or securities convertible
into, or exchangeable or exercisable for, such securities and (ii) with
reasonable prior notice, the Company (in the case of a non-underwritten public
offering by the Company pursuant to such registration statement) advises the
Investors in writing that a public sale or distribution of such Registrable
Shares would materially adversely affect such offering or the managing
underwriter or underwriters (in the case of an underwritten public offering by
the Company pursuant to such registration statement) advises the Company in
writing (in which case the Company shall notify the Investors) that a public
sale or distribution of Registrable Shares would materially adversely impact
such offering, then the Investors shall, to the extent not inconsistent with
applicable law, refrain from effecting any public sale or distribution of
Registrable Shares during the 10 days prior to the effective date of such
registration statement and until the earliest of (A) the abandonment of such
offering, (B) 90 days from the effective date of such registration statement and
(C) if such offering is an underwritten offering, the termination in whole or in
part of any "hold back" period obtained by the underwriter or underwriters in
such offering from the Company in connection therewith (each such period, a
"Hold Back Period").
SECTION 6.04. Covenants Relating to Rule 144/145. The Company will
prepare and file in a timely manner, such information, documents and reports as
are necessary for compliance by the Company, taking into consideration its
jurisdiction of incorporation and other relevant characteristics, with the
Exchange Act and will, at its expense, forthwith upon the request of the
Investors, deliver to the Investors a certificate, signed by the Company's
principal financial officer, stating (a) the Company's name, address and
telephone number (including area code), (b) the Company's Internal Revenue
Service or other tax identification number, (c) the Company's SEC file number,
(d) the number of Common Shares outstanding as shown by the most recent report
or statement published by the Company, and (e) whether the company has filed the
reports required to be filed under the Exchange Act for a period of
22
at least 90 days prior to the date of such certificate and in addition has filed
the most recent annual report required to be filed thereunder. If at any time
the Company is not required to file, and is not otherwise filing, reports in
compliance with either Section 13 or Section 15(d) of the Exchange Act, the
Company at its expense will forthwith, upon the written request of the
Investors, make available the information specified in paragraph (c)(2) of Rule
144 of the General Rules and Regulations promulgated under the Securities Act.
SECTION 6.05. Registration Procedures. In connection with the
registration obligations of the Company pursuant to and in accordance with
Sections 6.01 and 6.02 hereof (and subject to Sections 6.01 and 6.02 hereof),
the Company shall use commercially reasonable efforts to effect such
registration under the Securities Laws to permit the sale of such Registrable
Shares in accordance with the intended method or methods of disposition thereof,
and pursuant thereto the Company shall as expeditiously as possible (but subject
to Sections 6.01 and 6.02 hereof):
(1) prepare and file (in any event within 60 days after requests for
qualification and registration have been delivered to the Company) in both
English and French languages, as appropriate a preliminary prospectus or
similar document in each of the provinces of Canada and a registration
statement in the United States and such other related documents as may be
necessary or appropriate relating to the proposed distribution and shall,
as soon as possible after any comments of the Commissions have been
satisfied with respect thereto, prepare and file under the Securities Laws
a (final) prospectus in both English and French languages, as appropriate,
and receive receipts therefor and cause such registration statement to
become effective as soon as possible and shall take all other steps and
proceedings that may be necessary in order to qualify the Registrable
Shares for distribution under such Securities Laws by the Investor or any
underwriter and provide the Investors with a reasonable opportunity to
comment thereon;
(2) prepare and file with the Commissions such amendments and
supplements to such preliminary prospectus, (final) prospectus and
registration statement as may be necessary to comply with the provisions
of the Securities Laws with respect to the distribution of all Registrable
Shares and other securities covered thereby until such time as all of such
Registrable Shares and other securities have been
23
disposed of in accordance with the intended method or methods of
disposition by the Investors and provide the Investors with a reasonable
opportunity to comment thereon;
(3) immediately notify the Investors of the happening of any event
as a result of which the preliminary prospectus, the (final) prospectus or
any registration statement, as then in effect, would include a
misrepresentation (as such term is defined in the Securities Act
(Ontario)) or an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make any
statement therein not misleading in the light of the circumstances in
which it was made, and at the request of the Investors prepare and furnish
to the Investors as promptly as practicable a reasonable number of
commercial copies of a supplement to or an amendment of the preliminary
prospectus, the (final) prospectus and any registration statement as may
be necessary so that, as thereafter delivered to the purchasers of such
securities, such document shall not include a misrepresentation (as such
term is defined in the Securities Act (Ontario)) or an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make any statement therein not misleading in the
light of the circumstances in which it was made;
(4) use commercially reasonable efforts to obtain the withdrawal of
any order suspending the effectiveness of such Registration Statement, or
the lifting of any suspension of the qualification or exemption from
qualification of any Registrable Shares for sale in any jurisdiction in
the United States or any cease trade order issued in any jurisdiction in
Canada;
(5) furnish to the Investors, counsel for the Investors and each
managing underwriter, if any, without charge, such number of copies of the
preliminary prospectus, any amended preliminary prospectus, each final
Prospectus, as the Investors may reasonably request in order to facilitate
the disposition of the Registrable Shares covered by such Registration in
conformity with the requirements of the Securities Laws;
(6) prior to any public offering of Registrable Shares covered by
such Registration, use commercially reasonable efforts to register or
qualify such
24
Registrable Shares for offer and sale under the securities or
Blue Sky laws of such jurisdictions as the Investors of such Registrable
Shares shall reasonably request in writing; provided, however, that the
Company shall in no event be required to qualify generally to do business
as a foreign corporation or as a dealer in any jurisdiction where it is
not at the time so qualified or to execute or file a general consent to
service of process in any such jurisdiction where it has not theretofore
done so or to take any action that would subject it to general service of
process or taxation in any such jurisdiction where it is not then subject;
(7) use commercially reasonable efforts to cause all Registrable
Shares covered by such Registration to be listed on each securities
exchange or automated interdealer quotation system, if any, on which
similar securities issued by the Company are then listed or quoted;
(8) provide the transfer agent of the Company for the Registrable
Shares with printed certificates for the Registrable Shares covered by
such Registration, which are in a form eligible for deposit with The
Depository Trust Company or any similar entities;
(9) if such offering is an underwritten offering, make available for
inspection by representatives of the Investors, any underwriter
participating in any offering pursuant to such Registration Statement, and
any attorney, accountant or other agent retained by the Investors or such
underwriter (collectively, the "Inspectors"), all financial and other
records and other information, pertinent corporate documents and
properties of any of the Company and its subsidiaries and affiliates
(collectively, the "Records"), as shall be reasonably necessary to enable
them to exercise their due diligence responsibilities; provided, however,
that the Records that the Company determines, in good faith, to be
confidential and which it notifies the Inspectors in writing are
confidential shall not be disclosed to any Inspector unless such Inspector
signs a confidentiality agreement reasonably satisfactory to the Company
(which shall permit the disclosure of such Records in such Registration
Statement or Prospectus if necessary to avoid or correct a material
misstatement in or material omission from such Registration Statement or
Prospectus) or either (i) the disclosure of such Records is necessary to
avoid or correct a misstatement or omission in such Registration Statement
25
or prospectus or (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction; provided
further, however, that (A) any decision regarding the disclosure of
information pursuant to subclause (i) shall be made only after
consultation with counsel for the applicable Inspectors and the Company
and (B) with respect to any release of Records pursuant to subclause (ii),
the Investors agree that they shall, promptly after learning that
disclosure of such Records is sought in a court having jurisdiction, give
notice to the Company so that the Company, at the Company's expense, may
undertake appropriate action to prevent disclosure of such Records;
(10) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and
substance as is customary in underwritten secondary distributions) and
take all such other appropriate and reasonable actions requested by the
Investors of a majority of the Registrable Shares being sold in connection
therewith (including those reasonably requested by the managing
underwriters) in order to expedite or facilitate the disposition of such
Registrable Shares, and in such connection, (i) use commercially
reasonable efforts to obtain opinions of counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriters and counsel
to the Investors), addressed to the Investors and each of the underwriters
as to the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such counsel and underwriters, (ii) use commercially
reasonable efforts to obtain "cold comfort" letters and updates thereof
from the independent certified public accountants of the Company (and, if
necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data are, or are required to be,
included in the Registration Statement), addressed to the Investors
(unless such accountants shall be prohibited from so addressing such
letters by applicable standards of the accounting profession), any
securities regulatory authorities to whom such letters are customarily
addressed and each of the underwriters, such letters to be in customary
form and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings, (iii) if
26
requested and if an underwriting agreement is entered into, provide
indemnification provisions and procedures substantially to the effect set
forth in Section 6.08 hereof with respect to all parties to be indemnified
pursuant to said Section. The above shall be done at each closing under
such underwriting or similar agreement, or as and to the extent required
thereunder;
(11) otherwise use all reasonable efforts to comply with the
Securities Laws and with all applicable rules and regulations of the SEC
and the OSC, and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the
first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act; and
(12) in the case of any underwritten offering the Company will
participate in customary "roadshow" presentations as reasonably requested
by the lead or co-lead managing underwriter(s).
The Company may require the Investors to furnish such information
regarding the Investors and their intended method of disposition of such
Registrable Shares as it may from time to time reasonably request in writing. If
any such information is not furnished within a reasonable period of time after
receipt of such request, the Company may exclude the Investors' Registrable
Shares from such Registration.
The Investors agree that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 6.05(3)
hereof, that they shall forthwith discontinue disposition of any Registrable
Shares covered by such Registration Statement or the related Prospectus until
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6.05(3) hereof, or until the Investors are advised in writing (the
"Advice") by the Company that the use of the applicable Prospectus may be
resumed, and have received copies of any amended or supplemented Prospectus or
any additional or supplemental filings which are incorporated, or deemed to be
incorporated, by reference in such Prospectus (such period during which
disposition is discontinued being an "Interruption Period") and, if requested by
the Company, the Investors shall deliver to the Company (at the expense of the
Company) all copies then in its possession, other than permanent file copies
then in such holder's possession, of
27
the Prospectus covering such Registrable Shares at the time of receipt of such
request.
The Investors further agree not to utilize any material other than
the applicable current preliminary prospectus or Prospectus in connection with
the offering of such Registrable Shares.
SECTION 6.06. Registration Expenses. Whether or not any Registration
Statement or prospectus is filed or becomes effective, as the case may be, the
Company shall pay all costs, fees and expenses incident to the Company's
performance of or compliance with this Agreement, including (i) all registration
and filing fees, including NASD and provincial regulatory fees, filing fees,
(ii) all fees and expenses of compliance with Securities Laws or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection therewith,
(iii) printing expenses (including expenses of printing certificates for
Registrable Shares and of printing prospectuses if the printing of prospectuses
is requested by the Investors or the managing underwriter, if any), (iv) fees
and disbursements of counsel for the Company, (v) fees and disbursements of all
independent certified public accountants of the Company (including expenses of
any "cold comfort" letters required in connection with this Agreement) and all
other persons retained by the Company in connection with such Registration
Statement and (vi) all other costs, fees and expenses incident to the Company's
performance or compliance with this Agreement. Notwithstanding the foregoing,
the fees and expenses of any persons retained by the Investors, including legal
counsel, and any discounts, commissions or brokers' fees or fees of similar
securities industry professionals and any transfer taxes relating to the
disposition of the Registrable Shares by the Investors, will be payable by the
Investors and the Company will have no obligation to pay any such amounts.
SECTION 6.07. Underwriting Requirements. (a) Subject to Section
6.07(b) hereof, the Investors shall have the right, by written notice, to
request that any Demand Registration provide for an underwritten offering.
(b) In the case of any underwritten offering pursuant to a Demand
Registration, the Investors shall select the institution or institutions that
shall manage or lead such offering, which institution or institutions shall be
reasonably satisfactory to the Company. In the case of any underwritten offering
pursuant to a Piggyback Registration, the Company shall select the institution
or institutions that shall manage or lead such offering. The
28
Investors shall not be entitled to participate in an underwritten offering
unless and until they have entered into an underwriting or other agreement with
such institution or institutions for such offering in such form as the Company
and such institution or institutions shall determine.
SECTION 6.08. Indemnification. (a) Indemnification by the Company.
The Company shall, without limitation as to time, indemnify and hold harmless,
to the full extent permitted by law, the Investors, each other person who
participates as an underwriter in an offering of Registrable Shares made
pursuant to this Article VI, the officers, directors, partners, members and
agents and employees of each of them, each Person who controls the Investors
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, partners, members, agents and
employees of each such controlling person, to the fullest extent lawful, from
and against any and all losses, claims, damages, liabilities, judgment, costs
(including, without limitation, costs of preparation and reasonable attorneys'
fees) and expenses (collectively, "Losses"), as incurred, arising out of or
based upon any untrue or alleged untrue statement of a material fact contained
in any Registration Statement or Prospectus utilized in connection with a
Registration hereunder or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are based upon
information furnished in writing to the Company by or on behalf of any Investor
or its Affiliates expressly for use therein; provided, however, that the Company
shall not be liable to such Investor to the extent that any such Losses arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary prospectus if (i) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus, such Investor failed to send or deliver a copy of the Prospectus
with or prior to the delivery of written confirmation of the sale of Registrable
Shares by such Investor to the person asserting the claim from which such Losses
arise and (ii) the Prospectus would have corrected in all material respects such
untrue statement or alleged untrue statement or such omission or alleged
omission; and provided further, however, that the Company shall not be liable in
any such case to the extent that any such Losses arise out of or are based upon
an untrue statement or alleged untrue statement or omission or alleged omission
in the Prospectus, if (x) such untrue
29
statement or alleged untrue statement, omission or alleged omission is corrected
in all material respects in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such Investor thereafter fail to
deliver such Prospectus as so amended or supplemented, prior to or concurrently
with the sale of Registrable Shares.
(b) Indemnification by the Investors. In connection with any
Registration Statement in which any Investor is participating, such Investor
shall furnish to the Company in writing such information as the Company
reasonably requests for use in connection with such Registration Statement or
the related Prospectus and agree jointly and severally to indemnify, to the full
extent permitted by law, the Company, each other person who participates as an
underwriter in an offering of Registrable Shares made pursuant to this Article
VI, its directors, partners, members, officers, agents or employees, each Person
who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act) and the directors, partners, members,
officers, agents or employees of such controlling Persons, from and against all
Losses arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in such Registration Statement or the related Prospectus
or any amendment or supplement thereto, or any preliminary prospectus, or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue or alleged
untrue statement or omission or alleged omission is based upon any information
so furnished in writing by or on behalf of such Investor or its affiliates to
the Company expressly for use in such Registration Statement or Prospectus.
(c) Conduct of Indemnification Proceedings. If any Person shall be
entitled to indemnity hereunder (an "indemnified party"), such indemnified party
shall give prompt notice to the party from which such indemnity is sought (the
"indemnifying party") of any claim or of the commencement of any proceeding with
respect to which such indemnified party seeks indemnification or contribution
pursuant hereto; provided, however, that the delay or failure to so notify the
indemnifying party shall not relieve the indemnifying party from any obligation
or liability except to the extent that the indemnifying party has been
prejudiced by such delay or failure. The indemnifying party shall have the
right, exercisable by
30
giving written notice to an indemnified party promptly after the receipt of
written notice from such indemnified party of such claim or proceeding, to
assume, at the indemnifying party's expense, the defense of any such claim or
proceeding, with counsel reasonably satisfactory to such indemnified party;
provided, however, that (i) an indemnified party shall have the right to employ
separate counsel in any such claim or proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless: (1) the indemnifying party agrees to
pay such fees and expenses; (2) the indemnifying party fails promptly to assume
the defense of such claim or proceeding or fails to employ counsel reasonably
satisfactory to such indemnified party; or (3) the named parties to any
proceeding (including impleaded parties) include both such indemnified party and
the indemnifying party, and such indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to it that are
inconsistent with those available to the indemnifying party or that a conflict
of interest is likely to exist among such indemnified party and any other
indemnified parties (in which case the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party);
and (ii) subject to clause (3) above, the indemnifying party shall not, in
connection with any one such claim or proceeding or separate but substantially
similar or related claims or proceedings in the same jurisdiction, arising out
of the same general allegations or circumstances, be liable for the fees and
expenses of more than one firm of attorneys (together with appropriate local
counsel) at any time for all of the indemnified parties, or for fees and
expenses that are not reasonable. Whether or not such defense is assumed by the
indemnifying party, such indemnified party shall not be subject to any liability
for any settlement made without its consent. The indemnifying party shall not
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release, in form and substance reasonably
satisfactory to the indemnified party, from all liability in respect of such
claim or litigation for which such indemnified party would be entitled to
indemnification hereunder.
(d) Contribution. If the indemnification provided for in this
Section 6.08 is unavailable to an indemnified party in respect of any Losses
(other than in accordance with its terms), then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by
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such indemnified party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the indemnifying party, on the one
hand, and such indemnified party, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such indemnifying
party, on the one hand, and indemnified party, on the other hand, shall be
determined by reference to, among other things, whether any action in question,
including any untrue statement of a material fact or omission or alleged
omission to state a material fact, has been taken by, or relates to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent any such action, statement or omission. The amount paid or payable by a
party as a result of any Losses shall be deemed to include any legal or other
fees or expenses incurred by such party in connection with any investigation or
proceeding. The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6.08(d) were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(e) Other Indemnification. Indemnification similar to that specified
in the preceding subdivisions of this Section 6.08 (with appropriate
modifications) shall be given by the Company and the Investors with respect to
any required registration or other qualification of securities under any
Federal, state or provincial law or regulation of governmental authority other
than the Securities Laws.
(f) Indemnification Payments. The indemnification required by this
Section 6.08 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred and reasonably acceptable
documentation has been delivered to the indemnifying party.
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ARTICLE VII
Miscellaneous
SECTION 7.01. Termination. (a) The obligations of the
Investors and the Company set forth in Articles III, IV and V shall
terminate, except with respect to liability for prior breaches thereof,
upon the expiration of the Standstill Period.
(b) The obligations of the Company and the Investors set forth in
Article VI (other than Section 6.08 hereof) shall terminate on the first date on
which no Registrable Shares remain outstanding.
SECTION 7.02. Publicity. No public release or announcement
concerning the transactions contemplated by Article VI hereof shall be issued by
any party without the prior consent of the other parties, except to the extent
that such party is advised by counsel that such release or announcement is
necessary or advisable under applicable law or the rules or regulations of any
securities exchange, in which case the party required to make the release or
announcement shall to the extent practicable provide the other party with an
opportunity to review and comment on such release or announcement in advance of
its issuance.
SECTION 7.03. Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) other than to a Controlled Subsidiary in compliance with Section 4.03
hereof, shall not be assigned by operation of law or otherwise without the prior
written consent of the other parties. Any person who agrees pursuant to Section
5.01 hereof to become a party to this Agreement as an Investor shall thereupon
become, and have all the rights and obligations of, an Investor hereunder. If
the transferring Investor elects, any transferee of at least one-third of the
Base Share Number shall have all rights and obligations of an Investor under
Article VI hereof. Any attempted assignment or transfer in violation of this
Section 7.03 shall be void and of no effect. Subject to the foregoing, the
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective estates, heirs, successors and assigns.
SECTION 7.04. Amendments; Waivers. This Agreement may not be
modified, amended, altered or
33
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto. The waiver by any party of a breach of any
provision of this Agreement shall not operate, or be construed, as a waiver of
any subsequent breach thereof.
SECTION 7.05. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed given (i)
on the first Business Day following the date received, if delivered personally
or by telecopy (with telephonic confirmation of receipt by the addressee), (ii)
on the Business Day following timely deposit with an overnight courier service,
if sent by overnight courier specifying next day delivery and (iii) on the first
Business Day that is at least five days following deposit in the mails, if sent
by first class mail, to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to the Investors, to:
Cyprus Amax Minerals Corporation
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Facsimile: 000-000-0000
Attention: General Counsel
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X ZM6
Facsimile: 000-000-0000
Attention: Xxxxxxxx Xxxxx
34
If to the Company, to:
Kinross Gold Corporation
00 Xxxx Xxxxxx Xxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0XX
Facsimile: 000-000-0000
Attention: Xxxx Xxxxx
with a copy (which shall not constitute notice) to:
Xxxxx Xxxxx
00 Xxxx Xxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
SECTION 7.06. Governing Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the
State of New York.
SECTION 7.07. Specific Performance. Each party recognizes and
acknowledges that a breach by it of Articles III, IV or V would cause the other
parties to sustain damages for which they would not have an adequate remedy at
law for money damages, and therefore each party agrees that in the event of any
such breach any of the other parties shall be entitled to seek the remedy of
specific performance of such Articles III, IV or V and injunctive and other
equitable relief in addition to any other remedy to which it may be entitled, at
law or in equity.
SECTION 7.08. Counterparts; Effectiveness. This Agreement may be
executed in two or more counterparts, all of which shall be considered one and
the same agreement, and shall become effective when two or more counterparts
have been signed by each of the parties and delivered to the other parties.
SECTION 7.09. Descriptive Headings. The descriptive
headings used herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
SECTION 7.10. Severability. Whenever possible, each provision or
portion of any provision of this Agreement
35
shall be interpreted in such manner as to be effective but if any provision or
portion of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision or portion of any provision, and this
Agreement will be reformed, construed and enforced as if such invalid, illegal
or unenforceable provision or portion of any provision had never been contained
herein. The parties shall endeavor in good faith negotiations to replace any
invalid, illegal or unenforceable provision with a valid provision the effects
of which come as close as possible to those of such invalid, illegal or
unenforceable provision.
SECTION 7.11. Calculation of Time Periods. Except as otherwise
indicated, all periods of time referred to herein shall include all Saturdays,
Sundays and holidays; provided, however, that if the date to perform the act or
give any notice with respect to this Agreement shall fall on a day other than a
Business Day, such act or notice may be timely performed or given if performed
or given on the next succeeding Business Day.
SECTION 7.12. Expenses. Except as otherwise specifically set forth
herein, the Company, the Significant Shareholder and the Investors shall each
bear their own legal fees and other costs and expenses with respect to the
negotiation, execution and delivery of this Agreement and consummation of the
transactions contemplated hereby.
IN WITNESS WHEREOF, the Company and the Investor have caused this
Agreement to be duly executed as of the day and year first above written.
KINROSS GOLD CORPORATION
by
/s/ XXXXXX X. XXXXXX
Name: Xxxxxx X. Xxxxxx
Title: Chairman and Chief
Executive Officer
CYPRUS AMAX MINERALS COMPANY
by
/s/ XXXXXX X. XXXX
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
