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Amended and Restated

Shareholders' Agreement



Erdenes MGL LLC

and

Ivanhoe Oyu Tolgoi (BVI) Ltd

and

Oyu Tolgoi Netherlands B.V.

and

Oyu Tolgoi LLC (formerly known as Ivanhoe Mines Mongolia Inc

LLC)



Amended and Restated Shareholders' Agreement



Date



8 June 2011



Parties

1.



Erdenes MGL LLC, a State owned company, duly incorporated under the Company Law of

Mongolia (SHC).



2.



Ivanhoe Oyu Tolgoi (BVI) Ltd, a body corporate, duly incorporated under the laws of the

British Virgin Islands and having an office at 9 Columbus Centre Building, Road Town,

Tortola, British Virgin Islands (IVN).



3.



Oyu Tolgoi Netherlands B.V., a body corporate, duly incorporated under the laws of The

Netherlands and having an office at Prins Bernhardplein 200, 1097 JB, Amsterdam, The

Netherlands (OTN).



4.



Oyu Tolgoi LLC (formerly known as Ivanhoe Mines Mongolia Inc LLC), a body corporate,

duly incorporated under the Company Law of Mongolia (the Company).



Recitals

IVN, OTN and SHC are the Shareholders in the Company at the date of this Agreement and,

together with the Company, are parties to the Shareholders' Agreement dated 6 October 2009

(Previous Shareholders' Agreement), which regulates their rights and obligations as

Shareholders of the Company.

On the date of the Previous Shareholders' Agreement, the Government of Mongolia and the

Company, Ivanhoe Mines Ltd and Rio Tinto International Holdings Limited entered into an

Investment Agreement, to regulate the terms and conditions under which the development

and operation of the OT Project will occur.

The Shareholders and the Company now wish to amend the Previous Shareholders'

Agreement on and from the date of this Agreement, and to restate it on the terms set out in

this Agreement.



1.



Definitions

The definitions set out in clause 25 shall apply in this Agreement.



2.



Effect of this Agreement

(a)



Subject to clause 12(b), on and from the date of this Agreement, this Agreement amends

and restates the Previous Shareholders' Agreement.



(b)



For the avoidance of doubt, subject to clause 12(b), the activities of the Company and the

Shareholders have been and will be governed by:

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Amended and Restated Shareholders' Agreement



3.



(i)



the Previous Shareholders' Agreement prior to the date of this Agreement; and



(ii)



this Agreement on and from the date of this Agreement.



Conditions Precedent

This Agreement and the obligations of the Parties under this Agreement (other than this clause 3 and

clauses 4.3(d) (Completion obligations), 17 (Representations and warranties), 23 (Dispute

resolution) and 24 (Miscellaneous)) do not become binding on the Parties unless and until the

Effective Date occurs.



4.



Equity structure of Company



4.1



Government Issue Shares – 34%

On the Completion Date, SHC, on behalf of the Government of Mongolia, shall hold 34% of the

Company’s Shares free from all Pledges on the terms set out in this Agreement. Such Percentage

Interest of SHC shall not be diluted without its consent, by the issue of any new Shares.



4.2



4.3



Share issue

(a)



As consideration for the contribution to be made by the Government of Mongolia to the

OT Project under the Investment Agreement, upon the Investment Agreement being

signed by and on behalf of the Government of Mongolia (in accordance with the

Resolution and the Minerals Law), the Company agrees to issue the Government Issue

Shares to SHC in accordance with this Agreement.



(b)



The Company shall issue the Government Issue Shares to SHC on the Completion Date

on the terms set out in this Agreement. All existing Shareholders agree not to exercise

their right to pre-empt the issue of the Government Issue Shares issued in accordance

with this clause 4.



Completion obligations

(a)



Within not later than fourteen (14) days after the Effective Date, the Company must

authorise the issue to SHC of the Government Issue Shares on the Completion Date.



(b)



The Company must do all things necessary to issue to SHC the Government Issue Shares

on the Completion Date.



(c)



On the Completion Date, in Ulaanbaatar, the Company must:

(i)



record in its books the issue of the Government Issue Shares to SHC;



(ii)



deliver to SHC the share certificate in respect of the Government Issue Shares;

and



(iii)



lodge with the State Registration Agency and the Foreign Investment and

Foreign Trade Agency documents recording the issue to SHC of the

Government Issue Shares.



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Amended and Restated Shareholders' Agreement

(d)



4.4



Before the Completion Date, SHC and the Ivanhoe Shareholders shall deliver written

notice to the Company and each other nominating its Directors under clause 5.3(a). The

nominated Directors will be considered as appointed on the Completion Date.



Percentage Interest of SHC as at Completion Date

Immediately after the issue of the Government Issue Shares to SHC, the Percentage Interest of SHC

in the Company will be 34%.



5.



Business and management of Company



5.1



Scope of Company business

The Company may conduct any activities not prohibited by law and shall exercise rights and incur

obligations necessary to conduct such activities as are related to Core Operations.



5.2



Authority of Board of Directors

The Board of Directors shall exercise authority with respect to all matters in connection with the

Company, except for those matters reserved to the exclusive authority of a meeting of Shareholders

under clause 5.10(a).



5.3



Directors

(a)



The Parties acknowledge that, for the purpose of appointing members of the Board of the

Directors on the Completion Date, SHC is entitled to nominate three Directors and the

Ivanhoe Shareholders are entitled to nominate six Directors, in accordance with clause

5.3(b).



(b)



Subject to clause 5.3(c), each Shareholder having a Percentage Interest of 10% or more is

entitled to directly nominate and replace from time to time, a number of Directors

equivalent to the number of percentage points of its Percentage Interest divided by ten

(10). Fractions in the number of Directors are to be disregarded in this calculation.



(c)



For the purpose of determining a Shareholder’s Percentage Interest under clause 5.3(b),

the shareholding of the Shareholder and its Related Corporations will be aggregated and

such aggregate Percentage Interest will confer upon such Shareholders collectively

(acting through one or more of such Shareholders) the rights set out in clause 5.3(b).



(d)



The Directors nominated in accordance with clause 5.3(b) from time to time shall be

appointed at the next meeting of Shareholders in accordance with clause 5.10(b), at

which meeting each Shareholder agrees to vote in favour of the other Shareholders’

nominated Directors.



(e)



Each Director may appoint any person to act as an alternate Director in the Director's

place, either for a stated period or until the happening of a specified event, whenever by

temporary absence or illness or otherwise the Director is unable to attend to duties as a

Director. The appointment must be in writing and signed by the appointing Director and

a copy of the appointment must be given to the Company.



(f)



With notification to the other Shareholders, a Shareholder may replace an appointed

Director, and such appointment will be confirmed at a Shareholders’ meeting.

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Amended and Restated Shareholders' Agreement

5.4



Voting

Each Director is entitled to one vote.



5.5



Nominee Directors

Provided that a Director acts in good faith in the best interests of the Company as a whole, a

Director appointed by a Shareholder may take into account the interests of that Director’s appointor

and may act on the wishes of that appointor in performing any of his or her duties or exercising any

power, right or discretion as a Director in relation to the Company.



5.6



Meetings of Board of Directors

(a)



The Directors must meet quarterly or more frequently as requested by any three Directors

(provided that three Directors cannot require a meeting to be held within 30 days of the

most recent meeting, except in the case of an emergency). Unless otherwise agreed by

resolution of the Board of Directors:

(i)



each meeting of the Board of Directors must be held in Ulaanbaatar; and



(ii)



at least 21 days’ notice must be given to each Director of all meetings of the

Board of Directors.



The Board of Directors by its resolution may hold its meeting using video conferencing

or similar instantaneous communication technology, provided such meeting is held in

Ulaanbaatar.

(b)



Each notice of meeting must contain, among other things, an agenda specifying in

reasonable detail the matters to be discussed at the relevant meeting and must be

accompanied by any relevant papers for discussion at that meeting. Unless otherwise

agreed by each of the Directors, a meeting of the Board of Directors may only resolve

matters specifically described in the agenda.



(c)



Each Shareholder must bear all travelling and other expenses incurred by any Director

appointed by it in attending and returning from meetings of the Board of Directors and

performing his or her duties as a Director. The Company will supply or provide transport

to and from Ulaanbaatar, accommodation and meals for Directors in respect of a meeting

of the Board of Directors held at the OT Project site.



(d)



A quorum for a meeting of the Board of Directors is constituted by the attendance (in

person or by alternate) of an Overwhelming Majority of the Directors (which must

include at least one Director appointed by the Ivanhoe Shareholders and one Director

appointed by SHC). No business is to be transacted at a meeting of the Board of

Directors meeting unless a quorum is present, except for the adjournment of the meeting.



(e)



If there is not a quorum at a meeting of Directors within 30 minutes after the time

specified in the notice of meeting, the meeting will stand adjourned for two days. No

changes may be made in the agenda for the adjourned meeting. There shall be a quorum

at the adjourned meeting if an Overwhelming Majority of members of the Board of

Directors are present.



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Amended and Restated Shareholders' Agreement

5.7



5.8



Chair

(a)



The Ivanhoe Shareholders may appoint one of the Directors appointed by them to be the

Chair of the Board of Directors.



(b)



If the Chair of the Board of Directors is not present at any meeting of the Board of

Directors, the Ivanhoe Shareholders may appoint one of their Directors to act as Chair for

the purpose of that meeting.



(c)



The Chair of the Board of Directors has a casting vote in the event that there is a tied

vote cast by the Directors on any matter.



Board of Directors’ decisions

Any resolution or decision of the Board of Directors must be made at a meeting of Directors by the

affirmative vote of an Overwhelming Majority of votes of the Directors of the Company who are

present (in person or by alternate) at the meeting and entitled to vote.



5.9



Board of Directors’ committees

The Board of Directors may constitute one or several committees of the Board of Directors which

may be entrusted with any matter(s) which the Board of Directors determines to be appropriate.



5.10



Shareholder approvals

(a)



All matters in connection with the Company are within the authority of the Board of

Directors in accordance with clause 5.2, other than the matters set out below in this

clause 5.10(a), which matters are within the authority of a meeting of Shareholders to

consider and decide:

(i)



amendments to the Charter or the adoption of a new version of the Charter;



(ii)



reorganization of the Company by consolidation, merger, division or

transformation;



(iii)



an exchange of the Company’s debts for Shares;



(iv)



reorganization of the Company by transformation;



(v)



liquidation of the Company and the appointment of a liquidation commission;



(vi)



a split of or consolidation of the Company’s Shares;



(vii)



subject to clause 6 of this Agreement, the completion of any conflict of interest

transaction specified in Chapter 12 of the Company Law;



(viii)



election of members of the Board of Directors and termination of their powers

prior to the expiration of their terms;



(ix)



election of members of the Supervisory Board and termination of their powers

prior to the expiration of their terms;



(x)



subject to clauses 4.2, 10.2, 10.3 and 11.1, whether the Shareholders shall have

the pre-emptive rights to acquire the Company’s shares or other securities as

provided for in Article 39 of the Company Law;



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Amended and Restated Shareholders' Agreement



(b)



(xi)



consideration and approval of reports prepared by the Board of Directors with

respect to the Company’s annual operations and financial statements;



(xii)



approval of any major transactions specified in Chapter 11 of the Company

Law;



(xiii)



approval of any acquisition of its shares by the Company pursuant to the

Company Law;



(xiv)



approving the amount of salaries and bonuses to be given to the members of the

Board of Directors unless otherwise provided in the Company’s Charter;



(xv)



other matters submitted to the meeting by the Board of Directors; and



(xvi)



other matters required to be submitted to a shareholder meeting for approval as

provided in the Company Law or in the Company’s Charter.



Matters that require shareholder approval under clause 5.10(a)(i) to clause 5.10(a)(vii)

(inclusive) will be made by the affirmative vote of the representatives of a Shareholder or

Shareholders holding an Overwhelming Majority of the total voting rights present at a

meeting of Shareholders. All other matters under clause 5.10(a) will be made by the

affirmative vote of the representatives of a Shareholder or Shareholders holding a

majority of the total voting rights present at a meeting of Shareholders.



5.11



(c)



A resolution by the Board of Directors to convene a Shareholders’ meeting must include

that the Shareholders be given at least two (2) weeks prior notice of the Shareholders’

meeting.



(d)



A quorum for a meeting of Shareholders is constituted by the presence of one

representative of SHC, and one representative of the Ivanhoe Shareholders. No business

may be transacted at any meeting of Shareholders unless a quorum is present at the

commencement of the meeting, except for the adjournment of the meeting.



(e)



If there is not a quorum at a meeting of Shareholders within 30 minutes after the time

specified in the notice of meeting, the meeting will stand adjourned to the same day in

the following week at the same time and place. No changes may be made in the agenda

for the adjourned meeting. If there is not a quorum at the adjourned meeting within 30

minutes after the time for that meeting, the meeting will stand adjourned again to the

same day in the following week at the same time and place. No changes may be made in

the agenda for the adjourned meeting. There shall be a quorum at the second adjourned

meeting if a representative or representatives of a Shareholder or Shareholders entitled to

vote, and holding at least twenty percent (20%) of the Shares of the Company, are

present.



Voting by Shareholders

Each Shareholder is entitled to that number of votes which is equivalent to the number of Shares

held by it.



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Amended and Restated Shareholders' Agreement

5.12



Domestic procurement obligation

The Company shall, on a priority basis, purchase and utilize services supplied by Mongolian citizens

and/or legal entities, and equipment, raw materials, materials and spare parts manufactured in

Mongolia, with preference to businesses operating in the Umnugovi Aimag, to the extent such

services and materials are available on a competitive time, cost, quantity and quality basis, and shall

give preference to Mongolian suppliers of freight and transportation services required for the OT

Project.



6.



Conflict of interest transactions



6.1



Application of Chapter 12 of the Company Law

Except in the circumstances described in clause 6.2, the provisions of the Company Law of

Mongolia relating to conflict of interest transactions including Chapter 12 of the Company Law shall

apply with respect to the Company.



6.2



Relevant Transactions

In accordance with Article 86.4 of the Company Law of Mongolia, the Company’s Charter shall

state that Chapter 12 of the Company Law shall not apply to any transaction between the Company

(on the one hand) and any Shareholder or Related Corporation of any Shareholder (on the other

hand). In respect of Relevant Transactions, the following provisions apply:

(a)



(b)



The Company is permitted, without the prior approval of the Shareholders, to enter into

Relevant Transactions, provided that each Relevant Transaction must be:

(i)



at a competitive market price;



(ii)



on commercial terms comparable to what would be agreed between unrelated

parties; and



(iii)



promptly disclosed to the Shareholders.



Each Director shall vote on any Relevant Transaction. If a Shareholder considers that a

Relevant Transaction does not meet the criteria of clause 6.2(a), then it may give notice

to the Company and the other Shareholders, and the following provisions shall apply:

(i)



The notice shall be given within 30 days of the Relevant Transaction being

disclosed to the Shareholder and shall include reason(s) why the Shareholder

believes the Relevant Transaction does not meet the criteria of clause 6.2(a).



(ii)



The Relevant Transaction shall be discussed at the next meeting of the Board of

Directors.



(iii)



If a Shareholder is not satisfied with the discussion on the Relevant Transaction

at that meeting of the Board of Directors, it shall give notice to the other

Shareholders and the Board of Directors within 7 days after that meeting, and

the Shareholders shall then jointly appoint a suitably qualified independent

expert to assess whether or not the Relevant Transaction meets the criteria in

clause 6.2(a).

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Amended and Restated Shareholders' Agreement



(c)



(iv)



If the Shareholders cannot agree on an independent expert within 15 days of the

notice under clause 6.2(b)(iii), the independent expert shall be chosen by an

internationally recognised and reputable audit and accounting firm jointly

agreed upon by the Shareholders.



(v)



If the independent expert finds that the Relevant Transaction does not meet the

criteria in clause 6.2(a), that Relevant Transaction shall not be void, however,

the Shareholder that is a party to the Relevant Transaction (or whose Related

Corporation is a party to the Relevant Transaction) shall be liable for any loss

caused to the Company as a result of the departure from the criteria in clause

6.2(a).



(vi)



Notwithstanding the finding of the independent expert, the Company shall bear

all the costs of the independent expert.



At the request of a Shareholder, the Company and the other Shareholders will provide

that Shareholder with information reasonably necessary to satisfy that the Relevant

Transaction meets the criteria in clause 6.2(a).



7.



Executive body and Management Team



7.1



Executive body

The executive body of the Company shall comprise the Company’s senior management and shall be

responsible for the Company’s day-to-day activities.



7.2



Management Team

(a)



The Board of Directors shall engage IVN or OTN, or one or more Related Corporations

of IVN or OTN, to act individually, or collectively as a group (the Management Team).

The Management Team shall provide services and support to the executive body

described in clause 7.1 in respect to the Company’s operations and activities, including

the Core Operations.



(b)



The Ivanhoe Shareholders may, from time to time, nominate a replacement Management

Team and the Board of Directors shall resolve to appoint the nominated replacement

Management Team.



(c)



The services and support provided by the Management Team to enable the executive

body to fulfil the Company’s day-to-day activities may include engineering, operational,

planning and evaluation, environmental, marketing, procurement, legal, commercial,

treasury and financial services, and any other services that are reasonably considered to

be necessary for the efficient conduct of Core Operations.



7.3



Management Team functions

(a)



The Management Team shall have all rights and authorities required to provide services

and support to the executive body described in clause 7.1 in respect to the Company’s

operations and activities, including the Core Operations.



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Amended and Restated Shareholders' Agreement

(b)



7.4



The Board of Directors shall monitor the activities of and liaise with the Management

Team as necessary or appropriate. The Management Team shall report on a quarterly

basis in writing to the Board of Directors in relation to the Company’s operations and

activities. The individual responsible for the Management Team (or in his or her

absence, their representative) will attend each quarterly meeting of the Board of Directors

under clause 5.6(a). Each report shall be given to the Board of Directors within 30 days

after the end of a Quarter.



Management Services Payment

(a)



The Company must pay to the Management Team the Management Services Payment.



(b)



The Management Services Payment will be calculated and payable quarterly in arrears

and within 10 Working Days of the end of that Quarter.



(c)



The amount of the Management Services Payment will be:



(d)



(i)



3% of all Capital Costs and Operating Costs incurred in the period from the

Effective Date up to the Commencement of Production; and



(ii)



6% of all Capital Costs and Operating Costs incurred after the Commencement

of Production.



As soon as practicable after the audited financial statements for the Company for a

Financial Year are available, which audit shall be conducted by an internationally

recognised and reputable audit and accounting firm appointed by the Board of Directors,

the Shareholders will reconcile the Capital Costs and Operating Costs shown in those

statements against the Capital Costs and Operating Costs used in the calculation of the

Management Services Payment in respect of that Financial Year. If there is a

discrepancy, then the Company or the Management Team (as the case may be) shall

promptly make a payment to the other in order to adjust the Management Services

Payment that has been paid in respect of that Financial Year.



(e)



The Management Team may sub-contract or assign part of its service and support

functions to a Related Corporation of IVN or OTN. If the Management Team does so,

then the Company shall directly pay to that Related Corporation of IVN or OTN (as

applicable) the part of the Management Services Payment relating to such functions (as

may be specified by the Management Team). The Management Team may also direct

the Company in writing to directly pay to any member of the Ivanhoe Group or the Rio

Tinto Group the whole or any part of the Management Services Payment.



(f)



During the final calendar Quarter of each Financial Year, the Board of Directors will

conduct an annual review of the Management Team’s performance of its functions

during that Financial Year.



(g)



Either or both of the Ivanhoe Shareholders may enforce this Agreement for and on behalf

of the Management Team (including by the issue of a notice of dispute under clause 23).



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Amended and Restated Shareholders' Agreement

8.



Budgets & financial information



8.1



Annual plans & budgets



8.2



(a)



Within 10 Working Days after the Completion Date, the Company (or the Management

Team) shall submit to the Board of Directors the first operating program and budget for

the Company in respect of the remainder of the Financial Year and the Board of

Directors shall meet in order to consider and vote on that program and budget.



(b)



Before the commencement of each Financial Year thereafter, the Company (or the

Management Team) must prepare and submit to the Board of Directors, for approval, a

draft operating program and budget for the Company for that Financial Year.



(c)



The Board of Directors must consider and vote on each program and budget at least 30

days before the commencement of the Financial Year. Approval of a program and

budget constitutes authority for the Company and Management Team to undertake all

relevant action and incur all approved expenditure for that program and budget.



(d)



The Company (or the Management Team) may, if circumstances require it, prepare a

revised or supplementary program and budget and submit it to the Board of Directors for

approval.



Financial information

The Company must provide to each Director and Shareholder:



8.3



(a)



after the end of each calendar month, unaudited management accounts;



(b)



after the end of each Financial Year, copies of the audited financial statements of the

Company;



(c)



at the time of the approval of the annual operating program and budget, an annual plan

for the cash requirements of the Company, indicating forecast sources and uses of cash

over the following 12 month period; and



(d)



any other information the Shareholders or a Director may at any time reasonably require.



Management accounts

The Company shall maintain its management accounts in conformity with GAAP or IFRS, and

applicable Mongolian accounting standards.



9.



Financing of Company



9.1



Called Sums

The Company (or on its behalf, the Management Team) may by notice in writing request the

Shareholders to contribute funds in accordance with their Percentage Interests to meet the projected

cash requirements of the Company under the programs and budgets approved by the Board of

Directors (each a Called Sum). At the Ivanhoe Shareholders request, Called Sum notices will be

issued to one or more Ivanhoe Shareholders for the whole or any part of their combined Called

Sums in the proportions directed by the Ivanhoe Shareholders (for example, to OTN for the whole

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Amended and Restated Shareholders' Agreement

amount of the OTN and IVN combined Called Sums, in which case IVN would not be issued a

Called Sum notice).

9.2



Financing of Called Sums

The Parties intend that Called Sums shall be discharged by the methods (or by a combination of

methods) as determined by the Board of Directors from time to time, including:

(a)



by way of common equity (via the issue of Shares); and



(b)



by debt (via Shareholder Debt),



and during the Funding Period clauses 11, 12 and 13 shall apply.

9.3



9.4



9.5



Contributions to Called Sums

(a)



The Parties agree that an Ivanhoe Shareholder’s obligations to contribute to Called Sums

may be discharged in whole or in part by the IVN Provider or another Ivanhoe

Shareholder or Ivanhoe Shareholders (for example, OTN may discharge the whole of

IVN’s obligation and OTN’s obligation to contribute to a Called Sum, in which case IVN

would not contribute its Called Sum).



(b)



All contributions of Called Sums must be in USD unless required otherwise by the Board

of Directors. If the Board of Directors so resolves, then the Parties must make

contributions in the currency or currencies specified in any notice of a Called Sum given

under clause 9.1.



Periods covered by Called Sums

(a)



On and from the Completion Date, requests for contributions under clause 9.1 may be

made for each calendar Quarter (or for more frequent periods as may be required) and

delivered to the Shareholders before the start of each calendar Quarter (or other

applicable period)



(b)



The first request for contributions may be made in respect of the program and budget

approved in accordance with clause 8.1(a) immediately after that program and budget is

approved.



When Called Sums are due

A Called Sum will be due and payable to the Company within 30 days of receipt of the request

under clause 9.1.



9.6



Application of Clause 9

The Company shall not issue Called Sums after the commencement of the liquidation of the

Company pursuant to clause 5.10(a)(v) or Article 26.1 of the Company Law.



9.7



Interest on Existing Shareholder Loans

Interest on the Existing Shareholder Loans shall accrue on and from the Effective Date.



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Amended and Restated Shareholders' Agreement

9.8



Conversion of Existing Shareholder Loans

(a)



At any time, the Ivanhoe Shareholders may, by providing notice to the Company and

each other Shareholder, elect to:

(i)



convert any of the Existing Shareholder Loans into Shares in accordance with

paragraph (b); and/or



(ii)



have any of the Existing Shareholder Loans treated as if they were Shareholder

Debt under clause 13.1, in which case the provisions of clauses 13.1(d) to (f)

shall apply to the Existing Shareholder Loans,



in each case with effect on and from the Conversion Date.

(b)



If the IVN Shareholders elect to convert any of the Existing Shareholder Loans into

Shares in accordance with paragraph (a)(i):

(i)



on conversion the Company shall issue that number of Shares equal to the total

amount of the Existing Shareholder Loans (including principal and all unpaid

and accrued interest) as at the Conversion Date (the Loan Conversion Amount);



(ii)



such Shares shall be issued to each Shareholder in proportion to their respective

Percentage Interests; and



(iii)



SHC's Percentage Interest of the Loan Conversion Amount shall be deemed to

be a Funded Amount and shall be added to the Outstanding Balance (and a

Lending Certificate shall be issued in respect of this deemed Funded Amount in

accordance with clause 11.1(d)).



10.



Financing arrangements



10.1



Contributions during Funding Period

The Parties agree that, during the Funding Period:

(a)



SHC has the right to elect (but is not obliged) to contribute to Called Sums in accordance

with clauses 11.1 and 13.1; and



(b)



the IVN Provider shall contribute the whole of all Called Sums (subject to SHC's right to

elect to contribute in accordance with clauses 11.1 and 13.1),



and the Ivanhoe Shareholders shall determine what method or methods of finance set out in clause

9.2 will apply in respect to those contributions (subject to the 'thin capitalisation' restrictions

contained in the Investment Agreement).

10.2



After Funding Period

(a)



At any time after the Funding Period, where the Company requests Shareholders to

contribute to a Called Sum, if SHC elects (or is deemed to have elected) not to contribute

to a Called Sum in accordance with clauses 11.1(a) or 13.1(a), then the Ivanhoe

Shareholders may elect in accordance with clause 11.1(c) or 13.1(c) (but are not obliged)

to contribute to that part of the SHC Called Sum to which SHC elects not to contribute,

in which case the Ivanhoe Shareholders shall determine which of the financing methods

described in clauses 11 and 13 shall apply and SHC and the Company must accept such

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Amended and Restated Shareholders' Agreement

contribution. For the avoidance of doubt, if SHC elects not to contribute to all or that

part of a SHC Called Sum there shall be no dilution of SHC's Percentage Interest (being

34% immediately after the issue of the Government Issue Shares to SHC). If SHC elects

not to contribute to all or part of the SHC Called Sum, the Ivanhoe Shareholders shall not

be obliged to fund the SHC Called Sum or their own Percentage Interest of a Called

Sum. The Board of Directors shall thereafter determine any alternative methods of

funding.

(b)



During and after the Funding Period, Shares in the Company must be issued to each

Shareholder:

(i)



in proportion to the Called Sums which relate to each Shareholder’s Percentage

Interest; and



(ii)



on the same terms and conditions.



(c)



For the avoidance of doubt, if SHC elects not to contribute to a Called Sum, its

Percentage Interest (being 34% immediately after the issue of the Government Issue

Shares to SHC) cannot be diluted and if, after the Funding Period, Shares are issued to

the IVN Shareholders because the Ivanhoe Shareholders have elected to fund under or in

a manner similar to clause 11 then Shares must also be issued in proportion to SHC’s

Percentage Interest on the same terms and conditions.



(d)



Nothing in this clause 10.2 restricts the rights of SHC to fund a SHC Called Sum and the

Company must accept such contribution.



10.3



Financing arrangements

The Shareholders agree not to exercise any rights of pre-emption which are inconsistent with the

common equity financing arrangements set out in clause 11.



11.



Common equity funding



11.1



Carry of SHC Called Sums to be made by way of common equity

(a)



Where the Ivanhoe Shareholders (during the Funding Period) or the Board of Directors

(after the Funding Period) determine that funding will be made by way of common

equity, SHC may elect (but is not obliged to) contribute to the whole or part of each SHC

Called Sum. SHC shall give prior written notice (no later than 5 Working Days after

receipt of the Called Sum request) to the Company and the Ivanhoe Shareholders of its

election to so contribute to the whole or part of an SHC Called Sum. If SHC does not

elect to contribute within such time period, SHC will be deemed to have elected not to

contribute to the relevant SHC Called Sum. After the Funding Period, the Ivanhoe

Shareholders shall give prior written notice (no later than 5 Working Days after receipt of

the Called Sum request) to the Company and SHC if they elect not to contribute to the

whole or any part of their own Percentage Interest of a Called Sum. If the Ivanhoe

Shareholders do not make such an election within such time period, they will be deemed

to have elected, subject to clause 10.2(a), to contribute to the whole of their Called Sum.



Page 13



Amended and Restated Shareholders' Agreement

(b)



During the Funding Period, if SHC elects (or is deemed to have elected) not to contribute

to the whole or part of a SHC Called Sum by way of common equity, the IVN Provider

must provide that part of the SHC Called Sum, to which SHC does not elect to

contribute, to the Company on behalf of SHC, in accordance with this clause 11.



(c)



After the expiry of the Funding Period, if SHC elects within the 5 Working Day period

(or is deemed to have elected) not to contribute to the whole or part of a SHC Called Sum

the IVN Provider may elect within a further 5 Working Days (but is not obliged) to

contribute by way of common equity funding that part of the SHC Called Sum, to which

SHC does not elect to contribute, to the Company on behalf of SHC, in accordance with

this clause 11.



(d)



Each amount funded by the IVN Provider in respect of which Shares are issued to SHC

shall be a Funded Amount and shall be evidenced by the issue by the Company of a

certificate to the IVN Provider (and with a copy to each Shareholder) confirming the

Funded Amount, to be referred to as a Lending Certificate.



(e)



During and after the Funding Period, Shares in the Company must be issued to each

Shareholder:

(i)



in proportion to the Called Sums which relate to each Shareholder's Percentage

Interest; and



(ii)



on the same terms and conditions,



such that SHC's Percentage Interest (being 34% immediately after the issue of the

Government Issue Shares to SHC) shall not be diluted without its consent, whether or not

SHC elects to contribute to any SHC Called Sum.

(f)



From the Completion Date, the Ivanhoe Shareholders will consult with SHC when

determining financing plans for the Company. This will include involving SHC in

presentations to potential financiers and other fundraising activities.



(g)



The Ivanhoe Provider shall only be obliged to contribute SHC Called Sums (in whole or

in part) to the Company on behalf of SHC under clause 11.1(b) for so long as SHC

remains wholly owned and Controlled by the State as contemplated by clause 16.6.



(h)



If SHC elects not to provide funding in respect of the whole or relevant part of a Called

Sum, then SHC’s Percentage Interest (being 34% immediately after the issue of the

Government Issue Shares to SHC) cannot be diluted, and if Shares are issued to the

Ivanhoe Shareholders because the Ivanhoe Provider has elected to fund under or in a

manner similar to this clause 11 then Shares must also be issued in proportion to SHC’s

Percentage Interest on the same terms and conditions.

During the Funding Period, SHC shall be entitled to make contributions to SHC Called

Sums in accordance with this clause 11 and clause 13 where the terms of such

contributions and the terms of any financing arrangements that SHC wishes to utilize do

not interfere or conflict with any Project Financing then existing or anticipated and are

no less favourable to the Company than the contributions of the IVN Providers.



Page 14



Amended and Restated Shareholders' Agreement

11.2



11.3



Funded Amounts

(a)



The Funded Amounts provided by the IVN Provider shall have interest calculated on

them at the Carry Rate in accordance with clause 11.3, and the IVN Provider (or IVN or

OTN on behalf of the IVN Provider, if the Ivanhoe Shareholders direct) has the right to

receive payments in accordance with clause 11.4 until there is no longer an Outstanding

Balance, without limiting the IVN Provider’s right to receive the full amount of the

Outstanding Balance under clauses 16.6(c) and 16.7(b), or where the Outstanding

Balance is reduced in accordance with clause 11.4(d).



(b)



The aggregate of all Funding Equity shall not exceed 60% of the Total Capital of the

Company.



Carry Rate

(a)



Interest shall be calculated on the Outstanding Balance (as defined in clause 11.3(e)(ii))

and accrued on a quarterly basis using, in respect of each Quarter the Carry Rate for that

calendar Quarter.



(b)



For the purposes of clause 11.3(a), interest will be computed on the basis of the actual

number of days elapsed and a year of 360 days. If a calendar Quarter ends on a day

which is not a Working Day, that calendar Quarter will be extended to the next Working

Day.



(c)



Immediately after each accrual of interest pursuant to clause 11.3(a) prior to the

Conversion Date, the sum of the Outstanding Balance shall be adjusted for the variation

in the US CPI over the preceding Quarter. On and from the Conversion Date, the

Outstanding Balance will not be adjusted for US CPI.



(d)



The Parties acknowledge that the Company should when and if necessary consider

funding hedging options with regards to the Carry Rate and take decisions on such

options in the best interests of all the Shareholders.



(e)



For the purposes of this Agreement:

(i)



Carry Rate for a calendar Quarter means the rate of:

(A)



on and from the Effective Date until the day prior to the Conversion Date,

the interest rate for a calendar Quarter that results in an effective annual

interest rate of 9.9%; and



(B)



from and after the Conversion Date, LIBOR plus 6.50% for the relevant

Quarter;



For the avoidance of doubt, the reference to LIBOR (for the relevant Quarter) plus

6.50% in clause 11.3(e)(i)(B) is an annual effective rate.



Page 15



Amended and Restated Shareholders' Agreement

(ii)



Outstanding Balance means, at any point in time, the aggregate of:

(A)



all Funded Amounts that have been funded by the IVN Provider up to

that point in time (including any amounts deemed to be Funded

Amounts under clause 9.8(b)(iii) or 12(a)(iii));



(B)



all interest that has accrued under clause 11.3(a) prior to that point in

time; and



(C)



all US CPI-related adjustments made to the sum of the Outstanding

Balance pursuant to clause 11.3(c) up to that point in time (if

applicable),



less all amounts repaid by SHC pursuant to clause 11.4 prior to that point in

time; and

(iii)



US CPI means the Annual Index at the end of each Quarter contained in Table

1, Consumer Price Index for all Urban Consumers (CPI-U): US City Average,

by Expenditure Category and Commodity and Service Group, series ID number

CUUR0000SAO, published by the Bureau of Labor Statistics, which forms part

of the United States Department of Labor and if the index ceases to be

published, such new, revised or substitute index as is agreed between the

Shareholders following reasonable and in good faith negotiations, and failing

agreement such new, revised or substitute index as determined by an

internationally recognised audit and accounting firm selected by the Company.



11.4



(f)



SHC and the Ivanhoe Shareholders shall together confirm the calculation of the

Outstanding Balance on an annual basis.



(g)



Every seven years following the Conversion Date the Parties will consider the

appropriateness of the Carry Rate and the rates referred to in clause 13.1(d)(ii) and in the

definition of Existing Shareholder Loans in clause 25 and these rates may be changed

with the agreement of all Parties.



Reduction of Outstanding Balance

(a)



All monies payable to SHC as Dividends in respect of the Shares held by SHC must be

paid by the Company to the IVN Provider (or to IVN or OTN on behalf of the IVN

Provider, if the Ivanhoe Shareholders direct) until such time as all of the Outstanding

Balance is repaid, in accordance with clause 15.2.



(b)



For the purposes of clause 11.4(a), SHC hereby gives an irrevocable direction to the

Company to pay all of its Dividends directly to the IVN Provider (or to IVN or OTN on

behalf of the IVN Provider, if the Ivanhoe Shareholders direct) until such time as all of

the Outstanding Balance is repaid, in accordance with clause 15.2 and this clause 11.4.

SHC grants a security over its Dividends to the IVN Provider in order to secure receipt of

the Outstanding Balance to the IVN Provider.



(c)



Any amount paid pursuant to this clause 11.4 will constitute a payment made by SHC to

the IVN Provider to reduce the Outstanding Balance and, for the avoidance of doubt, will

not be treated as a Dividend paid to, or received by, IVN or OTN.

Page 16



Amended and Restated Shareholders' Agreement



11.5



(d)



In addition to the reduction of the Outstanding Balance achieved through the

arrangement described in clauses 11.4(a) to 11.4(c) (inclusive), SHC has the right to

reduce the Outstanding Balance by making payments directly to the IVN Provider (or to

IVN or OTN on behalf of the IVN Provider, if the Ivanhoe Shareholders direct), and the

Parties will agree on the most appropriate method for the making and receipt of such

payments.



(e)



The Parties agree that no recourse will be had to the assets of SHC or the Government of

Mongolia in respect to any portion of the Outstanding Balance, other than the Dividends

of SHC in accordance with this Agreement.



No limitation or dilution

Nothing in this Agreement shall limit the Company's ability to issue preferred shares in accordance

with the Company Law of Mongolia, provided that the Company shall not issue any preferred shares

which convert to Shares and which would have the effect of diluting SHC’s Percentage Interest.



12.



Conversion of Funding Shares

(a)



With effect on and from the Conversion Date, all outstanding Funding Shares that have

been issued in accordance with clause 11.1 of the Previous Shareholders' Agreement

shall be converted into Shares in accordance with the following provisions:



(b)



(i)



on conversion the Company shall issue that number of Shares equal to the

aggregate of the par value of each Funding Share and the value of any unpaid

and accrued dividends on each such Funding Share as at the Conversion Date

(together the Conversion Amount);



(ii)



such Shares shall be issued to each Shareholder in proportion to their respective

Percentage Interests;



(iii)



34% of the Conversion Amount shall be deemed to be a Funded Amount and

shall be added to the Outstanding Balance (and a Lending Certificate shall be

issued in respect of this deemed Funded Amount in accordance with clause

11.1(d)); and



(iv)



the parties shall take all necessary steps, and sign all required documents, to

formally replace each Funding Share with the new Shares to be issued, and the

parties agree that, following such replacement, the Funding Shares shall be of

no further force and effect.



Until, and subject to, their conversion to Shares under this clause 12, notwithstanding this

Agreement, the terms of all Funding Shares will continue to be governed by and subject

to clause 11, and the other provisions, of the Previous Shareholders' Agreement.



Page 17



Amended and Restated Shareholders' Agreement

13.



Debt funding by Shareholders



13.1



Shareholder Debt

(a)



Where the Ivanhoe Shareholders (during the Funding Period) or the Board of Directors

(after the Funding Period) determine that funding will be made by way of debt provided

by the Shareholders, SHC may elect (but is not obliged) to contribute to the whole or part

of the SHC Called Sums. SHC shall give prior written notice (no later than 5 Working

Days after receipt of the Called Sum request) to the Company and the Ivanhoe

Shareholders of its election to so contribute to the whole of the SHC Called Sum. If SHC

does not elect to contribute to the whole of the SHC Called Sum within such time period,

SHC will be deemed to have elected not to contribute to the relevant SHC Called Sum.

After the Funding Period, the Ivanhoe Shareholders shall give prior written notice (no

later than 5 Working Days after receipt of the Called Sum request) to the Company and

SHC if they elect not to contribute to the whole or any part of their own Percentage

Interest of a Called Sum. If the Ivanhoe Shareholders do not make such an election

within such time period, they will be deemed to have elected, subject to clause 10.2(a), to

contribute to the whole of their Called Sum.



(b)



During the Funding Period, if SHC elects (or is deemed to have elected) not to contribute

to the whole or part of a SHC Called Sum by way of Shareholder Debt, the IVN Provider

must provide that part of the SHC Called Sum to which SHC does not elect to contribute

in accordance with this clause 13.



(c)



After the expiry of the Funding Period, if SHC elects within the 5 Working Day period

(or is deemed to have elected) not to contribute to the whole or part of a SHC Called Sum

the IVN Provider may elect within a further 5 Working Days (but is not obliged) to

contribute by way of Shareholder Debt that part of the SHC Called Sum, to which SHC

does not elect to contribute in accordance with this clause 13.



(d)



Interest shall be calculated on the aggregate of the Shareholder Debt and any accrued

interest, and accrued on a quarterly basis at the rate of:

(i)



on and from the Effective Date until the day prior to the Conversion Date, the

Quarterly US CPI Adjusted Carry Rate for that calendar Quarter; and



(ii)



from and after the Conversion Date, the rate of LIBOR plus 6.50% for that

calendar Quarter.



For the avoidance of doubt, the reference to LIBOR (for the relevant Quarter) plus

6.50% in clause 13.1(d)(ii) is an annual effective rate.

(e)



At the end of each Quarter, interest will be calculated on principal amounts advanced by

a Shareholder plus accrued interest to that point in time less all repayments made by the

Company to that Shareholder to that point in time. A separate loan agreement shall be

promptly entered into by the Company and the Shareholders to record the terms of

Shareholder Debt.



(f)



Interest will be computed on the basis of the actual number of days elapsed and a year of

360 days. If a calendar Quarter ends on a day which is not a Working Day, that calendar

Quarter will be extended to the next Working Day.

Page 18



Amended and Restated Shareholders' Agreement

13.2



Priority repayment of Shareholder Debt

In accordance with clause 15.1(d), Shareholder Debt provided under clause 13.1 must be repaid

before the Company commences paying Dividends (on common shares).



14.



Third party project financing

(a)



The Board of Directors may, from time to time, resolve to fund the projected cash

requirements of the Company by means of borrowings by the Company from

internationally recognised financial institutions (Project Financing).



(b)



Without limiting the discretion of the Board of Directors under paragraph (a), the

Shareholders agree to use their commercially reasonable endeavours to:

(i)



use Project Financing for the Company as a priority funding mechanism if

beneficial and appropriate from an overall project perspective for the OT

Project; and



(ii)



assist the Company to obtain such Project Financing as soon as practicable on

the best terms that can be reasonably obtained in the international banking

market for project finance for a project like the OT Project.



(c)



The Shareholders acknowledge that, subject to taxation requirements, there shall be no

charge or pass on of any margin or premium on the full cost of funds that are procured by

means of any third party Project Financing for the Company by any of the Shareholders

and/or IVN Providers for the purposes of the OT Project over and above the margins or

premiums imposed by such third parties providing Project Financing.



(d)



Each of the Shareholders acknowledges that it shall provide and procure all reasonable

assistance to the other and the Company in order to obtain funds as contemplated by

clause 14(a), provided that there shall be no recourse to the assets of SHC or the

Government of Mongolia as a result of any financing arrangements.



15.



Dividend distribution



15.1



Payment of Dividends

(a)



Subject to the other provisions of this clause 15 (including, without limitation, clause

15.1(d) and clause 15.2(c)) and the commitments provided under the terms of any third

party Project Financing contemplated by clause 14, if, in respect of any Financial Year of

the Company, the Company has profits available for distribution, the Board of Directors

shall declare that at least 100% of those profits must be distributed by way of cash

Dividends within 3 months after the end of that Financial Year, subject to the retention of

reasonable and proper reserves for the Company’s future cash requirements (including

potential expansions, working capital, and the maintenance of funds for capital costs and

other actual or contingent liabilities).



(b)



The profits available for distribution of Dividends referred to in clause 15.1(a) will be

based on the audited annual results of the Company and subject to prior satisfaction of

the requirements of clause 15.1(d).

Page 19



Amended and Restated Shareholders' Agreement

(c)



The Board of Directors is entitled to declare interim Dividends.



(d)



Notwithstanding any other provision of this Agreement, Dividends (on common shares)

are not payable by the Company unless and until the Company has discharged the

following obligations, which shall be discharged in the following order of priority:

(i)



third party Project Financing described in clause 14, in the priority for

repayment of such borrowings required by the third party;



(ii)



the Existing Shareholder Loan has been repaid in full by the Company;



(iii)



(ranking equally) any interest on Shareholder Debt provided under clause 13,

and all dividends on Funding Shares (unless they have been converted into

Shares in accordance with clause 12), have been paid in full by the Company;



(iv)



(ranking equally) all principal of Shareholder Debt provided under clause 13 has

been repaid in full by the Company, and the redemption of the capital of all

Funding Shares by the Company (unless they have been converted into Shares

in accordance with clause 12); and



(v)



15.2



all dividends on all preferred shares (other than Funding Shares) have been paid

in full by the Company, and all preferred shares (other than Funding Shares)

have been redeemed by the Company.



Application of Dividends payable to SHC

(a)



To the extent (if any) that the Outstanding Balance under clause 11 has not been repaid,

any Dividends payable by the Company to SHC must be applied in the following order

of priority:

(i)



first, to the repayment of the Outstanding Balance; and



(ii)



secondly, to SHC.



(b)



The payment by the Company of such amounts to the IVN Provider of the Outstanding

Balance under clause 15.2(a)(i) shall be treated as discharging the obligation of the

Company to pay that amount of Dividends to SHC.



(c)



Unless otherwise agreed by the Parties, and to ensure that Dividends are distributed

in accordance with the distribution arrangements contained in this Agreement, SHC

agrees that it will not exercise or give effect to the entitlement to mobilize its

Dividends set out in Article 21.8 of the Corporate Income Tax Law.



16.



Transfer of Shares



16.1



Consent to transfer Shares

Except as expressly provided in this Agreement (including clause 16.3), a Shareholder shall not

Dispose of all or any of its Shares (or any interest in all or any of its Shares) unless it has received

the prior written consent of each of the other Shareholders (Other Shareholders).



Page 20



Amended and Restated Shareholders' Agreement

16.2



Pre-emptive rights applicable on transfer of Shares

(a)



Subject to clauses 16.3 and 16.7, a Shareholder may transfer all or any of its Shares if the

transfer is conducted in accordance with the provisions of clauses 16.2(b) to (j)

(inclusive).



(b)



If a Transferor wishes to transfer all or any of its Shares to a third party (Disposal

Shares), it must first offer the Disposal Shares to each of the Other Shareholders.



(c)



Any offer made by a Transferor pursuant to clause 16.2(b) must be made pursuant to a

written notice (Transfer Notice). A Transfer Notice must:

(i)



specify the number of Disposal Shares and the cash price in USD for the

Disposal Shares (Transfer Price);



(ii)



contain the terms upon which the Disposal Shares are offered for sale; and



(iii)



specify the third party to whom the Transferor proposes to sell the Disposal

Shares in the event that the Other Shareholders do not accept the offer of the

Transferor (Nominated Third Party).



(d)



A Transfer Notice constitutes an unconditional offer to sell the Disposal Shares, upon the

terms set out in the Transfer Notice, which offer must remain open for acceptance by

each of the Other Shareholders until the expiry of 50 Working Days after the date of

service of the Transfer Notice on the Other Shareholders (Offer Period).



(e)



At any time during the Offer Period, any of the Other Shareholders may by notice in

writing to the Transferor (with a copy to be provided to the other Shareholders) reject or

accept in full the Disposal Shares offered in a Transfer Notice. If there is more than one

Other Shareholder, the Disposal Shares will be deemed to be offered to each of them. If

more than one accepts they will purchase (severally and not jointly) the Disposal Shares

in the proportions that their respective Percentage Interests bear to the aggregate of their

Percentage Interests (or in any other proportions as those Other Shareholders agree and

notify in writing to the Transferor).



(f)



If one or more Other Shareholders do not accept the offer made in respect of the Disposal

Shares, the remaining Other Shareholder or Other Shareholders may accept the offer in

respect of all of the Disposal Shares in the proportions that their respective Percentage

Interests bear to the aggregate of their Percentage Interests (or in any other proportions as

those Other Shareholders agree and notify to the Transferor).



(g)



If any one or more of the Other Shareholders do not accept all of the Disposal Shares

following the application of the provisions of clauses 16.2(e) and 16.2(f), by the expiry

of the Offer Period, the offer in the Transfer Notice is deemed to have been rejected.



(h)



Acceptances of offers made pursuant to clause 16.2(b) must be unconditional other than

any necessary authorisations.



(i)



If any one or more of the Other Shareholders accept all of the Disposal Shares, the

transfer of the Disposal Shares must be completed on the tenth Working Day after the

last day of the Offer Period, when the Transferor must sell and the applicable Other

Shareholder or Other Shareholders must purchase the Disposal Shares at the Transfer

Price.

Page 21



Amended and Restated Shareholders' Agreement



16.3



(j)



If acceptances are not received in respect of all of the Disposal Shares following

compliance with clauses 16.2(b) to (h) (inclusive), the Transferor may, subject to clause

16.7, at any time within 90 days after the expiry of the Offer Period transfer all but not

some of the Disposal Shares to the Nominated Third Party, at a cash price only that must

not be less than the Transfer Price and on terms no more favourable to the Nominated

Third Party than as set out in the Transfer Notice.



(k)



If the transfer of all of the Disposal Shares does not occur within 90 days after the expiry

of the Offer Period, the Transferor may not transfer the Disposal Shares without first

complying with the requirements of clauses 16.2(b) to (h) (inclusive).



Permitted transfers

(a)



Any member of the Ivanhoe Group or any member of the Rio Tinto Group that is a

Shareholder or preferred shareholder may transfer all or part of the Shares or any preferred

shares (as applicable) held by it to any other member of the Ivanhoe Group or the Rio Tinto

Group without obtaining the prior written consent of the other Shareholders or preferred

shareholders, or first complying with the requirements of clause 16.2.



(b)



SHC may transfer all or part of the Shares or any preferred shares (as applicable) held by it

to any other company wholly-owned by the State, duly incorporated under the Company

Law of Mongolia, and Controlled solely by the State, without obtaining the prior written

consent of the other Shareholders or preferred shareholders, or first complying with the

requirements of clause 16.2.



(c)



16.4



In accordance with Clause 1.9 of the Investment Agreement, SHC shall be responsible for

listing that proportion of the Government Issue Shares which represent not less than ten

percent (10%) of the Shares in the Company on the Mongolian Stock Exchange in

satisfaction of the requirements of Article 5.6 of the Minerals Law of Mongolia, and the

transfer of such Shares shall be and remain exempt from the transfer restrictions of this

clause 16. Without limiting Clause 1.9 of the Investment Agreement, the Ivanhoe

Shareholders and the Company cannot compel performance of SHC's obligations under this

clause 16.3(c).



Mortgaging Shares

A Shareholder must not create a mortgage, pledge, charge or other security interest (Pledge) in

respect of its Shares (including, to avoid doubt, the rights associated with such Shares) unless as

provided in clause 16.5.



16.5



Pledge over Shares

(a)



The Parties agree that the requirements of this clause 16.5 are not required terms of any

security or other third party Project Financing arrangements described under clause 14

(notwithstanding that establishing the requirements set out in this clause 16.5 may be

necessary or desirable in order to obtain such finance).



Page 22



Amended and Restated Shareholders' Agreement

(b)



Except as provided in clause 16.5(d), a Shareholder may create a Pledge in respect of its

Shares (a Permitted Charge) only if:

(i)



the Pledge is created in favour of an internationally recognised financial

institution providing financing as contemplated by clause 14(a) (relating to third

party Project Financing) (the Permitted Chargee);



(ii)



the Shareholder first notifies the Board of Directors in writing; and



(iii)



the following requirements are first satisfied:

(A)



The Permitted Charge must be in writing and comply with the

requirements of a Permitted Charge described in this clause 16.5.



(B)



A copy of the Permitted Charge must be given to each other

Shareholder at least 30 Working Days before it is executed and must

not be amended (before or after execution) without the prior written

consent of each other Shareholder.



(C)



(c)



The Permitted Chargee must sign and deliver to each Shareholder and

the Company a deed of covenant in a form acceptable to the other

Shareholders under which the Permitted Chargee agrees that its rights

and entitlements in connection with the Permitted Charge:

(1)



are subject to this Agreement; and



(2)



must be subordinated in priority to the rights and entitlements

of IVN, OTN and the IVN Provider to receive Dividends

otherwise payable to SHC in accordance with clauses 11.4

and 15.2.



The Permitted Charge must:

(i)



not prejudice or affect the rights and remedies under this Agreement of any

Shareholder, including the right to be repaid any sum, including the Outstanding

Balance, under this Agreement;



(ii)



expressly provide that the Permitted Chargee (or any person claiming through

the Permitted Chargee) in the exercise or enforcement of any power of sale or

other power of its security is subject to this clause 16 (including the rights of

pre-emption in clause 16.2); and



(iii)



expressly provide that the rights of the Permitted Chargee are subordinated in

priority to the rights and entitlements of IVN, OTN and the IVN Provider to

receive Dividends otherwise payable to SHC in accordance with clauses 11.4

and 15.2.



Page 23



Amended and Restated Shareholders' Agreement

(d)



16.6



Any Pledge existing at the date of the Previous Shareholders' Agreement between any

member of the Ivanhoe Group and any member of the Rio Tinto Group shall not require

the prior written consent of the other Shareholders or compliance with the requirements

of clauses 16.5(b) and 16.5(c).



SHC ownership and listing

(a)



SHC must remain:

(i)



wholly-owned by the State; and



(ii)



Controlled solely by the State,



for the life of the OT Project, except as provided in clause 16.6(b) in relation to the

listing of shares of SHC by the State.



16.7



(b)



The State may list its shares in SHC on the Mongolian Stock Exchange or any

internationally recognised stock exchange.



(c)



If SHC ceases to be wholly-owned and Controlled by the State (including as a result of

the listing of the shares in SHC) then, at the Ivanhoe Shareholders’ election and on

written notice from the Ivanhoe Shareholders to SHC, any Outstanding Balance at that

time shall immediately become due and payable in full to the IVN Provider (or to IVN or

OTN on behalf of the IVN Provider, if the Ivanhoe Shareholders direct).



Further restrictions on Disposal of Shares

A Shareholder may not Dispose of all or any of its Shares (or any interest in all or any of its Shares)

unless, prior to registration of the transfer of the Shares:

(a)



(except where the Disposal of Shares is to an existing Shareholder) the transferee enters

into a deed of accession and assumption with the Parties in a form acceptable to the

Parties agreeing to be bound by and assume the obligations of the Transferor;



(b)



in the case where SHC is the Transferor, at the IVN Provider's election (to be notified in

writing to SHC), either:

(i)



the transferee or SHC pays or procures the payment of any Outstanding Balance

in full at the time of transfer; or



(ii)



the transferee assumes the obligation to repay any Outstanding Balance or, if

SHC is not transferring all its Shares, that proportion of the Outstanding

Balance as is the same proportion as the number of Shares being transferred

bears to the total number of Shares held by the Transferor immediately before

registration of the transfer by the Company (and, for the avoidance of doubt, the

Dividends to which such transferee would otherwise be entitled shall be applied

in priority to the repayment of the Outstanding Balance or the relevant

proportion of the Outstanding Balance, as the case may be, as contemplated by

clause 15.2);



Page 24



Amended and Restated Shareholders' Agreement



16.8



(c)



subject to clause 16.7(b), in the case of any Transferor, the transferee, at the time of

transfer, pays or procures the payment to each other Shareholder and the Company of all

amounts which the Transferor is obliged to pay to each other Shareholder or the

Company (as the case may be) under the terms of this Agreement; and



(d)



the transferee obtains all necessary authorisations.



Ineffective transfer

The Company shall not register any transfer made in breach of this clause 16. Any purported

transfer so made will be void and of no effect.



16.9



Disposal of rights in this Agreement

Without the prior written consent of the other Parties, a Party must not Dispose of any of its rights

under this Agreement or attempt to do so, otherwise than in connection with a transfer of Shares in

accordance with this clause 16.



16.10



SHC option to acquire an additional 16% shareholding in the Company

(a)



SHC shall have the option (Option) to acquire an additional number of common shares in

the capital of the Company which will, after such acquisition, result in SHC holding a

further 16% of the total issued common shares in the capital of the Company (Option

Shares), provided terms are agreed between SHC and the Ivanhoe Shareholders.



(b)



SHC may only exercise the Option by written notice to the Ivanhoe Shareholders and the

Company during the period commencing on and from the date upon which the term of the

Investment Agreement is first extended in accordance with Clause 15.11 of the Investment

Agreement, and ending on the date which is one (1) calendar year after such date.



(c)



Immediately after the acquisition of the Option Shares to SHC, the respective Percentage

Interests of the Shareholders in the Company would be as follows:



(d)



(i)



SHC – 50%; and



(ii)



the Ivanhoe Shareholders – 50%.



Notwithstanding any acquisition of the Option Shares by SHC in accordance with this

clause 16, the Ivanhoe Shareholders shall retain full and unrestricted management rights

over the OT Project, and have a casting vote at all meetings of the Board of Directors of the

Company, and at all Shareholder meetings for all matters described in clauses 5.10(a)(viii)

to 5.10(a)(xvi) (inclusive), and the Ivanhoe Shareholders and SHC shall make, or shall

procure the making of, all amendments to the Shareholders' Agreement and any other

documents that the Ivanhoe Shareholders deem necessary to give effect to this clause

16.10(d).



Page 25



Amended and Restated Shareholders' Agreement

17.



Representations and warranties

(a)



18.



Each Party represents and warrants to each other Party that:

(i)



it is a corporation duly incorporated and validly existing under the laws of the

place of its incorporation (and, in the case of SHC, it is duly incorporated under

the Company Law of Mongolia and is and will continue to be subject to the

Company Law of Mongolia); and



(ii)



it has the power to enter into and perform its obligations under this Agreement and

to carry on its business as now conducted or contemplated.



(b)



Each Party must comply with the obligations of confidentiality specified by the Board of

Directors from time to time in respect of Proprietary Information of the Company, the

Shareholders (and their respective Related Corporations) and the Management Team. In

specifying such confidentiality obligations, the Board of Directors will take into

consideration the disclosure requirements under Mongolian law, financial reporting

requirements and the protection of commercially sensitive information. If required by

the Board of Directors, each Shareholder shall procure that its appointed Directors and

officers, employees, contractors or agents sign undertakings with respect to Proprietary

Information. Each Shareholder shall be responsible for the misuse or unauthorised

disclosure of Proprietary Information by its appointed Directors, or any of the

Shareholder’s officers, employees, contractors or agents.



(c)



The Ivanhoe Shareholders acknowledge that as SHC is representing the Mongolian

Government, it may disclose to the Mongolian Government the Proprietary Information

and such other information that is necessary to perform its obligations.



Covenants of SHC

In accordance with Clause 2.27 of the Investment Agreement, SHC shall pay any taxes imposed by

the State upon or payable by the Company or by any Related Corporation of either the Ivanhoe

Group or the Rio Tinto Group that may be or become a holder of either common or preferred shares

of the Company as may result from any of the following transactions:

(a)



the transfer or issue of the Government Issue Shares by the Company to SHC;



(b)



the provision of funds or loans to SHC under clause 11 of this Agreement (or any similar

arrangements), to fund SHC’s investment in the Company, including all repayments of

principal and interest, including stamp duties and transaction taxes;



(c)



the provision of funds or loans by a member of the Ivanhoe Group or a member of the Rio

Tinto Group to the Company on behalf of or attributable to SHC, under clause 13 of this

Agreement (or any similar arrangements), in order to fund investment by SHC in the

Company, including all repayments of principal and interest;



Page 26



Amended and Restated Shareholders' Agreement

(d)



the transfer of any tenement of the Company referred to in clause 20, or the transfer of

licences or rights to the Company in accordance with Clause 15.7.8 of the Investment

Agreement; and



(e)



dividends paid by the Company in respect of the Shares held by SHC from time to time (or

any successor).



19.



Operation of Agreement



19.1



Shareholders' Agreement to override Charter

If there is any inconsistency between the provisions of this Agreement and the provisions of the

Company’s Charter, then the provisions of this Agreement prevail to the extent of the inconsistency.



19.2



Agreement provision deemed to be in Charter

If it is necessary to amend or include a provision in the Charter to ensure that a provision of this

Agreement is effective in accordance with its terms, then the relevant provision of this Agreement

shall be deemed to form part of the Charter and, if required, the Shareholders shall approve by

affirmative vote the necessary amendments to be made to the Charter.



20.



Transfer of non-OT Project tenements

(a)



The tenement holding of the Company will be transferred (to the extent this has not already

been done prior to the date of the Previous Shareholders' Agreement) such that all

tenements retained and held by the Company will be those that are connected to the OT

Project. Accordingly, following the restructure, the Company will hold the following:

(i)



mining license 6709A;



(ii)



mining licenses 6708A and 6710A; and



(iii)



the contractual rights of the Company to earn an interest in exploration and mining

licenses adjacent to or surrounding mining license 6709A.



(b)



The Company intends to transfer all other licenses, leases, permits or other tenements and

authorities (and related assets) that are not related to the OT Project to another Mongolian

entity nominated by the Ivanhoe Shareholders. Accordingly, such tenements, rights and

related assets will no longer be held by the Company.



(c)



The transfers and transactions under this clause 20 shall be completed within 45 Working

Days of the receipt of all of the Government approvals and authorisations required for the

completion of the transfers and transactions under this clause 20.



Page 27



Amended and Restated Shareholders' Agreement

21.



Mutual indemnity

(a)



In the event of a breach of a material obligation of this Agreement, the Shareholder in

breach shall indemnify the other Shareholder(s) and the Company for the direct damages

and loss suffered by the other Shareholder(s) and the Company, including all costs,

expenses, interest and legal fees, experts’ fees and other disbursements incurred.



(b)



Indemnification shall be paid within sixty (60) days of the date of occurrence of the

damage or loss. The indemnification shall be paid in USD.



22.



Duration and termination



22.1



Former Shareholder not bound

Subject to clause 22.3, this Agreement ceases to apply to a Shareholder which has transferred all of

its Shares as permitted by this Agreement.



22.2



Term

This Agreement continues in full force and effect until the conclusion of the liquidation of the

Company or its earlier termination by written agreement between the Parties.



22.3



Termination not to affect certain provisions

The termination of this Agreement however caused and the ceasing by any Shareholder to hold any

Shares:

(a)



will be without prejudice to any obligation of the Parties which has accrued prior to that

termination or cessation and which remains unsatisfied; and



(b)



will not affect any provision of this Agreement which is expressed to come into effect on,

or to continue in effect after, that termination or cessation.



23.



Dispute resolution



23.1



Negotiation of dispute

Any disputes between the Parties arising out of or in connection with this Agreement shall be settled

by the Parties first attempting in good faith to negotiate a resolution and if a negotiated resolution to

the dispute is not agreed to within 60 (sixty) Working Days of the date of a Party's request in writing

for such negotiation, or such other time period as may be agreed, then the dispute shall be settled in

accordance with clause 23.2.



23.2



Arbitration

If a dispute is not settled by negotiation in accordance with clause 23.1, it shall be resolved by

binding arbitration in accordance with the procedures under the Arbitration Rules of the United

Nations Commission on International Trade Law (the UNCITRAL Rules) as in force at the time of

the dispute. Accordingly, the following shall apply:

(a)



the number of arbitrators shall be 3 (three);

Page 28



Amended and Restated Shareholders' Agreement



23.3



(b)



the 3 (three) arbitrators shall be appointed in accordance with rules 7 and 8 of the

UNCITRAL Rules;



(c)



the language of the arbitration shall be English;



(d)



the arbitrators shall apply the laws and regulations of Mongolia to the interpretation of

this Agreement;



(e)



the place of arbitration shall be in London, United Kingdom; and



(f)



the arbitral proceedings shall be administered under the UNCITRAL Rules by the

London Court of International Arbitration.



Execution and enforcement of arbitral award

The arbitral award shall be final and binding on the Parties, and judgment on the award may be

entered by any court having competent jurisdiction, provided that an arbitral award shall first be

presented in an appropriate court of Mongolia for execution and enforcement. If such execution and

enforcement has not occurred within 30 (thirty) days of presentation, the award may be presented in

any other court having competent jurisdiction. The Parties hereby commit to fulfil the execution and

enforcement of the arbitral award and shall not raise any defence to its execution and enforcement.



23.4



Continued application of clause

The provisions of this clause 23 shall continue to apply to any dispute that arises during the term of

this Agreement or any dispute that occurs after the expiry or earlier termination of this Agreement in

regard to activities arising out of or in connection with this Agreement.



24.



Miscellaneous



24.1



Notices

Any notice, demand, consent or other communication (a Notice) given or made under this

Agreement:

(a)



must be in writing and signed by a person duly authorised by the sender;



(b)



for Notices delivered within Mongolia, must be delivered to the intended recipient by

hand, and for Notices delivered outside Mongolia, must be delivered by hand or by any

recognized express courier service, to the address below or the address last notified by

the intended recipient to the sender:

(i)



to SHC:



Erdenes MGL (SHC) Limited

Jigjidjav street 6,

1 khoroo, Chingiltei District

Ulaanbaatar-15172, Mongolia

Attention: Executive Director

Fax No: +976 70110725



Page 29



Amended and Restated Shareholders' Agreement



(ii)



to the Ivanhoe

Shareholders:



to IVN:

Ivanhoe Oyu Tolgoi (BVI) Limited

9 Columbus Centre Building

Road Town

Tortola

British Virgin Islands

Attention: Corporate Secretary

to OTN:

Oyu Tolgoi Netherlands B.V.

Prims Bernhardplein 200

1097 JB

Amsterdam

The Netherlands

Attention: Corporate Secretary



with a copy to IVN / OTN (as applicable) (which shall

not constitute notice):

c/o Oyu Tolgoi LLC

12th Floor, Monnis Tower

Chinggis Avenue 15

Sukhbaatar District

Ulaanbaatar 14240

MONGOLIA

Attention: Managing Director

Fax No: +976 1133 1890

with a copy to (which shall not constitute notice):

Ivanhoe Mines Ltd

999 Canada Place

Suite 654

Vancouver

British Columbia V6C3E1

Canada

Attention: Corporate Secretary

Fax No: +1 604-682-2060

and

with a copy to (which shall not constitute notice):

Rio Tinto International Holdings Limited:

2 Eastbourne Terrace

Paddington

London W26LG

United Kingdom

Attention: Company Secretary

Fax No: +44 20 7781 1800

Page 30



Amended and Restated Shareholders' Agreement



(iii)



to the Company:



Oyu Tolgoi LLC

12th Floor, Monnis Tower

Chinggis Avenue 15

Sukhbaatar District

Ulaanbaatar 14240

MONGOLIA

Attention: Managing Director

Fax No: +976 1133 1890



(c)



will be taken to be duly given or made:

(i)



in the case of delivery in by hand, when delivered; and



(ii)



in the case of delivery by recognized express courier service, two Working Days

after the date of despatch (if despatched to an address in the same country) or seven

Working Days after the date of despatch (where despatch to an address in another

country),



but if the result is that a Notice would be taken to be given or made on a day that is not a

Working Day in the place to which the Notice is sent or is later than 4pm (local time) it will

be taken to have been duly given or made at the start of business on the next Working Day

in that place; and

(d)

24.2



must be in English and Mongolian.



Civil Code application

Articles 5.1, 5.2 and 5.3 of the Civil Code apply to this Agreement.



24.3



Compliance with laws

Each Shareholder and its Related Corporations are subject to the anti-bribery/corruption laws of the

jurisdictions in which the Shareholder or its Related Corporations (as applicable) are organized,

including Mongolia, and the Shareholder and its Related Corporations shall conduct their activities

in Mongolia in accordance with their obligations under such laws.



24.4



Further assurances

The Parties shall co-operate in compiling and delivering all documents necessary or convenient to

carry out the provisions of this Agreement.



24.5



Entire agreement

The provisions of this Agreement contain the entire agreement between the Parties with respect to

the subject matter of this Agreement.



24.6



Amendment

This Agreement may be amended only by another agreement executed by all the Parties.



Page 31



Amended and Restated Shareholders' Agreement

24.7



Governing law

This Agreement shall be governed by and interpreted in accordance with the laws of Mongolia and

the international treaties to which Mongolia is a party.



24.8



Language

This Agreement will be provided in the Mongolian and English languages each in six (6) original

copies, with each Party retaining one copy in each language. The Parties agree that the Mongolian

and English language versions will be treated equally except that, in the event of any discrepancies

between the two language versions, the English version shall prevail.



Page 32



Amended and Restated Shareholders' Agreement

25.



Definitions



Capital Costs means all costs, expenses and charges that are recognised as capital costs in accordance with

internationally generally accepted accounting principles in relation to the OT Project and Core Operations.

Carry Rate means the carry rate defined in clause 11.3(e)(i).

Commencement of Production has the meaning given to that term in Chapter 16 of the Investment

Agreement.

Completion Date means the date which is 21 Working Days after the Effective Date, or such other date after

the Effective Date as may be agreed between the Parties.

Contract Area has the meaning given to that term in Chapter 16 of the Investment Agreement.

Control means, with respect to a body corporate, the right to, directly or indirectly, exercise a majority of the

votes which may be cast at a general meeting of the shareholders of the body corporate or the right to elect or

appoint, directly or indirectly, a majority of the directors of the body corporate and Control used as a noun

means an interest of any kind which gives the holder the ability to exercise any of the foregoing powers (and

Controlled has a corresponding meaning).

Core Operations has the meaning given to that term in Chapter 16 of the Investment Agreement.

Conversion Date means 31 January 2011.

Director means a person appointed or elected to the office of director of the Company in accordance with the

Charter and in accordance with clause 5.3.

Disposal Shares means the disposal shares defined in clause 16.2(b).

Dispose in relation to any property means to sell, transfer, assign, create a Pledge over, declare oneself a

trustee of or part with the benefit of or otherwise dispose of that property (or any interest in it or any part of

it) or to attempt to do so.

Dividend includes a cash or non-cash distribution that is declared payable by the Board of Directors in

respect to Shares out of the operating profit after tax of the Company (but does not include a dividend on

preferred shares or Funding Shares).

Effective Date has the meaning given to that term in Chapter 16 of the Investment Agreement, being 31

March 2010.

Existing Shareholder Loans means all funds advanced to the Company up to the Effective Date (the

quantum having been determined in accordance with Clause 15.7.5 of the Investment Agreement) by the

Ivanhoe Group or the Rio Tinto Group in relation to the OT Project and Core Operations (irrespective of the

terms on which those funds were advanced and whether expended by the Company as Operational Costs or

Capital Costs), including interest on such amounts calculated, subject to clause 9.8:

(a)



on and from the Effective Date, at an effective annual rate of 9.9% adjusted, on a quarterly basis, by

the percentage of the variation in the US CPI over the preceding Quarter; and



(b)



from and after the Conversion Date, at the rate of LIBOR (for the relevant Quarter) plus 6.5% (being

an effective annual rate).



Financial Year means 1 January to 31 December.

Funded Amount has the meaning given in clause 11.1(d).

Page 33



Amended and Restated Shareholders' Agreement

Funding Equity means, subject to the Project Financing unconditionally being made available to the

Company, common equity issued from 1 January 2012 to the end of the Funding Period.

Funding Period means the period commencing on the Completion Date and ending three years after the

Commencement of Production.

Funding Shares has the meaning given in the Previous Shareholders' Agreement.

Government Issue Shares means the number of Shares issued by the Company to SHC as at the Completion

Date which will, after such issue, result in SHC holding 34% of the Shares in the Company.

Investment Agreement means the Investment Agreement dated 6 October 2009, in relation to the OT Project,

entered into between the Government of Mongolia, the Company, Ivanhoe Mines Ltd and Rio Tinto

International Holdings Limited pursuant to Article 29 of the Minerals Law of Mongolia.

Ivanhoe Group means Ivanhoe Mines Ltd (incorporated in Yukon, Canada) and any entity Controlled by

Ivanhoe Mines Ltd.

Ivanhoe Shareholders means IVN and OTN.

IVN Provider means IVN, OTN or their nominated representative(s) including any Related Corporation of

IVN or OTN.

Loan Conversion Amount has the meaning given in clause 9.8(b)(i).

Lending Certificate has the meaning given in clause 11.1(d).

LIBOR means for the relevant currency (other than euro) the three-month British Bankers Association

Interest Settlement Rate published at or about 11.00am (London time) on the second Business Day before the

commencement of an interest period of any Funded Amounts, any Shareholder Debt or of the Existing

Shareholder Loan, such rate to be accessed through the appropriate page of the Reuters screen (or if this

ceases to be available then another page or service displaying the appropriate rate selected in good faith by

the party providing the relevant Funded Amount, Shareholder Debt or Existing Shareholder Loan (Screen

Rate). If no Screen Rate is available for the currency or the period there shall be taken instead:

(a)



the arithmetic mean of the rates found by interpolating on a time-weighted basis the fixing rates

quoted for the period of three months, being shorter, which is closest to the three month period and

the period, being longer, which is closest to the three month period, rounded, if necessary, to the

nearest fifth decimal place; and



(b)



if there is no rate quoted for a period which is shorter or longer than the three month period, the rates

(rounded upwards to five decimal places) as supplied to the party providing the relevant Funded

Amount, Shareholder Debt or Existing Shareholder Loan at their request quoted by a prime bank or

banks in the London interbank market at or about 11.00am (London time) on the second Business

Day before the commencement of the interest period.



Management Services Payment has the meaning given to that term in Chapter 16 of the Investment

Agreement.

Management Team means the management team defined in clause 7.2(a).

Nominated Third Party means the nominated third party defined in clause 16.2(c)(iii).

Notice means the notice defined in clause 24.1.

Offer Period means the offer period defined in clause 16.2(d).

Page 34



Amended and Restated Shareholders' Agreement

Operating Costs means all costs, expenses and charges incurred by or on behalf of the Management Team or

the Company in relation to the OT Project and Core Operations (other than Capital Costs).

Option means the option defined in clause 16.10(a).

Option Shares means the option shares defined in clause 16.10(a).

Other Shareholders means the other shareholders defined in clause 16.1.

OT Project has the meaning given to that term in Chapter 16 of the Investment Agreement.

Outstanding Balance means the outstanding balance defined in clause 11.3(e)(ii).

Overwhelming Majority means two thirds (⅔) or more.

Party means each of SHC, IVN, OTN, the Company and their successors and assigns as permitted in

accordance with this Agreement or the Investment Agreement.

Pledge means the pledge defined in clause 16.4.

Percentage Interest means, in relation to a Shareholder, that Shareholder's percentage interest of Shares it

holds directly in the Company (and immediately after the issue of the Government Issue Shares to SHC, the

Percentage Interest of SHC will be 34%).

Permitted Charge means the permitted charge defined in clause 16.5(b).

Permitted Chargee means the permitted chargee defined in clause 16.5(b)(i).

Previous Shareholders' Agreement has the meaning given in the Recital.

Project Financing means the third party project financing defined in clause 14(a).

Proprietary Information means that information of a Shareholder or its Related Corporations, the Company

or the Management Team which is disclosed to another Party, which is confidential in nature and not in the

public domain, including, without limitation, information relating to technology, processes, products,

specifications, inventions, trade secrets, know-how and other information of a commercially sensitive nature.

Quarter means a period of three consecutive calendar months starting on one of 1 January, 1 April, 1 July or

1 October.

Quarterly US CPI Adjusted Carry Rate means the quarterly rate that results in an effective annual rate of

9.9% and which is then adjusted, on a quarterly basis, by the percentage of the variation in the US CPI over

the preceding Quarter.

Related Corporation means:

(a)



in relation to any member of the Ivanhoe Group – any other member of the Ivanhoe Group and any

member of the Rio Tinto Group;



(b)



in relation to any member of the Rio Tinto Group – any other member of the Rio Tinto Group and

any member of the Ivanhoe Group; and



(c)



in relation to SHC – any other corporation that is wholly-owned and Controlled solely by the State.



Relevant Transaction means any transaction between the Company (on the one hand) and any Shareholder

or Related Corporation of any Shareholder (on the other hand) where the total consideration payable under

the contract documenting the transaction exceeds one million five-hundred thousand USD (USD1.5 million)

(and, for the avoidance of doubt, the Relevant Transaction provisions in clause 6.2 do not apply to a contract

for the engagement of the Management Team as described in clause 7.2(a)).

Page 35



Amended and Restated Shareholders' Agreement

Resolution means Resolution Number 57 of the State Great Khural dated 16 July 2009.

Rio Tinto Group means Rio Tinto plc (incorporated in England) and Rio Tinto Limited (incorporated in

Australia), and any entity Controlled by Rio Tinto plc and/or Rio Tinto Limited.

Share means a common share in the capital of the Company.

Shareholder means each of SHC, IVN and OTN, and each other Party who holds Shares.

Shareholder Debt means, at any time, the aggregate principal amount outstanding at the time of all sums

advanced to the Company by or on behalf of Shareholders on or after the Effective Date, including as

contemplated by clause 13, and interest on such sums.

SHC Called Sum means SHC's Percentage Interest of a Called Sum.

State means Mongolia.

Total Capital means the aggregate funding requirements of the Company (historic and future) until the end of

the Funding Period which include, without limitation, funding provided or to be provided by common equity,

preferred shares, Shareholder Debt, debt, funds made available from any Project Financing and from

operational cash flows of the Company.

Transfer Notice means the transfer notice defined in clause 16.2(c).

Transfer Price means the transfer price defined in clause 16.2(c)(i).

Transferor means a Shareholder which proposes to transfer all or some of its Shares in accordance with this

Agreement and refers to the Shareholder both before and after registration of the relevant transfer of Shares.

US CPI means US CPI defined in clause 11.3(e)(iii).

USD and $ means the lawful currency of the United States of America.

Working Day has the meaning given to that term in Chapter 16 of the Investment Agreement.



Page 36



IN WITNESS WHEREOF, this Agreement is executed and signed on 8 June 2011.



Signed for and on behalf of Erdenes MGL LLC by:



......................................................

Enebish Baasangombo, Executive Director

8 June 2011



Signed for and on behalf of Ivanhoe Oyu Tolgoi (BVI) Ltd by:



......................................................

John Fognani, Executive VP, Legal and General Counsel

8 June 2011



Signed for and on behalf of Oyu Tolgoi Netherlands B.V. by:



......................................................

Sam Riggall

Executive Vice President - Business Development



Signed for and on behalf of Oyu Tolgoi LLC by:



......................................................

Cameron McRae

President and Chief Executive Officer