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EXHIBIT 2.02
GRANGES INC.
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MONTREAL TRUST COMPANY OF CANADA
_____________________________
SPECIAL WARRANT INDENTURE
Providing for the Issue of
2,047,938 Special Warrants
_____________________________
June 7, 1996
XXXXXX XXXXX
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TABLE OF CONTENTS
Page
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ARTICLE ONE
Interpretation . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Words Importing the Singular and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.3 Interpretation Not Affected by Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.4 Day Not a Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.5 Time of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.6 Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.7 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.8 English Language . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.9 Meaning of "outstanding" for Certain Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE TWO
Issue of Special Warrants . . . . . . . . . . . . . . . . . . . . . 7
2.1 Creation and Issue of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 Special Warrant Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.3 Issue in Substitution for Lost Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Special Warrantholder not a Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.5 Special Warrants to Rank Pari Passu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.6 Signing of Special Warrant Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Certification by the Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE THREE
Exchange and Ownership of Special Warrants . . . . . . . . . . . . . . . . . 9
3.1 Exchange of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.2 Registration of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Special Warrants Not Transferable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE FOUR
Exercise of Special Warrants . . . . . . . . . . . . . . . . . . . . . 11
4.1 Exercise During Exercise Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Notice of Final Receipt Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Notice of Exercise Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Method of Exercise of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.5 Effect of Exercise of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Partial Exercise of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 No Fractional Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.8 Expiration of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.9 Deemed Exercise of Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.10 Accounting and Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.11 Cancellation of Surrendered Special Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.12 Legend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE FIVE
Rights and Covenants . . . . . . . . . . . . . . . . . . . . . . . 14
5.1 General Covenants of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Trustee's Remuneration and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Performance of Covenants by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Rescission Right . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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ARTICLE SIX
Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.1 Suits by Special Warrantholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.2 Immunity of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.3 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE SEVEN
Powers of the Special Warrantholder . . . . . . . . . . . . . . . . . . . 17
7.1 Powers Exercisable by the Special Warrantholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.2 Powers Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.3 Record of Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.4 Binding Effect of Notices upon Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE EIGHT
Supplemental Indentures and Successor Companies . . . . . . . . . . . . . . . . 19
8.1 Provision for Supplemental
Indentures for Certain Purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.2 Successor Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE NINE
Concerning the Trustee . . . . . . . . . . . . . . . . . . . . . . 20
9.1 Trust Indenture Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.2 Rights and Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.3 Evidence, Experts and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.4 Securities, Documents and Monies Held by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.5 Action by Trustee to Protect Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.6 Trustee not Required to Give Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.7 Protection of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
9.8 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
9.9 Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.10 Acceptance of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.11 Trustee not to be Appointed Receiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.12 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE TEN
General . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.1 Notice to Company and Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
10.2 Notice to Special Warrantholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
10.3 Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 Sole Benefit of Parties and Special Warrantholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.5 Discretion of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.6 Counterparts and Formal Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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THIS SPECIAL WARRANT INDENTURE is dated as of June 7, 1996,
BETWEEN:
GRANGES INC., a company incorporated under the laws of the
Province of British Columbia, having its head office at Xxxxx
0000, 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx, X.X.X., 00000
(the "Company")
AND:
MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated
under the laws of Canada, having an office at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx, Xxxxxx, X0X 0X0
(the "Trustee").
WHEREAS:
A. The Company proposes to create and issue 2,047,938 Special
Warrants exercisable by the Special Warrantholder on the terms hereinafter set
forth for the acquisition of Class A Common Share Purchase Warrants and Class B
Common Share Purchase Warrants which are exercisable for the acquisition of
common shares in the capital of the Company;
B. The Company is duly authorized to create and issue the Special
Warrants to be issued as herein provided;
C. All things necessary have been done and performed to make the
Special Warrants, when certified by the Trustee and issued and delivered as in
this Indenture provided, legal, valid and binding upon the Company with the
benefits of and subject to the terms of this Indenture;
D. The Trustee has agreed to enter into this Indenture and to
hold all rights, interests and benefits contained herein for and on behalf of
the Special Warrantholder pursuant to this Indenture;
NOW THEREFORE THIS INDENTURE WITNESSES that in consideration
of the premises and the covenants of the parties, the Company hereby appoints
the Trustee as trustee for the Special Warrantholder, to hold all rights,
interests and benefits contained herein for and on behalf of the Special
Warrantholder and it is hereby agreed and declared as follows:
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ARTICLE ONE
Interpretation
D.1 Definitions
In this Indenture and in the recitals and schedules hereto,
unless there is something in the subject matter or context inconsistent
therewith, the following phrases and words shall have the following meanings:
(a) "Applicable Legislation" means the provisions of any statute
of Canada or a province thereof, and the regulations under any
such statute, relating to trust indentures or the rights,
duties or obligations of corporations and trustees under trust
indentures as are from time to time in force and applicable to
this Indenture;
(b) "A Warrants" means the non-transferable Class "A" common share
purchase warrants authorized to be created by the Company and
issued and certified pursuant to the Warrant Indenture and
entitling the holder thereof, subject to adjustment in
accordance with the terms of the Warrant Indenture, to receive
one Share on the Class A Warrant Exercise Date (as defined in
the Warrant Indenture) in partial consideration for the
purchase by the Company from L.B. Mining Co. of all of the
issued and outstanding stock in the Venezuelan Subsidiaries
(as defined in the Option Agreement);
(c) "B Warrants" means the non-transferable Class "B" common share
purchase warrants authorized to be created by the Company and
issued and certified pursuant to the Warrant Indenture and
entitling the holder thereof at its election, subject to
adjustment in accordance with the terms of the Warrant
Indenture, to acquire at any time during the Class B Warrant
Exercise Period (as defined in the Warrant Indenture) one
Share in partial payment by the Company to L.B. Mining Co. of
the Excess Reserves Payment (as defined in the Warrant
Indenture) in accordance with the Purchase Agreement;
(d) "board" means the Board of Directors of the Company;
(e) "business day" means a day that is not a Saturday, Sunday, or
civic or statutory holiday in the City of Vancouver, British
Columbia;
(f) "Company" means Granges Inc. and its lawful successors from
time to time as provided for in section 8.2;
(g) "Company's auditors" means the firm of chartered accountants
duly appointed as auditors of the Company from time to time;
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(h) "counsel" means a barrister or solicitor (who may be an
employee of the Company) or a firm of barristers and
solicitors (who may be counsel for the Company) in both cases
acceptable to the Trustee;
(i) "director" means a director of the Company for the time being,
and reference without more to action by the directors means
action by the directors of the Company as a board or, whenever
duly empowered, action by an executive committee of the board,
in each case by resolution duly passed;
(j) "Exchange Right" means the right to acquire Warrants upon due
exercise of the rights attached to the Special Warrants as
herein provided;
(k) "Exercise Date" with respect to any Special Warrant means the
earlier of:
(i) the date on which the Special
Warrant Certificate evidencing such
Special Warrant is duly surrendered
in accordance with the provisions of
section 4.4; and
(ii) the date of deemed exercise of the
Special Warrants pursuant to section
4.9;
(l) "Exercise Period" means the period commencing on the date
hereof and ending at 4:30 p.m. (local time) on the fifth
business day after the earlier of:
(i) the Final Receipt Date; and
(ii) June 7, 1997, or such later date as
the Company and the Special
Warrantholder may agree to in
writing;
(m) "Final Prospectus" means the final version of the prospectus
to be filed with each of the Securities Commissions relating
to the distribution of the Warrants issuable to the holders of
the Special Warrants upon exercise of the Special Warrants and
includes any amendments or supplements thereto;
(n) "Final Receipt Date" means the day on which a receipt is
issued for the Final Prospectus by the last of the Securities
Commissions to do so under the applicable Securities Laws of
the Provinces;
(o) "Option Agreement" means the exploration and purchase option
agreement dated as of June 7, 1996 between L.B. Mining Co. and
the Company;
(p) "person" means an individual, a corporation, a partnership, a
trust or any unincorporated organization, and words importing
persons have a similar meaning;
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(q) "Provinces" means the provinces of British Columbia and
Ontario;
(r) "Purchase Agreement" means the stock purchase agreement to be
entered into between L.B. Mining Co. and the Company in
accordance with, and in the form attached as Exhibit D to, the
Option Agreement;
(s) "Registrar" means a registrar, from time to time, of the
Special Warrants appointed pursuant to subsection 3.2(1);
(t) "Securities Commissions" means, collectively, the securities
commission or other securities regulatory authority under the
applicable Securities Laws of each of the Provinces;
(u) "Securities Laws" means, collectively, the applicable
securities laws of each of the Provinces and the respective
regulations and rules made and forms prescribed thereunder
together with all applicable published policy statements,
notices, blanket orders and rulings of the Securities
Commissions;
(v) "Shares" means fully paid and non-assessable common shares
without par value in the capital of the Company;
(w) "shareholder" means an owner of record of one or more Shares
or shares of any other class or series of the Company;
(x) "Special Warrantholder" or "holder" means L.B. Mining Co.;
(y) "Special Warrants" means the special warrants authorized to be
created by the Company under section 2.1 and issued and
certified under this Indenture entitling the Special
Warrantholder to acquire Warrants and evidenced by one or more
Special Warrant Certificates;
(z) "Special Warrant Certificate" means a certificate
substantially in the form attached as Schedule "A" hereto, or
such other form as may be approved under subsection 2.3(1),
evidencing Special Warrants and registered in the name of the
Special Warrantholder;
(aa) "Special Warrant Consideration" means the grant to the Company
of the exclusive right and option to purchase from L.B. Mining
Co., under the terms of the Option Agreement, all of the
issued and outstanding stock in the Venezuelan Subsidiaries
(as defined in the Option Agreement), which grant is
consideration for the
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issuance and delivery of the Special Warrants by the Company
to L.B. Mining Co. and for certain payments by the Company to
L.B. Mining Co. as set forth in the Option Agreement;
(bb) "subsidiary of the Company" means a corporation, more than 50%
of the outstanding voting shares of which are owned, directly
or indirectly, other than by way of security only, by the
Company or by one or more subsidiaries of the Company; and, as
used in this definition, "voting shares" means shares of a
class or classes ordinarily entitled to vote for the election
of a majority of the directors of a corporation irrespective
of whether or not shares of any other class or classes shall
have or might have the right to vote for directors by reason
of the happening of any contingency;
(cc) "this Special Warrant Indenture", "this Indenture", "herein"
"hereby" and similar expressions mean or refer to this Special
Warrant Indenture and any indenture, deed or instrument
supplemental or ancillary hereto; and the expressions
"Article", "section", "subsection", "paragraph" or "clause"
followed by a number or letter mean and refer to the specified
Article, section, subsection, paragraph or clause of this
Indenture;
(dd) "trading day" with respect to a stock exchange means a day on
which Shares may be traded through the facilities of such
stock exchange;
(ee) "Transfer Agent" means the transfer agent for the time being
of the Shares;
(ff) "Trustee" means Montreal Trust Company of Canada, or any
lawful successor thereto in the trusts hereby created
including through the operation of section 9.8;
(gg) "Warrants" means the "A Warrants" and the "B Warrants";
(hh) "Warrantholder" means L.B. Mining Co.;
(ii) "Warrant Indenture" means the warrant indenture dated the date
hereof between the Company and the Trustee, pursuant to which
the Warrants will be created and issued, substantially in the
form attached as Schedule "B" hereto;
(jj) "written order of the Company", "written request of the
Company", "written consent of the Company" and "certificate of
the Company" mean respectively a written order, request,
consent and certificate signed in the name of the Company by
any one director or officer and may consist of one or more
instruments so executed.
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D.2 Words Importing the Singular and Gender
Words importing the singular include the plural and vice versa
and words importing a particular gender include all genders.
D.3 Interpretation Not Affected by Headings
The division of this Indenture into Articles, sections,
subsections and paragraphs, the provision of a table of contents and the
insertion of headings are for convenience of reference only and shall not
affect the construction or interpretation of this Indenture.
D.4 Day Not a Business Day
In the event that any day on which the Exercise Period expires
or on or before which any action is required to be taken hereunder is not a
business day, then the Exercise Period shall expire on or the action shall be
required to be taken on the next succeeding day that is a business day.
D.5 Time of the Essence
Time shall be of the essence in all respects in this
Indenture, the Special Warrants and the Special Warrant Certificates.
D.6 Currency
Except as otherwise stated, all dollar amounts herein are
expressed in Canadian dollars.
D.7 Applicable Law
This Indenture, the Special Warrants and the Special Warrant
Certificates shall be governed by, construed and enforced in accordance with
the laws of the Province of British Columbia and shall be treated in all
respects as British Columbia contracts.
D.8 English Language
The parties hereby confirm that they accept this Indenture as
well as notices and certificates relating directly or indirectly to the subject
matter hereof as drawn in the English language.
Les parties confirment par les presentes qu'elles acceptent la
presente convention ainsi que xxx xxxx et certificats se rapportant directement
ou indirectement a l'objet des presentes tels que rediges en langue anglaise.
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D.9 Meaning of "outstanding" for Certain Purposes
Except as provided in sections 4.8 and 4.9, every Special
Warrant Certificate certified and delivered by the Trustee hereunder shall be
deemed to be outstanding until it has been surrendered to the Trustee pursuant
to this Indenture, provided however that:
(a) a Special Warrant that has been partially exercised shall be
deemed to be outstanding only to the extent of the unexercised
part of the Special Warrants; and
(b) where a Special Warrant Certificate has been issued in
substitution for a Special Warrant Certificate that has been
lost, stolen or destroyed, only the latest Special Warrant
Certificate issued shall be counted for the purpose of
determining the Special Warrants outstanding.
ARTICLE TWO
Issue of Special Warrants
D.10 Creation and Issue of Special Warrants
A total of 2,047,938 Special Warrants, each entitling the
holder thereof to acquire from the Company on exercise thereof, subject to the
conditions in Article Four, one A Warrant and 1.2349792 B Warrants, are hereby
authorized to be created and issued by the Company and the Special Warrant
Certificate shall be executed by the Company and certified by or on behalf of
the Trustee and delivered by the Trustee to the Special Warrantholder.
D.11 Special Warrant Certificate
.1 Special Warrants shall be issued in registered form only and
shall be evidenced only by a Special Warrant Certificate, which shall be
substantially in the form attached as Schedule A hereto, with such additions,
variations or omissions as may be permitted by the provisions of this Indenture
or may from time to time be agreed upon between the Company and the Trustee,
shall be dated as of the date hereof (regardless of their actual dates of
issue), shall bear such legends and distinguishing letters and numbers as the
Company shall, with the approval of the Trustee, prescribe, shall be issuable
in any denomination excluding fractions, and shall bear the additional legend
set forth under subsection 2.2(2).
.2 Each Special Warrant Certificate and all certificates issued
in exchange therefor or in substitution thereof will bear a legend to the
following effect:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS
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AMENDED. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES,
AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED."
D.12 Issue in Substitution for Lost Special Warrants
.1 If a Special Warrant Certificate becomes mutilated or is lost,
destroyed or stolen, the Company shall issue and thereupon the Trustee shall
countersign or certify and deliver a new Special Warrant Certificate of like
date and tenor as the one mutilated, lost, destroyed or stolen upon surrender
of and in place of and upon cancellation of the mutilated Special Warrant
Certificate or in lieu of and in substitution for the lost, destroyed or stolen
Special Warrant Certificate and the substituted Special Warrant Certificate
shall be in a form approved by the Trustee and shall be entitled to the benefit
hereof, rank equally in accordance with its terms with all other Special
Warrant Certificates issued or to be issued hereunder and will bear the same
legend as the Special Warrant Certificate being replaced.
.2 The applicant for the issue of a new Special Warrant
Certificate pursuant to this section 2.3 shall bear the cost of the issue
thereof and in case of loss, destruction or theft shall, as a condition
precedent to the issue thereof, furnish to the Company and to the Trustee such
evidence of ownership and of the loss, destruction or theft of the Special
Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to
the Company and to the Trustee in their discretion, and if required, furnish an
indemnity in amount and form satisfactory to them in their discretion, and pay
the reasonable charges of the Company and the Trustee in connection therewith.
D.13 Special Warrantholder not a Shareholder
Nothing in this Indenture or in the holding of a Special
Warrant evidenced by a Special Warrant Certificate, or otherwise, shall be
construed as conferring upon the Special Warrantholder any right or interest
whatsoever as a shareholder of the Company, including but not limited to the
right to vote at, to receive notice of, or to attend meetings of shareholders
or any other proceedings of the Company or the right to receive any dividend
and other distribution.
D.14 Special Warrants to Rank Pari Passu
Except as otherwise provided herein, a Special Warrant shall
rank pari passu with all other Special Warrants issued under this Indenture,
whatever may be the actual date of issue of the Special Warrant Certificates
that evidence them.
D.15 Signing of Special Warrant Certificates
The Special Warrant Certificate shall be signed by two of the
directors or officers of the Company and need not be under
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the seal of the Company. The signatures of any of these directors or officers
may be mechanically reproduced in facsimile and Special Warrant Certificates
bearing those facsimile signatures shall be binding upon the Company as if they
had been manually signed by the directors or officers. Notwithstanding that
any of the persons whose manual or facsimile signature appears on any Special
Warrant Certificate as an officer or director may no longer hold office at the
date of the Special Warrant Certificate or at the date of certification or
delivery thereof, any Special Warrant Certificate signed as aforesaid shall,
subject to section 2.7, be valid and binding upon the Company.
D.16 Certification by the Trustee
.1 The Trustee shall certify Special Warrant Certificates upon
the written direction of the Company. No Special Warrant Certificate shall be
issued or, if issued, shall be valid or entitle the holder to the benefit
hereof until it has been certified by manual signature by or on behalf of the
Trustee substantially in the form approved by the Company and the Trustee and
the certification by the Trustee upon any Special Warrant Certificate shall be
conclusive evidence as against the Company that the Special Warrant Certificate
so certified has been duly issued hereunder and that the holder is entitled to
the attributes and characteristics of the Special Warrants provided for in this
Indenture.
.2 The certification of the Trustee on Special Warrant
Certificates issued hereunder shall not be construed as a representation or
warranty by the Trustee as to the validity of this Indenture or of the Special
Warrant Certificates (except the due certification thereof) and the Trustee
shall in no respect be liable or answerable for the use made of the Special
Warrants or the Special Warrant Certificates or any of them or of the
consideration therefor, except as otherwise specified herein.
ARTICLE THREE
Exchange and Ownership of Special Warrants
D.17 Exchange of Special Warrants
.1 Upon the request of the Special Warrantholder one or more
Special Warrant Certificates may, upon compliance with the reasonable
requirements of the Trustee, be exchanged for one or more Special Warrant
Certificates of different denominations evidencing, in the aggregate, the same
number of Special Warrants as the Special Warrant Certificate or Special
Warrant Certificates being exchanged and shall bear the same legends as the
Special Warrant Certificates being exchanged.
.2 Special Warrant Certificates may be exchanged only at the
principal transfer offices of the Trustee in the city of Vancouver or at any
other place that is designated by the Company with the approval of the Trustee.
Any Special Warrant
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Certificates tendered for exchange shall be surrendered to the Trustee or to
its agent and, upon issuance of new Special Warrants in exchange therefor,
cancelled. The Company shall sign all Special Warrant Certificates necessary to
carry out exchanges as aforesaid and those Special Warrant Certificates shall
be certified by or on behalf of the Trustee.
D.18 Registration of Special Warrants
.1 The Company hereby appoints the Trustee as Registrar of the
Special Warrants. The Company may hereafter, with the consent of the Trustee,
appoint one or more other additional Registrars of the Special Warrants.
.2 The Company shall cause a register to be kept by the Trustee,
and the Trustee agrees to maintain such a register, at its principal transfer
office in the City of Vancouver, in which shall be entered the name and address
of the Special Warrantholder and other particulars of the Special Warrants held
by such holder and a register of all exercises of Special Warrants and the date
and other particulars of each exercise. Such registration shall be noted on
the Special Warrant Certificates by the Trustee or other Registrar duly
appointed pursuant to subsection 3.2(1).
.3 The register referred to in this section 3.2 shall at all
reasonable times be open for inspection by the Company, by the Trustee and by
the Special Warrantholder.
.4 Except as required by law, neither the Trustee nor any other
Registrar duly appointed pursuant to subsection 3.2(1) nor the Company shall be
charged with notice of or be bound to see to the execution of any trust,
whether express, implied or constructive, in respect of any Special Warrant.
.5 The register required to be kept at the city of Vancouver
shall not be closed at any time.
.6 The Trustee and every Registrar duly appointed pursuant to
subsection 3.2(1) shall from time to time, when requested so to do by the
Company, by the Trustee or by the Special Warrantholder, furnish the Company,
the Trustee or, upon payment by the Special Warrantholder of a reasonable fee,
the Special Warrantholder, as the case may be, with a list of the number of
Special Warrants held by the Special Warrantholder.
D.19 Special Warrants Not Transferable
The Special Warrants authorized to be created by the Company
under section 2.1 and issued under this Indenture are not transferable by the
holder thereof.
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ARTICLE FOUR
Exercise of Special Warrants
D.20 Exercise During Exercise Period
The Special Warrantholder may exercise the Special Warrants
represented by a Special Warrant Certificate at any time and from time to time
in whole or in part during the Exercise Period. Any such exercise, or any
deemed exercise pursuant to section 4.9, shall be subject to the holder
providing such assurances and executing such documents as may, in the
reasonable opinion of the Company or the Trustee, be required to ensure
compliance with applicable securities legislation.
D.21 Notice of Final Receipt Date
If the Final Receipt Date occurs on or before June 7, 1997,
the Company shall forthwith give notice of such occurrence, together with
copies of the receipts for the Final Prospectus, to the Trustee.
D.22 Notice of Exercise Period
Upon receipt by the Trustee of the notice referred to in
section 4.2, or if the Trustee has not received the notice referred to in
section 4.2 on or before June 7, 1997, the Trustee shall forthwith give notice
to the Special Warrantholder specifying the duration and expiry of the Exercise
Period.
D.23 Method of Exercise of Special Warrants
.1 The Special Warrantholder may, during the Exercise Period,
exercise the right thereby conferred to acquire Warrants by surrendering to the
Trustee at its principal transfer office in the City of Vancouver or at any
other place or places that may be designated by the Company with the approval
of the Trustee, a Special Warrant Certificate or Special Warrant Certificates
representing the Special Warrants held by the holder, together with a duly
completed and executed exercise form in the form set out in Schedule B. Except
as provided in section 4.9, the Special Warrants shall only be deemed to have
been surrendered upon personal delivery thereof to, or if sent by mail or other
means of transmission upon actual receipt thereof by, the Trustee at one of the
offices specified in this section. Any such exercise, or any deemed exercise
pursuant to section 4.9, shall be subject to the holder providing such
assurances and executing such documents as may, in the reasonable opinion of
the Company or the Trustee, be required to ensure compliance with all
applicable securities legislation.
.2 Any exercise form referred to in subsection 4.4(1) shall be
signed by the Special Warrantholder or the Special Warrantholder's executors or
administrators or other legal representatives or an attorney of the Special
Warrantholder duly appointed by an instrument in writing satisfactory to the
Trustee. The exercise form attached to the Special Warrant Certificate shall
specify the number of Special Warrants being exercised.
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.3 If, at the time of exercise of the Special Warrants, there
remain restrictions on resale under applicable securities legislation on the
Warrants acquired, the Company may, on the advice of counsel, endorse the
certificates representing the Shares with respect to those restrictions.
D.24 Effect of Exercise of Special Warrants
.1 Upon exercise of the Special Warrants in accordance with
section 4.4 or 4.9, and subject to sections 4.6 and 4.7, the holder of the
Special Warrants shall be entitled without further payment therefor to receive
from the Company:
(a) one A Warrant for each Special Warrant exercised; and
(b) 1.2349792 B Warrants for each Special Warrant exercised,
and the Trustee shall cause the holder thereof to be entered forthwith on its
register of Warrantholders in accordance with the Warrant Indenture as the
holder of such Warrants and the Warrants so acquired shall be deemed to have
been issued, and the Special Warrantholder shall be deemed to have become the
holder of record of the Warrants on the Exercise Date.
.2 Upon the due exercise of the Special Warrants as aforesaid,
the Company shall, without charge therefor, forthwith cause to be delivered to
the Trustee as agent for the Special Warrantholder, certificates for the
appropriate number of Warrants that the Special Warrantholder is entitled to
and has elected to acquire pursuant to the Special Warrants exercised. Upon
receipt by the Trustee of such certificates the Trustee shall cause such
certificates to be delivered forthwith in accordance with the written delivery
instructions of the holder, or in the absence of such instructions, by
registered mail without charge therefor, to the Special Warrantholder and, if
the Final Receipt Date has occurred, a copy of the Final Prospectus, unless a
copy thereof has previously been given by the Company to the Special
Warrantholder.
D.25 Partial Exercise of Special Warrants
Except as provided for in section 4.9, the Special
Warrantholder may exercise any number of Special Warrants up to the aggregate
number of Special Warrants represented by the Special Warrant Certificates
surrendered. In the event of any exercise of a number of Special Warrants less
then the number which the holder is entitled to exercise, the holder of the
Special Warrants upon such exercise shall be entitled to receive, without
charge therefor, a new Special Warrant Certificate in respect of the balance of
the Special Warrants represented by the surrendered Special Warrant Certificate
and which were not then exercised and the Trustee shall issue a new Special
Warrant Certificate upon surrender of such Special Warrant Certificate, if
satisfied that the new Special Warrant Certificate is properly issuable.
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D.26 No Fractional Warrants
Notwithstanding anything herein contained, the Company shall
not be obliged to issue any fractional Warrants or to distribute certificates
which evidence fractional Warrants upon the exercise of one or more Special
Warrants. To the extent that the holder of one or more Special Warrants would
otherwise have been entitled to receive on the exercise or partial exercise
thereof a fraction of a Warrant that holder may exercise that right in respect
of the fraction only in combination with other Special Warrants that in the
aggregate entitle the holder to purchase a whole number of Warrants. If not so
exercised, the Company shall not pay any amounts to the holder in satisfaction
of the right to otherwise have received a fraction of a Warrant.
D.27 Expiration of Special Warrants
After the expiry of the Exercise Period, all rights under any
Special Warrant in respect of which the Exchange Right shall not theretofore
have been exercised shall, subject to section 4.9, wholly cease and terminate
and the Special Warrant Certificate thereof shall be void and of no effect.
D.28 Deemed Exercise of Special Warrants
If, immediately prior to the expiry of the Exercise Period,
any Special Warrants have not been exercised by the holder thereof, such
Special Warrants shall be deemed to have been then exercised and surrendered by
the holder without any further action on the part of the holder.
D.29 Accounting and Recording
The Trustee shall record the particulars of the Special
Warrants exercised and, within three business days of each Exercise Date, the
Trustee shall provide those particulars in writing to the Company.
D.30 Cancellation of Surrendered Special Warrants
All Special Warrant Certificates surrendered to the Trustee
shall be cancelled by the Trustee and, upon request therefor of the Company,
the Trustee shall furnish the Company with a certificate identifying the
Special Warrant Certificates so cancelled and the number of Warrants which have
been issued pursuant to each.
D.31 Legend
All certificates representing the Warrants and all
certificates issued in exchange therefor or in substitution thereof will bear a
legend to the following effect:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES
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SECURITIES ACT OF 1933, AS AMENDED, THE HOLDER HEREOF, BY
PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE
COMPANY THAT SUCH SECURITIES MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED."
ARTICLE FIVE
Rights and Covenants
D.32 General Covenants of the Company
The Company covenants with the Trustee that so long as any
Special Warrants remain outstanding and may be exercised for Warrants:
.1 The Company will at all times maintain its existence; carry on
and conduct its business in a prudent manner in accordance with industry
standards and good business practice; keep or cause to be kept proper books of
account in accordance with applicable law; and, if and whenever required in
writing by the Trustee, file with the Trustee copies of all annual financial
statements of the Company furnished to its shareholders during the term of this
Indenture.
.2 The Company shall maintain the listing of the Shares on The
Toronto Stock Exchange and will take all steps necessary to ensure that the
Shares issuable upon exercise of the Warrants will be listed and posted for
trading on The Toronto Stock Exchange upon their issue.
.3 The Company will reserve and keep available a sufficient
number of Shares for issuance upon the exercise of the Warrants.
.4 The Company will cause the Warrants to be issued upon the due
exercise of the Special Warrants in the manner herein provided to be duly
issued in accordance with the Warrant Indenture.
.5 The Company will cause the certificates representing the
Warrants from time to time to be acquired upon exercise of the Special Warrants
in the manner herein provided to be duly issued and delivered in accordance
with the Warrant Indenture.
.6 The Company will use its best efforts to maintain its status
as a "reporting issuer" not in default of the requirements of the Securities
Laws for a period of at least one year from the date hereof.
.7 As expeditiously as reasonably practicable, the Company shall
prepare and file under the Securities Laws a preliminary prospectus and other
documents required to be filed therewith relating to the proposed distribution
of Warrants to the Special Warrantholder upon the exercise of the Special
Warrants.
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.8 The Company will use its reasonable best efforts to resolve
any comments on the preliminary prospectus by the Securities Commissions and to
prepare and file under the Securities Laws the Final Prospectus and other
related documents required to be filed therewith and to take all other steps
and proceedings that may be necessary in order to qualify the Warrants to be
issued upon exercise of the Special Warrants for distribution in each of the
Provinces through registrants who comply with the relevant provisions of
applicable Securities Laws.
.9 The Company shall use its reasonable best efforts to ensure
that the Final Receipt Date occurs on or before July 24, 1996.
.10 The Company will enter into the Warrant Indenture on the date
hereof and will perform its obligations thereunder.
.11 Generally, the Company will well and truly perform and carry
out all the acts or things to be done by it as provided in this Indenture.
D.33 Trustee's Remuneration and Expenses
.1 The Company covenants that it will pay to the Trustee from
time to time such reasonable remuneration for its services hereunder as may be
agreed upon between the Company and the Trustee and will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in the administration or execution of
the trusts hereby created (including the reasonable compensation and the
disbursements of counsel and all other advisers and assistants not regularly in
its employ), both before any default hereunder and thereafter until all duties
of the Trustee under the trusts hereof shall be finally and fully performed,
except any expense, disbursement or advance as may arise from the negligence,
wilful misconduct or bad faith of the Trustee or of persons for whom the
Trustee is responsible.
D.34 Performance of Covenants by Trustee
If the Company shall fail to perform any of its covenants and
obligations contained in this Indenture, the Trustee may notify the Special
Warrantholder of the failure on the part of the Company or may itself perform
any of the said covenants capable of being performed by it, but shall be under
no obligation to do so or to notify the Special Warrantholder. All sums
expended or advanced by the Trustee in so doing shall be repayable as provided
in section 5.2. No performance, expenditure or advance by the Trustee shall be
deemed to relieve the Company of any default or of its continuing obligations
hereunder.
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D.35 Rescission Right
The Company covenants with the Trustee to provide a right of
rescission to each Special Warrantholder as hereinafter set forth, which right
shall be exercisable either by the Trustee on behalf of a Special Warrantholder
or by a Special Warrantholder directly:
In the event that any holder of Special Warrants who acquires
Warrants upon the exercise or deemed exercise of his Special
Warrants is or becomes entitled under applicable securities
legislation to the remedy of rescission by reason of the Final
Prospectus or any amendment thereto containing a
misrepresentation, such holder shall be entitled to rescission
not only of such holder's exercise of such Special Warrants
but also of the purchase of such Special Warrants hereunder,
and shall be entitled in connection with such rescission to a
full refund of the Special Warrant Consideration. In the
event such holder is a permitted assignee of the interest of
the original purchaser of such Special Warrants, such
permitted assignee shall be entitled to exercise the rights of
rescission and refund granted hereunder as if such permitted
assignee were such original purchaser. The foregoing is in
addition to any other right or remedy available to a holder of
the Special Warrants under section 114 of the Securities Act
(British Columbia), section 130 of the Securities Act
(Ontario) or a corresponding provision of other securities
legislation or otherwise at law.
ARTICLE SIX
Enforcement
D.36 Suits by Special Warrantholders
.1 All or any of the rights conferred upon the Special
Warrantholder by any of the terms of the Special Warrants or of this Indenture,
or both of them, may be enforced by the Special Warrantholder by appropriate
legal proceedings, but without prejudice to the right which is hereby conferred
upon the Trustee to proceed in its own name to enforce each and all of the
provisions herein contained for the benefit of the Special Warrantholder.
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D.37 Immunity of Shareholders
The Trustee, and by its acceptance of the Special Warrant
Certificates and as part of the consideration for the issue of the Special
Warrants, the Special Warrantholder, hereby waive and release any right, cause
of action or remedy now or hereafter existing in any jurisdiction against any
past, present or future shareholder, director or officer of the Company or of
any of the subsidiaries of the Company, or any subsidiary of the Company, in
their capacity as such, for the issue of Warrants pursuant to any Special
Warrants or on any covenant, agreement, representation or warranty by the
Company contained herein or in the Special Warrant Certificates.
D.38 Limitation of Liability
The obligations hereunder are not personally binding upon, nor
shall resort hereunder be had to, the private property of any of the past,
present or future directors, shareholders, officers, employees or agents of the
Company or any of the subsidiaries of the Company, or any subsidiary of the
Company, but only the property of the Company (or any successor corporation)
shall be bound in respect hereof.
ARTICLE SEVEN
Powers of the Special Warrantholder
D.39 Powers Exercisable by the Special Warrantholder
In addition to all other powers conferred upon it by any other
provisions of this Indenture or by law, the Special Warrantholder shall have
the following powers exercisable from time to time by notice to the Trustee and
the Company:
(a) power to agree to or sanction any modification, abrogation,
alteration, compromise or arrangement of the rights of the
Special Warrantholder and/or the Trustee in its capacity as
trustee hereunder or on behalf of the Special Warrantholder
against the Company, whether those rights arise under this
Indenture or otherwise, which shall be agreed to by the
Company, and to authorize the Trustee to concur in and execute
any indenture supplement;
(b) power to direct or authorize the Trustee to enforce any of the
obligations on the part of the Company contained in this
Indenture or the Special Warrants or to enforce any of the
rights of the Special Warrantholder in any manner specified in
the notice or to refrain from enforcing any such covenant or
right;
(c) power to waive and direct the Trustee to waive any default on
the part of the Company in complying with any provisions of
this Indenture or the Special
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Warrants, either unconditionally or upon any conditions
specified in the notice;
(d) power from time to time and at any time, with the consent of
the Company, not to be unreasonably withheld, to remove the
Trustee and appoint a successor trustee; and
(e) power to assent to any compromise or arrangement with any
creditor or any class of creditors, whether secured or
otherwise, and with holders of any Shares or other securities
of the Company.
D.40 Powers Cumulative
It is hereby declared and agreed that any one or more of the
powers or any combination of the powers in this Indenture stated to be
exercisable by the Special Warrantholder may be exercised from time to time and
the exercise of any one or more of the powers or any combination of the powers
from time to time shall not prevent the Special Warrantholder from exercising
that power or those powers or combination of powers then or any other power or
powers or combination of powers thereafter from time to time.
D.41 Record of Notices
A record of all notices delivered by the Special Warrantholder
in connection with any exercise of the powers set forth in section 7.1 shall be
made and duly entered in books from time to time to be provided for that
purpose by the Trustee at the expense of the Company, and such record shall be
prima facie evidence of the matters therein stated.
D.42 Binding Effect of Notices upon Trustee
The Trustee (subject to the provisions for its indemnity
herein contained) shall be bound to give effect accordingly to every notice
delivered by the Special Warrantholder in connection with any exercise of the
powers set forth in Section 7.1.
ARTICLE EIGHT
Supplemental Indentures and Successor Companies
D.43 Provision for Supplemental
Indentures for Certain Purposes
From time to time the Company and the Trustee may, subject to
the provisions hereof, and they shall, when so directed hereby, execute and
deliver by their proper officers or directors, as the case may be, indentures
or instruments supplemental hereto, which thereafter shall form part hereof,
for any one or more or all of the following purposes:
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(a) adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of counsel, are
necessary or advisable, provided that the same are not in the
opinion of the Trustee prejudicial to the interests of the
Special Warrantholder;
(b) giving effect to any notice delivered pursuant to section 7.1;
(c) adding to, deleting or altering the provisions hereof in
respect of the transfer of Special Warrants, the exchange of
Special Warrants and the making of any modification in the
form of a Special Warrant Certificate which additions,
deletions or alterations, in the opinion of the Trustee, do
not affect the substance thereof;
(d) making any additions to, deletions from or alterations of the
provisions of this Indenture which, in the opinion of the
Trustee, do not materially and adversely affect the interests
of the Special Warrantholder and are necessary or advisable in
order to incorporate, reflect or comply with any Applicable
Legislation;
(e) making provisions not inconsistent with this Indenture as may
be necessary or desirable with respect to matters or questions
arising hereunder or for the purpose of obtaining a listing or
quotation of the Shares issuable under the Warrants on a stock
exchange, bourse or over-the-counter market, provided that the
provisions are not, in the opinion of the Trustee, prejudicial
to the interests of the Special Warrantholder;
(f) modifying any of the provisions of this Indenture or relieving
the Company from any of the obligations, conditions or
restrictions herein contained, provided that no such
modification or relief shall be or become operative or
effective if in the opinion of the Trustee the modification or
relief impairs any of the rights of the Special Warrantholder
provided hereunder, or of the Trustee, and provided that the
Trustee may in its uncontrolled discretion decline to enter
into any supplemental indenture which in its opinion may not
afford adequate protection to the Trustee when the same shall
become operative;
(g) evidencing any succession, or successive successions, of other
bodies corporate to the Company and the assumption by any
successor of the obligations of the Company herein and in the
Special Warrant Certificates as provided hereafter in this
Article Eight; and
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(h) for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification of any
ambiguities, defective provisions, errors or omissions herein,
provided that, in the opinion of the Trustee, the rights of
the Trustee and the Special Warrantholder provided hereunder,
are in no way prejudiced thereby.
D.44 Successor Companies
In the case of the consolidation, amalgamation, arrangement,
merger or transfer of the undertaking or assets of the Company as an entirety
or substantially as an entirety to another corporation ("successor
corporation"), the successor corporation resulting from the consolidation,
amalgamation, arrangement, merger or transfer (if not the Company) shall be
bound by the provisions hereof and all obligations for the due and punctual
performance and observance of each and every covenant and obligation contained
in this Indenture to be performed by the Company and, if requested by the
Trustee, the successor corporation shall by supplemental indenture satisfactory
in form to the Trustee and executed and delivered to the Trustee, expressly
assume those obligations.
ARTICLE NINE
Concerning the Trustee
D.45 Trust Indenture Legislation
.1 If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with a mandatory requirement of Applicable
Legislation, the mandatory requirement shall prevail.
.2 The Company and the Trustee agree that each will at all times
in relation to this Indenture and any action to be taken hereunder observe and
comply with and be entitled to the benefits of Applicable Legislation.
D.46 Rights and Duties of Trustee
.1 In the exercise of the rights, duties and obligations
prescribed or conferred by the terms of this Indenture, the Trustee shall act
honestly and in good faith with a view to the best interests of the Special
Warrantholder and shall exercise that degree of care, diligence and skill that
a reasonably prudent trustee would exercise in comparable circumstances.
.2 No provision of this Indenture will be construed to relieve
the Trustee from liability for its own negligent act, negligent failure to act,
wilful misconduct or bad faith.
.3 The obligation of the Trustee to commence or continue any act,
action or proceeding for the purpose of enforcing any
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rights of the Trustee or the Special Warrantholder or obligations of the
Company hereunder shall be conditional upon either the Special Warrantholder or
the Company furnishing, when required by notice in writing by the Trustee,
sufficient funds to commence or continue the act, action or proceeding and an
indemnity reasonably satisfactory to the Trustee to protect and hold harmless
the Trustee against the costs, charges and expenses and liabilities to be
incurred thereby and any loss and damage it may suffer by reason thereof. None
of the provisions contained in this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers unless indemnified as aforesaid.
.4 The Trustee may, before commencing any such act, action or
proceeding, or at any time during the continuance thereof require the Special
Warrantholder to deposit with the Trustee the Special Warrant Certificates held
by it, for which Special Warrant Certificates the Trustee shall issue receipts.
.5 Every provision of this Indenture that by its terms relieves
the Trustee of liability or entitles it to rely upon any evidence submitted to
it is subject to the provisions of Applicable Legislation, and of this section
9.2 and section 9.3.
D.47 Evidence, Experts and Advisers
.1 In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Company shall furnish to the Trustee
such additional evidence of compliance with any provision hereof, and in such
form, as may be prescribed by Applicable Legislation or as the Trustee may
reasonably require by written notice to the Company.
.2 In the exercise of its rights and duties hereunder the Trustee
may, if it is acting in good faith, rely as to the truth of the statements and
the accuracy of the opinions expressed therein, upon statutory declarations,
opinions, reports, certificates or other evidence furnished to the Trustee
pursuant to any provision hereof or of Applicable Legislation or pursuant to a
request of the Trustee, provided that the evidence complies with Applicable
Legislation and that the Trustee examines such evidence and determines that the
evidence complies with the applicable requirements of this Indenture.
.3 Whenever Applicable Legislation requires that evidence
referred to in subsection 9.3(1) be in the form of a statutory declaration, the
Trustee may accept the statutory declaration in lieu of a certificate of the
Company required by any provision hereof. Any such statutory declaration may
be made by one or more of the officers of the Company.
.4 Proof of the execution of an instrument in writing by the
Special Warrantholder may be made by the certificate of a notary public, or
other person with similar powers, that the person signing the instrument
acknowledged to him the execution
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thereof, or by an affidavit of a witness to the execution or in any other
manner that the Trustee may consider adequate.
.5 The Trustee may employ or retain such counsel, accountants,
engineers, appraisers, or other experts or advisers as it may reasonably
require for the purpose of discharging its duties hereunder and may pay
reasonable remuneration for all services so performed by any of them, without
taxation of costs of any counsel, and shall not be responsible for any
misconduct on the part of any of them.
.6 The Trustee may as a condition precedent to any action to be
taken by it under this Indenture require such opinions, statutory declarations,
reports, certificates or other evidence as it, acting reasonably, considers
necessary or advisable in the circumstances.
D.48 Securities, Documents and Monies Held by Trustee
Any securities, documents of title or other instruments that
may at any time be held by the Trustee subject to the trusts hereof may be
placed in the deposit vaults of the Trustee or of any of the Canadian Imperial
Bank of Commerce, Bank of Montreal, Bank of Nova Scotia, The Toronto-Dominion
Bank, the Royal Bank of Canada and the Hongkong Bank of Canada or deposited for
safekeeping with any of those Canadian chartered banks. Unless herein
otherwise expressly provided, any money so held pending the application or
withdrawal thereof under any provision of this Indenture shall be deposited in
the name of the Trustee in any of the foregoing Canadian chartered banks at the
rate of interest, if any, then current on similar deposits.
D.49 Action by Trustee to Protect Interests
The Trustee shall have power to institute and to maintain such
actions and proceedings as it may consider necessary or expedient to preserve,
protect or enforce its interests and the interests of the Special
Warrantholders.
D.50 Trustee not Required to Give Security
The Trustee shall not be required to give any bond or security
in respect of the execution of the trusts and powers of this Indenture or
otherwise in respect of the premises contained herein.
D.51 Protection of Trustee
By way of supplement to the provisions of any law from time to
time applicable to trustees, it is expressly declared and agreed as follows:
.1 The Trustee shall not be liable for or by reason of any
representations, statements of fact or recitals in this Indenture or in the
Special Warrant Certificates (except the representation contained in section
9.9 or by virtue of the certification by the
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Trustee of the Special Warrant Certificates) or required to verify the same,
but all those statements or recitals are and shall be deemed to be made by the
Company.
.2 Nothing herein contained shall impose any obligation on the
Trustee to see to or to require evidence of the registration (or filing or
renewal thereof) of this Indenture or any instrument ancillary or supplemental
hereto.
.3 The Trustee shall not be bound to give notice to any person or
persons of the execution hereof.
.4 The Trustee shall not incur any liability or responsibility
whatever or be in any way responsible for the consequence of any breach on the
part of the Company of any of the covenants or warranties herein contained or
of any acts of any director, officer, employee or agent of the Company.
.5 The Trustee shall not be bound to give any notice or to do or
take any act, action or proceeding by virtue of the powers conferred on it
hereby unless and until it shall have been required so to do under the terms
hereof nor shall the Trustee be required to take notice of any default of the
Company hereunder unless and until notified in writing of the default (which
notice must specify the nature of the default) and, in the absence of that
notice, the Trustee may for all purposes hereunder conclusively assume that no
default by the Company hereunder has occurred. The giving of any notice shall
in no way limit the discretion of the Trustee hereunder as to whether any
action is required to be taken in respect of any default hereunder.
.6 The Trustee shall not be accountable with respect to the
validity or value (or the kind or amount) of any Warrants or other securities
or property which may at any time be issued or delivered upon the exercise of
the rights attaching to any Special Warrant.
.7 The Trustee is not responsible for any failure of the Company
to make any cash payment or to issue, transfer or deliver Warrants or
certificates for the same upon the surrender or deemed surrender of any Special
Warrant Certificates for the purpose of the exercise of the Special Warrants
represented by such Special Warrant Certificates.
D.52 Replacement of Trustee
.1 The Trustee may resign its trust and be discharged from all
further duties and liabilities hereunder, except as provided in this Article
Ten, by giving to the Company and the Special Warrantholders not less than 90
days' notice in writing or, if a new Trustee has been appointed such shorter
notice as the Company may accept as sufficient. The Special Warrantholder by
notice delivered pursuant to section 7.1 shall have power at any time, with the
consent of the Company, not to be unreasonably withheld, to remove the Trustee
and to appoint a new Trustee. In the event of the Trustee resigning or being
removed as aforesaid or being
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dissolved, becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, the Company shall forthwith appoint a new
Trustee unless a new Trustee has already been appointed by the Special
Warrantholder; failing that appointment by the Company, the retiring Trustee or
the Special Warrantholder may apply to the Supreme Court of British Columbia,
on such notice as the Court may direct, for the appointment of a new Trustee;
but any new Trustee so appointed by the Company or by the Court shall be
subject to removal as aforesaid by the Special Warrantholder and the Company.
Any new Trustee appointed under any provision of this section 9.8 shall be a
corporation authorized to carry on the business of a trust company in the
Provinces of British Columbia and Ontario and, if required by the Applicable
Legislation of any other Province, in that other Province. On any appointment,
the new Trustee shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as Trustee without
any further assurance, conveyance, act or deed; but there shall be immediately
executed, at the expense of the Company, all such conveyances or other
instruments as may, in the opinion of counsel, be necessary or advisable for
the purpose of assuring such powers, rights, duties and responsibilities of the
new Trustee.
.2 Upon the appointment of a new Trustee, the Company shall
promptly give notice thereof to the Special Warrantholder.
.3 Any corporation into or with which the Trustee may be merged
or consolidated or amalgamated, or any corporation succeeding to the trust
business of the Trustee, shall be the successor to the Trustee hereunder
without any further act on its part or any of the parties hereto provided that
the corporation would be eligible for appointment as a new Trustee under
subsection 9.8(1).
.4 Any Special Warrant Certificates certified but not delivered
by a predecessor Trustee may be certified by the new or successor Trustee in
the name of the predecessor or new or successor Trustee.
D.53 Conflict of Interest
.1 The Trustee represents to the Company that at the time of the
execution and delivery hereof no material conflict of interest exists between
the Trustee's role as a fiduciary hereunder and its role in any other capacity
and agrees that in the event of a material conflict of interest arising
hereafter it will, within 90 days after ascertaining that it has a material
conflict of interest, either eliminate the same or assign its trust hereunder
to a successor Trustee approved by the Company and meeting the requirements set
forth in subsection 9.8(1). Notwithstanding the foregoing provisions of this
subsection 9.9(1), if any such material conflict of interest exists or
hereafter shall exist, the validity and enforceability of this Indenture and
the Special Warrant Certificate shall not be affected in any manner whatsoever
by reason thereof.
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.2 Subject to subsection 9.9(1), the Trustee, in its personal or
any other capacity, may buy, lend upon and deal in securities of the Company
may act as registrar and transfer agent for the Shares and trustee for the
Warrants under the Warrant Indenture and generally may contract and enter into
financial transactions with the Company or any subsidiary of the Company, all
without being liable to account for any profit made thereby.
D.54 Acceptance of Trust
The Trustee hereby accepts the trusts in this Indenture
declared and provided for, agrees to perform the same upon the terms and
conditions herein set forth and agrees to hold all rights, interests and
benefits contained herein for and on behalf of those persons who become holders
of Special Warrants from time to time issued pursuant to this Indenture.
D.55 Trustee not to be Appointed Receiver
The Trustee and any person related to the Trustee shall not be
appointed a receiver, a receiver and manager or liquidator of all or any part
of the assets or undertaking of the Company.
D.56 Indemnity
Without limiting any protection or indemnity of the Trustee
under any other provision hereof, or otherwise at law, the Company hereby
agrees to indemnify and hold harmless the Trustee from and against any and all
liabilities, losses, damages, penalties, claims, actions, suits, costs,
expenses and disbursements, including reasonable legal or advisor fees and
disbursements, of whatever kind and nature which may at any time be imposed on,
incurred by or asserted against the Trustee in connection with the performance
of its duties and obligations hereunder, other than such liabilities, losses,
damages, penalties, claims, actions, suits, costs, expenses and disbursements
arising by reason of the negligence, wilful misconduct or bad faith of the
Trustee or persons for whom the Trustee is responsible. This provision shall
survive the resignation or removal of the Trustee, or the termination of the
Indenture.
ARTICLE TEN
General
D.57 Notice to Company and Trustee
(1) Unless herein otherwise expressly provided, any notice to be
given hereunder to the Company or the Trustee shall be given in writing and
shall be deemed to be validly given if delivered or if sent by registered
letter, postage prepaid or if transmitted by facsimile:
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(a) If to the Company:
Granges Inc.
Xxxxx 0000
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx
X.X.X. 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Facsimile No.: (000) 000-0000
and to:
Xxxxxx Xxxxx
Xxxxxxxxxx & Xxxxxxxxxx
0000 Xxxxxxxxxx Xxxxxx
000 Xxxxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Attention: Xx. Xxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
(b) If to the Trustee:
Montreal Trust Company of Canada
Montreal Trust Centre
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Manager, Corporate Trust Department
Facsimile No.: (000) 000-0000
and any notice given in accordance with the foregoing shall be deemed to have
been received on the date of delivery or, if mailed, on the fifth business day
following the day of the mailing of the notice or, if transmitted by facsimile,
on the day following the transmission.
.2 The Company or the Trustee, as the case may be, may from time
to time notify the other in the manner provided in subsection 10.1(1) of a
change of address which, from the effective date of the notice and until
changed by like notice, shall be the address of the Company or the Trustee, as
the case may be, for all purposes of this Indenture.
.3 If, by reason of a strike, lockout or other work stoppage,
actual or threatened, involving postal employees, any notice to be given to the
Trustee or to the Company hereunder could reasonably be considered unlikely to
reach or to be delayed in reaching its destination, the notice shall be valid
and effective only if it is delivered to an officer of the party to
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which it is addressed or if it is delivered to that party at the appropriate
address provided in subsection 10.1(1) by cable, telegram, telex, facsimile or
other means of prepaid, transmitted, or written communication and any notice
delivered in accordance with the foregoing shall be deemed to have been
received on the date of delivery to the officer or if delivered by cable,
telegram, telex, facsimile or other means of prepaid, transmitted, recorded
communication, on the first business day following the date of the sending of
the notice by the person giving the notice.
D.58 Notice to Special Warrantholder
.1 Unless herein otherwise expressly provided, any notice to be
given hereunder to Special Warrantholder shall be given in writing and shall be
deemed to be validly given if delivered or if sent by registered letter,
postage prepaid or if transmitted by facsimile to:
L.B. Mining Co.
0000 Xxxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxx, Xxxxx
X.X.X. 00000
Attention: Xxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
and to:
Xxxxxxxx & Xxxxxxxx
000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx
X.X.X. 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
and any notice given in accordance with the foregoing shall be deemed to have
been received on the date of delivery or, if mailed, on the fifth business day
following the date of mailing of the notice or, if transmitted by facsimile, on
the day following the transmission.
.2 If the address and facsimile number of the Special
Warrantholder appearing on the register maintained by the Trustee is changed,
the Trustee shall notify the Company of such change of address, which, from the
effective date of such notice and until changed by like notice, shall be the
address to which any notice to be given to the Special Warrantholder shall be
delivered for all purposes of this Indenture.
.3 If, by reason of a strike, lockout or other work stoppage,
actual or threatened, involving postal employees, any notice to be given to the
Special Warrantholder hereunder could reasonably be considered unlikely to
reach or to be delayed in reaching its destination, the notice shall be valid
and effective
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only if it is delivered to an officer of the Special Warrantholder or if it is
delivered to the Special Warrantholder at the appropriate address provided in
subsection 10.2(1) by cable, telegram, telex, facsimile or other means of
prepaid, transmitted or written communication and any notice delivered in
accordance with the foregoing shall be deemed to have been received on the date
of delivery to the officer or if delivered by cable, telegram, telex, facsimile
or other means of prepaid, transmitted, recorded communication, on the first
business day following the date of the sending of the notice by the person
giving the notice.
D.59 Satisfaction and Discharge of Indenture
Upon the date by which certificates representing Warrants
shall have been delivered to the Special Warrantholder to the full extent of
the rights attached to all Special Warrants theretofore certified hereunder and
the monies to be paid hereunder, if any, have been paid, this Indenture shall
cease to be of further effect and the Trustee, on demand of and at the cost and
expense of the Company and upon delivery to the Trustee of a certificate of the
Company stating that all conditions precedent to the satisfaction and discharge
of this Indenture have been complied with and upon payment to the Trustee of
the fees and other remuneration payable to the Trustee, shall execute proper
instruments acknowledging satisfaction of and discharging this Indenture.
D.60 Sole Benefit of Parties and Special Warrantholders
Nothing in this Indenture or in the Special Warrant
Certificates, expressed or implied, shall give or be construed to give to any
person other than the parties hereto and the Special Warrantholder any legal or
equitable right, remedy or claim under this Indenture, or under any covenant or
provision therein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and the Special Warrantholder.
D.61 Discretion of Directors
Any matter provided herein to be determined by the directors
will be determined acting reasonably in their sole discretion, and a
determination so made will be conclusive.
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D.62 Counterparts and Formal Date
This Indenture may be executed in several counterparts, each
of which when so executed shall be deemed to be an original and the
counterparts together shall constitute one and the same instrument and
notwithstanding their date of execution shall be deemed to bear the date as of
June 7, 1996.
IN WITNESS WHEREOF the parties hereto have executed these
presents under the hands of their proper officers in that behalf.
GRANGES INC.
(C/S) By:
-------------------------------
By:
------------------------------
MONTREAL TRUST COMPANY OF CANADA
(C/S) By:
-------------------------------
By:
------------------------------
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SCHEDULE "A"
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED. THE HOLDER HEREOF,
BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH
SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED.
SPECIAL WARRANT TO ACQUIRE
A WARRANTS AND B WARRANTS
OF GRANGES INC.
(incorporated under the laws of British Columbia)
Special Warrant Certificate Certificate for 2,047,938
No. SWLB-00001 Special Warrants, each
entitling the holder to
acquire one A Warrant and
1.2349792 B Warrants of
Granges Inc.
THIS IS TO CERTIFY THAT, for value received,
L.B. Mining Co.
0000 Xxxxxxxxx Xxxxx
X.X. Xxx 0000
Xxxxx, Xxxxx
X.X.X. 00000
-------------------------------------------------------------------------------
(herein called the "holder") is the registered holder of the number of Special
Warrants of Granges Inc. (the "Company") set forth above, and is entitled to
receive on the exercise or deemed exercise of these Special Warrants in the
manner herein provided and without further payment therefor, subject as
hereinafter provided and as more specifically set forth in the Special Warrant
Indenture (defined below):
63 one non-transferable class "A" common share purchase warrant
(an "A Warrant"), each A Warrant entitling the holder thereof
to receive one fully paid and non-assessable common share
without par value in the capital of the Company (a "Share")
for no additional consideration in accordance with the Warrant
Indenture; and
64 1.2349792 non-transferable class "B" common share purchase
warrants ("B Warrants"), each B Warrant entitling the holder
thereof to acquire one Share for no additional consideration
in accordance with the Warrant Indenture;
for each of the Special Warrants evidenced by this certificate.
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Each A Warrant and B Warrant (collectively hereinafter
referred to as "Warrants") will be issued under the warrant indenture (the
"Warrant Indenture") dated as of June 7, 1996 between the Company and the
Montreal Trust Company of Canada (the "Trustee").
The Special Warrants represented by this Special Warrant
Certificate are issued under and pursuant to a special warrant indenture
(herein called the "Special Warrant Indenture") made as of June 7, 1996 between
the Company and the Trustee to which Special Warrant Indenture and any
instruments supplemental thereto reference is hereby made for a full
description of the rights of the holders of the Special Warrants and the terms
and conditions upon which Special Warrants are, or are to be, issued, held,
exchanged and surrendered, all to the same effect as if the provisions of the
Special Warrant Indenture and all instruments supplemental thereto were herein
set forth, and to all of which provisions the holder of this Special Warrant
Certificate by acceptance hereof assents. Capitalized terms used in this
Special Warrant Certificate and not otherwise defined shall have the meanings
ascribed to them in the Special Warrant Indenture.
The Company will furnish to the holder, on request and without
charge, a copy of the Special Warrant Indenture.
The Exercise Period shall be the period commencing on the date
of issuance of the Special Warrants and ending at 4:30 p.m. (local time) on the
earlier of the fifth business day after:
(a) the Final Receipt Date; and
(b) June 7, 1997 or such later date as the Company and the Special
Warrantholder may agree.
As set forth in the Special Warrant Indenture, the term "Final
Receipt Date" means, in effect, the date on which a receipt is issued for the
Final Prospectus relating to the distribution of the Warrants to be acquired
upon exercise of the Special Warrants by the last of the Securities Commissions
to do so under the applicable Securities Laws of the Provinces.
As provided in the Special Warrant Indenture, if the Final
Receipt Date occurs before the end of the Exercise Period, the Trustee will
give notice to the Special Warrantholder specifying the Exercise Period. If
the Special Warrants are not exercised before the end of the Exercise Period,
the Special Warrants will be deemed to be exercised on the expiry of the
Exercise Period.
The Special Warrants represented by this Special Warrant
Certificate may be exercised by the holder during the Exercise Period by:
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35
(a) duly completing and executing the attached Exercise Form; and
(b) surrendering this Special Warrant Certificate to the Trustee
at the principal transfer office of the Trustee in the city of
Vancouver, British Columbia.
The Special Warrants shall be effectively surrendered (unless
deemed to be surrendered) only upon personal delivery hereof or, if sent by
mail or other means of transmission, upon actual receipt thereof by the Trustee
at the office referred to above.
Upon surrender of the Special Warrants, the person or persons
in whose name or names the Warrants issuable upon exercise of the Special
Warrants are issued shall be deemed for all purposes (except as provided in the
Special Warrant Indenture) to be the holder or holders of record of such
Warrants. The Company has covenanted that it will deliver (subject to the
provisions of the Special Warrant Indenture) to the Trustee as agent for such
person or persons, certificates representing such Warrants and the Trustee has
covenanted that it will cause such certificates to be mailed by registered mail
to such person or persons at the address or addresses specified in the register
for the Special Warrants.
The holder of this Special Warrant Certificate may, upon
surrender hereof to the Trustee at its principal transfer office in the city of
Vancouver, subject to the provisions of the Special Warrant Indenture and in
compliance with the reasonable requirements of the Trustee, exchange one or
more Special Warrant Certificates for one or more Special Warrant Certificates
of different denomination evidencing Special Warrants entitling the holder to
receive in the aggregate the same number of Warrants as may be acquired
pursuant to the Special Warrant Certificate being exchanged.
The holding of the Special Warrants evidenced by this Special
Warrant Certificate shall not constitute the holder hereof a shareholder of the
Company or entitle the holder to any right or interest in respect thereof
except as herein and in the Special Warrant Indenture expressly provided.
The Special Warrants represented by this Special Warrant
Certificate, the Warrants to be issued upon exercise thereof, and the Shares to
be issued upon exercise of the Warrants, have not been registered under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act") or
any applicable State securities laws of the United States. Subject to certain
exceptions Special Warrants, and the Warrants to be issued upon exercise of the
Special Warrants, may not be exercised by U.S. Persons or persons within the
United States unless such securities and Shares issuable upon exercise thereof
are registered under the U.S. Securities Act and the securities laws of all
applicable States of the United States or an exemption from such registration
requirements is available. Terms used in
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this paragraph have the meanings given to them in Regulation S under the U.S.
Securities Act.
This Special Warrant Certificate shall not be valid for any
purpose whatsoever unless and until it has been certified by or on behalf of
the Trustee under the Special Warrant Indenture.
Time shall be of the essence hereof.
IN WITNESS WHEREOF Granges Inc. has caused this Special
Warrant Certificate to be duly executed as of the 7th day of June, 1996.
GRANGES INC.
By:
------------------------------------
Authorized Signatory
By:
------------------------------------
Authorized Signatory
Countersigned and Registered by:
MONTREAL TRUST COMPANY OF CANADA,
Vancouver
By:
------------------------------
Authorized Signatory
LEGEND
THE SECURITY REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO A
HOLD PERIOD AND MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL THE EXPIRY OF THE
HOLD PERIOD EXCEPT AS PERMITTED BY THE SECURITIES ACT (BRITISH COLUMBIA) AND
THE RULES MADE THEREUNDER. THE HOLD PERIOD EXPIRES ON JUNE 7, 1997.
A-4
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EXERCISE FORM
TO: c/o Montreal Trust Company of Canada
Montreal Trust Centre
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Stock Transfer
Department
The undersigned holder of the within Special Warrants hereby
exercises _____________ of the Special Warrants represented hereby and the
right provided for in such exercised Special Warrants to receive the class "A"
common share purchase warrants and class "B" common share purchase warrants of
Granges Inc. issuable pursuant to such Special Warrants.
The undersigned hereby irrevocably directs that the said class
"A" and class "B" common share purchase warrants be issued and delivered to the
undersigned as follows:
-------------------------------------------------------------------------------
Number(s) of class "B" common Number(s) of class "B" common
share purchase warrants share purchase warrants
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
------------------------------------
Signature of Registered Holder
------------------------------------
Name of Registered Holder
------------------------------------
------------------------------------
Address of Registered Holder
[ ] Please check box if these certificates are to be delivered to the
office where this Special Warrant Certificate is surrendered, failing
which the certificates will be mailed to the address shown on the
register.
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SCHEDULE "B"
WARRANT INDENTURE
[See Document No. 357605]
A-6
