SPECIAL WARRANT INDENTURE
Providing for the Issue of
Special Warrants
BETWEEN
MINERA ANDES INC.
- and -
MONTREAL TRUST COMPANY OF CANADA
Dated as of December 13, 1996
TABLE OF CONTENTS
Page
ARTICLE 1............................... 1
INTERPRETATION.............................................................. 1
1.1 Definitions..................................................... 1
1.2 Gender and Number............................................... 4
1.3 Interpretation not Affected by Headings, etc.................... 4
1.4 Day not a Business Day.......................................... 4
1.5 Time of the Essence............................................. 4
1.6 Currency........................................................ 4
1.7 Applicable Law.................................................. 4
ARTICLE 2............................... 4
ISSUE OF SPECIAL WARRANTS................................................... 4
2.1 Issue of Special Warrants....................................... 4
2.2 Form and Terms of Special Warrants.............................. 5
2.3 Warrantholder not a Shareholder................................. 5
2.4 Special Warrants to Rank Pari Passu............................. 5
2.5 Signing of Warrant Certificates................................. 5
2.6 Certification by the Trustee.................................... 6
2.7 Issue in Substitution for Warrant Certificates Lost, etc........ 6
2.8 Exchange of Warrant Certificates................................ 6
2.9 Charges for Exchange............................................ 6
2.10 Transfer and Ownership of Special Warrants...................... 7
ARTICLE 3............................... 8
EXERCISE OF SPECIAL WARRANTS................................................ 8
3.1 Holders Eligible to Exercise Special Warrants................... 8
3.2 Method of Exercise of Special Warrants.......................... 8
3.3 Effect of Exercise of Special Warrants.......................... 9
3.4 Partial Exercise of Special Warrants; Fractions................. 10
3.5 Common Share and Purchase Warrant Certificates.................. 10
3.6 Expiration of Special Warrants.................................. 11
3.7 Cancellation of Surrendered Special Warrants.................... 11
3.8 Accounting and Recording........................................ 11
3.9 Automatic Exercise on Behalf of Warrantholder by the Trustee.... 11
3.10 Securities Restrictions ........................................ 11
ARTICLE 4............................... 12
ADJUSTMENT OF NUMBER OF COMMON SHARES AND PURCHASE WARRANTS................. 12
4.1 Failure to Clear Prospectus..................................... 12
4.2 Adjustment of Number of Common Shares and Purchase Warrants..... 12
4.3 Entitlement to Shares on Exercise of Special Warrant............ 13
4.4 No Adjustment for Stock Options................................. 14
4.5 Determination by Corporation's Auditors......................... 14
4.6 Proceedings Prior to any Action Requiring Adjustment............ 14
4.7 Certificate of Adjustment....................................... 14
4.8 Notice of Special Matters....................................... 14
4.9 No Action after Notice.......................................... 14
4.10 Other Action.................................................... 15
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4.11 Participation by Special Warrantholder.......................... 15
4.12 Protection of Trustee........................................... 15
ARTICLE 5............................... 15
RIGHTS OF THE CORPORATION AND COVENANTS..................................... 15
5.1 Optional Purchases by the Corporation........................... 15
5.2 General Covenants............................................... 16
5.3 Trustee's Remuneration and Expenses............................. 17
5.4 Securities Qualification Requirements........................... 17
5.5 Performance of Covenants by Trustee............................. 17
ARTICLE 6............................... 17
ENFORCEMENT................................................................. 17
6.1 Suits by Warrantholders......................................... 17
6.2 Immunity of Shareholders, etc................................... 18
6.3 Limitation of Liability......................................... 18
6.4 Waiver of Default............................................... 18
ARTICLE 7............................... 18
MEETINGS OF WARRANTHOLDERS.................................................. 18
7.1 Right to Convene Meetings....................................... 18
7.2 Notice.......................................................... 19
7.3 Chairman........................................................ 19
7.4 Quorum.......................................................... 19
7.5 Power to Adjourn................................................ 19
7.6 Show of Hands................................................... 19
7.7 Poll and Voting................................................. 20
7.8 Regulations..................................................... 20
7.9 Corporation, the Agents and Trustee May be Represented.......... 21
7.10 Powers Exercisable by Extraordinary Resolution.................. 21
7.11 Meaning of Extraordinary Resolution............................. 22
7.12 Powers Cumulative............................................... 22
7.13 Minutes......................................................... 22
7.14 Instruments in Writing.......................................... 23
7.15 Binding Effect of Resolutions................................... 23
7.16 Holdings by Corporation Disregarded............................. 23
ARTICLE 8............................... 23
SUPPLEMENTAL INDENTURES..................................................... 23
8.1 Provision for Supplemental Indentures for Certain Purposes...... 23
8.2 Successor Corporations.......................................... 24
ARTICLE 9............................... 24
CONCERNING THE TRUSTEE...................................................... 24
9.1 Trust Indenture Legislation..................................... 24
9.2 Rights and Duties of Trustee.................................... 24
9.3 Evidence, Experts and Advisers.................................. 25
9.4 Documents, Monies, etc. Held by Trustee......................... 26
9.5 Actions by Trustee to Protect Interest.......................... 26
9.6 Trustee Not Required to Give Security........................... 26
9.7 Protection of Trustee........................................... 26
9.8 Replacement of Trustee; Successor by Xxxxxx..................... 26
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9.9 Conflict of Interest............................................ 27
9.10 Indemnity of Trustee............................................ 28
9.11 Acceptance of Trust............................................. 28
9.12 Trustee Not to be Appointed Receiver............................ 28
9.13 Special Warrant Register........................................ 28
9.14 Register Open for Inspection.................................... 28
ARTICLE 10.............................. 29
GENERAL..................................................................... 29
10.1 Notice to the Corporation, the Agents and the Trustee........... 29
10.2 Notice to Warrantholders........................................ 30
10.3 Ownership and Transfer of Special Warrants...................... 30
10.4 Evidence of Ownership........................................... 30
10.5 Counterparts.................................................... 31
10.6 Satisfaction and Discharge of Indenture......................... 31
10.7 Successors...................................................... 31
10.8 Sole Benefit of Parties and Warrantholders...................... 31
10.9 Common Shares or Special Warrants Owned by the Corporation or
its Subsidiaries - Certificate to be Provided................... 32
THIS SPECIAL WARRANT INDENTURE is made as of the 13th day of December, 1996.
BETWEEN:
MINERA ANDES INC., a corporation amalgamated under the laws
of the Province of Alberta, having an office in the City of
Spokane, in the State of Washington (hereinafter referred to
as the "Corporation")
OF THE FIRST PART
AND
MONTREAL TRUST COMPANY OF CANADA, a trust company
incorporated under the laws of Canada and authorized to
carry on business in all provinces of Canada (hereinafter
referred to as the "Trustee")
OF THE SECOND PART
WHEREAS:
A. the Corporation has authorized the creation of and is proposing to issue
Special Warrants in the manner herein set forth;
B. one Special Warrant shall, subject to adjustment, entitle the holder thereof
to acquire one Common Share and of one Purchase Warrant at no additional cost
upon the terms and conditions herein set forth; and
C. all acts and deeds necessary have been done and performed to make the Special
Warrants, when issued as provided in this Indenture, legal, valid and binding
upon the Corporation with the benefits and subject to the terms of this
Indenture;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Indenture, including the recitals and schedules hereto, and in
all indentures supplemental hereto:
a. "Agency Agreement" means the agreement dated November 22, 1996 between the
Corporation and the Agents relating to the offering of Special Warrants;
b. "Agents" means collectively X.X. Xxxxxx & Company Limited and Majendie
Charlton Securities Ltd.;
c. "Applicable Legislation" means the provisions of the statutes of Canada and
its provinces, and the regulations under those statutes, relating to trust
indentures or to the rights, duties and obligations of trustees and of
corporations under trust indentures, to the extent that such provisions are
at the time in force and applicable to this Indenture;
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d. "Business Day" means any day which is not Saturday or Sunday or a legal
holiday in the City of Calgary, Alberta;
e. "Common Shares" means fully paid and non-assessable common shares of the
Corporation as presently constituted and except where the context hereof
otherwise requires, includes Common Shares issued or to be issued in
accordance with the exercise of Special Warrants;
f. "Corporation's Auditors" means a firm of chartered accountants duly
appointed as auditors of the Corporation;
g. "Counsel" means a barrister or solicitor or a firm of barristers and
solicitors retained by the Trustee or retained by the Corporation and
acceptable to the Trustee;
h. "Current Market Price" means at any date the weighted average closing price
at which the Common Shares have been traded on The Alberta Stock Exchange
during the 30 consecutive Trading Days ending one Trading Day before such
date;
i. "director" means a director of the Corporation for the time being and,
unless otherwise specified herein, reference to action "by the directors"
means action by the directors of the Corporation as a board or, whenever
duly empowered, action by any committee of such board;
j. "Effective Date" means December 13, 1996;
k. "Exercise Date" means, with respect to any Special Warrant, the date on
which the Warrant Certificate representing such Special Warrant is
surrendered for exercise, or otherwise automatically exercised, in
accordance with Article 3;
l. "Expiry Date" means the earlier of:
i. five (5) business days after the day upon which a receipt for a
Prospectus or an Order has been obtained from each of the Securities
Commissions; and
ii. the twelve (12) month anniversary of the Effective Date;
m. "extraordinary resolution" has the meaning set forth in section 7.11;
n. "Filing Jurisdictions" means the provinces of Alberta and British Columbia;
o. "Order" means an order of a Securities Commission that permits the Common
Shares and Purchase Warrants issuable upon the exercise of the Special
Warrants to be freely tradeable;
p. "person" means an individual, body corporate, partnership, trust, trustee,
executor, administrator, legal representative or any unincorporated
organization;
q. "Prospectus" means a final prospectus, and any amendments thereto, which
qualifies the proposed distribution of Common Shares and Purchase Warrants
upon the exercise of Special Warrants;
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r. "Purchase Warrants" means the warrants created and authorized by and
issuable under the warrant indenture dated as of December 13, 1996, between
the Corporation and Montreal Trust Company of Canada, two such warrants
entitling the holder thereof, subject to the terms and conditions therein
provided, to acquire one Common Share at a price of $2.50 per share on or
before 4:30 p.m. (Calgary time) on the first anniversary of the Effective
Date or at a price of $2.88 per share on or before 4:30 p.m. (Calgary time)
on the second anniversary of the Effective Date;
s. "Sale Proceeds" means the aggregate amount of subscription funds paid on
issuance of the Special Warrants, being $2.10 per Special Warrant issued;
t. "Securities Commissions" means, collectively, the securities commissions or
similar regulatory authorities in the Filing Jurisdictions;
u. "Shareholder" means a holder of record of one or more Common Shares;
v. "Special Warrants" means the special warrants issued and certified
hereunder and for the time being outstanding entitling the holder to
acquire one Common Share and one Purchase Warrant;
w. "Special Warrant Indenture", "Indenture", "herein", "hereby", "hereof" and
similar expressions mean and refer to this indenture and any other
indenture, deed or instrument supplemental hereto, and the expressions
"Article", "section", "subsection" and "paragraph" followed by a number,
letter or both mean and refer to the specified article, section, subsection
or paragraph of this Indenture;
x. "Time of Expiry" means 4:30 p.m. (Calgary time) on the Expiry Date;
y. "Trading Day" means, with respect to a stock exchange, a day on which such
exchange is open for the transaction of business and, with respect to the
over-the-counter market, means a day on which The Alberta Stock Exchange is
open for the transaction of business;
z. "Trustee" means Montreal Trust Company of Canada or its successors from
time to time in the trust hereby created;
aa. "United States" and "U.S. Person" have the meaning given to such terms
under Regulation S of the U.S. Securities Act. For purposes of Regulation
S, "United States" means the United States of America, its territories and
possessions, any state of the United States and the District of Columbia.
"U.S. Person" includes, with certain exceptions, (i) any natural person
resident in the United States; (ii) any partnership or corporation
organized or incorporated under the laws of the United States; (iii) any
estate of which any executor or administrator is a U.S. Person; (iv) any
trust of which any trustee is a U.S. Person; (v) an agency or branch of a
foreign entity located in the United States; (vi) any non-discretionary
account or similar account (other than an estate or trust) held by a dealer
or other fiduciary for the benefit or account of a U.S. Person; (vii) any
discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary organized, incorporated or (if an
individual) resident in the United States; and (viii) any partnership or
corporation if (a) organized or incorporated under the laws of any
jurisdiction other than the United States and (b) formed by a U.S. Person
principally for the purposes of investing in securities not registered
under the U.S. Securities Act;
ab. "U.S. Securities Act" means the United States Securities Act of 1933, as
amended;
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ac. "Warrant Agency" means the principal offices of the Trustee in the cities
of Calgary or Vancouver or such other place as may be designated in
accordance with subsection ;
ad. "Warrant Certificate" means a certificate issued on or after the Effective
Date to evidence Special Warrants;
ae. "Warrantholders", or "holders" without reference to Common Shares or
Purchase Warrants, means the persons who are registered holders of Special
Warrants;
af. "Warrantholders' Request" means an instrument signed in one or more
counterparts by Warrantholders entitled to acquire in the aggregate not
less than 25% of the aggregate number of Common Shares which could be
acquired pursuant to all Special Warrants then unexercised and outstanding,
requesting the Trustee to take some action or proceeding specified therein;
ag. "Warrant Register" means the register maintained by the Trustee for the
Special Warrants; and
ah. "written order of the Corporation", "written request of the Corporation",
"written consent of the Corporation" and "certificate of the Corporation"
mean, respectively, a written order, request, consent and certificate
signed in the name of the Corporation by its Chairman, President, Chief
Financial Officer or a Vice-President, and may consist of one or more
instruments so executed.
1.2 Gender and Number
Unless herein otherwise expressly provided or unless the context otherwise
requires, words importing the singular include the plural and vice versa and
words importing gender include all genders.
1.3 Interpretation not Affected by Headings, etc.
The division of this Indenture into articles and sections, 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
or the Special Warrants.
1.4 Day not a Business Day
In the event that any day on or before which any action is required to be taken
hereunder is not a Business Day, then such action shall be required to be taken
at or before the requisite time on the next succeeding day that is a Business
Day.
1.5 Time of the Essence
Time shall be of the essence hereof and of the Special Warrants issued
hereunder.
1.6 Currency
Except as otherwise stated, all dollar amounts herein are expressed in Canadian
currency.
1.7 Applicable Law
This Indenture and the Warrant Certificates shall be construed in accordance
with the laws of the Province of Alberta and the federal laws of Canada
applicable therein and shall be treated in all respects as Alberta contracts.
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ARTICLE 2
ISSUE OF SPECIAL WARRANTS
2.1 Issue of Special Warrants
a. Up to 3,809,524 Special Warrants are hereby created and authorized to be
issued.
b. From time to time and at any time, upon the written direction of the
Corporation signed by any one of its directors or officers, the Trustee
shall issue and register the Special Warrants in the names and
denominations as specified in such direction, and will certify and deliver
the same in accordance with such direction.
c. The Warrant Certificates (including all replacements issued in accordance
with this Indenture) shall be substantially in the form set out in Schedule
"A" hereto, shall be dated as of the Effective Date, shall bear such
distinguishing letters and numbers as the Corporation may, with the
approval of the Trustee, prescribe, and shall be issuable in any
denomination excluding fractions.
d. The Warrant Certificates and the Special Warrants represented thereby shall
be registered, together with the name and address of the registered holder
thereof, in the Warrant Register maintained by the Trustee.
2.2 Form and Terms of Special Warrants
a. Each Special Warrant authorized to be issued hereunder shall entitle the
holder thereof, upon exercise, or upon automatic exercise as provided for
in section 3.9, to acquire one Common Share and one Purchase Warrant,
subject to adjustment in accordance with Article 4, at any time after the
Effective Date and until the Time of Expiry at no additional cost to the
holder.
b. No fractional Special Warrants shall be issued or otherwise provided for
hereunder.
c. The number of Common Shares and Purchase Warrants which may be acquired
pursuant to the Special Warrants may be adjusted in the event and in the
manner specified in Article 4.
2.3 Warrantholder not a Shareholder
Except as provided for in subsection 4.2.c, nothing in this Indenture or in the
holding of a Special Warrant or Warrant Certificate or otherwise, shall, in
itself, confer or be construed as conferring upon a Warrantholder any right or
interest whatsoever as a Shareholder or as any other shareholder of the
Corporation, 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 Corporation, or the right to receive dividends and other distributions.
2.4 Special Warrants to Rank Pari Passu
All Special Warrants shall rank pari passu, whatever may be the actual date of
issue thereof.
2.5 Signing of Warrant Certificates
The Warrant Certificates shall be signed by any one director or officer of the
Corporation and need not be under seal. The signature of any such director or
officer may be mechanically reproduced in facsimile and Warrant Certificates
bearing such facsimile signatures shall be binding upon the Corporation as if
they had
6
been manually signed by such director or officer. Notwithstanding that
any person whose manual or facsimile signature appears on any Warrant
Certificate as a director or officer may no longer hold office at the date of
such Warrant Certificate or at the date of certification or delivery thereof,
any Warrant Certificate signed as aforesaid shall, subject to section , be valid
and binding upon the Corporation and the holder thereof shall be entitled to the
benefits of this Indenture.
2.6 Certification by the Trustee
a. No Warrant Certificate shall be issued or, if issued, shall be valid for
any purpose or entitle the holder to the benefit hereof until it has been
certified by manual signature by or on behalf of the Trustee in the form of
the certificate set out in Schedule "A" hereto, and such certification by
the Trustee upon any Warrant Certificate shall be conclusive evidence as
against the Corporation that the Warrant Certificate so certified has been
duly issued hereunder and that the holder is entitled to the benefits
hereof.
b. The certification of the Trustee on a Warrant Certificate issued hereunder
shall not be construed as a representation or warranty by the Trustee as to
the validity of this Indenture or the Warrant Certificate (except the due
certification thereof) and the Trustee shall in no respect be liable or
answerable for the use made of the Warrant Certificate or any of them or of
the consideration therefor except as otherwise specified herein.
2.7 Issue in Substitution for Warrant Certificates Lost, etc.
a. In case any Warrant Certificate becomes mutilated or is lost, destroyed or
stolen, the Corporation, subject to applicable law, shall issue and
thereupon the Trustee shall certify and deliver a new Warrant Certificate
of like tenor as the one mutilated, lost, destroyed or stolen in exchange
for and in place of and upon cancellation of such mutilated Warrant
Certificate, or in lieu of and in substitution for such lost, destroyed or
stolen Warrant Certificate, and the substitute Warrant Certificate shall be
in a form approved by the Trustee, and the Special Warrants evidenced
thereby shall be entitled to the benefits hereof and shall rank equally in
accordance with its terms with all other Special Warrants issued or to be
issued hereunder.
b. The applicant for the issue of a new Warrant Certificate pursuant to this
section shall bear the cost of the issue thereof and in case of loss,
destruction or theft shall furnish, as a condition precedent to the issue
thereof, to the Trustee such evidence of ownership and of the loss,
destruction or theft of the Warrant Certificate so lost, destroyed or
stolen as shall be satisfactory to the Trustee, in its sole discretion, and
such applicant may also be required to furnish an indemnity or security in
amount and form satisfactory to the Trustee, in its sole discretion, and
shall pay the reasonable charges of the Trustee in connection therewith.
2.8 Exchange of Warrant Certificates
a. One or more Warrant Certificates representing any number of Special
Warrants may, upon compliance with the reasonable requirements of the
Trustee, be exchanged for another Warrant Certificate or Warrant
Certificates representing the same aggregate number of Special Warrants as
represented under the Warrant Certificate or Warrant Certificates so
exchanged.
b. Warrant Certificates may be exchanged only at the Warrant Agency or at any
other place that is designated by the Corporation with the approval of the
Trustee. Any Warrant Certificate tendered for exchange shall be cancelled
and surrendered by the Warrant Agency to the Trustee.
7
2.9 Charges for Exchange
Except as otherwise provided herein, the Warrant Agency may charge to the holder
requesting an exchange a reasonable sum for each new Warrant Certificate issued
in exchange for a Warrant Certificate(s), and payment of such charges and
reimbursement of the Trustee or the Corporation for any and all stamp taxes or
governmental or other charges required to be paid shall be made by such holder
as a condition precedent to such exchange.
2.10 Transfer and Ownership of Special Warrants
a. The Special Warrants may only be transferred on the Warrant Register kept
at the Warrant Agency by the holder or its legal representatives or its
attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee only upon surrendering to the Trustee at the
Warrant Agency the Warrant Certificate or Warrant Certificates representing
the Special Warrants to be transferred, with the transfer form thereon duly
completed and executed, signed by the Warrantholder or by the duly
appointed legal representative thereof or a duly authorized attorney,
together with evidence of authority of any such legal representative or
attorney and, if required by the transfer form, with such signature
properly guaranteed, and upon compliance with:
i. the conditions herein;
ii. such reasonable requirements as the Trustee may prescribe; and
iii. all applicable securities legislation and requirements of regulatory
authorities relating to the transferability of the Special Warrants or
restrictions thereon;
and such transfer shall be duly noted in the Warrant Register by the
Trustee. Upon compliance with such requirements, the Trustee shall issue to
the transferee a Warrant Certificate representing the Special Warrants
transferred. Such new Warrant Certificate shall be sent by first class mail
or held for pick up by the transferee in accordance with the instructions
given on the transfer form and, if no such instructions are given, shall be
sent by first class mail to the address of the transferee appearing on the
form of transfer. If less than all the Special Warrants represented by a
Warrant Certificate are transferred, the Trustee shall issue a new Warrant
Certificate representing those Special Warrants not transferred in the same
name as the name appearing on the Warrant Certificate surrendered for
transfer. Such new Warrant Certificate shall be sent by first class mail or
held for pick up in accordance with instructions given on the transfer form
and, if no instructions are given, shall be sent by first class mail to the
address of the holder of the Special Warrants surrendered for transfer
appearing on the Warrant Register.
b. The Special Warrants and the Common Shares and Purchase Warrants issuable
upon exercise thereof have not been registered under the U.S. Securities
Act, or the securities laws of any state of the United States, and may not
be transferred in the United States or to a U.S. Person unless the Special
Warrants and the Common Shares and Purchase Warrants have been 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. The Trustee shall not permit the transfer of any
Special Warrants unless the holder thereof has provided to the Trustee and
the Corporation an opinion of counsel, or other evidence, in form
reasonably satisfactory to the Corporation, to the effect that such
transfer of Special Warrants does not require registration under the U.S.
Securities Act or any applicable state laws and regulations governing the
offer and sale of securities.
8
c. The Corporation and the Trustee will deem and treat the registered owner of
any Special Warrant as the beneficial owner thereof for all purposes and
neither the Corporation nor the Trustee shall be affected by any notice to
the contrary.
d. Subject to the provisions of this Indenture and applicable law,
Warrantholders shall be entitled to the rights and privileges attaching to
the Special Warrants and the issue of Common Shares and Purchase Warrants
upon the exercise of Special Warrants by any Warrantholder in accordance
with the terms and conditions herein contained shall discharge all
responsibilities of the Corporation and the Trustee with respect to such
Special Warrants and neither the Corporation nor the Trustee shall be bound
to inquire into the title of any such holder.
ARTICLE 3
EXERCISE OF SPECIAL WARRANTS
3.1 Holders Eligible to Exercise Special Warrants
The Special Warrants may not be exercised within the United States by or on
behalf of any U.S. Person or person in the United States unless the Common
Shares and Purchase Warrants 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 requirement is available. Any person who
voluntarily exercises a Special Warrant shall provide to the Trustee either:
a. i. written certification that it is not a U.S. Person and that such
Special Warrant is not being exercised within the United States or on
behalf of, or for the account or benefit of, a U.S. Person or a person
in the United States; or
ii. a written opinion of counsel or other evidence satisfactory to the
Corporation to the effect that the Common Shares and Purchase Warrants
have been registered under the U.S. Securities Act and applicable
state securities laws or are exempt from registration thereunder; or
b. written certification that it was an original subscriber for Special
Warrants who was a U.S. Person at the time of the acquisition of such
Special Warrants and the representations and warranties made by such person
in connection with the acquisition of such Special Warrants remain true and
correct on the date of exercise.
3.2 Method of Exercise of Special Warrants
a. The holder of any Special Warrant may exercise the right conferred on such
holder to acquire Common Shares and Purchase Warrants by surrendering,
after the Effective Date and prior to the Time of Expiry, to the Warrant
Agency the Warrant Certificate with a duly completed and executed exercise
form.
A Warrant Certificate with the duly completed and executed exercise form
referred to in this subsection 3.2.a shall be deemed to be surrendered only
upon personal delivery thereof or, if sent by mail or other means of
transmission, upon actual receipt thereof at, in each case, the Warrant
Agency.
b. Any exercise form referred to in subsection shall be signed by the
Warrantholder or by the duly appointed legal representative thereof or a
duly authorized attorney, with evidence of authority of any such legal
representative or attorney attached thereto, and, if required by the
exercise form, with such signature properly guaranteed, and shall specify:
9
i. the equal number of Common Shares and Purchase Warrants which the
holder wishes to acquire (being not more than those which the holder
is entitled to acquire pursuant to the Warrant Certificate(s)
surrendered);
ii. the person or persons in whose name or names such Common Shares and
Purchase Warrants are to be issued with respective Social Insurance
Numbers;
iii. the address or addresses of such person(s); and
iv. the number of Common Shares and Purchase Warrants to be issued to each
such person if more than one is so specified.
If any of the Common Shares and Purchase Warrants subscribed for are to be
issued to a person or persons other than the Warrantholder, each such
person shall also complete and deliver, together with the exercise form
signed by the Warrantholder, an exercise form in the form attached to the
Warrant Certificate and the Warrantholder shall pay to the Corporation or
the Warrant Agency on behalf of the Corporation, all applicable transfer or
similar taxes and the Corporation shall not be required to issue or deliver
certificates evidencing Common Shares and Purchase Warrants unless or until
such Warrantholder shall have paid to the Corporation, or the Warrant
Agency on behalf of the Corporation, the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has been
paid or that no tax is due.
c. In connection with the exercise of Special Warrants by any U.S. Person or
person in the United States that was not the original subscriber for the
Special Warrants or transferee in accordance with section 2.10.b, the
Corporation may, in its sole discretion, require that such Warrantholder
deliver in connection with such exercise an opinion of counsel addressed to
the Corporation and the Trustee in form and substance satisfactory to the
Corporation, that no violation of the registration provisions of the U.S.
Securities Act or the securities laws of any state would result from the
exercise of the Special Warrants by such U.S. Person.
d. In connection with the exchange of Warrant Certificates and exercise of
Special Warrants and in compliance with such other terms and conditions
hereof as may be required, the Corporation has appointed the principal
offices of the Trustee in Calgary and Vancouver as the agency at which
Warrant Certificates may be surrendered for exchange or at which Special
Warrants may be exercised. The Corporation may from time to time designate
alternate or additional places as the Warrant Agency and shall give notice
to the Trustee of any change of the Warrant Agency.
3.3 Effect of Exercise of Special Warrants
a. Upon compliance by the holder of any Warrant Certificate with the
provisions of section or upon the automatic exercise of Special Warrants
pursuant to section 3.9, and subject to section 3.4, the Common Shares and
Purchase Warrants subscribed for shall be deemed to have been issued and
the person or persons to whom such Common Shares and Purchase Warrants are
to be issued shall be deemed to have become the holder or holders of record
of such Common Shares and Purchase Warrants on the Exercise Date unless the
transfer registers of the Corporation shall be closed on such date, in
which case the Common Shares and Purchase Warrants subscribed for shall be
deemed to have been issued, and such person or persons deemed to have
become the holder or holders of record of such Common Shares and Purchase
Warrants, on the date on which such transfer registers are reopened.
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b. Within five Business Days after the Exercise Date with respect to a Special
Warrant, the Corporation shall cause to be mailed to the person or persons
in whose name or names the Common Shares and Purchase Warrants so
subscribed for have been issued, as specified in the subscription, at the
address specified in such subscription or, if so specified in such
subscription, cause to be delivered to such person or persons at the
Warrant Agency where the Warrant Certificate was surrendered, a certificate
or certificates for the appropriate number of Common Shares and Purchase
Warrants subscribed for. In the absence of instructions to the contrary,
such certificates shall be issued in the name of the registered holder of
the surrendered Warrant Certificate and shall be mailed by first class mail
to the address of such Warrantholder appearing on the Warrant Register.
3.4 Partial Exercise of Special Warrants; Fractions
a. The holder of any Special Warrants may acquire a number of Common Shares
and Purchase Warrants less than the number which the holder is entitled to
acquire pursuant to the surrendered Warrant Certificate(s). In the event of
any exercise of a number of Special Warrants less than the number which the
holder is entitled to exercise, the holder of the Special Warrants upon
such exercise shall also be entitled to receive, without charge therefor, a
new Warrant Certificate(s) in respect of the balance of the Special
Warrants represented by the surrendered Warrant Certificate(s) not then
exercised. In the absence of instructions to the contrary, such certificate
shall be issued in the name of the registered holder of the surrendered
Warrant Certificate and shall be mailed by first class mail to the address
of such Warrantholder appearing on the Warrant Register.
b. To the extent that the Warrantholder is entitled to receive on the exercise
or partial exercise thereof a fraction of a Common Share or a Purchase
Warrant, such right may only be exercised in respect of such fraction in
combination with another Special Warrant or other Special Warrants which in
the aggregate entitles the Warrantholder to receive a whole number of
Common Shares or Purchase Warrants.
If the Warrantholder is not able to or elects not to, combine Special
Warrants so as to be entitled to acquire a whole number of Common Shares
and Purchase Warrants, the Corporation shall make an appropriate cash
settlement. However, in respect of any Warrantholder, the Corporation shall
only be required to make such a cash adjustment once and for one Special
Warrant and no more. The amount of the cash adjustment with respect to the
Common Share shall be equal to the fraction of the Common Share to which
the Warrantholder would be entitled multiplied by the Current Market Price.
The amount of the cash adjustment with respect to the Purchase Warrants
shall be equal to the fraction of a Purchase Warrant to which the
Warrantholder would be entitled multiplied by the amount by which the
Current Market Price exceeds $2.10.
3.5 Common Share and Purchase Warrant Certificates
At the instruction of the Corporation, Common Shares and Purchase Warrants
issued to U.S. Persons pursuant to exercise of the Special Warrants may bear a
legend in substantially the following form:
"The securities represented hereby have not been registered under the
United States Securities Act of 1933, as amended (the "Securities Act") or
applicable state securities laws. The holder hereof, by purchasing such
securities, agrees for the benefit of the Corporation that such securities
may be offered, sold or otherwise transferred only (a) to the Corporation,
(b) outside the United States in accordance with Rule 904 of Regulation S
under the Securities Act (c) pursuant to the exemption from registration
under the Securities Act provided by Rule 144
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thereunder, if applicable, or (d) pursuant to another exemption from
registration after providing a satisfactory legal opinion to the
Corporation. Delivery of this certificate does not constitute "good
delivery" in settlement of transactions on The Alberta Stock Exchange. A
new certificate, bearing no legend, delivery of which will constitute "good
delivery" in settlement of transactions on The Alberta Stock Exchange, may
be obtained from Montreal Trust Company of Canada upon delivery of this
certificate and duly executed declaration, in form satisfactory to Montreal
Trust Company of Canada and the Corporation, to the effect that the sale of
the securities represented hereby is being made in compliance with Rule 904
of Regulation S under the Securities Act, together with such other
documentation as may be requested by the Corporation."
and may also contain such other legends as may be required by applicable
securities regulatory requirements, authorities or stock exchanges including,
without limitation, The Alberta Stock Exchange.
3.6 Expiration of Special Warrants
Subject to section 3.9, immediately after the Time of Expiry, all rights under
any Special Warrant in respect of which the right of acquisition herein and
therein provided for shall not have been exercised shall cease and terminate and
such Special Warrant shall be void and of no further force or effect.
3.7 Cancellation of Surrendered Special Warrants
All Warrant Certificates surrendered to the Warrant Agency pursuant to sections
2.7, 2.8, 2.10, 3.2 or 5.1 shall be returned to the Trustee for cancellation
and, after the expiry of any period of retention prescribed by law, destroyed by
the Trustee. Upon request by the Corporation, the Trustee shall furnish to the
Corporation a destruction certificate identifying the Warrant Certificates so
destroyed and the number of Special Warrants evidenced thereby.
3.8 Accounting and Recording
a. The Trustee shall promptly account to the Corporation with respect to
Special Warrants exercised. Any securities or other instruments from time
to time received by the Trustee shall be received in trust for, and shall
be segregated and kept apart by the Trustee in trust for, the Corporation.
b. The Trustee shall record the particulars of Special Warrants exercised
which shall include the names and addresses of the persons who become
holders of Common Shares and Purchase Warrants on exercise and the Exercise
Date. Within five Business Days of each Exercise Date, the Trustee shall
provide such particulars in writing to the Corporation.
3.9 Automatic Exercise on Behalf of Warrantholder by the Trustee
At the Time of Expiry, the rights of all holders of Special Warrants not then
exercised to acquire Common Shares and Purchase Warrants shall be exercised by
the Warrant Agency on behalf of such Warrantholders without any further action
on the part of the Warrantholders and the Common Shares and Purchase Warrants
issuable thereby shall be deemed to be issued to the Warrantholders at such
time.
Upon such automatic exercise, the Corporation shall cause to be mailed to each
Warrantholder within five business days of the Time of Expiry a certificate or
certificates representing the appropriate number of Common Shares and Purchase
Warrants.
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3.10 Securities Restrictions
Notwithstanding anything herein contained, Common Shares and Purchase Warrants
will only be issued pursuant to any Special Warrant in compliance with the
securities laws of any applicable jurisdiction and, without limiting the
generality of the foregoing, in the event that Special Warrants are exercised
pursuant to section prior to the issuance of a receipt for the Prospectus by the
Securities Commissions in each of the Filing Jurisdictions, the certificates
representing the Common Shares and Purchase Warrants issued thereby will bear
such legend as may, in the opinion of counsel of the Corporation, be necessary
in order to avoid a violation of any securities laws of any province in Canada
or of the United States or to comply with the requirements of any stock exchange
on which the Common Shares are listed, provided that, if at any time, in the
opinion of counsel to the Corporation, such legends are no longer necessary in
order to avoid a violation of any such laws, or the holder of any such legended
certificate, at the holder's expense, provides the Corporation with evidence
satisfactory in form and substance to the Corporation (which may include an
opinion of counsel satisfactory to the Corporation) to the effect that such
holder is entitled to sell or otherwise transfer such Common Shares or Purchase
Warrants in a transaction in which such legends are not required, such legended
certificate may thereafter be surrendered to the Corporation in exchange for a
certificate which does not bear such legend.
ARTICLE 4
ADJUSTMENT OF NUMBER OF COMMON SHARES AND PURCHASE WARRANTS
4.1 Failure to Clear Prospectus
If a receipt for the Prospectus or an Order is not obtained on or prior to the
date which is one hundred and fifty (150) days from the Effective Date (the
"Qualification Date") from each of the Securities Commissions in the Filing
Jurisdictions, each Warrantholder shall be entitled to receive, upon exercise or
automatic exercise of each Special Warrant, notwithstanding section 2.2, 1.1
Common Shares and 1.1 Purchase Warrants, subject to further adjustment in
accordance with this Article 4 hereof at anytime after the Qualification Date
until the Time of Expiry at no additional cost to the holder.
4.2 Adjustment of Number of Common Shares and Purchase Warrants
The acquisition rights in effect at any date attaching to the Special Warrants
shall be subject to adjustment from time to time as follows:
a. if and whenever at any time from the date hereof and prior to the Time of
Expiry, the Corporation shall:
i. subdivide, redivide or change its outstanding Common Shares into a
greater number of shares; or
ii. reduce, combine or consolidate its outstanding Common Shares into a
smaller number of shares;
the number of Common Shares and Purchase Warrants obtainable under
each Special Warrant shall be adjusted immediately after the effective
date of such subdivision, redivision, change, reduction, combination
or consolidation, by multiplying the number of Common Shares
theretofore obtainable on the exercise thereof by a fraction of which
the numerator shall be the total number of Common Shares outstanding
immediately after such date and the denominator shall be the total
number of Common Shares outstanding immediately prior to such date.
Such adjustment shall be made successively whenever any event referred
to in this subsection 4.2.a shall occur;
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b. if and whenever at any time from the date hereof and prior to the Time of
Expiry, there is a reclassification of the Common Shares or a capital
reorganization of the Corporation other than as described in subsection
4.2.a or a consolidation, amalgamation or merger of the Corporation with or
into any other body corporate, trust, partnership or other entity, or a
sale or conveyance of the property and assets of the Corporation as an
entirety or substantially as an entirety to any other body corporate,
trust, partnership or other entity, any Warrantholder who has not exercised
its right of acquisition prior to the effective date of such
reclassification, reorganization, consolidation, amalgamation, merger, sale
or conveyance, upon the exercise of such right thereafter, shall be
entitled to receive and shall accept, in lieu of the number of Common
Shares and Purchase Warrants then sought to be acquired by it, the number
of shares or other securities or property of the Corporation or of the body
corporate, trust, partnership or other entity resulting from such merger,
amalgamation or consolidation, or to which such sale or conveyance may be
made, as the case may be, that such Warrantholder would have been entitled
to receive on such reclassification, reorganization, consolidation,
amalgamation, merger, sale or conveyance, if, on the record date or the
effective date thereof, as the case may be, the Warrantholder had been the
registered holder of the number of Common Shares and Purchase Warrants
sought to be acquired by it. If determined appropriate by the Trustee to
give effect to or to evidence the provisions of this subsection 4.2.b, the
Corporation, its successor, or such purchasing body corporate, partnership,
trust or other entity, as the case may be, shall, prior to or
contemporaneously with any such reclassification, reorganization,
consolidation, amalgamation, merger, sale or conveyance, enter into an
indenture which shall provide, to the extent possible, for the application
of the provisions set forth in this Indenture with respect to the rights
and interests thereafter of the Warrantholders to the end that the
provisions set forth in this Indenture shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, with respect to any
shares, other securities or property to which a Warrantholder is entitled
on the exercise of its acquisition rights thereafter. Any indenture entered
into between the Corporation and the Trustee pursuant to the provisions of
this subsection 4.2.b shall be a supplemental indenture entered into
pursuant to the provisions of Article 8 hereof. Any indenture entered into
between the Corporation, any successor to the Corporation or such
purchasing body corporate, partnership, trust or other entity and the
Trustee shall provide for adjustments which shall be as nearly equivalent
as may be practicable to the adjustments provided in this section 4.2 and
which shall apply to successive reclassifications, reorganizations,
amalgamations, consolidations, mergers, sales or conveyances;
c. if and whenever at any time from the date hereof and prior to the Time of
Expiry, the Corporation fixes a record date for the making of a
distribution to all or substantially all the holders of its outstanding
Common Shares or Purchase Warrants of dividends or any other distribution
of cash, property or securities, including without limitation: (i) shares
of any class; (ii) rights, options or warrants, or (iii) evidences of its
indebtedness, or (iv) assets, including shares of other corporations, any
Warrantholder who has not exercised its right of acquisition prior to such
record date, upon the exercise of such right thereafter, shall be entitled
to receive, without further payment to the Corporation, and shall accept in
addition to the number of Common Shares and Purchase Warrants to which it
was theretofore entitled upon such exercise, the kind and amount of shares
and other securities or property which such holder would have been entitled
to receive as a result of such distribution, if, on the record date it had
been the registered holder of the number of Common Shares and Purchase
Warrants to which it was theretofore entitled upon exercise; and
d. the adjustments provided for in this Article 4 in the number of Common
Shares and Purchase Warrants and classes of securities which are to be
received on the exercise of Special Warrants are cumulative. After any
adjustment pursuant to this section 4.2, the term "Common Shares" and
"Purchase Warrants" where used in this Indenture shall be interpreted to
mean securities of
14
any class or classes which, as a result of such adjustment and all prior
adjustments pursuant to this section 4.2, the Warrantholder is entitled to
receive upon the exercise of its Special Warrant, and the number of Common
Shares and Purchase Warrants indicated by any exercise made pursuant to a
Special Warrant shall be interpreted to mean the number of Common Shares
and Purchase Warrants or other property or securities a Warrantholder is
entitled to receive, as a result of such adjustment and all prior
adjustments pursuant to this section 4.2, upon the full exercise of a
Special Warrant.
4.3 Entitlement to Shares on Exercise of Special Warrant
All shares or warrants of any class or other securities which a Warrantholder is
at the time in question entitled to receive on the exercise of its Special
Warrant, whether or not as a result of adjustments made pursuant to this Article
4, shall, for the purposes of the interpretation of this Indenture, be deemed to
be shares or securities which such Warrantholder is entitled to acquire pursuant
to such Special Warrant.
4.4 No Adjustment for Stock Options
Notwithstanding anything to the contrary, in this Article 4, no adjustment shall
be made in the acquisition rights attached to the Special Warrants if the issue
of Common Shares and Purchase Warrants is being made pursuant to this Indenture
or pursuant to any stock option or stock purchase plan for directors, officers,
employees or consultants of the Corporation in force from time to time.
4.5 Determination by Corporation's Auditors
In the event of any question arising with respect to the adjustments provided
for in this Article , such question shall be conclusively determined by the
Corporation's Auditors who shall have access to all necessary records of the
Corporation, and such determination shall be binding upon the Corporation, the
Trustee, all Warrantholders and all other persons interested therein.
4.6 Proceedings Prior to any Action Requiring Adjustment
As a condition precedent to the taking of any action which would require an
adjustment in any of the acquisition rights pursuant to any of the Special
Warrants, including the number of Common Shares and Purchase Warrants which are
to be received upon the exercise thereof, the Corporation shall take any
corporate action which may, in the opinion of Counsel, be necessary in order
that the Corporation has unissued and reserved in its authorized capital and may
validly and legally issue as fully paid and non-assessable all the shares and
warrants which the holders of such Special Warrants are entitled to receive on
the full exercise thereof in accordance with the provisions hereof.
4.7 Certificate of Adjustment
The Corporation shall from time to time immediately after the occurrence of any
event which requires an adjustment or readjustment as provided in this Article
4, deliver a certificate of the Corporation to the Trustee specifying the nature
of the event requiring the same and the amount of the adjustment necessitated
thereby and setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based, which certificate shall be supported
by a certificate of the Corporation's Auditors verifying such calculation.
4.8 Notice of Special Matters
The Corporation covenants with the Trustee that, so long as any Special Warrant
remains outstanding, it will give notice to the Trustee and to the
Warrantholders of its intention to fix a record date that is prior to the
15
Expiry Date for the issuance of rights, options or warrants (other than the
Special Warrants) to all or substantially all the holders of its outstanding
Common Shares. Such notice shall specify the particulars of such event and the
record date for such event, provided that the Corporation shall only be required
to specify in the notice such particulars of the event as shall have been fixed
and determined on the date on which the notice is given. The notice shall be
given in each case not less than 14 days prior to such applicable record date.
4.9 No Action after Notice
The Corporation covenants with the Trustee that it will not close its transfer
books or take any other corporate action which might deprive the holder of a
Special Warrant of the opportunity to exercise its right of acquisition pursuant
thereto during the period of 14 days after the giving of the certificate or
notices set forth in sections 4.6 and 4.7.
4.10 Other Action
In case the Corporation, after the date hereof, shall take any action affecting
the Common Shares and Purchase Warrants other than actions described in
subsection 4.2, which in the opinion of the directors of the Corporation would
materially affect the rights of the Warrantholders, the number of Common Shares
and Purchase Warrants which may be acquired upon exercise of the Special
Warrants shall be adjusted in such manner and at such time, by action of the
director, as they determine, acting reasonably, to be equitable in the
circumstances.
4.11 Participation by Special Warrantholder
No adjustments shall be made pursuant to this Article 4 if the Warrantholders
are entitled to participate in any event described in this Article 4 on the same
terms, mutatis mutandis, as if the Warrantholders had exercise their Special
Warrants prior to, or on the effective date or record date of, such event.
4.12 Protection of Trustee
Except as provided in section 9.2, the Trustee:
a. shall not at any time be under any duty or responsibility to any
Warrantholder to determine whether any facts exist which may require any
adjustment contemplated by section 4.2 or with respect to the nature or
extent of any such adjustment when made, or with respect to the method
employed in making the same;
b. shall not be accountable with respect to the validity or value (or the kind
or amount) of any Common Shares, Purchase Warrants or of any shares 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;
c. shall not be responsible for any failure of the Corporation to issue,
transfer or deliver Common Shares and Purchase Warrants or certificates for
the same upon the surrender of any Special Warrants for the purpose of the
exercise of such rights or to comply with any of the covenants contained in
this Article 4; and
d. shall not incur any liability or responsibility whatsoever or be in any way
responsible for the consequences of any breach on the part of the
Corporation of any of the representations, warranties or covenants herein
contained or of any acts of the directors, officers, employees, agents or
servants of the Corporation.
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ARTICLE 5
RIGHTS OF THE CORPORATION AND COVENANTS
5.1 Optional Purchases by the Corporation
The Corporation may from time to time purchase by private contract or otherwise
any of the Special Warrants. Any such purchase shall be made at the lowest price
or prices at which, in the opinion of the directors, such Special Warrants are
then obtainable, plus reasonable costs of purchase, and may be made in such
manner, from such persons and on such other terms as the Corporation, in its
sole discretion, may determine. Any Warrant Certificates representing the
Special Warrants purchased pursuant to this Section shall forthwith be delivered
to and cancelled by the Trustee. No Special Warrants shall be issued in
replacement thereof.
5.2 General Covenants
The Corporation covenants with the Trustee that so long as any Special Warrants
remain outstanding:
a. it shall reserve and keep available a sufficient number of Common Shares
for the purpose of enabling it to satisfy its obligations to issue Common
Shares upon the exercise of the Special Warrants and Purchase Warrants;
b. it shall cause the Common Shares and Purchase Warrants and the certificates
representing the Common Shares and Purchase Warrants acquired pursuant to
the exercise of the Special Warrants to be duly issued and delivered in
accordance with the Warrant Certificates and the terms hereof;
c. all Common Shares which shall be issued upon exercise of the right to
acquire provided for herein and in the Warrant Certificates shall be duly
and validly issued as fully paid and non-assessable;
d. it shall maintain its corporate existence and carry on and conduct and will
cause to be carried on and conducted its business in the same manner as
heretofore carried on and conducted;
e. it shall use its best efforts to ensure that all Common Shares outstanding
or issuable from time to time (including without limitation the Common
Shares issuable on the exercise of the Special Warrants and the Purchase
Warrants) are listed and posted for trading on The Alberta Stock Exchange
or such other stock exchange as may be applicable;
f. it shall make all requisite filings under applicable Canadian securities
legislation including those necessary to remain a reporting issuer not in
default in each of the Filing Jurisdictions and those necessary to report
the exercise of the right to acquire Common Shares and Purchase Warrants
pursuant to Special Warrants;
g. it shall use its best efforts to obtain a receipt for the Prospectus, as
soon as practicable but in any event on or before the Qualification Date
(as such term is defined in section 4.1) from each of the Securities
Commissions so that the resale of the Common Shares and Purchase Warrants
will not be subject to the prospectus requirements or any "hold period"
under applicable securities legislation in such Filing Jurisdictions;
h. it shall give written notice to the Trustee and to each holder of Special
Warrants of the issuance of the receipts for a Prospectus, together with a
commercial copy of the Prospectus, as soon as practicable but, in any
event, not later than five Business Days after the issuance of such
receipts;
17
i. if a receipt for the Prospectus dated on or before the Qualification Date
is not obtained from each of the Securities Commissions, it shall continue
to use, until the Expiry Date, its best efforts to obtain a receipt for the
Prospectus from the Securities Commissions in each of the Filing
Jurisdictions; and
j. generally, it will well and truly perform and carry out all of the acts or
things to be done by it as provided in this Indenture or as the Trustee may
reasonably require for the better accomplishing and effecting of the
intentions and provisions of this Indenture.
5.3 Trustee's Remuneration and Expenses
The Corporation covenants that it will pay to the Trustee from time to time
reasonable remuneration for its services hereunder 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
its 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
hereunder shall be finally and fully performed, except any such expense,
disbursement or advance as may arise out of or result from the Trustee's
negligence, wilful misconduct or bad faith.
5.4 Securities Qualification Requirements
a. If, in the opinion of Counsel, any instrument (not including a prospectus
except the Prospectus required to be filed with the Securities Commissions
under subsection 5.2.g) is required to be filed with, or any permission is
required to be obtained from, any governmental authority in Canada or any
other step is required under any federal or provincial law of Canada before
any Common Shares or Purchase Warrants which a Warrantholder is entitled to
acquire pursuant to the exercise of any Special Warrant may properly and
legally be issued upon due exercise thereof and thereafter traded, without
further formality or restriction, the Corporation covenants that it will
take such required action.
b. The Corporation or, if required by the Corporation, the Trustee will give
notice of the issue of Common Shares and Purchase Warrants pursuant to the
exercise of Special Warrants, in such detail as may be required, to the
Securities Commission in each of the Filing Jurisdictions in which there is
legislation or regulation permitting or requiring the giving of any such
notice in order that such issue of Common Shares and Purchase Warrants and
the subsequent disposition of the Common Shares and Purchase Warrants so
issued will not be subject to the prospectus qualification requirements of
such legislation or regulation.
5.5 Performance of Covenants by Trustee
If the Corporation shall fail to perform any of its covenants contained in this
Warrant Indenture, the Trustee may notify the Warrantholders of such failure on
the part of the Corporation or may itself perform any of the covenants capable
of being performed by it but, subject to section 9.2, shall be under no
obligation to perform such covenants or to notify the Warrantholders of such
performance by it. All sums expended or advanced by the Trustee in so doing
shall be repayable as provided in section 5.3. No such performance, expenditure
or advance by the Trustee shall relieve the Corporation of any default hereunder
or of its continuing obligations under the covenants herein contained.
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ARTICLE 6
ENFORCEMENT
6.1 Suits by Warrantholders
All or any of the rights conferred upon any Warrantholder by any of the terms of
the Warrant Certificates or the Indenture or both may be enforced by the
Warrantholder by appropriate 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
Warrantholders.
6.2 Immunity of Shareholders, etc.
The Trustee and, by the acceptance of the Warrant Certificates and as part of
the consideration for the issue of the Special Warrants, the Warrantholders
hereby waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any incorporator or any past, present or
future shareholder, director, officer, employee or agents of the Corporation or
any successor corporation on any covenant, agreement, representation or warranty
by the Corporation contained herein or in the Warrant Certificates.
6.3 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 or shareholders of the Corporation or any successor corporation or any
of the past, present or future officers, employees or agents of the Corporation
or any successor corporation, but only the property of the Corporation or any
successor corporation shall be bound in respect hereof.
6.4 Waiver of Default
Upon the happening of any default of any covenant or obligation of the
Corporation provided for herein:
a. the holders of not less than 66 2/3% of the aggregate number of Special
Warrants then outstanding shall have power (in addition to the powers
exercisable by extraordinary resolution as provided in section 7.10) by
requisition in writing to instruct the Trustee to waive any default
hereunder and the Trustee shall thereupon waive the default upon such terms
and conditions as shall be prescribed in such requisition; or
b. the Trustee shall have power to waive any default hereunder upon such terms
and conditions as the Trustee may deem advisable, if, in the Trustee's
opinion, the same shall have been cured or adequate provision made
therefor;
provided that no delay or omission of the Trustee or of the Warrantholders to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver of any such default or
acquiescence therein and provided further that no act or omission either of the
Trustee or of the Warrantholders in the premises shall extend to or be taken in
any manner whatsoever to affect any subsequent default hereunder of the rights
resulting therefrom.
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ARTICLE 7
MEETINGS OF WARRANTHOLDERS
7.1 Right to Convene Meetings
The Trustee may at any time and from time to time, and shall on receipt of a
written request of the Corporation or of a Warrantholders' Request and upon
being indemnified and funded to its reasonable satisfaction by the Corporation
or by the Warrantholders signing such Warrantholders' Request against the cost
which may be incurred in connection with the calling and holding of such
meeting, convene a meeting of the Warrantholders. In the event of the Trustee
failing to so convene a meeting within seven days after receipt of such written
request of the Corporation or such Warrantholders' Request and indemnity and
funding being given as aforesaid, the Corporation or such Warrantholders, as the
case may be, may convene such meeting. Every such meeting shall be held in the
City of Calgary or at such other place as may be approved or determined by the
Trustee and approved by the Corporation, acting reasonably.
7.2 Notice
At least ten days prior notice of any meeting of Warrantholders shall be given
to the Warrantholders in the manner provided for in section 10.2 and a copy of
such notice shall be sent by mail to the Trustee (unless the meeting has been
called by the Trustee), the Agents and to the Corporation (unless the meeting
has been called by the Corporation). Such notice shall state the time when and
the place where the meeting is to be held, shall state briefly the general
nature of the business to be transacted thereat and shall contain such
information as is reasonably necessary to enable the Warrantholders to make a
reasoned decision on the matter, but it shall not be necessary for any such
notice to set out the terms of any resolution to be proposed or any of the
provisions of this Article 7.
7.3 Chairman
An individual (who need not be a Warrantholder) designated in writing by the
Trustee shall be chairman of the meeting and if no individual is so designated,
or if the individual so designated is not present within 15 minutes from the
time fixed for the holding of the meeting, the Warrantholders present in person
or by proxy shall choose an individual present to be chairman.
7.4 Quorum
Subject to the provisions of section 7.11, at any meeting of the Warrantholders
a quorum shall consist of Warrantholders present in person or by proxy and
entitled to purchase at least 25% of the aggregate number of Common Shares which
could be acquired pursuant to all the then outstanding Special Warrants,
provided that at least two persons entitled to vote thereat are personally
present. If a quorum of the Warrantholders shall not be present within 30
minutes from the time fixed for holding any meeting, the meeting, if summoned by
Warrantholders or on a Warrantholders' Request, shall be dissolved; but in any
other case the meeting shall be adjourned to the same day in the next week
(unless such day is not a Business Day, in which case it shall be adjourned to
the next following Business Day) at the same time and place and no notice of the
adjournment need be given. Any business may be brought before or dealt with at
an adjourned meeting which might have been dealt with at the original meeting in
accordance with the notice calling the same. No business shall be transacted at
any meeting unless a quorum be present at the commencement of business. At the
adjourned meeting the Warrantholders present in person or by proxy shall form a
quorum and may transact the business for which the meeting was originally
convened, notwithstanding that they may not be entitled to acquire at least 25%
of the aggregate number of Common Shares which may be acquired pursuant to all
then outstanding Special Warrants.
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7.5 Power to Adjourn
The chairman of any meeting at which a quorum of the Warrantholders is present
may, with the consent of the meeting, adjourn any such meeting, and no notice of
such adjournment need be given except such notice, if any, as the meeting may
prescribe.
7.6 Show of Hands
Every question submitted to a meeting shall be decided in the first place by a
majority of the votes given on a show of hands except that votes on an
extraordinary resolution shall be given in the manner hereinafter provided. At
any such meeting, unless a poll is duly demanded as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.
7.7 Poll and Voting
On every extraordinary resolution, and on any other question submitted to a
meeting and after a vote by show of hands when demanded by the chairman or by
one or more of the Warrantholders acting in person or by proxy and entitled to
acquire in the aggregate at least 5% of the aggregate number of Common Shares
which could be acquired pursuant to all the Special Warrants then outstanding, a
poll shall be taken in such manner as the chairman shall direct. Questions other
than those required to be determined by extraordinary resolution shall be
decided by a majority of the votes cast on the poll.
On a show of hands, every person who is present and entitled to vote, whether as
a Warrantholder or as proxy for one or more absent Warrantholders, or both,
shall have one vote. On a poll, each Warrantholder present in person or
represented by a proxy duly appointed by instrument in writing shall be entitled
to one vote in respect of each whole Common Share which he is entitled to
acquire pursuant to the Special Warrant or Special Warrants then held or
represented by it. A proxy need not be a Warrantholder. The chairman of any
meeting shall be entitled, both on a show of hands and on a poll, to vote in
respect of the Special Warrants and proxies, if any, held or represented by him.
7.8 Regulations
The Trustee, or the Corporation with the approval of the Trustee, may make and
vary such regulations not contrary to the provisions of this Indenture as it
shall think fit for:
a. the setting of the record date for a meeting for the purpose of determining
Warrantholders entitled to receive notice of and to vote at the meeting;
b. the issue of voting certificates by any bank, trust company or other
depositary satisfactory to the Trustee stating that the Warrant
Certificates specified therein have been deposited with it by a named
person and will remain on deposit until after the meeting, which voting
certificate shall entitle the persons named therein to be present and vote
at any such meeting and at any adjournment thereof or to appoint a proxy or
proxies to represent them and vote for them at any such meeting and at any
adjournment thereof in the same manner and with the same effect as though
the persons so named in such voting certificates were the actual bearers of
the Warrant Certificates specified therein;
c. the deposit of voting certificates and instruments appointing proxies at
such place and time as the Trustee, the Corporation or the Warrantholders
convening the meeting, as the case may be, may in the notice convening the
meeting direct;
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d. the deposit of voting certificates and instruments appointing proxies at
some approved place or places other than the place at which the meeting is
to be held and enabling particulars of such instruments appointing proxies
to be mailed, or telecopied before the meeting to the Corporation or to the
Trustee at the place where the same is to be held and for the voting of
proxies so deposited as though the instruments themselves were produced at
the meeting;
e. the form of the instrument of proxy; and
f. generally for the calling of meetings of Warrantholders and the conduct of
business thereat.
Any regulations so made shall be binding and effective and the votes given in
accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as a Warrantholder, or be entitled to vote or be present at the meeting in
respect thereof (subject to section 7.9), shall be Warrantholders or their
counsel, or proxies of Warrantholders.
7.9 Corporation, the Agents and Trustee May be Represented
The Corporation, the Agents and the Trustee, by their respective directors,
employees and officers, and the Counsel for the Corporation, for the Agents and
for the Trustee may attend any meeting of the Warrantholders. The Corporation
and the Trustee shall not be entitled to vote thereat, whether in respect of any
Special Warrants held by them or otherwise. The Agents shall be entitled to vote
only in respect of Special Warrants held by them.
7.10 Powers Exercisable by Extraordinary Resolution
In addition to all other powers conferred upon them by any other provisions of
this Indenture or by law, the Warrantholders at a meeting shall, subject to the
provisions of section 7.11, have the power, exercisable from time to time by
extraordinary resolution:
a. to agree to any modification, abrogation, alteration, compromise or
arrangement of the rights of Warrantholders or the Trustee in its capacity
as trustee hereunder or on behalf of the Warrantholders against the
Corporation, whether such rights arise under this Indenture or the Warrant
Certificates or otherwise;
b. to amend, alter or repeal any extraordinary resolution previously passed or
sanctioned by the Warrantholders;
c. to direct or to authorize the Trustee to enforce any of the covenants on
the part of the Corporation contained in this Indenture or the Warrant
Certificates or to enforce any of the rights of the Warrantholders in any
manner specified in such extraordinary resolution or to refrain from
enforcing any such covenant or right;
d. to waive, and to direct the Trustee to waive, any default on the part of
the Corporation in complying with any provisions of this Indenture or the
Warrant Certificates either unconditionally or upon any conditions
specified in such extraordinary resolution;
e. to restrain any Warrantholder from taking or instituting any suit, action
or proceeding against the Corporation for the enforcement of any of the
covenants on the part of the Corporation in this Indenture or the Warrant
Certificates or to enforce any of the rights of the Warrantholders;
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f. to direct any Warrantholder who, as such, has brought any suit, action or
proceeding to stay or to discontinue or otherwise to deal with the same
upon payment of the costs, charges and expenses reasonably and properly
incurred by such Warrantholder in connection therewith;
g. to assent to any change in or omission from the provisions contained in the
Warrant Certificates and this Indenture or any ancillary or supplemental
instrument which may be agreed to by the Corporation, and to authorize the
Trustee to concur in and execute any ancillary or supplemental indenture
embodying the change or omission;
h. with the consent of the Corporation, such consent not to be unreasonably
withheld, to remove the Trustee or its successor in office and to appoint a
new trustee or trustees to take the place of the Trustee so removed;
i. to assent to any compromise or arrangement with any creditor or creditors
or any class or classes of creditors, whether secured or otherwise, and
with holders of any shares or other securities of the Corporation; and
j. to sanction any scheme for the reconstruction or reorganization of the
Corporation or for the consolidation, amalgamation or merger of the
Corporation with any other corporation or for the sale, leasing, transfer
or other disposition of all or substantially all the property and assets of
the Corporation.
7.11 Meaning of Extraordinary Resolution
a. The expression "extraordinary resolution" when used in this Indenture
means, subject as hereinafter provided in this section 7.11 and in section
7.14, a resolution proposed at a meeting of Warrantholders duly convened
for that purpose and held in accordance with the provisions of this Article
7 at which there are present in person or by proxy Warrantholders entitled
to acquire at least 25% of the aggregate number of Common Shares which may
be acquired pursuant to all the then outstanding Special Warrants and
passed by the affirmative votes of Warrantholders entitled to acquire not
less than 66 2/3% of the aggregate number of Common Shares which may be
acquired pursuant to all the then outstanding Special Warrants represented
at the meeting and voted on the poll upon such resolution.
b. If, at the meeting at which an extraordinary resolution is to be
considered, Warrantholders entitled to acquire at least 25% of the
aggregate number of Common Shares which may be acquired pursuant to all the
then outstanding Special Warrants are not present in person or by proxy
within 30 minutes after the time appointed for the meeting, then the
meeting, if convened by Warrantholders or on a Warrantholders' Request,
shall be dissolved; but in any other case it shall stand adjourned to such
day, being not less than 15 or more than 60 days later, and to such place
and time as may be appointed by the chairman. Not less than ten days' prior
notice shall be given of the time and place of such adjourned meeting in
the manner provided for in section 10.2. Such notice shall state that at
the adjourned meeting the Warrantholders present in person or by proxy
shall form a quorum but it shall not be necessary to set forth the purposes
for which the meeting was originally called or any other particulars. At
the adjourned meeting the Warrantholders present in person or by proxy
shall form a quorum and may transact the business for which the meeting was
originally convened and a resolution proposed at such adjourned meeting and
passed by the requisite vote as provided in subsection 7.11 shall be an
extraordinary resolution within the meaning of this Indenture
notwithstanding that Warrantholders entitled to acquire at least 25% of the
aggregate number of Common Shares which may be acquired pursuant to all the
then outstanding Special Warrants are not present in person or by proxy at
such adjourned meeting.
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c. Votes on an extraordinary resolution shall always be given on a poll and no
demand for a poll on an extraordinary resolution shall be necessary.
7.12 Powers Cumulative
Any one or more of the powers or any combination of the powers in this Indenture
stated to be exercisable by the Warrantholders by extraordinary resolution or
otherwise may be exercised from time to time and the exercise of any one or more
of such powers or any combination of powers from time to time shall not be
deemed to exhaust the right of the Warrantholders to exercise such power or
powers or combination of powers then or thereafter from time to time.
7.13 Minutes
Minutes of all resolutions and proceedings at every meeting of Warrantholders
shall be made and duly entered in books to be provided from time to time for
that purpose by the Trustee at the expense of the Corporation, and any such
minutes as aforesaid, if signed by the chairman or the secretary of the meeting
at which such resolutions were passed or proceedings had shall be prima facie
evidence of the matters therein stated and, until the contrary is proved, every
such meeting in respect of the proceedings of which minutes shall have been made
shall be deemed to have been duly convened and held, and all resolutions passed
thereat or proceedings taken shall be deemed to have been duly passed and taken.
7.14 Instruments in Writing
All actions which may be taken and all powers that may be exercised by the
Warrantholders at a meeting held as provided in this Article 7 may also be taken
and exercised by Warrantholders entitled to acquire at least 66 2/3% of the
aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding Special Warrants by an instrument in writing signed in one or more
counterparts by such Warrantholders in person or by attorney duly appointed in
writing, and the expression "extraordinary resolution" when used in this
Indenture shall include an instrument so signed.
7.15 Binding Effect of Resolutions
Every resolution and every extraordinary resolution passed in accordance with
the provisions of this Article 7 at a meeting of Warrantholders shall be binding
upon all the Warrantholders, whether present at or absent from such meeting, and
every instrument in writing signed by Warrantholders in accordance with section
7.14 shall be binding upon all the Warrantholders, whether signatories thereto
or not, and each and every Warrantholder and the Trustee (subject to the
provisions for indemnity herein contained) shall be bound to give effect
accordingly to every such resolution and instrument in writing.
7.16 Holdings by Corporation Disregarded
In determining whether Warrantholders holding Warrant Certificates evidencing
the entitlement to acquire the required number of Common Shares are present at a
meeting of Warrantholders for the purpose of determining a quorum or have
concurred in any consent, waiver, extraordinary resolution, Warrantholders'
Request or other action under this Indenture, Special Warrants owned legally or
beneficially by the Corporation or any subsidiary of the Corporation shall be
disregarded in accordance with the provisions of section 10.9.
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ARTICLE 8
SUPPLEMENTAL INDENTURES
8.1 Provision for Supplemental Indentures for Certain Purposes
From time to time the Corporation (when authorized by action of the directors)
and the Trustee may, subject to the provisions hereof, and they shall, when so
directed in accordance with the provisions hereof, execute and deliver by their
proper officers, indentures or instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more or all of the following purposes:
a. setting forth any adjustments resulting from the application of the
provisions of Article 4.
b. adding to the provisions hereof such additional covenants and enforcement
provisions as, in the opinion of Counsel, are necessary or advisable in the
premises, provided that the same are not in the opinion of the Trustee
prejudicial to the interests of the Warrantholders;
c. giving effect to any extraordinary resolution passed as provided in Article
7;
d. making such 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
Special Warrants on any stock exchange, provided that such provisions are
not, in the opinion of the Trustee, prejudicial to the interests of the
Warrantholders;
e. adding to or altering the provisions hereof in respect of the transfer of
Special Warrants, making provision for the exchange of Warrant
Certificates, and making any modification in the form of the Warrant
Certificates which does not affect the substance thereof;
f. modifying any of the provisions of this Indenture, including relieving the
Corporation from any of the obligations, conditions or restrictions herein
contained, provided that such modification or relief shall be or become
operative or effective only if, in the opinion of the Trustee, such
modification or relief in no way prejudices any of the rights of the
Warrantholders or of the Trustee, and provided further that the Trustee may
in its sole discretion decline to enter into any such supplemental
indenture which in its opinion may not afford adequate protection to the
Trustee when the same shall become operative; and
g. for any other purpose not inconsistent with the terms of this Indenture,
including the correction or rectification of any ambiguities, defective or
inconsistent provisions, errors, mistakes or omissions herein, provided
that in the opinion of the Trustee the rights of the Trustee and of the
Warrantholders are in no way prejudiced thereby.
8.2 Successor Corporations
In the case of the consolidation, amalgamation, merger or transfer of all or
substantially all of the undertaking or assets of the Corporation to another
corporation ("Successor Corporation"), the Successor Corporation resulting from
such consolidation, amalgamation, merger or transfer (if not the Corporation)
shall expressly assume, by supplemental indenture satisfactory in form to the
Trustee and executed and delivered to the Trustee, the due and punctual
performance and observance of each and every covenant and condition of this
Indenture to be performed and observed by the Corporation.
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ARTICLE 9
CONCERNING THE TRUSTEE
9.1 Trust Indenture Legislation
a. If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with a mandatory requirement of Applicable Legislation, such
mandatory requirement shall prevail.
b. The Corporation 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.
9.2 Rights and Duties of Trustee
a. In the exercise of the rights and duties prescribed or conferred by the
terms of this Indenture, the Trustee shall exercise that degree of care,
diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances. No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own wilful misconduct or bad faith.
b. The obligation of the Trustee to commence or continue any act, action or
proceeding for the purpose of enforcing any rights of the Trustee or the
Warrantholders hereunder shall be conditional upon the Warrantholders
furnishing, when required by notice by the Trustee, sufficient funds to
commence or to continue such act, action or proceeding and an indemnity
reasonably satisfactory to the Trustee to protect and to 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 to risk its own funds or otherwise to 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.
c. The Trustee may, before commencing or at any time during the continuance of
any such act, action or proceeding, require the Warrantholders, at whose
instance it is acting, to deposit with the Trustee the Warrant Certificates
held by them, for which Warrant Certificates the Trustee shall issue
receipts.
d. 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, this section 9.2 and
of section 9.3.
9.3 Evidence, Experts and Advisers
a. In addition to the reports, certificates, opinions and other evidence
required by this Indenture, the Corporation 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 Corporation.
b. 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 in statutory declarations, opinions,
reports, written requests, consents, or orders of the Corporation,
certificates of the Corporation 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
26
that such evidence complies with Applicable Legislation and that the
Trustee complies with Applicable Legislation and that the Trustee examines
such evidence and determines that such evidence complies with the
applicable requirements of this Indenture.
c. Whenever it is provided in this Indenture or under Applicable Legislation
that the Corporation shall deposit with the Trustee resolutions,
certificates, reports, opinions, requests, orders or other documents, it is
intended that the trust, accuracy and good faith on the effective date
thereof and the facts and opinions stated in all such documents so
deposited shall, in each and every such case, be conditions precedent to
the right of the Corporation to have the Trustee take the action to be
based thereon.
d. Proof of the execution of an instrument in writing, including a
Warrantholders' Request, by any Warrantholder may be made by the
certificate of a notary public, or other officer with similar powers, that
the person signing such instrument acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution or in any other
manner which the Trustee may consider adequate.
e. The Trustee may employ or retain such Counsel, accountants, 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, and shall not be responsible for
any misconduct or negligence on the part of any such experts or advisers
who have been appointed with due care by the Trustee.
9.4 Documents, Monies, etc. 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 Canadian chartered bank or deposited for
safekeeping with any such bank. Unless herein otherwise expressly provided, any
monies held pending the application or withdrawal thereof under any provisions
of this Indenture may be deposited in the name of the Trustee in the deposit
department of the Trustee or in any Canadian chartered bank at the rate of
interest (if any) then current on similar deposits or, with the consent or at
the written direction of the Corporation, may be: (i) deposited in the deposit
department of the Trustee or any other trust company authorized to accept
deposits under the laws of Canada or a province thereof; or (ii) invested in
short term obligations of the Government of Canada or a province thereof or in
other short term investment grade debt obligations as agreed to by the
Corporation and the Agents. Unless the Corporation shall be in default hereunder
or unless otherwise specifically provided herein, all interest or other income
received by the Trustee in respect of such deposits and investments shall belong
to the Corporation.
9.5 Actions by Trustee to Protect Interest
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 Warrantholders.
9.6 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.
9.7 Protection of Trustee
By way of supplement to the provisions of any law for the time being relating to
trustees, it is expressly declared and agreed as follows:
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a. the Trustee shall not be liable for or by reason of any statements of fact
or recitals in this Indenture or in the Warrant Certificates (except the
representations contained in section 9.9 and in the certificate of the
Trustee on the Warrant Certificates) or be required to verify the same, but
all such statements or recitals are and shall be deemed to be made by the
Corporation;
b. 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;
c. the Trustee shall not be bound to give notice to any person or persons of
the execution hereof; and
d. the Trustee shall not have any liability or responsibility whatever or be
in any way responsible for the consequence of any breach on the part of the
Corporation of any of the covenants herein contained or of any acts of any
directors, officers, employees, agents or servants of the Corporation.
9.8 Replacement of Trustee; Successor by Xxxxxx
a. The Trustee may resign its trust and be discharged from all further duties
and liabilities hereunder, subject to this section 9.8, by giving to the
Corporation not less than 90 days' prior notice in writing or such shorter
prior notice as the Corporation may accept as sufficient. The
Warrantholders by extraordinary resolution shall have power at any time to
remove the existing Trustee and to appoint a new Trustee. In the event of
the Trustee resigning or being removed as aforesaid or being dissolved,
becoming bankrupt, going into liquidation or otherwise becoming incapable
of acting hereunder, the Corporation shall forthwith appoint a new trustee
unless a new trustee has already been appointed by the Warrantholders;
failing such appointment by the Corporation, the retiring Trustee or any
Warrantholder may apply to a justice of the Court of Queen's Bench of the
Province of Alberta on such notice as such justice may direct, for the
appointment of a new trustee; but any new trustee so appointed by the
Corporation or by the Court shall be subject to removal as aforesaid by the
Warrantholders. 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 Province of Alberta and, if required by the Applicable
Legislation for any other provinces, in such other provinces. On any such
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 hereunder.
b. Upon the appointment of a successor trustee, the Corporation shall promptly
notify the Warrantholders thereof in the manner provided for in section
10.2 hereof.
c. Any corporation into or with which the Trustee may be merged or
consolidated or amalgamated, or any corporation resulting therefrom to
which the Trustee shall be a party, 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 such corporation would be eligible for appointment as a
successor trustee under subsection 9.8.a.
d. Any Warrant Certificates certified but not delivered by a predecessor
trustee may be certified by the successor trustee in the name of the
predecessor or successor trustee.
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9.9 Conflict of Interest
a. The Trustee represents to the Corporation that at the time of execution and
delivery hereof no material conflict of interest exists between its role as
a trustee 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 such material conflict of
interest, either eliminate the same or assign its trust hereunder to a
successor trustee approved by the Corporation and meeting the requirements
set forth in subsection 9.8.a. Notwithstanding the foregoing provisions of
this subsection 9.9.a, if any such material conflict of interest exists or
hereafter shall exist, the validity and enforceability of this Indenture
and the Warrant Certificate shall not be affected in any manner whatsoever
by reason thereof.
b. Subject to subsection 9.9.a, the Trustee, in its personal or any other
capacity, may buy, lend upon and deal in securities of the Corporation and
generally may contract and enter into financial transactions with the
Corporation or any subsidiary of the Corporation without being liable to
account for any profit made thereby.
9.10 Indemnity of Trustee
Without limiting any protection or indemnity of the Trustee under any other
provision hereof, or otherwise at law, the Corporation 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 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 or willful misconduct of the Trustee. This provision
shall survive the resignation or removal of the Trustee, or the termination of
this Indenture.
9.11 Acceptance of Trust
This Indenture is entered into with the Trustee for the benefit of, and the
Trustee declares that it holds this Indenture and all rights, interests and
benefits of this Indenture for, such persons, firms and corporations, and each
of them, who are from time to time Warrantholders. The Trustee hereby accepts
the trusts in this Indenture declared and provided for and agrees to perform the
same upon the terms and conditions herein set forth.
9.12 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 Corporation.
9.13 Special Warrant Register
The Trustee shall, at all times while any Special Warrants are outstanding,
maintain, at its principal office in Calgary, Alberta a Register in which shall
be recorded the following information:
(1) the numbers of all outstanding Warrant Certificates, including the
date of issuance;
(2) the numbers of all Warrant Certificates exchanged or exercised,
including the date of exchange or exercise;
(3) the names and addresses of all Warrantholders;
29
(4) the particulars of all transfers of Special Warrants; and
(5) such other information as the Trustee, in its discretion, deems
necessary or advisable.
9.14 Register Open for Inspection
The Register shall be open at all reasonable times on a business day during
business hours for inspection by the Corporation, the Trustee or any
Warrantholder. The Trustee shall, from time to time when requested to do so by
the Corporation in writing, furnish the Corporation with a list of names and
addresses of holders of Special Warrants entered in the Register kept by the
Trustee.
ARTICLE 10
GENERAL
10.1 Notice to the Corporation, the Agents and the Trustee
a. Unless herein otherwise expressly provided, any notice to be given
hereunder to the Corporation, the Agents or the Trustee shall be deemed to
be validly given if delivered or if sent by registered letter, postage
prepaid or telecopy:
If to the Corporation:
Minera Andes Inc.
North 0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx
00000 U.S.A.
Telecopy No: (000) 000-0000
Attention: President
If to the Agents:
X.X. Xxxxxx & Company Limited
Suite 0000, 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxx X.X. Xxxxxxx
-and-
Majendie Charlton Securities Ltd.
0000, 000 - 0xx Xxxxxx X.X.
Calgary, Alberta
T2P 3N3
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx Xxxx
If to the Trustee:
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Montreal Trust Company of Canada
Suite 710, 000 - 0xx Xxxxxx X.X.
Calgary, Alberta
T2P 3S8
Telecopy No.: (000) 000-0000
Attention: Manager, Corporate Trust Department
and any such notice delivered 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 the postmark on such notice or, if
sent by telecopy, on the next Business Day following the date of
transmission, provided that its contents are transmitted and received
completely and accurately.
b. The Corporation or the Trustee, as the case may be, may notify the other in
the manner provided in subsection 10.1.a of a change of address which, from
the effective date of such notice and until changed by like notice, shall
be the address of the Corporation or the Trustee, as the case may be, for
all purposes of this Indenture.
c. 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 Corporation hereunder could reasonably be considered
unlikely to reach its destination, such notice shall be valid and effective
only if it is delivered to the named officer of the party to which it is
addressed or, if it is delivered to such party at the appropriate address
provided in subsection 10.1.a, by telecopy or other means of prepaid,
transmitted and recorded communication.
10.2 Notice to Warrantholders
a. Except as otherwise provided herein, any notice to the Warrantholders under
the provisions of this Indenture shall be valid and effective if sent by
telecopier or ordinary post addressed to such holders at their post office
addresses appearing on the register hereinbefore mentioned and shall be
deemed to have been effectively given on the date of delivery or, if
mailed, five Business Days following actual posting of the notice or, if
sent by telecopy, on the next Business Day following the date of
transmission, provided that its contents are transmitted and received
completely and accurately.
b. If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to the
Warrantholders hereunder could reasonably be considered unlikely to reach
its destination, such notice shall be valid and effective only if it is
delivered personally to such Warrantholders or if delivered to the address
for such Warrantholders contained in the register of Special Warrants
maintained by the Trustee, by telecopy or other means of prepaid
transmitted and recorded communication.
10.3 Ownership and Transfer of Special Warrants
The Corporation and the Trustee may deem and treat the registered owner of any
Special Warrants as the absolute owner thereof for all purposes and the
Corporation and the Trustee shall not be affected by any notice or knowledge to
the contrary except where the Corporation or the Trustee is required to take
notice by statute or by order of a court of competent jurisdiction. A
Warrantholder shall be entitled to the rights evidenced by its Warrant
Certificate free from all equities or rights of set off or counterclaim between
the Corporation and the original or any intermediate holder of the Special
Warrants and all persons may act accordingly and the receipt of any such
Warrantholder for the Common Shares and Purchase Warrants (and such other
property, assets and securities) which may be acquired pursuant thereto (or such
monies as may
31
be payable to such Warrantholders) shall be a good discharge to the Corporation
and the Trustee for the same and neither the Corporation nor the Trustee shall
be bound to inquire into the title of any such holder except where the
Corporation or the Trustee is required to take notice by statute or by order of
a court of competent jurisdiction.
10.4 Evidence of Ownership
a. Upon receipt of a certificate of any bank, trust company or other
depositary satisfactory to the Trustee stating that the Special Warrants
specified therein have been deposited by a named person with such bank,
trust company or other depositary and will remain so deposited until the
expiry of the period specified therein, the Corporation and the Trustee may
treat the person so named as the owner, and such certificate as sufficient
evidence of the ownership by such person of such Special Warrant during
such period, for the purpose of any requisition, direction, consent,
instrument or other document to be made, signed or given by the holder of
the Special Warrant so deposited.
b. The Corporation and the Trustee may accept as sufficient evidence of the
fact and date of the signing of any requisition, direction, consent,
instrument or other document by any person: (i) the signature of any
officer of any bank, trust company, or other depositary satisfactory to the
Trustee as witness of such execution, (ii) the certificate of any notary
public or other officer authorized to take acknowledgments of deeds to be
recorded at the place where such certificate is made that the person
signing acknowledged to him the execution thereof, or (iii) a satisfactory
declaration of a witness of such execution.
10.5 Counterparts
This Indenture may be executed in several counterparts, each of which when so
executed shall be deemed to be an original and such counterparts together shall
constitute one and the same instrument and notwithstanding their date of
execution they shall be deemed to be dated as of the date hereof.
10.6 Satisfaction and Discharge of Indenture
Upon the earlier of:
a. the date by which there shall have been delivered to the Trustee for
exercise or destruction all Warrant Certificates theretofore certified
hereunder; or
b. the Time of Expiry;
and if all certificates representing Common Shares and Purchase Warrants
required to be issued in compliance with the provisions hereof have been issued
and delivered hereunder and all amounts payable hereunder 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 Corporation and upon delivery to the Trustee of a
certificate of the Corporation stating that all conditions precedent to the
satisfaction and discharge of this Indenture have been complied with, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture. Notwithstanding the foregoing, the indemnities provided to the
Trustee by the Corporation hereunder shall remain in full force and effect and
survive the termination of this Indenture.
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10.7 Successors
All the covenants and provisions of this Indenture by or for the benefit of the
Corporation or the Trustee shall bind and enure to the benefit of their
respective successors and assigns hereunder.
10.8 Sole Benefit of Parties and Warrantholders
Nothing in this Indenture or in the Warrant Certificates, expressed or implied,
shall give or be construed to give to any person other than the parties hereto
and the Warrantholders, as the case may be, any legal or equitable right, remedy
or claim under this Indenture, or under any covenant or provision herein or
therein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and the Warrantholders.
10.9 Common Shares or Special Warrants Owned by the Corporation or its
Subsidiaries - Certificate to be Provided
For the purpose of disregarding any Special Warrants owned legally or
beneficially by the Corporation or any subsidiary of the Corporation in section
7.16, the Corporation shall provide to the Trustee, from time to time, a
certificate of the Corporation setting forth as at the date of such certificate:
a. the names (other than the name of the Corporation) of the registered
holders of Special Warrants which, to the knowledge of the Corporation, are
owned by or held for the account of the Corporation or any subsidiary of
the Corporation; and
b. the number of Special Warrants owned legally or beneficially by the
Corporation or any subsidiary of the Corporation;
and the Trustee, in making the computations in section 7.16, shall be entitled
to rely on such certificate without any additional evidence.
IN WITNESS WHEREOF the parties hereto have executed this Indenture under their
respective corporate seals and the hands of their proper officers in that
behalf.
MINERA ANDES INC.
Per: ____________________________________
MONTREAL TRUST COMPANY OF CANADA
Per: ____________________________________
Per: ____________________________________
THIS IS SCHEDULE "A" to the Special Warrant Indenture made
as of December 13, 1996 between MINERA ANDES INC. and
MONTREAL TRUST COMPANY OF CANADA as Trustee.
-------------------------------------------------------------------------------
THE SPECIAL WARRANTS REPRESENTED BY THIS CERTIFICATE ARE NOT TRANSFERABLE UNTIL
JUNE 14, 1998, EXCEPT PURSUANT TO AN EXEMPTION FROM THE PROSPECTUS REQUIREMENTS
CONTAINED IN THE APPLICABLE SECURITIES LEGISLATION.
SPECIAL WARRANT CERTIFICATE
MINERA ANDES INC.
(A Corporation amalgamated under the laws of the Province of Alberta)
SPECIAL WARRANT
CERTIFICATE NO. ________ _________________ SPECIAL WARRANTS
entitling the holder to acquire,
subject to adjustment, one Common
Share and one Purchase Warrant for
each Special Warrant represented
hereby.
THIS IS TO CERTIFY THAT o (hereinafter referred to as the "holder") is the
registered holder of the number of Special Warrants exercisable to acquire
Common Shares (as hereinafter defined) and Purchase Warrants (as hereinafter
defined) of Minera Andes Inc. (the "Corporation") as set forth in this Special
Warrant Certificate. Each Special Warrant represented hereby entitles the holder
thereof to acquire, for no additional payment to the Corporation, in the manner
and subject to the restrictions and adjustments set forth herein, at any time
and from time to time until 4:30 p.m. (Calgary time) (the "Time of Expiry") on
the date which is the earlier of: (i) five (5) business days after the day upon
which a receipt for a final prospectus to be filed by the Corporation with
respect to the proposed distribution of the Common Shares and Purchase Warrants
upon exercise of the Special Warrants (the "Prospectus") or, alternatively, an
appropriate order that permits the Common Shares and Purchase Warrants issuable
upon exercise of the Special Warrants to be freely tradeable (the "Order"), has
been obtained from the securities commission or similar regulatory authority
(the "Securities Commission") in each of the provinces of Alberta and British
Columbia (the "Filing Provinces"); and (ii) the date which is 12 months
following the Closing Date, (as hereinafter defined) (such earlier date being
referred to as the "Expiry Date") one fully paid and non-assessable common share
(a "Common Share") without nominal or par value of the Corporation, as such
shares were constituted on December 13, 1996, for each Special Warrant
represented hereby, and one common share purchase warrant (a "Purchase Warrant")
created by and issuable under a warrant indenture dated as of December 13, 1996
between the Corporation and Montreal Trust Company of Canada, two Purchase
Warrants entitling the holder thereof, subject to the terms and conditions
therein set forth, to acquire one Common Share of the Corporation at a price of
$2.50 per share on or before 4:30 p.m. (Calgary time) on the first anniversary
of the Effective Date or at a price of $2.88 per share on or before 4:30 p.m.
(Calgary time) on the second anniversary of the Effective Date.
The right to acquire Common Shares and Purchase Warrants hereunder may only be
exercised by the holder within the time set forth above by:
a. duly completing and executing the Exercise Form attached hereto; and
2
2
b. surrendering this Special Warrant certificate to Montreal Trust Company of
Canada (the "Trustee") at the principal offices of the Trustee in the
cities of Calgary or Vancouver. Warrantholders should be aware that if they
voluntarily exercise Special Warrants prior to the issue of a receipt for
the Prospectus by the Alberta and British Columbia Securities Commission,
the Common Shares, Purchase Warrants and Common Shares issuable upon
exercise of Purchase Warrants will be subject to resale restrictions.
These Special Warrants may 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 these Special Warrants, the person or persons in whose name or
names the Common Shares and Purchase Warrants issuable upon exercise of the
Special Warrants are to be issued shall be deemed for all purposes (except as
provided in the Indenture hereinafter referred to) to be the holder or holders
of record of such Common Shares and Purchase Warrants and the Corporation has
covenanted that it will (subject to the provisions of the Indenture) cause a
certificate or certificates representing such Common Shares and Purchase
Warrants to be delivered or mailed to the person or persons at the address or
addresses specified in the Exercise Form within five Business Days.
The registered Warrantholder of this Special Warrant certificate may acquire any
lesser number of Common Shares and Purchase Warrants than the number of Common
Shares and Purchase Warrants which may be acquired for the Special Warrants
represented by this Special Warrant Certificate. In such event, the holder shall
be entitled to receive a new Special Warrant Certificate for the balance of the
Common Shares and Purchase Warrants which may be acquired. To the extent that
the Warrantholder is entitled to receive on the exercise or partial exercise
thereof a fraction of a Common Share or a Purchase Warrant, such right may only
be exercised in respect of such fraction in combination with another Special
Warrant or other Special Warrants which in the aggregate entitles the
Warrantholder to receive a whole number of Common Shares or Purchase Warrants.
If the Warrantholder is not able to or elects not to, combine Special Warrants
so as to be entitled to acquire a whole number of Common Shares and Purchase
Warrants, the Corporation shall make an appropriate cash settlement. However, in
respect of any Warrantholder, the Corporation shall only be required to make
such a cash adjustment once and for one Special Warrant and no more. The amount
of the cash adjustment with respect to the Common Share shall be equal to the
fraction of the Common Share to which the Warrantholder would be entitled
multiplied by the Current Market Price (as defined in the Indenture). The amount
of the cash adjustment with respect to the Purchase Warrants shall be equal to
the fraction of a Purchase Warrant to which the Warrantholder would be entitled
multiplied by the amount by which the Current Market Price (as defined in the
Indenture) exceeds $2.10.
Immediately prior to the Time of Expiry, the right of a holder to acquire Common
Shares and Purchase Warrants represented hereby will be exercised by the Trustee
on behalf of the holder and the certificates representing the Common Shares and
Purchase Warrants issued thereby will be mailed to the Warrantholder at the
address for such Warrantholder then appearing on the register of Warrantholders
maintained by the Trustee within five Business Days of the Time of Expiry.
The Special Warrants represented by this certificate are issued under and
pursuant to a Special Warrant Indenture (herein referred to as the "Indenture")
made as of December 13, 1996 (the "Effective Date") between the Corporation and
the Trustee. Reference is made to the Indenture and any instruments supplemental
thereto for a full description of the rights of the holders of the Special
Warrants and the terms and conditions upon which the Special Warrants are, or
are to be, issued and held, with the same effect as if the provisions of the
Indenture and all instruments supplemental thereto were set forth herein. By
acceptance hereof, the holder assents to all provisions of the Indenture. In the
event of a conflict between the provisions of the Special Warrant Certificate
and the Indenture, the provisions of the Indenture shall
3
govern. Capitalized terms used in the Indenture have the meaning herein as
therein, unless otherwise defined.
None of the Special Warrants will be retractable in any circumstance (including,
without limitation, the failure of the Corporation to file the Prospectus) and
the Subscriber will not be entitled to a return of the purchase price for the
Special Warrants purchased by the Subscriber. Upon request, the Corporation will
provide the Warrantholder with a copy of the Indenture, without charge.
In the event that a receipt for the Prospectus, or an Order, is not obtained
from the Securities Commission in each of the Filing Provinces on or prior to
the close of business on the date that is within 150 days of the date hereof,
then the holders of the Special Warrants in each Filing Province in which such
receipt, or Order, has not been obtained, shall be entitled to receive 1.1
Common Shares and 1.1 Purchase Warrants, at no additional cost, for each Special
Warrant exercised. The Corporation covenants to continue to use its best efforts
to obtain a receipt for a Prospectus until the Expiry Time, notwithstanding that
each holder of Special Warrants shall have become entitled to receive 1.1 Common
Shares and 1.1 Purchase Warrants.
The Indenture contains provisions for adjustment of the number and kind of
securities which may be issued on exercise of the Special Warrants in certain
specified circumstances.
The registered holder of this Special Warrant certificate may, at any time prior
to the Expiry Time, upon surrender hereof to the Trustee at its principal
offices in the cities of Calgary or Vancouver exchange this Special Warrant
Certificate for other Special Warrant Certificates entitling the holder to
acquire, in the aggregate, the same number of Common Shares and Purchase
Warrants as may be acquired under this Special Warrant Certificate.
The holding of the Special Warrants evidenced by this Special Warrant
Certificate shall not constitute the holder hereof a shareholder of the
Corporation or entitle the holder to any right or interest in respect thereof
except as expressly provided in the Indenture or in this Special Warrant
Certificate.
The Indenture provides that all holders of Special Warrants shall be bound by
any resolution passed at a meeting of the holders held in accordance with the
provisions of the Indenture and resolutions signed by the holders of Special
Warrants entitled to acquire a specified majority of the Common Shares which may
be acquired pursuant to all then outstanding Special Warrants.
The Special Warrants evidenced by this Special Warrant Certificate may be
transferred on the register kept at the principal offices of the Trustee in
Calgary, Alberta by the registered holder hereof or its legal representatives or
its attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee, only upon compliance with the conditions prescribed
in the Indenture and upon compliance with such reasonable requirements as the
Trustee may prescribe.
This Special Warrant Certificate shall not be valid for any purpose whatever
unless and until it has been certified by or on behalf of the Trustee.
4
Time shall be of the essence hereof. This Special Warrant Certificate shall be
governed by and construed in accordance with the laws of the Province of Alberta
and the federal law applicable therein and shall be treated in all respects as
an Alberta contract.
IN WITNESS WHEREOF the Corporation has caused this Special Warrant Certificate
to be signed by its duly authorized officer as of December _____, 1996.
MINERA ANDES INC.
Per: __________________________________
Xxxxx Xxxxxxx, President
Certified by:
MONTREAL TRUST COMPANY OF CANADA
Trustee
By: _________________________________
TRANSFER OF SPECIAL WARRANTS
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
___________________________________, _________________ Special Warrants of
Minera Andes Inc. registered in the name of the undersigned on the records of
Montreal Trust Company of Canada represented by the Special Warrant Certificate
attached and irrevocably appoints __________________ the attorney of the
undersigned to transfer the said securities on the books or register with full
power of substitution.
If less than all the Special Warrants represented by this Warrant Certificate
are being transferred, the Warrant Certificate representing those Special
Warrants not transferred will be registered in the name appearing on the face of
this Warrant Certificate and such certificates (please check one):
(a) _________ should be sent by first class mail to the following address:
------------------------------------------------------------
------------------------------------------------------------
(b) _________ should be held for pick up at the office of the Trustee at
which this Warrant Certificate is deposited.
DATED the _____ day of __________, 19__.
_____________________________ ______________________________________________
Signature Guaranteed (Signature of Special Warrantholder)
Instructions:
1. Signature of the Special Warrantholder must be the signature of the person
appearing on the face of this Special Warrant Certificate.
2. If the Transfer Form is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any person acting
in a fiduciary or representative capacity, the certificate must be
accompanied by evidence of authority to sign satisfactory to the Trustee
and the Corporation.
3. The signature on the Transfer Form must be guaranteed by an authorized
officer of a chartered bank, trust company or an investment dealer who is a
member of a recognized stock exchange.
4. Special Warrants shall only be transferable in accordance with applicable
laws. The transfer of Special Warrants to a purchaser not resident in a
Filing Jurisdiction may result in the Common Shares and Purchase Warrants
obtained upon the exercise of the Special Warrants (whether after or before
obtaining receipts for a final prospectus relating to the
2
distribution of Common Shares and Purchase Warrants upon exercise of
Special Warrants) not being freely tradeable in the jurisdiction of
residence of the purchaser.
5. The Special Warrants and the Common Shares and Purchase Warrants issuable
upon exercise thereof have not been registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or the
securities laws of any state of the United States, and may not be
transferred in the United States or to a U.S. Person unless the Special
Warrants and the Common Shares and Purchase Warrants have been 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. In connection with any transfer of Special
Warrants, the holder will be required to provide to the Trustee and the
Corporation an opinion of counsel, or other evidence, in form reasonably
satisfactory to the Corporation, to the effect that such transfer of
Special Warrants does not require registration under the U.S. Securities
Act or any applicable state laws and regulations governing the offer and
sale of securities.
OFFICE OF THE TRUSTEE
Montreal Trust Company of Canada
Suite 710, 000 - 0xx Xxxxxx X.X.
Calgary, Alberta
T2P 3S8
Telephone: (000) 000-0000
OR
Montreal Trust Company of Canada
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Telephone: (000) 000-0000
EXERCISE FORM
TO: Minera Andes Inc. and
Montreal Trust Company of Canada
(a) The undersigned hereby exercises the right to acquire __________ Units
(each comprised of one Common Share and one Purchase Warrant of Minera Andes
Inc. as constituted on December 13, 1996 (or such number of other securities or
property to which such Special Warrants entitle the undersigned in lieu thereof
or in addition thereto under the provisions of the Indenture referred to in the
accompanying Special Warrant Certificate) in accordance with and subject to the
provisions of such Indenture.
(b) The Common Shares and Purchase Warrants (or other securities or property)
are to be issued as follows:
Name: ____________________________________________________________________
(print clearly)
Address in full: _________________________________________________________
__________________________________________________________________________
Social Insurance Number: _________________________________________________
Number Units: ____________________________________________________________
Note: If further nominees intended, please attach (and initial) schedule
giving these particulars.
(c) The undersigned hereby represents and warrants to the Corporation that the
undersigned (check one):
(i) __________ it is not a U.S. Person and the Special Warrant is not
being exercised within the United States or on behalf of, or for the account or
benefit of, a U.S. Person or a person in the United States; or
(ii) __________ it was an original subscriber for Special Warrants who was
a U.S. Person at the time of acquisition of such Special Warrants and the
representations and warranties made by the undersigned in connection with the
acquisition of such Special Warrants remain true and correct on the date hereof.
(iii) __________ it has delivered herewith to the Trustee and the
Corporation a written opinion of counsel or other evidence satisfactory to the
Corporation to the effect that the Common Shares and Purchase Warrants have been
registered under the U.S. Securities Act and applicable state securities laws or
are exempt from registration thereunder; or
Such securities (please check one):
(a) __________ should be sent by first class mail to the following address:
______________________________________________________________
______________________________________________________________
2
OR
(b) __________ should be held for pick up at the office of the Trustee at
which this Special Warrant Certificate is deposited.
If the number of Special Warrants exercised are less than the
number of Special Warrants represented hereby, the undersigned requests that
the new Special Warrant Certificate representing the balance of the Special
Warrants be registered in the name of ________________________________________
______________________________________________________________________________
whose address is _____________________________________________________________
Such securities (please check one):
(a) __________ should be sent by first class mail to the following address:
______________________________________________________________
______________________________________________________________
OR
(b) __________ should be held for pick up at the office of the Trustee at
which this Special Warrant Certificate is deposited.
In the absence of instructions to the contrary, the securities
or other property will be issued in the name of or to the holder hereof and will
be sent by first class mail to the last address of the holder appearing on the
register maintained for the Special Warrants.
DATED this ____ day of __________, 199__.
__________________________________ ________________________________________
Signature Guaranteed (Signature of Special Warrantholder)
________________________________________
Print full name
________________________________________
________________________________________
Print full address
Instructions:
1. For the purposes of paragraph (c) above, the following words and phrases
have the following meanings:
"United States" and "U.S. Person" have the meaning given to such terms
under Regulation S of the U.S. Securities Act. For purposes of Regulation
S. "United States" means the United States of America, its territories and
possessions, any statue of the United States and the District of
3
Columbia. "U.S. Person" includes, with certain expectations, (i) any
natural person resident in the United States; (ii) any partnership or
corporation organized or incorporated under the laws of the United States;
(iii) any estate of which any executor or administrator is a U.S. Person;
(iv) any trust of which any trustee is a U.S. Person; (v) any agency or
branch of a foreign entity located in the United States; (vi) any
non-discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary for the benefit or account of a
U.S. Person; (vii) any discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary organized,
incorporated or (if any individual) resident in the United States; and
(viii) any partnership or corporation if (a) organized or incorporated
under the laws of any jurisdiction other than the United States and (b)
formed by a U.S. Person principally for the purposes of investing in
securities not registered under the U.S. Securities Act;
"U.S. Securities Act" means the United States Securities Act of 1933, as
amended;
2. The registered holder may exercise its right to receive Common Shares and
Purchase Warrants by completing this form and surrendering this form and
the Special Warrant Certificate representing the Special Warrants being
exercised to Montreal Trust Company of Canada at its principal offices in
Calgary or Vancouver. Certificates for Common Shares and Purchase Warrants
will be delivered or mailed within five business days after the exercise of
the Special Warrants.
3. If the Exercise Form indicates that Common Shares and Purchase Warrants are
to be issued to a person or persons other than the registered holder of the
Certificate, the signature of such holder of the Exercise Form must be
guaranteed by an authorized officer of a chartered bank, trust company or
an investment dealer who is a member of a recognized stock exchange.
4. If the Exercise Form is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any person acting
in a fiduciary or representative capacity, the certificate must be
accompanied by evidence of authority to sign satisfactory to the Trustee
and the Corporation.
5. If the registered holder exercises its right to receive Common Shares and
Purchase Warrants prior to a receipt for a prospectus being issued by the
applicable securities commission the Common Shares and Purchase Warrants
will be subject to a hold period and may be issued with a legend reflecting
such hold period.
OFFICE OF THE TRUSTEE
Montreal Trust Company of Canada
Suite 710, 000 - 0xx Xxxxxx X.X.
Calgary, Alberta
T2P 3S8
Telephone: (000) 000-0000
OR
Montreal Trust Company of Canada
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Telephone: (000) 000-0000
