EXHIBIT 10.35
WARRANT AGREEMENT
This WARRANT AGREEMENT (the "Agreement"), dated as of June 25, 1999, is
among SUMMO MINERALS CORPORATION, a corporation organized under the laws of the
Province of British Columbia, Canada, (the "Company"), RESOURCE CAPITAL FUND
L.P., a Cayman Islands limited partnership ("RCF") and ST. XXXX MINERALS, INC.,
a Delaware corporation ("St. Xxxx," and together with RCF, the "Holders").
Recitals
A. The Company and Summo USA Corporation, a wholly-owned subsidiary of the
Company, as co-borrowers ("Summo (USA)," with the Company and Summo (USA)
referred to together as "Borrowers"), RCF, as agent and as a lender, and St.
Xxxx, as a lender, have entered into an Amended and Restated Credit Agreement
dated as of June 25, 1999 (the "Credit Agreement"), pursuant to which the
Holders have extended credit to the Borrowers.
B. Pursuant to the Credit Agreement, as a portion of the inducement to the
Holders to extend the credit provided for therein, the Company has agreed to
issue certain warrants as provided herein (the "Warrants") permitting each of
RCF and St. Xxxx, each acting severally and in its sole discretion, to purchase
shares of the no par value common stock of the Company (the "Common Stock"),
with the Common Stock issuable by the Company upon exercise of the Warrants
referred to herein as the "Warrant Shares."
C. The parties intend that capitalized terms used but not defined herein
will have the meanings given to them in the Credit Agreement.
Agreement
NOW, THEREFORE, in consideration of the Holders' extension of credit to
the Borrowers pursuant to the Credit Agreement and of the covenants herein, the
parties hereto agree as follows:
SECTION 1. Warrant Certificates. The Warrants shall be evidenced by two
forms of certificate, as appended hereto as Exhibit A-1 (the "RCF Warrant
Certificate") and Exhibit A-2 (the "St. Xxxx Warrant Certificate") with all such
certificates collectively referred to as the "Warrant Certificates." The
Warrants shall each be in registered form only.
SECTION 2. Execution of Warrant Certificates. Warrant Certificates shall
be signed on behalf of the Company by its Chairman of the Board or its President
or a Vice President and by its Secretary or an Assistant Secretary under its
corporate seal. The seal of the Company shall be impressed on the Warrant
Certificates.
Any Warrant Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Warrant Certificate,
shall be a proper officer of the Company (as provided above) to sign such
Warrant Certificate, although at the date of the execution of this Warrant
Agreement any such person was not such an officer.
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SECTION 3. Registration. The Company shall number and register the Warrant
Certificates in a register as they are issued by the Company. The Company may
deem and treat the registered holder(s) (the words "holders" or "holder" as used
herein meaning the registered holders or registered holder and any transferee of
either of the registered Holders) of the Warrant Certificates as the absolute
owner(s) thereof (notwithstanding any notation of ownership or other writing
thereon made by anyone), for all purposes, and the Company shall not be affected
by any notice to the contrary.
SECTION 4. Registration of Transfers and Exchanges. The Company shall from
time to time register the transfer of any outstanding Warrant Certificates upon
the records to be maintained by it for that purpose, upon surrender thereof
accompanied (if so required by it) by a written instrument or instruments of
transfer duly executed by the registered holder or holders thereof or by the
duly appointed legal representative thereof or by a duly authorized attorney.
Upon any such registration of transfer, a new Warrant Certificate shall be
issued to the transferee(s) and the surrendered Warrant Certificate shall be
canceled by the Company. Canceled Warrant Certificates shall thereafter be
disposed of in a manner satisfactory to the Company.
Warrant Certificates may be exchanged at the option of the holder(s)
thereof, when surrendered to the Company at its office for another Warrant
Certificate or other Warrant Certificates of like tenor and representing in the
aggregate a like number of Warrants. Warrant Certificates surrendered for
exchange shall be canceled by the Company.
SECTION 5. Issuance of Warrants. Concurrently with the execution of
this Agreement, the Company will issue the RCF Warrant and the St. Xxxx
Warrant and deliver them to the respective Holders.
SECTION 6. Terms of Warrants; Exercise of Warrants; Company Repurchase
Rights.
6.1 Terms of Warrants. The Warrants shall be issued on the
following terms, certain of which terms are subject to adjustment as provided in
this Agreement:
a. RCF Warrant.
Number of Shares
of Common Stock: 50,000,000*
Exercise Price: Canadian $0.12/share of
Common Stock*
Exercise Period: The date of this Agreement
through June 25, 2004**
b. St. Xxxx Warrant.
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Number of Shares
of Common Stock: 17,500,000*
Exercise Price: Canadian $0.12/share of
Common Stock*
Exercise Period: The date of this Agreement
through June 25, 2004**
* Subject to adjustment as provided in Section
11 below.
** Not subject to adjustment, even if amounts due
under the Credit Agreement are paid prior to the
Expiry Date.
6.2 Exercise of Warrants.
a. Exercise by Holders. Each Holder, acting severally,
may elect, in its sole discretion, to exercise its respective Warrants, in whole
or in part, at any time and from time to time during the Exercise Period for
such Warrant set forth in Section 6.1, in the manner specified in Paragraph b.
below.
b. General Provisions Regarding Exercise. To exercise
any Warrant, in whole or in part, a Holder shall deliver to the Company during
the Exercise Period for such Warrant (a) the Warrant Certificate or Certificates
for the Warrant being exercised, (b) written notice, in substantially the form
of the Subscription Notice appended hereto as Exhibit B, of such Holder's
election to exercise such Warrant, which notice shall specify the number of
shares of Common Stock to be purchased, the denominations of the share
certificate or certificates desired and the name or names in which such
certificates are to be registered and (c) payment of the Exercise Price with
respect to such shares of Common Stock. Such payment may be made, at the option
of such Holder, by cash, certified or bank cashier's check or wire transfer.
Each exercise of a Warrant shall, upon delivery of all of the foregoing to the
Company before 5:00 p.m. on June 25, 2004, be irrevocable.
Upon such surrender of Warrant Certificates, delivery of a Subscription
Notice and payment of the Exercise Price, the Company shall issue and cause to
be delivered with all reasonable dispatch to or upon the written order of the
Warrant holder and in such name or names as the holder may designate, a
certificate or certificates for the number of full Warrant Shares issuable upon
the exercise of such Warrants together with cash as provided in Section 12, if
applicable, provided, however, that if any consolidation, merger or lease or
sale of assets is proposed to be effected by the Company as described in
subsection (m) of Section 11 hereof, or a tender offer or an exchange offer for
shares of Common Stock of the Company shall be made, upon such surrender of
Warrants and payment of the Exercise Price as aforesaid, the Company shall, as
soon as possible, but in any event not later than two business days thereafter,
issue and cause to be delivered the full number of Warrant Shares issuable upon
the exercise of such Warrants in the manner described in this sentence together
with cash, if applicable, as provided in Section 12. Such certificate or
certificates shall be deemed to have been issued and any person
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so designated to be named therein shall be deemed to have become a holder of
record of such Warrant Shares as of the date of the surrender of such Warrants
and payment of the Exercise Price.
Each Warrant shall be exercisable, at the election of the holder thereof,
either in full or from time to time in part and, in the event that a certificate
evidencing Warrants is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration of
the Warrants, a new certificate evidencing the remaining Warrant or Warrants
will be issued pursuant to the provisions of this Section.
All Warrant Certificates surrendered upon exercise of Warrants shall be
canceled by the Company. Such canceled Warrant Certificates shall then be
disposed of by the Company.
SECTION 7. Payment of Taxes. The Company will pay all documentary stamp
taxes attributable to the initial issuance of Warrant Shares upon the exercise
of Warrants; provided, however, that the Company shall not be required to pay
any tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 8. Mutilated or Missing Warrant Certificates. In case any of the
Warrant Certificates shall be mutilated, lost, stolen or destroyed, the Company
may in its discretion issue in exchange and substitution for and upon
cancellation of the mutilated Warrant Certificate, or in lieu of and
substitution for the Warrant Certificate lost, stolen or destroyed, a new
Warrant Certificate of like tenor and representing an equivalent number of
Warrants, but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction of such Warrant Certificate and indemnity, if
requested, also satisfactory to them. Applicants for such substitute Warrant
Certificates shall also comply with such other reasonable regulations and pay
such other reasonable charges as the Company may prescribe.
SECTION 9. Reservation of Warrant Shares. The Company will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Stock or its authorized and issued Common
Stock held in its treasury, for the purpose of enabling it to satisfy any
obligation to issue Warrant Shares upon exercise of Warrants, the maximum number
of shares of Common Stock which may then be deliverable upon the exercise of all
outstanding Warrants.
The Company or, if appointed, the transfer agent for the Common Stock (the
"Transfer Agent") and every subsequent transfer agent for any shares of the
Company's capital stock issuable upon the exercise of, any Warrant, will be
irrevocably authorized and directed at all times to reserve such number of
authorized shares as shall be required for such purpose. The Company will keep a
copy of this Agreement on file with the Transfer Agent and with every subsequent
transfer agent for any shares of the Company's capital stock issuable upon the
exercise of any Warrant. The Company will supply such Transfer Agent with duly
executed
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certificates for such purposes and will provide or otherwise make available any
cash which may be payable as provided in Section 12. The Company will furnish
such Transfer Agent a copy of all notices of adjustments and certificates
related thereto, transmitted to each holder pursuant to Section 13 hereof.
Before taking any action which would cause an adjustment pursuant to
Section 11 hereof to reduce the Exercise Price below the then par value (if any)
of the Warrant Shares, the Company will take any corporate action which may, in
the opinion of its counsel (which may be counsel employed by the Company), be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares at the Exercise Price as so adjusted.
The Company covenants that all Warrant Shares which are issued upon
exercise of Warrants will, upon issue, be fully paid, nonassessable, free of
preemptive rights and free from all taxes, liens, charges and security interests
with respect to the issue thereof.
SECTION 10. Stock Exchange Listing; Free Tradeability of Warrant Shares.
The Company will from time to time take all action which may be necessary so
that the Warrant Shares, immediately upon their issuance upon the exercise of
Warrants, will be listed on the Toronto Stock Exchange (or other such exchange
on which the Common Stock is traded) and, subject to any applicable statutory
hold period, tradeable without restriction by the holder thereof immediately
upon receipt.
SECTION 11. Adjustment of Exercise Price and Number of Warrant Shares
Issuable. The Exercise Price applicable to each Warrant and the number of
Warrant Shares issuable upon the exercise of each Warrant are subject to
adjustment from time to time upon the occurrence of the events enumerated in
this Section 11. For purposes of this Section 11, "Common Stock" means shares,
now or hereafter authorized, of any class of common stock of the Company and any
other stock of the Company, however designated, that has the right (subject to
any prior rights of any class or series of preferred stock) to participate in
any distribution of the assets or earnings of the Company without limit as to
per share amount.
(a) Adjustment for Change in Capital Stock.
If the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or
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(5) issues by reclassification of its Common Stock any shares of its
capital stock;
then, the Exercise Price in effect immediately prior to such action shall
be proportionately adjusted so that the holder of any Warrant thereafter
exercised may receive the aggregate number and kind of shares of capital
stock of the Company which it would have owned immediately following such
action if such Warrant had been exercised immediately prior to such
action.
The adjustment shall become effective immediately after the record
date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or
reclassification.
If after an adjustment a holder of a Warrant may, upon exercise of
the Warrant, receive shares of two or more classes of capital stock of the
Company, the Company shall determine the allocation of the adjusted
Exercise Price between the classes of capital stock. After such
allocation, the exercise privilege and the Exercise Price of each class of
capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) Adjustment for Rights Issue.
If the Company distributes any rights, options or warrants to all
holders of its Common Stock entitling them for a period expiring within 60
days after the record date mentioned below to purchase shares of Common
Stock at a price per share less than the current Market Price per share on
that record date, each Exercise Price shall be adjusted in accordance with
the formula:
O + N x P
-----
E' = E x M
-------
O + N
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
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M = the current Market Price per share of Common Stock on the
record date, with "Market Price" meaning the closing price on
the last day preceding the date of adjustment on which Common
Stock traded.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to
receive the rights, options or warrants. If at the end of the period
during which such rights, options or warrants are exercisable, not all
rights, options or warrants shall have been exercised, the Exercise Price
shall be immediately readjusted to what it would have been if "N" in the
above formula had been the number of shares actually issued.
(c) Adjustment for Other Distributions.
If the Company distributes to all holders of its Common Stock any of
its assets or debt securities or any rights or warrants to purchase debt
securities, assets or other securities of the Company, each Exercise Price
shall be adjusted in accordance with the formula:
E' = E x M - F
-----
M
where:
E' = the adjusted Exercise Price.
E = the current Exercise Price.
M = the current Market Price per share of Common Stock on the
record date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of
Common Stock. The Board of Directors shall determine the fair
market value.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
distribution.
This subsection (c) does not apply to cash dividends or cash
distributions paid out of consolidated current or retained earnings as
shown on the books of the Company prepared in accordance with generally
accepted accounting principles. Also, this subsection does not apply to
rights, options or warrants referred to in subsection (b) of this Section
11.
(d) Adjustment for Common Stock Issue.
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If the Company issues shares of Common Stock for a consideration per
share less than the current Market Price per share on the date the Company
fixes the offering price of such additional shares, each Exercise Price
shall be adjusted in accordance with the formula:
P
--
E' = E x O + M
-----
A
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such additional shares.
P = the aggregate consideration received for the issuance of
such additional shares.
M = the current Market Price per share of Common Stock on the
date the Company fixes the offering price of such additional
shares.
A = the number of shares of Common Stock outstanding immediately
after the issuance of such additional shares.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(1) any of the transactions described in subsections (b) and (c) of
this Section 11;
(2) the exercise of Warrants, or the conversion or exchange of other
securities convertible or exchangeable for Common Stock;
(3) Common Stock issued to the Company's employees under bona fide
incentive stock option agreements entered into in accordance with the
policies of the applicable securities regulatory bodies, and approved by
the holders of Common Stock when required by law;
(4) Common Stock issued upon the exercise of rights or warrants
issued to the holders of Common Stock;
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(5) Common Stock issued to shareholders of any person which merges
into the Company in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger; or
(6) Common Stock issued in a bona fide public offering in which an
investment dealer has been retained as agent or underwriter.
(e) Adjustment for Convertible Securities Issue.
If the Company issues any securities convertible into or
exchangeable for Common Stock (other than securities issued in
transactions described in subsections (b) and (c) of this Section 11) for
a consideration per share of Common Stock initially deliverable upon
conversion or exchange of such securities less than the current Market
Price per share on the date of issuance of such securities, each Exercise
Price shall be adjusted in accordance with this formula:
P
--
E' = E x O + M
-----
O + D
where:
E' = the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares of Common Stock outstanding immediately
prior to the issuance of such securities.
P = the aggregate consideration received for the issuance of such
securities.
M = the current Market Price per share of Common Stock on the
date of issuance of such securities.
D = the maximum number of shares of Common Stock deliverable
upon conversion or in exchange for such securities at the
initial conversion or exchange rate.
The adjustment shall be made successively whenever any such issuance
is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion or exchange
of such securities have not been issued when such securities are no longer
outstanding, then the Exercise Price shall promptly be readjusted to the
Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion or exchange of such
securities.
This subsection (e) does not apply to:
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(1) convertible securities issued to shareholders of any person
which merges into the Company, or with a subsidiary of the Company, in
proportion to their stock holdings of such person immediately prior to
such merger, upon such merger, or
(2) convertible securities issued in a bona fide public offering in
which an investment dealer has been retained as agent or underwriter.
(f) Consideration Received.
For purposes of any computation respecting consideration received
pursuant to subsections (d) and (e) of this Section 11, the following
shall apply:
(1) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash, provided that in no
case shall any deduction be made for any commissions, discounts or other
expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
(2) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other
than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Board of Directors of the Company
(irrespective of the accounting treatment thereof), whose determination
shall be conclusive, and described in a Board resolution, a copy of which
shall be mailed to each holder; and
(3) in the case of the issuance of securities convertible into or
exchangeable for shares, the aggregate consideration received therefor
shall be deemed to be the consideration received by the Company for the
issuance of such securities plus the additional minimum consideration, if
any, to be received by the Company upon the conversion or exchange thereof
(the consideration in each case to be determined in the same manner as
provided in clauses (1) and (2) of this subsection).
(g) When De Minimis Adjustment May Be Deferred.
No adjustment in any Exercise Price need be made unless the
adjustment would require an increase or decrease of at least 1% in such
Exercise Price. Any adjustments that are not made shall be carried forward
and taken into account in any subsequent adjustment.
All calculations under this Section shall be made to the nearest
cent or to the nearest l/l00th of a share, as the case may be.
(h) When No Adjustment Required.
No adjustment need be made for a transaction referred to in
subsections (a), (b), (c), (d) or (e) of this Section 11 if Warrant
holders are to participate in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate
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in light of the basis and notice on which holders of Common Stock
participate in the transaction.
No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value of the
Common Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not
accrue on the cash.
(i) Notice of Adjustment.
Whenever any Exercise Price is adjusted, the Company shall provide
the notices required by Section 13 hereof.
(j) Voluntary Reduction.
The Company from time to time may reduce any Exercise Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; provided, however, that in no
event may any Exercise Price be less than the par value of a share of
Common Stock.
Whenever any Exercise Price is reduced, the Company shall mail to
Warrant holders a notice of the reduction. The Company shall mail the
notice at least 15 days before the date the reduced Exercise Price takes
effect. The notice shall state the reduced Exercise Price and the period
it will be in effect.
A reduction of the Exercise Price does not change or adjust the
Exercise Price otherwise in effect for purposes of subsections (a), (b),
(c), (d) and (e) of this Section 11.
(k) Notice of Certain Transactions.
If:
(1) the Company takes any action that would require an adjustment in
the Exercise Price pursuant to subsections (a), (b), (c), (d), (e) or (l)
of this Section 11 and if the Company does not arrange for Warrant holders
to participate pursuant to subsection (h) of this Section 11;
(2) the Company takes any action that would require a supplemental
Warrant Agreement pursuant to subsection (m) of this Section 11; or
(3) there is a liquidation or dissolution of the Company;
then, the Company shall mail to Warrant holders a notice stating the
proposed record date for a dividend or distribution or the proposed
effective date of a subdivision,
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combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution. The Company shall mail the notice at least 15
days before such date. Failure to mail the notice or any defect in it
shall not affect the validity of the transaction.
(l) Reorganization of Company.
If the Company consolidates or merges with or into, or transfers or
leases all or substantially all its assets to, any person, upon
consummation of such transaction the Warrants shall automatically become
exercisable for the kind and amount of securities, cash or other assets
which the holder of a Warrant would have owned immediately after the
consolidation, merger, transfer or lease if the holder had exercised the
Warrant immediately before the effective date of the transaction.
Concurrently with the consummation of such transaction, the corporation
formed by or surviving any such consolidation or merger if other than the
Company, or the person to which such sale or conveyance shall have been
made, shall enter into a supplemental Warrant Agreement so providing and
further providing for adjustments which shall be as nearly equivalent as
may be practical to the adjustments provided for in this Section. The
successor Company shall mail to Warrant holders a notice describing the
supplemental Warrant Agreement.
If the issuer of securities deliverable upon exercise of Warrants
under the supplemental Warrant Agreement is an affiliate of the formed,
surviving, transferee or lessee corporation, that issuer shall join in the
supplemental Warrant Agreement.
If this subsection (l) applies, subsections (a), (b), (c), (d) and
(e) of this Section 11 do not apply.
(m) When Issuance or Payment May Be Deferred.
In any case in which this Section 11 shall require that an
adjustment in any Exercise Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event (i) issuing to the holder of any Warrant exercised after such
record date the Warrant Shares and other capital stock of the Company, if
any, issuable upon such exercise over and above the Warrant Shares and
other capital stock of the Company, if any, issuable upon such exercise on
the basis of the applicable Exercise Price and (ii) paying to such holder
any amount in cash in lieu of a fractional share pursuant to Section 12;
provided, however, that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to
receive such additional Warrant Shares, other capital stock and cash upon
the occurrence of the event requiring such adjustment.
(n) Adjustment in Number of Shares.
Upon each adjustment of any Exercise Price pursuant to this Section
11, each Warrant outstanding prior to the making of the adjustment in the
Exercise Price shall thereafter evidence the right to receive upon payment
of the adjusted Exercise Price that number of shares of Common Stock
(calculated to the nearest hundredth) obtained from the following formula:
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N' = N x E
--
E'
where:
N' = the adjusted number of Warrant Shares issuable upon exercise
of a Warrant by payment of the adjusted Exercise Price.
N = the number or Warrant Shares previously issuable upon
exercise of a Warrant by payment of the Exercise Price prior
to adjustment.
E' = the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(o) Form of Warrants.
Irrespective of any adjustments in the Exercise Price or the number
or kind of shares purchasable upon the exercise of the Warrants, Warrants
theretofore or thereafter issued may continue to express the same price
and number and kind of shares as are stated in the Warrants initially
issuable pursuant to this Agreement.
(p) Limitation on Exercise Price Adjustment.
Notwithstanding the provisions of subsections 11(b), (c), (d) and
(e), in no event shall the Exercise Price be reduced by the application of
such subsections to a price less than C$0.1125, prior to the application,
if at all, of subsection 11(a).
SECTION 12. Fractional Interests. The Company shall not be required
to issue fractional Warrant Shares on the exercise of Warrants. If more
than one Warrant shall be presented for exercise in full at the same time
by the same holder, the number of full Warrant Shares which shall be
issuable upon the exercise thereof shall be computed on the basis of the
aggregate number of Warrant Shares purchasable on exercise of the Warrants
so presented. If any fraction of a Warrant Share would, except for the
provisions of this Section 12, be issuable on the exercise of any Warrants
(or specified portion thereof), the Company shall pay an amount in cash
equal to the Exercise Price on the day immediately preceding the date the
Warrant is presented for exercise, multiplied by such fraction.
SECTION 13. Notices to Warrant Holders. Upon any adjustment of the
Exercise Price pursuant to Section 11, the Company shall promptly
thereafter cause to be given to each of the registered holders of the
Warrant Certificates at its address appearing on the Warrant register a
certificate of a firm of independent public accountants of recognized
standing selected by the Board of Directors of the Company (who may be the
regular auditors of the Company) setting forth the Exercise Price after
such adjustment and
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setting forth in reasonable detail the method of calculation and the facts
upon which such calculations are based and setting forth the number of
Warrant Shares (or portion thereof) issuable after such adjustment in the
Exercise Price, upon exercise of a Warrant and payment of the adjusted
Exercise Price, which certificate shall be conclusive evidence of the
correctness of the matters set forth therein, by first-class mail, postage
prepaid. Where appropriate, such notice may be given in advance and
included as a part of the notice required to be mailed under the other
provisions of this Section 13.
In case:
(a) the Company shall authorize the issuance of rights, options or
warrants to subscribe for or purchase shares of Common Stock
or of any other subscription rights or warrants to all holders
of shares of Common Stock; or
(b) the Company shall authorize the distribution of evidences of
its indebtedness or assets (other than cash dividends or cash
distributions payable out of consolidated earnings or earned
surplus or dividends payable in shares of Common Stock or
distributions referred to in subsection (a) of Section 11
hereof) to all holders of shares of Common Stock; or
(c) of any consolidation or merger to which the Company is a
party and for which approval of any shareholders of the
Company is required, or of the conveyance or transfer of
the properties and assets of the Company substantially as
an entirety, or of any reclassification or change of Common
Stock issuable upon exercise of the Warrants (other than a
change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a
subdivision or combination), or a tender offer or exchange
offer for shares of Common Stock; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company; or
(e) the Company proposes to take any action (other than actions of
the character described in Section 11(a)) which would require
an adjustment of the Exercise Price pursuant to Section 11;
then, the Company shall cause to be given to each of the registered
holders of the Warrant Certificates at its address appearing on the
Warrant register, at least 20 days (or 10 days in any case specified in
clauses (a) or (b) above) prior to the applicable record date hereinafter
specified, or promptly in the case of events for which there is no record
date, by first-class mail, postage prepaid, a written notice stating (i)
the date as of which the holders of record of shares of Common Stock to be
entitled to receive any such rights, options, warrants or distribution are
to be determined, or (ii) the initial expiration date set forth in any
tender offer or exchange offer for shares of Common Stock, or (iii) the
date on which any such consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it
14
is expected that holders of record of shares of Common Stock shall be
entitled to exchange such shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, conveyance,
transfer, dissolution, liquidation or winding up. The failure to give the
notice required by this Section 13 or any defect therein shall not affect
the legality or validity of any distribution, right, option, warrant,
consolidation, merger, conveyance, transfer, dissolution, liquidation or
winding up, or the vote upon any action.
Nothing contained in this Agreement or in any of the Warrant
Certificates shall be construed as conferring upon the holders thereof the
right to vote or to consent or to receive notice as shareholders in
respect of the meetings of shareholders or the election of Directors of
the Company or any other matter, or any rights whatsoever as shareholders
of the Company.
SECTION 14. Notices to Company. Any notice or demand authorized by
this Agreement to be given or made by the Company or by the registered
holder of any Warrant Certificate to or on the Company shall be
sufficiently given or made when and if deposited in the mail, first class
or registered, postage prepaid, addressed (until another address is filed
in writing by the Company), as follows:
SUMMO MINERALS CORPORATION
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
In case the Company shall fail to maintain such office or agency or
shall fail to give such notice of the location or of any change in the
location thereof, presentations may be made and notices and demands may be
served at the principal office of the Transfer Agent.
SECTION 15. Supplements and Amendments. The Company and the Warrant
holders may from time to time supplement or amend this Agreement with the
approval of all holders of Warrant Certificates.
SECTION 16. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Holders shall bind
and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 17. Termination. This Agreement shall terminate at 5:00
p.m., Mountain Standard Time on June 25, 2004. Notwithstanding the
foregoing, this Agreement will terminate on any earlier date if all
Warrants have been exercised.
SECTION 18. Governing Law; Jurisdiction and Venue. This Agreement
and each Warrant Certificate issued hereunder shall be deemed to be a
contract made under the internal laws of the State of Colorado and for all
purposes shall be construed in accordance with the internal laws of said
State.
15
All judicial proceedings arising out of or relating to this
Agreement and each Warrant Certificate issued hereunder may be brought in
any court of competent jurisdiction in the City and County of Denver,
Colorado, and by execution and delivery of this Agreement, the Company
accepts for itself generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts and waives any defense of forum non
convenience and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement or any Warrant Certificate
issued hereunder.
SECTION 19. Transferabilitv and Nonnegotiabilitv of Warrant. The
Warrants may not be transferred or assigned in whole or in part without
compliance by the transferor and transferee with all applicable Canadian
and United States, federal, provincial and state securities laws and with
all applicable rules and policies of any stock exchange having
jurisdiction. Subject to compliance with such laws, rules and policies,
title to the Warrants may be transferred by endorsement of the Warrant
Certificate and delivery in the same manner as a negotiable instrument
transferable by endorsement and delivery.
SECTION 20. Exchange of Warrant Upon a Transfer. On surrender of the
Warrant Certificate for exchange, properly endorsed on the Assignment Form
and subject to the provisions of this Agreement with respect to compliance
with applicable securities laws and with the limitations on assignments
and transfers and contained in Section 19, the Company at its expense
shall issue to or on the order of the Holder a new Warrant Certificate of
like tenor, in the name of the Holder or as the Holder may direct, for the
number of shares issuable upon exercise hereof.
SECTION 21. Compliance with Securities Laws. Each Holder agrees that
it will not offer, sell or otherwise dispose of its Warrant or any shares
of Common Stock to be issued upon exercise hereof except under
circumstances that will not result in a violation of the Canadian or
United States federal or any provincial or state securities laws or in a
violation of any applicable rules and policies of any stock exchange
having jurisdiction. Prior to any proposed transfer of any Warrant, the
Holder thereof shall give written notice to the Company of its intention
to effect such transfer. Each such notice shall describe the manner of the
proposed transfer and, if requested by the Company, shall be accompanied
by an opinion of counsel reasonably satisfactory to the Company to the
effect that the proposed transfer may be effected without registration
under applicable laws, whereupon the Holder shall be entitled to transfer
this Warrant in accordance with the terms of its notice; provided,
however, that no such opinion of counsel shall be required for a transfer
to one or more partners of the transferor (in the case of a transferor
that is a partnership) or to an affiliated corporation (in the case of a
transferor that is a corporation).
SECTION 22. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, each of the Holders and the registered holders of the Warrant
Certificates any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and
16
exclusive benefit of the Company, each of the Holders and the registered
holders of the Warrant Certificates.
SECTION 23. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
[ REMAINDER OF THIS PAGE INTENTIONALLY BLANK ]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, as of the day and year first above written.
SUMMO MINERALS CORPORATION
By: /s/ XXXXXXX X. XXXX
---------------------------------
Name: Xxxxxxx X. Xxxx
-------------------------------
Title: President
------------------------------
[Seal]
Attest:
Secretary
RESOURCE CAPITAL FUND L.P.
By: Resource Capital Associates L.L.C,
General Partner
By: /s/ XXXXX X. XxXXXXXXXX
--------------------------------
Xxxxx X. XxXxxxxxxx
Managing Director
ST. XXXX MINERALS, INC.
By: /s/ XXXX X. XXXXXXXXXXX
--------------------------------
Name: Xxxx X. Xxxxxxxxxxx
------------------------------
Title: President
-----------------------------
18
EXERCISABLE ON OR BEFORE JUNE 25, 2004
No. 1 50,000,000 Warrants
RCF Warrant Certificate
SUMMO MINERALS CORPORATION
This Warrant Certificate certifies that RESOURCE CAPITAL FUND L.P.,
or registered assigns, is the registered holder of 50,000,000 Warrants
expiring June 25, 2004 (the "Warrants") to purchase Common Stock, no par
value per share (the "Common Stock"), of Summo Minerals Corporation, a
British Columbia corporation (the "Company"). Each Warrant entitles the
holder upon exercise to receive from the Company on or before 5:00 p.m.
Mountain Standard Time on June 25, 2004, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the initial exercise price
(the "Exercise Price") of C$0.12 payable in lawful money of Canada upon
surrender of this Warrant Certificate and payment of the Exercise Price at
the office of the Company, but only subject to the conditions set forth
herein and in the Warrant Agreement referred to herein. The Exercise Price
and number of Warrant Shares issuable upon exercise of the Warrants are
subject to adjustment upon the occurrence of certain events set forth in
the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m. Mountain Standard Time
on June 25, 2004, and to the extent not exercised by such time such
Warrants shall become void.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of Colorado.
All judicial proceedings arising out of or relating to this Warrant
Certificate may be brought in any court of competent jurisdiction in the
City and County of Denver, Colorado, and by execution and delivery of this
Agreement, the Company accepts for itself generally and unconditionally,
the nonexclusive jurisdiction of the aforesaid courts and waives any
defense of forum non conveniens and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Warrant Certificate.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring June 25, 2004 entitling the
holder on exercise to receive shares of Common Stock, and are issued or to
be issued pursuant to a Warrant Agreement dated as of June 25, 1999 (the
"Warrant Agreement"), duly executed and delivered by the Company to
Resource Capital Fund L.P. ("RCF") and St. Xxxx Minerals, Inc. ("St.
Xxxx"), which Warrant Agreement is hereby incorporated by reference in and
made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Company, the Holders and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder
and any transferee of the registered Holder) of the Warrants. A copy of
the
1
Warrant Agreement may be obtained by the holder hereof upon written
request to the Company.
Warrants may be exercised at any time on or before 5:01 p.m.
Mountain Standard Time, June 25, 2004. The holder of Warrants evidenced by
this Warrant Certificate may exercise them by surrendering this Warrant
Certificate, with the form of election to purchase set forth hereon
properly completed and executed, together with payment of the Exercise
Price in cash at the office of the Company. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised
shall be less than the total number of Warrants evidenced hereby, there
shall be issued to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised. No adjustment
shall be made for any dividends on any Common Stock issuable upon exercise
of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Common Stock
issuable upon the exercise of each Warrant shall be adjusted. No fractions
of a share of Common Stock will be issued upon the exercise of any
Warrant, but the Company will pay the cash value thereof determined as
provided in the Warrant Agreement.
Warrant Certificates, when surrendered at the office of the Company
by the registered holder thereof may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Company a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for
this Warrant Certificate, subject to the limitations provided in the
Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Company may deem and treat the registered holder(s) thereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, of any distribution to the holder(s)
hereof, and for all other purposes, and the Company shall not be affected
by any notice to the contrary. Neither the Warrants nor this Warrant
Certificate entitles any holder hereof to any rights of a stockholder of
the Company.
2
IN WITNESS WHEREOF, SUMMO MINERALS CORPORATION has caused this
Warrant Certificate to be signed by its President and by its Secretary,
and has caused its corporate seal to be affixed hereunto or imprinted
hereon.
Dated: June ___, 1999
SUMMO MINERALS CORPORATION
By
---------------------------------
President
By
---------------------------------
Secretary
3
EXERCISABLE ON OR BEFORE JUNE 25, 2004
No. 2 17,500,000 Warrants
St. Xxxx Warrant Certificate
SUMMO MINERALS CORPORATION
This Warrant Certificate certifies that ST. XXXX MINERALS, INC., or
registered assigns, is the registered holder of 17,500,000 Warrants
expiring June 25, 2004 (the "Warrants") to purchase of Common Stock, no
par value per share (the "Common Stock"), of Summo Minerals Corporation, a
British Columbia corporation (the "Company"). Each Warrant entitles the
holder upon exercise to receive from the Company on or before 5:00 p.m.
Mountain Standard Time on June 25, 2004, one fully paid and nonassessable
share of Common Stock (a "Warrant Share") at the initial exercise price
(the "Exercise Price") of C$0.12 payable in lawful money of Canada upon
surrender of this Warrant Certificate and payment of the Exercise Price at
the office of the Company, but only subject to the conditions set forth
herein and in the Warrant Agreement referred to herein. The Exercise Price
and number of Warrant Shares issuable upon exercise of the Warrants are
subject to adjustment upon the occurrence of certain events set forth in
the Warrant Agreement.
No Warrant may be exercised after 5:00 p.m. Mountain Standard Time
on June 25, 2004, and to the extent not exercised by such time such
Warrants shall become void.
This Warrant Certificate shall be governed and construed in
accordance with the internal laws of the State of Colorado.
All judicial proceedings arising out of or relating to this Warrant
Certificate may be brought in any court of competent jurisdiction in the
City and County of Denver, Colorado, and by execution and delivery of this
Agreement, the Company accepts for itself generally and unconditionally,
the nonexclusive jurisdiction of the aforesaid courts and waives any
defense of forum non conveniens and irrevocably agrees to be bound by any
judgment rendered thereby in connection with this Warrant Certificate.
The Warrants evidenced by this Warrant Certificate are part of a
duly authorized issue of Warrants expiring June 25, 2004 entitling the
holder on exercise to receive shares of Common Stock, and are issued or to
be issued pursuant to a Warrant Agreement dated as of June 25, 1999 (the
"Warrant Agreement"), duly executed and delivered by the Company to
Resource Capital Fund L.P. ("RCF") and St. Xxxx Minerals, Inc. ("St.
Xxxx"), which Warrant Agreement is hereby incorporated by reference in and
made a part of this instrument and is hereby referred to for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Company, the Holders and the holders (the words
"holders" or "holder" meaning the registered holders or registered holder
and any transferee of the registered Holder) of the Warrants. A copy of
the Warrant Agreement may be obtained by the holder hereof upon written
request to the Company.
Warrants may be exercised at any time on or before 5:01 p.m.
Mountain Standard Time, June 25, 2004. The holder of Warrants evidenced by
this Warrant Certificate may exercise them by surrendering this Warrant
Certificate, with the form of election to purchase set forth hereon
properly completed and executed, together with payment of the Exercise
Price in cash at the office of the Company. In the event that upon any
exercise of Warrants evidenced hereby the number of Warrants exercised
shall be less than the total number of Warrants evidenced hereby, there
shall be issued to the holder hereof or his assignee a new Warrant
Certificate evidencing the number of Warrants not exercised. No adjustment
shall be made for any dividends on any Common Stock issuable upon exercise
of this Warrant.
The Warrant Agreement provides that upon the occurrence of certain
events the Exercise Price set forth on the face hereof may, subject to
certain conditions, be adjusted. If the Exercise Price is adjusted, the
Warrant Agreement provides that the number of shares of Common Stock
issuable upon the exercise of each Warrant shall be adjusted. No fractions
of a share of Common Stock will be issued upon the exercise of any
Warrant, but the Company will pay the cash value thereof determined as
provided in the Warrant Agreement.
1
Warrant Certificates, when surrendered at the office of the Company
by the registered holder thereof may be exchanged, in the manner and
subject to the limitations provided in the Warrant Agreement, but without
payment of any service charge, for another Warrant Certificate or Warrant
Certificates of like tenor evidencing in the aggregate a like number of
Warrants.
Upon due presentation for registration of transfer of this Warrant
Certificate at the office of the Company a new Warrant Certificate or
Warrant Certificates of like tenor and evidencing in the aggregate a like
number of Warrants shall be issued to the transferee(s) in exchange for
this Warrant Certificate, subject to the limitations provided in the
Warrant Agreement, without charge except for any tax or other governmental
charge imposed in connection therewith.
The Company may deem and treat the registered holder(s) thereof as
the absolute owner(s) of this Warrant Certificate (notwithstanding any
notation of ownership or other writing hereon made by anyone), for the
purpose of any exercise hereof, of any distribution to the holder(s)
hereof, and for all other purposes, and the Company shall not be affected
by any notice to the contrary. Neither the Warrants nor this Warrant
Certificate entitles any holder hereof to any rights of a stockholder of
the Company.
2
IN WITNESS WHEREOF, SUMMO MINERALS CORPORATION has caused this
Warrant Certificate to be signed by its President and by its Secretary,
and has caused its corporate seal to be affixed hereunto or imprinted
hereon.
Dated: June ___, 1999
SUMMO MINERALS CORPORATION
By
---------------------------------
President
By
---------------------------------
Secretary
2
TO: SUMMO MINERALS CORPORATION
THE HOLDER HEREBY SUBSCRIBES FOR shares of Common Stock of Summo Minerals
Corporation (or such number of shares or other security or property to
which such subscription entitles the undersigned in lieu thereof under the
provision of the Warrant Agreement) at $ (Cdn.) per share of Common Stock
(or the adjusted dollar amount per share at which the undersigned is
entitled to purchase such shares under the provisions of the Warrant
Agreement) and on the other terms set out in the applicable Warrant
Certificate and Warrant Agreement and encloses herewith a certified
cheque, bank draft or money order in Canadian dollars payable to "Summo
Minerals Corporation" in payment of the aggregate subscription price
therefor.
The undersigned hereby irrevocably directs that the shares of Common Stock
be delivered, subject to the conditions set out in this certificate and
the provisions of the Warrant Agreement, and that the said shares of
Common Stock be registered as follows:
Address(es) Number of
Name(s) in Full (Include Postal Code) Shares
--------------- --------------------- ------
TOTAL:
(Please print full name in which certificate(s) are to be issued. If any
of the shares of Common Stock are to be issued to a person or persons
other than the Warrantholder, the Transfer Form must also be completed and
the Warrantholder must pay to the Company all requisite taxes or other
government charges, if any.)
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
DATED this day of , .
Signature of Subscriber
Name of Subscriber
Address of Subscriber
(Include Postal Code)
