SUPPLEMENTAL INDENTURE
EXHIBIT
99.7
EXECUTION COPY
THIS
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of May 17,
2007, is entered into by and between China Xxxx Xxxx Mining & Resources,
Inc., a Nevada corporation (the "Company") and The Bank of New York, as trustee
(the "Trustee"). Capitalized terms used herein but not otherwise defined herein
shall have the respective meanings set forth in the Indenture (as defined
below).
WITNESSETH:
WHEREAS,
the Company and the Trustee have entered into an Indenture (the "Indenture"),
dated as of December 27, 2006, which sets forth the terms and conditions
for the
issuance by the Company of US $28,000,000 6.75% Senior Convertible Notes due
2012 (the
"Notes");
WHEREAS,
Section 8.02 of the Indenture provides that the Company and the Trustee may,
from time to time and at any time, with the consent of the holders of a
majority
in aggregate principal amount of the Notes at the time outstanding, enter into
indentures supplemental thereto for the purpose of changing in any manner any of
the provisions
of the Indenture subject to the conditions set forth therein;
WHEREAS,
the holder of a majority in aggregate principal amount of the Notes currently
outstanding has consented (the evidence of such consent having been obtained
and
provided to the Trustee as required under the Indenture) to the execution of
this Supplemental Indenture by the parties hereto; and
WHEREAS,
the Company has complied with the requirements under the Indenture
to execute this Supplemental Indenture and, in connection therewith, has
provided
the Trustee with an Officers' Certificate and an Opinion of Counsel to the
satisfaction of the Trustee.
NOW
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Company and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the
Notes as follows:
1.
Amendments to the
Indenture. The
Indenture is hereby amended as follows:
1.1.
Paragraph (d) under the definition of "Liquidated
Damages" in
Section 1.01 of the Indenture is deleted in its entirety, the word "and" is
inserted at the end of paragraph (b) under such definition, and ", and" at the
end of paragraph (c) under such definition is replaced with ".", such that the
definition of "Liquidated
Damages" shall read in its entirety
as follows:
"Liquidated
Damages" means any
of
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(a) the
aggregate amount of $750,000 due and payable by the Company to the Holders on a
pro rata basis
(proportionate to their holding of the Notes that are at that time outstanding)
on or before November 23, 2007 if the Company has not obtained a Public Listing
on or before November 15, 2007 or if the Company is not at that time currently
maintaining such listing,
(b) the
aggregate amount of $1,300,000 due and payable by the Company to the Holders on
a pro rata basis
(proportionate to their holding of the Notes that are at that time outstanding)
(x) on April 2, 2007, if the Company has not complied with Section 4.20(a), and
(y) on or before January 7 of the year subsequent to any fiscal year for which
the Company has not complied with Section 4.20(b), and
(c) the
aggregate amount of $750,000 due and payable by the Company to the Holders on a
pro rata basis
(proportionate to their holding of the Notes that are at that time outstanding)
on or before the fifth Business Day from the 145th day following (i) the Issue
Date, if the Company has not complied with the initial appointment of an
officer
pursuant to Section 4.27(a) and (ii) the date on which there occurs vacancy in
the position
in the event when the Company has not complied with Section
4.27(b).
For all
purposes of this Indenture, the term "premium" shall include Liquidated Damages,
if any, with respect to the Notes."
1.2. Paragraph
(a) under Section 4.18 of the Indenture is deleted in its entirety such that
Section 4.18 shall read in its entirety as follows:
"Section 4.18. Other
Covenants.
Unless
approved by Holders of at least a majority in aggregate principal amount of the
Notes then outstanding, the Company shall not, and shall cause its Subsidiaries
not to,
(a) except
for the Conversion Shares, cause to authorize, create (by way of
reclassification or otherwise) or issue or sell any securities of the Company or
any Subsidiary (including without limitation any and all shares of capital
stock, securities convertible into, or exchangeable or exercisable for, such
shares, and options, warrants or other rights to acquire such shares and any
securities that represent the right to receive any of the
foregoing);
(b) cause to
amend, repeal or alter the articles of incorporation; or
(c) appoint,
remove or change the independent public accountants of the Company
or any of its Subsidiaries except in accordance with Section 4.20."
1.3. A new
Section 9.09 is inserted at the end of Article IX of the Indenture as
follows:
"Section 9.09. Conversion
Limitation
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Notwithstanding
any provision to the contrary in the Indenture or any other agreement, the
Company shall not effect any conversion of any portion of the Notes, and Citadel
Equity Fund Ltd. ("Citadel") shall not
have the right to convert any portion of the Notes held by it, to the extent
that after giving effect to the conversion of such portion of the Notes (the
"Subject
Notes"). Citadel
(together with its Affiliates) would beneficially own in excess of 9.99% of the
number of Common Shares outstanding immediately after giving effect to such
conversion (the "Conversion
Limitation"). For
purposes of the foregoing sentence, the number of Common Shares beneficially
owned by Citadel and its Affiliates shall include the number of Common Shares
issuable upon conversion of the Subject Notes, but shall exclude the number of
Common Shares which would be issuable upon (A) conversion of the remaining,
nonconverted
portion of the Notes beneficially owned by Citadel or any of its Affiliates
and (B)
exercise or conversion of the unexercised or nonconverted portion of any other
securities
of the Company subject to a limitation on conversion or exercise analogous to
the
limitation contained herein beneficially owned by Citadel or any of its
Affiliates. Except as set forth in the preceding sentence, for purposes of this
Section, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act. For purposes of this Section, in determining the
number of outstanding Common Shares, Citadel may rely on the number of
outstanding Common Shares as reflected in (x) the Company's most recent annual,
quarterly or current report on Form 10-K, 10-KSB, 10-Q, 10-QSB or Form 8-K,
respectively, as the case may be; (y) a more recent public announcement by the
Company or (z) any other notice by the Company setting forth the number of
Common Shares outstanding. For any reason at any time, upon the written request
(which, for the avoidance of doubt, includes a request via e-mail) of Citadel,
the Company shall within three business days confirm orally and in writing to
Citadel the number of Common Shares then outstanding. In any case, the number of
outstanding
Common Shares shall be determined after giving effect to the conversion or
exercise
of securities of the Company, including any Notes, by Citadel or its Affiliates
since the date as of which such number of outstanding Common Shares was
reported. By not less than sixty-one (61) days' prior written notice to the
Company, Citadel may, at its election, increase or decrease the Conversion
Limitation to any other percentage not in excess of 9.99% specified in such
notice, and the Conversion Limitation shall continue
to apply until such sixty-first day (or such later date, as determined by
Citadel, as may be
specified in such notice)."
2. Ratification of Indenture;
Supplemental Indenture Part of Indenture. Except
as expressly
amended hereby, the Indenture is ratified and confirmed in all respects and all
the
terms, conditions and provisions thereof shall remain in full force and effect.
This Supplemental Indenture shall form a part of the Indenture for all purposes,
and every Holder heretofore or hereafter authenticated and delivered shall be
bound hereby.
3. Governing
Law. THIS
SUPPLEMENTAL INDENTURE SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.
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4. Trustee Makes No
Representation. The
Trustee makes no representation as to the validity
or sufficiency of this Supplemental Indenture.
5. Counterparts.
5.1. The
parties may sign any number of copies of this Supplemental Indenture.
Each
signed copy shall be an original, but all of them together represent the same
agreement.
One signed copy is enough to prove this Supplemental Indenture.
5.2. This
Supplemental Indenture may be executed in one or more counterparts and when
a counterpart has been executed by each party, all such counterparts taken
together
shall constitute one and the same agreement.
6. Effect of
Headings. The
Section headings herein are for convenience only and shall not
effect the construction thereof.
[Signature pages to
follow]
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IN
WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed as of the date first above written.
CHINA
XXXX XXXX MINING & RESOURCES,
INC.
By: /s/ Xxxxxxxx
Xx
Name:
Xxxxxxxx Xx
Title:
Chief ExecutiveOfficer
| THE
BANK OF NEW YORK,
a
New York banking corporation,
as
Trustee
By: /s/ Xxxx
Xxx
Name:
Xxxx Xxx
Title:
Assistant Treasurer
|
