Exhibit 10.15 to
Form 10-SB Registration Statement
CONVERTIBLE LOAN AGREEMENT
THIS LOAN AGREEMENT is dated the 19th day of March, 1996.
BETWEEN:
GOLDEN QUEEN MINING CO. LTD., a company incorporated under the laws of
British Columbia, having its principal executive office at Xxxxx 000X,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
(hereinafter called the "Company")
AND:
GOLDEN QUEEN MINING COMPANY, INC. a corporation incorporated under the
laws of California, having its principal executive office at Xxxxx
000X, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
(hereinafter called the "Borrower")
AND:
THE XXXXXX X. XXXX CHARITABLE LEAD TRUST II, a charitable trust
organized under the laws of the State of Massachusetts and having an
office c/o Investors Bank and Trust, Xxx 0000, Xxxxxx, XX 00000 (Att:
Xxx Xxxxx), Account No. 0000000.
(hereinafter called the "Lender")
WHEREAS the Lender has agreed to provide a loan to the Borrower on the
terms and conditions set forth hereunder;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby covenant and agree as follows:
1. INTERPRETATION
DEFINED TERMS. As used in this Agreement, the following terms shall
have the respective meanings specified in this section unless the context
requires otherwise:
1.1 CURRENCY. Unless otherwise specified herein, all statements of
or references to dollar amounts herein are references to U.S. Dollars.
1.2 INCLUDED WORDS. In this Agreement, words importing the singular
number only shall include the plural and vice versa, words importing the
masculine gender shall include the feminine and neuter genders and vice versa
and words importing persons shall include individuals, corporations,
partnerships, associations, trusts and unincorporated organizations and vice
versa.
1.3 HEADINGS. The division of this Agreement into articles and
sections and the insertion of headings are for convenience of reference only and
shall not affect the interpretation of this Agreement.
1.4 REFERENCES. Unless otherwise stated, a reference herein to an
article or section refers to the appropriate article or section in this
Agreement. A reference to "herein", "hereof", "hereto" or "hereunder" is a
reference to this Agreement, including the Schedule hereto, together with any
amendments hereof or modifications hereto.
1.5 SCHEDULES. Schedule A is hereby incorporated in and forms a part
of this Agreement.
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2. LOAN, CONVERSION TO COMMON SHARES AND RELATED MATTERS
2.1 LOAN ADVANCE. On and subject to the terms and conditions hereof,
the Lender hereby agrees to lend to the Borrower the amount of $600,000 (the
"Advance") to be advanced against receipt of a Promissory Note in form attached
hereto as Schedule A from the Borrower in respect of such advance upon
satisfaction of the conditions set out in section 5 below.
2.2 CONVERSION OF LOAN. Upon and subject to the provisions and
conditions herein, the Lender shall have the right (the "Share Conversion
Right"), at its option, to deliver to the Borrower from time to time a written
notice (the "Conversion Notice") and the delivery of a Conversion Notice shall
constitute an irrevocable election by the Lender to exercise its right (the
"Share Conversion Right") to convert the whole or such portion of the Advance as
is set forth in the Conversion Notice into Shares at the price of C$2.00 per
Share (the "Conversion Price"). The Share Conversion Right shall extend only to
the maximum number of whole Shares into which the Advance set forth in the
Conversion Notice can be divided. In the case of a fractional interest an
adjustment will be made to the next lowest whole number of Shares.
2.3 ISSUE OF CERTIFICATES REPRESENTING SHARES. In the event of the
exercise by the Lender of the Share Conversion Right, the Borrower shall deliver
to the Lender, on the day that is two business days after the date of delivery
of the Conversion Notice (the "Conversion Date"), a certificate or certificates
registered in the name of the Lender representing the Shares to which the Lender
is entitled to hereunder along with a cheque payable to the Lender in an amount
equal to all accrued but unpaid interest on the portion of the Advance converted
as of the Conversion Date. The Borrower represents and warrants, which
representation and warranty shall survive any conversion, that such Shares
delivered to the Lender will be duly authorized and validly allotted and issued
as fully paid and non-assessable Common Shares without par value in the capital
of the Company.
2.4 DELIVERY OF PROMISSORY NOTE FOR CANCELLATION. Concurrently with
the delivery of the certificates by the Borrower pursuant to Section 2.3 the
Lender shall deliver the Note to the Borrower for cancellation and the Borrower
shall issue a new convertible promissory note in the form attached hereto as
Schedule A in the principal amount of the balance of the outstanding Principal
Amount, if any, remaining following the exercise of the Conversion Right.
2.5 ADJUSTMENT TO CONVERSION PRICE. If and whenever at any time
prior to the Maturity Date (as defined below) (and so long as there is any
principal amount of the Advance outstanding) the Company shall (i) subdivide the
outstanding Shares into a greater number of Shares, (ii) consolidate the
outstanding Shares into a smaller number of Shares, or (iii) issue to all or
substantially all the holders of Shares by way of a stock dividend or otherwise
Shares or securities convertible into Shares, the Conversion Price shall, on the
effective date of such subdivision or consolidation or on the record date of
such stock dividend, as the case may be, be adjusted to that amount which is the
same proportion to the Conversion Price in effect immediately prior to such
subdivision or consolidation or stock dividend as the number of outstanding
Shares before giving effect to such subdivision or consolidation or stock
dividend bears to the number of outstanding Shares after giving effect to such
subdivision or consolidation or stock dividend. Such adjustment shall be made
successively whenever any event referred to in this section 2.5 shall occur; and
any such issue of Shares by way of stock dividend shall be deemed to have been
made on the record date for the stock dividend for the purposes of calculating
the number of Shares under sections 2.6.
2.6 ADJUSTMENT TO CONVERSION PRICE UPON OTHER DISTRIBUTIONS BY
COMPANY. If and whenever prior to the Maturity Date the Company shall fix a
record date for the making of a distribution to all or substantially all the
holders of Shares, (i) shares of any class other than Shares, whether of the
Company or any other company, (ii) rights, options or warrants (other than those
referred to in section 2.5 hereof), (iii) evidences of indebtedness, or (iv)
any other assets, then, in each case, the Conversion Price shall be adjusted
immediately after such record date so that it shall equal the price determined
by multiplying the Conversion Price in effect on such record date by a fraction,
of which the numerator shall be (a) the total number of Shares outstanding on
such record date multiplied by the fair market value of such Shares (as
determined by the Directors of the Company, acting in good faith, and subject to
the prior written consent of The Toronto Stock Exchange), less (b) the aggregate
fair market value (as determined by the Directors of the Company, acting in good
faith, and subject to the prior written consent of The Toronto Stock Exchange)
of such shares, rights, options, warrants, evidences of indebtedness or other
assets issued or so distributed, and of which the denominator shall be the
amount determined in (a) of this subsection; and any Shares owned or held by or
for the account of the Company shall be deemed not to be outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that any such distribution
is not so made, the Conversion Price shall be readjusted to
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the Conversion Price in effect immediately prior to the record date or to the
Conversion Price that would be then in effect based upon such shares, rights,
options, warrants, evidences of indebtedness or other assets actually issued or
distributed, as the case may be.
2.7 PROVISO. No adjustment to the Conversion Price shall be made in
respect of any event described in subsection 2.6 if the Lender is allowed to
participate as if it had converted the Note prior to the applicable record date
or effective date. The Lender acknowledges that its participation in such an
event described in subsection 2.6 shall be subject to the prior written consent
of The Toronto Stock Exchange.
2.8 AMENDMENTS TO BE DELIVERED TO BORROWER. The Company shall not
enter into a consolidation, merger or amalgamation with or into any other body
corporate until the Company, the Borrower and the Lender execute and deliver all
such amendments to the Share Conversion Right as are required by the Lender,
acting reasonably, to ensure that the rights of the Lender under the Share
Conversion Right are not adversely affected by such consolidation, merger or
amalgamation.
2.9 EXCHANGES RATES; CONVERSION BETWEEN US AND CANADIAN DOLLARS. For
the purpose of determining the number of Common Shares to be issued to the
Lender upon exercise of the Share Conversion Right, the rate of exchange between
Canadian dollars and U.S. dollars (the "Rate of Exchange") shall be 1.3722
Canadian dollars per U.S. dollar, being the noon spot rate quoted by the Bank of
Canada for purchases of U.S. dollars with Canadian dollars on February 29, 1996,
the date notice to The Toronto Stock Exchange of the transaction contemplated
hereby was given by the Company.
3. INTEREST
3.1 RATES OF INTEREST. The Borrower shall pay interest ("Interest")
to the Lender (c/o Account No. 0000000, as set forth on the first page of this
Agreement) on the aggregate amount of the Advance outstanding at a rate per
annum computed in all cases on the basis of a year of 360 days and determined
for the actual days the Advance is outstanding from the date of the Advance at
a rate equal to 9.5%. For the purposes of the INTEREST ACT (Canada), the annual
rate to which the foregoing rate is applicable is the foregoing rate multiplied
by the number of days in the year (being 365 or 366, as the case may be) divided
by 360.
3.2 CALCULATION AND PAYMENT OF INTEREST. Interest on the Advance and
all other amounts owing to the Lender under the terms of this Agreement will be
calculated and compounded semi-annually in arrears and in respect of any six
month period during which any amounts are outstanding hereunder and shall be
paid by the Borrower to the Lender on the third Business Day after the end of
each six month period.
3.3 OVERDUE PAYMENTS. Any amount not paid when due hereunder will
bear interest from the due date until paid in full at the rate of interest
determined pursuant to section 3.1.
4. PAYMENT
4.1 REPAYMENT. Subject to other provisions hereof requiring earlier
repayment, the Borrower shall pay to the Lender (c/o Account No. 0000000, as set
forth on the first page of this Agreement) the balance outstanding of the
Advance and Interest and all other Indebtedness in full on March 19, 1998 (the
"Maturity Date").
4.2 OPTIONAL PREPAYMENT. The Borrower may not prepay the Advance in
whole or in part at any time without the prior written consent of the Lender.
4.3 ACCELERATION BY LENDER. If the Company, within six months of the
date of this Agreement, completes an offering of Shares or securities
convertible into Shares pursuant to which net proceeds to the Company (after
deduction of all expenses associated with such offering) are at least
$5,000,000, the Lender may, within 30 days of completion of such offering,
provide written notice to the Borrower that the Lender has elected to accelerate
the term of the Advance and the Borrower shall within 10 Business Days of
receipt of such notice repay the principal amount of the Advance then
outstanding against delivery of the Promissory Note by the Lender.
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4.4 PAYMENTS IN IMMEDIATELY AVAILABLE FUNDS. All payments required
to be made hereunder shall be made in immediately available funds to such
accounts as the Lender may from time to time designate, free and clear of and
without any withholding or deduction for present or future Taxes. If, for the
purposes of obtaining judgment in any court in any country, it becomes necessary
to convert into any other currency (the "Judgment Currency") an amount due in
U.S. Dollars, the conversion shall be made at the Rate of Exchange.
4.5 PAYMENT WITHHOLDINGS. In the event that any applicable law
requires that any Tax be withheld from any amount paid or payable hereunder, the
Borrower shall pay on demand to the Lender such additional amounts (including
any Tax payable in respect of such additional amounts) as may be necessary in
order that every net dollar received by the Lender with respect to principal,
interest and other amounts required hereunder will not be less than the full
amount provided for herein.
5. CONDITIONS TO ADVANCES
5.1 CONDITIONS PRECEDENT TO THE ADVANCE. The obligation of the
Lender to make the Advance is subject to the fulfillment of the following
conditions precedent on or prior to the date hereof:
5.2 WAIVER OF CONDITIONS PRECEDENT. The Lender may, at its option,
waive compliance by the Company or the Borrower with any condition precedent to
its obligations to make the Advance. No waiver of any such condition precedent
will constitute a waiver with respect to any other condition precedent.
6. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
6.1 GENERAL. The Company and the Borrower represents and warrants to
the Lender as follows (and acknowledges that the Lender is relying upon the
representations and warranties set out herein and that no investigation at any
time made by or on behalf of the Lender or any information which has or may
hereafter come to the Lender's attention will diminish in any respect whatsoever
its rights to rely thereon):
6.2 EXISTENCE.
6.3 AUTHORIZED CAPITAL.
6.4 CORPORATE POWER.
6.5 AUTHORITY. The execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations hereunder and
thereunder have been duly authorized by all necessary corporate actions of the
Company and, upon its execution and delivery, this Agreement will constitute
legal, valid and binding agreements enforceable against the Company in
accordance with its terms.Material Adverse Change. There has been no material
adverse change in the business, assets, financial condition or prospects of the
Company or any of its Subsidiaries since May 31, 1995.
6.6 ISSUANCE OF SHARES. The Shares will, upon their issuance, be
duly authorized and validly allotted and issued as fully paid and non-assessable
shares in the capital of the Company, free and clear of any and all mortgages,
liens and encumbrances and listed and posted for trading on the Toronto Stock
Exchange.
6.7 NO RESALE RESTRICTIONS. The Shares issuable upon conversion of
the principal amount of the Promissory Note issued in respect of the Advance
will be subject to a 12-month hold period under the SECURITIES ACT (British
Columbia) commencing on the date of issuance of the Promissory Note upon the
conversion of which they were issued and may also be subject to other
restrictions on resale under applicable laws and regulatory requirements, and
any sale by the Lender of such Shares must be made in compliance with or on the
basis of an exemption from the registration and prospectus requirements of
applicable securities legislation.
6.8 REPORTING ISSUER STATUS. The Company is a reporting issuer under
the securities legislation of British Columbia and Ontario and is in compliance
with the requirements of the securities legislation of British Columbia and is,
other than with respect to omissions which do not have and could not reasonably
be expected to have a material adverse effect on the Borrower, in compliance
with the requirements of the securities legislation of, Ontario and British
Columbia.
6.9 REPRESENTATIONS AND WARRANTIES OF THE LENDER. The Lender
represents and warrants to the Borrower and the Company (and acknowledges that
the Borrower and the Company are relying upon the representations and warranties
set out herein and that no investigation at any time made by or on behalf of the
Borrower or the Company or any information which has or may hereafter come to
the their attention will diminish in any respect whatsoever their rights to rely
thereon) that the Lender has all necessary capacity to enter into and carry out
its obligations under this Agreement
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and this Agreement has been duly executed and delivered by the Lender and will
constitute legal, valid and binding agreements enforceable against the Lender in
accordance with its terms. The Lender agrees to execute all necessary
undertakings and acknowledgements prescribed by regulatory authorities and the
Vancouver and Toronto Stock Exchanges in connection with the transaction
contemplated in this Agreement.
7. COVENANTS OF THE COMPANY
COVENANTS OF THE BORROWER. The Borrower covenants and agrees with the
Company that upon delivery of a Conversion Notice by the Lender to the Borrower
from time to time pursuant to section 2.2 of this Agreement, the Borrower shall
forthwith cause the number of common shares of the Borrower that is the next
highest whole number of common shares equal one-tenth the number of Shares
issuable by the Company pursuant to such Conversion Notice to be issued to the
Company as fully paid and non-assessable common shares in the capital of the
Borrower and shall cause a certificate or certificates representing such shares
to be delivered to the Company.
8. EVENTS OF DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT. Subject to the expiry of the applicable grace
period, if any, set out below, the occurrence of any of the following events
(herein called an "Event of Default") will, at the option of the Lender,
terminate all obligations of the Lender hereunder and in addition to and not in
limitation of all rights of the Lender to demand the repayment of all
Indebtedness will, at the option of the Lender, make the principal amount of the
Advance, Interest and all other Indebtedness immediately due and payable, all
without demand, presentment, notice or further notice, as the case may be, all
of which are hereby expressly waived:
8.1.1 FAILURE TO REPAY PRINCIPAL. Failure to repay the
principal amount of the Advance due hereunder within three Business Days of the
due date thereof.
8.1.2 FAILURE TO PAY INTEREST AND OTHER AMOUNTS. Failure to
pay Interest or any other amount due hereunder within three Business Days of the
due date thereof.
8.1.3 BREACH OF COVENANT. Failure by the Borrower to perform
or observe any term, covenant or condition of this Agreement, other than the
payment of the principal amount of the Advance, Interest or other amounts owing
hereunder, and any such failure continues unremedied for a period of five days
after the receipt of written notice thereof from the Lender, provided that if
the failure can not, in the reasonable opinion of the Lender, by its nature be
cured within such five day period, the Borrower will not be considered to be in
default if and for so long as the failure has not had a material adverse effect
on the Borrower or the Project and the Borrower proceeds with all reasonable
dispatch to take the necessary remedial action.
8.1.4 INSOLVENCY, RECEIVER OR TRUSTEE. The Borrower or the
Company becomes insolvent, admits in writing its inability to pay its debts as
they mature or become due, makes any assignment for the benefit of its creditors
seeks relief under any moratorium or reorganization statute, or applies for or
consents to the appointment of or the taking of possession by a liquidator,
custodian, receiver, receiver-manager, assignee, sequestrator, trustee or
similar official for it or for a substantial part of its properties, assets or
businesses, or such a liquidator, custodian, receiver, receiver-manager,
assignee, sequestrator or trustee or similar official otherwise is appointed and
is not discharged within 20 days after such appointment unless the relevant
company is in good faith contesting such appointment.
8.1.5 BANKRUPTCY OR DISSOLUTION. Any bankruptcy, insolvency,
reorganization, liquidation or winding-up proceeding in respect of the Borrower
or the Company other proceeding for relief by the Borrower or the Company under
any bankruptcy, insolvency, relief of debtors or other similar legislation,
whether now or hereafter in effect, is instituted by or against the Borrower or
the Company, unless such proceeding is terminated within 20 days after its
institution, or any order, judgment or decree is entered in respect of the
Borrower or the Company decreeing its liquidation, dissolution, division or
winding-up or other similar action, or a meeting is called of or a proposal is
made to a substantial portion of the creditors of the Borrower or the Company
for the purpose of effecting a composition, moratorium or extension of debt.
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8.1.6 BREACH OF REPRESENTATION OR WARRANTY. Any representation
or warranty made or deemed to be made herein or in any agreement or other
document contemplated hereby or in any statement or certificate at any time
given in writing pursuant hereto or in connection herewith is, at the time
given, made or deemed to be made, inaccurate, false or misleading.
8.1.7 REMEDIES. Upon the occurrence of any Event of Default
and at any time thereafter, provided that the Borrower or the Company has not at
that time remedied all outstanding Events of Default, the Lender may, in its
sole discretion, by written notice of default given to the Borrower, declare
this Agreement to be in default. If the Borrower or the Company fails to cure
all outstanding Events of Default within 10 days from the receipt by it of the
notice of default, then at any time thereafter, or concurrently with the receipt
by the Borrower of the notice of default in the case of the Event of Default for
which there is no grace period, the Lender in its sole discretion and subject to
compliance with any mandatory requirements of applicable law then in effect, may
exercise any or all of the following rights and take any or all of the following
actions (each without prejudice to the Lender's right to convert into common
shares of the Company the principal amount of the Promissory Notes issued in
respect of the Advance outstanding at such time):
8.1.8 REMEDIES CUMULATIVE. No remedy herein conferred on the
Lender is intended to be exclusive. Each remedy is cumulative and is in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or otherwise. The exercise or commencement of
exercise by the Lender of any of such remedies will not preclude the
simultaneous or subsequent exercise by the Lender of any other such remedies.
8.1.9 WAIVER. The Lender may, in its sole discretion, by
written instrument at any time and from time to time, waive any breach by the
Borrower or the Company of any of the covenants herein. No course of dealing
between the parties hereto nor any delay in exercising any rights hereunder or
under any other security will operate as a waiver of any rights of the Lender.
8.1.10 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on
the part of the Lender in the exercise of any power, right or privilege
hereunder will operate as a waiver thereof and no single or partial exercise of
any such power, right or privilege will preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. All rights and
remedies existing under this Agreement, the Promissory Notes to be issued in
respect of the Advance are cumulative to and not exclusive of any rights or
remedies otherwise available.
9. MISCELLANEOUS
9.1 NOTICES. Any notice, direction or other instrument required or
permitted to be given under this Agreement shall be in writing and may be given
by delivering the same to the appropriate address set out below or by sending
the same by telecopier to the appropriate address set out below:
9.2 SET-OFF OR COUNTERCLAIM. The obligation of the Borrower to pay
or perform the Indebtedness is absolute and unconditional and will not be
limited or affected by any circumstance including, without limitation:
AMENDMENTS. This Agreement and any provision hereof may be
amended, waived, discharged or terminated only by an instrument in writing
signed by the party against whom enforcement of the amendment, waiver, discharge
or termination is sought. Any such amendment shall be subject to and
conditional upon the written approval of The Toronto Stock Exchange.
9.3 TIME OF ESSENCE. Time is of the essence of this Agreement in
respect of all payments to be made hereunder and all covenants and agreements to
be performed and fulfilled. Any extension of time hereunder will not be deemed
to be or to operate at law as a waiver on the part of the Lender of this
provision that time is of the essence of this Agreement.
9.4 ASSIGNMENT. No party may assign any of its rights or obligations
hereunder without the prior written consent of the other parties.
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9.5 SEVERABILITY. If any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect in any
jurisdiction, the validity, legality and enforceability of such provision will
not in any way be affected or impaired thereby in any other jurisdiction and the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.
9.6 PARTIES IN INTEREST. This Agreement will enure to the benefit of
and be binding on the parties hereto and their respective successors and
permitted assigns.
9.7 APPLICABLE LAW. This Agreement and the rights and obligations of
the parties hereto will be governed by the laws of British Columbia and the laws
of Canada applicable therein, except as may otherwise be expressly provided
herein or therein. The parties hereby attorn to the non-exclusive jurisdiction
of the courts of British Columbia.
9.8 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and undertakings, whether oral or written, relative to the subject
matter hereof except as otherwise provided herein.
9.9 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and both of which together shall constitute one and the same document.
9.10 PAYMENT DATES. Unless otherwise provided herein, if the date
upon which any act or payment hereunder is required to be done or made falls on
a day which is not a Business Day, then such act or payment will be performed or
made on the next following Business Day.
9.11 LENDER RECORDS. The records of the Lender as to the state of
accounts between the parties shall constitute prima facie proof of the relevant
fact.
9.12 NO MERGER OF JUDGMENT. The taking of a judgment on any covenant
contained herein or in the Escrow Agreement or the Pledge Agreement or any other
agreement or document in respect of the Charge or the Share Pledge or any
evidence of or security for payment of the Indebtedness or performance of the
obligations herein contained does not operate as a merger of any such covenant,
affect the Lender's right to interest at the rate and times provided in this
Agreement on any money owing to the Lender under any covenant set out herein or
affect any of the rights or remedies of the Lender. Any such judgment will
provide that interest thereon will be calculated at the same rate and in the
same manner as herein provided at the date of default until such judgment is
fully paid and satisfied.
9.13 SURVIVAL. The representations, warranties, covenants and
agreements herein contained shall survive the making by the Lender of the
Advance and the conversion of the principal amount of the Promissory Notes to be
issued in respect thereof into common shares of the Borrower and continue in
full force and effect thereafter.
GOLDEN QUEEN MINING CO. LTD.
By:
---------------------------------
GOLDEN QUEEN MINING COMPANY, INC.
By:
---------------------------------
THE XXXXXX X. XXXX CHARITABLE LEAD TRUST II
By:
---------------------------------
(Authorized Signatory)
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Schedule "A"
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A HOLD PERIOD THAT
EXPIRES ON MARCH L, 1997 AND MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL THE
EXPIRY OF THE HOLD PERIOD, EXCEPT AS PERMITTED BY THE SECURITIES ACT (BRITISH
COLUMBIA) AND REGULATIONS MADE UNDER THAT ACT.
PROMISSORY NOTE AND CONVERSION RIGHT
FOR VALUE RECEIVED, the undersigned promises to pay on demand to the order
of The Xxxxxx X. Xxxx Charitable Lead Trust II the sum of Six Hundred Thousand
Dollars ($600,000) of lawful money of the United States of America, together
with Interest (as defined in the convertible loan agreement dated the 19th day
of March, 1996 among Golden Queen Mining Co. Ltd., Golden Queen Mining Company,
Inc. and Xxxxxx Xxxx (the "Agreement")) thereon from the date hereof.
This Promissory Note and Conversion Right is issued pursuant to and is
subject to the terms and conditions of the Agreement and evidences the right of
The Xxxxxx X. Xxxx Charitable Lead Trust II to acquire securities of Golden
Queen Mining Co. Ltd. pursuant to the terms of the Agreement. This Promissory
Note and Conversion Right is not a negotiable instrument.
IN WITNESS WHEREOF the undersigned have hereunto affixed their common seals
in the presence of their proper officers duly authorized in that behalf this
19th day of March, 1996
GOLDEN QUEEN MINING COMPANY, INC. was hereunto affixed in the presence of:
GOLDEN QUEEN MINING CO. LTD. was hereunto affixed in the presence of:
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CONVERTIBLE LOAN AGREEMENT
THIS LOAN AGREEMENT is dated the 19th day of March, 1996.
BETWEEN:
GOLDEN QUEEN MINING CO. LTD., a company incorporated under the laws of
British Columbia, having its principal executive office at Xxxxx 000X,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
(hereinafter called the "Company")
AND:
GOLDEN QUEEN MINING COMPANY, INC. a corporation incorporated under the
laws of California, having its principal executive office at Xxxxx
000X, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000.
(hereinafter called the "Borrower")
AND:
THE XXXXXX X. XXXX CHARITABLE LEAD TRUST DATED 11/30/83, a charitable
trust organized under the laws of the State of Massachusetts and
having an office c/o Investors Bank and Trust, Xxx 0000, Xxxxxx, XX
00000 (Att: Xxx Xxxxx), Account No. 0000000.
(hereinafter called the "Lender")
WHEREAS the Lender has agreed to provide a loan to the Borrower on the
terms and conditions set forth hereunder;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby covenant and agree as follows:
1. INTERPRETATION
DEFINED TERMS. As used in this Agreement, the following terms shall
have the respective meanings specified in this section unless the context
requires otherwise:
1.1 CURRENCY. Unless otherwise specified herein, all statements of
or references to dollar amounts herein are references to U.S. Dollars.
1.2 INCLUDED WORDS. In this Agreement, words importing the singular
number only shall include the plural and vice versa, words importing the
masculine gender shall include the feminine and neuter genders and vice versa
and words importing persons shall include individuals, corporations,
partnerships, associations, trusts and unincorporated organizations and vice
versa.
1.3 HEADINGS. The division of this Agreement into articles and
sections and the insertion of headings are for convenience of reference only and
shall not affect the interpretation of this Agreement.
1.4 REFERENCES. Unless otherwise stated, a reference herein to an
article or section refers to the appropriate article or section in this
Agreement. A reference to "herein", "hereof", "hereto" or "hereunder" is a
reference to this Agreement, including the Schedule hereto, together with any
amendments hereof or modifications hereto.
1.5 SCHEDULES. Schedule A is hereby incorporated in and forms a part
of this Agreement.
2. LOAN, CONVERSION TO COMMON SHARES AND RELATED MATTERS
2.1 LOAN ADVANCE. On and subject to the terms and conditions hereof,
the Lender hereby agrees to lend to the Borrower the amount of $400,000 (the
"Advance") to be advanced against receipt of a Promissory Note in form attached
hereto as Schedule A from the Borrower in respect of such advance upon
satisfaction of the conditions set out in section 5 below.
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2.2 CONVERSION OF LOAN. Upon and subject to the provisions and
conditions herein, the Lender shall have the right (the "Share Conversion
Right"), at its option, to deliver to the Borrower from time to time a written
notice (the "Conversion Notice") and the delivery of a Conversion Notice shall
constitute an irrevocable election by the Lender to exercise its right (the
"Share Conversion Right") to convert the whole or such portion of the Advance as
is set forth in the Conversion Notice into Shares at the price of C$2.00 per
Share (the "Conversion Price"). The Share Conversion Right shall extend only to
the maximum number of whole Shares into which the Advance set forth in the
Conversion Notice can be divided. In the case of a fractional interest an
adjustment will be made to the next lowest whole number of Shares.
2.3 ISSUE OF CERTIFICATES REPRESENTING SHARES. In the event of the
exercise by the Lender of the Share Conversion Right, the Borrower shall deliver
to the Lender, on the day that is two business days after the date of delivery
of the Conversion Notice (the "Conversion Date"), a certificate or certificates
registered in the name of the Lender representing the Shares to which the Lender
is entitled to hereunder along with a cheque payable to the Lender in an amount
equal to all accrued but unpaid interest on the portion of the Advance converted
as of the Conversion Date. The Borrower represents and warrants, which
representation and warranty shall survive any conversion, that such Shares
delivered to the Lender will be duly authorized and validly allotted and issued
as fully paid and non-assessable Common Shares without par value in the capital
of the Company.
2.4 DELIVERY OF PROMISSORY NOTE FOR CANCELLATION. Concurrently with
the delivery of the certificates by the Borrower pursuant to Section 2.3 the
Lender shall deliver the Note to the Borrower for cancellation and the Borrower
shall issue a new convertible promissory note in the form attached hereto as
Schedule A in the principal amount of the balance of the outstanding Principal
Amount, if any, remaining following the exercise of the Conversion Right.
2.5 ADJUSTMENT TO CONVERSION PRICE. If and whenever at any time
prior to the Maturity Date (as defined below) (and so long as there is any
principal amount of the Advance outstanding) the Company shall (i) subdivide the
outstanding Shares into a greater number of Shares, (ii) consolidate the
outstanding Shares into a smaller number of Shares, or (iii) issue to all or
substantially all the holders of Shares by way of a stock dividend or otherwise
Shares or securities convertible into Shares, the Conversion Price shall, on the
effective date of such subdivision or consolidation or on the record date of
such stock dividend, as the case may be, be adjusted to that amount which is the
same proportion to the Conversion Price in effect immediately prior to such
subdivision or consolidation or stock dividend as the number of outstanding
Shares before giving effect to such subdivision or consolidation or stock
dividend bears to the number of outstanding Shares after giving effect to such
subdivision or consolidation or stock dividend. Such adjustment shall be made
successively whenever any event referred to in this section 2.5 shall occur; and
any such issue of Shares by way of stock dividend shall be deemed to have been
made on the record date for the stock dividend for the purposes of calculating
the number of Shares under sections 2.6.
2.6 ADJUSTMENT TO CONVERSION PRICE UPON OTHER DISTRIBUTIONS BY
COMPANY. If and whenever prior to the Maturity Date the Company shall fix a
record date for the making of a distribution to all or substantially all the
holders of Shares, (i) shares of any class other than Shares, whether of the
Company or any other company, (ii) rights, options or warrants (other than those
referred to in section 2.5 hereof), (iii) evidences of indebtedness, or (iv)
any other assets, then, in each case, the Conversion Price shall be adjusted
immediately after such record date so that it shall equal the price determined
by multiplying the Conversion Price in effect on such record date by a fraction,
of which the numerator shall be (a) the total number of Shares outstanding on
such record date multiplied by the fair market value of such Shares (as
determined by the Directors of the Company, acting in good faith, and subject to
the prior written consent of The Toronto Stock Exchange), less (b) the aggregate
fair market value (as determined by the Directors of the Company, acting in good
faith, and subject to the prior written consent of The Toronto Stock Exchange)
of such shares, rights, options, warrants, evidences of indebtedness or other
assets issued or so distributed, and of which the denominator shall be the
amount determined in (a) of this subsection; and any Shares owned or held by or
for the account of the Company shall be deemed not to be outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed. To the extent that any such distribution
is not so made, the Conversion Price shall be readjusted to the Conversion Price
in effect immediately prior to the record date or to the Conversion Price that
would be then in effect based upon such shares, rights, options, warrants,
evidences of indebtedness or other assets actually issued or distributed, as
the case may be.
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2.7 PROVISO. No adjustment to the Conversion Price shall be made in
respect of any event described in subsection 2.6 if the Lender is allowed to
participate as if it had converted the Note prior to the applicable record date
or effective date. The Lender acknowledges that its participation in such an
event described in subsection 2.6 shall be subject to the prior written consent
of The Toronto Stock Exchange.
2.8 AMENDMENTS TO BE DELIVERED TO BORROWER. The Company shall not
enter into a consolidation, merger or amalgamation with or into any other body
corporate until the Company, the Borrower and the Lender execute and deliver all
such amendments to the Share Conversion Right as are required by the Lender,
acting reasonably, to ensure that the rights of the Lender under the Share
Conversion Right are not adversely affected by such consolidation, merger or
amalgamation.
2.9 EXCHANGES RATES; CONVERSION BETWEEN US AND CANADIAN DOLLARS. For
the purpose of determining the number of Common Shares to be issued to the
Lender upon exercise of the Share Conversion Right, the rate of exchange between
Canadian dollars and U.S. dollars (the "Rate of Exchange") shall be 1.3722
Canadian dollars per U.S. dollar, being the noon spot rate quoted by the Bank of
Canada for purchases of U.S. dollars with Canadian dollars on February 29, 1996,
the date notice to The Toronto Stock Exchange of the transaction contemplated
hereby was given by the Company.
3. INTEREST
3.1 RATES OF INTEREST. The Borrower shall pay interest ("Interest")
to the Lender (c/o Account No. 0000000, as set forth on the first page of this
Agreement) on the aggregate amount of the Advance outstanding at a rate per
annum computed in all cases on the basis of a year of 360 days and determined
for the actual days the Advance is outstanding from the date of the Advance at
a rate equal to 9.5%. For the purposes of the INTEREST ACT (Canada), the annual
rate to which the foregoing rate is applicable is the foregoing rate multiplied
by the number of days in the year (being 365 or 366, as the case may be) divided
by 360.
3.2 CALCULATION AND PAYMENT OF INTEREST. Interest on the Advance and
all other amounts owing to the Lender under the terms of this Agreement will be
calculated and compounded semi-annually in arrears and in respect of any six
month period during which any amounts are outstanding hereunder and shall be
paid by the Borrower to the Lender on the third Business Day after the end of
each six month period.
3.3 OVERDUE PAYMENTS. Any amount not paid when due hereunder will
bear interest from the due date until paid in full at the rate of interest
determined pursuant to section 3.1.
4. PAYMENT
4.1 REPAYMENT. Subject to other provisions hereof requiring earlier
repayment, the Borrower shall pay to the Lender (c/o Account No. 0000000, as set
forth on the first page of this Agreement) the balance outstanding of the
Advance and Interest and all other Indebtedness in full on March 19, 1998 (the
"Maturity Date").
4.2 OPTIONAL PREPAYMENT. The Borrower may not prepay the Advance in
whole or in part at any time without the prior written consent of the Lender.
4.3 ACCELERATION BY LENDER. If the Company, within six months of the
date of this Agreement, completes an offering of Shares or securities
convertible into Shares pursuant to which net proceeds to the Company (after
deduction of all expenses associated with such offering) are at least
$5,000,000, the Lender may, within 30 days of completion of such offering,
provide written notice to the Borrower that the Lender has elected to accelerate
the term of the Advance and the Borrower shall within 10 Business Days of
receipt of such notice repay the principal amount of the Advance then
outstanding against delivery of the Promissory Note by the Lender.
4.4 PAYMENTS IN IMMEDIATELY AVAILABLE FUNDS. All payments required
to be made hereunder shall be made in immediately available funds to such
accounts as the Lender may from time to time designate, free and clear of and
without any withholding or deduction for present or future Taxes. If, for the
purposes of obtaining judgment in any court in any country, it becomes necessary
to convert into any other currency (the "Judgment Currency") an amount due in
U.S. Dollars, the conversion shall be made at the Rate of Exchange.
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4.5 PAYMENT WITHHOLDINGS. In the event that any applicable law
requires that any Tax be withheld from any amount paid or payable hereunder, the
Borrower shall pay on demand to the Lender such additional amounts (including
any Tax payable in respect of such additional amounts) as may be necessary in
order that every net dollar received by the Lender with respect to principal,
interest and other amounts required hereunder will not be less than the full
amount provided for herein.
5. CONDITIONS TO ADVANCES
5.1 CONDITIONS PRECEDENT TO THE ADVANCE. The obligation of the
Lender to make the Advance is subject to the fulfillment of the following
conditions precedent on or prior to the date hereof:
5.2 WAIVER OF CONDITIONS PRECEDENT. The Lender may, at its option,
waive compliance by the Company or the Borrower with any condition precedent to
its obligations to make the Advance. No waiver of any such condition precedent
will constitute a waiver with respect to any other condition precedent.
6. REPRESENTATIONS AND WARRANTIES OF THE BORROWER
6.1 GENERAL. The Company and the Borrower represents and warrants to
the Lender as follows (and acknowledges that the Lender is relying upon the
representations and warranties set out herein and that no investigation at any
time made by or on behalf of the Lender or any information which has or may
hereafter come to the Lender's attention will diminish in any respect whatsoever
its rights to rely thereon):
6.2 AUTHORITY. The execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations hereunder and
thereunder have been duly authorized by all necessary corporate actions of the
Company and, upon its execution and delivery, this Agreement will constitute
legal, valid and binding agreements enforceable against the Company in
accordance with its terms.Material Adverse Change. There has been no material
adverse change in the business, assets, financial condition or prospects of the
Company or any of its Subsidiaries since May 31, 1995.
6.3 ISSUANCE OF SHARES. The Shares will, upon their issuance, be
duly authorized and validly allotted and issued as fully paid and non-assessable
shares in the capital of the Company, free and clear of any and all mortgages,
liens and encumbrances and listed and posted for trading on the Toronto Stock
Exchange.
6.4 NO RESALE RESTRICTIONS. The Shares issuable upon conversion of
the principal amount of the Promissory Note issued in respect of the Advance
will be subject to a 12-month hold period under the SECURITIES ACT (British
Columbia) commencing on the date of issuance of the Promissory Note upon the
conversion of which they were issued and may also be subject to other
restrictions on resale under applicable laws and regulatory requirements, and
any sale by the Lender of such Shares must be made in compliance with or on the
basis of an exemption from the registration and prospectus requirements of
applicable securities legislation.
6.5 REPORTING ISSUER STATUS. The Company is a reporting issuer under
the securities legislation of British Columbia and Ontario and is in compliance
with the requirements of the securities legislation of British Columbia and is,
other than with respect to omissions which do not have and could not reasonably
be expected to have a material adverse effect on the Borrower, in compliance
with the requirements of the securities legislation of, Ontario and British
Columbia.
6.6 REPRESENTATIONS AND WARRANTIES OF THE LENDER. The Lender
represents and warrants to the Borrower and the Company (and acknowledges that
the Borrower and the Company are relying upon the representations and warranties
set out herein and that no investigation at any time made by or on behalf of the
Borrower or the Company or any information which has or may hereafter come to
the their attention will diminish in any respect whatsoever their rights to rely
thereon) that the Lender has all necessary capacity to enter into and carry out
its obligations under this Agreement and this Agreement has been duly executed
and delivered by the Lender and will constitute legal, valid and binding
agreements enforceable against the Lender in accordance with its terms. The
Lender agrees to execute all necessary undertakings and acknowledgements
prescribed by regulatory authorities and the Vancouver and Toronto Stock
Exchanges in connection with the transaction contemplated in this Agreement.
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7. COVENANTS OF THE BORROWER. The Borrower covenants and agrees with the
Company that upon delivery of a Conversion Notice by the Lender to the Borrower
from time to time pursuant to section 2.2 of this Agreement, the Borrower shall
forthwith cause the number of common shares of the Borrower that is the next
highest whole number of common shares equal one-tenth the number of Shares
issuable by the Company pursuant to such Conversion Notice to be issued to the
Company as fully paid and non-assessable common shares in the capital of the
Borrower and shall cause a certificate or certificates representing such shares
to be delivered to the Company.
8. EVENTS OF DEFAULT AND REMEDIES
8.1 EVENTS OF DEFAULT. Subject to the expiry of the applicable grace
period, if any, set out below, the occurrence of any of the following events
(herein called an "Event of Default") will, at the option of the Lender,
terminate all obligations of the Lender hereunder and in addition to and not in
limitation of all rights of the Lender to demand the repayment of all
Indebtedness will, at the option of the Lender, make the principal amount of the
Advance, Interest and all other Indebtedness immediately due and payable, all
without demand, presentment, notice or further notice, as the case may be, all
of which are hereby expressly waived:
8.1.1 FAILURE TO REPAY PRINCIPAL. Failure to repay the
principal amount of the Advance due hereunder within three Business Days of
the due date thereof.
8.1.2 FAILURE TO PAY INTEREST AND OTHER AMOUNTS. Failure to
pay Interest or any other amount due hereunder within three Business Days
of the due date thereof.
8.1.3 BREACH OF COVENANT. Failure by the Borrower to perform
or observe any term, covenant or condition of this Agreement, other than
the payment of the principal amount of the Advance, Interest or other
amounts owing hereunder, and any such failure continues unremedied for a
period of five days after the receipt of written notice thereof from the
Lender, provided that if the failure can not, in the reasonable opinion of
the Lender, by its nature be cured within such five day period, the
Borrower will not be considered to be in default if and for so long as the
failure has not had a material adverse effect on the Borrower or the
Project and the Borrower proceeds with all reasonable dispatch to take the
necessary remedial action.
8.1.4 INSOLVENCY, RECEIVER OR TRUSTEE. The Borrower or the
Company becomes insolvent, admits in writing its inability to pay its debts
as they mature or become due, makes any assignment for the benefit of its
creditors seeks relief under any moratorium or reorganization statute, or
applies for or consents to the appointment of or the taking of possession
by a liquidator, custodian, receiver, receiver-manager, assignee,
sequestrator, trustee or similar official for it or for a substantial part
of its properties, assets or businesses, or such a liquidator, custodian,
receiver, receiver-manager, assignee, sequestrator or trustee or similar
official otherwise is appointed and is not discharged within 20 days after
such appointment unless the relevant company is in good faith contesting
such appointment.
8.1.5 BANKRUPTCY OR DISSOLUTION. Any bankruptcy, insolvency,
reorganization, liquidation or winding-up proceeding in respect of the
Borrower or the Company other proceeding for relief by the Borrower or the
Company under any bankruptcy, insolvency, relief of debtors or other
similar legislation, whether now or hereafter in effect, is instituted by
or against the Borrower or the Company, unless such proceeding is
terminated within 20 days after its institution, or any order, judgment or
decree is entered in respect of the Borrower or the Company decreeing its
liquidation, dissolution, division or winding-up or other similar action,
or a meeting is called of or a proposal is made to a substantial portion of
the creditors of the Borrower or the Company for the purpose of effecting a
composition, moratorium or extension of debt.
8.1.6 BREACH OF REPRESENTATION OR WARRANTY. Any representation
or warranty made or deemed to be made herein or in any agreement or other
document contemplated hereby or in any statement or certificate at any time
given in writing pursuant hereto or in connection herewith is, at the time
given, made or deemed to be made, inaccurate, false or misleading.
8.1.7 REMEDIES. Upon the occurrence of any Event of Default
and at any time thereafter, provided that the Borrower or the Company has
not at that time remedied all outstanding Events of Default, the Lender
may, in its sole discretion, by written notice of default given to the
Borrower, declare this Agreement to be in default.
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If the Borrower or the Company fails to cure all outstanding Events of
Default within 10 days from the receipt by it of the notice of default,
then at any time thereafter, or concurrently with the receipt by the
Borrower of the notice of default in the case of the Event of Default for
which there is no grace period, the Lender in its sole discretion and
subject to compliance with any mandatory requirements of applicable law
then in effect, may exercise any or all of the following rights and take
any or all of the following actions (each without prejudice to the Lender's
right to convert into common shares of the Company the principal amount of
the Promissory Notes issued in respect of the Advance outstanding at such
time):
8.1.8 REMEDIES CUMULATIVE. No remedy herein conferred on the
Lender is intended to be exclusive. Each remedy is cumulative and is in
addition to every other remedy given hereunder or now or hereafter existing
at law or in equity or by statute or otherwise. The exercise or
commencement of exercise by the Lender of any of such remedies will not
preclude the simultaneous or subsequent exercise by the Lender of any other
such remedies.
8.1.9 WAIVER. The Lender may, in its sole discretion, by
written instrument at any time and from time to time, waive any breach by
the Borrower or the Company of any of the covenants herein. No course of
dealing between the parties hereto nor any delay in exercising any rights
hereunder or under any other security will operate as a waiver of any
rights of the Lender.
8.1.10 FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on
the part of the Lender in the exercise of any power, right or privilege
hereunder will operate as a waiver thereof and no single or partial
exercise of any such power, right or privilege will preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. All rights and remedies existing under this Agreement, the
Promissory Notes to be issued in respect of the Advance are cumulative to
and not exclusive of any rights or remedies otherwise available.
9. MISCELLANEOUS
9.1 NOTICES. Any notice, direction or other instrument required or
permitted to be given under this Agreement shall be in writing and may be given
by delivering the same to the appropriate address set out below or by sending
the same by telecopier to the appropriate address set out below:
9.2 SET-OFF OR COUNTERCLAIM. The obligation of the Borrower to pay
or perform the Indebtedness is absolute and unconditional and will not be
limited or affected by any circumstance including, without limitation:
9.3 AMENDMENTS. This Agreement and any provision hereof may be
amended, waived, discharged or terminated only by an instrument in writing
signed by the party against whom enforcement of the amendment, waiver, discharge
or termination is sought. Any such amendment shall be subject to and
conditional upon the written approval of The Toronto Stock Exchange.
9.4 TIME OF ESSENCE. Time is of the essence of this Agreement in
respect of all payments to be made hereunder and all covenants and agreements to
be performed and fulfilled. Any extension of time hereunder will not be deemed
to be or to operate at law as a waiver on the part of the Lender of this
provision that time is of the essence of this Agreement.
9.5 ASSIGNMENT. No party may assign any of its rights or obligations
hereunder without the prior written consent of the other parties.
9.6 SEVERABILITY. If any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect in any
jurisdiction, the validity, legality and enforceability of such provision will
not in any way be affected or impaired thereby in any other jurisdiction and the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.
9.7 PARTIES IN INTEREST. This Agreement will enure to the benefit of
and be binding on the parties hereto and their respective successors and
permitted assigns.
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9.8 APPLICABLE LAW. This Agreement and the rights and obligations of
the parties hereto will be governed by the laws of British Columbia and the laws
of Canada applicable therein, except as may otherwise be expressly provided
herein or therein. The parties hereby attorn to the non-exclusive jurisdiction
of the courts of British Columbia.
9.9 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and undertakings, whether oral or written, relative to the subject
matter hereof except as otherwise provided herein.
9.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
counterparts, each of which when so executed shall be deemed to be an original
and both of which together shall constitute one and the same document.
9.11 PAYMENT DATES. Unless otherwise provided herein, if the date
upon which any act or payment hereunder is required to be done or made falls on
a day which is not a Business Day, then such act or payment will be performed or
made on the next following Business Day.
9.12 LENDER RECORDS. The records of the Lender as to the state of
accounts between the parties shall constitute prima facie proof of the relevant
fact.
9.13 NO MERGER OF JUDGMENT. The taking of a judgment on any covenant
contained herein or in the Escrow Agreement or the Pledge Agreement or any other
agreement or document in respect of the Charge or the Share Pledge or any
evidence of or security for payment of the Indebtedness or performance of the
obligations herein contained does not operate as a merger of any such covenant,
affect the Lender's right to interest at the rate and times provided in this
Agreement on any money owing to the Lender under any covenant set out herein or
affect any of the rights or remedies of the Lender. Any such judgment will
provide that interest thereon will be calculated at the same rate and in the
same manner as herein provided at the date of default until such judgment is
fully paid and satisfied.
9.14 SURVIVAL. The representations, warranties, covenants and
agreements herein contained shall survive the making by the Lender of the
Advance and the conversion of the principal amount of the Promissory Notes to be
issued in respect thereof into common shares of the Borrower and continue in
full force and effect thereafter.
GOLDEN QUEEN MINING CO. LTD.
By: /s/ its duly authorized officer
GOLDEN QUEEN MINING COMPANY, INC.
By: /s/ its duly authorized officer
THE XXXXXX X. XXXX CHARITABLE LEAD TRUST DATED 11/30/83
By: /s/ its trustee
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Schedule "A"
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A HOLD PERIOD THAT
EXPIRES ON MARCH 1, 1997 AND MAY NOT BE TRADED IN BRITISH COLUMBIA UNTIL THE
EXPIRY OF THE HOLD PERIOD, EXCEPT AS PERMITTED BY THE SECURITIES ACT (BRITISH
COLUMBIA) AND REGULATIONS MADE UNDER THAT ACT.
PROMISSORY NOTE AND CONVERSION RIGHT
FOR VALUE RECEIVED, the undersigned promises to pay on demand to the order
of The Xxxxxx X. Xxxx Charitable Lead Trust Dated 11/30/83 the sum of Four
Hundred Thousand Dollars ($400,000) of lawful money of the United States of
America, together with Interest (as defined in the convertible loan agreement
dated the 19th day of March, 1996 among Golden Queen Mining Co. Ltd., Golden
Queen Mining Company, Inc. and Xxxxxx Xxxx (the "Agreement")) thereon from the
date hereof.
This Promissory Note and Conversion Right is issued pursuant to and is
subject to the terms and conditions of the Agreement and evidences the right of
The Xxxxxx X. Xxxx Charitable Lead Trust Dated 11/30/83 to acquire securities of
Golden Queen Mining Co. Ltd. pursuant to the terms of the Agreement. This
Promissory Note and Conversion Right is not a negotiable instrument.
IN WITNESS WHEREOF the undersigned have hereunto affixed their common seals
in the presence of their proper officers duly authorized in that behalf this
19th day of March, 1996
GOLDEN QUEEN MINING COMPANY, INC. was hereunto affixed in the presence of:
GOLDEN QUEEN MINING CO. LTD. was hereunto affixed in the presence of:
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