EXHIBIT 10.13
THIS WARRANT INDENTURE made as of the 4th day of February, 1997.
BETWEEN
GEOGRAPHICS, INC., a company duly incorporated pursuant
to the laws of Wyoming and having an office at 0000 Xxxxx Xxxx,
Xxxxxx, Xxxxxxxxxx, X.X.X. 00000
(hereinafter called the "Company")
OF THE FIRST PART
AND:
MONTREAL TRUST COMPANY OF CANADA, a company duly incorporated
pursuant to the laws of Canada and having an office at
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0
(hereinafter called the "Trustee")
OF THE SECOND PART
WHEREAS:
A. The Company proposes to issue, in the aggregate, 1,403,658 warrants (the
"Warrants"):
B. The Company is duly authorized to create and issue the Warrants to be
issued as herein provided;
C. All necessary resolutions of the directors of the Company have been duly
passed and other proceedings taken and conditions complied with to make the
creation and issue of the Warrants proposed to be issued hereunder and this
Indenture and the execution thereof legal, valid and effective:
D. The Trustee has agreed to act a trustee for and on behalf of the
Warrantholders on the terms and conditions herein set forth; and
E. The foregoing recitals are made as representations of fact by the
Company and not by the Trustee.
NOW THEREFORE in consideration of the premises and of the sum of
ONE ($1.00) DOLLAR (the receipt and sufficiency whereof is hereby
acknowledged) it is agreed as follows:
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ARTICLE I
INTERPRETATION
1.01 In this Indenture and the Warrants (except as herein otherwise
expressly provided or unless the context otherwise requires) the following
expressions shall have the respective meanings, namely:
"AUTHORIZED NEWSPAPER" shall mean a newspaper of general circulation in any
place where notice is required to be given hereunder and customarily
published at least once a day for at least 5 days in each calendar week,
whether or not such newspaper is published on Saturdays, Sundays and legal
holidays. It shall not be necessary for any publication made more than once
in any place to be made in the same newspaper;
"BOARD OF DIRECTORS", shall mean the board of directors of the Company;
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday, a legal
holiday or a day on which banking institutions or trust companies are closed
in the City of Vancouver, in the Province of British Columbia;
"CERTIFICATE OF AUTHENTICATION" shall refer to the authentication of the
Trustee endorsed upon the Warrants pursuant to Article II;
"COMPANY" means Geographics, Inc. and its successors and permitted assigns;
"COUNSEL" means a barrister or solicitor or firm of barristers and solicitors
(who may be counsel to the Company) acceptable to the Trustee;
"DIVIDENDS PAID IN THE ORDINARY COURSE" means dividends paid on the Shares in
any fiscal year of the Company, whether in (i) cash, (ii) shares, (iii) rights,
options or warrants (other than to purchase Shares at a price per Share less
than 95% of the current market price of the Shares on the record date for
such dividend) to purchase any securities, property or other assets of the
Company, or (iv) property or other assets of the Company; provided that the
amount or value of such dividends in the aggregate (any such securities,
property or other assets so distributed to be valued at the fair market value
of such securities, property or other assets, as the case may be, as
determined by the directors, with the concurrence of the Trustee) does not in
any such fiscal year exceed the greater of:
(a) 150% of the aggregate amount or value of dividends paid by the
Company of the Shares in its immediately preceding fiscal year; and
(b) 100% of the consolidated net income of the Company (before
extraordinary items) for its immediately preceding fiscal year, as
determined in accordance with generally accepted accounting
principles;
"EXERCISE PRICE" means $4.25 per Share in lawful money of the United States
unless adjusted in accordance with the provisions of Article III, in which
case it shall mean the applicable adjusted exercise price per Share in effect
at the relative time;
"EXPIRY DATE" means May 1, 1999 or such other date as may be established
pursuant to Article III hereof;
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"INDENTURE" shall mean this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented;
"JOINT HOLDERS" and "JOINT REGISTERED HOLDERS" means where there is more than
one person registered as a Warrantholder, any one of such registered
Warrantholders;
"MARKET PRICE" means, for any date or specified period of trading days, the
weighted average price at which the Shares have traded on The Toronto Stock
Exchange, or such other market or exchange in which the Share are then
trading. If the Shares are not then traded on a recognized exchange or
market, the Market Price of the Shares shall be the fair market value of the
Shares as determined in good faith by the Board of Directors of the Company
after consultation with a nationally or internationally recognized investment
dealer or investment banker;
"OFFICER'S CERTIFICATE" in respect of the Company means a certificate signed
by the Chairman of the Board, the President or any Vice-President, together
with any Vice-President, the Secretary, the Treasurer, any Assistant
Secretary or Director of the Company;
"OPINION OF COUNSEL" means an opinion in writing by Counsel who shall be
satisfactory to the Trustee to which the opinion is rendered and who may be
Counsel to the Company. The acceptance by such Trustee of the Opinion of
Counsel shall be sufficient evidence that such Counsel is acceptable to such
Trustee;
"PERSON" includes any individual, corporation, body corporate, partnership,
trust, trustee, unincorporated organization, or other judicial entity, any
government agency and words importing persons have a similar meaning;
"REGISTERED HOLDER" or "HOLDER" shall mean the person or person in whose name
or names a particular warrant shall be registered on the books of the Company
kept for that purpose in accordance with the terms of this Indenture;
"SHARES" means common shares in the issued and outstanding capital of the
Company or any securities into which common shares may be exchanged,
reclassified, reorganized, or otherwise converted.
"TRUSTEE" means Montreal Trust Company of Canada or its successors as such
trustee;
"WARRANTHOLDER" and "HOLDER OF WARRANTS", or other similar terms, means any
person who is, at the time, a Registered Holder of any Warrants; and
"WARRANTS" means the warrants issued pursuant to this Indenture;
"WARRANT CERTIFICATE" or "WARRANT CERTIFICATES" means certificates issued and
representing warrants granted hereunder.
ARTICLE II
THE WARRANTS
2.01 An aggregate of 1,403,658 Warrants may be issued hereunder.
2.02 Each Warrant entitles the holder thereof to purchase prior to the
Expiry Date one (1) fully paid and non-assessable common share in the capital
of the Company, subject to the terms of this Indenture, at a subscription
price of US$4.25 per common share.
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2.03 The Warrant Certificates shall be issued in registered form,
represented by certificates substantially in the form set forth as Schedule
"A" to this Indenture (which is incorporated herein by reference) and shall
bear such distinguishing letters and numbers as the Trustee may approve. The
Warrants may be typewritten, photocopies, engraved, lithographed, printed or
partly in one form and partly in another, as the Company may determine.
2.04 All Warrant Certificates issued hereunder shall be signed by the
Chairman, President and Chief Executive Officer of the Company. The
signature or signatures of all or any one or more of such officers may be
engraved, lithographed, printed or otherwise mechanically reproduced and such
signature or signatures shall be deemed for all purposes to be the signature
of such officer or officers and shall be binding upon the Company,
notwithstanding any change in any of the persons holding the said offices
between the time of actual signing and the certifying and delivery of the
said Warrant Certificates and notwithstanding that the Chairman, President
and Chief Executive Officer signing may not have held office at the date of
this Indenture or at the date of the certifying and delivery thereof.
2.05 (1) No Warrant Certificates shall be issued, or, if issued, shall be
obligatory or shall entitle the holder to the benefit of these presents or
of the trusts hereunder until it has been certified by or on behalf of the
Trustee, and such certification by the Trustee upon any such Warrant shall be
conclusive evidence that the Warrant so certified has been duly issued
hereunder and that the holder thereof is entitled to the benefit of these
presents and of the trusts under this Indenture. The certificate of the
Trustee on any Warrant Certificate shall be substantially in the form set out
in the Schedule "A" hereto or in some other form approved by the Trustee. The
certificate of the Trustee signed on the Warrant Certificates shall not be
construed as a representation or warranty by the Trustee to the validity of
this Indenture or of the said Warrants and the Trustee shall in no respect be
liable or answerable for the use made of the said Warrants or any of them or
the proceeds thereof. The certificate of the Trustee signed on the Warrants
shall, however, be a representation and warranty by the Trustee that the said
Warrants have been duly certified by the Trustee pursuant to the provisions
of this Indenture.
(2) Warrants, to the aggregate limit hereinbefore authorized,
may, forthwith upon the execution hereof or from time to time hereafter, be
issued by the Company and be certified by or on behalf of the Trustee, and be
delivered by the Trustee in accordance with and upon the written order of the
Company (evidenced by a written request signed by the Chairman, President,
and Chief Executive Officer or the Secretary of the Company) upon receipt by
the Trustee of an opinion of counsel to the effect that this Indenture has
been duly executed.
2.06 The Warrants to be issued hereunder shall be in registered form only.
The Company shall at all times cause to be kept, by and at the principal
transfer office of the Trustee in the City of Vancouver or Toronto and at
such other place or places and by the Trustee or such other registrar or
registrars, if any, as the Company, with the approval of the Trustee, may
designate, registers in any one of which shall be entered the names and post
office addresses of the holders of Warrants and particulars of the Warrants
held by them respectively and in which transfers of such Warrants shall be
registered. No transfer of a Warrant shall be valid unless made on one of
such registered by the registered holder or by his executors, administrators
other legal representatives or his or their attorney duly appointed by an
instrument in writing in form and execution satisfactory to the Trustee, and
upon compliance with such reasonable requirements as the Trustee or other
registrar may prescribe and unless such transfer shall have been duly noted
on the said Warrant by the Trustee or other registrar. The Company shall not
permit the transfer of a Warrant to be made except in compliance with all
applicable laws, including without limitation, all securities laws,
regulations, policy statements, orders, rulings and other requirements of
relevant securities regulatory authorities.
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2.07 The holder of Warrants may at any time and from time to time, upon
payment of a reasonable fee to be fixed by the Trustee, transfer the Warrants
held by them respectively from the register in which the registration of such
Warrants appears to another register maintained in another place authorized
for that purpose under the provisions of this Indenture. Such registration
shall be noted on the Warrants by the Trustee or other registrar.
2.08 The Company, with the approval of the Trustee, shall have power at any
time to close any register upon which the entries of the registration of any
Warrants appear (other than those kept in the City of Vancouver) and in that
event shall transfer the records thereof to another existing or new
register, as the case may be. In the event that the register in any place
is closed and the records transferred to a register kept in another place,
notice of such change shall be given, in the manner provided in section 2.09
hereof, to the holders of the Warrants registered in the register so closed.
2.09 (1) All notices given hereunder to the Warrantholders shall be deemed
validly given if sent by first class prepaid mail addressed to such holders
at their post office addresses appearing in the register hereinbefore
mentioned or, in the case of Joint Holders, to the registered address of one
of such Joint Holders. If the Trustee determines that mail service is or is
threatened to be interrupted at the time when the Company or Trustee is
required or elects to give any notice to holders of Warrants, such notice may
be given by means of publication in The Globe and Mail, national edition, or
any other Authorized Newspaper approved by the Trustee. Any notice so given
shall be deemed to have been given on the date it is first published.
(2) All such notices sent by post may be mailed at any place in Canada
where the Company may have established registers in accordance with the
foregoing provisions of this Indenture or partly at one of such places and
partly at another or others. Every notice so sent by post or so published
shall be deemed to have been given on the day when such notice is posted or
on the day upon which it is first published, as aforesaid, as the case may be.
2.10 The registers hereinbefore referred to shall at all reasonable times be
open for inspection by the Company, the Trustee, or any Warrantholder.
2.11 The person in whose name any Warrant shall be registered shall be deemed
and regarded as the owner thereof for all purposes of this Indenture.
2.12 (1) In the case that any of the Warrant Certificates shall become
mutilated or be lost, stolen or destroyed, the Company in its discretion may
issue and thereupon the Trustee, subject to the conditions contained in this
section 2.12, shall certify and deliver, a new Warrant Certificate of like
date and tenor as the one mutilated, lost, stolen or destroyed, in exchange
for and in place of and upon cancellation of the mutilated Warrant
Certificate or in lieu of an in substantiation for the same, if lost, stolen
or destroyed and the substituted instrument shall be in a form approved by
the Trustee.
(2) In the case of loss, theft or destruction, the applicant for a
substituted Warrant Certificate shall, as a condition precedent to the issue
thereof, furnish to the Company and the Trustee such evidence of ownership
and of the loss, theft or destruction of such instrument so lost, stolen or
destroyed as shall be satisfactory to the Company and to the Trustee in their
discretion and such applicant shall also furnish an indemnity in an amount
and form satisfactory to the Company and the Trustee in their discretion and
shall pay the expenses which may be incurred by them and their reasonable
charges in the premises.
2.13 (1) Except as herein otherwise provided, in every case of exchange of
Warrant Certificates of any denomination or form for other Warrant
Certificates, and for any registration of Warrants, and for any transfer of
Warrants, the Trustee or other registrar may make a sufficient
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charge to reimburse it for any stamp taxes or governmental charge required to
be paid and a reasonable charge for its services and, in addition, may charge
a reasonable charge per Warrant issued upon such exchange, registration or
transfer as a condition precedent thereof.
(2) Warrant Certificates of any denomination may be exchanged for
Warrant Certificates of any other authorized denomination or denominations,
any such exchange to be for an equivalent number of Warrants. All exchanges
of Warrants shall be made at the principal transfer office of the Trustee in
the City of Vancouver or at the office or offices of such other registrar or
registrars, if any, or at such other office or offices of the Trustee, if
any, as may from time to time be designated by the Company, with the approval
of the Trustee, for such purpose.
2.14 Every registrar (including the Trustee) shall, when requested to do so
by the Company or by the Trustee, furnish the Company or the Trustee with a
list of the names and addresses of holders of Warrants.
21.5 The Warrant Certificates shall be numbered in such manner as the
Company, with the approval of the Trustee, may determine.
ARTICLE III
EXERCISE AND REDEMPTION OF WARRANTS
3.01 (1) The holder of a Warrant may exercise the right thereby conferred
on such holder to subscribe for Shares by surrendering the Warrant Certificate
representing same, on or prior to the time of Expiry, to the Trustee at its
principal office in the City of Vancouver, British Columbia or at any other
place designated by the Company, with the approval of the Trustee, and notice
of which has been given to the holders of Warrants, together with (a) the
Warrant Certificate with a duly completed and executed Warrant Exercise
Notice substantially in the applicable form set out in Schedule "A" and (b) a
certified cheque, money order or bank draft in lawful money of Canada payable
to or to the order of the Company, at par in the city where such Warrant
Certificate is surrendered for exercise in an amount equal to the Exercise
Price multiplied by the number of shares subscribed for.
(2) The Warrant Exercise Notice referred to in subsection 3.1(1) shall
be signed by the Warrantholder (and, where Shares to be issued are to be
registered in a name other than that of the registered holder of the
Warrants, with the signature guaranteed by a Canadian chartered bank or trust
company, or a recognized member of a Canadian or United States stock exchange
or a member of the Transfer Association Medallion (Stamp) Program) and shall
specify the number of Shares which the holder desires to subscribe for (being
not more than those which the holder is entitled to subscribe for pursuant to
each Warrant Certificate surrendered), the person or persons in whose name or
names such Shares to be issued, the address or addresses of such person or
persons and the number of Shares to be issued to each such person if more than
one is so specified. If any of the Shares subscribe for are to be issued to a
person or persons other than the Warrantholder, the Warrantholder shall pay
to the Trustee or to the registrar and transfer agent for the Shares, as the
case may be, all applicable stamp, issue, registration, transfer or other
similar taxes and duties and the Company shall not be required to issue or
deliver certificates evidencing Shares unless or until such Warrantholder
shall have paid the amount of any such taxes and duties or shall have
established to the satisfaction of the Company that such taxes and duties
have been paid or that no taxes or duties are due, and the Warrantholder
shall have complied with all other reasonable requirements of the Trustee.
3.2 (1) Upon compliance by the holder of any Warrant with the provisions
of subsections 3.1(1) and (2), the number of Shares subscribed for shall be
deemed to have been issued and the
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person or persons to whom such Shares are to be issued shall be deemed to
have become the holder or holders of record of such Shares on the Exercise
Date unless the transfer books of the Company shall be closed on such date,
in which case the Shares subscribed for shall be deemed to have been issued,
and such person or persons shall be deemed to have become the holder or
holders of record of such Shares, on the date on which such transfer books
were reopened, but such Shares shall be issued at the Exercise Price in
effect on the Exercise Date.
(2) When the registers of the Company have been open for three (3)
Business Days after the due exercise of any Warrant as aforesaid, the Company
shall forthwith (i) cause to be mailed to the person or persons in whose name
or names the Shares so subscribed for are to be issued, as specified in the
Warrant Exercise Notice, to the address(es) specified in such Warrant
Exercise Notice or (ii) if so specified in such Warrant Exercise Notice,
cause to be delivered to such person or persons at the office of the Trustee
where the Warrant Certificate(s) were surrendered, a share certificate or
certificates for the appropriate number of Shares which the Warrantholder is
entitled to and has elected to subscribe for pursuant to the Warrant
Certificate(s) surrendered.
3.3 (1) A Warrantholder may subscribe for a number of Shares less than the
number which the holder is entitled to subscribed for pursuant to the
surrendered Warrant Certificate, provided that in no event shall fractional
Shares be issued with regard to Warrants exercised. In such event, such
holder upon exercise thereof shall receive a new Warrant Certificate
(complying with subsection 2.03 in respect of the balance of the Shares which
such holder was entitled to but did not subscribe for.
(2) Notwithstanding any adjustment provided for in Section 3.7 or
otherwise, the Company shall not be required, upon the exercise of any
Warrant, to issue fractions of shares or to distribute certificates which
evidence fractional Shares. In lieu of fractional Shares, each registered
holder of a Warrant Certificate as of the effect date or record date of the
event giving rise to the adjustment and representing an entitlement to
subscribe for a fractional number of Shares as a result of an adjustment
provided for in Section 3.7 shall be entitled to round up his or her
subscription to the next highest whole number of shares at the prevailing
Exercise Price per Share.
3.4 Subscriptions for Shares upon the exercise of Warrants will not be
accepted from any person or agent of a person who is or appears to be, or who
the company or the Trustee has reason to believe, is a resident of any
jurisdiction other than a Canadian or United States jurisdiction unless the
Shares may lawfully be sold in such other jurisdiction and to such person at
the time. In addition, the Warrant Certificates and the Warrants evidenced
thereby may not be assigned, transferred or otherwise conveyed to any person
or agent of a person who appears to be, or who the assignor has reason to
believe is, a resident of such non-Canadian and non-United States
jurisdiction unless the Warrants and the Shares issuable upon exercise of the
Warrants may lawfully be sold in such other jurisdiction and to such person
at the time.
3.5 After the applicable Time of Expiry, all rights under any Warrant which
has not theretofor been exercised in accordance with the terms hereof and
thereof, shall wholly cease and terminate and such Warrant shall by void and
of no effect.
3.6 All Warrant Certificates surrendered to the Trustee pursuant to Sections
2.13, 3.3, 3.4, 3.1 or 3.2 shall be cancelled by the Trustee and retained
for safekeeping until a date which is six years following the applicable
Time of Expiry, following which date Warrant Certificates so held may be
destroyed unless the Company directs otherwise, provided that the Trustee
shall furnish the company with a destruction certificate identifying the
Warrant Certificates so destroyed and the number of Warrants represented
thereby.
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3.7 Subject to subsection 3.7(2), the Exercise Price per Share, and the
number of shares which may be subscribed for upon exercise of the Warrants
shall each be subject to adjustment from time to time in the events and in
the manner provided as follows:
(1) If and whenever at any time prior to the Time of Expiry, the
Company shall:
(a) declare a dividend or make a distribution on its Shares payable in
shares, other than a dividend paid in the ordinary course, or
(b) subdivide its outstanding Shares into a greater number, or
(c) consolidate its outstanding Shares into a smaller number
(any of such events in these clauses (a), (b) and (c) being called a "Share
Reorganization") then, effective immediately after the record date at which
the holders of Shares are determined for the purposes of the Share
Reorganization, the Exercise Price per Share shall be adjusted by multiplying
the applicable Exercise Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Shares
outstanding on such record date before giving effect to such Share
Reorganization and the denominator of which shall be the number of Shares
outstanding immediately after giving effect to such Share Reorganization.
(2) If and whenever, at any time prior to the Time of Expiry, the
company shall fix a record date for the issuing of rights, options or
warrants to all or substantially all of the holders of the Shares entitling
them for a period expiring not more than forty-five (45) days after such
record date (the "Rights Period") to subscribe for Shares (or securities
convertible into or exchangeable for Shares) at a price per share (or having
a conversion or exchange price per share) which is less than 95% of the
Market Price per share on the record date for such issue (any of such
events being called a "Rights Offering"), then, effective immediately after
the end of the rights Period, the Exercise Price per Share shall be
adjusted to a price determined by multiplying the applicable Exercise Price
in effect immediately prior to the end of the Rights Period by a fraction:
(a) the numerator of which shall be the sum of:
(i) the number of Shares outstanding as of the record date for
the rights Offering, and
(ii) a number determined by dividing (1) either (a) the product of
the number of Shares issued or subscribed during the Rights
Period upon exercise of the rights, warrants, or options under
the Rights Offering and the price at which such Shares are
offered, or, as the case may be, (b) the product of the
exchange or conversion price of the convertible or
exchangeable securities so offered and the number of Shares
for or into which the convertible or exchangeable securities
issued or subscribed during the Rights Period upon the exercise
of the rights, warrants or options are convertible or
exchangeable, by (2) the Market Price per Share as of the
record date for the Rights Offering, and
(b) the denominator of which shall be the number of shares outstanding
(including the number of Shares actually issued or subscribed for
during the Rights Period upon exercise of the rights, warrants or
options under the Rights Offering) or which would be outstanding
upon the conversion or exchange of all convertible or exchangeable
securities issued or subscribed during the Rights Period upon
exercise of the rights, warrants or options under the rights
Offering, as applicable, in each case after giving effect to the
Rights Offering.
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Shares owned by or held (otherwise than as security) for the account of
the Company or any Subsidiary of the Company shall be deemed not to be
outstanding of the purpose of any such computation. In order to give effect
to the provisions of subsection 3.7(5) in the circumstances described below,
any holder of Warrants who shall have exercised his right to purchase Shares
in accordance with subsection 3.4(1) during the period beginning immediately
after the record date for a Rights Offering and ending on the last day of the
Rights Period therefor shall, in addition to the Shares, as applicable, to
which he or she is otherwise entitled upon such exercise in accordance with
subsection 3.1(1), be entitled to that number of additional Shares equal to
the result obtained when difference, if any, between the Exercise Price per
Share in effect immediately prior to the end of such Rights Offering and the
Exercise Price per Share as adjusted for such Rights Offering pursuant to
subsection 3.7(2), is multiplied by the number of Shares purchased upon the
exercise of the Warrants held by such Warrantholder during such period, and
the resulting product is divided by the Exercise Price per Share as adjusted
for such Rights Offering pursuant to this subsection 3.7(2); provided that
the provisions of subsection 3.3(2) shall be applicable, MUTATIS MUTANDIS, to
any fractional interest in a Share to which such Warrantholder might
otherwise be entitled under the foregoing provisions of this subsection
3.7(2). Such additional Shares (excluding any additional Shares purchasable
by virtue of the operation of subsection 3.7(2)) shall be deemed to have been
issued to the Warrantholder immediately following the end of the Rights
Period and a certificate for such additional Shares shall be delivered to
such Warrantholder within ten (10) Business Days following the end of the
Rights Period.
(3) If and whenever at any time prior to the time of Expiry the
company shall fix a record date for the payment, issue or the distribution to
all or substantially all of the holders of the Shares of (i) a dividend, (ii)
cash or assets (including evidences of the Company's indebtedness), or (iii)
rights or other securities (including without limitation securities
convertible into or exchangeable for Shares), if such issue or distribution
does not constitute a dividend paid in the ordinary course, a Share
Reorganization of a Rights Offering (any or such non-excluded events being
herein called a "Special Distribution"), the Exercise Price pre Share shall
be adjusted effective immediately after such record date to a price
determined by multiplying the applicable Exercise Price in effect on such
record date by a fraction:
(a) the numerator of which shall be:
(i) the product of the number of shares outstanding on such record
ate and the Market Price per Share on such record date; less
(ii) the fair market value, as determined by action of the directors
(whose determination shall be conclusive), to the holders of the
Shares of such dividend, cash, assets, rights or securities so
paid, issued or distributed, and
(b) the denominator of which shall be the number of Shares outstanding on
such record date multiplied by the Market Price per Share on such
record date.
Any Shares owned by or held (otherwise than as security) for the account of
the company or any Subsidiary of the Company shall be deemed not to be
outstanding the purpose of any such computation.
(4) If and whenever, at any time prior to the time of Expiry, there
shall be a reclassification of Shares outstanding at such time or change of
the Shares into other shares or into other securities (other than a Shares
Reorganization), or a consolidation, amalgamation, arrangement or merger of
the Company with or into any other corporation or other entity (other than a
consolidation, amalgamation, arrangement or merger which does not result in
any
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reclassification of the outstanding shares or a change of the Shares into
other shares), or any sale, transfer, lease or conveyance of the undertaking
or assets of the Company as an entirety or substantially as an entirety to
another corporation or entity (any of such events being herein called a
"Capital Reorganization"), any Warrantholder who exercises his or her right
to subscribe for and purchase Shares pursuant to the exercise of Warrant(s)
then held after the effective date of such Capital Reorganization shall be
entitled to receive, and shall accept for the same aggregate consideration in
lieu of the number of shares to which such holder was thereto fore entitled
upon such exercise the aggregate number of shares, other securities or other
property which such holder would have been entitled to receive as a result of
such Capital Reorganization if, on the effective date thereof, the
Warrantholder had been the registered holder of the number of Share to which
such holder was theretofor entitled to subscribe for and purchase upon
exercise of such Warrants. If determined appropriate by the directors in
their sole discretion, acting reasonably, and subject to the prior written
consent of the TSE, appropriate adjustments shall be made as a resell of any
such Capital Reorganization in the application of the provisions set forth in
this Article III with respect to the rights and interest thereafter of
holders of Warrants to the end that the provision set forth in this Article
III shall thereafter correspondingly be made applicable as nearly as may
reasonably be in relation to any shares, other securities or other property
thereafter deliverable upon the exercise of any Warrant. Any such adjustment
shall be made by and set forth in an Indenture supplemental hereto approved
by action by the directors and entered into pursuant to the provisions of
Article VI and shall for all purpose be conclusively deemed to be an
appropriate adjustment.
(5) If and whenever any time prior to the Time of Expiry there shall
occur a Capital Reorganization, a Rights Offering or a Special Distribution
and any such event results in an adjustment of the Exercise price per Share
pursuant to the provisions of this Section 3.7, the number of shares issuable
upon exercise of each Warrant (at the Exercise Price per Share) shall each be
adjusted contemporaneously with the adjustment of the Exercise Price by
multiplying the number of Shares theretofor purchasable on the exercise
thereof by a fraction, the numerator of which shall be the applicable
Exercise Price in effect immediately prior to such adjustment and the
denominator of which shall be applicable Exercise Price resulting from such
adjustment.
3.8 for the purposes of Section 3.7 hereof:
(1) Any adjustment pursuant to Section 3.7 shall be cumulative and
made successively whenever an event referred to therein shall occur, subject
to the following provisions:
(a) all calculations under Section 3.7 shall be made to the nearest
1/100th of a Share:
(b) no adjustment to an Exercise Price per share shall be required
unless such adjustment would result in a change of at least 1% in
the prevailing Exercise Price per Share and no adjustment shall be
made in the number of share which may be subscribed for upon
exercise of a Warrant unless it would require a change of at
least one one-hundredth (1/100th) of a Share, provided, however,
that any adjustment which, except for the provisions of this
subsection 3.8(1)(b) would otherwise have been required to be made,
shall be carried forward and taken into account in any subsequent
adjustment and provided further, that in no event shall the Company
be obligated to issue fractional Shares or fractional interest in
Shares upon exercise of Warrants;
(c) no adjustment to an Exercise Price per Share or in the number of
shares which may be subscribed for upon exercise shall be made in
respect of any event described in subsection 3.7(2) if holders of
Warrants are entitled to participate in such event on the same
terms MUTATIS MUTANDIS as if such Warrantholders had exercised
their Warrants prior to or on the effective date or record date of
such event, any such
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participation by holders of Warrants being subject to the prior
written consent of the TSE;
(d) if a dispute shall at any time arise with respect to adjustments
to the Exercise Price per Share or the number of shares
purchasable pursuant to the subscription rights represented by the
Warrants, such disputes shall be conclusively determined by the
Company's auditors or, if they are unable or unwilling to act,
by such other firm of independent chartered accountants as may
be selected by action by the directors and any such determination
shall be conclusive evidence of the correctness of any adjustments
made under Section 3.7 and shall be binding upon the Company,
subject to the prior written consent of the TSE;
(e) if the Company shall set a record date to determine the holders
of its Shares for the purpose of entitling them to receive any
dividend or distribution or any subscription or purchase rights,
options or warrants and shall, thereafter and before the
distribution to such Shareholders of any such dividend,
distribution or subscription or purchase rights, legally
abandon its plan to pay or deliver such dividend, distribution or
subscription or purchase rights, then no adjustment in the
Exercise Price per Share or the number of Shares purchasable
upon exercise of any Warrant shall be required by reason of the
setting of such record date;
(f) in any case in which Section 3.7 shall require than an
adjustment shall become effective immediately after a record
date for an event, the Company may defer until the occurrence
of such event issuing to the holder of any Warrant exercised
after such record date and before the occurrence of such event
the additional Shares issuable upon such exercise by reason of
the adjustment required by such event over and above the shares
issuable upon such exercise before giving effect to such
adjustment; provided, however, that the Company shall deliver to
such holder an appropriate instrument evidencing such holder's
right to receive such additional Shares (and the right to receive
any dividends or other distributions which, but for the provisions
of this clause, such holder would have been entitled to receive
in respect of such additional Shares from and after the Exercise
Date of such Warrant) upon the occurrence of the event requiring
such adjustment;
(g) in the event that the price per Share of a Rights Offering is
not expressed in United States funds, the Trustee shall convert
the price per Share of the Rights Offering to United States funds
on the basis of the spot rate of exchange quoted at the close of
business on the Business Day immediately preceding the relevant
date by the United States Bank for the purpose of determining
whether such price per Share of the Rights Offering is less than
95% of the Market Price per Share; and
(h) in the absence of a resolution of the directors fixing a record
date for a Rights Offering or Special Distribution, the Company
shall be deemed to have fixed as the record date therefor the
date on which the Rights Offering or Special Distribution is
effected.
3.9 As a condition precedent to the taking of any action which would require
an adjustment pursuant to Section 3.7, the Company shall take any action
which may, in the opinion of counsel, be necessary in order that the Company
have unissued and reserved in its authorized capital and may validly and
legally issue as fully paid and non-assessable all the Shares (or other
securities as applicable) which the holders of Warrants are entitled to
received on the full exercise thereof in accordance with the provisions
hereof, subject to the prior written consent of the TSE.
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3.10 (1) At least fourteen (14) days prior to the effective date or
record date, as the case may be, of any event which requires or might
require adjustment in any of the subscription rights pursuant to any of the
Warrants, including the applicable Exercise Price per Share and the number
of Shares which are purchasable upon the exercise thereof, the Company shall:
(a) file with the Trustee a certificate of the Company specifying
the particulars of such event and, if determinable, the required
adjustment and the computation of such adjustment; and
(b) give written notice to the Warrantholders of the particulars of
such event and, if determinable, the required adjustment, in the
manner provided in Section 7.04.
(2) In the case of any event notice of which is required pursuant to
subsection 3.10(1) but in respect of which the required adjustment is not
determinable at the time of such notice, the Company shall promptly after
such adjustment is determinable:
(a) file with the Trustee a computation of such adjustment;
(b) give written notice to the Warrantholders of such adjustment in
the manner provided in Section 2.09
(3) The Trustee shall be entitled to rely conclusively on the
certificates of the Company filed pursuant to this Section 3.10, as to
the contents thereof.
3.11 The Trustee (i) shall not, at any time, be under any duty or
responsibility to any Warrantholder to determine whether any fact exist which
may require any adjustment contemplated by Section 3.7, or to verify the
nature or extent of any such adjustment when made, or the method employed in
making the same; and (ii) shall not be accountable with respect to the
validity or value (or the kind or amount) of any Shares or of any other
securities or properties which may at any time be issued or delivered upon
the exercise of the subscription right attaching to any Warrants.
ARTICLE IV
COVENANTS
4.01 The Company will furnish or cause to be furnished to the Trustee or its
duly authorized agent or attorney such information relating to its business
as the Trustee may reasonably require for the purposes of enabling the
Trustee to carry out its duties under this Indenture.
4.02 The Company will comply with all applicable laws, statutes, orders,
rules, regulations, notices or policies of all governmental authorities if the
failure to comply therewith might reasonably be expected to adversely affect
its financial condition or its ability to carry on any of its business.
4.03 The Company will at all times indemnify and save harmless the Trustee
from all loss, costs, charges, damages and expenses borne by the Trustee in
performing its duties hereunder or which may be claimed against the Trustee
in relation thereto and it will pay the fees, charges and expenses of the
Trustee and its agents and representatives in relation to the performance by
the Trustee of all it duties hereunder and in relation to the registration
of this Indenture in all offices of record where the recording thereof is
necessary for the protection of the security constituted hereby and the issue
of the Warrants, and without limiting the generality of the foregoing, the
Company will pay all costs, charges and expenses incurred by the Trustee
and its agents and representatives of or incidental to the preparation and
filing of any discharge, amendment, financing change
statement or similar document from time to time for purpose of amending or
discharging in whole or in part the changes created hereby or any
registration in respect thereof.
4.04 Whenever necessary to avoid or fill a vacancy in the office of the
Trustee, to appoint a Trustee, so that there shall at all times be a Trustee
hereunder.
ARTICLE V
ADMINISTRATION OF THE TRUST AND PROTECTION OF THE TRUSTEE
5.01 By way of supplement to the provisions of any Act of any of the
Provinces of Canada for the time being relating to trustees, and in addition
to any other provision of this Indenture for the relief of the Trustee, it is
expressly declared that:
(a) the Trustee may, in relation to these presents, act on the
opinion or advice of or information obtained from any lawyer,
valuer, auditor, broker, auctioneer or other expert, whether
obtained by the Trustee or by the Company or otherwise, but
shall not be bound to act to act upon such opinion or advice
and shall not be responsible for any loss occasioned by so
acting or not acting as the case may be, and may employ such
assistance as may be necessary to the proper discharge of its
duties and may pay proper and reasonable compensation for all
such legal and other advice or assistance as aforesaid;
(b) any such advice or opinion or information may be sent or
obtained by letter, telegram, radio, cablegram, telecopier and
telex and that the Trustee shall not be liable for acting on
any advice, opinion or information purporting to be conveyed
by any such means, although the same shall contain some error
or shall not be authentic;
(c) the Trustee shall be at liberty to accept an Officer's
Certificate as sufficient evidence of the facts stated in such
certificate and the Trustee shall be in no way bound to call
for further evidence or be responsible for any loss that may
be occasioned by its failing to do so;
(d) the Trustee shall only be accountable for reasonable
diligence in the management of the trusts hereof and shall
only be liable for its own willful acts and defaults and shall
not be liable for any act or default on the part of any agent
or co-trustee or for having permitted any agent or co-trustee
to receive and retain any monies payable to the Trustee
hereunder;
(e) the Trustee shall not be responsible for any misconduct on
the part of any person appointed by it hereunder, or bound to
supervise the proceedings of any such appointee;
(f) the Trustee shall not, except as otherwise expressly
provided herein, be bound to give notice to any person or
persons of the execution hereof nor in any way interfere with
the conduct of the Company's business;
(g) the Trustee, except as herein otherwise provided, shall, as
regards all the trusts, powers, authorities and discretion
vested in it, have absolute and uncontrolled discretion as to
the exercise thereof and, in the absence of fraud, it shall
not be responsible for any loss, costs, damage or
inconvenience that may result from the exercise or non-exercise
thereof;
13
(h) the Trustee shall not be liable for or by reason of the
statements or implications of fact or law contained in or
arising out of anything contained in this Indenture or in
the Warrants or be required to verify the same or to keep
itself informed or advised as to the payment by the Company
of any taxes or assessments or premiums or insurance or other
payments to be made, it being hereby agreed and declared that,
as to all matters and things in this clause referred to, the
duty and responsibility shall rest upon the Company and not
upon the Trustee and the failure of the Company to discharge
such duty and responsibility shall not in any way render the
Trustee liable or cast upon it any duty or responsibility for
the breach of which it would be liable;
(i) the Trustee will be paid such reasonable remuneration for
its services as Trustee as may be agreed upon between the
Trustee and the Company and will also be paid all costs,
charges and expenses properly incurred by the Trustee in
connection with the trusts hereof and the Company (in addition
to any right of indemnity by law given to the Trustee) will
also at all times keeps indemnified the Trustee against all
actions, proceedings, costs, claims and demands in respect of
any matter or thing done or omitted by it in any way relating
to these presents other that such actions, proceedings, costs,
claims or demands arising from a breach by the Trustee of its
obligations hereunder. The said remuneration shall be payable
notwithstanding that a liquidator, receiver or receiver and
manager or trustee under the BANKRUPTCY ACT shall have been
appointed or the trusts of this Indenture shall be in course of
administration by or under the direction of the court;
All costs, charges and expenses incurred and all payments
made by the Trustee in the lawful exercise of the powers hereby
conferred upon it, including all remuneration payable to the
Trustee, shall be payable by the Company on demand and all such
costs, charges and expenses and payments and all remuneration
payable to the Trustee hereunder, shall be payable out of any
funds coming into the possession of the Trustee in priority to
the Warrants;
(j) the Trustee may employ such agents and other assistants as it
may reasonably require for the proper discharge of its duties
hereunder and shall not be responsible for any misconduct on
the part of any such agents and other assistants or person
appointed by it hereunder or be bound to supervise the
proceedings of any such appointees, and may pay reasonable
remuneration for all services performed for it in the discharge
of the trusts hereof and compensation for all disbursements,
costs and expenses in relation thereto shall be payable on
demand;
(k) the Trustee shall not be bound to act as herein provided in
accordance with any direction or request of the Company or of
their respective Boards of Directors until a duly certified
copy of the instrument or resolution containing such direction
or request shall have been delivered to the Trustee;
(l) the Company hereby irrevocably appoints the Trustee to be
the attorney of the Company and in the name and on behalf of
the Company to execute and do any assurances and things which
the Company ought to execute and do under the name of the
Company in the exercise of all or any of the powers hereby
conferred on the Trustee;
(m) the Trustee may act hereunder by such officers or other
persons as it may, from time to time, designate for that
purpose;
14
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(n) the Trustee shall have the right to resign upon 60 days notice to
the Company and the Warrantholders.
ARTICLE VI
SUPPLEMENTAL INDENTURES
6.01 (1) From time to time, the Company and the Trustee may, when
authorized by a resolution of the Directors and, subject to the provisions of
this Indenture, they shall, when so directed by this Indenture, execute,
acknowledge and deliver, by their respective proper officers, deeds of
Indentures supplemental hereto, which thereafter shall form part hereof, for
any one or more of the following purposes:
(a) adding to the limitations or restrictions herein specified further
limitations or restrictions thereafter to be observed; provided
that the Trustee shall be of the opinion that such further
limitations or restrictions shall not be prejudicial to the
interests of the Warrantholders;
(b) adding to the covenants of the Company herein contained for the
protection of the holders of the Warrants and/or providing for
events of default in addition to those herein specified;
(c) making such provisions not inconsistent with this Indenture as may
be necessary or desirable with respect to matters or questions
arising hereunder, including the making of any modifications in
the form of the Warrants which do not affect the substance thereof
and which, in the opinion of the Trustee, it may be expedient to
make; provided that the Trustee shall be of the opinion that such
provisions and modifications will not be prejudicial to the
interests of the Warrantholders.
(d) making any additions to, deletions from or alterations of the
provisions of this Indenture which in the opinion of Counsel may
from time to time be necessary or advisable.
(e) evidencing the succession, or successive successions, of other
corporations to the Company and to the covenants of and
obligations assumed by any such successor in accordance with the
provisions of this Indenture.
(f) setting forth any adjustment of the Exercise Price of Warrants in
accordance with section 3.7 and resulting from any action referred
to in section 3.7 hereof; and
(g) for any other purpose not inconsistent with the terms of this
Indenture.
(2) The Trustee may also, without the consent or concurrence of
the Warrantholders, by supplemental indenture or otherwise concur with
the Company in making any changes or corrections in this Indenture as to
which it shall have been advised by Counsel are corrections of changes
or as to which it shall have been advised by Counsel are required for the
purpose of curing or correcting any ambiguity or defective or
inconsistent provision or clerical omission or mistake or manifest error
contained herein or in any deed or indenture supplemental or ancillary
hereto.
- 16 -
ARTICLE VII
MISCELLANEOUS
7.01 All the covenants, stipulations, promises and agreements in the
Indenture contained by or on behalf of the Company shall bind its successors
and assigns, whether so expressed or not.
7.02 Any act or proceeding by any provisions of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer or any corporation that shall, at that time,
be the successor of the Company.
7.03 The Company, by instrument in writing duly executed by it and delivered
to the Trustee, may surrender any of the powers or rights reserved to the
Company and thereupon such power or right to surrender shall terminate both
as to the Company and as to any successor corporation.
7.04 Any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by the Holders
of Warrants to or on the Company may be given or served by personal delivery,
or by prepaid registered mail, or by telegram, telex or telecopier addressed
as first before written. Any notice, direction, request or demand by any
Warrantholder to or upon the Trustee may be given or served by personal
delivery or by prepaid registered mail, or by telegram, telex or telecopier
addressed as aforesaid.
Any notice, direction, request or demand by the Company or by the Trustee to
or upon a Warrantholder shall be deemed to have been sufficiently given or
made for all purposes if such notice has been delivered personally, or mailed
by prepaid registered mail, or telegram or telecopied to the last known
address of the Warrantholder on the books of the Company and the Trustee.
Whenever by any provision of this Indenture, any notice, direction, request
or demand is required or permitted to be given or made upon the Trustee, such
notice, direction, request or demand shall be given or made to the Trustee as
in this section 7.04 provided.
Any party may change its address for service by giving notice hereunder,
except that in the case of Warrantholders, notice of change of address need
only be given to the Company and the Trustee.
Notice shall be deemed to have been received by the parties to whom they were
addressed on the day of delivery, if delivered personally, on the fifth day
after the mailing thereof (and there is at the time no postal interruption),
and on the business day next following the telegram or telecopying thereof.
7.05 This Indenture shall be governed by the laws of British Columbia.
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7.06 This Indenture may be executed in any number of counterparts, each of
which shall be original; but such counterparts shall together constitute but
one and the same instrument.
IN WITNESS WHEREOF the parties hereto have executed these presents under
their respective seals and the hands of their proper officers in that behalf.
GEOGRAPHICS, INC.
/s/ Xxxxxx X. Xxxxx C/S
------------------------
Name: Xxxxxx X. Xxxxx
Title: President
MONTREAL TRUST COMPANY OF CANADA
/s/ J Karim C/S
------------------------
Name: XXXXX XXXXX
Title: A/C Manager
