EXHIBIT 4.3
IVANHOE MINES LTD.
ARBN 075 217 097
- AND -
CIBC MELLON TRUST COMPANY
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SPECIAL WARRANT INDENTURE
DATED AS OF DECEMBER 12, 2002
PROVIDING FOR THE ISSUE OF SPECIAL WARRANTS
OF IVANHOE MINES LTD.
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THIS SPECIAL WARRANT INDENTURE made as of the 12th day of December, 2002
B E T W E E N:
IVANHOE MINES LTD. ARBN 075 217 097, a corporation
continued under the laws of the Yukon Territory
(the "Company")
AND:
CIBC MELLON TRUST COMPANY, a trust company incorporated under
the laws of Canada and having an office in the City of
Vancouver
(the "Trustee")
WHEREAS:
(A) the Company proposes to create and issue Special Warrants to be
constituted and issued in the manner set forth;
(B) the Company is authorized to create and issue the Special Warrants;
(C) each Special Warrant will entitle the holder to acquire upon exercise
or deemed exercise thereof, and without payment of any additional
consideration, one Common Share;
(D) the Company represents to the Trustee that all necessary resolutions of
the directors of the Company have been duly enacted, passed or
confirmed and all other proceedings taken and conditions complied with
to authorize the execution and delivery of this Indenture and the
execution and issue of the Special Warrants and to make the same legal
and valid and binding on the Company in accordance with the laws
relating to the Company and the Trustee shall not be liable for or by
reason of any statements of fact or recitals in this Indenture and all
such statements are and shall be deemed to be made by the Company;
(E) the foregoing recitals are made as representations and statements of
fact by the Company and not by the Trustee;
(F) the Trustee has agreed to act as trustee for the Special Warrantholders
on the terms and conditions herein set forth; and
(G) all things necessary have been done and performed to make the Special
Warrants, when certified by the Trustee and issued as in this Indenture
provided, legal, valid and binding upon the Company with the benefits
of and subject to the terms of this Indenture.
NOW THEREFORE, in consideration of the premises and in further
consideration of the mutual covenants herein set forth, the parties hereto agree
as follows:
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ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS. In this Indenture unless there is something in the subject
matter or context inconsistent therewith, the following words have the
respective meaning indicated below:
(a) "Applicable Legislation" has the meaning set forth in Section
8.15;
(b) "Applicable Securities Laws" means, collectively, the
Corporations Act 2001 (Commonwealth of Australia) and the
applicable securities laws of the Qualifying Province, the
securities laws of the Provinces of Canada, the securities
laws of the United States and the states thereof, the
regulations, rules, rulings and orders made thereunder, the
applicable policy statements issued by the securities
regulatory authorities in the Provinces of Canada, the United
States Securities Exchange Commission and the ASIC and the
securities legislation and policies of each other relevant
jurisdiction;
(c) "ASIC" means the Australian Securities and Investments
Commission;
(d) "ASX" means the Australian Stock Exchange Limited;
(e) "Australian Prospectus" means a prospectus under Chapter 6D of
the Corporations Act 2001 (Commonwealth of Australia) in
relation to the Common Shares issuable upon exercise of the
Special Warrants;
(f) "Business Day" means any day except Saturday, Sunday or a
statutory holiday in Vancouver, British Columbia;
(g) "Certificate of the Company" means a certificate signed by any
one of the President, Vice-President, Secretary or Chief
Financial Officer of the Company in accordance with Section
9.5;
(h) "Closing Date" means such date as the Company may designate by
notice in writing to the subscribers for the Special Warrants;
(i) "Common Shares" means, collectively, the fully paid and
non-assessable common shares in the capital of the Company as
presently constituted and, except where the context hereof
otherwise requires, includes common shares issued or to be
issued in accordance with the exercise or deemed exercise of
Special Warrants hereunder;
(j) "Company's auditors" means the firm of accountants appointed
by the shareholders of the Company as the auditors of the
Company from time to time;
(k) "counsel" means a barrister and solicitor or a firm of
barristers and solicitors retained by the Trustee or retained
by the Company and acceptable to the Trustee;
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(l) "Current Market Price" in respect of a Common Share at any
date means the weighted average price of a Common Share for
any twenty-five (25) consecutive trading days ending on the
third trading day before such date, on such primary stock
exchange on which the Common Shares are then listed as may be
selected for such purpose by the directors of the Company or,
if the Common Shares are not then listed on more than one
stock exchange, on such stock exchange on which the Common
Shares are then listed or if the Common Shares are not then
listed on any stock exchange, on the over-the-counter market,
or, if the Common Shares are not then traded in the
over-the-counter market, the Current Market Price of the
Common Shares shall be the fair value of a Common Share as
determined by the directors of the Company, after consultation
with a nationally and internationally recognized investment
banking firm with respect to the fair value of such
securities. The weighted average price shall be determined by
dividing the aggregate sale price of all the Common Shares
sold on the said exchange or market, as the case may be,
during the said twenty-five (25) consecutive trading days by
the total number of Common Shares so sold provided that, if
the date for which the Current Market Price to be determined
is a record date for an event relating to the Common Shares
(other than a record date in respect of a meeting of
shareholders) the said twenty-five (25) consecutive trading
days shall be determined as at, and shall not include, the
five (5) trading days immediately preceding such record date;
(m) "director" means a director of the Company for the time being
and reference without more to action by the directors means
action by the directors of the Company as a board or, whenever
duly empowered, action by a committee of the board;
(n) "Exercise Date" has the meaning set forth in Section 5.2 of
this Indenture;
(o) "Expiry Date" means the date which is the fifth (5th) Business
Day following the earlier of (i) the Qualification Date, or
(ii) the Qualification Deadline;
(p) "Expiry Time" means 5:00 p.m. (Vancouver time) on the Expiry
Date;
(q) "Extraordinary Resolution" has the meaning attributed to it in
Section 6.10 and 6.13 hereof;
(r) "Indenture", "hereto", "hereunder", "hereof", "hereby" and
similar expressions mean or refer to this Indenture and not to
any particular Article, Section, Subsection, paragraph,
clause, subdivision or portion hereof and include any
agreement, deed or instrument supplemental or ancillary hereto
and the expressions "Article", "Section", "Subsection" and
"paragraph" followed by a number mean and refer to the
specified Articles, Sections, Subsections or paragraphs of
this Indenture;
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(s) "person" means any entity whatsoever including, without
limitation, an individual, a corporation, a partnership, a
trust, an unincorporated organization, a syndicate and words
importing persons have a similar meaning;
(t) "Proceeds" means a sum of money equal to the Subscription
Price multiplied by the aggregate number of Special Warrants
issued pursuant to this Indenture, such amount being up to an
aggregate of Cdn.$60,000,000;
(u) "Prospectus", as the context may require, means the
preliminary or final version of the prospectus to be filed in
the Qualifying Province relating to the distribution of the
Common Shares to the Special Warrantholders upon exercise
thereof and, unless the context otherwise requires, includes
any amendments or supplements thereto;
(v) "Qualification Date" means the date which is the later of (i)
date on which a receipt has been issued by the Securities
Commission in the Qualifying Province for the final Prospectus
qualifying the Common Shares to be issued upon the exercise of
the Special Warrants; and (ii) the date on which an Australian
Prospectus is lodged with ASIC;
(w) "Qualification Deadline" means the date that is four (4)
months from the Closing Date;
(x) "Qualifying Province" means the Province of British Columbia;
(y) "Regulation S" means Regulation S under the U.S. Securities
Act;
(z) "Special Warrant Certificate" means a certificate
substantially in the form attached hereto as Schedule "A"
evidencing one or more Special Warrants;
(aa) "Special Warrantholder" or "holder" means the registered
holder of a Special Warrant hereunder;
(bb) "Special Warrants" means, collectively, the special warrants
of the Company issued and certified hereunder entitling
holders thereof to receive, upon the exercise or deemed
exercise thereof and subject to adjustment hereunder, one
Common Share, or such kind and amount of securities or
property determined pursuant to Article 4 hereof;
(cc) "Subscription Price" means the sum of Cdn.$3.00 per Special
Warrant;
(dd) "subsidiary of the Company" means a corporation of which
voting securities carrying a majority of votes attached to all
outstanding voting securities are owned, directly or
indirectly, by the Company or by one or more subsidiaries of
the Company, or by the Company and one or more subsidiaries of
the Company, and, as used in this definition, voting
securities means securities, other than debt securities,
carrying a voting right to elect directors either under all
circumstances or under some circumstances that may have
occurred and are continuing;
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(ee) "TSX" means the Toronto Stock Exchange;
(ff) "United States" means the United States as that term is
defined in Regulation S;
(gg) "U.S. Person" means a U.S. Person as defined in Regulation S,
which definition includes, but is not limited to, an
individual resident in the United States, an estate or trust
of which any executor, administrator or trustee, respectively,
is a U.S. Person and any partnership or corporation organized
or incorporated under the laws of the United States;
(hh) "U.S. Securities Act" means the United States Securities Act
of 1933, as amended; and
(ii) "Written direction of the Company", "written order of the
Company" and any other document required to be signed by the
Company, mean, respectively, a written direction, order or
request, consent or other document signed in the name of the
Company by any of the President, the Vice-President, the
Secretary or the Chief Financial Officer of the Company, and
may consist of one or more instruments so executed.
1.2 HEADINGS. The division of this Indenture into Articles,
Sections, Subsections, paragraphs or other subdivisions, the provision of a
table of contents and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation of this Indenture
or the Special Warrants.
1.3 GENDER. In this Indenture wherever the context permits or
requires words importing number shall include the singular and the plural and
words importing gender shall include all genders.
1.4 BUSINESS DAY. In the event that any day on or before which any
action is required to be taken hereunder is not a Business Day, then such action
shall be required to be taken on or before the requisite time on the next
succeeding day that is a Business Day.
1.5 MEANING OF "OUTSTANDING". Every Special Warrant represented by
a Special Warrant Certificate countersigned and delivered by the Trustee
hereunder shall be deemed to be outstanding until it shall be cancelled or
delivered to the Trustee for cancellation or until the Expiry Time; provided
that where a new Special Warrant Certificate has been issued pursuant to Section
2.7 hereof to replace one which has been mutilated, lost, stolen or destroyed,
the Special Warrants represented by any such new Special Warrant Certificate
shall be counted for the purpose of determining the aggregate number of Special
Warrants outstanding.
1.6 TIME. Time shall be of the essence hereof and of the Special
Warrants issued hereunder.
1.7 APPLICABLE LAW. This Indenture and the Special Warrants shall
be governed by and construed in accordance with the laws of the Province of
British Columbia. The parties hereto submit to the exclusive jurisdiction of the
courts in the Province of British Columbia. The
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parties agree that any litigation between the parties which arises pursuant to
or in connection with this Indenture, or any of its provisions, shall be
referred to the courts in the Province of British Columbia and shall not be
referred to the courts in any other jurisdiction.
1.8 CURRENCY. All references to "US$" refer to lawful money of the
United States unless otherwise indicated. All references to "Cdn.$" refer to
lawful money of Canada.
ARTICLE 2
ISSUE AND PURCHASE OF SPECIAL WARRANTS
2.1 CREATION AND ISSUE OF SPECIAL WARRANTS. A total of up to
20,000,000 Special Warrants are hereby created and authorized to be issued and
shall be executed by the Company and certified by or on behalf of the Trustee
upon the written order of the Company and delivered by the Trustee to the
Company in accordance with the written direction of the Company.
2.2 FORM AND TERMS OF SPECIAL WARRANTS. Subject to the provisions
hereof, the Special Warrants to be issued under this Indenture shall be limited
in the aggregate to 20,000,000 Special Warrants and each Special Warrant shall
entitle a holder, upon exercise or deemed exercise thereof to acquire, without
the payment by such holder of any additional consideration, one (1) Common Share
or such other kind and amount of securities or property determined pursuant to
the provisions of Article 4, as the case may be.
The Special Warrants may be exercised by the holder thereof, at no
additional cost, at any time after the Qualification Date until the Expiry Time.
Special Warrants not exercised or tendered for cancellation prior to the Expiry
Time will be deemed to be exercised immediately prior thereto and surrendered to
the Trustee on behalf of the holder thereof at the Expiry Time without any
further action on the part of the holder or the Company.
The Special Warrants shall be issued in registered form and
the Special Warrant Certificates, including all replacements issued in
accordance with this Indenture, shall be substantially in the form set out in
Schedule "A" hereto with, subject to the provisions of this Indenture, such
additions, variations and/or omissions as may from time to time be agreed upon
between the Company and the Trustee, shall be dated as of the Closing Date, and
shall be numbered in such manner as the Company, with the approval of the
Trustee, may prescribe. All Special Warrants shall, save as to denominations, be
of like tenor and effect. No change in the form of the Special Warrant
Certificates shall be required by reason of any adjustment made pursuant to
Article 4 hereof. The Trustee shall maintain a register of the holders at its
principal stock transfer office in the City of Vancouver, which shall be open
for inspection by any agent or representative of the Company or a Special
Warrantholder, in which shall be entered the name and addresses of the Special
Warrantholders and the number of Special Warrants held by them and all other
information required by law. The Trustee shall, from time to time when requested
to do so by the Company, furnish the Company with a list of the names and
addresses of the Special Warrantholders entered in the registers kept by the
Trustee and showing the number of Common Shares which might then be acquired
upon the exercise or deemed exercise of the Special Warrants held by each such
holder.
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Special Warrant Certificates may be engraved, lithographed,
printed or partly in one form and partly in another form as the Company with the
approval of the Trustee may determine.
2.3 TRANSFER AND OWNERSHIP OF SPECIAL WARRANTS. Unless the Company
has instructed the Trustee in writing to waive any or all of the following
requirements, Special Warrants may be transferred upon receipt by the Trustee of
a duly executed transfer instrument in the form attached to the Special Warrant
Certificate together with evidence to its reasonable satisfaction that the
transferee of such Special Warrants is:
(a) the executor, administrator, heir or legal representative of
the heirs of the estate of a deceased Special Warrantholder;
(b) a guardian, committee, trustee, curator or tutor representing
a Special Warrantholder who is an infant, an incompetent
person or a missing person;
(c) a liquidator of, or a trustee in bankruptcy for, a Special
Warrantholder; or
(d) a transferee of a Special Warrantholder who provides the
Trustee with evidence satisfactory to the Trustee and the
Company, acting reasonably, including but not limited to a
properly completed and executed declaration attached as
Exhibit "A" to the transfer form attached to the Special
Warrant Certificate, that such transferee is/was either: (i)
not in the United States at the time the buy order for the
Special Warrants was executed, not acquiring the Special
Warrants for the account or benefit of a U.S. Person or a
person in the United States and was not offered the Special
Warrants in the United States, or (ii) a person that has
purchased or acquired Special Warrants in a transaction exempt
from registration under the U.S. Securities Act and has
provided the Company with satisfactory evidence of the
availability of such exemption which may, at the Company's
discretion, include an opinion of counsel and was exempt from
registration under any applicable securities laws of any state
of the United States and that the securities laws of any other
applicable jurisdiction(s) have been complied with in relation
to the transfer of the Special Warrants involved,
together with the Special Warrant Certificate in question (by delivery or mail
as set forth in Section 9.3 hereof), and subject to such reasonable requirements
relating to the payment of costs of the transfer by the holder as the Trustee
may prescribe and compliance with all applicable securities legislation and
requirements of regulatory authorities. A transferee of Special Warrants who
complies with the requirements of this Section 2.3 will be entitled to become
noted upon the register of holders as a Special Warrantholder. After receiving
the surrendered Special Warrant Certificate and upon the person surrendering the
same meeting the requirements as hereinbefore set forth, the Trustee shall
forthwith give written notice thereof together with confirmation as to the
identity of the person entitled to become the holder to the Company. Forthwith
after receiving written notice from the Trustee as aforesaid the Company shall,
in accordance with the provisions of Section 2.8 hereof, cause a new Special
Warrant Certificate to be issued and sent to the new holder and the Trustee
shall alter its register of holders accordingly.
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Each Special Warrant shall bear a legend as set forth below:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THE SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE [INSERT
THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION
DATE]
THE SPECIAL WARRANTS AND THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS SPECIAL WARRANT HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "U.S. SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES. THIS SPECIAL WARRANT MAY NOT BE
EXERCISED IN THE UNITED STATES OR BY OR FOR THE ACCOUNT OR
BENEFIT OF A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE
U.S. SECURITIES ACT) OR A PERSON IN THE UNITED STATES UNLESS
THIS SPECIAL WARRANT AND THE UNDERLYING SECURITIES ISSUABLE
UPON THE EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT AND THE SECURITIES LAWS OF ALL APPLICABLE
STATES OF THE UNITED STATES OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS IS AVAILABLE.
UNTIL AN AUSTRALIAN PROSPECTUS IS LODGED WITH ASIC, THE
SPECIAL WARRANTS MAY BE SUBJECT TO STATUTORY RESALE
RESTRICTION IN AUSTRALIA UNDER THE CORPORATIONS ACT 2001
(COMMONWEALTH OF AUSTRALIA). THE HOLDER OF THE SPECIAL
WARRANTS (AND THE COMMON SHARES ISSUED ON EXERCISE OF THE
SPECIAL WARRANTS) IS ADVISED TO CONSULT ITS OWN LEGAL ADVISORS
IN THIS REGARD."
Each Special Warrant issued to a U.S. Person or a person in
the United States, and each Common Share issuable upon the exercise or deemed
exercise thereof, shall bear a legend as set forth below:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "U.S. SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS
THEY ARE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED
ONLY: (A) TO THE COMPANY: (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.
SECURITIES ACT; (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144
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THEREUNDER, IF APPLICABLE, AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS; OR (D) WITH THE PRIOR
CONSENT OF THE COMPANY, PURSUANT TO ANOTHER EXEMPTION FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE
STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT
CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON
STOCK EXCHANGES IN CANADA. PROVIDED THAT THE COMPANY IS A
"FOREIGN ISSUER" WITHIN THE MEANING OF REGULATION S AT THE
TIME OF SALE, A NEW CERTIFICATE, BEARING NO LEGEND MAY BE
OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT UPON DELIVERY
OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM
SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT AND THE
COMPANY, TO THE EFFECT THAT SUCH SALE IS BEING MADE IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.
SECURITIES ACT."
In addition, certificates representing Common Shares issued
upon the exercise or deemed exercise of Special Warrants exercised prior to the
earlier of the Qualification Date or the Expiry Date, shall bear the following
legend:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THE SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE [INSERT
THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION
DATE]"
Subject to the provisions of this Indenture and applicable
law, the Special Warrantholder shall be entitled to the rights and privileges
attaching to the Special Warrants free from all equities and rights of set-off
or counter claim between the Company and the transferor or any previous Special
Warrantholder and the issue of the Common Shares by the Company upon the
exercise or deemed exercise of Special Warrants by any Special Warrantholder in
accordance with the terms and conditions herein contained shall discharge all
responsibilities of the Company and the Trustee with respect to such Special
Warrants.
2.4 SPECIAL WARRANTHOLDERS NOT SHAREHOLDERS. A Special
Warrantholder shall not, as such, be deemed to be or regarded as a shareholder
of the Company nor shall such Special Warrantholder be entitled to any right or
interest, including rights to receive dividends or vote at meetings of the
shareholders of the Company, except as is expressly provided in this Indenture
and in the Special Warrant Certificate.
2.5 SIGNING OF SPECIAL WARRANTS. The Special Warrant Certificates
shall be signed either manually or by facsimile signature by any officer or
director of the Company and may, but need not be, under the corporate seal of
the Company. A facsimile signature upon any Special Warrant Certificate shall
for all purposes hereof be deemed to be the signature of the person whose
signature it purports to be and to have been signed at the time such facsimile
signature is reproduced. If a person whose signature, either manually or in
facsimile, appears on a Special Warrant Certificate is not a director or officer
of the Company at the date of this Indenture or at
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the date of the countersigning and delivery of such Special Warrant Certificate,
such fact shall not affect in any way the validity of the Special Warrants or
the entitlement of the holder thereof to the benefits of this Indenture.
2.6 COUNTERSIGNING. No Special Warrant Certificate shall be
issued, or if issued, shall be valid or exercisable or entitle the holder
thereof to the benefits of this Indenture until the Special Warrant Certificate
has been countersigned by or on behalf of the Trustee. The Trustee will
countersign the Special Warrant Certificates upon the written direction of the
Company. The countersignature by or on behalf of the Trustee on any Special
Warrant Certificate shall not be construed as a representation or warranty by
the Trustee as to the validity of this Indenture or of the Special Warrants or
as to the performance by the Company of its obligations under this Indenture and
the Trustee shall in no way be liable or answerable for the use made of the
Special Warrants or of the Proceeds except as specified herein. The
countersignature of the Trustee shall, however, be a representation and warranty
of the Trustee that the Special Warrant Certificate has been duly countersigned
by or on behalf of the Trustee pursuant to the provisions of this Indenture and
shall be conclusive evidence as against the Company that the Special Warrant
Certificate so countersigned has been duly issued hereunder and the holder is
entitled to the benefits hereof.
2.7 LOSS, MUTILATION, DESTRUCTION OR THEFT OF SPECIAL WARRANTS. In
case any of the Special Warrant Certificates issued and countersigned hereunder
shall become mutilated or be lost, destroyed or stolen, the Company shall, upon
the holder complying with this Section 2.7, issue and thereupon the Trustee
shall countersign and deliver a new Special Warrant Certificate of like date and
tenor in exchange for and in place of the one mutilated, lost, destroyed or
stolen and upon surrender and cancellation of such mutilated Special Warrant
Certificate or in lieu of and in substitution for such lost, destroyed or stolen
Special Warrant Certificate and the substituted Special Warrant Certificate
shall be in a form approved by the Trustee and shall entitle the holder thereof
to the benefits hereof and rank equally in accordance with its terms with all
other Special Warrants issued hereunder.
The applicant for the issue of a new Special Warrant
Certificate pursuant to this Section 2.7 shall bear the reasonable costs
including applicable taxes of the issue thereof and in case of loss, destruction
or theft shall, as a condition precedent to the issue thereof, furnish to the
Company and to the Trustee such evidence of ownership and of the loss,
destruction or theft of the Special Warrant Certificate so lost, destroyed or
stolen as shall be satisfactory to the Company and to the Trustee, in their
discretion and such applicant may also be required to furnish an indemnity and a
surety bond in amount and form satisfactory to the Company and the Trustee in
their discretion, and shall pay the reasonable charges of the Company and the
Trustee in connection therewith.
2.8 ISSUE OF SPECIAL WARRANTS. Special Warrant Certificates shall
be signed by the Company as aforesaid and delivered to the Trustee from time to
time. The Trustee shall countersign any Special Warrant Certificate delivered by
the Company to the Trustee as aforesaid and shall forthwith deliver to the
person or persons in whose name or names the Special Warrant Certificate is to
be issued (as specified in any written order from time to time given by the
Company to the Trustee and signed by the Chairman, President, Vice-President,
Treasurer, Secretary or Assistant Secretary of the Company) or mail to such
person or persons at their
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respective addresses specified in the written order from the Company the Special
Warrant Certificate for the appropriate number of Special Warrants.
2.9 FRACTIONS. Certificates representing fractional Special
Warrants shall not be issued or otherwise provided for.
2.10 SPECIAL WARRANTS TO RANK PARI PASSU. All Special Warrants
shall rank pari passu, whatever may be the actual date of issue of same.
2.11 EXCHANGE OF SPECIAL WARRANTS. Except as otherwise herein
provided:
(a) Special Warrant Certificates may, upon compliance with the
reasonable requirements of the Trustee, be exchanged for
Special Warrant Certificates in any other authorized
denomination representing in the aggregate the same number of
Special Warrants. The Company shall sign and the Trustee shall
countersign, in accordance with Section 2.5 and 2.6, all
Special Warrant Certificates necessary to carry out the
exchanges contemplated herein;
(b) Special Warrant Certificates may be exchanged only at the
principal stock transfer office of the Trustee in the city of
Vancouver. Any Special Warrant Certificates tendered for
exchange shall be surrendered to the Trustee and cancelled;
and
(c) the Trustee may charge registered holders requesting an
exchange a reasonable sum for each Special Warrant Certificate
exchanged and payment of such charges and reimbursement of the
Trustee or the Company for any and all taxes or governmental
or other charges required to be paid shall be made by the
party requesting such exchange as a condition precedent to
such exchange.
2.12 RECOGNITION OF REGISTERED HOLDER. The Company and the Trustee
may deem and treat the registered holder of any Special Warrant Certificate as
the absolute beneficial owner of the Special Warrants represented thereby for
all purposes under this Indenture, and the Company and the Trustee shall not be
affected by any notice or knowledge to the contrary except where the Company or
the Trustee is required to take notice by statute or by order of a court of
competent jurisdiction. A Special Warrantholder shall be entitled to the rights
evidenced by the Special Warrants registered in his name free from all equities
or rights of set-off or counterclaim between the Company and the original or any
intermediate holder thereof and all persons may act accordingly and the receipt
by any such Special Warrantholder of the Common Shares issuable upon the
exercise or deemed exercise thereof shall be a good discharge to the Company and
the Trustee for the same and neither the Company nor the Trustee shall be bound
to inquire into the title of any such holder except where the Company or the
Trustee is required to take notice by statute or by order of a court of
competent jurisdiction.
ARTICLE 3
COVENANTS OF THE COMPANY
3.1 COVENANTS OF THE COMPANY. The Company represents, warrants,
covenants and agrees with the Trustee for the benefit of the Trustee and the
Special Warrantholders as follows:
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(a) To Issue Special Warrants and Reserve Common Shares: The
Company is duly authorized to create and issue the Special
Warrants and that the Special Warrant Certificates, when
issued and countersigned as herein provided, will be valid and
enforceable against the Company and that, subject to the
provisions of this Indenture, the Company will cause a
sufficient number of the Common Shares from time to time
issuable pursuant to the Special Warrants under this Indenture
and the certificates representing such Common Shares to be
duly issued and delivered in accordance with instructions on
the Special Warrant Certificates and the terms hereof. At all
times prior to and including the Expiry Time, while any of the
Special Warrants are outstanding, the Company shall reserve
and allot and conditionally issue out of its authorized
capital a number of Common Shares sufficient to enable the
Company to meet its obligation to issue Common Shares in
respect of the exercise or deemed exercise of all Special
Warrants outstanding hereunder from time to time. All Common
Shares acquired pursuant to the exercise or deemed exercise of
the Special Warrants shall be fully paid and non-assessable.
(b) To Pay Trustee's Remuneration: The Company will pay to the
Trustee from time to time reasonable remuneration for its
services hereunder and will, upon the Trustee's request, pay
to or reimburse the Trustee for all reasonable expenses,
disbursements and advances made or incurred by the Trustee in
the administration or execution of the trust hereof (including
the compensation and disbursements of its counsel and other
advisors and assistants not regularly in its employ), both
before a default hereunder and thereafter until all duties of
the Trustee hereunder have been finally and fully performed.
(c) To Execute Further Assurances: The Company will do, execute,
acknowledge and deliver or cause to be done, executed,
acknowledged and delivered, all other acts, deeds and
assurances in law as the Trustee may reasonably require for
effecting the intentions and provisions of this Indenture.
(d) To Carry on Business: Subject to the express provisions
hereof, the Company will at all times maintain its corporate
existence, carry on and conduct and will cause to be carried
on and conducted its business in the same manner as heretofore
carried on and conducted, provided, however, that the Company
or any subsidiary of the Company may dispose of any business,
premises, property or operation if in the reasonable opinion
of the directors or officers of the Company or any subsidiary
of the Company, as the case may be, it would be advisable and
in the best interests of the Company or any subsidiary of the
Company to do so; and subject to the express provisions
hereof, it will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence, provided, however, that (subject to compliance with
the provisions of Article 4 hereof) nothing herein contained
shall prevent the amalgamation, consolidation or merger of the
Company or any subsidiary of the Company or the abandonment of
any rights and franchises of the Company or any subsidiary of
the Company if, in the reasonable opinion of the directors or
officers of the Company,
13
or the directors or officers of any subsidiary of the Company,
as the case may be, it would be advisable and in the best
interests of the Company or of such subsidiary of the Company
to do so. The Company will keep or cause to be kept proper
books of account in accordance with generally accepted
accounting practice and will file with the Trustee copies of
all annual statements of the Company furnished to its
shareholders after the date hereof, forthwith following
delivery to its shareholders.
(e) To Deliver Information: The Company will send to each Special
Warrantholder copies of all financial statements and other
materials furnished from time to time to holders of Common
Shares after the date hereof.
(f) Performance of Covenants By Trustee: If the Company shall fail
to perform any of its covenants contained in this Indenture
the Trustee may notify the Special Warrantholders of such
failure on the part of the Company or may itself perform any
of the said covenants capable of being performed by it, but,
subject to Section 8.3 hereof, the Trustee shall be under no
obligation to do so or to notify any Special Warrantholder.
All sums reasonably expended or advanced by the Trustee in
performance of its rights provided for in this Subsection
3.1(f) shall be repayable as provided in Subsection 3.1(b). No
such performance, expenditure or advance by the Trustee shall
be deemed to relieve the Company of any default hereunder.
(g) Filings: The Company undertakes to file or lodge or cause to
be filed or lodged all forms or undertakings required to be
filed or lodged by the Company in connection with the issuance
and sale of the Special Warrants so that the distribution of
the Special Warrants may lawfully occur without the necessity
of filing or lodging a prospectus or an offering memorandum in
Canada or Australia (but on terms that will permit the Common
Shares acquired by subscribers upon exercise or deemed
exercise of the Special Warrants to be sold by such
subscribers at any time in the Qualifying Province and
Australia subject to Applicable Securities Laws). All fees
payable in connection with such filings and lodgements shall
be at the sole expense of the Company.
(h) Reporting Issuer Status: The Company is a reporting issuer
under the laws of the Qualifying Province, is not in default
of any requirements of such laws and the Company will use
reasonable efforts to remain, a reporting issuer under the
securities laws of the Qualifying Province, not in default of
any requirement of such laws.
(i) Australian Disclosing Entity Status: The Company is a listed
disclosing entity for the purposes of the Corporations Act
2001 (Commonwealth of Australia).
(j) Stock Exchange Listing: The Company will use reasonable
efforts to ensure that the Common Shares issuable upon
exercise or deemed exercise of the Special Warrants will, as
soon as practicable after the Closing Date, be listed and
posted
14
for trading on the TSX. The Company covenants to use
reasonable efforts to maintain the listing of the Common
Shares on such stock exchange.
(k) Australian Stock Exchange Listing: The Company will use
reasonable efforts to ensure that the Common Shares issuable
upon exercise or deemed exercise of the Special Warrants,
will, as soon as practicable after the Qualification Date, be
quoted on the ASX.
(l) Filing Prospectus: The Company will use reasonable efforts, as
soon as possible after the Closing Date, to prepare, file and
receive a receipt for a preliminary Prospectus in the
Qualifying Province. If a preliminary Prospectus is filed and
a receipt obtained therefore, the Company will use reasonable
efforts to resolve any regulatory comments and satisfy any
regulatory deficiencies in respect of the preliminary
Prospectus and, as soon as practicable after such comments or
deficiencies have been resolved or satisfied, shall use
reasonable efforts to prepare, file and obtain a receipt from
the British Columbia Securities Commission for the final
Prospectus and to lodge an Australian Prospectus with ASIC and
will take all other steps and proceedings that may reasonably
be necessary in order to qualify the Common Shares issuable
upon exercise or deemed exercise of the Special Warrants for
distribution in the Qualifying Province to Special
Warrantholders, subject to the control block provisions of
Applicable Securities Laws.
(m) Performance of Indenture: The Company will well and truly
perform and carry out all of the acts or things to be done by
it as provided in this Indenture.
3.2 NOTICE OF PROSPECTUS. The Company will give written notice to
the Trustee of the issuance of the receipts for the final Prospectus and lodging
of an Australian Prospectus with ASIC referred to in Subsection 3.1(j) hereof
forthwith following completion thereof, and in any event no later than the
second Business Day thereafter, which notice will be accompanied by a sufficient
number of commercial copies of such final Prospectus and Australian Prospectus
(where applicable) for distribution to each Special Warrantholder. The Trustee
shall, on the Business Day following the receipt of such notice, deliver written
notice thereof to the Special Warrantholders, which notice will be accompanied
by a commercial copy of the final Prospectus and Australian Prospectus and will
include a statement to the effect that any Special Warrants not exercised by the
Expiry Time will be deemed exercised and surrendered by the Trustee on behalf of
the holder thereof.
3.3 SUITS BY SPECIAL WARRANTHOLDER. Subject to the provisions of
this Indenture, all or any of the rights conferred upon a Special Warrantholder
by the terms of a Special Warrant may be enforced by such Special Warrantholder
by appropriate legal proceedings without prejudice to the right which is hereby
conferred upon the Trustee to proceed in its own name to enforce each and all of
the provisions herein contained for the benefit of the Special Warrantholders
from time to time.
15
3.4 SECURITIES QUALIFICATION REQUIREMENTS.
(a) If, in the opinion of counsel, any instrument (not including a
prospectus, except as contemplated by Section 3.1 hereof) is
required to be filed with or any permission, order or ruling
is required to be obtained from any securities regulatory
authority or any stock exchange or any other actions are
required under any Canadian federal law or any provincial laws
of the Qualifying Province or any stock exchange rules before
any securities or property, including Common Shares, which a
Special Warrantholder is entitled to receive pursuant to the
exercise or deemed exercise of a Special Warrant may properly
and legally be issued and delivered upon the exercise or
deemed exercise of a Special Warrant and thereafter traded,
the Company covenants that it will use reasonable efforts to
file such instrument, obtain such permission, order or ruling
or take all such other actions at its expense, as is required
or appropriate in the circumstances.
(b) The Company will give written notice of, and will make all
necessary filings in respect of, the issue of the Common
Shares pursuant to the exercise or deemed exercise of Special
Warrants, in such detail as may be required, to any stock
exchange upon which the Common Shares may be listed or to the
securities regulatory authority in a Qualifying Province if
there is therein any legislation, ruling or order requiring
the giving of any such notice or the making of any such
filings in order that the subsequent disposition of the Common
Shares so issued will not be subject to the prospectus
requirements of such legislation, ruling or order (subject to
any applicable hold periods).
(c) The Company has no obligation to register or qualify the
Special Warrants or the Common Shares under the U.S.
Securities Act or the securities laws of any state of the
United States.
3.5 TRUSTEE MAY INSTITUTE PROCEEDINGS. The Trustee shall also have
the power at any time and from time to time to institute and to maintain such
suits and proceedings as it may be advised shall be necessary or advisable to
preserve and protect its interest and the interests of the Special
Warrantholders.
ARTICLE 4
ADJUSTMENT OF SUBSCRIPTION RIGHTS
4.1 ADJUSTMENT OF SUBSCRIPTION RIGHTS. Subject to Section 4.1A,
the subscription rights attaching to the Special Warrants with respect to the
Common Shares issuable upon the exercise or deemed exercise of the Special
Warrants shall be subject to adjustment from time to time as follows:
(a) if and whenever at any time from the date hereof and prior to
the Expiry Time, the Company shall:
(i) subdivide its outstanding Common Shares into a
greater number of shares; or
16
(ii) consolidate its outstanding Common Shares into a
smaller number of shares;
the number of Common Shares obtainable upon the exercise or
deemed exercise of each Special Warrant shall be adjusted, at
no cost to such holder, immediately after the effective date
of such subdivision or consolidation by multiplying the number
of Common Shares theretofore obtainable on the exercise or
deemed exercise thereof by the fraction of which:
(A) the numerator shall be the total number of
Common Shares outstanding immediately after
such date, or, in the case of the issuance
of convertible securities, the total number
of Common Shares outstanding immediately
after such date plus the total number of
Common Shares issuable upon conversion or
exchange of such convertible securities, and
(B) the denominator shall be the total number of
Common Shares outstanding immediately prior
to such date,
and such adjustment shall be made successively whenever any
event referred to in this Subsection 4.1(a) shall occur (and
all adjustments in this Subsection are cumulative);
(b) if and whenever at any time from the date hereof and prior to
the Expiry Time, the Company shall issue or distribute to the
holders of all or substantially all of the Company's
outstanding Common Shares or any securities of the Company
including rights, options or warrants to acquire shares of the
Company or securities convertible into or exchangeable for
shares of the Company or property or assets including cash or
evidences of indebtedness, the holder of any Special Warrant
who thereafter shall exercise or be deemed to have exercised
his right to subscribe for Common Shares thereunder shall be
entitled to receive, at no cost to such holder, and shall
accept for the same aggregate consideration, in addition to
the Common Shares to which he was theretofore entitled upon
such exercise or deemed exercise, the kind and amount of
securities or property which such holder would have been
entitled to receive as a result of such issue or distribution
as if, on the effective date thereof, he had been the
registered holder of the number of Common Shares to which he
was theretofore entitled upon such exercise or deemed exercise
and if determined appropriate by the directors, appropriate
adjustments shall be made as a result of any such issue or
distribution to the rights and interests of Special
Warrantholders thereafter so that the provisions of this
Article 4 shall thereafter apply correspondingly to any
securities or other property thereafter deliverable upon the
exercise or deemed exercise of any Special Warrant and any
such adjustments shall be made by and set forth in an
agreement supplemental hereto approved by the directors and
shall for all purposes be conclusively deemed to be
appropriate adjustments;
17
(c) if and whenever at any time from the date hereof and prior to
the Expiry Time, there is a reclassification of the Common
Shares or a capital reorganization of the Company other than
as described in Subsections 4.1(a) or (b) or a consolidation,
amalgamation or merger of the Company with or into any other
body corporate, trust, partnership or other entity, or a sale
or conveyance of the property and assets of the Company as an
entirety or substantially as an entirety, any Special
Warrantholder who has not exercised his right of subscription
prior to the effective date of such reclassification,
reorganization, consolidation, amalgamation, merger, sale or
conveyance, upon the exercise or deemed exercise of such right
thereafter, shall be entitled to receive and shall accept the
kind and number of securities or property that such Special
Warrantholder would have been entitled to receive on such
reclassification, capital reorganization, consolidation,
amalgamation, merger, sale or conveyance, if, on the record
date or the effective date thereof, as the case may be, the
Special Warrantholder had been the registered holder of the
number of Common Shares receivable upon the exercise or deemed
exercise of Special Warrants then held, subject to adjustment
thereafter in accordance with provisions the same, as nearly
as may be possible, as those contained in this Section 4.1;
provided that no such action shall be carried into effect
unless all necessary steps shall have been taken so that the
holders of the Special Warrants shall thereafter be entitled
to receive such kind and number of securities and property.
The Company, its successor, or the purchasing body corporate,
partnership, trust or other entity, as the case may be, shall,
as a condition precedent to any such reclassification,
reorganization, consolidation, amalgamation, merger, sale or
conveyance, take all necessary steps hereunder to enter into
an agreement which shall provide, to the extent possible, for
the application of the provisions set forth in this Indenture
with respect to the rights and interests thereafter of the
Special Warrantholders to the end that the provisions set
forth in this Indenture shall thereafter correspondingly be
made applicable, as nearly as may reasonably be, with respect
to any shares other securities or property to which a Special
Warrantholder is entitled on the exercise or deemed exercise
of his Special Warrants thereafter. Any agreement entered into
between the Company and the Trustee pursuant to the provisions
of this Subsection 4.1(c) shall be a supplemental agreement
entered into pursuant to the provisions of Article 7 hereof.
Any agreement entered into between the Company, any successor
to the Company or any purchasing body corporate, partnership,
trust or other entity and the Trustee shall provide for
adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided in this Section 4.1
and which shall apply to successive reclassifications,
reorganizations, amalgamations, consolidations, mergers, sales
or conveyances;
(d) in any case in which this Section 4.1 shall require that an
adjustment shall become effective immediately after a record
date for an event referred to herein, the Company may defer,
until the occurrence of such event, issuing to the holder of
any Special Warrant exercising or deemed to be exercising his
subscription rights after such record date the additional
Common Shares or other securities or property issuable upon
such exercise or deemed exercise by reason of the
18
adjustment required by such event; provided, however, that the
Company shall deliver to such holder an appropriate instrument
evidencing such holder's right to receive such additional
Common Shares or other securities or property, as the case may
be, upon the occurrence of the event requiring such adjustment
and the right to receive any distributions made on such
additional Common Shares or other securities or property, as
the case may be, declared in favour of holders of record of
Common Shares or other securities or property, as the case may
be, on and after the date of exercise or deemed exercise or
such later date as such holder would but for the provisions of
this Subsection 4.1(d), have become the holder of record of
such additional Common Shares or other securities or property,
as the case may be, pursuant to the exercise or deemed
exercise of the Special Warrants held by such holder;
(e) after any adjustment pursuant to this Section 4.1, the term
"Common Shares" where used in this Indenture shall be
interpreted to mean securities of any class or classes which,
as a result of such adjustment and all prior adjustments
pursuant to this Section 4.1, a Special Warrantholder is
entitled to receive upon the exercise or deemed exercise of
such holder's Special Warrants, and the number of Common
Shares indicated in any exercise made pursuant to a Special
Warrant shall be interpreted to include the number of Common
Shares or other property or securities a Special Warrantholder
is entitled to receive, as a result of such adjustment and all
prior adjustments pursuant to this Section, upon the full
exercise or deemed exercise of a Special Warrant;
(f) all shares of any class or other securities or property which
a Special Warrantholder is at the time in question entitled to
receive on the full exercise or deemed exercise of his Special
Warrant, whether or not as a result of adjustments made
pursuant to this Section 4.1 shall, for the purposes of the
interpretation of this Indenture, be deemed to be Common
Shares which such Special Warrantholder is entitled to
subscribe for pursuant to the exercise or deemed exercise of
such Special Warrant;
(g) anything in this Section 4.1 to the contrary notwithstanding,
no adjustment shall be made in the subscription rights
attached to the Special Warrants if the issue of Common Shares
is being made pursuant to any stock option or stock purchase
plan in force from time to time for directors, officers or
employees of the Company or any other currently existing
obligation of the Company disclosed to the Trustee and the
Special Warrantholders at the date hereof; and
(h) in the event of any question arising with respect to the
adjustments provided for in this Section 4.1 such question
shall be conclusively determined, subject to the consent of
any stock exchange upon which the Common Shares are then
listed, by a firm of chartered accountants appointed by the
Company and acceptable to the Trustee (which may be the
Company's auditors). Such accountants shall have access to all
necessary records of the Company, and such determination shall
be binding upon the Company, the Trustee, all Special
Warrantholders and all other
19
persons interested therein. In the event that any such
determination is made, the Company shall deliver a certificate
to the Trustee describing such determination;
provided that no adjustment will be required if the holder of a Special Warrant
is otherwise entitled to participate in the event which triggers the adjustment
pursuant to this Section 4.1 on the same basis as such Special Warrantholder
would have been entitled had he exercised or been deemed to have exercised his
Special Warrants and subscribed for Common Shares immediately prior to such
event. Any such participation shall be subject to the prior consent of the TSX.
4.1A COMPLIANCE WITH ASX LISTING RULES REQUIREMENTS: The rights of a Special
Warrantholder will be changed to the extent necessary to comply with the ASX
Listing Rules applying to a reorganisation of capital at the time of the
reorganisation.
4.2 PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT. As a
condition precedent to the taking of any action which would require an
adjustment in any of the subscription rights arising pursuant to the exercise or
deemed exercise of any of the Special Warrants, including the number of Common
Shares which are to be received upon the exercise or deemed exercise thereof,
the Company shall take any corporate action which may, in the opinion of
counsel, be necessary in order for the Company to allot and reserve for issuance
and to validly and legally issue as fully paid and non-assessable, such number
of Common Shares and validly and legally deliver all other securities or
property in which the holders of such Special Warrants are entitled to receive
on the full exercise or deemed exercise thereof in accordance with the
provisions hereof.
4.3 CERTIFICATE OF ADJUSTMENT. The Company shall from time to time
immediately after the occurrence of any event which requires an adjustment or
readjustment as provided in Section 4.1 hereof, deliver a certificate of the
Company to the Trustee specifying the nature of the event requiring the same and
the amount of the adjustment necessitated thereby and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based, which certificate and the amount of the adjustment
specified therein shall be verified by the auditors of the Company, upon whose
verification the Trustee shall be entitled to act and rely. When so verified,
the Company shall, except in respect of any subdivision, or consolidation of the
Common Shares, forthwith give written notice to the Special Warrantholders
specifying the event requiring such adjustment or readjustment and the results
thereof; provided that if the Company has already given the required notices
under Section 4.5 hereof covering all the relevant facts in respect of such
event and if the Trustee consents in writing, no further notice need be given
under this Section 4.3.
4.4 ADJUSTMENT RULES. The adjustments provided for in this Article
4 are cumulative and shall apply (without duplication) to successive actions
requiring an adjustment under the provisions of Section 4.1; provided that,
notwithstanding any other provision of this Article 4, no adjustment shall be
made in the number of Common Shares which may be subscribed for on the exercise
or deemed exercise of a Special Warrant unless it would result in a change of at
least one-hundredth of a Common Share (provided, however, that any adjustments
which by reason of this Section 4.4 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment).
20
In the event that the Company after the date of this Indenture
shall take any action affecting the Common Shares other than action described in
this Article 4, the directors of the Company may, but shall not be required to,
make any other adjustments to the number of Common Shares which may be acquired
upon exercise or deemed exercise of the Special Warrants, to the extent, if any,
such directors deem appropriate, provided that no such adjustment shall be made
which increases the Subscription Price or decreases the number of Common Shares
which may be acquired upon exercise or deemed exercise of the Special Warrants.
4.5 NOTICE OF SPECIAL MATTERS. The Company covenants with the
Trustee that so long as any Special Warrant remains outstanding it will give at
least fourteen (14) days' prior written notice in the manner provided for in
Article 9 to the Trustee and to each Special Warrantholder of any event which
requires an adjustment to the subscription rights attaching to any of the
Special Warrants pursuant to this Article 4. The Company covenants and agrees
that such notice shall contain the particulars of such event in reasonable
detail and, if determinable, the required adjustment in the manner provided for
in this Article 4. The Company further covenants and agrees that it shall
promptly as soon as the adjustment calculations are reasonably determinable,
file a Certificate of the Company with the Trustee showing how such adjustment
shall be computed and direct the Trustee to send a copy of such certificate to
the Special Warrantholders.
4.6 NO ACTION AFTER NOTICE. The Company covenants with the Trustee
that it will not close its transfer books or take any other corporate action
which might deprive the holder of a Special Warrant of the opportunity of
exercising his right of subscription pursuant thereto during the period of
fourteen (14) days after the giving of the notice set forth in Section 4.3 and
4.5 hereof.
4.7 PROTECTION OF TRUSTEE. The Trustee:
(a) shall not at any time be under any duty or responsibility to
any Special Warrantholder to determine whether any facts exist
which may require any adjustment contemplated by Section 4.1
hereof, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed
in making the same;
(b) shall not be accountable with respect to the validity or value
(or the kind or amount) of any Common Share or of any shares
or other securities or property which may at any time be
issued or delivered upon the exercise or deemed exercise of
the subscription rights attaching to any Special Warrant;
(c) shall not be responsible for any failure of the Company to
make any cash payment or to issue, transfer or deliver Common
Shares or certificates for the same upon the surrender or
deemed surrender of any Special Warrants for the purpose of
the exercise or deemed exercise of such rights or to comply
with any of the covenants contained in this Article 4; and
(d) shall not incur any liability or responsibility whatever or be
in any way responsible for the consequence of any breach on
the part of the Company of any
21
of the representations, warranties or covenants herein
contained or of any acts of the agents or servants of the
Company.
ARTICLE 5
EXERCISE AND CANCELLATION OF SPECIAL WARRANTS
5.1 EXERCISE OF SPECIAL WARRANTS. Upon and subject to the
provisions of this Article 5, any holder of a Special Warrant may exercise the
right thereby conferred on him to subscribe for Common Shares for no additional
consideration by surrendering to the Trustee after the issuance of the Special
Warrants to such holder and after the Qualification Date until the Expiry Time
at its principal office in the city of Vancouver, the Special Warrant
Certificate evidencing the Special Warrants, with the exercise form attached to
the Special Warrant Certificate (or another exercise form made available by the
Company) duly completed and executed by the holder or his executors or
administrators or other legal representatives or his or their attorney (which
may be the Company) duly appointed by an instrument in writing in form and
manner satisfactory to the Trustee. The Trustee may act and rely on the address
form for determining residency of the subscribing holder.
Unless the Company has instructed the Trustee in writing to
waive any or all of the following requirements, the Special Warrants may not be
exercised by or for the account or benefit of a U.S. Person or a person in the
United States unless the holder certifies in writing to the Company and the
Trustee that the holder is: (i) an original subscriber of Special Warrants who
has re-confirmed in writing to the Company and the Trustee each of the
representations and warranties made by the holder in connection with such
holder's subscription for Special Warrants; or (ii) a registered transferee of
such Special Warrants who has complied with Subsection 2.3(d) hereof provided
that the Company may, in its sole discretion, accept, in substitution for the
foregoing, evidence satisfactory to the Company and the Trustee, acting
reasonably, to the effect that the Common Shares have been registered under the
U.S. Securities Act and applicable state securities laws or that the Common
Shares may be issued upon exercise of the Special Warrants without registration
under the U.S. Securities Act and any applicable state securities laws.
The foregoing requirements shall not apply to any deemed
exercise by the Trustee of Special Warrants pursuant to the terms hereof as long
as the holder is an original subscriber or a registered transferee of such
Special Warrants.
The exercise form attached to the Special Warrant Certificate
shall be signed as set out above and shall specify:
(a) the number of Common Shares which the Special Warrantholder
wishes to subscribe for upon the exercise of the Special
Warrants (being not greater than the aggregate number of the
Common Shares which such Special Warrantholder is entitled to
acquire pursuant to the Special Warrants so surrendered); and
(b) the person or persons in whose name or names the Common Shares
are to be registered, the address or addresses and the social
insurance number or numbers of such person or persons and the
number of Common Shares to be issued to each
22
such person if more than one is so specified, provided that
the Special Warrantholder shall only be entitled to direct his
entitlement to the Common Shares in a manner permitted by
applicable securities legislation, and provided further that
no certificates for Common Shares shall be registered at or
delivered to an address in the United States unless the person
in whose name the certificates are registered has complied
with the requirements of Subsection 2.3(d) hereof
and the Special Warrants will only be deemed to be surrendered when actually
received by the Trustee.
Any Special Warrants not exercised before the Expiry Date
shall be deemed to be exercised and surrendered by the Trustee on behalf of the
holder thereof as of 4:59 p.m. (Vancouver time) on the Expiry Date.
If any of the Common Shares in respect of which the Special
Warrants are exercised are to be issued to a person or persons other than the
Special Warrantholder in accordance with the provisions of Section 2.3 hereof,
the Special Warrantholder shall pay to the Trustee all requisite stamp or
security transfer taxes or other governmental charges exigible in connection
with the issue of such Common Shares to such other person or persons or shall
establish to the satisfaction of the Trustee that such taxes and charges have
been paid.
If at the time of the exercise or deemed exercise of the
Special Warrants, there remain trading restrictions on the Common Shares
acquired, due to applicable securities legislation in the Qualifying Province or
Australia, the Company may, on the advice of counsel, endorse the certificates
evidencing such Common Shares accordingly until such time as the Company
determines that such endorsement is no longer necessary to avoid a violation of
such laws by the Company and so advises the Trustee in writing or the holder of
any such endorsed certificate, at the holder's expense, provides the Company
with evidence satisfactory in form and substance to the Company (which may
include an opinion of counsel satisfactory to the Company) to the effect that
such holder is entitled to sell or otherwise transfer such Common Shares in a
transaction in which such endorsement is not required, whereupon such endorsed
certificate may thereafter be surrendered to the Company in exchange for a
certificate which does not bear such endorsement.
After delivery of the certificates representing the Common
Shares, in the event of non-receipt of any such certificates by the person to
whom it is so sent as aforesaid, or the loss or destruction thereof, the Company
shall issue and the Trustee shall countersign and deliver to such person a
replacement certificate of like date and tenor in place of the one lost or
destroyed upon being furnished with such evidence of ownership and non-receipt,
loss or destruction and with such indemnity and surety bond or security as the
Trustee may reasonably require. The Special Warrantholder shall bear the cost of
the issue of such replacement certificates.
5.2 EFFECT OF EXERCISE OF SPECIAL WARRANTS. Upon valid exercise or
deemed exercise of the Special Warrants as provided in Section 5.1 hereof, the
Common Shares in respect of which the Special Warrants are validly or deemed
exercised shall be deemed to have been issued, and such person or persons as are
specified pursuant to Section 5.1 hereof shall be deemed to have become the
holder or holders of record of such securities on the date of such valid
exercise
23
(herein called the "Exercise Date") unless the stock transfer books of the
Company shall be closed by law on the said date of such valid exercise, in which
case such securities shall be deemed to have been issued, such person or persons
shall be deemed to have become the holder or holders of record of such
securities and the Exercise Date shall be deemed to be on the date on which such
stock transfer books are next re-opened.
Upon valid exercise of the Special Warrants as aforesaid, the
Trustee shall forthwith give written notice thereof to the Company.
In the case of a Special Warrant which is exercised by a
holder in accordance with the provisions of Section 5.1, within five Business
Days after the Exercise Date of such Special Warrant, the Company shall:
(a) cause to be mailed to the person in whose name the Common
Shares so subscribed for are to be issued, as specified in the
Special Warrant, at the address specified therein;
(b) if so specified therein, cause to be delivered to such person
at the office of the Trustee where such Special Warrant was
surrendered; or
(c) if no specification as contemplated by (a) or (b) is provided,
cause to be mailed to the person in whose name the Common
Shares are to be issued at the address of such person last
appearing on the register maintained by the Trustee pursuant
hereto or as such person may otherwise notify the Trustee in
writing on or prior to the Exercise Date,
certificates for the Common Shares to which the Special Warrantholder is
entitled pursuant to the Special Warrants so exercised.
In the case of a Special Warrant which is deemed to be
exercised and surrendered by the Trustee on behalf of a Special Warrantholder in
accordance with the provisions of Section 5.1, as soon as practicable following
the deemed exercise by the Trustee of such Special Warrants, and provided that
notice has not been given in accordance with the provisions of Section 3.2, the
Trustee shall notify each of such holders in accordance with the provisions of
Section 9.2 to the effect the Trustee has so exercised and surrendered the
Special Warrants on behalf of the Special Warrantholder and that they shall be
entitled to receive certificates for the Common Shares to which they have become
entitled. Within five (5) Business Days after such deemed exercise and surrender
of such Special Warrant, the Company shall cause certificates representing such
Common Shares to be mailed to the address of the holder of the Special Warrants
so exercised last appearing on the register maintained by the Trustee pursuant
to Section 2.2 or as such person may otherwise notify the Trustee in writing on
or prior to the Exercise Date.
5.3 POSTPONEMENT OF DELIVERY OF CERTIFICATES. The Company shall
not be required to deliver certificates in respect of Common Shares during any
period when the stock transfer books of the Company are closed by law and in the
event of an exercise or deemed exercise of a Special Warrant during such period,
the delivery of certificates evidencing such Common Shares
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may be postponed for a period not exceeding five (5) Business Days after the
date of the re-opening of the stock transfer books.
5.4 SPECIAL WARRANTS VOID AFTER EXPIRY TIME. Upon the earlier of
(i) the exercise or deemed exercise of the Special Warrants and (ii) the Expiry
Time, the Special Warrants shall be void and of no value or effect.
5.5 FRACTIONS. To the extent that the holder of a Special Warrant
is entitled to receive on the exercise or partial exercise thereof a fraction of
a Common Share, such right may only be exercised in respect of such fraction in
combination with another Special Warrant or other Special Warrants which in the
aggregate entitle the holder to receive a whole number of Common Shares.
If a holder is not able to, or elects not to, combine Special
Warrants so as to be entitled to acquire a whole number of Common Shares, the
Company shall make an appropriate cash adjustment to such holder in respect only
of the entitlement to a fractional Common Share. In respect of any holder, the
Company shall only be required to make such a cash adjustment once and for one
(1) fractional Common Share and no more. The amount of the cash adjustment shall
be equal to the fraction of a Common Share to which the holder would be entitled
multiplied by the Current Market Price. The Company will not, under any
circumstances, be obligated to issue a cheque to a Special Warrantholder of less
than Cdn.$10.00. The price to be paid shall be provided by the Company in
writing to the Trustee on request.
5.6 PARTIAL EXERCISE OF SPECIAL WARRANTS. The holder of any
Special Warrants may acquire a number of Common Shares less than the number
which the holder is entitled to acquire pursuant to the surrendered Special
Warrant Certificate(s). In the event of any exercise of a number of Special
Warrants less than the number which the holder is entitled to exercise, the
holder of the Special Warrants upon such exercise shall be entitled to receive,
without charge therefor, a new Special Warrant Certificate(s) in respect of the
balance of the Special Warrants represented by the surrendered Special Warrant
Certificate(s) which were not then exercised.
5.7 ACCOUNTING AND RECORDING. The Trustee shall:
(a) promptly account to the Company with respect to Special
Warrants exercised or deemed exercised and any securities or
other instruments, from time to time received by the Trustee
shall be received in trust for, and shall be segregated and
kept apart by the Trustee in trust for, the Company; and
(b) record the particulars of Special Warrants exercised or deemed
exercised, which particulars shall include the names and
addresses of the persons who become holders of Common Shares
on exercise and the Exercise Date in respect thereof. The
Trustee shall provide such particulars in writing to the
Company within five (5) Business Days of any request by the
Company therefor.
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ARTICLE 6
MEETINGS OF SPECIAL WARRANTHOLDERS
6.1 CONVENING OF MEETING. A meeting of Special Warrantholders may
be convened at any time by the Trustee or the Company or by the Special
Warrantholders holding not less than twenty-five per cent (25%) of the aggregate
number of Special Warrants then outstanding, who shall serve the Trustee with a
requisition signed by such holders and the Trustee, upon being funded and
indemnified, shall then be bound to convene a meeting of Special Warrantholders.
In the event that the Trustee fails to convene the meeting after being duly
required to do so, the holders of the then outstanding Special Warrants
representing no less than twenty-five per cent (25%) of the aggregate number of
Special Warrants then outstanding may themselves convene a meeting, the notice
of which shall be signed by any person as such Special Warrantholders may
specify, provided that every such meeting shall be held at the City of Vancouver
or such other place as the Trustee may approve and the Trustee and the Company
shall receive notice of such meeting, as provided in Section 6.2 hereof.
6.2 NOTICE. At least twenty-one (21) days prior notice of a
meeting of Special Warrantholders shall be given to all Special Warrantholders,
the Trustee and the Company in accordance with Article 9 hereof, and the notice
shall state the time, place and in general terms the nature of the business to
be transacted but it shall not be necessary to specify the text of the
resolutions to be considered. It shall not be necessary to specify the nature of
business to be transacted at an adjourned meeting.
6.3 CHAIRMAN. The chairman of the meeting of Special
Warrantholders shall be designated in writing by the Trustee and need not be a
Special Warrantholder. If no person is so designated or if the person so
designated is not present within twenty-five (25) minutes after the time fixed
for the holding of a meeting, the Special Warrantholders and proxyholders for
Special Warrantholders present at the meeting shall choose one of their members
to be the chairman.
6.4 QUORUM. A quorum consists of those Special Warrantholders,
whether present in person or represented by proxy, holding not less than
twenty-five per cent (25%) of the aggregate number of Special Warrants then
outstanding. If at a meeting, a quorum is not present or represented by proxy
within thirty (30) minutes after the time appointed for the meeting, then the
meeting, if called by or upon the requisition of Special Warrantholders shall be
dissolved, but in any other case after the appointment of a chairman, the
meeting shall stand adjourned to such day being not less than five (5) Business
Days later and to such place and time as may be appointed by the chairman of the
meeting. At the adjourned meeting, those persons present in person and owning
Special Warrants or representing by proxy Special Warrantholders shall, in any
event, constitute a quorum for the transaction of business for which the
original meeting was convened. The chairman of any meeting at which a quorum of
the Special Warrantholders is present may with the consent of the meeting,
adjourn any such meeting, and no notice of such adjournment need be given except
such notice, if any, as the meeting may prescribe.
6.5 SHOW OF HANDS. Subject to Section 6.6 hereof, every question
submitted to a meeting, except one requiring an Extraordinary Resolution, shall
be decided in the first instance by a majority of hands on a show of hands, the
outcome of which will be declared by the chairman. Each Special Warrantholder
present, in person or by proxy, shall have one vote.
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6.6 POLL. A poll shall be taken when requested by a Special
Warrantholder acting in person or by proxy and, when demanded on the election of
a chairman or on the question of adjournment, it shall be taken forthwith. If
demanded on any other question or on an Extraordinary Resolution, a poll shall
be taken in such manner and either at once or after an adjournment as the
chairman may direct. The result of a poll shall be the decision of the meeting
at which the poll was demanded. On a poll vote, each Special Warrantholder
acting in person or by proxy shall have one vote for each Special Warrant which
he holds or represents. Votes may be given in person or by proxy and the
proxyholder need not be a Special Warrantholder. The chairman of any meeting
shall be entitled to vote in respect of any Special Warrants and proxies held by
him.
6.7 REGULATIONS. The Trustee, or the Company with the approval of
the Trustee, may from time to time make and from time to time vary such
regulations not contrary to the provisions of this Indenture as it shall think
fit providing for and governing:
(a) the setting of the record date for a meeting for the purpose
of determining Special Warrantholders entitled to receive
notice of and to vote at a meeting;
(b) voting by proxy, the form of instrument appointing
proxyholders, the manner in which proxies are to be executed
and the production of the authority of any persons signing on
behalf of a Special Warrantholder;
(c) the lodging of and means of forwarding the instruments
appointing proxyholders and the time before the holding of a
meeting or adjourned meeting by which the instruments
appointing proxyholders are to be deposited; and
(d) any other matter relating to the conduct of meetings of
Special Warrantholders.
Any regulations so made shall be binding and effective on the holders
and votes given in accordance therewith shall be valid and counted. The
Trustee may permit Special Warrantholders to provide proof of ownership
of the Special Warrants in such manner as the Trustee may approve. Save
as aforesaid, the only persons who shall be recognized at any meeting
as Special Warrantholders or entitled to vote or, except as provided in
Section 6.12 hereof, be present at the meeting in respect thereof shall
be persons who are registered Special Warrantholders or are duly
appointed proxyholders for registered Special Warrantholders.
6.8 MINUTES. Minutes of all resolutions passed and proceedings
taken at every meeting as aforesaid shall be made and duly entered in books to
be from time to time provided for that purpose by the Trustee at the expense of
the Company and any such minutes as aforesaid, if signed by the chairman of the
meeting at which such resolutions were passed or proceedings taken, or by the
chairman of the next succeeding meeting of Special Warrantholders, shall be
prima facie evidence of the matters therein stated and until the contrary is
proved, every such meeting in respect of the proceedings of which minutes shall
have been made shall be deemed to have been duly held and convened and all
resolutions passed thereat or proceedings taken to have been duly passed and
taken.
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6.9 POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION. Subject to the
prior approval of the TSX, the Special Warrantholders shall have the power from
time to time by Extraordinary Resolution:
(a) to agree to or sanction any modification, abrogation,
alteration or compromise of the rights of the Special
Warrantholders or the Trustee (subject to the consent of the
Trustee) in its capacity as agent hereunder or on behalf of
Special Warrantholders against the Company which shall be
agreed to by the Company whether such rights arise under this
Indenture or under the Special Warrants or otherwise;
(b) to assent to any change in or omission from the provisions
contained in the Special Warrants and this Indenture or any
ancillary or supplemental instrument which may be agreed to by
the Company and to authorize the Trustee to concur in and
execute any ancillary or supplemental agreement embodying the
change or omission;
(c) with the consent of the Company, not to be unreasonably
withheld, to remove the Trustee or its successor in office and
to appoint a new agent or agents to take the place of the
Trustee so removed;
(d) to require, direct or authorize the Trustee to enforce any of
the covenants on the part of the Company contained in this
Indenture or the Special Warrants or to enforce any of the
rights of the Special Warrantholders in any manner specified
in such Extraordinary Resolution or to refrain from enforcing
any such covenant or right upon the Trustee being furnished
with an indemnity, and such funding as the Trustee may, in the
reasonable exercise of its discretion determine it requires to
so act;
(e) to restrain any Special Warrantholder from instituting or
continuing any suit or proceedings against the Company for the
enforcement of the covenants on the part of the Company
contained in this Indenture or any of the rights conferred
upon the Special Warrantholders by the Special Warrants and
this Indenture;
(f) to direct any Special Warrantholder who, as such, has brought
any suit, action or proceeding to stay or discontinue or
otherwise deal with the same upon payment of the costs,
charges and expenses reasonably and properly incurred by such
Special Warrantholder in connection therewith;
(g) to waive and direct the Trustee to waive any default on the
part of the Company in complying with any of the provisions of
this Indenture or the Special Warrants either unconditionally
or upon any conditions specified in such Extraordinary
Resolution;
(h) to assent to any compromise or arrangement with any creditor
or creditors or any class or classes of creditors, whether
secured or unsecured, and with holders of any shares or other
securities of the Company; and
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(i) to amend, alter or repeal any Extraordinary Resolution
previously passed or sanctioned by the Special Warrantholders.
An Extraordinary Resolution of the Special Warrantholders is
binding upon all the Special Warrantholders whether present or not present at
the meeting at which the Extraordinary Resolution was passed or whether or not
assented to in writing and each Special Warrantholder, the Trustee and the
Company shall be bound to give effect to the Extraordinary Resolution to the
extent that the Extraordinary Resolution applies to such party.
6.10 MEANING OF "EXTRAORDINARY RESOLUTION". The expression
"Extraordinary Resolution" when used in this Indenture means, subject to Section
6.13, a resolution proposed to be passed as an extraordinary resolution at a
meeting of Special Warrantholders duly convened for the purpose and held in
accordance with the provisions of this Article 6 and attended in person or by
proxy by Special Warrantholders holding not less than fifty per cent (50%) of
the Special Warrants outstanding and passed by not less than sixty-six and
two-thirds per cent (66 2/3%) of the votes cast upon such resolution.
If, at any meeting called for the purpose of passing an
Extraordinary Resolution, Special Warrantholders holding at least fifty per cent
(50%) of the aggregate number of Special Warrants are not present in person or
by proxy within thirty (30) minutes after the time appointed for the meeting,
then the meeting if convened by Special Warrantholders or on a Special
Warrantholders' request, shall be dissolved; but in any other case it shall be
adjourned to such day, being not less than fifteen (15) or more than thirty (30)
days later, and to such place and time as may be appointed by the chairman. Not
less than ten (10) days' prior notice shall be given of the time and place of
such adjourned meeting in the manner provided in Section 9.2. Such notice shall
state that at the adjourned meeting the Special Warrantholders present in person
or by proxy shall form a quorum but it shall not be necessary to set forth the
purposes for which the meeting was originally convened or any other particulars.
At the adjourned meeting the Special Warrantholders present in person or by
proxy shall form a quorum and may transact the business for which the meeting
was originally convened and a resolution proposed at such adjourned meeting and
passed by the requisite vote as provided in this Section shall be an
Extraordinary Resolution within the meaning of this Indenture notwithstanding
that Special Warrantholders holding at least fifty per cent (50%) of the
aggregate number of Special Warrants outstanding are not present in person or by
proxy at such adjourned meeting.
Subject to Section 6.13 hereof, votes on an Extraordinary
Resolution shall always be given on a poll.
6.11 POWERS CUMULATIVE. It is hereby declared and agreed that any
one or more of the powers or any combination of the powers in this Indenture
stated to be exercisable by the Special Warrantholders by Extraordinary
Resolution or otherwise may be exercised from time to time and the exercise of
any one or more of such powers or any combination of powers from time to time
shall not be deemed to exhaust the right of the Special Warrantholders to
exercise the same or any other such power or powers or combination of powers
then or thereafter from time to time.
6.12 COMPANY, SPECIAL WARRANTHOLDERS AND TRUSTEE MAY BE
REPRESENTED. The Company and the Trustee, by their respective employees,
officers and directors, and the legal and
29
financial advisors and auditors of the Company and the Trustee may attend any
meeting of the Special Warrantholders, but they shall have no vote as such. In
addition, any Special Warrantholder is entitled to have his legal or financial
advisors present at any such meeting, but such advisors shall have no vote as
such.
6.13 INSTRUMENTS IN WRITING. All actions that may be taken and all
powers that may be exercised by the Special Warrantholders at a meeting as
hereinbefore in this Article provided may also be taken and exercised by holders
of not less than one hundred per cent (100%) of the aggregate number of Special
Warrants then outstanding by an instrument in writing signed in one or more
counterparts by such holders and the expression "Extraordinary Resolution" when
used in this Indenture shall include an instrument so signed.
6.14 BINDING EFFECT OF RESOLUTIONS. Every resolution and every
Extraordinary Resolution passed in accordance with the provisions of this
Article 6 at a meeting of Special Warrantholders shall be binding upon all the
Special Warrantholders, whether present at or absent from such meeting, and
every instrument in writing signed by Special Warrantholders in accordance with
Section 6.13 shall be binding upon all the Special Warrantholders, whether
signatories thereto or not and each and every Special Warrantholder and the
Trustee (subject to the provisions for indemnity herein contained) shall be
bound to give effect accordingly to every such resolution and Extraordinary
Resolution. In the case of an Extraordinary Resolution in writing, the Trustee
shall give notice in the manner contemplated in Article 9 of the effect of the
Extraordinary Resolution in writing to all Special Warrantholders and the
Company as soon as it is reasonably practicable.
6.15 HOLDINGS BY THE COMPANY OR SUBSIDIARIES OF THE COMPANY
DISREGARDED. In determining whether Special Warrantholders holding the required
number of Special Warrants are present at a meeting of Special Warrantholders
for the purpose of determining a quorum or have concurred in any consent,
waiver, resolution, Extraordinary Resolution or other action under this
Indenture, Special Warrants owned legally or beneficially by the Company or any
subsidiary of the Company shall be disregarded. The Company will provide the
Trustee upon request, a certificate of the Company detailing its holdings and
those of its subsidiaries and the various registrations.
ARTICLE 7
SUPPLEMENTAL AGREEMENTS, MERGER, SUCCESSORS
7.1 PROVISION FOR SUPPLEMENTAL AGREEMENTS FOR CERTAIN PURPOSES.
From time to time the Company (when authorized by a resolution of its directors)
and the Trustee may, subject to the prior approval of the TSX and the provisions
of these presents, and they shall, when so required by any provision of this
Indenture, execute and deliver by their proper officers, deeds, agreements or
instruments supplemental hereto, which thereafter shall form part hereof, for
any one or more of the following purposes:
(a) adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of counsel, are
necessary or advisable in the premises, provided that the same
are not, in the opinion of the Trustee, relying on the advice
of counsel, prejudicial to the interests of the Special
Warrantholders;
30
(b) giving effect to any Extraordinary Resolution passed as
provided in Article 6 hereof;
(c) making such provisions not inconsistent with this Indenture as
may be necessary or desirable with respect to matters or
questions arising hereunder or for the purpose of obtaining a
listing or quotation of the Common Shares issuable upon the
exercise or deemed exercise of the Special Warrants thereof on
any stock exchange, or for the purpose of complying with
applicable laws, provided that such provisions are not, in the
opinion of the Trustee, relying on the advice of counsel,
prejudicial to the interests of the Special Warrantholders;
(d) making any modification in the form of the Special Warrant
Certificate which does not affect the substance of the Special
Warrants;
(e) evidencing any succession, or successive successions, of other
bodies corporate to the Company and the assumption by any
successor of the covenants of the Company herein and in the
Special Warrant Certificates contained as provided hereafter
in this Article 7; and
(f) for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification of any
ambiguities, defective provisions, errors or omissions herein,
provided that, in the opinion of the Trustee, relying on the
advice of counsel, the rights of the Trustee and of the
Special Warrantholders are in no way prejudiced thereby and
provided that the Trustee may in its uncontrolled discretion
decline to enter into any such supplemental indenture which in
its opinion may not afford adequate protection to the Trustee
when the same shall become operative.
7.2 COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. Subject to
Subsection 4.1(b), nothing in this Indenture shall prevent any consolidation,
reorganization, arrangement, amalgamation or merger of the Company with or into
any other body corporate, or bodies corporate, or person, or a conveyance or
transfer of all or substantially all the properties and assets of the Company as
an entirety to any body corporate or person lawfully entitled to acquire and
operate the same, provided, however, that the body corporate or person formed by
such consolidation or amalgamation or arrangement or into which such merger
shall have been made or the person which acquires by conveyance or transfer all
or substantially all the properties and assets of the Company as an entirety
shall execute and deliver to the Trustee prior to or contemporaneously with such
consolidation, reorganization, amalgamation, arrangement, merger, conveyance or
transfer, and as a condition precedent thereto an agreement supplemental hereto
wherein the due and punctual performance and observance of all the covenants and
conditions of this Indenture to be performed or observed by the Company shall be
assumed by such body corporate or person on terms and conditions not adverse to
the Special Warrantholders. The Trustee shall be entitled to receive and shall
be fully protected in relying upon an opinion of counsel and such other advisors
as they deem necessary that any such consolidation, reorganization,
amalgamation, arrangement, merger, conveyance or transfer and any supplemental
agreement executed in connection therewith, complies with the provisions of this
Section 7.2.
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7.3 SUCCESSOR BODY CORPORATE SUBSTITUTED. In case the Company,
pursuant to Section 7.2 hereof, shall be consolidated, amalgamated, reorganized,
arranged or merged with or into any other body corporate, bodies corporate or
person or shall convey or transfer all or substantially all of the properties
and assets of the Company as an entirety to another body corporate or person,
the successor body corporate or person formed by such consolidation,
reorganization, arrangement or amalgamation or into which the Company shall have
been merged or which shall have received a conveyance or transfer as aforesaid
shall succeed to and be substituted for the Company hereunder with the same
effect as nearly as may be possible as if it had been named herein as a party in
substitution for the Company. Such changes may be made in the Special Warrants
as may be appropriate in view of such consolidation, reorganization,
amalgamation, merger, conveyance or transfer and as may be necessary to ensure
that the Special Warrantholders are not adversely affected by such
consolidation, organization, amalgamation, merger, conveyance or transfer.
ARTICLE 8
CONCERNING THE TRUSTEE
8.1 NO CONFLICT OF INTEREST. The Trustee represents to the Company
that, to the best of its knowledge, at the date of the execution and delivery of
this Indenture, there exists no material conflict of interest in the role of the
Trustee as a fiduciary hereunder and its role in any other capacity and agrees
that in the event of a material conflict of interest arising hereafter it will,
within ninety (90) days after ascertaining that it has such material conflict of
interest, either eliminate the same or assign its trust hereunder to a successor
trustee approved by the Company. Notwithstanding the foregoing provisions of
this Section 8.1, if any such material conflict of interest exists or hereunder
shall exist, the validity and enforceability of this Indenture and the Special
Warrant Certificates shall not be affected in any manner whatsoever by reason
thereof.
8.2 REPLACEMENT OF TRUSTEE. The Trustee may resign its duties and
be discharged from all further duties and liabilities hereunder after giving
sixty (60) days notice in writing to the Company, provided that such shorter
notice may be given as the Company shall accept as sufficient. In the event of
the office of Trustee becoming vacant by resignation or incapacity to act or
otherwise, the Company shall appoint in writing a new trustee unless such new
trustee has already been appointed by the Special Warrantholders pursuant to an
Extraordinary Resolution. If the Company makes default for a period of ten (10)
Business Days in making such appointment, then any Special Warrantholder or the
retiring or former Trustee at the expense of the Company may apply to a judge of
the Supreme Court of the Province of British Columbia for the appointment of a
new trustee after such notification to the holders of the then outstanding
Special Warrants and the Company as such judge may order. Upon appointment, the
successor trustee shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Trustee without any
further assurance, conveyance, act or deed; but if for any reason it becomes
necessary or expedient to execute any further deed or assurance the same shall
be done at the expense of the Company and may and shall be legally and validly
executed by the former Trustee. Any company resulting from a merger,
consolidation or amalgamation to which the Trustee for the time being is a party
shall be the successor trustee under this Indenture without any further act. Any
new trustee appointed under this Section 8.2 shall be a corporation authorized
to carry on the business of a trust company in the Qualifying Province. Upon the
32
appointment of a new trustee, the Company shall promptly notify the Special
Warrantholders thereof in the manner provided in Section 9.2.
8.3 DUTY OF TRUSTEE. In the exercise of the rights, duties and
obligations prescribed or conferred by the terms of this Indenture, the Trustee
shall exercise that degree of care, diligence and skill that a reasonably
prudent trustee would exercise in comparable circumstances.
8.4 EXPERTS, ADVISORS AND AGENTS. The Trustee may:
(a) in relation to these presents act and rely and shall be
protected in acting and relying in good faith on the opinion
or advice of or information obtained from any counsel,
auditor, valuer, engineer, surveyor or other expert, whether
obtained by the Trustee or by the Company or otherwise; and/or
(b) employ such agents and other assistants as it may reasonably
require for the proper determination and discharge of its
duties hereunder and may pay reasonable remuneration without
taxation of costs of any counsel for all services performed
for it in the determination and discharge of the duties hereof
and shall receive reimbursement from the Company for all
disbursements, costs and expenses reasonably made or incurred
by it in the determination and discharge of its duties
hereunder and in the management of the trusts hereof. Any
counsel employed or consulted by the Trustee may, but need not
be, counsel for the Company.
8.5 TRUSTEE NOT REQUIRED TO GIVE SECURITY. The Trustee shall not
be required to give security for its conduct or administration of the trusts
hereof and shall not be responsible for the acts, omissions, defaults, errors or
failures of any agents whom it may reasonably employ in the exercise of the
powers conferred upon it hereby, nor for any loss occasioned by its own acts,
omissions or defaults unless such acts, omissions or defaults constitute a
wilful misconduct, wilful or negligent breach of trust or fraud.
8.6 TRUSTEE NOT ORDINARILY BOUND. Subject to Sections 6.1 and 6.9
hereof, the Trustee shall not be bound to do or to take any action for the
enforcement of any of the obligations of the Company under this Indenture unless
and until it is required to do so by an instrument in writing signed by the
holders representing not less than twenty-five per cent (25%) of the aggregate
number of Special Warrants then outstanding. The Trustee may, before taking the
action, require the Special Warrantholders at whose instance the action is
required to deposit with the Trustee the Special Warrants held by them for which
the Trustee shall issue receipts. The obligation of the Trustee to commence or
continue any act, action or proceeding shall be conditional upon such Special
Warrantholders furnishing, when required in writing so to do by the Trustee,
funds sufficient for commencing or continuing the act, action or proceeding and
an indemnity reasonably satisfactory to the Trustee to protect and hold harmless
the Trustee against any loss, damage or liability by reason thereof. None of the
provisions contained in this Indenture shall require the Trustee to risk or
expend its own funds or otherwise incur financial liability in the performance
of any of its duties or in the exercise of any of its rights or powers unless
funded and indemnified as aforesaid.
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The Trustee shall not be bound to give any notice or do or take any
act, action or proceeding by virtue of the powers conferred on it hereby unless
and until it shall have been required so to do under the terms hereof; nor shall
the Trustee be required to take notice of any default hereunder, unless and
until notified in writing of such default, which notice shall distinctly specify
the default desired to be brought to the attention of the Trustee and in the
absence of any such notice the Trustee may for all purposes of this indenture
conclusively assume that no default has been made in the observance or
performance of any of the representations, warranties, covenants, agreements or
conditions contained herein. Any such notice shall in no way limit any
discretion herein given the Trustee to determine whether or not the Trustee
shall take action with respect to any default.
8.7 TRUSTEE MAY RELY ON CERTIFICATES AND EVIDENCE. Whenever in the
administration of the trusts of this Indenture the Trustee shall deem it
necessary or desirable that any matter be proved or established by the Company
prior to taking or suffering any action to be taken hereunder, such matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate or
instrument signed by any of the Chairman of the Board, the President, a
Vice-President, the Secretary or the Treasurer of the Company and delivered to
the Trustee and such certificate or instrument shall be full authority to the
Trustee for any action taken or suffered by it under the provisions of this
Indenture on the faith thereof; provided in its reasonable discretion the
Trustee may in lieu thereof accept other evidence of such fact or matter or may
require such further or additional evidence as to it may seem reasonable.
In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Company shall furnish to the Trustee
such additional evidence of compliance with any provision hereof, and in such
form as may be prescribed by Applicable Legislation or as the Trustee may
reasonably require by written notice to the Company.
In the exercise of its rights and duties, the Trustee may, if
it is acting in good faith, act and rely as to the truth of the statements and
the accuracy of the opinions expressed therein, upon statutory declarations,
opinions, reports, certificates or other evidence furnished to the Trustee
pursuant to a request of the Trustee, provided that such evidence complies with
Applicable Legislation and that the Trustee examines the same and determines
that such evidence complies with the applicable requirements of this Indenture.
Whenever Applicable Legislation requires that evidence be in
the form of a statutory declaration, the Trustee may accept such statutory
declaration in lieu of a certificate of the Company required by any provision
hereof. Any such statutory declaration may be made by any one or more of the
Chairman or Chief Financial Officer of the Company or by any other officer(s) or
director(s) of the Company to whom such authority is delegated by the directors
from time to time.
The Trustee may act and rely and shall be protected in acting
and relying upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, letter, telegram, cablegram or other
paper document believed by it to be genuine and to have been signed, sent or
presented by or on behalf of the proper party or parties.
34
Proof of execution of any document or instrument in writing by
a holder may be made by the certificate of a notary public, or other officer
with similar powers, that the person signing such instrument acknowledged to him
the execution thereof, or by an affidavit of a witness to such execution, or in
any other manner the Trustee considers adequate.
8.8 TRUSTEE'S LIABILITY. The Trustee shall not be liable or
accountable for any loss or damage whatsoever to any person caused by the
performance or failure to perform by it of its responsibilities under this
Indenture save only to the extent that such loss or damage is attributable to
the negligence, wilful misconduct or fraud of the Trustee. The Trustee shall not
be responsible for any misconduct on the part of any counsel, banker, receiver,
agent or other person appointed with due care by it hereunder, or bound to
supervise the proceedings of any such appointee.
8.9 INDEMNIFICATION. Without limiting any protection or indemnity
of the Trustee under any other provision hereof, or otherwise at law, the
Company hereby agrees to indemnify and hold harmless the Trustee from and
against any and all liabilities, losses, damages, penalties, claims, actions,
suits, costs, expenses and disbursements, including legal or advisor fees and
disbursements, of whatever kind and nature which may at any time be imposed on,
incurred by or asserted against the Trustee in connection with the performance
of its duties and obligations hereunder, other than such liabilities, losses,
damages, penalties, claims, actions, suits, costs, expenses and disbursements
arising by reason of the negligence, wilful misconduct or fraud of the Trustee.
This provision shall survive the resignation or removal of the Trustee, or the
termination of this Indenture.
8.10 NO REPRESENTATION AS TO VALIDITY. The Trustee shall be under
no responsibility in respect of the validity of this Indenture or the execution
and delivery hereof by the Company or in respect of the validity or the
execution by the Company of any Special Warrant Certificate issued hereunder;
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Indenture or in any Special Warrant Certificate; nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any Common Shares to be issued upon
the right to acquire provided for in this Indenture and/or in any Special
Warrant Certificate or as to whether any Common Shares will, when issued, be
duly authorized or be validly issued and fully paid and non-assessable, it being
hereby agreed and declared that as to all the matters and things referred to in
this Section 8.11, the duty and responsibility shall rest upon the Company and
not upon the Trustee and the failure of the Company to discharge any such duty
and responsibility shall not in any way render the Trustee liable or place upon
it any duty or responsibility for breach of which it would be liable.
8.11 ACCEPTANCE OF DUTIES. The Trustee hereby accepts the duties
set out in this Indenture and agrees to perform the same upon the terms and
conditions herein set forth or referred to unless and until discharged therefrom
by resignation or in some other lawful manner.
8.12 CONTRACTING WITH COMPANY. The Trustee may contract with the
Company and buy, lend upon and deal in shares in the capital of the Company and
in the Special Warrants constituted hereunder without being accountable for
profits arising therefrom.
35
8.13 TRUSTEE'S AUTHORITY TO CARRY ON BUSINESS. The Trustee
represents to the Company that as at the date hereof it is authorized to carry
on the business of a trust company in the Qualifying Province and is not
required to hold an Australian Financial Services licence under the Corporations
Act 2001 (Commonwealth of Australia). If, notwithstanding the provisions of this
Section 8.13, it ceases to be authorized to carry on such business in such
provinces, the validity and enforceability of this Indenture and the Special
Warrants issued hereunder shall not be affected in any manner whatsoever by
reason only of such event provided that the Trustee shall, within thirty (30)
days after ceasing to be authorized to carry on such business in such provinces,
either become so authorized or resign in the manner and with the effects
specified in Section 8.2 hereof.
8.14 MONETARY DISTRIBUTIONS. The Trustee will have no obligation to
make any monetary distributions to the Special Warrantholders under this
Indenture except to the extent that certified funds have been deposited with the
Trustee.
8.15 TRUST INDENTURE LEGISLATION. In this section, the term
"Applicable Legislation" means the provisions, if any, of any statute relating
to trust indentures and the applicable rules and regulations thereunder or to
the rights, duties and obligations of Trustees and of corporations under trust
indentures, to the extent that such provisions are at the time in force and
applicable to this Indenture but excludes Chapters 2L and 5C of the Corporations
Act 2001 (Commonwealth of Australia). If and to the extent that such provisions
of this Indenture limits, qualifies or conflicts with a mandatory requirement of
Applicable Legislation, such mandatory requirement shall prevail. The Company
and the Trustee agree that each will at all times in relation to this indenture
and any action to be taken hereunder, observe and comply with and be entitled to
the benefits of Applicable Legislation.
8.16 LIMITATIONS ON TRUSTEE. The parties agree that:
(a) nothing in this Agreement will impose on the Trustee any
obligation to see to, or to require evidence of, the
registration or filing (or renewal thereof) of this indenture
or any instrument ancillary or supplemental hereto;
(b) the Trustee shall not be bound to give notice to any person of
the execution hereof;
(c) the Trustee shall not incur any liability or responsibility
whatever or be in any way responsible for the consequences of
any breach by the Company of any obligation herein contained
or of any act of any director, officer, employee or agent of
the Company; and
(d) the Trustee and any person related to the Trustee will not be
appointed a receiver or receiver and manager or liquidator of
all or any part of the assets or undertaking of the Company.
36
ARTICLE 9
NOTICE AND CERTIFICATES
9.1 NOTICE TO COMPANY. Unless and until the Company notifies the
Trustee of a change of address, any notice or communication required or
permitted to be given to the Company under the provisions of this Indenture
shall be valid and effective if delivered to the Company at World Trade Centre,
Suite 654, 999 Canada Place, Vancouver, British Columbia, V6C 3E1 Attention:
Secretary or sent by telecopier (and a copy by regular mail) or other means of
prepaid transmitted or recorded communication to such address, or subject to the
provisions of Section 9.4 hereof, if mailed by prepaid registered mail addressed
to the Company at World Trade Centre, Suite 654, 999 Canada Place, Vancouver,
British Columbia, V6C 3E1 Attention: Secretary, telecopier number (604)
682-2060. Any notice to the Company as aforesaid shall be deemed to have been
effectively given on the earlier of:
(a) the date of delivery, if delivered during normal business
hours of the Company (and, if not, on the next following
Business Day);
(b) the Business Day immediately following the day of sending, if
sent by telecopier (with receipt confirmed), or
(c) on the fifth (5th) Business Day after effectual posting in
Canada.
9.2 NOTICE TO SPECIAL WARRANTHOLDERS. Unless and until a Special
Warrantholder notifies the Company of a change of address, any notice or
communication required or permitted to be given to a Special Warrantholder under
the provisions of this Indenture shall be valid and effective if delivered to
such holders at their post office addresses appearing on the register to be kept
by the Trustee or sent by telecopier (and a copy by regular mail) or other means
of prepaid transmitted or recorded communication to such address, or subject to
the provisions of Section 9.4 hereof, if mailed by prepaid registered mail
addressed to such holders at their post office addresses appearing on the
register to be kept by the Trustee. Accidental error or omission in giving
notice or accidental failure to mail notice to any holder will not invalidate
any action or proceeding founded thereon. All notice may be given to whichever
one of the Special Warrantholders (if more than one) is named first in the
appropriate register hereinbefore mentioned, and any notice so given shall be
sufficient notice to all Special Warrantholders of and any other persons (if
any) interested in such Special Warrants. Any notice to a Special Warrantholder
as aforesaid shall be deemed to have been effectively given on the earlier of:
(a) the date of delivery, if delivered during normal business
hours (and, if not, on the next following Business Day);
(b) the Business Day immediately following the day of sending, if
sent by telex, telegram, cable or telecopier (with receipt
confirmed), or
(c) on the fifth (5th) Business Day after effectual posting in
Canada.
9.3 NOTICE TO TRUSTEE. Unless and until the Trustee is changed in
accordance with the provisions of this Indenture or the Trustee notifies the
Company of a change of address, any
37
notice or communication required or permitted to be given to the Trustee under
the provisions of this Indenture shall be valid and effective if delivered to
the Trustee at CIBC Mellon Trust Company (Attention: Manager, Corporate Trust
Department) at 1066 West Hastings Street, Suite 1600, Vancouver, British
Columbia, V6E 3X1 or sent by telecopier (and a copy by regular mail) or other
means of prepaid transmitted or recorded communication to either of such
addresses, or subject to the provisions of Section 9.4 hereof, if mailed by
prepaid registered mail addressed to the Trustee (Attention: Manager, Corporate
Trust Department) in Vancouver at telecopier number: (604) 688-4301. Any notice
to the Trustee as aforesaid shall be deemed to have been effectively given on
the earlier of:
(a) the date of delivery, if delivered during normal business
hours of the Trustee (and, if not, on the next following
Business Day);
(b) the Business Day immediately following the day of sending, if
sent by telex, telegram, cable or telecopier (with receipt
confirmed), or
(c) on the fifth (5th) Business Day after effectual posting in
Canada.
Surrender of a Special Warrant Certificate and evidence relating thereto
pursuant to Section 2.2 hereof shall be valid and effective if delivered or
mailed by prepaid registered mail to the Principal Office of the Trustee,
(Attention: Manager, Corporate Trust Department) at 1066 West Hastings Street,
Suite 1600, Vancouver, British Columbia, V6E 3X1 and shall be deemed to have
been effectively surrendered on the date of delivery, if delivered during normal
business hours of the Trustee (and, if not, on the next following Business Day)
or, if mailed, on the fifth (5th) Business Day after effectual posting in
Canada.
9.4 MAIL SERVICE INTERRUPTION. If by reason of strike, lockout or
other work stoppage, actual or threatened, of postal employees, any notice to be
given to the Trustee or the Company would be unreasonably delayed in reaching
its destination, such notice shall be valid and effective only if delivered to
an officer of the party to which it is addressed or if sent to such party, at
the appropriate address in accordance with Sections 9.1 or 9.3 hereof, as the
case may be, by telecopier or other means of prepaid transmitted or recorded
communication, or, in the case of Special Warrantholders, if published once (i)
in the national edition of The Globe & Mail; and (ii) in such other place or
places and manner, if any, as the Trustee may require. Any notice given to
Special Warrantholders by publication shall be deemed to have been given on the
last day on which publication shall have been effected in all of the cities in
which publication is required.
9.5 GENERAL PROVISIONS AS TO CERTIFICATES. Each Certificate of the
Company, and opinion of counsel ("Document") required under or referred to in
this Indenture or furnished in connection with any application, written order or
written request made to the Trustee or a Special Warrantholder pursuant to any
provisions of this Indenture shall specify the section under which such
Document, application, written order or written request is being made and shall
include:
(a) a statement that the person signing such Document has read and
understands the conditions precedent with respect to
compliance with which such evidence is being given;
38
(b) a description of the nature and scope of the examination or
investigation upon which the Document is based; and
(c) a statement that the person providing the Document has made
such examination or investigation as he believes is necessary
to enable him to make the statements or give the opinions
contained or expressed therein.
Any application, written demand, statement, request, notice,
designation, direction, nomination or other instrument to be made by the Company
under any of the provisions of this Indenture shall, unless otherwise provided,
be deemed sufficiently made and executed if executed by any one of the
President, any Vice-President, the Secretary or the Chief Financial Officer of
the Company and need not be under the corporate seal of the Company. The Trustee
shall accept a certificate signed by the Secretary of the Company as sufficient
evidence of the passage of any resolution by the directors.
Any Document may be based, insofar as it relates to factual
matters, upon information with respect to the Company which is in the possession
of the Company or upon the certificate or opinion of or representations by an
officer or officers of the Company, unless such counsel knows that the
certificate or opinion or representations with respect to the matters upon which
the certificate or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should have known that the same were erroneous.
Counsel in giving any opinion under this Indenture may rely in
whole or in part upon the opinion of other counsel provided that counsel shall
consider such other counsel as one upon whom he may properly rely.
Any certificate of any expert, insofar as it relates to
matters outside of such expert's competence or responsibility, may be based upon
a certificate or opinion of or upon representations by counsel or some other
qualified expert, unless such first-mentioned expert knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
ARTICLE 10
GENERAL PROVISIONS
10.1 POWER OF BOARD OF DIRECTORS. In this Indenture, wherever the
Company is required or empowered to exercise any acts, all such acts may be
exercised by the directors of the Company or by those officers of the Company
authorized to exercise such acts.
10.2 FORMAL DATE AND EXECUTION DATE. For the purpose of convenience
this Indenture may be referred to as bearing the formal date of December 11,
2002 which shall be the date on which this Indenture shall become effective
between the parties hereto, irrespective of the actual date of execution hereof.
10.3 FURTHER ASSURANCES. The parties hereto and each of them do
hereby covenant and agree to do such things and execute such further documents,
agreements and assurances as
39
may be necessary or advisable from time to time in order to carry out the terms
and conditions of this Indenture in accordance with their true intent.
10.4 UNENFORCEABLE TERMS. If any term, covenant or condition of
this Indenture, or the application thereof to any party or circumstance shall be
invalid or unenforceable to any extent, the remainder of this Indenture or
application of such term, covenant or condition to a party or circumstance other
than those to which it is held invalid or unenforceable shall not be affected
thereby and each remaining term, covenant or condition of this Indenture shall
be valid and shall be enforceable to the fullest extent permitted by law.
10.5 ENTIRE AGREEMENT. This Indenture constitutes the entire
agreement between the parties hereto relating to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties and there
are no general or specific warranties, representations or other agreements by or
among the parties in connection with the entering into of this Indenture or the
subject matter hereof except as specifically set forth herein.
10.6 AMENDMENTS. This Indenture may be altered or amended in any of
its provisions when any such changes are reduced to writing and signed by the
parties hereto but not otherwise.
10.7 COUNTERPARTS. This Indenture may be executed in one or more
counterparts, each of which so executed shall be deemed to be an original and
such counterparts together shall constitute one and the same instrument.
10.8 NO WAIVER. Subject to the express provisions hereof, no
consent or waiver, express or implied, by either party to or of any breach or
default by the other party in the performance by the other party of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance of obligations hereunder by
such party hereunder. Failure on the party of either party to complain of any
act or failure to act of the other party or to declare the other party in
default, irrespective of how long such failure continues, shall not constitute a
waiver by such party of its rights hereunder.
10.9 ENUREMENT. This Indenture shall benefit and bind the parties
to it and their respective successors and assigns.
40
IN WITNESS WHEREOF the parties hereto have executed this
Indenture as of the 12th day of December, 2002.
IVANHOE MINES LTD.
Per: _____________________________________
Per: _____________________________________
CIBC MELLON TRUST COMPANY
Per: _____________________________________
Per: _____________________________________
SCHEDULE "A"
FORM OF SPECIAL WARRANT CERTIFICATE
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND A
DAY AFTER THE DISTRIBUTION DATE]
THE SPECIAL WARRANTS AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS
SPECIAL WARRANT HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"). THIS SPECIAL WARRANT MAY NOT BE
EXERCISED IN THE UNITED STATES OR BY OR FOR THE ACCOUNT OR BENEFIT OF A U.S.
PERSON (AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT) OR A PERSON IN
THE UNITED STATES UNLESS THIS SPECIAL WARRANT AND THE UNDERLYING SECURITIES
ISSUABLE UPON THE EXERCISE THEREOF HAVE BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT AND THE SECURITIES LAWS OF ALL APPLICABLE STATES OF THE UNITED
STATES OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.
[U.S. HOLDERS ONLY] THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"U.S. SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED
OR ASSIGNED UNLESS THEY ARE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED
ONLY: (A) TO THE COMPANY: (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE
904 OF REGULATION S UNDER THE U.S. SECURITIES ACT; (C) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144, IF
APPLICABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D)
WITH THE PRIOR CONSENT OF THE COMPANY, PURSUANT TO ANOTHER EXEMPTION FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.
THE SECURITIES MAY BE SUBJECT TO STATUTORY RESALE RESTRICTIONS IN AUSTRALIA FOR
A LIMITED PERIOD UNDER THE CORPORATIONS ACT 2001 (COMMONWEALTH OF AUSTRALIA).
THE HOLDER OF THE SECURITIES IS ADVISED TO CONSULT ITS OWN LEGAL ADVISORS IN
THIS REGARD.
2
IVANHOE MINES LTD.
ARBN 075 217 097
(the "Company")
THE SPECIAL WARRANTS REPRESENTED BY THIS CERTIFICATE WILL EXPIRE AS OF 5:00
P.M., VANCOUVER TIME, ON THE FIFTH (5TH) BUSINESS DAY FOLLOWING THE EARLIER OF:
1. THE LATER OF (I) THE DAY UPON WHICH A RECEIPT (OR A COPY
THEREOF) FOR A FINAL PROSPECTUS IN RESPECT OF THE COMMON
SHARES ISSUABLE UPON EXERCISE OF THE SPECIAL WARRANTS IS
ISSUED BY THE BRITISH COLUMBIA SECURITIES COMMISSION; AND (II)
THE DATE ON WHICH A PROSPECTUS UNDER CHAPTER 6D OF THE
CORPORATIONS ACT 2001 (AUSTRALIA) IS LODGED WITH THE
AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION IN RELATION TO
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THE SPECIAL
WARRANTS; AND
2. APRIL -, 2003
(THE "EXPIRY DATE"), UNLESS SPECIFICALLY EXERCISED OR DEEMED EXERCISED IN THE
MANNER HEREINAFTER DESCRIBED ON OR PRIOR TO THE EXPIRY DATE.
3
SPECIAL WARRANTS
IVANHOE MINES LTD. - ARBN 075 217 097 (the "Company")
(Continued under the laws of the Yukon Territory)
SPECIAL WARRANT CERTIFICATE NO. _________ __________ Special Warrants
THIS IS TO CERTIFY that _____________________________________
_____________________________________________________ (the "holder") is entitled
to subscribe for, in the manner herein provided, subject to the restrictions
contained herein, at any time and from time to time on or prior to 5:00 p.m.
Vancouver time (the "Expiry Time"), on the Expiry Date, subject to the
adjustments described below, that number of Common Shares which is equal to the
number of Special Warrants represented hereby without payment of any additional
consideration.
The Special Warrants represented by this certificate are
issued under and pursuant to a Special Warrant Indenture (the "Indenture") made
as of December 11, 2002 between the Company and the Trustee (which expression
shall include any successor trustee appointed under the Indenture), to which
Indenture (and any amendments thereto and instruments supplemental thereto)
reference is hereby made for a full description of the rights of the holders of
the Special Warrants and the terms and conditions upon which such Special
Warrants are or are to be, issued and held, all to the same effect as if the
provisions of the Indenture and all amendments thereto and instruments
supplemental thereto were herein set forth and to all of which provisions the
holder of these Special Warrants by acceptance hereof assents. All capitalized
terms not otherwise defined herein shall have the meanings ascribed thereto in
the Indenture.
In the event of any conflict or inconsistency between the
provisions of the Indenture (and any amendments thereto and instruments
supplemental thereto) and the provisions of this Special Warrant Certificate,
except those that are necessary by context, the provisions of the Indenture (and
any amendments thereto and instruments supplemental thereto) shall prevail. The
terms and provisions of the Indenture (and any amendments thereto and
instruments supplemental thereto) are incorporated herein by reference.
The right to subscribe for Common Shares in the capital of the
Company represented hereby may be exercised by either the holder hereof or the
Trustee as follows:
(1) The holder hereof may exercise the Special Warrants after the
Qualification Date and before the Expiry Date by:
(a) duly completing in the manner indicated and executing
the Exercise Form attached hereto; and
(b) surrendering this Special Warrant Certificate to CIBC
Mellon Trust Company (the "Trustee") as hereinafter
set forth.
This Special Warrant Certificate shall be validly surrendered only upon
delivery thereof or by mailing the same to the Trustee at its principal
office in the City of Vancouver (at the address hereinafter indicated).
The Exercise Form attached hereto shall be deemed
4
not to be duly completed if not fully completed in the manner indicated
or if the name and mailing address of the holder do not appear legibly
on such Exercise Form or such Exercise Form is not signed by the
holder.
(2) Subject as provided herein, the Trustee will be deemed to have
exercised and surrendered the Special Warrants represented by this
Special Warrant Certificate on behalf of the holder thereof as of 4:59
p.m. (Vancouver time) on the Expiry Date if the holder fails to
exercise the Special Warrants that may be exercised by it before the
Expiry Time. All Special Warrants shall expire immediately after the
Expiry Time.
In the case of a Special Warrant which is deemed exercised and
surrendered by the Trustee on behalf of a holder, as soon as practicable
following the exercise by the Trustee of such Special Warrants, the Trustee
shall immediately notify the holder hereof in accordance with the provisions of
Section 9.2 of the Indenture to the effect the Trustee has so exercised the
Special Warrants on behalf of the holder.
Not later than the fifth (5th) Business Day after the
surrender to the Trustee of the Special Warrant Certificate evidencing any
Special Warrant with the attached Exercise Form duly completed or the deemed
exercise and surrendered of any Special Warrant by the Trustee on behalf of the
holder thereof, the Trustee will mail to the holder, or to such person as the
holder may otherwise specify in the Exercise Form or by written notice given to
the Trustee prior to such mailing, at the address of the holder or, if so
specified, of such person, or, if specified in the Exercise Form or by written
notice given to the Trustee prior to such mailing, will deliver to such holder
or person at the place where such Special Warrant Certificate was surrendered
certificates representing the number of Common Shares registered in the name of
the holder or, if so specified, such person. In the event of non-receipt of any
such certificate by the person to whom it is so sent as aforesaid, or the loss
or destruction thereof, the Company shall issue and the Trustee shall
countersign and deliver to such person a replacement certificate of like date
and tenor in place of the one lost or destroyed upon being furnished with such
evidence of ownership and non-receipt, loss or destruction and with such
indemnity and surety bond or security as the Trustee may reasonably require. The
holder shall bear the cost of the issue of such replacement certificate.
Upon valid or deemed exercise of the Special Warrants as
provided herein, the person or persons in whose name or names the Common Shares
are issuable, shall be deemed for all purposes (except as provided in the
Indenture) to be the holder or holders of record of such Common Shares and the
Company covenants that it will (subject to and in accordance with the provisions
of the Indenture) cause certificates representing such Common Shares to be
delivered or mailed to such person or persons at the address or addresses
specified in such Exercise Form.
To the extent that the Special Warrants represented by this
Special Warrant Certificate confer the right to subscribe for a fraction of a
Common Share, such right may be exercised in respect of such fraction only in
combination with an additional Special Warrant or Special Warrants which in the
aggregate entitle the holder to acquire a whole number of Common Shares. No
fractional Common Shares will be issued. If a holder is not able to, or elects
not to, combine Special Warrants so as to be entitled to acquire a whole number
of Common Shares, the Company shall make an appropriate cash adjustment. In
respect of any
5
holder, the Company shall only be required to make such a cash adjustment once
and for one fractional Common Share and no more. The amount of the cash
adjustment shall be equal to the fraction of a Common Share to which the holder
would be entitled multiplied by the Current Market Price. The Company will not,
under any circumstances, be obligated to issue a cheque to a Special
Warrantholder of less than Cdn.$10.00.
The Indenture provides for adjustments to the subscription
rights attaching to these Special Warrants in certain events and also provides
for the giving of notice by the Company prior to taking certain actions
specified therein.
The holding of the Special Warrants evidenced by this Special
Warrant Certificate shall not constitute the holder hereof a shareholder of the
Company or entitle such holder to any right or interest in respect thereof
except as herein and in the Indenture expressly provided.
The Special Warrants evidenced by this Special Warrant
Certificate are transferable only in accordance with the terms and conditions
set forth in Section 2.3 of the Indenture which makes reference to the fact that
a person who furnishes evidence (unless the Company has instructed the Trustee
in writing to waive such requirement) to the reasonable satisfaction of the
Trustee that he is:
(a) the executor, administrator, heir or legal representative of
the heirs of the estate of a deceased Special Warrantholder,
(b) a guardian, committee, trustee, curator or tutor representing
a Special Warrantholder who is an infant, an incompetent
person or a missing person,
(c) a liquidator of, or a trustee in bankruptcy for, a Special
Warrantholder, or
(d) a transferee of a Special Warrantholder who provides the
Trustee with evidence satisfactory to the Trustee and the
Company, acting reasonably, including but not limited to a
properly completed and executed declaration attached as
Exhibit "A" to the transfer form attached to the Special
Warrant Certificate, that such transferee is/was either: (i)
not in the United States at the time the buy order for the
Special Warrants was executed, not acquiring the Special
Warrants for the account or benefit of a U.S. Person or a
person in the United States and was not offered the Special
Warrants in the United States, or (ii) a person that has
purchased or acquired Special Warrants in a transaction exempt
from registration under the U.S. Securities Act and has
provided the Company with satisfactory evidence of the
availability of such exemption which may, at the Company's
discretion, include an opinion of counsel and was exempt from
registration under any applicable securities laws of any state
of the United States and that the securities laws of any other
applicable jurisdiction(s) have been complied with in relation
to the transfer of the Special Warrants involved,
may, as set forth in the Indenture, by surrendering to the Trustee such evidence
together with the Special Warrant Certificate in question with a duly executed
instrument of transfer in the form attached and subject to such reasonable
requirements relating to the payment of costs of the
6
transfer by the holder as the Trustee may prescribe and all applicable
securities legislation and requirements of regulatory authorities, become noted
upon the register of holders.
If any of the Common Shares in respect of which the Special
Warrants are exercised are to be issued to a person or persons other than the
holder (as aforesaid), the holder shall pay to the Trustee all requisite stamp
transfer taxes or other governmental charges exigible in connection with the
issue of such Common Shares to such other person or persons or shall establish
to the satisfaction of the Trustee that such taxes and charges have been paid.
This Special Warrant Certificate shall not be valid for any
purpose whatever unless and until it has been countersigned by or on behalf of
the Trustee.
Time shall be of the essence hereof. The Special Warrants and
the Indenture (and any amendments thereto and instruments supplemental thereto)
shall be governed by, performed, construed and enforced in accordance with the
laws of the Province of British Columbia and the laws of Canada applicable
therein and shall be treated in all respects as British Columbia contracts.
Unless the Company has instructed the Trustee in writing to
waive any or all of the following requirements, the Special Warrants may not be
exercised by or for the account or benefit of a U.S. Person or a person in the
United States unless the holder certifies in writing to the Company and the
Trustee that the holder is: (i) an original subscriber of Special Warrants who
has confirmed in writing to the Company and the Trustee each of the
representations and warranties made by the holder in connection with such
holder's subscription for Special Warrants; or (ii) a registered transferee of
such Special Warrants who has complied with the terms of the Special Warrant
Indenture provided that the Company may, in its sole discretion, accept, in
substitution for the foregoing, evidence satisfactory to the Company and the
Trustee, acting reasonably, to the effect that the Common Shares have been
registered under the U.S. Securities Act and applicable state securities laws or
that the Common Shares may be issued upon exercise of the Special Warrants
without registration under the U.S. Securities Act and any applicable state
securities laws.
This Special Warrant may not be exercised in the United States
or by or for the account or benefit of a U.S. Person or person in the United
States other than by: (i) an original purchaser of the Special Warrants from the
Company, or (ii) by a registered transferee of Special Warrants that acquired
the Special Warrants in a transaction exempt from registration under the U.S.
Securities Act and applicable state securities laws and in compliance with the
Special Warrant Indenture.
Unless otherwise determined by the Company by way of written
instructions to the Trustee:
(a) Certificates representing Common Shares issued to
U.S. Persons and to persons in the United States upon the
exercise or deemed exercise of Special Warrants shall bear the
following legend,
7
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
AS AMENDED (THE "U.S. SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS
THEY ARE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED
ONLY: (A) TO THE COMPANY: (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.
SECURITIES ACT; (C) PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144, IF
APPLICABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE
SECURITIES LAWS; OR (D) WITH THE PRIOR CONSENT OF THE COMPANY,
PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S.
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
CANADA. PROVIDED THAT THE COMPANY IS A "FOREIGN ISSUER" WITHIN
THE MEANING OF REGULATION S AT THE TIME OF SALE, A NEW
CERTIFICATE, BEARING NO LEGEND MAY BE OBTAINED FROM THE
REGISTRAR AND TRANSFER AGENT UPON DELIVERY OF THIS CERTIFICATE
AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO THE
REGISTRAR AND TRANSFER AGENT AND THE COMPANY, TO THE EFFECT
THAT SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT."
(b) Certificates representing Common Shares issued upon
the exercise of Special Warrants exercised or deemed exercise
prior to the earlier of the Qualification Date or the Expiry
Date, shall bear the following legend:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THE SECURITIES SHALL NOT TRADE THE SECURITIES BEFORE [INSERT
THE DATE THAT IS FOUR MONTHS AND A DAY AFTER THE DISTRIBUTION
DATE]"
After the exercise or deemed exercise of any of the Special Warrants represented
by this Special Warrant Certificate, the holder will no longer have any rights
under either the Special Warrant Indenture or this Special Warrant Certificate
with respect to such Special Warrants, other than the right to receive
certificates representing the Common Shares issuable upon the exercise or deemed
of the Special Warrants represented by this Special Warrant Certificate, and
these Special Warrants shall be void and of no further value or effect.
IN WITNESS WHEREOF the Company has caused this Special Warrant
Certificate to be signed by its duly authorized officer as of December 11, 2002.
8
IVANHOE MINES LTD.
Per: ____________________________________
Authorized Signatory
Countersigned by:
CIBC MELLON TRUST COMPANY
Per: __________________________________
Authorized Signatory
EXERCISE INSTRUCTIONS TO SPECIAL WARRANTHOLDER
The Special Warrantholder hereof may exercise his right to
subscribe for Common Shares of IVANHOE MINES LTD. ARBN 075 217 097 (the
"Company"), by completing the Exercise Form and surrendering this Special
Warrant Certificate and the duly completed Exercise Form to CIBC Mellon Trust
Company by delivering or mailing it to CIBC Mellon Trust Company at its
principal stock transfer office in the City of Vancouver at 1066 West Hastings
Street, Suite 1600, Vancouver, British Columbia, V6E 3X1.
For your own protection, it is suggested that all
documentation be forwarded to the Trustee by registered mail.
EXERCISE FORM
To: Ivanhoe Mines Ltd.
c/o CIBC Mellon Trust Company
1066 West Hastings Street, Suite 1600
Vancouver, British Columbia
V6E 3X1
The undersigned holder of the within Special Warrant Certificate, pursuant to
the Special Warrant Indenture mentioned therein hereby exercises of the Special
Warrants (the "Exercised Special Warrants") evidenced thereby and hereby
subscribes for a number of Common Shares of Ivanhoe Mines Ltd. ARBN 075 217 097
equal to such number of Common Shares or number or amount of other shares or
securities or property, or combination thereof, to which such exercise entitles
him under the provisions of the Special Warrant Indenture and on the terms
specified in such Special Warrant Certificate and the Special Warrant Indenture.
The undersigned hereby irrevocably directs that such Common Shares be issued and
delivered as follows:
Number(s) or
Amount(s) of
Name(s) in Full Address(es) Common Shares
______________________ __________________________ ________________________
______________________ __________________________ ________________________
______________________ __________________________ ________________________
NO CERTIFICATES WILL BE REGISTERED OR DELIVERED TO AN ADDRESS IN THE UNITED
STATES UNLESS BOX B BELOW IS CHECKED.
(Please print full name in which share and warrant certificates are to be
issued. If any Common Shares are to be issued to a person or persons other than
the Special Warrantholder, the Special Warrantholder must pay to the Trustee all
exigible transfer taxes or other government charges.)
THE UNDERSIGNED CERTIFIES THAT EACH OF THE REPRESENTATIONS AND WARRANTIES MADE
BY THE UNDERSIGNED TO THE COMPANY IN CONNECTION WITH THE UNDERSIGNED'S
ACQUISITION OF THE EXERCISED SPECIAL WARRANTS REMAINS TRUE AND CORRECT ON THE
DATE HEREOF.
The undersigned represents that it: [CHECK ONE ONLY]
[ ] A. is not in the United States or a U.S. Person as defined in
Rule 902 of Regulation S under the United States Securities
Act of 1933, as amended (the "U.S. Securities
2
Act") and is not exercising the Exercised Special Warrants for
the account or benefit of a U.S. Person or a person in the
United States.
[ ] B. is an original subscriber of Special Warrants and each of the
representations and warranties made by the Subscriber in its
Special Warrant Subscription Agreement are true and correct on
the date hereof.
[ ] C. is a registered holder that acquired the Exercised Special
Warrants in a transaction that was exempt from registration
under the U.S. Securities Act and applicable state securities
laws and in compliance with Subsection 2.3(d)(ii) of the
Special Warrant Indenture.
The undersigned elects that its Ivanhoe Mines Ltd. Common Shares are to be held
(please tick one box below)
[ ] on the Canadian principal register; OR
[ ] on the Australian branch register in certificated form; OR
[ ] by way of CHESS Depositary Interests ("CDIS") on the Sponsored
Subregister for CDIs; OR
[ ] by way of CDIs on the CHESS Subregister for CDIs under HIN
(please provide your CHESS HIN)
DATED at this - day of -, 200_.
____________________________________ ___________________________________
Signature Guaranty* Signature of Subscriber**
___________________________________
Name of Subscriber
___________________________________
Address (include Postal Code)
___________________________________
SIN/TIN Number (if any)
* If the Common Shares are to be issued to a person other than the registered
holder, then the signature of the Subscriber must be guaranteed by a bank, trust
company or medallion guaranteed by a member of a recognized stock exchange.
** This signature must correspond exactly with the name appearing on the
registration panel.
Check box if the share and warrant certificates are to be delivered at the
office where this Special Warrant is exercised, failing which they will be
mailed. [ ]
TRANSFER OF SPECIAL WARRANTS
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers to:
______________________________________________________________
Name
______________________________________________________________
Address
______________________________________________________________
_________________ Special Warrants of Ivanhoe Mines Ltd. registered in the name
of the undersigned on the records of Ivanhoe Mines Ltd. maintained by CIBC
Mellon Trust Company represented by the Special Warrant Certificate attached and
irrevocably appoints _________________________ the attorney of the undersigned
to transfer the said securities on the books or register with full power of
substitution.
DATED at this - day of -, 200_.
_______________________________ _______________________________________
Signature Guaranteed (Signature of Special Warrant Holder)
_______________________________________
Print full Name
_______________________________________
Print full address and SIN/TIN (if any)
_______________________________________
Instructions
1. If the Transfer Form is signed by a trustee, executor, administrator,
curator, guardian, attorney, officer of a corporation or any person
acting in a fiduciary or representative capacity, the certificate must
be accompanied by evidence of authority to sign satisfactory to the
Trustee and the Company.
2. The signature on the Transfer Form must be guaranteed by an authorized
officer of a chartered bank, trust company or medallion guaranteed by
an investment dealer who is a member of a recognized stock exchange.
3. Special Warrants will only be transferable in accordance with
applicable securities laws and stock exchange regulations. The transfer
of Special Warrants to a transferee may, depending on the residency of
such transferee, result in the securities obtained upon the exercise of
the Special Warrants (whether after or before obtaining receipts for a
final prospectus relating to the distribution of such securities upon
exercise of Special Warrants) not being freely tradeable in the
jurisdiction where the transferee is resident.
4. UNLESS THE COMPANY HAS OTHERWISE INSTRUCTED THE TRUSTEE IN WRITING, NO
TRANSFER OF SPECIAL WARRANTS WILL BE VALID UNLESS THIS TRANSFER FORM IS
ACCOMPANIED BY: (a) DULY EXECUTED DECLARATION BY THE TRANSFEREE OF
SPECIAL WARRANTS IN THE FORM ATTACHED AS EXHIBIT "A" TO THIS TRANSFER
FORM; AND (b) SUCH OTHER EVIDENCE AS THE TRUSTEE MAY REASONABLY REQUIRE
THAT THE TRANSFER OF SUCH SPECIAL WARRANTS IS BEING MADE IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LEGISLATION.
2
EXHIBIT "A"
DECLARATION OF TRANSFEREE OF SPECIAL WARRANTS OF IVANHOE MINES
LTD.
TO: CIBC Mellon Trust Company, trustee of the Special Warrants of
Ivanhoe Mines Ltd.
AND TO: Ivanhoe Mines Ltd. (the "Company") ARBN 075 217 097
The undersigned transferee ("Transferee") of special warrants
of Ivanhoe Mines Ltd. ARBN 075 217 097 ("Special Warrants") whose name appears
as such on the form of transfer of such Special Warrants that accompanies this
declaration, hereby declares and certifies, for himself and on behalf of each
beneficial transferee of all or any part of such Special Warrants, that the
Transferee is not a `retail client' as defined in Section 761G of the
Corporations Act 2001 (Commonwealth of Australia):
[check one only]
[ ] A. (i) no offers to sell the Special Warrants or the Subject
Securities were made by any person to the Transferee
or any beneficial transferee for whom he is acting
while such persons were in the United States;
(ii) the Transferee and each beneficial transferee for
whom he is acting were outside the United States at
the time of execution and delivery of the instrument
by which the Transferee and each beneficial
transferee for whom he is acting agreed to acquire
the Special Warrants; and
(iii) the Transferee is not, and is not acquiring the
Special Warrants for the account or benefit of, a
U.S. Person as defined in Rule 904 of Regulation S
under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act").
[ ] B. The Transferee has acquired the Special Warrants in a
transaction exempt from registration under the U.S.
Securities Act and applicable state securities laws
and has provided herewith evidence (which the
Transferee acknowledges must be satisfactory to the
Company) of such exemption.
DATED at this - day of -, 200_.
Name of Transferee
By:_________________________________________
Signature of Authorized Representative
_________________________________________
Name of Person Signing
_________________________________________
Title
TABLE OF CONTENTS
Page
ARTICLE 1 INTERPRETATION......................................... 2
ARTICLE 2 ISSUE AND PURCHASE OF SPECIAL WARRANTS................. 6
ARTICLE 3 COVENANTS OF THE COMPANY............................... 11
ARTICLE 4 ADJUSTMENT OF SUBSCRIPTION RIGHTS...................... 15
ARTICLE 5 EXERCISE AND CANCELLATION OF SPECIAL WARRANTS.......... 21
ARTICLE 6 MEETINGS OF SPECIAL WARRANTHOLDERS..................... 25
ARTICLE 7 SUPPLEMENTAL AGREEMENTS, MERGER, SUCCESSORS............ 29
ARTICLE 8 CONCERNING THE TRUSTEE................................. 31
ARTICLE 9 NOTICE AND CERTIFICATES................................ 36
ARTICLE 10 GENERAL PROVISIONS.................................... 38