EXHIBIT 4.9
ECU Facility Agreement
MSV Resources Inc.
Xxxxxxxx Resources Inc.
Xxxxxx Resources Inc.
RMB International (Dublin) Limited
and
RMB RESOURCES LIMITED
(FREEHILLS LOGO)
QV.1 Building 000 Xx Xxxxxxx Xxxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx 0000 Xxxxxxxxx
Telephone x00 0 0000 0000 Facsimile x00 0 0000 0000
xxx.xxxxxxxxx.xxx DX 000 Xxxxx
XXXXXX XXXXXXXXX XXXXX XXXXXXXX SINGAPORE
Correspondent Offices HANOI HO CHI MINH CITY JAKARTA
KUALA LUMPUR
Reference DAW:HTB:80736973
TABLE OF CONTENTS
Clause Page
----
1 DEFINITIONS AND INTERPRETATION 1
1.1 Definitions 1
1.2 Interpretation 15
1.3 Accounting Principles 16
2 CONDITIONS PRECEDENT 16
2.1 Conditions Precedent to issue of first ECU 16
2.2 Conditions Precedent to the issue of all ECUs 18
2.3 Waiver of Conditions Precedent 18
2.4 Certified Copies 18
3 ECU Facility 18
3.1 ECU Facility 18
3.2 ECU Notice 19
3.3 Provision of Issue Price 19
3.4 Use of proceeds 19
4 CONVERSION 19
4.1 Conversion by Holder 19
4.2 Early Redemption of ECUs by MSV 20
4.3 Interest Conversion 21
4.4 Issue of Shares 21
4.5 Current Market Price 22
4.6 Conversion Sum 22
4.7 Restrictions on Conversion and Redemption 23
4.8 Conversion in excess of Allocated Number of Shares 23
4.9 Ranking of Shares 24
5 BONUS ISSUES, RECONSTRUCTIONS, ETC 24
5.1 Bonus Issues 24
5.2 Reconstruction of Capital 24
5.3 Offers to holders of Shares 24
5.4 ECUs to survive merger etc 25
5.5 Takeovers 25
5.6 Issue of shares under Stock Incentive Plans 26
5.7 Approval of the Exchange 26
6 ASSIGNMENT 26
6.1 Transfer of ECUs 26
6.2 Assignment by a Transaction Party 26
6.3 Assignment by the Agent 27
6.4 Participation permitted 27
6.5 Additional costs 27
6.6 Lending Office 27
1
6.7 Disclosure 27
7 REPAYMENT OF ISSUE PRICE, INTEREST AND RELATED MATTERS 27
7.1 Repayment of Issue Price and interest 27
7.2 Interest 28
7.3 Calculation of per annum interest rate 28
7.4 Maximum interest payable 28
7.5 Payment of amounts - general 29
7.6 Late payments 29
7.7 Place of payments 29
7.8 Taxes 30
7.9 Return of ECU Certificates 30
8 REPRESENTATIONS AND WARRANTIES 30
8.1 Representations and warranties 30
8.2 Survival and Repetition 34
8.3 Reliance 34
8.4 Term of representations and warranties 34
9 UNDERTAKINGS 34
9.1 Project related undertakings by MSV and the Guarantors 34
9.2 General undertakings by MSV and the Guarantors 37
9.3 Reporting 39
9.4 Undertaking by Xxxxxxxx in relation to Shares, listing, Securities Laws, etc 40
9.5 Post-closing registrations and other obligations 41
9.6 Term of covenants 42
10 EVENTS OF DEFAULT 42
10.1 Terms of Default 42
10.2 Effect of Default 44
10.3 Indemnity by MSV and the Guarantors 44
10.4 Review events 44
10.5 Undertakings by Finance Parties on realization of Security 44
11 ILLEGALITY AND INCREASED COSTS 45
11.1 Illegality 45
11.2 Increased Cost 45
12 INDEMNITIES 46
12.1 General indemnity 46
12.2 Foreign currency indemnity 46
12.3 Conversion of currencies 47
12.4 Continuing indemnities and evidence of loss 47
13 FEES, TAX, COSTS AND EXPENSES 48
13.1 Arrangement Fee 48
13.2 Commitment fee 48
13.3 Tax 48
2
13.4 Costs and expenses 48
14 SAVING PROVISIONS 49
14.1 No merger of security 49
14.2 Exclusion of moratorium 49
14.3 Powers 49
14.4 Consents 49
14.5 Principal obligations 49
14.6 Non-avoidance 50
14.7 Set-off authorised 50
14.8 Certificates of Agent and Holder 50
14.9 No reliance or other obligations and risk assumption 50
14.10 Attorney 51
14.11 Opinion of the Agent and Holder 51
15 GENERAL 51
15.1 Confidential information 51
15.2 Performance by the Agent of obligations 52
15.3 Transaction Parties to bear cost 52
15.4 Notices 52
15.5 Governing law and jurisdiction 53
15.6 Prohibition and enforceability 53
15.7 Waiver and variation 54
15.8 Attorneys 54
15.9 Counterparts 54
15.10 Language 54
15.11 Superior force 54
16 PROVISIONS IN RELATION TO THE AGENT 54
16.1 Agent not liable 54
16.2 Agent indemnity 55
16.3 Quebec Security 56
3
THIS AGREEMENT
is made on 2004 between the following parties:
1. MSV RESOURCES INC.
a company incorporated under the laws of the Province of
Quebec of 0000, Xxxxxxxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxx
X0X 0X0
Xxxxxx, Xxxxxx
(MSV)
2. XXXXXXXX RESOURCES INC.
a corporation incorporated under the federal laws of
Canada
(XXXXXXXX)
XXXXXX RESOURCES INC.
a company incorporated under the laws of the Province of
Quebec
(XXXXXX)
both of 0000, Xxxxxxxxxx Xxxxxx, Xxxxx
0000 Xxxxxxxx X0X 0X0 Xxxxxx, Xxxxxx
(each a GUARANTOR, and together the XXXXXXXXXX)
0. XXX INTERNATIONAL (DUBLIN) LIMITED
of 000 Xxxxxxxxxx Xxxx
Xxxxxx 0 Xxxxxxx
(RMBI)
5. RMB RESOURCES LIMITED
a company incorporated under the laws of the United
Kingdom of Two Xxxxxx Xxxxxx
Xxxxxx XX0 0XX
Xxxxxx Xxxxxxx
(AGENT)
RECITAL
MSV, the Guarantors, RMBI and the Agent have agreed to enter
into this agreement to record the terms on which RMBI has agreed
to provide to MSV a facility for up to 8 exchangeable capital
units of C$500,000 each.
THE PARTIES AGREE
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement, unless the context otherwise
requires:
ALLOCATED NUMBER OF SHARES means:
(a) 7,834,074 Shares; less
1
(b) the number of Shares that have been issued as a
result of a Conversion under the terms of this
agreement;
AMOUNT OWING means the Principal Conversion Amount and all
interest payable under this agreement which has not been
Converted or paid;
ARRANGEMENT FEE means C$200,000;
AURAMET TRANSACTION means the transaction set out in the
agreement entitled "Copper, Silver and Gold Purchase
Agreement" between Xxxxxx, Xxxxxxxx and Auramet Trading, LLC
and the documents referred to in that agreement;
AUTHORISATION includes any consent, registration, filing,
agreement, certificate, licence, approval, permit, authority
or exemption from, by or with a Governmental Agency;
AUTHORISED OFFICERS means in relation to:
(a) a Transaction Party, the President, the Vice
President, a director or a company secretary for the
time being;
(b) a Holder, the Agent or RMBI, a director, an associate
director, a company secretary, a president, a
vice-president, an officer whose title contains the
word "director", "manager", "executive", "president"
or "vice-president" or a person performing the
functions of any of them,
or in either case a person appointed by a party to act as an
Authorised Officer for the purposes of the Facility or the
Transaction Documents;
AVAILABILITY PERIOD means the period commencing on the date of
satisfaction of the conditions precedent in clause 2.1 and
ending on the earlier of:
(a) the First Conversion Date; and
(b) the date the first Redemption Notice is given;
BONUS ISSUE means an issue of shares by way of capitalisation
of profits, reserves, share premium account or capital
redemption reserve fund or in any other manner;
BONUS SHARES means Shares issued under a Bonus Issue;
BUSINESS DAY means a day on which banks are open for general
banking business in London, Montreal, Toronto and Dublin
excluding Saturdays, Sundays and public holidays;
C$ and CANADIAN DOLLARS means the lawful currency of Canada;
XXXXXXXX GROUP means Xxxxxxxx, MSV, Xxxxxx and Corporation
Copper Rand Inc.;
XXXXXXXX GROUP MEMBER means any member of the Xxxxxxxx Group;
XXXXXXXX HYPOTHEC means the hypothec granted by Xxxxxxxx in
favour of the Agent and RMBI dated on or about the date of
this agreement;
XXXXXXXX MILL means the gold processing plant owned by Xxxxxx
which processes ore from the Xxx Xxxx Mine and is, among other
things, the subject of the Xxxxxx Hypothec;
CERTIFICATE means a share certificate or other document (which
conforms with the Listing Rules) evidencing the legal
ownership of a share listed on the Exchange;
2
COLLATERAL SECURITY means any present or future Encumbrance,
Surety Obligation or other document or agreement created or
entered into by MSV, another Transaction Party or another
person as security for the payment of the Amount Owing;
COMMITMENT means the obligation of RMBI to subscribe for up to
8 ECUs, as that obligation may be reduced or cancelled in
accordance with this agreement;
CONSTITUENT DOCUMENTS in relation to a company, means the
memorandum and articles of association or other constituent
documents of that company;
CONTROL in relation to Xxxxxxxx includes having direct or
indirect power, by any means at all:
(a) to control 20% or more of the total votes which might
be cast at its general meeting;
(b) to elect or appoint a majority of its board of
directors; or
(c) to direct its management and policies;
CONVENTIONAL SECURITY means a conventional hypothec, a
resolutory right, a right of redemption, a reservation of
ownership, a trust and any security device or other real
right, whether or not capable of registration, granted by
agreement for the purpose of securing the performance of an
obligation;
CONVERSION means conversion of the Issue Price of an ECU, or
any interest on that Issue Price, to Shares, in accordance
with the terms of this agreement, and CONVERT and like words
have corresponding meanings;
CONVERSION DATE means the date on which a Holder is to Convert
the Issue Price of an ECU, or any interest on that Issue
Price, to Shares in accordance with the terms of this
agreement, being the date nominated in a Conversion Notice
given under clauses 4.1,4.2 or 7.2(b)(l);
CONVERSION NOTICE means a notice substantially in the form
attached to the ECU Certificate;
CONVERSION PERIOD means the period beginning on the First
Conversion Date and ending on the Final Conversion Date;
CONVERSION PRICE means C$0,574 per Share;
CONVERSION SUM means the amount determined in accordance with
clause 4.6;
COPPER RAND PROJECT means the gold and copper project, located
in the XxXxxxxx Township in the Province of Quebec, and
includes without limitation, all mining rights, all rights
with respect to the areas the subject of those mining rights,
Product, Authorisations, Environmental Approvals, mining
information, buildings, works, workshops, facilities,
improvements, structures, systems, fixtures, plant, machinery,
tools and other movable property at any time used or intended
for use in connection with or incidental to the exploration,
mining, storage, transporting, processing and marketing of
Product, and all associated facilities and infrastructure;
CURRENT MARKET PRICE means on a Conversion Date, the price
determined in accordance with clause 4.5;
3
DECEMBER 2002 AGREEMENT means a royalty agreement dated 30
December 2002 (as amended by a termination agreement dated 1
January 2003 between Xxxxxx, MSV, Xxxxxxxx, Promittere and
others) between Xxxxxx, MSV, Xxxxxxxx, Promittere and others
which came into force on 31 December 2002, and which is
referred to as the December 2002 Agreement in the MSV Titles
Opinion and the Xxxxxx Titles Opinion;
DEFAULT means any event of default described in part 10;
DISCLOSURE DOCUMENTS means, in respect of Xxxxxxxx, its:
(a) Annual Report for the fiscal year ended 31 December
2003;
(b) Management Proxy Circular used in connection with the
solicitation of proxies from the shareholders of
Xxxxxxxx in connection with the annual and special
meeting of the shareholders of Xxxxxxxx held on 12
May 2004;
(c) Annual Report on Form 20-F for the fiscal year ended
31 December 2003 including the documents incorporated
by reference;
(d) the consolidated audited financial statements of
Xxxxxxxx for the fiscal years ended 31 December 2003
and 2002;
(e) the interim unaudited consolidated financial
statements of Xxxxxxxx as at 30 June 2004 and 2003
and for the three month and six month periods
preceding those dates, together with the interim
Management's Discussion and Analysis which is
attached;
(f) Management's Discussion and Analysis of Operating
Results for the year ended 31 December 2003; and
(g) unaudited non-consolidated financial statements of
all Xxxxxxxx Group Members for the fiscal year ended
31 December 2003;
DOCUMENTS means the Project Documents and the Transaction
Documents;
ECU means an exchangeable capital unit of C$500,000 issued on
the terms set out in this agreement;
ECU CERTIFICATE means a certificate substantially in the form
of schedule 2;
ECU NOTICE means a notice substantially in the form of
schedule 1;
ENCUMBRANCE means a legal cause of preference, a dismemberment
of the right of ownership, a special mode of ownership, a
restriction on the right to dispose or an interest or power:
(a) reserved in an interest in any asset including any
retention of title: or
(b) created or otherwise arising in any interest in any
asset under a Conventional Security, mortgage,
charge, xxxx of sale, lien, pledge, trust or power,
by way of security for the payment of a debt, another monetary
obligation or the performance of another obligation, and
includes an agreement to grant or create any of the above;
ENVIRONMENTAL APPROVALS means all permits, consents,
approvals, licences, certificates or other authorisations of
any kind required by an Environmental Law;
4
ENVIRONMENTAL LAW means any Law concerning environmental
matters, and includes but is not limited to Laws concerning
land use, development, pollution, restoration, waste disposal,
toxic and hazardous substances, conservation of natural or
cultural resources and resource allocation including any Law
relating to exploration for, and development or exploitation
of, any natural resource;
ENVIRONMENTAL LIABILITIES means any obligation, requirement,
expense, penalty or fine under an Environmental Law which
would or could be imposed on a Xxxxxxxx Group Member, or an
Authorised Officer or employee of a Xxxxxxxx Group Member, or
any occupier of the Project Area or other area now or in the
future owned or occupied by a Xxxxxxxx Group Member;
EQUIPMENT FINANCE means Financial Indebtedness used by a
Transaction Party for the purpose of acquiring Movable Plant
and Equipment;
EXCHANGE means The Toronto Stock Exchange or, if the Shares
are not listed on that stock exchange, the stock exchange on
which the Shares are listed as may be selected by Xxxxxxxx and
approved by the Finance Parties;
EXCHANGE APPROVAL means the approval of the Exchange in
connection with the transactions contemplated in the
Transaction Documents, including the issuance of the ECUs, the
issuance of Shares on Conversion and the listing of the Shares
required to be available for Conversion;
EXCHANGE BUSINESS DAYS means days on which trading of
securities takes place on the Exchange;
FACILITY means the ECU facility provided to MSV by RMBI in
accordance with part 3;
FINAL CONVERSION DATE means the date 24 months from the first
Issue Date;
FINANCE PARTY means either the Agent, RMBI or any other Holder
and FINANCE PARTIES means both of them;
FINANCIAL INDEBTEDNESS means any debt or other monetary
liability in respect of moneys borrowed or raised or financial
accommodation including, but not limited to, under or in
respect of any:
(a) xxxx, bond, debenture, note, letter of credit, bank
guarantee or similar instrument;
(b) acceptance, endorsement or discounting arrangement;
(c) Surety Obligation;
(d) finance lease;
(e) deferred purchase price (for more than 90 days) of
any asset or service;
(f) obligation to deliver goods or provide services paid
for in advance by any financier or in relation to
another financing transaction; or
(g) amount of capital and premium payable on or in
connection with the redemption of preference shares
or an amount of purchase price payable for or in
connection with the acquisition of redeemable
preference shares,
and irrespective of whether the debt or liability:
(h) is present or future;
5
(i) is actual, prospective, contingent or otherwise;
(j) is at any time ascertained or unascertained;
(k) is owed or incurred alone or severally or jointly or
both with another person; or
(l) is a combination of the above;
FIRST CONVERSION DATE means the date 6 months from the first
Issue Date;
FORCE MAJEURE EVENT means:
(a) an act of God;
(b) war, revolution, or any other unlawful act against
public order or authority;
(c) a restraint by any Governmental Agency; or
(d) any other event which a reasonable person could not
foresee or reasonably make provision for or insure
against,
which wholly or partially prevents, hinders, obstructs, delays
or interferes with the development or operation of the Mining
Assets or the sale of Product;
GOVERNMENTAL AGENCY means a government or a governmental,
quasi-governmental, administrative, fiscal or judicial body,
department, commission, authority, tribunal, agency or entity;
GUARANTEE means the guarantee and indemnity dated on or about
the date of this agreement between each Guarantor and the
Agent;
HOLDER means RMBI or a person who becomes entitled to the
benefit of an ECU under clause 6.1;
INSOLVENCY EVENT means the happening of any of the following
events with respect to a Xxxxxxxx Group Member:
(a) an application is made to a court for an order that a
Xxxxxxxx Group Member be wound up and that
application is not discharged or removed within 10
Business Days of it being made, or an order is made
that a Xxxxxxxx Group Member be wound up;
(b) an application is made to a court for an order
appointing a liquidator or provisional liquidator in
respect of a Xxxxxxxx Group Member and that
application is not discharged or removed within 10
Business Days of it being made, or one of them is
appointed, whether or not under an order;
(c) a receiver, receiver and manager, official manager,
trustee, administrator, controller or similar
official is appointed over any of the assets or
undertaking of a Xxxxxxxx Group Member;
(d) except to reconstruct or amalgamate while solvent on
terms approved by the Agent, a Xxxxxxxx Group Member
enters into, or resolves to enter into, a scheme of
arrangement, deed of company arrangement or
composition with, or assignment for the benefit of,
all or any class of its creditors, or it proposes a
reorganisation, moratorium or other administration
involving any of them;
6
(e) a Xxxxxxxx Group Member resolves to wind itself up,
or otherwise dissolve itself, or gives notice of
intention to do so, except to reconstruct or
amalgamate while solvent on terms approved by the
Agent or is otherwise wound up or dissolved;
(f) a Xxxxxxxx Group Member:
(1) is insolvent or unable to pay its debts when
they are due;
(2) states that it is insolvent or unable to pay
its debts when they are due;
(3) is insolvent as defined in any applicable
law; or
(4) commits an act of bankruptcy under the
Bankruptcy and Insolvency Act (Canada);
(g) a Xxxxxxxx Group Member suspends payment of its debts
generally;
(h) a Xxxxxxxx Group Member takes any step to obtain
protection or is granted protection from its
creditors under any applicable law, including under
the Bankruptcy and Insolvency Act (Canada) or under
the Companies' Creditors Arrangement Act (Canada);
(i) a Xxxxxxxx Group Member becomes an insolvent under
administration as defined in any applicable law or
action is taken which could result in that event;
(j) a notice to deregister under any applicable law is
given to, or an application to deregister is made by,
or in respect of a Xxxxxxxx Group Member; or
(k) anything analogous or having a substantially similar
effect to any of the events specified above happens
under the law of any applicable jurisdiction,
including the laws of the Province of Quebec;
INTER-COMPANY CLAIMS means all debts and liabilities of each
Transaction Party to any other Transaction Party on any
account and in any capacity, irrespective of whether the debts
and liabilities:
(a) are present or future;
(b) are actual, prospective, contingent or otherwise;
(c) are at any time ascertained or unascertained;
(d) are owed or incurred by or on account of a
Transaction Party alone severally or jointly with
another person;
(e) are owed to or incurred for the account of a
Transaction Party alone, or severally or jointly with
another person;
(f) are owed to another person as agent (whether
disclosed or not) for or on behalf of a Transaction
Party; or
(g) comprise a combination of the above;
INTEREST CONVERSION AMOUNT means:
7
(a) with respect to a Conversion under clause 4.1,
interest which has accrued since the Interest Payment
Date which immediately precedes the Conversion Date
applicable to the Conversion; and
(b) with respect to a Conversion under clause 4.3,
interest which MSV has elected to capitalise on the
Interest Payment Date to which that Conversion
relates and which is to be Converted under that
clause;
INTEREST PAYMENT DATE means:
(a) each Quarterly Date occurring after the first Issue
Date; and
(b) the Final Conversion Date;
ISSUE DATE means each date on which RMBI pays the Issue Price
for an ECU to MSV under part 3;
ISSUE PRICE means C$500,000 for each ECU;
XXX XXXX PROJECT means the gold and copper mine and all
present and future associated immovable and movable property
and infrastructure known as the Xxx Xxxx Mine located in the
Province of Quebec, Canada and includes the Xxxxxxxx Mill;
JUNE 2002 AGREEMENT means a royalty agreement dated 30 April
2002 (as amended by a termination agreement dated 1 January
2003 between Xxxxxx, MSV, Xxxxxxxx, Promittere and others)
between Xxxxxx, MSV, Xxxxxxxx, Promittere and others which
came into force on 30 June 2002 and has been registered on the
MRN Register under number 50526 in respect of MSV and under
number 50527 in respect of Xxxxxx, and which is referred to as
the June 2002 Agreement in the MSV Titles Opinion and the
Xxxxxx Titles Opinion;
LAND REGISTER has the same meaning as that expression is given
in the MSV Titles Opinion and the Xxxxxx Titles Opinion;
XXXXXX means Xxxxxx de Xxxxx LLC;
XXXXXX OPINION means the opinion of Xxxxxx as counsel for MSV
and the Guarantors in relation to matters under the laws of
the Province of Quebec and the federal laws of Canada
applicable in the Province of Quebec, including, without
limitation, the Securities Laws;
LAWS means all applicable
federal, provincial, municipal and regional statutes, laws,
rules, regulations, by-laws or orders;
LENDING OFFICE means the office of RMBI set out on page 1 of
this agreement or any other office notified in writing by the
Agent or a Holder to MSV in accordance with this agreement;
LIBO PAGE means the page entitled "LIBO" on the Reuters
Monitor Money Rates Service or any other page which may
replace the LIBO page for the purpose of displaying offered
rates for United States Dollar deposits;
LIBOR on any date, means the rate per cent per annum
determined by the Agent to be:
(a) the average of the rates quoted on the LIBO Page at
about 11.00 am (London time) on that date as being
the rate per annum at which United States Dollar
deposits are offered for a period of 90 days,
eliminating the
8
highest rate or (where more than one bank quoting a
rate on the LIBO Page quotes, the highest rate) one
of the highest rates and eliminating the lowest rate
or (where more than one bank quoting a rate on the
LIBO Page quotes the lowest rate) one of the lowest
rates, and rounding up the resultant figure to 4
decimal places;
(b) where 2 or less rates are quoted for the relevant
period on the LIBO Page at the relevant time, the
average of the rates notified to the Agent on that
date by each Reference Bank to be the rate per annum
at which United States Dollar deposits are offered to
that Reference Bank for a period of 90 days, rounding
up the resultant figure to 4 decimal places; or
(c) if LIBOR cannot be determined in accordance with
paragraphs (a) or (b) of this definition, the rate
most nearly approximating the rate that would
otherwise have been calculated by the Agent in
accordance with paragraph (a) having regard to
comparable indices then available in the financial
markets;
LISTING RULES means the listing rules of the Exchange together
with any agreement between Xxxxxxxx and the Exchange in
connection with the listing of the Shares;
MARGIN means 3.5% per annum;
MATERIAL ADVERSE CHANGE means a material adverse change in the
financial condition or property of a Xxxxxxxx Group Member or
a Transaction Party which would have a Material Adverse
Effect;
MATERIAL ADVERSE EFFECT means a material adverse effect on:
(a) the ability of a Transaction Party to perform an
obligation under a Transaction Document to which it
is a party;
(b) the value of the Secured Property; or
(c) the business or operations of a Xxxxxxxx Group
Member;
XXXXXX HYPOTHEC means the hypothec granted by Xxxxxx in favour
of the Agent and RMBI on or about the date of this agreement;
XXXXXX NSR means the agreement between Xxxxxx and Repadre
Capital Corporation dated 23 April 1993, registered on the MRN
Register under registration number 47463 and at the Land
Register under registration number 2744965 (files number
90-A-241-1, 90-A-241-2 and 90-A-241-3, replaced respectively
by 90-A-1845, 90-A-1846 and 90-A-1847) which provides for a
net smelter return royalty in favour of Repadre Capital
Corporation;
XXXXXX TITLES OPINION means the opinion dated 26 October 2004
of Xxxxxx Xxxxxxxx as counsel for the Transaction Parties in
relation to certain Mineral Rights and Mining Tenements which
are owned by Xxxxxx;
MINERAL RIGHTS means:
(a) the Mining Tenements;
(b) all entitlements of any of the Transaction Parties to
carry out exploration, development or mining
activities in the Project Area;
9
(c) any present or future interest from time to time held
by or on behalf of any of the Transaction Parties in
any present or future mineral right, mining lease,
right, lease, licence, claim, permit or other
authority which confers or may confer a right to
prospect or explore for or mine any metals or
minerals (including precious stones) in any part of
the of the Project Area;
(d) any present or future renewal, extension,
modification, substitution, amalgamation or variation
of any of the mineral rights described above, whether
extending over the same or greater or lesser area;
and
(e) any present or future application for or interest in
any of the above, which confers or which, when
granted, will confer the same or similar rights;
MINING ASSET means:
(a) the Projects; and
(b) to the extent not included in (a), the Secured
Property;
MINING LAW means the Mining Act (Quebec);
MINING TENEMENTS means the mining tenements described in the
Schedule "A" to both the MSV Hypothec and the Xxxxxx Hypothec;
MOBILE PLANT AND EQUIPMENT means:
(a) mobile plant and equipment constituting:
(1) vehicles; and
(2) earth-moving equipment,
but excluding, for greater certainty:
(b) items of plant or equipment or other corporeal
movable property which are capable of being moved but
are fixed to any part of the Project in the ordinary
course of their use or which are physically attached
or joined to any party of the Project including,
without limitation:
(1) compressors; and
(2) hoists;
MRN REGISTER has the same meaning as that expression is given
in the MSV Titles Opinion and the Xxxxxx Titles Opinion;
MSV HYPOTHEC means the hypothec granted by MSV in favour of
the Agent, as fonde de pouvoir, on or about the date of this
agreement;
MSV NSR means the agreement (as amended by a purchase and sale
agreement dated 16 December 1997) between Corner Bay Minerals
Inc., Corner Bay Resources Inc., SOQUEM Inc., MSV and
Explorations Cache Inc. dated 14 October 1994 and registered
on the MRN Register under registration number 447914 which
provides for a net smelter return royalty of 2% in favour of
Corner Bay Resources Inc. and SOQUEM Inc.;
MSV TITLES OPINION means the opinion dated 26 October 2004 of
Xxxxxx Xxxxxxxx as counsel for the Transaction Parties in
relation to certain Mineral Rights and Mining Tenements which
are owned by MSV;
10
1991 TRANSACTION means the debenture, preferred share and swap
transaction described in Notes 7 and 10 (a) to the financial
statements for the fiscal year ended 31 December 2003
contained in the Annual Report (Form 20-F) for Campbell lodged
with the United States Securities Exchange Commission;
1991 TRANSACTION OPINION means the opinion of Xxxxxx as
counsel for Xxxxxxxx in regard to liabilities of the
Transaction Parties with respect to the 1991 Transaction;
PAYMENT CURRENCY means the currency in which any payment is
actually made;
PERMITTED ENCUMBRANCES means the Encumbrances described in
schedule 4;
POTENTIAL DEFAULT means an event which with the giving of
notice, passing of time, fulfilment of some other condition or
any combination of these may become a Default;
POWER means any right, power, authority, discretion or remedy
conferred on a Finance Party by any Transaction Document or
any applicable Law;
PRINCIPAL CONVERSION AMOUNT means the Issue Price of an ECU
that has not been Converted;
PRIVATE PLACEMENT POLICY means the rules and policies of the
Exchange relating to the issuance of treasury securities
without prospectus disclosure in reliance on an exemption from
the prospectus requirement of applicable Canadian securities
legislation;
PRODUCT means the present and future right, title and interest
of a Xxxxxxxx Group Member in and to all gold and copper
(including without limitation, gold and copper bearing
material, dore bullion, refined gold and copper concentrates)
and other metals and minerals mined, extracted or derived from
the Project Area and the Projects;
PROJECTS means each of:
(a) the Xxx Xxxx Project; and
(b) the Copper Rand Project;
PROJECT AREA means:
(a) the areas the subject of the Mining Tenements; and
(b) any freehold, lease and other land and immovable
property in respect of which a Xxxxxxxx Group Member
has a right, interest or servitude or right of access
to or entry upon for the purposes of the Xxx Xxxx
Project;
PROJECT ASSETS means all the right, title and interest both
present and future of any of the Transaction Parties which is
attributable to the Xxx Xxxx Project and includes all the
right, title and interest both present and future of any of
the Transaction Parties in, to, under or derived from any of:
(a) the Mineral Rights in respect of the mining tenements
described in Schedule "A" to the Xxxxxx Hypothec;
(b) Product derived from the Project Area;
(c) the Project Area;
11
(d) each Project Document;
(e) any title to or interest in any land or immovable
property, lease, servitude, right of way or right to
occupy land or immovable property which is held now
or at a later time by a Transaction Party in respect
of the Xxx Xxxx Project, including without limitation
the immovable property described in the schedule to
the Xxxxxx Hypothec and all present and future rents
produced by any of those immovables and all present
and future indemnities paid under any insurance
contracts covering those rents;
(f) each Authorisation and Environmental Approval in
relation to the Xxx Xxxx Project;
(g) any other contract, agreement, permit, lease,
licence, consent, servitude, right of way and other
rights or interests in land or immovable property,
which relates to the exploration, prospecting,
appraisal, development, production, transportation
and processing of Product from the Xxx Xxxx Project
and the sale of that Product;
(h) all:
(1) geological, geophysical or technical
information in the custody or control of a
Transaction Party and all other intellectual
and industrial property of a Transaction
Party that relates to the presence, absence,
extent or production of deposits of the
Product in the Project Area or which has
been obtained from the exploration and
prospecting for, or production or
development of, Product within the Project
Area or any area which may in the future
form part of the Project Area; and
(2) documents and records relating to the Xxx
Xxxx Project;
(i) all buildings, works, workshops, facilities,
improvements, structures, systems, fixtures, plant,
furnaces, machinery barges, tools and other movable
property at any time used or intended for use in
connection with or incidental to the exploration,
mining, storage, transporting and processing of
Product extracted or derived from the Xxx Xxxx
Project, and all associated facilities and
infrastructure (including any treatment or processing
plant); and
(j) all present and future proceeds from any of the above
including under all present and future insurance
contracts and under any expropriation;
PROJECT CASHFLOW MODEL AND CAPITAL SCHEDULE means a 24 month
cashflow model for Xxxxxxxx and its subsidiaries and the
Projects and a development and capital schedule in relation to
the Projects to be prepared by MSV or Xxxxxxxx in a form
acceptable to the Agent, provided to the Agent under clause
2.1(i);
PROJECT DOCUMENTS means:
(a) all instruments and indicia of title to the Mineral
Rights and all other documentation under which a
Transaction Party derives the right to prospect,
explore, develop or mine the Project Area;
(b) all instruments or agreements relating to the supply
of utilities, including without limitation, water and
power, to the Xxx Xxxx Project;
12
(c) all surface leases and other instruments in respect
of the storage or use of tailings, effluent or other
materials in respect of the Xxx Xxxx Project; and
(d) each Sales Contract;
PROMITTERE means Promittere Asset Management Limited;
QUARTERLY DATE means each of 31 December, 31 March, 30 June
and 30 September in each year;
RATE means the aggregate of:
(a) LIBOR; and
(b) the Margin;
RECEIVABLES means any right of Xxxxxx to payment for Product
sold, including, but not limited to, the rights to receive
payment under a Sales Contract;
REDEMPTION means redemption of the Issue Price of an ECU, and
any interest on that Issue Price, by MSV in accordance clause
4.2, and REDEEM and like words have corresponding meanings;
REDEMPTION DATE means the date on which MSV Redeems an ECU,
being the date nominated in a Redemption Notice given under
clause 4.2(a);
REDEMPTION NOTICE means the notice substantially in the form
of schedule 3;
REFERENCE BANK means the principal London offices of Barclays
Bank PLC, JPMorgan Chase & Co. and National Westminster Bank
plc;
RELEVANT CURRENCY means the currency in which a payment must
be made under this agreement or any other Transaction
Document;
RESTORATION FLANS means any and all rehabilitation and
restoration plans required under the Mining Law (including any
modifications approved by the relevant Governmental Agencies
from time to time) with respect to the Mining Assets, and
includes all obligations to be performed in respect to the
rehabilitation of all tailings (if any) and any financial
guarantee and amount required to be placed on deposit with
Governmental Agencies in connection with those obligations;
ROYALTY means:
(a) the Xxxxxx NSR;
(b) the MSV NSR;
(c) the 2001 Agreement as it relates to Xxxxxx;
(d) the June 2002 Agreement as it relates to Xxxxxx; and
(e) the December 2002 Agreement as it relates to Xxxxxx;
SALES CONTRACT means any contract, agreement or arrangement
for the sale, transfer or other disposal, or any contract,
agreement or arrangement for any agency for sale, exchange,
transfer or other disposal of Product derived or extracted
from the Xxx Xxxx Project;
SAME DAY FUNDS means a bank draft, a certified cheque or other
immediately available funds by way of wire transfer;
SECURED PROPERTY means the property the subject of the
Security;
13
SECURITIES LAWS means all applicable securities laws in each
of the provinces and territories of Canada and the respective
regulations and rules under those laws together with
applicable published policy statements of the securities
regulatory authorities in those provinces and territories;
SECURITY means:
(a) the Xxxxxxxx Hypothec;
(b) the Xxxxxx Hypothec;
(c) the MSV Hypothec;
(d) any Collateral Security;
SHARES means fully paid common shares in the capital of
Xxxxxxxx;
STOCK INCENTIVE PLAN means each existing and any future stock
incentive plan approved by the shareholders of Xxxxxxxx which
gives a person the option to purchase Shares on any terms;
SURETY OBLIGATION means a guarantee, suretyship, letter of
credit, letter of comfort or another obligation (whatever
called and of whatever nature):
(a) to provide funds (whether by the advance or payment
of money, the purchase of or subscription for shares
or other securities, the purchase of assets or
services, or otherwise) for the payment or discharge
of;
(b) to indemnify a person against the consequences of
default in the payment of; or
(c) to be responsible for,
a debt or monetary liability of another person or the
assumption of any responsibility or obligation in respect of
the insolvency or the financial condition of another person;
TAXES means taxes, levies, imposts, deductions, charges,
withholdings and duties imposed by any authority (including,
but not limited to, stamp and transaction duties), (together
with any related interest, penalties, fines and expenses in
connection with them), except if imposed on the overall net
income of a Holder;
TRADING PERIOD means for the purposes of determining the
Current Market Price the period of 20 Exchange Business Days
ending on the date on which the Shares were last sold on the
Exchange before the date referred to in clauses 4.5(a)(l),
4.5(a)(2) or 4.5(a)(3) (as applicable);
TRANSACTION DOCUMENTS means:
(a) this agreement;
(b) the Security;
(c) the Guarantee;
(d) the ECU Certificates; and
(e) any other document which the parties agree in writing
is a Transaction Document for the purposes of this
agreement;
TRANSACTION PARTIES means:
14
(a) MSV;
(b) Xxxxxxxx;
(c) Xxxxxx; and
(d) any other person who MSV, the Guarantors and the
Agent agree is a Transaction Party for the purpose of
this agreement;
2001 AGREEMENT means a royalty agreement (as amended by a
termination agreement dated 1 January 2003 between Xxxxxx,
MSV, Xxxxxxxx, Promittere and others) between Xxxxxx, MSV,
Xxxxxxxx, Promittere and others which came into force on 31
December 2001 and has been registered on the MRN Register
under number 50327 in respect of MSV and 50326 in respect of
Xxxxxx, and which is referred to as the 2001 Agreement in the
MSV Titles Opinion and the Xxxxxx Titles Opinion;
VOLUME WEIGHTED AVERAGE TRADING PRICE or VWATP means the price
per Share calculated in accordance with clause 4.6(b).
1.2 INTERPRETATION
In this agreement, headings and underlinings are for
convenience only and do not affect the interpretation of this
agreement and, unless the context otherwise requires:
(a) words indicating the singular include the plural and
vice versa;
(b) words indicating a gender include any gender;
(c) other parts of speech and grammatical forms of a word
or phrase defined in this agreement have a
corresponding meaning;
(d) an expression indicating a natural person includes
any company, partnership, trust, joint venture,
association, corporation or other body corporate and
any Governmental Agency;
(e) a reference to any thing (including, but not limited
to, any right) includes a part of that thing;
(f) a reference to a part, clause, party, annexure,
exhibit or schedule is a reference to a part and
clause of, and a party, annexure, exhibit and
schedule to, this agreement and a reference to this
agreement includes any annexure, exhibit or schedule;
(g) a reference to a statute, regulation, proclamation,
ordinance or by-law includes all statutes,
regulations, proclamations, ordinances or by-laws
amending, consolidating or replacing it, and a
reference to a statute includes all regulations,
proclamations, ordinances and by-laws issued under
that statute;
(h) a reference to a document, includes all amendments or
supplements to, or replacements or novations of, that
document, except when that reference is to a Royalty;
(i) a reference to a party to a document includes that
party's successors and permitted assigns;
15
(j) a reference to an agreement other than this agreement
includes an undertaking, deed, agreement or legally
enforceable arrangement or understanding whether or
not in writing;
(k) a reference to an asset includes all property of any
nature, including, but not limited to, a business,
and all rights, revenues and benefits;
(1) a reference to a document includes any agreement in
writing, or any certificate, notice, instrument or
other document of any kind;
(m) a reference to liquidation includes official
management, appointment of an administrator,
compromise, arrangement, merger, amalgamation,
reconstruction, winding-up, dissolution, assignment
for the benefit of creditors, scheme, composition or
arrangement with creditors, insolvency, bankruptcy,
or any similar procedure or, where applicable,
changes in the constitution of any partnership or
person, or death;
(n) a Default "continues" until it has been waived by the
Agent or rectified;
(o) where the day on or by which any matter or thing is
to be done is not a Business Day, that matter or
thing must be done on or by the following Business
Day; and
(p) a reference to MSV, the Guarantors, the Agent, RMBI
or a Holder, subject to part 6, is a reference to or
includes, as appropriate, their respective
successors, transferees and assigns.
1.3 ACCOUNTING PRINCIPLES
In this agreement, unless the context otherwise requires:
(a) all computations and determinations as to financial
matters, and all financial statements to be delivered
under this agreement, must be made or prepared in
accordance with generally accepted accounting
practices and principles determined with reference to
the Handbook of the Canadian Institute of Chartered
Accountants, as amended from time to time, as
applicable to public enterprises, consistently
applied; and
(b) all accounting terms used in this agreement have the
meanings respectively given to those terms by those
practices and principles for the time being.
2 CONDITIONS PRECEDENT
2.1 CONDITIONS PRECEDENT TO ISSUE OF FIRST ECU
RMBI is not obliged to pay the Issue Price for the first ECU
until the Agent has received all of the following in form and
substance satisfactory to it:
(a) CONSTITUENT DOCUMENTS: a certified copy of the
Constituent Documents of MSV and each of the
Guarantors;
(b) TRANSACTION DOCUMENTS: an original copy of each of
the Transaction Documents (other than any Collateral
Security), executed, stamped (if necessary) and,
where applicable, in registrable form together with
all fully
16
executed documents and other things necessary to
effect registration of them;
(c) PROJECT DOCUMENTS: a certified copy of any Project
Documents requested by the Agent;
(d) CORPORATE AUTHORISATION: a certified copy of a
resolution of the directors of MSV and each of the
Guarantors approving the issue of the ECU
Certificates and the transactions contemplated by the
Transaction Documents, authorising execution by MSV
and the Guarantors of the Transaction Documents to
which each is a party, and authorising a person or
persons (being Authorised Officers) to sign notices,
certificates or other documents in connection with
the Transaction Documents on behalf of MSV and the
Guarantors;
(e) AUTHORISED SIGNATORIES: a certified copy of the
signatures of all Authorised Officers of MSV who are
authorised to sign notices, certificates or other
documents in connection with the Transaction
Documents on its behalf;
(f) LEGAL OPINIONS: the:
(1) Xxxxxx Opinion;
(2) 1991 Transaction Opinion;
(3) MSV Titles Opinion; and
(4) Xxxxxx Titles Opinion;
(g) ACCOUNTS: a certified copy of:
(1) the consolidated financial statements of
Xxxxxxxx and its subsidiaries for the
financial year ending on 31 December 2003;
and
(2) the consolidated unaudited financial
statements of Xxxxxxxx and its subsidiaries
for the 6 month period ending on 30 June
2004;
(h) INSURANCE: evidence of compliance with clause 9.1(e);
(i) PROJECT CASHFLOW MODEL AND CAPITAL SCHEDULE: of the
Project Cashflow Model and Capital Schedule;
(j) AURAMET TRANSACTION: full particulars of the terms of
the Auramet Transaction;
(k) ENQUIRIES: results of searches, enquiries and
requisitions concerning the Project, MSV and the
Guarantors and their capacity to enter into and
perform their obligations under the Transaction
Documents to which each is a party;
(1) MINERAL RIGHTS: evidence that the Mineral Rights are
valid and in good standing;
(m) AUTHORISATIONS: evidence that all Authorisations
required for the Transaction Documents and the
transactions contemplated by them have been obtained;
(n) ARRANGEMENT FEE: evidence that MSV has paid or has
made satisfactory arrangements to pay the Arrangement
Fee to the Agent under clause 13.1;
17
(o) EXCHANGE APPROVALS: evidence that all necessary
Exchange Approvals to this agreement and the
transactions contemplated by it have been obtained;
(p) CONDITIONAL ALLOTMENT OF SHARES: evidence of the
conditional allotment to the Holders of the Shares
(assuming a Conversion Sum of C$0,574) required to be
issued to the Holders on Conversion;
(q) OTHER APPROVALS: evidence that all other approvals
necessary for the transactions contemplated by the
Transaction Documents have been obtained; and
(r) OTHER MATTERS: any other certificates,
Authorisations, documents, matters or things which
the Agent, in its discretion, requires.
2.2 CONDITIONS PRECEDENT TO THE ISSUE OF ALL ECUS
RMBI is not obliged to pay the Issue Price for any ECU until
the Agent has received all of the following in form and
substance satisfactory to it:
(a) COMMITMENT NOT EXCEEDED: evidence that the Commitment
under the Facility is not, nor will it be, exceeded
by the provision of the ECU;
(b) CERTIFICATE REGARDING MATERIAL ADVERSE EFFECT: a
certificate stating that since the end of the
accounting period for the accounts referred to in
clause 2.1(g), no event has occurred (and is
continuing) which has or may have a Material Adverse
Effect;
(c) NO DEFAULT: evidence that no Default or Potential
Default has occurred and is continuing; and
(d) REPRESENTATIONS AND WARRANTIES: evidence that the
representations and warranties in clause 8.1 are true
and correct on and as of the proposed Issue Date as
if each had been made on and as of that date in
respect of the facts and circumstances existing at
that time.
2.3 WAIVER OF CONDITIONS PRECEDENT
The conditions precedent set out in clauses 2.1 and 2.2 are
for the benefit of the Holders, and may only be waived by the
Agent.
2.4 CERTIFIED COPIES
Where a certified copy of a document is to be given to the
Agent under clause 2.1, an Authorised Officer of the relevant
Transaction Party must certify the copy to be a true, complete
and up-to-date copy of the original document as at a date
acceptable to the Agent.
3 ECU Facility
3.1 ECU FACILITY
(a) Subject to part 0, XXXX agrees to subscribe for up to
8 ECUs and to pay the Issue Price under each ECU it
subscribes for to MSV.
18
(b) If the Commitment has not or will not be exceeded by
RMBI subscribing for an ECU the subject of an ECU
Notice under this clause 2.1(b), MSV may at any time
during the Availability Period give an ECU Notice in
accordance with clause 3.2 to the Agent in respect of
an ECU.
(c) Each ECU Notice given by MSV must request payment of
the Issue Price for at least 2 ECUs.
3.2 ECU NOTICE
(a) Each ECU Notice given under clause 3.1 must:
(1) be substantially in the form of schedule 1
and signed by an Authorised Officer of MSV;
(2) specify the date (which must be a Business
Day during the Availability Period) which
MSV proposes to be the Issue Date in
relation to the ECU or ECUs the subject of
the ECU Notice; and
(3) be received by RMBI and the Agent not later
than 11.00 am (London time) on the day 3
Business Days before the Issue Date proposed
in the ECU Notice.
(b) MSV must give to RMBI and the Agent on the Issue Date
the ECU Certificates for the ECU or ECUs the subject
of the ECU Notice.
(c) An ECU Notice is irrevocable and effective on
receipt.
3.3 PROVISION OF ISSUE PRICE
(a) If MSV gives an ECU Notice and provides the ECU
Certificate or ECU Certificates in accordance with
clause 3.2, RMBI will, subject to clause 3.3(b) and
the other terms of this agreement, provide the Issue
Price for each ECU the subject of the ECU Notice on
the applicable Issue Date.
(b) RMBI will not be obliged to provide the Issue Price
for an ECU in accordance with clause 3.3(a) if on the
date for payment of the Issue Price a Default or
Potential Default has occurred and is continuing.
3.4 USE OF PROCEEDS
(a) MSV must use the Issue Price for an ECU for the
re-development of the Copper Rand Mine and for
general working capital purposes of the Xxxxxxxx
Group in accordance with the Project Cashflow Model
and Capital Schedule.
(b) Neither RMBI nor the Agent has any responsibility in
respect of the application of the proceeds of the
Issue Price for an ECU.
4 CONVERSION
4.1 CONVERSION BY HOLDER
(a) At any time during the Conversion Period, or in the
circumstances described in clause 4.2(b), a Holder
may elect to Convert any of its ECUs
19
to Shares by giving a Conversion Notice to each of
the Agent, MSV and Xxxxxxxx not less than 5 Business
Days before the proposed Conversion Date.
(b) The number of Shares received by the Holder under
clause 4.1 (a) will be the sum of:
(1) in relation to the Principal Conversion
Amount of an ECU, the amount determined by
dividing:
(A) the Principal Conversion Amount as
at the Conversion Date; by
(B) the Conversion Sum; and
(2) in relation to the Interest Conversion
Amount of an ECU, the amount determined by
dividing:
(A) the Interest Conversion Amount as
at the Conversion Date; by
(B) the Current Market Price.
(c) Before 11.00am (Toronto time) on the Conversion Date,
the Agent will give a written notice to MSV and
Xxxxxxxx specifying:
(1) the Principal Conversion Amount;
(2) the Interest Conversion Amount; and
(3) the number of Shares to be issued on
Conversion of the relevant ECUs.
4.2 EARLY REDEMPTION OF ECUS BY MSV
(a) At any time before the First Conversion Date, MSV may
elect to Redeem one or more ECUs by giving a
Redemption Notice to the Agent not less than 20
Business Days before the proposed Redemption Date.
(b) If the Agent receives a Redemption Notice in
accordance with clause 4.2(a) and as a result of the
Redemption there would be less than 2 ECUs
outstanding, the Agent may (on account of the Holder)
elect to Convert one ECU (if, as a result of the
Redemption, there would be one ECU outstanding) and
up to 2 ECUs (if, as a result of the Redemption,
there would be no ECUs outstanding) by giving MSV and
Xxxxxxxx a Conversion Notice in accordance with
clause 4.1 before the proposed Redemption Date.
(c) The number of Shares the Holder receives if it elects
to Convert under clause 4.2(b) will be determined
under 4.1(b).
(d) If MSV gives the Agent a Redemption Notice in
accordance with clause 4.2(a) it must pay the Agent
(on account of the Holder) on the Redemption Date in
Same Day Funds:
(1) the Issue Price for each of the ECUs to be
Redeemed (other than any ECUs the Agent has
elected to Convert under clause 4.2(b)); and
20
(2) the interest which has accrued under the
terms of this agreement on each of those
ECUs.
4.3 INTEREST CONVERSION
(a) If a Holder elects to Convert the Interest Conversion
Amount on an Interest Payment Date by giving a
Conversion Notice in accordance with clause
7.2(b)(l), then the number of Shares the Holder will
receive will be determined by dividing:
(1) the Interest Conversion Amount as at the
relevant Interest Payment Date; by
(2) the Current Market Price discounted by the
maximum discount permitted by the Exchange
in accordance with the Private Placement
Policy for that Current Market Price.
(b) On or as soon as practicable after the relevant
Interest Payment Date, the Agent will give a written
notice to MSV and Xxxxxxxx specifying the Interest
Conversion Amount and the number of Shares to be
issued on Conversion of the Interest Conversion
Amount.
4.4 ISSUE OF SHARES
(a) If Conversion occurs under clauses 4.1, 4.2 or 4.3,
Xxxxxxxx must issue to the Holders the number of
Shares determined in accordance with those clauses
within 5 Business Days following the Conversion Date.
In accordance with applicable Securities Law and
policies of the Exchange, the Shares that may be
delivered on Conversion may not be sold or otherwise
disposed of for a period of 120 days from the date of
issuance of the ECU in the absence of either a
prospectus or an exemption from the prospectus
requirements under the applicable Securities Law.
(b) Xxxxxxxx must give Certificates to the Holders in
respect of that number of Shares within 15 Business
Days of the Conversion Date.
(c) On the issue to the Holders of the Certificates
referred to in clause 4.4(b), the Principal
Conversion Amount or Interest Conversion Amount, as
applicable, which is the subject of the relevant
Conversion is deemed to have been paid by Xxxxxxxx to
the Holder. As between Xxxxxxxx and MSV, MSV
acknowledges in favour of Xxxxxxxx that it is
indebted to Xxxxxxxx in the amount of any Principal
Conversion Amount and any Interest Conversion Amount
deemed to have been paid by Xxxxxxxx.
(d) MSV and Xxxxxxxx must take all necessary steps to
ensure that all Shares to be issued under clause
4.4(a) are listed on the Exchange before they are
issued.
(e) If a Conversion occurs under clauses 4.1 or 4.2 and
the number of Shares to be issued under clause
4.4(a), in aggregate with the number of Shares
already issued under this agreement, would exceed
7,834,074, Xxxxxxxx will promptly take all necessary
steps to have an additional number of Shares listed
on the Exchange to fulfil its obligations under
clause 4.4(d).
21
4.5 CURRENT MARKET PRICE
(a) The Current Market Price for a Conversion under
clause 4.1(b), 4.2(b) or 4.3 is the Volume Weighted
Average Trading Price of the Shares, expressed in C$
and fractions of C$, sold on the Exchange during the
Trading Period last occurring before:
(1) in the case of a Conversion under clause
4.1(b), the Conversion Date specified in the
Conversion Notice given under clause 4.1
(a);
(2) in the case of a Conversion under clause
4.2(b), the Conversion Date specified in the
Conversion Notice given under that clause;
and
(3) in the case of a Conversion under clause
4.3, the Interest Payment Date in respect of
which the Conversion Notice under clause
7.2(b) is given.
(b) The Volume Weighted Average Trading Price is
calculated as follows:
[ CPi x Vi ]
VWATP = E --------
[ TV ]
Where:
VWATP is the Volume Weighted Average Trading Price;
CPi is the weighted average trading price of Shares
traded on the Exchange for day i, as provided by the
Exchange;
Vi is number of Shares traded on the Exchange on day
i;
TV is total number of Shares traded on the Exchange
during the Trading Period; and
i = each of days 1 to 20 of the Trading Period.
(c) The Volume Weighted Average Trading Price will be
determined by reference to the actual prices and
volumes of the Shares traded as published by the
Exchange, or if not published by the Exchange, as
determined by the Agent from any other available
source.
4.6 CONVERSION SUM
For the purposes of clauses 4.1(b), 4.2(b) and 4.3(a):
(a) if the Current Market Price as calculated under
clause 4.5(a) is greater than or equal to the
Conversion Price and less than C$1.70, the Conversion
Sum will be the Conversion Price; or
(b) if the Current Market Price as calculated under
clause 4.5(a) is greater than or equal to C$1.70, the
Conversion Sum will be the Current Market Price
multiplied by the Conversion Price divided by the
C$1.70.
22
4.7 RESTRICTIONS ON CONVERSION AND REDEMPTION
In the case of a Conversion by the Holder under clause 4.1, a
Holder may Convert all ECUs it holds at one time or may
Convert one or more ECUs at different times. In the case of a
Redemption by MSV under clause 4.2, MSV may Redeem all ECUs at
one time or may Redeem one or more ECUs at different times,
and clause 4.2(b) will apply for the benefit of the Agent in
relation to each Redemption. A Holder may only Convert the
whole of an ECU. MSV may only Redeem the whole of an ECU.
4.8 CONVERSION IN EXCESS OF ALLOCATED NUMBER OF SHARES
(a) If a Conversion takes place and the number of Shares
to be issued under this agreement would on Conversion
exceed the Allocated Number of Shares, the Agent will
request MSV and Xxxxxxxx to apply to the Exchange for
an approval (RELEVANT APPROVAL) to list more than the
Allocated Number of Shares.
(b) MSV and Xxxxxxxx will as soon as possible make, sign
and do all acts, matters and things necessary in
order to apply for and obtain the Relevant Approval
and comply with any conditions imposed by the
Exchange as part of the Relevant Approval.
(c) Conversion with respect to that part of the Amount
Owing as relates to the number of Shares for which no
Relevant Approval is required will take place in
accordance with clauses 4.1 (a), 4.2(b) and 4.3(a) so
that Conversion with respect to that part of the
Amount Owing will occur on the Conversion Date for
the relevant Shares.
(d) Conversion with respect to that part of the Amount
Owing as relates to the number of Shares for which
Relevant Approval is required will, despite the time
at which the Relevant Approval is obtained or
anything to the contrary contained in this agreement,
be deemed to occur as at the Conversion Date for the
relevant Shares.
(e) If MSV and Xxxxxxxx have not, for any reason,
obtained all the Relevant Approvals by the date 3
months after the date Conversion was to have taken
place under clause 4.1(a), 4.2(b) or 4.3(a), then MSV
and Xxxxxxxx must consult with the Agent with a view
to determining whether the Relevant Approval can be
obtained. MSV and Xxxxxxxx must comply with the
directions of the Agent in relation to taking all
reasonable steps which may be available to MSV and
Xxxxxxxx to obtain Relevant Approval,
(f) If the Agent, in its absolute discretion, determines
that the Relevant Approval cannot be obtained, or if
the Relevant Approval has not been obtained by the
date 4 months after the date Conversion was to have
taken place under clause 4.1(a), 4.2(b) or 4.3(a),
then despite any other matter referred to in this
clause, the Agent may, by written notice to MSV,
cancel the Conversion (to the extent that it has not
taken effect under clause 4.8(b)), in which event the
remainder of the Amount Owing will be due and payable
by MSV to the Agent on demand.
23
4.9 RANKING OF SHARES
Each Share issued to a Holder under this part will, from the
date on which it is issued, rank in all respects pari passu
with the other then existing issued Shares, but will not carry
any rights to any dividends or other distributions declared or
paid or made on the Shares (other than as provided for in part
5) before the relevant Conversion Date.
5 BONUS ISSUES, RECONSTRUCTIONS, ETC
5.1 BONUS ISSUES
(a) If at any time before a Conversion Date, Xxxxxxxx
makes a Bonus Issue and allots to the holders of
Shares any Bonus Shares, then Xxxxxxxx must in
addition to any Shares to be issued to the Holder
under part 4 issue to the Holders the number of
additional Bonus Shares as the Holders would have
been entitled to receive by way of participation in
the issue of Bonus Shares if they had Converted the
Principal Conversion Amount into Shares:
(1) immediately before the issue of Bonus
Shares; or
(2) if before the Conversion of the Principal
Conversion Amount there has been more than
one issue of Bonus Shares, immediately
before the first issue of Bonus Shares, and
had retained all the shares issued on
Conversion together with all the Bonus
Shares which would have been issued to it
under this clause 5.1 following the first
issue.
(b) Each Bonus Share issued to the Holders under this
clause ranks pari passu with the then existing
Shares. If Conversion of an ECU does not occur on or
before the Final Conversion Date the entitlement of
the Holder of that ECU to any Bonus Shares lapses.
Fractional entitlements are disregarded for the
purposes of this clause.
5.2 RECONSTRUCTION OF CAPITAL
If any reconstruction of the issued share capital of Xxxxxxxx
occurs before the Conversion Date, the entitlement of a Holder
to Shares under part 4 is reconstructed in the same proportion
and manner as the issued share capital of Xxxxxxxx is
reconstructed (subject to the same provisions with respect to
rounding of entitlements which apply to the reconstruction of
capital), but in all other respects the terms of Conversion
and the Principal Conversion Amount will remain unchanged. For
the purposes of this clause, reconstruction includes a
subdivision, consolidation or other reconstruction of shares,
into any greater or lesser number.
5.3 OFFERS TO HOLDERS OF SHARES
(a) If before a Conversion Date an offer is made
generally to the holders of Shares in Xxxxxxxx to
subscribe for Shares or other securities of Xxxxxxxx
(whether by way of renounceable or non-renounceable
rights or otherwise),
24
Xxxxxxxx must ensure that there is extended to the
Holders the same offer that they would have received
if, immediately before the date of that offer (or, if
the offer was made to shareholders of Xxxxxxxx
registered on a particular day, then immediately
before that date), they had converted all their ECUs
to Shares under clause 4.1 and had become registered
as the holder of the same number of Shares which it
would have been entitled to have allotted and issued
to it on the basis provided in clause 4.1.
(b) If before a Conversion Date Xxxxxxxx issues to the
holders of Shares securities of Xxxxxxxx on a pro
rata basis (other than under an offer to which 5.3(a)
relates), Xxxxxxxx must ensure that on a subsequent
Conversion there is issued to the Holders the same
number of the relevant securities that they would
have received if, immediately before the date of the
issue to the holders of Shares (or, if the issue was
made to shareholders of Xxxxxxxx registered on a
particular day, then immediately before that date),
they had converted all their ECUs to Shares in
Xxxxxxxx under clause 4.1 and had become registered
as the holder of the same number of Shares which it
would have been entitled to have allotted and issued
to it on the basis provided in clause 4.1.
(c) If the Holder has not exercised its Conversion right
on or before the Final Conversion Date, its
entitlement under clause 5.3(a) lapses. The
entitlement of the Holders to receive securities
under clause 5.3(b) terminates on the latest date on
which Conversion can take place under this agreement,
but without prejudice to any entitlements which may
have arisen before that date.
(d) Fractional entitlements are disregarded for the
purposes of this clause.
5.4 ECUS TO SURVIVE MERGER ETC
If:
(a) Xxxxxxxx merges with another company (THIRD PARTY);
or
(b) Xxxxxxxx enters into an arrangement (in whatever
form) under which its operations alone or with those
of another company are disposed of to a third company
(THIRD PARTY),
Xxxxxxxx must ensure it is a condition of the merger or
arrangement that the right to Convert in relation to Xxxxxxxx
is transferred to a right to Convert into common shares in the
third party at the strike price which in the reasonable
opinion of the Agent would put the Holders in the same
position after the merger or arrangement that they were in
before the merger or arrangement. Without limiting the
foregoing, for the purposes of this clause, a MERGER includes
the amalgamation or arrangement of Xxxxxxxx with another
company under the Companies Act (Quebec), the disposal by
shareholders of their shareholding in Xxxxxxxx or a disposal
by Xxxxxxxx of all or substantially all of its assets.
5.5 TAKEOVERS
(a) If Xxxxxxxx or MSV or the Holder becomes aware that
the power to control 20% or more of the issued Shares
will or may change from the ownership on the date of
this agreement, then despite any other provision
25
of this agreement, the Holder is entitled to exercise
its right of Conversion in accordance with clause 4.1
even if that Conversion would occur before the First
Conversion Date.
(b) Where a takeover or other offer is made for all the
Shares, the Holder may, by giving a notice to the
Agent, MSV and Xxxxxxxx within 21 days of the date
which the Agent after consultation with Xxxxxxxx
reasonably determines to be the date the takeover or
offer became unconditional in all material respects,
elect to advance the Final Conversion Date to a date
nominated in the notice which is within that period
of 21 days.
(c) If Xxxxxxxx or MSV becomes aware that the power to
control more than 20% of the issued Shares will, or
is likely to, change MSV must give notice of this
fact to each Holder so that each Holder has the
opportunity to Convert in accordance with part 4.
5.6 ISSUE OF SHARES UNDER STOCK INCENTIVE PLANS
Xxxxxxxx must not without the prior written consent of the
Agent issue securities of Xxxxxxxx to its officers, employees,
consultants or other service providers, but the Agent's
consent is not required for:
(a) any grant by Xxxxxxxx of incentive options under any
Stock Incentive Plan; or
(b) the issue of securities pursuant to the exercise of a
stock option under a Stock Incentive Plan granted in
accordance with clause 5.6(a).
5.7 APPROVAL OF THE EXCHANGE
Xxxxxxxx will not proceed with an issue of Bonus Shares as
contemplated in clause 5.1, a reconstruction as contemplated
in clause 5.2 or an offer to holders of Shares as contemplated
in clause 5.3 unless it has first received Exchange Approval
to permit the adjustments or issues to Holders referred to in
those clauses.
6 ASSIGNMENT
6.1 TRANSFER OF ECUS
A Holder may transfer an ECU to a related entity or to another
reputable bank or other reputable financial institution, but
will not transfer an ECU to any other person without the
consent of MSV (which consent will not be unreasonably
withheld or delayed).
6.2 ASSIGNMENT BY A TRANSACTION PARTY
A Transaction Party must not transfer or assign any of its
rights or obligations under a Transaction Document without the
prior written consent of the Agent and each Holder.
26
6.3 ASSIGNMENT BY THE AGENT
The Agent may not transfer or assign any of its rights or
obligations under this agreement without the prior written
consent of MSV, which must not be unreasonably withheld or
delayed.
6.4 PARTICIPATION PERMITTED
A Holder may grant by way of sub-participation (being a right
to share in the financial effects of this agreement without
rights against a Transaction Party) all or part of the
Holder's rights and benefits under this agreement to another
person without having to obtain the consent, or to notify, a
Transaction Party.
6.5 ADDITIONAL COSTS
The Transaction Parties will not be liable to pay any cost or
increased cost which arises as the result of a transfer of an
ECU under clause 6.1 or a sub-participation under clause 6.4.
For greater certainty, but without restricting this clause
6.5, cost or increased cost also includes any withholding tax
applicable which is greater than the applicable withholding
tax as provided in the tax treaty between Canada and Ireland
when an event described in clauses 6.1 or 6.4 occurs.
6.6 LENDING OFFICE
A Holder may change its Lending Office at any time and must
promptly notify MSV of the change.
6.7 DISCLOSURE
(a) Subject to clause 6.7(b), the Agent and each Holder
may disclose to a proposed assignee, transferee or
sub-participant information relating to a Transaction
Party or the Transaction Documents whether or not
confidential and whether or not the disclosure would
be in breach of a law or of a duty owed to a
Transaction Party.
(b) Before making a disclosure under clause 6.7(a), the
Agent or the Holder must obtain a written undertaking
from the assignee, transferee or sub-participant (as
applicable) in favour of MSV and the Agent or the
Holder (as the case may be) that it will keep
confidential all information disclosed to it.
7 REPAYMENT OF ISSUE PRICE, INTEREST AND RELATED MATTERS
7.1 REPAYMENT OF ISSUE PRICE AND INTEREST
If the Principal Conversion Amount of an ECU is not Converted
in accordance with clause 4.1 or 4.2(b) or repaid under clause
4.2(d) on or before the Final Conversion Date, the Principal
Conversion Amount for that ECU is to be repaid to the Agent
for the account of the Holders on the Final Conversion Date.
27
7.2 INTEREST
(a) The Issue Price outstanding under each ECU bears
interest from the date of payment of the Issue Price
to MSV up to (but excluding) the date the Issue Price
is Converted or repaid (as the case may be).
(b) Interest for each ECU is payable to each Holder
quarterly in arrears on each Interest Payment Date,
but MSV may, unless prevented from doing so under
clause 7.2(c), elect by notice in writing to the
Agent no later than 10 Business Days before a
particular Interest Payment Date (other than the
Final Conversion Date) not to pay interest on all
that Holder's ECUs on that Interest Payment Date, in
which event either:
(1) the Holder may elect to Convert in
accordance with clause 4.3 all of the then
outstanding Interest Conversion Amount for
its ECUs by giving to each of MSV, Xxxxxxxx
and the Agent a Conversion Notice not less
than 5 Business Days before the Interest
Payment Date; or
(2) interest will be capitalised for all that
Holder's ECUs on the relevant Interest
Payment Date, from which time the
capitalised interest will itself bear
interest.
(c) MSV may not without the written consent of the Agent
elect to capitalise interest in accordance with
clause 7.2(b) if in the opinion of the Agent any
Relevant Approval (as that term is defined in clause
4.8(a)) would be required if the Agent were to
Convert the whole of the Amount Owing on the relevant
Interest Payment Date.
(d) MSV must repay to the Agent for the account of the
Holder on the Final Conversion Date any interest
which MSV elects to capitalise and the Holder does
not elect to Convert under clause 7.2(b).
(e) Interest (including interest on capitalised
interest):
(1) accrues from day to day on the basis of a
360 day year and for the actual number of
days elapsed; and
(2) is calculated and payable at the Rate.
7.3 CALCULATION OF PER ANNUM INTEREST RATE
For the purposes of compliance with the Interest Act (Canada),
the equivalent yearly rate of interest for a 365 (or 366) day
year to any rate expressed in this agreement based on a 360
day year is equal to that 360 day rate multiplied by 365 (or
366) divided by 360.
7.4 MAXIMUM INTEREST PAYABLE
Despite any provision of this agreement, in no event will the
aggregate "interest" (as defined in section 347 of the
Criminal Code (Canada) (SECTION)) payable under this agreement
exceed the effective annual rate of interest on the "credit
advanced" (as defined in the Section) under this agreement
lawfully permitted by the Section and if any payment collected
or demanded under this agreement in respect of "interest" is
determined to be contrary to the provisions of the Section,
that payment, collection or demand is deemed to have been made
by mutual
28
mistake of MSV, RMBI and the Agent and the amount of that
payment or collection will be refunded to MSV. For the
purposes of this agreement, the effective annual rate of
interest will be determined in accordance with generally
accepted actuarial practices and principles over the relevant
term and, in the event of dispute, a certificate of a Fellow
of the Canadian Institute of Actuaries appointed by the Agent
after consultation with MSV, will be prima facie evidence of
that rate.
7.5 PAYMENT OF AMOUNTS - GENERAL
MSV must pay in full to the Agent for the account of the
Finance Parties entitled to them, on the dates provided in the
Transaction Documents, all debts and monetary liabilities of
MSV and each other Transaction Party to a Finance Party under
or in relation to a Transaction Document in any capacity. All
those unpaid debts and liabilities of MSV and each other
Transaction Party must in all events be paid before the Final
Conversion Date or on any other date on which the Amount Owing
is or is required to be repaid in full.
7.6 LATE PAYMENTS
(a) If MSV fails to pay any moneys on the due date, MSV
must on demand by the Agent or the Holder pay
interest on that overdue amount (including interest
on overdue interest) from the due date up to but
excluding the date of actual payment (after as well
as before judgment) at the aggregate of the Rate and
4.0% per annum.
(b) Interest on amounts due but unpaid accrues from day
to day and is computed on the basis of a 360 day year
and for the actual number of days elapsed.
7.7 PLACE OF PAYMENTS
(a) All amounts payable by MSV to the Agent or the Holder
under this agreement must be paid to the Holder in C$
and in Same Day Funds to the Holder's nominated
Toronto bank account (in the case of payments to a
Holder) or to an account nominated by the Agent (in
the case of payments to the Agent).
(b) To effect a payment under clause 7.7(a), MSV must no
later than 11.00 am (Toronto time) on the date on
which payment is due:
(1) instruct its bank to transfer the payment
immediately to the Toronto bank account
nominated by the Holder or the Agent under
clause 7.7(a); and
(2) provide to the Agent a copy of the
instruction to the bank referred to in
paragraph (1) by facsimile.
(c) On the Business Day immediately preceding the day MSV
intends to make a payment to the Agent or a Holder
under this agreement, MSV must give a notice to the
Agent or the Holder (in the case of a notice to RMBI,
not later than 10.00 am (Dublin time) on the date the
notice is given) stating that MSV intends to make a
payment the following Business Day and confirming the
amount of the payment.
29
7.8 TAXES
If a law requires MSV to withhold or deduct Taxes from a
payment to be made by MSV under this Agreement so that a
Finance Party would not actually receive for its own benefit
on the due date the full amount provided for under this
agreement, then:
(a) the amount payable is increased (and for greater
certainty, in the case of interest the amount of
interest is increased) so that, after making that
deduction and deductions applicable to additional
amounts payable under this clause, the Finance Party
is entitled to receive the amount it would have
received if no deductions had been required;
(b) MSV must make the deductions; and
(c) MSV must pay the full amount deducted to the relevant
authority in accordance with applicable law and
deliver the original receipts to the Agent.
7.9 RETURN OF ECU CERTIFICATES
Each ECU Certificate must be returned to MSV for cancellation
on Conversion of the ECU the subject of that ECU Certificate
or repayment of the Amount Owing in full.
8 REPRESENTATIONS AND WARRANTIES
8.1 REPRESENTATIONS AND WARRANTIES
MSV and each of the Guarantors represent and warrant to the
Agent and each Holder that:
(a) INCORPORATION: each Xxxxxxxx Group Member is duly
incorporated and validly existing under the laws of
the Province of Quebec or the federal laws of Canada
(as applicable) and has done everything necessary to
keep its corporate existence in good standing;
(b) CORPORATE POWER: each Xxxxxxxx Group Member has the
corporate power and capacity to own its assets and to
carry on its business as it is now being conducted;
(c) AUTHORITY: each Transaction Party has full capacity,
power and authority to enter into the Documents to
which it is a party and to perform its obligations
under them;
(d) CORPORATE AUTHORISATIONS: each Transaction Party has
taken all necessary action to authorise the
execution, delivery and performance of the Documents
to which it is a party in accordance with their
terms;
(e) BINDING OBLIGATIONS: the Documents to which each
Transaction Party is a party constitute its legal,
valid and binding obligations and, subject to any
necessary stamping and registration, are enforceable
in accordance with their terms;
30
(f) TRANSACTIONS PERMITTED: the execution, delivery and
performance by each Transaction Party of the
Documents to which each Transaction Party is a party
do not and will not violate any law, regulation,
authorisation, ruling, consent, judgment, order or
decree of a Governmental Agency, each Transaction
Party's Constituent Documents, or an Encumbrance or
document which is binding on each Transaction Party
or on each Transaction Party's assets;
(g) AUTHORISATIONS: any Authorisations required in
connection with the execution and performance by each
Transaction Party and the validity and the
enforceability against each Transaction Party of each
of the Documents to which a Transaction Party is a
party, and each Transaction Party's performance of
the transactions contemplated by those Documents,
have been obtained and are in fall force and effect
and there has been no material default by a
Transaction Party in the performance of any of the
terms and conditions of those Authorisations;
(h) REPORTING ISSUER: Xxxxxxxx is a reporting issuer (or
the equivalent) where applicable in good standing in
each of the provinces and territories of Canada under
the applicable Securities Laws, is not included in a
list of defaulting reporting issuers maintained by
the securities commissions (or similar regulatory
authorities) in any of the provinces and territories
of Canada and is not in default of any requirement of
the applicable Securities Laws relating to continuous
disclosure and is in compliance with the bylaws,
rules and regulations of the Exchange;
(i) NO DEFAULT OR BREACH:
(1) no Transaction Party or other Xxxxxxxx Group
Member is in breach in a material respect
under a material agreement binding on that
Transaction Party or Xxxxxxxx Group Member;
and
(2) no Transaction Party or other Xxxxxxxx Group
Member is in default in the payment of a
material sum, or in the compliance with a
material obligation in respect of Financial
Indebtedness or a Surety Obligation;
(j) NO LITIGATION: no litigation, arbitration, dispute or
administrative proceeding involving a Transaction
Party or other Xxxxxxxx Group Member has been
commenced, is pending or to any Transaction Party's
knowledge is threatened, which if adversely
determined would or may have a Material Adverse
Effect;
(k) ACCOUNTS: the most recent accounts of Xxxxxxxx and
its subsidiaries given to the Agent under this
agreement:
(1) were prepared in accordance with applicable
accounting standards; and
(2) contain all information necessary to give a
true and fair view of the financial
condition and state of affairs of Xxxxxxxx
and its subsidiaries at the date to which
they relate and the results of the
operations of Xxxxxxxx and its subsidiaries
for the accounting period to which they
relate;
31
(1) NO CHANGE IN AFFAIRS: there has been no change in the
state of affairs of Xxxxxxxx and its subsidiaries
since the end of the accounting period to which the
accounts referred to in clause 8.1(k) relate which
has or may have a Material Adverse Effect;
(m) NO DEFAULT: no event has occurred which constitutes a
Default (which has not been remedied or waived in
writing);
(n) DISCLOSURE:
(1) all information provided to the Agent by or
on behalf of each Transaction Party in
respect of the Documents, the transactions
contemplated by them, each Transaction Party
or other Xxxxxxxx Group Member and the
assets, business and affairs of each
Transaction Party and each other Xxxxxxxx
Group Member, is true and correct as at the
time it is given in all material respects
and is not, whether by omission of
information or otherwise, misleading in a
material respect;
(2) the Disclosure Documents and any other
filings made by Xxxxxxxx with any securities
commissions or regulatory authorities or the
Exchange are at their respective dates, true
and correct, contain or contained no
misrepresentation and constitute full, true
and plain disclosure of all material facts
relating to Xxxxxxxx and Xxxxxxxx does not
have any confidential filings with any
securities commissions or regulatory
authorities or the Exchange; and
(3) Xxxxxxxx has no knowledge of any material
change (actual, anticipated, contemplated or
threatened, whether financial or otherwise)
in the business, affairs, operations, assets
or liabilities (contingent or otherwise) or
capital of Xxxxxxxx or its subsidiaries,
which has not been generally disclosed and
reported to the applicable securities
commissions or regulatory authorities or the
Exchange and Xxxxxxxx does not have any
knowledge of any material adverse
information in regard to the current and
prospective operations of Xxxxxxxx or its
subsidiaries, which has not been generally
disclosed;
(o) LAWS: each Transaction Party and each other Xxxxxxxx
Group Member has complied in all material respects
with all statutes and regulations which are
applicable to that Transaction Party or other
Xxxxxxxx Group Member and the business carried on by
that Transaction Party or Xxxxxxxx Group Member,
(p) MINERAL RIGHTS:
(1) the Mineral Rights held at the date of this
agreement or when the representations and
warranties under this part 8 are repeated
under clause 8.2 are legal, valid and
continuing; and
(2) all obligations under or in respect of the
Mineral Rights have been complied with to
the extent required to date in all material
respects;
(q) AUTHORISATIONS: each Transaction Party and the other
Xxxxxxxx Group Members have obtained all necessary
Authorisations which are currently
32
necessary for the conduct of each of the Projects and
have no reason to believe that they will not in due
course obtain all further necessary Authorisations in
connection with each of the Projects;
(r) POWER TO ALLOT SHARES: the directors of Xxxxxxxx have
all necessary power and authority to issue and allot
the Allocated Shares under this agreement;
(s) SHARES IN MSV AND XXXXXX: Xxxxxxxx either directly or
through a wholly owned subsidiary owns:
(1) all the issued shares in MSV and Xxxxxx; and
(2) 76% of all the issued shares in Corporation
Copper Rand Inc.;
(t) NO ENCUMBRANCE: there is no Encumbrance over the
Project Assets other than an Encumbrance created by a
Transaction Document or a Permitted Encumbrance;
(u) 1991 TRANSACTION: no Transaction Party has any
present net Financial Indebtedness or other debt or
monetary liability, and based on legal advice
received, will not have any future net Financial
Indebtedness up to December 2006 or other debt or
monetary liability, under or in relation to the 1991
Transaction;
(v) ENVIRONMENTAL LIABILITIES: there are:
(1) no Environmental Liabilities affecting any
Xxxxxxxx Group Member or the Mining Assets
which might reasonably be expected to have a
Material Adverse Effect before 31 December
2006; and
(2) no factors affecting a Xxxxxxxx Group Member
or the Mining Assets which are likely to
give rise to any Environmental Liability
which might reasonably be expected to have a
Material Adverse Effect before 31 December
2006;
(w) ENVIRONMENTAL APPROVALS: all Environmental Approvals
required to operate or conduct any exploration,
development and production activity on or in respect
to the Mining Assets have been obtained, are in full
force and effect and all operations, exploration,
development and production activities conducted on
them are in compliance with all Environmental
Approvals, except for any Environmental Approvals
which:
(1) have been applied for but have not been
granted; or
(2) are not required having regard to the stage
of development of a Mining Asset,
and in relation to these Environmental Approvals MSV
and the Guarantors have no reason to believe they
will not be obtained in due course;
(x) MINING ASSETS: the Mining Assets and all operations,
exploration, development and production activities
conducted in respect of them are in compliance with
all Environmental Laws and the Mining Assets are in
compliance with their respective Restoration Plans
except for any non-compliance with Environmental Laws
or Restoration Plans which would not, individually or
in the aggregate, reasonably be expected to have a
Material Adverse Effect;
33
(y) NO IMMUNITY: a Transaction Party or a Xxxxxxxx Group
Member does not, nor do its assets, enjoy immunity
from suit or execution;
(z) NOT A TRUSTEE: no Transaction Party or Xxxxxxxx Group
Member is a trustee of a trust or settlement;
(aa) NO INSOLVENCY EVENT: no event has occurred which
constitutes an Insolvency Event;
(bb) COMMERCIAL BENEFIT: the entry into, and performance
by it of its obligations under, the Transaction
Documents to which it is a party is for its
commercial benefit and is in its commercial
interests;
(cc) ASSETS: it is the sole beneficial owner of all assets
included in the accounts referred to in clause 8.1(k)
free of all Encumbrances other than the Permitted
Encumbrances; and
(dd) TAXES: it has complied with all tax laws in all
applicable jurisdictions and it has paid all Taxes
due and payable by it.
8.2 SURVIVAL AND REPETITION
The representations and warranties set out in clause 8.1
survive the execution of this agreement and are repeated on
the Issue Date and on each Quarterly Date with reference to
the facts and circumstances applicable from time to time.
8.3 RELIANCE
MSV and the Guarantors acknowledge that the Agent and RMBI
have entered into the Transaction Documents in reliance on the
representations and warranties contained in clause 8.1 and the
provisions of clause 8.2.
8.4 TERM OF REPRESENTATIONS AND WARRANTIES
The representations and warranties given by MSV and the
Guarantors under clause 8.1 and repeated under clause 8.2 will
continue to be given until all ECUs subscribed for have been
Converted or the Amount Owing has been paid in full.
9 UNDERTAKINGS
9.1 PROJECT RELATED UNDERTAKINGS BY MSV AND THE GUARANTORS
MSV and each Guarantor must at all times, while the Amount
Owing remains outstanding, comply with or cause to be complied
with the following undertakings:
(a) DEVELOPMENT OF THE MINING ASSETS: it and each other
Xxxxxxxx Group Member, will ensure that the Mining
Assets are developed, operated and maintained (as
applicable) in accordance with good mining industry
practice;
(b) MAINTENANCE OF MINING ASSETS: it and each other
Xxxxxxxx Group Member, will ensure the maintenance
and protection of the Mining Assets
34
which includes, without limitation, ensuring that the
Mining Assets are kept in good condition and are free
from all material defects;
(c) NOTICE TO THE AGENT: it and each other Xxxxxxxx Group
Member, will notify the Agent as soon as reasonably
possible after it becomes aware of:
(1) any pending or threatened material dispute
in relation to any of the Mining Assets, or
any material Project Document, including
particulars of the dispute and the action
(if any) proposed to be taken in respect of
it;
(2) any default notices given or received by a
Xxxxxxxx Group Member under any Project
Document;
(3) a Force Majeure Event affecting any of the
Mining Assets or the operation or
development of a Project;
(4) a decision to depart materially from the
level of production forecast in the Project
Cashflow Model and Capital Schedule provided
to the Agent under clause 2.1(i);
(5) a proposed material change in mining or
processing methods in respect of the
development or operation of a Project;
(6) a proposed material change in the
development or operation of a Project;
(7) a change in the proposed arrangements, terms
or conditions for the sale of any Product
from a Project; and
(8) any matter which it may reasonably be
anticipated will have a Material Adverse
Effect;
(d) AUTHORISATIONS: it and each other Xxxxxxxx Group
Member, will obtain, when required having regard to
the stage of development of a Project and maintain
and observe all necessary Authorisations necessary
for:
(1) it to enter into each of the Transaction
Documents and the Project Documents;
(2) the construction, development and operation
of the relevant Project (including, without
limitation, Environmental Approvals); and
(3) the sale of any Product;
(e) INSURANCE: it must:
(1) insure all assets of an insurable nature and
keep them insured with a reputable,
responsible and solvent insurer on terms,
against risks and in an amount acceptable to
the Agent;
(2) take out and maintain accident,
consequential loss, force majeure and public
liability insurances with respect to the
Mining Assets with a reputable, responsible
and solvent insurer on terms and in amounts
acceptable to the Agent;
(3) take out, within 3 months of the date of
this agreement, and then maintain business
interruption insurance with respect to the
Mining
35
Assets with a reputable, responsible and
solvent insurer on terms and in amounts
acceptable to the Agent;
(4) ensure that each insurance policy has noted
on it the name of the Agent and each Holder
as first loss payee;
(5) duly and punctually pay all premiums,
commissions, stamp duties, charges and other
expenses necessary for keeping in force each
insurance policy;
(6) on request give to the Agent certificates of
currency in respect of all insurances and
all other details as to the insurances the
Agent requires;
(7) not do or omit anything or permit anything
to be done which may adversely affect any
insurance policy; and
(8) do all things necessary and provide all
documents, evidence and information
necessary to enable the Agent to collect or
recover money due or to become due under an
insurance policy relating to the Project
Assets, where it is entitled to do so under
this clause,
and, if a Xxxxxxxx Group Member fails to keep in
force an insurance policy with respect to the Mining
Assets or if an insurance policy from any cause
becomes void or voidable, the Agent may (but is not
obliged to) effect or keep in force that insurance
policy at the cost of that Xxxxxxxx Group Member;
(f) VARIATION, ETC OF PROJECT DOCUMENTS: it will not, and
it will ensure that each other relevant Transaction
Party will not, waive any of its material rights
under, agree to any material variation or termination
of, terminate or take any action which affects the
ability of the Agent to enforce, any Project Document
to which it is a party without the Agent's consent;
(g) PERFECTION OF SECURITY: it and each other Transaction
Party, will create, perfect and maintain in force the
Security to the greatest extent possible and will do
all other things necessary to ensure that the
Security is effective and enforceable in each
relevant jurisdiction;
(h) ENVIRONMENTAL MATTERS: it and each other Xxxxxxxx
Group Member must:
(1) comply with all Environmental Laws and
Restoration Plans with respect to each of
the Mining Assets;
(2) obtain and comply with all Environmental
Approvals required in connection with the
construction, development, operation,
exploitation and exploration of the Mining
Assets; and
(3) immediately notify the Agent of all material
claims, complaints or notices concerning
each Xxxxxxxx Group Member's compliance with
any Environmental Law, Environmental
Approval or Restoration Plan and of any fact
which would give rise to an Environmental
Liability;
(i) COMPLIANCE WITH PROJECT DOCUMENTS: it and each other
Transaction Party will comply with all of the
material obligations under each of the Project
Documents to which it is a party;
36
(j) NO DISPOSAL OF SHARES IN OTHER TRANSACTION PARTIES:
it will not, and it will ensure that each other
relevant Transaction Party will not, dispose of or
reduce its interest in another Xxxxxxxx Group Member
without the prior written consent of the Agent;
(k) SHARES AVAILABLE FOR ALLOTMENT: it will ensure that
the directors of Xxxxxxxx have all necessary power
and authority to issue and allot the Allocated Shares
under this agreement; and
(1) ENSURE COMPLIANCE BY OTHER TRANSACTION PARTIES: it
will, to the extent possible through any shareholders
rights, management control or other power or
influence it has from time to time over any other
Transaction Party, ensure that the relevant
Transaction Party complies with its obligations under
each of the Transaction Documents.
9.2 GENERAL UNDERTAKINGS BY MSV AND THE GUARANTORS
MSV and each of the Guarantors covenants that:
(a) DISPOSAL OF ASSETS: it will ensure that each Xxxxxxxx
Group Member will not:
(1) dispose of any Project Assets other than:
(A) Product; and
(B) Receivables the subject of the
Auramet Transaction;
(2) dispose of any assets which are not Project
Assets having a value in excess of
C$250,000; or
(3) dispose of any assets other than in the
ordinary course of business and at market
value,
without the prior written consent of the Agent, not
to be unreasonably withheld;
(b) FINANCIAL INDEBTEDNESS: it will ensure that the
Transaction Parties will not incur Financial
Indebtedness in excess of C$250,000 (in aggregate for
all Transaction Parties) without the prior written
consent of the Agent, except in respect of:
(1) Equipment Finance;
(2) Inter-Company Claims; and
(3) Financial Indebtedness arising under the
Auramet Transaction (if any);
(c) ENCUMBRANCES: it will ensure that each Transaction
Party will not grant:
(1) any Encumbrance over its assets (other than
Permitted Encumbrances); or
(2) any Surety Obligation in respect of money
borrowed or raised, other than:
(3) an Encumbrance or Surety Obligation in
favour of the Agent;
37
(4) the Surety Obligation given by Xxxxxxxx
under the Auramet Transaction; or
(5) an Encumbrance or Surety Obligation given
with the Agent's consent;
(d) SUBORDINATION: it will ensure that:
(1) all the Inter-Company Claims and payment
(from whatever source) of, and the rights
and claims of each Transaction Party in
respect of, all the Inter-Company Claims are
subordinated and postponed and made subject
in right of payment to all the Amount Owing
and payment (from whatever source) of, and
the rights and claims of the Finance Parties
in respect of, all the Amount Owing;
(2) until all the Amount Owing have been paid in
full:
(A) the Inter-Company Claims must not
(without the prior written consent
of the Agent) be paid or repaid;
and
(B) Transaction Party may receive, and
each Transaction Party must not pay
or repay, any of the Inter-Company
Claims to, or at the direction of,
another Transaction Party or any
person acting, or purporting to
act, on behalf of a Transaction
Party;
(3) the subordination effected by this clause
applies at all times including if and while
a Transaction Party is in liquidation;
(4) if, on liquidation of a Transaction Party,
there is a distribution of a Transaction
Party's assets including payment in cash,
property or securities, to creditors of that
Transaction Party on liquidation, all of the
Amount Owing must be paid in Ml in cash
before a payment is made for or on account
of the Inter-Company Claims;
(5) until the Amount Owing and all moneys due or
owing under the Transaction Documents have
been paid in full, until the subordination
under this clause has been terminated and
until this agreement has been fully
discharged, no Transaction Party may:
(A) make a claim or exercise a right,
power or remedy against another
Transaction Party under any
agreement, document or otherwise;
(B) accept, or ensure the grant of, or
permit any Encumbrance or Surety
Obligation from a Transaction Party
or any surety in favour of another
Transaction Party to exist; or
(C) exercise, or attempt to exercise,
any right of set-off against, nor
realise any Encumbrance from, a
Transaction Party or any surety; or
(D) raise any defence or counterclaim
in reduction or discharge of any
obligation owed by a Transaction
Party to another Transaction Party
or any surety,
but this clause does not apply, in circumstances
where no Event of Default has occurred and is
continuing, to payments or repayments by one
38
Transaction Party to another Transaction Party in the
ordinary course of the conduct of the administration
of the business of the Xxxxxxxx Group;
(e) TAXES: it will ensure that each Xxxxxxxx Group Member
will pay all relevant Taxes and outgoings payable
when due and on request give the Agent all receipts
or documents showing payment;
(f) ACCOUNTS: it will ensure that each Xxxxxxxx Group
Member will keep proper books of account;
(g) NOTICES: it will provide to the Agent:
(1) notice of Defaults of which it is aware;
(2) notice of litigation involving a potential
liability of a Xxxxxxxx Group Member of
C$250,000 or more;
(3) copies of any material notices received
under any Environmental Law in relation to a
Project or under a Project Document; and
(4) notice of any Material Adverse Change;
(h) CONDUCT OF BUSINESS: it will ensure that each
Xxxxxxxx Group Member carries on and conducts its
business in a proper and efficient manner and in
accordance with all applicable laws of each
jurisdiction in which it carries on its business;
(i) CORPORATE BUDGET: it will ensure that each Xxxxxxxx
Group Member conducts its business substantially in
accordance with the Project Cashflow Model and
Capital Schedule; and
(j) CORPORATE EXISTENCE: it will ensure that each
Xxxxxxxx Group Member maintains its corporate
existence and not permit any material alteration to
its Constituent Documents without the Agent's
consent.
9.3 REPORTING
Each of MSV and Xxxxxxxx agree to provide to the Agent for the
duration of the Facility:
(a) FINANCIAL STATEMENTS: within 120 days, or any lesser
period required under any Law, of the end of
Xxxxxxxx'x financial year, a copy of the audited
consolidated financial statements for Xxxxxxxx and
its subsidiaries for the financial year prepared in
accordance with the relevant accounting standards;
(b) MANAGEMENT ACCOUNTS: within 45 days of each Quarterly
Date, a copy of the unaudited quarterly consolidated
management accounts for Xxxxxxxx and its subsidiaries
prepared in accordance with the relevant accounting
standards, including profit and loss account,
cashflow statement and balance sheet;
(c) MONTHLY REPORTS: before the first day on the
subsequent month, on a confidential basis, a cashflow
and liquidity report setting out the month's opening
cash balances, expenditures during the month, closing
balances, forecast expenditures, cash inflows of the
Xxxxxxxx Group over the next 6 months and for the
period covered by the Project Cashflow Model and
39
Capital Schedule, a comparison of expenditure with
the Project Cashflow Model and Capital Schedule;
(d) RELEASES TO THE EXCHANGE: copies of all press
releases and all documents issued by Xxxxxxxx to the
Exchange, any securities commission or its
shareholders, at the same time as or as soon as
practicable after their issue; and
(e) OTHER INFORMATION: any other information about the
financial condition or state of affairs of a
Transaction Party or the Project as the Agent may
request.
9.4 UNDERTAKING BY XXXXXXXX IN RELATION TO SHARES, LISTING,
SECURITIES LAWS, ETC
(a) At all times before and including the Final
Conversion Date, Xxxxxxxx must reserve and allot and
conditionally issue out of its authorised capital
that number of Shares as is sufficient to enable
Xxxxxxxx to meet its obligation to issue the
Allocated Number of Shares under this agreement from
time to time. All Shares acquired under this
Agreement must be fully paid and non-assessable.
(b) Xxxxxxxx must:
(1) take all steps and actions and do all things
that may be required to maintain the listing
and posting for trading of the Shares on the
Exchange until the Final Conversion Date,
and must make application to list and
reserve for issuance any additional number
of Shares as are to be issued as a result of
a Conversion;
(2) take all steps and actions and do all things
that may be reasonably required to obtain
from the Exchange the weighted average
trading price of the Shares traded on the
Exchange for each day in a given Trading
Period and to provide this information to
the Agent;
(3) take all steps and actions to do all things
that may be required to maintain its status
as a "reporting issuer" not in default of
the requirements of the securities acts and
regulations of all provinces of Canada where
it is or may, from time to time, be a
reporting issuer,
(4) make all requisite filings, registrations
and notices, including those required to be
made with the appropriate securities
commissions and the Exchange, and Xxxxxxxx
must pay all corresponding fees;
(5) not take any action or omit to take any
action which would have the effect of
preventing a Holder from exercising its
right to convert or from receiving any of
the Shares on exercise; and
(6) promptly notify the Agent, whilst there is
an Amount Owing, full particulars of any
order of any securities regulatory authority
preventing or suspending the offering, sale
or trading of the securities of Xxxxxxxx.
(c) If, in the opinion of counsel, any instrument (not
including a prospectus) is required to be filed with,
or any permission, order or ruling is required to
40
be obtained from, any securities commission or
similar regulatory authority or any other step is
required under any federal or provincial law of a
jurisdiction in which Xxxxxxxx is a reporting issuer
or equivalent thereof, before any securities or
property which a Holder is entitled to receive under
a Conversion may properly and legally be delivered on
that Conversion, Xxxxxxxx covenants that it will use
its reasonable best efforts to file that instrument,
obtain that permission, order or ruling or take all
those other actions, at its expense, as is required
or appropriate in the circumstances, but nothing in
this clause requires Xxxxxxxx to prepare a prospectus
or a similar offering document.
9.5 POST-CLOSING REGISTRATIONS AND OTHER OBLIGATIONS
Each of MSV and the Guarantors will ensure that:
(a) before 9 November 2004, it will arrange for the
registration of the Xxxxxx Hypothec and the MSV
Hypothec at the Land Register;
(b) before 31 December 2004, it will arrange for the
registration of the Xxxxxx Hypothec and the MSV
Hypothec at the MRN Register;
(c) it will take all steps and actions to do all things
that may be required to maintain the registration of
the Xxxxxx Hypothec and the MSV Hypothec at the Land
Register and the MRN Register respectively,
(d) before 31 January 2005, it will arrange for the
registrations of the 2001 Agreement and the June 2002
Agreement under MRN Register registration numbers
50327 and 50526 respectively to be removed,
discharged or radiated or wherever else they appear
in the MRN Register in respect of the Mineral Rights
of MSV;
(e) within 3 Business Days after Xxxxxx receives
confirmation of the registration of the Xxxxxxxx
Hypothec, the MSV Hypothec and the Xxxxxx Hypothec at
the Register of personal and movable real rights,
Xxxxxx provides the addressees of the Xxxxxx Opinion
with an update or restatement of the Xxxxxx Opinion
which states that the Finance Parties' security has
been perfected and that there has been no adverse
entry at the Register of personal and movable real
rights; and
(f) within 5 Business Days after Xxxxxx Xxxxxxxx receives
confirmation of:
(1) the registration of the MSV Hypothec and the
Xxxxxx Hypothec at the MRN Register and the
Land Register; and
(2) the discharge, removal or radiation of the
2001 Agreement and the June 2002 Agreement,
or registration numbers 50327 and 50526
respectively from the MRN Register as
referred to in clause 9.5(d),
Xxxxxx Xxxxxxxx provides:
(3) the addressees of the original MSV Titles
Opinion with an update or restatement of the
MSV Titles Opinion which states that:
(A) the only registered Charge against
the Corner Bay Property (as those
terms are defined in the MSV Titles
Opinion)
41
registered at the MRN Register
(other than those in favour of a
Finance Party), is the MSV NSR; and
(B) there has been no adverse entry at
the MRN Register or the Land
Register in respect of the property
the subject of that opinion; and
(4) the addressees of the original Xxxxxx Titles
Opinion with an update or restatement of the
Xxxxxx Titles Opinion which states that
there has been no adverse entry at the MRN
Register or the Land Register in respect of
the property the subject of the Xxxxxx
Titles Opinion.
9.6 TERM OF COVENANTS
MSV and each Guarantor (as applicable) must perform and
observe the covenants in clauses 9.1, 9.2, 9.3 and 9.4 until
all ECUs subscribed for have been Converted or the Amount
Owing has been paid in full.
10 EVENTS OF DEFAULT
10.1 TERMS OF DEFAULT
It is a Default, whether or not it is within the control of a
Transaction Party, if:
(a) FAILURE TO PAY AMOUNT OWING: a Transaction Party
fails to pay interest or any other part of the Amount
Owing when due;
(b) FAILURE TO PAY OTHER AMOUNTS: a Transaction Party
fails to pay any other amounts when due under the
Transaction Documents and the failure is not remedied
within 7 Business Days from the date on which the
Agent gives MSV notice requiring the failure to be
remedied;
(c) FAILURE TO PERFORM OBLIGATIONS: a Transaction Party
fails to perform or observe any other obligation
under any of the Transaction Documents and the
failure is not remedied within 14 days from the date
on which the Agent gives MSV notice requiring the
failure to be remedied;
(d) DEFAULT UNDER PROJECT DOCUMENTS: a Transaction Party
defaults in performing any material obligation under
a Project Document and that default is not remedied
within the period specified in the Project Document,
or if no period is specified within 21 days;
(e) DEFAULT UNDER OTHER DOCUMENTS: a Xxxxxxxx Group
Member fails to perform any material obligation under
any agreement, Surety Obligation or Encumbrance with
or in favour of a person other than RMBI or the Agent
relating to money borrowed or raised, and that
failure is not remedied within 21 days;
(f) AMENDMENT TO PROJECT DOCUMENTS: there is a revocation
or material adverse variation to any of the Project
Documents and that revocation or variation is not
reinstated or reversed within 21 days;
42
(g) VARIATION TO PROJECT: a Project is not operated or
developed substantially in accordance with the
Project Cashflow Model and Capital Schedule (as
revised from time to time by the Transaction Parties
and approved by the Finance Parties) and that failure
is not remedied within 21 days;
(h) ABANDONMENT: a Project is:
(1) abandoned; or
(2) placed on a "care and maintenance" basis
after the Project construction has been
completed, without the Agent's prior written
approval;
(i) MISREPRESENTATION: any representation or warranty
made by a Transaction Party in any Transaction
Document is breached in any material respect and the
relevant circumstances (if capable of remedy) are not
remedied within the period available to the
Transaction Party under the relevant Transaction
Document, or 14 days if no period is specified;
(j) INSOLVENCY EVENT: an Insolvency Event occurs;
(k) ACCELERATION OF PAYMENTS: a Transaction Party does
anything which constitutes an event, whatever called,
which causes or enables the acceleration of a payment
to be made under a Document, or the enforcement,
termination or rescission of a Document;
(1) ENCUMBRANCE: an Encumbrance is enforceable against an
asset of a Xxxxxxxx Group Member;
(m) SURETY OBLIGATION: a Surety Obligation is enforceable
against a Xxxxxxxx Group Member;
(n) JUDGMENT: a judgment, order or execution in respect
of an amount exceeding C$250,000 or its equivalent in
another currency is made or levied, and not set aside
within 30 days, against MSV or another Xxxxxxxx Group
Member or its assets or against any asset the subject
of the Security and remains unpaid or unsatisfied
after the time for payment has expired in accordance
with the terms of the relevant process;
(o) AMENDMENT OF CONSTITUENT DOCUMENTS: a Constituent
Document of a Xxxxxxxx Group Member is amended in a
manner which is prejudicial to a Holder, without the
prior written consent of the Agent;
(p) VITIATION OF DOCUMENTS: all or part of a provision of
a Document is illegal, void, voidable, unenforceable
or otherwise of limited force or effect, or a person
becomes entitled to terminate, rescind or avoid all
or a material part or material provision of a
Document;
(q) DE-LISTING ON THE EXCHANGE: the Shares cease to be
listed for trading on the Exchange; or
(r) EXPROPRIATION OR CHANGE OF LAW: any of the following
happens:
(1) any assets of a Xxxxxxxx Group Member are
compulsorily acquired by any Governmental
Agency; or
(2) a change in any law, regulation,
Authorisation, official directive,
instrument, undertaking, obligation or any
other matter or thing
43
occurs (including a variation to a Project
Document or a restriction by a Governmental
Agency on the exportation of Product),
and, in the opinion of the Agent, the relevant matter
might reasonably be expected to have a Material
Adverse Effect.
10.2 EFFECT OF DEFAULT
(a) If a Default occurs, the Agent may:
(1) demand immediate repayment of the Amount
Owing; and
(2) cancel the Commitment.
(b) If the Agent makes demand for payment under clause
10,2(a), the Agent may exercise its rights under the
Security if payment is not made.
(c) Each Transaction Party is taken to have received
formal notice to fulfil an obligation of that
Transaction Party under the Transaction Documents by
the mere lapse of time provided for performance of
that obligation under the Transaction Documents, or
by the occurrence of the Final Conversion Date or by
any other cause provided by law.
10.3 INDEMNITY BY MSV AND THE GUARANTORS
Without prejudice to any other provisions of this agreement,
each of MSV and each of the Guarantors indemnify the Agent and
each Holder from and against any claim, loss, damage or
liability suffered by the Agent or the Holder arising from the
failure of any Transaction Party to observe, perform or comply
with any provision of a Transaction Document.
10.4 REVIEW EVENTS
(a) If there is a change in Control of Xxxxxxxx and
Control passes to a person whom a Holder considers
for any reason in its sole discretion to be
undesirable, then the Holder has the right for a
period of 60 days after the Agent receives notice of
the change of Control to review its participation
under the ECUs.
(b) If the Holder decides that it does not wish to
continue its participation under the ECUs following
the occurrence of the event referred to in clause
10.4(a), it must give notice to that effect to MSV.
The notice must state a date (not to be earlier than
90 days from the date of service of the notice) by
which the Agent requires the Amount Owing for each
ECU held by the Holder to be paid in full. MSV must
with respect to each ECU pay those amounts to the
Holder in full on the date nominated in the notice.
MSV may not Redeem any ECU under clause 4.2 at any
time after a notice has been given by a Holder under
this clause.
10.5 UNDERTAKINGS BY FINANCE PARTIES ON REALIZATION OF SECURITY
(a) Subject to clause 10.5(b), if after an Event of
Default occurs a Finance Party exercises a right to
sell Secured Property which is the subject of a
Royalty, it will sell that Secured Property subject
to the rights of the holder of that Royalty, and will
use reasonable endeavours to ensure that the
44
buyer of that Secured Property undertakes to comply
with the obligations of the relevant Transaction
Party to the holder of the relevant Royalty.
(b) Despite clause 10.5(a), this clause 10.5 does not
confer any right on any third party against the
Finance Parties, or any obligation by the Finance
Parties to any third party.
11 ILLEGALITY AND INCREASED COSTS
11.1 ILLEGALITY
If an event occurs (including, but not limited to, a change in
or the introduction, implementation, operation or taking
effect of an applicable law, regulation, order, treaty or
official directive or in the interpretation or administration
of any of them by a Governmental Agency charged with the
administration of them) which makes it unlawful, impossible or
impracticable for a Holder to maintain or give effect to its
obligations under this agreement the Holder may by notice to
MSV appoint a date (which must not be a date less than 60 days
after the date of the notice by the Holder) as the date on
which the Amount Owing with respect to that Holder must be
repaid in full.
11.2 INCREASED COST
(a) If a Holder determines that it is affected by a
change or proposed change in a law, regulation,
order, treaty, official directive or request (whether
or not having the force of law), or the
interpretation or administration of any of them by a
Governmental Agency, and that as a result (directly
or indirectly):
(1) the effective cost to the Holder of making,
funding or maintaining the Facility or
performing an obligation under or in respect
of the Transaction Documents is increased;
(2) an amount payable to the Holder or the
effective return to the Holder under the
Transaction Documents is reduced; or
(3) the Holder makes, or is required to make, a
payment or forgoes interest or other return
on or calculated by reference to:
(A) a sum received or receivable by it
from MSV under a Transaction
Document in an amount which the
Holder considers material; or
(B) any capital or other amount which
is or becomes directly or
indirectly allocated by the Holder
to its obligation to make, fund or
maintain the Facility in an amount
which that Holder considers
material; or
(4) the Holder is restricted in its capacity to
enter into, or is prevented from entering
into, any other transaction with any
consequence referred to in clause
11.2(a)(l), (2) and (3) or with any other
cost or loss of return to the Holder,
then and in each case described above:
45
(5) when it becomes aware of the relevant result
and has calculated or otherwise determined
the relevant effects, the Holder will notify
MSV of the event;
(6) on demand from time to time by the Holder
MSV must pay to the Holder the amount which
compensates the Holder for the increased
cost, reduction, payment or foregone
interest or other loss of return or
liability.
(b) If a Holder has acted in good faith it is no defence
that a cost, increased cost, reduction or liability
could have been avoided.
(c) A Holder may use any method it reasonably considers
appropriate to determine an amount payable under
clause 11.2(a) and, in the absence of manifest error,
a certificate by an Authorised Officer of the Holder
is conclusive and binding on MSV as to the amount
payable.
12 INDEMNITIES
12.1 GENERAL INDEMNITY
(a) Each Transaction Party indemnifies the Agent and each
Holder against any claim, action, damage, loss
(including currency exchange loss), liability, cost,
expense or payment which the Agent or Holder pays,
suffers, incurs or is liable for, in respect of the
following:
(1) a payment required by an ECU Notice, not
being made for any reason including, but not
limited to, a failure by a Transaction Party
to fulfil a condition precedent contained in
part 2, but excluding a default by the
Holder;
(2) a payment of interest being made on a date
other than an Interest Payment Date, or
another repayment or prepayment of all or
part of the Amount Owing being made on a
date other than the due date;
(3) a payment being made or received in a
currency other than Canadian Dollars;
(4) the occurrence of a Default or Potential
Default; or
(5) the Agent or a Holder exercising its Powers
consequent on or arising out of the
occurrence of a Default or Potential
Default.
(b) Without limitation to the indemnity contained in
clause 12.1 (a), that indemnity includes the amount
determined by the Holder as being incurred by reason
of the liquidation or re-employment of deposits or
other funds acquired or contracted for by the Holder
to fund or maintain the Issue Price and includes, but
is not limited to, loss of margin.
12.2 FOREIGN CURRENCY INDEMNITY
If at any time:
(a) the Agent or a Holder receives or recovers any amount
payable by a Transaction Party for any reason
including but not limited to:
46
(1) any judgment or order of any Governmental
Agency;
(2) any breach of any Transaction Document;
(3) the liquidation or bankruptcy of a
Transaction Party or any proof or claim in
that liquidation or bankruptcy; or
(4) any other thing into which the obligations
of a Transaction Party may have become
merged; and
(b) the Payment Currency is not in the Relevant Currency,
Each Transaction Party indemnifies the Agent and the Holder
against any shortfall between the amount payable in the
Relevant Currency and the amount actually received or
recovered by the Agent or the Holder, after the Payment
Currency is converted or translated into the Relevant Currency
under clause 12.3.
12.3 CONVERSION OF CURRENCIES
In making any currency conversion under clause 12.2, the Agent
or the Holder may itself or through its bankers purchase one
currency with another, whether or not through an intermediate
currency, whether spot or forward, in the manner and amounts
and at the times it thinks fit.
12.4 CONTINUING INDEMNITIES AND EVIDENCE OF LOSS
(a) Each indemnity of a Transaction Party contained in
this agreement is a continuing obligation of a
Transaction Party despite:
(1) a settlement of account; or
(2) the occurrence of any other thing,
and remains in full force and effect until:
(3) all money owing, contingently or otherwise,
under all Transaction Documents has been
paid in full;
(4) the Amount Owing is fully and finally
repaid; and
(5) each of the Transaction Documents has been
finally discharged.
(b) Each indemnity of a Transaction Party contained in
this agreement is an additional, separate and
independent obligation of that Transaction Party and
no one indemnity limits the generality of another
indemnity.
(c) Each indemnity of a Transaction Party contained in
this agreement survives the termination of a
Transaction Document.
(d) A certificate signed by an Authorised Officer of the
Agent or the Holder detailing the amount of damage,
loss, liability, cost, expense or payment covered by
any indemnity in this agreement is prima facie
evidence of the matter certified.
47
13 FEES, TAX, COSTS AND EXPENSES
13.1 ARRANGEMENT FEE
MSV must pay to the Agent the Arrangement Fee on the date this
agreement is entered into.
13.2 COMMITMENT FEE
MSV must pay to the Agent, as consideration for making
available the Facility, a commitment fee which is equal to 1%
per annum of the sum of Issue Prices for each ECU available
but unissued from time to time for the period from the date of
this agreement to the end of the Availability Period, payable
quarterly in arrears during the Availability Period with the
first payment due on the earlier of the date 3 months after
the date this agreement is entered into and the date all ECUs
have been issued, and the last payment due on the last day of
the Availability Period (which amount is not refundable in any
circumstances).
13.3 TAX
(a) Each Transaction Party must pay any Tax, in respect
of the execution, delivery, performance, release,
discharge, amendment, enforcement or attempted
enforcement or otherwise in respect of the following:
(1) a Transaction Document;
(2) an agreement or document entered into or
signed under a Transaction Document; and
(3) a transaction contemplated under a
Transaction Document or an agreement or
document described in clause 13.3(a)(2).
(b) Each Transaction Party must pay fines, penalties or
other costs in respect of a failure to pay a Tax
described in clause 13.3(a) except to the extent that
a fine, penalty or other cost is caused by the
Agent's failure to lodge money received from MSV
before the due date for lodgement.
(c) Each Transaction Party indemnifies the Agent and each
Holder against an amount payable under clause 13.3(a)
or 13.3(b) or both,
13.4 COSTS AND EXPENSES
Each Transaction Party must pay all costs and expenses of the
Agent and each Holder and any employee, Authorised Officer,
agent or contractor of the Agent or the Holder in relation to:
(a) the negotiation, preparation, execution, delivery,
stamping, registration, completion, variation and
discharge of a Transaction Document;
(b) the enforcement, protection or waiver, or attempted
enforcement or protection, of any rights under a
Transaction Document;
(c) the consent or approval of the Agent or a Holder
given under a Transaction Document; and
(d) any enquiry by a Governmental Agency involving any
Transaction Party,
48
including, but not limited to, reasonable
administration costs of the Agent or the Holder in
connection with the matters referred to in clause
13.4(b) and (d) and legal costs and expenses and
professional consultants' fees for any of the above
on a foil indemnity basis.
14 SAVING PROVISIONS
14.1 NO MERGER OF SECURITY
(a) Nothing in this agreement merges, extinguishes,
postpones, lessens or otherwise adversely affects any
Power, Encumbrance or indemnity in favour of the
Agent or a Holder.
(b) No other Encumbrance or Transaction Document held by
the Agent or a Holder adversely affects any Power
under this agreement.
14.2 EXCLUSION OF MORATORIUM
To the extent not excluded by law, a provision of any
legislation which at any time directly or indirectly lessens
or otherwise varies or affects in favour of a Transaction
Party, any obligations under this agreement or any Collateral
Security, or stays, postpones or otherwise prevents or
adversely affects the exercise by the Agent or a Holder of any
Power, is negatived and excluded from this agreement and any
Collateral Security and all relief and protection conferred on
a Transaction Party by or under that legislation is also
negatived and excluded.
14.3 POWERS
(a) The Powers are cumulative and do not exclude any
other right, power, authority, discretion or remedy.
(b) Where a Power is inconsistent with the rights,
powers, authorities, discretions or remedies
conferred by applicable law then, to the extent not
prohibited by that law, those conferred by applicable
law are regarded as negatived or varied to the extent
of the inconsistency.
14.4 CONSENTS
Whenever the doing of any thing by a Transaction Party is
dependent on the consent or approval of the Agent or a Holder,
the Agent or Holder may withhold its consent or approval or
give it conditionally or unconditionally in its absolute
discretion unless expressly stated otherwise in a Transaction
Document. Any conditions must be complied with by a
Transaction Party.
14.5 PRINCIPAL OBLIGATIONS
This agreement and each Collateral Security is:
(a) a principal obligation and is not ancillary or
collateral to an Encumbrance (other than another
Collateral Security) or other obligation however
created; and
49
(b) independent of, and unaffected by an Encumbrance or
other obligation however created which the Agent or a
Holder may hold at any time in respect of the Amount
Owing.
14.6 NON-AVOIDANCE
If a payment by a Transaction Party to the Agent or a Holder
is at any time avoided for any reason including, but not
limited to, a legal limitation, disability or incapacity of or
affecting a Transaction Party and whether or not:
(a) a transaction relating to the Amount Owing was
illegal, void or substantially avoided; or
(b) any thing was or ought to have been within the
knowledge of the Agent or the Holder,
each Transaction Party:
(c) as an additional, separate and independent
obligation, indemnifies the Agent and each Holder
against that avoided payment; and
(d) acknowledges that the liability of a Transaction
Party under the Transaction Documents and the rights
and remedies of the Agent and each Holder under the
Transaction Documents are the same as if that payment
had not been made.
14.7 SET-OFF AUTHORISED
If a Transaction Party does not pay any part of the Amount
Owing when due to a Holder, each Transaction Party authorises
the Holder:
(a) to apply the credit balance in any currency in any
account of a Transaction Party with a branch or
office of the Holder towards satisfaction of that
amount;
(b) in the name of a Transaction Party or of the Holder,
to do any act or thing including, but not limited to,
executing documents or effecting currency conversions
which may be required to make an application under
clause 14.7(a).
14.8 CERTIFICATES OF AGENT AND HOLDER
A certificate signed by an Authorised Officer of the Agent or
a Holder stating:
(a) the amount of the Amount Owing (whether currently due
and payable or not) or any amount due and payable by
a Transaction Party under a Transaction Document; or
(b) the opinion or determination of the Agent or the
Holder as to any thing,
is prima facie evidence of amount or that opinion or
determination (as the requires) at the date stated on the
certificate failing that as at the date of that certificate.
14.9 NO RELIANCE OR OTHER OBLIGATIONS AND XXXX ASSUMPTION
Each Transaction Party acknowledges and confirms that:
50
(a) it has not entered into a Transaction Document in
reliance on a representation, warranty, promise or
statement made by the Agent or a Holder or a person
on behalf of the Agent or the Holder;
(b) in respect of the transactions evidenced by a
Transaction Document, the Agent and each Holder has
no obligations other than those expressly set out in
the Transaction Documents; and
(c) in respect of interest rates or exchange rates, the
Agent and each Holder is not liable for:
(1) movements in interest rates or exchange
rates; or
(2) information, advice or opinions provided by
the Agent or the Holder or a person on
behalf of the Agent or the Holder, even if:
(A) provided at the request of a
Transaction Party (it being
acknowledged by each Transaction
Party that such matters are
inherently speculative);
(B) relied on by a Transaction Party,
or
(C) provided incorrectly or
negligently.
14.10 ATTORNEY
If a Default occurs and while it is continuing, the Agent,
each Holder and each of its Authorised Officers for the time
being (each with a power to appoint a substitute or
substitutes) is irrevocably appointed the attorney of a
Transaction Party to:
(a) execute and deliver all documents; and
(b) do all things (including the signing and lodging of
proofs of debt and similar claims in the bringing and
enforcing of legal proceedings, the compromise of
disputes, the enforcement of each Transaction
Document or any of them),
which, subject to the provisions of the Transaction Documents,
the attorney thinks requisite or desirable for the giving
effect to the provisions of each Transaction Document.
14.11 OPINION OF THE AGENT AND HOLDER
Where the Agent or a Holder is required or entitled under this
agreement to form or hold an opinion or view, this may be
formed or held on its behalf by a person authorised by the
Agent or the Holder to act on its behalf in relation to this
agreement or by its board of directors or by one or more
Authorised Officers of the Agent or Holder.
15 GENERAL
15.1 CONFIDENTIAL INFORMATION
The Agent and each Holder may, for the purpose only of
exercising an enforcement Power arising after a Default occurs
and while it is continuing,
51
disclose to a person documents or records of, or information
about, a Transaction Document, or the assets, business or
affairs of a Transaction Party or other Xxxxxxxx Group Member,
whether or not confidential and whether or not the disclosure
would be in breach of a law or of a duty owed to a Transaction
Party or a Xxxxxxxx Group Member.
15.2 PERFORMANCE BY THE AGENT OF OBLIGATIONS
If a Transaction Party defaults in fully and punctually
performing an obligation contained or implied in a Transaction
Document, the Agent may, without affecting a Power do all
things necessary or desirable, in the opinion of the Agent, to
make good or attempt to make good that default to the
satisfaction of the Agent.
15.3 TRANSACTION PARTIES TO BEAR COST
Any thing which must be done by a Transaction Party under a
Transaction Document, whether or not at the request of the
Agent or a Holder, must be done at the cost of the Transaction
Party.
15.4 NOTICES
Any notice or other communication including, but not limited
to, a request, demand, consent or approval, to or by a party
to a Transaction Document:
(a) must be in legible writing and in English addressed
as follows:
(1) if to the Agent:
Address: Two Xxxxxx Xxxxxx
Xxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Attention: Xxxxxxx Xxxxxxxxx
Facsimile: int+ 44 207 939 1825
with a copy to:
Address: 000 Xxxxx Xxxx., Xxxxx 000
Xxxxxxxx, Xxxxxxxx, 00000
Attention: Xxxx Xxxxxxx
Facsimile: int+ 1 303 986 5136;
(2) if to RMBI:
Address: 000 Xxxxxxxxxx Xxxx
Xxxxxx 0
Xxxxxxx
Attention: Des Brien
(3) Facsimile: int+ 35 31 670 2439;
(4) if to a Transaction Party:
Address: Xxxxxxxx Resources Inc.
0000, Xxxxxxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxxx
52
Xxxxxx X0X 0X0
Xxxxxx
Attention: Xxxxx Xxxx
Facsimile: int+ 000 000 0000,
or as specified to the sender by a party by notice;
(b) must be signed by an Authorised Officer or under the
common seal of the sender;
(c) is regarded as being given by the sender and received
by the addressee:
(1) if by delivery in person, when delivered to
the addressee;
(2) if by post, 2 Business Days (if posted
within a country) or 10 Business Days (if
posted from one country to another) as the
case may be, from and including the date of
postage; or
(3) if by facsimile transmission, whether or not
legibly received, on receipt of a
transmission report confirming successful
transmission without error or omission,
but if the delivery or receipt is on a day which is
not a Business Day or is after 4.00 pm (addressee's
time) it is regarded as received at 9.00 am
(addressee's time) on the following Business Day, and
(d) can be relied on by the addressee and the addressee
is not liable to another person for the consequences
of that reliance if the addressee believes it to be
genuine, correct and authorised by the sender.
15.5 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the laws of the
Province of Quebec, Canada and the federal laws of
Canada which apply in the Province of Quebec.
(b) Each Transaction Party and Finance Party irrevocably
and unconditionally:
(1) submits to and accepts the non-exclusive
jurisdiction of the courts of the Province
of Quebec; and
(2) in respect of any legal proceedings brought
in the Province of Quebec, waives any
objection to the venue of any legal process
on the basis that the process has been
brought in an inconvenient forum.
15.6 PROHIBITION AND ENFORCEABILITY
(a) A provision of, or the application of a provision of,
a Transaction Document or a Power which is prohibited
in a jurisdiction is, in that jurisdiction,
ineffective only to the extent of that prohibition.
(b) A provision of, or the application of a provision of,
a Transaction Document which is void, illegal or
unenforceable in a jurisdiction does not affect the
validity, legality or enforceability of that
provision in another jurisdiction or of the remaining
provisions in that or another jurisdiction.
53
15.7 WAIVER AND VARIATION
(a) Waiver of a Power arising under, or a provision of,
this agreement (including this clause) must be in
writing and signed by the party granting the waiver.
(b) A failure or delay in exercise, or partial exercise,
of a Power (arising on the occurrence of a Default or
otherwise) does not operate as a waiver of that Power
or preclude another or further exercise of that or
another Power.
(c) The variation of a term of this agreement must be in
writing and signed by the parties.
15.8 ATTORNEYS
Each of the attorneys executing this agreement states that the
attorney has no notice of the revocation of the power of
attorney appointing that attorney.
15.9 COUNTERPARTS
This agreement may be signed in any number of counterparts and
all counterparts together constitute one and the same
instrument.
15.10 LANGUAGE
The parties to this agreement have expressly required that
this agreement and all deeds, documents and notices relating
to it, be drafted in the English language. Les parties aux
presentes ont expressement exige que la presente convention et
que les autres contrats, documents ou avis, qui sont afferents
soient rediges en langue anglaise.
15.11 SUPERIOR FORCE
The obligations of MSV under any of the Transaction Documents
will not be reduced, limited or cancelled by reason of the
occurrence of an event of force majeure, MSV expressly
assuming the risk of superior force. For the purposes of this
clause 15.11, force majeure means an unforeseeable and
irresistible event including external causes with the same
characteristics.
16 PROVISIONS IN RELATION TO THE AGENT
16.1 AGENT NOT LIABLE
The Agent is not, and its directors, officers, employees are
not, liable to the Holders for:
(a) any loss or damage occurring as a result of it
exercising, failing to exercise or purporting to
exercise any Power under this agreement or in
relation to the Transaction Documents;
(b) the default, negligence or fault of any (other) agent
or attorney of the Agent whether or not the
employment or appointment of the other agent or
attorney was necessary or expedient;
54
(c) any mistake or omission made by it;
(d) any other matter or thing done, or not done, in
relation to this agreement or the other Transaction
Documents;
(e) any absence of, or defect in title or for its
inability to exercise any of its Powers under the
Transaction Documents;
(f) any failure by a Transaction Party to perform its
obligations under a Transaction Document;
(g) the financial condition or solvency of a Transaction
Party or other Xxxxxxxx Group Member;
(h) any statement, representation or warranty of a
Transaction Party being incorrect or misleading in
any respect;
(i) the value, validity, effectiveness, genuineness,
enforceability or sufficiency of any Transaction
Document or any other certificate or document given
under any of them; or
(j) the acts or omissions of the Agent or a receiver or
receiver and manager,
except to the extent that the Agent and its directors,
Authorised Officers and employees have been guilty of fraud or
wilful misconduct or gross negligence.
16.2 AGENT INDEMNITY
(a) Without prejudice to any right of indemnity given to
it by law or equity (and in addition to, and without
prejudice to, any other indemnity in part 12 or any
other Transaction Document), the Agent is entitled to
be indemnified out of any moneys from time to time
received by the Agent under the Transaction
Documents:
(1) in respect of all reasonable liabilities and
expenses (including any moneys paid or to be
paid for, or incurred as a result of, the
employment or appointment of any agent or
any receiver or receiver and manager)
incurred by any of them in the exercise of
the Powers under this agreement or in
relation to the Transaction Documents; and
(2) in respect of all reasonable actions,
proceedings, costs, claims and demands
arising in relation to this agreement or the
Transaction Documents,
to the extent that the Agent has not been guilty of
fraud or wilful misconduct or gross negligence, and
the Agent may from time to time retain and pay out of
any moneys recovered from the Transaction Documents
an amount to satisfy that indemnity.
(b) If there are no moneys available for the Agent to
satisfy its indemnity under clause 16.2(a), then each
Holder severally indemnifies the Agent against its
pro rata share (determined as at the date the
relevant amount is incurred by the Agent) of the
relevant amount, and must pay its share to the Agent
within 3 Business Days of demand.
55
16.3 QUEBEC SECURITY
For greater certainty, and without limiting the powers of the
Agent under this agreement or under any other Transaction
Document, MSV acknowledges that the Agent will, for the
purposes of holding any security granted by MSV on property
pursuant to the laws of the Province of Quebec to secure
obligations of MSV in respect of all ECUs subscribed for and
all other Secured Moneys (collectively, the OBLIGATIONS), be
the holder of an irrevocable power of attorney (within the
meaning of Article 2692 of the Civil Code of Quebec) for all
present and future Holders. The Holder irrevocably
constitutes, to the extent necessary, the Agent as the holder
of an irrevocable power of attorney (within the meaning of
Article 2692 of the Civil Code of Quebec) in order to hold
security granted by MSV in the Province of Quebec to secure
the Obligations. Each assignee of the Holder will be deemed to
have confirmed and ratified the constitution of the Agent as
the holder of the irrevocable power of attorney referred to
above, by execution of the relevant agreement of assignment by
which the assignee takes the assignment Despite the provisions
of Section 32 of the An Act respecting the special powers of
legal persons (Quebec), the Agent may acquire and be the
holder of any ECU. MSV acknowledges that each ECU constitutes
a "title of indebtedness", as that term is used in Article
2692 of the Civil Code of Quebec.
56
SCHEDULE 1 - ECU NOTICE
TO: RMB International (Dublin) Limited (RMBI)
A. This ECU Notice is given by MSV Resources Inc. (MSV) under an
ECU facility agreement (ECU AGREEMENT) dated 26 October 2004
between MSV, Xxxxxxxx Resources Inc, Xxxxxx Resources Inc.,
RMBI and RMB Resources Limited.
B. Expressions used in this ECU Notice which are defined in the
ECU Agreement bear the defined meanings.
C. MSV represents and warrants to RMBI that:
(1) as at the date of this ECU Notice, the
representations and warranties referred to in clause
8.1 of the ECU Agreement are true and correct as
though they had been made as at the date of this ECU
Notice with respect to the facts and circumstances
applicable at that time;
(2) since the end of the accounting period for the
accounts referred to in clause 2.1(g), no event has
occurred (and is continuing) which has or may have a
Material Adverse Effect; and
(3) no Default or Potential Default has occurred and is
continuing.
D. MSV irrevocably requests RMBI under clause 3.1 of the ECU
Agreement to credit the Issue Price for [INSERT NO. OF ECUS
REQUESTED] ECUs, denoted by ECU Certificate no.[s] [INSERT ECU
CERTIFICATE NO./NO.S] the subject of the ECU Agreement to the
following bank account:
[INSERT BANK ACCOUNT DETAILS]
DATED:
SIGNED for and on behalf of
MSV RESOURCES INC.
by:
------------------------
an Authorised Officer of MSV Resources Inc.
57
SCHEDULE 2 - ECU CERTIFICATE
MSV RESOURCES INC.
ECU CERTIFICATE
This is to certify that RMB International (Dublin) Limited
(RMBI) is the holder of one (1) secured exchangeable capital
unit of C$500,000 (ECU) in MSV Resources Inc. (MSV).
The ECU is created and issued under an ECU facility agreement
dated 26 October 2004 (ECU AGREEMENT) made between MSV,
Xxxxxxxx Resources Inc., Xxxxxx Resources Inc., RMBI and RMB
Resources Limited.
The ECU is issued on the terms and conditions contained in the
ECU Agreement and bears interest at the Rate specified in the
ECU Agreement.
This ECU Certificate must be returned to MSV for cancellation
on Conversion or redemption of the ECU or repayment of the
Amount Owing (as defined in the ECU Agreement) in full.
The ECU may be Converted during the Conversion Period by
completing and returning the attached notice to MSV.
The provisions of part 6 of the ECU Agreement apply to any
transfer or assignment of the ECU.
DATED:
SIGNED for and on behalf of
MSV RESOURCES INC.
by:
------------------------
an Authorised Officer of MSV Resources Inc.
58
CONVERSION NOTICE
To: The Directors
Xxxxxxxx Resources Inc.
and to: The Directors
MSV Resources Inc.
both of: 0000, Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx
Quebec X0X 0X0
Xxxxxx
NOTICE is given of the exercise by [name of Holder] of its right to Convert the
[Principal Conversion Amount and/or Interest Conversion Amount] into Shares in
accordance with clause [4.1/4.2/7.2] of the ECU facility agreement 26 October
2004 between MSV Resources Inc., Xxxxxxxx Resources Inc., Xxxxxx Resources Inc.,
RMB International (Dublin) Limited and RMB Resources Limited.
The Conversion Date applicable to the Conversion is [ ].
[The Interest Payment Date applicable to the Conversion is [ ].
The Current Market Price applicable to the Conversion is [$ ].
[The Conversion Sum applicable to the Principal Conversion Amount is [ ].]
DATED:
SIGNED for and on behalf of [HOLDER]
by
------------------------
an Authorised Officer of [HOLDER].
59
SCHEDULE 3 - REDEMPTION NOTICE
TO: RMB International (Dublin) Limited (RMBI)
FROM: MSV Resources Inc.
A. This Redemption Notice is given by MSV Resources Inc. (MSV)
under an ECU facility agreement (ECU AGREEMENT) dated 26
October 2004 between MSV, Xxxxxxxx Resources Inc, Xxxxxx
Resources Inc., RMBI and RMB Resources Limited.
B. Expressions used in this Redemption Notice which are defined
in the ECU Agreement bear the defined meanings.
C. MSV gives notice to RMBI under clause 4.2(a) that it elects to
Redeem [INSERT NO. AND DESCRIPTION OF ECUS TO BE REDEEMED]
ECU[S] by paying to the Agent:
(1) the Issue Price for each ECU; and
(2) the interest which has accrued under the terms of
this agreement on each of those ECUs,
on [INSERT A DATE THAT IS AT LEAST 20 BUSINESS DAYS FROM THE
DATE OF THIS NOTICE].
D. MSV acknowledges that this notice is irrevocable.
DATED:
SIGNED for and on behalf of
MSV RESOURCES INC.
by:
------------------------
an Authorised Officer of MSV Resources Inc.
60
SCHEDULE 4 - PERMITTED ENCUMBRANCES
(a) the Securities;
(b) any other Transaction Document which is an Encumbrance;
(c) any Encumbrance granted over Movable Plant and Equipment in
respect of Equipment Finance;
(d) any Encumbrance arising under clause 3(c) of the agreement
which sets out the Auramet Transaction; and
(e) liens or charges arising by operation of law in the ordinary
course of business in good faith including worker's or
solicitor's liens or liens in favour of any Governmental
Agency, but only for so long as there is no default in payment
of any money or performance of any obligation secured by the
relevant lien or charge, and not including any lien or charge
arising due to the failure to observe any statute or contract.
61
EXECUTED BY THE PARTIES AS AN AGREEMENT.
SIGNED for and on behalf of
MSV RESOURCES INC.
by its attorney in the
presence of:
/s/ XXXXXX XXXXXX /s/ XXXXX XXXXXXX
------------------------------------ ------------------------------------
Witness Attorney
XXXXXX XXXXXX XXXXX XXXXXXX
------------------------------------ ------------------------------------
Name (please print) Name (please print)
SIGNED for and on behalf of
XXXXXXXX RESOURCES INC.
by its attorney in the
presence of:
/s/ XXXXXX XXXXXX /s/ XXXXX XXXXXXX
------------------------------------ ------------------------------------
Witness Attorney
XXXXXX XXXXXX XXXXX XXXXXXX
------------------------------------ ------------------------------------
Name (please print) Name (please print)
SIGNED for and on behalf of
XXXXXX RESOURCES INC.
by its attorney in the
presence of:
/s/ XXXXXX XXXXXX /s/ XXXXX XXXXXXX
------------------------------------ ------------------------------------
Witness Attorney
XXXXXX XXXXXX XXXXX XXXXXXX
------------------------------------ ------------------------------------
Name (please print) Name (please print)
62
SIGNED for RMB INTERNATIONAL
(DUBLIN) LIMITED by its Authorized
Signatories:
/s/ P.V.C. XXXXX /s/ X. XXXXXXX
------------------------------------ ------------------------------------
Authorized Signatory Authorized Signatory
P.V.C. XXXXX X. XXXXXXX
------------------------------------ ------------------------------------
Name (please print) Name (please print)
SIGNED for RMB RESOURCES LIMITED
by its Authorized Signatories:
------------------------------------ ------------------------------------
Authorized Signatory Authorized Signatory
------------------------------------ ------------------------------------
Name (please print) Name (please print)
SIGNED for RMB INTERNATIONAL
(DUBLIN) LIMITED by its Authorized
Signatories:
------------------------------------ ------------------------------------
Authorized Signatory Authorized Signatory
------------------------------------ ------------------------------------
Name (please print) Name (please print)
SIGNED for RMB RESOURCES LIMITED
by its Authorized Signatories:
/s/ X.X. XXXXXXXXX /s/ XXXXXX XXXXXX
------------------------------------ ------------------------------------
Authorized Signatory Authorized Signatory
X.X. XXXXXXXXX XXXXXX XXXXXX
------------------------------------ ------------------------------------
Name (please print) Name (please print)
