EXHIBIT 99.1
JIPANGU SHARE PLEDGE AGREEMENT
This Share Pledge Agreement (the "Agreement") dated for reference as of December
7, 2001 is made by Jipangu Inc., a corporation organized and existing under the
laws of Japan ("Jipangu") and Sprott Securities Inc. ("Lender").
RECITALS
WHEREAS:
A. Jipangu is the beneficial owner of 17,361,112 common shares (the "Shares")
of Cambior Inc. ("Cambior").
B. Pursuant to a debenture issued by Jipangu to Lender dated December 7, 2001
(the "Debenture"), Jipangu has incurred or is about to incur indebtedness or
other obligations with Lender.
C. As continuing collateral security for the payment and fulfilment of all
debts, liabilities and obligations of Jipangu to Lender arising in connection
with the Debenture, Jipangu has agreed to pledge the Shares to Lender, together
with all right, title and interest of Jipangu therein and all benefit of Jipangu
to be derived therefrom.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
make the following representations, warranties, agreements and covenants;
ARTICLE 1
INTERPRETATION
1.1 Definitions. Unless inconsistent with the context hereof, capitalized terms
herein are defined terms and shall have the meanings ascribed to such terms in
the Debenture.
1.2 Headings and References. Section and article headings are not to be part of
this Agreement and are included solely for convenience of reference. References
herein to Sections, Articles, paragraphs and Schedules are references to
Sections, Articles, paragraphs and Schedules of this Agreement. The terms "this
Agreement", "hereof", "herein", "hereunder" and similar expressions refer to
this Agreement, as the same may be amended, modified, supplemented or restated
from time to time, and unless provided to the contrary, shall not be construed
as a reference to any individual article, section or subsection.
ARTICLE 2
GRANT OF COLLATERAL
2.1 Grant of Security. Jipangu hereby deposits with, assigns, pledges and
hypothecates to Lender and grants to Lender a first security interest in the
Shares, and the proceeds thereof, as general and continuing collateral security
for the payment of all present and future obligations, indebtedness and
liability of Jipangu to Lender, direct or indirect, absolute or contingent, and
any ultimate unpaid balance thereof, including interest thereon and all costs,
charges and expenses incurred in connection therewith (the "Indebtedness"),
notwithstanding any change in the nature or form of the Indebtedness or in the
accounts or terms of payment of the Indebtedness.
2.2 Delivery of Share Certificates et al.
(a) In accordance with the pledge and assignment of the Shares hereunder,
Jipangu shall deliver, or cause to be delivered, to Lender
contemporaneously with execution and delivery of this Agreement, the
following in respect of the Shares:
(i) certificates representing the Shares, duly registered in the name
of Jipangu and endorsed in blank for transfer; and
(ii) an irrevocable stock transfer power of attorney in the form
annexed hereto as Exhibit 1, duly executed by Jipangu in respect
of the Shares.
2.2 Security Purposes of Pledge. It is expressly agreed by the parties that the
assignment, pledge and hypothecation of the Shares provided herein are intended
solely for security purposes. Unless and until there shall have occurred an
Event of Default, all dividends and other distributions on the Shares shall
accrue and be payable to the benefit of Jipangu, subject to any restrictions
contained in the Debenture. If after the occurrence of an Event of Default, any
such permitted dividend or distribution is not properly payable to Jipangu
pursuant to this agreement but is nonetheless paid to and received by Jipangu,
the same shall be remitted by Jipangu to Lender in payment of the Indebtedness
in such order as Lender may deem fit and any excess so received after the
payment in full of the Indebtedness shall be paid over to Jipangu or as
otherwise required by law.
ARTICLE 3
DEALING WITH THE SHARES BEFORE DEFAULT
3.1 Voting. Unless and until there shall have occurred an Event of Default (as
that term is defined in section 4.1 hereof), or an event which, with the giving
of notice or lapse of time or both would constitute an Event of Default, Lender
hereby permits Jipangu to vote, the Shares, provided that in no event shall
Jipangu authorize or vote in support of any resolution to authorize the issuance
of any Shares which are not subject to this Agreement or in favour of any other
action which would violate the Debenture.
ARTICLE 4
DEALING WITH THE SHARES AFTER DEFAULT
4.1 Events of Default. The occurrence of any of the following events or
conditions, unless waived in writing by Lender, shall constitute an "Event of
Default" under this Agreement:
(a) the non-payment when due, whether by acceleration or otherwise, of any
principal or interest forming part of the Indebtedness or the failure
of Jipangu to observe or perform any obligation, covenant, term,
provision or condition contained in this Agreement, the Debenture or
any other agreement between Jipangu and Lender;
(b) the bankruptcy or insolvency of Jipangu; the filing against either of
Jipangu of a petition in bankruptcy; the making of an authorized
assignment for the benefit of creditors by Jipangu; the appointment of
a receiver or trustee for any assets of Jipangu or the institution by
or against Jipangu of any other type of insolvency proceeding under
the Bankruptcy and Insolvency Act, the Companies' Creditors
Arrangement Act or otherwise;
(c) the institution by or against Jipangu of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims
against or winding up of affairs of Jipangu;
(d) if any security interest affecting the Shares, whether or not
postponed to this Agreement, becomes enforceable;
(e) if Jipangu ceases or threatens to cease to carry on business or makes
or agrees to make a bulk sale of assets without complying with
applicable law or commits or threatens to commit an act of bankruptcy;
(f) if any certificate, statement, representation, warranty or audit
report heretofore or hereafter furnished by or on behalf of Jipangu
pursuant to or in connection with this Agreement or the Debenture or
otherwise (including, without limitation, the representations and
warranties contained herein) or as an inducement to Lender to extend
any credit to or to enter into this or any other agreement with
Jipangu, proves to have been false in any material respect at the time
as of which the facts therein set forth were stated or certified, or
proves to have omitted any substantial contingent or unliquidated
liability or claim against Jipangu; or if upon the date of execution
of this Agreement, there shall have been any material adverse change
in any of the facts disclosed by
any such certificate, representation, statement, warranty or audit
report, which change shall not have been disclosed to Lender at or
prior to the time of such execution; or
(g) Jipangu pledges or grants a security interest or purports to pledge or
grant a security interest in the Shares, which pledge or security
interest ranks or is purported to rank in priority to or pari passu
with the security interest in the Shares created by this Agreement.
4.2 Declaration of Default. Upon the occurrence of an Event of Default, Lender
may, in addition to any other remedy available to it, declare this Agreement to
be in default.
4.3 Registration and Voting of Shares After Default. Upon the occurrence of an
Event of Default, Lender may, following or contemporaneously with formal
declaration and notice of default under Section 4.2 (but not before), have and
exercise, through its nominee or otherwise any and all voting powers with
respect to the Shares and Lender shall be entitled to receive all dividends and
distributions thereafter paid on the Shares. Lender is hereby appointed,
effective upon the declaration by Lender of an Event of Default, the irrevocable
attorney of Jipangu with full power of substitution from time to time to endorse
and/or transfer the Shares or any of them to Lender or its nominee and,
contemporaneously with formal declaration of default as aforesaid, Lender and
its nominee are hereby empowered to exercise all rights and powers and to
perform all acts of ownership in respect of the Shares, to the same extent as
Jipangu might do. This power of attorney, being coupled with an interest, shall
survive notwithstanding any incapacity of Jipangu or its dissolution or
insolvency.
4.4 Remedies on Default. Following formal declaration by Lender under Section
4.2 and until payment in full of the Indebtedness, Lender shall have, without
obligation to resort to other security or to recourse against any guarantor or
other party liable and without prejudice to any other right or remedy of Lender,
the right at any time and from time to time to:
(a) sell, resell, assign and deliver all or any of the Shares in Canada or
elsewhere, in one or more parcels, at the same or different times, and
all right, title, interest, claim and demand therein and right of
redemption thereof, at public or private sale, for cash, upon credit
or for immediate or future delivery, and at such price or prices and
on such terms as Lender may determine, Jipangu hereby agreeing that
upon any such sale any and all equity and right of redemption shall be
automatically waived and released without any further action on the
part of Jipangu, and in connection therewith Lender may grant options,
all without any demand, advertisement or notice, all of which are
hereby expressly waived by Jipangu;
(b) retain the Shares or any parcel of same as continuing collateral
security as provided herein; or
(c) in its own right, purchase all or any of the Shares being sold, free
of any equity or right of redemption.
In the event of a sale of the Shares pursuant to Subsections 4.4(a) or 4.4(c),
the proceeds of each such sale shall be applied first to the payment of all
costs and expenses of every kind for sale or delivery, including reasonable
agents' fees or legal fees and expenses of Lender on a full indemnity basis and
after deducting such costs and expenses from the proceeds of the sale, any
residue shall be applied in payment of the Indebtedness in such order as Lender
may deem fit, with Jipangu remaining liable for any deficiency. The balance, if
any, remaining after payment in full of the Indebtedness shall be paid over to
Jipangu or to whomever else may be entitled thereto by law. Notwithstanding the
foregoing provisions of this Section 4.4, Lender shall not in any event be under
any duty to do any of the foregoing and Lender may assume that any Event of
Default which may have occurred is continuing until the cure thereof has been
demonstrated to its reasonable satisfaction. Jipangu hereby ratifies all that
Lender or its nominee, as the case may be, shall do by virtue of the foregoing
authority.
4.5 Remedies Cumulative; Indemnity, etc. The rights, powers and remedies of
Lender hereunder shall not be deemed exclusive, but shall be cumulative with and
in addition to all other rights and remedies existing at law or in equity,
including, without limitation, all of the rights, powers and remedies available
to Lender under any other agreement between the parties or instrument
contemplated thereby or delivered in support thereof and/or available to a
secured creditor under the personal property security law or other law affecting
creditor's rights. Jipangu shall indemnify and save harmless Lender from and
against any and all liabilities, losses and damages which it may incur in the
lawful and proper exercise or performance of any of its rights or powers as
authorized hereunder.
4.6 Waivers and Other Agreements. Lender is hereby authorized by Jipangu,
without any liability on its part, in its sole discretion and without notice to
or demand upon Jipangu and without otherwise affecting Jipangu's obligations
hereunder, from time to time to take and hold other collateral (in addition to
or other than the Shares) for the payment of the Indebtedness or any part
thereof, and to exchange, enforce, release or fail to perfect such other
collateral or any part thereof and to accept and hold any endorsement or
guarantee of payment of the Indebtedness or any part thereof and to release or
substitute any endorser, guarantor, primary obligant, debtor, or any other
person granting security for, or in any other way obligated in respect of the
Indebtedness or any part thereof. Lender may grant extensions of time or other
indulgences, take and give up securities, accept compositions, grant releases
and discharges and otherwise deal with Jipangu and other parties, sureties,
guarantors or securities as Lender may see fit without prejudice to the
liability of Jipangu or the rights of Lender in respect of the Shares.
4.7 Termination of Pledge. This Agreement and the security interests created
hereby will terminate upon repayment of all amounts owing under the Debenture
and fulfilment of the Obligations in accordance with the terms and provisions of
the Debenture, and upon such termination, Lender shall return the Shares and all
certificates for the Shares and any stock powers of attorney delivered therewith
to Jipangu and Lender shall provide to Jipangu such releases and reassignments
in respect of the foregoing and the security interests created hereby as Jipangu
may reasonably request, at Jipangu's expense.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF JIPANGU
5.1 Representations, Warranties and Covenants of Jipangu. Jipangu represents,
warrants and covenants to and in favour of Lender that:
(a) the Shares are duly and validly issued, fully paid and non-assessable
and have been duly and validly pledged hereunder in accordance with
law, and Jipangu warrants and covenants to defend Lender's right,
security interest and special property in and to the Shares against
the claims and demands of all persons whomsoever;
(b) that all corporate action necessary to transfer the Shares on the
books of Cambior upon the occurrence of an Event of Default has been
taken and in particular, all directors' and shareholders' consents and
resolutions required in this regard have been obtained; and
(c) Jipangu is the exclusive legal and beneficial owner of, and has good
title to, all of the Shares free and clear of all claims, liens,
security interests and other encumbrances (except any other security
in favour of Lender), and Jipangu has the unfettered legal right to
pledge and assign the Shares in accordance with the terms and
conditions hereof.
All of the foregoing representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and shall be deemed
to be continuously made hereunder so long as any of the Indebtedness remains
outstanding.
ARTICLE 6
GENERAL
6.1 Additional Security. The security in respect of the Shares provided for
hereunder is in addition to and not in substitution for any other security now
or hereafter held by Lender in relation to the Indebtedness.
6.2 Further Assurances; Immunities, etc. Jipangu agrees to do, file, record,
make, execute and deliver all such acts, deeds, things, notices,
acknowledgements and instruments as may be necessary or desirable in the opinion
of Lender, acting reasonably, to vest more fully in and assure to Lender the
security interests in the Shares created hereby or intended to be so created,
and the enforcement and full realization of the rights, remedies and powers of
Lender hereunder relating to the Shares. Without limitation, if at any time
hereafter, whether or not due to any change in circumstances (including, without
limitation, any change in applicable law), it is, in the opinion of counsel for
Lender, necessary or desirable to file or record this Agreement or any financing
statement or other instrument
relating hereto, Jipangu agrees to pay all fees, costs and expenses of such
recording or filing and to execute and deliver any instruments which may be
necessary or appropriate to make such filing or recording effective. Jipangu
hereby irrevocably appoints Lender as its irrevocable attorney-in-fact to
perform, in the name of Jipangu as applicable, or otherwise, any and all acts,
including, without limitation, the signing and filing of financing statements
and amendments thereto, which Lender may deem necessary or appropriate to effect
and continue perfection of the security interests created hereby or intended so
to be or otherwise to preserve and protect the Shares and the security interests
of Lender hereunder, but nothing herein or otherwise shall require Lender to
take any such action. This power of attorney, being coupled with an interest,
shall survive notwithstanding any incapacity of Jipangu or its dissolution or
insolvency. The duty of Lender with respect to the Shares shall be confined to
one of reasonable care in the custody thereof so long as the Shares are in the
custody of Lender. Without limitation, and except as specifically provided for
in this Agreement, Lender shall have no duty to send any notices, perform any
services, vote, pay, exercise any options or make any elections with respect to,
or pay any taxes or charges associated with, or otherwise take any other action
of any kind with respect to the Shares. In addition, Lender shall not have any
obligation to take any steps, and Jipangu shall in each case duly take all
steps, necessary to perfect and otherwise preserve against all other parties
(including without limitation other shareholders) the rights of Jipangu and
those of Lender in the Shares and each and every one thereof.
6.3 Expenses. Jipangu will pay all costs of filing any financing, continuation
or termination statements with respect to the Shares or the security interests
hereunder deemed by Lender to be necessary or advisable in order to perfect or
protect the liens and security interests hereby created or intended so to be and
to release the same upon full discharge of all of the Indebtedness. Jipangu
agrees that the Shares secure, in addition to the Indebtedness, and agrees to
pay on demand, all reasonable expenses on a full indemnity basis (including but
not limited to reasonable agents' fees and legal fees and expenses), of, or
incidental to, the custody, care, sale or realization of the Shares or any of
them or in any way relating to the preparation, execution, delivery of this
Agreement or the enforcement or protection of the rights of Lender hereunder.
6.4 Form of Shares. The certificates representing any Shares pledged hereunder
shall be free from all restrictive or cautionary legends or other restrictions
and shall otherwise be in form for good delivery.
6.5 No Merger. The pledging of the Shares and exercise of any rights of Lender
hereunder shall not operate by way of merger of the Indebtedness or any
indebtedness or liability of any other person or persons to Lender and no
judgment recovered by Lender shall operate by way of merger of or in any way
affect the security of such Shares provided for hereunder.
6.6 No Waiver. No failure or delay on the part of Lender in exercising any of
its options, powers and rights, and no partial or single exercise thereof, shall
constitute a waiver thereof or of any other option, power or right.
6.7 No Responsibility for Loss. Lender is hereby released from all
responsibility for any depreciation in or loss of value of the Shares.
6.8 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein and shall be treated in all respects as an Ontario
contract. The parties irrevocably attorn to the non-exclusive jurisdiction of
the Courts of Ontario.
6.9 Notices. Any notice, request, demand, direction, declaration or other
instrument Or communication required or permitted to be given under the
provisions of this Agreement shall be given by hand delivered or electronic
facsimile transmission:
(a) in the case of Jipangu, to:
c/o Suite 1700, 000 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxx Xxxxxx
Facsimile: (000) 000-0000
(b) in the case of Lender,
c/o Sprott Securities Inc.
Suite 3450
Royal Bank Plaza, South Tower
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxx Xxxxxxx
Facsimile Number: (000) 000-0000
Any such notice, request, demand, direction, declaration or other instrument of
communication shall be deemed to have been received on the date of delivery, if
hand delivered before 5:00 p.m. on a business day and, on the date of
transmission if received on the electronic facsimile machine of the addressee
before 5:00 p.m. on a business day. If received after 5:00 p.m. on a business
day, or if received on a day which is not a business day, receipt shall be
deemed to have occurred on the next following business day. "Business day" as
used in this Section 6.9 means a day which is not a Saturday, Sunday, or
statutory holiday at the place of business of the addressee or recipient of the
communication. By notice in writing delivered or transmitted as foresaid, either
party may change its address or fax number for subsequent communications.
6.10 Entire Agreement. Save as may be set out in any agreement between Jipangu
and Lender which expressly states that such agreement's term and conditions are
paramount to this Agreement (the "Paramount Agreement"), and any other security
agreements and instruments contemplated by the Paramount Agreement, this
Agreement constitutes the entire agreement between the parties hereto pertaining
to the subject matter hereof and supersedes all prior and contemporaneous
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein. No amendment, supplement, modification,
waiver or termination of this Agreement shall be binding unless executed in
writing by the party or parties to be bound thereby.
6.11 Enurement. This Agreement shall be binding upon and enure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted. assigns. Before occurrence of an event of default, without the prior
written consent of Jipangu, Lender shall not transfer or assign the Shares or
any interest therein, or deliver the certificates for the Shares save pursuant
to an assignment of all of the Indebtedness of which notice has been given to
Jipangu.
6.12 Severability. Any provisions of this Agreement which are prohibited or
unenforceable in any applicable jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
affecting the validity or enforceability of such provision in any other
jurisdiction, or the validity or enforceability of any other provision of this
Agreement.
IN WITNESS WHEREOF Jipangu has executed this Agreement as of the date first
above written.
JIPANGU INC.
by its authorized signatory
Per: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title Director
EXHIBIT 1
IRREVOCABLE STOCK POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that JIPANGU INC. hereby transfers unto
, common shares in the capital
stock of CAMBIOR INC.. standing in its name on the books of the said company
represented by certificate No. , and does hereby irrevocably constitute
and appoint Sprott Securities Inc., its true and lawful attorney, and in its
name and stead, to transfer and make over all or any part of the aid stock, and
for that purpose to make and execute all necessary acts of assignment and
transfer thereof, and to substitute one or more persons with like power, hereby
ratifying and confirming all that its said attorney or its substitute or
substitutes shall lawfully do by virtue thereof.
DATED this day of , 20 .
JIPANGU INC.
by its authorized signatory
Per: "Xxxxx Xxxxxx"
Name: Xxxxx Xxxxxx
Title: Director