EXHIBIT 99.3
___________________________________________________
WARRANT INDENTURE
Made as of August 27, 2003
Between
CRYSTALLEX INTERNATIONAL CORPORATION
and
CIBC MELLON TRUST COMPANY
___________________________________________________
XXXXXXXXX XXXXX LLP
_______________
TABLE OF CONTENTS
RECITALS..........................................................................................................1
SECTION 1 - INTERPRETATION........................................................................................1
1.1 Definitions...................................................................................1
1.2 Words Importing the Singular..................................................................3
1.3 Interpretation Not Affected by Headings, Etc..................................................3
1.4 Day Not a Business Day........................................................................3
1.5 Time of the Essence...........................................................................3
1.6 Currency......................................................................................3
1.7 Applicable Law................................................................................3
1.8 Generally Accepted Accounting Principles......................................................4
SECTION 2 - THE WARRANTS..........................................................................................4
2.1 Creation and Authorization of Warrants........................................................4
2.2 Terms of Warrants.............................................................................4
2.3 Form of Warrant Certificates..................................................................4
2.4 Signing of Warrant Certificates...............................................................5
2.5 Certification by Warrant Agent................................................................5
2.6 Warrants to Rank Pari Passu...................................................................5
2.7 Issue in Substitution for Lost Certificates, Etc..............................................5
2.8 Cancellation of Surrendered Warrants..........................................................6
2.9 Warrantholder not a Shareholder...............................................................6
SECTION 3 - REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP OF WARRANTS............................................6
3.1 Registration and Transfer of Warrants.........................................................6
3.2 Exchange of Warrant Certificates..............................................................7
3.3 No Charges for Transfer or Exchange...........................................................7
3.4 Ownership of Warrants.........................................................................8
3.5 Assumption by Transferee......................................................................8
SECTION 4 - EXERCISE OF WARRANTS..................................................................................8
4.1 Exercise......................................................................................8
4.2 Effect of Exercise............................................................................9
4.3 No Fractional Common Shares...................................................................9
4.4 Recording....................................................................................10
4.5 Securities Restrictions......................................................................10
SECTION 5 - ADJUSTMENTS..........................................................................................10
5.1 Definitions..................................................................................10
5.2 Adjustment of Exchange Rate..................................................................10
5.3 Adjustment of Exercise Price.................................................................12
5.4 Adjustment Rules.............................................................................14
SECTION 6 - COVENANTS............................................................................................16
6.1 General Covenants............................................................................16
6.2 Reservation of Shares........................................................................17
6.3 Redemption at the Option of the Warrantholder................................................18
6.4 Redemptions..................................................................................19
6.5 Warrant Agent's Remuneration and Expenses....................................................20
6.6 Performance of Covenants by Warrant Agent....................................................20
SECTION 7 - ENFORCEMENT..........................................................................................21
7.1 Warrantholders May Not Xxx...................................................................21
7.2 Warrant Agent May Institute All Proceedings..................................................21
7.3 Immunity of Shareholders, etc................................................................21
7.4 Limitation of Liability......................................................................21
SECTION 8 - MEETINGS OF WARRANTHOLDERS...........................................................................22
8.1 Right to Convene Meetings....................................................................22
8.2 Notice.......................................................................................22
8.3 Chairman.....................................................................................22
8.4 Quorum.......................................................................................22
8.5 Power to Adjourn.............................................................................22
8.6 Show of Hands................................................................................23
8.7 Poll.........................................................................................23
8.8 Voting.......................................................................................23
8.9 Regulations..................................................................................23
8.10 Crystallex and Warrant Agent may be Represented..............................................23
8.11 Powers Exercisable by Extraordinary Resolution...............................................24
8.12 Meaning of "Extraordinary Resolution"........................................................24
8.13 Powers Cumulative............................................................................25
8.14 Minutes......................................................................................25
8.15 Instruments in Writing.......................................................................25
8.16 Binding Effect of Resolutions................................................................25
8.17 Holdings by Crystallex and Subsidiaries Disregarded..........................................26
SECTION 9 - SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS...................................................26
9.1 Provision for Supplemental Indentures for Certain Purposes...................................26
9.2 Successor Corporations.......................................................................26
SECTION 10 - CONCERNING THE WARRANT AGENT........................................................................27
10.1 Trust Indenture Legislation..................................................................27
10.2 Rights and Duties of Warrant Agent...........................................................27
10.3 Evidence, Experts and Advisers...............................................................27
10.4 Documents, Money, Etc. held by Warrant Aunt..................................................28
10.5 Action by Warrant Agent to Protect Interests.................................................29
10.6 Warrant Agent not Required to Give Security..................................................29
10.7 Protection of Warrant Agent..................................................................29
10.8 Replacement of Warrant Agent.................................................................30
10.9 Conflict of Interest.........................................................................30
10.10 Acceptance of Trusts.........................................................................31
SECTION 11 - GENERAL.............................................................................................31
11.1 Notice to Crystallex and Warrant Agent.......................................................31
11.2 Notice to Warrantholders.....................................................................32
11.3 Satisfaction and Discharge of Indenture......................................................32
11.4 Sole Benefit of Parties and Warrantholders...................................................33
11.5 Consent to Jurisdiction and Service of Process...............................................33
11.6 Conversion of Currency.......................................................................33
11.7 Discretion of Directors......................................................................34
11.8 Counterparts and Formal Date.................................................................34
Schedule A to a Warrant Indenture dated as of August 27, 2003
Schedule B NOTICE OF EXERCISE
Schedule C FORM OF TRANSFER
(ii)
This Indenture is made as of August 27, 2003, between
CRYSTALLEX INTERNATIONAL CORPORATION, a
corporation incorporated under the laws of Canada ("CRYSTALLEX")
and
CIBC MELLON TRUST COMPANY, a trust company
incorporated under the laws of Canada (the "WARRANT AGENT")
RECITALS
A. Crystallex is duly authorized to create and issue the Warrants as herein
provided and complete the transactions contemplated herein.
B. All things necessary have been done and performed to make the Warrant
Certificates, when certified by the Warrant Agent and issued and delivered as
herein provided, legal, valid and binding on Crystallex with the benefits of and
subject to the terms of this Indenture.
C. The Warrant Agent has agreed to enter into this Indenture and to hold all
rights, interests and benefits contained herein for and on behalf of those
persons who from time to time become holders of Warrants issued pursuant to this
Indenture.
NOW THEREFORE THIS INDENTURE WITNESSES that for good and valuable
consideration mutually given, the receipt and sufficiency of which are, by each
of Crystallex and the Warrant Agent, hereby acknowledged, Crystallex hereby
appoints the Warrant Agent as trustee for the Warrantholders, to hold all
rights, interests and benefits contained herein for and on behalf of those
persons who from time to time become holders of Warrants issued pursuant to this
Indenture, and the parties hereby covenant, agree and declare as follows:
SECTION 1 - INTERPRETATION
1.1 DEFINITIONS
In this Indenture, unless there is something in the subject matter or
context inconsistent therewith:
(1) AFFILIATE shall have the meaning ascribed to such term in the Canada
Business Corporations Act.
(2) AMEX means the American Stock Exchange, Inc.
(3) APPLICABLE LEGISLATION means such provisions of any statute of Canada or of
a province thereof, and of regulations under any such statute, relating to trust
indentures or to the rights, duties and obligations of corporations and of
warrant trustees under trust indentures, as are from time to time in force and
applicable to this Indenture.
(4) BLOOMBERG means the information provider network operated by Bloomberg L.P.
or; any substitute therefor.
(5) BUSINESS DAY means any day that is not a Saturday, Sunday or statutory
holiday in Toronto, Ontario, Vancouver, British Columbia or the State of News
York or a day when the principal office of the Warrant Agent in any such city or
State is not generally open to the public for the transaction of business.
(6) COMMON SHARES means the common shares in the capital of Crystallex, provided
that in the event of any adjustment pursuant to section 5, Common Shares will
thereafter mean the shares or other securities or property resulting from such
adjustment.
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(7) CONVERTIBLE NOTES means the convertible notes of Crystallex created under,
and governed by, the terms of the Note Indenture, and convertible into Common
Shares upon the terms and conditions of the Note Indenture.
(8) COUNSEL means a barrister or solicitor or a firm of barristers and
solicitors (who may be counsel for Crystallex) acceptable to the Warrant Agent.
(9) CRYSTALLEX means the party of the first part hereunder and includes any
successor corporation to or of such party which shall have complied with the
provisions of subsection 9.2.
(10) CRYSTALLEX'S AUDITORS means Deloitte & Touche, the firm of chartered
accountants duly appointed as auditors of Crystallex for the time being.
(11) CURRENT MARKET PRICE at any date means the average of the volume weighted
average sale prices per share for Common Shares for the ten consecutive trading
days immediately preceding such date on the AMEX, as reported on Bloomberg, or
if the Common Shares are not listed thereon, on such other stock exchange on
which the shares are listed which has the greatest volume of trading or on which
it trades or, if the Common Shares are not listed on any stock exchange, then on
the over-the-counter market on which it trades which has the greatest volume of
trading; and for the purpose of this definition the volume weighted average
price shall be determined by dividing the aggregate sale price of all Common
Shares sold during such period of ten consecutive trading days on such exchanges
or markets, as the case may be, by the total number of Common Shares so sold
during such period.
(12) DIRECTOR means a director of Crystallex for the time being, and reference
without more to action by the directors means action by the directors of
Crystallex as a board or, to the extent empowered, by a committee of the board,
in each case by resolution duly passed.
(13) EFFECTIVE DATE means the date hereof.
(14) EXERCISE DATE means, with respect to any Warrant exercised by the holder
thereof, the day on which the Warrant is exercised in accordance with the
provisions of subsection 4.1.
(15) EXERCISE PRICE means 140% of the Current Market Price of the Common Shares
as at the Issue Date as such price shall have been adjusted under section 5.
(16) EXPIRY TIME means 5:00 p.m. (Vancouver time) on the second anniversary of
the Issue Date.
(17) EXTRAORDINARY RESOLUTION has the meaning attributed thereto in subsections
8.12 and 8.15.
(18) ISSUE DATE means the dates upon which warrants are originally issued
hereunder from time to time, each such date being an "Issue Date".
(19) INVESTOR has the meaning set forth in the Subscription Agreement.
(20) NOTE INDENTURE means the agreement dated the date hereof between Crystallex
and CIBC Mellon Trust Company under which the Convertible Notes are created and
governed.
(21) PERSON means an individual, corporation, partnership, trustee or
unincorporated organization, and words importing persons have a similar extended
meaning.
(22) REGISTRATION STATEMENT means the resale registration statement to be filed
by Crystallex with the SEC qualifying the resale of the Common Shares issuable
upon exercise of the Warrants, and includes amendments thereto.
(23) SEC means the Securities and Exchange Commission of the United States.
(24) SUBSCRIPTION AGREEMENT means the agreement dated August 27, 2003 between
Crystallex and each Investor providing for, among other things, the sale of the
Warrants by Crystallex.
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(25) THIS WARRANT INDENTURE, THIS INDENTURE, HERETO, HEREUNDER, HEREOF, HEREIN,
HEREBY and similar expressions mean or refer to this Warrant Indenture and any
indenture, deed or instrument supplemental or ancillary hereto, and the
expressions SECTION, SUBSECTION and PARAGRAPH followed by a number mean the
specified section, subsection or paragraph of this Warrant Indenture.
(26) TSX means The Toronto Stock Exchange.
(27) WARRANT AGENT means the party of the second part hereunder and includes any
successor or permitted assigns for the time being in the trusts created hereby.
(28) WARRANT CERTIFICATE means a certificate evidencing one or more Warrants,
substantially in the form set out in Schedule A.
(29) WARRANTHOLDERS or HOLDERS means the persons for the time being entered in a
register of holders described in subsection 3.1 as holders of Warrants.
(30) WARRANTHOLDERS' REQUEST means an instrument, signed in one or more
counterparts by Warrantholders who hold in the aggregate not less than 25% of
the total number of Warrants outstanding for the time being, requesting the
Warrant Agent to take some action or proceeding specified therein.
(31) WARRANTS means the common share purchase warrants of Crystallex created and
authorized for issue pursuant to subsection 2.1 hereof, each such Warrant
entitling the holder thereof to acquire one Common Share at the Exercise Price
at any time prior to the Expiry Time.
(32) WRITTEN ORDER OF CRYSTALLEX, WRITTEN REQUEST OF CRYSTALLEX, WRITTEN CONSENT
OF CRYSTALLEX, WRITTEN DIRECTION OF CRYSTALLEX and CERTIFICATE OF CRYSTALLEX
mean, respectively, a written order, request, consent, direction and certificate
signed in the name of Crystallex by any director or officer of Crystallex or by
any other individual to whom such signing authority is delegated by the
directors from time to time, and may consist of one or more instruments so
executed.
1.2 WORDS IMPORTING THE SINGULAR
Words importing the singular include the plural and vice versa and
words importing a particular gender include all genders.
1.3 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Indenture into sections, subsections, paragraphs,
subparagraphs, clauses and subclauses, the provision of a table of contents and
the insertion of headings are for convenience of reference only and will not
affect the construction or interpretation of this Indenture.
1.4 DAY NOT A BUSINESS DAY
If the day on or before which any action that would otherwise be
required to be taken hereunder is not a business day that action will be
required to be taken on or before the requisite time on the next succeeding day
that is a business day.
1.5 TIME OF THE ESSENCE
Time will be of the essence in all respects in this Indenture and the
Warrant Certificates.
1.6 CURRENCY
Except as otherwise stated, all dollar amounts herein are expressed in
United States of America dollars.
1.7 APPLICABLE LAW
This Indenture and the Warrant Certificates will be construed and
enforced in accordance with the laws prevailing in Ontario and will be treated
in all respects as Ontario contracts.
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1.8 GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
Wherever in this Indenture reference is made to generally accepted
accounting principles, such reference shall be deemed to be to the generally
accepted accounting principles from time to time approved by the Canadian
Institute of Chartered Accountants, or any successor institute, as at the date
on which such calculation is made or required to be made in accordance with
generally accepted accounting principles. Where the character or amount of any
asset or liability or item of revenue or expense is required to be determined,
or any consolidation or other accounting computation is required to be made for
the purpose of this Indenture, such determination or calculation shall, to the
extent applicable and except as otherwise specified herein or as otherwise
agreed in writing by the parties, be made in accordance with generally accepted
accounting principles applied on a consistent basis.
SECTION 2 - THE WARRANTS
2.1 CREATION AND AUTHORIZATION OF WARRANTS
(1) Warrants, in a sufficient number to satisfy all obligations of Crystallex
under the Subscription Agreement, each whole Warrant entitling the holder
thereof to be issued one Common Share (subject to adjustment as provided herein)
on the terms and subject to the conditions herein provided, are hereby created
and authorized for issuance in accordance with the terms of the Subscription
Agreement.
(2) In accordance with the terms of the Subscription Agreement, Warrant
Certificates shall be executed by Crystallex and delivered to the Warrant Agent,
certified by or on behalf of the Warrant Agent upon the written order of
Crystallex and delivered by the Warrant Agent to Crystallex or to the order of
Crystallex pursuant to a written direction of Crystallex, without any further
act of or formality on the part of Crystallex and without the Warrant Agent
receiving any consideration therefor.
2.2 TERMS OF WARRANTS
(1) Subject to paragraph 2.2(2) hereof, each Warrant created and authorized for
issuance hereunder will entitle the holder thereof, upon the exercise thereof
and payment of the Exercise Price in accordance with the provisions of section 4
hereof, to be issued one Common Share.
(2) The Exercise Price and the number of Common Shares issuable on exercise of a
Warrant pursuant to paragraph 2.2(1) hereof, will be adjusted upon the
occurrence of the events and in the manner specified in section 5.
2.3 FORM OF WARRANT CERTIFICATES
(1) The Warrant Certificates (including the certificate of the Warrant Agent
endorsed thereon) will be substantially in the form set out in Schedule A, will
be dated as of the date hereof (regardless of the actual dates of their issue),
will bear such legends and distinguishing letters and numbers as Crystallex,
with the approval of the Warrant Agent, may prescribe and will be issuable in
any whole number denomination. No fractional Warrants will be issued or:
otherwise provided for hereunder.
(2) The Warrant Certificates may be engraved, lithographed or printed (the
expression "printed" including for purposes hereof both original typewritten
material as well as mimeographed, mechanically, photographically,
photostatically or electronically reproduced, typewritten or other written
material), or partly in one form and partly in another, as Crystallex may
determine.
(3) The Warrant Certificates will bear restrictive legends, so long as
appropriate, substantially similar to the following:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
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EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THESE SECURITIES MAY NOT BE EXERCISED [BY OR ON BEHALF OF A U.S. PERSON
(AS DEFINED IN REGULATION S UNDER THE ACT)] [INCLUDE ONLY FOR
REGULATION S INVESTORS.] UNLESS SUCH EXERCISE IS REGISTERED UNDER THE
ACT OR IS MADE PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION
UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE
SECURITIES SHALL NOT TRADE THE SECURITIES IN CANADA BEFORE DECEMBER 28,
2003.
2.4 SIGNING OF WARRANT CERTIFICATES
(1) The Warrant Certificates will be signed by any director or officer of
Crystallex or by any other individual to whom such signing authority is
delegated by the directors from time to time.
(2) The signatures of any of the officers or individuals referred to in
paragraph (1) may be manual signatures, engraved, lithographed or printed in
facsimile and Warrant Certificates bearing such facsimile signatures will be
binding on Crystallex as if they had been manually signed by such officers or
individuals.
(3) Notwithstanding that any person whose manual or facsimile signature appears
on a Warrant Certificate as one of the officers or individuals referred to in
paragraph (1) no longer holds the same or any other office with Crystallex at
the date of issuance of any Warrant Certificate or at the date of certification
or delivery thereof, such Warrant Certificate will, subject to subsection 2.5,
be valid and binding on Crystallex.
2.5 CERTIFICATION BY WARRANT AGENT
(1) No Warrant Certificate will be issued or, if issued, will be valid or
entitle the holder to the benefits hereof until it has been certified by manual
signature by or on behalf of the Warrant Agent substantially in the form of the
certificate set out in Schedule A or in such other form approved by the Warrant
Agent. The certification by the Warrant Agent on a Warrant Certificate will be
conclusive evidence as against Crystallex that such Warrant Certificate has been
duly issued hereunder and that the holder thereof is entitled to the benefits
hereof.
(2) The certification by the Warrant Agent on any Warrant Certificate issued
hereunder will not be construed as a representation or warranty by the Warrant
Agent as to the validity of this Indenture or such Warrant Certificate (except
the due certification thereof) or as to the performance by Crystallex of its
obligations under this Indenture and the Warrant Agent will in no respect be
liable or answerable for the use made of any Warrant Certificate or of the
consideration therefor, except as otherwise specified herein.
2.6 WARRANTS TO RANK PARI PASSU
All Warrants will rank pari passu, whatever may be the actual dates of
issue of the Warrant Certificates by which they are evidenced.
2.7 ISSUE IN SUBSTITUTION FOR LOST CERTIFICATES, ETC.
(1) If any Warrant Certificate becomes mutilated or is lost, destroyed or
stolen, Crystallex, subject to applicable law and to paragraph (2), will issue,
and thereupon the Warrant Agent will certify and deliver, a new Warrant
Certificate of like tenor as the one mutilated, lost, destroyed or stolen in
exchange for and in place of and on surrender and cancellation of such mutilated
Warrant Certificate or in lieu of and in substitution for such lost, destroyed
or stolen Warrant Certificate.
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(2) The applicant for the issue of a new Warrant Certificate pursuant to this
section will bear the reasonable cost of the issue thereof and in case of loss,
destruction or theft will, as a condition precedent to the issue thereof:
(a) furnish to Crystallex and to the Warrant Agent such evidence of
ownership and of the loss, destruction or theft of the Warrant
Certificate to be replaced as is satisfactory to Crystallex and to the
Warrant Agent in their discretion;
(b) furnish an indemnity in amount and form satisfactory to Crystallex and
to the Warrant Agent in their discretion; and
(c) pay the reasonable charges of Crystallex and the Warrant Agent in
connection therewith.
2.8 CANCELLATION OF SURRENDERED WARRANTS
All Warrant Certificates surrendered to the Warrant Agent pursuant to
subsections 2.7, 3.1, 3.2 or 4.1 will be cancelled by the Warrant Agent and, if
requested by Crystallex in writing, the Warrant Agent will furnish to Crystallex
a cancellation certificate identifying each Warrant Certificate so cancelled,
the number of Warrants evidenced thereby and the number of Common Shares, if
any, issued pursuant to such Warrants.
2.9 WARRANTHOLDER NOT A SHAREHOLDER
Nothing in this Indenture or in the holding of a Warrant evidenced by a
Warrant Certificate, or otherwise, will be construed as conferring on any
Warrantholder any right or interest whatsoever as a shareholder of Crystallex,
including but not limited to any right to vote at, to receive notice of, or to
attend any meeting of shareholders or any other proceeding of Crystallex or any
right to receive any dividend or other distribution.
SECTION 3 - REGISTRATION, TRANSFER, EXCHANGE AND OWNERSHIP OF WARRANTS
3.1 REGISTRATION AND TRANSFER OF WARRANTS
(1) The Warrant Agent will cause to be kept:
(a) by and at the principal offices of the Warrant Agent in Vancouver,
British Columbia, a register of holders in which shall be entered
in alphabetical order the names and addresses of the holders of
Warrants and particulars of the Warrants held by them; and
(b) by and at the principal office in Vancouver, British Columbia of
the Warrant Agent, a register of transfers in which all transfers
of Warrants and the date and other particulars of each transfer
shall be entered.
(2) No transfer of any Warrant will be valid without the prior written consent
of Crystallex, and in any case not unless duly entered on the appropriate
register of transfers referred to in paragraph 3.1(1), or on any branch
registers maintained pursuant to paragraph 3.1(7), upon surrender to the Warrant
Agent of the Warrant Certificate evidencing such Warrant, duly endorsed by, or
accompanied by a written instrument of transfer substantially in the form of
Schedule C to the Warrant Certificate or otherwise in form satisfactory to the
Warrant Agent executed by, the registered holder or his executors,
administrators or other legal representatives or his or their attorney duly
appointed by an instrument in writing in form and execution satisfactory to the
Warrant Agent, and, upon compliance with such requirements and such other
reasonable requirements as the Warrant Agent may prescribe, such transfer will
be duly noted on one of such registers of transfers by the Warrant Agent within
two business days of the satisfaction of all such requirements.
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(3) The transferee of any Warrant will, after surrender to the Warrant Agent of
the Warrant Certificate evidencing such Warrant as required by paragraph 3.1(2)
and upon compliance with all other conditions in respect thereof required by
this Indenture or by law, be entitled to be entered on the register of holders
referred to in paragraph 3.1(1), or on any branch registers of holders
maintained pursuant to paragraph 3.1(7), as the owner of such Warrant free from
all equities or rights of set-off or counterclaim between Crystallex and his
transferor or any previous holder of such Warrant, except in respect of equities
of which Crystallex is required to take notice by statute or by order of a court
of competent jurisdiction.
(4) Crystallex will be entitled, and may direct the Warrant Agent, to refuse to
recognize any transfer, or enter the name of any transferee, of any Warrant on
the registers referred to in paragraph 3.1(1), or on any branch registers
maintained pursuant to paragraph 3.1(7), if such transfer would require
Crystallex to qualify the Common Shares issuable on exercise of the Warrants for
distribution in any jurisdiction of Canada.
(5) Subject to applicable law, neither Crystallex nor the Warrant Agent will be
bound to take notice of or see to the execution of any trust, whether express,
implied or constructive, in respect of any Warrant, and may transfer any Warrant
on the written direction of the person registered as the holder thereof and
delivered in accordance with paragraph 3.1(2), whether named as trustee or
otherwise, as though that person were the beneficial owner thereof.
(6) The registers referred to in paragraph 3.1(1), and any branch registers
maintained pursuant to paragraph 3.1(7), will at all reasonable times be open
for inspection by Crystallex and any Warrantholder. The Warrant Agent will from
time to time when requested to do so in writing by Crystallex or any
Warrantholder (upon payment of the Warrant Agent's reasonable charges), furnish
Crystallex or such Warrantholder with a list of the names and addresses of
holders of Warrants entered on such registers and showing the number of Warrants
held by each such holder.
(7) With the approval of the Warrant Agent, Crystallex may at any time and from
time to time change the place at which the registers referred to in paragraph
3.1(1) are kept, cause branch registers of holders or transfers to be kept at
other places and close such branch registers or change the place at which such
branch registers are kept. Notice of any such change or closure shall be given
by Crystallex to the Warrant Agent and the holders of Warrants.
(8) The Warrant Agent shall retain until the sixth anniversary of the
termination of this Indenture all instruments of transfer of Warrants which are
tendered for registration including the details shown thereon of the persons by
or through whom they were lodged, all cancelled Warrants and other related
documents.
3.2 EXCHANGE OF WARRANT CERTIFICATES
(1) One or more Warrant Certificates may, on compliance with the reasonable
requirements of the Warrant Agent, be exchanged for one or more Warrant
Certificates of different denomination evidencing in the aggregate the same
number of Warrants as the Warrant Certificate or Warrant Certificates being
exchanged.
(2) Warrant Certificates may be exchanged only at the principal offices of the
Warrant Agent in Vancouver, British Columbia, or at any other place designated
by Crystallex with the approval of the Warrant Agent.
(3) Any Warrant Certificate tendered for exchange shall be surrendered to the
Warrant Agent or its agent and cancelled.
(4) Crystallex will sign all Warrant Certificates necessary to carry out
exchanges pursuant to this subsection and such Warrant Certificates will be
certified by or on behalf of the Warrant Agent.
3.3 NO CHARGES FOR TRANSFER OR EXCHANGE
No charge, including any stamp tax or other governmental levy, will be
levied on a presenter of a Warrant Certificate pursuant to this Indenture for
the transfer of any Warrant or the exchange of any Warrant Certificate.
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3.4 OWNERSHIP OF WARRANTS
(1) Crystallex and the Warrant Agent may deem and treat the person in whose name
any Warrant is registered as the absolute owner of such Warrant for all
purposes, and such person will for all purposes of this Indenture be and be
deemed to be the absolute owner thereof, and Crystallex and the Warrant Agent
will not be affected by any notice or knowledge to the contrary except as
required by statute or by order of a court of competent jurisdiction.
(2) The registered holder of any Warrant will be entitled to the rights
evidenced thereby free from all equities and rights of set-off or counterclaim
between Crystallex and the original or any intermediate holder thereof and all
persons may act accordingly, and the delivery to any such registered holder of
any Common Shares issued on exercise of such Warrant will be a good discharge to
Crystallex and the Warrant Agent therefor and, unless Crystallex or the Warrant
Agent are required by statute or by an order of a court of competent
jurisdiction, neither Crystallex nor the Warrant Agent will be bound to inquire
into the title of any such registered holder.
3.5 ASSUMPTION BY TRANSFEREE
Upon becoming a Warrantholder in accordance with the provisions of this
Indenture, the transferee thereof shall be deemed to have acknowledged and
agreed to be bound by this Indenture. Upon the registration by the Warrant Agent
of such transferee as the holder of a Warrant, the transferor thereof shall
cease to have any further rights under this Indenture with respect to such
Warrant or any Common Shares to be issued on the exercise of such Warrant.
SECTION 4 - EXERCISE OF WARRANTS
4.1 EXERCISE
(1) Subject to the limitation set forth in paragraph 4.1(2), holders of Warrants
may at any time prior to the Expiry Time exercise the right thereby conferred to
be issued Common Shares by surrendering to the Warrant Agent at its principal
offices in Vancouver, British Columbia, or to any other person or at any other
place designated by Crystallex with the approval of the Warrant Agent, during
normal business hours on a business day at such place:
(a) a certified cheque or bank draft payable to Crystallex in the
amount of the Exercise Price;
(b) such documentation as may be required to satisfy the restrictive
legend on the Warrant Certificates;
(c) the Warrant Certificate evidencing such warrants; and
(d) a duly completed and executed notice of exercise substantially in
the form set out in Schedule B to such Warrant Certificate,
provided notice is also sent to Crystallex by delivering to it a copy of such
documents. Notwithstanding the foregoing, a Warrantholder may exercise the
warrants by delivering to the Warrant Agent a facsimile transmission of copies
of the documents referred to in (b) and (c) above and a wire transfer to
Crystallex in the amount of the Exercise Price, provided that the originals of
each of the documents referred to in (b) and (c) above are received by the
Warrant Agent or other person as may be designated herein within three business
days of the date of such facsimile transmission and the Exercise Price is
received by Crystallex via wire transfer as aforesaid.
(2) Any certified cheque or bank draft, Warrant Certificate or notice of
exercise referred to in paragraph 4.1(1) will be deemed to have been surrendered
only on personal delivery thereof to, or, if sent by mail or other means of
transmission, on actual receipt thereof by, the Warrant Agent or one of the
other persons at the office or one of the other places specified in paragraph
4.1(1), provided however that if exercise is made by facsimile transmission as
set out in paragraph 4.1(1), the documentation referred to therein will be
deemed to be surrendered as at the date of the facsimile transmission in the
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event the original documentation referred to therein is received by the Warrant
Agent or other person as designated therein within three business days of the
date of the facsimile transmission. The Warrant Agent shall not be required to
deliver certificates representing Common Shares against such facsimile
transmission until original documentation referred to therein is received.
(3) Any notice of exercise referred to in paragraph 4.1(1) must be signed by the
Warrantholder, or such Warrantholder's executors, administrators or other legal
representatives or his attorney duly appointed by an instrument in writing in
form and execution satisfactory to the Warrant Agent, acting reasonably, and, if
any Common Shares thereby issuable are to be issued to a person or persons other
than the Warrantholder, must specify the name or names and the address or
addresses of each such person or persons and the number of Common Shares to be
issued to each such person if more than one is so specified.
(4) The holder of any Warrant Certificate who wishes to exercise the Warrants
evidenced by such Warrant Certificate may exercise less than all of such
Warrants and in the case of any such partial exercise shall be entitled to
receive a Warrant Certificate, in form, signed and certified in accordance with
the provisions of section 2, evidencing the number of Warrants held by the
Warrantholder which remain unexercised. Such Warrant Certificate will be
delivered by the Warrant Agent to the holder concurrently with the certificates
representing the Common Shares issued on partial exercise of such holder's
Warrants.
4.2 EFFECT OF EXERCISE
(1) Upon the exercise of any Warrant in accordance with subsection 4.1, the
Common Shares thereby issuable will be deemed to have been issued, and the
person or persons to whom such Common Shares are to be issued will be deemed to
have become the holder or holders of record thereof on the Exercise Date, unless
the transfer registers for the Common Shares are closed on that date, in which
case such Common Shares will be deemed to have been issued and such person or
persons will be deemed to have become the holder or holders of record thereof on
the date on which such transfer registers are reopened, but such Common Shares
will be issued on the basis of the number of Common Shares to which such person
or persons were entitled on the Exercise Date.
(2) As soon as practicable and in any event not later than the fifth business
day on which the transfer registers for the Common Shares have been open after
such exercise, Crystallex will cause the Warrant Agent to mail to the person or
persons in whose name or names the Common Shares thereby issued have been
issued, at his or their respective addresses, or, if so specified, cause to be
delivered to such person or persons at the place where the Warrant Certificate
evidencing such Warrant was surrendered, certificates representing the Common
Shares so issued.
(3) If any Common Shares issuable pursuant to any Warrant are to be issued to a
person or persons other than the Warrantholder, the Warrantholder must pay to
Crystallex or to the Warrant Agent on its behalf an amount equal to all eligible
transfer taxes or other government charges, and Crystallex will not be required
to issue or deliver any certificates representing any such Common Shares unless
or until such amount has been so paid or the Warrantholder has established to
the satisfaction of Crystallex that such taxes and charges have been paid or
that no such taxes or charges are owing.
4.3 NO FRACTIONAL COMMON SHARES
Crystallex shall not be required to issue fractional Common Shares upon
the exercise of Warrants. If any fractional interest in a Common Share would,
except for the provisions of this section, be deliverable upon the exercise of
Warrants, Crystallex may, at its option, in lieu of delivering any certificate
of such fractional interest, satisfy such fractional interest by paying to the
holder of such exercised Warrants an amount in lawful money to the United States
of America equal (computed to the nearest cent) to such fractional interest
multiplied by the Current Market Price of the Common Shares on the business day
preceding the Exercise Date.
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4.4 RECORDING
The Warrant Agent will record particulars of each Warrant exercised
which will include the name and address of each person to whom Common Shares are
thereby issued, the number of Common Shares so issued and the Exercise Date in
respect thereof. Within five business days after each Exercise Date the Warrant
Agent will provide such particulars in writing to Crystallex.
4.5 SECURITIES RESTRICTIONS
If the Exercise Date in respect of any Warrant occurs before the
Registration Statement is declared effective or before the Common Shares thereby
issued are freely tradeable in Canada, the certificates representing such Common
Shares will bear such legends as may, in the opinion of counsel to Crystallex,
be necessary or advisable in order to avoid a violation of any securities laws
of any province of Canada or of the United States of America or to comply with
the-requirements of the TSX, the AMEX or of any stock exchange on which the
Common Shares are listed, provided that if, at any time, in the opinion of
counsel to Crystallex, such legends are no longer necessary or advisable in
order to avoid a violation of any such laws, or the holder of any such legended
certificate, at his expense, provides Crystallex with evidence satisfactory in
form and substance to Crystallex (which may include an opinion of counsel
satisfactory to Crystallex) to the effect that such holder is entitled to sell
or otherwise transfer such Common Shares in a transaction in which such legends
are not required, such legended certificate may thereafter be surrendered to
Crystallex in exchange for a certificate which does not bear such legends.
Crystallex shall give written notice to the Warrant Agent of the effective date
of the Registration Statement.
SECTION 5 - ADJUSTMENTS
5.1 DEFINITIONS
The rights of the holder of any Warrant, including the number of Common
Shares issuable upon the exercise of such Warrant and the Exercise Price payable
on exercise of such Warrant, will be adjusted from time to time in the events
and in the manner provided in, and in accordance with this section 5 and for
such purposes:
(a) ADJUSTMENT PERIOD means in respect of each Warrant, the period
commencing on the Issue Date thereof and ending at the Expiry Time
thereof;
(b) EXCHANGE RATE means the rate at which Common Shares are issuable
upon the exercise of any Warrant, which rate, subject to adjustment
in accordance with this Indenture, is one Common Share for each
Warrant as of the date hereof; and
(c) TRADING DAY, with respect to any stock exchange or over-the-counter
market, means a day on which shares may be traded through the
facilities of such stock exchange or in such over-the-counter
market, and, otherwise, means a day on which shares may be traded
through the facilities of the principal stock exchange on which the
Common Shares are listed (or, if the Common Shares are not listed
on any stock exchange, then in the over-the-counter market).
5.2 ADJUSTMENT OF EXCHANGE RATE
(1) The Exchange Rate in effect at any date will be subject to adjustment from
time to time as follows:
(a) If and whenever at any time during the Adjustment Period,
Crystallex shall (i) subdivide or redivide the outstanding Common
Shares into a greater number of Common Shares, (ii) consolidate,
combine or reduce the outstanding Common Shares into a lesser
number of Common Shares, or (iii) issue Common Shares to all or
substantially all of the holders of Common Shares by way of a stock
dividend or other distribution, then, in each such event, the
Exchange Rate will, on the record date for such event, or if no
record date is fixed, the effective date of such event, be adjusted
so that it will equal the rate determined by multiplying the
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Exchange Rate in effect immediately prior to such date by a
fraction, of which the denominator shall be the total number of
Common Shares outstanding on such date before giving effect to such
event, and of which the numerator shall be the total number of
Common Shares outstanding on such date after giving effect to such
event. Such adjustment will be made successively whenever any such
event shall occur. Any such issue of Common Shares by way of a
stock dividend shall be deemed to have been made on the record date
for such stock dividend for the purpose of calculating the number
of outstanding Common Shares under clauses 5.2(1)(b) and (c).
(b) If and whenever at any time during the Adjustment Period,
Crystallex shall fix a record date for the issuance of rights,
options or warrants to all or substantially all of the holders of
Common Shares entitling the holders thereof, within a period
expiring not more than 45 days after the date of issue thereof, to
subscribe for or purchase Common Shares (or securities convertible
into or exchangeable for Common Shares) at a price per share (or
having a conversion or exchange price per share) less than 95% of
the Current Market Price on the earlier of such record date and the
date on which Crystallex announces its intention to make such
issuance, then, in each such case, the Exchange Rate will be
adjusted immediately after such record date so that it will equal
the rate determined by multiplying the Exchange Rate in effect on
such record date by a fraction, of which the denominator shall be
the total number of Common Shares outstanding on such record date
plus a number of Common Shares equal to the number arrived at by
dividing the aggregate price of the total number of additional
Common Shares so offered for subscription or purchase (or the
aggregate conversion or exchange price of the convertible or
exchangeable securities so offered) by such Current Market Price,
and of which the numerator shall be the total number of Common
Shares outstanding on such record date plus the total number of
additional Common Shares so offered for subscription or purchase
(or into or for which the convertible or exchangeable securities so
offered are convertible or exchangeable). Any Common Shares owned
by or held for the account of Crystallex or any subsidiary of
Crystallex shall be deemed not to be outstanding for the purpose of
any such computation. Such adjustment will be made successively
whenever such a record date is fixed, provided that if two or more
such record dates or record dates referred to in clause 5.2(1)(c)
are fixed within a period of 25 Trading Days, such adjustment will
be made successively as if each of such record dates occurred on
the earliest of such record dates. To the extent that any such
rights, options or warrants are not so issued or any such rights,
options or warrants are not exercised prior to the expiration
thereof, the Exchange Rate will then be readjusted to the Exchange
Rate which would then be in effect if such record date had not been
fixed or to the Exchange Rate which would then be in effect based
upon the number of Common Shares (or securities convertible into or
exchangeable for Common Shares) actually issued upon the exercise
of such rights, options or warrants, as the case may be.
(c) If and whenever at any time during the Adjustment Period,
Crystallex shall fix a record date for the making of a distribution
to all or substantially all of the holders of Common Shares of (i)
shares of any class other than Common Shares whether of Crystallex
or any other corporation, (ii) rights, options or warrants (other
than rights, options or warrants exercisable by the holders thereof
within a period expiring not more than 45 days after the date of
issue thereof), (iii) evidences of indebtedness, or (iv) cash,
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securities or other property or assets, then, in each such case,
the Exchange Rate will be adjusted immediately after such record
date so that it will equal the rate determined by multiplying the
Exchange Rate in effect on such record date by a fraction, of which
the denominator shall be the total number of Common Shares
outstanding on such record date multiplied by the Current Market
Price on the earlier of such record date and the date on which
Crystallex announces its intention to make such distribution, less
the aggregate fair market value (as determined by the directors at
the time such distribution is authorized) of such shares or rights,
options or warrants or evidences of indebtedness or cash,
securities or other property or assets so distributed, and of which
the numerator shall be the total number of Common Shares
outstanding on such record date multiplied by such Current Market
Price. Any Common Shares owned by or held for the account of
Crystallex or any subsidiary of Crystallex shall be deemed not to
be outstanding for the purpose of any such computation. Such
adjustment will be made successively whenever such a record date is
fixed, provided that if two or more such record dates or record
dates referred to in paragraph (b) are fixed within a period of 25
Trading Days, such adjustment will be made successively as if each
of such record dates occurred on the earliest of such record dates.
To the extent that such distribution is not so made or to the
extent that any such rights, options or warrants so distributed are
not exercised prior to the expiration thereof, the Exchange Rate
will then be readjusted to the Exchange Rate which would then be in
effect if such record date had not been fixed or to the Exchange
Rate which would then be in effect based upon such shares or
rights, options or warrants or evidences of indebtedness or cash,
securities or other property or assets actually distributed or
based upon the number or amount of securities or the property or
assets actually issued or distributed upon the exercise of such
rights, options or warrants, as the case may be.
(2) If and whenever at any time during the Adjustment Period, there is (i) any
reclassification of the Common Shares at any time outstanding, any change of the
Common Shares into other shares or any other capital reorganization of
Crystallex (other than as described in paragraph (1)), (ii) any consolidation,
amalgamation, arrangement, merger or other form of business combination of
Crystallex with or into any other corporation resulting in any reclassification
of the outstanding Common Shares, any change of the Common Shares into other
shares or any other capital reorganization of Crystallex, or (iii) any sale,
lease, exchange or transfer of the undertaking or assets of Crystallex as an
entirety or substantially as an entirety to another corporation or entity, then,
in each such event, each holder of any Warrant which is thereafter exercised
will be entitled to receive, and shall accept, in lieu of the number of Common
Shares to which such holder was theretofore entitled upon such exercise, the
kind and number or amount of shares or other securities or property which such
holder would have been entitled to receive as a result of such event if, on the
effective date thereof, such holder had been the registered holder of the number
of Common Shares to which such holder was theretofore entitled upon such
exercise. If necessary as a result of any such event, appropriate adjustments
will be made in the application of the provisions set forth in this section 5
with respect to the rights and interests thereafter of the holders of Warrants
to the end that the provisions set forth in this section 5 will thereafter
correspondingly be made applicable, as nearly as may reasonably be possible, in
the relation to any shares or other securities or property thereafter
deliverable upon the exercise or deemed exercise of any Warrant. Any such
adjustments will be made by and set forth in an indenture supplemental hereto
approved by the directors and by the Trustee and shall for all purposes be
conclusively deemed to be an appropriate adjustment.
5.3 ADJUSTMENT OF EXERCISE PRICE
(1) The Exercise Price in effect at any date will be subject to adjustment from
time to time if and whenever at any time during the Adjustment Period,
Crystallex shall (i) subdivide or redivide the outstanding Common Shares into a
greater number of Common Shares,(ii) consolidate, combine or reduce the
outstanding Common Shares into a lesser number of Common Shares, or (iii) issue
Common Shares to all or substantially all of the holders of Common Shares by way
of a stock dividend or other distribution. In any such event, the Exercise Price
will, on the effective date of or record date for such event, be adjusted so
that it will equal the price determined by multiplying the Exercise Price in
effect immediately prior to such date by a fraction, the numerator of which
shall be the total number of Common Shares outstanding on such date before
giving effect to such event and the denominator of which shall be the total
number of Common Shares outstanding immediately after giving effect to such
event. Such adjustment will be made successively whenever any such event shall
occur.
(2) If and whenever at any time during the Adjustment Period, Crystallex shall
fix a record date for the issue of rights, options or warrants to all or
substantially all of the holders of Common Shares entitling the holders thereof,
within a period expiring not more than 45 days after the date of the issue
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thereof, to subscribe for or purchase Common Shares (or securities convertible
into or exchangeable for Common Shares) at a price per share (or having a
conversion or exchange price per share) less than 95% of the Current Market
Price on the earlier of such record date and the date on which Crystallex
announces its intention to make such issuance, then, in each such case, the
Exercise Price will be adjusted immediately after such record date so that it
will equal the price determined by multiplying the Exercise Price in effect on
such record date by a fraction, of which the numerator shall be the total number
of Common Shares outstanding on such record date plus a number of Common Shares
equal to the number arrived at by dividing the aggregate price of the total
number of additional Common Shares so offered for subscription or purchase (or
the aggregate conversion or exchange price of the convertible or exchangeable
securities so offered) by such Current Market Price, and of which the
denominator shall be the total number of Common Shares outstanding on such
record date plus the total number of additional Common Shares so offered for
subscription or purchase (or into or for which the convertible or exchangeable
securities so offered are convertible or exchangeable). If by the terms of such
rights, options or warrants, there is more than one purchase, conversion or
exchange price per Common Share, the aggregate price of the total number of
additional Common Shares offered for subscription or purchase, or the additional
conversion or exchange price of the convertible or exchangeable securities so
offered, shall be calculated for the purposes of the adjustment on the basis of
the lowest purchase, conversion or exchange price per Common Share, as the case
may be. Any Common Shares owned by or held for the account of Crystallex or any
affiliate or any subsidiary of Crystallex shall be deemed not to be outstanding
for the purpose of any such computation. Such adjustment will be made
successively whenever such a record date is fixed, provided that if two or more
such record dates or record dates referred to in paragraph 5.3(3) are fixed
within a period of 25 Trading Days, such adjustment will be made successively as
if each of such record dates occurred on the earliest of such record dates. To
the extent that any such rights, options or warrants are not so issued or any
such rights, options or warrants are not exercised prior to the expiration
thereof, the Exercise Price will then be readjusted to the Exercise Price which
would then be in effect if such record date had not been fixed or to the
Exercise Price which would then be in effect based on the number of Common
Shares (or securities convertible into or exchangeable for Common Shares)
actually issued upon the exercise of such rights, options or warrants, as the
case may be.
(3) If and whenever at any time during the Adjustment Period, Crystallex shall
fix a record date for the making of a distribution to all or substantially all
of the holders of Common Shares of:
(a) shares of any class other than Common Shares whether of Crystallex
or any other corporation;
(b) rights, options or warrants (other than rights, options or warrants
exercisable by the holders thereof within a period expiring not
more than 45 days after the date of issue thereof);
(c) evidences of indebtedness; or
(d) cash, securities or other property or assets;
then, in each such case, the Exercise Price will be adjusted immediately after
such record date so that it will equal the rate determined by multiplying the
Exercise Price in effect on such record date by a fraction, of which the
numerator shall be the total number of Common Shares outstanding on such record
date multiplied by the Current Market Price on the earlier of such record date
and the date on which Crystallex announces its intention to make such
distribution, less the aggregate fair market value (as determined by the
directors at the time such distribution is authorized) of such shares or rights,
options or warrants or evidences of indebtedness or cash, securities or other
property or assets so distributed, and of which the denominator shall be the
total number of Common Shares outstanding on such record date multiplied by such
Current Market Price. Any Common Shares owned by or held for the account of
Crystallex or any subsidiary of Crystallex shall be deemed not to be outstanding
for the purpose of such computation. Such adjustment will be made successively
whenever such a record date is fixed, provided that if two or more such record
dates or record dates referred to in paragraph 5.3(b) are fixed within a period
of 25 Trading Days, such adjustment will be made successively as if each of such
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record dates occurred on the earliest of such record dates. To the extent that
such distribution is not so made or to the extent that any such rights, options
or warrants so distributed are not exercised prior to the expiration thereof,
the Exercise Price will then be readjusted to the Exercise Price which would
then be in effect if such record date had not been fixed or to the Exercise
Price which would then be in effect based upon such shares or rights, options or
warrants or evidences of indebtedness or cash, securities or other property or
assets actually distributed or based upon the number or amount of securities or
the property or assets actually issued or distributed upon the exercise of such
rights, options or warrants, as the case may be.
5.4 ADJUSTMENT RULES
(1) In any case in which this section 5 shall require that an adjustment shall
become effective immediately after a record date for or effective date of an
event referred to herein, Crystallex may defer, until the occurrence and
consummation of such event, issuing to the holder of any Warrant exercised or
deemed to have been exercised after such record date or effective date and
before the occurrence and consummation of such event the additional Common
Shares, warrants or other securities or property issuable upon such exercise or
deemed exercise by reason of the adjustment required by such event, provided,
however, that Crystallex will deliver to such holder, as soon as reasonably
practicable after such record date, an appropriate instrument evidencing such
holder's right to receive such additional Common Shares, warrants or other
securities or property upon the occurrence and consummation of such event and
the right to receive any dividend or other distribution in respect of such
additional Common Shares, warrants or other securities or property declared in
favour of the holders of record of Common Shares or of such other securities or
property on or after the Exercise Date, or such later date as such holder would,
but for the provisions of this Section, have become the holder of record of such
additional Common Shares, warrants or of such other securities or property
pursuant to paragraph 4.2(1).
(2) After any adjustment pursuant to this section 5, the term "Common Shares"
where used in this Indenture shall be interpreted to mean securities of any
class or classes which, as a result of such adjustment and all prior adjustments
pursuant to this section 5, a Warrantholder is entitled to receive upon the
exercise of his Warrants, and the number of Common Shares indicated in any
exercise made pursuant to a Warrant shall be interpreted to include the number
of Common Shares and other property or securities a Warrantholder is entitled to
receive, as a result of such adjustment and all prior adjustments pursuant to
this section 5, upon the full exercise of a Warrant.
(3) All shares of any class or other securities or property which a
Warrantholder is at the time in question entitled to receive on the full
exercise of his Warrants, whether or not as a result of adjustments made
pursuant to this section 5 shall, for the purposes of the interpretation of this
Indenture, be deemed to be Common Shares which such Warrantholder is entitled to
subscribe for pursuant to the exercise of such Warrants.
(4) If Crystallex shall set a record date to determine the holders of the
securities for the purpose of entitling them to receive any dividend or
distribution or any subscription or exercise rights and shall, thereafter and
before the distribution to such securityholders of any such dividend,
distribution or subscription or exercise rights, legally abandon its plan to pay
or deliver such dividend, distribution or subscription or exercise rights, then
no adjustment in the number of Common Shares obtainable upon exercise of any
Warrant shall be required by reason of the setting of such record date.
(5) The adjustments provided for in this section 5 are cumulative, shall, in the
case of any adjustment to the Exchange Rate or the Exercise Price, be computed
to the nearest one one-hundredth of a Common Share and will apply (without
duplication) to successive subdivisions, consolidations, distributions,
issuances or other events resulting in any adjustment under the provisions of
this section, provided that, notwithstanding any other provision of this
section, no adjustment of the Exchange Rate or the Exercise Price will be
required (i) unless such adjustment would require an increase or decrease of at
least 1% in the Exchange Rate or the Exercise Price then in effect (provided,
however, that any adjustment which by reason of this subsection is not required
to be made will be carried forward and taken into account in any subsequent
adjustment), or (ii) in respect of any Common Shares issuable or issued pursuant
to any stock option or any stock option or stock purchase plan of Crystallex or
of subsidiaries of Crystallex.
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(6) If any question arises with respect to the adjustments provided in this
section, such question shall be conclusively determined by Crystallex's auditors
or, if they are unable or unwilling to act, by such firm of chartered
accountants as is appointed by Crystallex and acceptable to the Warrant Agent.
Such accountants shall have access to all necessary records of Crystallex and
such determination shall be binding upon Crystallex, the Warrant Agent and the
Warrantholders.
(7) If and whenever at any time during the Adjustment Period, Crystallex shall
take any action affecting or relating to the Common Shares, other than any
action described in this section, which in the opinion of the directors would
adversely affect the rights of any holders of Warrants, the Exchange Rate and/or
the Exercise Price will be adjusted, subject to the prior written approval of
the TSX, by the directors in such manner, if any, and at such time, as the
directors, may in their sole discretion determine to be equitable in the
circumstances to such holders.
(8) As a condition precedent to the taking of any action which would require an
adjustment in any of the rights under the Warrants, Crystallex will take any
action which may, in the opinion of counsel to Crystallex, be necessary in order
that Crystallex, or any successor to Crystallex or successor to the undertaking
or assets of Crystallex, will be obligated to and may validly and legally issue
all the Common Shares, warrants or other securities or property which the
holders of Warrants would be entitled to receive thereafter on the exercise or
deemed exercise thereof in accordance with the provisions hereof.
(9) At least ten days before the earlier of the effective date of or record date
for any event referred to in this section that requires or might require an
adjustment in any of the rights under the Warrants or such longer notice period
as may be applicable in respect of notices required to be delivered by
Crystallex to holders of its Common Shares, Crystallex will:
(a) file with the Warrant Agent a certificate of Crystallex specifying
the particulars of such event and, to the extent determinable, any
adjustment required and the computation of such adjustment; and
(b) give notice to the Warrantholders of the particulars of such event
and, to the extent determinable, any adjustment required and a
description of how such adjustment will be calculated.
Such notice need only set forth such particulars as have been determined at the
date such notice is given. If any adjustment for which such notice is given is
not then determinable, promptly after such adjustment is determinable Crystallex
will:
(c) file with the Warrant Agent a certificate of Crystallex showing the
computation of such adjustment; and
(d) give notice to the Warrantholders of such adjustment.
Where a notice pursuant to this subsection has been given, the Warrant Agent
shall be entitled to act and rely on any adjustment calculation of Crystallex or
Crystallex's auditors.
(10) Subject to paragraph 10.2(1) the Warrant Agent shall not:
(a) at any time be under any duty or responsibility to any
Warrantholder to determine whether any facts exist which may
require any adjustment in the Exchange Rate or the Exercise Price,
or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making same;
(b) be accountable with respect to the validity or value (or the kind
or amount) of any Common Shares or of any shares or other
securities or property which may at any time be issued or delivered
upon the exercise or deemed exercise of any Warrant; or
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(c) be responsible for any failure of Crystallex to make any cash
payment or to issue, transfer or deliver Common Shares or
certificates representing Common Shares upon the surrender of any
Warrant for the purpose of exercise or deemed exercise, or to
comply with any of the covenants contained in this section.
SECTION 6 - COVENANTS
6.1 GENERAL COVENANTS
Crystallex represents, warrants, covenants and agrees to and with the
Warrant Agent that, so long as any Warrant remains outstanding and may be
exercised:
(a) Crystallex is duly authorized to create and issue the Warrants and
that the Warrant Certificates, when issued and countersigned as
herein provided, will be valid and enforceable against Crystallex;
(b) Crystallex will at all times maintain its corporate existence,
carry on and conduct its business in a proper and business-like
manner, keep or cause to be kept proper books of account in
accordance with generally accepted accounting practice and
Crystallex will send to Warrantholders copies of all financial
statements furnished to its shareholders during the term of this
Indenture;
(c) Crystallex will continue, and will cause each of its subsidiaries
to continue, to engage in business of the same general type as now
conducted by Crystallex and its subsidiaries, and will preserve,
renew and keep in full force and effect its respective corporate
existence and their respective material rights, privileges and
franchises necessary or desirable in the normal conduct of
business;
(d) Crystallex and each of its subsidiaries will not, in a single
transaction or a series of related transactions, (i) consolidate
with or merge with or into any other person, or (ii) permit any
other person to consolidate with or merge into it, unless (x)
either (A) Crystallex shall be the survivor of such merger or
consolidation or (B) the surviving person shall expressly assume by
supplemental agreement all of the obligations of Crystallex under
the Subscription Agreement, this Indenture and the Note Indenture;
(y) if Crystallex is not the surviving entity, such surviving
entity's common shares shall be listed on either The New York Stock
Exchange, AMEX, Nasdaq National Market or TSX and (z) Crystallex
has delivered to the Warrantholders an officers' certificate and
opinion of counsel, each stating that such consolidation, merger or
transfer complies with this Indenture, that the surviving person
agrees to be bound thereby and that all conditions precedent in
this Indenture relating to such transaction have been satisfied;
(e) Crystallex will reserve for the purpose and keep available
sufficient unissued or created Common Shares to enable it to
satisfy its obligations on the exercise of the Warrants and will
issue and deliver such shares in accordance with the provisions
hereof;
(f) Crystallex will cause the Common Shares from time to time issued
pursuant to the exercise of the Warrants, and the certificates
representing such Common Shares, to be duly issued and delivered in
accordance with the Warrants and the terms hereof;
(g) all Common Shares that are issued or created on exercise of the
Warrants will be fully paid and non-assessable;
(h) Crystallex will cause the Warrant Agent to keep open on business
days the registers of holders and registers of transfers referred
to in subsection 3.1 and will not take any action or omit to take
any action which would have the effect of preventing the
Warrantholders from exercising any of the Warrants or receiving any
of the Common Shares upon such exercise;
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(i) Crystallex is a "reporting issuer" not in default under the
securities legislation of each of Ontario, British Columbia,
Alberta and Nova Scotia and, with the exception of the Company's
most recently filed Form 20-F, has timely filed all forms and
reports under the Exchange Act required to be filed by it since it
has become subject to the periodic reporting requirements
thereunder and there is no material change in the affairs of
Crystallex which presently requires disclosure under applicable
securities laws which has not been so disclosed and no such
disclosure has been made on a confidential basis since March 31,
2003 which has not subsequently been disclosed. Crystallex
covenants and agrees to use its reasonable best efforts to ensure
that it remains a reporting issuer in good standing under the
securities legislation in Ontario until the Expiry Time;
(j) Crystallex will make all requisite filings, including filings with
the Ontario Securities Commission and the SEC, in connection with
the issuance and exercise of the Warrants and issue of the Common
Shares thereunder; and
(k) generally, Crystallex will well and truly perform and carry out all
acts and things to be done by it as provided in this Indenture.
6.2 RESERVATION OF SHARES
(1) The conversion and exercise rights of the holders set forth herein and in
the Note Indenture shall be limited, solely to the extent required, from time to
time, such that in no instance shall the maximum number of Common Shares which
the holders (singularly, together with any persons who in the determination of
such holders, together with such holders, constitute a group determined in
accordance with Rule 13d-5 of the Exchange Act) may receive in respect of any
conversion of the Convertible Notes, or exercise of the Warrants, exceed, at any
one time, an amount equal to the remainder of (i) 4.99% of the then issued and
outstanding Common Shares following such conversion or exercise minus (ii) the
number of Common Shares then owned by the holders (but exclusive of any Common
Shares deemed beneficially owned due to ownership of the Warrants) (the
foregoing being herein referred to as the "LIMITATION ON EXERCISE"); provided,
however, that if ten business days have elapsed since the occurrence of an event
under subsection 6.3 hereof and Crystallex shall not have cured such event, the
provisions of this paragraph 6.2(1) shall be null and void from and after the
date of such event. Crystallex shall, promptly upon its receipt of a notice of
exercise tendered by a holder, and upon its receipt of a notice of conversion
under the terms of the Convertible Notes, notify such holder by facsimile of the
number of Common Shares outstanding on such date and the number of Common Shares
which would be issuable to such holder if the exercise requested in such notice
of exercise or conversion notice or exercise requested in such exercise notice
were effected in full, whereupon, notwithstanding anything to the contrary set
forth in this Indenture and/or a Warrant certificate, such holder may within one
trading day of its receipt from Crystallex of notice required by this section by
facsimile revoke such conversion or exercise to the extent (in whole or in part)
that it determines that such conversion or exercise would result in such holder
owning Common Shares in excess of the Limitation on Exercise.
(2) If, at any time, the aggregate Common Shares issuable upon conversion of the
Convertible Notes and exercise of the Warrants (including the exercise of the
broker warrants issuable in connection herewith) exceeds the Conversion Limit
(as hereafter defined) then, (i) Crystallex shall deliver a notice to such
effect to the Warrantholders and the Warrant Agent ("CORPORATION NOTICE") and
(ii) Crystallex shall, at its option, within 90 days of the Corporation Notice
(a) obtain approval of Crystallex's shareholders (or an appropriate waiver from
the AMEX and/or the TSX as is necessary) of the issuance of Common Shares in
excess of the Conversion Limit in a quantity reasonably acceptable to the
holders and in all events sufficient to honour conversion in full of the
Convertible Notes and exercise in full of the Warrants or (b) redeem the
Warrants in accordance with subsection 6.4. Without limiting the generality or
the foregoing, if on the Exercise Date applicable to any conversion of
Convertible Notes or exercise of warrants, the Exercise Price (or conversion
price, in the case of the Convertible Notes) then in effect is such that the
aggregate number of Common Shares that would then be issuable upon conversion of
the entire outstanding Convertible Notes and Warrants together with any Common
Shares previously issued upon conversion or exercise thereof or in payment of
interest in accordance herewith in Common Shares, would equal or exceed the
Conversion Limit (as defined below) and Crystallex has not previously obtained
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Shareholder Approval (as defined below), then Crystallex shall issue to the
converting holder the Conversion Limit and, with respect to any Common Shares
that would be issuable to such holder in respect of the conversion notice or
exercise notice at issue in excess of the Conversion Limit, Crystallex shall
have the option to (I) redeem the Warrants in accordance with subsection 6.4 or
(II) as promptly as possible, but in no event later than 90 days after such
Exercise Date, convene a meeting of the shareholders and obtain the Shareholder
Approval (as defined below). If Crystallex fails for any reason to pay the
Redemption Price pursuant to this subsection within seven days after the
Exercise Date or fails to deliver good funds to the Warrant Agent for such
purpose, Crystallex will pay to the converting holder interest on such repayment
price at a rate of 4% per annum accruing from the Exercise Date plus any accrued
but unpaid interest thereon. If Crystallex shall have elected to obtain
Shareholder Approval and such approval is not obtained by Crystallex within 90
days, then Crystallex shall redeem the Warrants in excess of the Conversion
Limit as set forth in subsection 6.4. "SHAREHOLDER APPROVAL" means the approval
of the Company's shareholders that is required by and is obtained in accordance
with the AMEX Company Guide and the Exchange Act or the rules of the TSX.
(3) As used herein, "CONVERSION LIMIT" shall mean the lesser of (a) twenty
percent of the then issued and outstanding shares of Common Shares of Crystallex
as of the applicable date of determination required by the AMEX Company Guide
(or such other limit that is imposed upon the Corporation by AMEX), or such
greater number of Common Shares as the shareholders of Crystallex may have
previously approved, and (b) the limit then imposed upon Crystallex by the TSX.
(4) Subject to the foregoing limitations, each holder shall, at its option, have
the sole right to determine whether to exercise the Warrants.
6.3 REDEMPTION AT THE OPTION OF THE WARRANTHOLDER
Crystallex shall, at the option of a Warrantholder, redeem Warrants in
whole or in part, prior to expiry of such Warrants, upon delivery of a notice by
the Warrantholder to Crystallex and the Warrant Agent (in the manner hereinafter
provided and in accordance with and subject to the provisions hereinafter set
forth) in the event any of the following shall occur:
(a) a Registration Statement is filed with and declared effective by
the SEC but thereafter ceases to be effective at any time at which
there are Warrants outstanding hereunder and Crystallex shall fail
to file a subsequent Registration Statement with the SEC and use
its best efforts to cause such Registration Statement to be
declared effective by the SEC within 10 business days thereafter;
(b) the trading in the Common Shares shall have been suspended or cease
traded by the SEC or the AMEX (except for any suspension of trading
of limited duration solely to permit dissemination of material
information regarding Crystallex and except if, at the time there
is any suspension on the AMEX, the Common Shares are then listed
and approved for trading on either the New York Stock Exchange, the
Nasdaq SmallCap Market, or the Nasdaq National Market within two
trading days thereof);
(c) Crystallex shall fail to use its best efforts to take all actions
necessary to cause the Registration Statement to be declared and
remain effective by the SEC within 120 days after the Effective
Date (such actions including amending or supplementing the
prospectus);
(d) Crystallex shall fail to maintain a reserve of duly allotted and
authorized Common Shares that is at least equal to the number of
Common Shares which would be issuable upon conversion in full of
the full number of Convertible Notes outstanding hereunder and all
outstanding Warrants, and such failure shall remain uncured for
fifteen days after the first date on which such reserve is no
longer maintained;
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(e) Crystallex shall fail to take all steps necessary to cause the
Common Shares (including the Common Shares issuable upon conversion
of Convertible Notes and the exercise of the Warrants hereunder) to
be listed on the AMEX within 120 days after the Effective Date (or,
if earlier, on or prior to the date on which the Registration
Statement is declared effective by the SEC) or the Corporation
shall fail to take all steps necessary to thereafter to maintain
such listing on the AMEX, and such failure shall remain uncured for
fifteen days after such failure;
(f) Crystallex shall fail to issue Common Shares to the holders upon
exercise by the holders of their conversion rights hereunder or
shall fail to transfer or to cause the Warrant Agent to transfer
any certificate for Common Shares issued to the holders upon
exercise of the Warrant as and when required by this Indenture or
shall fail to remove any restrictive legend (or to withdraw any
stop transfer instructions in respect thereof) on any certificate
or any Common Shares issued to the holders of Warrants upon
exercise of Warrants as and when required by this Indenture; or
(g) Crystallex shall have its Common Shares delisted from the AMEX for
at least ten consecutive trading days and is unable to obtain a
listing on either the New York Stock Exchange, the Nasdaq SmallCap
Market or the Nasdaq National Market within such ten trading days.
6.4 REDEMPTIONS
(1) In the event Crystallex elects to redeem the Warrants under subsection 6.2
notice shall be given by or on behalf of Crystallex to the Warrantholders or in
the event Crystallex is required to redeem the Warrants in accordance with
subsection 6.3 notice shall be given by such Warrantholder to Crystallex, and in
either case notice shall be given on a date not later than ten business days
prior to the date fixed for redemption. The notice of redemption shall specify
the distinguishing letters and numbers of Warrants, the redemption date,
redemption price and places of payment.
(2) The redemption price ("REDEMPTION PRICE") of the Warrants to be redeemed
under subsections 6.2 or 6.3 shall be equal to the greater of (a) an appraised
value (as determined in accordance with this paragraph 6.4(2)) of the Warrants
on the date they are called for redemption, and (b) the number of Warrants being
redeemed multiplied by the excess of (i) the Current Market Price of the Common
Shares as at the date of the notice of redemption, over (ii) the Exercise Price.
The appraisal of the Warrants to be redeemed shall be conducted by an investment
dealer acceptable to Crystallex and the Warrant Agent with reference to the
Black Scholes model provided that, if the holders notify Crystallex within 10
business days of their receipt of such appraisal value that they disagree with
such appraisal, a different investment dealer from the one who conducted the
disputed appraisal who is mutually acceptable to each of the holders and
Crystallex shall determine such amount; further provided, however, if Crystallex
and the holders fail to appoint such mutually acceptable investment dealer
within 10 business days of the expiration of such 10 business day period, each
of Crystallex and the holders shall appoint an investment dealer, who (within 10
business days of such appointment) shall appoint a third investment dealer to
determine conclusively the amount in dispute, with the fees and disbursements of
any such investment dealer being shared equally by Crystallex and the holders.
(3) Upon notice having been given as aforesaid, the Warrants so called for
redemption shall thereupon become due and payable at the Redemption Price and on
the redemption date specified in such notice, notwithstanding anything contained
therein or herein to the contrary and from and after such redemption date, if
the monies necessary to redeem such Warrants shall have been deposited as
hereinafter provided and affidavits or other proof satisfactory to the Warrant
Agent as to the mailing of such notices shall have been delivered to it, such
Warrants shall not be considered as outstanding hereunder. If any question shall
arise as to whether notice of redemption or deposit of the redemption monies has
been given or made as provided above, such question shall be decided by the
directors whose decision shall be final and binding upon all parties and
interest.
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(4) Upon Warrants having been called for redemption, Crystallex shall deposit
with the Warrant Agent, on or before 10:00 a.m. (Vancouver time) on the
redemption date fixed in the relevant notice of redemption, such sums as may be
sufficient to pay the Redemption Price, together with the estimated charges and
expenses to be incurred in connection with such redemption. From the sums so
deposited, the Warrant Agent shall pay or cause to be paid to the
Warrantholders, upon surrender of such Warrants, the amounts to which they are
respectively entitled on redemption.
(5) In the case of Warrants called for redemption surrendered on or before the
redemption date as fixed in the applicable notice, the Warrant Agent shall pay
or cause to be paid to such Warrantholders the Redemption Price for such
Warrants to be redeemed, not later than the redemption date as fixed in the
applicable notice.
(6) Any monies deposited under this subsection 6.4 and not claimed by and paid
to Warrantholders within six years after the date of such setting aside shall,
subject to applicable law, be repaid to Crystallex by the Warrant Agent on
demand, and thereupon the Warrant Agent shall be released from all further
liability with respect to such monies and thereafter the Warrantholders in
respect of which such monies were so paid to Crystallex shall have no right in
respect thereof except to obtain payment of such monies without interest thereon
from Crystallex.
(7) If Warrantholders of any Warrants called for redemption shall, within thirty
days from the date fixed for redemption, fail to surrender any of such Warrants
or shall not within such time accept payment of the Redemption Price payable in
respect thereof or give such receipt therefor, if any, as the Warrant Agent may
require, such Redemption Price shall be set aside in trust for such
Warrantholder in accordance with subsection 10.4 and such setting aside shall
for all purposes be deemed a payment to the Warrantholder of the sums so set
aside and to that extent such Warrants shall thereafter not be considered as
outstanding hereunder and the Warrantholder shall have no further right except
to receive payment out of the monies so paid and deposited, upon surrender of
such Warrantholder's Warrants, of the Redemption Price of such Warrants without
interest thereon.
(8) All Warrants redeemed under this subsection 6.4 shall forthwith be delivered
to the Warrant Agent and shall be cancelled by it and no Warrants shall be
issued in substitution therefor.
6.5 WARRANT AGENT'S REMUNERATION AND EXPENSES
Crystallex will pay to the Warrant Agent from time to time reasonable
remuneration for its services hereunder and will, on the Warrant Agent's
request, reimburse the Warrant Agent for all reasonable expenses, disbursements
and advances made or incurred by the Warrant Agent in the administration or
execution of the trusts hereof (including reasonable compensation and
disbursements of its counsel and other advisers and assistants not regularly in
its employ), both before any default hereunder and thereafter until all duties
of the Warrant Agent hereunder have been finally and fully performed, except any
such expense, disbursement or advance that arises out of or results from
negligence, wilful misconduct or bad faith of the Warrant Agent or of persons
for whom the Warrant Agent is responsible.
6.6 PERFORMANCE OF COVENANTS BY WARRANT AGENT
If the Warrant Agent is made aware of the failure of Crystallex to
perform any of its obligations under this Indenture, the Warrant Agent may
notify the Warrantholders of such failure or may itself perform any of such
obligations capable of being performed by it, but, subject to paragraph 10.2(1),
will not be bound to do so or to notify the Warrantholders that it is so doing.
All sums expended or advanced by the Warrant Agent in so doing will be repayable
as provided in subsection 6.5. No such performance, expenditure or advance by
the Warrant Agent will relieve Crystallex of any default or of its continuing
obligations hereunder.
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SECTION 7 - ENFORCEMENT
7.1 WARRANTHOLDERS MAY NOT XXX
Subject to the provisions of subsection 8.11, no holder of any Warrant
shall have any right to institute any action or proceeding against Crystallex in
relation to the Warrants, unless:
(a) such holder shall previously have given to the Warrant Agent
written notice of the nature of such action or proceeding;
(b) the holders of at least 10% of the Warrants shall have made written
request to the Warrant Agent and shall have afforded to it
reasonable opportunities either itself to proceed to exercise the
powers hereinbefore granted or to institute an action, suit or
proceeding in its own name for such purpose;
(c) such Warrantholders shall have offered to the Warrant Agent, when
so requested by the Warrant Agent, sufficient funds and security
and indemnity satisfactory to it against the costs, expenses and
liabilities to be incurred therein or thereby; and
(d) the Warrant Agent shall have failed to act within a reasonable time
after such notification, request and offer of indemnity; and such
notification, request and offer of indemnity are hereby declared in
every such case, at the option of the Warrant Agent, to be
conditions precedent to any such proceeding or for any other remedy
hereunder by or on behalf of the holder of any Warrants.
7.2 WARRANT AGENT MAY INSTITUTE ALL PROCEEDINGS
(1) The Warrant Agent shall also have the power at any time and from time to
time to institute and to maintain such suits and proceedings as it may be
advised shall be necessary or advisable to preserve and protect its interests
and the interests of the Warrantholders.
(2) Any such suit or proceeding instituted by the Warrant Agent may be brought
in the name of the Warrant Agent as trustee of an express trust, and any
recovery of judgment shall be for the rateable benefit of the holders of the
Warrants subject to the provisions of this Indenture. In any proceeding brought
by the Warrant Agent (and also any proceeding in which a declaratory judgment of
a court may be sought as to the interpretation or construction of any provision
of this Indenture, to which the Warrant Agent shall be a party) the Warrant
Agent shall be held to represent all the holders of the Warrants, and it shall
not be necessary to make any holders of the Warrants parties to any such
proceeding.
7.3 IMMUNITY OF SHAREHOLDERS, ETC.
The Warrant Agent and, by the acceptance of the Warrant Certificates
and as part of the consideration for the issue of the Warrants, the
Warrantholders, hereby waive and release any right, cause of action or remedy
now or hereafter existing in any jurisdiction against any person in his capacity
as an incorporator or any past, present or future shareholder or other security
holder, director, officer, employee or agent of Crystallex for the creation and
issue of the Common Shares pursuant to any Warrant or on any covenant,
agreement, representation or warranty by Crystallex herein or in the Warrant
Certificates.
7.4 LIMITATION OF LIABILITY
The obligations hereunder are not personally binding upon, nor shall
resort hereunder be had to, the directors or shareholders of Crystallex or any
of the past, present or future directors or shareholders of Crystallex or any of
the past, present or future officers; employees or agents of Crystallex, but
only the property of Crystallex shall be bound in respect hereof.
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SECTION 8 - MEETINGS OF WARRANTHOLDERS
8.1 RIGHT TO CONVENE MEETINGS
(1) The Warrant Agent may at any time and from time to time convene a meeting of
the Warrantholders, and will do so on receipt of a written request of Crystallex
or a Warrantholders' Request and on being indemnified and funded to its
reasonable satisfaction by Crystallex or by one or more of the Warrantholders
signing such Warrantholders' Request against the costs which it may incur in
connection with calling and holding the meeting.
(2) If the Warrant Agent fails, within five business days after receipt of such
written request of Crystallex or Warrantholders' Request and indemnity, to give
notice convening a meeting, Crystallex or any of such Warrantholders, as the
case may be, may convene such meeting.
(3) Every such meeting will be held in Vancouver, British Columbia or such other
place as is approved or determined by the Warrant Agent and Crystallex. However,
if the meeting is convened by Crystallex or a Warrantholder as a result of the
Warrant Agent's failure or refusal to convene such meeting, the meeting must be
held in Vancouver.
8.2 NOTICE
(1) At least 10 business days notice of any meeting must be given to the
Warrantholders, to the Warrant Agent (unless the meeting has been called by it)
and to Crystallex (unless the meeting has been called by it).
(2) The notice must state the time when and the place where the meeting is to be
held and describe (with sufficient detail to permit a Warrantholder to make a
reasoned decision with respect to the matters for consideration) the general
nature of the business to be transacted thereat, but it will not be necessary
for the notice to set out the terms of any resolution to be proposed or any of
the provisions of this Section.
8.3 CHAIRMAN
Some person (who need not be a Warrantholder) designated in writing by
the Warrant Agent will be chairman of the meeting or, if no person is so
designated or the person so designated is not present within 15 minutes after
the time fixed for the holding of the meeting, the Warrantholders present in
person or by proxy may choose some person present to be chairman.
8.4 QUORUM
(1) Subject to the provisions of subsection 8.12, at any meeting of
Warrantholders a quorum will consist of one or more Warrantholders present in
person or by proxy at the commencement of business holding in the aggregate not
less than 25% of the total number of Warrants then outstanding.
(2) If a quorum of Warrantholders is not present within 30 minutes after the
time fixed for holding a meeting, the meeting, if summoned by Warrantholders or
on a Warrantholders' Request, will be dissolved, but, subject to subsection
8.12, in any other case will be adjourned to the seventh calendar day following
the meeting, at the same time of day and place, unless such day is not a
business day, in which case it will be adjourned to the business day next
following the seventh calendar day and no notice of the adjournment need be
given.
(3) At the adjourned meeting the Warrantholders present in person or by proxy
will form a quorum and may transact any business for which the meeting was
originally convened notwithstanding the number of Warrants that they hold.
8.5 POWER TO ADJOURN
The chairman of a meeting at which a quorum of the Warrantholders is
present may, with the consent of the meeting, adjourn the meeting, and no notice
of such adjournment need be given except as the meeting prescribes.
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8.6 SHOW OF HANDS
Every question submitted to a meeting, other than an Extraordinary
Resolution, will be decided in the first place by a majority of the votes given
on a show of hands and, unless a poll is duly demanded as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority will be conclusive evidence of the fact.
8.7 POLL
(1) On every Extraordinary Resolution, and on every other question submitted to
a meeting on which a poll is directed by the chairman or requested by one or
more Warrantholders acting in person or by proxy, a poll will be taken in such
manner as the chairman directs.
(2) Questions other than those required to be determined by Extraordinary
Resolution will be decided by a majority of the votes cast on the poll.
8.8 VOTING
(1) On a show of hands each person present and entitled to vote, whether as a
Warrantholder or as proxy for one or more absent Warrantholders, or both, will
have one vote, and on a poll each Warrantholder present in person or represented
by a proxy duly appointed by instrument in writing will be entitled to one vote
in respect of each Warrant held by such holder.
(2) A proxy need not be a Warrantholder.
8.9 REGULATIONS
(1) The Warrant Agent, or Crystallex with the approval of the Warrant Agent, may
from time to time make or vary such regulations as it thinks fit:
(a) for the form of instrument appointing a proxy, the manner in which
it must be executed, and verification of the authority of a person
who executes it on behalf of a Warrantholder;
(b) governing the places at which and the times by which instruments
appointing proxies must be deposited;
(c) for the deposit of instruments appointing proxies at some approved
place or places other than the place at which the meeting is to be
held and enabling particulars of such voting instruments appointing
proxies to be sent by mail, facsimile or other means of prepaid,
transmitted, recorded communication before the meeting to
Crystallex or to the Warrant Agent at the place where the meeting
is to be held and for voting pursuant to instruments appointing
proxies so deposited as though the instruments themselves were
produced at the meeting; and
(d) generally for the calling of meetings of Warrantholders and the
conduct of business thereof.
(2) Any regulations so made will be binding and effective and the votes given in
accordance therewith will be valid and will be counted.
(3) Except as such regulations provide, the only persons who will be recognized
at a meeting as the holders of any Warrants, or as entitled to vote or, subject
to section 8.10, be present at the meeting in respect thereof, will be the
registered holders of such Warrants or their validly appointed proxies.
8.10 CRYSTALLEX AND WARRANT AGENT MAY BE REPRESENTED
Crystallex and the Warrant Agent by their respective employees,
officers or directors, and the counsel of Crystallex and the Warrant Agent may
attend any meeting of Warrantholders, but will have no vote as such.
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8.11 POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION
In addition to all other powers conferred on them by the other
provisions of this Indenture or by law, the Warrantholders at a meeting will
have the power, exercisable from time to time by Extraordinary Resolution and
subject to the prior consent of the TSX:
(a) subject to the agreement of Crystallex to assent to or sanction any
amendment, modification, abrogation, alteration, compromise or
arrangement of any right of the Warrantholders or of the Warrant
Agent (subject to the prior written consent of the Warrant Agent)
in its capacity as Warrant Agent under the Indenture or on behalf
of the Warrantholders against Crystallex, whether such right arises
under this Indenture or otherwise and to authorize the Warrant
Agent to concur in and execute any indenture supplemental hereto in
connection therewith;
(b) to amend, alter or repeal any Extraordinary Resolution previously
passed;
(c) to direct or authorize the Warrant Agent to enforce any obligation
of Crystallex under this Indenture or to enforce any right of the
Warrantholders in any manner specified in the Extraordinary
Resolution;
(d) to refrain from enforcing any obligation or right referred to in
paragraph (c);
(e) to waive and direct the Warrant Agent to waive any default by
Crystallex in complying with any provision of this Indenture,
either unconditionally or on any condition specified in the
Extraordinary Resolution;
(f) to appoint a committee with power and authority to exercise, and to
direct the Warrant Agent to exercise, on behalf of the
Warrantholders, such of the powers of the Warrantholders as are
exercisable by Extraordinary Resolution;
(g) to restrain any Warrantholder from taking or instituting any suit,
action or proceeding against Crystallex for the enforcement of any
obligation of Crystallex under this Indenture or to enforce any
right of the Warrantholders;
(h) to direct any Warrantholder who, as such, has brought any suit,
action or proceeding, to stay or discontinue or otherwise deal
therewith on payment of the costs, charges and expenses reasonably
and properly incurred by him in connection therewith;
(i) from time to time and at any time to remove the Warrant Agent and
appoint a successor; and
(j) to assent to any compromise or arrangement with any creditor or
creditors or any class or classes of creditors, whether secured or
otherwise, and with holders of any shares or other securities of
Crystallex.
8.12 MEANING OF "EXTRAORDINARY RESOLUTION"
(1) The expression "EXTRAORDINARY RESOLUTION" when used in this Indenture means,
subject to the provisions of this section and of subsections 8.15 and 8.16, a
resolution proposed at a meeting of Warrantholders duly convened for that
purpose and held in accordance with the provisions of this Section at which
there are present in person or by proxy Warrantholders holding in the aggregate
more than 50% of the total number of Warrants then outstanding and passed by the
affirmative votes of Warrantholders who hold in the aggregate not less than 66?%
of the total number of Warrants represented at the meeting and voted on the poll
on the resolution.
(2) If, at a meeting called for the purpose of passing an Extraordinary
Resolution, the quorum required by paragraph 8.12(1) is not present within 30
minutes after the time appointed for the meeting, the meeting, if convened by
Warrantholders or on a Warrantholders' Request, will be dissolved, but in any
other case will stand adjourned to such day, being not less than seven calendar
days or more than 30 calendar days later, and to such place and time, as is
appointed by the chairman.
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(3) Not less than seven calendar days' notice must be given to the
Warrantholders of the time and place of such adjourned meeting.
(4) The notice must state that at the adjourned meeting the Warrantholders
present in person or by proxy will form a quorum but it will not be necessary to
set forth the purposes for which the meeting was originally called or any other
particulars.
(5) At the adjourned meeting the Warrantholders present in person or by proxy
will form a quorum and may transact any business for which the meeting was
originally convened, and a resolution proposed at such adjourned meeting and
passed by the requisite vote as provided in paragraph 8.12(1) will be an
Extraordinary Resolution within the meaning of this Indenture notwithstanding
that Warrantholders holding in the aggregate 50% of the total number of Warrants
outstanding may not be present.
(6) Votes on an Extraordinary Resolution must always be given on a poll and no
demand for a poll on an Extraordinary Resolution will be necessary.
8.13 POWERS CUMULATIVE
Any one or more of the powers, and any combination of the powers, in
this Indenture stated to be exercisable by the Warrantholders by Extraordinary
Resolution or otherwise, may be exercised from time to time, and the exercise of
any one or more of such powers or any combination of such powers from time to
time will not prevent the Warrantholders from exercising such power or powers or
combination of powers thereafter from time to time.
8.14 MINUTES
Minutes of all resolutions passed and proceedings taken at every
meeting of the Warrantholders will be made and duly entered in books from time
to time provided for such purpose by the Warrant Agent at the expense of
Crystallex, and any such minutes, if signed by the chairman of the meeting at
which such resolutions were passed or such proceedings were taken, will be prima
facie evidence of the matters therein stated, and, until the contrary is proved,
every such meeting in respect of the proceedings of which minutes have been so
made, entered and signed will be deemed to have been duly convened and held, and
all resolutions passed and proceedings taken thereat to have been duly passed
and taken.
8.15 INSTRUMENTS IN WRITING
Any action that may be taken and any power that may be exercised by
Warrantholders at a meeting held as provided in this section by way of an
Extraordinary Resolution may also be taken and exercised by Warrantholders who
hold in the aggregate not less than 66?% of the total number of Warrants at the
time outstanding, by their signing, each in person or by attorney duly appointed
in writing, an instrument in writing in one or more counterparts, and the
expression "Extraordinary Resolution" when used in this Indenture includes a
resolution embodied in an instrument so signed.
8.16 BINDING EFFECT OF RESOLUTIONS
Every resolution and every Extraordinary Resolution passed in
accordance with the provisions of this Section at a meeting of Warrantholders
will be binding on all Warrantholders, whether present at or absent from the
meeting and whether voting for or against the resolution or abstaining, and
every instrument in writing signed by Warrantholders in accordance with
subsection 8.15 will be binding on all Warrantholders, whether signatories
thereto or not, and every Warrantholder and the Warrant Agent (subject to the
provisions for its indemnity herein contained) will be bound to give effect
accordingly to every such resolution and instrument in writing.
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8.17 HOLDINGS BY CRYSTALLEX AND SUBSIDIARIES DISREGARDED
In determining whether Warrantholders holding the required total number
of Warrants are present in person or by proxy for the purpose of constituting a
quorum, or have voted or consented to a resolution, Extraordinary Resolution,
consent, waiver, Warrantholders' Request or other action under this Indenture, a
Warrant held by Crystallex or by any Affiliate of Crystallex will be deemed to
be not outstanding. Crystallex shall provide, upon request by the Warrant Agent,
a certificate of Crystallex stating the number and exact registration of any
Warrant(s) held by Crystallex or by any Affiliate of Crystallex.
SECTION 9 - SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS
9.1 PROVISION FOR SUPPLEMENTAL INDENTURES FOR CERTAIN PURPOSES
From time to time Crystallex (when authorized by the directors) and the
Warrant Agent may, subject to the provisions hereof, and will when so directed
hereby, execute and deliver by their proper officers indentures or instruments
supplemental hereto, which thereafter will form part hereof, for any or all of
the following purposes:
(a) setting forth any adjustments resulting from the application of the
provisions of section 5;
(b) adding hereto such additional covenants and enforcement provisions
as in the opinion of counsel are necessary or advisable, and are
not in the opinion of the Warrant Agent relying upon the opinion of
counsel prejudicial to the rights or interests of the
Warrantholders as a group;
(c) giving effect to any Extraordinary Resolution passed as provided in
section 8;
(d) making such provisions not inconsistent with this Indenture as are
necessary or desirable with respect to matters or questions arising
hereunder, and are not, in the opinion of counsel to the Warrant
Agent, prejudicial to the rights or interests of the Warrantholders
as a group;
(e) adding to, deleting or altering the provisions hereof in respect of
the transfer of Warrants or the exchange of Warrant Certificates,
and making any modification in the form of the Warrant Certificates
that does not affect the substance thereof;
(f) modifying any provision of this Indenture or relieving Crystallex
from any obligation, condition or restriction herein contained,
except that no such modification or relief will be or become
operative or effective if, in the opinion of counsel to the Warrant
Agent, it would impair any of the rights or interests of the
Warrantholders or of the Warrant Agent, and the Warrant Agent may
in its uncontrolled discretion decline to enter into any such
supplemental indenture which in its opinion will not afford
adequate protection to the Warrant Agent when it becomes operative;
and
(g) for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification of any
ambiguity, defective or inconsistent provision, error or omission
herein, if in the opinion of the Warrant Agent, the rights of the
Warrant Agent and of the Warrantholders, as a group, are not
prejudiced thereby.
9.2 SUCCESSOR CORPORATIONS
In the case of the consolidation, amalgamation, arrangement, merger or
transfer of the undertaking or assets of Crystallex as an entirety, or
substantially as an entirety, to another corporation, the successor corporation
resulting from such consolidation, amalgamation, arrangement, merger or transfer
(if not Crystallex) will be bound by the provisions hereof and for the due and
punctual performance and observance of each and every covenant and obligation
contained in this Indenture to be performed by Crystallex and, if requested by
the Warrant Agent, will by supplemental indenture in form satisfactory to
counsel to the Warrant Agent and executed and delivered to the Warrant Agent,
assume such obligations expressly.
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SECTION 10 - CONCERNING THE WARRANT AGENT
10.1 TRUST INDENTURE LEGISLATION
(1) If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with a mandatory requirement of Applicable Legislation, the
mandatory requirement will prevail.
(2) Crystallex and the Warrant Agent each will at all times in relation to this:
Indenture and any action to be taken hereunder observe and comply with and be
entitled to the benefits of Applicable Legislation.
10.2 RIGHTS AND DUTIES OF WARRANT AGENT
(1) In the exercise of the rights and duties prescribed or conferred by the
terms of this Indenture, the Warrant Agent will act honestly and in good faith
with a view to the best interests of the Warrantholders, and will exercise that
degree of care, diligence and skill that a reasonably prudent warrant trustee
would exercise in comparable circumstances. The Warrant Agent shall not be bound
to give any notice or do or take any act, action or proceeding by virtue of the
powers conferred on it hereby unless and until it shall have been required so to
do under the terms hereof; nor shall the Warrant Agent be required to take
notice of any default hereunder, unless and until notified in writing of such
default, which notice shall distinctly specify the default desired to be brought
to the attention of the Warrant Agent and in the absence of any such notice the
Warrant Agent may for all purposes of this Indenture conclusively assume that no
default has been made in the observance or performance of any of the
representations, warranties, covenants, agreements or conditions contained
therein. Any such notice shall in no way limit any discretion herein given to
the Warrant Agent to determine whether or not the Warrant Agent shall take
action with respect to any default.
(2) No provision of this Indenture will be construed to relieve the Warrant
Agent from liability for its own negligent act, negligent failure to act, wilful
misconduct or bad faith.
(3) The obligation of the Warrant Agent to commence or continue any act, action
or proceeding for the purpose of enforcing any right of the Warrant Agent or the
Warrantholders hereunder is on the condition that, when required by notice to
the Warrantholders by the Warrant Agent, the Warrant Agent is furnished by one
or more Warrantholders with sufficient funds to commence or continue such act,
action or proceeding and indemnity reasonably satisfactory to the Warrant Agent
to protect and hold it harmless against the costs, charges and expenses and
liabilities to be incurred thereby and any loss and damage it may suffer by
reason thereof.
(4) No provision of this Indenture will require the Warrant Agent to expend or
risk its own funds or otherwise incur financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers unless it is
so indemnified.
(5) The Warrant Agent may, before commencing or at any time during the
continuance of any such act, action or proceeding, require the Warrantholders at
whose instance it is acting to deposit with the Warrant Agent the Warrant
Certificates held by them, for which certificates the Warrant Agent will issue
receipts.
(6) Every provision of this Indenture that relieves the Warrant Agent of
liability or entitles it to rely on any evidence submitted to it is subject to
the provisions of Applicable Legislation, of this subsection and of subsection
10.3.
10.3 EVIDENCE, EXPERTS AND ADVISERS
(1) In addition to the reports, certificates, opinions and other evidence
required by this Indenture, Crystallex will furnish to the Warrant Agent such
additional evidence of compliance with any provision hereof, and in such form,
as is prescribed by Applicable Legislation or as the Warrant Agent reasonably
requires by written notice to Crystallex.
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(2) In the exercise of any right or duty hereunder the Warrant Agent, if it is
acting in good faith, may act and rely, as to the truth of any statement or the
accuracy of any opinion expressed therein, on any statutory declaration,
opinion, report, certificate or other evidence furnished to the Warrant Agent
pursuant to a provision hereof or of Applicable Legislation or pursuant to a
request of the Warrant Agent, if such evidence complies with Applicable
Legislation and the Warrant Agent examines such evidence and determines that it
complies with the applicable requirements of this Indenture.
(3) Whenever Applicable Legislation requires that evidence referred to in
paragraph 10.3(1) be in the form of a statutory declaration, the Warrant Agent
may accept such statutory declaration in lieu of a certificate of Crystallex
required by any provision hereof.
(4) Any such statutory declaration may be made by any director or officer of
Crystallex.
(5) The Warrant Agent may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, letter, facsimile, telegram, cablegram or other paper
or document believed by it to be genuine and to have been signed, sent or
presented by or on behalf of the proper party or parties.
(6) Proof of the execution of any document or instrument in writing, including a
Warrantholders' Request, by a Warrantholder may be made by the certificate of a
notary public, or other officer with similar powers, that the person signing
such instrument acknowledged to him the execution thereof, or by an affidavit of
a witness to such execution, or in any other manner that the Warrant Agent
considers adequate.
(7) The Warrant Agent may employ or retain such counsel, accountants, engineers,
appraisers, or other experts or advisors as it reasonably requires for the
purpose of determining and discharging its duties hereunder and may pay
reasonable remuneration for all services so performed by any of them, without
taxation of costs of any counsel, and will not be responsible for any misconduct
or negligence on the part of any of them who has been selected with due care by
the Warrant Agent. Any remuneration so paid by the Warrant Agent shall be repaid
to the Warrant Agent in accordance with subsection 6.5.
(8) The Warrant Agent may act and shall be protected in acting in good faith on
the opinion or advice of or information obtained from any counsel, accountant or
other expert or advisor, whether retained or employed by Crystallex or by the
Warrant Agent, in relation to any matter arising in the administration of the
trusts hereof.
10.4 DOCUMENTS, MONEY, ETC. HELD BY WARRANT AUNT
(1) The Warrant Agent may retain any cash balance held in connection with this
Indenture and may, but need not, hold the same in its deposit department or the
deposit department of one of its Affiliates; but the Warrant Agent and its
Affiliates shall not be liable to account for any profit to Crystallex or any
other person or entity other than at a rate, if any, established from time to
time by the Warrant Agent or its Affiliates.
(2) Upon receipt of a direction from Crystallex, the Warrant Agent shall invest
any moneys held by it in Authorized Investments in its name in accordance with
such direction. Any direction from Crystallex to the Warrant Agent shall be in
writing and shall be provided to the Warrant Agent no later than 9:00 a.m.
E.S.T. on the day on which the investment is to be made. Any such direction
received by the Warrant Agent after 9:00 a.m. E.S.T. or received on a
non-business day, shall be deemed to have been given prior to 9:00 a.m. E.S.T.
next business day. For the purpose hereof, "Authorized Investments" means short
term interest bearing or discount debt obligations issued or guaranteed by the
Government of Canada or a Province or a Canadian chartered bank (which may
include an Affiliate or related party of the Warrant Agent) provided that such
obligation is rated at least RI (middle) by DBRS Inc. or an equivalent rating
service. In the event that the Warrant Agent does not receive a direction or
only a partial direction, the Warrant Agent may hold cash balances constituting
part or all of the escrow fund and may, but need not, invest same in its deposit
department or the deposit department of one of its Affiliates; but the Warrant
Agent and its Affiliates shall not be liable to account for any profit to any
parties to this Indenture or to any person or entity other than at a rate, if
any, established from time to time by the Warrant Agent or one of its
Affiliates.
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(3) For the purposes of this subsection 10.4, "AFFILIATE" means affiliated
companies within the meaning of the Business Corporations Act (Ontario)
("OBCA"); and includes Canadian Imperial Bank of Commerce, CIBC Mellon Global
Securities Company and Mellon Bank, N.A. and each of their affiliates within the
meaning of the OBCA.
10.5 ACTION BY WARRANT AGENT TO PROTECT INTERESTS
The Warrant Agent will have power to institute and to maintain such
actions and proceedings as it considers necessary or expedient to protect or
enforce its interests and the interests of the Warrantholders.
10.6 WARRANT AGENT NOT REQUIRED TO GIVE SECURITY
The Warrant Agent will not be required to give any bond or security in
respect of the performance of the agency created hereby, the execution of the
trusts and powers of this Indenture or otherwise in respect of the premises. The
Trustee and any person related to the Trustee will not be appointed a receiver
or receiver and manager or liquidator of all or any part of the assets or
undertaking of the Corporation.
10.7 PROTECTION OF WARRANT AGENT
(1) By way of supplement to the provisions of any law for the time being
relating to trustees or agents, it is expressly declared and agreed that:
(a) the Warrant Agent will not be liable for or by reason of, or
required to substantiate, any statement of fact or recital in this
Indenture or in the Warrant Certificates (except the representation
contained in subsection 10.9 or in the certificate of the Warrant
Agent on the Warrant Certificates), but all such statements or
recitals are and will be deemed to be made by Crystallex;
(b) nothing herein contained will impose on the Warrant Agent any
obligation to see to, or to require evidence of, the registration
or filing (or renewal thereof) of this Indenture or any instrument
ancillary or supplemental hereto;
(c) the Warrant Agent will not be bound to give notice to any person of
the execution hereof;
(d) the Warrant Agent will not incur any liability or responsibility
whatever or be in any way responsible for the consequence of any
breach by Crystallex of any obligation herein contained or of any
act of any director, officer, employee or agent of Crystallex;
(e) the Warrant Agent, in its personal or any other capacity, in the
ordinary course of business, may buy, lend upon and deal in shares
in the capital of Crystallex and in the Warrants and generally may
contract and enter into financial transactions with Crystallex or
any related corporation without being liable to account for any
profit made thereby;
(f) the Warrant Agent shall incur no liability with respect to the
delivery or non-delivery of any certificate or certificates or
cheque or cheques whether delivered by hand, mail, or any other
means; and
(g) the Warrant Agent shall not be liable or accountable for any loss
or damage whatsoever to any person caused by the performance or
failure to perform by it of its responsibilities under this
Indenture save only to the extent that such loss or damage is
attributable to the negligence, wilful misconduct or bad faith of
the Warrant Agent.
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(2) Crystallex indemnifies the Warrant Agent and its directors, officers and
employees and saves them harmless from all liabilities, losses, claims, demands,
suits, damages, costs and actions which may be brought against or suffered by it
arising out of or connected with the performance by it of its duties hereunder,
including any all reasonable legal fees and disbursements of whatever kind or
nature, except to the extent that such liabilities, suits, damages, costs and
actions are attributable to the negligence, wilful misconduct or bad faith of
the Warrant Agent. This provision shall survive the resignation or removal of
the Warrant Agent or the termination of this Indenture.
10.8 REPLACEMENT OF WARRANT AGENT
(1) The Warrant Agent may resign its trust hereunder and be discharged from all
further duties and liabilities hereunder, except as provided in this section, by
giving to Crystallex and the Warrantholders not less than 30 business days
notice in writing or, if a new Warrant Agent has been appointed, such shorter
notice as Crystallex accepts as sufficient.
(2) The Warrantholders by Extraordinary Resolution may at any time remove the
Warrant Agent and appoint a new Warrant Agent.
(3) If the Warrant Agent so resigns or is so removed or is dissolved, becomes
bankrupt, goes into liquidation or otherwise becomes incapable of acting
hereunder, Crystallex will forthwith appoint a new Warrant Agent unless a new
Warrant Agent has already been appointed by the Warrantholders.
(4) Failing such appointment by Crystallex, the retiring Warrant Agent or any
Warrantholder may apply to the Ontario Court of Justice (General Division), at
Crystallex's expense, on such notice as the Court directs, for the appointment
of a new Warrant Agent.
(5) Any new Warrant Agent so appointed by Crystallex or by the Court will be
subject to removal as aforesaid by the Warrantholders and by Crystallex.
(6) Any new Warrant Agent appointed under any provision of this section must be
a corporation authorized to carry on the business of a trust company in Ontario
and, if required by the Applicable Legislation of any other province, in such
other province.
(7) On any such appointment the new Warrant Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
herein as Warrant Agent without any further assurance, conveyance, act or deed,
but there will be immediately executed, at the expense of Crystallex, all such
conveyances or other instruments as, in the opinion of counsel, are necessary or
advisable for the purpose of assuring such powers, rights, duties and
responsibilities to the new Warrant Agent.
(8) On the appointment of a new Warrant Agent, Crystallex will promptly give
notice thereof to the Warrantholders.
(9) A corporation into or with which the Warrant Agent is merged or consolidated
or amalgamated, or a corporation succeeding to the trust business of the Warrant
Agent, will be the successor to the Warrant Agent hereunder without any further
act on its part or on the part of any party hereto if such corporation would be
eligible for appointment as a new Warrant Agent under paragraph 10.8(6).
(10) A Warrant Certificate certified but not delivered by a predecessor Warrant
Agent may be delivered by the new or successor Warrant Agent in the name of the
predecessor Warrant Agent or successor Warrant Agent.
10.9 CONFLICT OF INTEREST
The Warrant Agent represents to Crystallex that at the time of the
execution and delivery hereof no material conflict of interest exists between
its role as a fiduciary hereunder and its role in any other capacity and if a
material conflict of interest arises hereafter it will, within 30 business days
after ascertaining that it has such material conflict of interest, either
eliminate the conflict of interest or resign its trust hereunder. If any such
material conflict of interest exists or hereafter shall exist, the validity and
enforceability of this Indenture and the Warrants shall not be affected in any
manner whatsoever by reason thereof.
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10.10 ACCEPTANCE OF TRUSTS
The Warrant Agent hereby accepts the trusts in this Indenture declared
and provided for and agrees to perform them on the terms and conditions herein
set forth.
SECTION 11 - GENERAL
11.1 NOTICE TO CRYSTALLEX AND WARRANT AGENT
(1) Unless herein otherwise expressly provided, a notice to be given hereunder
to Crystallex or the Warrant Agent will be validly given if delivered or if sent
by first class letter, postage prepaid, or if sent by facsimile transmission
(receipt of such transmission is confirmed in writing):
(a) If to Crystallex:
Crystallex International Corporation
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. Xxxx X. Xxxxxxxxxxx
President and Chief Executive Officer
Facsimile: 416.203.0099
with a copy (which shall not constitute notice) to:
XxXxxxxx Xxxxx XXX
Xxxxx 0000
Xxxxx Xxxxx, Xxxxx Bank Plaza
Toronto, Ontario
M5J 2J7
Attention: Xxxx X. Xxxxxxx
Facsimile: 416.865.7048
(b) If to the Warrant Agent:
CIBC Mellon Trust Company
Suite 1600
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Attention: Manager, Corporate Trust
Facsimile: 604.688.4301
and any such notice delivered or sent in accordance with the foregoing will be
deemed to have been received on the date of delivery or facsimile transmission
or, if mailed, on the fifth business day following the day of the mailing of the
notice.
(2) Crystallex or the Warrant Agent, as the case may be, may from time to time
notify the other in the manner provided in subsection (1) of a change of address
which, from the effective date of such notice and until changed by like notice,
will be the address of Crystallex or the Warrant Agent, as the case may be, for
all purposes of this Indenture.
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(3) If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving Canadian postal employees, a notice to be given to the
Warrant Agent or to Crystallex hereunder could reasonably be considered unlikely
to reach or likely to be delayed in reaching its destination, the notice will be
valid and effective only if it is delivered to an officer of the party to which
it is addressed or if it is delivered to such party at the appropriate address
provided in paragraph (1) by confirmed facsimile transmission.
11.2 NOTICE TO WARRANTHOLDERS
(1) Unless herein otherwise expressly provided, a notice to be given hereunder
to Warrantholders will be deemed to be validly given if the notice is sent by
ordinary surface or air mail, postage prepaid, addressed to the Warrantholders
or delivered (or so mailed to certain Warrantholders and so delivered to the
other Warrantholders) at their respective addresses appearing on any of the
registers of holders described in subsection 3.1, with copies (which shall not
constitute notice) to:
Global Capital Advisors, LLC
000 Xxxx Xxxxxx
Xxxxxxxxxxxx, XXXX
00000
Attention: Xxxxx Xxxxxx
Facsimile: 340.719.3974
provided, however, that if, by reason of a strike, lockout or other work
stoppage, actual or threatened, involving Canadian postal employers, the notice
could reasonably be considered unlikely to reach or likely to be delayed in
reaching its destination, the notice will be valid and effective only if it is
so delivered or is given by publication twice in the Report on Business section
in the national edition of The Globe and Mail newspaper and the U.S. edition of
The Wall Street Journal.
(2) A notice so given by mail or so delivered will be deemed to have been given
on the fifth business day after it has been mailed or on the day which it has
been delivered, as the case may be, and a notice so given by publication will be
deemed to have been given on the day on which it has been published as required.
In determining under any provision hereof the date when notice of a meeting or
other event must be given, the date of giving notice will be included and the
date of the meeting or other event will be excluded. Accidental error or
omission in giving notice or accidental failure to mail notice to any
Warrantholder will not invalidate any action or proceeding founded thereon.
11.3 SATISFACTION AND DISCHARGE OF INDENTURE
On the earlier of:
(a) the date by which there has been delivered to the Warrant Agent for
exercise or surrender for cancellation all Warrant Certificates
theretofore certified hereunder; or
(b) the Expiry Time;
and if all certificates representing Common Shares required to be issued in
compliance with the provisions hereof have been issued and delivered hereunder,
this Indenture will cease to be of further effect and, on demand of and at the
cost and expense of Crystallex and on delivery to the Warrant Agent of a
certificate of Crystallex stating that all conditions precedent to the
satisfaction and discharge of this Indenture have been complied with and on
payment to the Warrant Agent of the fees and other remuneration payable to the
Warrant Agent, the Warrant Agent will execute proper instruments acknowledging
satisfaction of and discharging this Indenture.
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11.4 SOLE BENEFIT OF PARTIES AND WARRANTHOLDERS
Nothing in this indenture or the Warrant Certificates, expressed or
implied, will give or be construed to give to any person other than the parties
hereto and the Warrantholders, as the case may be, any legal or equitable right,
remedy or claim under this Indenture or the Warrant Certificates, or under any
covenant or provision herein or therein contained, all such covenants and
provisions being for the sole benefit of the parties hereto and the
Warrantholders.
11.5 CONSENT TO JURISDICTION AND SERVICE OF PROCESS
Crystallex agrees that any legal suit, action or proceeding brought by
any party to enforce any rights under or with respect to this Indenture, the
Warrants or the Convertible Notes may be instituted in any state or federal
court in New York City and waives to the fullest extent permitted by law any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding and irrevocably submits to the non-exclusive
jurisdiction of any such court in any such suit, action or proceeding.
Crystallex hereby irrevocably designates and appoints Prentice Hall Corporate
Service ("PH") as Crystallex's authorized agents to receive and forward on its
behalf service of any and all process which may be served in any such suit,
action or proceeding in any such court and agrees that service of process upon
PH (or any successor) at its office at 00 Xxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (or such other address in the Borough of Manhattan, New York City, as
Crystallex may designate by written notice to the Trustee) and written notice of
such service to Crystallex marked or delivered to PH at its address set forth
herein shall be deemed in every respect effective service of process upon
Crystallex in any such suit, action or proceeding and shall be taken and held to
be valid personal service upon Crystallex. Nothing in this subsection 11.5 shall
affect the right of any party hereto to serve process in any manner permitted by
law or limit the right of any party hereto to bring proceedings against
Crystallex in the courts of any jurisdiction or jurisdictions. Crystallex
further agrees to take any and all action, including the execution and filing of
any and all such documents and instruments as may be necessary to continue such
designation and appointment of PH in full force and effect so long as this
Indenture or any of the Warrants or Convertible Notes shall be outstanding. To
the extent that Crystallex has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, executor
or otherwise) with respect to itself or its property, Crystallex hereby
irrevocably waives such immunity in respect of its obligations under this
Indenture and the Warrants or Convertible Notes, to the extent permitted by law.
Crystallex covenants to forthwith make all appropriate arrangements to appoint
PH for the purposes of the foregoing. If Crystallex and PH are unable to agree
on terms for the appointment of PH in such capacity within 30 days, Crystallex
shall forthwith make arrangements for the appointment of another agent
reasonably acceptable to the Investors for such purposes.
11.6 CONVERSION OF CURRENCY
(1) Crystallex shall indemnify the holders against, and the holders shall have
an additional legal claim for, any loss or damage which, consequent upon any
judgment being obtained or enforced in respect of the non-payment by Crystallex
of any amount due under or pursuant to this Indenture arises from any variation
in rates of exchange between United States dollars and the currency in which
judgment is obtained or enforced between the date such amount became due (or the
date of the said judgment being obtained as the case may be) and the date of
actual payment of such amount. The indemnity contained in this section 11.6
shall apply irrespective of any indulgence granted to Crystallex from time to
time and shall continue in full force and effect notwithstanding any payment by
or on behalf of Crystallex and any amount due from Crystallex under this section
11.6 will be due as a separate payment and shall not be affected by any judgment
being obtained for any other sums due under or in respect of this Indenture.
(2) The term "rate(s) of exchange" shall mean the rate, quoted at noon for
transactions in excess of $1,000,000, at which the Holder is able or would have
been able on the relevant date to purchase at Xxxxxx Guaranty Trust Company of
New York at its main branch in New York City, United States dollars with the
judgment currency other than United States dollars referred to in paragraph (1)
above and includes any premiums and costs of exchange payable.
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11.7 DISCRETION OF DIRECTORS
Any matter provided herein to be determined by the directors will be
determined by the directors in their sole discretion, and a determination so
made will be conclusive.
11.8 COUNTERPARTS AND FORMAL DATE
This Indenture may be executed in several counterparts, each of which
when so executed will be deemed to be an original and such counterparts together
will constitute one and the same instrument and notwithstanding the date of
their execution will be deemed to be dated as of the date first written above.
- SIGNATURE PAGE TO FOLLOW -
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IN WITNESS WHEREOF the parties hereto have caused their respective
corporate seals to be hereunto affixed attested by their signatures.
CRYSTALLEX INTERNATIONAL CORPORATION
/s/ Xxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxx X. Xxxx
Title: Executive Vice President
CIBC MELLON TRUST COMPANY
/s/ Xxxxxxxxx Xxxxxx
----------------------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Associate Manager
/s/ Xxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Account Manager
SCHEDULE A
TO A WARRANT INDENTURE
DATED AS OF AUGUST 27, 2003
(FORM OF WARRANT CERTIFICATE)
Certificate No.: __________ No. of Warrants: _______________
WARRANTS
EXERCISABLE TO ACQUIRE
COMMON SHARES
OF
CRYSTALLEX INTERNATIONAL CORPORATION
(Organized under the Canada Business Corporations Act)
THIS IS TO CERTIFY THAT, for value received, ___________________________________
_____________________________(the "HOLDER") is the registered holder of the
number of Warrants specified above ("WARRANTS") of Crystallex
International Corporation ("CRYSTALLEX") and is thereby entitled, to be issued
fully paid and non-assessable common shares ("COMMON SHARES") in the capital of
Crystallex, on the basis of one Common Share for each such Warrant, subject to
the limitation referred to below, by surrendering to CIBC Mellon Trust Company
(the "WARRANT AGENT") at its principal transfer offices in Vancouver, British
Columbia (or by facsimile transmission to the Warrant Agent with original
documents to the Warrant Agent within three business days thereafter) during the
exercise period hereinafter referred to, a certified cheque or bank draft made
payable to Crystallex in the amount of the Exercise Price as hereinafter
determined, this Warrant Certificate and a notice of exercise in the form set
forth in Schedule B annexed hereto duly completed and executed provided notice
is also sent to Crystallex by delivering to it a copy of such documents.
Surrender of this Warrant Certificate will be deemed to have been effected only
on personal delivery thereof to, or, if sent by mail or other means of
transmission, on actual receipt thereof by, the Warrant Agent at the office
specified above provided however that this Warrant Certificate will be deemed to
have been surrendered on the date of the facsimile transmission if this original
Warrant Certificate and the executed notice are received within three business
days of the date of the facsimile transmission.
This Warrant Certificate evidences Warrants of Crystallex issued or issuable
under the provisions of a Warrant Indenture (which indenture, together with all
instruments supplemental or ancillary thereto, is herein referred to as the
"WARRANT INDENTURE") dated as of August 27, 2003 between Crystallex and the
Warrant Agent, as agent. REFERENCE IS MADE TO THE WARRANT INDENTURE FOR
PARTICULARS OF THE RIGHTS OF THE HOLDERS OF THE WARRANTS AND OF CRYSTALLEX AND
OF THE WARRANT AGENT IN RESPECT THEREOF AND OF THE TERMS AND CONDITIONS UPON
WHICH THE WARRANTS ARE ISSUED AND HELD, ALL TO THE SAME EFFECT AS IF THE
PROVISIONS OF THE WARRANT INDENTURE WERE HEREIN SET FORTH, TO ALL OF WHICH THE
HOLDER, BY, ACCEPTANCE HEREOF, ASSENTS. TO THE EXTENT OF ANY INCONSISTENCY
BETWEEN THE TERMS OF THE WARRANT INDENTURE AND THE TERMS OF THIS WARRANT
CERTIFICATE, THE TERMS OF THE WARRANT INDENTURE SHALL PREVAIL. Crystallex will
furnish to the holder, on request and upon payment of a reasonable charge for
photocopying and postage, a copy of the Warrant Indenture.
The Warrants evidenced by this Warrant Certificate may be exercised by the
holder until 5:00 p.m. (Vancouver time) on August 27, 2005 (the "EXPIRY TIME").
On and after the date of any exercise of the Warrants evidenced by this Warrant
Certificate, the holder will have no rights hereunder except to receive within
five business days of such exercise certificates representing the Common Shares
thereby issued to him upon delivery of a certified cheque or bank draft payable
to the Warrant Agent in the amount of the Exercise Price as hereinafter
determined and this Warrant Certificate to the Warrant Agent at its principal
office in Vancouver, British Columbia After the Expiry Time, all rights under
any unexercised Warrant evidenced hereby will wholly cease and terminate and
this Warrant Certificate will be void.
A-1
Crystallex will not be obligated to issue any fraction of a Common Share on the
exercise of any Warrant.
No Common Share will be issued pursuant to any Warrant if the issuance of such
security would constitute a violation of the securities laws of any applicable
jurisdiction or require Crystallex to qualify or register such Common Shares in
any jurisdiction other than the United States.
The exercise price for each Warrant (the "EXERCISE PRICE") shall be
U.S.$________ , being 140% of the Current Market Price of the Common Shares as
at August 27, 2003. The Warrant Indenture provides for adjustments to the number
of Common Shares to be issued upon the exercise of the Warrants and the Exercise
Price, upon the occurrence of certain events set forth therein.
The warrants are redeemable in certain circumstances set forth in the Warrant
Indenture.
The Warrant Indenture contains provisions making binding on all holders of
Warrants outstanding thereunder resolutions passed at meetings of such holders
held in accordance with such provisions and instruments in writing signed by
holders of a specified majority of all outstanding Warrants.
On presentation at the principal office of the Warrant Agent in Vancouver,
British Columbia, subject to the provisions of the Warrant Indenture and on
compliance with the reasonable requirements of the Warrant Agent, one or more
Warrant Certificates may be exchanged at no cost to the holder for one or more
Warrant Certificates of different denominations evidencing in the aggregate the
same number of Warrants as the Warrant Certificate or Warrant Certificates being
exchanged.
The Warrants evidenced by this Warrant Certificate may be transferred, only upon
compliance with the conditions prescribed in the Warrant Indenture, on the
register of transfers to be kept at the principal office of the Warrant Agent in
Vancouver, British Columbia by the holder or his executors, administrators or
other legal representatives or his or their attorney duly appointed by an
instrument in writing in form and execution satisfactory to the Warrant Agent,
and, upon compliance with such requirements and such other reasonable
requirements as the Warrant Agent may prescribe, such transfer will be duly
notified on such register of transfers by the Warrant Agent. Notwithstanding the
foregoing, Crystallex will be entitled, and may direct the Warrant Agent, to
refuse to record any transfer of any Warrant on such register if such transfer
would constitute a violation of the securities laws of any jurisdiction or
require Crystallex to qualify the Common Shares for distribution in any
jurisdiction of Canada.
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE "ACT") OR APPLICABLE STATE SECURITIES LAWS.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT AS TO THE SECURITIES UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED. THESE SECURITIES MAY NOT BE EXERCISED [BY OR ON
BEHALF OF A U.S. PERSON (AS DEFINED IN REGULATION S UNDER THE
ACT)] [INCLUDE ONLY FOR REGULATION S INVESTORS] UNLESS SUCH
EXERCISE IS REGISTERED UNDER THE ACT OR IS MADE PURSUANT TO AN
APPLICABLE EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THE SECURITIES SHALL NOT TRADE THE SECURITIES IN CANADA BEFORE
DECEMBER 28, 2003.
A-2
The holding of this Warrant Certificate will not constitute the holder a
shareholder of Crystallex or entitle him to any right or interest in respect
thereof except as otherwise provided in the Warrant Indenture.
This Warrant Certificate will not be valid for any purpose until it has been
certified by or on behalf of the Warrant Agent for the time being under the
Warrant Indenture. Time will be of the essence hereof.
IN WITNESS WHEREOF Crystallex International Corporation has caused this Warrant
Certificate to be signed by its officer duly authorized in that behalf as of
August 27, 2003.
CRYSTALLEX INTERNATIONAL CORPORATION
By: _____________________________________
Name: Xxxx X. Xxxxxxxxxxx
Title: President & CEO
This Warrant Certificate is one of the Warrant Certificates referred to
in the Warrant Indenture within mentioned.
CIBC MELLON TRUST COMPANY
By: _____________________________________
Authorized Signing Officer
A-3
SCHEDULE B
NOTICE OF EXERCISE
To: CRYSTALLEX INTERNATIONAL CORPORATION
And To: CIBC MELLON TRUST COMPANY
The undersigned holder of the Warrants evidenced by the within Warrant
Certificate hereby exercises its right to be issued Common Shares of Crystallex
International Corporation (or such other securities or property to which such
exercise entitles him in lieu thereof or in addition thereto under the
provisions of the Warrant Indenture mentioned in such Warrant Certificate) that
are issuable upon the exercise of such Warrants, on the terms specified in such
Warrant Certificate and Warrant Indenture and in connection therewith has
enclosed a certified cheque or bank draft payable to CIBC Mellon Trust Company
in an amount equal to U.S.$ for each Warrant hereby exercised.
The undersigned hereby irrevocably directs that the said Common Shares be
issued, registered and delivered as follows:
Name(s) in Full Address(es) Number(s) of Common Shares
------------------------ ---------------------- ----------------------------
------------------------ ---------------------- ----------------------------
------------------------ ---------------------- ----------------------------
(Please print full name in which certificates for Common Shares are to be
issued. If any securities are to be issued to a person or persons other than the
holder, the holder must pay to the Warrant Agent all eligible transfer taxes or
other government charges and sign the Form of Transfer.)
DATED this ____ day of ____________
)____________________________________
Witness ) Signature of Registered Holder
)
________________________________ ___________________________________
) Name of Registered Holder
________________________________
NOTE: The name of the Registered Holder of this Notice of Exercise must be
the same as the name appearing on the face page of the Warrant
Certificate to which this Schedule is attached.
Please check if the Common Share certificates are to be delivered at
the office where this Warrant Certificate is surrendered, failing
which such certificates will be mailed.
Certificates will be delivered or mailed within five business days
after the due surrender of this Warrant Certificate as aforesaid.
B-1
SCHEDULE C
FORM OF TRANSFER
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers to ______
________________________________________________________________________________
Warrants of Crystallex International Corporation ("CRYSTALLEX") represented by
the attached Warrant Certificate and does hereby appointas its attorney with
full power of a substitution to transfer the Warrants on the appropriate
register of the Warrant Agent.
DATED this ___ day of ________________
__________________________________________ ______________________________
Witness Signature of Transferor
Signature of Transferor must be guaranteed
______________________________
Name of Transferor
NOTE: The name of the Transferor on this Form of Transfer must be the same as
the name appearing on the face page of the Warrant Certificate to which
this Schedule is attached. The transfer must be consented to in writing
by Crystallex.
C-1
